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Speaker 1: listen and always I'm Bloomberg Radio, the Bloomberg Terminal, and
Speaker 1: the Bloomberg Business App. Critically, the ten year reel yield
Speaker 1: one point ninety seven percent comes in more accommodative to
Speaker 1: one point ninety five percent. We get a first look
Speaker 1: with Ira Jersey of Bloomberg Intelligence. Ira, what's the nuance here?
Speaker 2: So you know, looking at some of these revisions, it
Speaker 2: actually is a little bit of a weaker report if
Speaker 2: you take those revisions into account. So you look at
Speaker 2: the PC deflator month a month plus the core deflator,
Speaker 2: same thing came in at one tenth in December instead
Speaker 2: of a little bit higher. So I think you know,
Speaker 2: in totality just from the headlines that we have right now,
Speaker 2: haven't dug into all the data yet, it's you know,
Speaker 2: as expected to slightly weaker. And you've seen that reaction
Speaker 2: in the bond market. You look at two year yields,
Speaker 2: you've rallied now four basis points since the number came out,
Speaker 2: So we know people less concerned about the inflationary environment
Speaker 2: with this, you know as expected. I think some people
Speaker 2: were worried that it was going to come in a
Speaker 2: little hotter obviously and had positions.
Speaker 1: Yeah, I got a memory of like zero. When we're
Speaker 1: doing the show. It's such a blur, folks. I'm spending
Speaker 1: more time on live chat than listening to Ira. Did
Speaker 1: I think in the last ten minutes, Ira Jersey absolutely
Speaker 1: nailed this call.
Speaker 3: He's pretty good, I don't think.
Speaker 4: I mean, he's got a big reputation comes through every day.
Speaker 4: So some some of the headlines, Tom, the PCE deflator
Speaker 4: came in at zero point three percent, right in line
Speaker 4: with expectations on an annual basis, that's two point four
Speaker 4: percent on the headline, right in line with expectations. The
Speaker 4: PCE core deflator month on month zero point four percent,
Speaker 4: and that's again right in line with expectations you annualize
Speaker 4: that it's two point eight percent is a PCE core deflator, folks,
Speaker 4: And that's kind of what the Federal Reserve looks at.
Speaker 4: So again, if Iraf I'm the Federal Reserve, I just
Speaker 4: kind of kick back in my chair, twitter my thumbs
Speaker 4: and saying I'm doing a pretty good job here.
Speaker 2: Yeah, I think for the Fed, like, there's this whole
Speaker 2: narrative about how quickly inflation is going to come down, right,
Speaker 2: and that's one of the reasons why we've priced out
Speaker 2: a lot of the interest rate cuts that we had earlier.
Speaker 2: And you know this this data just kind of proves
Speaker 2: that point where you know, yes, we're we're under three
Speaker 2: percent in terms of the core PC deflator, but we're
Speaker 2: still a two point eight percent And if it's persistent there,
Speaker 2: then why should the Federal Reserve cut interest rates?
Speaker 5: Right?
Speaker 2: That's going to be a narrative and a question that
Speaker 2: people are going to ask, like, you know, why cut
Speaker 2: interest rates now? Because the economy seems pretty decent, even
Speaker 2: the two hundred and fifteen thousand jobless claims historically speaking,
Speaker 2: that's not particularly high. Of course, you know, we have
Speaker 2: to keep in mind. Something with jobless claims is that
Speaker 2: that's only one side of the equation. That's only the
Speaker 2: number of people being laid off. If nobody is hired,
Speaker 2: you still have eight hundred thousand job losses. That would
Speaker 2: be bad, right, but we know that there are people
Speaker 2: being hired on the other side of that, So people
Speaker 2: you know who lose their jobs are able to find
Speaker 2: jobs very quickly.
Speaker 1: Now, if you're just joining us across this nation, around
Speaker 1: the world, this is Bloomberg Surveillance. Michael bar Lisa Matteo,
Speaker 1: Paul Sweeney, and Tom Keen, we welcome you with key
Speaker 1: economic data. Thank you out on YouTube for your watching.
Speaker 1: You go to YouTube Bloomberg Podcast. We're building that audience out.
Speaker 1: We're stunned. I don't think Google's stunned. They're like, you know, um,
Speaker 1: they're like, you know, book Taylor Swift and then we'll
Speaker 1: pay attention. But thank you out on YouTube for your
Speaker 1: interest in live chat and on Apple cart play as well. Paul.
Speaker 1: Two more questions, Ira Jersey before we go, the mister writing.
Speaker 4: All right, Ira, I mean, so we've got this kind
Speaker 4: of in our pocket here, what's next?
Speaker 3: What do you think the market's going to be looking
Speaker 3: at next.
