1 00:00:05,160 --> 00:00:08,480 Speaker 1: This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along 2 00:00:08,520 --> 00:00:12,360 Speaker 1: with Jonathan Farrow and Lisa Abramowitz. Join us each day 3 00:00:12,400 --> 00:00:16,840 Speaker 1: for insight from the best an economics, geopolitics, finance and investment. 4 00:00:17,280 --> 00:00:22,119 Speaker 1: Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and 5 00:00:22,320 --> 00:00:26,600 Speaker 1: anywhere you get your podcasts, and always on Bloomberg dot Com, 6 00:00:26,640 --> 00:00:31,000 Speaker 1: the Bloomberg Terminal, and the Bloomberg Business App. Jeffrey Rosenberg, 7 00:00:31,040 --> 00:00:35,839 Speaker 1: portfolio manager, Systematic Multi Strategy Fund at Black Crack. I 8 00:00:35,880 --> 00:00:38,720 Speaker 1: don't know which way this is going to cut, you know, Jeff. 9 00:00:38,720 --> 00:00:42,120 Speaker 1: We talked to Steve Major of HSBC at Bloomberg today 10 00:00:42,120 --> 00:00:45,440 Speaker 1: and there's this whole idea of okay, we've had this move, 11 00:00:45,880 --> 00:00:48,880 Speaker 1: Now which way does it cut? Are you betting here 12 00:00:49,120 --> 00:00:52,560 Speaker 1: on a direction in the yield market, particularly off a 13 00:00:52,680 --> 00:00:54,120 Speaker 1: quiescent jobs report. 14 00:00:55,600 --> 00:00:58,320 Speaker 2: Yeah, Tom, I think when you look at this report, 15 00:00:59,080 --> 00:01:02,160 Speaker 2: it's there are some comments, as Jonathan was just talking about, 16 00:01:02,200 --> 00:01:07,600 Speaker 2: between the wages, but the headline is really a story 17 00:01:07,800 --> 00:01:13,520 Speaker 2: of gradual labor market normalization, and gradual labor market normalization 18 00:01:14,280 --> 00:01:19,560 Speaker 2: basically continues the market expectation that the hike of the 19 00:01:19,600 --> 00:01:22,840 Speaker 2: last meeting was the last hike, and and that's the 20 00:01:22,880 --> 00:01:26,120 Speaker 2: big change in the in the yield market outlook is 21 00:01:26,160 --> 00:01:32,440 Speaker 2: that we're seeing the effects of normalization in the labor market. Yes, 22 00:01:32,600 --> 00:01:37,560 Speaker 2: wages will follow, maybe not. That remains the uncertainty. But 23 00:01:37,640 --> 00:01:39,720 Speaker 2: you look at the ECI report, you look at some 24 00:01:39,760 --> 00:01:42,160 Speaker 2: of the other broader reports, what do they show you? 25 00:01:42,520 --> 00:01:45,760 Speaker 2: They show a gradual slowing in wage inflation, and so 26 00:01:45,760 --> 00:01:48,960 Speaker 2: that feeds into this narrative that the FED can be done, 27 00:01:48,960 --> 00:01:51,640 Speaker 2: they can wait. And so for the for the yield outlook, 28 00:01:51,680 --> 00:01:53,840 Speaker 2: it's it's really about the shape of the curve. What 29 00:01:53,880 --> 00:01:56,720 Speaker 2: we saw this week the steepening, and I think that 30 00:01:56,760 --> 00:02:00,560 Speaker 2: remains to be the message that that's our our main 31 00:02:00,600 --> 00:02:02,280 Speaker 2: focus in terms of our position. 32 00:02:02,040 --> 00:02:07,000 Speaker 1: Your broad mandate, which spread gives you the most information 33 00:02:07,440 --> 00:02:11,720 Speaker 1: right now? Which comparison of two yields gives you the 34 00:02:11,760 --> 00:02:12,640 Speaker 1: most information? 35 00:02:14,520 --> 00:02:16,959 Speaker 2: You know, you can look at lots of different measures. 36 00:02:16,960 --> 00:02:19,480 Speaker 2: We tend to like the five year five year forward. 37 00:02:20,600 --> 00:02:24,480 Speaker 2: You know, it's a it's a nice measure. It captures 38 00:02:24,520 --> 00:02:27,760 Speaker 2: both the level and the shape of the curve. And 39 00:02:28,120 --> 00:02:31,040 Speaker 2: it's moving. And you know, we've seen a significant move 40 00:02:31,720 --> 00:02:34,400 Speaker 2: this week, and and for good reason. The back end 41 00:02:34,440 --> 00:02:39,200 Speaker 2: of the curve is definitely a bit more challenged when 42 00:02:39,200 --> 00:02:42,680 Speaker 2: you look at historic levels a five year, five year forward. 43 00:02:42,720 --> 00:02:44,720 Speaker 2: If you look at I think you're showing here, you know, 44 00:02:44,760 --> 00:02:47,839 Speaker 2: we look at the two ten spread, and I think 45 00:02:47,840 --> 00:02:51,120 Speaker 2: that's really where the market pricing is a little bit vulnerable. 46 00:02:51,320 --> 00:02:53,520 Speaker 2: When we look at all of the information that we 47 00:02:53,639 --> 00:02:57,000 Speaker 2: saw come out this week, you know, and and away 48 00:02:57,040 --> 00:02:59,840 Speaker 2: from kind of the monetary policy focus, it's it's really 49 00:02:59,840 --> 00:03:03,960 Speaker 2: about fiscal policy. We had the refunding announcement, and you 50 00:03:04,040 --> 00:03:08,200 Speaker 2: see very very compressed term premium both in real and 51 00:03:08,240 --> 00:03:11,679 Speaker 2: inflationary space, and that's I think the vulnerability that we're 52 00:03:11,720 --> 00:03:12,280 Speaker 2: looking at. 53 00:03:12,600 --> 00:03:14,359 Speaker 3: Jeff, I have to go back to something that you're 54 00:03:14,400 --> 00:03:17,400 Speaker 3: saying that what people basically are assuming is if FED 55 00:03:17,440 --> 00:03:19,480 Speaker 3: is done, they're not going to raise rates more. 56 00:03:19,600 --> 00:03:21,440 Speaker 4: And that's what you're seeing today where. 57 00:03:21,240 --> 00:03:22,760 Speaker 3: There's a little bit of a move at the front end, 58 00:03:22,760 --> 00:03:24,520 Speaker 3: but really the move that you're seeing is at the 59 00:03:24,520 --> 00:03:27,359 Speaker 3: tenure yield once again reaching four point two percent, the 60 00:03:27,440 --> 00:03:29,920 Speaker 3: highest levels going back to November. 61 00:03:30,280 --> 00:03:31,880 Speaker 4: This is the key question. 