14 Burst results for "Plaza Court"
Bloomberg Radio New York
"plaza court" Discussed on Bloomberg Radio New York
"Up. Got it. Nobody's pricing that in. Right now, remember month after month, the yields would go up especially on the long end and you'd have all the bond bulls come out and say they would it's time to buy and this time feels different. Suddenly all of the bond bears are lining up to say, is this just the new normal and that feels like a different set of parameters at a time where people are thinking maybe the economy can withstand it, maybe it can't, especially with some of the other risks, the strikes, what we're with seeing gas prices, what we're seeing with the government shutdown. Lisa's going to do the data check here, but you've got a deterioration of the tape right now with VIX the over 18 solid, the 18 .03. With Michael Purvis coming up, I think it's a perfect segue from what did we with Katie Kaminsky and with Earl Davis. What I would say, Lisa, is it's a compendium of this day, this day, this day, this day, it's adding up. And to the gloom crew, you wonder when it breaks. That's sort of the tension that that we have Monday morning. Two things. To me, I'm focused on what's going on in Detroit, the fact that we're going to have President Biden there tomorrow. We're going we're going to see. The former President Trump on Wednesday trying to rally the troops. And then later in the week, we get sales retail as well as core PCE. And to me, that in tandem with earnings from the likes of Nike, H &M, Costco, do consumers keep spending at a time where yields are climbing to the highest levels going back to before the financial crisis to take a look at what we're really watching today. It is the real yield. And that to me and what you're talking about yields higher, you can see the real yield going to the highest levels going back to 2009. You can see gas prices climbing. Yet again, reversing as hedge funds get bullish to the greatest degree since that point. On the 10 -year inflation adjusted yield permeates through the system, I can't emphasize enough how the effect here of taking us back to, I believe you said Lisa, 2009 or to take some of these levels like the mortgage rate 7 .75 % two days ago, believe I it was, it takes us back to another time and place. A lot of people haven't been there. And there's a foreign exchange component to this as well, which is getting to a level that a lot of people think is disruptive. We heard that yet last week from a number of different guests in London, the euro hovering near its weakest going back to March. You could see the dollar ascendant, but with the yen weakening to such a great degree and in Ueda, not backing down. Again, these different features that just paint a less stable backdrop with very new contours. I you're know going to want to do the data check and get Michael in here. But to me, the basic idea, dear folks, is you can, you can warble gaily about equities, bonds, currencies, commodities, but you never know what's the going to be catalyst to break. I mean, I'm not saying it's the real yield. It could be, you know, it won't be something addict like Argentinian peso, but it's talking to Looney with Earl Davis. You know, it could be Looney going out to 135, 5136. You just don't know. We're seeing weakness and what really comes after a particular weakness in the Magnificent Seven. We're seeing S &P futures down three tenths of a percent. NASDAQ continuing to underperform. And that, to me, is interesting in a moment where it had been the stalwart. Meanwhile, you do see a bit of dollar strength. 632 still firmly below 107 for the euro. And that 10 -year yield crossing the 4 .5 percent threshold. So just continuing to climb higher to some of the post -crisis highs. And moments ago, perfect timing. Bridgewater of Connecticut. It's a startup shop up in Connecticut, outside New York City. Bridgewater says, quote, Japan's move away from negative rates. Now looks overdue. And that's some of that tension of yen at 149. Joining us, Michael Purves, founder and CEO of Taubach and Capital Advisors, to put together how different this landscape really feels. Michael, from your landscape, from your perspective, do you think that yields can continue to climb from here? Or is this a topping as people finally capitulate? Look, I think, you know, take the 10 -year nominal yield. I think there's there's sort of a big technical air pot to, you know, 4 .75 and then 5 percent here. You know, if you look at technicals on the 10 -year yield, I mean, those are looking like, you know, Bitcoin did a couple of years back. Right. It just looks like it's going higher here. But I think, you know, when you think about some of the fundamental underpinnings of it, you know, you've got a situation where term you can measure it a couple of different ways. But that has been expanding. You were just talking about Japan and the J you're looking at interest rates around the world shifting higher. That means the foreign anchor of Japanese or, say, German sovereign paper is not what it used to be. You know, it was just a couple of years ago had, we what, 18 or 19 trillion dollars in negative yielding debt. That's down to half a trillion today. And it looks like that billion is heading to zero pretty fast there. So I think there's, you know, this is a Treasury sell -off very different from last year's Treasury sell -off. Last year was about, you know, how many heights is Powell going to give us? What is CPI going to do? This year it's much more about really, I think, roping through where are stars going to be, where Fed policy is going to be over the longer run. So I think, yeah, I think the tenure is going to keep shifting higher here. Just to double down quickly on what Tom just mentioned with Bridgewater, are you saying that Bank of Japan is sort of inevitably going to also back away? That they're the next stone to kind of drop in the steady march toward higher benchmark rates? Look, I think right now the BOJ is playing with fire a little bit, with a currency, with a country that imports all its oil. Right now you're, you know, it's a stretch to call the dollar a hecto currency, but relative to Japan and frankly Europe, we kind of are because we're not an importer of oil like we used to be, and oil is a big part of our, oil extraction is a big part of our economy. We're now producing as much as we ever have in the United States' history. Japan, of course, doesn't have that ability, so if the dollar rallies say and crude jumps another 10, 15, 20 dollars, you're going to start looking at the yen at a very difficult gold plays, which means either the BOJ has to join the hawking party, if you will, or you're going to see some really, really interesting and potentially dangerous dynamics play in out a very important economy, and that could be one of the tail risks that All the markets are going to have to contend with in the coming months that the BOJ continues to play this game. Michael, what do you do you're going to see. Thank you. I take immense issue with where we are now, the gloom and all that as well? You know, I look, Michael, we've got the SPX about that? What do summertime drawdown, that's not a correction. Can you see a correction coming? You plan for it. Well, I'd say it this way, Tom. I think there's parts of the market that have been very overextended. That's the magnificent seven, the big tech part of the market. I think if I'm right that that nominal real longer term interest rates are going to settle into a higher floor than what they had been, then I think those valuations are going to come down unless they, you know, look, if they blow out earnings, you know, in the next quarter, that's now not too far away, you know, okay, you can maybe still have some A .I. buzz hitting those things. But I think what I'm expecting to happen is that valuation will adjust lower on the big tech part of the market and the everything else part of the market will be okay because the valuation is not overextended there. With all that said, I'm kind of looking more of a range -bound S &P into the rest of the year and, frankly, into 2024 because the earnings growth in 2024 is probably, in my estimation, is going to be mid -single digits. On dollar call, DXY, if it was to break out higher, we talked about the Plaza Court earlier. Let's not do that now. But Michael Purvis, the basic idea here is dollar strength becomes pointy, becomes stochastic because people say no.
