♪ >> what we are seeing right now is these levels of dangerous optimism building. >> right now people are just trading on big, round numbers. >> we have a very big cushion that has been building in excess saving. >> a lot of the u.s. stimulus isn't stimulus at all. it is an antidepressant. >> we will have a more normal recovery with or without the stimulus. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone.

on radio, on television across this nation, a day of focus on washington and impeachment, but much more for our global wall street audience. it is a most interesting cross asset bull market floating on liquidity, liquidity, liquidity. let's get right to that discussion. futures negative seven. everywhere you look, there's a new wants of interest. that's there's a nuance -- there's a nuance of interest. jonathan: that's true, but it is showing up in various places. away from just the price, i know it makes the headline, record low yields. i know it gets attention, but it is the mechanic behind the price that i think needs a little bit more focus. tom: you wonder where the demand comes out -- rather, the corporate issuance comes on. brent crude near $61 a barrel. the same dynamic in fixed income, which is about corporate issuance.

we are seeing it, but you wonder if it comes in with a vengeance given the news. jonathan: "the wall street journal" had a piece about the commercial paper market in europe, and these yields below the depot rate at the ecb. the story was the fact that savings and savings across the united states and europe are skyhigh. where's that money gone? that is sitting in money market funds. it goes to the commercial paper market. comer prepay sure -- commercial paper issuance has plummeted. buys all of this happening broadly? in fixed income, the balance sheets are getting bigger and bigger at a time when savings are getting higher and higher. there's a real issue here between supply and demand as to why yields are where they are. what i am trying to understand is what that supply dynamic looks like. when the economy reopens, what happens to those money market funds? what happens to those savings? tom: let's do it real simple.

what portion of cash is cash forever, or is cash that can go to equity markets? the answer is we don't know. lisa: cash to buy a plane flight to go somewhere. so many people have parked money they cannot spend in the service economy. jon is raising a really important point, and there's another question. how do you measure risk in this type of environment? when you have this type of shortage of assets artificially imposed on a market because of central-bank activity, it is not like companies are selling debt to meet the demand. there is reversing qui right now in the high-yield reverse inquiry right now in the high-yield debt market -- reverse inquiry right now in the high-yield debt market. i am looking right now at high-yield bonds outstanding in the u.s., $1.6 trillion. that is off of $1 trillion back at the nadir of the crisis. jonathan: you got to explain to people that don't follow that market, this is people calling

up please and asking, will you issue some debt please? that is where we are in the credit market in the united states. tom: i'm sorry, but it harkens back so much to 2005 and 2006, where institutions were begging for 10 basis points as well. some of the parallels here are quite extraordinary. let's do this with a data check. the vix really doesn't give us much information. jonathan: the bond market in italy absolutely plunging, around 50 basis points. not sure where we are on the screen, but 50 basis points yesterday. tom: lisa, your data point, go. lisa: one of the most key data points is the gap between the key yield curves in the u.s. and germany. basically, that is the widest since 2011 because you've got inflation expectations surging in the u.s. and not so much in europe. tom: brilliant. brian levitt joins us now from

global wall street. you know him from invesco, their global market strategist. we have a transatlantic gap right now. does that mean invesco buys america? brian: i think it means that this dollar decline we have seen probably stabilizes here. i don't think the u.s. dollar is about to surge because you got a lot of stimulus coming already in the u.s. market and coming to the u.s. market, so this is very unlikely to be a very strong dollar environment. i think the way to read this is the dollar had been very strong for years. that cycle has broken. there's a lot of stimulus coming. but the u.s. recovery and inflation expectations are rising. maybe that dollar environment now starts to stabilize rather than continue to weaken considerably against currencies like the euro. jonathan: so you don't buy the 2017 synchronize growth, happy story, do you? [laughter]

