1 00:00:05,120 --> 00:00:09,200 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 2 00:00:09,240 --> 00:00:13,200 Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jaily, we bring you 3 00:00:13,320 --> 00:00:18,600 Speaker 1: insight from the best and economics, finance, investment, and international relations. 4 00:00:18,960 --> 00:00:23,840 Speaker 1: Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot com, 5 00:00:23,920 --> 00:00:31,240 Speaker 1: and of course, on the Bloomberg Terminal. William Dudley is 6 00:00:31,280 --> 00:00:33,320 Speaker 1: a former president in the New York Fat of course 7 00:00:33,360 --> 00:00:36,680 Speaker 1: for years, legendary at Goldman Sachs writing for Bloomberg Opinion. 8 00:00:36,760 --> 00:00:39,920 Speaker 1: We're thrilled that Bill Dudley could brief us this morning. 9 00:00:39,960 --> 00:00:43,519 Speaker 1: Bill Dudley, I want to talk about policy rule, inertia, 10 00:00:43,760 --> 00:00:47,920 Speaker 1: the physics envy of guys like you. You do Newtonian mechanics, 11 00:00:47,960 --> 00:00:51,000 Speaker 1: and up we go. Interest rates start moving up and 12 00:00:51,040 --> 00:00:54,960 Speaker 1: we start talking about inertia. What's the inertia look like 13 00:00:55,120 --> 00:00:59,000 Speaker 1: right now to hire interest rates? Well, the short ending inertia, 14 00:00:59,040 --> 00:01:01,000 Speaker 1: there's no enough, there's a the inertia of keeping short 15 00:01:01,080 --> 00:01:03,160 Speaker 1: term rates steady. The feed is said that they're going 16 00:01:03,200 --> 00:01:05,720 Speaker 1: to be very slow to raise interest rates. They're not 17 00:01:05,720 --> 00:01:08,160 Speaker 1: going to begin to raise interest rates until they get 18 00:01:08,200 --> 00:01:10,760 Speaker 1: to full employment to percent inflation, and they're confident that 19 00:01:10,800 --> 00:01:13,120 Speaker 1: inflation is going to go aboff TOWERC. We know that's 20 00:01:13,120 --> 00:01:15,160 Speaker 1: going to take a while to convince some of that. 21 00:01:15,680 --> 00:01:17,880 Speaker 1: Once they start, however, they're gonna be late and they're 22 00:01:17,880 --> 00:01:20,040 Speaker 1: gonna have to catch up, and so this is gonna 23 00:01:20,080 --> 00:01:21,480 Speaker 1: be a period of slow and then it's going to 24 00:01:21,520 --> 00:01:23,040 Speaker 1: be a period of fast. And I think the thing 25 00:01:23,080 --> 00:01:26,080 Speaker 1: that people don't really fully appreciate is when they actually 26 00:01:26,160 --> 00:01:28,240 Speaker 1: have to catch up, the level of short term rates 27 00:01:28,319 --> 00:01:30,440 Speaker 1: is going to climb much higher than what's currently priced 28 00:01:30,440 --> 00:01:33,679 Speaker 1: in financial mark What you just heard there's, folks, is 29 00:01:33,720 --> 00:01:37,000 Speaker 1: a synthesis of history with economics that Bill Dudley was 30 00:01:37,120 --> 00:01:40,840 Speaker 1: legendary for with McKelvey at Goldman Sachs. Bill Dudley, I'm 31 00:01:40,840 --> 00:01:43,679 Speaker 1: gonna cut to the chase and your wonderful essay. You 32 00:01:43,720 --> 00:01:47,560 Speaker 1: talk about that process of moving from the reality ex 33 00:01:47,680 --> 00:01:51,800 Speaker 1: post we're behind and forward you talk about talking and 34 00:01:51,840 --> 00:01:55,840 Speaker 1: then the Federal Act and finally they will do higher rates, 35 00:01:56,160 --> 00:01:58,880 Speaker 1: Well they do it in a measured way or do 36 00:01:58,960 --> 00:02:01,560 Speaker 1: we literally go back Arthur Burns where they're gonna be 37 00:02:01,640 --> 00:02:05,960 Speaker 1: talking about eighth point or higher moves. I think they're 38 00:02:06,000 --> 00:02:10,000 Speaker 1: gonna have to move relatively quickly because liftoff in terms 39 00:02:10,040 --> 00:02:12,320 Speaker 1: of short term rates isn't going to happen until the 40 00:02:12,320 --> 00:02:14,679 Speaker 1: economy is already at full employment. So there's gonna be 41 00:02:14,720 --> 00:02:17,480 Speaker 1: a big gap between where they are starting where they 42 00:02:17,520 --> 00:02:20,520 Speaker 1: need to be to keep the economy from overheating. So 43 00:02:20,560 --> 00:02:22,600 Speaker 1: it seems to me that at least a quarter point 44 00:02:22,600 --> 00:02:26,160 Speaker 1: of meeting seems like the most likely UH template. Think 45 00:02:26,160 --> 00:02:27,920 Speaker 1: about what happened in two thousand and four to two 46 00:02:27,960 --> 00:02:30,240 Speaker 1: thousand and six. The Fed raised the quarter point of 47 00:02:30,240 --> 00:02:33,720 Speaker 1: meeting for there was seventeen meetings in a row, taking 48 00:02:33,760 --> 00:02:36,400 Speaker 1: the federal fund rate from one percent to five and percent. 49 00:02:36,720 --> 00:02:38,560 Speaker 1: Probably not gonna go quite that high this time, but 50 00:02:38,600 --> 00:02:40,200 Speaker 1: we're gonna go quite a bit higher, I think than 51 00:02:40,240 --> 00:02:43,359 Speaker 1: the two percent is currently priced into financial market. So, Bill, 52 00:02:43,400 --> 00:02:45,320 Speaker 1: how would you charunterize this? Is this a race back 53 00:02:45,360 --> 00:02:49,280 Speaker 1: to neutral once you do start, or a race through neutral? Well, 54 00:02:49,320 --> 00:02:51,200 Speaker 1: you have to go beyond neutral because you're starting because 55 00:02:51,240 --> 00:02:54,040 Speaker 1: you're already at full employment and inflation is likely to 56 00:02:54,040 --> 00:02:57,000 Speaker 1: go above your two percent inflation objective. You actually have 57 00:02:57,040 --> 00:02:58,720 Speaker 1: to go to how much was stately forced? Do you 58 00:02:58,720 --> 00:03:00,320 Speaker 1: think the market would be in that environ man, just 59 00:03:00,360 --> 00:03:03,000 Speaker 1: having a look back at is a case study to 60 00:03:03,000 --> 00:03:05,600 Speaker 1: think about. Well, it's gonna be interesting to see how 61 00:03:05,600 --> 00:03:07,360 Speaker 1: the market reactions. That's the one thing that could slow 62 00:03:07,360 --> 00:03:09,280 Speaker 1: the FED down if the market reacts really poorly than 63 00:03:09,320 --> 00:03:12,800 Speaker 1: the federals. Sort of well back a little bit, Well, well, 64 00:03:12,840 --> 00:03:14,840 Speaker 1: look what happened between two thousand and four and two 65 00:03:14,880 --> 00:03:18,400 Speaker 1: thousand six. FED tightened every meeting for over two years, 66 00:03:18,520 --> 00:03:21,200 Speaker 1: and I guess what happened. The stock market was fine 67 00:03:21,200 --> 00:03:23,600 Speaker 1: and the bond market was fine. So you're absolutely right 68 00:03:23,600 --> 00:03:26,919 Speaker 1: how the markets react will affect the pace of tightening 69 00:03:27,320 --> 00:03:30,320 Speaker 1: when the FED starts. Are you advocating for a change 70 00:03:30,320 --> 00:03:32,880 Speaker 1: of policy then, Bill, or just highlighting where you think 71 00:03:32,919 --> 00:03:35,480 Speaker 1: the risk lie? I think I'm just highlighting where the 72 00:03:35,560 --> 00:03:37,080 Speaker 1: risk lie. I mean, there are there are benefits of 73 00:03:37,080 --> 00:03:38,760 Speaker 1: what the Fed is doing. It's going to keep inflation 74 00:03:38,800 --> 00:03:42,200 Speaker 1: expectations better anchored. It's going to get those eight million 75 00:03:42,240 --> 00:03:45,480 Speaker 1: people that are still out of work post COVID back 76 00:03:45,520 --> 00:03:47,880 Speaker 1: to work more quickly. But there are there are costs 77 00:03:47,880 --> 00:03:50,560 Speaker 1: on the other side, and people in financial markets do 78 00:03:50,760 --> 00:03:52,480 Speaker 1: need to be cognizant of that of those some of 79 00:03:52,520 --> 00:03:54,520 Speaker 1: those downside risks, which thing let's cost on than it. 80 00:03:54,960 --> 00:03:56,760 Speaker 1: Drug Miller is out in the Ball Street Journal Stanley 81 00:03:56,800 --> 00:03:59,360 Speaker 1: drug A Miller, famed investor of course, a legendary hedge 82 00:03:59,360 --> 00:04:01,360 Speaker 1: fund managers, and the following the long term risk from 83 00:04:01,360 --> 00:04:04,520 Speaker 1: asset bubbles and fiscal dominance dwarf the short term risk 84 00:04:04,560 --> 00:04:07,080 Speaker 1: of putting the brakes on a booming economy in twenty two. 85 00:04:07,320 --> 00:04:09,960 Speaker 1: What do you make of that aspect of it, Bill? 86 00:04:09,960 --> 00:04:12,480 Speaker 1: I think the fan is does recognize that financial markets 87 00:04:12,520 --> 00:04:15,680 