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Speaker 1: This is the Bloomberg Surveillance Podcast. I'm Tom Keane, along

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Speaker 1: with Jonathan Farrow and Lisa Abramowitz. Join us each day

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Speaker 1: for insight from the best an economics, geopolitics, finance and investment.

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Speaker 1: Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and

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Speaker 1: anywhere you get your podcasts, and always on Bloomberg dot Com,

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Speaker 1: the Bloomberg Terminal, and the Bloomberg Business App. We're started

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Speaker 1: to bring you. The chairman of Evercore, Isi at Heimann

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Speaker 1: joins us for a midyear update. I wanted a little

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Speaker 1: history at John's got like six serious questions. I'm calling

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Speaker 1: the October Bottom, the Ralphankopora, Edward Yard Denny Bottom. Many

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Speaker 1: other people were out there as optimistic, but Edyard Denny

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Speaker 1: absolutely nailed the bottom. You basically gave him his job.

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Speaker 1: You were at CJ. Lawrence a million years ago. I

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Speaker 1: read your research worshipfully, and you went out the door

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Speaker 1: to set up your own shop, and Yard Denny replaced you.

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Speaker 1: Is that true?

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Speaker 2: So I had to deal with my boss then, Jim Molt,

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Speaker 2: who ran the firm, that I wouldn't leave until we've

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Speaker 2: got a replacement. And so Jim came in and said,

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Speaker 2: Ed you can leave.

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Speaker 1: I said, oh, the imbred optimism that Ed Heyman has

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Speaker 1: an ed Yard Denny has. What does the gloom crew

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Speaker 1: get wrong here about the need to understand America will persevere?

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Speaker 2: So I think we're going to have a recession. And

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Speaker 2: I follow ed Yard any closely and I just read

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Speaker 2: his piece over the weekend where he's doesn't have a recession.

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Speaker 2: And I've been through this more time than anybody on

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Speaker 2: your show. The He'll curve works, and the you'll curve

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Speaker 2: is really inverted, and then if that doesn't do it,

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Speaker 2: you have a contraction and the money supply the most

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Speaker 2: since the nineteen thirties, and then you have a significant

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Speaker 2: recent rates plus QT and so Mike Tyson could get

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Speaker 2: you with any one of those much less. It's got

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Speaker 2: three shots.

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Speaker 1: And so.

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Speaker 2: I just have to add that.

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Speaker 3: From when the.

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Speaker 2: Yell curve inverts, it can take eighteen months for the

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Speaker 2: economy to go into recession, and just before it goes

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Speaker 2: into recession it looks great. It's a very humbling business.

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Speaker 2: And Tom, I got to say, I have not been

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Speaker 2: forecasting a recession for the past year. I fought last

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Speaker 2: year the two down quarters like crazy and I have

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Speaker 2: the third quarter down, which seems too aggressive, but I'm

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Speaker 2: pretty flexible, but I'm sure it's coming.

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Speaker 3: Does this have a preweight feel to it in that regard.

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Speaker 2: Not really just except for the yell curve, but that

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Speaker 2: the wait my ment specifically, well for sure on that,

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Speaker 2: and it's playing out pretty much like that. But you

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Speaker 2: don't have the housing bubble, you don't have something that

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Speaker 2: would cause a severe recession like we had in eight

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Speaker 2: or nine.

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Speaker 3: Where are you on the inflation backdrop at the moment?

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Speaker 3: We had a guest in the Lost down rows So

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Speaker 3: who suggested that inflation expectations are bottominc botsomic for the cycle,

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Speaker 3: that ultimately inflation is going to be sticky and a

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Speaker 3: recession won't address it.

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Speaker 2: So I'm on the other side big time. So I

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Speaker 2: just looked before I came over here at gasoline prices,

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Speaker 2: which have a big influence on inflation expectations. Inflation expectations

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Speaker 2: have come down significantly, but they also are influenced by

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Speaker 2: gasoline prices, and the futures have gasoline prices going down

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Speaker 2: another ten cents in the next six weeks, not a

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Speaker 2: big move, but not up twenty cents, and gasoline prices

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Speaker 2: where they were fifteen years ago. So inflation is coming

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Speaker 2: down around the world. They just reported this morning the

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Speaker 2: PPI for the Eurozone was now in deflation minus one

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Speaker 2: and a half percent, which you reported, and then last

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Speaker 2: week the Spain CPI went below two percent for the

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Speaker 2: first time. So I try and connect the dots the

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Speaker 2: best I can, and it looks to me as though

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Speaker 2: inflation is really going down. And with that policy backdrop

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Speaker 2: I mentioned, it's going to keep going down.

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Speaker 3: We let's build on that. So we've got you on growth,

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Speaker 3: got you on inflation, build on the policy backdrop. Most

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Speaker 3: people anticipating now the FED goes again this month, right,

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Speaker 3: maybe goes again after that. Where are you doing the

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Speaker 3: scene now?

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Speaker 2: So Chrishna Guha does our FED work. He has one

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Speaker 2: more and done, and so that's what I would follow.

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Speaker 2: At this point, the one more is baked in the cake.

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Speaker 2: I think anything from now is a mistake. They're just

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Speaker 2: creating a deeper recession or the more likelihood of a recession.

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Speaker 2: But at you know, five and at quarter, with the

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Speaker 2: bonyle at three eighty, they're pretty much done and inflation slowing.

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Speaker 2: The FED height rates in March of twenty twenty two,

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Speaker 2: and at that point inflation had already gone crazy, and

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Speaker 2: they were still doing the transitory and then they were

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Speaker 2: still doing Q. They're still doing Q and so, and

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Speaker 2: as I can tell, by the time they by the

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Speaker 2: time they cut rates, inflation will be so far down

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Speaker 2: it'll make them look a little wrong.

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Speaker 1: Forted together, in the years, you've been considered for a

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Speaker 1: FED president, certainly as a FED governor as well. And

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Speaker 1: what did this FED get wrong? Was it too much communication?

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Speaker 1: Were we advantaged with the silence of green spin.

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Speaker 2: I think it's very difficult to have three hundred PhDs

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Speaker 2: make a forecast, not buttering you up town. But I'd

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Speaker 2: rather have you make that forecast than three hundred PhDs.

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Speaker 1: Mike said, I can't do Mike walked in one day.

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Speaker 1: So Tom, I don't need any forecasts on air continue.

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Speaker 2: And so I think it's it's just part of the

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Speaker 2: stickiness of the decision making.

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Speaker 1: It's by committee.

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Speaker 2: It's by committee. And I also tend to try and

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Speaker 2: always go where the puck is going to put it

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Speaker 2: in your terms, and boy, the evidence, the evidence that

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Speaker 2: things are slowing on inflation is really pretty awesome.

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Speaker 1: We're going to have you back but you hired Gretzky.

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Speaker 1: How's Julian Emmanuel doing to me? Like his his weekly

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Speaker 1: note during earning season is the most valuable thing that

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Speaker 1: comes over the transom. And what I want to say

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Speaker 1: is this guy captured the equity market left maybe not

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Speaker 1: all tech tech. He didn't tell you to buy him Vidio.

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Speaker 1: But is Julian Emanuel doing okay? Over at the show

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Speaker 1: doing great?

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Speaker 2: So we have an open office, I learned from Mike Bloomberg.

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Speaker 2: So I have a desk, and I have Rich Ross,

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Speaker 2: and then I have Julian Emmanuel. And where within I

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Speaker 2: wouldn't say shouting distance with her? In talking distance?

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Speaker 1: Is he talking about a second leg of the bullmarket?

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Speaker 1: Like Edheiman nailed? Got to be quick here, but second

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Speaker 1: leg of the bullmarket?

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Speaker 2: All of a sudden he cautious, cautiously, up, very cautiously.

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Speaker 3: They separate Tom and in the office you know that

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Speaker 3: I didn't know, so that we're not allowed to sit

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Speaker 3: next to each other at Hymen.

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Speaker 1: I want you to talk about the hallmark of your

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Speaker 1: work back to CJ. Lawrence, And that's the granularity of

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Speaker 1: studying data. Does the granularity of freight rates? This that

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Speaker 1: the green spanning and data study still work in a

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Speaker 1: modern high tech age.

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Speaker 2: Or it's even better. Why because there is so much

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Speaker 2: high quality data now, you know, generated by a computer.

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Speaker 2: And so I really think that my success in studying

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Speaker 2: the economy and forecasting comes from being more granular. So

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Speaker 2: the FED seems to look at one data point that

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Speaker 2: comes out like the super core, and I've looked at

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Speaker 2: maybe twenty at that point, and like what Michael was

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Speaker 2: talking about on the employment number, there's a lot of

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Speaker 2: data points and they're generally pretty darn strong for employment.

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Speaker 2: So we're estimating two twenty Alan Zentner, I think is terrific.

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Speaker 2: But I don't see that sub one hundred number or

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Speaker 2: a really low number in the data that we get

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Speaker 2: so far, like unemployment claims or we servey employment agencies

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Speaker 2: once a week.

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Speaker 1: I look at the data, and I mean the hallmark

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Speaker 1: here across the decades is we used to aggregate off

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Speaker 1: the revolution of nineteen forty seven, the way we bring

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Speaker 1: in macrodata. Do you, what, ever, core ISI still aggregate

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Speaker 1: or are you partitioning out now for different quintiles, death

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Speaker 1: siles or John Edwards to Americas? Can you aggregate still? Yes?

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Speaker 2: But you have to take into account the different pieces,

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Speaker 2: and right now the manufacturing sector is pretty weak maybe

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Speaker 2: inner session, and many other parts of the economy are

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Speaker 2: doing quite well. Services like over the holiday July fourth,

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Speaker 2: and you also have home buildings now actually coming back.

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Speaker 2: It's been very strong and has accelerated in the past

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Speaker 2: couple of months.

