WEBVTT - Oversight Lapses Before SVB Failure

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<v Speaker 1>This is Bloomberg Daybreak Asia, but is Thursday March thirtieth

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<v Speaker 1>in Hong Kong, Wednesday March twenty ninth in New York

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<v Speaker 1>and coming up to date. US equities rise as risk

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<v Speaker 1>appetite returns following turmoil in the banking sector. The FDIC

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<v Speaker 1>e mills forcing big banks to help cover the almost

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<v Speaker 1>twenty three billion dollars in cost from the recent bank failures,

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<v Speaker 1>and China reportedly stations anti graft personnel abroad in a

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<v Speaker 1>new push to recover stolen assets. China has warned Taiwan

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<v Speaker 1>and the US about any diplomatic meetings for President Si

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<v Speaker 1>in the US, the US is urging China not to overreact.

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<v Speaker 1>President Zelenski invites President she to visit Ukraine. I'm at

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<v Speaker 1>Baxter with Global News. That's all straight ahead on Bloomberg

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<v Speaker 1>Daybreak Asia, the business news you need to start your

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<v Speaker 1>day in just one fifteen minute podcast available on Apple, Spotify,

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<v Speaker 1>the Bloomberg Business app and everywhere you get your podcast.

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<v Speaker 1>Good morning, I'm do Prisoner and I'm Brian Curtis. Here

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<v Speaker 1>are the stories we're following today. The FED Vice chaff

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<v Speaker 1>of Supervision Michael Barr, said that supervisors could have done

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<v Speaker 1>more to keep tabs on Silicon Valley Bank before it

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<v Speaker 1>collapsed this past month. A bar is leading an internal

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<v Speaker 1>review of the agency's oversight of SVB. It testified today

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<v Speaker 1>before a House panel. Anytime you have a bank failure

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<v Speaker 1>like this, bank management clearly failed, supervisors failed, and our

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<v Speaker 1>regulatory system failed. We're going to look as part of

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<v Speaker 1>our review at not only our supervisory issues, but also

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<v Speaker 1>at the regulatory structure that the Federals are put in

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<v Speaker 1>place in twenty nineteen and see whether the size thresholds

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<v Speaker 1>we use, the standards we decided to put in place.

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<v Speaker 1>All of that is on the table. The FED, the FDIC,

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<v Speaker 1>and Treasury officials testified at the hearing. They also appeared

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<v Speaker 1>open to the prospect of raising the current two hundred

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<v Speaker 1>and fifty thousand dollars cap on deposits, but they said

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<v Speaker 1>that Congressional action would be needed. Treasury Undersecretary Nellie Leang

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<v Speaker 1>said that she'd support proposals for reform, citing arise in

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<v Speaker 1>uninsured deposits over recent years. While speaking of the FDIC,

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<v Speaker 1>the agency is now facing nearly twenty three billion dollars

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<v Speaker 1>in cost from those recent bank failures, and we are

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<v Speaker 1>told the FDIC is now considering steering a larger than

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<v Speaker 1>usual portion of that sum to the nation's largest banks.

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<v Speaker 1>More from Bloomberg's Charlie Pellet, The agency has set it

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<v Speaker 1>plans to propose a so called special assessment on the

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<v Speaker 1>industry in May to shore up a one hundred twenty

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<v Speaker 1>eight billion dollars deposit insurance fund that is set to

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<v Speaker 1>take hits after the recent collapses of Silicon Valley Bank

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<v Speaker 1>and Signature Bank. The regulator, under political pressure to spare

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<v Speaker 1>small banks, has noted that it has latitude and how

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<v Speaker 1>it sets those fees. Sources say behind the scenes, officials

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<v Speaker 1>are looking to limit the strain on community lenders, shifting

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<v Speaker 1>an outsized portion of the expense toward much larger institutions

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<v Speaker 1>in New York. Charlie Pellet Bloomberg Daybreak Asia. We could

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<v Speaker 1>be heading toward a big issue in global currency markets.

