1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:22,000 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App. 4 00:00:22,360 --> 00:00:25,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:28,120 Speaker 1: us live on YouTube Long. 6 00:00:27,920 --> 00:00:29,040 Speaker 2: You're going far away. 7 00:00:29,360 --> 00:00:31,920 Speaker 3: I think it was when Feisal was at Saudi Arabia. 8 00:00:31,960 --> 00:00:36,400 Speaker 3: You remember Alec Guinness and t Lawrence of Arabia. Stuart 9 00:00:36,479 --> 00:00:40,760 Speaker 3: Lawrence invented our commodity research with a guy named Justin Carrigan. 10 00:00:40,880 --> 00:00:45,000 Speaker 3: Over the years, they've passed the baton to Will Kennedy. 11 00:00:45,080 --> 00:00:49,199 Speaker 3: It is absolutely the toughest job at Bloomberg. It is 12 00:00:49,240 --> 00:00:53,000 Speaker 3: a global global mandate. We are thrilled Will Kennedy could 13 00:00:53,040 --> 00:00:56,760 Speaker 3: come away from the desk with Brent Crude. It went away, 14 00:00:57,040 --> 00:01:01,600 Speaker 3: Will Kennedy, to your system, to the internetational hydrocarbon system. 15 00:01:02,000 --> 00:01:05,200 Speaker 3: What's the difference between one hundred dollars a barrel in 16 00:01:05,240 --> 00:01:07,000 Speaker 3: one hundred and eight dollars a barrel. 17 00:01:08,360 --> 00:01:12,720 Speaker 4: It's great to be with you, Tom Well. It just 18 00:01:12,840 --> 00:01:16,360 Speaker 4: shows I think that the market has been a little 19 00:01:16,400 --> 00:01:20,440 Speaker 4: bit complacent about the impact of the war and when 20 00:01:20,520 --> 00:01:24,440 Speaker 4: they see the headlines today about Israel in the US 21 00:01:24,520 --> 00:01:26,560 Speaker 4: hitting this gas field. Now, this gas field will not 22 00:01:26,600 --> 00:01:29,360 Speaker 4: have a huge impact on international markets. It's gas that 23 00:01:29,760 --> 00:01:33,160 Speaker 4: is used at home in Iran. But what it does 24 00:01:33,319 --> 00:01:35,560 Speaker 4: mean is I think Iran will take it as a 25 00:01:35,600 --> 00:01:39,440 Speaker 4: signal that the energy system, the global energy system, is 26 00:01:39,600 --> 00:01:42,679 Speaker 4: fair game. So there's a lot of worry now that 27 00:01:42,680 --> 00:01:47,440 Speaker 4: that means that they will intensify attacks against oil refineries, 28 00:01:47,480 --> 00:01:51,920 Speaker 4: against oil fields, against export ternals, and indeed concentrate on 29 00:01:51,920 --> 00:01:55,080 Speaker 4: the straight offall moves, and it will just mean that 30 00:01:55,160 --> 00:01:57,800 Speaker 4: the pain that's going through the energy system will increase. 31 00:01:57,920 --> 00:02:00,280 Speaker 3: I mean, a news director for all of us are 32 00:02:00,480 --> 00:02:02,920 Speaker 3: and you know, whether it's Jumani Brassetti in Jubai with 33 00:02:02,960 --> 00:02:06,720 Speaker 3: some real risk there in all, what's the will Kennedy 34 00:02:07,000 --> 00:02:13,320 Speaker 3: access where this war becomes critical for our microeconomics? Is 35 00:02:13,360 --> 00:02:16,800 Speaker 3: it day's Will Kennedy weeks? Can we get out to 36 00:02:16,880 --> 00:02:18,359 Speaker 3: May first? 37 00:02:19,000 --> 00:02:22,880 Speaker 4: It's happening now, it's just not evenly distributed. We've been 38 00:02:22,919 --> 00:02:26,000 Speaker 4: reporting all week and you've you'll have seen it and 39 00:02:26,040 --> 00:02:28,280 Speaker 4: talked about it Tom that you know, if we look 40 00:02:28,320 --> 00:02:31,320 Speaker 4: away from the flat flight of crude oil into how 41 00:02:31,480 --> 00:02:34,560 Speaker 4: energy markets are playing out in different parts of the world. 42 00:02:34,760 --> 00:02:38,120 Speaker 4: It is already disruptive, whether it's five dollars diesel in 43 00:02:38,160 --> 00:02:41,440 Speaker 4: the US with all that means for America's trucking companies 44 00:02:41,480 --> 00:02:44,840 Speaker 4: and America's farmers, whether it's the fact they're actually rationing 45 00:02:44,880 --> 00:02:49,080 Speaker 4: fuel in some parts of Asia like Vietnam and Thailander 46 00:02:49,080 --> 00:02:52,720 Speaker 4: with it's the fact that Japanese refineries, one of the 47 00:02:52,760 --> 00:02:56,120 Speaker 4: world's big refining systems, they're looking at cutting runs, that 48 00:02:56,840 --> 00:03:00,839 Speaker 4: China is having to keep fuel at home. That's happening now, 49 00:03:00,840 --> 00:03:02,760 Speaker 4: and the fact that those things are happening means that 50 00:03:03,040 --> 00:03:06,359 Speaker 4: as the days go by, consumers will be feeling the impact, 51 00:03:06,400 --> 00:03:09,359 Speaker 4: and they'll be feeling the impact less money in their pocket, 52 00:03:09,400 --> 00:03:11,400 Speaker 4: They'll be feeling the impact in the fact that people 53 00:03:11,800 --> 00:03:14,240 Speaker 4: have got to put their prices up to recoup these 54 00:03:14,320 --> 00:03:17,839 Speaker 4: vising fuel costs. It's starting to happen. There's always a lag. 55 00:03:17,919 --> 00:03:21,040 Speaker 4: We remember that from the Ukraine War. But don't concentrate 56 00:03:21,160 --> 00:03:22,960 Speaker 4: just on the flat price of crud. Yes, one hundred 57 00:03:22,960 --> 00:03:25,160 Speaker 4: and eight is a big number, but look at jet 58 00:03:25,160 --> 00:03:27,400 Speaker 4: fuel markets, fuel oil markets, diesel markets. 59 00:03:27,400 --> 00:03:30,000 Speaker 3: The headline comes out of the team that Will Kennedy, 60 00:03:30,400 --> 00:03:36,360 Speaker 3: as Cutter says, Israel striking Iran's gas field irresponsible, Step, 61 00:03:36,400 --> 00:03:39,120 Speaker 3: I mean, Paul, that's this is stronger language. It's just 62 00:03:39,160 --> 00:03:41,440 Speaker 3: how you get out to one hundred eight dollars affair? 63 00:03:41,600 --> 00:03:43,520 Speaker 5: Right, Tom? I think you're right, So we'll given that 64 00:03:43,640 --> 00:03:44,360 Speaker 5: headline here. 65 00:03:45,000 --> 00:03:46,840 Speaker 6: Just in the last couple of days, President Trump has 66 00:03:47,440 --> 00:03:50,080 Speaker 6: asked some of our erstwhile allies for help in a. 67 00:03:50,080 --> 00:03:54,720 Speaker 5: Straight up war moves mostly been rebuffed by those countries. 68 00:03:54,760 --> 00:03:59,560 Speaker 6: What's your reporting in London in Europe about how are 69 00:03:59,600 --> 00:04:02,720 Speaker 6: European and I guess allies are viewing kind of what's 70 00:04:02,720 --> 00:04:05,040 Speaker 6: happening in around these days with the US and Israel. 71 00:04:06,040 --> 00:04:08,880 Speaker 4: I think most people in governments in Europe would make 72 00:04:08,880 --> 00:04:12,120 Speaker 4: the following points. They weren't consulted about this war starting. 73 00:04:12,680 --> 00:04:16,640 Speaker 4: They're extremely dubious about its strategy and what the endgame is. 74 00:04:17,160 --> 00:04:19,320 Speaker 4: And they're also, and I think this is an important point, 75 00:04:19,640 --> 00:04:23,839 Speaker 4: extremely dubious about what a military solution to the Gulf 76 00:04:23,839 --> 00:04:27,240 Speaker 4: of straight Orfoe moves looks like Trump says he wants 77 00:04:27,279 --> 00:04:29,440 Speaker 4: ships to open this, but when you actually talk to 78 00:04:29,880 --> 00:04:34,880 Speaker 4: people who understand how the naval operation would work at 79 00:04:34,920 --> 00:04:38,120 Speaker 4: a time of war, opening in whole moves to commercial 80 00:04:38,160 --> 00:04:42,280 Speaker 4: shipping and keeping it open would be an enormous naval task, 81 00:04:42,800 --> 00:04:45,839 Speaker 4: a task that probably the US Navy, let alone smaller 82 00:04:45,880 --> 00:04:49,000 Speaker 4: European navies are not equipped for. This might be part 83 00:04:49,040 --> 00:04:51,640 Speaker 4: of the solution after the war ends, but I think 84 00:04:51,680 --> 00:04:55,280 Speaker 4: most governments would say this is not even possible while 85 00:04:55,279 --> 00:04:58,200 Speaker 4: the conflict is still going on, So you should turn 86 00:04:58,240 --> 00:05:01,240 Speaker 4: your mind to finding a way to and the conflict now. 87 00:05:01,360 --> 00:05:03,280 Speaker 4: Not passing judgment on that view, I'm just trying to 88 00:05:03,320 --> 00:05:06,039 Speaker 4: reflect what the conversation is like here in London and Paris, 89 00:05:06,279 --> 00:05:08,200 Speaker 4: but I think that would we did not ask to 90 00:05:08,240 --> 00:05:10,680 Speaker 4: be in this conflict and the way that you're asking 91 00:05:10,760 --> 00:05:12,359 Speaker 4: us to be involved is not realistic. 