WEBVTT - Inflation Readings and Trump's Putin Call 0:00:00.080 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.840 --> 0:00:17.920 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:22.000 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.360 --> 0:00:25.680 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:27.040 us live on YouTube. 0:00:27.240 --> 0:00:31.920 There's two kinds of charts technical analysis. First, like literally 0:00:31.960 --> 0:00:35.120 the second day I'm at Bloomberg, Peter has me in 0:00:35.159 --> 0:00:37.680 the office and he says, tell me about technical analysis 0:00:37.720 --> 0:00:41.120 because he thinks it's voodoo and smoke and mirrors. There's 0:00:41.120 --> 0:00:43.600 two types. There's trend based, which is what I do, 0:00:44.080 --> 0:00:47.760 and then there's more momentum stubcastics, the dynamics of the 0:00:47.800 --> 0:00:50.879 immediate market. Jeff de Graph and I promise we're going 0:00:50.920 --> 0:00:54.040 to do more to graph this twenty twenty five. Jeff 0:00:54.080 --> 0:00:57.880 de Graph own this at Lehman Brothers years ago. He's 0:00:57.920 --> 0:01:01.440 now technical research co founder Renaissance Macro. And this is 0:01:01.480 --> 0:01:06.880 well timed because yesterday on the Scott Wapner Marathon at 0:01:06.880 --> 0:01:09.240 the Death Star, I mean Wapner's on for like six 0:01:09.319 --> 0:01:13.040 hours straight. There's somebody on the show going after Jeff 0:01:13.080 --> 0:01:16.679 de Graf. Believe on exuberance, So folks for Global Wall 0:01:16.720 --> 0:01:21.320 Street Degraph has the exuberance meter in hand. Jeff, I 0:01:21.680 --> 0:01:24.800 was I was amazed yesterday how Wapner had to defend 0:01:24.840 --> 0:01:27.720 you on the Death Star, Jeff de Grath. Are we 0:01:27.920 --> 0:01:30.240 overly exuberant right now? 0:01:31.920 --> 0:01:34.720 I don't think so, Tom, and I do appreciate Scott 0:01:35.040 --> 0:01:36.440 sticking up for us. I'll have to send him a 0:01:36.440 --> 0:01:38.120 bottle of wine at Christmas. 0:01:38.520 --> 0:01:41.039 Give him some of the empty twenty Wapner deserves an 0:01:41.120 --> 0:01:44.640 MD twenty twenty, give him that. Are we overly exuberant? 0:01:45.800 --> 0:01:45.880 So? 0:01:46.440 --> 0:01:50.040 I don't think so? And let me explain why we 0:01:50.080 --> 0:01:53.440 measure the spread between high momentum names and low momentum names. 0:01:53.440 --> 0:01:56.320 And it's really nothing more, you know, complicated than saying 0:01:56.680 --> 0:01:59.840 what you know, if we rank names over the last year, 0:02:00.280 --> 0:02:02.280 what names are at the top twenty percent, what names 0:02:02.320 --> 0:02:04.160 are at bottom twenty percent? And then how are those 0:02:04.160 --> 0:02:07.320 two buckets doing? And when we look at the sixty 0:02:07.360 --> 0:02:10.000 five day rolling return of that spread, which I know 0:02:10.160 --> 0:02:13.000 this is a snoozer, but right now it's at the 0:02:13.080 --> 0:02:16.600 eighty second percentile, when it gets to the ninetieth percentile, 0:02:16.639 --> 0:02:19.000 and we play momentum, we just like you, we play trend. 0:02:19.000 --> 0:02:21.160 We believe in those things because that's the right thing 0:02:21.160 --> 0:02:23.520 to do. Through time, we can tell you that when 0:02:23.520 --> 0:02:26.240 it gets to the plus ninetieth percentile, we'll take a 0:02:26.240 --> 0:02:28.880 step back and say, look, too many people are playing 0:02:28.960 --> 0:02:31.080 this and this is way too dangerous for a reversion. 