17 Burst results for "David Blanche"
Bloomberg Radio New York
"david blanche" Discussed on Bloomberg Radio New York
"Unrivaled in memory in recent history and even not so recent history of nearly 18% so far year to date. Are things starting to crack in credit? Yeah, yeah. They absolutely are. Kind of having said that, Lisa and you certainly know how yield market as well as anybody else. We're still a ways from retesting the why from a spread perspective that we saw earlier this year. And those wide didn't reflect recession the way that we would typically define it. So it is starting to crack. There's reality coming into those markets at a time when they were able to ultimately talk through them. Kind of having said that, if that reality set in, there's still more losses that are going to come into that market. Marvin off script, but I think on the mind of everyone in global Wall Street, is we all calculated the leverage of 1998 that we observed. I'm going to use 60 to one even 20 to one. And I guess there's a comfort that the ratios that we're talking about in the last couple of days is a three to one imputed leverage as well. Is the leverage out there within the financial system to give Andrew low upset at the Massachusetts institute of technology that would upset Marvin Lowe at state street? I mean, I think we definitely have had a better handle on leverage this time around. You know, relative to a few of the other financial crisis. So I'm not necessarily looking at it from that perspective. Having said that, you know, what we learned from the UK pension funds is that it could in sometimes the most obvious places, it doesn't make sense in hindsight, but these are strategies that potentially evolve over a decade in an environment that was very much geared toward lower interest rates in a more stable environment. I wouldn't say it's there, but there's nothing obvious to me relative to what we've learned, you know, really over the last few decades and unfortunately, a few of the last financial pricing that we've done. Thanks for being with us state street, still three months to go of this year. I keep saying that. It's been such a long year already. What a story through the third quarter. Never mind the whole of 22 so far. Futures Tom of two tenths of 1% Sterling now weaker on the day. Cable, big turnaround in the last couple of hours. I've got to say, this should market some. It's just been all over the place all week. I looked away for 12 seconds and Sterling weaker again, careful to watch. I'm not in a panic about it, but hey, there it is. John David blanche flower very busy in all out on Twitter thinking of him and the millions in Florida affected the professor from Dartmouth college with a set of blistering tweets. John, this sounds like pharaoh about 6 O 2 a.m.. However, they said the forecast, which will receive on 7 October, won't be published until 23 November, the government also said it values, the OBR scrutiny, what a load of rubbish, not going to happen. We won't let them hide the stuff appalling. John, that sums up the street. So that's the second piece. So, like, not the second piece of time, because that's heavy on opinion. Let's talk about the first piece of this. November 23rd, I wonder Tom whether this new budget now and it's certainly not a view unique to me. That if it includes spending cuts in a big way to offset some of this, take care. I just wonder how much painful how much more painful this could become in the next 6 weeks. Next two months for that matter. I urge everybody to put it out on Twitter, John. Everybody's got to go read William greider on David stockman written in 1981. I'll read it this weekend as I did 40 years ago. I can't believe I'm saying it. John, this is so been there, done that before. Sure. It's shocking. It's on this started. That's why I got upset with the minister. This time started, I think, when you had Boris Johnson on his way out and on his way out, he talked about the treasury and he talked about the treasury and how they like to balance the books and they're too focused on that and maybe not on growth. And then the first thing they did when they took over is they basically fired a top civil servant for the treasury. This is how the dominoes started to fall. The Chancellor came out. He said they were ran more like a finance ministry. They want to focus on growth and it's gone from there. Tom, if you're going to blow up orthodoxy, that's one thing from a policy front. But if you're going to do it on your approach as well. That's going to unnerve a lot of people. Yeah, well, sir, John, this I even asked this question because I don't want to be rude, but I'll be rude to you. Would this have happened under prime minister Johnson? Tough to say, Tom. Tough to say, I think under prime minister Boris Johnson, you may be have got your own idea about what policy should have been. Sir Tom scholar was still at the treasury at that point. The gentleman. That gentleman at the treasury, he didn't blow up the approach in quite the same way as this government has done in the last couple of weeks time. And it's the approach again, I really draw a distinction between the policy and we have a debate about whether this is the right policy, but the approach to blow up the approach to say that we're going to do this without the OBR forecast alongside us. That kind of stuff is just it's messy and it's been messy and you've seen how it's played out in the market too. Futures right now, positive a third of 1% on the S&P from New York. This is Bloomberg. Now the latest news from New York City and around the world, here's Michael Barr. Tom Lisa Johnny and now
Bloomberg Radio New York
"david blanche" Discussed on Bloomberg Radio New York
"Will follow up on that story. Equity futures say point to a, it's called a little bit of a mixed open this morning S&P at the higher NASDAQ lower yields come in the ten year US Treasury yielding 3.86% on the commodities front, WTI crude oil is higher just over $80 a barrel gold. Let's call it $1645 an ounce it's up a little bit Bitcoin unchanged right here just over $19,000 per token before we really get started. We want to get the latest on hurricane Ian bearing down on Florida that is the news of the day. Let's check on the rob Caroline Bloomberg meteorologist. Rob, give us the latest on the track of hurricane Ian and kind of some timing we should be aware of. Certainly Paul, the storm right now, the eye is just due west of Naples Florida. It's about 60 miles west of Naples, the eye wall is just to the southwest of sanibel and captiva island, Florida. It looks like it's going to make landfall very close to punta gorda. It's very close to the track of hurricane Charlie back in 2004. This is a very dangerous hurricane that went through some very rapid intensification earlier this morning of the maximum sustained winds now a 155 miles an hour so it needs its gusting probably over a 175 miles an hour. I'm seeing Gus right now in Port Charlotte over 50 miles an hour Fort Myers recently had a gust over 60 miles an hour. Venice Florida reporting dust to 50 miles an hour, it's going to go inland right there in southwestern Florida just north of Fort Myers in south of Sarasota later this morning. The damage is going to be pretty severe the hurricane force winds extend about 40 miles out from the center of circulation, so imagine an EF four tornado of 80 miles wide. It is just going to buzz cut that portion of Florida. Storm surge is likely going to be in excess of 14 feet around Port Charlotte. We're going to be talking about isolated tornadoes from Naples on up toward Sarasota and Tampa. The Tampa area hasn't been hit directly by a hurricane in over a hundred years that looks like they're going to miss a direct hit with this one. Paul then tracks up into Central Florida and on up towards the Orlando area later tonight, it'll be weakening, but even as far inland as Orlando, they are probably going to see winds in excess of 75 miles an hour from Ian, so there's going to be a big swath of destruction from north of Fort Myers into Central Florida by Friday it's moving up towards the Jacksonville area and then Saturday it's into Georgia and the Carolinas. Rain out ahead of the system on the order of 8 to 16 inches so there's going to be a lot of fresh water flooding over central and northern Florida with this storm over the next several days. Rob something I heard I think for the first time with this storm is that intensification aspect where we're going from a category one to a 5 and just a blink of an eye to talk to us about that phenomena. Well, eastern Gulf of Mexico is a really warm body of water last time we saw something happen like this Katrina went from a category one to a category 5 further north, but in the eastern gulf. You're talking about water temperatures that are close to 90°, about 300 feet deep, so it's like throwing kerosene on a fire. Once you get these systems in where there's high pressure over the gulf, there's very light winds loft. They just go crazy and that's what's happening with Ian this morning. Rob, I remember hurricane bob, which was 91. An arrow pointed right at me. And I never forget the hurricane water surge. It was like a hockey goal high. How big is the surge? It's going to hit David blanche flowers, sanibel island. How about a field goal? A goalpost height, about 14 feet with waves on top of it. The storm sounded the reason you get the storm surges because the pressure drops so low in the center of the storm. The ocean actually rises up to fill that void and it's going to be a rise of about 14 feet with waves on top of it and we think the maximum flooding is probably going to occur around the Port Charlotte area. Probably three or four hours from now. I'm Carolyn. Thank you so much, the best coverage of these storms I've ever heard. Bloomberg surveillance this
Bloomberg Radio New York
"david blanche" Discussed on Bloomberg Radio New York
"Administration will be pretty good about gagarin the fed's independence typically if an administration starts to pick on the fed, that just unnerves financial markets and that makes it the Central Bank's job even harder. So I would be surprised if the Biden administration started to attack the fed. But you already are hearing cries from the left wing of the Democratic Party, but how unfair this is that low income workers are going to be put out of work. As if there's some alternative, the problem here is that once you're late, you have to catch up. Once you're late, the unemployment rate has to go up. There are no other alternatives. And so it's not as if the fed has a better path to achieve better outcomes. They need to do what they need to do to get inflation back down. It's just going to be difficult. If we see services stabilize, it may be reduced if we see goods come down to the goods disinflation or deflation that we saw pre-pandemic. I guess that means we come back towards John Taylor's 2%. Are you wedded to 2.0% or can build Dudley construct a new normal at 2.82 .9 two point Adam posen? Where do you stand on that Bill? Well, I'm not sure if you're talking about the real, real interest rate or inflation. I'll go either way. I'll let you make it up. To me, it's just it's a level that we're aspiring to get to out there. I think there's some people that say the fence had raised their inflation target. But I think that's a bad approach right now because that's like moving the goalposts because you can't achieve your objective. Done that. I think that would undercut the fed's credibility a lot. And I think Powell has been very clear that his pursuit of 2% inflation from his perspective is unconditional. Whether he can bring the rest of the FMC along with him when the job starts to