1 00:00:05,120 --> 00:00:09,200 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 2 00:00:09,200 --> 00:00:13,200 Speaker 1: with Jonathan Ferrell and Lisa Abramowitz. Daily we bring you 3 00:00:13,280 --> 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, SoundCloud, Bloomberg dot Com, 5 00:00:23,920 --> 00:00:30,920 Speaker 1: and of course on the Bloomberg Terminal. It is a 6 00:00:31,000 --> 00:00:33,240 Speaker 1: time of change and all as we readjust to the 7 00:00:33,320 --> 00:00:35,400 Speaker 1: end of the year and maybe readjust after the election. 8 00:00:35,479 --> 00:00:38,760 Speaker 1: Joining us now, someone with terrific respect on this, Alan Ruskin, 9 00:00:39,320 --> 00:00:43,159 Speaker 1: chief international strategist at Deutsche Bank, is well Ellen, I 10 00:00:43,240 --> 00:00:47,120 Speaker 1: want to go to the path from ultra accommodative Stanley 11 00:00:47,159 --> 00:00:52,559 Speaker 1: Fisher to accommodative, to an unmeasurable neutrality and to a 12 00:00:52,640 --> 00:00:56,840 Speaker 1: Domini constant over at Missoo calls super restrictive, which is 13 00:00:56,880 --> 00:01:01,240 Speaker 1: basically disinflation even with oil, even with ants. How close 14 00:01:01,240 --> 00:01:05,440 Speaker 1: are we to restrictive? How close are we two super restrictive? 15 00:01:07,360 --> 00:01:09,720 Speaker 1: Great question, Tom, because I think you canscious look at 16 00:01:09,720 --> 00:01:11,679 Speaker 1: this in terms of monetary policy. You have to look 17 00:01:11,720 --> 00:01:14,680 Speaker 1: at it in terms of fiscal policy as well. And 18 00:01:15,040 --> 00:01:18,360 Speaker 1: I think the most underrated element in terms of the 19 00:01:18,360 --> 00:01:23,880 Speaker 1: policy stance is that fiscal policy from one was really 20 00:01:23,920 --> 00:01:27,760 Speaker 1: the most stimulus we've ever had by Quantum's Yeah, I 21 00:01:27,800 --> 00:01:31,320 Speaker 1: think it's a temper center GDP stimulus at that point 22 00:01:31,319 --> 00:01:34,319 Speaker 1: for over those two years, about five times what a 23 00:01:34,400 --> 00:01:38,240 Speaker 1: large stimulus is. That's still reverberating, that's still showing up 24 00:01:38,240 --> 00:01:43,440 Speaker 1: in excess savings, that still buffering the consumer, and to me, 25 00:01:44,440 --> 00:01:48,520 Speaker 1: that is creating the underlying resilience. That means that interest 26 00:01:48,600 --> 00:01:50,960 Speaker 1: rates can be much higher than they would otherwise be, 27 00:01:51,560 --> 00:01:54,360 Speaker 1: and that interest rates look like they're much tighter than 28 00:01:54,400 --> 00:01:58,400 Speaker 1: they are. An arch theme of your colleague David Folker's Lenda, 29 00:01:58,520 --> 00:02:01,280 Speaker 1: who has been there will be for school stimulus clearly 30 00:02:01,280 --> 00:02:05,600 Speaker 1: in Europe to rebuild Europe after an horrific or as well. 31 00:02:05,760 --> 00:02:10,160 Speaker 1: Do you see fiscal leveling, fiscal stimulus, or maybe even 32 00:02:10,280 --> 00:02:16,560 Speaker 1: some form of dropped down in fiscal spending in America? Look, 33 00:02:16,600 --> 00:02:20,280 Speaker 1: I think an it's gonna hinge on Tuesday and the 34 00:02:20,280 --> 00:02:24,280 Speaker 1: events thereof, I think the anticipation is that fiscal policy 35 00:02:24,360 --> 00:02:27,200 Speaker 1: is going to be a lot tighter going forward. I 36 00:02:27,200 --> 00:02:30,160 Speaker 1: think the question there again is what are we going 37 00:02:30,160 --> 00:02:32,880 Speaker 1: to see in terms of front loading from the lame 38 00:02:33,000 --> 00:02:35,960 Speaker 1: dark section the session? In terms of you know, the 39 00:02:36,040 --> 00:02:38,639 Speaker 1: death seeling. How much constraint is that going to impose? 40 00:02:39,280 --> 00:02:42,600 Speaker 1: But I think the anticipation will be that we will 41 00:02:42,639 --> 00:02:45,680 Speaker 1: see tightening. But again, want to emphasize the fact that 42 00:02:45,720 --> 00:02:50,919 Speaker 1: the lagged fiscal stimulus from twenty twenty and twenty one 43 00:02:51,280 --> 00:02:54,720 Speaker 1: is still going to act as a buffer for three 44 00:02:54,720 --> 00:02:57,880 Speaker 1: and four, so it's still going to be substantive. And 45 00:02:57,919 --> 00:03:01,120 Speaker 1: I'm not that worried about the tightening on the school side. Okay, 46 00:03:01,120 --> 00:03:03,960 Speaker 1: but there's a very strange confluence of bad news is 47 00:03:04,000 --> 00:03:06,240 Speaker 1: good news for markets right now. And we can put 48 00:03:06,280 --> 00:03:08,920 Speaker 1: fiscal spending in there. It's good we get bad data 49 00:03:08,960 --> 00:03:10,960 Speaker 1: because that means heilds will go down. It's good when 50 00:03:10,960 --> 00:03:13,080 Speaker 1: we get less fiscal spending because it means bond yields 51 00:03:13,080 --> 00:03:15,440 Speaker 1: will go down and perhaps ill cap inflation. At what 52 00:03:15,600 --> 00:03:18,560 Speaker 1: point does that run out and people start to think, okay, 53 00:03:18,560 --> 00:03:20,720 Speaker 1: wait a second, this isn't going to support the economy, 54 00:03:20,919 --> 00:03:23,640 Speaker 1: and that is negative broadly for the dollar and for 55 00:03:23,760 --> 00:03:26,399 Speaker 1: risk asses. Yeah, at Lisa, I think if you look 56 00:03:26,440 --> 00:03:30,679 Speaker 1: at the past patterns whereby we've had a Democrat president 57 00:03:30,880 --> 00:03:35,240 Speaker 1: with a divided Congress, you've seen as you might expect 58 00:03:35,440 --> 00:03:39,280 Speaker 1: that fiscal deficits tend to come down. You see bond 59 00:03:39,360 --> 00:03:42,920 Speaker 1: heels well supported, but you also see equities and I 60 00:03:43,000 --> 00:03:46,480 Speaker 1: tend to underperform, and you see the underlying economy the 61 00:03:46,560 --> 00:03:49,640 Speaker 1: GDP numbers tend to be weaker. So um, I think 62 00:03:49,680 --> 00:03:53,040 Speaker 1: you asked the right question there, that it does tend 63 00:03:53,080 --> 00:03:57,040 Speaker 1: to add to underlying weakness, and that good news for 64 00:03:57,080 --> 00:04:00,440 Speaker 1: the bond market is only going to fill to through 65 00:04:00,480 --> 00:04:03,280 Speaker 1: to some extent. As far as the economy is concerned. 