1 00:00:00,120 --> 00:00:04,360 Speaker 1: Bloomberg is now on your dashboard with Apple CarPlay and 2 00:00:04,360 --> 00:00:08,160 Speaker 1: Android Auto. It gives you access to every Bloomberg podcast, 3 00:00:08,280 --> 00:00:11,560 Speaker 1: live audio feeds from Bloomberg Radio, print stories from Bloomberg 4 00:00:11,640 --> 00:00:14,920 Speaker 1: News in audio form, and the latest headlines of the 5 00:00:14,920 --> 00:00:18,640 Speaker 1: click of a button with Bloomberg News. Now it's free 6 00:00:18,680 --> 00:00:21,439 Speaker 1: with the latest version of the Bloomberg Business App. That's 7 00:00:21,680 --> 00:00:24,400 Speaker 1: the Bloomberg Business App. Get it on your phone in 8 00:00:24,440 --> 00:00:27,760 Speaker 1: the Apple App Store or on Google Play. Just download 9 00:00:27,800 --> 00:00:30,560 Speaker 1: the app, connect your phone to your car and get started. 10 00:00:30,960 --> 00:00:34,400 Speaker 1: And it's all presented by our sponsor, Interactive Brokers. 11 00:00:35,400 --> 00:00:38,600 Speaker 2: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney. Alongside 12 00:00:38,640 --> 00:00:39,800 Speaker 2: my co host Matt Miller. 13 00:00:40,200 --> 00:00:44,159 Speaker 1: Every business day we bring you interviews from CEOs, market pros, 14 00:00:44,320 --> 00:00:48,160 Speaker 1: and Bloomberg experts, along with essential market Moven News. 15 00:00:48,720 --> 00:00:51,839 Speaker 2: I'm the Bloomberg Markets podcast called Apple Podcasts or wherever 16 00:00:51,960 --> 00:00:55,080 Speaker 2: you listen to podcasts, and at Bloomberg dot Com Slash podcast. 17 00:00:55,520 --> 00:00:57,480 Speaker 2: Jess Metton and Paul Sweeney your life here in our 18 00:00:57,480 --> 00:01:01,440 Speaker 2: Bloomberg Interactive Brooker's studio. It is day for I guess 19 00:01:01,520 --> 00:01:04,520 Speaker 2: of the truce or just the cessation or halt? I 20 00:01:04,520 --> 00:01:08,679 Speaker 2: guess in hostilities between Israel and hamas and some hostage 21 00:01:08,720 --> 00:01:11,160 Speaker 2: exchanges are taking place. That's the good news, and question 22 00:01:11,240 --> 00:01:15,760 Speaker 2: happens is what happens now? Wendy Schiller, professor at Brown University, 23 00:01:16,000 --> 00:01:19,560 Speaker 2: joins us. Wendy, I, you know the reporting I'm seeing 24 00:01:19,560 --> 00:01:21,880 Speaker 2: is that President Biden had you know, had been pushing 25 00:01:21,959 --> 00:01:25,319 Speaker 2: for and continues to push for this pause in fighting, 26 00:01:25,640 --> 00:01:28,880 Speaker 2: maybe get some more hostages out. Where do you think 27 00:01:28,880 --> 00:01:31,320 Speaker 2: we are right now? Where's the administration right now on 28 00:01:31,360 --> 00:01:33,039 Speaker 2: its policy with Israel and Hamasen. 29 00:01:34,080 --> 00:01:38,480 Speaker 3: I think the Administration maintains its support for Israel in 30 00:01:38,480 --> 00:01:42,280 Speaker 3: the sense of defending itself, but they also recognize not 31 00:01:42,319 --> 00:01:45,880 Speaker 3: only the loss of life of civilians in Gaza, but 32 00:01:45,880 --> 00:01:49,800 Speaker 3: that the international community is not on this side of 33 00:01:49,840 --> 00:01:50,640 Speaker 3: this issue. 34 00:01:50,920 --> 00:01:53,440 Speaker 4: And as the. 35 00:01:52,680 --> 00:01:55,760 Speaker 3: Casualties mount in Gaza, you know, the United States will 36 00:01:55,800 --> 00:01:59,320 Speaker 3: then have to defend Israel's action without having really a 37 00:01:59,360 --> 00:02:02,600 Speaker 3: lot of control over what Israel does, which is a 38 00:02:02,600 --> 00:02:05,280 Speaker 3: fairly precarious position for President Biden to be in and 39 00:02:05,280 --> 00:02:07,080 Speaker 3: for the United States to be in. You don't want 40 00:02:07,080 --> 00:02:09,040 Speaker 3: to waiver on your support, but you don't want to 41 00:02:09,040 --> 00:02:11,800 Speaker 3: have to be the apologist or the explainer for another 42 00:02:11,840 --> 00:02:15,720 Speaker 3: country's military offensive. So this is the big question mark, 43 00:02:15,880 --> 00:02:17,000 Speaker 3: how do you describe it? 44 00:02:17,080 --> 00:02:18,240 Speaker 4: Do you keep saying that. 45 00:02:18,200 --> 00:02:20,679 Speaker 3: Israel's defending itself or is there a point at which 46 00:02:20,720 --> 00:02:23,520 Speaker 3: you say, well, we believe Israel's gone far enough. I 47 00:02:23,560 --> 00:02:26,120 Speaker 3: don't see Biden never saying that, but that's what he's 48 00:02:26,160 --> 00:02:28,600 Speaker 3: going to have to do in private conversations. 49 00:02:28,000 --> 00:02:29,320 Speaker 4: With a lot of European leaders. 50 00:02:29,600 --> 00:02:32,960 Speaker 5: Where does Congress stand when it comes to foreign aid? 51 00:02:33,960 --> 00:02:38,119 Speaker 3: Where talking about where Congress stands is almost impossible these days, right, 52 00:02:38,240 --> 00:02:41,280 Speaker 3: because we have Democrats and Republicans. Democrats controlling the Senate, 53 00:02:41,400 --> 00:02:45,520 Speaker 3: Republicans pseudo controlling the House, but really internally divided on 54 00:02:45,600 --> 00:02:48,760 Speaker 3: this very question jes of foreign aid. And you have 55 00:02:48,800 --> 00:02:51,600 Speaker 3: a very large contingent of the Republican majority that does 56 00:02:51,639 --> 00:02:54,799 Speaker 3: not want to give money, especially to Ukraine, but now 57 00:02:54,880 --> 00:02:57,200 Speaker 3: sort of thinks, okay, maybe not even Israel. 58 00:02:57,440 --> 00:02:57,960 Speaker 4: Why are we. 59 00:02:57,960 --> 00:03:01,800 Speaker 3: Giving billions of dollars of taxpayer money to foreign nations 60 00:03:02,000 --> 00:03:05,720 Speaker 3: for conflicts we can't control? And as that grows within 61 00:03:05,760 --> 00:03:08,280 Speaker 3: the Republican caucus, it will get more and more difficult 62 00:03:08,480 --> 00:03:10,800 Speaker 3: for Speaker Johnson to get any kind of foreign aid 63 00:03:10,880 --> 00:03:12,160 Speaker 3: bill through the House. 64 00:03:13,280 --> 00:03:15,400 Speaker 2: When do you assert any reason to believe that the 65 00:03:15,400 --> 00:03:18,120 Speaker 2: Biden administration and the State Department are not on the 66 00:03:18,160 --> 00:03:20,880 Speaker 2: same page as it relates to our policy towards Israel 67 00:03:20,919 --> 00:03:22,600 Speaker 2: and what's happening there. 68 00:03:23,320 --> 00:03:25,320 Speaker 3: In the end of the day, Biden is the commander 69 00:03:25,360 --> 00:03:27,280 Speaker 3: in chief and the President of the United States who 70 00:03:27,320 --> 00:03:31,600 Speaker 3: runs the cabinet. So the State Department may have internal disagreements, 71 00:03:31,760 --> 00:03:33,680 Speaker 3: but I don't think there's an anti question that the 72 00:03:33,720 --> 00:03:36,560 Speaker 3: Secretary of State is on the same page as Biden. 73 00:03:36,880 --> 00:03:39,160 Speaker 4: Whether the Secretary of State is trying to move Biden 74 00:03:39,200 --> 00:03:41,320 Speaker 4: in one way or the other, you know, we're not sure. 75 00:03:41,360 --> 00:03:43,280 Speaker 3: But in the end of the day, the State Department 76 00:03:43,360 --> 00:03:45,360 Speaker 3: still reports to the President of the United States. Even 77 00:03:45,400 --> 00:03:48,400 Speaker 3: civil servants still report to the commander in chief and 78 00:03:48,400 --> 00:03:51,800 Speaker 3: the executive So there can't be a lot of public disconnect. 79 00:03:51,960 --> 00:03:53,760 Speaker 4: And if there is, that's going to be a job 80 00:03:53,800 --> 00:03:56,760 Speaker 4: in the Sect State to clean up. For President Biden. 81 00:03:57,400 --> 00:04:00,000 Speaker 5: What would be the next immediate steps when it comes 82 00:04:00,160 --> 00:04:04,560 Speaker 5: to Israel trying to prolong its truce with Tomas. 