1 00:00:03,680 --> 00:00:07,760 Speaker 1: This is Bloomberg Surveillance. FEDS focused on really two and 2 00:00:07,800 --> 00:00:10,440 Speaker 1: a half things. They're focused on jobs, they're focused on inflation, 3 00:00:10,440 --> 00:00:12,760 Speaker 1: and now they're focused on global financial conditions. As in 4 00:00:12,920 --> 00:00:16,360 Speaker 1: last August. There's a lot of talks session I think 5 00:00:16,480 --> 00:00:19,720 Speaker 1: is grossly exaggerated. The US is the largest economy of 6 00:00:19,720 --> 00:00:21,279 Speaker 1: the world, and we've got to be a good citizen. 7 00:00:21,400 --> 00:00:25,160 Speaker 1: But our goal is not to stabilize the Chinese stock market. 8 00:00:25,160 --> 00:00:29,440 Speaker 1: Bloomberg Surveillance your link to the world of economics, finance, 9 00:00:29,480 --> 00:00:33,320 Speaker 1: and investment on Bloomberg Radio. Good morning everyone, Trump, Keene 10 00:00:33,320 --> 00:00:36,720 Speaker 1: and Michael McKee. We welcome all of you Friday, Bloomberg Surveillance. 11 00:00:36,840 --> 00:00:40,279 Speaker 1: What a week it has been. Will continue the discussion here, 12 00:00:40,320 --> 00:00:42,560 Speaker 1: trying to frame the week frame where we are now 13 00:00:42,600 --> 00:00:46,440 Speaker 1: a better shape, get into the weekend, what's the weekend reading, 14 00:00:46,479 --> 00:00:48,920 Speaker 1: and then we get onto next week as well. I 15 00:00:49,000 --> 00:00:52,040 Speaker 1: we've just been told I may not be working on Monday, which, uh, 16 00:00:53,640 --> 00:00:56,120 Speaker 1: thanks why you for letting me know that I really 17 00:00:56,240 --> 00:00:58,080 Speaker 1: could have like I could have planned, like to do 18 00:00:58,160 --> 00:01:02,600 Speaker 1: my laundry or or what ever you know. Thank yeah, Well, 19 00:01:02,680 --> 00:01:04,560 Speaker 1: why he wants me to why you and folks might 20 00:01:04,560 --> 00:01:07,840 Speaker 1: producer this morning, wanted me to come in, uh this morning, 21 00:01:07,840 --> 00:01:13,400 Speaker 1: Futures up seventeen Dow futures up, risk on a little 22 00:01:13,560 --> 00:01:16,200 Speaker 1: fragile or if that's a word. That it was at 23 00:01:16,200 --> 00:01:18,480 Speaker 1: seven and six am this morning, but we'll take it. 24 00:01:18,480 --> 00:01:22,720 Speaker 1: It's a better tape this morning. Bloomberg Surveillance This Friday, 25 00:01:23,040 --> 00:01:27,320 Speaker 1: presented by Cone Resnick Accounting, Tax Advisory in the affordable 26 00:01:27,400 --> 00:01:32,640 Speaker 1: housing industry. Your business needs transformative advice from the industry 27 00:01:32,680 --> 00:01:36,480 Speaker 1: leading experts. Con Resnick. Find out why at Cone Resnick 28 00:01:36,840 --> 00:01:39,160 Speaker 1: dot com. C O H N R. E Z and 29 00:01:39,319 --> 00:01:42,679 Speaker 1: I C K Colon Resnick dot com. What a great 30 00:01:42,720 --> 00:01:46,480 Speaker 1: conversation with Michael McKee and Mickey Leady A baron your 31 00:01:46,560 --> 00:01:52,080 Speaker 1: capital markets, sort of a economic fed view. Let's switch 32 00:01:52,280 --> 00:01:56,000 Speaker 1: our perspective to make you smarter and have more insight 33 00:01:56,360 --> 00:01:59,800 Speaker 1: on what we've observed this week. Benjamin Emmons. Ben Emmons 34 00:02:00,200 --> 00:02:03,960 Speaker 1: is a leader capital an extinguished career at Pimco, including 35 00:02:04,000 --> 00:02:05,760 Speaker 1: writing like a book a Month or something. He was 36 00:02:05,800 --> 00:02:09,000 Speaker 1: part of the Book a Month Club. I'm finance and 37 00:02:09,040 --> 00:02:12,440 Speaker 1: I'm fixed income. In the dynamics that we see, the 38 00:02:12,480 --> 00:02:17,120 Speaker 1: Newtonian mechanics of yielding price across all that's going on 39 00:02:17,160 --> 00:02:20,400 Speaker 1: in Ben Emmon's to give us a briefing. Right now, Ben, 40 00:02:20,480 --> 00:02:23,960 Speaker 1: let me cut to the chase. If if prices up 41 00:02:24,040 --> 00:02:27,119 Speaker 1: and yield us down so much, is there a point 42 00:02:27,200 --> 00:02:30,079 Speaker 1: where you have to get out of fixed income because 43 00:02:30,080 --> 00:02:34,120 Speaker 1: it's just price to perfection? Good morning Tom, Wow, Yeah 44 00:02:34,440 --> 00:02:37,280 Speaker 1: you would say that, because I was kind of looking 45 00:02:37,280 --> 00:02:39,640 Speaker 1: at this this morning. So yields a bit up now, 46 00:02:39,880 --> 00:02:42,639 Speaker 1: and I found it extraordinary that we went through his 47 00:02:42,760 --> 00:02:45,240 Speaker 1: big fight to quality episode again and just like in 48 00:02:45,280 --> 00:02:49,920 Speaker 1: two thousand eight with distress and normally, what that happened 49 00:02:49,960 --> 00:02:52,400 Speaker 1: is that what they called urn premium, by the difference 50 00:02:52,400 --> 00:02:56,000 Speaker 1: between the yield and fishing expectations and short and interstage expectations, 51 00:02:56,400 --> 00:02:59,280 Speaker 1: that firm is actually positive. That's very different than previous 52 00:02:59,320 --> 00:03:01,960 Speaker 1: episodes when its negative. Not the words yields have then 53 00:03:02,040 --> 00:03:04,840 Speaker 1: fallen too much, and at some point in canalysts reverses 54 00:03:04,880 --> 00:03:08,359 Speaker 1: that that trend. So I think, you know, here here 55 00:03:08,400 --> 00:03:11,040 Speaker 1: we are at a point where positive term premium, any 56 00:03:11,120 --> 00:03:15,040 Speaker 1: kind of canalysts would actually indicate withversial quality. We got 57 00:03:15,160 --> 00:03:17,240 Speaker 1: to back up, folks. There was a massive level of 58 00:03:17,320 --> 00:03:19,800 Speaker 1: jargon there. It was like when Frank from Boz did 59 00:03:19,800 --> 00:03:24,639 Speaker 1: the alkal Seltzer commercial years ago. There are four components 60 00:03:24,880 --> 00:03:28,560 Speaker 1: of the yield curve just in the classic literature. One 61 00:03:28,560 --> 00:03:33,400 Speaker 1: of them, Lord Emmons, is the idea of term premium, 62 00:03:33,440 --> 00:03:36,800 Speaker 1: described that when when pros like you talk about the 63 00:03:36,880 --> 00:03:40,720 Speaker 1: dynamics of term premium, what are you talking about? Right? 64 00:03:40,760 --> 00:03:42,640 Speaker 1: So when I talk about is that you know, if 65 00:03:42,640 --> 00:03:46,240 Speaker 1: you buy a security fixing consecurity, there's the yield consistent 66 00:03:46,240 --> 00:03:48,920 Speaker 1: out of expectations for inflation as well as with short 67 00:03:49,000 --> 00:03:52,040 Speaker 1: term interest rates, and then there's some residual left off 68 00:03:52,160 --> 00:03:55,040 Speaker 1: that you can buy the security and anything that can happen, 69 00:03:55,560 --> 00:03:58,720 Speaker 1: you know, the volatility component in there too, and so 70 00:03:58,720 --> 00:04:01,400 Speaker 1: if those at uptick better, that gives you that yield. 71 00:04:01,480 --> 00:04:04,840 Speaker 1: So the term premium is really like this, this idea 72 00:04:04,880 --> 00:04:07,520 Speaker 1: of like this is this residual excess return that I'm 73 00:04:07,560 --> 00:04:11,120 Speaker 1: getting to buy a long term government bound or long 74 00:04:11,240 --> 00:04:14,800 Speaker 1: term fixed income security. So over time, this term premium 75 00:04:14,800 --> 00:04:18,719 Speaker 1: fluctuated the low um you know, as interesstrate expectations changed. 76 00:04:19,200 --> 00:04:21,520 Speaker 1: I think, as we are right now here, like we 77 00:04:21,560 --> 00:04:24,039 Speaker 1: had last year period of time with negative term premium 78 00:04:24,160 --> 00:04:26,760 Speaker 1: and then we sort of reversed that and long terministration 79 00:04:26,839 --> 00:04:29,240 Speaker 1: went up. We're now kind of an opposite situation, all 80 00:04:29,640 --> 00:04:32,599 Speaker 1: premium but with low rates. And my concern here is 81 00:04:32,640 --> 00:04:36,360 Speaker 1: is that this is probably mostly driven by inflation expectations 82 00:04:36,400 --> 00:04:39,920 Speaker 1: being way too low, driven by energy. So if any 83 00:04:40,000 --> 00:04:44,120 Speaker 1: energy reversal where that happened, you know, that would actually 84 00:04:44,200 --> 00:04:49,120 Speaker 1: then normalize inflation expectations, would drive interstrates up higher. And 85 00:04:49,160 --> 00:04:51,760 Speaker 1: that maybe that may be the case. That is one 86 00:04:51,920 --> 00:04:54,880 Speaker 1: outcome and one set of outcomes. What I want to know, 87 00:04:55,040 --> 00:04:56,479 Speaker 1: and folks were going to do a little bit of 88 00:04:56,480 --> 00:04:59,599 Speaker 1: newt in here the idea of in inertial force, we 89 00:04:59,720 --> 00:05:05,279 Speaker 1: once again driven down to low yields, high price low yields. 