1 00:00:00,320 --> 00:00:04,160 Speaker 1: Who you put your trust in matters. Investors have put 2 00:00:04,200 --> 00:00:07,640 Speaker 1: their trust in independent registered investment advisors to the tune 3 00:00:07,640 --> 00:00:12,240 Speaker 1: of four trillion dollars. Why learn more and find your 4 00:00:12,240 --> 00:00:27,960 Speaker 1: independent advisor dot com. Welcome to the Bloomberg Surveillance Podcast. 5 00:00:28,360 --> 00:00:32,040 Speaker 1: I'm Tom Keene with David Gura. Daily we bring you 6 00:00:32,120 --> 00:00:37,120 Speaker 1: insight from the best in economics, finance, investment, and international relations. 7 00:00:37,560 --> 00:00:42,120 Speaker 1: Find Bloomberg Surveillance on iTunes, SoundCloud, Bloomberg dot com, and 8 00:00:42,200 --> 00:00:49,879 Speaker 1: of course, on the Bloomberg David Green. Tom Keene at 9 00:00:49,880 --> 00:00:55,760 Speaker 1: Oppenheimer Funds Studios in New York spectacular rebounding. You know, David, 10 00:00:56,000 --> 00:00:57,800 Speaker 1: I have no life, as you know, I never get 11 00:00:57,840 --> 00:01:02,160 Speaker 1: south of Street. What rebuild in downtown? Yeah, I have 12 00:01:02,240 --> 00:01:04,400 Speaker 1: friends who live near here in Battery Park City and 13 00:01:04,440 --> 00:01:07,319 Speaker 1: just explain our places and places to eat. Now, places 14 00:01:07,319 --> 00:01:10,440 Speaker 1: to shop is placed down here. There's all signs out 15 00:01:10,480 --> 00:01:13,839 Speaker 1: front on the streets saying avocado toast. It's like the land. 16 00:01:13,840 --> 00:01:16,039 Speaker 1: I'm may be having some right now, though, that would 17 00:01:16,080 --> 00:01:18,880 Speaker 1: be We are here again at Appenheimer Funds Studios and 18 00:01:18,920 --> 00:01:22,160 Speaker 1: we're thrilled to get started on this important job today 19 00:01:22,160 --> 00:01:25,959 Speaker 1: with Carl Weinberg of High Frequency economics Carla Francie Lacroix 20 00:01:26,040 --> 00:01:28,319 Speaker 1: in Rome, and as you know, there's a more than 21 00:01:28,360 --> 00:01:32,560 Speaker 1: important Italian vote. I would suggest the zeitgeist for Global 22 00:01:32,600 --> 00:01:36,039 Speaker 1: Wall Street this Friday morning is what they do, not 23 00:01:36,160 --> 00:01:39,440 Speaker 1: what they say, and what Italians are doing, it implies, 24 00:01:39,520 --> 00:01:43,120 Speaker 1: is moving money out of the country. Is Italy too 25 00:01:43,200 --> 00:01:48,680 Speaker 1: much like Greece? Italy is different from Greece, but it 26 00:01:48,840 --> 00:01:51,720 Speaker 1: is in that in the same sense of being different. 27 00:01:51,800 --> 00:01:54,480 Speaker 1: Is also a much bigger concern because it's total debt 28 00:01:54,480 --> 00:01:58,440 Speaker 1: burden is much bigger, the bombs are much more widely held, 29 00:01:58,480 --> 00:02:00,080 Speaker 1: so it has a bigger impact on the investor in 30 00:02:00,120 --> 00:02:03,480 Speaker 1: the community. And of course its economy is the third 31 00:02:03,520 --> 00:02:05,600 Speaker 1: or fourth largest in Europe, depending on how you want 32 00:02:05,640 --> 00:02:08,360 Speaker 1: to count it, so that if their word disorder in 33 00:02:08,400 --> 00:02:11,880 Speaker 1: Italy's financial system and economy would have a much bigger 34 00:02:11,880 --> 00:02:15,560 Speaker 1: bang to the buck. But you know, Greece had fundamental problems. 35 00:02:15,560 --> 00:02:18,400 Speaker 1: You know, Greece is overborrowed, at least at least probably 36 00:02:18,440 --> 00:02:21,239 Speaker 1: over borrowed as well. But Italy's problem is much more 37 00:02:21,320 --> 00:02:24,680 Speaker 1: of a political and financial nature right now, a political 38 00:02:24,720 --> 00:02:26,960 Speaker 1: and financial nature. Will get some some of that sorted 39 00:02:26,960 --> 00:02:30,840 Speaker 1: out this weekend presumably when that referendum takes place on Sunday, Carl. 40 00:02:31,400 --> 00:02:33,600 Speaker 1: If it isn't, though, where do we go from here? 41 00:02:33,600 --> 00:02:35,560 Speaker 1: When you talk about the structural problems, when you talk 42 00:02:35,600 --> 00:02:38,120 Speaker 1: about the banking sector being in the condition it's in 43 00:02:39,480 --> 00:02:41,240 Speaker 1: no matter, no matter what the outcome is here, what 44 00:02:41,240 --> 00:02:44,160 Speaker 1: happens next? Yeah, well, no matter what the outcomes are 45 00:02:44,600 --> 00:02:47,600 Speaker 1: of the election, whatever, whatever the outcome is, the Italian 46 00:02:47,680 --> 00:02:51,160 Speaker 1: banks have to raise capital. They're under capitalized. There in trouble, 47 00:02:51,360 --> 00:02:53,760 Speaker 1: the e c B, that's Bank of Italy. Everybody is 48 00:02:53,800 --> 00:02:57,640 Speaker 1: on them to raise capital um looking at the possibility 49 00:02:57,639 --> 00:03:01,400 Speaker 1: of state intervention to support some of the banks, pushing 50 00:03:01,480 --> 00:03:07,840 Speaker 1: the limits of European constitutional um powers to their absolute maximum. 51 00:03:07,880 --> 00:03:11,040 Speaker 1: And of course, if we get a no vote, if 52 00:03:11,080 --> 00:03:14,160 Speaker 1: the president I'm sorry with the Prime Minister resigns, we 53 00:03:14,200 --> 00:03:17,559 Speaker 1: get elections, we get the risk of an anti European 54 00:03:18,000 --> 00:03:22,160 Speaker 1: five star government coming in to replace Mr Rensey. Then 55 00:03:22,200 --> 00:03:25,760 Speaker 1: it becomes almost impossible for banks to raise capital. I 56 00:03:25,760 --> 00:03:28,440 Speaker 1: mean there are a dodgy proposition to begin with, and 57 00:03:28,680 --> 00:03:31,480 Speaker 1: that then takes the banking sector crisis to a new 58 00:03:31,600 --> 00:03:35,800 Speaker 1: level where an ineffective government can't perhaps help them as 59 00:03:35,880 --> 00:03:37,840 Speaker 1: much as we like them to and where private sector 60 00:03:37,920 --> 00:03:40,280 Speaker 1: money is unlikely to come in, and then we have 61 00:03:40,360 --> 00:03:43,400 Speaker 1: a problem. Mary Monty on surveillance earlier this morning, saying 62 00:03:43,400 --> 00:03:45,240 Speaker 1: he assumes that the Prime Minister rency will stay on 63 00:03:45,280 --> 00:03:47,600 Speaker 1: the job no matter what, no matter what happens. How 64 00:03:47,720 --> 00:03:49,680 Speaker 1: much time does he have here to turn things around? 65 00:03:50,160 --> 00:03:55,840 Speaker 1: Um until until Sunday, you know, the very very shortly. SA. 66 00:03:55,840 --> 00:03:57,720 Speaker 1: There's just a limit to what can be done. The 67 00:03:57,760 --> 00:04:00,200 Speaker 1: banking sector is not going to get fixed between now 68 00:04:00,240 --> 00:04:05,320 Speaker 1: in Monday morning. UM. If the referendum is defeated, then 69 00:04:05,400 --> 00:04:07,720 Speaker 1: Rinsey has to decide what to do. He said in 70 00:04:07,760 --> 00:04:10,960 Speaker 1: the past he would resign. He's certainly put his entire 71 00:04:11,040 --> 00:04:16,640 Speaker 1: political credibility on supporting this referendum, so just like David Cameron, 72 00:04:16,680 --> 00:04:18,640 Speaker 1: he would have to step away. But then he just 73 00:04:18,680 --> 00:04:20,560 Speaker 1: came out a few days ago and said he wasn't 74 00:04:20,560 --> 00:04:23,880 Speaker 1: going to go, So you know, who knows. I don't 75 00:04:23,880 --> 00:04:25,720 Speaker 1: know what he will do or what he won't do, 76 00:04:25,760 --> 00:04:29,080 Speaker 1: but there is very much a risk that his government 77 00:04:29,120 --> 00:04:32,120 Speaker 1: may be forced to resign. He might not have a choice. 78 00:04:32,520 --> 00:04:34,800 Speaker 1: And then, of course in elections, anything can happen. In 79 00:04:34,839 --> 00:04:37,159 Speaker 1: it looks as though Five Star would take control of 80 00:04:37,200 --> 00:04:39,520 Speaker 1: the government if there were in election tomorrow. If I 81 00:04:39,560 --> 00:04:44,400 Speaker 1: assume zero some political economics, dr Weinberg. If if if 82 00:04:44,440 --> 00:04:47,400 Speaker 1: Mario Draggy is supporting Italy, if the e c B 83 00:04:47,960 --> 00:04:51,400 Speaker 1: is assisting Italy, who loses? Who is the one within 84 00:04:51,520 --> 00:04:56,520 Speaker 1: Europe not benefiting? Is the e c B benefits Italy? Well, 85 00:04:56,560 --> 00:04:58,279 Speaker 1: I don't think the Bank of I don't think the 86 00:04:58,320 --> 00:05:01,919 Speaker 1: European Central Bank is at risk here because there's a 87 00:05:01,960 --> 00:05:04,239 Speaker 1: limit to what they can do to support Italian banks. 