WEBVTT - These Are The Most Useless Phrases In Finance: Barry Ritholtz 0:00:01.400 --> 0:00:04.120 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney. Along 0:00:04.160 --> 0:00:06.240 with my co host of Bonnie Quinn. Every business day 0:00:06.240 --> 0:00:10.360 we bring you interviews from CEOs, market pros, and Bloomberg experts, 0:00:10.400 --> 0:00:13.600 along with essential market moving news. Find the Bloomberg Markets 0:00:13.600 --> 0:00:17.000 Podcast on Apple Podcasts or wherever you listen to podcasts, 0:00:17.000 --> 0:00:21.520 and on Bloomberg dot com. All right, Barry Ridholtz joints 0:00:21.520 --> 0:00:23.520 this year. Barry is a founder of Rodholts Wealth managed 0:00:23.520 --> 0:00:26.840 maniage of Bloomberg opinion columnss and host of Masters of Business. 0:00:26.880 --> 0:00:29.400 And he has a fascinating new column out which I 0:00:29.480 --> 0:00:33.080 just read the ten most useless phrases in finance. That's 0:00:33.120 --> 0:00:36.240 the good news. The bad news is I have been 0:00:36.360 --> 0:00:40.480 guilty of uttering all ten of them. Barry Ridholts, Where 0:00:40.479 --> 0:00:42.560 did you come up with this list? Because it hit 0:00:42.600 --> 0:00:46.200 me right between the eyes, so I wrote. I wrote 0:00:46.200 --> 0:00:48.839 a similar column a year ago, and I wanted to 0:00:48.880 --> 0:00:52.400 come up with a different run of terrible phrases. And 0:00:52.760 --> 0:00:56.000 I just keep on running tally of them. But to 0:00:56.040 --> 0:00:58.160 see if I was wildly off base, I went to 0:00:58.200 --> 0:01:00.040 Twitter and said, hey, what do your least face of 0:01:00.280 --> 0:01:05.880 financial phrases? And I was shocked to get a thousand responses, um, 0:01:05.920 --> 0:01:09.039 many of which I had already written down. We were 0:01:09.760 --> 0:01:13.559 suggested by the uh the twitterati, and and it's pretty 0:01:13.560 --> 0:01:16.800 clear that there are a lot of pet peeves amongst 0:01:16.880 --> 0:01:21.679 financial types about phrases that they really really despise. People 0:01:22.040 --> 0:01:27.800 are very enthusiastic about critiquing really dumb language. Yeah, but Barry, 0:01:27.880 --> 0:01:30.640 it's very very important to not get complacent, as they say, 0:01:30.720 --> 0:01:35.080 don't guess you tell me what's that means? So I'm 0:01:35.080 --> 0:01:38.119 an investor, I have a portfolio. What does not get 0:01:38.160 --> 0:01:40.800 complacent means? Should I move to cash? Should I not 0:01:40.920 --> 0:01:44.560 move to cash? The phrase that you always hear is 0:01:44.680 --> 0:01:49.160 actionable advice? What is actionable in that other than hey, 0:01:49.160 --> 0:01:52.640 be on the lookout for something that might be dangerous. 0:01:52.640 --> 0:01:55.840 But shouldn't investors always be on the lookout for things 0:01:55.880 --> 0:01:59.920 that might be dangerous? That that that phrases, Hey, hey, 0:02:00.040 --> 0:02:02.800 you know what, It's great in a in a college 0:02:02.800 --> 0:02:07.800 graduation speech, but as an investment advice, it's kind of meaningless. 0:02:09.080 --> 0:02:12.760 The easy money has been made. Boy, I've heard I've 0:02:13.000 --> 0:02:17.000 uttered that many times. Yeah, that that's classic hindsight by it. 0:02:17.919 --> 0:02:20.679 If only I knew then what I knew now think 0:02:20.720 --> 0:02:24.880 about how easy it is look. Investing is never easy. 0:02:25.080 --> 0:02:28.480 It's always hard. It might look easy after the fact, 0:02:28.919 --> 0:02:30.920 but you know, hey, go back to March O nine. 0:02:30.919 --> 0:02:33.400 If only you bought with both fists, go back to March, 0:02:35.160 --> 0:02:37.760 you should have been a buyer. Well, you say that today, 0:02:37.800 --> 0:02:40.600 but when everybody was panicking in March, you know, it 0:02:40.680 --> 0:02:43.160 was much harder to pull the trigger then than it 0:02:43.320 --> 0:02:47.240 than it is now. With that, we're up sevent higher 0:02:47.280 --> 0:02:50.200 since then. Barry, there's one that I have I'm not 0:02:50.240 --> 0:02:51.880 a problem with. I mean, I'm fine with throwing it 0:02:51.919 --> 0:02:54.080 out and never using it again. But it's already in 0:02:54.120 --> 0:02:59.239 the price. Why is that such a PV phrase for people? 