1 00:00:00,080 --> 00:00:12,960 Speaker 1: Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. 2 00:00:13,480 --> 00:00:16,960 Speaker 1: Daily we bring you insight from the best in economics, finance, 3 00:00:17,040 --> 00:00:23,480 Speaker 1: investment and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:29,000 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Brian 5 00:00:29,080 --> 00:00:34,320 Speaker 1: Lovett with us working today Opery her Fund, an international investment. 6 00:00:34,320 --> 00:00:36,920 Speaker 1: We've got a lot to be thank you, thankful for, 7 00:00:37,800 --> 00:00:40,559 Speaker 1: but for those in the market mostly what we're thankful 8 00:00:40,600 --> 00:00:44,440 Speaker 1: for its courage. It is the most unloved bull market still, 9 00:00:44,560 --> 00:00:47,040 Speaker 1: isn't it is? And it has been for a long time. 10 00:00:47,080 --> 00:00:49,920 Speaker 1: I would say we're going on years now that investors 11 00:00:49,920 --> 00:00:52,080 Speaker 1: have been asking me is it going to be over? 12 00:00:52,360 --> 00:00:56,000 Speaker 1: And in actuality, if you look at the macro environment 13 00:00:56,200 --> 00:01:00,200 Speaker 1: right now with growth above trend in over sixty sign 14 00:01:00,240 --> 00:01:03,360 Speaker 1: of the countries around the world, that is a better 15 00:01:03,440 --> 00:01:06,720 Speaker 1: macro backdrop that we've had in some time. Max Roser, 16 00:01:06,760 --> 00:01:09,480 Speaker 1: who who does brilliant work out on Twitter and charts, 17 00:01:09,480 --> 00:01:12,600 Speaker 1: I'll retweet out his work folks. He's in England just 18 00:01:12,720 --> 00:01:14,720 Speaker 1: I think he's at Oxford. He does just great work. 19 00:01:15,200 --> 00:01:21,240 Speaker 1: He said. The poorest Portugal's poverty oft was worse than 20 00:01:21,280 --> 00:01:25,200 Speaker 1: any country today. I mean it is a more prosperous world, 21 00:01:26,240 --> 00:01:31,360 Speaker 1: a more prosperous emerging markets. How does Oppenheimer Funds invest 22 00:01:31,440 --> 00:01:35,320 Speaker 1: differently now in emerging markets than you did ten and 23 00:01:35,400 --> 00:01:38,319 Speaker 1: twenty years ago. Well, we've always been looking for exceptional 24 00:01:38,360 --> 00:01:41,399 Speaker 1: companies in the emerging markets, true growth companies in the 25 00:01:41,400 --> 00:01:45,160 Speaker 1: emerging markets. So I think it's more that maybe some 26 00:01:45,240 --> 00:01:47,240 Speaker 1: of the investors in the emerging markets have come to 27 00:01:47,440 --> 00:01:51,480 Speaker 1: us rather than us change our process significantly. You know, 28 00:01:51,640 --> 00:01:54,920 Speaker 1: people usually thought of emerging markets as state owned companies 29 00:01:55,000 --> 00:01:58,560 Speaker 1: and big energy names, and that's basically what the indices 30 00:01:58,560 --> 00:02:01,520 Speaker 1: are comprised of. We've always looked for growth in the 31 00:02:01,560 --> 00:02:05,480 Speaker 1: emerging markets and UM as you've seen, you know, particularly 32 00:02:05,560 --> 00:02:07,560 Speaker 1: with companies in China this year and other parts of 33 00:02:07,560 --> 00:02:11,600 Speaker 1: the emerging markets, very very strong returns as investors look 34 00:02:11,680 --> 00:02:15,240 Speaker 1: for true growth in a slow growth world. Brian, good 35 00:02:15,240 --> 00:02:17,680 Speaker 1: morning to you, or good afternoon from London. In fact, 36 00:02:17,720 --> 00:02:20,519 Speaker 1: when you're looking at an emerging markets, are you looking 37 00:02:20,639 --> 00:02:23,720 Speaker 1: at a particular asset class or you invest in cross 38 00:02:23,720 --> 00:02:27,680 Speaker 1: asset So at Oppenheimer Funds we have investments across the 39 00:02:27,680 --> 00:02:32,239 Speaker 1: emerging markets. We run the largest UM equity emerging market 40 00:02:32,240 --> 00:02:35,280 Speaker 1: fund UH and we also manage money in the emerging 41 00:02:35,280 --> 00:02:38,320 Speaker 1: market debt space as well. But what we're focusing on 42 00:02:38,440 --> 00:02:41,920 Speaker 1: as investors is a very nice macro backdrop in the 43 00:02:41,919 --> 00:02:44,440 Speaker 1: emerging markets, the likes of which we haven't had in 44 00:02:44,480 --> 00:02:48,600 Speaker 1: a handful of years. You have um, you know, China slowing, 45 00:02:48,680 --> 00:02:51,480 Speaker 1: but to a what we believe is a higher quality 46 00:02:51,600 --> 00:02:54,320 Speaker 1: level of growth. You have Latin America recovering, You have 47 00:02:54,360 --> 00:02:58,359 Speaker 1: the oil producers recovering, and what most and as important, 48 00:02:58,400 --> 00:03:01,840 Speaker 1: you have inflation which has come down in the emerging markets, 49 00:03:01,880 --> 00:03:04,959 Speaker 1: which has allowed policy makers to be more accommodative. So 50 00:03:05,440 --> 00:03:09,440 Speaker 1: on the fixed income side, attractive real yields and currencies 51 00:03:09,480 --> 00:03:12,680 Speaker 1: that were beaten up on the equity side, very nice 52 00:03:13,080 --> 00:03:16,240 Speaker 1: growth stories, both on the macro side but at the 53 00:03:16,240 --> 00:03:19,280 Speaker 1: individual company level as well. As we look ahead to 54 00:03:19,560 --> 00:03:22,240 Speaker 1: the FED minutes coming out later, how much of a 55 00:03:22,400 --> 00:03:26,160 Speaker 1: risk to emerging markets does the tightening cycle from the 56 00:03:26,160 --> 00:03:28,440 Speaker 1: Fed pose? Is it as much of a risk as 57 00:03:28,440 --> 00:03:30,040 Speaker 1: it used to be. It is not as much as 58 00:03:30,040 --> 00:03:31,560 Speaker 1: a risk as it used to be. If you remember 59 00:03:31,600 --> 00:03:36,840 Speaker 1: the taper tantrum in real yields in the emerging markets 60 00:03:36,880 --> 00:03:40,440 Speaker 1: were close to you know, one or below one. If 61 00:03:40,480 --> 00:03:42,360 Speaker 1: you look at when the FED raised raids for the 62 00:03:42,400 --> 00:03:46,680 Speaker 1: first time, in real yields in the emerging markets were 63 00:03:46,760 --> 00:03:50,680 Speaker 1: very low as well. So what that meant was inflation 64 00:03:50,880 --> 00:03:53,000 Speaker 1: was was generally high in the emerging markets and it 65 00:03:53,040 --> 00:03:56,160 Speaker 1: wasn't attractive for investors to be there to the extent 66 00:03:56,240 --> 00:03:58,560 Speaker 1: that it is now. So you had capital flight at 67 00:03:58,600 --> 00:04:01,760 Speaker 1: this point in the cycle withinflation significantly down in the 68 00:04:01,800 --> 00:04:05,000 Speaker 1: emerging markets. You have real yields on the order of 69 00:04:05,040 --> 00:04:08,560 Speaker 1: three percent or so an aggregate across the emerging markets. 