1 00:00:00,760 --> 00:00:04,040 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 2 00:00:04,040 --> 00:00:06,920 Speaker 1: my co host Matt Miller. Every business day, we bring 3 00:00:06,960 --> 00:00:11,520 Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along 4 00:00:11,520 --> 00:00:15,560 Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast 5 00:00:15,600 --> 00:00:18,439 Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and 6 00:00:18,480 --> 00:00:21,680 Speaker 1: at Bloomberg dot com slash podcast. Let's check in with 7 00:00:21,800 --> 00:00:26,599 Speaker 1: Ira Jersey, chief US interest rate strategist for Bloomberg Intelligence. 8 00:00:26,880 --> 00:00:30,040 Speaker 1: So again, Ira, about all all I know about your business? 9 00:00:30,120 --> 00:00:32,159 Speaker 1: I can sum up and believe me, I don't want 10 00:00:32,200 --> 00:00:34,120 Speaker 1: to know anymore. I can sum up in one function 11 00:00:34,280 --> 00:00:38,080 Speaker 1: WI RP and all I know is the markets tell 12 00:00:38,120 --> 00:00:40,519 Speaker 1: me that rates are going to peak in May and 13 00:00:40,560 --> 00:00:43,839 Speaker 1: then start going down. Are we going to hear anything 14 00:00:43,880 --> 00:00:46,400 Speaker 1: like that from FED Chairman J Pale tomorrow? Well, I 15 00:00:47,159 --> 00:00:50,600 Speaker 1: don't think so. I think actually Jay Powell will probably say, 16 00:00:50,640 --> 00:00:52,800 Speaker 1: you know, we're still in inflation fighting mode. We're going 17 00:00:52,840 --> 00:00:54,960 Speaker 1: to you know, hike one more time, and we're going 18 00:00:55,000 --> 00:00:59,040 Speaker 1: to let the data guide us going forward. So so 19 00:00:59,080 --> 00:01:01,000 Speaker 1: I think he's going to try to say that, Look, 20 00:01:01,280 --> 00:01:03,920 Speaker 1: unless the unemployment rate goes up or inflation comes down 21 00:01:03,960 --> 00:01:05,760 Speaker 1: a lot we're not going to be cutting interest rates. 22 00:01:05,760 --> 00:01:09,000 Speaker 1: I think the financial market anks that we've seen over 23 00:01:09,040 --> 00:01:12,440 Speaker 1: the last ten days or so is really what's what's 24 00:01:12,520 --> 00:01:14,480 Speaker 1: driving the market to think that the Fed's going to 25 00:01:14,520 --> 00:01:17,120 Speaker 1: wind up easing monetary policy a lot earlier than it 26 00:01:17,160 --> 00:01:19,880 Speaker 1: was thinking just two or three weeks ago, and really 27 00:01:20,200 --> 00:01:22,800 Speaker 1: not much has changed with the underlying economy. I think 28 00:01:22,840 --> 00:01:25,479 Speaker 1: just the markets pricing in the risk that that will 29 00:01:25,520 --> 00:01:28,480 Speaker 1: be contagient from what's going on with the banking sector. 30 00:01:29,080 --> 00:01:31,280 Speaker 1: I a couple of months ago, you came onto the 31 00:01:31,319 --> 00:01:33,880 Speaker 1: show and Ted and said that there was a cap 32 00:01:33,959 --> 00:01:36,520 Speaker 1: on yield, especially on the front end of the curve, 33 00:01:36,560 --> 00:01:39,720 Speaker 1: because rate cuts were being priced in. Are rate cuts 34 00:01:39,800 --> 00:01:43,000 Speaker 1: still being priced in? Yeah, so so we're we're cutting. 35 00:01:43,480 --> 00:01:47,039 Speaker 1: We're actually pricing for a few interest rate cuts, at 36 00:01:47,120 --> 00:01:49,080 Speaker 1: least two interest rate cuts before the end of the year. 37 00:01:49,960 --> 00:01:52,160 Speaker 1: And I think that you know that that's going to 38 00:01:52,560 --> 00:01:54,360 Speaker 1: that's starting to be priced out now right. Some of 39 00:01:54,400 --> 00:01:56,120 Speaker 1: the market acction that we've seen today, I think with 40 00:01:56,160 --> 00:02:00,800 Speaker 1: some of the more explicit protection for the positors that 41 00:02:01,120 --> 00:02:03,320 Speaker 1: governments are doing, the fact that we've tried to work 42 00:02:03,320 --> 00:02:06,279 Speaker 1: out the credit suee situation, all of those things are 43 00:02:06,400 --> 00:02:09,280 Speaker 1: making it the markets kind of reprice the cuts that 44 00:02:09,320 --> 00:02:11,920 Speaker 1: were priced in UM. But but the you know, we 45 00:02:11,960 --> 00:02:13,680 Speaker 1: still are going to price in cuts, right because at 46 00:02:13,680 --> 00:02:16,799 Speaker 1: some point in the near future. UM. I still think 47 00:02:16,840 --> 00:02:19,360 Speaker 1: that it's pretty likely and you know, we've thought this 48 00:02:19,400 --> 00:02:22,720 Speaker 1: and this is only changed incrementally over the last week. UM. 49 00:02:22,880 --> 00:02:24,480 Speaker 1: Is that is that the Fed's gonna hike one or 50 00:02:24,480 --> 00:02:25,920 Speaker 1: two more times, and then they're going to and then 51 00:02:25,919 --> 00:02:28,440 Speaker 1: they're going to pause, and then more than likely the 52 00:02:28,480 --> 00:02:30,920 Speaker 1: next move is going to be a cut. The bigger question, 53 00:02:31,080 --> 00:02:35,840 Speaker 1: I think is when will that first cut start, When 54 00:02:35,840 --> 00:02:38,560 Speaker 1: will that first cup be and then the magnitude and 55 00:02:38,720 --> 00:02:42,880 Speaker 1: pace of cuts thereafter, And the market is you know, 56 00:02:43,160 --> 00:02:47,079 Speaker 1: basically had priced before all of this financial market turmoil 57 00:02:47,560 --> 00:02:51,200 Speaker 1: um UM had been pricing basically very slow pace of 58 00:02:51,200 --> 00:02:54,320 Speaker 1: cuts in twenty twenty four. UM. Now I think that 59 00:02:54,320 --> 00:02:56,839 Speaker 1: that was always unlikely because when the Fed starts to cut, 60 00:02:56,840 --> 00:02:59,160 Speaker 1: they're cutting because there's a there's usually a problem in 61 00:02:59,200 --> 00:03:04,200 Speaker 1: the economy, and and they'll cut more aggressively. So the yeah, 62 00:03:04,200 --> 00:03:06,280 Speaker 1: the market is pricing for cuts. It's actually pricing for 63 00:03:06,280 --> 00:03:09,040 Speaker 1: cuts in the second half this year. I think though 64 00:03:09,320 --> 00:03:11,120 Speaker 1: eventually those are going to be priced out in the 65 00:03:11,440 --> 00:03:14,440 Speaker 1: next week or so, and I think that that could 66 00:03:14,440 --> 00:03:20,120 Speaker 1: easily start tomorrow with J Powell's press conference And Ira, 67 00:03:20,240 --> 00:03:22,960 Speaker 1: do you think FED Chairman J Powe will address the 68 00:03:23,480 --> 00:03:25,880 Speaker 1: banking turmoil which is a phrase I've been using, I've 69 00:03:25,919 --> 00:03:28,520 Speaker 1: been avoiding crisis. Do you think he will address it 70 00:03:28,639 --> 00:03:31,160 Speaker 1: or will have to be maybe response to some questions 71 00:03:31,280 --> 00:03:33,640 Speaker 1: or how do you think he need he deals with this? Yeah, 72 00:03:33,639 --> 00:03:36,560 Speaker 1: I think turmoils the right word for it. Certainly it's 73 00:03:36,560 --> 00:03:39,360 Speaker 1: not yet a crisis, right and the FED and other 74 00:03:39,400 --> 00:03:42,960 Speaker 1: policymakers are working hard to avoid it becoming a crisis. 75 00:03:43,760 --> 00:03:46,800 Speaker 1: But yeah, J Powell definitely has to address that, and 76 00:03:46,840 --> 00:03:48,640 Speaker 1: I think the way that that they'll couch it, and 77 00:03:48,680 --> 00:03:50,920 Speaker 1: I think that there will be something in the post 78 00:03:50,960 --> 00:03:53,440 Speaker 1: meeting statement and then he'll be a little bit more detailed. 79 00:03:53,720 --> 00:03:56,280 Speaker 1: In his opening remarks at the press conference, half an 80 00:03:56,280 --> 00:03:59,720 Speaker 1: hour later, is saying we hiked interest rates by twenty 81 00:03:59,720 --> 00:04:02,560 Speaker 1: five basis points because inflation is still a problem. We 82 00:04:02,640 --> 00:04:06,400 Speaker 1: are aware that the banking sector has some issues. We 83 00:04:06,480 --> 00:04:09,480 Speaker 1: are using our liquidity and funding facilities to the best 84 00:04:09,480 --> 00:04:13,120 Speaker 1: of our ability, and we're using our credential regulatory authority 85 00:04:13,480 --> 00:04:16,120 Speaker 1: in order to, you know, make sure that the financial 86 00:04:16,160 --> 00:04:18,080 Speaker 1: sector is as safe and sound as we can make it. 87 00:04:18,320 --> 00:04:20,440 Speaker 1: So I think that he'll try to different connect the 88 00:04:20,520 --> 00:04:25,200 Speaker 1: monetary policy and the and the banking regulator and funding policy. 