WEBVTT - FAANG Can Go Another 25-30% Higher by Mid-2021: Wedbush's Ives 0:00:01.360 --> 0:00:04.120 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along 0:00:04.120 --> 0:00:06.200 with my co host of Bonnie Quinn. Every business day 0:00:06.240 --> 0:00:10.360 we bring you interviews from CEO, market pros, and Bloomberg experts, 0:00:10.400 --> 0:00:13.600 along with essential market moving news. Find the Bloomberg Markets 0:00:13.600 --> 0:00:17.000 Podcast on Apple Podcasts or wherever you listen to podcasts, 0:00:17.000 --> 0:00:22.079 and on Bloomberg dot com. I love this quote I 0:00:22.120 --> 0:00:25.480 read just recently. Quote right now it's big text world 0:00:25.720 --> 0:00:28.640 and everyone else is paying rent. That was wed Best 0:00:28.720 --> 0:00:32.519 Securities analyst Dan Ives and Dan joins us here. Dan, 0:00:32.560 --> 0:00:34.199 thanks so much for joining us here. I love that 0:00:34.280 --> 0:00:37.840 quote you had, and the numbers we saw last night 0:00:38.400 --> 0:00:40.800 really bear that out. So let's step back, you know, 0:00:40.880 --> 0:00:44.760 thirty feet, and we have those big four tech companies 0:00:45.000 --> 0:00:50.400 last night report strong to extraordinarily strong results. How should 0:00:50.440 --> 0:00:54.280 we put all this in context? Yeah, I mean these 0:00:54.280 --> 0:00:58.080 stocks have had massive moves and really it's what's led 0:00:58.440 --> 0:01:01.600 the market to touch the all time highs that we're seeing. 0:01:02.280 --> 0:01:04.640 And but there was a lot of pressure, especially what 0:01:04.760 --> 0:01:07.640 we saw last week with Microsoft and TESSAs, and the 0:01:07.760 --> 0:01:11.440 momentum came off last night was a fork in the 0:01:11.520 --> 0:01:14.920 road situation for tech and they needed to not just 0:01:15.120 --> 0:01:17.319 talk to talk, but walk to walk. And this is 0:01:17.319 --> 0:01:19.759 a tech freight train right now that I is showing 0:01:19.760 --> 0:01:22.760 no sign to slowing down across the board as the 0:01:22.920 --> 0:01:27.600 COVID environment has really ACCELERI these growth stories by eighteen 0:01:27.640 --> 0:01:31.160 to twenty four months with Apple front and center. So 0:01:31.200 --> 0:01:33.600 what kind of stock gains are we looking at and 0:01:33.640 --> 0:01:36.360 what will these text dooks trade us in say a 0:01:36.440 --> 0:01:40.520 year's time. Well, I also think there's a rerating going on, 0:01:40.800 --> 0:01:44.040 and you know the haters will hate, but but I 0:01:44.080 --> 0:01:47.200 don't see that now. I think there's a middle innings 0:01:47.280 --> 0:01:50.160 of a re rating intact because there's a lack of 0:01:50.200 --> 0:01:52.800 security growth stories. And if you look more and more, 0:01:52.800 --> 0:01:56.680 you've seen that consolidation. I still think fang names going 0:01:56.720 --> 0:02:01.760 to the higher over the next nine months. And I 0:02:01.800 --> 0:02:05.320 think what you saw from these numbers, it reflects the 0:02:05.400 --> 0:02:08.720 fundamental cases. And now you're going to continue to see 0:02:08.760 --> 0:02:12.200 investors with a green light to by tax this morning, 0:02:12.200 --> 0:02:15.320 and I think over the coming weeks and months. Let's 0:02:15.360 --> 0:02:20.080 talk about alphabet the parent of Google. Uh, Tom Kin 0:02:20.120 --> 0:02:22.799 doesn't even it's it's an alphabet free studio with Tom Keane, 0:02:22.840 --> 0:02:24.240 but we'll go with it a little bit here stocks 0:02:24.240 --> 0:02:27.360 all four and a half percent here, just a sense 0:02:27.360 --> 0:02:30.040 of kind of the advertising and the business model for 0:02:30.200 --> 0:02:35.000 Google here in a pandemic world. Yeah, definitely digital advertising 0:02:35.040 --> 0:02:37.919 and seeing headwinds and that's what alphabets being and I 0:02:37.960 --> 0:02:40.960 think you've seen the stock reflecting that. But but I 0:02:41.000 --> 0:02:45.040 do think that this is more of a call one 0:02:45.080 --> 0:02:49.320 to three quarter issue radding something that's going to be sustainable. 