62 00:03:32,400 --> 00:03:35,160 Speaker 3: Is the FED going to take their foot off the 63 00:03:35,200 --> 00:03:38,840 Speaker 3: break at a time when we're still seeing wages go up? 64 00:03:39,000 --> 00:03:41,520 Speaker 3: Is that basically the assumption of markets now looking at 65 00:03:41,520 --> 00:03:44,640 Speaker 3: a FED comfortable of three percent inflation over a longer 66 00:03:44,640 --> 00:03:46,640 Speaker 3: period of time and not needing to get down to 67 00:03:46,680 --> 00:03:47,680 Speaker 3: two percent so quickly. 68 00:03:48,880 --> 00:03:52,320 Speaker 2: Well, it's a really good question, Lisa. What does taking 69 00:03:52,360 --> 00:03:55,840 Speaker 2: the foot off the break mean. Does it mean not 70 00:03:56,560 --> 00:03:59,520 Speaker 2: doing another hike that they signaled last meeting two men 71 00:03:59,600 --> 00:04:04,160 Speaker 2: days ago, or does it mean just simply leaving rates unchanged. 72 00:04:04,760 --> 00:04:07,920 Speaker 2: Or does it mean as the bond market is anticipating 73 00:04:08,240 --> 00:04:11,680 Speaker 2: that they move to cutting interest rates? And I think 74 00:04:11,720 --> 00:04:15,200 Speaker 2: as we progress this debate, we're going to increasingly talk 75 00:04:15,320 --> 00:04:19,360 Speaker 2: not about the next FED hike, but how much inflation 76 00:04:19,560 --> 00:04:22,480 Speaker 2: decline if we continue to see that decline. How much 77 00:04:22,480 --> 00:04:24,600 Speaker 2: inflation decline you need to see before the Fed has 78 00:04:24,640 --> 00:04:28,159 Speaker 2: to start cutting rates, Because as inflation declines and the 79 00:04:28,200 --> 00:04:33,560 Speaker 2: Fed stays pat, real interest rates, the real Fed funds rate, 80 00:04:33,600 --> 00:04:38,040 Speaker 2: which is the transmission mechanism for monetary policy, that begins 81 00:04:38,040 --> 00:04:42,000 Speaker 2: to actually increase. So how much actual breaking does the 82 00:04:42,000 --> 00:04:45,640 Speaker 2: FED tolerate, not by their action, but by further declines 83 00:04:45,640 --> 00:04:47,360 Speaker 2: and interest rates? And that's going to be the metric 84 00:04:47,480 --> 00:04:51,200 Speaker 2: that Poul is really telling you about in the press 85 00:04:51,200 --> 00:04:55,359 Speaker 2: conference from last week, that was really the story is 86 00:04:55,400 --> 00:04:59,000 Speaker 2: that as inflation comes down, their policy gets tighter, and 87 00:04:59,040 --> 00:05:01,680 Speaker 2: how much how willing are they going to be to 88 00:05:01,800 --> 00:05:05,200 Speaker 2: see that tightening in policy? Again, this is all predicated 89 00:05:05,240 --> 00:05:08,720 Speaker 2: on this expectation that will continue to see further declines 90 00:05:08,720 --> 00:05:12,040 Speaker 2: in inflation, and obviously that changes, the whole story changes, 91 00:05:12,080 --> 00:05:14,680 Speaker 2: but that is kind of the natural breaking that occurs 92 00:05:14,720 --> 00:05:16,040 Speaker 2: without the FED having to do anything. 93 00:05:16,240 --> 00:05:18,240 Speaker 3: Just quickly here, Jeff, it seems like there's been a 94 00:05:18,320 --> 00:05:20,960 Speaker 3: narrative shift over the past couple of weeks. We're higher 95 00:05:21,000 --> 00:05:24,640 Speaker 3: for longer is more acceptable as well as a soft 96 00:05:24,720 --> 00:05:26,200 Speaker 3: landing type of scenario. 97 00:05:26,400 --> 00:05:28,600 Speaker 4: How much are you leaning into this and. 98 00:05:28,600 --> 00:05:32,520 Speaker 3: Adjusting your expectation of yields being higher for longer, but 99 00:05:32,600 --> 00:05:35,520 Speaker 3: also risk acids continuing to chug along in the meantime. 100 00:05:36,680 --> 00:05:39,560 Speaker 2: Yeah, I mean, part of the problem with adjusting too 101 00:05:39,640 --> 00:05:43,000 Speaker 2: much is that the market pricing for so many risky 102 00:05:43,040 --> 00:05:47,080 Speaker 2: assets is already there. So when you look at is 103 00:05:47,160 --> 00:05:50,760 Speaker 2: there a lot of opportunity in credit markets, for example, 104 00:05:50,920 --> 00:05:56,440 Speaker 2: for the soft landing being realized, you see that you're 105 00:05:56,480 --> 00:06:01,360 Speaker 2: pricing in many cases mid expansion type levels for expectations. 106 00:06:01,520 --> 00:06:03,599 Speaker 2: You know, you look at the high bond market, for example, 107 00:06:03,600 --> 00:06:07,479 Speaker 2: it has been on a tightening tear. It has never 108 00:06:07,640 --> 00:06:11,760 Speaker 2: really reflected the same degree of recession fears and recession 109 00:06:11,760 --> 00:06:15,480 Speaker 2: probabilities that you see, say, you know the consensus economics 110 00:06:15,560 --> 00:06:20,080 Speaker 2: profession now you know moving away from pushing down recession probabilities. 111 00:06:20,240 --> 00:06:22,760 Speaker 2: You never really had that price into the credit markets, 112 00:06:22,760 --> 00:06:26,560 Speaker 2: this huge disconnect between you know, the sluice, the credit 113 00:06:26,680 --> 00:06:29,520 Speaker 2: indications in the surveys, and what's pricing the market. So 114 00:06:29,680 --> 00:06:32,880 Speaker 2: there is an opportunity. It's really about carry rather than 115 00:06:32,920 --> 00:06:36,520 Speaker 2: price appreciation because a lot of that price appreciation already 116 00:06:36,560 --> 00:06:39,200 Speaker 2: happened off of the November loads of last year. 117 00:06:39,360 --> 00:06:42,120 Speaker 1: Jeff Rosenberg, thank you so much with black Rock this morning, 118 00:06:52,720 --> 00:06:55,200 Speaker 1: right now on this jobs day, with all that we 119 00:06:55,240 --> 00:06:58,920 Speaker 1: see in the market's futures of fractionally up as well, 120 00:06:59,680 --> 00:07:02,600 Speaker 1: without question, the conversation of the day on having the 121 00:07:02,680 --> 00:07:05,880 Speaker 1: courage to be in this market given the sum of 122 00:07:05,920 --> 00:07:09,039 Speaker 1: all our fears. Edward Yard Denny joins as president of 123 00:07:09,120 --> 00:07:12,560 Speaker 1: your Denny Research. I can't say enough about his prescience 124 00:07:12,640 --> 00:07:16,920 Speaker 1: once again across many decades. In October of last year, 125 00:07:17,560 --> 00:07:22,520 Speaker 1: reaffirm ed Yard Denny how a bull acts and moves 126 00:07:22,560 --> 00:07:25,400 Speaker 1: forward given them many fears. 