1 00:00:05,160 --> 00:00:08,480 Speaker 1: This is the Bloomberg Surveillance Podcast. I'm Tom Keane, along 2 00:00:08,520 --> 00:00:12,360 Speaker 1: with Jonathan Farrow and Lisa Abramowitz. Join us each day 3 00:00:12,400 --> 00:00:16,840 Speaker 1: for insight from the best and economics, geopolitics, finance and investment. 4 00:00:17,280 --> 00:00:22,079 Speaker 1: Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and 5 00:00:22,320 --> 00:00:26,600 Speaker 1: anywhere you get your podcasts, and always on Bloomberg dot Com, 6 00:00:26,640 --> 00:00:30,560 Speaker 1: the Bloomberg Terminal, and the Bloomberg Business App. Joining us 7 00:00:30,640 --> 00:00:33,919 Speaker 1: right now is Thomas Purcelli, Chief US economist at PGUM 8 00:00:34,560 --> 00:00:37,839 Speaker 1: Fixed Income. He's definitive with work on the open market 9 00:00:37,880 --> 00:00:41,720 Speaker 1: desk at the Fed and also truly great work on 10 00:00:41,880 --> 00:00:47,080 Speaker 1: wage dynamics in America. Congratulations on a new shingle across 11 00:00:47,120 --> 00:00:47,640 Speaker 1: the Hudson. 12 00:00:47,840 --> 00:00:48,159 Speaker 2: Thank you. 13 00:00:48,840 --> 00:00:50,320 Speaker 1: As simple as I can. I want to go to 14 00:00:50,320 --> 00:00:52,960 Speaker 1: your wheelhouse right away. You're talking to Greg Peters, which 15 00:00:53,000 --> 00:00:56,000 Speaker 1: is really difficult. You've got to prepare medica. 16 00:00:56,120 --> 00:00:58,680 Speaker 2: He's the best, loving the pieces. 17 00:00:59,000 --> 00:01:01,160 Speaker 1: You're talking to Greg here, and he's going to turn 18 00:01:01,200 --> 00:01:02,760 Speaker 1: to you just like I am, and say, okay, but 19 00:01:02,800 --> 00:01:04,920 Speaker 1: what about wage dynamics. That's what you on the high 20 00:01:04,920 --> 00:01:08,600 Speaker 1: ground on. How are wages in America into twenty twenty four? 21 00:01:08,880 --> 00:01:13,960 Speaker 3: Yeah, look, I think here's here's the problem for the 22 00:01:14,440 --> 00:01:17,399 Speaker 3: backdrop with regard to wages, which look in real terms, 23 00:01:17,440 --> 00:01:20,319 Speaker 3: I think we'll appreciate or sort of you know, performing decently. 24 00:01:21,200 --> 00:01:25,000 Speaker 3: That The challenge though, is if you have real revenue 25 00:01:25,000 --> 00:01:30,000 Speaker 3: that's moving sideways, right which it is, and you have 26 00:01:30,400 --> 00:01:33,960 Speaker 3: which obviously is a function of the consumer that is 27 00:01:33,959 --> 00:01:37,000 Speaker 3: sort of sort of slowing down to some extent, how 28 00:01:37,040 --> 00:01:39,679 Speaker 3: do companies respond to that? How do companies respond to 29 00:01:39,760 --> 00:01:44,360 Speaker 3: real revenue moving sideways, wage pressures firming up a bit 30 00:01:44,440 --> 00:01:47,520 Speaker 3: in real terms. I think that to me, that's a 31 00:01:47,600 --> 00:01:52,440 Speaker 3: perfect recipe for companies to go after labor, particularly if 32 00:01:52,440 --> 00:01:54,400 Speaker 3: it means you're going to get a margin compression, which 33 00:01:54,440 --> 00:01:56,000 Speaker 3: is something that you know, we've been talking about for 34 00:01:56,040 --> 00:01:57,360 Speaker 3: a while and I think Lisa, you and I talked 35 00:01:57,400 --> 00:01:59,720 Speaker 3: about that last time I was on That to me 36 00:01:59,800 --> 00:02:02,800 Speaker 3: is challenge as it relates to sort of the labor 37 00:02:02,880 --> 00:02:04,360 Speaker 3: dynamic in the United States to. 38 00:02:04,280 --> 00:02:06,800 Speaker 4: Translate this, yeah, they're going to be layoffs. That's basically 39 00:02:06,840 --> 00:02:08,880 Speaker 4: what you're seeing is that if you see this incredible 40 00:02:08,919 --> 00:02:11,960 Speaker 4: margin compression, if you see costs going up and you 41 00:02:12,000 --> 00:02:15,160 Speaker 4: see consumers pushing back on prices, the next step is 42 00:02:15,520 --> 00:02:18,160 Speaker 4: people are going to lose their jobs. How much pushback 43 00:02:18,320 --> 00:02:21,000 Speaker 4: is there actually to pricing if we're still seeing robust 44 00:02:21,080 --> 00:02:23,720 Speaker 4: service as side inflation as this report just suggested. 45 00:02:23,880 --> 00:02:26,480 Speaker 3: Yeah so, and what we know is that wage pressures 46 00:02:27,000 --> 00:02:30,000 Speaker 3: again remaining firm in real terms, but it's coming in 47 00:02:30,040 --> 00:02:33,359 Speaker 3: the context of inflationary pressure that's now slowing down. I mean, 48 00:02:33,760 --> 00:02:35,920 Speaker 3: this was just two tenths that we got I get it, 49 00:02:36,639 --> 00:02:41,360 Speaker 3: you know, firmer than expectations, but that still doesn't change 50 00:02:41,400 --> 00:02:43,600 Speaker 3: the trend. The trend of inflation is actually moving slower. 51 00:02:44,080 --> 00:02:46,680 Speaker 3: So that means that the pass through is becoming much 52 00:02:46,720 --> 00:02:47,920 Speaker 3: more difficult for companies. 53 00:02:48,160 --> 00:02:48,840 Speaker 5: Well, but this is. 54 00:02:48,840 --> 00:02:50,880 Speaker 4: We're seeing this. You know, we saw this with American 55 00:02:50,919 --> 00:02:53,320 Speaker 4: Airlines and Spirit earlier this morning. So the pass through 56 00:02:53,440 --> 00:02:54,480 Speaker 4: is getting more difficult. 57 00:02:54,800 --> 00:02:56,960 Speaker 3: And sorry, no no, I was just going to say, Lisa, 58 00:02:57,160 --> 00:03:00,160 Speaker 3: I think it's such an important idea. Not only do 59 00:03:00,160 --> 00:03:02,760 Speaker 3: you have that idea this dynamic where the pastor is 60 00:03:02,760 --> 00:03:05,400 Speaker 3: becoming much much more complicated, but you know, just just 61 00:03:05,400 --> 00:03:07,120 Speaker 3: look at what some of the retailers are have been 62 00:03:07,160 --> 00:03:10,520 Speaker 3: talking about. I mean, the consumers is now trading down, right, 63 00:03:10,520 --> 00:03:12,400 Speaker 3: I mean, just in the context of these wage pressure, 64 00:03:12,600 --> 00:03:14,640 Speaker 3: these inflationary pressures that are out there. I think it's 65 00:03:14,639 --> 00:03:15,560 Speaker 3: such an important idea. 66 00:03:15,680 --> 00:03:17,280 Speaker 4: The problem with it is, and this is what I'm 67 00:03:17,280 --> 00:03:18,919 Speaker 4: struggling with, and I think a lot of other people 68 00:03:18,919 --> 00:03:21,280 Speaker 4: are as well. We were saying this six months ago. 69 00:03:21,560 --> 00:03:23,560 Speaker 4: We were saying that consumers were going to push back 70 00:03:23,800 --> 00:03:26,520 Speaker 4: and that savings were going to be beaten down. And suddenly, 71 00:03:26,760 --> 00:03:29,160 Speaker 4: you know, we were going to see, you know, a recession. 72 00:03:29,360 --> 00:03:31,920 Speaker 4: It didn't happen, and the data totally keep surprising to 73 00:03:31,919 --> 00:03:34,160 Speaker 4: the upside with this yet another surprise, the upside and 74 00:03:34,240 --> 00:03:36,080 Speaker 4: core how can you explain that? 75 00:03:36,200 --> 00:03:37,800 Speaker 3: Yes, so I think there's a really easy way to 76 00:03:37,840 --> 00:03:40,240 Speaker 3: explain it. So, in fact, there's a couple of ways 77 00:03:40,240 --> 00:03:43,200 Speaker 3: to explain it. So one, the idea of excess saving 78 00:03:43,280 --> 00:03:46,360 Speaker 3: is real, right, I mean, the consumers still working that down. 79 00:03:46,400 --> 00:03:47,160 Speaker 2: So let's just be clear. 80 00:03:47,200 --> 00:03:51,320 Speaker 3: The consumer has had a massive pool with which to 81 00:03:51,520 --> 00:03:52,480 Speaker 3: sort of dive into. 82 00:03:52,880 --> 00:03:56,000 Speaker 2: Excess saving was one of those ideas. The other was credit. 83 00:03:56,200 --> 00:03:58,520 Speaker 3: I mean, credit usage has been you know, sort of 84 00:03:58,520 --> 00:04:01,240 Speaker 3: off the charts. I mean you're looking at revolving debt 85 00:04:01,280 --> 00:04:05,200 Speaker 3: that's now running out a trillion dollars, and so the 86 00:04:05,240 --> 00:04:07,440 Speaker 3: consumer has been able to sort of perpetuate the sort 87 00:04:07,440 --> 00:04:10,800 Speaker 3: of the consumer backdrop as a result of these two ideas. 