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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along

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Speaker 1: with Jonathan Ferroll and Lisa Abramowitz. Daily we bring you

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Speaker 1: insight from the best and economics, finance, investment, and international relations.

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Speaker 1: To find Bloomberg Surveillance on Apple podcast, SoundCloud, Bloomberg dot

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Speaker 1: Com and of course on the Bloomberg terminal. We've got

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Speaker 1: to go to the Dartmouth Bubble to speak to David

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Speaker 1: blanche Flower, of course, professor of economics at Dartmouth That

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Speaker 1: college is experience at the Bank of England and a

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Speaker 1: student and a doubter of a fully employed United Kingdom

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Speaker 1: of fully employed America as well. There he was David

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Speaker 1: blanche Flower, John Major at seventy nine years old, coming

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Speaker 1: down the aisle at Westminster Abbey for the Queen's funeral.

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Speaker 1: And I've always adored the straight talking Norman Lamott, now

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Speaker 1: eighty years old. In nineteen two, I will editorialize they

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Speaker 1: did not hide. Where is Liz Trust No idea. We

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Speaker 1: have no idea where Liz Trust is, We have no

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Speaker 1: idea where the chancellor is. Tory MPs are hiding and

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Speaker 1: every news organization is trying to get ministers to come

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Speaker 1: on and talk about the chaos that's raining. So the

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Speaker 1: fact that they're hiding is a really a really bad thing.

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Speaker 1: And today is a big anniversary, So are not just

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Speaker 1: nineties seventy two. September ninety seventy six was when Dennis

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Speaker 1: Healy went to Heathrow Airport and the markets collapsed so

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Speaker 1: much he had to come back to Downing Strea go

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Speaker 1: to the i m F, and the i m F

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Speaker 1: as intervened in the last twenty four hours saying, you know,

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Speaker 1: you've got to reverse these policies. So we're seeing chaos

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Speaker 1: in the markets, but the numbers of us warn I

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Speaker 1: wrote a whole series of problems that this was coming

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Speaker 1: a month ago, saying, you know, the problem is the

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Speaker 1: markets will actually prevent amateurs doing stupid things. They haven't

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Speaker 1: prevented it. But now we're having to see these organizations

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Speaker 1: in of be in the Bank of England. But we

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Speaker 1: are now in chaos. Danny. The students at Dartmouth that

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Speaker 1: want to get a quality see with you are forced

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Speaker 1: to gunpoint to read the appendix of the Green Book

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Speaker 1: of the I m F. Their Financial Stability Book explained

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Speaker 1: for our radio and television audience worldwide what the Bank

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Speaker 1: of England does to study financial stability, including the stunning

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Speaker 1: headline an hour ago that they're worried about collateral calls

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Speaker 1: and the guilt market. Explain that mechanism at thread Needle Street. Well,

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Speaker 1: I mean it's it's in a sense the story that

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Speaker 1: I know. The book was thrown out last week. Um, well,

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Speaker 1: so what we saw was a statement by the Governor

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Speaker 1: of the Bank of England, who does not say I'm sorry,

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Speaker 1: I have to take this take it away. That's okay,

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Speaker 1: that was just a prime minister. Don't worry about it. Probably, Yeah,

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Speaker 1: I've had so many funcles the state of the statement

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Speaker 1: of the government of the Bank of England which caused

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Speaker 1: markets to crash. Again, the MPC doesn't he doesn't set

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Speaker 1: monetary policy. The Bank of England actually in the MPC

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Speaker 1: actually does. So what we saw today, I mean it's

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Speaker 1: in a sense I can't answer your question, top because

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Speaker 1: today what we saw was a monetary intervention that presumably

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Speaker 1: the Montary Policy Committee should have done. But the statement says,

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Speaker 1: this was not a meeting of the MPC, this was

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Speaker 1: financial policy meeting. I really don't understand. I mean, in

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Speaker 1: a sense, the book says the job of this. I

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Speaker 1: mean I remember going to the to the MPC and

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Speaker 1: I was told monetary policy is meant to be boring,

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Speaker 1: Monty policy is meant to calm nerves. In some sense,

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Speaker 1: the intervention today was about that. It was about trying

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Speaker 1: to calm nerves at the top end of the in

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Speaker 1: the long term yield market. But but I mean, we

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Speaker 1: we we saw that. They've also said that, I don't

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Speaker 1: know quite how the FBC said it, that the Bank

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Speaker 1: of Being is not going to do quantitative tightening this week.

