Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
Speaker 1: my co host Matt Miller. Every business day, we bring
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast
Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and
Speaker 1: at Bloomberg dot com slash podcast. We are gonna be
Speaker 1: joined right now by Rich Ferrarro, chief communications officer for GLAD,
Speaker 1: the Gay and Lesbian Alliance Against Defamation. I know it's
Speaker 1: Pride Week in New York, and I think it's Pride
Speaker 1: month generally. We have UH flags all over the place.
Speaker 1: I've got a lapel pin that I was given um
Speaker 1: a couple of weeks ago, and visibility is just huge here. Um.
Speaker 1: I think that not only on Wall Street, and not
Speaker 1: only on the coast, but really across the middle of
Speaker 1: the country and now on to at least this continent
Speaker 1: here in Europe, people are really recognizing and selling and
Speaker 1: celebrating gay pride. Rich Um, am I wrong in that
Speaker 1: this has become just just a massive event? Um? Is it?
Speaker 1: Is it completely Uh? I don't want to say completely accepted,
Speaker 1: but is it is it celebrated now by a majority
Speaker 1: of the people across the Western world. Yeah, we've definitely
Speaker 1: seen lgbt Q acceptance grow over recent years. You can see, uh,
Speaker 1: the NFL player Karl from the Las Vegas Raiders, as
Speaker 1: he came out earlier this week, there wasn't a backlash
Speaker 1: from his teammates or from the NFL. There was acceptance
Speaker 1: and that's a great Everybody wanted to buy the jersey
Speaker 1: right best selling jersey this week. That was great news UM,
Speaker 1: and I think pride is that moment when you see
Speaker 1: the community stand up and be very visible throughout the year,
Speaker 1: but you also see our allies stand up. And what's
Speaker 1: great about UM this year as we're seeing allies from
Speaker 1: all areas of business, whether it's financial or B two
Speaker 1: C companies, UM companies are stepping up, and I think
Speaker 1: that's because not only our community expects to see that,
Speaker 1: but the allies of our community expect to see brands
Speaker 1: that UM stand with and for LGBTQ people. Yeah. Rich,
Speaker 1: that's kind of where I wanted to go. I've spent
Speaker 1: my career studying the media industry, so I'm fascinating by
Speaker 1: your visibility project that you launch with Procter and Gamble
Speaker 1: looking at advertising and marketing towards this community. What are
Speaker 1: some of the big findings you guys had. Yeah, and
Speaker 1: so I've been with GLAD since two thousand and eight,
Speaker 1: and GLAD does a lot of work creating public campaigns
Speaker 1: for ways people could take action, but most of our
Speaker 1: workers behind the scenes with media companies, with Hollywood and
Speaker 1: more and more, with brands and advertisers to leverage that
Speaker 1: reach of media and the power of media to affect change,
Speaker 1: to tell the stories that are going to create a difference.
Speaker 1: And with Procter and Gamble, the world's largest advertiser, We've
Speaker 1: been working with them for the last few years, and
Speaker 1: UM last month launched the Visibility projects because they've stepped
Speaker 1: up as a corporate allied to LGBTQ people to say
Speaker 1: we want to create resources for the advertising industry and
Speaker 1: for brands to get lgbt Q inclusion. Right when I
Speaker 1: started a Glass, there was a lot of hesitation from
Speaker 1: brands to include gay dads in in an ad or
Speaker 1: to include LGBTQ people in public communications because people brands
Speaker 1: were worried about an anti lgbt Q backlash. This year,
Speaker 1: we released research with Proctor and Gamble that found that
Speaker 1: we we surveyed brand executives and exacts at ad agencies
Speaker 1: and found that the exects were not worried about that
Speaker 1: anti lgbt Q backlash. They were worried about the community
Speaker 1: seeing their um, their campaigns, and their ads as authentic.
Speaker 1: So with Procter and Gamble, we said, let's create some resources.
