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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am

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Speaker 1: or watch us live on YouTube.

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Speaker 2: All right, let's switch our attention back to the geopolitics,

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Speaker 2: the story of the really the last forty eight seventy

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Speaker 2: two hours of what's happening in the Middle East. Aaron

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Speaker 2: David Miller joins us. He's a senior fellow with the

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Speaker 2: Carnegian Downmond for International Piece, joining us from Washington, DC

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Speaker 2: via zoom. Aaron, thanks so much for taking the time here. Again,

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Speaker 2: it's front and center here for not just geo politics,

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Speaker 2: but also for financial markets. And that's why we hear

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Speaker 2: Bloomberger paying close attention to what's happening in the Middle East.

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Speaker 3: Here.

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Speaker 2: We had the Iranian attack yesterday. Love for you to

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Speaker 2: put that attack into context of what is happening in

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Speaker 2: the Middle overall. What's next for Israel?

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Speaker 4: Yeah, you know you got thanks for having me here.

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Speaker 4: You've got three wars of attrition going on. One greatest

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Speaker 4: role in the moss is one's ball on Israel and Iran,

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Speaker 4: which is the premiere event here and over the last

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Speaker 4: several weeks. As a consequence of Israeli actions in Isabella,

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Speaker 4: the balance of power in these three wars of attrition,

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Speaker 4: it's fundamentally been altered.

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Speaker 5: His Boula is a ver shadow of itself.

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Speaker 4: Israeli's estimate, they've they've eliminated half of its high trajectory

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Speaker 4: weapons inventory, and those weapons were designed by Iran in

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Speaker 4: order to provide a contingency in the event Israel or

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Speaker 4: the US attacked around the nuclear sides. Well that's more

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Speaker 4: or less degraded. So the Iranians needed to find a

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Speaker 4: way to respond both to the Israeli assassination of Ismaila

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Speaker 4: ne on July thirty one, leader of Amas. It was

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Speaker 4: really didn't think responsibility for that yet, and of course

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Speaker 4: the most recent hit on Hassan Azula, the head of

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Speaker 4: as a publish So they looked for a response that

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Speaker 4: did more than what they did mid April, you recall,

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Speaker 4: and they landlu three hundred high trajectory weapons of Israel.

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Speaker 4: Most didn't even impact Israeli airspace, but not to trigger

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Speaker 4: a major Israeli escalation. I don't think they found the

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Speaker 4: sweet spot one hundred and eighty Creuse missiles. Even though

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Speaker 4: Iron Dome David slang Arrow intercepted a lot of them.

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Speaker 4: US Navy two destroyers took down twelve. The Jordanians participated

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Speaker 4: too many got through and two Israelis were lightly wounded,

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Speaker 4: and ironically, a Palestinian man from Gaza who was in

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Speaker 4: Jericho was killed. But even though there were no casualties

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Speaker 4: of a consequential nature other than the unfortunate death of

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Speaker 4: the Palestinian man, the Israelis now have to respond in

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Speaker 4: and at least portraying their thinking to avoid creating a

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Speaker 4: new normal.

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Speaker 5: A second time.

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Speaker 4: The running substruct Israeli territory, and they're going to respond.

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Speaker 4: Biden's going to talk to Ntayahu today before the Rosa

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Speaker 4: Chana holidays. But I think these really responses are going

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Speaker 4: to be heavy, multiple targets, oil export facilities, running revolutionary Guard,

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Speaker 4: core command and control, conventional military sites.

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Speaker 5: The nuclear piece fascinating, yep.

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Speaker 4: I'm sure the argument's being made that now is the

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Speaker 4: time for any number of reasons. I'm thinking, though, coordinating

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Speaker 4: with the Americans, I don't think the Israelis are going

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Speaker 4: to go after the enrichment facilities, very deep underground.

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Speaker 5: But we'll see.

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Speaker 3: Well, you mentioned that you have the Richmond facilities under mountains.

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Speaker 3: In fact, is that even targetable at this point with

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Speaker 3: just with airstrikes right.

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Speaker 4: Where you need bunker busters, you need shock and awe,

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Speaker 4: which only the US military can actually need deliver. You

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Speaker 4: need a degree of saturation and redundancy. Despite israel skill

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Speaker 4: and operational capacity, he's really stone half. Nonetheless, I mean,

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Speaker 4: I still wouldn't rule it out as part of the

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Speaker 4: target set.

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Speaker 5: And then the question is.

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Speaker 4: Of course how and in what fashion will will the

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Speaker 4: Runnings respond? I mean, without much imagination, you could, you know,

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Speaker 4: you could envision a hopskip and a jump to something

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Speaker 4: the Middle East has never experienced before, which is a

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Speaker 4: multi front walk, not with employment of thousands of ground forces,

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Speaker 4: but UAVs AI, cyber cruise missiles, ballistic missiles, one way

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Speaker 4: attack groans where Iran if it said badly enough going

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Speaker 4: after Saudi oil bruising facilities, which they did as you

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Speaker 4: were calling twenty nineteen.

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Speaker 5: So we're closer.

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Speaker 4: I'm still not convinced we're going to get there. Iron's

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Speaker 4: weak and it understands the symmetry of power which I.

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Speaker 2: Fa So, Aaron, I look for you to kind of

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Speaker 2: give us maybe your assessment of where President Prime Minister

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Speaker 2: Netanyahu is in terms of his thinking these days. I

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Speaker 2: guess we started this war almost a year ago with

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Speaker 2: the attacks on Israel, and I guess at that point

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Speaker 2: Yah said, Hey, our goal is to incapacitate Hamas and

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Speaker 2: get our hostages back. That scope seems to have broadened

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Speaker 2: dramatically now to include, you know, maybe some war aims

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Speaker 2: in Lebanon, to deal with Iran more broadly. Where is

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Speaker 2: he now?

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Speaker 5: Look, I think you know, don't never write this guy off.

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Speaker 4: I mean, it was unimaginable that a prime Minister or

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Speaker 4: presider or the single body of stayed for Jews since

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Speaker 4: the liberation of the Nazi death camps, the worst intelligence

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Speaker 4: failure in the history of State of Israel, antrial for

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Speaker 4: brid re fraud and breach of trust in.

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Speaker 5: A Jerusalem dis re court now four years running, would.

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Speaker 4: Have gotten himself into a situation where his credibility and

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Speaker 4: even some of the numbers.

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Speaker 5: In the latest Israeli polls have gone.

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Speaker 4: Up, not surprisingly because of the last several weeks and

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Speaker 4: what I think we're on the cuspbol with respect to

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Speaker 4: an Israeli strike against Iran. So he still does if

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Speaker 4: elected were held today, he still doesn't have enough seats

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Speaker 4: to put together a coalition.

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Speaker 5: But there's no effective opposition.

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Speaker 4: And the fact is the kanesstants out of resist until

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Speaker 4: the end of October. Benjamin Nataniell will will make an

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Speaker 4: assessment on November five with the next President of the

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Speaker 4: United States is and he'll adjust his tactics. Importingly, I

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Speaker 4: don't see new elections in Israel at the earliest, and

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Speaker 4: the government could go to term twenty twenty six. I

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Speaker 4: don't see new elections in Israel until sometime in twenty

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Speaker 4: twenty five.

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Speaker 3: Well what's the response from the rest of the Mid

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Speaker 3: East to Saudi Arabia et cetera.

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Speaker 4: Well, there's the public and the private response, right, I mean,

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Speaker 4: nobody is going to miss other than Hezbollah. Certainly, among

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Speaker 4: the Sunnis in the region, no one's going to miss

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Speaker 4: Ausun Ocella, certainly, the Saudis won't uh and Sunnis in

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Speaker 4: Syria that have prosecuted a terrible war against Sunni populations

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Speaker 4: isn't going to miss Nuzula either, So and that goes

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Speaker 4: by the way, also for Jakna Sinoir, the pre eminent

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Speaker 4: Palestinian leader who's hiding in a bunker somewhere meters below ground,

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Speaker 4: probably surrounded by hostages the low Raunis. I think the

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Speaker 4: Arab States really understand what they didn't in the way

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Speaker 4: to October seventh, when Israeli military capacities seemed to be

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Speaker 4: not just diluted, but somehow defeated. The last several weeks,

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Speaker 4: the operational effectiveness, the tactical ingenuity of the Israelis has restored.

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Speaker 4: I think their street cred comes to the to the

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Speaker 4: air world. That's particularly true for the Bobrani societies and

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Speaker 4: the Amorates will all have above ground and below ground

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Speaker 4: security and intelligence relationships.

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Speaker 5: With Israel. But again it's the Middle East. Nobody ever

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Speaker 5: lost money.

