This is Bloomberg Business Wait inside from the reporters and editors who bring you America's most trusted business magazine, plus global business finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.

This is Bloomberg Business Wait inside from the reporters and editors who bring you America's most trusted business magazine, plus global business finance and tech news. The Bloomberg Business Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio.

So, with all that's going on, market watchers and many of them and business executives continue to remind us we cannot forget what is going on geopolitically and on that. The White House is certainly contemplating its next move, weighing potential responses to that deadly attack on a US base in Jordan Byron backed militants over the weekend that killed three US soldiers, said to be the first Americans to die from such an attack since regional tensions were inflamed him by the start of the Israel Hamas War in Gaza, which of course started back in October.

So, with all that's going on, market watchers and many of them and business executives continue to remind us we cannot forget what is going on geopolitically and on that. The White House is certainly contemplating its next move, weighing potential responses to that deadly attack on a US base in Jordan Byron backed militants over the weekend that killed three US soldiers, said to be the first Americans to die from such an attack since regional tensions were inflamed him by the start of the Israel Hamas War in Gaza, which of course started back in October.

Yeah, depending on press. Secretary Air Force Brigadier General pat Ryder was on Bloomberg Surveillance earlier this morning and addressed a possible US response.

Yeah, depending on press. Secretary Air Force Brigadier General pat Ryder was on Bloomberg Surveillance earlier this morning and addressed a possible US response.

We will take deliberate, appropriate action. Our focus here is not to broaden a conflict. From the very beginning, we've been very focused on ensuring that the situation in Israel does not broaden into a wider regional conflict. Unfortunately, what you have here are Iranian proxy groups that are exploiting the situation and conducting these types of illegal attacks against forces that are in the region to actually preserve peace and stability. So again, we're going to do what we need to do to protect our forces, while also cognitive the fact that what we don't want is a wider regional conflict.

We will take deliberate, appropriate action. Our focus here is not to broaden a conflict. From the very beginning, we've been very focused on ensuring that the situation in Israel does not broaden into a wider regional conflict. Unfortunately, what you have here are Iranian proxy groups that are exploiting the situation and conducting these types of illegal attacks against forces that are in the region to actually preserve peace and stability. So again, we're going to do what we need to do to protect our forces, while also cognitive the fact that what we don't want is a wider regional conflict.

That was of course pending on Press Secretary Air Force Brigadio General pat Ryder on Bloomberg surveillance earlier this morning addressing a possible response. We do also hear from John Kirby, National Security Council Coordinator for Strategic Communications, speaking right now, who did say that the US will respond on the US's schedule, not on anyone else's, all right, So.

That was of course pending on Press Secretary Air Force Brigadio General pat Ryder on Bloomberg surveillance earlier this morning addressing a possible response. We do also hear from John Kirby, National Security Council Coordinator for Strategic Communications, speaking right now, who did say that the US will respond on the US's schedule, not on anyone else's, all right, So.

Let's get to the interview with US as retired Major General Maston Robinson. He served in combat zones in Liberia, Desert Storm, Somalia, Iraq, and in Afghanistan. He commanded at every operational level in the Marine Corps, so he has seen a lot and has some very deep insight. He is geopolitical Intelligence Advisor and board member at Academy Securities Advisory. He joins us on Zoom from Greenville, South Carolina. Major Robinson, it is great to have you back with us. Curious in terms of appropriate response, I think we all wonder what that means, what goes into First of all, you know firsthand what goes into determining what is an appropriate response.

Let's get to the interview with US as retired Major General Maston Robinson. He served in combat zones in Liberia, Desert Storm, Somalia, Iraq, and in Afghanistan. He commanded at every operational level in the Marine Corps, so he has seen a lot and has some very deep insight. He is geopolitical Intelligence Advisor and board member at Academy Securities Advisory. He joins us on Zoom from Greenville, South Carolina. Major Robinson, it is great to have you back with us. Curious in terms of appropriate response, I think we all wonder what that means, what goes into First of all, you know firsthand what goes into determining what is an appropriate response.

Thanks Carol. The first step is attribution. You know, can you validate who did it? We certainly can validate where the drone came from, but whose fingerprints on the drone can be challenging party going dealing with proxies, and you have to be careful when you're dealing with proxies. The tendency is to say, who historically funds or sports of proxies, gloves off, let's go after him. And although that's a popular response, I didn't always necessarily the most defendable response. The second is you have to look at what's our capability to UH to send a response, what's the message that it will send, what's our will to send a response? And then there's the dicey part of our credibility in the response. It's sort of like you know a parent, you know with the child, I mean, you need to when you say I'm gonna do something, I'm gonna I'm gonna do it. So I think the Biden administration is definitely trying to figure out how hard of a response can they address.

Thanks Carol. The first step is attribution. You know, can you validate who did it? We certainly can validate where the drone came from, but whose fingerprints on the drone can be challenging party going dealing with proxies, and you have to be careful when you're dealing with proxies. The tendency is to say, who historically funds or sports of proxies, gloves off, let's go after him. And although that's a popular response, I didn't always necessarily the most defendable response. The second is you have to look at what's our capability to UH to send a response, what's the message that it will send, what's our will to send a response? And then there's the dicey part of our credibility in the response. It's sort of like you know a parent, you know with the child, I mean, you need to when you say I'm gonna do something, I'm gonna I'm gonna do it. So I think the Biden administration is definitely trying to figure out how hard of a response can they address.

Can they be.

Can they be.

Specific at the funder or the supporter, or or is there a proxy they really can nail down to go after. They'll figure that out and they'll they'll do something. Whether that will have the desired effect or not is always, you know, the challenge, because these people don't think logically like we do, and they don't respond logically like we do for the most part.

Specific at the funder or the supporter, or or is there a proxy they really can nail down to go after. They'll figure that out and they'll they'll do something. Whether that will have the desired effect or not is always, you know, the challenge, because these people don't think logically like we do, and they don't respond logically like we do for the most part.

Major General Robinson, what did you make of Senator Lindsay Graham of South Carolina over the weekend tweeting hit Iran now hit them hard? First? What do you make of that? Second? Does that make the White House's job more difficult?

Major General Robinson, what did you make of Senator Lindsay Graham of South Carolina over the weekend tweeting hit Iran now hit them hard? First? What do you make of that? Second? Does that make the White House's job more difficult?

I don't think it makes it more difficult. I mean, I think we live in a very political world and people make statements for effect. Historically speaking, there's certainly an argument made that there have been administrations in the past, and I don't mean, you know, going all the way back to the eighteen hundreds, but in the past two struck very specifically and very hard. And depending on what you're talking about, North Korea, Iran, you know, an African nation. I mean, each one is independent and how you need to measure the calculus of what you're going to do because they'll all respond differently. Some of them are very very thick skinned. Some of them it doesn't really matter what you do, and some you know, if you can find the sweet spot, you might do something. But attacking Iran right now, I'm not going to say it's a bad idea. I'm going to say it's a challenge is to what do you attack in Iran? If you're going to do it, that you can publicly not just argue, but validate that they had a direct fingerprint on what happened. Therefore, this was a justified response.