brian: i suspect you get there at some point. the challenge is the european economy looks challenged. emerging markets, at least in emerging asia and china, you are seeing improvements in economic activity. you start to thing about some forms of synchronization as we move through this, but currently the european markets look challenged. jonathan: if you are buying -- lisa: if you are buying the u.s., where do you look? what is the least overpriced corner right now? brian: i don't think we should say we are not buying outside the united states. emerging markets look particularly attractive. those markets are recovering and those valuations look more attractive. the united states, the reality is valuations are not going to be a great timing tool here. this is a cyclical recovery that is a type of reversion to the mean you would expect to see. so parts of the market that hadn't been loved or are

starting to perform well, but in the near term, it is your cyclicals and things that do better in a reopening economy as we progress. tom: brian gets to the heart of the matter, which is a synchronized happy talk. that really captures the "we are the world" feeling we got a while back. if that is the case, we have to make choices. is one of our choices international investment? brian: it is, and the cycles tend to move over multiple years. the united states was a large outperformer in the decade after the financial crisis. that created opportunities outside of the united states. you are seeing that catalyst in the emerging markets with improving growth and policy in the united states. waiting on it for europe, the reality of europe is the challenges of the economic condition right now. my view with regards to europe is less about cyclical exposure

to those parts of the market and more of the structural growth stories of europe. those that are going to benefit from improving economic activity in the emerging markets. jonathan: the decision of how you diversify geographically is a lot more complex than it was six months ago. what do you do? it is simple, you leverage yourself to europe, to the dollar. it is not that simple because these countries are opening up into different stages at different times. i don't think we can make the decision we used to make. isn't it more complex now? guy: it is, but -- brian: it is, but the dollar has moved, the u.s. economy seems to be gathering some momentum. but i think investors should keep it more simple than that and think about the type of businesses that they believe are structurally advantaged for this

new world and a world we will find ourselves in over the next number of years. there is a cyclical recovery at play here, but structurally advantaged companies exist all around the world, and they are going to be headquartered in europe and the states and emerging markets. i would say long-term focus on that. if you are trying to play cyclicality on this, emerging markets are playing on this. europe will get there if the truth holds about the outlook. you're right, it is the staggering of the timing of it. lisa: what if the growth perspective isn't as strong as people are expecting? brian: i think the way you hedge this is to focus less on the cyclical recovery trade and focus more on what you think

will be the structural advantages of the companies. so everybody is looking at a recovery trade, which is real simple to say, at least in the united states, bna simple small-cap. the way to hedge against a stronger -- united states, be in a simple small-cap. the way to hedge against a stronger, 83% of s&p 500 businesses are beating expectations. maybe those expectations were low, but nonetheless you've got a large number of companies doing well even if it is a challenged economic environment. jonathan: brian, thank you. i appreciate it. i pledge eyes for the technical issues as well. this segment ended with a look -- i apologize for the technical

issues as well. this segment ended with a little abramowicz gloom as well. lisa: what happens if things go wrong and we get deflation, and suddenly there becomes this deflationary spiral? tom: there we go. we needed that, jon. [laughter] we got our obligatory inflationary spiral. jonathan: that's why i picked it up. lisa: i mean, isn't that the biggest risk? jonathan: the clock is yours. lisa: let's talk about bitcoin prices. just absolute silence, huh? jonathan: what is in your cup, tom? tom: i am in a morning deflationary spiral here. i grew up with a whole bunch of this tone in my house. james sweeney of credit suisse was brilliant on this, with the

worry about deflation in continental europe three or four years ago. he said come on, it is not going to happen. it didn't happen. lisa: i am not saying it is going to happen. i am just saying it is a worse outcome then potentially inflation, and that they get what they want. you were asking worst case scenario. i can go there. jonathan: ok. enjoyed that. [laughter] coming up, julie norman joins in. tom: they play jethro tull like nobody else. jonathan: was that the 1950's, tom? tom: a little later than that. boulder, colorado. jonathan: with futures negative, this is bloomberg. ♪ ritika: with the first word news, i'm ritika gupta. there's never been a day like this in the senate. donald trump faces an unprecedented second impeachment trial beginning today. it will start with a debate on whether the proceeding is constitutional. tomorrow, house impeachment