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Speaker 1: Right you took a kufel Annuncer slide rule from Texas

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Speaker 1: to MIT. I don't know if you study was solo

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Speaker 1: there after fifty seven productivity, but explain the evercore ISI

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Speaker 1: view on America's productivity given the new technology over there.

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Speaker 1: You're an optimist or not.

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Speaker 2: I'm an optimist, but it's not in the numbers. One

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Speaker 2: of the phrases is proctivity is everywhere but in the numbers.

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Speaker 2: But you know, what you do has enormous proctivity, and

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Speaker 2: what I do, frankly has enormous proctivity. But it's but

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Speaker 2: you're not getting it period right now in the numbers

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Speaker 2: and plumbent's good, but the economy is still slowing.

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Speaker 1: I think, what do you think about the Frenzy Gloom Crew,

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Speaker 1: particularly they come out every Friday. Friday seems to you know,

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Speaker 1: you're published for the weekend and that. But the I

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Speaker 1: mean we've always worried back. I mean think of eighty

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Speaker 1: seven or the August of nineteen ninety eight. The worry,

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Speaker 1: the angst has always been there, but there seems to

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Speaker 1: be a different character to have gloomed. How do you

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Speaker 1: respond to that?

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Speaker 2: So the forecast for recession was virtually unanimous a few

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Speaker 2: months ago, and now there are many people going to

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Speaker 2: a non recession forecast. I am the most parish I've

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Speaker 2: ever been on the economy without being in a recession.

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Speaker 2: It's because of the yell curve, the contraction of money

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Speaker 2: and QT at the same time they're hiking rates.

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Speaker 1: That three.

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Speaker 2: Blow hit to the economy is going to cause recession,

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Speaker 2: but it doesn't happen overnight.

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Speaker 1: So can you own stocks given the statement you just

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Speaker 1: made that you're the most gloomy you've ever are you

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Speaker 1: all in cash or can you own ebodies and participate?

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Speaker 2: So I mentioned I think three times now the six

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Speaker 2: oh seven going into eight, and the S and P

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Speaker 2: went up twenty and peaked like two months before the

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Speaker 2: Great Recession hit. Boys, it tough, and so right now

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Speaker 2: I think the economy is doing well and the stock

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Speaker 2: markets going up the technicals are good, and so I

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Speaker 2: think we'll keep going up until it looks like we're

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Speaker 2: about to hit the recession. And that's not today.

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Speaker 1: I got two minutes left. You're the only one who

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Speaker 1: hasn't moved to Florida. You are part of the New

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Speaker 1: York City fabric. Explain how you view the future of

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Speaker 1: this great city.

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Speaker 2: It's very tough because so many people are moving to Florida,

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Speaker 2: but this city is so vibrant just being here with you,

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Speaker 2: which I know you love the city and all the

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Speaker 2: institutions in.

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Speaker 1: Never bet against New York. That's the only reason I

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Speaker 1: got this job. That the mayor at the time, he said,

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Speaker 1: you're hired.

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Speaker 2: Anyway, as long as Mike Bloomberger is here. I think

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Speaker 2: we're here.

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Speaker 1: Okay, what do we do with the FED? One final question?

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Speaker 1: What's the fed Aedheimen FED strategy here forward?

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Speaker 2: So they're gonna hike one more and then they're done.

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Speaker 1: When did they cut? Uh? Probably?

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Speaker 2: You know, I think towards the end of this year,

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Speaker 2: but maybe early next year. But I can I can

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Speaker 2: look down the street, I can't see around the corner,

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Speaker 2: but when I get to the corner, you'll have a

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Speaker 2: much better idea.

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Speaker 1: Just a smoke from Canada. That's why I can't see

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Speaker 1: Ed Hyman. Thank you so much. I know you've got

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Speaker 1: a run here. He is with evercore Isi and truly

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Speaker 1: iconic on the street today. In your equity belief, we're

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Speaker 1: going to bring it over to the fixed in comes

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Speaker 1: to face. Thomssorus Jones has not had a fixed income

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Speaker 1: research at stigas it is a bird company. You have

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Speaker 1: the huge advantage Tom of working with one Jay Trennert,

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Speaker 1: who does beautiful quality stock free cash flow persistency of

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Speaker 1: profit analysis, did it with Adheimen and will join us

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Speaker 1: here later. You guys own the high ground on the

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Speaker 1: linkage of equity analysis into your bond analysis. What does

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Speaker 1: your bond analysis say about a second leg of a

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Speaker 1: bull market?

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Speaker 4: Ah, highly unlikely. And with that said, we recognize that

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Speaker 4: the equity market seems to disagree with that hypothesis. But

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Speaker 4: when we look at that inverted yield curve, what we

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Speaker 4: see is a market an economy which has is already

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Speaker 4: facing excessive tightening from the Federal reserve. That is, the

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Speaker 4: Federal Reserve is already tightened to the point where Main

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Speaker 4: Street is feeling the pinch. But When you see, as

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Speaker 4: you mentioned earlier, financial conditions easing, what you also see

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Speaker 4: is a financial market where the FED has not tightened

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Speaker 4: enough on Wall Street. So one of the ways we

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Speaker 4: phrase this is, when you use the FED funds rate

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Speaker 4: to tighten, you put most of the pain on Main Street.

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Speaker 4: When you use the balance sheet to tighten, you put

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Speaker 4: most of the pain on Wall Street. The FED has

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Speaker 4: not tightened enough on Wall Street. By using the balance

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Speaker 4: sheet to reduce liquidity in the financial system, they've already

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Speaker 4: tightened excessively on Main Street. So a recession still seems

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Speaker 4: inevitable to us in the second half of the year,

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Speaker 4: and that has got to impact earnings on the equity side.

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Speaker 1: As a thermometer, I'm gonna look at the inflation adjusted

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Speaker 1: ten year yield. There's other metrics as well that are

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Speaker 1: sophisticate lesi source uses, but I'm gonna look at the

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Speaker 1: ten year real yield at one point five to eight

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Speaker 1: up percent, maybe it was one point six to two,

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Speaker 1: getting a little lofty. Do you anticipate that that will

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Speaker 1: break out to a higher real yield? And what level

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Speaker 1: is normal of the higher real yield?

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Speaker 4: Well, a normal might be keep in mind we only

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Speaker 4: have about twenty five years of actual data on real

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Speaker 4: yields I yesterday back to the tips market of ninety

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Speaker 4: seven ninety eight, normal might be one hundred and fifty

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Speaker 4: bases points. So we're roughly at what you might expect

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Speaker 4: to be a normal real interest on ten year treasury. Now,

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Speaker 4: with that said, we do not necessarily expect ten year

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Speaker 4: real yields to rise much from here because we expect

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Speaker 4: inflation expectations to get Inflation itself is getting close to

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Speaker 4: bottoming this cycle. We think it's going to be very

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Speaker 4: difficult for the Fed to get inflation below three percent,

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Speaker 4: and we've already gotten expectations below three.

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Speaker 1: The headline there, John is on the edge of beyonco.

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Speaker 1: I mean, this is the second time in forty eight hours.

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Speaker 3: That phras I almost thought you misspoke. You think inflation

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Speaker 3: expectations are bottoming for this cycle.

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Speaker 4: Yes, and that's because we buy into the hypothesis that

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Speaker 4: inflation is going to remain sticky and that the Fed

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Speaker 4: does not have the stomach to do what it takes

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Speaker 4: to permanently bring this structural inflation back to a neutral.

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Speaker 4: By that, we mean do excessive damage to the labor

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Speaker 4: market bring aggregate demand well below potential. That's what's required,

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Speaker 4: and that's a pretty deeper session. We don't think the

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Speaker 4: Fed has the appetite to do that.

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Speaker 3: You ju'mp buy into the vulcaresque delivery of cham and

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Speaker 3: pound in late August last year. No, I don't.

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Speaker 4: If they were serious about bringing inflation in line with

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Speaker 4: long run targets, they would have reduced the balance sheet

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Speaker 4: at probably three times the pace they're going on.

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Speaker 3: So, just to be clear on the pane of sheet cool,

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Speaker 3: you think they should be more aggressive with QT, You

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Speaker 3: don't think they will be?

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Speaker 4: Oh, absolutely exactly both to them.

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Speaker 3: Yes, to both of those.

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Speaker 4: We think they should have been more aggressive, but we

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Speaker 4: think they will not be.

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Speaker 1: I'm fascinated by this. Jim Bianco out in Chicago, and

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Speaker 1: you guys have a call of a dis disinflation. We're

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Speaker 1: gonna disinflate, come down and then at three percent, what

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Speaker 1: do you do reverse and go up? How much? What's

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Speaker 1: that model show?

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Speaker 4: Well, right now we're expecting a bottom around three percent.

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Speaker 4: We'll call it your overra headline CPI. On a quarter

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Speaker 4: over quarter basis, we might see inflation dip below three

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Speaker 4: percent fairly easily. But you start to see around three percent,

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Speaker 4: the FED gets weak knees. You start to see that

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Speaker 4: the labor market is getting to a point where to

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Speaker 4: bring inflation down much lower, you gotta do a substantial

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Speaker 4: amount of damage because all of a sudden, businesses are

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Speaker 4: no longer hoarding staff. They're laying off staff they do need,

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Speaker 4: and that's demand destruction, and that's a bigger recession ahead

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Speaker 4: of twenty twenty four that the FED probably go again.

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Speaker 1: Does it bring it over to Jason Trunnet's work. If

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Speaker 1: I have a sustained three percent, which is your minimum call,

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Speaker 1: maybe actually higher, that gives me a nominal GDP that's extraordinary.

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Speaker 1: Does that support well run companies in America?

