1 00:00:00,080 --> 00:00:12,879 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg 2 00:00:12,960 --> 00:00:16,960 Speaker 1: Surveillance Podcast. I'm Tom Keene along with Paul Sweeney. Join 3 00:00:17,079 --> 00:00:21,000 Speaker 1: us each day for insight from the best in economics, finance, investment, 4 00:00:21,200 --> 00:00:24,840 Speaker 1: and international relations. You can also watch the show live 5 00:00:25,079 --> 00:00:29,400 Speaker 1: on YouTube. Visit the Bloomberg Podcast channel on YouTube to 6 00:00:29,520 --> 00:00:32,920 Speaker 1: see the show weekday mornings from seven to ten am 7 00:00:32,960 --> 00:00:37,000 Speaker 1: Eastern from our global headquarters in New York City. Subscribe 8 00:00:37,000 --> 00:00:40,360 Speaker 1: to the podcast on Apple, Spotify, or anywhere else you 9 00:00:40,440 --> 00:00:44,600 Speaker 1: listen and always I'm Bloomberg Radio, the Bloomberg Terminal, and 10 00:00:44,640 --> 00:00:48,160 Speaker 1: the Bloomberg Business App. Critically, the ten year reel yield 11 00:00:48,200 --> 00:00:51,839 Speaker 1: one point ninety seven percent comes in more accommodative to 12 00:00:51,920 --> 00:00:54,640 Speaker 1: one point ninety five percent. We get a first look 13 00:00:55,000 --> 00:00:59,000 Speaker 1: with Ira Jersey of Bloomberg Intelligence. Ira, what's the nuance here? 14 00:01:00,160 --> 00:01:03,040 Speaker 2: So you know, looking at some of these revisions, it 15 00:01:03,120 --> 00:01:05,000 Speaker 2: actually is a little bit of a weaker report if 16 00:01:05,000 --> 00:01:07,720 Speaker 2: you take those revisions into account. So you look at 17 00:01:07,720 --> 00:01:10,960 Speaker 2: the PC deflator month a month plus the core deflator, 18 00:01:10,959 --> 00:01:15,319 Speaker 2: same thing came in at one tenth in December instead 19 00:01:15,360 --> 00:01:18,039 Speaker 2: of a little bit higher. So I think you know, 20 00:01:18,160 --> 00:01:21,040 Speaker 2: in totality just from the headlines that we have right now, 21 00:01:21,319 --> 00:01:24,800 Speaker 2: haven't dug into all the data yet, it's you know, 22 00:01:24,880 --> 00:01:28,040 Speaker 2: as expected to slightly weaker. And you've seen that reaction 23 00:01:28,120 --> 00:01:30,440 Speaker 2: in the bond market. You look at two year yields, 24 00:01:30,440 --> 00:01:33,480 Speaker 2: you've rallied now four basis points since the number came out, 25 00:01:34,040 --> 00:01:37,160 Speaker 2: So we know people less concerned about the inflationary environment 26 00:01:37,240 --> 00:01:39,440 Speaker 2: with this, you know as expected. I think some people 27 00:01:39,440 --> 00:01:40,560 Speaker 2: were worried that it was going to come in a 28 00:01:40,600 --> 00:01:42,640 Speaker 2: little hotter obviously and had positions. 29 00:01:42,720 --> 00:01:45,680 Speaker 1: Yeah, I got a memory of like zero. When we're 30 00:01:45,680 --> 00:01:48,360 Speaker 1: doing the show. It's such a blur, folks. I'm spending 31 00:01:48,440 --> 00:01:51,400 Speaker 1: more time on live chat than listening to Ira. Did 32 00:01:51,440 --> 00:01:54,840 Speaker 1: I think in the last ten minutes, Ira Jersey absolutely 33 00:01:54,960 --> 00:01:56,440 Speaker 1: nailed this call. 34 00:01:56,600 --> 00:01:57,760 Speaker 3: He's pretty good, I don't think. 35 00:01:57,760 --> 00:02:00,880 Speaker 4: I mean, he's got a big reputation comes through every day. 36 00:02:00,920 --> 00:02:03,720 Speaker 4: So some some of the headlines, Tom, the PCE deflator 37 00:02:03,760 --> 00:02:05,760 Speaker 4: came in at zero point three percent, right in line 38 00:02:05,760 --> 00:02:08,880 Speaker 4: with expectations on an annual basis, that's two point four 39 00:02:08,919 --> 00:02:12,040 Speaker 4: percent on the headline, right in line with expectations. The 40 00:02:12,160 --> 00:02:15,640 Speaker 4: PCE core deflator month on month zero point four percent, 41 00:02:16,440 --> 00:02:19,280 Speaker 4: and that's again right in line with expectations you annualize 42 00:02:19,320 --> 00:02:22,840 Speaker 4: that it's two point eight percent is a PCE core deflator, folks, 43 00:02:23,120 --> 00:02:25,320 Speaker 4: And that's kind of what the Federal Reserve looks at. 44 00:02:25,360 --> 00:02:27,919 Speaker 4: So again, if Iraf I'm the Federal Reserve, I just 45 00:02:28,040 --> 00:02:30,160 Speaker 4: kind of kick back in my chair, twitter my thumbs 46 00:02:30,200 --> 00:02:32,200 Speaker 4: and saying I'm doing a pretty good job here. 47 00:02:33,440 --> 00:02:36,240 Speaker 2: Yeah, I think for the Fed, like, there's this whole 48 00:02:36,320 --> 00:02:40,000 Speaker 2: narrative about how quickly inflation is going to come down, right, 49 00:02:40,040 --> 00:02:41,959 Speaker 2: and that's one of the reasons why we've priced out 50 00:02:42,280 --> 00:02:44,480 Speaker 2: a lot of the interest rate cuts that we had earlier. 51 00:02:44,800 --> 00:02:47,280 Speaker 2: And you know this this data just kind of proves 52 00:02:47,280 --> 00:02:50,480 Speaker 2: that point where you know, yes, we're we're under three 53 00:02:50,520 --> 00:02:53,320 Speaker 2: percent in terms of the core PC deflator, but we're 54 00:02:53,320 --> 00:02:55,919 Speaker 2: still a two point eight percent And if it's persistent there, 55 00:02:56,200 --> 00:02:58,600 Speaker 2: then why should the Federal Reserve cut interest rates? 56 00:02:58,639 --> 00:02:58,799 Speaker 5: Right? 57 00:02:58,840 --> 00:03:00,799 Speaker 2: That's going to be a narrative and a question that 58 00:03:00,840 --> 00:03:02,600 Speaker 2: people are going to ask, like, you know, why cut 59 00:03:02,639 --> 00:03:06,799 Speaker 2: interest rates now? Because the economy seems pretty decent, even 60 00:03:06,800 --> 00:03:10,160 Speaker 2: the two hundred and fifteen thousand jobless claims historically speaking, 61 00:03:10,200 --> 00:03:12,760 Speaker 2: that's not particularly high. Of course, you know, we have 62 00:03:12,800 --> 00:03:14,800 Speaker 2: to keep in mind. Something with jobless claims is that 63 00:03:14,800 --> 00:03:16,919 Speaker 2: that's only one side of the equation. That's only the 64 00:03:17,000 --> 00:03:19,440 Speaker 2: number of people being laid off. If nobody is hired, 65 00:03:19,639 --> 00:03:21,760 Speaker 2: you still have eight hundred thousand job losses. That would 66 00:03:21,800 --> 00:03:23,720 Speaker 2: be bad, right, but we know that there are people 67 00:03:24,080 --> 00:03:26,120 Speaker 2: being hired on the other side of that, So people 68 00:03:26,360 --> 00:03:27,919 Speaker 2: you know who lose their jobs are able to find 69 00:03:28,000 --> 00:03:28,760 Speaker 2: jobs very quickly. 70 00:03:28,800 --> 00:03:31,200 Speaker 1: Now, if you're just joining us across this nation, around 71 00:03:31,200 --> 00:03:34,320 Speaker 1: the world, this is Bloomberg Surveillance. Michael bar Lisa Matteo, 72 00:03:34,440 --> 00:03:37,320 Speaker 1: Paul Sweeney, and Tom Keen, we welcome you with key 73 00:03:37,440 --> 00:03:41,720 Speaker 1: economic data. Thank you out on YouTube for your watching. 74 00:03:41,800 --> 00:03:45,119 Speaker 1: You go to YouTube Bloomberg Podcast. We're building that audience out. 75 00:03:45,200 --> 00:03:48,720 Speaker 1: We're stunned. I don't think Google's stunned. They're like, you know, um, 76 00:03:48,920 --> 00:03:50,760 Speaker 1: they're like, you know, book Taylor Swift and then we'll 77 00:03:50,800 --> 00:03:54,240 Speaker 1: pay attention. But thank you out on YouTube for your 78 00:03:54,320 --> 00:03:57,600 Speaker 1: interest in live chat and on Apple cart play as well. Paul. 79 00:03:57,640 --> 00:04:01,080 Speaker 1: Two more questions, Ira Jersey before we go, the mister writing. 