0:02:49.639 --> 0:02:52.160 But you're seeing a knee jerk negative reaction as this 0:02:52.280 --> 0:02:55.440 clearly is a headwind and they're seeing that front and center, 0:02:55.639 --> 0:02:59.480 and some of those other areas like Google Cloud still small, 0:03:00.080 --> 0:03:03.280 that continues to be the core business and unlike their 0:03:03.360 --> 0:03:07.640 fang brethren, definitely not the results investors wanted to see, 0:03:07.720 --> 0:03:11.520 even though anticipation it was going to be weak. Numbers 0:03:11.560 --> 0:03:14.280 even weaker than the whisper. Let me ask you, if 0:03:14.280 --> 0:03:18.799 we don't get some kind of new stimulus that gives 0:03:18.840 --> 0:03:21.639 people a few little extra dollars in their pocket, If this, 0:03:22.120 --> 0:03:24.600 you know, next round, is going to make people really 0:03:24.720 --> 0:03:27.079 cut back, do we see them coming back on things 0:03:27.080 --> 0:03:31.680 like tech spending or you know, streaming services spending. I 0:03:31.720 --> 0:03:35.000 think most consumers view all of these fang games is 0:03:35.040 --> 0:03:39.320 almost utilities. It's bread. You know, it's really food, water, 0:03:40.040 --> 0:03:42.440 and a lot of these fangs in terms of from 0:03:42.520 --> 0:03:45.600 Facebook to Apple and Amazon to others in terms of 0:03:45.680 --> 0:03:49.320 interaction and really consumer uteries. And I think that's what's 0:03:49.360 --> 0:03:53.360 really happened here, is is that these stocks really become 0:03:53.400 --> 0:03:57.880 tech utilities, and of course the consumer environment, especially a 0:03:57.960 --> 0:04:02.600 thousand hour Apples and some other purchases should definitely get hit. 0:04:03.240 --> 0:04:06.200 I think what you're seeing is for Apple to beat 0:04:06.320 --> 0:04:10.440 iPhones by four billions in the middle of a once 0:04:10.480 --> 0:04:13.560 in a hundred year pandemic. That's a jaw dropper. I 0:04:13.600 --> 0:04:15.720 mean I almost fell off my chair when I saw 0:04:15.800 --> 0:04:20.560 those numbers. Head Dan on Wednesday, again, the CEOs of 0:04:20.640 --> 0:04:22.400 some of these companies are right in front of Congress 0:04:22.400 --> 0:04:28.160 talking about antitrust ostensibly. Um, any takeaways there, what's the 0:04:28.279 --> 0:04:30.680 risk factors it relates to? Just regulatory risk? Give us 0:04:30.680 --> 0:04:33.920 an update there? Well, the one takeaway it's better they 0:04:34.000 --> 0:04:36.719 did it the day before earnings than the day after, 0:04:37.400 --> 0:04:40.640 just given the the types of profits they showed in uh, 0:04:41.520 --> 0:04:43.960 you know, Monster Quarters book. I think it's a it's 0:04:43.960 --> 0:04:47.680 a risk. I think it's viewed at in terms of 0:04:47.800 --> 0:04:50.839 it was still a little more grandstanding and more of 0:04:50.839 --> 0:04:53.880 a circus atmosphere, and I think investors came away feeling 0:04:53.920 --> 0:04:56.760 like nothing's going to happen in near term in terms 0:04:56.800 --> 0:04:59.479 of breakup. But I do believe momentum building in the 0:04:59.480 --> 0:05:03.240 Beltway as well as in the EU against these tech giants. 0:05:03.240 --> 0:05:06.400 The stronger getting stronger in this environment. A lot of 0:05:06.400 --> 0:05:10.440 it really hinges on any type of legislative fix and 0:05:10.760 --> 0:05:13.320 or what happens in terms of blue or red as 0:05:13.360 --> 0:05:15.880 we go into the election, because I think if you 0:05:15.920 --> 0:05:18.520 get blue across the board, that's viewed is much more 0:05:18.600 --> 0:05:24.000 negative in terms of antitrust toward attack. Briefly done your 0:05:24.160 --> 0:05:28.640 thoughts on fourth one stock split a smart move. I 0:05:28.640 --> 0:05:31.919 think other tech giants are going to follow the same 0:05:32.600 --> 0:05:36.359 pattern because I think Cook and the board they want 0:05:36.760 --> 0:05:40.880 more broader ownership of Apple, and by having a quarnuicoard 0:05:40.960 --> 0:05:43.960 cheaper stock in a four for one, it's something that 0:05:44.040 --> 0:05:47.279 I think it was a smart move. I think others 0:05:47.279 --> 0:05:50.200 