Speaker 2: Yes, so a couple of data prints that come out
Speaker 2: early in the month. Obviously the Payrolls report next next
Speaker 2: Friday will be key among them. But you know, we're
Speaker 2: looking at some of the survey data, and there's been
Speaker 2: this disconnect between the survey data and some of the
Speaker 2: hard data. So we pointed that out in a note
Speaker 2: that we put out on on Monday, where we were
Speaker 2: you know, we were surprised to see things like the
Speaker 2: ism surveys and some of those, you know, not being
Speaker 2: or pointing to contraction, whereas you look at some of
Speaker 2: the harder data, like the retail sales report, like CPI,
Speaker 2: like the jobs report, and and those seem to show
Speaker 2: that the data is being better and and I would
Speaker 2: overweight the hard data a little bit more than some
Speaker 2: of the survey data. And I think some of the
Speaker 2: reason why why economists across across their forecasts are thinking
Speaker 2: that the economy is going to slow significantly is that
Speaker 2: is that the survey data has been so weak, and
Speaker 2: those those sometimes get weighted maybe a little bit more
Speaker 2: than they should. But the hard data certainly right now
Speaker 2: is not showing any sign of So I mean, just
Speaker 2: look at the personal income number. You know, one percent
Speaker 2: personal income growth is pretty spectacular. That means, you know,
Speaker 2: savings rates up because you only had personal spending up
Speaker 2: zero point two percent. But that's still decent for GDP
Speaker 2: and national income in general.
Speaker 1: Ira John from Coventry says, time shut up, more soccer talk,
Speaker 1: aston Villa Luton. I mean, come on, that's a must
Speaker 1: win for aston Villa.
Speaker 2: Right, yeah, we we have to win. I want to
Speaker 2: stay in the top four. I really you know, the
Speaker 2: Europa Conference League is great, but making the Champions League
Speaker 2: next year I think is key for my for my villains.
Speaker 3: Yeah, for sure.
Speaker 1: Very good, Ira Jersey, thank you so much with your
Speaker 1: aston Villa report, John writing joining us now for Breen Capital. John,
Speaker 1: Before we get to the serious economics of this, I've
Speaker 1: gotta the FA thing is really good. Where a Preston
Speaker 1: north En can actually destroy a Premier League team, Explain
Speaker 1: to our American audience the magic of this tournament that
Speaker 1: you have in the United Kingdom.
Speaker 5: Well, I wish Preston north End I'd destroyed a Premier
Speaker 5: League team, but we lost to Chelsea. But it's a tournament,
Speaker 5: the f A Cup that is open all if you
Speaker 5: will try, essays FA Cup open all the way. You're
Speaker 5: down into a non league football, so you can get
Speaker 5: these great giant killing moments.
Speaker 1: But we didn't see it. But I thought this was
Speaker 1: a joke, and John Ferreau trained me yep to understand
Speaker 1: how magical this is. And you see that within Premier
Speaker 1: League Guston Villa or John's real commitment to what's going
Speaker 1: on Preston North End. Let's get to the topic of
Speaker 1: the moment John writing, which is economics. The market loves it,
Speaker 1: futures red go green. What does Jerome Powell do other
Speaker 1: than say I'm data dependent. I didn't learn anything in
Speaker 1: this report. What a shock. I've got to wait for
Speaker 1: the February jobs report that we'll see soon.
Speaker 5: Well, I think the first thing he does, because you
Speaker 5: talked about that personal income increase of one percent, that's
Speaker 5: not really an indication of what's going on in the
Speaker 5: underlying economy. Wage and salary income was only up four
Speaker 5: tenths of a percent, and you had some very odd numbers.
Speaker 5: Rental income up one point six percent, And there was
Speaker 5: an element of that also in the CPI report, where
Speaker 5: the owner's equivalent rent appeared to have been pushed up
Speaker 5: by a change in the waiting on the single family homes,
Speaker 5: and that's very inside baseball, and he's going to want
Speaker 5: to know what's happening to the trend.
Speaker 1: Now.
Speaker 5: The trend is we have at this point a fairly
Speaker 5: solid economy and inflation that is slowly coming down. So
Speaker 5: why does he want to do anything at this point?
Speaker 5: You can't imagine that financial conditions are tight, given where
Speaker 5: the equity market is, for example, So just sit on
Speaker 5: your hands and enjoy it. And the people who thought
Speaker 5: that the economy would have been destroyed by the FED
Speaker 5: raising interest rates from zero to five and a quarter
Speaker 5: to five and a half percent, that just didn't come back.
Speaker 5: So you know, if it's not broken, don't do anything.
