1
00:00:05,080 --> 00:00:09,200
Speaker 1: Welcome to the Bloomberg surveillance podcast. I'm Tom Keene, along

2
00:00:09,200 --> 00:00:13,039
Speaker 1: with Jonathan Ferrill and Lisa are Brawnowitz Jailey. We bring

3
00:00:13,119 --> 00:00:17,119
Speaker 1: you insight from the best and economics, finance, investment and

4
00:00:17,239 --> 00:00:23,320
Speaker 1: international relations. Find Bloomberg surveillance and apple podcast soundcloud, Bloomberg

5
00:00:23,360 --> 00:00:29,280
Speaker 1: Dot Com and, of course, on the Bloomberg terminal. Danny

6
00:00:29,320 --> 00:00:31,400
Speaker 1: Blash flag joins US right now. Danny, it's fantastic to

7
00:00:31,440 --> 00:00:34,159
Speaker 1: catch up and I think we should start there, at

8
00:00:34,200 --> 00:00:36,839
Speaker 1: the heart of these decisions. What do these decisions mean

9
00:00:36,960 --> 00:00:40,360
Speaker 1: for Everyday Brits, every day Americans, when city are basically

10
00:00:40,400 --> 00:00:42,400
Speaker 1: saying millions are going to end up unemployed? And the

11
00:00:42,479 --> 00:00:44,440
Speaker 1: question I've asked, and I think you're perfectly positioned to

12
00:00:44,479 --> 00:00:47,320
Speaker 1: try and answer it, is higher unemployment of price worth

13
00:00:47,360 --> 00:00:50,600
Speaker 1: paying to try and get inflation down? No? Well, we

14
00:00:50,640 --> 00:00:52,760
Speaker 1: have a lot of evidence. I mean the central bankers

15
00:00:52,800 --> 00:00:55,160
Speaker 1: forever have said how important inflation is and they just

16
00:00:55,240 --> 00:00:57,480
Speaker 1: kind of guessed it. So there's a huge body of

17
00:00:57,520 --> 00:01:00,320
Speaker 1: literature that I've contributed to and we look at what's

18
00:01:00,360 --> 00:01:02,760
Speaker 1: the what's the impact on the country's well being, if

19
00:01:02,760 --> 00:01:04,840
Speaker 1: you like, on the wealth of nations of a one

20
00:01:04,880 --> 00:01:08,440
Speaker 1: percentage point rising unemployment compared to a one percentage point

21
00:01:08,560 --> 00:01:11,240
Speaker 1: rise in inflation, and the answer is it's absolutely clear

22
00:01:11,680 --> 00:01:14,440
Speaker 1: between five and ten times worse. So a new paper

23
00:01:14,480 --> 00:01:17,480
Speaker 1: says that the rising unemployment that they're going to bring

24
00:01:17,480 --> 00:01:20,760
Speaker 1: about is ten times worse than the problem they're trying

25
00:01:20,800 --> 00:01:23,040
Speaker 1: to solve. And you started this thing out. We I've

26
00:01:23,040 --> 00:01:25,240
Speaker 1: been talking a lot about the woman on the mile

27
00:01:25,280 --> 00:01:27,399
Speaker 1: in road, omnibus, and what I mean by that is

28
00:01:27,880 --> 00:01:30,039
Speaker 1: so so the Bank of England sits in the city

29
00:01:30,040 --> 00:01:32,800
Speaker 1: of London. One mile away is the mile in road.

30
00:01:32,840 --> 00:01:34,440
Speaker 1: It's called the mile in road because it's a mile

31
00:01:34,480 --> 00:01:37,319
Speaker 1: from the city and it's where the two worlds collide.

32
00:01:37,640 --> 00:01:39,920
Speaker 1: And the question is, what's going on that's going to

33
00:01:40,040 --> 00:01:42,919
Speaker 1: help the bankers and the city folks that we talked

34
00:01:42,920 --> 00:01:46,120
Speaker 1: to and the woman riding the bus on the mislen road.

35
00:01:46,160 --> 00:01:48,160
Speaker 1: And the answer, it seems to me, is that is

36
00:01:48,200 --> 00:01:51,880
Speaker 1: that we're we're seeing disaster coming. We're seeing rises in

37
00:01:52,000 --> 00:01:54,560
Speaker 1: interest rates in the UK when the Bank of being

38
00:01:54,600 --> 00:01:58,880
Speaker 1: there's agents today talk about slowing demands, slowing output. The

39
00:01:58,920 --> 00:02:01,480
Speaker 1: Bank of being the four has before the rate rise

40
00:02:01,920 --> 00:02:05,720
Speaker 1: that there's a high probability of deflation and that output

41
00:02:05,800 --> 00:02:08,040
Speaker 1: is going to fall over the next three years. So

42
00:02:08,080 --> 00:02:10,200
Speaker 1: what are they trying to do for a problem that's

43
00:02:10,240 --> 00:02:13,480
Speaker 1: not about demand driven inflation? And the other thing, Johnathan

44
00:02:13,480 --> 00:02:17,240
Speaker 1: and Tom I think we really should think about. In

45
00:02:17,280 --> 00:02:19,200
Speaker 1: a sense, you guys talk about this all the time,

46
00:02:19,200 --> 00:02:22,480
Speaker 1: but there's so little discent the story at the ECB,

47
00:02:22,680 --> 00:02:24,920
Speaker 1: the story at the Bank of being the story at

48
00:02:24,919 --> 00:02:26,520
Speaker 1: the Fed. We kind of do things a banning flesh.

49
00:02:26,560 --> 00:02:29,160
Speaker 1: We've got to raise rates. Potentially this is going to

50
00:02:29,440 --> 00:02:32,160
Speaker 1: crash the economies and it will all be much worried.

51
00:02:32,240 --> 00:02:34,720
Speaker 1: Professor Blanche floor, I stood in the bottom of our

52
00:02:34,760 --> 00:02:38,440
Speaker 1: building here in New York with Secretary Treasury Tim Geitner

53
00:02:39,000 --> 00:02:42,440
Speaker 1: in the heart of the financial crisis and Geitner brilliantly

54
00:02:42,560 --> 00:02:46,520
Speaker 1: laid out that they needed to extend the x axis

55
00:02:46,560 --> 00:02:50,000
Speaker 1: and use time to heal the wounds. Are these central

56
00:02:50,000 --> 00:02:54,400
Speaker 1: banks that are panicking because they refuse to send to

57
00:02:54,560 --> 00:02:59,360
Speaker 1: extend time, to extend the x axis, to to diffuse

58
00:02:59,480 --> 00:03:03,840
Speaker 1: inflash Canary Impulse? Well, that's absolutely right, Tom. I mean

59
00:03:04,040 --> 00:03:06,760
Speaker 1: the thing that it strikes me as very interesting is

60
00:03:06,800 --> 00:03:09,880
Speaker 1: these central bankers seem to want to respond to every

61
00:03:09,919 --> 00:03:13,480
Speaker 1: piece of MINU Sha that comes in every day. Their

62
00:03:13,560 --> 00:03:15,960
Speaker 1: job is to focus on the forecast, to rise at

63
00:03:16,000 --> 00:03:17,919
Speaker 1: what inflation is going to be, let's say, in two

64
00:03:18,000 --> 00:03:21,200
Speaker 1: years time. But if that causes all kinds of problems,

65
00:03:21,280 --> 00:03:23,840
Speaker 1: there's no reason why you shouldn't say, okay, let's let

66
00:03:23,919 --> 00:03:27,160
Speaker 1: inflation come back to target in three years or four years.

