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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern

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Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App.

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Speaker 1: Listen on demand wherever you get your podcasts, or watch

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Speaker 1: us live on YouTube.

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Speaker 2: Ruining us right now with SNBC Nco Securities Joe Livornia

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Speaker 2: for years on Wall Street, always with a vibrant message,

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Speaker 2: let's get the let's get the administration work basic. You

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Speaker 2: were in the first Trump administration, are you affiliated with

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Speaker 2: the second Trump?

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Speaker 3: This film?

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Speaker 4: I do know the Treasury Secretary. I think he is

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Speaker 4: doing a great job.

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Speaker 3: And you made a joke. He was perfect. That was

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Speaker 3: on any list. But my boss was Larry Kudlow.

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Speaker 4: So Larry created a role for me in actually Economic Council.

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Speaker 4: That was Trump one point.

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Speaker 5: Oh.

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Speaker 4: So now I'm in the private sector.

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Speaker 2: Larry Cudlow and I are on the same page. Just

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Speaker 2: goes back to Wayne Angel. That nominal GDP really matters.

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Speaker 2: Top line current GDP is this administration with the chaos,

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Speaker 2: whether Republican or Democrat. Have they dampened the animal spirit?

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Speaker 2: Have they dampened Cudlow's nominal GDP? No?

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Speaker 4: Tom and I would argue that I'm going to give

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Speaker 4: a counter narrative, and maybe it's that the chaos and confusion,

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Speaker 4: which is the conventional wisdom for now, is actually not

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Speaker 4: a bug of the system, but rather as a design

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Speaker 4: so as to keep trading partners offside. If it continues,

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Speaker 4: obviously the full year, that's a problem. But I would

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Speaker 4: say that what worries me much more on the ansertainty

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Speaker 4: side is.

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Speaker 3: What are we doing with tax policy?

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Speaker 4: Because if you look at the uncertainty index, what we

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Speaker 4: see is concerns about taxes are sky high. So we

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Speaker 4: need the Congress to figure out are these tax cuts

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Speaker 4: getting extended, are they not? Are there additional tax cuts?

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Speaker 4: How might we pay for them? And that's to me

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Speaker 4: is a bigger concern for the economy and what it

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Speaker 4: means for capacs ultimately growth and then nominal activity.

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Speaker 6: Seems like every company conference call is in to every

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Speaker 6: guest we have in here, and we have roughly twenty

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Speaker 6: five a day. Don't cite tax policy, they say the

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Speaker 6: uncertainty when you do five hours, you get a lot

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Speaker 6: just introduced into the system. Has simply been we just

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Speaker 6: don't know where the policy is going to be you

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Speaker 6: tell us where the roadmap is. Companies will adjust tomics

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Speaker 6: to say that companies are just investors, won't just it

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Speaker 6: just gives us a little bit of sensor, so we

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Speaker 6: understand the chaos from a negotiating perspective. That's fine, that

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Speaker 6: is a strategy. But boy, it seems like the market's

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Speaker 6: really craving.

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Speaker 3: Certainly around it does.

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Speaker 4: And I remember reading a book way back when by

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Speaker 4: Michael Jensen Harvard Business Review. We talked about the short

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Speaker 4: termsm of US corporate America, and maybe there's a little

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Speaker 4: bit of that now where people want certainty, they're not

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Speaker 4: going to get it. But also CEOs tend to be

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Speaker 4: pretty opportunistic, and you're buying a free option, so if

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Speaker 4: anything goes wrong. And by the way, the economy, we

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Speaker 4: could debate about the economic outlook, you could just blame

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Speaker 4: whatever is is convenience.

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Speaker 3: So it's probably part of that.

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Speaker 4: If you look at the small business side that generates

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Speaker 4: forty percent of the jobs, their numbers look great. So

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Speaker 4: I'm going to push back a little bit on that.

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Speaker 4: Let's see how we go after April second, and what

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Speaker 4: happens is we moved towards June.

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Speaker 2: Are you modeling sub two percent real GDP. We weren't

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Speaker 2: doing that pre election, were we.

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Speaker 4: So here's the thing, Tom, I don't like the first

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Speaker 4: quarter numbers.

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Speaker 3: They're going to look soft because the expenditure side happened before.

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Speaker 3: It just happened before, slack right unusual.

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Speaker 4: But what's really bizarre is that if you look at

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Speaker 4: like real income at least through January, it's up almost

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Speaker 4: three percent.

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Speaker 3: So you have, like the expenditure.

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Speaker 4: Side from Atlanta fed down about two percent. You've got

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Speaker 4: this huge increase on the real income side because job

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Speaker 4: growth is still positive. I'm not sure how to square

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Speaker 4: the circle right now. Yes, it does look like GDP

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Speaker 4: will be on the lower side than the higher side.

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Speaker 4: You're supposed to mark your numbers down for the year,

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Speaker 4: but having done this for a while, we also know

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Speaker 4: that you could drive a truck through the first and

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Speaker 4: last estimates.

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Speaker 2: Fair But you know, given trickle down economics, where's the

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Speaker 2: genie co official of the United States? I mean, is

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Speaker 2: this an administration governing with a presumed tax cut for

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Speaker 2: they have have halves against half of America flat on

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Speaker 2: their back.

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Speaker 4: Yeah, So this is where I would say that where

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Speaker 4: the Trump the Tax Cuts and Jobs Act tikcha, which

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Speaker 4: by the way, President Trump wanted to call it the

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Speaker 4: Cut Cut Cut Act ticchas. I like the former mob

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Speaker 4: But anyway, but if you look at the data through

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Speaker 4: the pandemic, and Kevin Hassett are current head of NEC,

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Speaker 4: Lowry's old job had done some nice work on this

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Speaker 4: as well. But if you look at the income by quintile,

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Speaker 4: the mid to lower ends and relative terms, that extraordinarily

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Speaker 4: well under Trump one point zero and in terms of

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Speaker 4: real meeting income was about six thousand dollars in those

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Speaker 4: first three years, and that was about five to six

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Speaker 4: times what had been in the prior sixteen years with

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Speaker 4: both Democrats and Republicans. So if the tax cuts, in

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Speaker 4: my opinions, the tax cuts are extended, you'll get that

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Speaker 4: blue collar boom that Larry my O boss talked about.

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Speaker 4: And I'm optimistic we'll have good wage growth, but we'll

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Speaker 4: see what happens.

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Speaker 3: You need to get this done.

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Speaker 6: I mean, judging just from your source of people you

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Speaker 6: talked to, do you think that tax will be extended?

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Speaker 4: I do think it's extended. So one of the things

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Speaker 4: people I thought it was interesting is when Speaker Johnson

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Speaker 4: got that budget blueprint throw I thought that was a

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Speaker 4: big deal because that told me we're going to get

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Speaker 4: the cr So the fact we didn't shut the government,

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Speaker 4: I think it was smart that Chuck Schumer kept the

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Speaker 4: government open because I would have delayed things another several weeks.

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Speaker 4: Depends is can we get a bill in place sometime

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Speaker 4: maybe before June that it can be signed by year.

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Speaker 4: That would make me more optimistic that we'll get good

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Speaker 4: growth if we're waiting, and I think, by the way,

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Speaker 4: we'll get the tax bill done, But if it happens

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Speaker 4: in December, I'm going to lower my GDP numbers.

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Speaker 7: Joelivern, you're with us.

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Speaker 2: Joseph flavourna SMBC Nego Security is an extended conversation this morning.

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Speaker 7: Good morning on your commune across the nation. Good morning, ninety.

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Speaker 2: Ninety one FF in Washington, ninety two nine FM in Boston.

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Speaker 2: Of course, good morning on YouTube. Subscribe to Bloomberg Podcast.

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Speaker 2: Just stunned at the results there.

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Speaker 7: Good morning to all of you.

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Speaker 2: Good evening, I should say in the Pacific room, Paul Joe, from.

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Speaker 6: Your perspective, what are the long term gains that we

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Speaker 6: may see in this economy for what may be some

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Speaker 6: short term pain what are the long term gains that

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Speaker 6: you're looking for.

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Speaker 4: It's clear that we can't sustain six percent budget f

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Speaker 4: HISS to GDP ratios, and you know, fortunately it was

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Speaker 4: ever party in power always blames the other site for

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Speaker 4: not being a fiscal hawk. But it seems like we

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Speaker 4: certainly need to do something on the spending side. And

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Speaker 4: what I've highlighted to clients is if you look over

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Speaker 4: the years, the GAO has done some interesting work about

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Speaker 4: how we do have a lot of waste abuse, some

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Speaker 4: fraud in the system. The Pentagon's paying six hundred dollars

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Speaker 4: for a hammer, the massive coss over runs for the

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Speaker 4: F thirty five. By the way, anybody, any politician, typically

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Speaker 4: wants something done that can.

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Speaker 3: Ever be touched.

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Speaker 4: It goes under procurement because we could always argue it's

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Speaker 4: national defense, so that spending doesn't get touched.

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Speaker 3: But GAO had said that.

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Speaker 4: Anywhere from one hundred to three hundred billion we could

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Speaker 4: get rid of per adum. Now I've heard people think

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Speaker 4: Elon must give a higher number.

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Speaker 3: I don't know if that could be the case.

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Speaker 4: But at least the older stuff said, look, if here's

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Speaker 4: one hundred to three hundred per year, over ten years,

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Speaker 4: it's one to three trillion, So that to me is meaningful.

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Speaker 3: But we'll see.

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Speaker 4: I like to again, this comes back to the budget

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Speaker 4: because I want things that are legislated, because if it's legislator,

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Speaker 4: you can't undo it every four years.

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Speaker 2: Registration is quite a legislature, right, I mean again, the

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Speaker 2: legislature's out of play. Well, right now, we got an

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Speaker 2: executive branch judiciary chase it after him.