70 00:04:08,600 --> 00:04:11,480 Speaker 1: So as the FED raises rates UM, which we believe 71 00:04:11,480 --> 00:04:15,600 Speaker 1: will ultimately be of continue to be gradually and slowly um, 72 00:04:16,400 --> 00:04:19,640 Speaker 1: there is less like you are significantly less likely to 73 00:04:19,640 --> 00:04:23,120 Speaker 1: see capital flight from the emerging markets. But I'm glad 74 00:04:23,120 --> 00:04:25,960 Speaker 1: that they brings us up because, to be honest, I've 75 00:04:25,960 --> 00:04:29,600 Speaker 1: been remiss in not doing a real yield analysis. Let's 76 00:04:29,600 --> 00:04:32,400 Speaker 1: back up to investment one oh one. Why should our 77 00:04:32,440 --> 00:04:37,599 Speaker 1: listeners look at inflation adjusted yields versus the nominal yield, 78 00:04:37,600 --> 00:04:41,480 Speaker 1: which is where the corporate officer lives every moment. Well, 79 00:04:41,520 --> 00:04:43,479 Speaker 1: I mean, you want your standard of living to improve, 80 00:04:43,640 --> 00:04:46,760 Speaker 1: so if you can, if you can generate income above 81 00:04:46,880 --> 00:04:50,000 Speaker 1: the rate of inflation, your standard of living is improving. 82 00:04:50,080 --> 00:04:52,760 Speaker 1: Some of the difficulties that investors have right now in 83 00:04:52,800 --> 00:04:54,600 Speaker 1: the United States. If you look at a ten year 84 00:04:54,640 --> 00:04:57,479 Speaker 1: treasury rate of I think around two thirty five to 85 00:04:57,760 --> 00:05:02,040 Speaker 1: forty with inflation of around two, that's akin to running 86 00:05:02,040 --> 00:05:05,400 Speaker 1: on a treadmill. You're not really getting anywhere, and you're 87 00:05:05,400 --> 00:05:07,640 Speaker 1: taking on interest rate. So that looks the real yield 88 00:05:07,640 --> 00:05:10,040 Speaker 1: in the Philippines or Poland, or you don't name your 89 00:05:10,080 --> 00:05:12,520 Speaker 1: other favorites. So if you looked in aggregate across the 90 00:05:12,560 --> 00:05:15,400 Speaker 1: emerging markets, you're at about three percent real years. So 91 00:05:15,400 --> 00:05:18,440 Speaker 1: I'm gonna pick up two hundred basis points plus two 92 00:05:18,480 --> 00:05:22,520 Speaker 1: full percentage points a real yield. Do you hedge that 93 00:05:22,600 --> 00:05:26,200 Speaker 1: against the currency risk? We can hedge that against the 94 00:05:26,200 --> 00:05:29,200 Speaker 1: currency risk. We will use currencies as a lever to 95 00:05:29,279 --> 00:05:32,720 Speaker 1: pull to drive returns. What you have right now is 96 00:05:32,800 --> 00:05:37,960 Speaker 1: a generally weaker dollar and currencies across the emerging markets 97 00:05:38,040 --> 00:05:42,200 Speaker 1: that are generally under value to the U. S Dollar 98 00:05:42,279 --> 00:05:45,279 Speaker 1: on a purchasing power parody basis. So we believe that 99 00:05:45,320 --> 00:05:50,040 Speaker 1: currency is additive to fixed income emerging market returns at 100 00:05:50,040 --> 00:05:52,880 Speaker 1: this point in the cycle. On the equity side, we 101 00:05:52,920 --> 00:05:57,320 Speaker 1: believe that hedging currencies adds cost and complexity of the portfolios, 102 00:05:57,400 --> 00:06:00,279 Speaker 1: and over longer term time periods is generally a gosh. 103 00:06:00,400 --> 00:06:05,200 Speaker 1: So unfixed income we have the ability um to hedge currencies, 104 00:06:05,240 --> 00:06:08,479 Speaker 1: and we do so at certain points um. On the 105 00:06:08,600 --> 00:06:12,520 Speaker 1: on the equity side, we typically do not hedge the currency. Brian, 106 00:06:12,600 --> 00:06:15,960 Speaker 1: I want to pivot the conversation slightly to the to 107 00:06:16,080 --> 00:06:18,479 Speaker 1: Europe and the US, so we keep talking about the 108 00:06:18,520 --> 00:06:22,800 Speaker 1: relentless flattening of the U S yield curve. Right, Let's 109 00:06:22,839 --> 00:06:25,640 Speaker 1: take the twos tense for example. The German twos tense 110 00:06:25,680 --> 00:06:28,599 Speaker 1: curve has been flattening as well, but the spread between 111 00:06:28,640 --> 00:06:31,960 Speaker 1: the two is the most positive since two thousand and six. 112 00:06:32,360 --> 00:06:36,560 Speaker 1: Does that mean adding duration in Germany suddenly looks relatively 113 00:06:36,640 --> 00:06:39,000 Speaker 1: cheap even if absolute yields are well below those in 114 00:06:39,000 --> 00:06:41,479 Speaker 1: the US. Yeah, it does, but it's not. It's still 115 00:06:41,520 --> 00:06:45,920 Speaker 1: not a particularly attractive investment many of the developed market 116 00:06:46,120 --> 00:06:49,160 Speaker 1: UH fixed income instruments. I would say, you know, with 117 00:06:49,200 --> 00:06:51,680 Speaker 1: regards to the flattening in the United States, I think 118 00:06:51,680 --> 00:06:53,480 Speaker 1: what it says to me is that the Federal Reserve 119 00:06:53,600 --> 00:06:57,400 Speaker 1: is ultimately going to have to back off its um 120 00:06:57,400 --> 00:07:02,440 Speaker 1: off its tightening stance. There simply not enough spread between 121 00:07:02,480 --> 00:07:05,320 Speaker 1: two and