67
00:03:27,240 --> 00:03:30,720
Speaker 1: I mean that's absolutely allowed and the sensible thing probably

68
00:03:30,800 --> 00:03:34,760
Speaker 1: to do is to see if this temporary shock dissipates.

69
00:03:35,040 --> 00:03:37,600
Speaker 1: So you could sit there and say a sensible path

70
00:03:37,960 --> 00:03:40,240
Speaker 1: would be to sit and wait and watch. But again,

71
00:03:40,320 --> 00:03:42,960
Speaker 1: where's the dissenting voices? They're all saying the same thing,

72
00:03:43,240 --> 00:03:46,280
Speaker 1: based on zero data. They have no precedent to this

73
00:03:46,680 --> 00:03:49,720
Speaker 1: and the danger is that the soft landings are not

74
00:03:49,760 --> 00:03:51,560
Speaker 1: going to come. And in the forecast yesterday from the

75
00:03:51,560 --> 00:03:54,240
Speaker 1: Fed said output is going to be fine, impost is

76
00:03:54,240 --> 00:03:56,520
Speaker 1: gonna rise just a little bit and raising rates to

77
00:03:56,560 --> 00:03:59,000
Speaker 1: four and a half percent, no worry, it will slowly

78
00:03:59,000 --> 00:04:01,880
Speaker 1: bring inflation to and that's for Garga land. That's not

79
00:04:01,920 --> 00:04:05,600
Speaker 1: gonna happen. Danny is there? Are there any circumstances under

80
00:04:05,600 --> 00:04:11,000
Speaker 1: which you would argue for raising rates? Well, of course, obviously.

81
00:04:11,320 --> 00:04:14,440
Speaker 1: I mean the re absolutely. So what? So? What what

82
00:04:14,480 --> 00:04:16,880
Speaker 1: are the scenarios that would cause you to say it

83
00:04:16,960 --> 00:04:20,960
Speaker 1: is important question? That's a stupid question in a way.

84
00:04:21,240 --> 00:04:23,679
Speaker 1: I mean what we've seen since two thousand and eight

85
00:04:24,080 --> 00:04:26,279
Speaker 1: is the mother of all shocks. We saw the mother

86
00:04:26,360 --> 00:04:30,000
Speaker 1: of all shocks, negative shock to output in two thousand

87
00:04:30,120 --> 00:04:32,479
Speaker 1: seven eight, which you had to counter. If you haven't

88
00:04:32,640 --> 00:04:35,480
Speaker 1: counted it, Ben Banankei said unemployed would have been so

89
00:04:35,520 --> 00:04:38,839
Speaker 1: I'd buy that. So now what we have a giant shocks,

90
00:04:38,880 --> 00:04:42,799
Speaker 1: I mean giant shock from the covid and from the war.

91
00:04:42,960 --> 00:04:45,560
Speaker 1: We don't know how it's going to recover. So why

92
00:04:45,600 --> 00:04:48,680
Speaker 1: would I want to punch the labor market and punch

93
00:04:48,800 --> 00:04:51,440
Speaker 1: demand before I really know what's coming? I mean it's

94
00:04:51,440 --> 00:04:53,599
Speaker 1: as if they know what's coming, because they clearly don't.

95
00:04:53,800 --> 00:04:58,120
Speaker 1: So under these circumstances, supplied driven shock that essentially is

96
00:04:58,120 --> 00:05:00,000
Speaker 1: going to drop out. My guests in the United State

97
00:05:00,000 --> 00:05:03,760
Speaker 1: Eights and in the UK will see very low inflation

98
00:05:03,920 --> 00:05:06,960
Speaker 1: by June, as those big numbers, one off big numbers

99
00:05:06,960 --> 00:05:09,039
Speaker 1: that we saw dropped up. So I would have not

100
00:05:09,120 --> 00:05:13,280
Speaker 1: been rotive over rate rises because of the large negative shock.

101
00:05:13,480 --> 00:05:16,280
Speaker 1: And the debate over the last decade is about the

102
00:05:16,320 --> 00:05:19,599
Speaker 1: scale of that negative shock. Danny. It may be a

103
00:05:19,640 --> 00:05:22,560
Speaker 1: stupid question, and yet some people might be wondering that

104
00:05:22,600 --> 00:05:24,960
Speaker 1: because they're taking a look at CPI where it is

105
00:05:25,080 --> 00:05:28,279
Speaker 1: and saying why wouldn't you want to raise rates? So,

106
00:05:28,440 --> 00:05:32,239
Speaker 1: and I mean I'm just saying so, from your first

107
00:05:33,360 --> 00:05:36,359
Speaker 1: from your coat, what data point would you be watching

108
00:05:36,680 --> 00:05:40,080
Speaker 1: to prove your point every week? Okay, so let's just

109
00:05:40,160 --> 00:05:42,200
Speaker 1: go with the claims that the Fed has made and

110
00:05:42,240 --> 00:05:44,960
Speaker 1: the claim that I make. So what you've got was

111
00:05:45,320 --> 00:05:48,640
Speaker 1: a couple of once off events which are basically driving

112
00:05:48,680 --> 00:05:51,640
Speaker 1: the base effects. You've had inflation of zero and zero

113
00:05:51,720 --> 00:05:54,360
Speaker 1: point one in the last two months. If you just

114
00:05:54,440 --> 00:05:57,000
Speaker 1: take two thousand twelve to two thousand ninety and you

115
00:05:57,120 --> 00:06:02,040
Speaker 1: impose those inflation shocks over the next eight months, inflation

116
00:06:02,120 --> 00:06:04,960
Speaker 1: gets to one by about you. If you go back

117
00:06:04,960 --> 00:06:07,320
Speaker 1: to two thousand and eight, same date, July, two thousand

118
00:06:07,320 --> 00:06:09,880
Speaker 1: and eight, inflation was five point six percent. It was

119
00:06:10,000 --> 00:06:14,359
Speaker 1: minus two a year later. So the question is, everything's

120
00:06:14,400 --> 00:06:16,479
Speaker 1: being driven by the base effects. So I would be

121
00:06:16,520 --> 00:06:30,719
Speaker 1: watching and waiting to blanche. Thank you, sir. Our guest

122
00:06:30,839 --> 00:06:34,159
Speaker 1: is so important on what to do with your assets,

123
00:06:34,279 --> 00:06:37,520
Speaker 1: your money forward. Lisa, help me here with the data check.

