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Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene

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Speaker 1: Jai Ley. We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. We

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Speaker 1: got some great guests in the studio here in New

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Speaker 1: York with this Mark Chance. They works Harriman, global head

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Speaker 1: of Currency Strategy and Lakshman Action than he is of

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Speaker 1: course of Economic Cycle Research, co founder and chief operations officer,

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Speaker 1: both of them joining us. Now, guys, great to have

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Speaker 1: you with us. Mark. I'm gonna get a hard time

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Speaker 1: for the next two hours about taking a vacation, so

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Speaker 1: your support would be welcome for the next seven minutes. Okay,

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Speaker 1: good to see you again. Good to see you, mate.

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Speaker 1: Let's start with the merchant markets. How do they catch

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Speaker 1: a break and where does the anchor come from? Because

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Speaker 1: Agentine ran Turkey of both try and yeah, I think

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Speaker 1: there's the ironic thing. Argentina hyped rates sharply last week.

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Speaker 1: Currency sells off. Turkey reluctant to raise interest rates, currency

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Speaker 1: sells off. I think that means to me We're in

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Speaker 1: a variosh market for emerging markets, and we're gonna stay

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Speaker 1: that way for quite a while. Concigion risk Mark, I

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Speaker 1: think there's some contagious I think when you're talking about

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Speaker 1: that earlier with India, I think it's primarily a contagion story.

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Speaker 1: But I think Argentina, Turkey, South Africa, Brazil, Russia, these

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Speaker 1: are policies, not just the federal reserve, but these are

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Speaker 1: domestic policies, policy mistakes, or policies that repel investors as

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Speaker 1: opposed to attract them election man. When it comes to

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Speaker 1: emerging markets, that's a technical issues, liquidity issues, but there's

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Speaker 1: fundamental ones. To South Africa entering a recession this morning.

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Speaker 1: What's happening with the fundamental to some of these big economies, Well,

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Speaker 1: I think it's really uh in our view, happening in

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Speaker 1: the context of a global industrial slowdown. So you have

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Speaker 1: a cycling down, a deceleration of global industrial growth, and

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Speaker 1: e m is Q to the industrial growth. They're very

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Speaker 1: sensitive to that. They're big exporters, and that's the backdrop

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Speaker 1: on which a lot of these other structural vulnerabilities are

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Speaker 1: being exposed very quickly. Then a lot when you mentioned

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Speaker 1: this earlier the idea of a global slowdown and UH,

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Speaker 1: you're so vector based. What is the vector in the

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Speaker 1: U S economy? Now, given em weakness, given you know

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Speaker 1: the dollar d X y five five dollar strength, I

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Speaker 1: think that our work shows the vector is to the downside.

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Speaker 1: We're we've we've peaked in growth and we're and we're

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Speaker 1: beginning to decelerate. I think it's very hard to see

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Speaker 1: with that four GDP growth in Q two, but it

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Speaker 1: is there when you look at the broad coincident data

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Speaker 1: broader than GDP UH, and it makes sense in the

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Speaker 1: context of a global economy which is decelerating. So our

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Speaker 1: view is that all of this great strength that we've

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Speaker 1: seen for the past over a year now, UH is cyclical.

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Speaker 1: It's not a breakout, not a big structural breakout. And

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Speaker 1: that's probably the most important fundamental backdrop piece to discover,

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Speaker 1: and that goes to the vector of the dollar strength.

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Speaker 1: We've had huge variants interview to interview, mark on the

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Speaker 1: dollar stronger, weaker, the impulse of the second derivative of

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Speaker 1: dollar movement. What is the synthesis You have a Brown

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Speaker 1: Brother's Hareman on the dollar. Do we still look for

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Speaker 1: the dollar taste strengthen driven by the policy mix. In

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Speaker 1: the US, it's a tight tight monetary policy. Looser fiscal

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Speaker 1: policy tends to be the best policy mix for country's currency.

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Speaker 1: You've got that positive for the US, which also boosts

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Speaker 1: US growth, which lets us be strong enough to withstand

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Speaker 1: some of these trade tensions and the trade warriors we're picking.

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Speaker 1: And I said, I think that this coupled with these

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Speaker 1: problems and emerging markets and the slow downways thing, I

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Speaker 1: think more's pronounced in Europe in the US right now.

