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Germany Clears Path for Early Election · Bloomberg Intelligence

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  Speaker 2: All right, here we go. Here's the headline.
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  Speaker 3: German Parliament clears the way for early election in February.
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  Speaker 3: So then it does imply that Olaf Schultz did lose
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  Speaker 3: the snap election and will excuse me, did lose the
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  Speaker 3: vote of no confidence and then we'll have the snap
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  Speaker 3: election in late February. So to that point, expenditures on machinery,
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  Speaker 3: for example, are more than nine percent below pre pandemic levels.
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  Speaker 3: And it's those family owned companies that's saying they're not
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  Speaker 3: even planning to replace what breaks, and they're blaming breocracy
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  Speaker 3: and unpredictable policies. I mean, yikes, that's a tough one.
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  Speaker 4: It really is. And then again, and I'm just looking
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  Speaker 4: at some reporting from Bloomberg and just you know, saying,
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  Speaker 4: like Germany, in many parts of the world, Germany's politics
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  Speaker 4: has shifted to the right and it is fragmented, so
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  Speaker 4: making getting a coalition government together perhaps even more difficult
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  Speaker 4: than in past times. And we're seeing something similar in
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  Speaker 4: France as well, with their left and right. It kind
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  Speaker 4: of makes what we do here seem a little bit
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  Speaker 4: more a little better than maybe we sometimes think.
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  Speaker 3: All right, Oliver Krook joins us now All Bloomberg europe
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  Speaker 3: correspondent for more on this. I mean again that headline
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  Speaker 3: is German parliament clears the way for the early.
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  Speaker 2: Election in February. All right, Oliver, give us the details.
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  Speaker 5: Quite a day for all Off Schultz before the parliament.
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  Speaker 5: This all began basically a one pm local time here
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  Speaker 5: with a twenty five minute speech by Olof Schultz where
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  Speaker 5: he was really sort of putting out his sort of
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  Speaker 5: stakes in terms of what he would like to have
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  Speaker 5: to do with another term as chancellor. Then a two
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  Speaker 5: hour debate by all the lawmakers in the Bundestag. This
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  Speaker 5: is a pretty spirited, i would say, campaign event, in
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  Speaker 5: a campaign generally speaking by German standards, it's been fairly personal.
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  Speaker 5: It's been quite vicious at points. I mean, Olaf Schultz
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  Speaker 5: was talking about the FDP, that is the party that
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  Speaker 5: had the finance ministry. He fired as Finance minister because
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  Speaker 5: of disagreement over the budget. He's saying that basically they're
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  Speaker 5: morally unfit to govern. Mertz, for his part, the head
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  Speaker 5: of the CDU, Angela Markles, Merkel's traditional party, so that
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  Speaker 5: you know Schultz is a failed chancellor. And then on
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  Speaker 5: the other side of things, on the far right, you
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  Speaker 5: have the Alternative for Deutschland, the far right group that
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  Speaker 5: has twenty percent of the vote going into this election,
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  Speaker 5: saying that basically Germany is on the brink of collapse.
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  Speaker 5: In a vote for Frederic Mertz and the CDU is
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  Speaker 5: a vote for war with Russia. So that's some of
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  Speaker 5: the flavor of what we had today. And after that,
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  Speaker 5: we had these lawmakers going forward and putting forward and
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  Speaker 5: voting against Ola Schultz government as it turns out of
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  Speaker 5: the end, and this is the last step to basically
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  Speaker 5: Ola Schultz to go to the President of Germany to
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  Speaker 5: basically dissolve the government and basically pave the way for
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  Speaker 5: that election that is slated for February the twenty third.
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  Speaker 4: All right, feb s fast forward to February twenty third.
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  Speaker 4: Is any expectation of how this may go. To talk
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  Speaker 4: to us about what are some of the options for
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  Speaker 4: the German people.
