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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Daily

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

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

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

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Speaker 1: John and I went mental on this and that for

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Speaker 1: the next nine hours, there's going to be a complete

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Speaker 1: mythology of these gazillionaires, these technology giants, and these politicians.

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Speaker 1: As a spar in Washington, what we wanted to do

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Speaker 1: is have a sane conversation with a doer, someone like Cook,

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Speaker 1: someone like Bezos and the rest of him. Jim McKelvey

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Speaker 1: is the McKelvey School of Engineering at the Washington University

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Speaker 1: of St. Louis. He stumbled on a thing with a

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Speaker 1: guy named Dorsey called Square and made a pile of money.

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Speaker 1: But that came out of his curiosity and his innovation

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Speaker 1: and everything from glassblowing to just simple engineering and Pascal

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Speaker 1: language from another time and place. We're thrilled Jim mcklby

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Speaker 1: can talk today about these four people who are going

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Speaker 1: to stand in front of our Congress. Jim thrilled to

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Speaker 1: have you with us. As well. You are like bezos,

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Speaker 1: you were like cook, You're like the rest of them.

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Speaker 1: You guys aren't normal. What's your message to these congressmen?

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Speaker 1: What come on? What's your message to these congressmen about

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Speaker 1: the innovation you guys had when you were fifteen or

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Speaker 1: twenty or so. I mean, it's exactly the opposite of

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Speaker 1: what you just said. Um. And the reason I wrote

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Speaker 1: the book The Innovation Stack is because, in fact, I

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Speaker 1: want to skewer this hero myth that somehow people who

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Speaker 1: end up in these positions of fantastic power are somehow

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Speaker 1: different than the rest of us. Um. I mean it's

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Speaker 1: it's literally the opposite of you you said. I'm a very

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Speaker 1: normal guy. I live in St. Louis. Um, I'm not

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Speaker 1: a genius. I'm not even that hard working. I'm no

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Speaker 1: good at running companies. So um. What I wanted to

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Speaker 1: do was figure out what can take a normal person

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Speaker 1: and put them in a position where someday they do

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Speaker 1: run a company so powerful they get hauled in front

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Speaker 1: of Congress. Will Washington block that innovation? Is that a

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Speaker 1: risk that's out there? Look, there's always a risk from regulation,

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Speaker 1: and when regulation comes, it usually doesn't come in sort

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Speaker 1: of precise surgical implements. But I don't think Washington going

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Speaker 1: to do that much. Um. But then again, I'm not

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Speaker 1: a legislator. I'm not even somebody who runs a company,

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Speaker 1: so I'm not really qualified to speak on that at best.

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Speaker 1: I'm somebody who spent a lot of time studying the

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Speaker 1: dynamics of these companies. And I would say this as

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Speaker 1: somebody who is very regulated. I believe in regulation, but

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Speaker 1: you want regulation to be consistent so that the companies

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Speaker 1: and the people who work for them can adjust and uh,

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Speaker 1: you know, not have to lurch back and forth. Jim,

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Speaker 1: I want to take Tom's question and turn it on

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Speaker 1: its head. The idea that perhaps Washington ten squadsh innovation

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Speaker 1: are big tech companies squadshing innovation. This is one of

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Speaker 1: the big questions. Is perhaps the idea of Amazon taking

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Speaker 1: out and eliminating some of the platforms for competitors or

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Speaker 1: sort of pushing them down on the search function in

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Speaker 1: order to basically push forward their own products first, Is

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Speaker 1: that stifling innovation? Well, look, I don't know exactly what

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Speaker 1: Amazon is doing, but I will tell you this. I mean,

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Speaker 1: the reason I wrote the book was because Amazon, in

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Speaker 1: its early days attack Square, and they copied our product,

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Speaker 1: they undercut our price, and everyone expected Square to die um,

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Speaker 1: and we didn't. Um. And uh you know, a year later,

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Speaker 1: Amazon gave up processing credit cards and um and honestly

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Speaker 1: competing with them, they were really gracious. The competition that

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Speaker 1: you got from Amazon. Do you think that might Square better? Um?

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Speaker 1: Actually it was almost irrelevant. The funny thing about what

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Speaker 1: happened was with Amazon was that because we had an

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Speaker 1: innovation stack, which is this weird thing that I've been

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Speaker 1: studying for three years, the competition really didn't happen in

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Speaker 1: a way that was traditional. So if you've got normal businesses,

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Speaker 1: which are basically sort of very close copies of each other,

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Speaker 1: then competition, uh is can be deadly. And when Amazon

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Speaker 1: does this to normal companies, it wipes them out. Um.

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Speaker 1: But in the case of the Square and some other

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Speaker 1: companies that have these things called innovation stacks, you're actually

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Speaker 1: almost competition proof, at least as long as you played

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Speaker 1: by a certain set of rules that you know, I

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Speaker 1: spent three years studying, so I think, Um, you know,

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Speaker 1: everyone expected it to be this giant battle. Um. But

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Speaker 1: at Square, we really didn't do anything different. And by

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Speaker 1: the way, That pattern repeats and dozens of companies that

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Speaker 1: I have studied, including one, you know, Bank of America.

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Speaker 1: The founding of Bank of America. UM, it was done

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Speaker 1: by a kid who dropped out of school at fifteen

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Speaker 1: years old. UM, no formal education. He was a protein

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Speaker 1: But Jim, Jim, I don't mean to interrupt, but we're

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Speaker 1: gonna run out of time. Jim, this is critical. Is

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Speaker 1: Washington gonna get in the way of that innovation stack. No,

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Speaker 1: Washington is not going to do it because they can't.

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Speaker 1: Um that companies with innovation stacks adapt very very quickly.

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Speaker 1: What Washington needs to do is just lay out the rules.

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Speaker 1: They need to talk about what's important. UM. If there

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Speaker 1: if there needs to be some protection, they put in

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Speaker 1: some protection. But what we need as innovators is to

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Speaker 1: just know the rules that we're playing in. Hi, Jim

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Speaker 1: write to catch out with you five minutes does not

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Speaker 1: do this justice. You've gotta get you back, Jim mccaby

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Speaker 1: that Square Cove found out and Deputy chair the send

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Speaker 1: Louis Fete. Jill carry Hall works within the competitive milieu

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Speaker 1: of economics and equity at Bank of America. What she's

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Speaker 1: known for is a blistering single sentence in a three

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Speaker 1: page report. Jill, you have a sentence which is stunning,

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Speaker 1: which is small caps will see a nine year over

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Speaker 1: year collapse of earnings versus large caps with only a

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Speaker 1: collapse of earnings. How does small cap get to the

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Speaker 1: end of the bridge? Yeah, I mean, the fundamental backdrop

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Speaker 1: for small cops is one of the reasons we've been cautious.

