1 00:00:00,080 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:11,960 --> 00:00:15,560 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 3 00:00:15,600 --> 00:00:18,960 Speaker 2: with Paul Sweeney. Join us each day for insight from 4 00:00:18,960 --> 00:00:23,160 Speaker 2: the best in economics, finance, investment, and international relations. You 5 00:00:23,160 --> 00:00:26,520 Speaker 2: can also watch the show live on YouTube. Visit the 6 00:00:26,520 --> 00:00:31,280 Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday 7 00:00:31,280 --> 00:00:34,320 Speaker 2: mornings from seven to ten am Eastern from our global 8 00:00:34,360 --> 00:00:39,000 Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 9 00:00:39,360 --> 00:00:42,920 Speaker 2: or anywhere else you listen, and always I'm Bloomberg Radio, 10 00:00:43,080 --> 00:00:48,559 Speaker 2: the Bloomberg Terminal, and the Bloomberg Business App. Mohammadalarian is 11 00:00:48,640 --> 00:00:53,560 Speaker 2: definitive in game theory and thinking about the probabilities that 12 00:00:53,720 --> 00:00:58,960 Speaker 2: risk the uncertainty of given events, including what we saw yesterday. 13 00:00:59,480 --> 00:01:02,160 Speaker 2: He is a man by being at Queen's College, the 14 00:01:02,240 --> 00:01:05,600 Speaker 2: University of Cambridge, which means he's advantaged by one of 15 00:01:05,640 --> 00:01:10,040 Speaker 2: the world's great Asian programs with the leadership of Andrew Marsham, 16 00:01:10,080 --> 00:01:14,360 Speaker 2: who's just absolutely definitive on these studies. Doctor la Ariann, 17 00:01:14,480 --> 00:01:17,520 Speaker 2: I want to go back to Martin Feldstein just a 18 00:01:17,600 --> 00:01:21,440 Speaker 2: year and a half before he died. The Japanese economy 19 00:01:21,520 --> 00:01:26,720 Speaker 2: is a paradoxical mixture of prosperity and failure. Martin Feldstein 20 00:01:26,920 --> 00:01:33,160 Speaker 2: was so far out front on their cyclic failure to 21 00:01:33,240 --> 00:01:38,600 Speaker 2: be normal. When Japan blew up yesterday with their new policy, 22 00:01:38,720 --> 00:01:43,479 Speaker 2: when they blew up yesterday the equity market decline, how 23 00:01:43,520 --> 00:01:47,920 Speaker 2: does that redound over to the American and the Western markets? 24 00:01:49,720 --> 00:01:52,080 Speaker 3: Palm, thanks for having me, and I thought we were 25 00:01:52,080 --> 00:01:54,600 Speaker 3: going to go straight to the miracle of the mets 26 00:01:54,640 --> 00:01:56,240 Speaker 3: still being in a wall called Chase. 27 00:01:56,600 --> 00:01:58,680 Speaker 2: That is a miracle. It was discussed to speak in. 28 00:01:58,720 --> 00:02:02,960 Speaker 3: A look, when you run an economy at low growth, 29 00:02:03,600 --> 00:02:08,639 Speaker 3: high debt, zero interest rates, and quantitative easing for a 30 00:02:08,760 --> 00:02:12,600 Speaker 3: number of decades, and that's what happened to Japan, then 31 00:02:13,000 --> 00:02:18,040 Speaker 3: you get first the contrast that Mori Felstein correctly pointed out, 32 00:02:18,120 --> 00:02:21,000 Speaker 3: which is the flow numbers are awful, but the stock 33 00:02:21,120 --> 00:02:24,600 Speaker 3: numbers are great, so wealthy economy that nevertheless doesn't grow. 34 00:02:25,200 --> 00:02:30,680 Speaker 3: But importantly, you encourage that wealth to go seek higher 35 00:02:30,720 --> 00:02:36,680 Speaker 3: returns elsewhere, and that's what happened. The Japanese financial system 36 00:02:37,360 --> 00:02:41,760 Speaker 3: became very large holders of other people's securities. Then when 37 00:02:41,760 --> 00:02:45,800 Speaker 3: you change the regime and you raise interest rates, the 38 00:02:45,880 --> 00:02:53,760 Speaker 3: currency appreciates inflation comes back suddenly, people cannot refinance these 39 00:02:53,800 --> 00:03:00,440 Speaker 3: positions and are either actual or perceived sales. What happened 40 00:03:00,480 --> 00:03:02,800 Speaker 3: in the last few days is a shock that started 41 00:03:02,880 --> 00:03:08,120 Speaker 3: in the US migrated to Japan. It then exposed a 42 00:03:08,200 --> 00:03:12,000 Speaker 3: vulnerability that a lot of people knew about but didn't 43 00:03:12,000 --> 00:03:15,600 Speaker 3: take a seriously, and then that out got amplified, and 44 00:03:15,600 --> 00:03:17,680 Speaker 3: then it came back here one day. 45 00:03:17,919 --> 00:03:20,040 Speaker 2: The thing to me that's so important here, Mohammad, and 46 00:03:20,120 --> 00:03:22,920 Speaker 2: this goes back to your arch excellence in game theory 47 00:03:23,040 --> 00:03:26,320 Speaker 2: is a tea decision. Japan has to make a tea decision, 48 00:03:26,360 --> 00:03:29,960 Speaker 2: except it's not like ten years ago Wayley at Black Rocks, 49 00:03:30,000 --> 00:03:33,080 Speaker 2: as China, if they're lucky, will do three percent real 50 00:03:33,160 --> 00:03:37,560 Speaker 2: GDP growth. No one's prepared for that. I understand. How 51 00:03:37,560 --> 00:03:43,640 Speaker 2: did Japan adjust given the new struggling China. 52 00:03:44,000 --> 00:03:47,640 Speaker 3: So they have a financial issue and an economic issue. 53 00:03:47,640 --> 00:03:51,960 Speaker 3: The financial issue will be easier forbearans regulatory forbearers, so 54 00:03:52,640 --> 00:03:58,280 Speaker 3: they will not force sales from their financial institutions. They 55 00:03:58,320 --> 00:04:01,760 Speaker 3: will have a lot more patience with the mismatches that 56 00:04:01,800 --> 00:04:06,280 Speaker 3: the financial institutions have in terms of their wheel economy. 57 00:04:06,040 --> 00:04:11,400 Speaker 3: They face the same issue that most countries face, which 58 00:04:11,440 --> 00:04:13,520 Speaker 3: is with the exception of the US, and even the 59 00:04:13,680 --> 00:04:16,719 Speaker 3: US has a question mark over it. There isn't much 60 00:04:16,760 --> 00:04:19,800 Speaker 3: growth in the global economy. Yeah, so there will be 61 00:04:19,839 --> 00:04:23,960 Speaker 3: competing for a limited pie, and China is way ahead 62 00:04:24,000 --> 00:04:26,680 Speaker 3: of other countries trying to get a bigger share of 63 00:04:26,680 --> 00:04:27,159 Speaker 3: that pie. 64 00:04:27,560 --> 00:04:31,159 Speaker 2: I can't emphasize enough. Paul Bruce Casman, the JP Morgan 65 00:04:31,320 --> 00:04:36,400 Speaker 2: was brilliant on this. In a global tepidness, disinflation is 66 00:04:36,400 --> 00:04:39,600 Speaker 2: the overlay that affects us Mohammed. 