Speaker 1: Bloomberg Audio Studios, podcasts, radio News.
Speaker 2: I want to get more on this with Kit Darby,
Speaker 2: President of Kit Darby Aviation Consulting on this, Kit, it's
Speaker 2: so interesting when we hear from officials that the helicopter
Speaker 2: crew was fairly experienced Sean Duffies and the craft was
Speaker 2: absolutely preventable.
Speaker 3: What are the questions that you have right now?
Speaker 4: Well, thanks for having me. The first thing, of course,
Speaker 4: the primary charge to pilots on both sides, both aircraft
Speaker 4: and helicopter and VFR conditions which you know without cloud
Speaker 4: you're able to see, is to see and avoid. So
Speaker 4: in this case, one complicating factor is that the communications
Speaker 4: to the helicopter and the airplane were on different frequencies,
Speaker 4: so the situational awareness would go down a little bit,
Speaker 4: especially for the airliner not knowing that the tower was
Speaker 4: talking to this other aircraft. The vision requirements, you know,
Speaker 4: seeing avoid means you can see. We've learned just recently
Speaker 4: that the helicopter was using night vision goggles. So those
Speaker 4: are designed to allow the helicopter to operate in a very
Speaker 4: low light situation without any extra illumination, but it also
Speaker 4: limits the field of vision and it has a tendency
Speaker 4: if you do get a bright light to bloom or
Speaker 4: to obscure what you're looking at. So at least one
Speaker 4: of the pilots in that aircraft, perhaps the one on
Speaker 4: the side of the airliner, since it came in from
Speaker 4: the side, could have had been using night vision goggles,
Speaker 4: could have had a vision problem. But even without the
Speaker 4: night vision goggles, we're looking at a light at night,
Speaker 4: So it's easy to see the light at night, but
Speaker 4: it's hard to tell what that light's doing, how fast
Speaker 4: it's going, where it's going, you know, climbing or descending.
Speaker 4: So that's a very difficult against the backdrop of city
Speaker 4: lights to know what you're seeing, either with or without
Speaker 4: vision goggles.
Speaker 5: Kid based upon your experience, how long do you think
Speaker 5: it will take the NTSB to figure out what happened
Speaker 5: and be able to communicate that to us.
Speaker 4: Well, if the voice recorder and the flight recorder are
Speaker 4: found and available, and I would expect them to be
Speaker 4: in good shape, we'll have a lot of information very quickly.
Speaker 4: That preliminary report should be accurate within a month or so,
Speaker 4: and then, of course the full report often takes a
Speaker 4: year or more. But the preliminary report with the information
Speaker 4: we have, video evidence, flight recorders, voice recorders, eyewitness reports,
Speaker 4: We're going to know what happened here pretty quick.
Speaker 3: As we.
Speaker 2: Turn towards Reagan reopening at eleven am. There have been
Speaker 2: a lot of questions from the press to officials, is
Speaker 2: it safe to fly? What kind of precautions in this
Speaker 2: kind of scenario would be taken to ensure that?
Speaker 4: Well, this is extremely rare, almost random. A reminder that
Speaker 4: we people regularly at six hundred miles an hour at
Speaker 4: thirty thousand feet coast to coast, twenty times safer than
Speaker 4: we drive ourselves to the airport at sixty miles an hour.
Speaker 4: So I mean this is a wonderfully safe system. Thirty
Speaker 4: million flights worldwide. Some of our major airlines have a
Speaker 4: million flights, one airline a million flights a year. So
Speaker 4: there is regrettably a big exposure when we have that
Speaker 4: much activity, and this particular airport very congested, all the
Speaker 4: military services, many of the airlines operating in very close proximity.
Speaker 4: You know, this would be a likely place for something
Speaker 4: to happen, But for another accident like this to happen
Speaker 4: very very rare, and certainly shouldn't discourage anybody from getting
Speaker 4: on an airliner and going where they need to go.
Speaker 4: The odds are, you know, below a lightning strike kit.
Speaker 5: I guess what I've learned this morning. I think a
Speaker 5: lot of our listeners and viewers have learned as well.
Speaker 1: Is a couple of things.
Speaker 5: One just how busy the DC airspace was. I just
Speaker 5: kind of figure, if it's not New York, La Atlanta,
Speaker 5: you know it's okay, But A it's very very busy.