124
00:06:37,600 --> 00:06:40,320
Speaker 1: So much going on. Equities give me a mixed story.

125
00:06:40,400 --> 00:06:43,840
Speaker 1: The vix went out above thirty and pulled right back

126
00:06:43,839 --> 00:06:47,240
Speaker 1: into twenty. Seven, point six, eight, maybe a more quiescent

127
00:06:47,320 --> 00:06:50,560
Speaker 1: response to Dow, just still above thirty thousand. Didn't get

128
00:06:50,600 --> 00:06:53,000
Speaker 1: to the twenty nine thousand level. Lisa. What do you

129
00:06:53,040 --> 00:06:55,160
Speaker 1: see in bonds this morning? Well, what you're seeing is

130
00:06:55,200 --> 00:06:58,159
Speaker 1: a front end that just won't quit. Right four point

131
00:06:59,200 --> 00:07:02,360
Speaker 1: on that two year old, and I think that's really important. Also, though,

132
00:07:02,400 --> 00:07:04,440
Speaker 1: in the currency space, and this sort of goes to

133
00:07:04,480 --> 00:07:06,240
Speaker 1: the scene that we've been talking about over the first

134
00:07:06,240 --> 00:07:09,120
Speaker 1: two hours of the show. How does the other central

135
00:07:09,120 --> 00:07:12,920
Speaker 1: banks respond to this? The Swiss National Bank rose, raised rates,

136
00:07:13,000 --> 00:07:18,480
Speaker 1: baviusly left uh the negative yield regime, which had been

137
00:07:18,520 --> 00:07:21,280
Speaker 1: an eight year regime, and their currency is weakening the

138
00:07:21,280 --> 00:07:24,119
Speaker 1: most is two thousand and fifteen. What is the path

139
00:07:24,160 --> 00:07:27,880
Speaker 1: ahead in this currency war to get a stronger currency

140
00:07:27,880 --> 00:07:30,080
Speaker 1: at a time when nobody wants anything other than the dollar?

141
00:07:30,200 --> 00:07:32,480
Speaker 1: For those keeping scored at home, let's be clear. The

142
00:07:32,640 --> 00:07:38,120
Speaker 1: Swiss went one way, the Japanese went another way. Maybe

143
00:07:38,120 --> 00:07:41,520
Speaker 1: that's called a currency war, Lisa. I mean, and a

144
00:07:41,600 --> 00:07:43,240
Speaker 1: very different one than the ones that we're used to

145
00:07:43,320 --> 00:07:45,800
Speaker 1: over the very different. It's really, really important, is Jeff.

146
00:07:45,840 --> 00:07:48,360
Speaker 1: You said earlier with B and y melon. It's asymmetric,

147
00:07:48,960 --> 00:07:51,200
Speaker 1: to say the least. We need to solve the Carnag

148
00:07:51,280 --> 00:07:54,760
Speaker 1: in your portfolio, Lisa Shallott, with us, chief investment officer

149
00:07:54,880 --> 00:07:58,960
Speaker 1: Morgan Stanley Wealth Management, and we readjust this morning. Are

150
00:07:59,000 --> 00:08:03,120
Speaker 1: we rebalancing, Lisa? Are We readjusting? What are we doing

151
00:08:03,280 --> 00:08:07,640
Speaker 1: amid the carnage? Well, look, our our advice to our

152
00:08:07,680 --> 00:08:11,280
Speaker 1: clients is certainly that we should be rebalancing here. You know,

153
00:08:11,360 --> 00:08:13,920
Speaker 1: what we have said is this is a time for

154
00:08:15,120 --> 00:08:19,360
Speaker 1: active risk management, and what we mean by that is

155
00:08:19,400 --> 00:08:25,440
Speaker 1: taking Um a maximum level of diversification. That means diversification

156
00:08:25,560 --> 00:08:31,800
Speaker 1: by sectors, diversification by technical factors, diversification, uh, you know,

157
00:08:31,920 --> 00:08:35,760
Speaker 1: by region, uh and UH. You know, I know it's

158
00:08:35,760 --> 00:08:40,320
Speaker 1: not popular right now, you know, to speak about uh,

159
00:08:40,520 --> 00:08:44,400
Speaker 1: you know, American investors owning uh, non US stocks, given

160
00:08:44,520 --> 00:08:48,320
Speaker 1: relative out performance of the last decade. But you know,

161
00:08:48,400 --> 00:08:51,240
Speaker 1: we think that what's going on in the currency markets

162
00:08:51,320 --> 00:08:57,040
Speaker 1: is material, i. and that this, this divergence, ultimately will

163
00:08:57,080 --> 00:08:59,960
Speaker 1: mean revert and and that there is going to be

164
00:09:00,080 --> 00:09:03,440
Speaker 1: some catch up. So we're recommending, uh, you know, maximum

165
00:09:03,559 --> 00:09:07,640
Speaker 1: active management, diversification and things of that nature. I really

166
00:09:07,640 --> 00:09:10,000
Speaker 1: look forward to speaking to you because I want to

167
00:09:10,000 --> 00:09:13,160
Speaker 1: talk about the strange words scale and I'M gonna go

168
00:09:13,200 --> 00:09:16,040
Speaker 1: back to the Great Peter Lynch at Fidelity, who got

169
00:09:16,080 --> 00:09:18,200
Speaker 1: angry one day and he said, look, I care about

170
00:09:18,200 --> 00:09:21,920
Speaker 1: your forty seven stock pick, knock your number one stock pick.

171
00:09:22,320 --> 00:09:26,360
Speaker 1: There seems to be so little to choose from. Lisa Ala,

172
00:09:26,480 --> 00:09:30,560
Speaker 1: Mike Wilson. How do you get scale or diversification within

173
00:09:30,760 --> 00:09:36,400
Speaker 1: US equities now if you've only got so many good ideas? Well,

174
00:09:36,960 --> 00:09:39,560
Speaker 1: I actually Um I might push back on that. I

175
00:09:39,600 --> 00:09:42,839
Speaker 1: think that, you know, underneath the surface of the S

176
00:09:42,920 --> 00:09:46,840
Speaker 1: and p five index and even the Nastack in disease, Um,

177
00:09:46,880 --> 00:09:50,800
Speaker 1: you know, we're finding real opportunities. There has been carnage

178
00:09:50,800 --> 00:09:53,720
Speaker 1: in this market. We know that in small and midcap

179
00:09:53,840 --> 00:09:56,800
Speaker 1: land there's been carnage. We know that there's a host

180
00:09:56,920 --> 00:10:00,280
Speaker 1: of uh, sectors that that have sold off across sably,

181
00:10:00,400 --> 00:10:05,559
Speaker 1: including things like home builders, uh, you know, again, contrarian perhaps,

182
00:10:06,320 --> 00:10:09,200
Speaker 1: but where, you know, a lot of the bad news

183
00:10:09,320 --> 00:10:13,280
Speaker 1: or likely news is discounted, uh, and so we do

184
00:10:13,440 --> 00:10:16,760
Speaker 1: think that there, you know, are our things to accumulate

185
00:10:16,840 --> 00:10:21,280
Speaker 1: out there if you are willing to do the fundamental work.

