Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside
Speaker 1: my co host Matt Miller. Every business day we bring
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
Speaker 1: at Bloomberg dot com slash podcast. All right, we are
Speaker 1: going to talk about she Jing Ping's capitalist SmackDown Sparks
Speaker 1: one trillion Dollar Reckoning. That's the title of the Big
Speaker 1: Take today and Tom Orlick, one of the authors, joins
Speaker 1: us to discuss UM. And it's been such an interesting
Speaker 1: process to watch. Tom. So many people have different ideas
Speaker 1: of what's going on, from the ant U I p
Speaker 1: O to UM, what happened with d D and now
Speaker 1: with the ed tech UM move. The question is is
Speaker 1: it about you know, Uh Jing Ping's grip on power
Speaker 1: or is this really about UM data security? Or could
Speaker 1: it be about supporting the middle class? What do you see?
Speaker 1: I think it's all of the above. UM Si Jinping
Speaker 1: in twenty two will be looking for the NOD to
Speaker 1: take a third term as president, the term as chair
Speaker 1: of the Communist Party so building public support ahead of
Speaker 1: that is crucial. At the same time, I think this
Speaker 1: is a Chinese government which is willing to wield the
Speaker 1: kind of the big stick of authoritarian power in order
Speaker 1: to try and deliver on some social priorities. So that
Speaker 1: includes national security, making sure that sensitive data isn't leaking
Speaker 1: over oversure. It also means taking a big swing at
Speaker 1: the monopoly power of companies like Ali Baba, ten Cent,
Speaker 1: making sure that workers, making sure that smaller startups get
Speaker 1: a fair shake. So there's kind of the crackdown within
Speaker 1: the market targeting private sector companies. How does that then
Speaker 1: translate into the Chinese economy? So I think what we're
Speaker 1: seeing is a Chinese government which is willing to take
Speaker 1: a short term blow to the markets, maybe even a
Speaker 1: short term blow to growth, in order to deliver on
Speaker 1: what they see as more important long term development priorities.
Speaker 1: They'll take a swing at some of the biggest tech
Speaker 1: entrepreneurs in the country, Jack mar of Ali Baba first
Speaker 1: among them, because they think that having a having big
Speaker 1: monopolies strangling competition in the economy is not going to
Speaker 1: be good for China's longer term growth, not going to
Speaker 1: be good for China's squeezed middle class. How do we
Speaker 1: know when this is over? I mean, or what's the
Speaker 1: next shooter drop? That's a really good question. So we've
Speaker 1: already had China's regulators come out swinging against the big
Speaker 1: tech companies Ali Baba, May Juan, the giant delivery company
Speaker 1: d D China's answer to Uber. We've seen them coming
Speaker 1: coming out swinging against property. One of the big frustrations
Speaker 1: for China's middle class is that property prices too expensive.
Speaker 1: They can't get their first hand on the bottom rung
Speaker 1: of the property ladder, and they've come out swinging against
Speaker 1: ed tech. The concern there is that children are spending
Speaker 1: too much time and parents are spending too much money
Speaker 1: on the educational rat race. Where do they go next, Well,
Speaker 1: one possibility could be the private medical industry. China's households
Speaker 1: they want to educate their children, they want to buy
Speaker 1: a house, they want to be healthy, and so I
Speaker 1: think it's quite likely that China's policymakers, China's regulators will
Speaker 1: take a close look at private healthcare providers next, try
Speaker 1: and make sure they're not gauging Chinese households, trying to
Speaker 1: make sure they're delivering quality care. How does the US
Speaker 1: fit into all of this time? So historically, for the
Speaker 1: last forty years, we had a trajectory where China was
Speaker 1: moving towards being a more market based economy and a
Speaker 1: more open economy, and that meant closer ties with the US.
Speaker 1: What's happened in the last four or five years, especially
Speaker 1: since the Trump administration had their turn in the White House,
Speaker 1: is that China has realized, you know what, we're facing
Speaker 1: a more hostile global environment. We're facing a US which
Speaker 1: is going to impose trade tariffs, impost sanctions, try and
Speaker 1: ally with other countries to sort of put limits on
Speaker 1: our tech development. And what that's done is it's put
Speaker 1: China into kind of defense mode. And so we're seeing
Speaker 1: China saying, you know what, maybe we don't want our
Speaker 1: tech companies to I p O in the United States.