66 00:04:03,280 --> 00:04:05,200 Speaker 1: I don't think it's going to be sufficient, for example, 67 00:04:05,480 --> 00:04:08,680 Speaker 1: to stop a recession, say by the time the end 68 00:04:08,680 --> 00:04:12,840 Speaker 1: of three. We had been later on earlier in the show, 69 00:04:12,880 --> 00:04:14,960 Speaker 1: earlier in this hour, and he was saying that he 70 00:04:15,040 --> 00:04:17,200 Speaker 1: thinks that there is going to be a very big 71 00:04:17,240 --> 00:04:19,919 Speaker 1: move up in risk assets because that there will be 72 00:04:19,960 --> 00:04:22,680 Speaker 1: cutting of interest rates by the Federal Reserve, and we'll 73 00:04:22,720 --> 00:04:24,400 Speaker 1: go back not to the same extent, but to a 74 00:04:24,440 --> 00:04:27,240 Speaker 1: similar playbook as the one that we've come accustomed to. 75 00:04:27,520 --> 00:04:29,480 Speaker 1: Do you think that that is likely? Is that something 76 00:04:29,520 --> 00:04:31,640 Speaker 1: that people can count on in the next twelve months 77 00:04:31,680 --> 00:04:34,200 Speaker 1: or perhaps even eighteen months, even if it doesn't seem 78 00:04:34,200 --> 00:04:37,479 Speaker 1: like it's on the horizon now, I think that's a 79 00:04:37,720 --> 00:04:40,080 Speaker 1: very optimistic view. I think, you know, we're trying to 80 00:04:40,160 --> 00:04:43,880 Speaker 1: establish all the things that Pal highlighted, which is where 81 00:04:43,920 --> 00:04:46,359 Speaker 1: is the peak and what is the shape of the 82 00:04:46,440 --> 00:04:49,760 Speaker 1: rate cycle at the peak? And increasingly that peaks just 83 00:04:49,800 --> 00:04:51,960 Speaker 1: seems to drift up. You know, we're now at a 84 00:04:52,000 --> 00:04:55,000 Speaker 1: five percent handle. It's possible, and I think the stew 85 00:04:55,320 --> 00:04:57,920 Speaker 1: is still to the top side of that. We're thinking 86 00:04:57,960 --> 00:05:02,480 Speaker 1: in terms of the shape, and people felt the higher 87 00:05:02,520 --> 00:05:05,440 Speaker 1: we got, the quicker rates would actually come down. In fact, 88 00:05:05,520 --> 00:05:09,000 Speaker 1: now increasingly there's a feeling that rates won't come down quickly, 89 00:05:09,200 --> 00:05:11,200 Speaker 1: that it's more like an inverted l at the top 90 00:05:11,600 --> 00:05:15,479 Speaker 1: of of of the cycle. So to me, none of 91 00:05:15,520 --> 00:05:19,279 Speaker 1: that is that optimistic from a necessary from a growth 92 00:05:19,520 --> 00:05:23,000 Speaker 1: cycle standpoint. Well, and if we dash to a hundred 93 00:05:23,000 --> 00:05:27,360 Speaker 1: dollar brand again, is the hundred dollar a barrel brand? 94 00:05:27,440 --> 00:05:30,040 Speaker 1: If we see it now at ninety eight dollars, is 95 00:05:30,080 --> 00:05:33,400 Speaker 1: it the same is a hundred dollars the last time around? 96 00:05:35,920 --> 00:05:39,120 Speaker 1: I think you've always got to, you know, just assess 97 00:05:39,240 --> 00:05:43,240 Speaker 1: what the overall backdrop, you know, macro backdrop is. I mean, 98 00:05:43,279 --> 00:05:45,719 Speaker 1: I think it would be upsetting from a sort of 99 00:05:45,720 --> 00:05:49,040 Speaker 1: a stagflation standpoint if we started to see oil prices 100 00:05:49,080 --> 00:05:51,040 Speaker 1: move in the you know, in the so called a 101 00:05:51,120 --> 00:05:54,719 Speaker 1: wrong direction from a stagflation standpoint, I think, you know, 102 00:05:54,880 --> 00:05:58,640 Speaker 1: falling on a weakening economy. One would argue that perhaps 103 00:05:58,720 --> 00:06:01,320 Speaker 1: to have even more negative effect, and it would have 104 00:06:01,360 --> 00:06:07,200 Speaker 1: had in prior last two quarters. A general questionnaire, let's 105 00:06:07,200 --> 00:06:09,960 Speaker 1: call it econ one oh one this morning, I believe 106 00:06:09,960 --> 00:06:15,000 Speaker 1: there are fourteen core CPI measurements in each country. Is 107 00:06:15,040 --> 00:06:18,479 Speaker 1: there a value of looking at headline inflation now? Or 108 00:06:18,520 --> 00:06:20,760 Speaker 1: do each of us have to find a core series 109 00:06:20,760 --> 00:06:24,800 Speaker 1: we're comfortable with? And I think CORE was seen as 110 00:06:25,360 --> 00:06:29,159 Speaker 1: helpful in terms of telling you what the underlying picture was, 111 00:06:29,520 --> 00:06:32,960 Speaker 1: you know, where the natural gravitation would be over say 112 00:06:33,000 --> 00:06:37,080 Speaker 1: a twelve month period when food and energy prices erratic 113 00:06:37,160 --> 00:06:39,719 Speaker 1: food and energy prices work their way out. But I 114 00:06:39,720 --> 00:06:43,719 Speaker 1: think if you're asking questions about, you know, what is 115 00:06:43,880 --> 00:06:46,840 Speaker 1: inflation doing for the average man in the street, then 116 00:06:47,000 --> 00:06:49,000 Speaker 1: skip the CORE. I mean, you've really got to focus 117 00:06:49,040 --> 00:06:53,000 Speaker 1: on the total inflation and uh, you know, it would 118 00:06:53,040 --> 00:06:56,240 Speaker 1: be a travesty ready to start removing food and energy 119 00:06:56,320 --> 00:06:59,080 Speaker 1: from those kind of measures. But I think CORE for 120 00:06:59,160 --> 00:07:02,680 Speaker 1: the economists trying to look say twelve months out, is 121 00:07:02,880 --> 00:07:05,200 Speaker 1: still reasonable, and you've got his search country by country 122 00:07:05,240 --> 00:07:07,359 Speaker 1: on the fraid time when you look country to country. 