0:02:59.360 --> 0:03:02.520 I mean, you know, if you're talking about, say, I 0:03:02.520 --> 0:03:05.400 don't know election uncertainty or a key man risk or 0:03:05.480 --> 0:03:07.920 whatever it may be, what's wrong with saying, well, we 0:03:07.960 --> 0:03:10.639 think it's already priced in, right, so we get to 0:03:10.760 --> 0:03:15.440 uncertainty later, because that's another peeve. But you know the 0:03:15.880 --> 0:03:20.480 problem with it's in the price is that, as Eugene 0:03:20.480 --> 0:03:24.560 Fama has told us, yes, what is known is in 0:03:24.600 --> 0:03:26.960 the price, and that is reflected by the buys and 0:03:27.040 --> 0:03:31.919 cells of of traders. When you see a big move 0:03:32.120 --> 0:03:34.359 in a stock or a market when the market is 0:03:34.480 --> 0:03:37.800 up three percent or down three or like we saw 0:03:37.840 --> 0:03:41.560 the other day when when Niccolo was down, what was that? 0:03:43.720 --> 0:03:46.200 How do you say it's in the price? It's in 0:03:46.240 --> 0:03:50.880 the price is accurate except when genuinely new information comes out, 0:03:51.480 --> 0:03:54.800 and that big surge or that big sell off is 0:03:54.920 --> 0:03:57.640 how the it gets into the price. So you have 0:03:57.720 --> 0:04:01.600 to be careful. Everything that's known is more or less 0:04:01.600 --> 0:04:04.000 in the price. What's not in the price are the 0:04:04.240 --> 0:04:08.840 is the genuine new information, the genuine surprises. So, Barry, 0:04:08.880 --> 0:04:13.120 if I look at cash in money market funds, in 0:04:13.320 --> 0:04:17.120 uninvested cash and pension funds, isn't it a fair statement 0:04:17.160 --> 0:04:21.040 to say cash is on the sidelines, and that's perhaps 0:04:21.080 --> 0:04:25.200 a bullish call for stocks. So pull you buy it. 0:04:25.360 --> 0:04:28.160 You buy a thousand shares of Apple from from me 0:04:28.279 --> 0:04:31.160 and across you you know whatever, whatever the toll. I 0:04:31.200 --> 0:04:34.800 don't know where Apple is trading today, but you have 0:04:34.960 --> 0:04:36.880 cash and you give it to me, and I have 0:04:37.000 --> 0:04:38.599 the stock and I give it to you. So the 0:04:38.640 --> 0:04:41.760 cash that was on your sideline is now on my sideline. 0:04:42.120 --> 0:04:45.240 There is always and I'm choosing my words carefully here 0:04:45.839 --> 0:04:50.520 trillions with the t trillions of dollars in cash in motion. 0:04:50.640 --> 0:04:53.120 It takes either one or three days T plus one 0:04:53.200 --> 0:04:56.160 or T plus three to a trade settlement. Uh, there's 0:04:56.240 --> 0:04:59.039 money in in s m A s and separately managed 0:04:59.080 --> 0:05:02.719 accounts in prime brokerages. There is cash all over the place. 0:05:02.800 --> 0:05:07.320 There is always cash on the sidelines, and yet academia 0:05:07.400 --> 0:05:11.960 has never convincingly demonstrated that you could show when there's 0:05:12.279 --> 0:05:15.000 x amount of cash on the sidelines, markets do y 0:05:15.040 --> 0:05:18.440 in the future. There's always cash on the sidelines. Every 0:05:18.480 --> 0:05:21.800 trade has a buyer and seller, even with margin, even 0:05:21.800 --> 0:05:25.880 with borrowed money, it's still cash changing hands. So when 0:05:25.960 --> 0:05:28.080 is there not cash on the side? Yeah, that that's 0:05:28.080 --> 0:05:31.360 actually quite a brilliant and incisive points. Barry, what were 0:05:31.400 --> 0:05:35.760 the phrases that stuck out to you that were maybe 0:05:35.760 --> 0:05:37.760 some people don't like them, but you still find a 0:05:37.760 --> 0:05:39.320 lot of wisdom in them, because I know you've done 0:05:39.320 --> 0:05:42.360 a lot of work as well on you know, cognitive 0:05:42.640 --> 0:05:48.360 and behavioral types of investing. So so there's a handful 0:05:48.400 --> 0:05:52.280 of things that I find really fascinating. One is everybody 0:05:52.320 --> 0:05:55.400 wants to be a contrarian, which is kind of amazing 0:05:55.480 --> 0:05:59.880 because by definition contrarians other people outside of the her, 0:06:00.200 --> 0:06:03.960 outside of the crowd. But there's a certain romanticism to 0:06:04.160 --> 0:06:08.040 being that person who who makes makes the big short bet, 0:06:08.120 --> 0:06:11.320 who who, or who buys when everybody else is selling. 