Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Joe, I have an embarrassing confession. Go on, you know
Speaker 2: the birth death adjustment.
Speaker 1: I have the same confession.
Speaker 2: I used to think it was something about like the
Speaker 2: population of people and the labor supply, but it's not.
Speaker 2: It's about business formation.
Speaker 1: Yes, that's right.
Speaker 3: Oh my.
Speaker 1: My confession is even more embarrassing, which is that I
Speaker 1: literally always forget what it is. I did a deadlist.
Speaker 2: I'm both the most popular trader and most successful trader
Speaker 2: at Citadel.
Speaker 1: That is going viral.
Speaker 2: Uh barges.
Speaker 1: This is an after school special, except.
Speaker 2: I've decided I'm going to base my entire personality going
Speaker 2: forward on campaigning for a strategic pork reserve in the US.
Speaker 1: Black goals.
Speaker 2: These are the important questions that robots taking over the world.
Speaker 1: No, I think that like in a couple of years,
Speaker 1: the AI will do a really good job of making
Speaker 1: the odd Launch podcast. One day that person will have
Speaker 1: the mandate of Heaven.
Speaker 2: How do I get more popular and successful?
Speaker 3: We do have.
Speaker 2: You're listening to lots more where we catch up with
Speaker 2: friends about what's going on right now, Because.
Speaker 1: Even when the Odd Lots is over, there's always lots more.
Speaker 2: And we really do have the perfect guest.
Speaker 1: When people are listening to this, it is jobs Day.
Speaker 1: We're recording the September fourth, Jobs Day, September fifth. The
Speaker 1: important thing to note right now is that, to some extent,
Speaker 1: that monthly non farm payrolls report that everyone depends on
Speaker 1: and relies on has never felt to me like more
Speaker 1: of a moving target in terms of what I'm supposed
Speaker 1: to be looking at. For many years. It's like, Okay,
Speaker 1: how many jobs are created this month? Yeah, it's going
Speaker 1: to get revised a little bit, but that tells you something.
Speaker 1: Now between seasonality, post COVID sort of normalization that's still processing,
Speaker 1: and then of course this sort of changes in immigration policy,
Speaker 1: which have swung dramatically in the year. These numbers, it's
Speaker 1: not clear that you actually have to put it in
Speaker 1: some work to understand these, no totally.
Speaker 2: And also, I mean the BLS itself seems to have
Speaker 2: some difficulty with the numbers, because the trend that we've
Speaker 2: seen is they put out a non farm payroll like
Speaker 2: an initial estimate on a Friday, and then a few
Speaker 2: weeks later you got the revisions, and the revisions always
Speaker 2: seem to be downwards lately.
Speaker 1: Lately they've been mostly downwards. And then there's annual revisions
Speaker 1: and those are coming up, I believe next week. And
Speaker 1: you know, we were at a time when setting aside
Speaker 1: the collection and of course setting it aside the fact
Speaker 1: that the BLS chief has been fired and there's going
Speaker 1: to be a new one at some point. Sitting outside
Speaker 1: all of these things, we're also at a time when
Speaker 1: there are significant questions about just the macro state of
Speaker 1: the economy and whether the sort of low hiring, low
Speaker 1: firing mode which is characterized for a while now is
Speaker 1: at risk of deteriorating further. I don't know, it's a
Speaker 1: tough read.
Speaker 2: You know who we should ask Steve Englander.
