1 00:00:06,000 --> 00:00:08,630 Speaker 1: Hello, this is COVID time, podcast series on markets and 2 00:00:08,630 --> 00:00:12,109 Speaker 1: economies from DBS Group Research. I'm Tambei, chief economist, welcoming 3 00:00:12,109 --> 00:00:18,020 Speaker 1: you to our 156th episode. Today, it's just me, yours truly. 4 00:00:18,209 --> 00:00:20,549 Speaker 1: I have a few things to cover. I will go 5 00:00:20,549 --> 00:00:24,299 Speaker 1: over trade war, I will talk about the Middle East 6 00:00:24,590 --> 00:00:27,030 Speaker 1: and the US economy and all of this with the 7 00:00:27,030 --> 00:00:28,989 Speaker 1: second half of 2025 in mind. 8 00:00:29,319 --> 00:00:32,319 Speaker 1: And then I will address some questions from you, the listeners. 9 00:00:32,569 --> 00:00:35,250 Speaker 1: I sent out a call on LinkedIn and on WhatsApp, 10 00:00:35,569 --> 00:00:39,119 Speaker 1: gotten a bunch of questions back, some from clients, some 11 00:00:39,119 --> 00:00:42,520 Speaker 1: from general public, and some from colleagues in the DBS. 12 00:00:42,770 --> 00:00:45,459 Speaker 1: I'll take on as many as I can, and here 13 00:00:45,459 --> 00:00:48,409 Speaker 1: we go. All right, first, the trade stuff. So the 14 00:00:48,409 --> 00:00:52,000 Speaker 1: reciprocal tariff pause is coming to an end soon. Uh, 15 00:00:52,090 --> 00:00:55,569 Speaker 1: question is, how's it going with Asian exports and exporters? 16 00:00:56,049 --> 00:00:58,669 Speaker 1: Well, emblematic of this episode, there's a great deal of 17 00:00:58,669 --> 00:00:59,869 Speaker 1: concern and fear, but life goes on. 18 00:01:00,970 --> 00:01:03,529 Speaker 1: Asia's exporters are negative about the outlook, but for the 19 00:01:03,529 --> 00:01:06,259 Speaker 1: time being, they're hunkering down, doing whatever they can. 20 00:01:09,610 --> 00:01:13,089 Speaker 1: As soon as Donald Trump was reelected last November, an 21 00:01:13,089 --> 00:01:16,690 Speaker 1: exacerbation of the trade war was guaranteed. From January onwards, 22 00:01:16,769 --> 00:01:19,209 Speaker 1: shipments to the US began to jump as traders tried 23 00:01:19,209 --> 00:01:22,559 Speaker 1: to get ahead of whatever restrictions were coming down the road. 24 00:01:23,129 --> 00:01:27,480 Speaker 1: But regardless of such efforts, the early April announcements were 25 00:01:27,480 --> 00:01:31,800 Speaker 1: so much worse than expected that PMI's dived sharply across 26 00:01:31,800 --> 00:01:35,080 Speaker 1: the region. The aggregate PMIs of ASEAN 6, for instance, 27 00:01:35,169 --> 00:01:37,610 Speaker 1: are now down to levels not seen in years. 28 00:01:38,309 --> 00:01:41,628 Speaker 1: But that doesn't mean the poor sentiment has translated into 29 00:01:41,629 --> 00:01:46,190 Speaker 1: poor numbers. Uh, through April, uh, ASEAN 6 exports growth 30 00:01:46,190 --> 00:01:49,750 Speaker 1: was an uptrend, marking a sharp divergence from PMI. So 31 00:01:49,750 --> 00:01:53,430 Speaker 1: PMI is going down, exports staying up or holding up 32 00:01:53,430 --> 00:01:59,419 Speaker 1: pretty well. We now have made data for China, India, Malaysia, Korea, Taiwan, Vietnam, 33 00:01:59,750 --> 00:02:02,269 Speaker 1: and what do we see? Well, in most cases, we 34 00:02:02,269 --> 00:02:05,309 Speaker 1: see exports doing pretty well. There's some slicing and dicing 35 00:02:05,309 --> 00:02:06,910 Speaker 1: of the data needed to be done. Let's just go 36 00:02:06,910 --> 00:02:07,870 Speaker 1: through that momentarily. 37 00:02:08,258 --> 00:02:11,139 Speaker 1: Ah, think about a country like Vietnam. A third of 38 00:02:11,139 --> 00:02:13,449 Speaker 1: its exports go to the US and they have major 39 00:02:13,449 --> 00:02:17,660 Speaker 1: vulnerabilities if this 46% reciprocal tariff were to come back 40 00:02:17,660 --> 00:02:22,539 Speaker 1: after the pause. But through May, Vietnam's exports were up 17% 41 00:02:22,538 --> 00:02:24,740 Speaker 1: on a year on year basis, and their exports to 42 00:02:24,740 --> 00:02:27,529 Speaker 1: the US up 36% on a year on year basis. 43 00:02:27,699 --> 00:02:30,220 Speaker 1: I can come up with data like that for many countries. 44 00:02:31,529 --> 00:02:33,300 Speaker 1: The Taiwan, I think for the month of May is 45 00:02:33,300 --> 00:02:36,500 Speaker 1: up like 87% on a year on year basis. So 46 00:02:36,500 --> 00:02:39,639 Speaker 1: PMI readings are suggesting that this is not going to last. 47 00:02:39,820 --> 00:02:42,579 Speaker 1: People are basically advancing a lot of exports in anticipation 48 00:02:42,580 --> 00:02:45,649 Speaker 1: of worse tariff environment and therefore we'll have a big payback, 49 00:02:45,820 --> 00:02:49,300 Speaker 1: but for the time being, that divergence is persisting. And 50 00:02:49,300 --> 00:02:51,859 Speaker 1: then look at the contrast with China. China's exports to 51 00:02:51,860 --> 00:02:55,809 Speaker 1: the US are contracting sharply, but its overall exports are up. 52 00:02:56,300 --> 00:03:00,300 Speaker 1: So you combine Vietnam's data, exports to the US up 53 00:03:00,300 --> 00:03:00,779 Speaker 1: a lot. 54 00:03:01,399 --> 00:03:03,679 Speaker 1: China's data, exports to the US down a lot, but 55 00:03:03,679 --> 00:03:08,119 Speaker 1: both cases, exports to the whole world up still pretty nicely. Uh, 56 00:03:08,199 --> 00:03:12,029 Speaker 1: then you can think of four types of conclusions. First, 57 00:03:12,639 --> 00:03:14,839 Speaker 1: as I said earlier, a lot of front loading type 58 00:03:14,839 --> 00:03:17,359 Speaker 1: trade is taking place to get ahead of the tariffs. 59 00:03:18,089 --> 00:03:22,250 Speaker 1: Second, in the Chinese context, clearly a lot of things 60 00:03:22,250 --> 00:03:24,169 Speaker 1: are going from China to other countries to make their 61 00:03:24,169 --> 00:03:25,729 Speaker 1: way to the US. I mean this is the old 62 00:03:25,729 --> 00:03:28,809 Speaker 1: China plus one transshipment story. I think the Americans will 63 00:03:28,809 --> 00:03:32,079 Speaker 1: try to crack down on that, but so far, that 64 00:03:32,080 --> 00:03:33,960 Speaker 1: narrative is still very much alive. 65 00:03:34,274 --> 00:03:38,035 Speaker 1: Then there is this thing that many countries outside the 66 00:03:38,035 --> 00:03:40,115 Speaker 1: US worry, which is that the Chinese can't sell a 67 00:03:40,115 --> 00:03:42,785 Speaker 1: lot to the US they will start selling even more 68 00:03:42,785 --> 00:03:45,714 Speaker 1: at even cheaper price to their countries. So the excess 69 00:03:45,714 --> 00:03:48,634 Speaker 1: capacity ending up in non-US parts of the world, surely 70 00:03:48,875 --> 00:03:50,154 Speaker 1: that is also part of the dynamic. 71 00:03:50,619 --> 00:03:55,229 Speaker 1: And the key point is, even though these export numbers 72 00:03:55,229 --> 00:03:59,369 Speaker 1: are decent, uh they will maybe a mirage or a chimera, 73 00:03:59,779 --> 00:04:04,369 Speaker 1: it will not last. Uh, if you think that the 74 00:04:04,619 --> 00:04:08,259 Speaker 1: end of a reciprocalary pause would be marked by big 75 00:04:08,259 --> 00:04:11,139 Speaker 1: beautiful agreements with the US and many other countries, I 76 00:04:11,139 --> 00:04:12,139 Speaker 1: think you'll be disappointed. 77 00:04:12,479 --> 00:04:15,240 Speaker 1: I think we're not going back to pre-Trump days or 78 00:04:15,240 --> 00:04:19,790 Speaker 1: even pre-January days in global trade restrictions will be substantial. 