1 00:00:03,360 --> 00:00:06,400 Speaker 1: This is Bloomberg Surveibans. We think we're heading into an 2 00:00:06,440 --> 00:00:09,000 Speaker 1: eighties and nineties type environment where it's a Warren Buffett 3 00:00:09,039 --> 00:00:11,680 Speaker 1: slash Peter Lynch type world where you buy good companies 4 00:00:11,720 --> 00:00:13,480 Speaker 1: and you stick with them. We live in a world 5 00:00:13,560 --> 00:00:16,360 Speaker 1: which is more more witless in tangibles are such an 6 00:00:16,360 --> 00:00:18,800 Speaker 1: important part of the economy. I think it's pretty clear 7 00:00:18,920 --> 00:00:21,680 Speaker 1: that if you only looked at the economic data and 8 00:00:21,720 --> 00:00:24,000 Speaker 1: not at the market, the FED would be raging. Radis 9 00:00:24,079 --> 00:00:27,480 Speaker 1: to hen March Bloomberg Surveillance your link to the world 10 00:00:27,520 --> 00:00:32,159 Speaker 1: of economics, finance, and investment on Bloomberg Radio. Good morning everyone, 11 00:00:32,240 --> 00:00:35,800 Speaker 1: Michael McKee and Tom Keene worldwide Bloomberg Surveillance. Who welcome 12 00:00:35,840 --> 00:00:39,040 Speaker 1: all of you on Bloomberg Radio. Plus. I'm Bloomberg's thrilled 13 00:00:39,120 --> 00:00:42,680 Speaker 1: that you listen on iTunes. Are podcasts that are out there. 14 00:00:42,840 --> 00:00:46,000 Speaker 1: Bloomberg twelve Boston, Bloomberg eleven three on New York, down 15 00:00:46,040 --> 00:00:50,320 Speaker 1: to Washington FM and Good Morning, Good early morning on 16 00:00:50,320 --> 00:00:53,240 Speaker 1: the West Coast and across Sirious and next M channel 17 00:00:53,280 --> 00:00:56,240 Speaker 1: one nineteen in Bloomberg nine sixty the Bay Area. In 18 00:00:56,240 --> 00:01:00,240 Speaker 1: this uh half hour, in this hour, I think I 19 00:01:00,240 --> 00:01:01,720 Speaker 1: can say it is the beach read of the year 20 00:01:01,840 --> 00:01:04,560 Speaker 1: for thinking people. Jeff Garden to join us from his 21 00:01:04,680 --> 00:01:07,640 Speaker 1: Yale University and we'll talk about what we don't know 22 00:01:07,680 --> 00:01:10,680 Speaker 1: about globalization and what we need to know as well. 23 00:01:10,760 --> 00:01:15,360 Speaker 1: Bloomberg Surveillance Watch You by Cone Resnec Accounting Tax Advisory 24 00:01:15,480 --> 00:01:19,639 Speaker 1: just sees opportunities in commercial real estate. Your businesses market 25 00:01:19,640 --> 00:01:23,280 Speaker 1: focused guidance from the industry leading experts at Cone Resnick. 26 00:01:23,720 --> 00:01:29,240 Speaker 1: Find out how a Cone dot Com Michael you okay 27 00:01:29,360 --> 00:01:34,800 Speaker 1: over there, Peyton Manning retiring, You're gonna survive. We're We're glad, 28 00:01:34,920 --> 00:01:38,760 Speaker 1: He gets out while getting good. Dean Garden Michaels sedated 29 00:01:38,800 --> 00:01:41,800 Speaker 1: after rooting for the Bloomberg the Denver Broncos called the 30 00:01:41,800 --> 00:01:45,640 Speaker 1: Bloomberg Broncos as well. Um From Silk to Silicon Jeffrey 31 00:01:45,640 --> 00:01:48,920 Speaker 1: Garten The Story of Globalization through ten Extraordinary Life. I 32 00:01:48,960 --> 00:01:50,800 Speaker 1: want to get to the book, but first I have 33 00:01:50,920 --> 00:01:54,440 Speaker 1: to talk about this political process and the discourse you 34 00:01:54,560 --> 00:01:57,200 Speaker 1: teach with Steve roachump at l Roach gives out seas, 35 00:01:57,400 --> 00:01:59,200 Speaker 1: you give out a's we know how the dance goes, 36 00:01:59,840 --> 00:02:02,360 Speaker 1: and and when you talk about Wall Street in Washington. 37 00:02:02,560 --> 00:02:05,160 Speaker 1: I go back to him sitting with a son of 38 00:02:05,560 --> 00:02:11,120 Speaker 1: arguably the most decorated military officer of America in the 39 00:02:11,200 --> 00:02:15,000 Speaker 1: last century. Your father, who fought in three wars World 40 00:02:15,000 --> 00:02:17,359 Speaker 1: War Two, he was at pork Uh pork Chop Hill 41 00:02:17,440 --> 00:02:20,920 Speaker 1: in Korea, he was in Vietnam as well, your head 42 00:02:20,960 --> 00:02:23,800 Speaker 1: must be forget about the politics. Your head must be 43 00:02:24,080 --> 00:02:29,160 Speaker 1: spinning at the discourse that your father served in three wars. 44 00:02:29,200 --> 00:02:31,760 Speaker 1: To get us to this point, well, you know, my 45 00:02:31,800 --> 00:02:35,160 Speaker 1: father died a couple of months ago, and he died 46 00:02:35,200 --> 00:02:37,440 Speaker 1: in in his sleep, which I was grateful for, and 47 00:02:37,480 --> 00:02:39,919 Speaker 1: I'm I'm glad he died when he did. I think 48 00:02:39,960 --> 00:02:43,919 Speaker 1: if he will were watching the primaries now, Um, he 49 00:02:44,720 --> 00:02:49,720 Speaker 1: burst a coronary because you know, he and and and 50 00:02:49,720 --> 00:02:54,720 Speaker 1: and his comrades, they fought for in America that is 51 00:02:54,760 --> 00:02:57,160 Speaker 1: a lot different than the one that is being discussed. 52 00:02:57,840 --> 00:03:00,720 Speaker 1: They fought for a country that was a leader on 53 00:03:00,760 --> 00:03:03,919 Speaker 1: the global stage. They fought for a country in which 54 00:03:04,520 --> 00:03:09,040 Speaker 1: UM immigrants came in and had upward mobility. I mean, 55 00:03:09,560 --> 00:03:11,639 Speaker 1: I don't know about you, but you know I'm the 56 00:03:11,800 --> 00:03:17,120 Speaker 1: third generation. My father was second generation, my wife's parents 57 00:03:17,160 --> 00:03:21,040 Speaker 1: were second generation. Our grandparents all came from somewhere else, 58 00:03:21,720 --> 00:03:25,240 Speaker 1: and UM that's what that's what this country stood for. 59 00:03:25,360 --> 00:03:28,280 Speaker 1: And those wars were fought to defend a way of 60 00:03:28,360 --> 00:03:32,280 Speaker 1: life that was an open that was an open society 61 00:03:32,440 --> 00:03:35,720 Speaker 1: that basically said to the rest of the world, UM, 62 00:03:35,800 --> 00:03:38,240 Speaker 1: we can take you and we can do some great things. 63 00:03:39,000 --> 00:03:41,960 Speaker 1: But that's not the discourse that that exists. Now we 64 00:03:42,200 --> 00:03:43,840 Speaker 1: gotta get to your book, but I gotta follow up 65 00:03:44,000 --> 00:03:47,160 Speaker 1: and ask how did that change change? How did we 66 00:03:47,200 --> 00:03:51,040 Speaker 1: get to a country where people are so afraid of 67 00:03:51,120 --> 00:03:55,040 Speaker 1: the rest of the world. I think we dropped. I 68 00:03:55,080 --> 00:03:58,600 Speaker 1: think we became very complacent. That is for if you 69 00:03:58,640 --> 00:04:00,400 Speaker 1: look at the end of the Second War, World War 70 00:04:00,680 --> 00:04:06,240 Speaker 1: and when my father came back from the Pacific, UM, 71 00:04:06,280 --> 00:04:09,080 Speaker 1: there was no country in the world that can challenge us. 72 00:04:09,800 --> 00:04:13,720 Speaker 1: We basically created and Tom alluded to this, before you 73 00:04:13,720 --> 00:04:17,760 Speaker 1: know a world. We created the rules. It was an 74 00:04:17,800 --> 00:04:22,360 Speaker 1: open global economy. It was open to our companies, which 75 00:04:22,400 --> 00:04:25,480 Speaker 1: were the most powerful in the world. UM. We had 76 00:04:25,520 --> 00:04:28,920 Speaker 1: the best education system, we had the best technology, and 77 00:04:28,960 --> 00:04:32,680 Speaker 1: so we could flourish in that global economy for a 78 00:04:32,720 --> 00:04:37,920 Speaker 1: long time. But somewhere around the nineties, UM, a lot 79 00:04:37,960 --> 00:04:41,240 Speaker 1: of other countries began to catch up, and we were 80 00:04:41,279 --> 00:04:44,880 Speaker 1: asleep at the switch. And I think now what we're 81 00:04:44,920 --> 00:04:48,080 Speaker 1: realizing is that we have a lot of work to 82 00:04:48,120 --> 00:04:52,840 Speaker 1: do internally in order to continue to flourish, in order 83 00:04:52,880 --> 00:04:55,479 Speaker 1: for most of our people to continue to flourish in 84 00:04:55,480 --> 00:04:58,360 Speaker 1: this global economy. And that's what we have to do 85 00:04:58,839 --> 00:05:02,640 Speaker 1: rather than close is down. We were just speaking with 86 00:05:02,920 --> 00:05:06,320 Speaker 1: Admiral James dadis from the Tough School, and he said, 87 00:05:06,520 --> 00:05:08,920 Speaker 1: one of the most important things for new president coming 88 00:05:08,960 --> 00:05:11,960 Speaker 1: off is to have good advice, good people around him. 89 00:05:12,000 --> 00:05:15,320 Speaker 1: What advice would you give the next president to whomever 90 00:05:15,400 --> 00:05:18,000 Speaker 1: he or she is. What's the most important thing they 91 00:05:18,040 --> 00:05:21,880 Speaker 1: need to do to change that? Well, I think if 92 00:05:21,880 --> 00:05:24,599 Speaker 1: I had to put my finger on the single biggest thing, 93 00:05:25,279 --> 00:05:29,520 Speaker 1: it's the workforce. If we have if everybody is employed 94 00:05:30,040 --> 00:05:32,680 Speaker 1: in decent jobs, I think many of the issues that 95 00:05:32,760 --> 00:05:35,440 Speaker 1: we're concerned about, we'll go away. Okay, we're getting to 96 00:05:35,520 --> 00:05:39,160 Speaker 1: your book now. In terms of the workforce, globalization has 97 00:05:39,240 --> 00:05:44,400 Speaker 1: affected the workforce