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Speaker 1: How do you respond then? And I'm beginning to see

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Speaker 1: this phrase plaza accord creep in here every once in

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Speaker 1: a while. The fact is, when dollar gets strong, it's

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Speaker 1: chart gets pointy and abruptly reverses because of political reasons.

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Speaker 1: Are we anywhere near that where the politicians step in

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Speaker 1: and say enough of a stronger dollar. But I think

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Speaker 1: that what happened at the plaza it's not just US

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Speaker 1: objecting to the dollar strength, but Europe was objecting, and

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Speaker 1: Japan was objecting to their currency's weakness. This was different

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Speaker 1: this time, is that only the U s really is objecting.

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Speaker 1: Once in a while, Trump says something about the dollar,

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Speaker 1: but so far. I'd say Europe sees the weaker currency,

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Speaker 1: it's not so problematic. The same thing with Japan. I

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Speaker 1: think Japan would welcome a weaker yet. And so I

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Speaker 1: think that right now we haven't reached a paint specihold

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Speaker 1: is sufficient to get a coordinated response. But mark the

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Speaker 1: way we're framing this conversation at the moment is that

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Speaker 1: the dollar strength is despite the trade dispute. Could we

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Speaker 1: ask the question that it might be because of the

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Speaker 1: tride dispute. The flow story has been really important to

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Speaker 1: buy America has been a big theme off the back

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Speaker 1: of this. Yeah, so I think the two are really

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Speaker 1: related in the sense that, uh, what's happening is partly

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Speaker 1: it's the flows out of emerging markets out of Europe

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Speaker 1: for I think three or four weeks in ago, flows

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Speaker 1: out of those markets into the US. That's helping strengthen

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Speaker 1: the dollar. And then you've got this policy mix, it's

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Speaker 1: helping draw this capital of the US. That's why I

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Speaker 1: really think that it's really hard for emerging market countries

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Speaker 1: or even countries like Australia to fund a current account

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Speaker 1: deficit when you've got the US raising interest rates and

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Speaker 1: sucking in the world savings. What does a strong dollar

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Speaker 1: launchment do within the economic cycles? I mean, it's not

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Speaker 1: part of the discussion yet, it is a discussion of

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Speaker 1: everything we do. If if we get Chandler's strong dollar,

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Speaker 1: what does that due to the impulse of your economic cycles? Well, um,

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Speaker 1: it's a great question, and I don't exactly know the

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Speaker 1: answer I have to I don't want to produce it.

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Speaker 1: I don't I don't want to put the Tuesday before

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Speaker 1: school starts. No one has any answers. What do you

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Speaker 1: mean that? I've heard that one? But UM, I don't

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Speaker 1: want to predict the predictors, but I would say, um,

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Speaker 1: a possible surprise out there. Um, everybody's lined up one

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Speaker 1: way and they've been waiting all you know, years four

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Speaker 1: interest rates on the long end to go up because

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Speaker 1: of strong growth and strong and full right, And UM,

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Speaker 1: let's think about on this issue of the dollar. What

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Speaker 1: could happen? It might take the sting out of some

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Speaker 1: of the inflation. What if I'm just positing this and

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Speaker 1: I'm seeing a little glimmer in the leading indicators. What

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Speaker 1: if UH inflation doesn't run away? What if inflation starts

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Speaker 1: to top out here? UH, and that that's down the line.

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Speaker 1: I think I'm typically the you know, our stuff is

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Speaker 1: way out in front. I think that's down the line.

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Speaker 1: But if you have inflation not running away and topping out,

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Speaker 1: that starts to shift the dynamic a little bit. With

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Speaker 1: us in the Mark Chandler to get this September started,

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Speaker 1: it's got to strength of story and J and and

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Speaker 1: d M. So let's get the thoughts. Now. We have

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Speaker 1: George Santa b Alos, Deutsche Banks Global Cohead of FX Research. George,

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Speaker 1: good morning, to thank you for you wanting to guess.

