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Speaker 2: One of the things you get jaded out in this
Speaker 2: business is beautyless. The beautyless come out, and there's usually
Speaker 2: an angle, and I'll be honest, it usually has to
Speaker 2: do with raising revenue. And what was great about this
Speaker 2: weekend's barons? You know, I'm sitting there, you know, I
Speaker 2: got the Mimosa going the chain mimosa. You know I'm
Speaker 2: opening it up. You know, Ellen Zettner's getting a splash
Speaker 2: from Wrgan Stanley. But they did their one hundred Women
Speaker 2: in Finance. It was actually adult like, they had no remorse.
Speaker 2: It was like as a power list. So I'm looking
Speaker 2: around for strategists and lo and Behald. There's Laurie Calvicina,
Speaker 2: who we welcome now with RBC. How did you stumble
Speaker 2: upon that list? What did they see in your work?
Speaker 2: Did they actually read your reports?
Speaker 3: I hope so, I hope so. Now, to be honest,
Speaker 3: I have no idea who nominated me, But we're grateful
Speaker 3: for the honor. And you know, Tom, it's interesting. I've
Speaker 3: been doing this a long time, and you know, I
Speaker 3: had a birthday yesterday. I'm not going to tell you.
Speaker 4: How old I am, but twenty nine looking solid.
Speaker 3: Twenty nine over and over again. But I'll tell you
Speaker 3: I spent a lot of time early on in my
Speaker 3: career trying to do the job the way people told
Speaker 3: me it needed to be done, and to tell stories
Speaker 3: and have conviction and all these other things. And at
Speaker 3: some point I figured out that was not what worked
Speaker 3: for me, and I'm going to do the job the
Speaker 3: way it makes sense to me and the way I
Speaker 3: know how to do it. And I've been much happier
Speaker 3: since I made that conversion. So maybe whoever nominated for
Speaker 3: me for this list, you know, wasn't looking at the
Speaker 3: young glory, but is looking at the old world.
Speaker 2: And your conviction is to pull back your standard and
Speaker 2: porest call go through the process of that. Why did
Speaker 2: you cut your estimate?
Speaker 3: So you know, we we've been running you know, sort
Speaker 3: of a base case and a bare case since November.
Speaker 3: We thought it was going to be a highly unpredictable year.
Speaker 3: And I'll tell you, honestly, Tom, what happened last week
Speaker 3: was my economics team updated their forecasts along with our
Speaker 3: rate strategist, and they made some big changes to the
Speaker 3: GDP and inflation views. And as I was reading their report,
Speaker 3: I said, you know, I think there's a lot of
Speaker 3: we don't have to agree, by the way, we can
Speaker 3: all do whatever we want to do. But I thought
Speaker 3: that sort of the impact they showed to one q
Speaker 3: GDP and how that reverberated to the year. So they
Speaker 3: kind of had you know, kind of a flatish quarter
Speaker 3: over quarter number in one queue, and then they took
Speaker 3: their annual number from two down to one six. They
Speaker 3: made inflation stickier, They had yields moving down before moving
Speaker 3: back up at the end of the year. And I said, look,
Speaker 3: there's so much uncertainty out there right now. I'm not
Speaker 3: going to wait for this big moment of profound clarity.
Speaker 3: There are some things we can start to bake into
Speaker 3: our models now. So we flowed that through to the earnings,
Speaker 3: to the valuation model, some other number, you know, other models.
Speaker 3: Frankly that we're done on twelve month back test. I
Speaker 3: changed those to nine month forward back tests. And the
Speaker 3: numbers changed a little bit, so we felt like it
Speaker 3: was time to put that out.
Speaker 5: Primarily an earnings driven adjustment, a discount rate adjustment, or
Speaker 5: just I'm going to use the word I've heard on
Speaker 5: all the conference calls and all the it's just uncertainty
Speaker 5: out there.
Speaker 6: You know.
Speaker 3: I think the idea of uncertainty taking a toll on
Speaker 3: the economy is what really showed up in the GDP forecast,
Speaker 3: and the GDP numbers flow through to my earnings model.
Speaker 3: So we pulled that from two seventy one down to
Speaker 3: two sixty four. And also we have a GDP test
Speaker 3: and the targeting process, and we had actually said at
Speaker 3: the beginning of the year, where GDP ends up matters
Speaker 3: a great deal to this market. Two to three percent
Speaker 3: GDP historically a very strong range for the stock market.
Speaker 3: You're up about ten percent on average. But if you
Speaker 3: look at a one to two percent number, and so
Speaker 3: remember Francis and her team went down to one six,
Speaker 3: so they're squarely in the middle of that range. That
Speaker 3: is typically an onerous environment for the stock market. We're
Speaker 3: down more often than up, and your average decline is
Speaker 3: about three So moving from that two to three assumption
Speaker 3: to that one to two assumption was huge in the targeting.
Speaker 2: I would editorialize ball here that the tag team wrestling
Speaker 2: of Lori Calvisina and Francis Donald is die for Francis
Speaker 2: Donald is so damn good at GDP makeup. Frankly, mister
Speaker 2: Kearney could call upon her for Francis Donald's Canada. I mean,
Speaker 2: Francis Donald can't be one UNDERD financed women in America, right,
Speaker 2: she's Canadian list that, but trust me, if she was,
Speaker 2: she would have joined Laurie on the list.
Speaker 4: It's tom a good thing about this list.
Speaker 5: Many many of the people on this list are regulars
Speaker 5: on Bloomberg Surveillance.
Speaker 4: So we're making the right calls there.
Speaker 2: It seems like we try it every t It's like
Speaker 2: a real list. What can I say? Now, I know
Speaker 2: the real bunch of ringers.
Speaker 5: Good stuff, Laurie. So where do we go from here?
Speaker 5: You know, one could argue if the uncertainty is calls
Speaker 5: in part by the rhetoric associated with tariffs and changes
Speaker 5: in immigration policy and so on. So I don't think
Speaker 5: that's going away anytime soon. So does that suggest that
Speaker 5: there's going to be a wait to this market?
Speaker 4: For a while.
Speaker 3: So look, I was talking to someone about this this morning,
Speaker 3: and I got up early this morning. Now, so I've
Speaker 3: had a bunch of conversations. But it feels like we're
Speaker 3: stuck in a moment we need to get out of.
Speaker 3: And I don't know if we're going to be able
Speaker 3: to get stuck out of that moment or not. But
Speaker 3: the longer we are stuck in this moment where it's
Speaker 3: just tariff, tariff, tariff and uncertainty, uncertainty, uncertainty, the bigger
Speaker 3: toll that is going to take. You know, I do
Speaker 3: think as I've looked through a lot of the soft data,
Speaker 3: you know, we're consistently seeing softness on capex expectations and
Speaker 3: employment expectations. And they're not terrible yet, so you could
Speaker 3: shift them back in the other direction, but we are
Speaker 3: seeing evidence that this is having an impact.
