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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along

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Speaker 1: with Jonathan Ferrell and Lisa Brownwitz. Daily we bring you

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Speaker 1: insight from the best and economics, finance, investment, and international relations.

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Speaker 1: Find Bloomberg Surveillance on Apple Podcast, sun Cloud, Bloomberg dot com,

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Speaker 1: and of course on the Bloomberg terminal. We start strong

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Speaker 1: in this week of technology earnings. You do that with

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Speaker 1: a laureate from New York University, Berkeley, Stanford, Rochester, and

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Speaker 1: I think from Chicago as well. Paul Romer joins us.

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Speaker 1: Now we're thrilled to have him with us today on

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Speaker 1: technology and what it has done to us. Professor, I

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Speaker 1: want to go back to nine when you stop the

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Speaker 1: economics profession with human capital and growth, and then you

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Speaker 1: went on to the technology inside our system, the and

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Speaker 1: Dodge and this technological change. How do you look at

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Speaker 1: these four, five, six ginormous companies and what they have

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Speaker 1: indogenous lee done to us. Yeah, you know, it's a

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Speaker 1: very interesting story. Uh uh. The technology, the technological progress

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Speaker 1: has been enormous, better chips, better software, better devices. Um,

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Speaker 1: the the effect on society has been ambiguous. We've had

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Speaker 1: many good things, but also some some bad things. I

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Speaker 1: think that the bad things all traced back to this

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Speaker 1: pivotal decision by Google followed by Facebook to switch to

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Speaker 1: the advertising model, the targeted advertising model. This has had

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Speaker 1: all kinds of repercussions that we're now living with, like

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Speaker 1: another wave of the pandemic driven by vaccine hesitation that's

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Speaker 1: that's been fostered via social media. So we've combined enormous

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Speaker 1: technological progress with a really bad business model, and we're

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Speaker 1: paying the price. Should we break up these companies? And

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Speaker 1: to be narrow about it, if you can take Amazon

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Speaker 1: with cardboard boxes, the cloud and a burgeoning advertising business

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Speaker 1: as you mentioned, is it standard oil of New Jersey? Well,

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Speaker 1: you know, I think first I I worked on the

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Speaker 1: government side of the Microsoft case. I actually helped, you know,

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Speaker 1: design the proposed apps Ops breakup of Microsoft, which the

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Speaker 1: judiciary just rejected at the appeals court level. Um, I

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Speaker 1: think it's extremely unlikely that a judiciary that's even more

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Speaker 1: conservative now is going to approve a breakup of any

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Speaker 1: of these firms. I think we just have to be

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Speaker 1: realistic about that. So what I think we need to

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Speaker 1: do instead of focusing just on breakups or at least

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Speaker 1: government forced breakups. Is to change the incentives to get

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Speaker 1: them to shift away from this targeted advertising, surveillance spying

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Speaker 1: kind of model and to go back to the old

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Speaker 1: fashioned model where people pay to get things, so we

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Speaker 1: could use things like the tax code as I've suggested,

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Speaker 1: to create incentives for firms to stop relying so much

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Speaker 1: on advertising and to rely much more heavily on the

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Speaker 1: subscriptions the way Netflix does. Paul, is this tech dominance

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Speaker 1: related to the stickiness of the high unemployment rate, of

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Speaker 1: the stickiness of the low participation rate that was currently

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Speaker 1: seeing in the US labor market. Yeah, I don't think so. Um,

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Speaker 1: you know, reasonable people can differ, but I don't think

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Speaker 1: this is the problem. I think fundamentally, we've been in

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Speaker 1: for twenty years now in a mode where the Congress

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Speaker 1: wasn't able to do anything, so all of the work

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Speaker 1: fell on recovery, fell to the to the Fed. We

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Speaker 1: use very low interest rates is a way to try

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Speaker 1: and recover, but that meant that we ended up not

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Speaker 1: recovering fast enough and far enough, so that we've steadily

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Speaker 1: ratcheted down the key metric I think we should be watching,

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Speaker 1: which is the employment rate for four year olds So

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Speaker 1: what we need to do now and what we seem

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Speaker 1: to be headed towards now is something more like what

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Speaker 1: we saw under Reagan, which is a very aggressive loose

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Speaker 1: fiscal policy, stimulative fiscal policy, and has needed type monetary

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Speaker 1: policy to keep inflation and check. So I think that

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Speaker 1: we just have to recognize that it takes a long time,

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Speaker 1: it's a slow process to get people back into jobs.

