WEBVTT - What's Keeping CEOs Up At Night: Conference Board Survey 0:00:01.400 --> 0:00:04.120 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney. Along 0:00:04.120 --> 0:00:06.200 with my co host of Bonnie Quinn. Every business day 0:00:06.240 --> 0:00:10.360 we bring you interviews from CEO, market pros, and Bloomberg experts, 0:00:10.400 --> 0:00:13.600 along with essential market moving news. Find the Bloomberg Markets 0:00:13.600 --> 0:00:17.000 Podcast on Apple podcast or wherever you listen to podcasts, 0:00:17.000 --> 0:00:20.880 and on Bloomberg dot com. A very interesting survey out 0:00:21.000 --> 0:00:25.960 from the Conference Board CEOs worldwide asked about their biggest worries. 0:00:26.000 --> 0:00:29.400 For one, I'd say it made for some some very 0:00:29.480 --> 0:00:32.400 nice light reading right before bedtime. Well he had to 0:00:32.440 --> 0:00:35.680 read us. Adaman Zildroom's Director of Economics and Global Research 0:00:35.800 --> 0:00:38.800 Chair at the Conference Board, Adoman tell us about the 0:00:38.880 --> 0:00:43.199 nightmares that we're in this survey. Good morning, thanks for 0:00:43.280 --> 0:00:46.560 having me on the program. Uh, yes, I'm not sure 0:00:46.600 --> 0:00:49.279 it's quite you know, nighttime reading, because you know, we 0:00:49.280 --> 0:00:52.640 were asking about what keeps ceo is up at night. UM. 0:00:52.960 --> 0:00:57.240 And you know globally, you know what's the top of 0:00:57.280 --> 0:01:00.880 the list is really the COVID nineteen pandem make and 0:01:01.720 --> 0:01:07.560 the vaccines availability and distribution. Um. And that's much more 0:01:07.560 --> 0:01:12.199 important than other business concerns and business challenges. UM. They're 0:01:12.280 --> 0:01:16.440 also really looking at recession risk among the top three 0:01:17.480 --> 0:01:22.280 as a worry about the coming year. So that suggests 0:01:22.280 --> 0:01:25.319 that CEOs don't think that the economy is out of 0:01:25.319 --> 0:01:29.480 the woods yet. All right, Ottoman, how about the new administration, 0:01:29.520 --> 0:01:33.360 the Biden administration that obviously manifests the whole change in 0:01:33.920 --> 0:01:36.200 away A lot of these corporations will be operating over 0:01:36.200 --> 0:01:40.600 the next four years. How did they frame that out? So? Um, 0:01:40.640 --> 0:01:44.720 you know, we feel that the survey after the elections 0:01:44.760 --> 0:01:47.280 in November just to make sure that we could kind 0:01:47.319 --> 0:01:50.080 of get the policy of what business leaders are thinking 0:01:50.120 --> 0:01:55.680 about it. Especially in the US, CEOs are worried about 0:01:56.280 --> 0:02:00.480 the outlook for taxes and regulation uh, and much less 0:02:00.560 --> 0:02:06.040 about global trade diversions or disruptions, and and also less 0:02:06.040 --> 0:02:10.119 about geopolitics. UM. So I think they'll be looking at 0:02:10.240 --> 0:02:13.280 the business environment and how it might be affected by 0:02:14.320 --> 0:02:18.160 changes in corporate taxes in the outlook for regulations. But 0:02:18.240 --> 0:02:24.800 I think generally, UM, clarity uh and UH, consistency and 0:02:24.919 --> 0:02:27.800 more certainty about the environment is going to be welcome. 0:02:28.639 --> 0:02:30.760 And Adaman, just give us an idea of who these 0:02:30.840 --> 0:02:33.800 nine CEOs are. Obviously you don't have to mention companies, 0:02:33.840 --> 0:02:35.799 but are we talking about the the d s and 0:02:35.840 --> 0:02:39.359 P five hundred. Is there a good selection from across 0:02:39.520 --> 0:02:44.600 the market cap ranges? Yeah, it is a global survey, uh, 0:02:44.639 --> 0:02:47.799 and there is a mix of a large cap and 0:02:48.160 --> 0:02:52.400 uh smaller companies. Uh. There really is kind of a 0:02:52.400 --> 0:02:57.440 wide range. But you know, a lot of the Fortune 0:02:57.440 --> 0:03:00.400 five hundred are going to be represented. And just to 0:03:00.440 --> 0:03:02.800 follow on that, then, you know, did the smaller companies 0:03:03.040 --> 0:03:06.280 worry about other things than the bigger companies? Would they 0:03:06.320 --> 0:03:11.040 have been more worried, for