Speaker 1: are frothy, but they're looking through that because they especially 88 00:04:15,680 --> 00:04:17,880 Speaker 1: for the equity market. They say the equity market, if 89 00:04:17,880 --> 00:04:19,560 Speaker 1: the equity market wrey to go down to some future 90 00:04:19,600 --> 00:04:21,200 Speaker 1: point in time, they don't see as a big risk 91 00:04:21,240 --> 00:04:24,720 Speaker 1: of financial stability because people investors in the equity market 92 00:04:24,760 --> 00:04:27,560 Speaker 1: typically don't do so on a highly leveraged basis. Remember 93 00:04:27,560 --> 00:04:30,000 Speaker 1: what happened to Great Financial Crisis. It was leverage that 94 00:04:30,160 --> 00:04:32,839 Speaker 1: killed us. So you know, the fans to view is 95 00:04:32,880 --> 00:04:34,640 Speaker 1: if we tighten and the stock market goes down to 96 00:04:34,720 --> 00:04:37,960 Speaker 1: some subsequent period of time, that will tighten financial conditions 97 00:04:38,000 --> 00:04:41,000 Speaker 1: and we may then have to tighten monentrec passy as much. 98 00:04:41,000 --> 00:04:43,359 Speaker 1: But you know, they agree that markets are frothy, but 99 00:04:43,400 --> 00:04:45,640 Speaker 1: they're looking through that. They're determined to keep rates low 100 00:04:45,680 --> 00:04:47,719 Speaker 1: until they actually get a lot more people back to work. 101 00:04:48,040 --> 00:04:50,120 Speaker 1: Bill Dudley, don't want to digress. We just talked to 102 00:04:50,200 --> 00:04:52,840 Speaker 1: Jared Bernstein to the White House about this, the arch 103 00:04:52,960 --> 00:04:56,080 Speaker 1: conservative fear that we're not going to be able to 104 00:04:56,160 --> 00:04:59,200 Speaker 1: grow our way, or the growth won't participate in our 105 00:04:59,240 --> 00:05:03,000 Speaker 1: debt our deficit solutions. And this goes back to out 106 00:05:03,000 --> 00:05:05,600 Speaker 1: on at Berkeley where you were Chip Jones and others 107 00:05:05,600 --> 00:05:08,520 Speaker 1: and solo at M I, T, etcetera. The idea that 108 00:05:08,640 --> 00:05:12,680 Speaker 1: just this fear that the growth won't be there frame 109 00:05:12,960 --> 00:05:17,160 Speaker 1: your optimism that growth economic growth of this nation will 110 00:05:17,200 --> 00:05:22,520 Speaker 1: assist in helping us with this pandemic debt and deficit. Well, 111 00:05:22,560 --> 00:05:24,919 Speaker 1: I think it will help because we have excess capacity 112 00:05:24,920 --> 00:05:27,400 Speaker 1: in the labor market. Uh. And I think you know, 113 00:05:27,440 --> 00:05:29,160 Speaker 1: if you look at the pro tivty numbers, I mean, 114 00:05:29,200 --> 00:05:30,880 Speaker 1: it's hard to read them through the pandemic, but they 115 00:05:30,880 --> 00:05:33,640 Speaker 1: actually seem to be better than what people expected. End 116 00:05:33,640 --> 00:05:37,560 Speaker 1: of the day, growth is about resources and proctivity. Resources 117 00:05:37,800 --> 00:05:40,400 Speaker 1: not so much in the sense that the population growth 118 00:05:40,400 --> 00:05:43,120 Speaker 1: in the US is pretty modest, so labor force growth 119 00:05:43,160 --> 00:05:44,520 Speaker 1: is only but a half a percent a year. But 120 00:05:44,520 --> 00:05:47,680 Speaker 1: proctivity growth, that's the key and if pro tivty growth 121 00:05:47,760 --> 00:05:50,200 Speaker 1: takes up thing, you'll have stronger growth. But which is 122 00:05:50,200 --> 00:05:52,039 Speaker 1: finally final question. We've got to get your take on 123 00:05:52,040 --> 00:05:54,680 Speaker 1: that pyrosal pull from Friday. How would you be processing 124 00:05:54,680 --> 00:05:57,560 Speaker 1: that if you're on the FED right now, I think 125 00:05:57,560 --> 00:06:00,919 Speaker 1: you'd say, Wow, that was surprisingly weak. But you know, 126 00:06:00,960 --> 00:06:03,040 Speaker 1: we don't have a lot of experience coming out of pandemics, 127 00:06:03,520 --> 00:06:05,800 Speaker 1: and you know, it's very possible that is weak because 128 00:06:05,839 --> 00:06:07,839 Speaker 1: people don't want to go back to work quite yet, 129 00:06:08,400 --> 00:06:10,200 Speaker 1: because they can't gonna have people to take you know, 130 00:06:10,279 --> 00:06:12,640 Speaker 1: they don't have people to take care of their telling 131 00:06:12,680 --> 00:06:15,839 Speaker 1: me because schools are still out of session. Um so 132 00:06:15,920 --> 00:06:17,880 Speaker 1: I think it's gonna just take a while to understand 133 00:06:17,920 --> 00:06:21,680 Speaker 1: what's really happenings to the pandemic. I don't think they're 134 00:06:21,680 --> 00:06:23,719 Speaker 1: gonna put a lot of weight on one month's uh 135 00:06:24,040 --> 00:06:27,320 Speaker 1: weakness in terms of ferals. Oh A, tomny Pace would 136 00:06:28,120 --> 00:06:30,920 Speaker 1: the former Federal Reserve Bank of New York President, Thank you, Bill. 137 00:06:31,240 --> 00:06:39,040 Speaker 1: Look forward to catching up soon. It is a wonderful 138 00:06:39,080 --> 00:06:41,280 Speaker 1: time to move on from the jobs reporting catch up 139 00:06:41,279 --> 00:06:44,120 Speaker 1: with Jared Bernstein, member of the White House Council on 140 00:06:44,240 --> 00:06:49,120 Speaker 1: Economic Advisors. Dr Bernstein has been definitive on socio economics 141 00:06:49,160 --> 00:06:51,640 Speaker 1: with his work at the Center on Budget and Policy 142 00:06:51,680 --> 00:06:55,240 Speaker 1: Priorities in e P I before that, an advisor to 143 00:06:55,520 --> 00:06:59,360 Speaker 1: Vice President Biden, now holding court at the White House. Jared, 144 00:06:59,400 --> 00:07:01,800 Speaker 1: thank you so much for joining us today. Jared, I 145 00:07:01,839 --> 00:07:04,880 Speaker 1: want to go back to the arch conservative fear. It 146 00:07:04,960 --> 00:07:07,479 Speaker 1: has been there from the time of David Ricardo and 147 00:07:07,560 --> 00:07:11,559 Speaker 1: John Stewart Mill. We will not grow our way out 148 00:07:11,600 --> 00:07:16,160 Speaker 1: of our challenges. Everyone in the middle, everyone liberal, including 149 00:07:16,240 --> 00:07:19,920 Speaker 1: Joe Stiglets, a laureate, has battled disc for years, including 150 00:07:19,960 --> 00:07:24,720 Speaker 1: solo at m I t N describe right now this 151 00:07:25,000 --> 00:07:28,920 Speaker 1: fear that we can't grow our way out of our challenges. Well, 152 00:07:28,920 --> 00:07:32,880 Speaker 1: that's certainly not a fear I share, and in fact, 153 00:07:33,360 --> 00:07:37,800 Speaker 1: I think the administration's policies thus far are very much 154 00:07:37,920 --> 00:07:41,480 Speaker 1: targeted at not just growing our way out of this, 155 00:07:41,640 --> 00:07:44,760 Speaker 1: because that's always going to be just a part of 156 00:07:44,760 --> 00:07:48,400 Speaker 1: the solution, but making sure that that growth is equitable, 157 00:07:48,440 --> 00:07:51,080 Speaker 1: that it's reaching people that hasn't reached before. One of 158 00:07:51,120 --> 00:07:55,160 Speaker 1: the touchstones of President Biden's economic policy will always be 159 00:07:55,720 --> 00:07:59,600 Speaker 1: GDP growth, stock market growth. Even lower unemployment by itself 160 00:07:59,720 --> 00:08:02,440 Speaker 1: is not enough. It has to reach the middle class 161 00:08:02,440 --> 00:08:05,000 Speaker 1: that has to reach lower income people, and they need 162 00:08:05,040 --> 00:08:07,680 Speaker 1: the bargaining clouds so they can claim they're fair share 163 00:08:07,680 --> 00:08:10,120 Speaker 1: of the growth, which by the way, was six point 164 00:08:10,160 --> 00:08:12,880 Speaker 1: four percent in the first quarter, and the and the 165 00:08:12,920 --> 00:08:16,000 Speaker 1: fingerprints of the Rescue Plan are all over that getting 166 00:08:16,000 --> 00:08:19,000 Speaker 1: to the other side of the crisis begat the building 167 00:08:19,040 --> 00:08:22,120 Speaker 1: Back Better agenda, which is a much longer term set 168 00:08:22,160 --> 00:08:26,480 Speaker 1: of investments. Jared, what does the Biden warning in America 169 00:08:26,640 --> 00:08:28,840 Speaker 1: look like? You know, I think the way to think 170 00:08:28,880 --> 00:08:32,040 Speaker 1: of that is uh kind of shifting from the American 171 00:08:32,120 --> 00:08:35,600 Speaker 1: Rescue Plan to the Jobs and Family Plan. The Rescue 172 00:08:35,600 --> 00:08:38,400 Speaker 1: Plan was always intended to do precisely what it's doing, 173 00:08:38,440 --> 00:08:40,679 Speaker 1: get us to the other side of the crisis as 174 00:08:40,760 --> 00:08:43,960 Speaker 1: quickly as possible by getting shots and arms checks in 175 00:08:44,000 --> 00:08:47,640 Speaker 1: pockets and making sure families and businesses and childcare providers 176 00:08:47,679 --> 00:08:49,960 Speaker 1: are intact on the other side of the crisis. But 177 00:08:50,120 --> 00:08:53,520 Speaker 1: simply getting back to where we were is wholly insufficient 178 00:08:53,559 --> 00:08:56,600 Speaker 1: for this administration. There needs to be a deep, ten 179 00:08:56,720 --> 00:08:59,920 Speaker 1: year set of investments embedded in the Jobs and Family 180 00:09:00,080 --> 00:09:03,360 Speaker 1: Plan to make sure that what I described in my 181 00:09:03,440 --> 00:09:06,440 Speaker 1: first answer to you occurs, which is that we pull along. 