127 00:07:24,960 --> 00:07:31,240 Speaker 5: That are out there well, I've been thinking that we've 128 00:07:31,320 --> 00:07:34,520 Speaker 5: been in a recession since early last years. We've discussed 129 00:07:34,560 --> 00:07:37,600 Speaker 5: before it's just been a rolling recession. Now I think 130 00:07:37,640 --> 00:07:41,280 Speaker 5: we're in a rolling recovery, and I think increasingly the 131 00:07:41,600 --> 00:07:45,880 Speaker 5: markets obviously have discounted that, and the so called Godeaux 132 00:07:45,920 --> 00:07:48,760 Speaker 5: recession still hasn't shown up. It may show up at 133 00:07:48,760 --> 00:07:51,840 Speaker 5: some point, but with regards to the market, my year 134 00:07:51,920 --> 00:07:53,720 Speaker 5: end target for the S and P five hundred is 135 00:07:53,760 --> 00:07:54,760 Speaker 5: forty six hundred. 136 00:07:55,360 --> 00:07:55,960 Speaker 6: We got there a. 137 00:07:55,960 --> 00:07:58,920 Speaker 5: Few days ago, so I'm thinking I'm not going to 138 00:07:59,000 --> 00:08:01,040 Speaker 5: raise my target forty six hundred. 139 00:08:01,080 --> 00:08:02,000 Speaker 6: I'm going to keep it there. 140 00:08:02,400 --> 00:08:04,920 Speaker 5: I think it's going to turn out that the expectations 141 00:08:04,920 --> 00:08:07,320 Speaker 5: at the beginning of the year was that we would 142 00:08:07,360 --> 00:08:09,520 Speaker 5: have a pretty lousely first half of the year and 143 00:08:09,800 --> 00:08:11,640 Speaker 5: a good second half of the year for the market. 144 00:08:11,960 --> 00:08:13,360 Speaker 6: I think it's going to be the reverse of that. 145 00:08:13,400 --> 00:08:15,800 Speaker 5: I think we've clearly had a very good first half, 146 00:08:16,080 --> 00:08:17,720 Speaker 5: and I think the second half is just going to 147 00:08:17,720 --> 00:08:19,360 Speaker 5: be challenging. I don't think it's going to be a 148 00:08:19,360 --> 00:08:21,760 Speaker 5: big downer. I think it's going to be kind of sideways. 149 00:08:21,800 --> 00:08:25,120 Speaker 5: September is coming, and that obviously could create some problems 150 00:08:25,120 --> 00:08:26,960 Speaker 5: but by year end, I think we'll be at forty 151 00:08:27,000 --> 00:08:29,160 Speaker 5: six hundred, which is where we were a few days ago. 152 00:08:29,280 --> 00:08:31,440 Speaker 3: How much are you buying in to this idea that 153 00:08:31,480 --> 00:08:34,760 Speaker 3: we're going to see higher rates for longer particularly in 154 00:08:35,000 --> 00:08:37,480 Speaker 3: duration in ten year notes, in thirty year notes. 155 00:08:38,920 --> 00:08:41,800 Speaker 5: Well, I've thought that on short term rates that the 156 00:08:41,840 --> 00:08:44,200 Speaker 5: FED was pretty clear what they wanted to do, and 157 00:08:44,240 --> 00:08:46,320 Speaker 5: I took them at their word. I know there's always 158 00:08:46,360 --> 00:08:49,240 Speaker 5: skepticism and the feeling that the FED isn't. 159 00:08:49,000 --> 00:08:51,080 Speaker 6: Going to get it right, but they've been saying. 160 00:08:50,840 --> 00:08:52,920 Speaker 5: They wanted to get the short term rate up to 161 00:08:52,960 --> 00:08:55,480 Speaker 5: a restrictive level. I think they're there at five hundred 162 00:08:55,520 --> 00:08:58,120 Speaker 5: quarter percent. I don't think they have to do anymore. 163 00:08:58,280 --> 00:09:00,680 Speaker 5: I think they're just going to leave it there. What 164 00:09:00,840 --> 00:09:03,599 Speaker 5: is interesting is, my friends, the bond vigilanti seem to 165 00:09:03,679 --> 00:09:07,920 Speaker 5: be settling up, and I thought we'd hold around four percent, 166 00:09:07,960 --> 00:09:10,440 Speaker 5: But here we are back at the November high of. 167 00:09:10,440 --> 00:09:11,600 Speaker 6: Four point two percent. 168 00:09:11,720 --> 00:09:14,600 Speaker 5: So it's looking a little dicey on the bond side, 169 00:09:14,640 --> 00:09:18,319 Speaker 5: and I think suddenly we have to take into consideration 170 00:09:18,440 --> 00:09:23,400 Speaker 5: that while the Fitch rating agencies downgraded the US government 171 00:09:23,440 --> 00:09:26,679 Speaker 5: debt was sort of the event that focused everybody back 172 00:09:26,720 --> 00:09:29,160 Speaker 5: on the deficit. The fact of the matter is, we've 173 00:09:29,200 --> 00:09:32,480 Speaker 5: all known that the deficit is a problem. We've known 174 00:09:32,520 --> 00:09:35,600 Speaker 5: that fiscal policy is profligate. It's just the market cares 175 00:09:35,640 --> 00:09:37,520 Speaker 5: about it now. So if the market cares about it, 176 00:09:37,559 --> 00:09:38,760 Speaker 5: I've got to care about it. 177 00:09:39,480 --> 00:09:40,319 Speaker 4: At a certain point. 178 00:09:40,480 --> 00:09:43,760 Speaker 3: Ed, when does the higher rate structure at the long end, 179 00:09:44,000 --> 00:09:45,960 Speaker 3: at the ten year, at the thirty year end, not 180 00:09:46,080 --> 00:09:48,920 Speaker 3: on the short end threaten your bull thesis. 181 00:09:50,480 --> 00:09:54,440 Speaker 5: Well, I think that it already done its damage in 182 00:09:54,480 --> 00:09:57,440 Speaker 5: the one area where the rolling recession is hit, and 183 00:09:57,480 --> 00:10:02,040 Speaker 5: that's in housing. But even there we've seen of late 184 00:10:02,200 --> 00:10:04,360 Speaker 5: the housing markets holding up pretty well, at least in 185 00:10:04,440 --> 00:10:07,280 Speaker 5: terms of prices, and there really is a shortage. 186 00:10:07,679 --> 00:10:09,120 Speaker 6: The real issue is the consumer. 187 00:10:09,240 --> 00:10:13,640 Speaker 5: Will higher long term rates knock down the consumer? And 188 00:10:13,720 --> 00:10:16,840 Speaker 5: I don't think that's necessarily the case at this point. 