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Speaker 1: Searched Bloomberg Global News. Roger Roger Rottenham was the co
Speaker 1: founder of the technology hedge fund Galleon Group, one time
Speaker 1: managed more than seven billion dollars. He was arrested in
Speaker 1: charge with insider trading that was back in October of
Speaker 1: oh nine. Twelve days of deliberations, a jury in New
Speaker 1: York did find him guilty of fourteen counts stemming from
Speaker 1: a seven year plot to trade on insider information from
Speaker 1: corporate executives, bankers, consultants, traders, and other insiders. Sentenced to
Speaker 1: eleven years in prison for his role in what prosecutors
Speaker 1: called one of the largest hedge fund insider trading rings
Speaker 1: in US history. He did serve seven and a half
Speaker 1: years in prison. He is out. He's written a book.
Speaker 1: It's called Uneven Justice, The Plot to Sink Gallian, And
Speaker 1: we are delighted to have him in studio here in
Speaker 1: our Interactive Broker studio. Thank you for joining us and
Speaker 1: coming here. UM, how are you. I'm great, You're great. Well,
Speaker 1: I want if you would, UM, give us all the
Speaker 1: what was happening back in October of oh nine. I'm
Speaker 1: trying to take us back to the day. It was
Speaker 1: a Friday and you had FBI UH, an FBI agent
Speaker 1: knock unity door. What happened? Well, I was about to
Speaker 1: fly to London that evening Friday. Also was my son's
Speaker 1: thirteenth birthday and we're going to celebrate that, and then
Speaker 1: I was going to take the last flight, UM from
Speaker 1: New York to London. UM, if you had asked me
Speaker 1: that morning, one of the hundred things you worry about
Speaker 1: inside of trading was not one of them. If you
Speaker 1: had asked me, the FBI guy is doing a good job,
Speaker 1: but the prosecutors are doing a job. Good job. I
Speaker 1: would have said yes. I didn't know anybody who went
Speaker 1: to prison, nor did I know anybody who knew anybody
Speaker 1: who went to prison. So when I got that knock
Speaker 1: on the door at approximately six or seven o'clock kids
Speaker 1: in the house, I opened it and I saw this
Speaker 1: sea of blue um jackets with the FBI with guns drawn.
Speaker 1: And they said are you Raj Rajaratnam And I said yes,
Speaker 1: and they said you're on the rest. I said what for?
Speaker 1: And they said, we can't tell you, and then started
Speaker 1: a first inness series of misconduct. They told me that
Speaker 1: I couldn't I won't see my son for twenty five years.
Speaker 1: They said, take a good look at your wife. She
Speaker 1: looks happy because she can spend all the money, and
Speaker 1: then hand me and took me down in their car
Speaker 1: to the FBI offices. We were talking when you came in, Raj,
Speaker 1: about when you actually had time to write this book,
Speaker 1: and you said you wrote some of that and you
Speaker 1: wrote it when when you were in prison? What what?
Speaker 1: What was it like? You know? I wrote of the
Speaker 1: book by hand in prison. And as I told you,
Speaker 1: I have tremendous respect for Shakespeare and authors of that generation.
Speaker 1: Because you couldn't move paragraphs around. You couldn't do spell checks,
Speaker 1: you know. But when it's project that you're passionate about, uh,
Speaker 1: it's easy. I started writing one hour a day, then
Speaker 1: two hours and three hours, and I was exhausted after
Speaker 1: four hours. It's it's most authors will say that. I
Speaker 1: have to say, just picking back and went to mask.
Speaker 1: One of the things that as our news room knows
Speaker 1: that you were coming in to talk with us. One
Speaker 1: of the questions that so many people ask me that
Speaker 1: you know, ask him, what was jail like? Jail was?
Speaker 1: I would say, if I had to say it in
Speaker 1: one way, spartan? Um, you know, I went to boarding
Speaker 1: mistreated at all, Well not really, but you know I
Speaker 1: went to boarding school in a different country, foreign country,
Speaker 1: at the age of eleven, and that life was spartan.
Speaker 1: But you get used to it. Now. You have to
Speaker 1: be smart because in jail, like in the jungles of Africa,
Speaker 1: there are predators that tried to prey on you, try
Speaker 1: to get money from you, and you have to stand
Speaker 1: your ground and you know, give the impression that you're
Speaker 1: not going to be bullied. Did you ever run into
Speaker 1: um Rag Gypta because he was the former government SAX
Speaker 1: director He was convicted of insider trading, of passing illegal
Speaker 1: tips to you. He went to that same Massachusetts prison.
Speaker 1: Did you run into him. Did you guys have conversations? Yeah,
Speaker 1: we had breakfast every day, We played scrabble, we played bridge. Yeah. Yeah.
Speaker 1: Um So I wonder as you look back at what happened,
Speaker 1: how it evolved, would you have done anything differently in
Speaker 1: terms of how you ran your fund um and how
Speaker 1: you ran things there. No, Carol, I I don't regret anything.
Speaker 1: Let me just explain. The SEC interviewed twenty four Galleon analysts,
Speaker 1: and all of them said, we didn't see anything that's wrong.
Speaker 1: When you run a company with hundred and eighty people,
Speaker 1: somebody would see something if you did something wrong. I
Speaker 1: think what happened was the law enforcement people did not
Speaker 1: understand the hedge fund industry or the investment industry. What
Speaker 1: we do all day long is talk about stocks. I
Speaker 1: had thirty five analysts, really highly educated, highly skilled, that
Speaker 1: we were spending a forty million dollars a year. Right.
Speaker 1: That was the bedrock of my analysis and my trading.
Speaker 1: Now you might ask me why do you talk to
Speaker 1: other people. You talk to other people because you want
Speaker 1: to know what's in the market, what are people chatting about?
Speaker 1: And is your view different from that of my trades
Speaker 1: that they alleged. We had an existing can precon in
Speaker 1: position before the alleged trip. Right at that time, the
Speaker 1: U S Attorney is Supre Barara, came up with his
Speaker 1: own theory of what insided trading should be or that
Speaker 1: even he prosecuted. Five years after my conviction, the second
Speaker 1: Circuit firmly rejected his theory, saying that the person who
Speaker 1: did the trade or the tip should have known the
Speaker 1: tipper should have known that the tipper was violating a
Speaker 1: fiduciary responsibility and should have given a benefit. Soon after that,
Speaker 1: We've had a very few inside a training cases. Ros
Speaker 1: Now might be somebody listening right now and just asking
Speaker 1: the question why why we are interviewing you. You do,
Speaker 1: of course I have a book out, But what would
Speaker 1: you say to somebody who says, you know, even after
Speaker 1: these convictions, why why should people listen to you? Okay,
Speaker 1: let me just take a step back and then I'll
Speaker 1: answer your question. Number one, all proceeds of the book
Speaker 1: are going to charity, so I'm not trying to get richer.
