Bloomberg Audio Studios, Podcasts, radio News.
This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along with Lisa Bromwitz and Amerie Hordernt. Join us each day for insight from the best in markets, economics, and geopolitics from our global headquarters in New York City. We are live on Bloomberg Television weekday mornings from six to nine am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen, and as always on the Bloomberg Terminal and the Bloomberg Business app. We begin the sour
with stock Steady. Liz An sanders a child swat, wanting the market maybe too top heavy. Right in the following investor's face of risks, the market breath narrows and performance becomes overly dependent on a few dominant stocks. This dynamic can distort perceptions of market health. Lizan joins us now for more. Let's Ank and Mornic coome morning. Good to see you and welcome to New York. Thank you very much,
thank you for coming in. Let's talk about that quote right there and whether you believe we're becoming more or less dependent on just a handful of stocks.
At the moment, we're becoming.
Still very dependent on a smaller handful of stocks. Though, So if you look at the cohort of the Magnificent seven, just to pick a cohort as opposed to say, the top ten, only four of those stocks now are at performing the S and P five hundred, and the best among them no surprise, in Video is only the forty seventh best performing stock in the S and P five hundred, meaning forty six stocks within that index have better performance than Nvidia, and Vidia is the largest contributor to cap
weighted S and P gains, but it's not the best performer. The mag seven are all in the NASDAQ. In Vidia, as a number one performer among the mag seven, is ranked I think six hundred and thirtieth within the NASDAK. So I think we're starting to see more dispersion even among these concentrated cohorts.
You've also got.
Correlation within the S and P has come down, dispersion widening out. So I actually think it's not a bad backdrop from a.
Stock pick perspective.
It levels the plane field a little bit more for active relative capacity.
Let's build on that just a little bit more so Kristin beddley A says he was with us about fifteen minutes ago, and she said, for long term investors, stick with a camp Whited index. That's the way to go. What are the risks around that given what you just said, Well.
You've got the concentration problem embedded in that index. With the ten largest names representing forty percent of the index, that's an all time high. Even the top five names represent close to thirty percent of the index. So you are you're certainly guaranteeing the cap weighted return on the upside, but there's a downside to it.
And now memories tend to be short.
All you have to do is look back to earlier this year, the mid February to early April bear market in the case of the Nasdaq, near bear market in the case of the S and P. But many of those stacks stocks were the drags on performance. So it does work in the other way. And we always say to our investors pretty much all eleven point two trillion dollars of our client assets are individual investors, and leaving aside the take a passive approach and index to the SMP,
you don't have to take the same concentration risk. If you're an institution and you're benchmarked against the cap weighted SMP on a quarterly basis, you are at the mercy of the construction of the indexes. But if you're an individual investor, you're not being benchmarked against the SMP on a quarterly basis, you can take more of a stock picking approach and not take that risk of having such a concentrated portfolio.
Isn't that concentration of feature not a bug? And I say this at a time when we're talking about the potential for an outperformance of the S and P five hundred and the Nasdaq even with a labor economy that is questionable right now.
Well, it's a feature in keeping the cap weighted index returns high. But here's a stat just since the April eighth closing low, SMP has not even had a two percent drawn down over that period of time, continual record highs. But the average member within the SMP has had a fourteen percent draw down since April eighth. The average member within the Nasdaq has had a thirty two percent draw down just since April eighth. So there's a lot of
churn in rotation under the surface. It's a feature in that all you need is a few megacap stocks to bring those cap weighted indexes. I just think the fuller story, not the real story, but the fuller story is told under the surface of these cap weighted indexes.
John was mentioning Kristin Bitterly, who is just here, and she is talking about the cap weighted and not necessarily the broadening outrage doesn't necessarily see that gaining traction. Do you disagree based on the idea that you have seen this draw down and the average stock outside of that magnificent seven, and that those companies potentially could be the most beneficially affected by a rate cutting cycle that a lot of people are expecting.
Yeah, that's certainly the macro fundamental reason why small caps caught a bid, particularly given that the real surge was tied to Powell's Jackson Hole speech. I think one way to think about the broadening out the fact that Russell
two thousand finally hit a new all time high. Last time prior to this one had occurred was twenty twenty one, is I think staying up in quality still makes a lot of sense, and one piece of advice that we provide to investors not to buy an index tracking but if you use index as a source for ideas, Russell two thousand is still on the lower quality end of the spectrum, given that forty percent of the stocks or some combination of nonprofitable or delbie companies, whereas the SMP
uses a profitability filter in constructing their SMP six hundred, so it's inherently a higher quality index.