90 00:05:05,480 --> 00:05:08,440 Speaker 1: Is there an inertial force that here's a key phrase, 91 00:05:08,480 --> 00:05:13,440 Speaker 1: folks keeps us here? Or is it pointing and stochastic 92 00:05:13,880 --> 00:05:18,479 Speaker 1: where your experiences we leap down, find some yield and 93 00:05:18,480 --> 00:05:22,159 Speaker 1: then turn around and go the other way? Which is it? Well? 94 00:05:22,200 --> 00:05:23,960 Speaker 1: I think if I want to take it back for 95 00:05:24,000 --> 00:05:26,200 Speaker 1: a couple of days ago, when you spoke with William 96 00:05:26,240 --> 00:05:29,839 Speaker 1: White about this idea of this interest rate delusion that 97 00:05:29,880 --> 00:05:34,320 Speaker 1: you mentioned right where we are in this negative rate territory, 98 00:05:34,440 --> 00:05:37,000 Speaker 1: there's actually it's not clear what the floor on interest 99 00:05:37,040 --> 00:05:40,159 Speaker 1: rates really is, right, and so people are quite uncertain 100 00:05:40,200 --> 00:05:43,479 Speaker 1: about how they deep negative you can go. So I 101 00:05:43,520 --> 00:05:46,080 Speaker 1: think if that uncertainty sort of abates from that that 102 00:05:46,160 --> 00:05:49,760 Speaker 1: people see like, well, clearly markets are rejecting the negative 103 00:05:49,800 --> 00:05:52,960 Speaker 1: nominal interest rates being a good thing. And as that 104 00:05:53,360 --> 00:05:57,599 Speaker 1: gets rejected, probably the perceptions to like your negative nominal 105 00:05:57,640 --> 00:06:00,960 Speaker 1: interest rates enough, here's something that could stay that would 106 00:06:00,960 --> 00:06:05,120 Speaker 1: be a catalyst to this reversal of long term interesstrates 107 00:06:05,120 --> 00:06:08,640 Speaker 1: going up again. So I think that's one reason why. 108 00:06:08,640 --> 00:06:11,640 Speaker 1: And and the thing is too dominant that we know 109 00:06:11,800 --> 00:06:15,480 Speaker 1: that the fat wills go slow with its fat policy rate, 110 00:06:15,600 --> 00:06:18,680 Speaker 1: but it doesn't want to go up fast. But the 111 00:06:18,680 --> 00:06:21,720 Speaker 1: reverse of nominal negative rates is much faster than An 112 00:06:21,720 --> 00:06:25,039 Speaker 1: example of that was last year in Germany when negative 113 00:06:25,080 --> 00:06:28,320 Speaker 1: normal interest rates suddenly reversed really quickly and had left 114 00:06:28,360 --> 00:06:31,000 Speaker 1: to this huge jump in interest rate. And and I 115 00:06:31,120 --> 00:06:33,880 Speaker 1: was without the d CP signaling anything of a future 116 00:06:33,960 --> 00:06:36,360 Speaker 1: rate hike or something like that. So I think the 117 00:06:36,400 --> 00:06:39,039 Speaker 1: idea of these negative normal races, we have this discussion 118 00:06:39,040 --> 00:06:42,400 Speaker 1: this morning with different gas that you know, it's not 119 00:06:42,520 --> 00:06:46,440 Speaker 1: acceptable by by many, and so that reversal the negative 120 00:06:46,480 --> 00:06:49,279 Speaker 1: normal interstrate would be a big galyst for for rising 121 00:06:49,279 --> 00:06:51,680 Speaker 1: on the ministration. Okay, I want to pinion down on this. 122 00:06:51,800 --> 00:06:53,880 Speaker 1: Panamads and folks were not going to like go for 123 00:06:54,040 --> 00:06:57,200 Speaker 1: quotes or facts here, To be honest, it's wicked squishy research. 124 00:06:57,640 --> 00:07:00,320 Speaker 1: If I go to negative rates and I go point 125 00:07:00,320 --> 00:07:04,039 Speaker 1: one point two point three, if I go to Swedish 126 00:07:04,080 --> 00:07:08,400 Speaker 1: point seven point eight, it's a curved effect. It's a 127 00:07:08,480 --> 00:07:13,640 Speaker 1: quadratic function. It's a curved function with greater acceleration of 128 00:07:13,760 --> 00:07:18,960 Speaker 1: impulse into society. Do you have half a clue of 129 00:07:19,000 --> 00:07:23,920 Speaker 1: where the banks need to be where negative rates actually 130 00:07:24,080 --> 00:07:29,960 Speaker 1: affect banks or negative rates actually affect the people, the 131 00:07:30,160 --> 00:07:34,920 Speaker 1: citizens using those banks, right, and that that that level 132 00:07:34,960 --> 00:07:38,080 Speaker 1: of negative nominal rate is not clear what that fantise 133 00:07:38,200 --> 00:07:41,400 Speaker 1: level is. I think that we already are the impact 134 00:07:41,440 --> 00:07:44,080 Speaker 1: is already there through financial markets, that banks dogs are 135 00:07:44,120 --> 00:07:48,600 Speaker 1: down significantly because it's just simply a negative normal rate, 136 00:07:49,160 --> 00:07:52,480 Speaker 1: you know, crushes down that interest margin and people people 137 00:07:52,480 --> 00:07:54,960 Speaker 1: see there's are really a negative thing. But when it 138 00:07:55,000 --> 00:07:57,880 Speaker 1: comes down to the consumer how it will be passed 139 00:07:57,880 --> 00:08:00,920 Speaker 1: on that's not clear yet because the only thing that 140 00:08:00,960 --> 00:08:03,880 Speaker 1: we know so far again in the experience of countries 141 00:08:03,920 --> 00:08:07,000 Speaker 1: like Sweden, is that actually what happened was that that 142 00:08:07,080 --> 00:08:10,040 Speaker 1: there was more and a property bubble appearing right as 143 00:08:10,080 --> 00:08:13,800 Speaker 1: a result of this negative nominal rate. And uh and 144 00:08:13,880 --> 00:08:16,520 Speaker 1: so it means that people are doing something with money 145 00:08:16,800 --> 00:08:19,360 Speaker 1: in hard assets as opposed to keeping it in the bank. 146 00:08:19,880 --> 00:08:22,320 Speaker 1: So if if Sweden is our benchmarks will speak, then 147 00:08:22,360 --> 00:08:25,400 Speaker 1: that negative point five, you know, that's probably you know, 148 00:08:25,640 --> 00:08:28,640 Speaker 1: a really potential floor on on that on that number, 149 00:08:28,800 --> 00:08:32,520 Speaker 1: you know, if you're seeing property bubbles appearing. But again, 150 00:08:32,559 --> 00:08:34,560 Speaker 1: as I said, as you mentioned a few days ago, 151 00:08:34,600 --> 00:08:37,559 Speaker 1: two this is illusion, right, we don't really know what 152 00:08:37,679 --> 00:08:42,040 Speaker 1: the real floor and interest rates than so every chin 153 00:08:42,120 --> 00:08:46,520 Speaker 1: that's mentioned on here, folks, I get fourth cents. Yeah, 154 00:08:46,600 --> 00:08:49,400 Speaker 1: So so I think that the nominal the floor is 155 00:08:49,440 --> 00:08:53,400 Speaker 1: not clear. So to your question is that how will 156 00:08:53,679 --> 00:08:57,560 Speaker 1: bubble be that rate for for ultimately consumers to be 157 00:08:57,600 --> 00:08:59,800 Speaker 1: impacted that they're going to do something with the cash 158 00:08:59,840 --> 00:09:04,160 Speaker 1: and economy. But you know that that that that's the 159 00:09:04,240 --> 00:09:07,040 Speaker 1: idea from central bankers to incentifize people to do something 160 00:09:07,040 --> 00:09:10,760 Speaker 1: with cash. Is claire only market the idea that's that's 161 00:09:10,800 --> 00:09:14,360 Speaker 1: the issue. To Havre al Ben Emmons speaking and listening 162 00:09:14,360 --> 00:09:18,400 Speaker 1: in Germany, as Mr Schoeibler, I'm kidding folks. Greek Stabilization 163 00:09:18,480 --> 00:09:21,880 Speaker 1: Fund must be ready before reviews. Shoibla Greek must meet 164 00:09:21,880 --> 00:09:25,120 Speaker 1: its program obligations. What is this a flashback to eighteen 165 00:09:25,120 --> 00:09:29,840 Speaker 1: months ago? Choibla Eurogroup or Portugal for more reforms if needed. 166 00:09:30,400 --> 00:09:34,520 Speaker 1: Choibla EU stability pack must be reliably applied. I think 167 00:09:34,559 --> 00:09:36,719 Speaker 1: I just had a you know, fashion Michael Barr was 168 00:09:36,800 --> 00:09:39,360 Speaker 1: so different at the end of two thousand fourteen. My 169 00:09:39,440 --> 00:09:43,800 Speaker 1: bow ties were totally different that these headlines were out there, 170 00:09:44,040 --> 00:09:46,840 Speaker 1: and that's really underscores, folks. What's changed this week, which 171 00:09:46,840 --> 00:09:50,000 Speaker 1: is all of a sudden the adjacent Caesar upon it's 172 00:09:50,040 --> 00:09:55,360 Speaker 1: peripheral Europe again becoming important this week with better spreadsh 173 00:09:55,440 --> 00:09:59,959 Speaker 1: this morning. But um, the Choibler headlines seriously, um really 174 00:10:00,080 --> 00:10:05,079 Speaker 1: showing the um the spreading out of financial crisis away 175 00:10:05,080 --> 00:10:08,280 Speaker 1: from a focal point of a given major center bank 176 00:10:08,280 --> 00:10:11,280 Speaker 1: will continue with Ben Edwards with leader capital here in 177 00:10:11,320 --> 00:10:15,840 Speaker 1: a moment. Futures UM futures are up twenty. They've given 178 00:10:15,880 --> 00:10:18,320 Speaker 1: that back. I still want to be optimistic green on 179 00:10:18,360 --> 00:10:22,439 Speaker 1: the screen, but less so than we were an hour ago, 180 00:10:23,000 --> 00:10:28,480 Speaker 1: up fourteen doll futures up nineties seven West Texas intermediate 181 00:10:30,240 --> 00:10:33,719 Speaker 1: dollar twenty two Brent crude pulling back a little bit 182 00:10:33,720 --> 00:10:37,000 Speaker 1: thirty one thirty Golden was negative nine dollars right now 183 00:10:37,080 --> 00:10:39,920 Speaker 1: negative six dollars, So just a little bit pull away 184 00:10:39,920 --> 00:10:43,600 Speaker 1: from the risk gun trade. Mexican pace So has my attention. 