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Speaker 2: Well, Yes, earnings this week are about several members of
Speaker 2: the Magnificent seven group. We're talking about Apple, Microsoft, Alphabet
Speaker 2: and Meta Platforms, all laying out their businesses and outlooks.
Speaker 2: In all, nearly forty two percent of the S and
Speaker 2: P five hundred's market cap reporting results. It will also
Speaker 2: be a reveal of how well and Video is doing
Speaker 2: and whether the AI trade and enthusiasm is for real
Speaker 2: or perhaps Tim getting ahead of itself.
Speaker 3: Well, with more on how in Vidia has so much
Speaker 3: riding on this week's earnings, Let's get to Bloomberg News
Speaker 3: Equities reporter Crimen Rynikey. She joins us here in our
Speaker 3: Bloomberg BusinessWeek Studios mentioned earlier. In Vidia doesn't report until
Speaker 3: next month, but how do the results that we get
Speaker 3: this week? Carmen give us an idea of how the
Speaker 3: company is doing in its own sales.
Speaker 4: Yeah, so basically, the four companies that you just mentioned
Speaker 4: that are reporting this week counted for forty percent of
Speaker 4: n Video's sales in the second quarter. So what they
Speaker 4: are going to report in terms of capital expenditures is
Speaker 4: going to have huge read through for what we're going
Speaker 4: to see for Nvidia in the coming quarters. These companies
Speaker 4: are also expected to combine or to report a combined
Speaker 4: fifty six billion in capital expenditure.
Speaker 5: It's crazy, right, Yeah, this is a record.
Speaker 4: It's so much money, and really this is all going
Speaker 4: to AI spend, or mostly going to AI spend, which
Speaker 4: is in turn mostly going to Nvidia chips because it's
Speaker 4: really just by and far still the winner in that space.
Speaker 5: I do wonder with the buy and spend when it
Speaker 5: comes to Nvidia's.
Speaker 2: Chips, is there a cycle that we need to be
Speaker 2: smart about saying, Okay, so maybe there's going to be
Speaker 2: a lot of spending in a couple of quarters, and
Speaker 2: then maybe there's a bit of a pullback as they
Speaker 2: continue to build out and they go back and buy more.
Speaker 2: Like we keep hearing about, you know, shortage of supplies
Speaker 2: like that feels like that's been such a big part
Speaker 2: of the narrative around Nvidia's chips. But help me understand
Speaker 2: so that we when we get these results, you know,
Speaker 2: can be smart about whether or not it really is
Speaker 2: bad for Nvidia.
Speaker 4: Yeah, I mean, I think that's a great question. One
Speaker 4: thing that people are looking at is if there is
Speaker 4: going to be a slowdown, is people sort of turn
Speaker 4: over have to move to the next chip. That's why
Speaker 4: we're so focused on anything that we can hear from
Speaker 4: Nvidia or from clients about Blackwell. So far, the company
Speaker 4: has said that everything is fine, it's on track to
Speaker 4: a ramp in the second half of next year. But
Speaker 4: you're right, if these companies aren't spend aren't needing to
Speaker 4: spend as much, if they're able to sort of keep
Speaker 4: the chips that they have, that could mean, you know,
Speaker 4: the sort of incredible revenue growth that we've seen from
Speaker 4: Nvidia could come in. Ultimately, it's going to come in
Speaker 4: just because them, like the comps quarter over quarter over
Speaker 4: quarter are going to get more difficult, right, But obviously
Speaker 4: investors will just want to know that the still growth
Speaker 4: going forward.
Speaker 3: Maybe one of the reasons, Carol, we saw Jensen Wong
Speaker 3: last week out in India making those big moves when
Speaker 3: it comes to tying up with Reliance Industries, Tata and
Speaker 3: the like. Yeah, kind of.
Speaker 2: Really laying out the footprint, right to make sure that
Speaker 2: kind of the dominance I guess continues right going forward.
Speaker 4: Yeah, exactly, and making sure that they're not you know,
Speaker 4: so reliant just on like Taiwan Semi or you know,
Speaker 4: just that part of the world.
Speaker 3: Okay, so oh go ahead, girl.
Speaker 5: Well among those.
Speaker 2: Max seven, is there one in particular that you think
Speaker 2: investors should be focusing on or is it equally kind
Speaker 2: of laid out?
Speaker 4: You know, the thing is that the stories are so
Speaker 4: different across all four of them that I do think
Speaker 4: that it's important for investors to be looking at each
Speaker 4: and every one. I mean just even the stock moves
Speaker 4: are so different. I'm looking at you know, Microsoft and
Speaker 4: Meta for later in this week, and you know, Microsoft
Speaker 4: shares of trailed the.
Speaker 6: S and P.
Speaker 4: But Meta is one of the best performers. So those
Speaker 4: companies are reporting on the same day. You have to
Speaker 4: look at both. You know, these are all such important companies,
Speaker 4: as you were saying, I mean a huge part.
Speaker 5: Of the S ANDP.
Speaker 3: Does it get to the point at some point soon, Carmen,
Speaker 3: where you know, we don't necessarily need to see these
Speaker 3: companies continue to spend because they have whatever chips they need.
Speaker 3: I know that's not great for Invidia, but is there
Speaker 3: a law of diminishing returns with this type of technology
Speaker 3: or is the idea that in video is going to
Speaker 3: come out with something after the Blackwell that these companies
Speaker 3: will then need to spend tens of billions of dollars
Speaker 3: on also.
Speaker 4: I mean, I think that's like the million or billion
Speaker 4: or chillion dollar question, and is if Nvidia can continue
Speaker 4: to innovate and spin it forward. And I think that's
Speaker 4: really what they're trying to do. That's what we're seeing
Speaker 4: with Blackwell. I'm sure that there are plans even beyond
Speaker 4: that to just you know, continue to build compute, to
Speaker 4: continue to build speed and all of these things. But yeah,
Speaker 4: that's why people are watching the capex on these companies
Speaker 4: so so closely, right as it matters.
Speaker 2: And then videos had the first mover advantage that's stocked,
Speaker 2: by the way, about one hundred and eighty five percent
Speaker 2: so far here four yep, just a shabby almost two
Speaker 2: hundred percent. All right, Carmen, thank you so much. Bloomberg
Speaker 2: News Equities reporter Carmen Reinicky joining us here in our
Speaker 2: Bloomberg studio. That's one focus for investors this week, Tim,
Speaker 2: we got to get to the other one.
Speaker 3: Yeah, that's certainly US elections. Eight days until election day,
Speaker 3: both candidates hitting the campaign trail over the weekend, tapping
Speaker 3: big venues, in big celebrities, and making their final pitches
Speaker 3: to voters.
Speaker 7: For the past nine years, we have been fighting against
Speaker 7: the most sinister and corrupt forces on earth.
Speaker 3: With your vote in this election, you.
Speaker 6: Could show them once and for all that this nation
Speaker 6: does not belong to them.
Speaker 8: And I'm going to tell you as I travel around
Speaker 8: our country, there is an overwhelming call for a fresh start,
Speaker 8: for a new generation of leadership that is optimistic and
Speaker 8: excited about what we can do together.
Speaker 5: All right.
Speaker 2: Of course, Donald Trump and Kamala Harrison the campaign trail,
Speaker 2: both laying out their vision going forward. Safe to say
Speaker 2: it's a campaign season that has seen both focusing on
Speaker 2: those key swing states and also venture shrink to his
Speaker 2: states that are not and that they pretty much have
Speaker 2: no chance of winning. For Donald Trump, that included a
Speaker 2: big rally in New York City yesterday.
Speaker 3: All Right. For more, it takes us to a most
Speaker 3: read story on the Bloomberg Today and why Trump's campaign
Speaker 3: came to New York back with us as Bloomberg Opinion
Speaker 3: Senior Executive Editor Tim O'Brien, he's here in our Bloomberg
Speaker 3: BusinessWeek studio. Tim also the author of Trump Nation, The
Speaker 3: Art of Being the Donald. Tim, you have a great
Speaker 3: call him out today about why Trump came back to
Speaker 3: New York City. I mean, this is a place that
Speaker 3: he left a few years ago, but it was a
Speaker 3: place that also built his fortune. Why did Trump come
Speaker 3: back here?
