Bloomberg Audio Studios, podcasts, radio news. Single best idea is six seven minutes. So we're trying to keep a short podcast. We know you listen to like two, three, four podcasts. You have to listen to David Gura and the Big Take, and what is there it's like twenty eight minutes or eighteen minutes or you know, it's like it's like a it's like it's like one of those old time movies with intermission. It's like The Godfather, you know, and you have to have an intermission. You have to have an intermission in the middle of the Big Take. It's so much ginormous. We're not doing that. We're doing a podcast six minutes. Quick thought. You move on within your day, and we thank you. Were thrilled it the way we're moving up the charts, particularly in business News. Really really appreciate all the initial interest, but what it's really about the guests today. To pick two guests, we could have done like six different single best ideas. Paul Donovin is visible out on LinkedIn. He is wonderful at ubs. He's acutely smart and always with a balanced look at probability and the view out there. Every once in a while, Donovan loses it. Here is Paul Donovin of UBS scathing un the Fed. Let's listen.

Bloomberg Audio Studios, podcasts, radio news. Single best idea is six seven minutes. So we're trying to keep a short podcast. We know you listen to like two, three, four podcasts. You have to listen to David Gura and the Big Take, and what is there it's like twenty eight minutes or eighteen minutes or you know, it's like it's like a it's like it's like one of those old time movies with intermission. It's like The Godfather, you know, and you have to have an intermission. You have to have an intermission in the middle of the Big Take. It's so much ginormous. We're not doing that. We're doing a podcast six minutes. Quick thought. You move on within your day, and we thank you. Were thrilled it the way we're moving up the charts, particularly in business News. Really really appreciate all the initial interest, but what it's really about the guests today. To pick two guests, we could have done like six different single best ideas. Paul Donovin is visible out on LinkedIn. He is wonderful at ubs. He's acutely smart and always with a balanced look at probability and the view out there. Every once in a while, Donovan loses it. Here is Paul Donovin of UBS scathing un the Fed. Let's listen.

The issue I think with Powell is, first we're getting very very superficial analysis. So Pale saying, you know, inflation is taking longer than expected to get to two percent. That's not really true. Owner's equivalent rent, an obscure price that no one actually pays, is taking longer than expected to get to two percent. Everything else is in distincreation territory. And the real problem I think with the Powell Fed generally is there's no philosophy there. There's no medium term framework in which policy is being done. So what we're getting is we're data dependent. Well, firstly that's backwards looking. Secondly, that's looking at unreliable real time data. We know data quality has deteriorated significantly in the last decade. I'm Pal saying, no, I'm just looking backwards. I'm not looking forwards. I'm not going to give you a framework in which to think about policy. That's why we've got, in my view, unnecessary volatility in the market.

The issue I think with Powell is, first we're getting very very superficial analysis. So Pale saying, you know, inflation is taking longer than expected to get to two percent. That's not really true. Owner's equivalent rent, an obscure price that no one actually pays, is taking longer than expected to get to two percent. Everything else is in distincreation territory. And the real problem I think with the Powell Fed generally is there's no philosophy there. There's no medium term framework in which policy is being done. So what we're getting is we're data dependent. Well, firstly that's backwards looking. Secondly, that's looking at unreliable real time data. We know data quality has deteriorated significantly in the last decade. I'm Pal saying, no, I'm just looking backwards. I'm not looking forwards. I'm not going to give you a framework in which to think about policy. That's why we've got, in my view, unnecessary volatility in the market.

Paul Donovan and UBS, we want to touch on one thing there that I think is important and that's the British phrase. Medium term is a general rule in economics in America. There's short term and long term. That's codified within any textbook you want to look at. The British have a holdover from ages ago where they look at short term, medium term, and long term, and you'll get some real, real, close argued discussions of this. I had the clearest memory of a discussion with the Laureate of Columbia Edmund Phelps Ned Phelps on this where he just said, look, we're not going to do medium term time. I'm looking at short term, whether it's marshally and microeconomics or at something bigger, broader fed policy, the Taylor rule whatever. That's a huge divide in economics between Paul Donovan out of Oxford over in London looking at short term, medium term and long term versus anybody in America that's like medium term, come out, We're not going to do that. Someone who's not going to do that is ed Heeyman. What a joy to mister Hyman come in and visit with us today Inner Studios here at seven point thirty one Lexington ed Heeiman invented market economics, and I'm going to go back with a major shout out to ed Yard Denny and that CJ. Lawrence years ago pretty much invented chart paragraph chart. I'll give a shout out to Lockman, Oxyton and ECRI who was doing the same thing, very different economics. But what Edheiman did at CJ. Lawrence was not iconic at codified market economics. He still does that today in his research note this morning. Yes, there was discussion of the BAA spread and discussion of disinflation like we heard FED policy, like what Paul Donovan talked about, but there was also uncertainty of edheim and looking at the X number of recessions he's been through and saying, do I really know what's going on now?