become more difficult to get a fundamental question. Right now markets basically believe Powell inflation expectations stay well anchored, but the pain process that's about to unfold is just begun. That's the domestic pain, the international pain we're witnessing right now, Bill. Well, that's happened already. Yes, absolutely. I want to thank you. I think they should respond to that. If at all. Well, you know, the reality is they're not going to respond to that because at the end of the day, monitor policy in the U.S. is about what's best for the United States in terms of the fed achieving its U.S. inflation and output and employment objectives. Obviously, this creates a lot of pressure on the rest of the world. The stronger dollar holds down U.S. inflation, a weaker foreign currency increases inflation. So the flip side for other countries is much, much tougher. Messi, Bill fantastic catch up, great piece as always, will Dan do that. The former New York fed president and Bloomberg opinion columnist, will the fed stay the course is the question of Bill is asking here. And Lisa, when he talks about the pain, we're likely to see next year in chairman has talked about that pain. For me, the next stage of this market is what happens when we realize that that pain is happening and yet this fed is not cutting rates and for the first time we could be in what many people might describe as a recession where the fed isn't cutting. Sure, they might pour us, but they're not cutting rates. They're not doing QE. They're not doing those things. They're not responding to a market mess, a contraction in the economy and the way they traditionally would. This is different. Bill's point is really, really important because we've all talked about, well, is are some of the fed projections fanciful in terms of what the unemployment rate will peak out at in order to achieve the inflation rates. He's saying that the fact that there isn't more downside baked into what they're putting out there gives the sense that they haven't necessarily grappled with what they would do with rates if it's worse. If there is more pain in the economy than what they're putting out there and that that's why it's important for them to be transparent and honest about how much downside there really is to this economy with rates where they are. It's only for us about the political pushback. I think it's pretty easy to imagine we're going to see a lot more of that. It's here and early next year. No question about it. What I would say here and Bill Dudley, if a class act he is mentions Claudia Sam, the great economist from Michigan and his note today. And you know, you know, some people will say Claudia saw him. I'm sure senator Warren would say Claudia son should be the next chair of the fed because she's hardwired to the dynamics of the job economy. And John, the absolute absolute debate we're having is between the late, great Alan Meltzer, UCLA, Carnegie Mellon, and David blanche flower of Dartmouth. He went to the university of Cardiff, I think I can't remember football club. But anyways, John, the point here is Meltzer wants to aggregate the economy as we heard from doctor Dudley and blanche flower and some are saying this is a much more nuanced labor economy and that's what Powell's dealing with. I have no idea that blanche flash studied a Cardiff football club term. I thought he was on the club. He missed college. I think he skipped college and just, you know, you need to watch. Welcome to Wrexham. John, I look forward to last night. I couldn't find it. Very cool. I did, I honestly looked for it last night. You've got Hulu. I think it's on FX, which you can get on. I think maybe Disney+. You can figure out how to get your baseball last night. You struck me to find that. Yankee baseball has been on a different network. Every other day. John, I can't keep out. I got a zenith TV with rabbit ears, and I'm just trying to move the rabbit ears around. I'm trying to get sick now. Keep trying. Features up 1.3% on the S&P this is Bloomberg. Now the latest news from New York City and around the world, here's Michael Barr. Tom Lisa
Bloomberg Radio New York
"david blanche" Discussed on Bloomberg Radio New York
"Matter zeli Deutsche Bank premis ra of TD, Scott miner to Guggenheim. Of course, Richard Claude, together with Jeff Rosenberg of BlackRock. That's swung a KPMG. How could I leave Diane out just a fantastic lineup yesterday? Thanks to all involved. Futures right now down about a quarter of 1% on the S&P 500. A lot of south side research coming through this from silly moments ago. It's pretty straightforward, quote, Powell and the committee plan to move nominal rates above underlying inflation resulting in millions of newly unemployed individuals to relieve inflationary pressures. This is not a positive scenario for risk time. We see it with a Vic's 27.86 a spike up to 30 during the carnage yesterday, but we come back down and have to see how equities play out. We've got 8 ways to go here on radio and television across America this morning. We go to Britain and what John knows and I get lost in the streets. You go out. I can't pronounce them right, leadenhall and fend shirt. John, you go beyond the Bank of England out past that pub where I have a beverage in my choice, and you end up out in the world of David blanche flower. I think it's called aldgate John. Okay. You end up. You end up in a different London than the fancy stuff we're talking about every day. I joined us right now. Danny, it's fantastic to catch up. And I think we should start there at the heart of these decisions. What do these decisions mean for everyday Brits every day Americans when city are basically saying millions are going to end up unemployed and the question I've asked and I think you're perfectly positioned to try and answer it is high unemployment a price worth paying to try and get inflation down. No, well, we have a lot of evidence. I mean, the Central Bank is forever said how important inflation is. And they just kind of guessed it. So there's a huge body of literature that I've contributed to and we look at what's the impact on the country's well-being. If you like on the wealth of nations of a one percentage point rise in unemployment compared to a one percentage point rise in inflation and the answer is it's absolutely clear between 5 and ten times worse. So a new paper says that the rise in unemployment that they're going to bring about is ten times worse than the problem they're trying to solve and you started this thing out. I've been talking a lot about the woman on the myelin road omnibus. And what I mean by that is so the Bank of England sits in the City of London. One mile away is the myelin road. It's called the myelin rocus. It's a mile from the city, and it's where the two worlds collide. And the question is, what's going on is going to help the bankers and the city folks that we talk to. And the woman ride in the bus on the island road and the answer it seems to me is that we're seeing disaster coming, we're seeing rises in interest rates in the UK when the Bank of England's agents today talk about slowing demand slowing output the Bank of England forecast before the rate rise that there's a high probability of deflation and that output is going to fall over the next three years. So what are they trying to do for a problem that's not about demand driven inflation? And the other thing Jonathan and Tom, I think we really should think about, in a sense, you guys talk about this all the time, but there's so little dissent, the story of the ECB, the story of the Bank of England, the story at the fed. We got to do things about information. We've got to raise rates. Okay, potentially, this is going to crash the economy. And it'll all be much worse. Professor blanche flour, I stood in the bottom of our building here in New York with secretary treasury Tim Geithner and the heart of the financial crisis and Geithner brilliantly laid out that they needed to extend the X axis and use time to heal the wounds. Are these central banks that are panicking because they refuse to send to extend time to extend the X axis to diffuse inflationary impulse? Well, that's absolutely right, Tom. I mean, the thing that I would strike to me is very interesting. It's the central bankers seem to want to respond to every piece of minutiae that comes in every day. Their job is to focus on the forecaster rise. What inflation is going to be, let's say in two years time. But if that causes all kinds of problems, there's no reason why you shouldn't say, okay, let's let inflation come back to target in three years. Or four years, I mean, that's absolutely allowed. And the sensible thing probably to do is to see if this temporary shock dissipates. So you could sit there and say, a sensible path would be to sit and wait and watch. But again, where's the dissenting voices? They're all saying the same thing based on zero data. They have no precedent to this. And the danger is that the soft landings are not going to come. I mean, the forecast yesterday from the fed said, output's going to be fine, I'll post going to rise just a little bit and raise in rates to four and a half percent. No, worry, it'll slowly bring inflation. And that's for Gaga land. That's not going to happen. Danny, is there are there any circumstances under which you would argue for raising rates? Well, of course, obviously. I mean, the absolutely. So what? So what are the scenarios that would cause you to say it is important? That's a stupid question in a way. I mean, what we've seen since 2008 is the mother of all shocks. We saw the mother of all shocks, negative shock to output in 2007, 8, which she had to counter. If you haven't counted it, Ben Bernanke said unemployment would have been 25% so I buy that. So now what we have, a giant shock and a giant shot from the COVID and from the war. We don't know how it's going to recover. So why would I want to punch the labor market and punch demand before I really know what's coming? I mean, it's as if they know what's coming because they clearly don't. So under these circumstances, supply driven shock that essentially is going to drop out. My guess in the United States and in the UK, we'll see very low inflation by June as those big numbers one off big numbers that we saw. So I would have not been rotated with rate rise. Because of the large negative shock and the debate over the last decade is about the scale of that negative shot. It may be a stupid question, and yet some people might be wondering that because they're taking a look at CPI where it is and saying, why wouldn't you want to raise rates? I mean, I'm just saying this. So from your perspective, what data point would you be watching to prove this point every week? Okay, so let's just go with the claims that the fed has made in the claim that I make. So what you got was a couple of months off events, which are basically driving the base effects. You've had inflation of zero and 0.1
Bloomberg Radio New York
"david blanche" Discussed on Bloomberg Radio New York