Bloomberg Radio New York
"plaza court" Discussed on Bloomberg Radio New York
"It's happening to the U.S. too. You all paying back debt at a higher level. But if they have to pay back in dollars like you're getting to, it's harder to get that many dollars, right? So it's costing them more to pay if they have dollar denominated debt. So it can go in a various tentacles that hurt them for sure. Do we have to be worried Liz about, you know, we've seen this in the past, right? You talk about history, was it back in 85 in your story you talk about the Plaza court. I mean, do we have to be worried though about other nations working in agreement together to counter that strong U.S. dollar? Well, of course, some are trying in unison, like you guys have talked many times about the bank of Japan, which had been intervened unilaterally trying to slow the weakness in their currency. Other countries are doing some mild intervention, but you know, not to be like the U.S. is everything. But for a major intervention to really have heft, the U.S. would have to be involved. So much of FX trading, part of it is price in dollars. So I mean, other countries could try to coordinate a little bit more, but what it seems like. And you know, never say never, but the kind of 1985 style Plaza accord, you know, it is in the cards now. That was Bloomberg news bond in FX reporter, Liz McCormick on it this week's cover story. Coming up, well, the strong dollar. Yep, it's a big macro issue for the world. However, not necessarily top of mind for 1 May or back here in the United States. He is more concerned in making sure his city is among the country's most desirable
Bloomberg Radio New York
"plaza court" Discussed on Bloomberg Radio New York
"Friends at Bloomberg quick take. It's called crypto IRL and its co hosted by. None other than you, Tim. We've got a great season coming up. Katie greifeld is the co host of it, and we sat down with melt them to mirrors in our first episode. She's the chief strategy officer of coin shares. We asked her if the crypto industry owes investors an apology for the months long downturn in digital assets, but you got to stick around to hear what she has to say. All of that to come, we begin with the cover story in the magazine's finance section. It's all about the unstoppable U.S. dollar and why the U.S. Federal Reserve's focus on taming inflation is inflicting a world of pain on other economies. We've talked about this a lot on air. For more return to Bloomberg news bond and FX reporter, Liz McCormick. The whole world has this major inflation problem, right? Of course that's why the fed is focused on tightening and that's why we have such a strong dollar among some other reasons. But all these other countries have this historic inflation as well. And their currencies weakening actually lifts inflation, you know, because it brings up import prices and it's inflationary. So it's kind of the exact thing they don't want. You know, in the old days, we'd have currency wars, everyone wanted a stronger currency. Now people would like a weaker one, you know, but everybody can, you know, currencies, there's a pairs, right? So somebody's got to win in the dollars winning all over. Well, and it's interesting to you're right. I feel like the dollar. It's not just the financial markets, but it's such a geopolitical, I feel like instrument if you will. Jay Powell and the FMC spent a lot of time do they, in terms of looking at the dollar and the impact, we talked, we've had Loretta mester earlier coming out, making a comment and saying, basically, you know, we got to keep on raising rates even in recession. So you do wonder what that fed is like, well, sorry guys, we got to keep doing this. We don't care what happens. Yeah, exactly. I mean, you know, I think it was the fed's boss took who similar to mister was talking about, you know, we have to stay the course on inflation. And like we're aware of what's going on, you know, the UK markets. It could cause some weakness, but basically we've got a job to do, right? Inflation is too high. We have to plow on or with raising rates. So it was Stephen roach. I was talking to you for the first time. You guys know him. And he said to me, yeah, what is it? Reminds me of Connelly. You know, these guys have been around for a long time. Former treasury secretary and he famously said, listen, the dollars are currency and your problem. And this is a super good case of that because and you know the fed is feeling bad because they were so far behind, right? Kind of kept braids and stuff too low and so I don't, I think they're like, listen, we just can't risk any more slip ups, right? So we got to keep tightening. Liz, I do feel like we have a theme today because we talked earlier about that the fed, okay, if we're inflicting pain on investors in the public market, financial markets because that will help them in their inflation fight. And that's the same thing, right? A strong dollar could actually help them in their fight against inflation. Can you explain that? Well, right, because a couple things, people usually say the U.S. is exporting inflation, right? But also, think about U.S. companies you were talking about meta and all the companies, they all do a lot of broad. So in a sense, it slows the economy. It's a little bit of a headwind. These companies selling abroad, their products are a little more costly. So in general, it adds to what we know the fed wants to tighten financial conditions, which can happen through higher rates, lower wider credit spreads, lower equity valuations, and a stronger dollar. So it is one of the kind of I call it amalgam of things that are part of financial conditions, but a stronger dollar does do that. It kind of a headwind to growth. And that's what the fed's trying to do, right? Slow things down. Yeah, I think we got the message. The market certainly have. The question is, you know, how much more tightening does there actually need to be to get inflation under control? What about from the perspective of developing economies and paying back debt? And the effect that this has on the entire world. Well, yeah, that's a real problem because if your rates are higher because part of some of these countries have had to step up the pace of their interest rate hikes to try to keep up with the fed. I mean, like we said, many of them have their own inflation problem, but have had to almost try to kind of keep up. So higher rates mean and it's happening to the U.S. too. You all paying back debt at a higher level. But if they have to pay back in dollars like you're getting to, it's harder to get that many dollars, right? So it's costing them more to pay if they have dollar denominated debt. So it can go in a various tentacles that hurt them for sure. Do we have to be worried Liz about, you know, we've seen this in the past, right? You talk about history, was it back in 85 in your story you talk about the Plaza court. I mean, do we have to be worried though about other nations working in agreement together to counter that strong U.S. dollar? Well, of course, some are trying in unison, like you guys have talked many times about the bank of Japan, which had been intervened unilaterally trying to slow the weakness in their currency. Other countries are doing some mild intervention, but you know, not to be like U.S. is everything. But for a major intervention to really have heft, the U.S.
Bloomberg Radio New York
"plaza court" Discussed on Bloomberg Radio New York
"Friends at Bloomberg quick take. It's called crypto IRL and its co hosted by. None other than you, Tim. We've got a great season coming up. Katie greifeld is the co host of it, and we sat down with melt them to mirrors in our first episode. She's the chief strategy officer of coin shares. We asked her if the crypto industry owes investors an apology for the months long downturn in digital assets, but you got to stick around to hear what she has to say. All of that to come, we begin with the cover story in the magazine's finance section. It's all about the unstoppable U.S. dollar and why the U.S. Federal Reserve's focus on taming inflation is inflicting a world of pain on other economies. We've talked about this a lot on air. For more return to Bloomberg news bond and FX reporter, Liz McCormick. The whole world has this major inflation problem, right? Of course that's why the fed is focused on tightening and that's why we have such a strong dollar among some other reasons. But all these other countries have this historic inflation as well. And their currencies weakening actually lifts inflation, you know? Because it brings up import prices and it's inflationary. So it's kind of the exact thing they don't want. You know, in the old days, we'd have currency wars, everyone wanted a stronger currency. Now people would like a weaker one, you know? But everybody can, you know, currencies, there's a pairs, right? So somebody's got to win in the dollars winning all over. Well, and it's interesting to you're right. I feel like the dollar. It's not just the financial markets, but it's such a geopolitical, I feel like instrument, if you will, Jay Powell and the FOMC spend a lot of time, do they, in terms of looking at the dollar and the impact, we talked, we've had Loretta mester earlier coming out, making a comment and saying, basically, you know, we got to keep on raising rates even in recession. So you do wonder what that fed is like, well, sorry guys, we got to keep doing this. We don't care what happens. Yeah, exactly. I mean, you know, I think it was the fed's boss to coup, similar to mister, was talking about, you know, we have to stay the course on inflation. And we're aware of what's going on, you know, the UK markets. It could cause some weakness, but basically we've got a job to do, right? Inflation is too high. We have to plow on or with raising rates. So it was Stephen roach. I was talking to you for the story. You guys know him. And he said to me, yeah, what is it? Reminds me of Connolly, you know, these guys have been around for a long time. Former treasury secretary and he famously said, listen, the dollars are currency and your problem. And this is a super good case of that because and you know the fed is feeling bad because they were so far behind, right? Kind of kept breaks and stuff too low and so I don't, I think they're like, listen, we just can't risk any more slip ups, right? So we got to keep tightening. Liz, I do feel like we have a theme today because we talked earlier about that the fed, okay, if we're inflicting pain on investors in the public market, financial markets because that will help them in their inflation fight. And that's the same thing, right? A