189 00:10:16,880 --> 00:10:20,520 Speaker 5: The consumer obviously depends on a certain amount of consumer debt. 190 00:10:21,040 --> 00:10:24,000 Speaker 5: But the key is employment. The key is wages. And 191 00:10:24,040 --> 00:10:26,680 Speaker 5: while employment we can somewhat, it can always be revised 192 00:10:26,760 --> 00:10:28,840 Speaker 5: one way or the other. We know that the waging 193 00:10:28,920 --> 00:10:34,240 Speaker 5: number at four point four percent well exceeded the Well, 194 00:10:34,320 --> 00:10:36,319 Speaker 5: let's make it zero point four because we're doing month 195 00:10:36,360 --> 00:10:38,640 Speaker 5: to month, so zero point four, we know that it 196 00:10:38,679 --> 00:10:42,640 Speaker 5: exceeded the CPI, and so real wages are increasing, and 197 00:10:42,800 --> 00:10:47,080 Speaker 5: consumers have a lot of wealth in their houses. The 198 00:10:47,120 --> 00:10:49,840 Speaker 5: baby boomers have a lot of wealth. They're retiring and 199 00:10:49,840 --> 00:10:53,280 Speaker 5: spending it. So all in all, I'm not quite sure 200 00:10:53,640 --> 00:10:58,400 Speaker 5: how a increase in the bond yield knocks the consumer down, 201 00:10:58,640 --> 00:11:03,400 Speaker 5: unless that you just get some sort of banking crisis 202 00:11:03,440 --> 00:11:05,920 Speaker 5: event again as a result of that. 203 00:11:06,160 --> 00:11:07,080 Speaker 4: Just quickly then ed. 204 00:11:07,360 --> 00:11:09,400 Speaker 3: How much are you thinking that the FED is still 205 00:11:09,440 --> 00:11:12,800 Speaker 3: gone enough even if we are seeing this and sticky 206 00:11:12,920 --> 00:11:14,920 Speaker 3: inflation and wage pressures. 207 00:11:15,960 --> 00:11:18,920 Speaker 5: Well, it looks sticky, but I think the productivity numbers 208 00:11:18,920 --> 00:11:21,920 Speaker 5: are starting to come through. Yesterday we had a remarkable 209 00:11:21,920 --> 00:11:24,079 Speaker 5: increase in productivity of three and a half percent. It 210 00:11:24,200 --> 00:11:27,560 Speaker 5: was so remarkable that even a bullleg myself didn't quite 211 00:11:27,600 --> 00:11:32,439 Speaker 5: believe it because it also indicated that employment was flat, 212 00:11:32,520 --> 00:11:35,200 Speaker 5: which wasn't really the case as we know based on 213 00:11:35,200 --> 00:11:38,400 Speaker 5: the monthly data. But I think productivity is going to 214 00:11:38,400 --> 00:11:40,240 Speaker 5: make it come back, and we may very well see 215 00:11:40,240 --> 00:11:42,160 Speaker 5: wages rising faster than prices. 216 00:11:42,520 --> 00:11:46,280 Speaker 1: And long ago and far away on a Friday evening, 217 00:11:46,600 --> 00:11:49,160 Speaker 1: lou ru Keiser would sit there with you on the couch, 218 00:11:49,559 --> 00:11:53,680 Speaker 1: and he'd say, what's it look like? Long term? Modern 219 00:11:53,720 --> 00:11:57,120 Speaker 1: day long term is nine months, maybe it's a year 220 00:11:57,360 --> 00:12:01,040 Speaker 1: at Yard Denny for the mere mortals watching and listening, 221 00:12:01,120 --> 00:12:05,360 Speaker 1: where long term is three years or five years. Frame 222 00:12:05,440 --> 00:12:09,960 Speaker 1: out the growth you see in revenue of our equities. 223 00:12:10,040 --> 00:12:14,880 Speaker 1: It seems to be pretty darn good, like four percent whatever. 224 00:12:15,480 --> 00:12:18,240 Speaker 1: Give us a yard Denny three year perspective. 225 00:12:19,200 --> 00:12:22,720 Speaker 5: Well, I actually like to do a decade decade perspectives. 226 00:12:22,800 --> 00:12:26,560 Speaker 5: And this decade, I think started out with all sorts 227 00:12:26,600 --> 00:12:27,600 Speaker 5: of problems. 228 00:12:28,200 --> 00:12:28,840 Speaker 6: At the very. 229 00:12:28,720 --> 00:12:31,200 Speaker 5: Beginning of the decade, before the pandemic hit, I started 230 00:12:31,200 --> 00:12:35,040 Speaker 5: talking about a possibility of the Roaring twenty twenties with 231 00:12:35,120 --> 00:12:39,319 Speaker 5: productivity making a big comeback, and that looked absolutely delusional 232 00:12:39,360 --> 00:12:41,839 Speaker 5: there for the past couple of years. But it's looking 233 00:12:42,200 --> 00:12:44,160 Speaker 5: like it might be a reasonable way to think about 234 00:12:44,679 --> 00:12:49,719 Speaker 5: the rest of the decade. Just but robotics, automation and 235 00:12:49,800 --> 00:12:52,559 Speaker 5: lots of technologies there that are going to boost productivity. 236 00:12:53,080 --> 00:12:56,720 Speaker 5: So I think from a revenue perspective, you know, revenues 237 00:12:56,760 --> 00:12:59,120 Speaker 5: tend to increase along with nominal GDP if we get 238 00:12:59,160 --> 00:13:03,160 Speaker 5: a productivity boost here. There's no particular reason why revenues 239 00:13:03,760 --> 00:13:05,320 Speaker 5: grow five to eight percent. 240 00:13:05,559 --> 00:13:09,840 Speaker 1: Should we fear the concentration of seven, eight, nine, ten 241 00:13:10,320 --> 00:13:13,480 Speaker 1: mega names The meganames have reported two of them in 242 00:13:13,559 --> 00:13:17,480 Speaker 1: the last twenty four hours. How should we interpret the 243 00:13:17,600 --> 00:13:20,040 Speaker 1: durability of what we see from these names? 244 00:13:20,760 --> 00:13:23,120 Speaker 5: Well, first and foremost, I personally try not to get 245 00:13:23,160 --> 00:13:25,960 Speaker 5: too emotional about the markets. I mean, it's it's easy, 246 00:13:26,000 --> 00:13:28,120 Speaker 5: it's easy to save and hard to do, and I 247 00:13:28,200 --> 00:13:31,079 Speaker 5: do go on the same roller coaster as everybody else. 248 00:13:31,160 --> 00:13:35,120 Speaker 5: But if you try to control your emotions, you just 249 00:13:35,160 --> 00:13:37,520 Speaker 5: have to deal with the facts. And the fact is 250 00:13:37,600 --> 00:13:40,440 Speaker 5: we've got I call them the megacap eight. We got 251 00:13:40,520 --> 00:13:43,480 Speaker 5: eight companies that account for twenty seven percent of the 252 00:13:43,679 --> 00:13:45,960 Speaker 5: market cap of the S and P five hundred and 253 00:13:46,000 --> 00:13:50,319 Speaker 5: they are great companies, as Amazon demonstrated with its latest 254 00:13:50,360 --> 00:13:52,720 Speaker 5: journeys report, and I think they're going to continue to 255 00:13:53,240 --> 00:13:57,400 Speaker 5: have an outside impact on the market capitalization of the market, 256 00:13:57,440 --> 00:13:59,800 Speaker 5: which means we have to accept the pees higher because 257 00:13:59,800 --> 00:14:01,000 Speaker 5: they're you hire. 258 00:14:01,280 --> 00:14:03,880 Speaker 1: Ed your dorney, Thank you so much on a Friday morning, 259 00:14:03,880 --> 00:14:10,760 Speaker 1: mister Yourrdney research friendly kids listening. 