1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:21,240 Speaker 1: on Apple car Play or Android Auto with the Bloomberg 4 00:00:21,320 --> 00:00:24,880 Speaker 1: Business App. Listen on demand wherever you get your podcasts, 5 00:00:25,280 --> 00:00:27,040 Speaker 1: or watch us live on YouTube. 6 00:00:27,280 --> 00:00:31,319 Speaker 2: We're starting off strong way lead chief investment strategists at 7 00:00:31,600 --> 00:00:33,360 Speaker 2: some firm I think I've heard of at Blackrock, I 8 00:00:33,360 --> 00:00:36,000 Speaker 2: don't know something, or Blackrock, I think I did do something. 9 00:00:36,080 --> 00:00:37,960 Speaker 2: They manage some money there. We're going to chat with 10 00:00:37,960 --> 00:00:39,919 Speaker 2: her and get her thoughts on these markets. Mark Valentino, 11 00:00:39,960 --> 00:00:42,760 Speaker 2: head of Business Banking at Citizens Bank, on kind of 12 00:00:42,760 --> 00:00:45,320 Speaker 2: Black Friday sales and kind of how they're shaping up 13 00:00:45,320 --> 00:00:49,000 Speaker 2: and how the retail sales outlook is for the holiday season. 14 00:00:49,240 --> 00:00:53,120 Speaker 2: Alysta Russen, Chief Extecnive Officer l tech Ai on growing 15 00:00:53,120 --> 00:00:56,440 Speaker 2: stress in the opaque private credit market. 16 00:00:56,120 --> 00:00:57,680 Speaker 3: And we'll talk about that private credits to. 17 00:00:57,640 --> 00:00:59,960 Speaker 2: People are a little bit concerned about what's going on 18 00:01:00,200 --> 00:01:03,080 Speaker 2: on their Bloomerk Surveillance is brought to you by cone Restinc. 19 00:01:03,560 --> 00:01:06,240 Speaker 2: The new office in San Francisco. Cone Resnek is expanding 20 00:01:06,240 --> 00:01:10,280 Speaker 2: to help Bay Area businesses optimize performance and manager risks 21 00:01:10,280 --> 00:01:14,160 Speaker 2: put their industry expertise to work for you. Whaley joins 22 00:01:14,240 --> 00:01:18,160 Speaker 2: us here global chief investment Strategists at black Rock Walley. 23 00:01:18,240 --> 00:01:21,320 Speaker 3: Twenty twenty five, Boys, you just look at the numbers. 24 00:01:21,400 --> 00:01:24,800 Speaker 2: The top line numbers, smp F fifteen percent, the NASDAG 25 00:01:24,840 --> 00:01:28,360 Speaker 2: up twenty percent, fixed income give me high single digit 26 00:01:28,400 --> 00:01:32,280 Speaker 2: total returns. Pretty much a solid year for investors. How 27 00:01:32,280 --> 00:01:34,200 Speaker 2: about twenty twenty six. How are you guys kind of 28 00:01:34,200 --> 00:01:35,399 Speaker 2: framing twenty twenty six? 29 00:01:35,760 --> 00:01:39,120 Speaker 4: We have positive risk heading into twenty twenty six. Our 30 00:01:39,200 --> 00:01:43,199 Speaker 4: outlook is called pushing limits, and it's really about making 31 00:01:43,240 --> 00:01:46,800 Speaker 4: sense of large numbers being talked about and what do 32 00:01:46,840 --> 00:01:49,520 Speaker 4: we need to believe to justify this huge amount of 33 00:01:49,560 --> 00:01:50,240 Speaker 4: AI spent. 34 00:01:50,640 --> 00:01:52,280 Speaker 5: So currently, when we look at the. 35 00:01:52,200 --> 00:01:56,520 Speaker 4: Incremental revenue of these big tech companies heading into twenty 36 00:01:56,640 --> 00:01:59,960 Speaker 4: thirty end of this decade, they fall short of justified 37 00:02:00,200 --> 00:02:02,400 Speaker 4: this huge amount of capex. You know, we're talking about 38 00:02:02,520 --> 00:02:07,000 Speaker 4: credible estimates pointing to eight trillion dollars of spend by 39 00:02:07,080 --> 00:02:09,600 Speaker 4: twenty thirty. Those are huge numbers. So right now, the 40 00:02:09,680 --> 00:02:13,240 Speaker 4: forecast for short, but the potential of AI goes beyond 41 00:02:13,400 --> 00:02:17,360 Speaker 4: existing business lines. So if we have a situation where 42 00:02:17,440 --> 00:02:21,240 Speaker 4: growth breaks out from the historical two percent trend. Never 43 00:02:21,440 --> 00:02:24,680 Speaker 4: happened before for sustained period, but now possible. 44 00:02:24,240 --> 00:02:24,880 Speaker 6: Because of AI. 45 00:02:25,040 --> 00:02:27,560 Speaker 4: And also if we have a situation where tech companies 46 00:02:27,680 --> 00:02:33,160 Speaker 4: keep a good share of the additional revenues being created 47 00:02:33,280 --> 00:02:36,480 Speaker 4: as tech is applied to other sectors, then the numbers 48 00:02:36,560 --> 00:02:38,359 Speaker 4: can add up. But you've got to be leaving some 49 00:02:38,400 --> 00:02:43,320 Speaker 4: pretty incredible and unprecedented things to justify this unprecedented amount 50 00:02:43,400 --> 00:02:44,119 Speaker 4: of capex spent. 51 00:02:44,480 --> 00:02:47,440 Speaker 7: I'm looking at Bloomberg mag seven total return Index up 52 00:02:48,040 --> 00:02:50,520 Speaker 7: not twenty four percent so far this year? Are you 53 00:02:50,600 --> 00:02:54,639 Speaker 7: expecting the same caliber of returns to continue into next year? 54 00:02:54,680 --> 00:02:56,680 Speaker 7: You expect tech to be the leader as we look 55 00:02:56,720 --> 00:02:57,600 Speaker 7: into twenty twenty six. 56 00:02:57,919 --> 00:03:02,920 Speaker 4: I do expect concentration first before broader diffusion. When we 57 00:03:02,960 --> 00:03:07,040 Speaker 4: think about the AI trade, we're talking about an environment 58 00:03:07,880 --> 00:03:10,600 Speaker 4: where there is going to be more leverage, there is 59 00:03:10,680 --> 00:03:14,920 Speaker 4: going to be more scrutiny over the individual company fundamentals. 60 00:03:14,960 --> 00:03:18,200 Speaker 4: So if you think about the latest correction in tech 61 00:03:18,320 --> 00:03:22,480 Speaker 4: and more broadly in risk assets, actually you see greater differentiation. Right. 62 00:03:22,520 --> 00:03:23,960 Speaker 5: You see Alphabet doing. 63 00:03:23,800 --> 00:03:27,640 Speaker 4: Better because of the model Gemini three and TPU, and 64 00:03:27,720 --> 00:03:30,080 Speaker 4: you see Oracle doing a bit worse because of negative 65 00:03:30,080 --> 00:03:33,079 Speaker 4: free cash flow as well as greater indebtedness, so greater 66 00:03:33,200 --> 00:03:38,480 Speaker 4: differentiation concentration before broadening out. And I'm paying very close 67 00:03:38,520 --> 00:03:42,480 Speaker 4: attention to if there are new revenues being created on 68 00:03:42,600 --> 00:03:46,320 Speaker 4: top of existing business lines to really understand if the 69 00:03:46,400 --> 00:03:49,520 Speaker 4: wrong way of AI is as big as people are hoping. 70 00:03:49,240 --> 00:03:53,560 Speaker 2: For, if the AI expectations may be ahead of themselves 71 00:03:54,320 --> 00:03:57,120 Speaker 2: at this stage, are you pulling back from some of 72 00:03:57,160 --> 00:04:00,360 Speaker 2: those names here? Are you hedging some of that secure 73 00:04:00,400 --> 00:04:02,600 Speaker 2: at this point? Are you trying to diversify away from 74 00:04:02,600 --> 00:04:03,120 Speaker 2: that a little bit? 75 00:04:03,480 --> 00:04:06,120 Speaker 4: Well, that's the thing. There is no place to hide. 76 00:04:06,200 --> 00:04:10,400 Speaker 4: There is no proper diversification in this environment. So one 77 00:04:10,480 --> 00:04:13,760 Speaker 4: of the key themes in our outlook is diversification mirage. 78 00:04:13,960 --> 00:04:16,960 Speaker 4: We call it a mirage because the old diversifiers are 79 00:04:16,960 --> 00:04:20,599 Speaker 4: not reliably working and this last twenty four hours of 80 00:04:20,640 --> 00:04:23,560 Speaker 4: price action is case in point. So you know, we 81 00:04:23,600 --> 00:04:29,480 Speaker 4: look at a seemingly mixed diversified portfolio and we think 82 00:04:29,520 --> 00:04:32,080 Speaker 4: that it is a proper diversification, but that would be 83 00:04:32,160 --> 00:04:36,440 Speaker 4: highly misleading because the whole market is being driven by 84 00:04:36,640 --> 00:04:40,320 Speaker 4: just a handful of singular principal components and AI being one, 85 00:04:40,680 --> 00:04:44,560 Speaker 4: So we can't get away from making big calls active calls, 86 00:04:44,560 --> 00:04:48,719 Speaker 4: and where AI is heading towards and investment decisions made 87 00:04:48,760 --> 00:04:51,840 Speaker 4: in the guise of diversification may well end up being 88 00:04:51,960 --> 00:04:55,120 Speaker 4: huge active bets. So let's make those bets very intentional 89 00:04:55,160 --> 00:04:56,920 Speaker 4: ones rather than unintentional ones. 90 00:04:57,600 --> 00:05:00,719 Speaker 7: So when we think about AI and all the energy 91 00:05:00,760 --> 00:05:02,839 Speaker 7: that's needed for this, it's going to get a lot 92 00:05:03,040 --> 00:05:05,719 Speaker 7: of energy. How are you thinking about the energy sector? 