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

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

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Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business app,

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Speaker 1: Listen on demand wherever you get your podcasts, or watch

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Speaker 1: us live on YouTube.

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Speaker 2: The hallmark of Bloomberg's surveillance is we rip up the

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Speaker 2: script when we have to.

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Speaker 3: We do that now.

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Speaker 2: I was going to go to Sebastian Page and something

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Speaker 2: else towards to the slack of Apollo Publishing. Moments ago,

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Speaker 2: Sebastian Page a tiro price with US. Yours workers contributed

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Speaker 2: eighty five hundred to their four oh one k accounts,

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Speaker 2: seventy one percent of the assets allocated to equities the

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Speaker 2: Magnificent Seven I have a forty percent weight SMP five hundred.

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Speaker 2: The bottom line is that each worker in the US

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Speaker 2: puts an estimated two three hundred dollars into mag seven

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Speaker 2: stocks every year. The dangers are passive investing. How do

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Speaker 2: we have a perfect guest for this subgest to discuss.

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Speaker 4: Well, we're at an all time high or close to

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Speaker 4: it in terms of the concentration of the markets, and

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Speaker 4: that is a risk. I think Torsen makes a point

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Speaker 4: here where you keep getting inflows into market capitalization weights

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Speaker 4: and in the sense itself reinforcing. My view is it

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Speaker 4: is in part contributing to this all time high market concentration,

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Speaker 4: except those companies are pretty great.

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Speaker 2: On a physics basis, like in your fabulous book on diversification.

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Speaker 2: On a physics basis basis, it's an inertial force. How

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Speaker 2: much of a draw down do we need to see

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Speaker 2: where we break that inertial constructive force five percent ten

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Speaker 2: percent bear market?

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Speaker 4: Well, it's interesting the way you phrased the question, how

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Speaker 4: much of a draw down do we need to get

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Speaker 4: the market broadening? That's an assumption we're making, and I

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Speaker 4: think it's the right one that in a drawdown we

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Speaker 4: will see broadening. If you look at how value stocks

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Speaker 4: have been behaving over the last two three years, every

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Speaker 4: time we get a three to four percent move daily

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Speaker 4: on the downside, value stocks outperform. So my view is

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Speaker 4: that a big drawdout in the markets would be almost

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Speaker 4: mathematically has to be driven by maybe an AI scare

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Speaker 4: something going on to unwine market concentration.

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Speaker 2: By the way, right now, in.

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Speaker 4: Our scation portfolios, we're long diversification. What's that So we

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Speaker 4: have an overweight to non US stocks. We like US

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Speaker 4: stocks for the long run, but right now, if you

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Speaker 4: look at the fundamentals outside the US, the valuation and

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Speaker 4: some macro catalysts, increased spending in Europe, still duvish central banks,

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Speaker 4: it all lines up for a continued performance over the say,

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Speaker 4: the next six to twelve months of non US stocks.

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Speaker 4: We also like the value in schmid sectors outside the US.

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Speaker 4: That's how we're playing most of our diversification in credit.

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Speaker 4: We also like a broad set of credit exposures on

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Speaker 4: the fixed income side.

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Speaker 5: And just going on the fixed income space, on the

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Speaker 5: credit side, the best performing sector has been u US

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Speaker 5: high yield. So it doesn't seem like the market's too

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Speaker 5: concerned about, at least in the fixed income market, the

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Speaker 5: highild market, about the reception scenarios out there.

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Speaker 4: It's fascinating how tight spreads are. And as valuation sensitive investors,

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Speaker 4: we still have a long credit exposure because and our

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Speaker 4: head of high yield keeps reminding our asset allocation committee

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Speaker 4: every time. This is not the same asset class that

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Speaker 4: it used to be. So if you draw a chart

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Speaker 4: of high yield spreads over time, and you look at

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Speaker 4: where spreads were in prior market cycles. You're looking at

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Speaker 4: a different index. You're looking at an index that is

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Speaker 4: lower quality, more energy sensitive. We do at thial price

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Speaker 4: a bottom up analysis of sure level default probabilities, so

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Speaker 4: we build it up for the entire index, and those numbers,

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Speaker 4: based on our assumptions are lower than the norm, slightly

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Speaker 4: lower than the Norman, definitely not recession level.

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Speaker 3: I know.

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Speaker 5: I'm just looking at your notes that you've been traveling

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Speaker 5: a lot, meeting with your t row too much rice clients.

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Speaker 2: I'm guessing he's trying to find middle relief for the

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Speaker 2: Baltimore Orioles exactly.

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Speaker 5: I'm guessing one of the questions you get is are

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Speaker 5: we in a bubble in the US equity markets? How

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Speaker 5: do you respond to them?

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Speaker 4: I saw That's what Demo darn, who's I think a

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Speaker 4: reference in terms of valuation in the media saying I'm

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Speaker 4: not using the B word, And his argument is the

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Speaker 4: earnings are there, the earnings growth is there. As we

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Speaker 4: go into the third quarter. I get my Jonathan Gollub

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Speaker 4: earnings email this morning. If he's eating but he's he's

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Speaker 4: looking at he goes nine percent your verear growth still

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Speaker 4: and with twelve percent he's expecting with the surprises. So

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Speaker 4: the earnings are there. So Demo Darn's out there saying

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Speaker 4: we're not in a bubble. I'm not using that word yet.

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Speaker 2: I see we got to run here. But Sebastian, we

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Speaker 2: alught to get you back for a long, long segment

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Speaker 2: highlighting the intelligence of your book. But let me cut

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Speaker 2: to the chase. The uproar of the anti worry crew

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Speaker 2: of AI. Was there an equivalent in two thousand, I

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Speaker 2: don't recall it.

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Speaker 4: See that is such an interesting point about sentiment when

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Speaker 4: I was thinking about this in my way here this morning,

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Speaker 4: what everybody thinks we might be in a bubble. Counternatively,

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Speaker 4: that's kind of a good thing. It means there's some conservatives.

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Speaker 4: Late nineties, it was really you have to travel back

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Speaker 4: in time and put yourself there. Just remove the hindsight

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Speaker 4: bias that all this went berserk and it blew up.

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Speaker 4: In the late nineties, people believed it. People believed it,

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Speaker 4: and so now it's so different in a way, similar

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Speaker 4: in certain ways, but different in the sense that those

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Speaker 4: are cash flow generating businesses, not finance.

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Speaker 2: With that come back soon, Sebastian page with this price here.

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

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

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

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Speaker 1: Applecarplay and Android Otto with the Bloomberg Business app, or

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Speaker 1: watch us live on YouTube.

