1 00:00:00,080 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:11,960 --> 00:00:15,560 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 3 00:00:15,600 --> 00:00:18,960 Speaker 2: with Paul Sweeney. Join us each day for insight from 4 00:00:18,960 --> 00:00:23,119 Speaker 2: the best in economics, finance, investment, and international relations. You 5 00:00:23,160 --> 00:00:26,520 Speaker 2: can also watch the show live on YouTube. Visit the 6 00:00:26,520 --> 00:00:31,280 Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday 7 00:00:31,280 --> 00:00:34,320 Speaker 2: mornings from seven to ten am Eastern from our global 8 00:00:34,360 --> 00:00:39,000 Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 9 00:00:39,360 --> 00:00:42,920 Speaker 2: or anywhere else you listen. And always I'm Bloomberg Radio, 10 00:00:43,080 --> 00:00:46,479 Speaker 2: the Bloomberg Terminal, and the Bloomberg Business App. And I 11 00:00:46,479 --> 00:00:48,800 Speaker 2: could do a long introduction here because every second counts 12 00:00:48,880 --> 00:00:51,879 Speaker 2: right now with what we're seeing in American banking. Christopher 13 00:00:51,920 --> 00:00:56,120 Speaker 2: Whalen owns the high ground on this. His Institutional Risk 14 00:00:56,600 --> 00:01:00,120 Speaker 2: Newsletter is a required read in American at bank, and 15 00:01:00,200 --> 00:01:03,080 Speaker 2: he's been dead on about some of the shadows out 16 00:01:03,080 --> 00:01:06,640 Speaker 2: there within the American financial system. Chris, I'm just going 17 00:01:06,720 --> 00:01:09,680 Speaker 2: to cut to the chase. Is there a next NYCB? 18 00:01:10,160 --> 00:01:13,160 Speaker 2: We had SVB? Now we've got the follies here where 19 00:01:13,160 --> 00:01:16,559 Speaker 2: the former Secretary of Treasury weighs in to save the day. 20 00:01:17,040 --> 00:01:19,080 Speaker 2: Do you just assume there's another one out there. 21 00:01:20,319 --> 00:01:23,000 Speaker 3: Yes. And the reason I say that, Tom, is that 22 00:01:23,240 --> 00:01:27,440 Speaker 3: the changes that have occurred in the usage of certain 23 00:01:27,560 --> 00:01:32,440 Speaker 3: types of real estate commercial buildings, multifamily buildings, and then politics, 24 00:01:32,840 --> 00:01:36,560 Speaker 3: rent control legislation in New York was a fiasco. And 25 00:01:36,640 --> 00:01:40,960 Speaker 3: now one of the last great progressives in Washington, Marty Gruenberg, 26 00:01:41,280 --> 00:01:44,000 Speaker 3: has decided to stick to US banking industry with the 27 00:01:44,080 --> 00:01:47,440 Speaker 3: cost I don't think he intends to ever sell the 28 00:01:47,920 --> 00:01:52,960 Speaker 3: joint ventures to control the rent stabilized assets Stork MI. 29 00:01:53,040 --> 00:01:56,240 Speaker 2: Amateur take on this, including reading your definitive one volume 30 00:01:56,240 --> 00:02:02,160 Speaker 2: amount American Finance, is that these are marketing concepts at SVB, 31 00:02:02,280 --> 00:02:06,840 Speaker 2: at NYCB at all. They're like marketing plans with growthiness 32 00:02:06,840 --> 00:02:10,280 Speaker 2: in them to go amok. Is that accurate? 33 00:02:11,280 --> 00:02:13,200 Speaker 3: It is, Tom, And I also think it was a 34 00:02:13,880 --> 00:02:17,200 Speaker 3: function of the time. In other words, you had muted 35 00:02:17,320 --> 00:02:21,200 Speaker 3: credit costs who had heavily managed markets care of the 36 00:02:21,320 --> 00:02:24,320 Speaker 3: f O and C, so bankers had an easy time 37 00:02:24,680 --> 00:02:28,680 Speaker 3: and certain business models actually grew like First Republic. I mean, 38 00:02:28,720 --> 00:02:30,640 Speaker 3: my god, I think the only way they made money 39 00:02:30,800 --> 00:02:33,919 Speaker 3: was selling loans. The rest of the business model didn't, 40 00:02:34,240 --> 00:02:36,760 Speaker 3: you know, particularly work, and they were a client the 41 00:02:36,880 --> 00:02:40,160 Speaker 3: JP Morket in the mortgage space, So I think you're dead. 42 00:02:41,080 --> 00:02:43,079 Speaker 3: There were a lot of models that grew over the 43 00:02:43,160 --> 00:02:46,680 Speaker 3: last ten years, really since two thousand and eight, that 44 00:02:46,880 --> 00:02:50,280 Speaker 3: don't work now, and particularly the change in the valuation 45 00:02:50,400 --> 00:02:53,760 Speaker 3: of urban commercial and urban multi family real estate. It 46 00:02:53,840 --> 00:02:57,000 Speaker 3: is episodic. You know, I rated many of the banks 47 00:02:57,000 --> 00:03:00,800 Speaker 3: in New York Tom when I was pick Kroll portfolios 48 00:03:00,840 --> 00:03:04,320 Speaker 3: hadn't see any appreciable credit loss in seventy five, one 49 00:03:04,360 --> 00:03:07,399 Speaker 3: hundred years, and they were always fully let. These these 50 00:03:07,400 --> 00:03:10,720 Speaker 3: buildings today we're talking about are fully let. They cashed low, 51 00:03:10,919 --> 00:03:13,480 Speaker 3: but you can't sell them. The value has been cut 52 00:03:13,480 --> 00:03:13,919 Speaker 3: in half. 53 00:03:14,360 --> 00:03:17,040 Speaker 2: And Paul, I see this every single transaction I review 54 00:03:17,080 --> 00:03:20,120 Speaker 2: as an amateur. Many of these busted properties are like 55 00:03:20,520 --> 00:03:23,840 Speaker 2: ninety two, ninety seven, ninety eight percent rented. 