example, about demand coming back? Uh? 0:03:11.080 --> 0:03:16.560 There is a lot of concern about changing consumer behaviors 0:03:16.600 --> 0:03:21.680 as well as about global demand. Uh consumer demand, UM, 0:03:21.800 --> 0:03:25.280 especially for China and Japan, which I think are more 0:03:25.320 --> 0:03:30.200 dependent on global demand. Uh, the recession worries. Uh, We're 0:03:30.280 --> 0:03:33.919 a higher rank, so I think there is still concern 0:03:34.000 --> 0:03:38.440 about that. There's uh more UM time will be devoted 0:03:38.480 --> 0:03:42.160 to understanding how consumer demand and consumer behaviors are going 0:03:42.160 --> 0:03:45.240 to be changing as a result of what we're going 0:03:45.280 --> 0:03:49.880 through with the pandemic. So Automan, how about returning to work? 0:03:49.960 --> 0:03:53.560 That's on the minds I would certainly of employees. How 0:03:53.560 --> 0:03:55.680 about the what are the the c e O s 0:03:55.880 --> 0:03:57.520 in the C suite? How do you think about getting 0:03:57.840 --> 0:04:01.480 people back to work in a post COVID world. Yeah, 0:04:01.600 --> 0:04:05.320 especially for the US CEO SUH, there is a desire 0:04:05.360 --> 0:04:09.600 to bring workers back, um, and they really want to 0:04:09.840 --> 0:04:12.200 get back to business. But I think there is a 0:04:12.240 --> 0:04:15.800 recognition that it is going to be a different world 0:04:16.240 --> 0:04:19.720 coming back. UM. When when we ask about, you know, 0:04:19.760 --> 0:04:23.120 are you going to increase your remote workforce or decrease 0:04:23.200 --> 0:04:27.040 your remote remote workforce? The responses are really neutral. So 0:04:27.080 --> 0:04:31.160 there's kind of an equilibrium in uh, the the proportion 0:04:31.279 --> 0:04:35.640 of the workforce that's working remotely. But there is a 0:04:35.680 --> 0:04:38.479 desire to get back to work and come back to 0:04:38.560 --> 0:04:41.920 the office. UM. But it'll be it'll be a different 0:04:43.000 --> 0:04:46.120 environment because at the same time, they're really thinking about 0:04:46.800 --> 0:04:51.080 reducing uh the office footprint. Right. So for commercial real estate, 0:04:51.120 --> 0:04:53.880 I think we'll also see some differences in terms of 0:04:53.960 --> 0:04:56.880 the size of those offices and maybe the location of 0:04:56.920 --> 0:05:00.440 those offices. You headlines coming out from air Boss that 0:05:00.480 --> 0:05:03.080 I think is worth mentioning in this context. Air Boss 0:05:03.080 --> 0:05:07.560 saying that production rates will remain lower for longer and 0:05:07.680 --> 0:05:14.839 that commercial aircraft that market will recover by five I 0:05:14.839 --> 0:05:18.960 mean seriously automatally looking at another three to five years 0:05:19.000 --> 0:05:25.760 before the commercial aircraft market resumes well, especially since uh, 0:05:26.120 --> 0:05:30.479 these CEOs are saying that they're looking at reducing business travel. 0:05:31.279 --> 0:05:35.960 That seems consistent, uh, and recovery would take quite a 0:05:35.960 --> 0:05:38.440 long time, I think to really come back to the 0:05:38.480 --> 0:05:42.120 previous levels that we've seen. The general consensus seems to 0:05:42.160 --> 0:05:46.320 be there will be there, there will be less business travel. Um. 0:05:46.400 --> 0:05:49.919 And it's hard to see you know how um, you 0:05:49.960 --> 0:05:54.200 know tourism or personal travel is leisure travel is going 0:05:54.240 --> 0:05:57.359 to pick up in the near term. Well, you know 0:05:57.800 --> 0:06:00.599 poll just to point out that the United EEO had 0:06:00.680 --> 0:06:03.960 just said that the turn point is coming on travel demand. Yeah, 0:06:03.960 --> 0:06:06.279 it's interesting. I think, as Ottoman says, I can see 0:06:06.480 --> 0:06:10.560 leisure coming back before business. Um, I don't. As soon 0:06:10.560 --> 0:06:12.080 as I get my shop the next day, I'm on 0:06:12.120 --> 0:06:14.560 a plane, I'll tell you that, Automan, Azel Drum, thank 0:06:14.560 --> 0:06:17.400 you so much for joining us director of Economic Research 0:06:17.480 --> 0:06:20.720 and Global Research Chair at the conference board giving us 0:06:20.720 --> 0:06:25.240 the highlights from their survey of global CEOs. And it'll 0:06:25.240 --> 0:06:28.120 be interesting to see, Vannie, when you get fully evoculated, 0:06:28.200 --> 0:06:31.039 will you hop on a plane? Well, you know no, 0:06:31.120 --> 0:06:33.200 because I'll clearly recovering for you, because you'll be on 0:06:33.279 --> 0:06:36.000 that plane pole. But KLM cutting as many as a 0:06:36.040 --> 0:06:40.080 thousand jobs just now because the travel recovery there is fading. 