0:02:31.520 --> 0:02:33.640 And so while you know, there are a few anecdotes 0:02:33.639 --> 0:02:36.639 that got thrown out there with the Metas and the 0:02:36.680 --> 0:02:39.720 Plantas and et cetera, but you know, those are anecdotes, 0:02:39.720 --> 0:02:41.360 and when we really look at the meat of it, 0:02:41.400 --> 0:02:43.239 even just the top one hundred names and the Russell 0:02:43.280 --> 0:02:47.600 one thousand, we're not in that ninetieth percentile. And why 0:02:47.639 --> 0:02:50.480 that's important, Tome is the risk is that you say, okay, 0:02:50.480 --> 0:02:52.480 it's over bottom, going to sell them today, and the 0:02:52.520 --> 0:02:54.320 next thing you know, your app love and is up 0:02:54.400 --> 0:02:56.880 thirty percent. And you know we all know this. The 0:02:56.919 --> 0:02:59.920 market generally can be so seductive that it brings you 0:03:00.040 --> 0:03:02.440 back in it's exactly the wrong time. So to be 0:03:02.600 --> 0:03:05.960 too early to fade the momentum trade really is dangerous 0:03:06.000 --> 0:03:09.040 and requires a lot of mental fortitude, if you will, 0:03:09.080 --> 0:03:10.360 and I don't think most people have that. 0:03:10.480 --> 0:03:12.880 Jeff, I did everything I could to be sure Damien 0:03:13.000 --> 0:03:14.440 Sasso is with me today. 0:03:14.800 --> 0:03:18.160 Damien, Jeff, I mean Tom mentioned it early. You weret 0:03:18.200 --> 0:03:20.160 Lehman Brothers from ninety eight to two thousand and seven, 0:03:20.560 --> 0:03:23.520 and I'm sure you remember that a young aspiring emerging 0:03:23.520 --> 0:03:26.119 market strategist came into your office in two thousand and two. 0:03:26.600 --> 0:03:28.560 His name was Damien, by the way, and he didn't 0:03:28.560 --> 0:03:31.080 ask about oscillators. He didn't ask about bowl in your bands. 0:03:31.120 --> 0:03:33.600 He was asking about the Ichimoku cloud. I mean, do 0:03:33.639 --> 0:03:36.360 you remember this conversation. Probably not, but here's my question 0:03:36.400 --> 0:03:37.880 for you. You look at performance here to date, and 0:03:37.880 --> 0:03:40.360 you're absolutely right. Equity momentum is the leader. It's of 0:03:40.440 --> 0:03:41.960 something on the order of four percent year to date. 0:03:42.160 --> 0:03:45.280 Trend trend is sucking wind here. Talk to us about 0:03:45.280 --> 0:03:48.360 he's trend following saturagy strategies. Talk to us about that 0:03:48.480 --> 0:03:51.520 nice upward sloping risk adjusted return that you're supposed to 0:03:51.520 --> 0:03:53.840 get from trend and why the strategy is not delivering. 0:03:55.520 --> 0:03:57.680 Well, it's a fair point, and look, it's not going 0:03:57.720 --> 0:03:59.200 to deliver all the time, and so we have to 0:03:59.200 --> 0:04:01.840 be careful of that. And I do remember because there 0:04:01.880 --> 0:04:04.200 aren't many people that talk about those clouds, which I 0:04:04.200 --> 0:04:06.920 can't even pronounce, so I won't try, so you did 0:04:07.040 --> 0:04:08.800 hit the nail on the head when they say be unique, 0:04:08.800 --> 0:04:14.400 be unique, that certainly was it. I'm looking for the 0:04:14.440 --> 0:04:16.720 technical analysis dictionary trying to look up what the heck 0:04:16.760 --> 0:04:22.680 you were talking about. The bottom line is trends work, 0:04:22.680 --> 0:04:25.400 and we actually are seeing trends intra market work, right. 0:04:25.440 --> 0:04:27.680 In other words, we're seeing trends within the sector's work, 0:04:27.680 --> 0:04:30.599 we're seeing trends within the industry group's work, we're seeing 0:04:30.600 --> 0:04:36.039 trends within the actual stocks work. The difference is what 0:04:36.160 --> 0:04:38.200 we have today is more of a trend market than 0:04:38.200 --> 0:04:40.800 a momentum market. And what I mean by that is, 0:04:40.839 --> 0:04:43.000 even though we're within what less than two percent of 0:04:43.000 --> 0:04:45.560 a new high, we have less than fifty percent of 0:04:45.600 --> 0:04:47.880 the names within the S and P five hundred above 0:04:47.920 --> 0:04:50.800 their own twenty day moving average. Now that's not a 0:04:50.839 --> 0:04:53.600 high bar, right. The twenty day moving averages is obviously 0:04:53.680 --> 0:04:56.279 just the average over the last month. So it really 0:04:56.360 --> 0:04:58.840 is this rotational market that we're seeing. And that's why 0:04:58.880 --> 0:05:01.320 I think it's so frustrating for people that we've got 0:05:01.400 --> 0:05:03.599 the market very close to a new high and yet 0:05:03.960 --> 0:05:05.840 fifty percent or only half the names are above their 0:05:05.839 --> 0:05:08.240 own twenty day moving average. And that gets really frustrating 0:05:08.279 --> 0:05:11.080 for portfolio managers. It is though at the same time 0:05:11.680 --> 0:05:14.200 a very good market for long short I mean that 0:05:14.200 --> 0:05:16.320 that is kind of the definition of what you want, 0:05:16.400 --> 0:05:19.559 which is I have the ability to add value through 0:05:19.800 --> 0:05:21.560 what I'm seeing on a long short basis. 0:05:22.080 --> 0:05:24.560 Pro tip here and this of course part of Jeff 0:05:24.560 --> 0:05:27.919 degraph I studied the clouds years ago. I had like 0:05:27.960 --> 0:05:31.400 a two week looking at Ken Jusen and Sengku span A, 0:05:32.040 --> 0:05:34.560 and I just said, I don't get it. And folks, 0:05:34.600 --> 0:05:37.000 one of the big advantages of the Bloomberg is you 0:05:37.040 --> 0:05:42.960 can study the different technical theories to decide critically what 0:05:43.000 --> 0:05:45.600 you do like and as far more important as Jeff 0:05:45.600 --> 0:05:48.680 knows what you don't like as well. I went down 0:05:48.680 --> 0:05:49.400 at flames on the. 0:05:49.400 --> 0:05:52.039 Air and you get back test them BTST on the terminal. Guys, 0:05:52.040 --> 0:05:52.840 you have to check it out. 0:05:52.839 --> 0:05:56.080 But you know, a NDMAC weekly Survival. 0:05:55.520 --> 0:05:57.760 Guide is must read. It is a must read for 0:05:57.800 --> 0:05:59.800 anybody in the financial markets. And that is all you 0:06:00.080 --> 0:06:00.480 up the graft. 0:06:00.480 --> 0:06:02.720 Talk to us about what's going on with copper, I. 0:06:02.680 --> 0:06:06.160 Mean copper hangsaying correlations over bought in a week trend. 0:06:06.200 --> 0:06:08.279 I mean I'm catching this it's up eight percent year today. 0:06:08.520 --> 0:06:09.400 What is going on. 0:06:09.360 --> 0:06:13.560 Copper, Well, it certainly is has started to fire up, 0:06:13.560 --> 0:06:16.680 and that's reassuring because we are seeing some signs in 0:06:16.880 --> 0:06:19.240 you know, the overall market that the cyclical part of 0:06:19.240 --> 0:06:21.400 the market is coming under pressure. So getting a little 0:06:21.400 --> 0:06:23.359 bit of a boost out of copper is certainly helpful 0:06:23.680 --> 0:06:25.360 and you hit the nail on the head at least 0:06:25.360 --> 0:06:29.440 in our opinion, which is we think, and we've been 0:06:29.440 --> 0:06:31.520 in this camp for probably six or nine months now, 0:06:32.400 --> 0:06:34.920 that China is in the bottoming process. We had trend 0:06:35.040 --> 0:06:38.479 change last year, we had a momentum surge, and there's 0:06:38.520 --> 0:06:42.640 a very good relationship there between the price of copper 0:06:42.839 --> 0:06:46.560 and both the Hangsang and the Shanghai three hundred. So, 0:06:47.480 --> 0:06:50.720 you know, really our biggest most bullish call, and we've 0:06:50.760 --> 0:06:53.040 said this and i'll say it here, we think China 0:06:53.160 --> 0:06:56.320 is in the eighth nine stage where the US was. 0:06:56.520 --> 0:07:00.839 We think that it is in that moment that you had. 0:07:01.480 --> 0:07:03.640 One of the things that we measure is alpha through time, 0:07:03.680 --> 0:07:05.040 and you can do this with markets, you can do 0:07:05.080 --> 0:07:07.200 it with sectors. You can't do it with stocks, or 0:07:07.279 --> 0:07:08.520 you can, but it's not going to give you any 0:07:08.520 --> 0:07:14.920 information the alpha generation in Asia, particularly Hong Kong, the 0:07:14.960 --> 0:07:18.080 negative alpha generation was as extreme as anything we'd seen 0:07:18.120 --> 0:07:21.160 in forty years. And unless you think that that is 0:07:21.200 --> 0:07:22.920 just going to evaporate and they're no