Single Best Idea with Tom Keene: Craig Moffett & Richard Clarida

Tom Keene breaks down the Single Best Idea from the latest edition of Bloomberg Surveillance Radio.

In this episode, we feature conversations with Craig Moffett & Richard Clarida.

Watch Tom and Paul LIVE every day on YouTube: http://bit.ly/3vTiACF

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news a single best idea
and we will keep it short today. I'm sure euro
is overwhelmed by the news flow as I am. Basically,
the team has been working since one am this morning,

(00:22):
particularly on the horrific fires in Los Angeles, but on
many mother stories as well. I've learned more about Greenland
in the last eighteen hours than I knew in my
entire life. If you took Greenland, and you know with
the Mercader maps, it's distorted massively being up so far
in latitude, Greenland is if you were at the border

(00:44):
of North Dakota, Minnesota and Canada, way up north, it
would stretch down just past Monterey, Mexico. That's how long
it is. It's like eighteen hundred miles long. So there's
a lot of Greenland. I'm learning things like that. All
of that pushed aside yesterday by Craig Moffat, hugely esteemed

(01:06):
at Sanford Bernstein and with Moffatt Nathanson, they're just iconic
and media coverage tipped to rich Greenfield on that as well.
But Craig Moffatt coming out with all of his sort
of interior work on companies and putting a sell on Apple. Here,
Craig Moffatt of Moffatt Nathanson.

Speaker 2 (01:25):
There was this narrative over the past couple of months,
particularly into the last couple of weeks of last year
in twenty four where everyone was talking about the fact
that Apple was quote unquote melting up in the face
of no news. In fact, there was actually quite a
bit of news, and it was bad or at least

(01:46):
sobering and concerning news. Obviously the risk of retaliatory tariffs,
but more saliently, over the last couple of months, you've
had the judge in the Google and a Trust case
say at the payments that Google makes to Apple for search,
which remember that's twenty five percent of Apple's operating income,

(02:08):
are patently illegal. Now we don't know how those will change,
but there's obviously a risk that they do that ought
to be reflected in the multiple. And then there's real
deterioration in China and some obvious concerns that with China.
The Chinese government is obviously not going to allow Western
large language models to answer questions in China. One more thing,

(02:32):
there are real concerns about whether AI is going to
drive the kind of upgrade cycle that seems to be
discounted in the stock. Pretty skeptical, but Apple's not broken.
It's the valuation that's broken.

Speaker 1 (02:45):
Craig Moffatt Mafitat, Nathan's in there, and of course there's
people that go the other way. That's what we like,
the opinion Bloomberg surveillance on a given stock or on
the market. There's also opinion on the Federal Reserve, and
it helps some time to go to lead academics and
particularly those with a tenure of duty at the FED.

(03:05):
Richard Clarida is the former vice Chairman of the Federal
Reserve System and far more writing heard at Columbia University
and their Department of Economics. We went granular on the
edge of Paul Krugman. Krugman with his Friday, I should
say on the show, but we went granular on the dynamics,
the price theory, the microeconomics of tariffs. Here Richard Clarida

(03:29):
on the economics of tariffs.

Speaker 3 (03:31):
The revenue that the government raises is more than offset
by the losses to consumers and producers relative to their
ability to either consume goods or produce goods. And so
that's the deadweight loss.

Speaker 1 (03:46):
It's my destinition. It's a lose game.

Speaker 3 (03:49):
Well, but the important proviso that almost any tax that
raises revenue generates some sort of a loss, whether or
not it's the consumption tax or investment tax. Again, it
depends on how long they stay on. You know. One
view is that you put tariffs on countries basically then
come to the negotiating table and then they come off.
And so it's very importantly going to depend upon the

(04:11):
detail of the tariffs, whether or not there's retaliation, and
whether or not there is an endgame. And really without
answering that, it's really hard to make an informed assessment.

Speaker 1 (04:20):
A clinic with Richard Clarit. He went on to talk
about lesser tariffs, lighter tariffs versus the magnitude of a
larger tariff, and he put a X axis on it.
He said it also matters the time length of the
tariffs as well. Just brilliant. We hope to see him
maybe the end of January. With the FED decides, we're

(04:42):
deciding to say thank you to Rob Carolyn. We have
a treasured meteorologist, Rob Carolyn. He's been with us for
decades and I can't say enough about his coverage of
the horrific fires in Los Angeles. Will continue that coverage
in the coming hours and days across the nation. And
your Mute on Apple CarPlay, Android Auto. Good Morning on

(05:03):
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