0:06:40.400 --> 0:06:46.200 So exactly, President Joe Widen's first day executive order confirmed 0:06:46.240 --> 0:06:49.160 what we had been anticipating that TC Energy is Keystone 0:06:49.360 --> 0:06:53.160 XL pipeline is delayed again and could be scrapped. That 0:06:53.240 --> 0:06:56.640 might mean wasting an investment of one point four billion 0:06:56.680 --> 0:06:59.240 dollars on the part of that company. Let's bring in now, 0:06:59.720 --> 0:07:03.320 Oh are Liam Denning, Energy Mining and Commodities columnist for 0:07:03.320 --> 0:07:08.479 a Bloomberg opinion, Liam, you know, the corporation obviously might 0:07:08.640 --> 0:07:12.680 lose a lot of money on this particular anticipated investment. 0:07:12.960 --> 0:07:14.920 But is it a good thing that the Xcel pipeline 0:07:14.920 --> 0:07:20.840 doesn't go ahead? Uh? I think the Keysone Xcel pipeline 0:07:21.000 --> 0:07:23.560 is just one of those things that was conceived in 0:07:23.600 --> 0:07:27.960 a very different environment. So it was first proposed back 0:07:28.160 --> 0:07:32.280 in July of two thousand and eight, which you may remember, 0:07:32.320 --> 0:07:36.720 comincided with the all time high in all prices. You know, 0:07:36.800 --> 0:07:41.160 back then, we were obsessed with peak oil supply. We 0:07:41.160 --> 0:07:45.800 were worried that oil was running out, um, and we 0:07:45.920 --> 0:07:50.200 just live in a very different world now, you know, 0:07:50.600 --> 0:07:55.280 oil supply is abundant, particularly right now in the context 0:07:55.360 --> 0:08:01.360 of the COVID pandemic. Um. We we've seen a you know, 0:08:01.400 --> 0:08:04.200 a huge resurgence in oil production in the US in 0:08:04.240 --> 0:08:07.560 the intervening thirteen years. Um. And the other thing that's 0:08:07.640 --> 0:08:12.080 changed is just the the political environment, both around climate 0:08:12.120 --> 0:08:14.960 policy but also um, you know, in the wake of 0:08:15.040 --> 0:08:17.320 the financial crisis is too dasignating in the wake of 0:08:17.400 --> 0:08:20.840 the pandemic, the role of the role of government in 0:08:21.200 --> 0:08:24.920 kind of setting outcomes. Liam. Just it's been thirteen years. 0:08:24.920 --> 0:08:29.000 Refresh our memory here. The Keystone XL pipeline, it was 0:08:29.040 --> 0:08:33.640 taking oil from where to where, So it was an 0:08:33.640 --> 0:08:38.840 expansion of an existing pipeline network essentially to take oil 0:08:38.960 --> 0:08:43.960 from Alberta, mainly from the oil sands up there in Canada, 0:08:44.920 --> 0:08:49.960 down to refineries and export terminals on the Gulf Coast 0:08:50.000 --> 0:08:53.200 and also into the Midwest. So it was effectively a 0:08:53.280 --> 0:08:58.520 Canadian oil export project. Yeah. And I mean this isn't 0:08:58.559 --> 0:09:01.680 the only one called on called at risk, right, there 0:09:01.720 --> 0:09:04.839 are other pipelines in the sides of the White House, 0:09:04.960 --> 0:09:08.679 not all of the most recent ones, but some, Yes, 0:09:08.720 --> 0:09:12.280 there are there are others, certainly, um, in the in 0:09:12.320 --> 0:09:18.199 the White Houses sites Clearly, Keystone was especially vulnerable because 0:09:19.000 --> 0:09:24.200 um it needed that permit, because it's a cross border pipeline, 0:09:24.200 --> 0:09:28.680 and also because of the way it had essentially become 0:09:29.559 --> 0:09:35.240 something in the prerogative of the president themselves. So um, 0:09:35.280 --> 0:09:38.600 you know, we saw Obama block it, we saw Trump 0:09:39.520 --> 0:09:42.280 revive it, and now we've seen Biden block it again, 0:09:42.320 --> 0:09:45.920 all at the stroke of a pen. So what does 0:09:46.000 --> 0:09:49.280 this say about President Biden's energy policy? Liam, What do 0:09:49.360 --> 0:09:51.000 we really know? What is what's the What are the 0:09:51.040 --> 0:09:54.880 folks in the US energy business? What are they thinking 0:09:54.880 --> 0:10:01.360 about President biden administration. Well, we already know that Biden 0:10:02.000 --> 0:10:06.640 has made climate change a central element of his platform. 