1 00:00:05,120 --> 00:00:09,200 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene. Along 2 00:00:09,240 --> 00:00:13,200 Speaker 1: with Jonathan Ferroll and Lisa Brownwitz. Daily we bring you 3 00:00:13,280 --> 00:00:18,600 Speaker 1: insight from the best and economics, finance, investment, and international relations. 4 00:00:18,960 --> 00:00:23,840 Speaker 1: Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot com, 5 00:00:23,920 --> 00:00:29,800 Speaker 1: and of course, on the Bloomberg Terminal. No one has 6 00:00:29,840 --> 00:00:35,080 Speaker 1: been more articulate about value than Grantham, Mayo and Van Otterloo. 7 00:00:35,200 --> 00:00:39,080 Speaker 1: Benninker joins us this morning and supported Jeremy Grantham in 8 00:00:39,120 --> 00:00:43,560 Speaker 1: the need to consider value among raging tech growth. Ben, 9 00:00:43,560 --> 00:00:46,400 Speaker 1: thank you for joining us. You've got a quarterly letter out. 10 00:00:46,479 --> 00:00:50,360 Speaker 1: I love the detail you go into. There's no consultants 11 00:00:50,360 --> 00:00:52,920 Speaker 1: here telling you what to do. What is the number 12 00:00:52,960 --> 00:00:56,000 Speaker 1: one message that we get wrong? As we put in 13 00:00:56,040 --> 00:01:00,760 Speaker 1: the next buy ticket for Apple and Amazon. Uh, the 14 00:01:00,840 --> 00:01:03,520 Speaker 1: number one thing that I think people get wrong is 15 00:01:03,720 --> 00:01:07,160 Speaker 1: if you buy a market, if you buy a company, 16 00:01:07,200 --> 00:01:10,120 Speaker 1: if you buy a situation where things are about as 17 00:01:10,120 --> 00:01:13,040 Speaker 1: good as they have ever been, Uh, You're probably not 18 00:01:13,160 --> 00:01:17,039 Speaker 1: going to get a great return going forward. Uh. You 19 00:01:17,160 --> 00:01:20,960 Speaker 1: get the best returns when you're buying at not the 20 00:01:21,000 --> 00:01:25,480 Speaker 1: best times. This has been a wonderful time for big tech. 21 00:01:25,560 --> 00:01:27,360 Speaker 1: This has been a wonderful time for the S and P. 22 00:01:28,000 --> 00:01:29,880 Speaker 1: You really want to be looking for the places where 23 00:01:29,880 --> 00:01:32,520 Speaker 1: this hasn't been quite as wonderful. Where are they? Where 24 00:01:32,520 --> 00:01:36,160 Speaker 1: where is the mean reversion going constructively back to the mean? 25 00:01:37,280 --> 00:01:42,080 Speaker 1: So what we see is value stocks generally, and I 26 00:01:42,080 --> 00:01:44,280 Speaker 1: think you want to be smart about how you're defining 27 00:01:44,360 --> 00:01:47,480 Speaker 1: value stocks, but honestly, any way you define value stocks, 28 00:01:47,600 --> 00:01:51,160 Speaker 1: they look really cheap relative to history um. And what 29 00:01:51,240 --> 00:01:56,320 Speaker 1: we think is, if you're looking intelligently at the valuations 30 00:01:56,520 --> 00:01:59,559 Speaker 1: of the stocks that have been left behind, they're training 31 00:01:59,560 --> 00:02:01,480 Speaker 1: at some of the biggest discounts to the market we 32 00:02:01,560 --> 00:02:04,400 Speaker 1: have ever seen. Uh, And there doesn't seem to be 33 00:02:04,440 --> 00:02:07,000 Speaker 1: a really good economic reason for it. So sooner or 34 00:02:07,080 --> 00:02:09,200 Speaker 1: later you're gonna get a really good return out. And 35 00:02:09,320 --> 00:02:11,519 Speaker 1: there's a reason why some of the big tech stocks 36 00:02:11,520 --> 00:02:13,600 Speaker 1: have done so well, and it comes from the cash 37 00:02:13,680 --> 00:02:15,400 Speaker 1: that they are generated. It comes from the fact that 38 00:02:15,440 --> 00:02:17,760 Speaker 1: they are somewhat independent of some of the price pressures 39 00:02:17,880 --> 00:02:20,560 Speaker 1: because they don't have as many employees relative to their 40 00:02:20,600 --> 00:02:23,200 Speaker 1: overall cash flow. It also comes from the fact that 41 00:02:23,240 --> 00:02:26,240 Speaker 1: they are on the vanguard of a shift technological shift 42 00:02:26,480 --> 00:02:29,880 Speaker 1: in the community that was frankly accelerated during the pandemic. 43 00:02:30,280 --> 00:02:32,960 Speaker 1: How do you sort of counteract all of those forces 44 00:02:33,080 --> 00:02:36,280 Speaker 1: and say, look, that's all baked in. These other stocks 45 00:02:36,280 --> 00:02:40,639 Speaker 1: are going to benefit as we revert to a normal economy. Well, 46 00:02:40,639 --> 00:02:43,000 Speaker 1: I'd say a couple of things. One is, there's a 47 00:02:43,000 --> 00:02:45,600 Speaker 1: lot of craziness going on in the economy. We do 48 00:02:45,680 --> 00:02:49,240 Speaker 1: see some stocks trading and utterly looney valuations. Big tech 49 00:02:49,680 --> 00:02:53,360 Speaker 1: is not the core of that. Right. You can say, hey, 50 00:02:53,400 --> 00:02:55,120 Speaker 1: Google has been on a great run. You can say 51 00:02:55,160 --> 00:02:57,639 Speaker 1: Apple has been on a great run. They don't look cheap, 52 00:02:57,800 --> 00:03:00,560 Speaker 1: but they don't look stupid. Um, there's any of stuff 53 00:03:00,600 --> 00:03:03,760 Speaker 1: in the market that does look pretty stupid like and 54 00:03:03,880 --> 00:03:07,959 Speaker 1: the um you know, the the Tesla's, the a m 55 00:03:08,040 --> 00:03:11,720 Speaker 1: c s, the meme. Stocks are trading at valuations where 56 00:03:11,760 --> 00:03:15,960 Speaker 1: you have to assume utterly extraordinary things to get a 57 00:03:16,000 --> 00:03:18,520 Speaker 1: decent return. A quarter of the market right now is 58 00:03:18,560 --> 00:03:23,679 Speaker 1: trading at more than ten times sales, which is utterly crazy. 