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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Hi, Tracy, how are you You're getting getting You're getting worse.

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Speaker 3: I'm getting worse.

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Speaker 2: Yeah, then the last three months, yes, and the rest

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Speaker 2: of the no. No, no, But you must be very

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Speaker 2: very relaxed.

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Speaker 4: I'm not shaving until the fence starts.

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Speaker 2: Cutting, right, Okay, that's coming. So that's that's good.

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Speaker 3: I did a dead LFT one.

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Speaker 1: Okay, uh barges.

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Speaker 4: This isn't after school Special, except.

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Speaker 1: I've decided I'm going to base my entire personality going

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Speaker 1: forward on campaigning for a strategic pork reserve in the US.

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Speaker 3: Where's the best imposta?

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Speaker 1: These are the important question? Is that robots taking over

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Speaker 1: the world?

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Speaker 3: No, I see the like.

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Speaker 4: In a couple of years, the AI will do a

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Speaker 4: really good job of making the Odd Lounch podcast and

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Speaker 4: people to say, I don't really need to listen to

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Speaker 4: Joe and Tracy anymore.

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Speaker 3: We do have touching the perfect.

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Speaker 1: You're listening to lots more where we catch up with

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Speaker 1: friends about what's going on right now, because even.

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Speaker 3: When the Odd Lots is over, there's always lots more.

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Speaker 1: And we really do have the perfect guest. It is

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Speaker 1: kind of crazy, so the market is pricing in what

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Speaker 1: is it a little over seventy basis points of cuts

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Speaker 1: right now, which means like the Fed would need to

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Speaker 1: cut every meeting through the end of this year, assuming

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Speaker 1: it doesn't do a fifty basis point cut, which seems

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Speaker 1: a little extreme.

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Speaker 2: Uh yeah, I saying it does. But remember Federal Reserve

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Speaker 2: has no visibility. They have no trust in their models.

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Speaker 2: That is why they so data dependent. So when people say, well,

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Speaker 2: we can roll off fifty, why could you rule out

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Speaker 2: if you sing of the governors or the former governors

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Speaker 2: only two three months ago they were high for longer.

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Speaker 2: Suddenly they've changed their mind. It's no longer high for longer.

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Speaker 2: So that's sort of volatility, almost inevitable outcome of highly

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Speaker 2: volatile neutral rates. So prima facie, if you just look

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Speaker 2: at it, seventy BIPs looks high. But on the other hand,

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Speaker 2: I don't think you can necessarily rule it out. And

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Speaker 2: if you start looking slightly longer term, let's say, look

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Speaker 2: at December twenty twenty five January twenty twenty six, the

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Speaker 2: market is still looking at somewhere around four as a

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Speaker 2: policy rates. Now for the policy rates to me is

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Speaker 2: too high. I think the numbers should be somewhere closer

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Speaker 2: to three and a half, maybe even less than that.

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Speaker 2: So to answer your question, it looks like it's high

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Speaker 2: they but FED has no confidence in their methodology, in

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Speaker 2: their models, or a visibility what happens, and therefore it

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Speaker 2: is possible that you might.

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Speaker 3: End up with it.

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Speaker 1: So we are speaking with Victor Schwetz, Corey strategist and

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Speaker 1: one of our repeat Odd Thoughts guests. It is, of

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Speaker 1: course the week that we have just seen a meeting

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Speaker 1: from the Federal Reserve where they opted to hold rates

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Speaker 1: as expected, but they definitely telegraphed that that rate cut

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Speaker 1: was coming.

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Speaker 4: Joe, you know when I so, I didn't watch the

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Speaker 4: press conference because I was on a train and I

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Speaker 4: had an appointment. I had taken the day off of work.

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Speaker 4: But it was nice because then I read the transcript

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Speaker 4: this morning without the you know, without the distraction of

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Speaker 4: Twitter and all the commentary, and I hadn't read any

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Speaker 4: of the various commentary from the strategists. But when I

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Speaker 4: read the transcript, I thought of our last conversation with Victor, specifically,

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Speaker 4: because it was so clear they, to your point, all

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Speaker 4: they just want to see more numbers the models that suggest, Okay,

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Speaker 4: unemployment is rising and the feeders are restrictive, and therefore

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Speaker 4: inflation should come down, etcetera. All of these theoretical ideas.

