Speaker 1: M Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Welcome to the Marrion Talks Money Market Rap.
Speaker 1: We were talking about the biggest weeks on the market
Speaker 1: this week and what is driving them.
Speaker 2: I am marrion' dunset, web editor at largely Bloompogy.
Speaker 3: Go well, and I'm joined Stowic senior reporter and author
Speaker 3: of the award winning money Distilled News Later.
Speaker 2: Yeah, don't you You've got to say, and I'm just saying, right,
Speaker 2: how long ago is that award?
Speaker 3: Edge cool Movie's a couple of years now. Yeah, for
Speaker 3: some more, I.
Speaker 1: Think we should enter for some wards. I do know
Speaker 1: what entering for awards is really boring?
Speaker 2: Admin?
Speaker 1: If anyone knows of any wards that we can be
Speaker 1: entered for without having to do any admin at all,
Speaker 1: and it will probably win deeply to let us know,
Speaker 1: because that's a lot easier.
Speaker 3: Maybe they could get EI to do it. Ei to
Speaker 3: do it. I was like, meant to be good for
Speaker 3: boarding paperwork, but.
Speaker 2: Also makes mistakes, make mistakes. What have it entered us into?
Speaker 1: I don't know, sports podcast complication or something like that.
Speaker 3: If we win.
Speaker 1: One of those competitions, are only people with the correct ideology.
Speaker 3: When that's going on.
Speaker 2: We don't want any of this anyway.
Speaker 1: I wanted to move straight from that onto things people
Speaker 1: don't deservetles, brutal markets.
Speaker 2: So here we are.
Speaker 1: There's a lot going on. The world is changing very dramatically.
Speaker 1: Geopolitics is absolutely nuts. We've talked over and over and
Speaker 1: over about how the world has changed as it is
Speaker 1: material stuff, not ethereal stuff that matters.
Speaker 2: All these things we've talked about over and over.
Speaker 1: We can look around us, we can see the geopolitical conflict,
Speaker 1: we can see the risks of further geopolitical conflict. Very
Speaker 1: good podcast coming out on the on Monday, by the way,
Speaker 1: do you watch out for it. And even though all
Speaker 1: these things are happening around US, erratic leaders, bizarrely lefty leaders,
Speaker 1: all these things, markets are.
Speaker 2: At new hives.
Speaker 3: Sure, so the S and.
Speaker 1: Pes keeps going up back where it was the Japanese
Speaker 1: market is that you know.
Speaker 2: This year, John, help me out here. It's going on.
Speaker 2: Can we really can we really look through all this?
Speaker 2: We can look through.
Speaker 1: An energy crisis, we can look through in actual war
Speaker 1: and say it's okay, now that's really mad.
Speaker 2: He is.
Speaker 1: Let's think instead about earnings forecasts for individual companies.
Speaker 3: Said, I just don't think so, and I don't like
Speaker 3: saying that because I hate seeing the market is wrong
Speaker 3: exactly because.
Speaker 2: The market is wrong. It's so arrogant and it's so
Speaker 2: ridiculous happen.
Speaker 1: You know, when a market is wrong, where a market
Speaker 1: is right, the market is a whole maybe picking up
Speaker 1: thing that you and I don't understand, maybe ridiculously pessimistic.
Speaker 2: We maybe do cinnicle, We may not understand something. They
Speaker 2: would say, the market is wrong, the crowd is wrong, right, embarrassing.
Speaker 3: Not all I've learned plenty of times in the past
Speaker 3: that you know, yeah, if you think the market is wrong,
Speaker 3: it is probably not. The market is probably you. And also,
Speaker 3: you know, geopolitics famously doesn't affect markets that much for
Speaker 3: that length of time. Usually, you know, it's every time
Speaker 3: something like this happens, you get a big list of
Speaker 3: all the other times like crazy things happened, like GfK
Speaker 3: getting assassinated barely put a dent in the market. You know,
Speaker 3: even something like September eleventh didn't put a big dent
Speaker 3: in the market relative to the economic stuff that was
Speaker 3: going on at the time. So you know, we sort
Speaker 3: of should have learned from that. But at the same time,
Speaker 3: I mean, this is a very clear escalation down the
Speaker 3: road to the kind of world that I suppose we've
Speaker 3: been on and off, you know, I good few a
Speaker 3: lot of years now.
