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Speaker 2: Ruining us right now with SNBC Nco Securities Joe Livornia
Speaker 2: for years on Wall Street, always with a vibrant message,
Speaker 2: let's get the let's get the administration work basic. You
Speaker 2: were in the first Trump administration, are you affiliated with
Speaker 2: the second Trump?
Speaker 3: This film?
Speaker 4: I do know the Treasury Secretary. I think he is
Speaker 4: doing a great job.
Speaker 3: And you made a joke. He was perfect. That was
Speaker 3: on any list. But my boss was Larry Kudlow.
Speaker 4: So Larry created a role for me in actually Economic Council.
Speaker 4: That was Trump one point.
Speaker 5: Oh.
Speaker 4: So now I'm in the private sector.
Speaker 2: Larry Cudlow and I are on the same page. Just
Speaker 2: goes back to Wayne Angel. That nominal GDP really matters.
Speaker 2: Top line current GDP is this administration with the chaos,
Speaker 2: whether Republican or Democrat. Have they dampened the animal spirit?
Speaker 2: Have they dampened Cudlow's nominal GDP? No?
Speaker 4: Tom and I would argue that I'm going to give
Speaker 4: a counter narrative, and maybe it's that the chaos and confusion,
Speaker 4: which is the conventional wisdom for now, is actually not
Speaker 4: a bug of the system, but rather as a design
Speaker 4: so as to keep trading partners offside. If it continues,
Speaker 4: obviously the full year, that's a problem. But I would
Speaker 4: say that what worries me much more on the ansertainty
Speaker 4: side is.
Speaker 3: What are we doing with tax policy?
Speaker 4: Because if you look at the uncertainty index, what we
Speaker 4: see is concerns about taxes are sky high. So we
Speaker 4: need the Congress to figure out are these tax cuts
Speaker 4: getting extended, are they not? Are there additional tax cuts?
Speaker 4: How might we pay for them? And that's to me
Speaker 4: is a bigger concern for the economy and what it
Speaker 4: means for capacs ultimately growth and then nominal activity.
Speaker 6: Seems like every company conference call is in to every
Speaker 6: guest we have in here, and we have roughly twenty
Speaker 6: five a day. Don't cite tax policy, they say the
Speaker 6: uncertainty when you do five hours, you get a lot
Speaker 6: just introduced into the system. Has simply been we just
Speaker 6: don't know where the policy is going to be you
Speaker 6: tell us where the roadmap is. Companies will adjust tomics
Speaker 6: to say that companies are just investors, won't just it
Speaker 6: just gives us a little bit of sensor, so we
Speaker 6: understand the chaos from a negotiating perspective. That's fine, that
Speaker 6: is a strategy. But boy, it seems like the market's
Speaker 6: really craving.
Speaker 3: Certainly around it does.
Speaker 4: And I remember reading a book way back when by
Speaker 4: Michael Jensen Harvard Business Review. We talked about the short
Speaker 4: termsm of US corporate America, and maybe there's a little
Speaker 4: bit of that now where people want certainty, they're not
Speaker 4: going to get it. But also CEOs tend to be
Speaker 4: pretty opportunistic, and you're buying a free option, so if
Speaker 4: anything goes wrong. And by the way, the economy, we
Speaker 4: could debate about the economic outlook, you could just blame
Speaker 4: whatever is is convenience.
Speaker 3: So it's probably part of that.
Speaker 4: If you look at the small business side that generates
Speaker 4: forty percent of the jobs, their numbers look great. So
Speaker 4: I'm going to push back a little bit on that.
Speaker 4: Let's see how we go after April second, and what
Speaker 4: happens is we moved towards June.
Speaker 2: Are you modeling sub two percent real GDP. We weren't
Speaker 2: doing that pre election, were we.
Speaker 4: So here's the thing, Tom, I don't like the first
Speaker 4: quarter numbers.
Speaker 3: They're going to look soft because the expenditure side happened before.
Speaker 3: It just happened before, slack right unusual.
Speaker 4: But what's really bizarre is that if you look at
Speaker 4: like real income at least through January, it's up almost
Speaker 4: three percent.
Speaker 3: So you have, like the expenditure.
Speaker 4: Side from Atlanta fed down about two percent. You've got
Speaker 4: this huge increase on the real income side because job
Speaker 4: growth is still positive. I'm not sure how to square
Speaker 4: the circle right now. Yes, it does look like GDP
Speaker 4: will be on the lower side than the higher side.
Speaker 4: You're supposed to mark your numbers down for the year,
Speaker 4: but having done this for a while, we also know
Speaker 4: that you could drive a truck through the first and
Speaker 4: last estimates.
Speaker 2: Fair But you know, given trickle down economics, where's the
Speaker 2: genie co official of the United States? I mean, is
Speaker 2: this an administration governing with a presumed tax cut for
Speaker 2: they have have halves against half of America flat on
Speaker 2: their back.
Speaker 4: Yeah, So this is where I would say that where
Speaker 4: the Trump the Tax Cuts and Jobs Act tikcha, which
Speaker 4: by the way, President Trump wanted to call it the
Speaker 4: Cut Cut Cut Act ticchas. I like the former mob
Speaker 4: But anyway, but if you look at the data through
Speaker 4: the pandemic, and Kevin Hassett are current head of NEC,
Speaker 4: Lowry's old job had done some nice work on this
Speaker 4: as well. But if you look at the income by quintile,
Speaker 4: the mid to lower ends and relative terms, that extraordinarily
Speaker 4: well under Trump one point zero and in terms of
Speaker 4: real meeting income was about six thousand dollars in those
Speaker 4: first three years, and that was about five to six
Speaker 4: times what had been in the prior sixteen years with
Speaker 4: both Democrats and Republicans. So if the tax cuts, in
Speaker 4: my opinions, the tax cuts are extended, you'll get that
Speaker 4: blue collar boom that Larry my O boss talked about.
Speaker 4: And I'm optimistic we'll have good wage growth, but we'll
Speaker 4: see what happens.
Speaker 3: You need to get this done.
Speaker 6: I mean, judging just from your source of people you
Speaker 6: talked to, do you think that tax will be extended?
Speaker 4: I do think it's extended. So one of the things
Speaker 4: people I thought it was interesting is when Speaker Johnson
Speaker 4: got that budget blueprint throw I thought that was a
Speaker 4: big deal because that told me we're going to get
Speaker 4: the cr So the fact we didn't shut the government,
Speaker 4: I think it was smart that Chuck Schumer kept the
Speaker 4: government open because I would have delayed things another several weeks.
