The Shrinking of the Global Middle Class

You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or watch us on YouTube search Bloomberg Global News. Well, we are seeing progress and as well as some concerns when it comes to COVID nineteen in the vaccine rollout. The nation's top infectious disease doctor heading up the President's COVID team, Dr Anthony Fauci, he made some comments at the National Press Club yesterday talking about the progress. Yes, but still far from being

over COVID nineteen. It's really a critical time right now because we could just as easily swing up into a surge that would be a setback for public health, but that would be a psych logical setback too. Again, that was Anthony Fauci. Of course, Dr Anthony Fauccy, director of the U S National Institute of Allergies and Infectious Diseases.

So tim a lot going on. We've got New York City saying beaches will open in May, UK rolling out Maderna, but we've got global case is still above a hundred and thirty two million, six eighty nine million shots given worldwide. At the same time, we're seeing a lot of news when it comes to vaccines, the United Kingdom rolling out the Moderna vaccine, giving those first shots today, and also news from the European Union about Astra Zeneca. So let's

get into it with Dr Sandro Galia. He's Dina Professor at Boston University School of Public Health, author of the upcoming book it will be out in the fall of the Contagion. Next time. He joins us again on the phone from Boston. The Contagion Next time, Dr Galia, that terrifies me. Nice to though half you back here. Thank you talk to you. So how do you see kind of where we are? I do feel like Dr Fauci.

We also heard from the President yesterday talking about progresss, you know, seeing over the weekend, a day where we, you know, rolled out four million vaccines vaccinations in the United States, and yet there's always those words of caution. Yeah, I think we've made remarkable progress before. A million vaccines today is extraordinary. We've had hundred fifty million shots since President Biden has taken opposite about seventy days, and in many respects, we're sort of on the brink of an

amazing sort of transition making breakthrough. Will have enough people who are immunized where it will be difficult for the virus to spread. At the same time, there remains the concern about the variants and also the concerns as restrictions ease and parts of the country, particularly Michigan, you are seeing more cases spreading. Now, the cases that are spreading, there's a question about demographically. They're affecting more young people who have less severe disease, as you know, and as

we've discussed on the show. So so it's a balance of multiple forces, more vaccines, fewer people susceptible, at the same time easing of restrictions, more young people getting cases. And I think the question on everybody's minds, which you heard in Dr Fauci's comments is which of these will we be able to push forward first, will be able to get it at people vaccinated so that we are much less susceptible so that we can really see a dampening in the course of COVID or will we have

other flare ups, other clusters that become outbreaks. What does the pandemic being gone look like when this turns endemic? Right, we do have a flu season every single year where where thousands and sometimes tens of thousands of people do die, but we don't call it a pandemic. That's true, it's uh in many respects of it becomes It becomes pandemic when we when we establish a baseline prevalence that that we grow comfortable with. And of course what that looks

like remains to be seen. But I think most commentators have settled on that if we can get the surges under control, that this will be something that probably will be with us, where we will have some number of cases every year, potentially requiring some boosters responsive to variance annually, but it will be a disease that we live with the same way we live with flu. So you know, tell us what's going on at your university, because I think the last time we talked in February, you were

just returning to in person classes. Tell us kind of where you are and how things are going. Yeah so we so we we continue to offer teaching in a combination of in person and hybrid. Most of our students are online, but about ten at any one time are in person, and our faculty and staff come in as needed depending on the teaching needs and the needs of

the scholarship. We have announced, as have many other of our peer universities, that our expectation is that we will be fully back to in person teaching in the fall of starting in September. That we we expect more or less a return to a business as it was before the pandemic in the fall. That will undoubtedly be accompanied with some testing. Um whether or not there will be masking,

I think that remains to be seen. But by the expectation of at least at our school, our university, and our peers is that the fall, assuming that other things are not intervene, will be back to teaching in person. Is there going to be a requirement for students to be vaccinated? Yeah, so, we have not put the requirement in place yet at our university. But other universities have

