WEBVTT - Single Best Idea with Tom Keene: Marc Champion & Michael Purves

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>A single best idea and the worst idea was basically

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<v Speaker 2>all of us worked all weekend across the three day

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<v Speaker 2>We tried to do things here as we all do,

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<v Speaker 2>but we're all glued to our phones doing the social media,

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<v Speaker 2>reading the zeitgeist. If you would major shout out William

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<v Speaker 2>Rhodes's iconic at City Group of Brown University, his Brown

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<v Speaker 2>University Bill Rhods writing up a wonderful essay in Project

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<v Speaker 2>Syndicate on the moment at hand for Europe. He is

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<v Speaker 2>of ninety one years old. We celebrate the Bill Rhodes

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<v Speaker 2>published this weekend. Mark Champion published as well. Really can't

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<v Speaker 2>say enough about his work definitive in Europe with a

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<v Speaker 2>truly wonderful Transatlantic perspective, Iconic at the Wall Street Journal

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<v Speaker 2>and now writing for Bloomberg Opinion. Champion on the moment

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<v Speaker 2>at hand.

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<v Speaker 1>This is going to be incredibly hard for Europe. They

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<v Speaker 1>all understand they need to hang together. The problem is

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<v Speaker 1>finding that common denominator that allows them to hang together.

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<v Speaker 1>And so long as you know, this is what Mattz

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<v Speaker 1>has been hinting that he's going to be saying to

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<v Speaker 1>Maccai is that you need to ease off a little

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<v Speaker 1>bit because you just can't take us all with you. Now.

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<v Speaker 1>You know, if there is method to what Trump is

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<v Speaker 1>doing here, you know one way that you could explain

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<v Speaker 1>this is to say what he wants, and it's what

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<v Speaker 1>he said he wants is to divide the EU, in

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<v Speaker 1>particular on trade. He really cares about trade.

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<v Speaker 2>My champion there and of course will continue to speak

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<v Speaker 2>to mister Champion and others across all of Bloomberg Opinion. Again,

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<v Speaker 2>the President speaks tomorrow at the meetings of the World

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<v Speaker 2>Economic Forum. A good way to start here with the

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<v Speaker 2>markets and turmoil. Michael Purvis joined us on the move inequities,

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<v Speaker 2>the moving gold up to forty seven hundred plus as

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<v Speaker 2>well the bond market move price is lower here Michael

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<v Speaker 2>Purvis on a unique Tuesday.

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<v Speaker 3>Oh, I think what's really idiotsymnocratic with Japan right now,

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<v Speaker 3>with the fact that they're thirty year bond is this

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<v Speaker 3>you know that yield is a surgeon, right. And it's

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<v Speaker 3>an interesting contrast because in the United States, for all

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<v Speaker 3>the time we talk about the Fed and the Chair

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<v Speaker 3>and inflation and all this interest rate stuff, the reality

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<v Speaker 3>is that rate volatility in the US has been extraordinarily low,

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<v Speaker 3>perhaps until last night, and rape volatility overseas is doing

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<v Speaker 3>in Japan particularly, is doing very interesting things.

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<v Speaker 2>Michael Purvis there on how to interpret all that we

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<v Speaker 2>see in the market. So here's a little bit of

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<v Speaker 2>nerd fest on a Tuesday. It's so cold now, I mean,

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<v Speaker 2>all you can do is go to logarithms. So we

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<v Speaker 2>all quote yield. And you heard mister Purvis say there

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<v Speaker 2>yield surged in Japan. So it's yield up and that

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<v Speaker 2>means in price down. So on the Bloomberg and this

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<v Speaker 2>is rarely rarely quoted in the zeitgeist. Are the price

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<v Speaker 2>of a bond, a note, a bill, And in the

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<v Speaker 2>case of the ten year or twenty or forty year Japan,

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<v Speaker 2>we can get a price farther out you go, the

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<v Speaker 2>bigger the price move for drama. So I bring up

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<v Speaker 2>the forty year Japan bond forty year in price, not

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<v Speaker 2>yield in price, and basically it's going ninety to eighty,

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<v Speaker 2>just as a general idea. So then I look at

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<v Speaker 2>the movement the volatility as mister Purvis was just talking about,

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<v Speaker 2>which is a standard deviation right now that forty year

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<v Speaker 2>piece is at eighty three. If it goes to eighty

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<v Speaker 2>two or eighty one and a half, something like that,

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<v Speaker 2>it's a four standard deviation move that is really really

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<v Speaker 2>critical to the kind of math that leads to emotion

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<v Speaker 2>and the unexpected. In Japan, again, the T function, the

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<v Speaker 2>trading envelope function modeled out logarithmically is a four standard

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<v Speaker 2>deviation move. We're really getting here quickly on some of

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<v Speaker 2>the Japanese debt on podcasts out at Spotify, at Apple

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<v Speaker 2>Music as well, and YouTube podcasts single best Idea