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<v Speaker 1>Bloomberg's Denise Pellegrini is tracking those developments. Bank of America

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<v Speaker 1>says we could be headed toward a liquidity crunch in

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<v Speaker 1>currency trading. Ba A warns this could happen later this

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<v Speaker 1>year as financial conditions tighten and economic growth slows. This

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<v Speaker 1>one's banking crisis, as we've been reporting, has triggered some

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<v Speaker 1>unusual volatility and major currency pairs like dollar yen. B

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<v Speaker 1>of A strategists say while those wounds were far from crisis,

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<v Speaker 1>levels of volatility could ramp up again. They say the

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<v Speaker 1>effect of bank credit tightening is still playing out, the

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<v Speaker 1>economic cycle is likely entering a contractionary phase, and if

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<v Speaker 1>inflation proves to be overly sticky, they say spot liquidity

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<v Speaker 1>in currency pairs will likely be tested again. Denise Pellegrini

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<v Speaker 1>Bloomberg day Break Asia. Well, we know of the changes

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<v Speaker 1>there have been over at ubs and credit suite, and

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<v Speaker 1>now the chair of us COM Kelleher, is saying he

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<v Speaker 1>is keen to keep the most talented investment bankers at

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<v Speaker 1>the newly acquired Credit Suite, but he said they should

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<v Speaker 1>expect to be screened for their fit with the bank's

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<v Speaker 1>values and their approach to risk. There are clearly parts

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<v Speaker 1>of credit suites that have had a bad culture, right.

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<v Speaker 1>I think primarily that was focused in the investment bank,

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<v Speaker 1>and by definition there will be some spill over into

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<v Speaker 1>some of the control functions. But I think if I

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<v Speaker 1>look at the Swiss retail bank, if I look at

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<v Speaker 1>wealth management. If I look at other parts of business,

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<v Speaker 1>I think they're probably really quite clean. But we need

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<v Speaker 1>to then look and see what can we bring in,

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<v Speaker 1>what can we merge, what makes sense. And we also

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<v Speaker 1>had very big news today at UBS. The bank is

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<v Speaker 1>bringing back Sergio or Monte to replace a replace rather

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<v Speaker 1>curren Ceo Ralph Hammers. That will happen as of April fifth,

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<v Speaker 1>and we are hearing that Swiss regulators encourage the move

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<v Speaker 1>to ensure a smooth takeover of Credit Suez by UBS.

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<v Speaker 1>China is said to be deploying anti corruption officials abroad

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<v Speaker 1>to bring back fugitives in stolen assets. Let's get the

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<v Speaker 1>story from Bloomberg's Yvonne Man. These officials are being stationed

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<v Speaker 1>in some Chinese embassies around the world. The Wall Street

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<v Speaker 1>Journal reports the officials will coordinate with foreign authorities on

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<v Speaker 1>law enforcement matters. The move is a latest step in

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<v Speaker 1>Beijing's campaign of tackling corruption. It's unclear which countries will

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<v Speaker 1>be involved, but it's thought to include many G twenty nations.

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<v Speaker 1>The journal wrote that the new plan does risk raising

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<v Speaker 1>alarms and host countries, especially those in the West. In

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<v Speaker 1>Hong Kong, I'm Ivan Man Bloomberg Daybreak Asia. I'm Bryan

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<v Speaker 1>Curtis along with Doug Krisner. Roshat Salama will join us

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<v Speaker 1>in a few moments. So the banking turmoil story continues

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<v Speaker 1>to run here. Doug, it doesn't seem to be causing

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<v Speaker 1>strategists to make changes in their forecasts, and the story

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<v Speaker 1>that we're running on the terminal, which is pretty interesting

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<v Speaker 1>about whether or not this is just the dough caught

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<v Speaker 1>in the headlights, or whether or not they're just finding

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<v Speaker 1>it difficult to formulate some sort of new thesis, whether

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<v Speaker 1>it's more of a micro than a macro story, and

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<v Speaker 1>exactly trying to figure out what has happened to effect change.

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<v Speaker 1>I think that that view is in the market and

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<v Speaker 1>also the view I think Preamiserra was able to articulate

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<v Speaker 1>this pretty well, that the market may be underestimating the

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<v Speaker 1>degree to which the Fed is going to have to

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<v Speaker 1>cut rates. I thought that was kind of curious. And

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<v Speaker 1>if you look at what was going on in markets

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<v Speaker 1>today in the bond market, very little movement. A two

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<v Speaker 1>year that has been recently trading almost like a memestock.