92 00:05:12,760 --> 00:05:16,680 Speaker 6: Is there concerned efforts on a part of European government's 93 00:05:16,880 --> 00:05:19,440 Speaker 6: UK government to work with the US or try to 94 00:05:19,480 --> 00:05:23,760 Speaker 6: push for some diplomatic solution here, or are the Europeans 95 00:05:23,800 --> 00:05:25,919 Speaker 6: just kind of saying a you guys broke it, you 96 00:05:26,000 --> 00:05:26,480 Speaker 6: deal with it. 97 00:05:27,760 --> 00:05:30,560 Speaker 4: I think a bit of both probably. I mean, I 98 00:05:30,600 --> 00:05:35,000 Speaker 4: think they would explore any diplomatic opportunity to bring something around. 99 00:05:35,040 --> 00:05:37,880 Speaker 4: Whether that exists, whether the European government's the right people 100 00:05:37,920 --> 00:05:39,840 Speaker 4: to do that, I'm not sure we know that. Prisbon, 101 00:05:39,920 --> 00:05:43,359 Speaker 4: macrom and France has spoken to the Iranian president, so 102 00:05:43,400 --> 00:05:47,080 Speaker 4: those efforts are in place. Obviously, the Gulf states are 103 00:05:47,120 --> 00:05:50,400 Speaker 4: close allies of European country, so those conversations between the 104 00:05:50,480 --> 00:05:53,960 Speaker 4: lights of the UA and the UK will be will 105 00:05:54,000 --> 00:05:56,080 Speaker 4: be going on at the same time. But there's only 106 00:05:58,200 --> 00:06:00,200 Speaker 4: are there any people who can end this conflict and 107 00:06:00,240 --> 00:06:04,880 Speaker 4: antagonists themselves, So that's what that's what we need to happen. 108 00:06:04,920 --> 00:06:06,880 Speaker 4: But I think you would love the shooting to stop. 109 00:06:07,000 --> 00:06:09,800 Speaker 3: Well, one final question, and I look at all the 110 00:06:09,880 --> 00:06:13,200 Speaker 3: derivatives of oil. We all quote Brent now, folks, one 111 00:06:13,279 --> 00:06:15,240 Speaker 3: hundred and eight dollars a barrel. Let me check that 112 00:06:15,839 --> 00:06:17,680 Speaker 3: for you know, my eyes are failing me this way. 113 00:06:17,720 --> 00:06:19,800 Speaker 3: I got to get Will Kennedy glasses that win. 114 00:06:20,640 --> 00:06:23,320 Speaker 2: I do better. I look at petrochemicals. 115 00:06:23,400 --> 00:06:27,640 Speaker 3: I look down the feedstock chain Will Kennedy naphtha and 116 00:06:27,680 --> 00:06:31,840 Speaker 3: that what cutter does all the petrochemical juggernaut of the 117 00:06:31,880 --> 00:06:36,960 Speaker 3: Persian the Arabian golf as well. Those prices are moonshining too, Right, 118 00:06:37,360 --> 00:06:39,120 Speaker 3: when does that industry collapse? 119 00:06:40,920 --> 00:06:43,599 Speaker 4: Well, I don't know that. Well, two things, Yes, I 120 00:06:43,640 --> 00:06:46,200 Speaker 4: think there are chemical plants that will run out of 121 00:06:46,240 --> 00:06:49,560 Speaker 4: some feedstock, and that you know, if This carries on NAPA, 122 00:06:49,600 --> 00:06:51,799 Speaker 4: which is the old product which you put into chemical 123 00:06:51,839 --> 00:06:54,120 Speaker 4: plants to make all the plastics and the chemicals that 124 00:06:54,160 --> 00:06:58,240 Speaker 4: you're talking about you rely on. They will, they will 125 00:06:58,600 --> 00:07:01,280 Speaker 4: slow down, they will if not close. The other thing 126 00:07:01,279 --> 00:07:03,200 Speaker 4: I would say was a really interesting story we saw 127 00:07:03,240 --> 00:07:06,120 Speaker 4: out of Germany today, which is BASF, the great big 128 00:07:06,160 --> 00:07:10,440 Speaker 4: German chemical giant, operates this enormous plant in western Germany. 129 00:07:11,000 --> 00:07:13,000 Speaker 4: It said it's going to have to raise the plice 130 00:07:13,000 --> 00:07:15,360 Speaker 4: of some of its products by thirty percent. And that 131 00:07:15,400 --> 00:07:17,560 Speaker 4: goes back to the point I made to you earlier. 132 00:07:17,600 --> 00:07:22,200 Speaker 4: We are starting to see the impact of this war, 133 00:07:22,560 --> 00:07:24,840 Speaker 4: of what it's doing to the energy system ripple through 134 00:07:24,840 --> 00:07:26,720 Speaker 4: the economy. It's early days, but you can see it 135 00:07:26,800 --> 00:07:27,560 Speaker 4: starting to happen. 136 00:07:27,800 --> 00:07:31,200 Speaker 3: And short notice of Queen Victoria Street. Will Kennedy joins 137 00:07:31,280 --> 00:07:34,880 Speaker 3: us the news director of all of our coverage of 138 00:07:34,920 --> 00:07:41,360 Speaker 3: this war and all of the Greater Ema region as well. 139 00:07:41,520 --> 00:07:45,720 Speaker 3: Stay with us more from Bloomberg Surveillance coming up after this. 140 00:07:52,960 --> 00:07:56,559 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 141 00:07:56,600 --> 00:07:59,760 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 142 00:07:59,840 --> 00:08:03,240 Speaker 1: our Wellkarplay and Android Otto with the Bloomberg Business Up 143 00:08:03,440 --> 00:08:05,160 Speaker 1: or watch us live on YouTube. 144 00:08:05,400 --> 00:08:09,080 Speaker 3: Patiently waiting is someone with one of the most difficult 145 00:08:09,160 --> 00:08:12,640 Speaker 3: jobs on Global Wall Street, Tiny Faikoui with a senior 146 00:08:12,640 --> 00:08:16,880 Speaker 3: director Economic and Market Strategy and working with Drew Madison 147 00:08:17,040 --> 00:08:17,679 Speaker 3: met life. 148 00:08:17,720 --> 00:08:20,120 Speaker 2: What is it like working with the machine. 149 00:08:20,640 --> 00:08:22,960 Speaker 7: Drew madis He's great. 150 00:08:23,080 --> 00:08:27,760 Speaker 8: He's definitely got a lot of stories for everything. He 151 00:08:27,840 --> 00:08:31,160 Speaker 8: has a movie quote for everything. I have seen none 152 00:08:31,160 --> 00:08:35,480 Speaker 8: of the movies that he quotes, but I'm getting an education. 153 00:08:35,920 --> 00:08:37,960 Speaker 3: Barry ike Agreen with us in the nine o'clock are 154 00:08:38,000 --> 00:08:41,280 Speaker 3: from Berkeley. You were down south through the fabulous international 155 00:08:41,320 --> 00:08:45,760 Speaker 3: program at UCLA. My hero there was axel Leyanovud from 156 00:08:45,880 --> 00:08:50,240 Speaker 3: years and years ago. But in your international economics, how 157 00:08:50,280 --> 00:08:52,160 Speaker 3: do you link together this war? 158 00:08:53,679 --> 00:08:58,520 Speaker 8: So the way really the it all goes through oil. 159 00:08:58,760 --> 00:09:01,080 Speaker 8: I mean, this is not any knew that people are 160 00:09:01,120 --> 00:09:03,840 Speaker 8: talking about. I will point out that there are all 161 00:09:03,880 --> 00:09:07,160 Speaker 8: these non oil commodities that are also getting affected. So 162 00:09:07,640 --> 00:09:10,240 Speaker 8: we're having a little bit of a supply chain issue 163 00:09:11,520 --> 00:09:15,680 Speaker 8: in terms of the commodities that are supposed to be 164 00:09:15,720 --> 00:09:19,920 Speaker 8: going into the golf, the containers that are supposed to 165 00:09:19,920 --> 00:09:22,520 Speaker 8: be leaving the golf, they're getting scrambled a bit, but 166 00:09:22,720 --> 00:09:25,640 Speaker 8: really it's all about the oil. And I think you 167 00:09:25,679 --> 00:09:30,320 Speaker 8: know clearly this is the news this morning, and the prices, 168 00:09:30,400 --> 00:09:32,240 Speaker 8: the oil prices are very concerning. 