93 00:05:06,080 --> 00:05:11,040 Speaker 4: That is a constraint that is binding already. So as 94 00:05:11,040 --> 00:05:16,320 Speaker 4: we think about the AI ambition running up against constraints, 95 00:05:16,360 --> 00:05:19,760 Speaker 4: which is why we frame the outlook on pushing limits. 96 00:05:19,920 --> 00:05:22,640 Speaker 4: There are three types of limits. One is energy and 97 00:05:22,680 --> 00:05:26,400 Speaker 4: the physical limit, and we're running up against those limits already. 98 00:05:26,680 --> 00:05:29,960 Speaker 4: One is financing limits, and right now we actually don't 99 00:05:30,000 --> 00:05:33,360 Speaker 4: see that being a constraint because even though leverage is 100 00:05:33,440 --> 00:05:36,400 Speaker 4: going higher and big Tech they have issued one hundred 101 00:05:36,640 --> 00:05:39,400 Speaker 4: million dollars of that just the last quarter, which is 102 00:05:39,480 --> 00:05:42,840 Speaker 4: higher than previous years, the starting point is very healthy, right, 103 00:05:42,839 --> 00:05:45,279 Speaker 4: so there is room to leverage up. There is a 104 00:05:45,279 --> 00:05:48,400 Speaker 4: feature is not a constraint at this moment. And then 105 00:05:48,440 --> 00:05:51,280 Speaker 4: there is the political constraint. We're talking about impact of 106 00:05:51,320 --> 00:05:53,640 Speaker 4: AI on jobs and what that means in terms of 107 00:05:53,839 --> 00:05:58,560 Speaker 4: the policy response regulatory response. So these are the constraints, 108 00:05:58,560 --> 00:06:01,880 Speaker 4: but right now the one that is buying is energy. 109 00:06:01,960 --> 00:06:05,440 Speaker 4: So when we talk about credible estimates taking copecks focus 110 00:06:06,440 --> 00:06:09,400 Speaker 4: up to AID trillion dollars by the end of the decade, 111 00:06:09,600 --> 00:06:12,679 Speaker 4: the consideration for energy may well bring that back. 112 00:06:14,080 --> 00:06:16,440 Speaker 2: So as we step back and think about twenty twenty six, 113 00:06:18,040 --> 00:06:20,240 Speaker 2: I guess geopolitics we have to think about that a 114 00:06:20,279 --> 00:06:23,360 Speaker 2: little bit. We still have an active situation in Ukraine. 115 00:06:23,680 --> 00:06:26,560 Speaker 2: The Mid East has been quiet for the last several months, 116 00:06:26,600 --> 00:06:29,880 Speaker 2: but still doesn't feel like that's settled by any stretched imagination. 117 00:06:30,000 --> 00:06:35,640 Speaker 2: Then we have ongoing tensions between the US and China, 118 00:06:35,800 --> 00:06:38,360 Speaker 2: but it seems like the markets kind of discounted all 119 00:06:38,400 --> 00:06:38,680 Speaker 2: of that. 120 00:06:39,040 --> 00:06:40,440 Speaker 3: I mean, is that something we need to worry about 121 00:06:40,440 --> 00:06:41,719 Speaker 3: for twenty twenty. 122 00:06:41,320 --> 00:06:43,200 Speaker 2: Six because it seems like a black swamt could come 123 00:06:43,200 --> 00:06:44,000 Speaker 2: out of anywhere. 124 00:06:44,279 --> 00:06:48,240 Speaker 4: Yeah, So we assess the impact of geopolitics on markets, 125 00:06:48,240 --> 00:06:53,039 Speaker 4: we need really firmly established a transmission mechanism, right So, so far, 126 00:06:53,400 --> 00:06:56,719 Speaker 4: a lot of the geopolitical flare ups have been good 127 00:06:56,760 --> 00:06:59,479 Speaker 4: opportunity for market or participants to buy the deep and 128 00:06:59,520 --> 00:07:01,479 Speaker 4: you look at how markets have down there has been 129 00:07:01,560 --> 00:07:05,960 Speaker 4: a good strategy. So if we see the impact of 130 00:07:06,440 --> 00:07:12,280 Speaker 4: a geopolitical event having a lasting effect on oil price, 131 00:07:12,440 --> 00:07:16,320 Speaker 4: for example, and then feeding through to inflation, inflational expectations, 132 00:07:16,360 --> 00:07:20,200 Speaker 4: not just the twelve month expectations, maybe even longer expectations, 133 00:07:20,240 --> 00:07:24,280 Speaker 4: and then there is a proper feedback loop. But if 134 00:07:24,280 --> 00:07:27,080 Speaker 4: we're talking about a very swift spike and then coming 135 00:07:27,120 --> 00:07:29,720 Speaker 4: back down, then that's not something at least from a 136 00:07:29,800 --> 00:07:33,080 Speaker 4: longer portfolio construction perspective, we bake that in. You look 137 00:07:33,080 --> 00:07:36,440 Speaker 4: at geopolitical risk, premium is very flat at the moment. 138 00:07:37,640 --> 00:07:39,960 Speaker 7: So when we think about geopolitics, what if you make 139 00:07:40,000 --> 00:07:42,800 Speaker 7: of potential opportunities when we think about energy or defense 140 00:07:42,840 --> 00:07:44,480 Speaker 7: for that matter. I mean we've been seeing a large 141 00:07:44,480 --> 00:07:46,680 Speaker 7: bid in European defense. 142 00:07:46,920 --> 00:07:47,600 Speaker 5: That's right. 143 00:07:47,720 --> 00:07:50,640 Speaker 4: So for Europe so far this year, we have approached 144 00:07:51,040 --> 00:07:54,640 Speaker 4: investing through a very selective way. We like industrials within 145 00:07:54,680 --> 00:07:58,080 Speaker 4: that defense, we like utility, and we also like financials 146 00:07:58,400 --> 00:08:01,960 Speaker 4: because of cheap valuations as well as its potential to 147 00:08:02,000 --> 00:08:04,000 Speaker 4: be disrupted by AI. 148 00:08:04,120 --> 00:08:05,360 Speaker 6: So defense as. 149 00:08:05,200 --> 00:08:09,840 Speaker 4: An evergreen theme, especially given the commitment of natal countries 150 00:08:09,880 --> 00:08:13,040 Speaker 4: to increase their defense spending that is structural. We think 151 00:08:13,040 --> 00:08:16,400 Speaker 4: that there is definitely a place for strategic kind of 152 00:08:16,480 --> 00:08:19,320 Speaker 4: allocation to this theme. But it has round out quite 153 00:08:19,320 --> 00:08:21,760 Speaker 4: a lot in terms of price so far this year. 154 00:08:21,840 --> 00:08:25,320 Speaker 4: So we're actually rotating within our European tactical US our 155 00:08:25,360 --> 00:08:29,720 Speaker 4: location from industrials defense into healthcare as a sector that 156 00:08:29,800 --> 00:08:35,200 Speaker 4: actually has great valuation opportunities as well as also open 157 00:08:35,280 --> 00:08:38,960 Speaker 4: and ripe for AI disruption. But strategically, yeah, definitely we 158 00:08:39,000 --> 00:08:42,880 Speaker 4: want to have exposure to that despite the geopolitical headgelines 159 00:08:43,200 --> 00:08:46,680 Speaker 4: or because of geopolitical hedgelines, because the strategic direction of 160 00:08:46,679 --> 00:08:47,720 Speaker 4: travel is very clear. 161 00:08:48,559 --> 00:08:50,959 Speaker 2: Really, I love the black Rock offices over in London 162 00:08:50,960 --> 00:08:54,320 Speaker 2: there they were right next to our old Bloomberg offices 163 00:08:54,400 --> 00:08:56,160 Speaker 2: and Finsbury Circus. 164 00:08:56,280 --> 00:08:58,079 Speaker 3: Now we're over Queen Victoria Street. 165 00:08:57,920 --> 00:09:00,600 Speaker 2: But not too far from your new The new office 166 00:09:00,600 --> 00:09:02,480 Speaker 2: a great part of town in the city of London. 167 00:09:03,320 --> 00:09:05,040 Speaker 2: Love it, love it, especially around this time of year. 168 00:09:05,080 --> 00:09:06,320 Speaker 3: The city of London is just awesome. 169 00:09:06,360 --> 00:09:09,480 Speaker 2: Way Lee, Global, Chief Investment Strategists for black Rock, thanks 170 00:09:09,520 --> 00:09:10,440 Speaker 2: so much for joining us. 171 00:09:10,440 --> 00:09:12,520 Speaker 3: We appreciate it to stay with us. More from Bloomberg 172 00:09:12,559 --> 00:09:14,240 Speaker 3: Surveillance coming up after this. 173 00:09:23,640 --> 00:09:27,240 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch US Live 174 00:09:27,320 --> 00:09:30,480 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 175 00:09:30,559 --> 00:09:34,240 Speaker 1: Applecarplay and Android Otto with the Bloomberg Business app, or 176 00:09:34,360 --> 00:09:35,959 Speaker 1: watch US Live on YouTube. 177 00:09:36,280 --> 00:09:37,679 Speaker 3: Meredith Whitney darkins a door here. 178 00:09:37,760 --> 00:09:40,840 Speaker 2: She is the chief executive officer of Meredith Whitney Advisory Group, 179 00:09:40,880 --> 00:09:44,280 Speaker 2: longtime voice on Global Wall Street. Meredith, we're kind of 180 00:09:44,320 --> 00:09:46,200 Speaker 2: right in the middle of the holiday shopping season. 