"Investors want higher yields They just don't like the path to get there The jury would be out for kind of equities to be an inflation hedge or not The fed may need to slow the economy down significantly to get inflation down the central banks don't want to be caught too far behind the fed Getting a positive growth number for this quarter is really going to be a challenge This is Bloomberg surveillance with Tom Keene Jonathan farrow and Lisa Abraham always From New York City for our audience worldwide good morning good morning This is Bloomberg surveillance live on TV and radio alongside Tom Keene And Lisa Brown had some Jonathan farrow futures our negative two tenths of 1% on the S&P TK the pressure piling up on the Europeans It is real The headline series folks on the Bloomberg there are these amber headlines and the set of grim headlines John is something And I'm going to dissolve as we did in the last hour to David blanche flower the acclaimed economist of Dartmouth who says look the ECB is not going to raise rates Dovetail that John with a big tech move in America where big tech growth is moving because perhaps as a bet they won't raise rates as much It's all won into this true grimness in Europe because growth is decelerating expected a lot right through the end of this year Tom The energy crisis and I think we can call that in many parts of the world threatens to her growth even more and the Europeans for that reason are worried about taking sanctions too far Now Tom the question I have the proposal this morning is on banning coal imports I know it's a little cliche but is there a red line for the Europeans that the Russians could cross where buying Russian gas and Russian oil just becomes too much And Tom if we're not there yet already I don't know when we'd get there The papers are doing the best they can to pretend it's 1950 and we don't show people these horrific images And of course the Russians say it's alleged et cetera et cetera John the Twitter feed is the modern newspaper and those images are appalling whether they're alleged or not alleged doesn't matter They're being overcome by events OBE that's what's going on Lisa deeply deeply distressing Deeply distressing which is the reason why you are hearing harsher rhetoric and some people are saying perhaps oil and gas are on the table but to your point is there a red line Is that what the market is telling us They don't believe that Europe will actually go through with harsher oil and gas sanctions because you're not seeing much of a move In the crude prices and really I don't understand why that would be considering some of the hysteria in markets earlier just days ago when we were talking about that potential Do you take the fact that they're talking about at least the energy sector as a sign that there's not much left now Honestly And outside of coal what is left Javier blossom Bloomberg opinion seemed to suggest that out on Twitter basically they are crossing into energy as not being taboo How much does that become the conversation and yet how much of a pound of flush do they have to take from their own economic trajectory in order to enact those oil and gas sanctions Good time for our grandma Thanks As always Futures down about two tenths some of the S&P and the NASDAQ 100 Down about a quarter of a 1% It was a much harder this morning In fact the curve is steeper twos tens is back in positive territory By half a basis point your ten year up 7 basis points to two 46 89 your two year just short of that at four or 5 basis points on the day Crude Lisa high up by a dollar and 33 cents up by 1.3% at one O four 65 Yeah but to the point earlier why are oil prices not even higher given some of the mounting pressure to do more in light of some of the images that were just horrifying that we all saw over the weekend Today we do hear more on that point on what the rest of the world can do Vladimir zelensky of Ukraine will be addressing the United Nations at 10 a.m. also we have European finance ministers continuing to meet in Luxembourg This is a two day meeting Do they talk about that Do they talk about the potential for oil and gas sanctions Do we hear more about what Germany and the rest of Europe is doing to divert away from simply relying on Russia We did hear something and are expected to hear more from the United Kingdom on that front today Also today Kansas City fed president Esther George is joining Bloomberg television our own Michael McKee at about 10 a.m. other fed speakers throughout the day Lots of them lael brainard Neil kashkari and John Williams of the New York fed Do they discuss this concern that people have that perhaps the fed is getting behind the curve Yes you are seeing real yields rising They're lesser negative as we were talking about earlier Tom perhaps the least negative going back Quite a long ways However at the same time they still are negative We're still talking about negative yields at a time when we have potentially restrictive fed policy And today I'm going to get U.S. marsh ISM services data How much do we see that really making up for some of the slowdown that we're talking about in industrials as we do see the unemployment rate fall to the lowest since before the pandemic John Basis points away Ten basis points away We are so far away from potentially restrictive We are miles away from a restrictive power Tom isn't that the city argument Yes I'll go with it I'm just saying we're living in a fictional time of multiple years and we're look at the tailor rule You can get the tailor rule folks on the Bloomberg We're not going to show it now because Anne Marie and Maria are more important John the Taylor rule gap is something no one's ever theorized We're so off the mark So you don't like the pilot game but you've just laid out the Citigroup argument Where ages away from curtaining to me I have sat in jail I have sat in John Taylor's parlor in Palo Alto.
Bloomberg Radio New York
"david blanche" Discussed on Bloomberg Radio New York
"That's a Bloomberg business flash Tom and Paul Thank you Karen the vicks 23.841 .75 points on a standard deviation basis global Wall Street Have meta is down 3.6 standard deviations and really hasn't found a bid yet It's sitting nicely here Is Karen mentioned to the two 40 level We're going to recalibrate on what I thought would be an interesting day but has become eventful with Lagarde moving Euro stronger and one 14 print moments ago truly people flabbergasted over Bank of England discussions whether cautious on economic growth like David blanche flour Dartmouth or what we heard from Marcus ashworth as well So we need to recalibrate we need to calm down There's no one better to do that with And Steven Ross shoot up He's been at Missouri's securities since Arthur Burton's was chairman And he joins us this morning We hope with some perspective Stephen we're over a barbecue this weekend get ready for Super Bowl a week from now And everybody's under massive anxiety attack How do you calm them down about these unique economic times Well it's very very simple The reason why I think it's such a unique economic time is because this is one of the few times in modern history for those who haven't been out around as long as I have Thank you Tom for mentioning that To remember that this is one of the few times where monetary fiscal policy are working in coordination Since Paul Volcker through Alan Greenspan Janet Yellen Ben Bernanke and then eventually the early parts of Jerome Powell Monetary and fiscal policy tended to move in opposite directions And this was done primarily because the emphasis of time was based on controlling inflation to achieve an environment where you could have maximum sustainable employment And August of 2020 the Federal Reserve which debt around to maximum employment to achieve average inflation And to a great extent even though they've backed away from a good portion of that shift they have impact away from a completely and the net result is this is a particular time where in March of 2020 both policy levers were going to accommodation as a result we had a rapid recovery that got us back to the pre recession level in GDP in one year's time And now we've got the alternative where both policy levers are being pulled back IE slowing the economy And the deceleration in the economy is going to be quick and powerful And people aren't really having difficulty grappling with both of these switches And this is what's happening This is the first time in modern history We've had them both going in the reverse direction at exactly the same time That doesn't sound like supportive of economic growth here And I know you're a little bit more than a little bit You're much more conservative and I think a lot of folks are out there in terms of your GDP call Give us your thoughts about how you think economic growth will slow What's the trajectory Well let's take a quarterly pattern of growth and then get lays it out the easiest We have 6.9% growth in the fourth quarter of last year Almost 5% of that was inventory My forecast for Q one is 4% growth Q two 3% growth Q three is 2.5% growth in Q four is two and a quarter percent growth Essentially I have is getting back to that post financial crisis pre COVID shallow growth trajectory by the end of this year The Federal Reserve wouldn't have you getting there until 2024 And the consensus wouldn't have you getting there until the end of 2023 So I'm actually a year ahead of everybody else So you're right I'm much more conservative What's a glide path of inflation with a risotto call Well that becomes the interesting thing We think because there are lags and inflation inflation takes a little bit longer to start to unwind But we think between April and June of this year you're going to start seeing the inflation numbers begin to roll over the average numbers and fortunately it will still be high by 2023 where back down into that percent growth trajectory Chart of the day Paul I mentioned this on TV and I mentioned it now in radial charts work on radio is a kitchen sock gen With a beautiful chart of the 5 year 5 year forward CPR swap It's not a plunge It's not a rollover but it's ebbing and September and October of the guesstimate of what inflation All right that's what people are certainly hoping for I think The build back better doesn't seem to be having much support in Washington D.C. How much does that figure into your GDP forecast Oh it's a big big portion of it We've assumed build back better is not going to get done So the reality is the fiscal consolidation that we're talking about here is a function of the fact that the American rescue program created an environment where people were receiving child tax credits in cash and in the year that they were supposed to receive it rather than as a refund in the following year when they filed their taxes Because they all got their refunds last year in real time Now when you go into the period where you start filing your tax returns suddenly in a position where you're not getting a refund Not only that you're not getting the cash infusion from the $300 per child check In addition to that the rally we saw in the equity markets late last year which really pushed things to very very aggressive levels in the fourth quarter created a lot of capital gains for individuals have to make estimated payments So essentially the budget deficit in 2022 is going to be about a $1 trillion lower than it was in 2021 That's a big fiscal year Too short of visit let's do it again Steve schrute with Missoula you're this morning Facebook with a bid Really Yes All right Two 38 off the bottom That was the bounce up to two 42 John Farrell in the market Down 25% right Yeah That was a big big surprise there on the top line story there because the core business they are completely dependent upon advertising So if you're seeing that slow a little bit because maybe Tom Keane's other world is spending more time on TikTok that could be a problem No the reason the reason it's important folks you've got to stay around here on Bloomberg radio because this is going to be critical Yeah Dan I've snubbed me once again Yeah Well he knows you guys He knows to go on this for the players He's a big fan of mat Miller That's the story there Whatever you know So we're going to have Dan Ives coming up soon He knows I'm in triple leverage Okay We need to say thank you for our team It has been a most eventful day and.