59 00:03:24,240 --> 00:03:27,920 Speaker 1: Stocks trading at ten times sales or more historically have 60 00:03:28,120 --> 00:03:32,520 Speaker 1: underperformed the market profoundly. Um And today a quarter of 61 00:03:32,560 --> 00:03:36,040 Speaker 1: the market is trading at that huge multiple. But ben 62 00:03:36,280 --> 00:03:38,360 Speaker 1: some people would argue if you try to go to, 63 00:03:38,360 --> 00:03:41,600 Speaker 1: say the Russell two thousand as a value proposition, because 64 00:03:41,600 --> 00:03:43,920 Speaker 1: they tend to be less loved, you end up buying 65 00:03:43,920 --> 00:03:46,000 Speaker 1: a lot of AMC, a lot of Game Stop, which 66 00:03:46,040 --> 00:03:48,880 Speaker 1: suddenly account for a big proportion of these indexes. How 67 00:03:48,880 --> 00:03:53,520 Speaker 1: do you get around that? Well, I think buying buying 68 00:03:53,520 --> 00:03:56,240 Speaker 1: the industries right now is a tough thing, right, because 69 00:03:56,280 --> 00:03:59,280 Speaker 1: whenever you're buying the industries, you are buying those stocks 70 00:03:59,320 --> 00:04:02,960 Speaker 1: which have very high market caps. In the case of 71 00:04:03,120 --> 00:04:06,320 Speaker 1: you know, Apple and Amazon and stuff, they are legitimately 72 00:04:06,400 --> 00:04:09,400 Speaker 1: huge companies. For some of these companies, a mc is 73 00:04:09,400 --> 00:04:12,360 Speaker 1: is a wonderful example. The company isn't huge, just the 74 00:04:12,400 --> 00:04:15,720 Speaker 1: market cap has exploded, um, And I think you want 75 00:04:15,720 --> 00:04:19,200 Speaker 1: to be careful doing anything that assumes that that market 76 00:04:19,240 --> 00:04:22,159 Speaker 1: cap is correct. Right. The Russell has had a heck 77 00:04:22,240 --> 00:04:26,200 Speaker 1: of a run since the lows of last year. It 78 00:04:26,440 --> 00:04:29,240 Speaker 1: is not cheap either. I'm not making the argument that 79 00:04:29,560 --> 00:04:31,720 Speaker 1: the S and D is expensive by the Russell too. 80 00:04:31,880 --> 00:04:35,040 Speaker 1: I'm saying growth has been on a great run. Growth 81 00:04:35,080 --> 00:04:40,920 Speaker 1: is expensive by value, Benn and Kurt. Value is founded 82 00:04:41,040 --> 00:04:44,520 Speaker 1: on certain bibles. One of them is Graham, Dot and Coddle. 83 00:04:44,600 --> 00:04:47,120 Speaker 1: You and I read it cover to cover ages ago. 84 00:04:47,240 --> 00:04:50,680 Speaker 1: You guys have led the charge on growth. The growthiness 85 00:04:50,720 --> 00:04:53,800 Speaker 1: that we've got now is unusual. All of that is 86 00:04:53,880 --> 00:04:57,919 Speaker 1: based UNFED and central banks blowing out their balance sheets. 87 00:04:58,440 --> 00:05:02,360 Speaker 1: How do you perceive market it's reacting when they finally 88 00:05:02,360 --> 00:05:05,120 Speaker 1: have to pull in their balance sheets or at least 89 00:05:05,400 --> 00:05:10,160 Speaker 1: stabilize them. You know, I really wish I knew. You know, 90 00:05:10,440 --> 00:05:13,159 Speaker 1: it's not just that what the FED has done in 91 00:05:13,200 --> 00:05:17,680 Speaker 1: the aftermath of of COVID has been unprecedented, and even 92 00:05:17,720 --> 00:05:21,279 Speaker 1: insofar as we have precedents, we saw what happened in 93 00:05:21,320 --> 00:05:25,480 Speaker 1: the GFC. Man, it's really hard to truly disentangle the 94 00:05:25,520 --> 00:05:28,440 Speaker 1: impact of quantitative using from the impact of very low 95 00:05:28,440 --> 00:05:31,320 Speaker 1: interest rates. I mean, yes, we had a taper tantrum, 96 00:05:31,480 --> 00:05:36,159 Speaker 1: but it was a pretty short term phenomenon. The FED 97 00:05:36,320 --> 00:05:39,839 Speaker 1: has this belief that balance sheet expansion is the equivalent 98 00:05:40,000 --> 00:05:43,640 Speaker 1: of of a of a further drop in interest rates. 99 00:05:44,200 --> 00:05:49,520 Speaker 1: Um that belief is not really backed by strong empirical evidence. 100 00:05:50,080 --> 00:05:54,080 Speaker 1: I don't know what impact the FED balance sheet and 101 00:05:54,120 --> 00:05:57,320 Speaker 1: the expansion of the FED balance sheet has had um 102 00:05:58,120 --> 00:06:01,360 Speaker 1: it it seems it would be the kind of thing 103 00:06:01,400 --> 00:06:04,680 Speaker 1: that would push people more into risky assets. But when 104 00:06:04,720 --> 00:06:08,000 Speaker 1: we've tried to crunch the data, we don't see an 105 00:06:08,040 --> 00:06:11,440 Speaker 1: obvious smoking gun. For Here's how that that impacted the 106 00:06:11,480 --> 00:06:14,440 Speaker 1: market before, Here's how undoing it is going to impact 107 00:06:14,440 --> 00:06:17,680 Speaker 1: the market now. Ben valuable inside this morning. We appreciate it. 108 00:06:17,680 --> 00:06:20,000 Speaker 1: Ben into that f g M the head of US 109 00:06:20,040 --> 00:06:28,440 Speaker 1: Allocation right now to continue our discussion of now what 110 00:06:28,720 --> 00:06:32,479 Speaker 1: for Central Asia? Robert Harmatz joins us. He's the title 111 00:06:32,600 --> 00:06:37,039 Speaker 1: and advisors that barely describes a cross party public service 112 00:06:37,080 --> 00:06:41,000 Speaker 1: to this nation. Yes, working with Secretary Clinton, but long 113 00:06:41,040 --> 00:06:44,560 Speaker 1: ago and far away, working for others and driving the 114 00:06:44,600 --> 00:06:48,159 Speaker 1: hundred and forty eight miles from Cobble to the Khaiber Pass. 115 00:06:48,600 --> 00:06:50,960 Speaker 1: Bob Hormetts, you're one of the few people with real 116 00:06:51,080 --> 00:06:54,440 Speaker 1: boots on the ground experience over there. How does the 117 00:06:54,560 --> 00:07:00,240 Speaker 1: United States now manage the Western Pakistan tribal regions? How 118 00:07:00,240 --> 00:07:06,120 Speaker 1: does the United States manage a new relationship with Pakistan? Well, 119 00:07:06,160 --> 00:07:09,159 Speaker 1: it's going to be a challenge because we've seen the 120 00:07:09,279 --> 00:07:14,440 Speaker 1: Taliban as our enemy for so long, and now we 121 00:07:14,480 --> 00:07:17,880 Speaker 1: find that we're working with them to help get people 122 00:07:18,120 --> 00:07:21,800 Speaker 1: out of the country. And I suspect that over a 123 00:07:21,840 --> 00:07:24,640 Speaker 1: period of time we're gonna have to have something of 124 00:07:24,640 --> 00:07:28,680 Speaker 1: a dialogue with the Caliban. The other point is that 125 00:07:29,160 --> 00:07:32,960 Speaker 1: the bigger threat of the United States is really ISIS 126 00:07:33,040 --> 00:07:37,240 Speaker 1: or isis K, and the Caliban is their arch enemies. 