Speaker 3: Okay, but let me start with a broader question. Actually
Speaker 3: may be excellent. And the thing is that the question
Speaker 3: has changed. Like in the past, we used to say, okay,
Speaker 3: last month or you know, last twelve months, NFP growth
Speaker 3: was two hundred thousand, looks like one hundred thousand. Now
Speaker 3: things have slowed down. That's all we had to know
Speaker 3: this time around. Because supply is so important, everyone is
Speaker 3: making an estimate and kind of saying, well, native born workers,
Speaker 3: you know, maybe seventy thousand. If you're pessimistic, if you
Speaker 3: think we have net immigration from foreign born workers, you
Speaker 3: have a view of fifty. And if you think that
Speaker 3: there's still some legal immigration coming in, maybe you're at
Speaker 3: one hundred. And that means that getting the level right
Speaker 3: is really important. And the problem with the NFP numbers
Speaker 3: that actually has two components, one of which is the
Speaker 3: one that we all think about. They survey about one
Speaker 3: hundred and sixty thousand businesses maybe six hundred thousand establishments,
Speaker 3: and basically say, okay, how many workers did you have
Speaker 3: last month? How many did you have this month, And
Speaker 3: through their statistical analysis they say, okay, this is a change.
Speaker 3: So that's for firms that are in continual operation, gives
Speaker 3: them that number. The problem is that they have no
Speaker 3: handle on firms that have just opened and very little
Speaker 3: handle on firms that have just closed. So they use
Speaker 3: something called the birth death adjustment to adjust for employment
Speaker 3: by those latter two categories of firms, you know, net
Speaker 3: job creation from new firms minus closing firms. And the
Speaker 3: problem is that they have a very simple model. And
Speaker 3: it was fine in the past when all you cared
Speaker 3: about was the direction, but now when you're saying it
Speaker 3: really matters if NFP gross is fifty. Having a bias
Speaker 3: in that number really affects things. And what you see
Speaker 3: is that that number has through thickened sin has stayed
Speaker 3: about one hundred thousand jobs. You know when you seasonally
Speaker 3: adjust it, because they publish a not seasonal adjustment, but
Speaker 3: you can do a rough and ready seasonal adjustment very
Speaker 3: stable at about every month. One hundred thousand jobs or
Speaker 3: almost one hundred thousand jobs are coming from that birth
Speaker 3: death adjustment. In terms of what we see on Bloomberg
Speaker 3: page Friday morning at eight thirty, we have another source
Speaker 3: of information on that which lags but which is far
Speaker 3: more accurate. This is something called the Business Employment Dynamics.
Speaker 3: It lags by about eight months, but it's based on
Speaker 3: the quarterly census of employment and wages. And what that
Speaker 3: shows is that in twenty twenty four, like Q four,
Speaker 3: twenty twenty four stay to four quarters, both the employment
Speaker 3: growth coming from continuing firms and continuing operation and the
Speaker 3: employment growth from newly open firms let's just closed firms
Speaker 3: they've tanked. So you're sort of looking at a reliable
Speaker 3: source because it's not even a sample. This is the
Speaker 3: entire population. They know what opened and what's closed, saying, hey,
Speaker 3: there just isn't any significant jobs creation from newly formed firms,
Speaker 3: and the and the p number keeps telling you that
Speaker 3: there's one hundred thousand jobs coming from that.
Speaker 1: This is already excellent. Next week we are getting yet
Speaker 1: another one of these QC quarterly.
Speaker 3: Q what do you call it? I call it what
Speaker 3: I call QCW.
Speaker 1: Okay, we get a new qce W. That's the ninth,
Speaker 1: September ninth, We get that, right, tell us what this is.
Speaker 1: Let's walk through this part again in terms of what
Speaker 1: is it that's high quality about this data, why we
Speaker 1: expect it to show further downward revisions, and why there
Speaker 1: continues to be the sort of downward bias in this
Speaker 1: initial snapshot vers letter better insight.
Speaker 3: Oh okay, First, NFP has a big sample, but it's
Speaker 3: a sample. They're sampling errors and people who don't report,
Speaker 3: and you don't know if there's a bias and who's
Speaker 3: reporting who's not reporting, so there's always some inherent error there.
Speaker 3: Qc W is basically the universe. It's not a sample.
Speaker 3: They get administrative data from the Labor Department saying how
Speaker 3: many people paid in the unemployment insurance and that's basically everybody,
Speaker 3: because everybody does everybody who's working does pay unemployment insurance.