79 00:04:20,200 --> 00:04:22,559 Speaker 1: Watch for trade numbers to fall sentiments, not the other 80 00:04:22,559 --> 00:04:26,589 Speaker 1: way around. So that's our key message. It's not gonna last. 81 00:04:26,760 --> 00:04:28,839 Speaker 1: All right, now, let's talk about the Middle East, which 82 00:04:28,839 --> 00:04:32,309 Speaker 1: unfortunately has been commanding the headlines for all the wrong reasons, 83 00:04:32,678 --> 00:04:36,649 Speaker 1: and the uncertainty is considerable, all sorts of really terrible 84 00:04:36,649 --> 00:04:38,880 Speaker 1: scenarios can be conjured. You don't really need to work 85 00:04:38,880 --> 00:04:40,649 Speaker 1: very hard at them and 86 00:04:41,149 --> 00:04:45,970 Speaker 1: That spectrum of extremely adverse outcomes, to say adverse outcomes, uh, 87 00:04:46,010 --> 00:04:48,678 Speaker 1: the market seems to be sort of coalescing around the 88 00:04:48,678 --> 00:04:51,250 Speaker 1: less adverse, it's all sort of going to work out, 89 00:04:51,410 --> 00:04:53,808 Speaker 1: not a big deal sort of scenario, uh, pretty impressive, 90 00:04:53,850 --> 00:04:54,488 Speaker 1: I got to say. 91 00:04:55,339 --> 00:04:58,209 Speaker 1: Um, looking at the movement of risk assets so far, 92 00:04:58,540 --> 00:05:01,320 Speaker 1: we find the market's response centered our expectation of a 93 00:05:01,320 --> 00:05:04,500 Speaker 1: short duration to conflagration. It'll end with a severely weakened 94 00:05:04,500 --> 00:05:08,700 Speaker 1: Iran and highly emboldened Israel, quite a bit of facilitation 95 00:05:08,700 --> 00:05:11,659 Speaker 1: from the US, but I suppose the market is taking 96 00:05:11,660 --> 00:05:15,299 Speaker 1: its cues from previous episodes of conflict. Look, there was 97 00:05:15,299 --> 00:05:18,979 Speaker 1: an Iraq-Iran war for eight years in the 80s, and 98 00:05:18,980 --> 00:05:21,178 Speaker 1: then there were lots of disruptions to oil and gas 99 00:05:21,178 --> 00:05:24,109 Speaker 1: supply production at that time, but that didn't really 100 00:05:24,600 --> 00:05:28,359 Speaker 1: Bring us the 1970s style oil shock. Similarly, when Saddam 101 00:05:28,359 --> 00:05:33,790 Speaker 1: Hussein was withdrawing from Kuwait in 191 after the US 102 00:05:33,790 --> 00:05:37,190 Speaker 1: led coalition sort of, you know, drove them back to Iraq, 103 00:05:37,480 --> 00:05:41,079 Speaker 1: they set on fire, you know, oil field after oil 104 00:05:41,079 --> 00:05:42,549 Speaker 1: field there was spectacular. 105 00:05:44,059 --> 00:05:47,100 Speaker 1: Scary, uh, dystopian images coming out of Kuwait, you know, 106 00:05:47,140 --> 00:05:51,380 Speaker 1: sky-high plumes and raging fire. But even then, if you 107 00:05:51,380 --> 00:05:53,619 Speaker 1: look at the oil price chart from the 80s and 108 00:05:53,619 --> 00:05:56,299 Speaker 1: early 90s, you'll be able to not be able to 109 00:05:56,299 --> 00:05:59,670 Speaker 1: find out when these events happen. Um, oil prices went 110 00:05:59,670 --> 00:06:01,269 Speaker 1: up a little bit here and there, but not at 111 00:06:01,269 --> 00:06:04,899 Speaker 1: a time, not in a big manner. Uh and now, 112 00:06:05,100 --> 00:06:08,459 Speaker 1: uh we're talking about 2025 when the supply side of 113 00:06:08,459 --> 00:06:09,899 Speaker 1: the oil market is ample. 114 00:06:10,420 --> 00:06:12,868 Speaker 1: Ah, outside of the Middle East, whether it is the 115 00:06:12,869 --> 00:06:16,739 Speaker 1: US or the uh Gulf, or Mexican Gulf, US Gulf, 116 00:06:16,820 --> 00:06:18,329 Speaker 1: whatever you call it, or Latin America. 117 00:06:18,950 --> 00:06:22,230 Speaker 1: Ample energy being produced in that part of the world, uh, 118 00:06:22,290 --> 00:06:25,690 Speaker 1: and the demand is fairly muted. So, I suppose that's 119 00:06:25,690 --> 00:06:31,119 Speaker 1: why the the likelihood of a big oil rally is not, uh, 120 00:06:31,209 --> 00:06:34,850 Speaker 1: you know, being being at the core of the market expectation. 121 00:06:35,609 --> 00:06:37,940 Speaker 1: Um, now, while hoping that the market's view is the 122 00:06:37,940 --> 00:06:40,899 Speaker 1: right one, that no oil shock is about to transpire, 123 00:06:40,980 --> 00:06:44,308 Speaker 1: it is important to recognize the criticality of the conflict. 124 00:06:45,329 --> 00:06:49,359 Speaker 1: Afflicted region at stake. Iran sits at a global choke 125 00:06:49,359 --> 00:06:52,719 Speaker 1: point of energy supply, disrupting which remains in its arsenal 126 00:06:52,720 --> 00:06:54,679 Speaker 1: of options. We hope they don't use it, but it's 127 00:06:54,678 --> 00:06:59,470 Speaker 1: definitely something that the Iranians can go for gas and oil, 128 00:06:59,640 --> 00:07:02,640 Speaker 1: crude or refined, these are all shipped from ports of 129 00:07:02,640 --> 00:07:05,559 Speaker 1: Persian Gulf to the narrow Straits of Hormuz from a 130 00:07:05,559 --> 00:07:09,510 Speaker 1: number of countries Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia's 131 00:07:09,510 --> 00:07:12,040 Speaker 1: east coast, all of this stuff, and of course the UAE. 132 00:07:12,480 --> 00:07:15,549 Speaker 1: About 50% of the world's oil consumption passes through the. 133 00:07:16,529 --> 00:07:20,630 Speaker 1: Rates in all of Qatar's LNG exports, the number one 134 00:07:20,630 --> 00:07:22,970 Speaker 1: LNG export producer in the world, exporter in the world, 135 00:07:23,179 --> 00:07:26,140 Speaker 1: that goes through the straits as well. So most of 136 00:07:26,140 --> 00:07:28,730 Speaker 1: the energy flowing from this region is bound for Asia, 137 00:07:28,760 --> 00:07:32,420 Speaker 1: so Asia's vulnerability is definitely substantial. 138 00:07:32,839 --> 00:07:35,679 Speaker 1: Now, I said earlier that, you know, it's certainly one 139 00:07:35,679 --> 00:07:37,519 Speaker 1: of the options that Iran can choose to pursue, but 140 00:07:37,519 --> 00:07:40,559 Speaker 1: let's also put it in context that there is a 141 00:07:40,559 --> 00:07:42,959 Speaker 1: very substantial US military presence in the region. The US 142 00:07:42,959 --> 00:07:45,809 Speaker 1: has a large navy base in Bahrain, a large air 143 00:07:45,809 --> 00:07:49,119 Speaker 1: force base in Qatar, and in the last few months, 144 00:07:49,160 --> 00:07:53,649 Speaker 1: it has moved even additional soldiers, weaponry, ships in the region. 145 00:07:54,000 --> 00:07:56,959 Speaker 1: So the US will certainly get in the way of 146 00:07:56,959 --> 00:08:00,920 Speaker 1: Iran if it did try to uh do substantial disruption 147 00:08:00,920 --> 00:08:02,399 Speaker 1: to oil supply in that part of the world. 148 00:08:04,140 --> 00:08:07,940 Speaker 1: So the desire to keep oil prices from spiking and 149 00:08:07,940 --> 00:08:11,640 Speaker 1: keeping US allies secure may lead to some degree of 150 00:08:11,640 --> 00:08:15,140 Speaker 1: ah conflagration that we're not really pricing yet. That's my 151 00:08:15,140 --> 00:08:19,100 Speaker 1: fear that if the Iran tries to do something like that, 152 00:08:19,290 --> 00:08:21,779 Speaker 1: American troops might get deployed in numbers not seen since 153 00:08:21,779 --> 00:08:25,380 Speaker 1: the war against Iraq. So Donald Trump may only have 154 00:08:25,380 --> 00:08:27,540 Speaker 1: recently given a speech about his desire to keep US 155 00:08:27,540 --> 00:08:29,059 Speaker 1: military involvement out of the Middle East. 156 00:08:29,589 --> 00:08:32,439 Speaker 1: Yeah, I don't know if the odds of that is very, 157 00:08:32,479 --> 00:08:36,750 Speaker 1: very high any longer. Once you have started going that path, um, 158 00:08:37,239 --> 00:08:40,559 Speaker 1: all sorts of, uh, developments can force the US's hand 159 00:08:40,559 --> 00:08:43,510 Speaker 1: in getting more involved in the region. So I 160 00:08:44,510 --> 00:08:49,909 Speaker 1: Keep those risks in mind. First, ah, the Iranians existential 161 00:08:49,909 --> 00:08:53,659 Speaker 1: needs would include the option of disrupting the Gulf of Hormuz, 162 00:08:54,070 --> 00:08:57,549 Speaker 1: Strait of Hormuz, and that could draw the US into 163 00:08:57,549 --> 00:09:00,789 Speaker 1: far deeper involvement in the region, contrary to whatever what 164 00:09:00,789 --> 00:09:05,228 Speaker 1: Donald Trump has decided to impart on his followers in 165 00:09:05,229 --> 00:09:07,909 Speaker 1: recent years. So, let's talk a little more about the 166 00:09:07,909 --> 00:09:09,590 Speaker 1: US but not necessarily in the context of the Middle East, 167 00:09:09,830 --> 00:09:12,960 Speaker 1: but in the context of the economy for the second 168 00:09:12,960 --> 00:09:13,739 Speaker 1: half of this year. 169 00:09:14,330 --> 00:09:17,159 Speaker 1: Now, we've had incessant noise this year, wars in the 170 00:09:17,159 --> 00:09:21,849 Speaker 1: Middle East, on again, off again tariffs, highly disruptive immigration 171 00:09:21,849 --> 00:09:25,449 Speaker 1: tightening measures, wide range of other things Donald Trump has done, 172 00:09:25,650 --> 00:09:29,369 Speaker 1: including going after schools. Um, this sort of noise uh 173 00:09:29,369 --> 00:09:33,840 Speaker 1: typically should have disruptive impact on the markets and the economy. 