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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Joining US now portfolio manager Noiro Rubini of Atlas America

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Speaker 2: fund has been way too long, nor We've got to

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Speaker 2: get you in here more and more. You're traveling so

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Speaker 2: much we hardly see you. You've teamed up with Resubunda

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Speaker 2: at Atlas America. Are you running money now? What are

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Speaker 2: you learning running money Alice America?

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Speaker 1: We're not yet. Actually, what in quiet periodicity is now

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Speaker 1: approving our thing. So you launch, so your registration and.

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Speaker 2: Speak, this is going to be This is gonna be

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Speaker 2: something to see Noura Rabini run money in the world.

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Speaker 2: We're in the great post pandemic. Shock has been American exceptionalism,

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Speaker 2: American prosperity. Are you willing to say this gift that

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Speaker 2: we have is nothing but trillion dollar deficits.

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Speaker 1: No, I wouldn't say it's only trillion dollars deficits. I

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Speaker 1: think that a whole bunch of things have happened. We

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Speaker 1: had the Infrastructure Act, We had the IRA where the

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Speaker 1: Chips Act with actually loose migration policies that led to

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Speaker 1: an inflow of workers that increased the labor supply growth

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Speaker 1: and reduce the inflation. So certainly the physical stimulus has

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Speaker 1: helped the margin. But then also we consider these AI

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Speaker 1: revolution and significant increasing capects. But the private sector potential

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Speaker 1: growth of the US, given technological innovation, by the end

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Speaker 1: of this decade could be in a view higher than

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Speaker 1: three percent. That's a revolution, right. China might be growing

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Speaker 1: less than three percent by the end of this decade.

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Speaker 1: US might be growing faster than China. You know, it's

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Speaker 1: a bit of a bold prediction to make, but I

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Speaker 1: think that in spite of the dysfunctionality of our political

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Speaker 1: system we're totally partisan and you name it. The private

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Speaker 1: sector innovation is such in lots of the technologies in

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Speaker 1: the industry of the future. It's not just the eyes,

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Speaker 1: robotic automation, by medical research, space exploration, new weapons system

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Speaker 1: act tech, green tech, quantum computing. There's a flurry of

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Speaker 1: new technology can radically change the economy. And I think

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Speaker 1: part of the strength of the economy it has been

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Speaker 1: growing fast. The potential, in spite of the fact for

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Speaker 1: the last few is tightening, is there is a shift,

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Speaker 1: is a regime shift.

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Speaker 3: Noroe you mentioned before on the air, They're going to

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Speaker 3: be traveling pretty extensively over the coming weeks here. I

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Speaker 3: suspect internationally they're going to be asking you about your

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Speaker 3: thoughts on the US election coming up. How would you

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Speaker 3: frame a response to some of your national clients.

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Speaker 1: Well, I think that the major probable risk to the

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Speaker 1: US economy comes from the elections, and the economic policies

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Speaker 1: of a new Trump administration will be very different than

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Speaker 1: those of a Harris administration. If you take at face

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Speaker 1: value what Trump says. It says I'm going to impose

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Speaker 1: tariffs on all imports in the US of ten to

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Speaker 1: up to twenty percent, up to sixty percent on those

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Speaker 1: from China. He wants to dive value the dollar because

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Speaker 1: it thinks it's too strong and has led to the innstrialization.

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Speaker 1: It wants a more douvish FED, and you have a

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Speaker 1: chance to change some of the leaders with the FED

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Speaker 1: and the Center for Responsible Budgets. As the other day

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Speaker 1: said that his fiscal policy will increase the deficits and

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Speaker 1: the debt by seven point five three million dollars over

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Speaker 1: the next decade. That's well above what the harn Harriers

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Speaker 1: will have it, but unquot only three point five, and

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Speaker 1: it will have restriction to migrations, severe draconie restriction migration,

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Speaker 1: not it's going to deport millions of people, but even

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Speaker 1: not letting them in implies a significant reduction and the

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Speaker 1: labor supply. So all these things together, all these policy trade, currency, migration, monetary,

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Speaker 1: fiscal policy may view imply higher inflation, lower economic growth,

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Speaker 1: higher bond yields, and potential for a correction or equity.

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Speaker 2: You're not willing to give up unstack inflation. A lot

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Speaker 2: of people are saying, maybe it's over.

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Speaker 1: I don't think is over for the following reason. The

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Speaker 1: three negative aggregate supply shocks of COVID of course have

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Speaker 1: gone away. But as I pointed out, the economic policies

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Speaker 1: of a Trump administration my view, are stackflationary because whether

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Speaker 1: it's immigration, whether it's the currency, where there is trade,

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Speaker 1: where there's monitored and fiscal policy, they are increasing inflation

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Speaker 1: and they would reduce economic growth. So that call it

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Speaker 1: tackflation light or staculation, but they would be statulationary. And

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Speaker 1: as I pointed out in my Mega thread book, there

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Speaker 1: are other forces a more medium terms that are all stackflationary.