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Speaker 1: We just got to keep pushing on this recovery long

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Speaker 1: enough to get back to where we should be, which

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Speaker 1: is with a lot more people who are employed. Paul,

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Speaker 1: I want to stay on this point for a minute,

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Speaker 1: because there's been a lot of question around how much

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Speaker 1: the un enhanced unemployment rates UH enhanced unemployment benefits I

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Speaker 1: should say, actually contributed to the stickiness of the participation

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Speaker 1: rate remaining so low. There have a number of studies

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Speaker 1: that have challenged that, other people saying that, look, the

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Speaker 1: ECONO of me has not gotten back on. You still

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Speaker 1: have people who childcare is still an issue. So what

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Speaker 1: is the main why behind the stickiness right now at

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Speaker 1: this point in the pandemic. Yeah, I mean, if you

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Speaker 1: look back at let's say, the recovery from the recession

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Speaker 1: in the early two thousands. Getting people back into jobs

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Speaker 1: is a slow process. It's very easy to kick people

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Speaker 1: out of jobs. That happens very fast, and then remaking

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Speaker 1: these matches between employers and employees just takes time. And

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Speaker 1: so we have to be realistic in our expectations about

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Speaker 1: how long that takes and maintain the conditions to keep

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Speaker 1: getting people back into those jobs for as for as

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Speaker 1: long as it will take, and it will take, you know,

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Speaker 1: I think many months UH to recover to the level

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Speaker 1: we need to be at. We just have to be

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Speaker 1: sure we don't give up too soon. There's just all

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Speaker 1: sorts of ways to go here in the limited time

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Speaker 1: we have left. I want you to talk about what

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Speaker 1: everybody in this pandems going through. And Greg Gillman Yale

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Speaker 1: University talks about it, the interiority of technology. How we're

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Speaker 1: all sitting in our bedrooms, are hunched over our computer

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Speaker 1: doing computer stuff and not being social. Is that the

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Speaker 1: ultimate risk to the United States? Are we going to

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Speaker 1: be as lonely as Tom Keane, John Farrow and Lisa Bramowitz? Yeah? Well,

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Speaker 1: you know that somebody told me that the new the

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Speaker 1: new acronym is UH is fogo, you know, instead of

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Speaker 1: fomo fear of missing out. Now it's fear of going out.

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Speaker 1: So I think we're all suffering a little bit from

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Speaker 1: this experience. But but I think there's a kind of

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Speaker 1: a realization which is coming, which is that these tech

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Speaker 1: companies have enormously have benefited enormously from our greater reliance

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Speaker 1: on them, and these tech companies are causing the problems

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Speaker 1: we're seeing with vaccine hesitancy. So I think there's a

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Speaker 1: backlash going against these firms. I don't think it's going

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Speaker 1: to show up through a breakup via anti trust. I

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Speaker 1: do think we're going to see legislation that range them in.

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Speaker 1: I mean, I think, folks, again, this is the book

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Speaker 1: The End of the Myth by Greg Grant and which

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Speaker 1: is just a fabulous Africa can't say enough about the

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Speaker 1: history of this, Professor Romer, is where we are right

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Speaker 1: now like maybe we were with the railroads in I'll

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Speaker 1: let you choose a technology. But this, this this bouncing

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Speaker 1: off of technology that we're all doing on a week

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Speaker 1: of technology earnings, is that where we are right now

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Speaker 1: as we've been before. Yeah, you know, I'm not sure

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Speaker 1: that there is a good historical um analog for what

