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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg

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Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern

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Speaker 1: on Apple car Play or Android Auto with the Bloomberg

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Speaker 1: Business App. Listen on demand wherever you get your podcasts,

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Speaker 1: or watch us live on YouTube.

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Speaker 2: Lizzie Saunders joins us, patiently awaiting here as we look

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Speaker 2: at this news out of the United Kingdom. Lizzie Saunders,

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Speaker 2: My radars up when someone says buy the dip.

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Speaker 3: How dip are the software stocks this morning?

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Speaker 4: Well, as you know, Tom and Paul, I'm not an analyst.

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Speaker 4: I don't cover the software stocks, you know. I think

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Speaker 4: it's a little bit more existential what they're dealing with

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Speaker 4: versus some of the other stocks or groups of stocks

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Speaker 4: that have been hit. As you have this sort of

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Speaker 4: AI related money swirling around, everybody is looking for both

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Speaker 4: the shiny new object the dull new object, who is

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Speaker 4: a beneficiary who is getting disrupted, And I think that

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Speaker 4: type of backdrop will continue. We haven't really seen the

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Speaker 4: retail trader come back in a significant way. I think

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Speaker 4: they've been supportive of lower less downside in some of

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Speaker 4: these areas, but they're not proving to be the big

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Speaker 4: by the dip crowd life was the case in the

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Speaker 4: past couple of years, Paul.

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Speaker 2: The pricing years like October of last year. Yeah, I mean,

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Speaker 2: I don't even think it's a correction.

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Speaker 5: Now, not yet correct me if I'm wrong, zag Liz.

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Speaker 5: We have seen in this marketplace really since kind of

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Speaker 5: late October early November, a rotation maybe out of some

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Speaker 5: of the growth names, some of the tech names, into

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Speaker 5: some of the more value maybe small and mid cap here.

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Speaker 5: Give us your thoughts on that.

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Speaker 4: So I think the broadening out trade definitely has legs.

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Speaker 4: The initial juice provided to the small cap space was

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Speaker 4: in advance of what ended up being a short lived

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Speaker 4: easingcam pain on the part of the FED. But then

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Speaker 4: I think more of the fundamental side kicked in. It

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Speaker 4: wasn't just about rate cuts, because the trajectory for earnings

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Speaker 4: broadly in the Russell two thousand looks quite a bit

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Speaker 4: sharper than it does for the SMP five hundred. That said,

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Speaker 4: what's been interesting is last year in the small cap rally,

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Speaker 4: it was heavily driven down the quality spectrum, non profitable

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Speaker 4: stocks within the Russell two thousand having twice the performance

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Speaker 4: profitable stocks for full year calendar twenty twenty five. That's

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Speaker 4: been turned on its head and now it's the profitable

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Speaker 4: components within the Russell two thousand that are handily outperforming

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Speaker 4: the nonprofitable. And that was something we were saying, you

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Speaker 4: want to fade the unprofitable and lean into the profitable,

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Speaker 4: and that certainly kicked into gear this year.

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Speaker 5: Luzanne, we're probably I don't know about eighty percent away

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Speaker 5: through earnings for the SMPE five hundred. What have you seen,

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Speaker 5: what have you heard about guidance that gives you your

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Speaker 5: as to where this market could go this year?

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Speaker 4: Yeah, So in the aggregate, the earnings growth rate is

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Speaker 4: quite a bit higher than what was expected at the

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Speaker 4: start of the year. We're up at around thirteen percent

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Speaker 4: and change, and that's the blended growth rate, which includes

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Speaker 4: everybody that has reported and the few companies that have

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Speaker 4: yet to report, and that was mid single digits at

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Speaker 4: the start of earning season. I guess the difference, though,

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Speaker 4: relative to the past four quarters or so, is that

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Speaker 4: the beat rate both on top line and bottom line

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Speaker 4: has been weaker relative to the four quarter average relative

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Speaker 4: to the longer term Since mid nineteen nineties, average so

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Speaker 4: that's what's been distinct about this backdrop is overall higher

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Speaker 4: earnings growth, but a lower beat rate and a bit

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Speaker 4: more subdued forward looking forecasts.

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Speaker 5: So, Lizianne, we're thinking about this market here, valuation it

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Speaker 5: seems to have faded a little bit in terms of

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Speaker 5: concerns for market participants. I'm not sure I'm hearing as

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Speaker 5: much concerned about valuation for this market these days. How

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Speaker 5: do you think about that?

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Speaker 4: Well, maybe that's because in the aftermath of the so

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Speaker 4: called Liberation Day tariff announcements and then obviously the subsequent

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Speaker 4: ninety day delay, obviously that move on April ninth began

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Speaker 4: what was an unbelievable surge. But what was interesting is

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Speaker 4: you then stopped the valuation expansion in around August of

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Speaker 4: last year, and valuations have been relatively flat, yet at

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Speaker 4: the same time you've had that rising earnings growth trajectory.

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Speaker 4: So it was almost like the market pause and said, Okay,

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Speaker 4: we need earnings now to start to do more of

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Speaker 4: the heavy lifting. We're sort of past that automatic valuation expansion,

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Speaker 4: and earnings indeed have begun to do more of the

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Speaker 4: heavy lifting. So you've eased some of that valuation concern

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Speaker 4: by virtue of the shoppiness we've seen in the equity market.

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Speaker 4: Yet at the same time, earnings can a power hire Lizzie.

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Speaker 2: I've done normal, Rubini, I think as long as I've

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Speaker 2: known you. And he dropped a bombshell yesterday. Doctor Rubini

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Speaker 2: made clear he looks at the productivity and technology of

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Speaker 2: America and models a closer to four percent economy than

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Speaker 2: a two percent economy. Could we miss here an exceptional

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Speaker 2: moment for American growth is that modeled in?

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Speaker 4: Not only do I think that it's not modeled in,

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Speaker 4: but I think it's really a key ingredient in light

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Speaker 4: of the very weak labor force growth that we're seeing

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Speaker 4: courtesy of the crackdown on immigration. You know, we know

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Speaker 4: the formula that goes into what GDP. When GDP is released,

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Speaker 4: it's everything from government and private sector and consumption and

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Speaker 4: the relationship between imports and exports, and business investment residential investment.