127 00:07:37,280 --> 00:07:40,880 Speaker 1: So it may turn out that if isis K starts 128 00:07:42,000 --> 00:07:47,560 Speaker 1: threatening its neighbors or US over the longer run, we're 129 00:07:47,560 --> 00:07:50,560 Speaker 1: gonna have to work with the Taliban who try to 130 00:07:50,600 --> 00:07:53,720 Speaker 1: suppress them. In fact, in the earlier agreement they said 131 00:07:53,760 --> 00:07:56,800 Speaker 1: that they would not allow terrorists to operate from their territory. 132 00:07:57,000 --> 00:07:59,000 Speaker 1: But I want you to take a broader picture here, 133 00:07:59,040 --> 00:08:01,160 Speaker 1: which only you can do. You know, you're darkened the 134 00:08:01,160 --> 00:08:03,360 Speaker 1: door toughs a few years ago. You can do this. 135 00:08:03,920 --> 00:08:06,520 Speaker 1: I want you to take us back to John Kenneth 136 00:08:06,600 --> 00:08:12,640 Speaker 1: Galbraith is Ambassador to India, and we had to manage India, 137 00:08:12,920 --> 00:08:17,840 Speaker 1: Pakistan and Afghanistan. What do we do now. We don't 138 00:08:17,880 --> 00:08:21,600 Speaker 1: have Robert Hormats, we don't have j KG. What do 139 00:08:21,640 --> 00:08:26,840 Speaker 1: we do now to manage that that strange relationship. Well, 140 00:08:26,840 --> 00:08:31,600 Speaker 1: it is gonna be difficult. The Indians themselves now, who 141 00:08:31,720 --> 00:08:36,400 Speaker 1: have regarded Pakistan of course as a threat, are worried 142 00:08:36,400 --> 00:08:39,240 Speaker 1: about several things. They're worried about the fact that there 143 00:08:39,280 --> 00:08:46,600 Speaker 1: may be Johadas elements based in Afghanistan who move over 144 00:08:46,800 --> 00:08:53,000 Speaker 1: into Pakistan or the disputed territories or Kashmir and UH 145 00:08:53,480 --> 00:08:57,440 Speaker 1: pose threats to India. So what India is now doing 146 00:08:57,480 --> 00:09:02,080 Speaker 1: already we've just learned, is they been having UH secret 147 00:09:02,120 --> 00:09:06,520 Speaker 1: meetings with Taliban authorities to try to make sure that 148 00:09:06,600 --> 00:09:13,199 Speaker 1: the Taliban can control these forces in the country and elsewhere. Bob, 149 00:09:13,280 --> 00:09:16,400 Speaker 1: you know we talked to John Bolton about this yesterday. Bob, 150 00:09:16,440 --> 00:09:18,760 Speaker 1: you're the expert at this. Should Lincoln be on the 151 00:09:18,760 --> 00:09:22,640 Speaker 1: next plane to Delhi? Well, I do think we need 152 00:09:22,679 --> 00:09:24,800 Speaker 1: to have a lot of cooperation with Deli, and I 153 00:09:24,800 --> 00:09:27,760 Speaker 1: would certainly if I were Tony b Lincoln be working 154 00:09:27,840 --> 00:09:31,440 Speaker 1: with the with the Indians UM on how we deal 155 00:09:31,920 --> 00:09:36,640 Speaker 1: with the Taliban and how we controlled ISIS and ISIS 156 00:09:36,640 --> 00:09:39,760 Speaker 1: groups that are in that are in Pakistan that could 157 00:09:40,200 --> 00:09:44,520 Speaker 1: cause lots of destructions both in India, UH and UH 158 00:09:44,559 --> 00:09:47,880 Speaker 1: and the areas around it, and certainly could play a 159 00:09:48,080 --> 00:09:52,360 Speaker 1: disruptive role in Kashmir. The other interesting thing is that 160 00:09:52,480 --> 00:09:55,280 Speaker 1: we may have a lot of interests in common with 161 00:09:55,360 --> 00:09:59,760 Speaker 1: the Chinese and the Russians. They're concerned about ISIS and ISIS, 162 00:10:00,320 --> 00:10:03,280 Speaker 1: and they want to be able to work with in China, 163 00:10:03,280 --> 00:10:06,240 Speaker 1: of course as a border with Afghanistan, so they want 164 00:10:06,240 --> 00:10:10,240 Speaker 1: to work with the Afghanis to try to control these 165 00:10:10,320 --> 00:10:14,920 Speaker 1: movements that could base themselves in Afghanistan but could be 166 00:10:15,040 --> 00:10:18,160 Speaker 1: disruptive to the region itself. Bob taking a step back, 167 00:10:18,440 --> 00:10:21,080 Speaker 1: there is a concern that President Biden talks in a 168 00:10:21,160 --> 00:10:25,120 Speaker 1: much nicer tone toward the Allies, toward Europe in particular, 169 00:10:25,679 --> 00:10:29,480 Speaker 1: but doesn't necessarily act that differently than the Trump administration 170 00:10:29,520 --> 00:10:32,280 Speaker 1: when it comes to policies and the way that things 171 00:10:32,360 --> 00:10:35,280 Speaker 1: are carried out. And that's one thing that people have 172 00:10:35,559 --> 00:10:39,080 Speaker 1: argued has just been perpetuated with the Afghanistani exit. How 173 00:10:39,200 --> 00:10:42,280 Speaker 1: much do you think that they are actually changing the 174 00:10:42,400 --> 00:10:47,800 Speaker 1: dynamic post Trump versus just continuing it. Well, this particular 175 00:10:47,840 --> 00:10:52,360 Speaker 1: incident is going to have an impact because the Allies 176 00:10:52,400 --> 00:10:56,760 Speaker 1: were concerned, they work consulted in advance, and now, of 177 00:10:56,760 --> 00:11:00,480 Speaker 1: course the Germans are having elections and ref of Geez 178 00:11:00,880 --> 00:11:03,480 Speaker 1: from Afghanistan are going to be one issue. Do the 179 00:11:03,520 --> 00:11:06,959 Speaker 1: Germans take them? Do they how much they trust the 180 00:11:07,040 --> 00:11:09,840 Speaker 1: United States. I think we're gonna see, in part as 181 00:11:09,880 --> 00:11:14,199 Speaker 1: a result of this, a much closer set of ties 182 00:11:14,840 --> 00:11:18,679 Speaker 1: and consultations between the United States and many of our 183 00:11:18,679 --> 00:11:22,000 Speaker 1: allies in many countries that are not allies about how 184 00:11:22,040 --> 00:11:25,000 Speaker 1: to deal with the Taliban, and particularly how to deal 185 00:11:25,040 --> 00:11:27,400 Speaker 1: with this refugee issue. This is going to be a 186 00:11:27,520 --> 00:11:30,480 Speaker 1: very big issue in American politics, and we have just 187 00:11:30,679 --> 00:11:35,120 Speaker 1: begun to recognize this there now in temporary quarters. But 188 00:11:35,240 --> 00:11:38,920 Speaker 1: we've got to find long term homes for a lot 189 00:11:38,960 --> 00:11:40,800 Speaker 1: of these people, and we're gonna have to work with 190 00:11:40,840 --> 00:11:44,600 Speaker 1: the allies to do it. So I think the lack 191 00:11:44,679 --> 00:11:47,680 Speaker 1: of real preconsultations in the eyes of some of these 192 00:11:47,679 --> 00:11:50,280 Speaker 1: countries is going to mean we're gonna spend a lot 193 00:11:50,360 --> 00:11:53,640 Speaker 1: more time working with the allies on a multitude of 194 00:11:53,800 --> 00:11:59,240 Speaker 1: post um takeover Taliban issues. Ambassador hermits, thank you so 195 00:11:59,320 --> 00:12:07,360 Speaker 1: much for joining us today with Taman advisors. It is 196 00:12:07,400 --> 00:12:11,160 Speaker 1: not to be understood that we invented this out of 197 00:12:11,320 --> 00:12:16,200 Speaker 1: thin air. Long ago, Paul and far away, there was 198 00:12:16,240 --> 00:12:20,480 Speaker 1: a plan, and off the back of an envelope. The plan, 199 00:12:20,600 --> 00:12:22,600 Speaker 1: I had a beverage of my choice at my left hand, 200 00:12:22,800 --> 00:12:27,920 Speaker 1: was well, wait a minute, Richard Edelman says this, and 201 00:12:28,000 --> 00:12:31,600 Speaker 1: I can't convey to all listening nationwide and around the 202 00:12:31,640 --> 00:12:38,160 Speaker 1: world the importance of the Edelman Trust Barometer and launching me. 203 00:12:39,040 --> 00:12:45,000 Speaker 1: It's breathtaking. Richard Edelman joins us four years on through 204 00:12:45,040 --> 00:12:49,800 Speaker 1: a Pandemic to tell us about the trust barometer of 205 00:12:49,840 --> 00:12:53,000 Speaker 1: our institutions. As always, Richard Edelman, thank you so much 206 00:12:53,640 --> 00:12:58,200 Speaker 1: for joining. What have you learned in the pandemic? Tom? 207 00:12:58,240 --> 00:13:02,679 Speaker 1: The most important finding of this study is the rise 208 00:13:02,840 --> 00:13:07,640 Speaker 1: of belief driven employees. And the employee is no longer 209 00:13:07,760 --> 00:13:12,880 Speaker 1: willing just to work for pay and advancement. He or 210 00:13:12,920 --> 00:13:19,200 Speaker 1: she wants flexible work hours and also wants to work 211 00:13:19,240 --> 00:13:24,840 Speaker 1: for a company that is dedicated to improving society. And 212 00:13:25,040 --> 00:13:29,120 Speaker 1: the amazing thing, Tom is somewhere between. Depending on the 213 00:13:29,160 --> 00:13:33,320 Speaker 1: country of employees say that they're going to quit in 214 00:13:33,320 --> 00:13:36,120 Speaker 1: the next six months. They've gotten through the pandemic and 215 00:13:36,559 --> 00:13:40,000 Speaker 1: they want something new. By two to one, the reason 216 00:13:40,080 --> 00:13:47,160 Speaker 1: for quitting is societal ambition of their employer. They don't 217 00:13:47,160 --> 00:13:50,360 Speaker 1: agree with the values of the company. Said that only 218 00:13:51,120 --> 00:13:54,080 Speaker 1: say it's because of cash, compensation or advancement. Come on, 219 00:13:54,240 --> 00:13:57,040 Speaker 1: you're not Tony, I mean, I get what you're saying, Richard. 220 00:13:57,920 --> 00:14:01,280 Speaker 1: The bottom the bottom line is is they want to 221 00:14:01,320 --> 00:14:06,240 Speaker 1: be paid more and find a social belief in their CEO. 222 00:14:06,640 --> 00:14:11,600 Speaker 1: You're telling me, No, I'm telling you that table stakes 223 00:14:11,920 --> 00:14:18,120 Speaker 1: is the wages and upside in their career and the 224 00:14:18,160 --> 00:14:24,520 Speaker 1: additional aspects of flexibility on hybrid work or um you know, 225 00:14:24,760 --> 00:14:28,360 Speaker 1: for example, a staggered ship for a manufacturing company so 226 00:14:28,400 --> 00:14:30,120 Speaker 1: that you don't have to be there at seven am 227 00:14:30,240 --> 00:14:31,920 Speaker 1: on the GM line. You could be there at eight 228 00:14:31,960 --> 00:14:34,520 Speaker 1: if you're a mom or dad dropping a kid at school, 229 00:14:34,880 --> 00:14:37,120 Speaker 1: but then you still could work the eight hours. We 230 00:14:37,240 --> 00:14:39,160 Speaker 1: were going to have to figure this out, that there's 231 00:14:39,160 --> 00:14:41,680 Speaker 1: a new social contract that we're going to have to create, 232 00:14:42,040 --> 00:14:45,120 Speaker 1: and it can't just be for the white collar worker. 