Speaker 1: This is Bloomberg Business Week. I'm Carol Masser and I'm
Speaker 1: Bloomberg Quick Takes Tim Stanovik. We're here every day bringing
Speaker 1: you the latest news from the world to business and finance,
Speaker 1: clus technology, politics, economics, all purtnising the power of Business
Speaker 1: Week reporters and editors, not to mention our journalists and
Speaker 1: analyst in more than one and twenty countries. You can
Speaker 1: download Bloomberg Business Week and iTunes, SoundCloud, or Bloomberg dot com.
Speaker 1: You can also listen to our radio show at two
Speaker 1: pm Eastern Time on Bloomberg Radio, or watch us on
Speaker 1: YouTube search Bloomberg clovel News. Dr Stephen Skanky is chief
Speaker 1: economic Advisor at Keel Point. He's also a former US
Speaker 1: Treasury and White House National Security Council staff member. Doctor
Speaker 1: Skanky joins us on the phone from Cape Canaveral, Florida.
Speaker 1: Doctor Skanky, how are you. I'm well today, Thanks, and
Speaker 1: it's great to be with you. Yeah, it good to
Speaker 1: be with you. Two. Before we get to what the
Speaker 1: FETE is going to do, I do want to talk
Speaker 1: Russia and Russia's invasion of Ukraine with you because we
Speaker 1: haven't had a chance to speak about that. Since you
Speaker 1: were last on our program and you were on the
Speaker 1: White House National Security Council, a staff member of the
Speaker 1: White House National Security Council, so I wanted to get
Speaker 1: your read on it. It's a humanitarian crisis with more
Speaker 1: than two million refugees fleeing Ukraine. Um, and it's not
Speaker 1: clear that there is any end in sight. Um, how
Speaker 1: are you reading into it? Well, it's it's an extraordinary
Speaker 1: human tragedy and also a tragedy for the geopolitical world order. Um.
Speaker 1: Everyone had thought that we had gotten beyond invasion and
Speaker 1: land wars in Europe in particular as we came into
Speaker 1: this century of having experienced, you know, a hundred billion
Speaker 1: lost lives in the in the twentieth century as a
Speaker 1: as a result of conflict like this. So so that
Speaker 1: that is surprising. What's been amazing about it, though, is
Speaker 1: that it really has a weight and our European and
Speaker 1: Asian allies to the to the real threat to the
Speaker 1: geopolitical and economic system as a result of this. Uh.
Speaker 1: What's happened in Germany and the twenty seven EU countries
Speaker 1: has been absolutely amazing in terms of their recognition of
Speaker 1: the jeopardy and the things that they need to do
Speaker 1: to get that turned around for their own benefit and
Speaker 1: for the safety and security of their own countries. And
Speaker 1: Dr Skinky, I feel like it also has awakened many
Speaker 1: people to just how important Russia and Ukraine in that
Speaker 1: entire region is to you know, supplying the world with
Speaker 1: energy and you know, producing food and grains for the
Speaker 1: entire world. I mean, it feels like everything physical, the
Speaker 1: price of it has just soared in the past few weeks.
Speaker 1: And I mean, to bring it back to the economy,
Speaker 1: I'm curious what you think the lasting read through to
Speaker 1: inflation could be, because it was right around this time
Speaker 1: where that economists had initially predicted that inflation would finally
Speaker 1: start to crust a little bit. That's right, Katie. Uh.