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Speaker 4: I don't get the impression they have any confidence. They

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Speaker 4: just want to see more numbers.

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Speaker 2: That's it. That's absolutely right, And there was a reason

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Speaker 2: for them. And the reason is that we live in

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Speaker 2: the world of abundance. We have too much of everything,

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Speaker 2: We have too much of capital, we have too much

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Speaker 2: of most of the products. Technology keeps reducing marginal costs.

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Speaker 2: There was a perception for a period of time that

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Speaker 2: certain areas are in deficit or constrained, such as some

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Speaker 2: of the metal, also labor, but even that is proving

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Speaker 2: to be not true. So if you live in a

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Speaker 2: world of abundance rather than scarcity, economic models do not work.

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Speaker 2: Because all economic models and investment model are predicated on

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Speaker 2: constrained outcomes, that you're choosing the best possible outcome out

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Speaker 2: of variety. If there is abundance, prices don't work. Prices

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Speaker 2: don't signal the same impact, neither do they have the

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Speaker 2: same impact on underlying economy.

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Speaker 1: Wit So Powell is definitely I feel like he's aware

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Speaker 1: of the criticism that the FED is maybe too data

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Speaker 1: dependent at this point, and in fact, in the press

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Speaker 1: conference he was kind of at pains to emphasize that

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Speaker 1: they're not data dependent or sorry, what was it? Data

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Speaker 1: dependency doesn't mean data point dependency, which is kind of funny,

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Speaker 1: especially since we're recording this on Thursday, and we have

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Speaker 1: had some very interesting single data points, including initial jobless

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Speaker 1: claims rising to the highest level in nearly a year.

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Speaker 1: But what does it mean to be data dependent but

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Speaker 1: not data point dependent?

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Speaker 2: It means I have no clue. And essentially what it

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Speaker 2: says is that, look, I don't know what I'm going

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Speaker 2: to do because I don't understand why financial conditions are

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Speaker 2: not tightening more than they should have. I don't understand

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Speaker 2: why unemployment is where it is. Yes, employment cost numbers,

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Speaker 2: for example, yesterday've come out point nine percent was really

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Speaker 2: the lowest for about three or almost four years. So

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Speaker 2: there is no evidence there is a wage spiral. If

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Speaker 2: you sing of goods inflation, it's continued to disinflate. Service

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Speaker 2: inflation is coming back. Even idiosyncratic numbers like imaginary orner

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Speaker 2: occupied rent, or differences between insurance policies in the market

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Speaker 2: and what CPI numbers have or use car prices, all

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Speaker 2: of those DA synchrisis also going away. So you could

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Speaker 2: argue a legitimate question, what are you waiting for? And

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Speaker 2: the answer is they don't want to be Arthur Burns.

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Speaker 2: They don't want to be in a position that they're

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Speaker 2: revisiting sort of nineteen seventies all over again. And so

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Speaker 2: he's basically saying anything is possible, anything is probable, and

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Speaker 2: I cannot guide you in any meaningful way forward. The

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Speaker 2: only thing I can say is that it looks like

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Speaker 2: we're going to cut beyond that. We're either data dependent

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Speaker 2: or data point dependent, or maybe we're not data point dependent,

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Speaker 2: but we certainly not forward looking the way we should be.

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Speaker 4: So Tracy mentioned this recording this August. First, there's a

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Speaker 4: non firm payrolls report that will come out tomorrow, probably

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Speaker 4: by the time people listen to this. I just want

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Speaker 4: to talk about some of the data that we've seen.

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Speaker 4: Tracy mention it initial jobless claims around the highest in

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Speaker 4: the year. The ISM manufacturing number came in Glubbalo expectations.

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Speaker 4: The employment sub index of ISM outside of the COVID period.

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Speaker 4: This is the worst since two thousand and nine, which

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Speaker 4: Bloomberg's Cameron Christ pointed out ADP, I don't know if

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Speaker 4: anyone actually pays that close attention to it. It came

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Speaker 4: in lower than expectations. Today we've got unit labor costs.