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Speaker 4: That's right, Tom, And that's why we kind of need

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Speaker 4: to figure out. Okay, what you know, we haven't really

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Speaker 4: legislated a lot. We've done a lot of executive order.

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Speaker 4: That's why I'm relying. May not be the right word,

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Speaker 4: but I'm assuming that there's going to be something codified

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Speaker 4: in law in the House.

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Speaker 7: Okay, totally totally, Lavarn.

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Speaker 2: You're driving the market higher now, Futures up seventy, Joel,

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Speaker 2: And this is totally unfair to you because you're not

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Speaker 2: it's sixteen hundred Pennsylvania or those environs.

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Speaker 7: Right now. You say we need a tax cut.

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Speaker 2: Brilliant who listening or watching says we don't need a

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Speaker 2: tax cut. The line is tariffs will pay for it.

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Speaker 2: Supporting Canada in Mexico explain this.

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Speaker 4: Okay, so we I'm making the assumption there will be

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Speaker 4: some minimal level of tariff, and I don't know what

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Speaker 4: the numbers are going to be. Hopefully we'll know a

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Speaker 4: little bit more April.

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Speaker 3: Second.

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Speaker 4: My gut is that will extend a little bit further

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Speaker 4: than there. We'll get some clarity, but not everything we want. Again,

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Speaker 4: I don't know what they're doing in terms of the

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Speaker 4: tax cuts or sorry, the spending cuts, and I don't

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Speaker 4: know what the tariffs will be. I mean, there's roughly

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Speaker 4: three trillion of imports, so a ten percent tariff in

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Speaker 4: theory could raise three hundred billion at least in the

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Speaker 4: early years.

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Speaker 3: But I don't know what they're going to do with that.

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Speaker 4: Is that going to it's certainly not going to be

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Speaker 4: legislated in all likelihood, But is there a tariff?

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Speaker 5: What is it?

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Speaker 4: How many spending cuts are actually implemented, and how does

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Speaker 4: the economy perform?

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Speaker 2: You see legit work on this from year budget. Here's

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Speaker 2: CBO from the CBO.

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Speaker 3: Well, let me say this.

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Speaker 4: I don't like the CBO scoring because if you look

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Speaker 4: at they assume in the next to give you an

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Speaker 4: idea over a ten year scoring period. The difference between

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Speaker 4: using their revenue numbers, a difference between a three percent

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Speaker 4: economy and a one point eight percent economy over ten

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Speaker 4: year period is about four point three trillion of additional revenue.

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Speaker 3: So this notion CBO is.

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Speaker 4: Going along this current law versus baseline to me is

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Speaker 4: a big problem and you can get a huge tax

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Speaker 4: hike next year if it's not extended. To assume that

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Speaker 4: your revenue share or GDP is going to go up,

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Speaker 4: I think.

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Speaker 3: Is totally misplaced.

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Speaker 4: So there's a lot of things that are going on,

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Speaker 4: but I think the scoring has been willfully inadequate. But again, Tom,

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Speaker 4: until we see what's in these bills, I'm just speculating.

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Speaker 4: I want to see actually what happens, then I'll make

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Speaker 4: a judgment call at that point.

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Speaker 6: The most recent University in Michigan survey was disappointing to

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Speaker 6: the marketplace in the sense that it reflected slower growth

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Speaker 6: outlook and higher inflation outlook. How concerned are you about

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Speaker 6: inflation moving higher, whether it's driven by tariffs or not.

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Speaker 8: What is your inflation call?

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Speaker 4: So the inflation is long, What I am optimistic is

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Speaker 4: you are seeing money supply and it's hard to measure

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Speaker 4: totally broad credit creation.

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Speaker 3: A lot of credit now is outside the public.

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Speaker 4: Markets or in the private credit markets. M two growth

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Speaker 4: has slowed. You are seeing wage growth moderate, although I'm

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Speaker 4: not a big proponent that wages drive inflation. Gas prices

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Speaker 4: are dropping in some parts of the country. The energy side,

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Speaker 4: to me, is going to be very important and if

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Speaker 4: the administration is successful, and I think they will be,

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Speaker 4: but they need. One of my assumptions, they need gasoline

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Speaker 4: and oil prices down because you could lose about a

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Speaker 4: point on inflation headline and core if oil goes back

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Speaker 4: to sixty or slightly below. So we need that. So

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Speaker 4: that's how That's how I thinks see things shaping up.

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Speaker 3: Do you what do you.

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Speaker 8: Say to people who say tariffs are at tax on

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Speaker 8: the consumer?

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Speaker 4: So what I would say is, it's so if you

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Speaker 4: when you go through just a simple math of what

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Speaker 4: President Trumpet said last year, ten percent across the board,

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Speaker 4: sixty percent on China, you got like a nine tenths

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Speaker 4: increase in the price level, assuming you know everything was

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Speaker 4: passed through, which history suggests it's not. Some will be

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Speaker 4: absorbed in the margin, some will be absorbed in the

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Speaker 4: exchange rate. But I would say to people, Look, if

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Speaker 4: you're having to pay a one off higher price for

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Speaker 4: a good, but if you're a blue collar worker, you

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Speaker 4: have no tax on tips, no tax on overtime, which

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Speaker 4: by the way, those are supply side factors, and you're

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Speaker 4: getting paying no tax on social Security benefits and also

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Speaker 4: having the benefit of low marginal rates and low corpor rates.

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Speaker 4: That to me is a great trade off because ultimately,

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Speaker 4: in my opinion, it will drive long term productivity growth

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Speaker 4: through capital expenditure.

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Speaker 2: Thank you so much out on YouTube for this idea

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Speaker 2: of what our government does. And I adored an Admiral

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Speaker 2: Zoomal was one of my heroes a million years ago.

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Speaker 2: So we spent twenty four billion or whatever nine billion

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Speaker 2: of research costs on the Zoom Wall destroyer. We went

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Speaker 2: from x amount down to seven. It costs so much

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Speaker 2: it was a failure. Now we're back to urly Bloke.

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Speaker 2: I think Stravetis would say that's a good thing. Only

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Speaker 2: fourteen percent of the budget is controllable. What would be

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Speaker 2: the proper rece responds of the parties against President Trump.

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Speaker 2: Do you see a cogent response to the Trump economics.

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Speaker 3: So well, I'm not sure.

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Speaker 4: I don't ask you a question on the spending. I'm

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Speaker 4: confused on the question.

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Speaker 2: It can be either. I'm confused on the moment as well.

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Speaker 2: The confusion here is I don't see a cogent debate

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Speaker 2: about our fiscal policy over into what it means for

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Speaker 2: our family's investment policies as well.

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Speaker 7: Where's this debate in?

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Speaker 3: So I read six months?

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Speaker 4: So let me just sidetrack for a minute. Let's just

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Speaker 4: talk about Trump and omics. So what I say is

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Speaker 4: this isn't exactly what you ask, but at least we'll

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Speaker 4: talk about the economic policy is what I see as

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Speaker 4: a desire and intent to re engineer, reindustrialized the US

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Speaker 4: manufacturing base, and a tariff is a necessary but not

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Speaker 4: sufficient criterion to try to do that. In addition to

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Speaker 4: low corporate rates on domestic production, cheap and abundant energy

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Speaker 4: because it's very key to produce things, Germany is basically

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Speaker 4: isn't cost efficient anymore if you exclude the pandemic production there,

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Speaker 4: industrial productions back to it was in twenty twenty ten.

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Speaker 4: And of course any business friendly regulation permitting process I

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Speaker 4: think needs to change a bit. Even I think the

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Speaker 4: other side can agree on that. So that would kind

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Speaker 4: of encourage capital to come into the US. On the

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Speaker 4: fiscal side time, which you raise, which is very interesting.

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Speaker 3: We need to have that debate.

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Speaker 4: But I don't think we've ever realized how much spending

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Speaker 4: we just we just waste.

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Speaker 3: And if people talk about, oh, it's all entitlements.

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Speaker 4: And that's where the money is a thirty percent discretionary.

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Speaker 4: But there is a lot of waste and abuse even

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Speaker 4: on some of these titlement programs.

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Speaker 3: But people unfortunately.

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Speaker 4: Conflate getting rid of the abuse with oh, people are

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Speaker 4: losing their service, and that's not the case. But we

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Speaker 4: don't have that debate, and we should.

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Speaker 2: We have a debate here that we haven't talked about

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Speaker 2: basic economics. Where does SMBC and ECO see the unemployment

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Speaker 2: rate going given all this.

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Speaker 4: We've got the rate essentially in the low force four

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Speaker 4: to four and a quarter.

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Speaker 3: So we think it'll stay going to stay there?

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Speaker 4: Yeah, well it's for one now and I would say

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Speaker 4: out or call yes. That means to tell you the

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Speaker 4: truth that doesn't surprise us. We tend not to look

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Speaker 4: at other economists, in part because we don't want to

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Speaker 4: be biased. But to get a higher rate, Tom, we'd

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Speaker 4: have to be really pessimistic on growth also too, Oakin's

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Speaker 4: law is useful, which is that you know what Oakins laws,

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Speaker 4: but it's the relationship between potential GDP and what actually

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Speaker 4: happens in the economy. And the other thing is this

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Speaker 4: is that even if we had a slow period of

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Speaker 4: growth this year, maybe you talked earlier about the pain, Yes,

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Speaker 4: we're gonna have somewhat of a pullback on the fiscal side.

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Speaker 4: Secretary Besset mentioned detox. But if all of a sudden

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Speaker 4: it looks like twenty twenty six is going to accelerate,

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Speaker 4: financial conditions will leaves in anticipation of that. Hopefully there'll

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Speaker 4: be some clarity on the tax side, and companies wouldn't

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Speaker 4: lay people off, so there'd be no reason for the

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Speaker 4: unperpoint rate to rise if the twelve month forward was improving.