Speaker 2: A lengthy conversation of value ed Ford Global, Wall Street,
Speaker 2: Lori Cavacina, Royal Bank of Canada RBC is with us
Speaker 2: right now in studio. We welcome all of you on
Speaker 2: your commutes across North America this morning. Good morning worldwide
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Speaker 2: So if I have a more tepid economy, I'm seeing
Speaker 2: a distribution of where SPX is down whatever, but the
Speaker 2: median or average stock including the Lori Kelvasina worlds getting
Speaker 2: hammered as well. So if I say I want to
Speaker 2: buy quality, how does Lori kelvis upweight I want to
Speaker 2: own or buy quality, how does Lori Kelvisina define that.
Speaker 3: I think quality is going to be done on a
Speaker 3: sector bisector basis within industries. You know, if I look
Speaker 3: at the Rustle two thousand right now, it's actually been
Speaker 3: acting a little bit better than I would have anticipated.
Speaker 3: That's something that's calming me down. But if you look
Speaker 3: at it within the factors within the Rustle two thousand,
Speaker 3: it is the higher quality factors that are starting to
Speaker 3: act a little bit better. You look at things like
Speaker 3: positive negative earnings. You can look at analyst rating. I
Speaker 3: tend not to do a lot of work on cash.
Speaker 2: Flow because a capex variability.
Speaker 3: Well, I mean my clients do look at cash flow.
Speaker 3: I think that's that's a big part, especially of SMID
Speaker 3: investing I'll tell you it's a nightmare from a quantitative
Speaker 3: database perspective, so I don't tend to do a lot
Speaker 3: around it.
Speaker 4: So where do we go from here?
Speaker 5: Do we think about just we had a person here,
Speaker 5: just a couple of guests ago, a couple of seconds ago,
Speaker 5: who's now in the hedge fund going to thirty to
Speaker 5: forty percent cash?
Speaker 4: Is that what you're hearing from some of your clients
Speaker 4: these days?
Speaker 3: So I have heard a little bit of that. I
Speaker 3: will tell you the conversation last week. And I was
Speaker 3: a little bit more in sort of the hedge fund
Speaker 3: derivatives world last week, and there was more of a
Speaker 3: sense of looking to buy the dip okay, and you know,
Speaker 3: sort of not entire clarity as ten percent is actually
Speaker 3: the bottom or maybe we have a bit more to go,
Speaker 3: but there was sort of a constructive bias, and I
Speaker 3: think you see that reflected in some of the options
Speaker 3: markets indicators.
Speaker 2: Right.
Speaker 3: The VIX has moved off to certain extremes we saw
Speaker 3: late last year, but things like the s dex and
Speaker 3: the T decks haven't really moved, you know, sort of
Speaker 3: indicating concern, right, but lack of kind of true fear
Speaker 3: at this point.
Speaker 2: What does multiples do? I mean, if a multiple's a ratio? Yeah,
Speaker 2: and I got market cap price whatever in the denominator,
Speaker 2: I got the Calvissina statistic. Do we get multiple compression?
Speaker 2: Where we enjoy a selected bear market?
Speaker 3: You get multiple compression. If you look at like a
Speaker 3: mediaan S and P five hundred PE, you run that
Speaker 3: against the Economic Policy Uncertainty Index, you tend to get
Speaker 3: PE compression when the policy is certain out where do
Speaker 3: you hide?
Speaker 2: So we've been telling like Sweeney's.
Speaker 3: I'll tell you Tom, the sectors are a struggle right now.
Speaker 3: And interestingly, I think every sector except tech and discretionary
Speaker 3: is outperforming in the S and P five hundred this year.
Speaker 3: So that's one bit of the strategy job that you
Speaker 3: know that's been bit easier for folks. But I don't
Speaker 3: love defensives in here. So we're underweight staples, we're neutral healthcare.
Speaker 3: We think there's policy risk on both of those. There's
Speaker 3: cheap and there's knee jerk defensivism.
Speaker 2: You know, kind of going intimism. What do you long.
Speaker 3: I've been telling people to buy financials, and I know
Speaker 3: they're cyclical, and I know they get hammered when sentiment
Speaker 3: gets hammered, and so you know, we're not sitting here
Speaker 3: saying they're not going to underperform a bit more if we,
Speaker 3: you know, have to get to a bottom and sentiment.
Speaker 3: But the U missed consumer sentiment survey is getting so
Speaker 3: bad it is actually close to recession like levels right now.
Speaker 3: And if you if you go back to our financial
Speaker 3: conference a few weeks ago, the banks sounded pretty calm
Speaker 3: and confident. I think they're going to be able to
Speaker 3: manage through this pretty well. You know, I think they
Speaker 3: sort of proved themselves post s VB. So I think
Speaker 3: we're going through a sentiment shock that's going to have
Speaker 3: some reverberations unless we have a really nasty recession. I
Speaker 3: think the banks are okay, and I think honestly they were.
Speaker 3: The sector was a little frothy before this all got started,
Speaker 3: and we've pulled that valuation froth out.
Speaker 4: I know you.
Speaker 5: Did take down your S and P five hundred earnings estimate.
Speaker 5: Do you think there's even more risk to earnings?
Speaker 3: Yeah, and look we took our number down a bit.
Speaker 3: I think we went to two sixty four. And I
Speaker 3: apologies first day new forecast. Sometimes, you know, I get
Speaker 3: the numbers a little jumbled up, but you know, we
Speaker 3: took it down from two seventy one to two sixty four,
Speaker 3: and we got there through updating the econ forecast. GDP
Speaker 3: take a huge bite out of that. The stickier inflation
Speaker 3: adds some back to the revenue line, but frankly, we
Speaker 3: also took our margin assumption down. I've been baking in
Speaker 3: some modest expansion this year. I just took it to flat.
Speaker 3: That's a guess, that's an assumption. But I've gone through
Speaker 3: so many earnings calls where you know, maybe there's one
Speaker 3: company that's you know, baked in a little bit of
Speaker 3: the China terrace, but nothing on Mexico or Canada, and
Speaker 3: even some of the others have a lot of have
Speaker 3: a lot of both and a lot of Mexico, and
Speaker 3: they haven't put any in. So we've got to go
Speaker 3: through the process of getting something in those numbers. Okay,
Speaker 3: I think it shows up in my number three Francis's
Speaker 3: GDP forecasts, but there's a lot of variability around.
Speaker 2: I only agree with that, whether nominal or real GDP.
Speaker 2: But what I find fascinating is a solution to this
Speaker 2: uncertainty for animals like you is you just bring in
Speaker 2: your X axis. I mean, what you knew three year
Speaker 2: forecast four months?
Speaker 3: I actually never have a three year forecast. I mean
Speaker 3: I always tell people get it, I'm not anymore.
Speaker 2: We used to have like a three year forecast.
Speaker 3: Well, look and look, I think that the strategy community
Speaker 3: has undergone a bit of a shift. When I started
Speaker 3: in the business, I think it was reasonable to have
Speaker 3: a twelve year forecast that you didn't have to change
Speaker 3: our twelve month forecast. You didn't have to change all
Speaker 3: that much. Things moved too quickly now and I've sort
Speaker 3: of tried to get the conversation started about, like stop
Speaker 3: writing these shame on you articles in December about the
Speaker 3: strategists who moved their targets around a couple of times
Speaker 3: that worked if you were byron Ween. That doesn't work
Speaker 3: in this day and age anymore.