123 00:07:07,400 --> 00:07:09,040 Speaker 1: I just want to wrap it up with this question 124 00:07:09,080 --> 00:07:11,360 Speaker 1: about Europe. And we've been talking a lot about the 125 00:07:11,440 --> 00:07:13,760 Speaker 1: US and the CYSCAL spending in the US and how 126 00:07:13,800 --> 00:07:15,600 Speaker 1: we're going to see the dollar progress. But at what 127 00:07:15,680 --> 00:07:18,720 Speaker 1: point does Europe become attractive again considering how much it 128 00:07:18,840 --> 00:07:21,280 Speaker 1: sold off, but also considering that it faces a much 129 00:07:21,320 --> 00:07:25,000 Speaker 1: bleaker picture in many ways than the United States. Yeah. 130 00:07:25,000 --> 00:07:27,840 Speaker 1: I mean, obviously a lot turns on the politics. So 131 00:07:28,160 --> 00:07:34,200 Speaker 1: you had somewhat optimistic mentions of the US touching base 132 00:07:34,320 --> 00:07:36,560 Speaker 1: with the Russians, which is you know, I think an 133 00:07:36,720 --> 00:07:40,200 Speaker 1: egg people to think in terms of some sort of 134 00:07:40,920 --> 00:07:45,520 Speaker 1: Ukraine peace deal eventually. Um, that's not obviously an optimistic 135 00:07:45,600 --> 00:07:48,680 Speaker 1: view of things. Um, so that's going to be crucial 136 00:07:48,760 --> 00:07:51,320 Speaker 1: I think in terms of, you know, how you think 137 00:07:51,360 --> 00:07:54,960 Speaker 1: about Europe going forward. Um. That being said, I think 138 00:07:54,960 --> 00:07:57,280 Speaker 1: there's some built in resilience that we're starting to see 139 00:07:57,320 --> 00:08:00,760 Speaker 1: from the economies. You are seeing uh an ability to 140 00:08:00,880 --> 00:08:03,680 Speaker 1: navigate some of the energy shocks. So I don't think 141 00:08:03,720 --> 00:08:05,960 Speaker 1: it's all pessimism really in a way. But I think 142 00:08:06,000 --> 00:08:07,880 Speaker 1: he's still gonna have to just wait for that political 143 00:08:07,920 --> 00:08:10,720 Speaker 1: signal before it's a real buying opptuesing allan thank you 144 00:08:10,760 --> 00:08:12,560 Speaker 1: as old white body. I appreciate your time and I'm 145 00:08:12,600 --> 00:08:25,720 Speaker 1: resking that of Deutsche Bank right now and this is 146 00:08:25,840 --> 00:08:28,680 Speaker 1: a joy. We truly begin our coverage with the Wendy Shiller, 147 00:08:28,720 --> 00:08:31,760 Speaker 1: director of the tub and Center for American Politics and 148 00:08:31,800 --> 00:08:36,200 Speaker 1: Policy at Brown University, with Greg Valier just a foundation 149 00:08:36,320 --> 00:08:40,720 Speaker 1: of what surveillance does on politics. Professor Schiller, I want 150 00:08:40,760 --> 00:08:43,880 Speaker 1: you to address, as in your memo, the mid term 151 00:08:44,000 --> 00:08:47,360 Speaker 1: messaging that has led us in the last forty eight 152 00:08:47,360 --> 00:08:52,880 Speaker 1: hours to indeterminate polling. Give us the messaging dynamic red 153 00:08:52,920 --> 00:08:56,840 Speaker 1: and blue versus the polling shock that we're going nowhere 154 00:08:56,880 --> 00:09:00,640 Speaker 1: in the last two days. Well, it's interesting and sort 155 00:09:00,640 --> 00:09:03,120 Speaker 1: of a very late shift by the Democrats. We've talked 156 00:09:03,120 --> 00:09:06,800 Speaker 1: about this before to the economy and also attacking Republicans 157 00:09:06,840 --> 00:09:10,360 Speaker 1: on social security and medicare the problem with that charge 158 00:09:10,400 --> 00:09:12,079 Speaker 1: of the Democrats as many people who are over the 159 00:09:12,120 --> 00:09:14,960 Speaker 1: age of sixty five already voted. That's the biggest bulk 160 00:09:15,000 --> 00:09:17,880 Speaker 1: of people who vote by mail, and also people being 161 00:09:17,960 --> 00:09:20,960 Speaker 1: the age of sixty five, A lot of that early 162 00:09:21,040 --> 00:09:23,280 Speaker 1: voting is coming from them. They care about the economy. 163 00:09:23,520 --> 00:09:26,199 Speaker 1: It's just a little bit too late, I think. And 164 00:09:26,320 --> 00:09:28,840 Speaker 1: uh you know, they misplayed the abortion issue by over 165 00:09:28,880 --> 00:09:31,679 Speaker 1: emphasizing it nationally and not being strategic about that. They 166 00:09:31,679 --> 00:09:33,960 Speaker 1: did some redistricting decisions that we could talk about, we 167 00:09:33,960 --> 00:09:36,280 Speaker 1: don't have time. In twenty we have that case in 168 00:09:36,360 --> 00:09:38,679 Speaker 1: Rhode Island where they over districted, in other words, put 169 00:09:38,679 --> 00:09:41,120 Speaker 1: too many Democrats in one district and left the end 170 00:09:41,280 --> 00:09:43,600 Speaker 1: on their district vulnerable. So now we've got a potential 171 00:09:43,640 --> 00:09:45,400 Speaker 1: for a Republican to be elected in Rhode Island for 172 00:09:45,400 --> 00:09:48,160 Speaker 1: the Congress. That hasn't happened in a long time. Uh So, 173 00:09:48,240 --> 00:09:49,839 Speaker 1: I think. On the other hand, the Democrats had a 174 00:09:49,880 --> 00:09:52,839 Speaker 1: lot of losses in the House, so you know, the 175 00:09:52,960 --> 00:09:55,880 Speaker 1: damage actually might be mitigated and other problems can pick 176 00:09:55,920 --> 00:09:57,600 Speaker 1: up a lot of seats and win control, but it 177 00:09:57,640 --> 00:10:02,840 Speaker 1: won't necessarily look like eleven or twenty. Where are we 178 00:10:02,920 --> 00:10:06,480 Speaker 1: on the tipping point where the mail and voting, the 179 00:10:06,559 --> 00:10:11,880 Speaker 1: pre voting becomes more important than the Tuesday voting. That's 180 00:10:11,880 --> 00:10:14,520 Speaker 1: a really great question. Place like Pennsylvania, for example, we're 181 00:10:14,520 --> 00:10:17,320 Speaker 1: all watching that states Senate race in particular. They start 182 00:10:17,400 --> 00:10:20,400 Speaker 1: counting Tuesday morning, so you may not have that kind 183 00:10:20,400 --> 00:10:22,280 Speaker 1: of blue wave red wave kind of thing going on. 184 00:10:22,400 --> 00:10:24,160 Speaker 1: May take them a long time. There's about I think 185 00:10:24,160 --> 00:10:27,160 Speaker 1: five and fifty thousand or six hundred thousand early votes 186 00:10:27,360 --> 00:10:29,720 Speaker 1: by mail, but they start counting at least on Tuesday. 187 00:10:29,920 --> 00:10:32,240 Speaker 1: It's some other states, like Ohio, they accept mail and 188 00:10:32,280 --> 00:10:35,079 Speaker 1: ballots for another ten days, So you know, if it's 189 00:10:35,120 --> 00:10:37,280 Speaker 1: really tight in some of these states, it could be 190 00:10:37,320 --> 00:10:40,079 Speaker 1: a while before we know the answers. But midterm elections 191 00:10:40,080 --> 00:10:42,079 Speaker 1: are about a referendum on the party in power in 192 00:10:42,120 --> 00:10:45,160 Speaker 1: the White House. Most of the time that party loses seats. 