56 00:03:23,760 --> 00:03:28,079 Speaker 4: Chris, How do how does the average investor identify maybe 57 00:03:28,120 --> 00:03:30,960 Speaker 4: where the next landmine can be? I guess a lot 58 00:03:31,000 --> 00:03:34,120 Speaker 4: of people are concerned about commercial real estate. Nobody had 59 00:03:34,200 --> 00:03:37,800 Speaker 4: on their BINGO card rent control departments in New York City. 60 00:03:39,000 --> 00:03:43,080 Speaker 3: No, And I don't think we fully, including myself, understood 61 00:03:43,720 --> 00:03:47,240 Speaker 3: how prevalent this problem was. You know, when New York 62 00:03:47,280 --> 00:03:50,040 Speaker 3: Community pank Thought's signature. They said, no, we don't want 63 00:03:50,080 --> 00:03:53,560 Speaker 3: the rent stabilized stuff. You keep that, and the FDIC did, 64 00:03:54,040 --> 00:03:57,520 Speaker 3: but we didn't realize they also had that. They've since 65 00:03:57,560 --> 00:04:00,160 Speaker 3: fest up and they're probably going to drop on to 66 00:04:00,200 --> 00:04:03,640 Speaker 3: get restatement when they finally file for the end of 67 00:04:03,640 --> 00:04:06,120 Speaker 3: the year. And I think a lot of investors are 68 00:04:06,160 --> 00:04:09,040 Speaker 3: quite angry because they feel like they were not told 69 00:04:09,080 --> 00:04:11,480 Speaker 3: the truth. But let's be fair, all of these New 70 00:04:11,560 --> 00:04:14,320 Speaker 3: York City banks haven't had to worry about credit in 71 00:04:14,440 --> 00:04:18,920 Speaker 3: fifty plus years. That's why they allowed Joe Fitalura at 72 00:04:18,960 --> 00:04:21,280 Speaker 3: New York Community Bank to run that bank with a 73 00:04:21,320 --> 00:04:24,359 Speaker 3: lot of hot money, brokeer deposits. Right, he had no 74 00:04:24,440 --> 00:04:28,080 Speaker 3: credit losses, so it worked. It doesn't work now. I 75 00:04:28,120 --> 00:04:31,480 Speaker 3: think that billion dollars from Steve Mnuchin is not enough. 76 00:04:31,960 --> 00:04:33,280 Speaker 3: I think they should be bad. 77 00:04:33,440 --> 00:04:35,000 Speaker 2: Yeah, Chris helps me, see. 78 00:04:34,960 --> 00:04:36,279 Speaker 3: Ten we need ten? 79 00:04:36,400 --> 00:04:36,640 Speaker 4: Tom. 80 00:04:36,920 --> 00:04:39,359 Speaker 2: Yeah, well, just you know, we don't want numbers on 81 00:04:39,400 --> 00:04:41,880 Speaker 2: a Thursday. But you know, I looked at was it 82 00:04:41,960 --> 00:04:44,279 Speaker 2: one billion? I said, it's like chump change. 83 00:04:45,040 --> 00:04:47,240 Speaker 3: I mean in this context, yes, you have a forty 84 00:04:47,279 --> 00:04:51,479 Speaker 3: billion dollar more or less multifamily book. What's a reasonable 85 00:04:51,520 --> 00:04:55,839 Speaker 3: haircut on that top. Yeah, okay, twenty five cents to start, 86 00:04:56,800 --> 00:05:00,520 Speaker 3: and we work back from that. But they have time. Again, 87 00:05:00,600 --> 00:05:04,200 Speaker 3: these are cash flowing assets that are now impaired because 88 00:05:04,240 --> 00:05:08,280 Speaker 3: of political actions in New York, So we have time. 89 00:05:08,760 --> 00:05:10,880 Speaker 3: It's not like people don't want to live there. But 90 00:05:11,120 --> 00:05:14,120 Speaker 3: over time, the value of these assets is going to deteriorate. 91 00:05:14,360 --> 00:05:16,880 Speaker 3: And that's why I said, I don't think FDIC Chairman 92 00:05:17,000 --> 00:05:20,680 Speaker 3: Groomberg has any intention of selling those properties to leave 93 00:05:20,720 --> 00:05:22,320 Speaker 3: that for the Republicans to Poland. 94 00:05:22,760 --> 00:05:26,640 Speaker 4: So, Chris, if we step back, is there reason to 95 00:05:26,680 --> 00:05:29,400 Speaker 4: believe that there are systemic risk in the regional banking 96 00:05:29,400 --> 00:05:32,840 Speaker 4: system in this country? Or again, is it just kind 97 00:05:32,880 --> 00:05:34,280 Speaker 4: of these one off situations. 98 00:05:35,640 --> 00:05:38,839 Speaker 3: It's chop salid. The only way you could do the 99 00:05:38,880 --> 00:05:41,320 Speaker 3: work is to go pull all the load level data 100 00:05:41,360 --> 00:05:45,000 Speaker 3: from TRAP, which is very expensive, and do the work 101 00:05:45,000 --> 00:05:48,160 Speaker 3: on who owns the mortgage and who bought the participation 102 00:05:48,560 --> 00:05:51,080 Speaker 3: in the mortgage. There's a lot of risk that's been 103 00:05:51,120 --> 00:05:54,520 Speaker 3: spread out through participations, and I would remind you that 104 00:05:54,600 --> 00:05:58,680 Speaker 3: the FDIC has the power to repudiate participations in the 105 00:05:58,760 --> 00:06:03,000 Speaker 3: context of the receiver. I've worked for several receivers myself 106 00:06:03,080 --> 00:06:05,760 Speaker 3: and that's the first thing they ask you when they hire, 107 00:06:06,480 --> 00:06:10,120 Speaker 3: so I would tell you yes, Paul. The answer to 108 00:06:10,200 --> 00:06:13,479 Speaker 3: your question is, but it's institution by institution, and again 109 00:06:13,520 --> 00:06:16,360 Speaker 3: they have time. Banks have the ability to slow walk 110 00:06:16,440 --> 00:06:20,280 Speaker 3: this stuff for years. If they have liquidity, they can 111 00:06:20,360 --> 00:06:23,480 Speaker 3: finance the asset, but they may end up as the owner. 112 00:06:23,839 --> 00:06:26,680 Speaker 3: We may wipe out that fifty cents of equity quote 113 00:06:26,720 --> 00:06:29,520 Speaker 3: unquote on top right, and the bank ends up oonating 114 00:06:29,600 --> 00:06:32,440 Speaker 3: the property at fifty cents on the dollar. Another question 115 00:06:32,560 --> 00:06:33,479 Speaker 3: is can they work. 116 00:06:33,320 --> 00:06:36,480 Speaker 2: With That's my last question, and I think it's really important, Chris. 117 00:06:36,480 --> 00:06:38,480 Speaker 2: I mean with great respect for people that are taking 118 00:06:38,520 --> 00:06:41,240 Speaker 2: a lot of losses on this. And thank you so 119 00:06:41,360 --> 00:06:44,080 Speaker 2: much for on YouTube live chat saying, Hey, Tom, wasn't 120 00:06:44,200 --> 00:06:47,760 Speaker 2: NYCB as sponsor of yours full disclosure folks a long 121 00:06:47,800 --> 00:06:52,279 Speaker 2: time ago. NYCB was really supportive of our conversation. Chris, 122 00:06:52,279 --> 00:06:57,000 Speaker 2: whalan is a general statement in your world race have moved, 123 00:06:57,360 --> 00:07:00,200 Speaker 2: there's going to be a loss, But the moment the 124 00:07:00,240 --> 00:07:03,080 Speaker 2: loss is taken and new money comes in, it's a 125 00:07:03,120 --> 00:07:05,560 Speaker 2: whole new world after all. Is it going to be 126 00:07:05,600 --> 00:07:09,000 Speaker 2: morning in America for banking? In what Paul? Two years? 