83 00:04:04,960 --> 00:04:06,400 Speaker 4: Well, this is a big question mark. 84 00:04:06,680 --> 00:04:09,440 Speaker 3: You know, what is the strategic position of Israel in 85 00:04:09,560 --> 00:04:10,520 Speaker 3: terms of security? 86 00:04:10,840 --> 00:04:13,480 Speaker 4: You know, can they afford to prolong the cease fire. 87 00:04:13,560 --> 00:04:14,120 Speaker 4: Yes they can. 88 00:04:14,360 --> 00:04:18,080 Speaker 3: If they are getting ten fifteen hostages released every day 89 00:04:18,120 --> 00:04:21,560 Speaker 3: every other day, they can justify that cease fire to 90 00:04:21,640 --> 00:04:23,840 Speaker 3: their own people. Remember, they still have a lot of 91 00:04:23,880 --> 00:04:27,760 Speaker 3: explaining to do about how security was so lapsed. 92 00:04:27,440 --> 00:04:29,960 Speaker 4: That they allowed this attack to happen. Now, when I 93 00:04:30,000 --> 00:04:31,520 Speaker 4: say allow, I'm not saying. 94 00:04:31,279 --> 00:04:34,520 Speaker 3: That they know invited them in, but nonetheless irresponsible for 95 00:04:34,640 --> 00:04:36,880 Speaker 3: national security. And they still have to explain that they 96 00:04:36,920 --> 00:04:39,200 Speaker 3: haven't had any chance to do that because they've been 97 00:04:39,240 --> 00:04:42,320 Speaker 3: on the offensive. But if the ceasefire continues to hold, 98 00:04:42,760 --> 00:04:44,720 Speaker 3: then I think the Israeli people will say, how did 99 00:04:44,720 --> 00:04:46,560 Speaker 3: this happen in the first place, and what are you 100 00:04:46,720 --> 00:04:50,040 Speaker 3: doing to keep us safe now? And that's constant pressure 101 00:04:50,080 --> 00:04:53,360 Speaker 3: on the Israeli government to continue its offensive in Gaza. 102 00:04:53,839 --> 00:04:56,360 Speaker 2: Well, I think probably one of the challenge, or one 103 00:04:56,360 --> 00:04:57,919 Speaker 2: of the questions that I don't have an answer for, 104 00:04:58,080 --> 00:05:00,919 Speaker 2: is that if the is Real government, how do I 105 00:05:01,000 --> 00:05:06,119 Speaker 2: define mission accomplished? You can't get rid of a terrorist 106 00:05:06,240 --> 00:05:10,000 Speaker 2: organization per se, and that's kind of the end goal 107 00:05:10,040 --> 00:05:11,960 Speaker 2: they've set up here. So they're kind of in a 108 00:05:12,000 --> 00:05:14,440 Speaker 2: box here. How do you think they try to play that? 109 00:05:15,279 --> 00:05:16,800 Speaker 3: Well, Paul, I mean I think if you're of a 110 00:05:16,800 --> 00:05:20,320 Speaker 3: certain age, you remember George W. Bush standing on Air 111 00:05:20,400 --> 00:05:23,279 Speaker 3: Force carrier, I believe his carrier saying, you know, we're done, 112 00:05:23,400 --> 00:05:25,560 Speaker 3: and we were a long way, right, at least ten 113 00:05:25,600 --> 00:05:27,760 Speaker 3: to fifteen years away, I from being done in Iraq. 114 00:05:28,200 --> 00:05:30,200 Speaker 4: So I think that is a fundamental question. 115 00:05:30,279 --> 00:05:33,000 Speaker 3: I think the idea of what is a status quo 116 00:05:33,440 --> 00:05:36,760 Speaker 3: that will allow Israel to defend itself consistently? 117 00:05:37,160 --> 00:05:39,800 Speaker 4: What is the security status quo? 118 00:05:40,240 --> 00:05:43,200 Speaker 3: And you know, eradicating I'm assle with something that's who said, 119 00:05:43,720 --> 00:05:46,799 Speaker 3: It's unclear how long that's in yon, who lasts after 120 00:05:46,960 --> 00:05:50,960 Speaker 3: this immediate military engagement is over, he may be replaced. 121 00:05:51,240 --> 00:05:53,600 Speaker 3: And the question is what is justifiable in terms of 122 00:05:53,680 --> 00:05:55,920 Speaker 3: Israeli security? And that's going to be a question that 123 00:05:56,040 --> 00:05:58,480 Speaker 3: Biden will have to continue to answer and the Israeli 124 00:05:58,520 --> 00:06:00,600 Speaker 3: government will have to tell the world, you know, what 125 00:06:00,839 --> 00:06:01,360 Speaker 3: is enough? 126 00:06:01,839 --> 00:06:04,279 Speaker 4: And you're right, it is very difficult to quote unquote 127 00:06:04,320 --> 00:06:06,320 Speaker 4: eradicate an organization. 128 00:06:05,960 --> 00:06:09,719 Speaker 3: That was duly elected in Gaza has been the government 129 00:06:09,880 --> 00:06:13,159 Speaker 3: in Gaza, and it's almost impossible to weed out. 130 00:06:13,120 --> 00:06:16,200 Speaker 4: Without you know, very very large civilian casualties. 131 00:06:16,760 --> 00:06:18,920 Speaker 5: Walk us through what's going on in the House as 132 00:06:19,000 --> 00:06:22,239 Speaker 5: it was voting to limit those funds to Iran. 133 00:06:23,640 --> 00:06:26,320 Speaker 3: Yeah, so the funds for Iran is really a messaging 134 00:06:26,400 --> 00:06:29,160 Speaker 3: failure by the Biden administration and a messaging win for 135 00:06:29,240 --> 00:06:33,360 Speaker 3: the GOP. This is Iranian money that they made by 136 00:06:33,480 --> 00:06:36,800 Speaker 3: selling fuel on the international market, and it was sort 137 00:06:36,800 --> 00:06:38,920 Speaker 3: of kept aside. They couldn't have it's like you know, 138 00:06:39,000 --> 00:06:41,200 Speaker 3: South Korea had it, other people had it. It's and 139 00:06:41,320 --> 00:06:44,760 Speaker 3: we are allowing it to be released back to Iran. However, 140 00:06:45,080 --> 00:06:47,320 Speaker 3: the Biden administration has put a stop on the vast 141 00:06:47,440 --> 00:06:49,960 Speaker 3: majority of that money and will not allow it to 142 00:06:50,000 --> 00:06:54,800 Speaker 3: be released until there's no visible evidence of Iranian encouragement 143 00:06:55,000 --> 00:06:57,000 Speaker 3: of hamas R Hesblah in the Middle East. 144 00:06:57,080 --> 00:06:59,280 Speaker 4: So that could be a long way and a long 145 00:06:59,360 --> 00:07:00,800 Speaker 4: time for Iran to wait for that money. 146 00:07:01,000 --> 00:07:03,880 Speaker 3: But the Biden administration has gotten caught on that messaging 147 00:07:03,960 --> 00:07:07,320 Speaker 3: because of the deal they made theoretically for the release 148 00:07:07,400 --> 00:07:10,160 Speaker 3: of American hostages in Iran. So this is the problem 149 00:07:10,280 --> 00:07:13,280 Speaker 3: governments have when they make deals to negotiate for hostages. 150 00:07:13,560 --> 00:07:16,120 Speaker 3: This is what Israel is doing right now, what America 151 00:07:16,200 --> 00:07:19,240 Speaker 3: is doing, and the problem is Iran is actively funding, 152 00:07:19,320 --> 00:07:22,080 Speaker 3: as far as we know, a lot of terrorist organizations 153 00:07:22,320 --> 00:07:24,920 Speaker 3: which could pose a security threat to the United States. 154 00:07:25,120 --> 00:07:27,600 Speaker 4: So it puts the Bide administration in a very difficult position. 155 00:07:28,400 --> 00:07:32,560 Speaker 2: When you mentioned the speaker, Johnson's in a familiarly a 156 00:07:32,600 --> 00:07:37,160 Speaker 2: familiarly difficult situation and trying to get everybody together to move, 157 00:07:37,320 --> 00:07:40,600 Speaker 2: particularly in a Republican Party here to move in one 158 00:07:40,640 --> 00:07:43,400 Speaker 2: direction as it relates to some of these foreign policy issues. 159 00:07:44,880 --> 00:07:48,800 Speaker 2: Any reason to believe that he can in fact succeed 160 00:07:48,880 --> 00:07:52,360 Speaker 2: where maybe his prep predecessors did not, and that includes 161 00:07:52,440 --> 00:07:55,520 Speaker 2: aid for Israel and Ukraine. 