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Speaker 2: Joining us Jake Timmins, President, chief executive Officer of the

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Speaker 2: National Association of Manufacturers. And this is great, folks. He's

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Speaker 2: got this bio that's like six pages long. And Lisa

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Speaker 2: just like, I mean, this is what Sweeney would expect. Paragraph, paragraph, paragraph,

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Speaker 2: and then there's a single line and then there's more paragraphs.

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Speaker 2: The single line as I went to the Ohio State

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Speaker 2: Ohio State University. You know, Jake, the last time you

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Speaker 2: were in was ride. We've got a huge response and

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Speaker 2: the bottom line is you are hardwired. You're in Virginia now.

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Speaker 2: The corporate thing and that with the National Association of Manufacturers,

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Speaker 2: but you understand the tradition of Detroit down the interstates

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Speaker 2: in manufacturing America. What's a number one myth that the

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Speaker 2: public gets wrong about manufacturing in America.

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Speaker 6: Well, that it's taken for granted, right that that we're

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Speaker 6: always going to be making things, and that's not necessarily

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Speaker 6: the case. You got to have the right policies in place.

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Speaker 6: And we've had a we've had a run of really

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Speaker 6: good policies this year that that has helped manufacturers have

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Speaker 6: more confidence in investing and hiring in America. But those

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Speaker 6: things aren't you know, those things aren't given. Uh, it

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Speaker 6: should never be taken for granted.

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Speaker 5: So talk to us about the manufacturing economy in the

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Speaker 5: US right now. It's in contraction, it's been for a while.

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Speaker 5: Talk to us about what you're seeing at there.

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Speaker 6: Yeah, you know, it's funny because you do see that

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Speaker 6: that data, there's no question about that, Paul. But I

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Speaker 6: hear from my members. We just had a board meeting

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Speaker 6: last week. I've got a very small, discrete board of directors,

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Speaker 6: two hundred and fifty members of.

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Speaker 2: America's industrial It's a lot of art.

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Speaker 6: It's like a little congress, but you get a lot of.

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Speaker 2: Great We call it the French government actually continue.

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Speaker 6: Well, I'm hoping we have more stability than that one.

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Speaker 6: So what I'm hearing from them is a lot of optimism.

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Speaker 6: Right that we have the conditions that are ripe for

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Speaker 6: investment and job creation, but there is still some pause

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Speaker 6: in that, and especially when it comes to tariffs and

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Speaker 6: workforce policies.

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Speaker 5: So how are the manufacturers out there dealing with the

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Speaker 5: uncertainty with teriffs, maybe the workforce issues with migrant labor

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Speaker 5: no longer being a supply of labor, how are they

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Speaker 5: dealing with that?

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Speaker 6: Yeah, So it's an interesting conundrum for manufacturers because manufacturers

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Speaker 6: by and large, certainly from what I've seen, and of

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Speaker 6: course there are always options, but I've always seen manufacturers

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Speaker 6: following the rules there by the book.

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Speaker 2: They're hiring legal.

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Speaker 6: You know, labor that has all the bright papers. But

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Speaker 6: when other sectors of the economy see a hollowing out

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Speaker 6: of some of their workers, we're suddenly competing for labor.

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Speaker 6: And today we've got four hundred thousand open jobs in

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Speaker 6: the sector. And we've talked about in the past, Tom

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Speaker 6: and we're always trying to attract that next generation. That

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Speaker 6: number is going to grow to two million by the

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Speaker 6: year twenty three.

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Speaker 2: This is the heart of the matter. I interviewed Senator

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Speaker 2: Grassley years ago. I think he was young then. He

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Speaker 2: was like a two at the time. He's a former

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Speaker 2: welder out of Iowa and World War Two, and the

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Speaker 2: cliche is we don't have enough welders. The politicians are

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Speaker 2: signing deals saying we're going to take high manufacturing Asia

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Speaker 2: and bring it over here, Jay Timmins, Do we have

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Speaker 2: the warm bodies to build an Asia like manufacturing force today?

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Speaker 6: No, but that doesn't mean we can't get there, and

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Speaker 6: we have to again, we have to prioritize the right things.

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Speaker 6: You and I have talked about trade schools in the

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Speaker 6: past and the importance of trade schools and community colleges

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Speaker 6: and really orienting.

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Speaker 2: Are they doing that? I mean there was both season

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Speaker 2: in New York State BOC.

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Speaker 6: I think yes, it's it's growing right, it's getting this,

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Speaker 6: it's cooling there.

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Speaker 2: That is the challenge we have.

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Speaker 6: It's important to make sure that young people know what

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Speaker 6: cool opportunities. Use the word cool, I say sexy. You

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Speaker 6: know opportunities are available in manufacturing today. More importantly, it's

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Speaker 6: telling getting their parents to understand that as well, because

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Speaker 6: oftentimes parents will say, hey, we want you to go

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Speaker 6: in this direction or that direction. That realize what great

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Speaker 6: opportunities exist in manufacture.

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Speaker 2: I mean, Paul, this is the heart of the matter,

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Speaker 2: the parents want them to take Lockey in philosophy at

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Speaker 2: Duke and the kids. What's the average salary with one

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Speaker 2: of those kids five years out?

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Speaker 6: Yeah, so it's like, well, it's run one hundred thousand dollars.

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Speaker 2: So they're talking six figure incomes. Moving a ranch.

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Speaker 5: Yep, no college, no stereotysably, So, Jay, what are the

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Speaker 5: key challenges for you and for manufacturers today?

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Speaker 6: So let's start with the opportunities, right, So, we had

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Speaker 6: great we had great news this year when we got

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Speaker 6: the tax reforms made permanent. That really helps supercharge I

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Speaker 6: think optimism. Regulatory modernization has been good for manufacturing. The

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Speaker 6: President's focus in the administration's focus on energy dominance has

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Speaker 6: been very positive. But the greatest challenges are as we

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Speaker 6: just talked about, workforce, but also the uncertainty of the

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Speaker 6: current tariff policies that are happening in this country and

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Speaker 6: the added costs that come with that. I would tell

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Speaker 6: you the one thing that we're really watching closely. The

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Speaker 6: President clearly wants to grow manufacturing capacity in this country.

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Speaker 6: Well so do we, Right, that's our that's sure, that's

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Speaker 6: my job. In order to do that, We've had our

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Speaker 6: economists to crunch some numbers. If we had every machine

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Speaker 6: running in this country today, we would only be able

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Speaker 6: to make eighty four percent of the critical inputs necessary

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Speaker 6: to build that new factory.

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Speaker 2: So what would you say to Donald Trump? I mean,

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Speaker 2: what would you say to the president about this? I

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Speaker 2: don't want a photo shoot in the White House lawn

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Speaker 2: of some big tractor trailer like we're manling and we're

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Speaker 2: going to get the vote in Ohio. You're the reality.

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Speaker 2: What do you say to the president or the next president? Yeah,

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Speaker 2: help us, help us, help you do this? Right? So,

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Speaker 2: and the way to DOLBJ text credits.