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Speaker 1: I think. Obviously, the coronavirus and the current crisis has

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Speaker 1: been one that's been more detrimental to small businesses. But

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Speaker 1: even going into this, small caps were worse positioned than

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Speaker 1: they usually are. Ahead of recessions. You had about a

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Speaker 1: third of the Russell two thousand that had no earnings,

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Speaker 1: you had record debt levels UM. And now this this

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Speaker 1: earning season, as you mentioned, you're seeing much much bigger

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Speaker 1: your re earnings collapses for smaller companies and and they're

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Speaker 1: still seeing weaker revision trends even though we're starting to

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Speaker 1: see a bottoming out there. So so we're still cautious

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Speaker 1: for smaller companies. But but as you if you move

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Speaker 1: into a more sustainable recovery UM, you know, while it

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Speaker 1: may take a bit longer than than usual given where

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Speaker 1: they were. That that typically tends to be a more

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Speaker 1: favorable backdrop for smaller caps. But but for now, we

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Speaker 1: remain more relatively cautious that Joe, just walk me through

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Speaker 1: the earnings profile relative to the price at the story

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Speaker 1: large caps versus small caps now sure, so, I mean

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Speaker 1: right now, on a valuation basis, all three size segments

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Speaker 1: are treading it at pretty extended levels versus history, So

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Speaker 1: so relative to earnings, the market certainly doesn't look look

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Speaker 1: cheap no matter what size segment you're looking at um.

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Speaker 1: But but for from a relative basis, if you're a

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Speaker 1: long term investor, that's sort of the long term goal

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Speaker 1: case for small caps is relative to large their trading

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Speaker 1: it at multidecade lows. Evaluation doesn't really tend to be

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Speaker 1: very predictive. If you have a short time horizon, you know,

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Speaker 1: what the pe multiple of the market is today doesn't

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Speaker 1: really necessarily tell you much about what returns are going

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Speaker 1: to get over the next year. But if you have,

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Speaker 1: you know, a ten year long term horizon, then that

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Speaker 1: does tend to be more predictive. So so for a

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Speaker 1: long term investor, it could be a good entry point

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Speaker 1: for small caps. But but for the near near term.

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Speaker 1: We still remain conscious, you know, when you're thinking about

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Speaker 1: these numbers and considering the price of the story, just

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Speaker 1: how much is it distorted by the big four, these

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Speaker 1: big tech names that will be reporting to Capitol Hill today. Yeah,

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Speaker 1: for the SMP five overall, we've definitely seen a lot

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Speaker 1: of the returns this year driven by by mega caps

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Speaker 1: and fame stocks mid all of the unprecedented liquidity that

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Speaker 1: we've seen. We're equal weight the tech sector right now.

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Speaker 1: We we have seen pretty strong earnings trends. It's been

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Speaker 1: one of the sectors that this earning season so far

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Speaker 1: has continued to surprise to the upside, along with healthcare

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Speaker 1: UM it has some of the cleanest balance sheets and

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Speaker 1: the SMP so fundamentally the sector still looks strong. But

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Speaker 1: you know, you have seen valuations get more and more extended.

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Speaker 1: And one of the reasons that we're equal weight tech

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Speaker 1: within the SMP five is potential for for higher regulation,

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Speaker 1: whether some of these companies wind up self regulating or

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Speaker 1: whether it's forced upon them. I think that's something that

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Speaker 1: you know as we move into election, and regardless, it's

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Speaker 1: something that both sides, the i'le have have talked about

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Speaker 1: so obviously we saw that happened with financials and regulation

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Speaker 1: and lower multiples. So that's one one potential concern around

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Speaker 1: tech talks. Jill, high regulation is one issue, but that

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Speaker 1: can't erase the fact that we've seen an acceleration in

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Speaker 1: the trend toward tech, toward working from home, towards the cloud.

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Speaker 1: And I'm wondering how much this affects the small caps

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Speaker 1: and the fat and the fact that perhaps some of

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Speaker 1: these companies are more leveraged to the old economy, the

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Speaker 1: one that didn't depend on tech as much, and perhaps

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Speaker 1: that's one of the reasons why those shares are down

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Speaker 1: eleven percent versus almost seventeen percent gain on the NASDAC.

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Speaker 1: How much is this a structural challenge for small cap

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Speaker 1: stalks going forward? Right? I think that's exactly right, that

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Speaker 1: that's one of the issues. When we've looked at the

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Speaker 1: earnings exposure of small caps, they actually have about double

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Speaker 1: the earnings exposure to some of what we would consider

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Speaker 1: more secularly challenged industries, like some of those old econmosh

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Speaker 1: old economy industries you mentioned, like rates um, you know, machinery,

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Speaker 1: parts of old brick and mortar, retail relative to large caps.

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Speaker 1: So and the areas of small caps that that are

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Speaker 1: more tech exposed, you know, small caps software. Some of

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Speaker 1: these areas are where you have seen those those valuation

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Speaker 1: multiples go more stratospheric. So you know, overall with within

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Speaker 1: small caps, investing in in growth stocks does tend to

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Speaker 1: be a more consistent longer term strategy than for large

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Speaker 1: But but yes, more more exposure told maybe micro caps

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Speaker 1: small caps who's keeping count? And the old days when

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Speaker 1: revenue was this damage and particularly unit growth was this damage,

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Speaker 1: you did a roll up, everybody merged, etcetera. Is the

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Speaker 1: apparatus out there right now the catalyst the incentives to

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Speaker 1: get one big M and A of the small camp space.

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Speaker 1: I mean, I think certainly you know M and A

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Speaker 1: it tends to be cyclical. So you know, while certainly

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Speaker 1: you're you're you can still see some some occurred during

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Speaker 1: during downturns, and that tends to pick up cyclically. Um.

