1 00:00:02,720 --> 00:00:09,280 Speaker 1: Bloomberg Audio Studios, podcasts, radio news, joining us some land. 2 00:00:09,119 --> 00:00:12,559 Speaker 2: Of Schlitz and paps, blue ribbon. Jim Bianco, I believe 3 00:00:12,680 --> 00:00:14,400 Speaker 2: is with us all right now? Rich, do we have 4 00:00:14,440 --> 00:00:17,720 Speaker 2: mister Bianco? Okay, we do, Thank you Rich Truman for that. 5 00:00:18,880 --> 00:00:23,079 Speaker 2: This morning, Jim Bianco is nailed the sticky inflation call. 6 00:00:23,360 --> 00:00:27,040 Speaker 2: We get an update, Jim like good news this morning. 7 00:00:27,160 --> 00:00:30,680 Speaker 2: Futures up twenty five. We're getting knocked around here in 8 00:00:30,920 --> 00:00:35,920 Speaker 2: immense emotional volatility. What does a Bianco view on inflation? 9 00:00:36,479 --> 00:00:39,640 Speaker 1: That it's still sticky and that you're starting to see 10 00:00:39,680 --> 00:00:42,839 Speaker 1: signs that even people are starting to become nervous about it. 11 00:00:42,960 --> 00:00:47,560 Speaker 1: The surveys like Michigan and the Conference Board are showing 12 00:00:47,600 --> 00:00:50,720 Speaker 1: that people are expecting even higher levels of inflation. The 13 00:00:50,800 --> 00:00:53,920 Speaker 1: FED might call that being a bit unanchored. And I 14 00:00:53,960 --> 00:00:56,040 Speaker 1: think that it's going to, you know, stay with us 15 00:00:56,040 --> 00:00:58,160 Speaker 1: and be a problem. Now now that I've said that 16 00:00:58,680 --> 00:01:01,480 Speaker 1: it's a three percent three and a half percent problem, 17 00:01:01,560 --> 00:01:04,520 Speaker 1: it is not an eight ten or Zimbabwe problem, but 18 00:01:04,640 --> 00:01:06,559 Speaker 1: even still a three to three and a half percent 19 00:01:06,640 --> 00:01:09,760 Speaker 1: problem means that interest rates, even though the bond market 20 00:01:09,840 --> 00:01:12,800 Speaker 1: is rallied down, the four point three you know, we 21 00:01:13,160 --> 00:01:15,679 Speaker 1: don't have a whole lot more on the downside to go. 22 00:01:15,720 --> 00:01:17,720 Speaker 1: If we've got such that kind of sticky inflation. 23 00:01:18,040 --> 00:01:21,560 Speaker 2: How will the FED adapt to our new I love 24 00:01:21,600 --> 00:01:26,800 Speaker 2: this phrase fiscal space. How does the FED adapt to 25 00:01:27,240 --> 00:01:31,559 Speaker 2: you know, forget about the legislation overnight and the ramifications 26 00:01:31,560 --> 00:01:34,319 Speaker 2: of x numbers of zillions of dollars of debt added 27 00:01:34,360 --> 00:01:37,840 Speaker 2: on where we are now, how do they adapt to 28 00:01:37,880 --> 00:01:39,000 Speaker 2: our fiscal policy? 29 00:01:39,400 --> 00:01:41,800 Speaker 1: Well, I'll answer the question by saying I hope they adapt, 30 00:01:41,920 --> 00:01:44,920 Speaker 1: because their attitude right now has been well, we have 31 00:01:45,040 --> 00:01:46,680 Speaker 1: to wait and see, and we have to sit on 32 00:01:46,680 --> 00:01:49,360 Speaker 1: our hands and see what happens with tariffs and see 33 00:01:49,360 --> 00:01:53,000 Speaker 1: what happens with the budget and then kind of assess 34 00:01:53,000 --> 00:01:55,559 Speaker 1: it from there. And that's why the market doesn't expect 35 00:01:55,560 --> 00:01:59,320 Speaker 1: the FED to move until June at the earliest. At 36 00:01:59,320 --> 00:02:02,040 Speaker 1: this point, so I think the FED is going to 37 00:02:02,080 --> 00:02:05,600 Speaker 1: have to learn to adjust that there is a plan 38 00:02:05,800 --> 00:02:08,960 Speaker 1: out there by this administration, and it isn't just a 39 00:02:09,000 --> 00:02:12,840 Speaker 1: bunch of disconnected things like you know, tariffs or a 40 00:02:12,880 --> 00:02:16,560 Speaker 1: sovereign wealth fund or demanding the Europe pay for it 41 00:02:16,639 --> 00:02:19,800 Speaker 1: more security so that we could relieve our own defense budget. 