1 00:00:00,080 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:11,960 --> 00:00:15,560 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 3 00:00:15,600 --> 00:00:18,960 Speaker 2: with Paul Sweeney. Join us each day for insight from 4 00:00:18,960 --> 00:00:23,160 Speaker 2: the best in economics, finance, investment, and international relations. You 5 00:00:23,160 --> 00:00:26,520 Speaker 2: can also watch the show live on YouTube. Visit the 6 00:00:26,520 --> 00:00:31,280 Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday 7 00:00:31,280 --> 00:00:34,320 Speaker 2: mornings from seven to ten am Eastern from our global 8 00:00:34,360 --> 00:00:39,000 Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 9 00:00:39,360 --> 00:00:42,920 Speaker 2: or anywhere else you listen, and always I'm Bloomberg Radio, 10 00:00:43,080 --> 00:00:47,199 Speaker 2: the Bloomberg Terminal, and the Bloomberg Business App. We welcome 11 00:00:47,360 --> 00:00:50,239 Speaker 2: all of you across America and around the world, and 12 00:00:50,280 --> 00:00:54,200 Speaker 2: particularly all of you listening in Indian now to without question, 13 00:00:54,520 --> 00:00:57,720 Speaker 2: our Bloomberg Conversation of the day on the historic moment 14 00:00:58,360 --> 00:01:01,600 Speaker 2: for the Indian people. Rugg Rojin is at Boot School. 15 00:01:01,640 --> 00:01:05,520 Speaker 2: He's O School. His financial book on the Crisis of 16 00:01:05,800 --> 00:01:10,080 Speaker 2: seven eight won every award fault Lines. He is one 17 00:01:10,080 --> 00:01:12,600 Speaker 2: of our great financial professors and of course a former 18 00:01:12,640 --> 00:01:17,000 Speaker 2: head of a Central Bank of India. Far more importantly 19 00:01:17,720 --> 00:01:21,200 Speaker 2: is always Rogin out front. He has a book he 20 00:01:21,280 --> 00:01:24,840 Speaker 2: is delivering Breaking the Mold on his India. It will 21 00:01:24,840 --> 00:01:27,959 Speaker 2: be a definitive two hundred and seventy pages. Look for 22 00:01:28,000 --> 00:01:32,080 Speaker 2: that from Princeton University Press. Shortly, Ragu, thank you so 23 00:01:32,160 --> 00:01:34,759 Speaker 2: much for sending me the PDA for the book. I'm 24 00:01:34,760 --> 00:01:38,440 Speaker 2: going to cut to the Chase Professor the final sentence 25 00:01:38,480 --> 00:01:43,319 Speaker 2: of your book. They cannot have any more excuses. What 26 00:01:43,400 --> 00:01:46,240 Speaker 2: are the excuses Modi has now and what does he 27 00:01:46,319 --> 00:01:49,280 Speaker 2: need to move India to a new prosperity. 28 00:01:50,600 --> 00:01:55,800 Speaker 3: Well, we have an election. The results have been coming 29 00:01:55,840 --> 00:02:00,400 Speaker 3: out and I think it's a splendid result because it 30 00:02:00,480 --> 00:02:03,640 Speaker 3: tells the government it needs to change course. The old 31 00:02:03,720 --> 00:02:08,360 Speaker 3: course was unviable and we can talk about that. Of course, 32 00:02:08,400 --> 00:02:11,000 Speaker 3: markets seem to be disappointed. We can talk about that 33 00:02:11,160 --> 00:02:15,520 Speaker 3: also why markets are reacting negatively. But I think what 34 00:02:15,680 --> 00:02:19,400 Speaker 3: is happening today is really, in the long run, really 35 00:02:19,440 --> 00:02:23,240 Speaker 3: good for India because it forces India to choose a 36 00:02:23,280 --> 00:02:25,920 Speaker 3: different course from the one it has been on, a 37 00:02:26,040 --> 00:02:31,160 Speaker 3: course which has led to much wider unemployment and distress 38 00:02:31,560 --> 00:02:33,120 Speaker 3: than needed in the country. 39 00:02:33,360 --> 00:02:36,680 Speaker 2: Is this an election result that you see will bring 40 00:02:37,080 --> 00:02:42,000 Speaker 2: the technocratic and elite South together with a more emotional 41 00:02:42,080 --> 00:02:46,360 Speaker 2: and historic North. Does it bring the polarity of India 42 00:02:46,400 --> 00:02:49,720 Speaker 2: together or do we have a more separate India in 43 00:02:49,760 --> 00:02:51,080 Speaker 2: twenty twenty six. 44 00:02:52,200 --> 00:02:55,560 Speaker 3: No, it's it's actually a win for democracy, and that's 45 00:02:55,600 --> 00:02:59,680 Speaker 3: good for India because what democracy does is it allows 46 00:02:59,760 --> 00:03:04,400 Speaker 3: the different paths to essentially express themselves and to negotiate. 47 00:03:05,080 --> 00:03:08,799 Speaker 3: The problem earlier was India was trending towards a more 48 00:03:08,840 --> 00:03:13,079 Speaker 3: autocratic country, a country with one leader who was who 49 00:03:13,080 --> 00:03:17,160 Speaker 3: are a larger than like image, and that unfortunately meant 50 00:03:17,360 --> 00:03:21,639 Speaker 3: that the JP leadership wasn't listening, wasn't listening to the 51 00:03:21,680 --> 00:03:25,840 Speaker 3: economic news on the ground that people were actually suffering hardship, 52 00:03:26,320 --> 00:03:29,919 Speaker 3: wasn't listening to the broader sense that you know, the 53 00:03:29,960 --> 00:03:34,600 Speaker 3: weaponization of various instruments of the government to put you know, 54 00:03:34,639 --> 00:03:38,560 Speaker 3: opposition party leaders in jail was simply not jelling and 55 00:03:38,720 --> 00:03:41,120 Speaker 3: it would have taken India down a course which was 56 00:03:41,360 --> 00:03:43,839 Speaker 3: ruinous in the longer run, maybe in the short run 57 00:03:43,920 --> 00:03:47,280 Speaker 3: benefiti of the big, big business groups. And that's why 58 00:03:47,320 --> 00:03:48,840 Speaker 3: the market is reacting adversely. 59 00:03:49,200 --> 00:03:51,960 Speaker 2: But I think this is good Rock and Rogen with 60 00:03:52,120 --> 00:03:54,640 Speaker 2: us with Musco Chicago. We welcome all of you on 61 00:03:54,720 --> 00:03:59,720 Speaker 2: YouTube worldwide and particularly in South Asia. My colleague Damien Sassar, 62 00:04:00,080 --> 00:04:01,760 Speaker 2: Professor Rogin, Professor Rajen. 63 00:04:01,920 --> 00:04:06,160 Speaker 1: You have mentioned the concept of an authoritarian democracy and 64 00:04:06,200 --> 00:04:09,120 Speaker 1: how India is moving into that sort of bucket. Talk 65 00:04:09,200 --> 00:04:11,760 Speaker 1: to us a little bit about what this election means 66 00:04:12,160 --> 00:04:14,960 Speaker 1: for India and what it means for Numerendro Modi and 67 00:04:15,040 --> 00:04:17,440 Speaker 1: some of his policies on labor and whatnot. 68 00:04:18,720 --> 00:04:22,039 Speaker 3: So I think the key number to look at in 69 00:04:22,120 --> 00:04:27,039 Speaker 3: this election is the bgp's own seats in Parliament. They 70 00:04:27,440 --> 00:04:31,679 Speaker 3: almost surely will fall short of a majority, which means 71 00:04:31,720 --> 00:04:35,400 Speaker 3: that they have to actually take the support of other 72 00:04:35,480 --> 00:04:38,920 Speaker 3: parties convince them to stay on board, which means they 73 00:04:39,000 --> 00:04:42,279 Speaker 3: have to be much more sensitive to a broad based 74 00:04:42,760 --> 00:04:46,920 Speaker 3: set of policies. Now, the PGP has done some very 75 00:04:46,920 --> 00:04:50,240 Speaker 3: good things during its stint in power. For example, it 76 00:04:50,279 --> 00:04:54,080 Speaker 3: has improved the investment in infrastructure and you can see 77 00:04:54,279 --> 00:04:59,839 Speaker 3: Rhodes airports highways becoming much better in India. That's good. However, 78 00:05:00,080 --> 00:05:03,680 Speaker 3: what it has not articulated is a sensible policy for 79 00:05:03,800 --> 00:05:08,200 Speaker 3: broad based employment, and that almost surely requires policies on 80 00:05:08,279 --> 00:05:11,120 Speaker 3: human capital, how to skill up the workforce, how to 81 00:05:11,680 --> 00:05:15,479 Speaker 3: bring you know, industry together with universities and so on 82 00:05:15,600 --> 00:05:19,680 Speaker 3: to get people jobs. So the frustration with a BJP 83 00:05:19,800 --> 00:05:23,080 Speaker 3: has been mass unemployment, which is, you know, in an 84 00:05:23,080 --> 00:05:26,919 Speaker 3: authority regime. They simply don't even acknowledge the fact that 85 00:05:27,080 --> 00:05:31,000 Speaker 3: unemployment has been growing and is especially amongst the youth. 