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Speaker 1: You know that when we when you look for companies

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Speaker 1: that could be acquisition targets, that that tends to be

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Speaker 1: one eventual strategy and small caps um. But but I

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Speaker 1: think overall, right now we're seeing a broader picture of

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Speaker 1: you know, uncertainty, over cast, appointment from corporates. That's the

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Speaker 1: theme we're seeing this earning season where even though you know,

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Speaker 1: a lot of companies have have stopped, uh, you know,

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Speaker 1: a lot of the buyback and dividend suspensions may may

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Speaker 1: largely be behind us to the overall market. But I

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Speaker 1: but you'll, I'm I'm baffled by this in the small

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Speaker 1: cap space. If I'm at four times, ebata seven times,

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Speaker 1: but maybe even seven eight times. But uh, somebody at

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Speaker 1: Bank of America, one of your competitors, gets on the

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Speaker 1: phone and says, you can't grow yourself out of this merge.

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Speaker 1: Is that mechanism broken? I don't think it's broken. I think,

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Speaker 1: as you say, for for a lot of small caps,

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Speaker 1: there there are attractive acquisition targets. And this has been

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Speaker 1: a very good market for not only for stock picking,

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Speaker 1: but for just very differentiated uh, you know, valuations within

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Speaker 1: the market. So I think you know what one of

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Speaker 1: the things to to look at is is for small caps,

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Speaker 1: you know a lot of companies that that have you know,

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Speaker 1: attractive free cash flowd the ability to grow. Um. We

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Speaker 1: we've seen companies that are are very over levered within

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Speaker 1: small caps overall. So you know, I think kind of

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Speaker 1: separating out some of these metrics, and you know, just

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Speaker 1: as an investor looking at the small cap sized segment,

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Speaker 1: even if it's even if this is a point whereas

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Speaker 1: we expect value could continue to start to work, um,

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Speaker 1: you know, differentiating within small caps, what's more quality value

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Speaker 1: from you know, levered risk within small caps um and

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Speaker 1: companies that still do have that potential to grow. Jill,

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Speaker 1: since you're having a pretty cautious tone and a lot

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Speaker 1: of people come on this program and they say that

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Speaker 1: they're actually going more into small caps is a way

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Speaker 1: to capture some of the upside on this recovery. What

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Speaker 1: do you say against the argument that these companies will

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Speaker 1: benefit more from a week or dollar more from a

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Speaker 1: bigger resurgence internationally as a result of that. Yeah, I mean,

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Speaker 1: I think when we've you know, when small caps overall

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Speaker 1: have grown more internationally exposed over time, so the gap

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Speaker 1: between small and a large caps for and exposure has

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Speaker 1: has narrowed, they are still more domestically exposed. When we've

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Speaker 1: looked at the dollar versus relative performance over time, it

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Speaker 1: actually hasn't been very predictive. And that you know, you've

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Speaker 1: seen some periods of of secular dollar strength for small

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Speaker 1: caps of underperforms somewhere they've outperformed. So really, what we

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Speaker 1: found is that the overall economic backdrop and what's going

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Speaker 1: on UM tends to be more predictive than just the

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Speaker 1: level of the dollar itself. Still, what do you say

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Speaker 1: to people who have left off the idea of bankruptcy

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Speaker 1: or some sort of contagion among smaller companies saying the

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Speaker 1: FED has their back fiscal stimulus will also help support them.

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Speaker 1: Do you think that this optimistic view is perhaps overplayed

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Speaker 1: at this point? Well, I think, you know, certainly where

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Speaker 1: we expect to remain in a lower for longer rates backdrop,

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Speaker 1: we expect the FED to remain a comminative, but you know,

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Speaker 1: in terms of the unprecedented fiscal and monetary stimulus we've seen,

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Speaker 1: you know, one of the reasons that we're we're cautious

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Speaker 1: on the market and the spa hundred overall UM in

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Speaker 1: terms of not really expecting more more upside through year

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Speaker 1: end is that we expect there could be payback risk

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Speaker 1: from all the stimulus we've seen, and that a lot

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Speaker 1: of the biggest stimulus has largely been behind us and

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Speaker 1: certainly there's potential for more to to help the economy,

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Speaker 1: but um, you know, we we've seen diminishing returns from

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Speaker 1: stimulus in terms of the boosts we've seen to lower

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Speaker 1: quality stocks. As we've seen each consecutive instance, those get

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Speaker 1: less and less of a boost. So um, I think

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Speaker 1: it will remain in accommodative backdrop. But but a lot

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Speaker 1: of the biggest boost we've seen has been in the past.

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Speaker 1: We're seeing fighting collective will as well Joe Gright to

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Speaker 1: catch out with the Joe carry hole there of Bank America,

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Speaker 1: some k let's bringing prey, shall we see the Securities

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Speaker 1: Global head of Right Strategy joins us right now, Preya,

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Speaker 1: I think you agree with me that this is more

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Speaker 1: important than people are letting gone later today. What are

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Speaker 1: you looking for in the news conference with Chad jack

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Speaker 1: pal right, It's all going to be about the news

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Speaker 1: conference because I don't expect any changes in the statement.

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Speaker 1: We don't get the dot plot, we don't get projections,

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Speaker 1: So it's all about how does he set the stage

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Speaker 1: for forward guidance and how does he frame the que

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Speaker 1: You know, is QUEI all about market functioning? Because if

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Speaker 1: that's the case, and they should continue to buy across

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Speaker 1: the curve, but market functioning has largely returned to normal.

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Speaker 1: So are we going to see a reduction in quee.

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Speaker 1: I've actually been you know, reading between the lines. A

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Speaker 1: lot of the FED officials have been talking about more accommodation.

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Speaker 1: But one way they can provide more accommodation is to

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Speaker 1: change the narrative of que itself from being something about

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Speaker 1: market functioning, which it did a great job, but it's

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Speaker 1: it's sort of done. I think, to now provide accommodation

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Speaker 1: to keep long term rates low. I think if we

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Speaker 1: get that shift in narrative, the markets, uh, you know,

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Speaker 1: going to understand that the FED is going to move

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Speaker 1: further out the curve. That's going to help real rates

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Speaker 1: decline somewhere. I think we've started to price this in.

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Speaker 1: If you look across assets, the dollar, gold, real rates,

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Speaker 1: break evens all telling you that the markets setting up

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Speaker 1: for sort of hate saying normal but effectively normal queue,

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Speaker 1: which is that the the intent of QUEUEI is to

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Speaker 1: keep long term rate slow. I think we really need

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Speaker 1: to hear that from chap Out because we've been setting

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Speaker 1: up for that for the last couple of weeks. Pray

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Speaker 1: when you hear Governor brand and say things like we

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Speaker 1: need to shift away from stabilization to accommodation. Do you

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Speaker 1: hear yield curve control? I think she has been a

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Speaker 1: proponent of yield curve control, and we were thinking that

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Speaker 1: that's likely to happen this year, but from recent FED communication,

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Speaker 1: not everybody is on board. It's a completely new policy tool.