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Speaker 1: Just walk me through what you think underpins that dollar

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Speaker 1: strength at the moment. A good morning from London. So

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Speaker 1: the big driver is obviously emerging market currencies that are

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Speaker 1: leading um this this weakness and the dollar strength. And

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Speaker 1: if you look at what's going on in terms of flows,

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Speaker 1: you're seeing continued outflows from emerging market funds and a

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Speaker 1: very large rise in the influence of short term government

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Speaker 1: bond funds in the US. So there's really a portfolio

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Speaker 1: rebalancing story going on on the back of this higher

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Speaker 1: risk free rate in the US. And what's interesting is

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Speaker 1: a lot of the e M external drivers have actually

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Speaker 1: turned slightly better e M data surprises, which were negative

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Speaker 1: of turned more positive over the summer months. US yields

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Speaker 1: are stabilized, So this really is about this ongoing portfolio

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Speaker 1: rebalancing effect that kicked off in Q two of this year. George.

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Speaker 1: I spoke to Muhammad Alarian recently about this, and he

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Speaker 1: basically said, you can break this down into two parts.

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Speaker 1: You need a credible external anchor how from the RMF.

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Speaker 1: Argentina has done that. You need credible domestic dick policies.

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Speaker 1: Argentina is doing that, and yet Argentina still can't tighten

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Speaker 1: things up and stabilize things. Why do you think that is, George, Well,

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Speaker 1: let's see, because the latest round of announcements has only

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Speaker 1: just happened, so I think the jury is still owed

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Speaker 1: in terms of whether this latest attempt at civilization will succeed.

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Speaker 1: After all, we have to remember now interest rates are

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Speaker 1: at nearly six so it's extremely painful for someone to

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Speaker 1: be long dollars against the Argentina pesos. So I think

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Speaker 1: they've done a lot more compared to two weeks ago.

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Speaker 1: And let's wait until over the next couple of weeks,

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Speaker 1: but it might look a bit more positive. George Survey

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Speaker 1: lets you do a lot of fancy PhD kind of

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Speaker 1: effects work in that. Would you explain what six zero

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Speaker 1: six interest rates? Or you know, John helped me here

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Speaker 1: tw in Turkey? What do those interest rates mean to

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Speaker 1: mere mortals? Well, simply put, it's just extremely expensive for

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Speaker 1: a speculator to to be trying and pushing the dollar hiring.

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Speaker 1: What about against the pacer for the public, you know,

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Speaker 1: small businessmen in instant what's it mean? Ultimately, if you

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Speaker 1: look at what's going on to emerging market currency this year,

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Speaker 1: there is one simple message, which is the currencies and

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Speaker 1: economies that are running current account deficits just cannot attract

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Speaker 1: the capital anymore. If you're running a deficit, it means

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Speaker 1: you're buying more than you're selling to the rest of

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Speaker 1: the world. So ultimately, part of this policy adjustment you

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Speaker 1: raise rates aggressively, which means you can press imports, you

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Speaker 1: compress domestic demand, you can press consumption. Simply put, you

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Speaker 1: just have to buy less from the rest of the world.

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Speaker 1: And part of that adjustment is the currency weakening as well.

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Speaker 1: And right now these rates aren't just sixty percent, they're

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Speaker 1: thirty percent. Real inflations running the thirty percent there's thirty

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Speaker 1: percent real interest rates. I mean, this is suffocan in

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Speaker 1: the economy. So we now have that classic EM dilemma.

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Speaker 1: Got an economy like South Africa slipping into a recession

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Speaker 1: this morning reporting negative GDP growth for a second consecutive quarter.

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Speaker 1: And George, my question basically is how much damage is

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Speaker 1: being done as these economies trying to manage what is

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Speaker 1: set before them, which is upside risk to inflation and

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Speaker 1: downside risk to growth. And they're doing their best to

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Speaker 1: contain the upside risk to inflation. What happens to growth, Well,

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Speaker 1: there is definite damage to growth that's being done, and

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Speaker 1: you can see that in in the negative GDP numbers

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Speaker 1: out of South Africa, obviously, Argentina and Turkey. We're now

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Speaker 1: going to be seeing a stagflationary type of situation. However, unfortunately,

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Speaker 1: part of this damage is the solution that you need

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Speaker 1: growth to slow down, so imports slow down, and all

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Speaker 1: of a sudden, your external balance starts to improve your

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Speaker 1: current account, which is very large in in deficit at

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Speaker 1: the moment in Turkey starts turning. And that is really

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Speaker 1: the key points one when one starts to look for

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Speaker 1: EM stabilization's two things. One is value, So when do

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Speaker 1: the currency start becoming very very cheap. They can't keep

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Speaker 1: falling forever. And two is the external account starting to improve?