Speaker 4: Depends is can we get a bill in place sometime
Speaker 4: maybe before June that it can be signed by year.
Speaker 4: That would make me more optimistic that we'll get good
Speaker 4: growth if we're waiting, and I think, by the way,
Speaker 4: we'll get the tax bill done, But if it happens
Speaker 4: in December, I'm going to lower my GDP numbers.
Speaker 7: Joelivern, you're with us.
Speaker 2: Joseph flavourna SMBC Nego Security is an extended conversation this morning.
Speaker 7: Good morning on your commune across the nation. Good morning, ninety.
Speaker 2: Ninety one FF in Washington, ninety two nine FM in Boston.
Speaker 2: Of course, good morning on YouTube. Subscribe to Bloomberg Podcast.
Speaker 2: Just stunned at the results there.
Speaker 7: Good morning to all of you.
Speaker 2: Good evening, I should say in the Pacific room, Paul Joe, from.
Speaker 6: Your perspective, what are the long term gains that we
Speaker 6: may see in this economy for what may be some
Speaker 6: short term pain what are the long term gains that
Speaker 6: you're looking for.
Speaker 4: It's clear that we can't sustain six percent budget f
Speaker 4: HISS to GDP ratios, and you know, fortunately it was
Speaker 4: ever party in power always blames the other site for
Speaker 4: not being a fiscal hawk. But it seems like we
Speaker 4: certainly need to do something on the spending side. And
Speaker 4: what I've highlighted to clients is if you look over
Speaker 4: the years, the GAO has done some interesting work about
Speaker 4: how we do have a lot of waste abuse, some
Speaker 4: fraud in the system. The Pentagon's paying six hundred dollars
Speaker 4: for a hammer, the massive coss over runs for the
Speaker 4: F thirty five. By the way, anybody, any politician, typically
Speaker 4: wants something done that can.
Speaker 3: Ever be touched.
Speaker 4: It goes under procurement because we could always argue it's
Speaker 4: national defense, so that spending doesn't get touched.
Speaker 3: But GAO had said that.
Speaker 4: Anywhere from one hundred to three hundred billion we could
Speaker 4: get rid of per adum. Now I've heard people think
Speaker 4: Elon must give a higher number.
Speaker 3: I don't know if that could be the case.
Speaker 4: But at least the older stuff said, look, if here's
Speaker 4: one hundred to three hundred per year, over ten years,
Speaker 4: it's one to three trillion, So that to me is meaningful.
Speaker 3: But we'll see.
Speaker 4: I like to again, this comes back to the budget
Speaker 4: because I want things that are legislated, because if it's legislator,
Speaker 4: you can't undo it every four years.
Speaker 2: Registration is quite a legislature, right, I mean again, the
Speaker 2: legislature's out of play. Well, right now, we got an
Speaker 2: executive branch judiciary chase it after him.
Speaker 4: That's right, Tom, And that's why we kind of need
Speaker 4: to figure out. Okay, what you know, we haven't really
Speaker 4: legislated a lot. We've done a lot of executive order.
Speaker 4: That's why I'm relying. May not be the right word,
Speaker 4: but I'm assuming that there's going to be something codified
Speaker 4: in law in the House.
Speaker 7: Okay, totally totally, Lavarn.
Speaker 2: You're driving the market higher now, Futures up seventy, Joel,
Speaker 2: And this is totally unfair to you because you're not
Speaker 2: it's sixteen hundred Pennsylvania or those environs.
Speaker 7: Right now. You say we need a tax cut.
Speaker 2: Brilliant who listening or watching says we don't need a
Speaker 2: tax cut. The line is tariffs will pay for it.
Speaker 2: Supporting Canada in Mexico explain this.
Speaker 4: Okay, so we I'm making the assumption there will be
Speaker 4: some minimal level of tariff, and I don't know what
Speaker 4: the numbers are going to be. Hopefully we'll know a
Speaker 4: little bit more April.
Speaker 3: Second.
Speaker 4: My gut is that will extend a little bit further
Speaker 4: than there. We'll get some clarity, but not everything we want. Again,
Speaker 4: I don't know what they're doing in terms of the
Speaker 4: tax cuts or sorry, the spending cuts, and I don't
Speaker 4: know what the tariffs will be. I mean, there's roughly
Speaker 4: three trillion of imports, so a ten percent tariff in
Speaker 4: theory could raise three hundred billion at least in the
Speaker 4: early years.
Speaker 3: But I don't know what they're going to do with that.
Speaker 4: Is that going to it's certainly not going to be
Speaker 4: legislated in all likelihood, But is there a tariff?
Speaker 5: What is it?
Speaker 4: How many spending cuts are actually implemented, and how does
Speaker 4: the economy perform?
Speaker 2: You see legit work on this from year budget. Here's
Speaker 2: CBO from the CBO.
Speaker 3: Well, let me say this.
Speaker 4: I don't like the CBO scoring because if you look
Speaker 4: at they assume in the next to give you an
Speaker 4: idea over a ten year scoring period. The difference between
Speaker 4: using their revenue numbers, a difference between a three percent
Speaker 4: economy and a one point eight percent economy over ten
Speaker 4: year period is about four point three trillion of additional revenue.
Speaker 3: So this notion CBO is.
Speaker 4: Going along this current law versus baseline to me is
Speaker 4: a big problem and you can get a huge tax
Speaker 4: hike next year if it's not extended. To assume that
Speaker 4: your revenue share or GDP is going to go up,
Speaker 4: I think.
Speaker 3: Is totally misplaced.
Speaker 4: So there's a lot of things that are going on,
Speaker 4: but I think the scoring has been willfully inadequate. But again, Tom,
Speaker 4: until we see what's in these bills, I'm just speculating.
Speaker 4: I want to see actually what happens, then I'll make
Speaker 4: a judgment call at that point.
Speaker 6: The most recent University in Michigan survey was disappointing to
Speaker 6: the marketplace in the sense that it reflected slower growth
Speaker 6: outlook and higher inflation outlook. How concerned are you about
Speaker 6: inflation moving higher, whether it's driven by tariffs or not.
Speaker 8: What is your inflation call?
Speaker 4: So the inflation is long, What I am optimistic is
Speaker 4: you are seeing money supply and it's hard to measure
Speaker 4: totally broad credit creation.
Speaker 3: A lot of credit now is outside the public.