Speaker 1: What you just heard there, folks, it's leap Day. That's
Speaker 1: our inside of February, all twenty nine days. Paul I
Speaker 1: can't say enough about John Writing. And I grew up
Speaker 1: where a central bank was allowed to sit on their hands,
Speaker 1: and with the financial media today where we want action.
Speaker 1: It's like Michael Barr, he's addicted to Detroit Tiger's action.
Speaker 1: The answer is action. What's the FED going to do next?
Speaker 5: This?
Speaker 1: The parlor game is a new era, and to sit
Speaker 1: in your hands. Nobody wants that, and they're wrong. Sit
Speaker 1: in your hands.
Speaker 3: It seems like they're doing okay.
Speaker 4: Hey, John, you know I saw also the data coming
Speaker 4: out today, personal income of one percent, well above expectations,
Speaker 4: Personal spending up to zero point two percent, right aligned
Speaker 4: with expectations. Boy, the consumer strong. Does it surprise you
Speaker 4: how strong the consumer seems to be?
Speaker 5: I think there is some elements of surprise. But bear
Speaker 5: in mind, you have enormous amounts of wealth, given what's
Speaker 5: happened in the equity market and also housing, which is
Speaker 5: an extremely important asset for so many people. You know,
Speaker 5: housing wealth hasn't been declining. House prices didn't really have
Speaker 5: a trench with this move up, which in mortgage rates. Now,
Speaker 5: as I said, the personal income of one percent, I
Speaker 5: would ignore that's that's that's clearly an anomaly in the data.
Speaker 5: I would look at the trend in ways in the
Speaker 5: salary income, and that's rising four to five pence of
Speaker 5: a percent per month, around five percent per year. Inflation
Speaker 5: is running it between two and a half and three
Speaker 5: percent on these data, So that's your increase two and
Speaker 5: a half percent or so, is your increase trend increase
Speaker 5: in real income, and that's pretty good for the consumer.
Speaker 5: Not spectacular, but pretty good. And so until the employment
Speaker 5: market shows signs of cracking, the FED probably isn't too
Speaker 5: worried about the real economy and the job as claims.
Speaker 5: Data which we haven't mentioned we continue, which continue to
Speaker 5: hold near the two hundred thousand level, suggests that companies
Speaker 5: aren't in total making mass layoffs. So the employment market
Speaker 5: is holding, in the jobs markets, holding in job creations,
Speaker 5: holding and will know more next job's number doesn't come
Speaker 5: out tomorrow. It's a delay. We'll no more next Friday.
Speaker 5: But I want to I just want to think, you know,
Speaker 5: the other conversation about cutting rates that you're having with
Speaker 5: IR it's a key point. I keep making it. I
Speaker 5: can't make it enough times. There is an enormous difference
Speaker 5: between cutting interest rates in this environment and easing policy.
Speaker 5: The FED can cut rates two or three times this
Speaker 5: year as inflation comes down, and not ease policy, because
Speaker 5: inflation's coming down, right, and so real interest rates would
Speaker 5: rise in interest rates so just for inflation would rise
Speaker 5: if the FED doesn't cut rig But the problem is
Speaker 5: a FED has not done a good job communicating that,
Speaker 5: and that started with the December FENC press conference.
Speaker 1: Yeah, I mean a run out of time, John, But
Speaker 1: I really take your point on the residual that the
Speaker 1: FED has not communicated the real yield dynamics are I
Speaker 1: think they think it's too complicated for the public. I
Speaker 1: got thirty seconds. Where's our nominal GDP?
Speaker 2: Right now?
Speaker 1: Where's our animal spirit? Are we way above four.
Speaker 5: Percent nominal GDP? You saw the real GDP with three
Speaker 5: point two percent in the fourth quarter. We're probably running
Speaker 5: around five percent and that is in line with those
Speaker 5: ways and salary incomes.
Speaker 1: So yeah, that's an.
Speaker 5: Environment back in the old days of nominal thoughts of
Speaker 5: nominal GDP targeting with three percent real growth which the
Speaker 5: economy can't achieve right now on a sustained basis, and
Speaker 5: two percent inflation. Five percent is about right. There's no
Speaker 5: sign despite the level of race of monetary tightness.
Speaker 1: Gospel. They're from John writing, thank you so much. Francis
Speaker 1: Donald joins us now from manual Life. Francis, if we
Speaker 1: get a decent economy, is the residual the nominal rate
Speaker 1: less dis inflation going to lead to a higher real
Speaker 1: rate that gums up the financial system.
Speaker 6: I feel like that's a third trimester test question for
Speaker 6: which I have to do some side notes in the margin.