181 00:09:46,679 --> 00:09:48,760 Speaker 3: How do you think the consumer's doing out there? 182 00:09:49,480 --> 00:09:53,280 Speaker 8: Well, it seems as if the retail results have been idiosyncratic. 183 00:09:53,360 --> 00:09:56,160 Speaker 8: But I can tell you what I've become very nervous 184 00:09:56,160 --> 00:09:58,760 Speaker 8: about is what has powered the US economy for the 185 00:09:58,800 --> 00:10:00,760 Speaker 8: last five years, which is is what I call the 186 00:10:00,800 --> 00:10:04,800 Speaker 8: avocado toast generation. So it's between twenty four and thirty eight, 187 00:10:04,880 --> 00:10:09,120 Speaker 8: so it's the older gen Z and the younger millennials, and. 188 00:10:09,920 --> 00:10:10,920 Speaker 3: They've really hit a wall. 189 00:10:10,960 --> 00:10:12,760 Speaker 8: They started hit a wall the summer, so they've been 190 00:10:12,840 --> 00:10:17,120 Speaker 8: powering spending, spending at Chipotle, Sweet Greens. I mean, the 191 00:10:17,160 --> 00:10:19,679 Speaker 8: idea of spending a twenty bucks for salad or a 192 00:10:20,400 --> 00:10:22,560 Speaker 8: brito bowl. You don't see me in line at a Chipotle, 193 00:10:22,920 --> 00:10:25,600 Speaker 8: but I'm not round bagging it, but at any rate. 194 00:10:26,240 --> 00:10:29,800 Speaker 8: So the restaurant started to talk about the fact that 195 00:10:30,480 --> 00:10:33,559 Speaker 8: this demographic was really struggling because of the resumption of 196 00:10:33,600 --> 00:10:37,319 Speaker 8: student debts, and we went further into that, and if 197 00:10:37,360 --> 00:10:40,440 Speaker 8: you look at what the avocado dost generation have, they's 198 00:10:40,520 --> 00:10:43,080 Speaker 8: actually have amassed a lot of debt over the last 199 00:10:43,120 --> 00:10:45,520 Speaker 8: five years. So they've got twenty eight percent of all 200 00:10:45,520 --> 00:10:49,559 Speaker 8: consumer debt. They've got about three hundred dollars less or 201 00:10:49,600 --> 00:10:52,720 Speaker 8: more into their spending. 202 00:10:52,800 --> 00:10:54,359 Speaker 3: So we think about. 203 00:10:54,120 --> 00:10:58,360 Speaker 8: COVID stimulus as being a massive stimulus impact on the consumer. 204 00:10:58,400 --> 00:11:01,720 Speaker 8: It was eight hundred and fourteen billion student debt four bearance, 205 00:11:02,120 --> 00:11:05,600 Speaker 8: four hundred billions, So COVID stimulus went out to one 206 00:11:05,679 --> 00:11:09,480 Speaker 8: hundred and sixty five million Americans. Debt four bearans went 207 00:11:09,480 --> 00:11:13,520 Speaker 8: out to fewer than forty million Americans with fifty percent 208 00:11:13,640 --> 00:11:18,959 Speaker 8: of the of the spending power. So this demographic had 209 00:11:19,160 --> 00:11:22,600 Speaker 8: a massive amounts of discretionary spending power and that's not 210 00:11:22,720 --> 00:11:26,080 Speaker 8: going to come into the economy. And so I think 211 00:11:26,200 --> 00:11:30,320 Speaker 8: you see names. I was surprised by urban outfitter being 212 00:11:30,360 --> 00:11:34,880 Speaker 8: so strong because that caters to a very avocado toasty 213 00:11:35,200 --> 00:11:37,720 Speaker 8: type demographic. But I think you're going to see more 214 00:11:37,720 --> 00:11:42,200 Speaker 8: and more pressure throughout this year and into next because 215 00:11:43,240 --> 00:11:45,400 Speaker 8: a they have got a tremendous amount of debt, they 216 00:11:45,400 --> 00:11:48,239 Speaker 8: have no equity, and they have no way out. And 217 00:11:48,520 --> 00:11:52,640 Speaker 8: what's going to happen is this. The Treasure Department has 218 00:11:52,679 --> 00:11:58,200 Speaker 8: this top program where it's going to garnish tax refunds, 219 00:11:57,679 --> 00:12:03,000 Speaker 8: and the Department of Education is aggressive on the twenty 220 00:12:03,040 --> 00:12:09,880 Speaker 8: percent serious delinquent and charged off loans. They're going to 221 00:12:09,920 --> 00:12:11,520 Speaker 8: start pulling this back and that's going to hurt them 222 00:12:11,559 --> 00:12:13,640 Speaker 8: a lot. And obviously we know the low end is 223 00:12:13,720 --> 00:12:16,240 Speaker 8: really uh is really strained. 224 00:12:16,800 --> 00:12:19,640 Speaker 7: So what's the elasticity of this consumer group which I 225 00:12:19,679 --> 00:12:21,200 Speaker 7: would call the Mata generation. 226 00:12:21,920 --> 00:12:25,920 Speaker 3: Oh, that's avocado toast generation. I think it works, or. 227 00:12:25,880 --> 00:12:30,439 Speaker 8: You call the fresh fresh coffee generation option, Yeah, it's true. 228 00:12:30,960 --> 00:12:35,600 Speaker 8: The elasticity is going to come down to I don't 229 00:12:35,640 --> 00:12:39,160 Speaker 8: think there's a lot of elasticity with this demographic that 230 00:12:39,240 --> 00:12:40,280 Speaker 8: has so much debt. 231 00:12:40,559 --> 00:12:42,000 Speaker 3: So the debt gets worse. 232 00:12:42,040 --> 00:12:44,960 Speaker 8: So the student debt is the one part of the 233 00:12:44,960 --> 00:12:50,440 Speaker 8: economy that has the highest delinquencies, the highest charge offs. 234 00:12:50,600 --> 00:12:53,600 Speaker 8: I think that's going to bleed into auto lending because 235 00:12:54,840 --> 00:12:58,120 Speaker 8: the avocadoast generation owns thirty five percent of the auto 236 00:12:58,120 --> 00:13:00,000 Speaker 8: debt outstanding, So that's going to make a crowded out 237 00:13:00,160 --> 00:13:03,280 Speaker 8: so you're going to see it factor in the elasticity 238 00:13:03,320 --> 00:13:06,320 Speaker 8: I think is really interesting in terms of one factor. 239 00:13:06,760 --> 00:13:09,040 Speaker 8: One trend that we've been tracking very closely has been 240 00:13:09,280 --> 00:13:12,559 Speaker 8: home equity loan extraction and that's been the fastest growing 241 00:13:13,080 --> 00:13:16,480 Speaker 8: loan category of any consumer loan category, and that started 242 00:13:16,520 --> 00:13:20,319 Speaker 8: in twenty twenty the sum in Earnest the summer of 243 00:13:20,360 --> 00:13:24,559 Speaker 8: twenty twenty four. And what's really interesting is historically that's 244 00:13:24,720 --> 00:13:27,640 Speaker 8: home equity loan extractions have been used for home renovations, 245 00:13:27,840 --> 00:13:31,839 Speaker 8: but now they're increasingly used for cash management. So since 246 00:13:31,960 --> 00:13:35,280 Speaker 8: twenty twenty two, there's been over a fifty percent rise 247 00:13:35,520 --> 00:13:39,920 Speaker 8: in home equity extractions use of cash management. Now that 248 00:13:40,120 --> 00:13:42,280 Speaker 8: is every week we look at this, I pull it 249 00:13:42,280 --> 00:13:46,439 Speaker 8: through Bloomberg and it continues to accelerate. Now it's only 250 00:13:46,480 --> 00:13:49,160 Speaker 8: available for the prime market, so if you have any 251 00:13:49,200 --> 00:13:53,960 Speaker 8: type of credit ding on your credit score, you can 252 00:13:54,120 --> 00:13:57,800 Speaker 8: access the equity in your home. But avocado toasters by 253 00:13:57,840 --> 00:14:00,760 Speaker 8: and large don't own homes, so they have no equ tap. 254 00:14:00,880 --> 00:14:04,160 Speaker 8: And if they do own homes, they've got high LTVs. Right, 255 00:14:04,200 --> 00:14:06,320 Speaker 8: because they have an owned homes that long, so they 256 00:14:06,360 --> 00:14:09,360 Speaker 8: don't have much equity to tap. So that feeds into 257 00:14:09,880 --> 00:14:13,360 Speaker 8: very little elasticity in this group. And then you think 258 00:14:13,400 --> 00:14:16,320 Speaker 8: about when you look at twenty twenty six and people 259 00:14:16,360 --> 00:14:19,440 Speaker 8: get excited about one beautiful bill tax refunds. 260 00:14:19,520 --> 00:14:20,360 Speaker 3: Well, if you own a. 261 00:14:20,280 --> 00:14:24,120 Speaker 8: Bunch of student debt, you're going to get tax refund garnishment. 262 00:14:24,320 --> 00:14:26,640 Speaker 8: So I don't see it's a great question. I don't 263 00:14:26,680 --> 00:14:29,840 Speaker 8: see a lot of elasticity within this group. Now that said, 264 00:14:29,840 --> 00:14:33,320 Speaker 8: there's still so much money swashing through the system, but 265 00:14:33,400 --> 00:14:34,600 Speaker 8: it's at the high end. 266 00:14:35,400 --> 00:14:38,080 Speaker 2: You know, this case shaped economy. Meredith, Is it something 267 00:14:38,080 --> 00:14:39,280 Speaker 2: that's always been out there? 