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Joining us now from JP Morgan is Monica Descenzo. Thrilled that she could be with us today with private bank. But I've got to go to your ute. You came out of Georgetown, yes, and we talked just there about digital and I'm living digital every day with a team on YouTube. You covered at JP Morgan the digital nascent experience of the New York Times. Did you ever think
the New York Times? I remember arguing with people and in bars with a beverage of my choice in my hand, that they would succeed at this and they could get to two million. People said, no way. Did you see the digital success of the Times coming?
It's funny.
I was relatively young when I was doing this, and so you would you could argue that I would have been more forward thinking digital. I actually never thought the print.
Would go away.
I just thought people would always still enjoy having a print subscription I think the New York Times did a great job putting up that paywall and figuring out how to monetize the digital subscriptions. And I still subscribe to both print.
It's amazing, I mean out to eleven million.
Yeah, no, it's you know, it's hardly the failing New York.
Times as the president. And JP Morgan is way out front of this with your it was a really your II and all that.
Do you use to pay for content?
Right?
That's the bottom line sell.
Side analysis of JP Morgan private make with high net worth, with with with family offices. Is there still a place there for what you used to do? Oh?
Absolutely, I mean, you know, there's there's a ton of value in people who are experts in their sectors. And the challenge in my seat is the clients I work with can invest anywhere, so they're not beholden to one sector, what one small part of a US market or a national market.
So we need to.
Look across all research and make a decision based on your goals, what's the best way to reach those goals. And it could be a media company, it could be an industrial company, it could be healthcare. So that's what makes it fun. But We rely on JP Morgan's research, which is amazing, as well as others across the streation.
Sure your clients can invest anywhere, are they doing it? I mean amidst the whirl of headlines that we're dealing with. I imagine there is some adjita among them as well, wondering if if this is the time the time to do it. What are you telling them just about this environment and how they can maybe grow their appetite for taking some risk right now.
I think agitas is the right word, one that I grew up using in my family. You know, it's hard because I think people are still scarred by twenty two when equity is revolatile and fixing come is violatile, and so trying to convince people that in today's world you actually have so many choices across asset classes. It to me, as an investor who can go anywhere, this is like an amazing environment.
I look at equities US equities.
I don't think you're going to get more than maybe high single digit returns this year, So suddenly fixed income looks more interesting. Ways to monetize volatility and commodities looks interesting. There's a lot of ways to get to that most of my clients want to get seven eight percent annualized to meet their goals.
There's a lot of ways to get there. Right now.
It's not all equities anymore. The temptation for many is they go to what worked? Do they just want to keep owning tech? Do they want to go to private equity? And so we're trying to remind them to be a little bit more balanced and get out of cash.
What is the moment to get out of cash? What do you tell them about when's the time to move?
I mean for most people it was yesterday or a month ago, because you're missing like, yes, cash makes you feel good, But most clients I work with still have too high of an allocation of cash, and so trying to remind them what that drag looks like. And we do a lot of analytics showing them if you stay at twenty percent cash the next ten years, this is what this looks like. Whereas if you go into equities, even with the volatility, you may see the outcome is
significantly better. The highs are higher, the lows are higher.
Is it just simply the they're looking at four point eight percent or whatever they yield is right now?
Coming off for a long period when when rates were so low, it's suddenly they're like, oh, five percent. Like if I can make five percent risk free, that's great. The problem is you have inflation now, so it's it's a little bit different than than it was a few years ago. So that's the big challenge. And then of course the headlines we're seeing every day that you guys are talking about that stresses people out, and so you have to remind them it's all about having a plan, executing on that plan.
Not that you know, last night's dinner was a complete disaster at home. Holy Mac seventeen year old stomping out of the room, Good morning, after thought, How do you handle generational arguments in a family office? Please? John? Are you taking notes over there? Yeah?
I think you know you guys should hire like therapist, Yeah, to come in.
We actually do have behavioral exponents work.
With we're both trying to get for some time now.
As well as our your strategy team.
That's what they do, people like Gabriello Santos, that's what you do.
Ends I joke of my job is sort of as a therapist.
How do you do? How do you tell you got three kids and a big pot of money. How do you say to the one at the F one races and Monaco shut up and listen to us.
Well, first of I don't say that, you know.
I mean the struggle is helping the next generation recognize why why and how their parents view things, what their perspective is. But then again, it all comes back to goals, right, The parents' goals is different than the kids goals. And so what we try to do is it's a crude term it say, bucketing. So okay, parents, you're trying to do this because you're use this money over the next ten years. Your kids are going to use this money over the next forty years. They can take more risks,
they can be a little bit more intrepid. Then you might be comfortable being And that's where again, what's the right amount of cash for a sixty year old versus a twenty year old.
