Speaker 1: Welcome to the Bloomberg p m L Podcast. I'm pim Fox.
Speaker 1: Along with my co host Lisa Abramowitz. Each day we
Speaker 1: bring you the most important, noteworthy, and useful interviews for
Speaker 1: you and your money, whether you're at the grocery store
Speaker 1: or the trading floor. Find the Bloomberg p m L
Speaker 1: Podcast on Apple Podcasts, SoundCloud, and Bloomberg dot Com. All right,
Speaker 1: talking about lower than projections, let's talk about downgrades to
Speaker 1: the US economy. We have Carl rick O donaghy is
Speaker 1: our chief US economist for Bloomberg Intelligence and he joins
Speaker 1: us here in our eleven three oh studio. Carl, always
Speaker 1: a pleasure downgrading the US economy. Give us some details. Yes, So,
Speaker 1: we are just this morning published our updated mid year projections,
Speaker 1: and we're not changing our outlook for We see the
Speaker 1: economy growing at about two point or present. However, we
Speaker 1: did mark down our forecasts. Now, ordinarily that would be
Speaker 1: more troubling as it would have broader implications. Uh. You know,
Speaker 1: clearly you would say, while you're seeing a weaker economy,
Speaker 1: but really the reason for our downgrade of eighteen was
Speaker 1: basically erasing Trump and omics from the landscape. Uh. And
Speaker 1: so we've now assessed that given the prioritization of non
Speaker 1: economic measures, let's say healthcare repeal UH, and certainly these
Speaker 1: have economic consequences, but not direct economic policy. So the
Speaker 1: focus on healthcare, border security, travel bands, etcetera. Is squandering
Speaker 1: political capital and also valuable days on the legislative calendar,
Speaker 1: which means that we now are seeing less likelihood of
Speaker 1: things like comprehensive tax reform at both the household and
Speaker 1: corporate levels, massive infrastructure spending. Those economic pillars of our
Speaker 1: main pillars of trumponomics, I think are in serious jeopardy.
Speaker 1: So I would love to see them come back on
Speaker 1: the table and we would mark our growth forecast up accordingly.
Speaker 1: But it just doesn't look like that's going to be
Speaker 1: the reality, you know, Carl, I'm struck by the fact
Speaker 1: that you had priced in some of those uh legislative
Speaker 1: advances earlier in the year, and I'm wondering, as an economist,
Speaker 1: how difficult is it to come up with some kind
Speaker 1: of projection when clearly these proposals apparently would have had
Speaker 1: a very significant impact on how much the country would grow. Absolutely,
Speaker 1: so there was tremendous uncertainty as to whether or not
Speaker 1: they would be issues that they were clearly major themes
Speaker 1: on the campaign trail, and it looked like initially there
Speaker 1: was going to be a lot of motivation to pursue
Speaker 1: those agenda items. However, the administration pivoted and uh, and
Speaker 1: certainly we knew that healthcare and border security were going
Speaker 1: to be priorities as well, but you know, there was
Speaker 1: a chance that a businessman president would pursue uh, the
Speaker 1: economic priorities first. Uh, there's reasons for them to go
Speaker 1: after healthcare because if there are budget savings through healthcare reform,
Speaker 1: they could incorporate that into their adjustments to budget measures
Speaker 1: and tax policy. But you know, for whatever reason, they
Speaker 1: went went the direction they did. And now the discord
Speaker 1: uh seems to be increasing it certainly among Democrats but
Speaker 1: also among Republicans. Uh. And so what we had to
Speaker 1: reassess the likelihood of those measures being incorporated and and
Speaker 1: you revise of the outlook accordingly. And UH, you know
Speaker 1: we are not alone in doing this. The FED has
Speaker 1: continued to grapple with the degree to which they would
Speaker 1: incorporate the changes to fiscal policy into their forecast. Some
Speaker 1: some FED members did, some didn't. But now they seem to,
Speaker 1: at least based on the minutes of the May FOMC meeting, UH,
Speaker 1: they are shifting back towards UH, anticipating less of a
Speaker 1: change to fiscal policy. Well, Carl, I just want maybe
Speaker 1: just pick up on something that that Lisa mentioned and
Speaker 1: maybe just go one step further, which is the details,
Speaker 1: the actual numerical details of many of these things that
Speaker 1: you described, rather than the broad brush strokes. Have we
Speaker 1: seen any details that would allow an economist or any
Speaker 1: kind of analytical work done on what this would all