And in fact, looking ahead.
SMP six hundred earnings outlook versus s and P five hundred earnings outlook, the former has a much better trajectory mid to high twenty percent range in terms of twenty twenty six earnings versus more in the kind.
Of mid teens for the SMP five hundred.
Correlate is the rustle these small caps that do well with how quickly the FED continues on a cutting cycle.
That I think would be a risk that the performance trend does not persist, is if the FED has to cut short the cutting cycle. Not dissimilar to what happened last fall. And you know, the one thing that's interesting is we've seen that edging up on the part of the long end very much in keeping with what happened last year when the fed cup by one hundred BIPs and the tenure went up by the same amount. Mortgage rates went up by eighty basis points.
When you mentioned these cap weighted indexes, they're so sector focused and concentrated. So isn't it doing the opposite of what investors wants? Where are people diversifying again?
I think the active approach.
I think there's a reason why active ETFs, the growth rate in active ETFs is higher than the growth rate in passive ETFs. Now, part of the reason why it's a higher growth rate is it's coming off a lower base because passive ETFs been much more popular. But I think that is a bit of a tell that there are investors looking for opportunities outside of just the cap dominance within these cap weighted indexes.
Does this feel bubbly to you? You've seen it all, let's finish that.
I have seen it all. How does it feel almost forty years doing this? I'd say the big difference, probably the most important difference between now in the late nineteen nineties is there's more there there in terms of you know, massive cash flow generation. There's actually a denominator in the valuation equation. Now, there was no denominator in the valuation equation. I mean we all look now through the benefit of
hindsight and say, boy, was that just so silly? And you know the attaching of dot com to companies that had nothing to do with that.
So there is more there there.
But again going back to that period just this year mid February to early April, when you had the deep seek news and concern about whether the massive amount of spend was indeed a protective moat built around these hyperscalers. I think that we can go through valuation adjustments, necessary valuation adjustments, or even just periods where you get about a profit taking that is distinguished from what ultimately happened in ninety nine two thousand. I think it's a right
tail risk for the market. Maybe with similar probability is what would be the left tail risk, which I think the leftail risk is a recession, which I don't think is priced into the market. But these are much higher quality companies.
Stay with us more Bloomberg surveillance coming up after this. Joining us surround the table, the former Deputy Treasury Secretary Wally at a m I Wally got to see us, sir.
It's great to see you as well.
You co author a piece recently in Foreign Affairs, the title of which readers follows, The world economy was already broken, but there is a better way to fix it.
Can we address the broken piece? First? What's broken about? It's it? What was broken? Lretic At the.
Core of what was broken was China's use of anti competitive behavior to manipulate the global trading system. And this is exactly what needs to be addressed. And I think President Trump has a choice. He can try and do what former presidents, including himself, has done, which is negotiate a bilateral deal with the Chinese, or he can work together with our allies and partners to put together a set of policies that will hold China accountable and lower
tariffs on each other. And I think that's the choice that the president faces at the moment.
John mentioned this earlier, and you mentioned it in your piece about China basically dumping in other markets, especially since the barrier of entry has gone up so high in the United States. Isn't that going to force countries like what Mexico is attempting to do, force countries to take on China themselves and basically do what you're saying a collective unity against China.
I do think that gives the President an opportunity because if you're in Southeast Asia to day, you're in Europe today, you're seeing Chinese over capacity wash over your shores, ruining your manufacturings sector, and the question is what can you do? And alone it's hard for them to stand up to China. Working together with a large alley like the United States as possible, but ultimately, the thing that I found with all these countries is that they move when there's a leader,
and the United States needs to be that leader. So if the President calls on them to work together to hold China accountable, I think it's possible. But left to their own devices, it's really hard to stand up to a big country like China or the United States.
The Biden adminstration tried a multilateral approach and it didn't work.
I think the difference now is that the President has changed the global trading system by putting tariffs in place that have reordered things, and it while it's created a lot of challenges, including headwinds here for consumers and for the economy, it now creates an opportunity because something new has to happen, And that's what we talk about in the piece that ultimately, now the President has the opportunity either say that we can all work together to make
sure that China's anti competitive behavior stops, or we can try and negotiate China unilaterally. The unilateral approach hasn't worked in the past at.