233 00:14:45,200 --> 00:14:48,120 Speaker 1: And well, that's the unfairness of it all. What's so important, Paul, 234 00:14:48,120 --> 00:14:50,360 Speaker 1: I gotta paint the picture for you. I mean, Davos 235 00:14:50,840 --> 00:14:55,400 Speaker 1: and Lionel Barber would have as Wednesday opening Ft Edelman 236 00:14:55,440 --> 00:14:58,840 Speaker 1: Trust Barometers soire and they would invite me and you know, 237 00:14:58,920 --> 00:15:01,880 Speaker 1: be Richard Edelman in my Moses and you know, Julie 238 00:15:01,880 --> 00:15:05,480 Speaker 1: Andrews singing in the background. Richard, You've done this year 239 00:15:05,520 --> 00:15:09,560 Speaker 1: after year. Is this about corporations and the new belief? 240 00:15:10,040 --> 00:15:13,280 Speaker 1: Or is it about the failure of government? Is an institution? 241 00:15:15,280 --> 00:15:19,400 Speaker 1: As always, Tom, it's a little of both. Government has 242 00:15:19,440 --> 00:15:22,720 Speaker 1: disappointed us. I mean the most recent is what are 243 00:15:22,720 --> 00:15:26,120 Speaker 1: we supposed to be doing about vaccinations as employers were 244 00:15:26,200 --> 00:15:28,480 Speaker 1: left on our own? You know, do we mandate them? 245 00:15:28,640 --> 00:15:30,480 Speaker 1: Do we say you have to have a vaccine before 246 00:15:30,480 --> 00:15:32,560 Speaker 1: you come to the office, Do we wear masks? I mean, 247 00:15:32,800 --> 00:15:35,320 Speaker 1: all of this has a bitten limbo. So business is 248 00:15:35,360 --> 00:15:38,520 Speaker 1: stepping into the void left by government, and that's increasingly 249 00:15:38,640 --> 00:15:45,560 Speaker 1: true on pay, on benefits, on even vaccination. So it 250 00:15:45,680 --> 00:15:51,440 Speaker 1: is true, though, interestingly, that if a employer has high 251 00:15:51,480 --> 00:15:55,440 Speaker 1: trust from its employees, it drags up all the institutions 252 00:15:55,440 --> 00:15:58,240 Speaker 1: and trust. It's one of the shockers in this study is, 253 00:15:58,640 --> 00:16:01,600 Speaker 1: you know, if you have an nine or above on 254 00:16:01,640 --> 00:16:05,480 Speaker 1: a sent scale level of trust in your employer, all 255 00:16:05,520 --> 00:16:10,080 Speaker 1: the other institutions um from media to business get much 256 00:16:10,160 --> 00:16:13,360 Speaker 1: higher scores. And if it's only a level five, then 257 00:16:13,360 --> 00:16:19,320 Speaker 1: we're in trouble of trust in institutions. Richard, I wonder 258 00:16:19,360 --> 00:16:21,520 Speaker 1: how much of this is a function of the fact 259 00:16:21,520 --> 00:16:25,320 Speaker 1: that pre pandemic, we're at full employment now coming out 260 00:16:25,400 --> 00:16:28,440 Speaker 1: of the pandemic, despite the delta variant. You know, there's 261 00:16:28,480 --> 00:16:31,680 Speaker 1: a lots of employers that need lots of employees, so 262 00:16:31,800 --> 00:16:34,840 Speaker 1: there's some leverage for the employee. How much it is 263 00:16:34,920 --> 00:16:37,880 Speaker 1: that or how much is it again? Like as you're 264 00:16:37,920 --> 00:16:42,000 Speaker 1: suggesting a real fundamental change in the construct between employer 265 00:16:42,000 --> 00:16:46,320 Speaker 1: and employee, I think in the back of every employee's 266 00:16:46,360 --> 00:16:49,960 Speaker 1: head is still I'm afraid of being fired on the 267 00:16:50,000 --> 00:16:55,720 Speaker 1: basis of UH artificial intelligence or or other attack. Um 268 00:16:56,680 --> 00:17:01,840 Speaker 1: people say that still today, and so there is thinking. Look, also, 269 00:17:02,360 --> 00:17:06,240 Speaker 1: I've just seen my mom die. Americans actually had a 270 00:17:06,359 --> 00:17:09,240 Speaker 1: person they knew passed away or be sick from COVID. 271 00:17:09,760 --> 00:17:13,240 Speaker 1: That that that's a big shock to the system. So, um, 272 00:17:13,280 --> 00:17:15,560 Speaker 1: you know, we're having traumatic stress syndrome a little bit, 273 00:17:15,680 --> 00:17:18,200 Speaker 1: and we're reevaluating who we are and what we want 274 00:17:18,240 --> 00:17:20,679 Speaker 1: to be. And that's why I think it's a tripod. 275 00:17:20,760 --> 00:17:25,840 Speaker 1: Now it's pay and upside, it's flexible work conditions, and 276 00:17:25,920 --> 00:17:29,680 Speaker 1: I want to work for an employer. I want to succeed. 277 00:17:30,000 --> 00:17:33,840 Speaker 1: You know, it's really important to have all three. Richard Edleman, 278 00:17:33,880 --> 00:17:36,399 Speaker 1: thank you so much for your support of our effort 279 00:17:36,480 --> 00:17:39,320 Speaker 1: over the years. And folks, I can't say enough about 280 00:17:39,359 --> 00:17:42,880 Speaker 1: the Edelman Trust parameter and the other social studies that 281 00:17:43,040 --> 00:17:47,480 Speaker 1: Edelman and company do. Richard Edelman, the founder of Edelman 282 00:17:47,600 --> 00:17:54,679 Speaker 1: and Company. Let's catch up with Roadleshawi Capital you can 283 00:17:54,680 --> 00:17:56,639 Speaker 1: always found it and Shairman and the author of a 284 00:17:56,680 --> 00:17:59,600 Speaker 1: book The Death of Inflation that was the mid niceties. 285 00:17:59,720 --> 00:18:02,359 Speaker 1: Rogie joined us. Now it's one And Roger, if you 286 00:18:02,359 --> 00:18:06,359 Speaker 1: wrote that book today, what would the title be. I'm 287 00:18:06,400 --> 00:18:08,479 Speaker 1: not sure. I think I might be tempted to call 288 00:18:08,520 --> 00:18:12,360 Speaker 1: it the Rebirth of Inflation. I probably adopt a completely 289 00:18:12,359 --> 00:18:14,720 Speaker 1: different title. The title, you know, at the time n 290 00:18:15,280 --> 00:18:19,960 Speaker 1: I published it caused fantastic argument the Bundas Bank, in particular, 291 00:18:20,000 --> 00:18:23,160 Speaker 1: We're very angry with me inflation, they said, comp possibly, 292 00:18:24,240 --> 00:18:27,639 Speaker 1: I'm worried about inflation researching now, Roger Buda. We had 293 00:18:27,680 --> 00:18:30,359 Speaker 1: Jeff Lacker on the other day, the former president Richmond 294 00:18:30,400 --> 00:18:33,600 Speaker 1: fed and he was extremely articulate about a need for 295 00:18:33,680 --> 00:18:37,280 Speaker 1: preemptive central banks. And I asked him where the inflation 296 00:18:37,320 --> 00:18:40,600 Speaker 1: east has got wrong? And at the same time I 297 00:18:40,680 --> 00:18:45,800 Speaker 1: talked to Geea gopinath Off Jackson Hall about modern monetary theory. 