managers and trump's defense team will each get up to 16 hours of presentations. the former president is virtually assured of an acquittal. it would get a 2/3 majority to get a conviction. the ceo of eli lilly has resigned over allegations of an inappropriate personal relationship. lilly says his conduct was not related to any business matters. in myanmar, police fired rubber bullets, tear gas, and water cannons at demonstrators throughout the country today. demonstrators were defying a ban on public gatherings. myanmar's military leader has repeated claims that last november's election was tainted by voter fraud. bitcoin rising today after soaring over the 48,000 dollars -- the $48,000 level for the first time.

tesla revealed that they bought $1.5 billion of the cryptocurrency, and would begin accepting bitcoin as payment for their electric car. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is

♪ sen. mcconnell: i am pleased that leader schumer and i were

able to reach an agreement on a fair process and estimated timeline for the upcoming senate trial that preserves due process and the rights of both sides. it will give senators ample time to review the case and the arguments that each side will present. jonathan: senator mitch mcconnell there, the minority leader on impeachment proceedings in washington, d.c. from new york this morning, good morning. alongside tom keene and lisa abramowicz, i'm jonathan ferro. your price action shaping up as follows, about one hour and 12 minutes away from the opening bell this tuesday morning. pulling back from all-time highs on the s&p 500, down 0.2%, 3900. it has happened quickly, really quickly. in the fx market, euro-dollar with a $1.21 handle. euro firmer by 0.4%, and yields back in a little bit.

just undoing some of the moves we saw this time yesterday. yields lower, coming in two points to about 1.15%. today, just a little bit softer, down 0.3% on crude. tom: the quick take here, big negative yields come in in europe. the answer is, they are speaking. jonathan: and the german two-year, just focus on the front end. we talked about a focus of assets. in germany that has been the problem for a while now. you pledge the short-term german debt collateral, which means there's a structural need for short-term debt. a lot of that has been bought. by who? the ecb. so you had this dynamic where the front end of the yield curve trades a little bit lower than the policy right at the ecb -- the policy rate at the ecb. this goes back to that "wall street journal" article that

picks up on these themes. we have an asset shortage. tom: the asset shortage may be there, and we will see that in the coming days on the tape and in the markets. julie norman is at the university college in london, a political science professor, but truly one of the world's experts on political activism and social movement. a different take on what we will witness washington today. julie norman, if you look at the republicans, the grand old party, the path from lincoln to where they are now, there seem to be partitions. one of them is militia and some of the violence we saw on january 6. tell us about the social movement that defines a more assertive, a more aggressive republican party. julie: well, i think there are different movements going on right now in the republican party. that is pretty clear. and across the left as well. part of what we are seeing in the republican party is people

who have very legitimate grievances, who saw trump as a channel for that and are getting into more of a populist way of thinking. but i think that is alongside much more long-standing groups like some of the far right extremist groups we saw at the capitol. those groups have been around for a long time. they really took advantage of that historical moment, and have been pretty savvy about recruiting individuals into their ranks these days. tom: what can be the institutional response to the reality of guns, weapons, whatever in a legislative branch , whether republican or democrat? what is the expected or best outcome for the institution? julie: this is true for democrats and republicans, that most individual lawmakers and citizens have respect for our institutions.

they want to see them function well. they don't want to see them coming places of violence, maybe even as they were in our history. i think it just makes sense that certain safeguards are put in place to make sure that happens. with that said, i don't think anyone in washington once to see the more militarized state it is in continue. those precautions were put in place for a reason following january 6, but it will go back to some corned -- some kind of normal, but with more security measures than in the past. lisa: with partisan discussions around impeachment, around the stimulus package, there has been an international effort to regain ties with some of the allies of the united states. one interesting note is that president biden has not yet had a conversation with xi jinping, even though he's had a conversation with vladimir putin of russia. what do you make of that?