Speaker 1: mean for the economy? Things were presented with broadbrush strokes,
Speaker 1: as you note, so why it becomes a best guess
Speaker 1: type of scenario. We knew the objective for the infrastructure
Speaker 1: package would be about one trillion dollars spread over ten years,
Speaker 1: so you can kind of calculate how long it would
Speaker 1: take for that to get underway. Obviously it doesn't happen
Speaker 1: with a flip of a switch, so that is something
Speaker 1: you could at least to some rudimentary level UH model
Speaker 1: for GDP purposes. And then there were also some parameters
Speaker 1: laid out in terms of what tax policy would like
Speaker 1: look like, in what the implications would be just quickly
Speaker 1: give you twenty seconds PPI producer, Uh inflation, what do
Speaker 1: we get? P p I is telling us that there's
Speaker 1: still only moderate price pressures in the inflation pipeline, and
Speaker 1: this is something policymakers are going to be considering at
Speaker 1: the meeting as a core inflation. Consumer inflation has disappointed
Speaker 1: in the last two months, and now it looks like
Speaker 1: that two percent target maybe a little harder to achieve
Speaker 1: than they thought earlier this year. All right, I want
Speaker 1: to thank you very much, Carl Rickadona. Of course, our
Speaker 1: chief US economist for Bloomberg Intelligence, a downgrade to US
Speaker 1: economic performance in twenty eighteen because of well, the disappearance
Speaker 1: of the Trump Economic Agenda from the possibility of having
Speaker 1: that passed in Congress. Sears Canada suffered its worst stock
Speaker 1: decline ever after acknowledging significant doubt about its ability to
Speaker 1: keep operating, leading the troubled department store chain to consider
Speaker 1: a sale or restructuring. Also today, Sears is cutting four
Speaker 1: hundred jobs at its Hoffman Estates headquarters. Here to tell
Speaker 1: us more about retail and also Sears is Mark Cohen.
Speaker 1: He is a director of Retail Studies, adjunct Professor of
Speaker 1: Business at Columbia University School of Business, and he is
Speaker 1: also the former chief executive of Sears Canada. Mark Cohen,
Speaker 1: thank you very much for being with us. I wonder
Speaker 1: if you could just give people a little of your background,
Speaker 1: because if if you don't know what's going on in retail,
Speaker 1: nobody does. Because you've been doing this quite a while. Okay,
Speaker 1: I've been in the retail business most of my adult life.
Speaker 1: I started to day and s in the early nineteen seventies, UH.
Speaker 1: Getting a little closer to date, I was the chief
Speaker 1: marketing officer and president of soft lines for several years
Speaker 1: at Sears Roebuck in Chicago, and then the chairman and
Speaker 1: CEO is Canada from two thousand and one through mid
Speaker 1: two thousand and four. The companies have been in serial decline.
Speaker 1: In the case of Sears Roebuck, that decline started in
Speaker 1: two thousand UH when Alan Lacey became CEO, and after
Speaker 1: five years of failing, he turned the company more or
Speaker 1: less over to Eddie Lampert, the well known hedge fund
Speaker 1: operator who has been hollowing both companies out ever since.
Speaker 1: And so the the ongoing bad news both in the
Speaker 1: United States and Canada is no surprise retail businesses. Frankly,
Speaker 1: no business can operate with consecutive losses of enormous consequence
Speaker 1: with cash flow that only um comes from asset sales. Well,
Speaker 1: you know, I just want to get a sense when
Speaker 1: you left Series who were fired right in two thousand
Speaker 1: and four, was the departure over? Was it because you
Speaker 1: just didn't see a future anymore? Or is it because
Speaker 1: they just weren't going to take some of the steps
Speaker 1: that they needed to in order to make it a
Speaker 1: viable business. Well, you know, this is obviously my view,
Speaker 1: but I thought the Sears Roebuck CEO was incompetent, and
Speaker 1: he was reasonably convinced that I was trying to take
Speaker 1: away his job. I had no ability to do that,
Speaker 1: but certainly someone should have taken away his job. And
Speaker 1: so there in lies the conflict that occurred. In the
Speaker 1: summer of two thousand and four, he had spent six
Speaker 1: d and five million dollars in cash buying fifty one
Speaker 1: kmarts from Lampert's newly acquired kmart. And this was the
Speaker 1: support of strategy which was called Sears Brand, which was
Speaker 1: a catastrophe and which he was trying to get me
Speaker 1: to support. In Canada more or less to help legitimize it.