260 00:14:10,800 --> 00:14:15,920 Speaker 7: Barbie still has legs to confirm that just confirming, Oh 261 00:14:16,000 --> 00:14:20,960 Speaker 7: my god, Tom forday just now, Tom's going to catch up. 262 00:14:21,240 --> 00:14:23,960 Speaker 7: Catching up yesterday was really revealing as well, some insightful 263 00:14:24,000 --> 00:14:26,200 Speaker 7: comments you made on Apple where you essentially said, and 264 00:14:26,240 --> 00:14:28,720 Speaker 7: you've written about this, you think maybe the stock had 265 00:14:28,720 --> 00:14:31,040 Speaker 7: gone too far. We're down this morning by one point 266 00:14:31,080 --> 00:14:34,160 Speaker 7: eight percent. You're aware of the bullish thesis, Tom, there's 267 00:14:34,200 --> 00:14:37,280 Speaker 7: this upgrade cycle, lots of people sitting on old phones. 268 00:14:37,320 --> 00:14:40,000 Speaker 7: They're all going to upgrade and buy new ones. Where 269 00:14:40,040 --> 00:14:42,680 Speaker 7: is the upgrade right now going into the new launch 270 00:14:42,760 --> 00:14:45,520 Speaker 7: of new products in a month or so. 271 00:14:45,520 --> 00:14:49,280 Speaker 8: So the most concerning statistic from Tim Cook on the 272 00:14:49,320 --> 00:14:53,680 Speaker 8: call yesterday was that consumers more than half are already 273 00:14:53,840 --> 00:14:54,760 Speaker 8: paying for their. 274 00:14:54,640 --> 00:14:57,280 Speaker 9: Apple product on an installment basis. 275 00:14:57,680 --> 00:15:00,320 Speaker 8: So I think the low hanging fruitsman picked to the 276 00:15:00,360 --> 00:15:03,720 Speaker 8: extent that that was the opportunity for Apple to get 277 00:15:03,760 --> 00:15:06,520 Speaker 8: you to go from buying your iPhone or having your 278 00:15:06,560 --> 00:15:10,520 Speaker 8: iPhone essentially fully subsidized by the carrier, to now having 279 00:15:10,520 --> 00:15:11,480 Speaker 8: the consumer. 280 00:15:11,120 --> 00:15:14,160 Speaker 9: Pay for it on an installment basis, often with no interest. 281 00:15:14,800 --> 00:15:17,160 Speaker 8: And I also am concerned that the carriers are going 282 00:15:17,160 --> 00:15:19,920 Speaker 8: to subsidize the fifteen to a lesser degree than the 283 00:15:19,920 --> 00:15:23,080 Speaker 8: fourteen or thirteen. Yes, they want more consumers on their 284 00:15:23,080 --> 00:15:26,880 Speaker 8: five G networks where they've invested billions, but their times 285 00:15:26,880 --> 00:15:29,760 Speaker 8: are tough too right now, so that comments on the 286 00:15:29,760 --> 00:15:33,240 Speaker 8: iPhone are concerning, and I think that's what's weighing the stop. 287 00:15:33,040 --> 00:15:35,840 Speaker 1: Time away from your neutrin call and to go to 288 00:15:35,880 --> 00:15:38,720 Speaker 1: the Apple fanboys and all that. The bottom line is, 289 00:15:38,760 --> 00:15:41,440 Speaker 1: it's an ugly June. Ugly July. It happens every year. 290 00:15:41,840 --> 00:15:44,120 Speaker 1: We have to wait for September. Somebody with a black 291 00:15:44,160 --> 00:15:47,280 Speaker 1: turtleneck walks out on stage and tells us the second 292 00:15:47,280 --> 00:15:50,680 Speaker 1: coming of Apple, and OMG, the stock goes up. Why 293 00:15:50,760 --> 00:15:52,480 Speaker 1: is that going to be different this time? 294 00:15:53,120 --> 00:15:55,120 Speaker 8: It's going to be different this time because I think 295 00:15:55,200 --> 00:15:58,520 Speaker 8: that they just told us that the September quarter, where 296 00:15:58,520 --> 00:16:01,400 Speaker 8: they're going to tell us about this new wonderful iPhone, 297 00:16:01,920 --> 00:16:05,080 Speaker 8: is going to have negative revenue growth, and that while 298 00:16:05,120 --> 00:16:08,120 Speaker 8: the iPhone will have an improvement from the negative two 299 00:16:08,120 --> 00:16:11,720 Speaker 8: point four percent it did in the June quarter, it'll 300 00:16:11,800 --> 00:16:15,000 Speaker 8: likely be negative as well. So yes, they'll be touting 301 00:16:15,120 --> 00:16:18,160 Speaker 8: the every new feature on the iPhone, but they're promising 302 00:16:18,200 --> 00:16:21,680 Speaker 8: made about the financial impact are pretty disappointing. 303 00:16:21,800 --> 00:16:24,960 Speaker 1: The Open Prayer Services picks it up and crosses how 304 00:16:25,000 --> 00:16:30,840 Speaker 1: far out do you go where services catches up and 305 00:16:31,000 --> 00:16:35,320 Speaker 1: advances and overcomes iPhone dynamics. Is it a three year lookout, 306 00:16:35,720 --> 00:16:37,640 Speaker 1: is it out ten years? How far out is that 307 00:16:37,720 --> 00:16:41,240 Speaker 1: magic point where services become really important? 308 00:16:41,840 --> 00:16:44,240 Speaker 8: So the mass suggests time more like five years when 309 00:16:44,240 --> 00:16:46,080 Speaker 8: you think of the relative growth rate of services to 310 00:16:46,120 --> 00:16:46,640 Speaker 8: everything else. 311 00:16:46,760 --> 00:16:47,440 Speaker 9: But if you look at the. 312 00:16:47,480 --> 00:16:51,240 Speaker 8: Quarter, hardware was down, iPhones were down, iPads were down, 313 00:16:51,400 --> 00:16:52,360 Speaker 8: laptops were down. 314 00:16:52,760 --> 00:16:57,040 Speaker 9: Services was up. That's great news. And I do believe over. 315 00:16:56,880 --> 00:17:00,320 Speaker 8: The long term, Apple is a service is real possibility. 