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Speaker 4: But at its base level, the calculation for economic growth

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Speaker 4: is productivity times labor force growth. We don't have the

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Speaker 4: labor force growth piece, but we certainly have had the

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Speaker 4: productivity piece, and that has been a beneficial offset and

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Speaker 4: environment where we have very constrained labor force growth. It

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Speaker 4: also tells you that if that productivity miracle, if we

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Speaker 4: want to call it, that, fades it all absent any

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Speaker 4: pickup in labor force growth, then we probably have a

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Speaker 4: bigger problem from a GDP perspective. But that's certainly not

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Speaker 4: been the case.

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Speaker 2: Lizzene signers with a far too short interview. Thank you

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Speaker 2: so much for the conversation this morning. Lazanne wrapped around

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Speaker 2: the moment that we're having in London. Lizen Saunders always

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Speaker 2: in Forever with Charles Schwab.

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Speaker 3: Stay with us.

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Speaker 2: More from Bloomberg Surveillance coming up after this.

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Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live

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Speaker 1: in an American Revolution on YouTube.

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Speaker 2: At Brown University and just definitive on our American history.

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Speaker 2: Here Wendy a remarkable set of sentences with Helene Cooper

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Speaker 2: in The New York Times this morning. It really struck

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Speaker 2: me for a president ran for office promising to keep

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Speaker 2: the United States out of wars. Comma, mister Trump is

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Speaker 2: now considering what would be at least the seventh American

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Speaker 2: military attack in another country in the past year. In

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Speaker 2: his second on Iran, et cetera, et cetera, Professor Schiller,

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Speaker 2: how did we get here?

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Speaker 6: Well, I mean, I think Iran in the United States

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Speaker 6: has been a complicated problem, as you know, for what

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Speaker 6: fifty years now, just about fifty years a little under.

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Speaker 6: And I think it's impossible to be the world's superpower

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Speaker 6: and stay out of international conflict. It's just impossible. You

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Speaker 6: inherit this edifice if you are President Trumpy at it

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Speaker 6: in his first term as well well, and Biden and

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Speaker 6: Obama and George W. Bush, and you know, it's very

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Speaker 6: hard to unpack that or dismantle that edifice. And that

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Speaker 6: edifice is frankly the beacon of freedom. It can challenge

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Speaker 6: that if they want, but you know, we are a

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Speaker 6: country that, since World War Two, enforces the international order,

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Speaker 6: and even though Trump is pulling out of international organizations,

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Speaker 6: we are.

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Speaker 4: Still that country.

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Speaker 6: And it's just simply impossible to avoid because the United

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Speaker 6: States is so embedded in the global order that if

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Speaker 6: Iran poses any kind of threat to our allies or

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Speaker 6: to us, then we have to act, and that is

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Speaker 6: that's the job. So I think the promises he made

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Speaker 6: were I'm not going to do this, willy nilly, I'm

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Speaker 6: not going to go in search of monsters to destroy

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Speaker 6: as John Quincy Adams as you know, you know I've

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Speaker 6: talked about that has said one hundred and fifty years ago,

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Speaker 6: but more than one hundred five years ago. But he

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Speaker 6: has an edifice that is still the world's supreme power

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Speaker 6: and defender, and it's just impossible to walk away from

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Speaker 6: that if you're the president of the United States.

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Speaker 5: Given President Trump's you know, he's focusing on international affairs,

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Speaker 5: and I guess that's typical of a second term president here.

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Speaker 5: How concerned is the administration? Is the Republican Party with

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Speaker 5: his low approval ratings here, well, you know that's sort.

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Speaker 6: Of the big criticism that people like Marjorie Taylor Green,

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Speaker 6: former representative in the House who just left, made about

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Speaker 6: MAGA and about what Trump created. And so I was

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Speaker 6: going to you know, I was going to go into

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Speaker 6: office with I'm Donald Trump. I'm going to get rid

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Speaker 6: of the rhinos. I'm going to get rid of this

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Speaker 6: sort of Republican impetus to go to war, even though

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Speaker 6: Democrats start as many wars as Republicans in the last

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Speaker 6: one hundred years. But nonetheless, you know, I'm going to

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Speaker 6: get rid of all that, I'm going to focus on

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Speaker 6: the United States, and she what she's saying is that

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Speaker 6: he's betrayed that promise and that he's deflecting.

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Speaker 3: But I don't think.

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Speaker 6: I think that's just more complicated than that. Because of

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Speaker 6: our global interest, because we are globalized, because our economy

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Speaker 6: rests on the stability of the rest of the world,

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Speaker 6: we can't just sit things out. And I think that's

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Speaker 6: the thing that possibly the base that voted for Donald Trump,

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Speaker 6: you know, didn't want to hear or doesn't want to accept.

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Speaker 6: But certainly as president, that's what he has to do,

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Speaker 6: because he makes an argument that it's in his interest.

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Speaker 6: Is this deflection, it'd be a very expensive, risky deflection

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Speaker 6: from the economy, from affordability, from ice tactics. You know,

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Speaker 6: you can do other things if you're Donald Trump, to deflect.

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Speaker 6: You don't have to start a war with the wrong president.

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Speaker 5: Trump has done I think a pretty good job of

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Speaker 5: kind of framing the allied relationships that the United States

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Speaker 5: has enjoyed or fosters into World War two. Is that

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Speaker 5: going to come back and bite him here to the

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Speaker 5: extent he does take some drastic moves here in our end,

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Speaker 5: does he have the support of allies.

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Speaker 6: Well, you know, Paul and Tom, this is a really

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Speaker 6: important question. We saw the first golf for war, and

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Speaker 6: we saw the second go for war, and we realized

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Speaker 6: that United States went in a international community the first time,

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Speaker 6: but really with Britain, i mean, on its own the

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Speaker 6: second time, and it left us a twenty year commitment

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Speaker 6: to war. So it becomes more expensive and more risky

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Speaker 6: to do it by yourself. But you know, Trump had

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Speaker 6: legitimate points about NATO. We can all agree they weren't

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Speaker 6: paying their fair share of NATO and the United States

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Speaker 6: was carrying the burden and that was true. And I

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Speaker 6: think you have to get the president credit for saying, look,

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Speaker 6: you have to stand up for yourself. We're not going

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Speaker 6: to be able always able to shoulder the burdens as.

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Speaker 3: We speak, Paul, should we talk economics? We can just

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Speaker 3: do that.

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Speaker 2: Let's digress from geopolitics for a moment. We do it

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Speaker 2: with Wendy Schiller and greet all of you across the nation. Wendy,

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Speaker 2: I'm reading the Morgan.

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Speaker 3: One volume on William McKinley.