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<v Speaker 1>We've talked about that, Brian. Today we were only up

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<v Speaker 1>about two basis points in New York trading. Even with

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<v Speaker 1>the level of risk appetite in the equity market, I

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<v Speaker 1>would have expected a little bit more movement among treasuries. Yes, absolutely,

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<v Speaker 1>and you know that carries through to the stock markets.

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<v Speaker 1>So I think both markets are having a difficult time

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<v Speaker 1>here and figuring out what comes next. If you look

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<v Speaker 1>at the SMP five hundred year to date, it's up

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<v Speaker 1>a little under five. Person said, it's not a huge move. Yes,

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<v Speaker 1>we've seen tech outperform, but overall the market has not

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<v Speaker 1>made an enormous move and it's frustrating both bulls and

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<v Speaker 1>bears in both markets. They would expect probably to see

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<v Speaker 1>more momentum. Well, we do have coming up Catherine Rooney

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<v Speaker 1>Vera someone that we can talk to about some of

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<v Speaker 1>these trends, chief investment strategists at Bulltick Capital Markets. But

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<v Speaker 1>now it's time for global news. China has warned Taiwan

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<v Speaker 1>and the United States that any meeting while President Tying

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<v Speaker 1>one is in the United States if it involves her,

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<v Speaker 1>would be a serious provocation. At Baxter has Global News

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<v Speaker 1>from the nine sixty News from in San Francisco. Yeah,

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<v Speaker 1>that's right, Brian Presidents high left Taipei yesterday bound for

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<v Speaker 1>New York on a plane guarded by F sixteen fighters

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<v Speaker 1>as it headed over the Pacific. So in New York

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<v Speaker 1>today and the plan has been for her to meet

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<v Speaker 1>with Kevin McCarthy House Speaker while in Los Angeles. After

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<v Speaker 1>McCarthy Cancil plans to go to Taiwan himself. She'll later

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<v Speaker 1>meet with too Ol Lies in Central America. China says

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<v Speaker 1>it opposes the visit and will definitely take measures to respond.

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<v Speaker 1>The US is urging China not to overreact. National Security

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<v Speaker 1>Council spokesman John Kirby says this is just a transit.

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<v Speaker 1>Transits are not visits. They are private, and they're unofficial.

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<v Speaker 1>I would also remind everyone that this is this is

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<v Speaker 1>not new and Kirby says she's traveled through the US

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<v Speaker 1>six times since twenty sixteen and has met with members

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<v Speaker 1>of Congress without any incident. US Defense Secretary Lloyd Austin

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<v Speaker 1>has told a House hearing today that he does not

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<v Speaker 1>feel a China attack on Taiwan is imminent or inevitable.

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<v Speaker 1>He's adding that having said that the US and Taiwan

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<v Speaker 1>need to maintain a combat ready, credible force. While visiting

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<v Speaker 1>the front lines in bach Mud to a Ukrainian President,

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<v Speaker 1>Voladimir Zelenski says he wants to meet with China's president,

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<v Speaker 1>she Jumpeg. I want to speak with him because I

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<v Speaker 1>have had contact with him before full scale war. He

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<v Speaker 1>invites him to visit Ukraine. Banking crisis regulators congressional hearings

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<v Speaker 1>today in the US, moving to the House of Representatives.