Our universities have announced that they will. Northeastern has, Brown University has Rutgers has that their students there will be a requirement. And I think it's an active it's an active conversation in all the universities right now. Do you think they it should it should be a requirement. From a medical perspective, I think what matters is that we get as many people vaccinated as possible. Whether whether getting nine, say of a community vaccinated, requires to make vaccination requirement

or whether it can be achieve voluntarily. I think that defends very much on the particular university community. Hey, one thing I want to ask you. I'm going to actually talk with Arnold Donald, the CEO of Carnival and the CDC last night basically came out and said they think that we could see some US cruise ships back in order by midst are. What do you think about the cruise industry and what about that maybe reopening and what

needs to be done? Well, I sort of I think I think I believe it was Viking that they said they will be reopening cruising but only for people who

are vaccinated. And I think I think when the CDC isn't requiring that in the US so far not so far now, I mean, I think you know what you're doing from a business, from from the enterprise perspective, of the Viking perspective, you are saying that you are only going to have people obviously in close quarters, but people who are very low risk for transmission who have been tested, um, so you know they don't have COVID and essentially create a close community where there's no COVID in so there's

no covidentt side. So so COVID is not going to spread and people who are at low risk. You know, the key about the vaccines is we know that people who are vaccinated can still get COVID and can still transmits COVID probably, But the key is that the case of COVID among people who are vaccinated that have been

documented are much milder than they were before COVID. So so really this is part of Jim's question of us learning to live with COVID, like, what does it mean if there are still case of COVID but they're milder, and what's our tolerance for that? And I think all of that's being sorted out right now yeah, milder, and that they don't necessarily do the same damage that they would have done to us if we weren't vaccinated, because we don't get as sick as the studies have shown. Hey,

what about variance. Where do variants come into this conversation. What's the latest thing you're seeing with how they're being able to spread more rapidly and also possibly make the vaccines lefs less effective. Yeah, the the the answer is yes to both. I think they the best data are that the variants and make make transmission more efficient and

also have the vaccines being less effective. Having said that, having said that, the leading vaccines out there right now, the best evidence suggests that they remain maybe fifty maybe sixty effective against some of the variants um the transmissions, so they are not jumps up with the variants. So essentially they make the virus more dangerous. It makes it more dangerous for US and and and our line of defense.

Vaccine less effective, but we do retain effectiveness of vaccine, which then brings us back to our best approach right now is to vaccinate as many people as possible, to leave the virus as little space as possible to move around your book coming out in the fall, The Contagion, the next contagion next time? Ah, what should we as

global citizens be preparing for? Well, the the central thesis of the book is that we undoubtedly will be spending a lot of time focusing on biosurveillance and vaccines and all that, and all that's important, that we should do all that, but a lot of what's been going on in the past year is about our social and economic

structures that left us exposed to this vaccine. It's about underlying health and equities that created health haves and health have not that the vaccine exploited, that when the appologies that the the epidemic exploited. That unless we tend to those underlying issues, the next contagion will end up with the same devastations socially and economically that we saw happen

this time. So it really, Carol, builds on a lot of conversations you and I have had over the past year and a half since the pandemic has been around that that we cannot we cannot buy our way out of the consequences of a pandemic simply by dealing with

vaccines and biosurveillance. That we actually need to tend to the underlying issues that that a large proportional population has underlying commor abilities that makes them vulnerable to illness when when the pandemic hit, that a large proportion of population has no choice but to actually go to work physically in person, which then means that we have a hard time control and transmission when a pandemic it. So the pieces of the book really is that we need to

tend to these things. So very briefly, I mean, do you see anything policy wise coming out of Washington that that does help deal with these things? We just heard from the President about is two point two five trillion dollar infrastructure plan. Is there anything in there that would help so much? I do? I do. I actually think the singles from Washington have been have been very promising.

Of course, it's opening to proven. The putting is in the eating and depends on how these things are implemented. But I think what the President is propos is in the infrastructure plan paying attention particularly investing in narrowing health gaps, that these are steps that we should be taking. Frankly, we should have taken as a country thirty four years ago. So I'm heart I'm heartened by these signals coming out of Washington, right, I mean water, you know, equality, jobs,

I mean exactly. Um, so nice to catch up with you, Sanders, Stay safe. Dr Sandra Gallea. He's dean and professor at Boston University School of Public Health. He's author of the upcoming book it will be out in the fall, The Contagion Next time, joining us once again on the phone from Boston. I've said it before, what I love talking or why I love talking to him as we get the medical perspective, we get the academic perspective of what's going on in education because it has been so impacted

because of the pandemic. So Tim great to check in with him. Yeah, it always is. And um, Boston University still not not just decided with what they're going to be doing when it comes to requiring vaccinations. Yeah, exactly. They expect to be back in the fall with some testing. So in the upcoming issue Bloomberg Business Week magazine Scene and it turns out it's also a most read story on the Bloomberg Today. It's about millions tumbling out of