0:06:11.360 --> 0:06:14.400 It's much harder to do than it appears. That That 0:06:14.480 --> 0:06:17.560 always cracks me up. And then the simple truth, sort 0:06:17.560 --> 0:06:20.640 of the flip side to that, The simple truth of 0:06:20.760 --> 0:06:26.920 the trend is your friends. You know, crowds are mostly right. 0:06:27.120 --> 0:06:30.760 Markets get it right most of the time. It's only 0:06:30.839 --> 0:06:33.920 yet extremes. You know, go to March two thousand when 0:06:34.480 --> 0:06:37.000 trees grow to the sky and and we're not buying 0:06:37.040 --> 0:06:40.680 discounted cash flow but clicks and eyeballs. Hey, the crowd 0:06:40.760 --> 0:06:43.679 was totally wrong. They're just as the crowd was wrong 0:06:43.839 --> 0:06:47.039 in in March of two thousand and nine with the 0:06:47.080 --> 0:06:51.680 markets down fifty and people forecasting the end of the world. Hey, 0:06:51.760 --> 0:06:54.840 at a certain point, um, the you know, the trend 0:06:55.000 --> 0:06:57.400 is your friend, except for the bend at the end. 0:06:57.160 --> 0:07:03.160 Traders have rhyming, rhyming aphorisms for every circumstance. You need 0:07:03.200 --> 0:07:07.760 to write a picture of book Barry, I think, um, 0:07:07.839 --> 0:07:09.800 I think I should get a five year old to 0:07:09.840 --> 0:07:13.160 do it. They have the insight that very often we 0:07:13.440 --> 0:07:17.240 in a crowd, Miss Barry, you don't miss much. I'll 0:07:17.240 --> 0:07:20.160 get it that. Who's on Masters and Business next this 0:07:20.200 --> 0:07:24.920 week is Pedro rp is the chief marketing officer for 0:07:25.080 --> 0:07:28.160 a b in Bev. They are a giant beer company 0:07:28.240 --> 0:07:34.920 with everybody from bud Wiser, Stella, Michaelobe Corona go down 0:07:34.920 --> 0:07:38.360 a list of beers. They they are typically the largest 0:07:38.560 --> 0:07:42.960 beer um producer and seller in every market. They're looking 0:07:43.000 --> 0:07:45.520 forward to that. It should be an interesting conversation for 0:07:45.720 --> 0:07:50.040 pandemic times. Barry Rittles, thank you, founder of Rittles Wealth Managements, 0:07:50.120 --> 0:07:53.840 Bloomberg opinion columnist and of course host of Masters in Business. 0:07:56.560 --> 0:07:59.240 What's time turned to the market once again and we're 0:07:59.240 --> 0:08:02.360 seeing continue improvement really for the indusease after hitting that 0:08:02.680 --> 0:08:05.160 low right after the open. The nastac is actually of 0:08:05.240 --> 0:08:07.840 eight tenths of a percent now. But for a bigger 0:08:08.080 --> 0:08:10.880 picture look at things, let's bring in Lisa Shallow, Chi's 0:08:10.920 --> 0:08:15.240 chief investment officer for wealth management at Morgan Stanley. Lisa, 0:08:15.400 --> 0:08:17.640 what do you make of these these moves? We're seeing 0:08:17.720 --> 0:08:20.000 quite a bit of volatility even though the vix is 0:08:20.040 --> 0:08:22.760 below thirty. But you know, we hit the bottom today 0:08:22.760 --> 0:08:24.840 and now we're suddenly up more than half a percent 0:08:24.880 --> 0:08:29.640 in the sp Uh. Yeah. So look, I I'm in 0:08:29.720 --> 0:08:33.320 the campus says we are definitely, you know, still in 0:08:33.400 --> 0:08:37.600 correction territory. I think we're getting a bounced today off 0:08:37.600 --> 0:08:41.120 of the phenomenal housing data, uh, you know, which is 0:08:41.320 --> 0:08:44.560 you know, clearly a high point um for the for 0:08:44.600 --> 0:08:47.960 the VHA recovery and and for you know, the overall 0:08:48.000 --> 0:08:51.880 economy and for the jobs market. But if you think about, 0:08:51.920 --> 0:08:54.720 you know, why these markets are in correction, I really 0:08:54.720 --> 0:08:58.480 think we've had uh kind of a triple