86 00:05:31,440 --> 00:05:34,479 Speaker 3: So what this election has done is essentially given them 87 00:05:34,480 --> 00:05:37,920 Speaker 3: a cold shower of reality that people are not happy 88 00:05:37,960 --> 00:05:41,120 Speaker 3: with your policies and that will force, you know, if 89 00:05:41,120 --> 00:05:46,160 Speaker 3: the BJP does come back to power after negotiating with allies, 90 00:05:46,600 --> 00:05:51,120 Speaker 3: it will force policies which are broader, more inclusive, and 91 00:05:51,160 --> 00:05:53,880 Speaker 3: more sensitive to the needs of the people. That's a 92 00:05:53,920 --> 00:05:54,280 Speaker 3: good thing. 93 00:05:54,800 --> 00:05:57,520 Speaker 2: This morning an extended interview with Rock and Roger of 94 00:05:57,560 --> 00:06:01,560 Speaker 2: the Buschool Chicago for those joining in America. A shock 95 00:06:01,880 --> 00:06:05,120 Speaker 2: a result or beginning of results, I should say, in 96 00:06:05,200 --> 00:06:08,320 Speaker 2: a Delhi election assumed to be dominant for mister Mody 97 00:06:08,680 --> 00:06:12,240 Speaker 2: and it was decidedly less so my colleague Damian Sassar. 98 00:06:12,240 --> 00:06:13,800 Speaker 1: Professor Roger, and I want to take you back to 99 00:06:13,839 --> 00:06:17,440 Speaker 1: your former role as director of research at the IMF. 100 00:06:17,520 --> 00:06:20,960 Speaker 1: You're familiar with workers' remittances, the role they play in India, 101 00:06:21,040 --> 00:06:23,480 Speaker 1: I mean the role they play globally. Eight hundred and 102 00:06:23,520 --> 00:06:26,479 Speaker 1: sixty million of remittances in twenty twenty three, India is 103 00:06:26,520 --> 00:06:29,320 Speaker 1: fifteen percent of that. Talk to us about what this 104 00:06:29,360 --> 00:06:33,000 Speaker 1: election means for the diaspora outside of India about the 105 00:06:33,040 --> 00:06:35,440 Speaker 1: flows of capital into India. Is it's going to change 106 00:06:35,440 --> 00:06:36,880 Speaker 1: things at all? 107 00:06:37,040 --> 00:06:40,359 Speaker 3: Well, I think it's It can actually be good news 108 00:06:40,680 --> 00:06:43,960 Speaker 3: both from the perspective. Remittance is will continue regardless of 109 00:06:44,000 --> 00:06:46,560 Speaker 3: who's in part. This is more you know, a lot 110 00:06:46,560 --> 00:06:49,480 Speaker 3: of money coming from the Middle East, some from the 111 00:06:49,600 --> 00:06:52,800 Speaker 3: United States and Europe for people to their families, and 112 00:06:52,839 --> 00:06:55,479 Speaker 3: that will continue that there's no reason why that would 113 00:06:55,839 --> 00:06:59,960 Speaker 3: be disrupted. What is interesting, however, is foreign direct investment 114 00:07:00,440 --> 00:07:03,440 Speaker 3: has been slowing into India over the last couple of years. 115 00:07:03,880 --> 00:07:07,279 Speaker 3: Some people argue that one of the reasons it has 116 00:07:07,360 --> 00:07:11,720 Speaker 3: been slowing is that, you know, people are worried about 117 00:07:12,400 --> 00:07:17,520 Speaker 3: arbitrary government policy, to the extent that a more democratic 118 00:07:18,480 --> 00:07:23,400 Speaker 3: dispensation at the center creates more stability about government policies, 119 00:07:24,040 --> 00:07:30,600 Speaker 3: especially it limits the weaponization of the tax authorities, of 120 00:07:30,640 --> 00:07:35,680 Speaker 3: the investigative authorities. Business actually will feel more comfortable, I hope, 121 00:07:35,800 --> 00:07:39,440 Speaker 3: and I think it is quite possible that private investment, 122 00:07:39,480 --> 00:07:42,000 Speaker 3: which has also be on the down as well as 123 00:07:42,040 --> 00:07:45,440 Speaker 3: foreign direct investment, could pick up slowly as it sees 124 00:07:45,680 --> 00:07:48,920 Speaker 3: policies emerge which are more comforting. 125 00:07:48,920 --> 00:07:52,000 Speaker 2: Professor, within your new book, breaking the Mold, And I 126 00:07:52,040 --> 00:07:54,760 Speaker 2: guess the answer is for every central bank. The raging 127 00:07:54,840 --> 00:07:58,560 Speaker 2: vogue now is to pull climate change into some form 128 00:07:58,600 --> 00:08:03,840 Speaker 2: of monetary policy mandate from whatever the nation is. Climate 129 00:08:03,960 --> 00:08:07,640 Speaker 2: change is reality in India New Deli today, I believe 130 00:08:07,680 --> 00:08:10,320 Speaker 2: the high of one hundred and eleven, one hundred and fourteen? 131 00:08:10,440 --> 00:08:14,440 Speaker 2: Fair nit, who's counting, Professor? What does India do and 132 00:08:14,480 --> 00:08:18,120 Speaker 2: what does Modi do to immediately break the mold on 133 00:08:18,240 --> 00:08:20,160 Speaker 2: a climate change out of control? 134 00:08:21,040 --> 00:08:24,360 Speaker 3: Well, this is precisely what the book is about. Can 135 00:08:24,400 --> 00:08:27,960 Speaker 3: India afford to become another China? Does the world have 136 00:08:28,120 --> 00:08:31,720 Speaker 3: room for another China? Becoming a manufacturing giant? And that 137 00:08:31,880 --> 00:08:34,280 Speaker 3: was the direction the more the government was trying to 138 00:08:34,360 --> 00:08:39,320 Speaker 3: go in offering massive subsidies to capital intensive manufacturing and 139 00:08:39,520 --> 00:08:43,120 Speaker 3: it you know the reality is that China's already there. 140 00:08:44,240 --> 00:08:48,120 Speaker 3: There is very little place for another manufacturing giant, especially 141 00:08:48,160 --> 00:08:51,280 Speaker 3: given the protectionism that's right in the world. But India 142 00:08:51,400 --> 00:08:54,600 Speaker 3: has a card up its leave. It actually is doing 143 00:08:54,679 --> 00:08:58,760 Speaker 3: far better in services exports, which is much greener, much 144 00:08:58,760 --> 00:09:03,679 Speaker 3: more sustainable and You're seeing a huge growth in skilled 145 00:09:03,679 --> 00:09:08,559 Speaker 3: services exported to the rest of them, whether it's telemedicine, consulting, 146 00:09:09,000 --> 00:09:12,679 Speaker 3: chip design, lots of new areas opening up. India accounts 147 00:09:12,760 --> 00:09:14,800 Speaker 3: of five percent of global trade there. That's good. 148 00:09:14,960 --> 00:09:19,000 Speaker 2: How do you unify a nation with over twenty languages? 149 00:09:19,240 --> 00:09:22,319 Speaker 2: We in the United States are in a panic. I mean, 150 00:09:22,559 --> 00:09:25,360 Speaker 2: there's two languages in Chicago, the Cubs in a white Sox. 151 00:09:25,440 --> 00:09:28,880 Speaker 2: That's a different story. But ragu, how do you unify 152 00:09:29,880 --> 00:09:34,320 Speaker 2: towards a new India around twenty disparate languages? 