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This is Bloomberg Business Week Insight from the reporters and editors that bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Masser and Tim Stenovek on Bloomberg Radio.

This is Bloomberg Business Week Insight from the reporters and editors that bring you America's most trusted business magazine, plus global business, finance and tech news. The Bloomberg Business Week Podcast with Carol Masser and Tim Stenovek on Bloomberg Radio.

What a FED meeting? Yeah, what a market reaction?

What a FED meeting? Yeah, what a market reaction?

Well, listen, I think it's so interesting to hear the conversation that the gang, the surveillance Gang, really just having on television and radio about you know, was it hawkish, a little bit hawkish? Was it dubvish? We certainly saw equity Riley, we're coming off our best levels of the session. But nonetheless, Tim, we did see that immediate market reaction. Stocks moved up, we saw it, yields back off. I feel like I can't wait for the main meeting already.

Well, listen, I think it's so interesting to hear the conversation that the gang, the surveillance Gang, really just having on television and radio about you know, was it hawkish, a little bit hawkish? Was it dubvish? We certainly saw equity Riley, we're coming off our best levels of the session. But nonetheless, Tim, we did see that immediate market reaction. Stocks moved up, we saw it, yields back off. I feel like I can't wait for the main meeting already.

Yeah, I'm already looking forward to that, and we're gonna get a lot of data between now and then, too, Carol. As we heard from Charlie, the FED, as expect it held their benchmark rate study for a second straight meeting, though they telegraphed expectations for slower Carol economic growth and higher inflation.

Yeah, I'm already looking forward to that, and we're gonna get a lot of data between now and then, too, Carol. As we heard from Charlie, the FED, as expect it held their benchmark rate study for a second straight meeting, though they telegraphed expectations for slower Carol economic growth and higher inflation.

Did indeed, Ja Powell saying the ust economy, folks, it is strong overall, and yet there are some signs of moderation.

Did indeed, Ja Powell saying the ust economy, folks, it is strong overall, and yet there are some signs of moderation.

Recent indications, however, point to a moderation in consumer spending following the rapid growth seen over the second half of twenty twenty four. Surveys of households and businesses point to heightened uncertainty about the economic outlook. It remains to be seen how these developments might affect future spending and investment.

Recent indications, however, point to a moderation in consumer spending following the rapid growth seen over the second half of twenty twenty four. Surveys of households and businesses point to heightened uncertainty about the economic outlook. It remains to be seen how these developments might affect future spending and investment.

That, of course, with Jay Powell at the press conference today a little bit earlier. As for market reaction, as we mentioned, we did see stocks rally and use treasure yields back off right after the decision. Let's get more though on what we heard from the Fed today and what we saw in terms of market reaction. Keep in mind that we're going to be covering all of this over the next hour and a half with us as Bloomberg Intelligence Chief US Interest Rates Strategist IRA Jersey and Veronica Willis, global investment strategist at Wells Fargo Investment Institute. Ira is at BI headquarters in Prince of New Jersey. Veronica is in Saint Louis hey Ara, I want to start with you, how did the FED do you think on messaging and in assessing today's current US economic backdrop and what it needs in terms of monetary policy? And I am curious did it filmore hawkish? Did it feel more duvish? What was your read?

That, of course, with Jay Powell at the press conference today a little bit earlier. As for market reaction, as we mentioned, we did see stocks rally and use treasure yields back off right after the decision. Let's get more though on what we heard from the Fed today and what we saw in terms of market reaction. Keep in mind that we're going to be covering all of this over the next hour and a half with us as Bloomberg Intelligence Chief US Interest Rates Strategist IRA Jersey and Veronica Willis, global investment strategist at Wells Fargo Investment Institute. Ira is at BI headquarters in Prince of New Jersey. Veronica is in Saint Louis hey Ara, I want to start with you, how did the FED do you think on messaging and in assessing today's current US economic backdrop and what it needs in terms of monetary policy? And I am curious did it filmore hawkish? Did it feel more duvish? What was your read?

So?

So?

Well, we have a natural language processing model that parses all the words and language from all of the opening statements, and this one was incredibly neutral, and it had been somewhat dubvish last month, and you know, being as neutral as neutral can be, it was a little bit surprising maybe to see the treasury market rally a little bit and also bowl steepened. So before the Jay Powell started to speak, treasury yields were higher by a little bit on the day, and then we rallied about ten basis points in two year yields, you know, soon after he started to speak, So the market certainly took him as dubvish.

Well, we have a natural language processing model that parses all the words and language from all of the opening statements, and this one was incredibly neutral, and it had been somewhat dubvish last month, and you know, being as neutral as neutral can be, it was a little bit surprising maybe to see the treasury market rally a little bit and also bowl steepened. So before the Jay Powell started to speak, treasury yields were higher by a little bit on the day, and then we rallied about ten basis points in two year yields, you know, soon after he started to speak, So the market certainly took him as dubvish.

He wasn't hawkish by any stretch of the imagination.

He wasn't hawkish by any stretch of the imagination.

The one thing that I think is interesting is the dop plot. And you know, we thought that maybe the median dot would move down a little bit.

The one thing that I think is interesting is the dop plot. And you know, we thought that maybe the median dot would move down a little bit.

It didn't. It stayed the same, So this is pretty unusual for.

It didn't. It stayed the same, So this is pretty unusual for.

The market actually to rally like it did, or the rate market to rally like it did when the Fed didn't move the.

The market actually to rally like it did, or the rate market to rally like it did when the Fed didn't move the.

Dots well, Ira, I wanted to talk a little bit about that, because it didn't seem like there was any certainty with regard to the Federal reserves economic outlook. We heard as much from Mike McKee on Bloomberg TV and Bloomberg Radio a little earlier. The Fed doesn't really know where we are. Why does the market think it knows where we are?

Dots well, Ira, I wanted to talk a little bit about that, because it didn't seem like there was any certainty with regard to the Federal reserves economic outlook. We heard as much from Mike McKee on Bloomberg TV and Bloomberg Radio a little earlier. The Fed doesn't really know where we are. Why does the market think it knows where we are?

Well, the market has to price something, right, So I think that the market probably took what the FED said, Not so much that they're necessarily the Fed's going to be hawkish or duvish, but I think one of the things is that the market might be thinking, hey, the Fed might make a policy mistake here because we are seeing a slowdown. But the FED and the FED dots are suggesting they're not going to cut rates very quickly and certainly not in the near term. And you really saw that rally pick up after j. Powell mentioned once again that he thought that they could that they could be patient and they didn't have to be in a hurry. I mean the exact words were, we're not in a hurry to make a rate adjustment, So that means we're here probably for another three to six months at least on the FED fundt rate.

Well, the market has to price something, right, So I think that the market probably took what the FED said, Not so much that they're necessarily the Fed's going to be hawkish or duvish, but I think one of the things is that the market might be thinking, hey, the Fed might make a policy mistake here because we are seeing a slowdown. But the FED and the FED dots are suggesting they're not going to cut rates very quickly and certainly not in the near term. And you really saw that rally pick up after j. Powell mentioned once again that he thought that they could that they could be patient and they didn't have to be in a hurry. I mean the exact words were, we're not in a hurry to make a rate adjustment, So that means we're here probably for another three to six months at least on the FED fundt rate.

Bronick, I want to bring you into this conversation in terms of markets. We've just been talking about this with IRA. I mean, we certainly did see equity markets Riley were off our highs of the session. What's the investor read on this decision Fed commentary? Do you feel like investors have it right and it has anything that we got from the FED share and from the FOMC today in its decision and commentary and revised outlook, has it changed your investment outlook?