Speaker 1: Because advertising is very powerful and reaches people that need
Speaker 1: to see LGBTQ people and here our stories. That's the
Speaker 1: power of brands and ads. But let's create create some
Speaker 1: resources and best practices to do it right. Bottom line
Speaker 1: is you've got really a tail wind here in two
Speaker 1: thousand Where are we two thousand twenty one? But glad
Speaker 1: was found because the New York Post and really a
Speaker 1: lot of media had to samatory ins and stationalized h
Speaker 1: IVY and AIDS coverage. What are the biggest problems that
Speaker 1: you're fighting today, Rich Um, biggest problems right now? So
Speaker 1: our our team is exhausted this year because we have
Speaker 1: been battling back against over two hundred anti LGBTQ pieces
Speaker 1: of legislation introduced just this year in states around the country.
Speaker 1: Eight states moved to ban transgender youth from participating in sports,
Speaker 1: even though every leading medical association said that was not necessary,
Speaker 1: and teachers groups and brands also spoke out against those
Speaker 1: bills as well. And then our community has been pushing
Speaker 1: for decades for the Equality Act, which is now installed
Speaker 1: in the Senate, largely because of the filibuster. The Equality
Speaker 1: Act would write non discrimination um and protect LGBTQ people
Speaker 1: against discrimination on a federal level. Right now, there's this
Speaker 1: patchwork of laws around the country that determine whether or
Speaker 1: not we can be served a piece of cake, whether
Speaker 1: or not our families can be turned to way from
Speaker 1: a doctor just because of who we are. And we
Speaker 1: need that Equality Act to create one non discrimination law
Speaker 1: on a federal level. And Rich, thanks so much for
Speaker 1: taking the time to join us. We really appreciate getting
Speaker 1: your thoughts. Rich Ferraro, he's the chief communications officer for
Speaker 1: GLAD that's a gay and Lesbian Alliance against a defamation
Speaker 1: doing some important work there and as he said, kind
Speaker 1: of exhausting year dealing with the various legislations across various
Speaker 1: states here, but it's good to get some time from rich.
Speaker 1: Really rich people in America don't have to pay taxes,
Speaker 1: they figure their way out of it usually, but those
Speaker 1: of us in the middle class end up working for
Speaker 1: Uncle Sam pretty much half the year. That's why Congress
Speaker 1: gave us the roth I r A. It allows us
Speaker 1: a little bit of a break when the taxman cometh,
Speaker 1: and poor people like Peter Thiel have figured out a
Speaker 1: great way to use it. Let's bring in Ben Steberman
Speaker 1: right now. Personal finance reporter Fort Bloomberg News. Um, poor
Speaker 1: Peter put some worthless shares in his roth IRA and
Speaker 1: now he's got a little bit of a nest egg
Speaker 1: a Ben. Yeah, it's it's it's it's a it's a
Speaker 1: small one. Um. Yeah, he he really has has seems
Speaker 1: to have played the system here. Um. You know, Pro
Speaker 1: Publica got these tax records, so they're able to tell
Speaker 1: this story that stretches back to when PayPal was a
Speaker 1: privately a private company. It was a startup, and what
Speaker 1: Peter Field did was take a less than two million,
Speaker 1: almost two million shares of that private company. They were
Speaker 1: valued to just a tenth of a cent at that time,
Speaker 1: and he was able to put them in an IRA
Speaker 1: and say, oh, it's only you know, less than two
Speaker 1: thousand dollars which was a contribution limit at that time
Speaker 1: less than two thousand dollars. It's this legal, I can
Speaker 1: put this money into it a roth ira um. The
Speaker 1: next year, the value of those share sword um to
Speaker 1: like four million. I get. Some observers would say they
Speaker 1: were always worth more than that. This is an artificially
Speaker 1: low valuation he was using. And now he he sort
Speaker 1: of moved that those investments from from PayPal, which paid
Speaker 1: off handsomely, and then into Facebook, and then into palent
Speaker 1: here and into all these other investorsments that he's gotten
Speaker 1: rich on, and he now has this five billion dollar
Speaker 1: pool of money that he never has to pay taxes on. Wow.