193 00:10:45,440 --> 00:10:47,960 Speaker 1: You know, when you have such division, you're gonna switch 194 00:10:47,960 --> 00:10:51,120 Speaker 1: control the chambers a lot more frequently. Years ago, we 195 00:10:51,120 --> 00:10:53,600 Speaker 1: didn't have as much division, and so you know, it's 196 00:10:53,640 --> 00:10:56,520 Speaker 1: harder to flip control. But it is typical for the 197 00:10:56,559 --> 00:10:58,640 Speaker 1: party in the White House to lose seats in a 198 00:10:58,640 --> 00:11:02,160 Speaker 1: mid from election. Wendy's a referendum on this administration or 199 00:11:02,240 --> 00:11:04,480 Speaker 1: is it a larger referendum. There is a story in 200 00:11:04,600 --> 00:11:09,240 Speaker 1: Axios basically talking about how leading Democratic voices are saying 201 00:11:09,280 --> 00:11:11,880 Speaker 1: the party has seen as too extreme and that this 202 00:11:12,000 --> 00:11:15,920 Speaker 1: basically is a big clarion call for a rethink in 203 00:11:16,000 --> 00:11:19,160 Speaker 1: some of the messaging. More broadly, do you agree that 204 00:11:19,160 --> 00:11:21,840 Speaker 1: that is the conclusion if the Democrats do face some 205 00:11:21,880 --> 00:11:25,880 Speaker 1: pretty severe losses uh this particular week, Lisa, I think 206 00:11:25,880 --> 00:11:27,720 Speaker 1: it's just so much more complicated than that. I would 207 00:11:27,720 --> 00:11:30,920 Speaker 1: be cautious of overinterpreting the results of this particular election. 208 00:11:31,400 --> 00:11:33,679 Speaker 1: People are concerned about inflation. It's still hard to get 209 00:11:33,679 --> 00:11:36,840 Speaker 1: a new car. There's ridiculous inflation markups on new cars 210 00:11:36,880 --> 00:11:39,640 Speaker 1: for example. I mean people's people feel it. They feel 211 00:11:39,640 --> 00:11:42,240 Speaker 1: it every day. This could just be a big example 212 00:11:42,400 --> 00:11:45,560 Speaker 1: of bad campaigning by the Democratic Party. In terms of messaging. 213 00:11:45,800 --> 00:11:48,240 Speaker 1: They had tons of money, Uh, and did they not 214 00:11:48,400 --> 00:11:51,400 Speaker 1: emphasize what they should have emphasized, sort of average campaign 215 00:11:51,480 --> 00:11:53,880 Speaker 1: one oh one. And in terms of democracy, if we 216 00:11:53,920 --> 00:11:55,640 Speaker 1: have turned out, you know, we already have more early 217 00:11:55,720 --> 00:11:57,480 Speaker 1: voting than we had in twenty eighteen, you know, by 218 00:11:57,480 --> 00:11:59,600 Speaker 1: about a million votes already, and we don't even know 219 00:11:59,640 --> 00:12:01,720 Speaker 1: the folk than the burling voting. So if we have 220 00:12:01,880 --> 00:12:05,120 Speaker 1: really big turnout and you say democracy is dying, that's 221 00:12:05,120 --> 00:12:08,320 Speaker 1: a conflicting message. Again, So the Democrats have to be cautious. 222 00:12:08,480 --> 00:12:10,720 Speaker 1: Everybody has to be cautious about interpreting the results of 223 00:12:10,720 --> 00:12:13,800 Speaker 1: this particular election, but it is true that the Democrats 224 00:12:13,800 --> 00:12:15,960 Speaker 1: did a lot that they say they did for a 225 00:12:16,000 --> 00:12:17,839 Speaker 1: lot of the people who are not voting for the 226 00:12:17,880 --> 00:12:22,040 Speaker 1: Democratic Party in November. And where is that mismatch most acute? 227 00:12:22,280 --> 00:12:24,760 Speaker 1: And how do they have to localize their messaging as 228 00:12:24,800 --> 00:12:26,920 Speaker 1: they move forward? Well, especially when it comes to crime. 229 00:12:26,960 --> 00:12:28,760 Speaker 1: And I say this living in New York City and 230 00:12:28,960 --> 00:12:31,000 Speaker 1: living in New York and we have seen this become 231 00:12:31,200 --> 00:12:34,080 Speaker 1: a huge campaign issue that actually makes this highly blue 232 00:12:34,120 --> 00:12:36,600 Speaker 1: state suddenly on the ballot when it comes to the 233 00:12:36,640 --> 00:12:39,160 Speaker 1: governor race. What's your interpretation of that? And I understand 234 00:12:39,200 --> 00:12:42,120 Speaker 1: that there are single idiosyncratic messages, but is this just 235 00:12:42,160 --> 00:12:45,280 Speaker 1: a messaging issue or is this a policy issue? Well, 236 00:12:45,320 --> 00:12:47,240 Speaker 1: I mean, you know, in terms of crime, you know, 237 00:12:47,520 --> 00:12:49,480 Speaker 1: the irony for the Democrats are the frustration of the 238 00:12:49,480 --> 00:12:52,080 Speaker 1: Democrats is that part of the violent nature of crime 239 00:12:52,120 --> 00:12:53,720 Speaker 1: is that more people of guns. You know, it's just 240 00:12:53,760 --> 00:12:56,000 Speaker 1: easier to get a gun and many more people have guns. 241 00:12:56,240 --> 00:12:59,040 Speaker 1: That's dude to basically Republican slash n R a opposition 242 00:12:59,080 --> 00:13:02,199 Speaker 1: to gun safety ledges slation. But the Democrats has lost 243 00:13:02,240 --> 00:13:05,000 Speaker 1: that message entirely. Uh. And it's true people want to 244 00:13:05,040 --> 00:13:06,840 Speaker 1: be safe when they go into a supermarket or a 245 00:13:06,840 --> 00:13:09,360 Speaker 1: movie theater or the subway, wherever they are, they want 246 00:13:09,400 --> 00:13:11,320 Speaker 1: to be safe. And it's been typical that the Republicans 247 00:13:11,360 --> 00:13:14,520 Speaker 1: have taken advantage of that in electoral terms. And there 248 00:13:14,640 --> 00:13:17,400 Speaker 1: is also sort of a racial coded message in criminal 249 00:13:17,600 --> 00:13:20,040 Speaker 1: sort of focusing on crime in some areas as well. 250 00:13:20,240 --> 00:13:23,079 Speaker 1: So the pushback by the Democrats against that messaging hasn't 251 00:13:23,080 --> 00:13:26,440 Speaker 1: been exactly the right mix of messaging about security versus 252 00:13:26,480 --> 00:13:30,360 Speaker 1: being you know, cautious on on using racist or stereotypical 253 00:13:30,440 --> 00:13:33,040 Speaker 1: tropes on crime. So I think the Democrats have some 254 00:13:33,040 --> 00:13:34,400 Speaker 1: work to do on messaging. They also have to pick 255 00:13:34,480 --> 00:13:36,559 Speaker 1: up who's gonna run their party. They have people who 256 00:13:36,559 --> 00:13:38,840 Speaker 1: are you know, no offense, people in their seventies and eighties, 257 00:13:39,000 --> 00:13:42,200 Speaker 1: you know, all good, but they have a fairly old bench, 258 00:13:42,559 --> 00:13:45,040 Speaker 1: and the Republicans have a fairly younger bench, with the 259 00:13:45,080 --> 00:13:47,640 Speaker 1: exception of Donald Trump, who who still has a lot 260 00:13:47,679 --> 00:13:50,480 Speaker 1: of vitality, but nonetheless you had the