the global middle class in a historic setback. Not a good thing to him, No, I gotta turned my mic on there. Not a good thing at all. And you know, we were lucky enough to speak to Sean Donna, and senior trade and globalization reporter at Bloomberg News a little earlier in the day on Quick Take to talk all about what has changed over the last year because of the pandemic. So Sean, come on in here. You're joining

us on the phone from Maryland. Talk to us a little bit about what happened in during the pandemic with regard to the middle class and why it was such a big deal that so many people fell out of the middle class. Well, thanks for having me again. Uh, it's uh, Look, what we've seen in the past year with the pandemic is really the upending of all sorts of economic truths, right and the end and the challenging of big ideas. And this is one that's kind of

gone by unnoticed for thirty forty years. This this is around the world have embedding on this big growing new middle class and emerging economies and it's been ever growing. There's been this escalator to the middle class. It's just kept churning out new middle class, uh people in places like India and Indonesia and the Philippines and obviously China

as well. What we saw was the pandemic and the economic crisis that came with it was for the first time in decades these economies, a lot of these economies were contracting. And when they contracted, what also contracted the

number of people in that middle class. And the big question that we've got now, is this just a blip, is this a one time thing, or as these economies and we've heard this from the IMF this week, recover more slowly than advanced economies like us, is it going to be harder to get those people back into the middle class And is that going to be a bigger

drag on growth? And is that going to really change or force a change in thinking by a lot of business exact and these CEOs around the world who've been betting in all of these consumers in new and exciting places. Yeah, it's such a great perspective. Jill Webber, Bloomberg Business Week editor, on the Access line in Brooklyn. I can just see Joel when Sean was talking to you about this idea, like, oh, yeah, I'm in yeah, And you know, I think the thing

that really distinguishes it. It was the ability of the newsroom to make this a truly international story. It's like, you know, I think, I think we've talked about the China middle class um for basically almost every every story about UM, Chinese consumers for for a decade plus now. UM. But you know it's much bigger than that, um, the global middle classes of the American middle class, right um. And and these are people who have actually risen reason

out of poverty around the world. UM. And I think the scary part, as this package shows, is you know, the grip the grip of gravity, I guess really and when um, when we have this much wealth spread across the world and this many people that are being sucked back towards poverty, it's going to become another economic challenge for not just like the next year or two, but potentially for for you know, years to come. UM. It makes stories like vaccines all the more relevant because the

developing world remains what well behind the developed on that front. Um. So so all of those were really interesting. Me and Shahna, you know, being a guiding hand in all of this, you know, take us, take us through some of the countries, and what jumped out to you and what you learned. Yeah. So look, I mean one of the really important things with this story, and I think with any economic story

is really the hit at at who's affected. And so we went out and uh we spent time talking to reporters in our bureaus, and we found we really ended up focusing on four countries. And in India we talked to a guy called Ratty Sharma, and Rabbi is a really interesting guy, father of two beautiful daughters. You've been married, and last year he was hoping for his wedding anniversary to give his wife their first car. And the car in particular that he'd been saving up for for years

is a six thousand dollar car. It's called the Maruti Alto, and it's really the entry level car for uh, the American middle class. I'm trying to think of an American equivalence, probably the Toyota Corolla or or or a Ford Fusion. Uh. The uh. Then we we went out over to Thailand, and Thailand an amazing story and that it's really about us and how we're not traveling internationally and we're not

going to these places that depends on tourists. And in Thailand this year they expect to have three million UH visitors in two thousand nineteen before the pandemic at thirty nine million visitors. And we'd talked to their this woman YadA, who's a street hawker there selves uh snacks and and fruit juice to tourists and those tours that she relies on. And she used to have a house and a mortgage

and in a car with a car payment. Um that income has just gone and she's defaulted on both of those and moved into a rental house and very kind of something that I think a lot of people in American middle class can can can feel for. Uh. Then we went to South Africa and South Africa a young woman who has you know, moved into her first apartment and lost her job last year, was a big retailer that was getting close to bankruptcy. She moved back to

the family home. But the important thing here is she's moved from this kind of steady job in the formal economy with an apartment in the formal economy to like this portfolio of side hustles and one of the biggest ones that she's built a room out back of the family home that she can rent out for a hundred dollars months. And then finally we we go to Brazil into this woman friends and that uh and friends and that is a secretary. She has a comfortable middle class

existence like a lot of Brazilian she loves beef. But you know what, the price of food has changed so much in the past year. Uh, and they've got a real problem with food price inflation there in Brazil that she's now Uh. There's certain meatless Mondays in the meatless Tuesdays, and they're also when she goes to the butcher, she's looking at things like kidney and liver, the kind of thing that uh. You know, we think of its past generations who are trying to say with penny uh witty.