Speaker 6: So yes, the issue now is that we are seeing
Speaker 6: less inflation in the system. And if you are real
Speaker 6: rates minded, that is, you look at nominal rates minus inflation,
Speaker 6: then the real rate will naturally climb. And if you
Speaker 6: believe that the real rate is the major rate that
Speaker 6: controls what's happening in the economy, policy is becoming increasingly
Speaker 6: tighter without FED cuts. And this is in some ways
Speaker 6: the most important question, Tom, because at this point there
Speaker 6: doesn't appear to be any evidence that the FED should
Speaker 6: be cutting, and yet they've told us that they will
Speaker 6: begin an easing cycle later this year, and so have
Speaker 6: other central banks. And the question is are they doing
Speaker 6: this to target the real day or do they actually
Speaker 6: think the economy will slow? And this isn't just a
Speaker 6: technical adjustment. I think they're going to try to continue
Speaker 6: this soft landing narrative and say we're real rates folks.
Speaker 6: My take, of course, Tom and Paul, as you know,
Speaker 6: is that the economy will slow materially later this year,
Speaker 6: not yet, but certainly later.
Speaker 4: That's okay. So that's exactly where I wanted to go.
Speaker 4: Francis from reading your research, You've been consistent concerned about
Speaker 4: the US economy. Barish on the US economy preps, as
Speaker 4: you suggest, when you get data today like with like
Speaker 4: personal income, personal spending, when you get the jobs data,
Speaker 4: does that dent your cautiousness about the US economy at all?
Speaker 6: You know, on balance, I am a little bit worried
Speaker 6: about the math. When are the two quarters of negative
Speaker 6: GDP going to arise, because that, of course would be
Speaker 6: what will qualify as a US recession. However, you know,
Speaker 6: there is almost nothing happening right now that didn't happen
Speaker 6: immediately before recessions route history. So much of what we
Speaker 6: hear is how this time is different, and the models
Speaker 6: are broken, and there are certainly things that are different.
Speaker 6: There are elements that are different. But we saw very
Speaker 6: strong growth prior to every recession that's come through. It
Speaker 6: has always been on average two years from rate hikes
Speaker 6: starting to its impact on the economy, which is sometime
Speaker 6: in the next six months. We have always seen a
Speaker 6: surge in soft landing arguments right before, and markets are
Speaker 6: strong prior to recessions. So there is no data now
Speaker 6: that tells me, you know, I need to be less
Speaker 6: concerned that very typical economic relationships, like when things cost more,
Speaker 6: you spend less. I can't throw those out the window,
Speaker 6: even though I can agree that some things are different.
Speaker 6: But yes, the timing of this is of course the
Speaker 6: really big challenge, and the timing is complicated by Washington
Speaker 6: and fiscal spending that's coming through. But I'll just add
Speaker 6: one thing here. The US, of course not in a recession,
Speaker 6: but most of the G seven is near or in
Speaker 6: a technical recession. Japan, UK, Germany and France are very close.
Speaker 6: They're kind of coming off on decimal points. So the
Speaker 6: whole recession or no recession call first of all far
Speaker 6: too binary, but also a US versus rest of the
Speaker 6: world call, And for most investors, I think that trade
Speaker 6: is far more important than are we going to get
Speaker 6: two quarters of negative dUTP? Which yes, I think we will,
Speaker 6: but I think that's most important.
Speaker 4: How unusual relatively, I'm glad you called out kind of
Speaker 4: the US what some people will call economic exceptionalism here
Speaker 4: visa to.
Speaker 3: Be the rest of the world in terms of economy.
Speaker 4: How unusual is that Francis to have I guess the
Speaker 4: US doing one way, going one way, and the rest
Speaker 4: of the world governed another well.
Speaker 6: When I came up in the business, we would often
Speaker 6: be told the US consumer is the most important thing
Speaker 6: globally because the US economy is driven by the US consumer.
Speaker 6: And in this case, there is one peculiar thing happening
Speaker 6: in the cycle that has contributed to US exceptionalism, and
Speaker 6: that is that the manufacturing cycles and the services cycles
Speaker 6: are extremely disconnected. This was the twenty twenty three recession mistake,
Speaker 6: which is that all of the manufacturing indicators suggested we
Speaker 6: were heading into a recession. And historically the lag between
Speaker 6: manufacturing and services is very short, but it hasn't happened.
Speaker 6: So manufacturing exposed economies they're really doing poorly right now,
Speaker 6: and in fact they've done so poorly they might be
Speaker 6: coming out of it. But services based economies like the
Speaker 6: United States have had resilience. What is very different this time,
Speaker 6: and I think this has caught investors off guard, is
Speaker 6: that typically it's the FED or the US that leads
Speaker 6: the easing and hiking cycles. That didn't happen right now now.
