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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene Jay Lee.

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Speaker 1: We bring you insight from the best in economics, finance, investment,

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Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,

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Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Helping

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Speaker 1: us push things forward here in New York. Jim Carreen

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Speaker 1: Morgan Stanley Investment Management, Fixed Income portfolio Manager. Good morning

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Speaker 1: to Chym. Another morning, and it means another day of

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Speaker 1: talking about very very low bond yields in Italy, the

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Speaker 1: two year yield back in a sub zero club and

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Speaker 1: everyone trying to work out what that means for a

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Speaker 1: ten year trade. How is a negative two year Italy

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Speaker 1: possible or wise one? We'll look at the ten year

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Speaker 1: in Italy right now in and around two and work

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Speaker 1: this one out, Tom. Corporate paper in Europe right now

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Speaker 1: out the Bloomberg Barclays aggregate corporate paper. Fifty basis points

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Speaker 1: is the yield, So Italy has around what one hundred

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Speaker 1: one hundred of fifty basis points over Jim corporate credit.

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Speaker 1: That is insane, isn't it? Yeah? I I think so,

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Speaker 1: I mean like I mean, Italy is in a very

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Speaker 1: special situation when you compare it to Spain's being yields

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Speaker 1: thirty basis points um in in yield, so you know

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Speaker 1: Italy still has some risk premium in it, believe it

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Speaker 1: or not, even at those lower levels of yield. So

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Speaker 1: to Tom's point, looking at the front end of the

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Speaker 1: yield curve, we have negative yields again in Italy, deeply

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Speaker 1: negative in Germany. That's been there for the last few years. Jim.

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Speaker 1: The fact of the matter is that the depot rate

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Speaker 1: in Europe is negative forty basis points, and that's just

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Speaker 1: keeping a lid on any potential upside at the front

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Speaker 1: end of the year these yield curves. Is that going

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Speaker 1: to change anytime soon? No, I don't think it changes

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Speaker 1: anytime soon. In fact, it might even get a little

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Speaker 1: bit worse because we have to think about when we

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Speaker 1: look at Italy at zero basis points, you also have

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Speaker 1: to think of where you finance as in other words,

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Speaker 1: if I buy Italy at zero, but I've financed it

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Speaker 1: at minus seventy base as points or minus eighty basis points,

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Speaker 1: that I'm making eight basis points. Jim. None of this

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Speaker 1: is in fabos. You've been brilliant with us this morning.

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Speaker 1: Can you explain coming out of this the reaction functions

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Speaker 1: out of it. Can you presume financial stability? No? I

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Speaker 1: don't once we come out of this, no, thank Yeah. Yeah.

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Speaker 1: I think that there is a very you know, strong

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Speaker 1: challenge here and what we have to all recognize is

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Speaker 1: that we are in a global liquidity trap, meaning that

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Speaker 1: you can lower these rates another fifty basis points, another

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Speaker 1: hundred basis points and you're not going to get economic

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Speaker 1: economic activity. It used to be the case that when

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Speaker 1: you lowered rates, you increase the demand to borrow because

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Speaker 1: you could borrow at cheap levels and then you could

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Speaker 1: go and reinvest. The problem that we're having today isn't

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Speaker 1: that banks won't lend, is that borrowers won't borrow, and

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Speaker 1: we call that a balance sheet recession. And essentially what

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Speaker 1: we're seeing is these is the potential growth rate is

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Speaker 1: low enough that you're not seeing the return on investment

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Speaker 1: that's required. So what people are doing is they're holding

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Speaker 1: high levels of cash, and as a whole high levels

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Speaker 1: of cash, yields continue to come down. Policy rates in

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Speaker 1: Europe right now are minus forty basis points. They're probably

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Speaker 1: going to lower those even further. But they're also the

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Speaker 1: financing of these bonds is even lower than that. So

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Speaker 1: you can borrow money at minus a hundred and buy

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Speaker 1: buns at you know, minus seventy and and you know,

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Speaker 1: you walk away with a thirty basis point yield spread.

