Single Best Idea with Tom Keene: Katharine Neiss & Constance Hunter

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

In this episode, we feature conversations with Katharine Neiss & Constance Hunter.

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Episode Transcript

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

Speaker 2 (00:14):
Single best idea with a bonus explanation. Today we're going
to talk about what's going on in Europe, and we're
going to talk about what's going on in America. This
strange thing uncertainty. And instead of diving right into the
absolute brilliance of Catherine Nice of Pgium, out of Queen Victoria,
out of London, I should say she was in our

(00:36):
studios in New York and she's just absolutely definitive on
the continent of Europe. A little bit of explanation. Europe
in the modern form has a monetary union, the European
Central Bank. It's like the FED. It's not what it
is like the FED. All agree that what is missing
in Europe, much like a modern system, is some form

(00:59):
of fiscal union. Mississippi and Michigan are on the same page.
Finland and Spain are not on the same fiscal page.
And with all that's going on, pushed by the Trump
administration on Ukraine with a needed budget expansion in Europe,
they don't have the apparatus in place to affect whatever

(01:22):
the fiscal outcome is. And that was the heat of
the discussion today. I want to emphasize the Bloomberg coverage.
The German yields did move out priced down, yield higher,
but it wasn't in an inflammatory manner. The entry Europe
spreads did not move. This is critical. Germany, Italy didn't move.

(01:45):
They all sort of lifted away from however you want
to measure their yields, say against the United States yields.
The press conference at laguard Gave was absolutely fascinating and historic.
Back to whe jackson Hole speech of two years ago
on my conversation with her at that time. Here now
from Pgium, Catherine Nice.

Speaker 3 (02:06):
The issue for Europe is not the lack of money.
The issue in Europe is not the lack of you know,
general consensus about how these funds should be spent. The
problem in Europe is there is no fiscal mechanism in
place to allow this spending to happen. So what is
so important about this signal that we're seeing from Germany

(02:28):
is not just the size, but what it means for
Europe working together, having leadership in its largest, most economically
important economy in terms of going forward, and I think
everything else. You know, provided this is planned and executed,
you know, properly. There there are risks clearly around doing
big stuff. I think everything else is going to fall

(02:51):
into line.

Speaker 2 (02:52):
Catherne Nice, doctor Nie out of the University of British
Columbia working with PGUM and just thank you, thank You're
just brilliant today on the cacophity of Europe that's so
foreign to so many of us here in America. The
number one book I give to the kids is Against
the Gods Peter Bernstein, and it is a tour to

(03:12):
force as we stagger from risk to uncertainty and then
in a more modern sense, this word ambiguity. And I'm
going to go into the details right now, but all
you need to know is risk is some form of
measurable mystery. Uncertainty is basically not measurable. Uncertainty is something

(03:35):
that we really can't get our hands on. For Constance
Hunter expert on this EIU, the uncertainty now is a
changing landscape. Just as I tape this, I see that
the Secretary of Commerce says the President quote likely to
defer tariffs on all US MCA goods. I would suggest

(03:55):
that's a game changer. We'll let you decide after you
listen to single best idea. Here's Constance Hunter of EIU.

Speaker 4 (04:02):
We don't know where we're going to land, and until
that point, we have to come up with another way
to ascertain the impact of all of this uncertainty on
how households and businesses are going to behave. And one
thing that we look at is an uncertainty index that
has been extremely good at forecasting recessions. And it is

(04:24):
presently not as high as it was right before the pandemic,
but it is higher than the global financial crisis, the
dot com bubble bursting, and the SNL loan crisis. Right,
so we know that this level of uncertainty is going
to eventually cause a pullback in household spending in corporate capbex.

Speaker 2 (04:42):
Constance Hunter with EIU there and the changing landscape, and
let me tell you it changes line by line in
press release. Is I tape this over four minutes thirty
nine seconds, the Dow has gone up almost two hundred
points off of one line item out of sixteen hundred
Pennsylvania Avenue, Thank you for your support on your commutes

(05:05):
across the nation. Special thank you to Apple CarPlay. The
Bentley was in the garage today. My driver had Apple
CarPlay I thought that was a good and beautiful thing.
Android auto as well, and of course we say thank
you on YouTube. Growing each and every day, look to
the wide set of podcasts. Joe Wisenthal and Tracy Alloway
out with a superb podcast. I'm not going to tell

(05:28):
you what it is. I think it's already. It's not
out yet, I should say, but it'll be must listen
for those interested in the equity market. Subscribe to Bloomberg
Podcasts and we're on YouTube podcasts. This is single best
idea