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Speaker 4: They're expected to grow one point seven percent. They only

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Speaker 4: grew zero point nine percent. I guess the question is, Okay,

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Speaker 4: is there a risk of a policy mistake? Could things

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Speaker 4: be slowing down more rapidly than the FED things? And

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Speaker 4: even with the concerns that they have that actually this

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Speaker 4: is the moment and maybe things are going to get rolling.

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Speaker 2: There is there is a possibility of that. And you

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Speaker 2: can also add to that quit rates. Quit rates basically

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Speaker 2: return to normality. So everything is pointing to the fact

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Speaker 2: that labor market is getting noticed. Height everything points to

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Speaker 2: direction of a less robust wage increases coming through. There

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Speaker 2: is no wage spiral. Now, could you commit a policy era,

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Speaker 2: Of course you could. But one of the things I

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Speaker 2: keep highlighting policy errors are important when you got scarcity.

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Speaker 2: If you have abundance, you can reverse a policy era

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Speaker 2: in thirty seconds. In fact, even less than thirty second,

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Speaker 2: one word potentially could reverse almost the entire impact of

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Speaker 2: your policy era. So one of the things I've been

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Speaker 2: highlighting is that there is a strong possibility of committing

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Speaker 2: policy era if you're backward looking rather than if you're

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Speaker 2: forward looking. But the fact that we have too much capital,

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Speaker 2: the fact that we reprising things, and a split second,

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Speaker 2: the fact that central banks have unlimited toolkit that is

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Speaker 2: growing on a daily basis. Even if you commit a

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Speaker 2: policy era, you probably cannot perpetuated, So in other words,

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Speaker 2: you will be able to reverse it quite quickly in

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Speaker 2: my view.

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Speaker 1: I saw an interesting thing from Nick Collis over at

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Speaker 1: Data Track this morning where he was talking about or

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Speaker 1: asking if labor market normalization, which is how Powell couched

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Speaker 1: it on Wednesday, whether or not normalization is the new

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Speaker 1: transitory in the sense that they might be focusing on that,

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Speaker 1: and the market starts to focus on it too, and

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Speaker 1: then it turns out that, well, it's not really normalizing,

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Speaker 1: it's in a downturn, and the Fed is making a mistake.

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Speaker 1: But just on the idea of abundance, I mean, you

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Speaker 1: say repricing can happen very quickly, but going back to

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Speaker 1: the transitory idea, that's not what we saw when we

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Speaker 1: saw prices begin to go up.

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Speaker 2: That's because essentially what you had at the time is

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Speaker 2: Federal Reserve insisting on transitory when it wasn't transitory. So

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Speaker 2: in other words, if fed a Reserve wants to commit

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Speaker 2: a policy era, they can. If they insist on perpetuating

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Speaker 2: policy era, they can do that too. If they want

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Speaker 2: to put the economy into recession, they capable of doing it.

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Speaker 2: My point is none of it is necessary because even

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Speaker 2: if you commit a era and you quickly realize you have,

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Speaker 2: you can unwind it incredibly fast. Whereas say, if you

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Speaker 2: look at Paul Walker, if you look at greenspand they

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Speaker 2: had nowhere near the same capability of achieving that outcome.

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Speaker 4: So there is a risk of an error, there is

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Speaker 4: a risk of a recession. But your view is that

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Speaker 4: the rate tool is powerful enough such that even if

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Speaker 4: we were to go into a downturn, that that one

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Speaker 4: lever for what various reasons, is powerful enough to reverse

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Speaker 4: it fairly quickly.

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Speaker 2: Well, not so much, not so much raids, but Rada

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Speaker 2: communication strategy. So the essence of Federal Reserve or any

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Speaker 2: central bank these days Israeli communications strategy coupled with macro

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Speaker 2: and micro prudential controls and coupled with specific policies designed

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Speaker 2: to tailor circumstances that beyond your control that suddenly arises,

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Speaker 2: whether it's Silicon Valley Bank or something else. That's the essence,

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Speaker 2: not so much rates, because in the world of a

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Speaker 2: buve Lounden's price doesn't work as well because there is

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Speaker 2: no scarcity. So all Federal Reserve needs to do is

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Speaker 2: to change communication strategy, to change some of the liquidity positions,

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Speaker 2: and that could be enough now. Ultimately, if you start

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Speaker 2: looking really longer term, there is no doubt that rates

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Speaker 2: at some point in time do work. And that's what

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Speaker 2: I'm saying that if Federal Reserve wants to commit a

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Speaker 2: policy era, wants to perpetuate policy era and place the

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Speaker 2: US economy or any other economy inter recession, they're capable

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Speaker 2: of doing it. Just there is no reason for that.