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  Speaker 5: Yeah, so what you have right now is the CDU,
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  Speaker 5: the again the conservative center right party of Germany that
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  Speaker 5: is basically leading the polls really since the beginning and
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  Speaker 5: for you know, a couple of years. Now I have
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  Speaker 5: about thirty one percent of the vote. What is interesting,
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  Speaker 5: what makes this election quite a bit different from ones
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  Speaker 5: in the past, is that you have the Alternative for
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  Speaker 5: Deutschland again, the really quite far right party in Germany
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  Speaker 5: with number two spot with twenty percent, basically a fifth
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  Speaker 5: of the German vote. That has not happened in really
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  Speaker 5: post war Germany at all. So that is sort of
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  Speaker 5: one of these sort of clear issues there. And the
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  Speaker 5: thing is that nobody will work with them. Basically, no
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  Speaker 5: coalition is possible with the AfD. This has been made
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  Speaker 5: clear even by you know, the conservative parties within Germany.
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  Speaker 5: They just won't basically touch it. Then Olaf Schultz has
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  Speaker 5: been closing the gap a little bit on third place,
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  Speaker 5: and that basically sets us off for a grand coalition
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  Speaker 5: CDU SPD. This is something that has happened a lot
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  Speaker 5: in history. Merkel, you know, had this this arrangement. In fact,
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  Speaker 5: Olof Schultz was the finance minister under Merkel under that coalition.
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  Speaker 5: The issue that that brings is that that may bring
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  Speaker 5: some of the same problems that we had with this government,
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  Speaker 5: which is massive disagreements on how to spend money at
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  Speaker 5: a time when the German economy is really limping, there
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  Speaker 5: is zero growth, and as a consequence, as we're learning
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  Speaker 5: in France as well, when you have zero growth, you
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  Speaker 5: don't have as much money to play with, you have
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  Speaker 5: budgets that bring down the government.
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  Speaker 3: Here's my totally unfair question to you, Oliver. I'm just
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  Speaker 3: wondering in what capacity in Europe is snap elections ever worked.
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  Speaker 3: I'm like genuinely trying to think back, and it seems
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  Speaker 3: like a lot of times the individual and power things
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  Speaker 3: that it will help cement a mandate at some point,
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  Speaker 3: and that's why this sort of eventually evolves, but it
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  Speaker 3: never seems to work well.
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  Speaker 5: So listen, that's what makes it. That's the sort of
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  Speaker 5: distinction between the German snap election and the French one.
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  Speaker 4: Right.
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  Speaker 5: The German one is basically forced because they basically fired
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  Speaker 5: one part of their coalition government and basically kicked them
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  Speaker 5: out of government and no longer had a mandate to govern,
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  Speaker 5: so they just basically had to do it. This is
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  Speaker 5: not going to go well for Olof Schultz, that is clear.
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  Speaker 5: The mac Hoole one was a bit more of a
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  Speaker 5: wild card, really a kind of you know, really a
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  Speaker 5: skydive into sort of political uncertainty, and really I think
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  Speaker 5: seen by most as a real miscalculation because it did
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  Speaker 5: not go at all his way, and we're seeing the
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  Speaker 5: sort of consequences of that. To say when it has worked,
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  Speaker 5: I mean I only because I was reading about this today.
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  Speaker 5: If we have to go back to the nineteen seventies,
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  Speaker 5: I can give you an example of Willie Brandt in
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  Speaker 5: the sort of west of Germany. So that was one
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  Speaker 5: to sort of consolidate some power. But yeah, I have
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  Speaker 5: to say the last few, certainly this year, have not
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  Speaker 5: really gone that way for these leaders.
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  Speaker 4: And Oliver, you're mentioning about the AfD, the far right
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  Speaker 4: party now roughly twenty percent of the votes. I'm not
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  Speaker 4: sure you can ignore them anymore. I mean, how can
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  Speaker 4: a couplation go from ignore one in five voters.
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  Speaker 5: Well, this is a very interesting part of the debate,
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  Speaker 5: and I think it's something that we've seen across the
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  Speaker 5: political spectrum in a number of different countries. I mean
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  Speaker 5: you arguably, you know you've had this happen In Italy.