316 00:17:00,520 --> 00:17:02,120 Speaker 8: You pay two hundred dollars a month, you get the 317 00:17:02,200 --> 00:17:04,879 Speaker 8: latest and greatest iPhone, You probably get Apple TV and 318 00:17:04,960 --> 00:17:07,359 Speaker 8: other things, and then you're not thinking about the fact 319 00:17:07,359 --> 00:17:10,719 Speaker 8: that you're essentially paying two thousand dollars for that new iPhone. 320 00:17:10,840 --> 00:17:12,680 Speaker 8: You're just thinking about the two hundred dollars a month 321 00:17:12,880 --> 00:17:14,920 Speaker 8: and getting the latest and greatest iPhone. 322 00:17:15,359 --> 00:17:16,240 Speaker 9: I think that that's the. 323 00:17:16,160 --> 00:17:19,000 Speaker 8: Opportunity long term, But mathematically, I think it's more than 324 00:17:19,040 --> 00:17:22,879 Speaker 8: five years out before services is more than half revenue. 325 00:17:23,080 --> 00:17:26,399 Speaker 3: So, Tom, you did decrease your price target for Apple, 326 00:17:26,440 --> 00:17:29,159 Speaker 3: but you increased your price target for Amazon after they 327 00:17:29,200 --> 00:17:33,400 Speaker 3: delivered much better than expected results and suddenly everyone's heralding 328 00:17:33,480 --> 00:17:34,480 Speaker 3: Andy Jasse as. 329 00:17:34,400 --> 00:17:35,760 Speaker 4: The hero of Wall Street. 330 00:17:35,800 --> 00:17:37,720 Speaker 3: How long can this be the case for him to 331 00:17:37,800 --> 00:17:40,760 Speaker 3: keep cutting and keep beating on the top and bottom 332 00:17:40,760 --> 00:17:41,720 Speaker 3: lines across the board. 333 00:17:42,440 --> 00:17:45,359 Speaker 9: My best answer right now is that this is twelve months. 334 00:17:45,880 --> 00:17:49,360 Speaker 8: So they just had their good June quarter, their good 335 00:17:49,400 --> 00:17:52,280 Speaker 8: outlook for the September quarter. They'll have a good December 336 00:17:52,280 --> 00:17:55,359 Speaker 8: requorder and a good March quarter. I am very concerned 337 00:17:55,400 --> 00:17:57,920 Speaker 8: that at some point reality sets in and to the 338 00:17:58,000 --> 00:18:02,040 Speaker 8: upset that these cost cuts are making them less customer centric. 339 00:18:02,280 --> 00:18:05,879 Speaker 8: That's going to slow the flywheel price convenience selection. So 340 00:18:05,920 --> 00:18:09,520 Speaker 8: I think the next twelve months they're good. Day one 341 00:18:09,680 --> 00:18:10,800 Speaker 8: of the next year. 342 00:18:11,000 --> 00:18:14,600 Speaker 3: I'm concerned some people might argue that the cloud business 343 00:18:14,640 --> 00:18:16,600 Speaker 3: is going to take overall. It has done the heavy 344 00:18:16,640 --> 00:18:19,119 Speaker 3: lifting for all the profitability of this company, and it 345 00:18:19,160 --> 00:18:21,720 Speaker 3: showed signs of picking back up. There'll be questions about 346 00:18:21,720 --> 00:18:25,760 Speaker 3: whether it's gaining market share versus Microsoft Azure. How long 347 00:18:25,800 --> 00:18:28,879 Speaker 3: can that really be the main flag bearer for the company? 348 00:18:28,920 --> 00:18:30,800 Speaker 4: I mean, is not enough to really. 349 00:18:30,600 --> 00:18:33,120 Speaker 3: Offset what you see down the line on the customer 350 00:18:33,160 --> 00:18:36,000 Speaker 3: service side, in the sort of retail side of things. 351 00:18:37,000 --> 00:18:38,760 Speaker 9: The answer is not long enough. 352 00:18:39,160 --> 00:18:43,320 Speaker 8: So we're cheering a twelve point two percent growth rate 353 00:18:43,560 --> 00:18:45,680 Speaker 8: compared to a fifteen point eight percent growth rate, and 354 00:18:45,760 --> 00:18:48,000 Speaker 8: they werefore in the March quarter. Though it is better 355 00:18:48,040 --> 00:18:50,360 Speaker 8: than the ten point eight they suggested the month of April. 356 00:18:50,720 --> 00:18:53,480 Speaker 8: That's the slowest growth rate since AWS was launched in 357 00:18:53,520 --> 00:18:56,400 Speaker 8: two thousand and six. Andy Jase is bragging about double 358 00:18:56,400 --> 00:18:58,200 Speaker 8: digit growth as if it's. 359 00:18:58,119 --> 00:18:59,480 Speaker 9: Not going to be sustained. 360 00:19:00,040 --> 00:19:02,639 Speaker 8: So a lack of double digit growth for one of 361 00:19:02,720 --> 00:19:07,360 Speaker 8: their most important profit centers is hugely problematic, especially given. 362 00:19:07,200 --> 00:19:09,120 Speaker 9: The current state of an e commerce business. 363 00:19:09,760 --> 00:19:13,399 Speaker 8: Amazon collectively needs something like three point four billion for 364 00:19:13,440 --> 00:19:17,359 Speaker 8: an incremental basis point or a percentage point revenue growth. 365 00:19:17,760 --> 00:19:20,720 Speaker 8: They're going to need advertising, they're gonna need video, they're 366 00:19:20,720 --> 00:19:23,520 Speaker 8: gonna need healthcare. They're gonna need something else to come 367 00:19:23,560 --> 00:19:26,600 Speaker 8: in to take the baton from AWS. 368 00:19:26,640 --> 00:19:27,600 Speaker 6: Over long term, it's on. 369 00:19:27,720 --> 00:19:30,480 Speaker 7: Can you describe how service on the e commerce side 370 00:19:30,480 --> 00:19:32,520 Speaker 7: has deteriorated over the last year? 371 00:19:33,600 --> 00:19:36,280 Speaker 9: Yes, So the best example is anecdotal. 372 00:19:36,640 --> 00:19:40,160 Speaker 8: So I had a defective smoke alarm that I purchased 373 00:19:40,200 --> 00:19:42,400 Speaker 8: on Amazon not that long ago. 374 00:19:42,480 --> 00:19:44,280 Speaker 9: They would say, Brosar it's defective. 375 00:19:44,320 --> 00:19:46,879 Speaker 8: Will send you a replacement, put the whole one on 376 00:19:46,920 --> 00:19:48,840 Speaker 8: your porch and UPS to pick it up for free. 377 00:19:49,280 --> 00:19:51,280 Speaker 8: Now they want seven to ninety nine for UPS to 378 00:19:51,320 --> 00:19:52,800 Speaker 8: pick it up, or they want me to go to 379 00:19:52,840 --> 00:19:56,159 Speaker 8: Whole Foods Wightline of Whole Foods to return it. So 380 00:19:56,200 --> 00:19:58,760 Speaker 8: that to me is one example. What's going to happen 381 00:19:58,880 --> 00:20:01,479 Speaker 8: is I'm going to start thinking more about going to Target. 