Speaker 2: It maybe otter byron Ween. He was such a support.
Speaker 2: But Laurie, I mean, are you out the fourth of
Speaker 2: July with a Sweeney view.
Speaker 3: Look, you will revise as we need to revise, and
Speaker 3: as we get you know, new information that comes in,
Speaker 3: and we you know, we're very forthcoming about that. In
Speaker 3: our product. Nothing is set in stone here.
Speaker 5: Right, What are clients, what's the feeling you're getting from
Speaker 5: your clients, and how has it changed over the last
Speaker 5: now four or five six weeks Because we kind of
Speaker 5: came into this administration saying animal spirits gone.
Speaker 2: Wild, American exceptional.
Speaker 5: Exactly right, and it was a real thing back in
Speaker 5: the day. But we are one hundred and eighty degrees
Speaker 5: from that now.
Speaker 3: It seems like, you know, I think any consensus assumption
Speaker 3: there's a Trump put you know, things are going to
Speaker 3: have this big unfreezing of activity. Every consensus assumption has
Speaker 3: been thrown out the window. I think Tom hit on
Speaker 3: something important though about American exceptionalism and our Weekly today
Speaker 3: we had a couple of charts buried in the back
Speaker 3: where we were able to look at European domiciled investors
Speaker 3: and what they're doing. And they're taking money out of
Speaker 3: the US and putting it into Europe. In the US
Speaker 3: it's kind of like more neutralish on the US, but
Speaker 3: the money is flowing into Europe. So I think that,
Speaker 3: you know, regardless of whether we stabilize here in the
Speaker 3: US and the US can rebound, I think the door
Speaker 3: to Europe has been opened.
Speaker 2: Lloyd Kelvicina, thank you so much, greatly appreciate it with
Speaker 2: OURBC and of course her honor of being with Barons
Speaker 2: one hundred women in finance, along with a very good
Speaker 2: group including Ellen Zeenner.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live
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Speaker 2: Mike Green starts as strong here with Simplify asset management,
Speaker 2: more of a bigger broader view with his hedge fund
Speaker 2: experience as well. I want to get to the hedge
Speaker 2: funds in a minute. But you know when you came in,
Speaker 2: you know, you know, you got in through the rain.
Speaker 2: You said, you know, the money's moving back to Europe.
Speaker 2: What does the quote unquote money moving back to Europe
Speaker 2: due to the Dow Jones Industrial Average.
Speaker 7: Well, it really depends on where it was invested. But
Speaker 7: one of the things that we have clearly seen is
Speaker 7: a European and rest of world investment into the United States,
Speaker 7: primarily to access the MAGS seven, but honestly increasingly through
Speaker 7: things like passive total market allocations, has been invested in
Speaker 7: the United States. Now that Europe has to bring that
Speaker 7: money home. We actually are starting to see the first
Speaker 7: signs of you know what we have always talked about,
Speaker 7: its financial repression, which is directed return of assets. You've
Speaker 7: seen pension plans in the UK encouraged to bring more
Speaker 7: assets home. You're seeing headlines of you know, French banks
Speaker 7: buying into strategic wastewater and UH treatment in their in
Speaker 7: their own country. This is causing the dollar to sell
Speaker 7: off as that money comes back and converted to euros,
Speaker 7: and it's also causing US assets to sell off. And
Speaker 7: I think that was an unintended byproduct.
Speaker 2: So there's a directly into the stock market in America.
Speaker 5: So, Mike, I mean, I guess a lot of investors
Speaker 5: are trying to say, all right, this pullback in the market,
Speaker 5: is it a healthy pullback in otherwise market exactly or
Speaker 5: is it something else reflecting a new world where tariffs
Speaker 5: are the name of the game, which calls into question
Speaker 5: growth and inflation and so on.
Speaker 7: Well, I was going to joke that if April showers
Speaker 7: bring mayflowers, what the March showers bring and the answer
Speaker 7: is terrifidils, right, right, So what we are absolutely saying,
Speaker 7: I would say is not healthy, although it is necessary. Right, So,
Speaker 7: when we talk about Europe needing to reinvest in itself,
Speaker 7: when we talk about the rest of the world having
Speaker 7: to take on the border the burden from the United States,
Speaker 7: it's for defense on a global basis or at least
Speaker 7: on a regional basis. They need those funds to reinvest.
Speaker 8: Now, is this healthy?
Speaker 7: Quote unquote doesn't mean it reflects good economic outcomes. No,
Speaker 7: we know that's bad, but it is unfortunately necessary. It's
Speaker 7: probably something we should expect to see more of going
Speaker 7: forward as compared.
Speaker 5: To last Torsten slack Apollo was out with a note
Speaker 5: over the weekend saying, basically, the consumers really really slowing
Speaker 5: down here. He quoted a bunch of statistics, including last
Speaker 5: week the airlines took down their earnings, Cole's, a big
Speaker 5: retailer took down its guidance. How do you feel about
Speaker 5: the consumer here and what it means for this economy.
Speaker 7: Well, I think what we're seeing, unfortunately, is the air
Speaker 7: coming out of the Trump enthusiasm trade. So we saw
Speaker 7: a huge balance in the fourth quarter as it became
Speaker 7: apparent that Biden had withdrawn from the race, that the
Speaker 7: pivot to Kamala Harris had not worked for the Democrats.
Speaker 7: In turn, that led to a surge and consumer confidence. Unfortunately,
Speaker 7: underneath that there was just always tremendous weakness. This bifurcated
Speaker 7: economy had been something we've seen for a long time.
Speaker 7: There's been continual deterioration and consumer credit metrics, and now,
Speaker 7: of course we've got the reporting that's coming back on
Speaker 7: whether it's student loans or we're starting to see the
Speaker 7: disconcerting information coming out of the FAHA on subprime mortgage
Speaker 7: crisis that has been created there. All of this is
Speaker 7: basically just reversing that sentiment bounce and exposing what was
Speaker 7: already happening under the surface.
Speaker 5: So what do we do here? Do we get defensive?
Speaker 5: Do we buy the dip? How are you talking to
Speaker 5: your clients these days?
Speaker 7: Well, the biggest thing I would highlight, you know, one
Speaker 7: we mentioned the idea of the real rate, the ten
Speaker 7: year real rate, that seems very much at odds with
Speaker 7: almost everything else we're seeing. When there's uncertainty around investment,
Speaker 7: you should look for certainty or when you can find
Speaker 7: that opportunity, that two percent reel is a relatively attractive
Speaker 7: yield versus history. So that's one thing I'm encouraging people
Speaker 7: to make sure that they take a look at the
Speaker 7: second component is is to recognize that the markets are
Speaker 7: just like they were going into COVID. We know there's
Speaker 7: something ugly out there, we know there's problems out there,
Speaker 7: but they can't react until the flows from four oh
Speaker 7: one k is, et cetera start to deteriorate, until that
Speaker 7: non discretionary fund starts to change.
Speaker 2: Bloomberg surveillance nationwide in your commute this morning, we welcome
Speaker 2: all of you. Good morning, ninety nine one FM. Nathan Hagers, Washington,
Speaker 2: Good morning to ninety two nine FM and Boston saw
Speaker 2: some Red Sox baseball this weekend digested. I think they
Speaker 2: can be first placed by April fifteenth.
