1 00:00:02,640 --> 00:00:05,320 Speaker 1: Welcome to the Bloomberg Penl podcast. I'm Paul swing you 2 00:00:05,360 --> 00:00:07,680 Speaker 1: along with my co host Lisa Brahma Waits. Each day 3 00:00:07,720 --> 00:00:10,240 Speaker 1: we bring you the most noteworthy and useful interviews for 4 00:00:10,280 --> 00:00:12,520 Speaker 1: you and your money. Whether at the grocery store or 5 00:00:12,560 --> 00:00:15,480 Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple 6 00:00:15,520 --> 00:00:17,960 Speaker 1: podcast or wherever you listen to podcasts, as well as 7 00:00:17,960 --> 00:00:21,360 Speaker 1: at Bloomberg dot com. Well, we are so lucky because 8 00:00:21,520 --> 00:00:23,160 Speaker 1: we have a Max needs to be here with us. 9 00:00:23,320 --> 00:00:25,480 Speaker 1: And the reason why Max, we really wanted to talk 10 00:00:25,520 --> 00:00:27,480 Speaker 1: with you was because we love talking with you. You You 11 00:00:27,600 --> 00:00:31,720 Speaker 1: cover healthcare for Bloomberg Opinion, but because Ford is in 12 00:00:31,800 --> 00:00:35,519 Speaker 1: discussions with its union over the cost the the surging 13 00:00:35,640 --> 00:00:39,199 Speaker 1: costs of healthcare. And the reason why this was interesting 14 00:00:39,360 --> 00:00:44,040 Speaker 1: this comes the potential bill is likely going to exceed 15 00:00:44,080 --> 00:00:46,680 Speaker 1: one billion dollars for the first time next year. So 16 00:00:46,720 --> 00:00:50,320 Speaker 1: this is this a huge cost. But it's not alone 17 00:00:50,560 --> 00:00:52,199 Speaker 1: that Ford is dealing with it. This is something that 18 00:00:52,240 --> 00:00:54,200 Speaker 1: a lot of companies are dealing with. Can you just 19 00:00:54,280 --> 00:00:56,720 Speaker 1: first frame the issue of just how big of an 20 00:00:56,760 --> 00:01:00,160 Speaker 1: issue health care is? Using forward as a lens are 21 00:01:00,200 --> 00:01:03,160 Speaker 1: Absolutely so. So it's definitely an issue for for just 22 00:01:03,240 --> 00:01:07,720 Speaker 1: about any large employer. Growing healthcare costs, growing drug costs, 23 00:01:08,080 --> 00:01:11,759 Speaker 1: you know, prices and spending continue to rise, although at 24 00:01:11,760 --> 00:01:14,919 Speaker 1: a slightly lower rate than than people forecast in the past. 25 00:01:15,400 --> 00:01:19,240 Speaker 1: But it's particularly acute for Ford and other companies that 26 00:01:19,319 --> 00:01:24,240 Speaker 1: have large union workforces because those unions negotiated, basically having 27 00:01:24,280 --> 00:01:28,920 Speaker 1: negotiate over time, really incredibly generous health coverage, you know, 28 00:01:29,000 --> 00:01:34,760 Speaker 1: basically more generous than than just about anyone else gets anywhere. Um. 29 00:01:34,920 --> 00:01:36,920 Speaker 1: And then kind of the point of contention this time 30 00:01:37,000 --> 00:01:40,039 Speaker 1: is that while those union workerss gave up on a 31 00:01:40,080 --> 00:01:43,440 Speaker 1: lot of other things back over the financial crisis, the 32 00:01:43,560 --> 00:01:46,479 Speaker 1: other thing that they really held onto, um and kind 33 00:01:46,480 --> 00:01:50,080 Speaker 1: of used as a justification for sacrificing else score was 34 00:01:50,360 --> 00:01:53,680 Speaker 1: those incredibly generous healthcare benefits. So now, of course, um, 35 00:01:53,720 --> 00:01:55,760 Speaker 1: you know, they get things. You know, these things don't 36 00:01:55,760 --> 00:01:58,520 Speaker 1: get cheaper, they just get more expective. People age, and 37 00:01:58,680 --> 00:02:01,800 Speaker 1: as the cost healthcare increases. So you come to another dayton, 38 00:02:02,320 --> 00:02:04,480 Speaker 1: So Max, maybe you can just give me like a 39 00:02:04,600 --> 00:02:07,640 Speaker 1: healthcare one on one here, just because the number I 40 00:02:07,680 --> 00:02:09,760 Speaker 1: see in a Bloomberg News article has really struck me 41 00:02:10,200 --> 00:02:12,919 Speaker 1: that nationwide health expenditures are expected to grow by five 42 00:02:12,960 --> 00:02:17,440 Speaker 1: point five percent annually from seven more than twice the 43 00:02:17,520 --> 00:02:20,600 Speaker 1: rate of inflation. So just real, simply for all audience 44 00:02:20,680 --> 00:02:24,160 Speaker 1: and for me, what are the main drivers of that growth? 45 00:02:24,800 --> 00:02:28,320 Speaker 1: I mean, that's the question that depending on which kind 46 00:02:28,320 --> 00:02:30,400 Speaker 1: of actor in the system you you ask, you'll you'll 47 00:02:30,440 --> 00:02:33,880 Speaker 1: get a different answer. But the general kind of the 48 00:02:33,880 --> 00:02:36,760 Speaker 1: biggest thing is always is that it's it's the prices. 49 00:02:37,840 --> 00:02:39,840 Speaker 1: Then the United States, just because of the system that 50 00:02:39,919 --> 00:02:43,040 Speaker 1: we have that's kind of fragmented between employers and the 51 00:02:43,120 --> 00:02:47,040 Speaker 1: government with kind of you know, split negotiating power. Depending 52 00:02:47,080 --> 00:02:50,320 Speaker 1: on what you're talking about, whether it's drugs or hospital services, 53 00:02:50,919 --> 00:02:53,320 Speaker 1: that no one can kind of push back and aggregate 54 00:02:53,360 --> 00:02:56,720 Speaker 1: against those, you get prices that rise at a far 55 00:02:56,760 --> 00:02:59,679 Speaker 1: greater rate of inflation than in everything, not just in 56 00:03:00,040 --> 00:03:02,360 Speaker 1: ugs where we receive all of the coverage, but really 57 00:03:02,440 --> 00:03:06,600 Speaker 1: in hospital services as well, um with just very little restraint, 58 00:03:06,639 --> 00:03:09,560 Speaker 1: and that's set to continue. Five point five is actually 59 00:03:09,639 --> 00:03:11,359 Speaker 1: not as bad as what we've seen at points of 60 00:03:11,400 --> 00:03:13,680 Speaker 1: the past though, which kind of puts the problem in 61 00:03:13,720 --> 00:03:17,240 Speaker 1: perspective of how much the cost health care has gone 62 00:03:17,320 --> 00:03:20,720 Speaker 1: up over time. Alright, So in the US, workers with 63 00:03:20,760 --> 00:03:23,640 Speaker 1: health insurance contribute an average eight of the premium for 64 00:03:23,639 --> 00:03:28,440 Speaker 1: single coverage of the premium for family coverage. How much 65 00:03:28,520 --> 00:03:30,880 Speaker 1: has that gone up over time? I mean, essentially, do 66 00:03:30,960 --> 00:03:35,280 Speaker 1: you foresee a time when companies won't provide health care 67 00:03:35,320 --> 