1 00:00:00,080 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:11,960 --> 00:00:15,560 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 3 00:00:15,600 --> 00:00:18,960 Speaker 2: with Paul Sweeney. Join us each day for insight from 4 00:00:18,960 --> 00:00:23,160 Speaker 2: the best in economics, finance, investment, and international relations. You 5 00:00:23,160 --> 00:00:26,520 Speaker 2: can also watch the show live on YouTube. Visit the 6 00:00:26,520 --> 00:00:31,280 Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday 7 00:00:31,280 --> 00:00:34,320 Speaker 2: mornings from seven to ten am Eastern from our global 8 00:00:34,360 --> 00:00:39,000 Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 9 00:00:39,360 --> 00:00:42,920 Speaker 2: or anywhere else you listen, and always I'm Bloomberg Radio, 10 00:00:43,080 --> 00:00:46,320 Speaker 2: the Bloomberg Terminal, and the Bloomberg Business App. 11 00:00:47,000 --> 00:00:47,680 Speaker 3: A good amount of. 12 00:00:47,680 --> 00:00:49,879 Speaker 2: Time here commercial free with William Lee. He's at the 13 00:00:49,880 --> 00:00:54,000 Speaker 2: Milkin Institute, of course, definitive at the International Monetary Fund, 14 00:00:54,000 --> 00:00:58,680 Speaker 2: particularly an international and Pacific rim economics and Bill, I'm 15 00:00:58,760 --> 00:01:01,840 Speaker 2: thrilled to have you out after Jersey with a domestic 16 00:01:01,960 --> 00:01:09,200 Speaker 2: feel to the rescue. Can it be international disinflation and deflation? 17 00:01:09,480 --> 00:01:13,600 Speaker 2: Will they export price decline and we will import that 18 00:01:13,760 --> 00:01:17,200 Speaker 2: price decline to assist America? 19 00:01:17,280 --> 00:01:19,959 Speaker 4: Well, China is the story of disinflation in this world, 20 00:01:20,120 --> 00:01:23,040 Speaker 4: and what we saw the latest Chinese data is just 21 00:01:23,120 --> 00:01:24,760 Speaker 4: the opposite of what we're seeing here in the US 22 00:01:25,440 --> 00:01:27,959 Speaker 4: the consumer is not strong enough to keep prices up, 23 00:01:28,480 --> 00:01:32,039 Speaker 4: and the certain the factory prices are coming down like crazy. 24 00:01:32,400 --> 00:01:35,440 Speaker 4: And the issue is how many goods from China are 25 00:01:35,480 --> 00:01:37,880 Speaker 4: we going to be importing to offset some of the 26 00:01:37,920 --> 00:01:40,800 Speaker 4: hotter domestic services. And I think Trip Paul's going to 27 00:01:40,840 --> 00:01:43,920 Speaker 4: tell you not enough. China will be some help on 28 00:01:43,959 --> 00:01:46,600 Speaker 4: the good side, but we already see that downward trend. 29 00:01:46,880 --> 00:01:49,520 Speaker 4: And the thing that worries Chair Powell, however, is the 30 00:01:49,560 --> 00:01:53,520 Speaker 4: domestic services. And unfortunately that the disinflation from the rest 31 00:01:53,520 --> 00:01:56,000 Speaker 4: of the world just isn't going to do much to 32 00:01:55,680 --> 00:01:58,800 Speaker 4: the price of auto mechanics and the price of auto insurance, 33 00:01:58,880 --> 00:02:01,600 Speaker 4: the price of healthcare, which are the elements of core 34 00:02:01,720 --> 00:02:03,680 Speaker 4: inflation that the FED is worried about. 35 00:02:03,840 --> 00:02:05,280 Speaker 5: So talk to us about some of the spin out 36 00:02:05,280 --> 00:02:07,160 Speaker 5: of China here, Bill. I mean, for me, you know, 37 00:02:07,160 --> 00:02:09,239 Speaker 5: when I look at China deflation, and certainly that CPI 38 00:02:09,320 --> 00:02:11,680 Speaker 5: print came in a little bit hotter than expected, I 39 00:02:11,800 --> 00:02:14,359 Speaker 5: just disregard that, right. I mean, it's still about PPI 40 00:02:14,440 --> 00:02:16,520 Speaker 5: in China. It's still about you know the fact that 41 00:02:16,560 --> 00:02:18,560 Speaker 5: it's really I mean, prices are really coming under pressure. 42 00:02:18,600 --> 00:02:20,760 Speaker 5: There on the property sector. Talk to us about some 43 00:02:20,800 --> 00:02:23,840 Speaker 5: of the spin we're hearing about local government finance vehicles 44 00:02:24,040 --> 00:02:26,200 Speaker 5: and the fact that it seems like Beijing may finally 45 00:02:26,240 --> 00:02:29,200 Speaker 5: be willing to let some of them actually default. 46 00:02:29,200 --> 00:02:33,119 Speaker 4: If I'm hearing that correctly, Damen, you've hit the real 47 00:02:33,160 --> 00:02:36,080 Speaker 4: issue of China run in the head. Right now, China's 48 00:02:36,080 --> 00:02:40,880 Speaker 4: economy is tottering because the shelter market, the property market 49 00:02:41,520 --> 00:02:45,320 Speaker 4: is in disarray. And right now, so much of wealth 50 00:02:45,360 --> 00:02:47,320 Speaker 4: in China is tied up in the property market. It's 51 00:02:47,360 --> 00:02:50,400 Speaker 4: seventy percent of household wealth that the government is going 52 00:02:50,440 --> 00:02:52,280 Speaker 4: to have to try to do something to support it. 53 00:02:52,480 --> 00:02:55,120 Speaker 4: But now with suddenly what we're finding is that the 54 00:02:55,120 --> 00:02:57,720 Speaker 4: government's telling us, you know, it may well be that 55 00:02:58,000 --> 00:03:01,760 Speaker 4: some property developers may have to default and have to 56 00:03:01,760 --> 00:03:03,960 Speaker 4: go out of business. That I think is a shocker 57 00:03:04,440 --> 00:03:07,359 Speaker 4: because right now, I think that the reform that's needed 58 00:03:07,440 --> 00:03:11,480 Speaker 4: in China is the reform property market that disperse well 59 00:03:11,600 --> 00:03:13,840 Speaker 4: so that it just doesn't stay in the property market. 60 00:03:13,680 --> 00:03:18,960 Speaker 4: But more importantly, the housing market in China requires some 61 00:03:19,080 --> 00:03:21,240 Speaker 4: kind of government stops to give a affordable housing. 62 00:03:21,280 --> 00:03:22,000 Speaker 6: That's well known. 63 00:03:22,280 --> 00:03:24,480 Speaker 4: But do we have enough of a rental market so 64 00:03:24,520 --> 00:03:27,720 Speaker 4: that the young urban professionals can actually rent rather than buy. 65 00:03:28,200 --> 00:03:31,680 Speaker 4: And unfortunately, the way financing is done in China is 66 00:03:31,680 --> 00:03:35,040 Speaker 4: that local governments depend on selling property to property developers 67 00:03:35,120 --> 00:03:38,320 Speaker 4: to build new houses in order to survive, and that 68 00:03:39,000 --> 00:03:41,640 Speaker 4: process is something that government seems to be wanted to perform. 69 00:03:42,200 --> 00:03:44,640 Speaker 2: Build league with us with the Milken Institute Commercial Free 70 00:03:44,680 --> 00:03:46,920 Speaker 2: in this hour, William Lee with us and then Jane 71 00:03:46,920 --> 00:03:49,800 Speaker 2: Foley will join us from Rabobank. A nice lift out 72 00:03:49,800 --> 00:03:51,640 Speaker 2: of the market, as we said with Ira Jersey, a 73 00:03:51,800 --> 00:03:54,480 Speaker 2: churn there out of the news. But clearly there's a 74 00:03:54,520 --> 00:03:57,800 Speaker 2: feeling your buoyancy and equities. The VICS comes into fourteen 75 00:03:57,840 --> 00:04:00,000 Speaker 2: point five six, the fixed incomes space. 76 00:04:00,080 --> 00:04:01,200 Speaker 3: This is very deceptive. 77 00:04:01,240 --> 00:04:04,440 Speaker 2: You've got pretty much unch, ten year, unch, two year, 78 00:04:04,680 --> 00:04:07,120 Speaker 2: I got a little bit of thirty bound love higher yield, 79 00:04:07,480 --> 00:04:09,120 Speaker 2: But where you really see it's. 80 00:04:08,920 --> 00:04:10,360 Speaker 3: The inflation is just to yield. 81 00:04:10,440 --> 00:04:14,120 Speaker 2: Damien sis back to one point eighty two percent, and 82 00:04:14,160 --> 00:04:17,279 Speaker 2: I'm sorry, we've basically gone round trip yep, back to 83 00:04:17,520 --> 00:04:22,280 Speaker 2: inflation and real economy buoyancy. I guess this is how 84 00:04:22,320 --> 00:04:24,839 Speaker 2: I would put it off that ten year real yield. 85 00:04:24,520 --> 00:04:26,280 Speaker 5: Tom, and I'd like to highlight what Bill said, I mean, 86 00:04:26,360 --> 00:04:28,240 Speaker 5: and it's not really about China. It's about the inflation 87 00:04:28,320 --> 00:04:30,719 Speaker 5: dynamic and how it grips the globe, not just the US. 88 00:04:30,720 --> 00:04:33,120 Speaker 5: Here and today, underneath the CPI print we saw here 89 00:04:33,160 --> 00:04:35,400 Speaker 5: in the US, we got some inflation data out of India, Germany, 90 00:04:35,400 --> 00:04:38,279 Speaker 5: and Brazil, and outside of Germany, which was flat Indian, Brazil. 91 00:04:38,480 --> 00:04:41,479 Speaker 5: I mean, you're seeing price pressures rise. So you know, 92 00:04:41,720 --> 00:04:44,400 Speaker 5: you know, when Bill talks about you know, PPI intflation 93 00:04:44,480 --> 00:04:46,360 Speaker 5: in China and how that's being exported to the rest 94 00:04:46,400 --> 00:04:49,320 Speaker 5: of the world. You know, Bill, take us through that calculus. 