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  Speaker 5: You have Georgia Maloney, who was once really considered a
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  Speaker 5: sort of pariah, this sort of Brothers of Italy. She
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  Speaker 5: is now Minister Vidley and in some ways the European
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  Speaker 5: leader with the most powerful mandate in all of Europe.
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  Speaker 5: You're seeing the same thing happening in France with Marine
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  Speaker 5: Lepenn who you know, for a very long time was
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  Speaker 5: basically totally ignored by the political establishment in France and
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  Speaker 5: that is no longer an option. The question is when
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  Speaker 5: does that come to Germany. Of course, the issue with
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  Speaker 5: Germany that comes fraught in Leyden with much more political
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  Speaker 5: charged issues from the past and basically with the far
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  Speaker 5: right and the sort of history of fascism that has
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  Speaker 5: occurred in Germany. This is a very sensitive topic for
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  Speaker 5: the Germans and for many people in Germany, which is
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  Speaker 5: why you see a lot of protesting in the streets
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  Speaker 5: against this party. But again increasingly something that just cannot
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  Speaker 5: be ignored.
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  Speaker 3: And my real question is does any outcome lead the
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  Speaker 3: German government to spend more money? Period, That's the only
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  Speaker 3: thing that's going to make a big difference.
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  Speaker 5: Yeah, and the answer no likely outcome will basically lead
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  Speaker 5: to that. Because there was some debate about this going
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  Speaker 5: into the election that we were seeing from the CDU,
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  Speaker 5: the center right party, basically saying that they were, hey,
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  Speaker 5: maybe going to think about, you know, releasing the debt break.
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  Speaker 5: There would be some conditions. But we actually saw a
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  Speaker 5: copy of their early draft of their platform which they
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  Speaker 5: haven't yet released, that says that basically, you know, dead
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  Speaker 5: of today is the tax of tomorrow. We are not
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  Speaker 5: going to touch the debt break. And this is the
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  Speaker 5: fundamental point here in Germany, right, what is the point
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  Speaker 5: and this is what many critics think of having really
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  Speaker 5: really low borrowing costs if you don't borrow any money
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  Speaker 5: when you're in a crisis situation. And what is interesting
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  Speaker 5: is that Angela Merkel has actually just released her memoir
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  Speaker 5: and she is the one who actually brought in the
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  Speaker 5: debt break in two thousand and nine. And just to
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  Speaker 5: remind people, this is part of the constitution, This is
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  Speaker 5: not just the law. This takes two thirds of the
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  Speaker 5: parliament to change the debt break. She is advocating now
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  Speaker 5: that they do something about the debt break and they
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  Speaker 5: change it. So this is going to be at the
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  Speaker 5: very center of things, but at the moment not looking
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  Speaker 5: like it's going to change.
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  Speaker 4: Is there any expectation that there could be a very
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  Speaker 4: a challenge to this change in power, that there may
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  Speaker 4: be some I don't know, just something around this election
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  Speaker 4: that could get even worse here for the German people.
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  Speaker 5: I mean, I think that the problem with this election
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  Speaker 5: and this sort of again another coalition government and you
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  Speaker 5: know a bit of disagreement, is that it's just basically
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  Speaker 5: not going to solve Germany's fundamental problems. And I think
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  Speaker 5: that even when you look at the platforms of what
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  Speaker 5: a lot of these politicians are offering, the business community
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  Speaker 5: that I speak to, the lobby groups that I speak to,
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  Speaker 5: is basically, you know, everyone seems to be coming to
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  Speaker 5: the sick man of Europe with cyclical medicines. What we
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  Speaker 5: have is a structural illness.
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  Speaker 1: Right.
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  Speaker 5: There are problems with the energy sector, there are problems
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  Speaker 5: with labor costs, and there's a problem with a business
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  Speaker 5: model that was basically very export oriented, where you have
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  Speaker 5: all of your inputs that are much more expensive in journey.
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  Speaker 5: Also at a time when you have just much less
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  Speaker 5: globalization and everyone turning inwards and you're competing against the
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  Speaker 5: United States with the Inflation Reduction Act, you're competing with
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  Speaker 5: China with huge amounts of state support, and the Germans
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  Speaker 5: are just not seemingly sort of realizing the situation. You
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  Speaker 5: can cut tax, you can cut bureaucracy. That will help,
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  Speaker 5: but the question will still remain, what is going to
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  Speaker 5: drive growth in Germany. They don't have a sprawling tech sector.