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Speaker 4: Against the peace and stability, and I think that we

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Speaker 4: have to still be three sober here. Yeah, yes, can

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Speaker 4: the can what the Israelis have done be translated somehow

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Speaker 4: into political arrangements lead to greater prosperity instability.

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Speaker 5: That's the core question, and.

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Speaker 4: You know it's one of the many questions I just

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Speaker 4: don't have an answer to you.

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Speaker 2: All right, Aaron, thank you so much for joining us.

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Speaker 2: We really appreciate getting some of your time to share

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Speaker 2: in your expertise. Aaron David Miller. He's a senior fellow

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Speaker 2: at the Carnegian Down for International Piece, has decades of

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Speaker 2: experience in that part of the world. You appreciate getting

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Speaker 2: some of his time.

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Speaker 6: Alex deeal here alongside Paul Sweeni and John Tucker. This

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Speaker 6: is Bloomberg Intelligence Radio. We are broadcasting to live for

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Speaker 6: Interactive Brokers Studio right here in Midtown Manhattan. So last night,

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Speaker 6: Democratic Governor Tim Watson Republican Senator JD Vans sparred during

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Speaker 6: the CBS News vice presidential debate in New York that

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Speaker 6: featured fireworks over abortion rights, the economy, and foreign policy,

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Speaker 6: in part in an appeal to Midwestern voters.

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Speaker 7: One thing that Joe Biden did is he continued some

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Speaker 7: of the Trump tariffs that protected American manufacturing jobs. It's

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Speaker 7: the one issue where Kamala Harris has run away from

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Speaker 7: Joe Biden's record.

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Speaker 1: Well, Kamala Harris is Day one was Donald Trump's failure

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Speaker 1: on COVID that led to the collapse for our economies.

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Speaker 7: If Kamala Harris has such great plans for how to

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Speaker 7: address middle class problems, then she ought to do them. Now,

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Speaker 7: how is it fair.

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Speaker 1: That you're paying your taxes every year and Donald Trump

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Speaker 1: hasn't paid any federal text in the last fifteen years.

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Speaker 6: Well, joining us now is Henry Natrez, Managing partner and

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Speaker 6: director of Economic Policy at Beta Partners. Henrietta, did we

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Speaker 6: learn anything last night.

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Speaker 8: Well, we learned that maybe both parties candidates have the

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Speaker 8: potential to improve their standing with the American voter. The

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Speaker 8: surprise to me was that flash poles that came out

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Speaker 8: right after the debate showed that viewers considered the two

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Speaker 8: men effectively tied in the race. I thought personally that

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Speaker 8: Vance had exceeded Waltz, but that's not what we saw

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Speaker 8: in the flash polls. And most importantly, amongst unaffiliated voters,

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Speaker 8: not Democrats, not Republicans, but sort of third party voters,

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Speaker 8: the majority of them thought that Waltz in a better job.

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Speaker 8: And you have to think of that as probably some

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Speaker 8: of the last moments of the campaign, you know, the

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Speaker 8: sort of the debate, the last sort of fifteen minutes

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Speaker 8: when they talked about January sixth again. But in general,

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Speaker 8: net net, both candidates standing improved materially with voters. I

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Speaker 8: want to say that jd. Vance went from a negative

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Speaker 8: twenty two percent, a negative thirteen percent rating to a

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Speaker 8: negative two percent rating, and Tim Walls also improved from

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Speaker 8: his plus three favorability rating to something like plus thirty

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Speaker 8: four after last night's debate. So both men did what

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Speaker 8: they wanted to do, introduce themselves to the American public,

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Speaker 8: and the American public like what they saw.

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Speaker 2: Henrietta, can you give us a sense, I'm trying to

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Speaker 2: get a handle on this particular number, how many independent

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Speaker 2: voters are each candidate trying to get at each campaign, Trenting,

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Speaker 2: Do we have a sense of how many they are?

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Speaker 7: Well?

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Speaker 9: The independent voter base is actually a huge chunk of

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Speaker 9: the pie.

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Speaker 8: As America has gotten polarized and voters have, you know,

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Speaker 8: flocked to the far left of the far right within

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Speaker 8: their parties, a big chunk of America now qualifies themselves

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Speaker 8: as independ voters. That's different than undecided. Undecided is now

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Speaker 8: like four percent seven percent of the electorate.

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Speaker 9: Most people have picked a horse and they're moving forward.

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Speaker 8: Unfortunately, most likely the people who are undecided did not

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Speaker 8: even watch last night's debate, So they're going to be

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Speaker 8: getting their internals from what they see on the internet today,

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Speaker 8: and it's probably not going to move the needle too much.

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Speaker 8: If you have to think about the presidential debate not

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Speaker 8: moving the needle a whole lot, you know, a couple

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Speaker 8: points to Kamala Harris, it's very unlikely to mean that

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Speaker 8: the vice presidential debate last night is going to really

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Speaker 8: change things for either ticket.

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Speaker 6: So it's October second, if I'm not mistaken, and typically

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Speaker 6: we talked about in an October surprise when it comes

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Speaker 6: to the election. Is the Iran Israel conflict right now

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Speaker 6: that October surprise?

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Speaker 9: You know, I want to say yes.

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Speaker 8: Obviously, the escalation that we're looking at right now and

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Speaker 8: potential for the Middle East disruption is explosive to the

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Speaker 8: point where we haven't seen it in decades and you know,

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Speaker 8: rapidly escalating and just waiting for Israel's response now. But

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Speaker 8: the you know, the question last night was the first

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Speaker 8: one on the gate about how to respond to Iran.

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Speaker 8: And I think what was interesting is that the electorate

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Speaker 8: as a whole in America doesn't consider this a near

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Speaker 8: term issue or even something that ranks in the top

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Speaker 8: five areas that they care about.

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Speaker 9: It's you know, the economy followed by some.

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Speaker 8: Combination of abortion and immigration and then everything else sort

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Speaker 8: of way underneath that. Foreign policy is just not a

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Speaker 8: forte of American voters.

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Speaker 2: Henrietta Kamala Harris has been out fundraising former President Trump

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Speaker 2: and in past elections like goes that would be really

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Speaker 2: big news. Is that big news this time around?

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Speaker 9: I think it is. And I want to tie in

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Speaker 9: a couple of different components here.

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Speaker 8: You know, we have Hurricane Heleen that went straight through

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Speaker 8: Trump country in the Panhandle, Florida, Georgia, and North Carolina

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Speaker 8: with the exception of Ashville, and like a couple of

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Speaker 8: blue pockets. But the turnout campaign, not just on the

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Speaker 8: day of the election, but right now as early voting

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Speaker 8: has started, is something that all this fundraising is able

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Speaker 8: to actually do. Kamala Harris's campaign has you know, a

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Speaker 8: dozen field offices in certain states, that are going to

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Speaker 8: be pivotal to this election, where Trump has almost none.

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Speaker 8: There are campaign volunteers that are getting paid twenty dollars

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Speaker 8: an hour to go out into the field and make

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Speaker 8: sure that they're knocking on doors and getting people to

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Speaker 8: the polls, getting their.

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Speaker 9: Mail in ballots.

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Speaker 8: Said, that's the kind of money that's being spent right now,

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Speaker 8: and you're seeing it trickle down into the state races,

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Speaker 8: which are now expanding the Democratic map into places they

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Speaker 8: have no business being, you know, Texas, Florida, Nebraska, and

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Speaker 8: then also on the House side with an expansion of

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Speaker 8: the race sort of exponentially in the last couple of weeks.

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Speaker 8: And that's because of the massive fundraising campaign that the

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Speaker 8: Harris campaign has generated. I think I could think it's

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Speaker 8: if my Memory Service two hundred and eighty seven million

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Speaker 8: in August to Trump's eighty four million.

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Speaker 9: So they're tripling their numbers.

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Speaker 6: Twenty bucks an hour for volunteer. That's that's pretty solid,

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Speaker 6: like that something that.

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Speaker 3: Doesn't make them a volunteers.

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Speaker 6: It is true that feels odd, but you know, maybe

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Speaker 6: it's for profit volunteering. Henrietta. When we take a look

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Speaker 6: at the broader race in terms of Congress, Senate, and

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Speaker 6: the House. Where do we stand? What are some races

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Speaker 6: that you're watching?

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Speaker 8: Well, I mean, my favorite part of this election is

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Speaker 8: that we have the benefit of every single swing state

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Speaker 8: also having a Senate race happening. I want to lay

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Speaker 8: out two that I think are really important today and

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Speaker 8: maybe the VP debate can move the needle.

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Speaker 9: In Arizona and Nevada.