Speaker 7: I don't think it was strategy, Tim, It makes no
Speaker 7: sense to come to New York if you're at the
Speaker 7: tail end of a race in which seven swing states,
Speaker 7: New York not being one of them is going to
Speaker 7: determine the outcome. I think he came for personal reasons.
Speaker 7: You know, he is a New Yorker to his core,
Speaker 7: and I think he's decamped to Palm Beach, but it'll
Speaker 7: always be a New Yorker. He wants the city to
Speaker 7: love him. You know, he got tried in three different
Speaker 7: trials that ended up with very embarrassing judgments for him.
Speaker 7: That sort of seemed like the end of his run here.
Speaker 7: But he clearly wasn't done with it. And I think
Speaker 7: he came back to Madison Square Garden in part to
Speaker 7: show that he was still around to New Yorkers, but
Speaker 7: probably more importantly New York's and the media capital.
Speaker 9: Of the world.
Speaker 7: And I think he wanted a lot of eyeballs and
Speaker 7: he wanted a lot of attention for what he had
Speaker 7: to say on Sunday. I think what came out of
Speaker 7: that convenure or out of that rally is something we
Speaker 7: should really reflect upon. But he did come I think
Speaker 7: for the media.
Speaker 2: Scrutiny, I want to get into what we should be reflecting,
Speaker 2: But I want to go back to you have come
Speaker 2: into this studio and talked to us about Donald Trump
Speaker 2: being a master of media, and he understands right the
Speaker 2: optics of being at Medicine Square Garden and a huge
Speaker 2: crowd around him and kind of laying it out there.
Speaker 7: And you know, sort of repeating the role call of
Speaker 7: speakers who were at the RNC in July.
Speaker 9: I was there.
Speaker 7: It was very similar to the RNC. Hulk Hogan showed
Speaker 7: up again to shirt off. Trump gave a closing speech
Speaker 7: that was somnan ambulent and rambling, and I don't know
Speaker 7: if it did anything for him again tactically or strategically,
Speaker 7: but it allowed him to sort of indulge his own
Speaker 7: need to be in the spotlight.
Speaker 2: In terms of some of the folks that spoke at
Speaker 2: yesterday's rally, it does seem like, obviously there were some
Speaker 2: things that have gotten a lot of media attention, and
Speaker 2: most or many Americans would be are appalled by what
Speaker 2: was said in a nation that is, you know, the
Speaker 2: result of immigrants. Having said that, what's your understanding of
Speaker 2: campaigns and how much the Trump team knew who was
Speaker 2: going to be there, what they were going to say
Speaker 2: in terms of what they said at the rally, well,
Speaker 2: I mean, because they seemed to be backing off saying, oh,
Speaker 2: you know a little bit.
Speaker 10: Yeah.
Speaker 7: The rally was a fountain of misogyny, racism, xenophobia, a
Speaker 7: lot of talk about the other. I don't think it's
Speaker 7: it's partisan or ideological to make that observation. It's just
Speaker 7: about tolerance and core values. And there were heinous, ugly
Speaker 7: things said on that stage. Whether or not Trump's political
Speaker 7: team vetted the speakers who came out, I mean, there
Speaker 7: were you know, sort of c list comedians and yeah, yeah, yeah,
Speaker 7: and who who just you know, became sort of like
Speaker 7: fraternity bros, screeching racist rants. If they didn't fet them,
Speaker 7: they should have. If they did, then they shouldn't have
Speaker 7: let them on the stage. They were on the stage
Speaker 7: because they're they're articulating part of what Donald Trump's message is,
Speaker 7: which is that he's threatened by the other. His campaign
Speaker 7: is threatened by the other. They defind the other broadly,
Speaker 7: whether it's China, or people of color, or immigrants, or
Speaker 7: Democrats or women on down the list. And there was
Speaker 7: a lot of that last night.
Speaker 3: Tony Hinchcliffe, the comedian that we're all talking about. His
Speaker 3: joke that did not get that is getting a lot
Speaker 3: of attention today, is about comparing Puerto Rico to a
Speaker 3: pile trash in the ocean. The Trump campaign did something rare,
Speaker 3: and they actually came out and said that that wasn't
Speaker 3: part of their view. It's not often that they'll rebuke
Speaker 3: people who speak at their rallies to him. What was
Speaker 3: notable to me, though, and it wasn't even a rebuke,
Speaker 3: but was notable to me is that that was sort
Speaker 3: of the only part that they distanced themselves from right.
Speaker 7: I mean, there was there was you know, equally horrific
Speaker 7: stuff said about Kamala Harris and her race and her
Speaker 7: gender and her nationality. Also, you know, Hingecliff may have
Speaker 7: been a comedian, but what he said wasn't a joke.
Speaker 7: It was just it was a racist smear. And I
Speaker 7: would argue that probably they thought it might be safe
Speaker 7: to put that in the mouth of a comedian, so
Speaker 7: there was deniability. Oh can't you just take a joke?
Speaker 7: Who we gotten too politically correct that you just can't
Speaker 7: see something funny about slagging an entire territory.
Speaker 3: So fair to say that the Trump campaign accomplished what
Speaker 3: it set out to do yesterday, or is the fact
Speaker 3: that we are focused on this and not his sit
Speaker 3: down with Joe Rogan that aired on Saturday the focus
Speaker 3: of what we're talking about.
Speaker 7: Well, you know, at one point during Trump's comments at
Speaker 7: the garden, he said, you know, the Republican Party is
Speaker 7: the party of inclusion, and I really like that while
Speaker 7: everything being set around him was as divisive as imaginable.
Speaker 7: So if their goal was actually to embrace this idea
Speaker 7: that the Republican Party could be a unifying force at
Speaker 7: a moment where we have great political polarization. They failed utterly.
Speaker 7: The other way to interpret that is they actually aren't
Speaker 7: serious about any of that, and they're willing to indulge
Speaker 7: racism or extremism in the surface in the service of
Speaker 7: trump Ism and Trump's on candidate.
Speaker 2: There's what Donald Trump said and the other said on stage,
Speaker 2: but there's also all of the Americans and voting public
Speaker 2: that were around them that didn't necessarily Boo didn't necessarily
Speaker 2: walk out. And I guess, like him or not, Donald Trump,
Speaker 2: I constantly think about half of America who are okay with.
Speaker 7: That is a great observation, you know, because it's a
Speaker 7: little simplistic to simply point the finger Donald Trump. He
Speaker 7: is an outcome as much as he's a cause of
Speaker 7: these things. And he represents something that's been in the
Speaker 7: United States for a very long time. We fought a
Speaker 7: civil war here with slavery existed here on and on
Speaker 7: and on, And I think people have to decide what
Speaker 7: they want to say their authentic values are, whether they're
Speaker 7: a Democrat or a Republican. When it comes to I
Speaker 7: think racism and sexism and this kind of vitriol, no
Speaker 7: one should embrace it.
Speaker 2: You know, that vitriol from Donald Trump directly right, you
Speaker 2: are the subject of a lawsuit from him, wrote a
Speaker 2: book on him. If there is a second term in
Speaker 2: the White House, what's your biggest fear?
Speaker 7: Well, I mean, I think Trump has told us what
Speaker 7: that's going to be.
Speaker 2: I think do you agree with those though tim that say, oh,
Speaker 2: it's just show and he's not going to actually do
Speaker 2: all that stuff.
Speaker 5: Give me for interruption, No, No, that's fine.
Speaker 7: I think he deeply wants to do these things. I
Speaker 7: think he has authoritarian impulses. I think he wants to
Speaker 7: weaponize the Justice Department against his enemies. He said he's
Speaker 7: going to do that. I think he wants to silence
Speaker 7: dissent within the country. He said he wants to do that.