0:10:07.000 --> 0:10:09.120 UM in some respects he was. He was sort of 0:10:09.120 --> 0:10:13.320 pushed towards that during the primaries by the progressive wing 0:10:13.360 --> 0:10:17.680 of the party. What was interesting for me about what 0:10:17.760 --> 0:10:22.520 happened with Keystone is that um TC Energy, the company 0:10:22.559 --> 0:10:25.320 that wanted to build it, had been carefully kind of 0:10:25.400 --> 0:10:29.880 layering on insurance UM by coming to agreements with unions 0:10:29.960 --> 0:10:34.240 and with First Nations groups, um IT even it even 0:10:34.280 --> 0:10:38.160 throughout the possibility of powering the thing with renewable energy. 0:10:38.280 --> 0:10:42.000 UM Biden kind of swept that aside. You know, you 0:10:42.000 --> 0:10:45.160 you might have expected him to at least go through 0:10:45.200 --> 0:10:48.400 the motions of a of a review process or something 0:10:48.880 --> 0:10:52.559 to justify getting rid of the of the of the pipeline. 0:10:52.559 --> 0:10:54.760 But he went for it on day one, literally on 0:10:54.840 --> 0:10:57.400 day one. And what that suggests to me is that 0:10:58.440 --> 0:11:02.360 his administration will probably are on the side of moving quickly, 0:11:02.920 --> 0:11:06.600 probably using more executive orders because you know, the Democrats 0:11:06.600 --> 0:11:11.040 obviously have a very thin majority in Congress um so 0:11:11.200 --> 0:11:15.120 you know, it would appear to portender an aggressive stance 0:11:15.160 --> 0:11:19.440 on climate. Yeah. Absolutely. I mean we also, as I say, 0:11:19.679 --> 0:11:23.000 have other pipelines that are potentially in the sites are 0:11:23.080 --> 0:11:26.920 the president. What does it mean for oil supply though, 0:11:26.960 --> 0:11:28.400 because the type of oil that was going to be 0:11:28.440 --> 0:11:31.200 passed through the pipeline is is different that the Canadian 0:11:31.240 --> 0:11:33.360 oil is thicker and heavier oil. What would it have 0:11:33.400 --> 0:11:38.959 been used for. Well, typically those kinds of barrels UM 0:11:39.559 --> 0:11:43.720 use to supply what are called distillates UM so, so 0:11:43.880 --> 0:11:46.880 diesel being the most obvious one. You know, the kind 0:11:46.880 --> 0:11:50.680 of oil we get from uh Texan shale for example, 0:11:50.720 --> 0:11:55.319 tends to be more geared towards producing gasoline. What's interesting 0:11:55.520 --> 0:11:59.680 about the cancelation of Keystone Excel at this time is 0:11:59.720 --> 0:12:02.880 that in effect, it's not really going to matter that 0:12:02.960 --> 0:12:06.400 much for Canadian supply because of what we've seen with 0:12:06.520 --> 0:12:10.880 the industry in general having to scale back it's expansion 0:12:10.960 --> 0:12:15.520 plans because of poor financial performance over the past decade, 0:12:16.200 --> 0:12:18.800 of the need to conserve cash and pay it out 0:12:18.800 --> 0:12:23.360 as dividends. Canadian or production growth probably wasn't going to 0:12:23.440 --> 0:12:27.680 be that much anyway over the next over the medium term, 0:12:27.760 --> 0:12:31.760 and so in some respects Keysonne Excel at this point 0:12:31.840 --> 0:12:35.120 just wasn't really a pipeline that was needed. Men, what 0:12:35.160 --> 0:12:38.800 do we know about the present Biden stands towards um 0:12:38.880 --> 0:12:41.240 the shale patch in and the and the fracking industry, 0:12:41.240 --> 0:12:44.000 because that's where you know, there's a substantial number of 0:12:44.440 --> 0:12:50.160 US jobs. Sure so, um, you know in theory he 0:12:50.240 --> 0:12:55.440 wants to put severe curbs on on fracking. The key 0:12:55.480 --> 0:12:58.120 issue probably in the near term is whether