play here 0:08:58.120 --> 0:09:02.520 where we've had to simultaneous delay of the much anticipated 0:09:02.640 --> 0:09:06.200 US fiscal stimulus, which now looks like it may not 0:09:06.360 --> 0:09:09.840 happen until one and I think from the job snumbers 0:09:09.920 --> 0:09:13.960 we saw this morning that could be problematic. Um, we 0:09:14.040 --> 0:09:17.520 had disappointing FED guidance last week just in terms of 0:09:17.880 --> 0:09:21.560 you know, the Fed not really providing um any additional 0:09:21.600 --> 0:09:25.319 clarity on on their tools or their policy or metrics 0:09:25.360 --> 0:09:28.920 around average inflation targeting. And last, but not least, we 0:09:29.000 --> 0:09:32.880 just have these intensifying odds of a chaotic and contentious 0:09:33.160 --> 0:09:36.520 US presidential election, and you put all that stuff together 0:09:37.080 --> 0:09:39.400 and we're just going to have wider risk premiums in 0:09:39.480 --> 0:09:43.120 the short term. So I'm not surprised that that we 0:09:43.400 --> 0:09:46.440 kind of touched, you know, correction territory in the SP 0:09:46.520 --> 0:09:50.440 five this morning. I think we may revisit this before. 0:09:51.679 --> 0:09:55.000 So at least us over Yeah, so at least if 0:09:55.000 --> 0:09:58.640 in fact, you know, we're not going to get fiscal stimulus. Um. 0:09:58.679 --> 0:10:01.680 You know, the FED has done pretty much the majority 0:10:01.679 --> 0:10:04.559 of what it can do to stimulate the economy. Does 0:10:04.600 --> 0:10:08.600 that suggest from a portfolio perspective that I just kind 0:10:08.600 --> 0:10:12.199 of focus my portfolio and what's worked, the proven tech 0:10:12.320 --> 0:10:15.720 growth winners. I don't try to rotate into some more 0:10:15.760 --> 0:10:19.760 cyclical names. I don't buy into that at all, because 0:10:19.800 --> 0:10:24.000 what what what we're seeing in the marketplace is because 0:10:24.080 --> 0:10:27.720 to your point, uh, FED guidance, UM, you know, didn't 0:10:27.720 --> 0:10:31.679 really add to the debate. We're seeing, uh the treasury 0:10:31.720 --> 0:10:36.520 market not really act as a diversifier anymore. UM. And 0:10:36.640 --> 0:10:39.400 you know, while we've had markets down ten percent, we mean, 0:10:39.480 --> 0:10:42.960 you know, treasuries trading in a super tight range on 0:10:43.080 --> 0:10:45.800 yields of you know, ten to fifteen basis points. Maybe 0:10:46.480 --> 0:10:50.800 we've got move volatility at all time lows UM. And 0:10:50.840 --> 0:10:53.640 so uh, you know, if this is as low as 0:10:53.760 --> 0:10:58.000 rates get, uh, the valuation on my tech trade is 0:10:58.120 --> 0:11:01.600 vulnerable because so munch of my high pe s were 0:11:01.640 --> 0:11:05.560 premised on ever lower and lower and lower rates than 0:11:05.600 --> 0:11:08.840 we're not getting lower rates. We're not getting higher rates, 0:11:08.920 --> 0:11:12.320 but we're not getting lower rates zero How much lower 0:11:12.320 --> 0:11:16.680 can they go exactly? And so so you know, I'm 0:11:16.720 --> 0:11:19.400 not convinced that this idea of just you know, go back, 0:11:19.480 --> 0:11:22.959 hide out and what works, which is certainly today's trade, 0:11:23.960 --> 0:11:27.160 I don't know that that's really got got legs. Our 0:11:27.200 --> 0:11:31.280 advice to two clients in this environment is look in 0:11:31.320 --> 0:11:33.480 the short term over the next two to three months, 0:11:33.520 --> 0:11:38.560 in this this period of uncertainty, gold tips cash uh, 0:11:38.960 --> 0:11:42.760 and then for for truly long term opportunistic buyers who 0:11:42.800 --> 0:11:46.280 like to buy dips, we're looking at a quality cyclicals, 0:11:46.440 --> 0:11:48.960 high yield credit. You know, some of the things that 0:11:49.040 --> 0:11:51.480 have come off a little bit here, but we that 0:11:51.559 --> 0:11:56.000 do our leverage to to a pro cyclical rotation at 0:11:56.040 --> 0:11:58.960 some point. It's pretty interesting because gold is also also 0:11:58.960 --> 0:12:01.080 about a hundred bucks in the a couple of weeks, 0:12:01.120 --> 0:12:03.400 So