Bloomberg Audio Studios, podcasts, radio news.
The single best idea is maybe I should take off when vix explodes from eighteen out to twenty three. I guess it was out to sixty. Quite a Monday, to say the least. And I thought that a lot of the coverage was spot on and wonderful. A major shout out to Bloomberg and Tokyo, who I thought off Bloomberg Intelligence, Bloomberg Markets, and Bloomberg News had some really informed coverage. Where I take issue is the waiting of the worry waiting I mean not wait, but w eighd the waiting
of the different worries. And it was a joy to have Mohammado Arian with us today. This was scheduled and just wonderful to have them on as we pick up the pieces of maybe a flash crash. Maybe it's more than that. It's not for me to say, but to me, there has to be a study of the worst financial experiment in my lifetime, which is Japan. This has been a theme of Bloomberg surveillance for years, going back to Martin Feldstein of Harvard University. I should mention Robbie Feldman
of Morgan Stanley providing a wonderful perspective. Here, my visits to Japan years ago really underscored not a malaise but just a unique demography of Japan. Here is Mohammad Alarian of Queen's College on the legacy of Martin Feldstein and Japan.
When you won an economy at low growth, high debt, zero interest rates, and quantitative easing for a number of decades, and that's what happened to Japan, then you get first the contrast that Madi Feldstein correctly pointed out, which is the numbers are awful, but the stock numbers are great. So a wealthy economy that nevertheless doesn't grow. But importantly, you encourage that wealth to go seek higher returns elsewhere. And that's what happened. The Japanese financial system became very
large holders of other people's securities. Then when you change the regime and you raise interest rates, the currency appreciates, inflation comes back. Suddenly people cannot refinance these positions and are either actual or perceived sales. So what happened in the last few days is a shock that started in the US migrated to Japan. It then exposed a vulnerability that a lot of people knew about but didn't take a serious way, and then that got amplified, and then it came back here one day.
And of course I should mention all of his great work and his academics as he went to the IMF. In his ute was game theory of really really thinking. And I should mention that in the United Kingdom there's a cottage industry, a heritage around names like Ramsey and Morganthon and others of game theory. And this is something Alarian is definitive. I kid him about tea decisions and all that one of the TA decisions is what will the FED do now? When the facts change? They change?
And doctor Alarian was adamant that it is a different Jackson Hole as of yesterday. Here's Mohammad Alarian on Powell at Jackson Hall.
The marketplace thinks it is whether to cut twenty five, fifty or seventy five in September. That is what the marketplace thinks. I would bring you to the end of this month and Jackson Hall. He has a golden opportunity to regain control of the policy narrative, and to do that he has to pay some risk in laying out what he thinks the neutral interest rate is in discussing like the back I think has discussed what structural changes are happening to the domestic economy and to the global economy.
So for me, his teen decision is actually at Jackson Hall, whether he just gives a mail in speech or whether he tries to regain control of the policy narrative.
Brilliantly said, and this so often Doctoral Aria and maybe elucidates what we're thinking but can't quite do with his great skill. Lisa Bramwots and I will attend Jackson Hall with the wonderful Michael McKee. We're already working on a great guest list. It's going to be fascinating. I do agree with doctor Larian that the dialogue changed yesterday for Jackson Hall. That could easily make it eventful. We'll get some more jobs reports and such to make it exciting.
But I really do agree that then all of a sudden, Jackson Hall is a chance for the chairman to write the ship. After that audio that you just heard, I asked him about measured fed action versus some more ad hoc fed and go back and listen to the entire interview. Folks, A generous amount of time with doctor Alarian. Of course he had to go after the Mets, and we didn't mention it was Jets New York, Jets free here and the pillars of our economy and our crisis yesterday Mohammed al Arian.
So, yesterday was an example where we lost three anchors. We lost a notion that of the US economic exceptionalism. That anchor was put in doubt with the data. We lost a notion of policy anchors because people started calling on the FED due to an intermeding cut. That was I mean, there was a lot, a lot of ridiculous things being said, and we lost Tom Keane's calm voice.
There, Mohammed Hilarian pointing out, I was looking at the phone. I got the batphone out about ten am. I was having a momos. I spilled the thing all over Vettvil. It was terrible. I mean, there was the shock yesterday. I take one day off and you think it was a sabbatical like what Hilaria will take at Cambridge In the coming months as well, we will continue our coverage across all of our platforms. Look at YouTube, subscribe to YouTube.
We were stunned at the audience yesterday, absolutely stunned. Thank you so much for this nascent project that we're doing. Subscribe to Bloomberg Podcasts, out at YouTube, and of course on Apple podcasts. It's single best idea