1
00:00:02,560 --> 00:00:23,800
Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

2
00:00:15,120 --> 00:00:19,560
Speaker 2: A single best idea, and since we've had two hours sleep,

3
00:00:19,640 --> 00:00:21,600
Speaker 2: I think two nights in a row is a collective

4
00:00:21,640 --> 00:00:26,800
Speaker 2: team here at Bloomberg's Surveillance that we're gonna make this

5
00:00:26,920 --> 00:00:31,560
Speaker 2: quick today, but we can't because the guest quality today

6
00:00:31,680 --> 00:00:34,920
Speaker 2: was so much. I can't say enough about the conversation

7
00:00:35,600 --> 00:00:39,479
Speaker 2: with ed El Husseini and Ira Jersey. We broke a

8
00:00:39,560 --> 00:00:41,960
Speaker 2: rule at the beginning of the nine o'clock hour and

9
00:00:42,000 --> 00:00:48,519
Speaker 2: we talked very sophisticated short term paper fixed income stuff

10
00:00:49,080 --> 00:00:52,240
Speaker 2: like what pros in the street talk about. We really

11
00:00:52,280 --> 00:00:56,960
Speaker 2: try to stay jargon free, and ed ed L. Husseini

12
00:00:57,080 --> 00:00:59,560
Speaker 2: of Columbia Thread Needle was actually quite good about that.

13
00:01:00,080 --> 00:01:03,160
Speaker 2: I can't say it about Ira Jersey. He was on fire.

14
00:01:03,240 --> 00:01:06,600
Speaker 2: He is a true expert for Bloomberg Intelligence on the

15
00:01:06,640 --> 00:01:10,600
Speaker 2: short term market, what I call the trust market. And

16
00:01:10,640 --> 00:01:13,040
Speaker 2: you know who's looking at that right now, the Fed.

17
00:01:13,080 --> 00:01:15,240
Speaker 2: Here's Ira Jersey on the FED.

18
00:01:15,520 --> 00:01:18,240
Speaker 3: I think the Federal Reserve has a job to do here,

19
00:01:18,360 --> 00:01:20,479
Speaker 3: and it's more of a traditional job that we've kind

20
00:01:20,480 --> 00:01:23,640
Speaker 3: of forgotten about over the last seventeen or eighteen years,

21
00:01:23,680 --> 00:01:25,920
Speaker 3: and that's that they are the lender of last resort

22
00:01:26,080 --> 00:01:29,000
Speaker 3: and who are they going to lend to at this point. Well,

23
00:01:29,600 --> 00:01:34,200
Speaker 3: they've created some liquidity programs that just haven't worked the

24
00:01:34,200 --> 00:01:36,960
Speaker 3: way that they had hoped. So there's the standing REPO

25
00:01:37,080 --> 00:01:40,480
Speaker 3: facility that they thought would be able to replace the

26
00:01:40,520 --> 00:01:44,400
Speaker 3: traditional open market operations, liquidity operations that they had done

27
00:01:44,760 --> 00:01:47,160
Speaker 3: every day. They used to do these operations every single

28
00:01:47,240 --> 00:01:50,840
Speaker 3: day prior to two thousand and eight. But it's not

29
00:01:50,920 --> 00:01:53,880
Speaker 3: working because it's design. It has design flaws, and you

30
00:01:53,920 --> 00:01:56,280
Speaker 3: know that's probably too wonky for most of your listeners.

31
00:01:56,680 --> 00:02:00,240
Speaker 3: But let's think about the Federal Reserve as a first

32
00:02:00,280 --> 00:02:03,800
Speaker 3: step doing traditional open market operations, just like it did

33
00:02:03,840 --> 00:02:07,160
Speaker 3: after the REPO hiccup in twenty nineteen. So they do overnights,

34
00:02:07,200 --> 00:02:11,080
Speaker 3: they do one week repos. They basically they basically allow

35
00:02:11,360 --> 00:02:13,720
Speaker 3: balance sheets to expand a little bit for people to

36
00:02:13,760 --> 00:02:16,880
Speaker 3: take advantage of relative value opportunities in the treasury market.

37
00:02:17,160 --> 00:02:19,840
Speaker 3: And I agree with Ed that is the you know,

38
00:02:20,120 --> 00:02:22,680
Speaker 3: that would be a beneficial outcome. The second thing that's

39
00:02:22,800 --> 00:02:25,120
Speaker 3: very easy to do that you know, I hope that

40
00:02:25,160 --> 00:02:28,320
Speaker 3: the FSOC, the Financial Stability Oversight Council, gets together in

41
00:02:28,360 --> 00:02:31,400
Speaker 3: an emergency meeting soon and says, hey, let's do something

42
00:02:31,440 --> 00:02:34,119
Speaker 3: that we were thinking about doing anyway, and just get

43
00:02:34,200 --> 00:02:39,280
Speaker 3: rid of the supplementary leverage ratio from treasury. So exempt

44
00:02:39,280 --> 00:02:42,680
Speaker 3: treasuries from some of the bank capital rules, that allows

45
00:02:42,720 --> 00:02:47,960
Speaker 3: balance sheets to expand. It incentivizes dealers and banks to

46
00:02:48,040 --> 00:02:50,880
Speaker 3: actually buy some treasuries. Those are two easy things that

47
00:02:50,919 --> 00:02:54,440
Speaker 3: could be done today, right, So it's not And those

48
00:02:54,480 --> 00:02:56,919
Speaker 3: aren't things that are unusual either. We did do them

49
00:02:56,919 --> 00:02:58,000
Speaker 3: in March of twenty twenty.

