tv Bloomberg Surveillance Bloomberg September 15, 2020 8:00am-9:00am EDT
classics value we know -- >> the longer term is not looking good right now in terms of support for consumption. >> a lot of the stuff that is priced cheaply right now is a structurally impaired sector that was probably impaired before the crisis it looks even worse now. >> dollar is weakening. rest of the world is recovering faster. >> that dynamite is inflation. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. radio.st on bloomberg good morning across the smoky
nation. just coming in, images of the sunset you and i observed last night. imagineom, you cannot the change across this america. forget about economics, finance, and investment. it looks like man delorean out there, lisa. lisa: really depressing to watch that orange sky over in the west and seeing the smoke come toward us. it is a political smoke, as well. everything becomes that much more political in this year of 2020 as we head toward november. tom: jon, you nailed it on the united kingdom earlier in the fictitious nature of our unemployment rate and the fed meeting tomorrow. i am going to summarize the backdrop, double digit unemployment. jonathan: unemployment and the u.k. just north of 4% officially. it means nothing to anybody me -- living in the u.k. right now. there is a furlough program tying a lot of people to the government, and that expires at the end of next month. a huge conversation on whether it.xtend
if it does not get extended, unemployment will go much higher very quickly. tom: erik wasson of bloomberg news out with that moderate stimulus of $1.5 trillion, unlikely it will move forward. nevertheless, there it is. many other stories, as well. jon, i want to get to this quickly so we can get to our good guest jeffrey yu -- geoffrey yu. turley -- sterling breaking down. euro breaking out. the politics at the moment, ripping foreign-exchange, particularly the u.s. dollar. that is new. that is the story for me. tom: renminbi stronger this morning, as well. turkish euro was that 7.49, an idiosyncratic item. he is one of our most popular guests, geoffrey yu, like many, synthesizes across all markets. what i love about him is the
acuity, the precision of how he looks at the here and now. jonathan: i love geoffrey yu, and he is with us now. let's just touch on foreign-exchange briefly with you. the degree to which politics is shaping some of the forecast right now, how do you interpret some of those things? action, twoprice weeks about politics, and investors are looking to see if there will be a deal and if it will be stable, the transition period, and if the answer is yes, there could be a more favorable sterling forecast. same for the u.s. are we going to head into november in a volatile fashion are less volatile fashion? the options market are gearing up for a lot more volatility up ahead. jonathan: strategist right now, how difficult is it to make any kind of forecast, any kind of read on and fx market? it is hard enough to read the
economics. how do you read the politics? >> it is becoming binary. we mentioned the eu, u.k., and the u.s., and people look at the u.s. election binary sum. we need to find a nuance in terms of what terms the u.k. will get -- also for the u.s., as well, what policies medium and longer-term? you afford to have a strong currency given china's relations with the west. stress do not forget the fundamentals on the economic side and the sterling. is: on a global basis, that where i wanted to go, the idea thehere global gdp is or partitions of it, where they are. are you believing in more of a global slowdown or can it actually pick up in aggregate as
we see in china today? >> i am looking at the china investment numbers, and i am thinking, here we go again. are we going down the route of real estate again? that has massive implications for the chilean peso and others, and it is because of how the chinese real estate cycle can pick things up. so yes, we can start to see a strong divergence. aging does not want a real estate cycle. they have been very clear on that -- beijing does not want a real estate cycle. at the bets geoff, that have to be made right now. how do you play dollar then, given the huge ambiguity into the end of the year? >> i think you will have three segments. dollar against the rest of the g10. ambiguity, given how the current positioning in the dollar in the u.s. markets, u.s. tech, how strong that is. international investors may think, i don't need to put more in there.