there will 0:12:58.160 --> 0:13:02.360 be some sort of UH ban on new fracking on 0:13:02.520 --> 0:13:05.880 federal lands. UM. That would be a particular issue for 0:13:05.920 --> 0:13:09.840 states like New Mexico, which, as you may know, is 0:13:09.880 --> 0:13:14.120 also where his his nominee for Interior is coming from. 0:13:14.160 --> 0:13:17.840 So that's going to be an interesting one to watch. Um. 0:13:17.880 --> 0:13:20.000 Beyond that, you know, one of the things that caught 0:13:20.040 --> 0:13:23.560 my eye, uh in the executive orders was this move 0:13:23.720 --> 0:13:28.880 to to reinstate a social cost of greenhouse gases in 0:13:29.000 --> 0:13:32.720 terms of federal review of projects. And in some ways 0:13:32.800 --> 0:13:36.680 that is going to be like a carbon tax, but 0:13:36.760 --> 0:13:40.280 it's kind of a stealth carbon tax um that's introduced 0:13:40.760 --> 0:13:45.240 when new projects are being considered, and so that could 0:13:45.280 --> 0:13:48.960 have a big impact on how new projects, Um, you 0:13:49.000 --> 0:13:53.120 know move from the drawing boarder into actual investment phase. Liam, 0:13:53.160 --> 0:13:54.440 we're out of time that I do want to just 0:13:54.520 --> 0:13:58.240 mention it with you. That also, Saudia Rancole is causing 0:13:58.240 --> 0:14:00.360 some controversy today because according to a a view of 0:14:00.400 --> 0:14:04.920 public filings by Bloomberg Green, it's been under reporting emissions 0:14:05.360 --> 0:14:08.319 of course because it wants investors to keep investing, but 0:14:08.400 --> 0:14:12.880 it's been doing this by quite the large fraction. Yeah, 0:14:12.960 --> 0:14:15.600 that was a great story by my colleagues. Um. You know, 0:14:15.679 --> 0:14:17.920 the one point I would just make is that this 0:14:18.080 --> 0:14:20.800 kind of fits a patter, and we saw it most 0:14:20.840 --> 0:14:24.240 recently with Excell Mobile, which really had to be kind 0:14:24.240 --> 0:14:31.440 of pushed into even just disclosing its full carbon emissions footprint. 0:14:31.480 --> 0:14:33.720 And I think what this speaks to is. Look, the 0:14:33.760 --> 0:14:39.440 oil industry for decades has been trying to obfuscate this issue, 0:14:39.840 --> 0:14:43.200 push onto the back burner. And you know we've seen 0:14:43.320 --> 0:14:46.520 over time the industry has forced to disclose more and 0:14:46.520 --> 0:14:49.600 and a Ramco's behavior I think just fits with that, right, 0:14:49.760 --> 0:14:51.800 Liam Denning, thank you so much for joining us. We 0:14:51.800 --> 0:14:55.000 appreciate your thoughts always on the global energy spaces, energy 0:14:55.040 --> 0:14:57.640 mining and commodities calmness for Bloomberg Compinion. You can reach 0:14:57.960 --> 0:14:59.760 and read his work and all the other work for 0:15:00.040 --> 0:15:03.040 Work Opinion at Bloomberg dot com, Slash Opinion or O 0:15:03.240 --> 0:15:09.560 P I N go on the terminal. Five market drivers 0:15:09.600 --> 0:15:12.400 in a Biden Administration. That is the title of a 0:15:12.480 --> 0:15:16.160 recent calm by Barry rid Hoolts. Barry joins us today. 0:15:16.160 --> 0:15:19.200 Barry Ridholts, Bloomberg Opinion columnists and host of Masters in 0:15:19.320 --> 0:15:23.040 Business on Bloomberg Radio, also the founder, chairman and chief 0:15:23.080 --> 0:15:26.800 investment officer of Holt's Wealth Management. Barry the reasons to 0:15:26.840 --> 0:15:29.480 be bullish on stocks they continue to amount, how are 0:15:29.480 --> 0:15:34.080 you viewing things in a Biden administration? So it's the 0:15:34.120 --> 0:15:37.200 battle between bulls and bears. Is really the battle between 0:15:37.360 --> 0:15:43.880 which matters more expensive stocks or even bigger stimulus, and 0:15:44.000 --> 0:15:48.760 so far it looks like stimulus is winning. Yeah, but Barry, 0:15:48.800 --> 0:15:51.720 we keep hearing about the stimulus, but even Nancy Pelosi 0:15:51.760 --> 0:15:54.760 said today that it won't you know, she put it 0:15:54.800 --> 0:15:57.760 in positive terms. And so the Democrats would be ready 0:15:57.840 --> 0:16:00.920 in February, I mean, the worst of Why aren't they 0:16:01.000 --> 