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Speaker 1: So the answer is the book says calm nerves, be stable,

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Speaker 1: and it says the same thing to the to the Treasury.

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Speaker 1: But none of that has happened. So I'm afraid the

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Speaker 1: answer to your question is what that All of that

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Speaker 1: was probably true a week ago, but today we're seeing,

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Speaker 1: you know, the economics of pandemonium. If the economics of pandemonium,

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Speaker 1: I like that. Danny, if you were on the Bank

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Speaker 1: of England committee right now, what would you up to do? Well?

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Speaker 1: You asked me a question last week and he said

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Speaker 1: to me, would you ever vote for a rape wise?

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Speaker 1: And I sort of said, well, of course, But last

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Speaker 1: week I thought that wasn't the right through that. I

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Speaker 1: actually think that I would have banged on the Governor's

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Speaker 1: door today and I would have said, we have to

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Speaker 1: have a Monetary Policy Committee meeting and basically we probably

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Speaker 1: have to raise rates. We have to raise rates by

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Speaker 1: a hundred basebook. We have to stabilize the economy. Somebody,

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Speaker 1: somehow has to step in there and be the adults

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Speaker 1: in the room. So I think that the Bank has

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Speaker 1: to you know, this is going to cause all kinds

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Speaker 1: of crisis, but somebody somewhere has to calm nerves. So

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Speaker 1: I would literally be calling a meeting the NPC. Why

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Speaker 1: we haven't when I have no idea? Right, so these

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Speaker 1: decisions are made today? How come? I mean in a

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Speaker 1: sense of suspicion. If I was on the NPC, I

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Speaker 1: would have had the suspicion that the statement issued by

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Speaker 1: the Governor of the Bank of Being on Monday was

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Speaker 1: written by the Treasury. That would have been that would

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Speaker 1: have been a major issue to me. So what we've

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Speaker 1: been seeing is that the Chancellor's been meeted twice a

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Speaker 1: week with the Governor. So the whole structure that Tom

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Speaker 1: talked about is under threat. If you're an MPC member,

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Speaker 1: you say well, I want to sit here and talk

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Speaker 1: about this. You could certainly persuade me to vote for

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Speaker 1: a hundred basis point rise. But you know, Lisa asked

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Speaker 1: me last week, whatever I said, I said, of course

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Speaker 1: they went. But it's you know, a week's a long

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Speaker 1: time in the economics of pandemonia. Yes, certainly, in this

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Speaker 1: very moment we just have about a minute. But your

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Speaker 1: perspective going forward of the potential for some sort of

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Speaker 1: politicization of this Bank of England at a time when

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Speaker 1: if they were to raise by a hundred basis points

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Speaker 1: it could really torpedo household balance sheets with mortgages that

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Speaker 1: are tied to that rate. Well, absolutely, And I think

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Speaker 1: in a sense the big story was over the last

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Speaker 1: two days we've seen all the all the mortgage lenders

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Speaker 1: in the UK basically backing off. We've taken out their

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Speaker 1: products in the markets because they can't price mortgages because

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Speaker 1: of the chaos. So if you're in a position where you,

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Speaker 1: as a chancellor have actually ended up closing markets, I

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Speaker 1: don't know, somehow or Mother Carmy has to come, but

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Speaker 1: there is going to be and the rising house price

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Speaker 1: at the rising interest rate is going to kill the

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Speaker 1: housing market off. The UK was probably already in recession.