strong dollar could actually help them in their fight against inflation. Can you explain that? Well, right, because a couple things, people usually say the U.S. is exporting inflation, right? But also, think about U.S. companies, you were talking about meta and all the companies, they all do a lot of broad. So in a sense, it slows the economy. It's a little bit of a headwind. These companies selling abroad, their products are a little more costly. So in general, it adds to what we know the fed wants to tighten financial conditions, which can happen through higher rates, lower wider credit spreads, lower equity valuations, and a stronger dollar. So it is one of the kind of I call it amalgam of things that are part of financial conditions, but a stronger dollar does do that, kind of a headwind to growth. And that's what the fed's trying to do, right? Slow things down. Yeah, I think we got the message. The market certainly have. Right. The question is, how much more tightening does there actually need to be to get inflation under control? What about from the perspective of developing economies and paying back debt? And the effect that this has on the entire world. Well, yeah, that's a real problem because if your rates are higher because part of some of these countries have had to step up the pace of their interest rate hikes, right? To try to keep up with the fed. I mean, like we said, many of them have their own inflation problem, but have had to almost try to kind of keep up. So higher rates mean and it's happening to the U.S. too. You all paying back debt at a higher level. But if they have to pay back in dollars like you're getting to, it's harder to get that many dollars, right? So it's costing them more to pay if they have dollar denominated debt. So it can go in a various tentacles that hurt them for sure. Do we have to be worried Liz about, you know, we've seen this in the past, right? You talk about history, was it back in 85 in your story you talk about the Plaza court. I mean, do we have to be worried though about other nations working in agreement together to counter that strong U.S. dollar? Well, of course, some are trying in unison, like you guys have chalked many times about the bank of Japan, which had been intervened unilaterally trying to slow the weakness in their currency. Other countries are doing some mild intervention, but you know, not to be like the U.S. is everything, but for a major intervention to really have heft. The U.S. would have to be involved. So much of FX trading, part of it is price in dollars. So I mean, other countries could try to coordinate a little bit more, but what it seems like. And you know, never say never, but the kind of 1985 style Plaza cord, you know, it is in the cards now. That was Bloomberg news bond in FX reporter, Liz McCormack on it this week's cover story. Coming up, well, the strong dollar, yep, it's a big macro issue for the world. However, not necessarily top of mind for 1 May or back here in the United States. He is more concerned in making sure his city is among the country's most desirable
Bloomberg Radio New York
"plaza court" Discussed on Bloomberg Radio New York
"Friends at Bloomberg quick take. It's called crypto IRL and its co hosted by. None other than you, Tim. We've got a great season coming up. Katie greifeld is the co host of it, and we sat down with melt them to mirrors in our first episode. She's the chief strategy officer of coin shares. We asked her if the crypto industry owes investors an apology for the months long downturn in digital assets, but you got to stick around to hear what she has to say. All of that to come, we begin with the cover story in the magazine's finance section. It's all about the unstoppable U.S. dollar and why the U.S. Federal Reserve's focus on taming inflation is inflicting a world of pain on other economies. We've talked about this a lot on air. For more return to Bloomberg news bond and FX reporter, Liz McCormick. The whole world has this major inflation problem, right? Of course that's why the fed is focused on tightening and that's why we have such a strong dollar among some other reasons. But all these other countries have this historic inflation as well. And their currencies weakening actually lifts inflation, you know, because it brings up import prices and it's inflationary. So it's kind of the exact thing they don't want. You know, in the old days, we'd have currency wars, everyone wanted a stronger currency. Now people would like a weaker one, you know? But everybody can, you know, currencies, there's a pairs, right? So somebody's got to win in the dollars winning all over. Well, and it's interesting to you're right. I feel like the dollar. It's not just the financial markets, but it's such a geopolitical, I feel like instrument, if you will, Jay Powell, and the FOMC spent a lot of time, do they, in terms of looking at the dollar and the impact, we talked, we've had Loretta mester earlier coming out, making a comment and saying, basically, you know, we got to keep on raising rates even in recession. So you do wonder what that fed is like, well, sorry guys, we got to keep doing this. We don't care what happens. Yeah, exactly. I mean, you know, I think it was the fed's boss to similar to mister was talking about, you know, we have to stay the course on inflation. And like we're aware of what's going on, you know, the UK markets, if it reverberated, it could cause some weakness, but basically we've got a job to do, right? Inflation is too high. We have to plow on or with raising rates. So it was Stephen roach. I was talking to you for this. You guys know him. And he said to me, yeah, what does it reminds me of Connelly? You know, these guys have been around for a long time. Former treasury secretary and he famously said, listen, the dollars are currency and your problem. And this is a super good case of that because and you know the fed is feeling bad because they were so far behind, right? Kept rates and stuff too low and so I don't, I think they're like, listen, we just can't risk any more slip ups, right? So we got to keep tightening. Liz, I do feel like we have a theme today because we talked earlier about that the fed okay for inflicting pain on investors in the public market. Financial markets because that will help them in their inflation fight and that's the same thing, right? A strong dollar could actually help them in their fight against inflation. Can you explain that? Well, right, because a couple things, people usually say the U.S. is exporting inflation, right? But also, think about U.S. companies you were talking about meta and all the companies, they all do a lot of broad. So in a sense, it slows the economy. It's a little bit of a headwind. These companies selling abroad, their products are a little more costly. So in general, it adds to what we know the fed wants to tighten financial conditions, which can happen through higher rates, lower wider credit spreads, lower equity valuations, and a stronger dollar. So it is one of the kind of, I call it's like amalgam of things that are part of financial conditions, but a stronger dollar does do that. It kind of a headwind to growth. And that's what the fed's trying to do, right? Slow things down. Yeah, I think we got the message. The market certainly have. Right. The question is, how much more tightening does there actually need to be to get inflation under control? What about from the perspective of developing economies and paying back debt? And the effect that this has on the entire world. Well, yeah, that's a real problem because if your rates are higher because part of some of these countries have had to step up the pace of their interest rate hikes, right? To try to keep up with the fed. I mean, like we said, many of them have their own inflation problem, but have had to almost try to kind of keep up. So higher rates mean and it's happening to the U.S. too. You all paying back debt at a higher level. But if they have to pay back in dollars like you're getting to, it's harder to get that many dollars, right? So it's costing them more to pay if they have dollar denominated debt. So it can go in a various tentacles that hurt them for sure. Do we have to be worried Liz about, you know, we've seen this in the past, right? You talk about history, was it back in 85 in your story you talk about the Plaza court. I mean, do we have to be worried though about other nations working in agreement together to counter that strong U.S. dollar? Well, of course, some are trying in unison, like you guys have talked many times about the bank of Japan, which had been intervened unilaterally trying to slow the weakness in their currency. Other countries are doing some mild intervention, but you know, not to be like U.S. is everything. But for a major intervention to really have heft, the U.S. would have to be involved. So much of FX trading part of it is price in dollars. So I mean, other countries could try to coordinate a little bit more, but what it seems like. And you know, never say never, but the kind of 1985 style Plaza accord, you know, it is in the cards now. That was Bloomberg news bond in FX reporter, Liz McCormack on it this week's cover story. Coming up, well, the strong dollar, yep, it's a big macro issue for the world. However, not necessarily top of mind for 1 May or back here in the United States. He is more concerned in making sure his city is among the country's most desirable destinations
Bloomberg Radio New York
"plaza court" Discussed on Bloomberg Radio New York