Speaker 4: Markets or in the private credit markets. M two growth
Speaker 4: has slowed. You are seeing wage growth moderate, although I'm
Speaker 4: not a big proponent that wages drive inflation. Gas prices
Speaker 4: are dropping in some parts of the country. The energy side,
Speaker 4: to me, is going to be very important and if
Speaker 4: the administration is successful, and I think they will be,
Speaker 4: but they need. One of my assumptions, they need gasoline
Speaker 4: and oil prices down because you could lose about a
Speaker 4: point on inflation headline and core if oil goes back
Speaker 4: to sixty or slightly below. So we need that. So
Speaker 4: that's how That's how I thinks see things shaping up.
Speaker 3: Do you what do you.
Speaker 8: Say to people who say tariffs are at tax on
Speaker 8: the consumer?
Speaker 4: So what I would say is, it's so if you
Speaker 4: when you go through just a simple math of what
Speaker 4: President Trumpet said last year, ten percent across the board,
Speaker 4: sixty percent on China, you got like a nine tenths
Speaker 4: increase in the price level, assuming you know everything was
Speaker 4: passed through, which history suggests it's not. Some will be
Speaker 4: absorbed in the margin, some will be absorbed in the
Speaker 4: exchange rate. But I would say to people, Look, if
Speaker 4: you're having to pay a one off higher price for
Speaker 4: a good, but if you're a blue collar worker, you
Speaker 4: have no tax on tips, no tax on overtime, which
Speaker 4: by the way, those are supply side factors, and you're
Speaker 4: getting paying no tax on social Security benefits and also
Speaker 4: having the benefit of low marginal rates and low corpor rates.
Speaker 4: That to me is a great trade off because ultimately,
Speaker 4: in my opinion, it will drive long term productivity growth
Speaker 4: through capital expenditure.
Speaker 2: Thank you so much out on YouTube for this idea
Speaker 2: of what our government does. And I adored an Admiral
Speaker 2: Zoomal was one of my heroes a million years ago.
Speaker 2: So we spent twenty four billion or whatever nine billion
Speaker 2: of research costs on the Zoom Wall destroyer. We went
Speaker 2: from x amount down to seven. It costs so much
Speaker 2: it was a failure. Now we're back to urly Bloke.
Speaker 2: I think Stravetis would say that's a good thing. Only
Speaker 2: fourteen percent of the budget is controllable. What would be
Speaker 2: the proper rece responds of the parties against President Trump.
Speaker 2: Do you see a cogent response to the Trump economics.
Speaker 3: So well, I'm not sure.
Speaker 4: I don't ask you a question on the spending. I'm
Speaker 4: confused on the question.
Speaker 2: It can be either. I'm confused on the moment as well.
Speaker 2: The confusion here is I don't see a cogent debate
Speaker 2: about our fiscal policy over into what it means for
Speaker 2: our family's investment policies as well.
Speaker 7: Where's this debate in?
Speaker 3: So I read six months?
Speaker 4: So let me just sidetrack for a minute. Let's just
Speaker 4: talk about Trump and omics. So what I say is
Speaker 4: this isn't exactly what you ask, but at least we'll
Speaker 4: talk about the economic policy is what I see as
Speaker 4: a desire and intent to re engineer, reindustrialized the US
Speaker 4: manufacturing base, and a tariff is a necessary but not
Speaker 4: sufficient criterion to try to do that. In addition to
Speaker 4: low corporate rates on domestic production, cheap and abundant energy
Speaker 4: because it's very key to produce things, Germany is basically
Speaker 4: isn't cost efficient anymore if you exclude the pandemic production there,
Speaker 4: industrial productions back to it was in twenty twenty ten.
Speaker 4: And of course any business friendly regulation permitting process I
Speaker 4: think needs to change a bit. Even I think the
Speaker 4: other side can agree on that. So that would kind
Speaker 4: of encourage capital to come into the US. On the
Speaker 4: fiscal side time, which you raise, which is very interesting.
Speaker 3: We need to have that debate.
Speaker 4: But I don't think we've ever realized how much spending
Speaker 4: we just we just waste.
Speaker 3: And if people talk about, oh, it's all entitlements.
Speaker 4: And that's where the money is a thirty percent discretionary.
Speaker 4: But there is a lot of waste and abuse even
Speaker 4: on some of these titlement programs.
Speaker 3: But people unfortunately.
Speaker 4: Conflate getting rid of the abuse with oh, people are
Speaker 4: losing their service, and that's not the case. But we
Speaker 4: don't have that debate, and we should.
Speaker 2: We have a debate here that we haven't talked about
Speaker 2: basic economics. Where does SMBC and ECO see the unemployment
Speaker 2: rate going given all this.
Speaker 4: We've got the rate essentially in the low force four
Speaker 4: to four and a quarter.
Speaker 3: So we think it'll stay going to stay there?
Speaker 4: Yeah, well it's for one now and I would say
Speaker 4: out or call yes. That means to tell you the
Speaker 4: truth that doesn't surprise us. We tend not to look
Speaker 4: at other economists, in part because we don't want to
Speaker 4: be biased. But to get a higher rate, Tom, we'd
Speaker 4: have to be really pessimistic on growth also too, Oakin's
Speaker 4: law is useful, which is that you know what Oakins laws,
Speaker 4: but it's the relationship between potential GDP and what actually
Speaker 4: happens in the economy. And the other thing is this
Speaker 4: is that even if we had a slow period of
Speaker 4: growth this year, maybe you talked earlier about the pain, Yes,
Speaker 4: we're gonna have somewhat of a pullback on the fiscal side.
Speaker 4: Secretary Besset mentioned detox. But if all of a sudden
Speaker 4: it looks like twenty twenty six is going to accelerate,
Speaker 4: financial conditions will leaves in anticipation of that. Hopefully there'll
Speaker 4: be some clarity on the tax side, and companies wouldn't
Speaker 4: lay people off, so there'd be no reason for the
Speaker 4: unperpoint rate to rise if the twelve month forward was improving.
Speaker 7: Joe, thank you so much.
Speaker 3: Huge, Thank you guys, thank you, thank you.
Speaker 2: Joel, Chief Economists, SNBC and Eco Securities, A swarm and
Speaker 2: formally working with mister Cuddler with the Trump administration version one.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live
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Speaker 1: or watch us live on YouTube with that question.
Speaker 2: Our equity discussion of Monday. Maybe dare I say of
Speaker 2: the week as well? Liz Anne Saunders joins us now
Speaker 2: with Charles Schwab. Lizzy Card to rule. I got to
Speaker 2: be in the game even when I'm stressed. Going to
Speaker 2: cash is a tough track record. How do you stay
Speaker 2: in the game given the cross currents of March of
Speaker 2: twenty twenty five.