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Speaker 1: How do you get out of veek of control? So

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Speaker 1: I still think it's going to be in the policy

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Speaker 1: tool kit. But something they can do, you know, from

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Speaker 1: the existing tools is certainly link forward guidance to inflation,

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Speaker 1: effectively suggesting a much more dubbish reaction function. If they

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Speaker 1: have this reaction function in twenty they wouldn't have hyped

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Speaker 1: because core PC was significantly below too. So I think

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Speaker 1: they can do that with existing outcome based forward guidance.

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Speaker 1: They can also just shift that you need so effectively

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Speaker 1: provide accommodation, you know, giving them time until they actually

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Speaker 1: analyze eeek of control. I do think they may have

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Speaker 1: to do that next year. Have the idea that you

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Speaker 1: talked about this is huge, the idea that the FED

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Speaker 1: could come out and say we are going to actively

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Speaker 1: try to suppress longer term borrowing costs for the United States,

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Speaker 1: basically monetizing the United States dead. That would have a

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Speaker 1: torpedo effect on the dollar, wouldn't it. I think that

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Speaker 1: the part of the weakness and the dollar in the

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Speaker 1: last couple of weeks, I think is the market sort

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Speaker 1: of listening to the Fed and saying that's probably the

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Speaker 1: next step. So I but absolutely, I think if they're

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Speaker 1: very clear that they're going to keep long term rates low,

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Speaker 1: that should weaken the dollar. Now a lot with the dollar,

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Speaker 1: A lot does depend on, you know, what's happened happening globally.

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Speaker 1: If global growth is going to research, then that can

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Speaker 1: certainly take the dollar much weaker. I'm a little more pessimistic,

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Speaker 1: I think, you know, I'm not sure that global growth

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Speaker 1: necessarily picks up, so I think that ultimately will put

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Speaker 1: a floor on the dollar. Plus we have an election

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Speaker 1: coming up, so there's a lot of other things going

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Speaker 1: on with the dollar. To prey it's away from your remit,

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Speaker 1: but tell me about the labor economy. I mean, I'm sorry,

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Speaker 1: it's part of their mandate. It's not good. How do

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Speaker 1: you take the prism of the labor economy and folded

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Speaker 1: over in the lower for longer. So I think you

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Speaker 1: know clearly it's it's part of their mandate. When we

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Speaker 1: look at the labor market, I think we've seen the

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Speaker 1: improvement from reopening, also from stimulus, which is why this

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Speaker 1: whole stimulus discussion is important. Our fear is that the

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Speaker 1: labor economy is going to start to stall as we

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Speaker 1: realize that the were reopening to a new normal. There

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Speaker 1: will be parts of the labor economy that cannot get

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Speaker 1: back to normal because it's the social distancing, et cetera. Okay,

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Speaker 1: but three, this is important. I'm gonna make some news here.

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Speaker 1: Are you in the glide path of Steve Major at

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Speaker 1: HSBC or what we see out of some of the

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Speaker 1: people at JP Morgan of a lower ten ure yield

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Speaker 1: and even a ten ure yield that could threaten the

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Speaker 1: zero bound. Yes, I think for the zero bound it's

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Speaker 1: a little bit hard because the fact can just let

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Speaker 1: up on the amount that they're buying. But we actually

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Speaker 1: do see low a ten ye years in the near term.

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Speaker 1: I think August seasonals are typically positive. We're seeing the

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Speaker 1: recovery stall and you have a devilish fed that's going

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Speaker 1: to start buying out the curve. I think that's going

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Speaker 1: to actually uh tense, could absolutely touch bottom in the

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Speaker 1: very near term. Apprey, This is so so difficult for

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Speaker 1: a right strategist right now, for anyone in this bomb market.

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Speaker 1: We touched on this in the last hour. How do

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Speaker 1: you have some kind of call on the yield curve

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Speaker 1: when you can have a fat step in with yield

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Speaker 1: curve control? Even if you think inflation expectations going to

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Speaker 1: pick up because they'll tolerate higher inflation, haven't You just

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Speaker 1: got to follow the FED just the idea that whatever

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Speaker 1: the fat does is whether the yield curve is going

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Speaker 1: to go right? Well, I think there's a reaction function component.

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Speaker 1: Then there's the actual economic data, and I think what

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Speaker 1: we're all struggling with is we can't extrapolate from any

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Speaker 1: of the economic data we've been seen, right because the

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Speaker 1: weakness was all about the lockdown. Now the improvement seems

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Speaker 1: to be all about reopening. So we're looking at these

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Speaker 1: high frequency measures to try and estimate is the recovery stalling.

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Speaker 1: We're all becoming epidemiologists. We're looking at the virus rate,

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Speaker 1: death rate and for depressing topics. But you know, once

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Speaker 1: you have that If the FED clarifies the reaction function,

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Speaker 1: the market can then start to look at the data

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Speaker 1: and then start to price in what happens to rates.

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Speaker 1: But you know, we're also looking at supply demand. If

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Speaker 1: we're going to get another one and a half trillion

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Speaker 1: more of supply, then I think this thread buying becomes

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Speaker 1: extremely critical to pick what you know, how well, where

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Speaker 1: exactly is the tenure? What does that heal curve look like?

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Speaker 1: You're right, more variables to look at now where we're

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Speaker 1: all coming up at the biologists because this is a

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Speaker 1: health problem, it's not a financial system problem. And I

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Speaker 1: have to wonder if the FED comes out and provides

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Speaker 1: even more accommodation, what does that do at this point

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Speaker 1: with your record low borrowing costs across the board? I

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Speaker 1: think it buys time. Does it prevent something like a

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Speaker 1: taper tantrum? Let's say we get a vaccine soon, and

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Speaker 1: I hope that we do. We get a vaccine, but

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Speaker 1: it's going to take a while for that to you know,

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Speaker 1: be effective, for for consumer confidence, business confidence to come back.

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Speaker 1: I think where the FED can absolutely help keep things

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Speaker 1: accommodative until we can get the public health response, until

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Speaker 1: we realize that actually we're going back to normal, then

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Speaker 1: they can take it back. I think that's the key,

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Speaker 1: just to prevent some sort of big tightening in conditions

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Speaker 1: because suddenly there's optimism about a vaccine. I think so,

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Speaker 1: so they can be more preemptive. It can just at

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Speaker 1: least ashore the market, takers premium out and help risk asses.