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Speaker 1: we're what we're doing with right now. UM, there's a

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Speaker 1: very good story out in New York Times this morning

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Speaker 1: about disinformation for higher. These platforms have created weaponry which

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Speaker 1: is now available for the purchase for anybody who wants

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Speaker 1: to go out and create disinformation. UM. You know, there

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Speaker 1: are some echoes of the period of yellow journalism here,

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Speaker 1: but but the scale of this and the speed uh

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Speaker 1: that with which uh these new platforms of of propaganda

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Speaker 1: and disinformation can operate is something we've we've just never

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Speaker 1: never encountered before, and I think it's very frightened Paul.

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Speaker 1: Just to wrap this all together, I'm curious about whether

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Speaker 1: we could see some sort of China like moves in

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Speaker 1: the United States when it comes to regulatory crackdowns on

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Speaker 1: big tech, on control of data. And this is actually

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Speaker 1: something that surprised markets with respect to how ferocious some

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Speaker 1: of these moves and dramatic these moves have been over

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Speaker 1: in China. Is that a purely idiosyncratic move or does

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Speaker 1: this set the stage for the US to take similar

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Speaker 1: I'll be perhaps less dramatic moves. No, I think there's

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Speaker 1: a very close parallel. Everybody thinks about how different we

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Speaker 1: are from China, but in any ways, our circumstances are

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Speaker 1: very similar. We're on the verge of having platforms and

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Speaker 1: companies that are so powerful and so influential in the

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Speaker 1: political process that they're ungovernable, that they're beyond the rule

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Speaker 1: of law, that the state can't actually get them to

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Speaker 1: comply with the law. China has realized that this poses

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Speaker 1: an existential threat to governance and law, and they've decided

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Speaker 1: they have to stop it. We haven't gotten there yet

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Speaker 1: in the United States, and I hope we get there soon,

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Speaker 1: because the more influential of these platforms have propagain and

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Speaker 1: to become, the harder it will be for us to

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Speaker 1: reach a political consensus that we have to do something.

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Speaker 1: Professor Fantastic to get your views on this program pulled

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Speaker 1: rama the of n Yu, the Noval laureate and former

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Speaker 1: World Bank Chief economist. Let's get to Lori Cavassin or

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Speaker 1: obviously Capital Markets head of US Eculity Strategy, And Lori,

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Speaker 1: let's start right there. What are we learning so far

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Speaker 1: from the incoming Guarniggs. So look, I think this is

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Speaker 1: going to be the pivotal week. Right. It's crazy busy

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Speaker 1: with out well over a third of the S and

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Speaker 1: P and some of these including some of these big

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Speaker 1: tech behemoths. You know, I think what we're learning so

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Speaker 1: far is that the value side of the market, the

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Speaker 1: financials in particular, UM look like they're the weak link

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Speaker 1: at this point in time. So far, we've actually seen

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Speaker 1: some resilient in areas like technology and growth revisions generally,

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Speaker 1: while we really just continue to see continued slippage on

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Speaker 1: the financial side. So I really want to see this

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Speaker 1: week if we're going to get conference confirmation of that trend,

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Speaker 1: if you're going to maintain that tech resiliency UM. Look,

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Speaker 1: I think in terms of other things that we are learning,

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Speaker 1: you know, one of the fascinating stats over the past

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Speaker 1: week that I saw was that bottom up sm p

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Speaker 1: EPs moved up a couple of bucks, but two stayed flat,

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Speaker 1: and so the growth rate for next year came down

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Speaker 1: a little bit. UM. I want to see if we're

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Speaker 1: really going to continue to see that enthusiasm build on

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Speaker 1: next year. If not, I think we interpret it as

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Speaker 1: sort of a continued slippage and earning sentiment. We're seeing

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Speaker 1: other things that suggest that that's happening as well. Despite

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Speaker 1: some of these really strong beats that we're getting. Do

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Speaker 1: you think downgrade risk is starting to build? Hey, Laurie

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Speaker 1: looking ahead to next year? I think I think so.