I don't think it makes it more difficult. I mean, I think we live in a very political world and people make statements for effect. Historically speaking, there's certainly an argument made that there have been administrations in the past, and I don't mean, you know, going all the way back to the eighteen hundreds, but in the past two struck very specifically and very hard. And depending on what you're talking about, North Korea, Iran, you know, an African nation. I mean, each one is independent and how you need to measure the calculus of what you're going to do because they'll all respond differently. Some of them are very very thick skinned. Some of them it doesn't really matter what you do, and some you know, if you can find the sweet spot, you might do something. But attacking Iran right now, I'm not going to say it's a bad idea. I'm going to say it's a challenge is to what do you attack in Iran? If you're going to do it, that you can publicly not just argue, but validate that they had a direct fingerprint on what happened. Therefore, this was a justified response.

So is it incorrect to believe that both Washington and Tehran are seeking to avoid a direct confrontation over the widening Middle East conflict? Is that incorrect for us to believe it that both Iran and the US do not want to see further escalation with those two specifically involved.

So is it incorrect to believe that both Washington and Tehran are seeking to avoid a direct confrontation over the widening Middle East conflict? Is that incorrect for us to believe it that both Iran and the US do not want to see further escalation with those two specifically involved.

Yeah, I don't know that would be an accurate characterization. I think Iran doesn't necessarily want a widespread conflict, but what they definitely want is widespread disruption. They want to disrupt the you know what's happened over the last year plus of going all the way back to the Abraham McCords and the potential partnership between Saudi and Israel, and you know, the partnership within the Gulf that is not just oil based but has new economic opportunities. You've got you know, both Egypt and Jordan pretty much saying we're not going to take on the fanaticals in our country. So there's a lot of stake here that's going on. That's that's outside the parameters. I think Iran is very much trying to disrupt, but I wouldn't say they want a war with the US.

Yeah, I don't know that would be an accurate characterization. I think Iran doesn't necessarily want a widespread conflict, but what they definitely want is widespread disruption. They want to disrupt the you know what's happened over the last year plus of going all the way back to the Abraham McCords and the potential partnership between Saudi and Israel, and you know, the partnership within the Gulf that is not just oil based but has new economic opportunities. You've got you know, both Egypt and Jordan pretty much saying we're not going to take on the fanaticals in our country. So there's a lot of stake here that's going on. That's that's outside the parameters. I think Iran is very much trying to disrupt, but I wouldn't say they want a war with the US.

We have a partial map of the region, but to show where the drone attack was over the weekend that led to US deaths. You know, every time general that we look at them out for the Middle East, including the attack over the weekend, we see how close everyone is geographically. We're reminded of how it wouldn't take much for it to snowball. At the same time, seeing how close everyone is, it's reminded us of what meaning the region must be thinking about how easily could get out of control and how much everyone in the region could stand to lose. And yet this is where we all lean on your experience in the region, and you've kind of hinted at some of it is how does the region see it. Do they view more attacks as an escalation and something to be worried about, or are they like, Okay, maybe we'll gain something out of this.

We have a partial map of the region, but to show where the drone attack was over the weekend that led to US deaths. You know, every time general that we look at them out for the Middle East, including the attack over the weekend, we see how close everyone is geographically. We're reminded of how it wouldn't take much for it to snowball. At the same time, seeing how close everyone is, it's reminded us of what meaning the region must be thinking about how easily could get out of control and how much everyone in the region could stand to lose. And yet this is where we all lean on your experience in the region, and you've kind of hinted at some of it is how does the region see it. Do they view more attacks as an escalation and something to be worried about, or are they like, Okay, maybe we'll gain something out of this.

Well with the US and maybe parts of Europe probably have a different calculus than some of the rest of the world in regard to human life. I mean, nobody wants to see some idea, but we probably put a bigger value on three soldiers, airmen, marines that were in a remote area in a small logistics base on the border of yours and and yeah, that they got hit by an indirect issue in their billeting space. The building space piece is probably what will be get the most attention. That you weren't addressing them while they were doing something that was antagonistic, but you're addressing them while they're sleeping. Part of that is how do we harden our facilities, How do we ensure that where they're sleeping is not as well known. Is more hardened is? I mean, in the fact it was thirty casualties. You probably can address some of that by, you know, a wider separation between who's sleeping where and how they're surrounding what they're sleeping in. You're not going to put top cover on top of it. It's going to be bulletproof. So it's always a threat anytime we deploy our forces overseas that they're going to be vulnerable because they're not going to be in hardened facilities. So part of this is a factor of if people strike us in a soft target like this, we will come after them and we'll make them pay. That's certainly something that I know the administration will be looking at is how do we hit back hard enough to where they go ouch. I don't want to do that yet, but how do we do it in such a way that it doesn't have a second and third order effect that we later regret. And I hate going down a political road and this isn't political, but but we can be victims. We can undermine our message by our previous messages. And so you know, the President's going to have hard He's got to be challenged to figure out. How do we really hold Iron accountable and make sure they know that we take this very seriously and that we're not going away, you know, because they will measure this, whether we want them to do or not. I'm not sure this is napples and apples, but they'll measure it against the pull out in Afghanistan and the you know, the public statement is time for soldiers, sailors, are marine us to stop dying and god forsaken places halfway around the world that we don't care about. That's not what the President intended. That's not what he would would do. A parallel to hear it's got nothing new with that has to do with what's Iran hearing and what are they stringing together and how do we send them a different message that makes them sit up and go, Okay, this is different.

Well with the US and maybe parts of Europe probably have a different calculus than some of the rest of the world in regard to human life. I mean, nobody wants to see some idea, but we probably put a bigger value on three soldiers, airmen, marines that were in a remote area in a small logistics base on the border of yours and and yeah, that they got hit by an indirect issue in their billeting space. The building space piece is probably what will be get the most attention. That you weren't addressing them while they were doing something that was antagonistic, but you're addressing them while they're sleeping. Part of that is how do we harden our facilities, How do we ensure that where they're sleeping is not as well known. Is more hardened is? I mean, in the fact it was thirty casualties. You probably can address some of that by, you know, a wider separation between who's sleeping where and how they're surrounding what they're sleeping in. You're not going to put top cover on top of it. It's going to be bulletproof. So it's always a threat anytime we deploy our forces overseas that they're going to be vulnerable because they're not going to be in hardened facilities. So part of this is a factor of if people strike us in a soft target like this, we will come after them and we'll make them pay. That's certainly something that I know the administration will be looking at is how do we hit back hard enough to where they go ouch. I don't want to do that yet, but how do we do it in such a way that it doesn't have a second and third order effect that we later regret. And I hate going down a political road and this isn't political, but but we can be victims. We can undermine our message by our previous messages. And so you know, the President's going to have hard He's got to be challenged to figure out. How do we really hold Iron accountable and make sure they know that we take this very seriously and that we're not going away, you know, because they will measure this, whether we want them to do or not. I'm not sure this is napples and apples, but they'll measure it against the pull out in Afghanistan and the you know, the public statement is time for soldiers, sailors, are marine us to stop dying and god forsaken places halfway around the world that we don't care about. That's not what the President intended. That's not what he would would do. A parallel to hear it's got nothing new with that has to do with what's Iran hearing and what are they stringing together and how do we send them a different message that makes them sit up and go, Okay, this is different.

This is not the run the mill, Major General. You first and foremost, we're talking about a story that involves casualties, US deaths. It's a human story. It's a story about conflict, but it's also a story that could have widespread economic implications, as we've seen play out in the region over the past few months. After all, you are an advisor and board member at Academy Securities Advisory. What is the way that you are providing advice right now to your clients, to your company? What is the thing that you're telling them about this conflict.