Bloomberg Radio New York
"david blanche" Discussed on Bloomberg Radio New York
"Open to tech heavy NASDAQ Tom leading the way down on the back of those disappointing earnings from Facebook's parent meta platform Meta platforms Yields Tom They're moving higher at ten year treasury yielding 1.2% today I'm calling that out a little bit It got my attention on the commodities front WTI crude oils lower just over $87 a barrel gold it's lower $1800 an ounce and Bitcoin Also lowered $3700 Nobody's found Bitcoin this morning This is a truly historic day folks and we'll dive into it in this hour The Bank of England is an absolute stunner David blanche flower up at Dartmouth Speechless about it Lagarde speaking in Paul as we move forward to Karen Euro moments ago spiking and continuing to strengthen one 1372 on Euro Thomas get an update on those markets We do that with Karen Moscow Karen what do you have for us Oh you were talking about meta platform so I feel like I need to start there While the parent company of Facebook right now down more than 23% in early trading and this is on the back of poor earnings results it puts it on track to erase well more than $195 billion in a current levels That's the biggest collapse in market value for any U.S. company that is if those losses hold it's also dragging down other social media stocks snap is down 18% this morning Pinterest down 11% Spotify down almost 13% If we turn to the biggest maker of chips that run smartphones Qualcomm it's down 2.3% This is after efforts to expand beyond its main business or hampered by chip shortages in the latest quarter Also watching Biogen it's down about 4% this after its Alzheimer's drug that was once supposed to be a growth driver had just $1 million in sales in the fourth quarter and Ralph Lauren's and other stock to watch It's up 9 ten That's up 9% this after it raised its year end growth target Tom and Paul Thanks so much We'll continue to monitor Christine Lagarde She is moving global markets in the headline here is just we are getting closer to target over medium term I want to explain this and that in Europe they talk short medium and long term We do not do that in America There's really an economics no such thing as medium term in America but she's making very clear that in 2022 the headline rate hike not ruled out post march and very data dependent We'll have to see on that Right now we can serve Paul that Mark Zuckerberg this morning is data dependent He is dated dependent He's still going to his advertising growth slowing Should we bring in our co host Let's bring in our Carlos He's here in our Bloomberg interactive broker studio Tom I've noted more people in the building today so maybe it's Thursday I guess It'll be empty again Friday Mindy sings here though as always he brings it he's our senior technology analyst for Bloomberg intelligence mandeep Facebook I'm looking at this stock here It's off 23 and a half percent in pre market trading This is for a company that's in a small cap This is a big company That's a lot of equity value being lost in this marketplace today Why is the market so shocked that Facebook's results Yeah they dumped a lot of negative news all at once so they did the restructuring you know they told us they're losing $10 billion a year on those metaverse investments And also the core business they kept calling out competition Now this is a new TikTok YouTube have been around and suddenly kept talking about how they have to make this pivot to videos So that really caught the market by surprise because to me it focuses the structural margin of the business is going down And the reason I say that is the video business is very different than the photos and the feeds where they monetize ads because with videos you have to pay the content creators Right That's what the YouTube model is It's much lower gross margin 50 to 55% as opposed to their 80% gross margin And that will hurt their margins I'm a heavy user of TikTok You know I put in here today You know I called up after thought and I said well what should I plug in that gives me a feel for TikTok And she said plug in date ideas Oh boy Is the issue here that Mark Zuckerberg has lost to take it from that movie years ago the ute of America Well they clearly don't appeal as much to the younger demographic as they used to So what are you gonna do Well that's why they are building their metaverse Now the problem with metaverse is oh come on This is too young It's a guy with a nightmare to his head Metaverse like when 2030 No but we already have gaming metaverses So a Roblox or Fortnite these are metaverses much smaller in terms of what they can do but that's what he's going after He would love to build a gaming metaverse that can compete with a Roblox And that will drive the younger audience back to the platform So we should say as recently as a year ago they have a lot of levers to pull in terms of driving revenue growth They've got obviously the core Facebook We know that's slowing but they have instant as the kids call it They've got WhatsApp Where are we I haven't seen a monetization of WhatsApp ever Have I No And that's still a challenge messaging is a very hard thing to monetize I mean they've done that successfully with Tencent And that's a very different business model What Facebook operates in the U.S. The problem is WhatsApp won't kind of contribute to the shortfalls of the core business And with Instagram really they have all the influencers and so far they did very well But what if the influencers start moving to the NFT bandwagon which is what we are seeing a lot of the influencers are saying I can create my own NFT and that can be used across time Are you doing are you on the Internet Don't get me going Don't get me At least all the large brands are but one thing that goes in Facebook's favor is they have a lot of large.
Bloomberg Radio New York
"david blanche" Discussed on Bloomberg Radio New York
"The virus is going to proceed They don't know what long run changes in behavior are going to be I mean but this inflation moving presumably people are going to stop spending I mean this is going to slow the economy But much of what they've talked about is data dependent but they don't seem to have actually noticed that the economy is slowing fast It's the fourth fastest growing economy in the G 7 The fourth fastest So this is the first place to raise rate but also John did they talk about the stock reinvesting maturing assets This is really a signal of a very significant tightening The prospect of what you've just talked about happening by the end of the year is essentially nil If you're just joining us on Bloomberg radio Bloomberg television David blanche flower of Dartmouth college is where this round of professor at Dartmouth Of course former member of the Bank of England for those of you in America a profound decision by the Bank of England they do what's been talked about in America but what we've not seen from the fed was significant tone of higher rates Sterling at a one 36 level Professor blanche flower kitsch jukes at sock Jen with a brilliant short note today says look here's the reality the 5 year 5 year forward swap the measurement of inflation out there is already trending down Is that what you see in your data that the central banks are affecting policy for yesterday maybe for today and you disagree with Dudley that fight in the wrong battle out into the future Well I do think so Tom I mean the question in a sense is what is there to suggest that the pricing increases we saw over the last 12 months A lot of it driven by supply side events will repeat themselves in 2022 And I see every likelihood especially on based on the note that you've just said But actually we're going to see a slowing of inflation naturally coming I mean people stop buying highly priced goods And I look back I was just looking back now to the data for 2008 This is almost exactly the mood music in August September 2008 inflation was above 5% And what happened 12 months later on inflation in the UK was at one If you look at the data on inflation it's spikes What goes up does come down and there's nothing to suggest that fundamentally workers bargaining power has suddenly this is all going to get sustained So I agree wrong war fighting happened a year ago and we're going to see inflation like a stock a lot of people disagree with you and I'm going to steal from Stan Fisher here The basic idea is your wicked accommodative right now and all they want to do ala Bailey today is get back to some form of neutrality and not restriction Is your reading of history they can be successful It managing this to neutrality rather than overshooting restrictions How can you get back to normality when the world you're in is an unusual one in 2000 and you were hit by a giant financial crisis shock which was a downward hit to the economy What you've seen today and the last two years is a huge hit to the economy from the coronavirus which is still impacting people's behavior It's still impacting whether they'll go to the cinema whether they'll go on a cruise with a little taken airplane This thing isn't over So to say you could go back to normal when the world is as normal This is in Gaga land like pretend everything's back to normal We want to go back to normal even though it isn't That's the logic There are some real consequences though for the Bank of England making this move I'm looking right now at the pound versus the Euro and it's the strongest right now going back to 2016 which ultimately should help them bring inflation down should help that drop like a stone like you said which on a net basis should be terrific for the end consumer for especially low income individuals who are actually going to have more spending power as a result Why is that a bad thing Yeah but the consequences of slowing inflation is that you slow output And so the forecast is talking about a rise in unemployment and all the research we have from around the world Let's just get real about this A one percentage point rise in inflation hurts people A one percentage point rise in unemployment which is essentially what they're trying to generate and there's a new paper out in the last few months shows that that's ten times worse for pain 5 times worse the well-being So it's not as if it's not as if the alternative to pain from inflation is everything is wonderful What you do is you say we'll take the pain from inflation away will help people get better from what will happen to interest rates And what we'll do is we'll make matters much worse So we're going to generate slowing of output rising unemployment and we know just to make sure that people understand it that rises in unemployment slowing activity curve people much more and especially the people at the low end So this is a really big problem as well as the fact that now in the UK tax rises are coming which will also hurt people more and they've cut benefits of the low end So actually this is a heads you win tells you lose worse Danny looking forward is what you're saying basically that at this point the fed the Bank of England the ECB don't have the power to really affect the inflation that we're seeing in the impact that it's going to have on growth Well Claudia farmer said this all along She says the reason what we need the Central Bank the reality percent of banks is we need to solve the problem of the buyer This is a COVID driven world There are supply chain problems First the Central Bank has sort of opened a new Long Beach port and sold those supply problems that would be fine But this is not a traditional inflation situation where there's too much demand in the economy This is a supply driven situation We need to get to grips with the COVID pandemic And for central banks to say we'd love to get back to normal Well absolutely we'd love to get back to normal We'd love the COVID virus to disappear but I mean to argue that we're going to go back to normal and we can ignore it because we know what's coming makes absolutely no sense and of course the credibility of the MPC has been completely trashed over the last three months It's quite clear to have no idea what they do What's amazing about this moment though Danny is you know is that there's someone out there many people out there that take completely the different view on this situation and Danny that's what's fascinating Danny they think this is a different moment to the one we were in ten years ago Why don't you Well I do think it's a different moment and I think it absolutely is a different moment but it's comparable It's comfortable and the big thing is in both situations everything that happened from 1945 to 2007 was essentially irrelevant The ability to forecast what you would do based upon those situations was I mean what we've learned was that you couldn't forecast that You had to look back at probably at the 1930s and maybe what we do with this pandemic as we look I mean John M Barry wrote I think this week in The Washington Post said look at back to what happened in 1918 This thing is over there are completely economic consequences of a pandemic in 1920 just as there are now And the Central Bank in the UK's case is behaving as if it has prior data that it can forecast on And it knows what coming It's as if it knows what long run changes in behavior will be And it doesn't but this is a world of great uncertainty and you proceed forward saying you know what's coming at your peril and that's what we learned in 2008 9 ten and that's what we should be doing now I'm not saying I know the.