Speaker 6: It's actually emerging market. So if you count out the
Speaker 6: amount of central banks that are easing right now, one
Speaker 6: in four global central banks is already cutting rates. The US,
Speaker 6: instead of being at the front of that pack, is
Speaker 6: probably going to be near the end of the pack.
Speaker 6: That's very different this time around.
Speaker 1: Francis, how's a Canadian economy doing? You know, I think
Speaker 1: our basic take as we cover it, way too little
Speaker 1: with manual life out of Montreal and across all of Canada,
Speaker 1: goods producing, the mining cliches in that give us just
Speaker 1: a quick snapshot of how Canada is doing well.
Speaker 6: I'm so happy you asked. We did get Canadian GDP
Speaker 6: this morning, and Canada of birded a recession. They had
Speaker 6: negative GDP last quarter. But Canada is in a little
Speaker 6: bit more trouble than the United States because of how
Speaker 6: exposed to rates it is. And again this is another
Speaker 6: differential between the US and the rest of the world,
Speaker 6: is what is your rate sensitivity. Canada, of course, is
Speaker 6: seeing a more material pull back consumer spending, consumer confidence
Speaker 6: is very different, and the economy basically hasn't grown in
Speaker 6: a year. So there's no soft landing versus hard landing
Speaker 6: discussion in Canada. It's very clearly hard landing and it
Speaker 6: comes down to the rate sensitivity. The US, of course,
Speaker 6: because of its housing market, very differently exposed.
Speaker 1: Francis, Thank you, Francis donald Is with manual Life with
Speaker 1: a greade over there of the data that we saw
Speaker 1: that was market moving, Drew Matis with us, and Drew,
Speaker 1: I'm going to surprise you here, and I understand I
Speaker 1: don't want you to talk about MetLife, pension plans or
Speaker 1: actuarial theory. But Jillian Tann out with an inside baseball
Speaker 1: pension story today how and it's still around Eastman Kodak
Speaker 1: Company is disbanding their team that manages four billion of
Speaker 1: pension in the summary of this complexity is because they're
Speaker 1: making so much money. That's why. So Drew, let's go
Speaker 1: to the wealth effect here of the post pandemic market
Speaker 1: that we're seeing. And I don't mean to talk about MetLife,
Speaker 1: I know that's inappropriate. But are we in a massive
Speaker 1: wealth creation right now, Drew, of price up, yield down,
Speaker 1: and equities up.
Speaker 7: Well, I think we're you know, there's a lot of
Speaker 7: signs that we're still a wash in liquidity. So that
Speaker 7: kind of raises a great question about quantitative tightening and
Speaker 7: how important quantitative tightening is and whether or not we
Speaker 7: should really be you know, the FED should actually really
Speaker 7: be talking about dialing back quantitative tightening.
Speaker 5: You know.
Speaker 7: I my opinion is the balance sheets way too large,
Speaker 7: significantly too large, and that it's too large, and you
Speaker 7: know it's too large because there are no signs of
Speaker 7: stress in funding markets, right, and so that's an abnormal thing.
Speaker 7: What you actually do want during periods of the year
Speaker 7: is for there to be stressed in funding markets. Think
Speaker 7: of it as, you know, getting a fever and then
Speaker 7: realizing that you're sick. If you never get a fever,
Speaker 7: you know, the sickness is going to be the thing
Speaker 7: that surprises you, whereas you want the symptoms to actually
Speaker 7: be there so that market participants and people like the
Speaker 7: FED can understand that there are issues in the market
Speaker 7: and a lot you know, the amount of liquidity where
Speaker 7: a washing is actually disrupting a whole bunch of signals
Speaker 7: that I think is leaving us blind to some risks.
Speaker 4: So, Drew, I'm just looking at the CPE data. I mean,
Speaker 4: I'm sorry, the PC data, Thank you, Tom, the p
Speaker 4: E I E I O exactly. But if I'm the
Speaker 4: Federal Reserve, I look at that data, I don't see
Speaker 4: a need to cut rates here. I mean, do you
Speaker 4: think this better reserve can kind of outlast the market
Speaker 4: here in terms of waiting.
Speaker 7: So I'll go. I'll go somewhere I never thought i'd go.
Speaker 7: And you know, I think Larry Summers is right. I mean,
Speaker 7: there's got to be some chance that they hike rates
Speaker 7: in this environment. And you know, the reason being is simply,
Speaker 7: you know, three point seven percent unemployment rate and inflation
Speaker 7: well above your target. How long do you let that
Speaker 7: persist for? It's one thing, if unemployment is beginning to
Speaker 7: move higher, then you can argue, well, we know inflation
Speaker 7: will gradually come down, or we can have a high
Speaker 7: expectation that will come down. But if if unemployment is
Speaker 7: not moving higher and inflation is just kind of staying
Speaker 7: where it's at, you know, it doesn't make sense to
Speaker 7: be talking about rate cuts in that kind of environment.