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Speaker 6: The way to do it is is to look at

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Speaker 6: those critical inputs that you need. So think in terms

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Speaker 6: of machines, right, and the administration just announced a two

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Speaker 6: thirty two investigation on machinery that would add tariffs. Well,

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Speaker 6: if you're if you're tariffing that that product and the

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Speaker 6: purpose of that product is helped build new manufacturing capacity,

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Speaker 6: that doesn't seem to add up. So if we have

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Speaker 6: some sort of a speed PAS that allows us to

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Speaker 6: bring that equipment in duty free to build manufacturing capacity,

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Speaker 6: we think that it's a win win for both.

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Speaker 3: You don't see that common sense. Well, we've been talking

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Speaker 3: about listen, listen, We've been talking to the administration. We're

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Speaker 3: getting some good response about exactly that targeted, targeted focus

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Speaker 3: on making sure that we can bring in the right

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Speaker 3: things to build manufacturing.

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Speaker 2: Please come back again. I mean, you know, we start

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Speaker 2: strong in this our Sebastian Page and Jay Timmins, and

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Speaker 2: we should have had both of them for like an hour.

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Speaker 6: I'll always come back if you always say the Ohio State.

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Speaker 2: University, Ohio, they did pretty good this year. There's always

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Speaker 2: upsets in this Well in Ohio State is just like

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Speaker 2: normal Ohio State.

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Speaker 6: We got a wait to see what happens with the

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Speaker 6: big game right after when.

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Speaker 2: You were an undergraduates. This is like what Michael Barr

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Speaker 2: used to do in Detroit. Did you drink in every

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Speaker 2: bar in that corridor of bars?

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Speaker 6: So there was a bar o Larry's there that I

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Speaker 6: did once in a while frequently.

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Speaker 2: What was the beverage?

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Speaker 6: Sadly, sadly, sadly, Well, I was young and I'm old

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Speaker 6: enough that legal age was eighteen, so I drank tequila.

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Speaker 2: But I have to label.

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Speaker 6: But I have to tell you, what do you let

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Speaker 6: the chief the cheapest Tess, I have to tell you

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Speaker 6: I was a geek. So I went around the state

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Speaker 6: starting young Republican clubs, so you.

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Speaker 2: Know, very good. Didn't really have fun. Jay, Lisa and

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Speaker 2: I surveillance correction, folks, MATEO and I. It saw us

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Speaker 2: a white label. It's more chewy than the green. The

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Speaker 2: rich kids had the green label and we had the

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Speaker 2: white label.

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Speaker 6: We also had grain alcohol, which was a really bad Timmis,

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Speaker 6: thank you so much.

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

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Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

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Speaker 1: starting at seven am Eastern on Apple Corplay and Android

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Speaker 1: Auto with the Bloomberg Business app. You can also listen

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Speaker 1: live on Amazon Alexa from our flagship New York station

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Speaker 1: Just say Alexa, play Bloomberg ele where you get.

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Speaker 2: Right to it for the last week or so and

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Speaker 2: I with great guidance to Dennis Gartman and this amazing

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Speaker 2: call on Gold in Yen really a call of a decade.

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Speaker 2: When are you going to have the gold guy in?

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Speaker 2: When are you going to have the guy with the

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Speaker 2: affable British voice on? When are you going to have

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Speaker 2: James Steele on in the studio now worldwide. James Steele,

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Speaker 2: chief of Commodities for HSBC, wonderful to have you here.

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Speaker 2: How is this gold move, this silver move different from

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Speaker 2: my ute where I'd go to cocktail parties with my

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Speaker 2: parents and see Jenny Kremaals and everybody was gold and

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Speaker 2: silver crazy. How's it different from nineteen eighty?

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Speaker 7: Well, thank you, Tom, thank you for having me. I

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Speaker 7: think one of the difference is that we've hit real highs.

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Speaker 7: You know, the market was talking about a series of

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Speaker 7: highs for the last year and a half, but really

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Speaker 7: it wasn't until April that we hit real highs. That

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Speaker 7: we hit highs in real terms. In January of nineteen eighty,

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Speaker 7: gold hit eight hundred and fifty dollars an ounce, and

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Speaker 7: that is a little bit shy of thirty four hundred

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Speaker 7: dollars in today's money, So we didn't pop that figure

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Speaker 7: until April. And I think what makes it different now

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Speaker 7: is that we have a different monetary regime Voker, and

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Speaker 7: it was just coming into power, and that's why the

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Speaker 7: market dropped after that. Also, the geopolitical risk climate is different.

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Speaker 7: We have more entrance and we have a different very

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Speaker 7: types of entrance into the market, and we just have

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Speaker 7: a lot of elevated risk. And what is interesting is

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Speaker 7: that this is occurring aside very powerful equities, so a

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Speaker 7: lot of the buyer and gold is safe haven.

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Speaker 2: Paul's got any questions from a center around what to

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Speaker 2: buy next at the jewelry store, let me just ask

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Speaker 2: a dumb question. In everything else in the world, if

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Speaker 2: price goes up, we make more of it. That's the

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Speaker 2: way Adam's Smith told us things work. Alfred Marshall told

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Speaker 2: us that if the price is up, are we mining

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Speaker 2: more gold?

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Speaker 7: Well we can't. Well we are mining a bit more.

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Speaker 7: But mining is a very long process, and it depends

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Speaker 7: on a very long investment cycle. Say, by the time

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Speaker 7: a couple of geologists say I think there's some gold here,

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Speaker 7: it can be ten years before it goes round your finger.

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Speaker 7: It used to be five. Sometimes it's much much longer

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Speaker 7: than that, and so there are constrictions to how quickly

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Speaker 7: you can raise production, you can change grading and things

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Speaker 7: like that. But really it's said on these long term cycles,

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Speaker 7: what is flexible is recycling. And I think all the

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Speaker 7: time I've been covering gold, the recycling market has steadily

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Speaker 7: risen as a greater percentage of the share of supply.

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Speaker 7: And I would bet that at this price we've got

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Speaker 7: some potentially significant recycling that could come online.

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Speaker 2: Is that work?

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Speaker 5: Where do we see recycling? How does that happen? I

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Speaker 5: just go to the guy on the corner and you

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Speaker 5: give them my ring for cash.

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Speaker 7: It goes from that level. It goes from gathering up

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Speaker 7: all the jewelry in your house because where record highs

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Speaker 7: or it goes right up to old bars that may

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Speaker 7: be cracked that may not be London what we call

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Speaker 7: London good delivery, okay, which is the only type of

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Speaker 7: bar the HSBC and other CLI London good Delivery.

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Speaker 5: That means it's a high quality bar.