80 00:04:00,760 --> 00:04:03,240 Speaker 4: All right, Ira, I mean, so we've got this kind 81 00:04:03,280 --> 00:04:05,720 Speaker 4: of in our pocket here, what's next? 82 00:04:05,760 --> 00:04:07,120 Speaker 3: What do you think the market's going to be looking 83 00:04:07,160 --> 00:04:08,560 Speaker 3: at next. 84 00:04:09,000 --> 00:04:11,000 Speaker 2: Yes, so a couple of data prints that come out 85 00:04:11,000 --> 00:04:13,839 Speaker 2: early in the month. Obviously the Payrolls report next next 86 00:04:13,840 --> 00:04:16,679 Speaker 2: Friday will be key among them. But you know, we're 87 00:04:16,720 --> 00:04:19,000 Speaker 2: looking at some of the survey data, and there's been 88 00:04:19,000 --> 00:04:21,200 Speaker 2: this disconnect between the survey data and some of the 89 00:04:21,200 --> 00:04:23,080 Speaker 2: hard data. So we pointed that out in a note 90 00:04:23,080 --> 00:04:26,520 Speaker 2: that we put out on on Monday, where we were 91 00:04:26,839 --> 00:04:29,040 Speaker 2: you know, we were surprised to see things like the 92 00:04:29,080 --> 00:04:33,080 Speaker 2: ism surveys and some of those, you know, not being 93 00:04:33,480 --> 00:04:36,280 Speaker 2: or pointing to contraction, whereas you look at some of 94 00:04:36,320 --> 00:04:38,880 Speaker 2: the harder data, like the retail sales report, like CPI, 95 00:04:39,040 --> 00:04:41,640 Speaker 2: like the jobs report, and and those seem to show 96 00:04:41,680 --> 00:04:43,960 Speaker 2: that the data is being better and and I would 97 00:04:43,960 --> 00:04:46,640 Speaker 2: overweight the hard data a little bit more than some 98 00:04:46,720 --> 00:04:48,719 Speaker 2: of the survey data. And I think some of the 99 00:04:48,760 --> 00:04:54,760 Speaker 2: reason why why economists across across their forecasts are thinking 100 00:04:54,760 --> 00:04:56,880 Speaker 2: that the economy is going to slow significantly is that 101 00:04:57,240 --> 00:04:59,240 Speaker 2: is that the survey data has been so weak, and 102 00:04:59,279 --> 00:05:01,720 Speaker 2: those those sometimes get weighted maybe a little bit more 103 00:05:01,760 --> 00:05:04,719 Speaker 2: than they should. But the hard data certainly right now 104 00:05:05,120 --> 00:05:07,080 Speaker 2: is not showing any sign of So I mean, just 105 00:05:07,080 --> 00:05:09,600 Speaker 2: look at the personal income number. You know, one percent 106 00:05:09,680 --> 00:05:13,359 Speaker 2: personal income growth is pretty spectacular. That means, you know, 107 00:05:13,400 --> 00:05:16,080 Speaker 2: savings rates up because you only had personal spending up 108 00:05:16,160 --> 00:05:18,680 Speaker 2: zero point two percent. But that's still decent for GDP 109 00:05:18,760 --> 00:05:19,960 Speaker 2: and national income in general. 110 00:05:20,120 --> 00:05:23,640 Speaker 1: Ira John from Coventry says, time shut up, more soccer talk, 111 00:05:24,080 --> 00:05:26,680 Speaker 1: aston Villa Luton. I mean, come on, that's a must 112 00:05:26,720 --> 00:05:28,040 Speaker 1: win for aston Villa. 113 00:05:27,920 --> 00:05:30,000 Speaker 2: Right, yeah, we we have to win. I want to 114 00:05:30,040 --> 00:05:31,840 Speaker 2: stay in the top four. I really you know, the 115 00:05:31,880 --> 00:05:34,960 Speaker 2: Europa Conference League is great, but making the Champions League 116 00:05:35,000 --> 00:05:37,880 Speaker 2: next year I think is key for my for my villains. 117 00:05:37,920 --> 00:05:38,440 Speaker 3: Yeah, for sure. 118 00:05:38,520 --> 00:05:41,120 Speaker 1: Very good, Ira Jersey, thank you so much with your 119 00:05:41,160 --> 00:05:49,440 Speaker 1: aston Villa report, John writing joining us now for Breen Capital. John, 120 00:05:49,480 --> 00:05:51,680 Speaker 1: Before we get to the serious economics of this, I've 121 00:05:51,720 --> 00:05:55,480 Speaker 1: gotta the FA thing is really good. Where a Preston 122 00:05:55,560 --> 00:05:59,160 Speaker 1: north En can actually destroy a Premier League team, Explain 123 00:05:59,240 --> 00:06:02,479 Speaker 1: to our American audience the magic of this tournament that 124 00:06:02,560 --> 00:06:05,360 Speaker 1: you have in the United Kingdom. 125 00:06:05,520 --> 00:06:07,800 Speaker 5: Well, I wish Preston north End I'd destroyed a Premier 126 00:06:07,880 --> 00:06:12,680 Speaker 5: League team, but we lost to Chelsea. But it's a tournament, 127 00:06:12,680 --> 00:06:15,880 Speaker 5: the f A Cup that is open all if you 128 00:06:15,920 --> 00:06:18,880 Speaker 5: will try, essays FA Cup open all the way. You're 129 00:06:18,960 --> 00:06:21,880 Speaker 5: down into a non league football, so you can get 130 00:06:21,920 --> 00:06:25,560 Speaker 5: these great giant killing moments. 131 00:06:27,240 --> 00:06:29,920 Speaker 1: But we didn't see it. But I thought this was 132 00:06:29,960 --> 00:06:33,560 Speaker 1: a joke, and John Ferreau trained me yep to understand 133 00:06:33,600 --> 00:06:36,400 Speaker 1: how magical this is. And you see that within Premier 134 00:06:36,480 --> 00:06:39,720 Speaker 1: League Guston Villa or John's real commitment to what's going 135 00:06:39,760 --> 00:06:42,840 Speaker 1: on Preston North End. Let's get to the topic of 136 00:06:42,880 --> 00:06:45,440 Speaker 1: the moment John writing, which is economics. The market loves it, 137 00:06:45,560 --> 00:06:52,120 Speaker 1: futures red go green. What does Jerome Powell do other 138 00:06:52,200 --> 00:06:55,200 Speaker 1: than say I'm data dependent. I didn't learn anything in 139 00:06:55,240 --> 00:06:57,719 Speaker 1: this report. What a shock. I've got to wait for 140 00:06:57,760 --> 00:07:00,400 Speaker 1: the February jobs report that we'll see soon. 141 00:07:01,760 --> 00:07:04,159 Speaker 5: Well, I think the first thing he does, because you 142 00:07:04,279 --> 00:07:08,239 Speaker 5: talked about that personal income increase of one percent, that's 143 00:07:08,279 --> 00:07:10,960 Speaker 5: not really an indication of what's going on in the 144 00:07:11,040 --> 00:07:15,960 Speaker 5: underlying economy. Wage and salary income was only up four 145 00:07:16,080 --> 00:07:20,800 Speaker 5: tenths of a percent, and you had some very odd numbers. 146 00:07:20,920 --> 00:07:24,560 Speaker 5: Rental income up one point six percent, And there was 147 00:07:24,560 --> 00:07:28,600 Speaker 5: an element of that also in the CPI report, where 148 00:07:28,720 --> 00:07:34,040 Speaker 5: the owner's equivalent rent appeared to have been pushed up 149 00:07:34,480 --> 00:07:40,400 Speaker 5: by a change in the waiting on the single family homes, 150 00:07:40,440 --> 00:07:45,800 Speaker 5: and that's very inside baseball, and he's going to want 151 00:07:45,880 --> 00:07:47,559 Speaker 5: to know what's happening to the trend. 152 00:07:47,560 --> 00:07:47,720 Speaker 1: Now. 153 00:07:47,760 --> 00:07:51,360 Speaker 5: The trend is we have at this point a fairly 154 00:07:51,480 --> 00:07:56,080 Speaker 5: solid economy and inflation that is slowly coming down. So 155 00:07:56,360 --> 00:07:59,640 Speaker 5: why does he want to do anything at this point? 156 00:08:00,160 --> 00:08:04,400 Speaker 5: You can't imagine that financial conditions are tight, given where 157 00:08:04,400 --> 00:08:11,320 Speaker 5: the equity market is, for example, So just sit on 158 00:08:11,360 --> 00:08:16,640 Speaker 5: your hands and enjoy it. And the people who thought 159 00:08:17,600 --> 00:08:22,280 Speaker 5: that the economy would have been destroyed by the FED 160 00:08:22,400 --> 00:08:25,760 Speaker 5: raising interest rates from zero to five and a quarter 161 00:08:25,840 --> 00:08:30,720 Speaker 5: to five and a half percent, that just didn't come back. 162 00:08:30,800 --> 00:08:34,440 Speaker 5: So you know, if it's not broken, don't do anything. 