Speaker 1: Maybe we need to do more to boost self sufficiency
Speaker 1: at home in terms of our ownership of key technologies
Speaker 1: and in terms of who's financing our develop so and
Speaker 1: I mean the the for me, the most interesting thing
Speaker 1: is that one man, or at least the head of
Speaker 1: the party, can do this right. He doesn't have to
Speaker 1: deal with all the special interests and lobbyists that we'll
Speaker 1: keep will hold America back, possibly in trying to improve
Speaker 1: what we've we've got going on here. Same I'm sure
Speaker 1: it's two in the UK, etcetera across Western democracies. How
Speaker 1: powerful is j Ping? Do I just see it that
Speaker 1: way or is he really the man? Well? I mean,
Speaker 1: she who must be obeyed was the kind of the
Speaker 1: joke when she Jinping came into power and sort of
Speaker 1: started wielding the big stick of authoritarian governance to get
Speaker 1: things done. I mean, certainly she is an incredibly powerful leader,
Speaker 1: probably the most powerful leader China has had since chair
Speaker 1: and Mao. But that comparison with Chairman Marrow, of course,
Speaker 1: also highlights some of the risks with an authoritarian governance system. Yes,
Speaker 1: we might look enviously at a Chinese system that can
Speaker 1: get things done really quickly, pushed past vested interests that
Speaker 1: try and block reforms, but let's not forget that authoritarian
Speaker 1: governments can get things right really quickly. They can also
Speaker 1: get things wrong really quickly as well, just quickly. Because
Speaker 1: we did get p M I s from China over
Speaker 1: the weekend, What do you make of the deceleration in
Speaker 1: growth there has it been over exaggerated. So there's a
Speaker 1: couple of things going on, Caylee. So the first one
Speaker 1: is kind of a normalization of China's growth. China was
Speaker 1: first into the COVID shock, also first out of the
Speaker 1: covid shock. They had their period of rapid acceleration at
Speaker 1: the end of twenty and the beginning of now great
Speaker 1: is steadying back towards a more normal level. The more
Speaker 1: troubling thing, though, is that we've also now got the
Speaker 1: virus coming back in different parts of China, some cases
Speaker 1: in Nanjing, some cases in Wuhan, which you remember was
Speaker 1: the epicenter of the virus last year. That return of
Speaker 1: the virus is prompting more controls on what people can do,
Speaker 1: more social distancing, and that is also weighing on growth
Speaker 1: heading into the second half. All right, Tom, thanks very much.
Speaker 1: Tom Warlock joining us there with his story Jumping's capitalist
Speaker 1: SmackDown sparks a trillion dollar reckoning. That is our big
Speaker 1: take for the day. You can check that out in
Speaker 1: the Bloomberg terminal if you like, Just type NI big
Speaker 1: take Go Now. I want to bring in David Cats
Speaker 1: right now. He joins us from Matrix Asset Advisors, where
Speaker 1: he is the chief investment officer, and David. We're just
Speaker 1: hearing from Dave Wilson about the optimism in this market.
Speaker 1: We're seeing targets raised left and right. Earnings are are
Speaker 1: proving out eighty nine percent growth from the same quarter
Speaker 1: last year. What do you think, I mean, how much
Speaker 1: for there can we see stocks continue to run well?
Speaker 1: We think the underlying environment is quite positive. The economy
Speaker 1: is very much on the mend. As you just said,
Speaker 1: Earnings for companies have been very strong. That level of
Speaker 1: beating consensus is probably the best we've seen in over
Speaker 1: a decade. And interestingly the beats have been in ten
Speaker 1: and twenty cents per share rather than one and two cents.
Speaker 1: So there are a lot of good things out there,
Speaker 1: and interest rates are low. Having said that, you've had
Speaker 1: an enormous rally over the last twelve and fifteen months,
Speaker 1: so we think a lot of those good things are
Speaker 1: priced into the market. From here. We're expecting a good
Speaker 1: deal of volatility, both good and bad. We think you
Speaker 1: probably will have some delta scares and some other geopolitical scares.