This is not the run the mill, Major General. You first and foremost, we're talking about a story that involves casualties, US deaths. It's a human story. It's a story about conflict, but it's also a story that could have widespread economic implications, as we've seen play out in the region over the past few months. After all, you are an advisor and board member at Academy Securities Advisory. What is the way that you are providing advice right now to your clients, to your company? What is the thing that you're telling them about this conflict.

I think unfortunately we're probably faced with the Red Sea avenue of transportation, the Bible Ol Mandeb straight the Red Sea and the Seuss Canal being certainly problematic. So that's a probably somewhere around the me and not only increased cost of that ship going down the Cape of Good Hope instead of going through the more direct route. So it's going to be a finance piece that will certainly bleed into inflation and the cost of things. It'll be an insurance piece for shipping that are in key shipping, because nobody's going to ensure that ship going through an area that is problematic without really jacking the insurance up to insuring this is being paid for. So it will impact the economy. Probably what's happening they're in Syria will an pack the economy less than what's happening by the Huthis and in the Red Cita.

I think unfortunately we're probably faced with the Red Sea avenue of transportation, the Bible Ol Mandeb straight the Red Sea and the Seuss Canal being certainly problematic. So that's a probably somewhere around the me and not only increased cost of that ship going down the Cape of Good Hope instead of going through the more direct route. So it's going to be a finance piece that will certainly bleed into inflation and the cost of things. It'll be an insurance piece for shipping that are in key shipping, because nobody's going to ensure that ship going through an area that is problematic without really jacking the insurance up to insuring this is being paid for. So it will impact the economy. Probably what's happening they're in Syria will an pack the economy less than what's happening by the Huthis and in the Red Cita.

But is that because you believe what's going on on the Red Sea, it's not going to wrap up anytime soon. It's going to be something that lingers if you will this year.

But is that because you believe what's going on on the Red Sea, it's not going to wrap up anytime soon. It's going to be something that lingers if you will this year.

So again the challenge is who's the audience. And if Iran, I think is probably more rational than the Houthis. The Houthis don't really have an organizational structure, a national instinct that has them thinking through these calculuses like Iran will have to do as a nation that wants to be influential as a nation. And that's the challenge with with irregulars you know that are around the world. Honestly, in Yemen, the the president Salom was probably the most effective. Yeah. Uh, we never controlled the tribes. What he did was he in essence, brought the tribes into Snah, bought their tribal villas and kind of the premise, keep you your friends close, the enemies closer.

So again the challenge is who's the audience. And if Iran, I think is probably more rational than the Houthis. The Houthis don't really have an organizational structure, a national instinct that has them thinking through these calculuses like Iran will have to do as a nation that wants to be influential as a nation. And that's the challenge with with irregulars you know that are around the world. Honestly, in Yemen, the the president Salom was probably the most effective. Yeah. Uh, we never controlled the tribes. What he did was he in essence, brought the tribes into Snah, bought their tribal villas and kind of the premise, keep you your friends close, the enemies closer.

Right.

Right.

He couldn't control them, but he tried to influence them in ways that were unconventional. And that's sort of still what you've got there with the hoho Thies and with Yemen as a nation that's more unstructured than Iran is as a nation.

He couldn't control them, but he tried to influence them in ways that were unconventional. And that's sort of still what you've got there with the hoho Thies and with Yemen as a nation that's more unstructured than Iran is as a nation.

All right, Well, so much appreciated, Insight general, So thank you so much for joining us. Again, that's major General Maston Robinson, Geopolitical Intelligence Advisor to Academy Securities Advisor. He's also a member of their board. Joining us on Zoom from Greenville, South Carolina. I feel like we started the new year talking about concerns about geopolitics. We continue to kind of cautiously use the word escalation, but nonetheless, I guess now we're just kind of waiting to see what the US responds to see.

All right, Well, so much appreciated, Insight general, So thank you so much for joining us. Again, that's major General Maston Robinson, Geopolitical Intelligence Advisor to Academy Securities Advisor. He's also a member of their board. Joining us on Zoom from Greenville, South Carolina. I feel like we started the new year talking about concerns about geopolitics. We continue to kind of cautiously use the word escalation, but nonetheless, I guess now we're just kind of waiting to see what the US responds to see.

Not a big response from oil on this.

Not a big response from oil on this.

Not yet, Yeah, yeah, exactly. All right, folks, just getting started on this Monday.

Not yet, Yeah, yeah, exactly. All right, folks, just getting started on this Monday.

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So one of the things that we love talking about is what's going on with the consumer, the health of the consumer. We do it because it's so important in terms of US economic momentum. And on that tim we've had some recent economic reports showing robust gains in both personal income and spending in December. We also had consumer sentiment soaring in early January to its highest in about three years.

So one of the things that we love talking about is what's going on with the consumer, the health of the consumer. We do it because it's so important in terms of US economic momentum. And on that tim we've had some recent economic reports showing robust gains in both personal income and spending in December. We also had consumer sentiment soaring in early January to its highest in about three years.

Don't forget about the FED page book and found resilient consumer spending that helps propel the US economy in recent weeks, offsetting weakness and other sectors like manufacturing.

Don't forget about the FED page book and found resilient consumer spending that helps propel the US economy in recent weeks, offsetting weakness and other sectors like manufacturing.

All sounds good, Yeah, it does sound good.

All sounds good, Yeah, it does sound good.

That's great.

That's great.

Everything is awesome.

Everything is awesome.

Not so fast because credit card delinquency rates. Sorry to be the bummer here. Credit card delinquency rates have exceeded pre pandemic levels, while the share of borrowers making only the minimum payment climbed above ten percent for the first time since twenty nineteen. This is according to a Federal Reserve Bank of Philadelphia report TIM that was out earlier this month.

Not so fast because credit card delinquency rates. Sorry to be the bummer here. Credit card delinquency rates have exceeded pre pandemic levels, while the share of borrowers making only the minimum payment climbed above ten percent for the first time since twenty nineteen. This is according to a Federal Reserve Bank of Philadelphia report TIM that was out earlier this month.

Well that's the bummer, popt.

Well that's the bummer, popt.

Okay, we let's get into it with our next guest, who's also tracking the credit health of the US consumer with us is the CEO of vantage Score, Silvio Tavares. Silvio, good to have you with us this afternoon here from San Francisco. We should note that vantage Score is a joint venture of Experience, Equifax, and TransUnion. It provides credit data, credit risk modeling, and analytics based out in the West Coast. So you got a recent report out December report talk to us about specific data points in the report that has you concerned.

Okay, we let's get into it with our next guest, who's also tracking the credit health of the US consumer with us is the CEO of vantage Score, Silvio Tavares. Silvio, good to have you with us this afternoon here from San Francisco. We should note that vantage Score is a joint venture of Experience, Equifax, and TransUnion. It provides credit data, credit risk modeling, and analytics based out in the West Coast. So you got a recent report out December report talk to us about specific data points in the report that has you concerned.

Well, yeah, I think the main key point to start off with is that actually the overall consumer is healthy. You know, we measure the consumer credit health by the average vantage score. A low vantage score is three hundred, a perfect vantage scores eight point fifty, and prime, which is the level where consumers usually get the best rate, is vantage score six sixty. As you look through the end of December we publish this data today or monthly credit gauge, the average consumer credit score was seven oh one. So that's actually a pretty healthy score. But what that masks is an area of concern because basically the consumer is experiencing a bit of a credit hangover. So averages mean, yes, and the average and the mean are the same for credit scores typically because you see that nice normal distribution, Yes, yes, yes, correct, So go ahead.