163 00:08:34,480 --> 00:08:37,600 Speaker 1: What you just heard there, folks, it's leap Day. That's 164 00:08:37,640 --> 00:08:40,920 Speaker 1: our inside of February, all twenty nine days. Paul I 165 00:08:41,040 --> 00:08:44,360 Speaker 1: can't say enough about John Writing. And I grew up 166 00:08:44,640 --> 00:08:47,360 Speaker 1: where a central bank was allowed to sit on their hands, 167 00:08:47,800 --> 00:08:51,079 Speaker 1: and with the financial media today where we want action. 168 00:08:51,280 --> 00:08:54,840 Speaker 1: It's like Michael Barr, he's addicted to Detroit Tiger's action. 169 00:08:55,000 --> 00:08:58,160 Speaker 1: The answer is action. What's the FED going to do next? 170 00:08:58,200 --> 00:08:58,280 Speaker 5: This? 171 00:08:58,520 --> 00:09:01,480 Speaker 1: The parlor game is a new era, and to sit 172 00:09:01,559 --> 00:09:04,360 Speaker 1: in your hands. Nobody wants that, and they're wrong. Sit 173 00:09:04,440 --> 00:09:04,840 Speaker 1: in your hands. 174 00:09:04,840 --> 00:09:06,360 Speaker 3: It seems like they're doing okay. 175 00:09:06,600 --> 00:09:08,960 Speaker 4: Hey, John, you know I saw also the data coming 176 00:09:09,000 --> 00:09:12,800 Speaker 4: out today, personal income of one percent, well above expectations, 177 00:09:13,080 --> 00:09:16,120 Speaker 4: Personal spending up to zero point two percent, right aligned 178 00:09:16,120 --> 00:09:19,840 Speaker 4: with expectations. Boy, the consumer strong. Does it surprise you 179 00:09:20,240 --> 00:09:22,079 Speaker 4: how strong the consumer seems to be? 180 00:09:24,720 --> 00:09:28,840 Speaker 5: I think there is some elements of surprise. But bear 181 00:09:28,880 --> 00:09:35,080 Speaker 5: in mind, you have enormous amounts of wealth, given what's 182 00:09:35,120 --> 00:09:38,719 Speaker 5: happened in the equity market and also housing, which is 183 00:09:38,760 --> 00:09:43,240 Speaker 5: an extremely important asset for so many people. You know, 184 00:09:43,360 --> 00:09:47,720 Speaker 5: housing wealth hasn't been declining. House prices didn't really have 185 00:09:47,800 --> 00:09:51,800 Speaker 5: a trench with this move up, which in mortgage rates. Now, 186 00:09:52,440 --> 00:09:56,079 Speaker 5: as I said, the personal income of one percent, I 187 00:09:56,120 --> 00:10:00,640 Speaker 5: would ignore that's that's that's clearly an anomaly in the data. 188 00:10:00,960 --> 00:10:04,000 Speaker 5: I would look at the trend in ways in the 189 00:10:04,080 --> 00:10:07,480 Speaker 5: salary income, and that's rising four to five pence of 190 00:10:07,520 --> 00:10:10,920 Speaker 5: a percent per month, around five percent per year. Inflation 191 00:10:11,600 --> 00:10:14,080 Speaker 5: is running it between two and a half and three 192 00:10:14,160 --> 00:10:16,880 Speaker 5: percent on these data, So that's your increase two and 193 00:10:16,920 --> 00:10:19,679 Speaker 5: a half percent or so, is your increase trend increase 194 00:10:19,720 --> 00:10:24,239 Speaker 5: in real income, and that's pretty good for the consumer. 195 00:10:25,440 --> 00:10:29,800 Speaker 5: Not spectacular, but pretty good. And so until the employment 196 00:10:30,360 --> 00:10:34,240 Speaker 5: market shows signs of cracking, the FED probably isn't too 197 00:10:34,240 --> 00:10:37,360 Speaker 5: worried about the real economy and the job as claims. 198 00:10:37,440 --> 00:10:43,800 Speaker 5: Data which we haven't mentioned we continue, which continue to 199 00:10:43,800 --> 00:10:47,080 Speaker 5: hold near the two hundred thousand level, suggests that companies 200 00:10:47,160 --> 00:10:53,520 Speaker 5: aren't in total making mass layoffs. So the employment market 201 00:10:53,760 --> 00:10:56,360 Speaker 5: is holding, in the jobs markets, holding in job creations, 202 00:10:56,360 --> 00:11:01,920 Speaker 5: holding and will know more next job's number doesn't come 203 00:11:01,920 --> 00:11:05,400 Speaker 5: out tomorrow. It's a delay. We'll no more next Friday. 204 00:11:06,559 --> 00:11:08,720 Speaker 5: But I want to I just want to think, you know, 205 00:11:08,960 --> 00:11:11,120 Speaker 5: the other conversation about cutting rates that you're having with 206 00:11:11,200 --> 00:11:13,880 Speaker 5: IR it's a key point. I keep making it. I 207 00:11:13,880 --> 00:11:17,160 Speaker 5: can't make it enough times. There is an enormous difference 208 00:11:17,679 --> 00:11:21,560 Speaker 5: between cutting interest rates in this environment and easing policy. 209 00:11:21,920 --> 00:11:24,640 Speaker 5: The FED can cut rates two or three times this 210 00:11:24,800 --> 00:11:28,600 Speaker 5: year as inflation comes down, and not ease policy, because 211 00:11:28,640 --> 00:11:32,800 Speaker 5: inflation's coming down, right, and so real interest rates would 212 00:11:32,880 --> 00:11:35,240 Speaker 5: rise in interest rates so just for inflation would rise 213 00:11:35,520 --> 00:11:38,200 Speaker 5: if the FED doesn't cut rig But the problem is 214 00:11:38,920 --> 00:11:41,800 Speaker 5: a FED has not done a good job communicating that, 215 00:11:42,480 --> 00:11:47,000 Speaker 5: and that started with the December FENC press conference. 216 00:11:47,360 --> 00:11:49,120 Speaker 1: Yeah, I mean a run out of time, John, But 217 00:11:49,160 --> 00:11:51,040 Speaker 1: I really take your point on the residual that the 218 00:11:51,040 --> 00:11:54,320 Speaker 1: FED has not communicated the real yield dynamics are I 219 00:11:54,320 --> 00:11:56,440 Speaker 1: think they think it's too complicated for the public. I 220 00:11:56,480 --> 00:11:59,520 Speaker 1: got thirty seconds. Where's our nominal GDP? 221 00:11:59,760 --> 00:11:59,960 Speaker 2: Right now? 222 00:12:00,240 --> 00:12:03,480 Speaker 1: Where's our animal spirit? Are we way above four. 223 00:12:03,280 --> 00:12:10,840 Speaker 5: Percent nominal GDP? You saw the real GDP with three 224 00:12:10,840 --> 00:12:13,679 Speaker 5: point two percent in the fourth quarter. We're probably running 225 00:12:13,720 --> 00:12:16,560 Speaker 5: around five percent and that is in line with those 226 00:12:16,600 --> 00:12:18,120 Speaker 5: ways and salary incomes. 227 00:12:18,640 --> 00:12:21,160 Speaker 1: So yeah, that's an. 228 00:12:21,080 --> 00:12:25,720 Speaker 5: Environment back in the old days of nominal thoughts of 229 00:12:25,720 --> 00:12:28,800 Speaker 5: nominal GDP targeting with three percent real growth which the 230 00:12:28,800 --> 00:12:31,679 Speaker 5: economy can't achieve right now on a sustained basis, and 231 00:12:31,720 --> 00:12:34,760 Speaker 5: two percent inflation. Five percent is about right. There's no 232 00:12:34,960 --> 00:12:38,600 Speaker 5: sign despite the level of race of monetary tightness. 233 00:12:38,800 --> 00:12:51,120 Speaker 1: Gospel. They're from John writing, thank you so much. Francis 234 00:12:51,200 --> 00:12:54,280 Speaker 1: Donald joins us now from manual Life. Francis, if we 235 00:12:54,360 --> 00:12:58,760 Speaker 1: get a decent economy, is the residual the nominal rate 236 00:12:58,960 --> 00:13:03,000 Speaker 1: less dis inflation going to lead to a higher real 237 00:13:03,120 --> 00:13:07,679 Speaker 1: rate that gums up the financial system. 238 00:13:08,080 --> 00:13:12,560 Speaker 6: I feel like that's a third trimester test question for 239 00:13:12,600 --> 00:13:14,800 Speaker 6: which I have to do some side notes in the margin. 