1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:21,960 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App. 4 00:00:22,320 --> 00:00:25,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:27,040 Speaker 1: us live on YouTube. 6 00:00:27,440 --> 00:00:29,880 Speaker 2: Kim Dawson walks in the studio of the market lifts 7 00:00:29,960 --> 00:00:32,360 Speaker 2: NaSTA C up nine tenths of a percent. We need 8 00:00:32,360 --> 00:00:38,199 Speaker 2: a Bloomberg Business Flash from IBKR. Lisa Mattail, you got it. 9 00:00:38,280 --> 00:00:40,560 Speaker 3: Yeah, we do have futures advancing traders kind of assessing. 10 00:00:40,560 --> 00:00:43,800 Speaker 3: Presidents from spledge to impose tariffs on all imports of 11 00:00:43,840 --> 00:00:46,279 Speaker 3: steel and aluminum. We were just talking about it. What 12 00:00:46,320 --> 00:00:48,680 Speaker 3: it's doing is pushing up some American companies linked to 13 00:00:48,680 --> 00:00:51,120 Speaker 3: the metals companies like us Steal up three percent, out 14 00:00:51,120 --> 00:00:53,840 Speaker 3: co Op two percent. We have Cleveland Clips up about 15 00:00:53,840 --> 00:00:57,160 Speaker 3: eight percent, NAZAC futures leading the charge up nine tens 16 00:00:57,200 --> 00:00:59,040 Speaker 3: of percent one hundred and ninety seven points. So we 17 00:00:59,080 --> 00:01:01,640 Speaker 3: have Dow futures up a half percent, SMP futures up 18 00:01:01,680 --> 00:01:04,040 Speaker 3: six ten seven percent, the two year yield at four 19 00:01:04,040 --> 00:01:07,120 Speaker 3: point twenty six percent, that's down two basis points at 20 00:01:07,120 --> 00:01:09,279 Speaker 3: the yield other ten you're four point four to eight percent, 21 00:01:09,319 --> 00:01:12,720 Speaker 3: and that's down one basis point to commodities go hold 22 00:01:12,800 --> 00:01:15,280 Speaker 3: rising to a record. Tariff talk kind of added to 23 00:01:15,280 --> 00:01:17,400 Speaker 3: that uncertainty in the financial market. So we have COMEX 24 00:01:17,480 --> 00:01:20,119 Speaker 3: Gold up twenty nine hundred and twenty four dollars an ounce. 25 00:01:20,480 --> 00:01:22,960 Speaker 3: We go to oil Brent crude seventy five dollars a barrel, 26 00:01:23,080 --> 00:01:26,480 Speaker 3: WTI crewed seventy one dollars a barrel. We'll go to 27 00:01:26,560 --> 00:01:30,000 Speaker 3: shares of BP. They're up six seven percent in London. 28 00:01:30,120 --> 00:01:33,400 Speaker 3: Elliott Investment Management said to have built a significant stake 29 00:01:33,480 --> 00:01:36,160 Speaker 3: in the company. And then we go to earnings. McDonald's 30 00:01:36,200 --> 00:01:39,000 Speaker 3: up two percent. Sales rose in the fourth quarter. Yeah, 31 00:01:39,000 --> 00:01:42,400 Speaker 3: growth in international business actually made up for that drop 32 00:01:42,520 --> 00:01:45,320 Speaker 3: in the US. And it's a big week for earnings. 33 00:01:45,319 --> 00:01:48,200 Speaker 3: This week, we're gonna hear from Wendy's, Deer, Applied Materials, 34 00:01:48,240 --> 00:01:51,320 Speaker 3: Coca Cola, Craft Time, CVS and more. That is your 35 00:01:51,320 --> 00:01:53,360 Speaker 3: Bloomberg business flash, David and Tom. 36 00:01:53,480 --> 00:01:56,200 Speaker 2: He adds, I mean I didn't laugh yesterday except one moment, 37 00:01:56,240 --> 00:01:58,760 Speaker 2: and David, I thought of Cam Dawson. It was a 38 00:01:58,800 --> 00:02:01,320 Speaker 2: wonderful dunk, And don't it's commercial. I wish they do 39 00:02:01,360 --> 00:02:03,880 Speaker 2: them all year round. I thought it was great. And 40 00:02:04,040 --> 00:02:06,800 Speaker 2: Starbucks shows up in the middle of the commercial looking 41 00:02:06,800 --> 00:02:10,440 Speaker 2: for a Coriander latte, and I thought of Kim, And 42 00:02:10,520 --> 00:02:12,320 Speaker 2: you go to Starbucks, what do you order? 43 00:02:12,440 --> 00:02:14,760 Speaker 4: If you're asking me about donuts, I will go for 44 00:02:14,919 --> 00:02:17,080 Speaker 4: Public's donuts every day of the week. 45 00:02:17,160 --> 00:02:18,080 Speaker 5: As a Florida Natives. 46 00:02:18,080 --> 00:02:19,600 Speaker 6: This is a Florida supermarket chain. 47 00:02:20,080 --> 00:02:22,119 Speaker 5: It's They're the greatest, do you know it. 48 00:02:23,200 --> 00:02:26,440 Speaker 2: They're like sweeter than Krispy Kreeks. 49 00:02:26,560 --> 00:02:27,240 Speaker 5: It is Florida. 50 00:02:27,919 --> 00:02:30,440 Speaker 2: Okay, thank you, Kim Dawson joining us right now. In 51 00:02:30,480 --> 00:02:33,720 Speaker 2: the equity markets, and you know, I'm looking at year 52 00:02:33,760 --> 00:02:36,440 Speaker 2: to day Dow up four percent, SPX up two and 53 00:02:36,480 --> 00:02:39,399 Speaker 2: a half percent, and Asda. You know, I'm sorry extrapolated 54 00:02:39,440 --> 00:02:42,400 Speaker 2: out it's a double digit ear Do you model a 55 00:02:42,560 --> 00:02:46,240 Speaker 2: double digit twenty twenty five for the equity market? 56 00:02:46,680 --> 00:02:48,960 Speaker 4: We think that it's going to be more like high 57 00:02:49,000 --> 00:02:52,280 Speaker 4: single digits, but there's potential that you can see ten 58 00:02:52,320 --> 00:02:55,639 Speaker 4: percent rallies, ten percent corrections. Our base case for twenty 59 00:02:55,680 --> 00:02:59,200 Speaker 4: five is a wide, choppy range where you could see 60 00:02:59,280 --> 00:03:01,280 Speaker 4: rallies over the course of the year in these sort 61 00:03:01,320 --> 00:03:04,040 Speaker 4: of risk on moments, but that because you're coming into 62 00:03:04,040 --> 00:03:07,560 Speaker 4: the year at such high valuations, you are very much 63 00:03:07,639 --> 00:03:09,679 Speaker 4: primed to have that downside volatility. 64 00:03:09,680 --> 00:03:12,160 Speaker 2: Okay, I'm gonna get volatility. But the answer is right now, 65 00:03:12,160 --> 00:03:12,799 Speaker 2: we're going up. 66 00:03:13,200 --> 00:03:17,919 Speaker 4: Why we're going up because there still is this risk 67 00:03:18,000 --> 00:03:20,639 Speaker 4: on notion that you are going to see a benefit 68 00:03:20,639 --> 00:03:24,240 Speaker 4: from policy out of Washington. You still are seeing earnings 69 00:03:24,320 --> 00:03:26,680 Speaker 4: go up. So if you look at fourth quarter earnings, 70 00:03:26,840 --> 00:03:29,799 Speaker 4: you went into earning season expecting twelve percent growth. You're 71 00:03:29,800 --> 00:03:32,960 Speaker 4: getting sixteen percent growth for the fourth quarter. But watch 72 00:03:33,040 --> 00:03:36,840 Speaker 4: this closely, you're actually seeing twenty five and twenty twenty 73 00:03:36,880 --> 00:03:39,000 Speaker 4: six estimates for the S and P five hundred get 74 00:03:39,080 --> 00:03:43,800 Speaker 4: trimmed just slightly. If that continues, that portends a bit 75 00:03:43,880 --> 00:03:46,320 Speaker 4: more of a choppy sideways market. 