127 00:07:09,520 --> 00:07:11,360 Speaker 2: Something like that? Is that where we're. 128 00:07:11,200 --> 00:07:15,960 Speaker 3: Atting only if we see short term rates fall a bit, 129 00:07:16,240 --> 00:07:18,760 Speaker 3: we need to get FED funds down into the kind 130 00:07:18,800 --> 00:07:21,320 Speaker 3: of mid to low fours. I'm not sure the long 131 00:07:21,400 --> 00:07:24,240 Speaker 3: end it's going to follow in a traditional sense. I 132 00:07:24,240 --> 00:07:28,560 Speaker 3: think it's different this time. And the Treasury's financing costs, 133 00:07:28,560 --> 00:07:30,960 Speaker 3: which they've got to put on the log end. They 134 00:07:31,000 --> 00:07:34,720 Speaker 3: can't just do T bills anymore. That's going to be 135 00:07:34,800 --> 00:07:37,840 Speaker 3: the story. Well, by the way, we're reissuing Inflated, I 136 00:07:37,880 --> 00:07:38,800 Speaker 3: have a lot of work to do. 137 00:07:39,440 --> 00:07:41,520 Speaker 2: Oh, very you're reissuing the book. 138 00:07:42,480 --> 00:07:44,520 Speaker 3: Yeah, I'm going to do a heavy endit. I didn't 139 00:07:44,520 --> 00:07:46,800 Speaker 3: have time in twenty ten to edit that book the 140 00:07:46,840 --> 00:07:47,520 Speaker 3: way I needed it. 141 00:07:47,960 --> 00:07:50,480 Speaker 2: Very cool. That's the best news today. This has been 142 00:07:50,520 --> 00:07:53,520 Speaker 2: a joy. Chris Whalen, thank you so much, greatly greatly 143 00:07:53,600 --> 00:07:57,720 Speaker 2: appreciated on short notice this morning here around the NYCB challenges. 144 00:07:57,720 --> 00:08:00,800 Speaker 2: Look to Bloomberg Finance at Bloomberg News to give you 145 00:08:00,920 --> 00:08:15,880 Speaker 2: perspective on our banking system. His book, Inflated anticipated. Only 146 00:08:15,920 --> 00:08:20,000 Speaker 2: one person on the planet actually has studied George Washington's 147 00:08:20,480 --> 00:08:25,440 Speaker 2: regular annual message of January eighth, seventeen ninety and that 148 00:08:25,560 --> 00:08:29,160 Speaker 2: of course is Wendy Schuller up at Brown University drives 149 00:08:29,240 --> 00:08:34,120 Speaker 2: us forward into twenty twenty four. Does the president go 150 00:08:34,360 --> 00:08:36,200 Speaker 2: after President Trump tonight? 151 00:08:36,360 --> 00:08:40,400 Speaker 5: Professor Schuller, Well, good morning Tom, Good morning Paul. 152 00:08:41,520 --> 00:08:43,959 Speaker 6: He has to go after President Trump, but he has 153 00:08:44,000 --> 00:08:47,040 Speaker 6: to do it in a way that says that defining 154 00:08:47,160 --> 00:08:51,600 Speaker 6: what America is, what democracy is, what the president sheep, presidency, sorry, 155 00:08:51,800 --> 00:08:53,760 Speaker 6: should be, That's what he's got to do. 156 00:08:53,840 --> 00:08:56,439 Speaker 5: We can't go super personal, that's inappropriate. The state of 157 00:08:56,480 --> 00:08:56,880 Speaker 5: the Union. 158 00:08:57,080 --> 00:09:00,000 Speaker 6: He has to present a vision of what his president 159 00:09:00,120 --> 00:09:04,720 Speaker 6: Andy will be then and then during the campaign reinforce 160 00:09:04,880 --> 00:09:07,800 Speaker 6: what the vision is of what the Trump presidency will be. 161 00:09:07,880 --> 00:09:12,040 Speaker 6: And his opportunity tonight is to do that unfiltered, and 162 00:09:12,080 --> 00:09:15,320 Speaker 6: it's the last opportunity he'll have before November to do 163 00:09:15,400 --> 00:09:16,640 Speaker 6: that without any filter. 164 00:09:16,960 --> 00:09:19,480 Speaker 2: If you were writing, they came to Wendy Schiller and 165 00:09:19,520 --> 00:09:22,679 Speaker 2: they said, professor, can you give us this is how 166 00:09:22,720 --> 00:09:23,400 Speaker 2: stupid is this? 167 00:09:23,480 --> 00:09:23,720 Speaker 3: Paul? 168 00:09:24,160 --> 00:09:27,080 Speaker 2: Professor Schiller, could you try to give us two sentences 169 00:09:27,520 --> 00:09:30,080 Speaker 2: for the president's speech? What would those sentences be? 170 00:09:31,720 --> 00:09:35,040 Speaker 6: What do you want America to be? What do you 171 00:09:35,240 --> 00:09:38,480 Speaker 6: want this country to stand for? And how are you 172 00:09:38,559 --> 00:09:41,720 Speaker 6: willing to work together? To make it happen. That's what 173 00:09:41,800 --> 00:09:44,319 Speaker 6: he's got to do. It's got a channel, FDR, He's 174 00:09:44,320 --> 00:09:47,680 Speaker 6: got a channel. You know obviously JFK. It's hard to do, 175 00:09:48,080 --> 00:09:51,280 Speaker 6: Donoth Kennedy, but he's got to channel even Bill Clinton 176 00:09:51,320 --> 00:09:52,319 Speaker 6: and Barack Obama. 177 00:09:52,640 --> 00:09:53,840 Speaker 5: The spirit has. 178 00:09:53,679 --> 00:09:56,000 Speaker 6: To be, do you want what we view to be 179 00:09:56,040 --> 00:09:57,520 Speaker 6: the ugliness right now? 180 00:09:57,920 --> 00:10:00,320 Speaker 5: Or do you want to turn the page and you. 181 00:10:00,360 --> 00:10:03,160 Speaker 6: Know, rebuild what we have as a country. And that's 182 00:10:03,200 --> 00:10:05,840 Speaker 6: something he's got to set as a lofty goal and 183 00:10:05,880 --> 00:10:08,800 Speaker 6: basically say I'm the guy to do it, and the 184 00:10:08,840 --> 00:10:10,160 Speaker 6: other guy's not the guy to do it. 185 00:10:10,679 --> 00:10:12,680 Speaker 4: Wendy, Tom and I and all the other folks that 186 00:10:12,720 --> 00:10:14,480 Speaker 4: have the Bloomberg terminal in front of them, we see 187 00:10:14,480 --> 00:10:17,439 Speaker 4: the economic data, and the economic data in this country's 188 00:10:17,520 --> 00:10:22,120 Speaker 4: pretty darn good, but that message is not resonating with 189 00:10:22,520 --> 00:10:25,160 Speaker 4: the public. What do you think the president and the 190 00:10:25,200 --> 00:10:28,120 Speaker 4: administration need to do to kind of change the rhetoric 191 00:10:28,200 --> 00:10:30,439 Speaker 4: to say, you know what, this economy's pretty darn good, 192 00:10:30,480 --> 00:10:34,440 Speaker 4: and in fact, this administration's been a big part of 193 00:10:34,480 --> 00:10:35,960 Speaker 4: why it is pretty good. 194 00:10:36,920 --> 00:10:40,440 Speaker 6: I think the Biden mistrision made a pretty significant flaw 195 00:10:40,960 --> 00:10:45,280 Speaker 6: in their selling of their legislative program, the Inflation Reduction Act, infrastructure. 