0:16:05.640 ready now? Um, you got me. I. I looks like 0:16:05.840 --> 0:16:08.720 the new administration hits the ground running yesterday with a 0:16:08.760 --> 0:16:11.760 lot of their checking off a lot of boxes. They're 0:16:11.760 --> 0:16:14.960 freezing a lot of things that the predecessors had done, 0:16:15.000 --> 0:16:18.760 and they're overturning a bunch of the the more egregious 0:16:18.840 --> 0:16:22.760 um policy issues. I think they need people to wrap 0:16:22.800 --> 0:16:26.880 their head around a one point nine billion dollar, trillion 0:16:26.920 --> 0:16:33.200 dollar Cars Act three before they introduce the infrastructure bill. 0:16:33.240 --> 0:16:36.080 I don't know if people remember, but this week is 0:16:36.200 --> 0:16:40.280 infrastructure week, as we've heard every year for the past 0:16:40.280 --> 0:16:44.280 four years. And uh, the Green New Deal is another 0:16:44.360 --> 0:16:49.200 part of that. And and nobody is really talking about 0:16:49.360 --> 0:16:54.880 Medicare expansion. Uh, the the you know, new Obamacare expansion. 0:16:55.040 --> 0:16:59.080 When we added thirty thirty five million people to the 0:16:59.200 --> 0:17:02.440 roles of in sured, suddenly you had a huge new 0:17:02.520 --> 0:17:09.360 swath of consumers going out and buying consuming uh, medical 0:17:09.440 --> 0:17:13.439 services and pharmaceutical services and hospitals. It was a huge, 0:17:13.800 --> 0:17:16.200 no pun intended shot in the arm for the sector. 0:17:16.880 --> 0:17:20.000 I don't know what numbers they're talking about. I've I've 0:17:20.000 --> 0:17:23.879 read twenty to twenty five million additional people added to 0:17:23.960 --> 0:17:28.280 the to the insured roles. So you take those factors 0:17:28.280 --> 0:17:31.800 and you add them together, that's somewhere between five and 0:17:31.840 --> 0:17:35.480 ten trillion dollars over the next ten years. That's a 0:17:35.520 --> 0:17:40.000 lot of stimulus. So talk to us about stimulus and 0:17:40.000 --> 0:17:42.560 and how important is that. I mean, there's some that 0:17:42.600 --> 0:17:45.359 are suggesting, boy, there's already a lot of liquidit in 0:17:45.359 --> 0:17:47.120 the market. There's a lot of money, maybe even from 0:17:47.119 --> 0:17:51.240 the most recent nine billion round that hasn't been spent. 0:17:51.359 --> 0:17:52.920 What do you say to those that say, hey, let's 0:17:53.040 --> 0:17:56.239 tap the brakes on this a little bit, you know, 0:17:58.440 --> 0:18:01.600 you have to put it into content next of the 0:18:02.000 --> 0:18:05.160 what we learned from and there were a lot of 0:18:05.200 --> 0:18:08.280 good and bad lessons from the entire year, at least 0:18:08.720 --> 0:18:13.560 speaking economically. The good news is that we passed the 0:18:13.640 --> 0:18:18.000 two point one trillion dollar First Cares Act and the 0:18:18.240 --> 0:18:23.679 after tax net cumultive income to us consumers was a 0:18:23.760 --> 0:18:27.960 trillion dollars. That was about a eight percent bump year 0:18:28.040 --> 0:18:30.479 over year. That that was huge in the midst of 0:18:30.520 --> 0:18:34.440 a giant recession. And the way that manifest was not 0:18:34.560 --> 0:18:39.040 just income but UH savings rates went up, credit card 0:18:39.040 --> 0:18:43.480 delinquencies fell, and retail sales not only did they recover, 0:18:43.560 --> 0:18:47.879 they passed the pre pandemic levels. So that's our frame 0:18:47.960 --> 0:18:52.720 of reference. What we noticed at the end of last 0:18:52.800 --> 0:18:58.720 year was how that had faded, and so we we 0:18:58.920 --> 0:19:03.200 extrapolate from that into what this New Cares Act two 0:19:03.320 --> 0:19:07.320 is going to do, and that assumes that we were 0:19:07.440 --> 0:19:10.720 kind of partially reopened. What we're what people seem to 0:19:10.760 --> 0:19:14.440 be forgetting, is we have this massive new surge that 0:19:14.480 --> 0:19:17.680 has in the virus that has not peaked. We are 0:19:18.040 --> 0:19:22.000 probably looking at not just a national mask mandate, but 0:19:22.119 --> 0:19:26.600 a whole bunch of local, state, and maybe even federal 0:19:26.640 --> 0:19:29.920 lockdowns as