00:03:38,720 Speaker 1: at all? Uh? You know, I think because of the 68 00:03:38,760 --> 00:03:42,160 Speaker 1: tax advantage of providing healthcare. It's basically a way to 69 00:03:42,280 --> 00:03:46,040 Speaker 1: provide more generous benefits, basically the equivalent of higher wages 70 00:03:46,360 --> 00:03:49,880 Speaker 1: without paying as much tax. As long as that tax 71 00:03:49,880 --> 00:03:52,680 Speaker 1: benefit exists and we don't have something like a Medicare 72 00:03:52,680 --> 00:03:56,040 Speaker 1: overall plan, you're still gonna have pretty generous employer coverage 73 00:03:56,080 --> 00:03:58,880 Speaker 1: and incentive to provide it. Okay. So if that's the case, 74 00:03:59,240 --> 00:04:02,240 Speaker 1: then is it a also argument that the rising cost 75 00:04:02,280 --> 00:04:04,440 Speaker 1: of healthcare is the reason why we've seen a shift 76 00:04:04,480 --> 00:04:07,320 Speaker 1: to the gig economy and away from full time employment 77 00:04:07,320 --> 00:04:10,200 Speaker 1: with benefits. I complicated in the sense that you know, 78 00:04:10,280 --> 00:04:13,800 Speaker 1: even though that that share of premiums has stayed relatively constant, 79 00:04:14,040 --> 00:04:18,120 Speaker 1: what has gone up is deductibles. Basically that people have 80 00:04:18,200 --> 00:04:20,680 Speaker 1: to pay more out of pocket and face less of 81 00:04:20,680 --> 00:04:22,800 Speaker 1: that premium cost. So just more, you know, the costs 82 00:04:22,800 --> 00:04:24,560 Speaker 1: have been going up just much before. It's just been 83 00:04:24,560 --> 00:04:27,000 Speaker 1: shifted in a different way as opposed to the shift 84 00:04:27,040 --> 00:04:29,680 Speaker 1: to the gig economy. Um, you know, it would be 85 00:04:29,720 --> 00:04:31,919 Speaker 1: one thing if if the A, C. A. We're working 86 00:04:32,520 --> 00:04:35,400 Speaker 1: you know on all cylinders as intended as kind of 87 00:04:35,440 --> 00:04:39,520 Speaker 1: a fairly priced and and stable alternative for people that 88 00:04:39,640 --> 00:04:41,720 Speaker 1: want to work for someone other than a large employer, 89 00:04:42,120 --> 00:04:44,200 Speaker 1: and and to a certain extent, you know, it continues on. 90 00:04:44,600 --> 00:04:47,360 Speaker 1: But if you fall into you know, the kind of 91 00:04:47,560 --> 00:04:50,560 Speaker 1: middle category where you make a fair amount of money 92 00:04:50,640 --> 00:04:53,680 Speaker 1: and don't qualify for subsidies, then it's basically unaffordable and 93 00:04:53,680 --> 00:04:56,000 Speaker 1: you're you're kind of out of luck. So it's it's 94 00:04:56,000 --> 00:04:58,120 Speaker 1: still a system with a lot of compromises, a lot 95 00:04:58,120 --> 00:05:00,000 Speaker 1: of people to get left out. So just real quickly 96 00:05:00,040 --> 00:05:01,640 Speaker 1: on board when they sit down A the U, A W. 97 00:05:01,960 --> 00:05:03,520 Speaker 1: How's that gonna go? Are they going to trade off 98 00:05:04,000 --> 00:05:06,679 Speaker 1: you know, salary increases for keeping healthcare what a company 99 00:05:06,720 --> 00:05:09,800 Speaker 1: is doing these days? I mean, I think both are 100 00:05:09,839 --> 00:05:12,800 Speaker 1: gonna attempt to give away as little as possible. That's 101 00:05:12,800 --> 00:05:15,400 Speaker 1: the point of collective bargaining. You know. It's a it's 102 00:05:15,440 --> 00:05:17,520 Speaker 1: a great success of the unions that they've managed to 103 00:05:17,560 --> 00:05:22,599 Speaker 1: negotiate these these really generous health benefits over time but 104 00:05:22,760 --> 00:05:25,200 Speaker 1: you know you always have the argument on the contrary 105 00:05:25,240 --> 00:05:27,119 Speaker 1: room for that. You know, if we want to stay 106 00:05:27,120 --> 00:05:30,960 Speaker 1: competitive with other countries, UM, we're gonna have to you know, 107 00:05:31,240 --> 00:05:33,480 Speaker 1: labor as in terms of labor costs, We're gonna have 108 00:05:33,520 --> 00:05:35,960 Speaker 1: to see some sacrifices for both sides. So it's gonna be, obviously, 109 00:05:36,000 --> 00:05:39,400 Speaker 1: as always, a really difficult negotiation. Um, and they really 110 00:05:39,400 --> 00:05:42,000 Speaker 1: aren't gonna want to It's I mean, if you want 111 00:05:42,040 --> 00:05:45,600 Speaker 1: to make that comparison that post Americans pay eighteen percent UH, 112 00:05:45,680 --> 00:05:48,240 Speaker 1: cost sharing for auto workers is a fraction to that, 113 00:05:48,480 --> 00:05:51,080 Speaker 1: so very different. Maxson, thank you so much for being 114 00:05:51,080 --> 00:05:53,480 Speaker 1: with us. Max Newson is a biotech, farm and healthcare 115 00:05:53,480 --> 00:06:10,320 Speaker 1: columnist with Bloomberg Opinion. Well, people, when you look around 116 00:06:10,320 --> 00:06:13,599 Speaker 1: the global economies, you certainly have China slowing, although there 117 00:06:13,600 --> 00:06:15,520 Speaker 1: maybe some green shoots, and then we got some data 118 00:06:15,720 --> 00:06:18,640 Speaker 1: last week about how weak things are in Europe and 119 00:06:18,640 --> 00:06:21,120 Speaker 1: how the e c B is responding. Of course, we 120 00:06:21,200 --> 00:06:23,640 Speaker 1: had some data come out today that chose inflation remains 121 00:06:23,760 --> 00:06:27,760 Speaker 1: muted here in the US amid a relatively decent economy here, 122 00:06:27,800 --> 00:06:31,760 Speaker 1: but people still persist in talking about a recession risk 123 00:06:31,839 --> 00:06:34,080 Speaker 1: for the US market at some point over the next 124 00:06:34,080 --> 00:06:36,160 Speaker 1: twelve day months. I think our next guest can provide 125 00:06:36,160 --> 00:06:39,440 Speaker 1: some perspective. Joel Stern. Joel is chairman and chief executive 126 00:06:39,480 --> 00:06:42,160 Speaker 1: officer of Stern Value Management. He joins us live here 127 00:06:42,160 --> 00:06:45,960 Speaker 1: in the Bloomberg Interactive Broker studio. Joel, Welcome to Bloomberg. 