Well, yeah, I think the main key point to start off with is that actually the overall consumer is healthy. You know, we measure the consumer credit health by the average vantage score. A low vantage score is three hundred, a perfect vantage scores eight point fifty, and prime, which is the level where consumers usually get the best rate, is vantage score six sixty. As you look through the end of December we publish this data today or monthly credit gauge, the average consumer credit score was seven oh one. So that's actually a pretty healthy score. But what that masks is an area of concern because basically the consumer is experiencing a bit of a credit hangover. So averages mean, yes, and the average and the mean are the same for credit scores typically because you see that nice normal distribution, Yes, yes, yes, correct, So go ahead.

You were saying that it masks some of the underlying maybe concerns.

You were saying that it masks some of the underlying maybe concerns.

There, exactly right, because what we saw in December, which is the data that we published today, was that all of a sudden, you're starting to see some signs for concern in terms of the increase in credit card credit card balances in December, we're up over eight point two percent on a year over year base basis. That's a big jump. And as we look also at delinquencies, the rate at which people are paying their loans late, we're actually seeing that increase on a year over year base. It's a little bit of an increase, but when you see that trend, that's always cause for concern. And so the consumer is experiencing a little bit of a credit hangover. They spent a lot in December and we're going to watch that going through the bounce of the year.

There, exactly right, because what we saw in December, which is the data that we published today, was that all of a sudden, you're starting to see some signs for concern in terms of the increase in credit card credit card balances in December, we're up over eight point two percent on a year over year base basis. That's a big jump. And as we look also at delinquencies, the rate at which people are paying their loans late, we're actually seeing that increase on a year over year base. It's a little bit of an increase, but when you see that trend, that's always cause for concern. And so the consumer is experiencing a little bit of a credit hangover. They spent a lot in December and we're going to watch that going through the bounce of the year.

Is the credit hangover portend anything more concerning for you than people just owing more on their credit cards? I mean, what are the knock on effects of this? What has you concerned?

Is the credit hangover portend anything more concerning for you than people just owing more on their credit cards? I mean, what are the knock on effects of this? What has you concerned?

Well, the key concern is if this continues, you're going to see a rising level of defaults and delinquencies. And it's not all consumers are experiencing the same thing. So for example, for the higher end, higher average age consumer, you're not seeing those delinquencies. But as you look to the lower credit tiers vantage score, subprime, and near prime, there's where you're seeing a higher rate of concern. Now as you look at banks, you know, using the analogy credit hangover, Well, the banks are still serving drinks. We actually saw credit origination's increase in the month of December compared to November, and also increase on a year over year basis. So banks we expected we're going to tighten, that didn't happen in December. We're actually seeing banks continue to lend really across most categories, and so we're going to watch that trend because obviously if you have higher delinquencies coupled with increased lending, that's not a good picture for banks.

Well, the key concern is if this continues, you're going to see a rising level of defaults and delinquencies. And it's not all consumers are experiencing the same thing. So for example, for the higher end, higher average age consumer, you're not seeing those delinquencies. But as you look to the lower credit tiers vantage score, subprime, and near prime, there's where you're seeing a higher rate of concern. Now as you look at banks, you know, using the analogy credit hangover, Well, the banks are still serving drinks. We actually saw credit origination's increase in the month of December compared to November, and also increase on a year over year basis. So banks we expected we're going to tighten, that didn't happen in December. We're actually seeing banks continue to lend really across most categories, and so we're going to watch that trend because obviously if you have higher delinquencies coupled with increased lending, that's not a good picture for banks.

We have a chart to share with everybody, and it does show what you guys have seen in terms of credit card balances over the last four years. So you can just see from November twenty two, from December twenty twenty two to November twenty twenty three, December twenty twenty three, you can see the uptick and the build right, that gradual build in terms of credit card balances. Having said that, Sylvia give us an idea of you guys are getting data right from all the credit reporting agencies. I mean, so is it a nice cross section if you will, in terms of the US population.

We have a chart to share with everybody, and it does show what you guys have seen in terms of credit card balances over the last four years. So you can just see from November twenty two, from December twenty twenty two to November twenty twenty three, December twenty twenty three, you can see the uptick and the build right, that gradual build in terms of credit card balances. Having said that, Sylvia give us an idea of you guys are getting data right from all the credit reporting agencies. I mean, so is it a nice cross section if you will, in terms of the US population.

Yes, very much. So we have the most authoritative source on that data because vantage score actually scores approximately thirty million more consumers than conventional credit scores. We're used by eight of the top ten banks and over three thousand banks. In FinTechs we grew at thirty percent last year and approximately nineteen billion Vantage scores were used. So it's the most authoritative source, and that's to challenge with a lot of the economic data that you're seeing from other sources. Right now, it's backward looking. It's like driving in the rear view mar We have the most recent data and what it shows is overall, the consumers healthy, but we're starting to see some signs for concern. That delinquency rate increasing is one of them. The spike in credit card balances is another.

Yes, very much. So we have the most authoritative source on that data because vantage score actually scores approximately thirty million more consumers than conventional credit scores. We're used by eight of the top ten banks and over three thousand banks. In FinTechs we grew at thirty percent last year and approximately nineteen billion Vantage scores were used. So it's the most authoritative source, and that's to challenge with a lot of the economic data that you're seeing from other sources. Right now, it's backward looking. It's like driving in the rear view mar We have the most recent data and what it shows is overall, the consumers healthy, but we're starting to see some signs for concern. That delinquency rate increasing is one of them. The spike in credit card balances is another.

I mean, all this has me thinking about the power that the US consumer has when it comes to the economy. I mean, this is an economy that the consumer certainly powers. Are there any macroeconomic takeaways that you can give us about credit score and what it means for consumer spending?

I mean, all this has me thinking about the power that the US consumer has when it comes to the economy. I mean, this is an economy that the consumer certainly powers. Are there any macroeconomic takeaways that you can give us about credit score and what it means for consumer spending?

Yeah, Well, the credit score, the vantage score is the real authoritative source of credit health. And what we're seeing is it's becoming very much of a tail of two cities. Those older, more affluent consumers, Generation xers, they're actually doing pretty well. So for example, in December, we saw Generation exers increasing their credit card balances. But those folks, you don't have to worry about them. They typically have higher average credit scores and higher wealth. What's more concerning is that younger and mid tier consumer, and when you look forward, they're going to be facing some economic headwinds. The most significant one is student loans. We're seeing those student loans pay and kick in.

Yeah, Well, the credit score, the vantage score is the real authoritative source of credit health. And what we're seeing is it's becoming very much of a tail of two cities. Those older, more affluent consumers, Generation xers, they're actually doing pretty well. So for example, in December, we saw Generation exers increasing their credit card balances. But those folks, you don't have to worry about them. They typically have higher average credit scores and higher wealth. What's more concerning is that younger and mid tier consumer, and when you look forward, they're going to be facing some economic headwinds. The most significant one is student loans. We're seeing those student loans pay and kick in.

Is one reason that their credit score isn't as high, or their vantage score isn't as high, is because potentially they don't own a house, they don't own an apartment, they don't have that credit history that younger generations or older generations had when they were their age.

Is one reason that their credit score isn't as high, or their vantage score isn't as high, is because potentially they don't own a house, they don't own an apartment, they don't have that credit history that younger generations or older generations had when they were their age.

