1 00:00:02,200 --> 00:00:05,600 Speaker 1: Global business news twenty four hours a day. If Bloomberg 2 00:00:05,640 --> 00:00:08,720 Speaker 1: dot Com, the radio plus mobile last and on your radio. 3 00:00:09,000 --> 00:00:13,120 Speaker 1: This is a Bloomberg Business Flash from Bloomberg World Headquarters. 4 00:00:13,160 --> 00:00:17,120 Speaker 1: I'm Charlie Palott. Stocks are extended, lost, extending losses amid 5 00:00:17,160 --> 00:00:20,160 Speaker 1: growing speculation that the Federal Reserve sees firm and off 6 00:00:20,160 --> 00:00:24,040 Speaker 1: economic growth to raise rates as soon as June. SMP 7 00:00:24,239 --> 00:00:27,200 Speaker 1: five hundred indecks are racing yesterday's rally. Right now, the 8 00:00:27,360 --> 00:00:30,160 Speaker 1: SMP down twenty one points, a drop of one percent. 9 00:00:30,600 --> 00:00:34,000 Speaker 1: Town Industrials down one ninety four points to decline there 10 00:00:34,040 --> 00:00:38,159 Speaker 1: of one point one percent. Nastack is down sixty points, 11 00:00:38,200 --> 00:00:41,000 Speaker 1: a drop of one point three percent. He old on 12 00:00:41,040 --> 00:00:43,800 Speaker 1: the tenure one point seven five percent, Gold up six 13 00:00:43,840 --> 00:00:46,480 Speaker 1: fifty ounce to twelve eighties seventy a gain of point 14 00:00:46,520 --> 00:00:49,800 Speaker 1: five percent, and crude oil hired by seventy nine cents 15 00:00:49,800 --> 00:00:53,600 Speaker 1: of arrowy fifty one now on West Texas intermediate crude. 16 00:00:53,840 --> 00:00:56,920 Speaker 1: That is a gain of one point seven percent. I'm 17 00:00:57,000 --> 00:01:01,200 Speaker 1: Charlie Palett. That's a Bloomberg Business Flash. Charlie Polla, thank 18 00:01:01,200 --> 00:01:02,920 Speaker 1: you so very much. Time now for the e t 19 00:01:03,040 --> 00:01:05,240 Speaker 1: F Report, brought to you by Vanack Vector's e t 20 00:01:05,560 --> 00:01:08,720 Speaker 1: F expect more from your munis target tax exempt income 21 00:01:08,760 --> 00:01:12,040 Speaker 1: by maturity and credit quality, all with low cost et 22 00:01:12,280 --> 00:01:15,240 Speaker 1: F s. Visit van k dot com slash Muni vanek 23 00:01:15,600 --> 00:01:18,720 Speaker 1: access the opportunities for e t F report we return 24 00:01:18,800 --> 00:01:21,959 Speaker 1: to our own Catherine Cowdery. It's a tough year for 25 00:01:22,000 --> 00:01:24,560 Speaker 1: the e t F industry. That's a word from Bloomberg 26 00:01:24,560 --> 00:01:28,120 Speaker 1: Intelligence analyst Eric bel Tunis. He says flows into e 27 00:01:28,240 --> 00:01:31,320 Speaker 1: t s is slowed. However, some e t F providers 28 00:01:31,360 --> 00:01:33,319 Speaker 1: are doing better than others. This is the kind of 29 00:01:33,400 --> 00:01:36,800 Speaker 1: year that Schwab and Vanguard live for. They are taking 30 00:01:36,800 --> 00:01:39,040 Speaker 1: in se of all of the new cash going into 31 00:01:39,040 --> 00:01:41,160 Speaker 1: e t F s. Val Tunas says that investors who 32 00:01:41,280 --> 00:01:43,440 Speaker 1: chase performance are selling off in the midst of the 33 00:01:43,480 --> 00:01:47,000 Speaker 1: market's volatility, but Vanguard and Schwab, those products go in 34 00:01:47,200 --> 00:01:51,080 Speaker 1: like clockwork. The flows go in every month, every day, 35 00:01:51,120 --> 00:01:53,520 Speaker 1: so you have the both of them taking in money 36 00:01:53,560 --> 00:01:56,200 Speaker 1: and all products, even products that are down. So it 37 00:01:56,280 --> 00:01:59,320 Speaker 1: just shows you the long term power of of these companies. 