Speaker 9: So, I think within the equity space, thank factor focused.
Speaker 9: As you know, Tom, we have been very factor biased
Speaker 9: and oriented over the last couple of years, feeling like
Speaker 9: the monolithic sector calls are much more difficult to do.
Speaker 9: There's much more volatility on a weekly week basis at
Speaker 9: the sector level, a little more consistency in terms of
Speaker 9: performance at the factor level, and one of the factors
Speaker 9: that we added to our focus list as we headed
Speaker 9: into this year was a low volatility For obvious reasons,
Speaker 9: you wanted to have a little bit of that protection
Speaker 9: with that low volatility factor, and that's been the best
Speaker 9: performing factor you guys track it at Bloomberg over the
Speaker 9: past three months or so. So I think the best
Speaker 9: way to navigate is a little bit more defense, but
Speaker 9: not in the traditional defensive sectors, doing it via the
Speaker 9: factor level.
Speaker 6: Lizane, I think one of the concerns out there in
Speaker 6: the marketplace is people are starting the question this economy.
Speaker 6: If in fact some of these tariffs come in, it
Speaker 6: could spell economic growth concerns, it could spell inflation concerns,
Speaker 6: and that calls into question kind of the overall health
Speaker 6: of the economy.
Speaker 8: How material is that risk, because that would go to
Speaker 8: the earning story.
Speaker 9: Oh absolutely, I think right now, if you look at
Speaker 9: if you look at betting odds, if you look at
Speaker 9: a consensus of economists, you're somewhere in the thirty ish
Speaker 9: percent probability of recession. But that's a completely moving target
Speaker 9: as a result of the nature of this uncertainty and
Speaker 9: the way we get tariff announcements, not to mention back
Speaker 9: and forth pauses retaliations. But I think if we go
Speaker 9: to the extreme on the tariff front, it raises recession risks,
Speaker 9: not just in the United States, everywhere, and even if
Speaker 9: we were to have more resilience from a trade perspective,
Speaker 9: but as a country with less trade dependent, if you
Speaker 9: started to see more weakness show up globally. That obviously
Speaker 9: filters through in the United States, So not a better
Speaker 9: than even bet at this point for recession. But I
Speaker 9: think we all need to be dusting off recession watch
Speaker 9: list to reflect this incredible amount of uncertainty. We're not
Speaker 9: seeing a huge impact yet on the hard data. We're
Speaker 9: seeing it obviously in the soft data. But at this point,
Speaker 9: unless we get a reprieve on tariffs, what's more likely
Speaker 9: to happen, like a couple of years ago, is the
Speaker 9: hard data is more likely to catch down to the
Speaker 9: soft data versus the other way around.
Speaker 6: We've at the peak the trough. We did have a
Speaker 6: ten percent pullback in the S and P five hundred.
Speaker 6: We've rallied a few percentage points here, including the futures
Speaker 6: market today. How does that market moved with a little
Speaker 6: bit of hindsight here, was that a reasonable response to
Speaker 6: this uncertainty that's been brought into the discussion.
Speaker 9: Probably, But I think the fuller story gets told under
Speaker 9: the surface of the indexes. You're right in the terms
Speaker 9: of the S and P five hundred maximum draw down
Speaker 9: has been ten percent this year, but if you look
Speaker 9: at the average member level, the maximum draw down has
Speaker 9: been fifteen percent. If you go down to the Nasdaq
Speaker 9: and you look at average member maximum drawdown, you're a
Speaker 9: date it's negative thirty three percent. So there's been a
Speaker 9: lot of churn and weakness under the surface. We still
Speaker 9: have a large cap bias in terms of what has
Speaker 9: been leading from a broad style perspective this year. It's
Speaker 9: just been large cap value, not large cap growth. That
Speaker 9: still gives a lift to these capulated indexes in relative terms.
Speaker 2: You and your team live on airplanes and outseeing the
Speaker 2: schwab world. Is when somebody asks the question from the
Speaker 2: chief seats Lizione Saunders, is the bullmarket over? Let me rephrase,
Speaker 2: Is the bull market broken?
Speaker 10: No?
Speaker 9: But I think we are clearly in a correction phase.
Speaker 9: It wouldn't surprise me if we continue this with this
Speaker 9: trade uncertainty, and particular if the tariffs do go into
Speaker 9: full effect on April second, that we could have a
Speaker 9: cyclical bear market. I'm not sure I would yet be
Speaker 9: at the point of stating that if the bull market
Speaker 9: is over, that we're entering into some sort of secular
Speaker 9: bear market. But we're in a cyclical pullback here, notwithstanding
Speaker 9: some strength today. So I think that there is still
Speaker 9: risk related to the uncertainty regarding tariffs.
Speaker 2: Lyzienne Saunders, with just all the experience she has at
Speaker 2: Charles Shrubs, she's with us for an extended conversation today.
Speaker 2: Good morning across America, Good noon in Europe on the
Speaker 2: Pacific Rim. We say good evening to all of you.
Speaker 2: Just humbled by the success out on YouTube of Bloomberg podcasts.
Speaker 2: Subscribe to Bloomberg Podcast Paul.
Speaker 6: And some of the leading tech stocks that we've all
Speaker 6: grown accustoms seeing moving higher and high, whether it's Google
Speaker 6: or you know, Amazon or Microsoft, and you know peak
Speaker 6: to trough are down fifteen to twenty percent here. How
Speaker 6: do we think about the tech sector as potentially a
Speaker 6: leader for this market, which it's been for many, many,
Speaker 6: many many years.
Speaker 8: Can we still rely on that?
Speaker 9: I think you'd have to see stability and forward estimates.
Speaker 9: Whether it's the Magnificent seven, or it's the tech sector
Speaker 9: or maybe the growth trio that houses the Magnificent seven,
Speaker 9: which we tech, communication, services and consumer discretionary. We still
Speaker 9: have stronger earnings growth expected, or say the Magnificent seven
Speaker 9: cohort relative to the S and P four ninety three
Speaker 9: the other stocks within the SMP.
Speaker 5: The problem is direction. Directionally, we're moving up.
Speaker 9: A little bit in terms of X Magnificent seven, we're
Speaker 9: moving down such by the end of the year we're
Speaker 9: going to be not full convergence. But in this space
Speaker 9: on consensus numbers, you've got Magnificent seven looking at maybe
Speaker 9: twenty percent earnings growth versus mid teens for the rest
Speaker 9: of the s and P five hundred, and that is
Speaker 9: in contrast to a year ago where the Magnificent seven
Speaker 9: had about fifty five percent earnings growth and the rest
Speaker 9: of the SMP was very low single digit.