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  Speaker 5: They have huge amounts of engineering sort of prowess, but
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  Speaker 5: they really need to get this economy moving, and that
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  Speaker 5: is the sort of big problem for politicians here really
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  Speaker 5: don't have an answer to that question.
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  Speaker 2: I'm going to steal that from you.
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  Speaker 3: So it's structural issues, but everything has a cyclical solution.
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  Speaker 3: I'm going to totally paraphrase it and steal it. But
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  Speaker 3: before I let you go, do we've the investors that
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  Speaker 3: you speak to feel like this situation is adequately reflected
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  Speaker 3: in the stock market and the bond market.
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  Speaker 5: Well, this is what's interesting, right, The sort of guarantee
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  Speaker 5: in the bond market is the fact that basically Germany
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  Speaker 5: has very very little debt and they're not going to
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  Speaker 5: that's not going to change any time anytime soon. Right,
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  Speaker 5: So that is sort of puts a cap and that
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  Speaker 5: sort of you know, keeps the vigilantes sort of away
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  Speaker 5: from the bond market, and everything's sort of more or
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  Speaker 5: less tidy there. Right In terms of the stock market,
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  Speaker 5: I mean, we have been hitting sort of all time
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  Speaker 5: highs on the decks, you know, this year periodically, which
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  Speaker 5: again is a little bit confounding. I mean, part of
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  Speaker 5: that story is that, you know, Ryan Mettal, the biggest
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  Speaker 5: defense company in Europe, is listed in Germany, and you
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  Speaker 5: know they've had like a you know, almost six hundred
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  Speaker 5: percent rally since the war in Ukraine. So you do
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  Speaker 5: have some bright spots. Actually, sort of interesting conversation I
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  Speaker 5: had last week with the CEO of a defense company, Hensol.
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  Speaker 5: So they make sort of satellites and sensors, sorry, not
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  Speaker 5: satellite sensors and radars. They are actually taking a lot
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  Speaker 5: of workers that are being laid off from the auto
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  Speaker 5: sector and incorporating full teams from the auto sector moving
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  Speaker 5: from auto to defense. So that is sort of an
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  Speaker 5: interesting silver lining, though admittedly a very thin silver lining,
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  Speaker 5: because the auto industry is worth just hundreds of thousands
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  Speaker 5: of jobs in this country. But some of the way
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  Speaker 5: that the sort of job market is evolving in Germany.
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  Speaker 4: All right, Oliver, thank you so much. We really appreciate Oliver
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  Speaker 4: Crook Bloomberg News giving us the latest on Germany again.
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  Speaker 4: A no vote has taken place today and then they
• 10:39
  Speaker 4: are now setting elections for February. So we will stay
• 10:42
  Speaker 4: on top of that with continued reporting.
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  Speaker 3: Alex Steel here alongside Paul Sweeney is a Bloomberg Intelligence Radio.
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  Speaker 3: We bring you all the top news and business, economics
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  Speaker 3: They cover two thousand companies in one hundred and thirty
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• 11:17
  Speaker 2: What do you do if breadth is not great? We're
• 11:20
  Speaker 2: headed into the FED.
• 11:21
  Speaker 3: We should be in a Santa Claus rally, but it's
• 11:23
  Speaker 3: only being led by a handful of stocks.
• 11:25
  Speaker 2: What does that mean then for your portfolio for next year?
• 11:27
  Speaker 3: Phil Orlando one of the best out there, chief equity
• 11:30
  Speaker 3: market strategists and head of client portfolio management and federator
• 11:33
  Speaker 3: Armies is joining us.
• 11:34
  Speaker 2: Hey, Phil, what do you make of this?
• 11:37
  Speaker 3: Every day in December there's been a weak breath in
• 11:40
  Speaker 3: a month that's supposed to be relatively positive with the
• 11:42
  Speaker 3: Santa Claus rally for most assets.