Speaker 4: Nice, don't ask me about all sixteen.
Speaker 2: All there as well, we say good morning, Bloomberg eleventh
Speaker 2: Roe zero in New York. Wherever you are in the
Speaker 2: weather tour in America, be careful out there, and to
Speaker 2: a Michael Borrow, have some good updates for you. Mike
Speaker 2: Green with us is simplify asset management?
Speaker 7: What to simplify simplify As an ETF firm, we were
Speaker 7: launched in September of twenty twenty in response to regulatory change.
Speaker 7: The facilitated the inclusion of alternative strategies and ETFs.
Speaker 2: Hedge funds within an ETF structure.
Speaker 8: Yeah, there was a big change coalition.
Speaker 7: It's going reasonably well. We've got several funds that are
Speaker 7: doing quite well. In particular, managed futures has been an
Speaker 7: area for US that's been really successful. Some of the
Speaker 7: revisions or or more conservative ways of into volatility markets
Speaker 7: have been successful for us. We've grown from about two
Speaker 7: hundred million to now about seven billion.
Speaker 2: How does long short do here? Away from simplify just
Speaker 2: as a general statement to me, it's stochastic on both sides.
Speaker 2: I'm catching a knife on both sides on a daily basis.
Speaker 7: So actually, this is one of the areas I spent
Speaker 7: a lot of time talking about passive I tend to
Speaker 7: play a bit of a psychologist role for short sellers
Speaker 7: because the problem is they are short securities that are
Speaker 7: convex in their structure, right, and so the vanguards, etc.
Speaker 7: Those passive flows, when those come in, they're larger than
Speaker 7: any one player, and as a result, people are getting
Speaker 7: shaken out and a big chunk of the volatility that
Speaker 7: we've experienced has been a breakdown in correlations, a breakdown
Speaker 7: in rotation and leadership. Is that MAGS seven turned around
Speaker 7: and went down. That caused unwinds and significant stress in
Speaker 7: the long short community that's manifested itself in that wild
Speaker 7: gyrations that we've seen.
Speaker 5: So where are you seeing funds flows today? Maybe over
Speaker 5: the last couple of months.
Speaker 7: Actually, well, it really depends on the underlying fund right,
Speaker 7: So managed futures, as I mentioned, as an area, that's
Speaker 7: one where we're seeing a lot of interest. Is people
Speaker 7: are unsure about the protection that's provided by bonds in
Speaker 7: this environment, so they're looking for alternative, non equity correlated assets.
Speaker 7: That's been an area that's attracted some funds. We're starting
Speaker 7: to see money flow into commodities again. Fears about inflation
Speaker 7: are kicking in, and obviously things like gold are attracting
Speaker 7: a ton of assets, not just domestically but also internationally.
Speaker 2: Is gold and commodities in general on a trend basis.
Speaker 2: You mentioned managed futures, but you know CTA one oh
Speaker 2: one is commodities trend? Is gold trending?
Speaker 7: Well, gold is clearly trending. We are certainly seeing elements
Speaker 7: of that. Other commodities, particularly the softs, are starting to
Speaker 7: show some indication of trend as well, and so that's
Speaker 7: been an area really started to attract some capital.
Speaker 4: So what do we do here?
Speaker 5: I mean, as it relates to kind of risk on,
Speaker 5: risk off here, I kind of feel like we're a
Speaker 5: kind of a fork in the road a little bit
Speaker 5: to here. I'm not sure people really want to jump
Speaker 5: in and sound buying this dip here.
Speaker 4: How do you guys think about it?
Speaker 8: Well, we watch it on two fronts.
Speaker 7: So one is the systematic flows we mentioned ct a's
Speaker 7: CTAs have increasingly Ata is the trend following type strategies.
Speaker 7: The trend has broken down in the Monroe trout.
Speaker 8: Good morning perfect.
Speaker 2: I was weaned on all these animals. One of them,
Speaker 2: by the way, folks, is a guy named Jay Henry
Speaker 2: from Boston. I think he has a baseball team.
Speaker 7: He has a baseball team that is always in first
Speaker 7: place at the start of the season.
Speaker 2: First place. Well, good, let's let's sake, let's digress it.
Speaker 2: Let's do it, Paul, that was great. Let's do an
Speaker 2: audible here, because Mike Green and I just take it
Speaker 2: for granted. There's a casking trend. And I'm going to
Speaker 2: say thirty five years ago, Paul Ray bar Munroe Trout
Speaker 2: a bunch of other animals figured out, this is m
Speaker 2: I T H. Who do we talk to?
Speaker 5: Up at MI I T Yes, that young lady very smarty, smart.
Speaker 2: And this is Andrew Lowe up at MI T explain
Speaker 2: CTAs and how they are better at not losing money.
Speaker 8: Well, that's a very dangerous and loaded statement.
Speaker 7: But what I would emphasize on any trend following is
Speaker 7: it's very much like an option theory, right. If you
Speaker 7: buy a call option, as the underlying moves into your
Speaker 7: strike price, the delta picks up on that, meaning that
Speaker 7: you are gaining exposure. Trend following just does the exact
Speaker 7: same thing. It increases exposure as the trend increases, but
Speaker 7: it doesn't pay the volatility premium. That's the really key component.
Speaker 7: You effectively flip flip the narrative around. You play the
Speaker 7: dealer who is delta hedging as compared to the buyer
Speaker 7: of the option who's always starting behind. Basically, you know,
Speaker 7: a three ball two strike set up.
Speaker 2: Kati Kaminski's saying, yes, that was very good. Micrain is
Speaker 2: there a trend in place right now.
Speaker 7: Well there has in the equity markets, there had been
Speaker 7: a trend, and so part of what we've actually is
Speaker 7: we've we've removed that element of trend. The CTA has
Speaker 7: been flowning out again. That's another source of these flows
Speaker 7: of funds, which is increasingly the future that we'd emphasize.
Speaker 7: So what I was highlighting earlier about what Europe's doing,
Speaker 7: it's what I would call portfolio effects, poor portfolio rebalancing effects.
Speaker 7: When people choose to make changes to their allocations. We
Speaker 7: see those flows. That impacts currencies, it impacts equities, it
Speaker 7: impacts bond.
Speaker 5: Markets, international investors. We had heard towards year end last year,
Speaker 5: maybe even into the first quot a little bit money
Speaker 5: really coming in from Europe into the US equity markets
Speaker 5: because where.
Speaker 4: Else are you going to go? And has that changed?
Speaker 7: Well, that has changed, right, So that's a component of
Speaker 7: flow has shifted. And again that's part of what I
Speaker 7: would emphasize. When you have discretionary flows, they create these
Speaker 7: kind of waves or disturbances, but it's the structural flows
Speaker 7: that really matter. And so historically we've seen an growing
Speaker 7: fraction of allocated portfolios sending money from Europe.
Speaker 8: If that changes on.
Speaker 7: A structural basis, this is a really big change in
Speaker 7: the American exceptional some story.
Speaker 2: We clearly haven't seen Catharsis yet in no way, shape
Speaker 2: or form. But with a VIX of twenty two, we're
Speaker 2: sort of middling right now.