182 00:09:06,760 --> 00:09:10,760 Speaker 1: Folks have historically left behind by deep investments in education 183 00:09:10,840 --> 00:09:13,640 Speaker 1: and an opportunity in neighborhoods that have been left behind, 184 00:09:13,679 --> 00:09:17,120 Speaker 1: and clean energy, in manufacturing, and standing up a care 185 00:09:17,200 --> 00:09:21,439 Speaker 1: sector for childcare and elder care. Those are all keystones 186 00:09:21,520 --> 00:09:25,240 Speaker 1: of the jobs and family clans Montana, South Carolina, Arkansas, 187 00:09:25,240 --> 00:09:28,120 Speaker 1: and now North Dakota Jacks, you'll be familiar with this 188 00:09:28,200 --> 00:09:32,760 Speaker 1: story that push him back against the additional UI unemployment insurance. 189 00:09:32,960 --> 00:09:35,679 Speaker 1: Have you spoken to the governors of those states? I 190 00:09:35,720 --> 00:09:38,360 Speaker 1: have not personally spoken to the governors, but that's the president. 191 00:09:39,480 --> 00:09:42,360 Speaker 1: There are people within the administration. I don't know how 192 00:09:42,360 --> 00:09:46,040 Speaker 1: to read out of precisely who, but I do know that, yes, 193 00:09:46,080 --> 00:09:48,400 Speaker 1: the presidents talks to talks to governors all the time. 194 00:09:48,480 --> 00:09:51,640 Speaker 1: Do you think that's the wrong decision. Yeah, I do 195 00:09:51,760 --> 00:09:54,480 Speaker 1: think it's the wrong decision. I think the right decision 196 00:09:54,559 --> 00:09:57,560 Speaker 1: is what the President talked about yesterday, which is a 197 00:09:57,559 --> 00:10:01,120 Speaker 1: twofold to make sure we take down any barriers that 198 00:10:01,240 --> 00:10:04,360 Speaker 1: stand between people and getting back to work, with childcare 199 00:10:04,440 --> 00:10:07,199 Speaker 1: being the most prominent. To make sure that the rules 200 00:10:07,240 --> 00:10:10,720 Speaker 1: of the UI system are followed. If people are offered 201 00:10:11,000 --> 00:10:14,160 Speaker 1: a suitable job, the rules say they need to take it. 202 00:10:14,240 --> 00:10:18,120 Speaker 1: And suitable, by the way, means a job that is 203 00:10:18,640 --> 00:10:20,760 Speaker 1: enables them to go back to work safely. And then 204 00:10:20,880 --> 00:10:24,880 Speaker 1: and and and and recognizes that people have childcare obligations 205 00:10:24,880 --> 00:10:27,200 Speaker 1: that they can't always meet, so helping to take down 206 00:10:27,240 --> 00:10:30,199 Speaker 1: those barriers getting folks back to work, and recognizing that 207 00:10:30,240 --> 00:10:33,880 Speaker 1: the UI system is classic insurance for people who don't 208 00:10:33,880 --> 00:10:36,720 Speaker 1: have income from for work and it's been a huge 209 00:10:36,800 --> 00:10:40,520 Speaker 1: boon to unemployed Americans throughout this period. If it's the 210 00:10:40,520 --> 00:10:43,920 Speaker 1: wrong decision, let's stress test them. What would the consequences 211 00:10:43,960 --> 00:10:47,959 Speaker 1: be this month and next month when these policies are introduced. Yeah, 212 00:10:48,040 --> 00:10:50,280 Speaker 1: that's a great question. So I think they're twofold. One 213 00:10:50,360 --> 00:10:53,760 Speaker 1: is that you'll see people really experience a level of 214 00:10:53,760 --> 00:10:57,240 Speaker 1: economic hardship that wouldn't have occurred if they maintained their 215 00:10:57,320 --> 00:11:00,200 Speaker 1: enhanced benefits. And the other is that you're not going 216 00:11:00,240 --> 00:11:04,800 Speaker 1: to see much difference between uh, the labor market outcomes 217 00:11:05,040 --> 00:11:07,840 Speaker 1: in these areas versus others. So if we dig into 218 00:11:07,840 --> 00:11:10,640 Speaker 1: the data, thus far, I should say thus far, because 219 00:11:10,640 --> 00:11:13,520 Speaker 1: these things change month to month. We don't see a 220 00:11:13,559 --> 00:11:18,559 Speaker 1: negative correlation between places where unemployment insurance replacement rates, meaning 221 00:11:18,840 --> 00:11:21,400 Speaker 1: the extent to which it's replacing the wage. We don't 222 00:11:21,440 --> 00:11:25,600 Speaker 1: see a negative correlation between replacement rates and labor market outcomes, 223 00:11:25,640 --> 00:11:28,960 Speaker 1: so that would suggest that UI is not the problem. 224 00:11:28,960 --> 00:11:31,800 Speaker 1: And we know that people are facing barriers to childcare 225 00:11:31,800 --> 00:11:34,160 Speaker 1: at to school. We know there's concerned about the virus 226 00:11:34,200 --> 00:11:36,800 Speaker 1: out there. If you actually look at the vaccination rates 227 00:11:36,840 --> 00:11:40,600 Speaker 1: among working age people, they're obviously a lot lower than 228 00:11:40,640 --> 00:11:45,280 Speaker 1: the broader adult population. Dr Bernstein, you are eminently qualified 229 00:11:45,320 --> 00:11:47,480 Speaker 1: to speak to those on the right and the left 230 00:11:47,640 --> 00:11:51,920 Speaker 1: with your PhD and social welfare from Columbia. Folks. That 231 00:11:52,040 --> 00:11:55,319 Speaker 1: is a history and inheritage that speaks of a long century. 232 00:11:55,720 --> 00:12:00,120 Speaker 1: Dr Bernstein, frame right now on childcare, the debate of 233 00:12:00,160 --> 00:12:04,320 Speaker 1: a federal solution versus states rights to decide what their 234 00:12:04,400 --> 00:12:07,480 Speaker 1: child care would be. Where does that stand now and 235 00:12:07,520 --> 00:12:11,319 Speaker 1: where does President Biden wanted to go. Probably the best 236 00:12:11,320 --> 00:12:13,800 Speaker 1: way to answer that question is to look at every 237 00:12:13,840 --> 00:12:17,520 Speaker 1: other advanced economy and recognize that they have stood up 238 00:12:17,520 --> 00:12:21,000 Speaker 1: an accessible and affordable child care sector. And in the 239 00:12:21,080 --> 00:12:24,920 Speaker 1: vast majority of those economies, the labor force participation rate 240 00:12:24,920 --> 00:12:28,920 Speaker 1: among care takers, particularly women, is many percentage points higher 241 00:12:28,920 --> 00:12:32,680 Speaker 1: than ours. This is not, you know, a a classical 242 00:12:32,800 --> 00:12:35,199 Speaker 1: sort of federal state, right, And this is a classical 243 00:12:35,280 --> 00:12:41,240 Speaker 1: missing markets problem. Even the most mainstream economics recognizes that 244 00:12:41,280 --> 00:12:43,760 Speaker 1: when a market is missing, there's a role for the 245 00:12:43,760 --> 00:12:47,080 Speaker 1: federal government to come in and fix that externality. And 246 00:12:47,120 --> 00:12:50,600 Speaker 1: here the negative externality is a barrier to work for 247 00:12:50,679 --> 00:12:53,079 Speaker 1: people who want to get into the labor market. So 248 00:12:53,120 --> 00:12:56,840 Speaker 1: this is just a very simple solution to a market failure. 