Speaker 5: And B the mixture of commercial and military I kind
Speaker 5: of feel like makes DC airspace a little bit unique.
Speaker 5: How concerning is it or what precautions do you think
Speaker 5: are taken in that airspace? For again, military and commercial
Speaker 5: to be in such close proximity so often.
Speaker 4: Well, there are a lot of rules. I mean, I've
Speaker 4: flown military aircraft in that airspace, although I was flying airplanes,
Speaker 4: not helicopters, and it was very, very congested. However, there
Speaker 4: are rules that separate airplanes from helicopters, commercial from military,
Speaker 4: and those rules are followed every day, thousands of times
Speaker 4: very successfully. Something didn't work here, I mean the last
Speaker 4: thing they said was I have the aircraft in sight,
Speaker 4: and the question is how do you hit something you
Speaker 4: see and have agreed to avoid. I'm not sure the
Speaker 4: airliner would have had the helicopter in sight. But there's
Speaker 4: a real quandary here about We know the rules and
Speaker 4: the rules were being followed right up to the last minute,
Speaker 4: and then something broke down. So confusing for me, and
Speaker 4: I don't know that anybody could make sense of it yet,
Speaker 4: but soon, Kit, I think.
Speaker 2: For you and everybody else, also confusing. You've been in
Speaker 2: this industry for over thirty years. Can you give us
Speaker 2: some context. You gave great color in terms of what
Speaker 2: it's like to use night vision, different frequencies. How hard
Speaker 2: is it or easy is it to move a helicopter
Speaker 2: going one hundred miles per hour?
Speaker 4: It's pretty maneuverable. Helicopters do things that airplanes don't do,
Speaker 4: and that they can hover and go very slow. But
Speaker 4: when they're flying cruising, they're very much like an airplane.
Speaker 4: And both of these aircraft would be very maneuverable if
Speaker 4: they saw each other and understood the relationship speed, distance,
Speaker 4: what needed to be done. They're both very maneuverable and
Speaker 4: could have avoided each other with the right visual information.
Speaker 4: You know, I would e quate this the driving at night.
Speaker 4: How much less you see at night than you do
Speaker 4: in the daytime. And that's part of the problem here,
Speaker 4: I believe, is they're knowing what to do with what
Speaker 4: they see. Helicopter probably had the aircraft in site. Airplane
Speaker 4: probably did not have the helicopter in site.
Speaker 5: Very good, Kit, Thank you so much for joining us,
Speaker 5: Kit Darby, President Kitdarby dot Com Aviation Consulting, giving us
Speaker 5: some informed views and perspectives on aviation some of the
Speaker 5: challenges that might have been before these two aircraft as
Speaker 5: a unfortunately crushed in Washington, DC overnight. We'll have continued
Speaker 5: reporting on that throughout the day. Let's switch gears and
Speaker 5: get back to these markets again. The SP's up about
Speaker 5: sixteen points, the now's up sixty eight points, the nastacs
Speaker 5: up about seventeen points, so a slight lift to the market.
Speaker 5: Syviat Jablonski joint is. She's the CEO and CIO of
Speaker 5: Defiance E TFS. So yeah, we were coming off, you know,
Speaker 5: two great years in the stock market twenty three and
Speaker 5: twenty four with north of twenty percent total returns there,
Speaker 5: and we start off with a nice January in terms
Speaker 5: of performance here. What are you telling your clients these
Speaker 5: days about their expectations for twenty twenty five.
Speaker 1: Yeah, it's good morning. Well, I think twenty twenty three
Speaker 1: and twenty twenty four are going to be hard to beat, right,
Speaker 1: they're pretty epic years. But I do think though that
Speaker 1: you know, we're in a good position here economically. We
Speaker 1: have two to three percent GDP growth. You know, inflation
Speaker 1: is kind of coming down. Although we've seen some blips,
Speaker 1: it's arguably coming down and remaining steady at the moment.