Bronick, I want to bring you into this conversation in terms of markets. We've just been talking about this with IRA. I mean, we certainly did see equity markets Riley were off our highs of the session. What's the investor read on this decision Fed commentary? Do you feel like investors have it right and it has anything that we got from the FED share and from the FOMC today in its decision and commentary and revised outlook, has it changed your investment outlook?

I think that investors are really looking at the kind of best case scenario growth is going to slow enough to afford the FED to do you know, two or more cuts this year? And I think that's a little bit too optimistic. So the market may have been a little bit too optimistic today in response to this data or in response to what the FED has said, and I think that it's you know, more realistic to expect maybe one cut this year. And I think that the risk is a little bit more on the side that there might not be a cut this year versus two or more cuts. So I think it's just another example of the market kind of taking what it wants from what Pal says, taking what it wants from what the FED has shown us, and hoping for that best case scenario.

I think that investors are really looking at the kind of best case scenario growth is going to slow enough to afford the FED to do you know, two or more cuts this year? And I think that's a little bit too optimistic. So the market may have been a little bit too optimistic today in response to this data or in response to what the FED has said, and I think that it's you know, more realistic to expect maybe one cut this year. And I think that the risk is a little bit more on the side that there might not be a cut this year versus two or more cuts. So I think it's just another example of the market kind of taking what it wants from what Pal says, taking what it wants from what the FED has shown us, and hoping for that best case scenario.

I mean, what was the most important part of what we got from the FED Chair of Veronica in your view today?

I mean, what was the most important part of what we got from the FED Chair of Veronica in your view today?

Yeah, I think what was really interesting were his thoughts around the consumer and how that might impact future economic data. I think that's something that's becoming more and more important, just considering how important that consumer spending is to driving our economy, and so the FED is watching really closely all of these sentiment surveys that have come out with consumers feeling uncertain about their ability to continue to spend. We haven't necessarily seen that flowing through very strongly in any of the heart data, but it's something we're watching very closely, and I think it's something that the FED is watching very closely as well.

Yeah, I think what was really interesting were his thoughts around the consumer and how that might impact future economic data. I think that's something that's becoming more and more important, just considering how important that consumer spending is to driving our economy, and so the FED is watching really closely all of these sentiment surveys that have come out with consumers feeling uncertain about their ability to continue to spend. We haven't necessarily seen that flowing through very strongly in any of the heart data, but it's something we're watching very closely, and I think it's something that the FED is watching very closely as well.

Ye, Eric, come on back in here. Given what we heard from Fetcho J. Powell today, and we think about sort of the upcoming economic data that we get, what is the next catalyst that you have your eye on.

Ye, Eric, come on back in here. Given what we heard from Fetcho J. Powell today, and we think about sort of the upcoming economic data that we get, what is the next catalyst that you have your eye on.

So you know, we're like in this weird place.

So you know, we're like in this weird place.

So we do get the PC deflator next week, and you know, I'm not sure that that's really going to matter that a whole lot because we kind of know what it is, given we've gotten the inputs to that. So it's going to wind up being things like some of the survey data, the ISM data that we get in two weeks, plus the payroll report obviously is the big one. I think something else that's going to be interesting is the implementation of the slowing of runoffs. So you know, it hasn't gotten a lot of attention, only had one question at the very end of the press conference, but the Federal Reserve is again having the amount of quantitative tightening it's doing and it's only going to have about twenty billion dollars a run off come April first, And I think that that's something that is kind of flying under the radar. And how will that affect liquidity and markets once that's implemented, I think will be an interesting thing to look out for.

So we do get the PC deflator next week, and you know, I'm not sure that that's really going to matter that a whole lot because we kind of know what it is, given we've gotten the inputs to that. So it's going to wind up being things like some of the survey data, the ISM data that we get in two weeks, plus the payroll report obviously is the big one. I think something else that's going to be interesting is the implementation of the slowing of runoffs. So you know, it hasn't gotten a lot of attention, only had one question at the very end of the press conference, but the Federal Reserve is again having the amount of quantitative tightening it's doing and it's only going to have about twenty billion dollars a run off come April first, And I think that that's something that is kind of flying under the radar. And how will that affect liquidity and markets once that's implemented, I think will be an interesting thing to look out for.

Are you already looking forward to the main meeting? Ira?

Are you already looking forward to the main meeting? Ira?

I'm looking for I look forward to every meeting, but we know we get the minutes between, then you know the minutes will be really interesting because there was a lot to unpack in this meeting, in this meeting, so the minutes could be really an interesting read when we get them in three weeks.

I'm looking for I look forward to every meeting, but we know we get the minutes between, then you know the minutes will be really interesting because there was a lot to unpack in this meeting, in this meeting, so the minutes could be really an interesting read when we get them in three weeks.

I was gonna say, Caroly, he's not as boring as you and me where we're you know, we're just like already looking forward to the May meeting. Hey, Ira, before we let you go, what was one question that you didn't get answered from j Powell today?

I was gonna say, Caroly, he's not as boring as you and me where we're you know, we're just like already looking forward to the May meeting. Hey, Ira, before we let you go, what was one question that you didn't get answered from j Powell today?

Yeah? I think it was a little bit about their.

Yeah? I think it was a little bit about their.

About the balance sheet and how they see the balance sheet reacting with the economy.

About the balance sheet and how they see the balance sheet reacting with the economy.

He has been asked that before, but it's been a little while.

He has been asked that before, but it's been a little while.

And given that they that they did take action today by slowing the pace of asset runoff, that I think that can be pretty important. And he wasn't asked about the other side of the balance sheet, right, So the asset runoff occurs and then eventually we're going to have a time when there's not enough liquidity, and we know that there's been issues with the standing repo facility and some of the ways that they conduct liquidity activities and actions, and he wasn't asked at all about that either, So I would be really interested to, you know, kind of dig into those weeds because this is the plumbing of the entire financial economy that we have. So if the financial economy, the repo market, and the funding markets break, everything else comes crashing down, as we saw in two thousand and eight, right, So we have to make sure that the FED has the tools in order to handle that once we get to the lowest comfortable level of reserves.

And given that they that they did take action today by slowing the pace of asset runoff, that I think that can be pretty important. And he wasn't asked about the other side of the balance sheet, right, So the asset runoff occurs and then eventually we're going to have a time when there's not enough liquidity, and we know that there's been issues with the standing repo facility and some of the ways that they conduct liquidity activities and actions, and he wasn't asked at all about that either, So I would be really interested to, you know, kind of dig into those weeds because this is the plumbing of the entire financial economy that we have. So if the financial economy, the repo market, and the funding markets break, everything else comes crashing down, as we saw in two thousand and eight, right, So we have to make sure that the FED has the tools in order to handle that once we get to the lowest comfortable level of reserves.

It there so much appreciate both of you and your views on all of this. Bloomberg Intelligence Chief US Interest rates Strategist Ira Jersey and Veronica Willis, Global investment strategist at Wells Fargo Investments Institute.

It there so much appreciate both of you and your views on all of this. Bloomberg Intelligence Chief US Interest rates Strategist Ira Jersey and Veronica Willis, Global investment strategist at Wells Fargo Investments Institute.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Applecarplay and the Android Auto with the Bloomberg Business app, or watch us live on YouTube Timmy.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Applecarplay and the Android Auto with the Bloomberg Business app, or watch us live on YouTube Timmy.