julie: i think it's a couple of different things. first and foremost, you can expect them to continue some of the policies of the trump administration in terms of being tough on china. biden is not looking to change that relationship that much, if though his approach might be a little bit different. i think with that phone call, biden is also trying to show that the u.s. will stand up to russia in a way that is different from the trump administration. there are certain situations of urgency that required that call and that engagement. the new start treaty that would have expired if they did not have that call, as well as putting some pressure on russia around navalny and the demonstrations around his detention. jonathan: julie, always wonderful to catch up with you. julie norman, university college of london professor. a really important day in washington, d.c. we have almost become desensitized to impeachment proceedings, which is

remarkable, but that is where we are at. tom: whatever anybody's politics is, we will have to see. we all underestimate what we are going to witness today. jonathan: unlike last time, some nuances. do we know where senator mcconnell sits on this? i know that typically he would not predetermine the outcome, but that was the story last time. 's are way more complex this time -- things are way more complex this time. tom: way more complex. i am still not clear about the timeline this week. lisa: we are not necessarily going to get any real answers of where mitch mcconnell stands or where any republican stands. they don't want to answer that question, which is the reason it will be a constitutional issue to be trying a president in congress after they have already left office. they want to kick off the trial and ended quickly.

17 republicans would have to switch sides to push this forward. jonathan: i think that is the point, typically for any kind of trial. you wouldn't want to predetermine the outcome. you wouldn't want to know what the jury thought for it happened, but that was the story last time around. but like i say, most people in this country come of this used to be a really moving moment. we hardly ever seen it in the united states. whenever it happened, this used to be a moving moment. now, what is it? tom: we are desensitized. jonathan: totally. tom: i look at the timeline here. it feels like it is april 15 or june 1, and we are just weeks, days into 2021. but that's the way the new slow has been. jonathan: want to check in on the price action this morning, a little soft. equities down just a little bit. we are coming in 0.2%, down about seven points.

3900, go to cash. lisa: triple leveraged. jonathan: this move in the last few months -- tom: it has been a dip. jonathan: it's been unreal. that's a dip you want to buy, tom. [laughter] from new york, this is bloomberg. ♪

jonathan: from new york city, this is "bloomberg surveillance." let's get a quick snapshot of the price action. futures coming in .1%. record high the s&p coming into tuesday. six-day winning streak. taking some weight off the nasdaq. into the bond market, the shape of the curve over the last couple of weeks, getting steeper, yields higher. there's an elephant at the front end, it is called the federal reserve. in the long end, that is where the flexibility is. 1.1981 is the new high. right now 1.1516. a slightly flatter yield curve on the day. foreign-exchange, euro-dollar is

like yesterday. yesterday reversed. euro-dollar breaking 1.21 and we sit at 1.2098. euro-dollar up about .4% on the session. tom: we welcome all of you. michael mckee is always with the smart conversations. time flies. five years in for the gentleman from dallas. michael: yes, who was the gentleman from boston and new york before that. we have known him for a long time. he is a symbol that life goes on. robert kaplan is the president of the dallas fed and a kansas city chiefs fan. we thank you for getting up and continuing on even though that was a rough one. pres. kaplan: there is always next year. we will be back. michael: there is a question of what kind of inflation dangers are there from additional

government spending. if inflation does break out, you have to deal with it. what is your estimate? if we get the kind of additional stimulus from washington, what kind of inflation danger does that present? pres. kaplan: there is no president that if -- there is no question that if we are able to get people broadly vaccinated and defeat the variants of the virus and we have a reopening, that along with fiscal support will mean we have strong gdp growth. we will make big improvements on unemployment. it would not be surprising to see the cyclical elements of inflation build. i think you will have some supply outages. we are already seeing evidence of it. semiconductors, metals, wood products, you may even see in oil markets.