153 00:09:35,440 --> 00:09:39,920 Speaker 3: Tom, It's more than that. It's twenty official languages, which 154 00:09:39,920 --> 00:09:43,200 Speaker 3: means they have enough people speaking it, but there are 155 00:09:43,240 --> 00:09:49,320 Speaker 3: six hundred additional dialects and languages. It's a vast complicated country. 156 00:09:49,679 --> 00:09:53,040 Speaker 3: And the only way it's unified is through democracy, because 157 00:09:53,040 --> 00:09:58,840 Speaker 3: democracy allows each each community a voice. You talked about 158 00:09:58,880 --> 00:10:02,280 Speaker 3: twenty twenty six in in India, that's when the parliamentary 159 00:10:02,320 --> 00:10:10,080 Speaker 3: seats get reapportioned. When there will be a move to 160 00:10:10,160 --> 00:10:13,120 Speaker 3: have new seats in parliament for the more populous areas. 161 00:10:13,559 --> 00:10:16,680 Speaker 3: That has to be done by consensus, and what I'm 162 00:10:16,920 --> 00:10:20,600 Speaker 3: so glad about is that it will be done by consensus. 163 00:10:20,640 --> 00:10:24,360 Speaker 3: Because democracy has re established itself in India and they 164 00:10:24,400 --> 00:10:28,600 Speaker 3: will have to negotiate how that reapportionment helps. So India 165 00:10:28,720 --> 00:10:32,199 Speaker 3: is more politically stable as a result of this election, 166 00:10:32,640 --> 00:10:34,920 Speaker 3: is also going to be a greater friend for the 167 00:10:34,960 --> 00:10:36,199 Speaker 3: democracies of the world. 168 00:10:36,280 --> 00:10:38,360 Speaker 2: Yeah, Damien, I know one of your focuses is on 169 00:10:38,440 --> 00:10:40,880 Speaker 2: India Russia, and of course it goes back to Neyhror's 170 00:10:41,000 --> 00:10:45,480 Speaker 2: visit in nineteen fifty five to Russia and all the 171 00:10:45,600 --> 00:10:50,120 Speaker 2: responses through the sixties of James John Kenneth Galbray think 172 00:10:50,200 --> 00:10:54,000 Speaker 2: Kennedy trying to reaffirm an American presence from a distance. 173 00:10:54,120 --> 00:10:56,400 Speaker 1: That's absolutely right. And Professor Rajan, I'd really like to 174 00:10:56,440 --> 00:11:00,000 Speaker 1: hear your opinion on the relationship between India and Russia. Obviously, 175 00:11:00,080 --> 00:11:02,840 Speaker 1: they've been a big consumer of Russian barrels of Russian oil, 176 00:11:03,200 --> 00:11:04,960 Speaker 1: and if you look at the tenure and the correlation 177 00:11:05,080 --> 00:11:08,800 Speaker 1: between the Indian tenure and Brent crude, it is pretty strong. 178 00:11:08,840 --> 00:11:10,640 Speaker 1: It has been since two thousand, So talk to us 179 00:11:10,640 --> 00:11:13,120 Speaker 1: a little bit about that relationship India and Russia. 180 00:11:14,160 --> 00:11:18,920 Speaker 3: Well, India sort of tilted towards Russia when the US 181 00:11:19,000 --> 00:11:22,719 Speaker 3: tilted away from India. India and the United States were 182 00:11:22,800 --> 00:11:26,880 Speaker 3: quite friendly in the sixties, but then you know, as 183 00:11:27,679 --> 00:11:33,160 Speaker 3: the Bangladesh situation developed, the US tilted away from India, 184 00:11:33,640 --> 00:11:36,280 Speaker 3: and that's when Russia moved towards India. There was a 185 00:11:36,360 --> 00:11:40,320 Speaker 3: strong friendship through the sixties, seventies and eighties. India buys 186 00:11:40,400 --> 00:11:43,920 Speaker 3: a lot of military hardware from Russia, so it has 187 00:11:44,040 --> 00:11:49,400 Speaker 3: been attended that has changed. India increasingly is buying from 188 00:11:49,400 --> 00:11:52,640 Speaker 3: the West, you know, from France, from the United States, 189 00:11:53,080 --> 00:11:58,440 Speaker 3: and that relationship is strengthening. So this is a work 190 00:11:59,120 --> 00:12:03,560 Speaker 3: in process. India understands increasingly Russia is going to be 191 00:12:03,720 --> 00:12:08,560 Speaker 3: dependent on China, which is unfortunately. At this point the 192 00:12:08,640 --> 00:12:11,479 Speaker 3: relationship between India and China is one antagonist. 193 00:12:12,160 --> 00:12:15,360 Speaker 2: Soago, I've got time for one more question. I have 194 00:12:15,400 --> 00:12:18,319 Speaker 2: to interrupt and be rude. If you are called upon 195 00:12:18,440 --> 00:12:21,440 Speaker 2: by mister Mody, will you serve the Indian people within 196 00:12:21,480 --> 00:12:22,320 Speaker 2: his new government. 197 00:12:23,520 --> 00:12:27,800 Speaker 3: Well, I think that's an unlikely prospect. You know, my 198 00:12:28,800 --> 00:12:32,079 Speaker 3: sort of inclination is whenever there's a government I can 199 00:12:32,120 --> 00:12:35,600 Speaker 3: agree with, I'm happy to work with them. I've always 200 00:12:35,640 --> 00:12:37,720 Speaker 3: been open with advice. Let's see what happens. 201 00:12:38,200 --> 00:12:41,520 Speaker 2: Rogert, thank you so much. We're really anticipating breaking the 202 00:12:41,600 --> 00:12:45,439 Speaker 2: mole two hundred and seventy pages from Princeton University pres 203 00:12:45,480 --> 00:12:49,880 Speaker 2: look for that from Professor Rogin the Bout School, Chicago. 204 00:13:00,679 --> 00:13:04,160 Speaker 2: It is legendary at the University of Virginia. The largest 205 00:13:04,160 --> 00:13:07,840 Speaker 2: birthday party ever in the history of the University of 206 00:13:07,920 --> 00:13:11,120 Speaker 2: Virginia was on the lawn for Kate Moore. It was 207 00:13:11,160 --> 00:13:15,040 Speaker 2: only eight nine, ten years ago. Joining us now this morning, 208 00:13:15,120 --> 00:13:17,680 Speaker 2: Kate Moore from black Rock and our global allocation team. 209 00:13:17,720 --> 00:13:19,840 Speaker 2: Kate Moore, Happy birthday to you. 210 00:13:20,520 --> 00:13:23,719 Speaker 4: Oh thanks Tom. I must say it's great to be 211 00:13:23,800 --> 00:13:24,520 Speaker 4: twenty nine again. 212 00:13:25,679 --> 00:13:28,040 Speaker 2: We're we're all work as SaaS. The only one getting 213 00:13:28,040 --> 00:13:31,480 Speaker 2: away to the Kate Moore's Damien Sassa is cottenshiseled and 214 00:13:31,559 --> 00:13:34,280 Speaker 2: doing thirty six holes on the golf course. Kate Moore, 215 00:13:34,280 --> 00:13:36,719 Speaker 2: I want you to measure the level of xuberance right now. 216 00:13:36,760 --> 00:13:39,640 Speaker 2: I see a lot of fancy technical studies that say 217 00:13:39,640 --> 00:13:42,840 Speaker 2: we're just not as exuberant is nineteen ninety nine. Do 218 00:13:42,960 --> 00:13:43,439 Speaker 2: you buy it? 219 00:13:44,480 --> 00:13:44,680 Speaker 1: Yeah? 220 00:13:44,720 --> 00:13:46,920 Speaker 4: I don't see a huge amount of exuberance. Actually, let's 221 00:13:46,920 --> 00:13:50,640 Speaker 4: just talk about exuberance. Over the course of twenty twenty four, right, 222 00:13:50,679 --> 00:13:53,719 Speaker 4: we had gotten to a pretty excited place by the 223 00:13:53,880 --> 00:13:56,880 Speaker 4: end of March. Obviously, stocks were putting up big gains. 224 00:13:57,440 --> 00:14:00,120 Speaker 4: At people who had been skeptics around the resilience of 225 00:14:00,160 --> 00:14:02,640 Speaker 4: you as economy had to throw in that towel. It 226 00:14:02,720 --> 00:14:06,760 Speaker 4: seemed like everyone was afraid of being underweight or under risked. 227 00:14:07,240 --> 00:14:09,640 Speaker 4: And I think a lot of that has faded. You know, 228 00:14:09,640 --> 00:14:11,880 Speaker 4: we had a tougher April, and now we've had a 229 00:14:11,880 --> 00:14:15,120 Speaker 4: lot of cross currents as companies have reported earnings, you know, 230 00:14:15,200 --> 00:14:18,760 Speaker 4: some good news and some just okay news, and lots 231 00:14:18,880 --> 00:14:22,720 Speaker 4: of unexpected sort of changes in the macro environment and 232 00:14:22,920 --> 00:14:26,840 Speaker 4: in the policy rate expectations. So I would say we're 233 00:14:26,880 --> 00:14:29,680 Speaker 4: just in a kind of a lukewarm but not negative, 234 00:14:29,720 --> 00:14:31,320 Speaker 4: but a lukewarm state at the moment. 