162 00:07:56,560 --> 00:08:00,960 Speaker 3: I think, Paul there's a very short window for him 163 00:08:01,000 --> 00:08:03,360 Speaker 3: to succeed, literally till the end of the year, or 164 00:08:03,480 --> 00:08:06,280 Speaker 3: as we might say, till the Iowa primary. You know, 165 00:08:06,360 --> 00:08:10,560 Speaker 3: when Trump if Trump, When if Trump wins his first primary, 166 00:08:11,000 --> 00:08:14,160 Speaker 3: he becomes the spokesperson for the Republican Party, and there 167 00:08:14,360 --> 00:08:18,040 Speaker 3: is no voice louder than Donald Trump's, particularly when he'll 168 00:08:18,080 --> 00:08:20,920 Speaker 3: start to win the primary, and then Johnson has almost. 169 00:08:20,760 --> 00:08:21,720 Speaker 4: No maneuvering room. 170 00:08:21,760 --> 00:08:24,800 Speaker 3: And you can imagine that Trump will be adamant against 171 00:08:24,800 --> 00:08:28,760 Speaker 3: spending money except perhaps to help Israel, depends on their calculations. 172 00:08:29,120 --> 00:08:31,200 Speaker 3: But that's going to make things so much more difficult. 173 00:08:31,360 --> 00:08:34,199 Speaker 3: It'll be twenty twenty four, it'll be technically an election year. 174 00:08:34,520 --> 00:08:37,040 Speaker 3: Primary season gears up. Even though most people have to 175 00:08:37,080 --> 00:08:38,880 Speaker 3: register to run in a primary by the end of 176 00:08:38,960 --> 00:08:41,480 Speaker 3: this year, there are some loopholes in a lot of states. 177 00:08:41,679 --> 00:08:44,439 Speaker 3: So members of Congress, particularly Republicans, will be watching what 178 00:08:44,640 --> 00:08:47,640 Speaker 3: Trump says, not as much what Johnson says, and I 179 00:08:47,800 --> 00:08:49,960 Speaker 3: just think his maneuvering room almost goes to zero. 180 00:08:50,640 --> 00:08:54,479 Speaker 2: So, Wendy, do you think that the GOP the Republican 181 00:08:55,480 --> 00:09:00,120 Speaker 2: Party is ready to support and back another run by 182 00:09:00,200 --> 00:09:02,240 Speaker 2: President Bush? I mean President Trump. 183 00:09:04,160 --> 00:09:06,280 Speaker 3: I think talking about the Republican Party as a model 184 00:09:06,280 --> 00:09:07,920 Speaker 3: with the group is a difficult thing to do right 185 00:09:07,960 --> 00:09:09,880 Speaker 3: now as we are seeing cracks in. 186 00:09:09,880 --> 00:09:11,959 Speaker 4: The Democratic Party, so very difficult to know. 187 00:09:12,080 --> 00:09:15,040 Speaker 3: I think there is excitement brewing among the wing of 188 00:09:15,120 --> 00:09:17,520 Speaker 3: the party that doesn't want to see Trump, either because 189 00:09:17,520 --> 00:09:19,839 Speaker 3: they don't like Trump's or they think Trump will lose 190 00:09:20,280 --> 00:09:24,120 Speaker 3: for Nikki Haley, and the jockeying right now is DeSantis Haley. 191 00:09:24,360 --> 00:09:27,319 Speaker 3: DeSantis is really getting his endorsements in line in Iowa. 192 00:09:27,720 --> 00:09:30,080 Speaker 3: And if he can make a strong enough showing against 193 00:09:30,480 --> 00:09:33,439 Speaker 3: Trump and better than Haley, then I think he's back 194 00:09:33,520 --> 00:09:36,559 Speaker 3: in the conversation and I think if you have viability 195 00:09:36,880 --> 00:09:39,520 Speaker 3: with either of those two candidates, then I think it's 196 00:09:39,640 --> 00:09:42,240 Speaker 3: not quite as certain that Trump ends up being the nominee. 197 00:09:42,520 --> 00:09:44,120 Speaker 2: All Right, Wendy, thank you so much for joining us. 198 00:09:44,160 --> 00:09:48,480 Speaker 2: Really appreciate it. Wendy Schiller, she's a professor at Brown University, 199 00:09:48,559 --> 00:09:51,199 Speaker 2: and we can talk to Professor Schiller about a wide 200 00:09:51,280 --> 00:09:54,839 Speaker 2: range of political and geopolitical issues as well. So a 201 00:09:54,920 --> 00:09:57,199 Speaker 2: lot going on in the market light and a lot 202 00:09:57,679 --> 00:09:59,079 Speaker 2: just it's going to take place early over the next 203 00:09:59,080 --> 00:09:59,600 Speaker 2: several weeks. 204 00:10:01,120 --> 00:10:04,480 Speaker 6: You're listening to the Team Ken's are Live program Bloomberg 205 00:10:04,559 --> 00:10:07,760 Speaker 6: Markets weekdays at ten am Eastern on Bloomberg dot com, 206 00:10:08,000 --> 00:10:11,120 Speaker 6: the iHeartRadio app and the Bloomberg Business app, or listen 207 00:10:11,240 --> 00:10:13,360 Speaker 6: on demand wherever you get your podcasts. 208 00:10:14,880 --> 00:10:16,600 Speaker 2: All right, s and P five hundred. It's up almost 209 00:10:16,640 --> 00:10:17,800 Speaker 2: nineteen percent year to date. 210 00:10:17,840 --> 00:10:20,880 Speaker 5: It's up about ten one alone is it's up over 211 00:10:20,960 --> 00:10:21,840 Speaker 5: eight percent. 212 00:10:21,760 --> 00:10:24,120 Speaker 2: Exactly, It's and so but a lot of people I 213 00:10:24,160 --> 00:10:26,240 Speaker 2: just don't feel like there's that conviction behind it. And 214 00:10:26,280 --> 00:10:28,319 Speaker 2: I think maybe it's just because it's not you know, 215 00:10:28,400 --> 00:10:30,520 Speaker 2: you back out the magnificent seven and then it's like, 216 00:10:30,840 --> 00:10:32,559 Speaker 2: all right, we're five to six percent. So I'm just 217 00:10:32,640 --> 00:10:34,800 Speaker 2: not sure we go here, particularly as we think about 218 00:10:34,800 --> 00:10:36,719 Speaker 2: twenty twenty four. But our next guest, I know she 219 00:10:36,880 --> 00:10:40,559 Speaker 2: has an opinion. Katie Kaminski. She's a chief research strategist 220 00:10:40,679 --> 00:10:44,079 Speaker 2: at Alpha Simplex. Katie, thanks so much for joining us here. 221 00:10:44,200 --> 00:10:47,360 Speaker 2: I mean, what do you make of what we've seen 222 00:10:47,360 --> 00:10:49,640 Speaker 2: in the equity markets this year and how does that 223 00:10:49,760 --> 00:10:51,600 Speaker 2: set you up for your twenty twenty four outlook. 224 00:10:53,160 --> 00:10:54,719 Speaker 7: Oh that's a good question. I mean, I think the 225 00:10:54,800 --> 00:10:57,600 Speaker 7: biggest shock we've seen is just that divergence. I mean, 226 00:10:58,080 --> 00:11:01,079 Speaker 7: you look at the numbers and they look good, but 227 00:11:01,200 --> 00:11:03,960 Speaker 7: the truth is the average company hasn't done as well, 228 00:11:04,400 --> 00:11:07,920 Speaker 7: and so I think people are nervous about this excitement 229 00:11:08,000 --> 00:11:10,040 Speaker 7: that we're having this relief rally. But at the same 230 00:11:10,120 --> 00:11:13,920 Speaker 7: time they're saying, why is cooler data or weakness actually 231 00:11:14,000 --> 00:11:16,079 Speaker 7: a good sign? I think we have a lot of 232 00:11:16,160 --> 00:11:17,480 Speaker 7: things we have to digest right now. 233 00:11:17,840 --> 00:11:20,319 Speaker 5: Well, Katie, you're not only a strategist, you're also a 234 00:11:20,480 --> 00:11:23,320 Speaker 5: co portfolio manager, So I want to hear how are 235 00:11:23,400 --> 00:11:27,120 Speaker 5: you advising clients to position going into yurine and what 236 00:11:27,320 --> 00:11:29,480 Speaker 5: do they buy, what do they sell going into next year? 237 00:11:30,520 --> 00:11:32,959 Speaker 7: Well, I think the biggest thing we've focused on is 238 00:11:33,040 --> 00:11:35,960 Speaker 7: fixed income, and that's where we've come to this inflection point, 239 00:11:36,480 --> 00:11:38,240 Speaker 7: and I think we have to figure out are we 240 00:11:38,320 --> 00:11:40,120 Speaker 7: going to get those cuts or are we going to 241 00:11:40,200 --> 00:11:43,119 Speaker 7: have to wait longer for them. So I think investors 242 00:11:43,240 --> 00:11:46,679 Speaker 7: have to really think about what the potential impact of 243 00:11:46,840 --> 00:11:49,760 Speaker 7: opportunities for fixed income is the next year, and then 244 00:11:50,000 --> 00:11:54,000 Speaker 7: also consider how does this tighter policy continue to percolate 245 00:11:54,440 --> 00:11:57,680 Speaker 7: through the equity markets and where does that create opportunities 246 00:11:57,960 --> 00:12:00,960 Speaker 7: and where does that create problems for in places based 247 00:12:01,000 --> 00:12:03,439 Speaker 7: on just sort of that duration exposure that might be 248 00:12:03,600 --> 00:12:04,839 Speaker 7: more prolonged than we like. 249 00:12:07,200 --> 00:12:09,880 Speaker 2: So, Katie, do you think we've seen peak rates back 250 00:12:09,920 --> 00:12:10,679 Speaker 2: in late October? 