"Near kashgar and Jim bullard stressing the need to keep fighting inflation. But former FOMC member Bill Dudley worried that they are underestimating the impact tightening at this pace will have on the economy. U.S. stocks fell for a 6th straight session yesterday with Asia also lower this morning to spring it on the markets he's the head of asset management at first Abu Dhabi bank. And then I look at the hawkish rhetoric from the fed. I look at U.S. ten year yields breaching 4% and a year again from Jeffrey gundlach who keeps tweeting in this hour of programming and this time around, he says, bones are cheap, momentum to higher yields is relentless. How much more could we see in fixed income to reprice? Well, it's gone well above all expectations, I think, and if you cast your mind back to spring, we were talking about 9, maybe 11 rate hikes in the cycle. Well, we're already there, and the Federal Reserve has got very aggressive, which is why we're at the 4% on the ten year. We still believe if there is a 2% inflation target that central banks are targeting, then 3% for ten years is ultimately where we'll end up next year. But we may get an overshoot to four, four and a quarter, perhaps even four and a half in the name of slowing everything down in order to tackle inflection, I think that's where central banks are. What would it take for the fed to moderate its tone a little bit? Because they might not move from the game plan, but come November come December, they might feel inclined to kind of acknowledge that there is a weakening of the economy. And that they are going to take things as they come. Well, they're watching and waiting that the OECD obviously has called world growth down to 2.2%. As we've said, it's to declining dynamic in terms of world growth and unless you're going to get a big jolt to a huge negative number in the months ahead. I think they will continue on this path. What about the high grade bond yields? Because those are breaking out. And we have a story that is basically considering that development and arguing that could get a lot worse for stocks because once credit breaks, you could get another leg lower, agree or disagree. No, agree. Certainly in the short term. And I think there is going to be an argument to see if some of this a to triple-A stuff ends up being triple B or even distressed. We haven't seen the wave of defaults. Certainly in the high yield space, but investment grade in relation to the price of risk still looks that little bit more choppy. So how much further do you think it's going to go? I'm running dry on houses making conviction views, either in bonds or stocks. I need to hear a number. We were talking about obviously three and a quarter as the point perhaps that the high should have been in June. You need to chart back maybe 5 to 15 years and you're back to that 6% sweet spot in terms of 5 to 6% in terms of what you get paid for investment grade. So that's already there in the short term If you're going to look at high yielding relation to that, then high yield should be ten to 12%, which takes us back to 2008 again. I want to also rotate around to some commentary around Europe and on the UK specifically what HSBC's chief economist, she weighed in on the subject. Just have a quick listen to what she said. For Europe, it's either already in recession or about to go into one. The UK already had a negative Q two, partly because of the bank holiday effect and negative Q three and even with this sizable fiscal stimulus. There is going to be an ongoing recession over the next couple of quarters. And the Bank of England knows that. I mean, this isn't so much about concerns that the UK is not going to be able to service its liability. This is more about whether inflation might get out of control. Where do you see the BOE Vis-à-vis the government and how is that going to play out? What's going to give? Well, 6% interest rates, I think mortgage rates rather in terms of what's being priced in for next year. It looks likely. We all know there were problems post Brexit supply chain disruptions added to that and general inflation that we're seeing around the world. But if you cast your mind back to 1985 when Margaret Thatcher was in the same position, obviously albeit in different circumstances during privatization. This kind of stimulus could work. The gamble and that's the only word to use that perhaps prime minister truss is taking is that maybe we've got peak inflation is argument to suggest food price inflation has already peaked in July August. We need to see where energy goes. And ultimately, you need to stimulate demand, be it through business, be it through tax breaks, be it through the consumer. What are we going to do about dollar strength and is this a moment where we could see a return to more coordination between central banks? I mean, there has to come a line in the sand where so much damage and financial dislocation is being done. The policy makers start getting on the phone. Let me start speaking to each other like they did with the Plaza courts. Yeah, so we saw the bank of Japan obviously have some tepid intervention. We'll call it around one ¥44. Central banks generally are going to wait and watch to see what happens in terms of what the Federal Reserve is doing. I think as long as the policy remains intact, I don't see any change in the dollar being any weaker until we get to a point that the markets priced in the top of fed hikes. Hello, always great to get your analysis. Thank you very much for sharing some of those perspective that's on the market sees the head of asset management. At first Abu Dhabi bank, we still have so much more coming your way on this program. This
Bloomberg Radio New York
"plaza court" Discussed on Bloomberg Radio New York
"And whether he's willing to risk energy security to go green. And former president Trump faces a long and growing list of legal challenges. I talked to constitutional scholar Larry tribe of Harvard to go over that long list and what may be the most troubling for the former president and retail sales have held up despite the fed's tightening. How long can that last? I'll ask Katie Thomas leader of the Kearney consumer institute, but first, this was a week that shook monetary policy around the world. The fed 75 basis point rate hike showed the Central Bank will continue aggressive moves to crush inflation even as it runs the risk of driving the economy into recession. We have got to get inflation behind us. I wish there were a painless way to do that. There isn't. For his view of the economy and the risk of recession, I talked to Glenn Hubbard, Columbia business school professor and dean emeritus, doctor Hubbard served as chair of the council of economic advisers under president George W. Bush. What the fed just did was a continuation of the remarks that chair Powell gave in Jackson hole about really getting the message of needing a firmware monetary policy. The shift in the projections from a few months ago to now is really chilling. It means the fed really does realize that a higher and higher for longer fed funds rate is needed. I think the probability of a recession is much, much higher for 2023. And I think the fed is now understood that in the markets of understood that. And so the pain is continued. So talk about the pain a little bit, Glenn, insofar as we can project, and it's difficult to do that. Where should we see it show up in the economy? Well, what we're seeing is where you might expect. So housing because it's a very interesting sensitive sector, a high mortgage rates are clearly working as they should. The stock market fall is reflecting higher discount rates and risk. And soon, we'll probably see pockets of risk in the bond market start to reappear as investors reevaluate credit risk, it will take a significant increase in unemployment to really bring inflation all the way down to two. In a sense, the fed has two challenges going from the very high level down to say four, like getting through supply disruptions, supply chain issues, and then getting all the way down to two. The question is how quickly to do that, doing that quickly would require substantial unemployment. And I'm not sure if history is any guide here, but I think if we look at history, it's not that easy to get down to 2% once you're over 5. It's not. You can do it. We have done it in the United States. It takes time, and so the question is how gradual the fed intends to be, the bond market seems to believe we will get back to 2% inflation in fairly short order, at least the fed's revised forecasts are admitting some pain in trying to do so. So let's talk about United Kingdom because we do have that budget. It caught a lot of people's attention to particularly bond traders. If you look at what happened to guilt, it's pretty extraordinary. Whatever you rise in rates was here. It's nothing compared to what we're seeing right now in the United Kingdom. What do you make about the economic policy here? Because we have some outside advisers to lose trust. The prime minister is saying, you know, cutting Texas actually doesn't contribute to inflation. Well, I wouldn't go that quickly on that point. I think that it's great to set an aspirational growth target, but the UK has a productivity problem. And in the near term, there is a need to cap energy costs, but it could be for lower income people. You don't really need such a large scale transfer. So I do think there's a big risk of inflation from the UK policy. And I think in more narrow policy and then a coupled with a more medium run agenda on productivity would have been one with the doctor ordered. So Glenn finally, give us a sense of how these things interact with one another. As we said, there's something like 700 basis points in increased interest rates from central banks around the world. So everybody seems to be tightening with the exception of Japan, mind you. But what does this do in terms of the global growth and the prospects for the global economy? How does it interrelated? Well, it's under related. I think two respects one, the raising of interest rates through much of the world will have reduced effect on growth. It's also showing up in markets for commodities for minerals for agricultural products, which affects many nations around the world. Second, there's an issue of the fed's policy error and then re correction that we're now seeing spilling over into the rest of the world. The rest of the world is caught up in a dynamic that may have had its origins elsewhere. Even here at home, we're likely to see interactions in a relationships with politics as inflation falls, but recession fears wound. And I don't think we can have this conversation, can't conclude it without talking about currency. And what is going on with the dollar, setting yet new records around the world we saw Japan actually start to try to intervene on behalf of the yen, doesn't seem to be working much. What do you make of the stronger dollar? Does that have to be contained? Well, the strong dollar is good on one side of the equation, of course, if you're buying something from overseas, but it really is hurting many American farms and sectors. The real issue is having a dollar reflect fundamental values in the United States and to make sure that monetary policy and fiscal policies are more coordinated around the world. We're just starting to have that conversation. Well, let's talk about the coordination just for one moment. This week marked the 37th anniversary of the Plaza court. Exactly. On the dollar. Any prospect of that kind of coordinated intervention with currencies? I doubt it, but I do think there's going to have to be a discussion at the G 20 level of what kinds of fiscal policies and monetary policies work in this environment. And I expect the U.S. to get some rebuke from some nations about the roller coaster we've