88 00:05:04,279 --> 00:05:06,680 Speaker 1: They can keep them liquid, but they can't make them 89 00:05:06,680 --> 00:05:09,120 Speaker 1: solving was on the line here, I think is the 90 00:05:09,200 --> 00:05:13,120 Speaker 1: question of bail in of failed institutions, which will be tested. 91 00:05:13,200 --> 00:05:16,679 Speaker 1: This has become the Eurogroup solution to problems in Europe 92 00:05:16,680 --> 00:05:20,080 Speaker 1: that taxpayer money should go last and private money should 93 00:05:20,120 --> 00:05:22,080 Speaker 1: be taken away first. In the case of the bank 94 00:05:22,120 --> 00:05:26,280 Speaker 1: insolvency and in the case of Italy, the systemic importance 95 00:05:26,320 --> 00:05:29,760 Speaker 1: of the institutions is mandating that the government come in 96 00:05:30,120 --> 00:05:34,159 Speaker 1: and ask the European Community European Commission for permission to 97 00:05:34,480 --> 00:05:37,520 Speaker 1: pump money into Italian banks, which otherwise they wouldn't be 98 00:05:37,560 --> 00:05:40,760 Speaker 1: allowed to do so. If the Italians can do it, 99 00:05:40,839 --> 00:05:43,200 Speaker 1: then why can't everybody else do it, and then what 100 00:05:43,279 --> 00:05:45,640 Speaker 1: does bail in really mean? So we've got a real 101 00:05:45,680 --> 00:05:49,360 Speaker 1: test of a conflict between national interests and European interests, 102 00:05:49,440 --> 00:05:52,320 Speaker 1: and of course that raises live stars rolling all of 103 00:05:52,320 --> 00:05:56,360 Speaker 1: it beautifully framed. Dr Weinberg, thank you for the briefing 104 00:05:56,440 --> 00:05:59,240 Speaker 1: this morning. Carl Weiberg, with great assistance to us over 105 00:05:59,279 --> 00:06:14,920 Speaker 1: the years and through crisis on international economics and now 106 00:06:15,000 --> 00:06:18,560 Speaker 1: joining us from Jani's Capital, William Gross, Bill Gross, wonderful 107 00:06:18,560 --> 00:06:21,120 Speaker 1: to speak to you again. Welcome to Bloomberg Television in 108 00:06:21,160 --> 00:06:26,040 Speaker 1: Bloomberg Radio worldwide, Bill Gross. It's certainly better with a 109 00:06:26,120 --> 00:06:29,719 Speaker 1: four point six on unemployment rate, but it's not all 110 00:06:29,800 --> 00:06:33,200 Speaker 1: clear for the American labor economy, is it. No? I 111 00:06:33,240 --> 00:06:34,919 Speaker 1: don't think so. I mean, four point six is a 112 00:06:35,000 --> 00:06:39,120 Speaker 1: headline grabbing number. It's getting close to the lowest numbers 113 00:06:39,120 --> 00:06:41,839 Speaker 1: that we saw in the early part of the century 114 00:06:41,880 --> 00:06:45,279 Speaker 1: before Layman. I suppose, so that will be the headline. 115 00:06:45,360 --> 00:06:47,680 Speaker 1: But you know, we're certainly not out of the clear. 116 00:06:47,880 --> 00:06:51,080 Speaker 1: When I saw the minus point one wage number and 117 00:06:51,120 --> 00:06:54,360 Speaker 1: the revision or the y O Y coming down from 118 00:06:54,400 --> 00:06:56,280 Speaker 1: two point eight to two point five, to me, it 119 00:06:56,279 --> 00:06:58,920 Speaker 1: indicated that things are just not as Huntrey Doria, as 120 00:06:58,960 --> 00:07:01,599 Speaker 1: the stock market seems to think it is. Bill, I 121 00:07:01,680 --> 00:07:03,920 Speaker 1: want to fold any of the politics at the moment. 122 00:07:04,000 --> 00:07:06,280 Speaker 1: You have been critical of some of the statements of 123 00:07:06,320 --> 00:07:10,680 Speaker 1: the president elect. There is an assumption within trump reflation 124 00:07:11,320 --> 00:07:14,920 Speaker 1: of higher inflation and a better good for all. Can 125 00:07:14,960 --> 00:07:18,560 Speaker 1: you state that? Or is there a risk here of 126 00:07:18,760 --> 00:07:22,960 Speaker 1: bad inflation with no real growth? Well, there is that, 127 00:07:23,120 --> 00:07:27,520 Speaker 1: and and you know inflation and productivity go together in 128 00:07:27,600 --> 00:07:30,360 Speaker 1: terms of nominal GDP, and I have a sense that 129 00:07:30,480 --> 00:07:34,400 Speaker 1: the nominal GDP will be elevated by many of the programs, 130 00:07:34,400 --> 00:07:38,080 Speaker 1: whether it's Corver tax cuts or infrastructure programs, etcetera. But 131 00:07:38,360 --> 00:07:41,320 Speaker 1: future growth is primarily a function of productivity, as is 132 00:07:41,680 --> 00:07:46,480 Speaker 1: and inflation. Um. If productivity is high, then inflation is contained. 133 00:07:46,760 --> 00:07:50,160 Speaker 1: But the productivity has been flatlined for the last several years. 134 00:07:50,160 --> 00:07:54,560 Speaker 1: And while you know Cane's in UH programs, and that's 135 00:07:55,520 --> 00:07:59,680 Speaker 1: remember that's remarkable for Republicans. Is like a degree turn. 136 00:08:00,480 --> 00:08:03,080 Speaker 1: But while Kanzie and stimulus and the form of tax 137 00:08:03,120 --> 00:08:07,120 Speaker 1: cuts and spending and deregulation promise a near term boost 138 00:08:07,680 --> 00:08:10,640 Speaker 1: for productivity, in two thousand, seventeen and eighteen, I thought 139 00:08:10,680 --> 00:08:13,440 Speaker 1: they're likely to be temporary in my view. You know, 140 00:08:13,480 --> 00:08:16,840 Speaker 1: the counters to this view is that there's a strong 141 00:08:16,920 --> 00:08:23,800 Speaker 1: dollar now and continuing structural head ones including aging demographics, deglobalization, 142 00:08:23,840 --> 00:08:27,920 Speaker 1: trade policies, and accelerating debt and leverages that we've seen 143 00:08:27,960 --> 00:08:32,000 Speaker 1: in almost all countries, and that promises to contain productivity 144 00:08:32,000 --> 00:08:35,800 Speaker 1: at perhaps one percent annual growth rates and therefore to 145 00:08:35,920 --> 00:08:40,680 Speaker 1: me uh GDP growth rated two and perhaps inflation higher 146 00:08:40,679 --> 00:08:42,719 Speaker 1: than that at two and a half to three, so 147 00:08:43,200 --> 00:08:46,720 Speaker 1: nominal at five some of it, our majority of it 148 00:08:46,760 --> 00:08:49,880 Speaker 1: may be being inflation. Bill How much of the uncertainty 149 00:08:49,960 --> 00:08:52,280 Speaker 1: was allayed this week when Donald Trump picked Stephen manucha 150 00:08:52,360 --> 00:08:55,760 Speaker 1: to be his his Treasury secretary. I heard Stephen Manuchan says, 151 00:08:55,760 --> 00:08:57,280 Speaker 1: I'm sure you did hear that he would be willing 152 00:08:57,320 --> 00:09:00,679 Speaker 1: to explore selling bonds with with the race longer than 153 00:09:00,679 --> 00:09:02,280 Speaker 1: than thirty years. I wonder what you made of that. 154 00:09:02,280 --> 00:09:03,960 Speaker 1: I wonder what you make of of what this has 155 00:09:04,000 --> 00:09:07,680 Speaker 1: done to uncertainty. Well, I think that's the one of 156 00:09:07,720 --> 00:09:09,200 Speaker 1: the let's put it this way, it ought to be 157 00:09:09,240 --> 00:09:12,840 Speaker 1: totally critical. It's one of the important ideas that make 158 00:09:12,920 --> 00:09:15,400 Speaker 1: a lot of sense. Of course, it made since fifty 159 00:09:15,440 --> 00:09:17,960 Speaker 1: basis points ago and in terms of lower rates, but 160 00:09:18,000 --> 00:09:20,760 Speaker 1: it still makes sense today in terms of selling fifty 161 00:09:20,800 --> 00:09:23,760 Speaker 1: to a hundred year bonds, of the theory being that 162 00:09:23,800 --> 00:09:26,959 Speaker 1: you match the maturity of the bonds to the length 163 00:09:27,040 --> 00:09:31,600 Speaker 1: of the asset that you're using a liability against. And 164 00:09:31,640 --> 00:09:34,400 Speaker 1: of course the length of the asset is the strength 165 00:09:34,440 --> 00:09:36,920 Speaker 1: and the longevity of the U S economy, which hopefully 166 00:09:37,000 --> 00:09:39,160 Speaker 1: is a fifty to a hundred year type of things. 167 00:09:39,160 --> 00:09:41,200 Speaker 1: So I think that makes a lot of sense. I 168 00:09:41,200 --> 00:09:43,840 Speaker 1: don't think it makes sense in terms of his policies 169 00:09:43,840 --> 00:09:47,600 Speaker 1: of cutting corporate taxes from thirty five to fifteen percent. 