are gonna follow and it just shows right now they 0:05:50.200 --> 0:05:53.520 are in it just a massive position of strength and 0:05:53.560 --> 0:05:55.960 to be in a position to do a fourth one 0:05:56.000 --> 0:05:58.839 stock split with a stock in all time high in 0:05:58.880 --> 0:06:01.400 the middle of a pandemic. Yeah, I mean, it's pretty 0:06:01.400 --> 0:06:05.560 phenomenal listeners. Don Ives, Equity analyst at Wedbush Security, is 0:06:05.560 --> 0:06:07.600 always such a pleasure to speak with you, and boy, 0:06:07.720 --> 0:06:10.239 was there a lot to speak with Don about today, Paul. 0:06:10.279 --> 0:06:13.120 I mean, we were to a certain extent anticipating this, 0:06:13.240 --> 0:06:15.680 but I think in the era that's in it, I'm 0:06:15.680 --> 0:06:19.600 not sure we were even expecting the amount of you know, 0:06:19.680 --> 0:06:22.800 beats and good news and lack of uncertainty and so 0:06:22.839 --> 0:06:24.880 on that we saw from the Big Four. Yeah, it's 0:06:24.880 --> 0:06:27.440 just extraordinary in this environment. Is Dan was mentioning to 0:06:27.440 --> 0:06:29.640 see how well these companies do and how it was 0:06:29.680 --> 0:06:32.599 a big, big pivot for the technology Industrys relates to 0:06:32.640 --> 0:06:38.440 Wall Street, it is time for Bloomberg Opinion. Welcome to 0:06:38.760 --> 0:06:42.000 have a Gary Shilling, president of a Gary Shilling and Company, 0:06:42.000 --> 0:06:44.800 in a Bloomberg Opinion columnists joining us, Gary, your most 0:06:44.839 --> 0:06:47.919 recent comment or your column here. Bonds are sending the 0:06:48.040 --> 0:06:51.240 right signals. Now what do you mean by that, Well, 0:06:51.279 --> 0:06:54.920 bon bons typically leads stocks and that was certainly true 0:06:54.920 --> 0:06:59.440 earlier this year. UH Treasury bond started a rally rache 0:06:59.480 --> 0:07:05.000 decline literally the first trading day, the second of of January, UH, 0:07:05.080 --> 0:07:09.240 anticipating that the Corona crisis, and of course it was 0:07:09.279 --> 0:07:13.640 barely known, but it wasn't until seven weeks later, on 0:07:14.160 --> 0:07:17.880 February nine, the stocks peaked out. I think we've got 0:07:17.880 --> 0:07:20.920 the same pattern now. In the last month we've seen 0:07:21.080 --> 0:07:25.840 a again a significant rally in treasuries, and I rather 0:07:25.920 --> 0:07:30.600 suspect that it is leading a sell off in stocks 0:07:30.640 --> 0:07:34.920 because we are getting the second wave of the virus um. 0:07:34.920 --> 0:07:37.560 Maybe we'll get a vaccine, but that's hard to know. 0:07:37.680 --> 0:07:42.760 When restarting the economy is difficult. Washington is struggling over 0:07:43.520 --> 0:07:46.800 the next fiscal stimulus bill. So I think there are 0:07:46.720 --> 0:07:49.000 a lot of reasons to suggest that the economy is 0:07:49.000 --> 0:07:52.720 going into a second down leg and that stocks will 0:07:52.760 --> 0:07:57.280 be in fact reflecting that. How will it manifest in 0:07:57.320 --> 0:08:01.520 the data? I mean, we're already seeing GDP both you know, down, 0:08:01.880 --> 0:08:06.600 no growth at all, down by contraction. I mean, are 0:08:06.600 --> 0:08:09.480 we going to see more quarters like that? Gary, Yeah, Well, 0:08:09.560 --> 0:08:12.560 we won't see more quarters like that. We'll be at 0:08:12.640 --> 0:08:15.240 zero the economy. I mean, you know, this is a 0:08:15.480 --> 0:08:18.400 if you annualize this, this is something like a annual 0:08:18.480 --> 0:08:23.000 rate uh, that will work for very long. But I 0:08:23.040 --> 0:08:26.360 do think that rather than the v recovery that many 0:08:26.400 --> 0:08:28.480 people thought, and you don't hear much talk about the 0:08:28.560 --> 0:08:32.079 V anymore. UM. I think it's more an l a 0:08:32.120 --> 0:08:35.400 big decline initially and then a downwards sloping lower leg 0:08:36.040 --> 0:08:39.760 which will extend into next year. So when we start 0:08:39.840 --> 0:08:43.559 to see a concrete evidence on the third quarter, UM, 0:08:43.640 --> 0:08:46.160 I think that's when people are gonna be forced to