Bloomberg Radio New York
"plaza court" Discussed on Bloomberg Radio New York
"Know, we know that currency evaluations in particular can really overshoot and undershoot fundamentals. And I don't want to draw it direct analogy with the Plaza court of 1985, but we are potentially one of those situations where the momentum in favor of the dollar because there is no alternative because of the geopolitical risk becomes so strong that some form of intervention, some form of coordinated intervention, will help will have to take place. By the way, that happened also in 2099, 2000, 2001. When the dollar was at incredible strength. And we had this similar rotation, this dominance from U.S. assets into the following phase, which was non U.S. assets led. So I think some level of policy coordination will have to take place if we continue with this trend. Unless you have struggle with this and I'm not here to say whether it happens or not, just to say that I struggle with it because the treasury is fed this country right now needs a strong currency. And if Japan wants one, then they can do something about it themselves, can't they? Tomorrow. True, every country this is the paradox compared to ten years ago that now currency wars are actually in reverse where everybody needs a bit of a stronger currency to deal with the inflation problem. The challenge, yes, Japan typically has intervened. The challenge that it's a very frowned upon. There is this agreement, this gentleman's agreement that meaningful currency interventions have to be coordinated and I have to be discussed because we don't want to go back to that environment in 2010, 2013 where we were doing competitive devaluations in this case, we would be doing competitive appreciations of those currencies. I wonder for the catch up. We can't squeeze in Napoli. We'll have to do that another time. But I know you're excited and I was happy too. And let's say the longest there of invesco. So many policy decision involves a tradeoff. And Japan has decided right now that it's more important the BHA has at least to maintain a cap in its bond market in JGP. The consequence of that at the moment quite clearly is a much, much weaker currency. If they believe the tradeoff is not worth the squeeze, then tomorrow morning, they can do something about it. If they remove the cap and the boeotia, the BHA did that, so what do you think would happen to JGBs? What would happen to the Japanese yen almost immediately? Immediately. Now, if you're the you're the U.S. policy maker in the treasury right now and you hear Japan complaining about the currency being too weak, what are you going to do? Don't you just call them back and just say, well, we're doing what we're doing. And you can do something about it if you want to. We've done this for years. John, I think to set this up for people. There's nominal GDP what actually is earned, and then you take away the inflation component, and you have real GDP or inflation adjusted GDP. Each culture and society worries about one or three of those weightings vary and it's a collegial debate that's out there. Japan is fixated on constructing an inflation of avoiding deflation and they do that at the expense of nominal GDP, and the answer is a zombie economy. There's no other way. And at the expense of a wicked currency seemingly as well they suck. Well, that's the reason why the currency really hasn't responded to the verbal intervention. Maybe marginally on the edges, but people say, if you want to do something, you very well can. And this isn't going to work. We're not going to blink because he just say, we don't like it. In the last currency war, it was currency war in reverse, remember. It's different to what we've got right now. I remember the authorities in New Zealand talked about turning up to a war with a peace shooter. And I think we've got to face the fact that the bank of Japan has its own bazooka. It's just using it to do something different to everybody else. And the outcome is a weaker currency. Got an ECP rate decision about four minutes away. We'll break that down for you from New York. This is Bloomberg. Now with the latest news from New York City and around the world, here's John Tucker, Tom John and ELISA, the doctors for Queen Elizabeth's second state they're concerned
Bloomberg Radio New York
"plaza court" Discussed on Bloomberg Radio New York
"Radio. I think the rally has just gotten a little bit ahead of itself. Clearly, the global economy is going through a downshift There's not a really acute pocket of stress in a specific sector. We still have a large gap between jobs and workers, but at least we're moving in the right direction. They are inflation is going to come down, whether it will get as quickly as the fed would like to see back to their target or not. I think it will get there. This is Bloomberg surveillance with Tom Keene, Jonathan farrow, and Lisa Abramovich. Good morning, everyone, Jonathan Farrell, Lisa brehmer, it's in Tom keen, our world headquarters in New York on radio on television getting ready for a speech by the chairman of the Federal Reserve system and he does it within global slowdown in America going this way or that way. John which is it. The wrong way right now Tom and throw in Beijing, throw in Frankfurt, throw in London. Things are really difficult right now, some of the UK across Europe in the nature as well. And that's problematic for this Federal Reserve. And one thing we started with this week is where the chairman would navigate even attempt to talk about some of the weakness abroad. I think it's been underplayed and John visiting will be the governor of the Bank of England. Mister Bailey, what does mister Bailey want to hear from Jerome Powell? Well, he needs some help on the FX front, doesn't he? What he wants to hear and what he will hear are two very different things I think Tom. I think that right now the ECB and the Bank of England need a week of dollar and a stronger domestic currency and they can't buy one. And when I say they can't buy one, just look at how rate prices change for the ECB and look at what has happened with the currency. We have had the yield move at the front end of the German curve since the end of July by a lot. I think it's tripled, maybe more so than that time. And what's the Euro done? It's weaker. That's a big problem for the CCP as they look to hike. 50 basis points. What's interesting here, John is we could have a grizzly accord instead of a Plaza court as we had in the early 80s out of Jackson hole. We could have an accord to bring the dollar down. I don't really hear that happening, but the fact is John of all the markets moving in a quieter day today. I get that. Strong dollar is front and center. Here I told a 99 29 song. You and I have said it repeatedly this week. It takes some getting used to, but maybe we need to get used to it. Sterling one 1779, Lisa at Jackson hall. There will be debate about two Americas. There's no question about that. And John mentioned the business week article on utilities, people behind in America that can't pay their energy bills. One of the themes of this Jackson hole, the limitations of monetary policy and then running up against it in every which way. I mean, they might have had a broader mandate before inflation. But now they're trying to fight inflation that has a multifaceted cause, whether it's a supply chain disruptions, the increases in wages, some of the distortions from the pandemic. At the same time that you're seeing the recovery happen very differently. How do they speak about where they look to other policy to bridge gaps that they can not fill anymore with monetary policy? We make jokes about the toxic brew that's out there. John, we've really ignored the equity markets today. 41 38 SPX down near 33,000. Again, the vix 20 out to 24, some stress there, as well, the toxic brew of what chairman Paul says and what it'll mean for the stock market. Three days of losses in two today, Tom, let's whip through it. Just a little bit of positivity out there this morning. A great tiny game. Nice. Two tenths of 1% on the S&P on the NASDAQ up about two tenths of 1% as well. Dan a basis point and a ten year to 3.0387%, something you led with though some of the standard this program this morning, crude. Let's call it 95 on WTI. 94 86 at more than 1%. I left one O one on Brent crude as well and dollar yen is what's not moving. One 36, 63, it'll be fascinating to see what yen does over the next number of days. Right now, as we mentioned, the toxic brew that Lisa has spoken of over the recent weeks, someone's written that up. Joseph quinlan has had a chief investment officer, I should say, of market strategy at Merrill Bank of America and joins us this morning. Joe, you speak of a toxic trifecta that chairman Powell faces. What are the three items of your toxic trifecta? Well, Dan rarely have you seen China U.S. in Europe be in this toxic brew. And in U.S., it's course inflation. In China zero COVID policy that's really flatlined the economy. And then Europe wore in the energy crisis. So this is 70% of GDP roughly speaking the big three. And rarely are all three sinking or wobbling as we speak. And that's very rare global. So we're on the cost for we're in a global recession as we speak. I look at the global recession, we see that certainly with China, can we bring that over to America or do you need to wait for NBER to tell you there's a recession? I've got to wait for my colleagues at the bank to call it as well. Our colleagues top of the house are looking for shallow recession in the next couple of quarters. Technically we're already there. Housing market. So really, we're already kind of talking recession here. But here's an important point, Tom, in the sense that U.S. recessions, they're not uncommon, and when we come out of a recession, the U.S. economy is typically stronger. The week go by the wayside, the stronger gets stronger, we kind of reset. And that's very important for clients to realize is that recessions are not uncommon, but when we come out, the economy has firmer footing in a stronger. Joe weta hide, you say fang two. What is fang two? Paying 2000 is just a play on hard assets and hard politics, hard power. So as fuels, it's agriculture, it's aerospace and defense. It's nuclear renewables. It's gold metals, minerals, and it's really about the hard assets in this world we live in. And that's kind of like where we've been hiding out. It's been working well relatively speaking to the rest of the market. Do you think it'll continue to work well? Because we've heard a lot about people pulling back, particularly on the oil story as we see fear of recession continue to percolate around the world. Do you think that that's been overplayed and that there still is a story in these hard assets where you started to get a little bit more neutral? Well, Lisa, we did see the pull back in the commodity prices July, parts of August. But really, when you look around the world with the electrical vehicle