Speaker 1: Well, I suppose the key point is that it's not
Speaker 1: just geopolitics, right. We know often when we're talking about
Speaker 1: geopolitics from something very far away that doesn't have a
Speaker 1: particularly impact on your day to day life. This isn't
Speaker 1: just geopolitics. This is a massive, massive, one of the
Speaker 1: greatest energy shocks that you and I have known in
Speaker 1: our careers. So it's going to affect not just the
Speaker 1: price of energy, but the price of everything else. That's
Speaker 1: going to affect everybody's cost base. It's going to feed
Speaker 1: through into inflation. It makes although the Bank of England
Speaker 1: governor in the UK this week has been talking about
Speaker 1: her we shouldn't jump the gum on rate rises and
Speaker 1: he doesn't know yet and don't assume there's going to
Speaker 1: be a rate rise after rate rises?
Speaker 2: Who can possibly tell that not jump the gun excepter.
Speaker 2: But nonetheless, we.
Speaker 1: Know that in an inflationary environment, and we are now
Speaker 1: in an inflationary environment, that's going to feed through.
Speaker 2: Into great rises. So this is not distant geopolitics.
Speaker 1: It's slow burn right, And there's I was talking seven
Speaker 1: earlier in fact, on my podcast That's the Monday, who
Speaker 1: was pointing out that this is a crisis that moves
Speaker 1: at the speed of a tanker fifteen miles an hour
Speaker 1: something like that. So it's slow burns. It's easy to
Speaker 1: forget quite how serious it is. But it's not small.
Speaker 1: It's big. And I find it extraordinary that everyone can
Speaker 1: just look through it and market can be back at
Speaker 1: their house.
Speaker 3: And I suppose part of the problem is that the
Speaker 3: oil price itself, although it's gone up an awful lot,
Speaker 3: it's not going up as much as it did, say
Speaker 3: in twenty eleven, or even in twenty twenty two. I
Speaker 3: think that's maybe one thing. Well, the most visible oil
Speaker 3: price hasn't. I'm vaguely aware that lots of other things
Speaker 3: kind of have. But I'm also wondering if this is
Speaker 3: one of those situations where it's a little bit like
Speaker 3: we keep getting We've talked about this before, but the
Speaker 3: idea that the wake up call that we all get
Speaker 3: this time round is not going to be a price shock,
Speaker 3: is going to be an actual shock, you know.
Speaker 2: I mean, I'm.
Speaker 3: Hearing people talking about kind of europe run jet fuel,
Speaker 3: you know, in like six weeks reach John.
Speaker 2: But I'm both beginning to.
Speaker 4: Great exactly exactly would someone think of the tourists. I mean,
Speaker 4: but it is whenever things like people get their holidays
Speaker 4: canceled because there just isn't a flight anymore, that you know,
Speaker 4: maybe we start to see a panic. And also, I
Speaker 4: guess the other issues. America is still by far the
Speaker 4: biggest stock market in the world, and it is to
Speaker 4: a great extent the police that is most insulated from
Speaker 4: this because it actually has its own energy. So I
Speaker 4: do wonder how much that's got to do with it.
Speaker 4: And also the constant talking de escalation. I mean, nobody,
Speaker 4: we're still in a place, I think where nobody wants
Speaker 4: to get caught on the wrong side of a massive
Speaker 4: bounce in the market. And that's why we actually haven't
Speaker 4: had a big fall at all, because everyone actually has
Speaker 4: been buying the dip basically all the way through this.
Speaker 4: And that's one also, I mean arguably, I mean, I
Speaker 4: think it's very hard to say that trumps necessarily thinking,
Speaker 4: particularly strategically, but I do think that his kind of
Speaker 4: strategy would be the wrong thing. It's just instinctively got
Speaker 4: that ability. It's on the poke people in the vulnerable spot.
Speaker 4: And he keeps doing that whether it looks as if
Speaker 4: anyone's going to give in to you know, disappaired as
Speaker 4: it well.
Speaker 2: Yeah exactly.
Speaker 1: So you know, everyone is frightened that they're going to
Speaker 1: end up missing out on the piece. And Dena has
Speaker 1: a phrase for it, fomo opp.
Speaker 3: For fair missing out on peace on pace of of course.
Speaker 3: Oh yeah, oh yeah, okay.
Speaker 2: By not being fully invested.
