Single Best Idea: Michael Darda & Ian Bremmer

Tom Keene breaks down the Single Best Idea from the latest edition of Bloomberg Surveillance Radio.  
In this episode, we feature conversations with Michael Darda & Ian Bremmer.

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.

Speaker 2 (00:12):
Single best idea very quickly here today. What a wonderful set,
A lot of fun with the Yankees, Red Sox Yankee
Stadium tonight, Lisa Mateo, thank you so much for that.
Ann Marie Horden a cameo appearance. She is Surveillance Yankees correspondent.
But also we looked at the moment of international relations
buttressed into this strange stock market in modern technology. Michael

(00:34):
Darta with us with rough capital. Michael Darta on the
moment at hand and a constructive nominal g that would
be four to five percent and not overheated.

Speaker 1 (00:45):
Nominal wages and real wages are growing, so that's consistent
with the real economy expanding. Inflation is still above the
FEDS target, but I think, you know, in an environment
where inflation is trending at around three you know, so
that can still be a very strong environment for corporate
profits if the economy is you know, staying out of recession,

(01:06):
and that's you know, I think that is likely with
the FED easing monetary policy. They've already taken rates down
one hundred and twenty five basis points, and with inflation
expectations moving up forty to sixty basis points. Over that period,
real rates have fallen about two hundred basis points. So
the FED is definitely removed quite a bit of restraint

(01:28):
from its policy, so the top line should hang in there.
I do think, you know, I do worry about the
FED getting back to two percent inflation on a reasonable timeline.
If we're still stuck at three percent inflation over the
course of the next two years, and that's part of
the FEDS forecasts, boy, that's a long overshoot seven years,
So I worry a little bit that that leeds into credibility.

(01:51):
You know, the administration really wants FED to ease because
they want lower market interest rates. But you know you're
not going to get lower market interest rates inflation expectations
continue moving on, So the FED needs to stay credible here.
I think, you know, four to five percent nominal, that's
the sweet spot. You'll have corporate pricing power, Inflation won't

(02:11):
be too high long rates will be at reasonable levels.

Speaker 2 (02:15):
Michael Darta nominal GDP. I can't tell you how important
I think that is through all the years I've really
you know, real GDP has huge value. Don't get me wrong.
But the idea of combining the real GDP growth and
then overlaying it with inflation to give you the animal
spirit of the system is I think just a critical
and useful analysis, particularly full to go over into revenues

(02:36):
and then what it means for the stock market and
American corporations as well. A wonderful conversation with Ian Bremer
of Eurasia Group today. Too many themes to speak of,
but one of them was the ending of US programs
to Africa.

Speaker 3 (02:53):
The United States is the most powerful country in the world.
It's the strongest economy by far, and the US has
historically been doing the most in terms of providing aid
to other countries and to the people in those countries
that need it, whether they're suffering from malaria, whether they're
vulnerable to HIV AIDS, whether they're starving, whether they're facing

(03:18):
forced migration. The US has done that directly. It's also
led the charge in doing that indirectly through American support
for the United Nations and the organizations that it stands up,
like the World Food Program, for example. The United States
has decided that those things should no longer be priorities.
That America first means that these other countries should have

(03:40):
to make their own way, they should have to pay
for themselves. Now, the Chinese see this is a great opportunity.
In the same way that when the Americans cut back
on visas, the Chinese immediately say we're going to make
it easier for talented people to come. They won't be
as attractive in terms of their aid. But if they
are the lead power, I mean, they made up their dues,

(04:02):
many of which were in ear years at the UN
the Americans aren't paying. The Chinese said, okay, we'll pay
some of ours now, so that they can put forward
that they're the ones that are more accountable. Look, if
you think that only American hard power.

Speaker 4 (04:14):
Matters, and maybe in the short term that's true, then
and you don't care very much about non Americans and
don't think that they are as deserving or that we
should take care of any of them, we don't have accountability, then.

Speaker 3 (04:27):
It doesn't matter. But that's never been my view, and
I think it's a mistake long term.

Speaker 2 (04:32):
Ian Bremmer of Eurrasia Group can't say enough about his
note Look for that from eur Rasia Group on podcasts
on Apple and Spotify and YouTube podcasts is single best
idea