in profound ways, and it's not as 98 00:05:44,440 --> 00:05:47,039 Speaker 1: easy as saying we just want to, you know, get 99 00:05:47,040 --> 00:05:49,920 Speaker 1: everybody into good jobs. That just doesn't happen. No, that's right, 100 00:05:50,120 --> 00:05:52,880 Speaker 1: And but the thing is, the jobs of the future 101 00:05:53,000 --> 00:05:56,200 Speaker 1: are not the jobs of the nineteen seventies of the 102 00:05:56,279 --> 00:06:01,520 Speaker 1: nineteen eighties, and we need an internal system that is 103 00:06:01,680 --> 00:06:05,440 Speaker 1: going to be able to prepare more and more people 104 00:06:06,200 --> 00:06:08,400 Speaker 1: for these new jobs, whatever they are. I don't think 105 00:06:08,440 --> 00:06:12,120 Speaker 1: we can know exactly what they'll be, but we need 106 00:06:12,120 --> 00:06:16,120 Speaker 1: an education system that is far more effective. We need 107 00:06:16,880 --> 00:06:20,400 Speaker 1: the most modern kind of infrastructure so the economy is 108 00:06:20,839 --> 00:06:25,040 Speaker 1: more um um competitive, and that itself will also generate 109 00:06:25,080 --> 00:06:28,560 Speaker 1: lots of jobs um And I think we need a 110 00:06:29,000 --> 00:06:34,159 Speaker 1: kind of social safety net that allows people to be 111 00:06:34,279 --> 00:06:37,080 Speaker 1: unemployed for a while while they're training for something else 112 00:06:37,640 --> 00:06:40,200 Speaker 1: and not fall all the way down the rabbit hole 113 00:06:40,800 --> 00:06:43,719 Speaker 1: if you're just joining us. Jeffrey Garten serving with Nixon, Ford, 114 00:06:43,760 --> 00:06:46,919 Speaker 1: Carter Clinton, and also serving in who have in Connecticut 115 00:06:47,040 --> 00:06:49,280 Speaker 1: for decades. The book is from Silk to Silicon, a 116 00:06:49,360 --> 00:06:54,560 Speaker 1: story of globalization through ten extraordinary lives. Everyone yearns for 117 00:06:54,640 --> 00:06:59,160 Speaker 1: technological progress. It will provide investment that will put American 118 00:06:59,279 --> 00:07:02,000 Speaker 1: jobs for work. We did that with the underwater cable. 119 00:07:02,080 --> 00:07:06,320 Speaker 1: My most enjoyable chapter of your book is linking the 120 00:07:06,360 --> 00:07:09,320 Speaker 1: old World to the New World. Cyrus Field did that 121 00:07:09,480 --> 00:07:11,920 Speaker 1: a zillion years ago, and we know it created a 122 00:07:12,000 --> 00:07:15,880 Speaker 1: lot of jobs. You got Indigo grow of Intel later on. 123 00:07:15,960 --> 00:07:18,640 Speaker 1: I believe he created a lot of jobs. Why can't 124 00:07:18,680 --> 00:07:22,800 Speaker 1: we reduc that in your eleventh, twelve or thirteen person 125 00:07:22,840 --> 00:07:25,480 Speaker 1: you would write about in five years? Well, I think 126 00:07:25,520 --> 00:07:27,440 Speaker 1: we can. But let me just drop back and say, 127 00:07:27,480 --> 00:07:29,960 Speaker 1: what I tried to do in the book was to 128 00:07:30,080 --> 00:07:33,240 Speaker 1: talk about globalization in a way that people could better 129 00:07:33,320 --> 00:07:36,960 Speaker 1: understand and relate to. So rather than talk about big trends, 130 00:07:37,040 --> 00:07:41,160 Speaker 1: I talked about people who did something really They did 131 00:07:41,200 --> 00:07:45,400 Speaker 1: something really spectacular, and they changed their world. And they 132 00:07:46,280 --> 00:07:48,120 Speaker 1: not they not only changed the world they lived in, 133 00:07:48,200 --> 00:07:51,360 Speaker 1: but the impact was so great they continue to change 134 00:07:51,400 --> 00:07:53,080 Speaker 1: our So let me let me comment on the two 135 00:07:53,080 --> 00:07:57,920 Speaker 1: people use and I think you're absolutely right that major 136 00:07:58,000 --> 00:08:03,280 Speaker 1: breakthroughs can create all kinds of jobs that are future oriented. 137 00:08:04,000 --> 00:08:07,760 Speaker 1: So one of these chapters is about cyrus Field, who 138 00:08:08,000 --> 00:08:12,360 Speaker 1: UM lived in the mid eighteen hundreds, and he's the 139 00:08:12,400 --> 00:08:16,560 Speaker 1: guy who built the Transatlantic cable. UM to tell you 140 00:08:16,600 --> 00:08:21,880 Speaker 1: how monumental that was. UM on the day before that 141 00:08:22,040 --> 00:08:26,360 Speaker 1: cable was absolutely it was was constructed and was concluded 142 00:08:27,000 --> 00:08:30,600 Speaker 1: when when it it linked Europe and the US. On 143 00:08:30,680 --> 00:08:35,360 Speaker 1: the day before, news traveled across the Atlantic no faster 144 00:08:35,920 --> 00:08:39,360 Speaker 1: than it had for four thousand years that it was 145 00:08:39,559 --> 00:08:42,360 Speaker 1: it is. It was a question of the wind on 146 00:08:42,360 --> 00:08:48,400 Speaker 1: one minute. When that cable was actually joined, we had 147 00:08:48,440 --> 00:08:52,079 Speaker 1: real time communication between the US and Europe, and within 148 00:08:52,160 --> 00:08:55,240 Speaker 1: two or three years after that, the entire world was wired. 149 00:08:55,760 --> 00:08:59,560 Speaker 1: Think of think of the discontinuity. In fact, the Transatlantic 150 00:08:59,600 --> 00:09:04,720 Speaker 1: cable was a far bigger advance and civilization than the Internet, 151 00:09:05,160 --> 00:09:08,240 Speaker 1: because when the Internet came along, we already could look 152 00:09:08,240 --> 00:09:11,000 Speaker 1: at our TVs and see uh, you know, we could 153 00:09:11,040 --> 00:09:18,400 Speaker 1: see Vietnam real time. So um, the incremental advance of 154 00:09:18,440 --> 00:09:22,400 Speaker 1: the Internet was far less than going from zero to 155 00:09:22,520 --> 00:09:25,840 Speaker 1: real time. Les Robert Gordon's point in his in his 156 00:09:25,920 --> 00:09:30,200 Speaker 1: book that the big advances have been done and now 157 00:09:30,240 --> 00:09:33,720 Speaker 1: it's incremental change. Well let's let's let's come back to that. 158 00:09:33,760 --> 00:09:35,920 Speaker 1: But I just, um, I want to I want to 159 00:09:35,920 --> 00:09:41,080 Speaker 1: reinforce Tom's point, which is that Transatlantic cable was the 160 00:09:41,080 --> 00:09:45,640 Speaker 1: forerunner of the radio, of the telephone, of the and 161 00:09:46,080 --> 00:09:51,680 Speaker 1: of the Internet, and so it was a huge job changer. 162 00:09:52,360 --> 00:09:55,840 Speaker 1: I mean, it basically put the United States into a 163 00:09:55,880 --> 00:10:00,560 Speaker 1: totally different era of global communications. And you think about 164 00:10:00,559 --> 00:10:03,480 Speaker 1: the jobs that were created with all the new cables 165 00:10:03,520 --> 00:10:06,439 Speaker 1: that were you know, being liked and all the equipment 166 00:10:06,440 --> 00:10:09,240 Speaker 1: that wait with it, but not only that, all the 167 00:10:09,320 --> 00:10:13,720 Speaker 1: business that took place that couldn't place before. Well, we 168 00:10:13,760 --> 00:10:16,200 Speaker 1: have to come back. Jeffrey Garden with US of Yale 169 00:10:16,240 --> 00:10:18,679 Speaker 1: University has a wonderful new book, From Soak to Silicon. 170 00:10:19,200 --> 00:10:21,760 Speaker 1: Mike wants to follow up. I know where the important 171 00:10:22,080 --> 00:10:25,040 Speaker 1: thought is, Well, we will do that. From Soak to Silicon, 172 00:10:25,160 --> 00:10:29,319 Speaker 1: The Story of Globalizations or ten Extraordinary Lives Futures of 173 00:10:29,360 --> 00:10:32,719 Speaker 1: negative seven down futures, negative assuring to the market. You 174 00:10:32,760 --> 00:10:36,199 Speaker 1: see that the Monday after Job today. Coming up Jeffrey Garden, 175 00:10:36,240 --> 00:10:38,800 Speaker 1: and we'll talk to him about Andrew Grove. We'll talk 176 00:10:38,840 --> 00:10:40,360 Speaker 1: to him about some of the other names of Michael 177 00:10:40,400 --> 00:10:43,200 Speaker 1: McKee I know, and some thoughts as well. Also Jeffrey 178 00:10:43,200 --> 00:10:48,720 Speaker 1: Garden on the potato bosel for TATA, talk about that 179 00:10:48,760 --> 00:10:54,000 Speaker 1: as well. First, I check in with Michael Barr. We 180 00:10:54,040 --> 00:10:56,520 Speaker 1: want to get the latest World of National headlines. Blank, Tom, 181 00:10:56,520 --> 00:10:59,040 Speaker 1: thank you very much. Vice President Joe Biden told American 182 00:10:59,080 --> 00:11:02,080 Speaker 1: troops and the United Arab Emirates the US will wipe 183 00:11:02,080 --> 00:11:05,840 Speaker 1: out Islamic state militants in Iraq and Syria. Biden is 184 00:11:05,880 --> 00:11:08,920 Speaker 1: on the Middle East trip. Biden also told the troops 185 00:11:08,960 --> 00:11:12,040 Speaker 1: the US has carried out eighteen hundred air strikes against 186 00:11:12,040 --> 00:11:16,440 Speaker 1: ISIS since October. The verbal battle between Hillary Clinton and 187 00:11:16,600 --> 00:11:19,920 Speaker 1: Bernie Sanders took a more pointed turn at last night's 188 00:11:19,960 --> 00:11:24,440 Speaker 1: Democratic presidential debate in Flint, Michigan. Clinton accused Sanders of 189 00:11:24,480 --> 00:11:27,760 Speaker 1: turning his back on the auto industry. Sanders said Clinton's 190 00:11:27,760 --> 00:11:32,480 Speaker 1: friends on Wall Street destroyed this economy. Republican presidential candidate 191 00:11:32,520 --> 00:11:35,559 Speaker 1: Donald Trump says Nancy Reagan, the wife of a truly 192 00:11:35,600 --> 00:11:38,560 Speaker 1: great president, was an amazing woman. She will be missed. 