76 00:03:46,720 --> 00:03:49,520 Speaker 6: Peter cherw with us from Academy Securities earlier talking about 77 00:03:49,520 --> 00:03:52,160 Speaker 6: how he is kind of staying invested throughout all of 78 00:03:52,160 --> 00:03:54,280 Speaker 6: this uncertainty and the waves of it. How are you 79 00:03:54,960 --> 00:03:57,200 Speaker 6: approaching the likes of what we saw last night when 80 00:03:57,200 --> 00:03:58,920 Speaker 6: the President was on his plane and flow to what 81 00:03:58,920 --> 00:04:01,800 Speaker 6: maybe announced today. So the ups and downs from a 82 00:04:01,800 --> 00:04:04,000 Speaker 6: policy perspective when it comes just to uncertainty, if we 83 00:04:04,040 --> 00:04:05,240 Speaker 6: could charge if we could chart that. 84 00:04:05,640 --> 00:04:07,800 Speaker 4: Yeah, certainly, we think that there's going to be the 85 00:04:07,880 --> 00:04:09,960 Speaker 4: vagaries of the market as we move through the year. 86 00:04:10,000 --> 00:04:13,080 Speaker 4: And the reality is that unless we are thinking that 87 00:04:13,120 --> 00:04:17,240 Speaker 4: these policies have the potential to significantly dent growth, then 88 00:04:17,400 --> 00:04:21,560 Speaker 4: it does warrant you staying optimistic and invested in writing 89 00:04:21,600 --> 00:04:25,240 Speaker 4: out the volatility. So watch things like credit spreads. We 90 00:04:25,320 --> 00:04:28,480 Speaker 4: think credit spreads will be an important indicator of if 91 00:04:28,480 --> 00:04:31,440 Speaker 4: you're seeing growth start to weaken. If they remain contained, 92 00:04:31,760 --> 00:04:34,520 Speaker 4: it means that it's just equity positioning and valuation. 93 00:04:34,640 --> 00:04:37,279 Speaker 2: Polatility takes It's like scarlet food, it takes. 94 00:04:37,400 --> 00:04:39,000 Speaker 7: Credit right there, credit spreads. 95 00:04:40,080 --> 00:04:41,800 Speaker 2: No, thank you, Yeah, thank you. 96 00:04:43,200 --> 00:04:48,200 Speaker 6: L E s Okay, you know I was off last week, 97 00:04:48,240 --> 00:04:52,520 Speaker 6: but noted the fact that you noted as well in 98 00:04:52,560 --> 00:04:55,400 Speaker 6: that in those Michigan data there was the sense of 99 00:04:56,480 --> 00:04:58,679 Speaker 6: consumer anxiety about inflation where it's headed. 100 00:04:59,040 --> 00:04:59,440 Speaker 7: What do you. 101 00:04:59,360 --> 00:05:02,360 Speaker 6: Extrapolate from that? Putting aside all the concerns about the 102 00:05:02,400 --> 00:05:06,080 Speaker 6: politicization of the Michigan server whatever, how worried are you 103 00:05:06,120 --> 00:05:10,240 Speaker 6: about expectations for inflation becoming kind of unanchry run more, it's. 104 00:05:10,120 --> 00:05:12,240 Speaker 5: Certainly something that's on the fed's mind. 105 00:05:12,240 --> 00:05:15,080 Speaker 4: We do think you have to take the inflation expectations 106 00:05:15,080 --> 00:05:17,400 Speaker 4: stated with a huge grain of salt. First, it's very 107 00:05:17,400 --> 00:05:21,160 Speaker 4: correlated to oil prices, so consumers effectively report what they 108 00:05:21,240 --> 00:05:24,679 Speaker 4: see at the pump, even for long run inflation. Second, 109 00:05:24,880 --> 00:05:28,720 Speaker 4: you have this huge divergence between Republican and Democrat reports 110 00:05:28,720 --> 00:05:33,320 Speaker 4: on inflation expectations. We think watch the independence They've been stable. 111 00:05:33,640 --> 00:05:36,240 Speaker 4: Independents are sitting at three point three percent. It's been 112 00:05:36,240 --> 00:05:37,880 Speaker 4: the same for the last few years. 113 00:05:38,000 --> 00:05:40,960 Speaker 2: You've been great about I gotta be in the market, 114 00:05:41,040 --> 00:05:45,920 Speaker 2: I gotta participate. I forget about the David Gurra political 115 00:05:46,000 --> 00:05:50,440 Speaker 2: overlay right now of basically whatever your politics, total chaos. 116 00:05:50,960 --> 00:05:53,200 Speaker 2: I want you to talk right now to someone in 117 00:05:53,240 --> 00:05:55,920 Speaker 2: a four to one K plan who have a three 118 00:05:56,279 --> 00:05:59,760 Speaker 2: or a seven or a longer term perspective, how do 119 00:05:59,800 --> 00:06:03,320 Speaker 2: they maintain given the news flow. 120 00:06:03,880 --> 00:06:06,960 Speaker 4: Well, certainly we think that keeping that long term perspective 121 00:06:07,160 --> 00:06:10,080 Speaker 4: is incredibly important. And the thing that has to come 122 00:06:10,120 --> 00:06:14,800 Speaker 4: with that is an awareness that volatility is opportunity versus 123 00:06:14,839 --> 00:06:17,880 Speaker 4: something to be afraid of, and that this year is 124 00:06:18,040 --> 00:06:20,640 Speaker 4: likely going to have its twists and turns. We're only 125 00:06:20,680 --> 00:06:22,839 Speaker 4: a month and a half in and we've already gotten them. 126 00:06:23,160 --> 00:06:26,440 Speaker 4: Given the starting point of valuations, you are not set 127 00:06:26,520 --> 00:06:28,599 Speaker 4: up to be able to absorb a lot of bad news. 128 00:06:28,720 --> 00:06:30,800 Speaker 4: But that doesn't mean you should run for the hills. 129 00:06:31,040 --> 00:06:32,880 Speaker 4: We still think that there are good things happening in 130 00:06:32,920 --> 00:06:36,480 Speaker 4: the US economy, really strong things happening in US corporate earnings, 131 00:06:36,520 --> 00:06:39,359 Speaker 4: all things that support risk on assets. And see that 132 00:06:39,440 --> 00:06:42,599 Speaker 4: volatility is an opportunity to add instead of something to 133 00:06:42,680 --> 00:06:43,440 Speaker 4: run away from. 134 00:06:43,480 --> 00:06:45,599 Speaker 6: How why does your aperture when it comes to equities now? 135 00:06:45,640 --> 00:06:48,320 Speaker 6: Are you looking overseas or is the uncertainty of the 136 00:06:48,360 --> 00:06:50,400 Speaker 6: time we just mentioning. I like to harp on something 137 00:06:50,440 --> 00:06:52,920 Speaker 6: that's kind of precluding you from doing that, that there's 138 00:06:52,960 --> 00:06:56,360 Speaker 6: just too much of it and that kind of makes 139 00:06:56,400 --> 00:06:58,320 Speaker 6: difficult investing in overseas markets right now. 140 00:06:58,400 --> 00:07:01,920 Speaker 4: Don't look now, but China tech is outperforming US tech. 141 00:07:02,120 --> 00:07:06,200 Speaker 4: And we've seen this that's short, episodic upside volatility in 142 00:07:06,320 --> 00:07:08,960 Speaker 4: China tech over the course of the last few years, 143 00:07:09,080 --> 00:07:10,880 Speaker 4: and you have a big rally and it gives it 144 00:07:10,920 --> 00:07:13,560 Speaker 4: all back up. So it's not for the faint of heart. 145 00:07:13,840 --> 00:07:17,360 Speaker 4: But we are seeing this shift in some leadership where 146 00:07:17,360 --> 00:07:19,800 Speaker 4: we're seeing signs of life out of non US markets. 147 00:07:20,120 --> 00:07:23,040 Speaker 4: We don't think it's sustainable unless you see a major 148 00:07:23,080 --> 00:07:25,480 Speaker 4: dollar bear market. So we think you have to make 149 00:07:25,480 --> 00:07:29,280 Speaker 4: a dollar call to really push into non US markets, 150 00:07:29,480 --> 00:07:32,400 Speaker 4: And right now we're not seeing signs that the dollar 151 00:07:32,520 --> 00:07:35,280 Speaker 4: is imminently topping, so it could be more of a 152 00:07:35,320 --> 00:07:36,000 Speaker 4: short term. 153 00:07:35,840 --> 00:07:37,680 Speaker 5: Trade, but we think you have to be there. 154 00:07:37,720 --> 00:07:40,520 Speaker 4: You have to be looking because of the discounted valuations, 155 00:07:40,560 --> 00:07:41,720 Speaker 4: even though that's not a catalyst. 156 00:07:41,800 --> 00:07:43,400 Speaker 2: So what do you do with MEG seven right now? 157 00:07:43,440 --> 00:07:46,000 Speaker 2: They just reported The basic theme we got from Anna 158 00:07:46,080 --> 00:07:49,880 Speaker 2: Rag and man Deep was they can't keep up with 159 00:07:50,000 --> 00:07:55,080 Speaker 2: the demand for AI. Is the huge investment numbers we're 160 00:07:55,120 --> 00:07:57,560 Speaker 2: talking about. Do you just maintain MEG seven? 161 00:07:57,840 --> 00:07:59,960 Speaker 4: Well, we put out a note this morning that said, 162 00:08:00,240 --> 00:08:02,760 Speaker 4: maybe it's not the MAG seven, but it's the LAG seven. 