170 00:09:47,720 --> 00:09:50,800 Speaker 1: I mean, the effective corporate tax rate already is twenty 171 00:09:50,800 --> 00:09:53,360 Speaker 1: four percent, And I see this as a grab bag 172 00:09:53,440 --> 00:09:58,000 Speaker 1: of special interests cutting corporate tax rates, raising corporate profits, 173 00:09:58,000 --> 00:10:01,720 Speaker 1: and doing nothing really for main the street America. Right, Bill, 174 00:10:01,840 --> 00:10:03,560 Speaker 1: Let's cut to the heart of the chase. Have you've 175 00:10:03,559 --> 00:10:06,679 Speaker 1: written on this for janis any number of times the 176 00:10:06,720 --> 00:10:11,199 Speaker 1: basic idea of it's a better job economy labor participation 177 00:10:11,320 --> 00:10:13,800 Speaker 1: is a little bit off the mark this month, folks 178 00:10:13,840 --> 00:10:17,880 Speaker 1: back to where it was in June. We need incentives 179 00:10:18,000 --> 00:10:21,120 Speaker 1: from Washington. Does that come from a good old nineteen 180 00:10:21,200 --> 00:10:26,160 Speaker 1: sixties tax credit or can we really trust the secretary 181 00:10:26,400 --> 00:10:31,040 Speaker 1: designate and the president elect to effect a broader tax policy? 182 00:10:31,720 --> 00:10:36,280 Speaker 1: Now to me, Tom, tax credits, well, they've been effectively 183 00:10:36,360 --> 00:10:40,719 Speaker 1: used to ten years ago. Now these days that they 184 00:10:40,720 --> 00:10:43,360 Speaker 1: don't make as much sense. They don't have the multiplier 185 00:10:43,400 --> 00:10:45,520 Speaker 1: effect that they used to have. And the reason is 186 00:10:45,640 --> 00:10:49,800 Speaker 1: is that, you know, corporations have ample use of money. 187 00:10:50,120 --> 00:10:52,520 Speaker 1: They've been able to borrow at near zero percent interest 188 00:10:52,559 --> 00:10:54,760 Speaker 1: rates now for several years, and if they were going 189 00:10:54,800 --> 00:10:58,319 Speaker 1: to invest or wanted to invest in a thriving economy, 190 00:10:58,400 --> 00:11:02,000 Speaker 1: then certainly they would have by now. So a tax credit, 191 00:11:02,320 --> 00:11:04,760 Speaker 1: you know, we'll do little, to my way of thinking, 192 00:11:04,800 --> 00:11:09,200 Speaker 1: to generate economic growth far and above what we're seeing now, 193 00:11:09,240 --> 00:11:11,199 Speaker 1: which is really a two percent or one and a 194 00:11:11,240 --> 00:11:14,200 Speaker 1: half percent type of growth rate. I think the government 195 00:11:14,240 --> 00:11:17,479 Speaker 1: has to get more involved, has to be more Kansian, 196 00:11:17,600 --> 00:11:23,120 Speaker 1: has to be more um uh jobs oriented themselves as 197 00:11:23,120 --> 00:11:26,240 Speaker 1: opposed to the private sector. David, I just want to 198 00:11:26,280 --> 00:11:29,400 Speaker 1: mention we have minimal market reaction to this Job's report. 199 00:11:29,480 --> 00:11:32,760 Speaker 1: Yields are in ever so slightly not enough to make 200 00:11:32,800 --> 00:11:36,120 Speaker 1: Bill grossers there. Phil, let me ask you about the 201 00:11:36,320 --> 00:11:39,000 Speaker 1: international space here. When I know you watch so closely. 202 00:11:39,480 --> 00:11:41,640 Speaker 1: If we take this incoming administration at its word that 203 00:11:41,679 --> 00:11:44,520 Speaker 1: it's going to label China as a currency manipulator, Uh, 204 00:11:44,679 --> 00:11:46,560 Speaker 1: I know you've reckoned with what the consequences of that 205 00:11:46,679 --> 00:11:48,960 Speaker 1: might be. We could see a China that stops buying bonds, 206 00:11:48,960 --> 00:11:51,960 Speaker 1: one that perhaps dumps bonds. What globally would the effect 207 00:11:51,960 --> 00:11:53,600 Speaker 1: of that be and how likely is that to happen? 208 00:11:53,640 --> 00:11:56,240 Speaker 1: Do you think? Well, I think it has had an effect. 209 00:11:56,280 --> 00:12:00,840 Speaker 1: I mean China has been liquidating bonds for almost twelve 210 00:12:00,840 --> 00:12:04,920 Speaker 1: to sixteen months now, and so undoubtedly that's type of 211 00:12:05,320 --> 00:12:08,720 Speaker 1: had an effect. And uh yes, um, you know, global 212 00:12:08,760 --> 00:12:12,760 Speaker 1: conditions are important conditions in terms of US interest rates. 213 00:12:12,840 --> 00:12:16,000 Speaker 1: Let's go to the other other side of the South 214 00:12:16,080 --> 00:12:19,439 Speaker 1: China Sea to Japan and recognize that they still pen 215 00:12:19,559 --> 00:12:23,280 Speaker 1: their tenure j g B at zero percent. Now what 216 00:12:23,360 --> 00:12:26,880 Speaker 1: does that mean. It means that Japanese investors can sell 217 00:12:27,000 --> 00:12:29,080 Speaker 1: j gbs. They haven't got many of them left, but 218 00:12:29,160 --> 00:12:32,040 Speaker 1: they can sell them, you know, basically buy treasuries for 219 00:12:32,160 --> 00:12:35,840 Speaker 1: our currency adjusted the sixth year seventy basis point pickup. 220 00:12:35,920 --> 00:12:38,240 Speaker 1: And so what Japan does, what the e c B 221 00:12:38,440 --> 00:12:41,880 Speaker 1: days does next week in terms of their policies, um 222 00:12:42,160 --> 00:12:44,600 Speaker 1: you know, are quite critical in terms of the overall 223 00:12:44,640 --> 00:12:47,840 Speaker 1: global bond market and the effect that they have on U. S. Treasuries. 224 00:12:47,920 --> 00:12:49,840 Speaker 1: Still thirty seconds here, I want to come back on 225 00:12:49,880 --> 00:12:52,319 Speaker 1: Italy and the drama of this weekend. But right now, 226 00:12:52,640 --> 00:12:55,920 Speaker 1: do you just assume stronger dollar and could you go 227 00:12:56,040 --> 00:12:59,480 Speaker 1: with Mr Triche that we may get a brutally strong dollar, 228 00:13:00,400 --> 00:13:03,120 Speaker 1: not a brutally strong golarm And it gits up depending 229 00:13:03,160 --> 00:13:06,440 Speaker 1: on when you start six or seven percent against the majors, 230 00:13:06,440 --> 00:13:10,840 Speaker 1: and obviously much more against emerging market countries. And it's 231 00:13:10,880 --> 00:13:14,120 Speaker 1: there where the brutal I think comes into effect, Tom, 232 00:13:14,160 --> 00:13:17,760 Speaker 1: because emerging market countries have taken out three to four 233 00:13:17,800 --> 00:13:22,120 Speaker 1: trillion dollars worth of dollar denominated debt over the past five, six, 234 00:13:22,160 --> 00:13:26,240 Speaker 1: seven years, and now those liabilities denominating dollars are coming 235 00:13:26,280 --> 00:13:30,000 Speaker 1: to roost. Not only that, but higher interest rates by 236 00:13:30,000 --> 00:13:34,839 Speaker 1: the Fed, which are are coming sure basically allows that 237 00:13:35,440 --> 00:13:39,199 Speaker 1: or mandates that they'll pay higher interest rates, and they 238 00:13:39,360 --> 00:13:41,840 Speaker 1: are in much of a pickle. Put it that, Bill Gross. 239 00:13:41,880 --> 00:13:44,280 Speaker 1: I want to turn to Italy and the moment for 240 00:13:44,320 --> 00:13:46,800 Speaker 1: the Italian people and frankly for Europe. You've been a 241 00:13:46,800 --> 00:13:52,040 Speaker 1: great student of European political economics, Mario Draggy has to 242 00:13:52,440 --> 00:13:55,480 Speaker 1: react to what we will see on Sunday. How would 243 00:13:55,480 --> 00:13:59,240 Speaker 1: you expect the ECB would react to a note vote 244 00:13:59,400 --> 00:14:04,480 Speaker 1: from the million people. Well, the prospects suggests on that 245 00:14:05,840 --> 00:14:10,120 Speaker 1: drugging will buy Italian bonds to support the Italian credit 246 00:14:10,240 --> 00:14:13,120 Speaker 1: and I think I think that's reasonable. You know, perhaps 247 00:14:13,160 --> 00:14:15,280 Speaker 1: a lot of that is already built in in terms 248 00:14:15,280 --> 00:14:17,480 Speaker 1: of the spread. Ita least been doing a little bit 249 00:14:17,480 --> 00:14:20,000 Speaker 1: better in the last few days because of the expectation 250 00:14:20,080 --> 00:14:23,200 Speaker 1: that um, you know, hands would be open in terms 251 00:14:23,280 --> 00:14:26,080 Speaker 1: of buying by drugging and the e c B. So 252 00:14:26,360 --> 00:14:28,920 Speaker 1: you know, they've been on whatever it takes type of policy, 253 00:14:28,960 --> 00:14:31,800 Speaker 1: and I would expect in terms of the referendum that 254 00:14:31,880 --> 00:14:34,240 Speaker 1: whatever it tanks will work for the short term, but 255 00:14:34,280 --> 00:14:36,640 Speaker 1: it may not work for the long term because ultimately 256 00:14:36,800 --> 00:14:40,640 Speaker 1: Italy is uh approaching a basket case and in terms 257 00:14:40,640 --> 00:14:44,120 Speaker 1: of its banks and potential bankruptcy. But Bill, you've been 258 00:14:44,120 --> 00:14:47,240 Speaker 1: doing this for years. The singular distinction right now is 259 00:14:47,280 --> 00:14:50,880 Speaker 1: Italy can't go to the Lira. They cannot depreciate or 260 00:14:50,920 --> 00:14:56,200 Speaker 1: devailue themselves out of this disaster. What is the gross solution, 261 00:14:56,760 --> 00:15:01,120 Speaker 1: the bill gross solution for all of it, and frankly 262 00:15:01,240 --> 00:15:07,000 Speaker 1: for the European experiment, if currency depreciation is not available, 263 00:15:08,480 --> 00:15:11,280 Speaker 1: well there. The point is is that they're they're very 264 00:15:11,320 --> 00:15:14,160 Speaker 1: little in terms of a solution because the experiment, the 265 00:15:14,240 --> 00:15:17,720 Speaker 1: euro experiment, which tied them all together and unfortunately Tom 266 00:15:17,720 --> 00:15:20,240 Speaker 1: and my view, you know, tied the lira to the 267 00:15:20,360 --> 00:15:23,520 Speaker 1: market at a most unfav rate, which made Germany more 268 00:15:23,520 --> 00:15:26,280 Speaker 1: competitive than Italy, you know, to the extent that they're 269 00:15:26,320 --> 00:15:30,000 Speaker 1: stuck in that euro currency, then there's very little they 270 00:15:30,000 --> 00:15:34,880 Speaker 1: can do other than the standard auntives, which are structural change, etcetera, etcetera. 271 00:15:34,960 --> 00:15:37,560 Speaker 1: But Italy is not good at structural change. They like 272 00:15:37,760 --> 00:15:41,320 Speaker 1: things like they are, and that's why they've been behind 273 00:15:41,360 --> 00:15:43,960 Speaker 1: the eight ball for so many years, in so many decades, 274 00:15:44,000 --> 00:15:47,360 Speaker 1: and so um. You know, I simply think that, you know, 275 00:15:47,400 --> 00:15:49,840 Speaker 1: the way things go in that type of situation is 276 00:15:49,880 --> 00:15:54,200 Speaker 1: that ultimately, uh, you know, bankruptcies leak out, whether it's 277 00:15:54,200 --> 00:15:56,720 Speaker 1: in the financial institutions are in terms of a low 278 00:15:57,080 --> 00:15:59,960 Speaker 1: low growth rate for Italy itself relative to its new 279 00:16:00,080 --> 00:16:03,040 Speaker 1: ring countries, um, not much to do there other than 280 00:16:03,080 --> 00:16:05,200 Speaker 1: to break out of jail or to stay in jail 281 00:16:05,280 --> 00:16:08,440 Speaker 1: and suck up read and water. Thinking about what we're 282 00:16:08,640 --> 00:16:10,520 Speaker 1: seeing Italy, what we've seen here in the the U S. 283 00:16:10,560 --> 00:16:14,200 Speaker 1: You've written Bill that the populist sunrise has barely broken. 284 00:16:14,760 --> 00:16:16,600 Speaker 1: What does the zenith look like? If? If this is 285 00:16:16,640 --> 00:16:19,080 Speaker 1: what we're seeing now, what does that What does populasm 286 00:16:19,080 --> 00:16:20,920 Speaker 1: bring to the U. S economy, the European economy, and 287 00:16:20,920 --> 00:16:25,120 Speaker 1: the global economy. Well, to my view, that's that's down 288 00:16:25,160 --> 00:16:27,040 Speaker 1: the road, is it not. I mean, we have four 289 00:16:27,120 --> 00:16:29,720 Speaker 1: years of Trump policies, and to my way of thinking, 290 00:16:29,720 --> 00:16:34,520 Speaker 1: as they're unfolding, they're certainly not populist oriented. Uh. You know. 291 00:16:34,520 --> 00:16:37,359 Speaker 1: They may be populist oriented in terms of trade policies, 292 00:16:37,720 --> 00:16:40,560 Speaker 1: which I think got him elected in the Midwest, But 293 00:16:41,080 --> 00:16:44,520 Speaker 1: to the extent that trade policies are anti growth, then 294 00:16:44,560 --> 00:16:47,840 Speaker 1: they may not necessarily be job productive. So, you know, 295 00:16:47,880 --> 00:16:50,200 Speaker 1: I think the populist movement is a global movement. It's 296 00:16:50,200 --> 00:16:55,720 Speaker 1: a dissatisfaction with corporations relative to labor. It's an expression 297 00:16:55,760 --> 00:17:00,320 Speaker 1: of the need for higher wages or jobs. Period Um. 298 00:17:00,360 --> 00:17:03,280 Speaker 1: You know, will that go away? To my way of thinking, No, 299 00:17:03,400 --> 00:17:06,000 Speaker 1: it won't go away, because the situation will get worse 300 00:17:06,080 --> 00:17:09,119 Speaker 1: over the next four years, and so ultimately, how has 301 00:17:09,119 --> 00:17:13,359 Speaker 1: it resolved? Um, you know, it's resolved with populist policies 302 00:17:13,480 --> 00:17:17,640 Speaker 1: or the friends you know, unrest that UH that continues 303 00:17:17,720 --> 00:17:20,680 Speaker 1: to express this fat and dissatisfaction and as a result 304 00:17:20,800 --> 00:17:24,679 Speaker 1: by continuing to vote down current administrations in terms of 305 00:17:24,680 --> 00:17:27,800 Speaker 1: their existing policies whatever, they are still to speak to 306 00:17:27,880 --> 00:17:32,919 Speaker 1: our viewers and listeners worldwide on your adamant statement that 307 00:17:33,000 --> 00:17:37,280 Speaker 1: financial repression will continue for many years, including even a decade, 308 00:17:37,560 --> 00:17:41,119 Speaker 1: can you reaffirm after the election of Donald Trump that 309 00:17:41,240 --> 00:17:47,320 Speaker 1: we will continue to see financial repression? Well, that is 310 00:17:47,359 --> 00:17:50,760 Speaker 1: a question mark. You know, the Trump has been anti FED, 311 00:17:50,840 --> 00:17:54,919 Speaker 1: but not necessarily has he expressed his specific views in 312 00:17:55,000 --> 00:17:56,639 Speaker 1: terms of what he thinks the FED should do. Now, 313 00:17:56,680 --> 00:17:59,080 Speaker 1: we know the FEDS independent won't listen to Trump, but 314 00:17:59,560 --> 00:18:02,280 Speaker 1: aside from that, he's got the ability to appoint the three, 315 00:18:02,359 --> 00:18:05,320 Speaker 1: four or five members and that should greatly influence FED 316 00:18:05,400 --> 00:18:09,040 Speaker 1: policy to my way of thinking. You know, Trump's view 317 00:18:09,119 --> 00:18:12,240 Speaker 1: on the FED will be a very easy monetary policy 318 00:18:12,320 --> 00:18:17,720 Speaker 1: to accommodate his very strong UH fiscal deficit type of spending. 319 00:18:17,800 --> 00:18:20,639 Speaker 1: And so, um, you know that's financial repression, is it 320 00:18:20,760 --> 00:18:24,840 Speaker 1: not that it's it's it's a implementation an interest rate 321 00:18:24,880 --> 00:18:29,120 Speaker 1: that's far below what has been earned over prior decades. 322 00:18:29,320 --> 00:18:31,359 Speaker 1: I want to move up to Stanford, then, Bill gross 323 00:18:31,359 --> 00:18:34,080 Speaker 1: by your beloved San Francisco forty niners. We won't talk 324 00:18:34,080 --> 00:18:37,880 Speaker 1: about the forty niners. Well, stick with Stanford. Ken Rogoff 325 00:18:37,920 --> 00:18:42,959 Speaker 1: of Harvard University suggests that John Taylor of Stanford University 326 00:18:43,160 --> 00:18:46,480 Speaker 1: would be an appropriate FED chairman given the politics of 327 00:18:46,520 --> 00:18:49,639 Speaker 1: the moment. Can you live with the Taylor rule and 328 00:18:49,760 --> 00:18:52,919 Speaker 1: Taylor economics at the Fed? Well, no, I can't. And 329 00:18:53,000 --> 00:18:56,600 Speaker 1: I admire Ken Rogoff for his historical research, but not 330 00:18:56,680 --> 00:19:00,879 Speaker 1: necessarily John Taylor. You know, the Taylor rule was implemented 331 00:19:00,920 --> 00:19:04,480 Speaker 1: in the mid nineteen nineties. That made lots of sense 332 00:19:04,520 --> 00:19:07,720 Speaker 1: back then when the economy was less leveraged, and you 333 00:19:08,160 --> 00:19:13,120 Speaker 1: inputted unemployment, and you inputed the potential real interest rate, 334 00:19:13,160 --> 00:19:15,399 Speaker 1: and you came up with some magic formula as to 335 00:19:15,440 --> 00:19:18,760 Speaker 1: where it should be. I think, you know, the Tailor 336 00:19:18,840 --> 00:19:22,400 Speaker 1: rule reflects what's been wrong with the Federal Reserve for many, 337 00:19:22,440 --> 00:19:24,959 Speaker 1: many years, is that this model driven in the models 338 00:19:24,960 --> 00:19:27,840 Speaker 1: are based upon twenty or thirty years or forty years 339 00:19:27,840 --> 00:19:29,920 Speaker 1: of history as opposed to the current day in which 340 00:19:30,280 --> 00:19:34,200 Speaker 1: there are high debt levels, which is the primary factor. 