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Speaker 1: So that process has begun. I'm not yet sure it's

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Speaker 1: enough for the op possibility, but we're definitely beginning the process.

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Speaker 1: Does the ex excess in this pending or maybe crisis

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Speaker 1: is it radically different than in previous upsets? I mean,

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Speaker 1: if we're massively floating, if we've got all this sophisticated

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Speaker 1: derivative stuff and fun flows and all the other creative

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Speaker 1: stuff you guys live every day, is it is it

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Speaker 1: a different timeline than it was other enjoyments that we've had. Well,

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Speaker 1: every every crisis has its similarities um and differences. But

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Speaker 1: I would say that the big difference at this time

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Speaker 1: if you look at a place like large external government

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Speaker 1: debt requirements, this is private sector funding. It's the private

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Speaker 1: sector that's too extended and as a result, the adjustment

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Speaker 1: needs to happen via the private sector as well, which

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Speaker 1: again goes all the way back to this need to

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Speaker 1: just shrink current account deficits to gather closer into balance.

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Speaker 1: And then you'll see places like Turkey, India, Indonesia, They

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Speaker 1: look much better in a year, John, I'm bringing up

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Speaker 1: here Brazil in to day. It just moved in. I'm

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Speaker 1: just getting up a three day. Yeah, just spiked up

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Speaker 1: here at four point one eight. And if I go

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Speaker 1: over to the Bloomberg guess we can do on the

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Speaker 1: Bloomberg terminal in your car. If I look at the

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Speaker 1: twenty four day chart, we're almost back to August. How

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Speaker 1: important is today, George, for Argentina assets when we open

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Speaker 1: up and we start trading at nine am Eastern the

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Speaker 1: official the formal start to pay, so trade inc. How

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Speaker 1: important is it that that pace rallies. Well, I think

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Speaker 1: it's very important. In the Argentina has been at the

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Speaker 1: forefront of of of this e mm wine since the

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Speaker 1: start of the year, so one of the first places

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Speaker 1: where we would need to see stability as a signpost

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Speaker 1: for for broader em stabilities. Really, Argentina, as you did mention,

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Speaker 1: Argentina has been trying to do most of the things right.

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Speaker 1: So um, it's the pacer can't stabilize and it will

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Speaker 1: be difficult for others. So every day, Um, every day

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Speaker 1: is of course important. I don't want to just overstress

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Speaker 1: the first day essentially when people are back from the

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Speaker 1: from the holidays, but into the rest of Q four

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Speaker 1: it is really important that Argentina stabilizers given how much.

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Speaker 1: So final question George on this part of the conversation

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Speaker 1: is what is the feedback loop if there is one

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Speaker 1: into the U S economy from the mess that we're

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Speaker 1: experiencing in emerging markets right now. Well, it's a very

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Speaker 1: interesting question. And if you go back to taper tantrum,

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Speaker 1: essentially you had the initiation of of of the end

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Speaker 1: of que Initially the FED was sounding hawkish, It caused

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Speaker 1: huge amount of turbulus turbulence in em and then you

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Speaker 1: have the knock on impact in terms of FED policy. Um,

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Speaker 1: now it is a bit too early for that. I

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Speaker 1: would argue that it's not showing up in the data yet.

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Speaker 1: But if they starts continue until the end of the year,

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Speaker 1: we will very soon be hearing from the FED that

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Speaker 1: external headwinds are becoming stronger. And remember the approaching neutral

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Speaker 1: policy as well. So it's different to be sound polkish

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Speaker 1: when right to close it to two than zero. One

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Speaker 1: of the things we do here, folks, George, save OLiS

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Speaker 1: with us with Deutsche Bank. Well, in just under twenty

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Speaker 1: five minutes, the Senate Judiciary Committee will begin four days

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Speaker 1: of hearings on the nomination of Brett Kavanaugh to the U. S.

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Speaker 1: Supreme Court. Here to tell us about it is Kimberly Robinson,

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Speaker 1: Bloomberg Law's Supreme Court reporter. Kimberly, thank you very much

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Speaker 1: for being with us. What exactly can we expect to

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Speaker 1: hear from these hearings? Will it be Republicans in concerted

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Speaker 1: support for the nomination and Democrats trying to score political points?