240 00:13:16,200 --> 00:13:21,360 Speaker 6: So yes, the issue now is that we are seeing 241 00:13:21,440 --> 00:13:24,000 Speaker 6: less inflation in the system. And if you are real 242 00:13:24,080 --> 00:13:29,160 Speaker 6: rates minded, that is, you look at nominal rates minus inflation, 243 00:13:29,600 --> 00:13:32,520 Speaker 6: then the real rate will naturally climb. And if you 244 00:13:32,600 --> 00:13:35,320 Speaker 6: believe that the real rate is the major rate that 245 00:13:35,360 --> 00:13:39,040 Speaker 6: controls what's happening in the economy, policy is becoming increasingly 246 00:13:39,240 --> 00:13:44,240 Speaker 6: tighter without FED cuts. And this is in some ways 247 00:13:44,240 --> 00:13:47,720 Speaker 6: the most important question, Tom, because at this point there 248 00:13:47,760 --> 00:13:50,880 Speaker 6: doesn't appear to be any evidence that the FED should 249 00:13:50,880 --> 00:13:53,480 Speaker 6: be cutting, and yet they've told us that they will 250 00:13:53,480 --> 00:13:55,520 Speaker 6: begin an easing cycle later this year, and so have 251 00:13:55,600 --> 00:13:59,040 Speaker 6: other central banks. And the question is are they doing 252 00:13:59,040 --> 00:14:01,520 Speaker 6: this to target the real day or do they actually 253 00:14:01,559 --> 00:14:04,240 Speaker 6: think the economy will slow? And this isn't just a 254 00:14:04,320 --> 00:14:08,960 Speaker 6: technical adjustment. I think they're going to try to continue 255 00:14:08,960 --> 00:14:12,199 Speaker 6: this soft landing narrative and say we're real rates folks. 256 00:14:12,840 --> 00:14:14,840 Speaker 6: My take, of course, Tom and Paul, as you know, 257 00:14:14,960 --> 00:14:17,520 Speaker 6: is that the economy will slow materially later this year, 258 00:14:17,679 --> 00:14:19,280 Speaker 6: not yet, but certainly later. 259 00:14:19,360 --> 00:14:21,520 Speaker 4: That's okay. So that's exactly where I wanted to go. 260 00:14:21,560 --> 00:14:25,760 Speaker 4: Francis from reading your research, You've been consistent concerned about 261 00:14:25,800 --> 00:14:28,280 Speaker 4: the US economy. Barish on the US economy preps, as 262 00:14:28,320 --> 00:14:30,840 Speaker 4: you suggest, when you get data today like with like 263 00:14:30,920 --> 00:14:35,200 Speaker 4: personal income, personal spending, when you get the jobs data, 264 00:14:35,320 --> 00:14:39,360 Speaker 4: does that dent your cautiousness about the US economy at all? 265 00:14:41,640 --> 00:14:44,880 Speaker 6: You know, on balance, I am a little bit worried 266 00:14:44,920 --> 00:14:47,520 Speaker 6: about the math. When are the two quarters of negative 267 00:14:47,560 --> 00:14:50,440 Speaker 6: GDP going to arise, because that, of course would be 268 00:14:50,480 --> 00:14:54,000 Speaker 6: what will qualify as a US recession. However, you know, 269 00:14:54,160 --> 00:14:57,880 Speaker 6: there is almost nothing happening right now that didn't happen 270 00:14:58,080 --> 00:15:02,080 Speaker 6: immediately before recessions route history. So much of what we 271 00:15:02,080 --> 00:15:04,360 Speaker 6: hear is how this time is different, and the models 272 00:15:04,360 --> 00:15:07,120 Speaker 6: are broken, and there are certainly things that are different. 273 00:15:07,160 --> 00:15:10,480 Speaker 6: There are elements that are different. But we saw very 274 00:15:10,560 --> 00:15:13,560 Speaker 6: strong growth prior to every recession that's come through. It 275 00:15:13,600 --> 00:15:17,440 Speaker 6: has always been on average two years from rate hikes 276 00:15:17,440 --> 00:15:20,240 Speaker 6: starting to its impact on the economy, which is sometime 277 00:15:20,400 --> 00:15:22,920 Speaker 6: in the next six months. We have always seen a 278 00:15:23,000 --> 00:15:25,960 Speaker 6: surge in soft landing arguments right before, and markets are 279 00:15:26,000 --> 00:15:29,160 Speaker 6: strong prior to recessions. So there is no data now 280 00:15:29,240 --> 00:15:31,280 Speaker 6: that tells me, you know, I need to be less 281 00:15:31,280 --> 00:15:35,640 Speaker 6: concerned that very typical economic relationships, like when things cost more, 282 00:15:35,720 --> 00:15:38,120 Speaker 6: you spend less. I can't throw those out the window, 283 00:15:38,200 --> 00:15:40,280 Speaker 6: even though I can agree that some things are different. 284 00:15:40,680 --> 00:15:43,000 Speaker 6: But yes, the timing of this is of course the 285 00:15:43,040 --> 00:15:46,960 Speaker 6: really big challenge, and the timing is complicated by Washington 286 00:15:47,320 --> 00:15:49,400 Speaker 6: and fiscal spending that's coming through. But I'll just add 287 00:15:49,400 --> 00:15:53,440 Speaker 6: one thing here. The US, of course not in a recession, 288 00:15:53,800 --> 00:15:56,880 Speaker 6: but most of the G seven is near or in 289 00:15:56,960 --> 00:16:01,960 Speaker 6: a technical recession. Japan, UK, Germany and France are very close. 290 00:16:02,000 --> 00:16:04,400 Speaker 6: They're kind of coming off on decimal points. So the 291 00:16:04,440 --> 00:16:06,960 Speaker 6: whole recession or no recession call first of all far 292 00:16:07,000 --> 00:16:09,680 Speaker 6: too binary, but also a US versus rest of the 293 00:16:09,680 --> 00:16:12,720 Speaker 6: world call, And for most investors, I think that trade 294 00:16:12,800 --> 00:16:15,120 Speaker 6: is far more important than are we going to get 295 00:16:15,120 --> 00:16:17,400 Speaker 6: two quarters of negative dUTP? Which yes, I think we will, 296 00:16:18,040 --> 00:16:20,120 Speaker 6: but I think that's most important. 297 00:16:20,440 --> 00:16:24,240 Speaker 4: How unusual relatively, I'm glad you called out kind of 298 00:16:24,240 --> 00:16:27,920 Speaker 4: the US what some people will call economic exceptionalism here 299 00:16:28,600 --> 00:16:28,960 Speaker 4: visa to. 300 00:16:28,880 --> 00:16:30,440 Speaker 3: Be the rest of the world in terms of economy. 301 00:16:30,480 --> 00:16:33,440 Speaker 4: How unusual is that Francis to have I guess the 302 00:16:33,560 --> 00:16:35,680 Speaker 4: US doing one way, going one way, and the rest 303 00:16:35,680 --> 00:16:37,960 Speaker 4: of the world governed another well. 304 00:16:37,960 --> 00:16:39,640 Speaker 6: When I came up in the business, we would often 305 00:16:39,680 --> 00:16:42,880 Speaker 6: be told the US consumer is the most important thing 306 00:16:42,920 --> 00:16:46,280 Speaker 6: globally because the US economy is driven by the US consumer. 307 00:16:46,560 --> 00:16:49,680 Speaker 6: And in this case, there is one peculiar thing happening 308 00:16:49,680 --> 00:16:53,200 Speaker 6: in the cycle that has contributed to US exceptionalism, and 309 00:16:53,240 --> 00:16:56,240 Speaker 6: that is that the manufacturing cycles and the services cycles 310 00:16:56,240 --> 00:16:59,960 Speaker 6: are extremely disconnected. This was the twenty twenty three recession mistake, 311 00:17:00,440 --> 00:17:03,440 Speaker 6: which is that all of the manufacturing indicators suggested we 312 00:17:03,440 --> 00:17:06,720 Speaker 6: were heading into a recession. And historically the lag between 313 00:17:06,720 --> 00:17:10,000 Speaker 6: manufacturing and services is very short, but it hasn't happened. 