67 00:04:40,000 --> 00:04:41,800 Speaker 4: When I started on Wall Street in the mid eighties, 68 00:04:41,880 --> 00:04:45,039 Speaker 4: a tour of duty in Tokyo was an absolute must. 69 00:04:45,080 --> 00:04:48,840 Speaker 4: That's how important Japan was to global Wall Street. But 70 00:04:48,839 --> 00:04:51,080 Speaker 4: then for the last twenty five or years or so, 71 00:04:51,120 --> 00:04:54,039 Speaker 4: we just never talked about it. What change in the 72 00:04:54,080 --> 00:04:56,680 Speaker 4: last year or two that people like Warren Buffett are saying, 73 00:04:56,720 --> 00:04:59,080 Speaker 4: you really have to pay attention to Japan. 74 00:04:59,160 --> 00:04:59,760 Speaker 5: What's changed? 75 00:05:01,240 --> 00:05:05,320 Speaker 3: So I think what's changed is the hypothesis that they 76 00:05:05,360 --> 00:05:11,400 Speaker 3: are finally exiting multi decades of economic majocrity. That is 77 00:05:11,480 --> 00:05:13,560 Speaker 3: I think what has changed, and that's why up to 78 00:05:14,600 --> 00:05:20,599 Speaker 3: July the Japanese stock market was the deer. I mean, 79 00:05:20,839 --> 00:05:22,800 Speaker 3: people find in love with the Japanese stock market in 80 00:05:22,800 --> 00:05:24,880 Speaker 3: a way that they haven't done for a very long time. 81 00:05:26,760 --> 00:05:30,400 Speaker 3: That is what has changed. But again it's important exactly 82 00:05:30,400 --> 00:05:33,960 Speaker 3: what you said, Most people stop looking at Japan, so 83 00:05:34,040 --> 00:05:36,920 Speaker 3: the understanding of Japan is not as deep as you'd 84 00:05:36,960 --> 00:05:38,919 Speaker 3: like it to be in Wall Street. 85 00:05:40,080 --> 00:05:42,480 Speaker 5: All right, Muhammad, what I'd love to get your thoughts 86 00:05:42,520 --> 00:05:43,159 Speaker 5: while we have you. 87 00:05:44,000 --> 00:05:47,000 Speaker 4: What did you experience yesterday? What did you see yesterday 88 00:05:47,320 --> 00:05:50,200 Speaker 4: in the US markets? Because, boy, yesterday morning it was 89 00:05:50,240 --> 00:05:52,680 Speaker 4: because Tom keen was not in the market, didn't know 90 00:05:52,720 --> 00:05:53,599 Speaker 4: what I took. 91 00:05:53,480 --> 00:05:55,920 Speaker 2: Off yesterday, Mohammed, I was so stunned by the New 92 00:05:56,000 --> 00:05:58,360 Speaker 2: York mess that they needed a day arrest. 93 00:05:58,680 --> 00:06:00,880 Speaker 5: What did you make of yesterday's market at action moment? 94 00:06:02,240 --> 00:06:05,080 Speaker 3: So yesterday was an example where we lost three anchors. 95 00:06:05,160 --> 00:06:08,680 Speaker 3: We lost the notion that of US economic exceptionalism. That 96 00:06:08,720 --> 00:06:12,520 Speaker 3: anchor was put in doubt with the data. We lost 97 00:06:12,520 --> 00:06:17,440 Speaker 3: the notion of policy anchors because people started calling on 98 00:06:17,520 --> 00:06:20,160 Speaker 3: the FED to do an intermeding cut. That was I mean, 99 00:06:20,200 --> 00:06:22,359 Speaker 3: there was a lot a lot of ridiculous things being said, 100 00:06:22,680 --> 00:06:26,599 Speaker 3: and we lost Tom Keane's calm voice. So you know, 101 00:06:26,720 --> 00:06:30,400 Speaker 3: it's incredible to see the two year move twenty basis 102 00:06:30,400 --> 00:06:36,080 Speaker 3: points intrasete in today. It's incredible. I mean I got 103 00:06:36,080 --> 00:06:38,919 Speaker 3: a sense, and I put this on X that we 104 00:06:39,040 --> 00:06:43,039 Speaker 3: overshot on the fixed income side. So I was quite 105 00:06:43,120 --> 00:06:48,960 Speaker 3: comfortable about treasury yields coming back. I was worried about 106 00:06:49,000 --> 00:06:53,800 Speaker 3: whether credit would be contaminated. Credit was not contaminated in 107 00:06:53,839 --> 00:06:57,600 Speaker 3: any meaningful sense yesterday. That was a pleasant surprise, and 108 00:06:57,640 --> 00:07:00,640 Speaker 3: then I was reassured that we didn't have a market 109 00:07:00,680 --> 00:07:02,800 Speaker 3: functioning problem with this. 110 00:07:02,960 --> 00:07:05,640 Speaker 2: Muhammad al Aarian of Alliance and of course Queen's College, 111 00:07:05,760 --> 00:07:09,920 Speaker 2: the University of Cambridge will continue with doctor Alarian. We 112 00:07:09,960 --> 00:07:12,200 Speaker 2: are green in the screen, not like we had on futures, 113 00:07:12,200 --> 00:07:15,520 Speaker 2: but will take it spxcept four tenths of a percent 114 00:07:15,800 --> 00:07:18,920 Speaker 2: Vicks thirty two point four to eight. That's elevated off 115 00:07:18,960 --> 00:07:23,040 Speaker 2: what we know for years. Muhammadel Aerian, I want to 116 00:07:23,040 --> 00:07:25,560 Speaker 2: go back to your game theory and the tea decision. 117 00:07:26,240 --> 00:07:30,440 Speaker 2: I take immense issue with the phrase emergency rate cut. 118 00:07:30,520 --> 00:07:34,280 Speaker 2: There's no sense of history of what central bank should use. 119 00:07:34,640 --> 00:07:38,160 Speaker 2: What is the tea decision that Jerome Powell faces after 120 00:07:38,280 --> 00:07:39,760 Speaker 2: yesterday's festivities. 121 00:07:42,080 --> 00:07:44,880 Speaker 3: The marketplace thinks it is whether to cut twenty five 122 00:07:45,000 --> 00:07:48,320 Speaker 3: fifty or seventy five in September. That is, that is 123 00:07:48,400 --> 00:07:51,120 Speaker 3: what the marketplace thinks. I would bring you to the 124 00:07:51,280 --> 00:07:55,680 Speaker 3: end of this month and Jackson Hall, he has a 125 00:07:55,800 --> 00:08:00,880 Speaker 3: golden opportunity to regain control of the policy narrative, and 126 00:08:00,960 --> 00:08:05,240 Speaker 3: to do that he has to pay some risk in 127 00:08:05,440 --> 00:08:07,760 Speaker 3: laying out what he thinks the neutral interest rate is 128 00:08:08,520 --> 00:08:10,920 Speaker 3: in discussing like the back I think has discussed what 129 00:08:11,080 --> 00:08:14,360 Speaker 3: structural changes are happening to the domestic economy and to 130 00:08:14,440 --> 00:08:18,480 Speaker 3: the global economy. So for me, his teen decision is 131 00:08:18,520 --> 00:08:24,040 Speaker 3: actually at Jackson Hall, whether he just gives a mail 132 00:08:24,120 --> 00:08:27,320 Speaker 3: in speech or whether he tries to regain control of 133 00:08:27,320 --> 00:08:27,840 Speaker 3: the policy and. 134 00:08:27,840 --> 00:08:30,720 Speaker 2: Aara Mohammed, We're gonna get the surveillance Gulf stream out 135 00:08:30,760 --> 00:08:33,000 Speaker 2: to get you to Jackson Hall for a COVID Lisa 136 00:08:33,080 --> 00:08:36,840 Speaker 2: Brahmans and I will be at Jackson Hall. With that said, Mohammed, 137 00:08:36,920 --> 00:08:40,040 Speaker 2: the heart of the matters you mentioned Boe and particularly 138 00:08:40,160 --> 00:08:43,640 Speaker 2: Leguard's ECB, and she gave a speech last year at 139 00:08:43,720 --> 00:08:46,480 Speaker 2: Jackson Excuse me, she wrote a paper last year at 140 00:08:46,559 --> 00:08:50,840 Speaker 2: Jackson Hall on this. Mohammed, We're addicted. We're in a 141 00:08:50,880 --> 00:08:56,040 Speaker 2: green spanning and measured cadence. Does that fit the events 142 00:08:56,160 --> 00:08:59,720 Speaker 2: right now or does Powell have to elucidate at Jackson 143 00:08:59,760 --> 00:09:03,760 Speaker 2: Hall that we can lose measured and be more ad hoc, 144 00:09:04,200 --> 00:09:06,719 Speaker 2: more unmeasured in our policy. 