This point, though, So how do you work together with other countries when everyone is skeptical of one another and essentially you're forcing them to take a side Because ultimately, a lot of countries, as you've mentioned, are scared of China just as much as they're scared of the United States.
I think you're right, there's a great deal of skepticism out there, but when you look at the global economy, it's still concentrated in the hands of countries that should be our closest allies. The G seven make up almost fifty percent of the global economy. If we were to act together only the G seven, it would be a large
enough block to put real pressure on the Chinese. So we're going for the President to start with the countries that we're closest with, and ultimately the goal has to be that we create an economy that not only works better for the United States, which it should, but works better for other economies also because the more trade that you do if you're a country, the less age you're
going to need in the future. So the key now for the president is to talk to these countries who ultimately need the United States, frankly because we are one of their biggest consumers in the world, to try and work with them to put pressure on the Chinese, because the unuilateral approach previously at least hasn't worked.
I just been wondering how much the world order has already changed and already shifted away from the United States being able to play the role in the way that it could have even a.
Couple of years ago.
The idea, for example, of the Ukraine Russia war and the repatriation potentially of some of the holdings, and how much that's shifted foreign currencies, foreign governments to buy gold and diversify away from the dollar.
Is it too late?
I think everybody always says that, But one in twenty twenty two, I was looking at what should we do with regard to Russia when they were thinking about invading Ukraine, and the Russians had moved a bunch of their assets, but more than eighty eight percent of Russian bank transactions on one side was still the dollar. It's really hard
to get away from the US economy. We are the biggest economy in the world, We're the biggest trading economy, and while that is shifting over time, I think this is the moment for us to try and make sure that we build a system that works better for us
going future. If we wait too long, and we say this in the piece, China's use of antiq competitive behavior will fundamentally have changed the global economy in a way that will make it harder for the US to win going forward, and not just the US, but for other economies as well. That's why what we do over the next few years is critical.
While you've been in the room, the President truths a lot about how annoyed he is with Europe that they continuously buy Russian fossil fuels. It's been very hard for them to really divest away.
How difficult it is to deal with the Europeans.
It is hard, but I think the US has a lot of leverage here, especially over one of the countries that he's doing this, Hungary, who is a big purchaser, and I think fundamentally one of the things we've got to do is work with the europe to both and
their purchases of Russian energy. We did a lot to do that in terms of providing Europe with LNG to replace Russian energy, but we've also got to take actions not only against India but against China, who is a huge purchaser but also a huge seller of the goods to Russia that they need to build the weapons they want for this war in Ukraine.
Sight with US Mulplinpex Savanna's coming up off to this, John, I guess now to discuss the head of Investment Solutions at City kristin Biddley Christin, good morning.
Good morning, how are you so it's been too long.
We've got some rain cuts or at least once a far the prospect of more to come. What kind of activity is that I'm looking for your clients and what are you advocating for them to do.
At the moment.
I think for right now, this was largely anticipated and expected, so I think if we would have had any change, then there would have been changes in the portfolio. But for right now, we're sticking to our guns and staying fully invested. We're balanced across fixing come inequities with equality buyers and also leaning towards the US market as well, And so for US, there's no real change unless we see a deterioration in the employment backdrop, or unless we see inflation start to accelerate.
For people sitting in cash at the front end of the curve and looking at where FED funds is, which is still north of the curve all the way out close to tens at the moment, Yeah, just below tens at the moment or around that level, what are these saying to you about the incentive to go out along the curve and what kind of what kind of document can you make for them to get out of cash.
That's a great elsewear.
Yeah, it's a great question because when you look at cash is certainly building up on the sidelines, and I would say there's always that argument around the seven point six trillion dollars that's sitting on the sidelines, but quite candidly, that's only increasing, it's not decreasing. And so when you look at our portfolios, we're not advocating for long duration at all. I think you have to be weary of some inflationary pressures. So the average duration in our portfolios
is around five years. I think that catalyst from going from cash into a five year duration. We have to be realistic about the investor psychology. So what we see more often is not your traditional sixty forty portfolio, but maybe a sixty thirty ten where that cash position people will hold it so they can be more nimble.