Speaker 1: Jobs numbers are decent, the inflation figures that we've seen
Speaker 1: recently are pretty decent. Strong consumer, you know, corporate earnings
Speaker 1: are going to be interesting this time around, but thus
Speaker 1: far have been you know, strong in the last eight
Speaker 1: quarters or so, and so I think that we stay
Speaker 1: the course here, right. I think the last two years
Speaker 1: have proven to us that maybe it is time to
Speaker 1: get off of the sidelines. And you know, when you
Speaker 1: have like these these big dips like we saw from
Speaker 1: the Deep seek the Bacle the other day, you know,
Speaker 1: you kind of go in and your dollar cost average
Speaker 1: and these are your opportunities to be long equities and
Speaker 1: get performance. But to answer your question a little bit
Speaker 1: more specifically. You know, I don't expect a twenty percent year,
Speaker 1: but I do expect lower, lower double digit returns this year.
Speaker 2: What do you make of the market action moves on earnings?
Speaker 2: I mean, without talking specific names, I mean just the
Speaker 2: dropping ups. The drop in Microsoft like signa like it's
Speaker 2: not taking a lot to get really beat up.
Speaker 3: Can you put that into perspective for that?
Speaker 1: Yeah, I think it almost feels like last season, right
Speaker 1: where good news was a little bit of a drop,
Speaker 1: you know, neutral news was a really big drop, and
Speaker 1: anything that was shy of expectations was just like a
Speaker 1: complete tank, right. I think that the market just has
Speaker 1: very high expectations for earnings right now that are you know,
Speaker 1: somewhat unreasonable, right. I think we got a little bit
Speaker 1: of kind of like the fire and the tailwinds from
Speaker 1: AI and you know, kind of this this idea that
Speaker 1: the FED was going to be cutting rates and things
Speaker 1: like this. I think, you know, last year was super
Speaker 1: strong on that, and I think we're kind of setdying
Speaker 1: out now and so these earnings, particularly from the mag seven,
Speaker 1: they're going to start tapering off. I think we're going
Speaker 1: to continue to see positive earnings, but maybe it's not
Speaker 1: going to be you know, one hundred percent year over
Speaker 1: year on some of the names. Maybe it's going to
Speaker 1: be thirty percent year over year, which is still very solid.
Speaker 1: I think we just have to reframe our expectations on this.
Speaker 5: Sylvilly as CEO and CIO of Defines ETFs. Where are
Speaker 5: you seeing the flows into your ETF complex these days?
Speaker 1: Hands down, it's been in quantum computing. I would say
Speaker 1: that the two most popular traits were micro strategy, and
Speaker 1: that's really a crypto play, right, so you get a
Speaker 1: bitcoint exposure through that. But quantum computing has just been
Speaker 1: you know, an unbelievable.
Speaker 3: Story for our firm and for the markets.
Speaker 6: Right.
Speaker 1: I think it's this idea of like the next generation
Speaker 1: of AI, the fourth industrial revel lution. In order for
Speaker 1: machine learning and AI to actually work, you need supercomputers,
Speaker 1: and you know, quantum competing has this ability to kind
Speaker 1: of transformed that field. But also just you know, drug discovery, pharmaceuticals,
Speaker 1: medical research, cryptography, all of these different you know types
Speaker 1: of sectors that need essentially an upgrade with technology, and
Speaker 1: so a lot of those quantum names this year, like
Speaker 1: I on q Ricghetti, and I know that they've fallen
Speaker 1: back like post Judson Wog a little bit, but I
Speaker 1: think it's kind of back on the up and up
Speaker 1: because people realize that this is a technology that's going
Speaker 1: to blue and flourish. And we you know, we saw
Speaker 1: about a billion dollars of assets coming to that space
Speaker 1: and it's been out since twenty eighteen, and you know,
Speaker 1: it kind of did nothing and then that's where the
Speaker 1: flows came this year.
Speaker 3: Sylvia. We appreciate you.
Speaker 2: Thank you so much, Sylviaja Blonci, the CEO and CIO
Speaker 2: of Defiance E t FS. One of the most interesting
Speaker 2: stock moves I think I've seen is Tesla. That stock
Speaker 2: is up one point six percent despite numbers that were
Speaker 2: not great and any quality beat was a was a
Speaker 2: light quality beat, like it was a good quarter.
Speaker 3: Yet Elon musk job on that stock up on the call.
Speaker 2: Steve Man is Bloomberg Intelligence Global Autos and Industrials research analysts,
Speaker 2: and he joins us, Now, I don't get it. I
Speaker 2: do not understand what the takeaway is from Tesla's our names.