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Speaker 4: Well, that supports companies that have low borrowing costs. That

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Speaker 4: supports companies that have bargaining power or pricing power in

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Speaker 4: their industry and strong management and have basically barriers to

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Speaker 4: entry as well. It doesn't support companies.

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Speaker 1: It describes john Ford Stocks.

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Speaker 4: And we'll look at the Russell two Forty five percent

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Speaker 4: of the companies in the Russell two thousand don't fit that.

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Speaker 4: They're the exact opposite.

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Speaker 3: These are big cos if you're expecting inflation expectations to

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Speaker 3: bought them out. What is that LAFE fixed income for

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Speaker 3: people sitting in the tenure right now? Taking on a

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Speaker 3: bit more, you're ration, what are your tuning them?

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Speaker 5: Well?

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Speaker 4: Right now, let's say ten year treasury at three eighty five.

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Speaker 4: That actually looks attractive to us. In a environment where

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Speaker 4: the US economy goes into recession, real yields come down,

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Speaker 4: inflation expectations really.

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Speaker 3: Don't move much. They might even go up.

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Speaker 4: You still have downside and ten year treasury yield up

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Speaker 4: down to maybe a three percent to three and a

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Speaker 4: quarter percent. But let's put that in perspective. The average

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Speaker 4: recession sees a ten year treasury drop two hundred and

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Speaker 4: twenty five to two hundred and fifty basis points. That's

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Speaker 4: probably not going to happen this cycle.

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Speaker 3: At most.

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Speaker 4: We're looking at that ten year going from four to

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Speaker 4: thirty where it peaked last year, maybe down to a

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Speaker 4: three twenty to three percent.

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Speaker 3: This is really important stuff. What we're discussing here is

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Speaker 3: ultimately how the bum market's going to behave in what

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Speaker 3: you've described, and I'll put a name on it, and

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Speaker 3: a saxflation we will yep. Is that correct?

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Speaker 1: Yes?

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Speaker 3: Exactly?

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Speaker 4: And again we're looking at positive total return in a

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Speaker 4: ten year treasury. We'll call it a seven percent total

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Speaker 4: return upside when yields drop, And if you're levered three

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Speaker 4: times like many funds are, that's a twenty percent return

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Speaker 4: that offsets maybe a twenty five to thirty percent loss

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Speaker 4: on the x what he said. But the thing is,

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Speaker 4: you're not looking at a fifty percent return in treasuries.

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Speaker 4: You're looking at a six percent, seven percent levered up

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Speaker 4: to twenty percent.

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Speaker 3: Amazing, some just amazing.

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Speaker 1: I really can't say enough. You know, we're making jokes

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Speaker 1: about it, folks. We're going to the summer. We're getting

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Speaker 1: lazy and sloppy like everybody else. It's an incredibly holiday

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Speaker 1: shortened week. We're compressing three days john of serious economic analysis.

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Speaker 1: And I got two competent shops, Bionco and Strtigas saying

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Speaker 1: the same thing that we're gonna diss I'm making this

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Speaker 1: word up, dis disinflate.

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Speaker 3: Well that let's all brand new. That phrase. Just this

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Speaker 3: idea that inflation expectations are bottoming out for the cycle.

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Speaker 3: That is not what this feder Reserve Tom wants to

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Speaker 3: hear at all, at all. No, So twenty five in

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Speaker 3: July is what most people anticipate, some people saying maybe

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Speaker 3: another twenty five, the Committee suggesting that might be the

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Speaker 3: direction of travel, and then you think they're done as well.

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Speaker 3: I think so, And let's keep this in mind.

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Speaker 4: The higher they go with the Fed funds rate, the

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Speaker 4: more likely they are to reach their target of two

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Speaker 4: percent inflation. But we just don't think that they have

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Speaker 4: the stomach to keep doing this. There's gonna be demand destruction.

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Speaker 4: And you've got to also look at the second half

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Speaker 4: of the year. The two stories in the second half

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Speaker 4: of the year. Obviously, recession risk is one of them.

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Speaker 4: The other one is you're looking at massive liquidity drain

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Speaker 4: from the treasury raising cash and adding back to its

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Speaker 4: Treasury General account. And you're looking at the FED continuing

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Speaker 4: to reduce its balance sheet, albeit at a very slow pace.

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Speaker 4: So if the Fed were to go to let's say

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Speaker 4: a six percent Fed funds rate, of course the chances

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Speaker 4: of them bringing inflation down are much higher. But I

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Speaker 4: don't see them doing that because it's already liquidity drag

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Speaker 4: or liquidity drain coming in the second half.

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Speaker 3: Well, you o code in recession anyway, yep, And a

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Speaker 3: recession that comes without right cuts.

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Speaker 4: For now, Yes, because I do think where the FED

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Speaker 4: will be sticky. And keep in mind, I don't think

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Speaker 4: the FED is going to go to six percent Fed

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Speaker 4: funds rate, but I do think they're gonna hold the

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Speaker 4: funds rate at whatever they terminate, five and a quarter,

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Speaker 4: five and a half, whatever it is, They're gonna hold

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Speaker 4: it there for as long as possible, and then they're

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Speaker 4: gonna cut. So that means now we're looking at those

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Speaker 4: first cuts probably coming in February of next year.

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Speaker 3: The WORL would you describe, so stack flashin a FED

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Speaker 3: that's not went into crush inflation ultimately might start cutting

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Speaker 3: next year. Sounds pretty dreadful for risk assets, doesn't it?

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Speaker 3: Recession as well all these codes that you've got, It

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Speaker 3: absolutely does.

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Speaker 4: And I think the silver lining here is that eventually

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Speaker 4: they do cut. And because you're looking at an economy

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Speaker 4: that is still relatively balanced for the most part at

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Speaker 4: this point, you're not looking at extreme excesses and housing

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Speaker 4: in energy investment, Your recession is shallow and there should

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Speaker 4: be more of a V shaped bounce off of it

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Speaker 4: once we reach that trough.

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Speaker 3: Well, how'd you get the vey if it's shallow?

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Speaker 4: Just to build on that just fondly, because you do

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Speaker 4: get a FED that does eventually cut aggressively in twenty

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Speaker 4: twenty four, twenty five.

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Speaker 3: And it's just one of those conversations that later on

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Speaker 3: today I'm going to replay and listen back to. This

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00:21:50,480 --> 00:22:03,399
Speaker 3: was great Tom to Sourus that a strategist with this

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Speaker 3: around a table, David Leibovitz Global Market's trying to just

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Speaker 3: a JP Morgan Asset Management. David want to put a

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Speaker 3: catch up with you, sir, post your life fourth and

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Speaker 3: I hope you had a wonderful holiday. Let's start there.

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Speaker 3: You missed it. What do you do now?

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Speaker 5: So I think what's interesting is that we all missed it.

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Speaker 5: You know, people came into this year with a view that, Okay,

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Speaker 5: maybe you get a little bit of a bounce because

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Speaker 5: twenty twenty two is so bad, but certainly not fifteen

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Speaker 5: percent on the S and P in the first half

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Speaker 5: of the year. And so I think what you do

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Speaker 5: is you actually don't do all that much because what

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Speaker 5: we don't want people to do is to begin chasing

436
00:22:35,320 --> 00:22:37,520
Speaker 5: this rally. You know, we do see some storm clouds

437
00:22:37,520 --> 00:22:39,280
Speaker 5: on the horizon. We do think that the risk of

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Speaker 5: recession has risen. I do think that the FED is

439
00:22:41,359 --> 00:22:44,320
Speaker 5: going to continue hiking rates. Yes, we've had a very

440
00:22:44,320 --> 00:22:46,520
Speaker 5: good run in risk assets, but but I wouldn't chase

441
00:22:46,560 --> 00:22:48,440
Speaker 5: this rally too much. I would stick to your plan,

442
00:22:48,520 --> 00:22:51,280
Speaker 5: stick to your acid allocation rather than moving things around

443
00:22:51,320 --> 00:22:51,960
Speaker 5: one way or the other.

444
00:22:52,080 --> 00:22:54,520
Speaker 1: I'll get that. But you have to identify a second

445
00:22:54,600 --> 00:22:57,359
Speaker 1: leg of able market. Is JP Morgan allowed with all

446
00:22:57,400 --> 00:23:00,439
Speaker 1: your economic work Chasm Faroli to say, we have the

447
00:23:00,640 --> 00:23:05,520
Speaker 1: underpinning of what can be a legitimate broadening out bullmarket.

448
00:23:05,960 --> 00:23:08,000
Speaker 5: So I guess there are two things that give me

449
00:23:08,200 --> 00:23:11,320
Speaker 5: pause about that, that possibility of broadening out from a

450
00:23:11,359 --> 00:23:15,200
Speaker 5: bull market perspective. The first is that the majority, the entirety, effectively,

451
00:23:15,200 --> 00:23:16,919
Speaker 5: of the rally that we've seen year to date has

452
00:23:16,960 --> 00:23:21,000
Speaker 5: been driven by multiple expansion right, so earning hasn't really participated.

453
00:23:21,000 --> 00:23:23,080
Speaker 5: And so what we need to see in order to

454
00:23:23,119 --> 00:23:26,560
Speaker 5: remain constructive on risk assets here is evidence that you know,

455
00:23:26,640 --> 00:23:30,040
Speaker 5: the potential downside on earnings is potentially not as bad

456
00:23:30,080 --> 00:23:32,080
Speaker 5: as what a lot of people would expect if we

457
00:23:32,160 --> 00:23:34,960
Speaker 5: do hit a slower patch in the economy, potentially a recession.

458
00:23:35,240 --> 00:23:37,440
Speaker 5: I think you're looking at earnings estimates which are signaling

459
00:23:37,440 --> 00:23:39,760
Speaker 5: that products will continue to rise, and to me, that's

460
00:23:39,760 --> 00:23:40,960
Speaker 5: a tough pill to swallow.