i do not think those will be persistent. i do not think those will be long-term. i think there is no question cyclical forces will build, and over time the question for me is how strong are the accelerating forces of technology and technology enable disruption which have been muting inflationary pressures for some time. how those forces play out over time? that is what i will be watching for. the temporary jump in inflation will not surprise me. the question will be how persistent it is. for me i think the jury is out. michael: they are talking about a package that would be three times the size of what the cbo projects the output gap could be. is that too much? pres. kaplan: i will deliberately stay away from that topic. right now, at the dallas fed,

before any new packages is enacted, our forecast for gdp growth this year is approximately 5%. it is going to be loaded toward the later parts of the year and it assumes we will be able to vaccinate the population broadly and defeat the variants and get more mobility and engagement. what i am hearing in my district is what we need first and foremost which is being discussed, we need more help to achieve the vaccinations. it will take mobile units, more personnel, but if you can get people more broadly vaccinated, that will open the small businesses and get a lot of these people that are out of work back to work, and more money to reopen schools.

schools i am talking to need to be retrofitted and we have a historically high level of women who have left the workforce, working mothers, and we need schools to be reopened. some investment also in childcare to get those women back into the workforce. that is critical. obviously extended unemployment benefits to bridge until we are able to get people back to work, that is another priority i am hearing. those are some of the things i've mentioned. i will stay away from the debate in washington. michael: we have $3 trillion authorized for covid relief and another 2 trillion is what they are talking about. the argument has been that is sustainable because interest rates are so low, and as long as we keep the economy growing faster than the debt we will be ok. are you confident that can happen, that the economy will grow faster? pres. kaplan: we will get a

strong boost to gdp growth in 2022 and above -- in 2021 and most likely above trend in 2022. the issue over the horizon is what are we doing to improve sustainable gdp growth? what do i mean by that. once we recover from the whole we are in, we will get back to real challenges we had pretty covid. slowing workforce growth, aging of the population, and productivity growth has not been sufficient to offset that. what would help with that, find ways to improve labor force growth, again i talked about women reentering the workforce, but also early childhood literacy, improving secondary education, skills training, more widespread wi-fi in the united states. i would love to see more investment in education and some

infrastructure items, particular wi-fi that create more sustainable growth. that will be the challenge will be talking about over the horizon, how to improve workforce growth and productivity. will we grow faster than debt grows? we will have to find ways to improve gdp growth or otherwise the answer, i do not know whether the answer will be yes or no otherwise. michael: i know you and all of your colleagues have said it is too early to talk about when you might taper qe. i am wondering how you assess the danger of inflating a bubble in financial markets, which is what a lot of people on wall street are talking about, and the 100 $20 billion you are buying a month to keep markets functioning when markets are functioning just fine. is there a point at which you think the danger of the market bubble is bigger than the danger of pulling back? pres. kaplan: the way i make

that trade-off, while we are in the teeth of this pandemic, and until it is clear we have whether the pandemic, i think is appropriate to be aggressive with our tools. once it is clear that we have weathered the pandemic, and we are not out of the woods yet, but once we have put the pandemic and the effects of it in the rearview mirror and we are making substantial progress towards full employment and price stability, i think it would be far healthier to be weaning off these his -- these extraordinary measures. that is the issue. as soon as it is clear we have gotten past covid, which i do not know when that will be, i think it will be far healthier to be weaning off these extraordinary measures. michael: speaking of questions about bubbles in the markets, your initial career was as an investment banker and now we

have this back, ipo -- this spac/ipo mania going on. does that tell you where we are in financial markets? pres. kaplan: i will not comment on any individual situation, but i would say broadly when you are keeping rates at zero and you are committed to keep rates at zero for an extended period, you are buying $80 billion in treasuries and $40 billion in mortgage backed securities, we should expect that we'll have a material impact on liquidity, financial assets, and that is why i have said we would be wise to wean off of these extraordinary measures because these measures certainly have an impact on financial assets, and we would be wise for the fed to acknowledge it and be sensitive to it. i am very concerned and watching