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Speaker 7: Joe, thank you so much.

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Speaker 3: Huge, Thank you guys, thank you, thank you.

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Speaker 2: Joel, Chief Economists, SNBC and Eco Securities, A swarm and

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Speaker 2: formally working with mister Cuddler with the Trump administration version one.

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Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live

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Speaker 1: weekday afternoons from seven to ten am. E's durn Listen

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Speaker 1: on Applecarplay and Android Otto with the Bloomberg Business app,

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Speaker 1: or watch us live on YouTube with that question.

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Speaker 2: Our equity discussion of Monday. Maybe dare I say of

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Speaker 2: the week as well? Liz Anne Saunders joins us now

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Speaker 2: with Charles Schwab. Lizzy Card to rule. I got to

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Speaker 2: be in the game even when I'm stressed. Going to

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Speaker 2: cash is a tough track record. How do you stay

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Speaker 2: in the game given the cross currents of March of

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Speaker 2: twenty twenty five.

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Speaker 9: So, I think within the equity space, thank factor focused.

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Speaker 9: As you know, Tom, we have been very factor biased

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Speaker 9: and oriented over the last couple of years, feeling like

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Speaker 9: the monolithic sector calls are much more difficult to do.

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Speaker 9: There's much more volatility on a weekly week basis at

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Speaker 9: the sector level, a little more consistency in terms of

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Speaker 9: performance at the factor level, and one of the factors

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Speaker 9: that we added to our focus list as we headed

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Speaker 9: into this year was a low volatility For obvious reasons,

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Speaker 9: you wanted to have a little bit of that protection

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Speaker 9: with that low volatility factor, and that's been the best

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Speaker 9: performing factor you guys track it at Bloomberg over the

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Speaker 9: past three months or so. So I think the best

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Speaker 9: way to navigate is a little bit more defense, but

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Speaker 9: not in the traditional defensive sectors, doing it via the

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Speaker 9: factor level.

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Speaker 6: Lizane, I think one of the concerns out there in

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Speaker 6: the marketplace is people are starting the question this economy.

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Speaker 6: If in fact some of these tariffs come in, it

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Speaker 6: could spell economic growth concerns, it could spell inflation concerns,

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Speaker 6: and that calls into question kind of the overall health

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Speaker 6: of the economy.

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Speaker 8: How material is that risk, because that would go to

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Speaker 8: the earning story.

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Speaker 9: Oh absolutely, I think right now, if you look at

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Speaker 9: if you look at betting odds, if you look at

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Speaker 9: a consensus of economists, you're somewhere in the thirty ish

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Speaker 9: percent probability of recession. But that's a completely moving target

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Speaker 9: as a result of the nature of this uncertainty and

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Speaker 9: the way we get tariff announcements, not to mention back

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Speaker 9: and forth pauses retaliations. But I think if we go

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Speaker 9: to the extreme on the tariff front, it raises recession risks,

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Speaker 9: not just in the United States, everywhere, and even if

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Speaker 9: we were to have more resilience from a trade perspective,

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Speaker 9: but as a country with less trade dependent, if you

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Speaker 9: started to see more weakness show up globally. That obviously

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Speaker 9: filters through in the United States, So not a better

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Speaker 9: than even bet at this point for recession. But I

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Speaker 9: think we all need to be dusting off recession watch

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Speaker 9: list to reflect this incredible amount of uncertainty. We're not

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Speaker 9: seeing a huge impact yet on the hard data. We're

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Speaker 9: seeing it obviously in the soft data. But at this point,

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Speaker 9: unless we get a reprieve on tariffs, what's more likely

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Speaker 9: to happen, like a couple of years ago, is the

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Speaker 9: hard data is more likely to catch down to the

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Speaker 9: soft data versus the other way around.

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Speaker 6: We've at the peak the trough. We did have a

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Speaker 6: ten percent pullback in the S and P five hundred.

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Speaker 6: We've rallied a few percentage points here, including the futures

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Speaker 6: market today. How does that market moved with a little

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Speaker 6: bit of hindsight here, was that a reasonable response to

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Speaker 6: this uncertainty that's been brought into the discussion.

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Speaker 9: Probably, But I think the fuller story gets told under

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Speaker 9: the surface of the indexes. You're right in the terms

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Speaker 9: of the S and P five hundred maximum draw down

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Speaker 9: has been ten percent this year, but if you look

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Speaker 9: at the average member level, the maximum draw down has

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Speaker 9: been fifteen percent. If you go down to the Nasdaq

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Speaker 9: and you look at average member maximum drawdown, you're a

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Speaker 9: date it's negative thirty three percent. So there's been a

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Speaker 9: lot of churn and weakness under the surface. We still

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Speaker 9: have a large cap bias in terms of what has

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Speaker 9: been leading from a broad style perspective this year. It's

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Speaker 9: just been large cap value, not large cap growth. That

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Speaker 9: still gives a lift to these capulated indexes in relative terms.

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Speaker 2: You and your team live on airplanes and outseeing the

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Speaker 2: schwab world. Is when somebody asks the question from the

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Speaker 2: chief seats Lizione Saunders, is the bullmarket over? Let me rephrase,

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Speaker 2: Is the bull market broken?

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Speaker 10: No?

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Speaker 9: But I think we are clearly in a correction phase.

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Speaker 9: It wouldn't surprise me if we continue this with this

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Speaker 9: trade uncertainty, and particular if the tariffs do go into

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Speaker 9: full effect on April second, that we could have a

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Speaker 9: cyclical bear market. I'm not sure I would yet be

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Speaker 9: at the point of stating that if the bull market

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Speaker 9: is over, that we're entering into some sort of secular

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Speaker 9: bear market. But we're in a cyclical pullback here, notwithstanding

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Speaker 9: some strength today. So I think that there is still

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Speaker 9: risk related to the uncertainty regarding tariffs.

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Speaker 2: Lyzienne Saunders, with just all the experience she has at

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Speaker 2: Charles Shrubs, she's with us for an extended conversation today.

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Speaker 2: Good morning across America, Good noon in Europe on the

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Speaker 2: Pacific Rim. We say good evening to all of you.

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Speaker 2: Just humbled by the success out on YouTube of Bloomberg podcasts.

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Speaker 2: Subscribe to Bloomberg Podcast Paul.

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Speaker 6: And some of the leading tech stocks that we've all

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Speaker 6: grown accustoms seeing moving higher and high, whether it's Google

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Speaker 6: or you know, Amazon or Microsoft, and you know peak

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Speaker 6: to trough are down fifteen to twenty percent here. How

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Speaker 6: do we think about the tech sector as potentially a

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Speaker 6: leader for this market, which it's been for many, many,

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Speaker 6: many many years.

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Speaker 8: Can we still rely on that?

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Speaker 9: I think you'd have to see stability and forward estimates.

444
00:20:43,720 --> 00:20:48,320
Speaker 9: Whether it's the Magnificent seven, or it's the tech sector

445
00:20:48,440 --> 00:20:51,879
Speaker 9: or maybe the growth trio that houses the Magnificent seven,

446
00:20:51,880 --> 00:20:56,840
Speaker 9: which we tech, communication, services and consumer discretionary. We still

447
00:20:56,880 --> 00:21:01,680
Speaker 9: have stronger earnings growth expected, or say the Magnificent seven

448
00:21:01,720 --> 00:21:04,320
Speaker 9: cohort relative to the S and P four ninety three

449
00:21:04,400 --> 00:21:06,240
Speaker 9: the other stocks within the SMP.

450
00:21:06,359 --> 00:21:09,359
Speaker 5: The problem is direction. Directionally, we're moving up.

451
00:21:09,280 --> 00:21:12,280
Speaker 9: A little bit in terms of X Magnificent seven, we're

452
00:21:12,280 --> 00:21:15,080
Speaker 9: moving down such by the end of the year we're

453
00:21:15,119 --> 00:21:18,280
Speaker 9: going to be not full convergence. But in this space

454
00:21:18,359 --> 00:21:22,280
Speaker 9: on consensus numbers, you've got Magnificent seven looking at maybe

455
00:21:22,440 --> 00:21:26,480
Speaker 9: twenty percent earnings growth versus mid teens for the rest

456
00:21:26,520 --> 00:21:28,879
Speaker 9: of the s and P five hundred, and that is

457
00:21:28,880 --> 00:21:31,280
Speaker 9: in contrast to a year ago where the Magnificent seven

458
00:21:31,320 --> 00:21:33,800
Speaker 9: had about fifty five percent earnings growth and the rest

459
00:21:33,800 --> 00:21:36,399
Speaker 9: of the SMP was very low single digit.

460
00:21:36,560 --> 00:21:38,120
Speaker 5: So it's it's the direction.

461
00:21:38,280 --> 00:21:41,400
Speaker 9: It's the direction of travel that matters, and I think

462
00:21:41,440 --> 00:21:44,080
Speaker 9: that's been one of the fundamental reasons why we've seen

463
00:21:45,280 --> 00:21:46,920
Speaker 9: that group of stocks lag this year.

464
00:21:47,240 --> 00:21:50,800
Speaker 6: What's your confidence level, Lezanne, in terms of the rest

465
00:21:50,880 --> 00:21:52,600
Speaker 6: of the market, that load of mid teens kind of

466
00:21:52,640 --> 00:21:55,359
Speaker 6: earnings growth, what's your confidence in that earnings number?

467
00:21:55,600 --> 00:21:57,400
Speaker 8: To the analystos bring those down.

468
00:21:57,240 --> 00:21:59,080
Speaker 5: Terribly high, not terribly high.