235 00:14:31,440 --> 00:14:33,600 Speaker 1: Happy birthday, Kate, and I agree with you. Things are 236 00:14:33,720 --> 00:14:36,120 Speaker 1: far more asymmetric. I mean they're not as asymmetric, the 237 00:14:36,160 --> 00:14:38,600 Speaker 1: far more two sided. Given the movie we've seen since. 238 00:14:38,640 --> 00:14:41,920 Speaker 2: April, you're saying there's an asymmetry between thirty nine and 239 00:14:42,000 --> 00:14:42,680 Speaker 2: twenty nine. 240 00:14:44,640 --> 00:14:48,560 Speaker 1: No asymmetry there whatsoever. So miss Moore King dollars flexing 241 00:14:48,600 --> 00:14:51,120 Speaker 1: its muscles yet again, right, I mean, let's be real here. 242 00:14:51,160 --> 00:14:53,520 Speaker 1: I mean, this is not a US exceptionalism move. This 243 00:14:53,600 --> 00:14:56,480 Speaker 1: is a risk off move. Every single currency in G 244 00:14:56,600 --> 00:14:58,400 Speaker 1: ten and EM with the exception of the pound, is 245 00:14:58,440 --> 00:15:01,360 Speaker 1: now down versus the dollar to date. Talk to us 246 00:15:01,360 --> 00:15:03,000 Speaker 1: about king dollar in the current environment. 247 00:15:04,040 --> 00:15:06,200 Speaker 4: Yeah, we've had a modest overweight to the dollar throughout 248 00:15:06,240 --> 00:15:08,320 Speaker 4: the course of this year. Not a huge bet, but 249 00:15:08,400 --> 00:15:10,880 Speaker 4: just kind of an expectation that US economy was going 250 00:15:10,920 --> 00:15:13,160 Speaker 4: to be stronger than some of our big trading partners 251 00:15:13,200 --> 00:15:15,680 Speaker 4: and therefore kind of justified. But I have to say, 252 00:15:15,720 --> 00:15:17,360 Speaker 4: I think there is a little bit of a risk 253 00:15:17,360 --> 00:15:20,240 Speaker 4: off element to it, as you suggest, and there is 254 00:15:20,320 --> 00:15:24,520 Speaker 4: also an understanding that the US economy is very resilient 255 00:15:24,760 --> 00:15:27,400 Speaker 4: and quite a lot of them both consumer although that's 256 00:15:27,560 --> 00:15:29,480 Speaker 4: you know people that did debate that, but the consumer 257 00:15:29,560 --> 00:15:32,200 Speaker 4: data and the corporate data is still really strong. So 258 00:15:32,840 --> 00:15:35,360 Speaker 4: you know, I'm not a great currency forecaster, but I 259 00:15:35,360 --> 00:15:37,280 Speaker 4: wouldn't bet against the dollar at least in the next 260 00:15:37,320 --> 00:15:37,840 Speaker 4: few months. 261 00:15:38,480 --> 00:15:40,280 Speaker 2: Just in folks, I really want to bring this to 262 00:15:40,280 --> 00:15:43,200 Speaker 2: your attention. After Damien talks to Kate More of Blackrock, 263 00:15:43,560 --> 00:15:45,520 Speaker 2: we're thrilled to go to Delhi and we'll speak to 264 00:15:45,560 --> 00:15:49,840 Speaker 2: Derek Wallbank of Bloomberg News on the stunning election. Damien. 265 00:15:49,880 --> 00:15:51,840 Speaker 1: Well, let's stay here, Kate. Let's stay with the US. 266 00:15:51,920 --> 00:15:54,160 Speaker 1: Let's stay with US equities, right. I mean, we've had 267 00:15:54,160 --> 00:15:56,520 Speaker 1: some pretty big moves in Telco and it year to date. 268 00:15:56,560 --> 00:15:58,680 Speaker 1: Do we lean into that. I mean, if we had 269 00:15:58,720 --> 00:16:01,160 Speaker 1: this risk off move off, things sort of settling in here, 270 00:16:01,560 --> 00:16:03,920 Speaker 1: I mean, is it you know, is this a buying opportunity? 271 00:16:04,760 --> 00:16:06,560 Speaker 4: Yeah, Damien. One of the things I will say is 272 00:16:06,640 --> 00:16:09,720 Speaker 4: I love that the leadership this year is really being 273 00:16:09,800 --> 00:16:12,360 Speaker 4: driven by fundamentals. I mean, I know there are skeptics 274 00:16:12,400 --> 00:16:15,200 Speaker 4: out there saying these this run can't continue. We know 275 00:16:15,280 --> 00:16:18,200 Speaker 4: the companies that are performing the best are those that 276 00:16:18,200 --> 00:16:22,080 Speaker 4: are putting up earnings during their earnings reporting, have affirmed 277 00:16:22,120 --> 00:16:26,440 Speaker 4: guidance and oftentimes raised guidance and set higher expectations. These 278 00:16:26,440 --> 00:16:29,400 Speaker 4: are companies on a really solid path, in some cases, 279 00:16:29,480 --> 00:16:32,800 Speaker 4: on a secular path, separate from the business cycle. We're 280 00:16:32,800 --> 00:16:34,920 Speaker 4: not in a position where people are just kind of 281 00:16:35,000 --> 00:16:38,640 Speaker 4: hyping up or speculating on what may happen in the future. 282 00:16:38,640 --> 00:16:42,040 Speaker 4: This technology is here today. These companies are delivering revenues 283 00:16:42,080 --> 00:16:45,200 Speaker 4: and they're printing cash. So because of that, I would 284 00:16:45,200 --> 00:16:49,840 Speaker 4: not fade the leadership of these big cap tech anytime soon. 285 00:16:49,920 --> 00:16:51,960 Speaker 1: Yeah, But Kate, I mean value and quality are both 286 00:16:52,000 --> 00:16:54,000 Speaker 1: down as a strategy here to date, right, I mean, 287 00:16:54,040 --> 00:16:55,680 Speaker 1: I think it's been the low vol factor. I mean, 288 00:16:55,720 --> 00:16:57,640 Speaker 1: I'm not going to get into all that because everybody 289 00:16:57,640 --> 00:17:00,440 Speaker 1: calculates these industries a different way. But equity, I mean, 290 00:17:00,480 --> 00:17:02,080 Speaker 1: that's a four percent year today, and I mean it 291 00:17:02,120 --> 00:17:04,119 Speaker 1: seems to be there, seem to be you know, some 292 00:17:04,200 --> 00:17:05,480 Speaker 1: technicals that work here now. 293 00:17:06,280 --> 00:17:07,760 Speaker 4: Yeah, there are a lot of technicals. And actually we 294 00:17:07,800 --> 00:17:10,800 Speaker 4: pay very close attention to positioning and sentiment to try 295 00:17:10,800 --> 00:17:13,760 Speaker 4: and time our entry and exit into different positions. And 296 00:17:13,800 --> 00:17:16,560 Speaker 4: we've been using options pretty aggressively. Given the ball market, 297 00:17:16,680 --> 00:17:18,800 Speaker 4: you know, we've been given a lot of opportunities to 298 00:17:18,880 --> 00:17:22,040 Speaker 4: buy very cheap fall and to sell all when you 299 00:17:22,080 --> 00:17:25,320 Speaker 4: know it was a good opportunity quickly, Kate, we're. 300 00:17:25,200 --> 00:17:28,359 Speaker 2: Out of time. But what's the sentiment did you see 301 00:17:28,440 --> 00:17:32,160 Speaker 2: among fancy people like at hedge funds on big tech? 302 00:17:32,480 --> 00:17:35,240 Speaker 2: Is there a big tech bet or have they pulled away? 303 00:17:36,560 --> 00:17:38,520 Speaker 4: I think they're constructive for the most part. Of course, 304 00:17:38,560 --> 00:17:41,040 Speaker 4: it's going to depend on this segment. We haven't seen 305 00:17:41,160 --> 00:17:43,640 Speaker 4: huge shorting of the big names. In fact, no one 306 00:17:43,640 --> 00:17:45,359 Speaker 4: wants to really stand in front of that train. Whether 307 00:17:45,400 --> 00:17:48,159 Speaker 4: you're a mutual fund investor, a retail investor, or a 308 00:17:48,200 --> 00:17:50,800 Speaker 4: hedge fund investor. I said, as long as these companies 309 00:17:50,840 --> 00:17:53,760 