1
00:00:05,120 --> 00:00:09,200
Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along

2
00:00:09,240 --> 00:00:13,080
Speaker 1: with Jonathan Ferrell and Lisa Brownwitz Jay Ley. We bring

3
00:00:13,119 --> 00:00:17,159
Speaker 1: you insight from the best and economics, finance, investment, and

4
00:00:17,280 --> 00:00:23,280
Speaker 1: international relations. Find Bloomberg Surveillance on Apple podcast, SoundCloud, Bloomberg

5
00:00:23,360 --> 00:00:29,280
Speaker 1: dot Com, and of course on the Bloomberg Terminal. I

6
00:00:29,280 --> 00:00:31,520
Speaker 1: want to bring in Mouf and boffinap Bombastead of FFECS

7
00:00:31,560 --> 00:00:33,319
Speaker 1: and E. M. Mac cris stonogy MAV and you code

8
00:00:33,360 --> 00:00:35,360
Speaker 1: in the dollar the base. It's still the base, but

9
00:00:35,440 --> 00:00:39,680
Speaker 1: it can't get much stronger. White Well, it's already relatively

10
00:00:39,720 --> 00:00:41,959
Speaker 1: overvalued if they look at it on a long term

11
00:00:42,080 --> 00:00:47,000
Speaker 1: historical basis um. But uh, you know, we do expect

12
00:00:47,040 --> 00:00:49,240
Speaker 1: it to continue to trade at these high levels. Not

13
00:00:49,440 --> 00:00:52,920
Speaker 1: actually quite unusual. You look back historically when the dollar

14
00:00:52,960 --> 00:00:55,000
Speaker 1: has been to its peaks, it's gone to these you know,

15
00:00:55,560 --> 00:00:59,200
Speaker 1: peaks in the eighty five, in in uh two thousand two,

16
00:00:59,440 --> 00:01:01,520
Speaker 1: and then it comes involved quite hard. That isn't what

17
00:01:01,640 --> 00:01:03,880
Speaker 1: we're seeing this time. And part of that is because

18
00:01:04,040 --> 00:01:07,120
Speaker 1: of exactly what you've been talking about here, that where

19
00:01:07,160 --> 00:01:09,640
Speaker 1: are you going to go to access growth in the world.

20
00:01:09,760 --> 00:01:11,920
Speaker 1: It's really about the US, but it's also the place

21
00:01:11,959 --> 00:01:13,880
Speaker 1: that you go to access safety, so you get the

22
00:01:13,920 --> 00:01:16,280
Speaker 1: best of both worlds. So people are going to maintain

23
00:01:16,920 --> 00:01:20,640
Speaker 1: overallocations US assets for the foreseeable future. Marvin, when do

24
00:01:20,880 --> 00:01:25,480
Speaker 1: deficits start to matter again? Well, I think we're getting

25
00:01:25,520 --> 00:01:27,319
Speaker 1: to the point where they do matter, and I think

26
00:01:27,360 --> 00:01:30,280
Speaker 1: it's more a question of the debt, not so much, um,

27
00:01:31,600 --> 00:01:35,200
Speaker 1: the deficits. Let's remember that deficits are taking place pretty

28
00:01:35,280 --> 00:01:39,200
Speaker 1: much everywhere, um, So it's not just a US issue. Um.

29
00:01:39,400 --> 00:01:42,480
Speaker 1: What we're confronting right now is a very different situation

30
00:01:42,680 --> 00:01:47,080
Speaker 1: from the past, or certainly the last decade, where countries

31
00:01:47,160 --> 00:01:51,120
Speaker 1: were bailed out by following real interest rates. Now you're

32
00:01:51,160 --> 00:01:53,520
Speaker 1: not going to see following real interest rates. We're at

33
00:01:53,560 --> 00:01:56,560
Speaker 1: the zero lower around or effective lower around for most

34
00:01:56,600 --> 00:01:59,480
Speaker 1: countries on nominal rates, and the only way to get

35
00:01:59,520 --> 00:02:02,040
Speaker 1: real rates to fall from there is a hyper inflation.

36
00:02:02,720 --> 00:02:06,960
Speaker 1: So Marvin, with your dollar resiliency, do you assume then

37
00:02:07,040 --> 00:02:10,400
Speaker 1: that the real yield doesn't claw its way back to zero,

38
00:02:10,760 --> 00:02:14,919
Speaker 1: that we stay with a persistent negative real yield, So

39
00:02:15,120 --> 00:02:18,400
Speaker 1: ultimately we should expect that really yields will start to

40
00:02:18,840 --> 00:02:22,080
Speaker 1: to pick up. Um. You know, we will see UM

41
00:02:22,720 --> 00:02:25,840
Speaker 1: treasury yields start to pick up over the course of

42
00:02:25,880 --> 00:02:30,240
Speaker 1: the next few years. Gradually, UM markets have already priced

43
00:02:30,280 --> 00:02:33,079
Speaker 1: in a significant amount of the inflation that we expect.

44
00:02:33,160 --> 00:02:35,600
Speaker 1: There's still room for that to go to get to

45
00:02:35,680 --> 00:02:39,440
Speaker 1: the Fed's comfort zone in terms of where break evens

46
00:02:39,639 --> 00:02:42,799
Speaker 1: uh go. But UM, we will see a rise in

47
00:02:42,880 --> 00:02:44,880
Speaker 1: really yield, but it's not going to be anything um

48
00:02:45,160 --> 00:02:46,959
Speaker 1: like what we've seen in the path. But remember that

49
00:02:47,120 --> 00:02:50,880
Speaker 1: just makes UM. To Lesa's point, the debt problems more

50
00:02:51,919 --> 00:02:54,400
Speaker 1: pressing for countries around the world. And John, what's so

51
00:02:54,560 --> 00:02:57,600
Speaker 1: important here? The cadence, So Marvin Bart at Berkeleys is

52
00:02:57,639 --> 00:03:01,240
Speaker 1: the same cadence as Chairman Powell. The real note yesterday

53
00:03:01,280 --> 00:03:05,360
Speaker 1: with Chairman Poue is his ex axis. Chairman Paul's timeline

54
00:03:06,080 --> 00:03:09,760
Speaker 1: extends well out into two thousand twenty two. And that's

55
00:03:09,800 --> 00:03:12,040
Speaker 1: what I'm hearing from Marvin Burd the Ft is totally

56
00:03:12,160 --> 00:03:14,760
Speaker 1: committed to this. Marvin totally committed to this. And Shaman

57
00:03:14,800 --> 00:03:19,040
Speaker 1: pound one blink. Do you think everybody gets that now? Well, look,

58
00:03:19,160 --> 00:03:21,200
Speaker 1: I think people will get that, and that's why we've