It's very different. So we've spent a lot of time.
I catch for the twenty year old is eight hundred dollars. And if they go I gotta go to steamboat, you go, Okay, twelve hundred that's it.
And it's you have to keep in mind too, these kids that age, they've never don't remember a bigger recession right, or more volatile market. And so part of it too is educating them on like what happened in two thousand and eight and like what that could mean for assets and how you think again about investing over the long term and sticking with us.
This is where I want to go, because what what do you say about normalcy? What is normal?
I would argue the last you know, ten years was not normal, right, we weren't in a normal rate environment. And you know, I see it both with younger clients. I work with younger people on my team, like reminding them of what volatility is really like and what a recession feels like, because while we had a recession in COVID, you snap back so quickly, it wasn't really like a recession that we've all lived through.
I have encyclopedic knowledge of every loss I've ever made, and I learned fairly early on.
So multiple encyclopedic.
So it just keep feelings like the World Book when you were kids, and the yes volume is very thick. Now, how do you teach family offices and family members to win from a loss? How do you sit them down and say, you know, we went into it and I'm picking on Intel and da da da da did work out? How do you teach the lessons of a loss?
This is actually where I think the family office infrastructure can be helpful, because you want someone who's a little bit dispassionate, separate from the family. Because the family, they've made the money, they worked really hard for it. It's the losses they feel it more, whereas their professional team can be a little bit less emotional about it. And so I work with both parts of the team to help the family get comfortable, but also help the family office
create a plan and stick to that plan. How do you handle a loss? Risk management? So again, we're not going to get everything right. We're not going to get a lot of things right. But if you know when to pull the ripcord and step aside and then wait and go back in, that's the best way you handle losses because we're all going to have them. It just you don't want to get married to positions. You want to get married to trades and just have some sort
of institutionalized process. For me, it's most of my clients, Hey, down ten percent, we re under it. Do we really like this if we do, you got to buy more. If you're not willing to buy more down ten, then what are you doing in that trade?
On the long list of things, you have to pay attention to risks that you're looking at, what's near the top. So today we'll have J. Powell opining before the Congress, maybe trying not to fine on too much before the Congress. We have these tariffs announcements, retributive tariffs. What are you most worried about? What has the most kind of determinism for your outlook right now?
I mean, if we're talking about equity outlook, Clearly valuations are high, and so our investor is going to be willing to pay twenty north of twenty times for US companies in a world where there's so much volatility in the headlines and where we don't know where the FED is going, and people are worried about inflationary risks. So for me in US equities, certainly the valuation risk. Actually,
earnings look pretty good. We're in earning season. The numbers are good, but I don't know that we can maintain that high multiple, and so that's the risk on our side. If you look at our bare case, we're assuming you could see multiple contraction. That's how you get south of five thousand. Again, I think that's low probability, but that's the risk to that.
Are people really in twenty percent cash? Yeah?
Now again it's for people.
It all.
There's value in something that makes you feel good, like that helps you sleep at night. Okay, but again I got to put the numbers behind it.
And you what that dragged us to your portfolio? It's it's not good.
Do you have a gold vault under the new building? I mean gold's popping three thousand and now? Is there the Descenzo Lord Norman has built a gold vault gold?
I don't percently have a gold vault gold right now. We've been talking about gold for a couple of years now. I was up twenty twenty eight percent or so last year. I think it's really after twenty eight percent run hard to go long out right. That said, I have clients who don't have very high allocations. What we've been doing, there's interesting skew and gold. People are still trying to buy calls to buy upside. So if you own gold out right right here, you want to buy some, you
can coller that position cashless. The most you can lose in the year is five percent. The most you can gain is thirteen percent. That's an interesting.
Family office is in collars.
Yeah, your gold, call your gold your goal because by the way, if you make thirteen percent gold, that's more than I think you're going to make an use equities and that's gold.
Great. Have you ever broken a phone? Have you plan I phone?
I am I'm Italian, I have a hot temper, so yes.
Yes, okay, thank you. Now we got to the Dirk Modica descenzo. Thank you, thanks you so much. Really appreciate it. Head of breaking telephones, JP Morgan really in particularly those comments on the heritage of JP Morgan coverage of our media business years ago.
You're listening to the Bloomberg Surveillance podcast. Catch us Live weekday afternoons from seven to ten am Eastern Listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch us live on YouTube.