298 00:18:46,040 --> 00:18:49,080 Speaker 1: In the last ten years, have we simply moved our 299 00:18:49,200 --> 00:18:54,280 Speaker 1: inflation dynamic, our price dynamic over to a balance sheet dynamic, 300 00:18:54,320 --> 00:18:57,359 Speaker 1: whether it's fiscal policy or it's all this debt build 301 00:18:57,440 --> 00:19:01,200 Speaker 1: up we see out there. I don't think either of 302 00:19:01,240 --> 00:19:03,560 Speaker 1: those things really. I think what's happened is a combination 303 00:19:03,600 --> 00:19:06,359 Speaker 1: of two things. First of all, we've continued to have 304 00:19:06,880 --> 00:19:10,520 Speaker 1: various supply factors which have been bearing down on inflation, 305 00:19:10,560 --> 00:19:13,760 Speaker 1: and those are the things that I identified in the 306 00:19:13,800 --> 00:19:16,560 Speaker 1: middle Night is they've been continuing. And then, of course, 307 00:19:16,600 --> 00:19:19,920 Speaker 1: for a variety of reasons, we've had a relatively weak demand. 308 00:19:20,680 --> 00:19:24,720 Speaker 1: And in key countries like the US, I think those 309 00:19:24,760 --> 00:19:27,560 Speaker 1: two conditions are now are now changing, and the US 310 00:19:27,600 --> 00:19:32,520 Speaker 1: economy is surging. You've got this massive stimulus from policy 311 00:19:32,600 --> 00:19:34,560 Speaker 1: at a time when I don't think there's quite the 312 00:19:34,640 --> 00:19:38,760 Speaker 1: same downward pressure on prices from various supply factors, and 313 00:19:38,800 --> 00:19:42,200 Speaker 1: in many cases, of course there's upward pressure on prices. 314 00:19:42,480 --> 00:19:45,880 Speaker 1: As for M M T, I think it's just quite frankly, 315 00:19:45,960 --> 00:19:50,560 Speaker 1: profoundly misguided. Roger. Can we get sustained increases in inflation 316 00:19:50,680 --> 00:19:54,000 Speaker 1: without more wage inflation? And and b somewhere we are 317 00:19:54,280 --> 00:19:58,439 Speaker 1: wage inflation that we're not seeing. Well, you can in 318 00:19:58,520 --> 00:20:01,879 Speaker 1: some circumstances, and I think a pretty unlikely. I mean, 319 00:20:01,880 --> 00:20:05,200 Speaker 1: you've got to have either a very very marked shift 320 00:20:05,240 --> 00:20:09,399 Speaker 1: towards profits or big increases in external costs which are 321 00:20:09,400 --> 00:20:12,440 Speaker 1: pushing inflation for a considerable time. In the end, of course, 322 00:20:12,480 --> 00:20:14,359 Speaker 1: that will come to an end. No, I think you know, 323 00:20:14,440 --> 00:20:19,040 Speaker 1: in really to continue with high inflation for quite a while, 324 00:20:19,359 --> 00:20:23,200 Speaker 1: we're gonna need wage inflation. At the moment. There are 325 00:20:23,240 --> 00:20:25,399 Speaker 1: some signs of that depends where you look, but in 326 00:20:25,480 --> 00:20:27,560 Speaker 1: some countries wages and going up quite a lot. But 327 00:20:27,640 --> 00:20:31,040 Speaker 1: you know, the whole thing about inflationary process. This is 328 00:20:31,040 --> 00:20:33,640 Speaker 1: what makes it so difficult to forecast, to set policy 329 00:20:34,080 --> 00:20:36,560 Speaker 1: is the answers aren't always obvious to you. Aren't given 330 00:20:36,600 --> 00:20:39,760 Speaker 1: you on a plate. You don't suddenly see the whole 331 00:20:39,800 --> 00:20:43,919 Speaker 1: process and form immediately. It happens over time, gradually. Right, 332 00:20:43,960 --> 00:20:46,760 Speaker 1: You're one final question very important here. You can literally 333 00:20:46,760 --> 00:20:48,600 Speaker 1: be lined up right now working at the Bank of 334 00:20:48,640 --> 00:20:54,080 Speaker 1: England helping Governor Bailey. Do you do you presume smooth 335 00:20:54,160 --> 00:20:58,960 Speaker 1: curves in smooth reaction functions when we're finally over with 336 00:20:59,000 --> 00:21:02,120 Speaker 1: the stimulus already, or do you have an angst out 337 00:21:02,160 --> 00:21:06,160 Speaker 1: there about jump conditions we don't see coming. Well, I'm 338 00:21:06,160 --> 00:21:08,119 Speaker 1: worried about a jump and this is one of the 339 00:21:08,160 --> 00:21:11,280 Speaker 1: reasons why I would act on policy sooner rather than 340 00:21:11,359 --> 00:21:14,879 Speaker 1: later in both the States actually and the UK. These 341 00:21:15,280 --> 00:21:19,639 Speaker 1: current levels of interest rates are absurdly low. The monetary 342 00:21:19,640 --> 00:21:22,920 Speaker 1: stimulus is extraordinary in the course of history. We've got 343 00:21:22,960 --> 00:21:25,800 Speaker 1: to move back to some sort of normality, and I 344 00:21:25,840 --> 00:21:28,159 Speaker 1: would do it sooner rather than later, and do it 345 00:21:28,240 --> 00:21:31,480 Speaker 1: gradually in order to avoid the thing you're referring to. Tom. 346 00:21:31,680 --> 00:21:33,320 Speaker 1: That's to say that at some point or other we 347 00:21:33,440 --> 00:21:36,639 Speaker 1: get a shock and the policy mat makers will react. Roger, 348 00:21:36,760 --> 00:21:38,199 Speaker 1: thank you, sir. It's going to hear from you as 349 00:21:38,200 --> 00:21:40,800 Speaker 1: always rot a good or their Capital Economics founder and chairman, 350 00:21:40,920 --> 00:21:48,960 Speaker 1: or perhaps the rebirth the rebirth inflation. Right