this gets worse and worse. I mean, four 0:19:29.960 --> 0:19:33.560 thousand deaths a day are just it's just unthinkable. And 0:19:33.680 --> 0:19:36.240 so I think the New Cares Act is going to 0:19:36.400 --> 0:19:39.280 be part of here's how we're gonna bang this out. 0:19:39.359 --> 0:19:42.440 We're gonna just shut down for three weeks and here's 0:19:42.520 --> 0:19:45.480 enough money to carry everybody through, and that's how we'll 0:19:45.480 --> 0:19:48.200 get on the other side of this, and once that's done, 0:19:48.560 --> 0:19:53.119 the broader economy can begin to recover, once we're past 0:19:53.160 --> 0:19:55.800 the pandemic lockdown and we start to see more and 0:19:55.840 --> 0:19:59.359 more vaccines. I don't know, Barrier, remember Biden saying that 0:19:59.400 --> 0:20:02.560 he would not, you know, do a whole federal shutdown, 0:20:02.600 --> 0:20:05.080 and anyway, at this point, you know, on the whole 0:20:05.119 --> 0:20:08.920 world shutdown, it seems that you know, that's not even 0:20:09.040 --> 0:20:12.119 fool proof either. But we'll see, maybe maybe there'll be 0:20:12.359 --> 0:20:15.199 a three week shutdown. Barry, What what would you be 0:20:15.280 --> 0:20:17.639 looking to buy right now? With markets at these levels 0:20:17.680 --> 0:20:22.119 and yet still optimism seemingly out there. So you know, 0:20:22.200 --> 0:20:25.680 it depends on how concerned you are about valuation and 0:20:26.040 --> 0:20:30.080 how aggressive or conservative you are. If you're aggressive, go 0:20:30.200 --> 0:20:34.520 buy everything, but most people aren't. Most people are more moderate. 0:20:34.520 --> 0:20:38.480 And if you're a little concerned that stocks have gotten 0:20:38.480 --> 0:20:43.880 a little pricy, well, the the obvious rotation is you 0:20:44.080 --> 0:20:48.480 move some of your capital that's in large cap growth 0:20:48.960 --> 0:20:52.720 and tech and you buy what's inexpensive. And what we 0:20:52.760 --> 0:20:56.639 see is inexpensive today is is really stands out like 0:20:56.680 --> 0:20:59.840 a sore thumb. The small caps have been are much 0:20:59.800 --> 0:21:03.840 cheaper than the big caps. Value is at historic levels 0:21:03.880 --> 0:21:08.520 of cheapness next to growth they should be after performing 0:21:08.600 --> 0:21:12.800 terribly for the past decade. Emerging markets are much cheaper 0:21:12.840 --> 0:21:15.800 than the US, And if we do get the sort 0:21:15.800 --> 0:21:19.399 of stimulus that this administration is talking about, we're going 0:21:19.440 --> 0:21:22.040 to see the deficits go up, We're gonna see inflation 0:21:22.119 --> 0:21:25.240 peak up, and we're gonna see the yield curve. We've 0:21:25.240 --> 0:21:29.919 talked about this before. UM. Once the yield curve steepens, 0:21:29.960 --> 0:21:33.800 that means that the money center banks should do better 0:21:34.000 --> 0:21:38.240 going forward, as well as anything related to to real estate. 0:21:38.720 --> 0:21:41.720 So there are a lot of options depending on how 0:21:42.040 --> 0:21:46.240 conservative you want to be. But selling a little bit 0:21:46.480 --> 0:21:48.840 of what's done great and buying a little bit of 0:21:48.880 --> 0:21:52.400 what's done poorly, that's sort of rebalancing tends to work 0:21:52.440 --> 0:21:55.520 over the long haul. Hey, Barry, twenty seconds, just give 0:21:55.600 --> 0:21:57.960 us your thoughts on just valuation for the market here. 0:22:00.160 --> 0:22:02.480 You know the to me, the question is in our 0:22:02.520 --> 0:22:06.000 stocks pricy because the second half of all bull markets 0:22:06.000 --> 0:22:09.600 are always pricey. The question is how much of future 0:22:09.720 --> 0:22:13.760 profit increases is priced into the market already. That's the 0:22:13.760 --> 0:22:17.280 bottom line, if this room to grow profits, then there's 0:22:17.280 --> 0:22:20.560 still room for stocks to go higher. I'm not sure 0:22:20.600 --> 0:22:24.000 if it's fully priced in yet. M hmm. Interesting, very Rittles, 0:22:24.040 --> 0:22:27.360 thank you very two words or possibly three. Who's your 0:22:27.359 --> 0:22:30.760 master's in business this weekend? Uh? This weekend is Andrew 0:22:30.800 --> 0:22:35.600 Beer of Dynamic Beta Investments. They run an ets that 0:22:35.880 --> 0:22:38.640 three words on replication their their track workord you got 0:22:38.640 --> 0:22:42.280 it in Thanks Barry Verry Rittle's, founder of Rittle's Wealth Management, 0:22:42.520 --> 0:22:47.119 also Bloomberg opinion contributor and contributor to our show weekly. 