89 00:04:25,279 --> 00:04:27,000 Speaker 1: All right, we're going to head down to Washington, DC. 90 00:04:27,160 --> 00:04:29,280 Speaker 1: We thank you though for your comments here today our 91 00:04:29,440 --> 00:04:34,200 Speaker 1: Jersey chief US Interest Rate Strategists. You're listening to the 92 00:04:34,279 --> 00:04:38,240 Speaker 1: team Ken's our live program Bloomberg Markets weekdays at ten am, 93 00:04:38,240 --> 00:04:41,360 Speaker 1: easting on Bloomberg dot com, the I Heart Radio app, 94 00:04:41,440 --> 00:04:44,359 Speaker 1: and the Bloomberg Business app, or listen on demand wherever 95 00:04:44,440 --> 00:04:49,560 Speaker 1: you get your podcast. Well, how's this for a headline 96 00:04:49,800 --> 00:04:54,320 Speaker 1: on the Bloomberg terminal hike. You lose pause, you lose more. 97 00:04:54,680 --> 00:04:58,160 Speaker 1: That's twenty five basis point FED call, and the author 98 00:04:58,200 --> 00:05:01,800 Speaker 1: of that is Anna Wong, Chief us as for Bloomberg Economics, 99 00:05:02,040 --> 00:05:04,800 Speaker 1: and give us a sense of kind of the tight 100 00:05:04,920 --> 00:05:09,000 Speaker 1: rope this FED is walking right now as it begins. 101 00:05:08,839 --> 00:05:13,040 Speaker 1: It's it's two day meeting, right So on one hand, 102 00:05:13,240 --> 00:05:16,920 Speaker 1: the FED has a very compelling case to pause, as 103 00:05:17,000 --> 00:05:21,280 Speaker 1: many people want them to because you know, the financial market, 104 00:05:21,279 --> 00:05:23,240 Speaker 1: it's very skittish. We're still in the middle of the 105 00:05:23,279 --> 00:05:25,880 Speaker 1: banking crisis. You don't know which shoe is going to 106 00:05:25,960 --> 00:05:29,840 Speaker 1: drop tomorrow. On the other hand, inflation is still at 107 00:05:29,920 --> 00:05:33,120 Speaker 1: forty year high, and in fact, inflation and in this 108 00:05:33,200 --> 00:05:36,880 Speaker 1: current you know, banking crisis is the highest in any 109 00:05:36,880 --> 00:05:39,599 Speaker 1: other banking crisis in the last one hundred and forty 110 00:05:39,680 --> 00:05:42,480 Speaker 1: years we found. So there's still a very good case 111 00:05:42,520 --> 00:05:45,080 Speaker 1: to continue hiking. This is why it will be a 112 00:05:45,160 --> 00:05:49,200 Speaker 1: very very tough decision tomorrow. And you use the term 113 00:05:49,200 --> 00:05:51,719 Speaker 1: banking crisis, and I've been hesitant to use that term. 114 00:05:51,800 --> 00:05:53,920 Speaker 1: I'm not sure what it is. It's it's not two 115 00:05:53,960 --> 00:05:57,360 Speaker 1: thousand and eight. To me, give us a sense, your 116 00:05:57,360 --> 00:06:00,880 Speaker 1: sense as a trained economist, how serious is this that 117 00:06:01,080 --> 00:06:04,440 Speaker 1: what we've experienced over the past couple of weeks. Well, 118 00:06:04,480 --> 00:06:07,839 Speaker 1: I so, first of all, I think in the compared 119 00:06:07,880 --> 00:06:12,320 Speaker 1: to all the other banking crisis, which is defined as 120 00:06:12,920 --> 00:06:16,080 Speaker 1: a bank run that could lead to closure, merging, or 121 00:06:16,160 --> 00:06:20,560 Speaker 1: take over one or more financial institutions, well, I think 122 00:06:20,600 --> 00:06:24,640 Speaker 1: this bank run that we're seeing is not as crazy 123 00:06:24,760 --> 00:06:28,839 Speaker 1: as the past nine bank runs in a banking crisis 124 00:06:28,880 --> 00:06:30,919 Speaker 1: in the past one hundred and forty years. But it 125 00:06:30,960 --> 00:06:33,960 Speaker 1: could get worse. I'm not saying it won't, but but 126 00:06:34,240 --> 00:06:38,000 Speaker 1: I think that, you know, the economic impact of the 127 00:06:38,040 --> 00:06:42,840 Speaker 1: current crisis, I'm our predictions is that it is not 128 00:06:42,920 --> 00:06:46,560 Speaker 1: as severe as the previous ones. Well, Anna Paul Sweeney 129 00:06:46,560 --> 00:06:48,480 Speaker 1: mentioned this earlier in the show. You made a pretty 130 00:06:48,520 --> 00:06:51,360 Speaker 1: exciting call about five percent of a terminal rate. Then 131 00:06:51,440 --> 00:06:54,159 Speaker 1: we had Jamie Diamond talk about a six percent terminal rate, 132 00:06:54,680 --> 00:06:57,120 Speaker 1: which kind of got the markets excited as well. As 133 00:06:57,120 --> 00:06:59,520 Speaker 1: we talk about this banking termoil, is there a possibility 134 00:06:59,560 --> 00:07:03,440 Speaker 1: that the term all weight goes in the other directions? Well, 135 00:07:03,480 --> 00:07:07,240 Speaker 1: you know, the terminal rate was going to five point 136 00:07:07,279 --> 00:07:11,040 Speaker 1: seven five before the the collapse of the SVP. It 137 00:07:11,080 --> 00:07:13,600 Speaker 1: was the heading towards the direction of six, right, But 138 00:07:13,720 --> 00:07:17,800 Speaker 1: now it's fallen back to just right below five. And 139 00:07:18,080 --> 00:07:21,160 Speaker 1: I think that given our prediction of what the fight 140 00:07:21,200 --> 00:07:24,240 Speaker 1: would do, which is another hike of twenty five pips 141 00:07:24,520 --> 00:07:27,480 Speaker 1: so that they get determined the FI funds rate to 142 00:07:27,560 --> 00:07:30,680 Speaker 1: five percent, maybe there will signal in the SEP just 143 00:07:30,840 --> 00:07:33,640 Speaker 1: in other twenty five pips and then that would get 144 00:07:33,720 --> 00:07:36,560 Speaker 1: us to five point two five in May and perhaps 145 00:07:36,640 --> 00:07:39,720 Speaker 1: pause and hold at that level in the rest of 146 00:07:39,720 --> 00:07:42,400 Speaker 1: the year. And where are we in terms of the 147 00:07:42,520 --> 00:07:48,280 Speaker 1: discussion about the economy and recession. Where where do you 148 00:07:48,280 --> 00:07:52,760 Speaker 1: think that argument stands right now? I think that this 149 00:07:52,920 --> 00:07:57,000 Speaker 1: is the times where the model is kind of syndicating themselves. 150 00:07:57,280 --> 00:08:01,720 Speaker 1: The model of one hundred percent recession can basically the 151 00:08:01,800 --> 00:08:06,120 Speaker 1: model takes past recession as inputs, and in the past recessions, 152 00:08:05,560 --> 00:08:10,080 Speaker 1: whenever the FED raises rates this rapidly, something breaks, and 153 00:08:10,120 --> 00:08:13,240 Speaker 1: the models are telling us something will break before September. 154 00:08:13,640 --> 00:08:16,880 Speaker 1: So we just updated our models. Those those things are 155 00:08:16,880 --> 00:08:20,160 Speaker 1: still telling us that a recession will hit before by 156 00:08:20,200 --> 00:08:23,680 Speaker 1: the time of September this year. Anna, there was a 157 00:08:23,720 --> 00:08:26,480 Speaker 1: great chart on the Bloom Interminal about the financial conditions 158 00:08:26,520 --> 00:08:29,320 Speaker 1: index and how is in a restrictive territory. But I 159 00:08:29,320 --> 00:08:33,160 Speaker 1: think of like eighty three basis points worth of restrictive territory, 160 00:08:33,640 --> 00:08:37,280 Speaker 1: and I'm wondering how much of this kind of chaos, 161 00:08:37,320 --> 00:08:40,600 Speaker 1: which from what I understand, the consensus consensus is that 162 00:08:40,640 --> 00:08:45,920 Speaker 1: it's idiosyncratic, is actually an overreaction as opposed to perhaps 163 00:08:46,040 --> 00:08:50,160 Speaker 1: doing the job of the FED for the FED. Well, 164 00:08:50,160 --> 00:08:52,760 Speaker 1: you know, this gets back to the question of what 165 00:08:52,920 --> 00:08:57,600 Speaker 1: is financial conditions? And remember a month ago everybody was 166 00:08:57,640 --> 00:09:02,640 Speaker 1: saying why why why, Powell saying that financial conditions tightened 167 00:09:02,800 --> 00:09:07,600 Speaker 1: when the financial Conditions index on the terminal, and as 168 00:09:07,679 --> 00:09:11,640 Speaker 1: do other indexes of their show that it has eased. Well. 169 00:09:11,920 --> 00:09:14,400 Speaker 1: One thing that the Food pays a lot of attention 170 00:09:14,480 --> 00:09:19,000 Speaker 1: to is credit lending standards, right, and this is the 171 00:09:19,080 --> 00:09:21,600 Speaker 1: kind of channel that most people are talking about now 172 00:09:21,640 --> 00:09:25,480 Speaker 1: with this banking crisis and how they could cause the 173 00:09:25,559 --> 00:09:29,760 Speaker 1: economy to contract. But the thing is bank lending has 174 00:09:29,840 --> 00:09:34,920 Speaker 1: been declining and contracting very sharp even before the banking 175 00:09:34,920 --> 00:09:39,120 Speaker 1: crisis because of the rise in interest rate. So I 176 00:09:39,200 --> 00:09:42,080 Speaker 1: think to a degree when people say financial conditions is 177 00:09:42,080 --> 00:09:46,440 Speaker 1: tightening right now and the economy is going to contract 178 00:09:46,520 --> 00:09:49,920 Speaker 1: more deeply, well to a very much high degree, that 179 00:09:50,160 --> 00:09:52,760 Speaker 1: already kind of happened. It was in training the last 180 00:09:52,760 --> 00:09:56,160 Speaker 1: six months before the banking crisis. So I think it's 181 00:09:56,280 --> 00:09:59,280 Speaker 1: kind of an overreaction right now in that sense. And 182 00:09:59,559 --> 00:10:04,160 Speaker 1: I know economists and FED watchers really parse the words 183 00:10:04,320 --> 00:10:06,559 Speaker 1: of the FED chairman during his press conference, his or 184 00:10:06,559 --> 00:10:09,080 Speaker 1: her pressed conference. What are you really going to be 185 00:10:09,120 --> 00:10:11,960 Speaker 1: focused on tomorrow when we do get to Q and 186 00:10:12,000 --> 00:10:15,040 Speaker 1: A with FED Chairman Powell, I will be focused on 187 00:10:16,000 --> 00:10:19,959 Speaker 1: whether he draws the line between monitor policy and financial 188 00:10:20,000 --> 00:10:24,920 Speaker 1: stability tools. I think he will channel Christine Lagarde and 189 00:10:25,040 --> 00:10:29,000 Speaker 1: say that inflation is still too high. We've got to 190 00:10:29,160 --> 00:10:33,360 Speaker 1: use interest rate policy to fight inflation financial stability. We 191 00:10:33,400 --> 00:10:37,400 Speaker 1: have enough tools to support them, using our discount window 192 00:10:37,480 --> 00:10:40,319 Speaker 1: and all the liquidity tools that we have developed over 193 00:10:40,360 --> 00:10:43,200 Speaker 1: the past you know, fifteen years. We know we have 194 00:10:43,320 --> 00:10:46,160 Speaker 1: confidence in the banking crisis. So he has to come 195 00:10:46,200 --> 00:10:49,320 Speaker 1: out with a lot of confidence about the US banking 196 00:10:49,360 --> 00:10:52,079 Speaker 1: crisis so that people are not further spooked, but at 197 00:10:52,080 --> 00:10:55,079 Speaker 1: the same time show that the FED is serious about 198 00:10:55,120 --> 00:10:58,920 Speaker 1: fighting inflation and a thirty seconds here, do you think 199 00:10:58,960 --> 00:11:02,520 Speaker 1: that the chair will speak about the possibility of pausing 200 00:11:02,760 --> 00:11:06,320 Speaker 1: quantitative tightening or anything with that regard to bond purchases 201 00:11:06,600 --> 00:11:11,440 Speaker 1: or selling. No, but I think he will be very 202 00:11:11,480 --> 00:11:15,079 Speaker 1: clear that the usage of account window and the expansion 203 00:11:15,120 --> 00:11:17,360 Speaker 1: of veil and sheets through with his account window is 204 00:11:17,440 --> 00:11:21,880 Speaker 1: not saying that the QT is effectively dead. But then 205 00:11:21,920 --> 00:11:25,760 Speaker 1: they will continue to monitor the situation of reserves demand 206 00:11:25,920 --> 00:11:29,400 Speaker 1: to make sure that there wouldn't be some discontinuous fights. 207 00:11:30,600 --> 00:11:35,480 Speaker 1: Thirty seconds here, what would be a mistake by pal tomorrow? Anna, 208 00:11:35,600 --> 00:11:38,320 Speaker 1: I think a mistake it would be if he paused 209 00:11:38,600 --> 00:11:43,839 Speaker 1: great hikes and also to signal imminent pause. All right, 210 00:11:43,920 --> 00:11:47,160 Speaker 1: great stuff, Anna Wong Chief, you as economists Bloomberg Economics. 211 00:11:47,160 --> 00:11:52,080 Speaker 1: I love this academic background BA and economics and statistics 212 00:11:52,080 --> 00:11:54,560 Speaker 1: from Berkeley. I mean, who does that? And then she 213 00:11:54,720 --> 00:11:57,000 Speaker 1: doubles down on this whole thing. It's a PhD in 214 00:11:57,040 --> 00:12:01,240 Speaker 1: economics from the University of Chicago. It's Matthey. It is 215 00:12:01,320 --> 00:12:04,240 Speaker 1: It's very Matthey. But that's why, that's why she's the chief. 216 00:12:04,280 --> 00:12:07,160 Speaker 1: He's economist of Bloomberg Economic Yeah, and she was, you know, 217 00:12:07,240 --> 00:12:09,240 Speaker 1: she's been in the government and you know, so she 218 00:12:09,280 --> 00:12:12,280 Speaker 1: knows how this whole thing works. Former FOOO Reserve Principal 219 00:12:12,320 --> 00:12:14,680 Speaker 1: economist for five years, so she was at the FED. 220 00:12:15,040 --> 00:12:18,240 Speaker 1: She knows what levers get pulled, and she knows what 221 00:12:18,360 --> 00:12:21,439 Speaker 1: data points are really important to this federal feeder reservant, 222 00:12:21,440 --> 00:12:24,000 Speaker 1: to this FED chairman. So we love having access to 223 00:12:24,280 --> 00:12:26,360 Speaker 1: the great mind of Annawank Chief. He as economist for 224 00:12:26,400 --> 00:12:30,440 Speaker 1: Bloomberg Economics. She's based down in Washington, DC. You're listening 225 00:12:30,480 --> 00:12:34,000 Speaker 1: to the tape cancer our live program Bloomberg Markets weekdays 226 00:12:34,000 --> 00:12:37,280 Speaker 1: at ten am Eastern on Bloomberg Radio, the tuning half, 227 00:12:37,320 --> 00:12:40,160 Speaker 1: Bloomberg dot Com, and the Bloomberg Business alf You can 228 00:12:40,200 --> 00:12:43,440 Speaker 1: also listen live on Amazon Alexa from our flagship New 229 00:12:43,520 --> 00:12:49,480 Speaker 1: York station. Just say Alexa play Bloomberg eleven thirty. All right, 230 00:12:49,520 --> 00:12:52,280 Speaker 1: here's the conversation of the morning for me. Here's a guy, 231 00:12:52,559 --> 00:12:56,240 Speaker 1: Jerome Julius, senior credit analyst covers the European banks for 232 00:12:56,320 --> 00:12:58,839 Speaker 1: Bloomberg Intalent and she joined in twenty nineteen, which means 233 00:12:58,880 --> 00:13:00,800 Speaker 1: I did not hire him, but I you're really really 234 00:13:00,840 --> 00:13:03,640 Speaker 1: good things about him. You know, before Bloomberg, he was 235 00:13:03,640 --> 00:13:06,600 Speaker 1: at Merrill Lynch and Barkley's and you know, Fitch Ratings. 236 00:13:06,640 --> 00:13:09,480 Speaker 1: So he's been around the block a few times. And 237 00:13:09,520 --> 00:13:12,520 Speaker 1: he's gonna explain to me what is an eighty one 238 00:13:12,640 --> 00:13:14,960 Speaker 1: bond and why do I care about it? Because boy, 239 00:13:15,160 --> 00:13:16,920 Speaker 1: I'm hearing a lot about that in the context of 240 00:13:17,000 --> 00:13:21,720 Speaker 1: UBS's acquisition of Credit Swiss. So we welcome Drone Julius, Dron. 241 00:13:21,840 --> 00:13:24,520 Speaker 1: What do you got for us? Hi? Thanks, thank you 242 00:13:24,559 --> 00:13:30,040 Speaker 1: for inviting me along. Right, So at one bombs? What 243 00:13:30,679 --> 00:13:34,600 Speaker 1: are they? Eighty one? It stands for additional Tier one 244 00:13:34,880 --> 00:13:39,080 Speaker 1: and it's an instrument that's used by banks, mostly outside 245 00:13:39,080 --> 00:13:45,680 Speaker 1: of the US for the regulatory capital purposes. They are 246 00:13:45,720 --> 00:13:48,280 Speaker 1: the most junior type of bombs. And they said just 247 00:13:48,320 --> 00:13:54,160 Speaker 1: above Corman equity, so just above the shareholders, and they share. 248 00:13:54,200 --> 00:13:56,480 Speaker 1: They are a bit equity like they share with equity. 249 00:13:56,640 --> 00:14:00,440 Speaker 1: A couple of features that make them equity. They are 250 00:14:00,480 --> 00:14:03,160 Speaker 1: perpetual instruments, although the issue does have a call option 251 00:14:03,240 --> 00:14:08,520 Speaker 1: on all those bonds. They've got a discretionary coupon that 252 00:14:08,679 --> 00:14:12,120 Speaker 1: differs from pretty much every other fixed income instrument which 253 00:14:12,200 --> 00:14:15,679 Speaker 1: has a which have must pay coupons, right, and the 254 00:14:15,760 --> 00:14:19,520 Speaker 1: discretionary coupon is similar to a diffidend on a stock. 