88 00:04:11,080 --> 00:04:13,440 Speaker 3: But just to be clear that now is sort of 89 00:04:13,520 --> 00:04:16,480 Speaker 3: drying up a little bit, right. Excess saving continues to fade. 90 00:04:16,520 --> 00:04:19,840 Speaker 3: It's not gone, it continues to fade. Banks are now 91 00:04:19,839 --> 00:04:22,320 Speaker 3: actually getting pretty stingy as it relates to how much 92 00:04:22,360 --> 00:04:24,800 Speaker 3: credit they're willing to sort of lend out. And we 93 00:04:24,800 --> 00:04:32,360 Speaker 3: could see that in obviously bank's willingness to make these 94 00:04:32,440 --> 00:04:35,120 Speaker 3: kind of loans. And so I think the whole that 95 00:04:35,200 --> 00:04:37,200 Speaker 3: this this, this this backdrop. 96 00:04:36,800 --> 00:04:38,680 Speaker 2: Is drying up, right. The ammunition is drying up for 97 00:04:38,720 --> 00:04:39,760 Speaker 2: the consumer to some extent. 98 00:04:39,880 --> 00:04:42,880 Speaker 1: What I think is so important here is, with Robert 99 00:04:42,880 --> 00:04:45,080 Speaker 1: tipp coming on in the next hour, John, you've got 100 00:04:45,120 --> 00:04:47,479 Speaker 1: to turn to a bunch of bond animals with the 101 00:04:47,640 --> 00:04:53,640 Speaker 1: ambiguities between your economics in their portfolio management. Can you 102 00:04:53,760 --> 00:04:59,640 Speaker 1: assume a disinflationary tendency means price up, yield down in 103 00:04:59,680 --> 00:05:01,679 Speaker 1: bond portfolios? Is that just a given? 104 00:05:02,000 --> 00:05:02,200 Speaker 2: Yeah? 105 00:05:02,279 --> 00:05:05,160 Speaker 3: So I think this is a really important idea. One 106 00:05:05,200 --> 00:05:07,359 Speaker 3: of the things that we've been talking about at PGM 107 00:05:07,480 --> 00:05:11,200 Speaker 3: is this idea that rates can stay high. Rate rates 108 00:05:11,200 --> 00:05:14,360 Speaker 3: can stay pretty elevated. And I think that you can 109 00:05:14,440 --> 00:05:16,600 Speaker 3: have rates remain pretty elevated. I mean when I think 110 00:05:16,640 --> 00:05:18,880 Speaker 3: about sort of the fed's reaction function toll of this, 111 00:05:20,160 --> 00:05:22,120 Speaker 3: you know, and again I get it on CPI DA, 112 00:05:22,160 --> 00:05:25,640 Speaker 3: we're talking about inflation. But the thing that I keep 113 00:05:25,640 --> 00:05:27,520 Speaker 3: on coming back to, and I'm trying to bring it 114 00:05:27,560 --> 00:05:30,039 Speaker 3: back to this today here now is the labor backdrop. 115 00:05:30,080 --> 00:05:32,360 Speaker 3: Because I think when push comes to shove, I think 116 00:05:32,360 --> 00:05:35,000 Speaker 3: the Fed's can be very responsive to the labor backdrop. 117 00:05:35,080 --> 00:05:37,279 Speaker 3: So I can easily make the case for the FED 118 00:05:37,320 --> 00:05:39,320 Speaker 3: to engage in an easing cycle. Now, I think when 119 00:05:39,360 --> 00:05:42,279 Speaker 3: people say easing cycle, I think they immediately think of, Hey, 120 00:05:42,320 --> 00:05:44,640 Speaker 3: this big aggressive easing cycle. It's not going to be that. 121 00:05:44,880 --> 00:05:46,840 Speaker 2: I think it's a dynamic where the FED cuts back. 122 00:05:46,920 --> 00:05:50,920 Speaker 1: Their easiest path within a symmetry is to go longer. Yes, 123 00:05:51,000 --> 00:05:52,480 Speaker 1: stay elevated and go longer. 124 00:05:52,560 --> 00:05:56,000 Speaker 3: I agree, And so to me, that's sort of the 125 00:05:56,000 --> 00:05:58,560 Speaker 3: big challenge here for the FED. It's I think it 126 00:05:58,600 --> 00:06:00,640 Speaker 3: doesn't have to be a big aggressive cycle. If it's 127 00:06:00,640 --> 00:06:02,359 Speaker 3: not going to be a big aggressive slowing and economic 128 00:06:02,640 --> 00:06:03,279 Speaker 3: twenty five or. 129 00:06:03,279 --> 00:06:05,719 Speaker 1: Fifty beefs and just sit on it through twenty four. 130 00:06:05,760 --> 00:06:08,320 Speaker 3: I think that's exactly right. So Our call has been 131 00:06:08,320 --> 00:06:10,320 Speaker 3: you can easily see a dynamic where the FED cuts 132 00:06:10,560 --> 00:06:12,960 Speaker 3: you'll call it, fifty to seventy five basis points over 133 00:06:13,000 --> 00:06:16,040 Speaker 3: the coming year. And I think that's how you sort 134 00:06:16,080 --> 00:06:19,760 Speaker 3: of get to this dynamic where rates still remain pretty elevated, 135 00:06:19,760 --> 00:06:20,120 Speaker 3: which is. 136 00:06:20,120 --> 00:06:24,000 Speaker 4: The reason why I wonder if boldilocks and soft landing 137 00:06:24,120 --> 00:06:26,240 Speaker 4: is the best case scenario for risk assets or if 138 00:06:26,240 --> 00:06:29,279 Speaker 4: it's actually the worst case scenario for risk assets over 139 00:06:29,279 --> 00:06:33,000 Speaker 4: the longer term, particularly corporate credit. When you face off 140 00:06:33,000 --> 00:06:35,560 Speaker 4: with this idea of refinancing, what's your view? Is that 141 00:06:35,600 --> 00:06:36,680 Speaker 4: potentially problematic? 142 00:06:36,800 --> 00:06:38,240 Speaker 2: So it can be right. 143 00:06:38,240 --> 00:06:40,880 Speaker 3: I mean, I think the rollover risk idea will become 144 00:06:40,880 --> 00:06:43,560 Speaker 3: a challenge, but that's not a challenge for necessarily right now, right. 145 00:06:43,560 --> 00:06:45,360 Speaker 3: I mean, a lot of companies have done a great 146 00:06:45,440 --> 00:06:48,039 Speaker 3: job of turning out their debt. One of the things 147 00:06:48,040 --> 00:06:54,040 Speaker 3: that we've been talking about at PGM and delete. My boss, 148 00:06:54,279 --> 00:06:57,279 Speaker 3: I think he's been absolutely fantastic about highlighting this really 149 00:06:57,360 --> 00:07:00,920 Speaker 3: important structural idea that's out there, which is something I've 150 00:07:00,920 --> 00:07:03,120 Speaker 3: been talking about since, you know, my prior life. 151 00:07:03,480 --> 00:07:04,680 Speaker 2: I think that the pieces are in. 152 00:07:04,720 --> 00:07:07,680 Speaker 3: Place for productivity to really kill it. I think that's 153 00:07:07,680 --> 00:07:10,080 Speaker 3: going to take time to develop. And I think that 154 00:07:10,240 --> 00:07:14,320 Speaker 3: leases is basically that that's another really important idea too 155 00:07:14,400 --> 00:07:15,960 Speaker 3: uncerta into your your your question. 156 00:07:16,120 --> 00:07:17,840 Speaker 1: We got to go when you go across the Hudson River, 157 00:07:17,920 --> 00:07:20,360 Speaker 1: as Peters, let you use the Hinckley picnic Bode. He's 158 00:07:20,360 --> 00:07:23,960 Speaker 1: got a little Hinckley thing that takes you over to Pega. 159 00:07:24,520 --> 00:07:25,960 Speaker 2: I'm just happy to be around him. 160 00:07:26,480 --> 00:07:29,240 Speaker 1: Okay, Tom Purcella, thank you so much. Say Robert Tip 161 00:07:29,240 --> 00:07:31,360 Speaker 1: as well. He'll be here later. Mister Purcelli is with 162 00:07:31,480 --> 00:07:38,600 Speaker 1: p Jim Fixed Income. We are doing the best we 163 00:07:38,680 --> 00:07:40,960 Speaker 1: can on this. And when you have Mark German and 164 00:07:41,160 --> 00:07:44,240 Speaker 1: Ed Ludlow leading to charge, it is best in world 165 00:07:44,280 --> 00:07:47,840 Speaker 1: analysis of this. And what Bloomberg Surveillance has done is 166 00:07:47,920 --> 00:07:50,560 Speaker 1: get away from the blah blah blah and actually talk 167 00:07:50,640 --> 00:07:53,080 Speaker 1: about what it means for the company, what it means 168 00:07:53,120 --> 00:07:55,240 Speaker 1: for the stock, and frankly, what it means for America. 169 00:07:55,320 --> 00:07:58,920 Speaker 1: Mister forty joins US now senior research channelist D. A. Davison. 170 00:07:58,960 --> 00:08:01,920 Speaker 1: He is a neutral on Apple. Let me cut to 171 00:08:01,960 --> 00:08:04,440 Speaker 1: the chase. I thought some of it was fascinating and 172 00:08:04,480 --> 00:08:07,440 Speaker 1: the rest of it was sort of but time to me, 173 00:08:07,520 --> 00:08:09,280 Speaker 1: the key thing is What does it mean for the 174 00:08:09,320 --> 00:08:13,240 Speaker 1: broader Apple ecosystem? I mean, I think there's when you 175 00:08:13,320 --> 00:08:16,840 Speaker 1: have storage, everybody's complaining about two terabytes of storage and 176 00:08:17,120 --> 00:08:20,480 Speaker 1: iCloud they pop that sucker out the six to twelve terabytes. 