314 00:17:10,040 --> 00:17:14,240 Speaker 6: So manufacturing exposed economies they're really doing poorly right now, 315 00:17:14,240 --> 00:17:15,879 Speaker 6: and in fact they've done so poorly they might be 316 00:17:15,880 --> 00:17:18,600 Speaker 6: coming out of it. But services based economies like the 317 00:17:18,720 --> 00:17:22,080 Speaker 6: United States have had resilience. What is very different this time, 318 00:17:22,080 --> 00:17:24,320 Speaker 6: and I think this has caught investors off guard, is 319 00:17:24,320 --> 00:17:27,040 Speaker 6: that typically it's the FED or the US that leads 320 00:17:27,040 --> 00:17:30,120 Speaker 6: the easing and hiking cycles. That didn't happen right now now. 321 00:17:30,119 --> 00:17:32,399 Speaker 6: It's actually emerging market. So if you count out the 322 00:17:32,440 --> 00:17:34,280 Speaker 6: amount of central banks that are easing right now, one 323 00:17:34,320 --> 00:17:37,879 Speaker 6: in four global central banks is already cutting rates. The US, 324 00:17:37,880 --> 00:17:39,440 Speaker 6: instead of being at the front of that pack, is 325 00:17:39,480 --> 00:17:41,160 Speaker 6: probably going to be near the end of the pack. 326 00:17:41,359 --> 00:17:43,200 Speaker 6: That's very different this time around. 327 00:17:43,440 --> 00:17:46,880 Speaker 1: Francis, how's a Canadian economy doing? You know, I think 328 00:17:46,920 --> 00:17:49,280 Speaker 1: our basic take as we cover it, way too little 329 00:17:50,160 --> 00:17:53,280 Speaker 1: with manual life out of Montreal and across all of Canada, 330 00:17:53,480 --> 00:17:56,919 Speaker 1: goods producing, the mining cliches in that give us just 331 00:17:57,000 --> 00:18:00,880 Speaker 1: a quick snapshot of how Canada is doing well. 332 00:18:00,920 --> 00:18:03,320 Speaker 6: I'm so happy you asked. We did get Canadian GDP 333 00:18:03,480 --> 00:18:06,520 Speaker 6: this morning, and Canada of birded a recession. They had 334 00:18:06,600 --> 00:18:10,680 Speaker 6: negative GDP last quarter. But Canada is in a little 335 00:18:10,720 --> 00:18:14,159 Speaker 6: bit more trouble than the United States because of how 336 00:18:14,200 --> 00:18:17,200 Speaker 6: exposed to rates it is. And again this is another 337 00:18:17,359 --> 00:18:19,560 Speaker 6: differential between the US and the rest of the world, 338 00:18:19,640 --> 00:18:22,720 Speaker 6: is what is your rate sensitivity. Canada, of course, is 339 00:18:22,720 --> 00:18:26,800 Speaker 6: seeing a more material pull back consumer spending, consumer confidence 340 00:18:26,880 --> 00:18:30,000 Speaker 6: is very different, and the economy basically hasn't grown in 341 00:18:30,040 --> 00:18:33,160 Speaker 6: a year. So there's no soft landing versus hard landing 342 00:18:33,160 --> 00:18:36,159 Speaker 6: discussion in Canada. It's very clearly hard landing and it 343 00:18:36,200 --> 00:18:38,400 Speaker 6: comes down to the rate sensitivity. The US, of course, 344 00:18:38,400 --> 00:18:40,920 Speaker 6: because of its housing market, very differently exposed. 345 00:18:41,040 --> 00:18:44,639 Speaker 1: Francis, Thank you, Francis donald Is with manual Life with 346 00:18:44,720 --> 00:18:47,640 Speaker 1: a greade over there of the data that we saw 347 00:18:47,680 --> 00:18:54,960 Speaker 1: that was market moving, Drew Matis with us, and Drew, 348 00:18:55,000 --> 00:18:57,960 Speaker 1: I'm going to surprise you here, and I understand I 349 00:18:57,960 --> 00:19:01,240 Speaker 1: don't want you to talk about MetLife, pension plans or 350 00:19:01,560 --> 00:19:06,080 Speaker 1: actuarial theory. But Jillian Tann out with an inside baseball 351 00:19:06,240 --> 00:19:10,840 Speaker 1: pension story today how and it's still around Eastman Kodak 352 00:19:10,880 --> 00:19:15,840 Speaker 1: Company is disbanding their team that manages four billion of 353 00:19:15,920 --> 00:19:20,200 Speaker 1: pension in the summary of this complexity is because they're 354 00:19:20,240 --> 00:19:24,399 Speaker 1: making so much money. That's why. So Drew, let's go 355 00:19:24,440 --> 00:19:27,840 Speaker 1: to the wealth effect here of the post pandemic market 356 00:19:27,880 --> 00:19:29,920 Speaker 1: that we're seeing. And I don't mean to talk about MetLife, 357 00:19:29,960 --> 00:19:33,000 Speaker 1: I know that's inappropriate. But are we in a massive 358 00:19:33,040 --> 00:19:37,480 Speaker 1: wealth creation right now, Drew, of price up, yield down, 359 00:19:37,640 --> 00:19:39,040 Speaker 1: and equities up. 360 00:19:40,560 --> 00:19:42,440 Speaker 7: Well, I think we're you know, there's a lot of 361 00:19:42,480 --> 00:19:45,640 Speaker 7: signs that we're still a wash in liquidity. So that 362 00:19:45,800 --> 00:19:49,000 Speaker 7: kind of raises a great question about quantitative tightening and 363 00:19:49,040 --> 00:19:52,639 Speaker 7: how important quantitative tightening is and whether or not we 364 00:19:52,680 --> 00:19:56,480 Speaker 7: should really be you know, the FED should actually really 365 00:19:56,480 --> 00:19:58,800 Speaker 7: be talking about dialing back quantitative tightening. 366 00:19:59,040 --> 00:19:59,240 Speaker 5: You know. 367 00:19:59,280 --> 00:20:02,000 Speaker 7: I my opinion is the balance sheets way too large, 368 00:20:02,920 --> 00:20:07,159 Speaker 7: significantly too large, and that it's too large, and you 369 00:20:07,200 --> 00:20:09,480 Speaker 7: know it's too large because there are no signs of 370 00:20:09,520 --> 00:20:13,360 Speaker 7: stress in funding markets, right, and so that's an abnormal thing. 371 00:20:13,560 --> 00:20:16,480 Speaker 7: What you actually do want during periods of the year 372 00:20:16,600 --> 00:20:19,720 Speaker 7: is for there to be stressed in funding markets. Think 373 00:20:19,760 --> 00:20:22,720 Speaker 7: of it as, you know, getting a fever and then 374 00:20:22,960 --> 00:20:26,240 Speaker 7: realizing that you're sick. If you never get a fever, 375 00:20:26,800 --> 00:20:29,000 Speaker 7: you know, the sickness is going to be the thing 376 00:20:29,000 --> 00:20:32,159 Speaker 7: that surprises you, whereas you want the symptoms to actually 377 00:20:32,200 --> 00:20:36,040 Speaker 7: be there so that market participants and people like the 378 00:20:36,080 --> 00:20:38,360 Speaker 7: FED can understand that there are issues in the market 379 00:20:39,080 --> 00:20:42,320 Speaker 7: and a lot you know, the amount of liquidity where 380 00:20:42,320 --> 00:20:44,920 Speaker 7: a washing is actually disrupting a whole bunch of signals 381 00:20:44,920 --> 00:20:47,439 Speaker 7: that I think is leaving us blind to some risks. 382 00:20:48,160 --> 00:20:52,080 Speaker 4: So, Drew, I'm just looking at the CPE data. I mean, 383 00:20:52,440 --> 00:20:56,000 Speaker 4: I'm sorry, the PC data, Thank you, Tom, the p 384 00:20:56,480 --> 00:20:59,399 Speaker 4: E I E I O exactly. But if I'm the 385 00:20:59,400 --> 00:21:02,760 Speaker 4: Federal Reserve, I look at that data, I don't see 386 00:21:02,760 --> 00:21:05,680 Speaker 4: a need to cut rates here. I mean, do you 387 00:21:05,680 --> 00:21:08,960 Speaker 4: think this better reserve can kind of outlast the market 388 00:21:08,960 --> 00:21:10,159 Speaker 4: here in terms of waiting. 389 00:21:11,640 --> 00:21:14,600 Speaker 7: So I'll go. I'll go somewhere I never thought i'd go. 390 00:21:14,680 --> 00:21:18,120 Speaker 7: And you know, I think Larry Summers is right. I mean, 391 00:21:18,240 --> 00:21:20,240 Speaker 7: there's got to be some chance that they hike rates 392 00:21:20,240 --> 00:21:25,840 Speaker 7: in this environment. And you know, the reason being is simply, 393 00:21:25,880 --> 00:21:28,760 Speaker 7: you know, three point seven percent unemployment rate and inflation 394 00:21:29,000 --> 00:21:31,280 Speaker 7: well above your target. How long do you let that 395 00:21:31,359 --> 00:21:34,280 Speaker 7: persist for? It's one thing, if unemployment is beginning to 396 00:21:34,320 --> 00:21:36,840 Speaker 7: move higher, then you can argue, well, we know inflation 397 00:21:36,920 --> 00:21:38,880 Speaker 7: will gradually come down, or we can have a high 398 00:21:38,920 --> 00:21:42,639 Speaker 7: expectation that will come down. But if if unemployment is 399 00:21:42,680 --> 00:21:44,800 Speaker 7: not moving higher and inflation is just kind of staying 400 00:21:44,800 --> 00:21:48,040 Speaker 7: where it's at, you know, it doesn't make sense to 401 00:21:48,040 --> 00:21:49,920 Speaker 7: be talking about rate cuts in that kind of environment. 