longer going to 0:07:22.920 --> 0:07:26.960 be a global player, that just isn't sustainable. And so 0:07:27.480 --> 0:07:29.920 that can be early and we certainly recognized that. But 0:07:29.960 --> 0:07:33.440 it was the momentum and the trend change that really said, hey, 0:07:33.440 --> 0:07:35.880 these two things combined are pretty powerful. And I think 0:07:35.880 --> 0:07:38.040 that's the residual of what you're seeing Copper for all. 0:07:37.920 --> 0:07:41.080 Of you acrassination in your morning commute, particularly for Global 0:07:41.240 --> 0:07:44.840 Wall Street on YouTube, Subscribe to Bloomberg Podcast. It's our 0:07:44.920 --> 0:07:47.880 new television. Thrilled with what we see on YouTube. Jeffrey 0:07:47.920 --> 0:07:51.040 de Graph with us for an extended conversation here from 0:07:51.080 --> 0:07:54.239 Runmack as we look at technicals and fold that into 0:07:54.360 --> 0:07:58.520 just as much not losing money is making money, Jeff 0:07:58.520 --> 0:08:00.520 to Graph. The big change here going back to the 0:08:00.560 --> 0:08:03.640 fossil tum I think a chart craft up in Larchmond 0:08:03.760 --> 0:08:07.320 and Wells Wilder and ADXDMI and all the trend based 0:08:07.360 --> 0:08:10.800 stuff to Damian Lehman years ago with you with you 0:08:10.880 --> 0:08:14.360 at Marilyn Lehman Jeff to graph. What's so different now 0:08:14.440 --> 0:08:19.440 is the financial media, and there's this frenzy, particularly on Fridays, 0:08:20.120 --> 0:08:25.360 of trying to market time by not participating in the market. Basically, 0:08:25.640 --> 0:08:29.320 it's one big media frenzy, go to cash. How should 0:08:29.320 --> 0:08:34.320 our listeners and viewers use your skills to participate in 0:08:34.360 --> 0:08:36.840 the market even if they're hit with a frenzy. 0:08:38.360 --> 0:08:40.839 Well, that's a really really good point, Tom, and I 0:08:40.920 --> 0:08:44.200 mean this gets very philosophical, but let's start with the 0:08:44.240 --> 0:08:46.240 buy and hold right or at twelve let's just say 0:08:46.240 --> 0:08:48.800 a twelve month time horizon, even a six month time horizon. 0:08:49.320 --> 0:08:51.520 Your probability over the last one hundred years of having 0:08:51.559 --> 0:08:54.120 a positive return over six or twelve month time horizon 0:08:54.160 --> 0:08:57.040 is above sixty percent. It's right around sixty five percent, frankly, 0:08:57.040 --> 0:08:59.040 So let's call it two thirds of the time. So 0:08:59.120 --> 0:09:01.439 if you think about that, you know, if you had 0:09:01.440 --> 0:09:04.040 a coin and you flip that coin and you had 0:09:04.040 --> 0:09:06.440 that advantage of being right two thirds of the time, 0:09:06.840 --> 0:09:09.120 you're gonna win a lot of money. Right, So there's 0:09:09.160 --> 0:09:11.160 an extraordinarily high bar, and I think this is what 0:09:11.160 --> 0:09:15.280 people miss. There's an extraordinarily high bar to be bearish, right, 0:09:15.480 --> 0:09:18.920 Just your default position should be bullish. And as I 0:09:18.960 --> 0:09:21.360 always you know, quip when people ask me, you know, 0:09:21.480 --> 0:09:22.959 how am I thinking about the world, I'm like, I'm 0:09:22.960 --> 0:09:24.960 a fully invested bear. That's the way I think about 0:09:24.960 --> 0:09:27.360 the world. I'm always looking over my shoulder. But I 0:09:27.440 --> 0:09:30.000 know that the default position should be bullish. That's not 0:09:30.040 --> 0:09:33.440 to say we're always bullish, because we're not. But again, 0:09:33.600 --> 0:09:36.600 the bar is so high to be bearish, and I 0:09:36.600 --> 0:09:39.040 think that's what people need to recognize. And one of 0:09:39.080 --> 0:09:40.920 the ways that we do that is through trend following, 0:09:41.080 --> 0:09:43.480 and we just say, look, if the trends are not 0:09:43.600 --> 0:09:47.440 on our side, then we have cleared that bar, at 0:09:47.520 --> 0:09:49.120 least one portion of that bar that we need