59
00:03:21,240 --> 00:03:24,800
Speaker 1: had this pause in bond market markets over the course

60
00:03:24,840 --> 00:03:26,959
Speaker 1: of the last month month or so. Right, Remember, we

61
00:03:27,000 --> 00:03:29,160
Speaker 1: had a very intense sell off in the first quarter,

62
00:03:29,680 --> 00:03:32,680
Speaker 1: a lot of altility assession, and since then bond yields

63
00:03:32,960 --> 00:03:34,760
Speaker 1: you pointed out they've gone up a lot this week,

64
00:03:34,800 --> 00:03:37,120
Speaker 1: but we're still basically trading within the same range we've

65
00:03:37,160 --> 00:03:39,520
Speaker 1: traded for the last month, month or so. They're not

66
00:03:39,600 --> 00:03:42,640
Speaker 1: really going anywhere. That is the market accepting that, And

67
00:03:42,720 --> 00:03:45,520
Speaker 1: now the next step is they need to see, well,

68
00:03:46,000 --> 00:03:48,640
Speaker 1: is the economy going to be stronger than share Powell

69
00:03:48,720 --> 00:03:51,160
Speaker 1: in the committee exact, or is it going to be

70
00:03:51,240 --> 00:03:52,760
Speaker 1: in line with theirs? Or is there going to be

71
00:03:52,800 --> 00:03:55,680
Speaker 1: some sort of disaster that's that's gonna take it down.

72
00:03:55,920 --> 00:03:57,839
Speaker 1: And for that we're just going to have to wait

73
00:03:57,880 --> 00:04:00,640
Speaker 1: for the data. And that's why we're range trading across

74
00:04:00,760 --> 00:04:03,200
Speaker 1: asset markets right now. Mom, And it's always good to

75
00:04:03,200 --> 00:04:05,440
Speaker 1: see you got to catch up morv and Batley's head

76
00:04:05,480 --> 00:04:13,520
Speaker 1: of Effects and am macro strategy, David Kelly, Whether this

77
00:04:13,640 --> 00:04:15,600
Speaker 1: is JP Morgan and David Kelly, I'm gonna go to

78
00:04:15,640 --> 00:04:17,360
Speaker 1: the bottom of this first look at g d P.

79
00:04:18,000 --> 00:04:21,840
Speaker 1: In the nominal GDP statistic is ten point seven percent

80
00:04:22,200 --> 00:04:25,880
Speaker 1: with the big prices paid statistic. Does that signal to

81
00:04:26,000 --> 00:04:29,440
Speaker 1: you an inflation that is here or an inflation that's

82
00:04:29,480 --> 00:04:33,080
Speaker 1: good to come, a little bit of both. Um I

83
00:04:33,160 --> 00:04:35,200
Speaker 1: think there is clearly inflation right now. You can see

84
00:04:35,279 --> 00:04:37,720
Speaker 1: and things like lumber prices which don't feed through that much.

85
00:04:38,200 --> 00:04:40,560
Speaker 1: But you can also see in the difficulty that businesses

86
00:04:40,600 --> 00:04:42,480
Speaker 1: are having and hiring workers, they're going to have to

87
00:04:42,520 --> 00:04:45,600
Speaker 1: pay up in terms of higher wages. I think we've

88
00:04:45,640 --> 00:04:48,880
Speaker 1: got some bottle legs all over the place. I think

89
00:04:48,960 --> 00:04:51,800
Speaker 1: you know, light vehicle sales are pretty strong, but the

90
00:04:51,839 --> 00:04:54,880
Speaker 1: inventories are very low, and that's that is pushing prices up.

91
00:04:54,920 --> 00:04:56,960
Speaker 1: So I think we're seeing that right now. And in fact,

92
00:04:57,200 --> 00:04:59,280
Speaker 1: one other thing in this report when you're actually with

93
00:04:59,320 --> 00:05:02,520
Speaker 1: the numbers that's really interesting is inventories fell at an

94
00:05:02,600 --> 00:05:05,640
Speaker 1: eighty six billion dollar annual pace in the first quarter.

95
00:05:06,080 --> 00:05:08,560
Speaker 1: So if you think it's hard to find stuff, you're right.

96
00:05:08,880 --> 00:05:10,920
Speaker 1: But what that's gonna do is going to cause manufacturing

97
00:05:10,960 --> 00:05:13,600
Speaker 1: to crank up in the rest of this year. So

98
00:05:13,720 --> 00:05:16,480
Speaker 1: I think you're going to see UM as inventories are

99
00:05:16,839 --> 00:05:18,440
Speaker 1: restored over the course this year is just going to

100
00:05:18,480 --> 00:05:23,000
Speaker 1: add further to this economy. We had a savings rate

101
00:05:23,120 --> 00:05:26,440
Speaker 1: over in the first quarter. That's more fuel. So I

102
00:05:26,480 --> 00:05:28,840
Speaker 1: can see this economy really geared up to boom in

103
00:05:28,880 --> 00:05:31,000
Speaker 1: the second quarter. I think we'll get better than ten

104
00:05:31,080 --> 00:05:34,159
Speaker 1: percent growth annualized in the second quarter. Can these companies

105
00:05:34,240 --> 00:05:36,920
Speaker 1: make that demand? David? The money question, and it's still

106
00:05:37,000 --> 00:05:41,000
Speaker 1: racing to be bullish the sancuity market. Yes, I think so.

107
00:05:41,880 --> 00:05:44,360
Speaker 1: But I think you've got to got to focus on

108
00:05:44,800 --> 00:05:47,720
Speaker 1: the cyclical sectors, the value sectors. I think they should

109
00:05:47,839 --> 00:05:49,880
Speaker 1: They should do very well because this economy is going

110
00:05:49,920 --> 00:05:52,960
Speaker 1: to accelerate fast here. I don't think interest rates are

111
00:05:52,960 --> 00:05:54,320
Speaker 1: going to stay at this level. I think they have

112
00:05:54,480 --> 00:05:56,599
Speaker 1: to go up with the pace of acceleration that would

113
00:05:56,600 --> 00:05:58,840
Speaker 1: likely see over the next few quarters. How do you

114
00:05:58,960 --> 00:06:01,719
Speaker 1: look at the data, David, Given the fact that people

115
00:06:01,760 --> 00:06:04,040
Speaker 1: don't seem to trade off of it, what data are

116
00:06:04,080 --> 00:06:06,480
Speaker 1: you looking at to determine whether this is something more

117
00:06:06,520 --> 00:06:11,640
Speaker 1: than transitory, whether these price pressures have legs. Well, you

118
00:06:11,960 --> 00:06:13,960
Speaker 1: you almost have to have a new model of inflation.