402 00:21:50,640 --> 00:21:53,200 Speaker 4: All right, So given that scenario, I mean, I guess 403 00:21:53,320 --> 00:21:55,760 Speaker 4: the other side of that coin, Drew would be, you know, 404 00:21:55,800 --> 00:21:58,119 Speaker 4: a risk of this economy being pushed into recession. But 405 00:21:58,720 --> 00:22:01,320 Speaker 4: it's hard to see any data that would suggest that's 406 00:22:01,320 --> 00:22:01,720 Speaker 4: a risk. 407 00:22:03,359 --> 00:22:05,120 Speaker 7: Well, I mean there is data. There will be data 408 00:22:05,200 --> 00:22:08,200 Speaker 7: comes out on Friday on state level unemployment numbers. We've 409 00:22:08,200 --> 00:22:11,080 Speaker 7: been watching that pretty carefully, because you know, there's been 410 00:22:11,119 --> 00:22:14,480 Speaker 7: this kind of erosion at the state level of unemployment 411 00:22:14,560 --> 00:22:18,000 Speaker 7: relative to kind of where it had been trending, and 412 00:22:18,040 --> 00:22:21,080 Speaker 7: that erosion has been spreading out across states. You know, 413 00:22:21,080 --> 00:22:23,760 Speaker 7: there's now kind of, you know, nineteen states triggering the 414 00:22:23,800 --> 00:22:26,160 Speaker 7: so called Saw rule, which is kind of you know, 415 00:22:26,200 --> 00:22:28,400 Speaker 7: how much of a deterioration of labor market does there 416 00:22:28,400 --> 00:22:32,320 Speaker 7: need to be before there's a recession, And so the 417 00:22:32,400 --> 00:22:34,080 Speaker 7: question is kind of how many states can you have 418 00:22:34,119 --> 00:22:36,840 Speaker 7: that before the national numbers actually begin to reflect any 419 00:22:36,880 --> 00:22:40,159 Speaker 7: of it. You know, I would also point out to 420 00:22:40,600 --> 00:22:44,080 Speaker 7: the FED released charge off rates last week for credit cards, 421 00:22:44,160 --> 00:22:46,080 Speaker 7: and you know, they're at levels we haven't seen since 422 00:22:46,080 --> 00:22:50,360 Speaker 7: two thousand and eight, so you know there are cracks 423 00:22:50,400 --> 00:22:54,040 Speaker 7: in the system. They're just you know, the headline data 424 00:22:54,080 --> 00:22:56,000 Speaker 7: doesn't seem to reflect a lot of kind of the 425 00:22:56,080 --> 00:23:00,760 Speaker 7: underlying data that we're seeing, and that disconnect is unusual 426 00:23:00,840 --> 00:23:03,160 Speaker 7: and makes it makes us a bit nervous, to be honest. 427 00:23:03,280 --> 00:23:06,440 Speaker 1: With stocks trading six minutes into the session, the nastaic 428 00:23:06,520 --> 00:23:09,920 Speaker 1: up eight tenths of a percent eighteeny sixteen on a 429 00:23:10,000 --> 00:23:14,080 Speaker 1: level SPX just below fifty one, twenty four points of 430 00:23:14,200 --> 00:23:17,879 Speaker 1: Dow thirty nine thousand, up ninety two points. We are 431 00:23:17,920 --> 00:23:21,760 Speaker 1: with Drewmatis of that life Drew, what's the correlation right 432 00:23:21,800 --> 00:23:27,960 Speaker 1: now between bond madness and stock madness? Are they linked? Well? 433 00:23:28,000 --> 00:23:30,680 Speaker 7: It is interesting. I mean, spreads in the credit space 434 00:23:30,720 --> 00:23:34,080 Speaker 7: are very very tight, and you know, equities are doing 435 00:23:34,160 --> 00:23:36,480 Speaker 7: really well, and you know, I think the question to 436 00:23:36,520 --> 00:23:39,800 Speaker 7: ask is does that make sense when you know performance 437 00:23:39,840 --> 00:23:42,639 Speaker 7: is being generated by a small subset of companies in 438 00:23:42,680 --> 00:23:45,440 Speaker 7: certain places, but you know the credit market is being 439 00:23:45,440 --> 00:23:48,440 Speaker 7: reflected across all all of you know, all of these companies, 440 00:23:49,520 --> 00:23:53,639 Speaker 7: and so I do think, you know, the expectation that 441 00:23:53,640 --> 00:23:55,960 Speaker 7: there will not be a recession this year is kind 442 00:23:55,960 --> 00:23:58,480 Speaker 7: of growing. If you look at the Bloomberg andsensus numbers, 443 00:23:58,520 --> 00:24:00,879 Speaker 7: they started off at fifty five, them down to fifty 444 00:24:01,000 --> 00:24:04,399 Speaker 7: forty five, they're now at forty. I think people are 445 00:24:04,440 --> 00:24:06,359 Speaker 7: going to be surprised if there's a recession, or at 446 00:24:06,440 --> 00:24:08,840 Speaker 7: least a chunk of the market will be. But that's 447 00:24:08,840 --> 00:24:11,480 Speaker 7: still our baseline call is that we're heading towards the recession, 448 00:24:11,720 --> 00:24:15,080 Speaker 7: that we'll see a deterioration in the labor market, and 449 00:24:15,359 --> 00:24:18,600 Speaker 7: when that deterioration comes, it tends to be fast. And 450 00:24:19,119 --> 00:24:22,359 Speaker 7: you know this is you know, bad things happen quickly. 451 00:24:22,400 --> 00:24:26,159 Speaker 7: Good things happen over long periods of time. And I 452 00:24:26,160 --> 00:24:28,400 Speaker 7: think when this bad thing happens, I think it will 453 00:24:28,440 --> 00:24:29,520 Speaker 7: cut some people off guard. 454 00:24:30,520 --> 00:24:33,240 Speaker 4: Talk to us Mark about the labor market, because that's 455 00:24:33,240 --> 00:24:36,240 Speaker 4: another aspect that I'm sure the FED looks at closely. 456 00:24:36,280 --> 00:24:40,320 Speaker 4: It seems like pretty solid labor market there. We've got 457 00:24:40,359 --> 00:24:43,560 Speaker 4: some consumer spending and consumer income data that looks pretty positive. 458 00:24:43,560 --> 00:24:46,159 Speaker 3: Here. How do you view the consumer it needs to 459 00:24:46,160 --> 00:24:46,959 Speaker 3: be the labor market. 460 00:24:48,240 --> 00:24:50,000 Speaker 7: Well, I mean, if you look at the data today, 461 00:24:50,040 --> 00:24:53,320 Speaker 7: so real disposal income was flat for the month, you know, 462 00:24:53,359 --> 00:24:55,880 Speaker 7: which is not particularly good when you look at what's 463 00:24:55,920 --> 00:24:58,600 Speaker 7: going on with hours worked, So you have everyone's getting 464 00:24:58,640 --> 00:25:01,640 Speaker 7: paid more per hour, but the amount of bringing home 465 00:25:01,680 --> 00:25:07,440 Speaker 7: per week is actually declining for the majority of Americans. Yeah, 466 00:25:08,040 --> 00:25:10,720 Speaker 7: you know, so fifty five percent of workers last month 467 00:25:10,840 --> 00:25:14,159 Speaker 7: in a very strong employment report saw their average weekly 468 00:25:14,200 --> 00:25:17,639 Speaker 7: wage decline. You know that's not the sign of a 469 00:25:17,680 --> 00:25:18,520 Speaker 7: healthy weak market. 470 00:25:18,600 --> 00:25:18,800 Speaker 5: Solf. 471 00:25:19,119 --> 00:25:20,679 Speaker 1: This is Morey Harris one on one. This is what 472 00:25:20,760 --> 00:25:23,480 Speaker 1: Drew Madis has acclaimed for from Ages Ago at UBS. 473 00:25:24,080 --> 00:25:27,080 Speaker 1: I haven't heard that review, Drew, that you just gave 474 00:25:27,119 --> 00:25:30,840 Speaker 1: on over half of America is going away from wage gain? 475 00:25:31,680 --> 00:25:34,240 Speaker 1: Is this just show the skewidness of the economy, the 476 00:25:34,280 --> 00:25:37,520 Speaker 1: bipolar nature we're in, of the halves having and the 477 00:25:37,560 --> 00:25:38,920 Speaker 1: rest of us flat on our back. 478 00:25:39,840 --> 00:25:42,200 Speaker 7: Well, it does, and it's probably worse than that because 479 00:25:42,280 --> 00:25:45,439 Speaker 7: I'm talking about hourly workers there, right, So you know, 480 00:25:45,560 --> 00:25:47,880 Speaker 7: for people with the salary they might be doing better, 481 00:25:47,920 --> 00:25:50,320 Speaker 7: but of course then there's there's that spread there. And 482 00:25:50,600 --> 00:25:53,760 Speaker 7: then the question is, you know, who's who's responsible for 483 00:25:53,800 --> 00:25:56,760 Speaker 7: the increasing level of charge off rates on credit cards? 