Speaker 1: We'd be buyers into the weakness. We would not chase
Speaker 1: rallies like today. We think ultimately stocks and the year
Speaker 1: higher than they are today, but we do expect some
Speaker 1: rotations of things that haven't worked to do better and
Speaker 1: some of the hottest areas to slow down. So, David,
Speaker 1: when you're thinking about the puity market outlook, do you
Speaker 1: just have to make a decision to ignore whatever bonds
Speaker 1: are doing. I'm looking at a tenure yield now down
Speaker 1: around one. Yeah, we don't get it. On the bond side.
Speaker 1: The economy is robust, inflation is picking up, and we
Speaker 1: think that the bond rates and yields lower is an outlier.
Speaker 1: And if anything, if you own intermediate or long term bonds,
Speaker 1: we think this is a great time to be selling,
Speaker 1: locking in your profit and shortening maturities. From a stock
Speaker 1: market perspective, on one hand, it's very good when you
Speaker 1: have low interest rates like this because it makes stocks
Speaker 1: that much more competitive, and we don't think the bond
Speaker 1: market is really for telling a slowdown in the economy
Speaker 1: or really any significant issues. Let's talk about some of
Speaker 1: your top stock picks. Um, what are you most excited
Speaker 1: about when you come to the office or when you
Speaker 1: when you're talking to a client. What what gets you
Speaker 1: going well, it's an odd thing. The things that have
Speaker 1: worked over the last year are probably what we're least
Speaker 1: excited about because a lot of the good things are
Speaker 1: already in their stock prices. So we've got a lot
Speaker 1: of technology that's had a great run. We're less enthusiastic
Speaker 1: from here. So what we're most excited about our companies
Speaker 1: that really haven't done a lot in terms of the
Speaker 1: stock price, but the businesses are very good. So we
Speaker 1: like the financials a lot here. They've had a good
Speaker 1: run in the first six months, they slowed down in
Speaker 1: the last month. We think that's a poise that refreshes,
Speaker 1: and we think you can buy companies like Bank of
Speaker 1: New York, M and T Bank, p n C, Truest
Speaker 1: all very good. We also like healthcare, which has been
Speaker 1: an absolute dog in the last seven months. We think
Speaker 1: that's boys to do better. And there are a few
Speaker 1: overlooked technology companies like a Cisco or a five Serve
Speaker 1: that we think of good long term prospects um but
Speaker 1: really haven't had this type of rally that technology overall has.
Speaker 1: How do you think about pricing power when factoring you
Speaker 1: know what stocks you want to own, what you're going
Speaker 1: to put in a portfolio, especially considering the pretty serious
Speaker 1: input cost elevation we are seeing a number of companies
Speaker 1: talking about in their earning skulls. Well, it looks like
Speaker 1: most companies feel that they can raise prices. They're just
Speaker 1: as a one or two quarter legs. So if you
Speaker 1: look at the consumer staples, for example, many of them
Speaker 1: have lowered expectations for the year because prices rose quicker
Speaker 1: than they were able to raise their own prices. We
Speaker 1: think ultimately there's going to be a catch up there,
Speaker 1: so you just want to be aware of it. But again,
Speaker 1: even in terms of some of the consumer staples, we
Speaker 1: think you can put money in, uh, simply because the
Speaker 1: stocks haven't done a lot and they're cheaper than they've
Speaker 1: been in a very long time. So a company like
Speaker 1: Coca Cola or Kimberly Clark or Kellogg, we think are
Speaker 1: very fairly priced with good prospects over the next eighteen months,
Speaker 1: and again when the economy ultimately slows down, those stocks
Speaker 1: could become attractive to investors. Again, what about Viacom, You've
Speaker 1: got that on your list, um, And I'm just wondering
Speaker 1: if the reopening has anything in store for Viacom because
Speaker 1: you know, obviously we were all stuck inside watching their content,
Speaker 1: but now we can actually get out. Well, we think
Speaker 1: that certain players will not do as well as people
Speaker 1: get out, But in terms of Viacom, they have a
Speaker 1: robust movie business, and that movie business is going to
Speaker 1: get a lot better, So we don't think they're hurt
Speaker 1: by the reopening play. We think on the margin is
Speaker 1: probably a little bit better and it's a very interesting company.