169 00:09:32,720 --> 00:09:34,080 Speaker 5: So how do we think about this, Tony. 170 00:09:34,200 --> 00:09:36,680 Speaker 6: I think a lot of economists when this war first 171 00:09:36,760 --> 00:09:39,480 Speaker 6: started to say, it's okay, the economy can deal with 172 00:09:39,520 --> 00:09:42,040 Speaker 6: it unless we are higher for longer. 173 00:09:42,960 --> 00:09:45,440 Speaker 5: When does the longer become kind of now? I mean, 174 00:09:45,760 --> 00:09:47,319 Speaker 5: it seems like we're getting there. 175 00:09:47,920 --> 00:09:49,800 Speaker 8: So the thing that I've really been paying a lot 176 00:09:49,840 --> 00:09:52,280 Speaker 8: of attention to the last couple of days is the 177 00:09:52,760 --> 00:09:56,439 Speaker 8: break events, right in terms of what does it look 178 00:09:56,600 --> 00:09:59,280 Speaker 8: like now versus what it looked like in twenty twenty one, 179 00:09:59,360 --> 00:10:00,320 Speaker 8: twenty twenty two. 180 00:10:00,960 --> 00:10:01,640 Speaker 2: What do you see? 181 00:10:01,720 --> 00:10:04,080 Speaker 8: So if you look at the five year five or 182 00:10:04,080 --> 00:10:07,480 Speaker 8: five year forwards, at least until I think last night, 183 00:10:07,559 --> 00:10:12,400 Speaker 8: they were actually down relative to let's say mid feb. Right, 184 00:10:12,520 --> 00:10:18,160 Speaker 8: And that's but the problem that we're seeing. So here's 185 00:10:18,200 --> 00:10:21,440 Speaker 8: the thing is that the Fed had been looking at 186 00:10:21,480 --> 00:10:24,120 Speaker 8: the five or five year forward in twenty twenty one 187 00:10:24,240 --> 00:10:28,880 Speaker 8: seeing no movement, saying inflation expectations are well anchored. They 188 00:10:28,920 --> 00:10:31,480 Speaker 8: were late to the they were late to the to 189 00:10:31,559 --> 00:10:35,360 Speaker 8: the party when they when they started hiking, because they 190 00:10:35,360 --> 00:10:38,800 Speaker 8: were so focused on that long term inflation expectation. What 191 00:10:38,920 --> 00:10:41,640 Speaker 8: they perhaps might now do is look a little bit 192 00:10:41,679 --> 00:10:43,760 Speaker 8: more at the five year break even. 193 00:10:43,880 --> 00:10:46,160 Speaker 3: I'm going to unpack this five year five year forwards 194 00:10:46,240 --> 00:10:49,880 Speaker 3: is jargon, folks, for if you go out five years 195 00:10:50,280 --> 00:10:55,000 Speaker 3: and then guesstimate another five years, what's your guestimate a yield? 196 00:10:55,040 --> 00:10:56,080 Speaker 2: Did I get that right? Well? 197 00:10:56,360 --> 00:10:59,959 Speaker 5: I think so forward inflation inspection expectations, like. 198 00:10:59,880 --> 00:11:02,880 Speaker 3: The red SOX opportunity spread training is a five year 199 00:11:03,160 --> 00:11:04,040 Speaker 3: five year forward. 200 00:11:04,040 --> 00:11:04,280 Speaker 1: Look. 201 00:11:04,679 --> 00:11:06,360 Speaker 6: What do you think we're going to hear from our 202 00:11:06,400 --> 00:11:10,120 Speaker 6: Federal Reserve chairman today as it relates to perhaps some 203 00:11:10,160 --> 00:11:13,240 Speaker 6: of these inflationary issues stemming from the war, perhaps some 204 00:11:13,280 --> 00:11:16,319 Speaker 6: of the slower economic growth that may result from the war. 205 00:11:16,360 --> 00:11:18,040 Speaker 5: Of this drags on, what do you think the Fed 206 00:11:18,040 --> 00:11:19,280 Speaker 5: will or how will they deal with it? 207 00:11:20,480 --> 00:11:20,600 Speaker 6: So? 208 00:11:20,720 --> 00:11:27,240 Speaker 8: I think the really interesting question is does he need 209 00:11:27,280 --> 00:11:31,880 Speaker 8: to start discussing the possibility of a hike. 210 00:11:31,800 --> 00:11:34,600 Speaker 9: As a next move. I don't think that will be 211 00:11:34,640 --> 00:11:35,320 Speaker 9: the next move. 212 00:11:35,360 --> 00:11:39,040 Speaker 8: We actually still have three cuts for the balance of 213 00:11:39,080 --> 00:11:41,120 Speaker 8: the year. Later in the second half of the year, 214 00:11:42,320 --> 00:11:47,400 Speaker 8: but if there's a real increase in the five year, 215 00:11:47,400 --> 00:11:51,960 Speaker 8: five year forward or the five year then they need 216 00:11:51,960 --> 00:11:54,679 Speaker 8: to start preparing for that possibility. 217 00:11:54,920 --> 00:11:58,000 Speaker 6: So I mean again, I guess the point here for 218 00:11:58,160 --> 00:12:01,200 Speaker 6: the markets is this love of uncertainty here. How do 219 00:12:01,200 --> 00:12:05,120 Speaker 6: you presh into that uncertainty into your GDP forecast, your 220 00:12:05,120 --> 00:12:06,120 Speaker 6: inflation forecast? 221 00:12:06,440 --> 00:12:08,000 Speaker 5: Is that something that can even be done yet? 222 00:12:08,920 --> 00:12:11,680 Speaker 8: So yeah, I think that's something we're we are honestly 223 00:12:11,760 --> 00:12:14,439 Speaker 8: trying to punt a little bit a few more, few 224 00:12:14,480 --> 00:12:16,960 Speaker 8: more weeks. There's that four to six weeks magic number 225 00:12:17,080 --> 00:12:19,280 Speaker 8: that we're trying to see. What are the what are 226 00:12:19,320 --> 00:12:22,200 Speaker 8: the impacts, what are the longer term effects? I doubt 227 00:12:22,200 --> 00:12:25,400 Speaker 8: we're going to see sixty dollars a barrow, right, Tony, 228 00:12:25,480 --> 00:12:25,880 Speaker 8: We're going. 229 00:12:25,840 --> 00:12:27,720 Speaker 3: To have to run the breaking news. But thank you, 230 00:12:27,760 --> 00:12:30,720 Speaker 3: so can you come in again. I would be thrilled 231 00:12:30,760 --> 00:12:33,160 Speaker 3: to have you and Drew together in the studio. I 232 00:12:33,200 --> 00:12:35,040 Speaker 3: know you're not on speaking terms, but they would be 233 00:12:35,120 --> 00:12:38,320 Speaker 3: really really good to have in Okay, thank you so much, 234 00:12:38,640 --> 00:12:42,760 Speaker 3: life Tony for coopy with us with that life, stay 235 00:12:42,800 --> 00:12:46,680 Speaker 3: with us. More from Bloomberg Surveillance coming up after this. 236 00:12:53,920 --> 00:12:57,480 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live 237 00:12:57,559 --> 00:13:01,079 Speaker 1: weekday afternoons from seven to ten am. Easter Listen on Apple, 238 00:13:01,120 --> 00:13:04,480 Speaker 1: Karplay and Android Otto with the Bloomberg Business Up, or 239 00:13:04,600 --> 00:13:06,280 Speaker 1: watch us live on YouTube. 240 00:13:06,600 --> 00:13:10,200 Speaker 3: Money Beyond Borders it is a Christine two hundred and 241 00:13:10,240 --> 00:13:13,960 Speaker 3: forty definitive pages to follow on from my book of 242 00:13:14,000 --> 00:13:17,360 Speaker 3: the summer last year. Money Beyond Borders is Berry icon 243 00:13:17,440 --> 00:13:21,800 Speaker 3: Green of Berkeley. We're honored that our definitive international economics 244 00:13:22,080 --> 00:13:25,880 Speaker 3: professor could join us here amid war and crisis. Berry. 245 00:13:25,920 --> 00:13:27,439 Speaker 2: I want to talk about the book briefly. 246 00:13:27,520 --> 00:13:29,960 Speaker 3: We'll do it again here as we get to the 247 00:13:30,200 --> 00:13:32,679 Speaker 3: summer down at the bottom. I mean, come on, you're 248 00:13:32,720 --> 00:13:36,120 Speaker 3: stealing from rogue off of Harvard Berry your last chapter 249 00:13:36,600 --> 00:13:41,760 Speaker 3: Our currency our problem, Ken said, Our currency, your problem. 250 00:13:42,080 --> 00:13:45,160 Speaker 3: Tell us why the dollar right now is our currency 251 00:13:45,440 --> 00:13:46,200 Speaker 3: our problem? 