One hundred percent. And what we see is that home ownership is a huge driver of wealth. The average home equity in a home today is two hundred and forty eight thousand dollars. So if you have a home, you're doing pretty good. If you don't, you have more challenge. And that younger consumer doesn't have as much as an economic cushion to weather the storm against rising inflation, and that higher average credit card statement that they have, they also don't have much of a cushion to pay for that unexpected loan repayment, and that's why it's so important. Recently we saw some of the regulators actually mandate they use advantage core for mortgage and so we're going to be seeing a lot more of those younger consumers, those underserved consumers, getting a chance at their first home, and we expect that to really help with credit health.

One hundred percent. And what we see is that home ownership is a huge driver of wealth. The average home equity in a home today is two hundred and forty eight thousand dollars. So if you have a home, you're doing pretty good. If you don't, you have more challenge. And that younger consumer doesn't have as much as an economic cushion to weather the storm against rising inflation, and that higher average credit card statement that they have, they also don't have much of a cushion to pay for that unexpected loan repayment, and that's why it's so important. Recently we saw some of the regulators actually mandate they use advantage core for mortgage and so we're going to be seeing a lot more of those younger consumers, those underserved consumers, getting a chance at their first home, and we expect that to really help with credit health.

I feel like these are a lot of the topics we've talked about in the last year or so. Is there anything just thirty seconds left here, Sylvia that was surprising to you that you think our investing audience should know about. It might be whether it's cause of concern or cause of come if.

I feel like these are a lot of the topics we've talked about in the last year or so. Is there anything just thirty seconds left here, Sylvia that was surprising to you that you think our investing audience should know about. It might be whether it's cause of concern or cause of come if.

You will just quickly, well, I think the most surprising thing, the most newsworthy thing, is the reality that banks aren't tightening the way that we expected. We expected to see into December a cooling economy and banks really pulling back on their loans. We didn't see that. In fact, we saw the opposite, and so that's a key theme we're going to be watching throughout the year. Of course, the whole reason why the Fed increased rates. Is that they expected banks to tighten somewhat, and actually we're seeing banks very in a very principled way looking to maximize that net interest margin on new loans they're making. So we'll have to continue monitor that.

You will just quickly, well, I think the most surprising thing, the most newsworthy thing, is the reality that banks aren't tightening the way that we expected. We expected to see into December a cooling economy and banks really pulling back on their loans. We didn't see that. In fact, we saw the opposite, and so that's a key theme we're going to be watching throughout the year. Of course, the whole reason why the Fed increased rates. Is that they expected banks to tighten somewhat, and actually we're seeing banks very in a very principled way looking to maximize that net interest margin on new loans they're making. So we'll have to continue monitor that.

All right, We've got to leave it there. Sevio Tavara's CEO Advantage Score joining us here in studio.

All right, We've got to leave it there. Sevio Tavara's CEO Advantage Score joining us here in studio.

This is Bloomberg.

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You're listening to the Bloomberg Business Week Podcast. Listen live each weekday starting at two pm Eastern on applecar Play and Android Auto with the Bloomberg Business Ad. You can also listen live on Amazon Alexa from our flagship New York station Just say Alexa playing Bloomberg eleven thirty all around the world.

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Well, they certainly will soon in a very expensive arena out on the West coast. This is one of the most read stories on the Bloomberg terminal. It's about the most expensive basketball arena ever built.

Well, they certainly will soon in a very expensive arena out on the West coast. This is one of the most read stories on the Bloomberg terminal. It's about the most expensive basketball arena ever built.

How much?

How much?

While we're talking, quote, well north two billion dollars, that's a quote.

While we're talking, quote, well north two billion dollars, that's a quote.

Does that even matter? Though it's Steve Balmer, I don't know. Here's some other numbers that chew on. The arena's got one and sixty toilets and urinals, one hundred nine to nine countdown clocks, a forty four thousand square foot halo shaped led board, a Florida ceiling bank of forty five hundred seats on one baseline, and one very enthusiastic and energetic team owner none other than said Steve Baumber.

Does that even matter? Though it's Steve Balmer, I don't know. Here's some other numbers that chew on. The arena's got one and sixty toilets and urinals, one hundred nine to nine countdown clocks, a forty four thousand square foot halo shaped led board, a Florida ceiling bank of forty five hundred seats on one baseline, and one very enthusiastic and energetic team owner none other than said Steve Baumber.

Indeed well last month, Bloomberg News Business of Sports reporter Ara Budwet flew out to la and put on a safety vest, boots and a helmet to get a tour of the new into It Arena, and he joins us here in the Bloomberg Get Director Broker studio along with the editor of Bloomberg BusinessWeek, Jill Weber, and Jill I feel like, you know, when you've got a well known billionaire spending big time in sports, lots of superlatives. This is a story bade for Bloomberg Business There's.

Indeed well last month, Bloomberg News Business of Sports reporter Ara Budwet flew out to la and put on a safety vest, boots and a helmet to get a tour of the new into It Arena, and he joins us here in the Bloomberg Get Director Broker studio along with the editor of Bloomberg BusinessWeek, Jill Weber, and Jill I feel like, you know, when you've got a well known billionaire spending big time in sports, lots of superlatives. This is a story bade for Bloomberg Business There's.

A genre here where we like to go to the stadium's and actually see these facilities kind of come into being. And what's really fascinating about this one is in Los Angeles, the Clippers have always been sort of second fiddle to the Lakers, and forever they were sort of you know, their their schedule had to not only work around the Clippers, but around the Lakers, but whatever else was also happening in LA. When Steve Balmer bought the Clippers for two billion, it started this process to really kind of change the world's perception of what Clippers basketball will look like. The team is quite good, and beginning next season they'll be playing in their own arena for the first time. He's a basketball junkie, and so his obsession with the stadium and the arena is I think this manifestation of that. And Ira got to you got to wear a hard hat right with Bomber.

A genre here where we like to go to the stadium's and actually see these facilities kind of come into being. And what's really fascinating about this one is in Los Angeles, the Clippers have always been sort of second fiddle to the Lakers, and forever they were sort of you know, their their schedule had to not only work around the Clippers, but around the Lakers, but whatever else was also happening in LA. When Steve Balmer bought the Clippers for two billion, it started this process to really kind of change the world's perception of what Clippers basketball will look like. The team is quite good, and beginning next season they'll be playing in their own arena for the first time. He's a basketball junkie, and so his obsession with the stadium and the arena is I think this manifestation of that. And Ira got to you got to wear a hard hat right with Bomber.

Boots Fest, not with Bomber, I was. I was at Crypto dot Com arena, where the Clippers currently play and share with the Lakers, with him, and then I got a tour with the team's president of business operations, Gillian Zucker.

Boots Fest, not with Bomber, I was. I was at Crypto dot Com arena, where the Clippers currently play and share with the Lakers, with him, and then I got a tour with the team's president of business operations, Gillian Zucker.

Okay, so take us through like what this is going to be like as a fan of like what Bomber is trying to build.

Okay, so take us through like what this is going to be like as a fan of like what Bomber is trying to build.

It's very interesting because he has a very distinct point of view with it. He wants all the fans basically out of their phones, locked in on the game, cheering loudly, providing a competitive advantage to the home team he wants Basically.

It's very interesting because he has a very distinct point of view with it. He wants all the fans basically out of their phones, locked in on the game, cheering loudly, providing a competitive advantage to the home team he wants Basically.

Wouldn't you want that? Yeah, he's great, he went well, but that's supposed to go to a game. I got a pick billion dollars to build a place where that can happen.