177 00:08:20,640 --> 00:08:23,920 Speaker 1: Little things like that below the headline. What's yesterday mean 178 00:08:23,960 --> 00:08:26,080 Speaker 1: for the Apple ecosystem? 179 00:08:26,120 --> 00:08:26,400 Speaker 6: Sure? 180 00:08:26,440 --> 00:08:29,800 Speaker 7: So, I think that what I thought was most interesting 181 00:08:30,520 --> 00:08:33,400 Speaker 7: is that they're taking at facto price increase on the 182 00:08:33,440 --> 00:08:36,679 Speaker 7: promax are They're not offering one hundred and twenty eight 183 00:08:36,720 --> 00:08:41,240 Speaker 7: megabt megabyte model anymore, So it's one hundred dollars more to. 184 00:08:41,240 --> 00:08:45,440 Speaker 6: Get an ipro Max. And then the dongle. 185 00:08:46,200 --> 00:08:49,240 Speaker 7: You teased it before, But the fact we're talking about 186 00:08:49,240 --> 00:08:52,760 Speaker 7: accessories not the phone is good and bad news. The 187 00:08:52,800 --> 00:08:56,120 Speaker 7: good news is that it should be a creative to margins. 188 00:08:56,559 --> 00:08:59,280 Speaker 7: The margins on a twenty nine dollars dongle ought to 189 00:08:59,280 --> 00:09:03,079 Speaker 7: be fantastic for the ecosystem. I think that you may 190 00:09:03,120 --> 00:09:07,480 Speaker 7: not see the incremental new buyer this year, but as 191 00:09:07,520 --> 00:09:11,600 Speaker 7: you pointed out earlier, the wireless carriers seem to want 192 00:09:11,640 --> 00:09:14,760 Speaker 7: to subsidize their five G networks, which is also good 193 00:09:14,800 --> 00:09:15,560 Speaker 7: news for Apple. 194 00:09:15,679 --> 00:09:17,520 Speaker 1: I got it so good and bad I got eight 195 00:09:17,520 --> 00:09:19,440 Speaker 1: ways to go here, Tom and John and Lisa have 196 00:09:19,480 --> 00:09:24,640 Speaker 1: more intelligent questions. They got a three nanimeter a seventeen chip. 197 00:09:25,160 --> 00:09:28,400 Speaker 1: Is it enough for someone to upgrade in China? Is 198 00:09:28,440 --> 00:09:31,240 Speaker 1: it enough for someone to upgrade? Sitting to my right 199 00:09:31,320 --> 00:09:34,280 Speaker 1: here in New York, where he's adamant, he's not gonna 200 00:09:34,280 --> 00:09:38,319 Speaker 1: fall for the fanboy baloney? Is that new chip enough 201 00:09:38,320 --> 00:09:39,000 Speaker 1: to upgrade? 202 00:09:40,040 --> 00:09:42,520 Speaker 7: I do not believe that it is. So when I 203 00:09:42,600 --> 00:09:45,200 Speaker 7: was thinking about all the buzzwords and all the new 204 00:09:45,280 --> 00:09:49,280 Speaker 7: things in the iPhone fifteen, I was chuckling at titanium 205 00:09:49,320 --> 00:09:51,720 Speaker 7: and how there have been titanium golf cubs for some 206 00:09:51,920 --> 00:09:55,000 Speaker 7: time now, or how they're essentially no one's pointed out 207 00:09:55,040 --> 00:09:58,680 Speaker 7: that they're offering on Star. And so I'm concerned that 208 00:09:58,760 --> 00:10:03,360 Speaker 7: there's a lo a lot of small incremental adjustments, but 209 00:10:03,440 --> 00:10:05,360 Speaker 7: there's no one item that I think is going to 210 00:10:05,440 --> 00:10:07,760 Speaker 7: get you to wait in line, you know, like we 211 00:10:07,880 --> 00:10:09,000 Speaker 7: used to do for an iPhone. 212 00:10:09,240 --> 00:10:11,480 Speaker 5: So, Tom, you know the bullish thesis. The bullish thesis 213 00:10:11,520 --> 00:10:14,800 Speaker 5: sounds like this, there are tons of people who haven't upgraded. 214 00:10:15,000 --> 00:10:18,280 Speaker 5: The iPhone fifteen is going to get them to upgrade? Now, Tom, 215 00:10:18,280 --> 00:10:20,760 Speaker 5: you clearly don't buy into that. So let's go through 216 00:10:20,760 --> 00:10:24,760 Speaker 5: your rating neutral one eighty price target in the pre market. 217 00:10:24,880 --> 00:10:27,760 Speaker 5: Right now, we're at one seventy six. Given the multiple 218 00:10:27,800 --> 00:10:29,840 Speaker 5: that this stock has and the fact that you don't 219 00:10:29,840 --> 00:10:32,000 Speaker 5: believe in the bullish thesis, Tom, I've got to ask 220 00:10:32,080 --> 00:10:34,120 Speaker 5: the question why this isn't a cell and why that 221 00:10:34,160 --> 00:10:36,000 Speaker 5: one eighty isn't a whole lot lower. 222 00:10:36,880 --> 00:10:39,080 Speaker 7: Yeah, so I do think, I mean, you still have 223 00:10:39,160 --> 00:10:42,400 Speaker 7: an amazing balance sheet, so they have the potential to 224 00:10:42,440 --> 00:10:45,840 Speaker 7: buy back billions of dollars of shares to support the stock. 225 00:10:46,280 --> 00:10:48,720 Speaker 7: I don't think they would ever raise their dividend yield 226 00:10:49,120 --> 00:10:52,640 Speaker 7: to say three percent, to attract that pure dividend investor. 227 00:10:53,160 --> 00:10:56,960 Speaker 7: But the foundation is still there, and I don't think 228 00:10:57,000 --> 00:11:00,880 Speaker 7: that the stock is so overheated they would warn accelerating 229 00:11:00,920 --> 00:11:01,679 Speaker 7: at this point. 230 00:11:01,840 --> 00:11:03,720 Speaker 4: There is this question though, if there isn't anything to 231 00:11:03,800 --> 00:11:07,320 Speaker 4: really touch everybody's eye except for a twenty nine dollars dongle, 232 00:11:07,679 --> 00:11:11,319 Speaker 4: there is an issue of the increasing geopolitical concerns, especially 233 00:11:11,360 --> 00:11:14,040 Speaker 4: as right after this launch, China came out and so 234 00:11:14,160 --> 00:11:17,600 Speaker 4: that they flagged a number of unspecified security incidents with 235 00:11:17,760 --> 00:11:21,000 Speaker 4: the iPhone. How do you factor that into a price target. 236 00:11:22,000 --> 00:11:24,640 Speaker 7: So the way that I factor it in is about 237 00:11:24,679 --> 00:11:27,800 Speaker 7: ten percent of the revenue comes from China. They're clearly 238 00:11:27,840 --> 00:11:31,040 Speaker 7: still heavily dependent on China from a supply chain standpoint. 239 00:11:31,440 --> 00:11:34,240 Speaker 7: And when you think about what I'm thinking of is 240 00:11:34,360 --> 00:11:38,160 Speaker 7: protectionist behavior by the Chinese government. We have protectionist behavior 241 00:11:38,160 --> 00:11:40,800 Speaker 7: in the US as well when you think about banning 242 00:11:40,840 --> 00:11:44,520 Speaker 7: TikTok and things of that nature. But to quantify it, 243 00:11:44,760 --> 00:11:47,680 Speaker 7: ten percent of their sales are at some level of risk, 244 00:11:48,120 --> 00:11:49,920 Speaker 7: and that's bad news for Apple. 245 00:11:50,720 --> 00:11:52,760 Speaker 4: So if you're looking at right now a product that 246 00:11:52,840 --> 00:11:56,760 Speaker 4: isn't necessarily going to encourage a real refresh kind of cycle, 247 00:11:56,880 --> 00:11:58,719 Speaker 4: where is the bulk of the revenue going to come from. 248 00:11:58,800 --> 00:12:01,080 Speaker 4: Is it going to increasingly come from services or can 249 00:12:01,120 --> 00:12:03,760 Speaker 4: it continue to come from just the fact that at 250 00:12:03,760 --> 00:12:06,200 Speaker 4: some point this is going to break and even John 251 00:12:06,320 --> 00:12:09,080 Speaker 4: is going to have to upgrade, all right. 252 00:12:08,960 --> 00:12:13,880 Speaker 7: So there is some element of the slowed upgrade consumer. 253 00:12:14,280 --> 00:12:17,320 Speaker 7: But I think that this is why there was a 254 00:12:17,320 --> 00:12:21,520 Speaker 7: lot of enthusiasm for the Vision Pro. But we still 255 00:12:21,559 --> 00:12:23,440 Speaker 7: think that the Vision Pro, which looks to be on 256 00:12:23,480 --> 00:12:27,280 Speaker 7: track for launch next calendar year, they're not going to 257 00:12:27,280 --> 00:12:31,319 Speaker 7: achieve mass adoption with their augmented reality, virtual reality headset. 258 00:12:31,720 --> 00:12:34,040 Speaker 7: So if you don't have the next new thing and 259 00:12:34,120 --> 00:12:36,800 Speaker 7: you have kind of the iPhone aging on the vine, 260 00:12:37,480 --> 00:12:38,599 Speaker 7: it's a challenging. 261 00:12:38,240 --> 00:12:39,080 Speaker 6: Period for Apple. 