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Speaker 1: Victor. Do you remember two years ago, I think it

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Speaker 1: was also in the summertime, when the Fed said they

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Speaker 1: basically like ruled out the possibility of a seventy five

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Speaker 1: basis point hike, and then they went ahead and did it,

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Speaker 1: and they sort of abandoned forward guidance, which had been

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Speaker 1: this principle that they had been using post two thousand

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Speaker 1: and eight financial crisis to guide the markets and damp

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Speaker 1: and bond market volatility.

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Speaker 4: I don't know.

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Speaker 1: I've been thinking about that moment for a while now.

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Speaker 1: It feels like we're sort of having a repeat on

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Speaker 1: the data dependency thing, like it's another shift in the

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Speaker 1: emphasis of the central banks communication policy.

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Speaker 2: Yeah, it is. It is. And again if you go back,

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Speaker 2: if you go back to those times, the reason we

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Speaker 2: shifted is because j Pill quite correctly, was saying that

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Speaker 2: neutral rates are becoming very unstable. You know, I can't

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Speaker 2: see the stars he keept highlighting. He'd been highlighting it

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Speaker 2: for years now. And what he basically saying, I don't

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Speaker 2: know where neutral rate is in the nominal terms. Is

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Speaker 2: it more like three three and a half percent that

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Speaker 2: people currently expect or is it closer to four four

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Speaker 2: and a half. And if it is four four and

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Speaker 2: a half, is it possible that in the next six

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Speaker 2: or twelve months is going to drop to two and

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Speaker 2: a half three percent. And so he has no visibility

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Speaker 2: exactly where neutral rate is. He doesn't know what's going

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Speaker 2: up or coming down. He is not even sure what

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Speaker 2: forces actually are driving it so quickly up and down.

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Speaker 2: I mean, we can talk about a number of forces,

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Speaker 2: one of them election and electoral cycles. We can talk

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Speaker 2: about geopolitics, we can talk about climate, we can talk

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Speaker 2: about healthcare. There is a number of sayings that outside

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Speaker 2: the economic system that drives you. So in the past

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Speaker 2: mostly what you had is economic cycles and capital market cycle.

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Speaker 2: We're driving everything today. It's a force us outside the system. Now,

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Speaker 2: what is the ability of Federal Reserve to estimate and

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Speaker 2: anticipate any of these things outside macroeconomic system? The answer

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Speaker 2: is zero. The ability to predict, the ability to anticipate,

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Speaker 2: the ability to price is zero. But these are the

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Speaker 2: factors that are capable of swinging neutral rates quite quite considerably.

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Speaker 1: Well, you mentioned one thing just then, which is political uncertainty,

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Speaker 1: And this is something I wanted to ask you, which

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Speaker 1: is Okay, markets are pricing in roughly a little over

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Speaker 1: seventy basis points worth of cuts at the moment for

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Speaker 1: the rest of the year. How much of that pricing

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Speaker 1: is due to uncertainty stemming from the political situation right now?

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Speaker 1: How much of it is basically risk off getting priced

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Speaker 1: into that market.

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Speaker 2: None. I don't believe anybody can price political outcomes, either

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Speaker 2: with a Trump or Harris wins, or whether the Republicans

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Speaker 2: swip and control the House and Senate and the presidency

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Speaker 2: with a Democrat swip and to have it at full trifecta.

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Speaker 2: What's going to happen at state election levels, because remember

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Speaker 2: forty four states also have elections, sixteen governors or something

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Speaker 2: running for elections. On top of that, I don't think

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Speaker 2: anybody can predict, including investors. So right now, I don't

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Speaker 2: think anything is reflected. People are trying to do Trump

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Speaker 2: trades and they have Harris trades. To me, it's not relevant.