I guess now would be the time to get 0:12:03.440 --> 0:12:04.760 in if you're going to get in right at eighteen 0:12:04.800 --> 0:12:10.040 fifty announce I I am, and and that's certainly what 0:12:10.040 --> 0:12:14.319 we're recommending to our clients. Yes, what are your clients 0:12:14.400 --> 0:12:17.760 most concerned about macro wise? Is it the election and 0:12:17.920 --> 0:12:22.000 uncertainty that maybe might follow it. Uh, it is. Look, 0:12:22.080 --> 0:12:26.319 so you know, as as you know, portfolio strategists and 0:12:26.480 --> 0:12:32.000 investment officers, we typically uh you know, always take these 0:12:32.040 --> 0:12:35.440 these periods of time around a presidential election to remind, 0:12:36.040 --> 0:12:38.280 you know, our clients are the facts, and to remind 0:12:38.320 --> 0:12:42.760 them that that typically it's not presidential elections that that 0:12:42.960 --> 0:12:46.840 determine things. It's policy. Uh, and policy tends to be 0:12:46.960 --> 0:12:50.320 driven by the composition of Congress and things of that nature. 0:12:50.920 --> 0:12:55.240 I at this time is different. And what's different is 0:12:55.280 --> 0:12:59.680 this idea that somehow we're not going to have clarity 0:13:00.080 --> 0:13:06.480 on those issues, um whatever, and maybe back for a 0:13:06.559 --> 0:13:11.120 punt until December race that and some are saying, you know, 0:13:11.240 --> 0:13:14.199 if this gets contested by a Supreme Court that has 0:13:14.280 --> 0:13:17.760 just recently you know been changed, uh you know, not 0:13:17.880 --> 0:13:21.000 until January. So this is different. And so what we're 0:13:21.040 --> 0:13:24.160 just saying is, look, we don't know what it means. 0:13:24.360 --> 0:13:27.680 I know that this is a level of uncertainty. Uh, 0:13:27.720 --> 0:13:31.320 that does wrought widened risk premiums in a very short term. 0:13:31.480 --> 0:13:34.880 So this is very different than than what we typically say, 0:13:34.960 --> 0:13:37.520 which is, hey, this this doesn't matter, try to look 0:13:37.559 --> 0:13:41.280 through it. Lisa Salad, thank you so much for joining us. 0:13:41.320 --> 0:13:45.079 Lisa is chief investment officer the Wealth management group at 0:13:45.120 --> 0:13:46.920 Morgan Stanley. They have about two and a half a 0:13:47.000 --> 0:13:50.439 trillion dollars in assets on their management and we always 0:13:50.480 --> 0:13:52.040 love chatting with Lisa to get her view of the 0:13:52.080 --> 0:13:54.880 market here and uh, this time is different, Vannie. I 0:13:54.880 --> 0:13:57.439 think as we think about some of this election uncertainty 0:13:57.440 --> 0:13:59.440 that I think a lot of investors are starting to 0:13:59.440 --> 0:14:02.160 really get concerned with. Yeah, I mean we love to 0:14:02.160 --> 0:14:05.360 see the president doesn't help things by making comments on 0:14:05.360 --> 0:14:07.920 on a daily basis, which you have to sift through 0:14:08.000 --> 0:14:10.400 and decide, you know, do I take this headline seriously? 0:14:10.400 --> 0:14:13.000 Do I take this headline seriously? And you know, if 0:14:13.040 --> 0:14:17.280 you have a lot of cash at stake, you really 0:14:17.320 --> 0:14:19.920 want to be parsing that pretty carefully. Yeah, exactly right. 0:14:19.920 --> 0:14:21.640 And I think a lot of folks are saying, let 0:14:21.720 --> 0:14:24.120 me just get a little bit conservative here, gold tips 0:14:24.160 --> 0:14:25.680 things like that as we head into the election, and 0:14:25.760 --> 0:14:31.920 we'll recalibrate afterwards. Income inequality. Wealth inequality is an issue 0:14:31.920 --> 0:14:35.360 that has been growing in stature for Americans are really 0:14:35.920 --> 0:14:39.760 for many years now. Certainly the election became very important. 0:14:39.760 --> 0:14:45.600 Ben Steverman Personal Finance, Edward Bloomberg News joins us here Ben, 0:14:45.880 --> 0:14:50.840 really interesting story here Harvard talking about economic carnage in 0:14:50.840 --> 0:14:53.840 the wealthiest zip codes. What did you find? So this 0:14:53.920 --> 0:14:57.120 is about Ross Chetti, who as he's he's been one 0:14:57.160 --> 0:15:00.600 of the driving forces behind the inequality converse issue comes. 