268 00:14:39,400 --> 00:14:40,040 Speaker 3: Is it more. 269 00:14:39,840 --> 00:14:41,880 Speaker 2: Pronounced in the last ten or fifteen years? And it 270 00:14:41,960 --> 00:14:44,960 Speaker 2: wasn't the pacity you think, because it just seems like 271 00:14:45,000 --> 00:14:47,040 Speaker 2: it's really pronounced these days. 272 00:14:47,160 --> 00:14:50,880 Speaker 8: Yeah, there's without a doubt it's gotten so much more 273 00:14:50,920 --> 00:14:55,400 Speaker 8: pronounced in the last really since the Great Financial crisis. 274 00:14:55,480 --> 00:14:59,280 Speaker 8: And you know, it's said by probably the most esteem 275 00:14:59,280 --> 00:15:02,880 Speaker 8: person in this bill that you have you can have 276 00:15:03,720 --> 00:15:07,880 Speaker 8: you know wage, you know, you can have income disparities, 277 00:15:07,880 --> 00:15:12,160 Speaker 8: but when it reaches a breaking point, it's not good 278 00:15:12,200 --> 00:15:14,600 Speaker 8: for society and I think at this point it's reached 279 00:15:15,200 --> 00:15:20,120 Speaker 8: a breaking point. So the BA puts out numbers whereby 280 00:15:20,200 --> 00:15:23,160 Speaker 8: you see who controls what amount of spending over the 281 00:15:23,160 --> 00:15:25,920 Speaker 8: course of the years. And I've been going back to 282 00:15:28,400 --> 00:15:32,160 Speaker 8: early two thousands and you can see in terms of 283 00:15:32,200 --> 00:15:35,280 Speaker 8: spending how much the low end contributes, how much the 284 00:15:35,320 --> 00:15:38,320 Speaker 8: high end contributes, and that's just been diverging. So the 285 00:15:38,320 --> 00:15:41,760 Speaker 8: most recent number shows the bottom forty percent contributes only 286 00:15:41,800 --> 00:15:45,000 Speaker 8: twenty two percent of spending, whereas the top forty contributes 287 00:15:45,080 --> 00:15:46,080 Speaker 8: sixty two percent. 288 00:15:46,320 --> 00:15:47,880 Speaker 3: That was much more. 289 00:15:48,920 --> 00:15:51,960 Speaker 8: Uh, that wasn't equal, but it was much more even 290 00:15:52,800 --> 00:15:54,880 Speaker 8: let's say seventeen years ago. 291 00:15:55,640 --> 00:15:57,720 Speaker 7: So in terms of the lower end consumer, where is 292 00:15:57,760 --> 00:16:00,239 Speaker 7: the majority of their money going? I was hearing anecdotally 293 00:16:00,280 --> 00:16:03,440 Speaker 7: even during Black Friday sales, people were actually purchasing necessities. 294 00:16:03,600 --> 00:16:03,800 Speaker 3: Yeah. 295 00:16:03,920 --> 00:16:08,480 Speaker 8: Yeah, So I think so tomorrow and Thursday, the Dollar 296 00:16:08,480 --> 00:16:10,560 Speaker 8: stores report, and I think that'll be a really good 297 00:16:10,560 --> 00:16:14,560 Speaker 8: insight into the lower end. Now, Walmart is not the 298 00:16:14,800 --> 00:16:17,560 Speaker 8: lower end. Walmart is everybody in the shopping experience is 299 00:16:17,680 --> 00:16:21,200 Speaker 8: just so spectacular that more and more people go to Walmart. 300 00:16:21,280 --> 00:16:23,760 Speaker 8: But the dollar store it's not exactly the case. But 301 00:16:23,760 --> 00:16:25,920 Speaker 8: I always say people drive to Walmart and walk to 302 00:16:25,960 --> 00:16:29,920 Speaker 8: the dollar stores, and the dollar stores may benefit because 303 00:16:29,960 --> 00:16:32,400 Speaker 8: you've had consolidation at Party City, and some of the 304 00:16:32,440 --> 00:16:35,760 Speaker 8: things you may go and get, you know, wrapping paper 305 00:16:36,080 --> 00:16:41,920 Speaker 8: and birthday items. But on essentials, it's really catch as 306 00:16:42,000 --> 00:16:44,440 Speaker 8: catch can, and I think surely people are going to 307 00:16:44,440 --> 00:16:48,240 Speaker 8: be buying basic essentials. I think what's also interesting is 308 00:16:49,240 --> 00:16:52,880 Speaker 8: because chains like McDonald's have offered more value and really 309 00:16:52,880 --> 00:16:55,680 Speaker 8: captured the value meal, people are eating more out more 310 00:16:55,760 --> 00:16:59,000 Speaker 8: because it's cheaper to eat out than homes, and that 311 00:16:59,040 --> 00:16:59,720 Speaker 8: always shifts. 312 00:16:59,840 --> 00:17:00,400 Speaker 4: For a while. 313 00:17:00,440 --> 00:17:03,040 Speaker 8: When they were going away from the value value meals, 314 00:17:03,040 --> 00:17:06,280 Speaker 8: people were buying more essentials. It all depends, but I 315 00:17:06,280 --> 00:17:09,840 Speaker 8: think it's it is clear that over fifty two percent 316 00:17:09,880 --> 00:17:13,439 Speaker 8: of households, probably a lot over fifty two percent of 317 00:17:13,440 --> 00:17:16,200 Speaker 8: households are barely getting. 318 00:17:15,880 --> 00:17:18,240 Speaker 3: By Meredith, thank you so much for joining us. 319 00:17:18,280 --> 00:17:21,400 Speaker 2: Meredith Whitney, Chief executive Officer of Meredith Whitney Advisory Group 320 00:17:21,440 --> 00:17:24,280 Speaker 2: and Lawrenceville Class of eighty seven. 321 00:17:23,520 --> 00:17:25,080 Speaker 3: Eighty eight, first class of girls to. 322 00:17:25,119 --> 00:17:28,000 Speaker 2: Drive class girls to graduate from the Lawrenceville School for 323 00:17:28,040 --> 00:17:30,399 Speaker 2: like two hundred years as all boys. It was after 324 00:17:30,480 --> 00:17:33,439 Speaker 2: my time, unfortunately, but it was a great thing because 325 00:17:33,560 --> 00:17:35,239 Speaker 2: it was a one of the greatest things that ever 326 00:17:35,240 --> 00:17:38,080 Speaker 2: happened to lawrencevill schools having girls comes in because the 327 00:17:38,119 --> 00:17:40,640 Speaker 2: boys dress better, they sit up at their desk, They're 328 00:17:40,680 --> 00:17:42,000 Speaker 2: no more screwing around. 329 00:17:42,000 --> 00:17:44,399 Speaker 3: Because the girls came in, they were smarter than us. 330 00:17:44,600 --> 00:17:45,600 Speaker 3: Positive influence. 331 00:17:45,720 --> 00:17:48,199 Speaker 2: It was unbelievable. They lifted the school dramatic. It's the 332 00:17:48,200 --> 00:17:50,760 Speaker 2: best decision of schools ever made. And I have to 333 00:17:50,840 --> 00:17:53,800 Speaker 2: admit Lawrencell did it the right way. They invested in 334 00:17:53,840 --> 00:17:56,320 Speaker 2: the school before the girls got there, so when the 335 00:17:56,359 --> 00:17:58,080 Speaker 2: girls got there they felt like I think they felt 336 00:17:58,119 --> 00:18:00,360 Speaker 2: like they were part of the team there at. 337 00:18:00,280 --> 00:18:03,240 Speaker 8: The Carlisle Hotel. It was amazing and they were so welcoming. 338 00:18:03,320 --> 00:18:08,320 Speaker 8: It was just an incredible educational experience. And I loved 339 00:18:08,320 --> 00:18:10,679 Speaker 8: it because if someone had a problem with someone as 340 00:18:10,720 --> 00:18:11,440 Speaker 8: a pylon. 341 00:18:11,280 --> 00:18:13,280 Speaker 3: Yep, exactly right. Aaron Whitney, thank you so much. We 342 00:18:13,320 --> 00:18:16,000 Speaker 3: appreciate it. Stay with us. More from Bloomberg Surveillance coming 343 00:18:16,080 --> 00:18:17,000 Speaker 3: up after this. 344 00:18:26,400 --> 00:18:30,000 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 345 00:18:30,040 --> 00:18:33,199 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 346 00:18:33,280 --> 00:18:36,960 Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app or 347 00:18:37,119 --> 00:18:38,600 Speaker 1: watch us live on YouTube. 348 00:18:38,760 --> 00:18:42,080 Speaker 2: Cameron Dawson joins us here in studio. Cameron, we've had 349 00:18:42,080 --> 00:18:44,040 Speaker 2: a little bit of waffling in the market over the 350 00:18:44,119 --> 00:18:46,280 Speaker 2: last several weeks. Is that just a little bit of 351 00:18:47,280 --> 00:18:49,040 Speaker 2: I don't know, We've had such a great run coming 352 00:18:49,040 --> 00:18:51,680 Speaker 2: off the April lows that maybe we're just stepping back 353 00:18:51,720 --> 00:18:54,639 Speaker 2: and reassessing here, or we have something different going on 354 00:18:54,680 --> 00:18:54,919 Speaker 2: out there. 355 00:18:54,960 --> 00:18:57,520 Speaker 9: Do you think we would categorize this as a very 356 00:18:57,600 --> 00:19:01,439 Speaker 9: healthy digestion simply because we saw such a powerful rally, 357 00:19:01,480 --> 00:19:04,680 Speaker 9: mostly in September and October in some of the most 358 00:19:04,680 --> 00:19:08,280 Speaker 9: speculative portions of the market. So to see some rationality 359 00:19:08,320 --> 00:19:10,760 Speaker 9: come back in, we would see it as a good thing. 