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Speaker 1: It's not a lot, but it's something, and we're talking

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Speaker 1: about negative numbers. So that's I think that's the way

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Speaker 1: it goes. Well. The demand for income right now, Jim

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Speaker 1: is absolutely massive. Bank came out in the last couple

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Speaker 1: of days, I think the last fours actually with a

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Speaker 1: new contingent convertible bomb, the e T Want I was

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Speaker 1: subscribed to a yield a juicy yield to seven percent.

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Speaker 1: And I say juicy because relative to what you're getting

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Speaker 1: gowns way, you can see why there's so much demand

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Speaker 1: for that kind of paper. Yeah, So so look, I mean,

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Speaker 1: seven percent sounds really good, but I think you've got

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Speaker 1: to look at the risks that are associated with that.

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Speaker 1: And I think the you know, you know, to Tom's

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Speaker 1: point about financial stability, when you get yields this low,

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Speaker 1: you end up taking more and more risk and lower

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Speaker 1: quality risk for just just to get any type of

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Speaker 1: yield this typically doesn't end very well, and this is

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Speaker 1: one of the risks that many central banks have to

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Speaker 1: think about. If if lowering rates doesn't really spur the

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Speaker 1: economic activity, then why would they create a situation where

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Speaker 1: they end up creating more risk taking in lower quality assets. So, Jim,

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Speaker 1: let's sort of explore this word risk a little bit further.

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Speaker 1: Typically in fixed income we talk about credit risk, perhaps

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Speaker 1: duration risk. Something that's getting more and more attention is

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Speaker 1: liquidity risk. Should we be warring a little bit more

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Speaker 1: about the lack of liquidity in the areas that some

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Speaker 1: investors have been pushed into because of the lack of yield,

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Speaker 1: lack of income in the risk free asset and in

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Speaker 1: the risk asset like high yield for instance. Right, So,

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Speaker 1: so the liquidity that you're talking about is that if

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Speaker 1: you buy some of these higher yielding assets that are

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Speaker 1: lower in quality, when it comes time to sell, it's

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Speaker 1: going to be hard to do that. And that's the

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Speaker 1: liquidity that you're explaining. And I think that is an

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Speaker 1: increased risk because what investors aren't realizing is that they

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Speaker 1: are getting that yield because they're shorting what we call

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Speaker 1: the liquidity risk premium. They just don't have the liquidity

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Speaker 1: on the asset to get out when they need to,

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Speaker 1: and I think that does create some in times of stress,

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Speaker 1: I could create bigger problems. A video Bank of International

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Speaker 1: Settlements with a wonderful Augustin Carstons of Mexico, the leader

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Speaker 1: of the Central Bank of the central bankers. They put

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Speaker 1: out a blistering report a couple of days ago through

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Speaker 1: a threatening and warning of the instabilities John just talked about.

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Speaker 1: As we shift to the marginal beeps. Critical question is

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Speaker 1: Morgan Stanley's seeing tick by tick people reaching up for

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Speaker 1: itty biddy amounts of yield because they can't get it

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Speaker 1: anywhere else. It sounds like late two thousand six. Yes,

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Speaker 1: So look, I mean, you know where I sit. I'm

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Speaker 1: a portfolio manager on the asset management side, and I

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Speaker 1: can tell you that what we're doing within our funds

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Speaker 1: is we are not taking excessive risk for small amounts

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Speaker 1: of yield. Um. You know, what is going on broadly

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Speaker 1: throughout Morgan Stanley with its client base is a question

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Speaker 1: I think for some of the market strategies. But but

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Speaker 1: from an investor's perspective, from my perspective, as I confess,

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Speaker 1: I am not going to go out and just to

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Speaker 1: take up a little itty itty bit of yield to

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Speaker 1: take on lower liquidity risk because it's just not worth