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Speaker 2: First of all, it's not clear what the trades are

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Speaker 2: because one of the sayings, it's been very clear in

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Speaker 2: European elections and increasingly US as well, that if you

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Speaker 2: on extreme right want to take control and govern, people

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Speaker 2: will force you to abandon your most extreme views. This

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Speaker 2: is what happened to Brothers of Italy, That's what happened

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Speaker 2: to RNN, that's what happened to Urn in some ways,

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Speaker 2: that's even happening to AfD in Germany. On top of that,

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Speaker 2: the same happening with Republicans. They no longer want to

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Speaker 2: cut welfare payments. They've abundant Project twenty twenty five if

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Speaker 2: you say, with Kamala Harris, she's now saying fracking is

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Speaker 2: going to go forward. So the good thing I sing

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Speaker 2: right now globally is that electorate is not mad enough,

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Speaker 2: is not angry enough to go to the extreme. So

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Speaker 2: if you want to have an opportunity to govern, you

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Speaker 2: must abundant your most extreme views and extreme policies. And

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Speaker 2: if you do abandon them, then really, how much of

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Speaker 2: a real difference is there between the Harris trade or

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Speaker 2: don't Trump trade or any other trade? So right now,

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Speaker 2: to answer you a question, I don't think anything is embedded.

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Speaker 2: I think people are trying to trade and anticipate certain sayings,

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Speaker 2: but at the end of the day, it's pretty useless

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Speaker 2: because there is no way you will know that, and

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Speaker 2: we might not even know that until January, because more

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Speaker 2: than likely there's going to be quite a lot of litigation,

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Speaker 2: often the vemby elections.

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Speaker 4: It's always striking to me how badly various political electoral

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Speaker 4: themed baskets or trade ideas. Do you know that the

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Speaker 4: Mexican peso was a Trump trade in twenty sixteen and

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Speaker 4: was getting hammered every time he did well in the

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Speaker 4: polls turned out to be one of the best performing

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Speaker 4: currencies during his years of presidency.

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Speaker 1: Do you remember, Joe in twenty sixteen, after Trump won,

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Speaker 1: every single cell side piece of research that came out

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Speaker 1: was like Trump will make whatever great again. And it

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Speaker 1: was everything from like energy stocks to the most esoteric,

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Speaker 1: like asset backed securities. It was amazing.

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Speaker 2: Yeah, people, including cryptocurrency.

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Speaker 4: There's still other than the one in our in the

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Speaker 4: studio right now, many lazy titlers of cell side notes,

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Speaker 4: with the exception of the person we're talking to. But

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Speaker 4: you know, the energy is a good example because energy

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Speaker 4: did really badly under Trump, and then it did really

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Speaker 4: well under Biden, even though the Biden baskets in twenty

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Speaker 4: twenty would have said to all buy solar stocks, which

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Speaker 4: have all done extremely mediocre. Actually, you also mentioned geopolitics,

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Speaker 4: and I get that you can't really put together a

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Speaker 4: compelling electoral trade. Would you see any fingerprints of either

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Speaker 4: of the geopolitical situation or the election on either the

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Speaker 4: economy or markets right now? Is it showing up anywhere?

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Speaker 2: No? Non, I would argue, even Europe, where we've gone

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Speaker 2: through quite a number of cycles because quite a few

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Speaker 2: countries head elections and European Union parliament head elections. You

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Speaker 2: don't actually see a great deal of fingerprints at all,

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Speaker 2: either or an economy or ECB policies, or the market,

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Speaker 2: whether it's equity of fixing of any other market. So

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Speaker 2: to me, and again, I think part of the reason

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Speaker 2: these I keep coming back to that people not yet

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Speaker 2: met enough, they are not yet angry enough, and so

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Speaker 2: the extremes did not have the same pool as they

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Speaker 2: otherwise would have.

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Speaker 4: Can we just go back to it? I would just

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Speaker 4: like to go back to the US in the FED specifically. Again,

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Speaker 4: so setting aside, you know, one of the concerns about

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Speaker 4: a policy mistake or waiting too long is this notion.

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Speaker 4: And this is sort of the implied insight of the

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Speaker 4: some rule, for example, is that unemployment feeds on itself.

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Speaker 4: I lose my job, I spend less, I spend less

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Speaker 4: at your business, you layoff workers, your workers lose income,

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Speaker 4: they spend less.

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Speaker 3: Et cetera.