say, hey, 0:08:46.160 --> 0:08:49.680 wait a minute, this is an extended recession. And that's 0:08:49.679 --> 0:08:53.440 what I think stocks would probably sell off and and 0:08:53.520 --> 0:08:58.520 follow bonds which have already rallied prices up, rate interest 0:08:58.640 --> 0:09:04.359 rates down. So Gary, we're a waiting word from White House, uh, 0:09:04.440 --> 0:09:07.720 Chief of Staff Mark Meadows and just moments about potentially 0:09:08.200 --> 0:09:13.120 some progress that may be mean on the um stimulus spill, 0:09:13.120 --> 0:09:16.959 How important is that? Uh? I don't think it is 0:09:17.120 --> 0:09:21.600 it it's it's it's best is stabilizing the situation. I 0:09:21.640 --> 0:09:25.080 don't think it's really reviving. If you look at the 0:09:25.120 --> 0:09:28.120 second quarter numbers, you had a huge jump in the 0:09:28.240 --> 0:09:31.800 saving rate I have, the personal saving rate I think 0:09:31.840 --> 0:09:35.680 was in other words, people have this money, but they're 0:09:35.679 --> 0:09:38.120 not they're not spending it, and a lot of people 0:09:38.160 --> 0:09:41.920 are scared to go out, so putting money in their 0:09:41.960 --> 0:09:45.720 pockets and spending and stimulating the economy, creating jobs and 0:09:45.760 --> 0:09:51.520 so on are really two different issues. Gary, what do 0:09:51.559 --> 0:09:55.480 we need to hear from the administration and basically from Congress. 0:09:55.559 --> 0:09:57.920 We're awaiting Mark Meadows come out and make some kind 0:09:57.960 --> 0:10:00.520 of commentary. We don't know what it will be. Maybe 0:10:00.520 --> 0:10:02.400 it will be some progress on on what they're trying 0:10:02.400 --> 0:10:04.560 to talk about. But apparently the Senate went home and 0:10:04.600 --> 0:10:07.079 we didn't get an agreement on the next round of stimulus. 0:10:07.080 --> 0:10:12.000 What do we need, Well, you probably need at least 0:10:12.160 --> 0:10:15.440 enough to continue in some some of what was going 0:10:15.480 --> 0:10:18.079 on now. There's a big hang up of course in 0:10:18.200 --> 0:10:22.360 the unemployment insurance because the federal program on top of 0:10:22.360 --> 0:10:26.400 the state programs, of the six dollars federal program with 0:10:26.520 --> 0:10:29.679 the state programs, you know, there are many many people. 0:10:29.720 --> 0:10:32.359 I think roughly half of the half of the workforce 0:10:32.679 --> 0:10:36.040 was making more staying home than working, and that the 0:10:36.120 --> 0:10:40.320 Republicans are saying no way to that. So whatever whatever 0:10:40.440 --> 0:10:43.000 comes out of this, I think it's gonna be less 0:10:43.320 --> 0:10:48.320 generous turn it was before. So Gary, I mean, give 0:10:48.320 --> 0:10:54.600 it a sense that this may be longer for lower Um, 0:10:54.640 --> 0:10:56.599 what do you think the Fed is doing a We 0:10:56.679 --> 0:10:59.880 heard from the FED Chairman pal Or earlier this week, 0:11:00.120 --> 0:11:02.960 seems like the FETE is there to support and to 0:11:03.080 --> 0:11:07.320 do quote whatever is needed. Is that enough? Well, they've 0:11:07.360 --> 0:11:09.959 done pretty much everything you can do. They brought everything 0:11:09.960 --> 0:11:14.520 in sight. They've even brought fallen angels, h bonds that 0:11:14.559 --> 0:11:18.640 are now rado junk that previously we're we're investment grade 0:11:18.720 --> 0:11:22.280 before the before the crisis, and you know, buying corporates 0:11:22.320 --> 0:11:25.959 are supporting statan local governments. They've got two hundred billion 0:11:25.960 --> 0:11:28.679 dollar line of the treasury to cover their losses. The 0:11:28.800 --> 0:11:33.560 FETE is already deep into fisical policy and polin effect 0:11:33.640 --> 0:11:37.560 of saying that, he's really saying, uh, the next step 0:11:37.640 --> 0:11:40.920 has to be in terms of fiscal policy. Now, whether 0:11:40.960 --> 0:11:42.760 fiscal policy is going to work as they say is 0:11:42.760 --> 0:11:46.120 another issue. But you know, it's it's started as saying, hey, 0:11:46.160 --> 0:11:48.520 we've done everything we