Speaker 1: Here stock said about ten times earnings. We think they
Speaker 1: definitely are going to be a winner in the streaming space.
Speaker 1: You get CBS, which is a great business, uh and
Speaker 1: Paramount which is a great business, and you're not paying
Speaker 1: a whole lot for it, so we think ultimately somebody
Speaker 1: could buy them or the stock is worth sixty to seventy,
Speaker 1: so we think it's a low risk investment. We had
Speaker 1: owned Viacom earlier this year. We had bought it um
Speaker 1: a year or two ago. We sold it anywhere from
Speaker 1: sixty to a hundred. When the stock came down in
Speaker 1: the end of March, we rebought our entire position and
Speaker 1: continue to add to it. Here, David, thanks very much,
Speaker 1: David Katz. They're talking to us from Matrix Asset Advisors,
Speaker 1: where he is chief investment Officer. David Kats and the
Speaker 1: Cats family also own those stocks that we were talking about.
Speaker 1: Just in the interest of full disclosure, this is Bloomberg.
Speaker 1: Let's talk a little bit. What's going on in European markets.
Speaker 1: We're looking at UM. Well, we saw bigger gains I
Speaker 1: guess in European markets across the board than we than
Speaker 1: we have in US markets today. UM. But the question
Speaker 1: is are there bigger gains to come, especially if you
Speaker 1: believe the reopening trade UM has yet to really hit.
Speaker 1: Tim craig Head joins US. He is a senior strategist,
Speaker 1: Senior European strategist, also the director of Research Content for
Speaker 1: Bloomberg Intelligence. So, Tim, Um, what's your read through what
Speaker 1: especially when you look at earnings in Europe versus earnings
Speaker 1: in the US. So Matt Um, We're we're pretty constructive
Speaker 1: if you look towards you look out towards the end
Speaker 1: of the year, the next several months, UM set August decide, UM,
Speaker 1: we think that you've got global economic recovery UM that
Speaker 1: transitions to expansion. We we are in the transitionary inflation
Speaker 1: camp as opposed to the persistent inflation camp. We think
Speaker 1: companies can manage through it, and that sets up a
Speaker 1: pretty good backdrop, especially for companies that are cyclically oriented. Um.
Speaker 1: You know, two Q results themselves are fed into a
Speaker 1: lot of good evidence supporting this sort of construct in
Speaker 1: our mind. Well, and earnings growth has been really solid
Speaker 1: to tim on the stocks that centered. I'm looking at
Speaker 1: average earnings growth of the companies reported thus far of
Speaker 1: a hundred and seventy six percent. I mean that is wild,
Speaker 1: and you're seeing revisions upward, revisions accelerating as well. How
Speaker 1: big of a drop off are we going to see
Speaker 1: in the third and fourth quarter? Though? Yeah, Um, it's
Speaker 1: it's a good it's a good point. Um, we're about
Speaker 1: it on our account. Um. Uh, we're about three quarters done.
Speaker 1: If you look at market cap um having reported, Um,
Speaker 1: you know our number, and we're calculating it slightly differently
Speaker 1: as a hundred. But the important point is that when
Speaker 1: we started the earnings reporting period that number was a
Speaker 1: hundred and thirties. So it's accelerated through the results period.
Speaker 1: And interesting another stat for you, UM, we're looking at
Speaker 1: roughly sixty having beat estimates having missed now European earnings
Speaker 1: are are typically a lot more blocked than in the US,
Speaker 1: where you know, US companies moved to to keep expectations
Speaker 1: low and beat UM. That doesn't happen so much over here.
Speaker 1: So these are these are extraordinary. UM, there is no doubt.
Speaker 1: You have to see a slowdown and as you get
Speaker 1: into three Q and four Q. But it's not so
Speaker 1: much the slowdown because the market already knows that. UM.