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Speaker 1: I mean, I think the you know, I think the

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Speaker 1: issue right, it's it's a question of the rate of

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Speaker 1: change versus the dollar level, and that rate of change

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Speaker 1: we have very clearly seen for two starting to slip

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Speaker 1: just a teeny tiny bit. Now, the tech companies could

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Speaker 1: cause that to reverse, but what we've basically got now

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Speaker 1: is peak upward revision. So if you look back in June,

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Speaker 1: the rate of upward revisions in the SMP five hundred

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Speaker 1: was seventy eight percent, and so far in July that

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Speaker 1: has slipped to seventy four percent. So what you have

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Speaker 1: first is a deceleration of upward revisions. You just get

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Speaker 1: fewer and fewer of them, and then it eventually translates

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Speaker 1: into downward revisions. And those downward revisions may take a

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Speaker 1: little bit of time to come, but it does look

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Speaker 1: to me that we're already in that decelerating upward revision pace,

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Speaker 1: and about half the sectors are contributing to that right now.

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Speaker 1: Floria two part question where the one part answer, and

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Speaker 1: it's the idea that could stocks rise amid slow growth

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Speaker 1: rates come in, really yields come crashing down, and yet

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Speaker 1: we're supposed to believe that equities rise. And I combine

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Speaker 1: that with a wonderful Jeffrey de graph over Rand Signs

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Speaker 1: who says, look, you can't have momentum unless you have breadths,

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Speaker 1: which is it right now momentum or we need rebuilding breadth.

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Speaker 1: So look, I would say the composition of the market

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Speaker 1: is very, very different than it's been in the past,

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Speaker 1: and it depends on what causes that chopping nous. Right now,

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Speaker 1: we've got a market that's concerned about slower growth, not

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Speaker 1: an outright recession, and so that's feeding these secular growth trades.

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Speaker 1: It's feeding the tech trade, and the overwhelming market cap

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Speaker 1: bias right now is towards that growth and tech sector.

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Speaker 1: The T I M T space out weighs the cyclicals,

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Speaker 1: and that's not normally the case in the SMP five hundred.

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Speaker 1: If you were to see an outright growth scare where

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Speaker 1: really something more nefarious has begun to be anticipated and

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Speaker 1: the market wants to flip out of secular growth and

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Speaker 1: into defensive that will drag the market down. But while

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Speaker 1: we're in sort of this purgatory of slowing growth. That's

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Speaker 1: not that bad. You could actually see the market continue

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Speaker 1: to creep up just because of the composition of the

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Speaker 1: market cap right now, So let's talk about the composition

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Speaker 1: and the idea that growth. You're seeing more earnings for

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Speaker 1: visions upwards, that they are stronger in the growth stocks

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Speaker 1: than you're seeing even in value. Despite the fact that

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Speaker 1: you're seeing this potential rotation, what does this mean to you?

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Speaker 1: So you know, one thing I've noticed on the value side,

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Speaker 1: and we make you when we make the case that

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Speaker 1: sort of the cyclicals are dragging down the revision ratios.

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Speaker 1: It's actually only part of the cyclicals. It's the financials.

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Speaker 1: The energy companies have still been decently strong, the materials

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Speaker 1: companies have still been decently strong. Um. You know, for

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Speaker 1: us to really say there's a massive problem on that

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Speaker 1: cyclical trade, we'd probably need to see the energy of

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Speaker 1: material sectors start to falter a bit in the industrials

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Speaker 1: as well. We're not seeing that yet, but it's clearly

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Speaker 1: something we've got to keep an eye on. Laurie, great

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Speaker 1: to catch up with you on a massive week ahead.