251 00:12:12,280 --> 00:12:14,280 Speaker 7: That is the billion dollars? 252 00:12:15,120 --> 00:12:16,560 Speaker 2: Do be honest when you're the one to. 253 00:12:18,600 --> 00:12:20,760 Speaker 5: Tell us, well, you know what's interesting? 254 00:12:20,840 --> 00:12:21,040 Speaker 4: Yeah? 255 00:12:21,400 --> 00:12:24,400 Speaker 7: So sorry, yeah, No, what's interesting is we're really at 256 00:12:24,440 --> 00:12:27,080 Speaker 7: that inflection point because I've been looking at the trends 257 00:12:27,160 --> 00:12:30,559 Speaker 7: and fixed income and we started off with the inverted curve. 258 00:12:30,920 --> 00:12:34,319 Speaker 7: We moved to a disinversion this year. The next phase 259 00:12:34,760 --> 00:12:38,400 Speaker 7: is naturally a steeper yield curve. The question is do 260 00:12:38,520 --> 00:12:41,600 Speaker 7: we have a steeper yield curve because of some difficult 261 00:12:41,640 --> 00:12:44,839 Speaker 7: situation where we actually have higher rates for longer or 262 00:12:44,960 --> 00:12:47,120 Speaker 7: do we get cuts. And I think that's where I'm 263 00:12:48,000 --> 00:12:49,920 Speaker 7: I'm not sure yet to be honest, but I do 264 00:12:50,080 --> 00:12:51,839 Speaker 7: think we need to have a steep yield curve at 265 00:12:51,920 --> 00:12:52,400 Speaker 7: some point. 266 00:12:52,760 --> 00:12:56,000 Speaker 5: How do you view the direction of the economy and 267 00:12:56,040 --> 00:12:59,040 Speaker 5: also consumer spending because there's so much still kind of 268 00:12:59,120 --> 00:13:01,400 Speaker 5: gloom out there, well, the consumer pulling back. I mean, 269 00:13:01,440 --> 00:13:03,400 Speaker 5: if you look at those third quarter GDP numbers, we'll 270 00:13:03,400 --> 00:13:06,000 Speaker 5: get another revision on that later this week. I mean 271 00:13:06,080 --> 00:13:08,680 Speaker 5: that was close to five percent growth. You look at 272 00:13:08,679 --> 00:13:11,280 Speaker 5: the Atlanta FED numbers, obviously those are coming down around 273 00:13:11,360 --> 00:13:13,280 Speaker 5: two percent for the fourth quarter. But just on the 274 00:13:13,360 --> 00:13:16,760 Speaker 5: back of this record online sales for Black Friday, I mean, 275 00:13:16,800 --> 00:13:19,000 Speaker 5: should we really be concerned about consumer spending? 276 00:13:20,200 --> 00:13:22,880 Speaker 7: Well, this has been a continual question as well, is 277 00:13:22,960 --> 00:13:27,600 Speaker 7: that consumers are just being much more resilient than people 278 00:13:27,760 --> 00:13:30,920 Speaker 7: have it expected. And I think that's why this narrative 279 00:13:30,960 --> 00:13:33,160 Speaker 7: of when do we cut rates? When are we done 280 00:13:33,640 --> 00:13:37,080 Speaker 7: has been so hard because there hasn't been a clear 281 00:13:37,280 --> 00:13:42,000 Speaker 7: sign that we're ready to cut anytime soon. Because consumers 282 00:13:42,080 --> 00:13:45,520 Speaker 7: continue to be resilient, and you know, the recent data 283 00:13:45,600 --> 00:13:47,880 Speaker 7: this week has really already showed that that you know, 284 00:13:48,640 --> 00:13:50,840 Speaker 7: it's not clear, Katie. 285 00:13:50,920 --> 00:13:52,880 Speaker 2: I guess the one on one of the trades that 286 00:13:53,000 --> 00:13:54,800 Speaker 2: we read about a lot to shear was you know, 287 00:13:54,880 --> 00:13:58,040 Speaker 2: the hedge funds short treasuries. Do you think that's still 288 00:13:58,080 --> 00:14:00,319 Speaker 2: the case or they kind of covered that here? 289 00:14:01,720 --> 00:14:03,600 Speaker 7: I think, I mean, okay, this is a great question. 290 00:14:03,679 --> 00:14:06,280 Speaker 7: I love this question because I'm a quant and when 291 00:14:06,320 --> 00:14:08,560 Speaker 7: I look at the signals right now, what is alarming 292 00:14:08,640 --> 00:14:11,000 Speaker 7: to me is long term signals are still short in 293 00:14:11,120 --> 00:14:14,720 Speaker 7: fixed income given the moves that we've seen until recently, 294 00:14:15,880 --> 00:14:18,880 Speaker 7: shorter term signals are moving more on the long side. 295 00:14:18,920 --> 00:14:21,840 Speaker 7: So we're seeing this sort of mixed view on fixed income. 296 00:14:22,320 --> 00:14:25,600 Speaker 7: So that inflection point that so I do think because 297 00:14:25,640 --> 00:14:28,000 Speaker 7: of that, there are going to be some investors who 298 00:14:28,040 --> 00:14:30,880 Speaker 7: still think this may not be over yet, and so 299 00:14:30,960 --> 00:14:33,160 Speaker 7: I think that's mixed, but there's definitely less of them 300 00:14:33,280 --> 00:14:34,120 Speaker 7: than there were before. 301 00:14:34,560 --> 00:14:38,160 Speaker 5: What about in the commodities market? What is energy telling 302 00:14:38,240 --> 00:14:40,120 Speaker 5: us about the direction of the economy. 303 00:14:41,440 --> 00:14:44,480 Speaker 7: This is really one of my favorite questions because we 304 00:14:44,680 --> 00:14:47,600 Speaker 7: have really been pointing to the energy moves earlier in 305 00:14:47,680 --> 00:14:51,520 Speaker 7: the fall, when we started to see energy prices surging again. 306 00:14:51,960 --> 00:14:55,320 Speaker 7: But look what happened recently. Energy is now a short signal, 307 00:14:55,400 --> 00:14:58,040 Speaker 7: and that's been one of the more recent developments, and 308 00:14:58,160 --> 00:15:01,440 Speaker 7: that tells us that we didn't really have enough legs 309 00:15:01,760 --> 00:15:04,880 Speaker 7: and that energy move to cause some serious issues for inflation, 310 00:15:05,320 --> 00:15:08,840 Speaker 7: which is a positive sign, i'd say for this inflation 311 00:15:09,280 --> 00:15:12,200 Speaker 7: narrative of raising rates is a little bit more likely 312 00:15:12,240 --> 00:15:14,680 Speaker 7: to be over soon, which I think is good for 313 00:15:14,960 --> 00:15:18,320 Speaker 7: the consumer. It's good for this getting to target, and 314 00:15:18,920 --> 00:15:21,320 Speaker 7: you know, it's something to continue watching. But definitely it 315 00:15:21,440 --> 00:15:24,360 Speaker 7: had moved to a point where we were watching it, 316 00:15:24,800 --> 00:15:27,000 Speaker 7: but now it's come back and now it's short. Are 317 00:15:27,080 --> 00:15:28,160 Speaker 7: the signals for energy? 318 00:15:28,480 --> 00:15:29,040 Speaker 2: You're interesting? 319 00:15:29,320 --> 00:15:29,680 Speaker 5: All right? 320 00:15:29,760 --> 00:15:32,560 Speaker 2: So in a treasury remark, well, why can't I just 321 00:15:32,640 --> 00:15:34,840 Speaker 2: go buy a two year treasury and get my close 322 00:15:34,920 --> 00:15:36,960 Speaker 2: to five percent and just kind of call it a 323 00:15:37,040 --> 00:15:37,800 Speaker 2: couple of years. 324 00:15:37,640 --> 00:15:40,240 Speaker 7: Here, Well, the problem is you're going to have to 325 00:15:40,280 --> 00:15:41,600 Speaker 7: roll that over, right, So. 326 00:15:41,800 --> 00:15:44,000 Speaker 2: Two years A lot can happen in two years. 327 00:15:44,880 --> 00:15:47,560 Speaker 7: Yeah, that's true. And so I think where the challenge 328 00:15:47,680 --> 00:15:49,680 Speaker 7: is is that if you look at where the curve 329 00:15:49,840 --> 00:15:53,600 Speaker 7: is today, we still don't have that duration premium there. 