341 00:19:34,280 --> 00:19:39,919 Speaker 1: There are aging demographics, there are technology advancements which displaced people, 342 00:19:39,960 --> 00:19:44,240 Speaker 1: and so unemployment rates and real interest rates that used 343 00:19:44,280 --> 00:19:46,439 Speaker 1: to be the two percent real interest rate of the 344 00:19:46,480 --> 00:19:48,959 Speaker 1: tailor rule, you know, are no longer exist, and so 345 00:19:49,000 --> 00:19:51,600 Speaker 1: the minute you start to use it, um, that's when 346 00:19:51,640 --> 00:19:54,600 Speaker 1: you start to lose it. Bill Whether or not we 347 00:19:54,680 --> 00:19:56,560 Speaker 1: get a John Taylor in a position at the FED, 348 00:19:56,600 --> 00:19:58,680 Speaker 1: it sounds like his legacy is going to loom large 349 00:19:58,720 --> 00:20:01,000 Speaker 1: in Washington. If you listen to the conversation on Capitol 350 00:20:01,040 --> 00:20:04,640 Speaker 1: Hill Republican lawmakers saying they want a rules based system 351 00:20:04,680 --> 00:20:06,920 Speaker 1: at the FED reserve. They control both Houses of Congress, 352 00:20:06,920 --> 00:20:10,320 Speaker 1: where they will control the White House as well. What 353 00:20:10,520 --> 00:20:12,879 Speaker 1: is the FED going to look like from that perspective 354 00:20:12,920 --> 00:20:15,160 Speaker 1: and from a personnel perspective here in two thousand seventeen 355 00:20:15,160 --> 00:20:20,159 Speaker 1: and beyond, Well, it depends on the rules, does it not. 356 00:20:20,480 --> 00:20:24,000 Speaker 1: And I dissed the tailor rule as as one of 357 00:20:24,000 --> 00:20:26,520 Speaker 1: the rules, or the Phillips curve as another one of 358 00:20:26,520 --> 00:20:28,480 Speaker 1: the rules. But they need to come up with a 359 00:20:28,960 --> 00:20:35,280 Speaker 1: neutral star type of rule which zeroes in on the 360 00:20:35,280 --> 00:20:38,160 Speaker 1: neutral real interest rate which at the moment, the FED 361 00:20:38,280 --> 00:20:41,200 Speaker 1: seems to think of somewhere around zero. I don't dispute 362 00:20:41,240 --> 00:20:44,040 Speaker 1: that what I see next week in terms of an 363 00:20:44,040 --> 00:20:48,000 Speaker 1: evolving policy is a FED that probably won't lower those 364 00:20:48,160 --> 00:20:52,240 Speaker 1: dots anymore. And and at the moment, the market is expecting, 365 00:20:52,600 --> 00:20:54,800 Speaker 1: you know, a FED funds increase over the next twelve 366 00:20:54,840 --> 00:20:57,440 Speaker 1: months of perhaps forty basis points and then another forty 367 00:20:57,480 --> 00:21:00,639 Speaker 1: basis points. But believe me, the dots in two thousand 368 00:21:00,720 --> 00:21:03,200 Speaker 1: and eighteen and two thousand and nineteen or expecting more 369 00:21:03,440 --> 00:21:07,120 Speaker 1: like something like eighty or a hundred basis points of increase. 370 00:21:07,200 --> 00:21:09,800 Speaker 1: So I would think that at the next meeting, if 371 00:21:09,800 --> 00:21:12,399 Speaker 1: the dots don't come down, and they probably won't come 372 00:21:12,440 --> 00:21:14,960 Speaker 1: down because of the tremendous influence of the stock market 373 00:21:15,000 --> 00:21:18,040 Speaker 1: and fiscal spending, and you know, the potential inflation ahead 374 00:21:18,080 --> 00:21:21,160 Speaker 1: as opposed to behind, then uh, you know, the front 375 00:21:21,160 --> 00:21:23,639 Speaker 1: part of the curve, the two threes, fours, and fives, 376 00:21:23,680 --> 00:21:26,080 Speaker 1: you know, could be significantly affected. So that would be 377 00:21:26,119 --> 00:21:28,720 Speaker 1: the thing i'd watched with a FED near term bill. 378 00:21:28,800 --> 00:21:31,320 Speaker 1: Is it your sense here that the markets have priced 379 00:21:31,359 --> 00:21:34,639 Speaker 1: in some sort of infrastructure package, some sort of tax cuts, 380 00:21:35,000 --> 00:21:36,880 Speaker 1: tax or form at this point we saw the excitement 381 00:21:36,880 --> 00:21:39,080 Speaker 1: over the prospect of that on the heels of the election. 382 00:21:39,160 --> 00:21:42,120 Speaker 1: Is it priced in at this point, um, yeah, yeah, 383 00:21:42,160 --> 00:21:44,680 Speaker 1: I think so, to the extent that the stock market 384 00:21:44,720 --> 00:21:47,399 Speaker 1: has gone up by five, six or seven percent on 385 00:21:47,440 --> 00:21:50,200 Speaker 1: the basis of it. Um, you know, I think you 386 00:21:50,240 --> 00:21:52,879 Speaker 1: would have to say that it. It certainly has begun 387 00:21:52,960 --> 00:21:55,919 Speaker 1: to be and it is almost culminating in terms of 388 00:21:55,920 --> 00:21:59,800 Speaker 1: the pricing in of a of a fiscal package of 389 00:22:00,200 --> 00:22:04,480 Speaker 1: you know, an amount that is still unknown, but which 390 00:22:04,520 --> 00:22:07,720 Speaker 1: will certainly be significant. My problem with that, of course, 391 00:22:07,800 --> 00:22:11,840 Speaker 1: is that the fiscal package, you know, to my way 392 00:22:11,880 --> 00:22:15,560 Speaker 1: of thinking, may be oriented towards tax incented programs from 393 00:22:15,600 --> 00:22:18,760 Speaker 1: the private sector and not from the the government sector. 394 00:22:18,800 --> 00:22:20,639 Speaker 1: We talked about that five minutes ago, and to the 395 00:22:20,640 --> 00:22:23,440 Speaker 1: extent that it is, perhaps it won't be as effective 396 00:22:23,480 --> 00:22:26,400 Speaker 1: as the market is beginning to anticipate. The other thing, 397 00:22:26,400 --> 00:22:29,800 Speaker 1: of course, is the lowering a corporate tax cuts. We're 398 00:22:29,800 --> 00:22:32,760 Speaker 1: going to see the grab bag there and corporations probably 399 00:22:32,800 --> 00:22:36,760 Speaker 1: will benefit. So markets have I think correctly anticipated a 400 00:22:36,800 --> 00:22:40,000 Speaker 1: grab bag of good ease over the next six to 401 00:22:40,080 --> 00:22:42,920 Speaker 1: twelve months. Phil, Thank you so much. Bill Gross is 402 00:22:42,960 --> 00:22:50,840 Speaker 1: what Jani's capitalist Jobsdale who you put your trust in matters. 403 00:22:51,480 --> 00:22:55,320 Speaker 1: Investors have put their trust in independent registered investment advisors 404 00:22:55,359 --> 00:22:59,680 Speaker 1: to the tune of four trillion dollars. Why they see 405 00:22:59,720 --> 00:23:03,440 Speaker 1: the old is to serve, not sell. That's why Charles 406 00:23:03,480 --> 00:23:06,200 Speaker 1: Schwab is committed to the success of over seven thousand 407 00:23:06,280 --> 00:23:11,399 Speaker 1: independent financial advisors who passionately dedicate themselves to helping people 408 00:23:11,400 --> 00:23:15,600 Speaker 1: achieve their financial goals. Learn more and find your independent 409 00:23:15,640 --> 00:23:26,560 Speaker 1: advisor dot com. Get weird Oppenheimer fund Studios and we 410 00:23:26,680 --> 00:23:30,000 Speaker 1: saved the best for last here wandering through the door 411 00:23:30,119 --> 00:23:33,640 Speaker 1: Brian Levitt senior investment strategists, and he dragged along. Ira Jersey, 412 00:23:33,680 --> 00:23:37,080 Speaker 1: of course, has given us such great assistance who particularly 413 00:23:37,119 --> 00:23:40,000 Speaker 1: on our FED day over the years. On interest rates, Brian, 414 00:23:40,160 --> 00:23:42,119 Speaker 1: it's a bond route. I made a joke of it 415 00:23:42,240 --> 00:23:46,000 Speaker 1: three weeks ago. It's not a joke anymore. Price down 416 00:23:46,440 --> 00:23:50,080 Speaker 1: yields up. How painful is it for Oppenheimer Funds? Well, 417 00:23:50,080 --> 00:23:52,719 Speaker 1: it's not necessarily painful from Oppenheimer Funds. I mean, if 418 00:23:52,760 --> 00:23:54,919 Speaker 1: you think about there's obviously a lot of ways to 419 00:23:54,920 --> 00:23:57,840 Speaker 1: generate income in these markets, and still attractive ways to 420 00:23:57,840 --> 00:24:00,560 Speaker 1: generate income in these markets. What investors should realized though, 421 00:24:00,640 --> 00:24:03,359 Speaker 1: is that the tenure Treasury rate has actually not gone 422 00:24:03,440 --> 00:24:06,960 Speaker 1: up significantly this year. It started the year at today 423 00:24:07,000 --> 00:24:09,760 Speaker 1: it's around two forties. So we believe that earlier in 424 00:24:09,760 --> 00:24:12,200 Speaker 1: the year the Fed rate isn't raised interest rates too 425 00:24:12,200 --> 00:24:15,520 Speaker 1: early signaled four rate hikes flatten the yield curve Breggs. 