461
00:23:40,800 --> 00:23:43,240
Speaker 1: In the real world of sitting around when the you know,

462
00:23:43,280 --> 00:23:46,160
Speaker 1: we celebrate that the colonies one and we're sitting around

463
00:23:46,160 --> 00:23:48,560
Speaker 1: and we're having mustard not catch up on our hot dogs,

464
00:23:48,600 --> 00:23:52,000
Speaker 1: and there's one guy there livid at a given institution.

465
00:23:52,200 --> 00:23:55,920
Speaker 1: Let's pick on JP Morgan and saying, Okay, what's the

466
00:23:56,000 --> 00:23:59,800
Speaker 1: plan to catch up? What's the JP Morgan plan to

467
00:24:00,080 --> 00:24:03,359
Speaker 1: catch up? If I was above average but nothing like

468
00:24:03,400 --> 00:24:04,480
Speaker 1: what Nvidia.

469
00:24:04,160 --> 00:24:07,360
Speaker 5: Did, So I think the best thing that people can

470
00:24:07,400 --> 00:24:10,040
Speaker 5: do today is try to preserve their optionality, and we

471
00:24:10,080 --> 00:24:13,240
Speaker 5: would encourage two ways of a place. First would be

472
00:24:13,400 --> 00:24:15,040
Speaker 5: by not forgetting about fixed income.

473
00:24:15,160 --> 00:24:15,240
Speaker 1: Right.

474
00:24:15,280 --> 00:24:17,760
Speaker 5: You know, we talked about how sitting in cash feels comfortable,

475
00:24:17,760 --> 00:24:20,399
Speaker 5: and obviously you're getting paid from the bond market. Once again,

476
00:24:20,760 --> 00:24:23,760
Speaker 5: we still think that that optionality, maintaining a relatively short

477
00:24:23,840 --> 00:24:26,080
Speaker 5: duration could work in your favor because if you get

478
00:24:26,080 --> 00:24:28,200
Speaker 5: a big pullback in equities, you're going to be able

479
00:24:28,200 --> 00:24:30,959
Speaker 5: to deploy that capital and try to catch up. To

480
00:24:31,000 --> 00:24:33,320
Speaker 5: your question. The other thing is we would maintain that

481
00:24:33,359 --> 00:24:35,639
Speaker 5: shorter duration on the equity side as well. Focus on

482
00:24:35,680 --> 00:24:38,960
Speaker 5: the dividend payers focus on the high cash flow companies. Again,

483
00:24:39,200 --> 00:24:41,480
Speaker 5: there's a lot of excitement and a lot of enthusiasm

484
00:24:41,560 --> 00:24:44,199
Speaker 5: about things like artificial intelligence, and I do think that

485
00:24:44,240 --> 00:24:46,639
Speaker 5: it'll boost productivity over the longer term, but I'm not

486
00:24:46,640 --> 00:24:48,960
Speaker 5: sure it's going to boost productivity tomorrow, and I'm not

487
00:24:49,040 --> 00:24:50,800
Speaker 5: sure it means that we're going to avoid some sort

488
00:24:50,840 --> 00:24:53,080
Speaker 5: of soft patch in the economy over the course of

489
00:24:53,119 --> 00:24:56,040
Speaker 5: the next twelve months. So this all feels very sentiment driven.

490
00:24:56,119 --> 00:24:58,959
Speaker 5: That's why we're so focused on profits and the optionality

491
00:24:59,000 --> 00:24:59,920
Speaker 5: that those cash flows.

492
00:24:59,680 --> 00:25:02,879
Speaker 3: Can prove in videos making money, metas making money, What

493
00:25:02,960 --> 00:25:04,600
Speaker 3: does tech fit into that? Just to build on that

494
00:25:04,600 --> 00:25:05,440
Speaker 3: a little bit more.

495
00:25:05,280 --> 00:25:07,320
Speaker 5: No, and we talked about this a couple of months ago.

496
00:25:07,440 --> 00:25:10,120
Speaker 5: What was really interesting about watching tech into the end

497
00:25:10,119 --> 00:25:12,080
Speaker 5: of twenty twenty two in the beginning of this year

498
00:25:12,160 --> 00:25:14,199
Speaker 5: is that they've been taking their medicine right, they've been

499
00:25:14,280 --> 00:25:16,720
Speaker 5: laying people off, they've been defending that margin. They don't

500
00:25:16,720 --> 00:25:19,119
Speaker 5: necessarily have the type of pricing power that you're seeing

501
00:25:19,119 --> 00:25:21,760
Speaker 5: from say the airlines, in the current environment, and so

502
00:25:21,960 --> 00:25:24,439
Speaker 5: you're actually seeing tech margins hang in there. And I

503
00:25:24,440 --> 00:25:27,560
Speaker 5: think that that does limit the downside to the market

504
00:25:27,560 --> 00:25:30,040
Speaker 5: if we do hit a slow patch or a recession in

505
00:25:30,080 --> 00:25:32,240
Speaker 5: the economy. But you know, my general take is that

506
00:25:32,400 --> 00:25:35,040
Speaker 5: even if inflation is still above the Fed's target and

507
00:25:35,080 --> 00:25:37,600
Speaker 5: real growth is slowing, tough to see how earnings in

508
00:25:37,720 --> 00:25:38,880
Speaker 5: aggregate continue to.

509
00:25:38,840 --> 00:25:40,520
Speaker 3: Expand just going through the top ten on the S

510
00:25:40,560 --> 00:25:43,280
Speaker 3: and P five hundred YEA Today and video we all

511
00:25:43,280 --> 00:25:47,400
Speaker 3: know that name Meta. Then you've got these cruise operators

512
00:25:47,720 --> 00:25:50,600
Speaker 3: Carnival up by one hundred and thirty five percent, Royal

513
00:25:50,680 --> 00:25:53,920
Speaker 3: Caribbean up one hundred and nine percent, YEAT today, Norweighting

514
00:25:54,000 --> 00:25:57,120
Speaker 3: up seventy nine there's a home builder in there by

515
00:25:57,119 --> 00:25:59,080
Speaker 3: close to seventy percent. What's all that about?

516
00:25:59,200 --> 00:26:01,159
Speaker 5: So I think that this, this is the big question,

517
00:26:01,200 --> 00:26:02,920
Speaker 5: and I think this is part of why so many

518
00:26:02,960 --> 00:26:06,840
Speaker 5: people have gotten the market wrong this year. It feels

519
00:26:06,920 --> 00:26:09,800
Speaker 5: like we're seeing these rolling recessions in the economy, where

520
00:26:09,840 --> 00:26:12,200
Speaker 5: first it was the cyclical parts, the rate sensitive parts

521
00:26:12,240 --> 00:26:15,720
Speaker 5: like housing. Obviously you had services shut down during the pandemic,

522
00:26:15,800 --> 00:26:19,520
Speaker 5: and things have continued to bounce there quite nicely. The

523
00:26:19,600 --> 00:26:22,280
Speaker 5: path to a soft landing here is that everything fails

524
00:26:22,320 --> 00:26:24,200
Speaker 5: to roll over at the same time, and we just

525
00:26:24,240 --> 00:26:27,479
Speaker 5: see these little kind of mini explosions in many soft patches,

526
00:26:27,480 --> 00:26:30,480
Speaker 5: which isn't completely unfeasible. But I think what you're seeing

527
00:26:30,520 --> 00:26:32,640
Speaker 5: in terms of the top performers outside of the tech

528
00:26:32,720 --> 00:26:35,600
Speaker 5: names services, people are still out there spending money. They're

529
00:26:35,640 --> 00:26:38,240
Speaker 5: still going on vacation. I was in Orlando the other week.

530
00:26:38,359 --> 00:26:41,080
Speaker 5: The airport was full. You look at home builders, right

531
00:26:41,960 --> 00:26:44,240
Speaker 5: when it comes to mortgage rates, it's the big move

532
00:26:44,280 --> 00:26:45,480
Speaker 5: that puts things on ice.

533
00:26:45,720 --> 00:26:45,920
Speaker 1: Now.

534
00:26:45,920 --> 00:26:47,399
Speaker 5: People look at the numbers and they say, well, the

535
00:26:47,400 --> 00:26:49,520
Speaker 5: house is more expensive. Rates are more expensive, but I

536
00:26:49,520 --> 00:26:52,280
Speaker 5: don't think that they're necessarily going to continue to rise,

537
00:26:52,280 --> 00:26:55,000
Speaker 5: and so you're beginning to see that stabilization in those

538
00:26:55,040 --> 00:26:57,120
Speaker 5: parts of the economy. And I think that that's why

539
00:26:57,160 --> 00:27:00,200
Speaker 5: people continue to gravitate to this soft landing thesis, although

540
00:27:00,240 --> 00:27:02,960
Speaker 5: it seems like a bit of a story in so,

541
00:27:03,160 --> 00:27:06,600
Speaker 5: I think that bonds for us, the shorter end of

542
00:27:06,640 --> 00:27:09,359
Speaker 5: the curve continues to look most attractive. You're not getting

543
00:27:09,359 --> 00:27:11,800
Speaker 5: paid to go all the way out. I think selectively

544
00:27:11,840 --> 00:27:14,160
Speaker 5: adding duration when you get a ten year that edges

545
00:27:14,280 --> 00:27:16,760
Speaker 5: up towards four percent makes a lot of sense because

546
00:27:16,800 --> 00:27:19,320
Speaker 5: over twelve months, right if rates end up falling that's

547
00:27:19,400 --> 00:27:19,880
Speaker 5: going to work.