249 00:12:57,200 --> 00:12:59,880 Speaker 1: I look, Jared, at the solution to a market failure, 250 00:13:00,000 --> 00:13:01,760 Speaker 1: and I look at the politics. You don't have to 251 00:13:01,760 --> 00:13:05,400 Speaker 1: worry about two thousand twenty two. Your boss does as well. 252 00:13:05,960 --> 00:13:10,400 Speaker 1: How is the White House adapting economically to the reality 253 00:13:10,440 --> 00:13:15,440 Speaker 1: of an election coming ever closer in two thousand twenty two. Yeah, 254 00:13:15,480 --> 00:13:19,400 Speaker 1: that's an easy one. If you just watch the where 255 00:13:19,440 --> 00:13:21,800 Speaker 1: the president and the Vice president are going and listen 256 00:13:21,840 --> 00:13:24,200 Speaker 1: to what they're saying. They're taking their message to the 257 00:13:24,240 --> 00:13:28,440 Speaker 1: American people, and if you look at the American people. Okay, 258 00:13:28,480 --> 00:13:30,360 Speaker 1: I don't mean to interrupt, Jerry, but you've nailed it. 259 00:13:30,679 --> 00:13:34,840 Speaker 1: How do they sell this to Republicans who support what 260 00:13:34,920 --> 00:13:39,640 Speaker 1: you're talking about, yet the leadership that they have is 261 00:13:39,800 --> 00:13:44,160 Speaker 1: dead set against it. How does that metric, that dialectric work, Well, 262 00:13:44,200 --> 00:13:46,760 Speaker 1: I think you know, you don't have to sell things 263 00:13:46,800 --> 00:13:49,080 Speaker 1: to people. If there are things that people want to need, 264 00:13:49,160 --> 00:13:51,040 Speaker 1: you just have to tell them about it. So I 265 00:13:51,040 --> 00:13:54,040 Speaker 1: think it's it's less sell and more tell. Explain to 266 00:13:54,160 --> 00:13:57,679 Speaker 1: constituents why what you're trying to do. And what we 267 00:13:57,760 --> 00:14:01,360 Speaker 1: found from the polling is that telling, uh does not 268 00:14:01,520 --> 00:14:05,680 Speaker 1: require selling. When it's childcare, when it's safely reopening schools, 269 00:14:05,840 --> 00:14:08,760 Speaker 1: when it's beating the vaccine, when it's providing people the 270 00:14:08,800 --> 00:14:10,640 Speaker 1: resources they need to get to the other side of 271 00:14:10,679 --> 00:14:14,000 Speaker 1: this crisis, and when it's making historic investments in the 272 00:14:14,080 --> 00:14:17,400 Speaker 1: jobs and families plans, in their lives and their opportunities. 273 00:14:17,600 --> 00:14:20,480 Speaker 1: Now you know what goes on in partisan circles in 274 00:14:20,480 --> 00:14:22,920 Speaker 1: in d C. We have to show that out for 275 00:14:22,960 --> 00:14:26,320 Speaker 1: what it is. But the President vice President are keeping 276 00:14:26,320 --> 00:14:28,640 Speaker 1: their heads down meeting the needs of the American people 277 00:14:28,640 --> 00:14:30,560 Speaker 1: on all sides of the aisle. When the President will 278 00:14:30,560 --> 00:14:32,640 Speaker 1: be making with a big full in the White House 279 00:14:32,680 --> 00:14:36,160 Speaker 1: tomorrow and change we're told about childcare. Are you determined 280 00:14:36,240 --> 00:14:40,000 Speaker 1: to make childcare and policies addressing childcare issues a part 281 00:14:40,040 --> 00:14:43,760 Speaker 1: of a broad to infrastructure package. Unquestionably so, And in fact, 282 00:14:43,760 --> 00:14:45,920 Speaker 1: if you look at the jobs Plan and the Families Plan. 283 00:14:46,000 --> 00:14:48,320 Speaker 1: You see that right at the heart of those plans. 284 00:14:48,520 --> 00:14:50,280 Speaker 1: And I should be very clear about this. As I 285 00:14:50,280 --> 00:14:54,160 Speaker 1: said before, I think sometimes this childcare story takes on 286 00:14:54,360 --> 00:14:55,920 Speaker 1: a life of its own in the way that Tom 287 00:14:55,960 --> 00:14:59,760 Speaker 1: was referring to. Otherwise, for us, it's providing an accessible 288 00:14:59,800 --> 00:15:03,160 Speaker 1: and affordable path to get into the job market for 289 00:15:03,200 --> 00:15:06,160 Speaker 1: care takers who want to do so. Some will want to, 290 00:15:06,240 --> 00:15:08,360 Speaker 1: others will not want to. But if you want to 291 00:15:08,480 --> 00:15:11,000 Speaker 1: and you need to get back to work, it is 292 00:15:11,040 --> 00:15:13,880 Speaker 1: not hard to find care takers today who say I 293 00:15:13,960 --> 00:15:16,080 Speaker 1: can't get back to the job market because I can 294 00:15:16,120 --> 00:15:19,400 Speaker 1: find accessible, affordable care. It is a missing market and 295 00:15:19,440 --> 00:15:21,440 Speaker 1: we have to stand that market up, and that's what 296 00:15:21,480 --> 00:15:24,280 Speaker 1: our plans do. I'm not here to advocate for anyone's policies. 297 00:15:24,320 --> 00:15:26,800 Speaker 1: You clearly aren't out and that's understandable in your positions. 298 00:15:27,160 --> 00:15:29,280 Speaker 1: But when it comes to tomorrow, is that a redline 299 00:15:29,400 --> 00:15:33,600 Speaker 1: for this administration? Childcare as part of a broader infrastructure package. 300 00:15:33,680 --> 00:15:36,440 Speaker 1: Is that a redline? Well, you know, I'm not in 301 00:15:36,480 --> 00:15:39,280 Speaker 1: a position of setting legislative redlines. I'm okay, I'm on 302 00:15:39,320 --> 00:15:42,280 Speaker 1: the economics team, and I'm talking about the economic graphical 303 00:15:42,360 --> 00:15:46,480 Speaker 1: President community hold on. It is at the core of 304 00:15:46,880 --> 00:15:50,240 Speaker 1: everything that the President has talked about from the campaign, 305 00:15:50,280 --> 00:15:54,360 Speaker 1: by the way, until through the American Jobs and Families plans, 306 00:15:54,360 --> 00:15:56,760 Speaker 1: trying to get you to other privacies out to understand 307 00:15:56,760 --> 00:15:58,880 Speaker 1: that you can't negotiate on behalf of the president. But 308 00:15:58,920 --> 00:16:02,240 Speaker 1: when you sit around with the form, your understanding still 309 00:16:02,280 --> 00:16:07,240 Speaker 1: a core pot of communications and negotiations with Republicans, very 310 00:16:07,320 --> 00:16:09,480 Speaker 1: much so. And I think if you look again, I 311 00:16:09,520 --> 00:16:11,640 Speaker 1: think one of the I don't always like to cite 312 00:16:11,640 --> 00:16:14,120 Speaker 1: the polls because I think you can pick and choose 313 00:16:14,120 --> 00:16:16,920 Speaker 1: what you want, But on this issue, you can't find 314 00:16:16,960 --> 00:16:20,360 Speaker 1: a poll that doesn't show a majority of people saying 315 00:16:20,800 --> 00:16:23,280 Speaker 1: this is really important to us to be able to 316 00:16:23,320 --> 00:16:26,160 Speaker 1: access an affordable child If you actually look at the 317 00:16:26,200 --> 00:16:29,000 Speaker 1: amount of income that a middle or a low income 318 00:16:29,040 --> 00:16:31,640 Speaker 1: family has to pay for childcare, you're gonna start to 319 00:16:31,680 --> 00:16:35,680 Speaker 1: get into ten of their income in some cases, and 320 00:16:35,720 --> 00:16:39,160 Speaker 1: that is simply unsustainable for working families. And that's why 321 00:16:39,160 --> 00:16:42,360 Speaker 1: the President is targeting this issue. John, and we appreciate 322 00:16:42,360 --> 00:16:44,960 Speaker 1: your time to communicate the goes of this administration and 323 00:16:45,000 --> 00:16:47,200 Speaker 1: look forward to catching up soon. John burnstaining that from 324 00:16:47,200 --> 00:16:55,440 Speaker 1: the White House Council of Economic Advices. We get smarter 325 00:16:55,560 --> 00:16:58,360 Speaker 1: now and we win with Francisco Blanche of Bank of 326 00:16:58,360 --> 00:17:03,280 Speaker 1: America's securities out of Globe Commodities and Derivatives Research. Francisco, 327 00:17:03,280 --> 00:17:05,920 Speaker 1: it has been way way too long. I want you 328 00:17:06,000 --> 00:17:09,560 Speaker 1: to color now. We have all these legacy issues we're 329 00:17:09,560 --> 00:17:14,000 Speaker 1: dealing with. Our collective memory of commodities are collective memories 330 00:17:14,040 --> 00:17:17,119 Speaker 1: of supercycles. And you say, wait a minute, it's a 331 00:17:17,200 --> 00:17:22,640 Speaker 1: split supercycle upon us, what do you mean by that? Well, Tom, 332 00:17:22,680 --> 00:17:24,800 Speaker 1: thank you for having me. I think I think the 333 00:17:24,800 --> 00:17:27,880 Speaker 1: there's certain there's a sector of metals and materials which 334 00:17:27,920 --> 00:17:31,479 Speaker 1: is clearly in a in a supercyclical app swing, and 335 00:17:31,480 --> 00:17:34,080 Speaker 1: we're seeing record prices and we'll continue see record prices 336 00:17:34,119 --> 00:17:36,720 Speaker 1: for all of the raw materials there. But when it 337 00:17:36,720 --> 00:17:40,200 Speaker 1: comes to energy we are we're not and in fact, 338 00:17:40,320 --> 00:17:43,719 Speaker 1: I doubt we're gonna see record prices in this cycle. 339 00:17:43,760 --> 00:17:47,440 Speaker 1: I think we're just seeing cyclical upside swings across the board, 340 00:17:47,640 --> 00:17:49,639 Speaker 1: although as you pointed out, we're down today in oil. 341 00:17:50,200 --> 00:17:52,800 Speaker 1: But really the story is that when it comes to 342 00:17:53,080 --> 00:17:56,760 Speaker 1: materials um like like timber, we are now at the 343 00:17:56,800 --> 00:18:00,639 Speaker 1: point where supply is extremely low in entories are extremely 344 00:18:00,760 --> 00:18:06,120 Speaker 1: low um and and demand's roaring, so prices are extraordinarily volatile. 