145 00:09:08,000 --> 00:09:11,720 Speaker 3: So it's really interesting because I think the FED, being 146 00:09:11,960 --> 00:09:16,200 Speaker 3: so excessively data dependent has been actually quite at hock. 147 00:09:17,280 --> 00:09:20,199 Speaker 3: The amount of pivots in the forward guidance we've had 148 00:09:20,200 --> 00:09:23,440 Speaker 3: over the last twelve months is enormous. You know. I 149 00:09:23,480 --> 00:09:26,960 Speaker 3: actually have a slide that shows every pivot and that's 150 00:09:26,960 --> 00:09:30,840 Speaker 3: a problem because if you allow data to swing you 151 00:09:30,960 --> 00:09:35,520 Speaker 3: so much, then you become an amplifier of market volatility 152 00:09:35,600 --> 00:09:39,040 Speaker 3: rather than a stabilizer. So I think they need to 153 00:09:39,040 --> 00:09:44,800 Speaker 3: be less at hock, less so data dependent, and have 154 00:09:44,960 --> 00:09:49,120 Speaker 3: the courage to be strategic, have a courage to say 155 00:09:49,200 --> 00:09:51,520 Speaker 3: this is where we think the economy is going. I 156 00:09:51,600 --> 00:09:54,160 Speaker 3: understand why they're not doing that. They tried it in 157 00:09:54,200 --> 00:09:58,079 Speaker 3: twenty twenty one with the famous transitory inflation call. They 158 00:09:58,160 --> 00:10:02,120 Speaker 3: made a horrible mistake and because that that shied away. 159 00:10:02,720 --> 00:10:04,680 Speaker 3: But that's what a central pack is supposed to do. 160 00:10:04,800 --> 00:10:07,840 Speaker 3: That is what Greenspan did, that is what Bernanke did, 161 00:10:07,960 --> 00:10:10,960 Speaker 3: that is what Yellen did, And I think it's important 162 00:10:10,960 --> 00:10:13,960 Speaker 3: for this FED to be not just data dependent, but 163 00:10:14,000 --> 00:10:16,880 Speaker 3: also to have a forward looking view of the economy. 164 00:10:17,000 --> 00:10:19,439 Speaker 4: That's a great point, Muhammad, because a lot of folks 165 00:10:19,480 --> 00:10:22,240 Speaker 4: that we speak to, both in academia and in practice, 166 00:10:22,280 --> 00:10:24,560 Speaker 4: say they're not looking at the right data. They're not 167 00:10:24,600 --> 00:10:26,280 Speaker 4: looking at the real time data. If they were looking 168 00:10:26,280 --> 00:10:28,559 Speaker 4: at the real time data, they would realize that the 169 00:10:28,600 --> 00:10:31,320 Speaker 4: economy is in fact slowing, that inflation is in flagged 170 00:10:31,360 --> 00:10:32,320 Speaker 4: under control. 171 00:10:32,320 --> 00:10:35,400 Speaker 5: And that they should be cutting rates right now. Do 172 00:10:35,440 --> 00:10:36,080 Speaker 5: you go that far? 173 00:10:37,320 --> 00:10:40,400 Speaker 3: That's why I was I called for a cut last week. 174 00:10:40,760 --> 00:10:43,520 Speaker 3: I've been arguing for the last three months that the 175 00:10:43,640 --> 00:10:47,040 Speaker 3: US economy is slowing much faster than most people anticipate. 176 00:10:47,080 --> 00:10:49,800 Speaker 3: Why because, in addition to the data, I've been listening 177 00:10:49,800 --> 00:10:52,440 Speaker 3: to the companies. I've been listening to what they're telling 178 00:10:52,520 --> 00:10:55,280 Speaker 3: us about what they're seeing in terms of demand. They 179 00:10:55,320 --> 00:10:58,480 Speaker 3: should have cut in July. They didn't. That was a mistake. 180 00:10:59,559 --> 00:11:02,679 Speaker 3: They can they can still regain control of the narrative, 181 00:11:03,080 --> 00:11:06,120 Speaker 3: but it is doing some really hard work that they 182 00:11:06,160 --> 00:11:08,240 Speaker 3: need to do and having the courage to share it 183 00:11:08,240 --> 00:11:09,320 Speaker 3: with the rest of us. 184 00:11:10,280 --> 00:11:12,880 Speaker 2: And look, but we had time for one final question, 185 00:11:13,320 --> 00:11:17,000 Speaker 2: and I got eight places to go here, but I'm 186 00:11:17,000 --> 00:11:19,160 Speaker 2: going to do an audible on your Mohammad, and we've 187 00:11:19,200 --> 00:11:22,600 Speaker 2: done this for years. We had a turnover of power, 188 00:11:23,040 --> 00:11:26,480 Speaker 2: a graceful turnover of power in England and now it 189 00:11:26,559 --> 00:11:30,720 Speaker 2: is a United Kingdom in an England descending in the 190 00:11:30,840 --> 00:11:35,880 Speaker 2: riots and protests on the streets, how do you observe that? 191 00:11:36,000 --> 00:11:40,840 Speaker 2: What can be the government response to a persistent rioting 192 00:11:41,000 --> 00:11:43,640 Speaker 2: as we see in Starmer's England. 193 00:11:45,120 --> 00:11:47,920 Speaker 3: I think it's a two step response. One is you 194 00:11:47,960 --> 00:11:51,440 Speaker 3: first try to control the immediate situation, which is what 195 00:11:51,520 --> 00:11:54,760 Speaker 3: they're trying to do. And then the second one is 196 00:11:54,800 --> 00:11:57,760 Speaker 3: to look at the cause of this and the cause 197 00:11:57,800 --> 00:12:01,880 Speaker 3: of the polarization and nation of segments of the population, 198 00:12:01,960 --> 00:12:07,319 Speaker 3: and it is about low, non inclusive growth. The new 199 00:12:07,400 --> 00:12:11,840 Speaker 3: Labor government has called growth a mission. They now have 200 00:12:11,920 --> 00:12:14,880 Speaker 3: a growth mission, so it comes right at the top 201 00:12:14,920 --> 00:12:17,679 Speaker 3: of the policy agenda. And I think that unless we 202 00:12:17,720 --> 00:12:23,520 Speaker 3: start generating high, inclusive, durable and sustainable growth, then the 203 00:12:23,600 --> 00:12:26,280 Speaker 3: social and the political fabric will come under pressure. 