Speaker 4: continue to have the fundamentals, Tom, I think it's going 310 00:17:53,800 --> 00:17:56,280 Speaker 4: to be an important part of your portfolio for the 311 00:17:56,320 --> 00:17:57,640 Speaker 4: balance of twenty twenty four. 312 00:17:57,560 --> 00:18:00,159 Speaker 2: Twenty nine. Candles Kate more Heavy Birthday, Thank thank you 313 00:18:00,240 --> 00:18:06,800 Speaker 2: so much for joining us. Folks. We have Julie Norman 314 00:18:06,840 --> 00:18:08,600 Speaker 2: on just because of time in this vamp that we 315 00:18:08,680 --> 00:18:10,840 Speaker 2: just did in Stanley Cup hockey. I'm not going to 316 00:18:10,880 --> 00:18:15,560 Speaker 2: harass her about Baltimore Orioles best team in baseball, but seriously, 317 00:18:16,280 --> 00:18:19,040 Speaker 2: this is the courage of Julie Norman of the University 318 00:18:19,040 --> 00:18:22,280 Speaker 2: of College London. She is, without question, one of the 319 00:18:22,359 --> 00:18:26,080 Speaker 2: experts in the world on a difficult word, terrorism and 320 00:18:26,119 --> 00:18:29,399 Speaker 2: she has taken on the challenge of a book on 321 00:18:29,440 --> 00:18:34,119 Speaker 2: the political history of Gaza. Professor Norman honor to have 322 00:18:34,160 --> 00:18:36,960 Speaker 2: you with us this morning. What is the political future 323 00:18:37,320 --> 00:18:39,359 Speaker 2: of Gaza? 324 00:18:39,480 --> 00:18:42,040 Speaker 5: Oh gosh, Tom, I think that's the question that is 325 00:18:42,080 --> 00:18:44,360 Speaker 5: on everyone's mind right now, and it's certainly the one 326 00:18:44,400 --> 00:18:47,760 Speaker 5: that I think Biden is really trying to push Netnahu 327 00:18:47,880 --> 00:18:51,040 Speaker 5: on these days. You know, Biden put out this ceasefire 328 00:18:51,080 --> 00:18:55,080 Speaker 5: plan ostensibly approved by Israel, but part of that was 329 00:18:55,119 --> 00:18:56,840 Speaker 5: to get the ceasefire, and part of it was just 330 00:18:56,880 --> 00:18:59,960 Speaker 5: to get Netanyahu's starting to articulate what a day after 331 00:19:00,119 --> 00:19:01,600 Speaker 5: might look like in Gaza. 332 00:19:02,280 --> 00:19:06,240 Speaker 2: Well, okay, but importantly everybody's running for election and posturing 333 00:19:06,280 --> 00:19:11,520 Speaker 2: for their domestic politics. Is the American relationship with Israel changed? 334 00:19:11,880 --> 00:19:16,200 Speaker 2: Whatever the future is oft in Yahoo or Prime Minister 335 00:19:16,320 --> 00:19:19,520 Speaker 2: Sasa or whatever it is, is the future changed in 336 00:19:19,600 --> 00:19:21,880 Speaker 2: American Israeli relations? 337 00:19:23,200 --> 00:19:25,520 Speaker 5: You know, I think there's two ways to answer that. 338 00:19:25,600 --> 00:19:28,760 Speaker 5: One is governmental relations with Israel. And I would say, 339 00:19:29,280 --> 00:19:33,199 Speaker 5: at that level, whether it's president, whether it's Congress, we 340 00:19:33,280 --> 00:19:37,320 Speaker 5: still see very strong support for Israel pretty much across 341 00:19:37,359 --> 00:19:41,399 Speaker 5: the board. Obviously some exceptions within Democratic Party representatives. I 342 00:19:41,400 --> 00:19:43,720 Speaker 5: think where we're seeing the shift those with public opinion, 343 00:19:43,920 --> 00:19:48,040 Speaker 5: obviously with young voters, young citizens in particular, and really 344 00:19:48,119 --> 00:19:50,280 Speaker 5: you know, on the more progressive wing, with the Democratic 345 00:19:50,320 --> 00:19:53,600 Speaker 5: Party more broadly now split essentially fifty to fifty on 346 00:19:53,720 --> 00:19:57,399 Speaker 5: leaning more sympathetic towards Palestinians and more sympathetic towards Israel. 347 00:19:57,440 --> 00:19:59,880 Speaker 5: So I do think that trend is going to continue, 348 00:20:00,000 --> 00:20:02,399 Speaker 5: and it's one that lawmakers will have to grapple with 349 00:20:02,560 --> 00:20:04,560 Speaker 5: is you know, incoming years a bit more than they 350 00:20:04,600 --> 00:20:05,320 Speaker 5: have in the past. 351 00:20:05,840 --> 00:20:07,760 Speaker 1: Doctor Norman, I'm curious to hear your thoughts of what's 352 00:20:07,800 --> 00:20:09,880 Speaker 1: going on south the border. We had an election in Mexico, 353 00:20:11,000 --> 00:20:15,600 Speaker 1: Claudie Shinbaum, Jewish former mayor for the city for Mexico City, 354 00:20:15,760 --> 00:20:19,280 Speaker 1: at thirty percentage point. When is president, does that change 355 00:20:19,320 --> 00:20:22,239 Speaker 1: Mexico's relationship with Israel at all? 356 00:20:22,400 --> 00:20:25,000 Speaker 5: Yeah, it'll be interesting to see. You know, obviously very 357 00:20:25,040 --> 00:20:27,159 Speaker 5: notable that she is not only the first woman, but 358 00:20:27,200 --> 00:20:29,960 Speaker 5: the first Jewish person to hold that office. But she 359 00:20:30,080 --> 00:20:33,040 Speaker 5: has made statements before that you know, she doesn't agree 360 00:20:33,080 --> 00:20:36,120 Speaker 5: with Zionism. I think she does identify in fact as 361 00:20:36,160 --> 00:20:38,840 Speaker 5: like an anti Zionist. So she seems to be, at 362 00:20:38,920 --> 00:20:42,280 Speaker 5: least up until this point, upholding what Mexico stance has 363 00:20:42,359 --> 00:20:45,880 Speaker 5: been as being very pro Palestine, you know, showing their 364 00:20:46,680 --> 00:20:50,120 Speaker 5: showing their dissatisfaction with Israeli policies. But again, she's been 365 00:20:50,119 --> 00:20:53,960 Speaker 5: towing the line of her predecessor up until this point, 366 00:20:54,000 --> 00:20:55,520 Speaker 5: and I think we're not really sure what many of 367 00:20:55,520 --> 00:20:58,359 Speaker 5: her policies are going to be in general simply because 368 00:20:58,400 --> 00:21:01,200 Speaker 5: she's been simply a kind of walking the party line, 369 00:21:01,200 --> 00:21:03,080 Speaker 5: and once she's in office, we might see some changes. 370 00:21:03,200 --> 00:21:05,439 Speaker 1: I'm getting that same feeling, doctor, I mean, just the 371 00:21:05,480 --> 00:21:08,320 Speaker 1: uncertainty surrounding what her appointment means as president. But you know, 372 00:21:08,440 --> 00:21:10,680 Speaker 1: let's shift gears. Let's talk about Ukraine. Let's talk about 373 00:21:10,720 --> 00:21:12,879 Speaker 1: the I'MA funding that they received last week. I mean, 374 00:21:12,880 --> 00:21:15,159 Speaker 1: that's good news, but there's another sort of summ and 375 00:21:15,280 --> 00:21:18,160 Speaker 1: other fundraiser books with Biden talk to us about US 376 00:21:18,280 --> 00:21:20,560 Speaker 1: Ukrainian relations. I mean, what do we expect there? 377 00:21:21,920 --> 00:21:23,879 Speaker 5: Yeah, So, you know, I think it's a tough spot 378 00:21:23,920 --> 00:21:26,640 Speaker 5: for Biden right now. Obviously he got through the big 379 00:21:26,680 --> 00:21:29,560 Speaker 5: aid package, you know, two months ago. That was a 380 00:21:29,680 --> 00:21:31,800 Speaker 5: very long time coming. I think that's going to be 381 00:21:31,840 --> 00:21:35,119 Speaker 5: the last big infusion of military aid at least that 382 00:21:35,160 --> 00:21:38,600 Speaker 5: we see going to the going to Ukraine anytime soon. 383 00:21:39,160 --> 00:21:41,520 Speaker 5: And as the war goes on, I think Biden's getting 384 00:21:41,560 --> 00:21:43,600 Speaker 5: to a point of just as is the what is 385 00:21:43,640 --> 00:21:45,840 Speaker 5: the endgame here? What is all this going towards? And 386 00:21:45,880 --> 00:21:48,040 Speaker 5: I think those conversations are starting to happen more. 387 00:21:48,600 --> 00:21:52,399 Speaker 2: Professor Norman, do your claimed expertise and I'm not saying 388 00:21:52,400 --> 00:21:55,280 Speaker 2: this to be Snyder snarky. I think it's a serious question. 