193 00:11:38,880 --> 00:11:41,920 Speaker 1: Nancy Reagan died yesterday in Los Angeles at age ninety four. 194 00:11:42,200 --> 00:11:45,200 Speaker 1: Global News twenty four hours a day, powered by our 195 00:11:45,320 --> 00:11:48,480 Speaker 1: twenty four hundred journalists and more than a hundred fifty 196 00:11:48,480 --> 00:11:51,240 Speaker 1: news bureaus from around the world. Michael Blarn, Mike Tom 197 00:11:51,400 --> 00:11:54,120 Speaker 1: and macn thanks so much. Yields elevated off the jobs 198 00:11:54,120 --> 00:11:56,800 Speaker 1: report on Friday, the tenure year of one point nine 199 00:11:57,200 --> 00:12:00,760 Speaker 1: zero percent with Jeoffrey Garden from Silk to Silver com 200 00:12:00,760 --> 00:12:07,520 Speaker 1: Bloomberg Surveillance. The news update brought to you by Flushing 201 00:12:07,520 --> 00:12:10,000 Speaker 1: Bank open a complete business checking account with fifteen thousand 202 00:12:10,040 --> 00:12:12,800 Speaker 1: dollars or more and get a free sixteen gig WiFi tablet. 203 00:12:12,880 --> 00:12:15,199 Speaker 1: Visit flushing Bag dot com for details. Remember f D 204 00:12:15,280 --> 00:12:24,120 Speaker 1: I C Equal Housing, London Global business news twenty four 205 00:12:24,160 --> 00:12:27,280 Speaker 1: hours a day. It's Bloomberg dot Com, the Radio plus 206 00:12:27,320 --> 00:12:30,480 Speaker 1: Mobile Act and on your radio, this is a Bloomberg 207 00:12:30,520 --> 00:12:34,360 Speaker 1: Business Flash and I'm Karen Moscow a US stock index 208 00:12:34,440 --> 00:12:37,240 Speaker 1: futures are lower. Let's go to the first Word breaking 209 00:12:37,240 --> 00:12:40,000 Speaker 1: news desk for today's morning call. And here's Bill Maloney. 210 00:12:40,040 --> 00:12:42,959 Speaker 1: Good morning, Bill, Good morning Karen. That's right US. You 211 00:12:43,080 --> 00:12:46,439 Speaker 1: just remain under pressure today. Down futures lower by forty 212 00:12:46,480 --> 00:12:50,040 Speaker 1: two points, SP futures drop seven and NAZAC futures declined 213 00:12:50,080 --> 00:12:53,360 Speaker 1: by seventeen U S ten Uel at one point nine 214 00:12:53,480 --> 00:12:56,400 Speaker 1: per cent. Main up of markets are also trading lower. 215 00:12:56,760 --> 00:13:00,600 Speaker 1: Energy names, telcom and financials need to drop in deal 216 00:13:00,679 --> 00:13:02,840 Speaker 1: news b A s F said to be a valuing 217 00:13:02,920 --> 00:13:06,680 Speaker 1: rival takeover bid for DuPont Another news value to hold 218 00:13:06,679 --> 00:13:10,360 Speaker 1: call on March fifteenth on preliminary Q four and Dinan's 219 00:13:10,679 --> 00:13:14,240 Speaker 1: and sell X plunges fifty percent pre market after study 220 00:13:14,240 --> 00:13:17,360 Speaker 1: eating this endpoint. Finally, some of your key wallsheet upgrades 221 00:13:17,400 --> 00:13:20,440 Speaker 1: and downgrades Archer Daniels cut your neutral over at Bank 222 00:13:20,440 --> 00:13:23,320 Speaker 1: of America. Stratus has cut the underweight to JP Morgan, 223 00:13:23,720 --> 00:13:26,599 Speaker 1: Michael's cut the eagle weight at Morgan Stanley add no 224 00:13:26,679 --> 00:13:29,920 Speaker 1: more Micron cut to reduce and anger sol Rand raised 225 00:13:29,920 --> 00:13:32,960 Speaker 1: to buy Finally Win Resorts raised to buy versus neutral 226 00:13:33,040 --> 00:13:36,000 Speaker 1: over at ubs live on the first Breaking news desk 227 00:13:36,120 --> 00:13:39,079 Speaker 1: on Boumloney Karen thanks to Baible to hear live breaking 228 00:13:39,120 --> 00:13:42,000 Speaker 1: news over your Bloomberg type squawk and go on your terminal. 229 00:13:42,040 --> 00:13:45,240 Speaker 1: That's squ a w k go. That's a Bloomberg business flash. 230 00:13:45,320 --> 00:13:48,520 Speaker 1: Tom and Mike Karen, thanks so much, Bloomberg Surveillance Brunch 231 00:13:48,520 --> 00:13:52,240 Speaker 1: you by indesco. Have you considered all of your investment alternatives? 232 00:13:52,320 --> 00:13:56,200 Speaker 1: Non traditional asset classes and strategies may help you achieve 233 00:13:56,240 --> 00:14:01,520 Speaker 1: your goals? Find out more in investco dot COM's slash alternatives. 234 00:14:01,520 --> 00:14:03,760 Speaker 1: And Michael McKee and I were an esteem because Michael, 235 00:14:03,800 --> 00:14:06,679 Speaker 1: did you notice that Yale Hockey once again does it? 236 00:14:07,640 --> 00:14:10,800 Speaker 1: They host Dartmouth in the E C A C S 237 00:14:10,800 --> 00:14:15,400 Speaker 1: seven all ivy picks. They're just the powerhouse. Well we are. 238 00:14:15,440 --> 00:14:19,400 Speaker 1: Congratulations to them and no doubt all reading Jeff Carton's 239 00:14:19,440 --> 00:14:22,000 Speaker 1: new book. Yeah there, Well, you know it's funny. It's 240 00:14:22,000 --> 00:14:24,160 Speaker 1: gonna be seventy one degrees or so in the middle 241 00:14:24,200 --> 00:14:27,200 Speaker 1: of this week. So Tom is already in beach mode 242 00:14:27,320 --> 00:14:30,280 Speaker 1: and he's declared from Silk to Silicon. His beach reading 243 00:14:30,320 --> 00:14:33,240 Speaker 1: book of the Year, The Story of Globalization Through Ten 244 00:14:33,360 --> 00:14:36,680 Speaker 1: Extraordinary Lives, written by Jeffrey Garden. He is the Dean 245 00:14:36,760 --> 00:14:40,880 Speaker 1: emeritus of the Yale School of Management. We were talking 246 00:14:40,920 --> 00:14:46,080 Speaker 1: about how, uh, one person, through their efforts, can make 247 00:14:46,320 --> 00:14:52,320 Speaker 1: a major impact on history. You've got ten extraordinarily lives 248 00:14:52,320 --> 00:14:54,520 Speaker 1: in there, but these are lives that have been lived. 249 00:14:55,840 --> 00:14:59,560 Speaker 1: Whom do you see out there as someone who who 250 00:14:59,600 --> 00:15:04,800 Speaker 1: could be the next the next chapter is there is 251 00:15:04,840 --> 00:15:08,840 Speaker 1: there a person or a subject matter that you would 252 00:15:09,240 --> 00:15:14,200 Speaker 1: tout as perhaps the next big thing? Well, um, you know, 253 00:15:14,280 --> 00:15:16,400 Speaker 1: before I answer that, I just want to I just 254 00:15:16,440 --> 00:15:20,640 Speaker 1: want to re emphasize the criteria I used, because by 255 00:15:20,680 --> 00:15:24,080 Speaker 1: any account, there are lots of really extraordinary people who 256 00:15:24,160 --> 00:15:28,560 Speaker 1: are doing extraordinary things. The ten that I picked had 257 00:15:28,600 --> 00:15:32,040 Speaker 1: a big idea, but they also were the ones who 258 00:15:32,280 --> 00:15:36,600 Speaker 1: executed the idea, So that really limits the That limits 259 00:15:36,640 --> 00:15:40,000 Speaker 1: the pool. I mean, there's been many big thinkers, but 260 00:15:40,080 --> 00:15:43,640 Speaker 1: to be a thinker and a doer on an extraordinary scale. 261 00:15:44,800 --> 00:15:48,160 Speaker 1: That that puts you in a much more rarefied environment. 262 00:15:48,360 --> 00:15:51,520 Speaker 1: And the second kind of criteria I had is that 263 00:15:51,600 --> 00:15:57,080 Speaker 1: what these guys did kicked off an entirely new age. 264 00:15:58,040 --> 00:16:01,480 Speaker 1: So for example, I write about my first character, Genghis Khan, 265 00:16:02,120 --> 00:16:06,000 Speaker 1: he really kicked off an age of global empire. Or 266 00:16:06,040 --> 00:16:10,080 Speaker 1: I write about um Cyrus Field, and he kicked off 267 00:16:10,080 --> 00:16:13,480 Speaker 1: an age of global communication, you know. And I write 268 00:16:13,480 --> 00:16:19,040 Speaker 1: about John Rockefeller, who kicked off an age of industrialization. UM. 269 00:16:19,080 --> 00:16:22,720 Speaker 1: If I use those categories is very very hard for 270 00:16:22,760 --> 00:16:26,840 Speaker 1: me to I think for anyone to identify someone now, 271 00:16:27,760 --> 00:16:32,680 Speaker 1: um you know, the the usual suspects. Let's say Jeff 272 00:16:32,760 --> 00:16:37,280 Speaker 1: Bezos you know, or or maybe um you know Steve 273 00:16:37,360 --> 00:16:42,600 Speaker 1: Jobs or maybe um uh Elon Musk. I don't know 274 00:16:42,640 --> 00:16:46,240 Speaker 1: that they're kicking off new ages. Now. The person who 275 00:16:46,320 --> 00:16:48,600 Speaker 1: kicked off the new age in my book, the one 276 00:16:48,640 --> 00:16:53,440 Speaker 1: I picked that relates to all of them, was Andrew Grove. 277 00:16:54,560 --> 00:16:59,920 Speaker 1: Because Andrew Grove, as the head of Intel, UM didn't 278 00:17:00,080 --> 00:17:02,920 Speaker 1: create the microprocessor, but he figured out how to make 279 00:17:02,960 --> 00:17:07,159 Speaker 1: it to commercial to global commercial scale. And it's the 280 00:17:07,200 --> 00:17:13,440 Speaker 1: microprocessor that's at the center of every Internet digitalization gadget 281 00:17:13,520 --> 00:17:17,040 Speaker 1: that we talked about. It could be phones, it could 282 00:17:17,080 --> 00:17:20,640 Speaker 1: be three D printers, it could be all kinds of sensors, 283 00:17:20,680 --> 00:17:23,840 Speaker 1: but without the microprocessor, none of it would be possible. 