maybe the balance will flow towards europe. then you have china and asia, which seems to be managing covid better. they could start to outperform. then you have idiosyncratic names like the turkish lira. keep some dollar long and keep volatility hedges purely by have read so many notes recently that have said -- lisa: i have read so many notes recently saying that fx trading is the new bond trading. againste place to hedge his geopolitical cross we are talking about. going back to the point from earlier, bonds will not provide a hedge against equities declining in the near future. really now, it is the dollar. do you agree? >> the dollar is being used as the risk proxy. i agree partially. if you want to find a risk event, going back to the turkish lira, if you are not worried about the em balance of payments and the likes of turkey, brazil, or maybe other areas, then he
want to belong dollar. that is very clear. but if you are worried about u.s.-driven idiosyncratic risks and the strong positioning, especially in the u.s. equities, then you may want to be short or underweight dollar as the hedge. if you want to focus on the u.s. election results, then the dollar is now the counter hedge. you want if you were the other way. you want to look at the equity flows next year. lisa: so this is the confusion for me, geoff if the dollar is considered a hedge against a risk off deal and market, are you saying that election turmoil or some sort of instruction to the u.s. economy would be considered a risk on type of event for the rest of the world? can you get that polarity where you have a disruption in the world's biggest economy and people flee the haven currency? >> i think you will get that. it will be very, very u.s.-specific. and if you have an alternative. you have two alternatives right now.
the euro, they have gotten their act together with the investment plan. half a trillion euros to flow over the next two years or so. and with the renminbi, it is showing up. what happened in march, people went back into the dollar because there was no alternative. everyone was in the same boat managing covid. but now you have an alternative. that is where the dollar will be vulnerable. jonathan. -- jonathan: what i hear from you is the risk is skewed towards more inflows into international equity. has the mostro benefit from that. if i look at europe right now, i see more of a european equity story rather than a euro story. you have a plan right now to fill that investment gap which is emerging in europe. same in china. u.s., you have more
political risk, the investment gap may not -- it will take more time. in that order, i think that is why europe and china can stand to benefit over the next few months or so. jonathan: but what you are describing in the fx channel does not sound like a story the ecb can fight. can they? >> i do not think so. target,not have an fx so i think they're making the calculation that this demand gap being filled over the next two years will be strong enough to offset any disinflationary impact from a stronger euro. moving the euro forecast up to 1.18 has zero impact on their inflation. if they can maintain that, they would be happy for the euro to stay. they're not worried about the demand side.
, really enjoyf catching up with you. geoffrey yu there, and you look well. good to see. i remember at the british museum, full audience in the auditorium with geoff yu on a foreign-exchange panel, and he is just knocking it out of the park. fantastic to hear him talking about foreign exchange. tom: fantastic. it takes us back to mike rosenberg of bloomberg, who has done so much for us. synthesizing it all in together, and that is especially difficult to do right now with the physical impulse that we have seen. i do not care what the country thewhat the nation is, what pair is, synthesizing right now, which is what a guy like yu does every day, it is really difficult to do. jonathan: incredibly complex. but the consensus in terms of the risk factors on verizon, overwhelmingly the consensus is the united states is a big risk faster -- factor the moment.
there is brexit and the u.k. and across europe, but it seems to be the u.s. people identify. tom: absolutely. and you look at the dominance of equities, it is the call. there is a real effort here to get back to international in some flavor. jonathan: politics, politics, politics, lisa. we heard it from j.p. morgan the past 24 hours, held hostage, u.s. politics. many people agree. lisa: although, i will say the one area that seems a little divorced from politics today the chinese yuan. it is the strongest versus the dollar, the offshore, since 2019. i think this is an interesting story as you continue to see the data recover in that country. jonathan: let me tell you something, let me tell you andthing, foreign-exchange that chinese currency -- lisa: i did not say it.
i did not say it. tom: we have that banner. going to be repeated repeatedly. coming up on this program, colin witmer, looking forward to that conversation come up shortly right here on "bloomberg surveillance." ritika: on capitol hill, a long oft to break the deadlock another coronavirus relief bill. a 50-member group of house democrats and republicans will unveil a $1.5 trillion stimulus package today that offers compromises on the two thorniest issues, aid to state and local government supple metal on insurance. hurricane sally group slowed slightly overnight in the gulf of mexico, now downgraded to a category one hurricane with winds of 85 miles an hour. sally will make landfall tonight or early tomorrow.