262 00:12:39,480 --> 00:12:42,679 Speaker 7: It's somewhat remarkable how well the stock's done again that 263 00:12:42,679 --> 00:12:45,000 Speaker 7: they already tipped off to the hand that they're going 264 00:12:45,040 --> 00:12:46,800 Speaker 7: to report their fourth consecutive order of. 265 00:12:46,720 --> 00:12:48,920 Speaker 6: Declining revenue in the September quarter. 266 00:12:49,480 --> 00:12:54,080 Speaker 7: So new products and I guess still a foundation on 267 00:12:54,240 --> 00:12:58,280 Speaker 7: iPhone and buybacks might be the things that pulled up 268 00:12:58,280 --> 00:12:59,720 Speaker 7: the stock on a near term basis. 269 00:13:00,040 --> 00:13:01,840 Speaker 5: It's worth thirty times forward earnings. 270 00:13:02,679 --> 00:13:06,440 Speaker 6: No it's not, but yeah, so it is not. 271 00:13:06,840 --> 00:13:11,520 Speaker 7: The services element is what enabled them to get the 272 00:13:11,520 --> 00:13:16,240 Speaker 7: premium multiple versus where they were trading before services. It's 273 00:13:16,360 --> 00:13:19,679 Speaker 7: still a good story, but at some point, either the 274 00:13:19,720 --> 00:13:22,160 Speaker 7: iPhone's going to have to exceed all of our expectations 275 00:13:22,679 --> 00:13:24,080 Speaker 7: or the vision pro is going to have to do 276 00:13:24,200 --> 00:13:26,760 Speaker 7: much better than I think for the stock to continue 277 00:13:26,800 --> 00:13:28,640 Speaker 7: to go higher over the next twelve months. 278 00:13:28,679 --> 00:13:30,600 Speaker 5: And Tom, let's just finish on this line that Lisa 279 00:13:30,640 --> 00:13:33,400 Speaker 5: mentioned from China. I wonder what the response will be 280 00:13:33,440 --> 00:13:36,200 Speaker 5: from Apple to this, because it's not something you typically 281 00:13:36,200 --> 00:13:39,360 Speaker 5: hear this is from the Chinese Foreign Ministry spokeswoman. We 282 00:13:39,480 --> 00:13:42,920 Speaker 5: notice that there have been many media reports about security 283 00:13:42,960 --> 00:13:46,360 Speaker 5: incidents concerning Apple phones. Tom, what do you think they're 284 00:13:46,360 --> 00:13:46,880 Speaker 5: alluding to? 285 00:13:48,240 --> 00:13:50,800 Speaker 7: Yeah, so, I think they're alluding to the reports that 286 00:13:51,360 --> 00:13:55,319 Speaker 7: government workers in China are not able to use Apple devices. 287 00:13:56,240 --> 00:13:57,920 Speaker 7: I think it's interesting, I mean, trying to figure out 288 00:13:57,960 --> 00:14:01,760 Speaker 7: the appropriate chess piece for our ball in the increasing 289 00:14:01,800 --> 00:14:03,880 Speaker 7: tension between the US government and the Chinese government. 290 00:14:04,040 --> 00:14:06,880 Speaker 6: They're clearly not upon They're not the king, they're not 291 00:14:06,920 --> 00:14:07,319 Speaker 6: the queen. 292 00:14:07,559 --> 00:14:11,280 Speaker 7: Maybe they're a knight, but they have tremendous way in China, 293 00:14:11,679 --> 00:14:13,920 Speaker 7: I think so to their relationship with Fox Con. But 294 00:14:14,480 --> 00:14:16,040 Speaker 7: I think they're getting kind of cott in the middle 295 00:14:16,080 --> 00:14:19,280 Speaker 7: here and this increasing tension between the two countries. 296 00:14:19,080 --> 00:14:22,000 Speaker 5: Without a doubt to forth. I thank you, Sir of D. A. Davidson. 297 00:14:22,000 --> 00:14:25,280 Speaker 5: Following the release the Unfailing the Big Reveal if the 298 00:14:25,320 --> 00:14:26,640 Speaker 5: iPhone fifteen. 299 00:14:36,560 --> 00:14:39,800 Speaker 1: Regina Mayor is global head of Client's Markets and Petroleum 300 00:14:39,840 --> 00:14:43,600 Speaker 1: and KPMG with Military service to the Nation. Regina, thank 301 00:14:43,600 --> 00:14:47,320 Speaker 1: you so much for joining us today. Your research note 302 00:14:47,440 --> 00:14:51,680 Speaker 1: is demand, demand Demand. Are the Saudis aware of the 303 00:14:51,800 --> 00:14:55,920 Speaker 1: resiliency and demand the KPMGS. 304 00:14:55,200 --> 00:15:01,280 Speaker 8: Projects absolutely so part of the supply challenge. It's against 305 00:15:01,280 --> 00:15:05,120 Speaker 8: the backdrop of a stubbornly robust economy, but it is 306 00:15:05,120 --> 00:15:07,640 Speaker 8: also a big supply part of the equation. Right we 307 00:15:07,680 --> 00:15:10,680 Speaker 8: are anticipating supply drawdowns through the rest of the calendar 308 00:15:10,760 --> 00:15:14,560 Speaker 8: year Q three, Q four, and we're in probably the 309 00:15:14,600 --> 00:15:18,560 Speaker 8: tightest supply situation that we've been in ten years. Ten 310 00:15:18,640 --> 00:15:22,280 Speaker 8: month through highs that you've emphasized, but what I'm looking 311 00:15:22,360 --> 00:15:26,920 Speaker 8: at are some underlying indicators. US production is almost at 312 00:15:26,960 --> 00:15:30,040 Speaker 8: its record high twelve point eight four million barrels per 313 00:15:30,080 --> 00:15:32,600 Speaker 8: day against a record high thirteen million barrels per day, 314 00:15:32,920 --> 00:15:36,160 Speaker 8: with seventeen percent of the rigs off the market. That's 315 00:15:36,160 --> 00:15:39,640 Speaker 8: one hundred and twenty seven fewer rigs with the Saudi's 316 00:15:39,760 --> 00:15:42,720 Speaker 8: intentionally keeping barrels off the market. Right now, we're saying 317 00:15:42,720 --> 00:15:46,040 Speaker 8: there's roughly a three million barrel per day supply versus 318 00:15:46,040 --> 00:15:49,240 Speaker 8: demand gap because demand continues to go up, and we 319 00:15:49,280 --> 00:15:52,680 Speaker 8: think OPEC's purposely keeping about one point eight million barrels 320 00:15:52,720 --> 00:15:56,120 Speaker 8: per day off the market, and there's no global relief 321 00:15:56,160 --> 00:15:58,840 Speaker 8: valve in this environment. We can't rely on the spr 322 00:15:58,920 --> 00:16:01,520 Speaker 8: There's no other worse where we can. We can turn 323 00:16:01,560 --> 00:16:04,080 Speaker 8: on a tap and oil will flood back into the market. 324 00:16:04,160 --> 00:16:06,840 Speaker 4: Given the fact the production is so high in the 325 00:16:06,920 --> 00:16:11,440 Speaker 4: United States, is that an indication that, yes, inventories are 326 00:16:11,480 --> 00:16:13,720 Speaker 4: the titus as you said, going back ten years. But 327 00:16:13,800 --> 00:16:17,000 Speaker 4: this isn't as much about supply as it is ongoing 328 00:16:17,080 --> 00:16:20,360 Speaker 4: continued demand and that people are underestimating the strength on 329 00:16:20,400 --> 00:16:23,360 Speaker 4: the other side. That's also fueling some of these price increases. 330 00:16:24,280 --> 00:16:26,720 Speaker 8: Yeah, so we've been talking about peak demand. Potentially it 331 00:16:26,760 --> 00:16:29,080 Speaker 8: happened pre COVID. I think we definitely have put that 332 00:16:29,360 --> 00:16:31,720 Speaker 8: in the rear view mirror. Right now. The EIA is 333 00:16:31,760 --> 00:16:35,240 Speaker 8: saying average demand for twenty twenty three is going to 334 00:16:35,240 --> 00:16:37,760 Speaker 8: be over one hundred and one million barrels per day. 335 00:16:37,880 --> 00:16:40,840 Speaker 8: That's average. So last month we just came off one 336 00:16:40,840 --> 00:16:43,960 Speaker 8: of the hottest summers in a lot of years, and 337 00:16:44,000 --> 00:16:46,800 Speaker 8: we're anticipating that's one hundred and three million barrels per day. 338 00:16:46,880 --> 00:16:49,600 Speaker 8: That's the three million barrel per day gap, and then 339 00:16:49,640 --> 00:16:51,600 Speaker 8: the EI is projecting it goes up to one hundred 340 00:16:51,600 --> 00:16:54,120 Speaker 8: and two million barrels per day in twenty twenty four. 341 00:16:54,760 --> 00:16:57,360 Speaker 8: When is peak demand going to take place? Some are 342 00:16:57,360 --> 00:17:00,000 Speaker 8: predicting it's this decade. Some are predicting its next day. 343 00:17:00,480 --> 00:17:03,560 Speaker 8: Regardless of which decade, you anticipate that it's coming. We 344 00:17:03,760 --> 00:17:06,600 Speaker 8: know it's coming. So if you're a major oil company 345 00:17:06,680 --> 00:17:09,239 Speaker 8: or a major resource holder, you're trying to figure out 346 00:17:09,240 --> 00:17:12,600 Speaker 8: when's the last marginal dollar of additional investment that I'm 347 00:17:12,640 --> 00:17:15,800 Speaker 8: going to pit in to grow supply against the backdrop 348 00:17:15,840 --> 00:17:20,280 Speaker 8: of ultimately that supply is going to be in excessive demand. 