Now, we think about Ryan Deetrick a lot, and we've been hoping to catch up with him. So we're so grateful that we're going to get to him in just a moment because we just want to remind everybody. He has been a US stock optimist and write in his market recession calls for the last couple of years. He nailed it back in twenty twenty three, also twenty twenty four, and when we talked to him with him in December he said the bull run had more room to run.

Now, we think about Ryan Deetrick a lot, and we've been hoping to catch up with him. So we're so grateful that we're going to get to him in just a moment because we just want to remind everybody. He has been a US stock optimist and write in his market recession calls for the last couple of years. He nailed it back in twenty twenty three, also twenty twenty four, and when we talked to him with him in December he said the bull run had more room to run.

He did, however, early last month note that history shows us that as an Eagles Super Bowl victory could tank the stock market, something that was making the rounds on social media did note Karl that success for Philadelphia sports teams has previously been followed by trouble times in the US economy and markets. I mean, how do you even make sense of this stuff? It's like talk about somebody who, like, you know, reads astrological charts.

He did, however, early last month note that history shows us that as an Eagles Super Bowl victory could tank the stock market, something that was making the rounds on social media did note Karl that success for Philadelphia sports teams has previously been followed by trouble times in the US economy and markets. I mean, how do you even make sense of this stuff? It's like talk about somebody who, like, you know, reads astrological charts.

I don't know. I think you know, you never know where the market can take its cues from. So all right, let's see what Ryan has to say. He is back with us and he is chief market strategist at the RIA and also platform for advisors the Carson Group. He is with us. Where are you Ryan today?

I don't know. I think you know, you never know where the market can take its cues from. So all right, let's see what Ryan has to say. He is back with us and he is chief market strategist at the RIA and also platform for advisors the Carson Group. He is with us. Where are you Ryan today?

Cincinnati?

Cincinnati?

Cincinnati? So tell us that the Eagles one are we doomed?

Cincinnati? So tell us that the Eagles one are we doomed?

Well, that's a playful one. We don't blindly invest in that. But historically when a team from Philadelphia has won the World Series or Super Bowl, trouble has come for the stock market. Talk of two thousand and eight, you're talking the early eighties double recession. You've got the crash at twenty nine in there. Now, that's playful. You know, we're not getting two worked up on that. But the big question is is this surprising, right that we had some volatility? Second on, you got come on for a while, say we're pretty optimistic. But we've been also pointing out the first quarter of a post election years usually not that great. The first quarter after twenty percent gain usually not that great. The first quarter the last twenty years, stocks are actually negative for the year on average until like March sixteenth. March teenth set in March seventeenth, right where we bottomed, you know, potentially now and I guess welcome to March Madness said, oh, this is the radio, but I think I think I'm on YouTube. I've got my Xavier shirt on the Xavier Boy. I'm in Cincinnati. They played tonight in the first four up in dayton I'm going We're gonna take out Texas. Just wanted to say that, sorry to my friends at time.

Well, that's a playful one. We don't blindly invest in that. But historically when a team from Philadelphia has won the World Series or Super Bowl, trouble has come for the stock market. Talk of two thousand and eight, you're talking the early eighties double recession. You've got the crash at twenty nine in there. Now, that's playful. You know, we're not getting two worked up on that. But the big question is is this surprising, right that we had some volatility? Second on, you got come on for a while, say we're pretty optimistic. But we've been also pointing out the first quarter of a post election years usually not that great. The first quarter after twenty percent gain usually not that great. The first quarter the last twenty years, stocks are actually negative for the year on average until like March sixteenth. March teenth set in March seventeenth, right where we bottomed, you know, potentially now and I guess welcome to March Madness said, oh, this is the radio, but I think I think I'm on YouTube. I've got my Xavier shirt on the Xavier Boy. I'm in Cincinnati. They played tonight in the first four up in dayton I'm going We're gonna take out Texas. Just wanted to say that, sorry to my friends at time.

Okay, that's okay.

Okay, that's okay.

You can make market predictions and you can also make your bracket predictions.

You can make market predictions and you can also make your bracket predictions.

As we're going.

As we're going.

Ryan, So you did say, and I want to make sure you said this, you said that we did bottom for this cycle?

Ryan, So you did say, and I want to make sure you said this, you said that we did bottom for this cycle?

Is that right?

Is that right?

Well? I mean, boy, what put some pressure on me? But yeah, we think we did. I mean, listen, there's a couple of ways to look at this. We had a regular ten percent correction, didn't have one last year, right, All the fear came up when I took a look at previous twelve times the market went into a correction but did not go into a bear market. That's our base case. We do not see a bear market. Tim five of those times you bottomed the day you went into a correction, so that'd be last Thursday. And everybody was very bared up last Thursday, rightfully, so a lot of scary headlines. And then we had that back to back ninety percent up days on the S and P five hundreds and ninety percent of the stocks in the S and P five hundred of two days in a row. That historically is quite bolish. Right, six months later, you're up like fifteen percent on average, higher ten out of eleven times. That's just one data piece, But I think we had a buying thrust with extreme negativity, and now we're in the second half of March was historically pretty strong seasonally, and now we've got the FED. Listen, you guys talked about it. I know we can talk about a little more. Were they really that dubbish? I don't think so. But I think it was a relief for the market, And clearly we saw what yields did and in the market in general. But hey, you know, we're not going to complain after the run we had.

Well? I mean, boy, what put some pressure on me? But yeah, we think we did. I mean, listen, there's a couple of ways to look at this. We had a regular ten percent correction, didn't have one last year, right, All the fear came up when I took a look at previous twelve times the market went into a correction but did not go into a bear market. That's our base case. We do not see a bear market. Tim five of those times you bottomed the day you went into a correction, so that'd be last Thursday. And everybody was very bared up last Thursday, rightfully, so a lot of scary headlines. And then we had that back to back ninety percent up days on the S and P five hundreds and ninety percent of the stocks in the S and P five hundred of two days in a row. That historically is quite bolish. Right, six months later, you're up like fifteen percent on average, higher ten out of eleven times. That's just one data piece, But I think we had a buying thrust with extreme negativity, and now we're in the second half of March was historically pretty strong seasonally, and now we've got the FED. Listen, you guys talked about it. I know we can talk about a little more. Were they really that dubbish? I don't think so. But I think it was a relief for the market, And clearly we saw what yields did and in the market in general. But hey, you know, we're not going to complain after the run we had.

Wait, so net net you also said we would be upper around twenty percent this year in US stocks, So you do still believe that.

Wait, so net net you also said we would be upper around twenty percent this year in US stocks, So you do still believe that.

Well, our well let's see here what we was back in December.

Well, our well let's see here what we was back in December.

That was back in December.

That was back in December.

Well understood. Yeah, we came out early this year with between twelve and fifteen percent in the United States. So we think and we think that's very likely still, Carol, Now what we're doing with the money we run, Well, we've we've we've been in gold. She whiz. I think April of twenty twenty three added some more gold. We were very very overweight US stocks for a while come up with you. But we've kind of done some tinkering, if you will, with the models we run for A Carson Partners. We've got some treasuries for the first time in a while. We do have about a twenty percent allocation to international stocks, but we're overweight equities and still like that's the way to go. But you know, we think the other parts can do well. But to answer your specific question, yeah, we think you know, stock market, I don't know what we're down now after today's rally three or four percent for the year, we think it can still hit double digits, which which sounds like a long way away, but it's very possible. Ryan.