But we've seen and that is borne out in the in the data in Brazil where beef sales have tanked and we've seen more people buy chicken, and in particular, eggs are selling in a record clip in Brazil. So it's the fundamental reshaping of people's lives that we're seeing out there in emerging economies in ways that are uh that should really resonate with a lot of people in the American middle class, and ways that are gonna drag

on for a lot longer. The other way to think about all of this, if she's you back up, is if we think about the last crisis in two thousand, two thousand and nine that hit the American middle class pretty hard, and it was a decade of slow recovery after that that led to also it had all sorts of political repercussions the emerging economy is that pretty well around that crisis. This time around, the American middle class is probably gonna come out of this okay. In emerging economies,

it's going to be a very different story. And there's this word um bifurcating that um we've talked about in terms of what the what that means for the for the global economy, Sean, And you know, so much of the story is backward facing, and basically, you know that little tour of the world that Sean just gave us, we have great charts and data points for for all of those um things in the in the story, and Sean, I'm just curious when you think about, you know, what's

to come here, like what are the what are the moments and and data points that you will be sort of on the lookout as a reporter for in the in the month slash years to come. That will will help us understand just how devastating this past year has been. So and you gotta be quick. I'll be really I'll be really quick here. And it's the same one that we're all looking at here in the United States, and that's how quickly we get back to where we were

in the path that we're on beforehand. In a place like India, it's gonna end this year with an economy that's five percent or so smaller. In the US, it's going to be one point six percent smaller. Place like Indonesia, it's going to be closer to like ten smaller this year. That's the gap that you need to close. And that's what comes ahead and why it's so important. It's some

of what we've talked about. Tim. I'm just thinking about our conversations with Joseph Stieglitz Nobel Laureate talking about the developed having to take care of the developing nations and really be aware. Hey guys, thank you so much. Bloomberg Business, we get it. Or Joe Weber, Bloomberg News Senior Trade and Globalization reporter Sean don Don that story by the Way will be the upcoming issue of Bloomberg Business Week magazine. This is Bloomberg Business Week with Carol Masser and Bloomberg

Quick Takes Tim Stinovik on Bloomberg Radio. Alright, so just check in here because this was is the most it still is. I just looked. I just looked, Carol in the last eight hours, the most read story. This is what folks are reading about, and listen, no doubt about. It's about how Jamie Diamond said he's optimistic the pandemic will end with a U. S economic rebound that could last at least two years. Yeah, people want to read what Jamie Diamond has to say, and this is his

longest letter ever, sixty six pages. Is Wall Street reporter joining us right here in the Bloomberg Interactive Broker's studio. Sheelie. Great to have you back on the show. Hey, why do you think everybody wants to know what Jamie Diamond is thinking? It's so funny you asked this, because twice today somebody has asked me. People have asked me, readers have asked me to do another kind of take of this or a podcast because they want to without reading.

Since season stages. It's really a reset to the year, right, Jamie Diamond's tone positive negative. What does he think about the economy? Is he happy with the state of America? People care? And honestly as the biggest bank in the country and you know, the most profitable, right, it's really

a matter of you know, what he says goes right. Well, it's also don't you think Hinnali too and Tim, I think you think that probably agree that you know this whole idea that this is someone who is seeing crisis before uh and understand, you know, the impact on the economy, the impact on business, the impact on the financial markets. He's seen it before. He's had a front row seat.

He's been at the table during the financial crisis and other crises in his career, and so he is someone who can really kind of look at this and maybe put it in perspective and can see, you know, how bad it was and how quickly it's bounced back. Yeah, that's exactly right. And he took a tone that was

really realistic. And while he said that the markets can be very buoyant until three very specific timeline he gave there, he also really gave a huge nod to how unequal all of this, um, you know, how unequal the economy really is right now and the country is. And then need for a social a social safety net, higher minimum

wages across the country, um. Among other basic needs, right you know, immigration reform, healthcare, and and things that are very hotly contested, not just among corporate America but in Washington. You know, we talked about this a little bit on Quick Take earlier today Shonale. But the tone of his letter, and and you point ot out something that that has stuck with me, the difference in tone from this letter versus what we heard from Warren Buffett just a few

weeks ago. Talk a little bit about that. Yeah, the reason I think this is so interesting, So Warren Buffett when he came out of this letter this year and didn't really talk about COVID and the economy at large,

he was criticized as tone deaf. And then you have Jamie Diamond, who weighs in in a big way about the tone of the American economy and and and the American citizen saying that they've lost trust in our institutions, in our businesses, in our in our governments, in our schools, and our media, and you know it shows you that, you know, what place does the CEO have in the country.