349 00:17:20,760 --> 00:17:23,719 Speaker 4: Given that backdrop, if there is a recession or some 350 00:17:23,760 --> 00:17:26,680 Speaker 4: sort of downturn of softening in the economy, could that 351 00:17:26,800 --> 00:17:29,760 Speaker 4: offset the tightness in the oil market? In other words, 352 00:17:29,760 --> 00:17:32,960 Speaker 4: could oil prices come down sharply in a surprise even 353 00:17:33,000 --> 00:17:36,320 Speaker 4: with all of these technical backdrops, simply because you do 354 00:17:36,359 --> 00:17:37,680 Speaker 4: get a weakening of the consumer. 355 00:17:38,760 --> 00:17:39,440 Speaker 6: Absolutely. 356 00:17:39,560 --> 00:17:41,879 Speaker 8: I think if we start to see more signs that 357 00:17:41,920 --> 00:17:44,640 Speaker 8: the economy is slowing down, you will start to see 358 00:17:44,680 --> 00:17:48,080 Speaker 8: oil prices come back down. We are seeing the potential 359 00:17:48,080 --> 00:17:51,359 Speaker 8: for supply rebuild in twenty twenty four, So it's really 360 00:17:51,440 --> 00:17:53,480 Speaker 8: just this six month period. I know there are some 361 00:17:53,600 --> 00:17:56,879 Speaker 8: that'll say its triple digit for longer that's coming. I 362 00:17:56,880 --> 00:18:01,000 Speaker 8: think there are bare signs in the market right now. Rankly, 363 00:18:01,400 --> 00:18:03,240 Speaker 8: it's all upside very little downside. 364 00:18:03,240 --> 00:18:06,080 Speaker 1: Regina, Just for final question here, with great respect for 365 00:18:06,160 --> 00:18:10,679 Speaker 1: your bringing in international relations into the KPMG oil debate, 366 00:18:11,160 --> 00:18:16,160 Speaker 1: does the United States of America have an energy policy? 367 00:18:17,160 --> 00:18:21,199 Speaker 8: I think we have different aspects of energy policies. I 368 00:18:21,200 --> 00:18:23,160 Speaker 8: think some of the things that we've just recently seen 369 00:18:23,200 --> 00:18:26,239 Speaker 8: on anwar as more politics versus substance. It would have 370 00:18:26,240 --> 00:18:29,680 Speaker 8: taken billions of dollars in investment to get drilling production 371 00:18:29,800 --> 00:18:32,960 Speaker 8: and then moving that material to market. We would be 372 00:18:33,080 --> 00:18:36,399 Speaker 8: best served to focus on where are great sources of 373 00:18:36,520 --> 00:18:41,280 Speaker 8: resources Golf of Mexico, onshore and conventionals, other dry gas plays. 374 00:18:41,600 --> 00:18:44,520 Speaker 8: There are lots of different factors that slowed down the 375 00:18:44,520 --> 00:18:49,520 Speaker 8: ability for our industry to exploit those resources. I do 376 00:18:49,600 --> 00:18:53,119 Speaker 8: think there's room for a more coherent, more effective energy 377 00:18:53,119 --> 00:18:53,960 Speaker 8: policy overall. 378 00:18:54,040 --> 00:18:56,639 Speaker 5: The policies love a prices tak I think that's the 379 00:18:56,640 --> 00:19:00,399 Speaker 5: policy we want to crisis. That's kind of it dead on. 380 00:19:00,520 --> 00:19:03,240 Speaker 5: Regina's just quickly, when does the mond destruction start to 381 00:19:03,320 --> 00:19:06,000 Speaker 5: kick in? Aren't we already thinking about that in the nineties. 382 00:19:07,280 --> 00:19:09,840 Speaker 8: For sure? I mean, I think if gas prices go 383 00:19:09,960 --> 00:19:12,879 Speaker 8: substantially over four dollars, where right now we're at the 384 00:19:12,960 --> 00:19:15,680 Speaker 8: end of summer driving season, and US gas prices are 385 00:19:15,720 --> 00:19:18,360 Speaker 8: twelve cents per gallon on average higher than they were 386 00:19:18,520 --> 00:19:21,080 Speaker 8: this time last year. That's probably not enough to drive 387 00:19:21,200 --> 00:19:23,399 Speaker 8: demand destruction. But some of the things that you are 388 00:19:23,440 --> 00:19:27,040 Speaker 8: all talking about relative to airline airfares, the pinch that 389 00:19:27,040 --> 00:19:30,320 Speaker 8: people are starting to feel, relative to how confident they 390 00:19:30,320 --> 00:19:33,400 Speaker 8: feel about the future, how confident they feel about their savings, pushs. 391 00:19:33,920 --> 00:19:36,720 Speaker 8: I do see some of those pressures that could dampen 392 00:19:36,800 --> 00:19:38,200 Speaker 8: demand as we move into the fall. 393 00:19:38,240 --> 00:19:41,560 Speaker 5: In the winner, Regina met of KPMG on the old market, Regina, 394 00:19:41,600 --> 00:19:42,040 Speaker 5: thank you. 395 00:19:46,119 --> 00:19:50,240 Speaker 1: Joining us right now. The gentleman from Arkansas, French kill 396 00:19:50,560 --> 00:19:55,000 Speaker 1: Republican French. I got like fourteen ways to go, ending 397 00:19:55,000 --> 00:19:59,960 Speaker 1: with Arkansas football, but forget about that. Kevin McCartney. Kevin McCarthy, 398 00:20:00,160 --> 00:20:03,480 Speaker 1: he has a football he's playing right now. I read 399 00:20:03,560 --> 00:20:10,080 Speaker 1: Cass Sunstein's magisterial book Impeachment cover to cover. It seems 400 00:20:10,080 --> 00:20:14,840 Speaker 1: like we're almost downgrading. Impeachment is a concept of our civics. 401 00:20:15,040 --> 00:20:19,720 Speaker 1: Lesson have we ruined the phrase impeachment? Have we bestardized it? 402 00:20:22,160 --> 00:20:22,320 Speaker 8: Well? 403 00:20:22,320 --> 00:20:24,120 Speaker 9: You bring up such a good point, Tom, And that's 404 00:20:24,119 --> 00:20:28,520 Speaker 9: how I felt during the Nancy Pelosi impeachment for President 405 00:20:28,520 --> 00:20:31,080 Speaker 9: Trump one and two. I felt like it was rushed. 406 00:20:31,119 --> 00:20:33,520 Speaker 9: I don't think people collected the evidence. I don't think 407 00:20:33,560 --> 00:20:36,879 Speaker 9: they even looked for the facts during those years. And 408 00:20:36,880 --> 00:20:40,119 Speaker 9: that's why I was pleased to see McCarthy this year. 409 00:20:40,560 --> 00:20:44,240 Speaker 9: Really encouraged Jim Jordan the Judiciary Committee, and Jamie Comer, 410 00:20:44,280 --> 00:20:48,320 Speaker 9: who chairs the Oversight Committee, and the same for Ways 411 00:20:48,320 --> 00:20:53,440 Speaker 9: and Means with Jason Smith, do your homework, don't rush this, 412 00:20:53,640 --> 00:20:57,320 Speaker 9: And so for the last few months they've asked simply 413 00:20:57,400 --> 00:21:00,920 Speaker 9: basic questions about Joe Biden says he didn't know anything 414 00:21:00,960 --> 00:21:04,879 Speaker 9: about Hunter Biden's business dealing, He wasn't involved, he didn't 415 00:21:04,920 --> 00:21:08,440 Speaker 9: have any business relationship. And what they've uncovered is that 416 00:21:08,480 --> 00:21:13,080 Speaker 9: those assertions from President Biden weren't true. And so that's 417 00:21:13,119 --> 00:21:16,800 Speaker 9: what's led I think Speaker McCarthy with Jordan and Comber 418 00:21:16,880 --> 00:21:19,520 Speaker 9: to take the next step to give them an extra 419 00:21:19,640 --> 00:21:22,760 Speaker 9: clout and asking the banking and legal records they need 420 00:21:22,800 --> 00:21:24,720 Speaker 9: to answer those questions definitively. 421 00:21:24,920 --> 00:21:25,400 Speaker 8: Do you have. 422 00:21:25,480 --> 00:21:29,600 Speaker 1: Any sense as an adult in the room, Congressman Banker 423 00:21:29,640 --> 00:21:32,720 Speaker 1: from Arkansas, do you have any sense that there are 424 00:21:32,960 --> 00:21:36,280 Speaker 1: high crimes and misdemeanors involved. 425 00:21:38,400 --> 00:21:43,879 Speaker 9: Well, one of the constitutional lists of impeachment items in 426 00:21:43,920 --> 00:21:48,280 Speaker 9: the Constitution of courses bribery and actually in the whistleblower 427 00:21:48,359 --> 00:21:51,520 Speaker 9: testimony from the IRS agents and other people that have 428 00:21:51,600 --> 00:21:56,200 Speaker 9: come forward, there is that suggestion that potentially there was 429 00:21:56,240 --> 00:21:59,520 Speaker 9: a bribe involved here or a cover up of illegal 430 00:21:59,560 --> 00:22:02,640 Speaker 9: activity when Vice President Biden was in office and Hunter 431 00:22:02,720 --> 00:22:06,439 Speaker 9: Biden was taking action here, and then it leads to 432 00:22:06,480 --> 00:22:10,160 Speaker 9: the question, well, what's happened since President Biden's been president. 