284 00:17:24,640 --> 00:17:28,640 Speaker 1: So you know, that's that was my thinking. So who who? 285 00:17:28,680 --> 00:17:31,280 Speaker 1: I can identify a person, but I could identify maybe 286 00:17:31,440 --> 00:17:35,080 Speaker 1: a a an arena that I think someone is going 287 00:17:35,119 --> 00:17:39,080 Speaker 1: to come along. Let's say, and um be the person 288 00:17:39,840 --> 00:17:44,800 Speaker 1: who may eradicate certain diseases that would have an enormous 289 00:17:44,840 --> 00:17:50,120 Speaker 1: global impact in terms of populations. I think someone might 290 00:17:50,160 --> 00:17:54,120 Speaker 1: come along and have a technological breakthrough when it comes 291 00:17:54,160 --> 00:17:57,480 Speaker 1: to climate change. You know, someone anyone who can figure 292 00:17:57,480 --> 00:18:03,440 Speaker 1: out how to capture the coal emissions or forever that 293 00:18:03,480 --> 00:18:05,919 Speaker 1: would be. But I don't know who those people are. UM, 294 00:18:05,960 --> 00:18:08,000 Speaker 1: I've got to rip up the script here. I put 295 00:18:08,040 --> 00:18:11,680 Speaker 1: out a slight article of fabulous article by Dana Goldstein. This, 296 00:18:12,560 --> 00:18:17,280 Speaker 1: uh we can on Andrew Hacker in his hugely controversial 297 00:18:17,320 --> 00:18:20,880 Speaker 1: book basically saying the liberal arts curriculum doesn't need math. 298 00:18:21,080 --> 00:18:25,040 Speaker 1: I went suitably ballistic, as I believe you would as well. 299 00:18:25,119 --> 00:18:28,639 Speaker 1: Would you explain to our audience why people that aren't 300 00:18:28,640 --> 00:18:30,920 Speaker 1: going to be engineers like the people in your book, 301 00:18:31,000 --> 00:18:35,160 Speaker 1: like Grove or or Um the others, why we need 302 00:18:35,320 --> 00:18:40,119 Speaker 1: math at every level of our education, Well, I just 303 00:18:40,200 --> 00:18:41,760 Speaker 1: think we. First of all, I agree with you, and 304 00:18:41,840 --> 00:18:46,840 Speaker 1: I think we have entered in era where the kind 305 00:18:46,880 --> 00:18:53,480 Speaker 1: of reasoning that math induces is absolutely critical to understanding 306 00:18:54,160 --> 00:18:58,480 Speaker 1: various relationships. That, let me put another way, We're living 307 00:18:58,480 --> 00:19:00,960 Speaker 1: in an era where you need deep knowledge, but you 308 00:19:01,040 --> 00:19:03,480 Speaker 1: also need to be able to relate it to other things. 309 00:19:04,320 --> 00:19:07,720 Speaker 1: And math is the ultimate sort of relational kind of discipline. 310 00:19:08,359 --> 00:19:10,960 Speaker 1: And so I think we need math. I thought what 311 00:19:11,000 --> 00:19:13,800 Speaker 1: you were going to say is do we need poetry? 312 00:19:13,960 --> 00:19:15,600 Speaker 1: And I think we need that. We need that as well. 313 00:19:15,600 --> 00:19:17,800 Speaker 1: We need that's the house I grew up. So I 314 00:19:17,840 --> 00:19:22,240 Speaker 1: think we need people who because because we can't anticipate, 315 00:19:23,119 --> 00:19:25,240 Speaker 1: but the world is going to be and I really 316 00:19:25,280 --> 00:19:27,840 Speaker 1: believe that because I think the change is moving so fast. 317 00:19:28,440 --> 00:19:32,879 Speaker 1: We need people who have technical capabilities but also the 318 00:19:33,359 --> 00:19:38,399 Speaker 1: ability to reason critically, to ask the right questions. We 319 00:19:38,440 --> 00:19:41,040 Speaker 1: could go for hours. Jeffrey Garden with a Samarith Yale 320 00:19:41,119 --> 00:19:44,080 Speaker 1: University of the School of Management. The book is From 321 00:19:44,080 --> 00:19:47,639 Speaker 1: Silk to Silicon, and it is the early advances we 322 00:19:47,680 --> 00:19:51,040 Speaker 1: have seventy degrees temperature uh this week in New York. 323 00:19:51,119 --> 00:19:52,879 Speaker 1: It is the beach read of the ear. It is 324 00:19:52,920 --> 00:19:55,920 Speaker 1: a fabulous ten chapters. I didn't even have time to 325 00:19:55,960 --> 00:19:59,879 Speaker 1: mention Sean Money, which is a wonderful chapter. Jeff Garten 326 00:20:00,040 --> 00:20:03,639 Speaker 1: with us from Silk to Silicon. This is Bloomberg's surveillance 327 00:20:06,359 --> 00:20:08,240 Speaker 1: coming up there, with all due respect highlight. Brought to 328 00:20:08,240 --> 00:20:09,920 Speaker 1: you by land Rover. If it's in your nature to 329 00:20:10,000 --> 00:20:12,040 Speaker 1: cast off the every day and seek adventure, the Discovery 330 00:20:12,080 --> 00:20:14,240 Speaker 1: Sport was built to help your search. 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Good morning as a thorny on Wall 338 00:20:45,760 --> 00:20:48,760 Speaker 1: Street at Michael McKee along with Tom Keene and our 339 00:20:48,920 --> 00:20:52,320 Speaker 1: economic indicators are brought to you by Commonwealth Financial network. 340 00:20:52,600 --> 00:20:54,560 Speaker 1: When it's time to change the conversation, talk with a 341 00:20:54,600 --> 00:20:57,080 Speaker 1: broker dealer, r I A that's ready to listen college 342 00:20:57,119 --> 00:20:59,560 Speaker 1: six six or six two three six three eight, or 343 00:20:59,640 --> 00:21:03,320 Speaker 1: visit Commonwealth dot com to learn more. A slow week 344 00:21:03,520 --> 00:21:06,560 Speaker 1: ahead jobs week, the first week about always very big 345 00:21:06,600 --> 00:21:10,119 Speaker 1: for indicators. Uh, this week not so much today. The 346 00:21:10,119 --> 00:21:13,000 Speaker 1: other thing we really have are the FEDS Labor Market 347 00:21:13,040 --> 00:21:17,640 Speaker 1: Conditions Index, a lot of labor market numbers, especially out 348 00:21:17,640 --> 00:21:20,439 Speaker 1: of the jobs report mushed together is supposed to come 349 00:21:20,480 --> 00:21:24,960 Speaker 1: in at one from zero point. For surprise, it didn't rise. 350 00:21:25,200 --> 00:21:27,719 Speaker 1: And then consumer credit later this afternoon, we'll see if 351 00:21:27,760 --> 00:21:31,280 Speaker 1: we get any kind of indication of whether Americans still feel, 352 00:21:32,440 --> 00:21:35,840 Speaker 1: you know, happy enough to borrow. Mushed came out of 353 00:21:36,040 --> 00:21:40,359 Speaker 1: econometrics after World War Two. Yeah, I took a mushed 354 00:21:40,400 --> 00:21:43,040 Speaker 1: class the Jolts. You make a big deal about the 355 00:21:43,080 --> 00:21:47,800 Speaker 1: Jolts server. Yes, it's delayed data, but it does tell 356 00:21:47,880 --> 00:21:51,040 Speaker 1: us a lot about um, the state of the labor market, 357 00:21:51,280 --> 00:21:54,960 Speaker 1: how many jobs available, et cetera. The of course, everybody's 358 00:21:54,960 --> 00:21:58,240 Speaker 1: still reacting to Friday's jobs report better than forecast in 359 00:21:58,320 --> 00:22:01,560 Speaker 1: terms of headline numbers. But the big quest was why 360 00:22:01,720 --> 00:22:06,720 Speaker 1: did we see ours work and particularly compensation go down. 361 00:22:06,840 --> 00:22:12,080 Speaker 1: Wages fell after a big jump the month before. H 362 00:22:12,200 --> 00:22:17,399 Speaker 1: Ian Shepherdson from Pantheon Macroeconomics had a unique explanation. We 363 00:22:17,400 --> 00:22:19,400 Speaker 1: wanted to get that from him, he joins us now, 364 00:22:19,800 --> 00:22:21,879 Speaker 1: and you were the first out of the gate to 365 00:22:22,280 --> 00:22:27,680 Speaker 1: note that even before the report you were expecting a 366 00:22:27,720 --> 00:22:32,840 Speaker 1: disappointing wage number. What have you found. Well, this is 367 00:22:32,880 --> 00:22:36,800 Speaker 1: a technicality, like it's a calendar quirk UM. So the 368 00:22:36,840 --> 00:22:40,040 Speaker 1: peril survey is the week of the twelfth UM, and 369 00:22:40,200 --> 00:22:44,240 Speaker 1: when the fifteen falls on the following Monday or Tuesday, 370 00:22:44,320 --> 00:22:47,720 Speaker 1: people who are paid semi monthly, some of them get 371 00:22:47,760 --> 00:22:51,000 Speaker 1: missed out of the WEDGE numbers. And this isn't supposed 372 00:22:51,000 --> 00:22:54,360 Speaker 1: to happen UM. Employers are supposed to recognize when those 373 00:22:54,359 --> 00:22:56,640 Speaker 1: people are being paid outside the survey period and count 374 00:22:56,680 --> 00:22:59,240 Speaker 1: them anyway when they report their WEDGE data into the 375 00:22:59,280 --> 00:23:02,080 Speaker 1: Bureau of Labor Statistics. But some of them clearly don't. 376 00:23:02,560 --> 00:23:05,200 Speaker 1: And so there's a very very consistent pattern going back 377 00:23:05,240 --> 00:23:07,480 Speaker 1: over the past decade when when with the data first 378 00:23:07,520 --> 00:23:11,040 Speaker 1: started to appear in their current form, showing that nine 379 00:23:11,080 --> 00:23:13,359 Speaker 1: times out of ten when the fifteen is a Monday, 380 00:23:13,400 --> 00:23:16,479 Speaker 1: or Tuesday, the wage numbers come in way below their 381 00:23:16,520 --> 00:23:18,880 Speaker 1: previous trend, and then they tend to rebound a month 382 00:23:18,920 --> 00:23:21,520 Speaker 1: or two later, so we don't lose anything permanently, but 383 00:23:21,600 --> 00:23:24,000 Speaker 1: we do suffer what appears to be these sort of 384 00:23:24,320 --> 00:23:28,840 Speaker 1: substantially volatile monthly swings in numbers, which really ought to 385 00:23:28,840 --> 00:23:31,600 Speaker 1: be quite smooth, but they're not. And it turns out 386 00:23:31,640 --> 00:23:33,720 Speaker 1: that a huge amount of that variation is because of 387 00:23:33,760 --> 00:23:36,359 