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Speaker 1: Going to see you again, Lori Cavastine or obviously Capital

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Speaker 1: Markets head of US Security Strategy Laurie mentioning the composition

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Speaker 1: of this market heavily weighted towards big tech for the

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Speaker 1: United States. Lloyd Minor joins US now to say sus

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Speaker 1: Stanford University and their School of Medicine. Dean barely describes

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Speaker 1: his original research in medicine, and also his academics were

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Speaker 1: thrilled to Dr Miner could join US today. Dr Minor,

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Speaker 1: a federal judge stood up last week and said Indiana

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Speaker 1: University can force people in some way to get vaccinated.

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Speaker 1: I know it's Stanford. You have a sterling record. I

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Speaker 1: believe it's two hundred and fifty seven illnesses, which is

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Speaker 1: remarkable given the size of Palo Alto. But what is

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Speaker 1: your policy? Are you heading towards where Indiana is? Good morning, Tom,

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Speaker 1: It's good to be with you. We do have a

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Speaker 1: policy requiring vaccination for all healthcare workers and also for

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Speaker 1: students at Stanford. There are provisions for people to apply

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Speaker 1: for exemptions UH based upon medical or religious reasons, but

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Speaker 1: we strongly encourage people to be vaccinated, and we're seeing

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Speaker 1: a very high number of people in our system who vaccine.

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Speaker 1: That's right where I wanted to go if you have

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Speaker 1: that policy from someone of your reputer frankly Indiana University

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Speaker 1: as well. Do you see action on the part of

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Speaker 1: the unvaccinated, Yes, we do, roughly of people in our

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Speaker 1: health care delivery system today or vaccinated. Uh, that number

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Speaker 1: may be larger. We're still collecting the data, and that

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Speaker 1: it continues to increase every day. I think vaccine hesitancy

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Speaker 1: is coming down. We're seeing just how effective these vaccines are,

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Speaker 1: and of course, with the emergence of the delta variant,

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Speaker 1: vaccination is even more important. Dr Minor Our our colleague

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Speaker 1: John Farroll pointed to a headline this morning out of

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Speaker 1: Reuter's an exclusive report by them saying the US will

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Speaker 1: not lift travel restrictions citing this delta variant, saying it

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Speaker 1: is too early. Does this make sense from your perspective

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Speaker 1: base on the science, It's always hard to know when

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Speaker 1: to impose restrictions on the mobility of people or the

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Speaker 1: active at dese of people. Certainly, the delta variant is

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Speaker 1: more transmissible, but we do know that the vaccines are

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Speaker 1: highly effective at preventing severe disease from the delta variant.

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Speaker 1: You know, over the past several weeks. Over of the

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Speaker 1: deaths in the United States from COVID nineteen have been

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Speaker 1: an unvaccinated people, So while there is still a risk

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Speaker 1: of infection in people who are vaccinated, the disease is

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Speaker 1: typically much less now. Also, we know that masking and

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Speaker 1: observing social distancing are effective measures as well. I think

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Speaker 1: the decision of when to impose a travel restriction is

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Speaker 1: one of the most difficult decisions our government leaders can make.

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Speaker 1: I think the more we can do to keep track

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Speaker 1: of the pandemic, where it's spreading, where it's receding, will

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Speaker 1: help to inform those decisions. A very diplomatic answer, Dr Minor,

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Speaker 1: there is a question also going forward of what we

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Speaker 1: ought to be tracking in order to understand that we

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Speaker 1: can open up our borders. We can open up some

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Speaker 1: of these restrictions in full and a comprehensive and frankly

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Speaker 1: united way. Is it fair. Is there a threshold of

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Speaker 1: hospitalizations or death rates that we can look to to

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Speaker 1: signal that perhaps we have the all clear and can

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Speaker 1: go back to life as normal. I think you point

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Speaker 1: out the critical UH point to monitor, and that is hospitalizations.

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Speaker 1: We know that what happened early in the pandemic the

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Speaker 1: tragedy in New York in April and May of last

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Speaker 1: year that was related to the healthcare delivery systems becoming overwhelmed.

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Speaker 1: Not enough hospital beds, not enough fentilators, in some cases,

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Speaker 1: not enough oxygen. We can't allow that to happen again.