Speaker 1: But you know, Russia exports seven and a half percent
Speaker 1: of crude and refined products before the war in what
Speaker 1: was already a tight energy market, and so to to
Speaker 1: think about taking any or all of that offline is
Speaker 1: is startling and jarring. Hence the Biden administration's effort to
Speaker 1: do something with the countries that are already otherwise offline
Speaker 1: and to get production geared up in the United States,
Speaker 1: all of which takes time and all of which takes
Speaker 1: infrastructure to get a repositioned into the countries in Europe
Speaker 1: that need it. You know, likewise, on grains, Russian Ukraine
Speaker 1: produce of the world's week supply, significant amount and not
Speaker 1: something that you change overnight. Fortunately, the US is an
Speaker 1: agricultural powerhouse and has the ability to turn its attention
Speaker 1: to replacing some of that, but over time only, and
Speaker 1: in the meantime you have to depend on on the
Speaker 1: stocks that are there. Aluminum the same way, big producer
Speaker 1: and exporter of aluminum, and of course natural gas to
Speaker 1: Europe much harder to replace because the infrastructure or re
Speaker 1: gassification of exports from the United States just takes time
Speaker 1: to put in place. So Dr Skinky, get us to
Speaker 1: tomorrow and what you expect we'll hear from uh FED
Speaker 1: chair J. Powell. Widely expected that they announced an interest
Speaker 1: rate increase of basis points that seems to be priced
Speaker 1: in at this point, and why they agreed upon um.
Speaker 1: But what surprises could we see? I think the big
Speaker 1: surprise will will will come in what they say about
Speaker 1: the trajectory after this. There has been a certain amount
Speaker 1: of public commentarity since the January F and C meeting
Speaker 1: with some misunderstanding as to what was said and some
Speaker 1: expectations that they need to go faster, But I think
Speaker 1: Chairman Powell was was preceded this and and stepping out
Speaker 1: to try to call markets and set expectations that they're
Speaker 1: going to move deliberately as we go along on this,
Speaker 1: fully understanding that the impact of what's happening in Russia
Speaker 1: and the Ukraine is really hard to pass through the
Speaker 1: system right now, and what financial markets and even the
Speaker 1: political system in the United States what it needs right
Speaker 1: now is just stability predictability. But the big surprises will
Speaker 1: come in their discussion about when does quantitative tightening begin
Speaker 1: and what does the dot plot looked like for the
Speaker 1: increase in interest rates going forward to the rest of
Speaker 1: the year. You know, the market's been calling for nine,
Speaker 1: well between seven and nine quarter percent increases, but that
Speaker 1: has been saying four or five. But we'll we'll find
Speaker 1: out soon enough as to where they're thinking has moved
Speaker 1: just as a result of what happened over the last
Speaker 1: couple of weeks. Dr Stephen Skanky, it is always great
Speaker 1: to chat with you ahead of FED day, Chief Economic
Speaker 1: advisor at keel Point, also former U s Treasury at
Speaker 1: White House National Security Accounts Member Member Stephen Skanky joining
Speaker 1: us on the phone from Cape Cannaveral, Florida. This is
Speaker 1: Bloomberg Radio, and this is Bloomberg Business Week. You're listening
Speaker 1: to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes.
Speaker 1: Tim Stinovic on Bloomberg Radio. Well, I told you we're
Speaker 1: going all in on Russia's invasion of Ukraine, and it
Speaker 1: not just includes the latest from Ukraine and the international
Speaker 1: community's response, but also the economic impacts not just in
Speaker 1: Ukraine and the world, but also what's going on in Russia.
Speaker 1: To that end, Today's Big Tag focuses on Russia spiraling
Speaker 1: towards a billion dollar debt default nightmare. This story written
Speaker 1: by Eliza RONALDS. Hannon and a couple other of our colleagues.
Speaker 1: Aliza's high yield and distressed debt credit reporter for Bloomberg
Speaker 1: new She joins us on the phone from Boston. Eliza,
Speaker 1: what happens tomorrow to Russia's debt that becomes due? Well,
Speaker 1: what happens tomorrow is a bit up in the air. Still, um,
Speaker 1: the big question has been one or the most immediate
Speaker 1: question has been one of technical default. Really, so the
Speaker 1: Kremlin has uh, you know, outlawed or restricted abilities of
Speaker 1: the sovereign and other companies to pay foreign foreign debt
Speaker 1: in the foreign currency, and any sort of payment made
Speaker 1: in roubles which have been the order would be a
Speaker 1: technical default. But what really investors are talking about at
Speaker 1: this point, if you ask them what their take is
Speaker 1: on the outcomes here, it's less. It's only a matter
Speaker 1: of time before the defaults become a matter of actual
Speaker 1: solvency as opposed to technical ability to pay, because Russia
Speaker 1: is completely cut off from its trading partners now and
Speaker 1: revenue will dry up, cash will become non existent. And
Speaker 1: so let's dig into that. So the worst case scenario here,
Speaker 1: you know, Russia defaults, what's its stake for Russia's economy
Speaker 1: if you know it's then cut off from its trading partners.