Speaker 7: Well we are, Yeah, we really are middling. One of
Speaker 7: the things I'd emphasize though, is that the VIX used
Speaker 7: to be used for hedging prior to the advent of
Speaker 7: zero data X ray options and the shorter time component,
Speaker 7: we would have to use that thirty day point for hedging.
Speaker 7: Today not so much. We're actually we're seeing that VIX
Speaker 7: be relevant, I would argue, is heading into this option xpery,
Speaker 7: which is just in a couple of days. Obviously on
Speaker 7: Friday we see option x pery that is actually creating
Speaker 7: a condition under which a lot of funds that had
Speaker 7: created income streams.
Speaker 8: Where they'd sold foot spreads or they'd sold calls, they're somewhat.
Speaker 7: Trapped in that positioning. We're going to get a reset
Speaker 7: with this option reset. I think that could provide some
Speaker 7: relief against some of these I question you're.
Speaker 2: Thinking about, but maybe away from your remit with a
Speaker 2: FED on Wednesday. Is the geopolitics and what we're seeing
Speaker 2: at the White House so overtaken the dialogue. The narrative
Speaker 2: at the FED doesn't matter.
Speaker 8: Well, the FED always matters. Howell could surprise.
Speaker 7: I think we would all be somewhat surprised by anything
Speaker 7: meaningful coming from the FED, given the uncertainty around inflation,
Speaker 7: and candidly, given the uncertainty around the development of the economy.
Speaker 7: Those consumer sentiments components that we indicated are deteriorating at
Speaker 7: an alarming rate. And I agree with that. It hasn't
Speaker 7: yet translated into final sales, and it hasn't translated into
Speaker 7: unemployment claims. And the FED, although I think unemployment claims
Speaker 7: are incredibly misleading, the FED is very focused on that metric.
Speaker 2: Mike Green, thank you so much. Great way to start
Speaker 2: the Can we get to this every Monday? Brain Er
Speaker 2: shine you know Jach Mike Green, thank you so much.
Speaker 2: Simplify asset management.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto
Speaker 1: with the Bloomberg Business app. You can also listen live
Speaker 1: on Amazon Alexa from our flagship New York station. Just
Speaker 1: say Alexa play Bloomberg eleven thirty.
Speaker 2: Julia Coronado joins, founder President Macropolicy. Respect She's got a
Speaker 2: green plant behind her. Thank you Julia for that. And
Speaker 2: this is important, folks. This is the interview of the
Speaker 2: day because nobody's paying attention to the FED. So we're
Speaker 2: going to dive into this with doctor Coronado. We're gonna
Speaker 2: slow down and spend some time on this. Julia, how
Speaker 2: does a FED synthesize the data in this moment? Do
Speaker 2: they just step back and say we give up.
Speaker 9: Well, I don't think they're going to give up, Tom.
Speaker 9: The FED never gives up, you know that. I think
Speaker 9: what they do, though, is they do step back and
Speaker 9: they say, look, there are competing influences. There's a lot
Speaker 9: going on on the policy front. We just don't know
Speaker 9: Howell in the last his last speech stressed the net
Speaker 9: impact of all of these policies on the economy. They
Speaker 9: go different directions, and so the FED is really going
Speaker 9: to have to wait and see because look, the inflation
Speaker 9: data haven't made the progress that that had wanted. We're
Speaker 9: still hovering above their target. The labor market latest data
Speaker 9: still resilient, So they can afford to wait and see the.
Speaker 2: Money question right now. And I'm going to go back
Speaker 2: to Frank Knight at Chicago and Night in uncertainty and
Speaker 2: the idea of ambiguity. If they cut interest rates, does
Speaker 2: that boost growth, does it boost nominal GDP activity? Or
Speaker 2: we beyond that now where we really don't know the
Speaker 2: outcome of a rate cut.
Speaker 9: It's a great point, Tom. The rate cut isn't going
Speaker 9: to be the antidote to all the worries that investors
Speaker 9: and businesses have right now. There is a tremendous number
Speaker 9: of sources of uncertainty right now. Trade policy is one
Speaker 9: of them. Immigration is another, Cuts and cuts in government
Speaker 9: contracts is another. Reshaping global alliances is another. So I
Speaker 9: think there's just many sources of uncertainty. They collide with
Speaker 9: each other. It's very difficult for businesses to make longer
Speaker 9: term plans. Of course, everybody we all get up in
Speaker 9: the morning and go to work and run our businesses
Speaker 9: and do our jobs. But are you going to make
Speaker 9: the bigger decisions about hiring, about cap x, about moving
Speaker 9: forward with strategic initiatives in this environment? It's difficult, It's challenging.
Speaker 9: So Noah, Rate cut. Isn't the antidote to the uncertainty
Speaker 9: that we face.
Speaker 5: Joya, the uncertainty that you mentioned from whether it's tariff
Speaker 5: talk or just you know, doze and things like that.
Speaker 5: It's certainly calling the question growth forecasts, inflation forecasts, and
Speaker 5: we saw at the University of Michigan data last week
Speaker 5: really captured that uncertainty in the market place.
Speaker 4: Yes, the Trope.
Speaker 5: Administration says, Okay, that's some near term pain for some
Speaker 5: long term gain. Do you see the long term gain
Speaker 5: or how do you kind of think about that story?
Speaker 9: You know, it's it's difficult right now to see what
Speaker 9: the strategy is, what is the you know, we all
Speaker 9: knew that there was going to be a trade war.
Speaker 9: We believe that the focus was on unfair trading practices
Speaker 9: in China and that China would be the focal point
Speaker 9: and then there would be other secondary initiatives. And now
Speaker 9: the focal point is our main trading partners of Canada
Speaker 9: and Mexico. And what's the endgame? What's the strategy? I
Speaker 9: think that's that's what's harder to see. It's it's a
Speaker 9: little cheeky of Secretary Best to suggest that this is
Speaker 9: just near term pain for long term gain. When markets
Speaker 9: are inherently supposed to be forward looking, right, We're supposed
Speaker 9: to see through the trade offs and if we can see, okay,
Speaker 9: we're gonna get this now and then, but we can
Speaker 9: see where we're going, and markets maybe wouldn't be so
Speaker 9: volatile or struggling to see the through line of all
Speaker 9: of this. I don't think it's clear, and it's chaotic,
Speaker 9: and so I think that's what's lacking.
Speaker 2: Julia Carnado with as we continue with doctor Coronado here
Speaker 2: on the Saint Patrick's Day across the nation on your commute,
Speaker 2: we say good morning, Good morning ninety nine to one
Speaker 2: FM and a very active Washington on YouTube. Subscribe to
Speaker 2: Bloomberg Podcast. We are humbled, Paul, and I are absolutely humbled.
Speaker 2: And how it's growing each and every day, Paul, did
Speaker 2: our future is deteriorate slightly down negative two hundred, SPX,
Speaker 2: negative eighteen, the Vicks twenty two point twenty five.
Speaker 5: Absolutely, Tom, So, Julia, have you taken down or do
Speaker 5: you expect to take down your GDP? I'll look for
Speaker 5: maybe this year next year.