360 00:19:10,920 --> 00:19:12,320 Speaker 6: The reality is that you. 361 00:19:12,320 --> 00:19:17,480 Speaker 9: Are still rising GDP forecasts, you're still increasing EPs forecasts, 362 00:19:17,520 --> 00:19:19,840 Speaker 9: which would tell us that this kind of correction and 363 00:19:19,920 --> 00:19:23,080 Speaker 9: churn is more short and shallow, versus something that's deeper 364 00:19:23,160 --> 00:19:25,000 Speaker 9: and more protracted, which would come. 365 00:19:24,840 --> 00:19:27,760 Speaker 7: If you were cutting forecasts. So, of course we've just 366 00:19:27,880 --> 00:19:31,040 Speaker 7: entered December. I'm really stopping from saying ho ho ho. 367 00:19:31,280 --> 00:19:33,320 Speaker 7: But we always talked about the Santa Claus rally, right, 368 00:19:33,359 --> 00:19:35,600 Speaker 7: and this usually happens in the back half of December 369 00:19:35,760 --> 00:19:37,360 Speaker 7: when we see a rally into year end. 370 00:19:37,720 --> 00:19:39,040 Speaker 6: How are you thinking about that right now? 371 00:19:39,119 --> 00:19:40,880 Speaker 7: Of course it is December second and we are seeing 372 00:19:40,880 --> 00:19:42,400 Speaker 7: some shakiness, But what's your view. 373 00:19:42,560 --> 00:19:44,840 Speaker 9: Yeah, we've been thinking that if there was one thing 374 00:19:44,920 --> 00:19:47,159 Speaker 9: that could bring Santa Claus to town, it would be 375 00:19:47,200 --> 00:19:49,879 Speaker 9: positioning and the fact that if you look at things 376 00:19:49,920 --> 00:19:53,600 Speaker 9: like the Deutsche Bank Consolidated Positioning Index, it's still just 377 00:19:53,880 --> 00:19:57,679 Speaker 9: right below neutral and even discretionary investors are only in 378 00:19:57,720 --> 00:19:59,160 Speaker 9: the twenty six percentile. 379 00:19:59,280 --> 00:20:01,960 Speaker 3: So what's the consolidated positioning thing? What does that mean? 380 00:20:02,160 --> 00:20:04,560 Speaker 9: It's a Deutsche Bank index, and it's been very very 381 00:20:04,600 --> 00:20:09,040 Speaker 9: helpful in understanding when institutional investors are either all in 382 00:20:09,080 --> 00:20:11,280 Speaker 9: the market or very short. It's one of the things 383 00:20:11,320 --> 00:20:13,879 Speaker 9: that since the April lows, it actually got down to 384 00:20:13,920 --> 00:20:16,879 Speaker 9: the first percentile. So we've been making the argument since 385 00:20:16,920 --> 00:20:20,360 Speaker 9: that time that as long as investors were underweight this market, 386 00:20:20,480 --> 00:20:23,159 Speaker 9: that dips would be bought because people would need to 387 00:20:23,280 --> 00:20:26,480 Speaker 9: chase into into the strength. And so that is the 388 00:20:26,520 --> 00:20:29,240 Speaker 9: setup into your end, which is that the chase could 389 00:20:29,280 --> 00:20:32,439 Speaker 9: be on mostly because you also have the backdrop that 390 00:20:32,560 --> 00:20:35,399 Speaker 9: EPs forecasts are still going up, so you have a 391 00:20:35,440 --> 00:20:38,000 Speaker 9: fundamental reason for people to get longer this market. 392 00:20:38,760 --> 00:20:40,679 Speaker 7: What about as we talk about dip buying, how are 393 00:20:40,720 --> 00:20:42,960 Speaker 7: you thinking about retail traders right now in this environment? 394 00:20:43,160 --> 00:20:46,560 Speaker 9: That's an incredibly different story. Retail investors are all in. 395 00:20:46,600 --> 00:20:50,360 Speaker 9: If you look at the AAII allocation, it's at seventy 396 00:20:50,400 --> 00:20:51,360 Speaker 9: and a half percent. 397 00:20:51,760 --> 00:20:53,520 Speaker 6: That's the peak that we got to back in. 398 00:20:53,440 --> 00:20:58,360 Speaker 9: Twenty twenty one, twenty eighteen, twenty twenty four, all times 399 00:20:58,400 --> 00:21:01,879 Speaker 9: that were then followed by more market kind of weakness. 400 00:21:02,119 --> 00:21:04,639 Speaker 9: You've also seen a lot of growth in finram margin 401 00:21:04,720 --> 00:21:07,399 Speaker 9: loan balances. They were growing at a pace of thirty 402 00:21:07,480 --> 00:21:10,159 Speaker 9: five percent over the last six months. To put that 403 00:21:10,200 --> 00:21:13,640 Speaker 9: into context, going back to twenty twenty, we were only 404 00:21:13,640 --> 00:21:15,800 Speaker 9: growing at a pace of thirty percent. So you actually 405 00:21:15,800 --> 00:21:19,479 Speaker 9: have margin loans growing faster today than they did at 406 00:21:19,480 --> 00:21:22,400 Speaker 9: a time when rates were near zero. So what you've 407 00:21:22,480 --> 00:21:26,080 Speaker 9: seen is households move into a full risk on allocation, 408 00:21:26,240 --> 00:21:29,480 Speaker 9: whereas institutions have much more sat on the sidelines. 409 00:21:29,800 --> 00:21:33,000 Speaker 3: Do we like that? Do we like the retailers getting 410 00:21:33,000 --> 00:21:33,359 Speaker 3: in there? 411 00:21:33,600 --> 00:21:38,680 Speaker 9: So look, clearly we're seeing the perils of high leverage 412 00:21:38,720 --> 00:21:41,600 Speaker 9: and getting unwound, mostly in things like the cryptospace There 413 00:21:41,640 --> 00:21:44,359 Speaker 9: was a great article on the terminal this morning talking 414 00:21:44,400 --> 00:21:47,639 Speaker 9: about how some of these leveraged ETPs to things like 415 00:21:47,760 --> 00:21:52,640 Speaker 9: strategy are down eighty ninety percent, and so clearly there 416 00:21:52,640 --> 00:21:55,240 Speaker 9: are signs that there was a lot of froth and 417 00:21:55,280 --> 00:21:57,920 Speaker 9: a lot of speculation that was going on in certain 418 00:21:57,960 --> 00:22:01,800 Speaker 9: cohorts of retail traders. An article in the Journal yesterday 419 00:22:01,840 --> 00:22:06,640 Speaker 9: talking about how servicemen in the US are trading stocks 420 00:22:06,720 --> 00:22:10,159 Speaker 9: and so is this the same as the shoeshine person 421 00:22:10,280 --> 00:22:14,719 Speaker 9: telling you stock tips back in nineteen twenty nine. Not 422 00:22:14,840 --> 00:22:19,200 Speaker 9: so sure, But clearly there has been a speculative fervor 423 00:22:19,280 --> 00:22:20,720 Speaker 9: in certain pockets of the market. 424 00:22:20,920 --> 00:22:24,040 Speaker 7: So speculative burger definitely, and focus here, But how are 425 00:22:24,080 --> 00:22:27,800 Speaker 7: you thinking about defensive sectors? Say, maybe healthcare utilities? 426 00:22:28,080 --> 00:22:29,119 Speaker 6: Yeah, it's interesting. 427 00:22:29,359 --> 00:22:33,040 Speaker 9: There's a great function on the terminal called RRG, the 428 00:22:33,119 --> 00:22:36,040 Speaker 9: relative rotation graph, and what you can see is that 429 00:22:36,200 --> 00:22:38,800 Speaker 9: as you have seen a rotation out of things like 430 00:22:38,920 --> 00:22:42,919 Speaker 9: the mag seven, which is tech, telecom communication services, and 431 00:22:42,920 --> 00:22:48,480 Speaker 9: consumer discretionary, that has benefited utilities, it's benefited healthcare. Now 432 00:22:48,520 --> 00:22:51,320 Speaker 9: the big question is is healthcare is rally reflecting just 433 00:22:51,400 --> 00:22:54,840 Speaker 9: the fact that it was very underloved under owned and 434 00:22:55,000 --> 00:22:58,639 Speaker 9: very cheap, or is it actually reflecting a more defensive 435 00:22:58,680 --> 00:23:01,080 Speaker 9: bid within this market. I think it's more the former 436 00:23:01,280 --> 00:23:04,040 Speaker 9: than the latter. Not necessarily, this is a market where 437 00:23:04,040 --> 00:23:05,520 Speaker 9: everybody's looking for safety. 438 00:23:06,200 --> 00:23:09,400 Speaker 2: Keron, I still think earnings matter, and I think we've 439 00:23:09,400 --> 00:23:11,439 Speaker 2: had very good earnings this year, the second quarter, the 440 00:23:11,440 --> 00:23:13,320 Speaker 2: third quarter, really strong earnings. 441 00:23:13,320 --> 00:23:15,040 Speaker 3: Here are the earnings at a level that can support 442 00:23:15,080 --> 00:23:15,520 Speaker 3: this market? 443 00:23:15,520 --> 00:23:15,680 Speaker 4: Here? 444 00:23:15,680 --> 00:23:17,399 Speaker 9: Do you think? I thought it was really interesting a 445 00:23:17,400 --> 00:23:19,359 Speaker 9: couple days ago you had Max Kuttner on and he 446 00:23:19,480 --> 00:23:22,200 Speaker 9: was arguing that you've seen earnings in the third quarter 447 00:23:22,320 --> 00:23:24,919 Speaker 9: go up so much that now the fourth quarter is 448 00:23:25,480 --> 00:23:29,280 Speaker 9: implying a sequential decline, meaning that the fourth quarter earnings 449 00:23:29,359 --> 00:23:32,199 Speaker 9: estimates are likely too low, or at least are a 450 00:23:32,320 --> 00:23:33,240 Speaker 9: very low bar. 451 00:23:33,119 --> 00:23:33,879 Speaker 6: To jump over. 452 00:23:34,359 --> 00:23:36,960 Speaker 9: That implies to us that there's still room for four 453 00:23:37,080 --> 00:23:40,280 Speaker 9: Q earnings to be revised higher. That is usually a 454 00:23:40,280 --> 00:23:44,040 Speaker 9: good environment for risk taking. Maybe not on a day 455 00:23:44,080 --> 00:23:46,600 Speaker 9: to day basis, but usually that is supportive for things 456 00:23:46,640 --> 00:23:48,280 Speaker 9: like equities to continue to rally. 