Wouldn't you want that? Yeah, he's great, he went well, but that's supposed to go to a game. I got a pick billion dollars to build a place where that can happen.

But if you want to maximize revenue, arguably you put hundreds of suites where people sort of chill out and commits during the game. He's not going for that approach. And he sees this as an alternative to the Lakers and as a kind of harkening back to an old style of fandom where you were engaged in the game throughout.

But if you want to maximize revenue, arguably you put hundreds of suites where people sort of chill out and commits during the game. He's not going for that approach. And he sees this as an alternative to the Lakers and as a kind of harkening back to an old style of fandom where you were engaged in the game throughout.

Is the idea that revenue growth happens when the fans get more excited, the team gets better, and then the.

Is the idea that revenue growth happens when the fans get more excited, the team gets better, and then the.

Ticket prices go up. I think his idea is look, or is Steve Bomber and he doesn't He one of the part of the world and he wants seventeen five hundred Steve baumbers there with him. He is incredibly enthusiastic.

Ticket prices go up. I think his idea is look, or is Steve Bomber and he doesn't He one of the part of the world and he wants seventeen five hundred Steve baumbers there with him. He is incredibly enthusiastic.

Is he that enthusiastic in person?

Is he that enthusiastic in person?

In person, he's everything that you've you know, seen in the sort of you know, famous monkey Boy clips online. He brings that energy and h and I think he wants that energy in the arena, and that's his first priority. I think they think that's compatible with, you know, making it work financially. But and that the part of the reason it can work for the Clippers is that they need to be an alternative in the LA marketplace. The Lakers are one thing. The Clippers are going to be, in his mind, the place for the basketball purists who want to be on their feet all game long.

In person, he's everything that you've you know, seen in the sort of you know, famous monkey Boy clips online. He brings that energy and h and I think he wants that energy in the arena, and that's his first priority. I think they think that's compatible with, you know, making it work financially. But and that the part of the reason it can work for the Clippers is that they need to be an alternative in the LA marketplace. The Lakers are one thing. The Clippers are going to be, in his mind, the place for the basketball purists who want to be on their feet all game long.

So to build this, how did they go about finding inspiration?

So to build this, how did they go about finding inspiration?

They went all over the world.

They went all over the world.

They looked at soccer stadiums, and that's where they came up with the idea of having every fan walk down to their seats, so even if you're in the last row, you kind of enter from above and go down.

They looked at soccer stadiums, and that's where they came up with the idea of having every fan walk down to their seats, so even if you're in the last row, you kind of enter from above and go down.

I love that idea, Yeah, you just it never occurred to me, but you know, when you go to basketball game, you kind of come in and then immediately like turn away from the the court as you find your seat, which for me is always.

I love that idea, Yeah, you just it never occurred to me, but you know, when you go to basketball game, you kind of come in and then immediately like turn away from the the court as you find your seat, which for me is always.

Yeah.

Yeah.

Yeah.

Yeah.

They borrowed that from there. They took ideas from all over the world and they everything was focused around the idea of, like I said, keeping people's attention on the game. So they have really limited concessions, so that you don't wander the arena looking for your favorite item they have.

They borrowed that from there. They took ideas from all over the world and they everything was focused around the idea of, like I said, keeping people's attention on the game. So they have really limited concessions, so that you don't wander the arena looking for your favorite item they have.

There's like a consistency.

There's like a consistency.

Yeah, it's like eight dogs.

Yeah, it's like eight dogs.

Yeah, it's exactly where.

Yeah, it's exactly where.

Yeah.

Yeah.

And the way they're setting up to check out is this frictionless. You walk in, you take what you want, you walk out, don't stop to pay. They are going to try and put everything on my credit card exact. They have these countdown clocks. You mentioned those one hundred ninety nine countdown clocks. Those are going to show people how much time is left in a timeout before they need to get back to their seats. Even the suites are set up so the seats are in your way. If you're standing in the sort of dining area, typically you can kind of lean on a counter and look at over the game while you're eating and drinking.

And the way they're setting up to check out is this frictionless. You walk in, you take what you want, you walk out, don't stop to pay. They are going to try and put everything on my credit card exact. They have these countdown clocks. You mentioned those one hundred ninety nine countdown clocks. Those are going to show people how much time is left in a timeout before they need to get back to their seats. Even the suites are set up so the seats are in your way. If you're standing in the sort of dining area, typically you can kind of lean on a counter and look at over the game while you're eating and drinking.

He's got it set up.

He's got it set up.

No, you've got to get back out to your seat to watch the game, so you can't kind of multitask. And this wall is a fifty one rows of uninterrupted seats, no suites in the way, Florida ceiling where you have to be a Clippers fan to get tickets. They're going to have a loyalty program where you have to like post something on social media of yourself in a Clippers jersey or answer trivia questions in order to even get access to buying those tickets. And they want it to be like a kind of Cameron indoor fieldhouse.

No, you've got to get back out to your seat to watch the game, so you can't kind of multitask. And this wall is a fifty one rows of uninterrupted seats, no suites in the way, Florida ceiling where you have to be a Clippers fan to get tickets. They're going to have a loyalty program where you have to like post something on social media of yourself in a Clippers jersey or answer trivia questions in order to even get access to buying those tickets. And they want it to be like a kind of Cameron indoor fieldhouse.

I feel I love that, but I also I'm just going to guess there's going to be such a program to try and infiltrate that space and just be like like the one Lakers fan in the clipp Yes.

I feel I love that, but I also I'm just going to guess there's going to be such a program to try and infiltrate that space and just be like like the one Lakers fan in the clipp Yes.

That policing that is going to be really interesting.

That policing that is going to be really interesting.

You know they're in watching that.

You know they're in watching that.

Like I know, in Europe it's traditional, like you can't wear away colors except for in the away supporter section of a football match there.

Like I know, in Europe it's traditional, like you can't wear away colors except for in the away supporter section of a football match there.

But we don't have that.

But we don't have that.

Trust in America.

Trust in America.

Does the NBA have any say in terms of arena in terms of what needs to be done or no. An owner can kind of do what he wants, especially when it's his money.

Does the NBA have any say in terms of arena in terms of what needs to be done or no. An owner can kind of do what he wants, especially when it's his money.

There's a set of standards, but it's pretty like, you know, you got to have so many seats and you got to a certain level of amenities and stuff. But but in terms of like what he wants to do within that, there's a lot of latitude.

There's a set of standards, but it's pretty like, you know, you got to have so many seats and you got to a certain level of amenities and stuff. But but in terms of like what he wants to do within that, there's a lot of latitude.

Okay, you didn't mention toilets, which I mentioned at the top, Right, can you talk about I'm sorry I wrote toilet and I want people to know I wasn't just I'm not the only one obsessed with toilets. Okay, right, I mean sorry, Go ahead.

Okay, you didn't mention toilets, which I mentioned at the top, Right, can you talk about I'm sorry I wrote toilet and I want people to know I wasn't just I'm not the only one obsessed with toilets. Okay, right, I mean sorry, Go ahead.

Whatever your level of obsession with toilets. We're gonna see if it tops Steve Bummers.

Whatever your level of obsession with toilets. We're gonna see if it tops Steve Bummers.

Okay, anybody who listens knows we are both obsessed with toilet toilets.

Okay, anybody who listens knows we are both obsessed with toilet toilets.