I have been remiss, remiss, remiss. We really ignored the bond market because it's a sleep, which means ratear up. We are thrilled at Megan Robson is whether she's US Credit Strategy b MP Perry ba I mean, there's a certain you know, I go back to your brown economics with Bill Poole and all that, there's a certain point where you link in economics and politics into your bond call. Do you have to change b MP perry back credits strategy with all that's going on in Washington.
A lot of cross currents right now. But for credit, surprisingly the two factors that have driven markets are actually outside of politics. So supply demand very well in balance, and credit quality also very well in balance. So I think there is this expectation that some of these headlines related to tariffs should start to drive credit spreads, but so far we've seen the opposite.
So spreads haven't reversed.
They're still spreads.
If you look at me put it in English, they price to perfection, if.
If I think that's that's fair to say, definitely pricing in the credits soft landing. Since the election, IG credit spreads have been within seven basis point range, so very narrow range. Meanwhile, you've seen the interest rate markets ten year treasury, a lot of volatility around that, and of course you look at it, I go.
To translate that, please, I'm waiting for.
That whole faith and credit US ten year yield and a corporate quality ten year yield is point zero seven percent higher yield.
So the absolute spread now is closer to eighty basis points, but the range within it's traded so it's bounced between seventy four and eighty one roughly. So that very narrow range that we've traded within, or the band we've traded in, has been extremely tight, and I think it speaks to the strength of the technicals, supply demand being very well in balance. And then of course the credit cycle. We're not seeing signs of excesses. Things like corporate leverage has
been very stable. We actually saw it move lower last year, and interest coverage has come down but near the long term median, So I think that's contributed to the stability that we've seen.
To borrow a phrase from Tom, how does a pro like you navigate all these announcements from the President when it comes to tariffs, be they the piece is that he's going to do something or assign some executive order or the executive orders themselves indicating there's going to be a study or new tariffs in thirty days time, how do you sort of forecast out what those headwinds might be if in fact we see them.
So we're not expecting headlines to drive the market at a top down level, but there are a lot of sector implications, so we've really tried to zero in and focus on which sectors might be more or less exposed in the market. So looking at supply chains, looking at direct revenue exposure abroad, if you saw tip for tat tariffs, our starting points for sort of identifying those vulnerabilities. So we have as an example, for example, autos investment grade
auto sector very intertwined with Canada and Mexico. In our base case, we're not expecting tariffs on Canada and Mexico to actually pan out, but if they do, that's a sector that would be much more exposed.
Well as just as a side I looked at the chart, I can't remember from who. Overnight aluminum is basically Canada. I mean, it's a little bit of China, but everybody's got like an alphabet super countries like South Korea. South Korea is teen Swedens, I mean Canada. When we do aluminum tariffs, we're doing Canadian tariffs, thank you.
And there's a lot of there's a lot of issuers in the US credit indices that are actually based in Canada are domiciled in Canada, so of course those issuers are much more vulnerable if we see tariffs heat up. I think another area building products. So in the high yield market, this is a sort of trifecta of policy risk because you have higher mortgage rates, which is already
weighed on the sector. You have potential immigration issues, so a lot of the building sector is exposed to undocumented labor. And then also some exposure to tariffs as well if we see things like a tariffs on steel. So that's another place that we would avoid. And then if you think of about sort of hiding out, think about the services sector, So healthcare much lower exposure. We're overweight investment
great healthcare. In the high yield market, we like cruise lines, so sector where you're exposed more to the high end consumer and services versus goods.
I want to ask you to react to something that we heard last week when our colleague Silimo's and sat down with Scott Bess and the new Corenitury secretary. She asked about how he's thinking about what the FED is doing or isn't doing, and he said the thing that he's paying the most attention to is the tenure. What do you make of that? What should we make of the fact that he's kind of giving that premacy. That's the thing that he's mostly focusing on.
So I think that the administration is not going to be able to adjust the FED funds rate like though you might want to, although it might want to, And so they do in in some way have control over the ten year if you think about the term premium, if you think about fiscal deficits and so if they are able to sort of reduce the fiscal deficit, that could bring down the ten year a bit. And if you think about the constituency, they care about their mortgage rate.
If you can bring down the tenure, that is a gift to the constituency and would probably be a very popular popular item.
So, based on this conversation, you're taking off the summer.
We'll see it's range both.
I mean, it's cool if there's a real stability to its way.