204 00:12:26,760 --> 00:12:30,280 Speaker 2: Doctor Larian, thank you so much. With Queen's College, University, Cambridge, 205 00:12:30,559 --> 00:12:35,040 Speaker 2: Mohammed el Arian with an important timely discussion, particularly there 206 00:12:35,480 --> 00:12:49,640 Speaker 2: on Japan. Bandeep Singh joins us right now, Bloomberg Intelligence 207 00:12:49,920 --> 00:12:51,360 Speaker 2: Share Buybeck Reporter. 208 00:12:51,920 --> 00:12:53,199 Speaker 6: What do you do with these company? 209 00:12:53,200 --> 00:12:54,880 Speaker 2: I mean, we've got like eight things to talk about. 210 00:12:55,000 --> 00:12:57,640 Speaker 2: Who cares about Google? And a federal lawsuit? 211 00:12:57,800 --> 00:13:01,800 Speaker 6: Man Deep, They're sitting there, fat and happy they get 212 00:13:01,840 --> 00:13:05,280 Speaker 6: an x percent decline, don't they just do they literally 213 00:13:05,320 --> 00:13:07,840 Speaker 6: pick up the phone and call somebody and say buy 214 00:13:07,920 --> 00:13:09,240 Speaker 6: six million shares back. 215 00:13:09,920 --> 00:13:13,400 Speaker 7: Well, I think in the case of Alphabet, clearly we 216 00:13:13,720 --> 00:13:16,440 Speaker 7: saw this coming in terms of you know, which way 217 00:13:16,520 --> 00:13:19,880 Speaker 7: the judge was leaning and the wordict is going to 218 00:13:19,880 --> 00:13:24,200 Speaker 7: be what it turned out in this case. Clearly they 219 00:13:24,200 --> 00:13:26,800 Speaker 7: feel they need to change the business model in terms 220 00:13:26,840 --> 00:13:30,520 Speaker 7: of paying to Apple and look, I don't think it 221 00:13:30,640 --> 00:13:34,360 Speaker 7: changes anything for Google in the sense that the search 222 00:13:34,400 --> 00:13:37,120 Speaker 7: engine is still the most warmed when it comes to 223 00:13:37,480 --> 00:13:41,480 Speaker 7: the user preferences. Do they have an appeal, Yeah, they 224 00:13:42,080 --> 00:13:45,120 Speaker 7: will appeal, and I think they'll try to come up 225 00:13:45,160 --> 00:13:49,000 Speaker 7: with remedies where people can change the options for search, 226 00:13:49,080 --> 00:13:52,320 Speaker 7: the default for search easier than they're used to now, 227 00:13:52,400 --> 00:13:54,240 Speaker 7: and that could be one. 228 00:13:54,120 --> 00:13:57,280 Speaker 2: Of all I know is anything but that's my search. 229 00:13:57,640 --> 00:14:00,840 Speaker 5: Matt Miller's a big guy. Matt Miller's mill is. 230 00:14:02,840 --> 00:14:03,440 Speaker 3: No, why not? 231 00:14:03,880 --> 00:14:06,000 Speaker 5: Yes, I mean we're like the rest of us. I 232 00:14:06,000 --> 00:14:08,680 Speaker 5: mean so, I mean in Tom the biggest issues. 233 00:14:08,679 --> 00:14:11,120 Speaker 4: I mean, the stock is actually unchanged on this news 234 00:14:11,120 --> 00:14:13,520 Speaker 4: That tells you, I guess what we need to know here, 235 00:14:13,880 --> 00:14:17,120 Speaker 4: But the reality is mandeep invest This kind of reminds 236 00:14:17,120 --> 00:14:19,720 Speaker 4: me of Microsoft twenty five years ago. 237 00:14:20,200 --> 00:14:22,240 Speaker 5: I mean, you know, there's gonna be Remedies's just going. 238 00:14:22,200 --> 00:14:23,680 Speaker 4: To be fixed this, But at the end of the day, 239 00:14:24,480 --> 00:14:27,320 Speaker 4: it just doesn't matter. Is that what investors are telling 240 00:14:27,360 --> 00:14:28,400 Speaker 4: you here about Google? 241 00:14:28,480 --> 00:14:31,040 Speaker 7: Yeah, there will be a behavior change in terms of, 242 00:14:31,200 --> 00:14:34,600 Speaker 7: you know, how these partnerships are done. The traffic acquisition costs. 243 00:14:34,640 --> 00:14:38,600 Speaker 7: It's a twenty five billion dollar line item for Google. Now, 244 00:14:38,600 --> 00:14:41,320 Speaker 7: I imagine if they don't have to pay, but still 245 00:14:41,440 --> 00:14:44,280 Speaker 7: their product is the best, then that adds up to 246 00:14:44,320 --> 00:14:47,920 Speaker 7: the gross margin. So actually they could be upside provided 247 00:14:48,400 --> 00:14:51,000 Speaker 7: you know, nothing else changes in terms of the back component. 248 00:14:51,160 --> 00:14:52,160 Speaker 2: Is that monopoly? 249 00:14:53,440 --> 00:14:56,360 Speaker 7: I think again, there is a pending DJ lawsuit in 250 00:14:56,440 --> 00:14:59,200 Speaker 7: terms of what they do at the app store level, 251 00:14:59,320 --> 00:15:02,320 Speaker 7: and clearly they would have to change their behavior as well. 252 00:15:02,360 --> 00:15:05,960 Speaker 2: But forget about all this legal stuff. I don't care 253 00:15:06,000 --> 00:15:08,520 Speaker 2: Greg store cares. I don't care. What I care about 254 00:15:08,560 --> 00:15:12,640 Speaker 2: is yesterday's tantrum. We had to vix out eight standard deviations. 255 00:15:13,240 --> 00:15:16,680 Speaker 2: What did tech animals do at a time like this. 256 00:15:17,480 --> 00:15:22,240 Speaker 7: I'd think this earning season was kind of a reaffirmation 257 00:15:22,440 --> 00:15:26,600 Speaker 7: of the AI trade. That all the companies suggested they 258 00:15:26,600 --> 00:15:30,760 Speaker 7: are spending more on AI and they truly believe in 259 00:15:30,800 --> 00:15:33,920 Speaker 7: this super cycle. So I think market will make that 260 00:15:34,040 --> 00:15:37,040 Speaker 7: distinction in terms of what are the true AI players 261 00:15:37,040 --> 00:15:39,560 Speaker 7: that will benefit in the near term versus where the 262 00:15:39,640 --> 00:15:42,840 Speaker 7: valuation is stretched and the money is nowhere in sight 263 00:15:43,040 --> 00:15:46,040 Speaker 7: and you're starting to see that. I think yesterday was 264 00:15:46,080 --> 00:15:48,400 Speaker 7: one of the instances where the whole market's sold off, 265 00:15:48,640 --> 00:15:52,560 Speaker 7: but then you saw stocks bounced very quickly because. 266 00:15:52,320 --> 00:15:55,600 Speaker 2: There's that Tim Cook buying back stock. I mean, if 267 00:15:55,640 --> 00:15:57,640 Speaker 2: you like it, come on, if you liked the Apple 268 00:15:57,680 --> 00:16:00,840 Speaker 2: three weeks ago, you really liked it today at twelve 269 00:16:00,920 --> 00:16:02,320 Speaker 2: noon you did. 270 00:16:02,400 --> 00:16:05,680 Speaker 7: And that's where I think the top line growth really 271 00:16:05,760 --> 00:16:09,640 Speaker 7: matters in terms of, you know, what these companies deliver 272 00:16:09,800 --> 00:16:13,040 Speaker 7: over the next twelve months, because not every company will 273 00:16:13,080 --> 00:16:15,360 Speaker 7: be able to deliver double digit top line growth. And 274 00:16:15,440 --> 00:16:18,200 Speaker 7: I would put Apple in that penalty box where there 275 00:16:18,240 --> 00:16:21,200 Speaker 7: isn't a clear path to double digit top line growth. 