186
00:10:21,360 --> 00:10:24,360
Speaker 1: I mean, I think one of the UH, you know,

187
00:10:24,679 --> 00:10:27,079
Speaker 1: one of the challenges for a lot of investors is

188
00:10:27,120 --> 00:10:31,079
Speaker 1: the last thirteen years have been dominated by a handful

189
00:10:31,120 --> 00:10:34,960
Speaker 1: of stocks in the US with a growth orientation in

190
00:10:35,000 --> 00:10:38,360
Speaker 1: the tech and and and communication sector, and people didn't

191
00:10:38,400 --> 00:10:40,840
Speaker 1: have to do much work because they could just buy

192
00:10:40,880 --> 00:10:44,560
Speaker 1: the index and get the job done. Uh, this is

193
00:10:44,559 --> 00:10:49,120
Speaker 1: going to require homework navigating in these markets. Um, and

194
00:10:49,160 --> 00:10:52,800
Speaker 1: this is when active managers actually, you know, uh, for

195
00:10:52,880 --> 00:10:56,360
Speaker 1: good or for bad, earn their fees and, Um, you know, we,

196
00:10:56,360 --> 00:10:58,600
Speaker 1: we think that that is the place to be. Does

197
00:10:58,640 --> 00:11:00,120
Speaker 1: that mean Le so that you think the headline in

198
00:11:00,200 --> 00:11:03,880
Speaker 1: figure for the SMP, for example, could trade sideways for years?

199
00:11:05,640 --> 00:11:08,560
Speaker 1: I do. I am, uh, you know, more in that camp.

200
00:11:08,679 --> 00:11:10,400
Speaker 1: I mean, I think that one of the things that

201
00:11:10,440 --> 00:11:14,080
Speaker 1: has continued to surprise me is the extent to which

202
00:11:14,160 --> 00:11:18,800
Speaker 1: equity investors have been willing to hold the levels of

203
00:11:18,840 --> 00:11:23,760
Speaker 1: forward multiples that we're holding in the face of decade

204
00:11:23,880 --> 00:11:29,600
Speaker 1: high interest rates. We know mathematically and fundamentally that the

205
00:11:29,679 --> 00:11:34,160
Speaker 1: movement and interest rates higher should equate to lower price

206
00:11:34,200 --> 00:11:38,320
Speaker 1: earnings ratios. Um, and you know, yes, have we pressed

207
00:11:38,400 --> 00:11:41,360
Speaker 1: down a bit from where we are in January, as

208
00:11:41,400 --> 00:11:44,960
Speaker 1: the Fed funds has gone, you know, from zero to uh,

209
00:11:45,000 --> 00:11:49,080
Speaker 1: you know, three. Yes, we have some. But you know,

210
00:11:49,320 --> 00:11:51,280
Speaker 1: you know that we're also in the camp that the

211
00:11:51,320 --> 00:11:56,160
Speaker 1: current figures in terms of estimates for forward consensus earnings

212
00:11:56,280 --> 00:12:01,960
Speaker 1: estimates for two full year and then probably remain too high,

213
00:12:02,160 --> 00:12:06,040
Speaker 1: especially if we're in this debate about, you know, recession, no,

214
00:12:06,200 --> 00:12:09,840
Speaker 1: recession Um. And so while you know the current pricing

215
00:12:09,840 --> 00:12:13,479
Speaker 1: and markets at at thirty eight hundred and change may suggest,

216
00:12:14,120 --> 00:12:18,240
Speaker 1: you know, a sub seventeen times forward multiple, uh, if

217
00:12:18,320 --> 00:12:20,959
Speaker 1: you adjust those earnings down, we might be back at

218
00:12:21,040 --> 00:12:23,679
Speaker 1: seventeen and a half, eighteen times forward. And so this

219
00:12:23,800 --> 00:12:27,280
Speaker 1: market has more work to do in terms of quote unquote,

220
00:12:27,280 --> 00:12:30,560
Speaker 1: getting real. So who is going to be the leadership?

221
00:12:30,760 --> 00:12:33,200
Speaker 1: And I asked this because it sounds like in your scenario,

222
00:12:33,320 --> 00:12:37,720
Speaker 1: big tech cannot be it anymore correct. I think big

223
00:12:37,760 --> 00:12:39,719
Speaker 1: tech is going to have to consolidate and I think

224
00:12:39,720 --> 00:12:41,640
Speaker 1: those valuations are going to have to come in and

225
00:12:41,679 --> 00:12:44,040
Speaker 1: I think that they're going to have the come to

226
00:12:44,160 --> 00:12:48,040
Speaker 1: Jesus moment which says, yes, these are great companies, but

227
00:12:48,280 --> 00:12:50,920
Speaker 1: they are no longer great stocks, because everyone knows the

228
00:12:50,960 --> 00:12:55,400
Speaker 1: stories and expectations are extraordinarily hot. Um, you know, the

229
00:12:55,480 --> 00:12:57,920
Speaker 1: reality is that they do operate in the whole big

230
00:12:57,960 --> 00:13:01,160
Speaker 1: wide world, global world. The Global World is slowing, the

231
00:13:01,280 --> 00:13:05,200
Speaker 1: US dollar is a material headwind and inflation and cost

232
00:13:05,280 --> 00:13:10,520
Speaker 1: pressures are realities for them as well. So new leadership,

233
00:13:10,679 --> 00:13:13,680
Speaker 1: you know from where we sit, is likely to come

234
00:13:13,800 --> 00:13:20,160
Speaker 1: from different areas, areas like healthcare, areas like energy, industrials

235
00:13:20,200 --> 00:13:24,320
Speaker 1: that may benefit Um from some of the infrastructure and

236
00:13:24,320 --> 00:13:26,480
Speaker 1: capital spending that we think is gonna occur over the

237
00:13:26,520 --> 00:13:28,600
Speaker 1: next couple of years. Lisa, we at a point, and

238
00:13:28,640 --> 00:13:33,200
Speaker 1: I'm thinking of Andrew Mellon the nineties, on transactions and combinations.

239
00:13:33,840 --> 00:13:36,120
Speaker 1: Are we at a point where the zombies roll up?