Yeah, No, there's a definite carry element. We like the triple big where you can get a lot of carry, and then the leverage loan market. If the FED does stay on hold, it's an attractive carry profile.
Mean thank you Megan Robinson with this BMP prairi about it ahead of US credit strategy.
This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at seven am Eastern on Apple Corplay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station, Just say Alexa Play Bloomberg eleven thirty.
We are honored to bring you today someone who grew up in the shadow of KMOX in Saint Louis. One of my high points was being interviewed by KMOX with a plaque Abraham Lincoln on the wall. This is where Abe did whatever he did. He came to New York and has made a good go of it, and it could be a four hour interview today David Gura with mister Lander.
Brad Lander. Great to see you and definitely want to talk about your campaign and your platform. But I have to start with the news of the day, and that is this memo that came to light The Times first reported last night from the Justice Department to the US Attorney's Office in New York, instructing that office to drop the charges against the current mayor, Eric Adams. I wonder
what you make of that directive. Obviously you have an acting US attorney now he's in a very difficult position whether to take that advice and alienate probably the entire staff within that office, or go along with it. I guess under the expectation that whoever succeeds her, be that Jay Clayton or someone else, is likely to put a rubber stamp on it. What do you make of the news? What does it tell you about the case that this office is built against mayor?
What an outrageous miscarriage of justice. The Southern District has a tremendous history for doing corruption prosecution, and this says, no, we want you to do corruption instead. They had a strong case. They're not even saying the evidence in the case isn't strong. You know, they know he took illegal campaign contributions, corrupted the building's department, but they just want to wreck the justice system, and unfortunately New Yorkers are going to pay the consequences.
Do you think that the mayor should resign? There's this swirl now about should he be partnered to he not have these charges brought against him? Should he step down given what's happened here. Yes, he should resign. He's effectively being extorted by the Justice Department. He's only looking out for the interests of one New Yorker and that's himself, not even speaking up when they come to take our lunch money. There are many layers to this. It's a
two two page memo. I should say the acting Deputy Attorney General is an alumnus of this office of the sd and I which may SDNY, which makes us even more astonishing. But there's a line a footnote buried in it, which I flagged on Twitter and all the other platforms last night, and it's just find it to be like an astonishing footnote. Quote your office correctly noted in the
February third, twenty twenty five memorandum. Quote, as mister beau emil Bow, the Acting Deputy Turned General, clearly stated to Defense Council during our meeting on January thirty first, twenty twenty five, the government is not offering to exchange dismissal of a criminal case for Adams's assistance on immigration enforcement. A lot of absurdity baked in there, and just the way that that's constructed. But this is something that you've
homed in on in recent days. That is, was there some sort of deal broker between the mayor and the president in mar Lago or elsewhere? It sure looks like it.
Elsewhere in the memo it says we're doing this so that the mayor can get back to the business of fighting.
Quote unquote illegal immigration.
His job is to protect New Yorkers, not to do the president's bidding.
Do you agree? Is David Gurrows more up to speed on this than I am? And in Christmaster Landers, so are you that the way the language is formed, there's a threat to the mayor if you don't guess what we say. Going to bring those charges.
Back dismissed without prejudice means we will be watching every step of the way, and if we're dissatisfied with your fealty to the Trump White House, see we'll bring the charge.
The difference is Landers studied this at Chicago. I got it from Perry Mason. That's a difference.
I can't help but draw a line to what now former President Biden did in the final days of his administration, making these preemptive pardons to his son and others. Look, President Trump could have done the same thing. But there is a flex a power move here.
In doing this.
You talked about the long standing independence and proud independence of the SDN Y. He's testing them effectively by doing this, I mean move fast and break things. He's breaking the Justice Department and the tradition of independent prosecution that the Southern District of New York has long had, and that'll mean more corruption. You say he should resign. There's another
means of recourse here. If he doesn't do that, you other Democrats could go to the governor of the State of New York or to Cathy Hoakland say, look, you have the power to do you get him to step aside, perhaps force and to step aside. Is that something that you and your fellow Democrats are thinking about and indeed would consider it this moment because of all of this.
I mean, the form of removal I'm focused on right now is the ballot box New Yorkers can get rid of Eric Adams and restore integrity and effective government to city hall. I mean, people are fed up not just with his corruption, but with his failure to deliver. People are fed up with democratic mayors of big blue cities who can't govern and that's what we can elect this year.