95 00:04:49,400 --> 00:04:52,320 Speaker 5: How are we seeing inflation actually accelerate in some of 96 00:04:52,320 --> 00:04:54,239 Speaker 5: these markets outside of the US. 97 00:04:55,279 --> 00:04:58,760 Speaker 4: Well, the man of supply as you know, Damien, and 98 00:04:58,800 --> 00:05:01,560 Speaker 4: on supply side, we don't see a lot of commodity 99 00:05:01,560 --> 00:05:04,240 Speaker 4: prices going up because the rest of the world is economy, 100 00:05:04,720 --> 00:05:07,760 Speaker 4: especially when we include China, just isn't strong enough to 101 00:05:07,760 --> 00:05:10,760 Speaker 4: push up commodity prices to offset a lot of the 102 00:05:10,800 --> 00:05:15,240 Speaker 4: deflationary trend on the industrial side. And for countries like 103 00:05:15,240 --> 00:05:18,400 Speaker 4: the United States where the domestic service component is such 104 00:05:18,440 --> 00:05:22,800 Speaker 4: an important part of overall inflation, we're somewhat insulated. We're 105 00:05:22,839 --> 00:05:26,640 Speaker 4: really relatively closed economy when it comes to inflation. Other 106 00:05:26,720 --> 00:05:30,599 Speaker 4: countries that are much more dependent on goods and their 107 00:05:30,720 --> 00:05:34,560 Speaker 4: baskets are much more heavily dependent on goods rather than services. 108 00:05:34,839 --> 00:05:36,960 Speaker 4: That's where the deflationary impact is the greatest. 109 00:05:37,279 --> 00:05:39,360 Speaker 3: Got a great team here at Bloomberg. This is the 110 00:05:39,400 --> 00:05:40,520 Speaker 3: secret of the terminal. 111 00:05:40,839 --> 00:05:44,920 Speaker 2: We've got terrific top live market coverage riding the herd 112 00:05:44,960 --> 00:05:49,480 Speaker 2: on inflation. Jis obviously quoted worldwide end occurring. Chris Ancy 113 00:05:49,600 --> 00:05:52,800 Speaker 2: out there today in Sebastian Void some of the insights 114 00:05:52,839 --> 00:05:56,680 Speaker 2: Damian Sasaur. The food index was unchanged except for Paul 115 00:05:56,720 --> 00:06:01,520 Speaker 2: Sweeney's eighty six dollars steak out in the rockies somewhere. 116 00:06:01,720 --> 00:06:06,240 Speaker 2: The core measure was boosted by shelter. You think in 117 00:06:06,320 --> 00:06:10,839 Speaker 2: New York City airfares, You think motor vehicle insurance, what's 118 00:06:10,880 --> 00:06:13,960 Speaker 2: a cost to ensure a car? Used to be like 119 00:06:14,000 --> 00:06:17,560 Speaker 2: an afterthought? Forget about that. It's like it's like actually 120 00:06:17,640 --> 00:06:21,680 Speaker 2: tangible apparel. That's you know, I mean, that's Lisa, She's 121 00:06:21,760 --> 00:06:25,320 Speaker 2: going nuts on that. And what in God's name is recreation? 122 00:06:25,520 --> 00:06:26,359 Speaker 3: I mean, I don't know what that. 123 00:06:26,440 --> 00:06:28,560 Speaker 5: Definitely I can define recreation for you, but I prefer 124 00:06:28,600 --> 00:06:29,400 Speaker 5: not to do it on airtime. 125 00:06:29,440 --> 00:06:31,440 Speaker 3: Okay, why don't you go to Billy here? 126 00:06:31,480 --> 00:06:34,440 Speaker 5: I mean Bill, Bill, you hit on I mean for something. 127 00:06:34,520 --> 00:06:36,960 Speaker 5: I mean like this is just a clinic. I mean commodities, 128 00:06:37,080 --> 00:06:39,640 Speaker 5: terms of trade, the importance of goods pricing and how 129 00:06:39,640 --> 00:06:42,240 Speaker 5: that impacts markets, not just you know outside of the 130 00:06:42,320 --> 00:06:44,000 Speaker 5: US who aren't so relying on it. Taught to us 131 00:06:44,000 --> 00:06:46,560 Speaker 5: a little bit about that, talked to us about El Nino. 132 00:06:46,640 --> 00:06:49,360 Speaker 5: I mean, we've had bad coffee harvest in Vietnam, poor 133 00:06:49,440 --> 00:06:52,640 Speaker 5: cocoa yields in Africa, weeks soybing crops in Brazil. How 134 00:06:52,880 --> 00:06:56,640 Speaker 5: is commodity prices or how are commodity prices, sorry, impacting 135 00:06:56,640 --> 00:06:58,120 Speaker 5: inflation in other areas upon it. 136 00:06:59,200 --> 00:07:01,400 Speaker 4: I think one thing we forgotten is that we have 137 00:07:01,440 --> 00:07:04,120 Speaker 4: a war in Ukraine. Ukraine is a bread basket for 138 00:07:04,200 --> 00:07:07,920 Speaker 4: the world in terms of wheat and cooking oil exports, 139 00:07:08,080 --> 00:07:10,520 Speaker 4: and so what we actually have is a shortage in 140 00:07:10,600 --> 00:07:13,520 Speaker 4: many many areas. Now it is offset by a lot 141 00:07:13,560 --> 00:07:17,080 Speaker 4: of bumper harvests elsewhere. But I think that that uncertainty 142 00:07:17,160 --> 00:07:20,360 Speaker 4: on the on the commodity supply side is something that 143 00:07:20,400 --> 00:07:21,880 Speaker 4: the markets really haven't priced in. 144 00:07:22,400 --> 00:07:23,320 Speaker 6: For the rest of the world. 145 00:07:23,480 --> 00:07:29,040 Speaker 4: But the US trade is someone who's really focused on 146 00:07:29,280 --> 00:07:32,720 Speaker 4: what impact this had on the consumer of the United States, 147 00:07:32,760 --> 00:07:35,840 Speaker 4: and that really has very little because the other other 148 00:07:36,080 --> 00:07:39,200 Speaker 4: countries have offset that uncertainty. But certainly a lot of 149 00:07:39,240 --> 00:07:43,000 Speaker 4: the emergent markets depended on the Ukraine is really getting hurt. 150 00:07:43,200 --> 00:07:48,360 Speaker 2: Standard in poor futures five to two, one seven up 151 00:07:48,400 --> 00:07:51,560 Speaker 2: six tens of a percent now thirty nine thousand and 152 00:07:51,560 --> 00:07:53,960 Speaker 2: three hundred. I'm not in the forty thousand watch yet. 153 00:07:54,120 --> 00:07:56,280 Speaker 2: John Faraoh asked me that this morning. Is it not 154 00:07:57,120 --> 00:08:00,320 Speaker 2: in the forty thousand watch yet? Nasak up as eight 155 00:08:00,360 --> 00:08:03,200 Speaker 2: tens of present? Billy I had a couple more questions 156 00:08:03,880 --> 00:08:06,600 Speaker 2: for you, and this goes off your heritage at the IMF. 157 00:08:07,320 --> 00:08:12,280 Speaker 2: Grgavin Companies stopped me cold pushing on a year ago 158 00:08:12,960 --> 00:08:17,640 Speaker 2: with a five year view that was remarkably tepid on 159 00:08:17,800 --> 00:08:22,200 Speaker 2: global growth, including America. Is that five year gloom being 160 00:08:22,320 --> 00:08:26,640 Speaker 2: tested right now? Does a new productivity at some point? 161 00:08:26,800 --> 00:08:29,720 Speaker 2: Is it going to make for a more optimistic IMF 162 00:08:29,840 --> 00:08:30,640 Speaker 2: five year view? 163 00:08:32,040 --> 00:08:36,080 Speaker 4: The IMF right now is continuing to bring down its 164 00:08:36,120 --> 00:08:39,400 Speaker 4: longer term forecast because population growth in the developed countries 165 00:08:39,559 --> 00:08:44,760 Speaker 4: is slowing down tremendously. But as you know, technological progress 166 00:08:44,840 --> 00:08:46,240 Speaker 4: is something that could offset. 167 00:08:45,960 --> 00:08:46,360 Speaker 3: Some of Right. 168 00:08:46,960 --> 00:08:50,080 Speaker 4: We both live through the computer PC revolution of the nineties, 169 00:08:50,400 --> 00:08:53,000 Speaker 4: and the data show that we got a huge productivity 170 00:08:53,040 --> 00:08:55,840 Speaker 4: boost with the introduction of the computer and PC during 171 00:08:55,840 --> 00:08:59,120 Speaker 4: the nineties, and unfortunately it was transitory. It did, but 172 00:08:59,240 --> 00:09:02,000 Speaker 4: the translatory it was over a decade, and it doubled 173 00:09:02,240 --> 00:09:06,720 Speaker 4: the profits per unit of output during that period. We 174 00:09:06,720 --> 00:09:09,920 Speaker 4: we're seeing the beginning of a similar revolution AI, and 175 00:09:09,960 --> 00:09:12,760 Speaker 4: I'm very confident that would they be seeing that kind 176 00:09:12,760 --> 00:09:15,360 Speaker 4: of productivity boost and that will offset some of the 177 00:09:15,440 --> 00:09:17,120 Speaker 4: price pressure that we're seeing, but it won't do it 178 00:09:17,160 --> 00:09:19,280 Speaker 4: for another two three years, and that's what the FED 179 00:09:19,360 --> 00:09:21,520 Speaker 4: is looking forward to. And markets have not price dated 180 00:09:21,640 --> 00:09:23,880 Speaker 4: properly because the neutral rate is going to be much 181 00:09:23,960 --> 00:09:26,720 Speaker 4: higher over the next three to five years than markets 182 00:09:26,720 --> 00:09:27,439 Speaker 4: are anticipating. 183 00:09:27,559 --> 00:09:30,160 Speaker 2: Robert from a goalie camp up near Hamilton. It's up 184 00:09:30,160 --> 00:09:31,880 Speaker 2: near Lake Marine. I don't know if it's called Gator. 185 00:09:31,920 --> 00:09:36,360 Speaker 2: Hamilton Auto Insurance up twenty one percent year over year, Robert, thank. 186 00:09:36,200 --> 00:09:38,000 Speaker 3: You for that. Billy. 187 00:09:38,120 --> 00:09:41,199 Speaker 2: I want to dovetail in your wisdom in your experience 188 00:09:41,720 --> 00:09:44,120 Speaker 2: with my book of the Summer. Chris Miller's Chip War. 189 00:09:44,840 --> 00:09:49,440 Speaker 2: Whither Taiwan? How fragile does a giant like Bill Lee 190 00:09:49,920 --> 00:09:54,080 Speaker 2: see Taiwan in their integrated circuit system? 191 00:09:54,240 --> 00:09:58,640 Speaker 4: Right now, you have to remember that Taiwan is going 192 00:09:58,679 --> 00:10:02,560 Speaker 4: to be your source of the productivity revolution and ai revolution. 