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Speaker 1: We're going to continue to see mild to moderate illness

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Speaker 1: for weeks months ahead because this pandemic, the virus continues

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Speaker 1: to mutate, their more transmissible forms that emerge, So it's

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Speaker 1: gonna be a long We're gonna be living with COVID

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Speaker 1: for a long time. But we have to make sure

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Speaker 1: that we don't overwhelm healthcare delivery systems. When I look

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Speaker 1: at the I look Dr Minor at a nation is

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Speaker 1: Tokville talked about, which is an intellectual anti science and

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Speaker 1: I know every other nation has the same challenges as well.

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Speaker 1: Stanford is one of our resources of science. And I

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Speaker 1: mean that in a philosophy sense. How do we shift

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Speaker 1: this philosophy in America? Well, I think there's a big

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Speaker 1: responsibility for those of us who are in science and

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Speaker 1: medicine to be better communicators, and we have been in

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Speaker 1: the past. When we don't know something, we need to

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Speaker 1: say that we don't know it. We also need to

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Speaker 1: help people understand what the process of gaining evidence is.

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Speaker 1: You know, no one, I think to your very few

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Speaker 1: people two years ago would have predicted that something like

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Speaker 1: COVID nineteen would happen in our time, and it did.

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Speaker 1: And we're still learning about rates of transmission, how the

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Speaker 1: virus changes over time, and what can be done to

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Speaker 1: prevent it spread. We do know, however, that the vaccine

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Speaker 1: that have been developed and given f DA Emergency use

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Speaker 1: authorization United States are among the most safe and effective

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Speaker 1: vaccines ever to be deployed. We have to leave it there,

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Speaker 1: Dr Minor, Thank you so much. Lloyd Minor with an update,

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Speaker 1: an important update from Stanford University. Let's get to Michael

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Speaker 1: Kushmachawe with more Can Stanley, c IO of Global Fixed

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Speaker 1: Income My cold. Part of the beauty of these conversations

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Speaker 1: we have on this program sometimes is to get the

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Speaker 1: more can Stanley view and compare and contrast that with

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Speaker 1: another outfit. So let's talk about Goldman. Here's the quote.

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Speaker 1: In the near term, a complete service sector recovery will

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Speaker 1: likely require fully overcoming virus fares and returning to office

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Speaker 1: work patterns. Both now appear likely to take longer than

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Speaker 1: we anticipated. Goldman go on to deliver a one percentage

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Speaker 1: point downgrade to GDP growth forecast for Q three and

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Speaker 1: Q four. What's the more can Stanley view at the moment, well,

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Speaker 1: our our view in investment management is that a slowdown

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Speaker 1: of some degree is not necessar severally a terrible thing

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Speaker 1: for the economy as a whole, and that we were

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Speaker 1: growing very, very fast, you know, with almost double digit

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Speaker 1: paste in the middle of this year, and it obviously

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Speaker 1: we can't sustain that. And there's large inflationary pressures which

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Speaker 1: are making it difficult to discern the underlying trends and

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Speaker 1: inflation in terms of how much is temporary, how much

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Speaker 1: is permanent or inflationary, raising inflation expectations, So modest down

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Speaker 1: down down grades and growth a little bit longer time

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Speaker 1: frame in terms of getting back to normal because of

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Speaker 1: the rise of the delta variant, and more uncertainty as

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Speaker 1: to how people are going to behave with this greater uncertainty,

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Speaker 1: the unwillingness to increase vaccinations um and meaningfully in the

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Speaker 1: in the near term. All presage that that what what

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Speaker 1: was seen in terms of a downgrade in growth expectations

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Speaker 1: in the bond market, with yields falling significantly from where

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Speaker 1: they were at the end of Q one micro cust

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Speaker 1: from this morning. Just to get math, John insisted I

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Speaker 1: do some math just to shut me up, and and

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Speaker 1: and Michael, I did a twenty year regression of the

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Speaker 1: five year real yield. I'm sorry. We have been in