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Speaker 1: it in the end. What and I'm going to combine

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Speaker 1: us with Jim Karen fixed income guy, with David focus

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Speaker 1: Lando of Deutsche Bank in economics. We're at these negative yields, John,

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Speaker 1: we just had a record a German tenure negative point

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Speaker 1: three six two. Right now, when we come out of

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Speaker 1: these negative yields, what happens when we cross zero into

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Speaker 1: a positive yield? Am I? Right? We really don't know. Yeah,

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Speaker 1: we we really don't because essentially a lot of things

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Speaker 1: have been forced into these assets at these low levels

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Speaker 1: of yields that there's going to be an income loss. Now,

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Speaker 1: what you have to understand is that within fixed income,

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Speaker 1: I always like to say rule number one in fixed

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Speaker 1: income as an investor is don't lose money in fixed income.

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Speaker 1: The potential to lose money in fixed income is very,

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Speaker 1: very high. The more you push these yields down and

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Speaker 1: the less cushion that you have typically from a coupon

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Speaker 1: that you would really get on a bond, the more

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Speaker 1: risky it is that when yields do rise, that you

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Speaker 1: actually get a lost But let me just kind on

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Speaker 1: this one point. The bigger issue that we're having right

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Speaker 1: now is because yields are so low, they actually become

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Speaker 1: highly correlated with equity. So if you're trying to run

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Speaker 1: a diversified portfolio typically six stock bonds, and one's supposed

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Speaker 1: to other goes down, what ends up happening is that

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Speaker 1: they both move in the same direction. So the risk

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Speaker 1: that you're talking about is higher than you think because

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Speaker 1: it's becoming very, very difficult to create a diversified portfolio

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Speaker 1: when fixed income is correlating. I'm gonna burst into tears.

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Speaker 1: Are in the edge of co variance. Let's talk about

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Speaker 1: let's cant I flunked the exactly. The equation is so

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Speaker 1: damn long. I flunked the exam like three times. Jim Carrell,

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Speaker 1: we were done. Thank you so much, greatly, greatly appreciate that. Becauld.

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Speaker 1: You want to bring in Jeffrey right as we drove

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Speaker 1: for I would love to Jeffrey. I'm sure it's bracing

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Speaker 1: himself for the first question on this show. What have

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Speaker 1: I tuned into? Jeffrey right, you raise your group antalyists.

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Speaker 1: Good moneing to Jeffrey. Heyre are you guys, very very

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Speaker 1: well and slightly confused on my side, the US then

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Speaker 1: adding more European Union products to a list of goods

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Speaker 1: that it could hit with retalnatory tariffs. We've got this

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Speaker 1: long running transatlantic subsidy dispute between Boeing and Airbus. Jeffrey,

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Speaker 1: can you just help us understand a little bit better

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Speaker 1: as to what exactly is going on between the Europeans

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Speaker 1: and the United States right now on this issue? Well,

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Speaker 1: I think the broader context as they've been circling each

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Speaker 1: other for months, almost a year now on the possibility

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Speaker 1: of auto tariffs um, and underlying that, of course, it

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Speaker 1: is the very strained relationship between Trump and Merkel as

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Speaker 1: well as a number of other European leaders. So you know,

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Speaker 1: I think it all flows from the political strains and

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Speaker 1: and of course a lot of these long running trade

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Speaker 1: disputes as well. Jeffrey, the trade dispute is there, Osaka

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Speaker 1: seems ancient right now? How do we jump start trade talks?

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Speaker 1: In every article, every political persuasion, there's this sort of

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Speaker 1: mystery of the when of it? Do you have a

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Speaker 1: handle on the win of our many trade talks? No?