469
00:21:59,119 --> 00:22:01,400
Speaker 9: I think analy or at the mercy of the guidance

470
00:22:01,400 --> 00:22:04,240
Speaker 9: that they're getting from companies. Companies are dealing with the

471
00:22:04,280 --> 00:22:08,800
Speaker 9: grave uncertainty basically going into to hold pattern from a

472
00:22:08,800 --> 00:22:12,320
Speaker 9: capex perspective. From a forward guidance perspective, it's not quite

473
00:22:12,359 --> 00:22:15,239
Speaker 9: like it was back in the COVID era where you

474
00:22:15,240 --> 00:22:18,439
Speaker 9: saw record percentage of companies just withdrawal guidance all together.

475
00:22:18,840 --> 00:22:21,480
Speaker 9: But it's such a murky environment, and what analysts have

476
00:22:21,600 --> 00:22:24,480
Speaker 9: done is take that sort of collective wisdom from their

477
00:22:24,520 --> 00:22:28,800
Speaker 9: companies and their bias has been to pair back estimate.

478
00:22:28,920 --> 00:22:31,400
Speaker 9: So you've gone from at the beginning of the year

479
00:22:31,440 --> 00:22:34,200
Speaker 9: about a fifteen percent expected growth rate for twenty twenty

480
00:22:34,240 --> 00:22:36,600
Speaker 9: five and this is all the entire S and P

481
00:22:36,720 --> 00:22:39,640
Speaker 9: five hundred. That's down now to around ten percent, which

482
00:22:39,680 --> 00:22:42,280
Speaker 9: if that is accurate, that comes in at a lower

483
00:22:42,280 --> 00:22:45,080
Speaker 9: growth rate than twenty twenty four. I think that's been

484
00:22:45,119 --> 00:22:48,160
Speaker 9: at play in terms of this corrective phase where at.

485
00:22:48,080 --> 00:22:50,879
Speaker 2: The multiple valuation, like you say, stay with large cap,

486
00:22:51,359 --> 00:22:54,400
Speaker 2: but are we under a twenty multiple and a blended

487
00:22:54,440 --> 00:22:55,760
Speaker 2: Liz and Saunders market.

488
00:22:57,920 --> 00:23:00,000
Speaker 5: Yeah, so you have to segment it.

489
00:23:00,160 --> 00:23:03,879
Speaker 9: You're still in the mid to high twenties for tech

490
00:23:04,119 --> 00:23:05,399
Speaker 9: or the magnificent seven.

491
00:23:05,440 --> 00:23:07,200
Speaker 5: Then you get closer to twenty.

492
00:23:07,280 --> 00:23:08,920
Speaker 9: We've come down from about a twenty two to four

493
00:23:08,960 --> 00:23:12,520
Speaker 9: in multiple about twenty. Then you can go equal weight

494
00:23:12,880 --> 00:23:15,520
Speaker 9: or s and p X mag seven and you're into

495
00:23:15,560 --> 00:23:18,679
Speaker 9: the teens there. So it really depends on how you segment.

496
00:23:18,680 --> 00:23:22,040
Speaker 9: Think the problem is that we've had a declining numerator

497
00:23:22,080 --> 00:23:25,720
Speaker 9: and a declining denominator. As I mentioned, I think we

498
00:23:25,800 --> 00:23:28,520
Speaker 9: need to see stability in the denominator part of the

499
00:23:28,560 --> 00:23:31,000
Speaker 9: equation to provide a little bit of a lift from

500
00:23:31,000 --> 00:23:33,200
Speaker 9: evaluation perspective. We're not quite there yet.

501
00:23:33,280 --> 00:23:37,000
Speaker 2: I can't emphasize, folks, the partial dynamics Lilie and Saunders

502
00:23:37,040 --> 00:23:40,520
Speaker 2: just effortlessly described there. So take it further, liz in

503
00:23:41,119 --> 00:23:44,679
Speaker 2: I got a better valuation in Europe. Warren Buffet is

504
00:23:44,720 --> 00:23:47,800
Speaker 2: buying in Japan because he's got a better valuation there.

505
00:23:48,440 --> 00:23:50,840
Speaker 2: Can you with a just as a general statement, a

506
00:23:50,880 --> 00:23:55,960
Speaker 2: pe ratio, Can you be a pe hog an underby

507
00:23:56,200 --> 00:23:59,560
Speaker 2: going to a lower ratio. It's not going to lift

508
00:23:59,560 --> 00:23:59,920
Speaker 2: when we.

509
00:24:01,680 --> 00:24:04,880
Speaker 9: So I think the international comp is an important one

510
00:24:04,920 --> 00:24:08,280
Speaker 9: because clearly we have seen the rest of the world

511
00:24:08,359 --> 00:24:11,399
Speaker 9: trade at a significant discount to what have been fairly

512
00:24:11,440 --> 00:24:14,600
Speaker 9: lofty valuations in the US, and I think that's part

513
00:24:14,600 --> 00:24:17,720
Speaker 9: of the reason for international app performance. It's a reminder

514
00:24:17,760 --> 00:24:22,200
Speaker 9: to investors that even if US exceptionalism isn't dying here

515
00:24:22,280 --> 00:24:26,800
Speaker 9: that there are merits to diversification across asset classes, inclusive

516
00:24:27,280 --> 00:24:29,800
Speaker 9: of international and that's clearly paid dividends. But one of

517
00:24:29,840 --> 00:24:32,160
Speaker 9: the things we always like to remind folks is when

518
00:24:32,200 --> 00:24:35,119
Speaker 9: you're comparing a region to a region, or a country

519
00:24:35,160 --> 00:24:38,160
Speaker 9: to a country US versus anyplace else in the world,

520
00:24:38,200 --> 00:24:41,640
Speaker 9: you have to understand the economic dynamics of the country

521
00:24:41,760 --> 00:24:46,120
Speaker 9: or region. If you are a country, say like Australia

522
00:24:46,480 --> 00:24:49,600
Speaker 9: that has a big mining component, the multiple afforded to

523
00:24:49,640 --> 00:24:51,800
Speaker 9: that market in general is going to be lower than

524
00:24:51,800 --> 00:24:55,040
Speaker 9: a more innovation driven economy like in the United States.

525
00:24:56,280 --> 00:24:59,280
Speaker 9: My colleague Jeff Clientopho, you guys know, is our international

526
00:24:59,320 --> 00:25:03,560
Speaker 9: strategist talk about Germany is essentially an auto etf So

527
00:25:04,080 --> 00:25:07,359
Speaker 9: I think there has to be interesting that understanding of

528
00:25:07,400 --> 00:25:12,040
Speaker 9: the economic dynamics, not just in apples to Apple's valuation comparison,

529
00:25:12,080 --> 00:25:13,200
Speaker 9: that needs to come into play.

530
00:25:13,320 --> 00:25:15,200
Speaker 7: Do you agree with my core theme?

531
00:25:15,240 --> 00:25:17,960
Speaker 2: I think everybody knows. I feel this way that the

532
00:25:18,000 --> 00:25:23,880
Speaker 2: great unspoken is corporations adapt and adjust. Can standard impoors

533
00:25:23,960 --> 00:25:27,800
Speaker 2: five hundred corporations and adapt and adjust to what they've

534
00:25:27,840 --> 00:25:28,280
Speaker 2: been given?

535
00:25:28,320 --> 00:25:30,080
Speaker 7: In two thousand and twenty.

536
00:25:29,800 --> 00:25:34,359
Speaker 9: Five, Well tell them what they've been given. So a

537
00:25:34,400 --> 00:25:36,440
Speaker 9: colleague of mine was at the business round table in

538
00:25:36,560 --> 00:25:40,320
Speaker 9: DC and one of the themes coming from companies specific

539
00:25:40,400 --> 00:25:43,280
Speaker 9: to tariffs was just tell us what they're going to be,

540
00:25:43,720 --> 00:25:46,359
Speaker 9: and then we can adapt and adjust. But the back

541
00:25:46,400 --> 00:25:49,919
Speaker 9: and forth a shoot from the hip. The uncertainty in

542
00:25:50,000 --> 00:25:55,240
Speaker 9: terms of timing, magnitude, duration is what's causing such a

543
00:25:55,280 --> 00:25:59,600
Speaker 9: constraint right now. If we actually knew what the playing

544
00:25:59,640 --> 00:26:03,520
Speaker 9: field look like, I think companies absolutely could adapt and adjust.

545
00:26:03,560 --> 00:26:04,600
Speaker 9: We're just not there yet.

546
00:26:05,000 --> 00:26:08,960
Speaker 6: So Lizianne, giving all that uncertainty as a backdrop, is

547
00:26:09,000 --> 00:26:11,800
Speaker 6: there any argument for small element cap stocks here today

548
00:26:11,920 --> 00:26:13,160
Speaker 6: or no?

549
00:26:14,720 --> 00:26:19,760
Speaker 9: So I think there's some bottom fishing that is probably warranted.

550
00:26:19,800 --> 00:26:22,879
Speaker 9: But I think more important, particularly important in the small

551
00:26:22,880 --> 00:26:26,359
Speaker 9: cap space, is to stay up in quality. So focus

552
00:26:26,480 --> 00:26:30,400
Speaker 9: on things like strength of balance sheet, the non zombie companies,

553
00:26:30,440 --> 00:26:35,800
Speaker 9: strong free cash flow, high interest coverage, profit margin stability.