Speaker 1: So I thought the acquisition of this real estate was nesperious,
Speaker 1: if you will. And as it turned out, in a
Speaker 1: matter of speaking, Lampert turned around and used that six
Speaker 1: five million dollars along with the inflated valuation of his
Speaker 1: own kmart portfolio, and took possession of Sears Roebuck. So
Speaker 1: you know, this is a This is a bad ending
Speaker 1: to a series of really bad events. UM businesses can
Speaker 1: get into trouble for relatively brief periods of time and
Speaker 1: extract themselves, but both of these businesses have done nothing
Speaker 1: on their own behalf to be able to do that. Mark,
Speaker 1: can you describe whether this in your view, has this
Speaker 1: been a strategy to build the wealth of any lamport
Speaker 1: or has it been a strategy to build the health
Speaker 1: and wealth of Sears. I really can't comment about Lampert's
Speaker 1: underlying motivation. Maybe for some period of time he did
Speaker 1: have a view that he could run these businesses in
Speaker 1: an unconventional way and be successful in his own right.
Speaker 1: I think early on he discovered that that wasn't viable
Speaker 1: and has been propping these businesses up for his own
Speaker 1: benefit and for the benefit of his um investment cohorts.
Speaker 1: Ever since it has benefit, hasn't it? It remains to
Speaker 1: be seen, when all is said and done, what his
Speaker 1: net net investment proceeds will be for all of this
Speaker 1: effort and for for over all of this time. I
Speaker 1: really don't know whether he's going to quote unquote come
Speaker 1: out ahead or not. But it's clear that both businesses
Speaker 1: are are in terrible shape, continue to be struggling, with
Speaker 1: no possibility of remediation anytime in the future. You know,
Speaker 1: I'm struck by the fact that people have been saying
Speaker 1: Series is going to die for about a decade. Why
Speaker 1: isn't it just going to die? Do you think that
Speaker 1: there will be anything that will kind of force it
Speaker 1: to some kind of denu mall? Or well, are we
Speaker 1: to see it strung along for another decade? And well,
Speaker 1: it might very well string along. The US business might
Speaker 1: very well string along for some period of time. I
Speaker 1: don't know that Canada has that capacity, because the US
Speaker 1: business still does have some substantial UM assets that can
Speaker 1: yet be sold off. I mean, the US does still
Speaker 1: possess a reasonably large portfolio of real estate. The best
Speaker 1: stores of long ago been um sold off. Cash has
Speaker 1: long ago been given, ended into Lampard's pockets or used
Speaker 1: to prop up the company. Um Uh, at some point
Speaker 1: you do run out of fuel and uh that may
Speaker 1: be soon or it may be somewhere in the future,
Speaker 1: but it's clear that both of these business is that
Speaker 1: completely lost their viability. Thank you so much for joining us.
Speaker 1: It's good to get a good inside look at what's
Speaker 1: going on there. Marko and as director of Retail Studies
Speaker 1: and a Magic Professor of Business at Columbia University Business School,
Speaker 1: also former Sears Marketing Chief and head of Sears Canada.
Speaker 1: We hear a lot from investors who are turning their
Speaker 1: attention more to Europe than the U S, at least
Speaker 1: when it comes to equity markets. But CEO is clearly
Speaker 1: have their views set on the US. I want to
Speaker 1: bring in John V. Meyer. He's Global Chairman of KPMG
Speaker 1: International based in New York. UH and KPMG just released
Speaker 1: CEO Outlook report and wow, John, a lot of optimism
Speaker 1: and a lot of focus on the U S. Can
Speaker 1: you sort of start by spelling out what you think
Speaker 1: are the main takeaways from this survey? Sure? Thanks for
Speaker 1: having me on, Lisa, And you know, I think we
Speaker 1: start with confidence levels, and one thing that's interesting about
Speaker 1: our survey we intentionally try and focus on the next
Speaker 1: three years, so it's intended to be a longer term
Speaker 1: view on the part of the CEO, since we think
Speaker 1: that mirrors their investment cycle, hiring cycle, and everything else.
