1 00:00:02,520 --> 00:00:08,480 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. The traders await the 2 00:00:08,560 --> 00:00:12,200 Speaker 1: release of key economic data, albeit highly stale. We begin 3 00:00:12,240 --> 00:00:14,440 Speaker 1: this hour with stocks eyeing a rebound as we head 4 00:00:14,440 --> 00:00:18,360 Speaker 1: into that shortened Thanksgiving trading weekend. The team at Morgan 5 00:00:18,400 --> 00:00:21,720 Speaker 1: Stanley releasing their outlook for twenty twenty six, writing, we 6 00:00:21,840 --> 00:00:24,079 Speaker 1: raise our S and P five hundred price target to 7 00:00:24,160 --> 00:00:27,640 Speaker 1: seventy eight hundred, driven by strong earnings growth. We believe 8 00:00:27,680 --> 00:00:29,479 Speaker 1: that we're in the midst of a new bull market 9 00:00:29,680 --> 00:00:33,360 Speaker 1: and earnings cycle, especially for many of the lagging areas. 10 00:00:33,400 --> 00:00:36,879 Speaker 1: Mike Wilson of Morgan Stanley joins. Now, wonderful to see you, Mike. 11 00:00:37,000 --> 00:00:37,560 Speaker 2: Thanks Lisa. 12 00:00:37,720 --> 00:00:40,440 Speaker 1: So let's start on the optimism. We have been optimistic 13 00:00:40,520 --> 00:00:43,840 Speaker 1: for quite a while, talking about the rotation into the adopters, 14 00:00:44,000 --> 00:00:47,120 Speaker 1: not just the AI tech behemoths. Why are you getting 15 00:00:47,120 --> 00:00:49,280 Speaker 1: even more optimistic as the year goes on. 16 00:00:49,680 --> 00:00:51,599 Speaker 3: Well, I would say it's just a change. It's an 17 00:00:51,600 --> 00:00:55,480 Speaker 3: evolving narrative we've had, which is that we think that 18 00:00:55,520 --> 00:00:58,680 Speaker 3: the policy still misunderstood, right, that they essentially came in 19 00:00:58,720 --> 00:01:01,120 Speaker 3: this year to the growth negative stuff first, and now 20 00:01:01,120 --> 00:01:03,120 Speaker 3: we're looking at the growth positive stuff. I'm not worried 21 00:01:03,120 --> 00:01:05,240 Speaker 3: about the economy. What I am a little bit worried 22 00:01:05,240 --> 00:01:07,800 Speaker 3: about is that the FED is kind of dragging its feet. 23 00:01:07,920 --> 00:01:10,000 Speaker 3: So I would agree with Neil's comment, like the FED 24 00:01:10,080 --> 00:01:12,319 Speaker 3: needs to cut, but not to save the economy, but 25 00:01:12,400 --> 00:01:15,280 Speaker 3: to see the full rotation into these lagging parts of 26 00:01:15,319 --> 00:01:17,399 Speaker 3: the market, the interest rates sensitive parts of the market, 27 00:01:17,400 --> 00:01:19,480 Speaker 3: which is really our story for twenty twenty eight or 28 00:01:19,520 --> 00:01:21,880 Speaker 3: twenty twenty six. We think that seventy eight hundred is 29 00:01:21,920 --> 00:01:23,880 Speaker 3: dependent on the earning cycle broadening out. 30 00:01:24,319 --> 00:01:26,000 Speaker 1: So there's a lot to unpack there. I want to 31 00:01:26,040 --> 00:01:27,920 Speaker 1: start with you agreeing with Neil, because Neil had a 32 00:01:27,920 --> 00:01:31,480 Speaker 1: pretty negative assessment of the overall economy, saying he suspects 33 00:01:31,520 --> 00:01:34,160 Speaker 1: the train's already left the station with respect to the 34 00:01:34,200 --> 00:01:36,200 Speaker 1: pain from the FED keeping rates where they are for 35 00:01:36,200 --> 00:01:38,240 Speaker 1: as long as they have, and that we could be 36 00:01:38,240 --> 00:01:40,920 Speaker 1: looking at a recession. You seem to disagree on that. 37 00:01:41,120 --> 00:01:44,440 Speaker 1: So where's the nuance here. What's the difference between preventing 38 00:01:44,520 --> 00:01:49,720 Speaker 1: recession and really allowing the rotation into some of these 39 00:01:49,760 --> 00:01:50,320 Speaker 1: other names. 