457 00:23:48,760 --> 00:23:51,240 Speaker 7: We've been hearing a lot from retailers as of late, 458 00:23:51,359 --> 00:23:53,080 Speaker 7: and it's been a bit of a mixed picture. But 459 00:23:53,119 --> 00:23:55,119 Speaker 7: I mean, we did have black Friday that it just passed, 460 00:23:55,119 --> 00:23:57,240 Speaker 7: and we saw a lot of strength in the consumer there. 461 00:23:57,480 --> 00:23:59,800 Speaker 7: How are you thinking about the retail space right now 462 00:24:00,040 --> 00:24:02,760 Speaker 7: terms of investment opportunities and just more broadly. 463 00:24:03,000 --> 00:24:06,399 Speaker 9: Yeah, that Black Friday growth certainly was encouraging, but it 464 00:24:06,440 --> 00:24:10,840 Speaker 9: came with a few important caveats. It is not inflation adjusted, 465 00:24:10,880 --> 00:24:13,919 Speaker 9: which means that you have seen big price increases for 466 00:24:14,040 --> 00:24:18,040 Speaker 9: certain goods, so it's not necessarily reflecting volumes, and in 467 00:24:18,080 --> 00:24:21,440 Speaker 9: certain areas, volumes were likely weaker because prices had gone 468 00:24:21,520 --> 00:24:24,040 Speaker 9: up so much. And also you had this big search 469 00:24:24,119 --> 00:24:26,439 Speaker 9: and buy now, pay later. And the big question is 470 00:24:26,720 --> 00:24:29,439 Speaker 9: how much are people reaching and adding to leverage in 471 00:24:29,560 --> 00:24:33,239 Speaker 9: order to be able to fund their spending. And what 472 00:24:33,280 --> 00:24:35,879 Speaker 9: we have seen is that there's still room and aggregate 473 00:24:35,920 --> 00:24:38,840 Speaker 9: for households to add to leverage. Maybe not in some 474 00:24:38,880 --> 00:24:40,760 Speaker 9: of the lower income side of things, but if you 475 00:24:40,760 --> 00:24:43,720 Speaker 9: look at broader household leverage ratios, they're nowhere near where 476 00:24:43,760 --> 00:24:46,040 Speaker 9: they were back prior to the Great Financial Crisis. 477 00:24:46,080 --> 00:24:47,639 Speaker 6: For example, I. 478 00:24:47,640 --> 00:24:49,760 Speaker 2: Can actually make some money in the fixed income market 479 00:24:49,840 --> 00:24:53,000 Speaker 2: in twenty twenty five. Here, I mean, I'm looking at 480 00:24:53,040 --> 00:24:55,719 Speaker 2: the GO function on the Bloomberg terminal. I'm seeing kind 481 00:24:55,760 --> 00:25:00,399 Speaker 2: of mid to very high single digitortal returns across the 482 00:25:00,440 --> 00:25:01,520 Speaker 2: fixed income space here? 483 00:25:01,520 --> 00:25:02,320 Speaker 3: How do you think about that? 484 00:25:02,480 --> 00:25:03,680 Speaker 6: Yeah, isn't it incredible? 485 00:25:03,680 --> 00:25:03,800 Speaker 4: Way? 486 00:25:03,800 --> 00:25:05,840 Speaker 9: I mean, we've had rallies and everything, and for a 487 00:25:05,880 --> 00:25:08,480 Speaker 9: while Muni's were sitting on the sidelines, but they had 488 00:25:08,480 --> 00:25:11,200 Speaker 9: a great November as some of those supply demand dynamics 489 00:25:11,480 --> 00:25:14,240 Speaker 9: became more favorable. I think the question as we go 490 00:25:14,440 --> 00:25:17,639 Speaker 9: into twenty twenty six is what's going to happen with 491 00:25:17,720 --> 00:25:20,480 Speaker 9: the treasury curve? Do we see upward pressure on longer 492 00:25:20,560 --> 00:25:24,159 Speaker 9: term bond yields because of what's going on with fiscal deficits, 493 00:25:24,200 --> 00:25:27,440 Speaker 9: because of what's going on with sticky inflation. We're now 494 00:25:27,480 --> 00:25:31,200 Speaker 9: at a tenure treasury that touched near four percent last week. 495 00:25:31,400 --> 00:25:34,040 Speaker 6: That seemed very low given the piece of inflation that 496 00:25:34,080 --> 00:25:34,359 Speaker 6: we have. 497 00:25:34,600 --> 00:25:36,960 Speaker 9: So I think it's a question of do we have 498 00:25:37,000 --> 00:25:39,399 Speaker 9: that same kind of total return potential as we get 499 00:25:39,440 --> 00:25:42,359 Speaker 9: into twenty twenty six, simply because the starting point is 500 00:25:42,440 --> 00:25:44,800 Speaker 9: much lower yields today, and. 501 00:25:44,800 --> 00:25:47,840 Speaker 7: As we've been talking about bonds, just the rate market 502 00:25:47,920 --> 00:25:50,080 Speaker 7: more generally. Of course, we do have the Federal Reserve 503 00:25:50,160 --> 00:25:53,520 Speaker 7: meeting this month. What are your expectations heading into that? 504 00:25:53,600 --> 00:25:53,919 Speaker 5: Meeting. 505 00:25:54,160 --> 00:25:56,080 Speaker 9: So we do think that they will cut, and that 506 00:25:56,160 --> 00:25:57,879 Speaker 9: is what the market is pricing and I think it 507 00:25:58,119 --> 00:26:00,119 Speaker 9: checked this morning in ninety five percent. 508 00:26:00,040 --> 00:26:02,960 Speaker 6: Probability that we're going to get to cuts. We are 509 00:26:03,040 --> 00:26:03,920 Speaker 6: going to get a cut. 510 00:26:03,960 --> 00:26:06,240 Speaker 9: We do not think that the FED, though, will give 511 00:26:06,280 --> 00:26:08,280 Speaker 9: guidance as to what they want to do in twenty 512 00:26:08,320 --> 00:26:11,240 Speaker 9: twenty six, meaning this FED will not It'll be a 513 00:26:11,280 --> 00:26:12,159 Speaker 9: meeting by meeting. 514 00:26:12,200 --> 00:26:14,200 Speaker 6: They will commit to a rate path. 515 00:26:14,640 --> 00:26:17,440 Speaker 9: But that may not matter as much if we get 516 00:26:17,480 --> 00:26:19,919 Speaker 9: the nomination for who's going to be FED shair, because 517 00:26:19,960 --> 00:26:23,160 Speaker 9: what that creates the potential for is that shadow FED 518 00:26:23,280 --> 00:26:27,240 Speaker 9: kind of commentary. If we get, for example, Kevin Hassett 519 00:26:27,240 --> 00:26:31,240 Speaker 9: coming in and saying being nominated as FED chair and saying, hey, 520 00:26:31,240 --> 00:26:33,879 Speaker 9: we're going to three percent, the market will price that 521 00:26:34,000 --> 00:26:37,359 Speaker 9: in with greater certainty. However, there is a big caveat 522 00:26:37,400 --> 00:26:38,080 Speaker 9: and catch there. 523 00:26:38,320 --> 00:26:39,040 Speaker 6: If you get. 524 00:26:38,840 --> 00:26:42,000 Speaker 9: Somebody like Hassett get nominated, The question is can he 525 00:26:42,280 --> 00:26:46,320 Speaker 9: rally the troops of the FED to vote in in 526 00:26:46,520 --> 00:26:49,359 Speaker 9: line with what he is pushing for. And that remains 527 00:26:49,400 --> 00:26:52,680 Speaker 9: a big question simply because he's an outsider and probably 528 00:26:52,720 --> 00:26:56,040 Speaker 9: has the perception of being the most politically captured candidate 529 00:26:56,240 --> 00:26:57,159 Speaker 9: that Trump could choose. 530 00:26:57,720 --> 00:27:00,359 Speaker 2: Camer Let me tell your clients, how do you talk 531 00:27:00,359 --> 00:27:03,600 Speaker 2: to them about alternative investments, whether it's private equity, private credit, 532 00:27:03,640 --> 00:27:04,200 Speaker 2: hedge funds. 533 00:27:04,280 --> 00:27:06,120 Speaker 3: Is that something that comes up a lot. 534 00:27:06,280 --> 00:27:08,959 Speaker 9: Oh, it's incredibly important, mostly because a lot of our 535 00:27:09,000 --> 00:27:12,879 Speaker 9: clients can tolerate illiquidity. But we think it's really important 536 00:27:12,880 --> 00:27:16,240 Speaker 9: to be highly selective within each of those asset classes. 