426 00:24:15,560 --> 00:24:18,359 Speaker 1: It happened, and now the markets starting to price in 427 00:24:18,440 --> 00:24:22,560 Speaker 1: some optimism, some inflation expectations of rates. You too, You're 428 00:24:22,560 --> 00:24:26,840 Speaker 1: not even on speaking terms. I mean we understand here 429 00:24:26,880 --> 00:24:30,280 Speaker 1: Steve Major at HSBC is saying, Okay, I had low 430 00:24:30,400 --> 00:24:33,320 Speaker 1: rates for a while. Here I'm gonna get Trump high rates. 431 00:24:33,560 --> 00:24:35,760 Speaker 1: And then Steve says, we're gonna see some form of 432 00:24:35,800 --> 00:24:39,240 Speaker 1: glide path over quarters and years back to the lower 433 00:24:39,359 --> 00:24:42,479 Speaker 1: terminal rates which everybody saw on dance has been for 434 00:24:42,640 --> 00:24:45,760 Speaker 1: X number of years, which is a new permanent yield. 435 00:24:46,160 --> 00:24:48,439 Speaker 1: Or do we migrate back to what we knew pre 436 00:24:48,560 --> 00:24:51,680 Speaker 1: November eight? Well, I think ultimately we wind up with 437 00:24:52,280 --> 00:24:55,840 Speaker 1: a cyclical uptick in yields which stays here for you know, 438 00:24:55,880 --> 00:24:58,800 Speaker 1: to three years perhaps, and then um you can potentially 439 00:24:58,840 --> 00:25:01,080 Speaker 1: have yields go down again. You know that the key 440 00:25:01,160 --> 00:25:03,560 Speaker 1: pivot here for me, as you know, looking at the 441 00:25:03,560 --> 00:25:06,600 Speaker 1: treasury market will be what does the five year treasury do? 442 00:25:06,880 --> 00:25:08,840 Speaker 1: So I've been looking a lot at the five year 443 00:25:08,840 --> 00:25:11,359 Speaker 1: treasury and how it's performed against twos and tens, and 444 00:25:11,400 --> 00:25:14,840 Speaker 1: how it's performed, uh on a forward basis, And what 445 00:25:14,880 --> 00:25:16,840 Speaker 1: you see is we're back to where what we were 446 00:25:16,840 --> 00:25:19,160 Speaker 1: pricing in two thousand fourteen. It wasn't that long ago 447 00:25:19,240 --> 00:25:21,280 Speaker 1: that we were here this it's just, you know, we 448 00:25:21,359 --> 00:25:22,800 Speaker 1: got used to the idea that maybe we're going to 449 00:25:22,880 --> 00:25:26,080 Speaker 1: remain under two percent yields forever because you have zero 450 00:25:26,240 --> 00:25:28,920 Speaker 1: yields in Japan, you have zero yields and negative yields 451 00:25:28,960 --> 00:25:32,400 Speaker 1: in Germany, and so everyone thought that was a permanent fixture. 452 00:25:32,560 --> 00:25:35,399 Speaker 1: And obviously it's not a permanent fixture because you know, 453 00:25:35,560 --> 00:25:38,199 Speaker 1: yes we are do have global markets, and we live 454 00:25:38,240 --> 00:25:42,680 Speaker 1: in a global world. But the US impacts its own 455 00:25:42,760 --> 00:25:46,600 Speaker 1: treasury yild obviously, right, So between inflation and growth and 456 00:25:46,640 --> 00:25:49,000 Speaker 1: growth expectations changing, it just it makes a lot of sense. 457 00:25:49,040 --> 00:25:51,359 Speaker 1: So bearing that relativism in mind, do you use the 458 00:25:51,400 --> 00:25:53,760 Speaker 1: word route to describe what we're seeing here. It's not 459 00:25:53,800 --> 00:25:55,560 Speaker 1: a route. I mean, I I know, you know, I 460 00:25:56,600 --> 00:25:59,879 Speaker 1: not to criticize Bloomberg but there was a headline yesterday 461 00:25:59,880 --> 00:26:02,159 Speaker 1: on the terminal saying it was one point seven trillion 462 00:26:02,200 --> 00:26:05,960 Speaker 1: dollars of value was destroyed. Well, you know, unless Anya yourself, 463 00:26:06,160 --> 00:26:09,240 Speaker 1: unless any bonds, unless any bonds actually defaulted in that 464 00:26:09,320 --> 00:26:10,760 Speaker 1: hime period, and I'm pretty sure that the U. S. 465 00:26:10,800 --> 00:26:14,439 Speaker 1: Treasury didn't. Um, then you know the par value, that 466 00:26:14,560 --> 00:26:16,800 Speaker 1: the amount of bonds outstanding remain the same. It's the 467 00:26:16,840 --> 00:26:20,439 Speaker 1: price that moved, and that that relative price movement is 468 00:26:20,480 --> 00:26:23,040 Speaker 1: painful for investors who might have gotten in at the top, 469 00:26:23,520 --> 00:26:27,040 Speaker 1: but it's it also just suggests that, um, you know, 470 00:26:27,080 --> 00:26:29,240 Speaker 1: we were actually going to be more optimistic. So you know, 471 00:26:29,320 --> 00:26:31,639 Speaker 1: you want to be in things like corporate bonds and 472 00:26:31,640 --> 00:26:33,680 Speaker 1: and equities and an environment where you're gonna have better growth. 473 00:26:33,800 --> 00:26:36,440 Speaker 1: Fran Levitt help us understand here, how Janet yelling at all, 474 00:26:36,440 --> 00:26:38,760 Speaker 1: are going to be processing what we're seeing here today. 475 00:26:38,800 --> 00:26:40,480 Speaker 1: You look at FED futures, it's all but a given here. 476 00:26:40,480 --> 00:26:42,679 Speaker 1: We're gonna see right hike in in December. Tom has 477 00:26:42,680 --> 00:26:44,520 Speaker 1: been keen here to look ahead to to February. You 478 00:26:44,520 --> 00:26:46,560 Speaker 1: think that's the meeting to look forward to? What do 479 00:26:46,600 --> 00:26:48,119 Speaker 1: you see is the path? What are you expecting to 480 00:26:48,119 --> 00:26:50,320 Speaker 1: hear from cheer yelling with regard to forward guidance in 481 00:26:50,320 --> 00:26:52,040 Speaker 1: a couple of weeks, Well, I expect that there they 482 00:26:52,080 --> 00:26:54,080 Speaker 1: are going to raise interest rates in December. But I 483 00:26:54,119 --> 00:26:56,600 Speaker 1: think that they if you look at today's earnings number, 484 00:26:56,680 --> 00:26:59,320 Speaker 1: you look at the labor force participation, right, this is 485 00:26:59,359 --> 00:27:02,720 Speaker 1: still not at a in excessively inflationary environment. I mean, 486 00:27:02,720 --> 00:27:05,200 Speaker 1: for years people have asked us, is this all inflationary? 487 00:27:05,359 --> 00:27:08,440 Speaker 1: We've always responded, we hope so, because deflation is the 488 00:27:08,440 --> 00:27:11,960 Speaker 1: worst of all outcomes. So we continue to climb out 489 00:27:12,000 --> 00:27:16,320 Speaker 1: of the financial crisis, we continue. We're seeing wages pick up. 490 00:27:16,359 --> 00:27:18,960 Speaker 1: This is a good thing. But to raise interest rates 491 00:27:18,960 --> 00:27:22,200 Speaker 1: aggressively in this environment, all of what Stanley Fisher seemed 492 00:27:22,200 --> 00:27:25,320 Speaker 1: to signal at the beginning of the year um would 493 00:27:25,320 --> 00:27:28,400 Speaker 1: be would be problematic. Critical question. If we go from 494 00:27:28,480 --> 00:27:32,320 Speaker 1: vice Chairman Fisher's alter accommodative out to something that Ira 495 00:27:32,440 --> 00:27:35,840 Speaker 1: Jersey would call normal, I believe we're gonna see yield up, 496 00:27:35,880 --> 00:27:38,520 Speaker 1: price down. And you know when a bond bear market, 497 00:27:38,600 --> 00:27:41,400 Speaker 1: the way it goes is people look at their bond statements. 498 00:27:41,440 --> 00:27:45,080 Speaker 1: One month, oh, that's harsh, two months, that's really harsh. 