196 00:10:45,559 --> 00:10:48,520 Speaker 6: They didn't really really tie what they were doing to 197 00:10:48,600 --> 00:10:48,960 Speaker 6: how it's. 198 00:10:48,840 --> 00:10:51,520 Speaker 5: Going to improve people's lives. This is what Democrats do. 199 00:10:51,720 --> 00:10:53,920 Speaker 6: They go big, they're successful, they get a lot of 200 00:10:53,920 --> 00:10:57,520 Speaker 6: big things passed, and then they completely fail to sell properly. 201 00:10:57,760 --> 00:11:01,240 Speaker 6: The Republicans cut taxes, raised death and they're the magic 202 00:11:01,280 --> 00:11:02,319 Speaker 6: party on the economy. 203 00:11:02,480 --> 00:11:04,000 Speaker 5: This has been true for forty years. 204 00:11:04,040 --> 00:11:05,800 Speaker 6: I mean, I don't know if there's a magic, you know, 205 00:11:05,920 --> 00:11:09,120 Speaker 6: magic answer to this, but I think right now, telling 206 00:11:09,200 --> 00:11:11,320 Speaker 6: people the economy is better than they think it is 207 00:11:11,400 --> 00:11:14,679 Speaker 6: is not going to work. Showing people how the government 208 00:11:14,679 --> 00:11:17,079 Speaker 6: has helped them in the face of a bad economy 209 00:11:17,080 --> 00:11:18,839 Speaker 6: a couple of years ago may work. 210 00:11:19,520 --> 00:11:22,920 Speaker 2: You just got to window their folks into Professor Schiller 211 00:11:22,960 --> 00:11:26,560 Speaker 2: in the classroom where she loses it and actually tells 212 00:11:26,600 --> 00:11:29,400 Speaker 2: you what she thinks. Wendy, do liberals sit in their 213 00:11:29,400 --> 00:11:30,120 Speaker 2: hands tonight? 214 00:11:31,600 --> 00:11:34,120 Speaker 6: You know? I think I think everybody, whether it's young 215 00:11:34,120 --> 00:11:37,000 Speaker 6: people that we're dealing with in college campuses or disillusioned 216 00:11:37,040 --> 00:11:39,400 Speaker 6: people in their fifties or sixties with the Democratic Party, 217 00:11:39,559 --> 00:11:42,440 Speaker 6: have to understand that this is moving from a referendum 218 00:11:42,559 --> 00:11:46,240 Speaker 6: a popularity contest to an actual choice about what you 219 00:11:46,360 --> 00:11:48,520 Speaker 6: want to see over the next four years, And so 220 00:11:48,679 --> 00:11:49,600 Speaker 6: liberals who are. 221 00:11:49,720 --> 00:11:52,760 Speaker 5: Really panicking have to understand. 222 00:11:52,200 --> 00:11:54,240 Speaker 6: They have to think about what the realities of a 223 00:11:54,280 --> 00:11:57,120 Speaker 6: Trump presidency will be for their policy if they want 224 00:11:57,160 --> 00:12:00,400 Speaker 6: see passed, and what Biden could bring. So I think 225 00:12:00,400 --> 00:12:02,760 Speaker 6: that's the problem, and the more discord that is out 226 00:12:02,760 --> 00:12:06,000 Speaker 6: there in the Democratic Party, the stronger Donald Trump becomes. 227 00:12:06,240 --> 00:12:08,599 Speaker 5: They've done a great job of containing him. 228 00:12:08,840 --> 00:12:11,839 Speaker 6: Oh come on, he looks pretty good now, right, you 229 00:12:11,920 --> 00:12:13,400 Speaker 6: don't forgot what he was like before. 230 00:12:13,559 --> 00:12:15,360 Speaker 5: And there they're like, Okay, he'll be better than Biden. 231 00:12:15,400 --> 00:12:19,800 Speaker 2: Wendy go back to Blaine from Maine. In Grover Cleveland, Alexander. 232 00:12:19,840 --> 00:12:22,600 Speaker 2: In the eighteen nineties, the Democratic Party was a mess, 233 00:12:23,200 --> 00:12:25,840 Speaker 2: and it's always been a mess all through my ute. 234 00:12:25,960 --> 00:12:28,200 Speaker 2: And granted there was the peaceful years of the Clinton 235 00:12:28,240 --> 00:12:31,880 Speaker 2: Obama thing and all that, But isn't the Democratic Party 236 00:12:31,960 --> 00:12:35,640 Speaker 2: supposed to be one big screen fest until you know, 237 00:12:36,040 --> 00:12:37,480 Speaker 2: twelve hours before the election. 238 00:12:39,040 --> 00:12:40,920 Speaker 6: Well, the problem for the Democrat Party is that the 239 00:12:41,000 --> 00:12:43,240 Speaker 6: Republicans can do that and then they all come together 240 00:12:43,280 --> 00:12:47,280 Speaker 6: in Kumbaya and they vote for their person, and Democrats 241 00:12:47,320 --> 00:12:50,000 Speaker 6: get mad and stay home, and so that is the 242 00:12:50,000 --> 00:12:52,040 Speaker 6: big risk for the Biden camp this year. 243 00:12:52,400 --> 00:12:55,480 Speaker 5: This speech isn't about saving the campaign in one night. 244 00:12:55,880 --> 00:12:59,240 Speaker 6: This speech is reminding the base of the Democratic Party 245 00:12:59,440 --> 00:13:02,160 Speaker 6: about the old alternatives that will face them in November. 246 00:13:02,400 --> 00:13:03,560 Speaker 5: That's what the speech is. 247 00:13:03,640 --> 00:13:06,320 Speaker 6: And if Biden can be energetic avoid too many gaps, 248 00:13:06,559 --> 00:13:09,200 Speaker 6: then maybe he can start to bring people back into 249 00:13:09,200 --> 00:13:09,760 Speaker 6: the full. 250 00:13:10,000 --> 00:13:12,720 Speaker 4: Wendy, will there be presidential debates this cycle? 251 00:13:14,080 --> 00:13:15,160 Speaker 5: Paul? So far? 252 00:13:15,800 --> 00:13:20,040 Speaker 6: I thinking to myself yes, because so far Trump will 253 00:13:20,080 --> 00:13:23,760 Speaker 6: look more energetic and more vital in a debate visa v. 254 00:13:23,880 --> 00:13:26,480 Speaker 5: Biden, then he would have looked against Nikky Haley or 255 00:13:26,559 --> 00:13:29,480 Speaker 5: Ron Santis. So I think the choicet is different for Trump. 256 00:13:30,000 --> 00:13:32,120 Speaker 6: But that's always a risk for the camp, right does 257 00:13:32,200 --> 00:13:35,160 Speaker 6: he show up as good Trump or bad Trump? 258 00:13:35,200 --> 00:13:37,120 Speaker 5: And they can't control that on the debate stage. 259 00:13:37,559 --> 00:13:40,120 Speaker 2: Wendy, have you ever been in a smoke filled room? 260 00:13:40,320 --> 00:13:42,080 Speaker 2: I mean, if you like it in your study of 261 00:13:42,120 --> 00:13:44,880 Speaker 2: your iconic textbook and all, have you ever been like 262 00:13:44,920 --> 00:13:47,640 Speaker 2: at a convention and they're all smoking cigars in a 263 00:13:47,720 --> 00:13:51,120 Speaker 2: room and Professor Schiller is there or student Schiller was there. 264 00:13:51,120 --> 00:13:53,800 Speaker 2: Have you ever actually done the depths of the process. 