240
00:13:36,320 --> 00:13:38,720
Speaker 1: I mean we finally at a point where the real

241
00:13:38,960 --> 00:13:42,080
Speaker 1: interst rate market, which was a gift of zombies head

242
00:13:42,120 --> 00:13:44,760
Speaker 1: for seventeen years, whatever the number is. Is this the

243
00:13:44,800 --> 00:13:48,760
Speaker 1: point where the zombies end? I I love what you're saying,

244
00:13:48,800 --> 00:13:51,400
Speaker 1: Tom Because I do think that that that is going

245
00:13:51,440 --> 00:13:56,000
Speaker 1: to be the next phase here where the cost of

246
00:13:56,080 --> 00:13:59,880
Speaker 1: capital does start to pinch. I do think that those

247
00:14:00,000 --> 00:14:04,240
Speaker 1: who have, uh, you know, strategic capital to deploy uh,

248
00:14:04,320 --> 00:14:07,160
Speaker 1: you know, are going to be able to to, Um,

249
00:14:07,200 --> 00:14:10,960
Speaker 1: go out and and acquire some capabilities. At the same time,

250
00:14:11,240 --> 00:14:13,200
Speaker 1: I think some of those zombies are going to go

251
00:14:13,280 --> 00:14:18,040
Speaker 1: by the wayside. Um and, uh, you know, start from

252
00:14:18,080 --> 00:14:21,560
Speaker 1: not being able to get financing. Yeah, I gotta leave

253
00:14:21,600 --> 00:14:24,120
Speaker 1: it there. Lisa shallow, thank you so much, Turvic. Brief there.

254
00:14:24,160 --> 00:14:26,160
Speaker 1: And actually what to do with your capital with Morgan

255
00:14:26,240 --> 00:14:33,680
Speaker 1: Stanley wealth management. Is this joy? And how do we know?

256
00:14:33,720 --> 00:14:38,040
Speaker 1: It's an historic day of Japanese intervention, Bank of England action.

257
00:14:38,280 --> 00:14:41,560
Speaker 1: To Abbe Joseph Cohen with his Professor at Columbia Business School,

258
00:14:41,920 --> 00:14:44,640
Speaker 1: a modest career at Goldman Sachs as well. Abby, thank

259
00:14:44,680 --> 00:14:47,200
Speaker 1: you so much for joining us here. How to keep

260
00:14:47,280 --> 00:14:53,200
Speaker 1: us informed on the underlying finance and equations, the mathematics

261
00:14:53,240 --> 00:14:57,600
Speaker 1: of these equity markets? Abbe Joseph Cohen. Suddenly the sharp

262
00:14:57,760 --> 00:15:01,880
Speaker 1: ratio matters. I guess Beta man otters again, but outside

263
00:15:01,880 --> 00:15:04,800
Speaker 1: of Beta we've got the risk free rate and it

264
00:15:04,920 --> 00:15:10,080
Speaker 1: is returned with a vengeance. Are we revisiting the sharp ratio?

265
00:15:10,160 --> 00:15:12,400
Speaker 1: Are we back to the articles you wrote for the

266
00:15:12,440 --> 00:15:18,360
Speaker 1: CFA years ago? Tom Wonderful question and I'm going to

267
00:15:19,000 --> 00:15:22,560
Speaker 1: respond by giving a bit of a prologue, which is

268
00:15:22,600 --> 00:15:26,920
Speaker 1: that many models are broken have been broken during this

269
00:15:27,000 --> 00:15:31,840
Speaker 1: period of time, because they typically respond to cyclical phenomenon.

270
00:15:32,160 --> 00:15:36,280
Speaker 1: For example, your question to Michael before about the Phillips Curve,

271
00:15:36,640 --> 00:15:39,640
Speaker 1: and the reality is that there are so many structural

272
00:15:39,720 --> 00:15:43,040
Speaker 1: changes in the economy and the markets as well that

273
00:15:43,120 --> 00:15:46,440
Speaker 1: a lot of those models simply have not applied. Some

274
00:15:46,600 --> 00:15:49,960
Speaker 1: of them are coming back and force uh, the Phillips Curve,

275
00:15:50,040 --> 00:15:53,800
Speaker 1: for example, had no way in this model to reflect

276
00:15:53,840 --> 00:15:56,800
Speaker 1: the fact that there was a pandemic uh, that we

277
00:15:56,840 --> 00:16:01,400
Speaker 1: have had this generational shift in La reforce participation, by

278
00:16:01,400 --> 00:16:04,120
Speaker 1: which I mean the baby boomers are now stepping out

279
00:16:04,120 --> 00:16:06,520
Speaker 1: of the labor force. And the other thing, of course,

280
00:16:06,600 --> 00:16:11,240
Speaker 1: is that we have had a four year uh deceleration,

281
00:16:11,320 --> 00:16:13,960
Speaker 1: if you will, in terms of immigrants coming into the

282
00:16:14,040 --> 00:16:18,120
Speaker 1: United States, and over the prior decade immigrants filled sixty

283
00:16:18,120 --> 00:16:22,560
Speaker 1: to sixty of the increase in employment in the United States.

284
00:16:22,560 --> 00:16:24,320
Speaker 1: So there are a lot of things that are different.

285
00:16:24,400 --> 00:16:27,400
Speaker 1: Within the market itself, a lot of the models haven't

286
00:16:27,400 --> 00:16:30,800
Speaker 1: applied for a while. Keep in mind this weird twenty

287
00:16:30,880 --> 00:16:33,920
Speaker 1: to thirty year period in which interest rates and inflation

288
00:16:33,920 --> 00:16:38,680
Speaker 1: were extraordinarily low and, to your point, real rates reached

289
00:16:38,840 --> 00:16:42,760
Speaker 1: negative levels Um, something we had never seen before. I

290
00:16:42,960 --> 00:16:46,360
Speaker 1: for one, now I'm answering your question. I'm happy to

291
00:16:46,400 --> 00:16:49,800
Speaker 1: see that the Fed is now focused on making sure

292
00:16:49,920 --> 00:16:54,240
Speaker 1: that real rates, really yields, are in fact positive. And

293
00:16:54,720 --> 00:16:58,920
Speaker 1: does the market believe them? And the reality is that

294
00:16:59,000 --> 00:17:02,520
Speaker 1: we now have a too inverted yield curve, which suggests

295
00:17:02,560 --> 00:17:06,120
Speaker 1: to me that bond investors and least, are giving the

296
00:17:06,119 --> 00:17:09,800
Speaker 1: Fed credence, in credibility in terms of believing that the

297
00:17:09,800 --> 00:17:14,240
Speaker 1: Fed policy will have efficacy. Abby, are you saying that

298
00:17:14,359 --> 00:17:18,240
Speaker 1: stock markets are not accurately reflecting the fact that inflation

299
00:17:18,359 --> 00:17:21,520
Speaker 1: would be higher and would remain higher even after this

300
00:17:21,920 --> 00:17:25,160
Speaker 1: cycle collapse, if the Fed were not to keep rates

301
00:17:25,200 --> 00:17:28,560
Speaker 1: at a much higher level than they had been um?