can. Somebody else has got to 0:11:48.559 --> 0:11:50.880 carry the ball from here on. Gary, when you talk 0:11:50.920 --> 0:11:52.720 to all the people that you talk to, your clients 0:11:52.720 --> 0:11:55.840 and everybody who calls you, well, what are they saying 0:11:55.840 --> 0:11:58.960 about the election? Are they sort of anticipating at this 0:11:59.000 --> 0:12:02.680 point that there won't to be a second term from 0:12:02.840 --> 0:12:05.600 the president's or is that not at all a done 0:12:05.640 --> 0:12:08.600 deal yet. And for those that are talking about a 0:12:08.640 --> 0:12:13.280 Biden presidency, you know, what do they think that will bring? Well? Uh, 0:12:13.440 --> 0:12:15.680 I think people are very much up in the air 0:12:15.760 --> 0:12:19.760 on this. That nobody wants to underestimate Trump because you know, 0:12:19.760 --> 0:12:22.400 it looked like Hillary was going to win hands down 0:12:22.440 --> 0:12:25.120 in twenty sixteen and Loan the whole It was quite 0:12:25.200 --> 0:12:28.199 the other way. Uh. The reality is that it's very 0:12:28.200 --> 0:12:31.800 difficult for any income at president to get re elected 0:12:32.400 --> 0:12:37.880 in a economic recession. And of course, uh, Trump has 0:12:37.920 --> 0:12:42.160 been trying to get the economy restarted. Now he's realized 0:12:42.160 --> 0:12:45.360 that isn't going to happen by the election day. So 0:12:45.520 --> 0:12:49.040 now he's saying he's delay the election. I mean, he 0:12:49.160 --> 0:12:53.920 realizes he's in a hotspot as far as Biden is concerned. Um, 0:12:53.960 --> 0:12:55.920 you know, I don't I don't think there's I don't 0:12:55.920 --> 0:12:58.480 think there's a lawful lot that people are looking for 0:12:59.000 --> 0:13:02.160 in Biden. He so he's tough on China, or he 0:13:02.200 --> 0:13:05.880 says he is like like crump Um, he's for more 0:13:06.520 --> 0:13:11.880 um more income retribution. Uh, short of the classic Democratic program. 0:13:11.960 --> 0:13:13.920 But there isn't an awful lot of new initiative. And 0:13:14.040 --> 0:13:16.880 I think the election is more, um, it's more a 0:13:16.880 --> 0:13:21.440 referendum on Trump than it is a vote for Biden. Garret. 0:13:21.559 --> 0:13:23.720 What happens if the you know, again, in the election. 0:13:23.760 --> 0:13:26.720 We're focusing obviously, as we should, on the presidential election, 0:13:26.760 --> 0:13:28.720 but also the a lot of big issues as it 0:13:28.720 --> 0:13:31.800 relates to the Senate and potential for the Senate to 0:13:31.920 --> 0:13:35.760 go from Republican control to Democratic control. So you might 0:13:35.840 --> 0:13:39.280 have a scenario with uh, you know, a democratic sweep 0:13:39.280 --> 0:13:42.360 of both Houses of Congress and the White House. Yeah, 0:13:42.559 --> 0:13:45.280 is that a concern? Is that possibility? And of course 0:13:45.320 --> 0:13:49.960 the Democrats already control the House and and the Republican 0:13:50.760 --> 0:13:53.599 majority in the Senate is pretty thin. Um. If you 0:13:53.720 --> 0:13:57.520 had that, UM, I think the initial reaction of of 0:13:57.840 --> 0:14:01.440 the shock market would be a big shell off, because 0:14:01.480 --> 0:14:04.920 it would be assumed that the Democrats would make good 0:14:04.960 --> 0:14:09.600 on their pledge to redistribute income. They would increase taxes 0:14:09.600 --> 0:14:13.760 on higher income people, they would resame the corporate tax cuts, UM. 0:14:13.960 --> 0:14:18.880 They would an attempt to redistribute income to basically their 0:14:18.960 --> 0:14:23.120 constituents lower income people, UM, minority groups and so on 0:14:23.160 --> 0:14:25.400 and so forth. And I don't think that that would 0:14:25.400 --> 0:14:29.280 be at all well received on Wall streets. So, um, 0:14:29.320 --> 0:14:32.240 if you have that, I'd say, you know, look out below. 0:14:33.120 --> 0:14:35.400 I have to ask about bees in a moment. Gary 0:14:35.920 --> 0:14:37.840 always have to ask you about what kind of season 0:14:37.920 --> 0:14:40.840 it is for those creatures. But I do also want 0:14:40.880 --> 0:14:44.240 to ask you, do we need to be hard on China? 