185 00:10:44,200 --> 00:10:51,719 Speaker 1: Nineteen point one nine on dollar pace So and now 186 00:10:51,760 --> 00:10:54,520 Speaker 1: for our news from New York City, here's Michael bark John, 187 00:10:54,559 --> 00:10:57,079 Speaker 1: thank you very much. The World Health Organizations as a 188 00:10:57,160 --> 00:11:01,199 Speaker 1: possible Zeke vaccine is at least eighteen months away from 189 00:11:01,280 --> 00:11:04,480 Speaker 1: large scale trials. The w h O also says it's 190 00:11:04,480 --> 00:11:07,640 Speaker 1: becoming more and more likely that there is a link 191 00:11:07,720 --> 00:11:11,480 Speaker 1: between the mosquito born virus and abnormally small heads in 192 00:11:11,640 --> 00:11:15,520 Speaker 1: some newborn children. Secretary of State John Kerry says significant 193 00:11:15,520 --> 00:11:19,080 Speaker 1: accomplishments have been made in Syria truce talks in Munich, 194 00:11:19,120 --> 00:11:22,560 Speaker 1: but much more work must be done to achieve a 195 00:11:22,600 --> 00:11:26,680 Speaker 1: full fledged ceasefire. Diplomats from the US, Russia and other 196 00:11:26,720 --> 00:11:29,439 Speaker 1: powers have agreed to try to work out the tales 197 00:11:29,640 --> 00:11:33,360 Speaker 1: and implement a temporary cessation of hostilities by the end 198 00:11:33,400 --> 00:11:36,360 Speaker 1: of next week. Hillary Clinton accused of Bernie Sanders a 199 00:11:36,400 --> 00:11:39,800 Speaker 1: diminishing President Obama's record in the White House. Sanders called 200 00:11:39,840 --> 00:11:42,720 Speaker 1: that a low blow. Clinton and Sanders held their debate 201 00:11:42,880 --> 00:11:46,680 Speaker 1: last night in Milwaukee. Global News twenty four hours a day, 202 00:11:46,720 --> 00:11:49,880 Speaker 1: powered by our twenty four hundred journalists and more than 203 00:11:49,920 --> 00:11:52,480 Speaker 1: a hundred fifty news bureaus from around the world. I'm 204 00:11:52,520 --> 00:11:55,400 Speaker 1: Michael Barr, Tom Michael, thanks so much of the yen 205 00:11:55,800 --> 00:12:00,959 Speaker 1: one twelve sixty seven weaker. After a brute Asian morning, 206 00:12:01,000 --> 00:12:07,200 Speaker 1: stay with US Bloomberg Surveillance. The news update has brought 207 00:12:07,200 --> 00:12:09,600 Speaker 1: you by your Mercedes Benz Tri State Dealer. When it 208 00:12:09,640 --> 00:12:12,800 Speaker 1: comes to winter elements, put your best four wheels forward 209 00:12:12,800 --> 00:12:16,600 Speaker 1: with Mercedes Benz Formatic All Wheel Drive. Visit your Mercedes 210 00:12:16,600 --> 00:12:22,120 Speaker 1: Ben's Tri State dealer for a test drive. Today. Global 211 00:12:22,160 --> 00:12:25,520 Speaker 1: Business News twenty four hours a day, if Bloomberg dot Com, 212 00:12:25,760 --> 00:12:28,520 Speaker 1: the Radio plus Mobile Act and on your radio. This 213 00:12:29,000 --> 00:12:32,680 Speaker 1: is a Bloomberg Business Flash and I'm Cameron Moscow. US 214 00:12:32,760 --> 00:12:36,040 Speaker 1: dot Index futures are rising in line with European equities 215 00:12:36,040 --> 00:12:38,320 Speaker 1: and oil prices. And let's go to the First Word 216 00:12:38,360 --> 00:12:41,640 Speaker 1: Breaking news desk for today's morning call. Here's Bill Maloney. 217 00:12:41,679 --> 00:12:45,000 Speaker 1: Good morning, Bill, Good morning Karen us. You just are 218 00:12:45,120 --> 00:12:47,800 Speaker 1: trading higher after yesterday sell off. Doubt if you just 219 00:12:47,840 --> 00:12:50,160 Speaker 1: currently hired by a hundred and three points Sesames Game 220 00:12:50,240 --> 00:12:53,440 Speaker 1: fourteen and as a futures rise by the U S 221 00:12:53,440 --> 00:12:56,559 Speaker 1: tennial at one point six eight percent over night, and 222 00:12:56,640 --> 00:12:59,880 Speaker 1: Asian markets and EK fell four point eight percent. Shan 223 00:13:00,040 --> 00:13:03,400 Speaker 1: High reopens on Monday. Main Uka markets are rising, led 224 00:13:03,400 --> 00:13:06,480 Speaker 1: by two point three percent gains in Italy. Commerce Bank 225 00:13:06,559 --> 00:13:09,800 Speaker 1: jump fifteen percent in Germany after results well, Deutsche Bank 226 00:13:09,960 --> 00:13:13,200 Speaker 1: is trading higher by eight percent on the US economic 227 00:13:13,280 --> 00:13:16,000 Speaker 1: front at a thirty import price in decks and retail 228 00:13:16,040 --> 00:13:20,040 Speaker 1: sales at ten o'clock. Business inventories in Michigan sentiment estimate 229 00:13:20,160 --> 00:13:23,480 Speaker 1: nine two point three after the bells night Win Resorts 230 00:13:23,520 --> 00:13:26,720 Speaker 1: EPs beat estimates and a i g Q for operating 231 00:13:26,760 --> 00:13:29,959 Speaker 1: loss was wider than estimates. Also added a five billion 232 00:13:29,960 --> 00:13:32,880 Speaker 1: dollar buy back and boosted its divid end. And then 233 00:13:32,920 --> 00:13:35,240 Speaker 1: there's Jamie Diamond bought half a million shares of JP 234 00:13:35,400 --> 00:13:38,600 Speaker 1: Morgan yesterday and bet g i G says Square maybe 235 00:13:38,600 --> 00:13:42,040 Speaker 1: a takeout target after Visa bought a steak finding some 236 00:13:42,120 --> 00:13:44,480 Speaker 1: of your Q walls sheet upgrades and downgrades. This morning, 237 00:13:44,720 --> 00:13:47,360 Speaker 1: Contager Foods raised to buy a Bank of America at 238 00:13:47,400 --> 00:13:51,400 Speaker 1: Deutsche Bank Quintiles and Equifax raised to buy, Netflix, cut 239 00:13:51,440 --> 00:13:55,000 Speaker 1: to market, perform at FBR at JP, Morgan Bungey raised 240 00:13:55,000 --> 00:13:58,520 Speaker 1: to overweight, Boeing cut to neutral, and finally Bedbeth and 241 00:13:58,559 --> 00:14:01,960 Speaker 1: Beyond cut to market for four at Oppenheimer Live on 242 00:14:01,960 --> 00:14:04,920 Speaker 1: the First Breaking News Desk on Bill Maloney, care right, 243 00:14:04,960 --> 00:14:06,760 Speaker 1: thanks to Bill and to hear live breaking news over 244 00:14:06,800 --> 00:14:09,640 Speaker 1: your Bloomberg type squawk go on your terminal. That's squ 245 00:14:10,000 --> 00:14:13,200 Speaker 1: a w K go and that's a Bloomberg business flash. 246 00:14:13,280 --> 00:14:17,040 Speaker 1: Tom and Mike Karen, thank you so much. Many headlines 247 00:14:17,080 --> 00:14:20,960 Speaker 1: out of Germany right now, Merkel and Schable talking it up. Mike. 248 00:14:21,040 --> 00:14:24,760 Speaker 1: There are Germain headlines there the Finance Minister Deutsche Bank 249 00:14:25,040 --> 00:14:29,520 Speaker 1: has enough capital, Deutsche Bank is resilient, well positioned. Mike, 250 00:14:29,520 --> 00:14:34,080 Speaker 1: please read the last headline. Well you've got saying Deutsche 251 00:14:34,080 --> 00:14:38,400 Speaker 1: Bank is a strong bank. If you've got to ask, 252 00:14:39,400 --> 00:14:41,360 Speaker 1: we were we were. I was just out on the 253 00:14:41,640 --> 00:14:43,360 Speaker 1: Bloomberg ghost set and they were playing some of the 254 00:14:44,400 --> 00:14:46,640 Speaker 1: bank analysts that they hit interviewed during the week more 255 00:14:46,680 --> 00:14:49,120 Speaker 1: and said the name is on the door. So the 256 00:14:49,160 --> 00:14:53,200 Speaker 1: government will take care of Deutsche Bank, um whether or 257 00:14:53,200 --> 00:14:56,960 Speaker 1: not they actually get any aid. Investors are liking it. 258 00:14:57,400 --> 00:15:01,400 Speaker 1: The stock in euros up seven point six. Yeah, some 259 00:15:01,520 --> 00:15:04,560 Speaker 1: nice move here of recovery. I would point out, folks, 260 00:15:04,640 --> 00:15:07,040 Speaker 1: we do not give opinions, and what world leaders are 261 00:15:07,040 --> 00:15:11,000 Speaker 1: gonna do. Much of the literature today is quite clear, 262 00:15:11,760 --> 00:15:14,960 Speaker 1: uh that, uh, the jaw boning has begun. What do 263 00:15:14,960 --> 00:15:17,600 Speaker 1: you got over there, Michael, headline saying Deutsche Bank has 264 00:15:17,720 --> 00:15:21,280 Speaker 1: enough capital? Now, that's the key headline. That's what people 265 00:15:21,360 --> 00:15:24,600 Speaker 1: want to know. They're afraid that Deutscha might not be 266 00:15:24,720 --> 00:15:29,120 Speaker 1: able to which brings us to our guest Ben Emmons, 267 00:15:29,120 --> 00:15:32,560 Speaker 1: who among a series of really important and usable books 268 00:15:32,600 --> 00:15:36,800 Speaker 1: the financial domino effect. Ben, what's the domino level here? 269 00:15:37,240 --> 00:15:40,280 Speaker 1: Is German leaders jaw bone to you as a bond 270 00:15:40,320 --> 00:15:44,200 Speaker 1: guy set up sequences between a given bank A and 271 00:15:44,280 --> 00:15:48,440 Speaker 1: bank c F and Q. Right, So I thanks behind. 272 00:15:48,480 --> 00:15:50,840 Speaker 1: I think that because what we actually probably went through 273 00:15:50,880 --> 00:15:54,240 Speaker 1: watch that sort of domino idea. The fact that a 274 00:15:54,320 --> 00:15:57,800 Speaker 1: number of days ago Credit sweet Smiths tranings that all 275 00:15:57,800 --> 00:16:01,480 Speaker 1: that exactly so so as became unclear whether Deutsche Bank 276 00:16:01,600 --> 00:16:03,640 Speaker 1: could actually pay off some of his co co bounds 277 00:16:03,720 --> 00:16:05,440 Speaker 1: right so to speak. You know, it left to this 278 00:16:05,520 --> 00:16:08,080 Speaker 1: cascading effect that maybe all the other banks are dealing 279 00:16:08,080 --> 00:16:11,320 Speaker 1: with this issue too. I think that's really ironic. Actually, 280 00:16:11,360 --> 00:16:13,760 Speaker 1: if you if all these banks has done so much 281 00:16:13,840 --> 00:16:16,320 Speaker 1: effort to de lever and build up capital and they've 282 00:16:16,360 --> 00:16:18,680 Speaker 1: issued death too, you know, that's part of that capital 283 00:16:18,720 --> 00:16:21,200 Speaker 1: that's suddenly that that is no longer being seen as 284 00:16:21,280 --> 00:16:24,080 Speaker 1: something good, but it's it's a it's a negative, and 285 00:16:24,160 --> 00:16:28,240 Speaker 1: that then has the spiral effect since your financial domino effect, 286 00:16:28,320 --> 00:16:31,000 Speaker 1: because what it did was that the pressure down global 287 00:16:31,040 --> 00:16:35,240 Speaker 1: equity markets and drove down bound yields and cause volatility. 