330 00:15:54,040 --> 00:15:56,360 Speaker 7: So if you buy longer term debt and we do 331 00:15:56,680 --> 00:16:00,120 Speaker 7: have an environment where yields continue to be higher, that 332 00:16:00,240 --> 00:16:02,800 Speaker 7: might be negative MPV in relative terms, and I think 333 00:16:02,960 --> 00:16:06,600 Speaker 7: that's where I think you have to think about what 334 00:16:06,880 --> 00:16:09,360 Speaker 7: is going to happen for cuts is going to dictate 335 00:16:09,760 --> 00:16:12,160 Speaker 7: when we get to that and that steeper curve or 336 00:16:12,160 --> 00:16:15,120 Speaker 7: a more normal yield curve. So yeah, the two year 337 00:16:15,200 --> 00:16:16,800 Speaker 7: looks still very good, and I think that's why people 338 00:16:16,840 --> 00:16:18,600 Speaker 7: are buying it right now, and that's why yields have 339 00:16:18,640 --> 00:16:22,640 Speaker 7: been going down because people think this opportunity might not last. 340 00:16:22,920 --> 00:16:25,600 Speaker 7: So maybe it's time to buy treasuries because you want 341 00:16:25,640 --> 00:16:26,480 Speaker 7: to lock in those rates. 342 00:16:26,680 --> 00:16:28,880 Speaker 5: I only have about forty five seconds left. But what's 343 00:16:28,960 --> 00:16:31,240 Speaker 5: the top question that you hear from your clients? 344 00:16:32,480 --> 00:16:35,080 Speaker 7: Oh, I think the biggest question is are we done? 345 00:16:35,720 --> 00:16:37,280 Speaker 7: Our interest rate's going to go down? 346 00:16:37,440 --> 00:16:37,840 Speaker 6: And when? 347 00:16:38,040 --> 00:16:40,760 Speaker 7: And tell me now, because I think everybody really wants 348 00:16:40,840 --> 00:16:44,000 Speaker 7: that for many reasons, because we're used to lower rates. 349 00:16:44,440 --> 00:16:47,320 Speaker 7: But we have been very strong this year saying higher 350 00:16:47,400 --> 00:16:49,360 Speaker 7: for longer, and to be honest, most of the year 351 00:16:49,400 --> 00:16:52,880 Speaker 7: we've been correct. So I would generally have been telling 352 00:16:52,960 --> 00:16:55,640 Speaker 7: them to be patient and that to expect that higher 353 00:16:55,720 --> 00:16:57,720 Speaker 7: rates could last longer than you'd like. 354 00:16:58,600 --> 00:17:00,920 Speaker 2: Kittie, thank you so much for joining us. Really appreciate 355 00:17:00,960 --> 00:17:03,720 Speaker 2: getting some of your time today, Katie Kaminski. She is 356 00:17:03,840 --> 00:17:08,040 Speaker 2: the chief research strategist at Alpha Simplex. We're up there, 357 00:17:08,080 --> 00:17:10,440 Speaker 2: and I think someone Cambridge, Massachusetts or something in a 358 00:17:10,440 --> 00:17:13,200 Speaker 2: couple of decent schools up there, so I understand, So 359 00:17:13,280 --> 00:17:14,840 Speaker 2: we appreciate getting a few minutes for a time. 360 00:17:15,119 --> 00:17:18,200 Speaker 6: You're listening to the tape. Cat's are live program Bloomberg 361 00:17:18,320 --> 00:17:21,879 Speaker 6: Markets weekdays at ten am Eastern on Bloomberg Radio, the 362 00:17:21,960 --> 00:17:25,160 Speaker 6: tune in app, Bloomberg dot Com, and the Bloomberg Business App. 363 00:17:25,240 --> 00:17:28,000 Speaker 6: You can also listen live on Amazon Alexa from our 364 00:17:28,080 --> 00:17:32,720 Speaker 6: flagship New York station, Just say Alexa, play Bloomberg eleven thirty. 365 00:17:34,359 --> 00:17:36,280 Speaker 2: Chess men, Paul Sweeney here in our Bloomberg and Art 366 00:17:36,280 --> 00:17:39,920 Speaker 2: at Brokers Studio in our HQ here in New York City. 367 00:17:40,440 --> 00:17:43,240 Speaker 2: Good news on the geopolitical front. I think it's good news. 368 00:17:43,720 --> 00:17:48,320 Speaker 2: Cutter says Israel Hamas agree to extend truce for two days. 369 00:17:48,400 --> 00:17:50,960 Speaker 2: Let's get some color on this developing story. Bobby Ghost 370 00:17:51,040 --> 00:17:54,480 Speaker 2: joins us. He's Bloomberg Opinion. He knows this part of 371 00:17:54,520 --> 00:17:59,240 Speaker 2: the world very very well. Lots of experience. Bobby, I 372 00:17:59,359 --> 00:18:01,000 Speaker 2: take this as good news. How do you take this? 373 00:18:01,320 --> 00:18:04,040 Speaker 8: No, Yeah, it's good news. It's good news for the 374 00:18:04,119 --> 00:18:06,439 Speaker 8: families of the hostages that are going to be released. 375 00:18:06,440 --> 00:18:09,560 Speaker 8: We don't know the exact number, but good news for them. 376 00:18:09,640 --> 00:18:12,119 Speaker 8: It gives them hope. It's good news for the Palestinians 377 00:18:12,119 --> 00:18:13,840 Speaker 8: who live in Gaza because it gives them two more 378 00:18:13,920 --> 00:18:17,160 Speaker 8: days without the sky falling on their heads. It's good 379 00:18:17,200 --> 00:18:21,080 Speaker 8: news for President Biden, who has articulated several times that 380 00:18:21,400 --> 00:18:24,200 Speaker 8: he wanted the truth to be extended. It's good news 381 00:18:24,240 --> 00:18:28,520 Speaker 8: for all of those constituencies. For Benjamin Ettnia, who the 382 00:18:28,560 --> 00:18:32,119 Speaker 8: Prime Minister of Israel. The question was always going to 383 00:18:32,200 --> 00:18:37,720 Speaker 8: be the balancing of all this pressure from within and 384 00:18:37,800 --> 00:18:41,000 Speaker 8: without to extend the truth with the military calculation, And 385 00:18:41,040 --> 00:18:45,040 Speaker 8: the military calculation was, you know, if you extend, does 386 00:18:45,080 --> 00:18:47,760 Speaker 8: that give Hamas more time to re arm itself, to 387 00:18:47,880 --> 00:18:53,480 Speaker 8: regroup its fighters and become a danger. Do you lose momentum? 388 00:18:53,560 --> 00:18:57,119 Speaker 8: Do you lose the optics? So he's clearly decided that 389 00:18:57,240 --> 00:18:59,919 Speaker 8: two days is adequate at least for now. 390 00:19:00,680 --> 00:19:03,200 Speaker 5: What are the next immediate steps to see whether or 391 00:19:03,240 --> 00:19:06,520 Speaker 5: not this truth could be extended for even longer beyond 392 00:19:06,600 --> 00:19:07,280 Speaker 5: those two days? 393 00:19:07,520 --> 00:19:10,760 Speaker 8: Well, again those calculations. He's going to be the NETNA 394 00:19:10,800 --> 00:19:13,000 Speaker 8: who's going to be informed by his generals about what 395 00:19:13,200 --> 00:19:16,320 Speaker 8: their best assessment is. And I think we will see 396 00:19:16,520 --> 00:19:20,359 Speaker 8: extensions on one day, two days at a time, not 397 00:19:20,520 --> 00:19:23,080 Speaker 8: for a a week long or even a month long. 398 00:19:23,480 --> 00:19:25,480 Speaker 2: So how do you think the generals, how do you 399 00:19:25,520 --> 00:19:29,520 Speaker 2: think the generals and the military folks are defining success 400 00:19:29,600 --> 00:19:31,280 Speaker 2: on a daily basis. It kind of reminds me a 401 00:19:31,320 --> 00:19:33,280 Speaker 2: little bit of Vietnam when it was his body count. 402 00:19:34,760 --> 00:19:37,640 Speaker 8: Well, if that was the case, and the body count 403 00:19:37,680 --> 00:19:42,840 Speaker 8: is overwhelmingly on the Palestinian side, we don't know very 404 00:19:42,960 --> 00:19:49,000 Speaker 8: much of Israel's military casualties injured or or killed. We 405 00:19:49,080 --> 00:19:51,520 Speaker 8: have a pretty good idea of how many Palestinians are dying. 