governor of Virginia, 261 00:13:50,640 --> 00:13:52,480 Speaker 1: you know, relatively young guy, probably has a future in 262 00:13:52,559 --> 00:13:55,400 Speaker 1: national politics. The Democrats have a befaired who is there 263 00:13:55,440 --> 00:13:58,319 Speaker 1: who are their spokespeople and what age group are they 264 00:13:58,360 --> 00:14:00,880 Speaker 1: are they picking from? And that's that's a big rethink 265 00:14:00,960 --> 00:14:02,880 Speaker 1: for them, and they better do it fast. Wendy, thank 266 00:14:02,920 --> 00:14:05,400 Speaker 1: you when they share that of Brandy Universtity, I think 267 00:14:05,400 --> 00:14:08,320 Speaker 1: you missed at the end, Tom perhaps for the best. Wendy, 268 00:14:08,320 --> 00:14:15,679 Speaker 1: thank you very much. We are thrilled to bring you. Dana, 269 00:14:15,720 --> 00:14:19,080 Speaker 1: I've senior equity research director at Wedbush. Daniel and I 270 00:14:19,120 --> 00:14:22,400 Speaker 1: were talking about this, any clarity on sales the two 271 00:14:22,440 --> 00:14:25,560 Speaker 1: fancy phones, with the phone war that's out there, T 272 00:14:25,720 --> 00:14:28,440 Speaker 1: Mobile and all that. Am I right that the Pro 273 00:14:28,680 --> 00:14:33,000 Speaker 1: and the Pro Max are selling like hotcakes? Look, I 274 00:14:33,040 --> 00:14:36,800 Speaker 1: think demand on Pro has been unprecedented relative to what 275 00:14:36,840 --> 00:14:38,720 Speaker 1: we're seeing in this macro. And I think you saw 276 00:14:38,760 --> 00:14:41,920 Speaker 1: that with September results and even the guidance, and you 277 00:14:42,000 --> 00:14:44,640 Speaker 1: see that even come out in China. But for apples, 278 00:14:44,720 --> 00:14:47,640 Speaker 1: we saw last night the issues not the man. It's 279 00:14:47,680 --> 00:14:50,360 Speaker 1: the supply and oxous to the zero COVID in China. 280 00:14:50,720 --> 00:14:53,520 Speaker 1: That's the gut punch that we're dealing with this morning. Okay, 281 00:14:53,520 --> 00:14:55,160 Speaker 1: so wait, there on a scale and I don't mean 282 00:14:55,160 --> 00:14:56,920 Speaker 1: to get Matthew here, Dan, but I think we do 283 00:14:57,000 --> 00:14:59,920 Speaker 1: with the Bloomberg reporting. What percent of this is a 284 00:15:00,000 --> 00:15:05,200 Speaker 1: about China lockdown? What percentages about demand of the phones 285 00:15:05,720 --> 00:15:09,680 Speaker 1: underneath the pro in the pro Max. Yeah, so let's 286 00:15:09,680 --> 00:15:12,200 Speaker 1: break that down in terms of the Bloomberg report. That's 287 00:15:12,200 --> 00:15:14,920 Speaker 1: really time. When you look at the iPhone fourteen class, 288 00:15:14,960 --> 00:15:17,920 Speaker 1: I mean, that's really been a strikeout for Apple coming 289 00:15:17,920 --> 00:15:19,880 Speaker 1: out of the gate. It s that's where you're seeing 290 00:15:19,880 --> 00:15:23,400 Speaker 1: the lower production in terms of coming out of Asia. 291 00:15:23,920 --> 00:15:26,400 Speaker 1: But but on the other side, the strength is coming 292 00:15:26,400 --> 00:15:30,520 Speaker 1: out from fourteen pro. A typical mix is about sixty 293 00:15:30,600 --> 00:15:34,760 Speaker 1: sixty five percent. We think it's closer to eight this quarter. 294 00:15:35,120 --> 00:15:38,840 Speaker 1: That's bullets that's positive for a sp is positive from margins, 295 00:15:39,200 --> 00:15:41,920 Speaker 1: and that's really what the streets focused on here. So, Dan, 296 00:15:42,200 --> 00:15:44,520 Speaker 1: I guess that you're rejecting this idea that this could 297 00:15:44,520 --> 00:15:47,440 Speaker 1: be demand driven reduction in production. Is that correct that 298 00:15:47,480 --> 00:15:51,480 Speaker 1: you think that that's uh, perhaps not a correct interpretation 299 00:15:51,600 --> 00:15:54,920 Speaker 1: of Apple's announcement. Well, I mean if you look at 300 00:15:55,160 --> 00:15:58,160 Speaker 1: just off the quarter, I mean when Cook gave guidance, 301 00:15:58,280 --> 00:16:01,880 Speaker 1: and I think across big the last four or five years, 302 00:16:01,880 --> 00:16:05,200 Speaker 1: no one's in better in terms of forecasting. They're seeing 303 00:16:05,240 --> 00:16:07,960 Speaker 1: strength and I believe the iPhones would still be up 304 00:16:08,080 --> 00:16:10,040 Speaker 1: year of the year, but obviously in terms of the 305 00:16:10,160 --> 00:16:12,440 Speaker 1: zero COVID shut then we think that probably takes off 306 00:16:12,520 --> 00:16:17,640 Speaker 1: to potentially three percent iPhone unit demands. Issue it continues 307 00:16:17,680 --> 00:16:20,160 Speaker 1: to be supply and I think that's are of the 308 00:16:20,240 --> 00:16:23,720 Speaker 1: frustration for Cupertino in terms of what they're dealing with 309 00:16:23,760 --> 00:16:27,680 Speaker 1: in China. Although you're not necessarily seeing people expect bigger margins. 310 00:16:27,680 --> 00:16:30,360 Speaker 1: In other words, we're not hearing that perhaps Apple will 311 00:16:30,440 --> 00:16:34,120 Speaker 1: raise the price of the iPhone fourteen in response to 312 00:16:34,320 --> 00:16:38,080 Speaker 1: the lack of supply. So does this mean that Apple 313 00:16:38,280 --> 00:16:40,720 Speaker 1: and a lot of companies kind of reached the end 314 00:16:40,720 --> 00:16:43,920 Speaker 1: of how much they can offset some of these these 315 00:16:43,920 --> 00:16:48,640 Speaker 1: pressures with higher prices. Yeah, it's a great point. I 316 00:16:48,680 --> 00:16:51,480 Speaker 1: also think it speaks to why within the four walls 317 00:16:51,520 --> 00:16:54,600 Speaker 1: of Cupertino, why it's so important from a chip and 318 00:16:54,720 --> 00:16:57,160 Speaker 1: own their own ecosystem, and I think that's what Apple 319 00:16:57,200 --> 00:16:59,240 Speaker 1: has done. It gives them more flexibility on the supply 320 00:16:59,400 --> 00:17:02,840 Speaker 1: chain and from a margin perspective, and that's something that's 321 00:17:02,880 --> 00:17:05,520 Speaker 1: playing out more and more. But I think really the 322 00:17:05,640 --> 00:17:09,120 Speaker 1: narrative is that iPhone four team pro despite opposite dark 323 00:17:09,119 --> 00:17:12,879 Speaker 1: storm clouds is seeing strength despite what we see what 324 00:17:13,240 --> 00:17:15,920 Speaker 1: I'd call it almost a nightmare. We have a large 