537 00:27:16,480 --> 00:27:19,680 Speaker 9: So take private equity, for example. Instead of going into 538 00:27:19,720 --> 00:27:23,359 Speaker 9: things like high valued growth equity and large cat buyout, 539 00:27:23,400 --> 00:27:26,800 Speaker 9: we've been focusing on things like lower middle market secondaries 540 00:27:26,880 --> 00:27:29,760 Speaker 9: GP stakes, things that we've found to have are a 541 00:27:29,880 --> 00:27:33,600 Speaker 9: much more attractive return profile, less sensitive to the capital 542 00:27:33,600 --> 00:27:37,240 Speaker 9: market cycle. We've been focusing a lot on venture. Over 543 00:27:37,280 --> 00:27:39,879 Speaker 9: the course of the last year, we've been doing a 544 00:27:39,880 --> 00:27:43,760 Speaker 9: lot of work in infrastructure, as well as more uncorrelated assets, 545 00:27:43,800 --> 00:27:46,199 Speaker 9: so things that would FI fallow a little bit more 546 00:27:46,240 --> 00:27:49,800 Speaker 9: on the esoteric side of things, things like water rights 547 00:27:49,840 --> 00:27:53,440 Speaker 9: and litigation finance. The idea being is that we want 548 00:27:53,440 --> 00:27:55,920 Speaker 9: to make sure that our alternatives do provide a source 549 00:27:55,920 --> 00:27:59,040 Speaker 9: of diversification. So if your alternatives are relying on something 550 00:27:59,080 --> 00:28:02,159 Speaker 9: like the US consumer and consumer lending, which some of 551 00:28:02,160 --> 00:28:04,600 Speaker 9: the asset back finance does you're not really getting the 552 00:28:04,600 --> 00:28:06,160 Speaker 9: diversification you're going for. 553 00:28:06,720 --> 00:28:08,720 Speaker 7: Cameron, has been a really interesting year as we think 554 00:28:08,720 --> 00:28:11,159 Speaker 7: about currency, specifically the US dollar. I'm looking at the 555 00:28:11,160 --> 00:28:14,439 Speaker 7: Bloomberg Dollars BOT index down about almost seven percent on 556 00:28:14,560 --> 00:28:17,000 Speaker 7: pace to end the year. With that decline here, how 557 00:28:17,000 --> 00:28:19,639 Speaker 7: are you thinking about the US dollar? Is this the 558 00:28:19,680 --> 00:28:20,520 Speaker 7: place to be right now? 559 00:28:20,600 --> 00:28:20,959 Speaker 6: Yeah? 560 00:28:20,960 --> 00:28:23,280 Speaker 9: Well, the dollar fell primarily at the start of the 561 00:28:23,359 --> 00:28:26,280 Speaker 9: year and has now been flat for the last six months. 562 00:28:26,600 --> 00:28:28,960 Speaker 6: And what you saw was the dollar poke. 563 00:28:28,720 --> 00:28:30,960 Speaker 9: Its head up above the two hunder day moving outage 564 00:28:31,040 --> 00:28:33,760 Speaker 9: back last week and start to fade lower. The question 565 00:28:33,800 --> 00:28:36,160 Speaker 9: we have is that a false breakout. What we're looking 566 00:28:36,160 --> 00:28:39,719 Speaker 9: as international money market futures show dollar positioning, and what 567 00:28:39,760 --> 00:28:42,360 Speaker 9: you can see is that they were deeply, deeply negative, 568 00:28:42,400 --> 00:28:46,400 Speaker 9: deeply underweight at the beginning of the year, which coincided 569 00:28:46,440 --> 00:28:49,120 Speaker 9: with the low and the dollar. That underweight positioning has 570 00:28:49,160 --> 00:28:51,480 Speaker 9: now been closed, but there's still a lot of room 571 00:28:51,560 --> 00:28:54,880 Speaker 9: for investors to get more long the dollars. So if 572 00:28:54,920 --> 00:28:57,120 Speaker 9: you see a little bit more dollar strength, that could 573 00:28:57,200 --> 00:29:00,280 Speaker 9: cause more dollar length in positioning, which could then feet 574 00:29:00,280 --> 00:29:02,760 Speaker 9: on dollar strength and thus we get more of an upside, 575 00:29:02,880 --> 00:29:05,160 Speaker 9: but that still remains to be seen as the technicals 576 00:29:05,240 --> 00:29:06,920 Speaker 9: still raise a few eyebrows. 577 00:29:07,520 --> 00:29:10,160 Speaker 2: What's your twenty twenty sixth theme? Have you written something 578 00:29:10,240 --> 00:29:10,560 Speaker 2: like that? 579 00:29:10,840 --> 00:29:11,040 Speaker 1: Oh? 580 00:29:11,080 --> 00:29:11,320 Speaker 3: Man? 581 00:29:11,400 --> 00:29:13,760 Speaker 9: So we play the I like to go with the 582 00:29:13,800 --> 00:29:16,720 Speaker 9: price is right kind strategy, so that when we go last, 583 00:29:16,800 --> 00:29:18,320 Speaker 9: you know, if you want to win the price is right, 584 00:29:18,360 --> 00:29:19,760 Speaker 9: it's really best to go last. 585 00:29:20,080 --> 00:29:22,320 Speaker 6: So we always wait till the second week of. 586 00:29:22,360 --> 00:29:25,440 Speaker 9: January to publish our outlet because what we like to 587 00:29:25,520 --> 00:29:28,080 Speaker 9: know is what everybody else has said, and then we 588 00:29:28,120 --> 00:29:29,760 Speaker 9: can get a sense of where consensus is. 589 00:29:30,080 --> 00:29:31,760 Speaker 6: Call it cheating or call it wise. 590 00:29:32,120 --> 00:29:33,920 Speaker 2: So what do you I mean? It seems like, you know, 591 00:29:34,520 --> 00:29:36,720 Speaker 2: I'm not sure what's changed here. I feel like we've 592 00:29:36,720 --> 00:29:39,400 Speaker 2: got a decent earnings background. I feel like we've got 593 00:29:39,720 --> 00:29:43,640 Speaker 2: fedis cutting interest rates. I get my economy still growing. 594 00:29:44,360 --> 00:29:47,600 Speaker 2: It feels like twenty twenty six could be another decent 595 00:29:47,840 --> 00:29:50,080 Speaker 2: year if unless something crazy happens. 596 00:29:50,160 --> 00:29:52,040 Speaker 9: It also feels a little bit like back to the 597 00:29:52,080 --> 00:29:55,040 Speaker 9: future because the same questions are qualms that we could 598 00:29:55,120 --> 00:29:58,240 Speaker 9: have about this market and this economy are the same 599 00:29:58,280 --> 00:30:01,080 Speaker 9: today as we had this timeline last year. You could 600 00:30:01,120 --> 00:30:04,800 Speaker 9: look at high valuations. You could look at concentrated equity positioning. 601 00:30:05,080 --> 00:30:07,800 Speaker 9: You could look at the fact that peripheral labor market 602 00:30:07,920 --> 00:30:10,440 Speaker 9: data is weakening and does that turn into an even 603 00:30:10,520 --> 00:30:13,720 Speaker 9: weaker labor market. All observations that you could make this 604 00:30:13,840 --> 00:30:15,160 Speaker 9: time last year you. 605 00:30:15,080 --> 00:30:15,920 Speaker 6: Could make today. 606 00:30:15,960 --> 00:30:19,600 Speaker 9: Do they become more accurate in your concerns today after 607 00:30:19,640 --> 00:30:22,120 Speaker 9: the strong rally that we've had versus what they were 608 00:30:22,200 --> 00:30:22,680 Speaker 9: last year? 609 00:30:22,800 --> 00:30:23,880 Speaker 3: All Right, I don't know. 610 00:30:23,920 --> 00:30:27,040 Speaker 2: It seems like a pretty decent backdrop for me. Cameron Dawson, 611 00:30:27,520 --> 00:30:30,280 Speaker 2: We appreciate getting a few minutes of your time, Chief 612 00:30:30,280 --> 00:30:32,360 Speaker 2: Investment Officer at New edgewelth joining us here. 613 00:30:32,480 --> 00:30:35,560 Speaker 3: Stay with us. More from Bloomberg Surveillance coming up after this. 614 00:30:44,960 --> 00:30:48,560 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 615 00:30:48,640 --> 00:30:51,800 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 616 00:30:51,880 --> 00:30:55,520 Speaker 1: Applecarplay and Android Otto with the Bloomberg Business app, or 617 00:30:55,680 --> 00:30:57,200 Speaker 1: watch us live on YouTube. 618 00:30:57,360 --> 00:31:00,840 Speaker 2: Time for newspapers with Lise MITTEO Ah, you've been waiting 619 00:31:00,840 --> 00:31:01,080 Speaker 2: for it. 620 00:31:01,120 --> 00:31:01,400 Speaker 3: Okay. 621 00:31:01,440 --> 00:31:04,840 Speaker 5: Have you heard of slop bowl fatigue? 622 00:31:05,000 --> 00:31:07,520 Speaker 3: I have not. Now it's a thing. Now you have, 623 00:31:07,760 --> 00:31:08,600 Speaker 3: Now you will, Okay. 624 00:31:08,720 --> 00:31:10,280 Speaker 5: So it's when you go to like the fast food 625 00:31:10,320 --> 00:31:12,560 Speaker 5: fast casual and you stand in front of the counter 626 00:31:12,760 --> 00:31:14,600 Speaker 5: and you point out what you want and they have 627 00:31:14,680 --> 00:31:16,760 Speaker 5: a bowl of either rice or lettuce and they just 628 00:31:16,880 --> 00:31:20,280 Speaker 5: slop everything inside of it. Okay, so people are apparently 629 00:31:20,320 --> 00:31:24,480 Speaker 5: getting tired of it. Think like Chipotle, Cava, Sweet Green, 630 00:31:24,560 --> 00:31:28,160 Speaker 5: like they all slash their financial targets. So instead of instead, 631 00:31:28,160 --> 00:31:30,160 Speaker 5: what they're doing is they're choosing things with more texture, 632 00:31:30,240 --> 00:31:33,320 Speaker 5: things like sandwiches or tacos. You know, they can fill 633 00:31:33,360 --> 00:31:36,520 Speaker 5: you up, they cost a little bit less. And Bloomberg 634 00:31:36,560 --> 00:31:39,400 Speaker 5: spoke to Steve El's he's actually the founder of Chipotle. 635 00:31:39,760 --> 00:31:41,680 Speaker 5: He left the company in twenty twenty. He started this 636 00:31:41,760 --> 00:31:45,200 Speaker 5: new like counter company called counter Service. They have a 637 00:31:45,240 --> 00:31:47,640 Speaker 5: location in Manhattan. But he's saying, yes, they are a 638 00:31:47,760 --> 00:31:51,600 Speaker 5: bowl free zone. People want more handheld and that's apparently 639 00:31:51,640 --> 00:31:52,680 Speaker 5: the new trend. 