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Speaker 2: I'm ignorant on the period of the Gilded Age, and

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Speaker 2: I'm getting out I'm trying to get forward to Grover Cleveland,

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Speaker 2: Alexander and Professor Schiller. What I see with McKinley is

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Speaker 2: he walked back his massive protectionist tendencies. Are we seeing

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Speaker 2: that with this president that he's doing a so called

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Speaker 2: buffalo pivot in his own Trumpian way?

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Speaker 6: Well, here's where I think this is a great example.

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Speaker 6: This is where elections matter, and that the Founders put

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Speaker 6: midterm elections in And you know that was supposedly a

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Speaker 6: check on the House, really mostly because everybody in the

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Speaker 6: House is up for reelectionary two years, but it's really

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Speaker 6: a check also on partisanship and on the part of

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Speaker 6: the share party between the President and Congress. This is

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Speaker 6: a check on the president. He realizes that the last

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Speaker 6: two years of his presidency will be quite unpleasant if

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Speaker 6: the Democrats take both the House and the Senate. And

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Speaker 6: what he's hearing from his party is the Senate's in play,

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Speaker 6: and that's because of his economic policies and to some extent, tariffs,

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Speaker 6: and he hasn't brought manufacturing back and these are overwhelming

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Speaker 6: everything else he's doing. So I think that's where the

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Speaker 6: urgency is coming in terms of tariffs, and of course

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Speaker 6: Grover Cleveland and Donald Trump share a very important commonality. Right,

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Speaker 6: they won, they lost, and they won again. McKinley. The

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Speaker 6: McKinley Bill, you know of eighteen eighty nine, as you

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Speaker 6: well know, was the largest ARFF protection is built ProTouch

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Speaker 6: in our history. And of course by the time becomes

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Speaker 6: president certainly realizes that's not the way to run the rodeo.

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Speaker 6: So I think this is what's happening. At the same time,

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Speaker 6: you know, things aren't kicking up the economy, and he's

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Speaker 6: hearing that he could lose the Senate, which will make

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Speaker 6: life very difficult for Donald Trump.

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Speaker 2: Quickly or it's off your remit, but I know you're

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Speaker 2: sneaking to the class with the late great William Poole

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Speaker 2: or other great economists at Brown University. Kevin Hasset with

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Speaker 2: an uproar yesterday folks criticizing sharply the New York Fed

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Speaker 2: academics over who pays the bill? Professor Schiller enlightened us.

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Speaker 2: Do we pay the tariff bill or does some company

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Speaker 2: over in Vietnam pay it?

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Speaker 6: Well, I mean, this is the thing about diffuse costs

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Speaker 6: versus concentrated costs.

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Speaker 3: This is the whole crux.

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Speaker 6: Of the interception between the economy and US politics. When

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Speaker 6: the calls are diffuse, it is harder to sort of

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Speaker 6: get voters to pay attention when they're concentrated. I need

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Speaker 6: a particular part to make another thing in the United States,

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Speaker 6: and that part now costs twenty five percent more. That

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Speaker 6: hurts concentrated industries. And we are economy that is so

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Speaker 6: broad and diverse and service oriented now that voters and

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Speaker 6: most people don't feel it as acutely as concentrated industries.

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Speaker 6: But the problem for the Republicans is that some of

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Speaker 6: those concentrated industries are in states that have key elections

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Speaker 6: this year, so that's where this intersection happens. But it's

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Speaker 6: always the battle between diffuse costs and concentrated costs, particularly

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Speaker 6: when it comes to trade politics.

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Speaker 5: So how aggressive can the Democrats be here in his

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Speaker 5: midterm elections?

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Speaker 6: Well, Paul, the Democrats can find a way to lose

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Speaker 6: an election they're supposed to win. We've seen that before

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Speaker 6: in the past. You know, they have to get their

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Speaker 6: act together and agree on their messaging.

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Speaker 4: And now they've.

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Speaker 6: Got a couple of things. One is overreach, but they

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Speaker 6: have to move away from you know, democracies failing democracy

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Speaker 6: is failing. They're winning special elections all over the place,

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Speaker 6: so in some ways democracy is not failing them. Right now,

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Speaker 6: they have to go zero in on core issues healthcare, affordability,

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Speaker 6: and individual security from the intrusion of the federal government,

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Speaker 6: three issues. Bill Clinton always said you need three, so

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Speaker 6: George Bush had three George w So they have to

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Speaker 6: get their act together and decide this can't be a diverse,

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Speaker 6: dispersed campaign for the Democrats. They have to zero in

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Speaker 6: on a couple of issues.

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Speaker 2: Professor Schuler, thank you so much for the brief this morning,

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Speaker 2: much needed on our geopolitics. The economist Wendy Schuller of

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Speaker 2: Brown At University.

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Speaker 3: Stay with us.

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Speaker 2: More from Bloomberg Surveillance coming up after this.

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Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live

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Speaker 1: weekday afternoons from seven to ten am Eastern Listen on

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Speaker 1: Apple Karplay and Android Otto with the Bloomberg Business app,

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Speaker 1: or watch us live on YouTube.

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Speaker 2: This is a joy with substantial physics out of the

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Speaker 2: Massachusetts Institute of Technology part of it, and then he

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Speaker 2: got into the totally cool and still cool physics program

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Speaker 2: at Boston University. A really unknown magisterial program. Then he

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Speaker 2: wandered out to JPL to put men on Mars or whatever.

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Speaker 2: We could do the whole thing on space here, George,

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Speaker 2: but with PGUM. Let's do it with George Patterson here

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Speaker 2: on where we are right now. The leverage of nineteen

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Speaker 2: ninety eight, some people knew it was there. I've had

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Speaker 2: the honor of talking to Myron shuls two three times.

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Speaker 2: Do we have visible leverage now within the system or

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Speaker 2: do we have a discrete hidden leverage within the system

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Speaker 2: that we don't understand.

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Speaker 7: We spent a lot of time, First of all, thank

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Speaker 7: you for being here, a great opportunity.

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Speaker 3: We spent a lot of time.

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Speaker 7: Worrying where like the hidden risks are.

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Speaker 3: In the economy.

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Speaker 7: There's really there's really no obvious excesses, right, There's no

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Speaker 7: obvious areas where you know, we worry that capital is misallocated,

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Speaker 7: particularly relative to like the people that can afford to

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Speaker 7: take the risks, so we don't see those types of

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Speaker 7: hidden leverage scenarios.

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Speaker 3: You guys are Belton suspenders.