433 00:22:10,160 --> 00:22:12,280 Speaker 9: The only way to get to those facts is simply 434 00:22:12,359 --> 00:22:15,919 Speaker 9: have both sides present those assertions and look for the 435 00:22:15,960 --> 00:22:18,119 Speaker 9: evidence and follow it where it goes. 436 00:22:19,480 --> 00:22:21,600 Speaker 1: I look, French I on Liston wants to jump in here. 437 00:22:21,640 --> 00:22:25,520 Speaker 1: These are really important questions. Where is this going to 438 00:22:25,600 --> 00:22:29,480 Speaker 1: be into the Republican primary season? I mean, I understand 439 00:22:29,560 --> 00:22:34,399 Speaker 1: there's theater here. There are partitions of GOP. You're in 440 00:22:34,440 --> 00:22:38,800 Speaker 1: a certain partition. Where does your type of Republican want 441 00:22:38,840 --> 00:22:40,240 Speaker 1: this to be in February? 442 00:22:43,080 --> 00:22:46,520 Speaker 9: Well, I think for all Republicans, all Democrats, and all 443 00:22:46,520 --> 00:22:49,119 Speaker 9: Independents to get to the bottom of this quickly and 444 00:22:49,200 --> 00:22:52,600 Speaker 9: promptly is important and see where the facts lay out. 445 00:22:52,720 --> 00:22:56,920 Speaker 9: Perhaps President Biden and Hunter Biden, their attorneys, their lawyers 446 00:22:56,960 --> 00:23:03,440 Speaker 9: can present evidence that those sus suspicious activity reports, the 447 00:23:03,760 --> 00:23:07,159 Speaker 9: LLC formations, the twenty one million dollars in payments to 448 00:23:07,240 --> 00:23:10,920 Speaker 9: those LLCs, et cetera, all are completely logical and don't 449 00:23:10,920 --> 00:23:14,640 Speaker 9: have anything to do with President Biden today or as 450 00:23:14,760 --> 00:23:17,320 Speaker 9: vice president, and that'll clear up the whole matter. So 451 00:23:17,359 --> 00:23:19,399 Speaker 9: I hope it's over just as soon as possible. But 452 00:23:19,600 --> 00:23:21,920 Speaker 9: we want to make sure that the work gets done 453 00:23:21,960 --> 00:23:24,280 Speaker 9: in an effective way, and that's what I really do. 454 00:23:24,400 --> 00:23:28,679 Speaker 9: Contrast it with how the Trump investigations were carried on 455 00:23:28,840 --> 00:23:30,200 Speaker 9: by the House Democrats. 456 00:23:30,240 --> 00:23:33,960 Speaker 4: Congressman, and you're Bentonville, there probably is less concern about 457 00:23:33,960 --> 00:23:37,280 Speaker 4: the impeachment proceedings and much more concern about the UAW 458 00:23:37,560 --> 00:23:43,520 Speaker 4: strike discussions. What this means going forward for worker earnings, 459 00:23:43,680 --> 00:23:46,480 Speaker 4: what this means for negotiating power. What do you hope 460 00:23:46,560 --> 00:23:48,640 Speaker 4: happens tomorrow at eleven fifty nine. 461 00:23:51,840 --> 00:23:57,880 Speaker 9: Well, again, this administration has been very pro union, and 462 00:23:58,040 --> 00:24:00,680 Speaker 9: they have taken the side of the union in every 463 00:24:00,800 --> 00:24:05,159 Speaker 9: legislative battle. So I think that question is better left 464 00:24:05,240 --> 00:24:09,080 Speaker 9: for the administration. Obviously, the United States doesn't need to 465 00:24:09,119 --> 00:24:13,199 Speaker 9: strike right now, but this administration has had such a 466 00:24:13,240 --> 00:24:16,520 Speaker 9: pro union policy in every way, stretch and form. I'm 467 00:24:16,560 --> 00:24:20,560 Speaker 9: sure the unions are feeling quite empowered to take action. 468 00:24:20,800 --> 00:24:23,359 Speaker 9: And that's concerning to me because I think the economies 469 00:24:23,400 --> 00:24:25,200 Speaker 9: that are a very fragile moment. 470 00:24:25,480 --> 00:24:27,920 Speaker 4: That said, I was looking at a number of reports 471 00:24:28,040 --> 00:24:30,760 Speaker 4: calculating what the earnings of some of these union workers 472 00:24:30,800 --> 00:24:33,800 Speaker 4: were and strappling out to a forty hour work week, 473 00:24:33,880 --> 00:24:36,959 Speaker 4: it's about thirty five thousand to sixty seven thousand dollars 474 00:24:37,119 --> 00:24:40,240 Speaker 4: a year. This at a time where inflation is continuing 475 00:24:40,240 --> 00:24:42,359 Speaker 4: to rise, and when we saw the biggest drop in 476 00:24:42,440 --> 00:24:46,720 Speaker 4: household real income last year going back a decade, What 477 00:24:46,760 --> 00:24:50,639 Speaker 4: do you propose to actually increase wages at a time 478 00:24:50,880 --> 00:24:54,480 Speaker 4: where on a real basis households are basically being taxed 479 00:24:54,480 --> 00:24:55,040 Speaker 4: by inflation. 480 00:24:57,440 --> 00:24:59,919 Speaker 9: Well, first of all, stop inflation. And we could have 481 00:25:00,080 --> 00:25:02,080 Speaker 9: on that if we'd taken our foot off the gas 482 00:25:02,080 --> 00:25:04,159 Speaker 9: at the federal reserve in the fourth quarter of twenty 483 00:25:04,200 --> 00:25:07,959 Speaker 9: twenty instead of doubling down and buying another trillion dollars 484 00:25:07,960 --> 00:25:10,359 Speaker 9: of bonds and keeping interest rate zero, and if we 485 00:25:10,400 --> 00:25:14,080 Speaker 9: had an unleashed and avalanche of spending to where we're 486 00:25:14,080 --> 00:25:17,359 Speaker 9: now spending on an annualized basis over six trillion dollars 487 00:25:17,400 --> 00:25:19,879 Speaker 9: a year when we were spending an f y nineteen 488 00:25:19,960 --> 00:25:23,480 Speaker 9: four point five trillion, So inflation, beating inflation is the 489 00:25:23,560 --> 00:25:26,000 Speaker 9: number one way to help okay working families. 490 00:25:26,760 --> 00:25:29,440 Speaker 4: Well, but Congressman, I guess that, and I apologize for interrupting. 491 00:25:29,480 --> 00:25:31,800 Speaker 4: I guess that I'm wondering what the cohesive plan is 492 00:25:31,880 --> 00:25:34,359 Speaker 4: at this point, other than saying, you know, the FED, 493 00:25:34,520 --> 00:25:37,680 Speaker 4: the Fed, the Fed, what is the cohesive plan? Yes, 494 00:25:37,760 --> 00:25:40,000 Speaker 4: spending cuts, although it's been on both sides of the 495 00:25:40,000 --> 00:25:42,600 Speaker 4: aisle that you've seen spending expansion. What is the plan 496 00:25:42,640 --> 00:25:47,720 Speaker 4: in the near term to bring down inflation? From your side, well. 497 00:25:47,640 --> 00:25:50,400 Speaker 9: I think they are linked and you can't separate them. 498 00:25:50,440 --> 00:25:53,560 Speaker 9: I mean, the Fed's job's been made much harder, much 499 00:25:53,560 --> 00:25:58,520 Speaker 9: harder because of the incredible fiscal stimulus and regulatory burdens 500 00:25:58,520 --> 00:26:00,960 Speaker 9: put on by the two years of the Biden administration. 501 00:26:01,119 --> 00:26:03,879 Speaker 9: And that's why i'm the debt sealing deal. We propose 502 00:26:04,000 --> 00:26:08,119 Speaker 9: get more workers available for the workforce by encouraging work 503 00:26:08,240 --> 00:26:12,280 Speaker 9: in the assistance programs, cut down regulatory burden, make it 504 00:26:12,320 --> 00:26:15,879 Speaker 9: easier to get a project permitted, and cut spending and 505 00:26:15,920 --> 00:26:18,600 Speaker 9: try to get spending back to pre pandemic levels and 506 00:26:18,640 --> 00:26:22,159 Speaker 9: stop having these huge budget deficits that Joe Biden is 507 00:26:22,200 --> 00:26:23,080 Speaker 9: forecast cover. 508 00:26:23,080 --> 00:26:26,359 Speaker 1: Has been hill a very serious question. We are so 509 00:26:26,600 --> 00:26:30,240 Speaker 1: focused on three zip codes here, the doings of Financial 510 00:26:30,280 --> 00:26:34,239 Speaker 1: America and the global reach of Bloomberg. In all, what 511 00:26:34,320 --> 00:26:38,639 Speaker 1: are you hearing from small business people in Arkansas? The 512 00:26:38,720 --> 00:26:43,840 Speaker 1: unemployment rate is low, life is great, Arkansas is stealing 513 00:26:43,960 --> 00:26:47,480 Speaker 1: for a game against LSU in two in two weeks. 