119
00:06:14,040 --> 00:06:16,720
Speaker 1: I mean, the problem is that the old rules in

120
00:06:16,839 --> 00:06:18,560
Speaker 1: terms of exact you know, the Phillips curve and the

121
00:06:18,600 --> 00:06:21,400
Speaker 1: relationship between money supply and inflation, they don't really work

122
00:06:21,560 --> 00:06:25,120
Speaker 1: very well. So it is it's a complicated process, but

123
00:06:25,200 --> 00:06:27,120
Speaker 1: you have to put together the pieces of it. And

124
00:06:27,160 --> 00:06:29,960
Speaker 1: I think the wage part of it's very important. Um.

125
00:06:30,120 --> 00:06:32,880
Speaker 1: And also the fiscal party. You know, the present Biden

126
00:06:32,920 --> 00:06:35,360
Speaker 1: announced a lot of plans yesterday. If he gets that

127
00:06:35,520 --> 00:06:39,880
Speaker 1: through Congress, you know, usually it's spending now, taxes later, um.

128
00:06:40,000 --> 00:06:41,840
Speaker 1: And so I think you get more physical stimulus. And

129
00:06:41,839 --> 00:06:43,960
Speaker 1: if you get that stimulus, you will I think have

130
00:06:44,120 --> 00:06:47,160
Speaker 1: some inflation that sticks. And the really interesting point about

131
00:06:47,200 --> 00:06:48,840
Speaker 1: this is, you know the federal reserves as well. It's

132
00:06:48,839 --> 00:06:51,479
Speaker 1: probably transitory. But by the time they know whether it's

133
00:06:51,480 --> 00:06:53,839
Speaker 1: transitory or not, we're in the middle of next year.

134
00:06:54,200 --> 00:06:56,240
Speaker 1: So the question is how long can you wait to

135
00:06:56,800 --> 00:07:00,920
Speaker 1: be sure that it's transitory. That was a hatter of transitors.

136
00:07:01,000 --> 00:07:03,360
Speaker 1: That was very good. Dr you're getting drunk, t K.

137
00:07:04,560 --> 00:07:08,720
Speaker 1: He's going it, David Kelly. It was very transitory of

138
00:07:08,839 --> 00:07:11,240
Speaker 1: you to come on and give us wisdom out to

139
00:07:11,360 --> 00:07:14,640
Speaker 1: the third quarter or fourth quarter. With what we've seen

140
00:07:14,680 --> 00:07:17,480
Speaker 1: in the last a week or even five days, do

141
00:07:17,600 --> 00:07:22,880
Speaker 1: you have any clarity pest Labor Day of this year? Yeah,

142
00:07:22,920 --> 00:07:24,360
Speaker 1: I mean I think I think we can see we

143
00:07:24,400 --> 00:07:26,440
Speaker 1: can see the GDP story. I mean, this thing is

144
00:07:26,520 --> 00:07:28,880
Speaker 1: just going to keep on accelerating. We know we've got

145
00:07:28,920 --> 00:07:31,200
Speaker 1: the funds, and we also know that we've got people,

146
00:07:31,800 --> 00:07:34,320
Speaker 1: you know, anxious to get back to to doing normal things.

147
00:07:34,400 --> 00:07:36,160
Speaker 1: And you know, I think the fourth quarter this year

148
00:07:36,200 --> 00:07:37,680
Speaker 1: is the first quarter that's going to feel in any

149
00:07:37,680 --> 00:07:40,680
Speaker 1: way normal, and I expected to be a very blockbuster

150
00:07:40,800 --> 00:07:43,400
Speaker 1: quarter in terms economic activity. I think the holiday season

151
00:07:43,440 --> 00:07:46,440
Speaker 1: will be huge. But you know, I think things get

152
00:07:46,560 --> 00:07:48,880
Speaker 1: much more murky when you get into twenty two. Just

153
00:07:49,000 --> 00:07:50,680
Speaker 1: David Kelly, have to go back to the office soon.

154
00:07:51,240 --> 00:07:52,960
Speaker 1: Is that July? Is that July line in the sand

155
00:07:53,040 --> 00:07:56,600
Speaker 1: for you, David? I'm well, my second vaccine, I guess

156
00:07:56,680 --> 00:07:59,000
Speaker 1: on May eight, two weeks later, I intend to go

157
00:07:59,040 --> 00:08:01,080
Speaker 1: down to New York. We go. We look forward to

158
00:08:01,120 --> 00:08:03,080
Speaker 1: seeing you, so hopefully can come back into the studio

159
00:08:03,200 --> 00:08:04,920
Speaker 1: one day. I'd love to do that. That's the point

160
00:08:05,120 --> 00:08:07,520
Speaker 1: in the next I don't know, several years. David Kelly

161
00:08:07,640 --> 00:08:17,280
Speaker 1: check mugan asid Management Chief Club with Strategies. Now Henrietta

162
00:08:17,280 --> 00:08:20,480
Speaker 1: Trades joins his Veda partners here on the soire in

163
00:08:20,640 --> 00:08:25,120
Speaker 1: Washington last night, Henrietta, I want you to explain in

164
00:08:25,200 --> 00:08:30,880
Speaker 1: the white marbled halls of Washington how politicians line up

165
00:08:30,960 --> 00:08:35,280
Speaker 1: their tax policy around as a president mentioned three tenths

166
00:08:35,320 --> 00:08:40,080
Speaker 1: of one percent of taxpayers, why aren't they more representative

167
00:08:40,280 --> 00:08:43,240
Speaker 1: of the rest of America? You know, what are the

168
00:08:43,320 --> 00:08:47,240
Speaker 1: interesting things I hear from senators and including the moderates, like, um,

169
00:08:47,360 --> 00:08:49,000
Speaker 1: you know what Joe mansion is that they want to

170
00:08:49,120 --> 00:08:52,439
Speaker 1: tax wealth like the tax work. So they have I

171
00:08:52,520 --> 00:08:55,720
Speaker 1: think a lot of talking points around raising cap games,

172
00:08:55,800 --> 00:08:58,880
Speaker 1: around raising taxes on top marginal rates. I think the

173
00:08:59,000 --> 00:09:02,480
Speaker 1: real question is, you know, what can you functionally get

174
00:09:02,559 --> 00:09:05,640
Speaker 1: the votes for with no margin for error? Where can

175
00:09:05,679 --> 00:09:08,679
Speaker 1: you get those fifty votes then? And you know, I

176
00:09:08,679 --> 00:09:11,640
Speaker 1: don't see much movement as realistic. Maybe a couple of

177
00:09:11,679 --> 00:09:14,320
Speaker 1: points here and there. Okay, this is really really important.