276 00:16:21,240 --> 00:16:24,160 Speaker 4: It seems to me the AI story has gone from 277 00:16:24,680 --> 00:16:26,760 Speaker 4: I just want to buy AI. I don't care how 278 00:16:26,800 --> 00:16:28,960 Speaker 4: I get it. I'm not sure whether it's the chips 279 00:16:29,000 --> 00:16:31,880 Speaker 4: or the software or whatever. Now I think investors starting 280 00:16:31,920 --> 00:16:34,320 Speaker 4: to ask the second question, the second derivative question, is 281 00:16:34,600 --> 00:16:37,960 Speaker 4: what's the return on all this investment? How do you 282 00:16:38,000 --> 00:16:42,280 Speaker 4: frame that question to your investor clients you talk to, Where. 283 00:16:42,120 --> 00:16:44,520 Speaker 5: Is the payoff? Where do you find it? In the 284 00:16:44,560 --> 00:16:45,080 Speaker 5: tech stack? 285 00:16:45,720 --> 00:16:48,800 Speaker 7: Microsoft? I mean they are the ones who are quantifying 286 00:16:48,840 --> 00:16:51,960 Speaker 7: that AI contribution five billion dollar rund rate out of 287 00:16:52,040 --> 00:16:55,680 Speaker 7: their eighty billion dollar cloud business copilot revenue three hundred 288 00:16:55,720 --> 00:16:59,200 Speaker 7: billion for a three hundred million for copilot GitHub copilot. 289 00:16:59,280 --> 00:17:02,960 Speaker 7: So instances like this where the company is framing the 290 00:17:03,080 --> 00:17:08,440 Speaker 7: AI portion accurately and giving you a runway of how 291 00:17:08,480 --> 00:17:10,760 Speaker 7: they expect things to evolve, I think those are the 292 00:17:10,760 --> 00:17:12,560 Speaker 7: proof points that investors are looking for. 293 00:17:12,680 --> 00:17:14,680 Speaker 5: And we're singing on the advertising side, I mean, I 294 00:17:14,760 --> 00:17:16,840 Speaker 5: think the you know talks us. 295 00:17:16,760 --> 00:17:19,720 Speaker 4: About how AI is used by a Google and Amazon, 296 00:17:19,920 --> 00:17:22,480 Speaker 4: a Meta in terms of you know, giving a better 297 00:17:22,480 --> 00:17:23,440 Speaker 4: advertising product. 298 00:17:23,560 --> 00:17:27,080 Speaker 7: Yeah, I mean Meta's print earnings dis order was another 299 00:17:27,160 --> 00:17:31,359 Speaker 7: proof point of how they are leveraging AI for you know, 300 00:17:31,600 --> 00:17:34,199 Speaker 7: more targeted ads, and it's reflected in the ESPs. 301 00:17:34,320 --> 00:17:37,200 Speaker 2: So in your experience, man, what does a guy like Zuckerberg? 302 00:17:37,280 --> 00:17:40,480 Speaker 2: Do you see his new look? He dressed up for 303 00:17:41,119 --> 00:17:43,320 Speaker 2: Emily Chang? Really he's got the curly here. 304 00:17:43,359 --> 00:17:45,600 Speaker 5: I saw gold chain, I saw his new yacht and 305 00:17:45,720 --> 00:17:46,359 Speaker 5: that's what I'm paying. 306 00:17:48,240 --> 00:17:48,480 Speaker 7: Wow. 307 00:17:48,840 --> 00:17:52,520 Speaker 2: What does what do the players do in technology when 308 00:17:52,520 --> 00:17:56,640 Speaker 2: you crater like we did yesterday? Well, they'd buy more, right. 309 00:17:56,640 --> 00:17:59,200 Speaker 7: I think again, they have the balance sheet to both 310 00:17:59,280 --> 00:18:01,800 Speaker 7: do the kappack as well as buy back their own stock. 311 00:18:01,880 --> 00:18:05,400 Speaker 7: And every company, large tech company seem to be more 312 00:18:05,480 --> 00:18:09,560 Speaker 7: shareholder friendly right now, given you know they want to 313 00:18:09,560 --> 00:18:10,920 Speaker 7: be better at capital allocation. 314 00:18:11,600 --> 00:18:14,760 Speaker 2: Okay, so what were you doing yesterday with a visit? 315 00:18:14,920 --> 00:18:15,280 Speaker 8: What was it? 316 00:18:15,400 --> 00:18:16,440 Speaker 2: Sixty to fifty. 317 00:18:16,280 --> 00:18:18,639 Speaker 5: Sixty something else sixty in the morning? 318 00:18:18,720 --> 00:18:21,720 Speaker 7: Okay? I think there was nothing in the fundamentals to 319 00:18:21,920 --> 00:18:24,360 Speaker 7: justify that kind of move, and you just sit back 320 00:18:24,440 --> 00:18:26,680 Speaker 7: and see how the market morning tea. 321 00:18:26,760 --> 00:18:29,840 Speaker 4: And how about in Vidiot, what's going on with the chip? 322 00:18:30,000 --> 00:18:31,600 Speaker 4: They get a problem with their chips or something. 323 00:18:31,680 --> 00:18:34,080 Speaker 7: Now that is a big risk. So this is not 324 00:18:34,200 --> 00:18:37,800 Speaker 7: a recurring business like a Microsoft or you know, the ads. 325 00:18:37,560 --> 00:18:39,760 Speaker 5: Business coming up on new chips, right, Yeah. 326 00:18:39,520 --> 00:18:43,000 Speaker 7: And the moment market suspects there is some sort of delay. 327 00:18:43,160 --> 00:18:45,879 Speaker 7: That's when you see a violent reaction. So the Nvidia 328 00:18:45,960 --> 00:18:48,560 Speaker 7: move didn't surprise me. But that's a risk you have, 329 00:18:48,680 --> 00:18:51,160 Speaker 7: and you grow triple digits off such a large base, 330 00:18:51,560 --> 00:18:54,159 Speaker 7: it's very hard to keep repeating that, especially when the 331 00:18:54,200 --> 00:18:56,200 Speaker 7: product cadence gets disrupted. 332 00:18:56,359 --> 00:18:59,120 Speaker 2: MANDI thank you so much. Many sing with us. It'd 333 00:18:59,119 --> 00:19:06,760 Speaker 2: sorry stopped by technology today after what we saw yesterday. 334 00:19:07,040 --> 00:19:09,719 Speaker 2: So Lindsay pegs of now she has been really alone 335 00:19:09,760 --> 00:19:15,280 Speaker 2: wolf saying rate cuts really perhaps off the mark. Doctor 336 00:19:15,320 --> 00:19:17,520 Speaker 2: Piagson joins now from Steph Lindsay, I want to get 337 00:19:17,520 --> 00:19:19,520 Speaker 2: this out of the way because I got other things 338 00:19:19,520 --> 00:19:22,960 Speaker 2: to talk about this morning. You have said, slow down, 339 00:19:23,119 --> 00:19:25,960 Speaker 2: we're not going to see fourteen rate cuts. How do 340 00:19:26,000 --> 00:19:29,440 Speaker 2: you respond to the modeled twenty eight rate cuts we're 341 00:19:29,480 --> 00:19:31,120 Speaker 2: expecting to see by the end of the year. 342 00:19:32,160 --> 00:19:34,359 Speaker 1: Well, I think let's back up and just focus on 343 00:19:34,400 --> 00:19:37,359 Speaker 1: September at this point, and a September rate cut is 344 00:19:37,359 --> 00:19:40,240 Speaker 1: still a possibility and very much on the table. But 345 00:19:40,359 --> 00:19:43,080 Speaker 1: if we put it in the context of what we 346 00:19:43,200 --> 00:19:46,879 Speaker 1: saw in the statement. The statement suggests that the FED 347 00:19:47,119 --> 00:19:51,520 Speaker 1: remains data dependent and that policymakers are not yet convinced 348 00:19:51,560 --> 00:19:56,439 Speaker 1: that the recent reports give enough confidence that inflation has moderated. 