128 00:06:47,040 --> 00:06:48,600 Speaker 1: You just raised before we went on the air. Here 129 00:06:48,760 --> 00:06:52,240 Speaker 1: your thoughts about kind of how the global economic environment 130 00:06:52,279 --> 00:06:54,279 Speaker 1: looks recession risk, that type of thing. How do you 131 00:06:54,279 --> 00:06:57,240 Speaker 1: see it from from your perspective? Recession at all? And 132 00:06:57,279 --> 00:06:59,839 Speaker 1: the people who say they see your recession must have 133 00:07:00,000 --> 00:07:03,200 Speaker 1: different glasses than I do. The major reason for it 134 00:07:03,240 --> 00:07:09,080 Speaker 1: is this. Just last week, Krugman Nobel Prize winner said 135 00:07:09,600 --> 00:07:12,240 Speaker 1: I see a recession on the horizon. I'd like to 136 00:07:12,280 --> 00:07:16,520 Speaker 1: know what his indicator is. Let me explain. Even if 137 00:07:16,520 --> 00:07:20,120 Speaker 1: the number was wrong. Back in December, we had three 138 00:07:20,200 --> 00:07:23,520 Speaker 1: hundred thousand new jobs created. Let's assume it's off by 139 00:07:23,600 --> 00:07:26,880 Speaker 1: even a hundred thousand because of all kinds of seasonal things. 140 00:07:27,360 --> 00:07:30,040 Speaker 1: Do you think businessmen would be hiring people at that 141 00:07:30,080 --> 00:07:33,480 Speaker 1: pace if a recession was just around the corner. No way. 142 00:07:34,000 --> 00:07:36,560 Speaker 1: Not only that, take a look at where long term 143 00:07:36,600 --> 00:07:41,600 Speaker 1: interest rates are thirty year government bonds are yielding three 144 00:07:43,240 --> 00:07:45,800 Speaker 1: what's that all about? You know what that tells us? Also, 145 00:07:46,200 --> 00:07:48,880 Speaker 1: there's no inflation to talk about either. And you know, 146 00:07:48,920 --> 00:07:51,840 Speaker 1: when people take a look at inflation, they're leaving all 147 00:07:51,920 --> 00:07:54,720 Speaker 1: kinds of things out that bring the inflation rate not 148 00:07:54,800 --> 00:07:58,960 Speaker 1: at two percent, down to zero. I'm wondering if we're 149 00:07:59,000 --> 00:08:01,440 Speaker 1: looking at it through the wrong lens, if people are 150 00:08:01,480 --> 00:08:04,960 Speaker 1: looking for another recession big are akin to what we 151 00:08:05,000 --> 00:08:06,680 Speaker 1: saw in two thousand and eight, and if they're looking 152 00:08:06,680 --> 00:08:09,200 Speaker 1: in the wrong place, because that's not what we're going 153 00:08:09,240 --> 00:08:11,440 Speaker 1: to see this time. If instead we're seeing sort of 154 00:08:11,720 --> 00:08:15,600 Speaker 1: rolling recessions through different industries, the oil, the healthcare, you know, 155 00:08:15,680 --> 00:08:18,600 Speaker 1: whichever is poised to go next, could be, could be. 156 00:08:18,680 --> 00:08:21,040 Speaker 1: But you know, one of the interesting things about our 157 00:08:21,080 --> 00:08:24,840 Speaker 1: economy is not just what we would call high technology. 158 00:08:25,720 --> 00:08:29,400 Speaker 1: Think about the discoveries that we're learning though from the 159 00:08:29,400 --> 00:08:33,800 Speaker 1: pharmaceutical industry, industries that we had given up on. People 160 00:08:33,840 --> 00:08:37,120 Speaker 1: would contract that disease, they were finished, there was no 161 00:08:37,240 --> 00:08:40,520 Speaker 1: chance for them at all. I've just been reading about 162 00:08:41,160 --> 00:08:44,400 Speaker 1: what's going on with regard to cancer technology. I call 163 00:08:44,440 --> 00:08:48,320 Speaker 1: it cancer technology because when people contract cancer, they're not 164 00:08:48,400 --> 00:08:52,000 Speaker 1: going anywhere necessarily they're going to get better, okay, and 165 00:08:52,080 --> 00:08:56,040 Speaker 1: those types of things are creating a tremendous amount of jobs. Well, 166 00:08:56,040 --> 00:08:57,840 Speaker 1: how concerned are you about when you think about some 167 00:08:57,880 --> 00:09:00,240 Speaker 1: of the technologies you just mentioned that can out of 168 00:09:00,240 --> 00:09:02,640 Speaker 1: a situation with China. We have trade negotiations going on 169 00:09:02,720 --> 00:09:04,120 Speaker 1: right now. A lot of that, A lot of the 170 00:09:04,200 --> 00:09:06,840 Speaker 1: real hard sticking points are some of those hard issues 171 00:09:06,880 --> 00:09:10,400 Speaker 1: about technology and data integrity and all the type espionage, 172 00:09:10,400 --> 00:09:13,240 Speaker 1: corporate espionage. And it seems like, uh, in order for 173 00:09:13,280 --> 00:09:17,240 Speaker 1: the US to maintain its current position, maybe we need 174 00:09:17,280 --> 00:09:21,720 Speaker 1: some tougher trading. Well, first, the the Chinese situation regarding 175 00:09:21,760 --> 00:09:26,120 Speaker 1: high technology that's been with us for maybe decades. Okay, 176 00:09:26,240 --> 00:09:28,920 Speaker 1: and look where we are. We're doing very nicely, thank you. 177 00:09:29,360 --> 00:09:32,320 Speaker 1: They're not doing well for a different reason. They engaged 178 00:09:32,360 --> 00:09:35,000 Speaker 1: in what the Japanese did back in the nineteen eighties. 179 00:09:35,480 --> 00:09:40,640 Speaker 1: They spent money building cities, building buildings, and there was 180 00:09:40,679 --> 00:09:44,880 Speaker 1: no market for it. In other words, their economy overstated 181 00:09:45,080 --> 00:09:48,679 Speaker 1: how well they were really doing. They were creating monuments, 182 00:09:49,120 --> 00:09:52,440 Speaker 1: they were not creating real business there. And what's happened 183 00:09:52,440 --> 00:09:55,400 Speaker 1: now is they returned to a more normal level for themselves. 184 00:09:55,559 --> 00:09:58,600 Speaker 1: I still think that the six percent figure is way 185 00:09:58,600 --> 00:10:01,880 Speaker 1: too high. I'll make you a if they do revisions properly. 186 00:10:02,240 --> 00:10:06,520 Speaker 1: Maybe our commerce department is doing the calculations, you'll find 187 00:10:06,559 --> 00:10:08,120 Speaker 1: their growth rate as close to the four and a 188 00:10:08,160 --> 00:10:11,080 Speaker 1: half percent, not six and a half percent. So as 189 00:10:11,080 --> 00:10:13,480 Speaker 1: you as you think about managing money that in this environment, 190 00:10:13,480 --> 00:10:15,480 Speaker 1: if you view that the U. S economy is really 191 00:10:15,520 --> 00:10:19,199 Speaker 1: being quite robust and its fears of of our recession 192 00:10:19,520 --> 00:10:22,920 Speaker 1: considerably overblown, is it just US equities all the way 193 00:10:23,160 --> 00:10:28,000 Speaker 1: NASDAC in particular because of Jack advancements, our stock market 194 00:10:28,040 --> 00:10:32,240 Speaker 1: measured by the DOO fell over four thousand points over 195 00:10:32,240 --> 00:10:35,320 Speaker 1: the last year. Remember it dropped down to twenty two 196 00:10:35,320 --> 00:10:38,640 Speaker 1: thousand from twenty six thousand plus, and people said, oh, 197 00:10:38,679 --> 00:10:41,920 Speaker 1: my gosh, a recession is coming. That's not what was happening. 