Speaker 3: And and so when they come up with a number,
Speaker 3: there's a bit of revision because there's sometimes some firms
Speaker 3: don't report in time, but there's not much and that
Speaker 3: it's very authoritative. And so if you sort of say, oh,
Speaker 3: QCW and the Business Employment Dynamics tell us that in
Speaker 3: twenty twenty four there was almost no job creation from
Speaker 3: newly opened let's just close firms, you believe it because
Speaker 3: there's you're not going to get a better source. There's
Speaker 3: no other source to that, and so that's why it's
Speaker 3: used for the benchmark. It probably should be used to
Speaker 3: re benchmark employment more frequently in the year because they
Speaker 3: do publish it quarterly. But you know, when it comes out,
Speaker 3: it's a big deal. And we think it's likely to
Speaker 3: tell us that somewhere between seven hundred and fifty and
Speaker 3: maybe one point one million jobs that's the overstatement between
Speaker 3: Q one twenty twenty four and Q one twenty twenty five,
Speaker 3: and that will knock off a lot in terms of
Speaker 3: headline employment growth. The key point is that there's no
Speaker 3: reason to believe that the bias is really shifted.
Speaker 2: One of the other unusual things that's going on at
Speaker 2: the moment is we have this new head of the
Speaker 2: BLS installed by the Trump administration, and that new head
Speaker 2: suggested initially that the BLS could just stop publishing jobs
Speaker 2: numbers altogether, or maybe they could publish them less frequently,
Speaker 2: like on a quarterly basis or something. Is the quarterly idea.
Speaker 2: Maybe that's reasonable given the lag with the QCW data.
Speaker 3: I think that they can do things that are far
Speaker 3: less dramatic to improve the quality of the monthly numbers
Speaker 3: because we do have some information that's relevant for jobs
Speaker 3: creation by newly opened firms. Going back to business employment dynamics,
Speaker 3: if you look at how job creation from existing firms,
Speaker 3: continuing firms, and job creation from new firms move, they
Speaker 3: tend to move together. The amplitude is different, but the
Speaker 3: direction is very much the same. They can use the
Speaker 3: sample data that they get from the one hundred and
Speaker 3: sixty thousand firms six hundred thousand plus establishments that they
Speaker 3: sample and say, look, if continuing firms are telling us
Speaker 3: the job creation is twenty thousand a month, it's very
Speaker 3: unlikely that job creation from new firms is going to
Speaker 3: be one hundred. We can use a variety of statistical
Speaker 3: methods to sort of make a guesstimth. It won't be perfect,
Speaker 3: they will be a luck better.
Speaker 2: Speaking of the new BLS person, Joe, I saw the
Speaker 2: most worrying sentence in an analyst note.
Speaker 1: Yesay, so.
Speaker 2: The sentence was, I have it on my screen. The
Speaker 2: sentence is because Trump has his own BLS person. Now
Speaker 2: I don't necessarily see a bad number on Friday.
Speaker 1: I don't know that pessimistic. I think, I don't know,
Speaker 1: but I don't know. I don't have a view of
Speaker 1: I don't have a view on this. But who said this?
Speaker 2: I don't want to say, because I'm not sure it's
Speaker 2: public or not.
Speaker 1: But this is a notable person.
Speaker 2: Yes, it's someone you know?
Speaker 1: Actually okay? Fine? And not me okay, and not Steve,
Speaker 1: not Stephen, let's talk about the conversation has focused on
Speaker 1: these levels and pace of job creation and so forth.
Speaker 1: We recently did an episode with Austin Goilsby, the Chicago
Speaker 1: Fed President, and he was like, so much as a flux,
Speaker 1: I'm not really looking at levels, And he called what
Speaker 1: he's like he use this term very dramatic, the four
Speaker 1: horseman of truth. He's interested in rates. He's interested in
Speaker 1: the unemployment rate, which is still at four point two percent.