349 00:19:56,680 --> 00:19:59,280 Speaker 1: So if we're just looking at the statement, that means 350 00:19:59,280 --> 00:20:01,400 Speaker 1: that the FED it hasn't made a decision. It's still 351 00:20:01,400 --> 00:20:04,280 Speaker 1: fifty to thirty at this and I'm going to the 352 00:20:04,320 --> 00:20:05,560 Speaker 1: incoming inflation data. 353 00:20:05,640 --> 00:20:08,200 Speaker 2: What I see, Lindsay, is the third chart I looked 354 00:20:08,200 --> 00:20:10,520 Speaker 2: at this morning. First one was red sox medtal relief, 355 00:20:10,920 --> 00:20:13,160 Speaker 2: next one was on the end. And the third chart 356 00:20:13,200 --> 00:20:19,199 Speaker 2: I looked at, Doctor Paeza was a brain freeze. I 357 00:20:19,240 --> 00:20:20,400 Speaker 2: can't take a day. 358 00:20:20,240 --> 00:20:23,399 Speaker 5: Off it it just ghost al rhythm, Lindsay. 359 00:20:23,720 --> 00:20:29,200 Speaker 2: It was the whole FED frenzy about an emergency rate cut. 360 00:20:29,560 --> 00:20:34,480 Speaker 2: I got Atlanta GDP now above two percent. Do you 361 00:20:34,640 --> 00:20:38,399 Speaker 2: model out GDP so weak that they've got to do 362 00:20:38,480 --> 00:20:40,720 Speaker 2: an emergency rate cut. 363 00:20:41,000 --> 00:20:43,080 Speaker 1: No, I don't see that. I think this is a 364 00:20:43,119 --> 00:20:45,280 Speaker 1: notion of again the market getting ahead of the FED. 365 00:20:45,320 --> 00:20:48,119 Speaker 1: When we looked at the underlying economy, as you said, 366 00:20:48,119 --> 00:20:50,800 Speaker 1: we've gained momentum from Q one to Q two. The 367 00:20:50,880 --> 00:20:54,360 Speaker 1: consumer has picked up momentum, The labor market I can 368 00:20:54,400 --> 00:20:58,399 Speaker 1: see has lost some momentum, but it still remains, to 369 00:20:58,480 --> 00:21:02,119 Speaker 1: use Paul's words, solid job gains are still solid. The 370 00:21:02,200 --> 00:21:05,639 Speaker 1: unemployment rate is still low, and so there's nothing that 371 00:21:05,720 --> 00:21:09,919 Speaker 1: suggests a level of urgency, let alone and need for 372 00:21:09,960 --> 00:21:12,960 Speaker 1: the FED to step in and provide support to the economy. Now, 373 00:21:12,960 --> 00:21:17,000 Speaker 1: they certainly want to perpetuate ongoing positive conditions, which is 374 00:21:17,040 --> 00:21:21,320 Speaker 1: why they are considering a near term rate reduction. But again, 375 00:21:21,840 --> 00:21:26,040 Speaker 1: if inflation does not come in as expected, it's going 376 00:21:26,080 --> 00:21:28,959 Speaker 1: to be difficult for the FED to justify that rate cut. 377 00:21:29,400 --> 00:21:31,960 Speaker 1: That being said, I think the onus is on the 378 00:21:32,040 --> 00:21:36,040 Speaker 1: data to convince policy makers not to move come September. 379 00:21:36,400 --> 00:21:40,280 Speaker 1: So if we do see any further minimal progress, it's 380 00:21:40,480 --> 00:21:44,840 Speaker 1: likely to offer enough justification to appease the market and 381 00:21:44,960 --> 00:21:46,840 Speaker 1: cut rates in just about six weeks. 382 00:21:46,640 --> 00:21:49,119 Speaker 2: Now, I mean, the definition is solid. We don't have 383 00:21:49,200 --> 00:21:52,399 Speaker 2: time to talk about this because it was on a sabbatical, Paul. 384 00:21:52,520 --> 00:21:54,920 Speaker 2: The Yankees took three games from the Phillies. 385 00:21:55,040 --> 00:21:58,919 Speaker 5: I am that's solid solid, that's solid baseball. So, lindsay, 386 00:21:58,960 --> 00:21:59,879 Speaker 5: where all this started. 387 00:21:59,880 --> 00:22:02,840 Speaker 4: All this volatility started really on Friday in the morning, 388 00:22:02,880 --> 00:22:05,120 Speaker 4: when we saw the change in non farm payrolls came 389 00:22:05,160 --> 00:22:08,719 Speaker 4: in I guess, materially weaker, noticeably weaker than expected, and 390 00:22:08,760 --> 00:22:12,080 Speaker 4: the unemployment rate ticked up to four point three percent. 391 00:22:13,800 --> 00:22:17,000 Speaker 4: Where's the level where the FED really gets concerned? Let 392 00:22:17,040 --> 00:22:18,879 Speaker 4: me just taking a look at that unemployment rate, it 393 00:22:18,920 --> 00:22:21,200 Speaker 4: sort Do you think there's a level where they say. 394 00:22:21,160 --> 00:22:23,879 Speaker 5: Oh boy, we really need to act. Are we there yet? 395 00:22:24,920 --> 00:22:26,639 Speaker 1: We're not there yet. If you look at where the 396 00:22:26,680 --> 00:22:29,040 Speaker 1: Fed is putting the full employment range, we're still well 397 00:22:29,080 --> 00:22:32,080 Speaker 1: below the lower bound. And yes, we have seen month 398 00:22:32,160 --> 00:22:34,880 Speaker 1: to month volatility in terms of hiring, but the three 399 00:22:34,920 --> 00:22:37,960 Speaker 1: month average actually rose last month to one hundred and 400 00:22:38,040 --> 00:22:42,199 Speaker 1: seventy thousand, and we're still seeing widespread job gains across 401 00:22:42,240 --> 00:22:46,439 Speaker 1: a number of different categories. So it's really hard to 402 00:22:46,680 --> 00:22:50,560 Speaker 1: identify this sense of urgency where this clear sense of 403 00:22:50,600 --> 00:22:53,240 Speaker 1: weakness that the market seems to be honing in on 404 00:22:54,000 --> 00:22:54,760 Speaker 1: recession call? 405 00:22:54,880 --> 00:22:57,640 Speaker 4: Is that something that I mean, we've been talking about 406 00:22:57,640 --> 00:22:59,359 Speaker 4: it for a couple of years now, But is this 407 00:22:59,400 --> 00:23:02,439 Speaker 4: a twenty four I mean, I'm sorry, twenty five event 408 00:23:02,480 --> 00:23:04,840 Speaker 4: that is more than likely to occur? 409 00:23:05,760 --> 00:23:08,000 Speaker 1: Well, I think the risk of recession is still very real. 410 00:23:08,040 --> 00:23:10,520 Speaker 1: I would put it in double digit territory around twenty 411 00:23:10,520 --> 00:23:12,800 Speaker 1: five to thirty percent when we look out to twenty 412 00:23:12,840 --> 00:23:17,160 Speaker 1: twenty five and beyond. But my bigger concern is not 413 00:23:17,200 --> 00:23:20,600 Speaker 1: that the US economy falls into negative territory or an 414 00:23:20,640 --> 00:23:24,400 Speaker 1: outright recession, but the notion that we allow the economy 415 00:23:24,440 --> 00:23:28,960 Speaker 1: to slow, but the FED continues to tolerate above target inflation, 416 00:23:29,560 --> 00:23:34,240 Speaker 1: slow growth, elevated prices, the very definition of stagflation. That's 417 00:23:34,320 --> 00:23:37,840 Speaker 1: the bigger concern for the economy because at that point 418 00:23:37,920 --> 00:23:42,320 Speaker 1: the FEDS and traditional monetary policy tools are rendered less 419 00:23:42,359 --> 00:23:45,280 Speaker 1: effective in supporting the economy or taming inflation. 