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Speaker 1: And they've done a great job so far. But I

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Speaker 1: think they may have to do more on treasuries, even

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Speaker 1: how much supply is going to come down the pike.

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Speaker 1: You know, I love catching up with you. We love

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Speaker 1: catching up with the prayer mess, with that of tad securities.

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Speaker 1: You have gotten a pologust like something. This is Dennis

415
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Speaker 1: Curbon out of retirement, off the golf course and John

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Speaker 1: this is without question the most important conversation in gold

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Speaker 1: in the week, the month, and indeed the quarter. This

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Speaker 1: is equivalent to Gary shilling on low interest rates, a

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Speaker 1: major shout out to the bulls in the equity market.

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Speaker 1: Someone like Ben Laidler at Tower Hudson Garmin nailed gold.

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Speaker 1: He went't even further and said not only owned gold,

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Speaker 1: but own it yen in euro And we get an

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Speaker 1: update this morning from Mr Gartman, Dennis, I believe off

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Speaker 1: your reports you are out of gold. How could Gartman

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Speaker 1: be out of gold? Well, let's I'm practicing social distancing

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Speaker 1: in the gold market. That it has become a little

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Speaker 1: too crowded, and is uh? I think it is Jogi Berra,

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Speaker 1: Who's who was talking about a restaurant one time in

429
00:22:25,280 --> 00:22:28,480
Speaker 1: New York who said, nobody goes there anymore. It's too crowded.

430
00:22:28,880 --> 00:22:31,720
Speaker 1: It's become awfully crowded. The boat has become very crowded,

431
00:22:31,720 --> 00:22:34,800
Speaker 1: too many people involved. I couldn't get people interested in

432
00:22:34,880 --> 00:22:38,640
Speaker 1: gold of consequence two and three years ago, and now

433
00:22:38,680 --> 00:22:40,800
Speaker 1: it's front page too. Is now it's the front page

434
00:22:40,800 --> 00:22:42,720
Speaker 1: of every report that you see, It's the front page

435
00:22:42,720 --> 00:22:45,199
Speaker 1: of magazines, it's the lead article on and and the

436
00:22:45,280 --> 00:22:47,679
Speaker 1: radio and television. And I think it's just become a

437
00:22:47,680 --> 00:22:50,400
Speaker 1: bit too crowded, that's all. How much of a pullback

438
00:22:50,480 --> 00:22:55,080
Speaker 1: do you need to see to become enthusiastic again? Well,

439
00:22:55,119 --> 00:22:57,760
Speaker 1: first of all, there let's say that I always told

440
00:22:57,760 --> 00:22:59,680
Speaker 1: people who in a bull market there are three positions.

441
00:22:59,680 --> 00:23:03,040
Speaker 1: One can have really long, modestly longer neutral, And this

442
00:23:03,040 --> 00:23:05,040
Speaker 1: point on gold, I'm neutral. How far down do I

443
00:23:05,040 --> 00:23:07,320
Speaker 1: think I need to see it go. Well, we're trading

444
00:23:07,320 --> 00:23:11,399
Speaker 1: close to fifty five I think just a few seconds ago. Uh,

445
00:23:11,480 --> 00:23:14,600
Speaker 1: if we traded back to seventeen seventy five, eighteen and

446
00:23:14,640 --> 00:23:16,960
Speaker 1: a quarter, I'd be a buyer. Noah sends or bus

447
00:23:17,000 --> 00:23:18,359
Speaker 1: about it. And do I think that we'll get that

448
00:23:18,440 --> 00:23:20,800
Speaker 1: kind of correction? Yes, I think we will do I

449
00:23:21,440 --> 00:23:24,000
Speaker 1: can I tell where if it gets to seventeen seventy five,

450
00:23:24,760 --> 00:23:27,159
Speaker 1: is that reasonable? I'll just simply say a hundred dollars

451
00:23:27,160 --> 00:23:29,520
Speaker 1: from from any interim high, and I'm a buyer. Again.

452
00:23:29,600 --> 00:23:32,480
Speaker 1: What's the catalyst for us el off? Just the fact

453
00:23:32,480 --> 00:23:35,520
Speaker 1: that the market is way too crowded, too many people involved.

454
00:23:35,560 --> 00:23:38,960
Speaker 1: Nothing more than that. Sometimes that's all one needs. You

455
00:23:39,040 --> 00:23:43,520
Speaker 1: might see if had become less accommodative, discussing perhaps a

456
00:23:43,520 --> 00:23:47,520
Speaker 1: a a less expansionary policy towards its balance sheet, some

457
00:23:47,560 --> 00:23:49,840
Speaker 1: sort of comment from a Federati official might do it.

458
00:23:50,440 --> 00:23:53,080
Speaker 1: A turnaround in the dollar to a stronger dollar, which

459
00:23:53,080 --> 00:23:55,320
Speaker 1: I don't think is going to happen, that might do it.

460
00:23:55,800 --> 00:23:58,440
Speaker 1: Weakness in the stock market that might do it. There's

461
00:23:58,440 --> 00:24:00,199
Speaker 1: a number of things, but let's just simply say too

462
00:24:00,240 --> 00:24:03,280
Speaker 1: many people are all of a sudden all involved in

463
00:24:03,320 --> 00:24:05,480
Speaker 1: the in the gold market, that there's only one position

464
00:24:05,480 --> 00:24:07,560
Speaker 1: that everybody has that's long and I think that's just

465
00:24:08,040 --> 00:24:10,040
Speaker 1: people have to be taken out of that trade. Dennis,

466
00:24:10,119 --> 00:24:13,760
Speaker 1: weakness in the stock market causing a sell off in gold,

467
00:24:13,840 --> 00:24:17,080
Speaker 1: does this mean that the correlation between gold and a

468
00:24:17,200 --> 00:24:21,760
Speaker 1: risk off feeling markets is broken? Well, it's interesting. Sometimes

469
00:24:21,760 --> 00:24:24,919
Speaker 1: golden stocks go up together, sometimes golden stocks going contravention

470
00:24:25,000 --> 00:24:27,480
Speaker 1: one to another. For the past several months, they've been

471
00:24:27,480 --> 00:24:29,959
Speaker 1: moving in convention one with the other. As gold has

472
00:24:30,000 --> 00:24:32,000
Speaker 1: gone up, so has stocks. And stocks has gone up

473
00:24:32,280 --> 00:24:34,560
Speaker 1: have gone up, so has gold. But I do think

474
00:24:34,600 --> 00:24:37,800
Speaker 1: that there's a great probability that that conventional movement, that

475
00:24:37,800 --> 00:24:41,199
Speaker 1: that consistency between the two shall shall continue for a

476
00:24:41,200 --> 00:24:43,800
Speaker 1: while longer. So if if the stock market, and I

477
00:24:43,800 --> 00:24:46,639
Speaker 1: think stocks are extremely expensive, if stocks start to tumble,

478
00:24:46,920 --> 00:24:49,920
Speaker 1: you'll get a correlative sell off in the gold market.