Speaker 1: this calendar quirk. December was one of those months, and 388 00:23:36,400 --> 00:23:39,120 Speaker 1: we came in with a zero and expectedly big rebound 389 00:23:39,119 --> 00:23:41,680 Speaker 1: in January. Then February another one of these crazy months, 390 00:23:41,680 --> 00:23:45,040 Speaker 1: and we get a minus zero point one. So it's 391 00:23:45,040 --> 00:23:50,119 Speaker 1: pretty consistent and absent any other substantive explanation for the 392 00:23:50,600 --> 00:23:53,399 Speaker 1: February weakness. That's what I'm going for. Well, you'd be 393 00:23:53,480 --> 00:23:57,840 Speaker 1: looking for, then a big rebound. What is the underlying 394 00:23:57,960 --> 00:24:02,159 Speaker 1: state of wage growth once you've move all this stuff out, Well, 395 00:24:02,200 --> 00:24:06,560 Speaker 1: it's accelerating, certainly accelerating. The trend is stripping out. The 396 00:24:06,560 --> 00:24:09,440 Speaker 1: calendar quirks is probably now at about two point five 397 00:24:09,480 --> 00:24:11,760 Speaker 1: two point six year of the year this time last year, 398 00:24:11,800 --> 00:24:13,720 Speaker 1: it was two the year before, it was two point 399 00:24:13,840 --> 00:24:15,800 Speaker 1: zero the year before it was two point zero. So 400 00:24:16,160 --> 00:24:18,520 Speaker 1: this has been quite a marked acceleration after our a 401 00:24:18,640 --> 00:24:21,679 Speaker 1: long time of very little action going on. Because if 402 00:24:21,680 --> 00:24:23,360 Speaker 1: funny thing is if you look at the wage numbers 403 00:24:23,400 --> 00:24:26,800 Speaker 1: in real terms rather than in nominal terms, you'll find 404 00:24:26,800 --> 00:24:28,640 Speaker 1: that they've been accelerating for quite a while, and they've 405 00:24:28,680 --> 00:24:31,800 Speaker 1: been picking up in line with the tightening of the 406 00:24:31,880 --> 00:24:33,640 Speaker 1: labor market that you can see in a whole bunch 407 00:24:33,640 --> 00:24:37,520 Speaker 1: of surveys n SID and others um and that tightening 408 00:24:37,880 --> 00:24:39,920 Speaker 1: is continuing, it has continues for some time, and it's 409 00:24:39,920 --> 00:24:42,440 Speaker 1: signaling that real wage growth has to pick up further. 410 00:24:43,480 --> 00:24:46,240 Speaker 1: What makes us difficult or interesting is that given that 411 00:24:46,280 --> 00:24:48,440 Speaker 1: inflation has now bottomed out, and I think everybody agrees 412 00:24:48,520 --> 00:24:50,160 Speaker 1: with that, now that we've we've we've had the downward 413 00:24:50,200 --> 00:24:51,920 Speaker 1: pressure on inflation starting to move a little bit to 414 00:24:51,960 --> 00:24:54,240 Speaker 1: the upside um. The only way you can get real 415 00:24:54,240 --> 00:24:58,000 Speaker 1: wage growth accelerating is phenomenal wages to pick up faster. 416 00:24:58,600 --> 00:25:00,720 Speaker 1: And this is where things get interesting, because I think 417 00:25:00,720 --> 00:25:02,639 Speaker 1: this is the year when we hit the sort of 418 00:25:02,720 --> 00:25:06,000 Speaker 1: rates of wage growth at the FEDS pass begins to dislike, 419 00:25:06,640 --> 00:25:08,800 Speaker 1: we don't know what that is. But Stan Fisher said 420 00:25:08,960 --> 00:25:11,120 Speaker 1: about a month ago that he'd be comfortable to see 421 00:25:11,160 --> 00:25:13,800 Speaker 1: wage growth at about three. Well, we're not there yet, 422 00:25:13,840 --> 00:25:15,080 Speaker 1: but I think by the end of the summer we 423 00:25:15,119 --> 00:25:16,400 Speaker 1: will be, and by the end of the year will 424 00:25:16,440 --> 00:25:18,320 Speaker 1: be more like three and a half. And that's when 425 00:25:18,359 --> 00:25:21,800 Speaker 1: things get very tricky. I agree with that nicely explained 426 00:25:21,800 --> 00:25:23,879 Speaker 1: on these dynamics and whether you're an optim mr a 427 00:25:23,880 --> 00:25:28,720 Speaker 1: pessimist in the economy, the backdraft of wages animal spirit 428 00:25:28,840 --> 00:25:34,040 Speaker 1: in nominal is sustained real GDP growth? Are you suggesting 429 00:25:34,119 --> 00:25:37,720 Speaker 1: ian that real GDP could be two point eight or 430 00:25:37,840 --> 00:25:41,920 Speaker 1: Dare I say three is a run rate? Three is 431 00:25:41,960 --> 00:25:44,000 Speaker 1: going to be difficult for the full year because we've 432 00:25:44,040 --> 00:25:46,320 Speaker 1: got a horrible base effect at the end of last 433 00:25:46,400 --> 00:25:48,480 Speaker 1: year because the Q four so weak. But that but 434 00:25:48,760 --> 00:25:51,080 Speaker 1: in terms of the courtly run rate, I think three 435 00:25:51,440 --> 00:25:53,800 Speaker 1: is is plausible, probably off for the first quarter, but 436 00:25:53,840 --> 00:25:56,000 Speaker 1: for the second, third, fourth, three is is kind of 437 00:25:56,040 --> 00:25:58,240 Speaker 1: my base case. And if we get that, then of 438 00:25:58,280 --> 00:26:00,280 Speaker 1: course that means of the firth that the plan in 439 00:26:00,320 --> 00:26:02,879 Speaker 1: the unemployment rate is more or less inevitable. You know, 440 00:26:03,040 --> 00:26:04,520 Speaker 1: we've seen a big pick up in the labor force 441 00:26:04,520 --> 00:26:06,359 Speaker 1: in the last few months, but it's not sustainable at 442 00:26:06,359 --> 00:26:09,080 Speaker 1: this rate. So I think unemployment drops further, puts greater 443 00:26:09,119 --> 00:26:12,360 Speaker 1: pressure on on real wage growth. And again because inflation 444 00:26:12,400 --> 00:26:14,919 Speaker 1: isn't going down anymore, that means that to get that 445 00:26:14,960 --> 00:26:16,960 Speaker 1: real wage growth, you've got to get the nominal and 446 00:26:17,000 --> 00:26:19,560 Speaker 1: the fad. You know, looking back over the last thirty years, 447 00:26:19,760 --> 00:26:22,040 Speaker 1: there's a pretty consistent pattern of behavior on their part 448 00:26:22,200 --> 00:26:25,480 Speaker 1: that when wedge growth accelerates substantially, they tend to panic. 449 00:26:26,240 --> 00:26:29,200 Speaker 1: And this happens quite quickly, you know, in the very 450 00:26:29,280 --> 00:26:31,560 Speaker 1: last cycle. Yeah, you know that we went from two 451 00:26:31,560 --> 00:26:33,320 Speaker 1: percent wage two and a half where we are now 452 00:26:33,640 --> 00:26:36,359 Speaker 1: to four percent in just over a year. And during 453 00:26:36,359 --> 00:26:37,879 Speaker 1: that year the FED went the FED went from being 454 00:26:37,920 --> 00:26:40,360 Speaker 1: quite relaxed about everything to being in you know, we've 455 00:26:40,400 --> 00:26:42,639 Speaker 1: really got to slow this down mode and rate throws 456 00:26:42,680 --> 00:26:45,240 Speaker 1: very substantially. We've got to continue this discussion because the 457 00:26:45,280 --> 00:26:47,480 Speaker 1: heart of the matter is if you assume of FED 458 00:26:48,080 --> 00:26:52,000 Speaker 1: do nothing in March, where are they the next FED 459 00:26:52,040 --> 00:26:54,320 Speaker 1: meeting after that? In terms of getting back to the 460 00:26:54,400 --> 00:27:00,680 Speaker 1: framework that Ian Shepherdson sture way behind, it's even worse 461 00:27:00,720 --> 00:27:02,679 Speaker 1: than that because they gotta wait till June. Really, if 462 00:27:03,520 --> 00:27:06,400 Speaker 1: nobody thinks they would move in the April seven meeting 463 00:27:06,440 --> 00:27:08,720 Speaker 1: because there's no press conference, so that you know they 464 00:27:08,760 --> 00:27:11,920 Speaker 1: got waited several more months. I don't know. I find 465 00:27:11,920 --> 00:27:15,000 Speaker 1: it fascinating what you just heard their folks was very important. Again, 466 00:27:15,400 --> 00:27:18,400 Speaker 1: Ian Shepherdson looked for that across the Bloomberg terminal. Will 467 00:27:18,400 --> 00:27:21,679 Speaker 1: continue with Dr Shepherdson here, but I also want to 468 00:27:21,680 --> 00:27:24,560 Speaker 1: point out all of our interviews Jeff Gardener and Shepherdson 469 00:27:24,560 --> 00:27:28,480 Speaker 1: and the rest out on iTunes and podcasts here. Uh 470 00:27:28,520 --> 00:27:31,800 Speaker 1: in a bit negative eight on the SMP The Deal 471 00:27:31,920 --> 00:27:38,400 Speaker 1: Future is a negative forty two. What check in with 472 00:27:38,440 --> 00:27:41,240 Speaker 1: Michael Barr now get the latest world in national headlines. 473 00:27:41,720 --> 00:27:44,600 Speaker 1: Mike tom thank you very much. The two Democratic candidates 474 00:27:44,600 --> 00:27:47,560 Speaker 1: squared off in the debate in Flint, Michigan last night. 475 00:27:48,040 --> 00:27:50,479 Speaker 1: State has a hundred forty seven delegates up for grabs 476 00:27:50,480 --> 00:27:55,520 Speaker 1: for tomorrow's presidential primary. Senator Bernie Sanders, continuing his argument 477 00:27:55,720 --> 00:27:59,520 Speaker 1: to invest in municipal projects and the wealthiest country in 478 00:27:59,560 --> 00:28:01,639 Speaker 1: the his theree of the world. We have got to 479 00:28:01,680 --> 00:28:06,240 Speaker 1: rebuild our crumbling infrastructure, our water systems. I've got a 480 00:28:06,280 --> 00:28:10,960 Speaker 1: build for a trillion dollars. Greg's thirty million jobs rebuilding 481 00:28:11,160 --> 00:28:15,359 Speaker 1: Flint Michigan Clinton during the presidential debate on cnntegrad with 482 00:28:15,440 --> 00:28:19,440 Speaker 1: Sanders that Michigan's governor should resign after lead contaminated water 483 00:28:19,800 --> 00:28:23,800 Speaker 1: in Flint's drinking water. People should be held accountable wherever 484 00:28:24,000 --> 00:28:27,560 Speaker 1: that leads, if it leads to resignation or recall if 485 00:28:27,560 --> 00:28:32,280 Speaker 1: you're in political office, if it leads to civil penalties, 486 00:28:32,720 --> 00:28:37,000 Speaker 1: if it leads to criminal responsibility. Nancy Reagan will be 487 00:28:37,040 --> 00:28:39,920 Speaker 1: buried next to her husband at the Reagan Presidential Library. 