178
00:09:14,400 --> 00:09:17,439
Speaker 1: Dan Balls steam Dan Balls in the Washington Post, so

179
00:09:17,840 --> 00:09:21,520
Speaker 1: talks about the narrowest of majorities. When do we come

180
00:09:21,600 --> 00:09:26,040
Speaker 1: to our senses that the president can't be bold? If

181
00:09:26,120 --> 00:09:29,120
Speaker 1: we do, is it within hours days? Or do we

182
00:09:29,200 --> 00:09:32,640
Speaker 1: have to drag this into July? I mean, honestly, I

183
00:09:32,720 --> 00:09:35,800
Speaker 1: think that you probably most investors should have seen that

184
00:09:35,960 --> 00:09:38,920
Speaker 1: when you know, for instance, they couldn't pass the minimum

185
00:09:38,960 --> 00:09:42,400
Speaker 1: wage hight votes see the fifteen dollars an hour, and

186
00:09:42,440 --> 00:09:44,559
Speaker 1: they lost eight votes. I mean, I think July is

187
00:09:44,600 --> 00:09:47,959
Speaker 1: probably a good time frame for when we'll start to

188
00:09:48,040 --> 00:09:50,520
Speaker 1: recognize that we're going to be mostly deficit to financing

189
00:09:50,559 --> 00:09:54,760
Speaker 1: the costs of this bill. The administration and Democrats generally

190
00:09:54,840 --> 00:09:57,960
Speaker 1: have been doing a great job of avoiding the conversation

191
00:09:58,040 --> 00:10:00,760
Speaker 1: around reconciliation and deficiting races that will have to be

192
00:10:00,800 --> 00:10:03,800
Speaker 1: authorized this bill, and that's because President Biden has rolled

193
00:10:03,800 --> 00:10:06,559
Speaker 1: out this ambitious agenda to pay for it. So July

194
00:10:07,080 --> 00:10:09,200
Speaker 1: seems right to me based on what we see from

195
00:10:09,200 --> 00:10:12,480
Speaker 1: the budget committees. We know that Secret Pelosi is marshaling

196
00:10:12,520 --> 00:10:13,959
Speaker 1: this bill through the House and they want to be

197
00:10:14,040 --> 00:10:16,520
Speaker 1: wrapped up by the fourth of July. I think reconciliation

198
00:10:16,640 --> 00:10:19,760
Speaker 1: comes right after um. September is a possibility, you know,

199
00:10:19,880 --> 00:10:22,520
Speaker 1: might be this headline risk that looms over us until September,

200
00:10:22,559 --> 00:10:25,280
Speaker 1: But July september is my thinking as well well, the

201
00:10:25,320 --> 00:10:28,120
Speaker 1: headline number, and most likely be in September after it

202
00:10:28,160 --> 00:10:32,160
Speaker 1: gets pushed through the congressional sausage. My expectation is at

203
00:10:32,200 --> 00:10:34,960
Speaker 1: the cost of this bill, which is currently four trillion dollars,

204
00:10:35,040 --> 00:10:37,240
Speaker 1: the combo of the Infrastructure Bill and the family's plan

205
00:10:37,480 --> 00:10:40,280
Speaker 1: gets flashed by at least half. So to trillion is

206
00:10:40,320 --> 00:10:43,520
Speaker 1: the maximum sticker shock spending number that goes moderates in

207
00:10:43,559 --> 00:10:46,520
Speaker 1: the Senate can stomach. So the spend alone is going

208
00:10:46,600 --> 00:10:48,880
Speaker 1: to come down by half, and that means the revenues

209
00:10:48,960 --> 00:10:50,760
Speaker 1: needed to offset the cost are going to calm down

210
00:10:50,880 --> 00:10:53,480
Speaker 1: by at least half. And we haven't even started about

211
00:10:53,559 --> 00:10:56,720
Speaker 1: started talking about the deficit hike. So the real question

212
00:10:56,840 --> 00:10:59,160
Speaker 1: is going to be when do we see the spending level. Um,

213
00:10:59,280 --> 00:11:02,560
Speaker 1: my expectation that that doesn't get discovered and earnest until

214
00:11:02,640 --> 00:11:04,599
Speaker 1: the Senate starts to consider this bill, which will be

215
00:11:04,720 --> 00:11:08,880
Speaker 1: July late July specifically, and then um, the deficit hike

216
00:11:08,960 --> 00:11:11,920
Speaker 1: number again will be the other key input point to

217
00:11:12,040 --> 00:11:14,560
Speaker 1: see how revenue we need. So all this is gonna

218
00:11:14,640 --> 00:11:17,079
Speaker 1: just effectively wait till July. You can skip over the

219
00:11:17,160 --> 00:11:19,199
Speaker 1: next couple of months. The Housel pass a big bill

220
00:11:19,320 --> 00:11:21,640
Speaker 1: that maybe is three four trillion dollars and then we

221
00:11:21,679 --> 00:11:23,320
Speaker 1: can forget about that as soon as we get over

222
00:11:23,360 --> 00:11:26,240
Speaker 1: to the Senate. Henrietta, if you look at equity trading,

223
00:11:26,280 --> 00:11:28,000
Speaker 1: you can see that a lot of people don't believe

224
00:11:28,120 --> 00:11:31,040
Speaker 1: that corporate taxes will be raised all that much. What

225
00:11:31,200 --> 00:11:33,319
Speaker 1: do you think they will be looking at in September.

226
00:11:33,400 --> 00:11:35,640
Speaker 1: Will it be higher than they expect or will there

227
00:11:35,679 --> 00:11:38,280
Speaker 1: be more enforcement of loopholes and just getting the actual

228
00:11:38,360 --> 00:11:41,160
Speaker 1: taxes that they're charging A great point, I mean that

229
00:11:41,320 --> 00:11:44,720
Speaker 1: enforcement mechanism. When you start hearing lawmakers talk about enforcement

230
00:11:44,840 --> 00:11:48,360
Speaker 1: and collecting taxes that are due by beefing up the

231
00:11:48,640 --> 00:11:50,520
Speaker 1: funding for the I R S, that should tell you

232
00:11:50,679 --> 00:11:52,480
Speaker 1: all you need to know, which is we're not going

233
00:11:52,520 --> 00:11:54,800
Speaker 1: to go after new taxes. We're not going to create

234
00:11:54,920 --> 00:11:57,520
Speaker 1: some new tax stream. We're gonna go after the ones

235
00:11:57,559 --> 00:11:59,880
Speaker 1: we've already collected, trying to boost you know, fraud ways

236
00:12:00,000 --> 00:12:02,280
Speaker 1: an abuse and and and call some earnings from that.

237
00:12:02,760 --> 00:12:05,200
Speaker 1: Um I think what investors are stuck in right now

238
00:12:05,520 --> 00:12:09,360
Speaker 1: is this um mentality that whatever the President says goes.