198 00:10:42,360 --> 00:10:46,040 Speaker 1: We are not accustomed to having the kind of negotiations 199 00:10:46,400 --> 00:10:50,280 Speaker 1: the administration has with China, for example, and the Chinese 200 00:10:50,480 --> 00:10:53,319 Speaker 1: that's dependent on how we're doing well with the North Koreans. 201 00:10:53,320 --> 00:10:56,360 Speaker 1: At the same time, my view on all of this 202 00:10:56,559 --> 00:11:02,120 Speaker 1: is that we we are accustomed to having it our way, 203 00:11:02,240 --> 00:11:05,120 Speaker 1: and we have a president who was certainly accustomed to 204 00:11:05,200 --> 00:11:08,360 Speaker 1: having it his way, and I think his strategy for 205 00:11:08,360 --> 00:11:11,640 Speaker 1: getting them to relax the restrictions they have on our 206 00:11:11,679 --> 00:11:14,640 Speaker 1: trade is going to be very successful. Now that's just 207 00:11:14,720 --> 00:11:17,840 Speaker 1: my guess. Within say, four to five months from now, 208 00:11:18,160 --> 00:11:20,959 Speaker 1: you wait and see, there'll be a major concession by 209 00:11:20,960 --> 00:11:23,959 Speaker 1: the Chinese and of course by the North Koreans as 210 00:11:23,960 --> 00:11:25,719 Speaker 1: a result of them. So do you think that that 211 00:11:25,760 --> 00:11:29,640 Speaker 1: will directly lead to a rally in US equities? People 212 00:11:29,640 --> 00:11:31,640 Speaker 1: are not pricing it right now with our question, Okay, 213 00:11:31,679 --> 00:11:33,080 Speaker 1: so you think that that will just price it in? 214 00:11:33,120 --> 00:11:35,120 Speaker 1: And are you worried at all about some of the 215 00:11:35,160 --> 00:11:39,880 Speaker 1: external factors that FED Chair Powell has been talking about, 216 00:11:40,120 --> 00:11:43,160 Speaker 1: particularly Brexit, especially today as we see Theresa May on 217 00:11:43,200 --> 00:11:46,280 Speaker 1: the brink of losing confidence of of of her constituents 218 00:11:46,280 --> 00:11:49,200 Speaker 1: and possibly losing office sooner than later. Uh, you know 219 00:11:49,280 --> 00:11:52,120 Speaker 1: how much does that bow into the U s econi 220 00:11:52,200 --> 00:11:55,240 Speaker 1: I feel sorry for her, she was sorry for her, 221 00:11:55,240 --> 00:11:58,200 Speaker 1: but not for the U s econtovating. Well, listen, what's 222 00:11:58,240 --> 00:12:02,280 Speaker 1: what really happened here was that the British said, what, 223 00:12:02,960 --> 00:12:06,920 Speaker 1: we're going to have a million refugees coming into our country. Incidentally, 224 00:12:07,160 --> 00:12:11,720 Speaker 1: in my view, Angela Merkel political career is over and 225 00:12:11,840 --> 00:12:15,000 Speaker 1: what cost it exactly what's led to this Brexit issue. 226 00:12:15,240 --> 00:12:17,439 Speaker 1: The Brexit issue is very simple. If you're going to 227 00:12:17,520 --> 00:12:19,920 Speaker 1: have these people a million, say two million, coming in 228 00:12:20,040 --> 00:12:22,640 Speaker 1: like that, what's it gonna do to your job? What 229 00:12:22,720 --> 00:12:24,839 Speaker 1: would you do? How would you want your politician to 230 00:12:24,920 --> 00:12:27,880 Speaker 1: vote for this? Okay, and half half the country voted 231 00:12:27,960 --> 00:12:31,200 Speaker 1: for Brexit, the other half to remain. I agree, they're 232 00:12:31,200 --> 00:12:33,760 Speaker 1: as polarized as we are in this country. They should 233 00:12:33,760 --> 00:12:35,760 Speaker 1: take a look at us and say, oh, we don't 234 00:12:35,760 --> 00:12:38,320 Speaker 1: want to become like those Americans. But it's too late. Well, 235 00:12:38,360 --> 00:12:41,440 Speaker 1: how concerned are you about just the whole European Union issue, 236 00:12:41,520 --> 00:12:43,719 Speaker 1: Brexit as it relates to kind of how you want 237 00:12:43,720 --> 00:12:46,520 Speaker 1: to position yourself globally investing, because it seems like it 238 00:12:46,640 --> 00:12:49,240 Speaker 1: really is an issue for the European Union. I've heard 239 00:12:49,280 --> 00:12:53,240 Speaker 1: money managers say the pe ratios there, their market to 240 00:12:53,280 --> 00:12:56,000 Speaker 1: book ratios are much lower than ours. There's a good 241 00:12:56,000 --> 00:12:58,719 Speaker 1: reason why. Look what it's done to their economy. Look 242 00:12:58,800 --> 00:13:01,360 Speaker 1: what it's done to the prospect I wouldn't be investing 243 00:13:01,400 --> 00:13:04,679 Speaker 1: in in the European Union at all. Okay, there are 244 00:13:04,679 --> 00:13:07,440 Speaker 1: so many other places to invest where other prospects is 245 00:13:07,480 --> 00:13:10,600 Speaker 1: so much better. One place outside the U s that 246 00:13:10,640 --> 00:13:15,840 Speaker 1: you like, Israel the Televisive Stock Exchange and Israeli companies 247 00:13:16,040 --> 00:13:19,079 Speaker 1: where there were over a hundred and fifty Israeli companies 248 00:13:19,080 --> 00:13:22,120 Speaker 1: that are traded on Nazak. You want to buy those companies. 249 00:13:22,960 --> 00:13:25,760 Speaker 1: Joel Stern, thank you so much for being here with us. 250 00:13:25,880 --> 00:13:29,360 Speaker 1: Joel Stern is chairman, chief executive officer of Stern Value Management, 251 00:13:29,440 --> 00:13:32,160 Speaker 1: joining us here in the Interactive Brokers studios. He also 252 00:13:32,360 --> 00:13:36,000 Speaker 1: is an adjunct professor at six business schools, a variety 253 00:13:36,120 --> 00:13:40,560 Speaker 1: of them including UH Columbia University and University of Chicago 254 00:13:40,800 --> 00:13:58,640 Speaker 1: Carnegie Melling. I could go on and on. It is 255 00:13:58,679 --> 00:14:01,959 Speaker 1: so interesting to me all that when we talk about voting, 256 00:14:01,960 --> 00:14:04,720 Speaker 1: and we talked about how the twenty campaign is heating up. 257 00:14:04,760 --> 00:14:07,920 Speaker 1: Certainly a number of candidates Joe Biden is on on 258 00:14:07,960 --> 00:14:10,839 Speaker 1: the docket to decide whether or not to run for 259 00:14:10,920 --> 00:14:14,640 Speaker 1: the presidential election in the United States any day now. 260 00:14:15,040 --> 00:14:18,040 Speaker 1: Question becomes why can people not vote on their phones? 