252 00:13:47,840 --> 00:13:51,680 Speaker 10: I think the dollars fake will be determined in the 253 00:13:51,800 --> 00:13:58,160 Speaker 10: United States by threats to the FED, exploding public debts, 254 00:13:58,760 --> 00:14:03,280 Speaker 10: questions about the rule of law, and weakening alliances with 255 00:14:04,320 --> 00:14:08,320 Speaker 10: partners who hold and use our currency because they trust us. 256 00:14:08,440 --> 00:14:12,360 Speaker 10: So ultimately it is our currency, our problem. I don't 257 00:14:12,400 --> 00:14:15,400 Speaker 10: think I stole it from Ken. I think Ken took 258 00:14:15,400 --> 00:14:19,080 Speaker 10: it from John Connolly. Richard Nixon's treasury set here. 259 00:14:19,560 --> 00:14:21,040 Speaker 2: No one knows who Richard Nixon is. 260 00:14:21,080 --> 00:14:21,280 Speaker 8: Bary. 261 00:14:21,320 --> 00:14:22,880 Speaker 2: I'm sorry, it's too ancient literature. 262 00:14:22,960 --> 00:14:25,160 Speaker 3: So it's someone if it's my book of this summer, 263 00:14:25,200 --> 00:14:28,040 Speaker 3: And say Alicia Levine went to me and she said 264 00:14:28,040 --> 00:14:30,160 Speaker 3: to me, I need a book for my brats to read. 265 00:14:30,560 --> 00:14:33,040 Speaker 3: I mean, why should a twenty two year old kid, 266 00:14:33,120 --> 00:14:36,760 Speaker 3: after Golden Feathers and all your other work, why should 267 00:14:36,760 --> 00:14:38,080 Speaker 3: they read money Bey. 268 00:14:38,000 --> 00:14:42,400 Speaker 10: On Borders Because there is a longer history. The book 269 00:14:42,480 --> 00:14:47,840 Speaker 10: goes back gulp. Two five hundred years to the advent 270 00:14:47,880 --> 00:14:52,040 Speaker 10: of coinage, to the cross border use of Greek and 271 00:14:52,280 --> 00:14:56,400 Speaker 10: Roman coins, to the use of the coins of the 272 00:14:56,400 --> 00:15:00,800 Speaker 10: Byzantine Empire all around the Mediterranean into Asia. There's a 273 00:15:00,880 --> 00:15:04,040 Speaker 10: longer history we can learn from Barry. 274 00:15:04,800 --> 00:15:07,960 Speaker 6: Last four weeks, the markets had to adjust to a 275 00:15:08,080 --> 00:15:12,240 Speaker 6: different macroeconomic outlook, perhaps as it relates to energy, given 276 00:15:12,280 --> 00:15:14,640 Speaker 6: what's going on in the Mid East. How does that 277 00:15:15,120 --> 00:15:20,120 Speaker 6: factor into your economic outlook, whether it means higher inflation, 278 00:15:20,360 --> 00:15:24,680 Speaker 6: may be slower growth resulting from some of this geopolitics. 279 00:15:24,720 --> 00:15:26,760 Speaker 6: How do you factor that in or do you look 280 00:15:26,800 --> 00:15:27,200 Speaker 6: past it? 281 00:15:28,320 --> 00:15:33,920 Speaker 10: Well, the one reassuring observation is that dollars safe haven 282 00:15:34,000 --> 00:15:39,200 Speaker 10: status says kind of mildly reasserted itself in the first 283 00:15:39,280 --> 00:15:42,480 Speaker 10: two days of the month after the war broke out. 284 00:15:42,520 --> 00:15:46,320 Speaker 10: At the end of February, the dollar jumped up by 285 00:15:46,360 --> 00:15:49,880 Speaker 10: more than it has in any two day period in 286 00:15:49,920 --> 00:15:53,720 Speaker 10: a year. That's reassuring. On the other hand, I worry 287 00:15:53,760 --> 00:15:58,200 Speaker 10: about more chatter around the FED, more criticism of the 288 00:15:58,240 --> 00:16:01,640 Speaker 10: FED coming from the White House, and that threats to 289 00:16:01,720 --> 00:16:06,120 Speaker 10: the independent independence of the Central Bank becoming a factor again. 290 00:16:06,000 --> 00:16:07,680 Speaker 3: As we get to the summer. Barry, I want to 291 00:16:07,680 --> 00:16:10,480 Speaker 3: get you in for a commer conversation. We've got huge 292 00:16:10,480 --> 00:16:14,080 Speaker 3: breaking news right now, but why not One final question 293 00:16:14,200 --> 00:16:20,440 Speaker 3: is synthesize your decades of ownership of our international economics 294 00:16:20,480 --> 00:16:24,200 Speaker 3: with what we see at the FED in the rhetoric 295 00:16:24,400 --> 00:16:28,320 Speaker 3: of the President of the United States. Let's say Nick 296 00:16:28,440 --> 00:16:33,240 Speaker 3: Burns or even Secretary Rubio could get you in for 297 00:16:33,320 --> 00:16:36,000 Speaker 3: a cup of coffee with a president. How would you 298 00:16:36,080 --> 00:16:37,560 Speaker 3: advise President Trump? 299 00:16:38,760 --> 00:16:43,280 Speaker 10: Well, I think President Trump's advisors understand the point that 300 00:16:44,360 --> 00:16:48,160 Speaker 10: respecting the independence of the FED is one of the 301 00:16:48,160 --> 00:16:52,560 Speaker 10: foundation stones of the dollars global role. They have to 302 00:16:52,600 --> 00:16:57,480 Speaker 10: convince their principle of the point. And I think that's 303 00:16:57,560 --> 00:16:58,560 Speaker 10: the hard part. 304 00:16:59,160 --> 00:16:59,400 Speaker 1: Barry. 305 00:16:59,400 --> 00:17:00,880 Speaker 2: I agree. One final question. 306 00:17:00,960 --> 00:17:03,520 Speaker 3: This headline just coming out, which spans a history of 307 00:17:03,720 --> 00:17:07,280 Speaker 3: icon Green. The President of the United States waives the 308 00:17:07,440 --> 00:17:11,840 Speaker 3: Jones Act in bid curb high fuel prices. 309 00:17:12,320 --> 00:17:17,320 Speaker 2: The Jones Act is going to take forever to have effect, right, right. 310 00:17:17,400 --> 00:17:20,480 Speaker 10: Many of the things that have been suggested to bring 311 00:17:20,560 --> 00:17:25,359 Speaker 10: oil prices back down will take many months at a 312 00:17:25,359 --> 00:17:30,879 Speaker 10: minimum to have any visible effects. So I think a 313 00:17:30,920 --> 00:17:36,320 Speaker 10: lot of this is posturing, if you will, But that's 314 00:17:36,359 --> 00:17:37,560 Speaker 10: what's available. 315 00:17:37,800 --> 00:17:39,919 Speaker 3: You can hear a lot from me about this folks 316 00:17:39,960 --> 00:17:42,479 Speaker 3: on Twitter and LinkedIn as well. The new book Money 317 00:17:42,600 --> 00:17:47,200 Speaker 3: Beyond Borders Beyond Timely global currencies from carasis to crypto 318 00:17:47,880 --> 00:17:51,040 Speaker 3: very icon Green of Berkeley. It is my book of 319 00:17:51,080 --> 00:17:56,080 Speaker 3: the summer. And stay with us. More from Bloomberg Surveillance 320 00:17:56,160 --> 00:17:57,480 Speaker 3: coming up after this. 321 00:18:04,760 --> 00:18:08,320 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 322 00:18:08,400 --> 00:18:11,560 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 323 00:18:11,640 --> 00:18:15,320 Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or 324 00:18:15,480 --> 00:18:17,080 Speaker 1: watch us live on YouTube. 325 00:18:17,160 --> 00:18:20,040 Speaker 3: We are beyond privileged to drive the conversation for the 326 00:18:20,119 --> 00:18:25,800 Speaker 3: BNY we Wealth head of investment strategist Alicia Levigne joining 327 00:18:25,920 --> 00:18:26,720 Speaker 3: us this morning. 328 00:18:27,280 --> 00:18:31,080 Speaker 2: What are your clients doing at one hundred and eight. 329 00:18:31,320 --> 00:18:33,439 Speaker 9: Rent cruit Nothing. 330 00:18:34,200 --> 00:18:37,800 Speaker 11: Our clients are not doing anything because what we've learned 331 00:18:37,840 --> 00:18:41,240 Speaker 11: over history, and we've talked about this unfortunately way too 332 00:18:41,240 --> 00:18:44,480 Speaker 11: many times in the last five to six years, is 333 00:18:44,520 --> 00:18:48,840 Speaker 11: that oil spikes and geopolitical events have very short lived 334 00:18:48,960 --> 00:18:52,480 Speaker 11: effects on asset pricing, both in the bond market and 335 00:18:52,520 --> 00:18:55,439 Speaker 11: the equity market, right, and that if this goes on 336 00:18:56,160 --> 00:19:00,280 Speaker 11: for not much longer, that ultimately the oil spike will 337 00:19:00,280 --> 00:19:03,480 Speaker 11: get priced out of the energy markets, priced out of 338 00:19:03,520 --> 00:19:08,159 Speaker 11: the equity market. And they've learned we can hedge around it, 339 00:19:08,240 --> 00:19:10,480 Speaker 11: we can head short term volatility, but we're not making 340 00:19:10,520 --> 00:19:11,240 Speaker 11: fundamental RNs. 341 00:19:11,240 --> 00:19:12,800 Speaker 2: I've got eight ways to go here, folks. 