WEBVTT - Single Best Idea: Nouriel Roubini & Jim Bianco

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>It is surveillance. Single best idea and the best idea

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<v Speaker 2>today was to get to the March twentieth FED meeting.

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<v Speaker 2>Of course, of the jobs report. We've got that on Friday.

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<v Speaker 2>A lot of economic data this week, but clearly jobs

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<v Speaker 2>report front and center. What's interesting here in the last

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<v Speaker 2>number of weeks with his boom inequities, what a moonshot

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<v Speaker 2>on Nvidia today as well to open up trading. And

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<v Speaker 2>the basic idea is, well, the FED talk, the parlor

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<v Speaker 2>talk that's moved aside as we've all been shocked by

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<v Speaker 2>the success in American equity, is the success in American technology.

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<v Speaker 2>We focus back on the FED today and I want

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<v Speaker 2>you to listen to This is from Nourro Rabini, Professor

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<v Speaker 2>Emeritis at NYU. And what's so important here is this

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<v Speaker 2>was the most optimistic Nora Rabini Damian Sasa hour and

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<v Speaker 2>I've heard in ages.

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<v Speaker 3>And I would say that paradoxically, the biggest risk today

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<v Speaker 3>to the market is actually is a case of no

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<v Speaker 3>landing where growth could continue to be above potential. And

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<v Speaker 3>why it's going to be inactive for the markets because

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<v Speaker 3>if growth remains above potential. The FAT is not going

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<v Speaker 3>to cut rates starting the middle of the year, is

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<v Speaker 3>not going to cut rates three times this year. They

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<v Speaker 3>could cut on it two one, maybe even zero, and

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<v Speaker 3>I would say, paradoxically, the best news for the economy

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<v Speaker 3>maybe the worst use for the market. So we've gone

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<v Speaker 3>from hard landing to bumpy to soft to maybe no landing.

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<v Speaker 2>Nor Rabini mega threats. This is wonderful and readable book.

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<v Speaker 2>What are coming on here, folks is simple. The one

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<v Speaker 2>single word is ambiguity, and that if you get resilient rates,

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<v Speaker 2>you can cut both ways. I guess if rates go up,

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<v Speaker 2>that's bad for all of us because things are more

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<v Speaker 2>expensive than nominal rates higher supposedly the inflation adjusted rate

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<v Speaker 2>is higher. But also maybe rates go up because the

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<v Speaker 2>economy is better than expected. And the keyword is ambiguity.

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<v Speaker 2>I can't say enough about that. I would pull that

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<v Speaker 2>all the way back to in the media macroeconomic blah

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<v Speaker 2>blah blah, which typically is not founded on microeconomic foundations,

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<v Speaker 2>or just simply have you done your microeconomics to enrich

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<v Speaker 2>your study of the bigger picture. Trust me, somebody like

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<v Speaker 2>Nora Orbini has done that. So the number one thing

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<v Speaker 2>I would say in this study is ambiguity is absolutely

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<v Speaker 2>a front and center. Now, I want to bring that

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<v Speaker 2>over to one of our other guests today, Jim Bianco's

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<v Speaker 2>in Chicago, hugely read, particularly out on social media, real

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<v Speaker 2>LinkedIn presence as well, and Jim Bianco holistically bringing in

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<v Speaker 2>what I talk about economics, finance, investment, and international relations.

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<v Speaker 2>And what's so important about mister Bianco's work is so

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<v Speaker 2>when he makes a statement, he monitors it and stays

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<v Speaker 2>with it. Tell the facts change, and then Jim Bianco changes.

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<v Speaker 2>Nine months ago, a year ago, Jim Bianco said, you know,

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<v Speaker 2>the disinflationary tendency out there may not happen, and he

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<v Speaker 2>was one of the first people to call for higher

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<v Speaker 2>resilient rates or even that they would move higher from

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<v Speaker 2>the trend at the time that was down. A lot

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<v Speaker 2>of people have joined Jim Bianco with that now and

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<v Speaker 2>that goes back to the ambiguity and what doctor Rubini

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<v Speaker 2>talked about, which is the idea, if we get a

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<v Speaker 2>Jim Bianco resilient rate, what does that mean for our

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<v Speaker 2>real GDP? And if you had on inflation, what does

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<v Speaker 2>that mean for our top line nominal GDP? Our animal spirits.

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<v Speaker 2>Here's Jim Bianco.

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<v Speaker 1>Yeah, it's on my headstone right now, because I've got

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<v Speaker 1>three percent on inflation, two and a half percent on

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<v Speaker 1>nominal GDP, two and a half percent on growth real growth,

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<v Speaker 1>three percent of inflation, five and a half on nominal GDP,

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<v Speaker 1>and ultimately I think that that's where interest rates are

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<v Speaker 1>going to go. It's to five and a half percent.

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<v Speaker 1>It's on my headstone that everybody's freaking out that the

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<v Speaker 1>rates could go that high. I think they can and

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<v Speaker 1>they won't break anything if they get that high. That's

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<v Speaker 1>the part that everybody seems to miss about that call.

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<v Speaker 2>Jim Bianco there talking with us earlier today, really spirited conversation.

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<v Speaker 2>Of course, all of that's out on Apple CarPlay on YouTube.

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<v Speaker 2>Thrilled to the result. This is a big experiment. I mean,

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<v Speaker 2>a fossil like me. I mean, I remember when the

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<v Speaker 2>world stopped for gun smoke, you know, on Thursday night.

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<v Speaker 2>Forget about that. YouTube's the modern thing. We're going there

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<v Speaker 2>out on Bloomberg Podcasts and with Jim Bianco there, and

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<v Speaker 2>he's been right. Rates are resilient. Rates are higher the

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<v Speaker 2>ten year inflation adjusted yield as a measurement. I use

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<v Speaker 2>one point eight eight percent. If we have a high

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<v Speaker 2>or more resilient economy and more resilient rates, isn't that good?

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<v Speaker 2>And that's the arch social question tying in what doctor

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<v Speaker 2>Rubini's talking about with new optimism and what Jim Bianco's

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<v Speaker 2>talking about. And again, as Paul Sweeney has said, you

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<v Speaker 2>have to go back to say the senator from Massachusetts,

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<v Speaker 2>Senator Warren who's saying, wait a minute, a better economy

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<v Speaker 2>forming jobs is bad. And that's the arch conundrum that

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<v Speaker 2>we face. There's no question about this. We are thrilled

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<v Speaker 2>with this new effort. It is surveillance single best idea.

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<v Speaker 2>That's you know, the sellside by Hotel Quick, Dana Telsey,

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<v Speaker 2>what's your single best idea? Okay, that's where it comes from.

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<v Speaker 2>But for us, it's the enriched ideas of all of

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<v Speaker 2>our guests here across economics, finance, investment, and international relations.

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<v Speaker 2>Don't forget Live seven to ten am. Bloomberg Surveillance, Tom

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