255 00:14:20,360 --> 00:14:23,720 Speaker 1: They've also got a principle most absorption language that means 256 00:14:23,720 --> 00:14:27,280 Speaker 1: that they have a certain triggers set in motion is activated, 257 00:14:27,440 --> 00:14:30,240 Speaker 1: than an investor could could lose all of its all 258 00:14:30,240 --> 00:14:33,520 Speaker 1: of its money. Um, so they're going a nutshell. Other 259 00:14:33,960 --> 00:14:37,720 Speaker 1: key features of an eighty one bond, it's it's a 260 00:14:37,760 --> 00:14:41,040 Speaker 1: big market. It started in twenty thirteen, and you know, 261 00:14:41,040 --> 00:14:44,440 Speaker 1: it's a ten about ten years ago, and I can't 262 00:14:44,440 --> 00:14:46,560 Speaker 1: remember talking about how much is outstanding, but it's pretty 263 00:14:46,640 --> 00:14:48,800 Speaker 1: much every bank in Europe and that's the area that 264 00:14:48,840 --> 00:14:51,040 Speaker 1: I did I focus on, has got some of those 265 00:14:51,040 --> 00:14:53,680 Speaker 1: instruments outstanding, some more than others. But it's it's a 266 00:14:53,680 --> 00:14:57,960 Speaker 1: big market. Well, then fold into us the idea or 267 00:14:57,960 --> 00:15:00,360 Speaker 1: folding the idea as you say that the Swiss eighty 268 00:15:00,440 --> 00:15:03,880 Speaker 1: one story is just that, a Swiss story. At the 269 00:15:04,000 --> 00:15:06,040 Speaker 1: end of the day, how are you seeing the read 270 00:15:06,120 --> 00:15:09,480 Speaker 1: through into whether or not people still want to touch 271 00:15:09,760 --> 00:15:15,960 Speaker 1: this type of bondum. So, so, what happens with Credit 272 00:15:16,040 --> 00:15:19,800 Speaker 1: Squiss is that the eighty one bombs issued by Credit 273 00:15:19,840 --> 00:15:24,640 Speaker 1: Suis have effectively been wiped out right, They've been written 274 00:15:24,880 --> 00:15:30,280 Speaker 1: down to zero, while the credit shareholders walked away with 275 00:15:31,080 --> 00:15:33,600 Speaker 1: three billion Swiss francs. No, that's not a lot of money, 276 00:15:34,280 --> 00:15:36,040 Speaker 1: but it's also much about the money. It's about the 277 00:15:36,120 --> 00:15:43,200 Speaker 1: principle that the claims hierarchy if your life has been abandoned, 278 00:15:43,240 --> 00:15:46,640 Speaker 1: has been turned all its heads, because normally you shouldn't 279 00:15:46,680 --> 00:15:51,680 Speaker 1: see shareholders with some recoveries while eighty one bombholders are 280 00:15:51,760 --> 00:15:55,080 Speaker 1: wiped out. And that's the huge controversy that you've seen 281 00:15:55,680 --> 00:15:59,560 Speaker 1: play out yesterday and for a long time to come. 282 00:15:59,680 --> 00:16:03,920 Speaker 1: I am now, what's the read across um. It's um, 283 00:16:04,440 --> 00:16:06,120 Speaker 1: you know, it's it's not it's not a perfect read, 284 00:16:06,120 --> 00:16:09,400 Speaker 1: of course, because Switzerland has got its own jurisdiction. It's 285 00:16:09,400 --> 00:16:14,520 Speaker 1: not part of the European Union. UM, the UK has 286 00:16:14,520 --> 00:16:19,000 Speaker 1: a different sort of set of rules again, but they're 287 00:16:19,000 --> 00:16:24,600 Speaker 1: all broadly similar and UM they're also bolved by the 288 00:16:24,680 --> 00:16:30,480 Speaker 1: same constituencies across the globe the eighty one bonds, so 289 00:16:31,400 --> 00:16:35,440 Speaker 1: there is certainly a reader course. UM. I think what 290 00:16:35,560 --> 00:16:39,240 Speaker 1: it has done is it has UM made eighty one 291 00:16:39,280 --> 00:16:45,560 Speaker 1: bond holders potential investors, UM wonder if they shouldn't require 292 00:16:46,000 --> 00:16:48,040 Speaker 1: or the amount of higher yields on US board. And 293 00:16:48,080 --> 00:16:51,400 Speaker 1: that's why you saw us everyones sell off yesterday. There's 294 00:16:51,400 --> 00:16:53,840 Speaker 1: been a bit of a recovery today, to be honest, 295 00:16:54,200 --> 00:16:58,520 Speaker 1: But yesterday, all of a sudden, both across UM, across 296 00:16:58,520 --> 00:17:02,080 Speaker 1: all currencies that every one boards, they they sort of 297 00:17:02,120 --> 00:17:06,160 Speaker 1: bye between four to eight points on on average. And 298 00:17:06,400 --> 00:17:09,760 Speaker 1: that really is a reflection of the fact that UM, 299 00:17:09,800 --> 00:17:11,840 Speaker 1: you know, all of some as they're come to realize 300 00:17:11,880 --> 00:17:14,680 Speaker 1: that in a similar situation worre to play out elsewhere, 301 00:17:15,440 --> 00:17:18,280 Speaker 1: they may end up with nothing, while share all of 302 00:17:18,359 --> 00:17:21,600 Speaker 1: us still gets some recovery. Yeah, if I were, you know, 303 00:17:22,119 --> 00:17:26,399 Speaker 1: an a one bondholder, I'd be upset too, but it 304 00:17:26,480 --> 00:17:28,439 Speaker 1: was in their perspective, so you know, shame on me, 305 00:17:28,520 --> 00:17:30,960 Speaker 1: I guess I don't know, So Jaron talk to us 306 00:17:31,000 --> 00:17:35,000 Speaker 1: about just the credit market for European banks in general 307 00:17:35,440 --> 00:17:39,040 Speaker 1: these days post Credit Swiss and you know the threat 308 00:17:39,040 --> 00:17:42,919 Speaker 1: of you know, are concerned about a recession Howard banks, 309 00:17:43,080 --> 00:17:48,080 Speaker 1: bonds trading in general these days. Well it's uh, you know, 310 00:17:48,240 --> 00:17:54,159 Speaker 1: everything is it's clearly a trading wide particularly well it's 311 00:17:54,160 --> 00:17:56,320 Speaker 1: all started with the Silicon Valley Bank grad that also 312 00:17:56,800 --> 00:18:00,800 Speaker 1: had its repercussions over in Europe, and that's also was 313 00:18:00,880 --> 00:18:05,480 Speaker 1: the trigger I think of the of the problems that 314 00:18:06,240 --> 00:18:09,320 Speaker 1: engulfed Credit Suiss. You're playing a little bank in Silicon 315 00:18:09,400 --> 00:18:14,879 Speaker 1: Valley for European credit wars, don't go down that route. Um, 316 00:18:16,320 --> 00:18:20,480 Speaker 1: people were looking around, Uh you know, are there any 317 00:18:20,480 --> 00:18:23,960 Speaker 1: other banks that have liquidity problems? And the really course 318 00:18:24,040 --> 00:18:28,480 Speaker 1: wasn't wasn't perfect because you know, Silicon Valley Bank, Uh, 319 00:18:28,520 --> 00:18:31,000 Speaker 1: you know, the key one of the key problems there 320 00:18:31,119 --> 00:18:34,000 Speaker 1: was this the unrelized gains on it's health. The majority 321 00:18:34,000 --> 00:18:38,600 Speaker 1: portfolio that didn't apply to Credit Swiss. It doesn't, of 322 00:18:38,600 --> 00:18:41,760 Speaker 1: course a large bomb portfolio, but the large majority of 323 00:18:41,800 --> 00:18:44,280 Speaker 1: that was in its training book, was already marked and market. 324 00:18:44,440 --> 00:18:46,240 Speaker 1: That wasn't the issue. The issue was the fact that 325 00:18:46,560 --> 00:18:51,160 Speaker 1: credit swees already had some liquidity problems in the fourth quarter, 326 00:18:51,240 --> 00:18:55,560 Speaker 1: there were huge outflows, and um, it's it's perhaps not 327 00:18:55,680 --> 00:19:00,200 Speaker 1: a surprise that if liquidity concerns come to the all 328 00:19:00,200 --> 00:19:02,840 Speaker 1: that's that's that inst this I started to get jittery 329 00:19:02,960 --> 00:19:08,760 Speaker 1: about about companies, about banks that have had liquid holes 330 00:19:08,760 --> 00:19:12,440 Speaker 1: in the past. So we had a fifty basis point 331 00:19:12,800 --> 00:19:15,080 Speaker 1: a hike from the ECB last week. We've got a 332 00:19:15,119 --> 00:19:19,280 Speaker 1: Bank of England decision this Friday, I believe, March twenty third, 333 00:19:19,280 --> 00:19:23,600 Speaker 1: eight am I believe for for that for those folks, 334 00:19:23,600 --> 00:19:27,720 Speaker 1: how well are the bond market or the bond holders 335 00:19:27,960 --> 00:19:31,240 Speaker 1: digesting about fifty basis point rate hike and what still 336 00:19:31,320 --> 00:19:36,560 Speaker 1: might be a very hawkish meeting and decision this Friday. Well, 337 00:19:36,680 --> 00:19:41,480 Speaker 1: I'm not an expert, uh, you know, the the central 338 00:19:41,520 --> 00:19:45,879 Speaker 1: bank rates, the policy rates and everything. Um, what I 339 00:19:45,920 --> 00:19:51,480 Speaker 1: would say is that in general, higher rates should be 340 00:19:51,520 --> 00:19:53,399 Speaker 1: a good thing for banks, right because until you know, 341 00:19:53,440 --> 00:19:56,239 Speaker 1: for the past decade, everybody was complaining about how low 342 00:19:56,359 --> 00:19:59,720 Speaker 1: rates were and how that depressed the returns that banks 343 00:19:59,760 --> 00:20:02,639 Speaker 1: were to make. So that's not finally changing. Rates are 344 00:20:02,640 --> 00:20:05,800 Speaker 1: going up, margins are going up. That interesting becomes going 345 00:20:05,840 --> 00:20:08,360 Speaker 1: up for the large majority of banks. But there are 346 00:20:08,359 --> 00:20:10,639 Speaker 1: some side effects and you know the unrealized games on 347 00:20:10,680 --> 00:20:15,720 Speaker 1: healthy maturity boomboogs is one of them. But overall that 348 00:20:15,920 --> 00:20:19,600 Speaker 1: interesting income should benefit from higher rates. The question mark is, 349 00:20:19,680 --> 00:20:23,879 Speaker 1: and I heard you rest referred to it before I 350 00:20:24,160 --> 00:20:27,600 Speaker 1: joined the call is what does that do to landing? 351 00:20:27,760 --> 00:20:31,960 Speaker 1: You know, what do to economy and to the UH 352 00:20:32,280 --> 00:20:34,800 Speaker 1: to long demands and the willing is also bank still 353 00:20:34,840 --> 00:20:36,639 Speaker 1: to land and that's you know that that is one 354 00:20:36,640 --> 00:20:39,000 Speaker 1: of the big announcewers. All right, John, thank you so 355 00:20:39,080 --> 00:20:41,680 Speaker 1: much for joining us. John Julius, he's a senior credit 356 00:20:41,680 --> 00:20:45,400 Speaker 1: analyst for the European banks at Bloomberg Intelligence based in London. 