People do want him to speak up, right, People are listening to him, not just on the markets, but people do want him to weigh in on social matters because at the end of the day, JP Morgan is also a big employer, right, They are providing a lot of capitals to communities that need that money to to really

make it through the worst of this crisis. Listen, you know, think about all the reporting that's going on right now, especially we're watching the CEOs down in Atlanta right when it comes to Georgia and voting rights and what people expect of CEOs and corporate leaders who are so careful about what they talk about, you know, politically Shinnale. But I do think there is as you said, employees increasingly

want their leaders to do it there. You know, younger employees are shopping their companies based on what those companies stand for. Speaking of younger employees, that's what else. He was afraid of the new fin techs coming, you know, and talent wise. We knew that this was a competitive threat for a while all but for him to say, as the biggest bank in the country, serving more than half of US households. To say what a big threat fintech was in technology, right, he cited kind of the

presence of Google and Apple and Amazon. Um, you know, others have also been concerned about big tech in other ways as well well. So what does that mean for the bank? Does that mean they go out and they potentially acquire a fintech company. It's a possibility because remember JP Morgan can't at its size go out and buy a bank, right, And plus it doesn't even need to

think about how many people it serves independent. A lot of these fintech companies don't actually consider themselves banks either, Yeah, regulatory purposes and for just the way that they handle money. Yeah, a lot of this is payments, it's getting it's getting money from one side to the other, right, among other custody among other things. Right, So we'll see how JP Morgan chooses to grow. Right. They also have a big asset manager at the end of the day, and that's

another place we could imagine them doing some deals. Yeah, exactly are they banks? Are they really a bank? Though? I'm just saying, is it time for us to like kind of relok at all? Of this, how would you what would you call it? I don't know, sanchun glomerate, thank you, thank you que Sandy while right like and or exactly exactly this is what you know. I just find it interesting, especially when we're talking about risk and you know, the public perception concerns about you know, financial

firm still not trusting them. But that's because banks are not banks. And guess what the jaws the question? You know, Sandy Wile was really the glue to City Group in its past when it was really that financial supermarket. Jamie diamond is the glue to JP Morgan. And you know what happens JP Morgan without Jamie Diamonds when they start to talk about succession, which they're not doing of course. But and he does, and he has said he's not going anywhere yet, right exactly. He makes a joke every

you know, he keeps saying five more years every year. So, hey, what what did you say about returning to work? We heard comments from him a few weeks ago in an interview that he did with Bloomberg TV about how he does see the value in doing stuff in person. But what did he say in the letter about returning to work? Yeah, he said that most people will be returning to work.

You know, we heard from three um you know, finance titans today actually across different types of finance from We heard from Larry Fink, who wants to get people to back to work. We heard from Jamie Diamond, who wants to get back to work. I talked to a private equity executive at Blackstone also who says, you know, you can't really be doing your best workover zoom, So uh, people want to get back to work. That the bottom line. I'm going to contest. I'm going to attest to that. Rather,

it's just I'm not going to contest. I'm going to attest to that because I'm back at home. I got so used to it like in the early days, and I had a nice little routine. I cannot wait to get back to the office. You're excited for you to get Huh, we're excited for you to get back here, Carol, I have all these lights. It just, oh my god,

it's a nightmare. Shinali. This is great stuff, great reporting, and you were so wonderful in breaking down is so called quote unquote letter because it's more like a mini novel, is it not just quickly. It is just gonna say all sixty six pages and that's not even his deputy's work. Love it, love it, Thank you so much. Sinelli Bostic. She's Wall Street reporter at Bloomberg News, back in her Interactor Broker studio with Tim the story. It's on the

terminal because everybody else is just saying, I'm bro journal. Yeah, but you let me drive? No, no, no, who's going to dr home? Honey? Please, I'll do the riding drivel? I want to drive, just drive baby. Thanks the question trying. This is the drive to the globe commune. Thanks. We'll drying up Dawn on Bloomberg Radio. All right, just about

ten minutes left in today's trading session. Let's get to it with Leo Kelly, founder CEO and co c i O Adverden's Capital Advisors, overseeing three billion dollars in client assets. He's back with us on the phone from Hunt Valley, Maryland. Hey Leo, good to have you here with us. Um, how are you doing all? Doing well? Thanks for having me on the show. We're slowly, uh seemed to be finding our way out of the crazy year that was, and uh that's good news. Does it feel that way.