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<v Speaker 1>Bloomberg Government reporter Emily Wilkins says a regulator seemed to

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<v Speaker 1>be a well, a bit more reflective today. It was

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<v Speaker 1>really focused today on whether the FDIC could have done

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<v Speaker 1>more that weekend right after Silicon Valley Bank collapsed. Could

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<v Speaker 1>they have found a private buyer. Could they have found

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<v Speaker 1>something in the private sector that would have kind of

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<v Speaker 1>kept the bank going to some degree? I think there

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<v Speaker 1>are some concerns how long that wound up taking. Meanwhile,

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<v Speaker 1>I think for a lot of Republicans there are some

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<v Speaker 1>questions about what needs to happen with the FDIC, and

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<v Speaker 1>Bloomberg's Rick Davis on Bloomberg Sound on Radio says these

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<v Speaker 1>hearings seem to be bipartisan and that they may feel

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<v Speaker 1>it's time to catch up to the times we've seen

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<v Speaker 1>this in crypto, We've seen this in other derivatives. We've

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<v Speaker 1>seen this now in the banking system. We have a

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<v Speaker 1>federal government that is still in the twentieth century while

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<v Speaker 1>they're regulating businesses that are pushing the envelope in the

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<v Speaker 1>twenty first. So we'll see where it goes from here.

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<v Speaker 1>US is urgent in the European Union and other allies

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<v Speaker 1>to sanction a Chinese satellite company for allegedly supporting Russia's

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<v Speaker 1>military operations, actually sending images of Ukrainian troops to the

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<v Speaker 1>Wagner Group. To be able to attack global news powered

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<v Speaker 1>by more than twenty seven hundred journalist and listen over

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<v Speaker 1>one hundred and twenty countries in San Francisco, I'm Ad Baxter,

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<v Speaker 1>and this is Bloomberg. This is Bloomberg Gaybreak Asia. I'm

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<v Speaker 1>Brian Curtis along with Rishad Salamat, and our guest is

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<v Speaker 1>Katherine Rooney vera chief investment strategist Boltic Capital Markets. So

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<v Speaker 1>you're a strategist. You've probably heard us musing over how

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<v Speaker 1>strategists haven't changed their targets much. The banking termol story.

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<v Speaker 1>Is it a big impact story or a low impact story?

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<v Speaker 1>You can get all kinds of opinions from many different strategists.

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<v Speaker 1>They really can go from this is a non issue

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<v Speaker 1>to this is, you know, going to induce the next

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<v Speaker 1>large crisis and recession. You can hear people saying the

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<v Speaker 1>feed is going to cut or the feed is going

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<v Speaker 1>to have to continue to hike as a result. So

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<v Speaker 1>what I would say is that we don't know yet,

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<v Speaker 1>and my perspective is that the FETE has to continue

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<v Speaker 1>to focus on inflation. I do think Brian that more

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<v Speaker 1>likely than not, the lending standard, the tightening of lending

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<v Speaker 1>standards that we should expect to continue to happen from

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<v Speaker 1>this fallout, will aid the FED in its goal to

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<v Speaker 1>get inflation lower and perhaps take twenty five to fifty

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<v Speaker 1>basis points off the table that they may otherwise have increased.

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<v Speaker 1>So what do they do? I mean, surely it's a

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<v Speaker 1>bit of a wake up call because no matter what

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<v Speaker 1>your opinion is on what happened to the banks, there

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<v Speaker 1>are strange caused by the cost of borrowing going up

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<v Speaker 1>in an inverted yield could which has made life very difficult,

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<v Speaker 1>and you don't want it to continue shortly. Yeah, that's right,

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<v Speaker 1>and I am not with the strategists that are recommending

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<v Speaker 1>both banks and broad terms and tech as sectors to play.

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<v Speaker 1>Right now, there are some by the dip type of

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<v Speaker 1>investors that are making a nice profit off of some

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<v Speaker 1>of these some of these volatile moves and these rapid

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<v Speaker 1>swings in the market. But I still believe that this

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<v Speaker 1>is going to induce and actually probably bring forward the

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<v Speaker 1>recession that I think is the next phase and the

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<v Speaker 1>inevitable phase of this economic cycle. So what I'm recommending

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<v Speaker 1>to our clients, both institutional and retail, is to maintain

0:12:37.200 --> 0:12:41.840
<v Speaker 1>cautious positions with regard to equities, remain overweight fixed income,

0:12:41.920 --> 0:12:46.120
<v Speaker 1>gold and cash. And if you are dedicated equity investor,

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<v Speaker 1>I'm in the camp of remaining in staples, energy state

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<v Speaker 1>and specifically utilities. So we have all these we have

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<v Speaker 1>all these is on tightening up conditions in the financial markets,