0:15:00.640 --> 0:15:04.280 What he does. He's an economist at Harvard. He has 0:15:04.320 --> 0:15:08.040 a staff of about forty people. UM. Philanthropists have been 0:15:08.040 --> 0:15:12.600 really um supporting him for years and um. He uses 0:15:12.640 --> 0:15:16.920 these giant data sets of tax data and UM census 0:15:17.000 --> 0:15:23.000 data that really track Americans um individually, over over over time. 0:15:23.000 --> 0:15:27.160 And he studied inequality and race and and um uh. 0:15:27.440 --> 0:15:30.760 He basically has diagnosed the American dream as dead because 0:15:30.880 --> 0:15:34.240 Americans now aren't earning as much as their parents do 0:15:34.640 --> 0:15:39.760 did or their great grandparents. UM and UM. So what 0:15:39.840 --> 0:15:42.000 he's did when COVID hit was he kind of just 0:15:42.040 --> 0:15:46.520 stopped everything and he built an economics tracker using private 0:15:46.600 --> 0:15:51.520 data from companies like MasterCard into it that really shows 0:15:51.640 --> 0:15:55.479 day by day, week by week, state by state, neighborhood 0:15:55.480 --> 0:15:58.600 by neighborhood. You can really see how the economy has 0:15:58.640 --> 0:16:01.640 been playing out and and see what's happened with small 0:16:01.640 --> 0:16:06.120 businesses and consumer spending and jobless things and all sorts 0:16:06.120 --> 0:16:10.040 of metrics. Really shows the devastation that's happened since March. 0:16:10.560 --> 0:16:12.240 You can see it by the way at track the 0:16:12.280 --> 0:16:14.680 Recovery dot org and there's a button on their saying 0:16:14.680 --> 0:16:17.520 explore the data, and you can literally go into the 0:16:17.640 --> 0:16:21.880 smallest of neighborhoods and figure out who's been suffering the most. 0:16:21.960 --> 0:16:24.840 And it turns out that his charge shows that by April, 0:16:24.920 --> 0:16:27.720 the bottom quarter of way journers, so those making less 0:16:27.720 --> 0:16:30.840 than twenty seven thou dollars a year, had lost more 0:16:30.880 --> 0:16:33.800 than three times the number lost by the top quarter, 0:16:33.960 --> 0:16:37.080 defined as those who are in more than sixty annually. 0:16:37.400 --> 0:16:41.600 It's it's pretty phenomenal how it shows income inequality. What 0:16:41.720 --> 0:16:44.880 will be done with this, Ben Well, it's a really 0:16:44.880 --> 0:16:46.800 good question. I mean, as you mentioned that data, it 0:16:46.920 --> 0:16:49.560 racially shows the recession is over, or at least it 0:16:49.720 --> 0:16:53.840 ended in July for the top who are and a 0:16:53.840 --> 0:16:56.040 lot of those people are just staying home and they're 0:16:56.080 --> 0:16:59.880 not spending money, and that has sort of been a 0:17:00.360 --> 0:17:02.840 It's clear from his data that that's been the driving 0:17:02.840 --> 0:17:05.680 force of the problem. It's not the it's not the lockdowns, 0:17:05.720 --> 0:17:08.760 it's not the shutdowns ordered by the government governors. It's 0:17:09.160 --> 0:17:12.040 the fact that people who have means are not spending. 0:17:12.040 --> 0:17:14.080 They don't feel it's safe to go out and spend 0:17:14.080 --> 0:17:19.199 their money. And so what can be done. There's a 0:17:19.240 --> 0:17:22.320 lot of small policies we could we could be doing, 0:17:22.359 --> 0:17:24.440 and that's part of Chetty's work is to look at, 0:17:24.640 --> 0:17:26.520 you know, what can we do for the education system 0:17:26.560 --> 0:17:29.520 to help low income people, what can we do for 0:17:30.000 --> 0:17:34.560 um housing. But but I think the thing about this 0:17:34.600 --> 0:17:38.000 recession that's weird is that we're kind of well off 0:17:38.040 --> 0:17:40.520 people are confronted with it because it's the people we 0:17:40.640 --> 0:17:43.480 used to interact with on a day to day basis. 