Speaker 9: We started the year below consensus because our emphasis was
Speaker 9: that some of the policies that are going to be
Speaker 9: negative for growth are going to happen before the policies
Speaker 9: that are positive for growth, and that seems to be
Speaker 9: playing out. So we are at one point four percent
Speaker 9: for GDP this year, and that is something that we
Speaker 9: had kind of starting where we are around two percent
Speaker 9: and then slowing as the year unfolds, given specifically reduced
Speaker 9: immigration and trade wars. I think that you know, we
Speaker 9: just did a survey of market participants, which we do
Speaker 9: every quarter ahead of the FED meetings, and investors are
Speaker 9: also taking down their median growth forecast went from two
Speaker 9: point two percent for this year down to one point
Speaker 9: five percent for this year, and that's very striking result.
Speaker 9: And we asked a lot of questions about the individual
Speaker 9: policies and the net effect of all of the policies,
Speaker 9: and on balance, they are expected to be growth negative
Speaker 9: for this year.
Speaker 2: Have you marked down nominal GDP or is it such
Speaker 2: a stagflation that inflation stays up and supports the animal spirit.
Speaker 9: We do have a little bit of the stagflation flavor,
Speaker 9: at least for this year. We kind of see this
Speaker 9: as macroeconomists unfolding with a shock to prices from tariffs,
Speaker 9: and that in and of itself is demand destroying, and
Speaker 9: that may lead to lower inflation in twenty twenty six,
Speaker 9: but what you get in the near term is a
Speaker 9: burst of inflation that keeps the FED from stepping in
Speaker 9: as early or as aggressively as they typically would.
Speaker 2: I'm absolutely fascinated in this milieu of the effect of
Speaker 2: the FED, and have they become impotent?
Speaker 9: You know, we said that before the pandemic, and then
Speaker 9: the FED stepped in and proved us wrong. So I
Speaker 9: would never say that monetary policy is impotent. What I
Speaker 9: would say is that they are likely to face, at
Speaker 9: least in the near term, conflicting pressures on their dual mandates.
Speaker 9: We may see the labor market deteriorate, but we may
Speaker 9: see inflation drift higher. That combination is just going to
Speaker 9: keep them on the sidelines for longer, unless until either
Speaker 9: the best and rosy view of a better future plays
Speaker 9: out and they don't have to do anything, or the recession,
Speaker 9: you know, ferries start to sprinkle their dust on the
Speaker 9: US economy and the FED ends up cutting rates more
Speaker 9: aggressively than is currently priced.
Speaker 2: I mean, Paul got a couple more questions in there,
Speaker 2: but The overwhelming thing to me is the labor data. Yeah,
Speaker 2: it's deteriorated at what the last four days. I mean,
Speaker 2: I'm not making this up.
Speaker 4: Now.
Speaker 2: Their hockeystick moves and we're.
Speaker 5: Going to see I mean, Joya, we're going to see
Speaker 5: some retail sales data today. I think you are a
Speaker 5: little bit neurse about that, given that you mish sentiment
Speaker 5: data from last week here.
Speaker 4: How do you think the consumer's doing right here?
Speaker 9: Yeah, you know, consumers, it's hard to count them out.
Speaker 9: They we saw some softness in January. Some of that
Speaker 9: looked to be when I look at the consumer data,
Speaker 9: I see some evidence that there was a pull forward
Speaker 9: of durable goods spending in Q four ahead of the tariff.
Speaker 9: So we saw autos and electronic sales really surge in
Speaker 9: Q four. So we're kind of due for a little
Speaker 9: bit of a pothole just because that was a pull forward.
Speaker 4: But we are going to.
Speaker 9: Look at sort of the core or the control retail
Speaker 9: sales categories, the really discretionary areas, like you know, restaurant
Speaker 9: spending or clothing spending. Our consumers being cautious in those areas,
Speaker 9: that's usually an early indicator that they're pulling back more broadly, So.
Speaker 2: You've got a central banker running Canada. Your comment on
Speaker 2: Mark Kearney's ability to lead Canada forward, Yeah.
Speaker 9: He's a He's an intriguing choice, not a politician, a
Speaker 9: central banker multiple times, certainly, you know he has the chops,
Speaker 9: he knows policy. He's been a global leader, so he
Speaker 9: has all the relationships that are kind of needed at
Speaker 9: this moment. Canada has to restructure its trading relationships, its
Speaker 9: strategic relationships given what the US is doing. And Mark
Speaker 9: Carney's I mean, I can't think of a better person
Speaker 9: to help lead that effort, which is so critical right now.
Speaker 9: So he's an unusual candidate, but but somebody that you know,
Speaker 9: he definitely has the policy depth.
Speaker 2: Julie, your plants are very green, doctor with metro policy.
Speaker 2: I tried Bector, thank you so much. Sweening to the rescue.
Speaker 2: Why are retail sales out of Monday? It's out America.
Speaker 4: I know, I'm not sure. We'll see what happens here.
Speaker 2: Eight thirty yeah, exact, fifteen minutes, folks, mind freeze. I
Speaker 2: was worried about my bracket. Yes, instead of retail sales, go.
Speaker 2: I still further I haven't got the final four, you know.
Speaker 2: I don't know if you know this, folks. They got
Speaker 2: like an eight hundred page agreement. It's like codified in
Speaker 2: page four seventy two says I have to put Purdue.
Speaker 5: Yeah, to final makers engine it's engineering staff bracket.
Speaker 2: Yep. Absolutely, I lose every year on Purdue. Are they
Speaker 2: any good this year?
Speaker 4: Not as goosed?
Speaker 5: I've been the best couple of years, I don't think,
Speaker 5: but they're always good coming out of ten.
Speaker 2: We're working at it as well. Julia Carnido, thank you
Speaker 2: so much. That was very informative.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Apple Corplay and Android
Speaker 1: Auto with the Bloomberg Business app. You can also watch
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Speaker 2: Sometimes in the in the racket, you get lucky as well.
Speaker 2: I'm going to do a statement here of all the
Speaker 2: people helping us this morning Bloomberg Surveillance. This morning, we're
Speaker 2: bunching by IBKR well US natural gas production? Will it
Speaker 2: exceed three point two seven billion cubic feet in January?
Speaker 2: At IBKR Forecast trader that yes, was recently at nine percent.
Speaker 2: Check the data spot the trends start predicting today at
Speaker 2: ibkr dot com slash forecast. Sometimes you get lucky you
Speaker 2: have somebody in because there's lots going on. Whatever they do,
Speaker 2: and then something over the weekend happens. Julie Norman established
Speaker 2: besides her fandom of the Baltimore Orioles, she established the
Speaker 2: academic study of terrorism and particularly with an angle to
Speaker 2: the Middle East. And to have her on here after
Speaker 2: what we see in Yemen is truly a pleasure from
Speaker 2: the University College London professor Norman. This morning, when we
Speaker 2: go in with jets, multimillion dollar jets, an attack the huties,
Speaker 2: Julie described the landscape of Yemen and wherever the hooties are.