Speaker 6: Yeah, I think you know the volatility that you're seeing
Speaker 6: in stock this morning, it's I think a lot of
Speaker 6: the there's been a lot of noise in the marketplace,
Speaker 6: a lot of focus on the pass but as you know,
Speaker 6: the valuation of this company is really driven by AI
Speaker 6: and Robotaxi, and I think you know, Elon Musk basically
Speaker 6: backed up the truck and unloaded a lot of positive
Speaker 6: news about AI and about their future last night. You know,
Speaker 6: they're rolling out the robo taxi in June. We thought
Speaker 6: it will be two years away, but it's it's going
Speaker 6: to happen in June, starting in Austin, Texas, in California,
Speaker 6: and expanding it to the rest of the major part
Speaker 6: of the country into twenty twenty six. The other thing
Speaker 6: that was a prize was the Optimist humanoid robot. Now
Speaker 6: we didn't think that they're gonna start production of that
Speaker 6: robot anytime soon, but the plan is to do that
Speaker 6: later this year. And one of the things that they're
Speaker 6: going to use that for is really to help them
Speaker 6: cut costs in their production plans.
Speaker 5: Steve, could you explain the business model for the Robotaxi.
Speaker 6: Yeah, Initially, what they want to do is mimic what
Speaker 6: Weimo is doing. So they're going to produce robotaxis and
Speaker 6: they're going to be for higher the revenues will be
Speaker 6: generated and will go straight to Tesla, and then down
Speaker 6: the road they're going to open up to current Tesla
Speaker 6: vehicle owners and the plan is to do it like
Speaker 6: an Airbnb style where the owner actually can rent out
Speaker 6: those vehicles.
Speaker 3: When we talk.
Speaker 2: About the quality of any kind of beat, what was
Speaker 2: circulating in my world was the greenhouse gas gas emissions credits, uh,
Speaker 2: and that was a big reason why we saw the
Speaker 2: beat for Tesla. But that's easy to strip out, like
Speaker 2: at some point that goes away, it gets less.
Speaker 3: We don't need it. So what do you make of that?
Speaker 6: Uh? You know, they they've always been getting credits, so
Speaker 6: it's not anything new. But what really drove the lower
Speaker 6: margins in the fourth quarter is really the relaunch of
Speaker 6: the Model Y Juniper, the update of the Model Y.
Speaker 6: They're actually clearing out the inventory of the old Model Y.
Speaker 6: It's gonna they did that in the fourth quarter. It's
Speaker 6: you're gonna see some of that in the first quarter.
Speaker 6: So first quarter margins will be a little bit bumpy.
Speaker 6: But you know, they're they're increasing uh incentives, better deals
Speaker 6: on leasing just to clear out that inventory. But what
Speaker 6: we're hearing so far is uh. You know, anecdotally the
Speaker 6: you know, I think on the global level, China and
Speaker 6: in the US, there's been a high demand or a
Speaker 6: high order rate interest in the new model. Y. So
Speaker 6: we we we we are are positive and we are bullish,
Speaker 6: more bullish on that on that new product for next
Speaker 6: year and the year after.
Speaker 5: What is the AI play for Tesla stock?
Speaker 6: Well, look, if I stepped we step back a little bit.
Speaker 6: They're actually in the transition into a razor razor blade
Speaker 6: type of business model, right. I think you know, they've
Speaker 6: they've sold a lot of vehicles. They've been cutting costs
Speaker 6: on building cars so they can sell more and more
Speaker 6: of these vehicles. But the real revenue and profit generator
Speaker 6: is the AI is the robo taxi. It's the full
Speaker 6: uh full self driving platform. And we heard it last
Speaker 6: night from the company. You know, they're going to roll
Speaker 6: out robo taxi and it's it's sooner than I think
Speaker 6: a lot of people were expecting.
Speaker 2: How much of it do you think is the stock
Speaker 2: movement related to Musk's relationship with President Trump in DC
Speaker 2: versus underlying fundamentals. I realize that might be an unfair
Speaker 2: quiet to ask a stock analyst but just in terms
Speaker 2: of how you model the relative.
Speaker 6: A lot a lot, because it's I think it goes
Speaker 6: hand in hand part of this.
Speaker 2: Uh.
Speaker 6: You know, one of the things that again, the valuation
Speaker 6: of the stock is really on AI is really on
Speaker 6: pushing out the robo taxi and you know, with you know,
Speaker 6: now with Musk being you know, closer to the administration. Uh,
Speaker 6: the thinking is that you know, the the government is
Speaker 6: gonna actually deregulate or or make it easier for Tesla
Speaker 6: and and their rivals to actually roll out even more
Speaker 6: robo taxis uh, in in the in the country.