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<v Speaker 1>not only the new interest rate hikes that the Fed's doing,

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<v Speaker 1>but the cumulative weight of the long and variable lag

0:13:11.120 --> 0:13:13.800
<v Speaker 1>of the rates already done. You've got QT that's sort

0:13:13.840 --> 0:13:16.960
<v Speaker 1>of running in the background, and then, as you mentioned

0:13:17.480 --> 0:13:21.040
<v Speaker 1>a moment ago, tighter lending conditions. But I understand that

0:13:21.080 --> 0:13:23.160
<v Speaker 1>the bulls say that don't worry too much about the

0:13:23.200 --> 0:13:26.360
<v Speaker 1>tighter lending conditions because there's still a lot of cash

0:13:26.440 --> 0:13:29.120
<v Speaker 1>left over from the stimulus. We know what the bears

0:13:29.120 --> 0:13:31.240
<v Speaker 1>are saying, it's the cumulative weight, but the bulls have

0:13:31.679 --> 0:13:35.280
<v Speaker 1>an answer to it. Yes and no. I mean that's

0:13:35.280 --> 0:13:42.400
<v Speaker 1>evaporating quickly. You can see consumers are releveraging. I think

0:13:42.400 --> 0:13:44.600
<v Speaker 1>it's I'm I guess more in the bear camp. I

0:13:44.640 --> 0:13:47.840
<v Speaker 1>think that that's not the environment that we should be

0:13:47.880 --> 0:13:51.000
<v Speaker 1>in at this point. There's massive dislocations in the economy

0:13:51.080 --> 0:13:53.560
<v Speaker 1>and in the markets at this juncture that have to

0:13:53.640 --> 0:13:58.040
<v Speaker 1>become unwound. The labor market is still remarkably strong, even

0:13:58.080 --> 0:14:01.560
<v Speaker 1>though even though we are seeing some some some signs

0:14:01.640 --> 0:14:06.680
<v Speaker 1>of a deceleration therein um inflation is still a major issue.

0:14:06.720 --> 0:14:09.880
<v Speaker 1>You have sticky inflation that's trending higher, service sector inflation

0:14:09.880 --> 0:14:17.319
<v Speaker 1>that's remarkably remarkably high. So sorry, that was just Risch

0:14:17.400 --> 0:14:19.760
<v Speaker 1>and I talking as you were finishing your line, So

0:14:19.960 --> 0:14:22.440
<v Speaker 1>sorry about that. Rich has got a question for do

0:14:22.520 --> 0:14:25.080
<v Speaker 1>you think that a recession, with the noise of their

0:14:25.160 --> 0:14:29.360
<v Speaker 1>being possibly a recession getting louder and louder in your opinion,

0:14:29.440 --> 0:14:33.200
<v Speaker 1>will there be one? Yeah, that's a good question when

0:14:33.200 --> 0:14:36.320
<v Speaker 1>everyone when everyone says it probably doesn't happen because consensus

0:14:36.360 --> 0:14:38.680
<v Speaker 1>is generally generally wrong. I tend to be a contrarian,

0:14:38.720 --> 0:14:41.360
<v Speaker 1>so I wouldn't I wouldn't go against that thesis. But

0:14:41.440 --> 0:14:43.920
<v Speaker 1>I do think that, you know, we have to consider

0:14:44.040 --> 0:14:46.840
<v Speaker 1>that um that this time is really not different they

0:14:47.040 --> 0:14:50.480
<v Speaker 1>usually isn't. You know. We economic cycles have their ups

0:14:50.520 --> 0:14:53.760
<v Speaker 1>and downs, but they are by nature cyclical. We are

0:14:53.800 --> 0:14:57.480
<v Speaker 1>in stagflation, which by definition is below trend growth, below

0:14:57.520 --> 0:15:01.280
<v Speaker 1>potential trend growth, with sticky high inflation. That's what we're

0:15:01.320 --> 0:15:03.760
<v Speaker 1>in right now. And if I'm right, and I think,

0:15:04.160 --> 0:15:07.360
<v Speaker 1>I think that that the leading indicators are indicative of this,