40 00:01:50,480 --> 00:01:52,720 Speaker 3: Yeah, I mean, I think our view has been differentiated 41 00:01:52,720 --> 00:01:55,000 Speaker 3: that we think we have had a recession. We went 42 00:01:55,000 --> 00:01:57,840 Speaker 3: through a rolling recession in the private economy. So I 43 00:01:57,840 --> 00:01:59,840 Speaker 3: would agree with Neils that the economy is weak, but 44 00:02:00,840 --> 00:02:03,600 Speaker 3: it's rebalancing now towards the private economy. I mean, many 45 00:02:03,640 --> 00:02:05,880 Speaker 3: parts of the economy have been suffering, housing, all the 46 00:02:05,880 --> 00:02:08,680 Speaker 3: interestrates set, durable goods, you know, consumer goods which have 47 00:02:08,720 --> 00:02:12,880 Speaker 3: been under pressure, commodity sectors, transportation, there's been no volume 48 00:02:13,200 --> 00:02:16,120 Speaker 3: going through the economy, no velocity in the real economy, 49 00:02:16,360 --> 00:02:19,960 Speaker 3: and the way that the administration is changing the policy. 50 00:02:20,160 --> 00:02:22,880 Speaker 3: In addition to the FED now cutting, hopefully next year 51 00:02:23,160 --> 00:02:26,120 Speaker 3: you'll see the private economy now doing much better, the 52 00:02:26,200 --> 00:02:28,440 Speaker 3: government no longer crowding out these areas that have been 53 00:02:28,520 --> 00:02:30,760 Speaker 3: under pressure. But we do need to get that trend 54 00:02:30,760 --> 00:02:32,720 Speaker 3: that if the FED needs to do more, the FED 55 00:02:32,760 --> 00:02:34,840 Speaker 3: needs to cut race and they need to probably provide 56 00:02:34,840 --> 00:02:35,520 Speaker 3: some balance sheet. 57 00:02:35,800 --> 00:02:36,120 Speaker 2: I say. 58 00:02:36,120 --> 00:02:37,760 Speaker 4: One of the things that Neil talked about was his 59 00:02:37,800 --> 00:02:40,360 Speaker 4: fear that even if they cut in December, they're not 60 00:02:40,400 --> 00:02:43,120 Speaker 4: going to lay out a path for continuous cuts, and 61 00:02:43,280 --> 00:02:47,320 Speaker 4: FED Governor Waller seemingly enforcing that speaking on Fox moments ago, 62 00:02:47,400 --> 00:02:49,200 Speaker 4: saying you might see more of a meeting by meeting 63 00:02:49,200 --> 00:02:52,280 Speaker 4: approach once you get to January. If you do get 64 00:02:52,280 --> 00:02:54,920 Speaker 4: that posturing from the FED that maybe they cut in December, 65 00:02:55,600 --> 00:02:58,120 Speaker 4: but it's a meeting by meeting approach. They're not necessarily 66 00:02:58,160 --> 00:03:01,040 Speaker 4: going to cut in every single one. Is that enough 67 00:03:01,080 --> 00:03:02,919 Speaker 4: to allow for that rotation or do you need a 68 00:03:02,960 --> 00:03:04,280 Speaker 4: clear pasi of cuts to get it? 69 00:03:04,400 --> 00:03:05,760 Speaker 3: No, we need the ladder, and I think we're going 70 00:03:05,800 --> 00:03:07,800 Speaker 3: to get there one of two ways. Either the data, 71 00:03:07,919 --> 00:03:10,160 Speaker 3: you know, the labor data is going to basically support 72 00:03:10,240 --> 00:03:12,120 Speaker 3: our view or my view that we had a rate 73 00:03:12,160 --> 00:03:15,160 Speaker 3: of change trough and the labor markets in April, okay, 74 00:03:15,200 --> 00:03:16,840 Speaker 3: and so that data then will allow the FED to 75 00:03:16,840 --> 00:03:19,240 Speaker 3: cut more or signal they're going to cut more. The 76 00:03:19,280 --> 00:03:21,560 Speaker 3: second one is that we get more financial stress. 