174 00:09:34,090 --> 00:09:37,770 Speaker 1: But if you look at the years report cards so far, 175 00:09:37,849 --> 00:09:39,689 Speaker 1: of course, you know, we had substantial volatility in April, 176 00:09:39,729 --> 00:09:43,609 Speaker 1: but beyond that, ah, it's been a remarkably calm year. 177 00:09:44,030 --> 00:09:47,150 Speaker 1: Um, now casting estimates from the Atlanta Fed is now 178 00:09:47,150 --> 00:09:50,069 Speaker 1: pointing to real GDP tracking 3% plus growth for the 179 00:09:50,070 --> 00:09:52,750 Speaker 1: second quarter, which would put the first half of 2025 180 00:09:52,750 --> 00:09:56,919 Speaker 1: growth in the 1.5% or above territory, and this is 181 00:09:56,919 --> 00:10:00,460 Speaker 1: after a virtually flat first quarter. In fact, slightly negative 182 00:10:00,460 --> 00:10:03,429 Speaker 1: quarter on quarter is the adjusted growth. Uh, and the 183 00:10:03,429 --> 00:10:05,510 Speaker 1: financial markets, they are made up for the losses that 184 00:10:05,510 --> 00:10:08,390 Speaker 1: were incurred after the April to reciprocal tariff announcements with 185 00:10:08,390 --> 00:10:11,859 Speaker 1: both NASDAQ and S&P in positive year to day territory. 186 00:10:13,320 --> 00:10:19,949 Speaker 1: Now, survey-based data reflected acute uncertainty and stagflation fears initially, 187 00:10:20,409 --> 00:10:23,359 Speaker 1: but they've begun to ease lately. St. Louis Fed's economic 188 00:10:23,359 --> 00:10:26,679 Speaker 1: policy uncertainty index is still highly elevated, but it is 189 00:10:26,679 --> 00:10:29,710 Speaker 1: down from the panic-induced peak reached a couple of months ago. 190 00:10:29,969 --> 00:10:32,869 Speaker 1: University of Michigan survey of consumer sentiment and inflation expectations 191 00:10:32,869 --> 00:10:36,919 Speaker 1: surveys are also showing that the peak fear is behind us. 192 00:10:38,039 --> 00:10:41,049 Speaker 1: The risk of this feel good moment being a temporary 193 00:10:41,049 --> 00:10:44,549 Speaker 1: one is, you know, non-trivial in my view, from an 194 00:10:44,549 --> 00:10:46,989 Speaker 1: oil shock emanating out of the Middle East to belated 195 00:10:46,989 --> 00:10:50,669 Speaker 1: but inevitable inflation passed from tariffs. Several developments are on 196 00:10:50,669 --> 00:10:53,569 Speaker 1: the cards that could undo the marginal improvement and sentiments 197 00:10:53,570 --> 00:10:55,369 Speaker 1: that are visible at this juncture. 198 00:10:55,750 --> 00:10:58,468 Speaker 1: And also, you know, there are some positive mitiggans as well. Uh, 199 00:10:58,559 --> 00:11:01,119 Speaker 1: put aside the funding issue for a second of US 200 00:11:01,119 --> 00:11:03,239 Speaker 1: fiscal balance. Just put aside that for a second, but 201 00:11:03,239 --> 00:11:05,319 Speaker 1: the fact of the matter is that the big beautiful 202 00:11:05,320 --> 00:11:09,520 Speaker 1: bill would come with a big fiscal impulse for the 203 00:11:09,520 --> 00:11:11,760 Speaker 1: US economy. There's going to be a series of tax 204 00:11:11,760 --> 00:11:16,080 Speaker 1: cuts and whether you are convinced that they're funded or 205 00:11:16,080 --> 00:11:20,468 Speaker 1: unfunded is a different story. They will add um tailwind 206 00:11:20,469 --> 00:11:22,679 Speaker 1: to consumption and sentiments, no question about that. 207 00:11:23,080 --> 00:11:25,599 Speaker 1: Uh, so this could be a potential offset to the 208 00:11:25,599 --> 00:11:29,079 Speaker 1: potential negatives at play. Now, you could argue that the 209 00:11:29,080 --> 00:11:32,590 Speaker 1: tax cut will be largely oriented towards the wealthy, true, 210 00:11:32,840 --> 00:11:35,159 Speaker 1: and they may have, uh, they tend to have lower 211 00:11:35,159 --> 00:11:39,439 Speaker 1: marginal propensity to consume, true, but it would still support 212 00:11:39,440 --> 00:11:42,869 Speaker 1: domestic consumption, be sure about that. So does that mean 213 00:11:42,869 --> 00:11:47,049 Speaker 1: that there's a need to upgrade GDP forecasts? We are 214 00:11:47,049 --> 00:11:52,169 Speaker 1: forecasting 1.5% for 2025, the IMF is forecasting 1.8%. 215 00:11:52,739 --> 00:11:55,460 Speaker 1: Consensus is somewhere in that region as well. Uh, I 216 00:11:55,460 --> 00:11:57,780 Speaker 1: think that there is a growing chance that growth might 217 00:11:57,780 --> 00:12:00,770 Speaker 1: be higher than our 1.5% forecast, but we don't think 218 00:12:00,770 --> 00:12:03,299 Speaker 1: that this is the time to change the forecast. As 219 00:12:03,299 --> 00:12:06,609 Speaker 1: we heard from Chair Powell during his June FOMC conference, 220 00:12:06,780 --> 00:12:09,819 Speaker 1: press conference, there are way too many uncertains out there 221 00:12:09,820 --> 00:12:12,739 Speaker 1: right now to make a decisive call on economic momentum 222 00:12:12,739 --> 00:12:15,989 Speaker 1: and the path of inflation, especially as the trade and 223 00:12:15,989 --> 00:12:20,380 Speaker 1: fiscal policy environment is beset with frequent escalations and about 224 00:12:20,609 --> 00:12:22,340 Speaker 1: about turns coming from the White House. 225 00:12:23,849 --> 00:12:26,849 Speaker 1: There are also other reasons to be cautious. Immigration measures 226 00:12:26,849 --> 00:12:30,530 Speaker 1: and public sector employee firings offer a multitude of risks. 227 00:12:30,650 --> 00:12:34,090 Speaker 1: On immigration, the ongoing crackdowns will hurt labor supply and 228 00:12:34,090 --> 00:12:41,400 Speaker 1: cost in a number of sectors, farming, fishing, shipping, construction, transportation, recreation. 229 00:12:41,890 --> 00:12:45,169 Speaker 1: Coming during the summer months when both farming and construction 230 00:12:45,169 --> 00:12:47,570 Speaker 1: reach their high season, this may play out actually sooner 231 00:12:47,570 --> 00:12:48,159 Speaker 1: than later. 232 00:12:48,599 --> 00:12:50,940 Speaker 1: Ah, and then on the do side, there was a 233 00:12:50,940 --> 00:12:54,239 Speaker 1: lot of firing, cancellation of funding, etc. and they are 234 00:12:54,239 --> 00:12:56,309 Speaker 1: beginning to show up in the data. If you look 235 00:12:56,309 --> 00:12:59,320 Speaker 1: at public sector's contribution to payrolls, it's the weakest in 236 00:12:59,320 --> 00:13:02,839 Speaker 1: a decade, weaker than Trump 1.0. And this is particularly 237 00:13:02,840 --> 00:13:05,239 Speaker 1: in contrast to the Biden years, but even in contrast 238 00:13:05,239 --> 00:13:08,559 Speaker 1: to the Trump years. Um, interestingly, by the way, this 239 00:13:08,559 --> 00:13:10,929 Speaker 1: is not just restricted to the public sector, the private 240 00:13:10,929 --> 00:13:11,890 Speaker 1: sector is also 241 00:13:12,140 --> 00:13:17,169 Speaker 1: Um, showing some loss of buoyancy, still positive, uh, payrolls growth, 242 00:13:17,419 --> 00:13:20,059 Speaker 1: decent numbers and six figures, but no longer in the 200, 243 00:13:20,070 --> 00:13:24,530 Speaker 1: 300 range, more like 100, 125, 50 range. So, if, um, 244 00:13:24,780 --> 00:13:26,630 Speaker 1: public sector job cuts, um, 245 00:13:27,570 --> 00:13:30,520 Speaker 1: Met a meaningful improvement to the fiscal position, then at least, 246 00:13:30,530 --> 00:13:33,049 Speaker 1: you know, you could argue that there's a upside. There's 247 00:13:33,049 --> 00:13:35,690 Speaker 1: a huge amount of debt, huge amount of deficit, these 248 00:13:35,690 --> 00:13:39,799 Speaker 1: firings and cost cuttings are unnecessary evil, one could argue. 