389 00:21:56,200 --> 00:22:01,600 Speaker 2: Is Hamas defeated or trending for defeated? How do you 390 00:22:01,760 --> 00:22:03,280 Speaker 2: gauge that? How do you measure that? 391 00:22:04,600 --> 00:22:07,800 Speaker 5: Yeah, so this has obviously been one of Israel's main objectives, 392 00:22:07,920 --> 00:22:11,240 Speaker 5: and the US right now is assessing that Hamas has 393 00:22:11,280 --> 00:22:15,399 Speaker 5: been sufficiently depleted in the sense that they couldn't carry 394 00:22:15,400 --> 00:22:18,679 Speaker 5: out a massive military attack, they couldn't govern effectively, that 395 00:22:18,800 --> 00:22:21,400 Speaker 5: sort of thing. At this point, I would just say, 396 00:22:21,480 --> 00:22:24,680 Speaker 5: though Hamas is so many different actors all at once. 397 00:22:24,800 --> 00:22:28,880 Speaker 5: They're a military operation, they are a political party, they're 398 00:22:28,880 --> 00:22:31,720 Speaker 5: a social movement, and there's a lot of just everyday 399 00:22:31,760 --> 00:22:35,160 Speaker 5: people who identify as Hamas supporters. So I don't think 400 00:22:35,200 --> 00:22:39,360 Speaker 5: the movement itself is close to being wiped out. And honestly, 401 00:22:39,400 --> 00:22:41,480 Speaker 5: I feel like many that after the guys of war, 402 00:22:41,560 --> 00:22:44,760 Speaker 5: they will probably be able to recruit quite effectively, or 403 00:22:45,160 --> 00:22:47,320 Speaker 5: a group very similar to them will likely be able 404 00:22:47,320 --> 00:22:48,679 Speaker 5: to recruit very effectively. 405 00:22:49,200 --> 00:22:50,720 Speaker 1: And doctor Norman talks to us a little, just a 406 00:22:50,760 --> 00:22:53,040 Speaker 1: bit just about I mean, look, I can't believe I'm 407 00:22:53,080 --> 00:22:53,359 Speaker 1: saying this. 408 00:22:53,520 --> 00:22:54,040 Speaker 2: Russia. 409 00:22:54,160 --> 00:22:57,240 Speaker 1: Russian relationships with the West with the US specifically, I mean, 410 00:22:57,320 --> 00:22:59,280 Speaker 1: talk to us a little bit about, you know, what 411 00:22:59,400 --> 00:23:01,439 Speaker 1: comes next for the country, what comes next for its 412 00:23:01,480 --> 00:23:05,080 Speaker 1: relationships with the former Soviet states. I mean, I'm thinking Armenia, 413 00:23:05,119 --> 00:23:08,320 Speaker 1: I'm thinking Azerbaijan, I'm thinking you know, I'm thinking quite frankly, 414 00:23:08,680 --> 00:23:10,679 Speaker 1: you know, Luzbekistan and a lot of the sort of 415 00:23:10,840 --> 00:23:12,560 Speaker 1: step out of China. You talk to us a little 416 00:23:12,560 --> 00:23:13,760 Speaker 1: bit about what's going on there. 417 00:23:14,960 --> 00:23:17,399 Speaker 5: Yeah, sure, so, I would say, you know, obviously, I 418 00:23:17,440 --> 00:23:19,800 Speaker 5: don't think things will change with the US, at least 419 00:23:19,840 --> 00:23:22,280 Speaker 5: within these next six months, at least during the Biden 420 00:23:22,320 --> 00:23:25,159 Speaker 5: presidency and with the Ukraine War, But with much of 421 00:23:25,160 --> 00:23:29,120 Speaker 5: the rest of the world, including former Soviet estates, including 422 00:23:29,200 --> 00:23:31,919 Speaker 5: much of the global South, you know, they have viewed 423 00:23:31,920 --> 00:23:35,200 Speaker 5: this war very differently than the US. They have continued, 424 00:23:35,520 --> 00:23:38,600 Speaker 5: you know, trading with Russia, taking advantage of cheaper prices 425 00:23:38,640 --> 00:23:42,600 Speaker 5: and really trying to kind of straddle both lines. So globally, 426 00:23:42,680 --> 00:23:46,800 Speaker 5: I feel like Russia is actually still doing fine with 427 00:23:46,320 --> 00:23:49,960 Speaker 5: man with many states, and they will probably continue on 428 00:23:50,000 --> 00:23:52,720 Speaker 5: that trajectory as as anti Western sentiment increases. 429 00:23:53,200 --> 00:23:57,040 Speaker 2: Unfortunately, professor, we've got forty five seconds left since you 430 00:23:57,160 --> 00:24:01,879 Speaker 2: bleed Baltimore Orioles Orange with the new ownership. Should the 431 00:24:02,000 --> 00:24:05,119 Speaker 2: Orioles be aggressive at the trade deadline? 432 00:24:06,320 --> 00:24:08,400 Speaker 5: Oh, I mean I would just say I put all 433 00:24:08,400 --> 00:24:11,320 Speaker 5: my trust in David Rubinstein, like whatever he thinks is best, 434 00:24:11,359 --> 00:24:14,000 Speaker 5: I will like trust. He's brought a lot of graphics 435 00:24:14,040 --> 00:24:17,120 Speaker 5: to Baltimore and we're all just super excited. 436 00:24:17,600 --> 00:24:20,600 Speaker 2: Nailed it. Professor Normany just knows how to get back 437 00:24:20,640 --> 00:24:24,359 Speaker 2: on the show. Julie Norman, thank you so much and 438 00:24:24,440 --> 00:24:28,320 Speaker 2: really anticipated as our most serious history about the political 439 00:24:28,440 --> 00:24:42,840 Speaker 2: history of GAZAOK for that. We'll have a substantial set 440 00:24:42,880 --> 00:24:45,960 Speaker 2: of economic data at ten o'clock and our economic indicators 441 00:24:46,080 --> 00:24:49,440 Speaker 2: always brought to you by Commonwealth, supporting more than two 442 00:24:49,440 --> 00:24:54,439 Speaker 2: thousand independent financial advisors with the solutions they need to 443 00:24:54,480 --> 00:24:59,239 Speaker 2: grow a thriving business. Commonwealth go where you Grow. Visitcommonwealth 444 00:24:59,320 --> 00:25:04,040 Speaker 2: dot com to learn more. We thank Commonwealth for their 445 00:25:04,080 --> 00:25:08,919 Speaker 2: real commitment to what we're doing here as well joining 446 00:25:09,000 --> 00:25:12,199 Speaker 2: us for a peaceful conversation that the Damien the day is. 447 00:25:12,200 --> 00:25:13,040 Speaker 1: The interview of the day. 448 00:25:13,359 --> 00:25:14,840 Speaker 2: Oh, I don't know about the interview of the day, 449 00:25:14,920 --> 00:25:17,800 Speaker 2: but let's get back to sanity and what the markets 450 00:25:17,800 --> 00:25:21,680 Speaker 2: are doing. Lindsay Roster with US multisector Investing Goldman Sechs 451 00:25:21,760 --> 00:25:27,600 Speaker 2: Asset Management. Which category of multisector is your most vibrant 452 00:25:27,680 --> 00:25:28,720 Speaker 2: study right now? 453 00:25:29,359 --> 00:25:33,720 Speaker 6: The most vibrant study would be structured product. What's interesting 454 00:25:33,760 --> 00:25:36,040 Speaker 6: about it is it isn't a market that you can 455 00:25:36,119 --> 00:25:37,879 Speaker 6: just buy it all. This is a market that you 456 00:25:38,000 --> 00:25:41,399 Speaker 6: absolutely have to be an active manager in billin colos 457 00:25:41,760 --> 00:25:44,120 Speaker 6: and even in commercial mortgage pack security. 458 00:25:43,920 --> 00:25:47,240 Speaker 2: For the mere mortals out there, identify what structured product is. 459 00:25:47,280 --> 00:25:50,320 Speaker 2: It sounds like I'm buying skyscrapers that are bankrupt? What 460 00:25:50,440 --> 00:25:51,280 Speaker 2: structured product? 