exactly where it is is difficult to say. hurricane warnings extend from newer lens to the florida panhandle. there are fears the hurricane will bring a deadly storm surge and flooding. the economic recovery and china sped up last month. retail sales rose .5% from a year earlier. that is the first increase in the -- since coronavirus hit earlier in the year. meanwhile, china's industrial production rose for the first time in 2020. in the u.k., prime minister boris johnson's lawbreaking brexit bill has cleared its first hurdle in the house of commons. he plans to renege on parts of the divorce deal, a move that has been denounced by members of his own conservative party. they have warned it could damage the u.k.'s reputation. global news 24 hours a day, on-air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm ritika gupta. this is bloomberg. ♪
used to want to sell expensive chips that would create high-paying jobs. and so i think you have to really decide, where is there still mutual benefit? jonathan: the relationship between the u.s. and china, fascinating conversation. find it on bloomberg.com and the bloomberg terminal. an hour and 12 minutes away from the opening bell. session highs on the s&p 500, up 26. we advance .75%. against dollar weaker absolutely everything. euro-dollar up point 15%. starley and -- sterling advancing .5%. the aussie dollar up .6% pure gives raphael of risk on. one market yield a little bit high. the fed decision coming up tomorrow. tom: very good. the vix and with a 25 handle. a 24 print would be something. we do have a lower fix with the elevated futures, 25.30 3% on
the vix right now. there is an m&a frenzy. we heard robert profusek from jones day moments ago, and we can talk to everyone across the bloomberg intelligence landscape, as well. --in witmer is in charge of you have got to do something about it, a transactions and deals leader. thank you so much for joining us. define the new synergy. i want you to define the ballet were two come together and there is a certitude about the cost reductions we're going to see. are they the same as five years ago or is there a new synergy? >> just thinking about what you're talking about there, tom, think of it this way, dealmakers got to get deals done, right? and we have an unusual environment where equities have performed really well ring a period of trauma this uncertainty. buyers and sellers have to bridge the gap. markets for multiple
guidance on deals. but there is a disconnect out there between buyers and sellers that needs to be bridged. what we're seeing is a trend with purchase price and earn outs to help bridge that gap between buyers and sellers to get over that divide of uncertainty. tom: but we are seeing a very large number of billion-dollar transactions, verizon recently, up to the mega deals, as well. how will those deals come together, and argue, with the expertise of pwc, certain they can get synergistic benefit? >> it will be more challenging, certainly, in this virtual world and environment. we did an m&a survey recently, and synergy is something dealmakers are thinking about with talent and culture, and when you're putting two large companies together, like you just described, and now with the trend of virtual working, how is one company that is going to
allow work at home culture and under company with a work in the office culture, how is that when they come together? how are you going to retain that talent? lot of dealmakers have that front and center in mind, how to keep all the talent we have. employees tend to also be motivated by different things now, and the ability to work at home flexibility, so all of that has not necessarily been front and center for dealmakers' minds, but it is now. lisa: with antitrust concerns, do you feel those have diminished in this era of covid as regulators just want to see some of these companies survive, let alone be concerned about the he mets getting that much bigger? behemoths getting that much bigger? >> it is an interesting question. they had been coming down a while before the pandemic. the wave of nationalism started before that. and cross-border investment approvals were being revised.