0:14:44.640 --> 0:14:47.520 I mean there's so much talk it's become sort of 0:14:47.960 --> 0:14:50.720 almost during gery now talk about a new Cold War, 0:14:50.840 --> 0:14:52.800 But is that really what we're about to be in 0:14:52.840 --> 0:14:57.320 the middle of. Well, we're in a it isn't a 0:14:57.320 --> 0:15:01.200 Cold war in essentially is military, but as certainly as 0:15:01.200 --> 0:15:04.560 the Cold War in terms of the economy. The Chinese 0:15:04.920 --> 0:15:07.600 want to be the top dogs in the world. Um. 0:15:07.840 --> 0:15:11.760 And they really feel that that's their destiny. Um that 0:15:11.880 --> 0:15:17.400 they they had that traditionally nineteenth century, Uh, the the 0:15:17.520 --> 0:15:21.320 Europeans basically took over China partitioned it. Uh. They call 0:15:21.400 --> 0:15:23.760 that the century of Shame. They think they want they 0:15:23.840 --> 0:15:25.960 want to get back on top. This is the way 0:15:26.000 --> 0:15:29.360 they see it. And what's interesting the way they the 0:15:29.400 --> 0:15:31.840 way they need to do that. Yeah, They've got all 0:15:31.880 --> 0:15:35.000 the military exploit and that's how China. See. They've got 0:15:35.000 --> 0:15:37.360 the Belton Road Program, which is spreading a lot of 0:15:37.360 --> 0:15:40.360 money around although a lot of it is is at losses. 0:15:41.120 --> 0:15:43.080 But I think the primary battle is going to be 0:15:43.120 --> 0:15:47.000 over technology because China, as a result of the one 0:15:47.400 --> 0:15:51.960 one child per couple UH birth policy, is going to 0:15:52.040 --> 0:15:54.960 have a declining labor force for the next thirty years, 0:15:55.920 --> 0:15:58.920 regardless of what happens now. Those people that aren't going 0:15:58.920 --> 0:16:02.760 to go into labor force already not born. So they 0:16:02.840 --> 0:16:07.520 need productivity to have economic growth. And how do you 0:16:07.560 --> 0:16:10.640 get that. You get that true technology. Now. They've already, 0:16:10.640 --> 0:16:14.520 of course been invading the West, stealing technology, demanding tech 0:16:14.600 --> 0:16:18.119 transfer and so on, and now they're trying to develop technology. 0:16:18.160 --> 0:16:20.920 They're way behind the West, but they're doing their best 0:16:20.920 --> 0:16:23.560 to catch up. And I think that's where the battleground 0:16:23.560 --> 0:16:25.320 it's going to be. It isn't going to be a 0:16:25.480 --> 0:16:29.040 military It isn't gonna be rattling arms and and you know, 0:16:29.120 --> 0:16:35.400 praise of tanks and guns and red square the technology. Yeah, Gary, 0:16:35.440 --> 0:16:37.760 I do have to ask you about the bees because obviously, 0:16:37.800 --> 0:16:41.960 you know, humans are facing coronavirus, and you are a 0:16:41.960 --> 0:16:45.320 beekeeper and you make honey every single year from from 0:16:45.320 --> 0:16:47.640 your bees. How are you managing in this time of 0:16:47.640 --> 0:16:49.360 coronavirus to take care of the bees and what kind 0:16:49.360 --> 0:16:54.280 of a season is it for bees? Well, a good question, monny. Um. 0:16:54.320 --> 0:16:57.080 It started off very very mixed because it was a 0:16:57.160 --> 0:17:00.200 very warm back in March, and the bees got going 0:17:00.920 --> 0:17:03.720 and they muliplied and then they swarmed. And that's what 0:17:03.800 --> 0:17:05.960 happens when there are too many bees, and the old 0:17:06.040 --> 0:17:09.120 queen the old queen, and half the bees take off 0:17:09.160 --> 0:17:11.480 and they make a new queen. But even if he 0:17:11.560 --> 0:17:14.520 catched the swarm, and I caught six swarms this year, 0:17:14.520 --> 0:17:17.200 I've got about a hundred colonies and at all time 0:17:17.320 --> 0:17:19.520 high record, and you don't get any honey out of 0:17:19.600 --> 0:17:22.800 either the old colony or the the new one. Now, 0:17:22.840 --> 0:17:25.320 the one thing about this is that there's always a 0:17:25.400 --> 0:17:27.359 snap back, and that's what it is. And as a 0:17:27.359 --> 0:17:30.520 matter of fact, in two weeks we're