WEBVTT - Single Best Idea with Tom Keene: Chris Whalen and Chuck Clough

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio News, Single Best Idea. Thank

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<v Speaker 1>you for the response. Really humbled. It's it's just amazing.

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<v Speaker 1>I thought it would take months and months and months

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<v Speaker 1>to chart, and we actually are charting within the podcast world.

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<v Speaker 1>And I really don't understand the new podcast world. You know,

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<v Speaker 1>Joe Rogan is no threat for me. I'm just not

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<v Speaker 1>going to do it. Joe Rogan on you. But the

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<v Speaker 1>I was humbled by the charting that we see. We're

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<v Speaker 1>under business and business news at Apple Podcast. We're working

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<v Speaker 1>our way forward. Where'd you get Eric? Where'd you get

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<v Speaker 1>the photo of me on the chick lit? Was that

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<v Speaker 1>the police lineup in nineteen seventy three? Something like that. Anyways,

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<v Speaker 1>we're having fun with Single Best Idea.

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<v Speaker 2>What is it?

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<v Speaker 1>It's two ideas from a three hour show. I do

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<v Speaker 1>some chit chat on it. It's six or seven minutes

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<v Speaker 1>to add to your busy Apple podcast day. Charlie Klow

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<v Speaker 1>is a legend. We'll talk about that in a moment,

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<v Speaker 1>but we had another legend in today. Chris Whalen. I'm

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<v Speaker 1>going to say a decade ago, twelve years ago, wrote

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<v Speaker 1>a single volume called Inflated, and it was a curative

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<v Speaker 1>Force Financial history of the United States of America. He's

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<v Speaker 1>in heavy rewrite on it right now. This fall we

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<v Speaker 1>will see a new inflated from Chris Whalen. It'll be

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<v Speaker 1>immediate required read by Global at Wall Street. And he's

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<v Speaker 1>been on fire, you know him out on Twitter with

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<v Speaker 1>all he's doing, and he's been absolute on fire on

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<v Speaker 1>banking safety, on commercial real estate in the rest. Here

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<v Speaker 1>is Christopher Whalen of Whalen Global. Here he is. And

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<v Speaker 1>you gotta buy the biggest best stocks.

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<v Speaker 3>The way I look at banks. You know, we published

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<v Speaker 3>some bank indices earlier this year and we weighted quality

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<v Speaker 3>versus size. Now you can't ignore size. But my attitude

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<v Speaker 3>is if you want to be safe with banks, you

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<v Speaker 3>want to own the top twenty five out of the

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<v Speaker 3>top one hundred. So that's a pretty harsh cut. But

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<v Speaker 3>whether you care about income or alpha, you want to

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<v Speaker 3>know where the good ones are. And so for example,

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<v Speaker 3>we just wrote a piece about Banko's George Gleeson. Well,

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<v Speaker 3>George is a little bank, but he produces a lot

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<v Speaker 3>of construction and development loans. People make the mistake of

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<v Speaker 3>thinking he's in commercial real estate lending. He's not. He

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<v Speaker 3>lends in the beginning of the life cycle of the asset.

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<v Speaker 3>Then he gets out very smart.

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<v Speaker 1>Chris Waylan there Damien Sas are helping out here on

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<v Speaker 1>a Friday. We try to get Katie greifeld in, but

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<v Speaker 1>she was it was something at the horse, you know,

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<v Speaker 1>I don't know the horse or whatever. And Paul Sweeney's

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<v Speaker 1>got the Gulf Stream. So we had Damiens Sasa and

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<v Speaker 1>of course the markets are really on the move. We

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<v Speaker 1>had a huge jump condition on the geopolitics. Brent Crude

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<v Speaker 1>out the ninety two A print of ninety two Dxyzer

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<v Speaker 1>one oh six show Stronger resilient US dollars, something that

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<v Speaker 1>mister Whalan spoke about, and it synthesizes what invented or

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<v Speaker 1>how we invented Bloomberg surveillance. So how do we do that?