345 00:18:06,680 --> 00:18:10,439 Speaker 1: Copper he's having in that direction with inventories declining quickly 346 00:18:10,480 --> 00:18:14,480 Speaker 1: and also moving into demand ration. While as oil um 347 00:18:14,640 --> 00:18:18,320 Speaker 1: primarily is still still very well supplied, OPEC is holding 348 00:18:18,320 --> 00:18:22,080 Speaker 1: that capacity. So we are still trying to figure out 349 00:18:22,080 --> 00:18:24,399 Speaker 1: what to do with all those spare barrels. Keeping some 350 00:18:24,480 --> 00:18:28,120 Speaker 1: numbers on this forest, then Francisco, this split supercycle. Let's 351 00:18:28,119 --> 00:18:30,240 Speaker 1: deal with the metal side of it. Copper right now 352 00:18:30,320 --> 00:18:33,400 Speaker 1: is at ten five on eleven K. Watch now seemingly 353 00:18:33,520 --> 00:18:35,520 Speaker 1: what are you looking for through the next six months 354 00:18:35,520 --> 00:18:39,280 Speaker 1: two half months? So for copper, we're looking at basically 355 00:18:39,480 --> 00:18:44,240 Speaker 1: a dollar uh breton, and we think we could go 356 00:18:44,240 --> 00:18:47,879 Speaker 1: as highest twenty breton if the supply of scrap metal 357 00:18:48,040 --> 00:18:52,439 Speaker 1: scrap copper doesn't make it. Just say, you're modeling a 358 00:18:52,560 --> 00:18:56,880 Speaker 1: double off of leemy copper. We you know, we're we're 359 00:18:56,880 --> 00:19:02,840 Speaker 1: our our official target is okay um. But we see 360 00:19:02,840 --> 00:19:04,720 Speaker 1: a case over the next couple of years if we 361 00:19:04,760 --> 00:19:08,520 Speaker 1: do not get enough scrap metal um coming out coming 362 00:19:08,520 --> 00:19:11,359 Speaker 1: into a copper market, because remember a large chunk of 363 00:19:11,440 --> 00:19:13,920 Speaker 1: the copper market of our corret is scraped right, So 364 00:19:14,160 --> 00:19:17,080 Speaker 1: if we cannot scrap in off copper back into recycling, 365 00:19:17,119 --> 00:19:19,800 Speaker 1: back into the market, I'm talking about the the copper 366 00:19:19,920 --> 00:19:22,240 Speaker 1: that we get from past uses, not the copper that 367 00:19:22,280 --> 00:19:25,520 Speaker 1: we are mining. The copper ores. Those are very tight, 368 00:19:25,600 --> 00:19:27,919 Speaker 1: so we need to keep pushing prices higher also to 369 00:19:28,040 --> 00:19:31,040 Speaker 1: create more supply. And that's the that's the crazy dynamic 370 00:19:31,040 --> 00:19:35,399 Speaker 1: that's garning copper right now. Um. So, so remember, copper 371 00:19:35,520 --> 00:19:38,880 Speaker 1: is critical to all the applications that we have um 372 00:19:39,480 --> 00:19:42,840 Speaker 1: lining up for the decorganization of transportation, to the coorganization 373 00:19:43,080 --> 00:19:47,119 Speaker 1: of industry, and the decorganization of the electricity sectors. So 374 00:19:47,160 --> 00:19:49,400 Speaker 1: all of those require a lot of copper. Francis gonna 375 00:19:49,640 --> 00:19:51,119 Speaker 1: champ in because we've gotta cut through these numbs a 376 00:19:51,119 --> 00:19:54,280 Speaker 1: little bit more. We've got thirteen k as your base case. 377 00:19:54,520 --> 00:19:57,200 Speaker 1: We've got twenty k. Is this big bolt case. Can 378 00:19:57,240 --> 00:20:00,359 Speaker 1: you help us understand how big a falce rese kling 379 00:20:00,840 --> 00:20:03,800 Speaker 1: of componentually is in the comper market and whether you 380 00:20:03,880 --> 00:20:07,119 Speaker 1: expect that to actually materialize? Right so, so so it's 381 00:20:07,119 --> 00:20:09,800 Speaker 1: about a quarter, I mean, it's it's hard to tell 382 00:20:09,800 --> 00:20:13,080 Speaker 1: at this point. Remember, um, there's a lot of different 383 00:20:13,480 --> 00:20:17,680 Speaker 1: uses they are going to recycling here, and it's it's 384 00:20:17,760 --> 00:20:23,080 Speaker 1: possible that happens. I um, I do think that copper 385 00:20:23,200 --> 00:20:26,680 Speaker 1: is probably the most constructive commodity out there from from 386 00:20:26,720 --> 00:20:30,000 Speaker 1: medals perspective. But but there are others, right, I mean, 387 00:20:30,240 --> 00:20:33,520 Speaker 1: remember we are at the stage were as I said before, 388 00:20:33,560 --> 00:20:37,439 Speaker 1: we just printed way too much money. Um, so we 389 00:20:37,520 --> 00:20:39,679 Speaker 1: never quite had a recession when it came when it 390 00:20:39,680 --> 00:20:41,840 Speaker 1: comes to goods and when it comes to the demand 391 00:20:41,880 --> 00:20:45,119 Speaker 1: for stuff and demand for industry. We already had an 392 00:20:45,119 --> 00:20:48,640 Speaker 1: ip recession last year. So all of this is really booming, 393 00:20:48,840 --> 00:20:52,560 Speaker 1: uh from from a most perspective, and copperate hours are 394 00:20:52,600 --> 00:20:55,000 Speaker 1: actually degrading quite a bit. So so if you look 395 00:20:55,040 --> 00:20:58,520 Speaker 1: at the supply of horses is declining across across Chilean 396 00:20:58,560 --> 00:21:00,960 Speaker 1: prew we have elections so well and crew coming up 397 00:21:01,119 --> 00:21:05,600 Speaker 1: right where where there is potential fears of sector nationalization. 398 00:21:06,000 --> 00:21:07,760 Speaker 1: And this is also the kind of behavior you start 399 00:21:07,800 --> 00:21:10,600 Speaker 1: to get when prices get out of control and and 400 00:21:10,720 --> 00:21:13,320 Speaker 1: government suddenly see a lot of money in this command market, 401 00:21:13,320 --> 00:21:16,359 Speaker 1: the smoke coming market. So forranstans Car collective memory quickly 402 00:21:16,400 --> 00:21:19,080 Speaker 1: here is that we had a China boom up to 403 00:21:19,119 --> 00:21:23,040 Speaker 1: two eight. Do we have a China boom again or 404 00:21:23,160 --> 00:21:28,280 Speaker 1: is demand coming from a different theme. Well, Um, the 405 00:21:28,280 --> 00:21:30,560 Speaker 1: the interesting thing in the cycle is the demand is 406 00:21:30,600 --> 00:21:33,080 Speaker 1: coming really from from everywhere. I mean, for sure, we're 407 00:21:33,119 --> 00:21:36,880 Speaker 1: saying strong demand from China, but also we're saying a robust, 408 00:21:37,119 --> 00:21:39,760 Speaker 1: very robust consumer activity in the US. You know, you 409 00:21:40,040 --> 00:21:43,679 Speaker 1: talk often to Michelle Meyer or US commist, and you 410 00:21:43,720 --> 00:21:46,080 Speaker 1: know she can tell you how strong demand has been here. 411 00:21:46,200 --> 00:21:48,120 Speaker 1: And part of it is just we've we've given people 412 00:21:48,160 --> 00:21:50,520 Speaker 1: a lot of money to play with while they were 413 00:21:50,520 --> 00:21:54,880 Speaker 1: sitting at home. Um. And and also um, also European 414 00:21:54,920 --> 00:21:58,000 Speaker 1: demands actually picked up quite a bit, and and and 415 00:21:58,040 --> 00:22:00,280 Speaker 1: well this is going on, by the way. I mean, 416 00:22:00,280 --> 00:22:03,800 Speaker 1: I'm sure you've noticed European carbon prices I've reached fifty 417 00:22:03,840 --> 00:22:07,359 Speaker 1: years a ton or sixty doors aton, which which effectively, 418 00:22:07,880 --> 00:22:10,480 Speaker 1: uh means that there's gonna be even more demand for 419 00:22:10,520 --> 00:22:12,879 Speaker 1: this copper and and for some of these metals that 420 00:22:12,880 --> 00:22:15,720 Speaker 1: are going to help us the carbonites. Um, because it's 421 00:22:15,720 --> 00:22:19,520 Speaker 1: so expensive now to to to burn carbon fuels in 422 00:22:19,520 --> 00:22:22,600 Speaker 1: in the European unions. So there's a lot of things 423 00:22:22,640 --> 00:22:26,080 Speaker 1: going on simultaneously really supporting the complex. We've got a 424 00:22:26,080 --> 00:22:27,560 Speaker 1: minute left, and I want to use that by SalCo. 425 00:22:27,680 --> 00:22:31,679 Speaker 1: You just one more question, Francisco, this big call on COMPA. 