WEBVTT - Single Best Idea with Tom Keene: David Malpass & Amanda Lynam

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio news.

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<v Speaker 2>Single best idea. It was a really wonderful day. I

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<v Speaker 2>didn't realize it was Wednesday until two thirds of the way.

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<v Speaker 2>So the show is one of those summer work days

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<v Speaker 2>where we just had, like whatever, We had ten twelve,

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<v Speaker 2>fourteen wonderful conversations. All of them avail you, and it's

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<v Speaker 2>really hard to pick two out here. We went with

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<v Speaker 2>David Malpass, controversial, some really heated opinion there with his

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<v Speaker 2>Republican politics, serving with President Trump as former head of

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<v Speaker 2>the World Bank. An eclectic discussion with David Malpass, and

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<v Speaker 2>the major idea with David Malpass was the idea of

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<v Speaker 2>the new globalization. He harkened back to Germany.

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<v Speaker 3>Globalization means getting parts from other countries in an efficient way,

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<v Speaker 3>So that made sense in areas. But then was it

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<v Speaker 3>sensible for Germany to get its energy from Russia? No,

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<v Speaker 3>from the Soviet communist Soviet Union and they cut sweet

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<v Speaker 3>ardeals to do it. That was a mistake. Same with China,

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<v Speaker 3>that we just went too far and had no knowledge

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<v Speaker 3>of what we were doing in terms of the dependence.

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<v Speaker 3>So I think as we you know, people use words,

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<v Speaker 3>so globalization is this word that we think we know

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<v Speaker 3>what it means. But I think we will stay in

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<v Speaker 3>a market based global economy where you can outsource, but

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<v Speaker 3>a lot of it is going to be made in

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<v Speaker 3>the United States.

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<v Speaker 2>David MOUNTPESSI dodge the conversation on Chairman Powell in the

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<v Speaker 2>future for the chair and also of course what mister

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<v Speaker 2>Trump may do about fed independence booth. Thank him for

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<v Speaker 2>coming in today. Amanda Linam made us start strowing. She's

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<v Speaker 2>a black rock, amand Alnum. Here on the spread market,

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<v Speaker 2>the difference in yield between full faith and credit government

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<v Speaker 2>and the comparative IG investment grade or a high yield piece.

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<v Speaker 4>I think, just to go back to your point time

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<v Speaker 4>on spreads, the tighter spreads just means a receptivity towards

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<v Speaker 4>credit risk, right, more comfort towards credit risk. That's how

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<v Speaker 4>we would think about it. Heading into earnings. One of

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<v Speaker 4>the key things that we're watching is this feedback loop

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<v Speaker 4>between corporate margins, the layoff rate, which is still low,

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<v Speaker 4>consumer spending, and overall economic activity. Right now, if you

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<v Speaker 4>can see this on the Bloomberg terminal, average EBITDUM margins

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<v Speaker 4>for IG are above twenty percent average EBITDUM margins for

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<v Speaker 4>high yield are above thirty percent. So what we're watching

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<v Speaker 4>is is there pressure on those margins because of higher

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<v Speaker 4>input costs for example, and do corporates flex that layoff

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<v Speaker 4>tool more aggressively. But going back to the earlier discussion, actually,

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<v Speaker 4>I think we've been pleasantly surprised that the multitude of

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<v Speaker 4>levers that corporates can flex here, and so what we're

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<v Speaker 4>really watching for is is there a middle ground between

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<v Speaker 4>how these corporates navigate this, whether that's vendor relationships, inventory purchases.

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<v Speaker 4>The list goes on to navigate these uncertainty Was.

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<v Speaker 2>There enough jargon there, Amandolin, I'm true pro. She really

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<v Speaker 2>stops meetings with a pro look at Blackrock. Let me

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<v Speaker 2>explain some of that. It's really important. Actually, EBITDA is

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<v Speaker 2>eb it t DA. I'm not going to go into

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<v Speaker 2>what the letters mean. All you got to know is

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<v Speaker 2>it's halfway down the income statement. You've got revenue coming in,

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<v Speaker 2>you take out this, you take out that above operating

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<v Speaker 2>income is this thing called EBITDA, which also pulls in

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<v Speaker 2>a little bit of the depreciation and amortization off the

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<v Speaker 2>balance sheet. So it's somewhat a huge debate within finance.

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<v Speaker 2>Should you believe in Ebada? People look at it as

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<v Speaker 2>a measure, and what Amandoline him is saying is they're

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<v Speaker 2>watching carefully the resilience of the margins, the percent of

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<v Speaker 2>sales of EBITDAC industry to industry, company to company. I

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<v Speaker 2>just think, like the YouTube podcast just blew up there.

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<v Speaker 2>I think her Apple podcast I should just stop too

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<v Speaker 2>much discussion of. But we're out on YouTube podcasts, Apple

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<v Speaker 2>and Spotify as well. It's single best idea