cross-border deals i think will still be down. i think when i do see them get done, it is for a couple reasons. one, they want to diversify their revenue base. second and more important, their supply chains. they say, do we want to be operating in, say, china, or do i want to disperse my supply chain and get closer to my customer or being a more regulatory from the environment? so i think you will see some cross-border deals get done to reshape the supply chain, to get in line with new sector normals with covid. lisa: another way of looking at this is, are you seeing more smaller tech companies combining forces to survive against the microsoftsples, and of the world? >> you will see smaller absorption deals for people to stay current and at pace with the market. i think that is right. tom: we are in a pandemic. the gloom crew like lisa would say we are sort of on the edge
of an early depression and all that. lisa: really? tom: really. but we have this m&a frenzy going on. from where you sit, is it a frenzy? >> i would say that there is so much capital out there, a significant amount of capital that needs to be put to work. when you think of it that way, it is no surprise that there is money out there chasing deals. the other thing i would say is people using the pandemic to accelerate their digital transformation. so if one good thing comes out of this, it has pulled forward the digital agenda for companies to transform, and they need to transform to their new sector normal. so the way they did business in the past may not be the most efficient way or even a relevant way to do business in the future. and the quickest way to right that ship is m&a, and with the amount of capital, we believe they will be able to recover faster than the overall economy. lisa: quickly, to touch on the weakest m&a story probably of the week, that would be oracle
not buying tiktok's u.s. operations but managing the data in its cloud. how should we view this particular deal? comment on, i cannot that deal specifically. but as i think about transactions of that type, not everything will have to be a straight out acquisition, right? i think we might see more partnerships and strategic alliances to help bridge them, describing, how to deal with data concerns, and it does not necessarily manifest in a transaction but some other form of partnership in order to secure the data. jonathan: great to catch up. deals leader. pwc just feels china-esque to see some of these partnership deals being announced in america. the prospect of oracle doing what it is proposing to do for tiktok, it is the kind of thing you would expect to see from
china. partner, full access. tom: yes. i read like seven articles about this in the last one he for hours, and what i find incredibly important is the argument of, what, three days ago, about the algorithm? it has just disappeared from the dialogue. i do not have an opinion on it, but it is nothing more than three and four and five parties trying to manage, not a train wreck but manager process forward. jonathan: did you read the abramowitz column on zero hedge last night on this issue, tom? tom: no. lisa: i missed that one what did it say? jonathan: i imagine you would do well over there, lisa. i like zero hedge. -- lisa: you are are trying to pawn me on live television. jonathan: i am wanting you up. and i love zero hedge. coming up, ubs global chief
jonathan: from new york city and london for our audience worldwide, one hour away from the opening bell, your price action shaping up as follows. equities advancing into the two day for beating concluding tomorrow with a news conference with chairman powell. in the bond market, your yield on the 10 year up a single basis point. up a couple on the 30 year. euro strength, dollar weakness. 1.19,ollar just south of up .2%. of 3400 on the s&p 500. futures up 26. tom: a little bit of a pop. the empire manufacturing comes in and it is a much better statistic. i will call it a secondary statistic out of buffalo, new york, the new york state empire manufacturing statistic.
6.9 was the survey, it comes in at 17. that is not a bad statistic. jonathan: pretty good upside surprise. have any upside surprises have voice in this economy over the last several months improving. getting a read on this economy is still very difficult. tom: let's try to do that now. paula donovan joins us with ubs -- paul donovan joins us with ubs. the upside surprise has been china. i want to go back to the ubs heritage from years ago and the ubs expertise. i do not want to know about hong kong or shanghai or beijing. what does ubs see and the rest of china we never speak of? paul: the chinese economy we saw this morning, production is kicking back in. china is an interesting comparison to what we are seeing in the u.s. and europe. the u.s. and europe, what has
happened is consumers save money during lockdown, does lockdowns have ended they have started to spend it. that is what consumers do. in china, the consumer was less able to save money. the domestic economy was on the back foot. unless you are middle-class you do not have savings to spend. what is now happening is we are seeing global consumer demand picking up and that is working its way up the supply chain and we are seeing better production numbers coming out of china, beating expectations. i do not have a lot of faith the expectations are accurate. the range of forecast is wide. certainly a decent number, reflecting that improvement. tom: extrapolate to australia. jonathan ferro has mortgaged a house to australia through the end of the year. can you extrapolate the rest of the world? can you extrapolate chinese better over america and over the content of europe?