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Speaker 1: It's been driven into recession by this utterly incompetent set

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Speaker 1: of moves by the chances. And I don't know what

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Speaker 1: he can do. I'm not sure I know anything that

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Speaker 1: I do. It's not clear to me. You mean, if

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Speaker 1: he resigned, what are they going to do? I don't

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Speaker 1: know what. Danny, we didn't have you on to talk

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Speaker 1: about the Bank of England. How are you going to

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Speaker 1: do down in Florida with a hurricane? Are you gonna

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Speaker 1: lose all your great fishing spots. My house is sitting

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Speaker 1: on Santa Bell and I just heard as you came

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Speaker 1: on here the hurricane has moved and it's heading right

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Speaker 1: at my house. So that's not good. Yeah, it does

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Speaker 1: not look good. It's head right at us. We've heard

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Speaker 1: from David the islands had mandate, we've evacuation. We this

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Speaker 1: is not good for us. We have heard this from

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Speaker 1: David Kotok and others as well in Florida. David Blanche Feloire,

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Speaker 1: hope that you do well in Florida, and thank you

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Speaker 1: always for perspective from Dartmouth at College as well. We

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Speaker 1: get very lucky here with Katrina Dudley. She was privilebly

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Speaker 1: scheduled to talk about Tottenham Spurs, but said we will

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Speaker 1: talk to her about her true expertise and something I'm

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Speaker 1: as dumb as would John Farrell saved me here with

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Speaker 1: Katrina Dudley Franklin Mutual on the nuances of the guilt market.

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Speaker 1: I I just John, I'm I just I'm clueless. Well,

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Speaker 1: we can start here at Katrina. Fantastic to have you

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Speaker 1: with us. Katrina Danty there a Franklin Mutual advices Katrina

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Speaker 1: walk us through the unique character, the unique profile of

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Speaker 1: the guilt market and the required need of this same

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Speaker 1: Bank of England to respond to what you think he

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Speaker 1: needs to respond to. Look, I'm not sure that they

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Speaker 1: actually need to respond to anything here. I mean, they're

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Speaker 1: trying to stabilize a market. But I grew up in

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Speaker 1: an environment where we were told that markets were efficient

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Speaker 1: and so I understand it's only temporary, but I'm not

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Speaker 1: sure that the the BOE is doing the right thing.

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Speaker 1: People are now talking about whether or not this pushes

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Speaker 1: off another rate decision, But let's go back and think

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Speaker 1: about what happened last week when the BOE made that

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Speaker 1: rate decision. There wasn't even consensus within the governors um.

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Speaker 1: You had five of them for fifty, but you actually

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Speaker 1: had three for seventy five and then one lonely person

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Speaker 1: at twenty five. So even within the Bank of England

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Speaker 1: there's not a lot of consensus, and I'm kind of

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Speaker 1: curious whether or not that lack of consensus also is

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Speaker 1: part of the issue why this statement is for temporary

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Speaker 1: intervention and it really doesn't seem to have a lot

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Speaker 1: of support becauld you know, you said you don't know

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Speaker 1: that this was necessary, And we've heard from a host

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Speaker 1: of US policymakers that say they do not see disorderly markets. Volatility, yes,

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Speaker 1: disorderly no, what is that distinction when you look around

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Speaker 1: the world. To understand disorderly policy maker makers need to

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Speaker 1: step in versus a logical response to policy. Volatility just

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Speaker 1: is caused by movements in price. So you know, the

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Speaker 1: price goes up, the price goes down, and the price

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Speaker 1: is always responding to news. So we've had a lot

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Speaker 1: of news. We've had a lot of news out of

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Speaker 1: various central banks, not just the b o E. So

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Speaker 1: that's causing the volatility. When we have disorderly markets, you're

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Speaker 1: talking about bias strikes in particular, so no one coming

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Speaker 1: in and I don't think you've heard any of that

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Speaker 1: out of the English markets. I think what you're seeing

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Speaker 1: is people are going in and acting rationally. And when

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Speaker 1: people are acting rationally, I don't think you need to

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Speaker 1: have the Central Bank come in and intervene. And my

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Speaker 1: fear is that through this intervention, I think that the

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Speaker 1: him this kind of quantitative conundrum because we don't really

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Speaker 1: know what they're trying to do here. No, no, we

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Speaker 1: have to we have a surveillance correction, folks. It's not

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Speaker 1: quantitative conundrum, John, help me here? What is it? We're

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Speaker 1: calling it quantitative confusion to the confusion. The Chancellor will

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Speaker 1: meet today with collective Wall Street. I wish Sir John

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Speaker 1: Templeton was there, of course, with the Franklin Temperlin funds.