288 00:16:35,680 --> 00:16:37,640 Speaker 1: What you're seeing, maybe he would shovel, is more the 289 00:16:37,640 --> 00:16:41,000 Speaker 1: political aspect of it. The political domino is more about 290 00:16:41,040 --> 00:16:43,600 Speaker 1: well you get the job owning and as my ex 291 00:16:43,600 --> 00:16:46,760 Speaker 1: sense actually, as he says, a strong bank that's sort 292 00:16:46,760 --> 00:16:49,600 Speaker 1: of your you know, maybe your moral moral hazard idea, 293 00:16:49,680 --> 00:16:52,720 Speaker 1: like you know, we're backing Deutsche Bank right if if anything, 294 00:16:53,280 --> 00:16:55,240 Speaker 1: we're going to do what it takes to keep these 295 00:16:55,280 --> 00:16:58,160 Speaker 1: these banks afloat because they know that Deutsche Bank is 296 00:16:58,160 --> 00:17:02,200 Speaker 1: a major, major systad make important institutions for the German economy. 297 00:17:02,600 --> 00:17:05,680 Speaker 1: And that's sort of the response maybe byotors to that 298 00:17:05,680 --> 00:17:09,200 Speaker 1: that people are going to step up. Political political figure 299 00:17:09,200 --> 00:17:12,879 Speaker 1: step up to say, well, banks are resilience, that rock solid, 300 00:17:12,920 --> 00:17:15,600 Speaker 1: so to speak. So I think that's that there's a link, 301 00:17:15,600 --> 00:17:19,280 Speaker 1: which is do say that this dominant idea, it tends 302 00:17:19,320 --> 00:17:21,480 Speaker 1: to at some point just play out in an extreme 303 00:17:21,560 --> 00:17:23,080 Speaker 1: and I think that's what we went through just a 304 00:17:23,119 --> 00:17:25,919 Speaker 1: few days. Why maybe today, you know, we're seeing some 305 00:17:25,960 --> 00:17:29,879 Speaker 1: sort of versail. Hopefully data at five thirty comes out 306 00:17:29,920 --> 00:17:32,199 Speaker 1: a little bit better, will be not a catalyst, but 307 00:17:32,440 --> 00:17:34,320 Speaker 1: that tends to be the case. Right, the dominant effects 308 00:17:34,359 --> 00:17:37,040 Speaker 1: starts and it's something unknown and keptst an extreme and 309 00:17:37,040 --> 00:17:39,280 Speaker 1: then it then it disappears. Well, this is what markets 310 00:17:39,320 --> 00:17:42,600 Speaker 1: are supposed to do. I mean, if your institution isn't 311 00:17:42,680 --> 00:17:46,919 Speaker 1: up to standards, they should put pressure on it. But 312 00:17:47,280 --> 00:17:49,560 Speaker 1: the problem is the timing. When the rest of the 313 00:17:49,600 --> 00:17:53,560 Speaker 1: world is, you know, in full panic mode. It doesn't 314 00:17:53,600 --> 00:17:57,719 Speaker 1: help to um to have these kind of problems, correct. 315 00:17:57,760 --> 00:18:00,640 Speaker 1: I think the markets is like a referee. They they 316 00:18:00,760 --> 00:18:05,120 Speaker 1: you know, they put discipline on on establishment to make 317 00:18:05,240 --> 00:18:08,520 Speaker 1: changes in case you know, there's there's just real concerns 318 00:18:08,560 --> 00:18:10,960 Speaker 1: about the health of a bank or the health of 319 00:18:10,960 --> 00:18:14,520 Speaker 1: of a government. And then indeed the necessary status aren't 320 00:18:14,560 --> 00:18:17,560 Speaker 1: taking as a result of this market volatility. I mean 321 00:18:17,760 --> 00:18:20,359 Speaker 1: that happened actually some to some extent, yes, and yelling 322 00:18:20,520 --> 00:18:23,800 Speaker 1: testimony to add a lot of like concerns about market 323 00:18:23,880 --> 00:18:26,360 Speaker 1: volatility that would impact economy. What is it fact going 324 00:18:26,400 --> 00:18:30,119 Speaker 1: to do the same idea, which, by the way, I 325 00:18:30,119 --> 00:18:32,520 Speaker 1: think on that point it was not clear really what 326 00:18:32,560 --> 00:18:34,680 Speaker 1: the fact will do against that. But in the case 327 00:18:34,720 --> 00:18:37,639 Speaker 1: of here with banks, is it that politicians step forward 328 00:18:38,240 --> 00:18:41,040 Speaker 1: because the market puts discipline on them to say, well, 329 00:18:41,160 --> 00:18:44,000 Speaker 1: you know, we'll back we'll make changes here, right, will 330 00:18:44,040 --> 00:18:47,520 Speaker 1: will back the banks that will make changes, Ben Evons, 331 00:18:47,520 --> 00:18:50,840 Speaker 1: thank you so much, greatly, thank you. Look at this 332 00:18:51,800 --> 00:18:54,679 Speaker 1: now what judge bank going to the market. Oh there 333 00:18:54,680 --> 00:18:57,399 Speaker 1: are those folks. These are serious headlines. Mike, help us 334 00:18:57,400 --> 00:19:02,240 Speaker 1: with this and a shootout are reporting a public they're 335 00:19:02,240 --> 00:19:05,000 Speaker 1: gonna buy back debt, which this is what they did 336 00:19:05,080 --> 00:19:08,560 Speaker 1: talk about this the other day. UM buying back some 337 00:19:08,640 --> 00:19:12,760 Speaker 1: of their outstanding debt three billion dollar three billion euros 338 00:19:13,600 --> 00:19:17,840 Speaker 1: debt buy back of senior unsecured debt UM and in 339 00:19:17,920 --> 00:19:21,159 Speaker 1: a statement they say their strong liquidit position allows the 340 00:19:21,160 --> 00:19:23,679 Speaker 1: buy back, as you mentioned, to stop shooting up. It 341 00:19:23,840 --> 00:19:28,080 Speaker 1: is now ten percent higher in euro terms in early 342 00:19:28,200 --> 00:19:31,160 Speaker 1: U S trading it's nine percent higher cross the board. 343 00:19:31,240 --> 00:19:34,240 Speaker 1: Risk on the futures went plus thirteen to plus sixteen 344 00:19:34,240 --> 00:19:39,120 Speaker 1: in a heartbeat. Yields higher West Texas higher, seventy Brent 345 00:19:39,200 --> 00:19:42,320 Speaker 1: crewed back to thirty one fifty. Will watch Golden see 346 00:19:42,880 --> 00:19:45,960 Speaker 1: what that does in terms of price. Still eight dollars baron. 347 00:19:46,000 --> 00:19:49,000 Speaker 1: This are just out. These headlines have barely been digested 348 00:19:49,480 --> 00:19:51,680 Speaker 1: by the market. Yes, the En weaker as well. One 349 00:19:51,720 --> 00:19:56,840 Speaker 1: T seventy nine Again Deutsche Bank acts on the speculation 350 00:19:56,880 --> 00:20:00,280 Speaker 1: of earlier this week, Deutsche Bank to buy back at 351 00:20:01,400 --> 00:20:07,480 Speaker 1: a public tender. Stay with the Bloomberg surveilance coming up 352 00:20:07,520 --> 00:20:09,520 Speaker 1: there with all due respect. Highlight brought you by land Rover. 353 00:20:09,600 --> 00:20:11,320 Speaker 1: If it's in your nature to cast off the every 354 00:20:11,359 --> 00:20:13,800 Speaker 1: day and seek adventure, the Discovery Sport was built to 355 00:20:13,800 --> 00:20:15,879 Speaker 1: help your search. Visit Landrover tri state dot com for 356 00:20:15,880 --> 00:20:18,639 Speaker 1: special offers during the only Adventure Sales event. Land Rover 357 00:20:18,760 --> 00:20:26,719 Speaker 1: Above and Beyond broadcasting live to New York, Gloomberg eleventh 358 00:20:26,840 --> 00:20:31,640 Speaker 1: Rio to Washington, d C, Bloomberg to Boston, Bloomberg twelve 359 00:20:31,720 --> 00:20:36,399 Speaker 1: hundreds to San Francisco, Bloomberg to the Country Series Exam 360 00:20:36,520 --> 00:20:39,920 Speaker 1: Channel one ninety and around the Globe, the Bloomberg Radio 361 00:20:40,000 --> 00:20:44,520 Speaker 1: plus Aben Bloomberg dot Com. This is Bloomberg Surveillance. Good 362 00:20:44,560 --> 00:20:46,520 Speaker 1: Morning at A thirty I by com McKee along with 363 00:20:46,600 --> 00:20:50,080 Speaker 1: Tom Keene Economic Indicators brought to you by Commonwealth Financial Network. 364 00:20:50,359 --> 00:20:52,800 Speaker 1: When it's time to change the conversation, talk with a 365 00:20:52,840 --> 00:20:55,080 Speaker 1: broker dealer r I A that's ready to listen call 366 00:20:55,160 --> 00:20:57,840 Speaker 1: eight six six four six two three six three eight 367 00:20:57,920 --> 00:21:01,679 Speaker 1: or visit Commonwealth dot com to learned more of Vinydale Judais. 368 00:21:01,800 --> 00:21:06,520 Speaker 1: We have retail sales out The American consumer comes through again, Yes, 369 00:21:06,760 --> 00:21:10,600 Speaker 1: spending money Michael up point two percent in January, topping 370 00:21:10,600 --> 00:21:14,800 Speaker 1: forecasts at point one percent increase moreover. December had been 371 00:21:14,880 --> 00:21:18,760 Speaker 1: initially reported as a decline. Now it's reported revised as 372 00:21:18,800 --> 00:21:22,480 Speaker 1: an increase, up point two percent. The control group retail 373 00:21:22,520 --> 00:21:26,800 Speaker 1: sales Control Group, which excludes a lot of the volatility, 374 00:21:27,080 --> 00:21:30,440 Speaker 1: up point six percent, twice what economists we're looking for, 375 00:21:30,720 --> 00:21:34,520 Speaker 1: so generally speaking, some strong data on retail sales today. 