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Speaker 1: My understanding talking to people here in DC is that

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Speaker 1: the the um details coming out of OSACA have been

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Speaker 1: very thin for people in the in the bureaucracy at

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Speaker 1: USTRHO who would be making these negotiations. So I think

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Speaker 1: not a lot beyond what Trump hat she announced. You know,

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Speaker 1: soccer has been decided, including you know, when they'll meet,

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Speaker 1: what what point they'll be starting the negotiations from all

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Speaker 1: of these vital questions I think are still unresolved. Jeffrey,

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Speaker 1: no timeline either. We used to deadlines, no deadlines this

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Speaker 1: time around. Is this a new approach? Yeah? I think, uh,

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Speaker 1: it's probably. My guess is that it's an attempt to

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Speaker 1: um not provide the markets with uh you know that

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Speaker 1: when there's a deadline, the markets then provide this sort

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Speaker 1: of pressure on the negotiators as it gets closer. I

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Speaker 1: think they're eager to avoid that. But in my mind,

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Speaker 1: there is a deadline somewhere in Trump's head. It's just

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Speaker 1: not a public Come on, you sound like an international

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Speaker 1: relations guy. There's a deadline in his head. Is he

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Speaker 1: doing this by himself? I mean what you just said,

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Speaker 1: Jeffrey equates to me, the guys like you know, the

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Speaker 1: names we've been covering are Michael McKee has been covering

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Speaker 1: this for two years. Does Lightheiser matter to be direct?

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Speaker 1: I think he matters a lot, But he only matters

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Speaker 1: as far as Trump will let him go. So, um,

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Speaker 1: he matters because he has Trump's confidence, because he's been

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Speaker 1: the most effective negotiator throughout this process. Um, and because

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Speaker 1: he is uh. He does all of his work in private.

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Speaker 1: He doesn't speak much except to Congress, which is a

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Speaker 1: difference from the rest of Trump's cabinet. But uh, he

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Speaker 1: can only go as far as Trump will let him.

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Speaker 1: So the percolation today and this was early John was

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Speaker 1: was the president mentioned European tariffs or whatever? Do you

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Speaker 1: partition on the one debate we don't focus on the

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Speaker 1: Europe US trade debate. Do you focus on autos separate

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Speaker 1: from everything else? Or is it three part autos, the

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Speaker 1: traditional agriculture issues of Europe and everything else? How do

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Speaker 1: you partition that? I think autos are the most important issue.

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Speaker 1: The agricultural stuff is also important. There's a digital digital

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Speaker 1: trade component as well. There are a lot of other issues,

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Speaker 1: but for for Trump, autos are the most evocative question.

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Speaker 1: And that's true for Europe as well as for Japan.

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Speaker 1: And you know, we've seen the past three year as well.

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Speaker 1: Jeffrey has become really clear over the last year that

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Speaker 1: the overlap between foreign policy and trade policy is absolutely massive.

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Speaker 1: Not lost on many people that a couple of weeks agot,

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Speaker 1: the Chinese president met with the North Korean leader? How

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Speaker 1: key that issue in trade negotiations right now? And how

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Speaker 1: strong is that card the president she holds? It's important.

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Speaker 1: I think it's a big part of the reason why

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Speaker 1: Trump um went back to what was willing to sort

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Speaker 1: of make a ceasefire in Osaka because she had just

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Speaker 1: been in yong Yang. I think it still not an

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Speaker 1: accident that Trump then went to Pyongyang right afterwards, that

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Speaker 1: that's sort of what he sees as a triumph in

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Speaker 1: North Korea. He's a very important part of what he

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Speaker 1: will sell as he runs through electric his record on

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Speaker 1: foreign policy. This is distant to Jeffrey Wright, but just

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Speaker 1: as important, what does the president she's sell at home?