249 00:13:40,049 --> 00:13:43,900 Speaker 1: But however, despite all the noise around defunding foreign aid, 250 00:13:44,130 --> 00:13:47,250 Speaker 1: public broadcasting, research, and education, it turns out that the 251 00:13:47,250 --> 00:13:49,599 Speaker 1: fiscal needle is not moving at all. 252 00:13:50,270 --> 00:13:53,390 Speaker 1: Burdened by ever rising interest payment costs, defense spending, as 253 00:13:53,390 --> 00:13:56,468 Speaker 1: well as Social Security and entitlement spending, public expenditure in 254 00:13:56,469 --> 00:13:59,630 Speaker 1: the US remains on an upswing. Through the third week 255 00:13:59,630 --> 00:14:04,189 Speaker 1: of June 2025, federal government spending was up 7.2% year 256 00:14:04,190 --> 00:14:05,770 Speaker 1: on year, compared to 257 00:14:06,390 --> 00:14:09,770 Speaker 1: Less than 1% growth during the same period last year. 258 00:14:09,940 --> 00:14:13,179 Speaker 1: So let's put that 7.21% in the real terms, right? 259 00:14:13,369 --> 00:14:16,659 Speaker 1: And just for inflation. Public spending in the US was 260 00:14:16,659 --> 00:14:19,979 Speaker 1: falling in real terms last year at this time. Public 261 00:14:19,979 --> 00:14:22,419 Speaker 1: spending in the US is rising in real time, in 262 00:14:22,419 --> 00:14:24,739 Speaker 1: real terms this year, robustly actually. 263 00:14:25,609 --> 00:14:29,309 Speaker 1: So we see 3 key drivers of economic slowdown ahead. 264 00:14:29,710 --> 00:14:34,169 Speaker 1: One is labor supply crunch due to mass deportation. Second 265 00:14:34,169 --> 00:14:36,950 Speaker 1: is rising cost of production, both due to labor crunch 266 00:14:36,950 --> 00:14:40,909 Speaker 1: as well as tariffs. And then third, the slowdown to 267 00:14:40,909 --> 00:14:44,830 Speaker 1: in the non-AI investment sphere due to uncertainty around trade 268 00:14:44,830 --> 00:14:48,789 Speaker 1: and investment policy. Uh I am again fearful that that 269 00:14:48,789 --> 00:14:50,340 Speaker 1: might again show up sooner than later. 270 00:14:50,950 --> 00:14:54,099 Speaker 1: Uh, moderation and company margin and profitabilities on the cars, 271 00:14:54,429 --> 00:14:57,190 Speaker 1: and the legal blue collar workers may see their wages 272 00:14:57,190 --> 00:14:58,590 Speaker 1: go up because that's the part of the market that 273 00:14:58,590 --> 00:15:01,030 Speaker 1: will tighten the outlook for a wide range of white 274 00:15:01,030 --> 00:15:03,109 Speaker 1: collar jobs is actually becoming quite gloomy. 275 00:15:03,869 --> 00:15:06,210 Speaker 1: So not only are we not going to change our 276 00:15:06,210 --> 00:15:10,690 Speaker 1: 2025 forecast to 1.5%, we'll keep it there, conceding there 277 00:15:10,690 --> 00:15:12,650 Speaker 1: might be a little bit of upside risk. We're actually 278 00:15:12,650 --> 00:15:14,169 Speaker 1: worried that some of the things that we just talked 279 00:15:14,169 --> 00:15:16,330 Speaker 1: about in terms of downside risk, it'll actually spill over 280 00:15:16,330 --> 00:15:20,280 Speaker 1: to 2026. So we're going to actually revise down our 281 00:15:20,280 --> 00:15:23,960 Speaker 1: 2026 forecast to 1.5% as well. 282 00:15:24,460 --> 00:15:26,940 Speaker 1: Uh, so we are in the non-recession camp. We have 283 00:15:26,940 --> 00:15:30,020 Speaker 1: always been there. We have not yo yo between non-recession recession. 284 00:15:30,059 --> 00:15:32,460 Speaker 1: We've always been in the non-recession camp. We think the 285 00:15:32,460 --> 00:15:34,900 Speaker 1: US economy will continue to grow. We're very much in 286 00:15:34,900 --> 00:15:39,770 Speaker 1: the sub trend growth camp for both 2025 and 2026. 287 00:15:39,979 --> 00:15:42,059 Speaker 1: What does it mean for the Fed? They'll cut rates. 288 00:15:42,260 --> 00:15:44,059 Speaker 1: They'll cut a couple of times this year, they'll cut 289 00:15:44,059 --> 00:15:45,859 Speaker 1: a couple of times next year. Can they cut a 290 00:15:45,859 --> 00:15:49,219 Speaker 1: lot more? It depends on the trajectory of inflation. 291 00:15:49,570 --> 00:15:51,690 Speaker 1: Uh, we think that above trade inflation is something that 292 00:15:51,690 --> 00:15:54,049 Speaker 1: the Fed will look through, argue that this is a 293 00:15:54,049 --> 00:15:57,479 Speaker 1: one-off tariffs will go away, the base effect will fade 294 00:15:57,479 --> 00:16:00,130 Speaker 1: in the subsequent year, and they will cut rates just 295 00:16:00,130 --> 00:16:02,409 Speaker 1: on the back of real economic weakness, but there's a 296 00:16:02,409 --> 00:16:04,179 Speaker 1: limit of how much they can cut if in the 297 00:16:04,179 --> 00:16:07,760 Speaker 1: inflation remain fairly sticky, and my concern is it will, 298 00:16:07,770 --> 00:16:11,250 Speaker 1: it will be way higher than 2.5% both in 25 299 00:16:11,250 --> 00:16:16,000 Speaker 1: and 26. OK, now, some questions from you guys. Japan. 300 00:16:16,679 --> 00:16:18,270 Speaker 1: Number of questions. So he has a number of questions, 301 00:16:18,390 --> 00:16:21,429 Speaker 1: I'll have to provide a bunch of answers. Ah, how, 302 00:16:21,510 --> 00:16:23,750 Speaker 1: how long can the US keep increasing the debt? 303 00:16:24,260 --> 00:16:25,549 Speaker 1: The short answer is it can do it for a 304 00:16:25,549 --> 00:16:31,729 Speaker 1: very long time. 100% that that GDP ratio is something 305 00:16:31,729 --> 00:16:36,369 Speaker 1: that the US can handle. It's an uncomfortable number. Paying 5% 306 00:16:36,369 --> 00:16:39,409 Speaker 1: of GDP and interest rates is no good. It crowds 307 00:16:39,409 --> 00:16:42,409 Speaker 1: out a lot of other investments, but a country that 308 00:16:42,409 --> 00:16:44,770 Speaker 1: basically issues debt in its own currency can push up 309 00:16:44,770 --> 00:16:49,320 Speaker 1: debt GDP ratios substantially more. There's no technical barriers to that, 310 00:16:49,489 --> 00:16:51,609 Speaker 1: even if the market doesn't like it and push the 311 00:16:51,609 --> 00:16:54,090 Speaker 1: interest rate, that doesn't prevent the US from issuing more debt. 312 00:16:54,880 --> 00:16:58,099 Speaker 1: I'm going to talk about various mechanisms that can come 313 00:16:58,099 --> 00:17:00,619 Speaker 1: around managing that debt a little later. In fact, the 314 00:17:00,619 --> 00:17:03,260 Speaker 1: next question from G10 is that under what conditions it 315 00:17:03,260 --> 00:17:05,540 Speaker 1: can afford to do it? Well, let's talk about the 316 00:17:05,540 --> 00:17:07,849 Speaker 1: really good scenario that the Republicans are hoping and praying for. 317 00:17:07,859 --> 00:17:11,140 Speaker 1: It can keep going under a strong growth scenario. If 318 00:17:11,140 --> 00:17:12,380 Speaker 1: indeed Trump's 319 00:17:13,239 --> 00:17:16,780 Speaker 1: Tax cuts and the AI revolution that is underway. All 320 00:17:16,780 --> 00:17:20,550 Speaker 1: these things lead to a big investment cycle, productivity growth, 321 00:17:21,030 --> 00:17:23,859 Speaker 1: above current growth rate, 2.5, 3% growth year after year, 322 00:17:23,939 --> 00:17:26,819 Speaker 1: then all of a sudden these deficit numbers won't look 323 00:17:26,819 --> 00:17:29,849 Speaker 1: that scary. Growth alone will take care of it. Um, 324 00:17:29,859 --> 00:17:31,979 Speaker 1: and also, if things don't go that way. 325 00:17:32,310 --> 00:17:34,969 Speaker 1: The US government can do what the Japanese have done 326 00:17:34,969 --> 00:17:36,688 Speaker 1: in the past. The US government can do what the 327 00:17:36,689 --> 00:17:38,890 Speaker 1: Indian government has used to do in the past. For 328 00:17:38,890 --> 00:17:42,369 Speaker 1: the central bank to buy more debt, force banks and 329 00:17:42,369 --> 00:17:45,969 Speaker 1: other financial institutions to buy more debt, for ceilings on 330 00:17:45,969 --> 00:17:48,849 Speaker 1: interest rates, target U curve, all kinds of stuff, right? 