Bloomberg Radio New York
"plaza court" Discussed on Bloomberg Radio New York
"Why don't you, who is number two guy to Craig, we're called Bill McCoy. So you know it's on the board. There's so much of this specific story here that's important to talk about and discern. Let's talk about the bare case or the recession call of a 40% drawdown from the peak, which is about 20% further than where we are today in the S&P. What leads things lower if there are these positive stories of whether it's undervalued financial as you said, or whether it's undervalued or at least fairly valued energy companies. Well, I'm a classicist, you know, let's face it. We have recessions. We used to have recessions every four or 5 years. But because of very liberal policies, it's been stretched out. But if we have a recession, typically you have a bad market proceeding a recession. And, you know, we're in a bear market already, and the question is we're probing for the bottom. And I think given the excesses that we've had, having a bottom 35 or 40% below the peak would not be an unreasonable guess. Most of those that were not unreasonable. Let's face everybody's using the wrong profit estimate. I think someone in your program this morning said every one percentage point improvement in the dollar is about 8% off of earnings. Well, let's talk about that, Leon cooperman. You have seen dollar bouts. You know, I believe you were in the meetings of the Plaza court a few years ago. What is a strong dollar mean for our viewers and our listeners? Negative for corporate profits. You already got a profit warning at a Microsoft on the strong dollar. And in a recession, profits typically dropped 20%. I don't see any estimates that would have an earnings on the S&P 500. Leanne, help me with institutional money and what they do with whatever part of their portfolio was bonds and those by and losses we have guessed after guest after guest, rationalizing a bond bear market do this do this, do this to this fine. But the fact is, on an actuarial assumption, even if you have a formal one or you don't, Boyer, you underwater off that Bond bear market. What do you do? Shift the stocks? Well, I would say it's a combination of cash and stocks. That would be my answer. You know, I'm a different position now. I'm approaching 80 years of age. I don't have any clients. I run my own money. I can take a longer term horizon. And I recognize that in the bear market, he loses wins. He will lose his least wins. Leon at your August day, just 79 and holding. Should President Biden serve a second term, give us the cooperman energy level is the nation considers a second term for the president. I think he definitely should not run. I don't think he will run. I am told by people that he's not happy in Washington, he's paying more time with his grandkids in Delaware, you know, he has not done a good job. I voted for him because I voted my values and not my pocketbook. And I found Trump who has superior economic ideas to Biden, his conduct was just totally unacceptable. And but I think the Democrats are going to get crushed in December, the progressives have led them too far to the left. The country is centrist in nature and we got to start working together. We got to start cooperating. Leon. Let me if I make this point. It's not about politics, but I sense to smile my face, blame a good man by the name of Barack Obama for a lot of these problems. I don't think that Bush won a bush to Ronald Reagan, Bill Clinton, villainize wealth. He villainized wealth. And I sent him a letter 12 years ago that went viral on the Internet. I remember that. Okay, and I said to him, mister president, you're telling the 99% of being screwed by the 1%. You should be telling the 99% with hard work and luck. They could become part of the 1%. You depreciate the American Dream. Now, unfortunately, President Biden has picked up on that theme. I see no reason to villainize wealth. How do you get to be wealthy and develop a final service tomorrow needs? And Leon, we would note saint barnum is hospital in a small state of New Jersey as well, Leon cooperman with omega, thank you so much for joining us today. Greatly appreciate that as well. Lisa, what an odd day I'll be honest, Lisa, when I walked in the door here this morning at 5 42, I did not expect this kind of Monday. Tumultuous day in the FX channel. How much is that the channel that breaks? And I go back to what Michael Saul said, today was fascinating to me. Some of the calls that we were hearing, and yes, there was a lot of gloom, but there was a lot of discussion about whether something will break what the fed response will be to that and a regime shift. That to me was the narrative of the day, sort of to that biblical Leon cooperman call for 7 lean years following the 7 fat ones. I'm going to go back to one of the essays of the weekend Barry Ike agreed writing for project syndicate in The Guardian and, you know, he walked through the four bouts of Sterling weakness going back, I believe, Lisa, to the depression, and we've seen that in the last ten minutes, one 1918 on Sterling driving DXY, right up against one O 8, as well. And to me, that's a summary is, while you were gone for two weeks, Lisa, John and I were focused on those emerging markets, which is Europe in the United Kingdom. Yeah, well, that's the shocking part of this and how much is that going to be the epicenter of the weakness that drags things down. These are not regions that can save their currencies and strengthen them through policy actions what gives and what is the potential contagion falling in. Lisa, we have had a firestorm of interest by global Wall Street and particularly the young lads of the northeastern corridor over your sojourn up to the adirondacks. One emails and it says, but can she light it Coleman lantern? Oh yeah. Can you do the Coleman lanterns? Yeah, that whoo, that's good. Should I do that okay? Yeah, and it kind of has a new sound when you put the my father. My father would ever stay 50 feet away. Well, it'll be interesting. Today we're definitely going to be watching the dollar, though, not
Bloomberg Radio New York
"plaza court" Discussed on Bloomberg Radio New York
"This morning. I do like frosted flakes. My number one favorite is a little bit, esoteric, is the right word. So Tarek cereal? I love fruity pebbles so much. Really? Thank you as a fruity couple. Truly delicious. Truly good. I've been eating them for 40 some years. And look how well you've turned out. Good for you. All right, we got some green on the screen. Pretty, what's your favorite cereal? My favorite cereal. Yeah. You know, there used to be the cereal. I don't eat cereal anymore. So I guess I just didn't like any of them. So I gave them what? But there used to be this popular Oreo cereal back in my youth, and then it completely got discontinued. Yes, I was horrible. And it was amazing. All right. I was also like 8, so different story. But then I never found a replacement, so I don't have a favorite. Pretty gooped up Bloomberg markets correspondent aside from the serial talk. What are you looking at in these markets? Are we getting a little bit of a bounce back today? Yeah, a massive bounce back, which makes you wonder what's at play here. It doesn't look like there's really any headline move that or headline headlines that would drive the move here. The S&P 500 up almost 3%, which is kind of wild here and a lot of this comes really just in the last 30 minutes of trading. So some of this is going to be a furious bounce back. Remember, we ended last week, the tenth week in the last 30 minutes. Oh, the last 30 minutes of each day. No, no, the last 30 minutes of today. The market's only been open for 30 minutes. Exactly. Okay. This is not a features thing. This is a regular trading thing with my point. But anyways, the S&P 500, it is roaring back the question is, this isn't necessarily sustainable rally. When you see 3% gain on the NASDAQ, for example, one, it tells you tech is driving this trade, but it also tells you a lot of this is a reaction from just the weeks on end. And a lot of people are saying that, I mean, I think the stat goes something like in the last 11 weeks, ten of them have been down weeks. So we are due for some kind of bounce back. Calls across Wall Street for a bear market rally. That being said, I think the real conversation this morning is necessarily what's going on in the equity markets. It's what's going on in the FX markets. And it's really where you see I've never heard that from you before. I tend to bang that drum a lot. Anyways, Bloomberg dollar index, it is weak or slightly, but it's a dollar end story that's freaking a lot of people out Matt, you were the one. I agree with you that it's a huge story. Huge story, over one 36, so we've now broken through the last high or low depending on which side of the currency trade you're looking at in 1998, right? And this all comes down to Corona's insistence to stick to his yield curve control and low rate policy and yeah. It's insane. And remember, the last time we were here in 1998, currency intervention was the name of the game. It was a coordinated effort by all the G ten currencies to kind of get things back and swing this time around. You're at the same levels. You're looking at a way bigger FX market and there isn't much really you can do because even if you try currency intervention like a coordinated effort, a lot of it is kind of a shot in the dark, essentially. So a big question here is what's actually going to break here and actually as you look at that acceleration, if you look at the futures move in tandem, features were actually fading as that pair went higher and higher and got to that record high of one 36. So or one 36 handle. So it really tells you that the equity market is very sensitive. Or at least on a tick by tick basis to what's going on in the FX market as well. And of course the old's moving as well, but this is really becoming a dollar story. The only thing that works is if all major trading partners come together and make an agreement like the Plaza accord. Right. It did Tom mentioned the Plaza court to not really define what the Plaza court. The Plaza accord was an agreement reached in, I think, 1985 among the G 5. That's right in Tom's Wheelhouse. Yeah, France, Germany, the