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Speaker 1: That was many years ago. What should Wall Street listen

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Speaker 1: to from a chancellor beleaguered? I think what you're looking

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Speaker 1: for is long term intentions. That's what we want. That's

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Speaker 1: what we've A week a month. Oh no, gosh, the

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Speaker 1: long term and a week a month is not what

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Speaker 1: we're talking about. We're talking about we'd like to understand

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Speaker 1: what's going to happen over the course of the next year. UM.

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Speaker 1: And that's where the FED dot plots have been very

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Speaker 1: instrumental in giving stability. You don't necessarily need to agree

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Speaker 1: with what the central Bank is doing, but if you

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Speaker 1: understand the direction of travel as an investor, you can

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Speaker 1: position in yourself and you can do the right things

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Speaker 1: knowing where we're heading. And I think that that's what

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Speaker 1: people are looking for UM and I think that you

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Speaker 1: can distinguish that from the BOE, where we're not quite

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Speaker 1: sure where they're going. Exante datas ends and order to

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Speaker 1: join us. About an hour ago, we just tweeted out

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Speaker 1: the solution to one problem creates another problem. They've stepped

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Speaker 1: into the bond market and Sterling is weaker, Katrina by

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Speaker 1: one point seven percent of one of five fifty three.

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Speaker 1: Do you think by addressing the one problem in the

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Speaker 1: guilt market they consider it one? Do you think they're

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Speaker 1: creating another problem in the FX market? Look, I think

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Speaker 1: you're you're you're seeing that weakness in the in the

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Speaker 1: guilt market. I think there's two aspects here. First of all,

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Speaker 1: people are thinking that the rate decision in the b

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Speaker 1: o E. You know that they actually meet. You know

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Speaker 1: they're going to delay that given what they're talking about.

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Speaker 1: The second thing I think is we were talking about

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Speaker 1: you need to understand the importance of controlling inflation in

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Speaker 1: the UK because a lot of the UK debt is

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Speaker 1: inflation linked and that's something that's very different to any

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Speaker 1: other market around the world. So the b O E

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Speaker 1: re Lean needs to keep a hawkish eye on inflation

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Speaker 1: and controlling inflation. And it's not just in order to

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Speaker 1: generate price stability, it's actually also to control their debt costs.

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Speaker 1: Well said, fantastic to have you with Uskatraine. Thank you

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Speaker 1: that Franklin Mutchell advices right now. Joining is Allen at Ruskin.

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Speaker 1: This is an honor owning the court at Royal Bank

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Speaker 1: of Scotland for decades in chief international strategist for David

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Speaker 1: folkos LANDAU at Deutsche Bank. Ellen. What I love about

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Speaker 1: you is you going to write a research note and

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Speaker 1: six hours later you were wrong. You said in your

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Speaker 1: research note yesterday afternoon that you thought, well, let the

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Speaker 1: f X panic pass and then act. They didn't read

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Speaker 1: your note. What where would we be now if the

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Speaker 1: Bank of England hadn't acted this morning? Well, I think

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Speaker 1: we'd probably be a better place, Tom. I'm I'm I'm

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Speaker 1: pretty critical with the you know about the actions that

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Speaker 1: we've just seen here. Most obviously this is negative for

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Speaker 1: sterling to the extent that the Bank of England is

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Speaker 1: effectively adding more liquidity into the system. They are lowering

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Speaker 1: nominal rates. If anything, they are lifting up price expectations,

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Speaker 1: which means real rates are getting a double whammy, as

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Speaker 1: it were, and the pounders under additional pressure, which then

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Speaker 1: puts them under additional pressure. Um. And you know, maybe

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Speaker 1: they would like to see a situation where um, you know,

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Speaker 1: they could see heels coming down in general, but if anything,