331 00:17:48,910 --> 00:17:52,290 Speaker 1: It's not something novel, markets will not be happy to 332 00:17:52,290 --> 00:17:54,050 Speaker 1: see those things, but they will not be shocked by 333 00:17:54,050 --> 00:17:55,969 Speaker 1: it because other countries in the world have done it. 334 00:17:56,130 --> 00:17:57,489 Speaker 1: And then there's those good old QE. 335 00:17:58,310 --> 00:18:00,910 Speaker 1: So, um, there are, there are many ways one can 336 00:18:00,910 --> 00:18:04,540 Speaker 1: think that uh this thing, this party can go on. Now, 337 00:18:04,780 --> 00:18:08,459 Speaker 1: Gitta's follow-up question is what can lead to an inflection point? Well, 338 00:18:08,869 --> 00:18:11,349 Speaker 1: you could think about, uh, you know, forget about the 339 00:18:11,349 --> 00:18:13,510 Speaker 1: list trust moment. I don't think that sort of, you know, 340 00:18:13,550 --> 00:18:17,119 Speaker 1: bond vigilante attack on the US is not that likely. Uh, 341 00:18:17,270 --> 00:18:19,150 Speaker 1: you will have to do lots of lots of things 342 00:18:19,150 --> 00:18:21,869 Speaker 1: wrong to do that and having somebody like Scott Besson 343 00:18:21,869 --> 00:18:24,458 Speaker 1: as Treasury secretary, I personally don't think that the US 344 00:18:24,459 --> 00:18:25,790 Speaker 1: is going to go down that path. 345 00:18:26,560 --> 00:18:28,948 Speaker 1: But if we wanna talk about 346 00:18:29,709 --> 00:18:34,500 Speaker 1: At, uh, inflection point, uh, we can talk about election-related risk. 347 00:18:34,709 --> 00:18:36,939 Speaker 1: November next year is a midterm, if 348 00:18:37,599 --> 00:18:41,629 Speaker 1: Early polling is the marker for what is coming 1516 349 00:18:41,630 --> 00:18:43,550 Speaker 1: months from now. The House will be taken over by 350 00:18:43,550 --> 00:18:46,229 Speaker 1: the Democrats, perhaps also the Senate, and that would be 351 00:18:46,229 --> 00:18:49,629 Speaker 1: policy paralysis. So if we go in there with really 352 00:18:49,630 --> 00:18:54,389 Speaker 1: bad fiscal dynamic and then between the president and the Congress, 353 00:18:54,430 --> 00:18:57,670 Speaker 1: there is a standoff and nothing gets done, then we 354 00:18:57,670 --> 00:18:59,670 Speaker 1: could have a big inflation point and we might have 355 00:18:59,670 --> 00:19:01,709 Speaker 1: to have some sort of shock therapy in the US 356 00:19:01,709 --> 00:19:02,130 Speaker 1: where 357 00:19:02,439 --> 00:19:05,540 Speaker 1: Uh, debt ceiling is not breached or there's no agreement 358 00:19:05,540 --> 00:19:07,739 Speaker 1: on that, to extend that, uh, the market goes on 359 00:19:07,739 --> 00:19:09,579 Speaker 1: a strike, all sorts of bad things can happen at 360 00:19:09,579 --> 00:19:12,550 Speaker 1: that point. So, I would sort of watch out as 361 00:19:12,550 --> 00:19:15,020 Speaker 1: that as a marker for inflection point or some major 362 00:19:15,020 --> 00:19:17,219 Speaker 1: risk around debt deficit situation. 363 00:19:18,180 --> 00:19:20,550 Speaker 1: Um, what do all these things mean? Would it raise 364 00:19:20,550 --> 00:19:22,949 Speaker 1: or impact the base rate deal expectation from US treasury 365 00:19:22,949 --> 00:19:26,349 Speaker 1: over the long term? Well, um, base rate, not as 366 00:19:26,349 --> 00:19:28,430 Speaker 1: long as Trump is around. I think the do bias 367 00:19:28,430 --> 00:19:31,229 Speaker 1: in the US central bank will be substantial, otherwise, you know, 368 00:19:31,349 --> 00:19:32,919 Speaker 1: Trump will create so much noise. 369 00:19:33,270 --> 00:19:35,419 Speaker 1: Uh, so I don't think the Fed is in any 370 00:19:35,420 --> 00:19:39,140 Speaker 1: position to push up the base rate even under this 371 00:19:39,140 --> 00:19:41,979 Speaker 1: sort of, you know, debt scenario. Uh, and then on 372 00:19:41,979 --> 00:19:45,510 Speaker 1: the longer end, yeah, curve can steepen for sure. Uh, 373 00:19:45,780 --> 00:19:47,969 Speaker 1: there is only so much that the market can absorb 374 00:19:47,969 --> 00:19:51,500 Speaker 1: if the US keeps on issuing year after year, 5-6% 375 00:19:51,500 --> 00:19:53,899 Speaker 1: of GDP worth of deficit, especially if the rest of 376 00:19:53,900 --> 00:19:57,569 Speaker 1: the world becomes concerned because a chunk of US fiscal 377 00:19:57,569 --> 00:19:59,219 Speaker 1: debt is funded by the rest of the world. 378 00:19:59,829 --> 00:20:02,510 Speaker 1: And then the follow up question is, you know, how 379 00:20:02,510 --> 00:20:06,109 Speaker 1: will it impact global bond markets? Well, we could see 380 00:20:06,109 --> 00:20:09,869 Speaker 1: a situation where the global bond holders don't necessarily go 381 00:20:09,869 --> 00:20:12,430 Speaker 1: on a strike in terms of not wanting to hold 382 00:20:12,430 --> 00:20:14,310 Speaker 1: US dollar bonds. They still would want to. It is 383 00:20:14,310 --> 00:20:17,829 Speaker 1: the most liquid, largest bond market in the world. It 384 00:20:17,829 --> 00:20:20,790 Speaker 1: does offer attractive yield. People will keep investing in it, 385 00:20:20,829 --> 00:20:21,188 Speaker 1: but 386 00:20:21,849 --> 00:20:24,660 Speaker 1: That may be the stock story that I'm not necessarily 387 00:20:24,660 --> 00:20:26,859 Speaker 1: going to reduce my stock of US Treasury holdings, let 388 00:20:26,859 --> 00:20:30,218 Speaker 1: them run their course, but in terms of flows, I 389 00:20:30,219 --> 00:20:33,569 Speaker 1: think people will display a great degree of home buyers. 390 00:20:33,900 --> 00:20:36,869 Speaker 1: European money managers would like to buy European bonds, Japanese 391 00:20:36,869 --> 00:20:40,619 Speaker 1: money managers would buy Japanese bonds, Australians would buy Aussie 392 00:20:40,619 --> 00:20:43,020 Speaker 1: bonds and maybe look around Southeast Asia as well as 393 00:20:43,020 --> 00:20:45,180 Speaker 1: look at the West. So that sort of stuff is 394 00:20:45,180 --> 00:20:47,459 Speaker 1: certainly on the cards and it's not in the long term. 395 00:20:47,540 --> 00:20:49,650 Speaker 1: I think it's playing out as we speak right now. 396 00:20:53,060 --> 00:20:54,030 Speaker 1: Next question is, 397 00:20:55,000 --> 00:20:58,479 Speaker 1: What are the uh alternatives for investors uh to look 398 00:20:58,479 --> 00:21:02,839 Speaker 1: at as a diversification without increasing the risk significantly? Well, 399 00:21:02,959 --> 00:21:05,880 Speaker 1: I think there are many things uh investors can do 400 00:21:05,880 --> 00:21:09,119 Speaker 1: uh in terms of not, you know, being fully. 401 00:21:09,469 --> 00:21:12,909 Speaker 1: Uh, focused on the US exceptionalism story, which has been 402 00:21:12,910 --> 00:21:14,709 Speaker 1: the case for the last 15 years. Time to sort 403 00:21:14,709 --> 00:21:16,510 Speaker 1: of look around a bit, but I don't think looking 404 00:21:16,510 --> 00:21:19,589 Speaker 1: around means embracing risk. I think buying European bonds or 405 00:21:19,589 --> 00:21:23,179 Speaker 1: Japanese bonds, Australian bonds or Singaporean bonds do not add 406 00:21:23,180 --> 00:21:25,790 Speaker 1: any risk to your portfolio. You might give a little 407 00:21:25,790 --> 00:21:28,030 Speaker 1: bit of yield, but on a cross currency basis, I 408 00:21:28,030 --> 00:21:29,510 Speaker 1: think it's still pretty, pretty attractive. 409 00:21:29,880 --> 00:21:32,849 Speaker 1: So that would be one, to look at non US 410 00:21:32,849 --> 00:21:36,169 Speaker 1: dollar bonds, but, uh, credit, corporate credit, same story, there 411 00:21:36,170 --> 00:21:39,369 Speaker 1: are lots of excellent US companies which uh issue. 412 00:21:40,739 --> 00:21:44,420 Speaker 1: Debt, uh, at an attractive yield, I would buy that, uh, 413 00:21:44,540 --> 00:21:46,979 Speaker 1: sometimes over US bonds, if one is, you know, sort 414 00:21:46,979 --> 00:21:49,540 Speaker 1: of so much worried about the US Treasury outlook. 415 00:21:50,339 --> 00:21:54,020 Speaker 1: Ah, similarly, ah, there's outstanding companies around the world with 416 00:21:54,020 --> 00:21:57,510 Speaker 1: very good cash flow, and they issue attractively priced, uh, 417 00:21:57,619 --> 00:22:00,060 Speaker 1: bonds as well. Uh, so I would look at corporate credit, 418 00:22:00,140 --> 00:22:02,819 Speaker 1: highly rated corporate credit, non-US bonds, and of course the 419 00:22:02,819 --> 00:22:06,250 Speaker 1: usual uh spectrum of things like gold, which is having 420 00:22:06,250 --> 00:22:08,540 Speaker 1: this golden run, but certainly there is a. 421 00:22:08,594 --> 00:22:11,704 Speaker 1: No harm adding some ah gold as a hedge to 422 00:22:11,704 --> 00:22:14,704 Speaker 1: all the geopolitical uncertainties we have. Ah, gold tends to 423 00:22:14,704 --> 00:22:17,103 Speaker 1: do very well in these uncertain times. We've seen in 424 00:22:17,104 --> 00:22:19,214 Speaker 1: the past, we're seeing it now, and that's the reason, 425 00:22:19,224 --> 00:22:24,025 Speaker 1: despite real rate being positive, gold remains a core part 426 00:22:24,025 --> 00:22:28,635 Speaker 1: of many portfolios and will not be given um sort of, 427 00:22:28,665 --> 00:22:33,094 Speaker 1: you know, scant attention. It will receive substantial attention. All right, uh, Gan, 428 00:22:33,125 --> 00:22:34,574 Speaker 1: you asked lots of lots of questions. 