Speaker 1: He's interested at the hiring rate, which we had the
Speaker 1: Jolt support come out this week, it's at three point
Speaker 1: three percent. He's interested in the firing rate, which I
Speaker 1: think has still been fairly low. Maybe he's looking at
Speaker 1: like the rate of wage growth. I don't remember what
Speaker 1: the fourth horseman was in a time of volatility. What
Speaker 1: do you think about this idea, like, let's just forget
Speaker 1: about levels and just focus on rates because they don't
Speaker 1: get revised as much. You go out and you ask
Speaker 1: thousands of people are you employed or onmployed right now?
Speaker 1: And if four point two percent say they're unemployed, that
Speaker 1: is probably a reasonable proxy for whether people are employed
Speaker 1: or not.
Speaker 3: Right But Joe, if you turned out to be the
Speaker 3: next person named to the flumc to board and you
Speaker 3: see payroll number, it comes out at seventy five thousand,
Speaker 3: like tomorrow's consensus. Is that a strong number or a
Speaker 3: week number?
Speaker 1: Well, there's some siting. I just look at the I
Speaker 1: don't know, I mean, I don't know let's say so
Speaker 1: right now, just for what it's worth, the unemployment rate
Speaker 1: is at four point two percent. Economists expected to tick
Speaker 1: up to four point three percent. Let's say it comes
Speaker 1: in four point two percent. Let's say we have a
Speaker 1: week NFP number, but the unemployment rate stays at four
Speaker 1: point two percent. Why don't I say, okay, things are
Speaker 1: still more or less fine?
Speaker 3: Well, let me say this. I like grates, but I
Speaker 3: like the employment the population ratio. Okay, because we know
Speaker 3: that participation rate is cyclical, and if you look to
Speaker 3: the employment the population ratio, all these comments that unemployment
Speaker 3: rate is stable and it looks in balance nothing's changed,
Speaker 3: they don't hold up very well. We've had pretty consistent drop,
Speaker 3: not a two thousand and eight type of drop, but
Speaker 3: you know, it's like over sixty a year ago, now
Speaker 3: it's fifty nine point six. It's telling us that there's
Speaker 3: kind of increased softening. I think you can't be choosy
Speaker 3: about which rates you look at, but I think in
Speaker 3: cyclical periods, probably employment to population is telling you more.
Speaker 3: In this time, it is more on Waller's side than
Speaker 3: it is on Powell side.
Speaker 2: I know we've been talking about weaknesses in the NFP estimates,
Speaker 2: But what's your expectation for the official number?
Speaker 3: Well, I wrote, we're a little bit split brained on
Speaker 3: this left brain, right brain, because we live in a
Speaker 3: world where we have to get the market reaction right.
Speaker 3: So our forecast is seventy five thousands, very close to consensus.
Speaker 3: You know, nothing dramatic. I'd just say this that you've
Speaker 3: got to realize there's so much randomness in the number.
Speaker 3: It could be one hundred and twenty five thousand and
Speaker 3: not be meaningful. But it's just the way it goes.
Speaker 3: You know what. We've argued. If you get the range
Speaker 3: of forecasts, almost everybody is between like forty thousand and
Speaker 3: one hundred thousand, one hundred and five thousand. So you
Speaker 3: get a number like thirty, I think that will be
Speaker 3: a very dramatic number in.
Speaker 2: Terms of outside the range of expectation.
Speaker 3: Yeah, I mean, because this range is really tight in
Speaker 3: terms of market expectation. And I think it would put
Speaker 3: fifty on the table for the FED, because I think
Speaker 3: the argument would be that if you get a number
Speaker 3: that's so low, you probably should have cut in June
Speaker 3: or July, and so you're not saying, oh my god,
Speaker 3: the world's coming to an end. Everything's falling apart. But
Speaker 3: you're saying, yeah, well, we kind of missed it. The
Speaker 3: data weren't there at the time. In retrospect, had we
Speaker 3: had those data, we probably would have cutt in June
Speaker 3: or July. So we're just doing catch up now. Now.
Speaker 3: For us, the real issue is how to interpret like
Speaker 3: one hundred thousand, because we would say, okay, one hundred
Speaker 3: thousand less, our bias of seventy thousand means real job
Speaker 3: creation of thirty thousand, so you should be talking about fifty.