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Speaker 1: President she's in Beijing, he's got a drive forward whatever

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Speaker 1: their trade stances. With a huge real distraction of protests

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Speaker 1: and violence in Hong Kong, how do you perceive how

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Speaker 1: the Chinese will respond to President Trump? I think They're

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Speaker 1: not going to go any further than they see as

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Speaker 1: in their in their own interests, And in fact, I

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Speaker 1: think there's much more skepticism and vision about Trump's attentions

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Speaker 1: now than there was a six months ago. There is

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Speaker 1: a sense now that the US is out to limit

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Speaker 1: China's rides rather than to get specific trade concessions. So

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Speaker 1: that's a big shift. This has been very helpful. Jeffrey right,

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Speaker 1: Thank you so much. You raise your group. This is

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Speaker 1: a joy. It is a Harvard Kennedy school and it

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Speaker 1: is usually thought of his political but they have one

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Speaker 1: of the best economists in the world, Douglas Elmendorf writing

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Speaker 1: heard over the Collected Egos at Harvard Kennedy or Kennedy

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Speaker 1: as it is called. Uh. Doug Elmendorf, of course encyclopedic

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Speaker 1: on her fiscal policy with his former CBO work. And

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Speaker 1: they have a newly minted senior fellow. Her name is

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Speaker 1: Megan Green, as she has a wonderful resume of a

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Speaker 1: bill of you to join Harvard Kennedy. The number one

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Speaker 1: thing is you knows the path to Fenway Park from

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Speaker 1: across the Charles River. Megan Green joins us a newly

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Speaker 1: meanted senior fellow the Harvard Kennedy School. Meghan, congratulations, Why

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Speaker 1: did you apply to h k S or did they

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Speaker 1: find you? Thanks? Um? So I'm going here largely to

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Speaker 1: write a book. Um. And if you're a senior fellow,

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Speaker 1: you do a bit of teaching and work on a

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Speaker 1: project of your channel. So it was a perfect match.

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Speaker 1: Really really good. Congratulations on this one of the things

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Speaker 1: you do well, and you did this manual life and

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Speaker 1: all your other work is usually with every third sentence

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Speaker 1: you ask why? What is the why of central bank

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Speaker 1: policy in the United States right now? Yeah? So I

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Speaker 1: think that is the question everyone's been to ask whether

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Speaker 1: the said will be cutting reach and we knew pretty

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Speaker 1: well that they probably will now. But the more important

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Speaker 1: question is why. What's the point of cutting rates? And

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Speaker 1: there I think actually the evidence is much less conclusive.

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Speaker 1: So you know, we had rates with the zero lower

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Speaker 1: bound for seven years. It didn't stoke inflation or growth really,

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Speaker 1: so it's cutting it's really going to help there if

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Speaker 1: you talk to businesses, and that's been a real drag

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Speaker 1: on the economy. Even the small businesses are reporting that

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Speaker 1: they're having no problem getting access to capital, So borrowing

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Speaker 1: costs are hardly a constraint for businesses m So if

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Speaker 1: we cut rates, are they really going to borrow more

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Speaker 1: and go ahead and invest that That's really unclear. So

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Speaker 1: you know, the set is in a really tough spot.

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Speaker 1: I think the markets are going to bully them into

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Speaker 1: some rate cuts, but it's not clear that that's actually

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Speaker 1: going to help. And if that's the case, then we'll

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Speaker 1: be going into the next downturn whenever it comes um

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Speaker 1: without any real tools to use. Certainly rate moves are

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Speaker 1: aren't going to be effective. They'll have to pull out

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Speaker 1: on conventionary monetary policy tools again. So megan helpers identifying

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Speaker 1: the problem right now and ultimately what the policy prescription

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Speaker 1: would be to address that problem, and where that policy

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Speaker 1: effort would come from. Sure, so, I think one huge

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Speaker 1: problem is just over supply of everything of capital, goods

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Speaker 1: and labor um. But you know, the the FITS concerned

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Speaker 1: about the capital piece, and there's not a whole lot

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Speaker 1: that the FIG could do about over supply, and the

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Speaker 1: flip side of that is a lack of demand for

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Speaker 1: capital um. So the FIG can deal with the supply

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Speaker 1: of capital, but they can't force it down. Company's throat.

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Speaker 1: They don't want to borrow UM. So I really don't

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Speaker 1: think this is a job for the feed I actually

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Speaker 1: think fiscal authorities UM need to do more. And I

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Speaker 1: don't mean, you know, huge tax cuts, UM that kind

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Speaker 1: of stimulus, but and you do you think more targeted

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Speaker 1: policies towards investment would really help. And also, as I mentioned,

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Speaker 1: you know, we're we're pretty long in the tooth in

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Speaker 1: this recovery, and a recession is coming, probably not in

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Speaker 1: the next year. But I think one thing we could

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Speaker 1: do is try to set up some automatic fiscal stabilizers

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Speaker 1: for the next downturn. And now that we're in a

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Speaker 1: relatively useful period. Unfortunately that's not getting a whole lot

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Speaker 1: um of residence policy makers. Let's call Matthew Megan and

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Speaker 1: you have every ability, Meggan Green to go. Matthew. Here,

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Speaker 1: I'm talking about gamma, the convexity. The acceleration of some

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Speaker 1: of these bond moves, is that tangible to economists that

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Speaker 1: they care about the rate of change of the rated

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Speaker 1: change of some of these yields were seeing, so the

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Speaker 1: care and so far as it is either a reflection

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Speaker 1: of what's happening in the economy, and sometimes that is um.

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Speaker 1: Sometimes you know, an inverted Giel curve means that investors

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Speaker 1: think we're going into recession. UM. But I also think

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Speaker 1: that there are other factors that are causing these big

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Speaker 1: moves as well. Um. You know, monetary policy divergence is

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Speaker 1: a piece of it. But the fact that we live

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Speaker 1: in a world where deflation is the fat tail risk

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Speaker 1: and so actually, you know, long term bonds are a

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Speaker 1: great equity risk catch and so you know, I think

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Speaker 1: that's causing big moves in bond markets as well. So

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Speaker 1: it's it's not clear that it's actually a reflection of

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Speaker 1: the economy. UM, but we look at it for sure.

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Speaker 1: Maggie Green, thank us how much senior follow It is

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Speaker 1: a firm of ancient history, Lazard Frere. They have launched

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Speaker 1: themselves over many many of a decade of excellence. J

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Speaker 1: Jacob joins us now from Lazard Asset Management. Jay, you

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Speaker 1: guys right up, an exceptionally acute note. Can you explain,

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Speaker 1: within your detail and your acuteness, the oddity of stocks

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Speaker 1: up amid yields that we've essentially never seen before? How

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Speaker 1: does that happen? Well, it's a great question, and thank

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Speaker 1: you UM. I think that what we're seeing here is

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Speaker 1: defensive stocks really finding a bid. It's pushed markets, it's

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Speaker 1: preach markets higher, and it's in many cases I think

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Speaker 1: been the lack of alternative. What we've seen, I think

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Speaker 1: is investors positioning around uncertainty and and sometimes the safer

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Speaker 1: bet when volatility is driving markets is in some of

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Speaker 1: those defensive equities. Do you see the defensive equities including

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Speaker 1: continued dividend growth UM. I think dividend growth that is

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Speaker 1: a it tends to be a bit case by case.

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Speaker 1: Outside of the US, A lot of investors are looking

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Speaker 1: for for yield, much as the US investors, where I

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Speaker 1: would say very start for that UM before the FED

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Speaker 1: began to raise rates UM, and I think dividends are

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Speaker 1: a way that a lot of the companies are are

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Speaker 1: looking to attract investors, certainly UM. From our perspective, I

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Speaker 1: think we try to be agnostic. It's really about total

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Speaker 1: return UM and dividends are are one component of it.