548
00:27:19,960 --> 00:27:22,320
Speaker 1: If the zeitgeist this weekend, John while you were away

549
00:27:22,720 --> 00:27:27,200
Speaker 1: was simple. People are stunned at how retail, in particularly

550
00:27:27,280 --> 00:27:31,199
Speaker 1: older retail, is all in stocks. The lessons we learned

551
00:27:31,960 --> 00:27:35,119
Speaker 1: cfa kind of chit chat. It's been thrown out the

552
00:27:35,119 --> 00:27:38,480
Speaker 1: window by a public just buying and buying and buying stocks.

553
00:27:38,600 --> 00:27:40,639
Speaker 3: So let's talk about something that's going to come up along.

554
00:27:40,960 --> 00:27:43,560
Speaker 3: You'll hear people in programs like this talking about triple

555
00:27:43,560 --> 00:27:46,600
Speaker 3: digit inversion two year, ten year, negative one hundred and

556
00:27:46,680 --> 00:27:49,240
Speaker 3: five basis points for a lot of people listening, and

557
00:27:49,240 --> 00:27:52,000
Speaker 3: they've heard this a million times. The curves inverted. That's dangerous.

558
00:27:52,000 --> 00:27:54,359
Speaker 3: That's bad, isn't it. What does that mean? Negative one

559
00:27:54,440 --> 00:27:54,840
Speaker 3: o five?

560
00:27:55,760 --> 00:27:58,320
Speaker 5: So that's close to as inverted as the curve has.

561
00:27:58,600 --> 00:28:00,280
Speaker 5: He takes, right, we have to all the way back

562
00:28:00,320 --> 00:28:02,879
Speaker 5: to the eighties. And you know, again, you think about

563
00:28:03,160 --> 00:28:05,480
Speaker 5: history and it doesn't always repeat itself, but it does

564
00:28:05,520 --> 00:28:08,040
Speaker 5: tend to rhyme. And I think what the yield curve

565
00:28:08,119 --> 00:28:10,080
Speaker 5: is telling us is is something that you know, a

566
00:28:10,080 --> 00:28:11,720
Speaker 5: lot of people I think know in the back of

567
00:28:11,760 --> 00:28:14,600
Speaker 5: their minds, but but hesitate to really wrap their arms about.

568
00:28:15,000 --> 00:28:17,600
Speaker 5: Is that squeezing the last little bit of water out

569
00:28:17,600 --> 00:28:20,080
Speaker 5: of this inflation sponge is probably going to be more

570
00:28:20,080 --> 00:28:22,960
Speaker 5: difficult than a lot of people expect, and it's arguably

571
00:28:23,000 --> 00:28:25,040
Speaker 5: going to require a recession. And I think that that's

572
00:28:25,040 --> 00:28:26,680
Speaker 5: what the yield curve is saying. It said, the FED

573
00:28:26,840 --> 00:28:30,800
Speaker 5: has recognized that if they want to prioritize controlling prices,

574
00:28:31,160 --> 00:28:33,320
Speaker 5: they're going to need to potentially crash the plane, and

575
00:28:33,359 --> 00:28:34,879
Speaker 5: I think that that's why you're seeing the curve as

576
00:28:34,880 --> 00:28:35,840
Speaker 5: inverted as it is, just.

577
00:28:35,760 --> 00:28:37,720
Speaker 3: To finish on that. Then, David, does that imply this

578
00:28:37,800 --> 00:28:39,720
Speaker 3: FED has to sit at five point fifty for a

579
00:28:39,760 --> 00:28:42,080
Speaker 3: longer time than people expect, or does that imply that

580
00:28:42,120 --> 00:28:43,920
Speaker 3: this FED needs to go high than five fifty and

581
00:28:44,120 --> 00:28:45,560
Speaker 3: maybe even closer to six percent.

582
00:28:45,920 --> 00:28:48,080
Speaker 5: So I think that the risk to rates is still

583
00:28:48,120 --> 00:28:51,080
Speaker 5: to the upside. Obviously, my boss's boss thinks that six

584
00:28:51,120 --> 00:28:55,320
Speaker 5: percent is potentially in play. It wouldn't surprise me. But

585
00:28:55,360 --> 00:28:57,280
Speaker 5: I think at a minimum, what investors need to be

586
00:28:57,320 --> 00:28:59,960
Speaker 5: prepared for is the FED going to somewhere around five

587
00:29:00,080 --> 00:29:03,400
Speaker 5: fifty and then not blinking until the labor market deteriorates

588
00:29:03,400 --> 00:29:05,320
Speaker 5: in a way that they can no longer ignore it.

589
00:29:05,360 --> 00:29:07,880
Speaker 5: Right three point seven percent on unemployment is not going

590
00:29:07,880 --> 00:29:09,520
Speaker 5: to catch the Fed's attention. Four and a half.

591
00:29:09,600 --> 00:29:12,040
Speaker 1: Well, it's David. It's a slow news day. Can can

592
00:29:12,080 --> 00:29:14,520
Speaker 1: you state that mister Diamond's looking for a six percent

593
00:29:14,600 --> 00:29:16,560
Speaker 1: level in FED funds? Right?

594
00:29:17,160 --> 00:29:18,120
Speaker 5: He came out and said that.

595
00:29:18,440 --> 00:29:20,600
Speaker 1: He came out and said that he thought we were going.

596
00:29:20,440 --> 00:29:22,120
Speaker 3: To set You know that's not news. You're trying to

597
00:29:22,120 --> 00:29:22,760
Speaker 3: get him INTROUPO.

598
00:29:23,160 --> 00:29:25,640
Speaker 1: I don't know. David writes his annual letter, you know,

599
00:29:25,680 --> 00:29:29,000
Speaker 1: it's like a fifty eight page level call up leve it.

600
00:29:29,160 --> 00:29:31,160
Speaker 1: So they go, come on, write this thing.

601
00:29:31,000 --> 00:29:32,880
Speaker 3: For us on that.

602
00:29:32,960 --> 00:29:34,800
Speaker 5: Well, I think what's interesting is that it wasn't too

603
00:29:34,840 --> 00:29:37,080
Speaker 5: long ago that people were highly skeptical that we were

604
00:29:37,080 --> 00:29:39,120
Speaker 5: going to five And this is a FED that has

605
00:29:39,160 --> 00:29:44,000
Speaker 5: taken the inflation problem personally. They've already made one policy error, right,

606
00:29:44,040 --> 00:29:45,880
Speaker 5: they started too late. I don't think that they're going

607
00:29:45,920 --> 00:29:48,240
Speaker 5: to make another. In the office, we're in the office

608
00:29:48,280 --> 00:29:49,600
Speaker 5: five days a week, five days a week.

609
00:29:49,600 --> 00:29:51,560
Speaker 1: Are you going to get a view of Park Avenue

610
00:29:51,800 --> 00:29:55,000
Speaker 1: in Grant and the uh, you know, the down at

611
00:29:55,040 --> 00:29:57,080
Speaker 1: the end of Park there pan Am building, or are

612
00:29:57,120 --> 00:29:59,240
Speaker 1: you going to be looking out over New Jersey and

613
00:29:59,440 --> 00:30:01,280
Speaker 1: in the Hudson. How do we fit that in?

614
00:30:01,760 --> 00:30:03,720
Speaker 5: I think time will tell I heard it. How good

615
00:30:03,760 --> 00:30:04,840
Speaker 5: I am at calling THEE.

616
00:30:06,880 --> 00:30:12,400
Speaker 3: Six got a star office view, David, Thank you much,

617
00:30:12,480 --> 00:30:15,000
Speaker 3: David Leave it's there of JP Morgan Asset Management.

618
00:30:20,040 --> 00:30:23,040
Speaker 1: This is really a special treat here. I was hugely

619
00:30:23,360 --> 00:30:26,840
Speaker 1: influenced years ago and reading i'll say five books on

620
00:30:26,880 --> 00:30:29,600
Speaker 1: the Kingdom of Saudi Arabia and all the romance back

621
00:30:29,640 --> 00:30:33,040
Speaker 1: to seventy five millimeter Lawrence of Arabia a million years

622
00:30:33,080 --> 00:30:37,800
Speaker 1: ago of this experiment that is the Saudi family. Alan

623
00:30:37,840 --> 00:30:40,200
Speaker 1: Wald is definitive on this. We usually talked to her

624
00:30:40,280 --> 00:30:43,400
Speaker 1: about the major revenue maker, which is oil, maybe a

625
00:30:43,480 --> 00:30:47,440
Speaker 1: Ramco at Formula one. But today we digress and with

626
00:30:47,560 --> 00:30:51,000
Speaker 1: ellen Wald we speak of this royal family and what

627
00:30:51,080 --> 00:30:55,960
Speaker 1: they're doing to global sports. Ellen, are you surprised that

628
00:30:56,080 --> 00:31:00,560
Speaker 1: the Saudis want to acquire entertainment prestige?

629
00:31:02,040 --> 00:31:05,200
Speaker 6: No, I'm not. I think that this really goes along

630
00:31:05,400 --> 00:31:11,440
Speaker 6: very well with their kind of general search for global prestige,

631
00:31:11,560 --> 00:31:14,800
Speaker 6: especially in terms of the West. And you know they're

632
00:31:14,800 --> 00:31:18,400
Speaker 6: not really getting it from oil anymore. Yes, they still

633
00:31:18,480 --> 00:31:22,520
Speaker 6: are providing this incredibly vital resources, as you just mentioned

634
00:31:22,520 --> 00:31:26,160
Speaker 6: to the world, But it doesn't necessarily come with prestige.

635
00:31:26,200 --> 00:31:29,920
Speaker 6: In fact, it comes with a bit of the opposite,

636
00:31:30,000 --> 00:31:34,160
Speaker 6: given how prominent the climate issues are today and how

637
00:31:34,240 --> 00:31:37,600
Speaker 6: prominent they are in discussion. You even saw the OPEC

638
00:31:37,680 --> 00:31:41,000
Speaker 6: Secretary General making reference to the fact that, of course

639
00:31:41,040 --> 00:31:43,960
Speaker 6: we want an admissions free future. Well really, aren't you

640
00:31:44,000 --> 00:31:47,560
Speaker 6: guys a bunch of oil producers. So I think that

641
00:31:47,640 --> 00:31:52,080
Speaker 6: they are searching for other avenues to acquire prestige, and

642
00:31:52,320 --> 00:31:55,640
Speaker 6: that generally for the Saudi involves throwing money at it.