Speaker 3: I don't think we've convinced the market yet that that's
Speaker 3: the way you should look at it.
Speaker 1: By the way, just before going on so on the
Speaker 1: ECO page consensus is seventy five K. Consensus is for
Speaker 1: the unemployment rate to tick up to four point three percent.
Speaker 1: Also average our early earnings of point three percent month
Speaker 1: of a month growth, so that's sort of like what
Speaker 1: we're looking at this week. We've had some sort of
Speaker 1: soft data. We had initial claims today come in at
Speaker 1: to thirty seven k. That was ahead of the estimate
Speaker 1: of to thirty k. ADP employment take it or leave
Speaker 1: it fifty four k versus estimates of sixty eight k,
Speaker 1: down significantly from the one hundred and six k revised
Speaker 1: last month. I had some services employment forty six point
Speaker 1: five that was a little bit shy of expectations, so soft,
Speaker 1: and there's this risk of softening. I just think it's
Speaker 1: really interesting the range of possibilities for September, because you know,
Speaker 1: we were just in Jackson Hole and you're talking about, oh,
Speaker 1: maybe there's a case for fifty. But there's also still
Speaker 1: a lot of residual concern about inflation, and the inflation
Speaker 1: dragon has yet to fully be slayd.
Speaker 3: The reason I would focus on the labor market is
Speaker 3: because if it's as weak as we think it is,
Speaker 3: in correctly measure the slack in the labor market what
Speaker 3: they care of inflation. Okay, that the again I'm serve
Speaker 3: more on Waller's side, that you're not going to have
Speaker 3: any kind of power on the labor side. If I
Speaker 3: can make one comment, I mean, some people get their
Speaker 3: pleasure from banging their head against the wall. The walle
Speaker 3: I bang my head against once or twice a year
Speaker 3: is taking all of these incoming data on labor market
Speaker 3: indicators and trying to predict nonfarm payrolls.
Speaker 2: You've got to have a hobby.
Speaker 3: You got to have a hobby, and this one might
Speaker 3: be the definition of insanity. And none, none of them
Speaker 3: work a bucket of spit.
Speaker 1: I'm looking at the band daid on your forehead. When
Speaker 1: you talk about head against the wall for pleasure, you're
Speaker 1: actually talking literally.
Speaker 3: It would appear, well, you should see the wall.
Speaker 2: Okay, okay. We would be remiss if when we have
Speaker 2: you in the studio, if we did not ask about
Speaker 2: what's going on with bonds. So one of the things
Speaker 2: that's happening today is because of that softening jobs data
Speaker 2: that Joe just laid out, we are seeing a little
Speaker 2: bit of a recovery in bond because there's more expectation
Speaker 2: that the Fed might cut. But the big story in
Speaker 2: recent days has been this huge sell off in bonds,
Speaker 2: particularly at the long end. And it doesn't particularly in Europe,
Speaker 2: particularly in Europe, but also in the US. It does
Speaker 2: seem kind of weird that we're talking about the economy
Speaker 2: is slowing and meanwhile the long end of the curve
Speaker 2: just keeps going up. What's going on.
Speaker 3: Market's attention span is maybe not as long as you
Speaker 3: give it credit for. And I think the problem is
Speaker 3: this that you look at fiscal situations that are deteriorating
Speaker 3: globally and likely to deteriorate in the US, especially if
Speaker 3: anything happens with the tariffs to pull them back, and
Speaker 3: markets are kind of saying, look, in the long term,
Speaker 3: this doesn't look good. It looks like there's a lot
Speaker 3: of borrowing out there. But the long term in market terms,
Speaker 3: can be six weeks and it can be six years.
Speaker 3: You don't know when those forces are going to matter,
Speaker 3: so absent anything else, the market pays attention to it.