265 00:13:54,800 --> 00:13:56,240 Speaker 5: I have not done that. 266 00:13:56,280 --> 00:14:00,000 Speaker 6: The closest I came was working in democratic alternative Democratic 267 00:14:00,040 --> 00:14:02,720 Speaker 6: Party politics in Chicago in the nineteen eighties, which you know, 268 00:14:02,840 --> 00:14:05,040 Speaker 6: came close to that kind of environment, but not quite. 269 00:14:05,360 --> 00:14:08,440 Speaker 4: I'd see so real quickly when he shl Tom and 270 00:14:08,440 --> 00:14:10,720 Speaker 4: I pay attention to the conventions this summer. 271 00:14:12,040 --> 00:14:15,640 Speaker 6: Yes, because I think that, you know, remember Donald Trump's 272 00:14:15,640 --> 00:14:19,240 Speaker 6: speech in twenty sixteen, He'll do a very similar speech 273 00:14:19,280 --> 00:14:22,680 Speaker 6: this year. Similar issues, right, especially crime and the border, 274 00:14:23,000 --> 00:14:26,040 Speaker 6: and that's an achilles heel for Biden. Right four years later, 275 00:14:26,120 --> 00:14:27,880 Speaker 6: eight years later, things don't seem to be better. 276 00:14:28,120 --> 00:14:30,239 Speaker 5: That's going to be what the speech is for the Democrats. 277 00:14:30,640 --> 00:14:33,880 Speaker 5: I still think there's a possibility of change in the ticket. 278 00:14:34,080 --> 00:14:36,320 Speaker 5: We don't know for sure, but I'm not sure how 279 00:14:36,360 --> 00:14:37,480 Speaker 5: smoothly that convention goes. 280 00:14:37,640 --> 00:14:40,720 Speaker 2: Wendy. I spent time with a Secretary of Commerce this 281 00:14:40,760 --> 00:14:44,080 Speaker 2: week at the consul and Foreign Relations. How's Governor Romando 282 00:14:44,160 --> 00:14:47,480 Speaker 2: of Rhode Island doing in the Biden administration. 283 00:14:48,720 --> 00:14:52,080 Speaker 6: Well, she's keeping her profile relatively policy oriented, which is 284 00:14:52,120 --> 00:14:54,560 Speaker 6: what she is and what she did is governor Rhode Island. 285 00:14:54,800 --> 00:14:57,160 Speaker 6: You know, everybody's starting to look ahead to twenty eight. 286 00:14:57,480 --> 00:15:00,440 Speaker 5: That's you know, on the Republican side and the Democratics side. 287 00:15:00,920 --> 00:15:04,080 Speaker 6: People Boujac moved to Michigan, for example, Gretchen Whitmer's getting 288 00:15:04,080 --> 00:15:04,800 Speaker 6: a lot of press. 289 00:15:05,240 --> 00:15:06,200 Speaker 5: I think she's just going. 290 00:15:06,200 --> 00:15:09,200 Speaker 6: To decide, do my job, do my job, well, see 291 00:15:09,240 --> 00:15:11,960 Speaker 6: what happens with the election, and then take it from there. 292 00:15:12,000 --> 00:15:13,680 Speaker 5: But I don't think she's really interview. 293 00:15:13,480 --> 00:15:17,400 Speaker 2: Wendy hugely valuable, Thank you so much. Professor Schuller at 294 00:15:17,440 --> 00:15:21,120 Speaker 2: Brown University. Certainly one of the best that we have, 295 00:15:21,160 --> 00:15:24,080 Speaker 2: and I can't say enough about her many many books 296 00:15:24,080 --> 00:15:28,040 Speaker 2: that she's written here to inform America of our civics 297 00:15:28,160 --> 00:15:30,480 Speaker 2: as well. Paul. She gets going, she gets fired up, 298 00:15:30,520 --> 00:15:33,640 Speaker 2: but it's just it's just great, whatever your politics should 299 00:15:33,640 --> 00:15:42,080 Speaker 2: make you think. Karen Murphy, she's the usual equity and 300 00:15:42,120 --> 00:15:44,080 Speaker 2: all that. She worked at a small shop called Gold 301 00:15:44,160 --> 00:15:44,560 Speaker 2: and Sex. 302 00:15:44,600 --> 00:15:45,840 Speaker 6: Blah blah blah. 303 00:15:46,720 --> 00:15:52,360 Speaker 2: She taught English and French in the Czech Republic, joining 304 00:15:52,400 --> 00:15:56,880 Speaker 2: us now in Prague. Kara Murphy joins us here, what 305 00:15:56,920 --> 00:15:59,400 Speaker 2: was it like in your youthe care you're still young 306 00:15:59,400 --> 00:16:03,320 Speaker 2: and beautiful, but at Kestra Investment Management, what was it 307 00:16:03,640 --> 00:16:07,840 Speaker 2: like getting off the plane in Prague and teaching English 308 00:16:07,960 --> 00:16:08,560 Speaker 2: and French. 309 00:16:10,080 --> 00:16:11,720 Speaker 7: Well, I have to say I learned how to order 310 00:16:11,760 --> 00:16:17,320 Speaker 7: a beer really quickly. Took some practice, but I got there. 311 00:16:17,360 --> 00:16:19,400 Speaker 7: It was a wonderful time. It was right after the 312 00:16:19,440 --> 00:16:22,400 Speaker 7: wall had fallen, so it was a really kind of 313 00:16:22,480 --> 00:16:25,000 Speaker 7: undiscovered part of the world. I had a wonderful time. 314 00:16:25,120 --> 00:16:25,600 Speaker 5: It was great. 315 00:16:25,680 --> 00:16:28,080 Speaker 2: I did Bloomberg on the Economy for an entire week 316 00:16:28,440 --> 00:16:31,840 Speaker 2: in Prague. It was like hugely cool. It was just 317 00:16:31,840 --> 00:16:35,160 Speaker 2: as Kara says, they were coming out of all the 318 00:16:35,200 --> 00:16:39,200 Speaker 2: different challenges of the nineteen eighties. Kara on the market, 319 00:16:39,280 --> 00:16:41,840 Speaker 2: if you reset, is it the same old, same old? 320 00:16:42,280 --> 00:16:45,320 Speaker 2: Is there a new view at Kestra Investment Management. 321 00:16:46,760 --> 00:16:49,080 Speaker 7: Well, I think, as we heard in some of your 322 00:16:49,120 --> 00:16:52,480 Speaker 7: earlier reporting, twenty twenty two and so far twenty twenty 323 00:16:52,520 --> 00:16:55,200 Speaker 7: three has been all about the mag seven, Right, it's 324 00:16:55,200 --> 00:16:57,760 Speaker 7: been this really narrow market where a couple of names 325 00:16:57,800 --> 00:17:01,360 Speaker 7: were driving the vast majority of returns. And there's good 326 00:17:01,400 --> 00:17:04,160 Speaker 7: fundamental reasons for that. Right, we not only have AI, 327 00:17:04,359 --> 00:17:07,160 Speaker 7: but it's shown up in these companies revenues and earnings 328 00:17:07,160 --> 00:17:11,000 Speaker 7: and margins. So there's real fundamental underpinnings of that. But 329 00:17:11,240 --> 00:17:13,639 Speaker 7: what that also means is that so much attention and 330 00:17:13,720 --> 00:17:16,440 Speaker 7: so many dollars have gone to this handful of names. 