Speaker 5: So let's go back to the old car business. Any
Speaker 5: metrics there that stood out to you about cars? Actually, yeah, exactly.
Speaker 5: I hate to answer the question, but yeah.
Speaker 6: The question actually act actually there is I think the
Speaker 6: market is not picking this up, is not fully digesting this.
Speaker 6: This piece of news is that they actually is you know,
Speaker 6: once they roll out the model Y, once they roll
Speaker 6: out the cheaper, new, cheaper vehicle. Uh. This year, I'm
Speaker 6: hoping to drive higher volume. Their fixed cost is going
Speaker 6: to drop significantly. They just told us last night that
Speaker 6: you know, basically you know, using its existing line without
Speaker 6: new capex, They're going to able to actually produce thirty
Speaker 6: thirty three to thirty five percent more vehicles. Uh so,
Speaker 6: so they don't have to use that you know, they
Speaker 6: can actually conserve that cash and and spend it on AI.
Speaker 3: We're just like there yet basically we're not there.
Speaker 6: I think that when the volume comes up, increases from
Speaker 6: the new models, then we'll see the benefit of you know,
Speaker 6: that rationalization of their line and and and the reduction
Speaker 6: of capex.
Speaker 2: How close are we to getting that cheaper model that
Speaker 2: Paul wants to buy us?
Speaker 6: So far it's still uh, it's still on schedule for
Speaker 6: the first half of.
Speaker 2: This year, first half of this year. Do we believe
Speaker 2: that timeline?
Speaker 6: I mean, we haven't seen. The thing is, we haven't
Speaker 6: seen any pictures of it. Yeah, And I mean that's
Speaker 6: that's how Tesla has been doing. Like, for example, then
Speaker 6: launch of the new model why the redesign and Model
Speaker 6: hy they really really didn't show any pictures of it
Speaker 6: until really the last minute. And you know, they've they've
Speaker 6: been talking about it. They reiterated that last night, so
Speaker 6: you know, you know, my thinking is that they will.
Speaker 5: What's the thinking these days, Steve in the marketplace among investors,
Speaker 5: maybe even among TESLA about the demand curve for evs.
Speaker 5: Where kind of are we are we in momentum of
Speaker 5: the demand? What's the thinking out there?
Speaker 6: Yeah, there's a big debate. I think, you know, we're
Speaker 6: on on the camp of uh that you know, if
Speaker 6: the seventy five hundred dollars tax credit in the US
Speaker 6: is eliminated, Uh, there's still going to be demand for EV's.
Speaker 6: I think EV's are here to stay. They're still going
Speaker 6: to be demand for EV's, but it's gonna hurt some
Speaker 6: of the competitors that are not profitable in making EV's.
Speaker 6: So it may lead to example like Ford, you know,
Speaker 6: basically exiting kind of exiting the EV market, and we
Speaker 6: might see some of the the rivals do the same thing.
Speaker 6: For example, Volkswagen is actually not launching any more new
Speaker 6: EV vehicles in the in North America. So you know,
Speaker 6: if that's the case, you know there's potential that tests
Speaker 6: like a game more market share.
Speaker 2: Now that we've gone through a bunch of earnings for
Speaker 2: the automakers, GM in particular sort of highlighted the risk
Speaker 2: of tariffs on Canada and Mexico. Who do you think
Speaker 2: is best positioned in the car world to weather a
Speaker 2: tariff storm.
Speaker 6: I think for for the US automakers, any US amakers
Speaker 6: are more vertically integrated in the US will actually benefit. Look,
Speaker 6: it's gonna hurt everybody. Tesla is not immune to it,
Speaker 6: but it's all relative. I think. You know right now,
Speaker 6: Tesla doesn't build any vehicles in Mexico or in Canada.
Speaker 6: But you know the Big three do they and they
Speaker 6: do a lot of it in Mexico.
Speaker 5: All right, Steve, thanks so much. Appreciate that. Steve Man,
Speaker 5: auto analyst Bloomberg in intelligers talk about the Tesla earning.
Speaker 5: So let's go down to Washington, DC, the US Senate
Speaker 5: Select Committee