Speaker 1: In our mind, it's that revisions continue to tick up.
Speaker 1: And it's not only revisions to overall two thousand, twenty
Speaker 1: one and twenty two earnings. They are up UM. And
Speaker 1: that's true costs most of the European major markets. But
Speaker 1: actually even margin expectations are rising, which is particularly surprising
Speaker 1: giving some of the concerns that others have been voicing
Speaker 1: about inflation, and you know it's going to hit margins,
Speaker 1: It's true, except for consumer staples. That's a problem. UM.
Speaker 1: What's the problem with consumer staples? Yeah? From yeah, I'm well,
Speaker 1: I mean, from our perspective, they just don't have the
Speaker 1: economic leverage to be able to manage through UM rising costs. UM.
Speaker 1: I mean to to us, that's the one segment of
Speaker 1: the market UM, where the whole sort of cost inflation
Speaker 1: higher or raw material costs is more problematic and interesting enough,
Speaker 1: if we look at two Q results, that's the one
Speaker 1: place that actually are showing negative earnings growth, I mean
Speaker 1: through down one percent as opposed to the overall market
Speaker 1: up whatever D sixty UM. So they stand out and
Speaker 1: evaluations aren't cheap either. Can we talk about buy boxing dividends.
Speaker 1: Are we going to keep seeing those increased? Yeah? Quick
Speaker 1: answer is we think so UM and yes, you'll see
Speaker 1: what the results were seeing show UM better free cash flow,
Speaker 1: better cash generation UM. Importantly, then you've got to think
Speaker 1: about where is that being utilized and M and A
Speaker 1: is going to happen. We've done some interesting work on that.
Speaker 1: Capex is gonna happen. We need that to have a
Speaker 1: sustained economic recovery UM. In addition to some of these
Speaker 1: policy measures like the European Recovery Fund or the US
Speaker 1: Infrastructure Plan, et cetera. But importantly, shareholder renumeration is coming
Speaker 1: back to dividends, buy backs are on a rising. A
Speaker 1: big thing in Europe has been the restriction on financials,
Speaker 1: specifically banks um UH dividends and buy backs and that's
Speaker 1: being lifted by the ECB. Um. You know, nice announcement
Speaker 1: by HSBC just today with their results um actually bringing
Speaker 1: forward um uh their announcement relative to what we had
Speaker 1: not thought was going to happen until next year. So
Speaker 1: I think it's a good news. The other one I
Speaker 1: would mention to you that I think it's interesting are
Speaker 1: the commodities um, the miners and the oils which are
Speaker 1: so big. For example, for the foot see um, they're
Speaker 1: still being restrained on their capex, their bump ben dividends
Speaker 1: and buy back, which is great. And if they can
Speaker 1: restrain the capex, then you've got an opportunity for a
Speaker 1: more sustained UM sort of price environment for them, as
Speaker 1: opposed to thinking it's going to be bloom bust. All right, Tim,
Speaker 1: thanks very much for joining us. Really appreciate Tim Craighead,
Speaker 1: their senior European Strategy director of Research content for Bloomberg Intelligence,
Speaker 1: talking to us about the earnings landscape in Europe. This
Speaker 1: is Bloomberg. That would have been the big take, but
Speaker 1: we are talking now to Marcus Ashworth. Excuse me, Marcus, pleasure.