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Speaker 1: Of course, we've got to look at the other earnings

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Speaker 1: driven potential outcomes there as well, so J You know,

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Speaker 1: as Thomas mentioning earlier, we've had such a moving the

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Speaker 1: equity markets here the SMP up about give us a

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Speaker 1: sense of what you think a reasonable asset allocation is today. Well,

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Speaker 1: we've recently trimmed back some of our equity positioning. We've

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Speaker 1: been overweight equities broadly in our strategies for really for

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Speaker 1: for a couple of years, and we've started to take

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Speaker 1: that back. We're still overweight equities um relative demands in

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Speaker 1: most markets, but I think it's it's just our most

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Speaker 1: recent note pointed this out. I think this is much

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Speaker 1: more about looking at the upside relative to the downside.

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Speaker 1: Uncertainty is being driven very very clearly. I think by

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Speaker 1: by policy. That could be monetary policy, it could be

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Speaker 1: trade policy, and we're also concerned about fiscal policy over

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Speaker 1: the medium term as well. And so I think it's

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Speaker 1: you know, we've just taken some profits on equities. Were

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Speaker 1: still overweight by a little bit, but not by as

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Speaker 1: much as we were, if that makes sense. So you

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Speaker 1: mentioned earlier some defensive stocks, but we've certainly seen some

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Speaker 1: valuations in defensive stocks that make them a little problematic

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Speaker 1: for some investors. How do you think about the evaluation

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Speaker 1: in some of some of those defensive sectors. Oh, I agree,

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Speaker 1: I mean in in utilities and staples. You've seen a

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Speaker 1: lot of inflows UM I think over the last three months,

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Speaker 1: even the whole year, um and we'd expect that is

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Speaker 1: going to make valuations difficult. Our way of looking for

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Speaker 1: that so far, particularly in the last couple of months,

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Speaker 1: is to really start turning over some of the less

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Speaker 1: inspected rocks in the marketplace. UM. I think that there

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Speaker 1: are parts of the marketplace, emerging markets in particular, which

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Speaker 1: have largely been overlooked. I mean, this has been really

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Speaker 1: the story of the U S and China um and

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Speaker 1: I think that there's a lot of other asset classes

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Speaker 1: out there that are maybe you could find more attractive valuations,

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Speaker 1: maybe playing the same themes in certain cases, but with

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Speaker 1: a better risk reward trade off. So my understanding is

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Speaker 1: in the emerging markets there's been some significant underperformance. Are

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Speaker 1: you feel comfortable getting maybe increasing exposure emerging markets? I

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Speaker 1: think it's you know, it's about how much of a

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Speaker 1: position do you have any um UM for US. I mean,

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Speaker 1: if you look at a market like Brazil, right, you've

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Speaker 1: got you've got pension reform um that we believe is

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Speaker 1: going to get through the Lower House. That's a big deal. Brazil.

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Speaker 1: The growth is not the story there. I think it's

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Speaker 1: well understood that they're in a flat to negative or

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Speaker 1: very very low growth environment. But you do have good

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Speaker 1: support from valuations. You've got a central bank. I mean,

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Speaker 1: the big problem in the market, like Brazil historically has

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Speaker 1: been inflation. Well that's under control. So you've got i

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Speaker 1: think a potential catalyst coming up there. You've got the

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Speaker 1: ability of rates to actually be supportive. And then down

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Speaker 1: the road you might have some privatizations. And in a

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Speaker 1: lot of those markets, when things go from very bad

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Speaker 1: so slightly bad, that's where a lot of the equity

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Speaker 1: return can be found. Jacob, thank you so much. A

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Speaker 1: long e m or at least the opportunity of long them.

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Speaker 1: He is with Blizard Asset Management. Thanks for listening to

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Speaker 1: the Bloomberg Savannahs podcast. Subscribe and listen to interviews on Apple,

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Speaker 1: a podcast, SoundCloud, or whichever podcast platform you prefer. I'm

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Speaker 1: on Twitter at Tom Keane before the podcast, you can

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Speaker 1: always catch us worldwide. I'm Bloomberg Radio