163 00:08:03,320 --> 00:08:07,120 Speaker 4: The MAG seven has treated below it's fifty day moving average. 164 00:08:07,160 --> 00:08:11,120 Speaker 4: It's starting to show some signs of a weakening trend, 165 00:08:11,520 --> 00:08:13,560 Speaker 4: and if you look within the MAG seven, there's a 166 00:08:13,640 --> 00:08:17,559 Speaker 4: lot of dispersion. So Microsoft has been flat for a year. 167 00:08:17,760 --> 00:08:22,360 Speaker 4: It's gone nowhere because you've been cutting earning sestiments and 168 00:08:22,400 --> 00:08:25,120 Speaker 4: because they've seen such a huge increase in capex. The 169 00:08:25,200 --> 00:08:30,040 Speaker 4: numbers are wild Microsoft has three exits capex over the last. 170 00:08:30,520 --> 00:08:32,400 Speaker 5: Four years since twenty twenty one. 171 00:08:32,760 --> 00:08:35,480 Speaker 4: So it's cash flow has been weaker, but its operating 172 00:08:35,520 --> 00:08:38,680 Speaker 4: profit is very strong. So we think investors are starting 173 00:08:38,720 --> 00:08:40,920 Speaker 4: to lose a little bit of patience with all of 174 00:08:40,920 --> 00:08:46,320 Speaker 4: this capex that hasn't necessarily materialized in significant uplift in returns. 175 00:08:46,640 --> 00:08:50,480 Speaker 2: How do you respond, Cameron Dawson to people that go, 176 00:08:50,800 --> 00:08:54,959 Speaker 2: I can be solid in munis. They're forminal tax free whatever. 177 00:08:55,000 --> 00:09:00,199 Speaker 2: They are like a set versus equity exposure. 178 00:09:00,240 --> 00:09:03,280 Speaker 4: Well as as a firm that builds custom portfolios for 179 00:09:03,360 --> 00:09:06,120 Speaker 4: our clients. It really depends on your liquidity needs and 180 00:09:06,160 --> 00:09:07,920 Speaker 4: your risk toolery like a lawyer. 181 00:09:08,200 --> 00:09:11,800 Speaker 2: Well, our equity's going to outperform fobal tax free. 182 00:09:11,760 --> 00:09:14,040 Speaker 5: Munis over the long run. 183 00:09:14,120 --> 00:09:20,680 Speaker 4: Yes, but the equity risk premium today is extraordinarily tight. 184 00:09:21,200 --> 00:09:23,760 Speaker 2: Okay, so you're in your all beunies this morning. 185 00:09:24,000 --> 00:09:26,480 Speaker 5: No, we haven't. We maintain a balance portfolio. We are 186 00:09:26,520 --> 00:09:28,679 Speaker 5: so fully invested in that would show up. 187 00:09:28,720 --> 00:09:31,880 Speaker 6: I mean, we had a big sign homes dot Com yesterday. 188 00:09:31,960 --> 00:09:34,679 Speaker 2: It's got the lawyer work go away, Kendogs, thank you 189 00:09:35,000 --> 00:09:36,480 Speaker 2: so much with new Edge. 190 00:09:36,720 --> 00:09:46,880 Speaker 1: Right now, you're listening to the Bloomberg Surveillance Podcast. Catch 191 00:09:46,920 --> 00:09:50,000 Speaker 1: us live weekday afternoons from seven to ten a m Eastern. 192 00:09:50,160 --> 00:09:54,079 Speaker 1: Listen on Applecarplay and Android Auto with the Bloomberg Business app, 193 00:09:54,280 --> 00:09:56,000 Speaker 1: or watch us live on YouTube. 194 00:09:56,320 --> 00:09:59,480 Speaker 2: David Gurth and Tom King of Robert D. Kaplan and 195 00:09:59,520 --> 00:10:05,400 Speaker 2: everyone my affinity for his realist international relations. The body 196 00:10:05,400 --> 00:10:09,600 Speaker 2: of work is absolutely jaw dropping. Years ago my book 197 00:10:09,600 --> 00:10:13,160 Speaker 2: of the summer was the Return of Marco Polo's World. 198 00:10:13,320 --> 00:10:16,760 Speaker 2: My book of the year last year, a wonderful two 199 00:10:16,800 --> 00:10:20,719 Speaker 2: hundred and eighty pages, The Loom of Time between Empire 200 00:10:20,840 --> 00:10:25,880 Speaker 2: and Anarchy. He has been ferociously writing Robert T. Kaplan 201 00:10:26,360 --> 00:10:31,280 Speaker 2: and the must read waste Land, A World in Permanent Crisis. 202 00:10:31,400 --> 00:10:33,120 Speaker 2: David Gura with Robert D. 203 00:10:33,200 --> 00:10:36,439 Speaker 6: Kaplan and few bring in sort of reference to history 204 00:10:36,559 --> 00:10:39,959 Speaker 6: and art and writing with original repretashes as well as 205 00:10:39,960 --> 00:10:41,959 Speaker 6: he Robert Caplan. Great to speak with you this morning, 206 00:10:41,960 --> 00:10:43,959 Speaker 6: and I confess I was thumbing through the galley of 207 00:10:44,000 --> 00:10:46,680 Speaker 6: your latest book, Wasteland, A World in Permanent Crisis, while 208 00:10:46,679 --> 00:10:49,360 Speaker 6: I was covering the G twenty Leaders summ in Brazil 209 00:10:49,480 --> 00:10:50,920 Speaker 6: just a few months ago, and it was such a 210 00:10:50,920 --> 00:10:53,720 Speaker 6: strange moment at which we were looking to see what 211 00:10:53,800 --> 00:10:56,520 Speaker 6: President Biden might say or do. He really stepped back 212 00:10:57,080 --> 00:10:59,200 Speaker 6: and didn't say much of anything during the course of 213 00:10:59,240 --> 00:11:03,080 Speaker 6: that that gathering, and we saw kind of the reconfiguration 214 00:11:03,160 --> 00:11:06,320 Speaker 6: in real time of alliances on the ground there in Brazil, 215 00:11:07,600 --> 00:11:10,360 Speaker 6: the role of America being questioned in other countries coming 216 00:11:10,400 --> 00:11:14,000 Speaker 6: together in new ways as a result, help us understand 217 00:11:14,240 --> 00:11:16,080 Speaker 6: the moment that we're in as we hear so much 218 00:11:16,120 --> 00:11:19,520 Speaker 6: about what's going to happen here, to the rules based order, 219 00:11:20,200 --> 00:11:22,080 Speaker 6: to the way things happen for so much time here, 220 00:11:22,120 --> 00:11:24,520 Speaker 6: as we see a President Trump returning to the White 221 00:11:24,520 --> 00:11:27,320 Speaker 6: House and espousing the protections policies we first saw just 222 00:11:27,760 --> 00:11:28,520 Speaker 6: a few years ago. 223 00:11:29,679 --> 00:11:32,280 Speaker 8: Oh, thanks for having me on. I think we're at 224 00:11:32,280 --> 00:11:36,559 Speaker 8: the end of the post war order, post war I mean, 225 00:11:36,720 --> 00:11:40,400 Speaker 8: post World War two, but also a few decades after 226 00:11:40,480 --> 00:11:43,640 Speaker 8: the end of the Cold War. We've had the same 227 00:11:43,800 --> 00:11:48,840 Speaker 8: international order since nineteen forty five. Essentially, the United States 228 00:11:48,880 --> 00:11:55,760 Speaker 8: has been an empire in reality since then. And you 229 00:11:55,920 --> 00:11:59,679 Speaker 8: see it not only with Trump's lack of interest, not 230 00:11:59,760 --> 00:12:03,120 Speaker 8: just you know, making demands on NATO partners, but his 231 00:12:03,400 --> 00:12:06,720 Speaker 8: lack of interest in the Alliance in general, and the 232 00:12:06,800 --> 00:12:10,079 Speaker 8: Alliance of course rose out of the ashes of World 233 00:12:10,080 --> 00:12:14,000 Speaker 8: War Two. We also see it with his attempt to 234 00:12:14,160 --> 00:12:18,720 Speaker 8: gut to close down the US Agency for International Development 235 00:12:18,960 --> 00:12:23,000 Speaker 8: us ai D, because that too, has been a pillar 236 00:12:23,080 --> 00:12:26,400 Speaker 8: of the postwar order, even though most people until a 237 00:12:26,440 --> 00:12:29,920 Speaker 8: few weeks ago didn't really know much about it, because 238 00:12:29,920 --> 00:12:33,880 Speaker 8: it was through us ai D that American foreign aid 239 00:12:34,360 --> 00:12:38,320 Speaker 8: to countries throughout the developing world was channeled. So you 240 00:12:38,440 --> 00:12:43,080 Speaker 8: had hard power through NATO and our Pacific alliances, and 241 00:12:43,120 --> 00:12:47,680 Speaker 8: you had soft power through us ai D. Trump is 242 00:12:47,760 --> 00:12:51,200 Speaker 8: going after all of that his you know, it's not 243 00:12:51,360 --> 00:12:56,720 Speaker 8: that he's an isolationist. That's absolutely wrong. Trump engages with 244 00:12:56,880 --> 00:13:02,960 Speaker 8: the world. What Trump is doing is he's adding another 245 00:13:03,880 --> 00:13:09,440 Speaker 8: layer to manifest destiny. Manifest destiny you used to be 246 00:13:09,520 --> 00:13:13,000 Speaker 8: about America conquering the west from east to west, from 247 00:13:13,040 --> 00:13:16,679 Speaker 8: the East coast to the West coast in the nineteenth century. 