193 00:10:03,400 --> 00:10:06,520 Speaker 4: If China really decides to make use of the of 194 00:10:06,720 --> 00:10:10,880 Speaker 4: the disruptions in the world and the joke little giplical 195 00:10:10,960 --> 00:10:15,160 Speaker 4: uncertainty by doing something to Taiwan to threaten its independence, 196 00:10:15,640 --> 00:10:18,360 Speaker 4: you're going to start seeing that supplies shortages of the 197 00:10:18,400 --> 00:10:20,679 Speaker 4: sort thing you never saw before. COVID's gonna look like 198 00:10:20,720 --> 00:10:22,960 Speaker 4: a little drop in the bucket compared to what a 199 00:10:23,000 --> 00:10:25,280 Speaker 4: shortage of chips will do. And I think that's the market. 200 00:10:25,320 --> 00:10:29,080 Speaker 4: That's something the markets have completely underestimated. So I think 201 00:10:29,120 --> 00:10:34,400 Speaker 4: the risk of a sustained huge productivity shock and a 202 00:10:34,440 --> 00:10:38,800 Speaker 4: supply supply shortage of chips is very, very real if 203 00:10:38,880 --> 00:10:42,920 Speaker 4: China starts to divert attention from its uh withering economy 204 00:10:43,240 --> 00:10:46,760 Speaker 4: by focusing on a little bit more aggressive posture to 205 00:10:46,800 --> 00:10:48,679 Speaker 4: try to race nationalism. 206 00:10:48,880 --> 00:10:52,720 Speaker 2: And this goes to Erinal Stravitaz's new book twenty fifty four. Today, 207 00:10:52,800 --> 00:10:56,559 Speaker 2: thank you James Travenas for being with us before Billy, Damian. 208 00:10:56,360 --> 00:10:58,679 Speaker 5: Bill, bond's a rallying here. I mean, we've got the 209 00:10:58,720 --> 00:11:01,120 Speaker 5: two europe to down two BIPs, we've got the tenure 210 00:11:01,160 --> 00:11:03,680 Speaker 5: down two BIPs of four eight percent, and the dollar 211 00:11:04,000 --> 00:11:07,000 Speaker 5: is rallying. Bill, talk to us about that. I'm sorry, 212 00:11:07,360 --> 00:11:09,800 Speaker 5: falling taught to us about the runway for the dollar 213 00:11:09,840 --> 00:11:12,480 Speaker 5: to weaken in this environment. I mean, you know, most 214 00:11:12,480 --> 00:11:15,079 Speaker 5: people would think, you know, structurally speaking, real yields or 215 00:11:15,240 --> 00:11:16,960 Speaker 5: you know, yield differentials here in the US are going 216 00:11:17,040 --> 00:11:19,640 Speaker 5: to remain wide. You know, you've got the US exceptionalism 217 00:11:19,679 --> 00:11:22,200 Speaker 5: story taught to us about the runway for dollar weakness. 218 00:11:21,880 --> 00:11:25,240 Speaker 4: Here, Damian, I think the story of that you were 219 00:11:25,280 --> 00:11:26,880 Speaker 4: just talking about that we got a little bit harder 220 00:11:26,920 --> 00:11:30,720 Speaker 4: print on inflation. And yet the fixed income markets are 221 00:11:30,760 --> 00:11:33,840 Speaker 4: pretty confirmed with the fact that we are in a 222 00:11:33,880 --> 00:11:37,600 Speaker 4: declining rate environment. So they're very confident that Suir Pal 223 00:11:37,800 --> 00:11:41,240 Speaker 4: will be lowering rates. The issue is how much, how soon, 224 00:11:41,320 --> 00:11:44,400 Speaker 4: and how fast. And it seems like the burst of 225 00:11:44,440 --> 00:11:48,160 Speaker 4: inflation that we saw today isn't enough to convince markets 226 00:11:48,160 --> 00:11:51,320 Speaker 4: that the FED will be deterred from its downward path. 227 00:11:51,679 --> 00:11:53,560 Speaker 5: You know, and Bill I touched on yield differentials, and 228 00:11:53,600 --> 00:11:56,040 Speaker 5: there's no wider yield differential than you look at, you know, 229 00:11:56,080 --> 00:11:58,400 Speaker 5: any currency and China, right, I mean you look at 230 00:11:58,480 --> 00:12:00,319 Speaker 5: yields in China the ten years at what two thirty 231 00:12:00,320 --> 00:12:02,520 Speaker 5: four now, I mean just off an all time low. 232 00:12:02,880 --> 00:12:06,000 Speaker 5: Talk to us about this funding currency dynamic with the 233 00:12:06,000 --> 00:12:09,400 Speaker 5: BOJ now potentially tightening rates and you know, basically the 234 00:12:09,640 --> 00:12:11,520 Speaker 5: the you know, you know, Japan no longer being a 235 00:12:11,559 --> 00:12:15,480 Speaker 5: funding investors paradise. How you've seen some switching into the 236 00:12:15,559 --> 00:12:18,839 Speaker 5: China yuan, into a currency that seems weak and might 237 00:12:18,880 --> 00:12:19,679 Speaker 5: even weaken further. 238 00:12:20,760 --> 00:12:23,680 Speaker 4: Yeah, absolutely, And in fact, I think the markets have 239 00:12:23,760 --> 00:12:27,880 Speaker 4: really misplaced its its its attention on the Japanese yen. Yes, 240 00:12:27,920 --> 00:12:30,520 Speaker 4: it is the funding currency, but the Japanese yen is 241 00:12:30,559 --> 00:12:34,439 Speaker 4: also something that that has traditionally been a domestic currency 242 00:12:34,480 --> 00:12:38,040 Speaker 4: and domestic uh bond market because most of the holders 243 00:12:38,080 --> 00:12:42,280 Speaker 4: of jgb's are Japanese. And I think the fact that 244 00:12:42,360 --> 00:12:45,200 Speaker 4: China has really pushing its way into becoming a reserve 245 00:12:45,280 --> 00:12:50,480 Speaker 4: currency and digitizing it's its economy, digitizing its currency, trying 246 00:12:50,480 --> 00:12:52,920 Speaker 4: to get more and more emerging markets to use it 247 00:12:52,960 --> 00:12:55,600 Speaker 4: as a transactions currency, that the prominence of the run 248 00:12:55,679 --> 00:12:57,080 Speaker 4: and be in the future is going to be much 249 00:12:57,120 --> 00:12:59,600 Speaker 4: greater than I think that people realize, and that may 250 00:12:59,679 --> 00:13:03,880 Speaker 4: be that that next competitor for the US dollar prominence. 251 00:13:04,160 --> 00:13:06,960 Speaker 2: Billy, thank you so much with the Milkin Institute. What 252 00:13:07,000 --> 00:13:20,080 Speaker 2: a what a smart idea for your team. Greg Daka 253 00:13:20,280 --> 00:13:22,840 Speaker 2: joins us right now with Ernst and Young. I'm sorry, 254 00:13:22,880 --> 00:13:23,640 Speaker 2: I'm old school. 255 00:13:23,640 --> 00:13:25,840 Speaker 3: It's not e y. Yeah, I know you got eight 256 00:13:25,880 --> 00:13:29,080 Speaker 3: consultants saying it's e y, it's Ernst and Winnie. 257 00:13:30,120 --> 00:13:33,080 Speaker 2: Okay, my grandfather's accounting firm was Ernstan Winnie. 258 00:13:32,800 --> 00:13:33,640 Speaker 3: So I'm always there. 259 00:13:33,920 --> 00:13:37,679 Speaker 2: E y E I E y parthenon. Greg dot Co 260 00:13:37,880 --> 00:13:40,800 Speaker 2: is with us right now. I want you to talk 261 00:13:41,400 --> 00:13:46,360 Speaker 2: about the disconnect of fancy people like you and our 262 00:13:46,400 --> 00:13:50,480 Speaker 2: listeners and viewers are going these people are nuts. There's 263 00:13:50,600 --> 00:13:54,280 Speaker 2: no disinflation. I get that more than any other comment 264 00:13:54,760 --> 00:13:58,600 Speaker 2: from the fans out there. There's a massive disconnect between 265 00:13:58,760 --> 00:14:00,640 Speaker 2: society and people like you. 266 00:14:00,840 --> 00:14:03,320 Speaker 7: Right There is a massive disconnect, and that's because most 267 00:14:03,320 --> 00:14:06,320 Speaker 7: people don't necessarily think about inflation the same way as 268 00:14:06,320 --> 00:14:10,840 Speaker 7: economists and academics think about inflation. When we think about inflation, 269 00:14:10,880 --> 00:14:14,000 Speaker 7: it's essentially the pace of growth of prices of costs 270 00:14:14,000 --> 00:14:17,280 Speaker 7: of wages. Most people think in nominal terms. Most people 271 00:14:17,320 --> 00:14:19,880 Speaker 7: think in terms of levels, right. They think about cost 272 00:14:19,920 --> 00:14:22,360 Speaker 7: levels when they go buy their groceries, when they're by 273 00:14:22,560 --> 00:14:25,720 Speaker 7: gas or even business leaders think about wage levels in 274 00:14:25,800 --> 00:14:29,000 Speaker 7: terms of the aggregate wage bill or company. Tom is 275 00:14:29,040 --> 00:14:29,560 Speaker 7: the disconnect? 276 00:14:29,640 --> 00:14:29,840 Speaker 3: Tom? 277 00:14:29,840 --> 00:14:31,520 Speaker 5: Did you see Greg Daka when he came in, he 278 00:14:31,560 --> 00:14:34,120 Speaker 5: brought his laptop. He was ready for this inflation print. 279 00:14:34,160 --> 00:14:35,560 Speaker 5: He had a lot with him, a lot of equipment, 280 00:14:35,560 --> 00:14:37,920 Speaker 5: a lot of hardware. Greg, what was your big takeaway? 281 00:14:37,960 --> 00:14:40,400 Speaker 2: And I take you point He walked in and plugged 282 00:14:40,400 --> 00:14:42,120 Speaker 2: it in stack isle of dimmed. 283 00:14:42,760 --> 00:14:44,360 Speaker 1: You know, I don't know if you caught this. Yesterday. 284 00:14:44,400 --> 00:14:47,640 Speaker 5: Gary Cohene, former CEO of Goldman Sachs, was on the 285 00:14:47,640 --> 00:14:49,840 Speaker 5: tape talking about exactly where we're talking about the additive 286 00:14:49,920 --> 00:14:52,120 Speaker 5: nature of inflation. Right, we think of it as a 287 00:14:52,200 --> 00:14:55,720 Speaker 5: rate of change, but your average you know, consumers thinking 288 00:14:55,760 --> 00:14:57,640 Speaker 5: of levels of price levels. You know, talk to us 289 00:14:57,640 --> 00:15:00,760 Speaker 5: about your big takeaway? What should the US concus be 290 00:15:00,840 --> 00:15:01,920 Speaker 5: taking away from this print? 291 00:15:02,200 --> 00:15:04,680 Speaker 7: Well, I think generally we're still moving in the right direction, 292 00:15:04,760 --> 00:15:08,040 Speaker 7: so there's still that disinflationary impulse. It's going to be bumpy. 