Speaker 7: I think he wants ideological sniff tests at public schools.
Speaker 7: He's a book banner. He is going to institutionalize things
Speaker 7: in this country that most Americans aren't used to being around.
Speaker 7: And I think we have to really think about what
Speaker 7: that means.
Speaker 3: Why do you think we've seen such a silence, at
Speaker 3: least this time around, from corporate America, from large media organizations.
Speaker 3: A couple in the news right now over the last week,
Speaker 3: The Washington Post and the Los Angeles Times for coming
Speaker 3: out and saying we're not going to endorse anyone this
Speaker 3: time around. Why do you think we're seeing that silence
Speaker 3: right now?
Speaker 7: Well, because you know, people become cowed by power. And
Speaker 7: I think the anticipation in recent weeks is that Trump's
Speaker 7: polling numbers improved against Harris. If he becomes president again,
Speaker 7: certainly businesses had reason to wonder whether or not he'll
Speaker 7: weaponize the powers at his disposal of the federal government
Speaker 7: against them. The media is concerned about it. Everyone's concerned
Speaker 7: about it because the presidency's a powerful office, and I
Speaker 7: think people are hedging their bets. The issue is do
Speaker 7: you had your bets at the expense of ethics and
Speaker 7: decency and democracy and other values, or do you hedge
Speaker 7: them for just raw self interest and a lack of courage.
Speaker 2: If Donald Trump, I always think about this, like if
Speaker 2: he hadn't come to power, if he hadn't become president,
Speaker 2: would we still have this division.
Speaker 5: And this hate.
Speaker 7: Well, so I think the division has always existed. I
Speaker 7: think Trump just made it more comfortable people to express
Speaker 7: it more openly. Social media gave it a place to
Speaker 7: sort of proliferate in a way that prior media environments
Speaker 7: didn't and for people to sort of live in echo
Speaker 7: chambers where they're not talking to their neighbors and getting
Speaker 7: different points of view. And I think we have to
Speaker 7: come to terms with it as a country. And if
Speaker 7: there's a virtue to the rival of Donald Trump, is
Speaker 7: the stripped this band aid off, these myths we tell
Speaker 7: ourselves about the countries about and we should take that
Speaker 7: on in a transparent and full blooded way.
Speaker 3: Without asking you to give a prediction, what do the
Speaker 3: next eight days look like?
Speaker 9: A prediction, my friend?
Speaker 5: It might be nine or ten or eleven days.
Speaker 3: I mean, i'd sound like a broken record.
Speaker 7: It appears, based on the polling, to be a very
Speaker 7: close race. However, I think the polls in the last
Speaker 7: few cycles have then wildly off in terms of outcome
Speaker 7: within their margins of error statistically, but not close in
Speaker 7: terms of ultimate outcomes. And I think I think this
Speaker 7: race could end up surprising people in terms of what
Speaker 7: we see next week.
Speaker 5: Does the early voting like so much? Early votings say
Speaker 5: something to you.
Speaker 7: Well, I think you know. The positive thing on early
Speaker 7: voting is the voters are engaging and you want that.
Speaker 7: And it appears the voters from both parties are engaging,
Speaker 7: and that's a good thing. People shouldn't sit on their
Speaker 7: couches when they have.
Speaker 3: The ability to vote.
Speaker 2: Agreed, Agreed, Thanks for engaging with us, always, always, Bloomberg
Speaker 2: Opinion Senior Executive Editor Tim O'Brien Brian of course, joining
Speaker 2: us in studio. You could read Tim's story more from
Speaker 2: Bloomberg Opinion. You could find it on the Bloomberg or
Speaker 2: at bloomberg dot com slash Opinion.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 10: Public health tape Your life Today, but you didn't even
Speaker 10: know it.
Speaker 3: Viruses Pathogen's threatened to bring us to our knees.
Speaker 10: We need to tell the story of public health.
Speaker 11: I'm really worried that any abundant you can just because
Speaker 11: we have not yet.
Speaker 3: Pretty bad to kind of quality is our root cause
Speaker 3: of film.
Speaker 9: Said, trust level is broken.
Speaker 3: If the politicization that's killing public health is like the
Speaker 3: foundation of your house, and let me tell you ours
Speaker 3: is crack.
Speaker 5: All right.
Speaker 2: That, of course is public health, and the story of
Speaker 2: public health is the subject of a new documentary. It
Speaker 2: is called The Invisible Shield. It's a four part series
Speaker 2: that reveals a little known truth. The series, by the way,
Speaker 2: made possible by Bloomberg Philanthropies and Radical Media and airs
Speaker 2: on Bloomberg TV tonight through Thursday at six pm Wall
Speaker 2: Street Time.
Speaker 3: We got with us doctor Josh Scharfstein, weistein for Public
Speaker 3: Health Practice and Community Engagement the Johns Hopkins Bloomberg School
Speaker 3: of Public Health. He's in the series. He's also the
Speaker 3: author or the author of the Opioid Epidemic What Everyone
Speaker 3: Needs to Know. Doctor Scharsteina joins us from the American
Speaker 3: Public Health Conference in Minneapolis, where he and others are
Speaker 3: holding a screening event a little later today with three
Speaker 3: thousand public health professionals. Doctor Sharcin, nice to have you
Speaker 3: back with us. You joined us regularly during the height
Speaker 3: of the pandemic, and we certainly appreciated that. We appreciate this.
Speaker 3: I want you to talk a little bit about The
Speaker 3: Invisible Shield, because I think that was a really striking clip,
Speaker 3: because yes, each and every day we're essentially protected from
Speaker 3: disease and from an early death by public health innovations
Speaker 3: that have been made over the past few thousand years.
Speaker 3: How should we be thinking about this in our day
Speaker 3: to day life.
Speaker 10: You know, there's a saying that public health saved your
Speaker 10: life today, but you didn't even know it. We go
Speaker 10: about our daily lives, were able to do all the
Speaker 10: things we want to do, in part because we're not
Speaker 10: suffering horrible injuries or you know, tainted food poisoning, you know,
Speaker 10: choking on dirty air or contaminated water. But we sort
Speaker 10: of take those things in stride now because the public
Speaker 10: health system has been so successful, But we really can't
Speaker 10: take it for granted. And the message of this series
Speaker 10: is how much work has gone into building up this
Speaker 10: shield and how fragile it can be, and we need
Speaker 10: to now really pay attention to it.
Speaker 2: You know, I do think about when you talk about
Speaker 2: public health. I think there are so many things that
Speaker 2: people just take for granted about what public health has done,
Speaker 2: doctor Sharfstein. So what are those initiatives? What is it
Speaker 2: when we talk so much about public health? What are
Speaker 2: those things that we take for granted, and you know
Speaker 2: that are so important.
Speaker 10: It used to be that most families. If they didn't
Speaker 10: have a child die in the first couple of years
Speaker 10: of life, they certainly had a relative who had a
Speaker 10: child die. It was a very very common occurrence. Children die.
Speaker 10: The pres of the United States had children die, and
Speaker 10: it was because of all kinds of preventable diseases, and
Speaker 10: those are gone, and you know, infant mortality is much
Speaker 10: much more rare. It's just one window into the kinds
Speaker 10: of things that public health has done for us. And
Speaker 10: what we saw in the pandemic is that people can
Speaker 10: get very upset at public health and they can wonder
Speaker 10: why we even have a public health system. But that
Speaker 10: is a very dangerous way of thinking because of all
Speaker 10: the things that public health does. You know, I'm sitting
Speaker 10: in this hotel room here in Minneapolis for this big conference,
Speaker 10: and you know, I can just go to the top
Speaker 10: and get water. You know, I can walk outside without
Speaker 10: you know, trouble breathing the air, which isn't true in
Speaker 10: other countries necessarily. And there's so many things that we
Speaker 10: need public health to keep delivering. And with the nature
Speaker 10: of the challenges that we have today, the way that
Speaker 10: viruses can traverse the world so quickly, all the other
Speaker 10: problems out there. We need public health to keep us safe,
Speaker 10: and that's a critically important message, and really appreciating the
Speaker 10: history makes that message even stronger.