aul: i think it has to take look at both sides. china is now the largest manufacturer, a key part of global supply chains. if we are seeing better production in china, if we are seeing improvement to the export numbers, that is telling us something about global levels of demand. onsee it also come through the proper indications about confidence in the economy, not these useless surveys, but detailed behavior of consumers and individuals in europe and the u.s. is pointing towards a better economic outlook. this is always the case. markets are always too pessimistic about recovery from a crisis. this was no different to previous crises. the markets have failed to understand the speed of the bounceback, the resilience of consumers and businesses in the face of a challenge. there anything unique about the willingness of
many people distill under appreciate the rebound in this economy? paul: i think we have complications. we have problems with the data itself. the data quality has been deteriorating for several years. it has been really bad during this crisis. we are now seeing the inconsistency in the data. the fact that different countries use different methods to calculate gdp, only economists get excited about this most of the time. now it is leading to absolute anomalies in the data when you do comparisons. that is throwing up problems. what is happening throughout all of this is the pandemic that has accelerated the structural changes of the fourth industrial revolution and also the environmental credit crunch. both of those structural issues have been sped up throughout this. that means we may be failing to capture some of what is going on the economy. to give one example, we have
seen an absolute surge in business creation in america, in the u.k., in france, in japan, and singapore, a huge increase in business creation. that is not likely to be properly reflected in the data. some of the entrepreneurship is going to be mixed because we will not be looking -- will be missed because we will not be looking for accurate lisa: you think we will see -- because we will not be looking for it. lisa: do you think people are still getting it wrong and expecting a cool down in the recovery? paul: there will be a cool down. let's be realistic. what is really fueling this is most people accumulated about a months worth of income and savings while they were stuck in lockdown unable to do anything. as soon as lockdown ends, you've just spent two months stuck at home with your close family as companions.
you're desperate to get away from them and go out and spend money. that is the search of the third quarter. that is not going to last. it is like a tax rebate. within six months this money will be gone and we will go back into a more north will -- a more normal pattern of growth. the labor market is bouncing back more strongly and we do get fiscal support, particularly in europe and also potentially in the states next year. the other thing to remember is we have been seeing an awful lot of upward revisions to numbers. back toiness got a bit normal we saw statisticians being able to go collect data more reliably. in both europe and the united states there is been a lot of upward revision, the revision index, which looks at revising data, has been ticking up since lockdown ended. that is also telling us things were not quite as bad as we thought in the second quarter.
this,the other aspect of and you wrote an essay i thought was fascinating, you believe home working boost growth. can you talk a little bit about that, especially if that growth may not be in the big cities that traditionally were the economic engines? paul: this is going to be happening anyway. the technological changes, the changes of the fourth industrial revolution, fascinating from an economic point of view, in many ways reverses the social shift of the first industrial revolution. we are leaving the cities and going back to rural areas. what that does is it changes work times. i am not traveling to work on london underground spending half an hour to and from work every day stuck on the central line. my daily commute if i'm working from home is me stumbling five yards from my bedroom to my home office, that is it. i'm saving myself in our day. what am i doing with that?