38 00:01:59,400 --> 00:02:02,320 Speaker 1: Bel Tunis says flows this year illustrate the sea change 39 00:02:02,320 --> 00:02:05,400 Speaker 1: that's taking place in the financial industry from high price 40 00:02:05,440 --> 00:02:09,040 Speaker 1: to low priced investments. Hedge funds and active mutual funds 41 00:02:09,040 --> 00:02:11,760 Speaker 1: have seen outflows this year, while e t F has 42 00:02:11,760 --> 00:02:15,920 Speaker 1: seen inflows. That's your Bloomberg ETF report. I'm Katherine Cowdery. 43 00:02:17,400 --> 00:02:20,440 Speaker 1: You're listening to Taking Stock with Kathleen Hayes and Pimp 44 00:02:20,520 --> 00:02:25,119 Speaker 1: Box on Bloomberg Radio. Imagine if you had invested your 45 00:02:25,120 --> 00:02:27,760 Speaker 1: money at the beginning of the year in an asset 46 00:02:27,800 --> 00:02:32,200 Speaker 1: that now is higher by more than eighteen percent. I 47 00:02:32,240 --> 00:02:34,280 Speaker 1: was looking at some of the fine print in the 48 00:02:34,320 --> 00:02:37,880 Speaker 1: fine work done by Dennis Gartman, because Dennis Gartman has 49 00:02:37,919 --> 00:02:42,040 Speaker 1: been putting together the Gartman Letter uh since nine eight 50 00:02:42,320 --> 00:02:46,120 Speaker 1: seven that I could not believe. Dennis Gartman, thank you 51 00:02:46,200 --> 00:02:50,560 Speaker 1: for being with us economist publisher the Gartman Letter, joining 52 00:02:50,639 --> 00:02:55,040 Speaker 1: us from Suffolk, Virginia. How are you old and tired? 53 00:02:55,040 --> 00:02:58,600 Speaker 1: But all right? All right, Well that's le's stop. But 54 00:02:59,080 --> 00:03:02,320 Speaker 1: that's good enough. You know. I I read your commentary, 55 00:03:02,400 --> 00:03:05,960 Speaker 1: but I read it back to front um. Tell me 56 00:03:06,040 --> 00:03:10,840 Speaker 1: what's going on with gold and precious metals and palladian 57 00:03:10,919 --> 00:03:13,600 Speaker 1: and all that. What's going on with this? They first 58 00:03:13,600 --> 00:03:17,200 Speaker 1: of all, the world suddenly does like gold in dollar terms. 59 00:03:17,680 --> 00:03:20,840 Speaker 1: What's important to understand is that the world liked gold 60 00:03:21,000 --> 00:03:24,760 Speaker 1: in euro terms two years ago, had made its low then, 61 00:03:24,880 --> 00:03:28,880 Speaker 1: and the world liked gold in yen denominated terms four 62 00:03:28,960 --> 00:03:32,400 Speaker 1: years ago. It's it's been a demonstrative bowld market in 63 00:03:32,520 --> 00:03:36,000 Speaker 1: gold predicated in other currencies, and I think one has 64 00:03:36,040 --> 00:03:38,440 Speaker 1: to understand that gold is nothing more than a currency. 65 00:03:39,440 --> 00:03:41,640 Speaker 1: As an old four X trader, we always used to 66 00:03:41,640 --> 00:03:45,080 Speaker 1: trade dollar mark against the end yen, against the Swiss frank, 67 00:03:45,120 --> 00:03:48,320 Speaker 1: Swiss frank against the old Italian lira. You're always taught 68 00:03:48,360 --> 00:03:50,840 Speaker 1: to be a spreader of one thing, a buyer of 69 00:03:50,880 --> 00:03:53,120 Speaker 1: one thing, a seller of something else. And in the 70 00:03:53,160 --> 00:03:55,440 Speaker 1: world of for in the world of gold trading, I 71 00:03:55,480 --> 00:03:57,840 Speaker 1: think people are beginning to understand that gold really is 72 00:03:58,280 --> 00:04:02,080 