Well understood. Yeah, we came out early this year with between twelve and fifteen percent in the United States. So we think and we think that's very likely still, Carol, Now what we're doing with the money we run, Well, we've we've we've been in gold. She whiz. I think April of twenty twenty three added some more gold. We were very very overweight US stocks for a while come up with you. But we've kind of done some tinkering, if you will, with the models we run for A Carson Partners. We've got some treasuries for the first time in a while. We do have about a twenty percent allocation to international stocks, but we're overweight equities and still like that's the way to go. But you know, we think the other parts can do well. But to answer your specific question, yeah, we think you know, stock market, I don't know what we're down now after today's rally three or four percent for the year, we think it can still hit double digits, which which sounds like a long way away, but it's very possible. Ryan.

Are you trimming Are you trimming gold and adding to international equities? Are you adding to US equities right now? What exactly is your team doing?

Are you trimming Are you trimming gold and adding to international equities? Are you adding to US equities right now? What exactly is your team doing?

Yeah? Great, great question there. So as of now, no, I mean gold is it is. It's a monster, and it's incredible how well it's done. What we've done. We've actually gone to some low vall. Right, we sold some high ball stocks earlier this year, went into low vall because again, is this cycle ages maybe more volatility. To be honest, we weren't crazy about the megacap or MAG seven. So we're trying to say MAG seven. I know, Kim, I want most of the last year saying more neutral tech. Sometimes we get weird looks when we said that, But now we're seeing this rotation, and again the life blood of bull market is rotation, right, So tech isn't doing quite as well. That's okay. We're seeing leadership from other areas, but areas like low volatility industrials, financials, we think those are going to continue to do pretty well, and honestly they have. I know financials had that big pullback recently recently, but we still pretty optimistic that that's a group that's probably stilling to lead this. Financials.

Yeah? Great, great question there. So as of now, no, I mean gold is it is. It's a monster, and it's incredible how well it's done. What we've done. We've actually gone to some low vall. Right, we sold some high ball stocks earlier this year, went into low vall because again, is this cycle ages maybe more volatility. To be honest, we weren't crazy about the megacap or MAG seven. So we're trying to say MAG seven. I know, Kim, I want most of the last year saying more neutral tech. Sometimes we get weird looks when we said that, But now we're seeing this rotation, and again the life blood of bull market is rotation, right, So tech isn't doing quite as well. That's okay. We're seeing leadership from other areas, but areas like low volatility industrials, financials, we think those are going to continue to do pretty well, and honestly they have. I know financials had that big pullback recently recently, but we still pretty optimistic that that's a group that's probably stilling to lead this. Financials.

You know, we just talked about with our TV colleagues. We made fun of them, but you know, because we had a fun story to chat about, but they had a serious one about Oppenheimer cutting Goldman, Jeffreys and Carlisle on the M and A outlook, noting that the M and A rebound likely to lay or canceled. There were a lot of expectations coming into this Trump market environment and this administration President Trump, that it was just going to be go, go go in terms of the business environment, in the market environment, it's not exactly playing out like everybody expected. I don't think, you know, trump first term is exactly playing out like Trump's second term, at least so far. So you know, if tariff's day, if new policies come, if regulations maybe aren't so friendly, if M and A doesn't come back, I mean, is that a very different market environment than in your view. It may be your expectations for twelve or fifteen percent gains on the S and P are not then realistic.

You know, we just talked about with our TV colleagues. We made fun of them, but you know, because we had a fun story to chat about, but they had a serious one about Oppenheimer cutting Goldman, Jeffreys and Carlisle on the M and A outlook, noting that the M and A rebound likely to lay or canceled. There were a lot of expectations coming into this Trump market environment and this administration President Trump, that it was just going to be go, go go in terms of the business environment, in the market environment, it's not exactly playing out like everybody expected. I don't think, you know, trump first term is exactly playing out like Trump's second term, at least so far. So you know, if tariff's day, if new policies come, if regulations maybe aren't so friendly, if M and A doesn't come back, I mean, is that a very different market environment than in your view. It may be your expectations for twelve or fifteen percent gains on the S and P are not then realistic.

No, those are some great points. I will say. I heard you guys talking about Denny's and sausage and pancakes where I came on, I was kind of jealous. I didn't you have to talk about that. I love Denny's obviously, but you get in you get into it here. And I think what people thought when when President Trump won was You're going to get a couple things right, deregulation, better taxes, and tariffs in that order. We're not getting in that order, as we all know. You know, so I if the animal spirits is a popular word coming into this year, clearly those have been screeched to a halt. If you will, when you look at some of the sentiment polls, soft soft data centiment polls and things like that. But again, I guess you could say we're optimistic that that. Yes, we're all worked up over tariffs, and rightfully so. April second, as everybody knows, is that big day. But the market. I think the markets can go up on good news. Marts can go up on bad news. I mean five years ago now bad news.

No, those are some great points. I will say. I heard you guys talking about Denny's and sausage and pancakes where I came on, I was kind of jealous. I didn't you have to talk about that. I love Denny's obviously, but you get in you get into it here. And I think what people thought when when President Trump won was You're going to get a couple things right, deregulation, better taxes, and tariffs in that order. We're not getting in that order, as we all know. You know, so I if the animal spirits is a popular word coming into this year, clearly those have been screeched to a halt. If you will, when you look at some of the sentiment polls, soft soft data centiment polls and things like that. But again, I guess you could say we're optimistic that that. Yes, we're all worked up over tariffs, and rightfully so. April second, as everybody knows, is that big day. But the market. I think the markets can go up on good news. Marts can go up on bad news. I mean five years ago now bad news.

But there's good news, there's good news, there's good news, there's bad news, there's bad news. Do you feel comfortable in this market environment that we're not gonna have a lot of surprises and unexpected things coming our way?

But there's good news, there's good news, there's good news, there's bad news, there's bad news. Do you feel comfortable in this market environment that we're not gonna have a lot of surprises and unexpected things coming our way?

Well, put it this way, we do because we're still overweight equities and the unconstrained models we run, we're about seventy six percent equities, sixty percent is considered, you know, kind of right down the middle. So yes, we're overweight. And again a lot of it has to do with that over the top negative centiment. I'm sure other guests have talked about some of these things. We saw a huge Potz to call ratio spike last Thursday, But the one that AAII Cinnamon poll. I know this flaws in this one, but three weeks in a row, fifty five percent bears. All right, we haven't seen that since the March two thousand and nine low. It's just the random indicator. I have just hearing from people haven't heard from for years, but are very worried on what we're calling a kind of run of the mill normal ten percent correction. You tendesseee A lot of years that could be bullish with those lowered expectations, and today the Fed with it really that dubbish, Honest to goodness. I don't know if they really were, but they weren't hawkish and the market liked it.

Well, put it this way, we do because we're still overweight equities and the unconstrained models we run, we're about seventy six percent equities, sixty percent is considered, you know, kind of right down the middle. So yes, we're overweight. And again a lot of it has to do with that over the top negative centiment. I'm sure other guests have talked about some of these things. We saw a huge Potz to call ratio spike last Thursday, But the one that AAII Cinnamon poll. I know this flaws in this one, but three weeks in a row, fifty five percent bears. All right, we haven't seen that since the March two thousand and nine low. It's just the random indicator. I have just hearing from people haven't heard from for years, but are very worried on what we're calling a kind of run of the mill normal ten percent correction. You tendesseee A lot of years that could be bullish with those lowered expectations, and today the Fed with it really that dubbish, Honest to goodness. I don't know if they really were, but they weren't hawkish and the market liked it.

Ryan twenty seconds left. What makes you change your view that this will be an up year for the equity ends?