Speaker 3: But it also comes at a time, doctor Sharfstein, where
Speaker 3: trust in these so called institutions isn't necessarily high, or
Speaker 3: it's deteriorating quite a bit over the last few years.
Speaker 3: We certainly saw that during the pandemic, and we see
Speaker 3: that with that the way that's playing out in the
Speaker 3: election right now, with who different candidates want to appoint
Speaker 3: to certain positions, and the way that some of them
Speaker 3: are skeptics of institutions and also of vaccines, for example.
Speaker 3: How do you do that at a time where there
Speaker 3: is this skepticism, where is there is this mistrust of institutions.
Speaker 10: Well, that is what we'll be talking about today at
Speaker 10: the conference. It's something on a lot of people's minds
Speaker 10: in public health. One of the answers is to essentially
Speaker 10: go analog, to not just rely on on messages you're
Speaker 10: posting on the web or press releases you're putting out,
Speaker 10: but to be meeting people in communities with people that
Speaker 10: they already trust. So it's their doctor, it's their faith leader,
Speaker 10: a local business really making sure that people are hearing
Speaker 10: messages not just online because online you're competing against just
Speaker 10: a flood of falsehoods on many of these issues like vaccines,
Speaker 10: but actually in the real world, people they trust, and
Speaker 10: the public health community has to really adapt to that reality,
Speaker 10: both in terms of the humility that we have and
Speaker 10: the transparency that we offer, but also in the kinds
Speaker 10: of partnerships that we can develop so that people really
Speaker 10: understand they're getting good information from people who care about them.
Speaker 10: In public health, we care that you get to live
Speaker 10: the life you want to live, that you're healthy, to
Speaker 10: see your children grow up, and that you're children and
Speaker 10: can grow up. And having that message delivered not just
Speaker 10: by the person who's for the government. That is, you know,
Speaker 10: people are being told not to believe, but that message
Speaker 10: is also being delivered by people in your community. That's
Speaker 10: I think one of the solutions.
Speaker 2: You know, one thing I wanted to ask you, doctor Sharstein,
Speaker 2: is you know what is your biggest concern when it
Speaker 2: comes to the US election outcome and what it may
Speaker 2: mean for public health spending and work or attention and
Speaker 2: the impact that it could ultimately have on the US
Speaker 2: public Safe to say, there are many that already feel
Speaker 2: like the US system or the US government leaves them behind.
Speaker 5: So I'm just curious what could happen on this front.
Speaker 10: Well, you know, I can tell you, as someone on
Speaker 10: the advisory committee to the Director of the Centers for
Speaker 10: Disease Control and Prevention, that this challenge that we're talking
Speaker 10: about is very well understood right now, and that there
Speaker 10: are a lot of changes being put into place to
Speaker 10: try to address it, to try to build trust through partnerships,
Speaker 10: a good information and transparency. I'll be frank I'm little
Speaker 10: concerned about Robert F. Kennedy Jr. Walking around and saying,
Speaker 10: you know, he's going to be in charge of all
Speaker 10: the public health agencies. This is someone who is just
Speaker 10: a bond of conspiracy theories and lies about public health
Speaker 10: and who I think could do grave damage to not
Speaker 10: just how people perceive public health, but the actual work
Speaker 10: of public health and the consequences of that are the
Speaker 10: consequences that Frankly, Robert F. Kennedy Junr. Has been involved
Speaker 10: in causing, which are massive outbreaks of preventable disease. And
Speaker 10: so I'm worried. I'm worried the outcome of the election
Speaker 10: and what could happen afterwards.
Speaker 3: I'm glad you brought up Robert F. Kennedy junior doctor Sharfstein. What,
Speaker 3: in your view could he do if he were put
Speaker 3: in a position of power over health and human services,
Speaker 3: for example, what could he do? What could he undo?
Speaker 3: And what could be the consequences of that?
Speaker 10: Well, you know, I think that it's good that we
Speaker 10: have different kinds of checks and balances. There's some really
Speaker 10: great people, many really great people who work in federal
Speaker 10: agencies who are obligated under the law to do the
Speaker 10: right thing, you know, for the public. But we certainly
Speaker 10: have heard claims that a new administration should revoke the
Speaker 10: approval of vaccines, revoke the approval of abortion medications, revoke
Speaker 10: the approval really without any meaningfully you know, persuasive scientific justification.
Speaker 10: And so, you know, we all take it for granted
Speaker 10: that we can send our kids to school and they're
Speaker 10: not going to get measles there. But if you revoke
Speaker 10: the approval of a vaccine, then you know that's going
Speaker 10: to happen. And when there are enough kids getting measles,
Speaker 10: kids start to die from measles, and it's like, you know,
Speaker 10: that's why we have a measles vaccine, so that there's
Speaker 10: a lot of potential risks. I can't handicap how likely
Speaker 10: they'd be, but I can tell you that it is
Speaker 10: very concerning to have someone who has been so hostile
Speaker 10: and so conversant with falsehoods saying that you know he's
Speaker 10: going to be bossing people around at agencies that we
Speaker 10: all rely on to protect our health.
Speaker 2: All right, going to leave it on that note, Doctor Scharstein,
Speaker 2: as always, thank you so much. Feistein for Public Health
Speaker 2: Practice and Community Engagement at the Johns Hopkins Bloomberg School
Speaker 2: of Public Health. Also talking to us about the new
Speaker 2: documentary series The Invisible Shield, made possible by Bloomberg Philanthropies
Speaker 2: and Radical Media the Bloomberg School of Public Health, by
Speaker 2: the way, supported by Michael R. Bloomberg, the founder of
Speaker 2: Bloomberg LP and Bloomberg Philanthropies. The series airing on Bloomberg
Speaker 2: TV tonight through Thursday at six pm Wall Street Time.
Speaker 2: All right, folks, Now, let's get to a region of
Speaker 2: the world that we are seeing increasingly catch the attention
Speaker 2: of investors.
Speaker 3: And that is India. JP Morgan, CEO Jamie Diamond says
Speaker 3: there's a substantial opportunity for India as companies look to
Speaker 3: diversify their supply chains away from China. That's according to
Speaker 3: an interview with US CNBC TV eighteen. He did caution, though,
Speaker 3: that the transition will take years as firms navigate the
Speaker 3: complexities of relocating operations. Increasingly, Carol, we see a growing
Speaker 3: number of stories about companies expanding their presence in India
Speaker 3: and investors certainly making that's there.
Speaker 2: Yeah, I printed out a bunch of them with a
Speaker 2: view on the Indian economy. We are delighted to have
Speaker 2: with us the chairman of the Same Peak of India CSSET,
Speaker 2: which is the largest public sector bank and the biggest
Speaker 2: lender in India. He joins us here in studio, chair
Speaker 2: CETI so nice to have you here on Bloomberg Television
Speaker 2: and Radio.
Speaker 5: You were in DC.
Speaker 2: Let's start there for the IMF meetings. What if the
Speaker 2: meetings gave you optimism for India and the world more broadly,
Speaker 2: and what did not?
Speaker 11: Yeah, thanks for having me on the show. I think
Speaker 11: the positive news which are mudged and the IMF meetings
Speaker 11: is that the global inflation is coming down. Say it's
Speaker 11: a good news, while the growth rate seems to be
Speaker 11: moderate still in the range of three to three point
Speaker 11: five percent. The bright spark, obviously is India, which is
Speaker 11: expected to grow out around seven percent to seven point
Speaker 11: two percent. Even the IMF places the growth rate out
Speaker 11: of seven percent, the Central Bank of India believes that
Speaker 11: the growth rate could be seven point two percent. I
Speaker 11: think it's a it's a really interesting story which is
Speaker 11: unfolding in India, both in terms of growth trajectory which
Speaker 11: the country is taking on, and the equity market is
Speaker 11: doing well and the inflation is also moderating there, while
Speaker 11: the food inflation is still a matter of concern.