376 00:21:34,600 --> 00:21:38,760 Speaker 1: Inflation numbers, Import price index keeps falling down one point 377 00:21:38,760 --> 00:21:41,879 Speaker 1: one percent month over month, down six point two percent 378 00:21:42,000 --> 00:21:44,959 Speaker 1: year over year. Again, retail sales the control group as 379 00:21:45,000 --> 00:21:48,680 Speaker 1: well both up import price index down. First word, desk, 380 00:21:49,720 --> 00:21:51,080 Speaker 1: lets go back to New York. Hey, let me just 381 00:21:51,119 --> 00:21:54,800 Speaker 1: add to the two tens percent gain, if you take 382 00:21:54,840 --> 00:21:58,040 Speaker 1: out gasoline, which fell three percent, you have a four 383 00:21:58,080 --> 00:22:02,200 Speaker 1: tens percent gain. So it's really um. It's the gasoline 384 00:22:02,200 --> 00:22:04,359 Speaker 1: has been falling, but Americans are spending the rest of 385 00:22:04,400 --> 00:22:07,400 Speaker 1: the money and revisions are pretty good. I don't want 386 00:22:07,400 --> 00:22:09,840 Speaker 1: to pay any constructive picture. We need to do a 387 00:22:09,920 --> 00:22:12,240 Speaker 1: data check into Christopher Wheeler. Mike, I'm gonna have you 388 00:22:12,320 --> 00:22:15,200 Speaker 1: bring in uh Chris Wheeler, who has been of such 389 00:22:15,240 --> 00:22:17,720 Speaker 1: help in this crisis. But you need to know more 390 00:22:17,840 --> 00:22:21,159 Speaker 1: risk on folks. We were up twenty up thirteen, the 391 00:22:21,200 --> 00:22:25,880 Speaker 1: Deutsche Bank announcement, up twenty now higher future prices, Yen 392 00:22:26,000 --> 00:22:29,080 Speaker 1: weeker a one thirteen on the end. That's three big 393 00:22:29,119 --> 00:22:33,560 Speaker 1: figures over the last twelve hours of trading for yen, 394 00:22:33,720 --> 00:22:36,600 Speaker 1: the ten ure yield one point six nine uh percent, 395 00:22:36,640 --> 00:22:39,959 Speaker 1: and Mike McKee even oil celebrates up a dollar sixty 396 00:22:39,960 --> 00:22:44,600 Speaker 1: seven seven. Well, it is definitely a turnaround day. And 397 00:22:44,960 --> 00:22:49,600 Speaker 1: Deutsche Bank doing what had been suggested earlier in the week. 398 00:22:49,640 --> 00:22:53,520 Speaker 1: They're gonna buy back Dad tender offer open for seven 399 00:22:53,560 --> 00:22:58,439 Speaker 1: business days uh three billion euros in debt two billion 400 00:22:58,440 --> 00:23:02,639 Speaker 1: euros for US dollar denominated dead Chris Wheeler is a 401 00:23:02,800 --> 00:23:06,280 Speaker 1: banking analyst for Atlantic equities and it's not a surprise 402 00:23:06,440 --> 00:23:08,520 Speaker 1: this was talked about, but it does seem to be 403 00:23:08,560 --> 00:23:12,720 Speaker 1: having a very salutary effect on Deutsche Bank shares in 404 00:23:12,720 --> 00:23:15,439 Speaker 1: the banking industry in general. Yes, I mean I think 405 00:23:15,480 --> 00:23:17,159 Speaker 1: when they announced it or they touched on it on 406 00:23:17,200 --> 00:23:21,199 Speaker 1: Tuesday morning after Monday's debacle, obviously that did helped the 407 00:23:21,240 --> 00:23:24,399 Speaker 1: stock stabilized and bounced back a little bit we had 408 00:23:24,480 --> 00:23:27,720 Speaker 1: yesterday's decline. I think what they wanted to say show 409 00:23:27,840 --> 00:23:29,720 Speaker 1: was this was not just them putting on a show 410 00:23:29,760 --> 00:23:32,000 Speaker 1: and saying they might do something. They've now come out 411 00:23:32,040 --> 00:23:33,840 Speaker 1: and said, we are going to buy back these these 412 00:23:33,880 --> 00:23:37,119 Speaker 1: bonds that we can they're training just below par, and 413 00:23:37,160 --> 00:23:40,240 Speaker 1: we'll make a gain that will go to shareholder funds 414 00:23:40,240 --> 00:23:42,320 Speaker 1: and boost our capital and put and obviously has to 415 00:23:42,359 --> 00:23:46,960 Speaker 1: set our profitability. It's I mean, three billion euros is 416 00:23:47,000 --> 00:23:51,560 Speaker 1: not that much additional capital. H Is this more about 417 00:23:51,640 --> 00:23:57,640 Speaker 1: psychology than it is actually about a firewall against problems? Yes, 418 00:23:57,720 --> 00:23:59,840 Speaker 1: you're you're lying. I mean what they what they're saying 419 00:23:59,840 --> 00:24:01,919 Speaker 1: that est of lease. I'm just leading here is the 420 00:24:01,920 --> 00:24:05,679 Speaker 1: bank's strong liquidity position allows it to do these purchases. 421 00:24:06,000 --> 00:24:08,240 Speaker 1: So this is them saying, look, we have about thirty 422 00:24:08,280 --> 00:24:13,000 Speaker 1: billion of outstanding senior unsecured debt. We're going after all, 423 00:24:13,040 --> 00:24:16,320 Speaker 1: we're tendling for about five billion adding with dollars in 424 00:24:16,320 --> 00:24:19,000 Speaker 1: the eulos lages. Um As you say, it's not going 425 00:24:19,040 --> 00:24:21,679 Speaker 1: to make them a fortune, but it's demonstrating they have 426 00:24:21,760 --> 00:24:24,440 Speaker 1: over two hundred billion of cash on their balance sheet 427 00:24:24,480 --> 00:24:26,840 Speaker 1: and they're trying to calm the market and push away 428 00:24:26,880 --> 00:24:29,600 Speaker 1: some of obviously the bare laders they've had to do with. 429 00:24:31,440 --> 00:24:33,680 Speaker 1: Look christ where we are the two model of the 430 00:24:33,720 --> 00:24:37,640 Speaker 1: week and this constructive announcements surely front run by Mr 431 00:24:37,760 --> 00:24:40,679 Speaker 1: Choibler's comments earlier. You had to believe he knew what 432 00:24:40,760 --> 00:24:45,800 Speaker 1: was coming. Can you say crisis over No, I don't 433 00:24:45,800 --> 00:24:48,200 Speaker 1: think so. I think it's it's like we've seen perhaps 434 00:24:48,240 --> 00:24:51,359 Speaker 1: in past license whereby I think we will leased another 435 00:24:51,400 --> 00:24:53,600 Speaker 1: point where people are really thinking it and and and 436 00:24:53,600 --> 00:24:55,800 Speaker 1: saying hang on, has this gone far too far? And 437 00:24:55,800 --> 00:24:58,760 Speaker 1: obviously Jamie Diamond's moved last night by JP Morgan Stock 438 00:24:58,800 --> 00:25:00,879 Speaker 1: has had quite an interesting act on the market. I 439 00:25:00,880 --> 00:25:03,439 Speaker 1: think um saying you know in his view, you know, 440 00:25:03,640 --> 00:25:07,000 Speaker 1: JP Morgan's declineer perhaps gone too far, and I think 441 00:25:07,040 --> 00:25:09,480 Speaker 1: we hopefully this will add some stability, but I think 442 00:25:09,480 --> 00:25:11,920 Speaker 1: we need other things like the energy price to continue 443 00:25:11,960 --> 00:25:14,479 Speaker 1: to live and also the gap between the two year 444 00:25:14,480 --> 00:25:17,000 Speaker 1: in the ten year to widen and you know, push 445 00:25:17,000 --> 00:25:19,880 Speaker 1: away a little bit. Fears about some negative industlas having 446 00:25:19,880 --> 00:25:25,320 Speaker 1: an impact globally, Well, we are seeing CDs for the 447 00:25:25,359 --> 00:25:29,760 Speaker 1: financial industry in the United States, particularly for investment grading 448 00:25:30,480 --> 00:25:33,240 Speaker 1: for both but but particularly for high grade hay yield 449 00:25:33,640 --> 00:25:38,480 Speaker 1: rather um drop significantly. So it does look like maybe 450 00:25:39,119 --> 00:25:43,960 Speaker 1: people are more sanguine about the outlook. Yes, I mean again, 451 00:25:43,960 --> 00:25:46,399 Speaker 1: as as I just touched on there, I think, you know, 452 00:25:46,440 --> 00:25:48,399 Speaker 1: we all feel better today, and I think you know, 453 00:25:48,560 --> 00:25:50,639 Speaker 1: people are outsides to which less that than let the 454 00:25:50,640 --> 00:25:53,240 Speaker 1: concerns of the market. But you know, we still have 455 00:25:53,480 --> 00:25:56,680 Speaker 1: you know, Wales out there in the border economy, and 456 00:25:57,160 --> 00:25:59,399 Speaker 1: so I I feel that you know, this is not 457 00:25:59,440 --> 00:26:02,000 Speaker 1: the end by any means are we differentiating though? I 458 00:26:02,160 --> 00:26:04,040 Speaker 1: like two thousand eight and it was like, what's the 459 00:26:04,040 --> 00:26:06,200 Speaker 1: next thing to go down? You've been stealing from l 460 00:26:06,240 --> 00:26:11,199 Speaker 1: are in all morning. I think that's absolutely light and 461 00:26:11,240 --> 00:26:14,119 Speaker 1: I think you know again. You know what, what what 462 00:26:14,160 --> 00:26:16,120 Speaker 1: the clients are talking to me about is the fact 463 00:26:16,200 --> 00:26:18,200 Speaker 1: that they their top in particularly on the bank space, 464 00:26:18,560 --> 00:26:20,560 Speaker 1: is that they see banks for the much longer, particularly 465 00:26:20,560 --> 00:26:22,720 Speaker 1: the US banks, which I focus on most of my time, 466 00:26:23,080 --> 00:26:25,560 Speaker 1: but they don't understand quite where they've all gone down 467 00:26:25,600 --> 00:26:27,680 Speaker 1: so much. But again, we've been looking at Matt Clue 468 00:26:27,720 --> 00:26:29,600 Speaker 1: issues here, and as we start to see a little 469 00:26:29,600 --> 00:26:31,440 Speaker 1: bit of stability, people will start to pick on the 470 00:26:31,560 --> 00:26:34,760 Speaker 1: really good quality names, and you know that's that's I 471 00:26:34,760 --> 00:26:36,359 Speaker 1: think where people are going to put their money as 472 00:26:36,400 --> 00:26:38,680 Speaker 1: they look to benefit from some kind of recovery in 473 00:26:38,720 --> 00:26:42,960 Speaker 1: the stocks. Chris Wheeler, Atlantic Equities, thank you very much, 474 00:26:43,240 --> 00:26:46,920 Speaker 1: don't cherish at the moment. By ten and a half 475 00:26:47,000 --> 00:26:49,240 Speaker 1: percent in Europe, nine and a half percent of the 476 00:26:49,320 --> 00:26:52,240 Speaker 1: United States twenty eight print on Once Texas and the media. 