643
00:31:56,000 --> 00:31:59,200
Speaker 1: Miamateur, take on this, off, lacy and off your work

644
00:31:59,760 --> 00:32:03,760
Speaker 1: is a basic idea that these are tribal clans, tribal families.

645
00:32:03,800 --> 00:32:07,560
Speaker 1: Whether it's United Era memorates Kuwait, the originality of the

646
00:32:08,040 --> 00:32:12,520
Speaker 1: experiment in Jordan, et cetera. Give us an update on

647
00:32:12,600 --> 00:32:16,760
Speaker 1: the power structure of the royal family in Saudi Arabia.

648
00:32:16,880 --> 00:32:20,760
Speaker 1: Does it parken back to Faisal or is it something new?

649
00:32:21,960 --> 00:32:24,800
Speaker 6: So I think it's kind of a combination of both,

650
00:32:25,000 --> 00:32:29,040
Speaker 6: in effect, because the Sautists have always looked for ways

651
00:32:29,080 --> 00:32:32,920
Speaker 6: to show their prestige, and so way back when you

652
00:32:33,000 --> 00:32:37,239
Speaker 6: had you know, Abdolzes even so he would basically, you know,

653
00:32:37,320 --> 00:32:41,640
Speaker 6: before he had oil. His way of showing his kind

654
00:32:41,640 --> 00:32:45,600
Speaker 6: of rule and affirming his rule over the various tribes

655
00:32:45,600 --> 00:32:48,640
Speaker 6: in Saudi Arabia was to go around and basically promise

656
00:32:49,160 --> 00:32:51,560
Speaker 6: them stuff. So people would show up and they'd ask

657
00:32:51,640 --> 00:32:54,360
Speaker 6: for things, and he promised them, and then they'd have

658
00:32:54,440 --> 00:32:57,640
Speaker 6: to show up at his you know, treasurer, and the

659
00:32:57,640 --> 00:32:59,800
Speaker 6: treasurer would have to dole out the money. And you know,

660
00:33:00,080 --> 00:33:02,880
Speaker 6: for oil, there wasn't that much money, so as soon

661
00:33:02,920 --> 00:33:04,680
Speaker 6: as it was gone, he'd kind of pack up and

662
00:33:04,760 --> 00:33:08,719
Speaker 6: slink away. But still the Saudi king would kind of

663
00:33:09,000 --> 00:33:11,800
Speaker 6: keep promising things. Well, now they've got tons of oil

664
00:33:12,360 --> 00:33:15,560
Speaker 6: and tons of money, and so they're promising things, you know,

665
00:33:15,640 --> 00:33:18,960
Speaker 6: in terms of going out and trying to acquire big

666
00:33:19,040 --> 00:33:23,640
Speaker 6: time footballers or do this deal with PGA, which is

667
00:33:23,720 --> 00:33:26,120
Speaker 6: essentially going to allow them to kind of bank roll

668
00:33:26,480 --> 00:33:32,200
Speaker 6: this commercial entity for golf around the world. And it's

669
00:33:32,280 --> 00:33:34,760
Speaker 6: basically a way of ensuring that people don't say bad

670
00:33:34,800 --> 00:33:38,120
Speaker 6: things about them, but also ensuring to their people, hey, look,

671
00:33:38,120 --> 00:33:41,440
Speaker 6: we're doing all this great stuff and you know, we're

672
00:33:41,480 --> 00:33:44,120
Speaker 6: behind it and we're funding it.

673
00:33:44,080 --> 00:33:46,680
Speaker 3: And none of this is new. As you've illustrated that

674
00:33:46,840 --> 00:33:49,320
Speaker 3: China tried to do this with football, it wasn't very successful.

675
00:33:49,400 --> 00:33:52,000
Speaker 3: Russia is trying to do this in a various ways

676
00:33:52,280 --> 00:33:55,600
Speaker 3: to use sport as a vehicle to basically achieve certain goals,

677
00:33:55,600 --> 00:33:58,400
Speaker 3: whether it be the Winter Olympics, a Formula one race.

678
00:33:58,880 --> 00:34:01,400
Speaker 3: World can't for football. And I want to understand from

679
00:34:01,400 --> 00:34:04,080
Speaker 3: your perspective, what would success look like for the Saudis.

680
00:34:04,160 --> 00:34:05,160
Speaker 3: What does that actually look like.

681
00:34:06,240 --> 00:34:09,279
Speaker 6: That's a good question. I think success is it partially

682
00:34:09,719 --> 00:34:12,879
Speaker 6: it is winning. So their sports teams have to do well.

683
00:34:12,880 --> 00:34:15,239
Speaker 6: And I remember there was a whole big controversy about

684
00:34:15,239 --> 00:34:19,600
Speaker 6: the Saudis trying to acquire a football club in England

685
00:34:19,640 --> 00:34:21,880
Speaker 6: and then they didn't get the one that they wanted,

686
00:34:21,920 --> 00:34:23,799
Speaker 6: so they got a lesser one. So they've got to

687
00:34:23,840 --> 00:34:26,040
Speaker 6: do well. But they've also got to kind of make

688
00:34:26,239 --> 00:34:28,359
Speaker 6: money out of it. So even if they don't win,

689
00:34:28,680 --> 00:34:31,400
Speaker 6: it's not so much about winning. It's more about you know,

690
00:34:31,600 --> 00:34:34,960
Speaker 6: being on TV and getting that prestige and people kind

691
00:34:34,960 --> 00:34:38,840
Speaker 6: of showing them difference. You know, their big time people

692
00:34:38,880 --> 00:34:41,319
Speaker 6: get invited to all the big events and they show

693
00:34:41,360 --> 00:34:43,799
Speaker 6: them on camera and they you know, say good things

694
00:34:43,800 --> 00:34:46,640
Speaker 6: about them, and nobody says anything bad about them. So

695
00:34:47,000 --> 00:34:48,520
Speaker 6: this is a way of kind of ensuring Oh that

696
00:34:48,600 --> 00:34:51,440
Speaker 6: koshogi thing that happened back there, you know, no one,

697
00:34:51,560 --> 00:34:54,080
Speaker 6: no one remembers that because now we've got you know,

698
00:34:54,400 --> 00:34:58,520
Speaker 6: Rumayan at you know, the center of the PGA golf tournament,

699
00:34:58,560 --> 00:35:01,719
Speaker 6: and you know, NBS show up to whatever football game

700
00:35:01,760 --> 00:35:04,400
Speaker 6: he wants, and you know they'll show him on camera

701
00:35:04,480 --> 00:35:07,879
Speaker 6: and say, you know, if not good things, at least

702
00:35:07,880 --> 00:35:08,960
Speaker 6: they won't say bad things.

703
00:35:09,160 --> 00:35:13,080
Speaker 3: Are you expecting the West to close the door to this, Well, I.

704
00:35:13,080 --> 00:35:15,800
Speaker 6: Do think that there's going to be pushback. But money

705
00:35:15,880 --> 00:35:19,799
Speaker 6: is a really powerful motivator and it's very hard to

706
00:35:19,880 --> 00:35:23,440
Speaker 6: say no when you know there's a deep pocket here.

707
00:35:23,440 --> 00:35:26,759
Speaker 6: I mean, look at PGA, and you know, as long

708
00:35:26,800 --> 00:35:29,880
Speaker 6: as there isn't any kind of major human rights issue

709
00:35:30,239 --> 00:35:33,040
Speaker 6: that pops up, of course, I do think that that

710
00:35:33,160 --> 00:35:35,560
Speaker 6: kind of thing is inevitable. There will be another big

711
00:35:35,640 --> 00:35:39,000
Speaker 6: human rights issue that comes up, and the issue will

712
00:35:39,040 --> 00:35:42,680
Speaker 6: be will these leagues be able to say, no, we

713
00:35:42,680 --> 00:35:45,200
Speaker 6: don't want your money anymore, or will they say, oh,

714
00:35:45,280 --> 00:35:46,440
Speaker 6: well we do want your money.

715
00:35:46,440 --> 00:35:49,359
Speaker 1: We just want you to write Ellen, you're away from

716
00:35:49,360 --> 00:35:51,160
Speaker 1: what Ed Moore says. Jeff Curry and the rest of

717
00:35:51,200 --> 00:35:55,520
Speaker 1: the bandits in hydrocarbon analysis. What's your price barrel of

718
00:35:55,640 --> 00:35:59,640
Speaker 1: oil that you think the royal family needs in Saudi Arabia?

719
00:36:00,040 --> 00:36:02,120
Speaker 1: Do you have a Brent crude price that gets it

720
00:36:02,160 --> 00:36:03,279
Speaker 1: done for them?