Speaker 1: I'm not getting rich org it. Number two, this is
Speaker 1: not about Raj Raj Ratnam. This is about a bigger issue.
Speaker 1: It's social justice. And I had a front row seat.
Speaker 1: I was. They came into my apartment early in the morning.
Speaker 1: They arrested me. I went to trial. You know that
Speaker 1: of the people who are alleged, UM plea bargain. I
Speaker 1: knew there was a trial penalty, which is two x
Speaker 1: a sentence when you if you, if you pre bargain,
Speaker 1: and I spend time in prison. Right. The reason I'm
Speaker 1: writing this book is to begin a discussion on the
Speaker 1: biggest social justice issue. Number One, the FBI lied in
Speaker 1: the affricat to get a white tap on me, right,
Speaker 1: and the judge allowed it. Now, the FBI lied and
Speaker 1: the judge allowed it. Every single American should be concerned, You,
Speaker 1: Tim and Cattle, you should be concerned that the FBI
Speaker 1: can lie and listen on to you. The second point
Speaker 1: is there are no checks and balances for law enforcement
Speaker 1: with its prosecutors or FBI agents. I want to jump
Speaker 1: in because hence this really explains and you go into
Speaker 1: it all of this in your book on even just
Speaker 1: as hence the title, UM and I think we could
Speaker 1: probably go for hours, and I think it's productive that
Speaker 1: we do um, certainly as journalists and just society, to
Speaker 1: look into measures in terms of how law enforcement operates.
Speaker 1: We've certainly had a lot of conversations coming off of
Speaker 1: George Floyd over the last couple of years and just others,
Speaker 1: case after case on Wall Street or elsewhere. I guess
Speaker 1: the point is bottom line. You know, many would argue
Speaker 1: that the case against you was solid. Uh, we've seen
Speaker 1: other to go to jail right as a result connected
Speaker 1: with it. We think about a nil kumar um and
Speaker 1: I'm just wondering, I mean, do you argue in the
Speaker 1: end that you were innocent, that you that there wasn't
Speaker 1: something There wasn't insider trading, there wasn't information that was
Speaker 1: going on, or are you concerned about the process good
Speaker 1: or bad. But that got to a case that many
Speaker 1: said was very solid against you, and you were convicted,
Speaker 1: and you tried to appeal it and it and it
Speaker 1: still was undone. Those are great questions, and let me
Speaker 1: answer right as an American, I accept the juris credict number.
Speaker 1: Two Three years later, in a case against a quote
Speaker 1: conspirator of mine with the same stocks, the same district
Speaker 1: Southern District, the same cooperating witnesses. A jury found that
Speaker 1: person innocent a different jury. I'm sure you're gonna ask
Speaker 1: me why. That's because Anil Kuma, the government's chief witnessed,
Speaker 1: totally recanted on his testimony and said I didn't give
Speaker 1: large any information that was useful, and that's in the
Speaker 1: court documents. Five years later, as I said, the second
Speaker 1: circuit reversed pre Barara's position, and one last point, Mr
Speaker 1: Barrara himself in assembled the task force with some of
Speaker 1: the same judges in my case and some prosecutors, and
Speaker 1: the conclusion was the loser murkey and this tremendous confusion
Speaker 1: of the market participants. Now, as a market participant, I
Speaker 1: welcome rules. I want the rules to be followed not
Speaker 1: only by the market participants, but the authority. Do you
Speaker 1: feel like regulators, you know, don't really have enough information,
Speaker 1: don't really understand the way markets work. Are they just
Speaker 1: getting so complicated and intricate that it is tough to regulate? Well,
Speaker 1: I think I can already talk about my case. I
Speaker 1: don't think they understood the rules and the life of
Speaker 1: an investor. Number two in their enthusiasm to bring a
Speaker 1: lot of cases. Because remember this was in the aftermarket
Speaker 1: of the financial crisis and made off and all of that.
Speaker 1: They wanted somebody that because the public were crying for blood,
Speaker 1: they didn't go after any of the big banks criminally,
Speaker 1: or so they tried. Many would argue that the prosecutor
Speaker 1: prosecutors were looking certainly into the big banks, they didn't
Speaker 1: look hard enough, right, And what they did was they
Speaker 1: settled for billions of dollars. Now you know who paced
Speaker 1: those fines, the shareholders, not the management or the guys
Speaker 1: who did the mal feast. And they were banks that
Speaker 1: were hiding taxes, I mean hiding assets of Americans. There
Speaker 1: were banks that were doing a money launching for hotels
Speaker 1: and so on and so forth. So I maintain that
Speaker 1: I was not guilty. I respect the verdict of the
Speaker 1: jury because that's the bedrock of this system, and I
Speaker 1: will continue to talk about it because it's wrong, and
Speaker 1: America it's looking for a criminal justice reform. It's a
Speaker 1: bipartisan issue, and criminal justice reform doesn't stop with brutality
Speaker 1: on the street. Now, I many much broader issues there.
Speaker 1: Very quickly thirty seconds, are you an investor still do
Speaker 1: you still invest in the market. I do in technology,
Speaker 1: in technology, and my passion is investing in deceptive technologies
Speaker 1: and deceptive come. This is a great time to be
Speaker 1: an investor. There's so much going from cryptocurrency to n
Speaker 1: f t s, to cloud computing to security. So I
Speaker 1: do we missed cryptocurrencies? Yes? Bitcoin, Yes do coin? Okay,
Speaker 1: we gotta run. You are jem. Thank you for giving
Speaker 1: us time. I knew it wouldn't be enough, but I
Speaker 1: am so gracious that you did give us as much
Speaker 1: as you did. Thank you, Thank you, Carol, and thank
Speaker 1: you to thank you ros. It's a pleasure. Ra Raja Rottenham.
Speaker 1: His book is uneven, just as the plot to sink Gilly,
Speaker 1: and there's a lot of information in that book. There
Speaker 1: certainly is. Uh. Let's talk a little bit about COVID
Speaker 1: right now, because most COVID nineteen cases in that we
Speaker 1: are seeing trace to the omicron variants so far have
Speaker 1: been mild illnesses. We got this news from the US
Speaker 1: Centers for Disease Control just in the last couple of hours.
Speaker 1: We're also seeing that vaccine boosters improved protection to as
Speaker 1: much as SEV against the rapidly spreading amicron variant. This
Speaker 1: is based on preliminary UK data, So Carol, we're continuing
Speaker 1: to get more and more data about what exactly is
Speaker 1: going on with this newest variant, no doubt about it.