239
00:12:09,640 --> 00:12:11,439
Speaker 1: So they here, you know, at thirty nine point six

240
00:12:12,240 --> 00:12:14,719
Speaker 1: capital gains tax rate, and that's what they go to.

241
00:12:14,920 --> 00:12:16,559
Speaker 1: And then you see a couple of advisors say, you know,

242
00:12:16,600 --> 00:12:20,280
Speaker 1: maybe twenty eight. We'll imagine if the number is. I

243
00:12:20,280 --> 00:12:21,960
Speaker 1: think that's where we ultimately end up. But people are

244
00:12:22,120 --> 00:12:25,280
Speaker 1: using their imagination effectively enough. Yet the same with corporate rates,

245
00:12:25,320 --> 00:12:27,839
Speaker 1: it doesn't have to be. It doesn't even have to

246
00:12:27,840 --> 00:12:31,959
Speaker 1: be five percent. It could easily be. And that's what

247
00:12:32,040 --> 00:12:33,920
Speaker 1: the business community is pushing right now. You know, we

248
00:12:33,960 --> 00:12:35,960
Speaker 1: can handle a point or two. Don't take us all

249
00:12:36,000 --> 00:12:38,280
Speaker 1: the way at twenty eight, and possibly don't take us

250
00:12:38,280 --> 00:12:40,040
Speaker 1: all the way at twenty five, and those are options,

251
00:12:40,040 --> 00:12:42,560
Speaker 1: and I think the street will spawn pretty favorably based

252
00:12:42,559 --> 00:12:44,959
Speaker 1: off of what current expectations are, which still can be

253
00:12:45,040 --> 00:12:46,640
Speaker 1: really high. If you're on the phone with folks, I

254
00:12:46,720 --> 00:12:48,640
Speaker 1: agree the market is not pricing it in. But when

255
00:12:48,640 --> 00:12:50,600
Speaker 1: you're on the phone with people talking about where tax

256
00:12:50,679 --> 00:12:52,920
Speaker 1: rates are going to go, they're surprised at our thesis

257
00:12:53,000 --> 00:12:54,959
Speaker 1: that taxes will not rise that much. And then it

258
00:12:55,040 --> 00:12:56,959
Speaker 1: just quickly. It wouldn't be the first time that we've

259
00:12:56,960 --> 00:12:59,160
Speaker 1: had a week where we're drowning in fiscal news in

260
00:12:59,200 --> 00:13:02,320
Speaker 1: America and we missed the foreign policy story that creeps

261
00:13:02,400 --> 00:13:04,520
Speaker 1: up on us. What are we missing right now? At

262
00:13:04,559 --> 00:13:08,000
Speaker 1: Sound of America? At Sound of Domestic Fiscal Policy? Man

263
00:13:08,120 --> 00:13:10,280
Speaker 1: John I thought the part of the speech Laborite that

264
00:13:10,360 --> 00:13:13,559
Speaker 1: was most compelling was the China facing component. Um The U. S.

265
00:13:13,640 --> 00:13:15,880
Speaker 1: China relationship is one that I think is going to

266
00:13:15,960 --> 00:13:19,160
Speaker 1: be paramount in the back three years of the Biden administration.

267
00:13:19,200 --> 00:13:21,360
Speaker 1: They're not going to pass anymore legislation after this bill,

268
00:13:21,480 --> 00:13:25,400
Speaker 1: most likely except for a China facing component, so U

269
00:13:25,520 --> 00:13:28,880
Speaker 1: S China relationships. That means everything from expert control restrictions

270
00:13:28,920 --> 00:13:32,240
Speaker 1: beeping up to domestic subsidization of manufacturing in the high

271
00:13:32,280 --> 00:13:35,840
Speaker 1: tech sectors. Um, you know, monitoring the South China, see

272
00:13:36,120 --> 00:13:39,040
Speaker 1: dealing with Taiwan, dealing with the EU and the UK

273
00:13:39,320 --> 00:13:42,520
Speaker 1: to sort of combat China on a multilateral basis. That's

274
00:13:42,559 --> 00:13:45,320
Speaker 1: the future. That's the next three years. Henrietta gotta catch

275
00:13:45,440 --> 00:13:53,040
Speaker 1: up and registrates there of Vata Panas thank you, the

276
00:13:53,240 --> 00:13:56,640
Speaker 1: Caterpillos CFO saying that they may not meet the one

277
00:13:56,679 --> 00:13:59,199
Speaker 1: and use a demand due to a chip shortage. You

278
00:13:59,240 --> 00:14:01,319
Speaker 1: saw this in Apple as they knock off three or

279
00:14:01,360 --> 00:14:04,480
Speaker 1: four billion dollars a quarterly revenue because of a chip shortage,

280
00:14:04,520 --> 00:14:07,520
Speaker 1: holding back sales of the Mac and the iPad. You

281
00:14:07,559 --> 00:14:10,959
Speaker 1: saw this from forward cutting production by fift planned production

282
00:14:11,000 --> 00:14:13,800
Speaker 1: by in the second quarter. I want to bring it

283
00:14:13,800 --> 00:14:15,560
Speaker 1: a man who knows this business far better than us

284
00:14:15,800 --> 00:14:19,440
Speaker 1: p f Ago, the New Street Research head of Technology Infrastructure.

285
00:14:19,960 --> 00:14:22,600
Speaker 1: Let's just start right there. What's happening at the moment,

286
00:14:22,720 --> 00:14:26,520
Speaker 1: and why is this hitting some companies more than others. Okay,

287
00:14:26,920 --> 00:14:30,080
Speaker 1: so on what's happening at the moment. Let's rewind back

288
00:14:30,160 --> 00:14:33,720
Speaker 1: to a year ago. A year ago, the world came

289
00:14:34,200 --> 00:14:38,080
Speaker 1: to a stud everything stopped, and then you know guys

290
00:14:38,160 --> 00:14:42,240
Speaker 1: working in the supply chain at like in in boundaries

291
00:14:43,120 --> 00:14:48,600
Speaker 1: at chip manufacturers, like buyers planning for orders, they all

292
00:14:48,720 --> 00:14:51,760
Speaker 1: went a very cautious role. And then at that point

293
00:14:51,800 --> 00:14:54,560
Speaker 1: in time, the word split into you have you have

294
00:14:54,720 --> 00:14:58,480
Speaker 1: players more into tech space who we are thinking, we

295
00:14:58,640 --> 00:15:01,640
Speaker 1: have very important turns to take, like the cloud, the

296
00:15:01,760 --> 00:15:05,040
Speaker 1: five jet turn, and we don't want that situation, that

297
00:15:05,120 --> 00:15:09,200
Speaker 1: temporary situation to stuff. So they kept ordering like there

298
00:15:09,320 --> 00:15:11,880
Speaker 1: is more tomorrow. And then you have people who are

299
00:15:11,920 --> 00:15:16,560
Speaker 1: more defensive, like the auto industry, like industrial supply chains,

300
00:15:16,920 --> 00:15:19,920
Speaker 1: that were really scared about cash burn and like getting

301
00:15:19,960 --> 00:15:25,160
Speaker 1: into trouble in such like a significant downturn, and they

302
00:15:25,240 --> 00:15:28,440
Speaker 1: became very very cautious. Then right after that what happened.