554
00:26:36,600 --> 00:26:38,879
Speaker 9: That's the way I think to move down into the

555
00:26:38,920 --> 00:26:42,320
Speaker 9: small cap space. I wouldn't take an index approach to

556
00:26:42,359 --> 00:26:45,879
Speaker 9: small caps, especially in an index like the Rustle two thousand,

557
00:26:45,960 --> 00:26:48,679
Speaker 9: as we're still talking about at least forty percent of

558
00:26:48,720 --> 00:26:51,080
Speaker 9: the stocks in the Rustle two thousand are some combination

559
00:26:51,200 --> 00:26:55,240
Speaker 9: of zombie companies or not profitable. There are times where

560
00:26:55,600 --> 00:26:57,720
Speaker 9: you get that leverage to a big turn up in

561
00:26:57,760 --> 00:27:00,600
Speaker 9: the economy by going down the quality spectrum, and that

562
00:27:00,640 --> 00:27:03,879
Speaker 9: tends to work in small caps. I think we're still

563
00:27:04,080 --> 00:27:07,240
Speaker 9: far away from the point where we can start to

564
00:27:07,280 --> 00:27:10,440
Speaker 9: build in an expectation of a huge pivot back hire

565
00:27:10,760 --> 00:27:13,280
Speaker 9: in economic rumetic We have to wait for that for

566
00:27:13,440 --> 00:27:16,399
Speaker 9: broader small cap out performance. But I think that there

567
00:27:16,440 --> 00:27:20,240
Speaker 9: are opportunities in the higher quality segments of the small

568
00:27:20,240 --> 00:27:21,800
Speaker 9: cap indexes just brilliant.

569
00:27:21,840 --> 00:27:24,840
Speaker 2: We'll feature Lizien Saunders and single Best Idea today. Thank

570
00:27:24,880 --> 00:27:28,919
Speaker 2: you so much, Lizzie Sounders and Charles Sharp really really

571
00:27:29,440 --> 00:27:30,800
Speaker 2: appreciate this this morning.

572
00:27:35,480 --> 00:27:39,400
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

573
00:27:39,440 --> 00:27:42,840
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto

574
00:27:42,880 --> 00:27:45,840
Speaker 1: with the Bloomberg Business app. You can also listen live

575
00:27:45,920 --> 00:27:49,480
Speaker 1: on Amazon Alexa from our flagship New York station, Just

576
00:27:49,520 --> 00:27:52,080
Speaker 1: say Alexa Play Bloomberg eleven thirty.

577
00:27:52,640 --> 00:27:55,639
Speaker 7: Let's to talk about this morning, busy morning. Futures up

578
00:27:55,720 --> 00:27:57,240
Speaker 7: sixty seven. Nice lift to the.

579
00:27:57,200 --> 00:28:01,400
Speaker 2: Market, and some of that that's because of our political news flow.

580
00:28:01,240 --> 00:28:04,919
Speaker 7: Here in America. Henrietta Tresh joins she's a Vada partner,

581
00:28:04,920 --> 00:28:05,439
Speaker 7: as we've.

582
00:28:05,320 --> 00:28:10,359
Speaker 2: Really enjoyed her valuable briefs once twice a week here. Henrietta,

583
00:28:10,640 --> 00:28:13,240
Speaker 2: I guess we're up because we're going to get tariff light.

584
00:28:13,560 --> 00:28:14,639
Speaker 7: Is it as simple as that?

585
00:28:16,680 --> 00:28:21,199
Speaker 11: I probably the interpretation the headline reads is tarreflight. I

586
00:28:21,200 --> 00:28:23,520
Speaker 11: think if you dig underneath the surface, you'll see that

587
00:28:23,560 --> 00:28:27,840
Speaker 11: it's still tariff really heavy. We have twenty percent new

588
00:28:27,880 --> 00:28:30,680
Speaker 11: tariffs on five hundred billion dollars worth of goods coming

589
00:28:30,720 --> 00:28:31,280
Speaker 11: in from China.

590
00:28:31,280 --> 00:28:33,600
Speaker 10: Already those are going to rise to higher rates.

591
00:28:33,880 --> 00:28:36,320
Speaker 11: They go on top of the Section three oh one

592
00:28:36,320 --> 00:28:38,840
Speaker 11: tariffs that are bet in place for seven years, So

593
00:28:38,880 --> 00:28:41,520
Speaker 11: we're already up in the nearly fifty percent range that

594
00:28:41,560 --> 00:28:43,920
Speaker 11: should take higher on all goods coming in from China.

595
00:28:43,960 --> 00:28:46,120
Speaker 11: And you can say that story across the globe as well,

596
00:28:46,120 --> 00:28:49,160
Speaker 11: with Canada and Mexico. I expect EU auto tariffs around

597
00:28:49,160 --> 00:28:53,000
Speaker 11: the April second new investigations, so there's a lot to come.

598
00:28:53,320 --> 00:28:58,520
Speaker 2: Are Republicans pushing back against as a general statement the

599
00:28:58,560 --> 00:29:02,719
Speaker 2: White House? See percolations of that, But do you see

600
00:29:03,240 --> 00:29:06,920
Speaker 2: Congress animals pushing back against the Trump administration.

601
00:29:07,960 --> 00:29:09,000
Speaker 10: No, not at all.

602
00:29:09,680 --> 00:29:11,800
Speaker 11: I was just on the hill with a whole host

603
00:29:11,800 --> 00:29:17,120
Speaker 11: of Republicans from all different states Tennessee, North Carolina, Arkansas,

604
00:29:17,320 --> 00:29:23,440
Speaker 11: and the response function is basically to diminish the severity

605
00:29:23,520 --> 00:29:26,480
Speaker 11: of the tariffs and then talk about how they might

606
00:29:26,520 --> 00:29:30,440
Speaker 11: be short lived. Because the senators and lawmakers don't have

607
00:29:30,840 --> 00:29:33,480
Speaker 11: information from the White House, they don't have a sense

608
00:29:33,600 --> 00:29:36,680
Speaker 11: of what's coming any more than the street does, because

609
00:29:36,680 --> 00:29:39,800
Speaker 11: so much of this is moving target and being crafted

610
00:29:40,200 --> 00:29:42,760
Speaker 11: at the White House without their input and in many

611
00:29:42,800 --> 00:29:44,560
Speaker 11: cases directly against what they.

612
00:29:44,520 --> 00:29:45,440
Speaker 10: Would like to see.

613
00:29:45,760 --> 00:29:49,680
Speaker 11: What you see the members doing is really downplaying the

614
00:29:49,720 --> 00:29:52,600
Speaker 11: import of these terraffs. So there's a widespread view, for example,

615
00:29:52,640 --> 00:29:54,800
Speaker 11: that it's just the uncertainty around the.

616
00:29:54,800 --> 00:29:56,840
Speaker 10: Terraffs, not the tariffs themselves, that are the problem.

617
00:29:57,400 --> 00:30:00,200
Speaker 11: And then it really delineates between states. Do you a

618
00:30:00,200 --> 00:30:02,000
Speaker 11: lot of union members in your state. If so, maybe

619
00:30:02,000 --> 00:30:04,000
Speaker 11: you're kind of supportive of the tariffs. Do you have

620
00:30:04,040 --> 00:30:06,120
Speaker 11: a lot of manufacturers in your state, then maybe you're

621
00:30:06,360 --> 00:30:07,479
Speaker 11: supportive of the tariffs.

622
00:30:07,480 --> 00:30:09,520
Speaker 10: So it really ranges. But I don't see any material

623
00:30:09,560 --> 00:30:11,000
Speaker 10: pushback from Republicans at all.

624
00:30:11,120 --> 00:30:13,560
Speaker 6: No, well, how about the Democrats. I'm not even sure

625
00:30:14,040 --> 00:30:18,280
Speaker 6: we know who the voice of the Democratic Party is here. Yeah,

626
00:30:18,360 --> 00:30:22,360
Speaker 6: I don't know, Chuck Schumer, I don't know much less

627
00:30:22,720 --> 00:30:25,880
Speaker 6: seeing a coherent countermeasures from the Democrats.

628
00:30:25,920 --> 00:30:27,280
Speaker 8: Where is this party?

629
00:30:27,800 --> 00:30:31,360
Speaker 11: Democrats are absolutely nowhere. So it's also in with Democratic

630
00:30:31,440 --> 00:30:34,480
Speaker 11: leadership over the last week. And what's what's exactly the

631
00:30:34,520 --> 00:30:36,760
Speaker 11: problem is the same things on the Republican side. Because

632
00:30:36,880 --> 00:30:40,880
Speaker 11: President Trump's agenda is more populist. There are some Democrats

633
00:30:40,920 --> 00:30:43,840
Speaker 11: who support the tariffs. Bernie Sanders, for example, is going

634
00:30:43,880 --> 00:30:46,360
Speaker 11: to support some of these tariffs, and senators or congressmen

635
00:30:46,440 --> 00:30:50,280
Speaker 11: from the heavy Union states and the russ Belt are

636
00:30:50,280 --> 00:30:52,800
Speaker 11: going to be supportive of the tariffs. So the Democratic

637
00:30:52,840 --> 00:30:56,880
Speaker 11: Party a can't find a message around how to demonstrate that,

638
00:30:57,000 --> 00:31:00,280
Speaker 11: you know, twenty five percent tariffs on aluminum directly trans

639
00:31:00,280 --> 00:31:03,080
Speaker 11: to every bottle of beer that you're buying. They cannot

640
00:31:03,160 --> 00:31:06,960
Speaker 11: also get their caucus united and in line to say, hey,

641
00:31:07,000 --> 00:31:09,480
Speaker 11: we don't like these taxes on Americans that are coming.

642
00:31:09,480 --> 00:31:12,760
Speaker 11: We don't support using current policy baseline to blow out

643
00:31:12,760 --> 00:31:13,240
Speaker 11: the deficit.

644
00:31:13,280 --> 00:31:13,880
Speaker 10: They're nowhere.

645
00:31:14,120 --> 00:31:14,520
Speaker 7: Andrew.

646
00:31:14,520 --> 00:31:16,760
Speaker 2: This came up this weekend over a beverage of my choice.

647
00:31:16,760 --> 00:31:20,160
Speaker 2: I'm gonna try to keep politics out of it. Henrietta Trace.