357 00:20:47,800 --> 00:20:51,200 Speaker 1: You're listening to the Team cancer a live program Bloomberg 358 00:20:51,280 --> 00:20:54,639 Speaker 1: Markets weekdays at ten am Eastern on Bloomberg dot com, 359 00:20:54,720 --> 00:20:57,320 Speaker 1: the I Heart Radio app, and the Bloomberg Business app. 360 00:20:57,400 --> 00:21:03,119 Speaker 1: We're listening on demand wherever you get your podcast. Clearly, 361 00:21:03,119 --> 00:21:06,160 Speaker 1: one of the lead stories for the last week plus 362 00:21:06,240 --> 00:21:10,320 Speaker 1: has been this UBS and credit Swiss situation, and we 363 00:21:10,440 --> 00:21:14,399 Speaker 1: just had Jerome Julius on from Bloomberg Intelligence. He follows 364 00:21:14,440 --> 00:21:17,240 Speaker 1: the credit side of it, and I note that Bloomberg 365 00:21:17,280 --> 00:21:20,480 Speaker 1: Intelligence is going to be hosting a webinar this Friday, 366 00:21:20,840 --> 00:21:23,520 Speaker 1: and this is and they're focusing closely solely on this 367 00:21:23,600 --> 00:21:26,920 Speaker 1: UBS credit Swiss thing and the implications for the space. 368 00:21:26,960 --> 00:21:29,000 Speaker 1: And we've got an all star lineup. Alison Williams, who 369 00:21:29,080 --> 00:21:32,080 Speaker 1: is our senior bank analyst in the US, covers UBS 370 00:21:32,200 --> 00:21:35,399 Speaker 1: and credit Swiss. Jerome Julius who we just spoke with. 371 00:21:35,520 --> 00:21:38,960 Speaker 1: He covers the European banks from the credit side, so 372 00:21:38,960 --> 00:21:40,880 Speaker 1: we can go to that at one issue. And then 373 00:21:40,920 --> 00:21:44,960 Speaker 1: Elliot Stein, he's ahead of our litigation here at Bloomberg Intelligence. 374 00:21:44,960 --> 00:21:46,679 Speaker 1: He can go to the you know, the whole angle 375 00:21:46,720 --> 00:21:49,480 Speaker 1: about will there be some of these at one bondholders 376 00:21:49,480 --> 00:21:52,480 Speaker 1: with ab sewing and kind of what's the outlook there. 377 00:21:53,000 --> 00:21:54,920 Speaker 1: Details on this you can find if you're a terminal 378 00:21:55,000 --> 00:21:58,320 Speaker 1: user go to s m n R go and if 379 00:21:58,359 --> 00:21:59,959 Speaker 1: you're not a terminal user, you can find it all 380 00:22:00,119 --> 00:22:04,639 Speaker 1: the information out on social media, I know on Twitter 381 00:22:04,800 --> 00:22:08,040 Speaker 1: at BBG Intelligence go check that out. They have all 382 00:22:08,040 --> 00:22:10,760 Speaker 1: the details there. We've already got a bunch of investors 383 00:22:10,800 --> 00:22:13,320 Speaker 1: signed up. So if you want to get smart on 384 00:22:13,320 --> 00:22:15,600 Speaker 1: this UBS Credit Swiss thing and what it means maybe 385 00:22:15,600 --> 00:22:18,000 Speaker 1: for the space going forward, this webinar could be a 386 00:22:18,040 --> 00:22:21,000 Speaker 1: good spot to start. Speaking of that. You can also 387 00:22:21,160 --> 00:22:24,960 Speaker 1: read the great work from and listen to a Shnale 388 00:22:25,080 --> 00:22:27,680 Speaker 1: Bassok on Bloomberg Media all over the place. She is 389 00:22:27,680 --> 00:22:30,320 Speaker 1: our Wall Street reporter. She's been covering this story. And 390 00:22:30,400 --> 00:22:33,000 Speaker 1: I guess one of the angles, Shale and thanks coming 391 00:22:33,040 --> 00:22:35,719 Speaker 1: into our Bloomberg studio here. One of the angles is 392 00:22:36,160 --> 00:22:40,760 Speaker 1: what happens to this Credit Swiss First Boston spin out 393 00:22:40,840 --> 00:22:44,320 Speaker 1: led by one mister Michael Klein, banker to the stars. 394 00:22:44,560 --> 00:22:47,399 Speaker 1: What's the status of that thing? A banker to very 395 00:22:47,440 --> 00:22:50,080 Speaker 1: specific powerful stars that have lost a lot of money 396 00:22:50,119 --> 00:22:52,159 Speaker 1: recently on Credit Swiss. So I think that that's an 397 00:22:52,200 --> 00:22:55,280 Speaker 1: important element of a lot of this is where does 398 00:22:55,320 --> 00:22:59,560 Speaker 1: Michael Klein stand in a lot of the discussions. Remember, 399 00:22:59,600 --> 00:23:02,359 Speaker 1: Michael Line was once a board member of Credit Swees. 400 00:23:02,400 --> 00:23:04,480 Speaker 1: He was supposed to become the leader of this First 401 00:23:04,520 --> 00:23:08,240 Speaker 1: Boston spinoff that everyone was talking about on Wall Street 402 00:23:08,280 --> 00:23:11,520 Speaker 1: because it was the return of First Boston. But now 403 00:23:11,640 --> 00:23:13,800 Speaker 1: there are some interesting things to think about as Credit 404 00:23:14,359 --> 00:23:18,760 Speaker 1: merges with UBS, which is that in essence, for years 405 00:23:19,160 --> 00:23:22,720 Speaker 1: you had UBS and I was front row seat covering 406 00:23:22,760 --> 00:23:25,560 Speaker 1: this really trying to punch above their way rise up 407 00:23:25,640 --> 00:23:27,960 Speaker 1: when it comes to invest in banking across the world, 408 00:23:28,320 --> 00:23:32,080 Speaker 1: particularly particularly in the United States. When I look at 409 00:23:32,119 --> 00:23:36,520 Speaker 1: the League tables today, UBS is number twelve, Credit Spieces 410 00:23:36,600 --> 00:23:39,080 Speaker 1: number thirteen. This is for mergers and acquisitions a down 411 00:23:39,080 --> 00:23:41,439 Speaker 1: market currently, so you know, not to make of that, 412 00:23:41,720 --> 00:23:43,520 Speaker 1: but as long as I've covered at Credit Spees was 413 00:23:43,560 --> 00:23:46,240 Speaker 1: really six or seven, there were top ten investment bank. 414 00:23:46,280 --> 00:23:47,920 Speaker 1: There's really a lot to be gained aut it there 415 00:23:47,920 --> 00:23:50,760 Speaker 1: with a lot of really key relationships with private equity 416 00:23:50,760 --> 00:23:53,520 Speaker 1: firms around the world. So you know, as our reporting 417 00:23:53,560 --> 00:23:58,280 Speaker 1: stands right now, UBS has told counterparts at Credit Spees 418 00:23:58,359 --> 00:24:01,440 Speaker 1: that they select, they want to select bolstering that investment 419 00:24:01,440 --> 00:24:04,000 Speaker 1: bank and then dump riskier parts of that investment bank. 420 00:24:04,040 --> 00:24:06,840 Speaker 1: We've heard some of that from executives as well, but 421 00:24:06,880 --> 00:24:09,360 Speaker 1: they really did not come out full scale and say 422 00:24:09,440 --> 00:24:12,960 Speaker 1: whether First Boston spinoff was a complete no go. The 423 00:24:13,080 --> 00:24:16,560 Speaker 1: preference here is to bolster the investment bank inside of 424 00:24:16,600 --> 00:24:19,000 Speaker 1: UBS as much as they can. So that's the European story. 425 00:24:19,600 --> 00:24:22,040 Speaker 1: Let's cross the Atlantic and bring it back here state 426 00:24:22,080 --> 00:24:24,440 Speaker 1: side and talk about the First Republic story, because there's 427 00:24:24,480 --> 00:24:26,639 Speaker 1: a lot of really big names circulating kind of in 428 00:24:26,680 --> 00:24:30,439 Speaker 1: the air when First Republic is mentioned, Jamie Diamond, Warren Buffett, 429 00:24:30,440 --> 00:24:33,679 Speaker 1: Tom Barrick, who's a board member on First Republic as well, 430 00:24:34,119 --> 00:24:37,360 Speaker 1: and I'm sure there's plenty of others as well, walk 431 00:24:37,440 --> 00:24:39,800 Speaker 1: us through what we know. Yeah, listen, right now, we're 432 00:24:39,800 --> 00:24:42,480 Speaker 1: at a point where you had a series of bank 433 00:24:42,560 --> 00:24:45,320 Speaker 1: failures already in the United States. Some of those have 434 00:24:45,440 --> 00:24:47,480 Speaker 1: led to deals, and some of them have led to 435 00:24:47,560 --> 00:24:50,240 Speaker 1: very messy sales processes that have not led to deals 436 00:24:50,240 --> 00:24:53,240 Speaker 1: at all yet. But when you look at First Republic, 437 00:24:54,320 --> 00:24:57,560 Speaker 1: there's a worry here that if the problems exacerbate, then 438 00:24:57,600 --> 00:25:00,160 Speaker 1: you really have a problem that will spill over into 439 00:25:00,160 --> 00:25:02,720 Speaker 1: the banking system in a bigger way. That is one 440 00:25:02,840 --> 00:25:06,320 Speaker 1: reason why you're watching all of these bank executives in particular. 