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Speaker 1: What will actually happen as a result of these hearings, Well,

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Speaker 1: we're going to drop four days of hearing. The first

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Speaker 1: day will just be introductions, So each of the one

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Speaker 1: been a Judiciary Committee members will uh introduce uh what

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Speaker 1: kinds of questions they are going to be asking him uh,

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Speaker 1: And those questions will take place on Wednesday and Thursday,

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Speaker 1: so we'll get a good sense of what we're likely

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Speaker 1: to hear from the senators later on today. What is

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Speaker 1: going to be the focus of the questioning, let's say

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Speaker 1: from the Democrats, Well, we're likely to hear a lot

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Speaker 1: about what Brett having on personal views and are on abortion,

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Speaker 1: on LGBT rights, and on healthcare. And these are all

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Speaker 1: issues where he's expected to move the Supreme Court once

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Speaker 1: finally confirmed. And what do you believe his response will be?

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Speaker 1: Will be? Will it be to offer detailed, uh sort

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Speaker 1: of personal anecdotes or is it going to be you know,

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Speaker 1: kind of written from read from a state mint. Well,

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Speaker 1: since the nine nineties, uh, Supreme Court nominees typically don't

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Speaker 1: answer very many questions, will answer, uh, you know, what

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Speaker 1: they've previously ruled upon before, but they're not going to

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Speaker 1: be giving a lot of details on how uh they

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Speaker 1: view abortion and LGBT rights. And that's because they say

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Speaker 1: that they don't want to seem like they've already pre

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Speaker 1: judged an issue uh that might come before them while

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Speaker 1: they're on the Supreme Court. Let me ask you jaded

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Speaker 1: and cynical question, which is appropriate on this Tuesday. It's

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Speaker 1: all to me hugely predictable. Am I right about that?

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Speaker 1: Or do you look for surprises along the way. Well,

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Speaker 1: we really haven't gotten a lot of surprises from Supreme

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Speaker 1: Court confirmation hearing since the nine nineties when we got

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Speaker 1: a bombshell on Clarence Thomas. You know, Brett Kavanaugh has

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Speaker 1: been practicing answer to these questions for weeks. He's been

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Speaker 1: through what they call murder boards where they simulate questions

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Speaker 1: from the senators. So all of these answers are likely

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Speaker 1: to be vetted and okay, so so the questions, the

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Speaker 1: questions are structured. He's been rehearsed, rehearsed, in veted. Should

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Speaker 1: our listeners tune in to these hearings or for a

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Speaker 1: pro like you, Kimberly, is it just you just know

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Speaker 1: what's you know, you just know what's going to happen. Well,

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Speaker 1: if if the confirmation hearing for Neil Gorsus or any

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Speaker 1: sign it's going to be pretty predictable. We'll get a

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Speaker 1: lot of hard questions from from Democrats and a lot

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Speaker 1: of saucis from Republicans. And Brett Kavanaugh is likely to

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Speaker 1: do very well in these confirmation hearing. He's the very

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Speaker 1: likable guy. Will probably see a lot of that. But

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Speaker 1: I wouldn't expect to learn very much that we don't

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Speaker 1: already know. Well, Kimberly, if this is indeed the case, well,

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Speaker 1: the Democrats use this as a platform for the mid

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Speaker 1: term elections. Yes, we're seeing that very much. That the

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Speaker 1: issues that Democrats are really focusing on seemed to be

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Speaker 1: yeared towards uh, you know, energizing theirs for the midterm elections. Again,

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Speaker 1: abortion is going to be a huge issue during these

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Speaker 1: confirmation hearing. Um, and we've already seen a lot of

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Speaker 1: opposition show up here. There's a rally over the Supreme

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Speaker 1: Court there women dressed up his handmaidens here in the

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Speaker 1: just outside the hearing room. Um. So Democrats very much

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Speaker 1: are using this as something to project into the midterm elections.

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Speaker 1: All right, Well, I guess this is something that's going

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Speaker 1: to go on for four days. And is there any

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Speaker 1: chance that we're going to get any kind of details

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Speaker 1: about his past opinions that would be let's say newsworthy

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Speaker 1: or has that already been released. Well, he will likely

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Speaker 1: get some questions about how he's used presidential powers. Uh

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Speaker 1: that's uh something that he's ruled on a lot and

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Speaker 1: something that he's written about a lot. So we can't

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Speaker 1: expect him to answer, uh some of those questions. And

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Speaker 1: like some of the questions will probably get on abortion.