303
00:15:29,200 --> 00:15:33,120
Speaker 1: The word remained relatively slow, which is not great for

304
00:15:33,280 --> 00:15:36,080
Speaker 1: many people for like restaurants and things like that. But

305
00:15:36,200 --> 00:15:39,600
Speaker 1: people staying at home, like white collar kept getting paid.

306
00:15:40,000 --> 00:15:43,240
Speaker 1: Blue collars or like you know, like a service jobs

307
00:15:43,600 --> 00:15:46,600
Speaker 1: got compensated with government with simil this money and a

308
00:15:46,680 --> 00:15:49,920
Speaker 1: lot of money kept flowing into demand. You look at

309
00:15:49,920 --> 00:15:52,720
Speaker 1: the results of that early yesterday, that was a massive,

310
00:15:53,120 --> 00:15:56,920
Speaker 1: massive bit like iphen stays up sixty five percent own here.

311
00:15:57,360 --> 00:16:01,560
Speaker 1: So demand is far outstripping the questions supply planning that

312
00:16:01,760 --> 00:16:05,840
Speaker 1: was made. Okay, So Pierre beautifully explained you are definitive

313
00:16:05,920 --> 00:16:08,760
Speaker 1: on this out of Bernstein years ago. What is the

314
00:16:08,960 --> 00:16:16,359
Speaker 1: fairly good timeline to where the logistics mass clears. So unfortunately,

315
00:16:16,960 --> 00:16:19,360
Speaker 1: the core of the logistics mess is what we call

316
00:16:19,440 --> 00:16:24,480
Speaker 1: legging edge uh logic chips. So that's the chips manufactured

317
00:16:24,560 --> 00:16:29,320
Speaker 1: by Global Foundries, by t SMC, by UMC. And the

318
00:16:29,440 --> 00:16:32,320
Speaker 1: lead time to put out a new fab and have

319
00:16:32,480 --> 00:16:36,640
Speaker 1: it up and running is at best, in ideal conditions,

320
00:16:36,760 --> 00:16:39,840
Speaker 1: eighteen months and you should be more like thinking, you know,

321
00:16:40,560 --> 00:16:45,920
Speaker 1: um uh, like even six more months like that, like

322
00:16:46,040 --> 00:16:49,040
Speaker 1: twenty four months or a bit more. So we're going

323
00:16:49,160 --> 00:16:51,960
Speaker 1: to hear that chip supply for the next couple of years.

324
00:16:52,840 --> 00:16:55,760
Speaker 1: Um And in terms of getting gets impacted the most

325
00:16:55,840 --> 00:16:57,200
Speaker 1: and things like that, it's it's going to be very

326
00:16:57,240 --> 00:17:00,240
Speaker 1: difficult to call because one chip missing on the mother board.

327
00:17:00,360 --> 00:17:03,240
Speaker 1: You can't chip your iPad, one chip missing in your car.

328
00:17:03,480 --> 00:17:06,520
Speaker 1: You can't manufacture your car. So it's going to be

329
00:17:06,680 --> 00:17:09,199
Speaker 1: very random. You know, who gets hit, who doesn't get hit.

330
00:17:09,600 --> 00:17:13,720
Speaker 1: But of course, if you are like uh an Apple,

331
00:17:14,840 --> 00:17:18,000
Speaker 1: your better position because you've been preparing for that better

332
00:17:18,160 --> 00:17:20,639
Speaker 1: because you were working on your five transitions and others

333
00:17:21,040 --> 00:17:24,159
Speaker 1: taking way more precautions in terms of supply than to

334
00:17:24,240 --> 00:17:27,640
Speaker 1: can manufact You're just being focused on managing the downtown here.

335
00:17:27,760 --> 00:17:30,000
Speaker 1: This is exactly where I wanted to go execution risk.

336
00:17:30,040 --> 00:17:32,720
Speaker 1: As John was talking about earlier, how much is this

337
00:17:32,960 --> 00:17:36,240
Speaker 1: something that corporate executives can get ahead of at this point?

338
00:17:36,320 --> 00:17:38,960
Speaker 1: What are you looking forward to hear from corporate executives

339
00:17:39,200 --> 00:17:42,960
Speaker 1: that they are going to do about it? Um, So

340
00:17:44,040 --> 00:17:45,840
Speaker 1: you know it's going to be very difficult to get

341
00:17:46,000 --> 00:17:48,960
Speaker 1: granular details about what they're going to to be able

342
00:17:49,000 --> 00:17:52,280
Speaker 1: to do that. If the CFO Ford, you know, you know,

343
00:17:52,640 --> 00:17:55,120
Speaker 1: you cannot really have his own and on the plan

344
00:17:55,359 --> 00:17:59,680
Speaker 1: to secure like alternative supply for a very minor chip

345
00:18:00,560 --> 00:18:05,919
Speaker 1: in their car, So, um, it's going to be very

346
00:18:05,960 --> 00:18:08,119
Speaker 1: difficult to be able to do something about it. I

347
00:18:08,200 --> 00:18:11,320
Speaker 1: think what you have to do is to mitigate it. Uh.

348
00:18:11,440 --> 00:18:13,240
Speaker 1: And then another perspectives that you have to keep in

349
00:18:13,320 --> 00:18:15,960
Speaker 1: mind that is very important is that we are in

350
00:18:16,040 --> 00:18:19,159
Speaker 1: this extreme situation where people braced for a downturn and

351
00:18:19,200 --> 00:18:23,960
Speaker 1: actually spending increase. But as you know, the world reopened

352
00:18:24,119 --> 00:18:26,760
Speaker 1: and you were talking about New York getting back to normal,

353
00:18:26,840 --> 00:18:29,960
Speaker 1: people getting back into the cities that never sleeps in

354
00:18:30,080 --> 00:18:33,160
Speaker 1: bars and restaurants. This is actually going to flush down

355
00:18:33,400 --> 00:18:36,720
Speaker 1: the amount of money going into consumer econics and potentially

356
00:18:36,760 --> 00:18:39,440
Speaker 1: even going into the car industry. And so maybe the