going to be 0:17:30.640 --> 0:17:33.080 taking the honey off. And it looks like we're gonna 0:17:33.119 --> 0:17:35.520 have a we're gonna have a great harvest. I was, 0:17:35.640 --> 0:17:39.280 I was amazed, but you know, this is agriculture, and 0:17:39.280 --> 0:17:41.760 and you never know what's going to happen, the vicissitudes 0:17:41.800 --> 0:17:44.480 of nature, and sometimes you're lucky and sometimes you aren't. 0:17:44.640 --> 0:17:47.480 But it looks like we're looks like we're lucky this year. 0:17:47.960 --> 0:17:50.760 That's phenomenal. And I have to tell all of our listeners. Gary, 0:17:51.000 --> 0:17:53.240 you know, makes these wonderful jars of honey, but he 0:17:53.280 --> 0:17:56.720 also comes up with the fantastic names for them every year. Gary, 0:17:56.760 --> 0:17:58.720 I just can't remember what the one last year was, 0:17:58.760 --> 0:18:00.680 but I'm sure this year will have to be something 0:18:00.720 --> 0:18:04.080 the pandemic related. Yeah, I think it was. I think 0:18:04.080 --> 0:18:09.640 it was regardless of the party. Our honey is de electable, yes, 0:18:09.680 --> 0:18:12.760 because it was a lot to talk about impeachment last year. Anywhere. 0:18:13.240 --> 0:18:16.240 Any of our listeners haven't got any great slogans. We 0:18:16.240 --> 0:18:19.480 always like to have a topical, usually usually with a 0:18:19.480 --> 0:18:24.240 political economic twist. But the issue is that we you know, 0:18:24.280 --> 0:18:26.520 we send out the honey to you and all our 0:18:26.560 --> 0:18:30.960 friends and clients right before Christmas, and we need a 0:18:32.080 --> 0:18:35.560 we need a label that's going to be current into 0:18:35.560 --> 0:18:38.200 the next year, and those it can't be ephemeral with 0:18:38.280 --> 0:18:41.720 appoint at by the time January one, rules were all, well, 0:18:41.720 --> 0:18:45.440 I think you're fairly secure with things. I think you're 0:18:45.480 --> 0:18:50.000 fairly secure with things like pandemic, vaccine, faucci. All of 0:18:50.040 --> 0:18:53.359 these things might provide some fodder for the title, what 0:18:53.359 --> 0:18:57.280 do you think, Paul, Yes, just the suggestion of it, 0:18:57.320 --> 0:18:59.119 because because I don't think that issue is going to 0:18:59.200 --> 0:19:01.960 go away, and maybe we can get some variation that 0:19:02.720 --> 0:19:07.399 our you know, our our bees, our corona, our corviate 0:19:07.520 --> 0:19:10.320 nineteen free. You may not want to go that direct, 0:19:10.560 --> 0:19:13.840 but they get plenty of diseases and validies, but they 0:19:13.880 --> 0:19:19.600 don't get the carved nineteen. That's great. Gary Shilling, thanks 0:19:19.600 --> 0:19:21.920 so much for joining us. Gary Shilling, president of a 0:19:22.040 --> 0:19:27.920 Gary Shilling in Company and a Bloomberg opinion columnists. You know, 0:19:28.000 --> 0:19:29.800 as we take a look at the economy, we really 0:19:29.960 --> 0:19:32.119 start to really have to focus on the consumer with 0:19:32.160 --> 0:19:35.479 all those terrible unemployment numbers and the impact on some 0:19:35.640 --> 0:19:38.400 personal spending. Personal income. We had some numbers out today. 0:19:38.480 --> 0:19:41.119 Let's dig into those. We can do that with Read Pickart, 0:19:41.560 --> 0:19:45.639 she covers US economy for Bloomberg News. Read thanks so 0:19:45.720 --> 0:19:48.800 much for joining us here. Personal income. What's the data 0:19:48.800 --> 0:19:52.639 showing us? Yeah, thanks for having me so today we 0:19:52.760 --> 0:19:55.440 got the income and spending data for June, and it 0:19:55.480 --> 0:19:58.600 showed us two mean things. It showed us that, you know, 0:19:58.800 --> 0:20:03.040 spending continued its rebound in June um but remains below 0:20:03.080 --> 0:20:05.840 it's pre pandemic level. UM, and two, it showed us 0:20:05.880 --> 0:20:10.080 that incomes declined for another month as the initial boost 0:20:10.200 --> 0:20:14.600 from the one time stimulus checks those checks UM that 0:20:14.640 --> 0:20:19.320 were largely distributed in April have continued to wind down UM. 0:20:19.359 --> 0:20:21.560 But a very interesting part of it, at least that 0:20:21.600 --> 0:20:23.760 I thought, was, at the same time, we saw that 0:20:23.840 --> 0:20:28.720 payments for unemployment insurance from the previous month, especially pay 0:20:28.760 --> 0:20:33.040 out for that weekly six and unemployment benefits that expire 0:20:33.080 --> 0:20:37.920 today UM, you know, increase. So you know, we're seeing 0:20:38.000 --> 0:20:42.560 that households are more reliant on those unemployment benefits as 0:20:42.600 --> 0:20:45.760 a portion of their income than they have ever before. 