0:15:07.920 --> 0:15:11.320
<v Speaker 1>and the labor market does in fact roll over, you're

0:15:11.360 --> 0:15:14.240
<v Speaker 1>going to see a drop in consumption in an economy

0:15:14.240 --> 0:15:17.600
<v Speaker 1>that's two thirds based on consumption. The next phase of

0:15:17.640 --> 0:15:20.600
<v Speaker 1>the economic cycle is not going to be you know,

0:15:20.640 --> 0:15:22.560
<v Speaker 1>we haven't seen the trough here. It's not going to

0:15:22.600 --> 0:15:26.520
<v Speaker 1>be expansion or re acceleration, or this no landing scenario

0:15:26.600 --> 0:15:29.000
<v Speaker 1>that some people are postulating a few weeks ago, which

0:15:29.160 --> 0:15:32.040
<v Speaker 1>I always thought was silly, or this immaculate disinflation, which

0:15:32.040 --> 0:15:35.160
<v Speaker 1>at some point became you know, the zeitgeist. So so

0:15:35.240 --> 0:15:37.960
<v Speaker 1>I think that yes, we're instaculation, we're moving to recession.

0:15:38.040 --> 0:15:40.080
<v Speaker 1>The question is timing. Does happen at the end of

0:15:40.080 --> 0:15:42.240
<v Speaker 1>this year at the beginning of next year. I think

0:15:42.240 --> 0:15:43.760
<v Speaker 1>it starts at the end of this year. I think

0:15:43.760 --> 0:15:46.240
<v Speaker 1>it goes into twenty twenty four. The FETE doesn't cut

0:15:46.280 --> 0:15:48.520
<v Speaker 1>this year, I think they cut next year. The fet

0:15:48.560 --> 0:15:51.760
<v Speaker 1>has finally gotten serious with regard to inflation fighting because

0:15:51.760 --> 0:15:53.760
<v Speaker 1>it realized that it has taken a hit in its

0:15:53.800 --> 0:15:59.120
<v Speaker 1>credibility and it's going to claw that back. That's my view,

0:15:59.120 --> 0:16:00.840
<v Speaker 1>and I don't I'm not the guys that think that

0:16:00.920 --> 0:16:02.360
<v Speaker 1>the FED is going to be cutting this year with

0:16:02.360 --> 0:16:05.960
<v Speaker 1>inflation above the target. Yeah, but Katherine too. Actually, what

0:16:06.320 --> 0:16:08.560
<v Speaker 1>I think Brian was alluding to in his question, and

0:16:08.600 --> 0:16:12.520
<v Speaker 1>that is that with credit conditions where they are right now,

0:16:13.160 --> 0:16:15.440
<v Speaker 1>liquidity where it is, you know, trying to get a

0:16:15.440 --> 0:16:17.560
<v Speaker 1>loan is going to be much harder. Collateral is going

0:16:17.600 --> 0:16:19.760
<v Speaker 1>to be more, collaster is going to be needed, spreads

0:16:19.760 --> 0:16:22.280
<v Speaker 1>are going to be higher. Rejection rates also will be

0:16:22.280 --> 0:16:24.280
<v Speaker 1>going to the upside as well, and that's going to

0:16:24.360 --> 0:16:27.880
<v Speaker 1>have a big, big impact in terms of investment and

0:16:27.920 --> 0:16:31.360
<v Speaker 1>the like and the whole velocity of money and the

0:16:31.400 --> 0:16:35.320
<v Speaker 1>economy itself. So surely that's why we possibly are heading

0:16:35.400 --> 0:16:39.400
<v Speaker 1>more towards a recessionary camp than we weren't before. Yeah,

0:16:39.440 --> 0:16:42.120
<v Speaker 1>those who perhaps didn't think that we were going to

0:16:42.160 --> 0:16:44.320
<v Speaker 1>move into recession or that was the next phase of

0:16:44.320 --> 0:16:47.680
<v Speaker 1>the economic cycle probably have joined our camp, which says

0:16:47.720 --> 0:16:51.560
<v Speaker 1>that recession is an inevitable part of an economic cycle,