77 00:03:21,800 --> 00:03:23,920 Speaker 2: Okay, that's what's been going on. We think the market. 78 00:03:24,000 --> 00:03:26,280 Speaker 3: We wrote about this back in September early October, we 79 00:03:26,280 --> 00:03:27,600 Speaker 3: thought the market was going to have a ten to 80 00:03:27,639 --> 00:03:31,400 Speaker 3: fifteen percent correction because the liquidity wasn't there, that the 81 00:03:31,440 --> 00:03:33,760 Speaker 3: balance you was tightening, and we think there's evidence that 82 00:03:33,600 --> 00:03:35,400 Speaker 3: that correction is well advanced. 83 00:03:35,440 --> 00:03:37,200 Speaker 2: Okay. All the momentum stocks. 84 00:03:37,160 --> 00:03:39,240 Speaker 3: You know, Crypto obviously is the topic of the date. 85 00:03:39,280 --> 00:03:41,840 Speaker 3: Down thirty percent for bitcoin. I mean, these things are 86 00:03:41,880 --> 00:03:44,760 Speaker 3: telling you that the market is worried about this liquidity. 87 00:03:44,600 --> 00:03:49,040 Speaker 3: So as usual, the markets will dictate the Fed's timing. 88 00:03:49,080 --> 00:03:51,400 Speaker 3: So if the market really wants and look, markets are 89 00:03:51,440 --> 00:03:54,040 Speaker 3: like children, right, they'll have a little temper tantrum and 90 00:03:53,680 --> 00:03:55,840 Speaker 3: then and then the Feder will respond to that. So 91 00:03:56,000 --> 00:03:58,400 Speaker 3: is this like a miny twenty eighteen in that regard, 92 00:03:58,480 --> 00:03:59,800 Speaker 3: right that you kind of go into end of the 93 00:03:59,880 --> 00:04:02,440 Speaker 3: year and then there's stress in some of these financial 94 00:04:02,480 --> 00:04:04,840 Speaker 3: metrics that the FED cares about, and then they provide 95 00:04:04,920 --> 00:04:07,440 Speaker 3: more balance sheet So we think there's sort of this 96 00:04:07,520 --> 00:04:10,120 Speaker 3: tuggle war going back and forth, but ultimately it results 97 00:04:10,160 --> 00:04:11,480 Speaker 3: in a more dubbish policy path. 98 00:04:11,720 --> 00:04:13,560 Speaker 4: On the point of Crypto, a lot was made, I 99 00:04:13,600 --> 00:04:15,960 Speaker 4: mean even from Bill Ackman basically saying things that he 100 00:04:16,000 --> 00:04:18,279 Speaker 4: thought weren't correlated. All of a sudden word that Fanny 101 00:04:18,320 --> 00:04:20,440 Speaker 4: and Freddy were selling off because the people who were 102 00:04:20,440 --> 00:04:23,400 Speaker 4: buying Crypto were the same people in those names did 103 00:04:23,480 --> 00:04:25,960 Speaker 4: last week in the week before's episode. Given how much 104 00:04:26,000 --> 00:04:29,839 Speaker 4: Crypto falls, show some vulnerability within the market structure, within 105 00:04:29,920 --> 00:04:32,520 Speaker 4: who owns these stocks, and how fragile and weak some 106 00:04:32,560 --> 00:04:33,320 Speaker 4: of those hands are. 107 00:04:33,480 --> 00:04:35,200 Speaker 2: I don't think it's showing anything new. I think this 108 00:04:35,240 --> 00:04:36,640 Speaker 2: has been their whole time, right, I mean. 109 00:04:36,480 --> 00:04:38,320 Speaker 3: I don't people waking up to the idea that liquidity 110 00:04:38,360 --> 00:04:40,479 Speaker 3: is important for the market. I mean, obviously I don't 111 00:04:40,480 --> 00:04:42,320 Speaker 3: know what they're doing. I mean that's kind of crazy. 