248 00:13:17,000 --> 00:13:21,360 Speaker 8: Now he wants to expand manifest destiny north to south, 249 00:13:21,440 --> 00:13:25,240 Speaker 8: from Greenland to the Panama Canal, from the Arctic to 250 00:13:25,320 --> 00:13:30,079 Speaker 8: the Tropics. He sees a world of regional rather than 251 00:13:30,120 --> 00:13:33,920 Speaker 8: an American led post war order. He sees a world 252 00:13:34,080 --> 00:13:41,520 Speaker 8: of regional regional geography based alliances with China, the United States, etc. 253 00:13:42,679 --> 00:13:44,079 Speaker 6: I want to come back to that in a moment, 254 00:13:44,120 --> 00:13:45,840 Speaker 6: but picking up on something you said a moment ago, 255 00:13:45,880 --> 00:13:47,880 Speaker 6: and that is him kicking that leg of the stool, 256 00:13:48,200 --> 00:13:50,600 Speaker 6: the soft power legout from the stool. What are the 257 00:13:50,640 --> 00:13:54,040 Speaker 6: consequences of that? I mean, we've heard from Samantha Power, 258 00:13:54,080 --> 00:13:57,000 Speaker 6: the most recent head of USAID, making the case for 259 00:13:57,280 --> 00:14:00,240 Speaker 6: preserving that organization and keeping its good work goinging a 260 00:14:00,280 --> 00:14:03,400 Speaker 6: tool Gwande who worked there recently as well. I don't 261 00:14:03,400 --> 00:14:05,640 Speaker 6: know how much that's resonating, But what are the consequences 262 00:14:05,679 --> 00:14:08,080 Speaker 6: of losing that focus on soft power? 263 00:14:09,880 --> 00:14:14,120 Speaker 8: I think there are mens really because solt power you 264 00:14:14,240 --> 00:14:16,840 Speaker 8: need when things are not going well, when you're not 265 00:14:17,000 --> 00:14:19,360 Speaker 8: on top of the heat. When you have you know, 266 00:14:19,480 --> 00:14:24,680 Speaker 8: solt power is influence in countries, you know, having connections 267 00:14:24,720 --> 00:14:29,240 Speaker 8: in company, in countries, knowing people because you're working there, 268 00:14:29,400 --> 00:14:32,720 Speaker 8: you're doing things in case of a hostage crisis or 269 00:14:32,840 --> 00:14:36,040 Speaker 8: some sort of crisis, you always have a phone number 270 00:14:36,040 --> 00:14:39,400 Speaker 8: to call people. You know, it's about building relationships and 271 00:14:39,560 --> 00:14:43,760 Speaker 8: all of that would go just the word on AID. 272 00:14:44,320 --> 00:14:48,240 Speaker 8: You couldn't make the case that AID has not been 273 00:14:48,320 --> 00:14:52,080 Speaker 8: managed as well in recent years. However, the way to 274 00:14:52,160 --> 00:14:55,960 Speaker 8: deal with it is the way the tough Republican presidents 275 00:14:56,000 --> 00:14:59,160 Speaker 8: of the past dealt with it, like Ronald Reagan and others, 276 00:14:59,480 --> 00:15:02,600 Speaker 8: by putting it, by fixing it, by putting in real, 277 00:15:02,760 --> 00:15:06,280 Speaker 8: hard nosed business person types to run it. 278 00:15:07,480 --> 00:15:10,440 Speaker 2: Robert Kaplan with his folks in celebration of his new 279 00:15:10,480 --> 00:15:14,120 Speaker 2: effort two hundred some pages waste Land Gera. Read it 280 00:15:14,160 --> 00:15:17,320 Speaker 2: in Brazil. I haven't be honest read it, but top 281 00:15:17,360 --> 00:15:20,360 Speaker 2: of the pile right now. The loom of time from 282 00:15:20,400 --> 00:15:24,160 Speaker 2: Morocco out to Persia was spectacular in my book of 283 00:15:24,200 --> 00:15:29,520 Speaker 2: the Year last year. Robert Kaplan Egdone alluded to this 284 00:15:29,520 --> 00:15:33,240 Speaker 2: this weekend in the Post. But Richard Nixon in nineteen 285 00:15:33,360 --> 00:15:37,760 Speaker 2: sixty two was an author, and then he enjoyed losing 286 00:15:37,920 --> 00:15:41,160 Speaker 2: as governor of California to Pat Brown. He was at 287 00:15:41,240 --> 00:15:45,840 Speaker 2: his bottom. What comes after Trump? Have you framed out 288 00:15:46,320 --> 00:15:49,320 Speaker 2: in your mind that this let's assume he's not going 289 00:15:49,320 --> 00:15:53,840 Speaker 2: for an FDR three terms, But after President Trump, what 290 00:15:54,160 --> 00:15:55,880 Speaker 2: next for our politics? 291 00:15:59,680 --> 00:16:03,720 Speaker 8: We've had? First of all, one of the problems with 292 00:16:03,800 --> 00:16:09,360 Speaker 8: America in terms of American power and America's trajectory is 293 00:16:09,400 --> 00:16:13,240 Speaker 8: that it is is that the center is gone rather 294 00:16:13,320 --> 00:16:16,840 Speaker 8: than a center, right and a center left governing the country. 295 00:16:17,120 --> 00:16:22,600 Speaker 8: Where elect presidential elections were not existential. You now have 296 00:16:23,000 --> 00:16:28,600 Speaker 8: a progressive left and a populist right. Neither seems to 297 00:16:28,680 --> 00:16:32,680 Speaker 8: talk to the other. I think after Trump, what you're 298 00:16:32,880 --> 00:16:39,360 Speaker 8: likely to get is another populist right regime, or go 299 00:16:39,560 --> 00:16:43,560 Speaker 8: back to the progressive left. The real story in American 300 00:16:43,720 --> 00:16:48,040 Speaker 8: politics is the destruction of the center, the destruction of 301 00:16:48,080 --> 00:16:52,720 Speaker 8: the political center, which is partly the result of the 302 00:16:52,880 --> 00:16:56,200 Speaker 8: end of the print and typewriter age and the beginning 303 00:16:56,280 --> 00:17:03,440 Speaker 8: of the digital video era, where where news is not 304 00:17:03,800 --> 00:17:09,240 Speaker 8: in the middle, nuanced. It's all about passion and anxiety 305 00:17:09,400 --> 00:17:14,520 Speaker 8: and short bursts of simplicity through social media. 306 00:17:14,600 --> 00:17:16,840 Speaker 2: And David, I want to point out from Berkeley, Paul 307 00:17:16,880 --> 00:17:19,879 Speaker 2: Pearson and Eric Schuckler. Folks, for those of you in 308 00:17:19,920 --> 00:17:23,120 Speaker 2: the markets where you want one read here, it's Kaplan 309 00:17:23,840 --> 00:17:27,560 Speaker 2: really accessible Wasteland or the Loom of Time and a 310 00:17:27,560 --> 00:17:30,520 Speaker 2: little more dense. Paul Pearson and Eric Schickler, their book 311 00:17:30,560 --> 00:17:36,000 Speaker 2: Partisan Nation is shocking and describing what doctor Kaplan just mentioned. 312 00:17:36,119 --> 00:17:37,840 Speaker 6: I hear you saying that the center is gone, and 313 00:17:37,840 --> 00:17:39,880 Speaker 6: I can't help but think of the poem from which 314 00:17:39,880 --> 00:17:42,199 Speaker 6: your book takes its name of course the Wasteland by Elliot, 315 00:17:42,200 --> 00:17:44,320 Speaker 6: and how that's always been one we read in compliment 316 00:17:44,359 --> 00:17:47,359 Speaker 6: with or in conversation with the second Coming by Yates. 