Sixty last count. Yeah, they say it's three times the typical NBA arena ratio of seats to toilets. So and again, the idea with that is he doesn't want you standing in line. The Clippers don't want you standing in line when the game's going on, so they're trying to get you in and out as fast as possible. And so Bomber, you know, at the groundbreaking did a reprise on his developers, developers, developers chant with toilets, toilets, toilets. The team you know, they're like trying to get him to say fixtures and rope it in a little bit, but you know it's again, it's just about basically, he wants hopefully everyone watching the game for every second.

Sixty last count. Yeah, they say it's three times the typical NBA arena ratio of seats to toilets. So and again, the idea with that is he doesn't want you standing in line. The Clippers don't want you standing in line when the game's going on, so they're trying to get you in and out as fast as possible. And so Bomber, you know, at the groundbreaking did a reprise on his developers, developers, developers chant with toilets, toilets, toilets. The team you know, they're like trying to get him to say fixtures and rope it in a little bit, but you know it's again, it's just about basically, he wants hopefully everyone watching the game for every second.

That's the contract.

That's the contract.

I want to know everything about that contract of just like how you did on toilets with Steve Bomber. But look, it's like it's easy to make light of this. Yeah, I so appreciate the attention to that level of detail. Like we've all been to games and waited in the line of these about them and been like why am I waiting in line? Like and I'm speaking as a guy here. I mean, it's even worse for female talk about we women.

I want to know everything about that contract of just like how you did on toilets with Steve Bomber. But look, it's like it's easy to make light of this. Yeah, I so appreciate the attention to that level of detail. Like we've all been to games and waited in the line of these about them and been like why am I waiting in line? Like and I'm speaking as a guy here. I mean, it's even worse for female talk about we women.

Yeah, yeah, real quickly, our ticket price is going to go down. It sounds like this is all about for the fans.

Yeah, yeah, real quickly, our ticket price is going to go down. It sounds like this is all about for the fans.

Do prices go down?

Do prices go down?

We've only got about twenty twenty five seconds.

We've only got about twenty twenty five seconds.

Prices go up and they and they are trying to yes, they you know, this thing is more than two billion to build, and they're trying to move their fans over from the current arena and bring in new fans. Uh so, and it's it's it's a pretty dazzling new venue that they have planned. So they need to pay for that, and they think fans.

Prices go up and they and they are trying to yes, they you know, this thing is more than two billion to build, and they're trying to move their fans over from the current arena and bring in new fans. Uh so, and it's it's it's a pretty dazzling new venue that they have planned. So they need to pay for that, and they think fans.

Will will help you that the team is pretty good.

Will will help you that the team is pretty good.

Yeah, I mean that's a big piece. They've got a decent shot at a deep run in the playoffs.

Yeah, I mean that's a big piece. They've got a decent shot at a deep run in the playoffs.

So well, it's a killer story, it's among the most read, and so glad that we could spend some time talking with you, of course, our Bodway Business of Sports reporter at Bloomberg News here in studio, along with the editor of BusinessWeek till web.

So well, it's a killer story, it's among the most read, and so glad that we could spend some time talking with you, of course, our Bodway Business of Sports reporter at Bloomberg News here in studio, along with the editor of BusinessWeek till web.

Journal.

Journal.

How about you let me drive?

How about you let me drive?

No, no, I want to drive.

No, no, I want to drive.

It's a good question.

It's a good question.

It's the drive to the clothes for me.

It's the drive to the clothes for me.

Think well.

Think well.

By Young and Don on Bloomberg Radio.

By Young and Don on Bloomberg Radio.

All right, everybody, just under eighteen minutes left in tdy's trading sessions the first of the week. Yeah eighteen, Yeah, under eighteen.

All right, everybody, just under eighteen minutes left in tdy's trading sessions the first of the week. Yeah eighteen, Yeah, under eighteen.

We're gonna head record has again.

We're gonna head record has again.

I don't know, but it's really been interesting in the last hours. So I feel like since that one headline cross, I don't know if there's a direct correlation of US corporate bond sales hitting one hundred and seventy six billion to set a record in January, we have seen momentum build here in the trade. So we are just off our highs of the session for each of the three major equity averages nasdak out pacing up about one percent right now and right.

I don't know, but it's really been interesting in the last hours. So I feel like since that one headline cross, I don't know if there's a direct correlation of US corporate bond sales hitting one hundred and seventy six billion to set a record in January, we have seen momentum build here in the trade. So we are just off our highs of the session for each of the three major equity averages nasdak out pacing up about one percent right now and right.

Now, if we were to close right here on the s and p five hundred and forty nine to twenty three would be closing at a record too.

Now, if we were to close right here on the s and p five hundred and forty nine to twenty three would be closing at a record too.

We've seen a few records down this year, so let's see.

We've seen a few records down this year, so let's see.

What Jeffrumpblman has to think about it. He's chief investment strategists and head of equities at Mariner Wealth Advisors. He joins us once again on a zoom from Cincinnati. Jeff, we haven't seen you or heard from you in twenty twenty four, So happy New Year.

What Jeffrumpblman has to think about it. He's chief investment strategists and head of equities at Mariner Wealth Advisors. He joins us once again on a zoom from Cincinnati. Jeff, we haven't seen you or heard from you in twenty twenty four, So happy New Year.

How are you.

How are you.

I'm great, you know. I I think everybody's probably in a pretty good mood right now, so hopefully you guys are as well.

I'm great, you know. I I think everybody's probably in a pretty good mood right now, so hopefully you guys are as well.

It didn't hurt to open app market, Yeah, didn't hurt to open up, right. Your four oh one case statements are pop. It open at the end of the year. It was a good ending to the year.

It didn't hurt to open app market, Yeah, didn't hurt to open up, right. Your four oh one case statements are pop. It open at the end of the year. It was a good ending to the year.

Absolutely, So you guys, you guys called this that you were bullish at the end of last year. I want to get to that in a minute, but I want to talk about twenty four because you argue that this is a quote back to normal year, normal economy, normal rates of inflation and interest rates, normal supplied demand conditions in the labor market, as well as levels of labor productivity and normal earnings growth. What makes you so confident that we are finally going to return to normal.

Absolutely, So you guys, you guys called this that you were bullish at the end of last year. I want to get to that in a minute, but I want to talk about twenty four because you argue that this is a quote back to normal year, normal economy, normal rates of inflation and interest rates, normal supplied demand conditions in the labor market, as well as levels of labor productivity and normal earnings growth. What makes you so confident that we are finally going to return to normal.

Well, I think you know, we were confident going into actually twenty twenty three, and I know you want to talk about twenty twenty four, but I think that sets the table for twenty twenty four. And we thought that twenty three would be the verse of twenty two. All the panic happened in twenty two. The stock market leads the economy, and the stock market thought we'd have a recession and we would have very weak earnings, and our thesis last year and the reason we were positive and continue today is we thought we'd have better than feared outcomes on the economy and earnings, that we would have inflation calming, and that we would have the FED peaking at interest rate levels that were actually quite normal, and that just kind of played out. And you know what, it's not different. It's not like that's some unusual thing. Most of the time, the fundamentals, the evaluation levels, and the technical trends are neutral to positive and that's where they've been the whole time. And it's everybody else that freaks out and thinks, well that can't hold. And generally the data comes out and it proves that, yeah, it's neutral, positive, and it remains that way. Inflation's calmed. We've gotten great economic news with regard to GDP for four. We had already had a strong Q three. Consumer confidences up, retail sales is strong, and yet inflation's calming, and the Fed can can kind of, you know, chill a little bit here while earnings look in that environment to grow about ten percent, that to me explains normal. That's what normal is, and I would add to that for everybody that's listening, that also means normal volatility, normal corrective action. The market generally, you know, corrects ten to twenty percent each and every year, so it's.