331 00:17:16,840 --> 00:17:18,919 Speaker 7: It means that there are all these opportunities that are 332 00:17:19,000 --> 00:17:21,880 Speaker 7: largely being overlooked elsewhere in the market. And I think 333 00:17:21,920 --> 00:17:24,880 Speaker 7: that's kind of exciting, where you know, we have places 334 00:17:24,920 --> 00:17:28,320 Speaker 7: that are undervalued and sort of forgotten that provide really 335 00:17:28,359 --> 00:17:29,879 Speaker 7: great investing opportunities. 336 00:17:30,000 --> 00:17:33,080 Speaker 4: All right, Caras, So I guess one of the potential 337 00:17:33,119 --> 00:17:34,680 Speaker 4: calls out there is said, Hey, if this FED is 338 00:17:34,720 --> 00:17:37,480 Speaker 4: going to start cutting interest rates, maybe I can infect 339 00:17:37,880 --> 00:17:40,400 Speaker 4: find some performance outside of those big cap tech names. 340 00:17:40,440 --> 00:17:43,800 Speaker 4: Maybe I can go down to MidCap, maybe even small cap. 341 00:17:43,840 --> 00:17:45,560 Speaker 4: Am I too early to think that or is that 342 00:17:45,600 --> 00:17:46,280 Speaker 4: still an option? 343 00:17:48,280 --> 00:17:50,960 Speaker 7: So these things are, unfortunately, are very hard to predict 344 00:17:51,040 --> 00:17:53,400 Speaker 7: when we'll actually see this shift out of let's say, 345 00:17:53,440 --> 00:17:55,960 Speaker 7: met MidCap, out of the mega cap into things like 346 00:17:56,040 --> 00:17:58,919 Speaker 7: mid and small cap. But what's happened is that a 347 00:17:58,960 --> 00:18:02,160 Speaker 7: lot of portfolio have become just by letting them drift, 348 00:18:02,200 --> 00:18:05,280 Speaker 7: have become so heavily weighted towards these mega cap names. 349 00:18:05,600 --> 00:18:07,280 Speaker 7: You have to be a little bit more active and 350 00:18:07,320 --> 00:18:10,919 Speaker 7: pulling your portfolio back down in cap. And I like 351 00:18:10,960 --> 00:18:13,560 Speaker 7: to use small caps as a sort of extreme example 352 00:18:13,680 --> 00:18:16,760 Speaker 7: of the whyde differential and how investors have seen these 353 00:18:16,800 --> 00:18:18,960 Speaker 7: different parts of the market. But if you look at 354 00:18:19,040 --> 00:18:22,280 Speaker 7: large large caps versus small caps, typically large caps have 355 00:18:22,320 --> 00:18:25,560 Speaker 7: traded at about a forty percent premium to small caps. Makes 356 00:18:25,600 --> 00:18:28,679 Speaker 7: sense today they're trading at one hundred percent of the 357 00:18:28,720 --> 00:18:31,720 Speaker 7: small cap pe. So you know, you can even believe 358 00:18:31,760 --> 00:18:34,520 Speaker 7: that small caps face greater headwinds than large caps, But 359 00:18:34,640 --> 00:18:38,320 Speaker 7: how much is too much in terms of that valuation differential. 360 00:18:38,680 --> 00:18:40,680 Speaker 7: So especially as you mentioned, you know, if the Fed 361 00:18:40,720 --> 00:18:44,200 Speaker 7: starts cutting interest rates, we have as somewhat easier financial conditions. 362 00:18:44,480 --> 00:18:47,919 Speaker 7: That's typically a pretty supportive environment for small caps. So 363 00:18:47,960 --> 00:18:49,720 Speaker 7: you want to make sure that you have exposure there, 364 00:18:50,440 --> 00:18:51,040 Speaker 7: caer I kep it. 365 00:18:51,119 --> 00:18:52,800 Speaker 4: On the fixed income side, as I looked at some 366 00:18:52,840 --> 00:18:54,920 Speaker 4: of the performance from twenty twenty three, I'm surprised to 367 00:18:54,960 --> 00:18:58,040 Speaker 4: see that the best performing fixed income area was high 368 00:18:58,119 --> 00:19:01,040 Speaker 4: yield US high yielded. With all the talk of recession, 369 00:19:02,000 --> 00:19:03,119 Speaker 4: I'm surprised that it did that. 370 00:19:03,200 --> 00:19:04,320 Speaker 8: Well, how do you. 371 00:19:04,359 --> 00:19:06,200 Speaker 4: View the fixed income opportunities right right here? 372 00:19:06,520 --> 00:19:08,760 Speaker 7: Well, I completely agree with you there in that I 373 00:19:09,000 --> 00:19:11,040 Speaker 7: think the outperformance of high yield is a bit of 374 00:19:11,080 --> 00:19:13,840 Speaker 7: a head scratcher. You know, I think there are actually 375 00:19:13,840 --> 00:19:16,280 Speaker 7: a lot of opportunities in fixed income if you look 376 00:19:16,359 --> 00:19:19,880 Speaker 7: at pretty much any subasset class in this space, we're 377 00:19:19,880 --> 00:19:20,800 Speaker 7: talking about yields that. 378 00:19:20,800 --> 00:19:22,840 Speaker 5: Are at the high end of their ten year range. 379 00:19:22,920 --> 00:19:26,480 Speaker 7: Right, So just by sort of owning and cluding those coupons, 380 00:19:26,760 --> 00:19:30,520 Speaker 7: investors can get really attractive returns. But high yield, you know, 381 00:19:31,119 --> 00:19:34,520 Speaker 7: spreads or near historic lows, there's very little risk kind 382 00:19:34,520 --> 00:19:36,520 Speaker 7: of built into those names, and so that's where we 383 00:19:36,520 --> 00:19:37,760 Speaker 7: would be a bit more cautious. 384 00:19:38,000 --> 00:19:39,720 Speaker 2: One final question, Carol, I got a run here to 385 00:19:39,760 --> 00:19:43,400 Speaker 2: wrap up the show. But it's just simple energy. Nobody's 386 00:19:43,400 --> 00:19:45,679 Speaker 2: talking about now, you know, it's like off we wtch 387 00:19:45,680 --> 00:19:49,280 Speaker 2: crude oil. Cara Murphy at eighty dollars a barrels Energy 388 00:19:49,280 --> 00:19:51,679 Speaker 2: on your radar is an equity proposition. 389 00:19:52,960 --> 00:19:55,600 Speaker 7: I think energy actually is really interesting. You go back 390 00:19:55,640 --> 00:19:58,560 Speaker 7: to valuations, the whole sector's training at half of their 391 00:19:58,600 --> 00:20:01,360 Speaker 7: ten year pe and again that's not the only thing 392 00:20:01,359 --> 00:20:02,880 Speaker 7: that you're going to look at, but I think there 393 00:20:02,920 --> 00:20:06,159 Speaker 7: are some really interesting long term opportunities. Great example of 394 00:20:06,200 --> 00:20:08,160 Speaker 7: an area of the market that's just been overlooked. 