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Speaker 7: That means it's been assayed and produced by a verified

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Speaker 7: l b M, a London Buoyant Market Association entity and

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Speaker 7: they've said this refinery is correct and and and therefore

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Speaker 7: you know what you're getting. Uh So it goes from

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Speaker 7: there right up. But there is a lot of gold

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Speaker 7: in the world and it can be mobilized at high prices.

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Speaker 2: Bloomberg Surveillance James Steele of HSBC, where there's a definitive

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Speaker 2: on gold ready green in the screen right now, the

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Speaker 2: metal swinging filing is tick by tick four and seventy

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Speaker 2: three up three dollars amazing.

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Speaker 5: Who's buying gold at these levels?

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Speaker 2: Do you think?

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Speaker 5: Is it just the ETFs, is it central banks? Is

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Speaker 5: it all the above?

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Speaker 7: Well, I think what we have seen is less retail demand.

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Speaker 7: Small bars and coins have suffered greatly under the higher prices. Say,

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Speaker 7: for example, if you'd bought a coin at fifteen hundred

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Speaker 7: dollars an ouncer you could have just a few years ago,

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Speaker 7: you probably won't buy another one or at this price,

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Speaker 7: or you may even hand that in. So if you

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Speaker 7: look at what's being produced by the Mints, it's quite

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Speaker 7: quite quite low, and a lot of coins are coming

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Speaker 7: onto the secondary markets. And also small bars. I mean

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Speaker 7: the ten grand bar is the favorite bar in India,

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Speaker 7: a very small bar, well over one hundred thousand rupees.

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Speaker 7: It was thirty five thousand rupees just a few years ago.

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Speaker 7: But to say who's buying, it's institutional asset managers, all

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Speaker 7: range of people who are seeking diversification.

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Speaker 2: Giboni Brissacci was on your Today on Gaza in Israel

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Speaker 2: and President Trump and from Dubai, and I once visited

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Speaker 2: quickly the Dubai Gold souk, which is how you consume

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Speaker 2: in the Middle East. It's totally different, folks than the

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Speaker 2: jewelry district in Manhattan, Tiffany's you know, et cetera, et cetera,

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Speaker 2: in Asia, in South Asia at the Dubai gold Souk.

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Speaker 2: How is gold at four thousand changed the cadence?

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Speaker 7: Well, about about fifty percent of all gold that's bought

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Speaker 7: in the world is in jewelry form and physical gold,

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Speaker 7: and seventy percent of that is in the non OECD

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Speaker 7: world and that demand is down double digit and it

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Speaker 7: was down double digit last year. So we have this

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Speaker 7: severe reaction and the jewelry market, as one.

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Speaker 2: Would my head. You just said, seventy sixty percent, which

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Speaker 2: is forty percent of the gold consumption is Nana OECD jewelry.

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Speaker 2: That is correct.

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Speaker 7: And half of all the jewelry bought, half of all

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Speaker 7: the physical gold bought in the world is divided between

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Speaker 7: India and China.

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Speaker 5: And what did they they buy it us a store

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Speaker 5: of value? Do they buy it us a hedge? Do

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Speaker 5: they buy it as well?

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Speaker 7: There's a traditional historic relationship with gold. I mean traditionally

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Speaker 7: gold has been more popular in places. And I'm not

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Speaker 7: saying India or China have weak institutions, so please don't

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Speaker 7: don't think that. But historically gold has been more popular

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Speaker 7: in places that have had higher inflation, less stable governments,

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Speaker 7: things like that.

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Speaker 2: How does James Steele link the debate, I mean, Ken

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Speaker 2: Griffith's with Francy Laqua, the debasement debate, dollars going a weekend,

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Speaker 2: We're all going to die by gold in the geo

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Speaker 2: politics that you mentioned at the top, is that over

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Speaker 2: emphasized in your analysis or germane?

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Speaker 7: It might be, well, it is Germane, but it might

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Speaker 7: be somewhat exaggerated at the moment. Now in all the years,

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Speaker 7: in the years that I've been covering gold, the same

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Speaker 7: twelve or fifteen factors covered it from the day I

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Speaker 7: started looking at it until now. The trick to analyzing it,

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Speaker 7: or the trick to having some idea about where the

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Speaker 7: crisis might go is the ranking and geopolitics has risen.

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Speaker 2: Let me cut to the chases Ken Griffin Wright about

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Speaker 2: his ranking and worries handeringing worries about the global financial system.

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Speaker 7: Well, I wouldn't comment. I don't think I'm allowed to

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Speaker 7: comment on Ken specifically. But if you look at the

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Speaker 7: geopolitical risk Index and the Economic policy Uncertainty Index. They're

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Speaker 7: both very, very high, and gold has a nice running

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Speaker 7: regression analysis link to that. We've gone back years and

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Speaker 7: seen this relationship.

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Speaker 2: It's James Steele. I mean, that's why here James Steele, HSBC.

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Speaker 2: We continue with this important conversation. Welcome all of you

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Speaker 2: across the nation, around the world. Good morning on YouTube.

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Speaker 2: Subscribe to Bloomberg Podcast. Paul Sweeney.

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Speaker 5: Do commodities investors, particularly in gold, do they think about

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Speaker 5: or how do they think about valuation? Just do they

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Speaker 5: think about valuation? If so, how do they think about valuation?

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Speaker 7: I don't think you can look at gold and valuation

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Speaker 7: in the same way as you can other things. For example,

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Speaker 7: it's well above the cost of production, okay double in

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Speaker 7: most cases, so I don't think that really works. You

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Speaker 7: also have to take into account reserves and things like that,

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Speaker 7: so it is a more complicated So.

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Speaker 5: People don't typically and say, well, I think gold's expensive,

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Speaker 5: but they will say as it run too far maybe

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Speaker 5: or is.

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Speaker 2: It yes, that's right, that's right.

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Speaker 7: You wouldn't You wouldn't get many places by by saying

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Speaker 7: by comparing the cost of production and and and supply

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Speaker 7: alone to how the price would how the price would go.

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Speaker 2: If you're doing a weekend, you're not being the social

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Speaker 2: James Steele And somebody says I need to buy gold.

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Speaker 2: What is the most what's the James Steel way to

437
00:24:20,480 --> 00:24:22,640
Speaker 2: acquire gold? At least a step in yours at IL

438
00:24:22,760 --> 00:24:25,360
Speaker 2: six or seven where you can buy gold bars at

439
00:24:25,359 --> 00:24:29,000
Speaker 2: costco Hey help me here? What's the best what's the

440
00:24:29,040 --> 00:24:30,840
Speaker 2: most intelligent way to buy gold?