Speaker 1: You know, people investors uh don't want to invest in
Speaker 1: its debt anymore. Right, it will really be a negative
Speaker 1: feedback loop that will, as we said in the story,
Speaker 1: really set the economy on its on a road to disaster.
Speaker 1: Um you're seeing, you know, part of the reason that
Speaker 1: people are pulling away from the debt is because of
Speaker 1: downgrades to the credit rating, which of course have to
Speaker 1: do with all of the event risk related to the invasion,
Speaker 1: but also the high inflation and the contracting economy. But
Speaker 1: because of the high inflation and contracting economy is the
Speaker 1: m and because of the debt downgrades, the economy fair
Speaker 1: is even worse. And so it's it's really on a spiral, Eliza,
Speaker 1: forgive me, but you know, on the on the topic
Speaker 1: of Russia's invasion of Ukraine, we're just hearing from President Biden.
Speaker 1: He says that he will speak more about Ukraine on Wednesday,
Speaker 1: that's tomorrow. He did make some comments moment ago saying
Speaker 1: that it's getting harder to get supplies into Ukraine. He's
Speaker 1: speaking right now at a federal government funding bill signing event.
Speaker 1: For more, just go to life, go on the Bloomberg terminal, Eliza,
Speaker 1: isn't isn't Is this by design? What could happen to
Speaker 1: to Russia, to Russia's economy, what could happen to Russia's debt?
Speaker 1: Is this partly by design? When it comes to sanctions
Speaker 1: and cutting Russia off as much as as as the
Speaker 1: United States and the rest of the world can do.
Speaker 1: Certainly sanctions are designed to inflict pain, and this will
Speaker 1: be painful for Russia's economy and and Russian and the
Speaker 1: state the government. Of course, you're also looking at a
Speaker 1: lot of pain to be absorbed among global investors. Russian
Speaker 1: credit and and corporate credit in Russia is quite widely
Speaker 1: held throughout funds all over the market because until recently
Speaker 1: Russia was a big part of the index for that
Speaker 1: many funds tracked it was also investment grade rated. So
Speaker 1: it's the type of funds that aren't you know, very
Speaker 1: risk friendly, aren't necessarily you know, trying to make a
Speaker 1: big play on the outcome, but are really passive holders.
Speaker 1: And because of how fast everything unfolded, they didn't get
Speaker 1: a chance to sell and you know, let the distress
Speaker 1: guys come in. They're really holding the bags bill even
Speaker 1: as stuff plummet in value. Well, that's what I want
Speaker 1: to get into a little bit of you know, what
Speaker 1: the ripple effects could look like here, and you know,
Speaker 1: are there any potential contagion risks when it comes to
Speaker 1: you know, other emerging markets and their their sovereign debt markets.
Speaker 1: I think that if anything, um in s who are
Speaker 1: pegs to an emerging market index or other indexes that
Speaker 1: involved Russia will in fact need to block to other
Speaker 1: sovereign credits and other emerging markets in order to simply
Speaker 1: balance their portfolios because they did lose such a chunk
Speaker 1: of their benchmark overnight. Almost so, I don't know if
Speaker 1: there's so much contagion risk um explicitly, you know, it's
Speaker 1: a quite limited event. Um. The risk of you know,
Speaker 1: similar counterparty problems with nearby or related countries isn't isn't
Speaker 1: very far reaching at least um. But what might be
Speaker 1: more interesting to look at in the immediate term is
Speaker 1: where investors go to to put their money. Eliza ronalds
Speaker 1: Hannon is one of the authors of Today's Big Take.