0:20:47.000 --> 0:20:49.840 Read what does it mean for you know, consumer companies 0:20:49.880 --> 0:20:53.520 going forwards had this amazing quarter a couple quarters for 0:20:53.800 --> 0:20:56.399 profiting gamble for example. I mean, will that be in 0:20:56.440 --> 0:21:00.080 jeopardy of people literally can't buy what they need to 0:21:00.119 --> 0:21:02.959 eat and clean themselves and and do all of the 0:21:03.280 --> 0:21:08.240 you know, human functions necessary. So the six hundred dollar, 0:21:08.359 --> 0:21:12.200 the extra six hundred dollars in weekly unemployment benefits UM 0:21:12.359 --> 0:21:15.040 has really been a crucial lifeline for the economy in 0:21:15.040 --> 0:21:20.120 this pandemic because it is broadly buoyed incomes UM and spending. 0:21:20.240 --> 0:21:23.560 In recent months, even as the economy um, you know, 0:21:23.640 --> 0:21:27.720 has has has spaced this pandemic um and and it's 0:21:27.920 --> 0:21:31.160 it's hard to you know, see exactly what the impact 0:21:31.480 --> 0:21:34.480 will be. But when you have these six hundred dollar payments, 0:21:34.600 --> 0:21:38.760 you know, keeping these incomes up and allowing people to 0:21:38.800 --> 0:21:42.320 pay their bills, allowing them to you know, keep spending 0:21:42.800 --> 0:21:46.679 at those businesses. UM, it is concerning in terms of 0:21:46.720 --> 0:21:50.800 what this means for the economic recovery and the coming months. Um. 0:21:51.200 --> 0:21:54.080 You know, especially at a time like now when UM, 0:21:54.160 --> 0:21:56.200 some of the data that we're seeing is showing that 0:21:56.200 --> 0:21:59.640 that economic recovery is is stalling and and has been 0:22:00.080 --> 0:22:02.720 you know for the for the month of July. So 0:22:02.800 --> 0:22:05.920 read us a sense of kind of spending versus saving 0:22:06.160 --> 0:22:08.560 over the last four or five months. Again, there's been 0:22:08.560 --> 0:22:11.640 a crazy time here. The government's responded with that six 0:22:11.680 --> 0:22:15.359 hundred dollars per month. What's the data showing us about 0:22:15.400 --> 0:22:19.000 what people are spending versus what they're saving? M hm. 0:22:19.359 --> 0:22:23.520 So the satings rate searched to a record in in April, 0:22:23.600 --> 0:22:27.200 and that was mainly because of those stimulus checks, UM. 0:22:27.240 --> 0:22:30.080 And we've seen the statings rate come down each month since, 0:22:30.119 --> 0:22:33.760 but still remains quite high. So so the hope is 0:22:33.800 --> 0:22:37.119 that you know, the stimulus checks plus those six hundred 0:22:37.160 --> 0:22:40.000 dollars an extra weekly benefits that people are patting their 0:22:40.000 --> 0:22:43.440 bank accounts UM. You know, as as we're moving into 0:22:43.440 --> 0:22:46.679 this period of uncertainty in terms of you know, when 0:22:46.680 --> 0:22:49.440 people will you know when and if people will get 0:22:49.480 --> 0:22:53.320 an extra federal supplement to their unemployment insurance UM. But 0:22:53.400 --> 0:22:56.800 as far as spending, I mean, we've seen spending you know, 0:22:56.920 --> 0:22:59.840 rebound in a lot of ways. You know, retail sales, 0:22:59.840 --> 0:23:03.960 for instance, UM are almost almost in line with their 0:23:03.960 --> 0:23:07.120 pre pandemic levels. UM. But as far as the actual 0:23:07.160 --> 0:23:10.600 amount of consumer spending, we're still below what we were 0:23:10.640 --> 0:23:14.080 at before the pandemic. And it will be interesting to 0:23:14.160 --> 0:23:17.440