441
00:24:30,880 --> 00:24:33,080
Speaker 7: Well, I think it depends on I always think the

442
00:24:33,119 --> 00:24:35,560
Speaker 7: ETFs are a good are good play because you you

443
00:24:35,680 --> 00:24:39,600
Speaker 7: can buy any any any amount you can, you don't

444
00:24:39,640 --> 00:24:43,000
Speaker 7: have the problems of storage or insurance, and so I

445
00:24:43,080 --> 00:24:44,160
Speaker 7: think I think that's the best.

446
00:24:44,280 --> 00:24:47,080
Speaker 2: I think that's that that's amongst the best Krugerians.

447
00:24:49,200 --> 00:24:51,240
Speaker 7: They are on the market. I don't think they're being produced.

448
00:24:51,320 --> 00:24:55,320
Speaker 7: But the big coin producers are the US Mint and

449
00:24:55,520 --> 00:24:58,280
Speaker 7: the Royal Canadian Mint and and the Royal Mint in

450
00:24:58,320 --> 00:25:01,480
Speaker 7: the US and the UK and Austria and Australia.

451
00:25:01,800 --> 00:25:04,520
Speaker 2: So right now the United States of America is making

452
00:25:04,640 --> 00:25:05,480
Speaker 2: gold coins.

453
00:25:06,600 --> 00:25:09,520
Speaker 7: Well, yes, but I've just been looking at the data

454
00:25:09,640 --> 00:25:12,080
Speaker 7: and it just doesn't apply to the US Mint. But

455
00:25:12,400 --> 00:25:17,679
Speaker 7: the amount of coins sold in August was a tiny

456
00:25:17,800 --> 00:25:20,360
Speaker 7: fraction of what was sold in August twenty twenty four.

457
00:25:22,440 --> 00:25:25,760
Speaker 7: The high prices, the price. Yes, do you have a

458
00:25:25,800 --> 00:25:27,840
Speaker 7: gold coin? I do not have a gold coin.

459
00:25:28,000 --> 00:25:30,720
Speaker 5: No, I don't think I do. And my question is,

460
00:25:31,240 --> 00:25:35,240
Speaker 5: historically speaking, what's caused gold to go down and go down?

461
00:25:35,640 --> 00:25:36,320
Speaker 2: A great question.

462
00:25:36,960 --> 00:25:40,560
Speaker 7: Well, you know that's what we're examining now. Something that

463
00:25:40,680 --> 00:25:45,760
Speaker 7: might surprise some people is an equity correction could trigger

464
00:25:45,880 --> 00:25:48,960
Speaker 7: a gold correction. And the reason for that. You would

465
00:25:49,000 --> 00:25:51,600
Speaker 7: think if equities go down, the gold market would go up.

466
00:25:52,359 --> 00:25:55,480
Speaker 7: But what happens is that those who bought gold as

467
00:25:55,680 --> 00:25:59,320
Speaker 7: a hedge against an equity correction, which is a significant

468
00:25:59,600 --> 00:26:05,160
Speaker 7: level a number, they liquidate either end of that day

469
00:26:05,680 --> 00:26:08,400
Speaker 7: or the next day in the following day, so inequity

470
00:26:08,480 --> 00:26:12,800
Speaker 7: correction could very well trigger a knee jerk reaction in

471
00:26:12,840 --> 00:26:13,520
Speaker 7: the gold market.

472
00:26:13,960 --> 00:26:15,600
Speaker 2: The other thing, too, is these.

473
00:26:17,080 --> 00:26:23,280
Speaker 7: Geopolitical risk levels are high, and I mean I don't

474
00:26:23,280 --> 00:26:27,920
Speaker 7: predict the future, of course, but a settlement in Ukraine,

475
00:26:28,440 --> 00:26:29,760
Speaker 7: and I'm not saying there will be one or there

476
00:26:29,760 --> 00:26:35,080
Speaker 7: won't be one, but some reproche moment between the West

477
00:26:35,359 --> 00:26:39,160
Speaker 7: and Russia possibly better US Sino relations. There's a number

478
00:26:39,200 --> 00:26:43,120
Speaker 7: of things that could feed into a de escalation and risk.

479
00:26:43,440 --> 00:26:45,639
Speaker 2: I love this pot. I'm learning so much. How about

480
00:26:45,680 --> 00:26:49,640
Speaker 2: this Walmart? Have you ever been to Walmart? Least of course? Okay,

481
00:26:49,760 --> 00:26:54,359
Speaker 2: thank you? Gold coin Canadian gold may belief one ounce

482
00:26:54,600 --> 00:26:59,840
Speaker 2: gold coin random year and seventy eight dollars twenty four

483
00:27:00,080 --> 00:27:03,640
Speaker 2: sense but every time they may please lose you buy

484
00:27:03,720 --> 00:27:05,159
Speaker 2: one exactly something like that.

485
00:27:05,200 --> 00:27:08,960
Speaker 5: All right, So gold up fifty year to date, I

486
00:27:09,000 --> 00:27:12,399
Speaker 5: can do you one better. Silver up seventy six percent

487
00:27:12,840 --> 00:27:14,400
Speaker 5: fifty one dollars an ounce.

488
00:27:14,720 --> 00:27:15,600
Speaker 2: What's going on with silver?

489
00:27:15,760 --> 00:27:16,159
Speaker 5: Do you think that?

490
00:27:16,280 --> 00:27:17,959
Speaker 2: Is that just a I don't know how to do well?

491
00:27:18,040 --> 00:27:19,080
Speaker 2: This is where I mean.

492
00:27:19,280 --> 00:27:23,520
Speaker 7: One of our research pieces was Silver's golden chariot. Okay,

493
00:27:23,760 --> 00:27:27,080
Speaker 7: that you know that the silver has been buoyed by

494
00:27:27,160 --> 00:27:32,320
Speaker 7: the gold, and when gold rises, some people don't participate

495
00:27:32,400 --> 00:27:34,520
Speaker 7: fully in the move. They would like to be in

496
00:27:34,600 --> 00:27:37,320
Speaker 7: precious metals and they'll go into silver, they'll go into platinum.

497
00:27:38,119 --> 00:27:40,560
Speaker 7: Typically they will not do it, and pladium now the

498
00:27:40,640 --> 00:27:43,520
Speaker 7: other so that's been a big plus. The other thing, though,

499
00:27:43,680 --> 00:27:48,560
Speaker 7: is more technical. There is less gold in London in

500
00:27:48,680 --> 00:27:52,520
Speaker 7: the London warehouses right now. Okay, London is the Center

501
00:27:52,680 --> 00:27:56,560
Speaker 7: for Cash Spot Physical Trading. New York is the Center

502
00:27:56,680 --> 00:28:00,600
Speaker 7: for Futures and Options at the CME, the old CORMEX. Now,

503
00:28:00,720 --> 00:28:02,920
Speaker 7: when we had the tariff concern and I was on

504
00:28:03,040 --> 00:28:06,000
Speaker 7: this program and spoke about that, we saw an enormous

505
00:28:06,040 --> 00:28:09,480
Speaker 7: amount of bullion come across the ocean towards New York

506
00:28:09,960 --> 00:28:12,959
Speaker 7: in case the tariffs were put on. Well, a lot

507
00:28:13,040 --> 00:28:17,200
Speaker 7: of that silver is still here, and so there's a

508
00:28:17,520 --> 00:28:19,480
Speaker 7: I wouldn't say there's a shortage, but there's less of

509
00:28:19,520 --> 00:28:22,960
Speaker 7: it in London. It keeps brushing up the spot price

510
00:28:23,080 --> 00:28:27,439
Speaker 7: and until the stocks get leveled out again, which may

511
00:28:27,600 --> 00:28:30,240
Speaker 7: take some time, this silver has been buoyed by it.