293 00:15:08,160 --> 00:15:09,680 Speaker 7: It was bumpy on the way up, it's going to 294 00:15:09,680 --> 00:15:11,600 Speaker 7: be bumpy on the way down. But the thing is 295 00:15:11,600 --> 00:15:14,520 Speaker 7: that if you look back at price levels relative to 296 00:15:14,560 --> 00:15:18,160 Speaker 7: twenty nineteen, we're about twenty twenty one percent higher in 297 00:15:18,240 --> 00:15:21,640 Speaker 7: terms of price levels on average relative to pre COVID. 298 00:15:22,000 --> 00:15:24,680 Speaker 7: That is what most people are thinking about when they 299 00:15:24,680 --> 00:15:25,480 Speaker 7: think about inflation. 300 00:15:25,520 --> 00:15:28,720 Speaker 3: Pro tip I measured in dog food exactly. 301 00:15:28,720 --> 00:15:32,280 Speaker 2: It's way above the number you just everybody, everybody's got 302 00:15:32,320 --> 00:15:36,240 Speaker 2: a different thing. I'm sorry, what Vet Bill, No, it's 303 00:15:36,240 --> 00:15:39,160 Speaker 2: Gainsburger's What Vet Bill and Canal Fee are charge of 304 00:15:39,240 --> 00:15:40,680 Speaker 2: me is is ridiculous. 305 00:15:40,720 --> 00:15:41,760 Speaker 3: We're on Apple CarPlay. 306 00:15:41,800 --> 00:15:44,680 Speaker 2: We are commercial free across this inflation report. 307 00:15:44,720 --> 00:15:45,440 Speaker 3: What a great. 308 00:15:45,200 --> 00:15:48,160 Speaker 2: Lineup, Ira Jersey to Bill Lee, Greg Dakl joining as 309 00:15:48,200 --> 00:15:50,720 Speaker 2: some Uy parthenon right now on YouTube. 310 00:15:50,720 --> 00:15:53,440 Speaker 3: It's just real simple, folks. Go to YouTube. You're in 311 00:15:53,480 --> 00:15:56,440 Speaker 3: your bedroom, you're in your living room, you're in your whatever. 312 00:15:56,600 --> 00:16:00,640 Speaker 2: Go to YouTube, search Bloomberg Podcasts and we are there 313 00:16:00,640 --> 00:16:02,800 Speaker 2: with a wonderful live chat as well. 314 00:16:02,880 --> 00:16:05,080 Speaker 5: Damien, Yeah, talk to us about shelter. We talked to 315 00:16:05,120 --> 00:16:06,720 Speaker 5: us about some of the components within the print we 316 00:16:06,800 --> 00:16:07,920 Speaker 5: just saw. Greg, I don't know if you had a 317 00:16:08,000 --> 00:16:09,280 Speaker 5: chance to take a look, I mean, talk to us 318 00:16:09,280 --> 00:16:11,960 Speaker 5: about the supercore, anything there that we should be taking away. 319 00:16:12,200 --> 00:16:15,800 Speaker 7: Well, I think, generally speaking, housing inflation is still the 320 00:16:15,840 --> 00:16:18,520 Speaker 7: area of concern. When it comes to overall inflation. We 321 00:16:18,560 --> 00:16:21,480 Speaker 7: still have shelter cost inflation in the six percent vicinity. 322 00:16:21,800 --> 00:16:24,360 Speaker 7: It needs to come down to around four percent to 323 00:16:24,480 --> 00:16:27,720 Speaker 7: bring headline inflation and core inflation back down towards that 324 00:16:27,760 --> 00:16:30,960 Speaker 7: two two and a half percent range. We're not there yet. 325 00:16:31,200 --> 00:16:34,000 Speaker 7: We know there was a lot of noisiness in the 326 00:16:34,080 --> 00:16:37,560 Speaker 7: January data. The BLS had a commodity price webinar to 327 00:16:37,600 --> 00:16:40,640 Speaker 7: explain where some of the volatility came from, especially on 328 00:16:40,680 --> 00:16:44,000 Speaker 7: the owner's equivalent side of the picture. But we are 329 00:16:44,080 --> 00:16:46,720 Speaker 7: seeing this inflation continue to filter through. It's just taking 330 00:16:46,760 --> 00:16:49,720 Speaker 7: a little bit longer from a FED perspective, from an 331 00:16:49,720 --> 00:16:53,680 Speaker 7: economist perspective, from an investor's perspective. Inflation is still moving 332 00:16:53,720 --> 00:16:56,400 Speaker 7: towards that two percent target, and that will allow the 333 00:16:56,440 --> 00:17:00,200 Speaker 7: FED to gradually ease monetary policy. Not in March, not 334 00:17:00,320 --> 00:17:01,640 Speaker 7: in May, probably in June. 335 00:17:01,680 --> 00:17:03,640 Speaker 5: Well, I mean that's interesting, So June we're looking for it. 336 00:17:03,640 --> 00:17:06,040 Speaker 5: But you know, the question I have is, Okay, we 337 00:17:06,080 --> 00:17:07,760 Speaker 5: can get that cut in June, but then are we 338 00:17:07,800 --> 00:17:10,359 Speaker 5: expecting successive cuts the way the market's pricing, and I 339 00:17:10,359 --> 00:17:12,480 Speaker 5: mean what's interesting is if you look at Ois and 340 00:17:12,520 --> 00:17:14,520 Speaker 5: you look at Decembergreg, and you know this as well 341 00:17:14,520 --> 00:17:16,680 Speaker 5: as anyone. You know, we're pricing in three four cuts 342 00:17:16,720 --> 00:17:19,159 Speaker 5: through the end of this year. But my goodness, the 343 00:17:19,320 --> 00:17:22,760 Speaker 5: probability distribution around what might actually happen by the end 344 00:17:22,760 --> 00:17:24,720 Speaker 5: of this year. I think you've got options markets telling 345 00:17:24,720 --> 00:17:26,399 Speaker 5: you it could be a hike or you can have 346 00:17:26,480 --> 00:17:28,320 Speaker 5: five cuts. I mean, talk to us a little bit 347 00:17:28,320 --> 00:17:29,879 Speaker 5: about what the market has right and what it has 348 00:17:29,880 --> 00:17:31,160 Speaker 5: wrong here on a forward basis. 349 00:17:31,200 --> 00:17:34,600 Speaker 7: I think the key differential here in terms of participants 350 00:17:34,640 --> 00:17:37,560 Speaker 7: FED participants view of where monetary policy is going to head, 351 00:17:37,560 --> 00:17:40,719 Speaker 7: where investors think policy is going to head is largely 352 00:17:40,720 --> 00:17:43,080 Speaker 7: a function of the fact that the FED is heavily 353 00:17:43,520 --> 00:17:47,000 Speaker 7: data dependent, and that heavy data dependence in a volatile 354 00:17:47,080 --> 00:17:50,400 Speaker 7: environment is a very risky proposition because anytime you get 355 00:17:50,400 --> 00:17:53,960 Speaker 7: a reading that's not in line with inflation expectations, with 356 00:17:54,000 --> 00:17:58,680 Speaker 7: employment expectations, markets start to rapidly reprice expectations. 357 00:17:58,800 --> 00:17:59,359 Speaker 3: You have an. 358 00:17:59,240 --> 00:18:02,240 Speaker 2: EI different cents you people through and then consulting really 359 00:18:02,240 --> 00:18:05,359 Speaker 2: have a different handle across the fabric of America from 360 00:18:05,960 --> 00:18:09,520 Speaker 2: market economists and Wallstreet ORNs. What is Ey seeing in 361 00:18:09,640 --> 00:18:12,560 Speaker 2: terms of GDP spirit out there. 362 00:18:12,800 --> 00:18:14,720 Speaker 7: Well, I think there are two things that we're hearing 363 00:18:14,800 --> 00:18:17,680 Speaker 7: from our clients that have differentiated our perspective in terms 364 00:18:17,680 --> 00:18:20,280 Speaker 7: of the economy. Number one, the fact that the labor 365 00:18:20,320 --> 00:18:23,120 Speaker 7: market is very different today than it was before the pandemic. 366 00:18:23,280 --> 00:18:25,680 Speaker 7: The value of talent remains much higher. We had been 367 00:18:25,720 --> 00:18:28,600 Speaker 7: telling a lot of our clients that because that value 368 00:18:28,640 --> 00:18:30,040 Speaker 7: is higher, we weren't going to see the way of 369 00:18:30,040 --> 00:18:33,359 Speaker 7: a layoffs that we've seen in prior pre recessionary environments. 370 00:18:33,600 --> 00:18:36,560 Speaker 7: That's what's held up the economy. Number Two, there's much 371 00:18:36,720 --> 00:18:40,280 Speaker 7: less pricing power. That is why I'm confident that the 372 00:18:40,359 --> 00:18:43,640 Speaker 7: last disinflation mile will not be the most difficult. More 373 00:18:43,680 --> 00:18:47,240 Speaker 7: price in sensitivities, reduce markups. Those are the types of 374 00:18:47,320 --> 00:18:50,040 Speaker 7: dynamics that in the end really drive inflation. It's not 375 00:18:50,119 --> 00:18:53,400 Speaker 7: about the month over month change in some idiosyncratic factors. 376 00:18:53,640 --> 00:18:56,720 Speaker 2: Thank you, Greg Docom, I greatly appreciate it. Ey parts 377 00:18:56,760 --> 00:19:02,439 Speaker 2: then women from Michigan thrilled to have with us this 378 00:19:02,520 --> 00:19:05,399 Speaker 2: morning for this entire half our Michael Wilson. He is 379 00:19:05,400 --> 00:19:10,439 Speaker 2: at Morgan Stanley, coach Effequity Strategies CIO, and among other things, 380 00:19:10,920 --> 00:19:15,119 Speaker 2: author and driving force behind Really Smart thirty six page 381 00:19:16,000 --> 00:19:17,760 Speaker 2: research pieces. 382 00:19:17,600 --> 00:19:21,359 Speaker 3: On what matters at the moment. Mike Wilson, good morning. 383 00:19:21,800 --> 00:19:21,879 Speaker 1: You. 384 00:19:22,000 --> 00:19:25,639 Speaker 2: People have done a tour to force on AI and 385 00:19:25,720 --> 00:19:28,840 Speaker 2: on what's to come. Does Mike Wilson believe in the 386 00:19:28,880 --> 00:19:31,040 Speaker 2: stock market and believe in AI? 387 00:19:33,080 --> 00:19:36,240 Speaker 6: Well, good morning, Tom, Yeah, thanks for having me. We 388 00:19:36,280 --> 00:19:37,120 Speaker 6: do believe in AI. 389 00:19:37,200 --> 00:19:41,520 Speaker 8: We've been probably more front footed on this theme as 390 00:19:41,560 --> 00:19:44,000 Speaker 8: a firm over the last year year and a half. 391 00:19:44,200 --> 00:19:46,760 Speaker 8: And the way I would characterize it is is that 392 00:19:47,359 --> 00:19:51,320 Speaker 8: this is the next big probably the next big productivity driver, 393 00:19:52,240 --> 00:19:55,159 Speaker 8: but it's not going to happen immediately, and we're seeing 394 00:19:55,200 --> 00:19:59,200 Speaker 8: that manifest itself in the stock market right so so far, 395 00:20:00,160 --> 00:20:03,160 Speaker 8: what's really worked from AI has been what we call 396 00:20:03,240 --> 00:20:06,840 Speaker 8: the enablers, the companies that are allowing this new. 397 00:20:06,720 --> 00:20:08,880 Speaker 6: Platform to be developed and built out. 398 00:20:08,920 --> 00:20:13,280 Speaker 8: And we've seen obviously some of the stocks go somewhat stratospheric. 