now, I 351 00:21:48,960 --> 00:21:51,239 Speaker 1: want to rationalize to the year end, and we do 352 00:21:51,320 --> 00:21:55,080 Speaker 1: that with James Ay of Standard Charter thrill that he 353 00:21:55,119 --> 00:21:59,800 Speaker 1: could join his standard investors everytheen Standard Investments, I should say, James, Ah, 354 00:22:00,000 --> 00:22:04,639 Speaker 1: thank you so much for joining us. James, it's September one. 355 00:22:04,960 --> 00:22:11,359 Speaker 1: Guys like you have to rerationalize till twelve one one. 356 00:22:12,080 --> 00:22:16,000 Speaker 1: How much rationalization is going on right now? How much 357 00:22:16,040 --> 00:22:22,480 Speaker 1: of institutional money is behind the benchmark. I mean that's 358 00:22:22,520 --> 00:22:25,399 Speaker 1: a good question. Yeah, I mean the fourth quarter brings 359 00:22:25,440 --> 00:22:28,399 Speaker 1: with it it's a special set of dynamics normally, summer 360 00:22:28,440 --> 00:22:31,159 Speaker 1: has tended to be a quiet period and certainly in 361 00:22:31,240 --> 00:22:34,359 Speaker 1: terms of primary market activity, it's generally pretty dead. And 362 00:22:34,400 --> 00:22:35,920 Speaker 1: then as we get towards the end of August, we 363 00:22:35,960 --> 00:22:38,320 Speaker 1: look into the fourth quarter and think, well, there's still 364 00:22:38,320 --> 00:22:39,840 Speaker 1: a heck of a lot of companies and governments out 365 00:22:39,880 --> 00:22:41,760 Speaker 1: there with funding needs. They're going to come to market, 366 00:22:41,840 --> 00:22:45,040 Speaker 1: So you get this kind of concession events into the 367 00:22:45,040 --> 00:22:49,160 Speaker 1: fourth quarter supply. This year it's a bit more complicated 368 00:22:49,200 --> 00:22:52,280 Speaker 1: because we've got the potential for some some relatively major 369 00:22:52,320 --> 00:22:57,000 Speaker 1: monetary policy changes as well. Both of those have the 370 00:22:57,080 --> 00:23:00,400 Speaker 1: potential to drive bondial it's higher. But as you guys 371 00:23:00,440 --> 00:23:04,200 Speaker 1: were talking about in your previous section there, thinking about 372 00:23:04,240 --> 00:23:06,600 Speaker 1: bond jeals in isolation doesn't get you very far. You 373 00:23:06,640 --> 00:23:08,880 Speaker 1: have to think about what's going to happen to bondels, 374 00:23:08,880 --> 00:23:10,680 Speaker 1: what's gonna happen to yield curve, what's going to happen 375 00:23:10,720 --> 00:23:12,600 Speaker 1: to the dollar, and what does that mean for risk assets? 376 00:23:12,600 --> 00:23:14,640 Speaker 1: And that's where it gets a bit more complicated. I'm 377 00:23:14,680 --> 00:23:16,760 Speaker 1: still off the opinion that fourth quarter is going to 378 00:23:16,800 --> 00:23:19,520 Speaker 1: be about flattery. You're curve in the US John Standard 379 00:23:19,520 --> 00:23:23,560 Speaker 1: pours five twelve months trailing up twenty eight percent year 380 00:23:23,640 --> 00:23:26,560 Speaker 1: to day. Johanet's terrible, it's up twenty It's not bad, 381 00:23:26,680 --> 00:23:29,840 Speaker 1: is It's people are behind a lot of people, And James, 382 00:23:29,880 --> 00:23:31,600 Speaker 1: I think the big question right now is what dense 383 00:23:31,720 --> 00:23:35,080 Speaker 1: risk appetite. We know that the equity market can go 384 00:23:35,200 --> 00:23:38,200 Speaker 1: higher in a rising rate regime over the federal reserve. 385 00:23:38,280 --> 00:23:40,479 Speaker 1: We know that the equity market can rally even as 386 00:23:40,520 --> 00:23:46,000 Speaker 1: they pull back on QUEI what will hit risk appetite? Yeah, 387 00:23:46,000 --> 00:23:48,919 Speaker 1: I mean we know all of these things until we don't. Now. 388 00:23:49,000 --> 00:23:52,240 Speaker 1: I try really hard to avoid foiling into sort of 389 00:23:52,320 --> 00:23:56,480 Speaker 1: some of the basic cognitive bias traps, and the status 390 00:23:56,560 --> 00:23:59,439 Speaker 1: quo bias, I think is one of the one of 391 00:23:59,440 --> 00:24:01,639 Speaker 1: the strong, as we have a tendency to believe that 392 00:24:01,680 --> 00:24:04,080 Speaker 1: what is true today will continue to be true tomorrow 393 00:24:05,200 --> 00:24:07,040 Speaker 1: by the same token. I can see here in front 394 00:24:07,080 --> 00:24:08,919 Speaker 1: of you guys week after week saying I think the 395 00:24:08,920 --> 00:24:12,480 Speaker 1: equity market is fragile, and I'll end up with egg 396 00:24:12,520 --> 00:24:14,080 Speaker 1: on my face more often than not. But I think 397 00:24:14,080 --> 00:24:16,000 Speaker 1: the kind of equity market that we live in now 398 00:24:16,080 --> 00:24:19,840 Speaker 1: is one where you know, you get such long periods 399 00:24:19,840 --> 00:24:22,240 Speaker 1: of this grinding, low volatility rally, but when it does 400 00:24:22,320 --> 00:24:24,600 Speaker 1: crack it you get all of the volatility in one go. 401 00:24:24,720 --> 00:24:27,159 Speaker 1: And I still think we're headed for that sort of episode. 402 00:24:27,520 --> 00:24:30,920 Speaker 1: But what the phrase we use is vulnerabilities, not triggers 403 00:24:31,119 --> 00:24:34,600 Speaker 1: x ANTI. It's almost always impossible to point out a 404 00:24:34,640 --> 00:24:38,840 Speaker 1: specific event or data point or or you know, happening 405 00:24:38,880 --> 00:24:40,600 Speaker 1: which is going to be the trigger for things to 406 00:24:40,640 --> 00:24:42,119 Speaker 1: turn around. But what you can do is you can 407 00:24:42,160 --> 00:24:44,560 Speaker 1: look at the market and say, well, how vulnerable is 408 00:24:44,600 --> 00:24:48,000 Speaker 1: this market, how expensive is it, how much our investors 409 00:24:48,000 --> 00:24:51,040 Speaker 1: already positioned? What is investor sentiment like when you look 410 00:24:51,040 --> 00:24:53,560 Speaker 1: at the equity market, how many people are buying on margin, 411 00:24:53,960 --> 00:24:57,679 Speaker 1: what sort of investors participating, what's breadth like? You know, 412 00:24:57,880 --> 00:25:01,119 Speaker 1: what's the median stock doing relative to of the index itself? 