Speaker 4: All right, So given that scenario, I mean, I guess
Speaker 4: the other side of that coin, Drew would be, you know,
Speaker 4: a risk of this economy being pushed into recession. But
Speaker 4: it's hard to see any data that would suggest that's
Speaker 4: a risk.
Speaker 7: Well, I mean there is data. There will be data
Speaker 7: comes out on Friday on state level unemployment numbers. We've
Speaker 7: been watching that pretty carefully, because you know, there's been
Speaker 7: this kind of erosion at the state level of unemployment
Speaker 7: relative to kind of where it had been trending, and
Speaker 7: that erosion has been spreading out across states. You know,
Speaker 7: there's now kind of, you know, nineteen states triggering the
Speaker 7: so called Saw rule, which is kind of you know,
Speaker 7: how much of a deterioration of labor market does there
Speaker 7: need to be before there's a recession, And so the
Speaker 7: question is kind of how many states can you have
Speaker 7: that before the national numbers actually begin to reflect any
Speaker 7: of it. You know, I would also point out to
Speaker 7: the FED released charge off rates last week for credit cards,
Speaker 7: and you know, they're at levels we haven't seen since
Speaker 7: two thousand and eight, so you know there are cracks
Speaker 7: in the system. They're just you know, the headline data
Speaker 7: doesn't seem to reflect a lot of kind of the
Speaker 7: underlying data that we're seeing, and that disconnect is unusual
Speaker 7: and makes it makes us a bit nervous, to be honest.
Speaker 1: With stocks trading six minutes into the session, the nastaic
Speaker 1: up eight tenths of a percent eighteeny sixteen on a
Speaker 1: level SPX just below fifty one, twenty four points of
Speaker 1: Dow thirty nine thousand, up ninety two points. We are
Speaker 1: with Drewmatis of that life Drew, what's the correlation right
Speaker 1: now between bond madness and stock madness? Are they linked? Well?
Speaker 7: It is interesting. I mean, spreads in the credit space
Speaker 7: are very very tight, and you know, equities are doing
Speaker 7: really well, and you know, I think the question to
Speaker 7: ask is does that make sense when you know performance
Speaker 7: is being generated by a small subset of companies in
Speaker 7: certain places, but you know the credit market is being
Speaker 7: reflected across all all of you know, all of these companies,
Speaker 7: and so I do think, you know, the expectation that
Speaker 7: there will not be a recession this year is kind
Speaker 7: of growing. If you look at the Bloomberg andsensus numbers,
Speaker 7: they started off at fifty five, them down to fifty
Speaker 7: forty five, they're now at forty. I think people are
Speaker 7: going to be surprised if there's a recession, or at
Speaker 7: least a chunk of the market will be. But that's
Speaker 7: still our baseline call is that we're heading towards the recession,
Speaker 7: that we'll see a deterioration in the labor market, and
Speaker 7: when that deterioration comes, it tends to be fast. And
Speaker 7: you know this is you know, bad things happen quickly.
Speaker 7: Good things happen over long periods of time. And I
Speaker 7: think when this bad thing happens, I think it will
Speaker 7: cut some people off guard.
Speaker 4: Talk to us Mark about the labor market, because that's
Speaker 4: another aspect that I'm sure the FED looks at closely.
Speaker 4: It seems like pretty solid labor market there. We've got
Speaker 4: some consumer spending and consumer income data that looks pretty positive.
Speaker 3: Here. How do you view the consumer it needs to
Speaker 3: be the labor market.
Speaker 7: Well, I mean, if you look at the data today,
Speaker 7: so real disposal income was flat for the month, you know,
Speaker 7: which is not particularly good when you look at what's
Speaker 7: going on with hours worked, So you have everyone's getting
Speaker 7: paid more per hour, but the amount of bringing home
Speaker 7: per week is actually declining for the majority of Americans. Yeah,
Speaker 7: you know, so fifty five percent of workers last month
Speaker 7: in a very strong employment report saw their average weekly
Speaker 7: wage decline. You know that's not the sign of a
Speaker 7: healthy weak market.
Speaker 5: Solf.
Speaker 1: This is Morey Harris one on one. This is what
Speaker 1: Drew Madis has acclaimed for from Ages Ago at UBS.
Speaker 1: I haven't heard that review, Drew, that you just gave
Speaker 1: on over half of America is going away from wage gain?
Speaker 1: Is this just show the skewidness of the economy, the
Speaker 1: bipolar nature we're in, of the halves having and the
Speaker 1: rest of us flat on our back.