261 00:14:18,120 --> 00:14:20,480 Speaker 1: Why can they not go online and vote? Why do 262 00:14:20,560 --> 00:14:23,920 Speaker 1: we have chad's hanging chad's and people waiting in lines 263 00:14:23,960 --> 00:14:26,080 Speaker 1: to go around the block, and and and you know, 264 00:14:26,800 --> 00:14:29,280 Speaker 1: are we staffed enough at certain places? This is a 265 00:14:29,280 --> 00:14:32,600 Speaker 1: perennial question and uh it's really important to address. Luckily, 266 00:14:32,640 --> 00:14:34,800 Speaker 1: for us, we have Bradley Tusk here. He's chief executive 267 00:14:34,800 --> 00:14:37,560 Speaker 1: officer of Tusk Philanthropies, joining us here in our Bloomberg 268 00:14:37,560 --> 00:14:41,880 Speaker 1: Interactive Broker's studios. Bradley obviously has had an extensive career 269 00:14:42,000 --> 00:14:44,600 Speaker 1: on a number of different campaigns as Deputy Governor of Illinois, 270 00:14:44,760 --> 00:14:47,720 Speaker 1: Chuck Shoomers communications director full disclosure, he did serve as 271 00:14:47,800 --> 00:14:50,880 Speaker 1: Mike Bloomberg's camp pay manager and Mike Bloomberg what is 272 00:14:50,920 --> 00:14:54,520 Speaker 1: the founder and majority owner of Bloomberg LP, which owns 273 00:14:54,640 --> 00:14:56,880 Speaker 1: us So, Bradley, thank you so much for joining here. 274 00:14:57,480 --> 00:15:00,560 Speaker 1: So let's just start with what is TUSK for lanthropiece 275 00:15:00,560 --> 00:15:02,920 Speaker 1: and how does it relate to this sort of perennial issue. 276 00:15:03,120 --> 00:15:06,840 Speaker 1: Sure so, uh my family foundation. I got really lucky 277 00:15:06,880 --> 00:15:09,400 Speaker 1: in that. Um when I after I finished working running 278 00:15:09,400 --> 00:15:11,760 Speaker 1: Mike's campaign, I took a chance on this little known 279 00:15:11,800 --> 00:15:16,000 Speaker 1: startup called Uber. I've started working on all their political problems. Yeah, 280 00:15:16,120 --> 00:15:18,760 Speaker 1: and took my fee and equity. Uh so that's done 281 00:15:18,760 --> 00:15:21,520 Speaker 1: pretty well as a result. Now there's to philanthropies. So 282 00:15:21,640 --> 00:15:23,840 Speaker 1: we focus on two things. The kind of easier one 283 00:15:24,000 --> 00:15:26,040 Speaker 1: is hunger, So we fund and run campaigns and states 284 00:15:26,040 --> 00:15:28,520 Speaker 1: around the country to create breakfast after the ballots create 285 00:15:28,600 --> 00:15:32,240 Speaker 1: universal school breakfast. The harder one is mobile voting. Um. 286 00:15:32,280 --> 00:15:34,280 Speaker 1: What I learned from the twenty years that I spent 287 00:15:34,320 --> 00:15:36,880 Speaker 1: in the trenches of politics is, with the exception of 288 00:15:36,920 --> 00:15:38,880 Speaker 1: Mike and I say that, even when I'm not on 289 00:15:38,920 --> 00:15:42,000 Speaker 1: blue brick radio, UM, I've yet to meet a politician 290 00:15:42,040 --> 00:15:44,840 Speaker 1: where every single policy decision is not governed solely by 291 00:15:44,880 --> 00:15:48,480 Speaker 1: the political inputs. Uh. Most politicians just can't live without 292 00:15:48,480 --> 00:15:50,920 Speaker 1: the validation that comes with holding office and be like 293 00:15:51,160 --> 00:15:54,440 Speaker 1: asking us to stop having oxygen right. So, UM, they're 294 00:15:54,520 --> 00:15:57,320 Speaker 1: never gonna do anything that's not in their political edic. 295 00:15:57,440 --> 00:15:59,840 Speaker 1: So let's just say, as an example, your Republican can 296 00:16:00,040 --> 00:16:02,960 Speaker 1: us from for Florida, UM, turn out your primaries twelve percent? 297 00:16:03,080 --> 00:16:05,720 Speaker 1: Because if Jerry manderin the primary effectively as the general 298 00:16:05,720 --> 00:16:08,600 Speaker 1: election and n R A voters make up half that 299 00:16:08,680 --> 00:16:11,480 Speaker 1: twelve percent, you may know that assault weapon band probably 300 00:16:11,520 --> 00:16:14,000 Speaker 1: makes sense, but you're never gonna be for it because 301 00:16:14,000 --> 00:16:15,960 Speaker 1: you're not going to risk alienating half of the people 302 00:16:15,960 --> 00:16:18,280 Speaker 1: who actually vote in your primary. What if turned out 303 00:16:18,320 --> 00:16:20,960 Speaker 1: were all of a sudden, everything would flip and then 304 00:16:20,960 --> 00:16:23,320 Speaker 1: the politics would be that if you didn't vote for it, 305 00:16:23,400 --> 00:16:25,760 Speaker 1: you would lose your job. Um. The reason why turn 306 00:16:25,800 --> 00:16:27,600 Speaker 1: out is so low if we have a system that 307 00:16:27,640 --> 00:16:29,640 Speaker 1: was built, as you were saying, for an a grarian 308 00:16:29,640 --> 00:16:32,640 Speaker 1: economy two hundred and fifty years ago, um, and it's 309 00:16:32,680 --> 00:16:35,880 Speaker 1: never really been updated and so as a result, UM, 310 00:16:35,960 --> 00:16:38,680 Speaker 1: no one really turns out. And the incentives of politicians 311 00:16:38,680 --> 00:16:40,960 Speaker 1: get are really disprit and different from what most people 312 00:16:41,040 --> 00:16:43,360 Speaker 1: actually want. And what I learned we were trying to 313 00:16:43,360 --> 00:16:45,200 Speaker 1: figure out how to make rides sharing legal all around. 314 00:16:45,240 --> 00:16:47,600 Speaker 1: The u S for Uber is when you give people 315 00:16:47,600 --> 00:16:50,240 Speaker 1: the ability to advocate from their phone, they'll do it. 316 00:16:50,320 --> 00:16:53,000 Speaker 1: So the millions of people who reached out to regulators 317 00:16:53,000 --> 00:16:55,920 Speaker 1: and politicians and said let ride sharing exist, you know, 318 00:16:55,920 --> 00:16:57,600 Speaker 1: they don't vote in primaries, right because they're not going 319 00:16:57,640 --> 00:16:59,720 Speaker 1: to figure out what random Tuesday is the election and 320 00:17:00,120 --> 00:17:01,760 Speaker 1: where to go and wait on line and deal all 321 00:17:01,760 --> 00:17:03,560 Speaker 1: that stuff. But when I was like, oh, I could 322 00:17:03,560 --> 00:17:05,880 Speaker 1: just press this button from my phone from inside the app, 323 00:17:06,359 --> 00:17:09,000 Speaker 1: they did it. And the final pieces blockchain, which now 324 00:17:09,119 --> 00:17:11,399 Speaker 1: enables you to really move data from point A to 325 00:17:11,480 --> 00:17:13,800 Speaker 1: point B in a secure fashion. So and putting all 326 00:17:13,880 --> 00:17:16,440 Speaker 1: those things together occurred to me, hey, maybe there's a 327 00:17:16,480 --> 00:17:18,600 Speaker 1: way to use all of this to create mobile voting. 