406 00:19:52,160 --> 00:19:55,040 Speaker 8: There's been some reports from Israeli military that they believe 407 00:19:55,119 --> 00:19:58,359 Speaker 8: that between one thousand and two thousand Hamas fighters have 408 00:19:58,520 --> 00:20:02,920 Speaker 8: been killed. That's out of a grand total of you know, 409 00:20:03,440 --> 00:20:09,400 Speaker 8: many more thousands of Palestinians. So again, these numbers kind 410 00:20:09,440 --> 00:20:13,440 Speaker 8: of they're fairly small numbers because by Israel's assessment, Hamas 411 00:20:13,560 --> 00:20:17,680 Speaker 8: has thirty thousand fighters, and if they're only killed, say 412 00:20:17,760 --> 00:20:20,200 Speaker 8: two thousand, shows there's a long way to go. 413 00:20:20,880 --> 00:20:24,119 Speaker 5: Will additional aid be able to be distributed there based 414 00:20:24,160 --> 00:20:26,920 Speaker 5: on those two days truth being extended, Yes. 415 00:20:26,800 --> 00:20:30,200 Speaker 8: That's to be expected that that border crossing in Rafa 416 00:20:30,720 --> 00:20:34,640 Speaker 8: south of Gaza into Egypt, that will be very busy, 417 00:20:34,760 --> 00:20:37,840 Speaker 8: lots of aid going in. I mean, the scale of 418 00:20:38,160 --> 00:20:40,400 Speaker 8: what the people in Gaza needs is off the chart. 419 00:20:40,520 --> 00:20:43,800 Speaker 8: So even several hundred trucks a day is not going 420 00:20:43,840 --> 00:20:46,399 Speaker 8: to cover it, but better that than nothing. So, you know, 421 00:20:46,680 --> 00:20:50,840 Speaker 8: again for that reason too, this is good news within 422 00:20:50,960 --> 00:20:53,159 Speaker 8: reason for the Palestinian people in Gaza. 423 00:20:53,359 --> 00:20:55,719 Speaker 2: Or do you think the United States State Department feels 424 00:20:55,960 --> 00:20:58,960 Speaker 2: isn't a good outcome? Like what do you think the 425 00:20:59,119 --> 00:21:01,000 Speaker 2: United States State Department and is kind of hoping for 426 00:21:01,200 --> 00:21:04,280 Speaker 2: rooting for trying to get our policy there. 427 00:21:04,800 --> 00:21:07,760 Speaker 8: Well, so it's not so much the State Department. This 428 00:21:07,920 --> 00:21:10,520 Speaker 8: policy has been run out of the White House. We've 429 00:21:10,600 --> 00:21:14,399 Speaker 8: had there's been reports of quite a lot of disappointment 430 00:21:14,480 --> 00:21:16,800 Speaker 8: and anger in the State Department that White House is 431 00:21:16,840 --> 00:21:21,359 Speaker 8: running this without regard to the State Department's advice. So 432 00:21:21,480 --> 00:21:25,119 Speaker 8: this is President Biden taking the lead essentially, and what 433 00:21:25,280 --> 00:21:30,040 Speaker 8: he wants to see is, you know, hamas greatly greatly diminished, 434 00:21:31,840 --> 00:21:36,760 Speaker 8: but quickly so that the sort of daily reports of 435 00:21:36,880 --> 00:21:40,480 Speaker 8: human casualties, of civilian casualties, innocent people being killed, that 436 00:21:40,640 --> 00:21:43,560 Speaker 8: can end. So he would like to see this result quickly, 437 00:21:44,880 --> 00:21:48,320 Speaker 8: but this is not playing out on his timeline, is 438 00:21:48,400 --> 00:21:50,560 Speaker 8: playing out on the timeline of Hamas and Israel, and 439 00:21:50,640 --> 00:21:54,359 Speaker 8: so he can put pressure on Israel, and clearly to 440 00:21:54,480 --> 00:21:57,200 Speaker 8: some degree has succeeded with this truce being extended. But 441 00:21:57,280 --> 00:21:59,600 Speaker 8: there's only so much that even the President of the 442 00:21:59,680 --> 00:22:00,520 Speaker 8: United States can do. 443 00:22:00,960 --> 00:22:03,960 Speaker 5: From your purview, and I'm sure it's difficult to gauge, 444 00:22:04,040 --> 00:22:06,399 Speaker 5: but what do you think is the timetable for how 445 00:22:06,480 --> 00:22:08,520 Speaker 5: long this conflict could continue to go on for? 446 00:22:09,359 --> 00:22:12,280 Speaker 8: It's really hard to tell. The question is whether or 447 00:22:12,359 --> 00:22:17,000 Speaker 8: not Israel changes its goals. The original goal that netanyahuo 448 00:22:17,119 --> 00:22:22,320 Speaker 8: articulated is that Hamas must be essentially eliminated. That's as 449 00:22:22,400 --> 00:22:26,960 Speaker 8: I said, thirty thousand fighters that that will require weeks, months, 450 00:22:27,560 --> 00:22:31,320 Speaker 8: years to pull off. But if the goal is changed, 451 00:22:31,359 --> 00:22:34,119 Speaker 8: and if it's you know, a new kind of target, 452 00:22:34,200 --> 00:22:38,840 Speaker 8: which is that Hamas is greatly reduced or Hamas gives 453 00:22:38,960 --> 00:22:43,320 Speaker 8: up control of Gaza, still very high bar to get over, 454 00:22:43,880 --> 00:22:46,879 Speaker 8: but at least then you can you can speculate about 455 00:22:46,920 --> 00:22:51,080 Speaker 8: a timeline right now, the end state is so vague 456 00:22:51,240 --> 00:22:53,520 Speaker 8: that it's impossible to say how long this might take. 457 00:22:54,560 --> 00:22:56,440 Speaker 2: You know, I kind of think that I haven't seen 458 00:22:56,520 --> 00:23:00,640 Speaker 2: on then, you know, the cable news networks many images 459 00:23:00,760 --> 00:23:04,200 Speaker 2: of rockets landing in Israel. Is that because I'm just 460 00:23:04,280 --> 00:23:07,439 Speaker 2: not paying attention or have they been reduced? And does 461 00:23:07,480 --> 00:23:10,960 Speaker 2: that indicate that maybe Israel is in fact impacting the 462 00:23:11,800 --> 00:23:13,040 Speaker 2: bility of Hamas to wage war. 463 00:23:13,400 --> 00:23:16,520 Speaker 8: There have been fewer rocket attacks, no question, volleys of 464 00:23:16,560 --> 00:23:18,200 Speaker 8: them every now and again, but certainly not with the 465 00:23:18,280 --> 00:23:22,000 Speaker 8: intensity that we saw on and after the seventh of 466 00:23:22,080 --> 00:23:25,600 Speaker 8: October the first few days. You know, those rockets have 467 00:23:25,720 --> 00:23:28,800 Speaker 8: to be smuggled in. Some of them are the sort 468 00:23:28,800 --> 00:23:34,480 Speaker 8: of lower tech ones are manufactured within Gaza. You know, 469 00:23:34,640 --> 00:23:39,080 Speaker 8: since October seven terrorist attack, Israel has been minding those 470 00:23:39,119 --> 00:23:42,959 Speaker 8: borders more carefully, and the destruction in Gaza City has 471 00:23:43,040 --> 00:23:48,000 Speaker 8: greatly sort of reduced the arms caches and Hamas's ability 472 00:23:48,280 --> 00:23:53,120 Speaker 8: to build new rockets. So yeah, but Israel's concern will 473 00:23:53,160 --> 00:23:56,680 Speaker 8: be that if the truce continues, then Hamas will have 474 00:23:56,760 --> 00:23:59,840 Speaker 8: the ability to bring in more rockets and build more 475 00:24:00,080 --> 00:24:02,320 Speaker 8: rockets and start firing those off again. 476 00:24:02,800 --> 00:24:06,159 Speaker 5: So during the truth is truth, isn't there a concern 477 00:24:06,320 --> 00:24:09,240 Speaker 5: also that potentially, if you're thinking about Hamas, would they 478 00:24:09,240 --> 00:24:12,040 Speaker 5: be able to potentially bring in reinforcements or are there 479 00:24:12,359 --> 00:24:14,639 Speaker 5: any sort of stipulation on what they were able to 480 00:24:14,760 --> 00:24:17,200 Speaker 5: do during the two day period. 