484 00:25:57,040 --> 00:25:59,879 Speaker 7: Who's responsible for some of the weakness we're seeing elsewhere 485 00:25:59,920 --> 00:26:02,440 Speaker 7: in the economy, And I do think some of it's 486 00:26:02,440 --> 00:26:05,040 Speaker 7: at bifurcation. And it gets back to the wealth effect, right, 487 00:26:05,080 --> 00:26:07,840 Speaker 7: who benefits most from the equity market going up? Who 488 00:26:07,880 --> 00:26:11,000 Speaker 7: benefits more from interest rates being higher on savings and 489 00:26:11,040 --> 00:26:15,640 Speaker 7: investment accounts? Obviously that's people who have wealth to invest, 490 00:26:16,520 --> 00:26:19,479 Speaker 7: and so there is this kind of widening gap, and 491 00:26:19,520 --> 00:26:22,880 Speaker 7: then you throw in some of the fiscal issues facing 492 00:26:23,160 --> 00:26:27,000 Speaker 7: the government, and you know it's you know, maybe it's 493 00:26:27,000 --> 00:26:30,400 Speaker 7: not surprising that confidence levels are not that particularly high. 494 00:26:30,440 --> 00:26:32,760 Speaker 7: They're not back to where they were pre COVID, and 495 00:26:32,800 --> 00:26:34,840 Speaker 7: you would have thought, you know, we'd all be celebrating 496 00:26:34,880 --> 00:26:37,520 Speaker 7: the end of COVID and consumer confidence would be skyrocketing. 497 00:26:37,560 --> 00:26:38,879 Speaker 7: And that's just not what we're seeing. 498 00:26:39,119 --> 00:26:41,960 Speaker 1: Drew. Thanks for the brief, Drew Matis MetLife. There covered 499 00:26:41,960 --> 00:26:54,040 Speaker 1: a lot of territory there. You didly look at the 500 00:26:54,040 --> 00:26:56,720 Speaker 1: front pages around the world. Lisa, you send me the 501 00:26:56,760 --> 00:26:59,280 Speaker 1: list this morning. I was like dazzled. She's looking at 502 00:26:59,320 --> 00:27:01,840 Speaker 1: it like teen newspapers to get this done. What do 503 00:27:01,880 --> 00:27:02,240 Speaker 1: you got? 504 00:27:02,400 --> 00:27:02,760 Speaker 3: All right? 505 00:27:03,000 --> 00:27:05,600 Speaker 8: We're starting with the Post, Paul, you appreciate this. This 506 00:27:05,640 --> 00:27:07,600 Speaker 8: is an exclusive to the New York Post. It says 507 00:27:07,600 --> 00:27:10,840 Speaker 8: Sharry Redstone making a big financial move in order to 508 00:27:10,840 --> 00:27:13,800 Speaker 8: make those debt payments. They're saying that our National Amusements, 509 00:27:13,840 --> 00:27:16,720 Speaker 8: that's the holding company that controls that voting stock in Paramount, 510 00:27:17,080 --> 00:27:19,639 Speaker 8: has sold a chunk of its real estate holdings to 511 00:27:19,720 --> 00:27:23,000 Speaker 8: make a forty million dollar debt payment that's due this week. 512 00:27:23,320 --> 00:27:25,880 Speaker 8: She's really fine to keep control of both those companies. 513 00:27:26,000 --> 00:27:27,439 Speaker 8: I mean, she's she's continued to. 514 00:27:27,400 --> 00:27:29,119 Speaker 1: Set a family million right it is. 515 00:27:29,160 --> 00:27:31,560 Speaker 4: I mean her her father's sumner restone had to. I 516 00:27:31,600 --> 00:27:34,360 Speaker 4: mean what family's done is typically to get liquidity, they've 517 00:27:34,359 --> 00:27:38,400 Speaker 4: pledged their stock for margin loans from various investment banks 518 00:27:38,400 --> 00:27:39,000 Speaker 4: and so on and so forth. 519 00:27:39,040 --> 00:27:42,639 Speaker 1: So their paramount stock to do a real estate transaction. 520 00:27:42,760 --> 00:27:44,760 Speaker 4: Well, in this particular case, they sold real estate to 521 00:27:44,800 --> 00:27:46,920 Speaker 4: make a debt payment. So but in the past, Sumner 522 00:27:46,960 --> 00:27:49,920 Speaker 4: Redstone has had the same thing that. I mean again, 523 00:27:50,280 --> 00:27:52,719 Speaker 4: this is a The market cap is down, the stocks 524 00:27:52,720 --> 00:27:54,680 Speaker 4: down fifty percent over the trailing twelve months. 525 00:27:54,720 --> 00:27:55,400 Speaker 3: I don't know what. 526 00:27:55,520 --> 00:27:58,320 Speaker 1: Okay, but translate this. This is not paramount and all 527 00:27:58,320 --> 00:28:03,520 Speaker 1: the Gloria Hollywood, the CBS television network is beholden to 528 00:28:03,640 --> 00:28:06,240 Speaker 1: somebody having to cover say a real estate transaction. 529 00:28:06,320 --> 00:28:09,240 Speaker 4: Yep, that's the control shareholder of the Redstone family. So 530 00:28:10,080 --> 00:28:13,080 Speaker 4: I was, yeah, this is it's it's it's really a 531 00:28:13,119 --> 00:28:16,040 Speaker 4: concern here. So they need a transaction here, they need 532 00:28:16,080 --> 00:28:17,960 Speaker 4: a sale of all this company. 533 00:28:18,040 --> 00:28:19,400 Speaker 1: Lisa, thank you. I learned something there. 534 00:28:19,400 --> 00:28:20,639 Speaker 3: What's up there? You go? All right? 535 00:28:20,920 --> 00:28:23,320 Speaker 8: New York Times learn about this a new study that 536 00:28:23,400 --> 00:28:25,719 Speaker 8: shows more about the side effects of people who have 537 00:28:25,800 --> 00:28:27,800 Speaker 8: long COVID. I don't know if anyone hears ever having 538 00:28:28,040 --> 00:28:32,840 Speaker 8: long COVID it could lead to cognitive decline, especially that 539 00:28:32,920 --> 00:28:36,240 Speaker 8: ability to remember, to reason to plan things because a 540 00:28:36,240 --> 00:28:38,640 Speaker 8: lot of people at long COVID have been saying they've 541 00:28:38,680 --> 00:28:41,160 Speaker 8: been suffering from this, and this study kind of puts 542 00:28:41,160 --> 00:28:44,600 Speaker 8: that into perspective. People with long COVID they scored slightly 543 00:28:44,760 --> 00:28:48,240 Speaker 8: lower on this cognitive test than people who recovered. The 544 00:28:48,280 --> 00:28:50,920 Speaker 8: good news, though, is that the long COVID patients who 545 00:28:51,160 --> 00:28:53,880 Speaker 8: got better and their health improved, they scored just as 546 00:28:53,920 --> 00:28:56,520 Speaker 8: well as those whose symptoms did not last as long. 547 00:28:56,600 --> 00:28:59,080 Speaker 8: So when you start to get better than your cognitive 548 00:28:59,600 --> 00:29:00,600 Speaker 8: I don't know anyone in. 549 00:29:00,560 --> 00:29:04,680 Speaker 1: The family, the broader family that's been involved here, but 550 00:29:04,760 --> 00:29:06,480 Speaker 1: this is a tangible thing, isn't. 551 00:29:06,920 --> 00:29:09,560 Speaker 8: My sisters had long coat, she still can't taste or 552 00:29:09,600 --> 00:29:14,440 Speaker 8: smell and she got COVID whin Yeah, yeah, So it's 553 00:29:14,600 --> 00:29:16,920 Speaker 8: really some big implications. But this is more of a 554 00:29:17,000 --> 00:29:18,760 Speaker 8: level of, you know, cognitive thinking. 555 00:29:18,800 --> 00:29:18,960 Speaker 5: You know. 556 00:29:19,000 --> 00:29:20,800 Speaker 8: So I have to tell my sister when she says, 557 00:29:20,800 --> 00:29:23,680 Speaker 8: I can't remember up there you go long COVID. It 558 00:29:23,720 --> 00:29:27,560 Speaker 8: could be who knows, but some interesting for people who are. 559 00:29:27,440 --> 00:29:29,280 Speaker 3: So I think we're just starting to learn more about 560 00:29:29,320 --> 00:29:29,880 Speaker 3: all of this stuff. 