413 00:25:01,200 --> 00:25:03,160 Speaker 1: And when you look at beneath the hood in all 414 00:25:03,200 --> 00:25:06,280 Speaker 1: of these metrics, I just see weakness and vulnerability and 415 00:25:06,400 --> 00:25:10,119 Speaker 1: unsustainable drivers. So I have no idea when the equity 416 00:25:10,160 --> 00:25:13,919 Speaker 1: market will crack, but I strongly believe that the fundamentals 417 00:25:13,960 --> 00:25:17,480 Speaker 1: which are supposedly supporting equity prices up here on that 418 00:25:17,560 --> 00:25:20,119 Speaker 1: anywhere near as supportive as as many are making out. 419 00:25:20,160 --> 00:25:22,000 Speaker 1: James getting an idea for what you don't want to 420 00:25:22,040 --> 00:25:25,840 Speaker 1: own what do you want to own? Really difficult. People 421 00:25:25,840 --> 00:25:27,719 Speaker 1: ask me that question, you know, outside of the industry, 422 00:25:27,720 --> 00:25:29,119 Speaker 1: and say what should I do with my money? And 423 00:25:29,640 --> 00:25:31,879 Speaker 1: give a big sigh and say, it's very difficult. Everything 424 00:25:32,000 --> 00:25:35,840 Speaker 1: is expensive, not even just financial assets, alternative assets across 425 00:25:35,880 --> 00:25:38,800 Speaker 1: the board. Some of the crazies going on in alternative 426 00:25:39,720 --> 00:25:43,520 Speaker 1: places to park one's money I find terrifying in the extreme. 427 00:25:43,640 --> 00:25:48,600 Speaker 1: But for most investors, he's still owning a diversified portfolio 428 00:25:48,760 --> 00:25:53,320 Speaker 1: of you know, the basic financial asset types is very sensible. 429 00:25:54,040 --> 00:25:56,080 Speaker 1: What do I particularly want to own in my space? 430 00:25:56,080 --> 00:25:58,480 Speaker 1: I still think that duration it has value because yes 431 00:25:58,520 --> 00:26:02,040 Speaker 1: it's expensive, but it's not as expensive relative to the 432 00:26:02,080 --> 00:26:04,480 Speaker 1: economic outlook as most other assets are. I think that's 433 00:26:04,520 --> 00:26:09,760 Speaker 1: the biggest the biggest James, are you buying bonds right now? 434 00:26:09,800 --> 00:26:12,399 Speaker 1: Are you buying you know, the longest dated notes and 435 00:26:12,440 --> 00:26:15,639 Speaker 1: developed markets? Is that basically the way that you're getting 436 00:26:15,680 --> 00:26:19,200 Speaker 1: some confidence in the US? Yeah? Absolutely, that's exactly where 437 00:26:19,200 --> 00:26:21,600 Speaker 1: we're positioned. So we like five sirties flatness. We like 438 00:26:21,680 --> 00:26:24,919 Speaker 1: own in the long end because ultimately the long end 439 00:26:24,960 --> 00:26:29,400 Speaker 1: should be the clearest and cleanest expression of the potential 440 00:26:29,680 --> 00:26:33,080 Speaker 1: output of the US economy and My observation, and this 441 00:26:33,119 --> 00:26:35,120 Speaker 1: goes back to again a conversation you guys are having 442 00:26:35,119 --> 00:26:37,880 Speaker 1: before about the labor market. My observation is that when 443 00:26:37,960 --> 00:26:40,880 Speaker 1: policy and it's various guys steps away from the US, 444 00:26:40,960 --> 00:26:44,240 Speaker 1: from any major economy, the economy literally has an art attack. 445 00:26:44,680 --> 00:26:50,520 Speaker 1: So without temporary inputs from policy makers, the state, the 446 00:26:50,520 --> 00:26:53,320 Speaker 1: current state of the economy is unsustainable. Therefore, we all 447 00:26:53,320 --> 00:26:56,439 Speaker 1: tend to negative growth until we find some equilibrium. And 448 00:26:56,480 --> 00:26:59,399 Speaker 1: the policy that we're engaging in is completely unsustainable. And 449 00:26:59,440 --> 00:27:03,359 Speaker 1: that tells me that we're still living in this unhealthy, imbalanced, 450 00:27:03,400 --> 00:27:08,200 Speaker 1: over indebted economy with lots of structural weaknesses which people 451 00:27:08,200 --> 00:27:11,400 Speaker 1: are trying to deal with with cyclical policy, and that 452 00:27:11,440 --> 00:27:13,760 Speaker 1: really does cap that the extent to which yields can 453 00:27:13,840 --> 00:27:17,160 Speaker 1: rise before it causes some sort of incident or accident. 454 00:27:17,800 --> 00:27:20,440 Speaker 1: I think we've seen a little, you know, a little 455 00:27:20,440 --> 00:27:23,199 Speaker 1: episode of that already this year. But I continue to 456 00:27:23,280 --> 00:27:28,680 Speaker 1: believe that that long term duration has better value than alternatives. 457 00:27:28,960 --> 00:27:34,119 Speaker 1: James Athy of Aberdeen Standard Investment, Senior investment manager. This 458 00:27:34,200 --> 00:27:38,000 Speaker 1: is the Bloomberg Surveillance Podcast. Thanks for listening. Join us 459 00:27:38,040 --> 00:27:41,800 Speaker 1: live weekdays from seven to ten AMI Eastern and Bloomberg 460 00:27:41,920 --> 00:27:46,080 Speaker 1: Radio and Bloomberg Television each day from six to nine 461 00:27:46,119 --> 00:27:50,520 Speaker 1: am for insight from the best in economics, finance, investment, 462 00:27:50,680 --> 00:27:55,679 Speaker 1: and international relations. And subscribe to the Surveillance podcast on 463 00:27:55,760 --> 00:27:59,560 Speaker 1: Apple podcast, SoundCloud, Bloomberg dot com, and of course, on 464 00:27:59,680 --> 00:28:03,720 Speaker 1: the Amino. I'm Tom keene In. This is Bloomer.