ten. Uh. The Fed really wants to raise 122 00:07:05,360 --> 00:07:07,480 Speaker 1: interest rates three or four times in the coming year. 123 00:07:07,520 --> 00:07:10,040 Speaker 1: You're gonna see a flat yield curb if that were 124 00:07:10,040 --> 00:07:12,360 Speaker 1: to happen. Investors your to your point, might be happy 125 00:07:12,400 --> 00:07:14,960 Speaker 1: to have some duration in their portfolio. If you look 126 00:07:15,000 --> 00:07:17,600 Speaker 1: at US investors right now, their short duration. They've been 127 00:07:17,600 --> 00:07:20,360 Speaker 1: told to be short duration for eight years. You know, 128 00:07:20,440 --> 00:07:24,240 Speaker 1: having some duration your portfolio, maybe adding some credit can 129 00:07:24,320 --> 00:07:26,640 Speaker 1: increase the yield and maybe bring down some vall. It 130 00:07:26,680 --> 00:07:29,560 Speaker 1: will be interesting to see the two thousand and eighteen 131 00:07:30,000 --> 00:07:34,520 Speaker 1: research packets and also how they're amended about April next 132 00:07:34,560 --> 00:07:37,600 Speaker 1: your brand, Levitt, thank you so much with Happenheimer Funds, 133 00:07:37,600 --> 00:07:39,720 Speaker 1: and thank you to your team. We enjoyed immensely of 134 00:07:39,840 --> 00:07:58,080 Speaker 1: visiting your studios. Why don't you bring in our steamed 135 00:07:58,560 --> 00:08:05,560 Speaker 1: petroleum guests. Yeah, absolutely fantastic to have Philip Veliger here 136 00:08:05,760 --> 00:08:08,840 Speaker 1: um with with us in the London studio. I understand 137 00:08:08,880 --> 00:08:11,679 Speaker 1: that you're here in London sort of on a Thanksgiving break, 138 00:08:11,720 --> 00:08:14,760 Speaker 1: but you've really kindly agreed to drop into surveillance because 139 00:08:14,880 --> 00:08:17,720 Speaker 1: he likes you so much. Tom, you hear that Happy 140 00:08:17,760 --> 00:08:21,160 Speaker 1: Thanksgiving Tom, Well, happy Thanksgiving to you, Mr Roger. You know, 141 00:08:21,160 --> 00:08:23,600 Speaker 1: I think nearer to have Phil Verliger here is to 142 00:08:24,040 --> 00:08:26,200 Speaker 1: go back to the hindsight of there were very few 143 00:08:26,200 --> 00:08:29,440 Speaker 1: people doubting a hundred dollar oil, and Phil Verliger is 144 00:08:29,480 --> 00:08:33,880 Speaker 1: consistently doubted some of the excesses of of opec in 145 00:08:33,920 --> 00:08:37,360 Speaker 1: a in a contrived market for years. Phil, do you 146 00:08:37,440 --> 00:08:42,640 Speaker 1: maintain a lower price for oil? Call this year? Uh? Yes, sir, 147 00:08:43,400 --> 00:08:46,520 Speaker 1: It's oil prices are going to stay about where they 148 00:08:46,520 --> 00:08:52,000 Speaker 1: are right now, maybe fifty, maybe sixty. Think unless Uh, 149 00:08:52,440 --> 00:08:56,680 Speaker 1: the events in Saudi Arabia, which are the really important event, 150 00:08:57,240 --> 00:09:01,840 Speaker 1: the the arrest of all the wealthy people essentially attempt 151 00:09:02,120 --> 00:09:05,640 Speaker 1: trying to extract you know, four hundred or six hundred 152 00:09:05,679 --> 00:09:09,880 Speaker 1: billion dollars from these people. Uh. If you look at 153 00:09:10,040 --> 00:09:12,720 Speaker 1: what's going on in Saudi Arabia, you have a country 154 00:09:12,760 --> 00:09:20,240 Speaker 1: that is strongly opposed to Iran, Syria and uh in Lebanon, 155 00:09:20,280 --> 00:09:23,600 Speaker 1: the Hespalaon Lebanon, and although those are backed by the Russians, 156 00:09:23,600 --> 00:09:25,840 Speaker 1: at the same time, Saudi Arabia has been cooperating with 157 00:09:25,920 --> 00:09:29,320 Speaker 1: Russia to hold up oil prices. The question is if 158 00:09:29,360 --> 00:09:33,960 Speaker 1: the assorities are able to accumulate a substantial amount of cash. 159 00:09:34,160 --> 00:09:37,360 Speaker 1: This essentially double the liquidity of the central bank from 160 00:09:37,360 --> 00:09:41,040 Speaker 1: four eight hundred billion dollars maybe a trillion. I think 161 00:09:41,040 --> 00:09:45,040 Speaker 1: the strategy will then change and they will probably UH 162 00:09:45,200 --> 00:09:48,640 Speaker 1: increase production because they've been watching the Russian steel market share. 163 00:09:49,400 --> 00:09:52,280 Speaker 1: At at that point they will be able to go 164 00:09:52,320 --> 00:09:55,079 Speaker 1: back to the low price scenario for a for a year, 165 00:09:55,160 --> 00:09:58,360 Speaker 1: to push oil on the market and re establish a 166 00:09:58,440 --> 00:10:01,240 Speaker 1: base to grow from in the future. Year. That's really 167 00:10:01,280 --> 00:10:03,960 Speaker 1: interesting because there's been a lot of expectations ahead of 168 00:10:04,000 --> 00:10:06,480 Speaker 1: the Opeque meeting, ahead of this month, at the end 169 00:10:06,480 --> 00:10:08,440 Speaker 1: of this month, and in some ways, you know, you 170 00:10:08,480 --> 00:10:12,360 Speaker 1: could say that the market has now positioned itself for disappointment. 171 00:10:12,400 --> 00:10:15,960 Speaker 1: Almost I think the market has disappointed, and I don't 172 00:10:15,960 --> 00:10:21,200 Speaker 1: think the Saudis will do anything right now, because what 173 00:10:21,280 --> 00:10:25,280 Speaker 1: they're doing is essentially trying to extract all this money 174 00:10:25,320 --> 00:10:29,440 Speaker 1: that they claim has been taken by graft, and that's 175 00:10:29,440 --> 00:10:31,319 Speaker 1: going to take some time because much of the money 176 00:10:31,400 --> 00:10:36,199 Speaker 1: is overseas and they can't release these people from there 177 00:10:36,240 --> 00:10:38,960 Speaker 1: from this UH prison they have them at at the 178 00:10:39,000 --> 00:10:41,959 Speaker 1: st Regis until they've actually gotten the money back to 179 00:10:42,000 --> 00:10:44,920 Speaker 1: Saudi Arabia because once the people are out, they can 180 00:10:44,960 --> 00:10:47,720 Speaker 1: go to government