I want to get to your platform. One last question on this, based on what you just said there in that memo, is this criticism of this case being brought close to an election. I guess nine months out now from an election is too close for comfort for this Justice Department. As you look at this campaign, how do you see this story being a through line? Perhaps the through line is you campaign and your fellow Democrats campaign against him. I mean, New Yorkers know that Eric Adams
has run a corrupt administration. I think it's twenty six members of his administration have either been indicted or under instigation, including him. But he also has been failing to deliver on affordable housing, on public safety, on childcare, on just making the government run well. So those will go together.
What New Yorkers want is a safer, more affordable, and better run city, and that I think will be the through line of this campaign. That's why I'm running for all your nationwide.
In your morning commune on Apple, car Play, Android Auto, or a new digital platform YouTube, Good morning, and subscribe to Bloomberg Podcasts. An extensive conversation of our David Gura with brad Lander. He counts the beans in New York. He's a controller. But far, far more of that is David goes to your campaign. I want to frame this, I said to a family member. Finally, whether you're a
Republican or Democrat. The former mayor of Chicago Ram wrote an essay in the Washington Post, Democrats have become the party of permissiveness. That's ballot box poison. You have a history of progressivism. How does the left in the Democratic Party migrate to the center to compete?
Yeah, I mean, I want to give you some straight talk. I think progressives, including myself, we're slow to respond to rising disorder and crime coming out of the pandemic, and we need to be real clear about it. So the number one commitment of my campaign is to end street homelessness for people with serious mental illness in New York City who are on the streets and subways. That is something a mayor could do. I've laid out a really detailed,
ready on day one plan. Some of that is involuntary hospitalization, a lot of that is connecting people to housing and services so they're not on the subways or on our stoops a danger to themselves.
And to others. You know, Tom and I travel, we go to Washington, go elsewhere, And I think a lot of people like to rag on New York, like to bring up the fact that they think that the subways are unsafe, that there is a sense of a lack of good public safety in the city right now. And you can bring up statistics to push against that, But how do you deal with that feeling. What's in the zeitgeist here that if you're riding the subway there is a danger that something.
Could happen to you are true. I mean, we have more private sector jobs, more office using jobs than ever in the city's history. People do want to be here. But if you're on the subway and you just heard the story that an unwell person, a mentally ill person push someone onto the tracks, and then you see a homeless person who's mentally ill in your car, of course you're anxious. I have a friend whose eight year old daughter was pushed to the ground last week. So it's
a real issue and a perception issue. But what we do is get those people connected to housing and services so they're not riding the subways where it's not good for them and it's not good for writers in New York City. That ends street homelessness for people with serious mental illness will be a proud New York and one that could show all those critics look at how well we're doing. But that takes a new mayor, and that's what I'm running for.
How do you look at the relationship when it comes to transportation between New York City and the state government, and of course the governor has weighed in on what needs to happen on subways to make them more safe. How important is that relationship. What would you do to improve that to sort of harness that effective way to make things safer.
I mean the city state relationship to make the subways around well as critical. This is why I was a big proponent of congestion pricing, and when the governor put it on pause, I help bring the lawsuits that sued to get it implemented. But of course now we're working closely together to make sure it's implemented well. The numbers are great so far. Travel times are down, traffic is down,
money is more people are on the subway. Now the city and state have to work together to deliver platform barriers, new station gates, new subway elevators, modern signal system, all the things that we have to work together to make sure it works.
I'm going to cut to the chase. It's real simple. I live in a fancy part in New York where I enjoyed a cigar in the street and one day there's seven police officers around me all of a sudden. And again it's crime that you mentioned. It's the issue. It's almost like Nixon sixty eight to seventy whatever. Brad Lander, how are you going to have a relationship with the NYPD? How do you form that is mayor versus being counter going after contracts.
I mean, this is an important moment. I have to say, Jesse Tish, who's now and there is police commissioner, is doing a great job so far both doing reform, holding people accountable, and providing support.
And that's the survivor of this administration.
I mean, honestly, the fact that the mayor's corruption has opened up an opportunity for reform is great. But I would love to keep Jesse Tish as commissioner. I think she's got the right tone of accountability and rebuilding and reform ins.
I need you to go out to Stanton Island next to where Mandolin Brothers was years ago. I need you to go to Stanton Island and bond with people that look at progressives and go, you gotta be kidnaped. How do you do that when I go?
So this is a connection from being being counter. I work with the Police Pension Fund to manage their pension. So there was an officer, officer Fayaz, who the mayor wouldn't allow to get line of benefit due to line of duty benefits, and my office did.
I worked with the Police.