112 00:04:42,480 --> 00:04:45,560 Speaker 3: Of course, liquidity matters. I mean liquidity is, and especially 113 00:04:45,560 --> 00:04:47,720 Speaker 3: the last ten years or so, I think that the 114 00:04:47,760 --> 00:04:49,720 Speaker 3: hard part about liquidity is it's sort of this sort 115 00:04:49,760 --> 00:04:50,640 Speaker 3: of nebulous thing. 116 00:04:50,960 --> 00:04:51,800 Speaker 2: It's hard to measure. 117 00:04:52,279 --> 00:04:54,120 Speaker 3: And I've spent a lot, like the last two or 118 00:04:54,120 --> 00:04:56,919 Speaker 3: three years trying to develop a better skill set around that, 119 00:04:57,000 --> 00:04:58,840 Speaker 3: and I think we've got a better handle, but I 120 00:04:59,240 --> 00:05:01,600 Speaker 3: would I would say still is one of these things 121 00:05:01,640 --> 00:05:03,800 Speaker 3: that's sort of the invisible hand. And so what you 122 00:05:03,839 --> 00:05:05,040 Speaker 3: have to do is you have to look at the 123 00:05:05,080 --> 00:05:08,039 Speaker 3: market to tell you when liquidity is tight or not. 124 00:05:08,400 --> 00:05:10,840 Speaker 1: So you kept mentioning the balance sheet. Are you saying 125 00:05:10,880 --> 00:05:11,960 Speaker 1: que's going to start again. 126 00:05:12,360 --> 00:05:14,000 Speaker 3: Well, they may not call it Q, but yeah, the 127 00:05:14,000 --> 00:05:17,400 Speaker 3: balance sheet needs to expand, not only to support financial markets, 128 00:05:17,440 --> 00:05:19,280 Speaker 3: but to support the better growth. 129 00:05:19,000 --> 00:05:20,320 Speaker 2: That I think is coming next year. 130 00:05:20,400 --> 00:05:22,440 Speaker 3: Right, So if CAPEX really picks up for the first 131 00:05:22,440 --> 00:05:25,320 Speaker 3: time in ten years, OK, let's be honest, we haven't 132 00:05:25,320 --> 00:05:27,880 Speaker 3: seen much capital spending, but the big beautiful bill is 133 00:05:27,880 --> 00:05:30,920 Speaker 3: in scenting that that's a usage of capital that. 134 00:05:30,960 --> 00:05:32,520 Speaker 2: Needs to be supplied by somebody. 135 00:05:32,560 --> 00:05:34,640 Speaker 3: So the balance sheet needs to grow just to help 136 00:05:35,080 --> 00:05:37,760 Speaker 3: the economy and the markets, and so we can call 137 00:05:37,800 --> 00:05:40,400 Speaker 3: it QE, call it not QE, but generally they need 138 00:05:40,480 --> 00:05:41,120 Speaker 3: to expand that. 139 00:05:41,240 --> 00:05:43,880 Speaker 1: How much is a seventy eight hundred target predicated on 140 00:05:43,920 --> 00:05:46,120 Speaker 1: the idea of the FED cutting rates and using its 141 00:05:46,120 --> 00:05:47,840 Speaker 1: balance sheet to help support liquidity. 142 00:05:47,880 --> 00:05:48,560 Speaker 2: It's very important. 143 00:05:48,640 --> 00:05:50,640 Speaker 3: I mean, I would say if we don't get at 144 00:05:50,720 --> 00:05:53,559 Speaker 3: least one of those items surprising the market, it's meaning 145 00:05:53,800 --> 00:05:56,120 Speaker 3: more than three cuts, or we get more balance sheet 146 00:05:56,120 --> 00:05:58,480 Speaker 3: expansion and call a QE, call it something else, okay, yo, 147 00:05:58,520 --> 00:05:59,920 Speaker 3: curve control, whatever you want to call it. 148 00:06:00,120 --> 00:06:00,280 Speaker 2: Okay. 149 00:06:00,320 --> 00:06:02,560 Speaker 3: If we don't get some combination of that, then we're 150 00:06:02,560 --> 00:06:03,440 Speaker 3: not going to reach our target. 