648
00:31:20,320 --> 00:31:24,480
Speaker 2: Is there any indication whatsoever that the liberals of the

649
00:31:24,520 --> 00:31:26,920
Speaker 2: Democratic Party want to move to the center.

650
00:31:28,800 --> 00:31:31,680
Speaker 11: I don't think that's something that anybody should make in

651
00:31:31,920 --> 00:31:33,680
Speaker 11: from the far left. I mean, Bernie Sanders has been

652
00:31:33,720 --> 00:31:36,160
Speaker 11: Bernie Sanders for forty years.

653
00:31:36,040 --> 00:31:38,040
Speaker 10: You know, so I don't see that change.

654
00:31:38,040 --> 00:31:41,720
Speaker 11: I do see the far left getting louder, and there's

655
00:31:41,720 --> 00:31:43,880
Speaker 11: some fracture there as well. You know, when you think

656
00:31:43,920 --> 00:31:47,640
Speaker 11: about a senator like Fetterman out of Pennsylvania differing with

657
00:31:47,760 --> 00:31:50,240
Speaker 11: maybe some of the more quintessential far left folks that

658
00:31:50,280 --> 00:31:54,880
Speaker 11: you would think of with AOC or Bernie Sanders. There's

659
00:31:55,040 --> 00:31:56,680
Speaker 11: just a lot of divide, I would say, in the

660
00:31:56,680 --> 00:31:57,480
Speaker 11: Democratic Party.

661
00:31:58,040 --> 00:32:00,960
Speaker 6: And is there not a belief of the Democratic Party

662
00:32:01,000 --> 00:32:04,320
Speaker 6: leadership that the left wing of the party is weakening

663
00:32:04,440 --> 00:32:07,720
Speaker 6: perhaps the overall Democratic Party and if to any extent

664
00:32:07,760 --> 00:32:10,880
Speaker 6: they want to be competitive in two years, that they

665
00:32:11,720 --> 00:32:13,720
Speaker 6: need to move more to the centers? Are not a

666
00:32:13,720 --> 00:32:14,280
Speaker 6: belief there?

667
00:32:15,160 --> 00:32:15,320
Speaker 5: Yeah?

668
00:32:15,400 --> 00:32:16,280
Speaker 10: No, absolutely there is.

669
00:32:16,320 --> 00:32:17,800
Speaker 11: I mean, but man, how long have we been having

670
00:32:17,800 --> 00:32:20,680
Speaker 11: that fight? You know, when Democrats were, you know, upset

671
00:32:20,680 --> 00:32:22,680
Speaker 11: at Bernie Sanders for running againt Hillary Clinton. It was

672
00:32:22,680 --> 00:32:24,840
Speaker 11: the exact same conversation, and that was way back in

673
00:32:24,840 --> 00:32:27,720
Speaker 11: the day, you know. So it's not that Democrats don't

674
00:32:27,760 --> 00:32:29,440
Speaker 11: have the same fights that they've always had.

675
00:32:29,480 --> 00:32:30,959
Speaker 10: They're just still warring faction.

676
00:32:31,760 --> 00:32:33,960
Speaker 11: And I think what the problem might be from the

677
00:32:34,080 --> 00:32:36,800
Speaker 11: establishment front, with the Chuck Schumer wing of the party

678
00:32:37,080 --> 00:32:40,560
Speaker 11: is that they're seeing the current dissatisfaction with Donald Trump

679
00:32:40,720 --> 00:32:43,720
Speaker 11: translate out into the ether and the general public and

680
00:32:43,800 --> 00:32:46,320
Speaker 11: Democrats and special elections. I think I pointed out a

681
00:32:46,360 --> 00:32:49,400
Speaker 11: couple of weeks ago are up ten percentage points more

682
00:32:49,520 --> 00:32:50,400
Speaker 11: than they were.

683
00:32:50,160 --> 00:32:50,920
Speaker 10: Just in November.

684
00:32:51,160 --> 00:32:54,160
Speaker 11: So it's almost like this the work of uniting the

685
00:32:54,160 --> 00:32:56,480
Speaker 11: party or getting the party excited to turn out is

686
00:32:56,560 --> 00:32:59,880
Speaker 11: happening in spite of, or because of, or as a

687
00:33:00,160 --> 00:33:02,000
Speaker 11: secondary function of this conversation.

688
00:33:02,280 --> 00:33:03,640
Speaker 10: So they're not overly concerned.

689
00:33:04,000 --> 00:33:06,600
Speaker 2: Great first brief of the week, Henrietta Trace, Thank you

690
00:33:06,680 --> 00:33:09,560
Speaker 2: so much from all of us a team Absurveillance really

691
00:33:09,560 --> 00:33:10,360
Speaker 2: really appreciate it.

692
00:33:10,400 --> 00:33:19,040
Speaker 1: With Veda partners, this is the Bloomberg Surveillance Podcast. Listen

693
00:33:19,160 --> 00:33:22,560
Speaker 1: live each weekday starting at seven am Eastern on Applecarplay

694
00:33:22,600 --> 00:33:25,400
Speaker 1: and Android Auto with the Bloomberg Business app. You can

695
00:33:25,440 --> 00:33:28,880
Speaker 1: also watch US live every weekday on YouTube and always

696
00:33:28,920 --> 00:33:30,720
Speaker 1: on the Bloomberg terminal.

697
00:33:30,840 --> 00:33:33,880
Speaker 2: Talking about United Airlines and you know, the lounges and

698
00:33:33,920 --> 00:33:34,280
Speaker 2: all that.

699
00:33:34,680 --> 00:33:37,080
Speaker 7: Let's talk to somebody who actually knows what they're talking about.

700
00:33:37,560 --> 00:33:38,600
Speaker 7: How dare we do that?

701
00:33:38,960 --> 00:33:41,560
Speaker 2: Out of Dartmouth and Tuck Stephen Trent joins the City

702
00:33:41,560 --> 00:33:45,800
Speaker 2: Group Iconig on the airlines this morning. Robert Crandall once

703
00:33:45,920 --> 00:33:50,640
Speaker 2: told me that the revolution was persistent cash flow. Are

704
00:33:50,680 --> 00:33:56,160
Speaker 2: the bigger United States airlines? Are they finally delivering persistent

705
00:33:56,240 --> 00:33:56,840
Speaker 2: cash flow?

706
00:33:58,160 --> 00:34:00,719
Speaker 12: Great question and thank you for having me on. I

707
00:34:00,760 --> 00:34:05,040
Speaker 12: would say post pandemic, the network airlines are doing a

708
00:34:05,360 --> 00:34:10,600
Speaker 12: very good job of that. United, Delta, America, and Alaska,

709
00:34:10,680 --> 00:34:13,640
Speaker 12: the four of them last year had several billion dollars

710
00:34:13,680 --> 00:34:14,600
Speaker 12: worth a free cash flow.

711
00:34:15,200 --> 00:34:17,600
Speaker 2: Paul, I'm looking at the pandemic got in the middle

712
00:34:17,600 --> 00:34:20,320
Speaker 2: of this all Gottom some steck. United is killing it

713
00:34:20,440 --> 00:34:23,879
Speaker 2: ten year track record, three point four percent per year.

714
00:34:24,040 --> 00:34:25,280
Speaker 7: Yeah, shareholder return.

715
00:34:25,360 --> 00:34:27,840
Speaker 8: Talk to us Steven about what we heard from the airlines.

716
00:34:27,880 --> 00:34:29,480
Speaker 6: I guess a couple of weeks ago, in front of

717
00:34:29,520 --> 00:34:33,120
Speaker 6: a investor conference, we saw the majors take their guy

718
00:34:33,320 --> 00:34:36,040
Speaker 6: Ford gttence down talk to just about what's driving that,

719
00:34:36,080 --> 00:34:36,760
Speaker 6: what are they seeing?

720
00:34:37,560 --> 00:34:41,280
Speaker 12: Yeah, absolutely, so you do have some issues in terms

721
00:34:41,480 --> 00:34:44,920
Speaker 12: of where people are trying to get their heads around

722
00:34:44,960 --> 00:34:47,319
Speaker 12: the economy. You know, are we going to have a

723
00:34:47,360 --> 00:34:50,680
Speaker 12: slowdown or not? Are we going to get sort of

724
00:34:50,719 --> 00:34:55,719
Speaker 12: coherent statements from Washington which give consumers and investors confidence

725
00:34:55,880 --> 00:34:58,480
Speaker 12: or not. So some of the noise we're getting on

726
00:34:58,520 --> 00:35:04,040
Speaker 12: that level have indeed bleded least short term into the

727
00:35:04,080 --> 00:35:07,080
Speaker 12: booking curve. But I think beyond that as well. You know,

728
00:35:07,200 --> 00:35:09,239
Speaker 12: unfortunately you had one Q is.

729
00:35:09,239 --> 00:35:10,000
Speaker 7: A tough quarter.

730
00:35:10,520 --> 00:35:15,480
Speaker 12: You had several unfortunately high profile aviation accidents, several of

731
00:35:15,480 --> 00:35:20,520
Speaker 12: them were fatal, sadly enough. And then whether there's already

732
00:35:20,560 --> 00:35:24,560
Speaker 12: a tough period for one queue, we had California wildfires

733
00:35:24,560 --> 00:35:28,160
Speaker 12: in January, So the confluence of those factors certainly weighed

734
00:35:28,560 --> 00:35:32,279
Speaker 12: on what happened in short term guides going forward in

735
00:35:32,400 --> 00:35:35,640
Speaker 12: terms of getting into some common orders here. You know,

736
00:35:36,000 --> 00:35:37,839
Speaker 12: fundamentally speaking, we're constructive.

737
00:35:38,520 --> 00:35:42,520
Speaker 6: Where are the airlines in terms of capacity and how

738
00:35:42,600 --> 00:35:47,040
Speaker 6: quickly can they move capacity if the economy were to weaken.