Speaker 1: I can be a big take if you want me
Speaker 1: to be, or even a big fake. No, no, no,
Speaker 1: you're the real deal. And now I remember we're gonna
Speaker 1: talk about the stay at home economy to stay at
Speaker 1: home recovery. Are we stuck there? What is your big
Speaker 1: take on that issue? Well, I'm I'm actually getting an
Speaker 1: increased worried, as I say, sitting at home rather than
Speaker 1: in the office. And I was in the office on Friday,
Speaker 1: but you know, it shocked me how empty everything was
Speaker 1: around the city of London. The tubes, the the subway,
Speaker 1: that the trains, shops which are closed. I mean, this
Speaker 1: is I know it's summer, and I know it's still
Speaker 1: theoretically in some pandemic, but we're supposed to have had
Speaker 1: Freedom Day in the UK. It really hasn't happened. It's
Speaker 1: been a damp squib and I think what worries me
Speaker 1: is that damp I have heard that phrase more times
Speaker 1: in the last week, considering that I never does everybody
Speaker 1: know what a dance squib is? I'm not sure our
Speaker 1: American listeners necessarily do, and I think a lot of
Speaker 1: British people don't even really know what a dance squib is. Marcus,
Speaker 1: care to explain something it doesn't like very well? Should
Speaker 1: we say squire is something you used to like something else,
Speaker 1: say firewoks like that. No, it just means that you know,
Speaker 1: it's not going to go off. It's not gonna go bang,
Speaker 1: and nothing's gonna happen. And you know, we've we've got
Speaker 1: to worry here because you know, the train lines are empty,
Speaker 1: the cities are are empty, and that's because people are
Speaker 1: not going back into into the city centers, which means restaurants, hospitality, etcetera.
Speaker 1: None of it flows, none of it works. Now we're
Speaker 1: seeing a lot of sectors doing better than they were before.
Speaker 1: That's because you know, but they will mean revert back
Speaker 1: to normal. Normal restaurant bookings are going to stay high
Speaker 1: forever um all the zoom meetings, etcetera. But it's the
Speaker 1: stuff which isn't going to get back to it's that
Speaker 1: stuck at ninety or now and they need an extra
Speaker 1: boost and they're not getting it. And the government ought
Speaker 1: to get a bit clever. Well, isn't this just the
Speaker 1: idea of the new normal that we can never go
Speaker 1: back to pre COVID. Well, I mean that's what we
Speaker 1: want to try and avoid. I'm not saying anything should
Speaker 1: go back to how it was. I'm saying a better
Speaker 1: way of doing it. We can all talk forever about
Speaker 1: build back better and all the other platitudes, but you're
Speaker 1: gonna get people back into the city mostly, and you've
Speaker 1: got to get people away from hunkering down and feeling
Speaker 1: scared of going back into society and a normal life.
Speaker 1: Otherwise there will be permanent scarring and you won't be
Speaker 1: able to get that back, and that's a mistake. I
Speaker 1: think that there are better things that can be done,
Speaker 1: particularly even if it minds subsidizing commuter fairs and e g.
Speaker 1: Tourists coming into the center of London. It can be
Speaker 1: done for the rest of this year or for a
Speaker 1: few months. They did a thing would eat Out to
Speaker 1: help out last summer. It perhaps they worked too well,
Speaker 1: being a super spreader event, but it got people back
Speaker 1: into restaurants and bars, and the government needs to do
Speaker 1: something similar. I'm sure where London goes it will be
Speaker 1: exact the same in New York City from what everyone
Speaker 1: tells me. So there's there there. Surely there are pieces
Speaker 1: of this that are going to stay with us forever, right,
Speaker 1: I mean, are people going to be masking forever? Are
Speaker 1: we going to be getting boosters forever. That's not your concern.
Speaker 1: Your concern is, uh, I'm trying to think of a
Speaker 1: corner shop in London. Gregg's will no longer be open
Speaker 1: for sausage rolls all day. It's it's not just that,
Speaker 1: it's just that we're not careful. We're going to end
Speaker 1: up with a halfway house whereby it's not going to
Speaker 1: satisfy and then enclosed the econom me recovery we could
Speaker 1: and should be having, and that the ends days get
Speaker 1: the engine of the economy going, which means people moving
Speaker 1: around doing things. You sure the store means you can
Speaker 1: do a three day week, or you can work from home.
Speaker 1: Sometimes that doesn't mean we lose all the benefits of
Speaker 1: what of what we've seen in the last year or two,
Speaker 1: but we really ought to get the economy functioning as
Speaker 1: best we can, and that means transportation, it means well.