excess risk-taking and access in the non-bank financial sector. the issue is while we are fighting this pandemic and until it is clear we are out of the woods, we have to be aggressive. the challenge will be after it is clear we have weathered it, we have to move away from these extraordinary measures. i think we will be far healthier for it. michael: i know the fed does not regulate equity trading, but what you think of the enthusiasm going around? does that were you in terms of the potential effect on the economy? pres. kaplan: i will not comment on any individual situation. i do not see systemic risk in these markets. i do think, and i will speak

broadly, you are seeing the effects of $80 billion of treasuries and $40 billion of mortgage backed securities. i think it is necessary while we are fighting the pandemic, but after we get beyond it, i think we need to wean off some of these extraordinary measures. i am watching non-bank financial markets carefully and why would call -- i mean positioning when volatility is relatively low and credit spreads are tight and liquidity is good look be nign, but when you get a volatility spike you find people are over risk and they have to de-risk and do it quickly. we saw some of that in march. i am concerned we should watch that carefully because that is

always something we need to be aware of and i am watching that carefully. michael: you are our oil guy. how has the pandemic left the oil patch? i know president biden's energy plans are somewhat controversial in your area. have you model the effect of moving away from fossil fuels and the impact on your district? pres. kaplan: we have and most participants in the industry have modeled it. you have an industry that is far more consolidated, and you have seen a number of failures, bankruptcies, consolidation, deleveraging. you've also seen an industry that will spend a lot more money on sequestration, carbon capture , and reducing greenhouse gas emissions and also an industry committed, when they have excess cash flow to returning more to

shareholders and less to drilling. because of that we think supply and production in the united states will be flat this coming year, and even though prices are moving up, people may be surprised supply does not move up the way they would've expected in the past. the challenge in the united states is to keep a healthy oil and gas business, understanding a smaller percentage of energy consumption is going to go to fossil fuels, and much more aggressive energy consumption to the wind, solar, other alternatives. the challenge will be to make the transition. michael: robert kaplan, dallas fed president, thank you for joining us on bloomberg. jonathan: michael mckee, great work as always. two important issues at play. one is the inflation outlook. a short-term burst of inflation many people anticipate when we reopen.

where the debate will emerge more is on the asset purchase program. tom: tomorrow, goods inflation up to the service sector inflation which has come down. it is a mystery where they will be in six months. jonathan: good morning. this is "bloomberg surveillance." ♪

>> prior to the pandemic, most would be in the office next to

their trading screens, close to their brokers. i think this last pandemic taught all of us that we can trade from home. tom: we say good morning to you on radio and television. lisa abramowicz and tom keene. jon ferro indeed preparation for a 9:00 launch. he looks at markets struggling after day after day. dow futures -60. this is well-timed. barry ritholtz is a great student of the influences. it is a word misused. 20 years ago or 30 years ago it was a specific and acute word about persuasion. there was a guy at arizona state who was wonderful with what was this strange thing of modern media and persuasion. barry ritholtz joins us today with his wonderful podcast and also with ritholtz wealth

management. persuasion in bitcoin. explain to meet the persuasion element, the elements of the battle over bitcoin and the shock of 45,000. barry: there two broad types of influence on people. if you want to put it in economic terms, it is the micro and the macro. cialdini's focus was one on one individual, whether it was sales or corporate relationships or whatever his personal relationship, that sort of influence, those sorts of persuasion is where he focused his work. for sure there is a lot of that going on in the crypto space. the broader approach is the one taken by bob schiller of yale, who focused on narratives and

how the storylines can influence not person by person, but entire crowds all at once. what we are seeing with crypto, especially given elon musk's most recent announcement is a combination of both. the story driving the crowd, but the people who feel like elon musk is speaking directly to them, that is more of the ciald ini approach. tom: what is interesting is the uproar, positive or negative, does it speak to the institutional structure of bitcoin? do you have an understanding of the institutional underpinnings of bitcoin? barry: of how it is produced? tom: how it is produced, the bid in demand? barry: a lot of this traces back to the financial crisis, where