395 00:20:08,760 --> 00:20:13,120 Speaker 2: Kara, Thank you so much. Cara Murphy there, teacher Prague. Yeah, 396 00:20:13,200 --> 00:20:15,240 Speaker 2: the Czech Republic a few years ago. 397 00:20:15,320 --> 00:20:16,880 Speaker 4: Now down in Austin, Texas. 398 00:20:27,160 --> 00:20:30,480 Speaker 2: Good morning everyone, Tom Keen and Paul Sweeney and the 399 00:20:30,600 --> 00:20:35,080 Speaker 2: Headlines and newspaper Report our most popular segment of the day. 400 00:20:35,240 --> 00:20:38,920 Speaker 2: This is a question about that, Lisa Mateo, please all right. 401 00:20:38,920 --> 00:20:40,960 Speaker 1: So we've been hearing about how the National Guard being 402 00:20:40,960 --> 00:20:43,679 Speaker 1: deployed into the New York City subways. So the New 403 00:20:43,760 --> 00:20:46,919 Speaker 1: York Times took this interesting look into how bad the 404 00:20:47,000 --> 00:20:49,920 Speaker 1: crime is underground. So the crime rates they jumped during 405 00:20:49,920 --> 00:20:52,679 Speaker 1: the pandemic starting in twenty twenty, but the subway became 406 00:20:52,760 --> 00:20:55,960 Speaker 1: a little bit safer last year. But things started to 407 00:20:56,040 --> 00:20:58,359 Speaker 1: change this year. I mean, you hear Michael Barr report 408 00:20:58,359 --> 00:21:00,680 Speaker 1: about this all the time, right. According to Police SATA, 409 00:21:00,840 --> 00:21:04,600 Speaker 1: overall major crimes in the transit system increase thirteen percent 410 00:21:04,800 --> 00:21:07,880 Speaker 1: so far this year through February twenty fifth. There's also 411 00:21:07,880 --> 00:21:09,919 Speaker 1: been more assaults against subway. 412 00:21:09,600 --> 00:21:11,280 Speaker 8: Employees than last year. 413 00:21:11,560 --> 00:21:13,119 Speaker 1: And they've tried to do a number of things right. 414 00:21:13,119 --> 00:21:16,240 Speaker 1: They increased overtime pay for police officers. They began removing 415 00:21:16,320 --> 00:21:19,040 Speaker 1: mentally ill homeless people from the system. They install these 416 00:21:19,040 --> 00:21:22,159 Speaker 1: surveillance cameras and now this is a step they're getting to. 417 00:21:22,200 --> 00:21:25,960 Speaker 1: They're deploying hundreds of state troopers national Guard members into 418 00:21:25,960 --> 00:21:27,000 Speaker 1: the subway system. 419 00:21:28,040 --> 00:21:32,639 Speaker 2: This is loaded. Sure, it's here and there. As I 420 00:21:32,680 --> 00:21:36,400 Speaker 2: said at home, I said, wow, we deployed the National Guard. 421 00:21:36,520 --> 00:21:37,280 Speaker 5: It's not a good look. 422 00:21:37,440 --> 00:21:39,800 Speaker 4: I'm sure the NYPD's not particularly happy. I ride the 423 00:21:39,840 --> 00:21:41,960 Speaker 4: subway every single day. I've ridden a subway every day 424 00:21:41,960 --> 00:21:44,800 Speaker 4: for forty five years. It's better today than when I started. 425 00:21:45,080 --> 00:21:47,240 Speaker 4: I feel completely safe in a subway. Maybe on the 426 00:21:47,280 --> 00:21:50,119 Speaker 4: other side, I'm just not paying contention, but I don't know. 427 00:21:50,320 --> 00:21:52,199 Speaker 4: I mean, the subway's always been a dicey thing, but 428 00:21:52,200 --> 00:21:55,760 Speaker 4: it's the most efficient way to get around town. And 429 00:21:56,200 --> 00:21:57,239 Speaker 4: you know, I don't know. 430 00:21:57,600 --> 00:22:02,000 Speaker 2: Mayor Adams articulated how few crimes there are given the 431 00:22:02,160 --> 00:22:05,920 Speaker 2: millions of riders, And yet here we are with the 432 00:22:06,040 --> 00:22:08,280 Speaker 2: tension that we feel in the city. Yep, I mean 433 00:22:08,440 --> 00:22:10,440 Speaker 2: it's tangible. What do we have now? 434 00:22:10,520 --> 00:22:12,760 Speaker 1: It's tough. Sure, we'll head to the Wall Street Journal. 435 00:22:12,800 --> 00:22:15,920 Speaker 1: Now you've heard of people sprinkling ashes at sea, right, 436 00:22:15,960 --> 00:22:19,240 Speaker 1: that's one trend. But now there's this company, Celestis. It's 437 00:22:19,280 --> 00:22:23,000 Speaker 1: a Houston based company. They're dedicated to launching human ashes 438 00:22:23,119 --> 00:22:25,840 Speaker 1: into space. So this is becoming the new thing. It 439 00:22:25,960 --> 00:22:30,040 Speaker 1: started the first flight actually nineteen ninety seven. It's sent 440 00:22:30,080 --> 00:22:33,480 Speaker 1: since then the cremated remains of more than two thousand clients. 441 00:22:33,640 --> 00:22:36,000 Speaker 1: They go to Earth orbit, the Moon, and most recently 442 00:22:36,000 --> 00:22:37,399 Speaker 1: they also go to deep space. 443 00:22:37,440 --> 00:22:38,720 Speaker 8: And it's not cheap. 444 00:22:38,760 --> 00:22:41,359 Speaker 1: Okay, So the cost of this a lunar deep space flight, 445 00:22:41,600 --> 00:22:45,320 Speaker 1: it'll cost around thirteen thousand dollars. Flights of the edge 446 00:22:45,320 --> 00:22:48,440 Speaker 1: of space between three thousand and five thousand, okay, a 447 00:22:48,440 --> 00:22:51,680 Speaker 1: little bit more affordable. And there's a couple people who've 448 00:22:51,680 --> 00:22:54,359 Speaker 1: done it. You have Star Trek creator Gene Roddenberry and 449 00:22:54,400 --> 00:22:57,160 Speaker 1: his wife. Actually I did not know that. Today we're 450 00:22:57,160 --> 00:23:01,240 Speaker 1: recent off to space, signed fiction authors, astronauts, engineers, you 451 00:23:01,240 --> 00:23:04,480 Speaker 1: have just space fans, and yes, dog dashes, they're sending 452 00:23:04,480 --> 00:23:06,360 Speaker 1: their dog ashes rotates. 453 00:23:07,000 --> 00:23:09,639 Speaker 2: There was a point where there were so many gerbils. 454 00:23:09,960 --> 00:23:13,760 Speaker 2: Oh hang honest. There was a tree out back where 455 00:23:13,760 --> 00:23:16,760 Speaker 2: we had to go and bury the damn churbels and 456 00:23:16,840 --> 00:23:20,119 Speaker 2: the biggest worry was bringing up one as you were 457 00:23:20,240 --> 00:23:24,960 Speaker 2: buried five as well. Called it the gerbil tree. 458 00:23:25,520 --> 00:23:29,080 Speaker 8: We have them went in our yard too. We have to. 459 00:23:28,600 --> 00:23:35,119 Speaker 1: Put it'll cost you thirteen thousand dollars, which is what 460 00:23:35,160 --> 00:23:39,400 Speaker 1: the damn Gerbil costs. All right, I have a new 461 00:23:39,440 --> 00:23:42,520 Speaker 1: cocktail trench for you, Tom. Okay, this is a journal. 