561 00:29:29,960 --> 00:29:33,959 Speaker 1: Oh yeah, I don't have it in front of me, folks, 562 00:29:34,320 --> 00:29:37,960 Speaker 1: But yesterday, over sixty five they're talking about a new 563 00:29:38,400 --> 00:29:41,080 Speaker 1: booster shot. Oh yes, I haven't read about it yet. 564 00:29:41,120 --> 00:29:43,040 Speaker 1: I'm not up to speed on this, but I'm certain 565 00:29:43,160 --> 00:29:45,920 Speaker 1: that there was an announcement that those of a certain 566 00:29:46,000 --> 00:29:49,479 Speaker 1: fossildom have to look at another. I have not done it. 567 00:29:49,520 --> 00:29:53,200 Speaker 1: I had I think I had three and not four, 568 00:29:53,960 --> 00:29:54,840 Speaker 1: or two and not three. 569 00:29:54,920 --> 00:29:56,360 Speaker 3: I can't remember two, not three. 570 00:29:56,400 --> 00:29:58,600 Speaker 1: Probably I'm one of the ugly lazy ones out there 571 00:29:58,600 --> 00:30:01,120 Speaker 1: and probably not good full disclosure. 572 00:30:01,280 --> 00:30:03,720 Speaker 3: That's all right, just just pitching the game with the 573 00:30:03,760 --> 00:30:05,120 Speaker 3: flu shot. Then we're done. 574 00:30:05,200 --> 00:30:05,400 Speaker 5: You know. 575 00:30:05,720 --> 00:30:08,280 Speaker 8: Oh my husband in there, he got knocked on his 576 00:30:08,400 --> 00:30:09,600 Speaker 8: butt from heaving both. 577 00:30:09,600 --> 00:30:12,680 Speaker 3: His right Okay, yeah, all right, what do you go? 578 00:30:13,280 --> 00:30:16,160 Speaker 8: Okay, you just had talked about the Rangers best record 579 00:30:16,160 --> 00:30:18,000 Speaker 8: in hockey history. I think you were just talking about that. 580 00:30:18,040 --> 00:30:20,880 Speaker 8: So I want to point out something brawling. 581 00:30:20,600 --> 00:30:21,160 Speaker 3: The fight. 582 00:30:21,440 --> 00:30:24,160 Speaker 8: You know that that hockey is known for. It's back. 583 00:30:24,280 --> 00:30:26,920 Speaker 8: You have this twenty one year old rookie on the Rangers, 584 00:30:26,920 --> 00:30:30,400 Speaker 8: Matt Rempy, and they're calling him kind of this throwback 585 00:30:30,440 --> 00:30:34,240 Speaker 8: to the more violent era of the sport. He joined 586 00:30:34,240 --> 00:30:37,040 Speaker 8: the Rangers for the Miners February eighteenth. He's six foot 587 00:30:37,120 --> 00:30:42,320 Speaker 8: seventy feet of Calgary like he's a big guy. But 588 00:30:42,360 --> 00:30:43,480 Speaker 8: he's jumping right into action. 589 00:30:43,640 --> 00:30:44,360 Speaker 3: He's thrown fight. 590 00:30:44,520 --> 00:30:46,920 Speaker 8: He started fighting right away with the Islanders. Tough guy 591 00:30:46,960 --> 00:30:50,840 Speaker 8: Matt Martin's listened to this. His first five games, he 592 00:30:50,920 --> 00:30:54,200 Speaker 8: spent a total of twenty minutes actually playing on the ice, 593 00:30:54,680 --> 00:30:57,480 Speaker 8: and then he racked up thirty two penalty minutes after 594 00:30:57,520 --> 00:30:59,280 Speaker 8: taking part in three separate fights. 595 00:30:59,320 --> 00:31:02,200 Speaker 1: This is important. We go to the surveillance control room, Okay, 596 00:31:02,440 --> 00:31:06,000 Speaker 1: no cameras allowed in a surveillance control room. And you 597 00:31:06,000 --> 00:31:09,040 Speaker 1: know it's our global technical director and Rich is that 598 00:31:09,120 --> 00:31:12,320 Speaker 1: Rich doesn't have a last name. Rich is there? Rich 599 00:31:12,680 --> 00:31:15,680 Speaker 1: is rempy like the next vv Chara. He's six foot. 600 00:31:15,480 --> 00:31:20,240 Speaker 4: Seven, seven feet in skates. 601 00:31:21,160 --> 00:31:23,960 Speaker 1: Charge's a little more skilled. Okay, we got from the Bruins. 602 00:31:24,000 --> 00:31:28,840 Speaker 8: Okay, So do people miss that brawling part of them 603 00:31:29,240 --> 00:31:31,400 Speaker 8: or is it losing it that No? 604 00:31:31,840 --> 00:31:34,320 Speaker 1: I missed the old game desperately, like I do not 605 00:31:34,520 --> 00:31:39,080 Speaker 1: watch New hockey. I call it DEFLECTI I don't. I'm 606 00:31:39,080 --> 00:31:42,040 Speaker 1: completely bored by what they've done with the game. 607 00:31:42,840 --> 00:31:44,640 Speaker 3: Do you think it's I wanted to bring. 608 00:31:44,520 --> 00:31:47,840 Speaker 1: Back the old game, and I've talked to Gary Bettman 609 00:31:47,880 --> 00:31:51,960 Speaker 1: about it, the commissioner, and there's just huge pressure that 610 00:31:52,000 --> 00:31:53,960 Speaker 1: the players don't get injured. There used to be a 611 00:31:54,000 --> 00:31:56,880 Speaker 1: lot of injuries because they go flying down here in 612 00:31:56,920 --> 00:32:00,160 Speaker 1: the old game, they're not. There's there's much more. Her 613 00:32:00,240 --> 00:32:04,040 Speaker 1: cutest skating skills to set up someone with three people 614 00:32:04,040 --> 00:32:05,720 Speaker 1: in front of the net that deflect the puck and 615 00:32:05,800 --> 00:32:08,120 Speaker 1: I'm bored. You know what else do you have? 616 00:32:08,560 --> 00:32:08,920 Speaker 3: All Right? 617 00:32:09,000 --> 00:32:12,640 Speaker 8: Finally, British actress Pamela Saale move. She played Miss Moneypenny 618 00:32:12,640 --> 00:32:16,239 Speaker 8: opposite Sean Connery's James Bond Never Say Die Again. She 619 00:32:16,280 --> 00:32:21,800 Speaker 8: passed away, Pamela Salem. Ok, yeah, she passed away. Connery 620 00:32:21,840 --> 00:32:24,360 Speaker 8: actually wanted her for that role because they had worked 621 00:32:24,400 --> 00:32:27,400 Speaker 8: together before, so this is an interesting story. She was 622 00:32:27,440 --> 00:32:29,840 Speaker 8: eighty years old. She passed away at her home in Florida. 623 00:32:30,440 --> 00:32:33,000 Speaker 8: But that's what she's known for that nineteen eighty three film. 624 00:32:33,200 --> 00:32:35,800 Speaker 1: Yes she you know, I mean there was just so 625 00:32:35,920 --> 00:32:39,160 Speaker 1: much that she did in the part, did yeh? And 626 00:32:39,240 --> 00:32:41,600 Speaker 1: it was the magic of the movie. I happened to 627 00:32:41,600 --> 00:32:45,600 Speaker 1: watch the other night in like Flint or Arman Flint 628 00:32:45,680 --> 00:32:48,959 Speaker 1: James Coburn, which was a parody and you really couldn't 629 00:32:49,000 --> 00:32:52,240 Speaker 1: parody Bond. It was so classic at the time, and 630 00:32:52,520 --> 00:32:55,920 Speaker 1: Miss Money Penny was one of the anchors that everything 631 00:32:57,440 --> 00:33:00,600 Speaker 1: spit around. I mean it was just as simple as Lisa. 632 00:33:00,640 --> 00:33:02,680 Speaker 1: That was really interesting. I learned a lot there. Thank you, 633 00:33:03,280 --> 00:33:06,680 Speaker 1: Lisa Matteo with a look at the newspapers. This is 634 00:33:06,680 --> 00:33:11,760 Speaker 1: the Bloomberg Surveillance Podcast, bringing you the best in economics, finance, investment, 635 00:33:11,960 --> 00:33:15,560 Speaker 1: and international relations. You can also watch the show live 636 00:33:15,800 --> 00:33:20,120 Speaker 1: on YouTube. Visit the Bloomberg Podcast channel on YouTube to 637 00:33:20,280 --> 00:33:23,640 Speaker 1: see the show weekday mornings from seven to ten am 638 00:33:23,680 --> 00:33:27,720 Speaker 1: Eastern from our global headquarters in New York City. Subscribe 639 00:33:27,720 --> 00:33:31,480 Speaker 1: to the podcast on Apple, Spotify, or anywhere else you listen, 640 00:33:31,800 --> 00:33:35,480 Speaker 1: and always on Bloomberg Radio, the Bloomberg Terminal, and the 641 00:33:35,480 --> 00:33:37,040 Speaker 1: Bloomberg Business app.