441 00:25:06,359 --> 00:25:08,280 Speaker 1: So if you talk about the Diamond and the other 442 00:25:08,320 --> 00:25:10,879 Speaker 1: bank side of things, the reason they put the deposits in, 443 00:25:10,920 --> 00:25:13,720 Speaker 1: the reason that they're discussing a potential way to convert 444 00:25:13,760 --> 00:25:18,240 Speaker 1: that into equity, whether there's even more assistance needed, whether 445 00:25:18,280 --> 00:25:20,119 Speaker 1: the government needs to step up in the bigger way. 446 00:25:20,200 --> 00:25:23,000 Speaker 1: There are seriously a lot of counterparties here involved thinking 447 00:25:23,000 --> 00:25:26,280 Speaker 1: about what the right move is next. We are weeks 448 00:25:26,280 --> 00:25:29,040 Speaker 1: away from earning season. I think that's a really important 449 00:25:29,080 --> 00:25:31,440 Speaker 1: catalyst here because we don't have a lot of data 450 00:25:31,520 --> 00:25:34,160 Speaker 1: in terms of how bad things really are under the surface. 451 00:25:34,480 --> 00:25:37,800 Speaker 1: That is something that the market is uncertain and uncomfortable about. 452 00:25:38,080 --> 00:25:40,600 Speaker 1: But you saw our scoop overnight about the idea here 453 00:25:40,640 --> 00:25:44,240 Speaker 1: that the FED is considering, or you know, federal officials 454 00:25:44,240 --> 00:25:48,439 Speaker 1: are considering more extraordinary moves around deposit insurance. That is 455 00:25:48,480 --> 00:25:51,800 Speaker 1: something that is booing the market here and making sure 456 00:25:51,840 --> 00:25:55,520 Speaker 1: that this is something that depositors know that the government 457 00:25:55,600 --> 00:25:57,879 Speaker 1: is really thinking about saves for the deposit system in 458 00:25:57,920 --> 00:26:02,560 Speaker 1: the United States. Jamie Divans doing a wonderful personation of 459 00:26:02,640 --> 00:26:05,760 Speaker 1: JP Morgan kind of stepping in here much less like 460 00:26:05,840 --> 00:26:09,520 Speaker 1: JP Morgan did back in Panic. And I'll get you 461 00:26:09,600 --> 00:26:11,040 Speaker 1: the book because I read a great book on it. 462 00:26:10,920 --> 00:26:13,720 Speaker 1: It's everybody has it. But I'll get it to a second. Um, 463 00:26:13,760 --> 00:26:16,840 Speaker 1: which wise I'm gonna get it to I'm googling. You 464 00:26:16,840 --> 00:26:19,520 Speaker 1: give me the answer I to find the book. Um, 465 00:26:19,720 --> 00:26:21,720 Speaker 1: is it unusual if it feels kind of unusual to 466 00:26:21,760 --> 00:26:25,400 Speaker 1: see a bank executive taking such a leadership role which 467 00:26:25,440 --> 00:26:28,840 Speaker 1: kind of feels almost quasi regulatory. If you will give 468 00:26:28,920 --> 00:26:31,000 Speaker 1: us a sense of kind of what you're reporting has 469 00:26:31,160 --> 00:26:34,199 Speaker 1: turned up. Yeah, it's interesting that you mentioned that because 470 00:26:34,280 --> 00:26:36,040 Speaker 1: I think that there are a couple times in history 471 00:26:36,040 --> 00:26:37,680 Speaker 1: that we can look at. This is my news letter 472 00:26:37,760 --> 00:26:42,080 Speaker 1: last week actually okay, uh, the House of Morgan. Oh yeah, 473 00:26:42,160 --> 00:26:44,240 Speaker 1: have read that. Very good, awesome, So if you want 474 00:26:44,240 --> 00:26:46,840 Speaker 1: to get a sense of history, JP Morgan and saving 475 00:26:46,840 --> 00:26:49,240 Speaker 1: the banking thing that seem a little bit Also, by 476 00:26:49,280 --> 00:26:51,320 Speaker 1: the way, the Morgan Library, we're talking about it. If 477 00:26:51,320 --> 00:26:53,840 Speaker 1: you go there, it's where the exact room where JP 478 00:26:53,960 --> 00:26:57,399 Speaker 1: Morgan brought in bank chiefs, shut the doors, locked the 479 00:26:57,400 --> 00:26:59,760 Speaker 1: doors and made them figure it out that night. So 480 00:27:00,160 --> 00:27:02,840 Speaker 1: we're getting way. Oh yeah, I think it's thirty seven Stree. 481 00:27:04,000 --> 00:27:08,400 Speaker 1: It's open physically there. Yeah. JP Morgan himself, the capitalist, 482 00:27:08,480 --> 00:27:12,639 Speaker 1: his actual library. Uh, they're rare copies of the Gutenberg Bibles. 483 00:27:12,640 --> 00:27:14,000 Speaker 1: I actually just go to We're going to take a 484 00:27:14,000 --> 00:27:17,479 Speaker 1: til trip. Yeah, anyways, memory Lane. But you know, there 485 00:27:17,480 --> 00:27:19,879 Speaker 1: are a couple of instances. I think the LTCM rescue 486 00:27:19,920 --> 00:27:22,879 Speaker 1: is another one where bank chiefs got together. One where 487 00:27:22,920 --> 00:27:25,360 Speaker 1: the bank chiefs or bank executives got together and did 488 00:27:25,440 --> 00:27:27,639 Speaker 1: not require the FEDS, which I think is still an 489 00:27:27,640 --> 00:27:31,399 Speaker 1: outstanding story. Archagos is another example of this where they 490 00:27:31,480 --> 00:27:33,199 Speaker 1: kind of just had to figure it out and that 491 00:27:33,280 --> 00:27:35,560 Speaker 1: did not work out. So well, that's what happens, hary 492 00:27:35,600 --> 00:27:37,199 Speaker 1: to interrupted, isn't this what happened in like oh eight, 493 00:27:37,280 --> 00:27:42,280 Speaker 1: Like Lloyd Blank find basically took that role. Um No, 494 00:27:42,480 --> 00:27:48,120 Speaker 1: you know, I think two thousand and eight overwhelmed everybody. 495 00:27:48,119 --> 00:27:52,119 Speaker 1: It was really the government. It was Geittner, Yeah, um uh, 496 00:27:52,960 --> 00:27:57,800 Speaker 1: Hank Paulson, Hank, Hank, Paulson, um, and and those folks 497 00:27:57,880 --> 00:28:01,879 Speaker 1: that literally, uh, every weekend there's a famous moment and 498 00:28:01,920 --> 00:28:03,960 Speaker 1: two big to fail where you're going to just remember 499 00:28:04,600 --> 00:28:07,919 Speaker 1: this moment where Sorkin writes about Geitner going for a 500 00:28:08,000 --> 00:28:11,879 Speaker 1: run and processing all these problems. But anyways, yes, no, 501 00:28:12,040 --> 00:28:13,480 Speaker 1: but to the point that you guys are making the 502 00:28:13,520 --> 00:28:16,640 Speaker 1: banks themselves are playing a large role in this set 503 00:28:16,640 --> 00:28:21,359 Speaker 1: of rescues, The government itself has complications because there are 504 00:28:21,480 --> 00:28:23,359 Speaker 1: Remember in two thousand and eight, they did raise the 505 00:28:23,400 --> 00:28:26,560 Speaker 1: FDIC deposit limits. I was joking in my mind earlier, 506 00:28:26,560 --> 00:28:30,119 Speaker 1: because I'm a nerdy person, that the FDIC deposit caps 507 00:28:30,119 --> 00:28:33,840 Speaker 1: are facing inflation, right because they have been raised in 508 00:28:33,880 --> 00:28:35,480 Speaker 1: the wake of two thousand and eight, and now we're 509 00:28:35,520 --> 00:28:38,880 Speaker 1: facing an issue here again, where do they get raised? 510 00:28:38,920 --> 00:28:40,960 Speaker 1: Is there another tier system? Is there a number of 511 00:28:41,040 --> 00:28:44,520 Speaker 1: years in which they can provide full, full scale backstops 512 00:28:44,520 --> 00:28:46,719 Speaker 1: the broader system. And by the way, this is all 513 00:28:46,760 --> 00:28:49,200 Speaker 1: happening in a very contentious DC where there's a debt 514 00:28:49,200 --> 00:28:51,960 Speaker 1: limit that we are discussing as well, so you know, 515 00:28:52,200 --> 00:28:54,600 Speaker 1: this is a different time. Last time we got this 516 00:28:54,720 --> 00:28:57,280 Speaker 1: dire of a debt ceiling debate was twenty eleven, so 517 00:28:57,360 --> 00:28:59,480 Speaker 1: not at the same time as we were discussing these 518 00:28:59,520 --> 00:29:03,600 Speaker 1: Banking Act stops. But yeah, the banks certainly are playing 519 00:29:03,600 --> 00:29:06,640 Speaker 1: a large role. But remember, let's not act like they 520 00:29:06,640 --> 00:29:09,520 Speaker 1: don't have something in it for them. They've already gained 521 00:29:09,560 --> 00:29:13,360 Speaker 1: billions of dollars worth of deposits and inflows recently. And 522 00:29:13,440 --> 00:29:15,720 Speaker 1: by the way, if there are more issues in the 523 00:29:15,760 --> 00:29:19,800 Speaker 1: banking system, it could ripple into them as well. It's funny, 524 00:29:20,240 --> 00:29:23,480 Speaker 1: I don't I'm kind of thinking about this. Should I 525 00:29:23,520 --> 00:29:26,400 Speaker 1: be asking where's Brian moynahand on this? He's a big around. 526 00:29:26,400 --> 00:29:30,320 Speaker 1: They're all around. Actually, they're all currently today in DC 527 00:29:30,520 --> 00:29:33,000 Speaker 1: at the Financial Services Forum. Okay, you know it's funny. 528 00:29:33,040 --> 00:29:34,800 Speaker 1: I was talking to a banker yesterday and I was like, 529 00:29:34,880 --> 00:29:36,920 Speaker 1: one of my sources saw you walk into the White House. 