Speaker 1: She's High Yield and Distressed Distress Credit Reporter. You can
Speaker 1: read Aliza's story and more from Bloomberg The Big Take.
Speaker 1: You can do that at Bloomberg dot com and of course,
Speaker 1: on the Bloomberg terminal. You're listening to Bloomberg Business Week
Speaker 1: with Carol Messer and Bloomberg Quick Takes Tim Stinovic on
Speaker 1: Bloomberg Radio. Coming up in the upcoming issue of Bloomberg
Speaker 1: Business Week Magazine is a deep dive into cerebral Maybe
Speaker 1: you've heard of it, maybe you haven't. It's backed by
Speaker 1: soft Bank, It's promoted by Simone Biles. The CEO has
Speaker 1: actually even been on Our Heir Our air here on
Speaker 1: Bloomberg business Week magazine. Cerebral has built the fastest growing
Speaker 1: online mental health business. Former employees, though, say the rapid
Speaker 1: expansion comes at the expense of patient care. The story
Speaker 1: by Pauli Mosen's and Caleb Melby. Caleb Melby's financial investigations
Speaker 1: reporter for Bloomberg News. He joined us on the phone
Speaker 1: from from Brooklyn. Joe Weber is editor at Bloomberg business Week.
Speaker 1: He's with us in the Bloomberg Interactive Broker studio in
Speaker 1: New York. Joel, I want to start with people. For
Speaker 1: people who haven't heard of Cerebral UM. What is it? Well,
Speaker 1: first of all, this story is in the current in
Speaker 1: the current excuse me? When is time? What is time?
Speaker 1: What is um? Cerebral? If you're on TikTok, you will
Speaker 1: definitely know it um. I've been fed the ads on
Speaker 1: Instagram and it's basically a telehealth company that during the pandemic,
Speaker 1: there are some policy changes that suddenly allowed you to
Speaker 1: get a d h D medications without having in person
Speaker 1: appointments and cerebral startup very young has been a huge
Speaker 1: beneficiary of these policy changes UM and has basically accelerated
Speaker 1: into uh, you know, this mental health crisis by allowing
Speaker 1: people to have telehealth appointments and get prescriptions basically you know,
Speaker 1: almost on demand and via um online prescriptions as well,
Speaker 1: depending on what state you're in. UM. But you know
Speaker 1: there's a downside to all this too, which is all
Speaker 1: of a sudden, we're dealing with mental health issues and
Speaker 1: telehealth and you don't have those normal check ins that
Speaker 1: most of the time we've had, and in talking to
Speaker 1: employees and former employees and patients of cerebral Pauli and
Speaker 1: Kayle have found some some troubling elements of their business practices.
Speaker 1: So so break that down, Caleb, what what were the
Speaker 1: big takeaways that that you found as you um did
Speaker 1: a bit of an autopsy here, Yeah, I mean, UM
Speaker 1: you the a d h D medication point you highlight,
Speaker 1: Joel is UM definitely among the big ones. Basically prior
Speaker 1: to the COVID nineteen pandemic, UH, you weren't able to
Speaker 1: prescribe controlled substances and a telehealth setting and uh. That
Speaker 1: was the product of a two eight lock called the
Speaker 1: Ryan Hate Act, which which said you you couldn't issue
Speaker 1: controlled substances uh. And that includes amphetamines like adderall and
Speaker 1: also um benzo's like um uh zen ac and klono pannon.
Speaker 1: So for the first time companies could do that, and
Speaker 1: there's been a race to do that. As you can
Speaker 1: imagine a lot of people working from home, going to
Speaker 1: school from home, sitting behind computers all day, not getting
Speaker 1: to socialize. They've become distracted, they've become irritated, they're procrastinating, um,
Speaker 1: which are all symptoms potentially of a d h D
Speaker 1: or you know, a myriad other things, including exactly um uh.
Speaker 1: So that kind of uh supply side drummed up. You
Speaker 1: have companies like Cerebral meeting that with these ads that
Speaker 1: Jewel was describing that you know, it can be quite aggressive.