0:17:43.840 --> 0:17:46.760 And I think he's hoping that that changes the conversation 0:17:46.800 --> 0:17:50.640 about this stuff going forward, that we put more effort 0:17:50.680 --> 0:17:56.640 into helping the bottom of the population advanced economically going forward, 0:17:56.960 --> 0:17:59.600 and that could be a range of policies. So Ben 0:17:59.720 --> 0:18:03.040 is the certain, however, that this pandemic and the economic 0:18:03.080 --> 0:18:06.760 impacts could in fact not only widen the gap, but 0:18:06.840 --> 0:18:11.240 make it perhaps even more permanent. Absolutely, I mean, I 0:18:11.320 --> 0:18:14.879 think we've already seen the gap widen up until you know, 0:18:15.320 --> 0:18:19.160 up until July UM that stimulus was really helping low 0:18:19.200 --> 0:18:21.160 income workers and in fact, a lot of them were 0:18:21.240 --> 0:18:24.560 making more than they had made before before they were 0:18:24.560 --> 0:18:27.399 working because of the unemployment benefits were so generous. But 0:18:27.480 --> 0:18:29.960 now that that's expired, and now that we have these 0:18:30.000 --> 0:18:34.760 major changes happening in the economy automation, more online shopping, 0:18:35.240 --> 0:18:39.480 less in person services, um, there's a real concern that 0:18:39.880 --> 0:18:41.600 first of all, this becomes a little bit more of 0:18:41.600 --> 0:18:46.800 a normal recession and the the economic damage really starts 0:18:46.840 --> 0:18:50.800 to spread to new sectors. And secondly that um, these 0:18:51.000 --> 0:18:53.359 a lot of these people could be left behind for 0:18:53.359 --> 0:18:55.920 for a generation. Here we could have a real permanent 0:18:56.000 --> 0:19:00.560 problem with some of these workers basically becoming outmounded. And 0:19:00.600 --> 0:19:02.440 again you can see all of this data at track 0:19:02.600 --> 0:19:06.800 the Recovery dot org. It is Raje Chetty's project at Harvard, 0:19:07.240 --> 0:19:10.720 and of course he's got you know, funding from hedgehund 0:19:10.720 --> 0:19:13.120 managers and so on as well, and it's in their 0:19:13.200 --> 0:19:15.960 interests to figure this stuff out too, because you know, 0:19:16.080 --> 0:19:21.879 there's a lot more concern over the social conditions of 0:19:21.960 --> 0:19:25.440 this country and what might actually happen if it gets worse. Right, 0:19:25.480 --> 0:19:27.919 So there's there's there's also, you know, an element to 0:19:28.520 --> 0:19:31.640 the richest wanting to solve this in some way. I mean, 0:19:31.920 --> 0:19:34.919 what does it say about the large inner cities in 0:19:35.000 --> 0:19:38.520 the biggest cities. I'm talking about San Francisco for example, 0:19:38.720 --> 0:19:43.560 and Manhattan. So this is the thing. So we've been 0:19:43.600 --> 0:19:45.639 able to show he's able to show that there was 0:19:45.680 --> 0:19:48.879 a there was a substantial recovery in in April and 0:19:49.000 --> 0:19:52.360 May as businesses open back up. But if you look 0:19:52.359 --> 0:19:56.840 at those wealthy neighborhoods where wealthy people weren't spending, businesses 0:19:56.880 --> 0:20:01.520 were losing seventy of their revenue. And not only is 0:20:01.560 --> 0:20:04.520 that devastating for those businesses in the short term, a 0:20:04.560 --> 0:20:07.040 lot of those businesses have very high rents as well. 0:20:07.480 --> 0:20:11.120 So that's that's that's why you see all these businesses. 0:20:11.160 --> 0:20:12.600 If you look at the Upper east Side, if you 0:20:12.640 --> 0:20:16.400 look at Midtown Manhattan, if you look at um wealthy 0:20:16.440 --> 0:20:19.760 parts of San Francisco, those are the worst hit neighborhoods 0:20:19.760 --> 0:20:23.240 in terms of the small businesses and the workers in 0:20:23.280 --> 0:20:26.920 those businesses are obviously coming in from other places. Um, 0:20:27.320 --> 0:20:30.679 a lot of them are low income, and um, you 0:20:30.720 --> 0:20:35.040 know now with unemployment expiring, they're really in a desperate situation. Alright. 