Ryan twenty seconds left. What makes you change your view that this will be an up year for the equity ends?

Okay? Yeah, it turn us a little more cautious or negative. I think of more of a spike in credit spreads. Right, we are not seeing stress in the credit markets. Some yes, but Tim, we're just simply not seeing that. There's less stress now than it was in March. I'm sorry in August when we had that very scary un carry trade on wine. So that's the thing we watch. We're not seeing it yet.

Okay? Yeah, it turn us a little more cautious or negative. I think of more of a spike in credit spreads. Right, we are not seeing stress in the credit markets. Some yes, but Tim, we're just simply not seeing that. There's less stress now than it was in March. I'm sorry in August when we had that very scary un carry trade on wine. So that's the thing we watch. We're not seeing it yet.

All right, can leave with Dietrich.

All right, can leave with Dietrich.

Yeah, go ahead, Carol go.

Yeah, go ahead, Carol go.

Behavior always fun, always fun. You keep us on our toes. Ryan Dietrich, chief market strategist at the Carson Group.

Behavior always fun, always fun. You keep us on our toes. Ryan Dietrich, chief market strategist at the Carson Group.

This is the Bloomberg Business Week Podcast. Listen live each weekday starting a two pm Eastern on applecar Play and the Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa played Bloomberg eleven thirty.

This is the Bloomberg Business Week Podcast. Listen live each weekday starting a two pm Eastern on applecar Play and the Android Auto with the Bloomberg Business App. You can also listen live on Amazon Alexa from our flagship New York station Just Say Alexa played Bloomberg eleven thirty.

I wanted to get to some of the big news of the day. President Trump started phone talks today with Ukrainian counterpart Voladimir Zelenski, a day after the US president's conversation with Vladimir Putin failed to win Russia's commitment to a thirty day ceasefire in Ukraine. Now earlier today on Bloomberg Surveillance on TV and radio, President Trump Special Envoy Steve Witkoff said that he believes President Putin is operating in good faith and that an end of the war could be soon.

I wanted to get to some of the big news of the day. President Trump started phone talks today with Ukrainian counterpart Voladimir Zelenski, a day after the US president's conversation with Vladimir Putin failed to win Russia's commitment to a thirty day ceasefire in Ukraine. Now earlier today on Bloomberg Surveillance on TV and radio, President Trump Special Envoy Steve Witkoff said that he believes President Putin is operating in good faith and that an end of the war could be soon.

On Monday, we actually have the technical teams going in why because that's what we're down to. We don't need to have larging the larger overarching discussions that's been had and it was completed yesterday between the two leaders. They agreed on a pathway to to some ceasefire conditions today and to a full on cease fire that will be negotiated over the coming days. I actually think in a couple of weeks we're going to get.

On Monday, we actually have the technical teams going in why because that's what we're down to. We don't need to have larging the larger overarching discussions that's been had and it was completed yesterday between the two leaders. They agreed on a pathway to to some ceasefire conditions today and to a full on cease fire that will be negotiated over the coming days. I actually think in a couple of weeks we're going to get.

To it again. That's Steve Whitkoff, President Trump Special Envoy earlier on Bloomberg Surveillance. We also heard yesterday from the White House after that two and a half hour call between Presidents Trump and Putin, the White House read out that the two leaders agree that a future with an improved bilateral relationship between the United States and Russia has huge upside. This includes enormous economic deals and geopolitical stability when peace has been achieved. So the question is, can there be enormous economic deals business deals between the two nations? And if this feels a little bit like dejevou, you are right. A new book outlooks at just that and the recent experiment in capitalism from the nineteen nineties until twenty twenty two when global companies set up shop in Russia. Writing about that is Charles Hecker. He's a journalist and risk management consultant. His book just out this month is zero Sum, the arc of inter national business in Russia. He has spent forty years working in the Soviet Union and Russia, and he joins Tim and me on this Wednesday. So delighted to have you here with us. Charles. I do want to first ask you about what's been going on over the last couple of days and the conversations between the presidents of the United States, Ukraine and Russia. Does this look like to you like lasting diplomacy being worked out, peace negotiations being worked out. What's your read, especially with your knowledge of Russia and Putin?

To it again. That's Steve Whitkoff, President Trump Special Envoy earlier on Bloomberg Surveillance. We also heard yesterday from the White House after that two and a half hour call between Presidents Trump and Putin, the White House read out that the two leaders agree that a future with an improved bilateral relationship between the United States and Russia has huge upside. This includes enormous economic deals and geopolitical stability when peace has been achieved. So the question is, can there be enormous economic deals business deals between the two nations? And if this feels a little bit like dejevou, you are right. A new book outlooks at just that and the recent experiment in capitalism from the nineteen nineties until twenty twenty two when global companies set up shop in Russia. Writing about that is Charles Hecker. He's a journalist and risk management consultant. His book just out this month is zero Sum, the arc of inter national business in Russia. He has spent forty years working in the Soviet Union and Russia, and he joins Tim and me on this Wednesday. So delighted to have you here with us. Charles. I do want to first ask you about what's been going on over the last couple of days and the conversations between the presidents of the United States, Ukraine and Russia. Does this look like to you like lasting diplomacy being worked out, peace negotiations being worked out. What's your read, especially with your knowledge of Russia and Putin?

I think right now somewhere we're between two steps forward, one step back, or maybe even one step forward two steps back. I mean from today's conversation between President Trump and President Zelenski, we can at least draw the conclusion that the two presidents are once again sort of speaking regularly, speaking normally, and without the anger and the hostility that we saw of a couple of weeks ago that really set this process back dramatically.

I think right now somewhere we're between two steps forward, one step back, or maybe even one step forward two steps back. I mean from today's conversation between President Trump and President Zelenski, we can at least draw the conclusion that the two presidents are once again sort of speaking regularly, speaking normally, and without the anger and the hostility that we saw of a couple of weeks ago that really set this process back dramatically.

So we have a bit of a victory there.

So we have a bit of a victory there.

In that the two presidents are communicating as far as the Act Will Peace Agreement or the cease fire between Russia and Ukraine. Both sides are already accusing each other of violating that. This morning, so there were attacks allegedly from Russia on Ukrainian energy installations, and Russia says that Ukraine is doing the exact same thing back.

In that the two presidents are communicating as far as the Act Will Peace Agreement or the cease fire between Russia and Ukraine. Both sides are already accusing each other of violating that. This morning, so there were attacks allegedly from Russia on Ukrainian energy installations, and Russia says that Ukraine is doing the exact same thing back.

So when Steve Woodkoff says he believes that, I think he said to some extent, well, some of these attacks were already happening, or I don't know. I guess the devil and timing is always in the detail, or the devil's in the details. He believes that President Putin is acting in good faith. Your knowledge of President Putin and how he does things, do you think he is well.

So when Steve Woodkoff says he believes that, I think he said to some extent, well, some of these attacks were already happening, or I don't know. I guess the devil and timing is always in the detail, or the devil's in the details. He believes that President Putin is acting in good faith. Your knowledge of President Putin and how he does things, do you think he is well.

One of President Trump's predecessors in the White House, when talking about Russia, always said trust, but verify, And you know, there hasn't been a whole lot of verification going on lately. And what we do know is that President Putin has in the past gone back on his word when it comes to holding off on attacking Ukraine. And so with what happened this morning, and with the fact that the timing, as you suggest, is still incredibly vague on when this is all going to start and when the ceasefire will kick off. We still don't know, first of all, what President Putin's word is and when or if he'll start to obey it.