302
00:17:28,600 --> 00:17:31,600
Speaker 1: Another very good question. Let me just talk about what

303
00:17:31,680 --> 00:17:35,880
Speaker 1: happened yesterday in response, uh, and that is the equity

304
00:17:35,920 --> 00:17:39,520
Speaker 1: market didn't know what to do. Um, first it was up,

305
00:17:39,560 --> 00:17:41,480
Speaker 1: then it was down, then it was up, then it

306
00:17:41,560 --> 00:17:45,280
Speaker 1: was down big time. There was really erratic behavior because,

307
00:17:45,280 --> 00:17:49,440
Speaker 1: to your point, Lisa, equity investors are really confused because

308
00:17:49,720 --> 00:17:53,840
Speaker 1: there is this Yin Yang between inflation and higher yields

309
00:17:54,560 --> 00:17:58,800
Speaker 1: versus will the economy and earnings continue to grow, and

310
00:17:58,880 --> 00:18:01,800
Speaker 1: I think we're now at a point where, given the

311
00:18:01,960 --> 00:18:06,240
Speaker 1: significant rises in Um interest rates and yields across the

312
00:18:06,320 --> 00:18:09,320
Speaker 1: yield curve since the beginning of the year, the equity

313
00:18:09,359 --> 00:18:12,960
Speaker 1: market is now focused much less on inflation and yields

314
00:18:13,200 --> 00:18:15,640
Speaker 1: than it is on earnings, and there there's a lot

315
00:18:15,680 --> 00:18:19,679
Speaker 1: of confusion. Um Investors are not sure how this is

316
00:18:19,680 --> 00:18:22,960
Speaker 1: going to play out Um for the rest of the year,

317
00:18:23,119 --> 00:18:27,120
Speaker 1: let alone for three we see, for example, that they're

318
00:18:27,200 --> 00:18:30,960
Speaker 1: ongoing adjustments to the consensus earnings forecast. But let me

319
00:18:31,000 --> 00:18:35,960
Speaker 1: point out we're starting at record profit margins Um. It's

320
00:18:36,000 --> 00:18:38,159
Speaker 1: not as if profit profit margins and R O e

321
00:18:38,280 --> 00:18:40,879
Speaker 1: were low. R O e for the SMP five is

322
00:18:40,920 --> 00:18:44,159
Speaker 1: an excessive Um, you know. So if there is in

323
00:18:44,200 --> 00:18:49,280
Speaker 1: fact ongoing profit margins squeezed, I think the impact overall

324
00:18:49,440 --> 00:18:53,840
Speaker 1: is not dramatic. The impact, however, in individual sectors may

325
00:18:53,880 --> 00:18:56,919
Speaker 1: be significant. Do you see the possibility of a lost decade?

326
00:18:56,920 --> 00:18:59,439
Speaker 1: I've given the fact that we're trying to readjust and

327
00:18:59,560 --> 00:19:04,560
Speaker 1: renormal realized rates, renormalize some of the financialization of the economy.

328
00:19:06,240 --> 00:19:09,199
Speaker 1: You mean a lost decade in the offense in G

329
00:19:09,320 --> 00:19:12,040
Speaker 1: D P and a lot of things that people hearken

330
00:19:12,119 --> 00:19:15,360
Speaker 1: back to the seventies. About sure. I mean if if

331
00:19:15,400 --> 00:19:19,040
Speaker 1: you look at the valuation of the US Equity Market

332
00:19:19,040 --> 00:19:21,920
Speaker 1: and some of the markets as well, at the end

333
00:19:22,000 --> 00:19:26,560
Speaker 1: of one they were at record high levels in terms

334
00:19:26,680 --> 00:19:30,719
Speaker 1: of where we were on percentiles, almost every valuation model

335
00:19:31,080 --> 00:19:36,920
Speaker 1: was between the ninety nine percentile, indicating, in my view, overvaluation,

336
00:19:37,680 --> 00:19:41,360
Speaker 1: unless you believe that the dream scenario of extremely low

337
00:19:41,440 --> 00:19:46,280
Speaker 1: interest rates and strong profit growth would continue uninterrupted. So

338
00:19:46,320 --> 00:19:50,920
Speaker 1: where are we now? The valuations are roughly at average

339
00:19:51,000 --> 00:19:56,520
Speaker 1: levels Um. SMPI PE, for example, is about sixteen times

340
00:19:56,560 --> 00:20:00,520
Speaker 1: earnings Um and given where we are, even with a

341
00:20:00,640 --> 00:20:04,560
Speaker 1: rise in interest rates, that's not a bad place to be.

342
00:20:05,040 --> 00:20:08,080
Speaker 1: So when we talk about the lost decade, let's talk

343
00:20:08,119 --> 00:20:11,399
Speaker 1: about two different phases. Number One, we've now had a

344
00:20:12,200 --> 00:20:15,919
Speaker 1: correction and share prices from record high levels and record

345
00:20:15,960 --> 00:20:20,760
Speaker 1: high valuations. Can we get back that? I don't think

346
00:20:20,800 --> 00:20:24,159
Speaker 1: that happens over the next several months, UM, over the

347
00:20:24,600 --> 00:20:28,600
Speaker 1: next few quarters. I think the economy will slow, earnings

348
00:20:28,640 --> 00:20:32,240
Speaker 1: growth will slow, but I think it's possible that we

349
00:20:32,280 --> 00:20:35,280
Speaker 1: could see higher equity prices. I kind of peg that

350
00:20:35,400 --> 00:20:37,920
Speaker 1: along the same lines of the growth and earnings, which

351
00:20:38,000 --> 00:20:41,440
Speaker 1: is probably, uh, what do we call it, five over

352
00:20:41,440 --> 00:20:43,240
Speaker 1: the next few months. I mean a few years ago

353
00:20:43,280 --> 00:20:45,959
Speaker 1: you wrote an iconic paper for the CFA institute. You

354
00:20:46,000 --> 00:20:49,160
Speaker 1: mentioned an old strategist I used to talk to named Aristotle.

355
00:20:49,800 --> 00:20:53,679
Speaker 1: Aristotle never saw a bond market with yield up, price

356
00:20:53,800 --> 00:20:56,800
Speaker 1: down and the losses that we've seen over the last

357
00:20:56,880 --> 00:21:00,240
Speaker 1: year and a half. How do bond investors re ever,

358
00:21:00,760 --> 00:21:05,920
Speaker 1: given this historic carnage? The damage clearly has been much

359
00:21:05,960 --> 00:21:08,800
Speaker 1: more dramatic in the bond market and in some ways

360
00:21:08,800 --> 00:21:13,120
Speaker 1: the overvaluation and bonds was much more extreme. We had

361
00:21:13,280 --> 00:21:17,000
Speaker 1: central banks around the world who kept interest rates nominally

362
00:21:17,359 --> 00:21:21,320
Speaker 1: extremely low levels and real yields were low in many countries.

363
00:21:21,359 --> 00:21:24,400
Speaker 1: You know, two thirds of major economies, not the US,

364
00:21:24,480 --> 00:21:28,120
Speaker 1: but two thirds of major economies, had negative real yields.