Tell me why you say that, Um, it does feel that way. I think, Um, as we you know, as we look around anecdotally at activity, I know, and airport traffic is up tremendously. We're starting to get back to levels we were in the past. It's it's true of

activity on the roads and so forth. Then of course, just look at the markets, look at um, you know, look at what's happening not only in the markets, but in the economy with uh, you know, with the the lays you're seeing in products because pent up demand combined with current demand, combined with lack of inventories is starting to explode and prices are starting arise. So yes, it does feel like we're coming out of this. So expectations if you look at the equity markets are certainly high

as to where we are in the recovery. We are going to start hearing from companies not just about their first fiscal quarters, but also how they're thinking for the rest of the year. Um, what's the chance that the companies don't deliver on these high expectations or the concern? Well, you know, I do think when we know, when we look at the market, I think it's going to be

hard for companies to not deliver here. I think there's some there's some chances like demand was good, but supply was an issue, right because the demand came back so abruptly, And there may be very specific circumstances. I do think that valuation in certain areas is an issue. And you can, um, you can achieve a really good growth in a business and so your stock get hit pretty hard because it

doesn't match what the what the market is expecting. You're executing on all cylinders, but the market starts to expect beyond what you're capable of. UM. Now that said, there's so much money floating in this system between what the FETE is injected, multiple stimulus plans that we're talking about another two Trillion's astonishing how we use the word trillion with such ease these days. UM. The amount of money

in the system is astonishing. I mean money supply went up over twenty five percent last year, UM, and that I think there's just no way to stop that momentum in the economy with that much money floating around the system, and that makes you nervous. It does make me nervous in the long run and the short run Carol, the that amount of money put in um is it has to have a positive effect, especially when that money translates

to money supply increases. In O eight oh nine, the money went into the banks and the banks held onto it, so it never really increased money supply. Combine that with the fact that consumers are in far better shape than they were the last time because they still got paid through the crisis via unemployment benefits and p PP. They didn't have any money any place to spend them me only do so much online, and so personal savings rates

exploded during the COVID. And then you then you add the fact that debt is down from the last debt crisis, Housing prices are up for in case are up, so the consumers in better shape, their net worth is better, They've they've had personal savings increases, and they've got all this pent up demand in this pent up activity that they want to start to uh, they want to start to enjoy. So yeah, I do think it speaks well as short run long term. It's an issue, Okay, So

I'm curious what your short term is. And I say that because Tim and I earlier talked about the most read story on the Bloomberg Today, which has Jamie Diamond, of course, of JP Morgan saying this boom could easily run into two. So he's talking about the economic boom and ultimately the market boom. Is that your short term range? Are you talking shorter than that because you're you guys have been building up cash or holding onto cash. Yeah, we we you know, we've we've started to build a

little bit more cash. I do again, I think we have to look at there is a separation between equity pricing and economic activity, and equities can get ahead of themselves. And in fact, if you look at the growth markets, they have not performed well this year. And we have been overweight international and value and small value because that performs well coming out of recession and V shaped pounce has always been our our prime, our prime model. Now

I do think this thing has legs. I do think we'll see volatility because interest rates have to go higher, inflation is here, pricing is going to start and continue to rise. So in an intermediate from the intermediate term, which is a three years out or sell or more, you do have some challenges in terms of the long term. I say this all the time. We are addicted to painkillers. Every time there's financial stress, we just we just pour money into at the problem. And that's okay now where

we currently stand. But I liken it to an aircraft carrier. We're heading for the iceberg. We can see it out in the distance, and rather than start the turn, we're speeding up. Sooner or later we have to. We have to pay the piper and um. So for now, short term intermediate, I think we're fine, but this is something that sooner or later we have to reverse the trend and start the turn. Well, that's unfortunate to end it on the image of the image of the ship heading

towards the iceberg. Unfortunately we are out of time, Leo, But thank you so much for joining us today. Leo Kelly, Founder, chief executive officer and co chief investment Officer Edvarden's Capital Advisors, joining us on the front from Hunt Valley, Maryland. Thanks for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com, and you can also listen to our radio show at two pm Eastern on Bloomberg Radio

or watch us on YouTube. Search to Bloomberg Global News