There is this issue of what's the best hedge against inflation. Couldn't it just be stocks? Isn't that almost what people are better?
Yeah?
I think it is, and I think there's actually a defensive play in terms of the largest free cash flow generating companies.
And I know you guys have been discussing.
This all morning in terms of where should you be invested, particularly in equity markets. I think as an inflationary hedge, we have gold in our portfolios. I know many many ASCID managers do as well. But when you look at where you want to be within US equity markets, I think the major debate right now is do we want to lean into momentum and the winners or do we want to play this broadening out trade. I think the broadening out trade will certainly it can deliver returns.
I think it's still tricky because when you look.
At small caps, their earnings are declining, they're not growing, and then you look at these large companies, they've contributed over sixty percent of the earnings growth this year. So while it feels weird to be invested there, I think you have to play the momentum.
At the same time, as we were talking about this morning, the Nvidia open aidl the idea that Nvidia is investing one hundred billion dollars for open ai to buy their products exactly.
So it creates this.
Feeling that we're all hinging on this circular bet with in big tech jet names that isn't yes yet getting ratified in the profitability in the rest of the economy. At what point does that feel wrong?
I think the main question is almost what is the barecase from here? And that's one of the questions when we see all of this capac spending, when we see what is the timeline for that when you will actually
see the returns? And I think investors are patient. I think it's more I saw a piece recently where it was innocent until proven guilty, and so looking out like one to three years, I think there's patients in that investment, But I do think we have Q three earnings coming up, and there's if there's one miss or if we don't have a beat and a raise, I think you will see a pullback in the market.
When you talk to clients, what are the most concerned about right now? You mention your notes this tug of war between the AI story, but maybe even tariffs at some point hitting them next year. Our clients just dismissive, as Lisa Shallitt said, of what's coming out of policy or is it still in the back of their mind brewing.
I agree with Lisa in her comments. I think there's almost like there's tariff fatigue.
So it's almost that was.
The dominating conversation a couple of months ago, and now it's not really even a question that clients are asking. And so I think the major thing on investors' minds right now is really trying to position for the longer term, understanding that short term there could be some volatility, there could be some pressure one way or the other. But where you position longer term and really the balance between private and public markets is.
That a camp whites at US index is that how I think about it long time.
Still still I think when you look at again, we're not in the camp of this broadening out trade right now, and so you could probably see some some strong returns, particularly with interest rates coming down, and you don't want to fight the FED on that. But I think like when you look at the name of the game is really quality and free cash flow generation, and who's going to be able to make those types of not one hundred billion dollar investments but similar to really kind of fuel the growth.
Let's build on that.
Why don't you lie smoke caps at a great run off the back of the repricing of the FED.
Why is this just another head fight?
Because I don't think it's based on fundamentals. And so when you look at okay, if there are inflationary pressures, if there's part of the market that is going to be exposed to tariffs, ultimately, if there's part of the market that's not going to be able to do that cap ex spending, who's going to get left behind.
It's smaller companies.
So maybe through M and A you could see some activity there, But I think this is really a market that's going to be driven by those making the investments and seeing the return on these investments.
The main argument has been the rate cutting cycle could potentially provide a boost schorce of the economy in a way that some people weren't expecting. Has that all been priced in already, or do you think that there could be some sort of upside surprise in the rest of the market as a result of potentially an even greater degree of dubbishness in the FED come after May of next year.
I think it's largely at this moment, if we're just looking from here to the end of the year, I think it's largely been priced in, especially for small caps. Again, these rallies that have been driven more not on fundamentals, but almost expecting that that FED momentum. I just see better opportunities in other parts of the market.
You pointed something out your notes, and I love this, the idea that every single time that the FED has been cutting rates at a time when the market's been at a record high, every single time the one year out the market was up and off and up considerably, why not just overweight risk right now?
So great question. In our notes.
Basically what we shared was when the FED since nineteen eighty has with markets at all time highs. The times that the FED has started to cut rates, we've seen positive returns.
We actually just saw that last year, so.
In September of twenty twenty four we got a rate cut. We're now up about seventeen and a half percent since last September.
So I think you still have to strike a balance though, because what are the risks on the horizon.
You don't want to be all in on equities in an environment where you still have what are the risks? You basically have earnings and someone not delivering on earnings, and given that concentration, you could see some downward pressure. You also have the deficit, which is another major risk.
And we have to talk about labor too.