429 00:22:35,310 --> 00:22:38,060 Speaker 1: Thanks for that, appreciate it. Frederick's question. 430 00:22:38,859 --> 00:22:41,379 Speaker 1: Can you speak a bit about US Treasury, please? It 431 00:22:41,380 --> 00:22:42,738 Speaker 1: seems to me that the bond market in general is 432 00:22:42,739 --> 00:22:46,140 Speaker 1: undergoing fundamental changes. So what can I say to Frederick's 433 00:22:46,140 --> 00:22:48,619 Speaker 1: questions that I have not said already? Well, first of all, 434 00:22:48,739 --> 00:22:51,619 Speaker 1: if you look at the financial stability survey that the 435 00:22:51,619 --> 00:22:56,889 Speaker 1: US Fed issued last October, October 2025, there was an 436 00:22:56,890 --> 00:23:00,579 Speaker 1: interesting point there that bond market liquidity is not what 437 00:23:00,579 --> 00:23:01,540 Speaker 1: it used to be. 438 00:23:02,119 --> 00:23:06,439 Speaker 1: Uh, you know, regulations after the GFC change, the banks, 439 00:23:06,520 --> 00:23:09,109 Speaker 1: the kind of bonds that holding that they can have, 440 00:23:09,199 --> 00:23:11,280 Speaker 1: how much of it is, hold to maturity, how much 441 00:23:11,280 --> 00:23:13,159 Speaker 1: of its market to market, all those things change quite 442 00:23:13,160 --> 00:23:15,880 Speaker 1: a bit. And, and now what we see and in 443 00:23:15,880 --> 00:23:19,520 Speaker 1: that financial stability survey, uh, the Fed makes that observation 444 00:23:19,520 --> 00:23:22,469 Speaker 1: is that what is is off the run of volume that, 445 00:23:22,479 --> 00:23:25,079 Speaker 1: you know, after immediately after issuance, you know, how much 446 00:23:25,079 --> 00:23:28,119 Speaker 1: secondary market trading happens with those bonds is not particularly high. 447 00:23:28,785 --> 00:23:32,534 Speaker 1: Um, so if indeed there are events during which trade 448 00:23:32,535 --> 00:23:35,484 Speaker 1: sellers are out there in large numbers, they have a 449 00:23:35,484 --> 00:23:39,724 Speaker 1: hard time finding buyers and that could create um large 450 00:23:39,724 --> 00:23:42,925 Speaker 1: spreads or large movements of price in a very short 451 00:23:42,925 --> 00:23:45,165 Speaker 1: period of time. So that risk is there. So earlier 452 00:23:45,165 --> 00:23:46,194 Speaker 1: I was trying to be fairly 453 00:23:46,479 --> 00:23:49,679 Speaker 1: Uh, cognizant or complacent about the risks in the US 454 00:23:49,680 --> 00:23:52,399 Speaker 1: Treasury market. The US can keep issuing. It can do 455 00:23:52,400 --> 00:23:55,079 Speaker 1: all sorts of financial repression type measures by capping yields 456 00:23:55,079 --> 00:23:57,920 Speaker 1: and stuff like that. But we can also have situations 457 00:23:57,920 --> 00:24:01,930 Speaker 1: where things happen very quickly and around that yield spike 458 00:24:01,930 --> 00:24:04,589 Speaker 1: or people have a hard time settling their accounts. That 459 00:24:04,589 --> 00:24:08,400 Speaker 1: sort of risk is substantially there and uh maybe one 460 00:24:08,400 --> 00:24:10,420 Speaker 1: way to solve that going forward would be to go 461 00:24:10,420 --> 00:24:12,969 Speaker 1: back to the GFC prescription or the pandemic prescription, which 462 00:24:12,969 --> 00:24:15,359 Speaker 1: is go back to QE. The Fed has done quite 463 00:24:15,359 --> 00:24:16,000 Speaker 1: a bit of QT. 464 00:24:16,959 --> 00:24:18,319 Speaker 1: Its balance sheet has 465 00:24:20,770 --> 00:24:24,599 Speaker 1: Come down quite a bit on GFC levels, it'll never happen. 466 00:24:24,949 --> 00:24:27,948 Speaker 1: Ample liquidity is something that the market expects coming from 467 00:24:27,949 --> 00:24:30,989 Speaker 1: the Fed and if indeed we're going to see some 468 00:24:30,989 --> 00:24:33,869 Speaker 1: degree of stress in the treasury market, the Fed, although 469 00:24:33,869 --> 00:24:37,719 Speaker 1: it is independent, it focuses on unemployment and 470 00:24:38,130 --> 00:24:41,250 Speaker 1: Ah, inflation, but it will not want the markets to 471 00:24:41,250 --> 00:24:43,968 Speaker 1: become unstable. So under the guise of financial stability, we 472 00:24:43,969 --> 00:24:46,379 Speaker 1: can see the Fed coming in and working there. So 473 00:24:46,380 --> 00:24:49,010 Speaker 1: that is the main point. So there are some fundamental 474 00:24:49,010 --> 00:24:52,060 Speaker 1: changes that have taken place in the US bond market 475 00:24:52,060 --> 00:24:54,930 Speaker 1: because of regulation, and those regulations may have to be undone. 476 00:24:55,010 --> 00:24:57,930 Speaker 1: Maybe the US will have to let banks and financial 477 00:24:57,930 --> 00:25:00,968 Speaker 1: institutions hold more and give them good risk ratings so 478 00:25:00,969 --> 00:25:01,410 Speaker 1: that they do. 479 00:25:02,349 --> 00:25:04,770 Speaker 1: Um, all right, so then what else is there? Uh, 480 00:25:04,959 --> 00:25:08,079 Speaker 1: what is the future of Southeast Asian sovereign debt? Presumably 481 00:25:08,079 --> 00:25:11,149 Speaker 1: we will see fiscal response to the worse, worsening global outlook, 482 00:25:11,359 --> 00:25:14,000 Speaker 1: but after the pandemic, fiscal room is limited. I wouldn't 483 00:25:14,000 --> 00:25:16,160 Speaker 1: worry too much about it. I think that there is 484 00:25:16,160 --> 00:25:20,229 Speaker 1: decent fiscal room in Southeast Asia. Southeast Asian countries, maybe 485 00:25:20,229 --> 00:25:24,879 Speaker 1: Thailand could be one exception, but I think countries like Philippines, Indonesia, Malaysia, 486 00:25:25,000 --> 00:25:28,760 Speaker 1: Singapore certainly have ample room to issue if they needed to. 487 00:25:29,130 --> 00:25:31,569 Speaker 1: Uh, I don't think there is massive concern in these 488 00:25:31,569 --> 00:25:35,089 Speaker 1: countries to make up for a shortfall in external demand 489 00:25:35,089 --> 00:25:38,569 Speaker 1: through fiscal pump priming. Uh, these countries are not that 490 00:25:38,569 --> 00:25:40,369 Speaker 1: preemptive in this regard. They will do it. 491 00:25:43,280 --> 00:25:46,319 Speaker 1: If the shock becomes visible, so whether it is trade 492 00:25:46,319 --> 00:25:49,000 Speaker 1: or investment, things don't look that bad, given the amount 493 00:25:49,000 --> 00:25:51,119 Speaker 1: of noise we have in the world, Southeast Asian economies 494 00:25:51,119 --> 00:25:53,910 Speaker 1: are pretty much holding up. Uh, but just in terms 495 00:25:53,910 --> 00:25:57,810 Speaker 1: of the issuance outlook, yeah, they'll issue more. They don't 496 00:25:57,810 --> 00:26:00,520 Speaker 1: need to go on a big debt funded bench. They 497 00:26:00,520 --> 00:26:04,280 Speaker 1: have ample savings. Their current account balances are good, domestic 498 00:26:04,280 --> 00:26:05,468 Speaker 1: savings ratios are high. 499 00:26:05,910 --> 00:26:10,849 Speaker 1: Uh, so developing domestic capital markets, focusing on more buoyant 500 00:26:10,849 --> 00:26:13,849 Speaker 1: equity markets, all those things could help, in addition to 501 00:26:13,849 --> 00:26:17,129 Speaker 1: helping the sovereign debt issuance to take place in a 502 00:26:17,130 --> 00:26:18,010 Speaker 1: stable manner. 