512
00:28:30,280 --> 00:28:36,480
Speaker 2: Does silver have the biblical emotional value of gold? I

513
00:28:36,560 --> 00:28:39,640
Speaker 2: mean this sounds like eighteen eighty William Jennings Bryan the

514
00:28:39,760 --> 00:28:44,320
Speaker 2: silver coin debate. But like if somebody perchance had a

515
00:28:44,520 --> 00:28:49,400
Speaker 2: silver tiffany bangle like Paloma. Lisa helped me here, who

516
00:28:49,480 --> 00:28:52,520
Speaker 2: is it? Paloma Picasso. It's one of those modern things

517
00:28:53,040 --> 00:28:56,120
Speaker 2: that you see. It's silver, Okay, people collect them from

518
00:28:56,200 --> 00:29:01,200
Speaker 2: time to time. Does that silver have relative value to gold?

519
00:29:01,520 --> 00:29:03,080
Speaker 2: Or does a guy like you look at and go

520
00:29:03,240 --> 00:29:05,560
Speaker 2: you fool? Oh no, no, it does.

521
00:29:06,080 --> 00:29:07,719
Speaker 7: There's just a lot more silver in the world than

522
00:29:07,760 --> 00:29:12,960
Speaker 7: there is gold. An interesting historical thing that your listeners

523
00:29:13,040 --> 00:29:16,360
Speaker 7: may may enjoy. For thousands of years, the ratio for

524
00:29:16,480 --> 00:29:19,040
Speaker 7: gold to silver was ten to one. You go back

525
00:29:19,080 --> 00:29:22,360
Speaker 7: to the Bible, Persia, China, India, et cetera, et cetera.

526
00:29:23,600 --> 00:29:26,800
Speaker 7: When the Spanish and the Portuguese went to the Americas,

527
00:29:27,160 --> 00:29:29,440
Speaker 7: it wasn't so much gold they brought back as silver,

528
00:29:30,360 --> 00:29:33,840
Speaker 7: And they brought back so much silver from the New

529
00:29:33,920 --> 00:29:37,680
Speaker 7: World to the Old world that it irrevocably altered the

530
00:29:37,760 --> 00:29:38,800
Speaker 7: gold silver ratio.

531
00:29:39,720 --> 00:29:43,320
Speaker 2: So like an Alsa Peretti small bone cuff and sterling

532
00:29:43,800 --> 00:29:47,520
Speaker 2: eighteen hundred dollars at Tiffany, Do you, James Steele, look

533
00:29:47,600 --> 00:29:49,960
Speaker 2: at that like the same as you look at gold.

534
00:29:51,440 --> 00:29:53,360
Speaker 7: Well, you would, But that high end of the jewelry

535
00:29:53,440 --> 00:29:56,920
Speaker 7: market is not important to us because not much of

536
00:29:57,000 --> 00:29:59,840
Speaker 7: it is sold and there's no relationship to the price.

537
00:30:00,320 --> 00:30:03,960
Speaker 7: That's why jewelry demand moves in the East, because the

538
00:30:04,120 --> 00:30:08,040
Speaker 7: markup is lower and the hedging practices are different.

539
00:30:08,160 --> 00:30:10,640
Speaker 2: Which geography do you mostly? We got to go. Which

540
00:30:10,720 --> 00:30:12,760
Speaker 2: geography do you look at? Most of the East?

541
00:30:13,680 --> 00:30:16,360
Speaker 7: China, India, Oh, I thought you were say the Hampton's.

542
00:30:17,680 --> 00:30:20,240
Speaker 2: China, India. Can you give me a savy cape cod.

543
00:30:22,080 --> 00:30:25,080
Speaker 7: Look look look at the Mumbai premium or discount and

544
00:30:25,120 --> 00:30:26,720
Speaker 7: the Shanghai premium or disc There.

545
00:30:26,640 --> 00:30:29,040
Speaker 2: You go news you can use absolutely was this great?

546
00:30:29,240 --> 00:30:31,920
Speaker 2: Perfect for three hours?

547
00:30:32,000 --> 00:30:33,080
Speaker 5: Wherever they keep yourselves?

548
00:30:33,320 --> 00:30:36,280
Speaker 2: Can we do a remote from the anxious VC vault

549
00:30:36,360 --> 00:30:38,520
Speaker 2: We're going there? That would be cool. I mean there's

550
00:30:38,560 --> 00:30:41,840
Speaker 2: no Wi Fi right exactly, small detail. James Steele and

551
00:30:41,920 --> 00:30:44,640
Speaker 2: you are a trooper with the Hong Kong Shanghai and

552
00:30:44,800 --> 00:30:49,800
Speaker 2: Banking Corporation HSBC. Stay with us. More from Bloomberg Surveillance

553
00:30:49,920 --> 00:30:51,120
Speaker 2: coming up after this.

554
00:30:58,680 --> 00:31:02,120
Speaker 1: This is the Bloomberg Serre Allen's podcast. Listen live each

555
00:31:02,160 --> 00:31:05,600
Speaker 1: weekday starting at seven am Eastern on Applecarplay and Android

556
00:31:05,640 --> 00:31:08,640
Speaker 1: Auto with the Bloomberg Business app. You can also watch

557
00:31:08,720 --> 00:31:11,640
Speaker 1: us live every weekday on YouTube and always on the

558
00:31:11,680 --> 00:31:12,880
Speaker 1: Bloomberg terminal for.

559
00:31:12,920 --> 00:31:15,719
Speaker 2: Global Wall Street. This is a treat. He's got one

560
00:31:15,720 --> 00:31:19,920
Speaker 2: of the great double majors of America Systems, engineering, Economics,

561
00:31:20,000 --> 00:31:24,760
Speaker 2: Wharton joining us Nelson You he holds court an alliance Bernstein.

562
00:31:25,080 --> 00:31:30,160
Speaker 2: A single sentence of absolute brilliance in your note. We

563
00:31:30,280 --> 00:31:35,480
Speaker 2: have shifted from a self financing AI capex over to

564
00:31:35,640 --> 00:31:40,160
Speaker 2: getting financing outside other sources discuss.