to 0:09:49.160 --> 0:09:51.040 think about. And certainly we think about the FED, we 0:09:51.080 --> 0:09:54.160 think about money supply, we think about some other things, valuation, 0:09:54.840 --> 0:09:58.400 All those things are important in that mixture, but really 0:09:58.440 --> 0:10:00.640 the one that stands out to us spend the most 0:10:00.679 --> 0:10:04.200 consistent through time, because you know, the circumstances change as 0:10:04.200 --> 0:10:07.520 to why there's a bear market. The market itself does not. 0:10:07.720 --> 0:10:09.280 The market will tell you that it's in a bear 0:10:09.400 --> 0:10:11.840 market simply by the trend, and so that ends up 0:10:11.840 --> 0:10:14.160 being our kind of final arbiter if you will, of 0:10:14.840 --> 0:10:15.559 our market. 0:10:15.320 --> 0:10:17.720 Calls, Jeff, you know, a lot of strategist myself included, 0:10:17.760 --> 0:10:20.600 we kind of make that mistake of equating technical analysis 0:10:20.679 --> 0:10:22.720 really with the equity market. But let's be clear, a 0:10:22.760 --> 0:10:26.319 lot of other markets, specifically rates and FX trade on technicals, 0:10:26.320 --> 0:10:28.160 you know, talk to us about those markets or your 0:10:28.240 --> 0:10:31.960 indicators picking up movement, picking up direction, and for example 0:10:32.080 --> 0:10:33.240 the US treasury market. 0:10:35.040 --> 0:10:37.120 Yeah, that one's a tough one. I mean, I will 0:10:37.120 --> 0:10:40.160 say we've been both Neil Dutta, who's our economists in 0:10:40.160 --> 0:10:42.520 our shop, and myself, we've been more optimistic on You 0:10:43.720 --> 0:10:48.640 don't tell him that we've been more optimistic on bonds 0:10:48.679 --> 0:10:52.480 frankly than you know then what the outcome has been. 0:10:52.640 --> 0:10:55.160 And part of that is because the trend has been mixed, 0:10:55.160 --> 0:10:57.640 and our underlying data says, look, even though we had 0:10:57.640 --> 0:11:00.839 this inflation print, it looks to us if we look 0:11:00.880 --> 0:11:04.440 at the really key root causes of inflation historically and 0:11:04.520 --> 0:11:06.600 where we are with a FED fund, a two year yield, 0:11:06.679 --> 0:11:09.240 and a bunch of other factors, it says to us 0:11:09.280 --> 0:11:11.520 that bonds are actually probably a pretty decent buy right 0:11:11.559 --> 0:11:13.640 here if we're to look at it out the next 0:11:13.720 --> 0:11:16.439 twelve to eighteen months. I know there's a lot of 0:11:16.520 --> 0:11:19.120 uncertainty around that, but that's always the case. So the 0:11:19.240 --> 0:11:21.360 kind of gold standard, if you will, of some of 0:11:21.360 --> 0:11:23.959 the indications that we look are still saying that bonds 0:11:24.320 --> 0:11:26.920 look attractive. So we haven't had a strong call on that, 0:11:27.040 --> 0:11:29.240 or a good call, i should say, over the last 0:11:29.559 --> 0:11:32.200 three to six months. So certainly our tails between our 0:11:32.280 --> 0:11:34.160 legs a little bit on that one. But I think 0:11:34.240 --> 0:11:36.600 one of the best things for a technical is in 0:11:36.760 --> 0:11:40.480 FX because you do get these policy shifts that don't 0:11:40.559 --> 0:11:44.320 tend I know that the new administration may be an 0:11:44.360 --> 0:11:46.800 outlier here, but they don't tend to be that volatile 0:11:46.840 --> 0:11:49.400 to kind of set a trajectory and they go. And 0:11:49.440 --> 0:11:50.920 so you know, one of the things that we're actually 0:11:50.960 --> 0:11:53.480 seeing right now, which I think is interesting. We're not 0:11:53.520 --> 0:11:55.679 getting the trends yet, but we are seeing some setups 0:11:55.800 --> 0:12:00.920 is just the outright bearishness of four x right Canadian dollar, 0:12:01.559 --> 0:12:05.600 their hero dollar. I mean, these things are really really 0:12:05.760 --> 0:12:08.040 washed out. So even though the trends aren't in place, 0:12:08.120 --> 0:12:10.680 we have a couple setups in those that suggests that 0:12:10.720 --> 0:12:13.000 we probably get some relief in those currencies. 