Speaker 1: UM confidence levels, I would say are a little more
Speaker 1: subdued from the survey last year, but still relatively high.
Speaker 1: And frankly, the US is the one market in the
Speaker 1: world where confidence levels are higher than what was reflected
Speaker 1: in our survey last year, UH, which is a very
Speaker 1: positive sign, you know from a US standpoint, But frankly,
Speaker 1: as you look around Asia, some real um drops frankly
Speaker 1: in confidence levels of c e o s as they
Speaker 1: look out over the next two years in some places
Speaker 1: like Japan, Australia, other places in Asia Pacific. So real
Speaker 1: mixed bag, depending upon UH where you're based. Well, you
Speaker 1: mentioned mixed bag, and I want to follow up at
Speaker 1: that having to do with globalization and the ability of
Speaker 1: companies to compete around the world, and one if you
Speaker 1: could speak to that topic and do you believe that
Speaker 1: the current political climate in the United States will thwart
Speaker 1: that ongoing trend? Well, you know, it's interesting we ask
Speaker 1: in our survey a fair number of questions that get
Speaker 1: you down a geopolitical path, and that is still viewed,
Speaker 1: I think as a key risk as c e O
Speaker 1: s look out into the marketplace. UH. And some of
Speaker 1: the specific feedback we got about geopolitical risk were number
Speaker 1: one sentiment that over half the CEO is believed that
Speaker 1: the impact of geopolitical risks on their business are higher
Speaker 1: today than they ever remember. UH. Secondly, this UM a
Speaker 1: question about protectionism that we tried to get a sense
Speaker 1: of given how much you know, discussion there is in
Speaker 1: the marketplace around and discussion on things like Twitter where
Speaker 1: you have elected officials using a public platform to name companies. Yeah,
Speaker 1: there's a high percentage over of the c e O
Speaker 1: s UH indicated that they believe protection ism will be
Speaker 1: increasing in the near term and over the next three years,
Speaker 1: which is again concerning given the levels where it already
Speaker 1: is today, and that's having an impact on decisions CEO
Speaker 1: s UM say they're evaluating in terms of where to
Speaker 1: locate operations, and all of these geopolitical factors I think
Speaker 1: are weighing into investment decisions more now today than they
Speaker 1: have been at any time that many of these CEOs
Speaker 1: can remember. Yeah, although one thing that I thought was
Speaker 1: really notable was on the micro level, and CEOs looked
Speaker 1: at their businesses, their own businesses, they saw the need
Speaker 1: to hire more people. And you say that in the survey,
Speaker 1: it showed that U S CEOs expect had contill grow
Speaker 1: over the next three years, with eighty percent reporting their
Speaker 1: investing in recruitment. Uh. This to me is fascinating and
Speaker 1: speaks to this tight labor market that we keep talking about.
Speaker 1: Does this, in your opinion, point to salary increases which
Speaker 1: people have been waiting for. You know, that's a complicated question,
Speaker 1: I think frankly, Lisa Um, I think the good news
Speaker 1: is that, again mirroring the confidence levels when we compare
Speaker 1: the CEOs responses this year till last year, a little
Speaker 1: less optimism about employment level growth over the next three years,
Speaker 1: but still I think a pretty good degree of confidence
Speaker 1: on the part of CEOs that they will be hiring. Uh,
Speaker 1: and that and that significant levels over six percent growth
Speaker 1: in their employee levels. The reason that your question is
Speaker 1: a little complicated is I think it really gets to
Speaker 1: what kind of skills are we talking about? There is
Speaker 1: clearly a shortage in the statistic use cited around actively recruiting.
Speaker 1: That's true, but they're actively recruiting for very specific skills,
Speaker 1: technology based skills, things like that, where UM like coding
Speaker 1: or is it something? Is it? Is it pretty broad
Speaker 1: within the tech anology space. I think it's broader. It
Speaker 1: gets to ability to analyze data, utilize data and analytics
Speaker 1: UM take advantage of some of the cognitive UH technologies
Speaker 1: that companies are now deploying in their organization data scientists
Speaker 1: to help them synthesize and think through all of this.
Speaker 1: And uh so, what I'm hearing you saying, it's almost
Speaker 1: like a split between people with higher education and people not.