640 00:31:52,760 --> 00:31:55,160 Speaker 7: So I mean it can be messy, I guess, but 641 00:31:55,800 --> 00:31:56,160 Speaker 7: I don't know. 642 00:31:56,200 --> 00:31:58,760 Speaker 5: I just always amaze, like how much they put on it. 643 00:31:59,200 --> 00:32:00,760 Speaker 3: Yeah, I said, I want to walk in. 644 00:32:00,840 --> 00:32:04,240 Speaker 2: It's like what I like, the first time I was 645 00:32:04,280 --> 00:32:06,120 Speaker 2: at Sweet Green, I had to be schooled by somebody 646 00:32:06,120 --> 00:32:07,920 Speaker 2: because I didn't know how to order, and you know, 647 00:32:07,920 --> 00:32:09,280 Speaker 2: I was the old guy holding. 648 00:32:09,040 --> 00:32:10,280 Speaker 3: Up the line. 649 00:32:10,800 --> 00:32:13,440 Speaker 2: So there was a young Bloomberg person behind me who 650 00:32:13,600 --> 00:32:16,760 Speaker 2: saved me. I think the person she's like, sir, this 651 00:32:16,800 --> 00:32:17,760 Speaker 2: is this is how you want to do it. 652 00:32:18,200 --> 00:32:20,080 Speaker 5: They're looking out for one another exactly. 653 00:32:20,440 --> 00:32:24,040 Speaker 3: But I'm just the deli guy. I'm old school here. Okay. 654 00:32:24,080 --> 00:32:26,280 Speaker 5: So you like the handheld sam which are the go 655 00:32:26,360 --> 00:32:27,360 Speaker 5: to It's easier to take home. 656 00:32:27,400 --> 00:32:29,040 Speaker 2: Don We live in a part of the world where 657 00:32:29,040 --> 00:32:32,320 Speaker 2: we have great delis, so you take advantage of it. 658 00:32:33,400 --> 00:32:34,360 Speaker 3: Desizza, that's it. 659 00:32:34,520 --> 00:32:35,320 Speaker 6: That's all you got. 660 00:32:36,000 --> 00:32:38,440 Speaker 5: Okay, So this one's interesting. Bosses are going to new 661 00:32:38,440 --> 00:32:40,720 Speaker 5: extremes to get their workers to use a I. 662 00:32:40,960 --> 00:32:41,240 Speaker 6: Okay. 663 00:32:41,280 --> 00:32:44,360 Speaker 5: So, for example, companies like IBM, they're paying cash, they're 664 00:32:44,400 --> 00:32:47,440 Speaker 5: awarding points that are resuemable for gift cards. They're giving 665 00:32:47,480 --> 00:32:51,880 Speaker 5: out merch invitations to like showcase their solutions at company 666 00:32:51,920 --> 00:32:53,680 Speaker 5: events to kind of put them on a stage and 667 00:32:53,920 --> 00:32:58,240 Speaker 5: present this because companies invested all this money into AI systems, 668 00:32:58,240 --> 00:33:01,120 Speaker 5: but their workers are kind of hesitant because some of 669 00:33:01,160 --> 00:33:03,400 Speaker 5: them saying, well, AI is going to make their job 670 00:33:03,440 --> 00:33:05,640 Speaker 5: disappear faster, so they don't really want to go, or 671 00:33:05,680 --> 00:33:08,160 Speaker 5: they don't have the time for the training or some 672 00:33:08,200 --> 00:33:10,080 Speaker 5: people are saying they don't want to share their AI 673 00:33:10,200 --> 00:33:12,800 Speaker 5: tactics because that gives them like a little competitive edge, 674 00:33:13,000 --> 00:33:14,560 Speaker 5: you know. So maybe I don't want to share it 675 00:33:14,560 --> 00:33:15,480 Speaker 5: because I want to. 676 00:33:16,200 --> 00:33:18,040 Speaker 2: Back in the day, when I'm starting on investment banking, 677 00:33:18,160 --> 00:33:20,040 Speaker 2: was I was a good modeler, so I could model 678 00:33:20,120 --> 00:33:22,440 Speaker 2: really well and know all the macros for the Excel 679 00:33:22,480 --> 00:33:24,720 Speaker 2: spreadsheets things. I felt like I had like an edge 680 00:33:24,760 --> 00:33:27,280 Speaker 2: there for two or three or four years, but then 681 00:33:27,320 --> 00:33:30,040 Speaker 2: that skill became less valuable as you get further in 682 00:33:30,120 --> 00:33:33,240 Speaker 2: your career. But I think AI, I mean, you have 683 00:33:33,320 --> 00:33:35,280 Speaker 2: to embrace it, don't you. If you're a young person 684 00:33:35,320 --> 00:33:36,160 Speaker 2: coming up, that's the. 685 00:33:36,160 --> 00:33:38,600 Speaker 5: Thing too, Like you, I feel like you do have 686 00:33:38,640 --> 00:33:39,440 Speaker 5: no option. 687 00:33:41,400 --> 00:33:41,920 Speaker 3: Exactly. 688 00:33:42,080 --> 00:33:44,800 Speaker 5: So yeah, it's just interesting because like they're giving bonuses 689 00:33:44,800 --> 00:33:47,719 Speaker 5: for people who do do it. Okay, there's a brownie 690 00:33:47,720 --> 00:33:48,640 Speaker 5: point exactly. 691 00:33:49,640 --> 00:33:50,000 Speaker 3: All right. 692 00:33:50,040 --> 00:33:52,160 Speaker 5: So this one stuck out to me because we all have, 693 00:33:52,280 --> 00:33:54,239 Speaker 5: you know, the smartphone, right, but this one is a 694 00:33:54,840 --> 00:33:58,600 Speaker 5: trifle phone. Okay, So this is from Samsung. It's their 695 00:33:58,640 --> 00:34:02,640 Speaker 5: first trifle smartphone, the Galaxy Z trifle so basically has 696 00:34:02,680 --> 00:34:05,360 Speaker 5: two hinges and it collapsed, you know, it opens up 697 00:34:05,360 --> 00:34:07,120 Speaker 5: to like a ten inch display, So it's like a 698 00:34:07,120 --> 00:34:09,760 Speaker 5: little mini tablet. Yeah, you got to look at the picture. 699 00:34:10,600 --> 00:34:11,800 Speaker 5: Four hundred and fifty dollars. 700 00:34:11,800 --> 00:34:14,200 Speaker 3: Okay. It starts in South. 701 00:34:14,040 --> 00:34:16,400 Speaker 5: Korea, that's where it's launching on December twelfth, and then 702 00:34:16,400 --> 00:34:20,400 Speaker 5: it'll kind of make its way to the US, China, Taiwan, Singapore. 703 00:34:20,239 --> 00:34:21,480 Speaker 3: United Arab Embrates. 704 00:34:21,600 --> 00:34:23,799 Speaker 5: So if you look, oh yeah, see if you're watching YouTube, 705 00:34:23,920 --> 00:34:24,600 Speaker 5: there you go. 706 00:34:24,760 --> 00:34:25,560 Speaker 3: That's what it looks like. 707 00:34:25,600 --> 00:34:25,640 Speaker 4: This. 708 00:34:25,760 --> 00:34:28,240 Speaker 3: It's kind of cool. I mean, big screen. 709 00:34:28,719 --> 00:34:31,040 Speaker 5: I'm just afraid it's going to break, right, it's like 710 00:34:31,040 --> 00:34:34,160 Speaker 5: a tablet at this point it becomes a mini tablet. 711 00:34:33,960 --> 00:34:36,879 Speaker 6: Right, Yeah, it's a stimulating I don't know, if. 712 00:34:36,760 --> 00:34:39,440 Speaker 3: You're watching shows or movies and stuff, that's. 713 00:34:39,360 --> 00:34:41,480 Speaker 5: Gaming exactly exactly. 714 00:34:41,600 --> 00:34:43,320 Speaker 3: That's it. It's not about the film anymore. 715 00:34:43,480 --> 00:34:46,839 Speaker 2: This seems basically a camera slash TV that you can 716 00:34:46,880 --> 00:34:47,560 Speaker 2: make a phone call on. 717 00:34:47,640 --> 00:34:49,040 Speaker 7: Did you fold it back up when you want to 718 00:34:49,080 --> 00:34:51,799 Speaker 7: put it to your ear for a yes, yes you do. 719 00:34:52,400 --> 00:34:55,280 Speaker 5: It folds back up to the regular size. But actually 720 00:34:55,320 --> 00:34:57,520 Speaker 5: Huawei actually came out with the first Trifle back in 721 00:34:57,560 --> 00:35:00,000 Speaker 5: like twenty twenty four, but it's the first first hand 722 00:35:00,000 --> 00:35:02,080 Speaker 5: I'm sung so kind of interesting. And I know people 723 00:35:02,080 --> 00:35:04,600 Speaker 5: are sounding off on the YouTube on the YouTube chat 724 00:35:04,880 --> 00:35:07,040 Speaker 5: and they're saying, yeah, they're afraid that it's going to break, 725 00:35:07,200 --> 00:35:09,600 Speaker 5: so yeah, shoot, all. 726 00:35:09,600 --> 00:35:10,279 Speaker 3: Right, not for the kids. 727 00:35:10,280 --> 00:35:13,960 Speaker 2: All right, newspapers, thank you very much for We appreciate that 728 00:35:14,040 --> 00:35:14,879 Speaker 2: the trifold phone. 729 00:35:14,920 --> 00:35:16,960 Speaker 3: I'm happy with my iPhones. 730 00:35:17,400 --> 00:35:22,239 Speaker 1: This is the Bloomberg Surveillance Podcast, available on Apple, Spotify, 731 00:35:22,360 --> 00:35:24,600 Speaker 1: and anywhere else you get your podcasts. 732 00:35:25,120 --> 00:35:26,400 Speaker 6: Listen live each. 733 00:35:26,160 --> 00:35:30,000 Speaker 1: Weekday, seven to ten am Eastern on Bloomberg dot com, 734 00:35:30,160 --> 00:35:33,960 Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app. 735 00:35:34,239 --> 00:35:37,360 Speaker 1: You can also watch us live every weekday on YouTube 736 00:35:37,680 --> 00:35:39,680 Speaker 1: and always on the Bloomberg terminal