488 00:28:40,240 --> 00:28:42,880 Speaker 1: The former First Lady died yesterday at age ninety four. 489 00:28:43,200 --> 00:28:45,960 Speaker 1: Spokeswoman for Jimmy Carter says the former president does not 490 00:28:46,160 --> 00:28:50,280 Speaker 1: need further treatment for cancer. Global News twenty four hours 491 00:28:50,320 --> 00:28:53,680 Speaker 1: a day, powered by our two hundred journalists and more 492 00:28:53,680 --> 00:28:55,840 Speaker 1: than a hundred fifty news bureaus from around the world. 493 00:28:56,160 --> 00:28:59,760 Speaker 1: Michael Bark Night, Tom, thank you, Michael. Time now for 494 00:28:59,880 --> 00:29:04,240 Speaker 1: the Boomberg NBC Sports Update, with thanks Mike. Rangers and 495 00:29:04,280 --> 00:29:07,000 Speaker 1: Islanders longtime rivals, but now when they play, it is 496 00:29:07,040 --> 00:29:09,520 Speaker 1: truly a battle of New York City teams, and this 497 00:29:09,640 --> 00:29:11,680 Speaker 1: year it's been all Islanders. They've won all three meetings. 498 00:29:11,680 --> 00:29:13,840 Speaker 1: At the Guarden, they led three nothing. Five minutes in 499 00:29:14,240 --> 00:29:16,520 Speaker 1: they led four to three third period, when the Rangers 500 00:29:16,560 --> 00:29:17,960 Speaker 1: tied it with a minute and a a half to go, 501 00:29:18,200 --> 00:29:21,560 Speaker 1: Cal Clutterbuck scored off the face off isles one six 502 00:29:21,600 --> 00:29:24,600 Speaker 1: to four, two goals for Johnny Boyjack. Islanders go six 503 00:29:24,600 --> 00:29:26,840 Speaker 1: and one on their road trip in Newark all Penguins, 504 00:29:26,880 --> 00:29:29,680 Speaker 1: they beat the slumping Devils six to one, Golden State 505 00:29:29,720 --> 00:29:32,440 Speaker 1: Warriors an amazing fifty five and six. But when they 506 00:29:32,480 --> 00:29:35,280 Speaker 1: have lost, it's always been on the road, mostly by 507 00:29:35,280 --> 00:29:38,240 Speaker 1: wide margins and mostly the bad teams routed by the 508 00:29:38,600 --> 00:29:41,800 Speaker 1: lowly Lakers one twelve to ninety five of Steph Curry 509 00:29:41,800 --> 00:29:45,560 Speaker 1: and Clay Thompson together shot one for eighteen on three pointers. 510 00:29:45,800 --> 00:29:47,920 Speaker 1: There could be several local teams in the upcoming n 511 00:29:47,920 --> 00:29:50,200 Speaker 1: C Double, a tournament assured of one coming out of 512 00:29:50,240 --> 00:29:53,800 Speaker 1: the Metro Atlantic as Monmouth but play Iona in tonight's 513 00:29:53,800 --> 00:29:57,320 Speaker 1: final and Albany at the Colonial in Baltimore. Hofstro will 514 00:29:57,320 --> 00:30:00,040 Speaker 1: play in North Carolina Wilmington for the right to go 515 00:30:00,120 --> 00:30:02,280 Speaker 1: to the n C Double. As encouraging news for the Yankees, 516 00:30:02,280 --> 00:30:05,440 Speaker 1: Masahiro Tanaka to scoreless innings of this first outing since 517 00:30:05,480 --> 00:30:08,240 Speaker 1: elbow surgery last year. Not many of the all time 518 00:30:08,320 --> 00:30:11,640 Speaker 1: greats and their careers with a championship victory, Peyton Manning did. 519 00:30:12,080 --> 00:30:14,600 Speaker 1: He had already hinted this could be his last rodeo, 520 00:30:14,720 --> 00:30:17,040 Speaker 1: as he says, and it was. He retires with five 521 00:30:17,160 --> 00:30:19,640 Speaker 1: m v ps, two Super Bowl wins, almost all the 522 00:30:19,760 --> 00:30:23,000 Speaker 1: career passing records. He'll meet the media in Denver today 523 00:30:23,360 --> 00:30:26,960 Speaker 1: way at the Bloomberg NBC Sports Update. I'm John stash All. John, 524 00:30:27,040 --> 00:30:29,400 Speaker 1: thanks so much, appreciate that. On a Monday, as we 525 00:30:29,600 --> 00:30:32,840 Speaker 1: moved forward through the week, we always do it looking 526 00:30:32,880 --> 00:30:37,520 Speaker 1: at equities, bonds, currencies, commodit. He's quite on a Monday always, 527 00:30:37,600 --> 00:30:41,240 Speaker 1: it seems after a job report. We did see adjustment 528 00:30:41,320 --> 00:30:45,440 Speaker 1: yields higher off the jobs report, but the curve really 529 00:30:45,480 --> 00:30:47,440 Speaker 1: didn't steep in all that much. It did a little 530 00:30:47,920 --> 00:30:50,600 Speaker 1: one hundred one basis points right now, one point zero 531 00:30:50,720 --> 00:30:53,800 Speaker 1: one percentage points between the ten year and the two year. 532 00:30:54,080 --> 00:30:57,000 Speaker 1: That's a little bit steeper over the last number of 533 00:30:57,080 --> 00:30:59,760 Speaker 1: days of tenure one point nine zero percent to two 534 00:30:59,840 --> 00:31:03,120 Speaker 1: year point eight nine percent. Even three month T bill 535 00:31:03,240 --> 00:31:08,320 Speaker 1: lofty at zero point to seven SMB futures of negative, 536 00:31:08,320 --> 00:31:12,200 Speaker 1: eight down futures negative. And the yen is that global 537 00:31:12,240 --> 00:31:22,560 Speaker 1: barometer churning one fifty four. This is Bloomberg Surveillance earnings 538 00:31:22,760 --> 00:31:25,520 Speaker 1: for US corporations up one and a half percent if 539 00:31:25,520 --> 00:31:28,920 Speaker 1: you leave out energy, is that enough to keep wages growing? 540 00:31:29,000 --> 00:31:33,360 Speaker 1: Will continue our conversation with Panton macroeconomics Ian Shepherdson here 541 00:31:33,520 --> 00:31:39,920 Speaker 1: on surveillance, Global business news twenty four hours a day 542 00:31:40,120 --> 00:31:43,280 Speaker 1: at Bloomberg dot com, the radio plus mobil and on 543 00:31:43,360 --> 00:31:47,520 Speaker 1: your radio. This is a Bloomberg Business flash and I'm 544 00:31:47,520 --> 00:31:49,920 Speaker 1: far in Moscow. This updates brought to you by Sector 545 00:31:50,000 --> 00:31:52,200 Speaker 1: Spider A t F. So I buy a single stock 546 00:31:52,240 --> 00:31:55,160 Speaker 1: when you can invest in the entire sector. Visits sector 547 00:31:55,400 --> 00:31:58,560 Speaker 1: sp d r S dot com or call six Sector 548 00:31:58,760 --> 00:32:02,560 Speaker 1: e t F. European shares are falling with copper and zinc, 549 00:32:02,600 --> 00:32:05,520 Speaker 1: while the dollar in German bonds climb as investors assess 550 00:32:05,640 --> 00:32:08,440 Speaker 1: the impact of China's growth plans and the potential for 551 00:32:08,520 --> 00:32:11,760 Speaker 1: European Central Bank stimulus measures. This week, we checked the 552 00:32:11,800 --> 00:32:14,720 Speaker 1: markets every fifteen minutes throughout the trading day on Bloomberg. 553 00:32:15,080 --> 00:32:18,440 Speaker 1: US dock index futures are lower, SNP EVENI futures down 554 00:32:18,560 --> 00:32:22,040 Speaker 1: nine points, now eveny futures down fifties six, and nasdak 555 00:32:22,080 --> 00:32:25,400 Speaker 1: emny futures down twenty two. Tax in Germany's down one 556 00:32:25,440 --> 00:32:28,560 Speaker 1: point one percent, CAC in Paris and FT one hundred 557 00:32:28,600 --> 00:32:31,120 Speaker 1: both down more than one percent as well. Ten Your 558 00:32:31,160 --> 00:32:33,600 Speaker 1: Treasury down eight thirty seconds, the yield one point nine 559 00:32:33,720 --> 00:32:36,760 Speaker 1: zero percent yield on the two year point eight eight percent. 560 00:32:37,200 --> 00:32:39,800 Speaker 1: Nimex Screwed Oil up six tenths percent or twenty one 561 00:32:39,840 --> 00:32:42,920 Speaker 1: cents to thirty six thirteen a barrel. Comex Gold is 562 00:32:42,960 --> 00:32:45,440 Speaker 1: down three tenths percent or three dollars forty cents to 563 00:32:45,520 --> 00:32:48,760 Speaker 1: twelve sixty seven forty announced the euro a dollar oh 564 00:32:48,880 --> 00:32:52,920 Speaker 1: nine six one, the yen one thirteen point five zero, 565 00:32:53,440 --> 00:32:56,800 Speaker 1: and selled X Therapeutics of Nita, Massachusetts is now down 566 00:32:56,880 --> 00:32:59,440 Speaker 1: fifty one percent in early trading after saying it will 567 00:32:59,440 --> 00:33:02,520 Speaker 1: stop a five no stage study of an experimental brain 568 00:33:02,600 --> 00:33:05,960 Speaker 1: cancer vaccine. That's a Bloomberg Business flash. Tom and Michael 569 00:33:06,040 --> 00:33:09,840 Speaker 1: Churn thanks Future Negative nine A bit of a deterioration 570 00:33:10,720 --> 00:33:14,240 Speaker 1: in the tape on this Monday. It is on Wall Street. 