0:12:13.080 --> 0:12:15.560 Jeff de Graff just set up Damien Sassa there for 0:12:15.640 --> 0:12:16.360 our last question. 0:12:16.360 --> 0:12:18.000 Well, I mean he took the words right out of 0:12:18.040 --> 0:12:18.280 my mouth. 0:12:18.320 --> 0:12:20.000 I mean, really, the reality is when you're looking at 0:12:20.040 --> 0:12:21.920 rates and you're looking at fixed income, the reason a 0:12:21.960 --> 0:12:24.000 technical analysis, in my opinion, doesn't work as well is. 0:12:24.000 --> 0:12:24.839 Because of Carrie, right. 0:12:24.880 --> 0:12:26.520 I mean, you've got this coupon income that kind of 0:12:26.520 --> 0:12:29.400 smooths your turns out over time. But let's talk about 0:12:29.559 --> 0:12:31.880 BBDX y. Let's talk about the dollar here. We've seen 0:12:31.920 --> 0:12:33.920 a one hundred and sixty basis point reversal in the 0:12:34.000 --> 0:12:36.559 last month, Jeff, I mean it's choppy this year, man, 0:12:36.640 --> 0:12:38.720 So talk to us a little bit about what your 0:12:39.080 --> 0:12:42.040 indicators are telling you about the future direction of king dollar. 0:12:43.360 --> 0:12:45.960 Well, I think the overall trends for the dollar are 0:12:46.000 --> 0:12:50.440 still firm. I think it's in this long consolidation zone right. 0:12:50.440 --> 0:12:53.840 In other words, overbought momentum is fading. That usually results 0:12:53.840 --> 0:12:57.120 in a consolidation that takes you back into the longer 0:12:57.200 --> 0:12:58.679 term trend if you will kind of think about it 0:12:58.760 --> 0:13:04.960 les a regression. I think the biggest uh uh weakness 0:13:05.000 --> 0:13:07.720 for the dollar here, the vulnerability is probably a better word, 0:13:08.240 --> 0:13:09.960 is where what we see in that sentiment set up 0:13:10.040 --> 0:13:13.480 right there, it's become such a one sided trade that 0:13:13.679 --> 0:13:16.520 anything that kind of shakes that is going to have 0:13:16.559 --> 0:13:19.160 people clamoring to get right sided again. And that's the 0:13:19.280 --> 0:13:20.400 that's the challenge. 0:13:20.120 --> 0:13:22.600 Jeff forgetting get that was very Luisia Mauda. By the way, 0:13:22.920 --> 0:13:25.400 Jeff de grafh just simply what is the best way 0:13:25.440 --> 0:13:27.880 to express long China. 0:13:29.280 --> 0:13:31.720 Well, there's there's e t F, there's the f x I, 0:13:31.880 --> 0:13:36.000 there's the m c H I believe it is the 0:13:36.080 --> 0:13:38.520 k web. There's there's a lot of ETFs that you 0:13:38.520 --> 0:13:42.040 can you can have exposure uh h e w h 0:13:42.120 --> 0:13:44.559 is Hong Kong. So there's there's plenty of opportunities there 0:13:44.600 --> 0:13:45.760 to to get exposure. 0:13:45.920 --> 0:13:47.800 Jeff, thank you so much. Don't be a stranger, mister 0:13:47.840 --> 0:13:51.080 de graph works of mister Dutta Renaissance Macro. I should 0:13:51.120 --> 0:13:54.199 point out mister dud was my Economist of the Year, 0:13:54.240 --> 0:13:55.360 I think two years ago. 0:13:59.360 --> 0:14:03.000 You're listening to the Bloomberg Surveillance Podcast. Catch us live 0:14:03.040 --> 0:14:06.200 weekday afternoons from seven to ten am Eastern Listen on 0:14:06.280 --> 0:14:09.960 Applecarplay and Android Otto with the Bloomberg Business Up, or 0:14:10.120 --> 0:14:13.360 watch us live on YouTube professor A. 0:14:13.480 --> 0:14:16.800 Schiller, whether it's Wendy Schiller or Brown University Angela's stint 0:14:16.920 --> 0:14:20.640 in the nine o'clock hour, Who is mister Putin going 0:14:20.720 --> 0:14:22.760 to speak to Professor Schiller? 0:14:25.400 --> 0:14:29.000 Is that your question? Okay? Can you elaborate on that 0:14:29.080 --> 0:14:29.720 question please? 