Speaker 1: simply another currency. And we're beginning to understand that if 73 00:04:02,120 --> 00:04:04,119 Speaker 1: gold was a bull market in the end terms four 74 00:04:04,160 --> 00:04:06,920 Speaker 1: years ago, if gold was a bull market in euros 75 00:04:06,960 --> 00:04:09,840 Speaker 1: two years ago, gold began to be a bull market 76 00:04:09,880 --> 00:04:13,360 Speaker 1: in the dollar about four months ago, and that's starting 77 00:04:13,360 --> 00:04:17,600 Speaker 1: to engender a little interest on the part of speculators everywhere. 78 00:04:17,640 --> 00:04:20,680 Speaker 1: People tend to think of gold only in dollar terms, 79 00:04:20,680 --> 00:04:23,120 Speaker 1: and until you've got a bull market going there, it 80 00:04:23,160 --> 00:04:26,280 Speaker 1: was hard to get a bullish enthusiasm much. But you're 81 00:04:26,279 --> 00:04:28,240 Speaker 1: starting to see that, and I think you're starting to 82 00:04:28,279 --> 00:04:32,359 Speaker 1: see an increase in inflationary expectations. The grains are turning 83 00:04:32,400 --> 00:04:35,520 Speaker 1: for the better, Livestock is turning for the better. Clearly 84 00:04:35,520 --> 00:04:37,800 Speaker 1: the crude oil market has turned for the better. So 85 00:04:37,839 --> 00:04:40,719 Speaker 1: there's inflationary circumstances prevailing, which is helping to put a 86 00:04:40,720 --> 00:04:43,640 Speaker 1: bit to the gold market. See that's why we've always 87 00:04:43,720 --> 00:04:49,160 Speaker 1: enjoyed talking to each other, because we are macro people, right, gold, bonds, currencies, Dennis, 88 00:04:49,240 --> 00:04:52,080 Speaker 1: But but you know, the gold going up, but the 89 00:04:52,120 --> 00:04:54,920 Speaker 1: dollars starting to strengthen. Two, because people are were first 90 00:04:54,960 --> 00:04:58,440 Speaker 1: working comments from key Feather Reserve officials that hey, we 91 00:04:58,440 --> 00:05:00,600 Speaker 1: we could raise rates, and in fact some people are 92 00:05:00,600 --> 00:05:03,280 Speaker 1: talking about the fact that they will and sooner, maybe 93 00:05:03,279 --> 00:05:05,880 Speaker 1: than the market expects. This has been boosting the dollar 94 00:05:05,920 --> 00:05:07,440 Speaker 1: a bit. Does that continue and if it does, what 95 00:05:07,480 --> 00:05:11,159 Speaker 1: does it mean for this UH dollar rally and goals? Well, 96 00:05:11,200 --> 00:05:14,000 Speaker 1: I first of all, I think that people are somewhat surprised. 97 00:05:14,040 --> 00:05:16,080 Speaker 1: We're seeing weakness in the stock market to day, which 98 00:05:16,120 --> 00:05:18,280 Speaker 1: I think is going to develop into something a little 99 00:05:18,320 --> 00:05:21,200 Speaker 1: more difficult over the course of the next several weeks. 100 00:05:21,200 --> 00:05:23,600 Speaker 1: But the stock market began to sell off this afternoon 101 00:05:24,040 --> 00:05:27,560 Speaker 1: following comments by Mr Kaplan, the the the president of 102 00:05:27,560 --> 00:05:29,719 Speaker 1: the Fellow Reserve Bank of Dallas, who, although it's not 103 00:05:29,800 --> 00:05:32,520 Speaker 1: a voter on the f o MC this year, I 104 00:05:32,560 --> 00:05:35,000 Speaker 1: think is one of the better voices given the fact 105 00:05:35,040 --> 00:05:37,320 Speaker 1: that he came out of the trading arena. He's not 106 00:05:37,360 --> 00:05:40,400 Speaker 1: a PhD in economics. He's actually somebody who's had to 107 00:05:40,480 --> 00:05:42,560 Speaker 1: run a fund, and I think the market tends to 108 00:05:42,560 --> 00:05:44,880 Speaker 1: pay more attention to him. And he made this to 109 00:05:44,960 --> 00:05:47,560 Speaker 1: the the comment that we might well see a FED 110 00:05:47,640 --> 00:05:50,600 Speaker 1: funds rate increase at the June meeting, and I suspect 111 00:05:50,600 --> 00:05:53,359 Speaker 1: that that's probably very likely. So there in lies the 112 00:05:53,400 --> 00:05:56,279 Speaker 1: problem with the equities market. Equities wanted to see nothing 113 00:05:56,360 --> 00:05:59,960 Speaker 1: but flat rates, rates held lower for longer, and sudden 114 00:06:00,120 --> 00:06:02,240 Speaker 1: there's on the table once again as an increase in 115 00:06:02,320 --> 00:06:06,400 Speaker 1: rate in the June meeting. Dennis Scartman as someone that 116 00:06:06,520 --> 00:06:11,120 Speaker 1: I believe I grew up watching companies leave one by 117 00:06:11,160 --> 00:06:14,560 Speaker 1: one in there in your neighborhood. I wonder if you 118 00:06:14,560 --> 00:06:17,760 Speaker 1: could mix a little politics with a little investment in 119 00:06:17,839 --> 00:06:23,280 Speaker 1: the financial perspective for us, well, tis what I grew 120 00:06:23,320 --> 00:06:26,640 Speaker 1: up in Akron, Ohio, where back in the nineteen forties, fifties, 121 00:06:26,640 --> 00:06:29,800 Speaker 1: and sixties, every tire on every car, literally every tire 122 00:06:29,800 --> 00:06:32,919 Speaker 1: and every car was manufactured. There hasn't been a tire 123 00:06:32,960 --> 00:06:37,839 Speaker 1: manufacturing naquenceins ninety four entire industry. The rubber industry left, 124 00:06:38,080 --> 00:06:41,920 Speaker 1: good Year, good Rich, Firestone, Uniroyal, Cyberling, they were all there. 125 00:06:42,320 --> 00:06:45,039 Speaker 1: Their headquarters are still there, but their production facilities have 126 00:06:45,080 --> 00:06:48,800 Speaker 1: moved elsewhere. What's interesting is it's all been replaced by 127 00:06:48,960 --> 00:06:52,760 Speaker 1: hundreds of other businesses. And therein is the magic of America. 128 00:06:53,360 --> 00:06:55,839 Speaker 1: Uh And instead of having six companies that had that 129 00:06:55,920 --> 00:06:59,360 Speaker 1: had twenty thousand employees, there are six hundred companies with 130 00:06:59,720 --> 00:07:03,279 Speaker 1: two hundred employees, and the unemployment rate and acronism is 131 00:07:03,279 --> 00:07:06,640 Speaker 1: holding nicely right at the US at average rate. We 132 00:07:06,800 --> 00:07:09,680 Speaker 1: replaced everything, and that's that's what we do well here. 133 00:07:10,120 --> 00:07:13,480 Speaker 1: The problem that I have and looking forward into this 134 00:07:13,560 --> 00:07:15,800 Speaker 1: next election, is that we have on the Republicans, and 135 00:07:15,800 --> 00:07:18,800 Speaker 1: I'm somewhat to the right of Jengis Khan politically and economically, 136 00:07:19,280 --> 00:07:22,520 Speaker 1: but the Republican standard there as a protectionist, wants to 137 00:07:22,560 --> 00:07:26,120 Speaker 1: protect the businesses. The business of America is actually to 138 00:07:26,200 --> 00:07:29,760 Speaker 1: come up with new businesses, destroy the old, build the new, 139 00:07:29,880 --> 00:07:34,040 Speaker 1: and that's why we're great. Well, I'm gonna go too 140 00:07:34,040 --> 00:07:35,960 Speaker 1: far down that road, because there are some pretty strong 141 00:07:36,040 --> 00:07:39,160 Speaker 1: voices arguing these days, Dennis. It's an argument that didn't 142 00:07:39,200 --> 00:07:41,560 Speaker 1: go away. But there's more and more focus being put 143 00:07:41,600 --> 00:07:44,240 Speaker 1: on the dollar and whether or not it is artificially 144 00:07:44,280 --> 00:07:47,440 Speaker 1: manipulated by our trading partners. And if it is, then 145 00:07:47,920 --> 00:07:50,800 Speaker 1: maybe Donald Trump has a point that free trade is 146 00:07:50,800 --> 00:07:52,560 Speaker 1: one thing, but fair trade is what a lot of 147 00:07:52,600 --> 00:07:54,720 Speaker 1: people are saying we must have in order for this 148 00:07:54,760 --> 00:07:59,400 Speaker 1: to work for everybody, including us workers. Well, Mr Trump 149 00:07:59,440 --> 00:08:01,520 Speaker 1: takes on the es the reman By. He folks who 150 00:08:01,520 --> 00:08:04,960 Speaker 1: focuses on the remand as being a manipulated currency. If 151 00:08:04,960 --> 00:08:07,400 Speaker 1: it is being manipulated over the course of the last decade, 152 00:08:07,680 --> 00:08:10,720 Speaker 1: it's been manipulated against the Chinese, because the reman By 153 00:08:10,760 --> 00:08:15,520 Speaker 1: has gotten demonstrably stronger. It's written by what from five 154 00:08:15,600 --> 00:08:17,320 Speaker 1: or sickle of actually from eight years ago. I don't 155 00:08:17,320 --> 00:08:19,960 Speaker 1: have my screen in front of me, but if up dramatically, yes, 156 00:08:20,040 --> 00:08:22,960 Speaker 1: the reman b is down relative to the dollar over 157 00:08:22,960 --> 00:08:24,920 Speaker 1: the course of the last year and a half, but 158 00:08:25,000 --> 00:08:27,600 Speaker 1: over the course of the last decade, it is up 159 00:08:27,640 --> 00:08:30,920 Speaker 1: and up dramatically, and if the if the Chinese have 160 00:08:31,000 --> 00:08:33,880 Speaker 1: been manipulating, then they've got manipulation in the wrong direction. 161 00:08:35,240 --> 00:08:40,320 Speaker 1: Dennis Gartman expound on the theme of demographics and Europe 162 00:08:40,480 --> 00:08:43,160 Speaker 1: and what is going on because this is a problem, 163 00:08:43,240 --> 00:08:45,439 Speaker 1: or is not a problem, but this is a situation 164 00:08:46,280 --> 00:08:51,960 Speaker 1: that may not necessarily be so widely known about. Well, 165 00:08:52,000 --> 00:08:56,120 Speaker 1: all economics derives from demographics. You cannot have a growing 166 00:08:56,120 --> 00:08:59,280 Speaker 1: economy if you have a falling population. It's just that simple. 167 00:08:59,679 --> 00:09:01,880 Speaker 1: You need need children, you need to have growth in 168 00:09:01,920 --> 00:09:07,520 Speaker 1: the population. And what's happening the birth rates in Europe UH, 169 00:09:07,559 --> 00:09:10,000 Speaker 1: the United Nations, the u N says that unless you 170 00:09:10,040 --> 00:09:12,280 Speaker 1: have two point one children for every woman in in 171 00:09:12,320 --> 00:09:16,480 Speaker 1: a birth age population, the population declines. In Europe, now 172 00:09:16,520 --> 00:09:18,840 Speaker 1: you're starting to get down to one point seven children 173 00:09:18,880 --> 00:09:22,520 Speaker 1: for for women. That's not enough to keep the economy 174 00:09:22,600 --> 00:09:25,800 Speaker 1: to keep the population moving higher. What's interesting is in 175 00:09:25,800 --> 00:09:29,480 Speaker 1: the industrialized world, the only countries that have populations that 176 00:09:29,520 --> 00:09:34,000 Speaker 1: are growing are the United States, Canada, Australia, and New Zealand. 177 00:09:34,080 --> 00:09:36,320 Speaker 1: What do we have in common other than the English language. 178 00:09:36,760 --> 00:09:39,920 Speaker 1: The thing that we have most in common with is immigration. UH. 179 00:09:40,080 --> 00:09:43,520 Speaker 1: You have a problem in in in countries where the 180 00:09:43,520 --> 00:09:48,280 Speaker 1: population growth is negative, and in places like Japan, for example, 181 00:09:48,280 --> 00:09:51,640 Speaker 1: where the population growth is even more negative than in Europe. 182 00:09:52,000 --> 00:09:54,440 Speaker 1: Not only is it growing negative, it is growing older 183 00:09:54,480 --> 00:09:56,679 Speaker 1: by the hour. There are as I like to say, 184 00:09:56,679 --> 00:09:59,440 Speaker 1: there are entire villages in Japan who have never heard 185 00:09:59,440 --> 00:10:01,640 Speaker 1: of baby in the last fifteen years because there haven't 186 00:10:01,679 --> 00:10:05,080 Speaker 1: been any born. It's a very serious problem that needs 187 00:10:05,080 --> 00:10:08,640 Speaker 1: to be dealt with. Certainly, we started to see the 188 00:10:08,720 --> 00:10:10,760 Speaker 1: Chinese begin to deal with it when they when they 189 00:10:10,840 --> 00:10:14,800 Speaker 1: ended their ludicrous one child program. At least they have 190 00:10:14,880 --> 00:10:17,400 Speaker 1: on them now allowed to have two children if they 191 00:10:17,440 --> 00:10:21,120 Speaker 1: ask permission. You need to have population growth, and in 192 00:10:21,280 --> 00:10:24,160 Speaker 1: most of the industrialized world we have negative growth. And 193 00:10:24,200 --> 00:10:26,080 Speaker 1: if it's not negative yet, it will be negative in 194 00:10:26,080 --> 00:10:28,280 Speaker 1: another couple of years. It's a very serious problem that 195 00:10:28,320 --> 00:10:30,920 Speaker 1: no one talks about. Just about fifteen seconds left, but 196 00:10:30,920 --> 00:10:32,800 Speaker 1: I have to ask you gold that one thousand, two 197 00:10:32,960 --> 00:10:36,600 Speaker 1: or eighty dollars roughly an ounce would you buy it here? Dennis? 198 00:10:36,640 --> 00:10:39,600 Speaker 1: Is it gonna move higher this dollar gold rally? Uh? 199 00:10:39,760 --> 00:10:41,880 Speaker 1: Six months from now it will be higher. A year 200 00:10:41,920 --> 00:10:44,160 Speaker 1: from now, it'll be higher, two years from now, it'll 201 00:10:44,200 --> 00:10:46,360 Speaker 1: be higher how much. I'm not one of those people 202 00:10:46,360 --> 00:10:49,440 Speaker 1: who thinks it's going to several thousand dollars. It's the 203 00:10:49,480 --> 00:10:51,280 Speaker 1: trend is from the lower left to the upper right. 204 00:10:51,640 --> 00:10:54,880 Speaker 1: It's probably gonna be higher, nicely, probably six seven percent 205 00:10:54,920 --> 00:10:57,559 Speaker 1: higher a year from now than it is now. Dennis Carbon, 206 00:10:57,600 --> 00:10:59,520 Speaker 1: thank you so very much for joining us. It's great 207 00:10:59,600 --> 00:11:02,560 Speaker 1: to have on taking stock here on Bloomberg Radio. Economist, 208 00:11:02,600 --> 00:11:05,840 Speaker 1: publisher of the Gartman Letter. He's in Suffolk, Virginia. We're 209 00:11:05,920 --> 00:11:11,600 Speaker 1: in Alexandri Alexander, Virginia. Very special broadcast in the Washington 210 00:11:11,720 --> 00:11:13,600 Speaker 1: metro area on Bloomberg Radio.