739
00:35:48,200 --> 00:35:51,640
Speaker 12: Sure, so if one looks at domestic capacity per se,

740
00:35:53,000 --> 00:35:55,759
Speaker 12: looking at the entire group, we may have kind of

741
00:35:56,080 --> 00:35:59,680
Speaker 12: a flatish to slightly up picture, you know, in terms

742
00:35:59,680 --> 00:36:01,920
Speaker 12: of how quickly this stuff can get moved. We already

743
00:36:01,920 --> 00:36:06,840
Speaker 12: went through sort of a mini review of this last July,

744
00:36:07,360 --> 00:36:09,640
Speaker 12: when on a short term basis there was a little

745
00:36:09,680 --> 00:36:14,799
Speaker 12: too much capacity relative to demand three months or so

746
00:36:15,080 --> 00:36:18,480
Speaker 12: of that situation and there was enough of a pulldown

747
00:36:18,719 --> 00:36:22,120
Speaker 12: that we got that nice inflection point in domestic unit

748
00:36:22,160 --> 00:36:27,479
Speaker 12: revenue in September, so they can move fairly quickly. What's

749
00:36:27,560 --> 00:36:29,759
Speaker 12: sort of hard to sort at this time, to sort

750
00:36:29,800 --> 00:36:32,720
Speaker 12: out at this time, excuse me, is what will happen

751
00:36:32,840 --> 00:36:36,560
Speaker 12: from the perspective of the economy. Do we get a

752
00:36:36,560 --> 00:36:39,000
Speaker 12: slowdown or is this just a hiccup?

753
00:36:39,239 --> 00:36:41,200
Speaker 2: Steven Chatt with is a city group right now in

754
00:36:41,280 --> 00:36:44,280
Speaker 2: the airline business, how do you respond to the question

755
00:36:44,920 --> 00:36:48,520
Speaker 2: there really a bank with frequent flyer miles and all

756
00:36:48,560 --> 00:36:50,600
Speaker 2: the marketing and the dumb lounges da da da da

757
00:36:50,640 --> 00:36:53,279
Speaker 2: dah that happens to fly an airline? How do you

758
00:36:53,320 --> 00:36:57,720
Speaker 2: respond to the financial side of the business versus moving bodies.

759
00:36:58,680 --> 00:37:00,960
Speaker 12: Yeah, that's a great one, you know. I would argue

760
00:37:00,960 --> 00:37:04,520
Speaker 12: that the model has evolved. So if you look at

761
00:37:04,520 --> 00:37:07,800
Speaker 12: the airlines twenty years ago, you know, doing the credit crunch,

762
00:37:07,840 --> 00:37:11,000
Speaker 12: for example, Delta Airlines was doing just over a billion

763
00:37:11,080 --> 00:37:16,080
Speaker 12: dollars of loyalty and pro branded card revenue for example.

764
00:37:16,080 --> 00:37:19,040
Speaker 12: Now they're doing several billion dollars a year. So I'm

765
00:37:19,040 --> 00:37:22,760
Speaker 12: not saying that these businesses have suddenly become card companies

766
00:37:22,800 --> 00:37:27,400
Speaker 12: or their consumer companies, but that free casual contribution is

767
00:37:27,440 --> 00:37:30,440
Speaker 12: now significant versus what it used to be, and that

768
00:37:30,480 --> 00:37:35,279
Speaker 12: will play a role in valuation and earnings quality. So,

769
00:37:35,480 --> 00:37:38,560
Speaker 12: you know, we think that it's a good thing that

770
00:37:38,600 --> 00:37:39,720
Speaker 12: they've moved in that direction.

771
00:37:40,400 --> 00:37:44,440
Speaker 6: United, American, Delta, the big three. Do investors differentiate between

772
00:37:44,640 --> 00:37:46,440
Speaker 6: the three, and if so, on what basis?

773
00:37:47,800 --> 00:37:48,000
Speaker 3: Yeah?

774
00:37:48,040 --> 00:37:53,680
Speaker 12: Absolutely, you know, I think traditionally Delta has been the

775
00:37:53,719 --> 00:37:58,239
Speaker 12: goal standard of the trio, the one that people look to,

776
00:37:58,360 --> 00:38:01,560
Speaker 12: management look to the air nin stream, the strength of

777
00:38:01,600 --> 00:38:06,400
Speaker 12: its co branded card. I would say United has moved

778
00:38:06,719 --> 00:38:11,919
Speaker 12: significantly in that direction. American Airlines was a little bit

779
00:38:11,960 --> 00:38:15,040
Speaker 12: more of a of a high beta play, and we've

780
00:38:15,040 --> 00:38:19,040
Speaker 12: seen some strategic changes from American over the last couple

781
00:38:19,040 --> 00:38:21,919
Speaker 12: of years. I think the most recent one is really

782
00:38:22,000 --> 00:38:24,120
Speaker 12: a good move in the right direction for American re

783
00:38:24,239 --> 00:38:27,600
Speaker 12: engaging with managed business travel I want to get.

784
00:38:27,400 --> 00:38:31,120
Speaker 2: You in troubled compliance. Where's JEP blue in five years?

785
00:38:31,239 --> 00:38:36,359
Speaker 2: You got a neutral in jet blue? Yeah, where's chip

786
00:38:36,400 --> 00:38:37,400
Speaker 2: blue in five years?

787
00:38:37,400 --> 00:38:37,759
Speaker 7: Help me?

788
00:38:39,400 --> 00:38:39,600
Speaker 3: Yeah?

789
00:38:39,640 --> 00:38:42,280
Speaker 7: Absolutely, Lisa is paying attention.

790
00:38:42,440 --> 00:38:46,839
Speaker 12: Yeah, you know, I would say that in terms of

791
00:38:47,239 --> 00:38:51,880
Speaker 12: where that carrier moves, the unit revenue side of the

792
00:38:51,920 --> 00:38:56,520
Speaker 12: fence and the route strategy is sort of one piece

793
00:38:56,560 --> 00:38:59,400
Speaker 12: of the picture where it looks like they're moving in

794
00:38:59,440 --> 00:39:02,279
Speaker 12: the correct direction. I would say the piece of the

795
00:39:02,320 --> 00:39:04,880
Speaker 12: pie that looks a lot more challenging for them is

796
00:39:05,160 --> 00:39:05,960
Speaker 12: the balance sheet.

797
00:39:06,160 --> 00:39:08,080
Speaker 2: Are you going to pay fourteen hundred dollars for a

798
00:39:08,120 --> 00:39:09,760
Speaker 2: lounge to get a free gin and tonic?

799
00:39:10,960 --> 00:39:12,400
Speaker 12: No, I won't do that.

800
00:39:13,320 --> 00:39:16,799
Speaker 7: Is the whole lounge thing like done. You know, you

801
00:39:16,880 --> 00:39:18,759
Speaker 7: actually had some.

802
00:39:20,239 --> 00:39:25,080
Speaker 12: Post pandemic shop in all the lounge stuff when everybody

803
00:39:25,120 --> 00:39:28,880
Speaker 12: started flying again and you had, yeah, you had a

804
00:39:28,880 --> 00:39:32,440
Speaker 12: lot of people with frequent flyer status who were flooding lounges.

805
00:39:32,480 --> 00:39:35,560
Speaker 12: So that's a great signal in terms of demand. But

806
00:39:35,680 --> 00:39:38,359
Speaker 12: some of that has to be sort of a little better,

807
00:39:38,400 --> 00:39:40,200
Speaker 12: and I think some of the airlines have already started

808
00:39:40,239 --> 00:39:42,280
Speaker 12: to do that. So I think people still like the lounges.

809
00:39:42,320 --> 00:39:44,799
Speaker 2: I get twenty seconds when you were at Dartmouth. Did

810
00:39:44,840 --> 00:39:47,279
Speaker 2: you fly into Lebanon you feel like you're landing on

811
00:39:47,320 --> 00:39:48,360
Speaker 2: a Caribbean island.

812
00:39:49,239 --> 00:39:52,040
Speaker 12: Yes, my goodness, I did fly in the Lebanon a

813
00:39:52,080 --> 00:39:52,880
Speaker 12: couple of times.

814
00:39:53,480 --> 00:39:54,000
Speaker 5: Not true.

815
00:39:54,040 --> 00:39:58,120
Speaker 7: It was sitting on my lap. Stephen Trent, thank you

816
00:39:58,200 --> 00:39:59,799
Speaker 7: so much, really appreciate it.

817
00:40:00,040 --> 00:40:02,880
Speaker 2: We're city group. Just definitive here, lots of green in

818
00:40:02,880 --> 00:40:05,640
Speaker 2: the screen. Buys he likes United in the American airlines.

819
00:40:05,640 --> 00:40:06,919
Speaker 2: I believe you mentioned as well.

820
00:40:11,840 --> 00:40:15,720
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

821
00:40:15,760 --> 00:40:18,800
Speaker 1: starting at seven am Eastern on Apple Cocklay and Android

822
00:40:18,800 --> 00:40:21,840
Speaker 1: Auto with the Bloomberg Business App. You can also listen

823
00:40:21,920 --> 00:40:25,200
Speaker 1: live on Amazon Alexa from our flagship New York station,

824
00:40:25,719 --> 00:40:28,400
Speaker 1: Just say Alexa, Play Bloomberg eleven thirty.

825
00:40:29,280 --> 00:40:31,799
Speaker 7: The newspapers Lisa Matteo, Lisa, what do you have?