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Speaker 4: That intuitively makes a lot of sense to me that

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Speaker 4: unemployment contained its own momentum that builds on itself. But

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Speaker 4: your view seems to be that it can be short

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Speaker 4: circuited in a fairly short period of time. Can you

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Speaker 4: reconcile that for me, and like, why you have this

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Speaker 4: belief that, Okay, maybe it is a mistake to wait

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Speaker 4: to September, or maybe the Fed should signal more forcefully

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Speaker 4: than a rate cut cycle that begins in September will

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Speaker 4: be aggressive. But can you sort of reconcile this for me,

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Speaker 4: why you believe that they can reverse a policy or

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Speaker 4: fairly quickly.

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Speaker 2: And a saying Clodia sum yes, actually pulling back from

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Speaker 2: your rule, and for a very good reason. For a

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Speaker 2: very good reason. First of all, we had a massive

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Speaker 2: dislocation of demodern supply curves for goods and services and

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Speaker 2: labor over the last three to four years. Secondly, we're

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Speaker 2: getting very tremendous changes in the structure of the labor

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Speaker 2: market itself, so increasingly Bureau of Labor Statistics is not

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Speaker 2: really capturing the labor market. And well, the labor market does,

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Speaker 2: whether it's a gig jobs, whether it's a multiple jobs.

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Speaker 2: There are many studies of we're done over the last

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Speaker 2: five six years which basically shows that methodology that Bureau

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Speaker 2: of Labor Statistics employees understate labor participation by at least

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Speaker 2: two percentage points, which means all of this law labor

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Speaker 2: participations aren't actually true. They also significantly therefore are understating

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Speaker 2: the hours work and overstating wages per hour. So it's

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Speaker 2: a structural shift that are occurring right now in a

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Speaker 2: labor market, combined with a gradual volatility of the modern

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Speaker 2: supply curves that we have experienced that really blonds that rule.

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Speaker 2: It doesn't really allow that rule to function. But beyond that,

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Speaker 2: and that's something as including it doesn't address. Beyond that

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Speaker 2: is sort of my pet idea of abundance rather than scarcity.

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Speaker 4: But just understand, regardless of whether the rule holds firm

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Speaker 4: and I get that because no rule is going to

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Speaker 4: be ironclad.

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Speaker 3: And you know that talked.

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Speaker 1: About it in the pressor yesterday. He was like, this

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Speaker 1: is something that has happened throughout history, but it doesn't

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Speaker 1: mean it's always going to in the future.

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Speaker 4: It's absolutely not an iron law at all. And you

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Speaker 4: know there are others.

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Speaker 3: Not a law of nature, it's not a law.

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Speaker 4: Neither is the curve inversion a law of incoming recession,

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Speaker 4: as we've seen over the last couple of years. Nonetheless,

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Speaker 4: just the insight, just the core intuition of negative momentum

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Speaker 4: building on itself does that concern.

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Speaker 2: Yes, yeah, it is because ultimately people do need to consume.

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Speaker 2: Ultimately people do need to spend. We have a problem

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Speaker 2: measuring exactly where we are. But the intuitive reaction what

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Speaker 2: you've just said, Joe is absolutely correct. So that's why

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Speaker 2: I keep saying, can we have committed policy era? Yes?

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Speaker 3: Okay.

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Speaker 2: Can we wait too long? Yes? Could there be a

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Speaker 2: price that will be exacted from the economists and the

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Speaker 2: market because we waited too long? The answer is yes.

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Speaker 2: Can you quantify it right now? The answer the answer

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Speaker 2: is no, okay. And the only twist I have that

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Speaker 2: we have a capability of reversing it faster than what

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Speaker 2: we did fifteen years ago, twenty thirty years ago.

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Speaker 1: Joe wanted to go back to the FED. I want

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Speaker 1: to go back to politics because I opened up one

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Speaker 1: of your recent research notes and I had a minor

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Speaker 1: heart attack because one of the things in it it

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Speaker 1: asks the question what links us to the nineteen thirties

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Speaker 1: and the nineteen seventies. So the idea here is that

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Speaker 1: in nineteen sixty eight, investors, as you say, did not

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Speaker 1: know they were going to face a devastating decade where

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Speaker 1: basically they wouldn't make back their losses on stocks until

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Speaker 1: like the nineteen eighties or the nineteen nineties. As an

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Speaker 1: elder millennial who has only just started building wealth in

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Speaker 1: the stock market, I came to it kind of late.