481 00:24:17,359 --> 00:24:19,920 Speaker 8: But they don't really need reisforcements from the outside, and 482 00:24:20,600 --> 00:24:23,680 Speaker 8: smuggling in human beings in the middle of a war 483 00:24:23,800 --> 00:24:26,560 Speaker 8: situation can be quite tricky, especially when you know that 484 00:24:26,720 --> 00:24:29,639 Speaker 8: Israel and Egypt presumably are on a high state of 485 00:24:29,680 --> 00:24:33,080 Speaker 8: alert watching for any movement of large groups of people 486 00:24:33,119 --> 00:24:38,040 Speaker 8: in that direction. And you know, the Hamas, unlike let's 487 00:24:38,040 --> 00:24:39,880 Speaker 8: say is SIS and some other terrorist groups that we're 488 00:24:39,920 --> 00:24:44,480 Speaker 8: familiar with, tends to depend on its own on Palestinians 489 00:24:44,520 --> 00:24:46,920 Speaker 8: to form the bulk of its fighting force. It gets 490 00:24:47,000 --> 00:24:50,680 Speaker 8: weapons from Iran, it gets money from Iran and other 491 00:24:50,760 --> 00:24:54,680 Speaker 8: sources internationally. But for actual manpower, it has plenty of 492 00:24:54,760 --> 00:24:59,040 Speaker 8: manpower within Gaza. But the concern would be weapons. Are 493 00:24:59,080 --> 00:25:02,400 Speaker 8: they able to smuggle weapons either by sea or through 494 00:25:02,440 --> 00:25:06,240 Speaker 8: those tunnels that we've been reading about for years and years. Again, 495 00:25:06,520 --> 00:25:10,080 Speaker 8: you'd hope that particularly the Egyptians would be on a 496 00:25:10,160 --> 00:25:13,840 Speaker 8: high alert and prevent that from happening. But it's been 497 00:25:13,920 --> 00:25:15,800 Speaker 8: known to happen in the past, where even in the 498 00:25:15,880 --> 00:25:19,720 Speaker 8: middle of a conflict situation with Israel, Hamas has shown 499 00:25:19,800 --> 00:25:23,719 Speaker 8: the ability of smuggling in or building new weapons. 500 00:25:23,920 --> 00:25:27,480 Speaker 2: All right, So we're, you know, fifty days plus into this. 501 00:25:28,080 --> 00:25:32,840 Speaker 2: How united is the Israeli population to what's happening these days? 502 00:25:32,920 --> 00:25:34,840 Speaker 2: Is that wavered at all? Do we have any reporting? 503 00:25:35,240 --> 00:25:39,280 Speaker 8: Well, it's wavered on the political spectrum. So the vast 504 00:25:39,359 --> 00:25:41,920 Speaker 8: majority to go buy the polls. The vast majority of 505 00:25:42,040 --> 00:25:44,760 Speaker 8: Israeli's want Benjamin Netania who gone. They want him to 506 00:25:44,840 --> 00:25:47,520 Speaker 8: pay the price for his failings as a leader which 507 00:25:47,640 --> 00:25:51,240 Speaker 8: led to the October seven attack. On the other hand, 508 00:25:51,280 --> 00:25:54,240 Speaker 8: there seems to be still quite a lot of support 509 00:25:54,440 --> 00:25:59,040 Speaker 8: for the military operation. It was an incredibly traumatic event 510 00:25:59,160 --> 00:26:03,120 Speaker 8: for the Israeli the terrorist attack, and they do want 511 00:26:03,200 --> 00:26:05,639 Speaker 8: to see uh, they do want to make sure that 512 00:26:05,840 --> 00:26:08,159 Speaker 8: that day, that the horrors of that day are never 513 00:26:08,280 --> 00:26:11,679 Speaker 8: visited on them again. So they would like to see 514 00:26:11,880 --> 00:26:15,880 Speaker 8: their military succeed, But they don't want to see their 515 00:26:15,920 --> 00:26:19,440 Speaker 8: military having to occupy Gaza for an extended period of time. 516 00:26:20,320 --> 00:26:23,040 Speaker 8: So quite a mixed bag there's a lot of support 517 00:26:23,080 --> 00:26:26,520 Speaker 8: for the military, but no very little support for Netanya 518 00:26:26,560 --> 00:26:27,040 Speaker 8: who himself. 519 00:26:27,200 --> 00:26:29,120 Speaker 2: So you think Nenya who stays in power as long 520 00:26:29,160 --> 00:26:33,760 Speaker 2: as there are you know, active operations. 521 00:26:33,960 --> 00:26:36,159 Speaker 8: Well, he's counting on that. That's for sure, that that 522 00:26:36,440 --> 00:26:38,520 Speaker 8: his people won't want to change horses in the middle 523 00:26:38,680 --> 00:26:42,200 Speaker 8: in red stream. But there are calls for his resignation 524 00:26:42,920 --> 00:26:47,879 Speaker 8: that are coming from some prominent voices, including farmer military leaders, 525 00:26:47,920 --> 00:26:52,200 Speaker 8: from our intelligence chiefs, former prime ministers. If that pressure 526 00:26:52,280 --> 00:26:55,560 Speaker 8: keeps building, then he'll have to He'll all. 527 00:26:55,520 --> 00:26:58,000 Speaker 2: Right, a lot of a lot of moving parts there, certainly, 528 00:26:58,080 --> 00:27:00,480 Speaker 2: Bobby Gosh, thank you so much for joining us. Goash's 529 00:27:00,480 --> 00:27:02,760 Speaker 2: a calmness for Bloomberg Opinion. Joining us live here in 530 00:27:02,800 --> 00:27:04,800 Speaker 2: our studios here in New York City. 531 00:27:05,400 --> 00:27:08,480 Speaker 6: You're listening to the tape Cat's are Live program Bloomberg 532 00:27:08,600 --> 00:27:12,159 Speaker 6: Markets weekdays at ten am Eastern on Bloomberg Radio, the 533 00:27:12,240 --> 00:27:15,440 Speaker 6: tune in app, Bloomberg dot Com, and the Bloomberg Business App. 534 00:27:15,520 --> 00:27:18,280 Speaker 6: You can also listen live on Amazon Alexa from our 535 00:27:18,359 --> 00:27:22,720 Speaker 6: flagship New York station, Just Say Alexa playing Bloomberg eleven thirty. 536 00:27:25,240 --> 00:27:28,840 Speaker 2: George legend On was shreet in my opinion he's chairman 537 00:27:29,160 --> 00:27:32,359 Speaker 2: of Sanders Mars Harris. But he's been doing this a 538 00:27:32,440 --> 00:27:35,040 Speaker 2: long time. I'm not calling George old here. I'm saying 539 00:27:35,040 --> 00:27:36,720 Speaker 2: he's been on Wall Street a long time. He began 540 00:27:36,800 --> 00:27:39,480 Speaker 2: his career as a stockbroker at E. F. Hutton, one 541 00:27:39,520 --> 00:27:41,040 Speaker 2: of my favorite. If you don't know what that is, 542 00:27:41,119 --> 00:27:43,920 Speaker 2: go google it or go to YouTube and see the commercials. 543 00:27:44,640 --> 00:27:47,399 Speaker 2: But I interviewed with him way back in the day. 544 00:27:47,440 --> 00:27:49,760 Speaker 2: I'm talking eighty eight or eighty nine when he was 545 00:27:49,840 --> 00:27:52,879 Speaker 2: at Bach. Did not get the just that did not 546 00:27:53,160 --> 00:27:56,840 Speaker 2: derail my career, I went on. But he's not chairman 547 00:27:56,880 --> 00:27:59,400 Speaker 2: of Sanders Mars. George, thanks so much for taking the time. 548 00:27:59,480 --> 00:28:01,600 Speaker 2: We shake getting a few minutes of your time here. 549 00:28:02,119 --> 00:28:04,919 Speaker 2: I want to take advantage of your perspective, your experience, George. 550 00:28:05,119 --> 00:28:07,480 Speaker 2: I mean, we've had a crazy two to three years 551 00:28:07,560 --> 00:28:11,199 Speaker 2: here in these markets, what with a pandemic and whatnot. 552 00:28:11,560 --> 00:28:13,920 Speaker 2: When you sit back and maybe talk to your biggest clients, 553 00:28:14,800 --> 00:28:16,080 Speaker 2: what are you telling them these days? 554 00:28:17,080 --> 00:28:21,119 Speaker 9: Well, I appreciate being called a legend, because a legend 555 00:28:21,200 --> 00:28:28,040 Speaker 9: is basically synonymous. It has been and I apologize for 556 00:28:28,080 --> 00:28:32,720 Speaker 9: your not getting the job or or or credential beat 557 00:28:35,720 --> 00:28:41,560 Speaker 9: looking back. UH is very educational and instructive. It's not 558 00:28:41,720 --> 00:28:42,600 Speaker 9: terribly predictive. 559 00:28:42,680 --> 00:28:42,840 Speaker 3: Though. 