One of President Trump's predecessors in the White House, when talking about Russia, always said trust, but verify, And you know, there hasn't been a whole lot of verification going on lately. And what we do know is that President Putin has in the past gone back on his word when it comes to holding off on attacking Ukraine. And so with what happened this morning, and with the fact that the timing, as you suggest, is still incredibly vague on when this is all going to start and when the ceasefire will kick off. We still don't know, first of all, what President Putin's word is and when or if he'll start to obey it.

So I just want to get your thoughts about where we are in your view, if this actually is the beginning of the end of the war. You mentioned that both sides are already not agreeing to what had been agreed upon, but you also said that it's good news that the US is speaking to both of these parties. Do you actually think this is the beginning of the end of the war.

So I just want to get your thoughts about where we are in your view, if this actually is the beginning of the end of the war. You mentioned that both sides are already not agreeing to what had been agreed upon, but you also said that it's good news that the US is speaking to both of these parties. Do you actually think this is the beginning of the end of the war.

It might be.

It might be.

I mean, I think if this is the beginning of the end of the war, it's going to take a lot longer than any of us anticipate, and a lot longer than any of the actors in these negotiations are telling us. I mean, we know, look that the strategic driver for Putin behind all of this is to keep fighting. So when he says that he's engaged in ceasefire negotiations, when he says this he's interested in a ceasefire, he's really not being entirely genuine with his counter parties, because really what Putin wants to do is to continue to press on. He thinks he's winning on the ground in Ukraine. His progress has been a little bit better than previously, and right now there's very little incentive for him to stop.

I mean, I think if this is the beginning of the end of the war, it's going to take a lot longer than any of us anticipate, and a lot longer than any of the actors in these negotiations are telling us. I mean, we know, look that the strategic driver for Putin behind all of this is to keep fighting. So when he says that he's engaged in ceasefire negotiations, when he says this he's interested in a ceasefire, he's really not being entirely genuine with his counter parties, because really what Putin wants to do is to continue to press on. He thinks he's winning on the ground in Ukraine. His progress has been a little bit better than previously, and right now there's very little incentive for him to stop.

So that's the perfect place to sort of transition to business in Russia over the last few decades, something that you've been writing about and that you know a lot about. If we were talking to you three years ago, we'd be talking to you about all the American businesses that have announced that they've stopped doing business in Russia as a result of Russia's invasion of Ukraine. I think a lot of people then would have thought this is going to have huge economic consequences and effects on the country and might cause Russia to think twice about what it's doing militarily.

So that's the perfect place to sort of transition to business in Russia over the last few decades, something that you've been writing about and that you know a lot about. If we were talking to you three years ago, we'd be talking to you about all the American businesses that have announced that they've stopped doing business in Russia as a result of Russia's invasion of Ukraine. I think a lot of people then would have thought this is going to have huge economic consequences and effects on the country and might cause Russia to think twice about what it's doing militarily.

That obviously didn't happen, right.

That obviously didn't happen, right.

Well, exactly right.

Well, exactly right.

I mean, if we were talking about this precisely three years ago, what we would be talking about is absolute sort of streams of Western executives stampedeading towards Moscow's airports, among other places, trying to get out of the country. And this was exactly three years ago, a time when international offices, European and American offices were physically emptying out of expats and of Russian employees who were desperate to leave the country because the full scale engage invasion was kicking off. And so if we look at it now, you know, the US business community is looking at the negotiations between Trump and Putin and they sense that sanctions relief is in the air. And there are active conversations now in the companies that left Russia three years ago about going back. Not everyone will do it, but everyone is talking about it.

I mean, if we were talking about this precisely three years ago, what we would be talking about is absolute sort of streams of Western executives stampedeading towards Moscow's airports, among other places, trying to get out of the country. And this was exactly three years ago, a time when international offices, European and American offices were physically emptying out of expats and of Russian employees who were desperate to leave the country because the full scale engage invasion was kicking off. And so if we look at it now, you know, the US business community is looking at the negotiations between Trump and Putin and they sense that sanctions relief is in the air. And there are active conversations now in the companies that left Russia three years ago about going back. Not everyone will do it, but everyone is talking about it.

Yet you know, you're right, or you note that in like one generation, we saw Russia open its doors and then close them again. So I mean what ultimately rules in Russia? Is it m is it business? Is it politics?

Yet you know, you're right, or you note that in like one generation, we saw Russia open its doors and then close them again. So I mean what ultimately rules in Russia? Is it m is it business? Is it politics?

Well, you're right, I mean the last generation in Russia was one of the biggest experiments in global capitalism ever. You had this emerging market opening up during a time when companies were globalizing rapidly, and everyone rushed into Russia following the collapse of the Soviet Union. You know, for companies to go back, it is partially all about money, but it's about that and a lot more.

Well, you're right, I mean the last generation in Russia was one of the biggest experiments in global capitalism ever. You had this emerging market opening up during a time when companies were globalizing rapidly, and everyone rushed into Russia following the collapse of the Soviet Union. You know, for companies to go back, it is partially all about money, but it's about that and a lot more.

It's about a change.

It's about a change.

To the risk reward equation.

To the risk reward equation.

And in the nineteen nineties, just about anything that you did in Russia, almost any kind of Western business activity made money. It was really like, you know, plant any seed and it would grow. That is no longer the case. Companies that want to go back to Russia or are thinking about going back, are not going back to the Russia of the nineteen nineties, not going back to the real go go days of the two thousands.

And in the nineteen nineties, just about anything that you did in Russia, almost any kind of Western business activity made money. It was really like, you know, plant any seed and it would grow. That is no longer the case. Companies that want to go back to Russia or are thinking about going back, are not going back to the Russia of the nineteen nineties, not going back to the real go go days of the two thousands.

It's very different now.

It's very different now.

Well, talk to us about this, and this is something Tim and I talked about with Angelus, who has understands Putin, understands Russia too, And I said, you know, what is today's Russia? What is Putin's Russia? Is it a great power? Is it a great economy? You know, what are their businesses, their alliances? Like what do we need to know? And some of it I asked facetiously when I said is it a great economy? But I mean, what is it today?

Well, talk to us about this, and this is something Tim and I talked about with Angelus, who has understands Putin, understands Russia too, And I said, you know, what is today's Russia? What is Putin's Russia? Is it a great power? Is it a great economy? You know, what are their businesses, their alliances? Like what do we need to know? And some of it I asked facetiously when I said is it a great economy? But I mean, what is it today?

Well, you know, there were a lot of people, not Angelis Stunt, who is one of my idols in the field of Soviet and Russian studies, from way back in the day. You know, there were people that said that Russia was a gas station with nukes, and you know, that is a vast underestimation of Russia's role in the global economy, and we understood that when Russian gas and oil and all of that came under sanctions, or oil came under sanctions, and when the Europeans tried to chase gas out of their pipelines, we understood what happened to prices. We also understood what happened on global grain markets after the start of the full scale invasion. So Russia is a lot more plugged into the global economy than we ever thought, and perhaps even more than we think, particularly an area of precious metals, rare earth metals, critical minerals. These are places where Russia has significant strategic deposits that are useful not just to Russia but to everybody else around the world. So you know, there is reason to go back in There are companies that are thinking about it. But but the war lasted a lot longer and is lasting a lot longer than anybody ever thought, and enormous changes have taken place on the ground politically and economically in Russia. And if you're thinking of going about going back, you have to be thinking, well, what kind of Russia is waiting for us?