U.S., UK, Japan, they all got together and said, we're going to manipulate these exchange rates because of the big changes that we saw in dollar yen and dollar mark at the time. It was a West German mark. So, and it worked, you know, because everybody was in on it, but pretty is a 100% right. If you're just one country trying to fight the market, the market will. And now you're in this new era where that was a moment where kind of being that weaker currency was the positive. Think about exports, right? They're coming out of South Korea. They're coming out of Japan they're coming out of China having that weaker currency, especially in this era of supply chain issues is a real positive from the export picture, but there's actually this argument here that you want a stronger currency. You want more purchasing power because for a lot of these countries that are, by the way, massive commodity consumers, you want more currency strength so that you can essentially get more bang for your buck for lack of a better term, especially when a lot of these commodity contracts are priced in dollars. If you want food if you want oil, if you want metals, to keep your economy going, you want to make sure you can get as much as you can. Yeah, absolutely. And cinching. One 36 spot two 7 on yet. All right, let's just real quickly on the housing data. Has it rolled? I'm looking to hear the existing home sales -3.4% in this, which is in this month or in May versus 8 2.6%, so it feels like a little bit of acceleration or weakness accelerating weakness maybe in the home business. I don't know mortgage rates. Pushing north to 6%. I spoke with a number of people, this is just anecdotal over the weekend who haven't been able to sell their homes and decided to rent instead because all of a sudden the high mortgage rate is locked out buyers. And then John authors this morning wrote a column saying the real estate crisis is the risk to watch right now. Not necessarily housing because it looks like, you know, in terms of housing, there's not a lot of leverage, but he does say office property you should watch closely because rates are the lifeblood credit is the lifeblood of that real estate market and it's kind of a double whammy because you've got higher rates and the lasting effects of the pandemic. So many kids working from home, right? So let's connect that to the equity market because you actually look at some of the earnings stories morning lenar was one of them. Ellie and is your ticker. Shares are up at the moment and they beat earnings. They'd be earnings in a really big way. Their purchase contracts rose 4% from a year earlier. If you look at the dollar value, we're talking about the dollar strength, increased 20%. So it really speaks to the strength of the greenback of the CEO. He really said exactly what matches that. The weight of a rapid doubling of interest rates over 6 months together with accelerated price appreciation began to drive buyers in many markets to pause and reconsider. To be fair, I was just quoting John authors. Okay. I don't have original thoughts. No. John, we got plenty of money. We're journalists. We're critical group. Thank you so much. Right now, let's head down to Washington, D.C.
Bloomberg Radio New York
"plaza court" Discussed on Bloomberg Radio New York
"Of Nomura there with a good conversation We are having wonderful discussions here and no surprise in London on foreign exchange Lisa Brahman Tom king yes John farrow scheduled to return here in a number of days He was delayed in Capri something about jet fuel And we look forward to seeing him I believe we all get together again Tuesday in New York The hallmark of what we invented at Bloomberg surveillance is difference of opinion and now you're going to be hit over the head with a difference of opinion George cerebellum has to do tag team with folks Landau hooper ruskin and the rest of them at Deutsche Bank He is aged He joins us this morning his global FX research had George you say this is the mother of all safe haven moves to U.S. dollar We're looking at Euro We're looking at yen dotted out and you say focus on the flow to dollars That's right Tom If you look at the last 6 months you can see it in the data You've seen a huge accumulation of dollar cash by all investors So the investors have been selling U.S. faculties They've been selling U.S. bonds but they've just been keeping the dollar cash and not only that accumulating even more But when you look at the size of that accumulation it's reached historically very high levels similar to COVID similar to the top trade war So obviously we published our outlook for the next few months The simple point is the dollar is pricing so much bad news and the market is so overweight the dollar that the risk is any sort of margin for the news and the speed historically extreme risk premium start unwinding With respect to your boss David Fokker's Landau who's worried about fiscal largess and maybe dollar strength getting out of hand there's others picking up on this and they're looking for some redux of the Plaza accord George you go the other way and you say we're not going to see a redux of Plaza court need to weaken dollar It's going to happen Maybe we need a motel 6 a court out at Newark airport in New Jersey Why are we not going to need a Plaza accord So I think some of the simple answer is that you should be the ECB will do the job And as we've seen over the last few weeks the ECB starting to wake up to the reality that rates need to be raised very quickly We're only an inflation prints away and let's see what happens next week but I think we're only inflation print away from a 50 basis point rate hike from the ECB in the July meeting And the market has been so focused on the fat story It's missed the European story And the European story has a mix of very high inflation but also outperforming growth And it's surprising how pessimistic the market has consistently been on European growth But if you look at data surprises they're actually moving in favor of Europe consensus GDP forecast for this year are in fact higher for Europe than they are in the U.S. And the reason is fiscal policy Europe has a very supportive fiscal policy mix It's been easing policy to offset the energy cost It's going to have more defense spending It has the European fund And essentially I think the stage is being set for a European CAPEX boom So I want to be optimistic as far as the European story goes And I think potentially we have significantly more repricing to have for the ECB And when you say significantly more repricing Georgia even looking out to one ten and possibly one 20 I believe going forward versus the dollar How much would you have to see a weakening to change your view So I think if you take a step back and you look at the Euro up until 2014 and this is even during the Eurozone crisis it was in a one 21 40 range And then one thing happened the ECB went negative during driving ten year 2014 2015 And that range shifted from one 20 to one 40 down to essentially parity 103 one 20 And what I most focused on is as the entire European rate structure shifted back to that old regime that should be a significant structural source of support for the Europe potentially unwinding some of these big capital outputs we've seen And the market is very focused on the deterioration in the European trade balance but for example the U.S. balance is deteriorating even faster And I think the more interesting story going forward is the effect of positive rates in Europe and what do they agree to the capital account George there's also this weird aspect of the dollar which is the commodities are priced in it right So as the dollar weakens as you predict that's going to mean even higher costs of fuel which has been one of the drivers of inflation in the Euro region How much is that factoring into your expectation So it's interesting because you finally start to see ECB discussions evolve and mention the Euro significantly more the perfect example of that is the French Central Bank governor a few weeks ago you highlighted the Euro in the middle of the speech then when the Euro was going further lower he raised the same sentence and brought it to the top of his speech A higher Euro the correlation has flipped between the urine commodity prices So we've been seeing stronger commodities but a week in Europe here at the same time If the Euro reverses course starts appreciating And I think the ECB is very aware of that It actually reduces some of the imports of inflation pressure And the ECB I think is now very focused on the fact that it risks being behind the curve in a similar situation to where the fed was just a few months ago George servants thank you so much for all your work for us Greatly greatly appreciate to you and all the team including Matt was that he would out there recession call for Deutsche Bank as well Lisa I want to go back to Davos as George alluded to but I think you've had huge leadership on this And that is lockdown China boring let's move on and you and others have said no it's going to end then what And to me besides the ECB meeting next week will it be good to get pharaoh back So we actually know what we're talking about We're looking forward to having pharaoh get set Us No Yeah But China is a big deal Especially as we start to get more insight into what some of these lockdowns actually mean with respect to supply chains Look at that There was a story Okay so they're going to end what happens then because then you have a population that's not fully immunized But how do you get there And what kind of social unrest do you get on the way And I say this as there was an article today about the apple factory the manufacturers and how there are actually a huge incidences of unrest in some of these places because people have been quarantined from their families they're a bit locked out There's been so much that's been really problematic It's TV folks You make jokes about this but guess what You're right This is not funny It's not funny I'm suggesting they don't have a choice They have to fix this These are immovable forces for a totalitarian regime And perhaps this is why premier lika Chang was talking about how this is going to affect the economy in such a big way There is some speculation that maybe this is the predecessor to a softening in the stance Now we will see I mean there's a lot out there Bloomberg with an important article today on the domestic view from Beijing really must be I'll try to get that out on Twitter green on the screen again futures up 9 We quote the Dow futures only when pharaohs that year up 16 evicted 27.18 Sterling it's a full English Sterling one.