Bloomberg Radio New York
"david blanche" Discussed on Bloomberg Radio New York
"3% Do we get the message now Are we starting to hear what they're trying to tell us Let's look at a yield curve as well And it's this what they want to I imagine it's not That yield curve is rolling over 75 basis points the distance between twos and tens and we can't just talk about the race story We've got to talk about the delicate dance with the balance sheet and rage Do they complement each other Does one replace the other And can they do something Tom with the balance sheet runoff The engineers are steeper curved It's original economics I read Jersey with some terrific work on the linkage of balance sheet into the right dynamics and we'll talk about that as we go through this eventful fed meeting Right now and this is an immense joy to bring her in Stephen angler David blanche flower David Rosenberg and others have been cautious about rate hikes to the moon Priam mizra his lead on that a TD securities global had a rate strategy Yes she's amended but at the same time she has said wait I've been dying all morning to talk to you Bruce casman and JPMorgan says we have a 1% GDP something like that in the quarter we're in right now just from the morning We've seen retail inventories ex autos show some of that slow down in the economy et cetera Are you listening here to adjust your call back to a fed that will wait Unfortunately even though grow does seem to be slowing we think a lot of that is temporary and the inflation dynamics have become much stronger particularly on the wage side We're going to get ACI on Friday We think it's another high number I think the fed has spoken They are worried about inflation They're worried about wage price spiral really taking hold here So I do think that they are going to continue to start tightening They're going to continue through the course of the year I think what's slowing growth and hopefully slowing inflation which is our call will allow them to be gradually I think the market's really concerned right now because humble and nimble Well he's telling you there's a lot of risks out there The market's pricing these risks and is this a 94 tightening cycle Is this all four like tidy cycle The market's only bracing in four hikes the CNI say only should we be pricing in 7 Should we be pricing in really fast runoff I think that's the focus in this meeting It's the risk around the fed's baseline Do you see smooth glide path coming off and hyper cautious chairman here in about an hour He's going to have prepared comments He's going to be coached and from that do you see instability or stability forward and now fixed income reacts It's a really delicate balancing act that he has to maneuver today Because I think you know the market's done a lot of work for the fed I don't think the fed wants to step back from talking about starting the hiking cycle in March from doing balance sheet runoff later this year So I think some of the typing in financial conditions I'm sure they didn't want the speed of that tightening but every hiking cycle can actually condition statement And I think that's an intended That's not an unintended consequence That's an intended consequence of a hiking cycle So I think he has to sort of reinforce market pricing But at the same time tell us that this hiking is for good reasons It's like me telling the kids that actually those vegetables are good for you It's a little hard when it's a hike because we know it's going to slow things down But to say that they can be measured I think if you can take some of those tail risks scenarios down we can not talk about 50 basis point hikes or intermitting hikes if the market just gets a little more comfortable that this is a measured gradual pace of hikes I think some of this extreme volatility can start to subside But I'm not sure how he can talk about the base case the risk outlook talk about being humble and nimble and at the same time tell us that don't worry we can be really gradual I think that's what he's going to struggle with I think there could be volatility particularly if on the balance sheet he sounds a little bit more complacent I think the market is high for focused on the balance sheet If they plan to start it early and if they plan a quick phase and you were talking about that earlier we have a really gradual phase and to give the fed optionality in case inflation decelerates If they're nervous and they want to face it into terminal caps within a couple of months that's a lot of lightning in terms of real rates in terms of overall financial condition So that's why I can see volatility The priest stay close I want to bring in GMP and co of Bianca research as well Jim I get two questions a lot particularly over the last couple of weeks This 50 basis point high story is number one Number two is whether they make a decision another one to accelerate the taper and just wrap this thing up What are your thoughts going into this one I don't think 50 basis points you know assuming we're talking about the march meeting is likely The accelerated taper I could definitely see that because what we've been doing is dancing around the big issue And the big issue is President Biden's press conference last week He acknowledged that inflation was a problem and he said quote this is what we're going to do about it The Federal Reserve will fix it essentially is what he said after that And the next sentence So Jay Powell's audience I know this is Bloomberg and we're talking to Wall Street and we think that our audience is.
Bloomberg Radio New York
"david blanche" Discussed on Bloomberg Radio New York
"The NASDAQ 100 with the NASDAQ composite And I think we get another late lower It's actually going to be led by the S&P 500 as people start selling the stocks that haven't gone down as much So that's where I think the next leg comes down is this further shift to the S&P I'm not quite ready to buy yet but I am starting to look at that And I probably will start buying with some of the most beaten up sectors first Hey good to catch up As always pity cheer of academy securities If you missed Pete's research at a little bit earlier this week he published coming into the coming into the new week after the weekend This is what he had to say This was the quote I've seen surprisingly little on the theory that the fed is just jaw boning to push inflation expectations to an acceptable level and chore burning politicians to keep them happy Jawbone has been one of the best tools of central bankers for decades Tom Kane is that all this has been over the last month a jawbone a wait and see I agree that the fed is reacting to the zeitgeist in the rhetoric but I don't hear in fed comments with one exception a lot of job owning What stuns me John is presidents and governors making comments on specific rate hikes in sequences of rate hikes That's new territory at something we've never seen before It's the comedy So we haven't even had one We haven't had one I think that's worth sitting on just for a moment later So we haven't had one of the NASDAQ's already down 10% from the November highs But we also haven't had inflation like this And the stock traders are all trying to get ahead of the inflation that a lot of people are seeing in terms of the momentum And this time is different in that you are seeing real inflation that we have not seen in decades The question remains are the transitory believers still out there and it seems like he cheer is saying you know what This actually does resonate for later this year Later this year we've got a lot to talk about Do we see that deceleration in economic growth this year which would encourage people to go back into some of those growth names Do we see that deceleration which would encourage the fed maybe to back away from interest rate hikes That's the debate of the momentum That's why we've got some people saying four 5 We've got some people saying too You're Steve englander of standard chartered game with two Looking for that deceleration later this year that deceleration in inflation I'm gonna go around England or I'm gonna go to David blanche full of Dartmouth and David Rosenberg up in Toronto with his own shop and what these people are saying is it's dynamic and things change as events occur And if you do get a yield up is you do get the fed pulling away fiscal stimulus abs That's a whole new world after all I hope we can catch up with Danny soon because I'd have a basic question and Danny and I go back a long way With good friends But I want to understand a conditions at which he would call for an interest rate height hump I do want to understand that because that's been absent from the conversation for a while That would be true That wouldn't be true He has been very very skeptical Some cane Lisa parameters and Jonathan farrow yield to level three basis points lower one 83 43 on tens This is Bloomberg.
Bloomberg Radio New York
"david blanche" Discussed on Bloomberg Radio New York
"S&P a third of 1% Tom Keane even if the outcome is clear for chairman Powell a little bit later this could be a heated exchange down on Capitol Hill I'm watching two ten spread very carefully here John and it's sort of like the market and granted some of this as they were saying relief off the huge equity move since what 2 p.m. yesterday but I'm watching the bond market and I really wonder if it's front running what Powell will say where he will calm the inflation storms I'm not predicting that I'm just wondering how the market's gaming it into what 10 a.m. this morning One 75 on tens going into that and Lisa also coming into CPI tomorrow 7.1% is the median estimate in our survey so far for headline inflation And right now people are baking in three rate hikes possibly four for 2022 Again we've seen the buy the dip kind of mentality comic I'll come in How much is this predicated John I mean the idea that the Federal Reserve does not want to see market sell off too much and how much is that anachronistic idea at a time where inflation is running itself That's the point isn't it And so Bill Dudley's point yesterday Tom he's not just saying let's go Let's go hard That's the difference between Dudley and this Federal Reserve at the moment Well there's a lot of differences here There's what China you know it's like flavors of ice cream There's 28 flavors here from disinflation out to outright inflation No question doctor Dudley is out saying this is a serious issue that got to get out front and just getting going is an enough He's looking at four or 5 dare I say 7 rate increases down the road Tell me he's going to get fancy sir and forecast Fantasyland forecasts over at the Federal Reserve and saying that fed funds rate needs a three handle Needs to push four It's just not part of the conversation at the fed right now The David's disagree I don't know what David Bianco's going to say but David Rosenberg does not agree without assessment David blanche flower up at Dartmouth college acclaim does not agree without assessment There's a lot of different opinions here John I don't think Danny thinks it should have a one hand though 8 of them are the best at times Tom came Lisa brahe and Jonathan Ferro your equity market up 16 on the S&P advancing a third of 1% Yields unchanged at one 75 51 the main event yesterday was to turn around in the NASDAQ down by almost 3% Then back into positive territory in positive territory again this morning Up 75 Lisa up a half of 1% Our bond markets and stock markets singing from the same hymnal And this to me I mean we were talking about that earlier this week When did the pockets of pain turn into a more broad based risk aversion at 9 a.m. or about 9 12 a.m. Jonathan farrow I believe you know him We'll be interviewing Cleveland fed president Loretta master on Bloomberg television How much does she reiterate what we heard from Raphael bostic of the Atlanta fed earlier today saying that he thinks that the march meeting could be the beginning of liftoff that every meeting is live Is the market really baking this in on the risk asset side or just on the edges in the debt markets Today fed chair Jay Powell center stage for the Senate confirmation hearings How much does he reiterate inflation as the leading issue How much does he say They want to see a market disruption in order to transmit their policy He and his prepared statement he talked about using tools to support the economy and a strong labor market And to prevent a higher inflation from becoming entrenched how much does it speak to that wage spiral that wage price spiral that we just heard about from Lindsay pizza And then at 1 p.m. the US Treasury Department will sell $52 billion of three year notes at a time when yields are at the highest level going back to February of 2020 How much does the international buyer come into play And we see this sell off really broadening throughout the globe And if not if they do not come in in a more meaningful way John do people rejigger their sense of how negative real yields can remain for the foreseeable future Important questions later and thank you looking forward to the conversation on with the Cleveland fed president Miami joining me to help lead that conversation Beyond just the march called Tom the interplay between the balance sheet and rate hikes is something you and I and Lisa have been talking about through much of the year so far That's got to be a part of the conversation a little bit later this morning It's important with master the mathematician First of all you got to ask her what she's going to do about the Cleveland guardians It's not her fault They changed the Indian's name to the guardians but she is math first John and I'm really interested in what she says about data dependency I sense she does not want me to ask her about the Cleveland guardians But I'll read in just a few years I've DWS Americas I think that's what most of the audience are thinking Don't ask for a bad thing David thank you for being with us Let's start here Good morning everyone This is cycle is moving so so quickly David What do you make of that Just a speed of it Now the speed of the cycle is quick It's a rapidly aging cycle We'll see if it ages well or for ages poorly The cycle is two years old This expansion is two years old but I've used the expression It's going on 7 And as you know 7 8 9 ten is old age for an economic expansion Less cycle was a record of nearly 11 years But throughout this new expansion and this new bull market it's been a very difficult market to knock down We saw that again yesterday We had to sell off in the morning by the end of the trading day It seemed like nothing really happened The two powerful drivers of this equity market have been earnings and low interest rates And now the conversation is really about the sustainability of low and negative real interest rates So we're all eyes are on the Federal Reserve right now And are the views on how many times the fed needs to hike this year and into next year Well that's a view that's in motion at DWS my colleagues and I are talking about it all the time But yes there will be more hikes than previously thought in 2022 But the issue is not so much when the fed hikes or how many hikes in 2022 the issue is really how high does the fed need to go in 2023 or even 2024 to bring inflation back to 2% The question is also what the intention of the Federal Reserve is in their rate hikes Is it simply to slowly tighten the screws at a controlled pace or is it to actually disrupt markets How much is your constructive view that it's on the former and not the latter that they're going to actively try to cause a sell off Right It's not so much about disrupting markets or the equity market Now I don't think the fed would be opposed to a 5 or even 10% dip in the S&P 500 And I think a 5% dip is very likely from the highs of about 4800 on the S&P but not a correction not a swoon I think what the fed is up to is signaling that they don't like these entrenched inflation expectations They're trying to they themselves wrestle with what is the fair shift in the labor share of the economy from the profit share of the economy given the tightness in the labor market versus an accelerating wage price spiral So that's one of the things I want to be listening to the fit speakers all about What's a fair increase in wages and shift in share of GDP versus mitigating the risks of wage price by one other thing Maybe in the most important thing one of the most powerful transmission mechanisms of monetary policy is exchange rates And.