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Speaker 1: a trend of inflation adjusting ever, ever, ever lower. How

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Speaker 1: do we break the trend? That's absolutely true. It's but

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Speaker 1: a combination of of design policy to bring inflation down

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Speaker 1: over the forty years. I remember Alan Blinder, when he

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Speaker 1: was Vice chairman of the FED, talked about opportunistic disinflation

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Speaker 1: as a way to bring down inflation in the I

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Speaker 1: think they've exceeded beyond their wildest dreams. But there's also

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Speaker 1: been the underlying secular stagnation hypothesis of falling the secular

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Speaker 1: dynamics of economies bringing down that rate as well. I

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Speaker 1: think what has to happen is that the FED has

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Speaker 1: to has to commit to trying to raise inflation by

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Speaker 1: keeping monetary policy easy when things are good. This is

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Speaker 1: the opposite of opportunistic disinflation mean opportunistic inflation, which means

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Speaker 1: that as the economies do better, we don't respond to it,

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Speaker 1: just as the over responded in the previous periods. But

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Speaker 1: most importantly is that a policy error occurred in the

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Speaker 1: tooth us in fifteen to two thousand eighteen period. Inflation

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Speaker 1: expectations collapsed, and we need to get at least back

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Speaker 1: to where he works in the two thousand twelve two

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Speaker 1: thirteen levels, which were slowly getting back to. But the

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Speaker 1: bet is will be a challenge with inflation as high

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Speaker 1: as it is today to convince markets they will not

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Speaker 1: revert back to any kind of behavior they had prior

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Speaker 1: to this some pandemic Michael faith and how much the

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Speaker 1: Fed is willing to allow this economy to run hot.

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Speaker 1: Another way of looking at this is can real yields

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Speaker 1: go more negative? They're already all time lows UH this

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Speaker 1: morning as people look at inflation picking up, supply chain

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Speaker 1: issues not abating, labor shortages not abating, and a FED

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Speaker 1: continuing to be devish and pointing to the delta variant,

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Speaker 1: is this a trend that has more steam? Can we

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Speaker 1: see two percent negative real yields? I think you can

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Speaker 1: if if they remain committed they will not change a

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Speaker 1: monetary policy. You think about the mathematics of a ten

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Speaker 1: year bond yield, It's an accumulation of of of one

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Speaker 1: year yields one year, this year, one year, next year,

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Speaker 1: one year every they're going forward. So the longer they

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Speaker 1: procrastinate or not raise interest rates, the more eat the

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Speaker 1: more downward pressure there is on long term rates. Today.

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Speaker 1: You know, we estimate that if they fed um one

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Speaker 1: point six tenure rate would be fair value. If the

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Speaker 1: FED did what they said they were going to, you know,

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Speaker 1: raise rates to the end of two thousand twenty three,

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Speaker 1: If in fact they procrastinate further, where yields are today

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Speaker 1: are not unreasonable. I'm considering if they procrastinated four to

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Speaker 1: to raising interest rates. So the more they push out

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Speaker 1: with forward guidance and when they're going to and how

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Speaker 1: fast they're going to raise rates, the more heels can

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Speaker 1: stay low and inflation is still high, real yields can

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Speaker 1: continue to remain very low. Can they move a lot lower?

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Speaker 1: I'm not sure about that, because I think inflation is

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Speaker 1: going to peak in the next couple of quarters. Michael

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Speaker 1: Kushkin Stanley is gonna catch up set as always the

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Speaker 1: CEI of global fixed income. This is the Bloomberg Surveillance Podcast.

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Speaker 1: Thanks for listening. Join us live week days from seven

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Speaker 1: to two AMI Eastern. I'm Boomberg Radio, and on Bloomberg

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Speaker 1: from the best in economics, finance, investment, and international relations.

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Speaker 1: And subscribe to the Surveillance podcast on Apple podcast, SoundCloud,

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Speaker 1: Bloomberg dot com, and of course, on the terminal. I'm

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Speaker 1: Tom Keene, and this is Bloomberg