461 00:25:51,440 --> 00:25:56,000 Speaker 6: Hopefully not skyscrapers that are bankrupt, although there was actually 462 00:25:56,240 --> 00:26:00,399 Speaker 6: a you could say a default in office based in 463 00:26:00,400 --> 00:26:04,879 Speaker 6: New York recently. But really, what structured product is is 464 00:26:05,080 --> 00:26:08,879 Speaker 6: a bucket of assets and there is a structured overlaid 465 00:26:09,400 --> 00:26:12,919 Speaker 6: that allows you to have trunching, so splitting off the 466 00:26:13,000 --> 00:26:16,840 Speaker 6: stuff exactly, and different levels of it have different protection 467 00:26:17,000 --> 00:26:20,320 Speaker 6: levels or what they call fancy jargon credit enhancement. So 468 00:26:20,359 --> 00:26:22,600 Speaker 6: if you're the highest part of the capital structure, you're 469 00:26:22,600 --> 00:26:25,480 Speaker 6: going to have the most credit enhancement that comes typically 470 00:26:25,480 --> 00:26:29,959 Speaker 6: with less threads. Hey I'm a Philly's girl, but I'll 471 00:26:30,040 --> 00:26:31,520 Speaker 6: let you go with the analogy. 472 00:26:31,160 --> 00:26:34,160 Speaker 2: That's kind the white sox the lowest true. How would 473 00:26:34,200 --> 00:26:35,359 Speaker 2: you respond to the argument. 474 00:26:35,400 --> 00:26:37,000 Speaker 1: I mean, we all know about the one point seven 475 00:26:37,040 --> 00:26:39,639 Speaker 1: trillion dollar private credit market, and we know about you know, 476 00:26:39,720 --> 00:26:42,000 Speaker 1: the marketing that goes around that that these are. You know, 477 00:26:42,040 --> 00:26:44,840 Speaker 1: they have tighter covenants, they're safer that you talk to 478 00:26:44,880 --> 00:26:47,399 Speaker 1: us about the recoveries on first been loans, I'm hearing 479 00:26:47,440 --> 00:26:49,520 Speaker 1: that recoveries on a lot of that debt are not 480 00:26:49,600 --> 00:26:51,639 Speaker 1: going to be as high as what you might otherwise 481 00:26:51,640 --> 00:26:52,720 Speaker 1: find in the public markets. 482 00:26:53,480 --> 00:26:56,600 Speaker 6: Yeah, so it it is really going to be collateral specific. 483 00:26:56,680 --> 00:26:58,639 Speaker 6: But it goes back to again where I started with 484 00:26:58,720 --> 00:27:00,920 Speaker 6: active management. You want to make manager who is really 485 00:27:00,920 --> 00:27:03,680 Speaker 6: thinking about what they're investing in, and so you can 486 00:27:03,760 --> 00:27:06,800 Speaker 6: look at broad numbers like what are recovery rates? Are 487 00:27:06,840 --> 00:27:09,760 Speaker 6: they going to be lower? I would say, find your manager. 488 00:27:10,000 --> 00:27:12,000 Speaker 6: Find your manager who's going to do the right job. 489 00:27:12,440 --> 00:27:14,960 Speaker 6: And again, the big thing that's different between public credit 490 00:27:15,040 --> 00:27:18,160 Speaker 6: and private credit is that private credit is less liquid 491 00:27:18,400 --> 00:27:20,160 Speaker 6: and what I mean by that your ability to get 492 00:27:20,160 --> 00:27:22,959 Speaker 6: your money every single day less. So in the public 493 00:27:23,000 --> 00:27:26,120 Speaker 6: markets we have daily liquidity. With that you get a premium. 494 00:27:26,119 --> 00:27:28,960 Speaker 6: By the way, though, in the private market too compensate 495 00:27:29,000 --> 00:27:29,320 Speaker 6: you for. 496 00:27:29,280 --> 00:27:31,439 Speaker 1: That, Lindsay, I want to channel one of your former 497 00:27:31,480 --> 00:27:34,840 Speaker 1: colleagues a chapter the name of Sam Finkelstein now at 498 00:27:34,880 --> 00:27:37,600 Speaker 1: Citadel I believe, a senior PM at Citdeley joined Griffin 499 00:27:37,640 --> 00:27:41,359 Speaker 1: Dunn down in Miami, a former emerging market. 500 00:27:41,240 --> 00:27:42,000 Speaker 2: Fly A manager. 501 00:27:42,080 --> 00:27:44,320 Speaker 1: Talk to us about the role of emerging markets in 502 00:27:44,359 --> 00:27:46,639 Speaker 1: a multi asset diversified portfolio. 503 00:27:47,119 --> 00:27:49,400 Speaker 6: Yes, so you want to be able to look across 504 00:27:49,440 --> 00:27:52,600 Speaker 6: the globe into all asset classes for opportunity. As you're 505 00:27:52,640 --> 00:27:55,680 Speaker 6: both aware, it is a great opportunity set right now. 506 00:27:55,680 --> 00:27:58,600 Speaker 6: From a yield perspective, we've got yields that we haven't seen. 507 00:27:58,680 --> 00:28:02,280 Speaker 6: There's income and fixed income. We've heard that story. But 508 00:28:02,720 --> 00:28:05,439 Speaker 6: you really want to go out there and find the 509 00:28:05,520 --> 00:28:08,720 Speaker 6: right place to get risk adjusted returns because spreads are 510 00:28:08,760 --> 00:28:13,800 Speaker 6: really tight. Emerging markets have been definitely an outperformer year 511 00:28:13,840 --> 00:28:16,159 Speaker 6: to date. What's really driven that is that the double 512 00:28:16,160 --> 00:28:19,159 Speaker 6: B and single B market has been open for financing, 513 00:28:19,160 --> 00:28:22,160 Speaker 6: which is new. But we think about emerging markets as 514 00:28:22,240 --> 00:28:24,840 Speaker 6: a piece of the puzzle, and there is a lot 515 00:28:24,880 --> 00:28:26,919 Speaker 6: of high risk, a lot of election risk. I mean, 516 00:28:26,960 --> 00:28:29,000 Speaker 6: certainly we've got election risk in the US. We don't 517 00:28:29,040 --> 00:28:31,560 Speaker 6: have to get into that, but their election risk in 518 00:28:31,600 --> 00:28:35,720 Speaker 6: emerging markets as well. We are finding more opportunity actually 519 00:28:35,760 --> 00:28:38,400 Speaker 6: in the US right now when our portfolios are tilted 520 00:28:38,560 --> 00:28:40,920 Speaker 6: more to the US in a multisector fruit. 521 00:28:40,960 --> 00:28:42,840 Speaker 1: So, Linda, I'd love to ask you about the US elections, 522 00:28:42,840 --> 00:28:44,240 Speaker 1: but we only have you for a limited amount of 523 00:28:44,280 --> 00:28:46,600 Speaker 1: time and I need to channel Clive Asna's here your 524 00:28:46,640 --> 00:28:48,960 Speaker 1: g sam factor in disease. We talk about Carrie, we 525 00:28:49,040 --> 00:28:52,160 Speaker 1: talk about value quality. What factors do you believe as 526 00:28:52,200 --> 00:28:55,080 Speaker 1: an investor you should be leaning into in the current environment. 527 00:28:55,680 --> 00:29:00,200 Speaker 6: Yeah, it would be idiosyncratic factors. You want to do 528 00:29:00,320 --> 00:29:02,360 Speaker 6: the right work here. If you think shout. 529 00:29:02,240 --> 00:29:05,640 Speaker 2: Out there from what Gold say? Now you know it's 530 00:29:05,880 --> 00:29:10,360 Speaker 2: idiot idiosyncratic carriage. An idiosyncratic factor is the kids are 531 00:29:10,360 --> 00:29:12,760 Speaker 2: out of school and it's killing my bank account. Go 532 00:29:12,920 --> 00:29:13,920 Speaker 2: what do you got tom? 533 00:29:13,920 --> 00:29:16,080 Speaker 6: It means you got to do the homework right. You 534 00:29:16,200 --> 00:29:18,600 Speaker 6: got to figure out is this a company that's going 535 00:29:18,640 --> 00:29:20,760 Speaker 6: to pay you back? And that's really the point with bonds? 536 00:29:20,880 --> 00:29:21,640 Speaker 6: Are you going to get there? 537 00:29:21,720 --> 00:29:24,840 Speaker 2: But I'm kidding, but Damien as a really important question, folks. 