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Speaker 1: This is a very frightening prospect to me. What was

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Speaker 1: your conclusion.

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Speaker 2: Yeah, absolutely, anybody who was investing in nineteen twenty eight,

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Speaker 2: twenty nine would have spent until nineteen fifties getting at

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Speaker 2: least real value of the investment. Everybody in nineteen sixty

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Speaker 2: eight would have waited until early nineteen nineties again to

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Speaker 2: get the real value. The conclusion was that they stum around.

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Speaker 2: There rare some differences compared to twenty thirties or late

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Speaker 2: sixties seventies. One of the key differences is that at

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Speaker 2: this stage, volatility of economic and inflationary outcomes are much

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Speaker 2: less pronounced than what we had in those periods. The

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Speaker 2: other difference is that the policy makers have a much

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Speaker 2: wider set of tools that they available to them or

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Speaker 2: to offset any extreme volatility that is likely to emerge.

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Speaker 2: And I guess the third area is nineteen thirties have

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Speaker 2: their nick nifty fifties, you know, nineteen seventies have their

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Speaker 2: own nifty fifties, but those were fairly conventional companies that

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Speaker 2: just happened to have the right positioning in the time,

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Speaker 2: and they provided some degree of stability. Today, the equivalent

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Speaker 2: of the old nifty fifty is actually driven by incredibly

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Speaker 2: strong structural and circular drivers, mostly technology, but not just technology,

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Speaker 2: anything productivity driven, which we really didn't have in nineteen thirties,

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Speaker 2: and we really didn't have in nineteen seventies. This way

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Speaker 2: relatively technologically benign areas compared to what we have today.

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Speaker 2: So theoretic our equivalent of nifty fifty, and by the way,

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Speaker 2: composition could change. It doesn't have to be a Magnificent

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Speaker 2: seven or Magnificent four or you know, fang or granola.

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Speaker 2: That composition will change, what constitute that basket will change.

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Speaker 2: But the basic principle that we now have companies capable

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Speaker 2: of growing and growing productivity almost irrespective of the environment

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Speaker 2: that they're facing. That's quite different compared to what we

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Speaker 2: had in nineteen seventies. So my conclusion was, yes, there

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Speaker 2: is a lot of similarities between the two political geopolitical

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Speaker 2: lack of consistent commonly greed business economic, social political model

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Speaker 2: on a global basis. That's why other people propagating other models.

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Speaker 2: So there is a lot of commonalities, but there are

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Speaker 2: differences which should result in better outcomes. If you're a millennium,

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Speaker 2: just investing should result in a better outcome than those generally.

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Speaker 1: I guess, on the plus side, even if I experience

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Speaker 1: like three decades of wealth building, I guess I'll be

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Speaker 1: doing odd lots for the next thirty Literally, what I.

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Speaker 4: Was gonna say is, literally, you took it out of

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Speaker 4: my if neither of us accumulate enough savings to retire,

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Speaker 4: and it means we're doing odd lots until our eighties. Tracy,

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Speaker 4: I am happy to keep doing it. I enjoy that.

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Speaker 4: I'm happy to be here in the year twenty sixty four,

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Speaker 4: still recording podcasts with you.

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Speaker 3: I commit to that now.

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Speaker 2: I want to be here, but you can carry on.

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Speaker 1: Lots More is produced by Carmen Rodriguez and dash Ell Bennett,

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Speaker 1: with help from Moses Ondom and Cal Brooks.

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00:25:37,160 --> 00:25:40,199
Speaker 4: Our sound engineer is Blake Maples. Sage Bauman is the

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Speaker 4: head of Bloomberg Podcasts.

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Speaker 1: Please rate, review, and subscribe to Odd Lots and Lots

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00:25:45,000 --> 00:25:48,000
Speaker 1: More on your favorite podcast platforms.

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Speaker 4: And remember that Bloomberg subscribers can listen to all of

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Speaker 4: our podcasts and free by connecting through Apple Podcasts.

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Speaker 1: Thanks for listening, Make Refining again, Make M and A

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00:26:01,280 --> 00:26:05,160
Speaker 1: great again, Make euro Financial P and L great again.

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Speaker 1: Like really random, it's so funny.