Speaker 7: Well, it does, and it's probably worse than that because
Speaker 7: I'm talking about hourly workers there, right, So you know,
Speaker 7: for people with the salary they might be doing better,
Speaker 7: but of course then there's there's that spread there. And
Speaker 7: then the question is, you know, who's who's responsible for
Speaker 7: the increasing level of charge off rates on credit cards?
Speaker 7: Who's responsible for some of the weakness we're seeing elsewhere
Speaker 7: in the economy, And I do think some of it's
Speaker 7: at bifurcation. And it gets back to the wealth effect, right,
Speaker 7: who benefits most from the equity market going up? Who
Speaker 7: benefits more from interest rates being higher on savings and
Speaker 7: investment accounts? Obviously that's people who have wealth to invest,
Speaker 7: and so there is this kind of widening gap, and
Speaker 7: then you throw in some of the fiscal issues facing
Speaker 7: the government, and you know it's you know, maybe it's
Speaker 7: not surprising that confidence levels are not that particularly high.
Speaker 7: They're not back to where they were pre COVID, and
Speaker 7: you would have thought, you know, we'd all be celebrating
Speaker 7: the end of COVID and consumer confidence would be skyrocketing.
Speaker 7: And that's just not what we're seeing.
Speaker 1: Drew. Thanks for the brief, Drew Matis MetLife. There covered
Speaker 1: a lot of territory there. You didly look at the
Speaker 1: front pages around the world. Lisa, you send me the
Speaker 1: list this morning. I was like dazzled. She's looking at
Speaker 1: it like teen newspapers to get this done. What do
Speaker 1: you got?
Speaker 3: All right?
Speaker 8: We're starting with the Post, Paul, you appreciate this. This
Speaker 8: is an exclusive to the New York Post. It says
Speaker 8: Sharry Redstone making a big financial move in order to
Speaker 8: make those debt payments. They're saying that our National Amusements,
Speaker 8: that's the holding company that controls that voting stock in Paramount,
Speaker 8: has sold a chunk of its real estate holdings to
Speaker 8: make a forty million dollar debt payment that's due this week.
Speaker 8: She's really fine to keep control of both those companies.
Speaker 8: I mean, she's she's continued to.
Speaker 1: Set a family million right it is.
Speaker 4: I mean her her father's sumner restone had to. I
Speaker 4: mean what family's done is typically to get liquidity, they've
Speaker 4: pledged their stock for margin loans from various investment banks
Speaker 4: and so on and so forth.
Speaker 1: So their paramount stock to do a real estate transaction.
Speaker 4: Well, in this particular case, they sold real estate to
Speaker 4: make a debt payment. So but in the past, Sumner
Speaker 4: Redstone has had the same thing that. I mean again,
Speaker 4: this is a The market cap is down, the stocks
Speaker 4: down fifty percent over the trailing twelve months.
Speaker 3: I don't know what.
Speaker 1: Okay, but translate this. This is not paramount and all
Speaker 1: the Gloria Hollywood, the CBS television network is beholden to
Speaker 1: somebody having to cover say a real estate transaction.
Speaker 4: Yep, that's the control shareholder of the Redstone family. So
Speaker 4: I was, yeah, this is it's it's it's really a
Speaker 4: concern here. So they need a transaction here, they need
Speaker 4: a sale of all this company.
Speaker 1: Lisa, thank you. I learned something there.
Speaker 3: What's up there? You go? All right?
Speaker 8: New York Times learn about this a new study that
Speaker 8: shows more about the side effects of people who have
Speaker 8: long COVID. I don't know if anyone hears ever having
Speaker 8: long COVID it could lead to cognitive decline, especially that
Speaker 8: ability to remember, to reason to plan things because a
Speaker 8: lot of people at long COVID have been saying they've
Speaker 8: been suffering from this, and this study kind of puts
Speaker 8: that into perspective. People with long COVID they scored slightly
Speaker 8: lower on this cognitive test than people who recovered. The
Speaker 8: good news, though, is that the long COVID patients who
Speaker 8: got better and their health improved, they scored just as
Speaker 8: well as those whose symptoms did not last as long.
Speaker 8: So when you start to get better than your cognitive
Speaker 8: I don't know anyone in.
Speaker 1: The family, the broader family that's been involved here, but
Speaker 1: this is a tangible thing, isn't.
Speaker 8: My sisters had long coat, she still can't taste or
Speaker 8: smell and she got COVID whin Yeah, yeah, So it's
Speaker 8: really some big implications. But this is more of a
Speaker 8: level of, you know, cognitive thinking.
Speaker 5: You know.
Speaker 8: So I have to tell my sister when she says,
Speaker 8: I can't remember up there you go long COVID. It
Speaker 8: could be who knows, but some interesting for people who are.