420 00:23:45,600 --> 00:23:51,280 Speaker 2: Lindsay parse domestic final sales are domestic economy from the 421 00:23:51,359 --> 00:23:54,639 Speaker 2: other noise off Atlanta GDP. Now, can you get to 422 00:23:54,760 --> 00:23:58,720 Speaker 2: a domestic final sales that is recessionary? 423 00:23:59,000 --> 00:24:01,320 Speaker 1: No, certainly not an act. When we strip out some 424 00:24:01,359 --> 00:24:03,840 Speaker 1: of those more volatile components and we look at that 425 00:24:04,000 --> 00:24:08,400 Speaker 1: core that domestic final purchases excuse me, final domestic purchases, 426 00:24:09,320 --> 00:24:12,600 Speaker 1: what we see is an even stronger growth rate up 427 00:24:12,640 --> 00:24:16,680 Speaker 1: near or three percent. So again, when we're talking about 428 00:24:16,800 --> 00:24:20,800 Speaker 1: economy that has accelerated in terms of underlying momentum and 429 00:24:20,880 --> 00:24:23,359 Speaker 1: gained even further traction when we strip out some of 430 00:24:23,359 --> 00:24:27,680 Speaker 1: those volatile trade and inventory components, it's difficult to take 431 00:24:27,720 --> 00:24:30,000 Speaker 1: a ten thousand foot view and say this is an 432 00:24:30,040 --> 00:24:33,639 Speaker 1: economy that needs weaker policy. This is an economy that 433 00:24:33,800 --> 00:24:38,440 Speaker 1: needs FED support, and it simply does not come justified 434 00:24:38,520 --> 00:24:39,280 Speaker 1: via the data. 435 00:24:39,359 --> 00:24:41,400 Speaker 2: Paul, Well, you look at the data when you take 436 00:24:41,440 --> 00:24:45,000 Speaker 2: one day off sabbatical. Can you see that the economy 437 00:24:45,119 --> 00:24:50,600 Speaker 2: is being supported by lazy teenagers ordering breakfast from seamless. Exactly, 438 00:24:50,600 --> 00:24:51,280 Speaker 2: I've seen. 439 00:24:51,119 --> 00:24:56,200 Speaker 5: That, exactly. That's not Yeah, that is definitely an issue. 440 00:24:56,280 --> 00:24:59,240 Speaker 4: So lindsay, on Friday, if you looked across social media, 441 00:24:59,280 --> 00:25:01,359 Speaker 4: a lot of folks are coming out saying, see, I 442 00:25:01,440 --> 00:25:04,560 Speaker 4: told you so, this economy is slower, it's weaker than expected. 443 00:25:04,920 --> 00:25:07,439 Speaker 5: This fed's behind the curve. They need to start cutting rates. 444 00:25:07,920 --> 00:25:10,760 Speaker 5: Now what do you say to those folks, Well, I. 445 00:25:10,680 --> 00:25:12,919 Speaker 1: Think that's the same message the market has been sending 446 00:25:12,920 --> 00:25:15,399 Speaker 1: for the past two years, and investors have been wrong. 447 00:25:15,800 --> 00:25:18,480 Speaker 1: They've been preemptively calling for an end to rate hikes 448 00:25:18,520 --> 00:25:21,240 Speaker 1: and then pricing in a series of rate reductions that 449 00:25:21,280 --> 00:25:23,679 Speaker 1: have yet to come to fruition. And I think, again, 450 00:25:23,760 --> 00:25:25,960 Speaker 1: going back to the statement, it fell short of the 451 00:25:26,000 --> 00:25:30,720 Speaker 1: market's expectations for a commitment to a September reduction. The 452 00:25:30,720 --> 00:25:33,520 Speaker 1: Fed still honing in on inflation which they set is 453 00:25:33,560 --> 00:25:36,160 Speaker 1: still elevated, and they do not expect that it will 454 00:25:36,160 --> 00:25:40,160 Speaker 1: be appropriate to reduce that range until they gain greater confidence. 455 00:25:40,480 --> 00:25:43,960 Speaker 1: So that means they don't have confidence at this point, 456 00:25:44,200 --> 00:25:46,920 Speaker 1: and I think the market is really missing that underlying 457 00:25:47,000 --> 00:25:49,840 Speaker 1: message that it's going to depend on the incoming data. 458 00:25:49,880 --> 00:25:52,320 Speaker 1: And keep in mind that with less than half the 459 00:25:52,400 --> 00:25:55,080 Speaker 1: year left and those base effects from twenty twenty three 460 00:25:55,320 --> 00:25:58,080 Speaker 1: likely reducing in the second half of the year, the 461 00:25:58,240 --> 00:26:01,840 Speaker 1: risk is to the upside a lack of downward momentum 462 00:26:01,880 --> 00:26:03,840 Speaker 1: to gain that confidence for the committee. 463 00:26:03,880 --> 00:26:08,480 Speaker 2: Doctor Pieason, thank you so much and congratulations the outlier brilliance. 464 00:26:08,560 --> 00:26:12,240 Speaker 2: Lindsey piags with your own pose saying everybody calmed down, 465 00:26:12,800 --> 00:26:27,280 Speaker 2: We're waiting as well. She is with a steph joining 466 00:26:27,359 --> 00:26:29,560 Speaker 2: us now in an honor she's given us so much. 467 00:26:29,600 --> 00:26:33,160 Speaker 2: Wendy Schiller is at Brown University, and to review again, 468 00:26:33,240 --> 00:26:37,160 Speaker 2: she is a definitive textbook, basically CIVIX one on one, 469 00:26:37,760 --> 00:26:40,439 Speaker 2: which years and years ago was a required read, and 470 00:26:40,480 --> 00:26:43,600 Speaker 2: now in the state of our political ignorance, is a 471 00:26:43,720 --> 00:26:48,320 Speaker 2: Nation is a must read. Wendy Schiller joins us this morning. 472 00:26:48,800 --> 00:26:54,560 Speaker 2: Wendy spirot agnew dan Quall. I can't remember the Vice 473 00:26:54,640 --> 00:26:58,000 Speaker 2: president FDR had that Wallace. I think it was I'm 474 00:26:58,000 --> 00:27:00,760 Speaker 2: guessing does it really matter. 475 00:27:00,680 --> 00:27:01,800 Speaker 3: Who the VP is? 476 00:27:03,560 --> 00:27:08,879 Speaker 8: Well, yeah, Rose also had Garner. I think it does 477 00:27:09,359 --> 00:27:12,040 Speaker 8: matter in the sense of do no harm. I mean, 478 00:27:12,040 --> 00:27:15,120 Speaker 8: I think that's the first principle of choosing a VP. Clearly, 479 00:27:15,280 --> 00:27:18,920 Speaker 8: in my opinion, Kama Harris chose the most quote unquote 480 00:27:18,960 --> 00:27:22,080 Speaker 8: neutral within the Democratic Party. In other words, nobody who 481 00:27:22,080 --> 00:27:26,840 Speaker 8: had any baggage with key constituencies like the unions, like 482 00:27:26,880 --> 00:27:30,800 Speaker 8: people are very passionate about Israel, Gaza. I think that's 483 00:27:30,840 --> 00:27:35,280 Speaker 8: and school choice, particularly the teachers' unions in terms of vouchers, 484 00:27:35,280 --> 00:27:38,800 Speaker 8: like Joshpiro. So she went with the person who will 485 00:27:38,800 --> 00:27:41,440 Speaker 8: do no harm. You know, whether this is somebody who 486 00:27:41,440 --> 00:27:45,720 Speaker 8: will attract more attention positively to the ticket. It's unclear 487 00:27:45,960 --> 00:27:48,480 Speaker 8: those people haven't paid that much attention. Humphrey was a 488 00:27:48,520 --> 00:27:52,240 Speaker 8: really good VP, Mondale was a really good VP. Minnesota 489 00:27:52,240 --> 00:27:55,600 Speaker 8: has a pretty good track record, but they both failed 490 00:27:55,680 --> 00:27:56,719 Speaker 8: to win the presidency. 