Speaker 5: So it's it's the direction.
Speaker 9: It's the direction of travel that matters, and I think
Speaker 9: that's been one of the fundamental reasons why we've seen
Speaker 9: that group of stocks lag this year.
Speaker 6: What's your confidence level, Lezanne, in terms of the rest
Speaker 6: of the market, that load of mid teens kind of
Speaker 6: earnings growth, what's your confidence in that earnings number?
Speaker 8: To the analystos bring those down.
Speaker 5: Terribly high, not terribly high.
Speaker 9: I think analy or at the mercy of the guidance
Speaker 9: that they're getting from companies. Companies are dealing with the
Speaker 9: grave uncertainty basically going into to hold pattern from a
Speaker 9: capex perspective. From a forward guidance perspective, it's not quite
Speaker 9: like it was back in the COVID era where you
Speaker 9: saw record percentage of companies just withdrawal guidance all together.
Speaker 9: But it's such a murky environment, and what analysts have
Speaker 9: done is take that sort of collective wisdom from their
Speaker 9: companies and their bias has been to pair back estimate.
Speaker 9: So you've gone from at the beginning of the year
Speaker 9: about a fifteen percent expected growth rate for twenty twenty
Speaker 9: five and this is all the entire S and P
Speaker 9: five hundred. That's down now to around ten percent, which
Speaker 9: if that is accurate, that comes in at a lower
Speaker 9: growth rate than twenty twenty four. I think that's been
Speaker 9: at play in terms of this corrective phase where at.
Speaker 2: The multiple valuation, like you say, stay with large cap,
Speaker 2: but are we under a twenty multiple and a blended
Speaker 2: Liz and Saunders market.
Speaker 5: Yeah, so you have to segment it.
Speaker 9: You're still in the mid to high twenties for tech
Speaker 9: or the magnificent seven.
Speaker 5: Then you get closer to twenty.
Speaker 9: We've come down from about a twenty two to four
Speaker 9: in multiple about twenty. Then you can go equal weight
Speaker 9: or s and p X mag seven and you're into
Speaker 9: the teens there. So it really depends on how you segment.
Speaker 9: Think the problem is that we've had a declining numerator
Speaker 9: and a declining denominator. As I mentioned, I think we
Speaker 9: need to see stability in the denominator part of the
Speaker 9: equation to provide a little bit of a lift from
Speaker 9: evaluation perspective. We're not quite there yet.
Speaker 2: I can't emphasize, folks, the partial dynamics Lilie and Saunders
Speaker 2: just effortlessly described there. So take it further, liz in
Speaker 2: I got a better valuation in Europe. Warren Buffet is
Speaker 2: buying in Japan because he's got a better valuation there.
Speaker 2: Can you with a just as a general statement, a
Speaker 2: pe ratio, Can you be a pe hog an underby
Speaker 2: going to a lower ratio. It's not going to lift
Speaker 2: when we.
Speaker 9: So I think the international comp is an important one
Speaker 9: because clearly we have seen the rest of the world
Speaker 9: trade at a significant discount to what have been fairly
Speaker 9: lofty valuations in the US, and I think that's part
Speaker 9: of the reason for international app performance. It's a reminder
Speaker 9: to investors that even if US exceptionalism isn't dying here
Speaker 9: that there are merits to diversification across asset classes, inclusive
Speaker 9: of international and that's clearly paid dividends. But one of
Speaker 9: the things we always like to remind folks is when
Speaker 9: you're comparing a region to a region, or a country
Speaker 9: to a country US versus anyplace else in the world,
Speaker 9: you have to understand the economic dynamics of the country
Speaker 9: or region. If you are a country, say like Australia
Speaker 9: that has a big mining component, the multiple afforded to
Speaker 9: that market in general is going to be lower than
Speaker 9: a more innovation driven economy like in the United States.
Speaker 9: My colleague Jeff Clientopho, you guys know, is our international
Speaker 9: strategist talk about Germany is essentially an auto etf So
Speaker 9: I think there has to be interesting that understanding of
Speaker 9: the economic dynamics, not just in apples to Apple's valuation comparison,
Speaker 9: that needs to come into play.
Speaker 7: Do you agree with my core theme?
Speaker 2: I think everybody knows. I feel this way that the
Speaker 2: great unspoken is corporations adapt and adjust. Can standard impoors
Speaker 2: five hundred corporations and adapt and adjust to what they've
Speaker 2: been given?
Speaker 7: In two thousand and twenty.
Speaker 9: Five, Well tell them what they've been given. So a
Speaker 9: colleague of mine was at the business round table in
Speaker 9: DC and one of the themes coming from companies specific
Speaker 9: to tariffs was just tell us what they're going to be,
Speaker 9: and then we can adapt and adjust. But the back
Speaker 9: and forth a shoot from the hip. The uncertainty in
Speaker 9: terms of timing, magnitude, duration is what's causing such a
Speaker 9: constraint right now. If we actually knew what the playing
Speaker 9: field look like, I think companies absolutely could adapt and adjust.
Speaker 9: We're just not there yet.
Speaker 6: So Lizianne, giving all that uncertainty as a backdrop, is
Speaker 6: there any argument for small element cap stocks here today
Speaker 6: or no?
Speaker 9: So I think there's some bottom fishing that is probably warranted.
Speaker 9: But I think more important, particularly important in the small
Speaker 9: cap space, is to stay up in quality. So focus
Speaker 9: on things like strength of balance sheet, the non zombie companies,
Speaker 9: strong free cash flow, high interest coverage, profit margin stability.
Speaker 9: That's the way I think to move down into the
Speaker 9: small cap space. I wouldn't take an index approach to
Speaker 9: small caps, especially in an index like the Rustle two thousand,
Speaker 9: as we're still talking about at least forty percent of
Speaker 9: the stocks in the Rustle two thousand are some combination
Speaker 9: of zombie companies or not profitable. There are times where
Speaker 9: you get that leverage to a big turn up in
Speaker 9: the economy by going down the quality spectrum, and that
Speaker 9: tends to work in small caps. I think we're still
Speaker 9: far away from the point where we can start to
Speaker 9: build in an expectation of a huge pivot back hire
Speaker 9: in economic rumetic We have to wait for that for
Speaker 9: broader small cap out performance. But I think that there
Speaker 9: are opportunities in the higher quality segments of the small
Speaker 9: cap indexes just brilliant.