42 00:02:20,360 --> 00:02:23,079 Speaker 1: It's what I've been talking about for the last couple 43 00:02:23,120 --> 00:02:25,120 Speaker 1: of weeks. It's the mar A Lago Plan. That is 44 00:02:25,200 --> 00:02:28,960 Speaker 1: the plan, and we're getting all the phases of that plan. 45 00:02:29,320 --> 00:02:31,640 Speaker 1: And the idea is to lower the value of the dollar, 46 00:02:32,080 --> 00:02:34,480 Speaker 1: is to bring the US into a more competitive position. 47 00:02:35,000 --> 00:02:37,160 Speaker 1: Is to relieve us of the debt burden and bring 48 00:02:37,200 --> 00:02:39,920 Speaker 1: down interest rates. But right now the Fed seems to 49 00:02:39,960 --> 00:02:42,400 Speaker 1: think like there's kind of three random things that are 50 00:02:42,400 --> 00:02:45,480 Speaker 1: happening side by side and hasn't put that together. Once 51 00:02:45,520 --> 00:02:47,960 Speaker 1: they do, hopefully they'll understand the plan. 52 00:02:48,400 --> 00:02:51,520 Speaker 3: So it's interesting. Jim Torsten slockover to Apollo's out with 53 00:02:51,520 --> 00:02:53,400 Speaker 3: a note this morning and just kind of talking about 54 00:02:53,400 --> 00:02:59,280 Speaker 3: the reverse of globalization. He calls it segmentation, as in 55 00:02:59,400 --> 00:03:04,200 Speaker 3: talking about the how that puts structural upper pressure on inflation, goods, 56 00:03:04,360 --> 00:03:09,040 Speaker 3: inflation in labor, keeping industry structurally higher for longer. How 57 00:03:09,040 --> 00:03:11,000 Speaker 3: do you think about that? Is that something that can 58 00:03:11,040 --> 00:03:13,079 Speaker 3: be a real headwind for global economy? 59 00:03:13,400 --> 00:03:15,919 Speaker 1: Oh? I think it is a headwind for the global economy, 60 00:03:15,960 --> 00:03:19,000 Speaker 1: and it will be for both that and inflation. Torsten's 61 00:03:19,080 --> 00:03:21,320 Speaker 1: right about that. It will put upward pressure on inflation. 62 00:03:21,400 --> 00:03:24,320 Speaker 1: And if you look at the global economy, especially if 63 00:03:24,320 --> 00:03:26,760 Speaker 1: you look at the European economy, they're not doing very 64 00:03:26,800 --> 00:03:30,360 Speaker 1: well right now. The Chinese economy is not doing well 65 00:03:30,440 --> 00:03:34,280 Speaker 1: at all. Right now. The bright spot in the globe 66 00:03:34,320 --> 00:03:37,040 Speaker 1: is United States, at least at the top line. The 67 00:03:37,120 --> 00:03:39,520 Speaker 1: United States economy is stronger than most of the other 68 00:03:39,560 --> 00:03:43,840 Speaker 1: developed countries, and it continues to do well. But that segmentation, 69 00:03:44,000 --> 00:03:47,320 Speaker 1: or that deglobalization as it was called before, that that's 70 00:03:47,320 --> 00:03:50,280 Speaker 1: been underway now pretty much since the financial crisis and 71 00:03:50,360 --> 00:03:53,600 Speaker 1: got accelerated post COVID, and I suspect we're going to 72 00:03:53,640 --> 00:03:57,840 Speaker 1: continue to see that happen. That's the impetus behind tariffs, 73 00:03:57,840 --> 00:04:01,000 Speaker 1: and why President Trump keeps talking about we have unfair 74 00:04:01,080 --> 00:04:03,440 Speaker 1: deals is that he's trying to correct that. But that 75 00:04:03,480 --> 00:04:05,040 Speaker 1: means we're going to see more segmentation. 76 00:04:05,280 --> 00:04:08,000 Speaker 2: Jim Mianco, We've had a series of conversations. If you're 77 00:04:08,040 --> 00:04:10,560 Speaker 2: just joining us, James Bianco with us from Chicago threat 78 00:04:10,560 --> 00:04:13,840 Speaker 2: he could be with us with Jim Bianco research. Jim, 79 00:04:13,840 --> 00:04:17,000 Speaker 2: I I look at the last couple of days of 80 00:04:17,080 --> 00:04:20,120 Speaker 2: conversations and a lot of people are yeah, yeah, but 81 00:04:20,440 --> 00:04:23,599 Speaker 2: we're cautious, and it's the politics and all that A 82 00:04:23,680 --> 00:04:27,880 Speaker 2: headline out three minutes ago Elon Musk will attend Trump 83 00:04:28,000 --> 00:04:32,480 Speaker 2: cabinet meeting today that according to Fox News Jim Bianco, 84 00:04:32,680 --> 00:04:36,320 Speaker 2: how do you participate in the market, in the stock market, 85 00:04:36,800 --> 00:04:40,440 Speaker 2: given the newsflow we're all having right now, Well, that 86 00:04:40,640 --> 00:04:43,200 Speaker 2: is the thing you want to definitely get yourself, you know, 87 00:04:43,279 --> 00:04:46,760 Speaker 2: away from, is getting a bogged down into all of 88 00:04:46,800 --> 00:04:50,760 Speaker 2: these situations, whether you know there's this or that that's happening, 89 00:04:50,839 --> 00:04:51,960 Speaker 2: or even the mar Alago accord. 