Pension Fund to make sure those officers who had long COVID could actually get their disability benefits. So I've got a track record of working with the union reps. I hope, you know, I'll bring them out with me to Staten Island when I go to have that meeting, and I hope to do it, you know, in a way that shows, of course, we want to support our officers. Everyone wants accountability from people who do the wrong thing, from cops and from elected officials.
I've got three kids in public school in this city. As much as there's been a rotating cast of police commissioners, you've had a rotating cast of chancellors as well. What are your top line plans for this the hugest school system in the country here to stabilize it. You know, one of the reasons, candidly why we moved to New York was the prospect of having universal pre K funding has been an issue here in recent years. Your your perspective, your platform when it comes to the schools.
Yeah, my kids also went from pre k to twelfth grade in the New York City public schools, and they were lucky to have good schools. But boy, not everybody does so. Look a school's chancellor who recruits principles and superintendents who support their teachers but also hold them accountable. The state has increased the money we're getting. That's an opportunity to reduce class size, which is something that this
mayor's promised to do but really hasn't done yet. It's going to be on the next mayor to reduce class size with the money the state is giving.
Us and for our audience. Afterthought, when she was in elementary school here in the Island of Manhattan, there were eleven languages in her first grade class. I think you have to, as David says, did you say three off three? Now? I had no idea. I mean, that's what's remarkable about this city.
What other place has that?
Well, we're working at it. Ok kmox. She grew up with the Cardinals. It's just like I used to listen from Western New York bouncing off the ironsphere. If somebody said to me my ten great moments. One of them was a guy named Mario Cuomo talking to the former governor, and we said good morning to him in his family about his time with the Pittsburgh Pirates. It was magical. Heir Mario Cuomo talk about the Pittsburgh Pirates. One of his offspring may enter the race or is in it.
I'm not sure the details. Is it too crowded a field? I mean, how away from Mayor Adams upset? How do you frame September in October to b I mean, how do you frame into.
It elections in June?
So you've been sooner.
I don't think New Yorkers will want to replace one corrupt chaos agent with another. This is someone who resigned in disgrace just ahead of impeachment after a dozen women who worked for him accused him of sexual harassment, who sent thousands of seniors to their deaths and nursing homes, and then lied to their families about it to protect
his five million dollar book deal. Who cut the subways, Who cut a thousand in patient psychiatric beds, Who doesn't care about New York City where he hasn't lived in twenty five years. We're getting rid of one corrupt chaos agent, not bring another in.
When you look at this field of challengers to the mayor, Democratic challengers, what are we going to sort out here? This is going to be a robust debate, I imagine, about the future of the Democratic Party here here in New York. It's to be part of this broader conversation about it here in the US. How important is it, How vital is it to have that conversation right now? What are we going to learn from from this this this primary campaign?
Yeah, it's critical. And part of the reason in New York people shifted to voting for Trump is they haven't seen government working for them and there is doubt about whether Democrats can govern big blue cities. Well, folks like Michelle Woo are doing it in Boston. We have to do it in New York City. Get the cost of living under control, confront and build affordable housing, deliver on that childcare and universal pre K and three K, and make the city safer.
Are we going to have a gilded age campaign? Michell Wu in Boston's running against the Craft offspring. You know, you know there's the fair amount of money rolling around here. How do you frame out this path to June? You know, I assume how many people are in the race.
We know right now, so there's eight or so, and we'll see about Plomo getting in. What do you perceive may to be like, I mean, it's going to be busy for me. It's going to be a question about who people think can actually run the city well. And that's the track record I have as the city's chief financial officer, with a history of actually delivering. We managed two hundred and eighty five billion dollar pension fund. Our
audits have saved hundreds of millions of dollars. I can make government work, and I think that's what New Yorkers want.
We come full circle. Brought that memo at the top. I read that footnote which had that innuendo about immigration policy, and let's end there. And you know, a few weeks back, I was out at Floyd Bennettfield and saw the shelter that had been built there. I gather it's being emptied out or has been emptied out off of migrants moved to New York City. How do you approach this issue, which is one that I think is flum mixing a lot of people. Here we are in a city that
has historically welcomed so many. Now we have a federal administration that is wanting to constrict that. What is the duty of the mayor of this city here at this moment where we've had this influx of people here and a lot of people who are have left their home countries in great pain. Yes, many without documents have come here to New York. What's the mayor to do?