Speaker 3: There in India. So let's talk about some different sectors
Speaker 3: of the economy. You heard me mention the comments by
Speaker 3: Jamie Diamond over at JP Morgan Chase about supply chains
Speaker 3: transitioning to India on the ground, what can you tell
Speaker 3: us about that actually happening in India right now?
Speaker 11: Yeah, I think there's a most visible success stories of course,
Speaker 11: Apple twenty five percent of Apple sixteen is produced in India.
Speaker 11: A couple of things which are very seriously being pursued
Speaker 11: by the Government of India is a performance linked incentive
Speaker 11: for various industries. More than sixteen to twenty industries, particularly
Speaker 11: in the areas of electronics and you know semiconductors. So
Speaker 11: these are the sectors which are getting the performance linked
Speaker 11: incentive from the Government of India, and there's a good
Speaker 11: amount of foreign capital which is coming into these sectors.
Speaker 2: What yeah, and what in particular tell us a little
Speaker 2: bit about that. I think I'm not kidding when we
Speaker 2: say the ton of stories. I have a pile stock
Speaker 2: stories India clipsing China and MSCI Global stock ages to
Speaker 2: dry flows.
Speaker 5: That was back in mid September.
Speaker 2: Blackstone sees Asia as growth engine, has scale in India.
Speaker 3: Juans and Wong was there last week.
Speaker 2: Brookfield to add to its thirteen billion dollar bet on
Speaker 2: India's projects.
Speaker 5: So there's so much going on. You point that out.
Speaker 2: We're in particular give us some insight for our Bloomberg audience,
Speaker 2: who's a global audience, but where the money has picked
Speaker 2: up dramatically.
Speaker 11: So the money is mainly coming in the couple of sectors,
Speaker 11: particularly in the renewables. I think there's a huge amount
Speaker 11: of focus with the commitment what India has given under
Speaker 11: the twenty six that you know by twenty thirty, the
Speaker 11: addition in the renewbr entergy would be almost five hundred gigabytes.
Speaker 11: That is attracting a lot of attention. And the largest
Speaker 11: sticks is another area the warehousing, roads, sports. These are
Speaker 11: all the areas which are attracting the global investment, you know,
Speaker 11: in a big banner.
Speaker 12: You know.
Speaker 2: I was in India now like ten, ten, twelve years
Speaker 2: ago and one of the things that I found so dramatic,
Speaker 2: and it was a trip that I took it like
Speaker 2: two in the morning with my team.
Speaker 5: We were going to Agara to see the taj Mahal.
Speaker 2: But what was fascinating is that's when you saw everything
Speaker 2: moving around, because that's when the roads were less busy
Speaker 2: and just so much infrastructure moving around. What can you
Speaker 2: tell us too about the infrastructure build out that many
Speaker 2: have deemed so necess sorry to take India to the
Speaker 2: next level.
Speaker 11: Absolutely, I think one of the most important requirements for
Speaker 11: Indian economy to continue to grow is strengthening the infrastructure.
Speaker 11: And there are two things which are happening. I think
Speaker 11: there's a significant government expenditure capital expenditure which is focused
Speaker 11: on the infrastructure building up, and there's a private investment
Speaker 11: also is coming in in a big manner in terms
Speaker 11: of infrastructure. We see a lot of airports being built,
Speaker 11: seaports being strengthened, and road network of course is one
Speaker 11: of the best now in India, and we have dedicated
Speaker 11: freight corridors which are coming in, you know, to enhance
Speaker 11: the speed of moving ruths from one place to another.
Speaker 3: So I think, yeah, I was just going to say
Speaker 3: we only have a few units left, but I want
Speaker 3: to move from the macro to the micro and talk
Speaker 3: a little about your plans over at SBI and where
Speaker 3: you're thinking about expansion in terms of parts that you're
Speaker 3: focused on growing, goals for growth over the next six
Speaker 3: months two years.
Speaker 11: So as you know, I think in terms of the reach,
Speaker 11: we have one of the best reaches. We have the
Speaker 11: largest network of branches, largest network of ATMs, We have
Speaker 11: served almost five hundred million customers, and every Indian family
Speaker 11: in some way you know, is engaged with SBI. We
Speaker 11: have significantly invested in the technology and digitalization in the
Speaker 11: last two three years and we would like to leverage
Speaker 11: that technology and digitalization to reach the underserved unserved across
Speaker 11: the country. Still, I think, you know, there are a
Speaker 11: lot of banking needs which are unmet in India. Which
Speaker 11: we want to reach them, and this investment in technology
Speaker 11: and digitalization has helped us to reach the bottom of
Speaker 11: the pyramid in a much lower cost, which means that
Speaker 11: you know, the investment in technology helped us to increase
Speaker 11: over operational efficiency. My focus in the next six months
Speaker 11: would be that how do I leverage the investments of
Speaker 11: what we met in technology to increase the operational efficiency
Speaker 11: and productivity for employees.
Speaker 2: I am curious too that you know, we've noticed too
Speaker 2: that deposits have been challenging for a lot of really
Speaker 2: all Indian lenders for the past few quarters. So your
Speaker 2: strategies that have worked and what else do you plan
Speaker 2: to do what's really worked in terms of building out deposits.
Speaker 11: Yeah. One thing of course is you know, in India,
Speaker 11: despite so much digitalization, Yeah, the physical presency is very
Speaker 11: much important in terms of deposit mobilization. And we have
Speaker 11: the largest physical presence there number two we have.
Speaker 5: Does that mean you continue to build out the physical
Speaker 5: presence we do.
Speaker 11: We want to enter into areas where we know we
Speaker 11: don't have a branch, we would like to set up
Speaker 11: that physical branch. And we have a very strong mobile application,
Speaker 11: which is you know, currently you will be surprised that
Speaker 11: every day we opened fifty to sixty thousand says bank
Speaker 11: account to d WOW. So we have twenty seven percent
Speaker 11: market share in Savings Bank, which is the low cost deposits.
Speaker 11: So our focus would be, you know how to be
Speaker 11: strength in this franchise and start mobilizing more and more
Speaker 11: low cost deposits.
Speaker 2: And increasingly just got about fifteen seconds. Are they wealthier
Speaker 2: deposits too? That you're noticing a lot of wealth.
Speaker 5: Creation we're seeing in Indias And we.
Speaker 11: Have largest number of clients who qualify to be wealth
Speaker 11: management customers and we are investing in a wealth management
Speaker 11: technology to reach out to them.
Speaker 5: AI AI too, just correct.
Speaker 11: Yeah, of course there's a large scale adoption of THEI.
Speaker 11: You can't speak about banking without talking about THEI.
Speaker 2: You can't speak about anything it assumes without talking about AI.
Speaker 5: Cher Seti, thank you so much. We really appreciate it.
Speaker 5: C Us Seti, Chairman of the State Bank of India, Frances.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Listen live
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Speaker 3: Republican Vice president for candidate and Ohio Senator Jadie Vance
Speaker 3: said Donald Trump would keep the US in NATO if
Speaker 3: re elected, though it's important to note that the Transatlantic
Speaker 3: Alliance isn't quote, just a welfare client. Van spoke on
Speaker 3: NBC's Meet the Press on Sunday.
Speaker 13: I think it's important, Kristen that we recognize that NATO
Speaker 13: is not just a welfare client. Donald Trump wants NATO
Speaker 13: to be strong. He wants US to remain in NATO,
Speaker 13: but he also wants NATO countries to actually carry their
Speaker 13: share of the defense.
Speaker 11: Bird.
Speaker 3: That was Republican Vice presidential candidate and Ohio Senator Jadie
Speaker 3: Vance on Meet the Press on Sunday. No question. Doctor
Speaker 3: Angela Stent is watching this closely. She's Senior Fellow at
Speaker 3: the Brooksings Institution and a member of the Council on
Speaker 3: Foreign Relations. She's a former National intelligence officer for Russia
Speaker 3: and Eurasia at the National Intelligence Council. Earlier, she was
Speaker 3: in policy planning at the US Department of State. She's
Speaker 3: also a professor Emerita of Government and Foreign Service at
Speaker 3: Georgetown University. She's also the author of Putin's World, Russia
Speaker 3: Against the West and with the Rest. She joins us
Speaker 3: from London.
Speaker 2: Doctor stan Angela, so great to have you back with us.
Speaker 2: What do you think depending on the outcome of the
Speaker 2: US election, if it is Donald Trump for second term,
Speaker 2: what will be likely the relationship between US and NATO.
Speaker 12: Well, President Trump and of course price presidential candidate Jati E.
Speaker 12: Vance have both been very critical of NATO, but particularly
Speaker 12: former President Trump, you know, saying that these countries don't
Speaker 12: carry the full share of the defense burden, as if
Speaker 12: this is totally a one way relationship and that NATO
Speaker 12: is some kind of protection racket. You know, our allies
Speaker 12: do things for us too. But I do think what
Speaker 12: will happen is countries will be under pressure to spend
Speaker 12: more on defense, and not all NATO members even spend
Speaker 12: the required two percent on defense. Some like Poland spend
Speaker 12: much more. And I think what Presidents Trump has also
Speaker 12: said is that maybe the US wouldn't agree to defend
Speaker 12: countries who don't spend enough on defense. So there'll be
Speaker 12: a lot of uncertainty. You know, the last time around. Apparently,
Speaker 12: former President Trump wanted to pull the US out of NATO.
Speaker 12: There's now legislation saying that he can't do that. It'll
Speaker 12: be a much rockier relationship with NATO, But NATO wanted
Speaker 12: the stands that and the other NATO countries have been
Speaker 12: taking measures to try and insulate themselves against some big.
Speaker 2: Break right, and also NATO certainly watching closely as this
Speaker 2: war continues to rage on what are we getting to
Speaker 2: our third winter here between Russia and Ukraine. Having said that,
Speaker 2: later on the recent news that Russia made a decision
Speaker 2: to bring North Korean troops to Shorebitz war weary forces,
Speaker 2: what does that say to you? We constantly talk about
Speaker 2: interesting geopolitical alliances in today's environment, but that move in
Speaker 2: particular says what you're the expert here.
Speaker 12: Well, first of all, it says that the Russians, you know,
Speaker 12: they're having a mobilization problem, so are the Ukrainians, but
Speaker 12: Therussians feel that they need more troops. The Ukrainians did
Speaker 12: invade the Korsk region of Russia. They've taken some of
Speaker 12: the territory. Russia has been pushing them back. But apparently
Speaker 12: what these ten thousand troops if we're to believe the
Speaker 12: Pentagon will do North Korean troops is actually go to
Speaker 12: the Korsk region and fight to try and take back
Speaker 12: all of this territory from Ukraine. And in fact, the
Speaker 12: Ukrainian Army is now published given its soldiers a phrase
Speaker 12: book of Ukrainian North Korean Korean phrases in the hope
Speaker 12: that maybe some of these North Korean troops will not
Speaker 12: continue fighting. So I think it's quite serious, it really,
Speaker 12: you know, this is the first time you have these
Speaker 12: foreign troops fighting on Russian soil, and I think that
Speaker 12: it could lead to greater instability. I mean, depending on
Speaker 12: what happens, it could also be quite detrimental to the
Speaker 12: Ukrainians if these North Korean soldiers are able to push
Speaker 12: them back further from the Krosk region, because this was
Speaker 12: an element that the Ukrainians hope would be a bargaining
Speaker 12: leaverage for them if and when there are negotiations with Russia.
Speaker 2: I want to point out South Korea is considering whether
Speaker 2: to send weapons directly to Ukraine, reversing a policy banning
Speaker 2: lethal aid to the country. It was according to a
Speaker 2: senior South Korean official. Soul has previously backfilled the US
Speaker 2: for shipments that has made and our reporting noting that
Speaker 2: if some of Seoul's vast stores of artillery shells started
Speaker 2: heading directly to Kiev alongside pyongyang supplies to Russia, that
Speaker 2: would result in the war drawing upon two of the
Speaker 2: world's largest artillery forces. To me, that would say a
Speaker 2: broadening out. Is that a fair assessment, Angela, and makes
Speaker 2: me wonder what, Yes, I think so, And I.
Speaker 12: Think yeah, And I think that we also understand that
Speaker 12: the South Koreans are not going to give much more
Speaker 12: intelligence help to the Ukrainians in their fight with Russia,
Speaker 12: but it does I think it could broaden it out.
Speaker 12: And I think I'm not sure that the Chinese are
Speaker 12: very happy about this. But you know, Putin has justified
Speaker 12: this by saying, we have a strategic partnership relationship with
Speaker 12: North Korea and we've been attacked our territory, therefore they
Speaker 12: can help us. And this really raises the prestige of
Speaker 12: North Korea. You know, our country where many of these
Speaker 12: soldiers are very short because they're malnourished, a country that
Speaker 12: can't feed its own people, and yet you know, has
Speaker 12: nuclear weapons and is now fighting in Russia.
Speaker 3: We're in a very interesting moment where we have the
Speaker 3: world's wealthiest person, according to the Bloomberg Billionaires Index, has
Speaker 3: been in contact with Vladimir Putin. I'm talking about that
Speaker 3: bombshell report last week from the Wall Street Journal that
Speaker 3: reported that Elon Musk have been in regular contact with
Speaker 3: the Russian president since late twenty twenty two. The discussions,
Speaker 3: according to the journal, were confirmed by several current and
Speaker 3: former US, European and Russian officials. A reminder that he
Speaker 3: has security clearance due to a lot of the government
Speaker 3: work that SpaceX does. Doctor stent to what extent should
Speaker 3: we be concerned about Elon's conversations with Putin?
Speaker 12: Well, I think we should be very concerned, you know,
Speaker 12: wonder what the motivation behind this is. Putin has said, well,
Speaker 12: we just talked once and it was about space. But
Speaker 12: even if they're talking about space exploration, as you yourself said,
Speaker 12: mister Musk has high security clearances, he knows a lot.
Speaker 12: What's he telling the Russians? Apparently he wants to make
Speaker 12: sure that, you know, Starling will be able to use
Speaker 12: whatever terrestrial stations it needs to continue operating, and that Russia,
Speaker 12: you know, could be an important part of it is
Speaker 12: the largest country in the world, but it raises very
Speaker 12: serious questions. And then of course you have Elon Musk's
Speaker 12: support of former President Trump. You know, he's paying people
Speaker 12: to register to vote, and of course you have the
Speaker 12: reports of former President Trump's conversations with Putin that have
Speaker 12: happened since he was president, and you just wonder where
Speaker 12: all this is leading. You know, Musk is a very
Speaker 12: wealthy man. Putin is reportedly also a very wealthy man.
Speaker 12: So I don't know if this is part of the
Speaker 12: club of billionaires, but there should be security concerns here.
Speaker 5: You know. It's interesting.
Speaker 2: We use interesting a lot this year, or the last
Speaker 2: couple of years, or the last decade. But what I'm
Speaker 2: thinking about is we kid but not kid about these romances,
Speaker 2: whether it's Donald Trump and Elon Musk or whether it's
Speaker 2: Donald Trump and Vladimir Putin. You've studied Putin. I think
Speaker 2: we've talked about this before. Is there a real relationship there?
Speaker 2: Or I think we've talked about Putin in the past
Speaker 2: and kind of playing with Trump or playing Trump specifically,
Speaker 2: But help me understand this relationship between the two or
Speaker 2: what it is.
Speaker 12: So I would think from former President Trump's point of view,
Speaker 12: he admires strong men, and we certainly know that he
Speaker 12: admires Vladimir Putin. Ladima Putin is a former KGB agent
Speaker 12: who used to be a case officer, and he understands
Speaker 12: how to manipulate people, and from some of the reports
Speaker 12: we've seen, he knows how to flatter people. He said
Speaker 12: very flattering things about former President Trump. Former President Trump
Speaker 12: really likes that it does Putin view Trump as someone
Speaker 12: who's a friend. I doubt it. I think this is
Speaker 12: all instrumental for him, but it's very useful for him.
Speaker 12: He would like to have a Trump victory in November
Speaker 12: because he then will see a more chaotic America. So
Speaker 12: I think there's a very different, great difference between the
Speaker 12: way that these two men view each other and what
Speaker 12: they view as the point of their relationship.
Speaker 3: Why, in your view, we're not hearing more from members
Speaker 3: of Congress who might understand that it's an issue the
Speaker 3: relationship here, but aren't coming out and saying that, hey,
Speaker 3: this is the type of thing that, at least in
Speaker 3: your view, doctor stun is dangerous.
Speaker 12: Well, I think we're probably hearing from Democratic members of Congress.
Speaker 12: They're speaking up. But as you know, people who elected
Speaker 12: officials in the Republican Party aren't really saying anything because
Speaker 12: no one wants to criticize what's happening there. Oh, I
Speaker 12: think that's probably, but it's not as if no one's
Speaker 12: talking about.
Speaker 5: This all right, So how are you thinking about? Man?
Speaker 2: How many times have we had this conversation, you know,
Speaker 2: when we might see an end to this war? But
Speaker 2: here we are, you know, getting ready, as I said,
Speaker 2: the third winter, and it's just pretty remarkable. Ukrainian President
Speaker 2: Zelenski saying today he had arrived in Iceland to talk
Speaker 2: about the Russian invasion, with leaders of several Nordic countries
Speaker 2: wanting to.
Speaker 5: Talk and rally allies around.
Speaker 2: His victory plan is a victory anytime soon in your view?
Speaker 2: And what gets us there and what won't get us there?
Speaker 12: Yeah. So I was at a meeting last month in Ukraine,
Speaker 12: and clearly the Ukrainian leadership is very concerned about the
Speaker 12: outcome of our own election because from what former President
Speaker 12: Trump has said, I mean, he said he'll end the
Speaker 12: war in twenty four hours. We obviously had no idea
Speaker 12: how we would plan to do that. But I think
Speaker 12: what we do know and again listening to J. D
Speaker 12: Vance is that support for Ukraine would possibly probably end
Speaker 12: with a Trump victory, a financial support, probably weapons support,
Speaker 12: and the Ukrainians would be under great pressure to negotiate
Speaker 12: a settlement with Russia, which really would not be in
Speaker 12: their interests. That is to say, if former President Trump
Speaker 12: offers President Putin, who we have to acknowledge has no
Speaker 12: interest in negotiations at the moment, but if he's offered
Speaker 12: something that would make it worth his while, and former
Speaker 12: President Trump has said that would include lifting sanctions against Russia,
Speaker 12: which of course Trump can't.
Speaker 9: Do on his own.
Speaker 12: There is a US Congress, So I think that's one scenario,
Speaker 12: and I do think with a Trump victory, the war
Speaker 12: probably will end sooner and it will end with a settlement.
Speaker 12: If there is a settlement that's not favorable to Ukraine.
Speaker 12: If there's a Democratic victory, if Vice President Harris wins,
Speaker 12: then I think you would have a reevaluation of the policy.
Speaker 12: You probably have a continuation of support for Ukraine. But
Speaker 12: I also think there will be less finite actual support
Speaker 12: coming from the United States in the next year. So
Speaker 12: I think either way we are looking at the possibility
Speaker 12: of negotiations happening sooner rather than later. But the question
Speaker 12: is when we have an administration that will give Ukraine
Speaker 12: more than you know, than it has at the moment.
Speaker 5: Doctor Angelis Stent, thank you so much. Always appreciate it.
Speaker 2: Author of Putin's World and of course over at Workings Institution.
Speaker 10: This is bloombokmark.
Speaker 9: A journal.
Speaker 2: How about you let me drive?
Speaker 7: No no, no, no's.
Speaker 9: Honey, please gravels. I want to drive.
Speaker 12: It's a good question.
Speaker 3: Try This is.
Speaker 1: The Drive to the Globe.
Speaker 10: Punk me effect well Byron jot.
Speaker 1: It on on Bloomberg Radio.
Speaker 2: All right, tiktack everybody about eighteen and a half minutes
Speaker 2: ago until we wrap up the find a trading session
Speaker 2: does feel like, Yeah, we're seeing definitely some enthusiasm.
Speaker 5: We're going to get.
Speaker 2: Into some of the sectors and the winterers and gain
Speaker 2: winters and losers.
Speaker 5: I should say a little bit later on.
Speaker 12: I'm just looking.
Speaker 3: I'd like to think of them as declining, as not losers.
Speaker 3: But for bringing that, what.
Speaker 2: Is it like the category ward and the winner is yeah,
Speaker 2: I can't even say that.
Speaker 3: Get the winners, I get the runners up.
Speaker 2: Almost four hundred names, three hundred and seventy six names
Speaker 2: in the S and P five hundred higher today one
Speaker 2: hundred and twenty seven to the downside.
Speaker 3: Yeah, we're certainly seeing some strength when it comes to
Speaker 3: the equity market today, more buyers than sellers. Let's see
Speaker 3: what our drive to the closed guests has to say
Speaker 3: about this. Back with us, as David Bonston, CIO over
Speaker 3: at the Bonson Group, He joins us here in the
Speaker 3: Bloomberg Interactive broker's studio, what do you make of this
Speaker 3: relentless move higher?
Speaker 6: Well, I think a lot of things are getting quite stretched,
Speaker 6: and that valuation story has has kind of confounded things
Speaker 6: all year long. You have expensive things getting more expensive.
Speaker 6: You do not have organic earnings growth. They already priced
Speaker 6: in really robust earnings growth and it's lived up to it,
Speaker 6: but it's not going above and beyond that.
Speaker 9: You have valuations are expanding.
Speaker 3: So if you're getting new money right now, how are
Speaker 3: you putting it to work? If things are expensive.
Speaker 6: So we're not index investors and we're not big tech investors,
Speaker 6: and so within a dividend growth, very concentrated portfolio, we
Speaker 6: never own more than about thirty companies at a time.
Speaker 6: We think there's good pockets of value in some of
Speaker 6: the consumer staples. We've got a very good year in
Speaker 6: both financials and even energy. Energy as a sector hasn't
Speaker 6: done well, but midstream has done quite well, and it's
Speaker 6: still really well valued. But we also are going in slowly,
Speaker 6: we're tethering. If we're getting brand new cash in, we're
Speaker 6: not putting every dollar of it to work on day one.
Speaker 5: How much new cash are you bringing in?
Speaker 6: How much new cash we bring it in in terms
Speaker 6: of just new moneies that come in. Yeah, well, we
Speaker 6: bring in anywhere from fifty to one hundred million dollars
Speaker 6: a month of new money every month.
Speaker 5: Is that pretty regular?
Speaker 2: I'm just curious if it's different from what you've seen
Speaker 2: over the last six months or so.
Speaker 9: It's been very consistent for us for a few years now.
Speaker 6: A bad month is fifty, a good month is one
Speaker 6: hundred and twenty. And right now we're kind of tethering
Speaker 6: it in. And again, some of them are undervalued things.
Speaker 6: If we get a company has disappointing earnings, it gives
Speaker 6: us a chance to add more. So what you guys
Speaker 6: are calling the losers of the decliners, that's what we like.
Speaker 9: We like those things when they take a check back.
Speaker 3: Where's the new money coming from?
Speaker 6: Well, look, there's still a lot of m and a activity.
Speaker 6: We've had a lot of clients have sold businesses. You
Speaker 6: have a lot of people that have had bonds and
Speaker 6: different things mature. The one thesis I don't agree with
Speaker 6: is this money market balance and all this cash on side.
Speaker 6: I don't think that money's coming back into equities.
Speaker 3: Where do you think it's going to go bonds?
Speaker 6: I think most of it was either reserved savings money
Speaker 6: that was previously zero interest deposit that went to money
Speaker 6: market to get a little yield, or it came out
Speaker 6: of the bond market where you could get rid of
Speaker 6: duration risk and get the same yield.
Speaker 3: I wonder why that number keeps getting higher.
Speaker 6: I think a lot of it is because people are
Speaker 6: confusing bank deposit and money market.
Speaker 9: That you had a lot of money market.
Speaker 6: Which is really short term te bills, commercial paper, and
Speaker 6: it just became a surrogate for bonds. Because after twenty
Speaker 6: twenty two, which twenty three is when bulk of this
Speaker 6: money moved, and you had the risk at Silicon Valley
Speaker 6: Bank and some of those things, money markets are paying
Speaker 6: five five and a half percent yields. People said, well,
Speaker 6: bonds are down ten percent fifteen percent, why do I
Speaker 6: need to go into bonds. I can go to money
Speaker 6: mark and get a higher yield. So it just kind
Speaker 6: of reallocated a lot of that positioning.
Speaker 2: In terms of treasury. And you look at the USL curve.
Speaker 2: I mean, do you think that we could once again
Speaker 2: test five percent here potentially on the ten percent.
Speaker 9: On the ten year. I do not know.
Speaker 6: I mean, obviously you could, but it would not be
Speaker 6: our thesis. I think that, look, there's been very little
Speaker 6: move up and tip spreads at all. It's been entirely
Speaker 6: real GDP expectations. So the real growth expectations are not
Speaker 6: good enough to get the ten year up to five percent.
Speaker 6: If it did, I wouldn't see it as a negative
Speaker 6: because it's not coming from higher inflation expectations.
Speaker 9: It's coming from higher.
Speaker 6: Real growth expectations. And I think that it's gotten quite
Speaker 6: stretched here. We were at three seventy, it's gotten up
Speaker 6: to the four twenty five for thirty. I would be
Speaker 6: very surprised if it goes much about four fifty. But
Speaker 6: that's because I'm long term bearish on structural growth.
Speaker 9: The tenure does not measure the FED.
Speaker 6: Every day I'm hearing someone say, why if the fedce
Speaker 6: cutting is a tenure going higher. The FED can't control
Speaker 6: the long end of the curve short end of it's
Speaker 6: a short that is all they can control. The tenure
Speaker 6: really does price in trillions of dollars of real people's
Speaker 6: expectations for nominal GDP growth.
Speaker 9: Inflation isn't moving. Real growth has moved up a.
Speaker 2: Bit, but doesn't the longer end of the yield curve
Speaker 2: potentially also factor in what the US government does in
Speaker 2: terms of debt on their balance sheet. And that is
Speaker 2: something that once again for those of us who have
Speaker 2: been around a long time, we remember all those arguments
Speaker 2: and concerns about the deficit, and then it went away,
Speaker 2: and now it's back again.
Speaker 6: And this is where I'm a contrarian from the lessons
Speaker 6: of Japan and the lessons of the US for fifteen
Speaker 6: years after our own financial crisis, I do not believe
Speaker 6: that growing deficits pushes the yields higher, puts downward pressure
Speaker 6: on yields because.
Speaker 9: It suppresses growth.
Speaker 6: And so Japan went to two hundred and fifty percent
Speaker 6: debt to GDP and ended up with negative yields forever.
Speaker 6: Central banks that manipulate and intervene at that stage, but
Speaker 6: the point being that real growth expectations go lower, not higher,
Speaker 6: from increased deficit spending. We're far past the point of
Speaker 6: a multiplier on this fiscal stimulus.
Speaker 3: I want to talk a little bit about a comment
Speaker 3: from Edi Ard Danny a little earlier today on Bloomberg TV.
Speaker 3: He talked about bond vigilantes mustering as the US and
Speaker 3: the UK prep debt sales. Are you concerned about a
Speaker 3: potential return of bond vigilantes.
Speaker 6: No, I'm kind of amused that we're talking about thirty
Speaker 6: or forty basis points, so that's supposed to be bond vigilantes.
Speaker 6: The tenures come all the way up to four point
Speaker 6: three percent, which is still seventy seventy five basis points
Speaker 6: less than it was a year ago. There's no bond
Speaker 6: vigilantes now. Ed is Defense, who's a brilliant guy and
Speaker 6: a friend. He's talking about the potential for it to happen.
Speaker 6: But again, the bond vigilanti thesis has been out there
Speaker 6: since post financial crisis. We've run up these deficits and
Speaker 6: it has done nothing to put downward pressure on bondial.
Speaker 3: That said, this election, what happens if one of these
Speaker 3: parties sweeps and they get this blank check to spend
Speaker 3: Either both can I don't care who you're talking about,
Speaker 3: they're both talking about spending a lot of money.
Speaker 6: Neither candidate is going to have a blank check to
Speaker 6: spend what they want even First of all, I think
Speaker 6: it's very unlikely that Harris ends up with a Democrat
Speaker 6: House and Senate. It would be a real miracle for
Speaker 6: her to win and that the Senate move in that direction.
Speaker 6: But let's say she has a fifty to fifty control,
Speaker 6: there's one or two Democrats that won't approve a lot
Speaker 6: of the spending as well. In Trump's case, a lot
Speaker 6: of the projections for deficit blowouts have to do more
Speaker 6: with the lost revenue side than increased spending.
Speaker 9: I still think he'll spend a lot. I don't think
Speaker 9: he minds spending or big debt and deficits.
Speaker 6: But the red side of the Senate and House I
Speaker 6: think will have to hold him in. They won't to
Speaker 6: the degree I need us to. All were debating is
Speaker 6: whether not the deficit goes up a trillion or a
Speaker 6: trillion and a half, But The biggest thing is going
Speaker 6: to bring deficits down a few hundred billion is rates
Speaker 6: coming lower. The term structure a treasury debt is so
Speaker 6: loaded to the short end of the curve that if
Speaker 6: you go from a five percent T bill to a
Speaker 6: two or three percent T bill, you're pulling out hundreds
Speaker 6: of billions of dollars of debt service cost. That's going
Speaker 6: to be some of the relief there.
Speaker 2: What do you make of a lost decade in stocks?
Speaker 2: You know that this has been something we've been everybody's
Speaker 2: been kicking around. A cost In of Goldman Sachs, chief
Speaker 2: US equity strategist, published a paper and basically what he
Speaker 2: said is suggesting the index S and P five hundred
Speaker 2: well gain only three percent nominal terms one percent in
Speaker 2: real terms per year over the next decade, which would
Speaker 2: be one of the worst on record.
Speaker 9: You buy that completely, But I feel like he plagiarized
Speaker 9: it for me.
Speaker 6: But I'm joking. David Costin is brilliant. His name almost
Speaker 6: rhymes with David Bonsen. And I've been saying this for
Speaker 6: several years. I believe the post crisis bull market ended
Speaker 6: November twenty twenty one, and we started at that point
Speaker 6: a period of what effectively could be a last decade.
Speaker 6: I think he said three percent real growth, and I
Speaker 6: could see it.
Speaker 5: Four or five there, three percent nominal, one percent in.
Speaker 6: Real, Right, that will feel like a lost decade to
Speaker 6: most people. Even if you get let's say three percent
Speaker 6: real five percent nominal, even then you're talking about a
Speaker 6: tiny fraction of.
Speaker 9: What investors got used to.
Speaker 6: Investors aren't even right now prepared for historical returns nine
Speaker 6: or ten in the SMP. They're used to fourteen or
Speaker 6: fifteen to fourteen or fifteen without down years along the way.
Speaker 2: Well, some would say that about rates, this is historically
Speaker 2: more normal, and you.
Speaker 6: Just cannot get the earnings growth, and you certainly can't
Speaker 6: get the multiple expansion to make that possible.
Speaker 2: All right, David Bonson, thank you so much, CEO of
Speaker 2: the Bonson Group, joining us right here in our Bloomberg
Speaker 2: Interactive Brokers.
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