571 00:33:15,480 --> 00:33:19,000 Speaker 1: The following is from Bloomberg View, opinions and commentary from 572 00:33:19,040 --> 00:33:23,040 Speaker 1: Bloomberg columnists. I'm Paula Dwyer, a columnist with Bloomberg View. 573 00:33:23,320 --> 00:33:26,680 Speaker 1: The Republican establishment with Mitt Romney and the lead is 574 00:33:26,760 --> 00:33:29,600 Speaker 1: hitting back against Donald Trump. Yet no matter how many 575 00:33:29,720 --> 00:33:33,480 Speaker 1: party elders pile on, Trump keeps winning and poles show 576 00:33:33,560 --> 00:33:37,200 Speaker 1: fortent of Republican voters support him. Let's face it, the 577 00:33:37,280 --> 00:33:40,200 Speaker 1: Republican elite has lost control of the agenda. To win 578 00:33:40,280 --> 00:33:43,800 Speaker 1: it back, author and social scientist Charles Murray says the 579 00:33:43,880 --> 00:33:48,480 Speaker 1: GOP should rethink bedrock policies, including a relentless focus on 580 00:33:48,600 --> 00:33:52,520 Speaker 1: tax cuts, endless attempts to repeal Obamacare, and opposition to 581 00:33:52,640 --> 00:33:56,360 Speaker 1: improvements in the social safety net. Such ideas are heresy 582 00:33:56,360 --> 00:33:59,640 Speaker 1: among the Republican elite, yet they'd be good for Trump's supporters, 583 00:34:00,120 --> 00:34:04,680 Speaker 1: mostly white, non college educated, and lower income voters. They 584 00:34:04,720 --> 00:34:07,800 Speaker 1: haven't seen wages go up since the nineteen seventies, the 585 00:34:07,920 --> 00:34:11,279 Speaker 1: factories that once employed them have shipped out. Seen through 586 00:34:11,400 --> 00:34:14,880 Speaker 1: his base, Trump's anti immigrant and anti free trade views 587 00:34:15,160 --> 00:34:18,120 Speaker 1: makes some sense, yet the GOP has done little to 588 00:34:18,200 --> 00:34:22,680 Speaker 1: help them. Trump exposes the ineffectiveness of Republican policy, but 589 00:34:22,840 --> 00:34:27,120 Speaker 1: he does so by manipulating and encouraging racial and ethnic animosities. 590 00:34:27,520 --> 00:34:30,880 Speaker 1: To the condemnation of Mitt Romney and many other Party elders, 591 00:34:31,160 --> 00:34:34,040 Speaker 1: Let's hope they're not too late. I'm Paula Dwire, a 592 00:34:34,160 --> 00:34:37,680 Speaker 1: columnist with Bloomberg View. For more commentary and opinion, please 593 00:34:37,680 --> 00:34:40,960 Speaker 1: go to Bloomberg View dot com. This has been Bloomberg 594 00:34:41,080 --> 00:34:44,280 Speaker 1: View and bloom Review commentaries. Com Here to hourly weekdays 595 00:34:44,920 --> 00:34:49,399 Speaker 1: on Bloomberg Radio. Michael always going to talk to Ian Shepherdson. Yes, 596 00:34:49,480 --> 00:34:52,200 Speaker 1: it's terrific to have him on with us. And Uh, 597 00:34:52,400 --> 00:34:54,920 Speaker 1: you were talking in as of course the chief economists 598 00:34:55,120 --> 00:34:58,040 Speaker 1: at Pantheon. You were talking before the break about the 599 00:34:58,120 --> 00:35:02,560 Speaker 1: outlook for the picking up as the year goes on 600 00:35:02,920 --> 00:35:06,680 Speaker 1: and for earnings rebounding. But we're not seeing the same 601 00:35:06,760 --> 00:35:11,080 Speaker 1: thing in corporate earnings. I'm wondering how whether the growth 602 00:35:11,160 --> 00:35:14,080 Speaker 1: pick up actually translates to earnings and whether companies can 603 00:35:14,160 --> 00:35:21,439 Speaker 1: continue to give raises if we don't see earnings rise. Yeah, 604 00:35:21,520 --> 00:35:23,200 Speaker 1: it kind of depends where you are, really. I mean, 605 00:35:23,280 --> 00:35:25,719 Speaker 1: if you're a manufacturing exporter and you're selling things to 606 00:35:25,840 --> 00:35:30,399 Speaker 1: Asia and you're competing with exports and other countries, it's 607 00:35:30,400 --> 00:35:32,320 Speaker 1: going to be very difficult for you because the dollars 608 00:35:32,360 --> 00:35:35,120 Speaker 1: the problem. It's very strong. Um, you're suffering weak demand 609 00:35:35,160 --> 00:35:37,279 Speaker 1: in some of your key markets. Obviously China's one of them, 610 00:35:37,360 --> 00:35:40,040 Speaker 1: but others as well, and for you things are going 611 00:35:40,080 --> 00:35:42,480 Speaker 1: to be a real struggle. So unfortunately, for those sort 612 00:35:42,520 --> 00:35:44,640 Speaker 1: of businesses, the pickup and wage growth, which they can't 613 00:35:44,680 --> 00:35:47,040 Speaker 1: really avoid because they're all competed for the same pool 614 00:35:47,080 --> 00:35:50,239 Speaker 1: of labor, that's just a margin hit. But if you 615 00:35:50,360 --> 00:35:53,400 Speaker 1: are a domestic facing business, as a service sector business 616 00:35:53,440 --> 00:35:56,040 Speaker 1: in particular with mostly domestic customers not worried about the 617 00:35:56,040 --> 00:35:58,399 Speaker 1: strength of the dollar, then fore you it's much more 618 00:35:58,440 --> 00:36:01,440 Speaker 1: manageable because the given wage growth, of course, just means 619 00:36:01,480 --> 00:36:04,000 Speaker 1: your customers have got more money to spend. Now. It 620 00:36:04,040 --> 00:36:06,040 Speaker 1: doesn't mean you're going to be able to recruit recoup 621 00:36:06,080 --> 00:36:08,239 Speaker 1: every dollar of extra wage growth, because you may lose 622 00:36:08,280 --> 00:36:10,000 Speaker 1: a bit of market share somebody else might come into 623 00:36:10,040 --> 00:36:13,239 Speaker 1: your space. But in aggregate it should be okay. And 624 00:36:13,320 --> 00:36:16,280 Speaker 1: so for those businesses, which remember are the overwhelming bulk 625 00:36:16,320 --> 00:36:20,160 Speaker 1: of US corporations in that domestic consumer facing space, the 626 00:36:20,239 --> 00:36:22,200 Speaker 1: wage pressure is not the end of the world. But 627 00:36:22,360 --> 00:36:28,560 Speaker 1: certainly there's a minority of companies externally focused dollar sensitive 628 00:36:28,960 --> 00:36:31,239 Speaker 1: and for those it's going to be extremely difficult. It 629 00:36:31,239 --> 00:36:33,359 Speaker 1: already is extremely difficult. This is not a news story. 630 00:36:33,400 --> 00:36:36,239 Speaker 1: It's just likely to intensify over the course of the year. 631 00:36:36,480 --> 00:36:37,880 Speaker 1: But I got to say, it doesn't mean that the 632 00:36:38,120 --> 00:36:40,120 Speaker 1: whole manufacturing sector, which of course has most of the 633 00:36:40,160 --> 00:36:42,680 Speaker 1: exporters in it, is going to perform as badly as 634 00:36:42,719 --> 00:36:44,560 Speaker 1: it did last year. Because one of the big drags 635 00:36:44,719 --> 00:36:47,320 Speaker 1: last year was the massive collapse in capital spending in 636 00:36:47,320 --> 00:36:49,880 Speaker 1: the oil business. And that's pretty much over now. You know, 637 00:36:49,920 --> 00:36:52,719 Speaker 1: it's fallen so far that it cannot fall again as 638 00:36:52,760 --> 00:36:54,600 Speaker 1: far as it did last year. We we we've probably 639 00:36:54,680 --> 00:36:57,279 Speaker 1: taken capex in oil from a peak of about two 640 00:36:57,640 --> 00:37:01,480 Speaker 1: billion annualized down to about fifty so it cannot fall 641 00:37:01,520 --> 00:37:03,400 Speaker 1: as far again. And that was a really big hit 642 00:37:03,480 --> 00:37:06,640 Speaker 1: on manufacturer, So less pain from that source. But they're 643 00:37:06,640 --> 00:37:08,279 Speaker 1: going to have to deal with that wage problem. Yeah. 644 00:37:08,280 --> 00:37:10,440 Speaker 1: I don't want to catch you by surprise. You're I, 645 00:37:10,760 --> 00:37:12,400 Speaker 1: but you're so good at this. When I look at 646 00:37:12,440 --> 00:37:16,120 Speaker 1: full and part time employment, Joe Malinsky rights it up 647 00:37:16,200 --> 00:37:20,560 Speaker 1: at advisor perspectives, and the bottom line is part time 648 00:37:20,640 --> 00:37:24,520 Speaker 1: employment is better. There's less of it and more full time, 649 00:37:25,200 --> 00:37:29,720 Speaker 1: but part time employment is is thirty five percent higher 650 00:37:30,480 --> 00:37:33,000 Speaker 1: than it was at the bottom. We were at thirteen 651 00:37:33,040 --> 00:37:35,799 Speaker 1: point five percent a million years ago. We get up 652 00:37:35,840 --> 00:37:38,520 Speaker 1: into the twenties and we come back to eighteen point 653 00:37:38,600 --> 00:37:41,439 Speaker 1: two percent. So we've moved from thirteen point five percent 654 00:37:41,520 --> 00:37:44,840 Speaker 1: to eighteen point two percent of America. Which way is it? 655 00:37:45,080 --> 00:37:47,640 Speaker 1: Is it part time America? Are we actually moving in 656 00:37:47,719 --> 00:37:50,600 Speaker 1: the right direction? Well, we we are moving in the 657 00:37:50,719 --> 00:37:53,279 Speaker 1: right direction. But there's still an enormous legacy from from 658 00:37:53,320 --> 00:37:55,680 Speaker 1: the crash period which distorted so many of these labor 659 00:37:55,719 --> 00:37:58,640 Speaker 1: market numbers, and not all of them, many of them 660 00:37:58,719 --> 00:38:01,560 Speaker 1: haven't yet reverted to where they were before the Great 661 00:38:01,600 --> 00:38:04,799 Speaker 1: Crash um. This is a you know, there still an 662 00:38:04,800 --> 00:38:06,440 Speaker 1: awful lot of people in these part time jobs who 663 00:38:06,480 --> 00:38:08,759 Speaker 1: want full time jobs. But at the very same time, 664 00:38:09,200 --> 00:38:12,040 Speaker 1: surveys of businesses are telling us that they're saying they 665 00:38:12,080 --> 00:38:13,880 Speaker 1: can't find the people they want to hire. And this 666 00:38:14,040 --> 00:38:16,399 Speaker 1: is one of these apparent contradictions that we can't really 667 00:38:16,480 --> 00:38:18,440 Speaker 1: resolve with the data that