WEBVTT - Single Best Idea with Tom Keene: Jeff deGraaf & Brian Belski

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Single best idea, and I tell you it's really something

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<v Speaker 2>out there, folks. It's been twenty four to seven for

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<v Speaker 2>everyone at Bloomberg News. I think it's been written up nicely.

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<v Speaker 2>Our read O Gagory, I know, is out with an

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<v Speaker 2>interview in Semaphore about the absolute exhaustion of doing this

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<v Speaker 2>truly twenty four to seven. Let me describe the day,

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<v Speaker 2>and not my day, because nobody really cares what I'm doing,

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<v Speaker 2>but the staff here in the trenches, someone like Emily

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<v Speaker 2>Graffeo who joined us today from the equity team. It's

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<v Speaker 2>not like eight hours, Oh there's a crisis, Let's extend

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<v Speaker 2>out two or three hours. It's always there and the

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<v Speaker 2>constraint in the modern day is I'm not going to

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<v Speaker 2>look at my cell phone for twenty minutes. It's literally

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<v Speaker 2>what it's become. And it starts early in the morning.

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<v Speaker 2>We get through the day and there's a window somewhere

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<v Speaker 2>in the vicinity of four point thirty. We're from four

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<v Speaker 2>thirty to six twenty five. I'm making it up. There's

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<v Speaker 2>a gap where the markets don't matter, and then it

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<v Speaker 2>picks up right again at seven pm, as Tokyo opens,

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<v Speaker 2>and we see what the dollar will do, We see

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<v Speaker 2>what gold will do with the moonshot up thirty five

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<v Speaker 2>hundred today, and also, quite frankly, the different dynamics, very

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<v Speaker 2>sophisticated dynamics out there. John Ferroll sent me a chart

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<v Speaker 2>today of euro Chinese were in Minby. I looked at

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<v Speaker 2>it in ages and there it was. It's a hockey

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<v Speaker 2>stick chart of strong euro and we are in ninby something.

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<v Speaker 2>You know, the instabilities that you see over particularly with

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<v Speaker 2>European trade, much a larger world trade than what we

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<v Speaker 2>have in the United States on a percentage basis. We

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<v Speaker 2>did look at the equity markets Brian Belski in a moment,

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<v Speaker 2>but first Jeffrey de Graph of Renaissance Macro jeff de

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<v Speaker 2>Graph on this bear market.

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<v Speaker 3>Our bear market is not about being down twenty percent.

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<v Speaker 3>It's not some magical number. It really is about the

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<v Speaker 3>combination of the increase in volatility, the decrease in returns

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<v Speaker 3>and what that's happening on a trend basis, and those

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<v Speaker 3>are all sloping downwards now. So in our book, that

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<v Speaker 3>is the definition of a bear market, and that really

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<v Speaker 3>kicked in about a month ago. So it's not. This

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<v Speaker 3>is not a new phenomenon. This has been something that's

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<v Speaker 3>in play, and I do think that that's important as

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<v Speaker 3>we think about it from a longer term perspective, the

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<v Speaker 3>question is is has sentiment outdone itself in the very

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<v Speaker 3>near term to get a really nice rally, And that's

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<v Speaker 3>where we are. We think we can rally back to

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<v Speaker 3>at least fifty five hundred, probably close to fifty seven hundred,

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<v Speaker 3>and then the question will be how did we get there.

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<v Speaker 3>Did we get there with momentum? Did we get there

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<v Speaker 3>with a change in the attitude? If we didn't, then

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<v Speaker 3>that's a rally to sell for those.

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<v Speaker 2>Of you in the market. That's a brilliantly clear discussion

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<v Speaker 2>and that is the foundation of Jeff to graph with

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<v Speaker 2>the economics of Neil Dutta, his fundamental analysis and also

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<v Speaker 2>his important technical analysis as well. One of the things

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<v Speaker 2>that's important is to identify a trend or a point

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<v Speaker 2>of debate. The word is distinction that I use the

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<v Speaker 2>distinction between guest A and guest B. And right now,

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<v Speaker 2>absolutely the primary distinction within what we do in economics, finance, investment,

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<v Speaker 2>and international relations is are we in a sea change

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<v Speaker 2>shift in the this is from Thomas Kuhn. I'm going

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<v Speaker 2>to guess nineteen forty eight at Harvard a paradigmatic shift

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<v Speaker 2>or is it going to be Okay? This was harsh,

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<v Speaker 2>It's going to get fixed and we get back to

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<v Speaker 2>some kind of normal. It is a raging debate. I'm

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<v Speaker 2>trying to keep myself out of the debate. It's not

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<v Speaker 2>my job to have an opinion on it. I'm not

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<v Speaker 2>going to give you opinion now. But I know a

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<v Speaker 2>lot of you are laughing at me here because you

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<v Speaker 2>can hear the opinion through the show. What a joy

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<v Speaker 2>to speak to Brian Belski today, a BMO capital market

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<v Speaker 2>who doesn't know how to spell paradigm.

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<v Speaker 1>Many of my compatriots, colleagues and competitors are not staying

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<v Speaker 1>in their lane. They've become now amateur psychologists that are

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<v Speaker 1>diagnosing personality disorders, where they should actually be focusing more

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<v Speaker 1>on what's happening in the economy in terms of the earnings.

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<v Speaker 1>Here's what we here's what we know. We don't know

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<v Speaker 1>exactly how long this is going to last. We've already

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<v Speaker 1>positioned we meaning consensus, that this is going to take

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<v Speaker 1>years and years and years and years to unfold. So

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<v Speaker 1>I believe that the majority of portfolios strategists economists are

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<v Speaker 1>already positioned for the worst case scenario. What we believe

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<v Speaker 1>in our standing in terms of the investment Strategy group

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<v Speaker 1>at BEMO, is this could all be over in a

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<v Speaker 1>matter of days. We're not trying to be Pollyanna or flippant.

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<v Speaker 1>We believe in the inherent strength of the US economy,

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<v Speaker 1>the US stock market, and we still believe that we

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<v Speaker 1>have the best assets in the world, and we're going

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<v Speaker 1>to take negativity to add to those assets.

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<v Speaker 2>Brian Belski, BEMO Capital Markets. I should also suggest us

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<v Speaker 2>that he thinks the Minnesota Vikings are destined for the

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<v Speaker 2>Super Bowl this year. An extraordinary time we're living in,

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<v Speaker 2>of course, our team down at the meetings of the

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<v Speaker 2>IMF and the World Bank, as well as a good

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<v Speaker 2>team being put together for the remembrances of the Pope

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<v Speaker 2>this week in Rome, Italy. We're across the nation. Look

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<v Speaker 2>for us on YouTube, subscribe to Bloomberg podcasts and on

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<v Speaker 2>YouTube podcasts. It's single best idea