151 00:06:03,520 --> 00:06:05,400 Speaker 2: So I'm assuming that we get. 152 00:06:05,200 --> 00:06:08,560 Speaker 3: There either through the labor data or through some financial stress. 153 00:06:08,680 --> 00:06:10,479 Speaker 1: So it has been so far that the AI trade 154 00:06:10,520 --> 00:06:14,000 Speaker 1: has maintained any kind of equity valuation, despite the fact 155 00:06:14,040 --> 00:06:16,240 Speaker 1: that people are getting increasingly worried about an economy that 156 00:06:16,279 --> 00:06:18,880 Speaker 1: you think already has gone through recession. I just wonder 157 00:06:19,160 --> 00:06:21,120 Speaker 1: do you think that ship sailed in terms of AI 158 00:06:21,240 --> 00:06:23,320 Speaker 1: leadership propic things up. Do you think that if we 159 00:06:23,400 --> 00:06:27,359 Speaker 1: don't get the real economy reaccelerating, you cannot get the 160 00:06:27,440 --> 00:06:30,000 Speaker 1: multiples that we currently have been seeing on the big 161 00:06:30,040 --> 00:06:30,559 Speaker 1: tech names. 162 00:06:30,640 --> 00:06:30,839 Speaker 2: Yeah. 163 00:06:30,839 --> 00:06:32,679 Speaker 3: I think it's one of the same. I mean, obviously, 164 00:06:32,680 --> 00:06:34,960 Speaker 3: the investment in AI is on the premise that it 165 00:06:34,960 --> 00:06:38,080 Speaker 3: will lead to higher productivity, adoption and all that works. 166 00:06:38,120 --> 00:06:40,960 Speaker 3: I mean, that's the way technology investment works. So you're 167 00:06:41,000 --> 00:06:42,080 Speaker 3: not going to these stocks. 168 00:06:41,880 --> 00:06:43,560 Speaker 2: Are not going to work. Leaders aren't going to work 169 00:06:43,640 --> 00:06:43,960 Speaker 2: if the. 170 00:06:43,920 --> 00:06:47,520 Speaker 3: Foundation itself isn't being supported by the technology investment. We 171 00:06:47,560 --> 00:06:49,800 Speaker 3: assume that is going to happen in twenty twenty six. 172 00:06:49,880 --> 00:06:52,240 Speaker 3: That is part of our thesis. Okay, but it's not 173 00:06:52,279 --> 00:06:55,280 Speaker 3: without risk. So our job is to lay out our narrative, 174 00:06:55,320 --> 00:06:57,880 Speaker 3: which we have conviction in, but then to highlight these 175 00:06:57,960 --> 00:06:59,640 Speaker 3: risks in the short term or in the medium term. 176 00:06:59,680 --> 00:07:01,840 Speaker 3: That could though that that could throw that narrative off. 177 00:07:02,320 --> 00:07:02,600 Speaker 2: Edi R. 178 00:07:02,640 --> 00:07:05,000 Speaker 4: Denny also joined us earlier, just saying that some of 179 00:07:05,040 --> 00:07:07,480 Speaker 4: the air is being taken out of the AI bubble, 180 00:07:07,520 --> 00:07:09,800 Speaker 4: and to him that meant that the mel tip that 181 00:07:09,840 --> 00:07:11,720 Speaker 4: we've been seeing is going to be harder to come by. 182 00:07:12,320 --> 00:07:14,960 Speaker 4: Has something changed at least with that blind willingness to 183 00:07:15,000 --> 00:07:18,200 Speaker 4: continue to buy AI related stocks regardless of how much 184 00:07:18,200 --> 00:07:20,200 Speaker 4: they're spending and what the return on that spend is. 185 00:07:20,320 --> 00:07:22,040 Speaker 3: Well, I mean, this is a natural evolution of any 186 00:07:22,040 --> 00:07:24,440 Speaker 3: capital spending cycle. There's always going to be a challenge 187 00:07:24,480 --> 00:07:26,400 Speaker 3: on the return you're going to get. And this is 188 00:07:26,640 --> 00:07:28,480 Speaker 3: you know, we've seen this multiple times. We saw it 189 00:07:28,560 --> 00:07:31,040 Speaker 3: a year ago. We've talked about this, you know multiple times. 