357
00:18:39,520 --> 00:18:42,120
Speaker 1: saving grace in this environment is going to be when

358
00:18:42,200 --> 00:18:46,320
Speaker 1: demands normalize. It is apply going to have like massive

359
00:18:46,440 --> 00:18:49,800
Speaker 1: quarters that they reverted yesterday for the next six months

360
00:18:49,880 --> 00:18:51,920
Speaker 1: or nine months. Maybe not. Maybe things are going to

361
00:18:52,040 --> 00:18:55,040
Speaker 1: cool down, and that's actually what's going to to accelerate

362
00:18:55,080 --> 00:18:58,440
Speaker 1: a return to normal. On the supply side of things

363
00:18:58,960 --> 00:19:01,240
Speaker 1: are really smart as always, and I look forward to

364
00:19:01,280 --> 00:19:03,200
Speaker 1: catching up again. I can't MANE told you about TESTA

365
00:19:03,240 --> 00:19:05,040
Speaker 1: and then we get distracted by something else. We're gonna

366
00:19:05,080 --> 00:19:07,200
Speaker 1: do that soon. I promised PFW to that New Street

367
00:19:07,240 --> 00:19:17,480
Speaker 1: Research Head of Technology Infrastructure Joseph Feldban of Telsea Adviser

368
00:19:17,520 --> 00:19:19,600
Speaker 1: to go up as a choice set. He wrote a

369
00:19:19,680 --> 00:19:23,240
Speaker 1: brilliant note on Amazon to maybe three days ago. The

370
00:19:23,359 --> 00:19:26,119
Speaker 1: ink is barely dry and he probably already has to

371
00:19:26,240 --> 00:19:29,879
Speaker 1: change the model. Joe Feldman, how do you approach Amazon

372
00:19:30,000 --> 00:19:36,200
Speaker 1: this afternoon after what you witnessed from Google and Apple? Yeah,

373
00:19:36,280 --> 00:19:38,199
Speaker 1: I think you're going to see some really good results

374
00:19:38,240 --> 00:19:42,520
Speaker 1: out of Amazon, especially fourth quarter has in the first

375
00:19:42,600 --> 00:19:44,760
Speaker 1: quarter so far is proven to be quite strong for

376
00:19:45,200 --> 00:19:48,080
Speaker 1: really all the retailers, anybody selling to the consumer, and

377
00:19:48,520 --> 00:19:50,159
Speaker 1: Amazon is going to be a big winner of that.

378
00:19:50,680 --> 00:19:53,280
Speaker 1: I think they're Amazon a ws business has been strong

379
00:19:53,320 --> 00:19:55,760
Speaker 1: even last night. They just announced a new deal with

380
00:19:55,880 --> 00:20:00,240
Speaker 1: Disney Plus. So they're continuing to be this juggernaut in

381
00:20:00,600 --> 00:20:04,240
Speaker 1: the you know, retail and technology and just dominating out there.

382
00:20:04,320 --> 00:20:06,200
Speaker 1: So I think our our numbers are probably going to

383
00:20:06,280 --> 00:20:08,159
Speaker 1: go up. I think our models going to have to

384
00:20:08,240 --> 00:20:11,479
Speaker 1: adjust again tonight after they report. I'm expecting good results.

385
00:20:11,760 --> 00:20:13,800
Speaker 1: A juggernaut with a target on its back, and we

386
00:20:13,880 --> 00:20:15,520
Speaker 1: saw it of an Apple trying to get ahead of

387
00:20:15,600 --> 00:20:18,000
Speaker 1: that with a plan to do infrastructure spending in the

388
00:20:18,080 --> 00:20:20,639
Speaker 1: United States, invest in new plants. Are we going to

389
00:20:20,720 --> 00:20:24,919
Speaker 1: hear something similar out of Amazon. I think they are.

390
00:20:25,600 --> 00:20:29,080
Speaker 1: You know you you. They continue to invest in the future.

391
00:20:29,560 --> 00:20:33,240
Speaker 1: They're getting closer to the customer with more facilities. UM,

392
00:20:33,440 --> 00:20:37,320
Speaker 1: whether it's distribution or grocery. They're leveraging their technology and

393
00:20:37,359 --> 00:20:39,680
Speaker 1: the stores. I think we're going to have contact with

394
00:20:39,800 --> 00:20:42,679
Speaker 1: shopping at a whole new level because of the technology

395
00:20:42,720 --> 00:20:47,240
Speaker 1: Amazon has. Their distribution capabilities continue to improve. Like I said,

396
00:20:47,280 --> 00:20:50,600
Speaker 1: the AWS, they're continuing to become more dominant there, and

397
00:20:50,760 --> 00:20:53,840
Speaker 1: especially with more people working from home, and and you know,

398
00:20:54,000 --> 00:20:57,639
Speaker 1: that's likely to continue to some extent that AWS becomes

399
00:20:57,720 --> 00:21:00,280
Speaker 1: even more important to have things in the class. So

400
00:21:01,040 --> 00:21:03,560
Speaker 1: I think they're going to continue to to to really

401
00:21:03,680 --> 00:21:07,639
Speaker 1: push and lead the direction for most others, uh, in

402
00:21:07,720 --> 00:21:09,960
Speaker 1: the in the consumer space for sure. There's also a

403
00:21:10,040 --> 00:21:12,960
Speaker 1: question on the employment space. Um. Amazon coming out today

404
00:21:13,000 --> 00:21:15,560
Speaker 1: and saying that it was planning to raise wages for

405
00:21:15,640 --> 00:21:18,120
Speaker 1: a lot of workers. Is it enough what you've seen

406
00:21:18,200 --> 00:21:20,200
Speaker 1: so far fifty cents to three dollars an hour for

407
00:21:20,320 --> 00:21:23,760
Speaker 1: most workers, this idea that Amazon has had so much pressure,

408
00:21:24,000 --> 00:21:29,040
Speaker 1: including that unionization push. Yeah, I think that they have

409
00:21:29,240 --> 00:21:32,359
Speaker 1: done a good job, better than most people expect. I

410
00:21:32,440 --> 00:21:34,600
Speaker 1: think if you look at their average wage, it is

411
00:21:34,680 --> 00:21:37,920
Speaker 1: pretty strong. Um. You know, and it's certainly above the

412
00:21:37,960 --> 00:21:40,480
Speaker 1: fifteen dollar mark. And I think that they've you know,

413
00:21:40,960 --> 00:21:43,400
Speaker 1: been very competitive. I hear a lot of retailers talk

414
00:21:43,440 --> 00:21:48,320
Speaker 1: about needing to compete with Amazon for for talent, uh,

415
00:21:48,440 --> 00:21:52,639
Speaker 1: particularly in distribution UH and even at retail. So I

416
00:21:52,800 --> 00:21:55,120
Speaker 1: think that, you know, Amazon has done a good job,

417
00:21:55,200 --> 00:21:57,080
Speaker 1: and you know, people want to work at a company

418
00:21:57,160 --> 00:21:59,960
Speaker 1: that's growing fast and has a lot of strong process

419
00:22:00,000 --> 00:22:03,040
Speaker 1: backs ahead, Joe, I'm looking at free cash flow back

420
00:22:03,160 --> 00:22:10,040
Speaker 1: five years. Here's the numbers, folks, six seventeen two six again,

421
00:22:10,480 --> 00:22:12,760
Speaker 1: and we model out to fifty two. We've gone from

422
00:22:12,840 --> 00:22:16,440
Speaker 1: six gazillion to fifty two gazillion. In a long cup

423
00:22:16,520 --> 00:22:21,440
Speaker 1: of coffee, Joe Feldman, when's the dividend? Where's the ship share?