Bloomberg Radio New York
"david blanche" Discussed on Bloomberg Radio New York
"The ADP report out moments ago I thought 34 as an upside surprise Your number on Friday the meet an estimate 5 48 Let's call it 5 50 Going into all of that into the oven about this morning got 52 on the S&P 500 advising a little more than one four percentage point It's the bounty you were looking for after the bounce of what was in Monday and then the decline of Tuesday Hard to keep up Tom heels up to another bout there up by two or three basis points This move fades a bit one 46 98 TK on tens Very good Let us get right to it right now And with the data churning as it is as we go into claims tomorrow then on to jobs report on Friday we get an important briefing here from Julia coronado founder and president of macro policy perspectives Of course wonderful work at the fed over the years and iconic work at BMP Paribas in the tough part of the 2007 crash as well Doctor coronado I want to go back to first principles was the hicksian is model And I want to look at what nobody talks about which is the IS curve There is a major bet by David blanche flower in Dartmouth and David Rosenberg in Toronto that we're going to see disinflation X quarters out Does that come from that IS curve shifting so hard from there being dramatic growth changes that change investment and change output Well I'll say so you're talking about like a productivity boom that would be a lower the inflation temperature because supply capacity would expand That's one possibility we have seen investment investment is running incredibly strong and we do know that the pandemic has pulled forward a lot of business transformation projects that especially in a tight labor market the incentives are to invest and reduce your labor input and that would be productivity enhancing So I think we definitely can expect as a baseline forecast that the productivity performance this cycle will be better than last cycle Everything points to that So that would be part of it I think one of the things that bland flowers been looking at though on a more negative light has been the decline in consumer sentiment and whether that will weigh on spending that would be a much more negative sort of demand decline in demand we haven't obviously seen that in the data Consumers sentiment has fallen off for a couple of months delta inflation et cetera but consumers are powering ahead and reporting The best labor market they've seen in decades Can you inform us on the arch bat that if we get productivity we don't get wage growth that is the great fear of those worried about high interest rates Well no the thing with productivity is you can get wage growth right You can get I mean that's the story of the 90s We had some of the strongest real wage growth which was just fine because productivity was delivering that So that's the sort of what we're seeing in some of the for example the leisure and hospitality the restaurants that are paying their workers more but reducing their labor input and therefore not having to raise their prices as much That's the sweet spot that workers can actually get raises if there is sort of a shift in regime such that the labor market is tight enough and labor income can keep up the labor share of GDP can not decline like it did last cycle then workers can benefit from those productivity gains and you can get that that nirvana of moderate inflation pressures and good real wage growth and stronger top line growth and good profitability How long can this Nirvana last if a wage growth is not keeping pace with consumer inflation Well that's right That's the problem of the last cycle And actually the last two where wages didn't keep pace and the labor share of GDP fell And that I believe in my view contributed to some of the low inflationary pressures the fragility of the cycle the weak demand environment You need broad based robust demand to meet the feds kind of centered 2% target if we go back to that old world where workers gains from growth are very unevenly distributed workers don't get their share then you can get back into that disinflationary environment Again all signs point to something that looks better than cycle I think that's the dividend of the go big go early macro strategy You know we're all focused on the negatives of the high inflation but over the next couple of years what we could see is better productivity that could mean inflation can cool back down towards the fed's target and yet profitability could remain robust and wages could remain robust That would be certainly what you hoped for Yeah And so far so good Julia one aspect though does raise some pretty big questions here and that is that profit margins for U.S. corporations have remained the highest going back to the 1950s Yes they have raised the wages of their employees but their profits have risen way more at a time when you do see those consumer prices outpacing wage growth How long can that last I mean is this basically what is occurring at a time when labor still doesn't have the same sort of organization that it did back in the 1980s So that's a great question I mean what we're seeing in record profitability is that we're booming Again the go big go early macro strategy was you boom out of a recession You don't sort of limp out of a recession So we are booming The economy is booming profits are booming wages are booming demand is booming Where do we settle down into our firms able to match that the challenge of the tight labor market with productivity enhancing investments If so then they can maintain their margins even as top line growth cools We're not going to see probably wages continue to be rising at 5% annualized pace next year But do they cool to something that still keeps pace with the prices and allows them to continue spending at a healthy pace I think again what we're hearing from companies is that they are actively investing into this And trying to meet these challenges So we'll see we've seen a lot of resiliency and I think you know most people are forecasting a pretty darn good year next year as well Are we going to see savings used I mean I'm totally confused Julie I'm truly confused folks On the idea of what is the savings and how will it be used at the margin Right What do you say I mean that's a huge source of uncertainty and I don't love the term excess savings because it's sort of a presumes that the prior level of savings was optimal in some sense and we know that the distribution of income and wealth was so unequal that many households In fact a majority of households didn't even have a minimum of precautionary savings So we don't really know now that now a lot more households do have cash on hand and how much do they hold on to how much do they spend We've seen the saving rate return to pre COVID levels But that still leaves a chunk of money in reserve And we just don't know how much consumers will dip into that and exhaust it We do know that again we're not going to get the repeat of the fiscal support that delivered that cash So at a minimum households are going to be making decisions very differently from here forward based on their expectations for labor income whether or not they how much they dip into that cash reserve tell us a little bit about the growth impulse this year but sort of going forward we're looking at a more organic growth momentum the baton is being passed back from policy support to private sector momentum Julia have we learned from fed chair Jay Powell yesterday in his testimony that inflation is now a more important mandate than employment for the Federal Reserve Yeah I mean I think the way he will describe it and the way he described it yesterday and will elaborate on it at the December meeting is that actually they may not be seeing a conflict in their mandates that the labor market I mean if we're adding half a million jobs a month we're going to get to full employment pretty darn quick So it may be that they just one thing that they've learned from the October round of data is that yes inflation surprised again to the upside But so did jobs and so did consumer spending And so the overall picture is again that of a boom They don't need to be as supportive They need to appropriately recalibrate policy and that means speeding up tapering and probably bringing forward rate hikes Julia always great to hear from.
