Speaker 1: Bloomberg Audio Studios, podcasts, radio news, joining us some land.
Speaker 2: Of Schlitz and paps, blue ribbon. Jim Bianco, I believe
Speaker 2: is with us all right now? Rich, do we have
Speaker 2: mister Bianco? Okay, we do, Thank you Rich Truman for that.
Speaker 2: This morning, Jim Bianco is nailed the sticky inflation call.
Speaker 2: We get an update, Jim like good news this morning.
Speaker 2: Futures up twenty five. We're getting knocked around here in
Speaker 2: immense emotional volatility. What does a Bianco view on inflation?
Speaker 1: That it's still sticky and that you're starting to see
Speaker 1: signs that even people are starting to become nervous about it.
Speaker 1: The surveys like Michigan and the Conference Board are showing
Speaker 1: that people are expecting even higher levels of inflation. The
Speaker 1: FED might call that being a bit unanchored. And I
Speaker 1: think that it's going to, you know, stay with us
Speaker 1: and be a problem. Now now that I've said that
Speaker 1: it's a three percent three and a half percent problem,
Speaker 1: it is not an eight ten or Zimbabwe problem, but
Speaker 1: even still a three to three and a half percent
Speaker 1: problem means that interest rates, even though the bond market
Speaker 1: is rallied down, the four point three you know, we
Speaker 1: don't have a whole lot more on the downside to go.
Speaker 1: If we've got such that kind of sticky inflation.
Speaker 2: How will the FED adapt to our new I love
Speaker 2: this phrase fiscal space. How does the FED adapt to
Speaker 2: you know, forget about the legislation overnight and the ramifications
Speaker 2: of x numbers of zillions of dollars of debt added
Speaker 2: on where we are now, how do they adapt to
Speaker 2: our fiscal policy?
Speaker 1: Well, I'll answer the question by saying I hope they adapt,
Speaker 1: because their attitude right now has been well, we have
Speaker 1: to wait and see, and we have to sit on
Speaker 1: our hands and see what happens with tariffs and see
Speaker 1: what happens with the budget and then kind of assess
Speaker 1: it from there. And that's why the market doesn't expect
Speaker 1: the FED to move until June at the earliest. At
Speaker 1: this point, so I think the FED is going to
Speaker 1: have to learn to adjust that there is a plan
Speaker 1: out there by this administration, and it isn't just a
Speaker 1: bunch of disconnected things like you know, tariffs or a
Speaker 1: sovereign wealth fund or demanding the Europe pay for it
Speaker 1: more security so that we could relieve our own defense budget.
Speaker 1: It's what I've been talking about for the last couple
Speaker 1: of weeks. It's the mar A Lago Plan. That is
Speaker 1: the plan, and we're getting all the phases of that plan.
Speaker 1: And the idea is to lower the value of the dollar,
Speaker 1: is to bring the US into a more competitive position.
Speaker 1: Is to relieve us of the debt burden and bring
Speaker 1: down interest rates. But right now the Fed seems to
Speaker 1: think like there's kind of three random things that are
Speaker 1: happening side by side and hasn't put that together. Once
Speaker 1: they do, hopefully they'll understand the plan.
Speaker 3: So it's interesting. Jim Torsten slockover to Apollo's out with
Speaker 3: a note this morning and just kind of talking about
Speaker 3: the reverse of globalization. He calls it segmentation, as in
Speaker 3: talking about the how that puts structural upper pressure on inflation, goods,
Speaker 3: inflation in labor, keeping industry structurally higher for longer. How
Speaker 3: do you think about that? Is that something that can
Speaker 3: be a real headwind for global economy?
Speaker 1: Oh? I think it is a headwind for the global economy,
Speaker 1: and it will be for both that and inflation. Torsten's
Speaker 1: right about that. It will put upward pressure on inflation.
Speaker 1: And if you look at the global economy, especially if
Speaker 1: you look at the European economy, they're not doing very
Speaker 1: well right now. The Chinese economy is not doing well
Speaker 1: at all. Right now. The bright spot in the globe
Speaker 1: is United States, at least at the top line. The
Speaker 1: United States economy is stronger than most of the other
Speaker 1: developed countries, and it continues to do well. But that segmentation,
Speaker 1: or that deglobalization as it was called before, that that's
Speaker 1: been underway now pretty much since the financial crisis and
Speaker 1: got accelerated post COVID, and I suspect we're going to
Speaker 1: continue to see that happen. That's the impetus behind tariffs,
Speaker 1: and why President Trump keeps talking about we have unfair
Speaker 1: deals is that he's trying to correct that. But that
Speaker 1: means we're going to see more segmentation.
Speaker 2: Jim Mianco, We've had a series of conversations. If you're
Speaker 2: just joining us, James Bianco with us from Chicago threat
Speaker 2: he could be with us with Jim Bianco research. Jim,
Speaker 2: I I look at the last couple of days of
Speaker 2: conversations and a lot of people are yeah, yeah, but
Speaker 2: we're cautious, and it's the politics and all that A
Speaker 2: headline out three minutes ago Elon Musk will attend Trump
Speaker 2: cabinet meeting today that according to Fox News Jim Bianco,
Speaker 2: how do you participate in the market, in the stock market,
Speaker 2: given the newsflow we're all having right now, Well, that
Speaker 2: is the thing you want to definitely get yourself, you know,
Speaker 2: away from, is getting a bogged down into all of
Speaker 2: these situations, whether you know there's this or that that's happening,
Speaker 2: or even the mar Alago accord.
Speaker 1: I think you'd want to take a longer term perspective
Speaker 1: and to decide what you like what you don't like. Now,
Speaker 1: not that I've said that, I'll a note precaution. The
Speaker 1: other problem that the stock market has, while I think
Speaker 1: it's having indigestion more than anything else, is we started
Speaker 1: the year with very high valuations in the market, and
Speaker 1: the max evenstocks had extremely high valuations. They need everything
Speaker 1: to go right when you have those kind of valuations,
Speaker 1: you know, to put it into you know, in baseball terms,
Speaker 1: you need to score eight runs, and if you score
Speaker 1: six runs, that's not enough, even though six runs sounds
Speaker 1: like a lot, because that's the problem when you have
Speaker 1: high valuation, and that I think is why we're starting
Speaker 1: to see people be more cautious more than anything else
Speaker 1: is those type of issues, and it gets kind of
Speaker 1: wrapped up into, you know, the news flow of the day. Jim.
Speaker 3: We're about ninety percent of the way through the SP
Speaker 3: five hundred reporting season here obviously and video big, big,
Speaker 3: big name after the close. What have you learned from earnings?
Speaker 1: Yeah, and Vidiao's the biggest name. But the earnings numbers
Speaker 1: have looked great so far. The year over year earnings
Speaker 1: numbers for the fourth quarter to fourth quarter for the
Speaker 1: S and P five hundred is running around twelve or
Speaker 1: thirteen percent. That's been a very good number. Even sales,
Speaker 1: which is kind of an analogous to nominal GDP because
Speaker 1: they're like trillions of dollars of sales, is five and
Speaker 1: a half percent, and so these numbers have been looking
Speaker 1: very good. Now that I've said that, remember that those
Speaker 1: are the numbers they report it. They don't have much
Speaker 1: forward guidance, But even the companies are offering guidance that
Speaker 1: is somewhat positive right now. So that is that is
Speaker 1: a good thing, but that is also running into that
Speaker 1: high valuation thing. So even though those numbers might be good,
Speaker 1: they might not be good enough.
Speaker 2: Shib biancle way too early from shimmy uncle, thank you
Speaker 2: so much for joining us.