That when you look at the labor market, that is something that well, we could say it's stalled, it is softening, and we're starting to see this emergence of why is the labor market stalling? Is it because of AI and people holding off? Is it because of tariffs? Is it because of immigration? There's really three cases there. But if we see the labor market continue to deteriorate, that's something that will ultimately impact consumer spending.
The labor market for grants is just awful, terrible. We've all seen the numbers. Does not look good at all.
Yeah, I mean it's personal issue. It's also something that very much speaks to the economy and the idea of upward mobility at a time when there are all these other pressures cost of housing and the like. How much are companies truly replacing entry level talent with AI. How much are they using that as a smokes grade simply because they don't feel very confident about the trajectory going forward.
I don't know, but I wonder if the much tigh restrictions around H one base support or complement the effort to try and do something about the lack of employment right now for graduates in this country.
It's a good question how much that really comes in parallel, And that's the reason why some people have supported more homegrown O talent.
I also wonder who's going to.
Push back, get that lobbying engine back in Washington, DC, and what exactly some of the.
Carbouts you're going to look.
That's so Washington, DC is right, lobbying just a big lobby and effort, Isn't.
That what it is?
And it's also one of those things where you could see a market that continues to grind higher, earnings continuing to go higher, and the unemployment rate going higher, which is something we haven't seen, but that is a reality.
Stay with us.
More Bloomberg Surveillance coming up after this. Stephen Stanley of Santante Writing chairman. Powell seems frightened that the economy could be on the cusp of a search in layoffs, but while new hiring is slow dramatically, layoffs are not picking up. Steven joins us now for more. Stephen, good morning running. Do you think race pricing is too aggressive?
I would say it is.
I mean, I think it's not outrageous for the rest of this year, but there's a lot of easy and also price them for twenty twenty six.
Why do you think the labor market is more solid than it currently appears, especially given some of the revisions in non farm payrolls.
Yeah, so, I would say a couple of things. The first one is I think that a lot of the slowdown in job growth is a reflection of changes that we've seen on the supply side of the equation, right just to slow down in immigration. We haven't seen a dramatic slackening in things I mean, the unemployment rate has ticked up a little bit, but it's still pretty close to where it's been for the last year year and
a half. I think the other point I would make, and I think this is the more important point, is that you have to think about why is the labor market slowing down? And when you listen to what companies are saying, they're not saying, oh, you know, we're getting ready for a recession, We're about to lay off a bunch of people. They're saying, we're just we've put ourselves on hold for a few months. We're waiting for policy certainty, and once we have that certainty, we're going to re engage.
And I thought it was interesting that we heard from a couple of Fedbank presidents yesterday suggesting that maybe firms are just getting to that point where they're almost ready to re engage because we have seen a lot of the policy uncertainty resolved at this point.
I think a big question is what does reengage mean. Does it mean invest in a bot that can talk to another bot, that can then talk to another bot to tell it what to do, and then a robot will fulfill the order, will be actually hiring people. Could you see a scenario where you get a reacceleration in the US economy without the labor market getting materially more robust.
Well, it certainly depends on what sectors of the economy are driving you, right, I mean, if you're talking about just purely a manufacturing revival, then that's not going to generate a ton of jobs. Service sector is still very labor intensive, so I think most parts of the service sector, if they're strong there, you'll see a good amount of hiring.
To Lisa's point, though, how much are companies just saying policy uncertainty as an excuse for AI taking.
Entry level jobs.
I think we are seeing places where AI is having a big impact. You know, there's been a lot of talk recently. I've written about this, the weakness in the market for recent college grads, and I think that's certainly, at least in some industries, one place where AI may be taking away from from what would normally be demand for workers. But you know, we've seen you know, you can go back two hundred years, right, we were an agricultural economy, and then we moved forward to a manufacturing
economy and a service economy. Some would say now we're moving to an information economy. Technology is always eliminating certain types of jobs, but in the process it has always in the past generated new jobs, so you can't always predict what those new jobs are going to be. I'm not on an aggregate level, I'm not worried that we're not going to have enough jobs for people, but I do think there's going to be some definitely some shifting around in the market.
How does the FED discuss that because they don't have a prescription for AI is impact on the market.