477 00:26:52,359 --> 00:26:54,399 Speaker 1: So yeah, we've got to be careful here, folks. There 478 00:26:54,359 --> 00:26:57,280 Speaker 1: has been so much technical damage. Well, I want to 479 00:26:57,280 --> 00:26:59,800 Speaker 1: make clear we are not calling bottom, we are not 480 00:27:00,040 --> 00:27:04,000 Speaker 1: calling breach through resistance. We're not trying to be smart here. 481 00:27:04,320 --> 00:27:07,040 Speaker 1: We're just showing you what's off the bloomberg. And the 482 00:27:07,080 --> 00:27:10,560 Speaker 1: fact is future is up twenty then up thirteen, and 483 00:27:10,600 --> 00:27:13,639 Speaker 1: we've gone from up thirteen, up fourteen, up twenty two. 484 00:27:13,920 --> 00:27:18,119 Speaker 1: Right now Dal points up a hundred and fifteen seven 485 00:27:18,200 --> 00:27:20,640 Speaker 1: s six the first day in a very long time. 486 00:27:20,720 --> 00:27:23,800 Speaker 1: We can't say that almost all the news is good. 487 00:27:23,840 --> 00:27:26,840 Speaker 1: The discrete news items and it's there, and we'll monitor 488 00:27:26,920 --> 00:27:29,720 Speaker 1: and still Oil. There's some mysteries there about what we 489 00:27:29,760 --> 00:27:38,640 Speaker 1: saw last night. Barrel on Oil seven on All Street. 490 00:27:38,680 --> 00:27:40,359 Speaker 1: Let's check out with Michael ar and get the latest 491 00:27:40,359 --> 00:27:43,040 Speaker 1: news headlines. Michael, Mike, Tom, thank you very much. The 492 00:27:43,040 --> 00:27:46,639 Speaker 1: World Health Organization says large scale tests for a Zeka 493 00:27:46,720 --> 00:27:51,680 Speaker 1: vaccine our about eighteen months away. Dr Marie Paul Needy 494 00:27:52,040 --> 00:27:55,640 Speaker 1: of the World Health Organization says researchers are studying two 495 00:27:55,640 --> 00:27:59,360 Speaker 1: approaches against the virus. One is a DNA vaccine from 496 00:27:59,359 --> 00:28:03,159 Speaker 1: the US National Institute for Health, and the second is 497 00:28:03,200 --> 00:28:08,520 Speaker 1: an inactivated product from Barrett Politic and Indian vaccine manufacturing. 498 00:28:08,800 --> 00:28:12,760 Speaker 1: World powers agreed to a partial ceasefire in Syria Civil War. 499 00:28:12,920 --> 00:28:15,480 Speaker 1: The US Secretary of State John Kerry says the truth 500 00:28:15,720 --> 00:28:18,960 Speaker 1: would be a pause making The accord reached New Munich 501 00:28:18,960 --> 00:28:21,400 Speaker 1: were all of the major outside powers and the Syrian 502 00:28:21,440 --> 00:28:25,320 Speaker 1: Civil War, including the US Russia, Turkey, Saudi Arabia and 503 00:28:25,359 --> 00:28:28,240 Speaker 1: a run. South Korea says it has cut off power 504 00:28:28,359 --> 00:28:32,000 Speaker 1: and water supplies to a factory park in North Korea, 505 00:28:32,359 --> 00:28:35,159 Speaker 1: a day after the North deported all South Korean workers 506 00:28:35,240 --> 00:28:38,960 Speaker 1: there and ordered a military takeover of the complex. Join 507 00:28:39,040 --> 00:28:41,680 Speaker 1: The operated complex had been the last major symbol of 508 00:28:41,680 --> 00:28:45,880 Speaker 1: co operation between North and South Korea. The South suspended 509 00:28:45,880 --> 00:28:49,400 Speaker 1: operations there in response to a North Korean rocket launch. 510 00:28:49,760 --> 00:28:52,640 Speaker 1: Global News twenty four hours a day, powered by our 511 00:28:52,840 --> 00:28:55,560 Speaker 1: twenty four hundred journalists and more than a hundred fifty 512 00:28:55,560 --> 00:28:58,360 Speaker 1: news bureaus from around the world. I'm Michael Barr, Mike 513 00:28:58,400 --> 00:29:03,360 Speaker 1: Tom Thank you time now for the Bloomberg NBC Sports 514 00:29:03,560 --> 00:29:07,520 Speaker 1: Update with John st John. All right, my only local 515 00:29:07,520 --> 00:29:09,640 Speaker 1: team playing last night, the Islanders. They won their third row, 516 00:29:09,720 --> 00:29:11,800 Speaker 1: got three goals first period. They beat Los Angeles five 517 00:29:11,880 --> 00:29:14,120 Speaker 1: to two. Johnny Boychick got it started. He was happy 518 00:29:14,160 --> 00:29:16,920 Speaker 1: to be the team that is leading its division. Are 519 00:29:16,960 --> 00:29:18,400 Speaker 1: one of the best teams in the league and have 520 00:29:18,520 --> 00:29:21,400 Speaker 1: been for the last couple of years. And I mean 521 00:29:22,000 --> 00:29:24,520 Speaker 1: the reason why they are, they're they're winning team and 522 00:29:24,920 --> 00:29:26,280 Speaker 1: you know what to beat time it was. It was 523 00:29:26,320 --> 00:29:27,880 Speaker 1: a good test for us but now we have to 524 00:29:28,360 --> 00:29:30,320 Speaker 1: just put it behind us and look forward to the 525 00:29:30,320 --> 00:29:33,160 Speaker 1: next time, which is tomorrow at Carolina Kings and Rangers. 526 00:29:33,160 --> 00:29:35,360 Speaker 1: Tonight at the Guard. NBA has hit the All Star Break. 527 00:29:35,400 --> 00:29:39,000 Speaker 1: They'll play the Rising Stars and Celebrity Games tonight in Toronto. 528 00:29:39,080 --> 00:29:41,840 Speaker 1: The actual games Sunday Night. College basketball tomorrow will be 529 00:29:41,920 --> 00:29:44,280 Speaker 1: quite a test for St. John's, who has lost fifteen 530 00:29:44,320 --> 00:29:46,760 Speaker 1: games in a row and now has to visit Villanova, 531 00:29:46,800 --> 00:29:48,760 Speaker 1: who was ranked number one in the country. Last night 532 00:29:48,760 --> 00:29:51,760 Speaker 1: they law you beat Wagner, wins from Manhattan, St. Francis 533 00:29:51,800 --> 00:29:54,920 Speaker 1: Fairlee Dickinson and Stony Brook's now one seventeen a row, 534 00:29:54,920 --> 00:29:57,360 Speaker 1: along just Win Street in the Nation, American Chaz Rebby 535 00:29:57,360 --> 00:29:59,360 Speaker 1: and eight under sixty three one shot lead after one 536 00:29:59,480 --> 00:30:02,920 Speaker 1: round at Tabo Beach. Phil Nicholson shot sixty seven. Jordan's 537 00:30:02,920 --> 00:30:06,320 Speaker 1: speed seventy one. But the Bloomberg NBC Sports Update, I'm 538 00:30:06,400 --> 00:30:09,640 Speaker 1: John John, thanks so much the headline from John Glover 539 00:30:09,760 --> 00:30:13,000 Speaker 1: off the New York Desk, the London Desk. Rather Deutsche 540 00:30:13,080 --> 00:30:16,520 Speaker 1: Bank to buy back five point four billion bonds. They 541 00:30:16,560 --> 00:30:20,200 Speaker 1: do that in euros and in dollars. The bank set 542 00:30:20,200 --> 00:30:25,280 Speaker 1: in a statement it's quote strong liquidity position allows it 543 00:30:25,360 --> 00:30:27,680 Speaker 1: to do so. So there's the headline and we see 544 00:30:27,720 --> 00:30:31,200 Speaker 1: it with market improvement features Up twenty two Down features 545 00:30:31,280 --> 00:30:33,920 Speaker 1: up one sixty six Best tape of the day. Weaker 546 00:30:34,000 --> 00:30:37,560 Speaker 1: Yen is a global litmus paper. One ten was a 547 00:30:37,680 --> 00:30:41,400 Speaker 1: handle in the crisis of Asia. Seems ages ago. I'm 548 00:30:41,400 --> 00:30:44,239 Speaker 1: gonna say it was fourteen hours ago. Whatever it was, 549 00:30:44,600 --> 00:30:48,520 Speaker 1: one ten, one eleven, twelve. We've been seeing in one 550 00:30:48,640 --> 00:30:52,440 Speaker 1: thirteen print here on a weaker yeah, in one twelve 551 00:30:52,560 --> 00:30:55,440 Speaker 1: ninety six right now, the euro was a one thirteen 552 00:30:55,640 --> 00:30:59,400 Speaker 1: weeker one four and a little bit of US dollar 553 00:30:59,480 --> 00:31:02,960 Speaker 1: strength as uh well, West Texas City Media with a 554 00:31:03,040 --> 00:31:05,360 Speaker 1: twenty eight print up a dollar seventy six print crude 555 00:31:06,880 --> 00:31:09,640 Speaker 1: dollar forty eight. Gold was negative eight, it's down negative 556 00:31:11,080 --> 00:31:16,840 Speaker 1: twelve thirty five the ounce um, It's been an interesting week. 557 00:31:17,080 --> 00:31:23,280 Speaker 1: Stay with us. Bloomberg Surveillance. Bloomberg Surveillance is brought to 558 00:31:23,280 --> 00:31:24,720 Speaker 1: you by T two Computing, a new kind of I 559 00:31:24,840 --> 00:31:28,320 Speaker 1: T solutions company for workflow, mobility and infrastructure. Let them 560 00:31:28,360 --> 00:31:31,440 Speaker 1: explain how their expertise can help you gain greater business value. 