328 00:17:18,960 --> 00:17:21,480 Speaker 1: So kicked it off out of my foundation. UM last 329 00:17:21,560 --> 00:17:23,879 Speaker 1: year's started working with the state of West Virginia. We 330 00:17:23,920 --> 00:17:26,320 Speaker 1: did it for deployed military both in their primary and 331 00:17:26,320 --> 00:17:28,840 Speaker 1: in their general election. We kind of put everything together 332 00:17:28,880 --> 00:17:31,120 Speaker 1: and paid for the state's cost so there's no taxpayer expenses. 333 00:17:31,560 --> 00:17:34,040 Speaker 1: Went really well. So we've been talking to other jurisdictions 334 00:17:34,040 --> 00:17:36,360 Speaker 1: and last Thursdays, a couple of days ago, we announced 335 00:17:36,359 --> 00:17:38,840 Speaker 1: that Denver's the next jurisdiction to do this, first sitting 336 00:17:38,960 --> 00:17:41,560 Speaker 1: in America to do it, and we're excited. So it'll 337 00:17:41,560 --> 00:17:43,639 Speaker 1: take place in there, may meet a small elections, and 338 00:17:43,640 --> 00:17:45,399 Speaker 1: then if the run off, will happen again in June. 339 00:17:45,440 --> 00:17:48,399 Speaker 1: So what's really been the gating issue to for adoption? 340 00:17:48,440 --> 00:17:50,920 Speaker 1: I mean, you know, for as long as I've been voting, 341 00:17:50,920 --> 00:17:52,480 Speaker 1: I walked into this little booth, I put a little 342 00:17:52,600 --> 00:17:55,480 Speaker 1: you know, uh you know, apron behind kind of put 343 00:17:55,480 --> 00:17:58,440 Speaker 1: pushing the buttons. It's just it's ridiculous. So what really 344 00:17:58,480 --> 00:18:01,040 Speaker 1: is the gating issue? Is it the technology wasn't there? 345 00:18:01,200 --> 00:18:03,320 Speaker 1: Is the technology wasn't there? I think there's sort of 346 00:18:03,359 --> 00:18:07,000 Speaker 1: two problems. So there's the day to day stuff of 347 00:18:07,040 --> 00:18:10,480 Speaker 1: people who say, oh, maybe tested enough, maybe it's not safe. 348 00:18:10,560 --> 00:18:12,760 Speaker 1: Or you have the incumbents in the election industry just 349 00:18:12,880 --> 00:18:15,760 Speaker 1: like you know taxi with Uber hotels of their BnB, 350 00:18:15,880 --> 00:18:17,560 Speaker 1: and they don't want to be disrupted either, so they 351 00:18:17,600 --> 00:18:19,600 Speaker 1: try to fight it. Um. That stuff we can work 352 00:18:19,640 --> 00:18:21,760 Speaker 1: through pretty well. The real problem is going to be 353 00:18:21,840 --> 00:18:24,040 Speaker 1: everyone who has power, it's not gonna want to make 354 00:18:24,040 --> 00:18:25,960 Speaker 1: it easier for them to then lose power. Right, and 355 00:18:26,000 --> 00:18:29,199 Speaker 1: this could be whether you're an alloted official, uh, the 356 00:18:29,320 --> 00:18:31,919 Speaker 1: n r A, teachers unions, whoever, it is. If you 357 00:18:32,000 --> 00:18:34,120 Speaker 1: figure it out how to game the system and how 358 00:18:34,160 --> 00:18:37,199 Speaker 1: you can take these low turnout primaries and use them 359 00:18:37,200 --> 00:18:39,280 Speaker 1: to your advantage. Of that politicians do what you want. 360 00:18:39,600 --> 00:18:41,760 Speaker 1: You're not looking to then give away all that power. 361 00:18:41,880 --> 00:18:44,200 Speaker 1: So then how are you getting this sort of blockchain 362 00:18:44,280 --> 00:18:47,680 Speaker 1: experiment rolling in different places? Totally? So a couple of things. 363 00:18:47,720 --> 00:18:49,680 Speaker 1: One is, you know there are a handful of alected 364 00:18:49,880 --> 00:18:52,959 Speaker 1: election officials around the U s who are willing to 365 00:18:53,000 --> 00:18:55,080 Speaker 1: give it a try anyway, So we just have the 366 00:18:55,640 --> 00:18:58,360 Speaker 1: city clerk in Denver, Secretary State of Wes Virginia before that, 367 00:18:58,840 --> 00:19:01,400 Speaker 1: and we keep talking to more and were people. But ultimately, 368 00:19:01,480 --> 00:19:02,960 Speaker 1: what I've got to do is sort of prove that 369 00:19:03,000 --> 00:19:05,920 Speaker 1: this works and proved that it's safe. What I learned 370 00:19:06,000 --> 00:19:08,400 Speaker 1: in in my experience in tech is when you let 371 00:19:08,400 --> 00:19:10,199 Speaker 1: the genie out of the bottle, you can't put it 372 00:19:10,200 --> 00:19:12,280 Speaker 1: back in. Right. So if I can spend the next 373 00:19:12,320 --> 00:19:16,119 Speaker 1: five years commencing jurisdictions to try it, funding their elections, 374 00:19:16,359 --> 00:19:18,320 Speaker 1: showing the world that it works, I think about my 375 00:19:18,400 --> 00:19:21,280 Speaker 1: daughter who's twelve, when she's eighteen, she won't accept the 376 00:19:21,320 --> 00:19:23,640 Speaker 1: notion that you can't do this. So have you found 377 00:19:23,720 --> 00:19:27,960 Speaker 1: anything interesting at least with the first experimental run here 378 00:19:28,240 --> 00:19:31,200 Speaker 1: as far as what turnout is or how the voting 379 00:19:31,240 --> 00:19:33,800 Speaker 1: actually Yeah, So it's so far been limited just to 380 00:19:33,880 --> 00:19:36,560 Speaker 1: deployed military, because it's really hard to object to the 381 00:19:36,600 --> 00:19:38,440 Speaker 1: fact that people who are literally putting their lives on 382 00:19:38,480 --> 00:19:39,960 Speaker 1: the line to protect the right to vote, right that 383 00:19:40,040 --> 00:19:43,160 Speaker 1: we don't even use um. Their votes never count. You're 384 00:19:43,160 --> 00:19:44,960 Speaker 1: mailing your ballot from Canada, harn it shows us like 385 00:19:45,040 --> 00:19:47,360 Speaker 1: a month later it just goes right in the trash. Um. 386 00:19:47,480 --> 00:19:49,920 Speaker 1: So what we have found so far is people are 387 00:19:50,000 --> 00:19:53,320 Speaker 1: taking advantage of it one. Two, at least in a 388 00:19:53,320 --> 00:19:55,560 Speaker 1: system where we were able to verify who everyone is 389 00:19:55,560 --> 00:19:59,160 Speaker 1: because they already have a military idea, it works really well. Three. 