325 00:17:15,960 --> 00:17:19,520 Speaker 1: cap tech enemy season Dan, in the hallways of all 326 00:17:19,560 --> 00:17:22,720 Speaker 1: these fancy tech people with their egos and their business 327 00:17:22,760 --> 00:17:26,400 Speaker 1: beliefs and all that. What's the difference between a hiring 328 00:17:26,600 --> 00:17:32,680 Speaker 1: freeze and outright firings? Explain that body language, not company 329 00:17:32,720 --> 00:17:36,000 Speaker 1: to company, but within the industry, within the culture you 330 00:17:36,160 --> 00:17:40,800 Speaker 1: follow well in the valley, especially intact the last I 331 00:17:40,840 --> 00:17:43,040 Speaker 1: call it sevent eight years. I mean a lot of 332 00:17:43,040 --> 00:17:46,840 Speaker 1: these companies were hiring fifteen, twenty, sometimes thirty percent more 333 00:17:46,840 --> 00:17:49,920 Speaker 1: employees per year. So in terms of a freeze, they 334 00:17:49,960 --> 00:17:52,000 Speaker 1: were just used it. You need ten more engineers and 335 00:17:52,040 --> 00:17:54,920 Speaker 1: a project, you get it. Now, what you're starting to 336 00:17:54,960 --> 00:17:58,920 Speaker 1: see clearly a slowing down. You're starting to finally see 337 00:17:58,960 --> 00:18:02,760 Speaker 1: these culturalities come to just spending like ninety rock stars. 338 00:18:02,760 --> 00:18:06,439 Speaker 1: But you're starting to see now cuts across the board 339 00:18:06,880 --> 00:18:09,879 Speaker 1: because they really want to make sure that they get ahead. 340 00:18:09,920 --> 00:18:13,200 Speaker 1: It's on margin perspective. I still don't be with his ominous. 341 00:18:13,480 --> 00:18:16,760 Speaker 1: It's still more between a freeze and slight cuts. If 342 00:18:16,760 --> 00:18:19,600 Speaker 1: it continued, then it becomes a dark winner. Hey Dan, 343 00:18:19,840 --> 00:18:21,720 Speaker 1: thank you, Dan, I said wet Bush still looking for 344 00:18:21,760 --> 00:18:36,240 Speaker 1: two on Apple Jayler Richardson with his chief economists at 345 00:18:36,280 --> 00:18:39,639 Speaker 1: ADP Research. And she's fabulous because not only working with 346 00:18:39,680 --> 00:18:42,800 Speaker 1: a DP with a thumb and the pulse of American wages, 347 00:18:43,160 --> 00:18:46,240 Speaker 1: but also her work on government economics. Thank you so 348 00:18:46,320 --> 00:18:48,760 Speaker 1: much for joining today, Thanks for having you walked in 349 00:18:48,800 --> 00:18:52,879 Speaker 1: and said, hey, stupid, this is what matters in the media, 350 00:18:53,040 --> 00:18:57,639 Speaker 1: and this is no it's says it's Monday. It's stupid 351 00:18:57,680 --> 00:19:01,240 Speaker 1: Monday for me. But the media over weights technology because 352 00:19:01,280 --> 00:19:04,159 Speaker 1: we've got technology in the brain and you're saying layoffs, 353 00:19:04,400 --> 00:19:08,320 Speaker 1: it Lift or Apple wherever, it's not that big a deal. Well, 354 00:19:08,320 --> 00:19:10,639 Speaker 1: it's a big a deal for the tech sector. It's 355 00:19:10,680 --> 00:19:13,320 Speaker 1: a big deal for tech employees. But in terms of 356 00:19:13,359 --> 00:19:18,040 Speaker 1: the overall workforce, tech information sector is about two. So 357 00:19:18,080 --> 00:19:22,399 Speaker 1: when you so when you're talking about what's really the 358 00:19:22,560 --> 00:19:27,240 Speaker 1: heavy hitters in the labor force, its services. Services is 359 00:19:27,720 --> 00:19:31,719 Speaker 1: when it comes to consumer facing services like leisure in hospitality, 360 00:19:31,840 --> 00:19:35,760 Speaker 1: which no suffered the most during the pandemic, retail sector, 361 00:19:35,960 --> 00:19:39,880 Speaker 1: that's important. Professional business services to all your accountants out there, 362 00:19:40,200 --> 00:19:43,399 Speaker 1: that's important. Tech is mark what is this what is 363 00:19:43,400 --> 00:19:47,479 Speaker 1: this service dynamic into this election coming off the ADP report, 364 00:19:47,560 --> 00:19:50,040 Speaker 1: coming off the full employment reports on Friday. What's a 365 00:19:50,119 --> 00:19:52,880 Speaker 1: service dynamic right now? It's all about wages and it's 366 00:19:52,920 --> 00:19:56,200 Speaker 1: all about leisure in hospitality really because it's that has 367 00:19:56,240 --> 00:19:59,720 Speaker 1: been the big growth sector. Is interesting. In January of 368 00:19:59,760 --> 00:20:03,800 Speaker 1: T one, wage growth and leisure and hospitality was the 369 00:20:03,840 --> 00:20:07,120 Speaker 1: lowest of any sector we track. Now it's the highest, 370 00:20:07,119 --> 00:20:10,240 Speaker 1: and it's been at double dudgets since the summer for 371 00:20:10,280 --> 00:20:12,919 Speaker 1: a very long time. It's what's driving up wage growth. 372 00:20:13,160 --> 00:20:16,960 Speaker 1: But as that dynamic changes, you might see wages start 373 00:20:17,000 --> 00:20:20,119 Speaker 1: to peter out in terms of acceleration, but still remain 374 00:20:20,320 --> 00:20:22,840 Speaker 1: high at these elevated levels. We're all waiting for this 375 00:20:22,960 --> 00:20:28,639 Speaker 1: supply side response, any sign of it whatsoever. Well, yeah, 376 00:20:28,720 --> 00:20:30,800 Speaker 1: a little bit here and there, just the hint of it, 377 00:20:31,119 --> 00:20:34,159 Speaker 1: walk us through it in pocket. I mean, there was 378 00:20:34,800 --> 00:20:37,480 Speaker 1: a little bit of movement, and I'm talking about labor 379 00:20:37,520 --> 00:20:41,920 Speaker 1: supply of course. Yeah, hopefully we're one. We we did 380 00:20:41,920 --> 00:20:46,480 Speaker 1: see someone so many supply issues here, but we did 381 00:20:46,520 --> 00:20:49,119 Speaker 1: see some people move back into the labor market. In 382 00:20:49,160 --> 00:20:52,600 Speaker 1: the fall. We had the promise of a normal school 383 00:20:52,640 --> 00:20:54,880 Speaker 1: season and so that was helpful. But if you look 384 00:20:54,920 --> 00:20:57,679 Speaker 1: at that labor force participation rate. It's still stubborn, and 385 00:20:57,680 --> 00:21:00,480 Speaker 1: it retreated last month. That is an issue you because 386 00:21:00,480 --> 00:21:04,199 Speaker 1: that suggests a bit more permanence to the fact that 387 00:21:04,240 --> 00:21:08,479 Speaker 1: the work working age supply has, you know, shrunk, And 388 00:21:08,520 --> 00:21:11,000 Speaker 1: what does that mean for growth going forward, not just 389 00:21:11,080 --> 00:21:13,520 Speaker 1: when we get through this inflation cycle, but in the 390 00:21:13,600 --> 00:21:15,480 Speaker 1: years ahead. Well, this is the inflation cycle I wanted 391 00:21:15,520 --> 00:21:17,920 Speaker 1: to talk about. So on the way up, inflation kick 392 00:21:18,000 --> 00:21:20,800 Speaker 1: tie really really quickly. Do you consider it to be 393 00:21:20,840 --> 00:21:22,919 Speaker 1: stickier on the way down? Is that the way this 394 00:21:23,040 --> 00:21:26,320 Speaker 1: usually works out, It's stickier, and I think it's going 395 00:21:26,359 --> 00:21:29,080 Speaker 1: to be more persistent. The Fed's already admitted that the 396 00:21:29,160 --> 00:21:33,200 Speaker 1: persistence is much more than it has been in previous cycles, 397 00:21:33,240 --> 00:21:38,960 Speaker 1: That the supply shortages, those dynamics globalization, you know, automation 398 00:21:39,000 --> 00:21:42,840 Speaker 1: that we're pushing inflation down, aren't. They don't have the 399 00:21:42,880 --> 00:21:46,200 Speaker 1: same power they used to, And the demographic changes are 400 00:21:46,240 --> 00:21:48,800 Speaker 1: not having the same power it used to to keep 401 00:21:48,840 --> 00:21:52,280 Speaker 1: inflation low. So it's not it's not only likely that 402 00:21:52,400 --> 00:21:56,199 Speaker 1: this inflation cycle is stickier, that it's also likely that 403 00:21:56,400 --> 00:22:01,159 Speaker 1: future levels of inflation are more persistent than we've seen historically. 404 00:22:01,280 --> 00:22:04,080 Speaker 1: You guys were talking about the supply issue in terms 405 00:22:04,160 --> 00:22:06,959 Speaker 1: of workers coming back into the workforce, How can we 406 00:22:07,040 --> 00:22:10,280 Speaker 1: understand the fact that the participation rate has not creeped up, 407 00:22:10,280 --> 00:22:13,040 Speaker 1: that it is still actually going lower on a month 408 00:22:13,160 --> 00:22:15,320 Speaker 1: to month basis if you look at the latest read 409 00:22:15,760 --> 00:22:19,760 Speaker 1: why you know we all talk about economics that we 410 00:22:19,840 --> 00:22:24,399 Speaker 1: forget that there's a huge psychological factor under undergrading this 411 00:22:24,640 --> 00:22:27,760 Speaker 1: entire labor market. This was not just a supply shock, 412 00:22:27,880 --> 00:22:30,600 Speaker 1: this was a people shock. And people over the last 413 00:22:30,600 --> 00:22:34,080 Speaker 1: two years are making different decisions. They're giving up that 414 00:22:34,119 --> 00:22:38,120 Speaker 1: second job, they're deciding to live on one income, they're 415 00:22:38,160 --> 00:22:40,800 Speaker 1: switching industries, and we've seen that in the quits rate. 416 00:22:41,119 --> 00:22:45,320 Speaker 1: So in in combination, all these different decisions at the 417 00:22:45,320 --> 00:22:49,640 Speaker 1: household level means that the workforce has become smaller, and 418 00:22:49,720 --> 00:22:51,840 Speaker 1: so how do you get the workforce back up. Well, 419 00:22:52,280 --> 00:22:55,320 Speaker 1: that you might have to rescale workers for different jobs, 420 00:22:55,600 --> 00:22:57,879 Speaker 1: jobs that make it worth it to get off the sidelines. 421 00:22:58,000 --> 00:23:00,399 Speaker 1: So what does that mean in terms of inflation and 422 00:23:00,400 --> 00:23:02,800 Speaker 1: how quickly it can really come down? We were talking 423 00:23:02,840 --> 00:23:05,840 Speaker 1: about how, at least on the product side, we're seeing 424 00:23:05,880 --> 00:23:09,199 Speaker 1: some some reasons to be optimistic about disinflationary forces, but 425 00:23:09,240 --> 00:23:10,800 Speaker 1: not so much on the other side, based on what 426 00:23:10,840 --> 00:23:13,960 Speaker 1: you're talking about, when do we get back to two Well, 427 00:23:14,080 --> 00:23:17,080 Speaker 1: productivity is the fly in the appointment of the labor market. 428 00:23:17,320 --> 00:23:20,120 Speaker 1: We need more productivity and we haven't seen it. It's 429 00:23:20,160 --> 00:23:23,600 Speaker 1: productivity that grows you out of this inflation stasis, right 430 00:23:23,960 --> 00:23:27,199 Speaker 1: It's when more workers are more productive, creating more output. 431 00:23:27,320 --> 00:23:30,000 Speaker 1: Right now we have more workers with the same output 432 00:23:30,320 --> 00:23:33,439 Speaker 1: or producing less output. And that's not the way you 433 00:23:33,520 --> 00:23:37,440 Speaker 1: grow out of inflation. That's really the issue. Friday out 434 00:23:37,440 --> 00:23:40,560 Speaker 1: to Chad Jones, giant out it's at Stanford on productivity. 435 00:23:40,560 --> 00:23:42,879 Speaker 1: And let me ask you, because you're you're you're weaning this. 436 00:23:43,000 --> 00:23:45,600 Speaker 1: I mean, it's what you've done for years, Neila, And 437 00:23:45,680 --> 00:23:48,920 Speaker 1: that is how do you measure productivity of the new 438 00:23:48,960 --> 00:23:51,879 Speaker 1: economy of work from home? I get that from a 439 00:23:51,920 --> 00:23:55,119 Speaker 1: big corporation like ADP work from home is maybe countable. 440 00:23:55,600 --> 00:23:58,639 Speaker 1: But other than that, are we flying blind in this 441 00:23:58,800 --> 00:24:02,639 Speaker 1: vaunted productivity and analysis. You know, you've made a really 442 00:24:02,720 --> 00:24:06,359 Speaker 1: interesting and really important point because over the last two 443 00:24:06,440 --> 00:24:10,000 Speaker 1: years the economy has become even more digitized um and 444 00:24:10,040 --> 00:24:13,040 Speaker 1: so the standard measures of productivity may not hold. And 445 00:24:13,119 --> 00:24:15,000 Speaker 1: maybe there's some good news on this side that we're 446 00:24:15,000 --> 00:24:18,159 Speaker 1: actually more productive than we think. We're just not counting 447 00:24:18,200 --> 00:24:21,600 Speaker 1: it right. But if that's the case, we should see 448 00:24:21,640 --> 00:24:27,159 Speaker 1: that show up in GDP growth, right, And we haven't surveillance. 449 00:24:27,200 --> 00:24:31,679 Speaker 1: We know we're more productive than you know analysis and 450 00:24:31,680 --> 00:24:34,800 Speaker 1: they don't give us credit for we're just the hyperad. 