Speaker 1: I think it's fair to say like people dancing with
Speaker 1: boxes of pills uh and similar and essentially asking have
Speaker 1: you ever thought, um, that you might have a d
Speaker 1: h D. So we we talked to nurses who works
Speaker 1: for this company who you know. Once that business line
Speaker 1: got up and running, so's deluge of clients looking for
Speaker 1: a d h D medication, and the structure is under
Speaker 1: which they were asked to operate half an hour primary appointment.
Speaker 1: People expected the drugs after that first appointment, because that's
Speaker 1: kind of what they've been to believe by these ads. Um,
Speaker 1: they get irate if they don't, and they say, it's
Speaker 1: very hard to diagnose in a virtual setting in half
Speaker 1: an hour. And what kind of uh response did they
Speaker 1: you know, have have you know a employees had when
Speaker 1: dealing in these situations, and then also the customers that
Speaker 1: you you spoke with. Yeah, so so for employees, UM,
Speaker 1: uh you know, uh, A lot of the folks who left,
Speaker 1: you could almost think of them as conscientious objectors. They
Speaker 1: saw kind of all these pressures on their prescribing practices,
Speaker 1: and for some of them, they didn't consider it worth
Speaker 1: it to continue to work under those circumstances. Some described
Speaker 1: fear of uh losing their licenses because of the situations
Speaker 1: they were put in, et cetera. Uh So, so they
Speaker 1: often moved on. Um, there's a whole host of support
Speaker 1: staff who uh you know, felt unsupported as the company's
Speaker 1: profile skyrocketed, doubled its evaluation alone from uh, I'm sorry,
Speaker 1: quadroubled it from June to December of last year to
Speaker 1: four point billion UM. Basically unable to keep up with
Speaker 1: this demand. And uh, patient experience varies widely. Some people
Speaker 1: really need more more tender, loving care than they can
Speaker 1: get under this kind of touch and go environment, UM,
Speaker 1: and felt like they didn't get it. We talked to
Speaker 1: somebody who you know, her first ary employments average nineteen
Speaker 1: minutes each UM when she joined the service. And for
Speaker 1: other people, and these are people who are either geographically
Speaker 1: remote or you know, or uninsured. Um, they can have
Speaker 1: positive experiences. If you have a prescription already and you
Speaker 1: can't get it filled, and you need somebody refilling, and
Speaker 1: you live you know, far away from you know, a
Speaker 1: psychiatrist or other psychiatric prescriber, Uh, this this can be
Speaker 1: a huge opportunity. Yeah, it's also a big question I
Speaker 1: think for what regulators are are going to think moving forward.
Speaker 1: We only have twenty seconds left, Caleb, But um, what
Speaker 1: can you tell us about the way that regulators are
Speaker 1: potentially looking at this? Look you tell what health has
Speaker 1: been seen as a huge boon. I think that continues
Speaker 1: to be the predominant narrative. I think they're going to
Speaker 1: try to find a way to try to make sure
Speaker 1: that people are able to do this in the future.
Speaker 1: The really important story. Caleb melb Caleb Melby is financial
Speaker 1: investigations reporter for Bloomberg News. He joins us on the
Speaker 1: phone from Brooklyn Joel Weber, editor at Bloomberg Business Week,
Speaker 1: with us in the Bloomberg Interactive Broker Studio. Check out
Speaker 1: the story. It is in the current issue of Bloomberg
Speaker 1: Business Week magazine. You can read it now on the
Speaker 1: Bloomberg terminal and at Bloomberg dot com slash business Week. Yeah,
Speaker 1: but you let me drive? Oh no, no, no, please,
Speaker 1: I'll do. I want to try. It's good question. The
Speaker 1: drive to the clobe me a thing radio, it's the
Speaker 1: drive to the clothes. We are just over ten minutes
Speaker 1: away from the close of trading on this Tuesday, March fifteen,
Speaker 1: stocks just coming down from their session Highsma, Katie. We've
Speaker 1: got a great voice to comment on all things markets
Speaker 1: today and fed tomorrow. Yeah, Tim, I'm excited about that one.