399 00:20:13,600 --> 00:20:17,440 Speaker 8: And the real opportunity though, is going to be when 400 00:20:17,600 --> 00:20:21,360 Speaker 8: this technology diffuses across the economy. 401 00:20:21,480 --> 00:20:24,400 Speaker 6: And that would be the adopters and that's very very 402 00:20:24,400 --> 00:20:25,040 Speaker 6: early days. 403 00:20:25,080 --> 00:20:28,080 Speaker 8: Now there's been some winners in that already, but boy, 404 00:20:28,119 --> 00:20:31,760 Speaker 8: it's kind of hard to find them so far. The 405 00:20:31,800 --> 00:20:34,760 Speaker 8: other theme that we've been really espousing for the last 406 00:20:34,840 --> 00:20:36,480 Speaker 8: year and a half when we were early on this 407 00:20:36,760 --> 00:20:40,960 Speaker 8: is this idea of operational efficiency. In fact, many companies 408 00:20:42,000 --> 00:20:45,280 Speaker 8: adopted that phrase for their own taking because that's what 409 00:20:45,320 --> 00:20:47,240 Speaker 8: they needed to do over the last year. As you know, 410 00:20:47,359 --> 00:20:51,240 Speaker 8: it's been a very unbalanced economy where you have a 411 00:20:51,359 --> 00:20:55,159 Speaker 8: very heavy handed government influence which is kind of keeping 412 00:20:55,200 --> 00:20:57,560 Speaker 8: the aggregate statistics strong, and then. 413 00:20:57,440 --> 00:20:59,600 Speaker 6: You have companies that have unique. 414 00:20:59,240 --> 00:21:02,160 Speaker 8: Growth opportunity of these, but then the sort of average 415 00:21:02,160 --> 00:21:06,199 Speaker 8: company is really struggling still with cost inflation, you know, 416 00:21:06,320 --> 00:21:10,160 Speaker 8: labor tightness, cost of capital, et cetera. And so efficiency 417 00:21:10,200 --> 00:21:11,880 Speaker 8: is one way to get around that, right, keeping your 418 00:21:11,880 --> 00:21:12,720 Speaker 8: cost down. 419 00:21:12,960 --> 00:21:15,920 Speaker 2: And having it mar and I'll dovetail it to Alan 420 00:21:16,000 --> 00:21:18,520 Speaker 2: Zendner's new productivity, and we're hearing a lot about that 421 00:21:19,000 --> 00:21:19,480 Speaker 2: on the show. 422 00:21:19,520 --> 00:21:21,160 Speaker 3: Micha Wilson, I'm not going to mince words. 423 00:21:21,160 --> 00:21:23,960 Speaker 2: You've been to Pinata for people that are like I 424 00:21:24,040 --> 00:21:26,920 Speaker 2: want to participate in the market, but I just don't 425 00:21:26,960 --> 00:21:30,320 Speaker 2: get the exuberance out there. What's the Wilson meter look 426 00:21:30,480 --> 00:21:33,720 Speaker 2: like right now? On market exuberance. It don't narrow it 427 00:21:33,720 --> 00:21:38,320 Speaker 2: down to the silliness of Nvidia, but how effervescent, how 428 00:21:38,400 --> 00:21:41,399 Speaker 2: exuberant is a market I want to be in, but 429 00:21:41,440 --> 00:21:42,440 Speaker 2: I'm scared stiff. 430 00:21:43,920 --> 00:21:45,840 Speaker 8: Yeah, I mean, look, there's there's been some some big 431 00:21:45,840 --> 00:21:48,240 Speaker 8: winners and some big losers. It's been a stock picking 432 00:21:48,320 --> 00:21:51,280 Speaker 8: environment quite frankly really for the last year year and 433 00:21:51,320 --> 00:21:54,399 Speaker 8: a half. And look, we had that major low that 434 00:21:54,520 --> 00:21:58,080 Speaker 8: was made in October twenty two one that we identified 435 00:21:58,119 --> 00:22:01,040 Speaker 8: as a good opportunity, the one last all we felt 436 00:22:01,200 --> 00:22:03,680 Speaker 8: was close but didn't quite get there. But of course 437 00:22:03,680 --> 00:22:05,919 Speaker 8: we had a huge rally. And what's happened Tom and 438 00:22:05,960 --> 00:22:08,400 Speaker 8: I think this is a differentiating feature of our view 439 00:22:08,480 --> 00:22:10,760 Speaker 8: versus others, is we view the. 440 00:22:10,760 --> 00:22:13,600 Speaker 6: Last four to five month rally as. 441 00:22:13,480 --> 00:22:19,280 Speaker 8: Being driven more by very loose financial conditions, extreme liquidity, 442 00:22:19,760 --> 00:22:21,840 Speaker 8: which is finding its way into the right parts of 443 00:22:21,840 --> 00:22:23,440 Speaker 8: the market, and that and the parts of the market 444 00:22:23,480 --> 00:22:26,680 Speaker 8: that are working are what we call high quality growth stocks, 445 00:22:26,720 --> 00:22:28,119 Speaker 8: and some of those you've mentioned, and some of. 446 00:22:28,080 --> 00:22:30,240 Speaker 6: Those are but it's also it's not just tech stocks. 447 00:22:30,600 --> 00:22:33,359 Speaker 8: Some of the industrial space which are benefiting from some 448 00:22:33,440 --> 00:22:36,720 Speaker 8: of those heavy handed government programs, for example, some of 449 00:22:36,760 --> 00:22:40,560 Speaker 8: the consumer spaces having a bounce back at particularly consumer services. 450 00:22:41,040 --> 00:22:43,600 Speaker 8: And then of course these companies that are being efficient, 451 00:22:44,440 --> 00:22:47,080 Speaker 8: and that's really what's been working, and it's been so 452 00:22:47,119 --> 00:22:48,320 Speaker 8: in other words, the market's. 453 00:22:48,040 --> 00:22:51,080 Speaker 6: Been very good at identifying the winners. It's also been 454 00:22:51,160 --> 00:22:52,520 Speaker 6: very good at identifying the losers. 455 00:22:52,800 --> 00:22:55,960 Speaker 5: Well, I mean, you mentioned efficiency, and you mentioned operational efficiency, 456 00:22:56,000 --> 00:22:57,200 Speaker 5: and for me, I need you to drill down a 457 00:22:57,200 --> 00:22:59,600 Speaker 5: little bit more. You know what you know, what indicators 458 00:22:59,600 --> 00:23:00,240 Speaker 5: are you looking for? 459 00:23:00,280 --> 00:23:00,359 Speaker 6: It? 460 00:23:00,400 --> 00:23:02,720 Speaker 5: We strictly talking operating margins here. I mean, how do 461 00:23:02,760 --> 00:23:05,080 Speaker 5: you evaluate you know, those sectors you're referring to, like 462 00:23:05,119 --> 00:23:06,520 Speaker 5: which sectors. 463 00:23:06,440 --> 00:23:07,320 Speaker 1: Are prime to perform? 464 00:23:07,359 --> 00:23:10,480 Speaker 5: Well, given you know that focus on high quality growth, 465 00:23:10,480 --> 00:23:14,160 Speaker 5: on operational efficiency, on the narrowing of that big divide 466 00:23:14,160 --> 00:23:15,520 Speaker 5: between the haves and have nots. 467 00:23:16,480 --> 00:23:19,719 Speaker 8: Yeah, it's not really it's not really by sector, dam man. 468 00:23:19,800 --> 00:23:23,159 Speaker 8: It's more by a company. It's really company specific and 469 00:23:23,200 --> 00:23:26,960 Speaker 8: we and we've talked about that, meaning within sectors, there 470 00:23:27,000 --> 00:23:29,600 Speaker 8: are companies that are being more efficient than they're say, 471 00:23:29,600 --> 00:23:32,520 Speaker 8: they're competitors, and we're seeing it so that once again, 472 00:23:32,680 --> 00:23:34,800 Speaker 8: it is as you say, the haves and have nots. 473 00:23:35,359 --> 00:23:37,520 Speaker 8: So I don't think I don't think it's a sector call. 474 00:23:37,640 --> 00:23:41,199 Speaker 8: It's a company call. It's a very stock specific call. 475 00:23:41,240 --> 00:23:43,640 Speaker 8: So that's that's actually a really good environment for active 476 00:23:43,640 --> 00:23:45,679 Speaker 8: managers who can take advantage of that. 477 00:23:45,840 --> 00:23:48,760 Speaker 6: So we're seeing we're seeing it across multiple industries. It's 478 00:23:48,800 --> 00:23:49,600 Speaker 6: not just one or two. 479 00:23:49,720 --> 00:23:52,040 Speaker 5: So the MIC is the key identifying those companies that 480 00:23:52,080 --> 00:23:55,440 Speaker 5: are going to improve their operational efficiency or selecting those 481 00:23:55,440 --> 00:23:58,440 Speaker 5: companies that have an advantage over their peers. 482 00:23:58,880 --> 00:24:01,680 Speaker 8: It's both and one of the advantages it's just sheer size, 483 00:24:02,400 --> 00:24:05,560 Speaker 8: having scale, having the ability to kind of manage your 484 00:24:05,600 --> 00:24:09,719 Speaker 8: cost structure, being efficient with your labor and hiring, and 485 00:24:09,720 --> 00:24:13,400 Speaker 8: that's a that's a pure scale argument. Then, of course, 486 00:24:13,440 --> 00:24:17,199 Speaker 8: there are companies who are using various technologies, not just 487 00:24:17,280 --> 00:24:20,320 Speaker 8: AI to make their existing businesses more efficient. 488 00:24:20,320 --> 00:24:21,280 Speaker 6: There are some you. 489 00:24:21,200 --> 00:24:24,600 Speaker 8: Know, what we've discovered is within AI, ironically, the companies 490 00:24:24,600 --> 00:24:27,040 Speaker 8: that are actually being the most efficient are tech companies. 