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Speaker 1: this place is more pressure on them at the front

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Speaker 1: end of the curve. November three, next sketch of mating Alan,

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Speaker 1: how big is that height going to be? Um? Well,

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Speaker 1: when I last looked, and there was before this latest actions,

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Speaker 1: a hundred and fifty basis points is effectively priced in,

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Speaker 1: so the market is rarely pushing them into a corner

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Speaker 1: to do something. You and without them acting in that

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Speaker 1: way effectively the pounds going to go down further, so um,

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Speaker 1: you know it. It remains to be seen how much

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Speaker 1: will be needed on the day itself. There's obviously a

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Speaker 1: lot of water that's going to flow under this bridge

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Speaker 1: before then, but I would suggest that you know, at

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Speaker 1: least a hundred basis points is going to be needed

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Speaker 1: at that point. And can they do anything about what's

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Speaker 1: happening with pounds sterling? The forces worldwide right now are

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Speaker 1: incredibly powerful, the FED hiking cycle, the dollar dominance off

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Speaker 1: the back of it. Can they actually do anything to

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Speaker 1: fight this? Mean, it's a great point, John, I mean,

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Speaker 1: you know, it's a question of how much should they

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Speaker 1: fight this? You know, one of the big problems the

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Speaker 1: UK has is that it's balance of payments is in

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Speaker 1: a seriously negative condition as far as the pounds concerned.

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Speaker 1: The current account is one, you know, the deficit is

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Speaker 1: one of the largest out there. The narrow basic balance

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Speaker 1: you know, when I last looked in terms of the

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Speaker 1: last twelve months was amongst the worst. Really of forty

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Speaker 1: five countries are attract so the financing needs are huge,

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Speaker 1: and I think the issue is just, you know, what

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Speaker 1: is the appropriate policy next to stem the tide as

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Speaker 1: it were? And I think the Bank of England has

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Speaker 1: been back to some extent into a corner by unorthodox

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Speaker 1: fiscal policies as well. But Ellen, I guess another way

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Speaker 1: of asking the same question is how much is this

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Speaker 1: a dollar story and not really a pound story, not

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Speaker 1: really a euro story, not really again story. Yeah, I

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Speaker 1: think you know, obviously you can one to focus on

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Speaker 1: euro sterling probably as the metric that tells you just

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Speaker 1: how much of this is a sterling story, and by

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Speaker 1: that account you say, well, this, you know, this shouldn't

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Speaker 1: really count as any sort of crisis per se. If

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Speaker 1: you look at the sterling on a trade weighted basis,

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Speaker 1: on a real effective basis, it's not all that week,

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Speaker 1: So you know, don't respond in a sense. So, you know,

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Speaker 1: I have a little bit of sympathy for the idea

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Speaker 1: that the dollar and the Israeli the dominant story behind

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Speaker 1: a lot of what's going on here. When is a

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Speaker 1: strong dollar in and of itself allan create havoc for

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Speaker 1: the rest of the world economy that rebounds back to

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Speaker 1: the US, At what point do we see I don't

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Speaker 1: want to say a global recession, but something that looks

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Speaker 1: like that because of the strong dollar. Yeah, I mean,

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Speaker 1: I think, you know, so far the disruptions are being

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Speaker 1: quite limited, but both in terms of what we're seeing

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Speaker 1: globally and the sort of feedback loops back to you know,

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Speaker 1: US risk appetite metrics. So, you know, I think some

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Speaker 1: people would say markets a little bit broken because the

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Speaker 1: Japanese are having to intervene. You know. I think you

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Speaker 1: could say there's a yend story there, and there's a

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Speaker 1: B O J divergent story that's dominant. Um the UK

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Speaker 1: balance of payment stories unique so so far, I think

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Speaker 1: we shouldn't you cry wolf too loudly. I don't think

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Speaker 1: that's warranted. Alan, who's next to blink, The ECB s

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Speaker 1: Holsman is talking up an other seventy five basis point hike.