451 00:24:34,920 --> 00:24:37,760 Speaker 1: That's why we're asking the questions, LA, I need to 452 00:24:37,760 --> 00:24:41,080 Speaker 1: talk about policy then policy going forward from here? We 453 00:24:41,119 --> 00:24:43,320 Speaker 1: aren't restrictive and how restrictive and how the how do 454 00:24:43,400 --> 00:24:47,960 Speaker 1: we not? Great question? Um, we're restrictive in pockets. You 455 00:24:48,000 --> 00:24:51,000 Speaker 1: can definitely see. Let's just put it this way. Where 456 00:24:51,400 --> 00:24:56,640 Speaker 1: supply has been chronically short like in housing, the policy works. 457 00:24:56,880 --> 00:24:59,280 Speaker 1: But the policy only works because there's not that many 458 00:24:59,320 --> 00:25:02,960 Speaker 1: houses to be agen with and prices for skyrocketing already. 459 00:25:03,000 --> 00:25:05,639 Speaker 1: If there was a greater supply of housing, even a 460 00:25:05,720 --> 00:25:08,560 Speaker 1: seven percent mortgage rate wouldn't keep the tail wind of 461 00:25:08,600 --> 00:25:12,640 Speaker 1: demographics at Bay. But it's because that housing is chronically 462 00:25:12,720 --> 00:25:17,000 Speaker 1: undersupplied that the rate is actually in is having an effect. 463 00:25:17,320 --> 00:25:21,600 Speaker 1: So where you have supply shortages and a higher borrowing costs, 464 00:25:21,600 --> 00:25:24,439 Speaker 1: you're seeing an effect. It's not happening in the labor 465 00:25:24,480 --> 00:25:27,400 Speaker 1: market though, And now unfair question for Monday. You don't 466 00:25:27,440 --> 00:25:29,840 Speaker 1: the answers you want, but all of global Wall Street, 467 00:25:29,880 --> 00:25:34,080 Speaker 1: watching us, listening on radio as well, want your update 468 00:25:34,200 --> 00:25:37,040 Speaker 1: on the new ADP report. You know the pinion of 469 00:25:37,119 --> 00:25:40,439 Speaker 1: this has been acted doctors, Andy and all. What's the 470 00:25:40,600 --> 00:25:43,960 Speaker 1: knowledge base you have about the quality of your new 471 00:25:44,080 --> 00:25:48,120 Speaker 1: improved ADP report. It's a different approach. We start with 472 00:25:48,200 --> 00:25:51,960 Speaker 1: over million workers and we do something that is a 473 00:25:52,000 --> 00:25:55,720 Speaker 1: pivot instead of forecasting the Friday number on a Wednesday. Yes, 474 00:25:56,160 --> 00:26:00,520 Speaker 1: we provide an independent measure based on ADP gliant base. 475 00:26:00,600 --> 00:26:04,000 Speaker 1: And this is the future of data. This is how 476 00:26:04,080 --> 00:26:07,080 Speaker 1: much timeline do you need? How much statistical and you 477 00:26:07,160 --> 00:26:11,400 Speaker 1: need where you can say this has veracity. I think 478 00:26:11,400 --> 00:26:14,920 Speaker 1: we're in that moment now. Really, we have a very 479 00:26:14,960 --> 00:26:19,280 Speaker 1: expansive labor market. ADP pays one in six of US 480 00:26:19,320 --> 00:26:21,800 Speaker 1: workers in the United to turn us into a commercial 481 00:26:21,800 --> 00:26:27,920 Speaker 1: But I'm not trying to. But you asked me, and 482 00:26:29,480 --> 00:26:34,639 Speaker 1: this is this is how broadened because the corporate sector 483 00:26:34,920 --> 00:26:38,040 Speaker 1: is delivering with high frequency data. We don't just get 484 00:26:38,119 --> 00:26:40,240 Speaker 1: a read every month, we don't just get it once 485 00:26:40,240 --> 00:26:42,600 Speaker 1: a month. We get it every day. And I think 486 00:26:42,680 --> 00:26:46,160 Speaker 1: ADP is not alone with other companies that are getting 487 00:26:46,160 --> 00:26:49,399 Speaker 1: reads on inflation, on productivity, and so when it comes 488 00:26:49,440 --> 00:26:51,879 Speaker 1: to the future of data, it's not just going to 489 00:26:51,920 --> 00:26:55,760 Speaker 1: be with government statistics. Go to the government as well, 490 00:26:56,440 --> 00:26:59,320 Speaker 1: corporate sector as well. I could sense the frustration. Does 491 00:26:59,359 --> 00:27:03,359 Speaker 1: it frustrate you that if Wednesday doesn't forecast Friday, people 492 00:27:03,400 --> 00:27:09,720 Speaker 1: just think it's useless. You know, I have lots of frustrations. Honestly, 493 00:27:11,080 --> 00:27:13,920 Speaker 1: the data, Um, that's not it. Because what I can 494 00:27:13,960 --> 00:27:17,360 Speaker 1: say when I have an independent metric is look, it's 495 00:27:17,440 --> 00:27:20,879 Speaker 1: one of many. It's a supplement. Don't say this is 496 00:27:20,880 --> 00:27:23,800 Speaker 1: a substitute. It's not, it will never be. But it's 497 00:27:23,840 --> 00:27:27,360 Speaker 1: another read on the economy. And at a time when 498 00:27:27,400 --> 00:27:32,240 Speaker 1: the economy has become more complex, more affected by rate 499 00:27:32,320 --> 00:27:37,800 Speaker 1: sensitivity and government debt and fragmentation globally, you need as 500 00:27:37,880 --> 00:27:41,239 Speaker 1: many credible resources as you can get. And so we 501 00:27:41,359 --> 00:27:45,880 Speaker 1: offer this to Wall Street. Take a look, disagree, like it, 502 00:27:46,000 --> 00:27:48,199 Speaker 1: don't like it, figure out when it works for you. 503 00:27:48,280 --> 00:27:50,600 Speaker 1: But it is another data point for you to look at, 504 00:27:50,720 --> 00:27:54,040 Speaker 1: like you clip this and push yeah, exactly, doing a 505 00:27:54,119 --> 00:27:57,720 Speaker 1: fabulous Don't worry, we probably will thank you for coming 506 00:27:57,720 --> 00:28:01,280 Speaker 1: in to thank It's going to see you in pest 507 00:28:01,280 --> 00:28:05,720 Speaker 1: and Native Richards and that this is the Bloomberg Surveillance Podcast. 508 00:28:05,960 --> 00:28:09,359 Speaker 1: Thanks for listening. Join us live weekdays from seven to 509 00:28:09,440 --> 00:28:13,520 Speaker 1: ten am Eastern on Bloomberg Radio and on Bloomberg Television 510 00:28:13,840 --> 00:28:17,880 Speaker 1: each day from six to nine am for insight from 511 00:28:17,880 --> 00:28:22,439 Speaker 1: the best in economics, finance, investment, and international relations. And 512 00:28:22,560 --> 00:28:27,720 Speaker 1: subscribe to the Surveillance podcast on Apple podcast, SoundCloud, Bloomberg 513 00:28:27,720 --> 00:28:31,440 Speaker 1: dot com, and of course on the terminal. I'm Tom Keene, 514 00:28:31,440 --> 00:28:33,520 Speaker 1: and this is Bloomberg