Speaker 1: But if we're working, we're only working three days a
Speaker 1: week in the office. And I've noticed here, Marcus, the
Speaker 1: same things that you noticed there. Um, it's much worse
Speaker 1: than in Berlin. I say, I walk around our headquarters
Speaker 1: here at one Lexington Avenue, which used to be surrounded
Speaker 1: by businesses that we're always you know, full of you know,
Speaker 1: workers that were here for the day. So many of
Speaker 1: these businesses have closed down, not just like clothes for now,
Speaker 1: but empty and store for rent signs on the windows
Speaker 1: that that doesn't seem like it's going to come back
Speaker 1: very quickly. If you're a real estate landlord. This is permanent,
Speaker 1: permanent scarring. We're not gonna see the end of the
Speaker 1: song of five or six years. And that's I think
Speaker 1: where people aren't understanding, they aren't thinking through this fully,
Speaker 1: is that people have their circle quality of life and
Speaker 1: there's there is a happy medium, and we're not at
Speaker 1: the happy medium. We need to get stop hunkering down
Speaker 1: and get some semblance of normality back, get the economy
Speaker 1: movie again, and we will all benefit for it. But
Speaker 1: if we don't, we will we will miss out, I think,
Speaker 1: particularly the in the cities, not just but particularly in
Speaker 1: the cities. So Marcus, there's getting people using transportation and
Speaker 1: going out doing things. There's also getting people to deploy
Speaker 1: their savings. And as you point out in your piece,
Speaker 1: the savings ratio is nearly three times the pre pandemic level.
Speaker 1: What entices consumers to start, you know, emptying their bank account. Well,
Speaker 1: it's it's propensially to spend, and the people who are
Speaker 1: saving the money are the old or wealthier people who
Speaker 1: have less prepensive to spend anyway. So we're just we're
Speaker 1: just confounding, and these people may never come back into
Speaker 1: the economy in the way they were before. If don't
Speaker 1: go into the inner cities, they don't go to the theater,
Speaker 1: they don't go to the restaurants or let alone go
Speaker 1: to work in offices. But you know, there is there's
Speaker 1: a knock on effect which I think is is something
Speaker 1: which the government will end up permanently missing out on
Speaker 1: on on a percentage point or two of g d
Speaker 1: P and that has knock on effects for taxes and
Speaker 1: a whole raft of different stuff. So you know, there's
Speaker 1: been some intelligent stuff done, the furlough schemes, whole raft
Speaker 1: other things. They've missed a trick in the UK, certainly
Speaker 1: particularly with subsidizing rail fair to get people back into
Speaker 1: the office and not feel sticker shock, which is I
Speaker 1: don't know a you I walk around in restaurants and
Speaker 1: bars in the city now I am shocked about how
Speaker 1: much you know, food costs, a glass of wine costs
Speaker 1: a beer. It's it's a it's a people are price gouging,
Speaker 1: and that is putting people off even coming into this.
Speaker 1: It is unbelievable. I went to J. G. Mellen's the
Speaker 1: other day, which is I think seventy four and Lex,
Speaker 1: you've been there somewhere on the Upper East Side. I
Speaker 1: have the best burgers in New York. They're they're up there.
Speaker 1: I mean, I know, everybody has his own idea of
Speaker 1: what the best burger in New York is. I ordered
Speaker 1: a bacon cheeseburger with my kid brother. We both had
Speaker 1: fries and a beer. Ninety dollars with the fries extra. Yeah,
Speaker 1: but ninety dollars for a burger and fries. Um, it was.
Speaker 1: It was pretty insane. Marcus, thanks so much for joining us.
Speaker 1: Marcus Ashworth. There Bloomberg opinion columnists talking to us about
Speaker 1: what needs to be done in order to get the
Speaker 1: economy back to full speed. Um, we're not there yet,
Speaker 1: and especially with these delta spikes, it seems like it
Speaker 1: could take a while longer than you may have thought
Speaker 1: as well. This is Bloomberg. Thanks for listening to the
Speaker 1: Bloomberg Markets podcast. You can subscribe and listen to interviews
Speaker 1: with Apple Podcasts or whatever podcast platform you prefer. I'm
Speaker 1: Matt Miller. I'm on Twitter at Matt Miller three. Put
Speaker 1: on bo Sweeney. I'm on Twitter at pt sweeney. Before
Speaker 1: the podcast, you can always catch us worldwide at Bloomberg
Speaker 1: Radio