514 00:26:47,560 --> 00:26:50,359 Speaker 1: I get it, But what are you actually hearing from 515 00:26:50,400 --> 00:26:52,440 Speaker 1: small business in your state? 516 00:26:54,840 --> 00:26:56,960 Speaker 9: Well, I spent a lot of time in August talking 517 00:26:56,960 --> 00:26:59,720 Speaker 9: to businesses all over the eight counties of Central Arkansas, 518 00:26:59,720 --> 00:27:03,400 Speaker 9: and I have to tell you that labor is still 519 00:27:03,440 --> 00:27:07,320 Speaker 9: an issue for both white collar and manufacturing where they're 520 00:27:07,359 --> 00:27:10,119 Speaker 9: trying to find the right people for the right seats 521 00:27:10,119 --> 00:27:13,440 Speaker 9: with the right training. And so Governor Sanders has really 522 00:27:13,440 --> 00:27:16,440 Speaker 9: put an emphasis on workforce development. That's something I've worked 523 00:27:16,480 --> 00:27:19,159 Speaker 9: on for the past fifteen years as a bank president, 524 00:27:19,200 --> 00:27:22,520 Speaker 9: as a chamber chairman, and now is a congressman. And 525 00:27:22,600 --> 00:27:27,240 Speaker 9: so the technical skill attainment and then just the bodies 526 00:27:27,280 --> 00:27:29,440 Speaker 9: tom it continues to be an issue. We have low 527 00:27:29,520 --> 00:27:33,199 Speaker 9: unemployment in Arkansas, and despite inflation and despite all the 528 00:27:33,280 --> 00:27:36,720 Speaker 9: economic challenges. That's what I hear about, both with community 529 00:27:36,760 --> 00:27:39,680 Speaker 9: bankers and with individual business owners when I'm at home. 530 00:27:39,720 --> 00:27:43,919 Speaker 5: Raise it backs Tiger Stadium, tkod pest you are you 531 00:27:43,960 --> 00:27:44,399 Speaker 5: proud of me? 532 00:27:44,480 --> 00:27:44,840 Speaker 2: French? 533 00:27:45,080 --> 00:27:46,320 Speaker 5: I know all this now, Yeah. 534 00:27:46,200 --> 00:27:50,439 Speaker 9: That's describe this is I see engagement. We're taking a 535 00:27:50,480 --> 00:27:52,920 Speaker 9: baby step forward and the next step is to visit 536 00:27:53,000 --> 00:27:54,520 Speaker 9: Razorback Stadium in Faytteville. 537 00:27:54,640 --> 00:27:55,159 Speaker 6: That's up to you. 538 00:27:55,160 --> 00:27:57,720 Speaker 5: We're going to make it happen. Congressman, thank you, Congressman French. 539 00:27:57,720 --> 00:28:00,760 Speaker 5: Shill their plates an impeachment inqui in the cost of 540 00:28:00,800 --> 00:28:02,000 Speaker 5: living in America. 541 00:28:12,160 --> 00:28:15,280 Speaker 1: Joining us now, and we're gonna get to Apple in 542 00:28:15,359 --> 00:28:18,320 Speaker 1: the markets in a moment? Is Douglas cast of Sea Breeze, 543 00:28:18,840 --> 00:28:22,680 Speaker 1: who understands the bat boy for the Los Angeles Dodgers 544 00:28:22,800 --> 00:28:26,320 Speaker 1: makes more than that. I have never seen a seasoned 545 00:28:26,400 --> 00:28:32,119 Speaker 1: doug where payroll matters less. In baseball, the Yankees and 546 00:28:32,160 --> 00:28:35,960 Speaker 1: the Red Sox. The seats one section away from me 547 00:28:36,080 --> 00:28:40,400 Speaker 1: at Fenway are forty one dollars tonight for the toilet 548 00:28:40,520 --> 00:28:44,240 Speaker 1: Bowl in the American League East. Have you ever seen 549 00:28:45,080 --> 00:28:48,400 Speaker 1: money spent to ill effect like we have this year? 550 00:28:49,200 --> 00:28:50,000 Speaker 10: Never in my life. 551 00:28:51,520 --> 00:28:52,600 Speaker 1: It's just as simple as that. 552 00:28:52,680 --> 00:28:54,320 Speaker 2: I think I'll move on, and the Mets as well. 553 00:28:54,520 --> 00:28:59,000 Speaker 1: The Padres are a disgrace what they've done. Let's move on, 554 00:28:59,560 --> 00:29:03,480 Speaker 1: Doug care I got to talk about the Apple sare 555 00:29:03,720 --> 00:29:08,120 Speaker 1: yesterday and the idea, and you, as the Pinata say, 556 00:29:08,320 --> 00:29:12,640 Speaker 1: I'm short Apple, and I'm convicted short. But here's the 557 00:29:12,760 --> 00:29:18,760 Speaker 1: pro question. How do you short an iconic company like Apple? 558 00:29:18,880 --> 00:29:20,160 Speaker 1: How do you actually do it? 559 00:29:21,840 --> 00:29:24,240 Speaker 10: I borrow the stock, I put in an order. 560 00:29:25,760 --> 00:29:27,480 Speaker 1: Do you load the boat on it or do you 561 00:29:28,480 --> 00:29:30,080 Speaker 1: you dip into it? How do you do it? 562 00:29:32,120 --> 00:29:35,560 Speaker 10: Frankly, the key to our success at Seabreeze this year, 563 00:29:35,600 --> 00:29:39,160 Speaker 10: in most years in our showbook is that we tend 564 00:29:39,240 --> 00:29:42,680 Speaker 10: not to short stocks like Apple. We tend to short 565 00:29:42,840 --> 00:29:46,920 Speaker 10: no drama stocks. That's what I call them. Stocks like Starbucks, Nike, 566 00:29:47,480 --> 00:29:52,520 Speaker 10: fmc Winnebago, uncomplicated companies that sell widgets where we see 567 00:29:52,520 --> 00:29:56,240 Speaker 10: the future more negative, leland the consensus. So Apple is 568 00:29:56,280 --> 00:29:59,840 Speaker 10: an outlier. But Apple, for you know my position on 569 00:29:59,840 --> 00:30:03,800 Speaker 10: the stock, it's one of my largest shorts. It's been 570 00:30:03,880 --> 00:30:09,680 Speaker 10: a capital allocation story, it's been a buyback story. And 571 00:30:10,000 --> 00:30:13,880 Speaker 10: as I have noted in the last decade, cash a 572 00:30:14,120 --> 00:30:17,560 Speaker 10: percent as a percent of market cap has declined from 573 00:30:17,600 --> 00:30:20,440 Speaker 10: thirty four percent to less than two percent. So the 574 00:30:20,560 --> 00:30:23,200 Speaker 10: margin will impact because of higher interest rates and a 575 00:30:23,240 --> 00:30:27,440 Speaker 10: higher stock price. On the buyback in terms of recreating 576 00:30:27,600 --> 00:30:29,720 Speaker 10: EPs is greatly diminished. 577 00:30:30,640 --> 00:30:32,400 Speaker 11: Hey, Doug, So, I mean people a gonna be rushing 578 00:30:32,440 --> 00:30:35,280 Speaker 11: out buying the iPhone fifteen. But it kind of raises 579 00:30:35,320 --> 00:30:37,880 Speaker 11: a question, how is the consumer out there? I guess 580 00:30:37,880 --> 00:30:40,840 Speaker 11: the consumer has a job, but other than that, how 581 00:30:40,960 --> 00:30:43,200 Speaker 11: is the consumer doing well? 582 00:30:43,280 --> 00:30:46,960 Speaker 10: There's been a bunch of distortions that have held up 583 00:30:47,320 --> 00:30:53,000 Speaker 10: the consumer, but that is changing, and I see the 584 00:30:53,080 --> 00:30:57,640 Speaker 10: consumer who's widely considered to be resilient. I know Lisa 585 00:30:57,680 --> 00:31:00,480 Speaker 10: in the last segment was frustrated by the strength retail 586 00:31:00,600 --> 00:31:03,240 Speaker 10: For example, they will not be in the time ahead. 587 00:31:03,320 --> 00:31:06,320 Speaker 10: And I'll give you some data points. Just look at 588 00:31:06,360 --> 00:31:11,080 Speaker 10: Dollar General's poor results and guidance they delivered last week. Secondly, 589 00:31:11,680 --> 00:31:14,880 Speaker 10: on Friday, Restoration Hardware, which is a high end retailer, 590 00:31:15,280 --> 00:31:18,200 Speaker 10: announced that July sales were down nineteen percent year of 591 00:31:18,240 --> 00:31:22,240 Speaker 10: a year and things aren't getting better. Thirdly, auto delinquency 592 00:31:22,360 --> 00:31:26,000 Speaker 10: rates came out for the second quarter on Tuesday yesterday, 593 00:31:26,400 --> 00:31:28,520 Speaker 10: they were at seven point three percent, up from six 594 00:31:28,600 --> 00:31:31,920 Speaker 10: point nine percent, and Morning Stars predicting ten percent for 595 00:31:32,000 --> 00:31:35,080 Speaker 10: the next year. In terms of your two vet bills, 596 00:31:35,560 --> 00:31:40,120 Speaker 10: Tom and Ali and Daisy my two doctions. The three 597 00:31:40,200 --> 00:31:44,080 Speaker 10: leading pet companies, Fresh Pet, Petco in Alanco reported in 598 00:31:44,160 --> 00:31:49,200 Speaker 10: their quarterly releases that consumers are reducing their discretionary expenditures 599 00:31:49,280 --> 00:31:54,400 Speaker 10: for their bets, less bones and less treats. Let's choose fifthly, 600 00:31:54,600 --> 00:31:56,920 Speaker 10: excess savings, as you have noted and also in the 601 00:31:57,000 --> 00:32:02,800 Speaker 10: last segment, has been taken down. Consumer debt is rising markedly. Seventh, 602 00:32:02,880 --> 00:32:06,240 Speaker 10: we saw American airlines repull weaker traffic this morning. Same 603 00:32:06,320 --> 00:32:09,800 Speaker 10: for spirit. The rise and gasoline prices has begun to 604 00:32:09,920 --> 00:32:13,959 Speaker 10: be felt. Remember, inflation on a two year stack basis 605 00:32:14,640 --> 00:32:18,200 Speaker 10: is dramatic in terms of increase. And finally, three months 606 00:32:18,240 --> 00:32:20,560 Speaker 10: ago you couldn't find a Ford Bronco to buy. Now 607 00:32:20,640 --> 00:32:21,680 Speaker 10: it's being discounted. 