491 00:27:57,000 --> 00:28:00,240 Speaker 2: Well, thank you, thank you, thank you for that observation. Okay, 492 00:28:00,280 --> 00:28:03,640 Speaker 2: let's go back to AJJH. Mondale. There is a character 493 00:28:03,760 --> 00:28:08,520 Speaker 2: to the progressive democratic politics of Minnesota. Is Tim Walls 494 00:28:08,600 --> 00:28:13,080 Speaker 2: a follow on to the Germanic democratic what I'm going 495 00:28:13,160 --> 00:28:16,280 Speaker 2: to call socialism of the nineteen thirties forties? Or is 496 00:28:16,320 --> 00:28:19,959 Speaker 2: he removed from the heritage of Minnesota politics. 497 00:28:21,040 --> 00:28:24,360 Speaker 8: No, I think he exemplifies the heritage of Minnesota politics, 498 00:28:24,359 --> 00:28:27,679 Speaker 8: particularly for Humphrey. People may not know that Humphrey actually 499 00:28:27,680 --> 00:28:30,439 Speaker 8: worked hard to transform the Senate, which was dominated by 500 00:28:30,600 --> 00:28:34,120 Speaker 8: very conservative southern Democrats when he first arrived, and by 501 00:28:34,160 --> 00:28:36,600 Speaker 8: the time he left, it was dominated by a more 502 00:28:36,680 --> 00:28:40,239 Speaker 8: sort of northern liberal wing of the Democrat Party. So 503 00:28:40,480 --> 00:28:43,000 Speaker 8: they have been transformative in a lot of ways Minnesota 504 00:28:43,000 --> 00:28:46,239 Speaker 8: politicians because they come with a really diverse constituency, so 505 00:28:46,240 --> 00:28:47,920 Speaker 8: they can speak to a lot of different people, which 506 00:28:47,960 --> 00:28:49,560 Speaker 8: is probably why she chose him. 507 00:28:49,640 --> 00:28:51,880 Speaker 2: Do you see how her voice changes when she gets 508 00:28:51,880 --> 00:28:53,360 Speaker 2: into the Schiller lecture mode? 509 00:28:53,480 --> 00:28:54,400 Speaker 5: Exactly? 510 00:28:55,400 --> 00:28:56,120 Speaker 2: Save me here. 511 00:28:56,200 --> 00:28:59,600 Speaker 5: Pay attention, Wendy, how do you think. 512 00:29:01,120 --> 00:29:04,800 Speaker 4: Vice President Harrison will use mister Walls on the campaign 513 00:29:04,840 --> 00:29:06,640 Speaker 4: trail between now and the electric question? 514 00:29:08,200 --> 00:29:10,840 Speaker 8: You know, it seems to me that she made a 515 00:29:11,000 --> 00:29:13,440 Speaker 8: choice even though she didn't take you care from Pennsylvania 516 00:29:13,600 --> 00:29:17,280 Speaker 8: to really worry about Wisconsin, Michigan and Pennsylvania. You know, 517 00:29:17,320 --> 00:29:20,880 Speaker 8: Minnesota is in the neighbors Wisconsin and really using walls 518 00:29:20,920 --> 00:29:25,960 Speaker 8: in those states to mobilize particularly Unions, but also independent voters, 519 00:29:26,000 --> 00:29:30,080 Speaker 8: also rural constituents who may not be enamored with Donald 520 00:29:30,080 --> 00:29:32,280 Speaker 8: Trump these days. You know, maybe he can go to 521 00:29:32,320 --> 00:29:35,040 Speaker 8: North Carolina, which has a lot of those elements as well, 522 00:29:35,520 --> 00:29:38,520 Speaker 8: but I think that's where she's probably going to center him, 523 00:29:39,320 --> 00:29:43,000 Speaker 8: and she may herself try to spend more time, particularly 524 00:29:43,040 --> 00:29:46,160 Speaker 8: in Nevada or that Democratic base is powered by women 525 00:29:46,200 --> 00:29:49,960 Speaker 8: of color, particularly Union women of color, and even and Georgia, 526 00:29:50,040 --> 00:29:52,880 Speaker 8: of course, where the black vote is just absolutely key 527 00:29:53,240 --> 00:29:54,920 Speaker 8: to having any chance of winning it. 528 00:29:55,440 --> 00:29:58,240 Speaker 2: In the time we got left, Professor Schiller, I asked 529 00:29:58,320 --> 00:30:01,120 Speaker 2: us of Joe Matthew, it's a SNAr question because it's 530 00:30:01,160 --> 00:30:03,520 Speaker 2: snarky out on Twitter, but I've got to go. There 531 00:30:04,400 --> 00:30:09,240 Speaker 2: is Harris being told what to do by the royalty 532 00:30:09,320 --> 00:30:11,880 Speaker 2: of the Democratic Party. 533 00:30:13,080 --> 00:30:16,560 Speaker 8: I have no idea, but they have leaked, whether it's 534 00:30:16,600 --> 00:30:20,560 Speaker 8: strategic or not, that Obama President form President Barack Obama 535 00:30:20,720 --> 00:30:23,200 Speaker 8: has been on the phone with her has been counseling her, 536 00:30:23,200 --> 00:30:26,040 Speaker 8: and she did take, among others, David Ploff, very high 537 00:30:26,040 --> 00:30:27,480 Speaker 8: senior adviserwer what does. 538 00:30:27,360 --> 00:30:30,000 Speaker 2: Mister Pluff do for him? Does he get coffee for 539 00:30:30,480 --> 00:30:31,479 Speaker 2: What's David Pluff? 540 00:30:31,480 --> 00:30:32,080 Speaker 5: He's been on the. 541 00:30:32,080 --> 00:30:35,800 Speaker 2: Show many times. What does he do for the vice president? 542 00:30:36,520 --> 00:30:39,280 Speaker 8: It's swing state strategy. I mean that's what he does, 543 00:30:39,520 --> 00:30:42,920 Speaker 8: and that's what they focused on, not only in a 544 00:30:42,960 --> 00:30:45,200 Speaker 8: general election but also in the primaries against Hillary Clinton 545 00:30:45,240 --> 00:30:48,040 Speaker 8: two thousand and eight. I mean, this is their specialty 546 00:30:48,440 --> 00:30:51,360 Speaker 8: and that's what his job will be. Whether she listens 547 00:30:51,680 --> 00:30:54,240 Speaker 8: to this advice is the big question. I think a 548 00:30:54,280 --> 00:30:56,760 Speaker 8: lot of people are asking, and we'll have to wait 549 00:30:56,760 --> 00:30:57,080 Speaker 8: and see. 550 00:30:57,240 --> 00:30:59,720 Speaker 2: Wendy showed her thank you so much with Brown University 551 00:30:59,720 --> 00:31:03,960 Speaker 2: of the two album centered. 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