Speaker 1: I was looking at my I RAS and four one
Speaker 1: case recently and feeling pretty good about myself until I
Speaker 1: saw your story. Ben. I'm like, all right, Peter Teal's
Speaker 1: got me be here. When I first read your story, Ben,
Speaker 1: I said, all right, there's a scam here. This is
Speaker 1: something that the I R S is going to have
Speaker 1: to take a look at. But in reality, it doesn't
Speaker 1: seem like he did anything wrong. Umber the valuation. I
Speaker 1: want to point out, Ben, it wasn't the tenth of
Speaker 1: a cent those PayPal shares were valued at one one
Speaker 1: thousand of assent um. So the question is was that
Speaker 1: a fair valuation for the one point seven million shares
Speaker 1: of PayPal that he put into his wrath R I
Speaker 1: R A and a reminder to listeners, I mean, we
Speaker 1: all know, sadly, because it's so painful, you can contribute
Speaker 1: at most two thousand dollars a year to this vehicle.
Speaker 1: The PayPal was already getting going at this point. Deel
Speaker 1: head Um are already lent. He'd lent like a hundred
Speaker 1: thousand dollars to start up. It's hard to believe that
Speaker 1: that that was what the shares were worth, given the
Speaker 1: fact that you know, just a few months later they
Speaker 1: attracted a bunch of investors. I think the value the
Speaker 1: firm at millions of dollars. So so yet that is
Speaker 1: the part that's a little fishy. The problem is that um,
Speaker 1: the I R S just doesn't have hasn't had the
Speaker 1: resources to go in and and argue with rich people
Speaker 1: about what the valuations of these things should be, so
Speaker 1: that they're just completely outgunned and they just just don't
Speaker 1: have the resources. So is this something that the I
Speaker 1: R S is looking at? I mean, again, it seems
Speaker 1: like a one off. It seems like a good trade.
Speaker 1: I mean, what are you hearing from the I R S. Well,
Speaker 1: there is, um the I R S has limited tools,
Speaker 1: Like I think the I R S has started to
Speaker 1: track this more at least and figure out exactly how many.
Speaker 1: Like six seven years ago, they had no idea how
Speaker 1: many of these accounts were out there. Now they actually
Speaker 1: have some rewarding requirements. So so they've they've They've started
Speaker 1: to compile some data. What what the real forum that
Speaker 1: I'm watching is Congress, because um, there's a chance that
Speaker 1: Congress could um try to rein these in by saying
Speaker 1: okay over a certain limit, a roth Ira is no
Speaker 1: longer no longer avoids taxes and tries to force some
Speaker 1: of these back onto the tax books. I just want
Speaker 1: to point out, Ben, if you uptake this story. So
Speaker 1: uh So, Peter Teal partnered with others to start PayPal.
Speaker 1: Elon Musk was one of those others, right, And I
Speaker 1: remember back in this is when they were valuing the
Speaker 1: shares at a cent. Elon Musk bought a million dollar
Speaker 1: McLaren F one supercar at the time with his with
Speaker 1: his PayPal riches, So there were already some people that
Speaker 1: were giving the business a fair value because there were
Speaker 1: only sixty two of those cars in the world and
Speaker 1: he got one somehow. You knew that, Matt. Yeah, you
Speaker 1: tell everything to that, McLaren. All right, Ben, thanks so
Speaker 1: much for that. We appreciated. Ben Stephen, personal finance editor
Speaker 1: for Bloomberg Musical. Alright, Matt, let's talk technology here. We
Speaker 1: know we've it's kind of gotten a little bit under
Speaker 1: the radar in terms of performance as people have been
Speaker 1: rotating into some of the cyclical names on the reopening.
Speaker 1: But for me, for I kind of feel like you
Speaker 1: can't take your eye off the technology ball because that's
Speaker 1: the long term future in our next guest is an expert.