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Speaker 2: I'm gonna I'm I'm front Paul sween here, this is

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Speaker 2: his question, but I'm stealing.

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Speaker 3: It private credit. You gotta be kidding me. They want

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Speaker 3: to put it my ira.

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Speaker 7: Listen, listen there. Private credit, like all private assets, has

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Speaker 7: a place in portfolios. It's what's important for everyone really

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Speaker 7: is to design a portfolio that meets your needs. There

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Speaker 7: are substantial return opportunities, but you need to understand what

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Speaker 7: you're getting involved. You need to understand the limitations, the

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Speaker 7: upside and also the downside.

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Speaker 3: Did that sound like the general counsel of people they

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Speaker 3: memorize it? That was brilliant, exactly, George.

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Speaker 5: You think about twenty twenty five performance, US equities did

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Speaker 5: really well, but rest of the world did a lot better.

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Speaker 5: How do you think about US versus rest of the world?

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Speaker 3: Here?

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Speaker 7: Exactly, in all honesty, like, many of the best opportunities

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Speaker 7: I would say are probably outside the US. The US

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Speaker 7: has again strong performance, but when you look at both

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Speaker 7: emerging marks and even just European equities, Japanese equities, twenty

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Speaker 7: five was a great year to be outside. And one

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Speaker 7: of the great things about diversification is that it's one

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Speaker 7: of the few free lunches that you can really have

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Speaker 7: in the world of investments. You can diverse by your portfolio,

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Speaker 7: you can take lower risk, and it really doesn't cost

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Speaker 7: you anything to do that.

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Speaker 5: So, I mean a lot of the performance in twenty

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Speaker 5: twenty five outside of the US was the weakening US dollar.

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Speaker 5: I'm not sure we can count on that again. So

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Speaker 5: to the extent that you're I don't know, overweight rest

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Speaker 5: of world or non US, what do you have to

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Speaker 5: believe there?

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Speaker 7: Well, part of it's just where do you think that

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Speaker 7: where do you think the growth is going to be

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Speaker 7: like for an emerging With regard to emerging markets, you know,

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Speaker 7: I think terriffs have largely come in a little bit

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Speaker 7: lighter than expected. You know, if you look at manufacturing

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Speaker 7: in the US, it's not coming back. I'm not quite

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Speaker 7: sure there's really an appetite for manufacturing jobs. So a

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Speaker 7: lot of that is still going to happen in emerging markets.

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Speaker 7: A lot of a lot of wealth created is still

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Speaker 7: going to happen there. I think the fact that there

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Speaker 7: are less headwinds with regards to you know, tariffs and

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Speaker 7: different policies really just sets it up. I mean, we've

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Speaker 7: had great performance in emerging market I think we could

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Speaker 7: be at the beginning of a cycle where we see

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Speaker 7: continued performance there.

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Speaker 2: George Patterson with US, we're going to get to the

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Speaker 2: claims report here in a moment, let me squeeze one more,

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Speaker 2: and I want to come back and talk about some

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Speaker 2: physics envy as we can. You're definitive on this. Are

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Speaker 2: the classic curves, the Gaussian curve, the log normal curve,

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Speaker 2: talleebs plus on distribution.

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Speaker 3: Are they acting normal? Now? Well, the dynamics.

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Speaker 7: Listen, you know those are nice analytical forms that you

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Speaker 7: learn in school, but the real world is not like that.

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Speaker 3: How distant is our real.

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Speaker 2: World from those analytical forms.

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Speaker 7: Listen, things tend to be quiet for a while and

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Speaker 7: then you get much larger tails. So I think, literally,

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Speaker 7: whenever we fit distributions, whenever I give internal seminars, I'm

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Speaker 7: always telling my telling the young researchers. Don't assume normality,

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Speaker 7: you know, you estimate something that has wider tails.

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Speaker 2: So when you bring your Hinckley picnic boat down the

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Speaker 2: Hudson to Pigium is an amy your boat suddenly.

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Speaker 7: Not quite I'm not quite. I'm not quite at the

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Speaker 7: Hinckley level.

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Speaker 3: Yeah, well we'll see.

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Speaker 2: Well you're all use Percelli's I mean, he's got it

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Speaker 2: as well.

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Speaker 3: We've got a ton. It's a Seattle slew of data pulse, sweeting.

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Speaker 5: Yeah, we've got the initial job, exclaims Tom.

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Speaker 3: Look at that. It's a latch monatathon number.

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Speaker 6: It is.

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Speaker 5: It's a two hundred and six thousand. The consensus was

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Speaker 5: two hundred and twenty five thousand, Tom, And last period

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Speaker 5: was revised a little bit higher to two twenty nine

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Speaker 5: thousand higher, so much less much lower rate here this period.

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Speaker 2: Here interesting to see here on the tenure yield, get

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Speaker 2: a higher yield. I guess they're looking in that as

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Speaker 2: a more buoyant economy. Four point one zero percent future

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Speaker 2: is a negative twenty six right now, and the Vicks

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Speaker 2: extends out from a twenty level out to twenty one

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Speaker 2: point five zero. Okay, I want to talk a bit

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Speaker 2: quiet here. We're gonna go looktle bit physics, folks. There

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Speaker 2: are things called cross moments, which are a four box

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Speaker 2: description of the dynamics of the market. Fancy people like you,

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Speaker 2: George Patterson, talk about the slew rates, the rate you know,

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Speaker 2: on a Newtonian basis, the rates of change. Are you

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Speaker 2: worried about suddenly second derivative, suddenly first derivative, Suddenly slew

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Speaker 2: rates we can't handle.

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Speaker 7: Listen, we do worry when we do portfolio construction, we

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Speaker 7: go way beyond mean variants, right, we look at higher moments.

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Speaker 7: A lot of times it's more cokurtosis and co skewness.

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Speaker 7: Oh boy, I know it's probably a little bit early

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Speaker 7: in the morning for some of those.

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Speaker 3: Well they cured mine at New York Pressbyterian continue.

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Speaker 7: But you do. Like the challenge is is that markets

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Speaker 7: are oftentimes, you know, very quiet, and then you get

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Speaker 7: these large moves, and in order to get to think

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Speaker 7: about how to positions for some of these large moves,

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Speaker 7: you need to be able to deal with how things

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Speaker 7: work in extremes. And that's that's really some of the

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Speaker 7: approaches that we use is looking at things beyond just

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Speaker 7: you know, kind of textbook portfolio construction that you might

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Speaker 7: learn in an MBA program. It's really how do you

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Speaker 7: think about robust portfolio design? How do you think about

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Speaker 7: downside protection because a lot of times you might not

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Speaker 7: want to own some assets that really give you the

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Speaker 7: type of tail protection that you're going to get.