826
00:40:32,040 --> 00:40:34,640
Speaker 13: Okay? So next month, the White House hosts the annual

827
00:40:34,760 --> 00:40:36,839
Speaker 13: Easter egg roll, Right, all the kids come out. It's

828
00:40:36,880 --> 00:40:39,120
Speaker 13: a big, one hundred and forty seven year tradition. But

829
00:40:39,480 --> 00:40:41,400
Speaker 13: the New York Times saying this year could be a

830
00:40:41,440 --> 00:40:44,239
Speaker 13: little bit different because it could be funded by corporate sponsors.

831
00:40:44,320 --> 00:40:46,640
Speaker 13: So that's the difference. But they're saying, though it's raising

832
00:40:46,719 --> 00:40:50,280
Speaker 13: some ethical legal concerns from President Trump because he's allowing

833
00:40:50,280 --> 00:40:51,720
Speaker 13: companies to profit from the event.

834
00:40:52,800 --> 00:40:53,759
Speaker 5: What are we talking about?

835
00:40:53,800 --> 00:40:57,400
Speaker 13: How much right could a corporate company bring in? So

836
00:40:57,440 --> 00:40:59,960
Speaker 13: they're saying, there's three options. It costs between seventy five

837
00:41:00,000 --> 00:41:03,000
Speaker 13: five thousand dollars and two hundred thousand dollars. That's what

838
00:41:03,040 --> 00:41:05,239
Speaker 13: they would pay for the little perks to what.

839
00:41:05,680 --> 00:41:06,040
Speaker 5: Okay?

840
00:41:06,040 --> 00:41:08,520
Speaker 13: So for example, they get the corporate booth, they get

841
00:41:08,520 --> 00:41:11,239
Speaker 13: the logo placements, they get the branded snacks, they get

842
00:41:11,280 --> 00:41:14,000
Speaker 13: to have exclusive tickets to brunch with the first Lady.

843
00:41:14,480 --> 00:41:17,280
Speaker 13: They get one hundred and fifty tickets themselves for the event.

844
00:41:17,400 --> 00:41:20,000
Speaker 7: Does the Easter Bunny come into Cyber.

845
00:41:19,719 --> 00:41:24,840
Speaker 13: Can't know, but it's a different kind of feel to it.

846
00:41:24,880 --> 00:41:26,840
Speaker 13: I guess it could be if if it brings in

847
00:41:26,920 --> 00:41:31,560
Speaker 13: these corporate sponsors next supposed to be focused on their childrendiness.

848
00:41:31,719 --> 00:41:33,279
Speaker 8: Let's raise a little cash, I guess we.

849
00:41:33,400 --> 00:41:34,120
Speaker 5: Raise a little cash.

850
00:41:34,160 --> 00:41:36,120
Speaker 13: Yes, it goes to the White House Historical Association.

851
00:41:36,239 --> 00:41:38,120
Speaker 4: So there you go, all right.

852
00:41:38,320 --> 00:41:41,359
Speaker 13: Paul Sunday Duke right Pounded Baylor eighty nine sixty six.

853
00:41:41,640 --> 00:41:43,640
Speaker 13: No doubt they're a good team, but the Washington Post

854
00:41:43,640 --> 00:41:46,359
Speaker 13: is saying a big reason behind their success is this

855
00:41:46,680 --> 00:41:51,399
Speaker 13: age old strategy. Their height. So yeah, the tallest team

856
00:41:51,440 --> 00:41:55,040
Speaker 13: in the country seventy nine point eight inches across fifteen players,

857
00:41:55,160 --> 00:41:57,160
Speaker 13: so it arranges from a seven foot two center to

858
00:41:57,200 --> 00:42:00,840
Speaker 13: a five eight guard yep, yep in between. They have

859
00:42:00,920 --> 00:42:03,560
Speaker 13: no other player listed below six and five. I mean,

860
00:42:03,600 --> 00:42:06,680
Speaker 13: it's crazy the height that they do, but it's an advantage.

861
00:42:07,440 --> 00:42:12,240
Speaker 7: Dumb question, Paul, you're qualified, Okay? Should they raise the hoop?

862
00:42:12,640 --> 00:42:15,000
Speaker 7: Not eleven feet? Twelve feet? Now?

863
00:42:15,400 --> 00:42:18,000
Speaker 6: They if they do anything, and they might push back

864
00:42:18,040 --> 00:42:20,359
Speaker 6: to three point line at some point, but they'll start

865
00:42:20,360 --> 00:42:22,040
Speaker 6: in to pros there for that. But yeah, so Douke

866
00:42:22,160 --> 00:42:24,560
Speaker 6: is a the tallest team, but they're also I think

867
00:42:24,600 --> 00:42:27,080
Speaker 6: and probably the ranked third in terms of defense. But

868
00:42:27,080 --> 00:42:29,120
Speaker 6: they're the best defensive team I've ever seen.

869
00:42:29,239 --> 00:42:32,080
Speaker 7: I mean, moment of silence here, You've nailed this. Why

870
00:42:32,080 --> 00:42:35,040
Speaker 7: does your bracket show your brilliance?

871
00:42:35,239 --> 00:42:38,600
Speaker 8: I have no idea exactly because I tried to get cute.

872
00:42:38,320 --> 00:42:41,040
Speaker 6: But I should have just picked all the all the

873
00:42:41,120 --> 00:42:41,880
Speaker 6: higher seats.

874
00:42:42,120 --> 00:42:44,280
Speaker 7: You gotta be dumbes would like me and Lisa.

875
00:42:44,560 --> 00:42:45,319
Speaker 5: Yes, I gotta do that.

876
00:42:47,239 --> 00:42:48,560
Speaker 7: Too much bracket talk.

877
00:42:48,680 --> 00:42:51,279
Speaker 2: I'm like, we lost so much money in our two

878
00:42:51,280 --> 00:42:54,360
Speaker 2: to oh one k is, we're talking bracket next, all right,

879
00:42:54,400 --> 00:42:54,880
Speaker 2: we go from two.

880
00:42:54,920 --> 00:42:56,279
Speaker 10: Okay, we go to roth I raise.

881
00:42:56,320 --> 00:42:58,080
Speaker 13: That's what we're talking about. This is actually the new

882
00:42:58,120 --> 00:43:01,160
Speaker 13: trend with young savers roth I raise.

883
00:43:01,200 --> 00:43:01,399
Speaker 5: Okay.

884
00:43:01,400 --> 00:43:03,480
Speaker 13: The Wall Street Journal is saying they're taking the advice

885
00:43:03,520 --> 00:43:06,000
Speaker 13: of their parents, financial coaches, tax advisors. They using it

886
00:43:06,080 --> 00:43:09,280
Speaker 13: is the save for retirement big purchases they're actually opening

887
00:43:09,360 --> 00:43:13,279
Speaker 13: in addition to saving for the workplace retirement plans. So

888
00:43:13,360 --> 00:43:15,439
Speaker 13: that's something a little bit different. But with tax safe

889
00:43:15,440 --> 00:43:17,520
Speaker 13: and not far off, they're actually making all these last

890
00:43:17,560 --> 00:43:19,840
Speaker 13: minute contributions to it too. On top of it. So

891
00:43:19,840 --> 00:43:23,040
Speaker 13: we're talking about people forty and under. That's who's starting

892
00:43:23,080 --> 00:43:24,759
Speaker 13: to use this a little bit more. And that's they're

893
00:43:24,760 --> 00:43:25,080
Speaker 13: seeing me.

894
00:43:25,280 --> 00:43:28,439
Speaker 8: I think my three of those kids, they're between twenty

895
00:43:28,440 --> 00:43:29,240
Speaker 8: five and twenty.

896
00:43:29,080 --> 00:43:30,879
Speaker 3: Nine, they do both well.

897
00:43:30,920 --> 00:43:35,040
Speaker 8: They all I'm thinking is my two older ones. Yeah,

898
00:43:35,520 --> 00:43:36,439
Speaker 8: they were little kids.

899
00:43:36,440 --> 00:43:40,160
Speaker 6: They remember nine to eleven because that they were preschool

900
00:43:40,239 --> 00:43:42,919
Speaker 6: nine to eleven, they remember the financial crisis big time,

901
00:43:43,320 --> 00:43:45,839
Speaker 6: and then they have the pandemic. Their whole life, they've

902
00:43:45,880 --> 00:43:49,560
Speaker 6: had crazy, crazy, crazy stuff happened, and I think that's

903
00:43:49,600 --> 00:43:52,839
Speaker 6: made them a little bit more cautious in terms of

904
00:43:53,040 --> 00:43:55,279
Speaker 6: saving That's what. That's the conversations I have with my

905
00:43:55,360 --> 00:43:57,480
Speaker 6: guys and they're all four one k's and doing all

906
00:43:57,560 --> 00:43:58,319
Speaker 6: that kind of stuff, and.

907
00:43:58,600 --> 00:44:01,120
Speaker 2: Forks from Paul Swende there's it's the single smartest thing

908
00:44:01,160 --> 00:44:04,360
Speaker 2: I've heard in ninety days here. Our kids are different

909
00:44:05,040 --> 00:44:08,080
Speaker 2: and one of the things that they've seen family members

910
00:44:08,320 --> 00:44:10,680
Speaker 2: or friends'.

911
00:44:09,920 --> 00:44:16,879
Speaker 7: Parents run out of money. That's something we didn't really know. Yeah,

912
00:44:17,000 --> 00:44:20,439
Speaker 7: it's different, Absolutely brilliant. Thank you, Lisa. I just can't

913
00:44:20,440 --> 00:44:23,200
Speaker 7: say no. I'm about the value of the newspaper segment

914
00:44:23,600 --> 00:44:24,040
Speaker 7: as well.

915
00:44:25,400 --> 00:44:30,239
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,

916
00:44:30,360 --> 00:44:34,640
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917
00:44:34,760 --> 00:44:38,000
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918
00:44:38,160 --> 00:44:41,960
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919
00:44:42,280 --> 00:44:45,360
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920
00:44:45,680 --> 00:44:47,680
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