479
00:24:50,040 --> 00:24:53,080
Speaker 1: What people don't understand, folks, is a Dennis Garment newsletter

480
00:24:53,240 --> 00:24:56,040
Speaker 1: was ten twelve, fourteen pages long each day. In the

481
00:24:56,080 --> 00:24:59,680
Speaker 1: back three or four pages were on the political philosophy

482
00:24:59,840 --> 00:25:02,600
Speaker 1: of this nation. Dennis, I know there's gonna be four

483
00:25:02,680 --> 00:25:05,840
Speaker 1: hipsters in front of Congress today rumor has that you're

484
00:25:05,840 --> 00:25:08,480
Speaker 1: going to be the fifth horseman, and you're not there.

485
00:25:09,000 --> 00:25:12,840
Speaker 1: But what is Congress doing going after the value add

486
00:25:12,960 --> 00:25:18,440
Speaker 1: capitalism that we've seen out of silicon technology. It's ill advised,

487
00:25:18,480 --> 00:25:20,080
Speaker 1: it's a bad decision, but they're going to do it

488
00:25:20,080 --> 00:25:22,360
Speaker 1: anyway because that's the left wing phenomenon, that the left

489
00:25:22,359 --> 00:25:24,639
Speaker 1: wing philosophy that seems to dominate the news media at

490
00:25:24,640 --> 00:25:26,720
Speaker 1: this point. So it's going to be I think it'll

491
00:25:26,840 --> 00:25:30,280
Speaker 1: it'll be terribly ugly, ugly, almost as ugly as what

492
00:25:30,280 --> 00:25:32,760
Speaker 1: we watched yesterday with the attacks upon Mr Barr. So this,

493
00:25:32,880 --> 00:25:34,399
Speaker 1: I don't think it's going to be a very pretty

494
00:25:34,480 --> 00:25:37,320
Speaker 1: day for the to be a social they handle it howl,

495
00:25:37,359 --> 00:25:39,480
Speaker 1: you mean you and I remember the Bloomberg headline with

496
00:25:39,560 --> 00:25:43,359
Speaker 1: the Justice Department walked away from the Microsoft litigation of

497
00:25:43,440 --> 00:25:46,520
Speaker 1: years ago, A T and T, et cetera. What's your

498
00:25:46,520 --> 00:25:50,000
Speaker 1: advice to these guys over lobbied over expert about how

499
00:25:50,000 --> 00:25:54,000
Speaker 1: to patiently get through this. That's exactly what they should do.

500
00:25:54,080 --> 00:25:56,760
Speaker 1: Patiently get to it. Try not to smirk, try not

501
00:25:56,800 --> 00:25:58,640
Speaker 1: to laugh, try not to get up and walk out,

502
00:25:59,040 --> 00:26:01,639
Speaker 1: answer the questions with yes and no answers, and be

503
00:26:01,720 --> 00:26:04,080
Speaker 1: as genteel and as southern as you possibly can be.

504
00:26:04,440 --> 00:26:07,000
Speaker 1: It will be very difficult. Gentele and southern. Will you

505
00:26:07,000 --> 00:26:08,840
Speaker 1: own that? Dennis? Dennis, I want to go back to

506
00:26:08,880 --> 00:26:11,920
Speaker 1: the equity markets where Lisa was before. You say they're

507
00:26:11,960 --> 00:26:14,800
Speaker 1: over priced, but they have a bid. I have to

508
00:26:14,840 --> 00:26:17,960
Speaker 1: participate in a four oh one K. I'm not trading

509
00:26:18,080 --> 00:26:21,400
Speaker 1: like Doug cass or you were, you know, the day traders.

510
00:26:21,440 --> 00:26:23,439
Speaker 1: I know you're on the couch Mrs Garbins, on the

511
00:26:23,480 --> 00:26:26,399
Speaker 1: couch doing the robin Hood thing. If I'm in a

512
00:26:26,440 --> 00:26:29,679
Speaker 1: four oh one K, I have to participate. How do

513
00:26:29,800 --> 00:26:32,280
Speaker 1: I do that? Well? I think you should still be.

514
00:26:32,480 --> 00:26:34,080
Speaker 1: It is still a bowl market, and it's still a

515
00:26:34,080 --> 00:26:37,080
Speaker 1: long term bed on the benefits and the attributes of

516
00:26:37,119 --> 00:26:39,800
Speaker 1: the American system over long periods of time. It will

517
00:26:39,840 --> 00:26:42,440
Speaker 1: still be five years from now stocks will be from

518
00:26:42,440 --> 00:26:43,960
Speaker 1: the lower left to the upper right from where they

519
00:26:43,960 --> 00:26:46,480
Speaker 1: are now, Shall they be from the lower left to

520
00:26:46,480 --> 00:26:48,000
Speaker 1: the up right in the next six months? I have

521
00:26:48,119 --> 00:26:50,959
Speaker 1: my doubts. And if you're long, if you're overly exposed,

522
00:26:51,359 --> 00:26:54,200
Speaker 1: I think being somewhat less exposed. After a thirty seven

523
00:26:54,320 --> 00:26:56,199
Speaker 1: or thirty eight percent rally in the NASDAC in the

524
00:26:56,240 --> 00:26:59,000
Speaker 1: court the last three months. Probably makes sense to take

525
00:26:59,040 --> 00:27:01,320
Speaker 1: some of that off the table. Raise a little cash

526
00:27:01,840 --> 00:27:04,520
Speaker 1: can't hurt you at all. Dennis Lisa emails in from

527
00:27:04,520 --> 00:27:07,119
Speaker 1: surveillance and says, when you get a chance, Dennis, tell

528
00:27:07,200 --> 00:27:09,959
Speaker 1: us when to go along gold again. Mr Gartman just

529
00:27:10,280 --> 00:27:13,520
Speaker 1: brilliant on the moonshot that we've seen on gold in

530
00:27:13,680 --> 00:27:21,400
Speaker 1: Yen and in euro as well. Francine Lakwan, London, I'm

531
00:27:21,440 --> 00:27:25,720
Speaker 1: Tom Keane in New York. He is the Richmond Fed.