462 00:23:42,960 --> 00:23:46,920 Speaker 8: Have you had one of the Oleo martinis? Okay? So 463 00:23:47,119 --> 00:23:47,640 Speaker 8: here's the thing. 464 00:23:47,640 --> 00:23:51,360 Speaker 1: It's a wet martini with a high vermuth to gin ratio. 465 00:23:52,280 --> 00:23:55,239 Speaker 1: Here's the real magic. It's called fat washing. Here's what 466 00:23:55,280 --> 00:23:57,760 Speaker 1: you do. You shake the spirit right in this case, 467 00:23:57,760 --> 00:23:58,320 Speaker 1: it's for mood. 468 00:23:58,400 --> 00:23:59,159 Speaker 2: Why are you looking at it? 469 00:24:00,440 --> 00:24:03,879 Speaker 1: You shake it with a fat like olive oil you 470 00:24:03,920 --> 00:24:06,119 Speaker 1: put in the freezer, and then you skim off the 471 00:24:06,160 --> 00:24:10,320 Speaker 1: fat that hardens on top, so it's like this silky booze. 472 00:24:10,359 --> 00:24:15,199 Speaker 1: It makes it dangerously drinkable, and you garnish it with 473 00:24:15,280 --> 00:24:17,439 Speaker 1: a single drop of oil that kind of dances on 474 00:24:17,520 --> 00:24:21,080 Speaker 1: top as you sip it. So this is the Wall 475 00:24:21,080 --> 00:24:24,399 Speaker 1: Street Journal has the recipe there in case you're interested. 476 00:24:25,720 --> 00:24:28,840 Speaker 2: Pro tip. They have done a fabulous job and they 477 00:24:28,840 --> 00:24:32,320 Speaker 2: have reopened the Hotel Chelsea. The first time I was 478 00:24:32,359 --> 00:24:35,200 Speaker 2: in there, if there been somebody dead in the corridor, 479 00:24:35,200 --> 00:24:37,880 Speaker 2: I would have been surprised. And they've really just done 480 00:24:37,880 --> 00:24:40,960 Speaker 2: a great job opening and they made the drink you just. 481 00:24:40,920 --> 00:24:42,960 Speaker 8: Described something like that. 482 00:24:43,280 --> 00:24:46,560 Speaker 2: It's worth the track to do this. It's all super 483 00:24:46,680 --> 00:24:50,000 Speaker 2: chilled and it costs more money than God and all that. 484 00:24:50,040 --> 00:24:53,360 Speaker 2: We used to call that a reverse martini, and then 485 00:24:53,440 --> 00:24:55,240 Speaker 2: the way I would do that is that's a reverse 486 00:24:55,320 --> 00:24:58,600 Speaker 2: martini with a Colby on top, and the Colby is 487 00:24:58,720 --> 00:25:01,200 Speaker 2: Colby likes lots of like what do you call it 488 00:25:01,240 --> 00:25:04,800 Speaker 2: when you're dirty martini? Lots of olive stuff. So that's 489 00:25:04,840 --> 00:25:08,720 Speaker 2: really it's like a refined is it like a refined. 490 00:25:08,320 --> 00:25:12,080 Speaker 8: Dirty and you serve it with fried olives. So that's 491 00:25:12,119 --> 00:25:12,600 Speaker 8: that's the news. 492 00:25:12,800 --> 00:25:15,720 Speaker 2: You're chilling. We don't go to bars like she goes 493 00:25:15,760 --> 00:25:18,240 Speaker 2: sound now of course not. Yeah, I'm like, can I 494 00:25:18,240 --> 00:25:23,399 Speaker 2: have a paps please? 495 00:25:23,480 --> 00:25:29,399 Speaker 1: This is the kicker here, Dwayne the Rock, Johnson, Caroline. 496 00:25:29,040 --> 00:25:31,480 Speaker 8: Rich He's not control, I'm telling you. 497 00:25:31,720 --> 00:25:35,360 Speaker 1: It's called Papa Tui personal care brand for men. It's 498 00:25:35,440 --> 00:25:39,280 Speaker 1: launching in Target stores and online on Sunday. It's got everything. 499 00:25:39,280 --> 00:25:42,280 Speaker 1: It even has products for tattoo care. So when people 500 00:25:42,320 --> 00:25:44,359 Speaker 1: get tattoos, they don't know what to put on it. 501 00:25:44,640 --> 00:25:46,040 Speaker 1: My son just got a whole sleeve. 502 00:25:46,400 --> 00:25:49,439 Speaker 4: There you go, you can put He comes to you 503 00:25:49,520 --> 00:25:51,879 Speaker 4: for permission for that or he did that. 504 00:25:52,000 --> 00:25:52,960 Speaker 1: He's over twenty one. 505 00:25:53,119 --> 00:25:54,560 Speaker 8: So he does his thing. 506 00:25:54,600 --> 00:25:56,520 Speaker 4: And in hindsight, did you approve? 507 00:25:56,600 --> 00:25:56,760 Speaker 3: Or no? 508 00:25:58,920 --> 00:26:01,920 Speaker 1: I'm not real with it, but I don't know. He says, 509 00:26:01,920 --> 00:26:02,719 Speaker 1: it gets the ladies. 510 00:26:02,800 --> 00:26:05,920 Speaker 2: Okay, so what's a tie in here to the rock? 511 00:26:06,160 --> 00:26:08,040 Speaker 2: You'd have the rocket here, which is very och. 512 00:26:07,920 --> 00:26:12,040 Speaker 8: Yes, so it's his line. So he's launching it. It's affordable. 513 00:26:12,080 --> 00:26:14,560 Speaker 8: Everything is between like maybe eight and ten bucks. But 514 00:26:14,640 --> 00:26:15,280 Speaker 8: you got everything. 515 00:26:15,280 --> 00:26:21,280 Speaker 1: You got lotion, toner, shampoo, condition or body you know, wash, deodorants, everything. 516 00:26:21,560 --> 00:26:23,480 Speaker 1: So he says, men come to him and they ask 517 00:26:23,560 --> 00:26:26,200 Speaker 1: him actually about not only his workouts but his skincare. 518 00:26:26,720 --> 00:26:28,600 Speaker 2: Man, would you say the same thing when you met 519 00:26:28,600 --> 00:26:32,600 Speaker 2: the rock? Lisa, I think, thank you. It was quite 520 00:26:32,600 --> 00:26:37,240 Speaker 2: a newspaper phill. Thank you, Lisa Mateo providing a value 521 00:26:37,280 --> 00:26:41,520 Speaker 2: add here. This is the Bloomberg Surveillance Podcast, bringing you 522 00:26:41,640 --> 00:26:46,240 Speaker 2: the best in economics, finance, investment, and international relations. You 523 00:26:46,280 --> 00:26:49,600 Speaker 2: can also watch the show live on YouTube. Visit the 524 00:26:49,600 --> 00:26:54,400 Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday 525 00:26:54,400 --> 00:26:57,400 Speaker 2: mornings from seven to ten am Eastern from our global 526 00:26:57,440 --> 00:27:02,120 Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 527 00:27:02,480 --> 00:27:06,000 Speaker 2: or anywhere else you listen and always on Bloomberg Radio, 528 00:27:06,200 --> 00:27:09,399 Speaker 2: the Bloomberg Terminal, and the Bloomberg Business app.