365
00:21:28,400 --> 00:21:31,440
Speaker 1: So the damage that we've seen in the bond market, Um,

366
00:21:32,640 --> 00:21:36,000
Speaker 1: I think it was expected. When we look at government bonds,

367
00:21:36,080 --> 00:21:39,360
Speaker 1: it's one thing. The damage and the credit markets, Um,

368
00:21:39,520 --> 00:21:42,240
Speaker 1: is something that we've not yet seen fully rolled forward

369
00:21:42,720 --> 00:21:45,520
Speaker 1: because a lot of those are ill liquid securities and

370
00:21:45,560 --> 00:21:48,439
Speaker 1: I think we're going to see more damage ahead. But

371
00:21:48,600 --> 00:21:53,560
Speaker 1: for the average investor, who is willing to buy, for example,

372
00:21:53,600 --> 00:21:57,480
Speaker 1: an individual bond um and now can get a three

373
00:21:57,680 --> 00:22:01,960
Speaker 1: or four percent yield, depending upon the maturity they're willing

374
00:22:02,000 --> 00:22:05,400
Speaker 1: to take on. Uh, that is something that is one

375
00:22:05,400 --> 00:22:08,280
Speaker 1: of the best opportunities in twenty years. Very good. Are

376
00:22:08,320 --> 00:22:10,080
Speaker 1: you like in teaching, Abby? I mean this is a

377
00:22:10,080 --> 00:22:12,960
Speaker 1: whole different act for you. You you you're surviving Colombia.

378
00:22:13,000 --> 00:22:16,280
Speaker 1: Do you throw chalk at people? I do not throw

379
00:22:16,400 --> 00:22:22,080
Speaker 1: chalk because we use white boards. So anything. Um, so

380
00:22:22,200 --> 00:22:24,879
Speaker 1: I'm I'm I'm loving it, tom it's it's a great

381
00:22:24,880 --> 00:22:29,040
Speaker 1: opportunity for me to be involved in the next generation. Wonderful,

382
00:22:29,080 --> 00:22:31,800
Speaker 1: you look Tannon rested. Thank you so much, Abby. Joseph Cohen,

383
00:22:32,080 --> 00:22:46,399
Speaker 1: Professor at Columbia Business School. This is a week of well,

384
00:22:46,440 --> 00:22:49,720
Speaker 1: at least a traffic at midtown Manhattan. How about that

385
00:22:49,880 --> 00:22:53,879
Speaker 1: traffic that we all see, with thousands descending for the

386
00:22:54,000 --> 00:22:59,920
Speaker 1: United Nations General Assembly meetings? And much more, far more important,

387
00:23:00,160 --> 00:23:03,040
Speaker 1: there's a migration in October to the meetings of the

388
00:23:03,080 --> 00:23:07,120
Speaker 1: International Monetary Fund in Washington. Someone who knows the schedule

389
00:23:07,560 --> 00:23:11,600
Speaker 1: is Sergey Nikolacheck, deputy governor of the National Bank of Ukraine,

390
00:23:11,640 --> 00:23:15,760
Speaker 1: and we're honored if you join us today amid a terrible,

391
00:23:15,920 --> 00:23:19,720
Speaker 1: terrible war. I need to go first of all to

392
00:23:19,840 --> 00:23:23,720
Speaker 1: a simple anecdote of your Kiev. You're educated in Kiev.

393
00:23:23,880 --> 00:23:28,639
Speaker 1: You've seen the transformation over twenty years. How does Kiev

394
00:23:28,800 --> 00:23:31,879
Speaker 1: recover back to what you knew when you were younger?

395
00:23:32,119 --> 00:23:36,320
Speaker 1: How do how do you see that happening? Actually, kieve

396
00:23:36,440 --> 00:23:40,760
Speaker 1: changed dramatically for the last twenty years before the war.

397
00:23:40,880 --> 00:23:46,280
Speaker 1: It looked like normal European city, capital of the European country,

398
00:23:46,359 --> 00:23:50,960
Speaker 1: so you may he you was able to enjoy the restaurants, clubs,

399
00:23:51,200 --> 00:23:56,680
Speaker 1: uh shopping malls and so on. Definitely a change, changed

400
00:23:56,760 --> 00:23:59,720
Speaker 1: to real sizeable since the beginning of the war. So

401
00:24:00,040 --> 00:24:05,280
Speaker 1: Gi was completely empty in March April. So nowadays the

402
00:24:05,359 --> 00:24:09,919
Speaker 1: life is recovering, coming back, coming back. But still you feel,

403
00:24:10,080 --> 00:24:12,720
Speaker 1: do you feel the consequences of the war on a

404
00:24:13,400 --> 00:24:17,560
Speaker 1: on each step Gore gave of the International Monetary Fund

405
00:24:17,600 --> 00:24:22,359
Speaker 1: has a few distractions away from your war. What is

406
00:24:22,400 --> 00:24:26,840
Speaker 1: your unique message to the International Monetary Fund as you

407
00:24:26,920 --> 00:24:30,399
Speaker 1: cry for help? What is the distinction, you say, versus

408
00:24:30,560 --> 00:24:35,320
Speaker 1: all the other headaches they have around the world? Definitely

409
00:24:35,440 --> 00:24:38,960
Speaker 1: Ukraine needs their support from the International Monetary Fund. So

410
00:24:39,080 --> 00:24:43,080
Speaker 1: we are very grateful for the International Monetary Fund for

411
00:24:43,119 --> 00:24:46,800
Speaker 1: providing US one point four billion dollars under the Rifi

412
00:24:46,960 --> 00:24:50,760
Speaker 1: at the beginning of the war, but so far we

413
00:24:50,960 --> 00:24:54,040
Speaker 1: need more and we are ready to engage into the

414
00:24:54,800 --> 00:25:01,119
Speaker 1: full fledged program so in uh, mainly. So, mainly we

415
00:25:01,280 --> 00:25:05,639
Speaker 1: focus our efforts in order to launch the e FF

416
00:25:05,880 --> 00:25:09,520
Speaker 1: program of the large scale, and the authorities are fully

417
00:25:09,560 --> 00:25:13,840
Speaker 1: functional and ready to negotiate and to discuss the policies

418
00:25:14,640 --> 00:25:19,520
Speaker 1: for in order to uh to launch such problem. Sergey,

419
00:25:19,560 --> 00:25:21,800
Speaker 1: we've been talking a lot about central bank great decisions

420
00:25:21,880 --> 00:25:24,280
Speaker 1: over the past week and we've gotten a lot of

421
00:25:24,320 --> 00:25:27,760
Speaker 1: them in the past twenty four hours. You recently kept

422
00:25:27,840 --> 00:25:31,400
Speaker 1: the rate unchanged. How do we even have monetary policy

423
00:25:31,440 --> 00:25:34,840
Speaker 1: and try to keep a normal sense of monetary transmission

424
00:25:34,840 --> 00:25:36,720
Speaker 1: in the face of a war, in the face of

425
00:25:37,240 --> 00:25:41,119
Speaker 1: such incredible disruption and day to day commerce that it

426
00:25:41,160 --> 00:25:45,760
Speaker 1: becomes sort of not really a main feature? Yeah, definitely.