Speaker 1: Why do I say expert? Is I remember this guest
Speaker 1: when she was a young analyst as I was back
Speaker 1: at Pain Webber way back in the day. We're talking
Speaker 1: to eighties man, So we go way back. Erica Clark
Speaker 1: Technology Equity portfolio manager Jennison Associates, one of the best
Speaker 1: firms on the street for a long time. Erica, thanks
Speaker 1: so much for joining us here. Um, I know you
Speaker 1: don't remember, but again, we started way back in today
Speaker 1: at Pain Webber you were doing technology there, I was
Speaker 1: doing actually transportation, but Paul was wearing suspenders with slicked
Speaker 1: back hair. Absolutely, that was the day of Gordon Gecko,
Speaker 1: so we were doing that. Erica talked to us about
Speaker 1: your view of technology. Where should that be in the
Speaker 1: average investor's portfolio, because it had been such a driver
Speaker 1: for portfolios really since the financial crisis, But let's take
Speaker 1: a little bit of a back seat recently. Well, gosh,
Speaker 1: thanks so much for such a warm welcome. UM, I'm
Speaker 1: delayed to be chatting with you today. And you know,
Speaker 1: technology is really, I think the place to be. And
Speaker 1: what's interesting from my perspective is that every company has
Speaker 1: become a technology company, whether you're a transportation company, whether
Speaker 1: you're a consumer company. Every company has to use technology
Speaker 1: today to be relevant and disrupted in the marketplace. UM,
Speaker 1: and those that are not effectively using technology are not
Speaker 1: keeping up. And we see this time and time again,
Speaker 1: UM as we meet with companies that the companies that
Speaker 1: are really reaching out to use technology do tend to
Speaker 1: be share gainers and disruptors and have greater positioning in
Speaker 1: the marketplace relative to their peers. So UM Peter Oppenheimer
Speaker 1: last week, I think in a no doubt of Goldman
Speaker 1: Sachs said that this disinflationary secular trend that we've been
Speaker 1: watching for the past couple of decades has contributed to
Speaker 1: a concentration and narrow in a narrower group of these
Speaker 1: kind of must own stocks. We all know what they
Speaker 1: are right, and there was a similar group in the
Speaker 1: in the in the seventies with the nifty fifty UM,
Speaker 1: but that this kind of leadership might change if we
Speaker 1: see a secular change towards an inflationary environment. What do
Speaker 1: you think about that? Well, first, I would say I
Speaker 1: don't think that there has been any change in our
Speaker 1: belief that technology is the ultimate inflation fighter. And I
Speaker 1: think there's two real legs behind that. One is that
Speaker 1: technology does drastically improved productivity. It helps people do the
Speaker 1: things in their lives that they want to do more
Speaker 1: efficiently UM. And then secondly, I think that the cost
Speaker 1: side of the equation continues to be brought down by technology,
Speaker 1: whether it be just bring it down the cost of
Speaker 1: inputs or even labor. So for example, we've seen the
Speaker 1: elimination of the broker value in so many different sectors,
Speaker 1: whether it be buying a plane ticket, planning a trip,
Speaker 1: finding a taxi or getting a ride share UM, or
Speaker 1: even finding someone to do small jobs owns your house.
Speaker 1: You're able to really price those out using technology avenues UM,
Speaker 1: and that ultimately does bring down inflation. So, Erica, where
Speaker 1: are you and your team doing the most work here?
Speaker 1: Where do you find the most opportunities the most value
Speaker 1: in that text stack? Well, you mentioned before that there
Speaker 1: were the bigger caps names and then you know one,
Speaker 1: and how does that relate to some of the smaller names.