560 00:28:43,240 --> 00:28:47,400 Speaker 9: One of the wonderful things about the investment world, financial world, 561 00:28:47,520 --> 00:28:55,160 Speaker 9: for everybody is that it's ever changing. It's it's ever dynamic, 562 00:28:55,320 --> 00:28:58,600 Speaker 9: it's it's sort of like a kaleidoscope. And what was 563 00:28:58,720 --> 00:29:02,680 Speaker 9: in the past or or the things that creates circumstances 564 00:29:03,040 --> 00:29:06,320 Speaker 9: a year ago, five years ago, three years ago, doesn't 565 00:29:06,400 --> 00:29:12,640 Speaker 9: really matter. So the interaction of finance, emotion, world affairs, 566 00:29:12,760 --> 00:29:17,440 Speaker 9: economic affairs that creates Wall Street or investment is very 567 00:29:18,120 --> 00:29:21,680 Speaker 9: different going ahead than it's ever that it's ever been 568 00:29:21,720 --> 00:29:24,840 Speaker 9: in the past, and I think that that is particularly 569 00:29:24,960 --> 00:29:32,520 Speaker 9: exciting today. Most pundits believe that the market, at least 570 00:29:32,520 --> 00:29:35,880 Speaker 9: over the shorter term, is over extended. It's rallied a 571 00:29:36,000 --> 00:29:39,720 Speaker 9: lot in November, and they think, well, it's time for 572 00:29:39,800 --> 00:29:43,320 Speaker 9: a pullback. It's too extended. But again, I think that 573 00:29:44,040 --> 00:29:49,680 Speaker 9: that's historic or a retrospective reasoning rather than a good 574 00:29:50,840 --> 00:29:52,480 Speaker 9: view of what lies ahead for us. 575 00:29:53,200 --> 00:29:57,800 Speaker 5: From your purview, how do you view the American consumer 576 00:29:57,880 --> 00:30:00,520 Speaker 5: and the resiliency there when you still have so many 577 00:30:00,600 --> 00:30:03,800 Speaker 5: people questioning the strength but yet we're still continuing to 578 00:30:03,880 --> 00:30:07,240 Speaker 5: see especially with these latest sales numbers for Black Friday 579 00:30:07,240 --> 00:30:10,080 Speaker 5: as well as Cyber Monday, that American consumers continue to spend. 580 00:30:11,680 --> 00:30:18,440 Speaker 9: The American consumer, actually, probably consumers and the households worldwide 581 00:30:19,160 --> 00:30:24,240 Speaker 9: are really what drive economies and drive growth and productivity. 582 00:30:25,080 --> 00:30:28,080 Speaker 9: We tend, I think, to look to the FED, to 583 00:30:28,200 --> 00:30:32,400 Speaker 9: look to the government, to look to the leaders of 584 00:30:32,520 --> 00:30:39,000 Speaker 9: the EU to either create prosperity or to create recessions 585 00:30:39,440 --> 00:30:45,440 Speaker 9: or economic contraction. That's not right. It's really the individual 586 00:30:45,520 --> 00:30:52,240 Speaker 9: and collective energy gusto of the household that that creates 587 00:30:53,080 --> 00:30:58,600 Speaker 9: what lies ahead, and the US case of recent weeks, 588 00:30:58,640 --> 00:31:01,880 Speaker 9: and I think going forward, uh, what lies ahead is 589 00:31:03,080 --> 00:31:07,640 Speaker 9: people want to do better. People are invigorated, people will 590 00:31:07,720 --> 00:31:10,640 Speaker 9: spend because they'll work, and they're they're earning good money 591 00:31:10,680 --> 00:31:14,280 Speaker 9: and actually now a better money in real terms than 592 00:31:14,320 --> 00:31:17,240 Speaker 9: they have for several years. So I think the pessimists, 593 00:31:17,560 --> 00:31:22,360 Speaker 9: uh yeah, may may may be blinded to what really 594 00:31:22,880 --> 00:31:27,560 Speaker 9: drives the economies. It's not the FED, it's it's individuals. 595 00:31:27,640 --> 00:31:28,360 Speaker 9: It's households. 596 00:31:29,080 --> 00:31:31,400 Speaker 2: George, and you're I'm just looking through some of your 597 00:31:31,440 --> 00:31:33,760 Speaker 2: notes here you have it. I think a really out 598 00:31:33,800 --> 00:31:38,120 Speaker 2: of consensus call here buy regional bank stocks, why do 599 00:31:38,200 --> 00:31:40,640 Speaker 2: you say that there's definitely a lot of concern out there? 600 00:31:41,280 --> 00:31:41,600 Speaker 4: All right? 601 00:31:41,720 --> 00:31:45,120 Speaker 9: First the disclaimer, our company owns a regional bank, so 602 00:31:45,680 --> 00:31:50,760 Speaker 9: I've got to build in bias. Start with that. Step 603 00:31:50,840 --> 00:31:56,240 Speaker 9: away from it. There are a very few regional banks 604 00:31:56,960 --> 00:32:03,320 Speaker 9: that are in somewhat compromised positions. Republic National Bank, Silicone 605 00:32:03,400 --> 00:32:08,600 Speaker 9: Valley Bank were really wealth management firms that lent excessively 606 00:32:09,840 --> 00:32:15,080 Speaker 9: as a way to attract clients to their wealth management platform. 607 00:32:15,800 --> 00:32:19,560 Speaker 9: I understand their rationale, but it was poorly done. There 608 00:32:19,600 --> 00:32:24,800 Speaker 9: are some number of regional banks that have lent too 609 00:32:24,920 --> 00:32:31,120 Speaker 9: much money to commercial real estate enterprises of one sort 610 00:32:31,240 --> 00:32:34,760 Speaker 9: or another, and they are apt to be squeezed. But 611 00:32:35,120 --> 00:32:37,640 Speaker 9: of the over four thousand banks in the United States, 612 00:32:38,200 --> 00:32:42,880 Speaker 9: there are very few that are in that predicament. Broadly speaking, 613 00:32:43,800 --> 00:32:49,440 Speaker 9: community bankers are very very cautious. They're conservative, they're very 614 00:32:50,040 --> 00:32:54,880 Speaker 9: aware of the regulatory oversight is placed on them, and 615 00:32:55,000 --> 00:33:01,440 Speaker 9: the stocks are extremely inexpensive now for a half or 616 00:33:01,520 --> 00:33:04,680 Speaker 9: a quarter of what they did a year or two ago. 617 00:33:04,880 --> 00:33:09,880 Speaker 9: So I think that the pessimism regarding regional banks should 618 00:33:10,920 --> 00:33:14,080 Speaker 9: have been or should be limited to a very small number, 619 00:33:14,320 --> 00:33:18,880 Speaker 9: and the rest are screamingly cheap, with strong growth prospects 620 00:33:18,920 --> 00:33:22,920 Speaker 9: ahead of them, and in many cases a generous dividend yields. 621 00:33:24,120 --> 00:33:26,040 Speaker 5: We only have about a minute left, But what's the 622 00:33:26,160 --> 00:33:28,520 Speaker 5: top question that you hear from your clients. 623 00:33:30,720 --> 00:33:34,000 Speaker 9: The biggest question that our customers have is should I 624 00:33:34,120 --> 00:33:37,760 Speaker 9: be involved in equities or are they simply too risky 625 00:33:38,120 --> 00:33:40,240 Speaker 9: in a world where I can get a five percent 626 00:33:40,680 --> 00:33:46,560 Speaker 9: return on the five year treasury. Our answer to that 627 00:33:47,080 --> 00:33:50,320 Speaker 9: is on both the five year treasury yielding four and 628 00:33:50,360 --> 00:33:54,080 Speaker 9: a half percent is more have to appreciate and throw 629 00:33:54,160 --> 00:33:57,920 Speaker 9: off a positive real return. But people who turn their 630 00:33:58,000 --> 00:34:02,480 Speaker 9: back on equities are blind to the fact that American 631 00:34:02,560 --> 00:34:06,560 Speaker 9: business can prosper in this type of interest rate climate 632 00:34:07,280 --> 00:34:10,200 Speaker 9: and grow at a very substantial rate. 633 00:34:11,239 --> 00:34:13,279 Speaker 2: Hey, George, thanks so much for joining us. Really a 634 00:34:13,360 --> 00:34:15,120 Speaker 2: treat to get a few minutes of your time. George 635 00:34:15,200 --> 00:34:18,560 Speaker 2: Ball he is a chairman of Sanders, Mars and Harris. 636 00:34:19,120 --> 00:34:20,839 Speaker 2: And if you want to find out about a couple 637 00:34:20,880 --> 00:34:23,840 Speaker 2: of really really high quality investment bank workers firms and 638 00:34:23,920 --> 00:34:27,040 Speaker 2: back in the day, go Google Base Company and EF 639 00:34:27,320 --> 00:34:29,759 Speaker 2: Hutt and some of two of the best names out there. 640 00:34:30,880 --> 00:34:33,960 Speaker 1: Thanks for listening to the Bloomberg Markets podcasts. You can 641 00:34:34,040 --> 00:34:37,760 Speaker 1: subscribe and listen to interviews at Apple Podcasts or whatever 642 00:34:37,880 --> 00:34:41,520 Speaker 1: podcast platform you prefer. I'm Matt Miller. I'm on Twitter 643 00:34:41,800 --> 00:34:45,040 Speaker 1: at Matt Miller nineteen seventy three, and I Fall Sweeney. 644 00:34:45,080 --> 00:34:47,680 Speaker 2: I'm on Twitter at pt Sweeney. Before the podcast, you 645 00:34:47,719 --> 00:34:50,279 Speaker 2: can always catch us worldwide at Bloomberg Radio Time