Well, you know, there were a lot of people, not Angelis Stunt, who is one of my idols in the field of Soviet and Russian studies, from way back in the day. You know, there were people that said that Russia was a gas station with nukes, and you know, that is a vast underestimation of Russia's role in the global economy, and we understood that when Russian gas and oil and all of that came under sanctions, or oil came under sanctions, and when the Europeans tried to chase gas out of their pipelines, we understood what happened to prices. We also understood what happened on global grain markets after the start of the full scale invasion. So Russia is a lot more plugged into the global economy than we ever thought, and perhaps even more than we think, particularly an area of precious metals, rare earth metals, critical minerals. These are places where Russia has significant strategic deposits that are useful not just to Russia but to everybody else around the world. So you know, there is reason to go back in There are companies that are thinking about it. But but the war lasted a lot longer and is lasting a lot longer than anybody ever thought, and enormous changes have taken place on the ground politically and economically in Russia. And if you're thinking of going about going back, you have to be thinking, well, what kind of Russia is waiting for us?

Well, what kind of what did Russian businesses Charles do to replace American businesses and Western businesses that left. We all saw stories of McDonald's, for example, pulling out. That was such a prominent example because of what happened in the when the fall of the Soviet Union happened, and that first McDonald's opened up in Russia. But we saw this sort of Russian version of McDonald's come in. What has been what has happened on the ground since American and Western businesses have left.

Well, what kind of what did Russian businesses Charles do to replace American businesses and Western businesses that left. We all saw stories of McDonald's, for example, pulling out. That was such a prominent example because of what happened in the when the fall of the Soviet Union happened, and that first McDonald's opened up in Russia. But we saw this sort of Russian version of McDonald's come in. What has been what has happened on the ground since American and Western businesses have left.

Yeah, a lot of different things have happened since since Western and American companies left, and that is that you're absolutely right to point out that a number of significant Western brands, including McDonald's, which everybody loves to look at when we're talking about Russia, but other companies like Starbucks, for example, had a massive presence in Russia, and they're gone too. They've been taken over by local Russian owners. They were sold when those two companies decided that they wanted out. And so what those companies have been doing has been winning, growing and maintaining market share and trying to sort of run businesses. And right now it's very difficult to understand whether the current owners of McDonald's or Starbucks or any of the other companies that left. You know how keen they are to sell those back to the people that they bought them for just a couple of years ago. The other thing that's happened on the market is that companies from non sanctioning countries have moved in, and that includes countries like Turkey and China. They've taken over market share. They've moved in, and it's going to be difficult for returning companies to dislodge them.

Yeah, a lot of different things have happened since since Western and American companies left, and that is that you're absolutely right to point out that a number of significant Western brands, including McDonald's, which everybody loves to look at when we're talking about Russia, but other companies like Starbucks, for example, had a massive presence in Russia, and they're gone too. They've been taken over by local Russian owners. They were sold when those two companies decided that they wanted out. And so what those companies have been doing has been winning, growing and maintaining market share and trying to sort of run businesses. And right now it's very difficult to understand whether the current owners of McDonald's or Starbucks or any of the other companies that left. You know how keen they are to sell those back to the people that they bought them for just a couple of years ago. The other thing that's happened on the market is that companies from non sanctioning countries have moved in, and that includes countries like Turkey and China. They've taken over market share. They've moved in, and it's going to be difficult for returning companies to dislodge them.

So it raises the question about initially why the companies left during the invasion. In your view, was it because it was seen as not ethical to do business and support a country that had this invasion, Was it because of American regulations or was it an actual business decision.

So it raises the question about initially why the companies left during the invasion. In your view, was it because it was seen as not ethical to do business and support a country that had this invasion, Was it because of American regulations or was it an actual business decision.

There were a few different decisions. In some cases, sanctions made it illegal to do business in Russia, and there were companies that just had to get out because there was no way that they could transact in Russia at all without violating sanctions. Other companies looked at the reputational risk of doing business in Russia, and you had significant external pressure on these companies saying why are you still in Russia? You're paying taxes to the Russian government. The Russian government is using that money to buy weapons to kill Ukrainians, So what are you doing doing there? Companies felt that reputational pressure and they left. And then there were companies that for whom it was easier to leave because maybe Russia wasn't that big a market, maybe they weren't doing all that well there anyway, and why bother with all of the difficulty of doing business in this kind of environment, and so they also packed up and left.

There were a few different decisions. In some cases, sanctions made it illegal to do business in Russia, and there were companies that just had to get out because there was no way that they could transact in Russia at all without violating sanctions. Other companies looked at the reputational risk of doing business in Russia, and you had significant external pressure on these companies saying why are you still in Russia? You're paying taxes to the Russian government. The Russian government is using that money to buy weapons to kill Ukrainians, So what are you doing doing there? Companies felt that reputational pressure and they left. And then there were companies that for whom it was easier to leave because maybe Russia wasn't that big a market, maybe they weren't doing all that well there anyway, and why bother with all of the difficulty of doing business in this kind of environment, and so they also packed up and left.

One of the things I want to ask you, and I thought about this, Charles. We are talking with Charles Hecker, journalist and risk management consultant. His book out this month, Zero Sum The Arc of International Business in Russia, spending some four decades in Russia and the former Soviet Union. You know, I think we think that introduce capitalism, introduced Western businesses, whether it's China, whether it's Russia, that these countries, these places will become liberal democracies. And here we are again seeing that it really doesn't work. So is it not going to work if we continue to get what's wrong with our thinking or why is it not working?

One of the things I want to ask you, and I thought about this, Charles. We are talking with Charles Hecker, journalist and risk management consultant. His book out this month, Zero Sum The Arc of International Business in Russia, spending some four decades in Russia and the former Soviet Union. You know, I think we think that introduce capitalism, introduced Western businesses, whether it's China, whether it's Russia, that these countries, these places will become liberal democracies. And here we are again seeing that it really doesn't work. So is it not going to work if we continue to get what's wrong with our thinking or why is it not working?

One of the lessons that we have to have learned earned on exiting Russia, is that the assumption we made, just as you said, Carol, the assumption that we made on the way in, that engaging with Russia economically and commercially and sending Big Max to Russia would transform the country somehow into a mirror image of the West, or into at least a sort of liberal democracy that we could get along with.

One of the lessons that we have to have learned earned on exiting Russia, is that the assumption we made, just as you said, Carol, the assumption that we made on the way in, that engaging with Russia economically and commercially and sending Big Max to Russia would transform the country somehow into a mirror image of the West, or into at least a sort of liberal democracy that we could get along with.

And you know, I think.

And you know, I think.

We've learned over the years, whether we're talking about Russia or we're talking about China for example, or other countries, that you know, eating Big Max doesn't make you a democrat, you know, little d democrat. And so you know, if companies once again go back to Russia and think, look, you know, we're going to be on the ground and we're going to give this a chance, and we think that Russia may reform, that's a mistaken assumption. And you know, we realize that perhaps a little bit too slowly. I don't want to be too judgmental about our experience in Russia over the past generation.

We've learned over the years, whether we're talking about Russia or we're talking about China for example, or other countries, that you know, eating Big Max doesn't make you a democrat, you know, little d democrat. And so you know, if companies once again go back to Russia and think, look, you know, we're going to be on the ground and we're going to give this a chance, and we think that Russia may reform, that's a mistaken assumption. And you know, we realize that perhaps a little bit too slowly. I don't want to be too judgmental about our experience in Russia over the past generation.

But it was a flawed assumption.

But it was a flawed assumption.