Speaker 2: We'll feature Lizien Saunders and single Best Idea today. Thank
Speaker 2: you so much, Lizzie Sounders and Charles Sharp really really
Speaker 2: appreciate this this morning.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto
Speaker 1: with the Bloomberg Business app. You can also listen live
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Speaker 1: say Alexa Play Bloomberg eleven thirty.
Speaker 7: Let's to talk about this morning, busy morning. Futures up
Speaker 7: sixty seven. Nice lift to the.
Speaker 2: Market, and some of that that's because of our political news flow.
Speaker 7: Here in America. Henrietta Tresh joins she's a Vada partner,
Speaker 7: as we've.
Speaker 2: Really enjoyed her valuable briefs once twice a week here. Henrietta,
Speaker 2: I guess we're up because we're going to get tariff light.
Speaker 7: Is it as simple as that?
Speaker 11: I probably the interpretation the headline reads is tarreflight. I
Speaker 11: think if you dig underneath the surface, you'll see that
Speaker 11: it's still tariff really heavy. We have twenty percent new
Speaker 11: tariffs on five hundred billion dollars worth of goods coming
Speaker 11: in from China.
Speaker 10: Already those are going to rise to higher rates.
Speaker 11: They go on top of the Section three oh one
Speaker 11: tariffs that are bet in place for seven years, So
Speaker 11: we're already up in the nearly fifty percent range that
Speaker 11: should take higher on all goods coming in from China.
Speaker 11: And you can say that story across the globe as well,
Speaker 11: with Canada and Mexico. I expect EU auto tariffs around
Speaker 11: the April second new investigations, so there's a lot to come.
Speaker 2: Are Republicans pushing back against as a general statement the
Speaker 2: White House? See percolations of that, But do you see
Speaker 2: Congress animals pushing back against the Trump administration.
Speaker 10: No, not at all.
Speaker 11: I was just on the hill with a whole host
Speaker 11: of Republicans from all different states Tennessee, North Carolina, Arkansas,
Speaker 11: and the response function is basically to diminish the severity
Speaker 11: of the tariffs and then talk about how they might
Speaker 11: be short lived. Because the senators and lawmakers don't have
Speaker 11: information from the White House, they don't have a sense
Speaker 11: of what's coming any more than the street does, because
Speaker 11: so much of this is moving target and being crafted
Speaker 11: at the White House without their input and in many
Speaker 11: cases directly against what they.
Speaker 10: Would like to see.
Speaker 11: What you see the members doing is really downplaying the
Speaker 11: import of these terraffs. So there's a widespread view, for example,
Speaker 11: that it's just the uncertainty around the.
Speaker 10: Terraffs, not the tariffs themselves, that are the problem.
Speaker 11: And then it really delineates between states. Do you a
Speaker 11: lot of union members in your state. If so, maybe
Speaker 11: you're kind of supportive of the tariffs. Do you have
Speaker 11: a lot of manufacturers in your state, then maybe you're
Speaker 11: supportive of the tariffs.
Speaker 10: So it really ranges. But I don't see any material
Speaker 10: pushback from Republicans at all.
Speaker 6: No, well, how about the Democrats. I'm not even sure
Speaker 6: we know who the voice of the Democratic Party is here. Yeah,
Speaker 6: I don't know, Chuck Schumer, I don't know much less
Speaker 6: seeing a coherent countermeasures from the Democrats.
Speaker 8: Where is this party?
Speaker 11: Democrats are absolutely nowhere. So it's also in with Democratic
Speaker 11: leadership over the last week. And what's what's exactly the
Speaker 11: problem is the same things on the Republican side. Because
Speaker 11: President Trump's agenda is more populist. There are some Democrats
Speaker 11: who support the tariffs. Bernie Sanders, for example, is going
Speaker 11: to support some of these tariffs, and senators or congressmen
Speaker 11: from the heavy Union states and the russ Belt are
Speaker 11: going to be supportive of the tariffs. So the Democratic
Speaker 11: Party a can't find a message around how to demonstrate that,
Speaker 11: you know, twenty five percent tariffs on aluminum directly trans
Speaker 11: to every bottle of beer that you're buying. They cannot
Speaker 11: also get their caucus united and in line to say, hey,
Speaker 11: we don't like these taxes on Americans that are coming.
Speaker 11: We don't support using current policy baseline to blow out
Speaker 11: the deficit.
Speaker 10: They're nowhere.
Speaker 7: Andrew.
Speaker 2: This came up this weekend over a beverage of my choice.
Speaker 2: I'm gonna try to keep politics out of it. Henrietta Trace.
Speaker 2: Is there any indication whatsoever that the liberals of the
Speaker 2: Democratic Party want to move to the center.
Speaker 11: I don't think that's something that anybody should make in
Speaker 11: from the far left. I mean, Bernie Sanders has been
Speaker 11: Bernie Sanders for forty years.
Speaker 10: You know, so I don't see that change.
Speaker 11: I do see the far left getting louder, and there's
Speaker 11: some fracture there as well. You know, when you think
Speaker 11: about a senator like Fetterman out of Pennsylvania differing with
Speaker 11: maybe some of the more quintessential far left folks that
Speaker 11: you would think of with AOC or Bernie Sanders. There's
Speaker 11: just a lot of divide, I would say, in the
Speaker 11: Democratic Party.
Speaker 6: And is there not a belief of the Democratic Party
Speaker 6: leadership that the left wing of the party is weakening
Speaker 6: perhaps the overall Democratic Party and if to any extent
Speaker 6: they want to be competitive in two years, that they
Speaker 6: need to move more to the centers? Are not a
Speaker 6: belief there?
Speaker 5: Yeah?
Speaker 10: No, absolutely there is.
Speaker 11: I mean, but man, how long have we been having
Speaker 11: that fight? You know, when Democrats were, you know, upset
Speaker 11: at Bernie Sanders for running againt Hillary Clinton. It was
Speaker 11: the exact same conversation, and that was way back in
Speaker 11: the day, you know. So it's not that Democrats don't
Speaker 11: have the same fights that they've always had.
Speaker 10: They're just still warring faction.
Speaker 11: And I think what the problem might be from the
Speaker 11: establishment front, with the Chuck Schumer wing of the party
Speaker 11: is that they're seeing the current dissatisfaction with Donald Trump
Speaker 11: translate out into the ether and the general public and
Speaker 11: Democrats and special elections. I think I pointed out a
Speaker 11: couple of weeks ago are up ten percentage points more
Speaker 11: than they were.