424
00:22:21,520 --> 00:22:24,400
Speaker 1: Buy back? Where's the stock split? When did these guys

425
00:22:24,480 --> 00:22:30,520
Speaker 1: grow up and become a Dow component? Yeah, the stock

426
00:22:30,560 --> 00:22:34,119
Speaker 1: split is something that seems nearer to us than than something,

427
00:22:34,440 --> 00:22:36,919
Speaker 1: you know, the others, the dividend or buy back. Uh.

428
00:22:37,480 --> 00:22:40,280
Speaker 1: You would think that they are unstable enough footing at

429
00:22:40,320 --> 00:22:43,320
Speaker 1: this point, and they've been able to show profitability quarter

430
00:22:43,400 --> 00:22:46,119
Speaker 1: after quarter now for several years that they should be

431
00:22:46,240 --> 00:22:49,639
Speaker 1: able to start to think about redeploying that cash to

432
00:22:49,760 --> 00:22:53,159
Speaker 1: the shareholder in some some regard um. You know, I

433
00:22:53,240 --> 00:22:54,879
Speaker 1: get it, you want to hold some cash and be

434
00:22:55,000 --> 00:22:57,160
Speaker 1: able to continue to invest and do what they're doing.

435
00:22:57,760 --> 00:23:01,399
Speaker 1: But we're back, We're now that new territory, a new

436
00:23:01,480 --> 00:23:04,159
Speaker 1: phase of growth for these this company where I do

437
00:23:04,320 --> 00:23:11,120
Speaker 1: agree that you're gonna have to see some of that cash, Lisa. One,

438
00:23:13,680 --> 00:23:18,400
Speaker 1: they've gone from four gazillion and like another long cup

439
00:23:18,480 --> 00:23:20,520
Speaker 1: of coffee, which raises a question, Joe, what are they

440
00:23:20,560 --> 00:23:25,440
Speaker 1: gonna buy? Well, they can buy whatever they want, I guess,

441
00:23:25,520 --> 00:23:29,000
Speaker 1: but you know, they do have a lot of opportunity

442
00:23:29,080 --> 00:23:32,359
Speaker 1: to grow. I think their footprint to get closer to

443
00:23:32,400 --> 00:23:34,960
Speaker 1: the customer, now, whether that's going to be through distribution

444
00:23:35,040 --> 00:23:37,800
Speaker 1: facilities or grocery stores. I mean, a lot of our

445
00:23:37,880 --> 00:23:40,760
Speaker 1: contacts in the real estate community, you know, indicate that

446
00:23:41,359 --> 00:23:43,880
Speaker 1: that Amazon has been pretty aggressive trying to build out

447
00:23:43,920 --> 00:23:47,159
Speaker 1: their grocery networks. You know. Now clearly they've more than

448
00:23:47,320 --> 00:23:49,920
Speaker 1: enough cash to do that. I don't think they want

449
00:23:49,960 --> 00:23:52,280
Speaker 1: to buy a retailer, though, I think they'd rather grow

450
00:23:52,359 --> 00:23:55,119
Speaker 1: it themselves organically. You know, maybe they could get some

451
00:23:55,480 --> 00:23:59,040
Speaker 1: you know, leases or something, but it's not clear that

452
00:23:59,119 --> 00:24:01,639
Speaker 1: that's where they would make acquisition. Well, I gotta say, Joe,

453
00:24:01,680 --> 00:24:03,600
Speaker 1: when you say that they could buy anyone. Sure they

454
00:24:03,680 --> 00:24:06,160
Speaker 1: have the cash, But I do wonder the anti trust

455
00:24:06,200 --> 00:24:08,480
Speaker 1: push in Washington, d C. Is it just lip service

456
00:24:08,600 --> 00:24:12,040
Speaker 1: or is that a real threat for Amazon. I mean,

457
00:24:12,720 --> 00:24:15,359
Speaker 1: you know, look as big as they are, you know,

458
00:24:15,520 --> 00:24:18,800
Speaker 1: they've got this big guy in Bentonville that quite large

459
00:24:18,840 --> 00:24:22,159
Speaker 1: themselves on the retail side of things anyway, you know,

460
00:24:22,359 --> 00:24:24,480
Speaker 1: and they've got quite a few competitors in the cloud.

461
00:24:25,800 --> 00:24:27,879
Speaker 1: I'm not so sure that they've got this monopolist of

462
00:24:27,920 --> 00:24:30,760
Speaker 1: power out there that that people are concerned about. Um,

463
00:24:31,000 --> 00:24:34,280
Speaker 1: there is pretty strong competition in the space of retail

464
00:24:34,359 --> 00:24:38,080
Speaker 1: and technology. Joe Fellman, thank you so much. Thrilled to

465
00:24:38,160 --> 00:24:40,400
Speaker 1: have you on here early in the years. On day

466
00:24:40,440 --> 00:24:45,800
Speaker 1: he is with Telsey Advisory. This is the Bloomberg Surveillance Podcast.

467
00:24:46,119 --> 00:24:49,440
Speaker 1: Thanks for listening. Join us live weekdays from seven to

468
00:24:49,560 --> 00:24:53,560
Speaker 1: ten am Eastern on Bloomberg Radio and on Bloomberg Television

469
00:24:53,960 --> 00:24:57,959
Speaker 1: each day from six to nine am for insight from

470
00:24:58,000 --> 00:25:01,919
Speaker 1: the best and economics, finance and sument and international relations.

471
00:25:02,480 --> 00:25:07,080
Speaker 1: And subscribe to the Surveillance podcast on Apple podcast, SoundCloud,

472
00:25:07,280 --> 00:25:10,840
Speaker 1: Bloomberg dot com, and of course on the terminal. I'm

473
00:25:10,920 --> 00:25:13,560
Speaker 1: Tom Keane, and this is Bloomberg