So President Trump seems to want to create economic ties between the US and Russia. Some say, you know, the diplomacy or lack thereof or whatever you want to call it that we've had between the US and Russia and President Putin so far has not created a better relationship. So maybe this could Is that even possible with your knowledge of President Putin, how he runs the country, his type of leadership. I mean, is there some good that could come out of this?

So President Trump seems to want to create economic ties between the US and Russia. Some say, you know, the diplomacy or lack thereof or whatever you want to call it that we've had between the US and Russia and President Putin so far has not created a better relationship. So maybe this could Is that even possible with your knowledge of President Putin, how he runs the country, his type of leadership. I mean, is there some good that could come out of this?

I think President Putin is going to remain resolutely hostile to the West going through the United States included, yes, absolutely, capitol W boldface letters. He is going to remain hostile to the West and the United States, and he will see them as enemy nations, and he will take a very skeptical view towards companies that come from those countries. And so he certainly doesn't believe that allowing Western companies into Russia or American companies into Russia is you know, an overwhelming good for the Russian economy or certainly for the Russian political system. And that's something that companies are going to have to manage and overcome and be extremely acutely aware of if or when they go back in tim.

I think President Putin is going to remain resolutely hostile to the West going through the United States included, yes, absolutely, capitol W boldface letters. He is going to remain hostile to the West and the United States, and he will see them as enemy nations, and he will take a very skeptical view towards companies that come from those countries. And so he certainly doesn't believe that allowing Western companies into Russia or American companies into Russia is you know, an overwhelming good for the Russian economy or certainly for the Russian political system. And that's something that companies are going to have to manage and overcome and be extremely acutely aware of if or when they go back in tim.

Ie, you get a quick one last question.

Ie, you get a quick one last question.

Choy, Yeah, Charles, would you recommend that companies just don't go back to Russia.

Choy, Yeah, Charles, would you recommend that companies just don't go back to Russia.

Companies are going to make up their minds about this based on how they view the risk reward decision. And look, there are companies out there in for example, the energy sector, in natural resources, in metals and minerals and mining that have really robust appetites for risk and cast iron stomachs for managing it. They will probably go back, and they're going to do it carefully. They've done this before. They're doing business in places like Iraq right now. So they'll go back to Russia and we'll see how they survive.

Companies are going to make up their minds about this based on how they view the risk reward decision. And look, there are companies out there in for example, the energy sector, in natural resources, in metals and minerals and mining that have really robust appetites for risk and cast iron stomachs for managing it. They will probably go back, and they're going to do it carefully. They've done this before. They're doing business in places like Iraq right now. So they'll go back to Russia and we'll see how they survive.

Listen, so love this. Hope you can get you back real soon, because we know that this is going to be certainly an ongoing and kind of story that will probably go on for a while. Charles, thank you so much. Collect with the book.

Listen, so love this. Hope you can get you back real soon, because we know that this is going to be certainly an ongoing and kind of story that will probably go on for a while. Charles, thank you so much. Collect with the book.

It's a pleasure. Thank you.

It's a pleasure. Thank you.

Pleasure is ours as well. Charles Hecker, journalist, risk management consultant. Book just out. It is called Zero Sum The Arch of International Business in Russia.

Pleasure is ours as well. Charles Hecker, journalist, risk management consultant. Book just out. It is called Zero Sum The Arch of International Business in Russia.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch US live on YouTube.

You're listening to the Bloomberg Business Week podcast. Catch us live weekday afternoons from two to five pm Eastern. Listen on Applecarplay and Android Auto with the Bloomberg Business app, or watch US live on YouTube.

Yes, Splashdown Crew nine back on Earth.

Yes, Splashdown Crew nine back on Earth.

Yes, indeed everybody, Yes, those two NASA astronauts whose planned short trip to space became one that left them in orbit for nine months. Yes, you know they are back on planet Earth. But Wilmore and Sonny Williams coming home to a United States though, that is a bit differently are different, I should say, it's got a new president, a new Republican controlled Congress, and a world that some would say is being turned upside down by new US policies. Now, those two NASA astronauts also returned to Earth in a SpaceX craft, which is, of course, you know, space X a part of the Elon Musk Empire. So too is Doze, the entity that is tasked with an ever widening mission to seemingly remake the US government, and that includes cuts and spending and in the federal workforce. So we thought it was time to do kind of a check on all things Elon and Tesla and SpaceX and Doze and more. To do that, we have back with us Bloomberg business Week columnist Max Chafkin. He is co host of the elon Ing podcast, author of the Contrarian Peter Teel and Silicon Valley's pursuit of power. Max is here in our Bloomberg Interactive Broker studio. Of course Tim out there in our San Francisco bureau. Max, good to have you here. We were talking going on, well, you know, we find we were thinking about Elon today and like he's in this kind of funny spot. He finally brings these two astronauts that I know NASA doesn't want us to use the word stranded, but we're stranded up in space. They were safe, but SpaceX brings him home. At the same time, you've got a judge, a federal judge ruling that most likely exercised unconstitutional power in the Trump and miss efforts to shutter the US agency that manages for an AID. I mean, there's so much going on, the highs and lows that seemed to be Elon. How do you because you continually have to kind of put it all together, makes sense? How do you put it all together?

Yes, indeed everybody, Yes, those two NASA astronauts whose planned short trip to space became one that left them in orbit for nine months. Yes, you know they are back on planet Earth. But Wilmore and Sonny Williams coming home to a United States though, that is a bit differently are different, I should say, it's got a new president, a new Republican controlled Congress, and a world that some would say is being turned upside down by new US policies. Now, those two NASA astronauts also returned to Earth in a SpaceX craft, which is, of course, you know, space X a part of the Elon Musk Empire. So too is Doze, the entity that is tasked with an ever widening mission to seemingly remake the US government, and that includes cuts and spending and in the federal workforce. So we thought it was time to do kind of a check on all things Elon and Tesla and SpaceX and Doze and more. To do that, we have back with us Bloomberg business Week columnist Max Chafkin. He is co host of the elon Ing podcast, author of the Contrarian Peter Teel and Silicon Valley's pursuit of power. Max is here in our Bloomberg Interactive Broker studio. Of course Tim out there in our San Francisco bureau. Max, good to have you here. We were talking going on, well, you know, we find we were thinking about Elon today and like he's in this kind of funny spot. He finally brings these two astronauts that I know NASA doesn't want us to use the word stranded, but we're stranded up in space. They were safe, but SpaceX brings him home. At the same time, you've got a judge, a federal judge ruling that most likely exercised unconstitutional power in the Trump and miss efforts to shutter the US agency that manages for an AID. I mean, there's so much going on, the highs and lows that seemed to be Elon. How do you because you continually have to kind of put it all together, makes sense? How do you put it all together?

Well, I think, of course, this SpaceX mission is a demonstration of all that that company has achieved.

Well, I think, of course, this SpaceX mission is a demonstration of all that that company has achieved.

They are the main way.

They are the main way.

That America gets its astronauts to and from and cargo to and from the International Space Station. There was this there is this competing effort that the Boeing craft that is going slower and Elon Musk, as you said, stepping in Now. I think the problem here is Musk, I think in his mind and when you look at like some of the things he said about what he wants out of the Trump administration, he just sort of expects Trump to essentially give a bunch more contracts to SpaceX. I think in these court rulings and in some of the pushback, we're seeing political pushback as well as pushback from consumers, like some of this these vandal you know, vandalistic acts on Tesla stores and so on. We're seeing that that may prove to be more difficult than I think maybe the Elon Musk uh, you know, super fans would have believed.