Speaker 1: We're joined now by Liz Young. She is head of
Speaker 1: investment strategy at so Far and Liz, I'm excited to
Speaker 1: talk to you because I've been thinking about the old
Speaker 1: curve a lot. I know you've been thinking about the
Speaker 1: yield curve a lot, And I'm curious how much do
Speaker 1: you think that the FED is thinking about the yield
Speaker 1: curve right now? Because if I look at the two
Speaker 1: tens yield curve, I see it about thirty basis points,
Speaker 1: which seems very very flat. Yeah, I think about the
Speaker 1: yield curve more than I'd like to, and I think
Speaker 1: the FED probably does too, especially at these levels. So
Speaker 1: as you mentioned that spread between the twos and tens,
Speaker 1: I mean it was below thirties for a period of
Speaker 1: time today, and I think that that is a pretty
Speaker 1: fragile place for us to be heading into a hiking cycle.
Speaker 1: And the FED may not care as much about the
Speaker 1: equity market correcting and some of the drawdown that we've seen,
Speaker 1: especially coming off of all time highs, probably felt like
Speaker 1: we had some room to draw down. But when you
Speaker 1: look at what happens with the yield curve, what you
Speaker 1: don't want to see is a true inversion. Now, the
Speaker 1: good thing about if we get close to inversion, it
Speaker 1: doesn't really count as a true inversion. That's a signal
Speaker 1: until it's lasted for a reasonable amount of time, and
Speaker 1: it was a big enough spread of an inversion, So
Speaker 1: reasonable amount of time. I mean, this is an opinion thing,
Speaker 1: but I would say at least a month. I think
Speaker 1: it has to stay inverted for a month, and it
Speaker 1: has to be let's call it twenty five basis points
Speaker 1: at least, right, So sometimes you might get an intra
Speaker 1: day inversion where it just kind of dips below zero
Speaker 1: for a second and it comes back and it never
Speaker 1: really closes inverted, or maybe it inverts by a very
Speaker 1: small amount for a couple of days. I don't think
Speaker 1: that counts as a true signal. Okay, So help us
Speaker 1: think about this in the context of what the Federal
Speaker 1: Reserve is Board is talking about right now, the decision
Speaker 1: that we'll here tomorrow at two pm Wall Street time,
Speaker 1: and uh, what investors really need to understand about the
Speaker 1: tough task that the FED has ahead of it. Yeah,
Speaker 1: I mean I do not envy the FED situation. I
Speaker 1: think they are up against a lot of different challenges,
Speaker 1: especially because we've put as investors and when we talked
Speaker 1: about the economy, we've put so much pressure on the
Speaker 1: FED to be able to solve a lot of the
Speaker 1: problems and frankly, they don't have the tools to solve
Speaker 1: all the problems that we might have. So heading into this,
Speaker 1: when you look at really what their job is, their
Speaker 1: job is to promote maximum employment and I think we
Speaker 1: can check that box and control prices. So their main
Speaker 1: purpose right now is to get inflation under control. Now
Speaker 1: what that means, though, is the piece of the inflation
Speaker 1: picture that they can control is really the demand side.
Speaker 1: They can't control the supply side, So what they would
Speaker 1: actually be intending to do is to get demand to
Speaker 1: relax to the point where supply can actually meet it
Speaker 1: and inflation relax as a little bit as a result. Now,
Speaker 1: I think some of the pressures come off because oil
Speaker 1: prices have come down from their peak last week, and
Speaker 1: we saw some of the moderation and pp I numbers
Speaker 1: today at least a month over month pp I numbers,
Speaker 1: So that's promising, but we need to see more sustained
Speaker 1: relax agent relaxation in inflation. Right now, their hands are tied.
Speaker 1: They have to hike, and they have to hike into
Speaker 1: a period where markets are down, and Liz I mean
Speaker 1: FED leadership has made clear that they see hikes as
Speaker 1: the primary tool here that they want to use. But
Speaker 1: how do you think they use the balance sheet this
Speaker 1: time around in terms of, you know, quantitative tightening. Yeah.