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Speaker 1: He spoke to our colleague, a good friend of this

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Speaker 1: program area today earlier this morning, a good friend of

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Speaker 1: ours talk. I'm not sure whether she's a good friend

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Speaker 1: of yours, a good friend of ours. Alan, who's next

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Speaker 1: to blink? Well, look, I think everyone is seen as

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Speaker 1: tightening substantially in terms of the G ten world for

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Speaker 1: this year at least. I think the blinking is probably

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Speaker 1: going to start in three when the US fed cycle

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Speaker 1: you know, essentially comes to an end. At that point

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Speaker 1: in time, you presume the global economy but will be

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Speaker 1: in worse shape in general, growth nationally for most economies

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Speaker 1: will be you know, that much more in a much

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Speaker 1: more serious downturn. And that point, I think there's going

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Speaker 1: to be this real challenge where growth is very weak

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Speaker 1: and inflation is still at much higher levels and targets

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Speaker 1: suggest is warranted or desired, And at that point, I

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Speaker 1: think policy is going to get into you know, a

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Speaker 1: much more much more tangled and much we'll confuse with

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Speaker 1: the state. And I'm Ruskin at Deutsche Bank. Thank you, Alan,

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Speaker 1: You just one of the best described to catch out

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Speaker 1: what he said as a white right now with a

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Speaker 1: real view, real worldview, I should say. Sarah Maleck joins

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Speaker 1: US chief investment officer in Novine. Sarah, do you do

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Speaker 1: you ignore this within conventional institutional money? How do you

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Speaker 1: sift in the tumult of the last three days. I

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Speaker 1: think as long as the dollar and eals continue to

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Speaker 1: move upward, investors need to brace themselves for more pain. Now,

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Speaker 1: there's a few things on the horizon that might at

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Speaker 1: least give us some stability here, and that's earnings and

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Speaker 1: some cracks that we're seeing in inflation, and also watching technicals. Unfortunately,

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Speaker 1: we seem to be breaking through the juvenleles, which means

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Speaker 1: we probably hit thirty four the S and P five hundred.

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Speaker 1: But earnings we're seeing in sensus start to decline a bit,

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Speaker 1: and earnings generally don't crack until p M I going

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Speaker 1: to contractionary territory. So I think actually Q three earnings

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Speaker 1: could be okay, give investors a bit of a short

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Speaker 1: term sigh of relief. And then also inflation still remains

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Speaker 1: very hot, but we are seeing some moderation in rents,

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Speaker 1: which is a big piece of core inflation, so you

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Speaker 1: might at least start to see a plateau and inflation,

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Speaker 1: which I think again at this point that could be

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Speaker 1: a positive for investors short term bounce, but against some

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Speaker 1: stabilization for the markets would be a good thing. So

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Speaker 1: the pushback we get against the earning spas is that

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Speaker 1: we live in a nominal world and nominal growth that's

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Speaker 1: been phenomenal because inflation is so high, and how can

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Speaker 1: you push back against earnings in that environment? So you

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Speaker 1: kind if you get focused on the margins on costs,

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Speaker 1: what a marches look like going into your end. I

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Speaker 1: agree margins are a real issue for for earnings because

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Speaker 1: they're basically at peak levels, and with the costs inputs

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Speaker 1: coming in, only those companies with pricing power will be

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Speaker 1: able to maintain or expand margins. Also, that dollars ahead

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Speaker 1: win for earnings, and some of these signs of demand

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Speaker 1: destructure are eventually going to hit earnings. The question is

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Speaker 1: what's the timing of that. Likely not the third order,

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Speaker 1: but it is to come. Similar to the employment market,

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Speaker 1: when does that crack? Probably sometime early three and that's

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Speaker 1: when you hit your recession. So I don't think we

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Speaker 1: can just hang on to the positive earners of the

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Speaker 1: third quarter, but given where the market is right now

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Speaker 1: in terms of valuations, that it might at least just

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Speaker 1: help us stabilize because they should come in all right

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Speaker 1: for this quarter. So as an investor, when do a

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Speaker 1: market directions market momentum, when does that overcome some of

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Speaker 1: these fundamental considerations like margins and earnings, and how quickly