499 00:27:45,320 --> 00:27:48,919 Speaker 1: And there's some point where they move funds. Are we 500 00:27:49,000 --> 00:27:52,960 Speaker 1: going to see bond outflows? And do you just presume 501 00:27:53,119 --> 00:27:55,639 Speaker 1: they go into an equity alternative? Well, we certainly hope so. 502 00:27:55,680 --> 00:27:58,000 Speaker 1: I mean, if you look since the financial crisis, seven 503 00:27:58,080 --> 00:28:01,000 Speaker 1: hundred billion dollars out of equ funds and equity e 504 00:28:01,119 --> 00:28:04,520 Speaker 1: t F a trillion dollars into bond funds and bond ETFs. 505 00:28:04,720 --> 00:28:07,639 Speaker 1: And you know, General Patton told us, if everyone's thinking alike, 506 00:28:07,680 --> 00:28:13,240 Speaker 1: then somebody isn't think we interviewed so. So we certainly 507 00:28:13,240 --> 00:28:15,320 Speaker 1: hope so. And there is a little bit of irony 508 00:28:15,320 --> 00:28:17,000 Speaker 1: in all of this because we were getting ready to 509 00:28:17,040 --> 00:28:19,679 Speaker 1: write another outlook. It was gonna be president Hillary Clinton 510 00:28:19,960 --> 00:28:22,320 Speaker 1: more years of what we had seen. You were up 511 00:28:22,359 --> 00:28:27,160 Speaker 1: all Monday night right that we did away and um, 512 00:28:27,200 --> 00:28:30,720 Speaker 1: and it was gonna be slow growth, you know, benign inflation, 513 00:28:30,880 --> 00:28:34,119 Speaker 1: not a lot of stimulus, limitations of monetary policy. And 514 00:28:34,160 --> 00:28:38,480 Speaker 1: the irony now is the base case is more optimistic, 515 00:28:38,760 --> 00:28:40,600 Speaker 1: but the tail risks start to get a little bit 516 00:28:40,640 --> 00:28:43,680 Speaker 1: fatter because you start to see some moves towards inflation, 517 00:28:44,000 --> 00:28:45,840 Speaker 1: some moves in higher rates. That doesn't mean that the 518 00:28:45,840 --> 00:28:49,520 Speaker 1: cycle ends, you know, in sen Or twenty eighteen, it 519 00:28:49,600 --> 00:28:51,280 Speaker 1: just means that some of the rest is arising. We're 520 00:28:51,280 --> 00:28:52,720 Speaker 1: gonna try to get a look at that report that 521 00:28:53,080 --> 00:28:54,960 Speaker 1: ditched draft here in a little bit here, But I 522 00:28:55,240 --> 00:28:57,280 Speaker 1: let me ask you about the expectation here, so that 523 00:28:57,320 --> 00:28:58,960 Speaker 1: the presidential election didn't go in the way that many 524 00:28:59,000 --> 00:29:01,280 Speaker 1: people predicted it would, how about the reaction we've seen 525 00:29:01,440 --> 00:29:03,480 Speaker 1: since then? If if you allowed yourself to think of 526 00:29:03,480 --> 00:29:06,320 Speaker 1: a Trump presidency to three months ago, would you've expected 527 00:29:06,320 --> 00:29:08,560 Speaker 1: the reaction in the markets to be what we're seeing today. Well, 528 00:29:08,640 --> 00:29:10,600 Speaker 1: maybe a little bit more dramatic in the bond market 529 00:29:10,600 --> 00:29:13,640 Speaker 1: then we would have thought generally, But but it makes 530 00:29:13,720 --> 00:29:16,680 Speaker 1: it makes sense given that the missing piece from growth 531 00:29:16,880 --> 00:29:19,800 Speaker 1: and it has been the idea of fiscal stimulus. So 532 00:29:19,800 --> 00:29:21,880 Speaker 1: the idea that we're gonna get fiscal stimulus is raising 533 00:29:21,920 --> 00:29:25,080 Speaker 1: inflation expectations. And when you look at what's caused the 534 00:29:25,080 --> 00:29:27,600 Speaker 1: bond market to move higher, it's a little bit of 535 00:29:27,680 --> 00:29:31,240 Speaker 1: risk premia from the Trump presidency and and and turn premium, 536 00:29:31,440 --> 00:29:34,120 Speaker 1: but most of it has actually come from inflation expectations. 537 00:29:34,160 --> 00:29:38,000 Speaker 1: So we started before President Trump was or President elect 538 00:29:38,000 --> 00:29:42,560 Speaker 1: Trump um was elected. Was for ten year for for 539 00:29:42,600 --> 00:29:45,000 Speaker 1: inflation average over the next ten years, one point five 540 00:29:45,720 --> 00:29:49,200 Speaker 1: today it's at two percent, So that explains most of 541 00:29:49,240 --> 00:29:52,360 Speaker 1: the moving tramps. Continue our Jersey with us and Brian 542 00:29:52,440 --> 00:29:55,240 Speaker 1: love it as well from Oppenheimer Funds and we joined them. 543 00:29:55,560 --> 00:29:59,320 Speaker 1: Were their mit avocado toast. You're at Oppenheimer fund Studios. 544 00:29:59,440 --> 00:30:05,440 Speaker 1: Era help me here with Europe with the international dynamic, 545 00:30:06,000 --> 00:30:08,920 Speaker 1: and I believe it's negative rates to the election of 546 00:30:09,080 --> 00:30:13,560 Speaker 1: Mr Trump. Take away our worries about the distortions of 547 00:30:13,640 --> 00:30:15,719 Speaker 1: negative interest rates. Not in the near term. I mean, 548 00:30:15,800 --> 00:30:18,560 Speaker 1: Mario drag and the ECB are likely to keep interest 549 00:30:18,640 --> 00:30:22,000 Speaker 1: rates low. In fact, we're expecting um next week for 550 00:30:22,200 --> 00:30:24,120 Speaker 1: the e c B it actually to extend its spawned 551 00:30:24,160 --> 00:30:28,360 Speaker 1: buying program by nine months. UM consensus perhaps is around six. 552 00:30:28,480 --> 00:30:30,720 Speaker 1: There is a risk that they try something a little 553 00:30:30,720 --> 00:30:33,120 Speaker 1: bit different as well. But but that just shows you 554 00:30:33,160 --> 00:30:36,760 Speaker 1: that globally there's still a very low interest rate environment, 555 00:30:36,800 --> 00:30:39,640 Speaker 1: regardless of what the US does, and not only in Europe, 556 00:30:39,680 --> 00:30:43,120 Speaker 1: but you have other countries, how yielding countries like Brazil, Indonesia, 557 00:30:43,200 --> 00:30:46,680 Speaker 1: India and countries like that that we particularly like, where 558 00:30:46,760 --> 00:30:48,720 Speaker 1: interest rates are likely to come down over the next 559 00:30:48,800 --> 00:30:51,480 Speaker 1: twelve eighteen months, and and so there are good opportunities 560 00:30:51,480 --> 00:30:53,760 Speaker 1: and when you can get you know, mid single digits 561 00:30:53,760 --> 00:30:56,440 Speaker 1: like seven percent yields in India and ten percent plus 562 00:30:56,520 --> 00:30:59,680 Speaker 1: yields in in Brazil, if you're willing to accept some volatility. 563 00:30:59,720 --> 00:31:02,120 Speaker 1: There are still places globally that you can get income. 564 00:31:02,160 --> 00:31:03,560 Speaker 1: But you don't want to be everywhere. So it's not 565 00:31:03,600 --> 00:31:06,240 Speaker 1: saying oh, by emerging markets because they have higher yields, 566 00:31:06,480 --> 00:31:08,440 Speaker 1: because South Korea now does not have a higher yield 567 00:31:08,440 --> 00:31:10,840 Speaker 1: in the US. So you have to be very selective 568 00:31:10,840 --> 00:31:12,840 Speaker 1: when you do that. Probably Vet, looking back at the 569 00:31:12,840 --> 00:31:15,880 Speaker 1: election and all that it's changed, did it change the 570 00:31:16,040 --> 00:31:18,480 Speaker 1: role of the Fed Reserve in this economy? Right now? 571 00:31:18,560 --> 00:31:20,160 Speaker 1: We see what's happened as a result of what happened 572 00:31:20,160 --> 00:31:22,640 Speaker 1: in November eight, is the Fed Reserve of getting the 573 00:31:22,640 --> 00:31:24,360 Speaker 1: back seat that perhaps it's wanted here for for a 574 00:31:24,400 --> 00:31:26,520 Speaker 1: little while. I think that's true. I think the focus 575 00:31:26,560 --> 00:31:29,480 Speaker 1: has shifted appropriately from the f O m C to 576 00:31:29,600 --> 00:31:32,320 Speaker 1: the Trump administration. And while the f O m C 577 00:31:32,480 --> 00:31:34,400 Speaker 1: was the biggest game in town last year, you know, 578 00:31:34,440 --> 00:31:37,280 Speaker 1: with apologies to Janet Yale, and that now changes. So 579 00:31:37,640 --> 00:31:39,800 Speaker 1: as we look for it, you know, we we again 580 00:31:39,840 --> 00:31:42,760 Speaker 1: we expect an interest rate hike in in December Um. 581 00:31:42,840 --> 00:31:44,880 Speaker 1: But as we look forward with the markets really need 582 00:31:44,920 --> 00:31:51,000 Speaker 1: to digest is just how possible or how effective will 583 00:31:51,120 --> 00:31:53,479 Speaker 1: stimulus be. And you know, I think some of the 584 00:31:53,480 --> 00:31:57,520 Speaker 1: things that the market has a difficult time understanding is that, 585 00:31:57,720 --> 00:32:01,000 Speaker 1: for one, gridlock never really goes away. So um. You know, 586 00:32:01,120 --> 00:32:03,560 Speaker 1: even when even when Bush one re election and No. 587 00:32:03,720 --> 00:32:05,720 Speaker 1: Four on this idea that they were going to privatize 588 