like the United States or the English 181 00:10:47,760 --> 00:10:49,520 Speaker 1: government and say the money was taken from us and 182 00:10:49,559 --> 00:10:53,280 Speaker 1: to arrest and the Saudia Council be frozen. So they 183 00:10:53,320 --> 00:10:55,199 Speaker 1: need to work it. But if you look, I think 184 00:10:55,200 --> 00:10:57,240 Speaker 1: the key individual in this whole thing is is not 185 00:10:57,280 --> 00:11:00,640 Speaker 1: the crown Prince but at al Jabbar, who's the foreign 186 00:11:00,720 --> 00:11:03,200 Speaker 1: minister and who has been if you go back to 187 00:11:04,080 --> 00:11:07,360 Speaker 1: he was a spokesman when when they invaded Kuwait, and 188 00:11:07,440 --> 00:11:10,320 Speaker 1: he his father was the ambassador to Germany, and he's 189 00:11:10,400 --> 00:11:13,400 Speaker 1: just a he's really the leading person. You know. The 190 00:11:13,400 --> 00:11:16,920 Speaker 1: best best example is to read a book by Machiavelli 191 00:11:17,000 --> 00:11:21,440 Speaker 1: which really describes what he's doing. Uh, and that changes. 192 00:11:22,080 --> 00:11:24,880 Speaker 1: That's going to change what happens to prices. But Tom, 193 00:11:24,920 --> 00:11:27,560 Speaker 1: I don't think. I think the question is could they 194 00:11:27,600 --> 00:11:31,120 Speaker 1: go much lower? And the answer is probably they can't. Well, 195 00:11:31,240 --> 00:11:33,360 Speaker 1: then that is the eu listicity. You talk about the 196 00:11:33,920 --> 00:11:38,160 Speaker 1: desire to drill and the idea that cash will chase drilling. 197 00:11:38,600 --> 00:11:41,080 Speaker 1: I get the idea of cash chasing a hundred dollars 198 00:11:41,080 --> 00:11:46,240 Speaker 1: of barrel? Does cash want to chase fifty seven dollar? There? Yes, 199 00:11:46,400 --> 00:11:49,920 Speaker 1: there was a very good presentation that the Energy Information 200 00:11:49,920 --> 00:11:52,200 Speaker 1: Agency had last week. It's on on. There was a 201 00:11:52,200 --> 00:11:55,520 Speaker 1: webcast and RICE did, which is a consulting firm that 202 00:11:55,840 --> 00:11:58,440 Speaker 1: goes down to the very nitty gritty, laid out a 203 00:11:58,440 --> 00:12:01,560 Speaker 1: case where it's sixty the barrel. By the end of 204 00:12:01,600 --> 00:12:04,800 Speaker 1: twenty we have four million barrels a day of production 205 00:12:04,920 --> 00:12:09,480 Speaker 1: from UH from the Permian, and if it's thirty five dollars, 206 00:12:09,480 --> 00:12:12,040 Speaker 1: we're down at two million barrels a day. And they 207 00:12:12,040 --> 00:12:13,920 Speaker 1: did it almost on a well by well basis. And 208 00:12:13,920 --> 00:12:16,040 Speaker 1: if you blow this up to the United States, the 209 00:12:16,080 --> 00:12:18,880 Speaker 1: swing is probably three or four million barrels a day, 210 00:12:18,920 --> 00:12:22,280 Speaker 1: so they really need it down They can make money 211 00:12:22,360 --> 00:12:24,920 Speaker 1: according to Rice dead and according to everybody else, at 212 00:12:26,040 --> 00:12:28,840 Speaker 1: at five dollars a barrel. And if you look at 213 00:12:28,880 --> 00:12:33,079 Speaker 1: the futures market, open interest and contracts expiring more than 214 00:12:33,120 --> 00:12:36,640 Speaker 1: twelve months is up by almost six from this time 215 00:12:36,720 --> 00:12:38,679 Speaker 1: last year, so a lot of that oil has been 216 00:12:38,760 --> 00:12:43,240 Speaker 1: hedged through banks or swap dealers and so on. So 217 00:12:43,600 --> 00:12:45,559 Speaker 1: the next year is already in the can and the 218 00:12:45,600 --> 00:12:48,640 Speaker 1: production is going to happen. So in terms of the price, 219 00:12:48,679 --> 00:12:51,440 Speaker 1: then what sort of range are we in and for 220 00:12:51,520 --> 00:12:54,559 Speaker 1: what time period. Well, I think the range we're going 221 00:12:54,600 --> 00:13:01,560 Speaker 1: to be in is upper limit, uh, and it's that's 222 00:13:01,679 --> 00:13:04,760 Speaker 1: probably that's Brent, or it's w t I Houston. The 223 00:13:04,760 --> 00:13:07,160 Speaker 1: other thing that's happening is the world oil center of 224 00:13:07,160 --> 00:13:09,760 Speaker 1: the world oil market has swung to Houston, and there's 225 00:13:09,760 --> 00:13:12,240 Speaker 1: a w t I price in Houston, and the industry 226 00:13:12,280 --> 00:13:17,000 Speaker 1: is trading there. Cushing has become less relevant, although it's 227 00:13:17,000 --> 00:13:20,240 Speaker 1: still the hedging market. But you know, sixty dollars at 228 00:13:20,240 --> 00:13:24,240 Speaker 1: the top side, uh, fifty dollars on the low side. Again, 229 00:13:24,280 --> 00:13:28,400 Speaker 1: assuming Saudi Arabia doesn't do something. And this also assumes 230 00:13:28,440 --> 00:13:32,319 Speaker 1: that the economy keeps growing uh, and it holds together, 231 00:13:32,360 --> 00:13:34,840 Speaker 1: which of course is the first first part of the story. Phil, 232 00:13:34,880 --> 00:13:36,920 Speaker 1: We've got two minutes left with you, not even that, 233 00:13:37,120 --> 00:13:39,320 Speaker 1: And I do want to switch to your historic work 234 00:13:39,320 --> 00:13:42,600 Speaker 1: on neft of decades ago. What are the ramifications that 235 00:13:42,679 --> 00:13:49,440 Speaker 1: you see if the president does away with NAFTA. Um Tom, 236 00:13:49,520 --> 00:13:51,760 Speaker 1: I've been I keep looking at that, and I've looked. 237 00:13:51,760 --> 00:13:54,040 Speaker 1: The more I look at it, the more frightened I get. 238 00:13:55,280 --> 00:13:59,480 Speaker 1: Is that well, because everything moves back and forth across 239 00:13:59,520 --> 00:14:02,920 Speaker 1: the border without duty, and once you take NAFTA off 240 00:14:03,559 --> 00:14:05,439 Speaker 1: it's the same thing you see over here with Brexit. 