Bloomberg Radio New York
"david blanche" Discussed on Bloomberg Radio New York
"TV David blanche flour joins us of Dartmouth His book the wage curve is the classic on labor economics and we're honored that the professor blanche flower could start us off strong Professor it's your Wheelhouse I hear worry about wage growth Should chairman Powell be worried about wage growth Well not yet We're still seeing adjustments going on from that shock The reality is that normally the wage curve in the Philips curve slopes down It appears to slow up now because we're going through major adjustments And honestly I really don't understand this change in mood music The labor market's incredibly slack the employment the population rate is two and a half points below where it was in February And inflation is slow I don't quite get it I'm looking at the numbers here We have months of .7 .8 .8 .9 and then in the last three months he went .5 .2 .3 So we're going to hear everything's changed and blanched with going to say where's the evidence Confidence is collapsed I mean I'm just looking at the data The data says information is slowed So everyone says we're going to taper because the worry is inflation's not transitory anymore but the data says exactly the opposite So that's fine But let's just go with reality Reality based no resemblance to the conversations I've been listening to people saying oh this is not transit you well it's slowing So why did we think it's not slow Let's say the fed remains patient and really holds off on raising rates for longer than the market is expecting What's the terminal rate that you foresee for this economy Well I mean my view is this is very very hard to know I mean this is an economy that's going through full adjustments later is better than sooner My expectation is that we're going to see low rates for a really very long time And the labor market is still to adjust them and we're still talking probably 9 to 10 million jobs below where the economy is capable of And there are short term things going on with wage growth Some of that's to do with base effects A lot of it's to do with composition effects And really we're going to say it's time to raise rates for some of these occupations But for the first time in getting wage growth in 30 or 40 years so this just I mean I'm sorry to sound like the outlier here but wage growth isn't the issue inflation isn't the issue what is the issue Is the huge amounts of slack still in the economy and the fed sensibly is going to put off doing anything until it sees the whites of the eyes of inflation So anybody who says this is not transitory is to actually show me some evidence and to this point not a soul has as consumer confidence is collapsing exactly predicting the recession that we saw in 2007 the data looks almost exactly like that So my new music would be sit and wait for the next expectation that you're going to have to do more stimulus and maybe even go towards negative And what if they say what if you find the Mike McKee reports on Friday a really bad jobs number Are they going to go and reverse it In history One of the hottest ISM's in history in a couple of hours later we're having a conversation about a recession Gone 58.7 is the imploded population rate It was 61.1 in February It was 63 and 2007 and it was 65 in 2000 So you're going to argue that the economy is at full employment when there's clearly 10 million people who are available to work And if wages rose and jobs came those people would go to work So to argue that this is a tight labor market It is complete nonsense Most where are those 10 million gone They just sitting there doing nothing Well normally what happens is we move to a tight labor market It's those folks who come into the labor market as they're attracted by higher wages than their reservation which we're seeing none of that I'm afraid I just said it We're going to continue this conversation You can have the unofficial descent on this program It's going to join us shortly and we'll carry it on Danny blanche for them again on all of this The risk of waiting and the risk of acting That's what's so important about this debate that's taking place right now going into this decision 18 minutes away There are people who believe strongly that the biggest risk is acting and others who believe almost equally as strongly that the risk is waiting To make a sharp folks as we can as we prepare for this John has Taylor of Stanford disagrees with David blanche flower of Dartmouth There's no other way to put it John Taylor get out front We don't need to be data dependent We have a rule and blanche flower saying wait Danny thinks he's at the Bank of England still Tom He does He does he thinks Carter is going to win their next game He was on the FMC His afternoon too Premieres was going to join us shortly from TD alongside Tom Keane and Lisa braved some Jonathan Ferro your equity market dad 6 negative about a tenth of 1% The bond market set up as follows in the treasury market we look a little something like this on tens Yields up a basis point to one 56 47 and the FX market Euro dollar unchanged at one 15 79 A Tom came through the afternoon We're 18 minutes away This is Bloomberg.
Bloomberg Radio New York
"david blanche" Discussed on Bloomberg Radio New York
"We can So 2% away from all time highs on the S&P put that and a headline We snap back really quickly at four tenths on the equity market advancing yields higher two by three basis points TK Going into retail sales 27 minutes away you'll yield one 53 88 Exceptionally important research by the gentleman from Dartmouth David blanche flower joins us now as public service to his United Kingdom to his whales Frankly it is card of football team as well And we're thrilled that Danny blanch flower could join us this morning again I'm going to see I'm going to digress here I know John wants to drive in dive into this research We are seeing big tech now show that David card and Alan Krueger got it right They nailed it on the minimum wage Now we have big tech bidding up labor to 17 $18 an hour across America What is the effect of big tech on the minimum wage Well I always live in Hanover New Hampshire Tom My kids used to go and work at the local cinema And they'd work at ten bucks an hour And obviously north of the northern part of the United States the minimum wage didn't buy but what we're seeing here is a labor market adjusting to a shock And basically firms having to pay the going price The question would you guys are all thinking about is does that continue in the future Just because there's a once of rising wages does it necessarily mean something going forward For us start with this week announced a 3% bonus for all its staff But that lifts prices this year and does nothing next year So the question is you know we're emerging from our bottleneck I don't see anything really actually that suggests that prices in 18 months will continue to rise This is a once off jump for an economy that suggesting firms are having to pay for those shortages but arise today doesn't mean arise tomorrow Danny I don't want to bury the lead here You've got a recession call A recession call When people are looking at 4% growth next year what's the recession call about Well if you have a new paper coming out on Monday if you Dave Wilson put it out this chart yesterday If you look at what predicts all 6 of the last 6 recessions it's actually consumer sentiment consumer expectations And that if you look at the paper I had coming out that turned in the U.S. around April May this year It looks almost identical to what happened in 2007 And people can poo poo it but these are the data These data are precisely what explains 6 of the last 6 recession Nothing else does And there are no false calls So the question is what's going on And I think the answer is that it's about the spread of COVID we've seen and it's particularly amongst women who've said they're fearful of going back to work We're seeing people withdrawing and in the last month we sort of huge drop in the female participation rate of 18 to 25 year olds and 25 to 35 year olds and 35 to 44 year olds So I think it's women being very fearful anxiety in the U.S. has risen That suggests spending is going to pull back and it would not be surprising consistent with that to see falls in retail trade So I'm not saying this will happen but all the other dangerous completely messed up these days are the best you have and it's now is flashing red Danny there's a lot here to pack to unpack We've got the participation right We've got the labor market and the question over whether it's tight or loose and then there's the issue of the importance of consumer sentiment surveys which has been called into question by some people Others would argue that if you look at other consumer sentiment surveys like the Langer one it shows a different picture of the University of Michigan survey That basically this isn't clean either How would you respond Well you know they can make stuff up but the question is what is the data actually show And so there's the sets of econometrics particularly show that these things predict it So you may not like it but that's factually what it does Particularly in these data we actually now have from the conference board We have data since 2007 on the 8 biggest states And basically the expectations indices there predicts behavior 12 months ahead So people can put food Just go and look at the data to run it yourself It's not the case that they don't like it because they're just making it up The data shows that you can predict with exactly these data The question is there whether this is the this is the 7th of 7 and is this the one that gets it wrong I think the concern is that most of the other data looks to be crazy I mean if you look at Tom always asks me about the wage code Well for every recession I've ever seen in the world as the unemployment rate goes up wage growth slows well in this one the opposite happened The Philips kurd now slopes up the wage curve slopes up It's not clear that that's true And it's most of the other day I don't believe that you asked me which day I do believe it's these dating So Danny underlying this is the idea that you don't think that the labor market is as tight as other people think That is sort of the presumption that seems to be baked in Can you explain why that is at a time when you do see all of these job openings and you do see the wage hikes that we are seeing right now to entice people back into the labor force Well the best analogy is that this is like a hurricane hit in a place hidden say that the coast of Florida So presumably what happens is when that because it's the price of roofers and plumbers and gardeners rise as an economy adjusts Just go back to the fact we had in April 2020 The unemployment rate went from three and a half percent to when you calculated right to 20 And wage growth went from 3% to 8% Well so unemployment rates like crazy So what happened was the bottom part of the labor market drops out There are certainly adjustment costs coming People are withdrawing from particular kinds of goods for a particular kinds of work And firms are having to pay people because they don't want to go and work in a store They don't want to work in consumer facing places And that's the survey from grant Thornton and the conference board saying people if they're forced to go back to work they're going to look for another job or quit So we're seeing people retiring So this is an adjustment of an economy that's been hit by this shock and people are fearful And all the evidence is that fear rose dramatically around May of this year And particularly driven by women being fearful that they'll go to work and bring something home to their families That's consistent with the data I mean whether this is whether this is predictive we will see but be mindful that the people who guess have no mechanism by which they can predict the last 6 And these data predictable 6 of the last 6 And so it's mindful to them to come up with well how do you predict the.
Bloomberg Radio New York
"david blanche" Discussed on Bloomberg Radio New York
"Well telegraphed Interest rates the whole bond market is controlled by the fed We should be the opportunistically reflating We should be saying okay inflation is now above 3% Let's re anchor it there That era of being more afraid of deflation is almost certainly This is Bloomberg surveillance with Tom Keene Jonathan farrow and Lisa Abramovich Good morning everyone Jonathan Farrell Lisa brahmas and Tom Keane our studios in New York and in Washington at the meetings of the IMF and the World Bank but also the meetings of Goldman Sachs is our release earnings here in this hour and John underplayed this morning The pulse of the American consumer retail sales couldn't agree more Tom U.S. retail sales had a story we've been obsessed over over the last several months upside risk to inflation downside risk to growth earlier this week we had a little upside risk on CPI Tom upside surprise 8 30 east and will we get a downside surprise on retail sales That is exactly what Steve England has stand sharp predicted Tom coming into the week And this is critical folks in moments David blanche flower old join us He is fiery about an American recession led by a consumer slowdown John the observation this morning of oil at 85 And copper advancing as well Tom We're drawing down stockpiles Demand is tidy supplies a problem Commodities have been rallying We used to this story now Interested to see equities up to a nice bed here a firmer market Tom at 16 on the S&P advance in about four tenths of 1% There is a lift to close out the week and we're poised for another week of gains And at least there's confusion in the air Lisa reads in cyclope I mean she starts out like getting midnight I think She's coming in from Mars Lisa What is the narrative What's the narrative now Lisa that matters Right now I think that this whole idea of when do higher prices start to crimp demand When does that pressure the consumer And I think that this goes to both of your points And this was the point that you were making earlier time of pricing power The companies have how much do we see that diminished We are seeing in the consumer surveys that consumers are starting to show more discretion with what they want to buy even though they are supposedly flush with cash and that does not necessarily bode well for the momentum of growth I'm not saying the end is near to some listeners but I am saying that it could potentially slow the momentum What's that story Tom What do they do they stand with about 200 years ago What did they scream here Something like that I wouldn't know.