608 00:32:22,200 --> 00:32:23,040 Speaker 8: Oh I didn't know that. 609 00:32:23,160 --> 00:32:27,160 Speaker 11: Okay, So all that in the background there we've got, 610 00:32:27,440 --> 00:32:30,040 Speaker 11: let's call it just mixed signals on the consumer. Are 611 00:32:30,120 --> 00:32:31,760 Speaker 11: you buying stocks or selling stocks today? 612 00:32:31,800 --> 00:32:36,840 Speaker 10: Don The question to me is not whether to be short, 613 00:32:36,920 --> 00:32:40,800 Speaker 10: but how short? I should be quite frankly bull markets 614 00:32:41,600 --> 00:32:46,800 Speaker 10: like John McLean and the movie Die Hard. But my 615 00:32:46,920 --> 00:32:49,320 Speaker 10: warning to your listeners, and that wouldn't be an interview 616 00:32:49,440 --> 00:32:52,880 Speaker 10: with you and Tom without a sports metaphor, is that 617 00:32:53,120 --> 00:32:57,360 Speaker 10: risk happens fast, much like the optimism associated with Aaron 618 00:32:57,440 --> 00:33:00,400 Speaker 10: Rodgers joining the New York Yeah, thank you, Bru. The 619 00:33:00,800 --> 00:33:05,040 Speaker 10: passage in Ernest Hemingwheny's novel The Sun Also Rises, in 620 00:33:05,120 --> 00:33:08,320 Speaker 10: which I think the character's name is Mike. He's asked 621 00:33:08,440 --> 00:33:11,560 Speaker 10: how he went bankrupt, and he answers two ways gradually, 622 00:33:11,640 --> 00:33:16,280 Speaker 10: then suddenly suddenly. The same applies to the inflection points 623 00:33:16,280 --> 00:33:19,360 Speaker 10: in the market and the global economy and the corporate profits, 624 00:33:19,880 --> 00:33:24,640 Speaker 10: especially when the distortions are so pervasive. You know, it 625 00:33:24,800 --> 00:33:27,880 Speaker 10: was Friedman who said in nineteen fifty nine in a 626 00:33:28,200 --> 00:33:31,920 Speaker 10: joint session of Congress that monetary policies operate with a 627 00:33:32,000 --> 00:33:34,400 Speaker 10: long lag, and with a lag that varies widely from 628 00:33:34,440 --> 00:33:38,080 Speaker 10: time to time. So because of a number of the distortions, 629 00:33:38,680 --> 00:33:42,360 Speaker 10: investors have grown complacent, and that lag between tightening and 630 00:33:42,440 --> 00:33:45,080 Speaker 10: the downturn has become longer than usual. But we're moving 631 00:33:45,160 --> 00:33:48,960 Speaker 10: ever closer, as I mentioned in my Consumer Observations, to 632 00:33:49,080 --> 00:33:51,640 Speaker 10: seeing the impact of tightening policies. 633 00:33:51,680 --> 00:33:55,640 Speaker 1: Well, I opened the Laguard interview in Jackson Hole. Would 634 00:33:55,720 --> 00:34:01,000 Speaker 1: that quote from Hemingway because she used it and April 635 00:34:01,640 --> 00:34:05,600 Speaker 1: and this is really really important the suddenly, which is 636 00:34:05,760 --> 00:34:09,920 Speaker 1: the understanding of experience and gray hair right exactly. 637 00:34:09,920 --> 00:34:12,720 Speaker 11: Well, I've got plenty of that, Doug. If you're short, 638 00:34:13,000 --> 00:34:15,839 Speaker 11: is this a short term trade or is this something 639 00:34:15,840 --> 00:34:17,160 Speaker 11: you're going to play out over time. 640 00:34:17,960 --> 00:34:22,600 Speaker 10: I think we have real problems with regard to the 641 00:34:22,719 --> 00:34:29,960 Speaker 10: distortions of the last let's say, the COVID post COVID period. 642 00:34:31,880 --> 00:34:35,440 Speaker 10: Nietzsche wrote that reality is captured in the categorical nets 643 00:34:35,480 --> 00:34:39,160 Speaker 10: of language only at the expense of fatal distortion. And 644 00:34:39,640 --> 00:34:42,960 Speaker 10: I think that the outgrowth of years of excessive monetary 645 00:34:43,120 --> 00:34:49,080 Speaker 10: largess and zero interest rate policy, when followed by the 646 00:34:49,200 --> 00:34:52,840 Speaker 10: need to raise rates so quickly and sizably, combined with 647 00:34:52,960 --> 00:34:57,239 Speaker 10: some evolving and some revolutionary market structure changes, have led 648 00:34:57,280 --> 00:35:00,759 Speaker 10: to worrisome distortions in the economy in our market. I 649 00:35:00,880 --> 00:35:04,120 Speaker 10: wrote a lengthy piece on TheStreet dot com about distortions 650 00:35:04,239 --> 00:35:09,040 Speaker 10: yesterday and Rosie Dave Rosenberg came back with an email 651 00:35:09,120 --> 00:35:12,120 Speaker 10: to me saying that he agreed and that investors are 652 00:35:12,200 --> 00:35:14,760 Speaker 10: not cognizant of the tail risks that have been delivered 653 00:35:14,800 --> 00:35:19,480 Speaker 10: by the distortions. And just to summarize them, some of 654 00:35:19,520 --> 00:35:25,239 Speaker 10: the economic distortions have been increased banking industry vulnerability from 655 00:35:25,280 --> 00:35:30,000 Speaker 10: the standpoint of both profits and capital made it possible 656 00:35:30,040 --> 00:35:35,480 Speaker 10: for investors and lawmakers to ignore bulging deficits and over 657 00:35:35,560 --> 00:35:39,720 Speaker 10: thirty trillion dollar national debt load, it's produced a threatening 658 00:35:39,800 --> 00:35:42,719 Speaker 10: public and private sector loan reset cliff, which was also 659 00:35:42,840 --> 00:35:46,240 Speaker 10: discussed in the last segment. As of cost, the capital 660 00:35:46,280 --> 00:35:49,800 Speaker 10: has abruptly risen. Has led to fiscal and monetary policy 661 00:35:50,280 --> 00:35:54,640 Speaker 10: that has artificially goose consumer savings and pulled forward consumer spending. 662 00:35:55,120 --> 00:35:58,400 Speaker 10: And it's disrupted the labor market. And finally, it's temporarily 663 00:35:58,520 --> 00:36:03,360 Speaker 10: frozen the for sale existing home market, which has artificially 664 00:36:03,440 --> 00:36:06,560 Speaker 10: inflated real estate prices. And you know what the structural 665 00:36:06,800 --> 00:36:11,719 Speaker 10: concerns I have are the proliferation of zero days to 666 00:36:11,880 --> 00:36:15,000 Speaker 10: expiration options. I mean, someone told you five years ago 667 00:36:15,080 --> 00:36:18,200 Speaker 10: that sixty percent of the daily options traded would have 668 00:36:18,280 --> 00:36:20,440 Speaker 10: a maturity of twenty four hours unless you would have 669 00:36:20,480 --> 00:36:22,960 Speaker 10: been laughed off out of the room. And then, of 670 00:36:23,040 --> 00:36:26,120 Speaker 10: course we have quand strategies which distort and exaggerate the 671 00:36:26,200 --> 00:36:29,640 Speaker 10: markets move. I think basically zero interest rates have lowered 672 00:36:29,640 --> 00:36:31,760 Speaker 10: the intelligence of both borrows and lenders. 673 00:36:32,040 --> 00:36:34,200 Speaker 1: A lot of people would agree with that, particularly again 674 00:36:34,480 --> 00:36:37,680 Speaker 1: with Gray here Douglas cast. Thank you so much. Subscribe 675 00:36:37,719 --> 00:36:41,520 Speaker 1: to the Bloomberg Surveillance podcast on Apple, Spotify, and anywhere 676 00:36:41,560 --> 00:36:45,920 Speaker 1: else you get your podcasts. Listen live every weekday starting 677 00:36:45,960 --> 00:36:50,080 Speaker 1: at seven am Eastern on Bloomberg dot com, the iHeartRadio 678 00:36:50,200 --> 00:36:53,880 Speaker 1: app tune In, and the Bloomberg Business app. You can 679 00:36:54,080 --> 00:36:57,840 Speaker 1: watch us live on Bloomberg Television and always on the 680 00:36:57,880 --> 00:37:01,960 Speaker 1: Bloomberg Terminal. Thanks for listening. I'm Tom Kane, and this 681 00:37:02,800 --> 00:37:14,239 Speaker 1: is Blumber Hm.