Speaker 3: Then you sort of come in this week and every
Speaker 3: number seems to be soft. You say, oh my god,
Speaker 3: if Fed's going to cut, and all of a sudden,
Speaker 3: this sort of selling of bonds, especially because the market
Speaker 3: probably got reasonably short worrying itself about the fiscal situation,
Speaker 3: they say, oh my god, maybe not so short, and
Speaker 3: people are buying back the bonds that they've sold, and
Speaker 3: you get the kind of dramatic movement we've seen this week.
Speaker 3: We've argued in the short term, both facts and bonds
Speaker 3: are going to be driven by the FED and the
Speaker 3: US economy, and by short term I mean the next month.
Speaker 3: They're six weeks I think once you get past that,
Speaker 3: we don't think inflation is going to disappear. And even
Speaker 3: outside of the tariff induced inflation, there's non tariff goods
Speaker 3: and services seem to be at best stays steady and
Speaker 3: maybe even edging up a bit. There's a bit of
Speaker 3: fysical stimulus in Trump's fiscal package. Tickets possible that the
Speaker 3: economy is not as bad as it might look based
Speaker 3: on the employment numbers that we're getting, especially if there
Speaker 3: is a productivity pickup in the data that's not really recognized.
Speaker 3: So we see a possibility, or we actually see more
Speaker 3: than a possibility. We expect dollar weakness in the next
Speaker 3: couple of weeks, but by the time we get to
Speaker 3: the end of the year, we could see the dollar strengthening.
Speaker 3: Positioning is kind of short dollars in our view, and
Speaker 3: same with the bond market. You know, while the market
Speaker 3: served saying, oh my god, last week was debating zero
Speaker 3: on twenty five, this week, I suspect they'll be debating
Speaker 3: twenty five and fifty. While the market's debating that bond
Speaker 3: yields are going to come down. Once that's kind of
Speaker 3: settled in terms of market expectations, I think they'll look
Speaker 3: at the fiscal picture and kind of say, you know,
Speaker 3: low four is maybe not.
Speaker 1: It's interesting it occurs to me when you say, how
Speaker 1: when we talk about how bad the economy is, that
Speaker 1: there's actually two different ways of what bad could mean.
Speaker 1: So one is bad could just mean a sort of
Speaker 1: where you are on the cycle. We're in a deceleration cycle.
Speaker 1: We're not creating as many jobs. Therefore we have to
Speaker 1: have a lower rate of interest to get the going again.
Speaker 1: But then bad could also mean more sort of qualitatively,
Speaker 1: where what's really bad is slackening growth and also a
Speaker 1: firm inflation picture, such that traditional measures of policy stimulus
Speaker 1: or de stimulus don't work as well they'd like because
Speaker 1: there is some sort of deeper rot. And it sounds
Speaker 1: like what you're saying, if I can put all of
Speaker 1: this together, is that cyclically there's a slowdown. There may
Speaker 1: be a case for fifty basis point cut very soon,
Speaker 1: a case for lower rates, but not so bad in
Speaker 1: the case of the US economy is broken and therefore
Speaker 1: policy measures won't work to get it revived again.
Speaker 3: Yeah, I think that's right. We actually don't think they'll
Speaker 3: do much more than fifty. They'll say, okay, we've caught
Speaker 3: up pint to weight and see and our baseline because
Speaker 3: we're not yet sure about what the employment number is
Speaker 3: is twenty five and stop. But you know we've been
Speaker 3: talking about the choice being between twenty five and.
Speaker 1: Fifty, just adding around one more. It really is just
Speaker 1: on the Europe situation. We mostly talk about the US.
Speaker 1: Like France has also so their ten year year old
Speaker 1: has been shooting higher.
Speaker 2: Yeah, this is the crazy thing. I think if we
Speaker 2: didn't have everything that was going on in the US
Speaker 2: at the moment, the France story would be huge in
Speaker 2: the market.
Speaker 1: Yeah, so give us your talk to us about Europe
Speaker 1: for a minute.