WHAS 840 AM
"david blanche" Discussed on WHAS 840 AM
"Coach dot com and One of the things that everybody wants to know is we get ready to walk away from the 9 to 5 and worked our way into this thing called retirement is How am I going to get paid? How is the paycheck going to continue? I've been used to getting a paycheck every two weeks for my whole life. What happens when I retire? Well, it's a very interesting look at this from David Blanche it from Morning star, he said. There's two ways that people look at this. And there's a little bit of disagreement going on. Retirees are an odd bunch to some extent, you know. So what would I do? Research on retirement? You know, I assume that people are going to spend down their nest eggs like you saved to spend it, But that's actually not what happens, right? People in retirement really like the idea of living off of income, right? They want to leave the principle alone, too. Kind of, you know, hedge against an uncertain life span. You've got health care costs. You've got the quest schools all these things. And so I think a lot of retirees you're saying Well, hey, how can I generate income from a port Polio, So it's a great question, and it's between I will amass as much as I can, and then I'll take it as I need it some percentage or some amount or do I take that big amount and build it into something that kicks in? Come off, so Alan, How do you answer that question? Well, I think you have to do a little both. But the main thing that we've seen and I think the most folks or are interested in is just what the first question was. How did I create income in retirement? David's right. I mean, a lot of folks want to maintain that principle. They just want to live off the interest. That would be panacea. We could if we could all do that. And maybe you can, depending on what your lifestyle is. Maybe you just You can live off of most yourself Security. And if you had a pension, maybe you can live off of that and where Maybe you can create a pension with some kind of income product, like an annuity or some bonds or something of that nature. But the reality is is that most folks that we worked with are going to spend through some of that money. They may be able to pass on a large percentage of it, but they're gonna spend a large percentage as well because You know, with almost all of our clients, I'd say probably in the 80% range anyway, after they've retired, they're looking to do things that they've always wanted to do. They're going to buy that Lake house or they're going to purchase an RV or they're going to, you know, by boat somewhere, they're going to travel, you know internationally. Of course, that's changed a little bit with last year and everything but That's all going to come back, and I feel like that You're still going to want to spend funds as you always have, And that's the challenge is that you know you get to that age where you're in your fifties or sixties. You don't have the obligations that you had when you were younger. Maybe some of those things have paid off. But you're still used to living that lifestyle and we get used to living that lifestyle through our sixties and early retirement. We want to continue to live that lifestyle. So what we've talked about four on the show is that we typically see the need for income increase when you first retired by 15, or 20% for the first 5 to 10 years. And then we start to see it. Fall off. So again Building a portfolio is possible. You could you know, Universum Nice dividend paying stocks out there that you know we're seeing dividends and the You know, 56% range, but you can certainly build a portfolio to create some income. But I think you're going to need something, Maura that to protect that as well, Maybe some type of Ah, Product that's going to provide you guaranteed income, working annuity or bomb later or something like that. It helps to promote that income throughout your life. So how do I get paid in retirement? There's dividend paying stocks. There's certainly social Security that's going to get you a check. Maybe you've got a pension. There might be an annuity these air, different things that you can build that will pay you a paycheck in retirement. So one of the things that you think about is what the other options there. You know, a CD money market, a a bond that these are different things that people use and there Retirement years to generate some sort of income. And the thing is, is that interest rates now are so low and there these things like CDs and money, markets and bonds are things that are dependent on interest rates. So in a low interest rate environment, it kind of cuts down these things. But what about annuities? You mentioned annuities? Are they dependant on interest rates? Well, here's the same guy David Blanchett talking from morning star And he says, you know, actually, an annuity is not that affected by interest rates. The one thing that people don't often understand is that annuities air actually a relatively better deal when interest rates fall, right. So there's this concept of mortality pulling in annuities. Where? Sure some folks are gonna You know, live a long time. Some folks live less, but when you add it all together, it actually creates Maurin come, then you could generate for yourself. If you're creating a safe income stream until, say, age 95. So it's that other piece that mortality pulling that hasn't changed that actually makes them or attractive environments when interest rates decline. So that was interesting to me, and it was actually kind of a shock to me. I figured that annuities would suffer in a low interest rate environment, but I mean, can you attest to that, Alan that there are people that have annuities now? That are still doing well in a low interest rate environment. Absolutely. I mean, I think that the most of the annuities out there now are focused on these like these index type annuities that air tad to some type of stock index. So as the stock market has increased, these indices have also increased and you've had decent rates of return. Adam now you're not going to get rich on them. I mean, typically, we had vast clients that you're probably gonna take anywhere from 4 to 6% a year. On these annuities over time, you're not gonna That's not a guarantee that you're gonna make that over time, but I think that they're less affected by the interest rates because they are tied to the different market indices and everything. Now there are some fixed annuities that do you know, suffer a little bit with interest rates and the interest rates do change the caps and the participation rates and things like that inside some of these index products. But the thing that surprises me is that I regularly meet with folks that come in, and they already have one of these annuities in their portfolio, and they're trying to get rid of it. They're trying to, you know, say, Hey, somebody told me this years ago and I don't like it. It's tied my money up and I haven't made anything on or haven't made much on it or they're trying to get rid of him..
Biz Talk Radio
"david blanche" Discussed on Biz Talk Radio
"So get ready for that, cause it's coming. I'm gonna say a bad word. Don't believe me. Keep listening. I want to point out, though, If you'd like to get a hold of us on the show, we're doing a second opinion service $995 value. If you want that road map to a successful retirement. If you want to be able to dial up that GPS navigation like you do in the car when you don't know where you're going, he's punching the address and it takes you there. Turn by turn. That's what a second opinion service does. It navigates you through what it is you're doing now and what you should be doing. Should you stay the course Should make a right. Should you make a left? Should you get on the interstate? Should you take the back roads? I mean, it is absolutely turn by turn Brian, my hitting that, right? No, You're absolutely right. I mean, I think you know it's guiding you directing. You mean we've got people are incredibly smart that come in here is not that there are intelligent if it's just They don't really necessarily have the tools or what to look for. And essentially, that's what you're doing. You're saying this is what I have. This is where I want to go. But I don't know the best route to take and the best route to take. Maybe, and sometimes one or two routes like, well, you have the option to go this way. Maybe a little higher risk. But you maybe get their shorter and this one's a little more safe and conservative, right? But a little more scenic road. Yeah, and but you'd probably get there. Just maybe, with a little more added peace of mind. And then you get people options like that. Like, Well, I like that. You know, I don't necessarily want to take that risk. So I think it's looking at everything you're doing and just trying to see if we can make it better. Decision for you and your family, right? I mean, there's a lot of times what we're seeing. Is folks going the I've got a plan, I think, in fact way to set the gentlemen and in the Lynchburg period. I said, come in, because I know people are actually coming in the office were much more about over the phone zoom call right and we should We did the plan and Lynn are other funniest planet went through everything. I went through everything, or C p a looked at and said, Here's some recommendations. And he ultimately said at the end, and it is White Bowl said Okay, no one's ever talked about the taxes My Sita has intact with along from taxes. You're the first one to recommend a Roth form. Okay? You're the first one to say we should be funding our traditional are Roth. Iraizoz. We've got all this money said and checking accounts don't do anything for us anyways. And you know, even if it's invested, it's paying. You're paying capital gains on why I don't mind. I do that. You're the first one saying we're gonna get the trust and will set up whatever. Maybe right, we're gonna Send you an attorney. Get it done because this isn't just a Let's talk about it and give you a business card. We're gonna actually get it done, Brian that one of the most underutilized tools among retirement planners is and I'm getting ready to say this bad word. It starts with an a Annuity. That is to say some other three letter word. Didn't you know? Annuity is what I'm talking about that maybe because they're somewhat controversial. David Blanche said He is a professor of the American College of Financial Services. And morning star asked him to weigh in on annuities. Here's what he said. The funny little purpose of an annuity is, I perceive them is guaranteed income for life, and I think they could be a really viable way for retirees to create income because people are terrible. It's been in their wealth You know, people tend to under consume their port forces really hard to know. Gosh, I have Ah, let's have a million dollars safe retirement. You know how long I'm gonna live? You know how much can I spend it? I think you know if you don't know what ties you worry more. I think, you know, Guaranteed income gives you assurance You have some income for life. All right. So Blanche had also said that annuities are great, but they are not for everyone. So what makes you if you're listening right now? The person listening right now what makes them A good candidate for ingenuity or not. There. There's so many things that make you Ah, good candidate. There's so many things that don't I mean, you know, I think what he's what he's saying. Is that folks that have certain situations like okay, My parents lived to 95 to 98 years old and I'm in super great health. No health conditions at 65. I'm probably going to be in the same boat. Right? So I have this longevity this this huge income gap of 30 years. And my money may run out. If I you know, don't get some kind of guarantee or the next step is I'm extremely conservative. I don't want to take the risk. We just had someone that was listen to one of our TV segments on CBS. And they called in and we filled out the risk tolerance questionnaires. What we sent out to our new perspective, clients and the filled it out and on a scale of 1 to 10, he was like a one. So one out of 10 as far as risk I'm get. Yeah, I'm getting this pension when I retire, but I don't want to take the risk. So do you show him the growth portfolio? That's you know, goes up and down and one or two or 3% today. Um Or do you show something that's more conservative may be able to guarantee an income. So you know, I think the downfall of annuities that it's there's different kinds of flavors, right? You got Variable annuities. Fixed annuities Fix index in any single premium immediately second. Well, what's What's the good one? Right. Well, what I'm saying is, there's not really necessarily a good one because they all had even inside a good one. Like let's say a fixed annuity, right? You.