No, the FED can't really, That's something the FED can't really control, right, So the FED has to stick to its knitting. We have to keep inflation close to two percent and you know, and keep the labor market close to full employment. When there are supply side shocks to the real economy that are beyond the Fed's control. That makes the Fed's job harder for sure.
A bit of a guessing game. But one, have you got neutral? What do you think it is?
Yeah?
I would I'm more sympathy for the high neutral camp. So I maybe three and a quarter to three and a half somewhere in that range. And the reason I make that, I would make that argument is that the economy has by and large performed very well over the last few years. I mean, if you remember, at the beginning of twenty twenty two, the fund rate is at zero.
Market participants never had the funds rate getting back above two percent, and the idea was if you got to two percent or hoigh, the economy would fall apart, we'd have a recession, the government couldn't fund itself. You know, there are all these dire things that were going to happen, and here we are. We had over a year at over five percent, We've had over a year at four percent. The economy's done pretty well, and by the way, financial
conditions are tremendously positive at this point. So it just doesn't feel like the FED is grossly restrictive at the current rate level.
I can tell you just to echo that.
I remember in twenty one being on a call with Bill Dudley, a muhammadalarian, and at the time they were talking about the prospect of getting rates back to five. Maybe we'd have to go back to five. I remember just being in shock, thinking if we go back to five, what would happen to markets?
What would happen to the bond market? And here we are, yet here we are?
And Governor Myron saying were two percentage points too tight? Now for an individual yourself who believe that maybe market pricing is too aggressive for twenty six, I want to understand how you'd respond if an incoming FED chair, someone nominated and confirmed, said the same thing that Governor Myron said this week, the monetary policy was roughly two percentage points too tight.
How would you respond to that?
How would you start to think about and recounibrate your expectations for next year?
Yeah? I mean I think that there's two issues there. One is how much sway does one person have even the chair? And I think the answer to that is if someone comes in who is grossly out of line with the consensus, I think it will be very hard to drag everybody along. So I think that a super dovish chair would have some influence on the path of policy, but not you not just going to come in and get their way. And then the second point is how aggressive would the FED be in that sort of an environment.
Would it be let's jump first and ask questions later, or are we going to kind of take things as they come and we're only gonna We're only going to move as the data dictate, right, and as long as inflation is closer to three percent then to two. I think you're going to see a lot of caution on the committee, and we heard that yesterday out of some of the more hawkish members on the committee Hammock and Bostic, And.
Yeah, but caution, but that isn't preventing them from cutting rates, and that the baseline right now is.
Priced into markets.
You started by saying, you think it's actually pricing in too many rate cuts, and you think that there actually will be fewer.
Let's say they do.
Cut BI an additional one hundred and twenty five basis points, and that the baseline of the committee does see neutral at a lower level than you do. How much greater is the risk of true reacceleration and inflation next year? How underpriced is that possibility?
Yeah, I mean I think it's a it's a risk. I don't think it's a baseline scenario for sure. You know, as we talked about with the labor market, I mean, it's in my mind it's not a disaster, but it's certainly less overheated. You know, if it's overheated at all, it's much different than it was, say, two years ago.
You know, I don't see the We've.
Got the tariff impacts that still have to flow through, and you can imagine a scenario in which terriff related price hikes kind of kick off something bigger.
I don't think that.
Again, I don't think that that's a high probability scenario, but it's a possibility. It's something the FED wants to guard against and something they've talked about a lot.
So I mean, I don't.
Think that we should be, you know, just pulling our hair out that inflation is about to take off again. But at the same time, inflation has proven to be stubbornly high, and I think the FED needs to, in my view at least needs to take that into account and be cautious in moving rates down. The closer you get to the Fed's view of neutral, the I think, the higher the bar is going to be for cutting again.
And you heard that a little bit yesterday. It's like, Okay, I was willing to go along with last week's move, but I'm not sure I'm going to go along with another one. And then they'll others who will say, well, I could go for one more, but I don't know about two more. You look at the range of longer run dots that we got last Wednesday, there are nineteen
people on the FMC. There were eleven different answers for where neutral is, ranging from two and five eighths to three and seven eights right, So as you start to get into that zone, more people are going to get uncomfortable if you keep cutting.
This is the Bloomberg Savandans podcast, bringing you the best in markets, economics, anchient politics. You can watch the show live on bloomblog TV weekday mornings from six am to nine am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen, and as always, on the bloom Blog terminal and the Bloomberg Business app