Speaker 1: I think it's better to look at the end markets
Speaker 1: and find opportunities there, and I would draw your attention
Speaker 1: to three that I think are particularly important. The number one,
Speaker 1: I would say would be artificial intelligence. And what that
Speaker 1: really is is looking at big realms of data and
Speaker 1: being able to quickly identify trends within those big realms
Speaker 1: of data. And that can be using everything from cybersecurity
Speaker 1: to identify security breaches to drug companies that are looking
Speaker 1: at trend is in data to find new drugs. UM.
Speaker 1: You've seen some of the big drug companies come up
Speaker 1: with drugs much much more quickly than they have in
Speaker 1: the past by using AI. So AI is artificial intelligence
Speaker 1: is one of the most important sectors to look at
Speaker 1: right now. I would say the second is e commerce.
Speaker 1: We're still at a very early phase and e commerce
Speaker 1: and all the digital payments associated with that and the
Speaker 1: advertising opportunities associate with e commerces. That's still a very
Speaker 1: big global opportunity with many companies position to do very
Speaker 1: well in that segment. And the third segment I would
Speaker 1: mention would be energy efficiency, not just utilities moving away
Speaker 1: from using coal to alternative energies, whether it be solar
Speaker 1: or hydrogen, but also the actual appliances, whether they're used
Speaker 1: in the home or in the office or in any
Speaker 1: kind of commercial space, moving to more efficient ways of
Speaker 1: using energy, to bring down ergy costs, by using sensors,
Speaker 1: by using robotics. These are the areas that we see
Speaker 1: as having the best long tails for growth over the
Speaker 1: next decade. Erica great to get your take on tech.
Speaker 1: Erica Clower is technology equity portfolio manager over at Jennison Associates.
Speaker 1: Talking to us about really the stocks I think that
Speaker 1: we all know and seemingly everyone owns and everyone thinks
Speaker 1: of when you when you talk about the finishing over
Speaker 1: the last nine months, though it's they've kind of fallen
Speaker 1: a little bit below the redar screens. People have been
Speaker 1: playing the reopening trade, but man, the long term growth
Speaker 1: story still there is. Erica said, yeah, absolutely great to
Speaker 1: get your take. Erica, thanks for joining us. Hoping get
Speaker 1: you back again. This is Bloomberg after the closed. Today
Speaker 1: the Federal Reserve will release the results of its stress tests,
Speaker 1: and you think about the financial crisis coming out of that.
Speaker 1: These were really really big deals and I think they're
Speaker 1: still kind of important because it goes to the issue
Speaker 1: of returning cash the shareholders, and these stress tests are
Speaker 1: are pretty important. So when we talk about anything on
Speaker 1: the banking front, we go to our expert. That's Alison Williams.
Speaker 1: She's in a senior banks analysts for Bloomberg Intelligence. He
Speaker 1: covers all the financials. She has for decades, both on
Speaker 1: for Bloomberg Intelligence and then before that Morgan Stanley Investment
Speaker 1: Management in New York, where she was an analyst there. Allison,
Speaker 1: what are the key things here that bank investors are
Speaker 1: looking for when the stress tests are released? Here for
Speaker 1: the clothes today, So the key thing we'll be looking
Speaker 1: for today along with um other investors and analysts. UM,
Speaker 1: are you know, what are the stressed capital losses in
Speaker 1: the test? So they these tests have evolved and UM
Speaker 1: basically what happens with the test now is UM the
Speaker 1: regulators look at what that stress capital losses, UH, you
Speaker 1: know sort of bucket is, so basically, how does your
Speaker 1: capital change from today to the worst point right? And
Speaker 1: then based on that they set a requirement and then
Speaker 1: as long as you meet that requirement, you can basically,
Speaker 1: you know, do as you like. So it's a lot
Speaker 1: different than in the previous test where the banks had
Speaker 1: to ask for a dividend and a very specific buyback program.
Speaker 1: And in fact, we already have buyback programs across several banks.
Speaker 1: So really what we learned today is, you know, will
Speaker 1: banks be able to execute on those programs? UM, and
Speaker 1: we may get you know, sort of a signal in
Speaker 1: terms of how much capital they can return from here.