• 11:45
  Speaker 2: What do you think of that?
• 11:47
  Speaker 6: First of all, good morning, Alex. Thank you very much
• 11:49
  Speaker 6: for having me back on the program. Let's not discount
• 11:53
  Speaker 6: the fact that since the first week or so in August,
• 11:57
  Speaker 6: the S and P five hundred and nineteen percent, so
• 12:01
  Speaker 6: what you would normally have expected, you know, during the
• 12:07
  Speaker 6: month of December Santa Claus rally, and on top of
• 12:10
  Speaker 6: that a post election rally. Normally the stock market November
• 12:14
  Speaker 6: and December post and election is up about five to
• 12:16
  Speaker 6: ten percent. We got a tremendous amount of that in
• 12:20
  Speaker 6: August and September and October, which historically are are you know,
• 12:24
  Speaker 6: sort of choppy months, so I wouldn't lose a lot
• 12:27
  Speaker 6: of sleep over it. Our full year target to this
• 12:30
  Speaker 6: year is sixty two hundred. We're at sixty one one
• 12:34
  Speaker 6: hundred change, so I think we've done okay. The market's
• 12:39
  Speaker 6: doing fine.
• 12:41
  Speaker 4: So twenty twenty five, Phil, what are the drivers of
• 12:45
  Speaker 4: this market? Is it the FED, is a good old
• 12:48
  Speaker 4: fashioned earnings What do you think is going to move
• 12:51
  Speaker 4: this market one way or the other in twenty five The.
• 12:53
  Speaker 6: Short answers yesah, okay. So our SMP five hundred target
• 13:00
  Speaker 6: for next year is seven thousand, So we're going to
• 13:02
  Speaker 6: go from sixty two hundred we think to seven thousand.
• 13:05
  Speaker 6: What will largely drive that is continued improvement in economic
• 13:11
  Speaker 6: growth and corporate earnings growth. The stock market will continue
• 13:14
  Speaker 6: to grind higher, and with the change in administration, we
• 13:20
  Speaker 6: believe that we are likely to see a reduction in regulations,
• 13:25
  Speaker 6: perhaps later in the year, an extension and a making
• 13:29
  Speaker 6: permanence of the corporate and individual tax rates. All of
• 13:33
  Speaker 6: that is boosting animal spirits. Right now. Business and consumer
• 13:39
  Speaker 6: confidence are soaring, and we think that's going to continue
• 13:44
  Speaker 6: to drive strong economic growth, strong corporate corporate earnings growth,
• 13:49
  Speaker 6: and ultimately the stock market is going to reflect that
• 13:52
  Speaker 6: improvement in earnings.
• 13:54
  Speaker 3: Many strategists are coming out and saying like something similar,
• 13:57
  Speaker 3: but that it's really going to be in the growth trade.
• 14:00
  Speaker 3: You really need to see stronger earnings and stronger economic
• 14:03
  Speaker 3: data for the value trade to take over.
• 14:05
  Speaker 2: What do you.
• 14:05
  Speaker 6: Think, Well, the growth trade has had a pretty good
• 14:10
  Speaker 6: couple of years, I mean, driven largely by the mag sevens.
• 14:15
  Speaker 6: You know, You've got some terrific companies there. I'm not
• 14:17
  Speaker 6: going to argue against that, but the reality is that
• 14:20
  Speaker 6: we do expect that this rally to broaden out the
• 14:24
  Speaker 6: valuation in balance, if you will. With the mag seven's,
• 14:27
  Speaker 6: we think there's going to be a reversion to the
• 14:29
  Speaker 6: mean that to some degree has started in the back
• 14:32
  Speaker 6: half of this year. We think that continues over the
• 14:34
  Speaker 6: course of next year, and we play significant catch up
• 14:38
  Speaker 6: with the small caps, both growth and value and the
• 14:42
  Speaker 6: large cap value. And we think that the large cap
• 14:45
  Speaker 6: growth you know, continues to do well because they're they're
• 14:48
  Speaker 6: growing fine. I'll throw one additional wrinkle into this. We
• 14:53
  Speaker 6: think that the surprise next year might be how well
• 14:57
  Speaker 6: emerging markets. Do you know? China has been you know,
• 15:00
  Speaker 6: flat on its back to the better part of the
• 15:02
  Speaker 6: last couple of years. We think that they're starting to
• 15:05
  Speaker 6: get the memo in terms of we need some aggressive
• 15:08
  Speaker 6: fiscal and monetary policy stimulus to get their economies and
• 15:11
  Speaker 6: their financial markets going. Valuations extraordinarily attractive, and from a
• 15:17
  Speaker 6: stock market standpoint, we think em ought to be a
• 15:20
  Speaker 6: pretty good performer next year as well.