190 00:07:31,040 --> 00:07:33,800 Speaker 3: In July of twenty twenty four, that was the peak 191 00:07:34,120 --> 00:07:37,040 Speaker 3: and sort that an AI campbacks deceleration. So this is 192 00:07:37,080 --> 00:07:39,160 Speaker 3: an EBB and flow. What I like to look at 193 00:07:39,280 --> 00:07:42,000 Speaker 3: is AI spenders. How are those stocks reacting? Is the 194 00:07:42,040 --> 00:07:46,440 Speaker 3: market enforcing discipline on the AI spenders, which then trickles 195 00:07:46,480 --> 00:07:48,760 Speaker 3: down into the campacks beneficiaries. 196 00:07:49,080 --> 00:07:50,160 Speaker 2: But we think this is going to happen. 197 00:07:50,280 --> 00:07:52,440 Speaker 3: The money's been raised now, so we don't think the 198 00:07:52,480 --> 00:07:54,960 Speaker 3: debt markets are now involved, and so that money is 199 00:07:55,000 --> 00:07:56,320 Speaker 3: not going to sit on these balancees. 200 00:07:56,360 --> 00:07:57,240 Speaker 2: It's going to be spent. 201 00:07:57,640 --> 00:08:00,560 Speaker 3: The question is what's the payoff look like and what's 202 00:08:00,600 --> 00:08:02,520 Speaker 3: the timing of that payoff. We think we'll see some 203 00:08:02,560 --> 00:08:04,600 Speaker 3: of that in twenty twenty six, twenty twenty seven, and 204 00:08:04,920 --> 00:08:07,280 Speaker 3: so now it's just this transition. You're kind of trading 205 00:08:07,320 --> 00:08:08,640 Speaker 3: back and forth. So I want to make it clear 206 00:08:08,880 --> 00:08:11,280 Speaker 3: we think there's a broadening out. That doesn't mean that 207 00:08:11,360 --> 00:08:14,080 Speaker 3: all the AI stuff gets killed and everything else does 208 00:08:14,120 --> 00:08:16,440 Speaker 3: really really well. It can work in harmony. In fact, 209 00:08:16,480 --> 00:08:18,520 Speaker 3: it needs to work in harmony to some degree. 210 00:08:18,720 --> 00:08:20,840 Speaker 4: If you do get a scenario though we're let's say, 211 00:08:20,920 --> 00:08:23,120 Speaker 4: I don't know, meta that seems to be one of 212 00:08:23,160 --> 00:08:25,720 Speaker 4: the post your children for not getting that return doesn't 213 00:08:25,720 --> 00:08:27,360 Speaker 4: get it as much, and they need to pull back 214 00:08:27,360 --> 00:08:29,560 Speaker 4: on their spending, but everybody else is still spending. Do 215 00:08:29,600 --> 00:08:32,880 Speaker 4: you only need one pillar to fall to really hurt 216 00:08:32,880 --> 00:08:35,600 Speaker 4: this trade or can just any sort of spending happening 217 00:08:35,640 --> 00:08:38,079 Speaker 4: within this trade, regardless of who the winner is, continue 218 00:08:38,120 --> 00:08:39,240 Speaker 4: to lift all the boat. 219 00:08:39,400 --> 00:08:40,880 Speaker 3: Well, look, I mean, look what's been going on, right, 220 00:08:40,880 --> 00:08:44,480 Speaker 3: So we've seen a massive bifurcation or dispersion and the 221 00:08:44,520 --> 00:08:47,160 Speaker 3: performance of not only the hyperscalers but names within that. 222 00:08:47,360 --> 00:08:50,280 Speaker 3: To me, that's healthy. That's like not everybody's gonna win, 223 00:08:51,120 --> 00:08:53,560 Speaker 3: Like there's no trophies here. I mean, you have to 224 00:08:53,600 --> 00:08:55,960 Speaker 3: actually win the game. But all of these companies are 225 00:08:55,960 --> 00:08:59,080 Speaker 3: competing for the trophy so in that competition, I think 226 00:08:59,120 --> 00:09:01,760 Speaker 3: we continue to see this velocity