317 00:17:47,359 --> 00:17:51,640 Speaker 6: Of course, center cannot hold. And what I'm very curious 318 00:17:51,640 --> 00:17:53,920 Speaker 6: about is, and I've thought about it over the course 319 00:17:53,920 --> 00:17:56,480 Speaker 6: of the weekend last week as well, is the role 320 00:17:56,480 --> 00:17:59,159 Speaker 6: that Elon Musk and others from the tech industry are 321 00:17:59,160 --> 00:18:01,400 Speaker 6: playing now in the governance of this country and sort 322 00:18:01,440 --> 00:18:05,400 Speaker 6: of setting the policy direction of the United States. It's 323 00:18:05,440 --> 00:18:07,399 Speaker 6: something that you touch upon in the book, but I 324 00:18:07,440 --> 00:18:09,400 Speaker 6: wonder sort of how what we've seen over the course 325 00:18:09,400 --> 00:18:11,399 Speaker 6: of these last four weeks is advanced. You were thinking 326 00:18:11,440 --> 00:18:15,440 Speaker 6: on that relationship between Silicon Valley, what we identify as 327 00:18:15,760 --> 00:18:19,639 Speaker 6: a genius or technical facility, uh, with with managing this country, 328 00:18:19,640 --> 00:18:22,240 Speaker 6: with with setting its direction, and how perilous that might be. 329 00:18:23,680 --> 00:18:29,159 Speaker 8: Yes, The late Harvard political scientist Samuel Huntington said that 330 00:18:29,240 --> 00:18:33,040 Speaker 8: America was always great, not because of its people, but 331 00:18:33,200 --> 00:18:37,639 Speaker 8: because of its institutions, the separation of powers not just 332 00:18:37,760 --> 00:18:42,400 Speaker 8: in Washington, but between a county, federal and state out 333 00:18:42,440 --> 00:18:45,560 Speaker 8: in the out in the countryside. It was institutions that 334 00:18:45,680 --> 00:18:49,320 Speaker 8: made America great, and the sanctity of them. What we're 335 00:18:49,359 --> 00:18:54,919 Speaker 8: seeing with Elon Musk is an erosion of institutions you 336 00:18:54,960 --> 00:18:58,240 Speaker 8: know where think you know, more and more executive orders. 337 00:18:58,320 --> 00:19:01,320 Speaker 8: This didn't start with Trump, It's started with Biden and 338 00:19:01,440 --> 00:19:05,320 Speaker 8: even before that, but more and more executive orders, the 339 00:19:05,359 --> 00:19:09,560 Speaker 8: increasing power of the executive and the executive in more 340 00:19:09,600 --> 00:19:14,119 Speaker 8: and more collusion with oligars, you know, super wit rich people. 341 00:19:14,160 --> 00:19:15,879 Speaker 2: But then over the week so they were all at 342 00:19:15,920 --> 00:19:20,200 Speaker 2: the Super Bowl, Robert Kaplan with what you just said, 343 00:19:21,119 --> 00:19:24,320 Speaker 2: I think everybody of all political persuasions on this morning 344 00:19:24,359 --> 00:19:29,480 Speaker 2: commute across the nation are simply saying, where's the legislature, 345 00:19:30,160 --> 00:19:34,600 Speaker 2: where's the judiciary? Do you assume that there will be 346 00:19:34,840 --> 00:19:38,160 Speaker 2: checks and balances into March or April? 347 00:19:39,600 --> 00:19:42,399 Speaker 8: I'm not sure. I just know you can devise the 348 00:19:42,440 --> 00:19:46,760 Speaker 8: most brilliant constitution in the world, which the founders did 349 00:19:46,840 --> 00:19:51,120 Speaker 8: through the Federalist Papers. But it oh but and they 350 00:19:51,280 --> 00:19:55,480 Speaker 8: said it that we can devise the greatest constitution. But 351 00:19:55,600 --> 00:19:59,679 Speaker 8: it all ultimately comes down to, you know, to human 352 00:19:59,800 --> 00:20:04,040 Speaker 8: ca character, you know, you know, to the stability of people, 353 00:20:04,160 --> 00:20:10,480 Speaker 8: to their ethics. If you have people who are irrational, unethical, 354 00:20:11,160 --> 00:20:15,560 Speaker 8: or are in some way do not have real standing 355 00:20:15,720 --> 00:20:19,800 Speaker 8: moral standing. The best constitution is not going to help you. 356 00:20:21,160 --> 00:20:24,760 Speaker 6: I have seen you recently described as variously here a pessimist, 357 00:20:25,240 --> 00:20:30,680 Speaker 6: a tragic realist, at a Hobbesian. I wonder what gives 358 00:20:30,720 --> 00:20:33,400 Speaker 6: you any optimism here about the continuation of the American 359 00:20:33,400 --> 00:20:35,639 Speaker 6: experience in light of the reading and work that you 360 00:20:35,680 --> 00:20:37,040 Speaker 6: did on this, this latest volume. 361 00:20:38,080 --> 00:20:41,560 Speaker 8: What gives me optimism is that because America is a 362 00:20:41,600 --> 00:20:47,159 Speaker 8: boisterous democracy, it's gone through these periods before, you know, 363 00:20:48,160 --> 00:20:51,840 Speaker 8: stylistically and in other ways, this is not that much 364 00:20:52,000 --> 00:20:56,880 Speaker 8: different from the Jacksonian upheaval of the early nineteenth century, 365 00:20:56,920 --> 00:21:03,840 Speaker 8: when Andrew Jackson, a rough, un roughun unsophisticated on only 366 00:21:04,000 --> 00:21:08,639 Speaker 8: partially ethical of frontiersmen, came out and wiped out the 367 00:21:08,760 --> 00:21:13,480 Speaker 8: regime of the of the very feet aristocratic people from 368 00:21:13,520 --> 00:21:17,600 Speaker 8: Massachusetts and Virginia and the country. The country went on, 369 00:21:17,720 --> 00:21:21,680 Speaker 8: It went onto a new burst of of development and 370 00:21:21,680 --> 00:21:26,600 Speaker 8: and and and and and and dynamism, et cetera. So 371 00:21:27,920 --> 00:21:31,240 Speaker 8: it's a bad bet to give up on the United 372 00:21:31,280 --> 00:21:32,520 Speaker 8: States completely. 373 00:21:33,160 --> 00:21:36,600 Speaker 2: Robert T. Kaplan, I have to talk here about your 374 00:21:36,640 --> 00:21:39,520 Speaker 2: loom of time, and I just got a minute to 375 00:21:39,560 --> 00:21:42,679 Speaker 2: do it. If you were to write an epilogue of 376 00:21:42,760 --> 00:21:46,520 Speaker 2: the Middle East, of Eurasia, from Morocco over to Persia. 377 00:21:47,080 --> 00:21:50,480 Speaker 2: What would you write of today? What? What? 378 00:21:50,640 --> 00:21:52,840 Speaker 8: I what I would write up today in the loom 379 00:21:52,880 --> 00:21:57,040 Speaker 8: of time. I did not cover the Israel Palestine issue, 380 00:21:57,080 --> 00:21:59,720 Speaker 8: and that was good because I probably would have gotten 381 00:22:00,080 --> 00:22:03,680 Speaker 8: all in the book would have been dated. But I 382 00:22:03,720 --> 00:22:07,080 Speaker 8: would constantly. I would obviously have to write about that, 383 00:22:07,280 --> 00:22:11,640 Speaker 8: what has happened in Gaza, and I would just say 384 00:22:11,640 --> 00:22:14,800 Speaker 8: that the big question out there now that Israel is 385 00:22:14,920 --> 00:22:20,840 Speaker 8: dramatically weakened, Hesba lah Hamas and the hooties in North Yemen. 386 00:22:21,400 --> 00:22:25,119 Speaker 8: The biggest question out there is the future of the 387 00:22:25,160 --> 00:22:29,840 Speaker 8: Iranian regime, because if the Iranian regime were to implode 388 00:22:29,920 --> 00:22:32,919 Speaker 8: in some way or a fashion, it would be a 389 00:22:32,960 --> 00:22:36,200 Speaker 8: world historical event that would change the italiaes. 390 00:22:36,720 --> 00:22:38,719 Speaker 2: I got eight more questions. How many did you have? 391 00:22:39,040 --> 00:22:41,760 Speaker 2: Robert Kaplan? Thank you so much. Too short a visit. 