503 00:26:18,810 --> 00:26:21,698 Speaker 1: Tapping into domestic capital and maybe some regional capital, don't 504 00:26:21,699 --> 00:26:24,188 Speaker 1: have to go all over the world to market Southeast 505 00:26:24,189 --> 00:26:28,280 Speaker 1: Asia's debt. There's enough savings and interest among insurers, uh, 506 00:26:28,449 --> 00:26:30,869 Speaker 1: money managers, sovereign wealth funds in Asia, in my view, 507 00:26:31,010 --> 00:26:34,130 Speaker 1: to fund Southeast Asia's sovereign needs, and I'm definitely a 508 00:26:34,130 --> 00:26:37,129 Speaker 1: buyer of sovereign bonds from Southeast Asia, even at a 509 00:26:37,130 --> 00:26:37,849 Speaker 1: time like this. 510 00:26:39,410 --> 00:26:43,050 Speaker 1: Ah, but just one caveat, which is that if a 511 00:26:43,050 --> 00:26:44,770 Speaker 1: country is sort of expanding. 512 00:26:45,560 --> 00:26:49,319 Speaker 1: Sending its deficit, uh, because it has an ambitious growth agenda, 513 00:26:49,530 --> 00:26:51,649 Speaker 1: it has to sort of convince the world that it 514 00:26:51,650 --> 00:26:56,639 Speaker 1: is going to do quality spending of that deficit, uh, otherwise, 515 00:26:56,849 --> 00:27:00,500 Speaker 1: you know, people will start demanding a higher risk premium. So, 516 00:27:00,849 --> 00:27:05,448 Speaker 1: quality spending, a stable regulatory environment with respect to tax, 517 00:27:06,089 --> 00:27:07,459 Speaker 1: capital repatriation. 518 00:27:07,869 --> 00:27:10,349 Speaker 1: bond pricing, bond trading, all of those things are I 519 00:27:10,349 --> 00:27:14,149 Speaker 1: think quite important for countries indeed thinking about widening a 520 00:27:14,150 --> 00:27:17,929 Speaker 1: sovereign issuance and wanting global investors to hold it in 521 00:27:17,930 --> 00:27:19,069 Speaker 1: with with enthusiasm. 522 00:27:19,910 --> 00:27:23,430 Speaker 1: A question from TC, my former colleague at DBS. In 523 00:27:23,430 --> 00:27:26,069 Speaker 1: the face of uncertain trade and economic outlook and a 524 00:27:26,069 --> 00:27:29,349 Speaker 1: steep USD curve and real rates, how would tight Asian 525 00:27:29,349 --> 00:27:33,150 Speaker 1: credit market perform from here? Uh, I think Asian credit 526 00:27:33,150 --> 00:27:35,790 Speaker 1: market can stay rich. I'll tell you why. I think 527 00:27:35,790 --> 00:27:38,550 Speaker 1: that there's a bit of an illusion in the credit market, 528 00:27:38,589 --> 00:27:42,948 Speaker 1: which is that if I get 5, 6% yield, I'm happy. 529 00:27:43,369 --> 00:27:47,250 Speaker 1: Even if US yield is 4.5%, I don't necessarily need 530 00:27:47,250 --> 00:27:49,979 Speaker 1: 200 basis points pick up from that. It doesn't make 531 00:27:49,979 --> 00:27:51,849 Speaker 1: any sense. It should be that, you know, spreads should 532 00:27:51,849 --> 00:27:55,079 Speaker 1: be constant, but it seems like as US rates go up, 533 00:27:55,329 --> 00:27:59,599 Speaker 1: spreads contract. Uh, investors seem to be happy in mid 534 00:27:59,810 --> 00:28:02,989 Speaker 1: or slightly higher than mid single digit yield, and even 535 00:28:02,989 --> 00:28:05,050 Speaker 1: if the US is in mid single digit. 536 00:28:05,270 --> 00:28:06,899 Speaker 1: It doesn't change the view that much and as a 537 00:28:06,900 --> 00:28:10,540 Speaker 1: result we see spreads compressed. So the US rates hang 538 00:28:10,540 --> 00:28:14,810 Speaker 1: around that 4-ish, uh, we will see spreads remain tight 539 00:28:14,810 --> 00:28:19,760 Speaker 1: in Southeast Asia for institutions that offer 5.5, 6% yield. 540 00:28:20,020 --> 00:28:21,819 Speaker 1: I don't see that going away anytime soon and as 541 00:28:21,819 --> 00:28:24,989 Speaker 1: the Fed starts cutting, I think the long end is 542 00:28:24,989 --> 00:28:26,739 Speaker 1: not going to be coming down as much as the 543 00:28:26,739 --> 00:28:29,349 Speaker 1: short end. So I think this situation would likely persist 544 00:28:29,579 --> 00:28:32,899 Speaker 1: and yeah, I, I think that uh Asian credit remains rich. 545 00:28:33,880 --> 00:28:36,560 Speaker 1: Not everything, I mean, we all know that property developers 546 00:28:36,560 --> 00:28:39,359 Speaker 1: in China or some banks here and there, there are 547 00:28:39,359 --> 00:28:43,079 Speaker 1: some ah trade war related risks, there's some property sector 548 00:28:43,079 --> 00:28:46,199 Speaker 1: slowdown related risk, ah, all that is pretty well understood 549 00:28:46,199 --> 00:28:49,130 Speaker 1: in the market, but the higher rated bonds that have 550 00:28:49,500 --> 00:28:52,040 Speaker 1: rallied substantially in Asia, I think they will remain so. 551 00:28:52,760 --> 00:28:56,839 Speaker 1: Um, question from Ken, where to invest at a time 552 00:28:56,839 --> 00:28:58,819 Speaker 1: like this? Well, I think we've touched on that already, 553 00:28:58,890 --> 00:29:00,930 Speaker 1: but let me just go through it again. Uh, if 554 00:29:00,930 --> 00:29:03,609 Speaker 1: you are a Singapore dollar investor, you should buy Singapore 555 00:29:03,609 --> 00:29:04,640 Speaker 1: dollar bonds, don't. 556 00:29:05,020 --> 00:29:07,609 Speaker 1: You know, quibble about the fact that it's yielding 200 557 00:29:07,609 --> 00:29:10,369 Speaker 1: basis points less than the US counterpart, uh, from a 558 00:29:10,369 --> 00:29:13,530 Speaker 1: currency perspective, your purchasing capacity is increasing because same dollar 559 00:29:13,530 --> 00:29:17,209 Speaker 1: is strengthening substantially these days. I think single dollar foreign 560 00:29:17,209 --> 00:29:20,890 Speaker 1: bond for single dollar investors is just fine. And as 561 00:29:20,890 --> 00:29:24,130 Speaker 1: I said earlier, home buys is fine around the world 562 00:29:24,130 --> 00:29:26,729 Speaker 1: these days, Japanese buying Japanese bonds, Europeans buying. 563 00:29:27,180 --> 00:29:31,660 Speaker 1: European bonds, gold, same story, it's a risky uncertain time. Well, 564 00:29:31,780 --> 00:29:34,380 Speaker 1: wholesome gold, wholesome good quality equity, but that sort of 565 00:29:34,380 --> 00:29:37,819 Speaker 1: takes me to the longer end of the discussion. For example, 566 00:29:37,900 --> 00:29:40,780 Speaker 1: you know, I'm not an outright seller of US equities. 567 00:29:40,819 --> 00:29:43,099 Speaker 1: I find US equities very expensive, but I think they 568 00:29:43,099 --> 00:29:47,219 Speaker 1: still offer attractive return for the long term. So if 569 00:29:47,219 --> 00:29:48,500 Speaker 1: you're thinking about the short term, 570 00:29:48,880 --> 00:29:50,839 Speaker 1: Some bonds, some gold, but if you're thinking about the 571 00:29:50,839 --> 00:29:54,880 Speaker 1: long term, certainly, uh, Asian equities, European equities, as well 572 00:29:54,880 --> 00:29:59,199 Speaker 1: as US equities uh would offer you superior return on 573 00:29:59,199 --> 00:30:02,599 Speaker 1: a risk adjusted basis in a 57 year scenario. So don't, 574 00:30:02,640 --> 00:30:05,520 Speaker 1: don't neglect stocks, uh, just because you're very spooked by 575 00:30:05,520 --> 00:30:07,719 Speaker 1: the short term. In the long term, those things always 576 00:30:07,719 --> 00:30:10,359 Speaker 1: do pretty well. And, uh, and then coming back to 577 00:30:10,359 --> 00:30:14,709 Speaker 1: that uh credit part, uh, what I was answering this question, 578 00:30:15,119 --> 00:30:16,030 Speaker 1: US corporate credit. 579 00:30:16,500 --> 00:30:18,579 Speaker 1: Maybe you don't want to hold US government bonds, but 580 00:30:18,579 --> 00:30:19,900 Speaker 1: US corporate credit, I think is a 581 00:30:21,489 --> 00:30:24,410 Speaker 1: Actually, in some ways less subject to political risk than 582 00:30:24,410 --> 00:30:27,900 Speaker 1: US government bonds, so they are very, very attractive as well. 583 00:30:28,800 --> 00:30:32,959 Speaker 1: Um, then, uh, has some thought provoking question. What is 584 00:30:32,959 --> 00:30:36,040 Speaker 1: one economic mega trend that not enough people are paying 585 00:30:36,040 --> 00:30:39,939 Speaker 1: attention to? Keith, I will tell you something that needs 586 00:30:39,939 --> 00:30:42,439 Speaker 1: a lot of time to go through, but let me 587 00:30:42,439 --> 00:30:43,800 Speaker 1: take a little bit of time today and maybe one 588 00:30:43,800 --> 00:30:46,640 Speaker 1: of these is I'll do a bigger, longer podcast on 589 00:30:46,640 --> 00:30:49,920 Speaker 1: this issue. One thing that people are not recognizing is 590 00:30:49,920 --> 00:30:51,479 Speaker 1: how expensive innovation is becoming. 