i'm looking for entertainment, i'm looking for leisure, and i may spend money in doing that. this is been the progression throughout the 20th century. written we would all be working 50 hours to -- 15 hours a day by the year 2030. i am suit -- i am sure that is true for tom but your average economist is not working 15 hours. keene's was looking for a big drop at the time people are spending at work. it happened, and it happened because we spent less time doing chores outside of work and we have more leisure. that is what will come out of this. home working is not something to be shone. it changes the structure of the economy, but it changes it in a good way which gives people more free time and the opportunity to spend money in different ways and raise their standard of living. tom: it is amazing that paul donovan and this pandemic has
graduated from the mohamed el-erian pylon tom school. jonathan: he sees right through you. he knows. just tell everyone, go. tom: paul donovan, what is so important in the time we are in, there is such a respect for the holistic nature of your research reports. what do we need to focus on on global trade? stiglitz talks about the globalization and all of that. what is the thing forward on world trade we need to focus on? paul: globalization, the rise of global trade share of gdp, that is done, because the globalization story of the last 25 years was about increasingly complex, increasingly long supply chains. that is no longer desirable. this is a change that has not been brought about by the pandemic, it is being
accelerated by the pandemic. we will see a fairly steady decline in global trade as a share of gdp. there are two possible ways this happened and they have very different implications. if we go down the route of trade taxes, tariffs, that is not good news. that is telling companies you have chosen the best possible location for your production, we will force you to go somewhere that is second-best. no company wants to go second-best. that is less efficient. that will lead to either squeeze profits or higher prices for the consumer or some combination. if we see automation, robotics, digitization coming in. what that is going to be doing is leading to localization of production. you start producing close to the consumer because it is efficient to do so. that is going to be a different situation because that means lower prices for the consumer or
higher profits for the producer or some combination. what we have to focus on is globalization as we have recorded it is going into reverse. there is a negative story around trade taxes and all of that stuff. there is also a positive story about it is just more efficient to be producing closer to the consumer because of the technological changes. working out which of those two options is predominant, that will be key. the shortest nine minute interview we have ever done. it went too quickly. paul donovan, great to catch up. ubs global chief economist. love these conversations. learned a lot along the way. tom: you have to do both. when we started surveillance years ago, it is what it is about. you have to do the microanalysis and the macro. the thing you have to do that paul donovan does so well is combine them together. very few can do that.
jonathan: here is the price action. upside surprise on empire manufacturing. session highs on the equity market. s&p 500 advance .9%. ritholtz. barry that is next on bloomberg. ritika: with the first word news, i am ritika gupta. president trump will preside over the signing of a historic diplomatic deal between israel and two arab states. the president and his allies hope it will give my a boost ahead of the election. the leaders of israel, bahrain, and the uae will sign the agreement at the white house. the west coast wildfires have now become a campaign issue. president trump in california. -- president trump and california state officials disbarred over whether climate change is contributing to the blazes. the president insists poor
forest management is the culprit. joe biden call the president a climate arsonist and warned against giving him four more years in office. the trump campaign says that has ramped up television and spending by about 50%. the new ads will focus on the economy and will run for the most part in the battleground states where president trump is in a tight race with joe biden. in baseball, millionaire investor steve cohen has a deal to buy the new york mets. he reached a deal with a firm backed by the team's owners. terms of the deal were not disclosed. the website previously reported cohen's offer valued the team a $2.4 billion. he already was a minority investor. the economic recovery in china sped up last month. retail sales rose .5% from a year earlier. that is the first increase since the coronavirus hit early in the year. meanwhile china's industrial production rose for the first time since 2020.
through dividend discount models has inflated growth stocks. jonathan: bill gross, pimco co-founder on this market. tom keene, looking forward to catching up later with priya misra. we will do that at the top of the hour on bloomberg tv. then i will get up and the beautiful sunshine in the little city of london and have a nice cold point. i will send you a photo. on: i got the spiky things davos to the trip on the ice in new york. we will get to the new york mets in a moment. we welcome all of you on bloomberg radio and bloomberg television. lisa abramowicz and myself with barry ritholtz, right now we will look at something i am absolutely baffled by. my job is to keep my opinion out of this. barry can be a little more opinionated.