392 00:22:41,800 --> 00:22:44,240 Speaker 2: We thought we'd do that, folks, to frame out where 393 00:22:44,280 --> 00:22:48,359 Speaker 2: our X number of days into Trump second administration. Robert 394 00:22:48,400 --> 00:22:51,800 Speaker 2: Kaplan and celebration of waste Land. Ger is the only 395 00:22:51,840 --> 00:22:53,840 Speaker 2: one on the planet has actually read it, which is 396 00:22:53,960 --> 00:22:54,400 Speaker 2: very cool. 397 00:22:54,440 --> 00:22:56,600 Speaker 6: It is very readable and I commend it to everybody 398 00:22:56,680 --> 00:22:57,480 Speaker 6: you as well. 399 00:22:57,640 --> 00:23:01,000 Speaker 2: Tom. Yeah, I can't say enough about his work. I'll 400 00:23:01,000 --> 00:23:02,880 Speaker 2: do that out on social here in the coming days. 401 00:23:02,960 --> 00:23:06,560 Speaker 2: Robert Kaplan where this was all of his affiliations, including 402 00:23:07,000 --> 00:23:07,800 Speaker 2: Eurasia grew. 403 00:23:08,720 --> 00:23:12,600 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 404 00:23:12,640 --> 00:23:15,680 Speaker 1: starting at seven am Eastern on Apple Coarclay, and Android 405 00:23:15,680 --> 00:23:18,720 Speaker 1: Auto with the Bloomberg Business App. You can also listen 406 00:23:18,800 --> 00:23:22,080 Speaker 1: live on Amazon Alexa from our flagship New York station, 407 00:23:22,600 --> 00:23:25,280 Speaker 1: Just say Alexa, Play Bloomberg eleven thirty. 408 00:23:25,520 --> 00:23:28,640 Speaker 2: Let's talk fourple text free. Pet Askell joins us out 409 00:23:28,920 --> 00:23:32,120 Speaker 2: headed Muni Bond group at Blackrock this morning. I don't 410 00:23:32,160 --> 00:23:35,800 Speaker 2: do enough on muni bonds. Is there any let's start 411 00:23:35,840 --> 00:23:38,719 Speaker 2: with this double tax free, triple tax free. Is there 412 00:23:38,800 --> 00:23:41,080 Speaker 2: a value for a New York state resident to buy 413 00:23:41,119 --> 00:23:42,800 Speaker 2: a Nebraska g O this morning? 414 00:23:44,200 --> 00:23:46,840 Speaker 7: No, I'd rather just stay at New York paper, stay Ky, 415 00:23:47,440 --> 00:23:49,840 Speaker 7: keep the stay exemption. Yeah, New York. Despite some of 416 00:23:49,880 --> 00:23:53,000 Speaker 7: the dysfunction all day, most New York credits are very solid. 417 00:23:53,359 --> 00:23:55,320 Speaker 7: So the I mean we can get into the rit 418 00:23:55,520 --> 00:23:57,600 Speaker 7: Versus Union College later on when we start to talking 419 00:23:57,600 --> 00:24:00,680 Speaker 7: about the small colleges. But the I would stay in 420 00:24:00,680 --> 00:24:06,280 Speaker 7: New York. Now you know that r You know ri 421 00:24:06,320 --> 00:24:08,720 Speaker 7: I T has had Union's number and lacross the last 422 00:24:08,760 --> 00:24:09,120 Speaker 7: few years. 423 00:24:09,240 --> 00:24:11,920 Speaker 2: Yeah, they all right. I was actually the meeting where 424 00:24:11,960 --> 00:24:14,399 Speaker 2: they were going D one is ish and the build 425 00:24:14,480 --> 00:24:18,760 Speaker 2: to you had to build two aster turf you had 426 00:24:18,800 --> 00:24:21,880 Speaker 2: to build two astro turf practice fields. 427 00:24:21,600 --> 00:24:24,600 Speaker 6: Too to get up to a certain leven and there 428 00:24:24,640 --> 00:24:24,960 Speaker 6: was there was. 429 00:24:24,960 --> 00:24:28,240 Speaker 2: A capitol commitment. They made it Union College because a 430 00:24:28,280 --> 00:24:31,639 Speaker 2: black Rock trust it wasn't to. 431 00:24:32,040 --> 00:24:34,560 Speaker 6: Continue to pat How is the the uncertainty that we've 432 00:24:34,600 --> 00:24:38,080 Speaker 6: talked about at this kind of more macro level percolated 433 00:24:38,119 --> 00:24:40,000 Speaker 6: down to to Muni's about about policy. 434 00:24:40,119 --> 00:24:43,159 Speaker 7: Is it yet or is it something that's too The 435 00:24:43,280 --> 00:24:46,240 Speaker 7: Muni market follows but lags the treasure market. So the 436 00:24:46,640 --> 00:24:48,680 Speaker 7: you know four eighty to four forty rally we saw 437 00:24:48,720 --> 00:24:51,960 Speaker 7: in the last month, Munie's rallied with it, and you know, 438 00:24:52,200 --> 00:24:55,439 Speaker 7: the they underperformed a bit. We outperformed a little bit 439 00:24:55,480 --> 00:24:58,400 Speaker 7: on the cell off on Friday, But overall, I would 440 00:24:58,440 --> 00:25:00,840 Speaker 7: say that you know, if you look at correlations over time, 441 00:25:01,160 --> 00:25:03,959 Speaker 7: munions are the least correlated of a large dollar dominant 442 00:25:04,000 --> 00:25:07,560 Speaker 7: bond markets to everything else that's going on the look, 443 00:25:07,600 --> 00:25:09,600 Speaker 7: I think that, you know, I thought it was very 444 00:25:09,640 --> 00:25:13,399 Speaker 7: interesting the Treasury Secretary said that the treasury supply was 445 00:25:13,440 --> 00:25:15,199 Speaker 7: going to be stable over the next couple of quarters, 446 00:25:15,680 --> 00:25:18,000 Speaker 7: because that that's one of our biggest concerns is that 447 00:25:18,080 --> 00:25:20,399 Speaker 7: they start to term out the debt, the bill market 448 00:25:20,480 --> 00:25:23,320 Speaker 7: becomes smaller as the composition of the debt that gives 449 00:25:23,400 --> 00:25:25,359 Speaker 7: us that push up towards five percent and ten year 450 00:25:25,400 --> 00:25:27,920 Speaker 7: no yields, and that you know that, obviously, in my opinion, 451 00:25:27,920 --> 00:25:29,560 Speaker 7: would be an opportunity in the municipal market. 452 00:25:30,080 --> 00:25:33,320 Speaker 6: Cam Dawson, talking a moment ago about her balance portfolio 453 00:25:33,960 --> 00:25:36,800 Speaker 6: talk a bit of bounce rip enthusiasm for muni's from 454 00:25:36,960 --> 00:25:40,000 Speaker 6: consumer investors. How appealing is that, How easy is it 455 00:25:40,040 --> 00:25:40,720 Speaker 6: for people to get it into. 456 00:25:40,760 --> 00:25:43,680 Speaker 7: I think people are getting more excited about about munis 457 00:25:43,880 --> 00:25:46,000 Speaker 7: and fixed income in general, because this is the first 458 00:25:46,040 --> 00:25:48,600 Speaker 7: time we've had real yields at this level since this 459 00:25:48,680 --> 00:25:51,280 Speaker 7: since the financial crisis, except for a few points of 460 00:25:51,320 --> 00:25:54,000 Speaker 7: stress like the pandemic and things like that. So, you know, 461 00:25:54,280 --> 00:25:55,600 Speaker 7: we were we spent a lot of time in the 462 00:25:55,680 --> 00:25:58,439 Speaker 7: road the last last few weeks. We converted our our 463 00:25:58,600 --> 00:26:01,399 Speaker 7: high yield mutual fund, which has an excellent track record 464 00:26:01,680 --> 00:26:04,320 Speaker 7: today and do an actively managed et I had some 465 00:26:04,400 --> 00:26:07,359 Speaker 7: news Tommy, right, the uh and then we're really excited 466 00:26:07,359 --> 00:26:11,320 Speaker 7: about it. So the h I M you, we lowered 467 00:26:11,359 --> 00:26:15,720 Speaker 7: the fee by over twenty five percent, transparent, easy to access, 468 00:26:16,800 --> 00:26:18,720 Speaker 7: the high yield muni market very excited about. 469 00:26:18,880 --> 00:26:22,600 Speaker 2: Can you own munis within a retirement plan? Uh? 470 00:26:22,760 --> 00:26:26,080 Speaker 7: No, because well you can own taxable munis. But yeah, 471 00:26:26,119 --> 00:26:28,720 Speaker 7: but you would never when you already have your tax 472 00:26:28,840 --> 00:26:30,600 Speaker 7: to fur you're not gonna put it. Yeah, you know, 473 00:26:30,840 --> 00:26:31,639 Speaker 7: So how is it? 474 00:26:31,760 --> 00:26:34,879 Speaker 2: Give you an example of a taxable muni that Michael 475 00:26:35,000 --> 00:26:37,280 Speaker 2: Barr would put into his retirement plane. 