721
00:36:03,760 --> 00:36:07,200
Speaker 6: I think that anything above you know, sixty sixty five

722
00:36:07,360 --> 00:36:10,160
Speaker 6: is getting it done for them. They don't need to

723
00:36:10,280 --> 00:36:13,400
Speaker 6: cover their budget with the price of oil. So I

724
00:36:13,400 --> 00:36:15,680
Speaker 6: know the IMF says, you know, oh, they need eighty

725
00:36:15,760 --> 00:36:18,839
Speaker 6: or eighty five dollars oil to cover their budget. That's

726
00:36:18,840 --> 00:36:21,400
Speaker 6: not how the Saudis are thinking. They don't need to

727
00:36:21,440 --> 00:36:23,920
Speaker 6: cover their budget with oil. They can, you know, they

728
00:36:23,920 --> 00:36:27,080
Speaker 6: can take loans, They've done that, and not necessarily that

729
00:36:27,080 --> 00:36:29,280
Speaker 6: they have other sources of revenue. I think they would

730
00:36:29,400 --> 00:36:33,400
Speaker 6: love eighty or eighty five in order to keep expanding

731
00:36:33,760 --> 00:36:36,839
Speaker 6: their investments and keep having more money to just throw

732
00:36:36,880 --> 00:36:41,200
Speaker 6: at these prestige things. But you know, to be perfectly satisfied,

733
00:36:41,480 --> 00:36:44,839
Speaker 6: I think honestly they're fine with sixty. They can make

734
00:36:44,920 --> 00:36:46,600
Speaker 6: it even at forty or fifty.

735
00:36:46,760 --> 00:36:48,960
Speaker 3: And just to be clear on the record, Newcastle United

736
00:36:49,080 --> 00:36:52,520
Speaker 3: is a lesser team, Is that right? Anon? Well, you know, I'm.

737
00:36:52,400 --> 00:36:56,240
Speaker 6: Not really up on my British all teams.

738
00:36:56,520 --> 00:36:59,840
Speaker 3: That's when I heard that seek in Shepherdson, Pantheon, macrowe

739
00:36:59,840 --> 00:37:01,560
Speaker 3: Can was with us.

740
00:37:01,680 --> 00:37:04,960
Speaker 6: I tried United, right.

741
00:37:05,200 --> 00:37:07,240
Speaker 1: Yeah, Well, Ellen had to wait to come on because

742
00:37:07,239 --> 00:37:09,279
Speaker 1: my soccer talk was so lame while you were going.

743
00:37:09,320 --> 00:37:13,879
Speaker 1: Brima really helped. We had we had on uh Ian,

744
00:37:13,960 --> 00:37:16,239
Speaker 1: Shepherdson and Panthe and then we were tied it into

745
00:37:16,280 --> 00:37:19,920
Speaker 1: Saudi Arabia's investment with the Newcastle United and then one

746
00:37:20,080 --> 00:37:22,400
Speaker 1: was it fourth place, the wonderful fourth place.

747
00:37:22,160 --> 00:37:23,960
Speaker 3: Finish secure Champions League.

748
00:37:24,040 --> 00:37:25,960
Speaker 1: It was great. But you know my question is to

749
00:37:26,120 --> 00:37:28,920
Speaker 1: two of you. We got another fifteen minutes with Allen.

750
00:37:29,000 --> 00:37:31,560
Speaker 1: I think I'm kidding a fifty and I got to

751
00:37:31,560 --> 00:37:34,280
Speaker 1: talk F one racing in a Ramco's investment.

752
00:37:33,880 --> 00:37:38,160
Speaker 3: There and well, thank you Ellen, thank you. That was.

753
00:37:48,080 --> 00:37:51,560
Speaker 1: Elene Becker joins us now on the tragedy was just

754
00:37:51,600 --> 00:37:54,840
Speaker 1: domestic air travel. What I learned over the weekend lane

755
00:37:54,840 --> 00:37:58,239
Speaker 1: in two instances, one with John Farrell, who actually got

756
00:37:58,280 --> 00:38:00,440
Speaker 1: on an airplane and got home, is in an national

757
00:38:00,440 --> 00:38:04,600
Speaker 1: travel is actually pretty good, and domestic travel is an

758
00:38:04,719 --> 00:38:08,200
Speaker 1: absolute train wreck. You drive out of Denver and you

759
00:38:08,239 --> 00:38:12,279
Speaker 1: and I remember the horrific Stapleton International Airport with the

760
00:38:12,320 --> 00:38:14,920
Speaker 1: winds going sideways and you were lucky you could land.

761
00:38:15,280 --> 00:38:18,880
Speaker 1: This is an history and you're going across the fields

762
00:38:18,920 --> 00:38:22,800
Speaker 1: of Denver East and there are those teepees in the distance,

763
00:38:23,320 --> 00:38:28,000
Speaker 1: which was a huge success of Denver. Den built a

764
00:38:28,200 --> 00:38:32,560
Speaker 1: stunning twenty seven years ago. Why can't we build new

765
00:38:32,600 --> 00:38:34,120
Speaker 1: airports in America?

766
00:38:35,480 --> 00:38:39,040
Speaker 7: That's a great question, tom So. The number one issue

767
00:38:39,440 --> 00:38:43,600
Speaker 7: is space. We don't have enough space. If you think

768
00:38:43,640 --> 00:38:46,800
Speaker 7: about Newark Airport, to the right you have one highway

769
00:38:46,800 --> 00:38:49,120
Speaker 7: and to the left you have the New Jersey turnpikes.

770
00:38:49,120 --> 00:38:52,200
Speaker 7: So there's no place to put a third parallel runway

771
00:38:52,400 --> 00:38:55,040
Speaker 7: that would alleviate some of the problems. And then people

772
00:38:55,120 --> 00:38:57,920
Speaker 7: don't want big airports in their backyard. The reason Denver

773
00:38:58,080 --> 00:39:00,480
Speaker 7: was able to be built is because they bought so

774
00:39:00,680 --> 00:39:04,640
Speaker 7: much of the land out there that you can have.

775
00:39:04,880 --> 00:39:07,160
Speaker 7: I think there's four parallel runways now and I think

776
00:39:07,200 --> 00:39:09,440
Speaker 7: they can go up to six or eight, so they

777
00:39:09,480 --> 00:39:11,799
Speaker 7: have the space for growth. Most of the rest of

778
00:39:11,840 --> 00:39:14,120
Speaker 7: the country is built around cities and you just don't

779
00:39:14,160 --> 00:39:15,640
Speaker 7: have that within that.

780
00:39:15,760 --> 00:39:19,359
Speaker 1: Scott Kirby of United belieguered I believe he called in

781
00:39:19,360 --> 00:39:21,680
Speaker 1: from Teeterborough. We're trying to get him on the phone

782
00:39:22,040 --> 00:39:25,800
Speaker 1: but Scott Kirby of United madclear they will do less

783
00:39:25,920 --> 00:39:30,560
Speaker 1: flights out of EWR the companies you follow, is that

784
00:39:30,719 --> 00:39:34,520
Speaker 1: the future, which is they're just going to have fewer flights.

785
00:39:34,840 --> 00:39:37,680
Speaker 7: Yep. Absolutely, We've been seeing that Tom as you know,

786
00:39:37,840 --> 00:39:39,759
Speaker 7: for a couple of years now, for at least five

787
00:39:39,840 --> 00:39:43,760
Speaker 7: or seven years. It's going to be more seats per departure,

788
00:39:43,840 --> 00:39:46,920
Speaker 7: so bigger aircraft, and it's going to be fewer departures

789
00:39:46,960 --> 00:39:50,440
Speaker 7: per day. You remember you and I talked about this

790
00:39:51,400 --> 00:39:55,200
Speaker 7: the Secretary of Transportation as the four big airlines serving

791
00:39:55,200 --> 00:39:58,520
Speaker 7: the New York area, Delta, American, United and Jeff Blow

792
00:39:58,640 --> 00:40:01,839
Speaker 7: to cut their summer capacity by ten percent because air

793
00:40:01,880 --> 00:40:05,879
Speaker 7: traffic control is understaffed. And you add that, you add

794
00:40:05,960 --> 00:40:10,480
Speaker 7: to an understaffed air traffic control system. Then you add

795
00:40:10,680 --> 00:40:15,520
Speaker 7: to that winter or summer rather thunderstorms, and you have

796
00:40:15,719 --> 00:40:19,040
Speaker 7: all the aircraft have to land, especially the ones coming

797
00:40:19,040 --> 00:40:23,080
Speaker 7: in from overseas, and then nothing's taking off. So you get, right,

798
00:40:24,160 --> 00:40:27,520
Speaker 7: you get those issues with aircraft that can't find gates,

799
00:40:27,680 --> 00:40:29,880
Speaker 7: and the next thing you know, people are trapped.

800
00:40:29,960 --> 00:40:32,759
Speaker 1: One final question on this insanity, and I actually want

801
00:40:32,800 --> 00:40:35,960
Speaker 1: to talk Graham, Dodd and Coddle with you actual adult

802
00:40:36,000 --> 00:40:40,880
Speaker 1: securities analysis not so much who do you blame? But

803
00:40:41,280 --> 00:40:44,840
Speaker 1: years ago weren't there thunderstorms as well. I mean, I

804
00:40:44,840 --> 00:40:47,600
Speaker 1: don't get why thunderstorms are now a new.

805
00:40:47,440 --> 00:40:52,359
Speaker 7: Thing, right exactly. So the biggest issue is when thunderstorms

806
00:40:52,440 --> 00:40:55,680
Speaker 7: roll through the area, they're number one unpredictable, so you

807
00:40:55,719 --> 00:40:58,960
Speaker 7: don't really know where the cells are. You cannot have

808
00:40:59,200 --> 00:41:01,560
Speaker 7: because of all that at all, if there's lightning in

809
00:41:01,600 --> 00:41:04,120
Speaker 7: the area, you cannot have your people on the ramp

810
00:41:04,440 --> 00:41:06,759
Speaker 7: loading and unloading the tags. They have to come in.

811
00:41:06,880 --> 00:41:09,680
Speaker 7: You can't refuel, so they have to command. So that's

812
00:41:09,800 --> 00:41:13,040
Speaker 7: to your point, that hasn't changed. But what has changed

813
00:41:13,760 --> 00:41:18,520
Speaker 7: is that the entire system is just overtaxed. And it

814
00:41:18,560 --> 00:41:22,560
Speaker 7: goes back to years, it goes back decades. The system

815
00:41:22,600 --> 00:41:27,040
Speaker 7: has been underinvested in. And that's infrastructure. It includes airports,

816
00:41:27,120 --> 00:41:30,600
Speaker 7: and includes government right, and it includes airlines.