Speaker 1: And back as he always is on a Friday, usually
Speaker 1: Dr Ian lust Bed, a clinical professor of medicine at
Speaker 1: n y U landgown with us on the phone in
Speaker 1: New York City and so good to have you back
Speaker 1: with us. The headlines continue, but you and I and
Speaker 1: Tim know this. Um tell us about what stands out
Speaker 1: for you, and especially that latest mask wearing that we're
Speaker 1: getting from the New York Governor saying that uttering all
Speaker 1: businesses to require masks indoors if they do not have
Speaker 1: a vaccine requirement. Hey guys, Happy Friday. And uh, I
Speaker 1: don't have any insight information on the governor, but I
Speaker 1: can say that, uh, you know, mask mandates, UH, you
Speaker 1: know can make sense in some circumstances. You know, part
Speaker 1: of the problem is what kind of masks and how
Speaker 1: they're worn, uh, and enforcement and uh and how effective
Speaker 1: were they really when you already have infection throughout the community.
Speaker 1: So there are really a lot of questions. I think
Speaker 1: the Governor's approach is trying to feel like they're doing something. Uh,
Speaker 1: and this is relatively benign. I mean, that's you're not
Speaker 1: forcing anyone to get vaccines. Okay, So Dr Lesbia, that's
Speaker 1: so interesting that you say that, because that's exactly the
Speaker 1: response ies offering people on Twitter who are like, wait
Speaker 1: a second. If you've been living in New York, which
Speaker 1: you know, in New York City at least, which um
Speaker 1: has really high adherence to mask wearing. Despite the complaints
Speaker 1: that I make about writing the subway each and every day,
Speaker 1: the fact is almost everybody except one or two people
Speaker 1: in the car are wearing a mask. This isn't going
Speaker 1: to change much for you. You You know, I agree with
Speaker 1: you most people, although I was out on the streets
Speaker 1: of New York and there are a fair number of
Speaker 1: tourists and many people are are not wearing mask. But
Speaker 1: that's outside right, That was outside right, Yeah, exactly right.
Speaker 1: We don't need to I mean, correct me if I'm wrong,
Speaker 1: but we don't need to wear masks outside right, totally
Speaker 1: correct that You're there's really minimal, minimal risk. So I
Speaker 1: do think, um, you know, there can be some benefit.
Speaker 1: You know, it turns out that for most of us
Speaker 1: in close quarters, for example, seeing patients. You know, we're
Speaker 1: we're wearing masks, and uh, it really is kind of
Speaker 1: a thick soup. Right, people are vaccinated, we're partially vaccinated.
Speaker 1: You know, what's the benefit of a third shot? As
Speaker 1: you say there, there does seem to be some benefit
Speaker 1: with that. The good news is, at least based on
Speaker 1: the data from South Africa and the UK, is that
Speaker 1: this omicron variant is a it's probably gonna spread quite rapidly,
Speaker 1: be it does not appear to be giving severe disease,
Speaker 1: which I think was the relief news last Friday, you know,
Speaker 1: when we saw markets about face from sort of minus
Speaker 1: four hundred back back up a bit. So I think
Speaker 1: eventually we are all going to get O macron because
Speaker 1: we see even people who have had Delta, at least
Speaker 1: in South Africa are are having uh infections with O macron.
Speaker 1: It does look like that third shot for the time being,
Speaker 1: really does reduce any sort of severe disease, which is
Speaker 1: certainly encouraging as well. But I think, you know, government
Speaker 1: is trying to do what they can do. Let's have masks.
Speaker 1: How effective it's going to be, It's hard to know.
Speaker 1: I think it will make some positive impact. Will that
Speaker 1: just delay everyone eventually getting O macron? It's hard to know.
Speaker 1: My gut feeling is that probably most of us will
Speaker 1: get it, will probably have mild infection. We won't even know.
Speaker 1: And part of the reason is we don't test everyone.
Speaker 1: We may test people and you get that COVID positive
Speaker 1: or negative, but you don't know what strain it is.
Speaker 1: Just quickly, do we be worried about um? If we
Speaker 1: all get a macron? Are there going to be long
Speaker 1: haulers as a result of it? Like? Do weaker variants?
Speaker 1: I guess if you can call it a weaker variant UM,
Speaker 1: does it still have the long haul concerns? And just
Speaker 1: got about thirty seconds real quick? Oh, I'm sorry, we
Speaker 1: have a couple of minutes forgive me. No, no, I
Speaker 1: think it's a great question, and you know, I think
Speaker 1: it really is too early to tell. In general, most viruses,
Speaker 1: as we say, mutate to become more infectious, and this
Speaker 1: is certainly an example of that. And most viruses mutate,
Speaker 1: you know, as a selective advantage to be less lethal
Speaker 1: to their host, uh, you know, to the people who
Speaker 1: get the infection. So if that's the case, I think
Speaker 1: we will have less long hold to worry about. But
Speaker 1: we certainly with delta, we certainly have almost a third
Speaker 1: they say, of people who have had Delta may have
Speaker 1: some long hold symptom or another. We haven't really seen
Speaker 1: that with O macron yet. So fatigue and headache and
Speaker 1: and O macron. The key feature there is this fatigue
Speaker 1: element headache, muscle ache. So you know, if you have that,
Speaker 1: certainly it's reasonable to to get tested. You know, when
Speaker 1: we do have you know, treatments. It's not clear whether
Speaker 1: the monoclonal antibodies that were helpful for Delta will be
Speaker 1: all that helpful for omicron. We haven't really seen that. Also,
Speaker 1: definitely a thick soup. Well, I'm wondering dr les better
Speaker 1: if indeed the data that we're getting that it is
Speaker 1: is not as dangerous. And I want to be really
Speaker 1: careful with my words here because we are still getting
Speaker 1: a lot of data, but we know it's more transmissible.
Speaker 1: Is this potentially how the this this pandemic kind of ends.
Speaker 1: Does the does the omicron variants spread and and we
Speaker 1: all get it and hopefully that's okay. I think that's
Speaker 1: exactly what will happen. Tim. I think we will all
Speaker 1: be getting this highly transmissible to one degree or another.
Speaker 1: Most of us will not feel sex some of us
Speaker 1: may not feel sick at all. There probably will be
Speaker 1: a few people who are immunocompromised who don't do well.
Speaker 1: But I do think eventually, when we all get antibodies
Speaker 1: to this and it spreads through billions, that will be
Speaker 1: how the pandemic ends. There may be other variants, they'll
Speaker 1: probably be less effective in competing with O. Macron. Uh.
Speaker 1: And I do think that's probably the scenario over time. Uh,
Speaker 1: you know, unless we get a surprise, you know, more
Speaker 1: lethal variant which doesn't hopefully will not happen. Hey, that
Speaker 1: masse by center of it's at the center of an
Speaker 1: investigation to a possible new COVID NIGHTEA outbreak in Taiwan.
Speaker 1: Or that's after I work at a high security lab
Speaker 1: was confirmed as the island's first local case in more
Speaker 1: than a month. Does that alter your thinking at all
Speaker 1: about this? Well, the whole situation with labs and and
Speaker 1: viral manipulation, you know, it was always a big question
Speaker 1: and concerned, you know, could there be other strings that developed?
Speaker 1: It looks like at this point, oh Macron, because for example,
Speaker 1: there's a ten day incubation period. I think this is
Speaker 1: going to be our final variant. It's hard to tell.
Speaker 1: I don't have a crystal ball, but I think, um,
Speaker 1: we will all get a reasonable number of antibodies, and
Speaker 1: if future variants come along, hopefully we will not be
Speaker 1: so sick. And uh, ultimately, I think that's what will
Speaker 1: how it will all play out, all right, Thank you
Speaker 1: so much. Hey, have a good weekend. Dr In los Pader,
Speaker 1: clinical professor, medicine and why you landgo medical Center on
Speaker 1: the phone in New York City. How are you feeling
Speaker 1: over there, buddy, I'm feeling okay. Now, I'm glad I
Speaker 1: got a booster. You're listening to Bloomberg Business Week with
Speaker 1: Carol Masser and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Hey,
Speaker 1: so we mentioned earlier in our boy to the Day
Speaker 1: about a lot of more than eighty containerships that were
Speaker 1: waiting two dock at the ports of l A and
Speaker 1: Long Beach, California, cutting half an EVM, although, as we
Speaker 1: pointed out, not exactly the case, right Tim, the vessels
Speaker 1: are disappearing from the cure, actually hiding from it. They
Speaker 1: were loitering out the Pacific, out of reach of that
Speaker 1: official count. Everyone thought it was transitory. But well, just well,
Speaker 1: somebody who's not hiding today is Mr. Ed Ludlow. He's
Speaker 1: our West Coast correspondent at Bloomberg News. He's on location
Speaker 1: with us and the Port of Los Angeles. Ed, give
Speaker 1: us an update about what you're seeing. You were there
Speaker 1: a few months ago. What's it looking like now? Yeah,
Speaker 1: things are worse by all accounts. You know, it's interesting
Speaker 1: because the data tells different stories. You know. You have
Speaker 1: the ships that Carol is just talking about them, seven
Speaker 1: of them, not just in the San Pedro Bay, which
Speaker 1: is immediately next to the port, but even further out
Speaker 1: tens of miles into the Pacific Ocean because they can't
Speaker 1: get a birth here at the Port of Los Angeles
Speaker 1: or Long Beach, and they're waiting on average three weeks
Speaker 1: to come into ports to be on unloaded. It takes
Speaker 1: three weeks to come from China to the West Coast
Speaker 1: of America anyway, So they wait eating as long a
Speaker 1: anchor as it took them to make the journey in
Speaker 1: the first place. And all of that means tight inventory, right,
Speaker 1: tight supply. The things they're carrying and not making their
Speaker 1: way to shelves. And you saw in the CPI print
Speaker 1: this morning that means higher inflation. So wait, okay, better
Speaker 1: than it was the last time you were. There are
Speaker 1: a lot worse, Like, how do we measure this? Yeah,
Speaker 1: it's it's a really good point. I was last here
Speaker 1: in the last week of September and I put this
Speaker 1: point to the Port of l A executive director Jean Siroka,
Speaker 1: are things better and how can you prove that? And
Speaker 1: he basically said that volumes are the same, right, the
Speaker 1: demand from the consumer is still great. The same amount
Speaker 1: of stuff is coming in and that's a challenge. They
Speaker 1: have opened the port, they say seven. Normally they'd worked
Speaker 1: four hours a week or something, but they've opened. He
Speaker 1: says that what's that What that has meant is, well,
Speaker 1: you look over my shoulder for the YouTube audience and
Speaker 1: for the radio audience behind me, are towers of contain
Speaker 1: has stacked one on top of the other. The executive
Speaker 1: director of the reports says those idol containers aging containers,
Speaker 1: they call them a down six since late October when
Speaker 1: they basically started finding people that weren't moving them on. However,
Speaker 1: I just spoke to the CEO of the Harbor Trucking Association,
Speaker 1: which represents the truck drivers that come and pick up
Speaker 1: these trucks, and he says, seven thing is nonsense and
Speaker 1: things are getting worse for them because they're not able
Speaker 1: to take containers away because there are too many empty
Speaker 1: containers filling up spots for containers that have stuff in them.
Speaker 1: It's just fascinating. So that's the problem that right that
Speaker 1: was there before. Well, it's like this chain reaction. And
Speaker 1: if there is sort of one area where there's I
Speaker 1: mean that is it's a supply chain right where there
Speaker 1: is a bottleneck, then you're going to see that. Okay,
Speaker 1: so what's the solution for these empty containers? Then? Yeah,
Speaker 1: this is what's so fascinating that you know, there's no
Speaker 1: quick fix. There's a system. A truck driver arrives, is
Speaker 1: given a ticket. The ticket tells him which lane to
Speaker 1: go to which container. He pulls up to that lane,
Speaker 1: the container goes on his truck, and he drives away
Speaker 1: or she drives away to the destination where the container
Speaker 1: is destined. What we're hearing is that there aren't appointments available.
Speaker 1: The congestion here is such that there's just not enough
Speaker 1: room to move around. There are too many empty containers
Speaker 1: in the way. So you know, the long term seems
Speaker 1: to be better infrastructure, not hard infrastructure, but also software
Speaker 1: technology that can better synchronize the different arms of the system.
Speaker 1: If there is one bright spot, remember that's just the
Speaker 1: truck drivers. The other way the containers leave the port
Speaker 1: is on rail. You can't see it behind me for
Speaker 1: the YouTube audience, but you have to take my word
Speaker 1: for it for the radio audience on the other side
Speaker 1: of the port of rail lines where they just move
Speaker 1: the containers off the ship, straight onto the rail and
Speaker 1: off it goes to its next destination. And that's where
Speaker 1: we are seeing improvement. Okay, So that's that's sound a
Speaker 1: little bit of good news. Okay, So how can we
Speaker 1: think of what happens we're moving forward from here? If
Speaker 1: we think about this as you know, once in a
Speaker 1: lifetime supply chain bottleneck, when do things actually start to
Speaker 1: get better. There's a range of forecasts. You know, we've
Speaker 1: been speaking to people all day long. I think the consensus,
Speaker 1: it's fair to say, is that supply chain constraints in
Speaker 1: terms of the ability to move goods efficiently. Last well
Speaker 1: into at least two hot second half of two, potentially
Speaker 1: even three. What this whole situation has exposed our long
Speaker 1: term shortcomings in infrastructure, and again I'm not just talking
Speaker 1: about hard infrastructure, roads, rails, port space. I'm talking also
Speaker 1: about digital infrastructure, the ability to coordinate between lots of
Speaker 1: different parties. And what you hear from all of them,
Speaker 1: irrespective of whether they blame each other, is that there
Speaker 1: needs to be better data sharing to fix this issue,
Speaker 1: and that does all require money. Unfortunately, the federal government
Speaker 1: seems to be putting its money where its mouth is.
Speaker 1: So it's a lot of reasons why we still haven't
Speaker 1: cleared it. Um, Yeah, what's the outlaw care? Any indications,
Speaker 1: any clear clarity on that? Not? Not in particular. I mean,
Speaker 1: one thing that that all parties want to see is
Speaker 1: the passage of this bill that was passed in the
Speaker 1: House yesterday and is now headed to the Senate, and
Speaker 1: that is around regulation. I can't believe I've steered the
Speaker 1: conversation towards regulation, but what they want is basically rules
Speaker 1: that hold the different parties to account. Remember the empty
Speaker 1: container issue from the truck driver's perspective, that's them saying
Speaker 1: you are the sport managers. You need to make it
Speaker 1: possible for us to pick up containers that actually have
Speaker 1: stuff in them. And there's a feeling that this build
Speaker 1: that's making its way through the Capitol will do that.
Speaker 1: It will hold different parties in the sports system to account,
Speaker 1: which long term means it will run more efficiently. M hmm, Okay,
Speaker 1: perhaps that's not a no, it's a good it's a
Speaker 1: really good answer. It's just like, you know, we're in
Speaker 1: unprecedented territory here. I think there's no sort of there's
Speaker 1: no playbook for this, and I think people, just like
Speaker 1: when it comes to the virus, are are figuring this
Speaker 1: out as this happens in real time. ED. Yeah, I
Speaker 1: mean I Tom Keene is off today. But I didn't
Speaker 1: know that first. So I went and opened my history
Speaker 1: books to understand the history of this place, and I
Speaker 1: also looked at the data around consumer demand. Right now,
Speaker 1: these were built in a time where Amazon dot Com
Speaker 1: didn't exactly, but Amazon has been around for a while.
Speaker 1: I've been getting a lot of pracktages from Amazon for
Speaker 1: years talking. I'm talking decades, and the thing is serious.
Speaker 1: I love love, thank you so much. That's I Love,
Speaker 1: the West Coast correspondent for Bloomberg News, joining us on
Speaker 1: location from the port of Los Angeles. This is Bloomberg
Speaker 1: Business Week with Carol Masser and Bloomberg Quick Takes. Tim
Speaker 1: Stinovic on Bloomberg Radio. All Right, there's a great story.
Speaker 1: I gotta say, it's really a favorite story of mine
Speaker 1: this week is to look at the side are a
Speaker 1: side of E s G investing that many of us
Speaker 1: are either misunderstanding or just ignoring it. The story in
Speaker 1: the magazine is called the E s G Mirrage Tim.
Speaker 1: It's among our most read in the Bloomberg terminal today.
Speaker 1: It's the Bloomberg Big Take. It's also I'm going to
Speaker 1: say it's a must read in this week's new issue
Speaker 1: of Bloomberg Business Week magazine. Yeah, that magazine available on
Speaker 1: newsstands now and at Bloomberg dot com slash business Week.
Speaker 1: Cam Simpson is one of the three bylines on the piece.
Speaker 1: He's the Projects and Investigations reporter for Bloomberg News and
Speaker 1: joins us on the phone from London. Cam I echo
Speaker 1: Carol's comments about this piece. I think it's fantastic, and
Speaker 1: I also encourage people to read it online because of
Speaker 1: the interactive nature of it. But let's just start with
Speaker 1: M s C I because it's also a deep dive
Speaker 1: into M s C I. So, so what is M
Speaker 1: s C I and and how are they involved in
Speaker 1: E s G. Yeah, thanks so much for having me go.
Speaker 1: So I'd love to talk about this. Um. You know,
Speaker 1: MSCI has sort of been like a critical back office
Speaker 1: company on Wall Street for years that nobody ever heard of.
Speaker 1: It was broad public in two thousand and seven and
Speaker 1: they produced, you know, they produced indexes for for the
Speaker 1: asset management business, like you know, uh, indexes that people
Speaker 1: turn into portfolios, model portfolios or even used to build
Speaker 1: E s G R E t F funds. And then
Speaker 1: you know, they got in two thousand nineteen because they've
Speaker 1: been building up a business of E s G ratings,
Speaker 1: you know, creating the ratings that are the basis the
Speaker 1: underlying foundation of the entire E s G investing universe,
Speaker 1: which is you know, it's just completely skyrocketed and they
Speaker 1: now totally dominate this business. You know, more than more
Speaker 1: than sixty cents out of every dollar in retail funds
Speaker 1: Bloomberg Intelligence calculated goes into funds that are built on
Speaker 1: M s C I S E s G alone is
Speaker 1: a crazy statistic. But well we put that to Nry
Speaker 1: Fernand's there's the only CEO and chairman M. S c
Speaker 1: I has ever had, and me said, no, that figure
Speaker 1: is too low. It's every They're everywhere. Nobody else is
Speaker 1: even close, right, I mean, so much money, trillions of
Speaker 1: dollars are are being allocated based on these ratings and
Speaker 1: nobody really knows what they are, and nobody really understands
Speaker 1: what they are, and very fundamental basic things about them
Speaker 1: people don't get. So we just some kind of from
Speaker 1: first principles decided what does it take to be an
Speaker 1: investment grade E S G company? I mean they mimic
Speaker 1: the credit ratings right to which kind of gives them
Speaker 1: an order of credibility that they don't deserve. They're not regulated,
Speaker 1: the data is not regulated that they're based on. Like,
Speaker 1: it's just kind of everybody can come up with their
Speaker 1: own system, and everybody does come up with their own systems,
Speaker 1: and so cam I'm just gonna jumping because first of all,
Speaker 1: and everybody should read it and also check it out
Speaker 1: online because it's kind of a fun interactive way that
Speaker 1: it's been put together online as well, but there's a
Speaker 1: box highlighted if you read it online, it says some
Speaker 1: companies with massive emissions or that have controversial records on
Speaker 1: climate change while they still manage upgrades, including for environmental factors.
Speaker 1: And I wrote next to it, wait, what, so how
Speaker 1: does that happen? Yeah? Well, I mean, look, you have
Speaker 1: to understand the basic lens of the system. So this
Speaker 1: to to kind of look at your impact on the
Speaker 1: world as a company. It's designed to do the opposite
Speaker 1: of that, is designed to look at risk that the
Speaker 1: world is creating to your bottom Climate change is a
Speaker 1: great example. You know, unless you're a utility that's regulated
Speaker 1: for burning fossil fuels, climate change is in the risks
Speaker 1: you at all. It doesn't even factor in your score
Speaker 1: because the score is about is regulation going to cost
Speaker 1: your bottom line? Regulation from climate change? It's not are
Speaker 1: you contributing to climate change? Okay? So then when okay?
Speaker 1: So yeah, so I I guess the question is where
Speaker 1: where does the consumer come into this? Because if M
Speaker 1: s C I has this clear understanding of what happens,
Speaker 1: and I don't know if the asset managers do as well,
Speaker 1: but then they sell these products to asset managers who
Speaker 1: in turn or offer these products asset managers, who in
Speaker 1: turn offer them to perhaps every day investors. Do where's
Speaker 1: the message lost? Because the message changes when it gets
Speaker 1: to the consumer. Look, it's lost from start to finish.
Speaker 1: This is the This is by far biggest growth area
Speaker 1: in the global financial services industry, and everybody is jumping
Speaker 1: in with both feet because it's a place for them
Speaker 1: to make money. Black Rocks got the biggest et f
Speaker 1: in the world. Uh, and it's built on M s
Speaker 1: c I data. And you know, one of the only
Speaker 1: really critical differences between this and their core SMP five
Speaker 1: hundred fund is that they charged five times the fees.
Speaker 1: I mean, that's that's I think really what this is about.
Speaker 1: That feels like that goes against e s G standards
Speaker 1: or metrics. Doesn't it feel that way? Well, But but
Speaker 1: not if you really know what the s G metrics are,
Speaker 1: because the metrics kind of what you think they are, right,
Speaker 1: So you know, look, we lifted up the hood. We
Speaker 1: looked at a hundred and fifty five upgrades. We looked
Speaker 1: at every upgrade in the SMP five hundred, every company
Speaker 1: that got an upgrade in this record period of growth,
Speaker 1: All of last year and the first half of this year.
Speaker 1: And you know, we pretty much forensically show what you know,
Speaker 1: even when it's not stuff that's in directly contradiction to
Speaker 1: making the better, which is msci's marketing, and rebranded the
Speaker 1: company and Fernandes them and in two thousand nineteen at
Speaker 1: the start when he saw this coming, this boom, you know,
Speaker 1: the new brand is better portfolios are better investments for
Speaker 1: a better world. And so this is what everybody sells.
Speaker 1: It's the main pitch of the s G. But reality
Speaker 1: is is the opposite. You can do more damage. You
Speaker 1: can have increased the carbon footprint of your portfolio by
Speaker 1: investing not just in E s G but in E
Speaker 1: s G portfolios and companies that have high E ratings
Speaker 1: like you said right like McDonald's is a great example.
Speaker 1: There are emissions because of their supply chain, biggest beef,
Speaker 1: one of the biggest beef purchasers in the world, same
Speaker 1: as Portugal or Hungry, and they were going up and
Speaker 1: part of their score, MSc I took them out of
Speaker 1: the calculation of their score because they're not a utility
Speaker 1: burning fossil fuel, so it's not going to cost them anything.
Speaker 1: One thing I would say is and what's interesting is
Speaker 1: I remember remember like early on with the E s
Speaker 1: G conversation, it's we started talking about, hey, folks, the
Speaker 1: reason as investors you have to care about climate change,
Speaker 1: even if you don't believe it, is that it's happening
Speaker 1: and it's going to impact companies. There will be financial
Speaker 1: impacts on their bottom lines as a result. So I
Speaker 1: kind of understand a little bit where M s c
Speaker 1: I is coming from. But when you think about all
Speaker 1: the marketing that's going on when it comes to E
Speaker 1: s G funds, I think investors a lot of them
Speaker 1: were thinking, wait a minute, we're making investments that really
Speaker 1: help the environment. But there are a lot of critics
Speaker 1: out there. And you mentioned to Wreak Fancy in your story,
Speaker 1: who was formerly head of E s G Blackrock. Um.
Speaker 1: There's so much in this story, including specific companies like
Speaker 1: JP Morgan, Dr Horton, that you go into uh McDonald's,
Speaker 1: which I really highly recommend that everybody check out because
Speaker 1: it really resonates and really gets very specific. Cam terrific,
Speaker 1: Thank you so much. Cam Simpson, Projects and Investigations reporter
Speaker 1: up Bloomberg News on the phone from London, um, we
Speaker 1: apologize some of the audio was a little funky. He's
Speaker 1: in our weekend show, which is eight am on Bloomberg Radio.
Speaker 1: Also on her podcast feed, so you can hear a
Speaker 1: little bit more there. It's a little bit more of
Speaker 1: a clearer feed. And also perhaps you before you listen
Speaker 1: to that, go and check out camp. Story is available
Speaker 1: in the new issue of Bloomberg Business Week magazine. It's
Speaker 1: available on news stands. Also check it out on the
Speaker 1: Bloomberg terminal and then of course at Bloomberg dot com
Speaker 1: slash business Week. Again, some really good interactive features in
Speaker 1: the story, so a good one to read online. You're
Speaker 1: listening to Bloomberg Business Week with Carol Messer and Bloomberg
Speaker 1: Quick Takes Tim Stinovic on Bloomberg Radio. All Right, it's
Speaker 1: a bitcoin on pace for its fourth consecutive weekly decline
Speaker 1: after brief bounce triggered by report showing US inflation accelerated,
Speaker 1: failing to unwind the negative sentiment that has recently gripped
Speaker 1: digital asset markets. It's really been a trade as of late.
Speaker 1: In our weekly cryptocurrency segment, back with us Jusaka Chaw,
Speaker 1: she's head of OTC options Trading at the crypto exchange Crack,
Speaker 1: and she's also co founder of America's first approved crypto
Speaker 1: derivative platform, led your X. She's on the phone in
Speaker 1: New York City. Forgive me for that mispronunciation. UM, good
Speaker 1: to have you back with us. You know, as we
Speaker 1: get more market information analysis on crypto, is there any
Speaker 1: conclusions on the usefulness or lack there of a bitcoin
Speaker 1: as an inflation hedge? Well, I think that the inflation
Speaker 1: hedge is definitely um a piece of not just the
Speaker 1: narrative but um of the fundamental offering of bitcoin. But
Speaker 1: at the same time, it is an early asset. You know,
Speaker 1: it is still the early days and has a lot
Speaker 1: of idiosyncratic risk. And then I think on top of
Speaker 1: that d as it's gotten more institutionalized, there's more and
Speaker 1: more overlap in the participant base between the traditional markets
Speaker 1: and the crypto markets, and so that will necessarily lead
Speaker 1: to price action that might be more correlated in certain
Speaker 1: cases um than in others. So I think the short
Speaker 1: of it is that many people who are investing in
Speaker 1: bitcoin are doing so because it is an inflation hedge.
Speaker 1: I think over time one would expect that to play out,
Speaker 1: But over shorter periods of time time, whether it's macro
Speaker 1: or idiosyncratic, there are a lot of other drivers of prices. Okay,
Speaker 1: So if it's an inflation hedge, was today's high report
Speaker 1: that did come in line with expectations? Was that priced
Speaker 1: in help us understand recent moves with the with the
Speaker 1: inflation read that we got today, because because I should
Speaker 1: know it. As Carol mentioned cryptos, you know Bitcoin right
Speaker 1: now is just hired by six tents of one percent.
Speaker 1: It's kind of jumped around a little bit today. Yeah.
Speaker 1: I think the short term price moves are due more
Speaker 1: to UM the flows between the traditional markets and the
Speaker 1: crypto market. So to use an example, if you look
Speaker 1: back at something like Thanksgiving or when you get a
Speaker 1: large crash, UM when there's an overlap of participants between
Speaker 1: the two and cash is king at the end of
Speaker 1: the day, UM, cash is king, whether it's crypto or
Speaker 1: whether it's traditional. Now where you start to see um
Speaker 1: some differentiation would be I think as things stabilized a
Speaker 1: little bit in the traditional markets and institutions come back
Speaker 1: in to reallocate to portfolios into risky assets is where
Speaker 1: I think we'd start to see more differentiation. But over
Speaker 1: the short term, like if we're talking, you know, number
Speaker 1: minutes after a number comes out. I think it's driven
Speaker 1: more by those kinds of dynamics. Jus, you know, I'm
Speaker 1: just thinking we're almost down with one. What stands out
Speaker 1: about this past year when it comes to cryptocurrencies, Well,
Speaker 1: you know, for me, it's just the immense volatility still.
Speaker 1: You know, I think if you had asked me or
Speaker 1: folks in the space a few years ago, if bitcoin
Speaker 1: hit a trillion dollar market cap, would you expect it
Speaker 1: to be less volatile? The answer would be absolutely and
Speaker 1: expected maybe to be up I don't know, forty fifty ball,
Speaker 1: and it sustains a like a realized of seven d
Speaker 1: ish ball is implied ball of ninety. And so I
Speaker 1: think that's really what stood out this year is even
Speaker 1: though um we've seen massive price appreciation, the volatility still
Speaker 1: remains immensely high. Was just literally one month ago, November
Speaker 1: tenth is when we hit all time highs at sixty
Speaker 1: eight k as was highlighted in the Cracking Intelligence report
Speaker 1: UM and and that was just a month ago, and
Speaker 1: now we're lower. So I think that it's still even
Speaker 1: though it has matured in a lot of ways the
Speaker 1: volatility points to uncertainty, UM, fear from the traditional markets,
Speaker 1: just a number of factors that are still UM still
Speaker 1: out there. On Wednesday we saw eight. We saw a
Speaker 1: handful I should say, crypto executive space, House lawmakers. It
Speaker 1: was on the eighth, just a couple of days ago.
Speaker 1: Your big takeaway from what we saw in terms of
Speaker 1: what we should expect when it comes to the way
Speaker 1: that lawmakers are thinking about regulation. I think it was
Speaker 1: more constructive than UM than a lot of people were
Speaker 1: worried about. Keep hearing that. The questions were pretty good
Speaker 1: from lawmakers, right, Yeah, exactly they were. They were good,
Speaker 1: and honestly, credit to them because it's very difficult to
Speaker 1: keep up with everything that's going on in the space,
Speaker 1: and they have and they obviously have day jobs too,
Speaker 1: so they had to handle on it. And I think
Speaker 1: the tone overall was more constructive, and especially over the
Speaker 1: summer when UM the tone especially out of the SEC
Speaker 1: was coming out about some of the impending regulation. I
Speaker 1: know there was a lot of concern in the crypto space,
Speaker 1: and so I think to a degree, UM, I wouldn't
Speaker 1: say that regulation has been d risk, but I think
Speaker 1: that folks maybe feel a little bit more comfortable that
Speaker 1: it will be more of a constructive environment. Hey, jes
Speaker 1: think I just got about thirty forty seconds left hair crypto,
Speaker 1: uh currency collectible? Are we still trying to figure out
Speaker 1: exactly what it is? And just quickly, um, Well, n
Speaker 1: f T s are still having a really strong month,
Speaker 1: etheriums having a very strong month, and obviously Bitcoin as
Speaker 1: the inflation head. So I think all of the above
Speaker 1: is the short answer. Okay, well said, Well said. And
Speaker 1: we talked about n f T s and art. It's
Speaker 1: in our weekend show as well. I mean, it's interesting
Speaker 1: to see what the auction houses are doing right here,
Speaker 1: and U n f T. I'm a traditional list, I mean,
Speaker 1: right like art, I'm with the art in the out
Speaker 1: of all, I remain I'm open minded. I yet to
Speaker 1: be convinced, but I do like the idea. And f
Speaker 1: t's in fashion that maybe it's pretty cool. You have
Speaker 1: so much. You talk about that in the new issue
Speaker 1: of Bloomberg Business Week magazine as well. All right, do
Speaker 1: you think a chat she's head of OTC options trading
Speaker 1: at crack and on the phone in New York City. Yeah,
Speaker 1: but you let me drive? Oh no, no, no, no,
Speaker 1: this is not a toy home. All right, please, I
Speaker 1: want to drive. It's a good question. This is the
Speaker 1: drive to the clothes on Bloomberg Radio. TikTok, everybody, just
Speaker 1: about Timmans left in today's trading session. Hey, we are seeing,
Speaker 1: certainly on the SNP and the Dow, a leg up
Speaker 1: to our top levels, best levels of the session. So
Speaker 1: we're seeing some buying into the clothes here on what's
Speaker 1: been a really bullish week for the your equity averages. Well,
Speaker 1: let's get into it with Ryan Dietrich, chief market strategist
Speaker 1: at LPL Financial. He joins us on the phone from Charlotte,
Speaker 1: North Carolina. Hey, Ryan, how are you? Hey? Tim and Carol.
Speaker 1: I'm I'm glad to be back. And like you said,
Speaker 1: we might have new all time highs today. So what
Speaker 1: did day to come on the radio with you. Well,
Speaker 1: let's talk some technicals here, because I know that's what
Speaker 1: certainly what you focus on. What are you keeping an
Speaker 1: eye on, especially in the wake of the fundamental data
Speaker 1: that we got when it came to inflation today. Yeah, him,
Speaker 1: I mean you think about let's go back a week
Speaker 1: ago just for a second, right, we had all the
Speaker 1: selling the concerns. There was actually some buying late on
Speaker 1: the last Friday a week ago today. Now you fast
Speaker 1: forward to this week up three and a half percent,
Speaker 1: the best week for equities since February, and today, if
Speaker 1: we closed it an all time high would actually be
Speaker 1: the sixty seventh all time high this year at the
Speaker 1: second most all time highs ever for the SP five,
Speaker 1: and would be the first new high of December, making
Speaker 1: it twelve or twelve. Every single month this year we
Speaker 1: had a new all time high on the SMP. Only
Speaker 1: has ever done that. There's some cocktail bets you could
Speaker 1: bet there that four teen made new highs all twelve months.
Speaker 1: But here you go, what does it all mean? Well,
Speaker 1: you know, we come up, go on for a while,
Speaker 1: and fundamentals are decent, and the and they're strong actually,
Speaker 1: and the technicals are strong. But to us is the
Speaker 1: question as well, you know, we'll Santa come to town.
Speaker 1: And you look at history the first half of December, guys,
Speaker 1: historically it's kind of choppy and volatile. It's the second
Speaker 1: half of December that's usually strong. And we don't need
Speaker 1: too many reasons to think that, you know, Santa might
Speaker 1: come to town again and we can have a four
Speaker 1: bias to end this year, hence the Santa Class rally.
Speaker 1: Let me just correct, so you're saying we could be
Speaker 1: near our sixty seventh all time high in the SMP,
Speaker 1: and this would be this the second year that we've
Speaker 1: seen the most highs on the SMP team being the last. Well, no,
Speaker 1: so that is the most all time highs for any
Speaker 1: one year only other than more new all time highs.
Speaker 1: But this is the only other year besides to have
Speaker 1: a new high all twelve months'ways despice the data, but
Speaker 1: still the bottom line one has been amazing. Maybe let's
Speaker 1: put it that way. Okay, So you you obviously I
Speaker 1: can hear the optimism you talk about the technicals, and
Speaker 1: I like looking at technicals to ryan what specifically are
Speaker 1: seeing that technically shows that this is a strong market
Speaker 1: with the ability to continue a move to the upside
Speaker 1: on the equity side. Yeah, I mean you great question there.
Speaker 1: I mean you look at kind of what's been leading us,
Speaker 1: and it is you know, it's it is your industrials, right,
Speaker 1: your cyclical cyclical value names have been doing well. Financials
Speaker 1: been hanging in their technology, which last I checked, the
Speaker 1: most important group largest group in the SP five hundred
Speaker 1: it on a relative basis has broken out to all
Speaker 1: time highs on a relist drink basis verse SMP five hundred.
Speaker 1: So there are the correct groups in our opinion that
Speaker 1: are leading, and those are positive signs. We had the
Speaker 1: little law, we had some selling you know, here and
Speaker 1: there throughout the year, But the true leaders of this
Speaker 1: market are the more aggressive areas and those are what
Speaker 1: are leading, and we like to see that, and that's
Speaker 1: a real positive. And again it doesn't mean we're gonna
Speaker 1: go straight up. I mean next year is a mid
Speaker 1: term yere, right, I mean, let's talk next year for
Speaker 1: a second. I want to ask you about Ryan, is
Speaker 1: is how this all translates into what happens in Yeah,
Speaker 1: let's let me dust it off for a second here. So, um,
Speaker 1: you know, you think about it this year when you
Speaker 1: go back in history, guys, when you gain twenty percent,
Speaker 1: that next year has been higher in the last nine times,
Speaker 1: and seven of them a double digits. So that's just
Speaker 1: one data piece, but it does suggest the bull market
Speaker 1: is still alive. But the other thing is it's a
Speaker 1: mid term year. Historically, when you look at the four
Speaker 1: year cycle, the mid term year is the most volatile.
Speaker 1: You have nearly a nineteen percent pete to trough average
Speaker 1: correction since the sixties, the last fifty years or so
Speaker 1: during a mid term year. Remember twenty eighteen we got
Speaker 1: almost a twenty percent correction in eighteen. UM stocks actually
Speaker 1: down in if we remember, you know that that time frame,
Speaker 1: So just be aware it's not gonna be quite as easy.
Speaker 1: But still with the fundamentals the uh, you know, the
Speaker 1: monetary policy, fiscal policy tail winds there with a strong
Speaker 1: economy being led by the consumer, we'd still bet on upside.
Speaker 1: But we're not probably gonna gain twenty five percent next year.
Speaker 1: But hey, we take a ten to twelve game next year,
Speaker 1: and that's kind of what we think could happen. So okay,
Speaker 1: I hate to use this phrase of taking money off
Speaker 1: the table, but you know, you can be greedy and
Speaker 1: you can go too far. And what is an outpoint then?
Speaker 1: I mean, you obviously are bullish, I get it, Ryan,
Speaker 1: But I mean, is there a point where it does
Speaker 1: make some some sense to maybe pull some money out
Speaker 1: of the market and just write it out, especially when
Speaker 1: there are still so many questions about economic growth? To
Speaker 1: be fair, uh, and whether or not the Fed's going
Speaker 1: to get it right when it comes to policy moves. Yeah,
Speaker 1: the FED will see the Fed sticks of landing and
Speaker 1: that might start this Wednesday. Right. But but but you're right, Carol,
Speaker 1: and after a hundred and ten percent rally on the SMP,
Speaker 1: people have really been spoiled. If you've been fortunate enough
Speaker 1: to have not panicked in March and ridden this up,
Speaker 1: maybe it makes sense to during the cash register a
Speaker 1: little bit. But well, we like to look out of
Speaker 1: the lp L research. What are the credit markets telling us?
Speaker 1: I want to get two geeky with this, but you
Speaker 1: look at high yield spreads, investment grade corporate spreads, they
Speaker 1: are not breaking out to new highs this year. They
Speaker 1: popped up on the recent concerns over a Macron and
Speaker 1: potentially FED tapering as we've all been talking about, but
Speaker 1: they've really calmed down, uh this this this week specifically.
Speaker 1: So the credit markets are kind of the smartest guys
Speaker 1: in the room until they start really worrying. That's when
Speaker 1: you would start to worry a little more. And they're
Speaker 1: not right. So that's a good sign. Hey, just quickly,
Speaker 1: do you think it's wacky that you've got the NAZAC
Speaker 1: moving higher and you've got yields moving higher. That is
Speaker 1: not a typical correlation. No, you're you're exactly right, it's not.
Speaker 1: It's one of those one day things. Honestly, like it's
Speaker 1: not a one day thing. It's actually been I think
Speaker 1: eight nine or ten days that we've seen that correlation.
Speaker 1: That's a great point, great point more recent. I guess
Speaker 1: some you know, you look at today, we've got the
Speaker 1: inflation data. We said, FED days get a little quirky.
Speaker 1: But maybe it's just a sign that hey, you know,
Speaker 1: technology which did lag there for about six months in
Speaker 1: the middle of the year, it's taking the baton again.
Speaker 1: And that's how that's have a healthy bowl market in
Speaker 1: our opinion, Carol, you know, you've passed the baton around
Speaker 1: and and maybe it's text time. We did just release
Speaker 1: our two outlook this week. We called it passing the
Speaker 1: baton because we said we're going to go from monetary
Speaker 1: and fiscal policy being in charge to the consumers and
Speaker 1: small businesses and capital expenditures that are going to take charge.
Speaker 1: So we've been passing the baton is a nice theme
Speaker 1: for next year, but tech taking the batonages the healthy
Speaker 1: sign especially with the yield, like you said, making that
Speaker 1: movement there. All Right, we gotta run. Hey, have a
Speaker 1: good weekend. Ryan Dtrich, chief market strategist at LPL Financial,
Speaker 1: with us on the phone from Charlotte, North Carolina. It
Speaker 1: has definitely been a week for the bulls. Thanks for
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