241 00:14:05,960 --> 00:14:09,360 Speaker 1: I don't know what happens, what happens to manufacturing part production, 242 00:14:09,960 --> 00:14:12,760 Speaker 1: and I know people have done different numbers. My guess 243 00:14:12,840 --> 00:14:16,520 Speaker 1: is GDP is to two percentage points lower twelve months 244 00:14:16,559 --> 00:14:19,000 Speaker 1: after we pulled out of NAFTA. I think it's that 245 00:14:19,120 --> 00:14:21,280 Speaker 1: much because you know, the agricultural sector is going to 246 00:14:21,360 --> 00:14:25,120 Speaker 1: suffer dramatically. I think they everybody says, well, autos will 247 00:14:25,120 --> 00:14:28,320 Speaker 1: do better. No, autos won't because some of the parts 248 00:14:28,320 --> 00:14:30,160 Speaker 1: are made in Mexico and they can't get them back. 249 00:14:30,200 --> 00:14:33,040 Speaker 1: I mean, you can't turn the economy out of the 250 00:14:33,080 --> 00:14:35,720 Speaker 1: doct I mean, you're your Nash. It's hard to get 251 00:14:35,760 --> 00:14:40,440 Speaker 1: parts for your NASH, and it's uh uh you know 252 00:14:40,560 --> 00:14:44,000 Speaker 1: they're gonna have trouble getting parts and they're trying moving manufacturings. 253 00:14:44,000 --> 00:14:48,680 Speaker 1: So it's gonna raise costs. And I think it's the thing. 254 00:14:49,160 --> 00:14:52,240 Speaker 1: My plate plead is, don't do it. Yeah. What I've 255 00:14:52,240 --> 00:14:54,040 Speaker 1: heard from a couple of people's right where you go 256 00:14:54,360 --> 00:14:56,920 Speaker 1: Dirtri Furliger, which is the idea of you're gonna need 257 00:14:56,960 --> 00:14:59,520 Speaker 1: a part for that training and ain't gonna be there. 258 00:14:59,800 --> 00:15:02,000 Speaker 1: So really good, Thank you so much. Honored with your 259 00:15:02,040 --> 00:15:04,840 Speaker 1: visit in London. Really look forward to seeing you in London, 260 00:15:04,880 --> 00:15:08,480 Speaker 1: New York, Calgary or or Aspen. Phil Roger of his 261 00:15:08,560 --> 00:15:13,120 Speaker 1: own pker and of course just wonderful and always controversial. 262 00:15:13,640 --> 00:15:25,680 Speaker 1: On oil. We've of course keeping keeping an eye on 263 00:15:25,760 --> 00:15:28,720 Speaker 1: Chancellor Philip Hammond's budget. The key thing is that growth 264 00:15:28,720 --> 00:15:30,920 Speaker 1: forecast for the UK have been cuts. We've seen a 265 00:15:30,960 --> 00:15:33,600 Speaker 1: little bit of a dip in sterling, also some curve 266 00:15:33,800 --> 00:15:37,440 Speaker 1: flattening in guilt on that cut to the growth outlook. 267 00:15:37,480 --> 00:15:40,360 Speaker 1: But we're also keeping a very close eye on the 268 00:15:40,400 --> 00:15:43,720 Speaker 1: Brexit development and with us to discuss that is Sony Kappa, 269 00:15:43,800 --> 00:15:46,920 Speaker 1: Managing director at Redefined. Sony, great to have you on 270 00:15:46,920 --> 00:15:50,360 Speaker 1: the program and good morning or afternoon to you rather 271 00:15:50,840 --> 00:15:53,600 Speaker 1: in London. So when it comes to the Brexit negotiations, 272 00:15:53,600 --> 00:15:56,840 Speaker 1: we're looking ahead to this December EU summit and it 273 00:15:56,920 --> 00:16:00,120 Speaker 1: seems like finally the UK has given a little at 274 00:16:00,120 --> 00:16:02,800 Speaker 1: the ground on the brexit bill. Prime Minister Theresa May 275 00:16:02,880 --> 00:16:06,280 Speaker 1: ready to put more money on the table to settle 276 00:16:06,360 --> 00:16:10,080 Speaker 1: that divorce bill. How do you see the negotiations going 277 00:16:10,280 --> 00:16:14,040 Speaker 1: in December, Well, I think they are going to be 278 00:16:14,200 --> 00:16:18,640 Speaker 1: very fraud and very difficult and the UK remains in 279 00:16:18,920 --> 00:16:25,280 Speaker 1: a very tricky situation. So even as we have relatedly 280 00:16:25,440 --> 00:16:29,360 Speaker 1: accepted that there is a much higher price to be 281 00:16:29,440 --> 00:16:34,000 Speaker 1: paid for Breakfit, mostly relating to existing obligations of the UK, 282 00:16:35,120 --> 00:16:40,680 Speaker 1: the issue of the Irish border threatens to actually scupper 283 00:16:40,800 --> 00:16:45,040 Speaker 1: the whole negotiations with December. And the background that is 284 00:16:45,280 --> 00:16:51,680 Speaker 1: that the having a border free crossing between Northern Ireland 285 00:16:51,720 --> 00:16:56,560 Speaker 1: and an Ireland in UH is an important part of 286 00:16:56,560 --> 00:17:00,440 Speaker 1: the peace process and that is non negotiable. And of 287 00:17:00,480 --> 00:17:03,760 Speaker 1: course if the UK leaves the EU and Ireland bills 288 00:17:03,880 --> 00:17:07,560 Speaker 1: remain in the EU, there will be a bother and 289 00:17:07,680 --> 00:17:12,080 Speaker 1: the Irish Prime Minister has rightly intervened to say that 290 00:17:12,160 --> 00:17:17,159 Speaker 1: he will veto any further negotiation with the UK unless 291 00:17:17,200 --> 00:17:20,359 Speaker 1: and until the UK is able to give an assurance 292 00:17:20,720 --> 00:17:23,359 Speaker 1: that there will be no hard boded. That of course 293 00:17:23,520 --> 00:17:28,480 Speaker 1: is incompatible with the UK actually leaving the Customs Union, 294 00:17:29,000 --> 00:17:32,560 Speaker 1: which Brexitters want the UK to do and Theresa May 295 00:17:32,600 --> 00:17:35,560 Speaker 1: had said the UK will do so. Money is one 296 00:17:35,640 --> 00:17:39,520 Speaker 1: part of the discussion where the UK has finally agreed 297 00:17:39,600 --> 00:17:43,720 Speaker 1: to double its contribution from twenty billion euros they had 298 00:17:43,720 --> 00:17:47,119 Speaker 1: said to about forty billion as the starting offer, but 299 00:17:47,359 --> 00:17:52,280 Speaker 1: the Irish problem remains completely intractable for now. Right, so 300 00:17:52,359 --> 00:17:55,280 Speaker 1: how what are the chances then? What where would you 301 00:17:55,280 --> 00:17:58,120 Speaker 1: put it in percentage terms of their actually being a 302 00:17:58,160 --> 