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Speaker 8: You see Kamala Harris's strength coming from the fact that

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Speaker 8: she's pulling thirteen to fifteen percent of the Republican voter base.

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Speaker 8: So in Arizona, fifteen percent of voters that identify as

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Speaker 8: Republicans are saying, you know what, not today, not for Trump,

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Speaker 8: not for Carrie Lake, who is the Republican Senate candidate there.

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Speaker 8: They're going for Galleo and they're going for Kamala Harris.

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Speaker 8: And that's why she is even playing ball in a

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Speaker 8: state like Arizona that used to be deep red. And

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Speaker 8: that's translating just next door to Nevada, where you're seeing

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Speaker 8: strength for Kamala Harris amongst Republican voters, and that's translating

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Speaker 8: down ballot to Jackie Rosen in that Senate seat, who's

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Speaker 8: ahead by ten in the latest polls on average, if

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Speaker 8: I'm not mistaken something like that. So the Senate candidates

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Speaker 8: down ballot for the Democratic Party are pulling so far

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Speaker 8: ahead of Kamala Harris, so far ahead of their Republican challengers,

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Speaker 8: and not all of them are incumbents, you know, whether

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Speaker 8: that's in Michigan or other states. There are Democratic Senate

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Speaker 8: races being held in all these pivotal states that Kamala

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Speaker 8: Harris must win and I think get four tens either

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Speaker 8: a massive split election or additional votes that Kamala Harris

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Speaker 8: can get in the final days of the campaign.

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Speaker 6: All right, Henrietta, thanks so much. We really appreciate it.

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Speaker 6: Henrita trans managing partner and director of Economic Policy at

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Speaker 6: Vita Partners joining us there. You early vootered already, didn't you?

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Speaker 7: I did?

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Speaker 2: I just mad, I think yesterday early and often. I'm

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Speaker 2: a big believer in that. And I'm also happy that

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Speaker 2: we are not I'm not in a swing state, John,

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Speaker 2: We're not in a swing state?

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Speaker 3: Are we in New Jersey? Well, don't say your vote

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Speaker 3: doesn't every single vote Council's inphasized. So I dropped it

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Speaker 3: early on even though we're in New Jersey.

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Speaker 2: So, but in New Jersey, we're not as state, so

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Speaker 2: we're not getting crushed by the political ads yet. But

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Speaker 2: even the national buys are noticeable, you know. But I mean,

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Speaker 2: you get in a swing state, every local buy is

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Speaker 2: on every station.

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Speaker 4: You can go.

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Speaker 6: I can't imagine. I mean, I've always lived in New York,

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Speaker 6: so I literally can't imagine.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple car Playing and

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Speaker 1: broud Otto with the Bloomberg Business app. Listen on demand

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Speaker 1: wherever you get your podcasts, or watch us live on YouTube.

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Speaker 2: Looking at the markets here, I mean again you could say,

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Speaker 2: given the geopolitical tensions, maybe this market's behaving fairly well,

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Speaker 2: you know, over the past a couple of days. As

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Speaker 2: John has just mentioned, we do have a little bit

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Speaker 2: of a sell off here, off just on about two

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Speaker 2: ten percent on the SMP five earner. But the question

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Speaker 2: is kind of, how do you thinking a little bit

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Speaker 2: more long term as you try to think about the geopolitics,

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Speaker 2: maybe even the strike of the dock workers in the

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Speaker 2: economic impact that could have, how does that impact intermediate

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Speaker 2: to longer term views. Let's check them with somebody who

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Speaker 2: does this stuff for a living. Mary and Bartel's chief investments.

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Speaker 2: It just for Sanctuary Wealth. Marion with a name like

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Speaker 2: Sanctuary Wealth. I'm thinking you guys think long term, maybe

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Speaker 2: relatively low levels of risk. What's your investment view of

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Speaker 2: markets these days?

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Speaker 10: Oh, I can't get more bullish. And I understand that

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Speaker 10: there's a lot of geopolitical risks. We have a port strike,

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Speaker 10: we have an unpresidented presidential election. But what I've learned

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Speaker 10: in my forty years is that liquidity trumps everything, and

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Speaker 10: the Federal Reserve is on an aggressive path in my

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Speaker 10: view of now easing monetary policy at a time when

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Speaker 10: our economy is growing, We're growing at least about two percent.

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Speaker 10: I would argue, we're still at full employment, and we

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Speaker 10: still have corporate profits growth. We're not even a recession

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Speaker 10: for corporate profits. That this is going to ignite our economy,

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Speaker 10: maintain in employment. And I'm pretty bullish.

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Speaker 5: Now.

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Speaker 10: That's not to say that the markets can't be a

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Speaker 10: little tricky or spooky in the month of October. But

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Speaker 10: what the month of October has that most people don't

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Speaker 10: talk about is we make important market bottoms that allow

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Speaker 10: the market to have its strong year end rally.

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Speaker 2: Where do you think the best opportunities are now? I

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Speaker 2: mean we've had some rotation in this marketplace. It's no

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Speaker 2: longer the big tech stocks that are leading us higher.

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Speaker 2: We've had some rotation some other sectors. How are you positioned?

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Speaker 10: So that's really a bullish thing that we have the

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Speaker 10: breath of the market expanding. So when we recently had

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Speaker 10: new record highs in the market, breath hit a new high,

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Speaker 10: we got volume expanding. That tells us we're in a

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Speaker 10: very strong market or very strong tape. I haven't given

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Speaker 10: up on tech. I think tech is in a consolidation.

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Speaker 10: It's have an extraordinary move, but it's allowed other pockets

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Speaker 10: of the markets to move. Can you believe that utilities

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Speaker 10: could rally twenty percent this year? As the market is

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Speaker 10: expecting rates to come down, they're seeking out yield within

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Speaker 10: the equity market, You've seen moves in reads and it

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Speaker 10: might be possible next year that the phrase or word

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Speaker 10: tina comes back. There is no other alternative as the

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Speaker 10: market continues to seek out yield as the baby boomers

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Speaker 10: move into retirement.

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Speaker 2: So I mean we've seen some volatility. I mean we

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Speaker 2: have the VIX now just still below twenty. But it

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Speaker 2: feels like there's been some volatility in these markets. When

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Speaker 2: you talk to a lot of pros out there, how

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Speaker 2: do you deal with that? Are there sectors maybe protect

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Speaker 2: you from that, or are there other ways to look

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Speaker 2: at maybe getting a little bit of stability in a portfolio.

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Speaker 9: So, I mean, the.

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Speaker 10: True way to get stability in a portfolio, if you

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Speaker 10: really want to be very defensive, is to own cash.

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Speaker 10: And the market's already positioned there. We have six six

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Speaker 10: point four trillion dollars in money market funds. Many clients

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Speaker 10: have tried to lock in that five five and a

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Speaker 10: half percent. I would argue that the market is extremely defensive,

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Speaker 10: but you know, pockets of utilities tend to be very

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Speaker 10: defensive also within the marketplace. Enough bright spot is we

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Speaker 10: have gold that's recently been hitting record all time highs,

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Speaker 10: So you know you can put a little bit of

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Speaker 10: gold in the portfolio. Because I do think over time

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Speaker 10: we are more in an inflationary environment. Although we're seeing

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Speaker 10: inflation come down now and I think into next year,

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Speaker 10: I think we already have the ingredients for inflation to

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Speaker 10: come back.

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Speaker 2: All Right, we're speaking with Marion Bartel's chief investment strategist

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Speaker 2: at shank Sanctuary Wealth. Thankfully, Alex Steele has made it

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Speaker 2: back from her sojourn out to Calgary and she's back

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Speaker 2: in our studio.

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Speaker 6: I mean, you say that now, but wait until it

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Speaker 6: comes out of my mouth the next how and a

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Speaker 6: very good So anyway, I just got back, literally just

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Speaker 6: got into the studio. Marian I noticed obviously that you

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Speaker 6: were talking about being bullish and being positive and liquidity,

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Speaker 6: et cetera. How does China factor into this because you're

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Speaker 6: already feeling bullish about liquidity regardless of what China is

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Speaker 6: actually doing. Could that be a catalyst?

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Speaker 10: Yes, it can, and.

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Speaker 9: It's not just China.

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Speaker 10: We have central banks around the world that are cutting

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Speaker 10: interest rates. It is very possible as we move into

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Speaker 10: next year that we get monetary stimulus that we haven't

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Speaker 10: seen since COVID in two thousand and eight, in two

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Speaker 10: thousand and nine.

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Speaker 9: And that's what I've.