• 15:22
  Speaker 4: Hey Phil, did your outlook and a look of your
• 15:24
  Speaker 4: colleagues at Federated? Did it change materially the day after
• 15:28
  Speaker 4: the presidential election?
• 15:31
  Speaker 6: The short answers know, because you know, we had forecasts
• 15:35
  Speaker 6: that that Trump would win, that that we would run
• 15:40
  Speaker 6: the table with the with the seven key swing states,
• 15:44
  Speaker 6: that the Senate would flip to Republican control regardless of
• 15:47
  Speaker 6: who won the election, and the down ballid impact on
• 15:51
  Speaker 6: the House. Whoever won the presidency was likely to win
• 15:54
  Speaker 6: the House. So that suggested that we thought that there
• 15:56
  Speaker 6: would be a red wave and we positioned for that
• 16:00
  Speaker 6: ahead of time. So, you know, we've we've had a
• 16:02
  Speaker 6: pretty good year in terms of performance and the confluence
• 16:07
  Speaker 6: of politics and economics and and you know, the financial
• 16:12
  Speaker 6: markets have all sort of come together beautifully for us
• 16:16
  Speaker 6: this year.
• 16:16
  Speaker 3: So when you look at your target for next year,
• 16:19
  Speaker 3: does the sequencing of Trump's agenda matter in terms of
• 16:22
  Speaker 3: how you position in terms of say, immigration, tax cuts, tariffs, deregulation.
• 16:28
  Speaker 6: Yeah. So, so our expectation is that we're likely to
• 16:31
  Speaker 6: get immigration and tariff stuff early, let's say the first
• 16:36
  Speaker 6: half of this year, we think that the tax stuff,
• 16:41
  Speaker 6: the extension of the individual and corporate rates, is likely
• 16:45
  Speaker 6: to be a post Labor Day kind of an event.
• 16:49
  Speaker 6: And then we think right at the back end of
• 16:51
  Speaker 6: the year, about this time next year, we're likely to
• 16:54
  Speaker 6: get some news on Trump's ideas about the transition of
• 16:59
  Speaker 6: the leadership of AT or reserve that Powell's term as
• 17:03
  Speaker 6: the Chairman of the FED will expire in May of
• 17:05
  Speaker 6: twenty six, so it would be completely appropriate for the
• 17:09
  Speaker 6: President to announce that he's either going to recommit for
• 17:12
  Speaker 6: a third term for Powell or go to another candidate,
• 17:16
  Speaker 6: such as Kevin Walsh, for example, right around Christmas of
• 17:19
  Speaker 6: twenty five.
• 17:21
  Speaker 4: All right, Phil, thank you so much for joining us.
• 17:22
  Speaker 4: Really appreciate it.
• 17:23
  Speaker 6: Phil Orlando.
• 17:24
  Speaker 4: He's a chief equity market strategist and head of the
• 17:26
  Speaker 4: client portfolio management team at Federator Hermes. Joining us from NYC.