00:18:06,440 Speaker 1: shift to trade talks in December, uh without some unexpected 303 00:18:06,680 --> 00:18:10,840 Speaker 1: solution or money from Heaven dropping down to come up 304 00:18:10,880 --> 00:18:14,080 Speaker 1: with a reasonable solution to the Irish problem. I would 305 00:18:14,080 --> 00:18:19,760 Speaker 1: say less than twenty right, And already we're hearing that 306 00:18:19,760 --> 00:18:23,840 Speaker 1: that certain banks are making contingency plans to start shifting 307 00:18:24,000 --> 00:18:29,160 Speaker 1: business out of London in the first quarter of next year. 308 00:18:29,680 --> 00:18:34,120 Speaker 1: That's going to accelerate perhaps then. I think what has 309 00:18:34,160 --> 00:18:39,919 Speaker 1: happened is up until about a month back, businesses and 310 00:18:40,040 --> 00:18:44,920 Speaker 1: banks we're waiting and watching to see how things went. 311 00:18:45,520 --> 00:18:48,320 Speaker 1: But this has been a particularly bad month and a 312 00:18:48,359 --> 00:18:52,960 Speaker 1: particularly bad week for the UK, with the decision to 313 00:18:53,240 --> 00:18:57,359 Speaker 1: relocate the European Banking Authority out of London to Paris, 314 00:18:57,480 --> 00:19:02,200 Speaker 1: the European Medicine Agency out of London Amsterdam, making Brexit 315 00:19:02,560 --> 00:19:06,960 Speaker 1: very real and businesses can no longer sit on their 316 00:19:07,000 --> 00:19:10,960 Speaker 1: hands and wait to do their contingency planning. They are 317 00:19:11,080 --> 00:19:13,800 Speaker 1: starting to move and a lot of the exodus will 318 00:19:13,840 --> 00:19:18,159 Speaker 1: actually start even before exit day, if and when it 319 00:19:18,280 --> 00:19:22,560 Speaker 1: does actually happen. Redefine Managing Director Sony Kapaul, thank you 320 00:19:22,600 --> 00:19:24,480 Speaker 1: so much for talking us through some of the briggs 321 00:19:24,560 --> 00:19:39,800 Speaker 1: at risks. What better person to speak to is people 322 00:19:39,920 --> 00:19:43,200 Speaker 1: around the US get ready for the holiday. Julian Mark Heel, 323 00:19:43,320 --> 00:19:47,160 Speaker 1: the points guy, senior analyst with us here on Bloomberg Surveillance. 324 00:19:47,200 --> 00:19:50,479 Speaker 1: Good morning or good afternoon here in the London to you, Julian, 325 00:19:50,520 --> 00:19:53,359 Speaker 1: how are you doing? Good morning and afternoon to you. 326 00:19:54,400 --> 00:19:57,800 Speaker 1: So you're the expert here on travel, people are going 327 00:19:57,840 --> 00:20:02,320 Speaker 1: to be moving around mean unimaginably for me sitting here 328 00:20:02,320 --> 00:20:04,000 Speaker 1: in London where we're just probably going to go to 329 00:20:04,000 --> 00:20:06,320 Speaker 1: the pub around the corner and have some dinner. What 330 00:20:06,400 --> 00:20:09,800 Speaker 1: are your top tips for traveling at this time of year? Yeah, 331 00:20:10,240 --> 00:20:13,400 Speaker 1: when when you're traveling in the holiday season, really anytime, 332 00:20:13,400 --> 00:20:16,720 Speaker 1: but especially during the holiday season. I like to say 333 00:20:16,760 --> 00:20:22,160 Speaker 1: knowledge is power. Come armed with information. For instance, Uh, 334 00:20:22,760 --> 00:20:25,159 Speaker 1: take a look at the map of the airport that 335 00:20:25,200 --> 00:20:27,639 Speaker 1: you're going to be in. You're hopefully leaving a little 336 00:20:27,680 --> 00:20:30,280 Speaker 1: extra time to get there and to you may end 337 00:20:30,359 --> 00:20:32,199 Speaker 1: up in the airport for a little longer than you 338 00:20:32,280 --> 00:20:35,600 Speaker 1: usually do. So make sure you know what food areas 339 00:20:35,600 --> 00:20:38,080 Speaker 1: are in the airport where you might need to take 340 00:20:38,119 --> 00:20:40,960 Speaker 1: your children to have a quick good drink or a 341 00:20:41,000 --> 00:20:43,720 Speaker 1: quick bite while you're waiting for the flight. Also know 342 00:20:44,040 --> 00:20:50,160 Speaker 1: what no, no, no when the children are older. When 343 00:20:50,160 --> 00:20:55,479 Speaker 1: the children are older, they're downstairs in some bar and 344 00:20:55,720 --> 00:21:00,320 Speaker 1: I'm up in the gold loins drinking bottled water. That's 345 00:21:00,320 --> 00:21:05,280 Speaker 1: how it works. Please, that is certainly the ideal, yes, 346 00:21:05,359 --> 00:21:09,560 Speaker 1: but but at the very least, then know which lounges 347 00:21:09,680 --> 00:21:11,879 Speaker 1: in your terminal and which club you can go to, 348 00:21:12,119 --> 00:21:16,840 Speaker 1: and what what will be required for admittance. Also, in 349 00:21:17,000 --> 00:21:20,080 Speaker 1: case your flight ends up being delayed or canceled, know 350 00:21:20,320 --> 00:21:23,720 Speaker 1: what other flights are available with your airline. And that 351 00:21:23,720 --> 00:21:26,320 Speaker 1: doesn't necessarily mean that they have to be bookable, but 352 00:21:26,480 --> 00:21:29,280 Speaker 1: what's actually flying. A lot of people rely on the 353 00:21:29,320 --> 00:21:32,159 Speaker 1: airline agent to tell them what's the next best option. 