382 00:20:01,640 --> 00:20:04,400 Speaker 8: I'm going to think more about going to Walmart, to Costco, 383 00:20:04,560 --> 00:20:09,040 Speaker 8: to other retailers. And I think that's hugely concerning for Amazon, 384 00:20:09,119 --> 00:20:10,800 Speaker 8: something I'm monitoring closely. 385 00:20:10,880 --> 00:20:12,800 Speaker 7: It's anecdotal, but I had the same thing from so 386 00:20:12,880 --> 00:20:16,919 Speaker 7: many PayPal Tom Tomfode if Aidavis and greatco on Apple 387 00:20:16,960 --> 00:20:17,760 Speaker 7: got into the Innix. 388 00:20:28,280 --> 00:20:30,879 Speaker 1: Let's turn to politics right now, the politics of the 389 00:20:30,960 --> 00:20:35,119 Speaker 1: United States of America. We do this so much for 390 00:20:35,200 --> 00:20:39,600 Speaker 1: our international audience. Wendy Schiller has advised us with Brown University, 391 00:20:39,680 --> 00:20:43,000 Speaker 1: the Tommins Center for American Politics. Wendy, I want to 392 00:20:43,040 --> 00:20:45,960 Speaker 1: go to the word culnulative. We're using it in economics 393 00:20:46,040 --> 00:20:50,119 Speaker 1: now in the FED we have culnulative indictments. What is 394 00:20:50,160 --> 00:20:54,480 Speaker 1: the difference between this single event of yesterday and the 395 00:20:54,520 --> 00:20:58,200 Speaker 1: fact there's been one, There's been two there's been three, 396 00:20:58,400 --> 00:21:01,040 Speaker 1: and dare I say there could be. What's the difference? 397 00:21:01,160 --> 00:21:04,040 Speaker 10: The distinction It depends on the audience. 398 00:21:04,160 --> 00:21:07,159 Speaker 11: Tom's a great point is for Trump supporters, you know, 399 00:21:07,280 --> 00:21:10,240 Speaker 11: really very loyal people who've stuck with the former president, 400 00:21:10,400 --> 00:21:13,639 Speaker 11: this just emboldens them, keeps them more loyal. You know, 401 00:21:13,680 --> 00:21:15,960 Speaker 11: their team is losing and they're going to basically be 402 00:21:16,119 --> 00:21:18,840 Speaker 11: on that team and nothing is going to shake. 403 00:21:18,640 --> 00:21:21,040 Speaker 10: Them, So they get more emboldened. 404 00:21:21,080 --> 00:21:24,919 Speaker 11: But I think it continues to turn off independent voters 405 00:21:24,960 --> 00:21:27,040 Speaker 11: who were the swing voters and some of these key 406 00:21:27,080 --> 00:21:30,600 Speaker 11: states that former president Trump lost in twenty twenty. So 407 00:21:30,800 --> 00:21:34,920 Speaker 11: the audience that gets disgusted by sort of three indictments 408 00:21:35,200 --> 00:21:37,760 Speaker 11: that that audience was leaving anyway or already left. 409 00:21:37,880 --> 00:21:39,240 Speaker 10: They're not going back to Trump. 410 00:21:39,560 --> 00:21:42,160 Speaker 11: But the Trump base, particularly coming up into the primary, 411 00:21:42,440 --> 00:21:45,840 Speaker 11: is more emboldened and wants to defend their president. We'll 412 00:21:45,840 --> 00:21:48,560 Speaker 11: see if these donations keep coming in, the small money 413 00:21:48,600 --> 00:21:51,240 Speaker 11: donations that he's been using to pay its defense funds, 414 00:21:51,480 --> 00:21:53,840 Speaker 11: that's going to get more expensive. Does that money keep 415 00:21:53,880 --> 00:21:55,040 Speaker 11: flowing in right. 416 00:21:55,040 --> 00:21:58,800 Speaker 1: Well, Professor shul I want to find fascinating here is 417 00:21:59,119 --> 00:22:01,720 Speaker 1: the zeitgeis Oh in the last twenty four hours. There's 418 00:22:01,760 --> 00:22:05,680 Speaker 1: one idea of how small the Trump audience is yet 419 00:22:05,760 --> 00:22:09,199 Speaker 1: obviously very loyal and all that, Where are what are 420 00:22:09,200 --> 00:22:13,879 Speaker 1: the other Republicans doing? Are they waiting? Are the Republicans 421 00:22:13,920 --> 00:22:18,040 Speaker 1: moving to independence? Are they moving to a relative conservative 422 00:22:18,160 --> 00:22:20,480 Speaker 1: like Biden? I don't believe they're going to move to 423 00:22:20,960 --> 00:22:25,199 Speaker 1: a liberal democratic stance? But what are those Republicans doing 424 00:22:25,800 --> 00:22:28,560 Speaker 1: right now that have had it over the indictments? 425 00:22:29,200 --> 00:22:33,440 Speaker 12: The Republicans that are not for the former president are 426 00:22:33,480 --> 00:22:36,720 Speaker 12: just holding their breath, I think, and thinking, Okay, what 427 00:22:36,840 --> 00:22:39,440 Speaker 12: do we do? I mean, Republicans are really good about 428 00:22:39,480 --> 00:22:41,159 Speaker 12: coming home to the party nominee. 429 00:22:41,480 --> 00:22:44,240 Speaker 10: The exception was twenty twenty, But typically. 430 00:22:43,840 --> 00:22:45,880 Speaker 11: Even when there's division, as we saw on twenty sixteen, 431 00:22:46,080 --> 00:22:48,120 Speaker 11: Republicans come home to the nominee and they get out 432 00:22:48,119 --> 00:22:48,720 Speaker 11: the door and they. 433 00:22:48,680 --> 00:22:50,080 Speaker 10: Vote in presidential elections. 434 00:22:50,359 --> 00:22:53,560 Speaker 11: Right now, the question is will anybody, including desantists, come 435 00:22:53,640 --> 00:22:56,520 Speaker 11: up and challenge the president enough to make it worth 436 00:22:56,600 --> 00:22:59,359 Speaker 11: investing in somebody else, either with money or work with 437 00:22:59,400 --> 00:23:00,800 Speaker 11: your votes months from now? 438 00:23:01,040 --> 00:23:03,480 Speaker 10: But essentially I think that's the stance right now. 439 00:23:03,560 --> 00:23:05,639 Speaker 11: Is this person really going to make it like the 440 00:23:05,720 --> 00:23:07,760 Speaker 11: House Republicans already all in on Trump. 