we've got. I mean, why 668 00:38:18,560 --> 00:38:20,359 Speaker 1: would it be if you've got millions of people who 669 00:38:20,400 --> 00:38:22,680 Speaker 1: want to work full time, they're currently employed. It's not 670 00:38:22,760 --> 00:38:24,080 Speaker 1: like they, you know, dead, be two, I'm going to 671 00:38:24,120 --> 00:38:25,759 Speaker 1: get a job. They've got a job. They want to 672 00:38:25,800 --> 00:38:27,839 Speaker 1: work full time, And at the same time, employers are 673 00:38:27,840 --> 00:38:29,640 Speaker 1: saying we can't find the people we want to hire. 674 00:38:30,080 --> 00:38:32,360 Speaker 1: So I don't know whether nobody knows whether this is 675 00:38:32,400 --> 00:38:34,919 Speaker 1: a geographic problem that the people are in the wrong place, 676 00:38:35,000 --> 00:38:37,440 Speaker 1: or whether it's a skills problem. I think that's more likely, 677 00:38:37,800 --> 00:38:39,560 Speaker 1: or maybe it's a sector problem that you know, we've 678 00:38:39,600 --> 00:38:42,320 Speaker 1: got a lot of people maybe working part time insectors 679 00:38:42,320 --> 00:38:44,640 Speaker 1: where the growth isn't very strong, and where growth is 680 00:38:44,680 --> 00:38:47,360 Speaker 1: stronger they don't have the right skills. We don't know, 681 00:38:48,040 --> 00:38:50,719 Speaker 1: but certainly there's there's several million people who would love 682 00:38:50,800 --> 00:38:53,160 Speaker 1: to have a full time job and several hundred thousand 683 00:38:53,200 --> 00:38:55,839 Speaker 1: companies who want more full time employees. You would think 684 00:38:56,280 --> 00:38:58,480 Speaker 1: it would work out, but it isn't. So someth there's 685 00:38:58,480 --> 00:39:02,080 Speaker 1: a mismatch somewhere. All The one thing that is clear 686 00:39:02,200 --> 00:39:05,600 Speaker 1: is that even with all that, the FED is pretty 687 00:39:05,680 --> 00:39:09,480 Speaker 1: much there with the employment part of their mandate. What 688 00:39:09,600 --> 00:39:14,439 Speaker 1: do you see happening with inflation going forward? Well, here's 689 00:39:14,480 --> 00:39:17,880 Speaker 1: the thing. Janet Yellen said back in December that temporary factors, 690 00:39:18,200 --> 00:39:21,000 Speaker 1: the strong dollar and dropping oil prices are holding down 691 00:39:21,239 --> 00:39:24,040 Speaker 1: the core PC deflator, which is a FEDS target measure 692 00:39:24,040 --> 00:39:26,640 Speaker 1: of inflation, holding it down between a quarter and half 693 00:39:26,680 --> 00:39:29,560 Speaker 1: a percent the target too, and the current rate the 694 00:39:29,640 --> 00:39:32,040 Speaker 1: latest state that we have is one point seven, So 695 00:39:32,160 --> 00:39:35,040 Speaker 1: you add back in those temporary factors, and core inflation 696 00:39:35,080 --> 00:39:37,919 Speaker 1: on the fed's own target measure is already at two 697 00:39:38,239 --> 00:39:42,040 Speaker 1: to two and a quarter. The FEDS forecasts don't show 698 00:39:42,080 --> 00:39:44,439 Speaker 1: them reaching that two percent target until the fourth quarter 699 00:39:44,480 --> 00:39:47,359 Speaker 1: of two and a half years from now, and yet 700 00:39:47,440 --> 00:39:50,640 Speaker 1: the very same data that the FED targets are showing 701 00:39:50,680 --> 00:39:54,840 Speaker 1: already using Yellen's own calculations, that the underlying rate is 702 00:39:54,880 --> 00:39:57,719 Speaker 1: already there. This really worries me because I think a 703 00:39:57,800 --> 00:40:00,319 Speaker 1: FED that wasn't so rabbit in the head it's when 704 00:40:00,360 --> 00:40:02,399 Speaker 1: confronted with slow down in China, would have been hiking 705 00:40:02,480 --> 00:40:05,360 Speaker 1: rates much more quickly. And the longer that they delay it, 706 00:40:05,440 --> 00:40:08,040 Speaker 1: and the more they find excuses looking at international developments 707 00:40:08,080 --> 00:40:10,319 Speaker 1: and worries about overseas economies, none of which are very 708 00:40:10,400 --> 00:40:13,120 Speaker 1: much bearing on the US domestic labor market, the more 709 00:40:13,640 --> 00:40:17,640 Speaker 1: the danger rises that eventually inflation bites them and they 710 00:40:17,719 --> 00:40:20,000 Speaker 1: have to catch up very quickly with very disruptive and 711 00:40:20,040 --> 00:40:22,839 Speaker 1: destabilizing right tags. But funny thing is, of course that yeah, 712 00:40:22,840 --> 00:40:24,759 Speaker 1: and it keeps referring to this danger, saying, well, if 713 00:40:24,800 --> 00:40:26,120 Speaker 1: we leave it too long, then we'll have to go 714 00:40:26,239 --> 00:40:28,400 Speaker 1: more quickly and that could be very damaging. But the 715 00:40:28,480 --> 00:40:30,760 Speaker 1: action that they're taking seems to me to be raising 716 00:40:30,800 --> 00:40:33,759 Speaker 1: the very risk that they're setting out in those sort 717 00:40:33,800 --> 00:40:36,319 Speaker 1: of statements, and I really don't get it. I think 718 00:40:36,360 --> 00:40:40,360 Speaker 1: they're hugely overplaying the danger post by China slowdown, and 719 00:40:40,719 --> 00:40:43,879 Speaker 1: overplaying the danger players by the manufacturing slowdown, which is real. 720 00:40:44,200 --> 00:40:46,480 Speaker 1: No question, manufacturing is very weak, but it's a teeny 721 00:40:46,520 --> 00:40:48,520 Speaker 1: bit of the economy and the rest of it's doing 722 00:40:48,600 --> 00:40:50,840 Speaker 1: much better. And the danger is that that tightening in 723 00:40:50,880 --> 00:40:52,640 Speaker 1: the rest of it is going to catch them underwares. 724 00:40:52,719 --> 00:40:56,240 Speaker 1: And you know, looking at the data, by their own terms, 725 00:40:56,680 --> 00:40:59,120 Speaker 1: they're already at the sort of rate swearing thestry policies 726 00:40:59,120 --> 00:41:01,279 Speaker 1: should be much nearer in New Trall and he isn't. Okay, 727 00:41:01,360 --> 00:41:04,239 Speaker 1: So quickly, here's summarized for us. Do you agree with 728 00:41:04,320 --> 00:41:06,920 Speaker 1: more I heard from Michael McKey, you know, my suggesting 729 00:41:06,960 --> 00:41:11,840 Speaker 1: that with an opinion, But March, no decision, next meeting, 730 00:41:12,160 --> 00:41:18,440 Speaker 1: no decision because there's no press conference. Unfortunately. You know, 731 00:41:18,800 --> 00:41:20,919 Speaker 1: it does look to me like if if they don't 732 00:41:20,960 --> 00:41:24,160 Speaker 1: go in March, and it seems extremely unlikely that they're 733 00:41:24,160 --> 00:41:27,279 Speaker 1: going to move now. Um, then June is the most likely. 734 00:41:27,360 --> 00:41:29,239 Speaker 1: And the danger is that by the time we get 735 00:41:29,280 --> 00:41:32,080 Speaker 1: that things have moved on significantly. Uh, you know, they're 736 00:41:32,120 --> 00:41:35,280 Speaker 1: already at their mandate in terms of the employment picture, 737 00:41:35,320 --> 00:41:37,560 Speaker 1: and I think they're very close on the inflation front. 738 00:41:37,600 --> 00:41:40,480 Speaker 1: So I think that that if they do wait till June, 739 00:41:40,600 --> 00:41:42,640 Speaker 1: then they'll be going very rapidly after that, and they'll 740 00:41:42,680 --> 00:41:45,080 Speaker 1: have to be a significant adjustment in the markets in 741 00:41:45,239 --> 00:41:47,480 Speaker 1: terms of thinking about what the FED is going to 742 00:41:47,520 --> 00:41:49,040 Speaker 1: have to do, and it will all be triggered by 743 00:41:49,040 --> 00:41:51,920 Speaker 1: the wage numbers, because ultimately it always is the added 744 00:41:52,000 --> 00:41:53,719 Speaker 1: sort of free song, if you like, is that the 745 00:41:53,840 --> 00:41:56,520 Speaker 1: actual inflation, which was supposed to be something we didn't 746 00:41:56,520 --> 00:41:59,320 Speaker 1: have to think about for another two years, could also 747 00:41:59,400 --> 00:42:01,279 Speaker 1: be forcing them to move at the same time. And 748 00:42:01,360 --> 00:42:03,760 Speaker 1: the history tells you that when you've got accelerating inflash 749 00:42:04,200 --> 00:42:06,400 Speaker 1: and wages at the same time, things get very messy, 750 00:42:06,520 --> 00:42:10,000 Speaker 1: very quickly. Ian Shepherdson is always brilliant, Thank you so much. 751 00:42:10,080 --> 00:42:12,520 Speaker 1: With panther Young Mike, I'm gonna put out on Twitter 752 00:42:12,600 --> 00:42:15,480 Speaker 1: on the part time full time question, Jill miss Lynskey. 753 00:42:16,360 --> 00:42:20,359 Speaker 1: It's important when economic data and reports are constructed by 754 00:42:20,400 --> 00:42:23,480 Speaker 1: a physics and astronomy major from the University of Chicago. 755 00:42:24,120 --> 00:42:27,640 Speaker 1: I mean, is that qualifications or what Jill mss Lyndskey. 756 00:42:28,000 --> 00:42:29,840 Speaker 1: I'll put it. I'll get it out on social just 757 00:42:29,960 --> 00:42:35,719 Speaker 1: super work. Rob Low tweeting out Peyton Manning's retirement timed perfectly. 758 00:42:36,080 --> 00:42:38,520 Speaker 1: He could step in as a candidate in a broker 759 00:42:38,640 --> 00:42:44,560 Speaker 1: Republican convention. We want IK or whatever the phrase was 760 00:42:44,640 --> 00:42:48,880 Speaker 1: from fifty two Tim Keenan, Michael McKee and Peyton Manning. 761 00:42:49,000 --> 00:42:49,439 Speaker 1: Good morning,