Speaker 1: In other words, people who have have some training with
Speaker 1: respect to you know, things that are usually taught in
Speaker 1: college or later in high school. Not necessarily the blue
Speaker 1: collar jobs, although you know. One of the things that's
Speaker 1: interesting and frankly surprised me in the survey results is
Speaker 1: when we asked a specific question about do you believe
Speaker 1: cognitive technology is going to increase or decrease you're hiring
Speaker 1: over the next three years, it was overwhelmingly an increase,
Speaker 1: which I think is counterintuitive to what a lot of
Speaker 1: people are thinking, and and that was across a fairly
Speaker 1: wide range of job skills, a lot of traditional finance, marketing, sales.
Speaker 1: And I think what that talks to is companies looking
Speaker 1: today to see how am I going to deploy some
Speaker 1: of these disruptive technologies most effectively to benefit my customer
Speaker 1: And that's going to take people, uh, helping them figure
Speaker 1: that out and do that. So I think in the
Speaker 1: near term this may not be a long term kind
Speaker 1: of dynamic, but certainly in the near term it appears
Speaker 1: that some of these disruptive technologies are actually um leading
Speaker 1: companies to believe they will be increasing headcount. John V. Mar,
Speaker 1: thank you very much for being with US Global Chairman
Speaker 1: KPMG speaking about kpmg CEO Outlook report. It was a
Speaker 1: survey of four d US and global A chief executives
Speaker 1: for their views on their top priorities over the next
Speaker 1: three years. Turn our attention now to what's going on
Speaker 1: with markets, and we have James Paulson. He is a
Speaker 1: former chief investment strategist and economist Wells Capital Management. No,
Speaker 1: he is you still are three fifty billion dollars previous
Speaker 1: under management MINT based in Minneapolis, Jim Paulson, You've written
Speaker 1: that there's a whole lot of consensus opinion, what we
Speaker 1: might term conventional wisdom, and then you debunk it. I'm
Speaker 1: wondering if you could just go through some of those topics. Well, yeah,
Speaker 1: I think it's always sort of important to keep an
Speaker 1: eye on, uh any kind of thoughts that are really
Speaker 1: strongly and widely held, because it's often they're right, but
Speaker 1: if they're ever wrong, as you know, you create quite
Speaker 1: a market change, and so always sort of stay focused
Speaker 1: in some of those Um overall, I think, um one
Speaker 1: of them that I find interesting is the idea that's
Speaker 1: been prevalent throughout this recovery Kim that that wage wage
Speaker 1: games have been so uh tepid um and that this
Speaker 1: implies that boy labor is not doing very well and
Speaker 1: that the consumer must be weak and vulnerable, leaving the
Speaker 1: leaving the recovery itself in question. And it is true
Speaker 1: that while nominal wage games have been very low in
Speaker 1: this recovery, real wage games, what's really important, the purchasing
Speaker 1: power of labor has really done quite well. It's gone
Speaker 1: up one point seven percent per annum since the end
Speaker 1: of the last recovery, and that's been one of the
Speaker 1: stronger games from real purchasing power that we've had since
Speaker 1: the nineteen sixties. So I think that that explains a
Speaker 1: lot better to me why the consumer has done fairly
Speaker 1: well in this recovery. It's been leading the recovery, the
Speaker 1: consumer discretionary stocks that lead the stock market. Overall, consumer
Speaker 1: confidence is high. The dovetails, I think, with a much
Speaker 1: better uh, real wage growth than what recognized. You know, Jim,
Speaker 1: I'm struck by the complacency in the market, paired with
Speaker 1: this idea of the perceived complacency, paired with this idea
Speaker 1: expressed in the Bank of America Merrill lynch Uh survey
Speaker 1: of fund managers showing that nearly half of fund managers
Speaker 1: think that there is bubble like condition. There is a
Speaker 1: bubble like condition in text stocks. And Jim, over your
Speaker 1: decades of work at Wells Capital Management, which you left
Speaker 1: earlier this year, have you ever seen another period of
Speaker 1: time similar to this one, and which one would you identify? Well,
Speaker 1: I think I think there's been some similar but not
Speaker 1: quite like this. You know, Certainly a concentrated move in
Speaker 1: one section of the market does occur in different times.