Speaker 1: How much that was gonna be my question? How much
Speaker 1: do we expect? I think I saw a number on
Speaker 1: a hundred sixty billion dollars yesterday, Yeah, so I think
Speaker 1: um so. Arnold Cucuta, who covers the credit side of
Speaker 1: the banks UH, calculates about a hundred and fifty billion
Speaker 1: of excess capital um. When we look at that amount UM,
Speaker 1: we agree with his calculation obviously, but we would also
Speaker 1: note that when we look at what Dember, you can
Speaker 1: have disagreements' work is very good. We we can we
Speaker 1: can disagree, but we actually agree in this in this instance.
Speaker 1: So I think we agree on the access capital and
Speaker 1: I think we also agree that if you look at
Speaker 1: the December tests, UM, you know, Goldman performed much better
Speaker 1: in that test. Morgan Stanley perform much better in that test.
Speaker 1: This test is going to look a bit more like
Speaker 1: that test in the sense that we're going to be
Speaker 1: much it's it's a much harsher test of things like
Speaker 1: commercial real estate and credit cards. So that's that's not
Speaker 1: sort of where those banks are focused. And if we
Speaker 1: do mirror that test, Goldman, Sachs and Morgan Stanley are
Speaker 1: both going to see their UM you know, requirement drop
Speaker 1: and so they should be able to return capital shareholders.
Speaker 1: And and again, so Arnold and I aren't the only
Speaker 1: ones thinking this. I think a lot of people are
Speaker 1: expecting Goldman to get some relief, and so if they don't,
Speaker 1: that would obviously be a negative surprise. And and by
Speaker 1: the way, Goldman and Morgan Stanley should both get relieved.
Speaker 1: It's just a little bit more critical for Goldman because
Speaker 1: Morgan Stanley has much more excess capital. So elsewhere are
Speaker 1: you know, dividend yields now for some of these big
Speaker 1: banks and where do you think they should be? So
Speaker 1: that's a great question because we really think that, um,
Speaker 1: you know, Bank of America is sort of going to
Speaker 1: set the standard, if you will, going forward. So Ever,
Speaker 1: since the Global financial crisis, we've had banks sort of
Speaker 1: marching up their dividends and you know, someone like Wells
Speaker 1: Fargo had gotten to sort of payout right, and that
Speaker 1: was similar to what we saw prior to the Global
Speaker 1: financial crisis. However, Bank of America said, you know, we're
Speaker 1: gonna walk up our dividends, but we never want to
Speaker 1: cut our dividends again. Uh, you know, and we've done
Speaker 1: the work in UM. Dividend payout looks to us like
Speaker 1: something that's you know, on the safer side of things.
Speaker 1: And what we saw on this UM pandemic, we did
Speaker 1: see limiting of dividends and we did see Wells Fargo
Speaker 1: have to cut their dividend. As the fed UM basically
Speaker 1: set a precedent by saying you know what and until,
Speaker 1: you know, until things get better. We appreciate that you've
Speaker 1: cut the buybacks, but we also want you to limit
Speaker 1: your payout too for quarter trailing earnings. So Wells Fargo
Speaker 1: had to cut UM, and so I think and a
Speaker 1: lot of regionals. You know, it was also a little
Speaker 1: bit of a nail bier, but with all the stimulus
Speaker 1: and the fast recovery, things turned out great. But we
Speaker 1: think that banks are going to sort of factor this
Speaker 1: into their forward thinking in terms of, you know, no
Speaker 1: one wants to be in a position to cut their dividend,
Speaker 1: and so we do expect Wells Fargo is gonna have
Speaker 1: the biggest increase, right but they're coming from you know,
Speaker 1: sort of their cut levels, so they're still catching up
Speaker 1: a little bit. So still healthy dividend deeald Um. You
Speaker 1: know city group we think could could have a three
Speaker 1: percent yields um. You know some that's sort of similar
Speaker 1: to that's basically where they are today. Um. We don't
Speaker 1: think that's going to change much. JP Morgan City smaller
Speaker 1: increases UM Morgan Staion, Goldman Sachs. Maybe walking it up
Speaker 1: a little bit UM to get closer to that, you know,
Speaker 1: to Jewish percent level. JP Morgan, by the way, is
Speaker 1: the only bank that's a little bit over that um.