817
00:41:30,760 --> 00:41:34,600
Speaker 1: Let's talk securities analysis by hold Sell hullaen Becker on

818
00:41:34,840 --> 00:41:38,640
Speaker 1: say typic United Airlines. I did a log regression of

819
00:41:38,800 --> 00:41:41,560
Speaker 1: United Airlines back to two thousand and eight where they

820
00:41:41,600 --> 00:41:45,799
Speaker 1: cratered in the Great Contraction. Great they could go up

821
00:41:45,800 --> 00:41:52,880
Speaker 1: one hundred percent off that that log extrapolation out based

822
00:41:52,920 --> 00:41:56,640
Speaker 1: pre pandemic. Do you envision these airlines going up fifty

823
00:41:56,800 --> 00:42:00,800
Speaker 1: eighty indeed one hundred percent in the near term.

824
00:42:00,800 --> 00:42:03,880
Speaker 7: Off the two thousand and eight bases. Yeah, there's no

825
00:42:03,920 --> 00:42:06,279
Speaker 7: reason why they shouldn't maybe not one hundred percent, but

826
00:42:06,320 --> 00:42:10,080
Speaker 7: certainly doubles from here. Even from here, I mean, it's

827
00:42:10,120 --> 00:42:11,800
Speaker 7: not going to be as robust as it would have

828
00:42:11,840 --> 00:42:14,960
Speaker 7: been without the pandemic because with the exception of Delton,

829
00:42:15,040 --> 00:42:18,560
Speaker 7: I think Alaska are everybody else issued equity. So if

830
00:42:18,560 --> 00:42:21,160
Speaker 7: we thought they could earn like United take for example,

831
00:42:21,200 --> 00:42:23,560
Speaker 7: our best idea for twenty three, if we thought they

832
00:42:23,600 --> 00:42:27,440
Speaker 7: could earn three dollars thirteen dollars a share at the

833
00:42:27,440 --> 00:42:30,560
Speaker 7: peak at a ten multiple would be one hundred and thirty.

834
00:42:31,000 --> 00:42:33,719
Speaker 7: But now you have to adjust for the increase you know,

835
00:42:33,800 --> 00:42:36,560
Speaker 7: in shares outstandings, So thirteen becomes twelve, one hundred and

836
00:42:36,560 --> 00:42:38,759
Speaker 7: thirty becomes one hundred and twenty, and the stock's at

837
00:42:38,800 --> 00:42:41,520
Speaker 7: fifty five is fifty four. So no reason why I

838
00:42:41,520 --> 00:42:44,120
Speaker 7: can't go up from here, especially given the fact that

839
00:42:44,160 --> 00:42:48,000
Speaker 7: we think we're in a multi year growth phase where

840
00:42:48,000 --> 00:42:50,920
Speaker 7: you're going to have these issues. These are not issues

841
00:42:50,920 --> 00:42:53,680
Speaker 7: that are going to be solved speedily. If for short,

842
00:42:53,960 --> 00:42:56,799
Speaker 7: three thousand air traffic controllers and we only train five

843
00:42:56,880 --> 00:42:59,000
Speaker 7: or six hundred a year, that's a five or six

844
00:42:59,080 --> 00:43:02,239
Speaker 7: year problem right there. So curious to what Scott will

845
00:43:02,280 --> 00:43:06,000
Speaker 7: say that, Yeah, it's kind of probably what Helene.

846
00:43:06,080 --> 00:43:08,719
Speaker 1: This is important because I remember I treasured my conversation

847
00:43:08,840 --> 00:43:12,040
Speaker 1: with Robert crandall, you know, American Airlines and all that

848
00:43:12,080 --> 00:43:14,680
Speaker 1: he did and the history of aviation. The romance of

849
00:43:14,680 --> 00:43:18,800
Speaker 1: what Helene Becker covers great. The bottom line is, have

850
00:43:18,920 --> 00:43:23,960
Speaker 1: they found a new maturity of persistent cash flow or

851
00:43:24,000 --> 00:43:26,919
Speaker 1: are the group of planes? Are they still sharks where

852
00:43:26,960 --> 00:43:30,759
Speaker 1: they boom they bust, they boom they bust. Is it

853
00:43:30,800 --> 00:43:31,560
Speaker 1: a new regime?

854
00:43:32,640 --> 00:43:36,600
Speaker 7: No? I mean, I just I don't know the answer

855
00:43:36,640 --> 00:43:39,600
Speaker 7: to that specifically. I don't think I can. I would

856
00:43:39,600 --> 00:43:42,520
Speaker 7: never have foretested the pandemic, right and I'm not sure.

857
00:43:42,600 --> 00:43:45,560
Speaker 7: In fact, I famously said that in one of my

858
00:43:45,719 --> 00:43:48,200
Speaker 7: reports that you can't shut down the world, and it

859
00:43:48,280 --> 00:43:51,760
Speaker 7: turned out we did and you could. It's just turning

860
00:43:51,760 --> 00:43:54,040
Speaker 7: it back on. It's not that easy. And I think

861
00:43:54,280 --> 00:43:58,880
Speaker 7: that's a big problem. We stopped figuring out how to

862
00:43:58,920 --> 00:44:03,960
Speaker 7: make this work. And the fix is a multi year fix.

863
00:44:04,960 --> 00:44:09,120
Speaker 7: But in the interim there will always be shocks to

864
00:44:09,200 --> 00:44:14,359
Speaker 7: the system that will cause the earnings to decline, will

865
00:44:14,360 --> 00:44:18,640
Speaker 7: cause losses, will cause airlines to go bankrupt again. But

866
00:44:18,719 --> 00:44:22,520
Speaker 7: I think in the main because of all these infrastructure issues,

867
00:44:22,560 --> 00:44:27,120
Speaker 7: a lack of OEM deliveries that our good friend Kaivon Rumor,

868
00:44:27,160 --> 00:44:30,200
Speaker 7: my colleague at td COW and talk about all the time,

869
00:44:31,320 --> 00:44:35,080
Speaker 7: the ATC system that we've talked about. You add all

870
00:44:35,160 --> 00:44:39,480
Speaker 7: those issues together, plus you have ten ten thousand at

871
00:44:39,480 --> 00:44:42,640
Speaker 7: this point. Pilot's retiring in this decade and it's hard

872
00:44:42,920 --> 00:44:45,479
Speaker 7: to replace them and so on. So by the time

873
00:44:45,600 --> 00:44:48,160
Speaker 7: you're done with all of this, Yeah, it's it's really

874
00:44:48,239 --> 00:44:51,839
Speaker 7: problematic because their travel is just going to get more.

875
00:44:51,719 --> 00:44:53,759
Speaker 6: Expensive real quick.

876
00:44:53,800 --> 00:44:56,160
Speaker 1: Here, Helene, you get to breathe the same air as

877
00:44:56,200 --> 00:44:59,160
Speaker 1: Kaivon Rumor. I mean, he's the giant for all of

878
00:44:59,239 --> 00:45:04,040
Speaker 1: us with an airline transportation security analysis. Is Kaivon Rumor

879
00:45:04,480 --> 00:45:08,040
Speaker 1: optimistic on the future of Boeing whether they're out of

880
00:45:08,120 --> 00:45:12,040
Speaker 1: Seattle or Chicago or I think they're moving to Washington

881
00:45:12,120 --> 00:45:14,520
Speaker 1: this week? Is he still plus plus on BA?

882
00:45:15,400 --> 00:45:15,600
Speaker 6: Yeah?

883
00:45:15,640 --> 00:45:16,120
Speaker 3: I think so.

884
00:45:16,320 --> 00:45:19,600
Speaker 7: I think it's one of his one of his top picks.

885
00:45:20,280 --> 00:45:23,440
Speaker 1: Okay, Helene, thank you so much. Helene Becker there with

886
00:45:23,480 --> 00:45:26,759
Speaker 1: TD Cowen on an upper Thanks to all your anecdotal

887
00:45:26,800 --> 00:45:30,680
Speaker 1: comments over the weekend on domestic travel. And I've had

888
00:45:30,680 --> 00:45:34,080
Speaker 1: a couple very worried messages about Baramo and I'm really

889
00:45:34,160 --> 00:45:36,319
Speaker 1: not sure which airport she's in, but you know it's

890
00:45:36,560 --> 00:45:38,839
Speaker 1: you know, does they set up the airports and there's

891
00:45:38,880 --> 00:45:40,960
Speaker 1: no place to lay down because they don't want people

892
00:45:41,040 --> 00:45:43,600
Speaker 1: laying down, and so you know, she's got a fold

893
00:45:43,600 --> 00:45:46,680
Speaker 1: out thing where she puts it across the railings of

894
00:45:46,719 --> 00:45:48,840
Speaker 1: the chair, so at least the cherubs can sleep. But

895
00:45:48,920 --> 00:45:53,600
Speaker 1: she's had her fair share of the domestic travel as well.

896
00:45:54,960 --> 00:45:58,799
Speaker 1: Subscribe to the Bloomberg Surveillance podcast on Apple, Spotify and

897
00:45:58,960 --> 00:46:03,120
Speaker 1: anywhere else you get your podcasts. Listen live every weekday

898
00:46:03,400 --> 00:46:06,920
Speaker 1: starting at seven am Easter. I'm Bloomberg dot Com, the

899
00:46:07,040 --> 00:46:11,560
Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You

900
00:46:11,600 --> 00:46:15,640
Speaker 1: can watch us live on Bloomberg Television and always I'm

901
00:46:15,680 --> 00:46:19,640
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902
00:46:19,800 --> 00:46:21,280
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