0:14:30.000 --> 0:14:34.080 We got Putin's gonna talk to Trump, and I guess 0:14:34.120 --> 0:14:37.440 he's not going to talk to Ukraine. But is it 0:14:37.560 --> 0:14:40.680 just the bilet meet in greet or do you actually 0:14:40.840 --> 0:14:44.000 see some Ukraine negotiation here? 0:14:45.360 --> 0:14:48.240 No, we've talked about this before. I think there's no 0:14:48.320 --> 0:14:51.560 question Trump wants to be the guy that ends this conference. Yes, 0:14:51.760 --> 0:14:54.320 you know what, and so he you know, so far 0:14:54.400 --> 0:14:57.080 he is not pressuring the Republican Control Congress to cut 0:14:57.120 --> 0:15:01.160 off future aid to Ukraine, but that's clearly in his 0:15:01.360 --> 0:15:05.480 sort of basket of negotiating tools with Ukraine. He's willing 0:15:05.520 --> 0:15:09.080 to give away pieces of Ukraine on Ukraine's behalf. But 0:15:09.400 --> 0:15:12.680 he also, we'll basically tell Putin, I'll stay in this 0:15:13.200 --> 0:15:16.320 as long as we have to do right. So that's 0:15:16.480 --> 0:15:18.720 that's when you say, who's he talking to? You know, 0:15:18.800 --> 0:15:21.200 that's what Trump wants, and I actually think there's a 0:15:21.240 --> 0:15:24.800 pretty good chance he'll get it because Ultimately he's willing 0:15:24.840 --> 0:15:27.960 to walk away from Ukraine. And I think Zelenski. 0:15:27.560 --> 0:15:30.520 Knows that the pivot point on his folks is, I 0:15:30.560 --> 0:15:33.600 believe two thousand and eight Kundalisa, Rice and Robert Gates 0:15:33.600 --> 0:15:36.680 in Belgrade and sort of when we decided to extend NATO, 0:15:36.800 --> 0:15:41.040 et cetera, et cetera. Professor Schiller, how far is President 0:15:41.080 --> 0:15:46.840 Trump in his Oval office foreign policy from traditional American 0:15:46.960 --> 0:15:47.960 foreign policy? 0:15:49.600 --> 0:15:51.960 Tom, This is like a mind meld. It's just thinking, 0:15:51.960 --> 0:15:55.080 this is exactly the opposite of the George Herbert Walker 0:15:55.120 --> 0:15:58.280 Bush and the George W. Bush Republican Party, which was, 0:15:58.320 --> 0:16:02.880 you know, engage, exert influence, send troops where you need to. 0:16:03.760 --> 0:16:06.560 So this is a complete sea change. This is going 0:16:06.560 --> 0:16:08.920 back to the nineteen forties. This is sort of Southern 0:16:08.960 --> 0:16:13.120 Conservative Democratic Party isolationism. This is we will exert power 0:16:13.480 --> 0:16:16.000 when we need to, when it's in our interest, but 0:16:16.160 --> 0:16:18.680 otherwise we are not going to come to the rescue 0:16:18.680 --> 0:16:21.520 of democracy. We're not going to promote it. Clearly shutting 0:16:21.520 --> 0:16:25.320 down usaid, you know, we're not going to do this anymore. 0:16:25.600 --> 0:16:27.520 And John Quincy Adams said this, you know, in the 0:16:27.520 --> 0:16:30.160 eighteen twenties, you know we'll be with you, but we 0:16:30.200 --> 0:16:32.360 don't have to go in search of monsters to destroy 0:16:32.520 --> 0:16:34.760 That's what he put how he put it, it's taking 0:16:34.800 --> 0:16:38.480 the United States into a completely different realm on foreign policy. 0:16:38.520 --> 0:16:41.640 But it's not sought power. Trump is willing to use 0:16:41.640 --> 0:16:44.440 the power. He just used it in his interest and 0:16:44.560 --> 0:16:45.520 the United States interest. 0:16:45.640 --> 0:16:48.400 Professor Schuller, I want to pay it back to Ukraine here. 0:16:48.480 --> 0:16:50.760 I mean, if we have a snap election coming up 0:16:50.760 --> 0:16:52.440 in Germany in the next two weeks, there's a lot 0:16:52.480 --> 0:16:54.560 of polling going on, and my question for you is 0:16:54.560 --> 0:16:58.760 if Professor if Zelenski gets you know, if he had 0:16:58.800 --> 0:17:01.560 the opportunity to vote in Munich, who would he be 0:17:01.640 --> 0:17:02.000 voting for? 0:17:02.080 --> 0:17:02.560 Would it be. 0:17:02.560 --> 0:17:05.600 DSDP, would it be the CDU, would it be the AFG. 0:17:05.920 --> 0:17:08.240 I mean, talk to us about what's coming up in Germany. 