426 00:22:32,119 --> 00:22:35,119 Speaker 1: Is this a cyclical call or a structural secular call 427 00:22:35,200 --> 00:22:39,119 Speaker 1: they shift away from the fossil fuels and towards batteries, 428 00:22:39,119 --> 00:22:44,119 Speaker 1: et cetera. What is it predominantly it's it's predominantly UM, 429 00:22:44,160 --> 00:22:47,320 Speaker 1: it's predominantly the latter. It's it's a secular call. It 430 00:22:47,359 --> 00:22:49,800 Speaker 1: should play out in a number of years, we think 431 00:22:50,400 --> 00:22:53,720 Speaker 1: at the end of the day. Um, the the initial 432 00:22:53,800 --> 00:22:58,480 Speaker 1: impulse came from monetary and fiscal Uh. The secondary impulse 433 00:22:58,520 --> 00:23:01,280 Speaker 1: came from from this kind of trying to taking center 434 00:23:01,320 --> 00:23:03,720 Speaker 1: stage in terms of growth last year. Uh. And now 435 00:23:03,720 --> 00:23:09,159 Speaker 1: we're getting the US infrastructure and DICAS decorization impulse. And 436 00:23:09,160 --> 00:23:11,600 Speaker 1: with US gonna take about ten years plus two complete. 437 00:23:11,600 --> 00:23:15,000 Speaker 1: So it's a secular story which will continue. It may 438 00:23:15,040 --> 00:23:19,320 Speaker 1: even slow down the organization at first. Uh. Interesting, Yes, 439 00:23:19,520 --> 00:23:21,320 Speaker 1: that's a risk actually that we end up slowing down 440 00:23:21,359 --> 00:23:23,879 Speaker 1: the organization at first because we just don't have the 441 00:23:23,960 --> 00:23:26,760 Speaker 1: materials lined up for it. Francisco, We've got a run 442 00:23:27,040 --> 00:23:30,840 Speaker 1: place to get tame was saw something else, so we 443 00:23:30,880 --> 00:23:33,160 Speaker 1: can do this again. Tell him that's a massive called, Francisco, 444 00:23:33,240 --> 00:23:40,840 Speaker 1: Blanche there of thanks America. Well, this is a precursor, folks, 445 00:23:40,840 --> 00:23:46,160 Speaker 1: for an important conversation. Mr Kristia most interesting at IBM 446 00:23:46,280 --> 00:23:49,199 Speaker 1: for a good amount of time, think thirty years. He 447 00:23:49,400 --> 00:23:54,840 Speaker 1: was the one that generated the acquisition red hat. He is, 448 00:23:54,960 --> 00:23:58,359 Speaker 1: of course from his India in the Indian Institute of 449 00:23:58,400 --> 00:24:01,080 Speaker 1: Technology with the academic mc work at the University of 450 00:24:01,119 --> 00:24:04,560 Speaker 1: Illinois or Benas Champagne as well, truly one of our 451 00:24:04,600 --> 00:24:09,720 Speaker 1: noted computer education combines. You do this with a doubt negative. 452 00:24:10,640 --> 00:24:15,399 Speaker 1: Here is our Caroline Hide. I'm Caroline Hyde from Bloomberg's 453 00:24:15,440 --> 00:24:18,440 Speaker 1: London headquarters for our radio listeners and for our television 454 00:24:18,480 --> 00:24:22,840 Speaker 1: viewers worldwide. IBM Chairman CEO Alvin Krishna joins us now 455 00:24:23,200 --> 00:24:24,760 Speaker 1: of Anna joy to have you with us. And the 456 00:24:24,760 --> 00:24:27,080 Speaker 1: reason you're joining us is because the side of products 457 00:24:27,080 --> 00:24:30,560 Speaker 1: you're unfolding at your annual Think conference. And correct me 458 00:24:30,600 --> 00:24:32,760 Speaker 1: if I'm wrong, but I'm feeling like AI is really 459 00:24:32,760 --> 00:24:35,600 Speaker 1: the focus here. You've got, of course, what's an orchestrate 460 00:24:35,640 --> 00:24:39,159 Speaker 1: with AI automating task for sales HR. You've got AI 461 00:24:39,280 --> 00:24:42,080 Speaker 1: helping people access their customer data. You've got project code 462 00:24:42,119 --> 00:24:46,200 Speaker 1: net to speed up business application of AI. For our audience, 463 00:24:46,240 --> 00:24:50,359 Speaker 1: where AI hybrid cloud still buzzwords, how does it change 464 00:24:50,680 --> 00:24:56,400 Speaker 1: their day to day? Well, okayline, great question, and thank 465 00:24:56,440 --> 00:24:59,560 Speaker 1: you for having me here. So if you think about AI, 466 00:25:00,119 --> 00:25:02,600 Speaker 1: begin with A with a cash phrase, the same way 467 00:25:02,640 --> 00:25:06,679 Speaker 1: as electricity helped electrification at the turn of the last century. 468 00:25:07,200 --> 00:25:10,040 Speaker 1: I believe that AI is going to infuse every enterprise 469 00:25:10,080 --> 00:25:13,960 Speaker 1: in every process in this century. So, now that said, 470 00:25:14,040 --> 00:25:17,320 Speaker 1: let's talk about making it real. AI is the only 471 00:25:17,400 --> 00:25:20,560 Speaker 1: tool we know that can really help unlock inside from 472 00:25:20,600 --> 00:25:23,160 Speaker 1: all the data we collect. So when we think about 473 00:25:23,200 --> 00:25:26,720 Speaker 1: improving the service for our own customers, when we think 474 00:25:26,760 --> 00:25:30,680 Speaker 1: about improving operations inside the enterprise, when we think about 475 00:25:30,720 --> 00:25:34,520 Speaker 1: maybe COVID nineteen vaccinations happening at a rate and pace 476 00:25:34,640 --> 00:25:37,679 Speaker 1: we've never seen. AI is what helps make all of 477 00:25:37,680 --> 00:25:40,560 Speaker 1: that happen. So you take code net a thing I'm 478 00:25:40,560 --> 00:25:44,520 Speaker 1: really excited about open source five million lines of code 479 00:25:44,600 --> 00:25:47,640 Speaker 1: all collected so that we can train AI to help 480 00:25:47,680 --> 00:25:52,040 Speaker 1: write code itself or programming. Imagine how much productivating that 481 00:25:52,119 --> 00:25:56,520 Speaker 1: will unlock all you think about our auto SQL technology 482 00:25:56,560 --> 00:25:59,560 Speaker 1: to help gather data from wherever it may reside across 483 00:25:59,600 --> 00:26:03,120 Speaker 1: public clouds. These are all examples of how air really 484 00:26:03,119 --> 00:26:06,919 Speaker 1: comes to life but really helps unlock and delight end users. 485 00:26:08,160 --> 00:26:11,360 Speaker 1: How does it unlocked sales revenue for you? How will 486 00:26:11,400 --> 00:26:14,480 Speaker 1: it speed up your own growth in revenue because you've 487 00:26:14,520 --> 00:26:18,399 Speaker 1: just been bringing to your own stakeholders. Well, the fastest 488 00:26:18,440 --> 00:26:24,600 Speaker 1: revenue growth in eighteen is that sustained. Um, so it 489 00:26:24,680 --> 00:26:27,080 Speaker 1: we'll get sustained. I'll come to that in a moment, Caroline. 490 00:26:27,200 --> 00:26:30,600 Speaker 1: The reason that we return to revenue growth is really 491 00:26:30,640 --> 00:26:32,480 Speaker 1: a whole lot of work we have done over the 492 00:26:32,520 --> 00:26:36,080 Speaker 1: last twelve months. We've talked about focusing our business only 493 00:26:36,160 --> 00:26:40,200 Speaker 1: on hybrid cloud and AI. We have announced the spin 494 00:26:40,280 --> 00:26:44,320 Speaker 1: of Kindrel, our manage infrastructure services business. We've increased our 495 00:26:44,480 --> 00:26:49,240 Speaker 1: organic investment on both R and D and sales. We 496 00:26:49,280 --> 00:26:53,199 Speaker 1: have also increased our spending our acquisitions eleven over the 497 00:26:53,280 --> 00:26:57,080 Speaker 1: last twelve months, and we are begging to invest in 498 00:26:57,119 --> 00:27:00,000 Speaker 1: our ecosystem. All that gave us a benefit in the 499 00:27:00,040 --> 00:27:02,840 Speaker 1: first quarter, and we'll see more and more benefit as 500 00:27:02,840 --> 00:27:05,520 Speaker 1: we go along and into next year. But I think 501 00:27:05,520 --> 00:27:09,240 Speaker 1: about AI, let's unlock a little bit. There is a salesperson. 