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Speaker 5: So put all that together, sitting here early in twenty

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Speaker 5: twenty six, what's my allocation here? Stocks, bonds, US, non us,

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Speaker 5: what is and has it changed for you guys.

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Speaker 7: So it has changed, and part of it is really

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Speaker 7: the long term outlook. So you know, one of the

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Speaker 7: great things about bonds now with yields where they are

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Speaker 7: is you're getting paid. So you know, if you look

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Speaker 7: at equities, US equities are slightly expensive. US has been

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Speaker 7: a phenomenal growth market, but if you look out in

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Speaker 7: like five to ten years, US equities are relatively expensive,

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Speaker 7: so you get paid. You can get a lot of

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Speaker 7: diversification by having some bond return, particularly when you're looking

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Speaker 7: at you know, a an kind of institutional credit bond

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00:22:54,840 --> 00:22:58,560
Speaker 7: portfolio in the five percent. Also looking outside the US,

438
00:22:58,640 --> 00:23:02,000
Speaker 7: that's where we see opportunities. All of our macro indicators

439
00:23:02,000 --> 00:23:03,879
Speaker 7: indicate smooth sailing ahead.

440
00:23:04,040 --> 00:23:07,000
Speaker 3: Well, I like to you, he's kneeled right into where

441
00:23:07,040 --> 00:23:08,359
Speaker 3: I was going. Smooth sailing.

442
00:23:08,760 --> 00:23:12,400
Speaker 2: The wonderful kent Osben had a book years ago, Iceberg Risk.

443
00:23:12,440 --> 00:23:14,440
Speaker 2: He's done all sorts of work, folks, credit sweets and

444
00:23:14,480 --> 00:23:15,240
Speaker 2: Goldman sex.

445
00:23:15,520 --> 00:23:18,399
Speaker 3: I m F. He's like a horse in the quant area.

446
00:23:19,119 --> 00:23:21,440
Speaker 3: It's Jack and he's out in the bow.

447
00:23:21,280 --> 00:23:25,720
Speaker 2: Of the Titanic, and they're two statisticians and they just

448
00:23:26,440 --> 00:23:27,840
Speaker 2: they just got it all figured out.

449
00:23:28,040 --> 00:23:29,119
Speaker 3: The ability to get.

450
00:23:29,000 --> 00:23:32,040
Speaker 2: Hit by an iceberg and the Titanic isn't there, And

451
00:23:32,160 --> 00:23:34,680
Speaker 2: Kent Osman says, that's iceberg risk.

452
00:23:35,000 --> 00:23:37,080
Speaker 3: How are those icebergs looking right now?

453
00:23:37,200 --> 00:23:41,600
Speaker 7: Hey, George Fatters, Listen, you always have to be pay

454
00:23:41,640 --> 00:23:44,840
Speaker 7: attention and be nimble because you never know when something

455
00:23:44,880 --> 00:23:48,320
Speaker 7: can emerge. Again, We've had a lot of economic data.

456
00:23:48,400 --> 00:23:49,720
Speaker 7: Some of it's a little weaker, some of it's a

457
00:23:49,760 --> 00:23:53,760
Speaker 7: little stronger, but it's it's been surprisingly boring in all honesty.

458
00:23:54,040 --> 00:23:58,160
Speaker 7: In terms of inflation seems to be relatively and contained.

459
00:23:58,200 --> 00:24:00,640
Speaker 7: I know we've had some conversations yesterday day about FED

460
00:24:00,680 --> 00:24:03,280
Speaker 7: speakers that are concerned about it. But again, the market

461
00:24:03,359 --> 00:24:06,359
Speaker 7: seems to be fine with it. Unemployment seems to be good,

462
00:24:06,520 --> 00:24:07,480
Speaker 7: growth seems.

463
00:24:07,200 --> 00:24:07,720
Speaker 3: To be good.

464
00:24:07,840 --> 00:24:10,720
Speaker 7: So there's nothing that's really breaking out to the upside

465
00:24:10,840 --> 00:24:11,639
Speaker 7: or the downside.

466
00:24:11,680 --> 00:24:14,480
Speaker 3: Are you? Are you in speaking terms with Greg Peters? Yes,

467
00:24:14,520 --> 00:24:17,320
Speaker 3: of course. Always How do you help Greg Peters? I mean,

468
00:24:17,600 --> 00:24:20,040
Speaker 3: you know he's he's got some heavy lifting to do.

469
00:24:20,359 --> 00:24:23,560
Speaker 7: Listen. Bond bond investors are by their nature have a

470
00:24:23,600 --> 00:24:27,960
Speaker 7: different personality, right because with bond investors you're always you're

471
00:24:27,960 --> 00:24:31,200
Speaker 7: always worried about the downside. Right, I spend a lot

472
00:24:31,200 --> 00:24:33,800
Speaker 7: of time focusing on equities, which is all about hopes

473
00:24:33,800 --> 00:24:34,720
Speaker 7: and dreams.

474
00:24:35,320 --> 00:24:38,159
Speaker 3: That nails the market right there. You should think, you know,

475
00:24:38,320 --> 00:24:41,720
Speaker 3: I like that. Bloomberg Surveillance hopes and dreams.

476
00:24:41,800 --> 00:24:47,600
Speaker 2: George Patterson brilliants, just serious quand jobs, CIO connotative solutions

477
00:24:47,600 --> 00:24:49,359
Speaker 2: that p Jim can't say enough.

478
00:24:49,440 --> 00:24:54,200
Speaker 3: About the rigor of the PGM shot. Stay with us.

479
00:24:54,440 --> 00:24:57,680
Speaker 2: More from Bloomberg Surveillance coming up after this.

480
00:25:04,920 --> 00:25:08,520
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us Live

481
00:25:08,560 --> 00:25:12,080
Speaker 1: weekday afternoons from seven to ten am Eastern Listen on Apple,

482
00:25:12,119 --> 00:25:15,480
Speaker 1: Karplay and Android Otto with the Bloomberg Business app, or

483
00:25:15,640 --> 00:25:17,280
Speaker 1: watch us live on YouTube.

484
00:25:17,840 --> 00:25:20,600
Speaker 2: Lucy White and Ellen Milligan off the desk at Queen

485
00:25:20,680 --> 00:25:24,840
Speaker 2: Victoria Street this morning. The headline is sobering to anybody

486
00:25:24,840 --> 00:25:27,200
Speaker 2: of the history of the United Kingdom and the fabric

487
00:25:27,240 --> 00:25:32,640
Speaker 2: of the people. Former Prince Andrew arrested on suspicion of misconduct.

488
00:25:32,640 --> 00:25:37,000
Speaker 2: We are advantaged to have Michelle Hussain with Bloomberg.

489
00:25:37,119 --> 00:25:38,960
Speaker 3: She was with US ages ago.

490
00:25:39,160 --> 00:25:41,160
Speaker 8: She was I think twelve years old when she's dark

491
00:25:41,160 --> 00:25:43,959
Speaker 8: and at the door, and then a sterling career at

492
00:25:44,000 --> 00:25:50,639
Speaker 8: the BBC and wonderful acclaim on understanding this Disunited Kingdom.

493
00:25:50,720 --> 00:25:54,040
Speaker 8: Maybe like no one else, it helps with a affiliation

494
00:25:54,119 --> 00:25:57,640
Speaker 8: with Pakistan, to be an outsiders, a family. She has

495
00:25:57,680 --> 00:26:01,760
Speaker 8: a resonance with the people of Britain like no one.

496
00:26:02,640 --> 00:26:06,080
Speaker 8: I just the shock of it all and whyn't you

497
00:26:06,119 --> 00:26:10,119
Speaker 8: to speak to an American audience? How do the people

498
00:26:10,160 --> 00:26:13,840
Speaker 8: of the United Kingdom react to this arrest this morning?

499
00:26:14,119 --> 00:26:17,119
Speaker 8: That takes us back to the arrest of Charles the

500
00:26:17,240 --> 00:26:19,520
Speaker 8: First in the seventeenth century.

501
00:26:21,240 --> 00:26:24,760
Speaker 9: You know your history and Tom morning, Tom morning, Paul.

502
00:26:25,800 --> 00:26:27,560
Speaker 9: You know I can tell you first of all the

503
00:26:27,600 --> 00:26:30,760
Speaker 9: reaction in this newsroom. Then this is the kind of

504
00:26:30,960 --> 00:26:33,919
Speaker 9: moment where you don't just do a sharp intake of

505
00:26:33,960 --> 00:26:36,000
Speaker 9: breath with as you see the news come through, Like

506
00:26:36,200 --> 00:26:38,040
Speaker 9: you know, people are standing up at their desk just

507
00:26:38,080 --> 00:26:41,240
Speaker 9: wanting to make eye contact and talk about the enormity

508
00:26:41,280 --> 00:26:44,720
Speaker 9: of what's happened. So it was in the morning, our

509
00:26:44,880 --> 00:26:48,639
Speaker 9: time that the news first came that one of the

510
00:26:48,680 --> 00:26:51,520
Speaker 9: police forces in the UK, the one that works in

511
00:26:52,000 --> 00:26:55,680
Speaker 9: around the London area, in the words of their statement,

512
00:26:55,680 --> 00:26:58,719
Speaker 9: had arrested a man in his sixties on suspicion of

513
00:26:58,800 --> 00:27:02,840
Speaker 9: misconduct in public office. It was soon apparent that this

514
00:27:02,920 --> 00:27:06,520
Speaker 9: man was the former Prince Andrew. But the key point

515
00:27:06,680 --> 00:27:09,320
Speaker 9: being the idea that a member of the royal family

516
00:27:09,400 --> 00:27:14,119
Speaker 9: has been arrested is in police custody, is answering questions,

517
00:27:14,160 --> 00:27:18,359
Speaker 9: and that police searches of two properties the police statement

518
00:27:18,400 --> 00:27:22,639
Speaker 9: told us were underway Norfolk and Berkshire. Now that means

519
00:27:23,240 --> 00:27:28,560
Speaker 9: royal residences estates around Windsor and Sandringham at Norfolk, which

520
00:27:28,600 --> 00:27:31,840
Speaker 9: is where Prince Andrew. Former Prince Andrew's effectively in an

521
00:27:31,880 --> 00:27:34,919
Speaker 9: internal exile. So there's the enormity of that. And then

522
00:27:34,960 --> 00:27:37,080
Speaker 9: it's clear from the police statement that what they're actually

523
00:27:37,119 --> 00:27:42,000
Speaker 9: investigating is the period when Andrew was a UK trade

524
00:27:42,119 --> 00:27:45,880
Speaker 9: envoy and what the Epstein files now appear to show

525
00:27:45,880 --> 00:27:48,960
Speaker 9: about the passing of information to Jeffrey and.

526
00:27:48,760 --> 00:27:52,560
Speaker 2: I know the Telegraph has an extended discussion about Icelandic

527
00:27:52,640 --> 00:27:56,800
Speaker 2: material stuff off our radar in America, Michelle. The reality

528
00:27:56,880 --> 00:27:59,880
Speaker 2: for alexis christaf for is Paul Sweeney and Tom Key

529
00:28:00,560 --> 00:28:04,280
Speaker 2: is our knowledge is Colin Firth and Helena Bonham Carter

530
00:28:04,760 --> 00:28:09,160
Speaker 2: in the King's Speech a few years ago discuss the

531
00:28:09,200 --> 00:28:14,600
Speaker 2: resonance of this with the next royal family, with the

532
00:28:14,600 --> 00:28:19,840
Speaker 2: Prince of Princess of Wales, the King ill with cancer

533
00:28:19,960 --> 00:28:25,000
Speaker 2: doing better. In all that explain the generational dynamics here

534
00:28:25,440 --> 00:28:28,560
Speaker 2: of the royal family with this shocking arrest.

535
00:28:30,080 --> 00:28:33,200
Speaker 9: This is not only uncharted territory for the royal family,

536
00:28:33,320 --> 00:28:37,320
Speaker 9: but it is such an immense moment because even though

537
00:28:37,600 --> 00:28:41,400
Speaker 9: back in November the King acted very significantly in the

538
00:28:41,440 --> 00:28:46,840
Speaker 9: wake of the publication of Virginia Guphrase posthumous memoir, even

539
00:28:46,840 --> 00:28:49,720
Speaker 9: though we acted at that point to remove his Royal

540
00:28:49,800 --> 00:28:53,600
Speaker 9: Highness title from Andrew, to remove prince which is his

541
00:28:53,680 --> 00:28:58,600
Speaker 9: birthright as the son of the late monarch, and also

542
00:28:58,640 --> 00:29:00,440
Speaker 9: to remove him from where he was living on the

543
00:29:00,520 --> 00:29:02,480
Speaker 9: royal estate in Windsor, and to send him to a

544
00:29:02,560 --> 00:29:06,360
Speaker 9: much more private place where he would essentially be out

545
00:29:06,400 --> 00:29:10,880
Speaker 9: of the public gaze entirely in Norfolk. Even though they

546
00:29:10,880 --> 00:29:13,240
Speaker 9: have done all of that, the real danger and risk,

547
00:29:13,320 --> 00:29:16,800
Speaker 9: and what they'll all be contemplating and digesting today is

548
00:29:16,800 --> 00:29:20,880
Speaker 9: the fact that in public, as has already happened a

549
00:29:20,880 --> 00:29:24,120
Speaker 9: couple of times to the King, people may be peckling them,

550
00:29:24,280 --> 00:29:28,920
Speaker 9: calling out. Certainly, it's hard to imagine a future interview

551
00:29:29,040 --> 00:29:31,200
Speaker 9: in which this doesn't come up. Prince Andrew actually is

552
00:29:31,320 --> 00:29:33,840
Speaker 9: just done at BBC. Prince William has just done a

553
00:29:33,840 --> 00:29:38,040
Speaker 9: BBC interview in which nothing of the sort was discussed.

554
00:29:38,120 --> 00:29:41,560
Speaker 9: But even though they've taken steps to distance themselves from

555
00:29:41,560 --> 00:29:45,320
Speaker 9: Andrew Mountbatten Windsor, this will no doubt be a really

556
00:29:45,360 --> 00:29:48,640
Speaker 9: difficult moment. You know, public support for the monarchy is

557
00:29:49,000 --> 00:29:52,719
Speaker 9: widespread in this country, but it does rather depend on

558
00:29:52,800 --> 00:29:57,959
Speaker 9: an unspoken assumption that everyone is going to behave really well,

559
00:29:58,480 --> 00:30:02,160
Speaker 9: and when you're in this kind of territory, it obviously

560
00:30:02,200 --> 00:30:06,640
Speaker 9: has implications for the institution more widely than one individual.

561
00:30:06,680 --> 00:30:10,680
Speaker 5: Michelle. King Charles has issued a statement here this morning.

562
00:30:10,760 --> 00:30:14,240
Speaker 5: King Charles has said that quote law must take its

563
00:30:14,320 --> 00:30:17,200
Speaker 5: course in King Charles is saying that he will not

564
00:30:17,360 --> 00:30:20,800
Speaker 5: comment further on this matter. What are next steps here?

565
00:30:20,920 --> 00:30:23,120
Speaker 5: Not that we have any guidebook here, but what do

566
00:30:23,120 --> 00:30:24,880
Speaker 5: you think are next steps from the authorities?

567
00:30:25,800 --> 00:30:28,640
Speaker 9: Well and interesting, the King had already indicated that if

568
00:30:28,680 --> 00:30:31,440
Speaker 9: this did become a police matter, that he would do

569
00:30:31,520 --> 00:30:34,040
Speaker 9: nothing to stand in the way of an indication. So

570
00:30:34,080 --> 00:30:37,720
Speaker 9: the statement follows on from that tone that was set earlier.

571
00:30:37,840 --> 00:30:42,520
Speaker 9: I think it's worth reminding ourselves what this investigation is

572
00:30:42,560 --> 00:30:45,440
Speaker 9: about the kind of rule that the former Prince Andrew

573
00:30:45,520 --> 00:30:49,000
Speaker 9: had as a UK trade envoy, the idea that as

574
00:30:49,120 --> 00:30:51,280
Speaker 9: you try and flag the fly the flag for British

575
00:30:51,360 --> 00:30:55,440
Speaker 9: business around the world, that you have a Prince as

576
00:30:55,440 --> 00:30:59,520
Speaker 9: he was then as a calling card with pulling power

577
00:30:59,560 --> 00:31:03,360
Speaker 9: to get foreign businessman into the room when he went

578
00:31:03,400 --> 00:31:06,440
Speaker 9: on a foreign trip. That was essentially the job he did,

579
00:31:06,560 --> 00:31:10,080
Speaker 9: and it was that there were questions in the media.

580
00:31:10,080 --> 00:31:12,520
Speaker 9: He got the nickname at that time Air Miles Andy

581
00:31:12,600 --> 00:31:15,520
Speaker 9: because people weren't sure quite the value to the taxpayer

582
00:31:15,520 --> 00:31:18,160
Speaker 9: that was being delivered by him flying around the world

583
00:31:18,200 --> 00:31:23,840
Speaker 9: in that way. But it's that aspect of his previous

584
00:31:24,800 --> 00:31:26,960
Speaker 9: role in the public eye that is at the heart

585
00:31:27,160 --> 00:31:31,040
Speaker 9: of this particular investigation because there are emails in the

586
00:31:31,080 --> 00:31:34,800
Speaker 9: Epstein files which appeared to show that he received, for example,

587
00:31:34,840 --> 00:31:38,000
Speaker 9: an official report on a visit overseas and he forwarded

588
00:31:38,000 --> 00:31:41,479
Speaker 9: it to Jeffrey Epstein within minutes. So trade envoys are

589
00:31:41,480 --> 00:31:44,040
Speaker 9: supposed to be under a duty of confidentiality. So that

590
00:31:44,520 --> 00:31:46,960
Speaker 9: is the specifics of what the police are looking into.

591
00:31:47,040 --> 00:31:50,080
Speaker 9: But of course we don't know where this investigation goes,

592
00:31:50,160 --> 00:31:56,520
Speaker 9: and it is a pr nightmare. It is reputationally personally

593
00:31:56,960 --> 00:32:01,400
Speaker 9: on every level. You can see the implication for the

594
00:32:01,480 --> 00:32:05,360
Speaker 9: royal family. So it's not just a development, it's a

595
00:32:05,400 --> 00:32:06,800
Speaker 9: real moment in the UK.

596
00:32:07,000 --> 00:32:10,280
Speaker 5: It is Michelle, do we know what rights former Prince

597
00:32:10,360 --> 00:32:14,760
Speaker 5: Andrew has is simply the rights of the average or

598
00:32:14,800 --> 00:32:18,760
Speaker 5: common English citizen. Is there anything different here in terms

599
00:32:18,760 --> 00:32:22,000
Speaker 5: of the type of treatment he'll receive? Do we know anything?