00:32:05,760 --> 00:32:08,760 Speaker 1: Social Security and he had both houses of Congress, they 589 00:32:08,760 --> 00:32:11,360 Speaker 1: were unable to do that. We also know tax reform 590 00:32:11,440 --> 00:32:14,440 Speaker 1: could be very ugly, right Ronald Reagan one forty nine, 591 00:32:14,560 --> 00:32:16,440 Speaker 1: fifty states and eighty four and it took two years 592 00:32:16,480 --> 00:32:20,600 Speaker 1: to get tax reforms. So the markets, um, rightfully so 593 00:32:20,720 --> 00:32:24,040 Speaker 1: are pricing in some inflation expectations this idea that we 594 00:32:24,080 --> 00:32:26,480 Speaker 1: can make America great again. Um. I think it was 595 00:32:26,480 --> 00:32:29,200 Speaker 1: already great, but we can make it greater. Um, And 596 00:32:29,240 --> 00:32:31,160 Speaker 1: that we could do better than what we're doing. But 597 00:32:31,280 --> 00:32:33,280 Speaker 1: at some point the markets probably have to bring back 598 00:32:33,320 --> 00:32:35,120 Speaker 1: their expectations a little bit. On all of that, I 599 00:32:35,160 --> 00:32:37,360 Speaker 1: think when looking at the bond market's important to note that, 600 00:32:37,680 --> 00:32:39,240 Speaker 1: you know, and I mentioned this in the last segment 601 00:32:39,280 --> 00:32:41,360 Speaker 1: as well, we're basically back to where we were in 602 00:32:41,360 --> 00:32:44,240 Speaker 1: two thousand, fourteen. So it's not really that long ago 603 00:32:44,360 --> 00:32:46,600 Speaker 1: that we that yields were at these kind of levels, 604 00:32:46,600 --> 00:32:48,920 Speaker 1: that we had two and a half percent ten year yields, 605 00:32:48,960 --> 00:32:52,840 Speaker 1: that inflation expectations were about two percent, and you know, 606 00:32:52,880 --> 00:32:55,840 Speaker 1: so it's not we're not saying that, look, the world's 607 00:32:55,840 --> 00:32:58,560 Speaker 1: gonna be like gangbusters, but it's just going that a 608 00:32:58,560 --> 00:33:01,160 Speaker 1: lot of the tail risks or growth at least have 609 00:33:01,360 --> 00:33:03,760 Speaker 1: perhaps diminished a little bit in the US as you're 610 00:33:03,960 --> 00:33:05,960 Speaker 1: looking for clues here as to what policy is going 611 00:33:06,000 --> 00:33:08,480 Speaker 1: to be when it comes to infrastructure spending or taxes 612 00:33:08,520 --> 00:33:10,960 Speaker 1: when it comes to the Fed Reserve, uh something. So 613 00:33:11,040 --> 00:33:12,960 Speaker 1: that to me, when Stephen Minach was on television for 614 00:33:13,000 --> 00:33:15,560 Speaker 1: his first interview was he had praise for Jennet Yellen. 615 00:33:16,040 --> 00:33:17,720 Speaker 1: He said that he thought she's done a good job. 616 00:33:17,800 --> 00:33:21,080 Speaker 1: And I wonder how that changes your calculus, your sense 617 00:33:21,120 --> 00:33:23,520 Speaker 1: of where this administration, this incoming administration might be head 618 00:33:23,560 --> 00:33:25,600 Speaker 1: when it comes to the Federal Reserve. Well, that's a 619 00:33:25,600 --> 00:33:27,040 Speaker 1: that's a good question, and we don't know. I mean, 620 00:33:27,040 --> 00:33:29,360 Speaker 1: we have debates all the time, and you know, Brian 621 00:33:29,360 --> 00:33:30,840 Speaker 1: and I have talked about it, have talked about it 622 00:33:30,880 --> 00:33:34,000 Speaker 1: with the our international debt team and our our domestic 623 00:33:34,040 --> 00:33:37,080 Speaker 1: debt teams here. And you know, we don't know if 624 00:33:37,120 --> 00:33:40,640 Speaker 1: if the person people that Mr Trump will appoint are 625 00:33:40,680 --> 00:33:42,760 Speaker 1: going to be hawkish or dubbish. Like, we're not really 626 00:33:42,800 --> 00:33:46,640 Speaker 1: sure where he wants to be in terms of of 627 00:33:46,640 --> 00:33:48,440 Speaker 1: of who he's going to appoint. Will you point someone 628 00:33:48,440 --> 00:33:50,840 Speaker 1: who's an economist or or not? I mean, you know, 629 00:33:50,840 --> 00:33:53,360 Speaker 1: will you appoint someone who's you know, been on Wall 630 00:33:53,360 --> 00:33:55,520 Speaker 1: Street or not? We don't know, Um, And I think 631 00:33:55,520 --> 00:33:58,160 Speaker 1: that that's that's that can't be his first priority because 632 00:33:58,200 --> 00:34:00,320 Speaker 1: the first priority is to a point that thous of 633 00:34:00,360 --> 00:34:03,280 Speaker 1: people he has to and to his administration, and then 634 00:34:03,480 --> 00:34:05,520 Speaker 1: you know, and then he'll probably start thinking about the 635 00:34:05,520 --> 00:34:08,480 Speaker 1: FED once he has his economic policy team in place, 636 00:34:08,520 --> 00:34:12,600 Speaker 1: and folks at the UM, at the OMB, they'll they'll 637 00:34:12,600 --> 00:34:14,560 Speaker 1: start talking about who's going to be the next fedup. 638 00:34:14,640 --> 00:34:17,120 Speaker 1: The reality of it, though, um, you know, if we 639 00:34:17,400 --> 00:34:20,120 Speaker 1: if we were to move forth with a different makeup 640 00:34:20,160 --> 00:34:22,120 Speaker 1: of the f O, M C and A and makeup 641 00:34:22,120 --> 00:34:23,840 Speaker 1: that is more dubvish than what we've seen over the 642 00:34:23,920 --> 00:34:27,600 Speaker 1: last number of years, which would be hard not to do, right, Um, 643 00:34:27,719 --> 00:34:29,960 Speaker 1: you'd have to watch the currency and you'd have to watch. 644 00:34:30,680 --> 00:34:32,879 Speaker 1: There's only so hard. You're only so hawkish. You could 645 00:34:32,880 --> 00:34:34,879 Speaker 1: be watched the currency watch, the shape of the yield curve, 646 00:34:34,960 --> 00:34:37,840 Speaker 1: because the world hasn't changed simply because we elected a 647 00:34:37,880 --> 00:34:41,920 Speaker 1: new President's still a slow growth, benign inflation world. We 648 00:34:41,960 --> 00:34:44,040 Speaker 1: saw earnings come down from two point eight percent year 649 00:34:44,040 --> 00:34:45,839 Speaker 1: over year to two and a half percent year over year. 650 00:34:45,920 --> 00:34:48,920 Speaker 1: Labor force participation rates still, all of that hasn't changed. 651 00:34:49,120 --> 00:34:52,200 Speaker 1: Aging populations and parts of the world, slow productivity growth, 652 00:34:52,239 --> 00:34:55,360 Speaker 1: all of that hasn't changed. So even if you appoint 653 00:34:55,440 --> 00:34:58,600 Speaker 1: someone more hawkish than Jenny Yelling, the odds are it's 654 00:34:58,640 --> 00:35:01,040 Speaker 1: gonna be very difficult to be so nificant. You are 655 00:35:01,120 --> 00:35:04,319 Speaker 1: a charter member of the bond Vigilante Club. Are the 656 00:35:04,320 --> 00:35:08,400 Speaker 1: bond vigilantes and control here? I don't think quite yet? Um, 657 00:35:09,320 --> 00:35:11,879 Speaker 1: you know, so you know Bond. I think the bond 658 00:35:11,960 --> 00:35:16,960 Speaker 1: vigilantes will come out when you say, hey, we're going 659 00:35:17,000 --> 00:35:18,920 Speaker 1: to either issue way too much debt or we have 660 00:35:19,000 --> 00:35:22,400 Speaker 1: policies that are distinctly to tip point on that quickly. 661 00:35:23,400 --> 00:35:25,160 Speaker 1: I think it has to be. I think probably has 662 00:35:25,160 --> 00:35:28,279 Speaker 1: to be even over three, um, probably closer to all, 663 00:35:28,360 --> 00:35:31,239 Speaker 1: closer to four. Thank you so much. Ira Jersey, Brian 664 00:35:31,320 --> 00:35:42,120 Speaker 1: Levitt where us from their Openheimer Fun studio. Thanks for 665 00:35:42,200 --> 00:35:46,640 Speaker 1: listening to the Bloomberg Surveillance podcast. Subscribe and listen to 666 00:35:46,800 --> 00:35:51,920 Speaker 1: interviews on iTunes, SoundCloud, or whichever podcast platform you prefer. 667 00:35:52,640 --> 00:35:55,520 Speaker 1: I'm out on Twitter at Tom Keene. David Gura is 668 00:35:55,640 --> 00:35:59,440 Speaker 1: at David Gura. Before the podcast, you can always catch 669 00:35:59,480 --> 00:36:15,359 Speaker 1: us world line at Bloomberg Radio. Who you put your 670 00:36:15,360 --> 00:36:19,680 Speaker 1: trust in matters. Investors have put their trust in independent 671 00:36:19,719 --> 00:36:23,360 Speaker 1: registered investment advisors to the tune of four trillion dollars. 672 00:36:23,800 --> 00:36:30,480 Speaker 1: Why learn more and find your independent advisor dot com.