50
00:02:58,160 --> 00:03:02,280
Speaker 2: The advantage of a podcast, you can rewind it and

51
00:03:02,480 --> 00:03:06,680
Speaker 2: listen to that again. That is a window into the

52
00:03:06,760 --> 00:03:11,480
Speaker 2: adult perspective of Bloomberg Intelligence. There unfixed income our Jersey,

53
00:03:11,960 --> 00:03:15,680
Speaker 2: but Gina Martin Adams today, inequities, Damien Sassauer and em

54
00:03:15,720 --> 00:03:20,840
Speaker 2: these people are grizzled Wall Street pros. We rarely do that,

55
00:03:21,000 --> 00:03:24,760
Speaker 2: but you just got a window into the inside baseball

56
00:03:24,800 --> 00:03:27,160
Speaker 2: and the trust market. That's what we try to do

57
00:03:27,240 --> 00:03:30,560
Speaker 2: here at Bloomberg Surveillance. We also like to look at

58
00:03:30,560 --> 00:03:35,320
Speaker 2: people's biography. Pat Haskell is at Blackrock and yes it's

59
00:03:35,400 --> 00:03:38,880
Speaker 2: municipal bonds, but far more than that, he has decade

60
00:03:38,920 --> 00:03:43,280
Speaker 2: of experience out of Union College of being on desks

61
00:03:43,400 --> 00:03:46,120
Speaker 2: and with a tension we saw this morning at four am,

62
00:03:46,520 --> 00:03:49,400
Speaker 2: five am to worry about hedge funds and all. It

63
00:03:49,440 --> 00:03:52,680
Speaker 2: was a joy to have Pat Haskell with us, just

64
00:03:52,720 --> 00:03:57,880
Speaker 2: to give perspective across previous crises. Here the gentleman from Blackrock.

65
00:03:58,000 --> 00:03:59,800
Speaker 4: If we step back, one of the great traders I

66
00:03:59,800 --> 00:04:02,480
Speaker 4: work with early in my career and a client of mine,

67
00:04:02,480 --> 00:04:06,200
Speaker 4: always said, first rule of trading always fade emotion. So

68
00:04:06,280 --> 00:04:08,200
Speaker 4: if we step back, now we think about this and

69
00:04:08,240 --> 00:04:10,160
Speaker 4: we're like, all right, what's going to happen? Is a

70
00:04:10,200 --> 00:04:11,760
Speaker 4: recession likely to result from this?

71
00:04:12,040 --> 00:04:12,280
Speaker 2: Yes?

72
00:04:12,920 --> 00:04:15,480
Speaker 4: Is the FED likely to have lower rates a year end?

73
00:04:15,600 --> 00:04:15,840
Speaker 2: Yes?

74
00:04:16,279 --> 00:04:17,880
Speaker 4: So when I think about that and I back into

75
00:04:17,920 --> 00:04:20,400
Speaker 4: my market and you look at some of the levels

76
00:04:20,400 --> 00:04:24,160
Speaker 4: that are available today, super attractive. And if you're going

77
00:04:24,200 --> 00:04:26,919
Speaker 4: to take a CounterPunch at this market and you're going

78
00:04:27,000 --> 00:04:28,920
Speaker 4: to buy something with a little bit of some high

79
00:04:29,040 --> 00:04:31,520
Speaker 4: quality spread, you're going to do something that's not affected

80
00:04:31,520 --> 00:04:35,440
Speaker 4: by global supply chains. What's that essential services immunities.

81
00:04:36,320 --> 00:04:38,560
Speaker 2: He repeated that a number of times, I don't have

82
00:04:38,600 --> 00:04:41,040
Speaker 2: the exact piece in front of me, but he mentioned

83
00:04:41,080 --> 00:04:44,520
Speaker 2: Pat mentioned a New York City muni that has been

84
00:04:44,600 --> 00:04:48,400
Speaker 2: so beat up and he believes it's of quality. He said,

85
00:04:48,400 --> 00:04:51,280
Speaker 2: it's been so beat up it generates a ten percent

86
00:04:51,440 --> 00:04:57,279
Speaker 2: equivalent return in that old triple text free New York state.

87
00:04:58,200 --> 00:05:01,120
Speaker 2: This is single best idea across nation and our commute.

88
00:05:01,160 --> 00:05:03,920
Speaker 2: Thank you so much for listening on YouTube and on

89
00:05:03,960 --> 00:05:12,120
Speaker 2: YouTube podcasts. It is single best idea.