WEBVTT - Single Best Idea with Tom Keene: Jim Bianco & Wendy Schiller

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio news, single best Idea. What

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<v Speaker 1>a remarkable day. We really spent a lot of time

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<v Speaker 1>today respecting our founder Matthew Winkler and the strong support

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<v Speaker 1>of our editor in chief John Micklethwaite, and not doing

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<v Speaker 1>rumor or speculation. There were some blistering rumors and speculations

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<v Speaker 1>this morning about the Republicans, about the Democrats, and we

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<v Speaker 1>just we're going to do the news flow. Shout out

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<v Speaker 1>to Michael Barr, who does a great job every day.

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<v Speaker 1>I wish all of you could see how he seriously,

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<v Speaker 1>how he pieces together the different news commentary and then

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<v Speaker 1>changes it over the course of a morning. It's truly

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<v Speaker 1>an act of God what Michael Barr does, and more

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<v Speaker 1>so into the great unknown of this Thursday, the former

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<v Speaker 1>president will speak tonight. Joe Matthew and Kayleen Lines will

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<v Speaker 1>have all that coverage. David Gura of the Big Tag.

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<v Speaker 1>We'll be speaking with the Governor of New York State

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<v Speaker 1>of Buffalo, Kathy Hokeel. Lots to talk about there, and

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<v Speaker 1>of course a real mystery about our president who at

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<v Speaker 1>eighty one as COVID. That can never be good to

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<v Speaker 1>have that really difficult illness at that age of eighty one.

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<v Speaker 1>We tried to stay on economics, finance and investment today

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<v Speaker 1>and did that with Jim Bianco, who has an outlier call.

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<v Speaker 1>He says, flat out they're wrong. They don't need to cut.

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<v Speaker 1>The new run rate of interest rates wrapped around this

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<v Speaker 1>concept from John Williams, our start is at a higher level.

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<v Speaker 1>Jim Bianco, don't cut in September.

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<v Speaker 2>America is ready for it because the economy can handle it,

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<v Speaker 2>the financial markets can handle it. It's the economic community

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<v Speaker 2>that's not ready for it right now. If you look

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<v Speaker 2>at the current level of interest rates and you listen

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<v Speaker 2>to FED speak, they talk about it being highly restrictive.

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<v Speaker 2>It might be retarding the economic growth. And again look

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<v Speaker 2>at the stock market. Look at the rally in small

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<v Speaker 2>cap stocks when we started pricing in September in the

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<v Speaker 2>last week or so, and the data is just not there.

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<v Speaker 2>But the economists still cling to this that the neutral

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<v Speaker 2>funds rate, which is what our star is, is two

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<v Speaker 2>and a half percent. And put this in terms, the

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<v Speaker 2>Fed thinks they need to cut ten times to get

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<v Speaker 2>to neutral. That's why they want to get started. They

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<v Speaker 2>got a lot of work to do. The market is

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<v Speaker 2>probably telling them, no, you probably need only about four

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<v Speaker 2>or five cuts to get to neutral. There really isn't

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<v Speaker 2>any hurry. But if you're going to give me stimulatives

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<v Speaker 2>interest rates by lowering them, then I'm going to pile

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<v Speaker 2>into small cap stocks. And that's what we've seen in

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<v Speaker 2>the last week.

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<v Speaker 1>Jim Bianco Bianco Research, Chicago, And to remind you, he

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<v Speaker 1>was absolutely brilliant eighteen months ago, two years ago by saying, yeah,

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<v Speaker 1>there's disinflation, but at some point we're going to pause.

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<v Speaker 1>And boy was he right about that. Now maybe we've

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<v Speaker 1>got a new disinflationary ten trend. Bruce Casman at JP Morgan,

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<v Speaker 1>running all of their economics, puts out a very forceful

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<v Speaker 1>note today to look for global disinflation in the second

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<v Speaker 1>half of twenty twenty four and that relative and absolute

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<v Speaker 1>dynamic of price increase between the United States and other

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<v Speaker 1>nations and particularly em and Asia will really be quite important. Okay,

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<v Speaker 1>so he did some politics. You get Wendy Schiller to

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<v Speaker 1>show up. She's a pinata of a lot of people

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<v Speaker 1>because she's very forceful about our history that maybe we

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<v Speaker 1>don't want to hear. And she's going back to the

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<v Speaker 1>Democratic Donnybrook, which I take back, and this is the

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<v Speaker 1>great work of Nevins. Allan Nevins, the historian on Grover Cleveland,

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<v Speaker 1>I call him Grover Cleveland Alexander now Grover Cleveland, who

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<v Speaker 1>was a two term president with a gap in between,

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<v Speaker 1>much like what mister Trump is aspiring to do, and

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<v Speaker 1>basically the idea that credit conventions, whether planned or perhaps unplanned,

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<v Speaker 1>can be flat out nuts.

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<v Speaker 3>If you ever imagine a political nightmare, an open Democratic

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<v Speaker 3>convention in twenty twenty four would be that, because it

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<v Speaker 3>will be it will expose the fissures and fractures within

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<v Speaker 3>the Democratic Party between the very progressive left, the progressive

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<v Speaker 3>the middle, and you know, they won't be able to agree.

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<v Speaker 3>They're going to want their person to challenge Trump and

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<v Speaker 3>try and make arguments about that all the way from

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<v Speaker 3>Bernie Sanders Lives Warren all the way down to you know,

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<v Speaker 3>dark horses like Gina Romundo, Secretary of Commerce, you know,

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<v Speaker 3>and Greshen Whiber might be dragged back into it. Joshua

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<v Speaker 3>Bruro of Pennsylvania. It will look like the Democrats can't

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<v Speaker 3>decide and don't know what they're doing, and will only

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<v Speaker 3>feed into whatever nostalgia Trump voters have for Trump, but

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<v Speaker 3>also independent voters who want a stable system. And this

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<v Speaker 3>is the big irony of twenty twenty four. Now the

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<v Speaker 3>Trump and Republicans appear right now to be more stable,

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<v Speaker 3>less chaotic than Biden and the Democrats.

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<v Speaker 1>That is the single best discussion of one potential path

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<v Speaker 1>forward I have heard. She is a Jewel, Wendy Schiller

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<v Speaker 1>of Brown University. We're out on YouTube again. Subscribe, you know,

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<v Speaker 1>I looked down YouTube videos and they say subscribe and

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<v Speaker 1>click the bell or whatever like I never understood it.

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<v Speaker 1>Subscribe to Bloomberg Podcasts out on YouTube. It's the heart

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