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Speaker 10: Learned throughout the years. Even though some bad things can

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Speaker 10: be happening around you, the most important thing to the

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Speaker 10: market is can companies grow their corporate profits. Markets trade

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Speaker 10: on profits, not on potentials of potential risk. Now, what

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Speaker 10: would change my view? Because we do have a lot

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Speaker 10: of risks out there. If crude oil spiked very sharply

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Speaker 10: and especially got to one hundred and stayed over one hundred,

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Speaker 10: I would view that to be extremely negative. I mean,

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Speaker 10: my bullishness would turn pretty much to bearishness. But you know,

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Speaker 10: as you mentioned China, I think what China is doing

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Speaker 10: seems very unprecedented. I'm not an expert on China, but

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Speaker 10: the one thing I've learned is when central banks allow

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Speaker 10: you to buy the stock market, you should buy bye

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Speaker 10: bye We soart Japan do that near its lows?

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Speaker 9: In fact, the central bank.

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Speaker 10: Actually outright bought its market. So when a central bank

440
00:23:16,160 --> 00:23:19,800
Speaker 10: is allowing buying of the market, I think you should

441
00:23:20,080 --> 00:23:22,320
Speaker 10: own it. I think part of the reason you've seen

442
00:23:22,359 --> 00:23:26,399
Speaker 10: such a sharp move up in China is so many

443
00:23:27,160 --> 00:23:30,600
Speaker 10: traders were short the market, right, so we've had this

444
00:23:30,880 --> 00:23:32,200
Speaker 10: major shortcovering.

445
00:23:32,640 --> 00:23:33,879
Speaker 9: But most fund.

446
00:23:33,640 --> 00:23:37,399
Speaker 10: Managers that manage money, either globally or in the marging

447
00:23:37,440 --> 00:23:41,840
Speaker 10: markets are underweight. We have a lot of room to

448
00:23:42,000 --> 00:23:43,919
Speaker 10: actually move money into China.

449
00:23:44,280 --> 00:23:46,040
Speaker 2: All right, Maria, and thank you so much for joining us.

450
00:23:46,040 --> 00:23:50,119
Speaker 2: Always appreciate getting your thoughts there. Remaining clearly bullish there,

451
00:23:50,160 --> 00:23:53,119
Speaker 2: Marion Bartel's chief investment Strategies for Sanctuary.

452
00:23:53,160 --> 00:23:53,560
Speaker 3: Welcome.

453
00:23:54,920 --> 00:23:58,800
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

454
00:23:58,920 --> 00:24:02,840
Speaker 1: weekdays at ten am on applecar Play and Android Auto

455
00:24:02,840 --> 00:24:05,639
Speaker 1: with the Bloomberg Business Act. You can also listen live

456
00:24:05,720 --> 00:24:08,879
Speaker 1: on Amazon Alexa from our flagship New York station Just

457
00:24:08,960 --> 00:24:11,560
Speaker 1: say Alexa playing Bloomberg eleven thirty.

458
00:24:13,119 --> 00:24:14,919
Speaker 2: One of the names it's under pressure here to take

459
00:24:14,960 --> 00:24:18,040
Speaker 2: off about five six percent is Tesla, the company's first

460
00:24:18,080 --> 00:24:20,480
Speaker 2: quarter sales gains this year. They come up short the

461
00:24:20,520 --> 00:24:23,680
Speaker 2: vehicle deliveries. They did rise six point four percent, which

462
00:24:23,720 --> 00:24:26,000
Speaker 2: is good, but they were trailing analyst estimates here. So

463
00:24:26,000 --> 00:24:28,000
Speaker 2: again is stock selling off a little bit. Let's get

464
00:24:28,000 --> 00:24:31,720
Speaker 2: the latest with Keith Norton. He's a Bloomberg's Auto reporter. Keith,

465
00:24:31,720 --> 00:24:34,880
Speaker 2: what are you hearing out there about Tesla and their

466
00:24:34,920 --> 00:24:35,480
Speaker 2: earnings here?

467
00:24:37,000 --> 00:24:39,960
Speaker 11: Yeah, there's a little disappointment on the vehicle sales. They

468
00:24:40,000 --> 00:24:44,920
Speaker 11: came in just under analysts expectations about one thousand vehicles

469
00:24:45,000 --> 00:24:48,159
Speaker 11: under They sold four hundred and sixty two thousand and

470
00:24:48,680 --> 00:24:51,520
Speaker 11: four hundred and sixty three was more of the it

471
00:24:51,640 --> 00:24:54,680
Speaker 11: was a consensus. But more to the point, they kind

472
00:24:54,680 --> 00:24:59,720
Speaker 11: of missed the whisper expectation, which was maybe as high

473
00:24:59,760 --> 00:25:03,040
Speaker 11: as for seventy seems like there's some softness in the

474
00:25:03,080 --> 00:25:08,760
Speaker 11: cyber truck. There also were high expectations for sort of

475
00:25:08,760 --> 00:25:11,679
Speaker 11: a cash for Clunger's sort of promotion going on in China.

476
00:25:12,119 --> 00:25:15,480
Speaker 11: They've doubled the incentive for EV sales if you turn

477
00:25:15,520 --> 00:25:18,359
Speaker 11: in an older model there. That was expected to give

478
00:25:18,640 --> 00:25:23,960
Speaker 11: more tailwind to Tesla, and that didn't quite materialize the

479
00:25:23,960 --> 00:25:25,800
Speaker 11: way that investors expected.

480
00:25:25,840 --> 00:25:28,879
Speaker 6: So the stock is down, you know, just in terms

481
00:25:28,880 --> 00:25:31,919
Speaker 6: of ubers. For example, every Uber I'm in now feels

482
00:25:31,920 --> 00:25:33,280
Speaker 6: like it's a Tesla. I don't know if you guys

483
00:25:33,320 --> 00:25:36,320
Speaker 6: experienced the same thing. And I feel like, is that

484
00:25:36,400 --> 00:25:38,560
Speaker 6: a good or bad sign for Tesla? Because yeah, okay,

485
00:25:38,560 --> 00:25:41,400
Speaker 6: it's promotional, But I feel like the reason why all

486
00:25:41,400 --> 00:25:43,760
Speaker 6: the ubers are now Tesla is is because it's a

487
00:25:43,760 --> 00:25:46,880
Speaker 6: promotion like get this off my lot. Are we at

488
00:25:46,880 --> 00:25:47,639
Speaker 6: the trough with that?

489
00:25:48,920 --> 00:25:49,160
Speaker 5: Yeah?

490
00:25:49,240 --> 00:25:52,919
Speaker 11: You know, Model three and Model why that is the

491
00:25:53,000 --> 00:25:56,479
Speaker 11: volume of the company, which are their you know, mainstream cars,

492
00:25:56,520 --> 00:25:59,280
Speaker 11: their luxury model sque does not sell very well anymore.

493
00:25:59,320 --> 00:26:02,320
Speaker 11: It's getting pretty long in the tooth. And cyber truck,

494
00:26:02,840 --> 00:26:07,159
Speaker 11: you know, is priced sort of around one hundred thousand,

495
00:26:07,320 --> 00:26:11,240
Speaker 11: and that limits its volume under twenty thousand probably for

496
00:26:11,280 --> 00:26:16,480
Speaker 11: the quarter. So they are becoming a more mainstream brand

497
00:26:16,520 --> 00:26:19,600
Speaker 11: and when that happens, they become ubers.

498
00:26:20,560 --> 00:26:25,160
Speaker 2: So mail Matt from Westchester emails in here and says,

499
00:26:25,640 --> 00:26:28,680
Speaker 2: is Tesla ever gonna have a new model? We haven't

500
00:26:28,680 --> 00:26:30,399
Speaker 2: had a new model like ever, really like just it

501
00:26:30,520 --> 00:26:31,320
Speaker 2: upgraded model.

502
00:26:32,480 --> 00:26:32,720
Speaker 5: Yeah.

503
00:26:32,760 --> 00:26:35,960
Speaker 11: This is you know, sort of a long standing issue

504
00:26:36,359 --> 00:26:41,440
Speaker 11: that the product lineup, with the exception of cyber Truck,

505
00:26:41,480 --> 00:26:44,280
Speaker 11: which for now is a niche vehicle, that the lineup

506
00:26:44,359 --> 00:26:47,840
Speaker 11: is getting stale. But you know, Elon Musk is really

507
00:26:47,880 --> 00:26:51,840
Speaker 11: focusing more on Tesla as an AI company. They have

508
00:26:52,080 --> 00:26:57,000
Speaker 11: this event coming up next week to unveil the Robotaxi

509
00:26:57,080 --> 00:27:00,640
Speaker 11: that he's really been talking up. And that's actually talk

510
00:27:01,040 --> 00:27:04,440
Speaker 11: moved up the stock from the way he's positioning the company.