Speaker 10: Just in November.
Speaker 11: So it's almost like this the work of uniting the
Speaker 11: party or getting the party excited to turn out is
Speaker 11: happening in spite of, or because of, or as a
Speaker 11: secondary function of this conversation.
Speaker 10: So they're not overly concerned.
Speaker 2: Great first brief of the week, Henrietta Trace, Thank you
Speaker 2: so much from all of us a team Absurveillance really
Speaker 2: really appreciate it.
Speaker 1: With Veda partners, this is the Bloomberg Surveillance Podcast. Listen
Speaker 1: live each weekday starting at seven am Eastern on Applecarplay
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Speaker 1: on the Bloomberg terminal.
Speaker 2: Talking about United Airlines and you know, the lounges and
Speaker 2: all that.
Speaker 7: Let's talk to somebody who actually knows what they're talking about.
Speaker 7: How dare we do that?
Speaker 2: Out of Dartmouth and Tuck Stephen Trent joins the City
Speaker 2: Group Iconig on the airlines this morning. Robert Crandall once
Speaker 2: told me that the revolution was persistent cash flow. Are
Speaker 2: the bigger United States airlines? Are they finally delivering persistent
Speaker 2: cash flow?
Speaker 12: Great question and thank you for having me on. I
Speaker 12: would say post pandemic, the network airlines are doing a
Speaker 12: very good job of that. United, Delta, America, and Alaska,
Speaker 12: the four of them last year had several billion dollars
Speaker 12: worth a free cash flow.
Speaker 2: Paul, I'm looking at the pandemic got in the middle
Speaker 2: of this all Gottom some steck. United is killing it
Speaker 2: ten year track record, three point four percent per year.
Speaker 7: Yeah, shareholder return.
Speaker 8: Talk to us Steven about what we heard from the airlines.
Speaker 6: I guess a couple of weeks ago, in front of
Speaker 6: a investor conference, we saw the majors take their guy
Speaker 6: Ford gttence down talk to just about what's driving that,
Speaker 6: what are they seeing?
Speaker 12: Yeah, absolutely, so you do have some issues in terms
Speaker 12: of where people are trying to get their heads around
Speaker 12: the economy. You know, are we going to have a
Speaker 12: slowdown or not? Are we going to get sort of
Speaker 12: coherent statements from Washington which give consumers and investors confidence
Speaker 12: or not. So some of the noise we're getting on
Speaker 12: that level have indeed bleded least short term into the
Speaker 12: booking curve. But I think beyond that as well. You know,
Speaker 12: unfortunately you had one Q is.
Speaker 7: A tough quarter.
Speaker 12: You had several unfortunately high profile aviation accidents, several of
Speaker 12: them were fatal, sadly enough. And then whether there's already
Speaker 12: a tough period for one queue, we had California wildfires
Speaker 12: in January, So the confluence of those factors certainly weighed
Speaker 12: on what happened in short term guides going forward in
Speaker 12: terms of getting into some common orders here. You know,
Speaker 12: fundamentally speaking, we're constructive.
Speaker 6: Where are the airlines in terms of capacity and how
Speaker 6: quickly can they move capacity if the economy were to weaken.
Speaker 12: Sure, so if one looks at domestic capacity per se,
Speaker 12: looking at the entire group, we may have kind of
Speaker 12: a flatish to slightly up picture, you know, in terms
Speaker 12: of how quickly this stuff can get moved. We already
Speaker 12: went through sort of a mini review of this last July,
Speaker 12: when on a short term basis there was a little
Speaker 12: too much capacity relative to demand three months or so
Speaker 12: of that situation and there was enough of a pulldown
Speaker 12: that we got that nice inflection point in domestic unit
Speaker 12: revenue in September, so they can move fairly quickly. What's
Speaker 12: sort of hard to sort at this time, to sort
Speaker 12: out at this time, excuse me, is what will happen
Speaker 12: from the perspective of the economy. Do we get a
Speaker 12: slowdown or is this just a hiccup?
Speaker 2: Steven Chatt with is a city group right now in
Speaker 2: the airline business, how do you respond to the question
Speaker 2: there really a bank with frequent flyer miles and all
Speaker 2: the marketing and the dumb lounges da da da da
Speaker 2: dah that happens to fly an airline? How do you
Speaker 2: respond to the financial side of the business versus moving bodies.
Speaker 12: Yeah, that's a great one, you know. I would argue
Speaker 12: that the model has evolved. So if you look at
Speaker 12: the airlines twenty years ago, you know, doing the credit crunch,
Speaker 12: for example, Delta Airlines was doing just over a billion
Speaker 12: dollars of loyalty and pro branded card revenue for example.
Speaker 12: Now they're doing several billion dollars a year. So I'm
Speaker 12: not saying that these businesses have suddenly become card companies
Speaker 12: or their consumer companies, but that free casual contribution is
Speaker 12: now significant versus what it used to be, and that
Speaker 12: will play a role in valuation and earnings quality. So,
Speaker 12: you know, we think that it's a good thing that
Speaker 12: they've moved in that direction.
Speaker 6: United, American, Delta, the big three. Do investors differentiate between
Speaker 6: the three, and if so, on what basis?
Speaker 3: Yeah?
Speaker 12: Absolutely, you know, I think traditionally Delta has been the
Speaker 12: goal standard of the trio, the one that people look to,
Speaker 12: management look to the air nin stream, the strength of
Speaker 12: its co branded card. I would say United has moved
Speaker 12: significantly in that direction. American Airlines was a little bit
Speaker 12: more of a of a high beta play, and we've
Speaker 12: seen some strategic changes from American over the last couple
Speaker 12: of years. I think the most recent one is really
Speaker 12: a good move in the right direction for American re
Speaker 12: engaging with managed business travel I want to get.
Speaker 2: You in troubled compliance. Where's JEP blue in five years?
Speaker 2: You got a neutral in jet blue? Yeah, where's chip
Speaker 2: blue in five years?
Speaker 7: Help me?
Speaker 3: Yeah?
Speaker 7: Absolutely, Lisa is paying attention.
Speaker 12: Yeah, you know, I would say that in terms of
Speaker 12: where that carrier moves, the unit revenue side of the
Speaker 12: fence and the route strategy is sort of one piece
Speaker 12: of the picture where it looks like they're moving in
Speaker 12: the correct direction. I would say the piece of the
Speaker 12: pie that looks a lot more challenging for them is
Speaker 12: the balance sheet.
Speaker 2: Are you going to pay fourteen hundred dollars for a
Speaker 2: lounge to get a free gin and tonic?