Speaker 1: And we expect again just sort of a nudge up there.
Speaker 1: Now prevalent are buy backs in the banking industry compared
Speaker 1: to other others. And I noticed that, you know, share
Speaker 1: buy backs for the overall market hit a high I
Speaker 1: think two eighteen, but they've come down substantially since then.
Speaker 1: Does that bounce back up after this? So keep in
Speaker 1: mind that these banks um basically we're very conservative with
Speaker 1: capital um. Again, we talked about sort of the plausas
Speaker 1: during the pandemic, so they have access and so and
Speaker 1: and also at least, you know, the bigger banks that
Speaker 1: I cover somewhat limited in their acquisitions. You know, they
Speaker 1: they because of their deposit bases, they can't go out
Speaker 1: and by other depository institutions they have done things like
Speaker 1: by asset management and the like. But we do expect
Speaker 1: that payouts for the big banks, the big universal banks
Speaker 1: that cover, are going to exceed a hundred percent for
Speaker 1: a period of time as they're working down some of
Speaker 1: that excess that they've built up. I would say that again,
Speaker 1: a difference in this year's test is that a lot
Speaker 1: of regionals don't have to participate, but we do expect
Speaker 1: those regionals to pay over again, be a little bit
Speaker 1: more cautious. On the dividend side, UM Herman Chan has
Speaker 1: said that he expects the third to increase their dividend,
Speaker 1: but maybe not anyone else. And then on the trust
Speaker 1: banks covered by Paul Goberg, he's also looking for over
Speaker 1: a dent capital return. So I think investors are are
Speaker 1: are pretty bolish looking at the year ahead. But by
Speaker 1: the way, do you keep your eye on European banks
Speaker 1: because it's been a hot topic over the last few
Speaker 1: weeks for investors, and you know, the idea is that
Speaker 1: they're going to raise payouts as well, which could bring
Speaker 1: them close are to UM the kind of games we've
Speaker 1: seen for US banks. But I look today at UH
Speaker 1: share price to book value, and US banks are trading it.
Speaker 1: You know, European banks still six, right, and so I
Speaker 1: think UM so so again, the banks obviously in the
Speaker 1: US have done very well. UM City Group is still
Speaker 1: trading below book values, so we expect they're gonna skew
Speaker 1: more towards UM buy backs. UM in general more towards
Speaker 1: buy backs. But on the Europeans. I would say so
Speaker 1: two key things. So one, what's interesting in the stress
Speaker 1: test this year, It's going to be the first time
Speaker 1: that banks like Credit Suite and Deutsche Bank don't have
Speaker 1: to worry about a qualitative objective and so that's interesting
Speaker 1: because we've had articles issues at Deutsche Bank. So I
Speaker 1: think they're breathing as of release that they don't it's
Speaker 1: an incremental risk, but one they don't have to worry about,
Speaker 1: all right. Of course they have other issues as well.
Speaker 1: You mentioned Arch and Credit Suites. UH is definitely among
Speaker 1: the most read stories every day here in Europe. Allison Williams,
Speaker 1: Senior bank analyst. This is Bloomberg. Thanks for listening to
Speaker 1: the Bloomberg Markets podcast. You can subscribe and listen to
Speaker 1: interviews of Apple Podcasts or whatever podcast platform you prefer.
Speaker 1: I'm Matt Miller. I'm on Twitter at Matt Miller three
Speaker 1: and on Fall Sweeney I'm on Twitter at pt Sweeney.
Speaker 1: Before the podcast, you can always catch us worldwide at
Speaker 1: Bloomberg Radio.