511
00:27:04,520 --> 00:27:08,240
Speaker 11: So he's trying to speak less like a traditional automaker

512
00:27:08,680 --> 00:27:10,680
Speaker 11: and more like an AI tech company.

513
00:27:10,880 --> 00:27:12,320
Speaker 6: I feel like it's always been that. It's been like

514
00:27:12,400 --> 00:27:14,760
Speaker 6: Tesla's a tech company, Nope, it's a car company, Nope.

515
00:27:14,800 --> 00:27:17,440
Speaker 6: Now it's an AI company. How does the sales though

516
00:27:17,440 --> 00:27:19,160
Speaker 6: that we're seeing for EV's because that's still the bread

517
00:27:19,160 --> 00:27:21,480
Speaker 6: and butter. How is that stacking up against its peers

518
00:27:21,520 --> 00:27:22,399
Speaker 6: like a GM or Forward.

519
00:27:23,400 --> 00:27:25,639
Speaker 11: Well, I mean, Tesla's still far and away leads to

520
00:27:25,640 --> 00:27:30,240
Speaker 11: the market. But GM, for example, had an excellent quarter

521
00:27:30,400 --> 00:27:34,119
Speaker 11: in EV sales because they've just rolled out this thirty

522
00:27:34,119 --> 00:27:38,560
Speaker 11: five thousand dollars Chevy Equinox electric vehicle and that's a

523
00:27:38,600 --> 00:27:44,320
Speaker 11: great price, and it's below Tesla's lowest prices. So you know,

524
00:27:44,560 --> 00:27:48,159
Speaker 11: new competitors are coming in. Tesla's supposed to have a

525
00:27:48,200 --> 00:27:52,680
Speaker 11: lower priced EV coming next year, but Elon hasn't really

526
00:27:52,720 --> 00:27:57,000
Speaker 11: talked much about that. So you know, as more competitors

527
00:27:57,000 --> 00:27:58,760
Speaker 11: come in, as they come in at the lower end

528
00:27:58,760 --> 00:28:01,120
Speaker 11: of the market, that's going to chip way a Testa's share.

529
00:28:02,000 --> 00:28:04,119
Speaker 2: All right, Keith, thanks so much. We appreciate that. As always,

530
00:28:04,160 --> 00:28:07,639
Speaker 2: Keith not an auto reporter for Bloomberg News. Testa reporting

531
00:28:07,720 --> 00:28:10,680
Speaker 2: numbers a little bit light relative to expectations.

532
00:28:12,119 --> 00:28:16,000
Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live

533
00:28:16,080 --> 00:28:19,600
Speaker 1: weekdays at ten am Eastern on applecar Play and Android

534
00:28:19,640 --> 00:28:22,399
Speaker 1: Auto with the Bloomberg Business app. You can also listen

535
00:28:22,520 --> 00:28:25,639
Speaker 1: live on Amazon Alexa from our flagship New York station,

536
00:28:26,000 --> 00:28:29,480
Speaker 1: just say Alexa play Bloomberg eleven thirty.

537
00:28:30,320 --> 00:28:32,040
Speaker 2: Looking at the market, it's kind of flat here today.

538
00:28:32,040 --> 00:28:33,679
Speaker 2: I think the market's trying to digest kind of what

539
00:28:33,720 --> 00:28:35,800
Speaker 2: we're seeing coming out of the Middle East, what the

540
00:28:36,040 --> 00:28:40,520
Speaker 2: economic impacts may be from this ongoing port strike, and

541
00:28:40,560 --> 00:28:44,120
Speaker 2: maybe the political landscape as well as their traditional earnings

542
00:28:44,160 --> 00:28:45,600
Speaker 2: and FED watch and all those types of things. But

543
00:28:45,640 --> 00:28:48,840
Speaker 2: let's go to somebody who does this stuff for a living, Colschlife,

544
00:28:48,960 --> 00:28:53,680
Speaker 2: Chief Investment Officer at BIMO Family Office, and we appreciate

545
00:28:53,680 --> 00:28:55,680
Speaker 2: getting some of her time. Carol, thanks so much for

546
00:28:55,760 --> 00:28:58,240
Speaker 2: joining us here. Put all that stuff together, you know,

547
00:28:58,320 --> 00:29:03,000
Speaker 2: the geopolitical stuff, the domestic politics, the earnings, the fetter reserve.

548
00:29:03,800 --> 00:29:06,200
Speaker 2: Where do you guys come out and just say in

549
00:29:06,240 --> 00:29:09,680
Speaker 2: your communication to your clients. These days we.

550
00:29:09,800 --> 00:29:13,480
Speaker 12: Remind clients a lot. The whole reason we build durable

551
00:29:13,520 --> 00:29:16,880
Speaker 12: and sturdy portfolios is to be able to absorb these headlines,

552
00:29:17,480 --> 00:29:22,200
Speaker 12: because it's not at all uncommon for markets to grapple

553
00:29:22,400 --> 00:29:25,640
Speaker 12: these headlines. You know, It's interesting because we end in

554
00:29:25,680 --> 00:29:30,400
Speaker 12: September with many different averages at or near all time highs,

555
00:29:30,840 --> 00:29:33,440
Speaker 12: and so investors are already a little nervous because there's

556
00:29:33,440 --> 00:29:35,760
Speaker 12: that human bias to try to figure out where the

557
00:29:35,880 --> 00:29:38,040
Speaker 12: risk is going to come from. And when you get

558
00:29:38,040 --> 00:29:40,080
Speaker 12: a day like yesterday where all of a sudden it's

559
00:29:40,080 --> 00:29:44,480
Speaker 12: a one two three punch, a lot of times investors

560
00:29:44,520 --> 00:29:47,080
Speaker 12: can be concerned in the short run. But it's interesting

561
00:29:47,080 --> 00:29:49,320
Speaker 12: when you look through it. And the nice thing is

562
00:29:49,400 --> 00:29:51,360
Speaker 12: is we're going into earning seasons, so we'll get a

563
00:29:51,360 --> 00:29:54,680
Speaker 12: lot of color from companies not only about the actual

564
00:29:54,720 --> 00:29:57,680
Speaker 12: earnings that they've reported, but their outlook for what's coming

565
00:29:57,720 --> 00:30:00,040
Speaker 12: next and how they're going to absorb all of the

566
00:30:00,160 --> 00:30:03,200
Speaker 12: shocks from this. But in the in the when you

567
00:30:03,240 --> 00:30:07,400
Speaker 12: look at the last few quarterly reports, especially the big

568
00:30:07,440 --> 00:30:10,440
Speaker 12: months of quarterly report, markets have actually done well because

569
00:30:10,480 --> 00:30:13,240
Speaker 12: the fundamentals have come through and our companies have proven

570
00:30:13,400 --> 00:30:17,720
Speaker 12: very resilient. So having portfolios, your minding investors that we've

571
00:30:17,760 --> 00:30:20,360
Speaker 12: got some fixed income in there for stability, we've got

572
00:30:20,360 --> 00:30:24,000
Speaker 12: some growth bias in there. Because the underlying trends are

573
00:30:24,080 --> 00:30:26,880
Speaker 12: very positive, it's been a great place to be well.

574
00:30:27,160 --> 00:30:29,920
Speaker 6: It also goes to the other point of how many

575
00:30:29,920 --> 00:30:33,040
Speaker 6: bullish catalysts there are out there right now. And I'll

576
00:30:33,040 --> 00:30:35,360
Speaker 6: break it down. Okay, we got margins could actually be

577
00:30:35,360 --> 00:30:37,960
Speaker 6: better than expected as interest rates wind up coming down.

578
00:30:38,280 --> 00:30:41,120
Speaker 6: You also have, as you point out, earnings and expectations

579
00:30:41,160 --> 00:30:43,520
Speaker 6: have been revised lower, so the bar is pretty low.

580
00:30:43,800 --> 00:30:46,200
Speaker 6: The Fed is cutting twenty five or fifty in November,

581
00:30:46,240 --> 00:30:49,520
Speaker 6: but they are cutting stimulus from China. Definitely a fiscal

582
00:30:49,560 --> 00:30:51,440
Speaker 6: spend from the US government no matter who wins the

583
00:30:51,440 --> 00:30:55,960
Speaker 6: White House. And I'm obstruct like what is the downside?

584
00:30:56,000 --> 00:30:58,280
Speaker 6: Like how do you not buy equities in this market?

585
00:30:58,360 --> 00:31:00,080
Speaker 6: And plus, excess liquidity is really hot.

