00:00We've seen a major adjustment in energy. We've seen a major adjustment now in the bond market.
00:04How far along are we in the adjustment process for equities?
00:08I think no one really knows at this point. And we're looking at EM this morning pretty much
00:12giving up all its gains for the year. I think the first phase is pretty much done. And what I
00:17mean
00:17by that is the overheld positions, the high performing positions, your careers of this world,
00:23they have basically given up this year's gains. But that's the first phase. The next phase is
00:28now we look at the impact on balance of payments, the impact on margins. Do we move into an outright
00:35correction mode where you've not only given up your gains for the year, but you move into an
00:39outright loss and a severe loss? I think that's the next phase where markets are looking at.
00:44And we just don't know what resolution even looks like at this point. And I think that's where the
00:48focus needs to be. Jeff, many are shaken by memories of 2022. Stocks down, bonds down. What are the
00:54risks of a repeat of 22 for the year ahead? So here's where I'm pushing back against market
00:59pricing right now. I look at this morning, four hikes from the Bank of England this year.
01:04Seriously? Right. So I'll just give you one figure here. The UK savings rate right now is approaching
01:0910%. In 2022, it was barely two and a half, three percent. So households have been retrenching for
01:16several quarters now, not just in the UK, but in Europe. The place in the cycle for Europe is very
01:21different compared to 2022, where we still have this post-COVID demand expansion. So that's where
01:28I think markets are really pushing the envelope a bit in terms of what they think central banks can
01:32do. They've learned their lessons from 2022. They're saying the right thing. So I think central
01:37banks are going to be as hawkish as possible without hiking. That at least is the impression
01:42I got from last week. So I think that's where some correction is needed as well. It's not all doom
01:47and gloom, same as 2022.
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