0:20:35.080 --> 0:20:37.160 I would urge everybody to try and find this story 0:20:37.160 --> 0:20:41.199 by Ben Steuperman. It is called Harvard's Chetty h E. T. 0:20:41.280 --> 0:20:45.800 T Y finds economic carnage and wealthiest zip codes. But 0:20:45.880 --> 0:20:48.240 also do have a look at that data tracker, which 0:20:48.280 --> 0:20:50.959 is that track the recovery dot org. And also just 0:20:51.119 --> 0:20:54.000 generally it's good to know about RAJ Chetty's project there 0:20:54.040 --> 0:21:01.800 at Harvard University. Lots of volatility with futures, equity futures 0:21:01.920 --> 0:21:03.760 very low. This morning we opened up a little bit 0:21:03.800 --> 0:21:05.520 in the green and now we're giving it back here. 0:21:05.600 --> 0:21:07.320 So we had it just a kind of a strange 0:21:07.480 --> 0:21:10.320 morning here with volatility back and forth. Uh, you know, 0:21:10.400 --> 0:21:13.719 not much big movement, but again some plus some minus, 0:21:13.720 --> 0:21:16.320 some greens, some reds. Gotta handle on what's going on 0:21:16.440 --> 0:21:19.400 in the markets. We welcome Sarah Conteck bloom Brick Cross 0:21:19.440 --> 0:21:21.879 Asset Reporters. Sarah, thanks so much for joining us here. 0:21:21.960 --> 0:21:25.280 Kind of a strange day in terms of economic data 0:21:25.359 --> 0:21:28.399 as well. We had the jobs those claims came in 0:21:28.440 --> 0:21:33.960 the weaker than expected, yet housing very very strong. Yet again, 0:21:34.040 --> 0:21:35.720 what do you make of it? Right? This has kind 0:21:35.720 --> 0:21:38.720 of been the story all along for COVID nineteen and 0:21:39.080 --> 0:21:41.320 what it has caused in the economy. You look at 0:21:41.359 --> 0:21:44.560 the labor market and sure, while we have seen immense 0:21:44.600 --> 0:21:50.560 approvement from March, still very very downtrodden, and the pace 0:21:50.680 --> 0:21:53.199 of the pickup from here, it seemed as though the 0:21:53.200 --> 0:21:55.920 improvement in the labor market has topped out a bit. However, 0:21:56.320 --> 0:21:59.800 the housing market has just been booming, and we saw 0:21:59.840 --> 0:22:03.639 that once again this morning with the housing data. And 0:22:03.800 --> 0:22:06.400 as your prior guests Lisa did say, we did see 0:22:06.400 --> 0:22:08.879 the markets turn around the same time that the housing 0:22:08.960 --> 0:22:11.639 data came out, but at the same time we also 0:22:11.640 --> 0:22:14.359 saw it turn right as the SMP five hundred was 0:22:14.440 --> 0:22:16.880 hitting its one day moving average, which is around thirty. 0:22:17.800 --> 0:22:20.640 That's also just about the level that demarkets that ten 0:22:20.720 --> 0:22:24.680 percent correction. So we do see some support levels swooping in, 0:22:25.000 --> 0:22:27.440 but the benchmarks just turning from green to red to 0:22:27.600 --> 0:22:31.240 green to red once again. Uh. Certainly of all tile morning, Yeah, 0:22:31.280 --> 0:22:33.160 I feel like m Life team hardly has a chance 0:22:33.200 --> 0:22:34.680 to get a piece out when they have to sort 0:22:34.680 --> 0:22:36.960 of undo it because the last piece there it was 0:22:37.000 --> 0:22:39.760 about the US stocks finding their footing in the early 0:22:39.800 --> 0:22:43.200 going and recouping the loss. It really is pretty phenomenal. 0:22:43.600 --> 0:22:46.480 I mean, our retail investors driving this market in any 0:22:46.480 --> 0:22:48.879 way anymore. Look the move these moves that we have 0:22:48.960 --> 0:22:52.640 seen are very quick, and there have been uh some 0:22:52.760 --> 0:22:56.920 signs that the retail market is still very, very heavily involved. 0:22:56.920 --> 0:23:00.480 Sundale Capital Research they compiled data for the o c 0:23:00.640 --> 0:23:03.520 C options data and they actually found that last week, 0:23:03.840 --> 0:23:08.160 while we did see market selling off, many short term 0:23:08.320 --> 0:23:14.200 small options traders actually increased their bets on a market increase. 0:23:14.320 --> 0:23:17.800 So they're very much well involved. They're still pretty bullish 0:23:17.880 --> 0:23:20.600 on these markets, which makes some think that maybe the 0:23:20.640 --> 0:23:22.800 froth that was really built up in the month of 0:23:22.880 --> 0:23:27.040 August has not been completely shaved off. And you also 0:23:27.119 --> 0:23:29.760