342 00:19:12,880 --> 00:19:16,360 Speaker 3: Alicia Levine is the queen of mathematics in the racket. 343 00:19:16,359 --> 00:19:18,080 Speaker 2: I mean, there's no other way to put it. 344 00:19:18,119 --> 00:19:21,400 Speaker 3: You and I are saying this stochastic and hedges are 345 00:19:21,440 --> 00:19:25,399 Speaker 3: in place, but you have to rehdge. What's your ex 346 00:19:25,600 --> 00:19:28,840 Speaker 3: access to where the rehedge becomes problematic. 347 00:19:29,720 --> 00:19:31,720 Speaker 9: Look, you can't time this thing. 348 00:19:31,800 --> 00:19:35,840 Speaker 11: We came into the world right sort of end of 349 00:19:35,920 --> 00:19:39,879 Speaker 11: December early January saying it's going to be a raucous 350 00:19:39,920 --> 00:19:42,239 Speaker 11: market out there, and in fact it was. You know, 351 00:19:42,320 --> 00:19:44,720 Speaker 11: the headline, let's just take the S and P for 352 00:19:44,760 --> 00:19:48,320 Speaker 11: a second, was violently flat for the first two months 353 00:19:48,320 --> 00:19:51,119 Speaker 11: of the year. But you had a seventy percent dispersion 354 00:19:51,240 --> 00:19:54,600 Speaker 11: between the winning sectors and the losing sectors. And we 355 00:19:54,600 --> 00:19:58,000 Speaker 11: haven't seen anything like that. Not pricing in a recession. 356 00:19:58,080 --> 00:20:01,959 Speaker 11: We're pricing in maybe a recession some areas of the economy. 357 00:20:02,560 --> 00:20:05,119 Speaker 11: And so the top line was flat, and if you 358 00:20:05,320 --> 00:20:08,480 Speaker 11: hedged it, or if you took risk in different areas, 359 00:20:08,840 --> 00:20:11,760 Speaker 11: you probably had a very interesting first part of the year. 360 00:20:12,040 --> 00:20:18,600 Speaker 11: We had international vastly outperforming the US, and we had downcaps, small. 361 00:20:18,320 --> 00:20:20,080 Speaker 9: And mid vastly unperformance toplane. 362 00:20:20,119 --> 00:20:22,240 Speaker 11: So you come into this with a mix of vol 363 00:20:22,600 --> 00:20:25,920 Speaker 11: What did we find out, you know, starting March first, well, 364 00:20:25,920 --> 00:20:29,840 Speaker 11: actually tech was up coming into today. Since March first, 365 00:20:30,200 --> 00:20:32,280 Speaker 11: the SMP was barely down, down two and a half 366 00:20:32,359 --> 00:20:35,600 Speaker 11: percent coming intoday. Gold was down seven percent since the 367 00:20:35,640 --> 00:20:39,439 Speaker 11: Iran strikes. That's weird. Okay, yields are up. It's a 368 00:20:39,440 --> 00:20:42,600 Speaker 11: flattening of the yeld curve. Not great for the financial sector, 369 00:20:42,720 --> 00:20:45,600 Speaker 11: but global yields are up much more since March first. 370 00:20:45,640 --> 00:20:47,080 Speaker 11: And then what that means is the rest of the 371 00:20:47,080 --> 00:20:50,119 Speaker 11: world is much more exposed to the oil risk, and 372 00:20:50,240 --> 00:20:53,800 Speaker 11: here in the US it's about duration. We think you 373 00:20:54,040 --> 00:20:57,840 Speaker 11: probably have underpriced all asset classes for the risk. But 374 00:20:57,920 --> 00:21:01,000 Speaker 11: we also went to a place where saying, you know, 375 00:21:01,400 --> 00:21:03,040 Speaker 11: at the beginning of this, Okay, if this goes on 376 00:21:03,119 --> 00:21:06,320 Speaker 11: for two weeks, the markets are okay. Then we were like, okay, 377 00:21:06,320 --> 00:21:08,199 Speaker 11: if it goes on for four weeks, the market now 378 00:21:08,200 --> 00:21:10,560 Speaker 11: we're up to, like, ay, six weeks, it's probably okay. 379 00:21:11,160 --> 00:21:13,200 Speaker 11: And so the duration issue may not even be real. 380 00:21:13,320 --> 00:21:15,800 Speaker 3: Well, moments ago one oh eight eighty two, we're going 381 00:21:15,840 --> 00:21:17,639 Speaker 3: to hit a one oh nine here in seconds. 382 00:21:17,800 --> 00:21:20,040 Speaker 6: Are you surprised that maybe, let's just take the US 383 00:21:20,080 --> 00:21:23,639 Speaker 6: equity markets that they haven't sold off more given the 384 00:21:23,680 --> 00:21:27,240 Speaker 6: potential impact from inflation on growth. 385 00:21:27,280 --> 00:21:28,880 Speaker 5: If this thing drags out a little. 386 00:21:28,640 --> 00:21:29,600 Speaker 9: Bit more, I'm shocked. 387 00:21:30,280 --> 00:21:33,320 Speaker 11: I'm shocked, But I think the lessons from history again, 388 00:21:33,400 --> 00:21:36,800 Speaker 11: you know, we had we had Ukraine just four short 389 00:21:36,920 --> 00:21:40,720 Speaker 11: years ago, we had COVID, not geopolitical, but quite a 390 00:21:40,760 --> 00:21:44,320 Speaker 11: shock to the markets. You know, the lesson is, you know, 391 00:21:44,480 --> 00:21:45,240 Speaker 11: these things. 392 00:21:45,040 --> 00:21:45,880 Speaker 9: Get priced out. 393 00:21:46,160 --> 00:21:48,640 Speaker 11: But I am shocked that we're not down at least 394 00:21:48,640 --> 00:21:51,399 Speaker 11: ten percent, And I think coming into the year, we 395 00:21:51,440 --> 00:21:54,280 Speaker 11: thought we could have a year like that anyway, much 396 00:21:54,280 --> 00:21:57,960 Speaker 11: more volatility. We were telling clients, much more volatile year. 397 00:21:58,080 --> 00:22:00,440 Speaker 11: You come in with the twenty two times forward earnings. 398 00:22:00,560 --> 00:22:03,840 Speaker 11: Even if you have earnings up at fifteen percent, you 399 00:22:03,960 --> 00:22:06,199 Speaker 11: still have some volve built in. 400 00:22:06,520 --> 00:22:08,680 Speaker 3: But you, Bruno de Perna seing teleb you're one of 401 00:22:08,720 --> 00:22:10,920 Speaker 3: the few people that can ask this question to are 402 00:22:10,920 --> 00:22:15,200 Speaker 3: we too sophisticated and oh so sure? In our derivatives 403 00:22:15,200 --> 00:22:18,159 Speaker 3: and hedging. I found, like Alan Greenspan, in our hedging 404 00:22:18,200 --> 00:22:22,040 Speaker 3: and derivative apparatus, we've got this whole hierarchy now that 405 00:22:22,160 --> 00:22:25,960 Speaker 3: leads to assurance stochastic outcomes. 406 00:22:26,119 --> 00:22:31,600 Speaker 11: Until until think of Liberation Day and then four trading 407 00:22:31,680 --> 00:22:34,880 Speaker 11: days later, Eh, we're going to postpone it, and then 408 00:22:35,040 --> 00:22:37,359 Speaker 11: everything the shorts that were put in place, the hedges 409 00:22:37,400 --> 00:22:40,480 Speaker 11: were put in place, everything got blown up. In the end, 410 00:22:41,320 --> 00:22:46,360 Speaker 11: the negativity rarely wins unless you're having a financial crisis. 411 00:22:46,440 --> 00:22:49,320 Speaker 11: Unless you have a credit crunch and a financial crisis, 412 00:22:49,880 --> 00:22:53,480 Speaker 11: it doesn't work. And you have to be so acute 413 00:22:54,080 --> 00:22:57,200 Speaker 11: and perfect on your timing, and it's rare to get 414 00:22:57,200 --> 00:22:59,680 Speaker 11: that right, some people do. 415 00:22:59,240 --> 00:23:03,320 Speaker 2: Do you remember Paul, like portfolio insurance. You know, we're 416 00:23:03,400 --> 00:23:06,640 Speaker 2: all going, what is that? And now it's the Alicia 417 00:23:06,760 --> 00:23:07,520 Speaker 2: Levigne world. 418 00:23:07,720 --> 00:23:11,240 Speaker 11: I know, so okay, that's scary exactly and we're all 419 00:23:11,240 --> 00:23:11,840 Speaker 11: just living in it. 420 00:23:12,200 --> 00:23:14,879 Speaker 6: What is your message then to your clients as you 421 00:23:14,920 --> 00:23:16,560 Speaker 6: go out and I know there's a lot of demands 422 00:23:16,560 --> 00:23:18,080 Speaker 6: on your time to talk to your clients about what's 423 00:23:18,080 --> 00:23:18,480 Speaker 6: going on. 424 00:23:18,600 --> 00:23:20,159 Speaker 9: Look, we give that straight. 