561 00:31:31,480 --> 00:31:37,760 Speaker 1: Visit T too computing dot com for more information. Global 562 00:31:37,840 --> 00:31:41,240 Speaker 1: Business News twenty four hours a day at Bloomberg dot com, 563 00:31:41,440 --> 00:31:44,280 Speaker 1: the Radio plus Mobile Act and on your radio. This 564 00:31:44,680 --> 00:31:48,400 Speaker 1: is a Bloomberg Business Flash and I'm Karen Moscow. This 565 00:31:48,520 --> 00:31:51,160 Speaker 1: update is brought to you by U n c keenan 566 00:31:51,200 --> 00:31:55,400 Speaker 1: Flaggler's full time NBA program unc keenan Flaggler Shaping Leaders, 567 00:31:55,440 --> 00:31:58,040 Speaker 1: Driving Results. Learn more at NBA dot, U n C 568 00:31:58,240 --> 00:32:01,800 Speaker 1: dot E, d U US dot Index futures are advancing 569 00:32:01,800 --> 00:32:04,520 Speaker 1: in line with European equities and oil prices, indicating the 570 00:32:04,640 --> 00:32:07,960 Speaker 1: SNP five hundred well snap its longest losing streaks in September, 571 00:32:08,120 --> 00:32:10,440 Speaker 1: and we check the markets every fifteen minutes throughout the 572 00:32:10,440 --> 00:32:14,000 Speaker 1: trading day on Bloomberg. SNP eveni futures up twenty one points, 573 00:32:14,120 --> 00:32:17,160 Speaker 1: DOWI mini futures up a hundred fifty four, NASDAC eveni 574 00:32:17,200 --> 00:32:19,760 Speaker 1: futures up forty two. The DASS in Germany's up two 575 00:32:19,760 --> 00:32:22,920 Speaker 1: point two percent. Can your treasury down seven thirty seconds, 576 00:32:22,920 --> 00:32:25,760 Speaker 1: the yield one point six eight percent. Nimex screwed oil 577 00:32:25,880 --> 00:32:28,880 Speaker 1: up six percent, up a dollar fifty seven. It's a 578 00:32:28,920 --> 00:32:32,240 Speaker 1: twenty seven dollars eighty cents of barrel comex called down 579 00:32:32,280 --> 00:32:34,560 Speaker 1: one per cent or twelve dollars twenty cents to twelve 580 00:32:34,600 --> 00:32:37,480 Speaker 1: thirty five sixty and ounce the euro a dollar twelve 581 00:32:37,480 --> 00:32:40,840 Speaker 1: forty eight then one twelve point eight five Deutscher Banks 582 00:32:40,840 --> 00:32:42,960 Speaker 1: saying it plans to offer to buy back about five 583 00:32:42,960 --> 00:32:45,640 Speaker 1: point four billion dollars of bonds and euros and dollars 584 00:32:45,880 --> 00:32:49,000 Speaker 1: as it seeks to reassure investors that its financial position 585 00:32:49,080 --> 00:32:51,920 Speaker 1: is solid. And retail sales increased for a third trade 586 00:32:52,000 --> 00:32:54,960 Speaker 1: month in January. Is Americans kicked off twenty sixteen by 587 00:32:55,000 --> 00:32:58,600 Speaker 1: spending freely on cars, clothing, and online merchandise. The two 588 00:32:58,600 --> 00:33:01,240 Speaker 1: ten percent increase match the previous months advanced. That was 589 00:33:01,280 --> 00:33:04,600 Speaker 1: initially reported as a death line. That's a Bloombergy business flash, 590 00:33:04,640 --> 00:33:07,280 Speaker 1: Tommy to my Charon, and thank you so much. Future 591 00:33:07,920 --> 00:33:14,720 Speaker 1: two Wall Street. The following is from Bloomberg View, opinions 592 00:33:14,720 --> 00:33:19,480 Speaker 1: and commentary from Bloomberg columnists. I'ne a columnist for Bloomberg View. 593 00:33:19,680 --> 00:33:22,640 Speaker 1: Even though everyone expected for weeks that Donald Trump would 594 00:33:22,640 --> 00:33:25,280 Speaker 1: win the New Hampshire primary, the scale of that victory 595 00:33:25,280 --> 00:33:28,719 Speaker 1: should unsettle both his rivals and the punts. Trump won 596 00:33:28,800 --> 00:33:31,120 Speaker 1: more than double the votes of the second place finisher, 597 00:33:31,200 --> 00:33:35,200 Speaker 1: John Kasik. He also swept nearly every demographic category, New 598 00:33:35,240 --> 00:33:37,800 Speaker 1: Hampshire left the non Trump candidates, for the most part 599 00:33:37,960 --> 00:33:40,479 Speaker 1: jockeying with one another to be the anti Trump candidate 600 00:33:40,640 --> 00:33:43,240 Speaker 1: rather than taking him on directly. The exit polls from 601 00:33:43,240 --> 00:33:46,200 Speaker 1: the primary also contradict several theories about the Trump vote. 602 00:33:46,320 --> 00:33:48,600 Speaker 1: He did no better among voters who feel betrayed by 603 00:33:48,600 --> 00:33:52,160 Speaker 1: Republican politicians than among those who don't. Only fifteen percent 604 00:33:52,200 --> 00:33:54,800 Speaker 1: of voters listened immigration as their top issue. He won 605 00:33:54,840 --> 00:33:57,880 Speaker 1: among voters who say their financial condition is improving, and 606 00:33:57,920 --> 00:34:00,720 Speaker 1: he outperformed among voters who think the next generation of 607 00:34:00,760 --> 00:34:03,560 Speaker 1: Americans will be better off. Because the exit polls make 608 00:34:03,600 --> 00:34:06,240 Speaker 1: the sources of Trump's appeal less clear than ever, they 609 00:34:06,240 --> 00:34:09,759 Speaker 1: don't suggest an obvious anti Trump strategy, assuming that is 610 00:34:09,880 --> 00:34:12,920 Speaker 1: that the other candidates wish to pursue one. I'm a entrepreneurio. 611 00:34:13,120 --> 00:34:15,319 Speaker 1: For more view please go to Bloomberg View dot com 612 00:34:15,480 --> 00:34:18,200 Speaker 1: or view go on the Bloomberg terminal. This has been 613 00:34:18,200 --> 00:34:21,680 Speaker 1: Bloomberg View and Bloomberg View commentaries can be here in 614 00:34:21,800 --> 00:34:26,640 Speaker 1: hourly weekdays. I'm Bloomberg Radio. It is good to speak 615 00:34:26,680 --> 00:34:31,560 Speaker 1: to James Paulson. He has a perspective linking in economics 616 00:34:31,600 --> 00:34:37,279 Speaker 1: into investment that wraps around a good and careful optimism. 617 00:34:37,480 --> 00:34:39,480 Speaker 1: We speak to him now, Jim, is it a single 618 00:34:39,520 --> 00:34:43,000 Speaker 1: digit world? I mean, you know whatever, The institutional look 619 00:34:43,080 --> 00:34:46,719 Speaker 1: back is not one year, but three years back, five 620 00:34:46,800 --> 00:34:50,680 Speaker 1: years back. Anybody who was managing responsibly are all of 621 00:34:50,719 --> 00:34:53,680 Speaker 1: a sudden is looking at single digit returns, aren't they? 622 00:34:53,920 --> 00:34:57,239 Speaker 1: I think so? Uh, Tom, I I think so, at 623 00:34:57,280 --> 00:35:00,680 Speaker 1: least over the longer term. The the best part of 624 00:35:00,680 --> 00:35:03,360 Speaker 1: this bull markets probably behind us as far as the 625 00:35:03,400 --> 00:35:07,759 Speaker 1: outsized returns. I think from here in on, if if 626 00:35:07,800 --> 00:35:11,600 Speaker 1: if the recovery lasts some or more years, that return 627 00:35:11,719 --> 00:35:15,120 Speaker 1: expectations ultimately are going to be about earnings growth, which 628 00:35:15,200 --> 00:35:19,880 Speaker 1: is probably about uh equal to what uh GDP growth 629 00:35:19,960 --> 00:35:22,759 Speaker 1: is or a little less. So if if we grow 630 00:35:22,840 --> 00:35:26,279 Speaker 1: at UH five percent novel GDP, may we have four 631 00:35:26,320 --> 00:35:29,200 Speaker 1: percent earnings growth and you get a couple of percent 632 00:35:29,239 --> 00:35:31,640 Speaker 1: for dividends, and maybe you can expect sent percent by 633 00:35:31,640 --> 00:35:35,880 Speaker 1: an hole. Right now, we're probably have more upside potetial 634 00:35:35,880 --> 00:35:41,120 Speaker 1: because we're probably on the lower end of of this fectorum. Mike, 635 00:35:41,440 --> 00:35:45,759 Speaker 1: uh eight point n sp X back three years with 636 00:35:45,920 --> 00:35:49,759 Speaker 1: dividends eleven, Yeah, we may be getting to the end 637 00:35:49,800 --> 00:35:53,759 Speaker 1: of that run. I guess Jim, you suggested a note 638 00:35:54,200 --> 00:35:57,680 Speaker 1: out overnight, and maybe it's time to go bottom fishing. 639 00:35:57,760 --> 00:36:00,920 Speaker 1: And if if I may mix meta wars here with 640 00:36:01,040 --> 00:36:04,880 Speaker 1: real fishing, one of the difficult times to fish is 641 00:36:04,920 --> 00:36:07,640 Speaker 1: when the water is all churned up, and that's where 642 00:36:07,680 --> 00:36:11,480 Speaker 1: we are right now. Correct, Yeah, yeah, But oftentimes when 643 00:36:11,520 --> 00:36:13,520 Speaker 1: the waters all turned up, there's some big ones just 644 00:36:13,560 --> 00:36:21,399 Speaker 1: below the surface. We've totally lost time. But but yeah, 645 00:36:21,600 --> 00:36:26,239 Speaker 1: I mean, um, how are there really big ones out 646 00:36:26,280 --> 00:36:31,240 Speaker 1: there now? Or are we looking at um finding those 647 00:36:31,280 --> 00:36:34,319 Speaker 1: stocks that will give you this six percent but you're 648 00:36:34,360 --> 00:36:36,719 Speaker 1: not gonna hit the home run. Well, I think for 649 00:36:36,800 --> 00:36:39,600 Speaker 1: where we are, there's pretty good uh potential here for 650 00:36:39,680 --> 00:36:42,520 Speaker 1: why I've had Since you're in a flat target on 651 00:36:42,520 --> 00:36:44,680 Speaker 1: the SMP this year, will you know, end up the 652 00:36:44,760 --> 00:36:48,759 Speaker 1: year about where we started the year. But from here now, Mike, 653 00:36:48,840 --> 00:36:53,040 Speaker 1: that's a advance just to get back to even for 654 00:36:53,080 --> 00:36:57,640 Speaker 1: the year. Um, I still think that's possible. Um, you know, 655 00:36:58,360 --> 00:37:01,520 Speaker 1: I like a few things we've done. This is almost 656 00:37:01,520 --> 00:37:04,439 Speaker 1: the third ten percent correction we've had in the last 657 00:37:04,440 --> 00:37:07,480 Speaker 1: fifteen months, dating back to late two thousand and fourteen, 658 00:37:08,480 --> 00:37:11,000 Speaker 1: and this one finally has had some teeth in it. 659 00:37:11,000 --> 00:37:16,040 Speaker 1: It has finally revalued stocks. The multiple on a trailing 660 00:37:16,080 --> 00:37:18,920 Speaker 1: basis is closer to sixteen times earnings right now was 661 00:37:19,719 --> 00:37:22,240 Speaker 1: nineteen times earnings at the top. That's a that's a 662 00:37:22,280 --> 00:37:27,399 Speaker 1: significant revaluation that we I think needed. I I think 663 00:37:27,440 --> 00:37:31,560 Speaker 1: for the first time, amongst all these corrections, we finally 664 00:37:31,560 --> 00:37:35,719 Speaker 1: see some fear among investors. Sentiments has been solidly gut check. 