441 00:23:07,800 --> 00:23:08,400 Speaker 10: I mean, that's it. 442 00:23:08,440 --> 00:23:11,800 Speaker 11: That game is over so there with Trump, But the 443 00:23:11,840 --> 00:23:14,000 Speaker 11: actual rank and file we have to wait and see 444 00:23:14,000 --> 00:23:16,199 Speaker 11: for six months, you know, when the reality that this 445 00:23:16,280 --> 00:23:18,120 Speaker 11: man will be the nominee again and that he could 446 00:23:18,160 --> 00:23:20,960 Speaker 11: be president again really hits home. Do we see any 447 00:23:21,040 --> 00:23:23,080 Speaker 11: diversion in some of these Republican Party voters? 448 00:23:23,320 --> 00:23:25,119 Speaker 3: And that seems to be what Elaine came Mark of 449 00:23:25,119 --> 00:23:28,200 Speaker 3: Brookings said yesterday that she doesn't think that Donald Trump 450 00:23:28,240 --> 00:23:30,840 Speaker 3: will be the nominee in the end, and that essentially 451 00:23:31,119 --> 00:23:33,200 Speaker 3: people will move away from him as it becomes clear 452 00:23:33,520 --> 00:23:34,160 Speaker 3: that he will not. 453 00:23:34,240 --> 00:23:35,560 Speaker 4: Win the general election. 454 00:23:35,880 --> 00:23:38,800 Speaker 3: From your vantage point, what's sort of the tipping point 455 00:23:38,840 --> 00:23:41,480 Speaker 3: and who is the likely person to emerge at a 456 00:23:41,480 --> 00:23:44,040 Speaker 3: time when yesterday we were talking about Tim Scott and 457 00:23:44,080 --> 00:23:47,479 Speaker 3: how he has become the Wall Street darling in some ways, 458 00:23:47,720 --> 00:23:49,159 Speaker 3: at least when it comes to fundraising. 459 00:23:50,240 --> 00:23:53,399 Speaker 11: Yeah, you know, Elaine's been politics a long time and 460 00:23:53,440 --> 00:23:54,560 Speaker 11: knows what she's talking about. 461 00:23:54,600 --> 00:23:55,520 Speaker 10: But I've shifted. 462 00:23:55,600 --> 00:23:58,040 Speaker 11: I thought you wouldn't get the nomination, and now I 463 00:23:58,160 --> 00:24:00,159 Speaker 11: just don't see enough people getting out the door to 464 00:24:00,200 --> 00:24:02,600 Speaker 11: vote in the primaries coming up six months from now 465 00:24:02,800 --> 00:24:04,159 Speaker 11: to get knock him off. 466 00:24:04,200 --> 00:24:04,679 Speaker 1: His perch. 467 00:24:05,000 --> 00:24:06,040 Speaker 10: I think we have to see the. 468 00:24:06,040 --> 00:24:08,680 Speaker 11: Iowa polls seem to be shifting a little bit. DeSantis 469 00:24:08,680 --> 00:24:11,280 Speaker 11: seems to be gaining some ground. If DeSantis can gain 470 00:24:11,320 --> 00:24:13,200 Speaker 11: a little bit of ground in the next couple of months, 471 00:24:13,359 --> 00:24:16,320 Speaker 11: then he becomes worth a second look for primary voters 472 00:24:16,359 --> 00:24:19,520 Speaker 11: and investors, campaign contributors. So we just have to see 473 00:24:19,560 --> 00:24:21,720 Speaker 11: if he can get any momentum, even if he's losing 474 00:24:21,760 --> 00:24:25,640 Speaker 11: to Trump. Momentum will probably you know, reignite his campaign. 475 00:24:25,920 --> 00:24:28,119 Speaker 10: Then he becomes sort of the obvious option. 476 00:24:28,400 --> 00:24:30,760 Speaker 11: But he's got some real liabilities in the general election 477 00:24:30,880 --> 00:24:33,800 Speaker 11: as well, So I'm not sure the electability factor for 478 00:24:33,880 --> 00:24:36,679 Speaker 11: DeSantis actually you know, gets him over the top and 479 00:24:36,720 --> 00:24:37,880 Speaker 11: defeats Trump and the primary. 480 00:24:37,920 --> 00:24:40,080 Speaker 3: One thing I keep thinking about is that the entire 481 00:24:40,119 --> 00:24:42,600 Speaker 3: pitch for President Biden to run again is that he 482 00:24:42,720 --> 00:24:46,560 Speaker 3: is the only Democratic candidate who could win against Donald Trump. 483 00:24:47,000 --> 00:24:50,520 Speaker 3: This though at a time when his grassroots fundraising is 484 00:24:50,760 --> 00:24:54,400 Speaker 3: really lackluster, He's not getting the small donations that really 485 00:24:54,440 --> 00:24:58,960 Speaker 3: indicate a healthy popular campaign, and his popularity ratings have flagged. 486 00:24:59,200 --> 00:25:01,600 Speaker 3: Does it look less and less likely that he can 487 00:25:01,640 --> 00:25:04,919 Speaker 3: win reelection if he's against anyone except for Trump. 488 00:25:06,119 --> 00:25:08,760 Speaker 10: Yeah, I mean, I think that's the that's a big question, Lisa. 489 00:25:09,119 --> 00:25:11,160 Speaker 11: But you know, when we look at the economy, which 490 00:25:11,160 --> 00:25:14,480 Speaker 11: at the moment seems to be settling it down, and 491 00:25:14,800 --> 00:25:16,959 Speaker 11: the doom and gloom and DIYer predictions seem to be 492 00:25:17,000 --> 00:25:21,400 Speaker 11: diminishing on employment stays relatively low, inflation gets under control, 493 00:25:21,480 --> 00:25:23,440 Speaker 11: a year from now or more than a year from now, 494 00:25:23,960 --> 00:25:25,800 Speaker 11: voters are going to say, Okay, things are pretty good, 495 00:25:25,880 --> 00:25:28,400 Speaker 11: things are pretty stable, and if Trump is the nominee, 496 00:25:28,440 --> 00:25:30,560 Speaker 11: then we go back to chaos. I think that, in 497 00:25:30,680 --> 00:25:33,680 Speaker 11: the end is literally what saves Joe Biden and gives 498 00:25:33,720 --> 00:25:34,360 Speaker 11: him a reelection. 499 00:25:34,520 --> 00:25:36,960 Speaker 7: Wendy Shita, Thank you, Wendy. Wendys you at a brand 500 00:25:37,080 --> 00:25:38,000 Speaker 7: university this morning. 501 00:25:38,440 --> 00:25:42,320 Speaker 1: Subscribe to the Bloomberg Surveillance podcast on Apple, Spotify, and 502 00:25:42,440 --> 00:25:46,639 Speaker 1: anywhere else you get your podcasts. Listen live every weekday 503 00:25:46,920 --> 00:25:50,399 Speaker 1: starting at seven am Eastern on Bloomberg dot Com, the 504 00:25:50,520 --> 00:25:55,040 Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business App. You 505 00:25:55,080 --> 00:25:59,040 Speaker 1: can watch us live on Bloomberg Television and always on 506 00:25:59,119 --> 00:26:03,119 Speaker 1: the Bloomberg Term. Thanks for listening. I'm Tom Keen, and 507 00:26:03,280 --> 00:26:04,720 Speaker 1: this is Blumber