• 17:32
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• 17:36
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• 17:42
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• 17:47
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• 17:50
  Speaker 4: Broker Studio and streaming live on YouTube as well, So
• 17:52
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• 17:54
  Speaker 4: podcast Susanne Willie joins us here. She's kind of starts
• 17:58
  Speaker 4: getting a lot of readership on the Bloomberg Terminal. Is
• 18:00
  Speaker 4: a personal finance reporter for Bloomberg News, joining us here
• 18:02
  Speaker 4: in our Bloomberg Interactive Brookers Studio. Need to grind retirement
• 18:06
  Speaker 4: crunch haunts Americans nearing sixty. So we get some of
• 18:09
  Speaker 4: these gen X folks starting to think about retirement and
• 18:13
  Speaker 4: they're looking at their four one K and they're like,
• 18:15
  Speaker 4: I'm not sure this is going to cover. So what's
• 18:17
  Speaker 4: your reporting find.
• 18:19
  Speaker 7: Yeah, there's a lot of stress about it because, you know,
• 18:21
  Speaker 7: as the oldest exers become sixty, I mean they were
• 18:25
  Speaker 7: sort of the guinea pigs for four one ks. The
• 18:27
  Speaker 7: boomers had pensions, you know, and the four one K
• 18:31
  Speaker 7: on top of that, and now the exers are sort
• 18:34
  Speaker 7: of looking at their balances and looking at the news
• 18:39
  Speaker 7: about maybe Social Security having to be reformed within the
• 18:42
  Speaker 7: next decade, and looking at the money that they're spending
• 18:45
  Speaker 7: supporting their adult children and possibly also their parents aging parents,
• 18:50
  Speaker 7: and it's just leading to a lot of concern about
• 18:54
  Speaker 7: how the heck are you going to be able to
• 18:57
  Speaker 7: retire in comfort anytime soon.
• 19:00
  Speaker 3: I was struck by it, was it forty three percent
• 19:02
  Speaker 3: say they can't afford to retire at sixty five.
• 19:04
  Speaker 2: That is staggering.
• 19:06
  Speaker 7: It is staggering, you know. It's it's just a combination
• 19:11
  Speaker 7: of a lot of things. I mean, housing affordability has
• 19:14
  Speaker 7: been an issue, you know, the high cost of living
• 19:16
  Speaker 7: is an issue. These are sort of the peak earning
• 19:19
  Speaker 7: years for a lot of exers, and they're hit with
• 19:22
  Speaker 7: the pandemic, which a lot of them say was a
• 19:24
  Speaker 7: big blow to their savings, you know, and then just
• 19:28
  Speaker 7: the cost of groceries, the cost of housing. Everything has
• 19:31
  Speaker 7: been going up and up and up, and it's harder
• 19:34
  Speaker 7: to save and it's harder to see, you know, how
• 19:37
  Speaker 7: you eke more out of an already stretched budget to
• 19:40
  Speaker 7: put away more for retirement.
• 19:43
  Speaker 4: So is the expectation that since we're living longer, we're
• 19:47
  Speaker 4: just going to have to work longer.
• 19:49
  Speaker 7: I think that's part of it, Yes, because exers are
• 19:51
  Speaker 7: obviously going to live longer, you know, the truth is
• 19:55
  Speaker 7: really that a lot of people, at least boomers, have
• 19:57
  Speaker 7: a lot of challenges when they retire.
• 19:59
  Speaker 8: You know, they feel sort of rootless.
• 20:01
  Speaker 7: So in a way, maybe it's not so bad if
• 20:04
  Speaker 7: we can work longer. There's this epidemic of loneliness in America.
• 20:08
  Speaker 7: It gives people a sense of purpose. But the fact is,
• 20:10
  Speaker 7: you want to have the option to retire when you
• 20:12
  Speaker 7: want to.
• 20:13
  Speaker 2: Or to work differently.
• 20:15
  Speaker 3: Right, so maybe you're working part time, or maybe you're
• 20:17
  Speaker 3: working at a job that you work maybe eight hours
• 20:20
  Speaker 3: a day versus like fourteen hours, you know, like it's
• 20:23
  Speaker 3: a different kind of environment and pace.
• 20:26
  Speaker 2: Like Paul wants to be a Walmart greeter in his
• 20:28
  Speaker 2: third career.
• 20:29
  Speaker 3: Like I'm not entirely kidding about that, but we don't
• 20:32
  Speaker 3: support that part.