Yeah, I mean New York City obviously doesn't control a border policy. That's you know, federal. But what New York City can do is help those folks get to work. I mean, we need people working in construction, in our restaurants, in a home care, in healthcare. So helping folks who have work authorization get to work. Helping folks get work authorization critical. And then we can't allow ice to come
into our schools, into our public hospitals. The Brooklyn district attorney told this amazing story about how when his brother was murdered, which is why he became a prosecutor, it was somebody undocumented who was a witness, and the defense got that guy deported and.
There was no justice.
And you know, that's what we need, is a city that's keeping at the place where your daughter has eleven languages in her preschool class, but we also make it work for a thriving economy in a safe, successful city.
It was unbelievable the first time I walked into that classroom, five twenty nine, eleven languages, It is just just yeah, it was you know, forget about Ellis Island and all the emotion of a city, you know, you think of Italy and the Jewish community decades ago. To witness in.
Real time eleven.
Languages in a perfect five twenty nine school up on the East Side, it was absolutely unbelievable. One of the great moments. Two kids from Bangladesh not a word of English, and those teachers went into it every day. Would you say goodbye to mister Landers.
Comptro for New York City candid from mayor here and you're great to see you. Jack Buck is smiling on us Oky. Oh there you go.
Jack Buck is smiling at us.
Brad, there's a pothole.
How many times a week do you get that? A lot? A lot? Yeah, Thank you so much and best of luck. I hope to have you back here as we stagger to June.
This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at seven am Eastern on Applecarplay and Android Auto with the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.
Mark McCormick is a Toronto Dominion Bank TD Securities and what's so important here is McCormick was one of the first people to scream dollar resiliency and dollar strength borderline years ago. He joins us today with an incredibly important note out of Toronto, Stereotypes of a global trade order misunderstood. Mark, what are you focused on this morning in our new trade war?
Thanks for having me. Yeah, I think the number one thing I'm focused on is the dislocation between the tracking of trade policy and certainty, which there's really good indicators on that that you could pull now versus the generally i'd say subdued macro volatility and the generally subdued risk
conditions that we see in our risk model. So I think there's those things are kind of moving in the wrong direction where trade policy and certainty is at cyclical highs, and you know, risk volatility and market volatility is generally contained. So I think that is what's going to fall apart pretty soon.
On the classic game theory, Good morning, doctor l Arian and Cambridge on the game theory of Tit for Tat. It's like tennis, back and forth and back and forth. Where on your calendar does the tit for tat really click in? Is it March or is it August?
I'd say it's March April right now, there's probably i'd say a rolling three month calendar on the trade uncertainty, so you kind of have these, you know, these understandings of the first hundred days are very important to kind of set the agenda, to figure out where the politics and all the markets are going around. So I'd say April's a good one, and then another three months following
that will be kind of the key benchmarks. And again, wedged in between all of this, we're still looking at data. We're still looking at economics, and we're still looking at the macro drivers, which are still very bullish for the dollars. So there's a lot of conditions that are favorable for the dollar mark.
How do you figure out how do you game out what's going to happen with these tariffs if what's really unclear, at least to me, is what the objectives of them are. We've been through the first round of this with Canada and Mexico, China as well. I was up in Toronto talking to Christian Freeland is making a run for the Liberal Party leadership there, and after a point blank what could Canada do to forestall these tariffs from going into place?
And I gather that the Prime Minister had a constructive conversation with Donald Trump that postponed those for thirty days. But there is this X factor here of what needs to happen to get them off the table, and how does that complicate the work that you're doing thinking about the effect that it's going to have on markets.
Yeah, I think that's an important question because it goes back to the note of Tom reference and it's really about the why why is there discussion around all these things that I think if you work backwards. From where we're starting from is I think a lot of this comes back to the FX market. I'm clearly biased, because you know, we're a currency strategy team when we think
that everything matters for the FX market. But I think if you look at some of the things that are critically important, when you look at international relations, the world has been talking about globalization for over a decade, and if you look at globalization indicators that we've been tracking, installed economic trade, globalization, those things have not moved. They've been sideways since two thousand and nine, since twenty ten. So I think if you look at this, this is
a recalibration of the global trade order. So if you want to work backwards, this is an elimination of the US trade deficits, This is reindustrialization of the US. And this is also what is pursuit of a week er dollar policy, or at least an elimination of the extreme overvaluation of dollar. So I think tariffs are only basically they're just a piece of this. They're not the end itself. There are a means to basically adjust the trading order
and get everyone climb at the negotiating table. So that's the way we're looking at this, and again the way that this works is there's more asymmetry in favor of the US. To start all of this out.
A frame out for is looney here right now? Just getting very quickly here, what does the TD Securities call on weak loony?