of spend and then 227 00:09:01,760 --> 00:09:03,920 Speaker 3: we're going to see the most exciting part about this 228 00:09:04,040 --> 00:09:07,440 Speaker 3: AI spend to me is we don't even know yet. Okay, 229 00:09:07,440 --> 00:09:09,640 Speaker 3: these new businesses that are going to be created, these 230 00:09:09,679 --> 00:09:11,760 Speaker 3: new industries that are going to be created, the efficiencies 231 00:09:11,800 --> 00:09:14,319 Speaker 3: we're going to get in areas like healthcare or education 232 00:09:14,559 --> 00:09:17,960 Speaker 3: or manufacturing, that's on the come. That's really real wealth 233 00:09:18,000 --> 00:09:19,440 Speaker 3: creation is going to be coming from. 234 00:09:19,520 --> 00:09:21,800 Speaker 1: So next year or maybe the end of this year, 235 00:09:21,800 --> 00:09:23,440 Speaker 1: when we find out who the next FED chair is 236 00:09:23,480 --> 00:09:26,040 Speaker 1: going to be, how much will that matter to you 237 00:09:26,200 --> 00:09:28,720 Speaker 1: in terms of whether your goal case will get realized? 238 00:09:28,720 --> 00:09:31,360 Speaker 1: I mean, who will necessarily be good for that and 239 00:09:31,400 --> 00:09:33,520 Speaker 1: who might be a little more problematic for that. 240 00:09:33,840 --> 00:09:35,839 Speaker 3: You're probably not gonna like my answer, but it doesn't 241 00:09:35,840 --> 00:09:38,400 Speaker 3: matter to me because ultimately, the market's going to tell 242 00:09:38,440 --> 00:09:40,480 Speaker 3: the FED what to do. I mean, that's my general 243 00:09:40,559 --> 00:09:42,640 Speaker 3: that's always been my view. People hate it, but like 244 00:09:42,840 --> 00:09:45,520 Speaker 3: I'm a markets person, Okay, the market's dominant. The markets 245 00:09:45,520 --> 00:09:48,000 Speaker 3: tell investors what to do, right, so the markets will 246 00:09:48,360 --> 00:09:52,040 Speaker 3: you kind of force their hand. If the market's believe 247 00:09:52,040 --> 00:09:53,800 Speaker 3: they need more liquidity, they will force the fast hand. 248 00:09:53,840 --> 00:09:55,760 Speaker 3: If the market believes it needs more Ray cuts, it 249 00:09:55,760 --> 00:09:58,720 Speaker 3: will force the hand because we become so financialized at 250 00:09:58,720 --> 00:10:02,200 Speaker 3: this point, right, the FED now is basically obligated to 251 00:10:02,400 --> 00:10:04,680 Speaker 3: make sure that we have financial stability to some degree, 252 00:10:04,679 --> 00:10:06,959 Speaker 3: and they're also they have an obligation to help Treasury 253 00:10:07,000 --> 00:10:09,920 Speaker 3: fund the government. So I don't believe the FED is independent. 254 00:10:09,960 --> 00:10:12,840 Speaker 3: I believe they're trying to work in the best interests 255 00:10:12,840 --> 00:10:15,520 Speaker 3: of Americans. Okay, I'm not saying they're dictated by the 256 00:10:15,520 --> 00:10:17,680 Speaker 3: White House, but they are not independent of the markets. 257 00:10:17,720 --> 00:10:21,120 Speaker 3: They're not independent of the funding requirements of the US government. Okay, 258 00:10:21,160 --> 00:10:23,560 Speaker 3: So the Treasury and the FED will work together to 259 00:10:23,880 --> 00:10:25,559 Speaker 3: do the best they can to solve those issues. 260 00:10:25,720 --> 00:10:29,320 Speaker 1: Michaelson, wonderful to speak with you, Michaelson of Morgan Stanley. 261 00:10:29,320 --> 00:10:30,320 Speaker 2: Have a wonderful Thanksgiving. 262 00:10:30,440 --> 00:10:31,320 Speaker 1: Thank you for being here.