Paul Donovan and UBS, we want to touch on one thing there that I think is important and that's the British phrase. Medium term is a general rule in economics in America. There's short term and long term. That's codified within any textbook you want to look at. The British have a holdover from ages ago where they look at short term, medium term, and long term, and you'll get some real, real, close argued discussions of this. I had the clearest memory of a discussion with the Laureate of Columbia Edmund Phelps Ned Phelps on this where he just said, look, we're not going to do medium term time. I'm looking at short term, whether it's marshally and microeconomics or at something bigger, broader fed policy, the Taylor rule whatever. That's a huge divide in economics between Paul Donovan out of Oxford over in London looking at short term, medium term and long term versus anybody in America that's like medium term, come out, We're not going to do that. Someone who's not going to do that is ed Heeyman. What a joy to mister Hyman come in and visit with us today Inner Studios here at seven point thirty one Lexington ed Heeiman invented market economics, and I'm going to go back with a major shout out to ed Yard Denny and that CJ. Lawrence years ago pretty much invented chart paragraph chart. I'll give a shout out to Lockman, Oxyton and ECRI who was doing the same thing, very different economics. But what Edheiman did at CJ. Lawrence was not iconic at codified market economics. He still does that today in his research note this morning. Yes, there was discussion of the BAA spread and discussion of disinflation like we heard FED policy, like what Paul Donovan talked about, but there was also uncertainty of edheim and looking at the X number of recessions he's been through and saying, do I really know what's going on now?

I'm really struggling with this. I don't think it's different this time. It's always different when you look back at it. I've been through seven recessions. Everyone has been associated with an inverted deal curve and there have been no fall signals, hands down credit spreads. When I do a lot of econometric work, they scream at you, and when they go down, it says things are pretty good, and when they go up, it says things are pretty bad. And right now, spreads are tightening up, they're coming down, and so at the moment it's beginning to be sprying here in the Tristate area and everything's looking pretty good.

I'm really struggling with this. I don't think it's different this time. It's always different when you look back at it. I've been through seven recessions. Everyone has been associated with an inverted deal curve and there have been no fall signals, hands down credit spreads. When I do a lot of econometric work, they scream at you, and when they go down, it says things are pretty good, and when they go up, it says things are pretty bad. And right now, spreads are tightening up, they're coming down, and so at the moment it's beginning to be sprying here in the Tristate area and everything's looking pretty good.

Ed Heimen there on credit spreads, one of the things we try to do is get away from the jargon. I fail at that to keep the interview going. And we're worried about Lisa Mantal getting enough time or Michael bar getting You know Michael Barr. You should see him if he loses thirty six thirty seconds of airtime total tantrum, I mean a complete cow. So you know we got to be careful about that. I'm kidding, Eric, I'm kidding. But you know the idea here is we can't always translate the jargon. What's a spread? A spread is the relationship of a corporate bond to a full faith in credit government bond, something you can trust, like a treasury The ten year treasury note is just one example. So think of it in yield. When the yield comes down, the price goes up in the yield comes down on a corporate bond more than the government. Dynamic spreads narrow the yield of a Colgate Palmala bond comes down closer to the full faith in credit that spreads narrowing. I hope that was somewhat clear. Was that even close? Eric? I went down in flames? There didn't I got C minus. Anyways, ed Heiman and Paul Donovan single best idea today. We're out on Apple car Plight. Thank you so much for that. Just amazed at YouTube. Just I don't know where this YouTube thing's going, but we're building it out. Each and every day you go to YouTube, you search Bloomberg Podcasts. I'm shocked at how many people are watching this at home. They're not on their cell phones. They're like watching YouTube at home, which is very very cool. And thank you to Apple and Apple Podcasts. This is single bets Idea

Ed Heimen there on credit spreads, one of the things we try to do is get away from the jargon. I fail at that to keep the interview going. And we're worried about Lisa Mantal getting enough time or Michael bar getting You know Michael Barr. You should see him if he loses thirty six thirty seconds of airtime total tantrum, I mean a complete cow. So you know we got to be careful about that. I'm kidding, Eric, I'm kidding. But you know the idea here is we can't always translate the jargon. What's a spread? A spread is the relationship of a corporate bond to a full faith in credit government bond, something you can trust, like a treasury The ten year treasury note is just one example. So think of it in yield. When the yield comes down, the price goes up in the yield comes down on a corporate bond more than the government. Dynamic spreads narrow the yield of a Colgate Palmala bond comes down closer to the full faith in credit that spreads narrowing. I hope that was somewhat clear. Was that even close? Eric? I went down in flames? There didn't I got C minus. Anyways, ed Heiman and Paul Donovan single best idea today. We're out on Apple car Plight. Thank you so much for that. Just amazed at YouTube. Just I don't know where this YouTube thing's going, but we're building it out. Each and every day you go to YouTube, you search Bloomberg Podcasts. I'm shocked at how many people are watching this at home. They're not on their cell phones. They're like watching YouTube at home, which is very very cool. And thank you to Apple and Apple Podcasts. This is single bets Idea

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