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<v Speaker 1>We did it off the legends. Trust me, folks, you

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<v Speaker 1>know I was borrowing stealing from everybody every day. Ed

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<v Speaker 1>Hyman at c J Lawrence, Eddie Yar, Denny as well

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<v Speaker 1>at CJ Lawrence, a guy named Farrell at Mary Lynch

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<v Speaker 1>with a young Turk, David Rosenberg and Richard Bernstein at

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<v Speaker 1>Merrill Lynch. So you say, well, that's all great, but

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<v Speaker 1>where was this invented? Charles Klow is giant, and right

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<v Speaker 1>now it's like we really want to hear from Charlie Klow.

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<v Speaker 1>He wants to be in the market, he wants to

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<v Speaker 1>participate with a new productivity of the American experiment. But

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<v Speaker 1>more than anything, it's Charlie Klow saying, try to remove

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<v Speaker 1>yourself from the strategy babble and get back to first principles.

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<v Speaker 1>Here's Charles Clow on productivity.

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<v Speaker 2>I think there's two things that really prop up equities

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<v Speaker 2>as we look through the rest of the decade, and

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<v Speaker 2>of course I'm looking beyond this. One is productivity. Productivity

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<v Speaker 2>is clearly driving profits and disinflation, which has been going

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<v Speaker 2>on for forty years. It was interrupted a bit by

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<v Speaker 2>the COVID response and the liquidity that was thrown into

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<v Speaker 2>the economy from that standpoint, but I think when you

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<v Speaker 2>look at how things looked longer term, remember interest rates

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<v Speaker 2>and inflation came down for forty years and then of

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<v Speaker 2>course COVID interrupted. So the question is what were the

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<v Speaker 2>reasons they came down and are those reasons still good?

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<v Speaker 2>And I think the reasons are largely demographics. What balance

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<v Speaker 2>chefs look like in the private sector, which are still

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<v Speaker 2>pretty large and heavily liability oriented, and thirdly productivity those

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<v Speaker 2>are still there, so we think that disinflation and interest

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<v Speaker 2>rates continues.

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<v Speaker 1>Charles Klow Forever of Boston and Colonial g Charles Klow

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<v Speaker 1>always with Meryll Lynch. I want to point out two

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<v Speaker 1>different kinds of interview contrasts on Bloomberg surveillance this week.

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<v Speaker 1>The first one is at Gina Martin Adams of Bloomberg Intelligence.

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<v Speaker 1>She was on fire yesterday using fundamental and technical analysis

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<v Speaker 1>to say she's really not sure about the banks. And

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<v Speaker 1>we saw JP Morgan trade off here over two standard

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<v Speaker 1>deviations this morning. And at the same time you've got

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<v Speaker 1>someone like Chris Whalen saying we're really not sure about

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<v Speaker 1>the banks, coming from a totally different world. And I

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<v Speaker 1>think this is really important to listen to different kinds

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<v Speaker 1>of guests and whether they come to the same conclusion.

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<v Speaker 1>And the other way to look at this, as we

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<v Speaker 1>saw yesterday on single best idea, is Dennis Gartman and

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<v Speaker 1>Ian Lingen coming to a completely opposite conclusion of where

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<v Speaker 1>the ten year yield will go and what rates will do,

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<v Speaker 1>and of course what the thirty year mortgage will do.

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<v Speaker 1>Gartman's looking for some persistency of higher rates if in

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<v Speaker 1>need a breakthroughout to some new regime of higher rates,

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<v Speaker 1>and Ian Lingoln's got the call of the year if

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<v Speaker 1>it happens out. He looks for the ten year yield

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<v Speaker 1>to drive under four percent. It's been a wonderful week

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<v Speaker 1>thanks to the surveillance team, and all I can say

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<v Speaker 1>is single best idea look for us on Apple car

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<v Speaker 1>play on YouTube under Bloomberg Podcasts, and single best idea

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<v Speaker 1>always on Apple Podcasts.