354 00:21:32,280 --> 00:21:35,240 Speaker 1: But it helps, actually if you already know what flight 355 00:21:35,320 --> 00:21:38,040 Speaker 1: you would like to be rebooked on and specifically ask 356 00:21:38,119 --> 00:21:40,359 Speaker 1: for that. They may not always do it, but if 357 00:21:40,400 --> 00:21:42,600 Speaker 1: you go in, it never hurts to ask, and it 358 00:21:42,720 --> 00:21:45,040 Speaker 1: helps to go in knowing what you want. You know, 359 00:21:45,560 --> 00:21:47,720 Speaker 1: and look at this and we're sort of going into 360 00:21:47,720 --> 00:21:49,680 Speaker 1: the you know, the holiday season, and then I guess 361 00:21:49,680 --> 00:21:52,480 Speaker 1: we're in this slow season. Let's back up. Our flights 362 00:21:52,600 --> 00:21:56,440 Speaker 1: cheaper than they were a year ago. You know, flights 363 00:21:56,880 --> 00:22:00,040 Speaker 1: are not necessarily cheaper or more expensive. But if of 364 00:22:00,080 --> 00:22:04,200 Speaker 1: course all of those fees that the airlines keep tacking on, 365 00:22:04,680 --> 00:22:07,320 Speaker 1: and people are not huge fans of them, but the 366 00:22:07,359 --> 00:22:10,440 Speaker 1: airlines are the enormous fans of them because they're generating 367 00:22:10,480 --> 00:22:13,240 Speaker 1: billions of dollars of extra Okay, well, Heathrow. Let's go 368 00:22:13,280 --> 00:22:16,200 Speaker 1: to Heathrow right now. Every time Nera flies to New York, 369 00:22:16,240 --> 00:22:21,000 Speaker 1: she insists that the surveillance golf stream avoid Heathrow. Come on. 370 00:22:21,040 --> 00:22:24,280 Speaker 1: The fees of Heathrow are insane. The fees that Heathrow 371 00:22:24,320 --> 00:22:28,000 Speaker 1: are a special level of insane because of their departure tax. 372 00:22:28,400 --> 00:22:31,320 Speaker 1: Especially if you're coming out of Heathrow in a premium 373 00:22:31,320 --> 00:22:34,040 Speaker 1: class like business or first even on a point or 374 00:22:34,040 --> 00:22:37,520 Speaker 1: mileage tickets, you're gonna end up paying hundreds of dollars 375 00:22:37,520 --> 00:22:42,600 Speaker 1: for For Bloomberg, Washington is dullest like the airport that 376 00:22:42,680 --> 00:22:45,960 Speaker 1: needs the most investment right now. You know, actually I 377 00:22:46,000 --> 00:22:49,000 Speaker 1: would argue that LaGuardia in New York needs the most investment. 378 00:22:49,080 --> 00:22:52,040 Speaker 1: It's a small airport that hasn't really had the investment 379 00:22:52,080 --> 00:22:54,879 Speaker 1: in years dollars is certainly up there. It could certainly 380 00:22:55,000 --> 00:22:57,000 Speaker 1: use a lot of work and a lot of resources 381 00:22:57,040 --> 00:22:59,600 Speaker 1: put into it, But in my heart, LaGuardia is the 382 00:22:59,600 --> 00:23:01,840 Speaker 1: one that and they are working on LaGuardia, so we'll 383 00:23:01,840 --> 00:23:04,960 Speaker 1: see how it goes. Julian, You've done some work on 384 00:23:05,000 --> 00:23:07,919 Speaker 1: the best and worst airlines in the United States and 385 00:23:07,960 --> 00:23:10,960 Speaker 1: sort of laid out the argument as to whether it's 386 00:23:11,080 --> 00:23:13,480 Speaker 1: really a case of best and worst or whether it's 387 00:23:13,520 --> 00:23:17,960 Speaker 1: just customers perception when it comes to Thanksgiving. I'm guessing 388 00:23:18,000 --> 00:23:21,840 Speaker 1: all the excitement, potentially all the stress if you've got 389 00:23:21,880 --> 00:23:25,000 Speaker 1: lots of kids running around, might have some impact on 390 00:23:25,040 --> 00:23:29,840 Speaker 1: your perception. Two airlines. Two airlines, actually do they pull 391 00:23:29,840 --> 00:23:31,560 Speaker 1: it out of the bag during the holiday or does 392 00:23:31,600 --> 00:23:35,520 Speaker 1: it all actually fall apart? You know, it's it's really 393 00:23:35,560 --> 00:23:38,840 Speaker 1: tough to run an airline. To give them credit, they're 394 00:23:38,880 --> 00:23:44,040 Speaker 1: moving hundreds of thousands of people every day in the 395 00:23:44,040 --> 00:23:47,360 Speaker 1: most and the safest possible transport that's ever been invented 396 00:23:47,359 --> 00:23:51,080 Speaker 1: by humankind, and to do all that and keep people 397 00:23:51,840 --> 00:23:55,200 Speaker 1: happy is a tall order. That's not to say they shouldn't, 398 00:23:55,440 --> 00:23:58,760 Speaker 1: and some airlines, like in our study. Alaska airlines do 399 00:23:58,800 --> 00:24:02,840 Speaker 1: it better than others, like say Spirit and Frontier Um, 400 00:24:02,880 --> 00:24:05,440 Speaker 1: but it's certainly a tall order, and during the holidays 401 00:24:05,440 --> 00:24:08,280 Speaker 1: it's even harder because of the number of people trappling. 402 00:24:08,400 --> 00:24:10,800 Speaker 1: Julian Markue whether is the points guy Brian Kelly was 403 00:24:10,840 --> 00:24:12,439 Speaker 1: going to be with us, but he's in Bali on 404 00:24:12,480 --> 00:24:17,520 Speaker 1: some hundred flight from Dubai. You wanted to know if 405 00:24:17,520 --> 00:24:19,520 Speaker 1: you were going to join him? Tom, Yeah, well yeah, 406 00:24:19,520 --> 00:24:22,200 Speaker 1: I wish that they make kids take all the miles 407 00:24:22,680 --> 00:24:26,080 Speaker 1: Bloomberg surveillance this morning. But you by the accountants, the 408 00:24:26,160 --> 00:24:30,919 Speaker 1: advisors at Eisener Amper. The two thousand seventeen tax season 409 00:24:31,040 --> 00:24:34,320 Speaker 1: it is upon us. Are you ready for the challenges 410 00:24:34,520 --> 00:24:39,879 Speaker 1: they are? Visit eisener Emper dot com slash tax reformed Julian. 411 00:24:40,240 --> 00:24:44,200 Speaker 1: All of this is hinged on charged cards. Who's winning 412 00:24:44,480 --> 00:24:50,280 Speaker 1: the banks or the airlines? Ah, The banks are winning 413 00:24:50,400 --> 00:24:53,879 Speaker 1: as far as getting new customers, and the credit card usage, 414 00:24:53,960 --> 00:24:57,520 Speaker 1: especially in the US, is at record levels. There's a 415 00:24:57,560 --> 00:25:00,159 Speaker 1: lot of fees being made off of those cards, from 416 00:25:00,200 --> 00:25:03,919 Speaker 1: annual fees charged to the consumer to swipe fees charged 417 00:25:04,200 --> 00:25:07,320 Speaker 1: at the merchant level. The airlines are also doing well. 418 00:25:07,359 --> 00:25:10,080 Speaker 1: Because of course they sell those more points and miles 419 00:25:10,119 --> 00:25:13,439 Speaker 1: to the banks. But the banks have really Yeah, the 420 00:25:13,440 --> 00:25:15,919 Speaker 1: banks have really started to develop their own systems like 421 00:25:16,000 --> 00:25:20,520 Speaker 1: Chase Ultimate Rewards and American