425 00:23:20,520 --> 00:23:20,720 Speaker 3: You know. 426 00:23:21,040 --> 00:23:24,199 Speaker 11: I was talking on you know, to your anchors on 427 00:23:24,280 --> 00:23:27,040 Speaker 11: Bloomberg TV just now, saying like, I think that the 428 00:23:27,160 --> 00:23:29,600 Speaker 11: reporting on the war is not fully giving us the 429 00:23:29,640 --> 00:23:33,560 Speaker 11: accurate picture. I think it's interesting. I think, for probably 430 00:23:33,600 --> 00:23:36,239 Speaker 11: intelligence reasons, we don't really know what we're hitting, Like 431 00:23:36,280 --> 00:23:39,040 Speaker 11: you're getting, oh, we hit seven thousand targets, we tend okay, right, 432 00:23:39,040 --> 00:23:41,240 Speaker 11: it's a number, top line. You don't really get deeper 433 00:23:41,240 --> 00:23:44,760 Speaker 11: than that. So I think that the Pannicans and the 434 00:23:44,800 --> 00:23:47,760 Speaker 11: doom and gloom may not actually be how this ends. 435 00:23:48,240 --> 00:23:51,800 Speaker 11: It's very attractive to be negative, and it's very attractive 436 00:23:51,840 --> 00:23:55,119 Speaker 11: and you sound more sophisticated when you're negative. I know, 437 00:23:55,200 --> 00:23:56,880 Speaker 11: I have to make money for my clients, Like that's 438 00:23:56,920 --> 00:23:59,160 Speaker 11: my job, right, and I don't get to just talk 439 00:23:59,200 --> 00:24:03,280 Speaker 11: about it out being actionable. So clients do not seem 440 00:24:03,280 --> 00:24:05,680 Speaker 11: this nervous. They were more nervous last year with teneriffs, 441 00:24:05,840 --> 00:24:10,720 Speaker 11: much more nervous, and we had much more, more difficult conversations. 442 00:24:11,200 --> 00:24:12,560 Speaker 9: This is not affecting people. 443 00:24:12,840 --> 00:24:17,080 Speaker 11: The US is energy independent, you know, I Ran, I 444 00:24:17,160 --> 00:24:21,200 Speaker 11: just did a study yesterday. Bring WTI to eighty five 445 00:24:21,280 --> 00:24:24,480 Speaker 11: dollars a barrel for two months, and tell me the 446 00:24:24,560 --> 00:24:28,400 Speaker 11: effect on inflation and growth for one year after that. 447 00:24:29,000 --> 00:24:29,600 Speaker 9: And the effect of. 448 00:24:29,920 --> 00:24:33,199 Speaker 11: Inflation is point one two point two percent and the 449 00:24:33,200 --> 00:24:35,080 Speaker 11: effect on growth is point zero. 450 00:24:35,440 --> 00:24:38,160 Speaker 3: General, the eighty two point six percent of our audience 451 00:24:38,240 --> 00:24:40,760 Speaker 3: totally disagrees with what you just said. I know, I 452 00:24:40,760 --> 00:24:44,719 Speaker 3: mean society, Paul, I'm in this. It's like manufacturing multiplayer. 453 00:24:44,960 --> 00:24:47,080 Speaker 3: I'm like, you got to be kidding me. We go 454 00:24:47,160 --> 00:24:51,200 Speaker 3: to John Tucker now, surveillance, Hummer, hydrocarbon analyst. 455 00:24:51,320 --> 00:24:52,840 Speaker 2: Right now, what are we paying for? Gallon? 456 00:24:52,960 --> 00:24:55,520 Speaker 12: Well, that digital light it is like an ad all 457 00:24:55,560 --> 00:24:58,960 Speaker 12: over the highways, you know, and it's close to four dollars. Now, 458 00:24:59,160 --> 00:25:00,080 Speaker 12: it's a week. 459 00:25:00,000 --> 00:25:02,240 Speaker 2: When your life changed at five dollars a gallon. 460 00:25:02,280 --> 00:25:05,840 Speaker 12: Well, I didn't buy the large extra large wah wah coffee. 461 00:25:05,880 --> 00:25:10,000 Speaker 3: Okay, So John Tucker there in the income and substitution effect, 462 00:25:10,000 --> 00:25:12,280 Speaker 3: he is a surveyor on summer thirty two gallons. You 463 00:25:12,320 --> 00:25:14,960 Speaker 3: do the math at five dollars a barrel. Moments ago 464 00:25:15,040 --> 00:25:19,760 Speaker 3: Paul Sweeney one hundred and ninety dollars on Brent Crude, Alisia, Levine, 465 00:25:20,160 --> 00:25:22,280 Speaker 3: b and Y with our Paul Sweeney. 466 00:25:22,000 --> 00:25:25,560 Speaker 6: Alicia prior to it ran the I guess the trade 467 00:25:25,600 --> 00:25:27,439 Speaker 6: if you will, out there was kind of rotation. We 468 00:25:27,440 --> 00:25:30,040 Speaker 6: saw that starting in late and twenty twenty five, rotation 469 00:25:30,080 --> 00:25:31,679 Speaker 6: out of some of the growth your names of tech 470 00:25:31,800 --> 00:25:35,000 Speaker 6: names into some other maybe cyclical areas small and midcaps. 471 00:25:35,400 --> 00:25:36,159 Speaker 5: Is that still a thing? 472 00:25:36,880 --> 00:25:38,960 Speaker 11: So I'm so glad you asked that, because we just 473 00:25:39,080 --> 00:25:41,800 Speaker 11: did our like monthly spotlight. 474 00:25:41,440 --> 00:25:43,359 Speaker 9: And we called it rotating rotation. 475 00:25:43,680 --> 00:25:43,960 Speaker 2: Okay. 476 00:25:44,080 --> 00:25:46,440 Speaker 11: I think tech leads from here, and I think it's 477 00:25:46,800 --> 00:25:50,000 Speaker 11: very analogous to what happened going into Liberation Day last year, 478 00:25:50,400 --> 00:25:54,000 Speaker 11: where like the US got smoked compared to the rest 479 00:25:54,040 --> 00:25:57,520 Speaker 11: of the world, and actually after April ninth, the US 480 00:25:57,600 --> 00:25:59,480 Speaker 11: ol performed for the rest of the year, but so 481 00:25:59,680 --> 00:26:02,280 Speaker 11: Wolf fully underperformed the entire year because you had so 482 00:26:02,359 --> 00:26:03,359 Speaker 11: much in the first quarter. 483 00:26:03,720 --> 00:26:08,400 Speaker 9: I think the dollar states structurally stronger. That will help tech. 484 00:26:08,960 --> 00:26:11,520 Speaker 9: We you know, and look what's happened to global yields. 485 00:26:11,560 --> 00:26:12,239 Speaker 9: They've shot up. 486 00:26:12,600 --> 00:26:15,000 Speaker 11: So for the rest of the world, this really does 487 00:26:15,119 --> 00:26:18,399 Speaker 11: have to be over sooner rather than later. For the US, 488 00:26:18,480 --> 00:26:23,240 Speaker 11: it's just relatively more insulated. You know, software sound thirty percent. 489 00:26:23,760 --> 00:26:28,560 Speaker 11: Financials have been weak. There are places to shop now the. 490 00:26:28,640 --> 00:26:32,280 Speaker 3: Fixed income space. I mean, I get it that we're protected, 491 00:26:32,359 --> 00:26:36,760 Speaker 3: we're energy independent, but on fixed income, I mean, it's 492 00:26:36,840 --> 00:26:39,520 Speaker 3: got it. At some point, Paul, I got to be looking. 493 00:26:40,000 --> 00:26:42,280 Speaker 3: I got a thirty euro up two beeps, four point 494 00:26:42,359 --> 00:26:45,200 Speaker 3: eighty six percent? Are we going to enjoy a five 495 00:26:45,280 --> 00:26:47,280 Speaker 3: percent yield? And what does it mean for the Alicia 496 00:26:47,359 --> 00:26:48,240 Speaker 3: Levine space. 497 00:26:48,480 --> 00:26:52,359 Speaker 11: Look, look, we've been focused our clients and the belly 498 00:26:52,440 --> 00:26:54,440 Speaker 11: of the curve really for the last few years. That 499 00:26:54,960 --> 00:26:57,080 Speaker 11: felt like it's a place where you could take advantage 500 00:26:57,119 --> 00:27:00,840 Speaker 11: of FED cutting moral, disinflation, moral and you don't get 501 00:27:00,880 --> 00:27:04,240 Speaker 11: really hurt further out. You know, some people think that 502 00:27:04,320 --> 00:27:06,440 Speaker 11: we really have disinflation on the other side of this, 503 00:27:06,520 --> 00:27:08,159 Speaker 11: because you're going to lap at all, it's all going 504 00:27:08,240 --> 00:27:09,760 Speaker 11: to be lapped. You're going to get year over year, 505 00:27:10,119 --> 00:27:13,080 Speaker 11: it's going to look like a decrease in inflation, and 506 00:27:13,200 --> 00:27:15,720 Speaker 11: you really have the deflationary effects of what's happening in 507 00:27:15,760 --> 00:27:18,800 Speaker 11: the labor market and what's happening with AI. There is 508 00:27:18,840 --> 00:27:22,680 Speaker 11: a proper debate about whether we have an inflationary world 509 00:27:23,160 --> 00:27:25,119 Speaker 11: or a deflationary world. And I think that is a 510 00:27:25,240 --> 00:27:28,359 Speaker 11: really interesting debate. So for fixed income, we'd still be 511 00:27:28,400 --> 00:27:30,359 Speaker 11: in the belly here because I think just the supply 512 00:27:30,520 --> 00:27:33,639 Speaker 11: issue on the long end is a complicated world for 513 00:27:33,720 --> 00:27:34,600 Speaker 11: fix income investors. 