Speaker 1: So the thing about hikes is that if they start
Speaker 1: and move too quickly, or they go too big, it's
Speaker 1: all about the messaging. It's not necessarily about the move itself.
Speaker 1: It's about the messaging. And if the market starts to
Speaker 1: feel like the Fed is way behind the curve, it
Speaker 1: might get more scared than it already is. So I
Speaker 1: think with the hikes, they have to be gentle, and
Speaker 1: they have to be gradual about it, and they have
Speaker 1: to message them very clearly, which Jerome Powell did in
Speaker 1: his testimony a couple of weeks ago. It was very clear,
Speaker 1: very specific, surprisingly specific about wanting a twenty five basis
Speaker 1: point hike tomorrow. I think we will continue to hear
Speaker 1: very clear messages from them about rate hikes. What they
Speaker 1: might do with the balance sheet is directly impact the
Speaker 1: yield curve. So if they start to feel uncomfortable with
Speaker 1: where the yield curve is or how flat the yield
Speaker 1: curve is, they may start to signal outright sales from
Speaker 1: the balance sheet rather than just letting assets roll off.
Speaker 1: Because that may cause a little bit of a rise
Speaker 1: in longer term yields and get the spread between the
Speaker 1: two year and the ten year to widen out a
Speaker 1: little bit and less. I want to switch gears a
Speaker 1: little bit and talk about the composition of who's trading
Speaker 1: right now, because we've seen a lot of reporting in
Speaker 1: the last couple of weeks that you have retail investors
Speaker 1: still buying stocks, but it seems like touch funds and
Speaker 1: other larger players have been selling. I mean, if you
Speaker 1: balance those two forces out, first, I'm curious to hear
Speaker 1: if that's what you're seeing as well. If you balance
Speaker 1: those two forces out, I mean, does it make sense
Speaker 1: to see it seems like institutions are winning right now. Yeah.
Speaker 1: You know what's actually surprising is that when you look
Speaker 1: at the flows that had been happening into maybe the
Speaker 1: end of last week or let's say Thursday of last week,
Speaker 1: there hadn't been as much selling pressure as you would expect.
Speaker 1: But the last three days there have been outflows. If
Speaker 1: you look at sector funds and the money that's coming
Speaker 1: out of them, and just as a whole in the SMP,
Speaker 1: there have been more outflows. So this is going to
Speaker 1: sound strange, but it was kind of a nice confirmation
Speaker 1: because everybody was talking about being so bearished, but the
Speaker 1: flows weren't really reflecting that. And now the flows started
Speaker 1: to reflect that, and you've got other indicators like call
Speaker 1: ratio that's been on the rise. You want to see
Speaker 1: some confirmation of that bearishness. Now, you know if hedge
Speaker 1: funds and institutional investors are a little bit ahead of
Speaker 1: that as far retail investors. That's usually how it works.
Speaker 1: So if there had been outflows from institutional investors before
Speaker 1: retail investors start to, I guess join that outflow party.
Speaker 1: That's where you get more confirmation of Okay, the bearishness
Speaker 1: is taking cold. Maybe you get to an extreme barishness,
Speaker 1: and that's usually kind of where you bottom out. Liz Young,
Speaker 1: head of investment strategy at Sophie. Liz always great to
Speaker 1: chat with you, whether it's on Bloomberg Business Week Radio
Speaker 1: or joining Katie and me on Bloomberg Quick Take Stock
Speaker 1: at noon Eastern time on weekdays. Lize Young, had of
Speaker 1: investment Strategy at Sophie, joining us on the phone from
Speaker 1: New York City. Thanks for listening to Bloomberg Business Week.
Speaker 1: Download the podcast on iTunes, Soundcroud, or Bloomberg dot com,
Speaker 1: and you can also listen to our radio show at
Speaker 1: two pm Eastern on Bloomberg Radio, or watch us on
Speaker 1: YouTube search Bloomberg Global News