390 00:19:59,200 --> 00:20:02,120 Speaker 1: We ran four step security audits of West Virginia after 391 00:20:02,160 --> 00:20:04,479 Speaker 1: we finished it, and everything came back clean. So what 392 00:20:04,520 --> 00:20:08,080 Speaker 1: that all says is the concept works, keep expanding. My 393 00:20:08,160 --> 00:20:10,320 Speaker 1: hope is at the next constituency we work with a 394 00:20:10,359 --> 00:20:12,600 Speaker 1: disability community because a lot of people who are blind 395 00:20:12,680 --> 00:20:15,200 Speaker 1: or deaf have found that their phones provide a lot 396 00:20:15,200 --> 00:20:17,239 Speaker 1: of things to make their lives a lot easier. So 397 00:20:17,320 --> 00:20:19,160 Speaker 1: we've been talking to these different groups, like the National 398 00:20:19,160 --> 00:20:22,359 Speaker 1: Association for the Blind, who said, yeah, voting is especially 399 00:20:22,359 --> 00:20:24,080 Speaker 1: hard if you're blind. You don't even really have secrecy 400 00:20:24,119 --> 00:20:26,440 Speaker 1: the ballot because you're trusting the person there were flat 401 00:20:26,600 --> 00:20:31,120 Speaker 1: there do what you said, right. So they were thrilled. Um. 402 00:20:31,160 --> 00:20:33,560 Speaker 1: So I'm hopeful that in November we can at least 403 00:20:33,600 --> 00:20:36,359 Speaker 1: get one jurisdiction to expand at both military um and 404 00:20:36,480 --> 00:20:39,560 Speaker 1: parts of disability and then come really hit the ground running. 405 00:20:39,800 --> 00:20:42,439 Speaker 1: Well that's fascinating. I mean, this sounds like a technology 406 00:20:42,480 --> 00:20:44,879 Speaker 1: that we've been waiting for for a long time. It 407 00:20:44,880 --> 00:20:49,120 Speaker 1: sounds like technology that should have been available ten years ago. Yes, yeah, 408 00:20:49,200 --> 00:20:52,400 Speaker 1: and that the implications are just massive. I think Bradley Tusk, 409 00:20:52,520 --> 00:20:55,080 Speaker 1: CEO Tusk Philanthropies joining us here in Bloomberget I am 410 00:20:55,080 --> 00:20:57,359 Speaker 1: Active Brokeker Studios, thank you very very much for joining us. 411 00:21:11,200 --> 00:21:13,359 Speaker 1: Robert L Has with the U S. Trade representative for 412 00:21:13,520 --> 00:21:16,680 Speaker 1: President Trump, who has been representing the nation or helping 413 00:21:16,720 --> 00:21:21,160 Speaker 1: to UH negotiate the trade pact with China, saying now 414 00:21:21,200 --> 00:21:24,000 Speaker 1: today the getting a trade deal with China is a 415 00:21:24,119 --> 00:21:27,200 Speaker 1: big if this headline crossing minutes ago, you could see 416 00:21:27,240 --> 00:21:30,520 Speaker 1: the Dow Jones taking a leg lower near session lows, 417 00:21:30,680 --> 00:21:33,600 Speaker 1: although only down nearly four tents of one percent on 418 00:21:33,640 --> 00:21:36,920 Speaker 1: the day, so not a huge decline and largely led 419 00:21:37,040 --> 00:21:38,960 Speaker 1: vie boing, but still taking a little bit of a 420 00:21:39,000 --> 00:21:41,639 Speaker 1: dip lower. My question is who trades off of these 421 00:21:41,840 --> 00:21:43,800 Speaker 1: and these sort of you know, it's on again off 422 00:21:43,840 --> 00:21:47,480 Speaker 1: again headlines every single day, with trade giving very conflicting messages. 423 00:21:47,680 --> 00:21:50,040 Speaker 1: How does an investor invest around that? Joining us now 424 00:21:50,080 --> 00:21:53,320 Speaker 1: to discuss chat Oviet he's director of investments for Huntington's 425 00:21:53,320 --> 00:21:56,680 Speaker 1: private bank, joining us here in our Bloomberg Interactive Broker Studios. 426 00:21:56,680 --> 00:21:59,119 Speaker 1: So Chad, let's start there. I mean what do you 427 00:21:59,160 --> 00:22:02,560 Speaker 1: do with these conflicting headlines on trade? First off, we 428 00:22:02,560 --> 00:22:05,320 Speaker 1: would advise our clients to have a much longer outlook 429 00:22:05,480 --> 00:22:08,879 Speaker 1: than the next five minutes, ten minutes, even the next headline, 430 00:22:08,920 --> 00:22:12,840 Speaker 1: whether it comes tomorrow or the next day, go on. 431 00:22:14,040 --> 00:22:15,920 Speaker 1: We want to make sure that we keep that outlook, 432 00:22:15,960 --> 00:22:19,280 Speaker 1: focus our clients on long term investing, really investing for 433 00:22:19,359 --> 00:22:22,040 Speaker 1: what it is that they're trying to achieve. These these 434 00:22:22,080 --> 00:22:26,040 Speaker 1: intermittent headlines or the news of the day plays into 435 00:22:26,080 --> 00:22:29,000 Speaker 1: our thesis a little bit for though. So what we 436 00:22:29,000 --> 00:22:31,880 Speaker 1: were seeing and what we agree to is that we've 437 00:22:32,520 --> 00:22:37,240 Speaker 1: we've peaked more than likely it was peak for GDP 438 00:22:37,520 --> 00:22:41,159 Speaker 1: and earnings, but we haven't stopped growing. So we have 439 00:22:41,240 --> 00:22:43,280 Speaker 1: a peak, and we're at a point now where we're 440 00:22:43,280 --> 00:22:47,560 Speaker 1: seeing this consolidation, and we're seeing consolidation from a soft 441 00:22:48,160 --> 00:22:54,320 Speaker 1: GDP start in lower earnings estimates for the first quarter often, 442 00:22:54,640 --> 00:22:57,400 Speaker 1: but we ultimately see that kind of troughing this year 443 00:22:57,800 --> 00:22:59,720 Speaker 1: and then rebuilding towards the end of the year. So 444 00:22:59,760 --> 00:23:02,520 Speaker 1: we're constructive for the rest of this year on US equities, 445 00:23:03,119 --> 00:23:07,040 Speaker 1: even with the headlines that come out from time to time. Obviously, 446 00:23:07,160 --> 00:23:09,760 Speaker 1: US China trade deal is a big one and could 447 00:23:10,160 --> 00:23:12,560 Speaker 1: ultimately derail our thesis to a degree or bring some 448 00:23:12,600 --> 00:23:15,639 Speaker 1: of those assumptions down. But currently we still have the 449 00:23:15,760 --> 00:23:18,560 Speaker 1: US with the SMP five ending the year at about 450 00:23:19,560 --> 00:23:23,280 Speaker 1: so I guess in your scenario, no recession risk on 451 00:23:23,320 --> 00:23:25,960 Speaker 1: the horizon from your perspective, we don't. In fact, we're 452 00:23:25,960 --> 00:23:30,160 Speaker 1: only at about risk of recession in our projections, um 453 00:23:30,200 --> 00:23:35,680 Speaker 1: and that's carrying into okay. So if you don't really 454 00:23:35,760 --> 00:23:38,639 Speaker 1: think that these headlines are gonna do anything in the 455 00:23:38,680 --> 00:23:41,879 Speaker 1: long run to affect your thesis, wouldn't you be buying? 