Well, I think you know, we were confident going into actually twenty twenty three, and I know you want to talk about twenty twenty four, but I think that sets the table for twenty twenty four. And we thought that twenty three would be the verse of twenty two. All the panic happened in twenty two. The stock market leads the economy, and the stock market thought we'd have a recession and we would have very weak earnings, and our thesis last year and the reason we were positive and continue today is we thought we'd have better than feared outcomes on the economy and earnings, that we would have inflation calming, and that we would have the FED peaking at interest rate levels that were actually quite normal, and that just kind of played out. And you know what, it's not different. It's not like that's some unusual thing. Most of the time, the fundamentals, the evaluation levels, and the technical trends are neutral to positive and that's where they've been the whole time. And it's everybody else that freaks out and thinks, well that can't hold. And generally the data comes out and it proves that, yeah, it's neutral, positive, and it remains that way. Inflation's calmed. We've gotten great economic news with regard to GDP for four. We had already had a strong Q three. Consumer confidences up, retail sales is strong, and yet inflation's calming, and the Fed can can kind of, you know, chill a little bit here while earnings look in that environment to grow about ten percent, that to me explains normal. That's what normal is, and I would add to that for everybody that's listening, that also means normal volatility, normal corrective action. The market generally, you know, corrects ten to twenty percent each and every year, so it's.

Not a straight line up to new highs.

Not a straight line up to new highs.

We do have a target of fifty two to fifty four hundred for this year. Last year we had a target of forty five to forty eight hundred, and we were right in between there. And not a lot has changed other than just confirmation that inflation's transitory and interest rates and stabilize.

We do have a target of fifty two to fifty four hundred for this year. Last year we had a target of forty five to forty eight hundred, and we were right in between there. And not a lot has changed other than just confirmation that inflation's transitory and interest rates and stabilize.

Hold on level. Look good, Carol. He said it. He said the tea word trendsdentory transitory. Yeah, that's like a blast from the past. We thought we all thought inflation was transitory in the end. Was it transitory? Yeah, it kind of was.

Hold on level. Look good, Carol. He said it. He said the tea word trendsdentory transitory. Yeah, that's like a blast from the past. We thought we all thought inflation was transitory in the end. Was it transitory? Yeah, it kind of was.

You know, it's funny we made fun of everybody said it was transforming.

You know, it's funny we made fun of everybody said it was transforming.

Guess what it was?

Guess what it was?

Transform Yeah.

Transform Yeah.

As a former gymnast, you got to stick that landing and you got to hold it. So I do think, right, we've seen certainly, you know, if you look at the six month trend and so on and so forth in terms of inflation or the average you know, kind of rolling rate, if you will, you know we are we're at that two percent, you know, in terms of what the Fed wants. It's just hard to understand if there are some underlying fundamentals that maybe push what the kind of lower end of rates should be, whether it pushes it up when you look at something like, I don't know, the two or the ten ten maybe is probably more important. I'm looking at a you know, for even you know, is that kind of where we should be? That's normal going forward for you?

As a former gymnast, you got to stick that landing and you got to hold it. So I do think, right, we've seen certainly, you know, if you look at the six month trend and so on and so forth in terms of inflation or the average you know, kind of rolling rate, if you will, you know we are we're at that two percent, you know, in terms of what the Fed wants. It's just hard to understand if there are some underlying fundamentals that maybe push what the kind of lower end of rates should be, whether it pushes it up when you look at something like, I don't know, the two or the ten ten maybe is probably more important. I'm looking at a you know, for even you know, is that kind of where we should be? That's normal going forward for you?

Jeff, Well, well, I'll tell you what's normal going back to almost the Civil War. If you look at the data, what's Normal's four point seventy five percent. That's the average tenure yield at various data points. But yeah, we think that the range is going to be somewhere between three seventy.

Jeff, Well, well, I'll tell you what's normal going back to almost the Civil War. If you look at the data, what's Normal's four point seventy five percent. That's the average tenure yield at various data points. But yeah, we think that the range is going to be somewhere between three seventy.

Five and four and a half. And the way you kind of, you know.

Five and four and a half. And the way you kind of, you know.

Want to put that in perspective, if inflation's running, let's let's call it two and a half right now, the run rates too, you know, might might might that be getting ahead of ourselves to say we're it too. Let's let's call it two and a half.

Want to put that in perspective, if inflation's running, let's let's call it two and a half right now, the run rates too, you know, might might might that be getting ahead of ourselves to say we're it too. Let's let's call it two and a half.

The normal.

The normal.

Real yield is somewhere around one to two percent. So if you add to that inflation a real or a one hundred basis point to two hundred basis point kind of you know, real yield, then you're looking at a nominal yield of somewhere around four four and a half percent. So yeah, I think that that that's normal.

Real yield is somewhere around one to two percent. So if you add to that inflation a real or a one hundred basis point to two hundred basis point kind of you know, real yield, then you're looking at a nominal yield of somewhere around four four and a half percent. So yeah, I think that that that's normal.

Hey, Jeff, you got a ton of stocks that you sent us that you that you like. We don't have time to get to them all, but a couple that I want to highlight, starting with in video. You think there's still more room to run higher for video.

Hey, Jeff, you got a ton of stocks that you sent us that you that you like. We don't have time to get to them all, but a couple that I want to highlight, starting with in video. You think there's still more room to run higher for video.

You know, it's so funny. We looked at every it's almost like doing fantasy football, you know, where we sit down and you do your picks once a year for something like that. Three times a year, we really do a deep dive in all the stocks that we own, a deep deep dive on the fundamentals, evaluation of the technicals, and we rate and rank them. And Video is trading at thirty times earnings. They had one hundred and fifty percent revenue growth last year, two hundred and fifty percent earnings growth, and they're they're guiding for about eighty percent earnings growth this year, and yet they're trading at thirty times. So yeah, I think their end markets are really strong, and I do think that that's a very reasonable price for that kind of growth.

You know, it's so funny. We looked at every it's almost like doing fantasy football, you know, where we sit down and you do your picks once a year for something like that. Three times a year, we really do a deep dive in all the stocks that we own, a deep deep dive on the fundamentals, evaluation of the technicals, and we rate and rank them. And Video is trading at thirty times earnings. They had one hundred and fifty percent revenue growth last year, two hundred and fifty percent earnings growth, and they're they're guiding for about eighty percent earnings growth this year, and yet they're trading at thirty times. So yeah, I think their end markets are really strong, and I do think that that's a very reasonable price for that kind of growth.

That's got some.

That's got some.

Runway as GPUs and AI and cloud continue to do real well. And you know, if you don't like Nvidia, AMD would be also right in there with those same drivers and some real new product catalysts. Yeah, that could growth there linked to the same kind of secular trends well.

Runway as GPUs and AI and cloud continue to do real well. And you know, if you don't like Nvidia, AMD would be also right in there with those same drivers and some real new product catalysts. Yeah, that could growth there linked to the same kind of secular trends well.

And as it sits right now in Nvidia is the second best performing stock in the S and P five hundred this year, up about twenty six percent so far this year. It was the number one in twenty twenty three Advanced micro Device's AMD is the third best performing name in the S and P five hundred. It's up about twenty percent.