476 00:26:38,680 --> 00:26:41,359 Speaker 7: The u I would say, any of the any of 477 00:26:41,359 --> 00:26:44,320 Speaker 7: the babs that were issued post financial crisis. You know, 478 00:26:44,359 --> 00:26:46,800 Speaker 7: there's Cow babs outstanding, These New York bab's outstanding. Some 479 00:26:46,840 --> 00:26:49,399 Speaker 7: of those got called last year. But all those are 480 00:26:49,480 --> 00:26:52,960 Speaker 7: high quality, big insurance demand for that, for that high quality, 481 00:26:53,040 --> 00:26:54,840 Speaker 7: long duration paper. It's not enough of it out there. 482 00:26:54,880 --> 00:26:57,359 Speaker 2: Okay, this is the I want to go. David's loaded 483 00:26:57,400 --> 00:27:00,320 Speaker 2: the boat at thirty year bonds for the kids. What's 484 00:27:00,400 --> 00:27:04,760 Speaker 2: the biggest mistake retail makes in duration or maturity of 485 00:27:04,760 --> 00:27:07,119 Speaker 2: communities versus what the adults do. 486 00:27:07,640 --> 00:27:11,440 Speaker 7: I actually think the biggest mistake the mean that retail 487 00:27:11,560 --> 00:27:15,360 Speaker 7: makes vis a vis their curve selection is going too 488 00:27:15,520 --> 00:27:18,680 Speaker 7: short on the curve. Interesting because if you think about 489 00:27:18,720 --> 00:27:23,280 Speaker 7: it immunity markets, it's we fund projects or long duration market. Now, 490 00:27:23,359 --> 00:27:25,639 Speaker 7: look what I've said that at the zero buonoministrates. No, 491 00:27:25,840 --> 00:27:27,800 Speaker 7: but you know now I think you know, having the 492 00:27:27,840 --> 00:27:31,359 Speaker 7: opportunity to opportunity to layer in these you know, eight 493 00:27:31,440 --> 00:27:35,119 Speaker 7: to nine percent after tax returns in the in the 494 00:27:35,200 --> 00:27:36,879 Speaker 7: high yeld muny market, I just don't think we're going 495 00:27:36,960 --> 00:27:38,280 Speaker 7: to see that very often. And if it gets to 496 00:27:38,359 --> 00:27:40,239 Speaker 7: ten eleven percent, you're not going to own a lot 497 00:27:40,240 --> 00:27:40,680 Speaker 7: of equities. 498 00:27:41,240 --> 00:27:44,320 Speaker 6: I remember listening to Taylor Riggs, formerly of here, talking 499 00:27:44,359 --> 00:27:46,720 Speaker 6: a lot about the muni market and all the projects 500 00:27:46,720 --> 00:27:49,000 Speaker 6: that could be she left, there's more news for you. 501 00:27:51,680 --> 00:27:54,600 Speaker 6: What are the projects now that are sort of most 502 00:27:54,640 --> 00:27:57,040 Speaker 6: of the funding is going toward where we seeing the 503 00:27:57,119 --> 00:27:58,880 Speaker 6: greatest greatest interest terms of funny. 504 00:27:58,640 --> 00:28:03,119 Speaker 7: Projects, whether the the biggest. The biggest project on the 505 00:28:03,200 --> 00:28:05,560 Speaker 7: docket for the next couple of weeks is the bright 506 00:28:05,640 --> 00:28:08,520 Speaker 7: Line train out West, which will be a high speed 507 00:28:08,600 --> 00:28:12,359 Speaker 7: electric train going from Las Vegas to Los Angeles. So 508 00:28:12,520 --> 00:28:15,359 Speaker 7: we really that's it's a large, non rated deal. It'll 509 00:28:15,400 --> 00:28:17,440 Speaker 7: be very interesting to see how the market absorbs that. 510 00:28:17,720 --> 00:28:20,359 Speaker 7: It's an exciting project, but it's it's a non rated 511 00:28:20,359 --> 00:28:22,040 Speaker 7: it's a two and a half million dollar deal. It'll 512 00:28:22,040 --> 00:28:23,720 Speaker 7: be interesting to see how the marketing sworts that one. 513 00:28:24,119 --> 00:28:27,520 Speaker 2: The ETFs for munis is get showing interest. I mean, 514 00:28:27,720 --> 00:28:29,480 Speaker 2: this is I think if new ven years ago in 515 00:28:29,640 --> 00:28:33,560 Speaker 2: unit trust or buying individual paper, the wull ETF things 516 00:28:33,600 --> 00:28:34,320 Speaker 2: picking up hip. 517 00:28:34,400 --> 00:28:36,680 Speaker 7: One of the things that people learned, especially after going 518 00:28:36,760 --> 00:28:39,320 Speaker 7: through the pandemic when in some of the mass selling 519 00:28:39,560 --> 00:28:42,600 Speaker 7: in March and April of twenty twenty, is they want 520 00:28:42,640 --> 00:28:46,120 Speaker 7: to know what's inside these funds. And you know there's 521 00:28:46,160 --> 00:28:48,680 Speaker 7: a there's a place for open end mutual funds, no question, 522 00:28:49,440 --> 00:28:51,800 Speaker 7: but you know, being able to see the transparency of 523 00:28:51,840 --> 00:28:55,440 Speaker 7: the portfolio every day is very attractive investors. The other 524 00:28:55,520 --> 00:28:58,960 Speaker 7: thing is is so many financial advisors retool their practices 525 00:28:58,960 --> 00:29:02,120 Speaker 7: and they're using models. ETF fit very easily in the model. 526 00:29:02,160 --> 00:29:03,880 Speaker 7: So the ease of use also is really nice. 527 00:29:04,240 --> 00:29:07,280 Speaker 2: Were you ever at Union College when it was twenty 528 00:29:07,400 --> 00:29:08,440 Speaker 2: six below zero? 529 00:29:08,880 --> 00:29:09,080 Speaker 1: Yes? 530 00:29:10,520 --> 00:29:12,640 Speaker 2: Could you walk across the Mohawk River? 531 00:29:12,920 --> 00:29:16,120 Speaker 7: The that I don't know because we probably hidden basements. 532 00:29:16,240 --> 00:29:19,920 Speaker 7: But the or you're working on the sixth, the sixth 533 00:29:20,040 --> 00:29:24,040 Speaker 7: casees Unica club, the Yeah, I mean there was they 534 00:29:24,080 --> 00:29:26,840 Speaker 7: still let us have kegs back then, the and there 535 00:29:26,920 --> 00:29:27,480 Speaker 7: was a lot of them. 536 00:29:29,160 --> 00:29:33,000 Speaker 2: Thank you so much, him, thanks thanks for having me, 537 00:29:33,160 --> 00:29:35,760 Speaker 2: very good. Thank you. I really appreciate it. Head of 538 00:29:35,800 --> 00:29:37,440 Speaker 2: Muni Bonds at Black Rack. 539 00:29:44,040 --> 00:29:47,920 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 540 00:29:47,960 --> 00:29:50,959 Speaker 1: starting at seven am Eastern on Apple Coarcklay, and Android 541 00:29:51,000 --> 00:29:54,000 Speaker 1: Auto with the Bloomberg Business app. You can also watch 542 00:29:54,080 --> 00:29:57,000 Speaker 1: us live every weekday on YouTube and always on the 543 00:29:57,040 --> 00:29:58,080 Speaker 1: Bloomberg Terminal. 544 00:29:58,280 --> 00:30:02,200 Speaker 2: Special edition front pages. Today a super Bowl Driven with 545 00:30:02,360 --> 00:30:06,680 Speaker 2: Lisa Mateos. She washed every minute every ad. Mateo reports, 546 00:30:07,480 --> 00:30:08,920 Speaker 2: I am really. 547 00:30:08,800 --> 00:30:09,680 Speaker 5: Feeling it this morning. 548 00:30:09,760 --> 00:30:10,040 Speaker 8: Guys. 549 00:30:10,080 --> 00:30:13,680 Speaker 3: Okay, so fashion, right, you talk Super Bowl and everything, 550 00:30:13,920 --> 00:30:17,040 Speaker 3: but the fashion at the halftime show and of course 551 00:30:17,080 --> 00:30:19,360 Speaker 3: a pop star suite that's all in the headlines. Okay, 552 00:30:19,400 --> 00:30:21,520 Speaker 3: So Kendrick Lamar, you know he did the halftime show. 553 00:30:21,720 --> 00:30:24,040 Speaker 3: Yes he had the fancy varsity jacket, but what people 554 00:30:24,080 --> 00:30:27,160 Speaker 3: are pointing out are the jeans he was wearing. He 555 00:30:27,320 --> 00:30:30,920 Speaker 3: was wearing blue wash, bleachy blue wash bell bottomed jeans. 556 00:30:31,160 --> 00:30:33,760 Speaker 3: So they're saying, is that the new thing? I mean, David, 557 00:30:33,800 --> 00:30:35,080 Speaker 3: I don't know if I could see you in the fit. 558 00:30:35,280 --> 00:30:37,360 Speaker 6: No, but Tom might bring his closet. 