491 00:24:27,080 --> 00:24:29,680 Speaker 8: They're the ones who are actually able to reduce labor 492 00:24:29,680 --> 00:24:32,719 Speaker 8: and headcamp, particularly encoding. That's one area where it's been 493 00:24:32,720 --> 00:24:36,359 Speaker 8: extremely efficient, back office, et cetera. So in many ways 494 00:24:36,440 --> 00:24:40,600 Speaker 8: AI is helping to keep the labor market a little bit. 495 00:24:40,520 --> 00:24:43,320 Speaker 5: Soft, mister Wilson. Sarah, Well, let's talk about your note 496 00:24:43,320 --> 00:24:46,760 Speaker 5: from yesterday. Multiple expansion kind of accounting for most of 497 00:24:46,800 --> 00:24:50,000 Speaker 5: the move we've seen here inequities. But then you cite 498 00:24:50,040 --> 00:24:52,359 Speaker 5: your colleague Andrew Sheets, and this is where what I love. 499 00:24:52,400 --> 00:24:53,879 Speaker 5: I want to talk about M and A volumes. I 500 00:24:53,880 --> 00:24:56,440 Speaker 5: want to talk about thirty five billion of IG issue 501 00:24:56,560 --> 00:24:59,280 Speaker 5: is expected this week after three weeks straight of fifty billion. 502 00:24:59,600 --> 00:25:02,359 Speaker 5: Talk to about which sectors are witnessing M and A 503 00:25:02,359 --> 00:25:03,359 Speaker 5: activity and why. 504 00:25:05,520 --> 00:25:08,119 Speaker 6: Yeah, I mean, the conditions are there for M and A. 505 00:25:08,200 --> 00:25:10,639 Speaker 8: I would say the headwinds are that the cost of 506 00:25:10,680 --> 00:25:13,160 Speaker 8: capital is still pretty high. We haven't seen any rate 507 00:25:13,240 --> 00:25:15,600 Speaker 8: cuts yet. And then even though we're seeing issue events 508 00:25:16,119 --> 00:25:18,520 Speaker 8: at the IG level, that's that's pretty robust. A lot 509 00:25:18,520 --> 00:25:22,240 Speaker 8: of that's for refinancing and also for you know, for 510 00:25:22,320 --> 00:25:25,080 Speaker 8: existing deals that are in the market. The other constraint, 511 00:25:25,080 --> 00:25:27,480 Speaker 8: of course, is that we just had a big increase 512 00:25:27,480 --> 00:25:30,720 Speaker 8: in valuations. I would say, you know, last fall was 513 00:25:30,720 --> 00:25:33,240 Speaker 8: getting closer to a point where the buyers and sellers 514 00:25:33,240 --> 00:25:35,840 Speaker 8: were getting to a point where maybe the price was right, 515 00:25:36,720 --> 00:25:39,840 Speaker 8: and now, of course those prices have elevated again. 516 00:25:39,600 --> 00:25:41,520 Speaker 6: And we have stars in the eyes of some of 517 00:25:41,560 --> 00:25:42,120 Speaker 6: the sellers. 518 00:25:42,119 --> 00:25:43,879 Speaker 8: So I think this is going to be once again 519 00:25:44,400 --> 00:25:47,960 Speaker 8: the story for twenty twenty five twenty six as we 520 00:25:48,040 --> 00:25:50,400 Speaker 8: kind of settle into whatever that, you know, the new 521 00:25:50,680 --> 00:25:54,320 Speaker 8: new administration, where the existing administration stays in power. I 522 00:25:54,320 --> 00:25:56,320 Speaker 8: think those are also wild cards for M and A. 523 00:25:56,880 --> 00:26:00,440 Speaker 8: So the conditions are there. We're not seeing a ton 524 00:26:00,480 --> 00:26:03,159 Speaker 8: of activity right now. We're hopeful that will pick up 525 00:26:03,200 --> 00:26:04,920 Speaker 8: later this year into twenty twenty five. 526 00:26:05,000 --> 00:26:08,120 Speaker 5: So I just want to recap here. Valuations are relatively rich, 527 00:26:08,640 --> 00:26:12,360 Speaker 5: interest rates are relatively high, and yet volumes and activity 528 00:26:12,400 --> 00:26:14,359 Speaker 5: you're picking up. Go figure, I wonder what's going on 529 00:26:14,400 --> 00:26:15,879 Speaker 5: in the corporates week. But let's go back to a 530 00:26:15,920 --> 00:26:18,439 Speaker 5: little bit of what you mentioned before operational efficiency. So 531 00:26:18,840 --> 00:26:21,439 Speaker 5: in this environment, you know, in an environment where yeah, okay, 532 00:26:21,520 --> 00:26:23,800 Speaker 5: you know, cost the capital is relatively high and valuations 533 00:26:23,840 --> 00:26:27,000 Speaker 5: are rich, what should companies be doing to improve their 534 00:26:27,040 --> 00:26:28,960 Speaker 5: operating and their profit margins here? 535 00:26:30,480 --> 00:26:32,760 Speaker 6: Well, obviously if you have some top line, that solves 536 00:26:32,760 --> 00:26:33,480 Speaker 6: a lot of problems. 537 00:26:33,480 --> 00:26:34,879 Speaker 8: So I think a lot of you know, companies are 538 00:26:34,880 --> 00:26:37,080 Speaker 8: trying to figure out what the next product cycle is, 539 00:26:37,160 --> 00:26:39,080 Speaker 8: you know, how can they be different than their than 540 00:26:39,080 --> 00:26:41,680 Speaker 8: their competitors and drive top line growth. 541 00:26:41,720 --> 00:26:44,040 Speaker 6: I mean, that solves all of your That solves many 542 00:26:44,040 --> 00:26:44,679 Speaker 6: of your problems. 543 00:26:44,760 --> 00:26:47,080 Speaker 8: Look, I think what corporate America is very good at, 544 00:26:47,480 --> 00:26:50,840 Speaker 8: it has been very good effort for decades is cost cutting. Okay, 545 00:26:50,880 --> 00:26:54,200 Speaker 8: we're world class in cost cutting. And I think they've 546 00:26:54,200 --> 00:26:57,440 Speaker 8: done that. I mean, most companies have cut costs. They 547 00:26:57,440 --> 00:26:59,600 Speaker 8: have kind of whittled things down to the bone. And 548 00:26:59,760 --> 00:27:02,560 Speaker 8: what's interesting is in the last six months if you 549 00:27:02,640 --> 00:27:04,960 Speaker 8: go back to the fall of last year, right so October, 550 00:27:05,040 --> 00:27:07,919 Speaker 8: and this is something that doesn't get discussed, and at 551 00:27:07,960 --> 00:27:10,240 Speaker 8: the end of October, it looked like we were sort 552 00:27:10,240 --> 00:27:13,960 Speaker 8: of careening towards the wall, right, I mean, stocks were 553 00:27:14,560 --> 00:27:18,119 Speaker 8: basically making new lows. Companies were starting to talk about 554 00:27:18,280 --> 00:27:20,720 Speaker 8: maybe a layoff cycle they were going to have to 555 00:27:20,720 --> 00:27:23,280 Speaker 8: do that. And then of course came in this big 556 00:27:23,320 --> 00:27:25,480 Speaker 8: short squeeze at the back end of the treasury market. 557 00:27:25,480 --> 00:27:27,399 Speaker 6: And then the fan aquiesced and said, hey, we may 558 00:27:27,400 --> 00:27:28,640 Speaker 6: be cutting race next year. 559 00:27:28,680 --> 00:27:31,720 Speaker 8: And that provided the hope that raids are going to 560 00:27:31,760 --> 00:27:33,200 Speaker 8: come down, and so we bought time. 561 00:27:33,920 --> 00:27:35,360 Speaker 6: And what we're seeing now. 562 00:27:35,640 --> 00:27:38,720 Speaker 8: Is this big hockey stick and expectations for the second 563 00:27:38,720 --> 00:27:41,320 Speaker 8: half of this year. Okay, there's a big if you 564 00:27:41,400 --> 00:27:43,600 Speaker 8: talk to most companies and listen to most companies what 565 00:27:43,600 --> 00:27:46,359 Speaker 8: they're saying. Yeah, first quarter still things are kind of 566 00:27:46,359 --> 00:27:48,680 Speaker 8: squishy maybe the first half, but the second half things 567 00:27:48,720 --> 00:27:49,080 Speaker 8: are going to. 568 00:27:49,119 --> 00:27:51,880 Speaker 6: Really pick up. And that may happen. But I'll say 569 00:27:51,960 --> 00:27:54,080 Speaker 6: right now, if it doesn't happen, then we're going to 570 00:27:54,119 --> 00:27:56,800 Speaker 6: see more cost punning in the summer. And that's probably why. 571 00:27:57,400 --> 00:27:59,119 Speaker 6: You know, the risk of a hard. 572 00:27:59,040 --> 00:28:01,520 Speaker 8: Landing is still up exterminated, right, you still have a 573 00:28:01,520 --> 00:28:03,480 Speaker 8: thirty percent chance that there's going to be a laugh 574 00:28:03,560 --> 00:28:06,120 Speaker 8: cycle if business doesn't pick up in the second half. 575 00:28:05,920 --> 00:28:06,280 Speaker 3: Of the year. 576 00:28:06,640 --> 00:28:08,800 Speaker 2: What I want to talk about now, folks, Daman helped 577 00:28:08,840 --> 00:28:13,320 Speaker 2: me out here, Mike Wilson, the Vogue Now and Margan Stanley. 578 00:28:13,359 --> 00:28:15,600 Speaker 2: I assume it's not doing this is the two x 579 00:28:15,680 --> 00:28:19,560 Speaker 2: Mike Wilson fun, the three X Mike Wilson fun, the 580 00:28:19,600 --> 00:28:24,639 Speaker 2: four x Mike Wilson fun. Mike Wilson on the benefit 581 00:28:25,000 --> 00:28:28,920 Speaker 2: but the tragedy of leverage. We're at that giddy season. 582 00:28:29,240 --> 00:28:31,240 Speaker 2: How does this work out, Mike Wilson, how does it 583 00:28:31,280 --> 00:28:31,760 Speaker 2: play out? 584 00:28:33,680 --> 00:28:35,560 Speaker 6: Well, I mean, you're talking about the benefit of leverage 585 00:28:35,600 --> 00:28:36,720 Speaker 6: and investing or in the. 586 00:28:36,680 --> 00:28:40,760 Speaker 2: Econmy I would say in investing right now, we're seeing 587 00:28:40,760 --> 00:28:44,080 Speaker 2: we're inundated here at Bloomberg, surveillans every day with the 588 00:28:44,160 --> 00:28:47,959 Speaker 2: two x, this ETF, three x, even four x. 589 00:28:48,200 --> 00:28:49,239 Speaker 3: All my raidars up. 590 00:28:49,280 --> 00:28:53,360 Speaker 8: Mike Wilson, Well, that's just the greed versus fear dynamic. 