586
00:31:01,080 --> 00:31:03,760
Speaker 12: Well, and I think that's why a lot of times

587
00:31:03,760 --> 00:31:06,160
Speaker 12: it's called the Wall of Warrior, because the market keeps

588
00:31:06,480 --> 00:31:10,640
Speaker 12: grudgingly hitting new highs, but you're not seeing the traditional

589
00:31:10,680 --> 00:31:13,840
Speaker 12: exuberance or ebulliance you would that would mark a market top.

590
00:31:14,600 --> 00:31:18,920
Speaker 12: And so from that perspective, there is a substantial amount underneath.

591
00:31:19,000 --> 00:31:21,640
Speaker 12: And actually you can make an argument that a lot

592
00:31:21,680 --> 00:31:24,880
Speaker 12: of business activities have actually been held in reserve because

593
00:31:24,920 --> 00:31:27,880
Speaker 12: everyone for the last two years has been fearing a

594
00:31:27,920 --> 00:31:31,240
Speaker 12: recession around every corner, and interest rates were high. Now

595
00:31:31,280 --> 00:31:33,280
Speaker 12: you've got a reversal of those. You've got a lot

596
00:31:33,360 --> 00:31:36,880
Speaker 12: of people saying, which is maybe reaverted the recession. And oh,

597
00:31:36,920 --> 00:31:39,720
Speaker 12: by the way, the GDP revisions that we just had

598
00:31:40,040 --> 00:31:44,120
Speaker 12: erased that technical recession that everyone freaked out about a

599
00:31:44,160 --> 00:31:46,440
Speaker 12: year or two ago, because that's not even in the

600
00:31:46,520 --> 00:31:50,600
Speaker 12: numbers anymore. And it goes again to how resilient these

601
00:31:50,640 --> 00:31:51,520
Speaker 12: companies have been.

602
00:31:52,320 --> 00:31:53,960
Speaker 2: Carol, how about the fixed and come space, where do

603
00:31:53,960 --> 00:31:58,120
Speaker 2: you see opportunities there? And again an interest rate environment

604
00:31:58,160 --> 00:31:59,840
Speaker 2: where some of the fed's going to continue to lower.

605
00:32:00,920 --> 00:32:05,240
Speaker 12: Yeah, we actually we're preferring clients not wait around in cash.

606
00:32:05,320 --> 00:32:08,160
Speaker 12: Cash has been very comfortable for a lot of people

607
00:32:08,200 --> 00:32:09,880
Speaker 12: that they at least go a bit out on the

608
00:32:09,920 --> 00:32:12,560
Speaker 12: curb and lock in some of these yields that you're getting. Now,

609
00:32:12,920 --> 00:32:15,720
Speaker 12: we're not ready to go out towards the tenure or

610
00:32:15,800 --> 00:32:19,600
Speaker 12: longer because we actually think the tenure yields are lower

611
00:32:19,640 --> 00:32:22,040
Speaker 12: than they'll end up being, because we do believe there's

612
00:32:22,080 --> 00:32:25,080
Speaker 12: an underlying growth bias. You referenced a lot of the

613
00:32:25,120 --> 00:32:27,600
Speaker 12: fiscal spend that's out there. There's a lot of stuff

614
00:32:27,640 --> 00:32:32,600
Speaker 12: that's been targeted and there's thumbtacks in it, but less

615
00:32:32,680 --> 00:32:34,640
Speaker 12: based on some of the numbers, we're seeing less than

616
00:32:34,640 --> 00:32:37,720
Speaker 12: twenty percent of what's been allocated is actually out there.

617
00:32:38,160 --> 00:32:40,080
Speaker 12: And one of the interesting thing is is you've got

618
00:32:40,080 --> 00:32:44,080
Speaker 12: a lot of bonding bills on state and local ballots

619
00:32:44,160 --> 00:32:47,960
Speaker 12: this fall, and to the extent those get passed, you've

620
00:32:48,000 --> 00:32:51,280
Speaker 12: got a lot of spending teeing up that's matched by

621
00:32:51,320 --> 00:32:54,720
Speaker 12: those federal funds, and so you've got the opportunity to

622
00:32:54,840 --> 00:32:58,760
Speaker 12: really put some extra growth underneath a lot of these things.

623
00:32:58,840 --> 00:33:01,880
Speaker 12: And so we think as that gets absorbed that you'll

624
00:33:01,920 --> 00:33:05,200
Speaker 12: see that the tenure yields drift higher, not lower.

625
00:33:05,800 --> 00:33:07,840
Speaker 6: So, Paul, you'll be so proud of me. I did

626
00:33:07,880 --> 00:33:09,800
Speaker 6: email my guy and I was like, Hey, so I

627
00:33:09,840 --> 00:33:11,720
Speaker 6: had this money in my high heeled savings. Should I

628
00:33:11,760 --> 00:33:15,640
Speaker 6: put it in munis? I'm just saying where the money

629
00:33:15,640 --> 00:33:17,440
Speaker 6: should go. I thought of Paul. He likes the munis.

630
00:33:17,960 --> 00:33:21,880
Speaker 6: But it does raise the question of in the equity side,

631
00:33:22,400 --> 00:33:25,000
Speaker 6: where do you wind up rotating that cash. This an

632
00:33:25,000 --> 00:33:27,080
Speaker 6: area that we all talked about in terms of the

633
00:33:27,080 --> 00:33:30,880
Speaker 6: positive catalysts play out. Do you rotate into the cyclicals,

634
00:33:31,160 --> 00:33:32,880
Speaker 6: do you stick with tech? Do you barbel it?

635
00:33:34,400 --> 00:33:34,880
Speaker 7: I think you.

636
00:33:34,880 --> 00:33:36,840
Speaker 12: Barbel it, and I also think you move down the

637
00:33:36,880 --> 00:33:39,520
Speaker 12: capitalization curve because there's a lot of argument that a

638
00:33:39,520 --> 00:33:41,840
Speaker 12: lot of those small caps have been very fitful at

639
00:33:41,880 --> 00:33:44,960
Speaker 12: their participation. They'll participate for a week or two or

640
00:33:45,000 --> 00:33:46,720
Speaker 12: a day or two, and then they'll pull it all back.

641
00:33:46,960 --> 00:33:48,960
Speaker 12: And on those pull backs, it's nice to be able

642
00:33:48,960 --> 00:33:51,640
Speaker 12: to round up some of those because they have by

643
00:33:51,680 --> 00:33:54,920
Speaker 12: and large, they're going to have better access, they're going

644
00:33:55,000 --> 00:33:58,040
Speaker 12: to have more floating rate debt, they're going to benefit

645
00:33:58,200 --> 00:34:02,640
Speaker 12: more disproportionately, if you will, from it FED bringing rates down,

646
00:34:03,320 --> 00:34:08,200
Speaker 12: and they're also going to participate as the economic activities

647
00:34:08,239 --> 00:34:10,160
Speaker 12: stays robust in the United States.

648
00:34:11,480 --> 00:34:14,520
Speaker 2: Ellen, I want to get your thoughts on alternative investments.

649
00:34:14,520 --> 00:34:16,279
Speaker 2: How do you put them in the context of your

650
00:34:16,400 --> 00:34:19,200
Speaker 2: the Bemo Family office in terms of asset allocation for

651
00:34:19,239 --> 00:34:22,279
Speaker 2: your clients, whether it's private equity, private debt, hedge funds,

652
00:34:22,320 --> 00:34:22,799
Speaker 2: that kind of thing.

653
00:34:23,440 --> 00:34:27,640
Speaker 12: Yep, private equity, private debt, we're probably less. We have

654
00:34:27,920 --> 00:34:31,680
Speaker 12: selective spots where we use hedge funds as much, probably

655
00:34:31,719 --> 00:34:33,360
Speaker 12: not as much as we might have a decade or

656
00:34:33,360 --> 00:34:36,400
Speaker 12: two ago, but a lot of private capital in general.

657
00:34:36,600 --> 00:34:39,120
Speaker 12: We also have other things. We are very active in

658
00:34:39,239 --> 00:34:42,759
Speaker 12: doing some custom structured notes for our clients. We look

659
00:34:42,800 --> 00:34:48,360
Speaker 12: at a lot of interesting non correlated asset class catastrophe bonds.

660
00:34:48,480 --> 00:34:52,080
Speaker 12: Some of the interesting niches and credit. The nice thing

661
00:34:52,120 --> 00:34:54,319
Speaker 12: we have in terms of the private capital that we

662
00:34:54,400 --> 00:34:56,839
Speaker 12: go after is we can go to smaller funds rather

663
00:34:56,880 --> 00:35:00,320
Speaker 12: than the multi billion dollar and super big funds. Sweet

664
00:35:00,360 --> 00:35:02,680
Speaker 12: spot is some smaller funds that get a lot of

665
00:35:03,000 --> 00:35:05,480
Speaker 12: less attention, if you will, and are in some very

666
00:35:05,560 --> 00:35:07,879
Speaker 12: niche stoff, so our clients like it a lot.