we saw a monetary but not a fiscal response to save the economy. that poured fuel on the fire to all sorts of concerns about income and wealth inequality, as well as the odd currency. it is not a surprise that a lot of people who were deeply frustrated by how the economy was saved, not why it was saved, but the methodology used, got frustrated with central banks and centrally planned economies, even in capitalist countries, and this is a libertarian way to step back and say let's allow the marketplace to determine the value of a currency. hold aside the fact that the marketplace does that with fx, but the fact that no one government can control something

is the narrative that drove the early adopters into bitcoin. lisa: there is a larger question, which is how much the backdrop has changed as we head to the next economic cycle. joe weisenthal of bloomberg markets was talking overnight about how this feels like we are getting a change, a fundamental change in the economy like a higher inflationary tilt. do you think that is valid as somebody who invests in indexed funds, as someone who invests more broadly in the markets that we are entering a new regime where there is a new paradigm? barry: i have to begin by pointing out we have seen a decades worth -- 12 years worth of forecasts of inflation and hyperinflation and currency depreciation, and they have been nothing but wrong because they have completely misunderstood the output gap, both in employment and production, and

you do not get inflation when you nearly have low rates and you did not get inflation when you have merely fiscal stimulus. i was just reading a piece, i do not want to name shame anybody, but from august 2009, warning about inflation, the fed is doing it, it reflects a fundamental misunderstanding of how the economy works. one day we will have inflation. one day we will have wage pressure, but to get to that you needed a lot of things to happen besides zero interest rates and a few trillion dollars in fiscal stimulus. you need pretty close to full employment. you need pretty close to a big ramp up in gdp production, and you start to need a shortage of assets. not a handful of houses in the hamptons are palm beach because

there's only so many and we are supply constrained. you need demand far exceeding supply. we are years away from that. the short answer is i'm not worried about inflation in 2021. we could talk in 2022 and see the state of the world. tom: barry ritholtz, thank you so much. lisa, i find the crosscurrents fascinating. i can honestly say we are staggering into the second week of february and the news flow is such where you would want to completely reset outlooks for 2021. lisa: we saw a lot of the consensus trades turning on their heads. starting with the equity market where you saw the extra leg higher, but also with the dollar. that is one of the huge consensus trades, the idea that short the dollar the dollar will weaken versus all other

currencies. the dollar has not weekend, it has strengthened. this has turned a lot on their heads. tom: year-to-date gallup 3%, -- the dow up 3%. i do not have bitcoin in front of me. lisa: up one million. there is a question, there is one company that had no profit, that was threatened to go bankrupt last year, a renewable energy company, it is of thousands of percent because people are pouring into this bet this administration will back these companies. you think about some of the outliers and you wonder how much they are indicative of some of that risk-taking robert kaplan was talking about. tom: exactly. robert kaplan summing it up. we thank you for watching and listening on bloomberg radio and bloomberg television. i want to pay particular to

kevin cirilli tonight at 5:00 on bloomberg radio. at 12:00, david westin with ben cardin of maryland. look forward to that. this is bloomberg. good morning. ♪

♪ jonathan: from new york city for

our audience worldwide, good morning, good morning. "the countdown to the open" starts right now. we pulled down from all-time highs. we begin with the big issue. when is hop too hot? >> we should not ignore the inflation trade. >> inflation moving higher. >> the 10 year breakeven is 2%. >> where that number gets 2.5%, it does turn into a little bit of a headwind. >> as there is more stimulus, you increase inflation expectations. >> fiscal policy in the driver seat. >> it will drive real rates up. >> growth will be accelerating. >> you can see a big inflation scare. >> a fair amount of tolerance. >> we are expecting sustainability of monetary policy. >>