532
00:27:25,800 --> 00:27:27,879
Speaker 1: There was a gentleman named Mr Black, and then there

533
00:27:27,920 --> 00:27:30,800
Speaker 1: was Al brought us, and then onto Jeffrey Lacker. But

534
00:27:30,920 --> 00:27:34,040
Speaker 1: the character and true fabric of the Richmond Fed is

535
00:27:34,080 --> 00:27:36,600
Speaker 1: always in will be Al brought us where thrilled he

536
00:27:36,600 --> 00:27:39,520
Speaker 1: could join us today. Hell, you've never seen a deficit

537
00:27:39,720 --> 00:27:44,680
Speaker 1: like this. How does the deficit growth, the deficit sustainability,

538
00:27:45,040 --> 00:27:48,520
Speaker 1: the deficit reality that we have, how does it change

539
00:27:48,520 --> 00:27:52,480
Speaker 1: the dialogue at the eCos building? Well, you know, I

540
00:27:52,520 --> 00:27:57,160
Speaker 1: think UH Anonymous are comfortable with these deficits, That's that's

541
00:27:57,200 --> 00:28:02,840
Speaker 1: for sure. But I think it's well recognized that this

542
00:28:02,920 --> 00:28:05,719
Speaker 1: is just a really unusual situation and I don't need

543
00:28:05,800 --> 00:28:09,399
Speaker 1: to Maybe we've people talk about this uh endlessly on

544
00:28:09,440 --> 00:28:12,560
Speaker 1: your program and elsewhere. Uh, and you got you got

545
00:28:12,600 --> 00:28:15,120
Speaker 1: to deal with it with policy in a really wholesale way.

546
00:28:15,160 --> 00:28:17,360
Speaker 1: And they've done that, and I think I think so

547
00:28:17,400 --> 00:28:22,040
Speaker 1: far the progress has been has been cool. Uh. So

548
00:28:22,560 --> 00:28:26,359
Speaker 1: I think the general thinking around that table probably is

549
00:28:26,400 --> 00:28:29,320
Speaker 1: we don't we're not comfortable with these deficits. Uh, but

550
00:28:29,400 --> 00:28:31,159
Speaker 1: we're gonna have to live with them for a while

551
00:28:31,359 --> 00:28:34,800
Speaker 1: and hopefully, uh, you know, we'll we'll deal with bringing

552
00:28:34,800 --> 00:28:39,640
Speaker 1: them down when the economic situation and the driver, which

553
00:28:39,640 --> 00:28:43,720
Speaker 1: is pandemic gets uh, gets to a point where we

554
00:28:43,720 --> 00:28:45,840
Speaker 1: we have the opportunity to do that. For now, I

555
00:28:45,880 --> 00:28:48,840
Speaker 1: think it's just steady as she goes. The academics of

556
00:28:48,880 --> 00:28:52,160
Speaker 1: the Richmond FED has been so varied and interesting. But

557
00:28:52,200 --> 00:28:56,040
Speaker 1: if your color and combined together Richmond, Atlanta, maybe Bob

558
00:28:56,120 --> 00:28:59,120
Speaker 1: McTeer and the Georgia School to Dallas FED as well.

559
00:28:59,560 --> 00:29:03,560
Speaker 1: There's a huge body the American public that's grievously concerned

560
00:29:04,040 --> 00:29:08,440
Speaker 1: about deficit build up. Can you support trillions of dollars

561
00:29:08,440 --> 00:29:14,200
Speaker 1: of additional stimulus to overlay over what Chairman Powell is doing?

562
00:29:16,120 --> 00:29:18,440
Speaker 1: I think we have I think at this point we

563
00:29:18,480 --> 00:29:21,160
Speaker 1: really don't have a lot of choice. UH. And I

564
00:29:21,200 --> 00:29:25,000
Speaker 1: think many of the most recent statements by reserve back

565
00:29:25,040 --> 00:29:29,640
Speaker 1: presidents now on the committee have been calling for uh

566
00:29:29,960 --> 00:29:36,920
Speaker 1: continued fiscal stimulus. I think there's gonna be some concern

567
00:29:36,960 --> 00:29:42,640
Speaker 1: it to fed about the difficulty of getting this current uh,

568
00:29:42,680 --> 00:29:46,080
Speaker 1: the division between the House and the Senate UH corrected,

569
00:29:46,240 --> 00:29:51,160
Speaker 1: and and and and done. Uh, but that's gonna answer

570
00:29:51,240 --> 00:29:53,200
Speaker 1: the deficit. And I just have to go back to

571
00:29:53,200 --> 00:29:56,120
Speaker 1: what I said a minute ago. UH. We're not used

572
00:29:56,160 --> 00:29:59,440
Speaker 1: to it, we don't like it. UH, but we've got

573
00:29:59,440 --> 00:30:02,960
Speaker 1: to live with that, UH until we get a good

574
00:30:03,080 --> 00:30:07,360
Speaker 1: solid floor under the economy. Hopefully the path of the

575
00:30:07,360 --> 00:30:10,920
Speaker 1: pandemic will make it possible to do this with less

576
00:30:11,200 --> 00:30:14,560
Speaker 1: future further build up as we moved through the second

577
00:30:14,600 --> 00:30:19,520
Speaker 1: half of the year and into UH. But UH, you know,

578
00:30:19,600 --> 00:30:22,040
Speaker 1: if if things do go south with that, we have

579
00:30:22,120 --> 00:30:24,640
Speaker 1: to be prepared for that. And I think what's happening

580
00:30:24,640 --> 00:30:28,160
Speaker 1: now is we're trying to prevent that from getting any worse.

581
00:30:28,200 --> 00:30:31,880
Speaker 1: And that's full the job one UH and bringing the look.