90 00:04:52,080 --> 00:04:54,800 Speaker 1: I think you'd want to take a longer term perspective 91 00:04:55,240 --> 00:04:58,279 Speaker 1: and to decide what you like what you don't like. Now, 92 00:04:58,440 --> 00:05:01,560 Speaker 1: not that I've said that, I'll a note precaution. The 93 00:05:01,640 --> 00:05:04,160 Speaker 1: other problem that the stock market has, while I think 94 00:05:04,160 --> 00:05:08,080 Speaker 1: it's having indigestion more than anything else, is we started 95 00:05:08,080 --> 00:05:11,279 Speaker 1: the year with very high valuations in the market, and 96 00:05:11,400 --> 00:05:15,920 Speaker 1: the max evenstocks had extremely high valuations. They need everything 97 00:05:15,960 --> 00:05:18,400 Speaker 1: to go right when you have those kind of valuations, 98 00:05:18,839 --> 00:05:22,120 Speaker 1: you know, to put it into you know, in baseball terms, 99 00:05:22,400 --> 00:05:24,679 Speaker 1: you need to score eight runs, and if you score 100 00:05:24,720 --> 00:05:28,080 Speaker 1: six runs, that's not enough, even though six runs sounds 101 00:05:28,120 --> 00:05:30,560 Speaker 1: like a lot, because that's the problem when you have 102 00:05:30,640 --> 00:05:34,760 Speaker 1: high valuation, and that I think is why we're starting 103 00:05:34,800 --> 00:05:37,279 Speaker 1: to see people be more cautious more than anything else 104 00:05:37,800 --> 00:05:40,560 Speaker 1: is those type of issues, and it gets kind of 105 00:05:40,720 --> 00:05:43,640 Speaker 1: wrapped up into, you know, the news flow of the day. Jim. 106 00:05:43,640 --> 00:05:46,000 Speaker 3: We're about ninety percent of the way through the SP 107 00:05:46,080 --> 00:05:49,120 Speaker 3: five hundred reporting season here obviously and video big, big, 108 00:05:49,120 --> 00:05:51,719 Speaker 3: big name after the close. What have you learned from earnings? 109 00:05:52,000 --> 00:05:54,159 Speaker 1: Yeah, and Vidiao's the biggest name. But the earnings numbers 110 00:05:54,160 --> 00:05:57,560 Speaker 1: have looked great so far. The year over year earnings 111 00:05:57,640 --> 00:05:59,440 Speaker 1: numbers for the fourth quarter to fourth quarter for the 112 00:05:59,480 --> 00:06:01,279 Speaker 1: S and P five hundred is running around twelve or 113 00:06:01,279 --> 00:06:05,520 Speaker 1: thirteen percent. That's been a very good number. Even sales, 114 00:06:05,960 --> 00:06:09,400 Speaker 1: which is kind of an analogous to nominal GDP because 115 00:06:09,400 --> 00:06:12,200 Speaker 1: they're like trillions of dollars of sales, is five and 116 00:06:12,200 --> 00:06:15,200 Speaker 1: a half percent, and so these numbers have been looking 117 00:06:15,320 --> 00:06:18,160 Speaker 1: very good. Now that I've said that, remember that those 118 00:06:18,160 --> 00:06:20,280 Speaker 1: are the numbers they report it. They don't have much 119 00:06:20,560 --> 00:06:24,159 Speaker 1: forward guidance, But even the companies are offering guidance that 120 00:06:24,320 --> 00:06:27,600 Speaker 1: is somewhat positive right now. So that is that is 121 00:06:27,640 --> 00:06:29,839 Speaker 1: a good thing, but that is also running into that 122 00:06:29,920 --> 00:06:32,880 Speaker 1: high valuation thing. So even though those numbers might be good, 123 00:06:32,880 --> 00:06:34,040 Speaker 1: they might not be good enough. 124 00:06:34,200 --> 00:06:37,200 Speaker 2: Shib biancle way too early from shimmy uncle, thank you 125 00:06:37,279 --> 00:06:38,840 Speaker 2: so much for joining us.