591 00:28:53,480 --> 00:28:55,320 Speaker 8: I mean, I think you know, obviously last fall we 592 00:28:55,400 --> 00:28:57,080 Speaker 8: hit a lot of fear priced in, and now we 593 00:28:57,120 --> 00:28:59,520 Speaker 8: have a lot of greed priced in, so we are 594 00:28:59,560 --> 00:29:03,000 Speaker 8: seeing speculative activity pick up in a meaningful way. I 595 00:29:03,000 --> 00:29:06,000 Speaker 8: would say the daily expiration options market is probably your 596 00:29:06,040 --> 00:29:08,640 Speaker 8: single best example of that. We have a lot of 597 00:29:08,640 --> 00:29:10,960 Speaker 8: people sort of you know, in the stock market is 598 00:29:11,040 --> 00:29:14,560 Speaker 8: like prop bets almost like draftings and things like that. 599 00:29:14,560 --> 00:29:18,520 Speaker 8: That that to me is you know, signs that exuberances 600 00:29:18,720 --> 00:29:19,280 Speaker 8: is pretty high. 601 00:29:19,360 --> 00:29:21,200 Speaker 6: Now that doesn't have to end in tiers. 602 00:29:21,480 --> 00:29:24,760 Speaker 8: Okay, leverage isn't always bad, but you know, we have 603 00:29:24,800 --> 00:29:28,760 Speaker 8: a situation where people are reaching for risk because you know, 604 00:29:28,840 --> 00:29:31,840 Speaker 8: there's poem, Yeah, and you know that's that's where the 605 00:29:31,880 --> 00:29:34,400 Speaker 8: pendulum is right now, Tom and and that's why we're 606 00:29:34,440 --> 00:29:36,640 Speaker 8: probably a little bit more cautious in some of our peers. 607 00:29:36,640 --> 00:29:38,760 Speaker 6: You know, I think a lot of folks all they've done. 608 00:29:38,600 --> 00:29:41,360 Speaker 8: Is raise their price targets based on higher multiples, and 609 00:29:41,440 --> 00:29:43,800 Speaker 8: we're not willing to do that because we don't see 610 00:29:43,800 --> 00:29:44,280 Speaker 8: the condition. 611 00:29:44,400 --> 00:29:46,760 Speaker 6: We don't see the justification for higher multiples. 612 00:29:47,120 --> 00:29:49,960 Speaker 8: Given that we have basically no earnings growth across the 613 00:29:50,000 --> 00:29:52,680 Speaker 8: broader economy, a situation is still kind of a difficult 614 00:29:52,680 --> 00:29:55,000 Speaker 8: operating environment, and so we're going to be very selective. 615 00:29:55,040 --> 00:29:56,760 Speaker 8: And that's why we think it's you know, you got 616 00:29:56,840 --> 00:29:58,200 Speaker 8: to be got to be a stock picker here. You 617 00:29:58,200 --> 00:29:59,320 Speaker 8: can't just buy the index. 618 00:29:59,480 --> 00:30:02,000 Speaker 5: Well, I mean, Michael, you're hitting right on the point here. 619 00:30:02,000 --> 00:30:04,080 Speaker 5: I mean, look, volatility has come off a bit here, 620 00:30:04,080 --> 00:30:06,040 Speaker 5: but it just doesn't feel that way, right, And I 621 00:30:06,040 --> 00:30:08,080 Speaker 5: think that goes down to the type of investor you are. 622 00:30:08,160 --> 00:30:09,320 Speaker 5: You know, I wonder if you could talk to our 623 00:30:09,360 --> 00:30:11,880 Speaker 5: audience a little bit about you know, those traders who 624 00:30:11,880 --> 00:30:13,800 Speaker 5: are in the market who look at volatility on a 625 00:30:13,840 --> 00:30:16,840 Speaker 5: day over day basis, right delta hedgers for example, guys 626 00:30:16,840 --> 00:30:19,719 Speaker 5: who have to deal with real volatility, and those who 627 00:30:19,760 --> 00:30:22,120 Speaker 5: are more longer term, let's call it carry investors. 628 00:30:22,120 --> 00:30:23,760 Speaker 1: I'm a fixed income guy, by the way, so. 629 00:30:23,720 --> 00:30:25,920 Speaker 5: They're looking at volatility on a month over month basis, 630 00:30:25,920 --> 00:30:29,600 Speaker 5: and from that metric, vall looks, yes, relatively low. Right, 631 00:30:29,640 --> 00:30:32,400 Speaker 5: So talk to us a little bit about those divergent investments. 632 00:30:32,800 --> 00:30:36,680 Speaker 5: I guess theses, those those those those investors who have 633 00:30:36,720 --> 00:30:39,479 Speaker 5: to look at you know, option markets involve and leverage 634 00:30:39,520 --> 00:30:40,600 Speaker 5: and assess it for what it is. 635 00:30:40,840 --> 00:30:42,280 Speaker 1: It means different things to different people. 636 00:30:43,600 --> 00:30:45,360 Speaker 8: Well, I think I characterize it maybe a little bit 637 00:30:45,360 --> 00:30:47,960 Speaker 8: differently and just say that index level ball is very low, 638 00:30:48,440 --> 00:30:50,560 Speaker 8: but single stock ball is still quite high. 639 00:30:50,640 --> 00:30:50,760 Speaker 4: Right. 640 00:30:50,800 --> 00:30:53,240 Speaker 6: We have a high dispersion within the. 641 00:30:53,160 --> 00:30:58,200 Speaker 8: Equity market, right, single stocks volatility, sector volatility, even RBS. 642 00:30:58,320 --> 00:31:00,440 Speaker 8: But then that the index level has been very compressed, 643 00:31:00,440 --> 00:31:02,160 Speaker 8: and one of the factors, one of the reasons for 644 00:31:02,200 --> 00:31:03,920 Speaker 8: that is that there are a lot of new products 645 00:31:03,920 --> 00:31:07,960 Speaker 8: out there that are fall selling strategies. Okay, and over time, 646 00:31:08,480 --> 00:31:11,640 Speaker 8: I would agree that selling ball is always better than 647 00:31:11,680 --> 00:31:14,760 Speaker 8: buying ball, Okay, Like that's just a better strategy, and 648 00:31:15,200 --> 00:31:17,600 Speaker 8: you know, these products are kind of keying off of that. 649 00:31:17,640 --> 00:31:19,880 Speaker 8: So there's there's been a tremendous amount of downward pressure 650 00:31:19,960 --> 00:31:24,320 Speaker 8: on volatility because of these ball selling strategies. And I think, 651 00:31:24,560 --> 00:31:25,920 Speaker 8: you know, that's a bit of an illusion. 652 00:31:26,160 --> 00:31:29,000 Speaker 6: Okay, right, there is plenty. There's plenty of opportunity within 653 00:31:29,080 --> 00:31:30,959 Speaker 6: the market from a volatility. 654 00:31:30,400 --> 00:31:33,280 Speaker 8: Standpoint, but once again, it's at the single stock level, 655 00:31:33,600 --> 00:31:34,600 Speaker 8: not the index level. 656 00:31:34,680 --> 00:31:36,720 Speaker 2: Mike Wilson's generously you to be with us for a 657 00:31:36,760 --> 00:31:39,480 Speaker 2: half hour. You will be out on single best idea 658 00:31:39,560 --> 00:31:40,720 Speaker 2: our new podcast here. 659 00:31:40,760 --> 00:31:41,120 Speaker 3: We'll do that. 660 00:31:41,160 --> 00:31:45,800 Speaker 2: You'll see that later this afternoon in the digital mix 661 00:31:45,880 --> 00:31:49,160 Speaker 2: and Processing here at Bloomberg Podcast. 662 00:31:49,280 --> 00:31:51,400 Speaker 3: Mike Wilson is with Morgan. 663 00:31:51,200 --> 00:32:05,560 Speaker 9: Stanley, your daily roundup in English the front pages around 664 00:32:05,560 --> 00:32:07,200 Speaker 9: the world, brought to you by Lisa Manteo. 665 00:32:07,440 --> 00:32:09,520 Speaker 10: All right, well, starting with Walmart, they want to teach 666 00:32:09,560 --> 00:32:13,360 Speaker 10: their store managers about compassions. This was in the New 667 00:32:13,440 --> 00:32:13,960 Speaker 10: York Times. 668 00:32:14,040 --> 00:32:14,360 Speaker 1: Okay. 669 00:32:14,600 --> 00:32:16,920 Speaker 10: Every year they bring together their store managers at the 670 00:32:16,920 --> 00:32:19,760 Speaker 10: headquarters to talk about how to relate to workers. The 671 00:32:19,840 --> 00:32:22,880 Speaker 10: problems that the workers say the company's business practices have 672 00:32:23,000 --> 00:32:26,240 Speaker 10: not been the best. They complain about physical, mental, emotional health. 673 00:32:26,680 --> 00:32:28,920 Speaker 10: So Walmart wants to change that. So they bring all 674 00:32:28,960 --> 00:32:31,360 Speaker 10: these managers down. So the New York Times got inside 675 00:32:31,720 --> 00:32:34,600 Speaker 10: to this this meeting. But I mean you've heard about it. 676 00:32:34,640 --> 00:32:41,080 Speaker 10: Walmart like sweetening the deal right, increasing, Yes, they're increasing rates, 677 00:32:42,360 --> 00:32:42,880 Speaker 10: but it's the. 678 00:32:42,880 --> 00:32:47,320 Speaker 5: Feeling, team building feelings. Yes, I like team building exercises. 679 00:32:48,480 --> 00:32:50,560 Speaker 5: When I started in this business, Leaman Brothers, I was 680 00:32:50,560 --> 00:32:52,600 Speaker 5: an associate there. They had a team building exercise. We 681 00:32:52,640 --> 00:32:55,240 Speaker 5: went away to some junket. It was amazing. They took 682 00:32:55,280 --> 00:32:57,000 Speaker 5: me to carried me. They put me through a hoop. 683 00:32:57,080 --> 00:32:57,840 Speaker 5: It was unbeateable. 684 00:32:57,840 --> 00:33:00,000 Speaker 1: You had to see. It's about solving problems. 685 00:33:00,600 --> 00:33:01,760 Speaker 10: We need a team building. 686 00:33:05,040 --> 00:33:06,720 Speaker 3: You know, it's called okay. 687 00:33:07,120 --> 00:33:09,080 Speaker 2: You got twenty five people at Walmart who are the 688 00:33:09,160 --> 00:33:10,320 Speaker 2: top three performers. 689 00:33:10,480 --> 00:33:11,560 Speaker 3: Lift the compensation. 