Speaker 12: No, I won't do that.
Speaker 7: Is the whole lounge thing like done. You know, you
Speaker 7: actually had some.
Speaker 12: Post pandemic shop in all the lounge stuff when everybody
Speaker 12: started flying again and you had, yeah, you had a
Speaker 12: lot of people with frequent flyer status who were flooding lounges.
Speaker 12: So that's a great signal in terms of demand. But
Speaker 12: some of that has to be sort of a little better,
Speaker 12: and I think some of the airlines have already started
Speaker 12: to do that. So I think people still like the lounges.
Speaker 2: I get twenty seconds when you were at Dartmouth. Did
Speaker 2: you fly into Lebanon you feel like you're landing on
Speaker 2: a Caribbean island.
Speaker 12: Yes, my goodness, I did fly in the Lebanon a
Speaker 12: couple of times.
Speaker 5: Not true.
Speaker 7: It was sitting on my lap. Stephen Trent, thank you
Speaker 7: so much, really appreciate it.
Speaker 2: We're city group. Just definitive here, lots of green in
Speaker 2: the screen. Buys he likes United in the American airlines.
Speaker 2: I believe you mentioned as well.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
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Speaker 1: Just say Alexa, Play Bloomberg eleven thirty.
Speaker 7: The newspapers Lisa Matteo, Lisa, what do you have?
Speaker 13: Okay? So next month, the White House hosts the annual
Speaker 13: Easter egg roll, Right, all the kids come out. It's
Speaker 13: a big, one hundred and forty seven year tradition. But
Speaker 13: the New York Times saying this year could be a
Speaker 13: little bit different because it could be funded by corporate sponsors.
Speaker 13: So that's the difference. But they're saying, though it's raising
Speaker 13: some ethical legal concerns from President Trump because he's allowing
Speaker 13: companies to profit from the event.
Speaker 5: What are we talking about?
Speaker 13: How much right could a corporate company bring in? So
Speaker 13: they're saying, there's three options. It costs between seventy five
Speaker 13: five thousand dollars and two hundred thousand dollars. That's what
Speaker 13: they would pay for the little perks to what.
Speaker 5: Okay?
Speaker 13: So for example, they get the corporate booth, they get
Speaker 13: the logo placements, they get the branded snacks, they get
Speaker 13: to have exclusive tickets to brunch with the first Lady.
Speaker 13: They get one hundred and fifty tickets themselves for the event.
Speaker 7: Does the Easter Bunny come into Cyber.
Speaker 13: Can't know, but it's a different kind of feel to it.
Speaker 13: I guess it could be if if it brings in
Speaker 13: these corporate sponsors next supposed to be focused on their childrendiness.
Speaker 8: Let's raise a little cash, I guess we.
Speaker 5: Raise a little cash.
Speaker 13: Yes, it goes to the White House Historical Association.
Speaker 4: So there you go, all right.
Speaker 13: Paul Sunday Duke right Pounded Baylor eighty nine sixty six.
Speaker 13: No doubt they're a good team, but the Washington Post
Speaker 13: is saying a big reason behind their success is this
Speaker 13: age old strategy. Their height. So yeah, the tallest team
Speaker 13: in the country seventy nine point eight inches across fifteen players,
Speaker 13: so it arranges from a seven foot two center to
Speaker 13: a five eight guard yep, yep in between. They have
Speaker 13: no other player listed below six and five. I mean,
Speaker 13: it's crazy the height that they do, but it's an advantage.
Speaker 7: Dumb question, Paul, you're qualified, Okay? Should they raise the hoop?
Speaker 7: Not eleven feet? Twelve feet? Now?
Speaker 6: They if they do anything, and they might push back
Speaker 6: to three point line at some point, but they'll start
Speaker 6: in to pros there for that. But yeah, so Douke
Speaker 6: is a the tallest team, but they're also I think
Speaker 6: and probably the ranked third in terms of defense. But
Speaker 6: they're the best defensive team I've ever seen.
Speaker 7: I mean, moment of silence here, You've nailed this. Why
Speaker 7: does your bracket show your brilliance?
Speaker 8: I have no idea exactly because I tried to get cute.
Speaker 6: But I should have just picked all the all the
Speaker 6: higher seats.
Speaker 7: You gotta be dumbes would like me and Lisa.
Speaker 5: Yes, I gotta do that.
Speaker 7: Too much bracket talk.
Speaker 2: I'm like, we lost so much money in our two
Speaker 2: to oh one k is, we're talking bracket next, all right,
Speaker 2: we go from two.
Speaker 10: Okay, we go to roth I raise.
Speaker 13: That's what we're talking about. This is actually the new
Speaker 13: trend with young savers roth I raise.
Speaker 5: Okay.
Speaker 13: The Wall Street Journal is saying they're taking the advice
Speaker 13: of their parents, financial coaches, tax advisors. They using it
Speaker 13: is the save for retirement big purchases they're actually opening
Speaker 13: in addition to saving for the workplace retirement plans. So
Speaker 13: that's something a little bit different. But with tax safe
Speaker 13: and not far off, they're actually making all these last
Speaker 13: minute contributions to it too. On top of it. So
Speaker 13: we're talking about people forty and under. That's who's starting
Speaker 13: to use this a little bit more. And that's they're
Speaker 13: seeing me.
Speaker 8: I think my three of those kids, they're between twenty
Speaker 8: five and twenty.
Speaker 3: Nine, they do both well.
Speaker 8: They all I'm thinking is my two older ones. Yeah,
Speaker 8: they were little kids.
Speaker 6: They remember nine to eleven because that they were preschool
Speaker 6: nine to eleven, they remember the financial crisis big time,
Speaker 6: and then they have the pandemic. Their whole life, they've
Speaker 6: had crazy, crazy, crazy stuff happened, and I think that's
Speaker 6: made them a little bit more cautious in terms of
Speaker 6: saving That's what. That's the conversations I have with my
Speaker 6: guys and they're all four one k's and doing all
Speaker 6: that kind of stuff, and.
Speaker 2: Forks from Paul Swende there's it's the single smartest thing
Speaker 2: I've heard in ninety days here. Our kids are different
Speaker 2: and one of the things that they've seen family members
Speaker 2: or friends'.
Speaker 7: Parents run out of money. That's something we didn't really know. Yeah,
Speaker 7: it's different, Absolutely brilliant. Thank you, Lisa. I just can't
Speaker 7: say no. I'm about the value of the newspaper segment
Speaker 7: as well.
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