514 00:27:34,640 --> 00:27:35,639 Speaker 6: What do you think we're going to hear from our 515 00:27:35,680 --> 00:27:37,520 Speaker 6: freder Reserve here today? There are already a lot of 516 00:27:37,560 --> 00:27:39,399 Speaker 6: focusing between a rock and a hard place from the 517 00:27:39,480 --> 00:27:40,120 Speaker 6: data perspective. 518 00:27:40,160 --> 00:27:42,040 Speaker 5: Now, I have to deal with Iran like the rest 519 00:27:42,080 --> 00:27:42,320 Speaker 5: of us. 520 00:27:42,640 --> 00:27:45,760 Speaker 11: Right, So those statements are written two weeks ago, Oh okay, 521 00:27:45,960 --> 00:27:49,879 Speaker 11: and so the you know, the data from this morning 522 00:27:49,960 --> 00:27:52,600 Speaker 11: PPI from this morning is not going to be factored in. 523 00:27:52,720 --> 00:27:54,399 Speaker 11: It will be part of the Q and A obviously 524 00:27:54,480 --> 00:27:58,560 Speaker 11: in the presser. Look, I think you know Powell's going 525 00:27:58,600 --> 00:28:01,080 Speaker 11: to reiterate there's inflation in the system. There was inflation 526 00:28:01,240 --> 00:28:06,119 Speaker 11: in the system before the Iran strikes. It's proper to 527 00:28:06,240 --> 00:28:09,800 Speaker 11: be on hold here, and the question is you know 528 00:28:09,880 --> 00:28:13,720 Speaker 11: that data by definition is backward looking, and I think 529 00:28:13,760 --> 00:28:16,320 Speaker 11: he's going to be pressed on that. Most people would 530 00:28:16,320 --> 00:28:18,840 Speaker 11: think we have an inflationary shock in the next couple 531 00:28:18,920 --> 00:28:22,280 Speaker 11: of months. Probably no disagreement, and I'll be pressure on Kevin. 532 00:28:22,080 --> 00:28:24,920 Speaker 3: Wilwe So again commercial for your folks in this time 533 00:28:24,960 --> 00:28:27,120 Speaker 3: of distress, and we'll roll into the ten o'clock hour 534 00:28:27,800 --> 00:28:31,359 Speaker 3: as well. Scarlett Foo and Paul Sweeney. They're the vis 535 00:28:31,480 --> 00:28:34,600 Speaker 3: right now, way better than I expected. Paul when I 536 00:28:34,720 --> 00:28:38,400 Speaker 3: look twenty two point ninety one, So you say you 537 00:28:38,520 --> 00:28:43,080 Speaker 3: like technology, bearings cover Pounding Table by Microsoft. 538 00:28:43,560 --> 00:28:45,360 Speaker 2: I know you don't do individual names. 539 00:28:45,880 --> 00:28:50,000 Speaker 3: Is your definition of technology comfortable Mag seven's. 540 00:28:49,960 --> 00:28:51,200 Speaker 2: Or is it more esoteric? 541 00:28:51,520 --> 00:28:53,440 Speaker 11: So I think I think you can get into the 542 00:28:53,520 --> 00:28:56,880 Speaker 11: Mag seven here. I think that some areas of software 543 00:28:56,920 --> 00:28:59,760 Speaker 11: you have to be very careful. I think the story 544 00:29:00,080 --> 00:29:04,240 Speaker 11: of the disintermediation of business models is likely right on 545 00:29:04,360 --> 00:29:06,800 Speaker 11: the margin, and I don't know how far that goes, 546 00:29:06,880 --> 00:29:10,080 Speaker 11: but that's enough to kind of put a cabash a 547 00:29:10,200 --> 00:29:13,800 Speaker 11: multiples and it's really up to the sectors to deliver revenue. 548 00:29:13,880 --> 00:29:16,480 Speaker 11: Going forward, you're going to get into trouble with earnings 549 00:29:16,520 --> 00:29:19,120 Speaker 11: reports if the revenue isn't there, the growth rate isn't there, 550 00:29:19,360 --> 00:29:21,760 Speaker 11: because it's going to signal that actually there may be 551 00:29:21,840 --> 00:29:22,880 Speaker 11: a terminal value here. 552 00:29:23,160 --> 00:29:25,240 Speaker 9: I'd be careful in some of the software sectors. 553 00:29:26,000 --> 00:29:28,800 Speaker 11: But I think tech, simply because it's been so rerated, 554 00:29:29,640 --> 00:29:31,600 Speaker 11: is a place where you can go shopping and you've 555 00:29:31,600 --> 00:29:34,080 Speaker 11: got to do your fundamental work here. I still think 556 00:29:34,200 --> 00:29:37,600 Speaker 11: the banks are good here, so I'm not saying financials. 557 00:29:37,720 --> 00:29:39,680 Speaker 11: I'm saying the banks. So I know we've had a 558 00:29:39,840 --> 00:29:42,640 Speaker 11: flattening of the old curve since the war started. We 559 00:29:42,720 --> 00:29:45,040 Speaker 11: actually had a coming into the year. Also, the favorite 560 00:29:45,080 --> 00:29:47,440 Speaker 11: trade was steepening. That was the most crowded trade that 561 00:29:47,560 --> 00:29:49,920 Speaker 11: in the weaker dollar. Those were the twin trades. I 562 00:29:50,000 --> 00:29:52,600 Speaker 11: think financials have got rerated a little bit, and with 563 00:29:52,680 --> 00:29:55,480 Speaker 11: the deregulation coming, it's still going to be deal flow. 564 00:29:55,840 --> 00:29:57,280 Speaker 11: I like the big banks here as well. 565 00:29:57,880 --> 00:29:58,680 Speaker 5: We have the DXY. 566 00:29:58,760 --> 00:30:01,400 Speaker 6: Speaking of the dollar right back near one hundred, is 567 00:30:01,480 --> 00:30:04,640 Speaker 6: that are the days of the weakish dollar over? 568 00:30:05,400 --> 00:30:08,280 Speaker 11: I think that On the one hand, I would say 569 00:30:08,320 --> 00:30:10,680 Speaker 11: I'm shocked the dollar. Okay, the dollar is up about 570 00:30:10,800 --> 00:30:13,600 Speaker 11: three percent since March first. I would have thought that 571 00:30:13,640 --> 00:30:16,520 Speaker 11: would be more, but again, I think there'll be a 572 00:30:16,600 --> 00:30:19,200 Speaker 11: bid on the dollar here and it's going to start 573 00:30:19,280 --> 00:30:21,360 Speaker 11: to kind of there'll be another trade in the market. 574 00:30:21,600 --> 00:30:27,080 Speaker 11: Those were the most popular trades weeker dollar international, cell tech. 575 00:30:27,280 --> 00:30:29,560 Speaker 2: Can you stick around into Oil's one ten of barrel? 576 00:30:29,760 --> 00:30:30,320 Speaker 2: I'm kidding. 577 00:30:30,600 --> 00:30:33,280 Speaker 3: We should thank you so much on short notice and 578 00:30:33,400 --> 00:30:37,000 Speaker 3: wonderful to ever and Alicia Levine from a quantitative standpoint, 579 00:30:37,240 --> 00:30:40,280 Speaker 3: absolutely definitive. She is at being why wealth. 580 00:30:40,320 --> 00:30:43,560 Speaker 2: Can we thank her? Stay with us? 581 00:30:43,880 --> 00:30:47,000 Speaker 3: More from Bloomberg Surveillance coming up after this. 582 00:30:54,360 --> 00:30:57,920 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live 583 00:30:58,040 --> 00:31:01,560 Speaker 1: weekday afternoons from seven to ten an listen on Apple 584 00:31:01,600 --> 00:31:04,880 Speaker 1: Karplay and Android Otto with the Bloomberg Business app, or 585 00:31:05,080 --> 00:31:06,560 Speaker 1: what is live on YouTube? 586 00:31:06,760 --> 00:31:09,440 Speaker 2: The newspaper has got to get to it, no question 587 00:31:09,680 --> 00:31:10,040 Speaker 2: about that. 588 00:31:10,200 --> 00:31:13,800 Speaker 3: Alexis Christopher's with his Future's up twenty one the Vicks 589 00:31:13,880 --> 00:31:16,320 Speaker 3: twenty two point zero eight, Alexis, what do you. 590 00:31:16,960 --> 00:31:19,360 Speaker 7: Want to start with Disney? Big day for this company. 