565
00:31:41,120 --> 00:31:44,200
Speaker 8: So I've been really worried about some of the enthusiasm

566
00:31:44,280 --> 00:31:47,600
Speaker 8: that's going on across this AI investment that's going on.

567
00:31:48,400 --> 00:31:51,080
Speaker 8: If you look at, especially in the small caps, some

568
00:31:51,240 --> 00:31:54,640
Speaker 8: of this energy infrastructure that's being built out, they're putting

569
00:31:54,680 --> 00:31:57,640
Speaker 8: in capex that's not going to come online for another

570
00:31:57,680 --> 00:32:01,600
Speaker 8: ten years, and we're seeing more more debt financing starting

571
00:32:01,680 --> 00:32:02,280
Speaker 8: to creep up.

572
00:32:02,720 --> 00:32:08,320
Speaker 2: Boston University, v body he owns this territory. You do

573
00:32:08,600 --> 00:32:15,080
Speaker 2: financing outside the companies and everything gets trunch like complex

574
00:32:15,800 --> 00:32:21,160
Speaker 2: Paul I still do this day. Don't understand mezzanine mesa financing.

575
00:32:21,480 --> 00:32:25,520
Speaker 2: Do you see parallels here to the indacy the idiocy

576
00:32:25,640 --> 00:32:27,280
Speaker 2: of previous upsets.

577
00:32:27,480 --> 00:32:30,600
Speaker 8: I think it's early, so we're just starting to see

578
00:32:30,680 --> 00:32:34,240
Speaker 8: this start to happen and come in where more debt

579
00:32:34,360 --> 00:32:37,320
Speaker 8: is being used. But there's still a lot of cash

580
00:32:37,360 --> 00:32:42,520
Speaker 8: and revenues that's available. The big companies still have lots

581
00:32:42,560 --> 00:32:46,400
Speaker 8: of revenue that they can apply to this capex. But

582
00:32:46,520 --> 00:32:50,480
Speaker 8: what we are seeing across the megacaps is while earnings

583
00:32:50,520 --> 00:32:53,040
Speaker 8: continues to go up, we're seeing free cash flows starting

584
00:32:53,080 --> 00:32:55,960
Speaker 8: to plateau because the amount of capex it needs to

585
00:32:56,040 --> 00:32:58,000
Speaker 8: go into these into these investments.

586
00:32:58,600 --> 00:33:01,680
Speaker 5: But the bulls will tell you they've got literally ninety billion,

587
00:33:01,720 --> 00:33:04,200
Speaker 5: one hundred billion of freak cash flow. You know, maybe

588
00:33:04,280 --> 00:33:08,360
Speaker 5: that's down from one twenty one thirty, but their returns

589
00:33:08,400 --> 00:33:09,880
Speaker 5: are going to be so great. So it's a little

590
00:33:09,920 --> 00:33:12,440
Speaker 5: bit of a show me story. Well maybe it's more

591
00:33:12,480 --> 00:33:13,800
Speaker 5: than a little bit of a show me story. It's

592
00:33:13,800 --> 00:33:15,840
Speaker 5: a pretty big show me story for a lot of

593
00:33:15,880 --> 00:33:19,160
Speaker 5: these expenditures. But the market seems to be well then

594
00:33:19,200 --> 00:33:22,320
Speaker 5: to make that bet. For now, we're okay, okay, So.

595
00:33:22,560 --> 00:33:25,160
Speaker 8: As long as we continue to be able to fund

596
00:33:25,240 --> 00:33:27,920
Speaker 8: this through revenues, we're starting to see yellow flags. But

597
00:33:28,000 --> 00:33:28,840
Speaker 8: it's something to watch.

598
00:33:29,760 --> 00:33:31,040
Speaker 5: I was looking through your notes. I know you spend

599
00:33:31,080 --> 00:33:34,200
Speaker 5: the last couple of weeks visiting your clients in Asia.

600
00:33:34,920 --> 00:33:35,920
Speaker 5: What's some of your takeaways.

601
00:33:36,560 --> 00:33:39,080
Speaker 8: I think it's really interesting and actually goes to what

602
00:33:39,200 --> 00:33:42,920
Speaker 8: we just talked about. There's a fatigue across this AI

603
00:33:43,120 --> 00:33:46,520
Speaker 8: story with US growth equities, and while I'm in Asia,

604
00:33:47,400 --> 00:33:49,040
Speaker 8: the number one thing they wanted to talk to me

605
00:33:49,080 --> 00:33:52,520
Speaker 8: about was international investing, not global investing, which is what

606
00:33:52,600 --> 00:33:55,480
Speaker 8: they normally want to talk about But really, how do

607
00:33:55,560 --> 00:33:58,560
Speaker 8: we separate US from international equities?

608
00:33:58,800 --> 00:34:02,280
Speaker 2: Well, it's a distinction between international and global investing.

609
00:34:02,920 --> 00:34:07,720
Speaker 8: International just doesn't include the US, Okay, So when they

610
00:34:07,840 --> 00:34:10,880
Speaker 8: talk global, it's we just want it all in one portfolio.

611
00:34:11,440 --> 00:34:14,680
Speaker 8: When they want international, they control the US allocation and

612
00:34:14,760 --> 00:34:18,320
Speaker 8: the non US allocation separately. What they've come to realize

613
00:34:18,560 --> 00:34:21,040
Speaker 8: is with the run up of US equities, and especially

614
00:34:21,160 --> 00:34:25,920
Speaker 8: US growth equities, their portfolios are massively overweight growth and technology. Right,

615
00:34:26,320 --> 00:34:28,600
Speaker 8: So if you go outside of the US, you start

616
00:34:28,640 --> 00:34:31,279
Speaker 8: to get exposure to many different types of themes. You've

617
00:34:31,320 --> 00:34:36,640
Speaker 8: got industrials, financials, consumer that's available, and the correlations are following.

618
00:34:36,840 --> 00:34:38,919
Speaker 2: Like Brian Adams run to you in the last hour,

619
00:34:39,000 --> 00:34:40,840
Speaker 2: I feel like I'm may having a conversation when that

620
00:34:41,040 --> 00:34:44,680
Speaker 2: record came out. Okay, let's go right there, Robert Mondel,

621
00:34:44,760 --> 00:34:47,960
Speaker 2: we mentioned it with Richard Clair to the vice chairman yesterday.

622
00:34:48,160 --> 00:34:52,400
Speaker 2: I'm sorry, currency is litmus paper. Well, how does nobody's

623
00:34:52,440 --> 00:34:55,160
Speaker 2: talked about this in the zeitgeist of the last twenty years.