0:22:50.119 --> 0:22:52.800 So it is the first full day for President Biden 0:22:52.880 --> 0:22:55.639 in the Oval office, for him in his administration. A 0:22:55.800 --> 0:22:59.159 busy start to his administration for sure. Let's get the 0:22:59.200 --> 0:23:02.680 latest from Josh wind Grove, white House correspondent for Bloomberg 0:23:02.680 --> 0:23:05.800 News Journeys, on the phone from Washington, d C. Josh, 0:23:05.960 --> 0:23:08.919 I want to start with just the general tone in 0:23:09.200 --> 0:23:12.920 the White House as it relates to the administration and 0:23:13.119 --> 0:23:15.200 the press corps. I saw something on my Twitter feed 0:23:15.240 --> 0:23:18.399 today which was really interesting, kind of comparing the highlights 0:23:18.600 --> 0:23:23.639 from the first press briefing under President Trump versus the 0:23:23.680 --> 0:23:28.159 first press briefing under President Biden, and boy, it was 0:23:28.640 --> 0:23:31.440 the differences were just stark. What's the feeling within the 0:23:31.520 --> 0:23:34.200 press corps and the White House right now? Well, I mean, 0:23:34.560 --> 0:23:37.240 so they're returning to daily press briefings or at least 0:23:37.240 --> 0:23:39.480 weekday press briefings, That of course has not been the 0:23:39.520 --> 0:23:41.880 case or was not the case for the last two 0:23:41.920 --> 0:23:46.440 years under the Trump administration. Trump's Press secretary, Kaylee mcinny 0:23:46.480 --> 0:23:51.639 obviously was pretty gleeful in sparring went the press and 0:23:52.400 --> 0:23:56.760 you know, trying to rechange, reframe the narrative. She her 0:23:56.840 --> 0:23:59.080 very first press briefings that she would never lie. Of 0:23:59.119 --> 0:24:03.800 course she light all the time. But you know, Biden's 0:24:03.840 --> 0:24:07.720 team has now come in. Jock is saying, look, you know, 0:24:07.800 --> 0:24:11.520 we're gonna we're committed to sharing information, but you know, 0:24:11.560 --> 0:24:14.399 well we'll see, we'll see where it though. She uh, 0:24:14.840 --> 0:24:18.560 she's obviously deeply experienced and this she uh, you know, 0:24:19.560 --> 0:24:25.399 very smooth in her first appearance. I'm sure, but you know, 0:24:26.840 --> 0:24:29.320 it's all the job up there is to give the 0:24:29.359 --> 0:24:31.439 view of the president. She said as much yesterday. So 0:24:31.480 --> 0:24:33.840 everything's with a grain as salt. Yeah, Josh, it was 0:24:33.880 --> 0:24:37.280 a very interesting news conference. Give us your thoughts on 0:24:37.680 --> 0:24:40.040 whether you think there might be some kind of a 0:24:40.040 --> 0:24:44.840 policy to not mention the predecessor form President Donald Trump. 0:24:45.280 --> 0:24:49.240 Everything that related to him was either punted to Congress 0:24:49.359 --> 0:24:52.280 in terms of any impeachment process, or just not really 0:24:52.320 --> 0:24:55.879 answered at all. For example, the question of the current 0:24:55.960 --> 0:25:00.159 FBI director Christopher Ay. Yeah, they really do want to 0:25:00.200 --> 0:25:02.320 try to think, take the temperature down and just saying 0:25:02.359 --> 0:25:04.919 the word Trump has a habit of not doing that. 0:25:05.000 --> 0:25:07.400 So I think we'll see them pull back. We've seen 0:25:07.400 --> 0:25:09.720 this even on the issue of impeachment. Remember, this is 0:25:09.760 --> 0:25:12.199 a big question. A lot of stuff Trump or excuse me, 0:25:12.760 --> 0:25:15.480 do you know lots of Biden wants to do, relies 0:25:15.520 --> 0:25:18.200 on Congress, and Congress in particular. Of course, the Senate 0:25:18.320 --> 0:25:21.280 is going to be logjam potentially dealing with impeachment. He 0:25:21.480 --> 0:25:25.560 just this morning they were asked, does Biden think that 0:25:25.600 --> 0:25:28.560