502 00:27:09,600 --> 00:27:11,480 Speaker 1: They sit there and they're trying to see what is 503 00:27:11,520 --> 00:27:15,879 Speaker 1: happening to their to their client and salesforce. Maybe an 504 00:27:15,880 --> 00:27:18,480 Speaker 1: AI can look at that and say, Hey, this opportunity 505 00:27:18,520 --> 00:27:21,480 Speaker 1: is progressing. What should I add into that opportunity to 506 00:27:21,520 --> 00:27:24,440 Speaker 1: delight the client even more? Who else should I work 507 00:27:24,520 --> 00:27:27,720 Speaker 1: with inside the enterprise in order to go back. That's 508 00:27:27,760 --> 00:27:31,119 Speaker 1: where AI really helps augment human intelligence. And I use 509 00:27:31,160 --> 00:27:34,040 Speaker 1: the word augment doesn't replace, but takes away the monday 510 00:27:34,040 --> 00:27:37,480 Speaker 1: in tasks? Are you exactly where you need to be 511 00:27:37,600 --> 00:27:41,159 Speaker 1: to unlock this sort of productivity that you speak of? 512 00:27:41,280 --> 00:27:43,080 Speaker 1: Do you need more acquisitions to be made? You just 513 00:27:43,080 --> 00:27:48,399 Speaker 1: said you've been spending. I think that to unlock what 514 00:27:48,440 --> 00:27:51,119 Speaker 1: I'm talking about, we have what we need. That's a 515 00:27:51,200 --> 00:27:53,439 Speaker 1: question of making sure we have all the expertise and 516 00:27:53,480 --> 00:27:56,720 Speaker 1: can get it in front of all the clients. UM. 517 00:27:56,760 --> 00:27:59,680 Speaker 1: You know, I think today, UM, Karen Lake, the CEO 518 00:27:59,720 --> 00:28:02,720 Speaker 1: of EVS, will be speaking with me. She'll talk about 519 00:28:02,800 --> 00:28:05,959 Speaker 1: how AI is being used to really help the COVID 520 00:28:06,000 --> 00:28:09,720 Speaker 1: nineteen vaccinations. I think they've done like seventeen million, ten 521 00:28:09,760 --> 00:28:13,359 Speaker 1: millions something like that vaccinations, and AI was really a 522 00:28:13,359 --> 00:28:16,000 Speaker 1: big part of how they could get to that scale 523 00:28:16,119 --> 00:28:18,800 Speaker 1: so quickly. And so I believe that we have the 524 00:28:18,920 --> 00:28:22,119 Speaker 1: right pieces to go do these things. More moon shots 525 00:28:22,240 --> 00:28:27,800 Speaker 1: perhaps later, but automating operations and worrying about intelligent, pliant 526 00:28:27,840 --> 00:28:31,879 Speaker 1: experience we can do now when I'm thinking about my 527 00:28:31,960 --> 00:28:35,240 Speaker 1: health data as CBS is using there, when I'm thinking 528 00:28:35,240 --> 00:28:37,879 Speaker 1: about the world, the US reeling from a cyber attack 529 00:28:37,920 --> 00:28:40,240 Speaker 1: on its own key infrastructure. Just yesterday we learned this, 530 00:28:40,320 --> 00:28:42,640 Speaker 1: of course, and over the weekend of And how as 531 00:28:42,640 --> 00:28:44,640 Speaker 1: a man who's focused on security within all of this 532 00:28:45,240 --> 00:28:48,040 Speaker 1: important cybersecurity, how much of a concern is it to 533 00:28:48,040 --> 00:28:53,280 Speaker 1: you for your customers, O Carline, I think you and 534 00:28:53,320 --> 00:28:56,600 Speaker 1: I have spoken. I believe that cyber and cyber security 535 00:28:57,040 --> 00:28:59,720 Speaker 1: is the issue of the decade. And when you say why, 536 00:28:59,760 --> 00:29:04,560 Speaker 1: it's at that hard. If value goes into the cyber infrastructure, criminals, thieves, 537 00:29:04,680 --> 00:29:07,200 Speaker 1: nation actors are going to come after the cyber infrastructure. 538 00:29:07,960 --> 00:29:10,920 Speaker 1: So that said, then then what do you do about it? One? 539 00:29:11,360 --> 00:29:13,600 Speaker 1: I think I take a lot of comfort in the 540 00:29:13,640 --> 00:29:18,880 Speaker 1: fact I think financial institutions, most healthcare institutions do take 541 00:29:18,880 --> 00:29:21,920 Speaker 1: it quite seriously. However, they're all doing it on their 542 00:29:21,920 --> 00:29:23,440 Speaker 1: own and each of them has their own way of 543 00:29:23,440 --> 00:29:27,200 Speaker 1: doing it. I believe we should have a government program 544 00:29:27,200 --> 00:29:29,280 Speaker 1: similar to putting a man on the moon at that 545 00:29:29,400 --> 00:29:33,240 Speaker 1: scale to get a public private partnership going to really 546 00:29:33,280 --> 00:29:37,480 Speaker 1: take care of the cyber infrastructure. Otherwise the physical infrastructure 547 00:29:37,520 --> 00:29:41,600 Speaker 1: like we saw on the Colonial pipeline, maybe victim or 548 00:29:41,680 --> 00:29:44,000 Speaker 1: what is happening to the syber infrastructure that controls it. 549 00:29:44,280 --> 00:29:46,200 Speaker 1: And so that's where I really believe we should go 550 00:29:46,680 --> 00:29:50,520 Speaker 1: as a country. Then we have forty five seconds left. 551 00:29:50,560 --> 00:29:53,200 Speaker 1: The business environment for you for our radio and TV audiences. 552 00:29:53,240 --> 00:29:55,560 Speaker 1: Supply chain how much of an issue for you as 553 00:29:55,560 --> 00:30:00,640 Speaker 1: you make chips. Look, I think that there is a 554 00:30:00,720 --> 00:30:03,480 Speaker 1: whole supply to involved everybody. When we think of semi conductors, 555 00:30:03,480 --> 00:30:06,000 Speaker 1: that is a clear shortage. That's why we invest in 556 00:30:06,040 --> 00:30:08,880 Speaker 1: things like two an anomators. But government needs to lean 557 00:30:08,920 --> 00:30:11,600 Speaker 1: in also with the chip sacked and the National semic 558 00:30:11,600 --> 00:30:16,880 Speaker 1: Conductor Technology Center. That said, I see spending increasing going forward. 559 00:30:17,280 --> 00:30:19,640 Speaker 1: So there is going to be pockets around the world 560 00:30:19,760 --> 00:30:23,560 Speaker 1: ups and downs, but overall those optimism in the business environment. 561 00:30:23,960 --> 00:30:26,320 Speaker 1: Oven Krishna always a joy to have you with us. 562 00:30:26,320 --> 00:30:28,200 Speaker 1: Had so many more questions for you, but for our 563 00:30:28,200 --> 00:30:39,520 Speaker 1: TV and radio audiences. IBM Chairman and CEO. We talked 564 00:30:39,520 --> 00:30:41,840 Speaker 1: to a lot of people in strategy and economics and 565 00:30:41,880 --> 00:30:44,720 Speaker 1: of course in politics. It is rare we talk to 566 00:30:44,840 --> 00:30:50,120 Speaker 1: someone in true wealth management managing money and doing so 567 00:30:50,600 --> 00:30:54,040 Speaker 1: in a time where portfolio construction is how much Ample 568 00:30:54,040 --> 00:30:57,000 Speaker 1: do you own? How much Amazon you own? Sarah Hunt 569 00:30:57,000 --> 00:31:00,920 Speaker 1: has scarred from years of dealing with clients Alpine Woods 570 00:31:01,000 --> 00:31:05,120 Speaker 1: Capital over portfolio of construction. Sarah, what are you doing 571 00:31:05,240 --> 00:31:08,600 Speaker 1: right now? I mean, if you didn't own enough Apple 572 00:31:08,640 --> 00:31:11,120 Speaker 1: and Amazon and the rest of them last year, how 573 00:31:11,160 --> 00:31:15,560 Speaker 1: are you recalibrating in your portfolio right now? Well, it's 574 00:31:15,560 --> 00:31:18,400 Speaker 1: an interesting question because obviously you've seen the big move 575 00:31:18,440 --> 00:31:20,400 Speaker 1: in some of these tech docks, and not a positive 576 00:31:20,400 --> 00:31:23,120 Speaker 1: one in recent days. I think we were already at 577 00:31:23,120 --> 00:31:25,760 Speaker 1: the beginning of the year, in January and February, thinking 578 00:31:25,760 --> 00:31:27,920 Speaker 1: that things looked a little bit stretched and we're starting 579 00:31:27,920 --> 00:31:31,440 Speaker 1: to look for value, but value in unusual ways. So 580 00:31:31,640 --> 00:31:33,000 Speaker 1: you know, one of the stocks that we looked at 581 00:31:33,040 --> 00:31:35,000 Speaker 1: is a company called acam I, and they were one 582 00:31:35,000 --> 00:31:37,880 Speaker 1: of the early people using the Internet and figuring out 583 00:31:37,960 --> 00:31:40,480 Speaker 1: how to fix bottlenecks. Well, they've gotten into security, and 584 00:31:40,520 --> 00:31:43,640 Speaker 1: as you mentioned earlier, securities a big market right now, 585 00:31:43,680 --> 00:31:46,120 Speaker 1: and people are very concerned about the pipeline issue just 586 00:31:46,480 --> 00:31:49,760 Speaker 1: exacerbates that. So they had a big part of the 587 00:31:49,760 --> 00:31:51,720 Speaker 1: business that was not growing in a small part that's 588 00:31:51,760 --> 00:31:53,880 Speaker 1: been growing very rapidly. That's the kind of place where 589 00:31:53,880 --> 00:31:56,240 Speaker 1: we're looking for a sweet spot where we looked it 590 00:31:56,240 --> 00:31:58,520 Speaker 1: looked like there was some opportunity And Sarah, what's so 591 00:31:58,560 --> 00:32:00,920 Speaker 1: important here? And I say this was great respect for 592 00:32:00,960 --> 00:32:03,640 Speaker 1: the late David Swenson who all of us wren is 593 00:32:03,680 --> 00:32:09,680 Speaker 1: the idea of finding sector diversification through sector selection or 594 00:32:09,800 --> 00:32:14,320 Speaker 1: individual stock selection. Which is it right now? It's a 595 00:32:14,360 --> 00:32:16,960 Speaker 1: combination of both really, because you've seen some very big 596 00:32:17,000 --> 00:32:20,560 Speaker 1: movements under the under the indexes where you've seen some 597 00:32:20,640 --> 00:32:24,000 Speaker 1: big rotation into value and into sectors like the cyclical 598 00:32:24,080 --> 00:32:26,840 Speaker 1: sector and out of some of the technology sectors. Healthcare 599 00:32:26,920 --> 00:32:28,920 Speaker 1: has been a little bit of both. You've seen something 600 00:32:29,280 --> 00:32:31,520 Speaker 1: very positive in some things that are not Biotech has 601 00:32:31,520 --> 00:32:34,720 Speaker 1: had a very What do you do with healthcare? Well, 602 00:32:34,760 --> 00:32:36,560 Speaker 1: I think that you continue to invest in it. I mean, 603 00:32:36,600 --> 00:32:38,920 Speaker 1: this is clearly a space where you're going to see growth, 604 00:32:38,960 --> 00:32:41,480 Speaker 1: and you're going to see continued growth as the population ages, 605 00:32:41,520 --> 00:32:43,920 Speaker 1: not just in the US but globally. But you also 606 00:32:43,960 --> 00:32:46,320 Speaker 1: have to figure out how much was the pandemic a 607 00:32:46,400 --> 00:32:48,600 Speaker 1: problem and how much are we going back to some 608 00:32:48,680 --> 00:32:51,000 Speaker 1: sort of normal in our own healthcare system and other 609 00:32:51,040 --> 00:32:54,080 Speaker 1: healthcare systems, because the healthcare system has been skewed by 610 00:32:54,080 --> 00:32:56,960 Speaker 1: this global pandemic. And as you see that in the numbers, 611 00:32:56,960 --> 00:32:58,520 Speaker 1: So you have to assume that at some point the 612 00:32:58,600 --> 00:33:01,920 Speaker 1: numbers start to change and some of them traditional operations 613 00:33:01,920 --> 00:33:04,240 Speaker 1: like hip replacements and nee replacements and all that, start 614 00:33:04,280 --> 00:33:06,480 Speaker 1: to come back a little bit stronger. But right now 615 00:33:06,520 --> 00:33:08,200 Speaker 1: you're still in a little bit of limbo because you 616 00:33:08,240 --> 00:33:11,480 Speaker 1: don't have what I would call some sort of normalized procedurals. 617 00:33:11,600 --> 00:33:13,160 Speaker 1: Let's get to the numbers right now, and that's like 618 00:33:13,200 --> 00:33:15,520 Speaker 1: one hundred down by one point nine percent, just off 619 00:33:15,520 --> 00:33:18,440 Speaker 1: sets and lows and off by two fifty points. Is 620 00:33:18,440 --> 00:33:20,800 Speaker 1: this price sanction in search of a story, Sarah, or 621 00:33:20,800 --> 00:33:23,400 Speaker 1: do you like this explanation the narrative that scripted the 622 00:33:23,400 --> 00:33:25,040 Speaker 1: market this morning that a lot of this is just 623 00:33:25,080 --> 00:33:28,960 Speaker 1: the reflationary thing leading into big tech growth and it's 624 00:33:29,000 --> 00:33:32,880 Speaker 1: not good for it. Well, that's an interesting question because 625 00:33:32,920 --> 00:33:35,680 Speaker 1: earlier you mentioned that Microsoft isn't really an inflation hedge, 626 00:33:35,680 --> 00:33:38,040 Speaker 1: and traditionally speaking, it's not. But do we really think 627 00:33:38,080 --> 00:33:40,320 Speaker 1: that Microsoft is going to have trouble raising its prices. 628 00:33:40,400 --> 00:33:43,600 Speaker 1: Like you know, the the issue about pricing is something 629 00:33:43,640 --> 00:33:45,920 Speaker 1: where on the technology side, a lot of those people 630 00:33:46,000 --> 00:33:49,360 Speaker 1: do have pricing power. So the question is does is 631 00:33:49,400 --> 00:33:51,800 Speaker 1: that really the issue or is this really rotation out 632 00:33:51,800 --> 00:33:54,440 Speaker 1: of some names that had moved very quickly and very fast. 633 00:33:54,600 --> 00:33:56,400 Speaker 1: Take a look at new Core. That stock was a 634 00:33:56,440 --> 00:33:58,560 Speaker 1: bottle rock at the other day, and it's gone from 635 00:33:58,560 --> 00:34:00,840 Speaker 1: fifty to a hundred in a very period of time. 636 00:34:00,880 --> 00:34:03,280 Speaker 1: I think that's part of the supply chain shortages you're 637 00:34:03,320 --> 00:34:05,400 Speaker 1: seeing as people start to look at that. But then 638 00:34:05,400 --> 00:34:08,000 Speaker 1: they tend to extrapolate pricing for periods of time that 639 00:34:08,080 --> 00:34:11,280 Speaker 1: may be too long. So there is some movement into 640 00:34:11,320 --> 00:34:13,480 Speaker 1: the cyclicals. But is that movement going a little too 641 00:34:13,480 --> 00:34:15,400 Speaker 1: far too fast is another question, just like it was 642 00:34:15,440 --> 00:34:17,680 Speaker 1: in tech a little too part. Let's build on that then, Sarah, 643 00:34:17,719 --> 00:34:21,160 Speaker 1: the relationship you think should exist between yields rights, real 644 00:34:21,280 --> 00:34:25,399 Speaker 1: yields and a broader market growth equity Specifically, I think 645 00:34:25,440 --> 00:34:27,600 Speaker 1: it's a very difficult thing to say that we are 646 00:34:27,640 --> 00:34:30,239 Speaker 1: going to see much much higher interest rates, even if 647 00:34:30,280 --> 00:34:32,840 Speaker 1: the FED does have to raise If you think about 648 00:34:32,840 --> 00:34:36,239 Speaker 1: global governments, everybody has borrowed so much money that I 649 00:34:36,280 --> 00:34:38,239 Speaker 1: find it difficult to believe that rates can go back 650 00:34:38,320 --> 00:34:41,800 Speaker 1: to what we used to think of in traditional on 651 00:34:41,880 --> 00:34:44,560 Speaker 1: a tenure. I think that's very difficult because it's very 652 00:34:44,600 --> 00:34:48,000 Speaker 1: expensive for governments now it rates for that high. I 653 00:34:48,000 --> 00:34:50,040 Speaker 1: want to dove jail two of these arguments. John, I 654 00:34:50,080 --> 00:34:53,759 Speaker 1: think this is actually a brilliant conversation about portfolio construction 655 00:34:54,040 --> 00:34:56,040 Speaker 1: and Sarah Hunt. When it comes down to is David 656 00:34:56,040 --> 00:34:59,719 Speaker 1: Constant and Goldmen mentioned the duration framing of these big 657 00:34:59,719 --> 00:35:04,160 Speaker 1: tech stocks versus a Jack Welsh like pricing power and 658 00:35:04,200 --> 00:35:07,960 Speaker 1: you're saying the markets wrong. These people do have pricing 659 00:35:08,000 --> 00:35:10,440 Speaker 1: power to meet. John, that's a huge debate at the 660 00:35:10,520 --> 00:35:12,440 Speaker 1: end of the summer. So b t I J like 661 00:35:12,560 --> 00:35:16,200 Speaker 1: consumer staples more constanding, I think likes consumer staples. Sarah. 662 00:35:16,239 --> 00:35:19,840 Speaker 1: I keep hearing firms, banks, houses that like consumer staples 663 00:35:19,880 --> 00:35:21,960 Speaker 1: because they like the pricing power aspect of it. Do 664 00:35:22,040 --> 00:35:25,560 Speaker 1: you I think that given where the multiples are on 665 00:35:25,600 --> 00:35:28,000 Speaker 1: consumer staples, I'm not sure that they have as much 666 00:35:28,000 --> 00:35:31,680 Speaker 1: pricing power as you have in some other areas. So 667 00:35:31,880 --> 00:35:34,400 Speaker 1: I see the argument, but I also think that in 668 00:35:34,440 --> 00:35:36,480 Speaker 1: the end, you've got a lot of choices. Consumers do 669 00:35:36,560 --> 00:35:39,480 Speaker 1: make choices. They will trade down in consumer staples in 670 00:35:39,520 --> 00:35:41,799 Speaker 1: a way when budgets are tight, that they won't. You 671 00:35:41,840 --> 00:35:44,600 Speaker 1: can't trade down from Microsoft to a different security system 672 00:35:44,680 --> 00:35:46,719 Speaker 1: or a different I mean, I just don't. I don't 673 00:35:46,760 --> 00:35:48,600 Speaker 1: see that kind of strade off happening in some of 674 00:35:48,640 --> 00:35:51,880 Speaker 1: the areas that are traditionally linked to lower industries are 675 00:35:51,960 --> 00:35:54,880 Speaker 1: better for them. This is like John such a flashback 676 00:35:54,960 --> 00:35:58,480 Speaker 1: when Toto's Africa peaked in nineteen eight at number nineteen 677 00:35:58,840 --> 00:36:01,359 Speaker 1: on the Builtboard chart. I mean Sarah's I mean, I'm 678 00:36:01,360 --> 00:36:07,319 Speaker 1: gonna get misty idea. That was beautiful, Sarah. This is 679 00:36:07,360 --> 00:36:11,319 Speaker 1: the Bloomberg Surveillance Podcast. Thanks for listening. Join us live 680 00:36:11,480 --> 00:36:15,240 Speaker 1: weekdays from seven to ten am Eastern on Bloomberg Radio 681 00:36:15,480 --> 00:36:19,080 Speaker 1: and on Bloomberg Television each day from six to nine 682 00:36:19,160 --> 00:36:23,560 Speaker 1: am for insight from the best in economics, finance, investment, 683 00:36:23,719 --> 00:36:28,719 Speaker 1: and international relations. And subscribe to the Surveillance podcast on 684 00:36:28,800 --> 00:36:32,640 Speaker 1: Apple podcast, SoundCloud, Bloomberg dot com, and of course on 685 00:36:32,760 --> 00:36:36,880 Speaker 1: the terminal. I'm Tom Keene, and this is Bloomberg