Speaker 3: Yeah, look, there's a France story. I'm actually scheduled to
Speaker 3: go to France, but it looks like they might be
Speaker 3: on strike next week, so I'm not sure how that's
Speaker 3: going to play out. The structural problems that they face
Speaker 3: are kind of enormous. I mean, the French deficits about
Speaker 3: as large as the US deficit, and their interest rates
Speaker 3: are way lower than US interest rates. They have a
Speaker 3: very fragile government. They're trying to do some sort of
Speaker 3: fiscal consolidation because it's like it's not just a minority.
Speaker 3: It's like a tiny government. The opposition parties are kind
Speaker 3: of saying no way. And so that's setting the US
Speaker 3: aside the French, and broadly speaking, the European situation isn't
Speaker 3: that good. And in some cases you're seeing sterling trade
Speaker 3: like an emerging markets economy in that the correlation of
Speaker 3: interest rates in the currentrency it is not the normal
Speaker 3: g TN one where higher rates lead to a stronger
Speaker 3: currency because people look at the return, the higher rates
Speaker 3: are viewed as risk premium and they're associated with a
Speaker 3: weaker currency.
Speaker 1: I mean, yeah, you can look at levels sorry just
Speaker 1: to go. You can look at levels of debt to
Speaker 1: GDP or ratios, et cetera. But it sounds like the
Speaker 1: common thread here, at least to me. And this is
Speaker 1: the bias or this is my legs. When you talk
Speaker 1: about what's going on in French, maybe you won't even
Speaker 1: be able to visit there because of strike. When you
Speaker 1: talk about we had Liz Trust on the podcast recently. Politically,
Speaker 1: these are not well functioning polities right now, are they?
Speaker 3: Yes? And I'd say that the ability, particularly to get
Speaker 3: through unpopular measures like fiscal consolidation is very limited and
Speaker 3: That's why they're all sort of have their backs against
Speaker 3: the wall, and the markets are looking at this and
Speaker 3: kind of saying, you don't really have a source of
Speaker 3: growth and you have to do austerity, but you're not.
Speaker 3: So we're looking at these ratios and where they're going
Speaker 3: to go. I think the one advantage the US has
Speaker 3: is that here you know, at least you can ask
Speaker 3: tell the story where you say, look, some of the
Speaker 3: productivity numbers look pretty good on the ground, the sense
Speaker 3: that AI is making inroads. We don't know when it's
Speaker 3: going to matter in terms of actual realized productivity, but
Speaker 3: it could. You can tell the story that's somewhat optimistic,
Speaker 3: Whereas if you look at Europe, they kind of have
Speaker 3: They have high energy costs, their capital markets aren't as
Speaker 3: well developed for financing these kind of innovative firms, and
Speaker 3: they're kind of lagging on the technology side. So the
Speaker 3: battle seems to be between the US and China and
Speaker 3: other countries sort of really lagging, which doesn't mean the
Speaker 3: US outcome is going to be great, but at least
Speaker 3: you can tell the story, whereas it's much harder to
Speaker 3: tell the story a European story of say private sector
Speaker 3: induced growth.
Speaker 2: What's that line again, Joe. It's like the US innovates,
Speaker 2: China iterates, and Europe writes the regulation. Can you remember that?
Speaker 3: Yeah?
Speaker 1: And they also get tons of vacation and they have
Speaker 1: this amazing life.
Speaker 2: And put out think piece.
Speaker 1: Yeah, but which sounds great. So many people would kill
Speaker 1: for a job writing.
Speaker 3: I lived in France for a number of years, and
Speaker 3: I'd say the quality of life of the median French
Speaker 3: workers well above that of the media and US worker.
Speaker 1: That's what I'm saying. We need to have some This
Speaker 1: is an important point.
Speaker 3: You observe that, yeah, Yeah, and the question is whether
Speaker 3: it's sustainable. It's like living on your credit card.
Speaker 1: But need to regulate more. We need to instead of innovating,
Speaker 1: let's try regulatet.
Speaker 2: No, we should go we should go drink some wine
Speaker 2: for lunch.
Speaker 3: Yeah, sounds great, great suggestion.
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