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Speaker 1: And depending on what he says, it could be interesting,

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Speaker 1: um to see how he's gonna rule against the president

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Speaker 1: or with the president who nominated Thank you for the update.

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Speaker 1: Kimberly Robertson greatly appreciated Bloomberg government. I think it nailed

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Speaker 1: us that this is just like boiler plate, I mean,

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Speaker 1: is a general statement Pim. When you suggested post bark,

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Speaker 1: everything changed, David Kotuk with us, We've had a wonderful

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Speaker 1: eclectics set of guests to get us back into September

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Speaker 1: and in season, and it is good for surveillance to

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Speaker 1: end and end strong. With David Kotak, Cumberland and five

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Speaker 1: advisors synthesizing economics into what to do with your money?

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Speaker 1: Let's just start with a positioning, David, where are you

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Speaker 1: within your portfolios? Cash, bonds, equities, bonds um barbelled That's

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Speaker 1: an easy one and we've been in that mode for

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Speaker 1: a while. We're going to stay there. In our leveraged

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Speaker 1: volatility that's a high frequency trading strategy. Or a hundred

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Speaker 1: percent in cash in core US in cash, and in

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Speaker 1: the diversified US ten percent in cash. And they are

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Speaker 1: biased towards domestic US small mid cap and underweighted risk

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Speaker 1: elements in the international trade war sectors. Where do you

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Speaker 1: hide in equities? If somebody says I've got to be

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Speaker 1: in equities but I've got a risk profile, liked ko talk.

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Speaker 1: Where do you hide within sectors? And e t f

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Speaker 1: s in equities were overweight, healthcare were overweight, the banking

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Speaker 1: financial sectors focused in the United States or overweight defense

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Speaker 1: in the industrial sector. And we like transports because domestic

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Speaker 1: US transport, the t F is just on fire and

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Speaker 1: stays that way. There's a shortage of people. Prices are

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Speaker 1: gonna rise. There's pricing power in transportation, particularly truckers and rails.

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Speaker 1: David Kotalk, can you tell us what would change for

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Speaker 1: your clients and for your investing strategy if there were

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Speaker 1: to be changes to the capital gains tax code and

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Speaker 1: capital gains were index to inflation. Would that change anything

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Speaker 1: in the media term, Tim, I don't think so. I

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Speaker 1: think it makes a little bit of difference. After that, Uh,

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Speaker 1: it would make strategic changes. But we already had tax reduction.

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Speaker 1: We're already at a tax rate where a couple of

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Speaker 1: points difference I don't think makes much difference. I think

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Speaker 1: it's a bigger thing right now. It's right on our

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Speaker 1: radar screen. It's this expiration of the tax benefit of

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Speaker 1: funding and underfunded defined benefit pension liability. It's coming up

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Speaker 1: on the fift September and our view, it's been flattening

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Speaker 1: the yield curve because of the unusual appetite for strips.

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Speaker 1: There's a reason to explain how this, how this works,

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Speaker 1: and I mean because not many people necessarily have a

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Speaker 1: defined benefit plan. Quick summary, there's a tax code change.

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Speaker 1: So if you have an unfunded liability to define benefit

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Speaker 1: pension plan and you fund it today, you get a

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Speaker 1: deduction at a thirty five percent tax rate. If you

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Speaker 1: wait till the end of this month, it's that's a

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Speaker 1: huge incent of to fund it. Secondly, the pen pension

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Speaker 1: Benefit Guarantee Corps premiums are out and those premiums favor

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Speaker 1: using long term treasury strips, and the strip appetite has

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Speaker 1: exceeded in our estimate, the action of the thirty year

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Speaker 1: treasury in the last few months. That changes in a

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Speaker 1: manner of weeks. How what the effects will be will

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Speaker 1: see him in October. October is one of those months

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Speaker 1: that investors mark on their calendar in red. Isn't it

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Speaker 1: something about Halloween comes? Maybe this drop come early? Have

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Speaker 1: you been this much in cash? You know a blended portfolio,

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Speaker 1: you know a mutual funds typically for maybe outrageous is

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Speaker 1: five percent in cash? You do I understand two zero

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Speaker 1: in cash core, ten in the diversified, and then the

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Speaker 1: high frequency trading strategy, a hundred in cash. We sold

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Speaker 1: out of the high frequency trade strategy. It's mathematically driven, Tom,

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Speaker 1: It's not subject to human emotion. Oh, don't give me that.