600
00:32:23,400 --> 00:32:26,640
Speaker 9: I think it's pretty clear from this development and from

601
00:32:26,680 --> 00:32:29,240
Speaker 9: the police statement is no different to the way that

602
00:32:29,600 --> 00:32:34,640
Speaker 9: that any other investigation would be portrayed, although they do

603
00:32:34,720 --> 00:32:38,520
Speaker 9: say we recognize the significant public interest in this case

604
00:32:38,560 --> 00:32:42,920
Speaker 9: and we will be issuing updates when appropriate. Now, one

605
00:32:44,040 --> 00:32:46,360
Speaker 9: aspect of this for the police is that in his

606
00:32:46,520 --> 00:32:48,200
Speaker 9: time as a member of the royal family and I

607
00:32:48,240 --> 00:32:52,120
Speaker 9: would think even now, Andrew would always have had personal

608
00:32:52,120 --> 00:32:56,600
Speaker 9: protection officers serving police officers with him. So the police

609
00:32:56,640 --> 00:33:00,120
Speaker 9: are also fielding those accusations of you know what, what

610
00:33:00,280 --> 00:33:02,840
Speaker 9: did those officers see or not see, or what should

611
00:33:02,840 --> 00:33:05,360
Speaker 9: they have seen or what should they have said? Given

612
00:33:06,000 --> 00:33:09,280
Speaker 9: the allegations that have surrounded him for some years now,

613
00:33:09,520 --> 00:33:13,720
Speaker 9: He's always denied any wrongdoing in relation to his association

614
00:33:14,320 --> 00:33:19,200
Speaker 9: with financier and convicted p Dephiro Jeffrey Epstein, but next

615
00:33:19,240 --> 00:33:21,600
Speaker 9: steps will be what we learned from this police investigation

616
00:33:21,680 --> 00:33:25,480
Speaker 9: in due course. And I should also say that he

617
00:33:25,600 --> 00:33:29,680
Speaker 9: is entitled to a fair trial if that is what

618
00:33:29,760 --> 00:33:31,560
Speaker 9: it comes to. I'm going to stress there are no

619
00:33:31,720 --> 00:33:34,880
Speaker 9: charges at this point. This is a police investigation, but

620
00:33:35,640 --> 00:33:39,400
Speaker 9: everyone will also be conscious those rights.

621
00:33:39,480 --> 00:33:39,880
Speaker 3: Michelle.

622
00:33:39,880 --> 00:33:42,240
Speaker 2: One final question to get on to your busy day

623
00:33:42,240 --> 00:33:46,000
Speaker 2: across America. This morning in our London officers, Michelle Husain

624
00:33:46,720 --> 00:33:51,240
Speaker 2: joins us here and the arrest of the former Prince Andrew.

625
00:33:51,440 --> 00:33:54,120
Speaker 2: I went to and Michelle, you know this encyclopedic I

626
00:33:54,160 --> 00:33:58,400
Speaker 2: have to use artificial intelligence and I typed in what

627
00:33:58,440 --> 00:34:03,200
Speaker 2: does Prince Williams twenty twenty six look like? And it

628
00:34:03,240 --> 00:34:06,680
Speaker 2: goes through the awards in Mumbai coming up later this year,

629
00:34:07,240 --> 00:34:09,919
Speaker 2: the royal warrants in the spring of this year. Things

630
00:34:10,000 --> 00:34:14,719
Speaker 2: I don't understand. And down at the bottom very quietly

631
00:34:15,000 --> 00:34:19,160
Speaker 2: is I think what Americans understand. Prince George will be

632
00:34:19,280 --> 00:34:24,600
Speaker 2: twelve in twenty twenty six. Michelle is saying the continuity

633
00:34:25,040 --> 00:34:28,919
Speaker 2: of the Royal family is they move forward with all

634
00:34:29,000 --> 00:34:30,520
Speaker 2: of this scandal out there.

635
00:34:32,840 --> 00:34:37,279
Speaker 9: You know one thing that they will be thinking that

636
00:34:37,520 --> 00:34:41,120
Speaker 9: was the right thing to do before this moment, and

637
00:34:41,200 --> 00:34:43,200
Speaker 9: I guess in the context they will be proud of

638
00:34:43,200 --> 00:34:47,000
Speaker 9: at this moment is the fact that his titles, his

639
00:34:47,080 --> 00:34:49,160
Speaker 9: position as the Duke of York, all of that was

640
00:34:49,160 --> 00:34:53,400
Speaker 9: removed back in November. So I think they will be

641
00:34:53,440 --> 00:34:57,640
Speaker 9: probably taking some heart from the fact that as an institution,

642
00:34:57,719 --> 00:34:59,960
Speaker 9: as the monarchy, as the royal family, as the soul

643
00:35:01,239 --> 00:35:04,680
Speaker 9: which King Charles is, that that action was taken a

644
00:35:04,719 --> 00:35:07,640
Speaker 9: couple of months ago now. But yes, you know, out

645
00:35:07,680 --> 00:35:10,240
Speaker 9: and about in the public eye in the ukl squere

646
00:35:11,400 --> 00:35:13,440
Speaker 9: they will have to be prepared for this coming up

647
00:35:13,480 --> 00:35:18,200
Speaker 9: in ways that they would not want. The royal schedules,

648
00:35:18,320 --> 00:35:22,759
Speaker 9: the protocol, the interactions that exist with the press where

649
00:35:22,760 --> 00:35:25,640
Speaker 9: they exist. They'd like these to be as carefully controlled

650
00:35:25,640 --> 00:35:27,879
Speaker 9: and on message as they could possibly be. And this

651
00:35:28,239 --> 00:35:31,120
Speaker 9: kind of situation adds a degree of unpredictability.

652
00:35:31,120 --> 00:35:33,560
Speaker 3: And Jeffardy, Michelle, thank you so much. It is the

653
00:35:33,600 --> 00:35:35,080
Speaker 3: Michelle Hussein Show. Look for that.

654
00:35:35,400 --> 00:35:40,239
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify

655
00:35:40,360 --> 00:35:44,120
Speaker 1: and anywhere else you get your podcasts. Listen live each

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00:35:44,160 --> 00:35:47,960
Speaker 1: weekday seven to ten am Easter and on Bloomberg dot Com,

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Speaker 1: the iHeartRadio app. Tune in and the Bloomberg Business App.

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Speaker 1: You can also watch us live every weekday on YouTube

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Speaker 1: and always on the Bloomberg terminal