559 00:30:37,840 --> 00:30:40,800 Speaker 7: You had them from the Boulder days. Yeah, I didn't 560 00:30:40,840 --> 00:30:41,320 Speaker 7: even know what. 561 00:30:41,440 --> 00:30:47,040 Speaker 2: Year was at the sunk with the Nebraska attack. 562 00:30:49,120 --> 00:30:51,760 Speaker 3: Yes, so you have Kendrick Lamar's bell bottoms. But also 563 00:30:51,960 --> 00:30:54,440 Speaker 3: Taylor Swift. Everybody was wondering what she was going to wear, 564 00:30:55,080 --> 00:30:57,840 Speaker 3: so they're saying she had She had the double breasted 565 00:30:58,000 --> 00:31:05,320 Speaker 3: white San Laurent Blair blazer today, the bedazzled Daisy Dukes. 566 00:31:05,360 --> 00:31:07,760 Speaker 3: You have to have those two, okay, and the white bodysuit, 567 00:31:07,840 --> 00:31:09,640 Speaker 3: the thigh high white stiletto boots. 568 00:31:09,840 --> 00:31:11,080 Speaker 5: The theme is white. 569 00:31:11,160 --> 00:31:14,280 Speaker 3: But everybody was saying, oh, she was wearing white because maybe. 570 00:31:14,080 --> 00:31:15,480 Speaker 5: She was going to get engaged, and that. 571 00:31:15,560 --> 00:31:16,200 Speaker 3: Sparked all this. 572 00:31:18,240 --> 00:31:23,760 Speaker 2: It was too but miss Swift was carrying the cherry 573 00:31:23,840 --> 00:31:27,240 Speaker 2: red Javan she yes, a hit Vanessa Friedman. 574 00:31:27,560 --> 00:31:27,720 Speaker 8: Yes. 575 00:31:27,840 --> 00:31:30,160 Speaker 3: And she also wore remember that that thigh high little 576 00:31:30,240 --> 00:31:31,880 Speaker 3: tea necklace that she wore in the Grammys. 577 00:31:32,440 --> 00:31:36,520 Speaker 5: I yess, she wore it on her neck. So it 578 00:31:36,640 --> 00:31:37,320 Speaker 5: came back again. 579 00:31:37,400 --> 00:31:39,960 Speaker 2: The tea necklacespapers today. 580 00:31:40,640 --> 00:31:43,680 Speaker 3: Fashion Now it's a fashion report because guess who else 581 00:31:43,800 --> 00:31:46,000 Speaker 3: was in the spotlight for something they wore on their wrist. 582 00:31:46,640 --> 00:31:47,520 Speaker 3: That was Tom Brady. 583 00:31:47,600 --> 00:31:48,920 Speaker 6: Tom Brady, did you notice it? 584 00:31:49,040 --> 00:31:52,000 Speaker 3: It was like shining, the lights were bladed. It was okay, 585 00:31:52,320 --> 00:31:54,360 Speaker 3: it was a stunt of Jacob and Company. Do you 586 00:31:54,400 --> 00:31:55,640 Speaker 3: know how much that wash cost? 587 00:31:56,080 --> 00:31:57,320 Speaker 2: Seven hundred and forty. 588 00:31:57,160 --> 00:31:58,520 Speaker 5: Thousand dollars. 589 00:31:59,760 --> 00:32:00,720 Speaker 7: Look for mister Brady. 590 00:32:00,880 --> 00:32:05,560 Speaker 3: Yeah, caviar Torbillon model. It's yellow sapphires design. I mean 591 00:32:05,640 --> 00:32:08,200 Speaker 3: it had forty eight carrots worth of yellow sapphires. 592 00:32:08,280 --> 00:32:13,480 Speaker 6: I never understood, as I don't know was made of alligator. 593 00:32:13,880 --> 00:32:17,520 Speaker 3: Yes, it was there you go. It glistened like pearls 594 00:32:17,560 --> 00:32:18,120 Speaker 3: of caviar. 595 00:32:18,280 --> 00:32:19,160 Speaker 7: That's why it's called it. 596 00:32:20,360 --> 00:32:22,480 Speaker 2: I think it distracted. 597 00:32:22,600 --> 00:32:23,640 Speaker 3: It was a little bit distracted. 598 00:32:23,680 --> 00:32:25,640 Speaker 7: I just said, the ers at home can see my swatch. 599 00:32:26,000 --> 00:32:29,480 Speaker 2: Let me star it twelve seconds. Brady is a pinata, yes, 600 00:32:29,720 --> 00:32:32,600 Speaker 2: And the moment they stopped coaching him and he actually 601 00:32:32,720 --> 00:32:35,440 Speaker 2: talks about what he knows, like not scoring in the 602 00:32:35,520 --> 00:32:36,120 Speaker 2: first quarter. 603 00:32:36,600 --> 00:32:38,560 Speaker 3: He sounds wonderful when he gets out of his head. 604 00:32:38,800 --> 00:32:40,720 Speaker 2: When he gets out of his head, he's like, really 605 00:32:40,880 --> 00:32:41,920 Speaker 2: quite good. Next. 606 00:32:42,000 --> 00:32:43,960 Speaker 3: Okay, Lucashaw, you talked about this, so I want to 607 00:32:44,000 --> 00:32:46,200 Speaker 3: bring it up. Really a good article on the Termin'll 608 00:32:46,280 --> 00:32:49,280 Speaker 3: check it out on screen time talking about why football 609 00:32:49,520 --> 00:32:53,000 Speaker 3: NFL has gotten so big. So one Nielsen counts views 610 00:32:53,000 --> 00:32:54,360 Speaker 3: at bars, restaurants and airports. 611 00:32:54,400 --> 00:32:56,400 Speaker 5: Now, okay, but to the league. 612 00:32:56,120 --> 00:32:59,160 Speaker 3: At shrunk gets off seasons and even during the off season. 613 00:32:59,280 --> 00:33:01,520 Speaker 3: It keeps him that them going. Right, you have the draft, 614 00:33:01,640 --> 00:33:04,760 Speaker 3: you have the NFL scouting combine, so they keep it going. 615 00:33:04,840 --> 00:33:06,800 Speaker 3: And then bar, like Michael Barr said, you know, the 616 00:33:06,920 --> 00:33:10,800 Speaker 3: expansion into streaming, but the NFL itself, the season is short, 617 00:33:10,840 --> 00:33:11,760 Speaker 3: so every game matters. 618 00:33:12,120 --> 00:33:16,240 Speaker 2: Two guys that invented Game of Thrones, Bennioff and the 619 00:33:16,360 --> 00:33:19,080 Speaker 2: other guy, once said to my face it was an 620 00:33:19,120 --> 00:33:20,920 Speaker 2: honor to talk to them for the length of time. 621 00:33:21,640 --> 00:33:24,320 Speaker 2: We thought we had to create a crescendo in the 622 00:33:24,400 --> 00:33:27,120 Speaker 2: show at the last season. Then they learned they had 623 00:33:27,160 --> 00:33:31,360 Speaker 2: to have a crescendo every week twice. That's what the 624 00:33:31,560 --> 00:33:36,040 Speaker 2: NFL's accomplished versus baseball. Baseball still back in the nineteen 625 00:33:36,120 --> 00:33:39,560 Speaker 2: thirties on a train, you know, we got four games 626 00:33:39,640 --> 00:33:42,520 Speaker 2: in Kansas City. Who are you going to pitch? The 627 00:33:42,560 --> 00:33:44,880 Speaker 2: third game. Do you have anything else? Quick? 628 00:33:45,640 --> 00:33:47,480 Speaker 3: What was your favorite super Bowl ad? Because that was 629 00:33:47,720 --> 00:33:50,480 Speaker 3: the one from the YouTube predicted that the top one. 630 00:33:50,480 --> 00:33:51,240 Speaker 1: Was the Muppets. 631 00:33:51,520 --> 00:33:53,400 Speaker 3: Did you see the Muppets looking down? 632 00:33:53,600 --> 00:33:56,760 Speaker 2: Yeah? I thought some were really quite good. In a 633 00:33:56,840 --> 00:33:58,760 Speaker 2: lot of them, I'm like, who are they talking to? 634 00:34:00,120 --> 00:34:00,680 Speaker 4: I loved it. 635 00:34:00,800 --> 00:34:03,720 Speaker 3: The Meg Ryan, Billy, Crystal one, bet the Hellman's Mayname. Yeah, 636 00:34:03,920 --> 00:34:04,440 Speaker 3: that was good. 637 00:34:04,520 --> 00:34:09,760 Speaker 2: Cat's Delli. Lisa'll tell you with a super Bowl report. 638 00:34:10,000 --> 00:34:11,759 Speaker 2: Thank you so much, greatly appreciate it. 639 00:34:12,160 --> 00:34:16,960 Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify, 640 00:34:17,120 --> 00:34:21,360 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 641 00:34:21,520 --> 00:34:24,960 Speaker 1: seven to ten am Eastern on Bloomberg dot com, the 642 00:34:25,080 --> 00:34:29,040 Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You 643 00:34:29,120 --> 00:34:32,440 Speaker 1: can also watch us live every weekday on YouTube and 644 00:34:32,680 --> 00:34:34,400 Speaker 1: always on the Bloomberg terminal.