665 00:37:36,200 --> 00:37:39,520 Speaker 1: You know, when when we went down in August. Last August, 666 00:37:40,120 --> 00:37:43,000 Speaker 1: most of the commentary was all this is a refreshing pause, 667 00:37:43,160 --> 00:37:46,400 Speaker 1: or it's a good buying opportunity. Now what you're hearing 668 00:37:46,520 --> 00:37:51,239 Speaker 1: is global financial contagion and at a financial crisis in 669 00:37:51,280 --> 00:37:54,760 Speaker 1: the bank stocks and the Feds pushing on a string. 670 00:37:54,960 --> 00:37:57,959 Speaker 1: I think. I think the rush to treasuries, the rush 671 00:37:58,040 --> 00:38:03,080 Speaker 1: to gold all suggested year. So we've got revalued market 672 00:38:03,760 --> 00:38:07,280 Speaker 1: sentiment completely washed out, and there's a positive catalyst coming 673 00:38:07,360 --> 00:38:10,400 Speaker 1: I think is better economic data. And then this morning's 674 00:38:10,440 --> 00:38:13,960 Speaker 1: retail sales numbers is an example of that. You know, 675 00:38:14,000 --> 00:38:17,040 Speaker 1: the old saying, never stand between an American consumer and 676 00:38:17,080 --> 00:38:20,839 Speaker 1: a cash registering. That's right, but they've proved it over 677 00:38:20,840 --> 00:38:24,040 Speaker 1: and over again. You know, I think the environments around 678 00:38:24,040 --> 00:38:27,840 Speaker 1: the household is might be among the best of the recovery. 679 00:38:27,880 --> 00:38:32,359 Speaker 1: They've got you know, very strong job market. Uh, they've 680 00:38:32,400 --> 00:38:35,680 Speaker 1: got high net worth, low debt service bird, the mortgage 681 00:38:35,760 --> 00:38:40,520 Speaker 1: rates you know, three and a half percent, and uh, 682 00:38:40,560 --> 00:38:45,000 Speaker 1: you got uh real income growth that's hanging in there 683 00:38:45,120 --> 00:38:48,440 Speaker 1: fairly well. Confidences need to fairly high levels. I think 684 00:38:48,480 --> 00:38:51,319 Speaker 1: the consumer is gonna be fine. Yeah, I'll go with that. 685 00:38:51,400 --> 00:38:53,120 Speaker 1: But the last time you're on, Jim, you struck a 686 00:38:53,160 --> 00:38:56,439 Speaker 1: more cautious, measured tone. You were certainly not a bear. 687 00:38:56,440 --> 00:38:59,279 Speaker 1: I don't want to say that, but I think all 688 00:38:59,320 --> 00:39:02,040 Speaker 1: of our listeners on a Friday in February, what's it 689 00:39:02,080 --> 00:39:04,120 Speaker 1: Mike going to be like forty two below zero here 690 00:39:04,160 --> 00:39:08,000 Speaker 1: this weekend? Well, that's what it's all. It's he's like 691 00:39:08,080 --> 00:39:11,399 Speaker 1: there but for the grace of God. I mean, it's 692 00:39:11,440 --> 00:39:13,920 Speaker 1: ten above zero when he's walking around in Bermuda shorts 693 00:39:13,920 --> 00:39:17,719 Speaker 1: and flip flops vikings, flip flaps, you know, you know, Jim, Yeah, 694 00:39:17,719 --> 00:39:20,680 Speaker 1: I look at the caution you had last time around, 695 00:39:21,200 --> 00:39:24,440 Speaker 1: a lot of our listeners feel that, how do you 696 00:39:24,600 --> 00:39:31,520 Speaker 1: participate in your retirement plan? If you're cautious? What's the strategy? Well, 697 00:39:31,640 --> 00:39:33,399 Speaker 1: you know, last time I was on mark is quite 698 00:39:33,400 --> 00:39:36,280 Speaker 1: a bit higher, and uh yeah, I kind of felt, 699 00:39:37,080 --> 00:39:40,200 Speaker 1: uh that we might visit that, which is where we 700 00:39:40,320 --> 00:39:42,359 Speaker 1: kind of Yeah, but you're also like Carolina would win, 701 00:39:42,400 --> 00:39:49,040 Speaker 1: so good, You're right, I get I get over the 702 00:39:49,040 --> 00:39:52,160 Speaker 1: next two years, you know, expecting lower returns, and I 703 00:39:52,160 --> 00:39:54,480 Speaker 1: think that's correct. You know, like I said, six to 704 00:39:54,560 --> 00:39:58,120 Speaker 1: seven rather than tend a twelve percent or something, and 705 00:39:58,360 --> 00:40:01,200 Speaker 1: I think that's correct. But even if we can do six, 706 00:40:01,719 --> 00:40:03,719 Speaker 1: you know, that's still a lot more than the two 707 00:40:03,760 --> 00:40:06,880 Speaker 1: percent core inflation or a one sixty ten year yield. 708 00:40:07,640 --> 00:40:11,880 Speaker 1: Uh that you alternatives out there is zero percent cash returns. 709 00:40:11,920 --> 00:40:14,760 Speaker 1: So I think you you need to stay a little 710 00:40:14,960 --> 00:40:18,880 Speaker 1: overtilted towards equities. Uh if if for no other reason, 711 00:40:18,920 --> 00:40:22,840 Speaker 1: then uh, they're just are not the return availability. And indeed, 712 00:40:22,840 --> 00:40:27,200 Speaker 1: in bonds there's risk that uh probably is more so 713 00:40:27,360 --> 00:40:29,560 Speaker 1: than in stocks from here right now. So I think 714 00:40:29,600 --> 00:40:32,400 Speaker 1: you got to stay tilted. Um. It doesn't mean you 715 00:40:32,440 --> 00:40:37,080 Speaker 1: can't have, you know, perhaps some more conservative investment posture 716 00:40:37,080 --> 00:40:40,520 Speaker 1: in terms of the types of stocks that you have. Um, 717 00:40:40,760 --> 00:40:43,279 Speaker 1: then you might have had three or four years ago. 718 00:40:43,920 --> 00:40:47,480 Speaker 1: But I think to go completely away from stocks because 719 00:40:47,520 --> 00:40:50,879 Speaker 1: you're concerned about what may happen could damage you more 720 00:40:51,040 --> 00:40:52,920 Speaker 1: if you end up in a bunch of bonds where 721 00:40:52,719 --> 00:40:57,280 Speaker 1: we have yet to resent interest rates. Well, Um, people 722 00:40:57,320 --> 00:41:01,279 Speaker 1: are looking at equities and wondering, you know, about risk. 723 00:41:01,400 --> 00:41:05,920 Speaker 1: They're at this point as well, do you want You're 724 00:41:05,960 --> 00:41:09,560 Speaker 1: saying till towards equities? But isn't this really sort of 725 00:41:09,600 --> 00:41:13,440 Speaker 1: time until towards cash? I don't see. I think a 726 00:41:13,480 --> 00:41:15,400 Speaker 1: lot of this risk there turns out. I think the 727 00:41:15,440 --> 00:41:17,920 Speaker 1: lows in this market this year are pretty close to 728 00:41:17,960 --> 00:41:20,680 Speaker 1: where we are. We might break eighteen hundred on the 729 00:41:20,800 --> 00:41:22,360 Speaker 1: S and P. I don't know if we go a 730 00:41:22,360 --> 00:41:26,120 Speaker 1: lot lower. Um, I think what I guess what I'm saying, 731 00:41:26,160 --> 00:41:29,160 Speaker 1: mic is what I like is I see people finally 732 00:41:29,239 --> 00:41:32,040 Speaker 1: worried about risk in a big way. I see the 733 00:41:32,040 --> 00:41:35,279 Speaker 1: emotion of this market finally coming out, which tells me 734 00:41:35,760 --> 00:41:38,640 Speaker 1: that we're probably closer to the lows here. You know, 735 00:41:38,719 --> 00:41:40,480 Speaker 1: we've had We've had a lot of risks. I mean, 736 00:41:40,520 --> 00:41:44,400 Speaker 1: small calf stocks are down over the value line, average 737 00:41:44,400 --> 00:41:48,440 Speaker 1: stock is off, international stocks are off that much. There's 738 00:41:48,440 --> 00:41:51,040 Speaker 1: been a lot of carn eage. And now we've finally 739 00:41:51,080 --> 00:41:53,399 Speaker 1: got emotion that's caught up to that, and I think 740 00:41:53,440 --> 00:41:57,439 Speaker 1: it's it's more likely time to be buying again rather 741 00:41:57,480 --> 00:41:59,839 Speaker 1: than running. We gotta get your back hunt again soon. 742 00:42:00,080 --> 00:42:04,319 Speaker 1: Or to expand on what the buying involves. We'd like 743 00:42:04,360 --> 00:42:06,799 Speaker 1: to give you, folks many different opinions. We do that 744 00:42:06,800 --> 00:42:10,080 Speaker 1: with Mr Paulson, who has been more optimistic than many 745 00:42:10,160 --> 00:42:13,440 Speaker 1: over the cycle of crisis that we've seen, to review. 746 00:42:13,640 --> 00:42:17,280 Speaker 1: If you're just joining us, we get action. On a Friday, 747 00:42:17,400 --> 00:42:20,920 Speaker 1: the management of Deutsche Bank follows through with the UH. 748 00:42:21,320 --> 00:42:24,120 Speaker 1: The comments made I believe it was by the journal. 749 00:42:24,120 --> 00:42:26,359 Speaker 1: Maybe it was by the ft that they would take 750 00:42:26,400 --> 00:42:29,719 Speaker 1: senior bonds, retire them, spend some money to do that 751 00:42:30,440 --> 00:42:32,319 Speaker 1: is a signal of confidence that we got that with 752 00:42:32,360 --> 00:42:35,960 Speaker 1: a vengeance. About an hour ago, Features Up One Job 753 00:42:36,080 --> 00:42:39,640 Speaker 1: Features Up One Michael McKee and Tom Keane trying to 754 00:42:39,640 --> 00:42:44,480 Speaker 1: give you smart conversation on economics, finance, investment in international relations. 755 00:42:44,880 --> 00:42:47,360 Speaker 1: Another hour of Blueberg surveillance