591 00:31:19,480 --> 00:31:23,200 Speaker 7: A new chek here. Bob Eiger officially handing over the 592 00:31:23,320 --> 00:31:26,080 Speaker 7: reins at one pm Eastern today to former Parks chief 593 00:31:26,200 --> 00:31:29,520 Speaker 7: Josh Tomorrow. And Variety had a great look back at 594 00:31:29,600 --> 00:31:33,000 Speaker 7: Iiger's long tenure, which you know was two different times, 595 00:31:33,080 --> 00:31:35,920 Speaker 7: right he was CEO. So they're calling him a transformative 596 00:31:36,000 --> 00:31:39,400 Speaker 7: leader at Disney. During his first tenure, which lasted fifteen years, 597 00:31:39,920 --> 00:31:43,360 Speaker 7: all the big M and a's happened, Pixar, Marvel Entertainment, 598 00:31:43,480 --> 00:31:47,959 Speaker 7: Lucasfilm really transforming, right Disney. They think he overpaid though 599 00:31:47,960 --> 00:31:50,000 Speaker 7: a lot of people think he overpaid for twenty first 600 00:31:50,000 --> 00:31:52,440 Speaker 7: century Fox. It was a seventy one billion dollar deal 601 00:31:52,680 --> 00:31:54,440 Speaker 7: and they don't think it's paid off quite as much 602 00:31:54,440 --> 00:31:55,160 Speaker 7: as they had hoped. 603 00:31:55,640 --> 00:31:58,360 Speaker 6: Yeah, it's tough, but I mean, you know, most investors 604 00:31:58,400 --> 00:31:59,920 Speaker 6: would tell you Bob Iger can stay as long as 605 00:32:00,040 --> 00:32:02,600 Speaker 6: he once. That being said, a big mark against him 606 00:32:02,680 --> 00:32:07,160 Speaker 6: is his poor succession planning at the company. He had 607 00:32:07,200 --> 00:32:09,480 Speaker 6: it set up and it was going to work perfectly 608 00:32:10,200 --> 00:32:11,160 Speaker 6: until he changed his mind. 609 00:32:11,640 --> 00:32:14,240 Speaker 3: All those guys, these heavy hitters with their eight thousand 610 00:32:14,280 --> 00:32:17,120 Speaker 3: square foot you know, fourth home, what do they all 611 00:32:17,200 --> 00:32:20,719 Speaker 3: think of? Zevlav pokin in seven hundred million off this transit. 612 00:32:20,840 --> 00:32:23,040 Speaker 5: That's what happens when you work for a John Malone company. 613 00:32:23,240 --> 00:32:24,520 Speaker 5: You make a lot of money. 614 00:32:26,560 --> 00:32:28,960 Speaker 6: He just pays his senior folks in stock and stock 615 00:32:29,000 --> 00:32:31,320 Speaker 6: and stock, and eventually it's going to pay off. 616 00:32:31,360 --> 00:32:36,600 Speaker 5: And mister Zaslov did tremendously well for Warner Brothers Discovery shareholders. 617 00:32:37,320 --> 00:32:41,480 Speaker 3: So remember that first day Eisner had a stock transaction off. 618 00:32:41,320 --> 00:32:45,800 Speaker 2: The video games, right, it was amazing. It was that revolutionary. People. 619 00:32:45,960 --> 00:32:48,880 Speaker 6: People complain about Wall Street folks getting overpaid. Go take 620 00:32:48,880 --> 00:32:51,000 Speaker 6: a look at media. That's just extraordinary. 621 00:32:51,120 --> 00:32:52,200 Speaker 2: Alexis number two. 622 00:32:52,280 --> 00:32:54,040 Speaker 7: What do you have number two? I want to stick 623 00:32:54,080 --> 00:32:58,680 Speaker 7: with Disney. Uh so the Washington Post has this story. 624 00:32:59,120 --> 00:33:00,400 Speaker 7: Oh no, you know what, I didn't do that. I 625 00:33:00,480 --> 00:33:02,080 Speaker 7: did that earlier today. I don't want to mess up 626 00:33:02,120 --> 00:33:04,720 Speaker 7: our control room. All right, guys, don't worry. We're going 627 00:33:04,800 --> 00:33:07,760 Speaker 7: to do this story. Why your striving shame have done 628 00:33:07,760 --> 00:33:11,240 Speaker 7: that talking to myself over here? Why your private banker 629 00:33:11,680 --> 00:33:15,240 Speaker 7: is now handling your travel and shopping needs. This is 630 00:33:15,280 --> 00:33:18,000 Speaker 7: for sort of the uber wealthy folks. So they it's 631 00:33:18,000 --> 00:33:20,680 Speaker 7: a one stop shop. You not only go for your 632 00:33:21,120 --> 00:33:23,800 Speaker 7: money management, but you go for your travel. Oh what 633 00:33:23,960 --> 00:33:26,040 Speaker 7: about my aviation needs? Can you help me with that? 634 00:33:26,200 --> 00:33:26,320 Speaker 6: Oh? 635 00:33:26,400 --> 00:33:32,960 Speaker 7: How about divorce proceedings or prenupt Please? They want to 636 00:33:32,960 --> 00:33:34,640 Speaker 7: be your one stop shop. Because what they're trying to 637 00:33:34,680 --> 00:33:35,960 Speaker 7: do is they're trying to get you to stay, and 638 00:33:36,000 --> 00:33:38,280 Speaker 7: not only get you to stay, but entice the next 639 00:33:38,400 --> 00:33:39,760 Speaker 7: generation coming out. 640 00:33:39,760 --> 00:33:42,280 Speaker 3: Oh so it's circuitous and that if you have to 641 00:33:42,480 --> 00:33:47,640 Speaker 3: sell the middle child a plane ticket to wherever, your 642 00:33:47,760 --> 00:33:49,200 Speaker 3: private banker can do it for you. 643 00:33:49,800 --> 00:33:52,640 Speaker 7: Yeah, I mean that's the idea. Okay, So JP Morgan 644 00:33:52,760 --> 00:33:56,320 Speaker 7: just for instance, Private Bank in September unveiled Lifestyle Services. 645 00:33:57,040 --> 00:33:59,960 Speaker 7: It is a platform connecting clients with vendors on everything 646 00:34:00,080 --> 00:34:02,840 Speaker 7: from staffing your home to paying your bills to value 647 00:34:02,840 --> 00:34:03,239 Speaker 7: in your art. 648 00:34:03,280 --> 00:34:06,959 Speaker 2: I told you it's for the right style. Lifestyle account. 649 00:34:07,040 --> 00:34:09,080 Speaker 2: Used to be a Christmas club account exactly. 650 00:34:09,200 --> 00:34:09,400 Speaker 7: You know. 651 00:34:10,160 --> 00:34:12,400 Speaker 5: Okay, Antonio c is not doing that for me at ubs, 652 00:34:12,520 --> 00:34:13,960 Speaker 5: but just put the money to work. 653 00:34:14,000 --> 00:34:15,000 Speaker 2: What do you gotten next? All right? 654 00:34:15,080 --> 00:34:15,520 Speaker 3: What do I have? 655 00:34:15,680 --> 00:34:15,960 Speaker 5: All right? 656 00:34:15,960 --> 00:34:19,480 Speaker 7: I want to go back to the oscars because there 657 00:34:19,600 --> 00:34:22,280 Speaker 7: is a story in the New York Post today about 658 00:34:22,400 --> 00:34:26,560 Speaker 7: how they said that a lot of people seem to 659 00:34:26,719 --> 00:34:28,960 Speaker 7: know more than they let on when it came to 660 00:34:29,040 --> 00:34:32,920 Speaker 7: the OSCARS this past year, and insiders are encouraging them 661 00:34:33,000 --> 00:34:37,280 Speaker 7: to now show their hand. They're saying that prediction market betting, 662 00:34:37,400 --> 00:34:40,120 Speaker 7: like on sites like Calshie and poly Market had a 663 00:34:40,160 --> 00:34:45,640 Speaker 7: bumper Academy Awards because just hours before the show, a 664 00:34:45,719 --> 00:34:48,880 Speaker 7: lot of folks got everything right Best Actor, Best Actress, 665 00:34:49,000 --> 00:34:52,000 Speaker 7: Best Film. And they're saying, how did this happen? Why 666 00:34:52,040 --> 00:34:54,279 Speaker 7: do so many people get it right? The experts are saying, 667 00:34:54,280 --> 00:34:57,160 Speaker 7: it shouldn't be a surprise that these prediction markets quite 668 00:34:57,239 --> 00:34:59,719 Speaker 7: accurately tell you what's going to be happening, better than 669 00:34:59,719 --> 00:35:01,279 Speaker 7: a lot of other analytics out there. 670 00:35:01,640 --> 00:35:04,960 Speaker 1: Awesome, Thank you so much for This is the Bloomberg 671 00:35:05,080 --> 00:35:09,880 Speaker 1: Surveillance podcast, available on Apple, Spotify, and anywhere else you 672 00:35:10,000 --> 00:35:13,799 Speaker 1: get your podcasts. Listen live each weekday, seven to ten 673 00:35:13,840 --> 00:35:18,400 Speaker 1: am Eastern on Bloomberg dot com, the iHeartRadio app, tune In, 674 00:35:18,760 --> 00:35:21,880 Speaker 1: and the Bloomberg Business app. You can also watch us 675 00:35:22,000 --> 00:35:26,040 Speaker 1: live every weekday on YouTube and always on the Bloomberg terminal.