456 00:23:43,040 --> 00:23:45,600 Speaker 1: We are? In fact? Okay? So so so during any 457 00:23:45,600 --> 00:23:48,000 Speaker 1: of these dips when people say, oh my god, Robert 458 00:23:48,080 --> 00:23:50,000 Speaker 1: Leitheizer's isn't getting a trade deal with China? Is a 459 00:23:50,040 --> 00:23:55,000 Speaker 1: big if sell that you're saying by we're buyers again 460 00:23:55,560 --> 00:23:59,920 Speaker 1: being situations to the client, and we want to understand 461 00:24:00,000 --> 00:24:03,200 Speaker 1: a situation, understand what they're looking for. But generally speaking, yes, 462 00:24:03,200 --> 00:24:08,639 Speaker 1: we're buyers on dips. Pardon me what in particularly, thank 463 00:24:08,680 --> 00:24:11,120 Speaker 1: you for asking, I was going there. What we would 464 00:24:11,160 --> 00:24:15,080 Speaker 1: be recommending to clients is still the large cap US equities. Uh. 465 00:24:15,800 --> 00:24:18,760 Speaker 1: That's been our thesis through the end of eighteen continues 466 00:24:18,800 --> 00:24:22,479 Speaker 1: to be in twenty nineteen. We like that space from 467 00:24:22,520 --> 00:24:26,240 Speaker 1: an asset allocation perspective. We're not completely absent developed markets 468 00:24:26,280 --> 00:24:28,680 Speaker 1: or emerging market, but we would be at what we 469 00:24:28,720 --> 00:24:31,760 Speaker 1: would consider neutral in terms of our targets for those. 470 00:24:31,800 --> 00:24:34,840 Speaker 1: We made some reductions last year in developed markets and 471 00:24:34,920 --> 00:24:38,600 Speaker 1: e M, so we're still constructive though, with the idea 472 00:24:38,640 --> 00:24:41,880 Speaker 1: of earnings regathering getting better towards the end of the year. 473 00:24:41,920 --> 00:24:45,840 Speaker 1: Again that target on the SMP, we like the large 474 00:24:45,880 --> 00:24:49,200 Speaker 1: cap US equity names. We would be sensitive to those 475 00:24:49,240 --> 00:24:53,160 Speaker 1: that have uh more than fifty of the revenue coming 476 00:24:53,160 --> 00:24:55,439 Speaker 1: from outside of the United States because we recognized there 477 00:24:55,520 --> 00:24:59,159 Speaker 1: is some global slowdown, but generally speaking US large caps. 478 00:24:59,240 --> 00:25:01,400 Speaker 1: So that sounds like So how about tech? Like in 479 00:25:01,520 --> 00:25:04,760 Speaker 1: this studio, we like tech. We like the Fang stocks, 480 00:25:04,760 --> 00:25:07,040 Speaker 1: and we've noticed obviously that during the market run the 481 00:25:07,080 --> 00:25:10,240 Speaker 1: Fang stocks really lad the market. Then conversely, on the 482 00:25:10,240 --> 00:25:11,879 Speaker 1: way down in the fourth quarter last year led the 483 00:25:11,920 --> 00:25:15,040 Speaker 1: market down now having a strong rebound in nineteen. Where 484 00:25:15,040 --> 00:25:17,560 Speaker 1: you guys, in terms of your relative waiting of of 485 00:25:17,720 --> 00:25:24,640 Speaker 1: of tech for our clients, we're pretty much balanced kind 486 00:25:24,640 --> 00:25:28,320 Speaker 1: of at target for tech. We're not overweighting technology We 487 00:25:28,440 --> 00:25:30,719 Speaker 1: do like those big names. Some of the fang stocks 488 00:25:30,760 --> 00:25:34,400 Speaker 1: are in our portfolios, but we haven't moved to an 489 00:25:34,440 --> 00:25:39,280 Speaker 1: overweight position with respect to to really any of the 490 00:25:39,320 --> 00:25:44,119 Speaker 1: major sectors. Here's another way to ask the question, do 491 00:25:44,200 --> 00:25:46,440 Speaker 1: you think that tech will continue to lead shares up? 492 00:25:46,520 --> 00:25:49,399 Speaker 1: Because they've been the real driver? Uh this year on 493 00:25:49,440 --> 00:25:51,200 Speaker 1: the way up? They were driver last year on the 494 00:25:51,240 --> 00:25:53,240 Speaker 1: way down. Are they going to continue to be the 495 00:25:53,320 --> 00:25:56,679 Speaker 1: leader here? Sure? I would agree with that. Yes, so 496 00:25:56,760 --> 00:26:00,880 Speaker 1: they lead down, they're leading us back out. The interesting 497 00:26:00,960 --> 00:26:03,800 Speaker 1: thing about technology and generally speaking about technology for us, 498 00:26:04,200 --> 00:26:06,919 Speaker 1: most of those companies are on the right side of change. 499 00:26:07,359 --> 00:26:11,159 Speaker 1: The companies may have companies specific issues, but they're not 500 00:26:11,280 --> 00:26:15,560 Speaker 1: just leave leading the stock market higher right now. They're 501 00:26:15,640 --> 00:26:19,280 Speaker 1: leading industries and making changes to industries that we believe 502 00:26:19,280 --> 00:26:22,080 Speaker 1: are impactful long term. There again getting our clients to 503 00:26:22,080 --> 00:26:25,760 Speaker 1: think longer term than Yes, absolutely, these technology companies would 504 00:26:25,760 --> 00:26:28,240 Speaker 1: be something to invest in. Very interesting. There's lots of 505 00:26:28,640 --> 00:26:31,200 Speaker 1: lots of places. Given that the markets up eleven percent 506 00:26:31,240 --> 00:26:32,600 Speaker 1: this year, I think people are really trying to figure 507 00:26:32,600 --> 00:26:36,000 Speaker 1: out where to go next. That Chat Aviette, director of 508 00:26:36,040 --> 00:26:38,480 Speaker 1: Investments for Huntington's Private Banking, joining us life here in 509 00:26:38,520 --> 00:26:41,280 Speaker 1: our Bloomberg Interactor Broker studio. It's sort of interesting to 510 00:26:41,320 --> 00:26:46,119 Speaker 1: me how many people are saying that recession is coming 511 00:26:46,320 --> 00:26:48,600 Speaker 1: close to us, and then everybody else saying, what are 512 00:26:48,600 --> 00:26:51,240 Speaker 1: you guys talking about? Everything is just fine? I mean 513 00:26:51,240 --> 00:26:53,800 Speaker 1: the polarization there is really dramatic, and I do have 514 00:26:53,840 --> 00:26:56,240 Speaker 1: to wonder, uh, you know, is there some sort of 515 00:26:56,240 --> 00:26:59,440 Speaker 1: bigger risk that people aren't seeing or are some people 516 00:26:59,560 --> 00:27:01,800 Speaker 1: just so caared of the two and eight financial crisis 517 00:27:01,840 --> 00:27:05,320 Speaker 1: still that they are still unable to see something that 518 00:27:05,440 --> 00:27:07,720 Speaker 1: is positive. Yeah. Interesting, I don't think I think that 519 00:27:07,760 --> 00:27:09,880 Speaker 1: was ten years ago, but yet it's still in people's psyches. 520 00:27:10,040 --> 00:27:11,840 Speaker 1: It was, it was a painful. It was a painful 521 00:27:11,840 --> 00:27:14,359 Speaker 1: event ten years ago. Thanks for listening to the Bloomberg 522 00:27:14,359 --> 00:27:16,520 Speaker 1: P and L podcast. You can subscribe and listen to 523 00:27:16,600 --> 00:27:19,840 Speaker 1: interviews at Apple Podcasts or whatever podcast platform you prefer. 524 00:27:20,240 --> 00:27:23,000 Speaker 1: Paul Sweeney, I'm on Twitter at pt Sweeney. I'm Lisa 525 00:27:23,040 --> 00:27:25,639 Speaker 1: Abram Woyds. I'm on Twitter at Lisa Abram woos One. 526 00:27:25,880 --> 00:27:28,399 Speaker 1: Before the podcast, you can always catch us worldwide on 527 00:27:28,520 --> 00:27:29,359 Speaker 1: Bloomberg Radio