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Speaker 1: this bleeds out into the economy. I think when you

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Speaker 1: get into these periods of extreme stress like we're seeing now,

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Speaker 1: it's somewhat of an unwind given what's going on outside

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Speaker 1: of the US and also the continued pain from higher yields,

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Speaker 1: which makes equities let us less attractive. We do turn

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Speaker 1: somewhat to tecticles to see can the market hold some

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Speaker 1: of its lows and moving averages. The issue, of course,

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Speaker 1: is that it's not really holding those and I think

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Speaker 1: until we can technically get to a stable, more stable level,

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Speaker 1: markets are going to just keep declining due to these

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Speaker 1: higher yields, higher inflation numbers, and fears over you know,

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Speaker 1: when is the next you to drop? Is it going

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Speaker 1: to be in the UK, Is it going to be

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Speaker 1: in Russian Ukraine? As some of these areas that just

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Speaker 1: keep piling onto the negative narrative happening sounds like people

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Speaker 1: are hiding under their beds with a whole lot of

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Speaker 1: cash just sort of sitting there waiting for it to pass.

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Speaker 1: Are you is that what's going on? Or is there

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Speaker 1: something else that you're kind of figuring out how to

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Speaker 1: play in here? I mean, I get the reason, you know,

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Speaker 1: cash and and yields are actually but quite attractive, and

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Speaker 1: that as a headwind for equity. So I think these

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Speaker 1: are challenging, but we're finding areas that are attractives, such

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Speaker 1: as dividend growers. They actually look cheap versus some of

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Speaker 1: the typical PALMD proxies that look expensive to us right now.

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Speaker 1: They can provide you income and protect you against the volatility.

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Speaker 1: We like fixed income here. High yield actually is offering

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Speaker 1: very strong returns in the high single digits. It's much

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Speaker 1: higher quality than it was in the past. And then

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Speaker 1: look for asset classes that actually can benefit from higher inflation,

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Speaker 1: such as farmland, private real estate or CPI. Escalators are

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Speaker 1: written into some of their contracts. Let's go to core competencies. Sarah,

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Speaker 1: tell me what municipal bonds are doing at Novine. You

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Speaker 1: guys own that French our re binds a place to be.

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Speaker 1: I think that's another area with strong fundamentals that's been

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Speaker 1: hit without flows and a lot of the negative sentiment

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Speaker 1: that's hitting many asset classes. But it's similar to high

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Speaker 1: yield on taxable fits strong returns from umissible bonds. Municipalities

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Speaker 1: are very or have very healthy coffers right now. So

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Speaker 1: usial bonds is in other area that we think is

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Speaker 1: quite attractive. It's where you can get more bank for

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Speaker 1: your box, a little bit less risk, lower correlation to

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Speaker 1: other asset classes, but good returns to help you wait

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Speaker 1: through a lot of this pain. Sarah, how many times

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Speaker 1: have you been told that Apple I found amount is faltering.

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Speaker 1: That's the report I feel like this morning. It's interesting

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Speaker 1: because Apple is a post COVID story. We've been waiting

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Speaker 1: a long time for that normalization after the extremely strong

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Speaker 1: demand we saw for all of their products during COVID,

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Speaker 1: and that online hasn't happened. So it is interesting to

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Speaker 1: see it finally start to catch up to Apple. Not surprising.

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Speaker 1: I think all of these issues for these companies that

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Speaker 1: had very strong, unusual demand during COVID are eventually going

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Speaker 1: to have to normalize. That process could be painful, even

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Speaker 1: for Apple, So I'm mantic. Thank you Wonder for the

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Speaker 1: catch shop of news. Eighth. This is the Bloomberg Surveillance Podcast.

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Speaker 1: Thanks for listening. Join us live weekdays from seven to

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Speaker 1: ten am Eastern on Bloomberg Radio and on Bloomberg Television

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Speaker 1: subscribe to the Surveillance podcast on Apple podcast, SoundCloud, Bloomberg

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Speaker 1: dot com, and of course on the terminal. I'm Tom

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Speaker 1: Keene and this is Bloomberg