Talk 1260 KTRC
"plaza court" Discussed on Talk 1260 KTRC
"Minutes after three o'clock and a Thursday afternoon here in the state capital of New Mexico. We're having a conversation today with the chairman of the Republican Party of New Mexico and a former congressman used to work in the Capitally Nice states in in Washington, D. C. Steve Pearce. Do you agree with some of the Republicans in Washington, D. C. Where as you said, you served for 14 years in Congress, people in Congress who now say they are fed up that the President Donald Trump went way too far in his speech. Before the the attack on the United States Capitol that that was it. That was the that's crossing the line. Are you amongst the people said That was that was a bridge too far. You still saying Well, You know he didn't go too far that what he said was appropriate, which he said everything I said was appropriate. Do you believe that? I read the speech last night. Anticipating that, you know, I might have this discussion and and I really don't find the piece where he's inciting people. He says repeatedly that we're gonna walk down this block and I'm going to be with you. We're gonna walk. We're gonna walk peacefully. I'm gonna be with you. But no. And he says we're gonna cheer him on. And to me. That's like, uh, you know, you get in the fourth quarter of a football game jobs. We do basketball and And you get the team is flagging and dropping down without losing the country. If you don't stand up and be strong, if you're weak, you're gonna lose the country. You don't think that was that? I don't. I have used very similar language. I would tell people on a running for office. Look, we've got people who disagree with the very idea of religious freedom. They disagree with the idea of the second Amendment. They disagree. We're going to lose these rights if we don't stand up and fight if we gotta get out of the In the public sphere. We gotta talk. We got a debate. We gotta vote. And so I don't myself. I didn't see where he says we're going to go down Storm the captain and we're gonna break in and we're going to show those people who have made up though. That's what happened. Directly afterwards. Yeah, that's again. You have 52 people. It looks like we're involved out of 200,015 years Chairman. You've been watching the same tape loop that I've seen. That's how many people have been arrested. Surely they're not turning around and maybe thousands inside the Capitol. All I know is 52. People have been arrested, and so I don't know, And I have not gotten any inside information about what's going on. So I'm simply speculating, but it was not the 200. It was not the 2000 people and definitely it was Certainly not as large, a group that say, went in and took over Seattle, the police station and that whole block there wasn't equivalent to the group that is destroying Portland from inside out. S o. So you have these things going on, uh, on both sides, and in both sides, they should not be tolerated. Are you concerned that there is an element inside this country and I think a lot of people have seen this is and rightfully incredibly scared, Frightened, terrorized, in fact, for fear that something like this is going to continue that it could escalate between now the inauguration. That appears on both sides are the and so it's. It's pretty scary and politics When you get frustration, which both sides out frustration, you get anger, which both sides of anger and you get fear. Those three elements are very, very destabilizing, and they're all going on on both sides and at some point The questions have to start being answered, because I I can't speak for the anwer thoughts from from your perspective. I really can't I could speak from the Inner thoughts. Of the people on my side of the R, and there's a frustration that they don't see the same sorts of responses toward one group in the other and other words. The people who have talked to who are in D. C for this, they said. This was just a good Solid group of Patriots they love the country has all peaceful But right next to them or the people who have barricaded off all around the White House, or at least that whole block in front of the White House. They pieces in the street whatever. And and all of the news media and and the mayor was saying, these these uncivilized Doug's or in our town and they're going to do this. Meanwhile, they're ignoring what's going on over here. Right beside them, And I think that that frustration is present on our side, and I suspect it's president. Only pretty Yeah, for anybody anybody to come out and say, Mr Chairman anybody to come out and say that that Antifa was in the White House is, the president said as other people in his administration said other people across the country have said Is complete fiction. You have to believe. I don't know out there. You know, the FBI, The FBI. Everybody else who's looked at it looked at the tape said his complete fiction. I mean, how can we operate? How can we look ahead as a country? How can you look ahead as Republican Party and say We don't believe in any of the institutions anymore? We have total distrust of the FBI. Or or anybody else, the Justice Department You have to believe the fact that just Yeah, We have to believe that I thought about that. Go ahead. Can we stop and talk about that? Just a moment. So you had the FBI. And government agencies. The Justice Department who signed on to the top C A, which was used that was printed up and now very clearly by Hillary Clinton's campaign. Are Law enforcement officials knew that it was fiction. They knew that it was a political document, and they they used it to go to the FISA courts. Now, maybe you weren't so involved in the whole five the question, But every year we had to reauthorize the Patriot Act, right. Where are we going Back to that hell dossier here. Yes. And so you're asking. How can we not believe the FBI? The FBI carried that document into the pie. The court the by the court that people on my side and people on your side Worry about is going to be used to spy to use the government agencies to spy on U. S citizens, And they used that to go into the Plaza Court to spy on Trump. And they used all of it to to press them Peach month that ultimately, the mule report said. No, these things didn't happen. And yet the FBI was doing it you go. If you carry the question of whether or not to trust the FBI back to Ted president, the senator from Now to Ted Stevens from Alaska. It was Comey and his group and maybe Mueller was involved. But they set up in fabricated evidence against Against Ted Stevens and that Alaska election 2000 and eight when Obama was running the first time. They fabricated evidence. He lost the election by 1000 votes. And later it came out that it was totally fictitious, created by the the FBI. And so when you ask your question, don't you believe the FBI? There are reasons That the FBI has tarnished its its trust system. If you take the FBI, if you go all the way back, Mr Chairman, we're talking with Chairman Steve Pierce, the Republican Party of New Mexico Go all the way back to that and then say for the last four years Theo FBI the Justice Department has been under Let's just say, Bill Bar, You know, we don't have to go all the way back. To the very beginning of the first attorney general under Bill Bar on you're saying we cannot trust Bill Bar. We cannot trust the attorney general of the United States. We cannot trust. The Justice Department tells what happened on January, the sixth in the United States Capitol. How can we function How can you? How can you actually say that the Republican Party of New Mexico is a legitimate party if he don't believe the institutions That run this country..
Commonwealth Journal and Myth Busters - Dana Farber
China pushes back against US tariff hike
"China is pushing back against president trump's decision to put a twenty five percent tariff on about fifty billion dollars worth of chinese goods china says it is responding on a quote equal scale with president trump's tariff hike egg irwin is an analyst at china policy consultancy he says china is more than ready to tackle whatever comes their way from the us thunder calculations it'd been preparing for years they've looked through different scenarios especially they've gone through the history of japan and the plaza court back in the nineteen eighties and they have tried to cover the loopholes like their overseas investments the us and china currently have the world's biggest trading relationship however official ties are increasingly strained these days especially over complaints beijing's industry.