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Speaker 1: The coupling and protectionism, restriction to migration, aging of population,

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Speaker 1: reshoring and friends shoring, geopolitical riskily to fragmentation, climate change,

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Speaker 1: new pandemics, backlash against liberal democracy into fiscal policies that

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Speaker 1: are pro liber in union increase wage growth and potentially

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Speaker 1: even did organization gradual, but it will increase essentially keep reprisals.

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Speaker 2: Well, this is your wheels when you're President Clinton, Can

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Speaker 2: you model a week dollar?

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Speaker 1: Can I model it in which you predict a week dollar?

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Speaker 1: It depends. You know, if we have a very large

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Speaker 1: fiscal deficits and if we have very large current account deficit,

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Speaker 1: this twin definite are going to continue in spite of

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Speaker 1: the strengths of the private sector. I think at some

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Speaker 1: point the bond melt at vigilant is going to wake up.

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Speaker 1: And in the last few years, in spite of these

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Speaker 1: twin deficits, the dollar was strengthening because we had tight

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Speaker 1: monetary policy and therefore the capital account was essentially compensating

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Speaker 1: for a very large current account deficit. But if the

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Speaker 1: large current account deficits remains at the same time, interest

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Speaker 1: rate differential are implying that the capital inflant us are

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Speaker 1: going to be less. Let alone, the fact that we

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Speaker 1: are weaponizing the dollar in some country may be gradually

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Speaker 1: the dollarizing that would imply overtime a weeker dollar over time.

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Speaker 1: I'm not talking about the crash of the US dollar

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Speaker 1: will be. The counter argument is that there is so

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Speaker 1: much innovation in the US that the influence of capital

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Speaker 1: is not going to be into fixed income treasuries but

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Speaker 1: rather inequities. That has sustained, of course, the dollar for

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Speaker 1: the last few years. If that continues, then that might

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Speaker 1: be partially supportive of the dollar, leading to less of

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Speaker 1: a weakenings.

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Speaker 3: For most of us grew up with globalization as a

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Speaker 3: theme as something we learned and experienced, but that seems

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Speaker 3: to have reversed itself a little bit over the last

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Speaker 3: four or five six years. Eight. Do you agree with

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Speaker 3: that and be will that continue?

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Speaker 2: Yes?

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Speaker 1: I would say that both the trends of geopolitical fragmentation

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Speaker 1: are leading to some degree of call it either the

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Speaker 1: globalization or the coupling, or the risking or reshoring and

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Speaker 1: french shorting or changing in the global global supply chains

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Speaker 1: from just in time to just in case, from China

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Speaker 1: to challenge a plus one or plus two from emphasizing

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Speaker 1: in invents s mean economic security rather than economic efficiency.

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Speaker 1: So the question is not weather that the action is

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Speaker 1: one towards fragmentation is going to continue, giving geopolitics, given AI,

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Speaker 1: given other pressure that are on labor income. The question

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Speaker 1: is not weather, but only how much and how fast?

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Speaker 2: Norabini whether it's here folks, the down negative ninety two,

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Speaker 2: the vics twenty one point two three, a little bit

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Speaker 2: of wait to take this morning in noural. With all

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Speaker 2: that said, we're in a bullmarket tomorrow. JP Morgan earnings

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Speaker 2: for the last ten years annual return on JP Morgan's

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Speaker 2: twelve thirteen fourteen percent per year. How do you explain

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Speaker 2: the lift in asset valuations in America?

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Speaker 1: Well, I explained it by the fact that, one we

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Speaker 1: achieved a soft landing, and we achieved it not because

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Speaker 1: of what the FED did, but because we got lucky

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Speaker 1: those three negative aggregate supply shocks of COVID reverse.

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Speaker 2: The thing's a fact got lucky.

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Speaker 1: They got lucky because in any other situation, fat going

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Speaker 1: from zero and QE to five and a half in

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Speaker 1: QT would have led not only the lower inflation, but

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Speaker 1: also to significant lower growth and even a recession. Now

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Speaker 1: we had the lower inflation, but we did not have

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Speaker 1: the recession. Why my explanation is the tree in aggat,

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Speaker 1: we aggregate supply shocks of COVID, The impact of COVID

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Speaker 1: on supply goods and services and supply chains and labor

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Speaker 1: went away. The impact of the shock of Russia Ukraine

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Speaker 1: on commodity prices went away, and China fes done the

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Speaker 1: zero COVID policy. On top of those three, we got

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Speaker 1: other things that happened. One was immigration two point five

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Speaker 1: million people entering US for the last four years, documentary

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Speaker 1: or undocumented, that kept the lead on wage growth, increased growth.