Speaker 10: Yeah, good morning, Tom. I'm not sure I've created the
Speaker 10: field of terrorism studies, but nice to be with you. Yeah,
Speaker 10: I mean so, I would say at first, I would
Speaker 10: say these are not the first strikes on Yemen that
Speaker 10: the US has been taking. There were numerous strikes that
Speaker 10: were undertaken under the Biden administration when these Houthi strikes
Speaker 10: on ships in the Red Sea started over a year ago.
Speaker 10: So this has been ongoing. Yemen is a country that
Speaker 10: the government is divided. The Houthis on control the capital
Speaker 10: of Sunna and some of the northern areas. This is
Speaker 10: where most of the strikes took place. But again I
Speaker 10: would say this is something that is happening in a
Speaker 10: wider regional moment as well. A lot of this is
Speaker 10: Trump trying to put pressure on Iran. I think this
Speaker 10: is really where this where these strikes over the weekend
Speaker 10: are coming from, and we can kind of expect some escalation.
Speaker 2: What we saw over the weekend, is it like isis
Speaker 2: where we're going after leaders.
Speaker 10: I would say it's a little bit different than isis.
Speaker 10: I mean, first, this group is just very different. They're
Speaker 10: a rebel movement. They emerged about ten years ago. They
Speaker 10: again control different parts of the country, and when we're
Speaker 10: going after them now, it's mainly this not for what
Speaker 10: they're doing internally. So much is their strikes on global
Speaker 10: shipping in the Red Sea as well as US military
Speaker 10: assets there as well. Some of the strikes are targeting
Speaker 10: military infrastructure, the abilities from the Huthis themselves. But over
Speaker 10: the weekend they did start targeting leadership, and by targeting
Speaker 10: leadership that also means you're often targeting residential areas. So
Speaker 10: we did see a much higher casualty rate over the weekend,
Speaker 10: estimates over fifty, possibly as high as one hundred.
Speaker 5: Julie, what do we know about the Trump administration's policy
Speaker 5: towards Iran?
Speaker 4: How do you think they're going to approach it?
Speaker 10: Yeah, well, I mean we've obviously heard the maximum pressure
Speaker 10: speak for a while, and I think we're starting to
Speaker 10: see what that looks like. You know, we've already seen
Speaker 10: much harder sanctions going on for Iran, which was expected,
Speaker 10: but moreover, we saw this letter sent by Trump to
Speaker 10: Iran last week essentially saying you need to negotiate and
Speaker 10: essentially give up the nuclear program or be prepared for
Speaker 10: military action to take it out. And we assume that
Speaker 10: would be you know, through US and possibly with Israel
Speaker 10: as well, which has been threatened in the past. So
Speaker 10: this is what I think is rationing up now. And
Speaker 10: I think these strikes on the who Thi's were part
Speaker 10: of the Trump administration's calculations for that. With that said,
Speaker 10: for me, the Huthis operate with a bit more autonomy
Speaker 10: from Iran than I think administration is recognizing here, and
Speaker 10: I'm not sure how much Iran could rain them in
Speaker 10: even if they wanted to do.
Speaker 2: They have defenses. I mean, I just I'm trying to
Speaker 2: frame out. I get the landscape. My amateur take is
Speaker 2: it's a lot of desert, a lot of poverty. You know,
Speaker 2: I don't want to be simplistic about it. But like
Speaker 2: when Aur when our jets go in Paul Delay, like
Speaker 2: have anti aircraft. I mean, is there risks here? Professor Norman, So.
Speaker 10: I would say some, There is some. I would say,
Speaker 10: what do these do best? Is they use a lot
Speaker 10: of drones. They use a lot of strikes of their own. Externally,
Speaker 10: they don't have a super sophisticated missile defense system or
Speaker 10: something like that that I think would put us at
Speaker 10: direct risk from some of these things. But they will
Speaker 10: retaliate again mostly where they can do it best again
Speaker 10: on that shipping that's coming through the waterways, where they
Speaker 10: essentially have a straight shot there. But in terms of
Speaker 10: overall military capacity, this is obviously something where there's a
Speaker 10: reason why the US has has so many assets in
Speaker 10: the region is to to try and push back at
Speaker 10: groups like this. But even with limited sophistication, they can
Speaker 10: still be incredibly disruptive Julie.
Speaker 5: Tomorrow, there's a scheduled call between President Trump and mister Putin.
Speaker 4: What do you expect to hear from that call?
Speaker 10: Well, I would say I think we're all waiting to
Speaker 10: hear what is said. I mean, obviously there's this discussion
Speaker 10: now of a thirty day ceasefire. Ukraine has agreed to it.
Speaker 10: Putin has not said no, but has certainly said there
Speaker 10: are going to be major conditions and things he wants
Speaker 10: to discuss. We heard from Trump's envoy over the weekend
Speaker 10: that they're moving closer to some kinds of agreement. But
Speaker 10: I think what's really going to be on the table
Speaker 10: is what does Putin actually want and how willing is
Speaker 10: Trump to essentially give it to him in order to
Speaker 10: get to some kind of you know, ceasefire, pause, truce,
Speaker 10: what have you.
Speaker 2: Why should Putin agree with Trump? I don't get it.
Speaker 10: Yeah, I mean I would say I'm not sure that
Speaker 10: that he will, And I think there's probably more gap,
Speaker 10: more of a gap between them than Trump maybe wants
Speaker 10: to realize. Right now, I mean, right now, there is
Speaker 10: again this idea of re engagement with the US, ever,
Speaker 10: reopening diplomatic channels of, you know, easing some of the
Speaker 10: tensions that have obviously been in play for the last
Speaker 10: four years, and there's a lot of incentive for Russia
Speaker 10: to want that to happen.
Speaker 2: Okay, Julie, we really don't care. I mean, the reason
Speaker 2: you're on is I'm filling out my bracket. I'm fed
Speaker 2: up with Sweeney Duke, Duke Duke. I mean you do
Speaker 2: have Duke Alabama in the East as well. Do you
Speaker 2: fill out a bracket at the University of College London?
Speaker 10: Oh yeah, I mean I went to Duke Tom So
Speaker 10: I'm like, I'm all ready for brackets, and so Duke
Speaker 10: goes all the way from me every year, even when
Speaker 10: they're not having a good year. But I'm definitely going
Speaker 10: number one for Duke right now. And yeah, I'm super
Speaker 10: excited about the tournament. So I think you should listen
Speaker 10: to all these days.
Speaker 4: There we go.
Speaker 5: Hey, Julie, you know, we're two months a little bit
Speaker 5: more than two months into the President Trump administration here,
Speaker 5: and it seems to be from a foreign policy perspective,
Speaker 5: a little bit of a kind of a go at
Speaker 5: a loan type of thing, kind of disengaging to various degrees.
Speaker 5: From our our allies. As you sit back and look
Speaker 5: at this, how do you frame it out?
Speaker 10: Yeah, well, Paul, I would say here over in London,
Speaker 10: people definitely aren't sitting back. They're sitting up very rapt
Speaker 10: attention at how the US is changing very quickly. You know,
Speaker 10: there's a real worry right now, not only for the US,
Speaker 10: you know, changing on some policy things, but really being
Speaker 10: you know, potentially an unreliable actor and unreliable ally and
Speaker 10: in some ways even adversarial in many spheres. And I
Speaker 10: think the world is watching very closely to see is
Speaker 10: this just a short term run, is this bluster or
Speaker 10: is this a real change in how we do things?