530 00:29:37,000 --> 00:29:39,120 Speaker 1: I was like, are you working with the government or 531 00:29:39,120 --> 00:29:41,200 Speaker 1: are you joining the Are you joining the government? And 532 00:29:41,280 --> 00:29:46,000 Speaker 1: just started laughing. Everyone's in DC. And so it has 533 00:29:46,040 --> 00:29:50,560 Speaker 1: definitely been, you know, a group effort, but yes, Jamie 534 00:29:50,600 --> 00:29:53,960 Speaker 1: Diamond has been playing a very key role. What's next year? 535 00:29:54,040 --> 00:29:56,960 Speaker 1: I mean I actually kind of went into last weekend 536 00:29:56,960 --> 00:29:58,360 Speaker 1: thinking I was going to come We're all going to 537 00:29:58,400 --> 00:30:00,400 Speaker 1: come back on Monday with talking about another bank or 538 00:30:00,440 --> 00:30:04,040 Speaker 1: two or three that had failed or was failing, and 539 00:30:04,360 --> 00:30:06,400 Speaker 1: we didn't get that. What are you hearing out there? 540 00:30:06,520 --> 00:30:08,880 Speaker 1: I think the volatility is very concerning the fact that 541 00:30:08,920 --> 00:30:11,520 Speaker 1: you have First Republic up forty percent and down forty 542 00:30:11,560 --> 00:30:14,360 Speaker 1: percent in a matter of twenty four hours. You know, 543 00:30:14,440 --> 00:30:17,680 Speaker 1: these are bank stocks, These are supposed to be safe assets, 544 00:30:18,040 --> 00:30:21,120 Speaker 1: So you know, the trouble that's under the surface is significant. 545 00:30:21,240 --> 00:30:23,200 Speaker 1: The FED day tomorrow, of course, as you guys probably 546 00:30:23,240 --> 00:30:25,360 Speaker 1: been talking about constantly, you know, there are a lot 547 00:30:25,360 --> 00:30:29,320 Speaker 1: of uncertainties about how markets move. Remember it's not just 548 00:30:29,360 --> 00:30:31,440 Speaker 1: the banks that are feeling pain. That's the buy side 549 00:30:31,440 --> 00:30:33,160 Speaker 1: as well. They've lost a lot of money last year 550 00:30:33,160 --> 00:30:35,160 Speaker 1: and they're losing a lot of money this year on 551 00:30:35,360 --> 00:30:38,760 Speaker 1: crowded trades that are now unwinding, right right. Interesting. We'll 552 00:30:38,760 --> 00:30:40,600 Speaker 1: have to see what we hear from the Fed tomorrow 553 00:30:40,640 --> 00:30:43,360 Speaker 1: as they give their perspective. Fed Chairman Jpal that'll be 554 00:30:43,400 --> 00:30:46,560 Speaker 1: coming up tomorrow. We'll certainly have that. You're listening to 555 00:30:46,600 --> 00:30:49,960 Speaker 1: the tape cans are our live program, Bloomberg Markets weekdays 556 00:30:50,000 --> 00:30:53,200 Speaker 1: at ten am Eastern on Bloomberg Radio, tune in app, 557 00:30:53,280 --> 00:30:56,160 Speaker 1: Bloomberg dot Com, and the Bloomberg Business App. You can 558 00:30:56,200 --> 00:30:59,400 Speaker 1: also listen live on Amazon Alexa from our flagship New 559 00:30:59,480 --> 00:31:05,840 Speaker 1: York station, Jo Say Alexa play Bloomberg eleven thirty. Let's 560 00:31:05,880 --> 00:31:09,520 Speaker 1: talk commodities here, let's talk copper. Let's talk like a 561 00:31:09,600 --> 00:31:14,120 Speaker 1: real company. Uncle As Seidler, vice president of investor Relations. 562 00:31:14,240 --> 00:31:18,560 Speaker 1: For the company's name Arubius Rubis Arubis Okay, Now the 563 00:31:18,600 --> 00:31:20,600 Speaker 1: symbol I'm using here on my Bloomberg term. It's a 564 00:31:20,640 --> 00:31:24,840 Speaker 1: public traded company in Germany, NDA Space gy Equity and 565 00:31:24,880 --> 00:31:26,680 Speaker 1: you pop it up there and it brings you everything 566 00:31:26,720 --> 00:31:29,480 Speaker 1: you need to know. And it's a It's based in Hamburg, Germany. 567 00:31:29,480 --> 00:31:31,600 Speaker 1: It's the largest copper producer in Europe and the largest 568 00:31:31,640 --> 00:31:35,840 Speaker 1: copper recycler that's got a market cap of three point 569 00:31:35,880 --> 00:31:39,959 Speaker 1: eight two billion euros euros. Thank you very much, Agola, 570 00:31:40,000 --> 00:31:44,040 Speaker 1: thanks so much for joining us here, Arubis Copper. Talk 571 00:31:44,120 --> 00:31:45,480 Speaker 1: to us about I want to talk you about the 572 00:31:45,520 --> 00:31:49,480 Speaker 1: copper recycling business. Talk to us about how you guys 573 00:31:49,520 --> 00:31:52,080 Speaker 1: play in a copper recycling business. How important is that 574 00:31:52,120 --> 00:31:55,760 Speaker 1: to you guys? It is important because it's standing for well, 575 00:31:56,280 --> 00:31:59,840 Speaker 1: input material wise for forty percent of our business. So 576 00:32:00,040 --> 00:32:03,240 Speaker 1: we are a copper producer, as you said, and we 577 00:32:03,360 --> 00:32:07,240 Speaker 1: are using as an input material almost one million ton 578 00:32:07,320 --> 00:32:11,440 Speaker 1: of different recycling materials. And now we're doing our first 579 00:32:11,520 --> 00:32:14,320 Speaker 1: move here in the US market in terms of recycling. 580 00:32:14,520 --> 00:32:17,840 Speaker 1: We are just planning to build a big recycling site 581 00:32:17,920 --> 00:32:21,840 Speaker 1: or the first one for complex recycling materials that is 582 00:32:22,360 --> 00:32:26,200 Speaker 1: circuit boards for example here in the US in Augusta 583 00:32:26,360 --> 00:32:30,320 Speaker 1: in Georgia. So we broke ground last June and now 584 00:32:30,360 --> 00:32:35,440 Speaker 1: we're looking forward to spend six hundred forty million euros 585 00:32:35,480 --> 00:32:40,400 Speaker 1: there and yeah, looking for two hundred people around working 586 00:32:40,440 --> 00:32:43,120 Speaker 1: for us over that stuff. Yes, that's definitely a very 587 00:32:43,120 --> 00:32:45,280 Speaker 1: global business here. But would you say most of the 588 00:32:45,320 --> 00:32:47,720 Speaker 1: business that you have are now concentrated in Germany or 589 00:32:47,720 --> 00:32:51,120 Speaker 1: how would you describe where you guys play. Well, Actually, 590 00:32:51,240 --> 00:32:54,200 Speaker 1: the copper business is a global business, so we are 591 00:32:54,280 --> 00:32:57,560 Speaker 1: sourcing globally, especially when it comes to our primary materials, 592 00:32:57,600 --> 00:33:00,479 Speaker 1: that is a material coming from the mines. Here we 593 00:33:00,520 --> 00:33:04,080 Speaker 1: are processing roughly two point one billion tons of copper 594 00:33:04,200 --> 00:33:08,320 Speaker 1: concentrate that is sourced globally. The recycling market for US 595 00:33:08,360 --> 00:33:11,840 Speaker 1: currently is more a European one. We are sourcing thirteen 596 00:33:11,880 --> 00:33:14,520 Speaker 1: percent from the US and now want to go there, 597 00:33:15,240 --> 00:33:18,680 Speaker 1: but it is sourcing wise a global market. It is 598 00:33:19,000 --> 00:33:22,680 Speaker 1: we are producing copper cassots and why a rod. That's 599 00:33:22,720 --> 00:33:26,680 Speaker 1: also a commodity, so to say, that's more a European market. 600 00:33:27,440 --> 00:33:32,200 Speaker 1: Where do you source copper from? Typically typically, well, Bulgaria 601 00:33:32,320 --> 00:33:34,200 Speaker 1: is a market in Europe for US. We have a 602 00:33:34,240 --> 00:33:37,400 Speaker 1: primary smelter in Bulgaria as well. The other ones is 603 00:33:37,440 --> 00:33:42,280 Speaker 1: coming from South America. We are sourcing from Indonesia, from Australia, 604 00:33:42,720 --> 00:33:45,120 Speaker 1: you name it, wherever it comes from. I want to 605 00:33:45,120 --> 00:33:46,920 Speaker 1: shift gears a little bit here. I'm going to talk 606 00:33:46,960 --> 00:33:50,440 Speaker 1: about the pricing action right now in Clark commodity space 607 00:33:50,440 --> 00:33:52,920 Speaker 1: ahead of the FED tomorrow. We're seeing risk metals like 608 00:33:53,000 --> 00:33:57,680 Speaker 1: carper rallying. You think that's a little maybe optimistic saying that, 609 00:33:57,720 --> 00:34:00,000 Speaker 1: like the commodities market is signaling there's going to be 610 00:34:00,280 --> 00:34:03,720 Speaker 1: pass or how do you interpret that? All talking about copper, 611 00:34:03,760 --> 00:34:07,800 Speaker 1: it is always we are named doc copper. So how 612 00:34:07,800 --> 00:34:10,600 Speaker 1: the copper prices developing, that the mirror of the how 613 00:34:10,640 --> 00:34:15,200 Speaker 1: the global economy is developing. Copper prices are currently coming up. 614 00:34:16,120 --> 00:34:18,960 Speaker 1: Talking about the other medals, we are producing gold, silver, 615 00:34:19,080 --> 00:34:25,080 Speaker 1: nickel as well. In this times copper gold is always 616 00:34:25,120 --> 00:34:29,000 Speaker 1: a safe haven. So we've seen the commodity prices for 617 00:34:29,080 --> 00:34:32,239 Speaker 1: precious metals coming up. This is something we are benefiting 618 00:34:32,360 --> 00:34:35,839 Speaker 1: from and we