masters in business is a definitive podcast working with ritholtz wealth management. do you own oracle, do you own cisco? barry: the only way we own it is through large index ownership, but we do not own the stock individually, which is probably a good thing because who knows what is going to happen. interesting,ind there is the performance of tech and then the single digit shareholder return of the infrastructure guys like cisco and oracle as well. ellison is is -- mr. desperate to get in the game with the other guys. that is hard to do. barry: it is, and you can build it or you can buy it. the problem is oracle is doing neither. they are not building the way into the newest technology like
social, and unfortunately they are not buying anything. lisa: let's take a step back for a second for people who are not completely up to speed. oracle is said to be the winning bidder for a transaction that has not been approved yet to safeguard the u.s. data of tiktok, the social media site run by the chinese owned bytedance. this is a controversial move. one way to look at this is oracle is going to beef up its reputation as a cloud computing giant, giving a chance to compete with amazon and microsoft. if that is the case, is this a good thing? barry: let me challenge the fundamental premise of your statement. tiktok is not for sale. all of the headlines you've been reading about the negotiating process and the mergers, not only is it not for sale, it has never been for sale. this has been a giant feint by the chinese government, and the reason we know this is because
of microsoft's withdrawal from the bidding process because the value in tiktok is its underlying algorithm, which the chinese government is not allowed to be transferred to the u.s.. what are you buying? google, justg without the search. tom: this is important. this is seven paragraphs down where nobody reads. the only thing you are buying, i believe, is the collection of the american data to reside in machinery andcle oracle hardware. other than that, i do not understand what they do. barry: let's step back. part of the reason why this white house stumbled onto the correct decision almost by accident was because of the actual security threat created
by allowing the chinese datanment to have so much about so many people in america through tiktok. there are no privacy laws. basically, tiktok has access to a lot of things that most should advocates believe not only not be available to the companies, but it certainly to ad not be available hostile party. it is a very effective tool when you read about how the chinese have created their own version of the internet and have become a tremendous surveillance state. this is potentially dangerous stuff in the hands of a foreign adversary. the transaction, as it has been described, does nothing to thwart that potential security threat. the concept that somehow this is a sale, but will not include the
crown jewels, and by the way we will still be able to collect the data remotely from china, it is just security theater and political nonsense. tiktok is not for sale. the chinese will never let it be sold. i got a ton of money betting against anyone who says otherwise. lisa: putting aside the political considerations for just a second, taking a look at the biggest merger weekend of the year, you think this will be a net good thing for equity prices and for the u.s. economy? go through these long periods of time where we d conglomerate, where we take these mash ups. general electric is in the middle of spitting out somebody nieces over the past decade. that will go through another time where we start putting those conglomerations are together. i am kind of neutral on it. it tends to be a later inning
and the cycle sort of thing. corporate executives tend to for when things are cheap m&a. nobody was making acquisitions in 2008 to 2009 and very few in 2010. now in 2020, the acquisitions have ramped up. there is an opportunity where things are cheap and execs tend to be skittish. now you're using your inflated stock to buy other inflated stock. , it has been neutral and there has always been someone left holding the bag when the music stops. aol time warner, we are not at that level. tom: i remember that day. ritholtz with his wonderful podcast. absolutely extraordinary out
there. going into the fed meeting, i have to say there is a lot of information on a bond market that is dead in the water. sometimes that is a good thing and we may get some directional tone off the fed meeting. lisa: perhaps. the question i have is what kind of guidance will be give about how they would increase inflation, how they measure inflation? we do not talk enough about the divergence of inflation in day-to-day goods people by versus a lack of inflation and other areas that are measured and how much does this matter to the vet? -- to the fed? tom: an academic paper saying inflation is at much higher than what the statistics say that obese something to speak of into october. there is a spectacular article out by catherine martin of bloomberg news on the underperformance of bridgewater associates. ray dalio is a class act. he will appear on bloomberg this afternoon with our erik schatzker. cannot say enough about the
♪ jonathan: from london and new york for our audience worldwide, good morning, good morning. with 30 minutes until the opening bell, equity futures punching through 3400 on the s&p. we advance .9%. we begin with the bait issue. hostage by u.s. politics. >> the risk of the fiscal cliff. >> the if and when questions on fiscal stimulus. >> policy is front and center. >> a maximum cushion around the business cycle in order to
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