591 00:30:52,180 --> 00:30:54,410 Speaker 1: And by that I mean, not just AI stuff, we 592 00:30:54,410 --> 00:30:55,859 Speaker 1: see all this, you know, tens of billions of dollars 593 00:30:55,859 --> 00:30:58,660 Speaker 1: going into AI related work, uh, all the metas and 594 00:30:58,660 --> 00:31:01,459 Speaker 1: the Googles of the world are spending shockingly large amount 595 00:31:01,459 --> 00:31:04,020 Speaker 1: of money, same with the Chinese. I'm not just talking 596 00:31:04,020 --> 00:31:05,500 Speaker 1: about that, I'm talking about if you want to do 597 00:31:05,500 --> 00:31:10,890 Speaker 1: innovation in pharma, in green technology, in quantum, in graphene, um, 598 00:31:11,000 --> 00:31:13,859 Speaker 1: in life sciences, you would have to spend billions of dollars. 599 00:31:13,900 --> 00:31:17,099 Speaker 1: So the days of, uh, just, you know, lots of 600 00:31:17,099 --> 00:31:17,949 Speaker 1: smart people coming to 601 00:31:19,479 --> 00:31:23,849 Speaker 1: Yeah and coming up with innovation is fortunately is behind us. 602 00:31:24,180 --> 00:31:26,989 Speaker 1: Ideas by and large are getting harder to find. It 603 00:31:26,989 --> 00:31:29,459 Speaker 1: costs a lot of money and it requires a lot 604 00:31:29,459 --> 00:31:33,099 Speaker 1: of scientists to come up with breakthroughs. Um, and if 605 00:31:33,099 --> 00:31:36,140 Speaker 1: you think about this a little further, that actually means 606 00:31:36,140 --> 00:31:39,939 Speaker 1: that productivity from innovation is actually not that easy to 607 00:31:39,939 --> 00:31:44,099 Speaker 1: extract because innovation costs much more today than it did 1020, 608 00:31:44,109 --> 00:31:46,140 Speaker 1: 30 years ago. So there are a bunch of people 609 00:31:46,140 --> 00:31:47,339 Speaker 1: who have written very interesting. 610 00:31:47,415 --> 00:31:50,285 Speaker 1: Papers about this. I myself have written a paper on 611 00:31:50,285 --> 00:31:53,244 Speaker 1: this in recent years, but I still don't think this 612 00:31:53,244 --> 00:31:55,925 Speaker 1: is very widely recognized. And what is the upshot of 613 00:31:55,925 --> 00:31:58,324 Speaker 1: this point? Well, what does it mean that ideas are 614 00:31:58,324 --> 00:32:00,885 Speaker 1: getting more expensive? It means that unless you're a very 615 00:32:00,885 --> 00:32:04,204 Speaker 1: large or very rich economy, you probably will not be 616 00:32:04,204 --> 00:32:07,275 Speaker 1: in the innovation game going forward. It's just going to 617 00:32:07,275 --> 00:32:11,084 Speaker 1: be not feasible for you to have thousands and thousands 618 00:32:11,084 --> 00:32:13,594 Speaker 1: of scientists and billions of dollars on a single field 619 00:32:13,594 --> 00:32:15,885 Speaker 1: to come up with innovation. China can do it. 620 00:32:16,339 --> 00:32:18,939 Speaker 1: US can do it, I suppose Europe can do it too. 621 00:32:19,229 --> 00:32:22,349 Speaker 1: After that, the list gets very, very thin. 622 00:32:23,849 --> 00:32:26,640 Speaker 1: So, I'll leave it there, it's it's a big issue, 623 00:32:26,930 --> 00:32:29,449 Speaker 1: lots of aspects to discuss, but that's, I think one 624 00:32:29,449 --> 00:32:32,819 Speaker 1: thing that is not very well recognized. Uh second question 625 00:32:32,819 --> 00:32:36,050 Speaker 1: from Keith is what are the conditions for Southeast Asia 626 00:32:36,050 --> 00:32:37,640 Speaker 1: to be a more integrated market? 627 00:32:38,699 --> 00:32:43,140 Speaker 1: Keith, Southeast Asia is very heterogeneous region, large countries, small countries, 628 00:32:43,390 --> 00:32:48,089 Speaker 1: thriving democracy, some not quite so, some very comfortable with China, 629 00:32:48,270 --> 00:32:51,439 Speaker 1: some more comfortable with the West. So that heterogeneity sort 630 00:32:51,439 --> 00:32:54,229 Speaker 1: of gets in the way of the region becoming very cohesive. 631 00:32:54,510 --> 00:32:56,339 Speaker 1: So I think that the region needs to sort of 632 00:32:56,339 --> 00:33:00,390 Speaker 1: build on the regional comprehensive Economic Partnership, RSEP and sort 633 00:33:00,390 --> 00:33:02,260 Speaker 1: of recognize that even if we're not never going to 634 00:33:02,260 --> 00:33:05,339 Speaker 1: have political union in the region, we could sort of 635 00:33:05,339 --> 00:33:08,060 Speaker 1: start heading toward some sort of a United States of 636 00:33:08,060 --> 00:33:11,849 Speaker 1: Southeast Asia for trade, capital flows, and movement of labor. 637 00:33:12,020 --> 00:33:15,099 Speaker 1: If those three things we could sort of improve upon 638 00:33:15,099 --> 00:33:17,910 Speaker 1: without necessarily going the European Union route, I think it 639 00:33:18,119 --> 00:33:20,140 Speaker 1: would be very beneficial for the region. 640 00:33:20,560 --> 00:33:23,550 Speaker 1: Uh, on goods, the region is still already sort of 641 00:33:23,550 --> 00:33:25,199 Speaker 1: pretty united and 642 00:33:25,979 --> 00:33:29,089 Speaker 1: Inputs do free pretty seamlessly within the region, but we 643 00:33:29,089 --> 00:33:31,770 Speaker 1: need engineers, we need capitals also to move through the 644 00:33:31,770 --> 00:33:36,359 Speaker 1: regions more seamlessly. That'll really, really help. Um, so, so, 645 00:33:36,449 --> 00:33:40,050 Speaker 1: and also the recognition uh that the region has a 646 00:33:40,050 --> 00:33:43,140 Speaker 1: lot of common interests. It may be a heterogeneous region. 647 00:33:43,420 --> 00:33:48,229 Speaker 1: But it has common risks, climate change, disruptive technology, great 648 00:33:48,229 --> 00:33:51,540 Speaker 1: power competition. This region is affected by all three of those. 649 00:33:51,829 --> 00:33:55,270 Speaker 1: So I'd like to see small countries like Singapore, large 650 00:33:55,270 --> 00:33:58,780 Speaker 1: countries like Indonesia, mid-sized countries like Malaysia all come together. 651 00:33:58,964 --> 00:34:02,604 Speaker 1: In recognition of these major generational risks and hopefully that 652 00:34:02,604 --> 00:34:07,045 Speaker 1: again takes us to become slightly more integrated, um, and, 653 00:34:07,055 --> 00:34:10,424 Speaker 1: and that certainly would be helpful. All right, final question, 654 00:34:10,675 --> 00:34:13,304 Speaker 1: nothing to do with markets, nothing to do with geopolitics. 655 00:34:13,554 --> 00:34:14,435 Speaker 1: Ronel Salgado. 656 00:34:16,759 --> 00:34:19,948 Speaker 1: Well, I'm a resident representative in New Delhi. I sent in. 657 00:34:20,198 --> 00:34:22,627 Speaker 1: What is a recent movie that I should see and why? 658 00:34:22,878 --> 00:34:26,957 Speaker 1: Right now, Simple answer. Go watch Mission Impossible Final reckoning 659 00:34:26,958 --> 00:34:29,479 Speaker 1: on IMAX. Do not watch it in a plane, watching 660 00:34:29,479 --> 00:34:32,509 Speaker 1: the biggest screen possible with the best sound. We don't 661 00:34:32,509 --> 00:34:35,948 Speaker 1: have action heroes anymore. Tom Cruise is part of a 662 00:34:35,948 --> 00:34:40,279 Speaker 1: dying generation. Watch him in his glorious stunts. The plot 663 00:34:40,279 --> 00:34:41,839 Speaker 1: doesn't make that much sense, but you know, it's a 664 00:34:41,839 --> 00:34:45,269 Speaker 1: cool AI plot nonetheless, it's uh engaging, it's 665 00:34:45,340 --> 00:34:47,979 Speaker 1: Gripping, it's long, but it is totally worth your money. 666 00:34:48,159 --> 00:34:51,340 Speaker 1: Go watch that. OK, uh, we're gonna wrap things up. 667 00:34:51,510 --> 00:34:54,149 Speaker 1: Thanks to our listeners and viewers. Uh, Kobe Time was 668 00:34:54,149 --> 00:34:57,030 Speaker 1: produced by Ken Delbridge at Spice Studios. Violet Lee and 669 00:34:57,030 --> 00:35:00,799 Speaker 1: Daisy Sherman provided additional assistance. All 156 episodes of this 670 00:35:00,800 --> 00:35:03,469 Speaker 1: podcast are available on YouTube, as well as on all 671 00:35:03,469 --> 00:35:07,330 Speaker 1: major podcast platforms, including Apple, Google, and Spotify. As for 672 00:35:07,330 --> 00:35:10,070 Speaker 1: our research publications, webinars, and live streams, you can find 673 00:35:10,070 --> 00:35:13,870 Speaker 1: them all by Googling DBS Research Library. Have a great day.