624
00:34:55,560 --> 00:35:01,719
Speaker 2: All of a sudden, dollar dynamics yen you wan, yen

625
00:35:02,000 --> 00:35:05,120
Speaker 2: you wan. Dynamics really matter, don't they? They do?

626
00:35:05,600 --> 00:35:09,080
Speaker 8: And look I did currencies about ten years ago, and

627
00:35:10,200 --> 00:35:13,360
Speaker 8: back then we always talked about these long cycles of

628
00:35:13,880 --> 00:35:17,760
Speaker 8: dollar strengthening the dollar weaknesses. Back then it was about

629
00:35:17,840 --> 00:35:20,520
Speaker 8: seven years in that cycle. I think the worry is,

630
00:35:20,640 --> 00:35:24,280
Speaker 8: are we just at the beginning of a dollar weekening cycle,

631
00:35:24,880 --> 00:35:27,719
Speaker 8: and given all the dynamics on the macro front, you

632
00:35:27,800 --> 00:35:30,640
Speaker 8: could see that there's reason to think about the dollar

633
00:35:30,719 --> 00:35:31,640
Speaker 8: could weaken from here.

634
00:35:32,280 --> 00:35:32,400
Speaker 2: Now.

635
00:35:32,560 --> 00:35:36,360
Speaker 8: That being said, with dollar weakening, that's really supportive for

636
00:35:36,560 --> 00:35:39,719
Speaker 8: things like emerging markets, which depends on dollar financing.

637
00:35:41,000 --> 00:35:43,759
Speaker 5: So dollar bulls which come back and say, hey, we're

638
00:35:43,800 --> 00:35:48,719
Speaker 5: still the most profitable, most country out there, the most efficient,

639
00:35:48,880 --> 00:35:51,360
Speaker 5: and so on and so forth, which has been I

640
00:35:51,400 --> 00:35:54,239
Speaker 5: guess the one of the underpinnings of the dollar ball

641
00:35:54,320 --> 00:35:56,880
Speaker 5: case for a long time. Have those things changed, aren't,

642
00:35:56,880 --> 00:35:58,240
Speaker 5: maybe even on a relative basis.

643
00:35:58,520 --> 00:36:00,800
Speaker 8: If you're talking about companies, I would agree with you

644
00:36:01,000 --> 00:36:04,280
Speaker 8: that the US companies remains an anchor for your portfolio.

645
00:36:04,880 --> 00:36:08,040
Speaker 8: It's such an important part of having those companies that

646
00:36:08,239 --> 00:36:12,759
Speaker 8: have those strong profitability deep motes that protect that self

647
00:36:12,840 --> 00:36:13,680
Speaker 8: generating profitability.

648
00:36:13,680 --> 00:36:15,200
Speaker 2: So now, so we've got to go in a moment

649
00:36:15,280 --> 00:36:18,880
Speaker 2: Lisa Harn beyond holders Schroeders. But and Nelson, you what

650
00:36:19,000 --> 00:36:22,279
Speaker 2: I mean hearing here is a partition of MAG like

651
00:36:22,600 --> 00:36:26,320
Speaker 2: MAG seven versus what MAG one hundred. There seems to

652
00:36:26,360 --> 00:36:30,160
Speaker 2: be a partition between the juggernaut cash flow generation of

653
00:36:30,280 --> 00:36:35,080
Speaker 2: Microsoft in six companies. I don't know there's what there is.

654
00:36:35,320 --> 00:36:38,520
Speaker 8: I think there's a much broader set of opportunities outside

655
00:36:38,520 --> 00:36:41,560
Speaker 8: of the MAG seven. And what people are forgetting is

656
00:36:41,760 --> 00:36:45,239
Speaker 8: the opportunity that exists outside of AI. You've got in

657
00:36:45,320 --> 00:36:50,120
Speaker 8: the US restoring of manufacturing, logistics and even the supply

658
00:36:50,239 --> 00:36:53,120
Speaker 8: chain that has to that needs a lot of investments.

659
00:36:53,440 --> 00:36:57,240
Speaker 8: And you've got very profitable companies that generate strong returns.

660
00:36:57,560 --> 00:36:59,160
Speaker 8: And then you look outside of Europe and you got

661
00:36:59,239 --> 00:37:03,319
Speaker 8: many macro lines themes in Europe and Japan and even

662
00:37:03,360 --> 00:37:04,920
Speaker 8: in China that you can invest in.

663
00:37:05,360 --> 00:37:08,399
Speaker 5: Earlier this year, when we had the tumult, I guess

664
00:37:08,560 --> 00:37:11,359
Speaker 5: when the launch of the tariffs, a lot of money

665
00:37:11,400 --> 00:37:12,880
Speaker 5: moved out of the US, A lot of it went

666
00:37:12,920 --> 00:37:16,480
Speaker 5: to European equities. What are you seeing there? Was that

667
00:37:16,560 --> 00:37:18,960
Speaker 5: a short term trade? Does that money come back or

668
00:37:19,440 --> 00:37:20,600
Speaker 5: is that kind of sticky over there?

669
00:37:20,640 --> 00:37:21,120
Speaker 2: Do you think? Oh?

670
00:37:21,160 --> 00:37:24,279
Speaker 8: I think there is some stickiness here and what you've

671
00:37:24,280 --> 00:37:28,200
Speaker 8: got in Europe is you've got financial stimulus. You've got

672
00:37:28,600 --> 00:37:31,319
Speaker 8: fiscal stimulus, you've got monetary stimulus going on. You've got

673
00:37:31,360 --> 00:37:34,440
Speaker 8: a trillion dollars of investment going on for Europe, and

674
00:37:34,880 --> 00:37:40,080
Speaker 8: that's triggering, triggering profits worldwide. Actually, what we're seeing in

675
00:37:40,200 --> 00:37:44,160
Speaker 8: Asia is defence companies in Asia are profiting massively from

676
00:37:44,400 --> 00:37:45,880
Speaker 8: Europe's need for defense spending.

677
00:37:46,680 --> 00:37:49,440
Speaker 2: We got to leave it there. Come again. I just

678
00:37:49,560 --> 00:37:51,640
Speaker 2: really appreciate it. That's a crazy day, Nelson, you were

679
00:37:51,719 --> 00:37:54,239
Speaker 2: this head of equities Alliance burns the thrill that you

680
00:37:54,280 --> 00:37:54,880
Speaker 2: can join us.

681
00:37:55,360 --> 00:37:59,799
Speaker 1: This is the Bloomberg Surveillance Podcast, available on Apple, Spot,

682
00:37:59,840 --> 00:38:03,799
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683
00:38:03,920 --> 00:38:07,719
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684
00:38:08,120 --> 00:38:11,879
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685
00:38:12,239 --> 00:38:15,320
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686
00:38:15,640 --> 00:38:17,640
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