Speaker 2: What does a change? Professor Norman of Trump foreign policy
Speaker 2: slash military policy first term and second term. What's the
Speaker 2: distinction there?
Speaker 10: Yeah, So I would say first term Trump overall was
Speaker 10: more isolationist, and we heard that, you know language obviously
Speaker 10: in the campaign for the second term also. But with
Speaker 10: the second term, if anything, we've seen more of an
Speaker 10: interventionist foreign policy, not so much with military force. Would say.
Speaker 10: One reason that the attacks over the weekend stood out
Speaker 10: is it does indicate that the administration kenon will use
Speaker 10: military force but really much more of an expansion, you know, Panama, Dreamland, Gaza,
Speaker 10: these areas that we're not really talked about as focus areas,
Speaker 10: but the US obviously has interests there on Trump is
Speaker 10: going to push for them.
Speaker 2: Julie Norman, thank you so much. Next time you're on,
Speaker 2: we'll frame out Orioles Baseball as only that you can do.
Speaker 2: Professor the University College of London.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on Apple Cockplay and Android
Speaker 1: Auto with the Bloomberg Business app. You can also listen
Speaker 1: live on Amazon Alexa from our flagship New York station.
Speaker 1: Just say Alexa play Bloomberg eleven thirty.
Speaker 2: Right to the newspapers, Sie, right, We're right to the
Speaker 2: newspapers this morning. Thank you. I'm a rad elier. For
Speaker 2: those on YouTube, somebody sayment says, how do you tie
Speaker 2: a bow tie? We're not gonna know. We're not gonna
Speaker 2: waste time now. Lisa's time is to prefer. But in
Speaker 2: the next block, you know, I'll do the quick vo
Speaker 2: tie tie thing. I did it on LinkedIn years ago.
Speaker 2: What a weekend for the newspapers they were on fire.
Speaker 6: Yeah, there was a lot going on, all right, So
Speaker 6: this one I want to start with because this is
Speaker 6: from Bloomberg screen Time. Lucas Shaw put out this great
Speaker 6: article about the next CEO of Dwell Street. Yeah, they
Speaker 6: say it's in full swing. So they're saying that there
Speaker 6: are two leading candidates. We go to entertainment Coachair Dana Walden.
Speaker 6: She was at this Morgan Stanley conference talking about the
Speaker 6: profitability of Disney streaming services and they said, what that
Speaker 6: shows is that her chance to show the ability to
Speaker 6: handle that Wall Street side of being in a CEO.
Speaker 6: And then you have Parks chief Josh Diamaro. He spoke
Speaker 6: at another event about his creative ideas. But what that
Speaker 6: showed is at how a parksky can handle TV and film,
Speaker 6: So it's showing different sides. He talked about video games too,
Speaker 6: which is apparently a possible growth.
Speaker 2: Areas the previous guy that got fired.
Speaker 4: He was a was a parks guy.
Speaker 5: That's right, But I mean, parks are now the biggest
Speaker 5: profit contributor to the entire company, So you have to
Speaker 5: give the Park TI a certain come on.
Speaker 2: Come on, the parks guy's going to sit in a
Speaker 2: meeting with the three representatives for the rock, right, and
Speaker 2: go back and forth exactly. I mean, I don't know,
Speaker 2: I don't know.
Speaker 5: I mean again, this is a the third or fourth
Speaker 5: bite at the apple for bob byger in succession.
Speaker 4: He's blown it every time.
Speaker 2: This is tough talk, but I mean, I mean, in
Speaker 2: the world of executives, this is like how not to
Speaker 2: do it.
Speaker 5: And it's funny because it was at a time he
Speaker 5: had it perfectly set up and then he chose not
Speaker 5: to leave ten years ago. Anyway, Oh my gosh, sweet
Speaker 5: the rare mood.
Speaker 2: Did you start at St. Patrick's exactly?
Speaker 5: Yes, Oh, it's not tanging in his compass exactly.
Speaker 3: All right.
Speaker 6: Moving on President Trump's taris policies, a federal government cuts.
Speaker 6: We've been talking about it, right, But the New York
Speaker 6: Times is this article saying that it's boosting stocks overseas.
Speaker 6: So they point out investors pulling money from the US
Speaker 6: relocating it around the world. So they give examples. Right,
Speaker 6: They say, since Trump's inauguration, s and P five hundret
Speaker 6: fallen six percent, hang saying risen more than twenty percent,
Speaker 6: Dax in Germany increased ten percent. They go to Europe's
Speaker 6: stock six hundred gaining more than four percent. So it
Speaker 6: has all this data and it shows how over the
Speaker 6: past week investors pulling money from funds at buy US
Speaker 6: stocks for the first time this year. So kind of
Speaker 6: the money shifting to overseas, that's what they're saying, that
Speaker 6: the trend is right.
Speaker 5: Yeah, because we heard from a lot of fund managers
Speaker 5: late last year people Europeans are flooding into the US
Speaker 5: market because that's where the performance was.
Speaker 2: Of all technying. Oh well, I don't know what to
Speaker 2: make of it. I think what Mike Green said Midland,
Speaker 2: somebody wants a vector for me this morning on the
Speaker 2: stock market, they're not going to get it.
Speaker 4: Who knows.
Speaker 2: I don't have any any value had here at all, Lisa,
Speaker 2: Mateo is a value add next.
Speaker 6: Thank you. I'm not sure if you've noticed this one, Tom,
Speaker 6: but they're apparently a lot more kids are using AI
Speaker 6: to get better grades in school, and they're not telling
Speaker 6: mom and dad about it. They're just kind of touting
Speaker 6: it that they're doing good, you know, And what do
Speaker 6: you think? So, I don't know. I think if you
Speaker 6: use it as like this launch pad to kind of
Speaker 6: if you're stuck and you have like you know, brain
Speaker 6: fod just you can't think of where to start an essay,
Speaker 6: like it's a good way to spark you know, some
Speaker 6: some good ideas, but you can't just copy and paste
Speaker 6: and like put it.
Speaker 4: I don't I have done no idea. How teachers police this, Well,
Speaker 4: that's the problem.
Speaker 6: The teachers are saying they can't. And there's even dozens
Speaker 6: of companies that they have. They have apps that claim
Speaker 6: that they can write essays, complete homework with software that
Speaker 6: cannot be detected. So they're like these companies coming out
Speaker 6: doing this too. So I don't know, they're just saying
Speaker 6: with kids, it's it's it's hurting them they learn they can't.
Speaker 2: It's like devices with the kids. I mean, you know,
Speaker 2: whether it's lecturing them on the value add back then
Speaker 2: was the seagreums and seven ye. But you know, I
Speaker 2: can I just say that. I think, you know, you
Speaker 2: look at all the cliff Notes, there's only six I
Speaker 2: didn't buy.
Speaker 6: Yellow and black cover.
Speaker 2: Yeah to them. I mean I got through aerospace engineering,
Speaker 2: liberal arts on cliff Notes. Plato Plato, Oh my goodness.
Speaker 6: But the clip Notes didn't write it for you.
Speaker 2: Lisa Mateo. The newspapers Thank you.
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