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And today working all weekend and the team led by Joseppe. The team is just incredible. You know, everybody work Isabelle Lee was in with our final interviewer from our cross Asset team and she said they worked. They literally worked the entire weekend. There's no other way to put it. And we thank all of you for listening. We're having record audiences humbled by that, particularly out on YouTube where
you can subscribe to Bloomberg Podcasts. We made a decision in the vicinity of a happy Hour on Saturday that we would not do an academic Monday. We worship our academic guests. What a week last week with David Blancheflower Dugger when from Dartmouth, I believe. Do we have schedule this week Professor Krugman. We have the Laureate Krugman with us at some point this week and on we'll go. But today we said stay on the markets and you start strong with Damian Sasso or.
It's just about the fixings. You know, the PBOC just said China will set its currency manages. It's currency tom as. You know, there's a two percent band around the China U one that it can move each and every day before the government basically closes it down. Search breakers go up, and so you know what they do is they set that fixing every day. China you want is trading at seven thirty one, seven thirty two. Now, well they just
crossed that red line on seven twenty. If they're going to start allowing the fixings to gradually move higher, right, that tells me everything I need to know about you know, currency rep.
I can't say enough how important it was. I want this up. I said, that's got to be our first quote. I was stopped all weekend with you know, the basic what's going to happen to that? And A I don't have a market call because I know they're worthless. We're all it's part of the you know, the framework of Wall Street in that. But it's not my job to have a market call. What I will say is the
common feature of every crisis. And when I started studying this, folks, to put things in perspective, one of the four great
currencies of the world was the Lebanese pound. Good morning nasum to leeb the Lebanese pound and the answers things change and the way they change is you look at the lipmus paper of the system, which is the currency market, and mister Sassur there of Bloomberg Intelligence doing all our em work, went right to the heart of it, which is watch the ren minbi, the Chinese yuan, and to go from seven up to seven point three zero a weaker yuan and depreciate and to go out further is
not unimaginable. Given this trauma. Could the yuan get back to where it was? And I believe two thousand and fifteen or two thousand and five, I honestly can't remember back when it was unpegged a decade or or so ago. Damien Sasar, he'll be with us. You're more through the week. Many people helping us out today with a cross section of opinions. I tried to stay away from the Fed parlor game. Guess what, it doesn't matter right now. I
just don't think it's germane to the debate. Here is from RBC Capital Markets on the equity market collapse, Laurie Calvcina.
The reality is is that you know when I highlight this small cap chart and that we're at thirteen times, or at least we were as a Thursday. People say, well, we have to adjust the earnings, and I say, I know, we have to adjust the earnings. That's the separate thing though, if you look at you know, sort of historically my forward pe data eleven to thirteen times is where small caps tend to bottom out even when the E is too high. And people just can't mentally wrap their heads
around that. But it is something important you have to keep in mind because it's one of those things again that you have to see. It's not going to peg a bottom on its own, but it's still a signal even though there's some problems with the need. Now. I do think with earnings, we have to get the numbers down before anybody is going to have faith to come in and buy here. Forty percent of the revisions and the wrote the Russell and S ANDP are still to
the upside. Nobody's cutting numbers because they don't you know, I don't know a lot of different reasons, but nobody's been cutting the number.
That's a really important insight. Lori kelvissena IBC Capital Markets. I thought Michael Purvis was great on this and a number of others. Keith learning from truists was wonderful. This is all happening so fast. Let me explain this now. I think it's incredibly important. The financial media talks percent change. Of the indices. The SPX is the most mathematically integral indicy. We use the Dow because America is riveted to it from our past. It's not as good an index. I
get it, and we look at percent change. A correction is in the vicinity of ten percent down. A bear market is eighteen percent down, and the kind of wash out you get in an sequential crisis is down thirty five percent or something like that. The pros don't do that. They do a thing called standard deviations. I'm not going to go into it on a podcast, but the answer is we are at a point of stress in standard
deviations down three point six, three point eight percent. I know those are just numbers, and where we get stressful is down four standard deviations. We're not there yet. I'll tell you when we get there. On your commute across the nation. Thank you so much for listening, particularly the ninety nine to one FM in America's Washington. On YouTube, subscribe to a Bloomberg podcast and on YouTube podcast It's single best idea American