Speaker 1: I mean that's certainly in nifty fifty and the early seventies,
Speaker 1: the dot com move, other times in the late seventies,
Speaker 1: early asianal move and energy stocks, a small cap stocks
Speaker 1: sometimes in the sixties. I mean, there's there's been concentrated
Speaker 1: movements like we've had in this but I think this
Speaker 1: stands out is unique and that I don't remember something
Speaker 1: being it's not even so much concentrate to a sector
Speaker 1: lease as it is concentrated to just a handful of names,
Speaker 1: uh that make up a very large portion of the marketplace.
Speaker 1: Outsize portion by just a handful of stocks is something
Speaker 1: that's kind of unique. So if you do have I
Speaker 1: think the overall market is not in that bad of
Speaker 1: shape from evaluation perspective, but if it's being dominated by
Speaker 1: you know, five or six stocks that make up a
Speaker 1: really sizeable portion that are extended, then it can become
Speaker 1: a market event in a way that it really hasn't
Speaker 1: in the past. Certainly when we had the nifty fifty
Speaker 1: that was somewhat like that, but a lot of other
Speaker 1: stocks are also I think extended words day, it's really
Speaker 1: concentrated just among a few. There's not a real precedent
Speaker 1: to have so much valuation risk concentrated amongst so few.
Speaker 1: Can you speak a little bit, Jim about the historic
Speaker 1: levels of valuation for let's say the SMP. Yeah, I
Speaker 1: think that's great pointing another survey way that caught my
Speaker 1: eye this morning. So there was another Bank American survey
Speaker 1: that said some record setting proportion of of investors think
Speaker 1: the market is overvalued by you know, extensively overvalued today,
Speaker 1: And I think that's interesting. Um uh, if you will.
Speaker 1: But what I've seen one of the most popular long
Speaker 1: term valuation methodologies is put out by Robert Schiller. The
Speaker 1: cape price earnings multiple goes back to eighteen seventy, I believe,
Speaker 1: And what I find interesting is that in the last
Speaker 1: quarter century, going back to last twenty five years, based
Speaker 1: on that really popular cape P motible, that thing has
Speaker 1: been above it's long term average like percent of the time.
Speaker 1: It's actually been above the nine percentile evaluation in the
Speaker 1: last year, uh about half the time. So this has
Speaker 1: been It is a highly valued market today, and people
Speaker 1: perceive it that way. But I'm really starting to question
Speaker 1: it because if something has been overvalued accessively for twenty
Speaker 1: five years, at what point do you suggest that this
Speaker 1: this isn't just a one off. It's going to correct,
Speaker 1: but maybe we're in a new evaluation situation. Jim. I'm
Speaker 1: struck by how bullish you are, because this is all
Speaker 1: basically casting some doubts on the pessimism that we're seeing
Speaker 1: in these surveys and by the increasing amount of cash
Speaker 1: and people's portfolios. Yeah, it is. I get the valuation risk.
Speaker 1: I think there's this real valuation risk, but that won't
Speaker 1: be realized until probably the next recession, and I don't
Speaker 1: think that's close. I think it's a ways off. So
Speaker 1: I think this valuation risk could get more extreme. And
Speaker 1: I love the fact that we've got a record number
Speaker 1: of people saying that the markets over valued, that we've
Speaker 1: got record cash holdings on the sidelines out there, that
Speaker 1: we have this perpetual there's one tagline for this bowl,
Speaker 1: it's that it's forever climb the perpetual wall of worry
Speaker 1: that is still there today. I think there's more upside yet,
Speaker 1: in part because we don't have enough people playing it
Speaker 1: in this part. Jim, thank you so much for joining us.
Speaker 1: It's always wonderful to hear your insights. Jim Paulson is
Speaker 1: the former chief investments tragist and economist at Wells Capital Management.
Speaker 1: He left earlier this year at Wells Capital Management overseas
Speaker 1: about three billion dollars in Minneapolis, Minnesota. Thanks for listening
Speaker 1: to the Bloomberg P and L podcast. You can subscribe
Speaker 1: and listen to interviews at Apple Podcasts, SoundCloud, or whatever
Speaker 1: podcast platform you prefer. I'm Pim Fox. I'm on Twitter
Speaker 1: at pim Fox. I'm on Twitter at Lisa Abramo. It's
Speaker 1: one before the podcast. You can always catch us worldwide
Speaker 1: on Bloomberg Radio