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Speaker 1: Come on, you're sitting in a boat up in Maine fishing,

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Speaker 1: and you know you just said go to cas. That's

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Speaker 1: why he has no no that the high frequency trading

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Speaker 1: it can be run from a boat in Maine. It's

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Speaker 1: the math that drives. What did the math says? No,

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Speaker 1: you had it's it's a lot of computations of bottom

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Speaker 1: line was there was asymmetric risk, disproportionate in market based prices,

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Speaker 1: move and we moved and it's so far, great sale.

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Speaker 1: What's the bogey for this year for people? Are they

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Speaker 1: all looking for really sophisticated I think the bogies for

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Speaker 1: the next several years are mid single digit returns. I

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Speaker 1: think the long party of is over. We have headwinds.

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Speaker 1: We have to be satisfied. Don't be greedy, be satisfied

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Speaker 1: with Oh, take mid single digits, compound them and go

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Speaker 1: fishing more often. The biggest issue here is this. If

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Speaker 1: there is a settlement of trade war China US Canada,

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Speaker 1: peace breaks out, everything's wonderful. Trump actually finds a smile

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Speaker 1: to where when he looks in the mirror, then we

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Speaker 1: have a whole different arrangement. But I don't see that happening.

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Speaker 1: Would you learn up? And what'd you learn up? From

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Speaker 1: your really important guests? That you take the Leans lodge?

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Speaker 1: You go? Where is it firsts way north of Katadin? Right, Well,

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Speaker 1: it's a sort of at the distance of a Katad

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Speaker 1: and you have to think Bang or May and then

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Speaker 1: two hours north to the Canadian border. Takeaway with simple

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Speaker 1: I could summarize the takeaway. We have thirty forty years

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Speaker 1: of a numeracy driven decision tree inflation, earnings, numbers, pathways,

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Speaker 1: the central banks were used to new mercy. Trade is

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Speaker 1: cliffs and shocks. Cliffs and chocks. There are no z

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Speaker 1: scores on what happens with trade. This is a new regime.

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Speaker 1: We're not used to it and we haven't seen anything

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Speaker 1: like in a long time. How many people are up there?

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Speaker 1: Just as a general idea, you have ten minds, ten

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Speaker 1: smart people. Well, we this is the largest Labor Day

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Speaker 1: crowd ever twenty seven. Alright, I knew there had to

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Speaker 1: be an explanation. Well, and look how the Phillies are doing.

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Speaker 1: But but seriously, here does that crew look at the

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Speaker 1: moment we're in as a nation. Is a one off?

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Speaker 1: Or do they see a staying hour to Trump theocracy,

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Speaker 1: Trump theory? Well, massive, massive debate. We had everything, all

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Speaker 1: political views. The bottom line is no consensus in the group,

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Speaker 1: although risk elements rising, rising rising. If risk elements are

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Speaker 1: rising and that's the consensus view of what would it

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Speaker 1: do to get you to be contrary? I'd want to

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Speaker 1: see some movement away from belligerency and ugliness and some

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Speaker 1: diplomacy instead of bullying. We had Trump hard right Trump supporters,

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Speaker 1: we had Sanders, socialists there, we had everything in the mix.

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Speaker 1: One common theme is this hateful belligerency accomplishes nothing within

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Speaker 1: this One final question David One R. C. Whalen put

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Speaker 1: out a photo this weekend from Lean's Lodge Beauty. Is

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Speaker 1: that just like one of the stuff to fish off

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Speaker 1: the wall and you took it flipped? No, that we

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Speaker 1: had a great fish. Have you ever seen a fish

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Speaker 1: that big cat out of that? I have one. Yeah,

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Speaker 1: I have one mounted on the wall even bigger. Yes,

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Speaker 1: that was quite a sturgeon. That was quite a sturgeon.

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Speaker 1: Then I love your sturd to picture. Very good, David Kotalk,

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Speaker 1: Thank you so much for an updated That's the most

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Speaker 1: cautious pain I've heard, Mr Kotalk, and sometimes yes, thanks

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Speaker 1: for listening to the Bloomberg Surveillance podcast. Subscribe and listen

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Speaker 1: to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform

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Speaker 1: you prefer. I'm on Twitter at Tom Keane before the podcast.

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Speaker 1: You can always catch us worldwide. I'm Bloomberg Radio