0:17:09.280 --> 0:17:12.320 Well, the Germans are facing sort of like multiple problems 0:17:12.359 --> 0:17:12.680 at once. 0:17:12.760 --> 0:17:12.960 Right. 0:17:13.040 --> 0:17:15.160 We know, in the economy they have a very sort 0:17:15.160 --> 0:17:18.479 of heavily socialized, heavy tax state. They've always done well 0:17:18.560 --> 0:17:21.760 in this manufacturing sector, they've always done well internationally. That's 0:17:21.800 --> 0:17:25.040 slipping that edge, and the capacity to support their internal 0:17:25.040 --> 0:17:28.480 welfare state is also slipping. There's also been tremendous immigration 0:17:28.560 --> 0:17:31.640 and migration to Germany. That changes in society. So you're 0:17:31.640 --> 0:17:33.719 doing the two things at once. And we know that 0:17:33.760 --> 0:17:36.119 in the United States we're having the same themes. So 0:17:36.280 --> 0:17:38.520 you know, the instability in Germany could be solved by 0:17:38.520 --> 0:17:41.920 going right right right wing, and that will you know, 0:17:42.080 --> 0:17:44.800 how that bodes for Russia German relations, I think is 0:17:44.920 --> 0:17:48.159 unclear for us at the moment, but certainly when you 0:17:48.200 --> 0:17:50.119 think about this trend all over Europe and in the 0:17:50.240 --> 0:17:52.800 United States, you know it doesn't bode well for those 0:17:52.800 --> 0:17:56.199 people who think we should go out and champion democracy. 0:17:56.240 --> 0:18:00.159 But sovereignty is something different. Ukraine is about sovereignty, and 0:18:00.200 --> 0:18:02.760 that's another question that you start to wonder about with 0:18:02.960 --> 0:18:05.400 you know, especially with President Trump saying he wants Panama, 0:18:05.400 --> 0:18:07.760 I wants Greenland, he wants Gaza. You know, then you 0:18:07.800 --> 0:18:10.760 think about sort of nation states sovereignty and it gets very, 0:18:10.960 --> 0:18:12.800 very competible when they get one. 0:18:12.640 --> 0:18:14.840 More question in here. We got talent in the studio. 0:18:14.880 --> 0:18:16.560 Here we got to get to or is agent's going 0:18:16.640 --> 0:18:21.679 to go mental? When doy Schiller Navarro wants reciprocal trade, 0:18:22.040 --> 0:18:25.600 are we bombing ourselves? Back to Section three three eight 0:18:26.280 --> 0:18:28.600 of the Terror fact of nineteen thirty. 0:18:29.880 --> 0:18:32.280 Well, we don't nobody wants to go back to nineteen 0:18:32.320 --> 0:18:34.800 thirty trade policy, I think, right, Tom, I mean, you know, 0:18:35.119 --> 0:18:38.240 you exacerbate him then cause a worldwide global depression that 0:18:38.320 --> 0:18:40.720 lasts until World War two. So I don't think anybody 0:18:40.760 --> 0:18:43.560 really wants to go back there. But we haven't seen 0:18:43.760 --> 0:18:49.199 the impact on the American industries, particularly farm particularly export industries. 0:18:49.440 --> 0:18:51.520 A lot of these have not hit yet. We saw 0:18:51.520 --> 0:18:54.480 on the first Trump administration that they're expensive. When they hit, 0:18:54.640 --> 0:18:58.159 things go south. So you know, his po poll numbers 0:18:58.160 --> 0:19:00.760 are very high. Now, wait a couple of months till 0:19:00.760 --> 0:19:03.800 these things really hit and see how the economy is doing. 0:19:04.080 --> 0:19:06.520 And I do think the administration will have to modify, 0:19:06.760 --> 0:19:08.560 but probably not for a couple of months. 0:19:08.560 --> 0:19:11.320 Wendy, thank you so much, Professor Schuler, The Tubmin Center, 0:19:11.359 --> 0:19:15.280 Brown At University. 0:19:17.560 --> 0:19:21.480 This is the Bloomberg Surveillance Podcast. Listen live each weekday 0:19:21.520 --> 0:19:24.919 starting at seven am Eastern on Applecarplay and Android Auto 0:19:24.960 --> 0:19:27.920 with the Bloomberg Business app. You can also listen live 0:19:28.000 --> 0:19:31.560 on Amazon Alexa from our flagship New York station, Just 0:19:31.600 --> 0:19:34.159 Say Alexa Play Bloomberg eleven thirty. 0:19:34.640 --> 0:19:38.159