Speaker 1: When it turns and add that to S and P
Speaker 1: five hundred, earnings rising at a very fast pace, and
Speaker 1: suddenly everything kind of looks okay, except that it kind
Speaker 1: of doesn't.
Speaker 3: How can they be rising? This is the thing that
Speaker 3: I do struggle away, the idea that earlings are going
Speaker 3: to rise even the low all these costs of residents
Speaker 3: like we I mean, okay, I guess the other thing
Speaker 3: is just general and I think general inflation has sort
Speaker 3: of because we live in this much more inflation in
Speaker 3: the environment. I think prices are probably less reliable in
Speaker 3: a lot of ways than the you know, than they
Speaker 3: have been. That's a very vague feeling. But I think
Speaker 3: it's when the recession, for example, it's just because there's
Speaker 3: a load of money constantly going in with her, and
Speaker 3: it's always hard to actually measure things in real terms.
Speaker 1: All right, listen, I'm going to introduce yet and the
Speaker 1: new what we've had today, we've had it's just forgotten already,
Speaker 1: fair of missing apple piece. And then there is another
Speaker 1: one in circulation, the biffs.
Speaker 3: Ah, yeah, we've heard this one this morning.
Speaker 1: It's remember the pigs right around the pigs, etcetera, etcetera.
Speaker 2: Now we have the.
Speaker 1: Biffs, who are the three European economy as well Europe
Speaker 1: plus US who have the nastiest debt problem. So the
Speaker 1: biggest rises in borrowing cross from mccustomers likely to find
Speaker 1: themselves and come home of physical crisis, and they are Italy,
Speaker 1: France and Britain. The best of our round Britain franceff.
Speaker 1: I don't know anyway, We mustn't we mustn't do French.
Speaker 1: Remember what they've talked about us.
Speaker 3: Doing French before. The listeners don't like it.
Speaker 1: Anyway, So we have this, and this makes you look
Speaker 1: at the UK, and we do have to think about
Speaker 1: the UK rise we've got this incredibly high tax burden already,
Speaker 1: we've got this.
Speaker 2: Awful physical problem, incredibly a.
Speaker 1: High level of debt to GDP, and a government that
Speaker 1: keeps promising more spending on anything except for defense obviously,
Speaker 1: which seems to be the one thing They're not prepared
Speaker 1: to shine anything up. And at the same time we
Speaker 1: have this really odd dynam this report out recently when
Speaker 1: everyone knows that that UK GDP per head is but
Speaker 1: not everyone actually, but we know that UK.
Speaker 2: Gdpeeperhead is bizarrely low.
Speaker 1: And there was this and the last few years everyone
Speaker 1: was looking at UK gdpeeperhead relative to gdpeeper per head
Speaker 1: in Mississippi, which is the poorest state in the US.
Speaker 2: Are we going to slip follow them or not?
Speaker 1: But there's recent study looked at how rich most people
Speaker 1: in the UK think the UK is. So it turns
Speaker 1: out that in fact, the majority of people in the
Speaker 1: UK believe that the UK is rich rich, like Switzerland
Speaker 1: or something like that. Now, crucially, it is absolutely true
Speaker 1: that the UK has one of the biggest economies in
Speaker 1: the world, right I think we're number six.
Speaker 3: Number six.
Speaker 1: Having the sixth largest economy in the world does not
Speaker 1: mean that your individual members of the population are the
Speaker 1: six richest people in the world. Because, of course, when
Speaker 1: you break it down to GDP per head in the UK,
Speaker 1: things have been absolutely horrible for decades. Real inflation adjusted
Speaker 1: gdpeeperheads literally barely moved for twenty years since the financial crisis,
Speaker 1: So in fact, individually we're really we're very poor.
Speaker 3: I mean, well, it's interesting because someone pulled the Green
Speaker 3: Party leader Zac Polanski up for this on Twitter the
Speaker 3: other day. I noticed because he described the UK as
Speaker 3: being the sixth sixth wealthiest country in the world, and
Speaker 3: the two things are not the same at all, And
Speaker 3: I do think, I mean rather that suggested to me that,
Speaker 3: I mean, obviously people use these terms sometimes with a
Speaker 3: kind of mendacious intent they wanted to sound as if
Speaker 3: we're richer than we are. But also think a lot
Speaker 3: of politicians are genuinely confused. It's like back in the
Speaker 3: day whenever David Cameron used to get confused with deficit
Speaker 3: and debt, and one thing that most politicians didn't seem
Speaker 3: to have a handle on is what was the difference
Speaker 3: between your annual deficit and the overall national debt? And
Speaker 3: they would use the terms interchangeably that's stopped because of
Speaker 3: I guess I kind I would say a kind of
Speaker 3: media education campaign. Actually maybe this will be the same
Speaker 3: with gdpeople head. But yeah, no, it's pretty disastrous. But
Speaker 3: I thought you were making a really good point about
Speaker 3: how that can this kind of miss and misperception explains
Speaker 3: why people are so angry angry.
Speaker 2: Yeah, and I think it might.
Speaker 1: I mean, one of the one of the problems we've
Speaker 1: had in the UK is people simply not getting richer
Speaker 1: gdpeper head in real time, simply not going up. So
Speaker 1: your life one year of the next, one year of
Speaker 1: the next, one year of the.
Speaker 2: Next is not improving. It's not improving, and that's going
Speaker 2: to make you pretty irritated to begin with.
Speaker 1: And if you believe that the UK is a very
Speaker 1: rich country but you are not getting richer year after
Speaker 1: year after year, you must think that there is money
Speaker 1: somewhere that other people have and you should have.
Speaker 2: And I think that's.
Speaker 5: Where we get this demand for wealth taxes and this
Speaker 5: redistribution and all this sort of thing. It comes from
Speaker 5: this idea that everyone feels that they are pull but
Speaker 5: looking at the numbers, maybe everyone else isn't.
Speaker 3: I think there's probably a lot of truth to that.
Speaker 3: I mean, I do. I think there's a lot goes
Speaker 3: into the general kind of sense of anger, and there's
Speaker 3: ploy all kinds of things tied up with anxiety and
Speaker 3: chaos and the sense of a lackey control over one's
Speaker 3: own environment. But definitely the idea that other people must
Speaker 3: be doing better than you, because how else do people
Speaker 3: afford all these rising prices? And yeah, the promise is
Speaker 3: also it's going to make things worse, because you know,
Speaker 3: I was just we just saw that some of the
Speaker 3: SMP did their manifesto this morning and one of the
Speaker 3: things that they've explicitly said they'll imposes price controls on
Speaker 3: the price of essential goods. And I kind of like, well, man,
Speaker 3: you can't have a maximum price for bread and milk,
Speaker 3: surely in the UK. This is not South America circa
Speaker 3: the nineteen seventies. This is you know, this is even
Speaker 3: more obviously disastrous and rent controls, and you know, we've
Speaker 3: talked about them enough times and yeah, this is the
Speaker 3: sort of thing that people are talking about, you know,
Speaker 3: and the Greens talking about how there should be a
Speaker 3: no bigger gap between the highest paid person in an
Speaker 3: organization the lowest paid than a kind of issue of
Speaker 3: you know, ten to one. So we really are looking
Speaker 3: at some really pretty radical suggestions.
Speaker 1: On going down to that idea of the top which
Speaker 1: should not be more than ten times a lower wage, etcetera.
Speaker 2: I mean, they're talking about pre tax and pre welfare.
Speaker 1: And one of the things that you and I were
Speaker 1: looking at last week, was it last week or the
Speaker 1: week before, was the extent of the compression of net
Speaker 1: incomes in the UK?
Speaker 2: Yes, and such that.
Speaker 1: After tag ex after the endless benefits paid to working people,
Speaker 1: that gap is already down to not much more than
Speaker 1: three times.
Speaker 2: I mean, it's really fascinating.
Speaker 3: Wasn't it. Wasn't it the statistic that somebody had found
Speaker 3: that Britain, in terms of income equality was had actually
Speaker 3: achieved greater kind of like compression. And then the Soviet Union. Yes, yeah,
Speaker 3: So I mean, well this is the other night you
Speaker 3: think like a lot of people still believe that not.
Speaker 3: I mean, wealth inequality is a slightly different issues, more complicated,
Speaker 3: it's hard to measure, but income an equality is definitely
Speaker 3: going down. It peaked in about two thousand and seven
Speaker 3: and it has gone down significantly since then. That you can.
Speaker 3: You cannot make the argument that income an equality in
Speaker 3: this country has gone up, and yeah, lots of people
Speaker 3: do so, I mean, yeah, I think there's a lot
Speaker 3: to what you're saying about people just thinking who the
Speaker 3: hell has got all the money? Because I know I don't.
Speaker 2: Yeah, but I suppose that. I mean.
Speaker 1: The key thing with you, however people feel about it
Speaker 1: or don't feel about it, The key thing is that
Speaker 1: it is proper economic growth, the pie getting bigger round
Speaker 1: that makes people happy. And that's why governments are always
Speaker 1: so desperate to talk about growth.
Speaker 2: And we're going to get growth, and we're going to get.
Speaker 1: Growth because you say, what we really need them to
Speaker 1: do is start stop talking about growth and start talking
Speaker 1: about grow head individual incomes rising.
Speaker 2: And they don't because of course we judge.
Speaker 1: Them on growth, Delware glimally everyone checked out these jdpumber
Speaker 1: They didn't talk about individual anyway. We're getting bogged down, John,
Speaker 1: We're getting bugged down interesting and it is worrying. We
Speaker 1: better say something else in that market.
Speaker 3: Do you know what? It's something I wrote about this
Speaker 3: week The listeners might find interesting if they didn't read it,
Speaker 3: because it actually contained something approximating that kind of share
Speaker 3: tip in it was do you know how the other
Speaker 3: day you had a very good podcast with the Yanish Maraki,
Speaker 3: who was great. I thought it was a great guest,
Speaker 3: really interesting. It was basically talking about how AI is
Speaker 3: quite possibly massively overhyped, and I was on the look
Speaker 3: at all the software as the service companies that sold
Speaker 3: off in the UK, and there's still so they took
Speaker 3: a dive in January and they're still sort of floating
Speaker 3: around the same level that they bottomed out in February,
Speaker 3: and I was just thinking, if you're looking for a
Speaker 3: hedge and an easy hedge against massive EI disappointment, then
Speaker 3: maybe buying a small basket of those stocks would be
Speaker 3: quite a good diversifier for your portfolio. And conveniently they're
Speaker 3: all held by Nick Train's investment Trust, So I thought,
Speaker 3: as is quite an easy one to.
Speaker 5: No.
Speaker 3: It's been doing atrociously, like really badly, and for a
Speaker 3: good reason, because you know, the the quality style has
Speaker 3: been out of favor. It's the same way what's his name,
Speaker 3: Terry Smith, this sort of stuff has done poorly. But
Speaker 3: looking at again, you're kind of like, well, over fifty
Speaker 3: percent of the portfolio is in these you know, stocks
Speaker 3: that have been battled by the idea that AI is
Speaker 3: going to destroy their business models. So maybe if AI
Speaker 3: does turn out to be incredibly disappointing, then that will benefit.
Speaker 1: From it the pleasure to go maybe maybe one of
Speaker 1: these portfolios and has quite a lot of them in
Speaker 1: luxury good.
Speaker 3: No, I don't think that one is in Diageo or
Speaker 3: but also inshrewed those which obviously did already because it
Speaker 3: had our bed for it. So I don't think you
Speaker 3: know it's Budby. It's called Baldbury, but again.
Speaker 2: That that's what I was thinking of. Is that a
Speaker 2: luxury good.
Speaker 3: I don't know much of it fashion obviously, but I've
Speaker 3: always been a little bit skeptical of the idea of
Speaker 3: Budbury as a kine you know. I mean, it's always
Speaker 3: had that problem, hasn't it. I mean, anyway, John, I think.
Speaker 1: Anyone who's ever seen you on stage at any of
Speaker 1: our live events would say.
Speaker 2: That you know a lot about fashion.
Speaker 3: That's that's extremely caned. I'm just gonna let that one
Speaker 3: sit there with a responding to it.
Speaker 1: Okay, and I'm going to end our conversation and just
Speaker 1: leave that one.
Speaker 2: Thanks for listening to this week's Mary Talks Money debrief.
Speaker 2: If you'd like a ship rate review and subscribe wherever
Speaker 2: you listen to, podcasts also be shown.
Speaker 1: Follow me and John on ex o Twitter at Marinus
Speaker 1: w and John Underscore Graphic.
Speaker 2: This episode was produced by some SIDI production support and
Speaker 1: Sound design by Moses and Questions and comments on this
Speaker 1: show and all the shows are always welcome our show
Speaker 1: emails and money at bobog dot net