Speaker 3: So I think we're just starting to learn more about
Speaker 3: all of this stuff.
Speaker 1: Oh yeah, I don't have it in front of me, folks,
Speaker 1: But yesterday, over sixty five they're talking about a new
Speaker 1: booster shot. Oh yes, I haven't read about it yet.
Speaker 1: I'm not up to speed on this, but I'm certain
Speaker 1: that there was an announcement that those of a certain
Speaker 1: fossildom have to look at another. I have not done it.
Speaker 1: I had I think I had three and not four,
Speaker 1: or two and not three.
Speaker 3: I can't remember two, not three.
Speaker 1: Probably I'm one of the ugly lazy ones out there
Speaker 1: and probably not good full disclosure.
Speaker 3: That's all right, just just pitching the game with the
Speaker 3: flu shot. Then we're done.
Speaker 5: You know.
Speaker 8: Oh my husband in there, he got knocked on his
Speaker 8: butt from heaving both.
Speaker 3: His right Okay, yeah, all right, what do you go?
Speaker 8: Okay, you just had talked about the Rangers best record
Speaker 8: in hockey history. I think you were just talking about that.
Speaker 8: So I want to point out something brawling.
Speaker 3: The fight.
Speaker 8: You know that that hockey is known for. It's back.
Speaker 8: You have this twenty one year old rookie on the Rangers,
Speaker 8: Matt Rempy, and they're calling him kind of this throwback
Speaker 8: to the more violent era of the sport. He joined
Speaker 8: the Rangers for the Miners February eighteenth. He's six foot
Speaker 8: seventy feet of Calgary like he's a big guy. But
Speaker 8: he's jumping right into action.
Speaker 3: He's thrown fight.
Speaker 8: He started fighting right away with the Islanders. Tough guy
Speaker 8: Matt Martin's listened to this. His first five games, he
Speaker 8: spent a total of twenty minutes actually playing on the ice,
Speaker 8: and then he racked up thirty two penalty minutes after
Speaker 8: taking part in three separate fights.
Speaker 1: This is important. We go to the surveillance control room, Okay,
Speaker 1: no cameras allowed in a surveillance control room. And you
Speaker 1: know it's our global technical director and Rich is that
Speaker 1: Rich doesn't have a last name. Rich is there? Rich
Speaker 1: is rempy like the next vv Chara. He's six foot.
Speaker 4: Seven, seven feet in skates.
Speaker 1: Charge's a little more skilled. Okay, we got from the Bruins.
Speaker 8: Okay, So do people miss that brawling part of them
Speaker 8: or is it losing it that No?
Speaker 1: I missed the old game desperately, like I do not
Speaker 1: watch New hockey. I call it DEFLECTI I don't. I'm
Speaker 1: completely bored by what they've done with the game.
Speaker 3: Do you think it's I wanted to bring.
Speaker 1: Back the old game, and I've talked to Gary Bettman
Speaker 1: about it, the commissioner, and there's just huge pressure that
Speaker 1: the players don't get injured. There used to be a
Speaker 1: lot of injuries because they go flying down here in
Speaker 1: the old game, they're not. There's there's much more. Her
Speaker 1: cutest skating skills to set up someone with three people
Speaker 1: in front of the net that deflect the puck and
Speaker 1: I'm bored. You know what else do you have?
Speaker 3: All Right?
Speaker 8: Finally, British actress Pamela Saale move. She played Miss Moneypenny
Speaker 8: opposite Sean Connery's James Bond Never Say Die Again. She
Speaker 8: passed away, Pamela Salem. Ok, yeah, she passed away. Connery
Speaker 8: actually wanted her for that role because they had worked
Speaker 8: together before, so this is an interesting story. She was
Speaker 8: eighty years old. She passed away at her home in Florida.
Speaker 8: But that's what she's known for that nineteen eighty three film.
Speaker 1: Yes she you know, I mean there was just so
Speaker 1: much that she did in the part, did yeh? And
Speaker 1: it was the magic of the movie. I happened to
Speaker 1: watch the other night in like Flint or Arman Flint
Speaker 1: James Coburn, which was a parody and you really couldn't
Speaker 1: parody Bond. It was so classic at the time, and
Speaker 1: Miss Money Penny was one of the anchors that everything
Speaker 1: spit around. I mean it was just as simple as Lisa.
Speaker 1: That was really interesting. I learned a lot there. Thank you,
Speaker 1: Lisa Matteo with a look at the newspapers. This is
Speaker 1: the Bloomberg Surveillance Podcast, bringing you the best in economics, finance, investment,
Speaker 1: and international relations. You can also watch the show live
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