582
00:30:31,920 --> 00:30:33,680
Speaker 1: I don't like deficits. I think you know that. I

583
00:30:33,680 --> 00:30:36,720
Speaker 1: don't like the inflict the potential inflation of longer term

584
00:30:36,720 --> 00:30:41,040
Speaker 1: inflationary implications of high DEFICUS and the fact that the

585
00:30:41,080 --> 00:30:45,800
Speaker 1: FED is essentially monetizing a lot of this. But you know,

586
00:30:45,840 --> 00:30:49,840
Speaker 1: you've got to prioritize. We've got to get the weakness

587
00:30:49,840 --> 00:30:54,520
Speaker 1: in the economy undergird it so that we can look

588
00:30:54,560 --> 00:30:58,120
Speaker 1: forward to the day when we'll get we'll see more

589
00:30:58,160 --> 00:31:01,360
Speaker 1: growth of the economy and that just we'll just naturally

590
00:31:01,400 --> 00:31:06,080
Speaker 1: begin to go down. Mr Brods, When will we see

591
00:31:06,440 --> 00:31:11,640
Speaker 1: a much stronger U S economy? A good question that

592
00:31:11,840 --> 00:31:15,480
Speaker 1: a lot is going to depend. There's several possibilities to

593
00:31:15,560 --> 00:31:20,200
Speaker 1: start to start and oversure UH. And again, I think

594
00:31:20,240 --> 00:31:23,120
Speaker 1: it comes back to the path of the pandemic and

595
00:31:23,360 --> 00:31:25,960
Speaker 1: how we deal with that. I think maybe it was

596
00:31:26,480 --> 00:31:29,760
Speaker 1: Robert Kaplan, the Dallas FED president. I'm not sure that

597
00:31:30,560 --> 00:31:33,920
Speaker 1: one of the UH current reserved back president said that

598
00:31:33,920 --> 00:31:38,000
Speaker 1: the Really maybe it was Eric in Boston made the

599
00:31:38,080 --> 00:31:42,440
Speaker 1: point that the best economic tool now is the things

600
00:31:42,520 --> 00:31:44,880
Speaker 1: we're trying to do to get the pandemic under control

601
00:31:44,920 --> 00:31:48,440
Speaker 1: of bend the curve down. UH. So hopefully we'll have

602
00:31:48,520 --> 00:31:51,040
Speaker 1: some success. We have had a tough time for the

603
00:31:51,080 --> 00:31:54,400
Speaker 1: last couple of months with that not much success UH.

604
00:31:54,440 --> 00:31:56,240
Speaker 1: And you begin to see I think it's some of

605
00:31:56,280 --> 00:31:58,720
Speaker 1: the most recent data. I'm no expert on this, but

606
00:31:59,400 --> 00:32:01,360
Speaker 1: some of the most recent data I was looking at

607
00:32:01,560 --> 00:32:05,640
Speaker 1: listening about yesterday, maybe a little bit of progress in

608
00:32:05,640 --> 00:32:10,720
Speaker 1: the Southern States towards easing the caseload increase. If that

609
00:32:10,920 --> 00:32:13,840
Speaker 1: were to turn into something like a trend, that would

610
00:32:13,880 --> 00:32:16,760
Speaker 1: make a huge difference and make our job a lot

611
00:32:16,800 --> 00:32:19,320
Speaker 1: easier and make the day when we begin to grow

612
00:32:19,360 --> 00:32:23,880
Speaker 1: again come sooner rather than the later. You mentioned that

613
00:32:23,960 --> 00:32:27,800
Speaker 1: you're worried about inflation. You're worried about these deficits. When

614
00:32:27,840 --> 00:32:31,680
Speaker 1: do investors start worrying about that? Well, you know, I

615
00:32:31,680 --> 00:32:33,960
Speaker 1: think some investors are already worrying about it. I think

616
00:32:34,000 --> 00:32:35,600
Speaker 1: some of the run up in the price of go

617
00:32:35,680 --> 00:32:41,400
Speaker 1: will probably reflects concern on the potusan some investors. I

618
00:32:41,440 --> 00:32:44,400
Speaker 1: don't want to suggest here that I think inflation is

619
00:32:44,440 --> 00:32:49,440
Speaker 1: a clear at present current danger. I don't expect to see. Actually,

620
00:32:49,440 --> 00:32:52,480
Speaker 1: what we would like to see as an increase with

621
00:32:52,640 --> 00:32:55,640
Speaker 1: the PI. Would really like to see is an increase

622
00:32:55,720 --> 00:33:00,280
Speaker 1: in the underlying trend rate of inflation back up close

623
00:33:00,320 --> 00:33:02,400
Speaker 1: to the two percent target. I think that would make

624
00:33:02,920 --> 00:33:07,920
Speaker 1: conducting monetary policy a lot easier. But you know, if

625
00:33:07,960 --> 00:33:11,520
Speaker 1: that we begin to see a movement in that direction

626
00:33:11,560 --> 00:33:15,520
Speaker 1: at some point, probably more than a year further down

627
00:33:15,520 --> 00:33:18,400
Speaker 1: the road, and then you could begin to see some

628
00:33:18,560 --> 00:33:22,360
Speaker 1: upside risk on the inflation up front. But that's for

629
00:33:22,400 --> 00:33:24,640
Speaker 1: the future. Have to look forward to it, have to

630
00:33:24,680 --> 00:33:28,080
Speaker 1: be aware of it. But that's does something that the

631
00:33:28,120 --> 00:33:30,240
Speaker 1: FEBLE have to deal with in the future. Right now

632
00:33:30,320 --> 00:33:34,120
Speaker 1: that I think the key thing is to get the

633
00:33:34,160 --> 00:33:39,480
Speaker 1: inflation rate up and bring it closer to the two

634
00:33:39,480 --> 00:33:43,880
Speaker 1: percent target. The FED give you a long answer, but

635
00:33:44,000 --> 00:33:47,600
Speaker 1: the Fed UH at this meeting, it's going to be discussing,

636
00:33:48,120 --> 00:33:50,960
Speaker 1: I think the kind of strategy it wants to follow

637
00:33:51,800 --> 00:33:54,720
Speaker 1: to ensure that something like that happens. We have an

638
00:33:54,760 --> 00:33:57,880
Speaker 1: inflation target at two percent, but I think it's going

639
00:33:57,960 --> 00:34:00,720
Speaker 1: to be discussion about the possibility to going to something

640
00:34:01,440 --> 00:34:04,800
Speaker 1: call it average inflation targeting, which would allow the inflation

641
00:34:04,920 --> 00:34:08,200
Speaker 1: rate for a period of time to move above two

642
00:34:08,239 --> 00:34:12,719
Speaker 1: percent UH in order to get us a bet our

643
00:34:12,800 --> 00:34:16,560
Speaker 1: inflation tracts. Al brought us. Thank you so much for

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Speaker 1: joining us today. He's the former Richmond to the FED President.

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Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and

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Speaker 1: the podcast. You can always catch us worldwide. I'm Bloomberg

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Speaker 1: Radio