are quite optimistic. China is coming up. 619 00:34:36,400 --> 00:34:40,040 Speaker 1: The demand is increasing after the long period of COVID 620 00:34:40,600 --> 00:34:44,000 Speaker 1: and that means for us we are not directly dealing 621 00:34:44,080 --> 00:34:48,920 Speaker 1: with China, but China is demanding for fifty percent of 622 00:34:48,960 --> 00:34:52,600 Speaker 1: the global copper market and that is where the price increase, 623 00:34:52,680 --> 00:34:56,879 Speaker 1: supplies fluctuations come from. That they drive the prices. So 624 00:34:57,000 --> 00:34:59,840 Speaker 1: what does the opening of China mean both from supply 625 00:35:01,080 --> 00:35:04,480 Speaker 1: and demand of products? Do you think, well, first of all, 626 00:35:04,520 --> 00:35:08,440 Speaker 1: they will ask for more primary materials because that country 627 00:35:08,600 --> 00:35:12,080 Speaker 1: is needed copper and they are even though they are 628 00:35:12,120 --> 00:35:14,879 Speaker 1: producing in that country a lot of copper. They are 629 00:35:15,000 --> 00:35:19,399 Speaker 1: net still a importer of refined coppa. That is good 630 00:35:19,400 --> 00:35:22,719 Speaker 1: for the recycling market. They do well as we all do. 631 00:35:22,800 --> 00:35:27,960 Speaker 1: After the Ukraine War, they try to look and have 632 00:35:28,000 --> 00:35:31,520 Speaker 1: a safe haven for their supply chains, and I think 633 00:35:32,239 --> 00:35:36,080 Speaker 1: hopefully the reopen them will ease a little bit more 634 00:35:36,080 --> 00:35:40,400 Speaker 1: than supply chains. Also for the European American automotive industry. 635 00:35:40,400 --> 00:35:43,239 Speaker 1: I would say, so our listeners are everybody right now 636 00:35:43,239 --> 00:35:45,600 Speaker 1: really able? Me just brought it how everyone is so 637 00:35:45,719 --> 00:35:48,240 Speaker 1: interested in this banking crisis and looking at it from 638 00:35:48,280 --> 00:35:52,239 Speaker 1: every angle imaginable sign A note earlier that adalysts are 639 00:35:52,239 --> 00:35:54,719 Speaker 1: saying that this is actually bullish for the prospects of 640 00:35:54,760 --> 00:35:58,640 Speaker 1: oil prices. Abahts us connect the dats there and why 641 00:35:58,680 --> 00:36:01,400 Speaker 1: that is actually, as we are one of the leading 642 00:36:01,719 --> 00:36:05,080 Speaker 1: copper companies in Europe, I'm not allowed to have an 643 00:36:05,120 --> 00:36:08,480 Speaker 1: open opinion on the copper prices. I can. I can 644 00:36:08,600 --> 00:36:12,759 Speaker 1: quote Goldman Sex for example. They just published something where 645 00:36:12,760 --> 00:36:14,839 Speaker 1: they see that they see the copper price as well 646 00:36:14,880 --> 00:36:17,719 Speaker 1: above ten thousand euros, so it will go up. This 647 00:36:17,800 --> 00:36:20,880 Speaker 1: is what we expect, all right. So recycling, I'm just 648 00:36:20,920 --> 00:36:23,839 Speaker 1: looking at our PGeo function on the Bloomberg termin kind 649 00:36:23,840 --> 00:36:26,720 Speaker 1: of gives you some segment breakout. It's still a single 650 00:36:26,719 --> 00:36:29,200 Speaker 1: digits as a percentage of your total revenue recycling. Is 651 00:36:29,200 --> 00:36:32,920 Speaker 1: that correct what we have? Yeah? Not we are not 652 00:36:32,960 --> 00:36:36,640 Speaker 1: talking in terms of revenue, but but it discounting for 653 00:36:36,760 --> 00:36:39,680 Speaker 1: a lot of our businesses. So talk to us about 654 00:36:39,680 --> 00:36:42,120 Speaker 1: why are you building this plan in Augusta, Georgia, other 655 00:36:42,160 --> 00:36:44,600 Speaker 1: than they be close to the Augusta National Golf Course 656 00:36:45,600 --> 00:36:47,960 Speaker 1: and hopefully get tickets. I mean, talk to about the 657 00:36:47,960 --> 00:36:52,440 Speaker 1: future recycling. M All I know is I'm separating all 658 00:36:52,520 --> 00:36:54,440 Speaker 1: kinds of stuff in my house every day when I 659 00:36:54,520 --> 00:36:58,560 Speaker 1: usually just toss it away, no mass. So what's happening 660 00:36:58,560 --> 00:37:01,600 Speaker 1: in the copper recycling businesses? Big? Is it growing? It 661 00:37:01,760 --> 00:37:04,640 Speaker 1: is extremely gloring, especially in the US. And if you 662 00:37:04,719 --> 00:37:07,880 Speaker 1: do so at home, it is a kind of urban mining. 663 00:37:07,920 --> 00:37:11,160 Speaker 1: So it's good that you do so you should recycle 664 00:37:11,200 --> 00:37:14,000 Speaker 1: it all now. Actually for us, we are coming from 665 00:37:14,080 --> 00:37:17,120 Speaker 1: the market angle. The market for recycling material in the 666 00:37:17,200 --> 00:37:20,160 Speaker 1: US is so promising. Currently we are talking about a 667 00:37:20,280 --> 00:37:24,200 Speaker 1: market volume of roughly six million tons and we have 668 00:37:24,239 --> 00:37:28,600 Speaker 1: growth rates about five to six percent per year. And 669 00:37:28,840 --> 00:37:32,880 Speaker 1: we are the first as I said, complex recycling company 670 00:37:33,160 --> 00:37:36,120 Speaker 1: building a recycling plant here in the US. And at 671 00:37:36,120 --> 00:37:40,400 Speaker 1: the end, the material you bringing to your recycling companies, 672 00:37:40,480 --> 00:37:43,719 Speaker 1: what you are recycling is coming to us one day 673 00:37:44,000 --> 00:37:46,840 Speaker 1: and we are bringing it back into the US market. 674 00:37:47,480 --> 00:37:49,960 Speaker 1: So when we're working at all this these confluence of 675 00:37:50,040 --> 00:37:53,760 Speaker 1: geopolitical factors here, we're working at the war in Ukraine 676 00:37:53,760 --> 00:37:56,960 Speaker 1: now in its second ear, China is reopening. Give us 677 00:37:56,960 --> 00:37:59,280 Speaker 1: a little bit of a broad outlook of just where 678 00:37:59,320 --> 00:38:03,120 Speaker 1: your how you see the outlook for the commodity space 679 00:38:03,160 --> 00:38:07,640 Speaker 1: evolving from here? Yeah, actually talking talking for copper, as 680 00:38:07,640 --> 00:38:11,480 Speaker 1: it is some material for the green transition. It is 681 00:38:11,520 --> 00:38:16,200 Speaker 1: about every electronic vehicle needs copper, or every windmill, every 682 00:38:16,200 --> 00:38:20,400 Speaker 1: solar panel meets that, and that the green and climate 683 00:38:21,520 --> 00:38:25,680 Speaker 1: change things we need to avoid. For all these industries, 684 00:38:25,760 --> 00:38:28,879 Speaker 1: you need the metals we are producing, and therefore we 685 00:38:28,920 --> 00:38:32,080 Speaker 1: think that the copper outlook is extremely positive. All right 686 00:38:32,080 --> 00:38:33,799 Speaker 1: on the side, Thanks so much. I'm just looking at 687 00:38:33,800 --> 00:38:36,160 Speaker 1: my Google maps here for Hamburg. I've never been, but 688 00:38:36,200 --> 00:38:38,439 Speaker 1: it looks really cool town. They got the Elbow River 689 00:38:38,480 --> 00:38:40,839 Speaker 1: coming in and then comes into the town to the 690 00:38:40,840 --> 00:38:43,040 Speaker 1: city of Hamburg, get breaks into like a million different fingers. 691 00:38:43,040 --> 00:38:45,560 Speaker 1: So there's water everywhere it is in Hamburg. How cool 692 00:38:45,680 --> 00:38:47,719 Speaker 1: is that? So I need to get Actually, I've learned 693 00:38:47,760 --> 00:38:50,120 Speaker 1: that we have more bridges than Venice has more than 694 00:38:50,239 --> 00:38:54,279 Speaker 1: Amsterdam too. I'm not sure about that. So anyway, put 695 00:38:54,400 --> 00:38:56,680 Speaker 1: Hamburg on your list of places. Ago looks pretty cool. 696 00:38:56,840 --> 00:39:00,000 Speaker 1: Angles Sidler, vice president of investor relations for a Ruby, 697 00:39:00,440 --> 00:39:02,880 Speaker 1: which is the largest copper producer in Europe and the 698 00:39:02,920 --> 00:39:06,319 Speaker 1: largest copper recycling worldwide. Uncle that joins us live here 699 00:39:06,360 --> 00:39:09,160 Speaker 1: in our Bloomberg Interactive Broker studio. We appreciate her making 700 00:39:09,200 --> 00:39:12,160 Speaker 1: the trip. This is Bloomberg. Thanks for listening to the 701 00:39:12,200 --> 00:39:16,120 Speaker 1: Bloomberg Markets podcast. You can subscribe and listen to interviews 702 00:39:16,120 --> 00:39:20,439 Speaker 1: with Apple Podcasts or whatever podcast platform you prefer. I'm 703 00:39:20,440 --> 00:39:24,239 Speaker 1: Matt Miller. I'm on Twitter at Matt Miller nineteen seventy three. 704 00:39:24,640 --> 00:39:27,120 Speaker 1: And I'm Paul Sweeney. I'm on Twitter at pt Sweeney. 705 00:39:27,200 --> 00:39:29,839 Speaker 1: Before the podcast, you can always catch us worldwide at 706 00:39:29,840 --> 00:39:30,640 Speaker 1: Bloomberg Radio