690 00:33:12,040 --> 00:33:14,560 Speaker 1: Next there you go, h okay. 691 00:33:14,600 --> 00:33:18,520 Speaker 10: More couples are embracing dink dual income, no kids, so 692 00:33:18,520 --> 00:33:23,560 Speaker 10: they're start craze about the social media TikTok, Instagram. They're 693 00:33:23,600 --> 00:33:27,720 Speaker 10: posting all about it, and it's morphed beyond just dink. 694 00:33:27,560 --> 00:33:28,120 Speaker 7: D I n K. 695 00:33:28,240 --> 00:33:32,600 Speaker 10: It's gone to dink wads, which is dinks with a dog, sinks, 696 00:33:32,800 --> 00:33:35,440 Speaker 10: single income no kids dinks. 697 00:33:35,680 --> 00:33:35,880 Speaker 6: Uh. 698 00:33:35,920 --> 00:33:40,280 Speaker 10: They also called dino dual income no offspring. There's all 699 00:33:40,320 --> 00:33:43,840 Speaker 10: these like acronyms. But here's the thing. It's generating some 700 00:33:43,960 --> 00:33:47,360 Speaker 10: backlash from parents who are saying, you know, I understand 701 00:33:47,360 --> 00:33:49,360 Speaker 10: what you're saying. How you know, you you have a 702 00:33:49,360 --> 00:33:51,920 Speaker 10: lot of freedom, time and money, but you know we 703 00:33:52,040 --> 00:33:54,479 Speaker 10: have the families and we have all the love behind it. 704 00:33:54,600 --> 00:33:55,680 Speaker 1: So it's back and forth. 705 00:33:55,760 --> 00:33:58,160 Speaker 2: The thing is in the studio here, the interactive broker 706 00:33:58,280 --> 00:34:03,600 Speaker 2: studio folks is got signal income, three tuitions, two dogs. 707 00:34:04,800 --> 00:34:06,800 Speaker 5: I was a big fan of childless couples back in 708 00:34:06,840 --> 00:34:08,520 Speaker 5: two thousand and one when I was married. My wife, 709 00:34:08,520 --> 00:34:10,560 Speaker 5: on the other hand, had a different idea, and so 710 00:34:10,760 --> 00:34:12,640 Speaker 5: here I am. And I guess I've missed my window 711 00:34:13,160 --> 00:34:13,759 Speaker 5: to be a dink. 712 00:34:14,000 --> 00:34:15,920 Speaker 10: I have to say I was kind of long. 713 00:34:15,960 --> 00:34:18,120 Speaker 3: The same time, I will say. 714 00:34:17,920 --> 00:34:21,279 Speaker 2: That out of COVID, within this whole social debate, and 715 00:34:21,560 --> 00:34:23,200 Speaker 2: I don't want to fire. I mean, we just lost 716 00:34:23,239 --> 00:34:27,160 Speaker 2: four hundred people on YouTube live chat. But I just 717 00:34:27,200 --> 00:34:31,000 Speaker 2: would suggest out of COVID, we've learned that we need 718 00:34:31,200 --> 00:34:35,520 Speaker 2: some form of childcare revolution in America. Oh yes, and 719 00:34:35,560 --> 00:34:39,799 Speaker 2: we need some form of policy where well meaning twenty 720 00:34:39,920 --> 00:34:41,919 Speaker 2: year olds of thirty year old's going. I could never 721 00:34:42,080 --> 00:34:46,960 Speaker 2: afford the life of Damien Sasa that's happening daily. His 722 00:34:47,200 --> 00:34:50,600 Speaker 2: textbook bill in Miami. How much was the text bills? 723 00:34:50,760 --> 00:34:52,120 Speaker 5: We're not going to talk about We're not going to 724 00:34:52,160 --> 00:34:55,320 Speaker 5: talk about my son got a scholarship to University of 725 00:34:55,320 --> 00:34:57,319 Speaker 5: Miami's great students, so kind of you know. 726 00:34:57,320 --> 00:35:00,320 Speaker 3: How much were that books? The first semester online? 727 00:35:00,320 --> 00:35:04,080 Speaker 1: Tom, It's online, okay, but still just textbooks. 728 00:35:04,080 --> 00:35:06,800 Speaker 5: I'm worried about ubers. I'm worried about you know, I 729 00:35:06,840 --> 00:35:08,840 Speaker 5: mean God in Miami, which kills you. 730 00:35:08,920 --> 00:35:10,480 Speaker 2: And the other thing is that go the year abroad 731 00:35:10,480 --> 00:35:12,400 Speaker 2: and they go Can I go to Florence this weekend? 732 00:35:13,760 --> 00:35:16,080 Speaker 3: You know, I mean there's that next Can. 733 00:35:15,920 --> 00:35:16,600 Speaker 2: You adopt me? 734 00:35:17,960 --> 00:35:18,360 Speaker 3: Okay? 735 00:35:18,560 --> 00:35:21,000 Speaker 10: We're going to the Financial Times right now. They're talking 736 00:35:21,000 --> 00:35:24,959 Speaker 10: about the UK Competition Watchdog. They're launching an inquiry into 737 00:35:25,160 --> 00:35:28,640 Speaker 10: veterinary markets. They're saying that pet owners could be overpaying 738 00:35:28,640 --> 00:35:31,200 Speaker 10: for medicines and prescriptions. I mean you've said that a 739 00:35:31,280 --> 00:35:34,000 Speaker 10: number of times here, Tom, about how the high cost 740 00:35:34,080 --> 00:35:36,120 Speaker 10: of pet you know, taking care of your pet. 741 00:35:36,120 --> 00:35:38,040 Speaker 3: Weather on the phone the other day. Yeah, I mean, 742 00:35:38,160 --> 00:35:38,799 Speaker 3: I've got it. 743 00:35:38,840 --> 00:35:41,359 Speaker 2: I'm going away and you know, kennel feet will only 744 00:35:41,400 --> 00:35:44,120 Speaker 2: stay at the best That's why there is to it. 745 00:35:44,840 --> 00:35:48,120 Speaker 2: The vet bill coming back from a five day soiree 746 00:35:48,600 --> 00:35:51,560 Speaker 2: is more than the hotel in parents. It's great And 747 00:35:51,600 --> 00:35:54,000 Speaker 2: what's great about my vet is you make It's called 748 00:35:54,040 --> 00:35:57,319 Speaker 2: the Horaceman School of Vet Dairy Medicine. I just make 749 00:35:57,360 --> 00:35:58,799 Speaker 2: the check right out the horace man. 750 00:35:58,880 --> 00:36:01,480 Speaker 5: My wife to wait, take're I have my snoop, my 751 00:36:01,960 --> 00:36:03,520 Speaker 5: mini Golden Dude, and my wife doesn't let me take 752 00:36:03,600 --> 00:36:05,600 Speaker 5: them to the vet anymore, her to the vet anymore 753 00:36:05,640 --> 00:36:07,680 Speaker 5: because the last time I did that it cost us 754 00:36:07,719 --> 00:36:10,239 Speaker 5: a lot of money because the veterinarian told us she 755 00:36:10,280 --> 00:36:12,080 Speaker 5: may have a little heart murmur. You know, it's like, oh, 756 00:36:12,120 --> 00:36:15,040 Speaker 5: let's get that taken care of and tested some thousands 757 00:36:15,080 --> 00:36:15,879 Speaker 5: of dollars later. 758 00:36:16,480 --> 00:36:19,480 Speaker 1: I mean, you go, figures it's something. It's really something. 759 00:36:19,640 --> 00:36:21,520 Speaker 1: I don't it's you know, the dogs, just like I 760 00:36:21,560 --> 00:36:24,680 Speaker 1: love no dog, No dogs for me, all right. 761 00:36:24,719 --> 00:36:26,759 Speaker 10: Finally, Airbnb, have you ever been to one? I know 762 00:36:26,800 --> 00:36:29,440 Speaker 10: I've been to one where they have the security cameras 763 00:36:29,440 --> 00:36:32,319 Speaker 10: in there and there's instructions for you as to how 764 00:36:32,360 --> 00:36:34,200 Speaker 10: to turn it off and then how to turn it 765 00:36:34,239 --> 00:36:37,399 Speaker 10: back on when you leave. Well, Airbnb, they're just saying 766 00:36:37,440 --> 00:36:40,080 Speaker 10: that's enough. They're banning the use of all those security cameras. 767 00:36:40,080 --> 00:36:42,840 Speaker 10: It starts April thirtieth, So this change on their on 768 00:36:42,880 --> 00:36:46,120 Speaker 10: their policy and account holds. They could be removed if 769 00:36:46,120 --> 00:36:48,040 Speaker 10: they don't comply with it, so they can be taken off. 770 00:36:48,040 --> 00:36:48,640 Speaker 7: But there are a. 771 00:36:48,560 --> 00:36:51,279 Speaker 10: Few things that still are allowed. Hosts they're still able 772 00:36:51,280 --> 00:36:53,880 Speaker 10: to use, like the doorbell cameras, they can still use those, 773 00:36:54,120 --> 00:36:59,160 Speaker 10: and they can use noise decipel monitors, which I've actually encountered. 774 00:37:00,520 --> 00:37:01,920 Speaker 3: Is the airbnbs, Yeah. 775 00:37:01,760 --> 00:37:02,719 Speaker 1: But I believe it is. 776 00:37:02,840 --> 00:37:03,040 Speaker 7: Yes. 777 00:37:03,280 --> 00:37:04,759 Speaker 5: My question for you, Lisa's how are they going to 778 00:37:04,840 --> 00:37:06,720 Speaker 5: enforce this? You know, I mean, who's going to snop 779 00:37:06,760 --> 00:37:08,759 Speaker 5: somebody in their own home from putting a camera in 780 00:37:08,800 --> 00:37:09,280 Speaker 5: the bathroom? 781 00:37:09,400 --> 00:37:10,680 Speaker 1: You know, Well, so let's do it. 782 00:37:10,640 --> 00:37:13,160 Speaker 10: So people who visit, they'll complain, they'll write into AIRBNBA 783 00:37:13,239 --> 00:37:13,680 Speaker 10: cameras so. 784 00:37:13,680 --> 00:37:15,640 Speaker 1: They didn't see the camera in my bathroom. I'm sorry, 785 00:37:15,800 --> 00:37:17,000 Speaker 1: no bathrooms. 786 00:37:19,080 --> 00:37:19,480 Speaker 3: Thank you. 787 00:37:19,840 --> 00:37:24,239 Speaker 2: Yes, the newspapers with Lisa Matteos, Thank you, Lisa anytime. 788 00:37:24,400 --> 00:37:27,600 Speaker 2: This is the Bloomberg Saveillance Podcast, bringing you the best 789 00:37:27,600 --> 00:37:32,400 Speaker 2: in economics, finance, investment, and international relations. You can also 790 00:37:32,480 --> 00:37:36,520 Speaker 2: watch the show live on YouTube. Visit the Bloomberg Podcast 791 00:37:36,640 --> 00:37:40,680 Speaker 2: channel on YouTube to see the show weekday mornings from 792 00:37:40,719 --> 00:37:43,960 Speaker 2: seven to ten am Eastern from our global headquarters in 793 00:37:44,040 --> 00:37:47,759 Speaker 2: New York, City, Subscribe to the podcast on Apple, Spotify 794 00:37:48,080 --> 00:37:51,640 Speaker 2: or anywhere else you listen, and always on Bloomberg Radio, 795 00:37:51,840 --> 00:37:55,000 Speaker 2: the Bloomberg Terminal, and the Bloomberg Business app.