427
00:25:45,840 --> 00:25:49,320
Speaker 1: Our approach to the monetary policy change dramatically. Stance at

428
00:25:49,320 --> 00:25:52,720
Speaker 1: the beginning of the war. Before the war, were relied

429
00:25:52,760 --> 00:25:56,000
Speaker 1: on the inflation targeting framework, very similar to many other

430
00:25:56,160 --> 00:25:59,479
Speaker 1: central banks all around the world, but at the beginning

431
00:25:59,520 --> 00:26:04,480
Speaker 1: of the war. Are we UH. We moved to another setup.

432
00:26:04,560 --> 00:26:09,159
Speaker 1: We started to rely heavily on the stability of the

433
00:26:09,320 --> 00:26:14,040
Speaker 1: change rate. Uh, we supported our actions on a fixed

434
00:26:14,080 --> 00:26:19,120
Speaker 1: market with a tough capital controls. And after some period

435
00:26:19,440 --> 00:26:24,480
Speaker 1: of UH adjustment. So when we keep capt the interest

436
00:26:24,600 --> 00:26:28,520
Speaker 1: rate stable at ten percent, in early June, so we

437
00:26:28,640 --> 00:26:33,440
Speaker 1: raised it to twenty five in order to help ourselves

438
00:26:33,520 --> 00:26:38,600
Speaker 1: to uh, to maintain the stability of the exchange rate.

439
00:26:39,200 --> 00:26:45,040
Speaker 1: And UH, UM, last two H, our last two monitory decisions,

440
00:26:45,160 --> 00:26:47,960
Speaker 1: we are to keep this interest rate at twenty five

441
00:26:48,760 --> 00:26:52,160
Speaker 1: at the same time. So, as you rightly man mentioned,

442
00:26:52,480 --> 00:26:56,000
Speaker 1: so we struggled to improve the monitory transmission, which was

443
00:26:56,000 --> 00:27:00,080
Speaker 1: not perfect before the war, and definitely it's uh, it

444
00:27:00,119 --> 00:27:03,679
Speaker 1: is even worse since the beginning of the war. But

445
00:27:04,000 --> 00:27:08,760
Speaker 1: so how we see that? Our decisions, so they are translates.

446
00:27:09,320 --> 00:27:12,640
Speaker 1: They translate into the banking rates more or less, uh,

447
00:27:12,720 --> 00:27:17,440
Speaker 1: as we expected, and we hope that title monetary conditions

448
00:27:17,520 --> 00:27:20,960
Speaker 1: will help us to maintain the stable change rate. What

449
00:27:21,000 --> 00:27:22,879
Speaker 1: will it take on the physical side? And you're talking

450
00:27:22,920 --> 00:27:24,639
Speaker 1: about the I M F aid and how much you

451
00:27:24,720 --> 00:27:27,480
Speaker 1: might potentially need. How much would you need? How long

452
00:27:27,520 --> 00:27:30,639
Speaker 1: would it take overall to rebuild the economy in a

453
00:27:30,680 --> 00:27:32,760
Speaker 1: way where you could go back to something more akin

454
00:27:33,240 --> 00:27:36,679
Speaker 1: to normalcy. Okay, so, frankly speaking, the losses from the

455
00:27:36,720 --> 00:27:42,400
Speaker 1: world tremendous. So that relates both to the current situation,

456
00:27:42,440 --> 00:27:45,439
Speaker 1: when we have a huge budget gap which we have

457
00:27:46,040 --> 00:27:49,800
Speaker 1: to help to finance from the Central Bank site, and

458
00:27:49,920 --> 00:27:54,280
Speaker 1: actually this year we already provided uh more than ten

459
00:27:54,320 --> 00:27:57,159
Speaker 1: billion dollars to to to the to the government, in

460
00:27:57,280 --> 00:28:01,720
Speaker 1: order to support the essential needs, financial, the essential needs

461
00:28:01,800 --> 00:28:06,639
Speaker 1: and at the same time, at the same time, that

462
00:28:06,960 --> 00:28:10,000
Speaker 1: puts a sizeable pressure polytics market. Here you were, you

463
00:28:10,040 --> 00:28:12,159
Speaker 1: were running out of time here, governor, and so I've

464
00:28:12,200 --> 00:28:14,359
Speaker 1: got to keep this short and abruptly and being rude

465
00:28:14,359 --> 00:28:18,280
Speaker 1: and doing that. Ukraine has had a courageous two weeks.

466
00:28:18,359 --> 00:28:21,720
Speaker 1: The news flow has been extraordinarily good at the military front.

467
00:28:22,240 --> 00:28:24,480
Speaker 1: What do you need from the allies right now? What

468
00:28:24,560 --> 00:28:28,080
Speaker 1: do you need from Mr Biden in the West right now?

469
00:28:28,800 --> 00:28:31,359
Speaker 1: Definitely we need the continuation of the support of both

470
00:28:31,359 --> 00:28:35,720
Speaker 1: on military front and also an also continuation of financial

471
00:28:35,840 --> 00:28:39,640
Speaker 1: eight so we prove to the whole world that we

472
00:28:39,720 --> 00:28:45,200
Speaker 1: have we may us, we may we may win, and

473
00:28:45,520 --> 00:28:48,200
Speaker 1: we hope that with a continuation of the support from

474
00:28:48,240 --> 00:28:51,960
Speaker 1: the democratic world, we will achieve the Victorias as soon

475
00:28:52,000 --> 00:28:54,840
Speaker 1: as possible. Thank you so much for joining US Bloomberg today.

476
00:28:54,880 --> 00:28:58,240
Speaker 1: Seray Nikolai check of the National Bank of Ukraine here

477
00:28:58,600 --> 00:29:01,760
Speaker 1: among this week of this UN United Nations. Really an

478
00:29:01,760 --> 00:29:05,320
Speaker 1: extraordinary set of meetings. Lisa, I'M gonna call it post pandemic.

479
00:29:05,840 --> 00:29:09,600
Speaker 1: This is the Bloomberg surveillance podcast. Thanks for listening. Join

480
00:29:09,720 --> 00:29:13,040
Speaker 1: US live weekdays from seven to ten am eastern on

481
00:29:13,160 --> 00:29:17,400
Speaker 1: Bloomberg radio and on Bloomberg television each day from six

482
00:29:17,520 --> 00:29:21,800
Speaker 1: to nine am for insight from the best in economics, finance,

483
00:29:21,840 --> 00:29:27,160
Speaker 1: investment and international relations, and subscribe to the surveillance podcast

484
00:29:27,440 --> 00:29:31,080
Speaker 1: on apple podcast, soundcloud, Bloomberg Dot Com and, of course,

485
00:29:31,400 --> 00:29:35,680
Speaker 1: on the terminal. I'm Tom Keene and this is Bloomberg