Express Membership rewards. So they're 422 00:25:20,520 --> 00:25:22,480 Speaker 1: trying to bring it in house as much as they can. 423 00:25:23,480 --> 00:25:24,880 Speaker 1: Judy and I just want to ask you a quick 424 00:25:24,960 --> 00:25:28,240 Speaker 1: question on Ryanair. I mean, here in Europe, the short 425 00:25:28,320 --> 00:25:31,240 Speaker 1: haul market, the low cost market really giving the legacy 426 00:25:31,320 --> 00:25:34,240 Speaker 1: airlines a run for their money. Is it that situation 427 00:25:34,280 --> 00:25:36,679 Speaker 1: in the US or not so much. We have a 428 00:25:36,880 --> 00:25:40,719 Speaker 1: similar situation with Frontier and Spirit on the low cost end, 429 00:25:41,080 --> 00:25:44,600 Speaker 1: It's not quite as intense as Ryanair does it. Ryanair 430 00:25:45,000 --> 00:25:48,840 Speaker 1: is running a Black Friday sale right now with prices 431 00:25:48,880 --> 00:25:53,560 Speaker 1: as low as four nine. It's left four dollars and 432 00:25:54,200 --> 00:25:57,600 Speaker 1: cents or four euro and cents, So we we haven't 433 00:25:57,600 --> 00:26:00,719 Speaker 1: reached that level yet. Ryan Air has a special, uh 434 00:26:01,040 --> 00:26:04,200 Speaker 1: special kind of touch with that, but it's it's certainly 435 00:26:04,480 --> 00:26:06,840 Speaker 1: something that the US air lines see them doing and 436 00:26:07,200 --> 00:26:11,400 Speaker 1: either have to compete or match. The thing is Ryanair 437 00:26:11,560 --> 00:26:14,119 Speaker 1: under a lot of challenges at the moment with the 438 00:26:14,160 --> 00:26:18,919 Speaker 1: pilots unions. Yes, the pilots are as many of your 439 00:26:18,960 --> 00:26:21,399 Speaker 1: listeners may know the there was a bit of a 440 00:26:21,440 --> 00:26:24,600 Speaker 1: snap who it Ryanair last month when they had to 441 00:26:24,640 --> 00:26:28,680 Speaker 1: cancel thousands of flights because by their own admissions, they 442 00:26:28,800 --> 00:26:32,480 Speaker 1: the airline messed up their pilots holiday schedule and they 443 00:26:32,560 --> 00:26:35,679 Speaker 1: ended up canceling fifty or more flights a day for 444 00:26:35,760 --> 00:26:38,679 Speaker 1: a period of six weeks. Uh and Ryanair didn't do 445 00:26:38,800 --> 00:26:42,399 Speaker 1: themselves any favors with their customers because, at least at first, 446 00:26:42,680 --> 00:26:45,520 Speaker 1: they weren't telling their customers more than five days in 447 00:26:45,560 --> 00:26:49,120 Speaker 1: advance which flights were going to be canceled. After some 448 00:26:49,840 --> 00:26:52,920 Speaker 1: strong customer reaction, they reversed that policy and put out 449 00:26:52,960 --> 00:26:55,280 Speaker 1: a list. But it's come now to a head with 450 00:26:55,480 --> 00:27:01,480 Speaker 1: the pilots union. Ryan Harris traditionally negotiated directly with the 451 00:27:01,600 --> 00:27:05,400 Speaker 1: members of their airline hubs, in other words, a set 452 00:27:05,440 --> 00:27:08,880 Speaker 1: of about eighty or so groups they would negotiate their 453 00:27:08,920 --> 00:27:11,760 Speaker 1: contracts with, and that was a bit of a divide 454 00:27:11,760 --> 00:27:14,800 Speaker 1: and conqueror strategy because you can play one off the other. 455 00:27:15,119 --> 00:27:18,560 Speaker 1: Now Ryanair's pilots want to form a single trade union 456 00:27:18,560 --> 00:27:23,320 Speaker 1: and negotiate with just one committee. Yeah, Julians, just one 457 00:27:23,320 --> 00:27:27,800 Speaker 1: more question our our perception as pilots make big, big 458 00:27:27,840 --> 00:27:31,320 Speaker 1: six figure numbers, and you know they work like six 459 00:27:31,359 --> 00:27:35,960 Speaker 1: hours a week. That's the reality in two, is it. 460 00:27:35,960 --> 00:27:39,400 Speaker 1: It's not, especially when you get down to the regional carriers, 461 00:27:39,400 --> 00:27:42,679 Speaker 1: where a starting pilot there might only make twenty or 462 00:27:42,720 --> 00:27:46,680 Speaker 1: thirty thousand dollars a year. Could that be there? How 463 00:27:46,720 --> 00:27:49,320 Speaker 1: can that be? I mean the kid for starters, A 464 00:27:49,440 --> 00:27:53,359 Speaker 1: kid looks like my grandchild. He so the pilot? Are 465 00:27:53,400 --> 00:27:56,840 Speaker 1: you telling me the pilots making five a year? In 466 00:27:56,960 --> 00:28:01,160 Speaker 1: some cases now, because there's been such a pilot short recently, 467 00:28:01,240 --> 00:28:03,960 Speaker 1: they are starting to get sign up bonuses so that 468 00:28:04,040 --> 00:28:07,480 Speaker 1: they'll come and work for the originals. But yes, when 469 00:28:07,520 --> 00:28:09,720 Speaker 1: you're starting out, you need your hours and you don't 470 00:28:09,720 --> 00:28:12,240 Speaker 1: have a lot of time in the cockpit. You you 471 00:28:12,320 --> 00:28:14,280 Speaker 1: spend a lot of time in the air for not 472 00:28:14,359 --> 00:28:16,800 Speaker 1: a ton of money. I know more than one pilot 473 00:28:16,800 --> 00:28:22,520 Speaker 1: who supplements her income by waitressing. There you go, don't 474 00:28:22,520 --> 00:28:25,320 Speaker 1: be a stranger. Tell Brian when he gets back that 475 00:28:25,440 --> 00:28:27,200 Speaker 1: he used to go away again on one of his 476 00:28:28,560 --> 00:28:31,520 Speaker 1: two dollar trips to an article. We'd rather talk you 477 00:28:31,960 --> 00:28:35,200 Speaker 1: j Julian killed there. Julian kill with the points guy, 478 00:28:36,720 --> 00:28:40,920 Speaker 1: Thanks for listening to the Bloomberg surveillance podcast. Subscribe and 479 00:28:41,000 --> 00:28:46,320 Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast 480 00:28:46,360 --> 00:28:50,600 Speaker 1: platform you prefer. I'm on Twitter at Tom Keane before 481 00:28:50,640 --> 00:28:54,480 Speaker 1: the podcast. You can always catch us worldwide. I'm Bloomberg 482 00:28:54,560 --> 00:29:00,960 Speaker 1: Radio