• 20:34
  Speaker 7: No, no, I mean, but that is, you know, that
• 20:37
  Speaker 7: is sort of the reality. You know, in your later years,
• 20:40
  Speaker 7: you may not want to grind away at the same
• 20:42
  Speaker 7: job even doing for you know, the past couple of decades,
• 20:45
  Speaker 7: but you might do consulting in your area, or you know,
• 20:49
  Speaker 7: at least you'll make some money later in life. It's
• 20:52
  Speaker 7: not just like you'll turn the switch at sixty two
• 20:54
  Speaker 7: or sixty five. And then all income coming into you
• 20:57
  Speaker 7: is over. But I mean, social security makes people a
• 21:00
  Speaker 7: lot of nervous because that's something it's sort of the
• 21:03
  Speaker 7: one thing in our society we can sort of depend on,
• 21:07
  Speaker 7: and something's going to have to happen.
• 21:09
  Speaker 6: What is it?
• 21:10
  Speaker 4: What is the feeling in with your reporting here about
• 21:13
  Speaker 4: social Security? I mean, do we I'm not.
• 21:17
  Speaker 8: Yeah, it's not good. It's not good, Paul.
• 21:19
  Speaker 7: People are really not feeling that social Security is going
• 21:24
  Speaker 7: to be there for them in the way they need it,
• 21:27
  Speaker 7: and you know, unsurprisingly they place a lot of flame
• 21:29
  Speaker 7: on that in politicians.
• 21:32
  Speaker 3: I mean, I'm gen X and I'm assuming I'm not
• 21:34
  Speaker 3: getting Social Security. If I do, that's super like benefit
• 21:38
  Speaker 3: go me. But that would be like extra stuff. So like,
• 21:41
  Speaker 3: my whole life is revolved around how do I put
• 21:43
  Speaker 3: my money in a way that will make me money
• 21:45
  Speaker 3: later in in some kind of tax free way, because
• 21:48
  Speaker 3: that I've seen with my parents how difficult it is
• 21:51
  Speaker 3: to pay taxes when you don't have any income except
• 21:53
  Speaker 3: for like atensional or Social Security.
• 21:56
  Speaker 7: Yes, and for most people, you know, eighty five percent
• 21:58
  Speaker 7: of the Social Security benefits are taxed, which.
• 22:01
  Speaker 2: Is bananas exactly. Yeah, that's just my personal feeling. Yes, yes, I.
• 22:05
  Speaker 8: Like that formal assessment that the bananas.
• 22:08
  Speaker 2: Yeah, so what's a solution. We have about thirty seconds
• 22:11
  Speaker 2: left for your solution?
• 22:12
  Speaker 8: Oh my gosh, the solution.
• 22:14
  Speaker 7: I mean, there are a lot of ways you can
• 22:15
  Speaker 7: sort of, I mean, obviously you can if you're over fifty,
• 22:20
  Speaker 7: you can contribute more to your four to one K.
• 22:22
  Speaker 7: You can contribute next with seventy five hundred dollars a
• 22:24
  Speaker 7: year if you have it this this coming year. There
• 22:28
  Speaker 7: are ways to you know, increase your savings. There are
• 22:32
  Speaker 7: you know, side hustles. It's really hard to come up
• 22:35
  Speaker 7: with an answer to that question because it's different for
• 22:38
  Speaker 7: every person.
• 22:39
  Speaker 8: You know, what they can do.
• 22:41
  Speaker 7: I guess just like smarter savings and making sure you're
• 22:46
  Speaker 7: doing everything you can to optimize your tax advantage savings
• 22:49
  Speaker 7: with your four one K and maybe I mean roths
• 22:52
  Speaker 7: are something I think younger people should really look into. Yeah,
• 22:55
  Speaker 7: because that's you put in the money after tax and
• 22:57
  Speaker 7: you don't want to pay taxes retirement.
• 22:59
  Speaker 3: All right, Sam, I got to leave there. Thank you
• 23:00
  Speaker 3: so much, really appreciated. Susannai Lee, Bloomberg Personal finance reporter.
• 23:04
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