0:16:51.600 --> 0:16:53.560
<v Speaker 1>and that's what we're moving to. So yes, I would

0:16:53.560 --> 0:16:56.520
<v Speaker 1>agree that it's increasingly consensus. I would say that the

0:16:56.560 --> 0:16:59.640
<v Speaker 1>majority of economists now believe that we are we are

0:16:59.680 --> 0:17:02.240
<v Speaker 1>moving into recession, if not already in one. And I

0:17:02.280 --> 0:17:05.000
<v Speaker 1>think that this banking crisis, if we're calling it that,

0:17:05.119 --> 0:17:08.880
<v Speaker 1>I think that's debatable as well, has accelerated the timeline

0:17:09.200 --> 0:17:12.040
<v Speaker 1>with respect to that contraction and aggregate demand. But we

0:17:12.080 --> 0:17:14.760
<v Speaker 1>should expect it to come. And I'll finish with one point,

0:17:14.800 --> 0:17:17.200
<v Speaker 1>which is that that's not the fetes job, nor is

0:17:17.240 --> 0:17:21.879
<v Speaker 1>it the federal government's job to deter that natural phenomenon

0:17:21.960 --> 0:17:24.320
<v Speaker 1>from happening. It's not their job. The FETE has a

0:17:24.400 --> 0:17:28.120
<v Speaker 1>dual mandate. It's you know, price stability and full employment.

0:17:28.200 --> 0:17:30.560
<v Speaker 1>So it's not to extend the economic cycle. It's not

0:17:30.640 --> 0:17:33.480
<v Speaker 1>to bring back a bull market. It is to get

0:17:33.480 --> 0:17:35.960
<v Speaker 1>inflation back to the target, which they might change at

0:17:35.960 --> 0:17:37.800
<v Speaker 1>some point. But it's way too early to be talking

0:17:37.800 --> 0:17:42.119
<v Speaker 1>about a change in the target with inflation more than double. Okay,

0:17:43.000 --> 0:17:45.640
<v Speaker 1>you've mentioned recessions coming and that you've got a defensive

0:17:45.680 --> 0:17:50.280
<v Speaker 1>posture like healthcare and staples and yes and utilities and such. Well,

0:17:50.280 --> 0:17:54.400
<v Speaker 1>what about something like gold? Does that fit into the picture? Yeah,

0:17:54.480 --> 0:17:56.080
<v Speaker 1>of course I'm gonna have gold if you if you

0:17:56.200 --> 0:17:58.480
<v Speaker 1>kind of get my drift. I like gold, I like cash,

0:17:58.480 --> 0:18:01.359
<v Speaker 1>I like cash equivalents. I mean you had at the

0:18:01.359 --> 0:18:03.520
<v Speaker 1>beginning of this year, I was talking about commercial paper

0:18:03.560 --> 0:18:07.040
<v Speaker 1>at four point seven percent, tea bills three months, six months,

0:18:07.400 --> 0:18:09.719
<v Speaker 1>nine months, you could get out of five five percent

0:18:09.800 --> 0:18:13.760
<v Speaker 1>handle that I mean, is there cash instruments, money markets?

0:18:13.800 --> 0:18:15.800
<v Speaker 1>So this is where I had a lot of our

0:18:15.840 --> 0:18:19.639
<v Speaker 1>clients position in cash, cash equivalents, in gold. I think

0:18:19.680 --> 0:18:22.880
<v Speaker 1>it makes sense, and I think if we're dedicated in equities,

0:18:22.880 --> 0:18:25.240
<v Speaker 1>we have to be in the defensive sectors, not in

0:18:25.280 --> 0:18:27.639
<v Speaker 1>the high fires. The rotation at the beginning of the

0:18:27.720 --> 0:18:31.159
<v Speaker 1>year I think was premature. All Right, Catherine, Yeah, you're

0:18:31.200 --> 0:18:35.159
<v Speaker 1>pretty nervous, pretty careful I'd say in pretty bearish. Katherine

0:18:35.240 --> 0:18:39.560
<v Speaker 1>Rooney Vero with US chief investment strategist at Baltic Capital Markets.

0:18:40.640 --> 0:18:43.480
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