667
00:35:08,520 --> 00:35:11,200
Speaker 6: We were just talking about Nike with punam Go Oil

668
00:35:11,239 --> 00:35:15,200
Speaker 6: or Bloomberg intelligence analyst, which leads me to the consumer, Right,

669
00:35:15,520 --> 00:35:18,480
Speaker 6: how do you play K shaped economy At the end

670
00:35:18,480 --> 00:35:18,879
Speaker 6: of the day.

671
00:35:20,480 --> 00:35:23,920
Speaker 12: It is difficult, and it's interesting because one of the

672
00:35:23,920 --> 00:35:26,719
Speaker 12: pieces that I'm preparing to write is you do have this.

673
00:35:27,120 --> 00:35:30,400
Speaker 12: There's a lot of angst out there that is coming

674
00:35:30,400 --> 00:35:33,759
Speaker 12: through in consumer confidence numbers and also coming through in

675
00:35:33,880 --> 00:35:37,520
Speaker 12: polling numbers. But you've got the odd part is is

676
00:35:37,560 --> 00:35:42,920
Speaker 12: the top twenty percent of the populace produces forty percent

677
00:35:42,960 --> 00:35:46,560
Speaker 12: of the GDP activity. The bottom twenty percent produces nine percent,

678
00:35:47,040 --> 00:35:49,640
Speaker 12: So that top twenty percent is really going to drive.

679
00:35:49,400 --> 00:35:50,760
Speaker 5: The overall macro number.

680
00:35:51,040 --> 00:35:54,200
Speaker 12: But interestingly enough, that bottom twenty percent has a chance

681
00:35:54,239 --> 00:35:58,200
Speaker 12: to drive what happens at the ballot box in five

682
00:35:58,280 --> 00:36:01,040
Speaker 12: weeks and to the extent that the turnout and vote

683
00:36:01,080 --> 00:36:04,240
Speaker 12: you have a chance to shape policy intermediate, longer term,

684
00:36:04,719 --> 00:36:07,000
Speaker 12: and so we do a lot of talking like that

685
00:36:07,040 --> 00:36:09,320
Speaker 12: because obviously our clients are going to sit at the

686
00:36:09,880 --> 00:36:11,799
Speaker 12: top portion and they're going to be in a very

687
00:36:11,840 --> 00:36:15,880
Speaker 12: different scenario. But their kids, their grandkids are looking at

688
00:36:16,080 --> 00:36:18,880
Speaker 12: a lot different environment because they're finding it difficult to

689
00:36:18,880 --> 00:36:22,200
Speaker 12: find daycare, difficult to find houses, they're over indebted in

690
00:36:22,239 --> 00:36:25,319
Speaker 12: a lot of cases with college stat things like that.

691
00:36:25,440 --> 00:36:28,759
Speaker 12: So it really is difficult and we have a lot

692
00:36:28,800 --> 00:36:30,680
Speaker 12: of those conversations one by one.

693
00:36:31,560 --> 00:36:33,120
Speaker 2: All Right, Kerl, thank you so much for joining us

694
00:36:33,120 --> 00:36:36,280
Speaker 2: Coush Life. She's a chief investment officer for Bemo Family Office.

695
00:36:36,360 --> 00:36:40,600
Speaker 2: Joining us there via the zoom thing.

696
00:36:40,640 --> 00:36:45,880
Speaker 1: Here, you're listening to the Bloomberg Intelligence Podcast. Catch us

697
00:36:45,920 --> 00:36:49,319
Speaker 1: live weekdays at ten am Eastern on applecar Play and

698
00:36:49,320 --> 00:36:52,239
Speaker 1: Android Auto with the Bloomberg Business App. You can also

699
00:36:52,320 --> 00:36:55,799
Speaker 1: listen live on Amazon Alexa from our flagship New York station,

700
00:36:56,200 --> 00:36:58,879
Speaker 1: Just say Alexa play Bloomberg eleven.

701
00:36:58,680 --> 00:37:03,240
Speaker 6: Thirty from Alex Steel alongside Paul Sweeney. This is Bloomberg

702
00:37:03,320 --> 00:37:06,880
Speaker 6: Intelligence Radio. We're broadcasting to live from Ournactive Broker studio

703
00:37:07,000 --> 00:37:10,280
Speaker 6: right here. In midtown Manhattan. As Charlie was just talking about,

704
00:37:10,320 --> 00:37:12,600
Speaker 6: WTI is up by about seven tens of one percent.

705
00:37:12,640 --> 00:37:15,719
Speaker 6: We're treating at seventy thirty four. The latest headline that

706
00:37:15,760 --> 00:37:18,080
Speaker 6: just crossed from the Wall Street Journal is it apparently

707
00:37:18,160 --> 00:37:22,680
Speaker 6: key members of an alliance made of OPEC plus agreed

708
00:37:22,800 --> 00:37:26,000
Speaker 6: to ease curbs in December. This is at an online

709
00:37:26,040 --> 00:37:28,640
Speaker 6: gathering that took place on Wednesday, and according to delegates

710
00:37:28,920 --> 00:37:32,719
Speaker 6: in the cartel, basically OPEC plus has taken oil off

711
00:37:32,760 --> 00:37:34,960
Speaker 6: the market and they need to find a time to

712
00:37:35,000 --> 00:37:36,840
Speaker 6: put it back onto the market, whether it's going to

713
00:37:36,840 --> 00:37:38,520
Speaker 6: be a slow drip, whether it's going to be a

714
00:37:38,600 --> 00:37:40,480
Speaker 6: full stop, or whether they're going to have to cut

715
00:37:40,520 --> 00:37:42,520
Speaker 6: again in order to support the oil price. All of

716
00:37:42,520 --> 00:37:45,480
Speaker 6: that surrounding the oil market right now. Ellen Wald is

717
00:37:45,480 --> 00:37:48,720
Speaker 6: president of Transversal Consulting and senior Fellow at Atlanta Council,

718
00:37:48,800 --> 00:37:51,080
Speaker 6: and she joins us, Now, what is your read through

719
00:37:51,080 --> 00:37:51,920
Speaker 6: on that headline?

720
00:37:53,200 --> 00:37:56,000
Speaker 13: Yeah, I think that this headline it comes after a

721
00:37:56,040 --> 00:38:00,960
Speaker 13: couple of interesting headlines from Saudi Arabia saying, know they're

722
00:38:00,960 --> 00:38:03,560
Speaker 13: worried about oil going down maybe to fifty or they're

723
00:38:03,600 --> 00:38:07,120
Speaker 13: not pursuing hundred dollars oil anymore. I think that this

724
00:38:07,200 --> 00:38:11,279
Speaker 13: is really reflective of a process that OPEK has been

725
00:38:11,320 --> 00:38:14,959
Speaker 13: going through over the past quarter, maybe even half a year.

726
00:38:15,320 --> 00:38:17,960
Speaker 13: At this point where they're looking at the market, they

727
00:38:18,000 --> 00:38:20,959
Speaker 13: know they've got to start unwinding these cuts that they've

728
00:38:20,960 --> 00:38:24,360
Speaker 13: had in place for a long time, but they're really

729
00:38:24,560 --> 00:38:27,960
Speaker 13: conscious of where the market is going, what demand looks

730
00:38:28,000 --> 00:38:30,400
Speaker 13: like in China, and what they have to do to

731
00:38:30,719 --> 00:38:34,200
Speaker 13: kind of ease the market into accepting that, yes, they

732
00:38:34,239 --> 00:38:36,440
Speaker 13: are going to be putting more oil on the market.

733
00:38:36,640 --> 00:38:39,720
Speaker 13: They've already delayed the return of this oil was supposed

734
00:38:39,719 --> 00:38:41,920
Speaker 13: to start coming back on the market in October, and

735
00:38:41,960 --> 00:38:45,239
Speaker 13: they're really just they're pushing it back to December, but

736
00:38:45,280 --> 00:38:48,080
Speaker 13: they're saying, yes, you know, we still plan on doing this.