Yeah, that's good, it's great because we actually have an open idea. We are basically long dollar CAD on a three month call option. It's a pretty simple idea or I'm sorry, call footspread. Essentially, what we're doing is we're looking for a dollar CAD to kind of go through the max pressure right now. I think what's very important when you think about the trade and policy and certainty and the volatility in markets. As I mentioned, we don't
see a lot of this actually priced in. We don't think the markets have taken interesting to seriously, especially for a currency like CAD. You know, we do this through multiple different ways. We look at different models, different tools, but basically, for currencies like CAD in the Mexico pays, we don't see the trade and policy of priced.
In the market. It's all great, but Ger and I are just trying to get two nights at the Sheraton at Agara Falls, take the mark helping the Canadian side or the US the Canadian side, it's the only thing you go. You go to Canadian side, they pour a better drink. Mark. It's real simple. I got a one forty three looning. Are you telling me a linear function out to a weaker Canada one fifty?
Yep, that's exactly it. Sadly, I just came back from a kid's soccer tournament in Florida, so I was on the opposite side.
Of that h transaction.
The dollar dat, yes, crushed. So yeah, we're looking for one fifty in the in the next six weeks. That's actually essentially our targets. We get to one forty eight within the next month, and I think most of the pressure is going to come through the Canadian dollar right now and then euro China next.
Like what did the goofy breakfasts costs you at Disney World.
It's so probably twenty five CAD to kind of go out, And yeah.
There's a real conversation about understanding there. You've been there being a fam just got back. It's there. Mark McCormick. The first time I saw you were in the food court reading Stanley Fisher nineteen ninety eight. Everybody's too quiet about EM as far as I'm concerned, Do you have a worry about jump? Condition within EM economics is signaled through foreign exchange? Absolutely.
I think it's there's two pieces of it. There's two types of EM currencies. There's a carry currency, which is Latin America and probably some pieces of Eastern Europe maybe like Hungary, which was everyone's favorite carry trade till it wasn't. The other side is the EM through growth and industrial policy, which is where Asia kicks in the remedy. Be the Taiwan dollar, Korean Korean wand tybot. Those currencies are all in those categories. The problem is, I think both of
those functions EM are under dress. The Latin carry trade, besides Brazil, I think is going to be is going to massively underperform, which it has for the last six months. If you look at G ten carry versus emcerry dollar performance as a G ten carry currency is outperforming EM when you you a risk adjusted So there's two sides
of this. Again, I think the trade uncertainty, the slowdown in the global economy more generally, those things are much are going to see the EM Asia currencies continue to weaken in the short term, and again the em carry trade is going to see in the Mexican peso, the Colombian paso. It'll probably see Brazil lperformed though, but those two baskets are going to underperform for at least the next three to six months. And that's kind of our view on Ian Curry.
Get one more in here with He's fired up today, Mark's fired up.
I saw a line in your note. I have to ask you about it, that is, this is a year to expect the unexpected, including a grand FX bargain. This is Paris accord round two at mar Lago. How do you see that playing out? How could you see that playing out?
So I think it goes.
Back to the original question about what's the why here. So the trade policy uncertainty, it creates a lot of tension in global markets. It sees a dollar strengthen, it sees local currencies weaken in some of these other countries, and again you start to see sentiment and economic dynamics
underperform in the currencies that are being targeted. Where the trade, your trade policy and certainties on the rise, that is going to create a pressure point where I don't think everyone wants to accept a stronger local currency relative to the dollar, to just come to the table and say, yeah, sure, we'll do that. But I think with the restructuring of the global order, with the change in the structural dynamics around trade, that pulls people into the negotiating table and say, Okay, yes,
our currencies are undervalued. Maybe the trade lines are not fully symmetrical, and so to get rid of this and to move into a world where things are more organized and less uncertain, what we'll do is we will agree to revalue our currencies and bring them back into line with things that are closer to fair value.
And I think that's.
Where all this goes, and a lot of the deal making would want to go.
I gotta be quick, Chelsea, are you kidding me? Man City can't get it done? Can Chelsea hold off Man City? I think they can.
They got one more Man City victory in them for this year.
Okay, fired up, Mark MCCORDI thank you so much. The Toronto Dominion do really really helpful there and all on the currency dynamics and the mystery of what's going on with.
Terrorist This is the Bloomberg Surveillance podcast, available on Apple, Spotify, and anywhere else you get your podcasts. Listen live each weekday, seven to ten am Eastern on Bloomberg dot Com, the iHeartRadio app, tune In, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal