1 00:00:05,080 --> 00:00:07,200 Speaker 1: This is the Bloomberg Surveillance Podcast. 2 00:00:07,680 --> 00:00:08,280 Speaker 2: I'm Lisa A. 3 00:00:08,320 --> 00:00:11,640 Speaker 1: Brahmoids along with Tom Keen and Jonathan Ferroll. Join us 4 00:00:11,680 --> 00:00:15,280 Speaker 1: each day for insight from the best in economics, geopolitics, 5 00:00:15,320 --> 00:00:19,480 Speaker 1: finance and investment. Subscribe to Bloomberg Surveillance Undermanned on Apple, 6 00:00:19,600 --> 00:00:22,840 Speaker 1: Spotify and anywhere you get your podcasts, and always on 7 00:00:22,880 --> 00:00:26,400 Speaker 1: Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business app. 8 00:00:26,640 --> 00:00:29,040 Speaker 2: The question is certainly shifted away from how far are 9 00:00:29,080 --> 00:00:31,920 Speaker 2: they going to hike? To how far were they cut? 10 00:00:32,159 --> 00:00:34,400 Speaker 2: Prams were joined just now had a global rate strategy 11 00:00:34,520 --> 00:00:37,320 Speaker 2: at TD Securities Prayer. Let's start with the economic data. 12 00:00:37,440 --> 00:00:40,120 Speaker 2: It's changed since we last spoke. It's started to weaken. 13 00:00:40,520 --> 00:00:43,320 Speaker 2: That process seems to be continuing. Do you expect it 14 00:00:43,600 --> 00:00:45,760 Speaker 2: to accelerate in the coming months? 15 00:00:46,560 --> 00:00:46,960 Speaker 3: We do. 16 00:00:47,080 --> 00:00:49,839 Speaker 4: I mean the Fed still hiking QT is still ongoing, 17 00:00:50,000 --> 00:00:52,599 Speaker 4: long end real rates high, and now you've got the 18 00:00:52,640 --> 00:00:55,640 Speaker 4: bank tightening lending standards. I guess our viewer is this 19 00:00:55,680 --> 00:00:59,080 Speaker 4: is not an idiosyncratic mismanagement of a few banks. This 20 00:00:59,160 --> 00:01:01,880 Speaker 4: is going to have long lasting issues. We think deposits 21 00:01:01,880 --> 00:01:04,880 Speaker 4: continue to fly out of banks into money market funds, 22 00:01:05,600 --> 00:01:07,320 Speaker 4: and so the banks are going to have to cut 23 00:01:07,400 --> 00:01:10,319 Speaker 4: lending standards. You know, even if you ignore the CIRE issue. 24 00:01:10,640 --> 00:01:13,520 Speaker 4: I think as lending slows down, our views is going 25 00:01:13,560 --> 00:01:15,920 Speaker 4: to accelerate. But it's a really tricky time for the 26 00:01:15,959 --> 00:01:18,640 Speaker 4: market because things are slowing. I don't think I can 27 00:01:18,680 --> 00:01:21,319 Speaker 4: point to any data right now and say here's the recession, 28 00:01:21,840 --> 00:01:23,319 Speaker 4: but we think it is going to happen. I think 29 00:01:23,360 --> 00:01:27,199 Speaker 4: that speed of the decline, particularly in high frequency data, 30 00:01:27,240 --> 00:01:29,520 Speaker 4: is what we're looking at. In our view, it is 31 00:01:29,560 --> 00:01:31,480 Speaker 4: going to accelerate into the second half. We see a 32 00:01:31,520 --> 00:01:34,000 Speaker 4: recession in the fourth quarter, But really, I think you 33 00:01:34,040 --> 00:01:36,800 Speaker 4: have to be nimbled because the data is just slowing. 34 00:01:36,880 --> 00:01:40,120 Speaker 4: I think it's not obvious right now, but we do 35 00:01:40,240 --> 00:01:44,520 Speaker 4: think it's all the signs point towards this accelerating into 36 00:01:44,600 --> 00:01:45,200 Speaker 4: the end of the year. 37 00:01:45,319 --> 00:01:47,560 Speaker 1: Preer, I'd love you to take on Alan Roskin's comments 38 00:01:47,560 --> 00:01:50,760 Speaker 1: with respect to the divergence that we see with respect 39 00:01:50,800 --> 00:01:53,160 Speaker 1: and manufacturing and services. He says that this is a 40 00:01:53,200 --> 00:01:55,080 Speaker 1: sign that if the FED pauses, they may have to 41 00:01:55,160 --> 00:01:58,560 Speaker 1: hike again later on as some of the distortions from 42 00:01:58,600 --> 00:02:01,520 Speaker 1: the pandemic era build up of inventory starts to work 43 00:02:01,560 --> 00:02:04,520 Speaker 1: itself through. Do you agree that there actually is a 44 00:02:04,600 --> 00:02:08,359 Speaker 1: risk here signaled by this divergence of inflation that stickier 45 00:02:08,400 --> 00:02:10,560 Speaker 1: and remains much higher than people expect. 46 00:02:11,880 --> 00:02:14,359 Speaker 4: So I agree that inflation is likely to be more sticky. 47 00:02:14,400 --> 00:02:18,119 Speaker 4: We think there are structural factors demographics, you know, on shoring, etc. 48 00:02:19,360 --> 00:02:22,040 Speaker 4: You know, But I would say manufacturing is a most 49 00:02:22,080 --> 00:02:26,520 Speaker 4: cyclical industry. Manufacturing typically slows down before services services have 50 00:02:26,560 --> 00:02:29,280 Speaker 4: been strong because the consumers have a saving buffer and 51 00:02:29,320 --> 00:02:32,440 Speaker 4: monetary policy works with a lad Our view is manufacturing 52 00:02:32,440 --> 00:02:34,760 Speaker 4: is actually a harbinger for the fact that services is 53 00:02:34,760 --> 00:02:37,280 Speaker 4: going to slow down as that savings buffer comes down 54 00:02:37,280 --> 00:02:39,600 Speaker 4: and I can't really max out my credit card and 55 00:02:39,639 --> 00:02:42,600 Speaker 4: I can't get another credit card. I think that's when 56 00:02:42,720 --> 00:02:45,560 Speaker 4: consumer spending starts to slow down. So our view is 57 00:02:45,560 --> 00:02:47,640 Speaker 4: that the FED is going to be torn, really torn 58 00:02:47,720 --> 00:02:51,200 Speaker 4: between inflation north of two percent but the unemployment rates 59 00:02:51,200 --> 00:02:51,960 Speaker 4: starting to rise. 60 00:02:52,160 --> 00:02:52,600 Speaker 5: I think we. 61 00:02:52,639 --> 00:02:55,560 Speaker 4: Don't know their pain threshold. Is it four percent, is 62 00:02:55,600 --> 00:02:57,639 Speaker 4: it four and a half, is it five? I think 63 00:02:57,639 --> 00:02:59,560 Speaker 4: the market's going to grapple with that for the rest 64 00:02:59,560 --> 00:03:02,400 Speaker 4: of the year. But I actually think that services is 65 00:03:02,440 --> 00:03:06,959 Speaker 4: going to slow down, and so you know, I hiking again. 66 00:03:07,120 --> 00:03:09,200 Speaker 4: I think that we should be talking about that in 67 00:03:09,280 --> 00:03:11,239 Speaker 4: twenty twenty five. I think first they're going to have 68 00:03:11,280 --> 00:03:13,520 Speaker 4: to cut rates. They're going to have to take rates 69 00:03:13,520 --> 00:03:16,400 Speaker 4: into accommodative territory, which is not priced and we're still 70 00:03:16,400 --> 00:03:20,200 Speaker 4: pricing in a torough rate above three percent on FED funds. 71 00:03:20,360 --> 00:03:21,920 Speaker 4: If the economy is in a recession at the end 72 00:03:21,960 --> 00:03:23,480 Speaker 4: of this year, I think we'll be talking about how 73 00:03:23,520 --> 00:03:26,640 Speaker 4: low they are going rather than stopping around three percent rare. 74 00:03:26,720 --> 00:03:28,800 Speaker 1: This is pretty incredible at a time, and a lot 75 00:03:28,800 --> 00:03:30,240 Speaker 1: of people don't think that FED is ever going to 76 00:03:30,240 --> 00:03:31,880 Speaker 1: go back to the ultra low rates that we saw 77 00:03:32,000 --> 00:03:35,240 Speaker 1: pre pandemic. Are you saying that zero or even half 78 00:03:35,240 --> 00:03:37,040 Speaker 1: a percent or one percent is very much on the 79 00:03:37,040 --> 00:03:38,240 Speaker 1: table for a FED funds rate? 80 00:03:39,360 --> 00:03:41,480 Speaker 4: So I look at real rates. I think real rates 81 00:03:41,480 --> 00:03:44,120 Speaker 4: should probably be closer to zero negative. You know, if 82 00:03:44,120 --> 00:03:46,440 Speaker 4: inflation is going to be three percent next year or 83 00:03:46,720 --> 00:03:49,520 Speaker 4: heaven FORURID four percent next year, you know, then how 84 00:03:49,640 --> 00:03:51,880 Speaker 4: low can the FED go in terms of nominal rates? 85 00:03:51,920 --> 00:03:55,080 Speaker 4: Perhaps two one, you know? But I do think if 86 00:03:55,200 --> 00:03:57,600 Speaker 4: the if the unemployment rate is rising we see it 87 00:03:57,640 --> 00:03:59,640 Speaker 4: peaking at five and a half next year, is very 88 00:03:59,640 --> 00:04:02,360 Speaker 4: similar to what happened after the savings and loan crisis. 89 00:04:02,520 --> 00:04:05,080 Speaker 4: If you get that much weakening in the labor market, 90 00:04:05,240 --> 00:04:07,440 Speaker 4: the FED has to take real rates negative. So I 91 00:04:07,440 --> 00:04:10,080 Speaker 4: don't know about zero or QE, but can they get 92 00:04:10,120 --> 00:04:12,520 Speaker 4: to two percent on FED funds? I think that would 93 00:04:12,560 --> 00:04:14,360 Speaker 4: be our base case, two two and a half at 94 00:04:14,400 --> 00:04:16,960 Speaker 4: least get rates that low, and the market is not 95 00:04:16,960 --> 00:04:18,479 Speaker 4: pricing that, and so I think we should keep an 96 00:04:18,480 --> 00:04:21,480 Speaker 4: eye on inflation clearly, but those real rates and real 97 00:04:21,560 --> 00:04:25,000 Speaker 4: rates right now are well in restrictive territory. I think 98 00:04:25,040 --> 00:04:27,320 Speaker 4: that's what we'll be watching how much the Fed cuts. 99 00:04:27,320 --> 00:04:29,440 Speaker 4: But right now they're in a bind. I don't think 100 00:04:29,440 --> 00:04:32,119 Speaker 4: they can signal any near term cuts. So our views 101 00:04:32,120 --> 00:04:34,440 Speaker 4: that they start later in terms of rate cuts. They're 102 00:04:34,480 --> 00:04:36,520 Speaker 4: going to be pulled in, as we call it, kicking 103 00:04:36,560 --> 00:04:39,880 Speaker 4: and screaming into rate cuts. But when they start that cutting, 104 00:04:39,920 --> 00:04:41,960 Speaker 4: they're going to be much more aggressive than the market's 105 00:04:42,000 --> 00:04:42,920 Speaker 4: pricing in. 106 00:04:42,680 --> 00:04:45,200 Speaker 2: Prayer just awesome to get your perspective, as always, Prayer 107 00:04:45,200 --> 00:04:52,719 Speaker 2: mesure of TV Securities. Let's talk about Tesla and the 108 00:04:52,760 --> 00:04:56,520 Speaker 2: next narrative around this name. So yesterday price cuts again 109 00:04:56,880 --> 00:05:01,080 Speaker 2: this morning, price high specific ones they've increased prices if 110 00:05:01,080 --> 00:05:04,520 Speaker 2: they're model SNX and those vehicles in the United States 111 00:05:04,560 --> 00:05:06,800 Speaker 2: after the state markdowns that we've seen through the whole 112 00:05:06,839 --> 00:05:10,400 Speaker 2: year so far. Yesterday, the stock at absolutely hammered. This morning, 113 00:05:10,440 --> 00:05:12,839 Speaker 2: the stock looks like this positive by about a half 114 00:05:12,839 --> 00:05:15,840 Speaker 2: of one percent DNA. I've senior equity research analyst of 115 00:05:15,880 --> 00:05:18,360 Speaker 2: web Bush joins us now to talk about it. Dan, 116 00:05:18,400 --> 00:05:22,880 Speaker 2: can you help frame the strategy? Hit yesterday, cuts, this morning, hikes. 117 00:05:22,920 --> 00:05:23,560 Speaker 2: What's happening? 118 00:05:24,800 --> 00:05:27,320 Speaker 6: Look, they're trying to find the yin yang the bounds 119 00:05:27,400 --> 00:05:29,920 Speaker 6: because I think for right now it's about a driving 120 00:05:29,960 --> 00:05:34,680 Speaker 6: demand but also aggressive because of competition that we're seeing global, 121 00:05:34,760 --> 00:05:36,880 Speaker 6: and I think we're going to continue to see this 122 00:05:37,080 --> 00:05:40,280 Speaker 6: some cut, some hikes. I think over the next few 123 00:05:40,320 --> 00:05:42,880 Speaker 6: months you'll starting to see it level off. But I 124 00:05:42,880 --> 00:05:46,000 Speaker 6: think it just speaks to some odjita that investors have 125 00:05:46,120 --> 00:05:49,240 Speaker 6: because of margins, and that's why the stock got crossed yesterday. 126 00:05:49,600 --> 00:05:52,040 Speaker 1: The sort of flip flopping though of messaging in terms 127 00:05:52,080 --> 00:05:54,960 Speaker 1: of cutting or raising prices. What do you make of 128 00:05:55,040 --> 00:05:59,840 Speaker 1: Elon Musk's somewhat I don't know, random approach in terms 129 00:05:59,839 --> 00:06:02,120 Speaker 1: of how he's signaling, at least to the pricing. 130 00:06:03,560 --> 00:06:05,120 Speaker 6: Yeah, at least I think a lot of it is 131 00:06:05,160 --> 00:06:07,960 Speaker 6: inventory driven as well as what they're seeing in demand. 132 00:06:08,040 --> 00:06:10,599 Speaker 6: I think you know, from month to month they could 133 00:06:10,600 --> 00:06:13,480 Speaker 6: tell if ultimately they cut too much or maybe they 134 00:06:13,480 --> 00:06:15,760 Speaker 6: need to cut more, and I think they're trying to 135 00:06:15,760 --> 00:06:18,240 Speaker 6: find that balance. Now when you look at SNX, that's 136 00:06:18,240 --> 00:06:20,800 Speaker 6: a little different than what's a model Y and three. 137 00:06:21,080 --> 00:06:23,000 Speaker 6: I think you're starting to see more of a sort 138 00:06:23,040 --> 00:06:26,320 Speaker 6: of leveling off from a supplied demand mile three mile 139 00:06:26,360 --> 00:06:28,320 Speaker 6: of why. I mean, that's really the focus of the 140 00:06:28,360 --> 00:06:31,000 Speaker 6: street in terms of how many more price cuts, what 141 00:06:31,080 --> 00:06:34,200 Speaker 6: margins look like, because right now they're kind of going 142 00:06:34,240 --> 00:06:36,719 Speaker 6: Game of Throne style in terms of what they're trying 143 00:06:36,720 --> 00:06:40,480 Speaker 6: to do from a pricing perspective. That's great for demand 144 00:06:40,880 --> 00:06:44,520 Speaker 6: from a unit perspective, but obviously margins that continues to 145 00:06:44,520 --> 00:06:45,599 Speaker 6: be the elephant in the room. 146 00:06:45,839 --> 00:06:48,240 Speaker 1: We were speaking with Jullian Emmanuel yesterday and he said 147 00:06:48,240 --> 00:06:50,800 Speaker 1: that Tesla is not just in aduosyncratic story, that it 148 00:06:50,839 --> 00:06:53,719 Speaker 1: is a macro story, as J'ah miss mentioning earlier, because 149 00:06:53,720 --> 00:06:56,359 Speaker 1: it does signal this need to cut prices and a 150 00:06:56,440 --> 00:06:59,080 Speaker 1: disinflationary force. How much are you expecting to see that 151 00:06:59,480 --> 00:07:01,880 Speaker 1: as a th bleeding through some of the tech earnings 152 00:07:01,880 --> 00:07:03,000 Speaker 1: that we start getting next week. 153 00:07:04,279 --> 00:07:06,640 Speaker 6: Look, I do think it is a little separate from 154 00:07:06,680 --> 00:07:08,400 Speaker 6: what we're going to see next week, and maybe even 155 00:07:08,400 --> 00:07:10,600 Speaker 6: if I go back next call a few weeks. I 156 00:07:10,640 --> 00:07:14,400 Speaker 6: mean Apple, we see iPhone demand that continues to be 157 00:07:14,400 --> 00:07:17,600 Speaker 6: pretty resilient in the storm. I think cloud. When you 158 00:07:17,640 --> 00:07:20,360 Speaker 6: look in Microsoft, what we're going to see out of Amazon, 159 00:07:20,480 --> 00:07:23,400 Speaker 6: Google and others, I think slight beats. But I think 160 00:07:23,480 --> 00:07:26,520 Speaker 6: overall we're starting to see some stabilization relative to what 161 00:07:26,520 --> 00:07:28,280 Speaker 6: we saw in the summer. Jen you, at least from 162 00:07:28,280 --> 00:07:31,440 Speaker 6: an enterprise spent, I think in terms of tech stocks, 163 00:07:31,440 --> 00:07:33,400 Speaker 6: in terms of going to earnings, it's a green light 164 00:07:33,480 --> 00:07:36,360 Speaker 6: to continue to in tech. I think this earning season 165 00:07:36,520 --> 00:07:39,320 Speaker 6: is something I think more investors are ultimately going to 166 00:07:39,360 --> 00:07:43,520 Speaker 6: start to then dive back into tech rather than fearing it. 167 00:07:43,600 --> 00:07:47,120 Speaker 6: In terms of where I believe are fundamentals starting to stabilize. 168 00:07:46,760 --> 00:07:49,520 Speaker 2: Dan dive back in. Talk to me about yet today, 169 00:07:49,560 --> 00:07:51,200 Speaker 2: What do you think people have been doing already? 170 00:07:51,640 --> 00:07:57,480 Speaker 6: They've ripped, no doubt, But I think from an institutional perspective, 171 00:07:57,760 --> 00:08:00,880 Speaker 6: still many hate the rally. May I think on the 172 00:08:00,960 --> 00:08:05,960 Speaker 6: sidelines ultimately sort of bending against tech, and which is argue, 173 00:08:06,200 --> 00:08:08,400 Speaker 6: you know, we can see tech stocks up another ten 174 00:08:08,400 --> 00:08:11,360 Speaker 6: percent plus for the rest of the year because you 175 00:08:11,360 --> 00:08:14,320 Speaker 6: look what's happened in terms of numbers that are starting 176 00:08:14,320 --> 00:08:17,880 Speaker 6: to stabilize. They already ripped the band aid off on guidance. 177 00:08:18,280 --> 00:08:20,520 Speaker 6: I think big tech specifically when I look at fang names, 178 00:08:20,520 --> 00:08:24,040 Speaker 6: logan names like Apple, Google, Amazon, and I think these 179 00:08:24,040 --> 00:08:26,560 Speaker 6: are stocks that could be fifteen to twenty percent for 180 00:08:26,600 --> 00:08:28,720 Speaker 6: the rest of the year. You know, red by Apple. 181 00:08:28,760 --> 00:08:30,480 Speaker 2: Well, you mentioned the cloud story. Can we just build 182 00:08:30,520 --> 00:08:32,439 Speaker 2: on that a little bit more? There was obviously massive 183 00:08:32,480 --> 00:08:35,240 Speaker 2: pull forward in demand for a range of things across 184 00:08:35,240 --> 00:08:38,440 Speaker 2: this whole spectrum through the pandemic. Dan, I just wonder 185 00:08:38,520 --> 00:08:40,360 Speaker 2: how much the cloud story has become much more of 186 00:08:40,360 --> 00:08:43,760 Speaker 2: a cyclical issue now for some of these companies. What's 187 00:08:43,760 --> 00:08:44,840 Speaker 2: your feel on that, Dan. 188 00:08:45,800 --> 00:08:48,200 Speaker 6: But I think we'll see with Microsoft and with what 189 00:08:48,320 --> 00:08:50,640 Speaker 6: comes out of REDMINU on Tuesday. I think the big 190 00:08:50,720 --> 00:08:54,760 Speaker 6: issue is that a lot of companies, you know, budgets 191 00:08:54,760 --> 00:08:58,200 Speaker 6: were not set, but during the they're halfway through massive 192 00:08:58,240 --> 00:09:01,400 Speaker 6: cloud deployments, so now you're starting to see more and 193 00:09:01,480 --> 00:09:04,280 Speaker 6: more only forty five percent of workloads during the cloud, 194 00:09:04,640 --> 00:09:07,439 Speaker 6: so that I believe goes to seventy percent next two years. 195 00:09:07,520 --> 00:09:10,719 Speaker 6: And I think that's why names like Microsoft continues to 196 00:09:10,760 --> 00:09:14,440 Speaker 6: sort see share gains versus the likes of Amazon, and 197 00:09:14,480 --> 00:09:17,359 Speaker 6: I think Google is another one that continues to see success. 198 00:09:17,520 --> 00:09:20,040 Speaker 6: But I think ultimately, I mean, these are rock Gibraltar 199 00:09:20,080 --> 00:09:23,160 Speaker 6: sectors in terms of where I've seen cloud cybersecurity, which 200 00:09:23,160 --> 00:09:25,120 Speaker 6: is why we're bullish going into earnings. 201 00:09:25,480 --> 00:09:28,200 Speaker 1: What about disappointments. We were speaking earlier with lu Kawa 202 00:09:28,320 --> 00:09:29,880 Speaker 1: and he said that if there is some kind of 203 00:09:29,920 --> 00:09:33,160 Speaker 1: earning disappointment, it will be punished a proportionately because his 204 00:09:33,280 --> 00:09:36,200 Speaker 1: sense is people are waiting for the cash behemoths to 205 00:09:36,200 --> 00:09:37,880 Speaker 1: continue to be cash behemoths. 206 00:09:38,160 --> 00:09:42,920 Speaker 6: Do you agree, Oh, no doubt. And also never underestimate 207 00:09:43,080 --> 00:09:46,520 Speaker 6: just how bad imagined team could be or overestimate how good. 208 00:09:46,600 --> 00:09:50,680 Speaker 6: That's why you have tacticians like Cook and Nadella and 209 00:09:50,760 --> 00:09:52,880 Speaker 6: others on one side. But you're going to see, especially 210 00:09:52,920 --> 00:09:57,040 Speaker 6: in smid Caplan, I mean it's almost a fork in 211 00:09:57,080 --> 00:09:59,400 Speaker 6: the road where you're going to see weekends play out. 212 00:09:59,400 --> 00:10:02,560 Speaker 6: I think there is still some fraud, and I think 213 00:10:02,720 --> 00:10:05,000 Speaker 6: you know this is ultimately really going to be I think, 214 00:10:05,000 --> 00:10:08,439 Speaker 6: a defining earning season for winners and losers. But I 215 00:10:08,480 --> 00:10:11,760 Speaker 6: believe I almost viewed as a stock pickers market, which 216 00:10:11,800 --> 00:10:14,679 Speaker 6: is why I really enjoyed this year in terms of 217 00:10:14,679 --> 00:10:17,520 Speaker 6: just the way texts playing out. You know, especially as 218 00:10:17,520 --> 00:10:18,400 Speaker 6: we go into earning. 219 00:10:18,200 --> 00:10:20,520 Speaker 2: Season, Dan, you've got Leaster excited. There was a glimmer 220 00:10:20,520 --> 00:10:23,319 Speaker 2: of bearishness there. Can you build on that? What do 221 00:10:23,400 --> 00:10:24,160 Speaker 2: you perish about? 222 00:10:24,240 --> 00:10:24,400 Speaker 5: Dan? 223 00:10:25,840 --> 00:10:28,480 Speaker 6: Oh, it's not. What I'm saying is this is not 224 00:10:28,640 --> 00:10:33,240 Speaker 6: a Roses and Rainbow and Champagne macra. So ultimately you're 225 00:10:33,280 --> 00:10:36,640 Speaker 6: going to see weekends fall by the wayside. Competition is 226 00:10:36,679 --> 00:10:39,600 Speaker 6: going to continue to increase, But ultimately that's why I 227 00:10:39,640 --> 00:10:41,959 Speaker 6: think you got to pick the right stocks. It's not 228 00:10:42,080 --> 00:10:44,960 Speaker 6: necessarily a basket approach, and I think that's what we're going 229 00:10:45,000 --> 00:10:47,520 Speaker 6: to see playoff continued during earning season. But I think 230 00:10:47,520 --> 00:10:50,160 Speaker 6: when it comes to large cap tach, when it comes 231 00:10:50,160 --> 00:10:54,400 Speaker 6: to high quality tech cybersecurity cloud, I just continue view 232 00:10:54,440 --> 00:10:56,080 Speaker 6: that as a green light going into earnings. 233 00:10:56,200 --> 00:10:58,000 Speaker 2: Okay, then I was a wet bush down, not doubt 234 00:10:58,000 --> 00:11:00,360 Speaker 2: with touch base of the nice company were going to 235 00:11:00,400 --> 00:11:01,439 Speaker 2: get those endings, thank. 236 00:11:01,280 --> 00:11:13,640 Speaker 1: CUSA gil doubt of joining us right now ahead of 237 00:11:13,720 --> 00:11:16,920 Speaker 1: US economic research. It retissan to Macro, and I am 238 00:11:17,040 --> 00:11:20,400 Speaker 1: curious about your view after hearing all of the pessimistic 239 00:11:21,080 --> 00:11:24,640 Speaker 1: prognostications about why we should remain bearish, while you're coming 240 00:11:24,640 --> 00:11:27,079 Speaker 1: on now to tell us we are all completely misguided 241 00:11:27,320 --> 00:11:28,880 Speaker 1: and we need to be a little bit more optimistic. 242 00:11:30,480 --> 00:11:33,360 Speaker 3: Well, good to see you, Lisa, Happy Friday, Happy Friday. 243 00:11:35,000 --> 00:11:37,520 Speaker 3: You know. Look, I mean I think what's this business 244 00:11:37,559 --> 00:11:41,440 Speaker 3: is about is about what the consensus is pricing in 245 00:11:42,360 --> 00:11:45,160 Speaker 3: and what the likely outcome is going to be. Uh, 246 00:11:45,200 --> 00:11:48,760 Speaker 3: that's how that's how we distinct, you know, create some 247 00:11:48,840 --> 00:11:54,760 Speaker 3: distinction here. And remember the consensus is basically priced for, 248 00:11:55,240 --> 00:11:58,319 Speaker 3: you know, essentially sudden stop dynamics in the economy. I mean, 249 00:11:58,559 --> 00:12:02,480 Speaker 3: people are calling for recession starting, you know, sometime this week. 250 00:12:02,520 --> 00:12:05,400 Speaker 3: It feels like, and I got to tell you that's 251 00:12:05,520 --> 00:12:07,600 Speaker 3: just not in the data. I mean, in my view, 252 00:12:07,640 --> 00:12:11,400 Speaker 3: the time to have been concerned about recession was last year. 253 00:12:12,040 --> 00:12:13,640 Speaker 3: I mean, it's not to say that we're not worried 254 00:12:13,640 --> 00:12:16,040 Speaker 3: about things now, but it would have been more prudent 255 00:12:16,120 --> 00:12:18,440 Speaker 3: to be even more worried last year. You had energy 256 00:12:18,440 --> 00:12:22,360 Speaker 3: prices spiking, the global economy was going down the tubes, right, 257 00:12:22,400 --> 00:12:24,080 Speaker 3: I mean, people are worried about Europe, whether they're going 258 00:12:24,120 --> 00:12:25,760 Speaker 3: to be able to keep the heat and the lights on. 259 00:12:26,360 --> 00:12:30,400 Speaker 3: China was slowing down. In the US, we had the 260 00:12:30,440 --> 00:12:36,120 Speaker 3: housing market weakening, fiscal tightening, right, the you know, and 261 00:12:36,440 --> 00:12:38,960 Speaker 3: all the rest of it. So think about each of 262 00:12:39,000 --> 00:12:42,480 Speaker 3: these things in turn. Right, fiscal policy, that's a tail 263 00:12:42,600 --> 00:12:46,080 Speaker 3: and for the economy now there is no fiscal drag. 264 00:12:48,040 --> 00:12:52,440 Speaker 3: The government's the tail went for growth housing. Take a 265 00:12:52,440 --> 00:12:55,680 Speaker 3: look at a chart of homebuilding stocks. Anybody have that 266 00:12:55,720 --> 00:12:57,520 Speaker 3: on their Bengo card for twenty twenty three. 267 00:12:57,640 --> 00:12:59,120 Speaker 1: I think that people missed a lot of things. 268 00:12:59,120 --> 00:13:01,000 Speaker 5: Globalis that came out this morning. 269 00:13:01,040 --> 00:13:03,600 Speaker 3: Now, admittedly the manufacturing piece of it wasn't as strong, 270 00:13:03,679 --> 00:13:06,360 Speaker 3: but you know, it's pretty clear that global growth in 271 00:13:06,400 --> 00:13:10,040 Speaker 3: the aggregate is stronger so far this year than it 272 00:13:10,200 --> 00:13:13,960 Speaker 3: was before. So if the consensus is talking about, you know, 273 00:13:14,040 --> 00:13:16,960 Speaker 3: some sort of cliff dive moment in the second quarter, 274 00:13:17,880 --> 00:13:20,600 Speaker 3: that's not happening. It doesn't mean that you don't pencil 275 00:13:20,600 --> 00:13:23,400 Speaker 3: in a recept I mean, I do think that if 276 00:13:23,440 --> 00:13:25,040 Speaker 3: you want to be honest with yourself, you have to 277 00:13:25,120 --> 00:13:26,959 Speaker 3: kind of keep this in the baseline outlook for the 278 00:13:27,000 --> 00:13:29,080 Speaker 3: next eighteen months. But the question is whether it's going 279 00:13:29,080 --> 00:13:32,200 Speaker 3: to happen imminently, because that's what the consensus is expecting, 280 00:13:32,920 --> 00:13:34,960 Speaker 3: and I don't really see it. 281 00:13:35,120 --> 00:13:36,200 Speaker 5: In the data, Neil. 282 00:13:36,240 --> 00:13:38,920 Speaker 1: There are two aspects of this. There's growth and there's inflation. 283 00:13:39,240 --> 00:13:41,480 Speaker 1: And what we have seen is that growth has slowed, 284 00:13:42,080 --> 00:13:44,000 Speaker 1: but it has not cratered in the same kind of way. 285 00:13:44,040 --> 00:13:46,400 Speaker 1: To highlight what you're talking about, and in certain sectors 286 00:13:46,480 --> 00:13:50,240 Speaker 1: is actually accelerated and inflation seems to be coming down. 287 00:13:50,440 --> 00:13:52,600 Speaker 1: Do you believe that this can continue, that you will 288 00:13:52,640 --> 00:13:55,560 Speaker 1: see the sort of disinflation at the same time that 289 00:13:55,600 --> 00:13:59,080 Speaker 1: there still is a lot of momentum underputting the growth. 290 00:13:59,360 --> 00:14:02,560 Speaker 3: Oh wow, Lisa Bramwitz, growth in some parts of the 291 00:14:02,600 --> 00:14:05,240 Speaker 3: economy accelerated. Man, that must have tasted like vitterger coming 292 00:14:05,240 --> 00:14:05,760 Speaker 3: out of your mouth. 293 00:14:05,840 --> 00:14:08,440 Speaker 1: Well, I've actually bought airplane tickets, so I understand that 294 00:14:08,520 --> 00:14:11,160 Speaker 1: in some areas there is complete capacity carry out. 295 00:14:11,360 --> 00:14:16,120 Speaker 3: Look, I think to me, it actually feels a little bit. 296 00:14:18,000 --> 00:14:19,800 Speaker 3: I mean, I might get crucified for saying this, but 297 00:14:19,880 --> 00:14:21,840 Speaker 3: it does feel a little bit. It does feel a 298 00:14:21,840 --> 00:14:24,760 Speaker 3: little bit like a soft landing. I mean, at the 299 00:14:24,840 --> 00:14:27,520 Speaker 3: margin the data is consistent with soft landing. I mean, 300 00:14:27,560 --> 00:14:29,800 Speaker 3: think about what you just said. Inflation is slowing down 301 00:14:29,880 --> 00:14:33,320 Speaker 3: activities holding up right. I mean you look at some 302 00:14:33,400 --> 00:14:35,840 Speaker 3: of what the early reads are for auto sales in April. 303 00:14:36,880 --> 00:14:40,760 Speaker 3: They're planting to sequential acceleration Lisa for for auto sales 304 00:14:40,800 --> 00:14:43,880 Speaker 3: in April despite this financing costs and the rest of it. 305 00:14:43,920 --> 00:14:47,080 Speaker 3: And the builders are doing the same thing sequential improvement 306 00:14:47,120 --> 00:14:48,040 Speaker 3: and activity in April. 307 00:14:48,080 --> 00:14:49,560 Speaker 5: So remember everyone. 308 00:14:49,240 --> 00:14:51,720 Speaker 3: Was talking about how housing is a leading indicator and 309 00:14:51,960 --> 00:14:54,960 Speaker 3: because housing was collapsing in twenty twenty two, that was 310 00:14:55,000 --> 00:14:58,160 Speaker 3: going to spell the death of the economy in early 311 00:14:58,200 --> 00:15:01,200 Speaker 3: twenty twenty three. Well, now housing's rea accelerating and it's 312 00:15:01,240 --> 00:15:05,600 Speaker 3: highly likely that single family residential construction picks up over 313 00:15:05,640 --> 00:15:06,560 Speaker 3: the next few months. 314 00:15:06,720 --> 00:15:08,200 Speaker 5: Well, so I. 315 00:15:08,160 --> 00:15:09,720 Speaker 1: Hear what you're saying, Neil, and I think that a 316 00:15:09,720 --> 00:15:11,520 Speaker 1: lot of people would agree with you, which is a 317 00:15:11,520 --> 00:15:13,520 Speaker 1: reason why you've seen the rallies year to date. That 318 00:15:13,560 --> 00:15:15,400 Speaker 1: has surprised a lot of people, even in some of 319 00:15:15,440 --> 00:15:17,360 Speaker 1: the areas that people had left for dead or said 320 00:15:17,360 --> 00:15:20,080 Speaker 1: that they were going to underperform. Now, however, a lot 321 00:15:20,120 --> 00:15:21,760 Speaker 1: of people are saying just wait for it, because the 322 00:15:21,760 --> 00:15:24,080 Speaker 1: tightening credit conditions are going to really play out, and 323 00:15:24,120 --> 00:15:26,120 Speaker 1: we're starting to see it around the margins with loan 324 00:15:26,160 --> 00:15:29,720 Speaker 1: originations and credit loss provisions. How do you push back 325 00:15:29,760 --> 00:15:31,720 Speaker 1: against that and say, look, it's just not going to happen. 326 00:15:31,760 --> 00:15:33,520 Speaker 1: It's not that big of a drag. This happens as 327 00:15:33,520 --> 00:15:36,280 Speaker 1: a feature of every single tightening cycle that we've ever had. 328 00:15:37,960 --> 00:15:39,080 Speaker 5: Yeah, I mean it's not good. 329 00:15:39,120 --> 00:15:41,520 Speaker 3: The question is whether that's enough to push the economy 330 00:15:41,520 --> 00:15:44,000 Speaker 3: into a below potential growth state that pushes up the 331 00:15:44,040 --> 00:15:44,840 Speaker 3: unemployment rate. 332 00:15:44,920 --> 00:15:48,840 Speaker 5: And I think we're not there yet. I mean, if 333 00:15:48,840 --> 00:15:50,320 Speaker 5: you and you know, speaking to the. 334 00:15:50,240 --> 00:15:54,200 Speaker 3: Point about credit, keep in mind, the housing market's working, 335 00:15:54,320 --> 00:15:57,360 Speaker 3: that must mean that credit is flowing to households. But 336 00:15:57,400 --> 00:15:59,320 Speaker 3: more broadly, if you take a look at loan and 337 00:15:59,400 --> 00:16:03,720 Speaker 3: leases long growth, you know, bank credit relative to GDP, 338 00:16:04,560 --> 00:16:07,760 Speaker 3: it's basically been flat since twenty sixteen twenty seventeen, So 339 00:16:07,880 --> 00:16:11,640 Speaker 3: perhaps the economy is not nearly as credit sensitive as 340 00:16:11,960 --> 00:16:15,080 Speaker 3: as is being made out to be. You know, what 341 00:16:15,160 --> 00:16:18,160 Speaker 3: I see is the reason why the economy has been 342 00:16:18,160 --> 00:16:21,320 Speaker 3: holding up is because is because consumers have been doing okay. 343 00:16:21,360 --> 00:16:24,120 Speaker 3: And the reason they're doing okay is because disposable incomes 344 00:16:24,120 --> 00:16:26,720 Speaker 3: have been holding up, and that's going to continue because 345 00:16:26,720 --> 00:16:29,640 Speaker 3: lower natural gas prices will bleed into household utilities. 346 00:16:30,080 --> 00:16:31,440 Speaker 5: And you know the fact that. 347 00:16:33,000 --> 00:16:36,080 Speaker 3: You know, wholesale gasoline futures have been declining, that's probably 348 00:16:36,080 --> 00:16:38,560 Speaker 3: going to show up in lower pump prices in coming weeks. 349 00:16:39,120 --> 00:16:40,520 Speaker 3: So we're not going to get as much of a 350 00:16:41,760 --> 00:16:45,880 Speaker 3: food and energy and frankly food tax as we've seen, 351 00:16:45,920 --> 00:16:48,000 Speaker 3: and that's going to push up disposable income, which in 352 00:16:48,000 --> 00:16:52,200 Speaker 3: turn will support consumer spending. So I think that the 353 00:16:52,600 --> 00:16:56,200 Speaker 3: credit sensitivity of the economy, you know, it certainly affects 354 00:16:56,200 --> 00:16:57,920 Speaker 3: some sectors. I mean, I don't want to, you know, 355 00:16:58,160 --> 00:17:01,320 Speaker 3: sort of sound like everything's great here, but you know, 356 00:17:01,560 --> 00:17:04,639 Speaker 3: my sense is that disposable income growth will remain relatively 357 00:17:04,920 --> 00:17:07,280 Speaker 3: stable and probably continue climbing in. 358 00:17:07,200 --> 00:17:07,840 Speaker 5: The second quarter. 359 00:17:08,000 --> 00:17:08,840 Speaker 1: Yeah, you said that you. 360 00:17:08,840 --> 00:17:11,000 Speaker 5: Think that's and I think that's an important story. 361 00:17:11,040 --> 00:17:13,280 Speaker 1: You said that you think that you'll get crucified by 362 00:17:13,320 --> 00:17:16,240 Speaker 1: saying that this is looking a lot like a soft landing. 363 00:17:16,720 --> 00:17:18,920 Speaker 1: I would actually beg to differ. I think that probably 364 00:17:18,960 --> 00:17:21,960 Speaker 1: people will say yes finally saying the quiet part out loud, 365 00:17:21,960 --> 00:17:24,119 Speaker 1: because the market agrees with you. It seems like the 366 00:17:24,119 --> 00:17:26,560 Speaker 1: equity markets are pricing in a soft landing right now 367 00:17:27,040 --> 00:17:28,840 Speaker 1: in a lot of sectors. Do you disagree, I mean, 368 00:17:28,880 --> 00:17:31,800 Speaker 1: how much is this already priced in? Not necessarily the 369 00:17:31,800 --> 00:17:33,640 Speaker 1: recession calls that people keep waiting for. 370 00:17:35,840 --> 00:17:37,879 Speaker 3: I think there's more room to go. I mean, I 371 00:17:37,920 --> 00:17:41,879 Speaker 3: do think that you probably continue to see you know, 372 00:17:41,960 --> 00:17:44,960 Speaker 3: growth holding up. You know, I think you start to 373 00:17:45,000 --> 00:17:48,320 Speaker 3: see parts of the inflation picture continue to continue to 374 00:17:48,320 --> 00:17:52,439 Speaker 3: improve somewhat. You know, we did see shelter come in 375 00:17:52,520 --> 00:17:55,960 Speaker 3: quite a bit in March, and remember that's very inertial, 376 00:17:55,960 --> 00:17:58,280 Speaker 3: it's sticky, so it's not going to start to reaccelerate 377 00:17:59,080 --> 00:18:02,000 Speaker 3: right away. So I think that that's an important development. 378 00:18:02,080 --> 00:18:04,719 Speaker 3: And you know, when I think about the FED, I mean, 379 00:18:04,760 --> 00:18:06,879 Speaker 3: they're they're closer to the end of this than not, 380 00:18:07,080 --> 00:18:09,480 Speaker 3: so it's unlikely that they're going to begin ratcheting up 381 00:18:09,520 --> 00:18:14,120 Speaker 3: hikes immediately as well. So I do think you can 382 00:18:14,160 --> 00:18:17,800 Speaker 3: make a case for equities here. You know, over the 383 00:18:17,880 --> 00:18:20,160 Speaker 3: over the next you know, a couple of quarters for 384 00:18:20,160 --> 00:18:22,720 Speaker 3: for equities to rally, and we continue to see a 385 00:18:22,760 --> 00:18:25,520 Speaker 3: tailwind as well from from what's going on globally that 386 00:18:25,560 --> 00:18:28,159 Speaker 3: will continue to pressure take pressure I think off the 387 00:18:28,280 --> 00:18:32,200 Speaker 3: dollar which should provide earning support for a lot of 388 00:18:32,240 --> 00:18:35,800 Speaker 3: the the cyclical names that do a lot of business overseas. 389 00:18:36,640 --> 00:18:38,920 Speaker 1: How much do you see tech participating in this, especially 390 00:18:38,920 --> 00:18:40,880 Speaker 1: with the earnings coming up next week? Are they still 391 00:18:40,920 --> 00:18:44,000 Speaker 1: going to be the leaders at a time when there 392 00:18:44,000 --> 00:18:46,880 Speaker 1: are a lot of areas that could perhaps recover if 393 00:18:47,040 --> 00:18:48,640 Speaker 1: what you're saying comes to. 394 00:18:48,600 --> 00:18:52,280 Speaker 3: Pass, well, if the FED is backing off, which I 395 00:18:52,320 --> 00:18:56,919 Speaker 3: think is likely at some point this summer, you know 396 00:18:57,040 --> 00:18:59,560 Speaker 3: that should that should provide some talent for for for 397 00:18:59,600 --> 00:19:01,960 Speaker 3: technologlogy stocks given their rate sensitivity. 398 00:19:02,840 --> 00:19:04,680 Speaker 1: How do you push back against the idea that we're 399 00:19:04,720 --> 00:19:08,359 Speaker 1: getting right now? Sentiment really shifting and we saw that 400 00:19:08,440 --> 00:19:10,800 Speaker 1: in the leading economic indicators, We saw that in the 401 00:19:10,800 --> 00:19:12,960 Speaker 1: FED Beaige book. We saw that when it comes to 402 00:19:13,840 --> 00:19:16,879 Speaker 1: just marginal softening in the labor market around the edges, 403 00:19:16,960 --> 00:19:19,080 Speaker 1: and yes, you could say it's just marginal. On the 404 00:19:19,119 --> 00:19:23,119 Speaker 1: other hand, it's starting, it's starting in a more meaningful way. Now, 405 00:19:23,400 --> 00:19:25,800 Speaker 1: how do you say that is just par for the course, 406 00:19:25,920 --> 00:19:28,440 Speaker 1: it's controlled, it's not going to pick up more meaningfully. 407 00:19:28,880 --> 00:19:30,399 Speaker 3: Well, I mean it's something that you have to be 408 00:19:30,440 --> 00:19:33,320 Speaker 3: concerned about. I mean, to me, the risk is that 409 00:19:33,480 --> 00:19:36,960 Speaker 3: you know, you get this sort of you know, snowballing 410 00:19:37,000 --> 00:19:40,360 Speaker 3: effect in unemployment. But you know, I would just say 411 00:19:40,359 --> 00:19:43,080 Speaker 3: that they're offsets. It's very rare. I mean, people are 412 00:19:43,200 --> 00:19:45,879 Speaker 3: pointing to continuing claims. Obviously they're up I think, like 413 00:19:45,960 --> 00:19:49,480 Speaker 3: what forty percent from the lows. But you've also typically 414 00:19:49,520 --> 00:19:51,960 Speaker 3: when that's happened, that's always been a recession. But then again, 415 00:19:52,000 --> 00:19:54,880 Speaker 3: what about this recovery has been typical as that's happened, 416 00:19:55,520 --> 00:19:59,000 Speaker 3: You've seen prime age employment rates rise to cycle highs. 417 00:19:59,160 --> 00:20:03,640 Speaker 3: That's never happened. You know, typically, when continuing claims rise 418 00:20:03,680 --> 00:20:06,000 Speaker 3: this much off the low, the prime age employment rate 419 00:20:06,080 --> 00:20:08,760 Speaker 3: is already declining. It's off about, you know, anywhere from 420 00:20:08,760 --> 00:20:11,520 Speaker 3: three tens to half a percentage point from its peak. 421 00:20:11,520 --> 00:20:13,240 Speaker 5: From its cycle peak. Hasn't happened. 422 00:20:13,320 --> 00:20:16,040 Speaker 3: Right now, it's still going up to new highs. Consumer 423 00:20:16,080 --> 00:20:18,560 Speaker 3: attitudes about the labor market it's still very very strong. 424 00:20:18,600 --> 00:20:20,399 Speaker 3: So I think it's really hard to know, x Anti, 425 00:20:21,000 --> 00:20:23,119 Speaker 3: and I think people should be a little bit more shows, 426 00:20:23,240 --> 00:20:25,600 Speaker 3: a little bit more like humility about this. It's very 427 00:20:25,600 --> 00:20:29,159 Speaker 3: difficult to know, x Anti, whether you know this is 428 00:20:29,440 --> 00:20:33,520 Speaker 3: the start of something truly nefarious or just a normalization 429 00:20:34,000 --> 00:20:38,359 Speaker 3: of labor market conditions from unsustainably hot level hot rates 430 00:20:39,440 --> 00:20:42,040 Speaker 3: last year. My sense is that there are offsets least. 431 00:20:42,080 --> 00:20:43,840 Speaker 3: I mean, you have global growth getting better, you have 432 00:20:43,960 --> 00:20:47,520 Speaker 3: US housing, you have fiscal tailwind. Now, you're going to 433 00:20:47,600 --> 00:20:51,359 Speaker 3: have real income still holding up, and you have the 434 00:20:51,400 --> 00:20:56,840 Speaker 3: FED backing off, you know sometime after, like probably in June. 435 00:20:57,119 --> 00:21:00,600 Speaker 3: And I think the risk is is that you know 436 00:21:00,720 --> 00:21:03,320 Speaker 3: the I mean, they may have to come in later. 437 00:21:03,400 --> 00:21:05,720 Speaker 3: That to me still is the risk. But I think 438 00:21:05,760 --> 00:21:09,919 Speaker 3: you can make a case here for risk assets. You know, 439 00:21:09,960 --> 00:21:12,119 Speaker 3: over the next couple of quarters, when you get this 440 00:21:12,160 --> 00:21:16,480 Speaker 3: sort of confluence of slowing inflation, growth, holding up, FED 441 00:21:16,520 --> 00:21:17,280 Speaker 3: backing off. 442 00:21:17,359 --> 00:21:20,239 Speaker 1: I guess that before we have to end, I do 443 00:21:20,280 --> 00:21:22,400 Speaker 1: want to just raise this one issue. And I think 444 00:21:22,400 --> 00:21:24,399 Speaker 1: you're right about the humility point, and I feel it, 445 00:21:24,440 --> 00:21:26,679 Speaker 1: and I think broadly I hear it all the time. 446 00:21:27,280 --> 00:21:30,880 Speaker 1: I wonder about the fact that suddenly deposits aren't free 447 00:21:30,880 --> 00:21:33,919 Speaker 1: anymore and the longer term implications of that in the 448 00:21:33,960 --> 00:21:36,399 Speaker 1: main credit impulse of this economy, which is a smaller 449 00:21:36,440 --> 00:21:41,040 Speaker 1: regional banks. How do you factor that into your calculus 450 00:21:41,080 --> 00:21:43,840 Speaker 1: at a time when that has to be before it happens. 451 00:21:43,880 --> 00:21:47,119 Speaker 1: It cannot be with any material data just yet. 452 00:21:49,080 --> 00:21:50,920 Speaker 3: No, I mean, I look, I take that point. There 453 00:21:50,920 --> 00:21:55,280 Speaker 3: are there are certainly areas of concern within the banking system. 454 00:21:55,359 --> 00:21:57,280 Speaker 3: I mean, I think obviously people have been talking a 455 00:21:57,320 --> 00:22:00,919 Speaker 3: lot about commercial real estate, but and the how the 456 00:22:00,920 --> 00:22:04,240 Speaker 3: regional banks drive credit to that sector of the economy. 457 00:22:04,280 --> 00:22:07,200 Speaker 3: But it's also important to remember that, you know, when 458 00:22:07,200 --> 00:22:11,680 Speaker 3: we think about structures investment in GDP LISA, that has 459 00:22:11,880 --> 00:22:14,320 Speaker 3: rarely been as low a share of GDP as it 460 00:22:14,400 --> 00:22:19,040 Speaker 3: is right now. Right, So even if you're talking about 461 00:22:19,280 --> 00:22:23,800 Speaker 3: a twenty percent drop in structor's investment annualized, yeah, that 462 00:22:23,960 --> 00:22:26,959 Speaker 3: probably gets you maybe half a point off of GDP growth. 463 00:22:28,160 --> 00:22:32,560 Speaker 3: So you know, as I say, I mean, there are issues. 464 00:22:32,560 --> 00:22:36,959 Speaker 3: And clearly, you know, residential lending I think continues and 465 00:22:36,960 --> 00:22:39,080 Speaker 3: that's a big piece of it too. Right, So household 466 00:22:39,080 --> 00:22:41,800 Speaker 3: they're still getting credit when they want it. But I 467 00:22:41,840 --> 00:22:43,840 Speaker 3: take your point about what's going on with the small business. 468 00:22:43,880 --> 00:22:47,760 Speaker 3: The question is, you know, there are areas of you know, 469 00:22:47,840 --> 00:22:50,360 Speaker 3: of the economy that are weak, that look very bad, right, 470 00:22:50,400 --> 00:22:53,159 Speaker 3: I mean, no one's denying that. The question is is 471 00:22:53,200 --> 00:22:57,560 Speaker 3: that enough to push the economy into a below potential 472 00:22:57,560 --> 00:22:58,080 Speaker 3: growth state? 473 00:22:58,160 --> 00:22:59,720 Speaker 5: Remember, that's what's required. 474 00:23:00,040 --> 00:23:02,160 Speaker 3: Yeah right, I mean, if Beed believes we need below 475 00:23:02,160 --> 00:23:06,200 Speaker 3: potential growth for a period of time to basically quell 476 00:23:06,280 --> 00:23:07,240 Speaker 3: the inflation. 477 00:23:06,840 --> 00:23:08,800 Speaker 5: Issue, we're getting it. 478 00:23:09,119 --> 00:23:11,280 Speaker 1: I don't see it yet, Neil Dota Renissans Macro. 479 00:23:22,240 --> 00:23:24,000 Speaker 2: Let's talk about the banks right now. We can do 480 00:23:24,040 --> 00:23:28,720 Speaker 2: that with Maro Rodriguez Veladadas, the managing director principal at 481 00:23:28,880 --> 00:23:31,560 Speaker 2: MRV Associates. Mayra Wander for to catch up with you. 482 00:23:31,840 --> 00:23:33,480 Speaker 2: I really want your thoughts on the region ors, the 483 00:23:33,480 --> 00:23:35,320 Speaker 2: small banks first, and maybe we can shift back to 484 00:23:35,359 --> 00:23:37,600 Speaker 2: some of the bigger lenders in just a moment. Lisa 485 00:23:37,680 --> 00:23:40,359 Speaker 2: jumped all over it yesterday, the net interest margins, the 486 00:23:40,400 --> 00:23:43,160 Speaker 2: profitability story. Do you think it's too early to see 487 00:23:43,160 --> 00:23:44,959 Speaker 2: some of the pain, to see how this is going 488 00:23:45,000 --> 00:23:47,000 Speaker 2: to evolve over the next coming quarters. 489 00:23:48,040 --> 00:23:48,919 Speaker 5: Yes, definitely. 490 00:23:49,040 --> 00:23:52,120 Speaker 7: We have to remember that the banking turmoil started really 491 00:23:52,160 --> 00:23:54,600 Speaker 7: the second and the third week of March, and by 492 00:23:54,640 --> 00:23:58,479 Speaker 7: that point, the vast majority of regional bank strategies, all 493 00:23:58,520 --> 00:24:03,119 Speaker 7: their transactions were well underway, and they certainly have benefited 494 00:24:03,320 --> 00:24:07,080 Speaker 7: from high interest rates. They have definitely been charging more 495 00:24:07,480 --> 00:24:10,239 Speaker 7: on a variety of loans and credit facilities, but they 496 00:24:10,280 --> 00:24:14,720 Speaker 7: haven't been paying more as much over on the deposit side, 497 00:24:14,760 --> 00:24:18,560 Speaker 7: and so that net interest margin really benefited them. However, 498 00:24:18,600 --> 00:24:21,320 Speaker 7: I do see a few trouble spots in the horizon, 499 00:24:21,920 --> 00:24:26,439 Speaker 7: like what well, you definitely see just about every single 500 00:24:26,480 --> 00:24:31,520 Speaker 7: regional bank increasing their provisions for credit losses, and some 501 00:24:31,560 --> 00:24:35,119 Speaker 7: of them had even released them a couple of quarters ago, 502 00:24:35,160 --> 00:24:38,040 Speaker 7: and so that's certainly a big sign that all of 503 00:24:38,080 --> 00:24:41,760 Speaker 7: these banks are preparing, at worst for the beginning of 504 00:24:41,760 --> 00:24:46,040 Speaker 7: a recession or at best for a softening of the economy. 505 00:24:46,320 --> 00:24:49,040 Speaker 7: You also, of course, had a lot of banks had 506 00:24:49,080 --> 00:24:52,600 Speaker 7: a decrease in deposits, and for regional banks this is 507 00:24:52,680 --> 00:24:58,400 Speaker 7: incredibly important. Anywhere from seventy five to eighty five percent 508 00:24:58,440 --> 00:25:02,600 Speaker 7: of their funding come from deposits. They're not diversified like 509 00:25:02,600 --> 00:25:06,119 Speaker 7: the globally systemically important banks, so it's very important to 510 00:25:06,200 --> 00:25:08,880 Speaker 7: watch not just the level of their deposits, but the 511 00:25:08,920 --> 00:25:12,119 Speaker 7: diversity of the deposits. And that can be really hard 512 00:25:12,160 --> 00:25:15,280 Speaker 7: for some of the really small regional banks because by 513 00:25:15,359 --> 00:25:19,840 Speaker 7: definition they're concentrated in the communities and regions that they serve. 514 00:25:20,359 --> 00:25:21,680 Speaker 6: There's a lot there to unpack. 515 00:25:21,840 --> 00:25:23,879 Speaker 1: I want to stick on the loan loss provisions there 516 00:25:23,880 --> 00:25:25,760 Speaker 1: are two ways to read this. One is that they're 517 00:25:25,760 --> 00:25:29,120 Speaker 1: continuing to lend more aggressively and just provisioning for more 518 00:25:29,119 --> 00:25:32,879 Speaker 1: potential losses, or they are withdrawing some of their lending 519 00:25:32,960 --> 00:25:35,400 Speaker 1: prowess on the heels of some of the deposit outflows 520 00:25:35,440 --> 00:25:38,720 Speaker 1: as well as the concern about loan losses that keep 521 00:25:38,760 --> 00:25:41,280 Speaker 1: taking up. Which is it, you. 522 00:25:41,240 --> 00:25:45,840 Speaker 7: Know, Unfortunately the answer may not be so satisfactory to investors. 523 00:25:45,840 --> 00:25:46,680 Speaker 6: It's a bit of both. 524 00:25:46,920 --> 00:25:50,600 Speaker 7: There are a lot of signals in the economy, in 525 00:25:50,640 --> 00:25:53,919 Speaker 7: the market that we really do need to pay attention to. 526 00:25:54,040 --> 00:25:57,480 Speaker 7: We've got a lot of tech companies, consulting companies, retail 527 00:25:57,560 --> 00:26:00,880 Speaker 7: media that all little by the little have been announcing layoffs. 528 00:26:00,920 --> 00:26:02,880 Speaker 7: So how are these people eventually going to pay their 529 00:26:02,880 --> 00:26:07,040 Speaker 7: mortgages and their other credit facilities. You have American companies 530 00:26:07,200 --> 00:26:10,880 Speaker 7: at their most embedded level in history. Many of those 531 00:26:10,960 --> 00:26:16,160 Speaker 7: loans are leverage, which means six seven times debt over ibidah. 532 00:26:16,280 --> 00:26:19,919 Speaker 7: The Page Book just this week already stated that some 533 00:26:19,960 --> 00:26:23,720 Speaker 7: of the banks had already been tightening their credit conditions. 534 00:26:23,760 --> 00:26:27,440 Speaker 7: So a lot of these banks are actually exhibiting good 535 00:26:27,640 --> 00:26:31,800 Speaker 7: risk management when they increase their provisions. And I'm not 536 00:26:31,920 --> 00:26:36,280 Speaker 7: seeing big rises and lending you have trouble areas over 537 00:26:36,800 --> 00:26:41,760 Speaker 7: in the auto loan sector. You're already seeing high housing 538 00:26:41,840 --> 00:26:44,280 Speaker 7: prices in the West. So there's a lot there to 539 00:26:44,359 --> 00:26:48,320 Speaker 7: remind banks they need to remember the religion of good 540 00:26:48,400 --> 00:26:49,120 Speaker 7: risk management. 541 00:26:49,320 --> 00:26:51,680 Speaker 1: Maray, yesterday at four thirty pm, we got some data 542 00:26:51,680 --> 00:26:55,000 Speaker 1: from the FED on the latest emergency borrowings from that 543 00:26:55,200 --> 00:26:57,879 Speaker 1: discount window, as well as a new program. I almost 544 00:26:57,960 --> 00:27:00,879 Speaker 1: laughed at the way that it was interpreted. Optimists said 545 00:27:00,920 --> 00:27:03,760 Speaker 1: the show's stability. The pestmist said, the shows that people 546 00:27:03,800 --> 00:27:06,240 Speaker 1: are still drawing down at some of these emergency facilities. 547 00:27:06,280 --> 00:27:08,080 Speaker 1: How would you read the fact that we said the 548 00:27:08,119 --> 00:27:11,320 Speaker 1: first increase in usage of some of these operations in 549 00:27:11,359 --> 00:27:11,959 Speaker 1: five weeks. 550 00:27:12,960 --> 00:27:14,160 Speaker 5: Yeah, that's a great point. 551 00:27:14,240 --> 00:27:17,440 Speaker 7: You really the banks should no longer be barring if 552 00:27:17,440 --> 00:27:20,120 Speaker 7: they're iss stable and as liquid as they say they are. 553 00:27:20,160 --> 00:27:24,119 Speaker 7: And this is one of the reasons why legislators and 554 00:27:24,160 --> 00:27:29,080 Speaker 7: regulators really should be demanding that banks be more transparent. 555 00:27:29,160 --> 00:27:31,760 Speaker 7: By the time that you and I get some of 556 00:27:31,800 --> 00:27:35,880 Speaker 7: their liquidity metrics, such as the liquidity coverage ratio or 557 00:27:36,040 --> 00:27:40,160 Speaker 7: deposits as a percent of total funding, it's already too late. 558 00:27:40,240 --> 00:27:44,320 Speaker 7: That information is old. But any of these facilities from 559 00:27:44,359 --> 00:27:47,159 Speaker 7: the FED is not the way that banks in a 560 00:27:47,200 --> 00:27:50,280 Speaker 7: capitalist system should be running. They should be depending on 561 00:27:50,320 --> 00:27:52,600 Speaker 7: their own cash flow, and that's why most of them 562 00:27:52,840 --> 00:27:55,160 Speaker 7: need to be much better managed than they currently are. 563 00:27:55,760 --> 00:27:58,560 Speaker 2: Just to finish on this word, crisis, would you call 564 00:27:58,640 --> 00:28:00,960 Speaker 2: it a crisis? This time last week? Muhammadel Erin was 565 00:28:01,000 --> 00:28:02,680 Speaker 2: with us and he said, this is not a crisis. 566 00:28:02,720 --> 00:28:05,840 Speaker 2: Brian moynihan, Bank for America, not a crisis. What's in 567 00:28:05,880 --> 00:28:08,040 Speaker 2: a word? Why is that word so important? 568 00:28:09,040 --> 00:28:12,560 Speaker 7: It is incredibly important because unfortunately it starts to really 569 00:28:12,640 --> 00:28:18,280 Speaker 7: be overused. This is bank turmoil caused by serious lack 570 00:28:18,960 --> 00:28:23,639 Speaker 7: of good risk management. And there's really no excuse for 571 00:28:23,680 --> 00:28:28,320 Speaker 7: that Silicon Valley bank signature. All of those banks needed 572 00:28:28,359 --> 00:28:30,680 Speaker 7: to have been back on the basics a long time 573 00:28:30,720 --> 00:28:34,359 Speaker 7: ago of managing their interest rate, risk, managing their liquidity. 574 00:28:34,480 --> 00:28:38,080 Speaker 7: We have to be very careful not to over use words. 575 00:28:38,200 --> 00:28:42,200 Speaker 7: This is banking turmoil and it is not a crisis. 576 00:28:42,280 --> 00:28:46,320 Speaker 7: A crisis is when we're really talking about massive interconnections 577 00:28:46,600 --> 00:28:50,040 Speaker 7: with banks and the real economy as well, of course, 578 00:28:50,200 --> 00:28:53,560 Speaker 7: as corporations. Two thousand and seven, two thousand and nine 579 00:28:54,040 --> 00:28:57,200 Speaker 7: was a crisis. This is not a crisis, and I'm 580 00:28:57,240 --> 00:28:59,680 Speaker 7: really hoping that it doesn't go that way. 581 00:29:00,000 --> 00:29:03,960 Speaker 2: Preciate your perspective as always, Maira Rodriguez Viadarus there of 582 00:29:04,160 --> 00:29:11,400 Speaker 2: MRFI associates. Let's get back to something we might know 583 00:29:11,480 --> 00:29:14,120 Speaker 2: something about with Dantann about iv Oliver wire meant Dan 584 00:29:14,200 --> 00:29:16,360 Speaker 2: joined us now, Dan, wonderful to catch out with you, buddy. 585 00:29:16,360 --> 00:29:18,040 Speaker 2: I want to build on the reporting from our colleague 586 00:29:18,080 --> 00:29:21,440 Speaker 2: Jenny Leonard from earlier on this morning that President Biden 587 00:29:21,880 --> 00:29:24,120 Speaker 2: aims to sign an executive order in the coming weeks 588 00:29:24,160 --> 00:29:26,720 Speaker 2: there will limit investment in key parts of China's economy 589 00:29:27,000 --> 00:29:29,560 Speaker 2: by American businesses. Dan, where'd you see this one going? 590 00:29:30,760 --> 00:29:34,239 Speaker 8: Yeah? No, thanks John. This outbound sythius, as it's been 591 00:29:34,320 --> 00:29:37,959 Speaker 8: labeled for the last few months, is really the culmination 592 00:29:38,480 --> 00:29:41,320 Speaker 8: of a focus of the Biged administration for the last 593 00:29:41,320 --> 00:29:43,440 Speaker 8: two years. And I actually spent some time on the 594 00:29:43,480 --> 00:29:46,000 Speaker 8: Hill a few weeks ago at some Senior House GOP 595 00:29:46,200 --> 00:29:48,880 Speaker 8: members that have been looking at this as well. I mean, 596 00:29:48,960 --> 00:29:52,080 Speaker 8: this is actually something that one is very bipartisan issue 597 00:29:52,080 --> 00:29:53,960 Speaker 8: in the US. I think also you're going to begin 598 00:29:54,000 --> 00:29:56,520 Speaker 8: to see more clarity as there has been a lot 599 00:29:56,560 --> 00:30:00,520 Speaker 8: of investor concern on what does this actually look like, 600 00:30:00,560 --> 00:30:03,800 Speaker 8: because we've seen in the past the US government attempted 601 00:30:03,840 --> 00:30:07,400 Speaker 8: to regulate certain or limit investment in certain Chinese companies 602 00:30:07,440 --> 00:30:09,960 Speaker 8: and it had a pretty adverse impact on threats to 603 00:30:10,040 --> 00:30:14,040 Speaker 8: dlist and other sorts of challenges. But really, this executive 604 00:30:14,080 --> 00:30:18,840 Speaker 8: order is going to cover specific investment of semiconductor companies, 605 00:30:18,960 --> 00:30:22,720 Speaker 8: artificial intelligence, and quantum computing companies in China, with a 606 00:30:22,760 --> 00:30:26,760 Speaker 8: focus on US firms playing an active role in management. 607 00:30:26,880 --> 00:30:30,760 Speaker 8: So venture and private equity firms are really under the 608 00:30:30,760 --> 00:30:33,840 Speaker 8: magnifying glass where they're largely managing and not just taking 609 00:30:33,840 --> 00:30:37,640 Speaker 8: a passive investment in some of these specific sectors, not 610 00:30:37,800 --> 00:30:39,240 Speaker 8: anything necessarily more. 611 00:30:39,120 --> 00:30:41,680 Speaker 2: Broadly, Dan, forgive me for asking you to read the 612 00:30:41,720 --> 00:30:44,320 Speaker 2: political tea leaves, but Jenny pointing out that this push 613 00:30:44,360 --> 00:30:47,320 Speaker 2: will take place at this May summit for the G 614 00:30:47,480 --> 00:30:50,320 Speaker 2: seven in Japan, do you think the allies will be 615 00:30:50,360 --> 00:30:52,640 Speaker 2: on board with this push coming from the US side. 616 00:30:53,520 --> 00:30:55,880 Speaker 8: Yeah, It's something I've been looking at as well. I'm 617 00:30:55,920 --> 00:30:59,080 Speaker 8: not sure how much Allied support really exists for this 618 00:30:59,240 --> 00:31:02,320 Speaker 8: package only has a chance of any sort of success 619 00:31:02,360 --> 00:31:05,600 Speaker 8: with multilateral support. Otherwise you're just going to essentially open 620 00:31:05,680 --> 00:31:08,760 Speaker 8: up opportunities for other G seven plus allies to take 621 00:31:08,800 --> 00:31:13,160 Speaker 8: the investments that American businesses are essentially restricted or investors 622 00:31:13,160 --> 00:31:16,600 Speaker 8: are restricted from. You know, I think the US administration 623 00:31:16,680 --> 00:31:18,680 Speaker 8: has had a pretty good track record of beginning to 624 00:31:18,840 --> 00:31:21,880 Speaker 8: chin up support for these type of issues. I think 625 00:31:21,920 --> 00:31:23,840 Speaker 8: a lot of the challenge has been the confusion of 626 00:31:23,960 --> 00:31:26,600 Speaker 8: what is this And again, it's really been labeled as 627 00:31:26,640 --> 00:31:29,720 Speaker 8: outbound scifius for the last few months, which takes on 628 00:31:29,800 --> 00:31:32,520 Speaker 8: a much broader connotation than what we're talking about here, 629 00:31:32,560 --> 00:31:36,320 Speaker 8: which is a narrower swath of Chinese firms, and what 630 00:31:36,400 --> 00:31:39,920 Speaker 8: type of investment restrictions would really be placed on US companies. 631 00:31:40,720 --> 00:31:43,640 Speaker 1: Dan, you're at the IMF meetings last week. What's your 632 00:31:43,640 --> 00:31:47,560 Speaker 1: read on how where policymakers are on what kind of 633 00:31:47,640 --> 00:31:50,160 Speaker 1: hit economically there would be if there was some sort 634 00:31:50,160 --> 00:31:54,320 Speaker 1: of true fragmentation or breakdown in the relationship between China 635 00:31:54,520 --> 00:31:55,200 Speaker 1: and the US. 636 00:31:55,720 --> 00:31:58,200 Speaker 8: Firstly, I can't believe that was a week ago. But 637 00:31:58,240 --> 00:32:01,400 Speaker 8: that's a second issue. I think there are a lot 638 00:32:01,480 --> 00:32:04,239 Speaker 8: of a lot of concerns, and this is where this 639 00:32:04,400 --> 00:32:08,360 Speaker 8: Biden administration team in Treasury is very careful about looking 640 00:32:08,400 --> 00:32:14,000 Speaker 8: for unint unanticipated consequences, especially when doing dealing with anything 641 00:32:14,080 --> 00:32:17,400 Speaker 8: that has broader market impact. I think there's a huge 642 00:32:17,440 --> 00:32:24,840 Speaker 8: focus on not disrupting the China US China Western efforts 643 00:32:24,840 --> 00:32:27,760 Speaker 8: from a business standpoint, because there's still a substantial amount 644 00:32:27,800 --> 00:32:30,480 Speaker 8: of trade. I think the decoupling threats have been somewhat 645 00:32:30,520 --> 00:32:34,840 Speaker 8: overblown by the numbers, and Bloomberg certainly covered this as well. 646 00:32:35,120 --> 00:32:38,080 Speaker 8: But I think there's a huge recognition that you can't 647 00:32:38,200 --> 00:32:41,320 Speaker 8: only play around with this relationship too much before it 648 00:32:41,320 --> 00:32:44,560 Speaker 8: has too many adverts consequences. I mean, who can forget 649 00:32:44,600 --> 00:32:47,080 Speaker 8: at the end of the Trump administration one exchange that 650 00:32:47,280 --> 00:32:51,480 Speaker 8: was delisting then not delisting, then delisting certain Chinese telecom 651 00:32:51,600 --> 00:32:54,520 Speaker 8: companies that created some pretty massive confusion for a number 652 00:32:54,560 --> 00:32:55,040 Speaker 8: of weeks. 653 00:32:55,520 --> 00:32:57,520 Speaker 1: Well, but Dan just sort of spind us forward. Then 654 00:32:57,600 --> 00:33:00,840 Speaker 1: how comprehensive can some of these restricts be that the 655 00:33:00,840 --> 00:33:03,560 Speaker 1: Biden administration plans to put out there. How much meat 656 00:33:03,600 --> 00:33:06,440 Speaker 1: can there be behind what Jennet Yellen had to say 657 00:33:06,720 --> 00:33:11,480 Speaker 1: last week about the potential to put national security over 658 00:33:11,560 --> 00:33:12,480 Speaker 1: economic interest. 659 00:33:13,080 --> 00:33:16,600 Speaker 8: Yeah, it's a balancing act. I mean, there's obviously national 660 00:33:16,640 --> 00:33:21,160 Speaker 8: security concerns, there's it protection concerns. You know, it's hard 661 00:33:21,200 --> 00:33:24,240 Speaker 8: to say that they don't have broader economic protections for 662 00:33:24,320 --> 00:33:27,080 Speaker 8: the US economy as well. I mean, really, this is 663 00:33:27,120 --> 00:33:30,640 Speaker 8: the investment restriction equivalent of some of the bands that 664 00:33:30,640 --> 00:33:32,600 Speaker 8: the US government has put in place as well as 665 00:33:32,600 --> 00:33:35,960 Speaker 8: certain other European nations on the ability for China to 666 00:33:36,040 --> 00:33:39,280 Speaker 8: import certain high tech components they need to potentially catch 667 00:33:39,360 --> 00:33:41,560 Speaker 8: up in some of their technology manufacturing. 668 00:33:42,120 --> 00:33:42,280 Speaker 4: Done. 669 00:33:42,360 --> 00:33:44,880 Speaker 2: Just a final word on enforcement. We mentioned your name 670 00:33:44,880 --> 00:33:47,120 Speaker 2: a little bit earlier on this morning, just with regards 671 00:33:47,400 --> 00:33:50,520 Speaker 2: to foreign exchange in the US dollar dam a de 672 00:33:50,640 --> 00:33:53,840 Speaker 2: emphasis around the US dollar, a push for that coming 673 00:33:53,880 --> 00:33:57,800 Speaker 2: from China other countries as well, just based implied by 674 00:33:58,000 --> 00:34:00,800 Speaker 2: some of the actions agreements we've seen develop over the 675 00:34:00,840 --> 00:34:02,720 Speaker 2: last month. Dan, where'd you see that one heading? 676 00:34:03,480 --> 00:34:06,480 Speaker 8: Yeah, I've had this discussion with your Sileiah Mosen a 677 00:34:06,600 --> 00:34:08,919 Speaker 8: number of times over the last five years. Look, we've 678 00:34:08,960 --> 00:34:12,080 Speaker 8: heard the d dollarization threat for the last fifteen years, 679 00:34:12,040 --> 00:34:14,560 Speaker 8: since the US has tried to force other countries to 680 00:34:14,600 --> 00:34:18,640 Speaker 8: certainly choose in foreign policy decisions. I'm not sure that 681 00:34:18,760 --> 00:34:21,000 Speaker 8: the world is going to move off the dollar quite 682 00:34:21,000 --> 00:34:24,160 Speaker 8: so fast. And while we have seen larger countries like 683 00:34:24,239 --> 00:34:27,560 Speaker 8: Brazil kind of push for this, India look to settle 684 00:34:27,600 --> 00:34:31,279 Speaker 8: certain transactions outside of the dollar. I still don't know 685 00:34:31,360 --> 00:34:35,120 Speaker 8: if the dollar dominance is going to erode quite so quickly, Dan, 686 00:34:35,239 --> 00:34:35,640 Speaker 8: I think. 687 00:34:35,520 --> 00:34:37,600 Speaker 2: A lot of people listening to this right now might 688 00:34:37,680 --> 00:34:40,200 Speaker 2: agree with you. Downtown abound of voldable Iman. 689 00:34:40,480 --> 00:34:43,920 Speaker 1: Subscribe to the Bloomberg Surveillance podcast on Apple, Spotify, and 690 00:34:44,000 --> 00:34:47,400 Speaker 1: anywhere else you get your podcasts. Listen live every weekday 691 00:34:47,440 --> 00:34:50,000 Speaker 1: starting at seven am Eastern, on Bloomberg dot Com, the 692 00:34:50,080 --> 00:34:53,840 Speaker 1: iHeartRadio app tune In, and the Bloomberg Business app. You 693 00:34:53,880 --> 00:34:57,200 Speaker 1: can watch us live on Bloomberg Television and always on 694 00:34:57,239 --> 00:35:00,640 Speaker 1: the Bloomberg terminal. Thanks for listening. I'm Lisa Ramoids and 695 00:35:00,760 --> 00:35:01,640 Speaker 1: this is Bloomberg 696 00:35:12,080 --> 00:35:12,440 Speaker 7: MHM.