737
00:38:48,600 --> 00:38:51,680
Speaker 13: I do think, as you mentioned before about Iraq and

738
00:38:51,800 --> 00:38:55,360
Speaker 13: Kazakhstan and some overproduction going on there, it's entirely possible

739
00:38:55,400 --> 00:39:00,640
Speaker 13: that they will be excluded from this increase in output

740
00:39:01,239 --> 00:39:04,240
Speaker 13: because the way that it works is each member only

741
00:39:04,280 --> 00:39:07,279
Speaker 13: increases a certain percentage, So each individual member is only

742
00:39:07,320 --> 00:39:09,720
Speaker 13: going to be putting on really a very minimal amount

743
00:39:09,760 --> 00:39:12,640
Speaker 13: of barrels. They may exclude those members that had been

744
00:39:13,120 --> 00:39:16,359
Speaker 13: overproducing from this in order to prevent you know, too

745
00:39:16,440 --> 00:39:18,560
Speaker 13: much oil from flooding the market.

746
00:39:18,880 --> 00:39:19,319
Speaker 7: Hey Ellen.

747
00:39:19,560 --> 00:39:22,040
Speaker 2: Javier Blass, who is a Bloomberg opinion columnist covering the

748
00:39:22,160 --> 00:39:24,560
Speaker 2: energy space. He's out with a note today saying that

749
00:39:24,600 --> 00:39:27,799
Speaker 2: the oil price that matters now is fifty dollars, not

750
00:39:27,920 --> 00:39:32,080
Speaker 2: that one hundred dollars fabled one hundred dollars dollars target,

751
00:39:32,160 --> 00:39:35,719
Speaker 2: that's not relevant anymore. Maybe the new target's fifty. What

752
00:39:35,760 --> 00:39:36,440
Speaker 2: do you think about that?

753
00:39:37,360 --> 00:39:40,239
Speaker 13: You know, that's a that's an interesting conception. I do

754
00:39:40,360 --> 00:39:44,120
Speaker 13: think that there is definitely a we've kind of switched

755
00:39:44,120 --> 00:39:45,920
Speaker 13: from you know, how high is it going to go?

756
00:39:45,960 --> 00:39:48,239
Speaker 13: To how can we prevent you know, how can we

757
00:39:48,280 --> 00:39:51,239
Speaker 13: prevent there from being kind of a bottom. I do

758
00:39:51,360 --> 00:39:55,680
Speaker 13: think that he's saying this in part because the Saudis

759
00:39:55,960 --> 00:39:59,560
Speaker 13: have definitely been hinting at the prospects of you know,

760
00:40:00,120 --> 00:40:02,279
Speaker 13: they have the potential and the ability to flood the

761
00:40:02,280 --> 00:40:04,759
Speaker 13: market with oil and push prices down, and that's really

762
00:40:04,800 --> 00:40:08,040
Speaker 13: the only leverage that they have to get other OPEC

763
00:40:08,120 --> 00:40:10,319
Speaker 13: members and other OPEP plus members in line, and to

764
00:40:10,400 --> 00:40:14,040
Speaker 13: keep them in line and you know, adhering to their

765
00:40:14,120 --> 00:40:16,839
Speaker 13: quotas and so the Satuities say, look, you're you're not hearing.

766
00:40:16,840 --> 00:40:19,239
Speaker 13: We can flood the market. We can open the floodgates,

767
00:40:19,239 --> 00:40:21,680
Speaker 13: and we can you know, increase our production up so

768
00:40:21,800 --> 00:40:24,560
Speaker 13: high that prices will will go down maybe to fifty

769
00:40:24,880 --> 00:40:27,200
Speaker 13: and maybe even lower as we've seen in the past,

770
00:40:27,440 --> 00:40:31,280
Speaker 13: and that will have a major impact on the ability

771
00:40:31,320 --> 00:40:34,120
Speaker 13: of these other countries to bring in revenue. But for

772
00:40:34,160 --> 00:40:37,680
Speaker 13: the Saudis, it's really not that big a deal. Then

773
00:40:37,800 --> 00:40:41,359
Speaker 13: they can take it, whereas those countries will really significantly

774
00:40:41,440 --> 00:40:43,920
Speaker 13: be hurt. And so I don't think that this is

775
00:40:43,960 --> 00:40:47,279
Speaker 13: a threat that they're making idly. But I don't think

776
00:40:47,280 --> 00:40:49,239
Speaker 13: it's you know, around the corner. I think you'd have

777
00:40:49,280 --> 00:40:53,120
Speaker 13: to have some pretty severe actions, you know, to see

778
00:40:53,120 --> 00:40:54,359
Speaker 13: the Saudis go through with this.

779
00:40:54,600 --> 00:40:57,400
Speaker 6: Yeah, and then to that point, their break even for

780
00:40:57,480 --> 00:41:00,200
Speaker 6: oil price is super low, but their fiscal breaking even

781
00:41:00,239 --> 00:41:02,720
Speaker 6: it is like eighty five, So they can just pairback

782
00:41:02,760 --> 00:41:06,080
Speaker 6: spending domestically if they needed to support that. The last

783
00:41:06,080 --> 00:41:08,760
Speaker 6: time they flooded the market, it was to hurt shale producers,

784
00:41:08,760 --> 00:41:10,400
Speaker 6: and I find it interesting that this time if they

785
00:41:10,440 --> 00:41:12,640
Speaker 6: wind up sort of rolling back those cuts, it's to

786
00:41:12,760 --> 00:41:15,920
Speaker 6: force compliance among its own member. It's an interesting twist

787
00:41:16,280 --> 00:41:19,120
Speaker 6: before we let you go how much geopolitical risk premium

788
00:41:19,239 --> 00:41:21,000
Speaker 6: is in the oil price right now and how much

789
00:41:21,040 --> 00:41:22,759
Speaker 6: you think should be in the oil price right now.

790
00:41:23,160 --> 00:41:25,040
Speaker 13: So that's a great question. I do think there is

791
00:41:25,080 --> 00:41:28,760
Speaker 13: some geopolitical risk premium. We've seen prices reacting to events.

792
00:41:28,800 --> 00:41:33,480
Speaker 13: Maybe you know, two percent, three percent is geopolitical risk premium.

793
00:41:33,600 --> 00:41:35,239
Speaker 13: I think, you know, it's hard to kind of divv

794
00:41:35,320 --> 00:41:37,879
Speaker 13: that up between the Middle East, between Russia. I think

795
00:41:37,960 --> 00:41:41,759
Speaker 13: that any kind of risk premium that's associated with the

796
00:41:41,800 --> 00:41:44,160
Speaker 13: idea that Iran might say close the straight of form

797
00:41:44,239 --> 00:41:47,799
Speaker 13: moves is really not well founded because this is not

798
00:41:47,960 --> 00:41:50,200
Speaker 13: the same environment that we saw in the nineties or

799
00:41:50,239 --> 00:41:52,920
Speaker 13: the eighties or even the early two thousands. Iran is

800
00:41:52,960 --> 00:41:54,600
Speaker 13: not going to close the straight of form moves. It's

801
00:41:54,640 --> 00:41:57,120
Speaker 13: not even clear that they can physically do that. But

802
00:41:57,520 --> 00:42:00,920
Speaker 13: doing so would so anger China, and China is now

803
00:42:00,960 --> 00:42:04,400
Speaker 13: the mean customer of it's Iran's main customer, it's Saudi

804
00:42:04,480 --> 00:42:07,040
Speaker 13: Rabie's main customer, it's the mean customer of all of

805
00:42:07,080 --> 00:42:10,680
Speaker 13: the Middle East oil producers, and that would so ainger

806
00:42:10,840 --> 00:42:14,919
Speaker 13: China that the consequences would be such that they would

807
00:42:14,920 --> 00:42:17,280
Speaker 13: be devastating, so I don't see any reason why Iran

808
00:42:17,280 --> 00:42:19,400
Speaker 13: would do that. I do think that there is an

809
00:42:19,440 --> 00:42:22,080
Speaker 13: elevated risk in the Red Sea, and that's really where

810
00:42:22,239 --> 00:42:24,720
Speaker 13: our analysts should be keeping an eye on in terms

811
00:42:24,760 --> 00:42:26,880
Speaker 13: of the potential for some serious disruption.

812
00:42:27,600 --> 00:42:29,319
Speaker 2: All right, Ellen, thank you so much for joining us.

813
00:42:29,320 --> 00:42:32,040
Speaker 2: Ellen Wald she is a president a Transversal Consulting and

814
00:42:32,120 --> 00:42:34,120
Speaker 2: a senior fellow at the Atlanta Council, and she is

815
00:42:34,160 --> 00:42:38,000
Speaker 2: one of our go to voices on all things global oil.

816
00:42:38,280 --> 00:42:42,799
Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apples, Spotify,

817
00:42:43,000 --> 00:42:45,920
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818
00:42:46,000 --> 00:42:49,600
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819
00:42:49,680 --> 00:42:53,080
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820
00:42:53,200 --> 00:42:56,360
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821
00:42:56,440 --> 00:42:58,280
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