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Speaker 1: We had the Ai revolution that also has led significant

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Speaker 1: increase in private capects. So all those factors explain why

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Speaker 1: we said stronger growth and inflation and lower was not

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Speaker 1: really the fat was just we got lucky, and we

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Speaker 1: got immigration, and we got the revolution.

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Speaker 3: Geopolitical risk as front and center for investors really over

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Speaker 3: the last several years, probably more so than it has

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Speaker 3: been in a while. Yet markets are seen the churn higher.

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Speaker 3: How do you factor whether it's coming out of Ukraine

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Speaker 3: or the Middle East had effectored that in well.

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Speaker 1: My explanation is that for the time being, market have

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Speaker 1: correctly estimated that all these conflicts are regional rather than global.

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Speaker 1: After all, Russia and Ukraine is very ugly. It has

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Speaker 1: damaged severely the Ukrainian economy. It's called some damage to Russia.

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Speaker 1: It's had initial impact on global commodity prices, but now

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Speaker 1: more oil and natural gas from the militia US has

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Speaker 1: led to even the European being able to phase out

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Speaker 1: the Russian oil for now. The conflict between Israel and

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Speaker 1: a mass was on Gaza. There is a risk of

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Speaker 1: regionalization so far has not occurred, and the Cold War

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Speaker 1: between US and China is a cold war, but it

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Speaker 1: is probably not escalating and the speeding is going to

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Speaker 1: become a hot war in the short run or having

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Speaker 1: global consequences. So then markets are correctly said these things

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Speaker 1: are terrible for specific countries and region, but they don't

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Speaker 1: have a global impact of all of them. I would

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Speaker 1: say the biggest risk today is that if if Israel

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Speaker 1: were to go and strike Iran, and there's a consensus

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Speaker 1: within Israel, not just on the right Nathania, but even

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Speaker 1: people that are on the opposition, like many Gans has

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Speaker 1: said we have to get rid of this regime in Iran,

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Speaker 1: then if Israel were to go to try to achieve

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Speaker 1: regime change in Iran, you could have really a conflagration

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Speaker 1: at the Gulf. You could have essentially the production and

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Speaker 1: expert of all from the Gulf being blocked for several months.

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Speaker 1: You could have a shock like nineteen seventy the Yom

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Speaker 1: Kippur or nineteen seventy nine. Islamic are in revolution. I

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Speaker 1: think that's the biggest risk. And by the way, if

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Speaker 1: Trump gets elected, the chance is going to give a

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Speaker 1: green light to Nathaniel to go and say bomb the

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Speaker 1: hell out of Iran, get rid of the regime will

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Speaker 1: be higher than Andre Harris Adminster.

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Speaker 2: We're just Turkey filming this. Your father moved rugs in

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Speaker 2: Turkey years ago on the next era one. What do

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Speaker 2: you expect to see there?

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Speaker 1: Well, the economy is still quite fragile. The good news

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Speaker 1: that he put in place as a finance minister I

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Speaker 1: met Simshek was actually very mainstream and orthodox, which yeah,

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Speaker 1: it's very good, and therefore inflation is gradually falling but

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Speaker 1: still too high. But they're going at least in direction

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Speaker 1: that are less a tertodox economic policy and gradually more

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Speaker 1: orthodox one. So I would say that actually Turkey is

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Speaker 1: a country that based on overall fundamentals strong manufacturing sector, innovation,

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Speaker 1: good financial sector could do well.

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Speaker 2: Okay, but in America we've heard this scenario. Are you

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Speaker 2: telling me I got thirty seconds? Yes? Are you telling

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Speaker 2: me your long turkishlera going to your first trade year? No?

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Speaker 1: No, I'm not long term lear because the inflation rate

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Speaker 1: is still too high and the amount of monetoring physical

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Speaker 1: and credit itaning is not yet sufficient. But I'm saying

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Speaker 1: at least they're moving in the right direction compared to

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Speaker 1: what it was the situation before the last presidential action.

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Speaker 1: So finally Loganez realized there was a risk of occurrence

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Speaker 1: and a financial crisis. He gave power to some orthodox

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Speaker 1: central bankers and finance ministers, and therefore the economic policies

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Speaker 1: are moving in the right direction.

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Speaker 2: Don't be a stranger, nor Rubin, It's been way too long.

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Speaker 2: Thank you so much for the Elis America fun, Rubini

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Speaker 2: Macro associates, and of course his affiliation with New York

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Speaker 2: University