538 00:29:24,880 --> 00:29:27,680 Speaker 2: Does the factor shift and adjust and the waiting shift 539 00:29:27,720 --> 00:29:29,720 Speaker 2: I want to go back to one of your observations, 540 00:29:30,120 --> 00:29:32,280 Speaker 2: which was what's called the money Tower, the Michell New 541 00:29:32,360 --> 00:29:35,920 Speaker 2: York tower on Broadway at fifty five and sixty. Now, 542 00:29:36,200 --> 00:29:38,400 Speaker 2: you know, we get the Pinatis Blackstone. They paid a 543 00:29:38,480 --> 00:29:41,280 Speaker 2: thousand of square foot or whatever. Ten years ago it 544 00:29:41,320 --> 00:29:43,600 Speaker 2: was a different mood and we see all these haircuts 545 00:29:43,640 --> 00:29:46,520 Speaker 2: going on. Now, come on, that's got to be an 546 00:29:46,600 --> 00:29:51,920 Speaker 2: opportunity for you or Goldman Sachs advising big foreign money. 547 00:29:52,320 --> 00:29:55,560 Speaker 2: When does the big foreign money show up to buying 548 00:29:55,680 --> 00:30:00,120 Speaker 2: train wrecks like the money Tower. I'm broad seventeen forty Broadway. 549 00:30:00,560 --> 00:30:02,880 Speaker 6: When when they can make money on the investment? 550 00:30:03,080 --> 00:30:03,600 Speaker 2: Is that now? 551 00:30:04,040 --> 00:30:07,560 Speaker 6: Well, it depends based on the forward. When you think 552 00:30:07,600 --> 00:30:10,680 Speaker 6: about who are the tenants, what's the leasing opportunities? Just 553 00:30:10,720 --> 00:30:13,160 Speaker 6: like you think about a normal corporate company, you know, 554 00:30:13,200 --> 00:30:16,840 Speaker 6: what's what's the forward, What's what's their growth opportunity? Is 555 00:30:16,840 --> 00:30:19,520 Speaker 6: this an exciting place to be? What's the quality of 556 00:30:19,680 --> 00:30:22,400 Speaker 6: the space that you're dealing with. If we think that 557 00:30:22,440 --> 00:30:24,640 Speaker 6: it makes sense and we think that the price is right, 558 00:30:25,120 --> 00:30:27,960 Speaker 6: then we can advise and help. But I think the 559 00:30:27,960 --> 00:30:30,160 Speaker 6: big thing right now is that there are a lot 560 00:30:30,240 --> 00:30:33,960 Speaker 6: of assets trading at the wrong price. And so if 561 00:30:33,960 --> 00:30:37,600 Speaker 6: you just passively buy the world right now, you're you're 562 00:30:37,640 --> 00:30:40,080 Speaker 6: going to get burned. You need to have an active 563 00:30:40,120 --> 00:30:41,080 Speaker 6: manager to help you. 564 00:30:41,080 --> 00:30:46,720 Speaker 2: Source within the fancy talk world. Damiens Hour and Lindsey Rossner, 565 00:30:46,840 --> 00:30:50,000 Speaker 2: the answer is you're waiting for price rationalization to occur. 566 00:30:50,200 --> 00:30:53,680 Speaker 6: That's right back to spreads being really tight. We're waiting 567 00:30:53,720 --> 00:30:56,760 Speaker 6: for the right time to get involved. That doesn't mean 568 00:30:56,800 --> 00:30:59,280 Speaker 6: we have no risk on our in our portfolios. 569 00:30:59,440 --> 00:31:01,239 Speaker 2: You got to keep this and you gotta keep there. 570 00:31:02,000 --> 00:31:04,920 Speaker 6: There is some Carrie. I think. What's also really interesting 571 00:31:05,040 --> 00:31:07,400 Speaker 6: are there real val opportunities. And I'm going to give 572 00:31:07,400 --> 00:31:10,640 Speaker 6: you one that's not necessarily in my bond portfolio. But 573 00:31:10,800 --> 00:31:13,280 Speaker 6: right now you can go to France and see Taylor 574 00:31:13,360 --> 00:31:16,600 Speaker 6: Swift for two hundred dollars. The prices start in the 575 00:31:16,720 --> 00:31:20,640 Speaker 6: US two thousand plus global market. Vote with your feet, 576 00:31:20,880 --> 00:31:23,720 Speaker 6: find the opportunity Taylor Swift in Paris. You know what 577 00:31:23,760 --> 00:31:26,040 Speaker 6: my sister did, and I'm not going to blame her 578 00:31:26,080 --> 00:31:28,600 Speaker 6: for not taking me. We have a phenomenal relationship because 579 00:31:28,600 --> 00:31:30,000 Speaker 6: you went with a bunch of friends. They had a 580 00:31:30,040 --> 00:31:30,480 Speaker 6: great time. 581 00:31:30,720 --> 00:31:32,240 Speaker 1: Now we're thinking about going on Argentina. 582 00:31:32,360 --> 00:31:34,240 Speaker 2: So let's go say that we got Mohamedelarian. 583 00:31:34,960 --> 00:31:37,920 Speaker 6: You may have seen Taylor Swift, Mohammed ray. 584 00:31:37,880 --> 00:31:41,080 Speaker 2: If Riley from Saint Louis went and Lindsay's sister went. 585 00:31:41,400 --> 00:31:44,480 Speaker 2: Wasn't an Was everybody in the audience American in Paris? 586 00:31:45,560 --> 00:31:48,760 Speaker 6: There were there were there were many many Americans there. 587 00:31:49,520 --> 00:31:52,360 Speaker 2: Yes, email it on YouTube live chat. Please did you 588 00:31:52,480 --> 00:31:55,320 Speaker 2: go see Taylor in Paris and save us from one 589 00:31:55,320 --> 00:31:55,920 Speaker 2: mark Lindsay. 590 00:31:56,000 --> 00:31:58,800 Speaker 1: You know you mentioned some of these less liquid segments 591 00:31:58,800 --> 00:32:01,240 Speaker 1: of the fixing market is offering value, and you know, 592 00:32:01,280 --> 00:32:02,800 Speaker 1: when I think of those areas of the market, and 593 00:32:02,800 --> 00:32:05,200 Speaker 1: obviously for you guys at g SAM, you know these markets, 594 00:32:05,240 --> 00:32:07,280 Speaker 1: you know who holds the bonds, you know, but I 595 00:32:07,320 --> 00:32:09,520 Speaker 1: get a little bit fearful because for me, this the 596 00:32:09,560 --> 00:32:12,560 Speaker 1: whole private credit. You know, these little clubs, these little syndicates, 597 00:32:12,560 --> 00:32:14,520 Speaker 1: and then you hear what's going on with Vista, and 598 00:32:14,560 --> 00:32:17,280 Speaker 1: they're kind of, you know, fighting with each other because again, 599 00:32:17,400 --> 00:32:19,600 Speaker 1: everybody knows who holds the bonds, and you can kind 600 00:32:19,640 --> 00:32:23,200 Speaker 1: of show preference for one club at the expense of another. 601 00:32:23,280 --> 00:32:25,600 Speaker 1: So talk to us about those dynamics and how that 602 00:32:25,720 --> 00:32:27,600 Speaker 1: changes the playing field for you as an investor. 603 00:32:27,800 --> 00:32:30,440 Speaker 6: Yeah, the dynamics are the same ones that have always 604 00:32:30,440 --> 00:32:34,239 Speaker 6: been a portfolio construction. It's all about sizing and it's 605 00:32:34,280 --> 00:32:38,000 Speaker 6: about understanding your liquidity profile. And while yes, private credit 606 00:32:38,040 --> 00:32:41,160 Speaker 6: has grown, this concept of figuring that out and how 607 00:32:41,200 --> 00:32:42,880 Speaker 6: to get out on the right spot on the efficient 608 00:32:42,960 --> 00:32:44,520 Speaker 6: frontier isn't anything new. 609 00:32:45,000 --> 00:32:48,000 Speaker 2: Thank you for joining thanke you for having to hold 610 00:32:48,040 --> 00:32:52,720 Speaker 2: you conversations. Multisector investing barely describes. It's the nuances of 611 00:32:52,840 --> 00:32:57,440 Speaker 2: piecing together where we are right now, particularly within commercial 612 00:32:58,040 --> 00:33:01,800 Speaker 2: real estate. This is a Bloombergs Surveillance podcast, bringing you 613 00:33:01,880 --> 00:33:06,480 Speaker 2: the best in economics, finance, investment, and international relations. You 614 00:33:06,520 --> 00:33:09,840 Speaker 2: can also watch the show live on YouTube. Visit the 615 00:33:09,880 --> 00:33:14,640 Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday 616 00:33:14,640 --> 00:33:17,680 Speaker 2: mornings from seven to ten am Eastern from our global 617 00:33:17,680 --> 00:33:22,360 Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 618 00:33:22,720 --> 00:33:26,240 Speaker 2: or anywhere else you listen, and always on Bloomberg Radio, 619 00:33:26,440 --> 00:33:29,640 Speaker 2: the Bloomberg Terminal, and the Bloomberg Business App.