1 00:00:00,840 --> 00:00:04,000 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 2 00:00:04,040 --> 00:00:05,240 Speaker 1: my co host Matt Miller. 3 00:00:05,640 --> 00:00:09,720 Speaker 2: Every business day we bring you interviews from CEOs, market pros, 4 00:00:09,720 --> 00:00:13,600 Speaker 2: and Bloomberg experts, along with essential market moven news. 5 00:00:14,160 --> 00:00:17,279 Speaker 1: Find the Bloomberg Markets Podcast on Apple Podcasts or wherever 6 00:00:17,400 --> 00:00:20,480 Speaker 1: you listen to podcasts, and at Bloomberg dot com slash podcast. 7 00:00:21,000 --> 00:00:24,079 Speaker 1: Let me get the latest from what is happening in 8 00:00:24,200 --> 00:00:27,120 Speaker 1: Israel in that part of the world today. We're fortunate 9 00:00:27,200 --> 00:00:30,840 Speaker 1: to be joined by Ambassador Alone Pinkas, former Israel General 10 00:00:30,880 --> 00:00:34,279 Speaker 1: Counsel in New York, former chief of staffs to two 11 00:00:34,320 --> 00:00:37,880 Speaker 1: foreign ministers, so certainly well versed in what is happening 12 00:00:37,880 --> 00:00:40,360 Speaker 1: in that part of the world. Ambassador, thanks so much 13 00:00:40,360 --> 00:00:43,320 Speaker 1: for joining us here. I guess over here in the US, 14 00:00:43,360 --> 00:00:46,960 Speaker 1: we've seen lots of news reporting about massing of troops 15 00:00:46,960 --> 00:00:50,440 Speaker 1: and materiel on the borders with Gaza. Can you give 16 00:00:50,479 --> 00:00:53,600 Speaker 1: us the latest update, how where the situation is today 17 00:00:53,600 --> 00:00:55,000 Speaker 1: and how do you think it might have unfold over 18 00:00:55,080 --> 00:00:56,240 Speaker 1: the next several days. 19 00:00:57,160 --> 00:01:01,880 Speaker 3: Well, thank you for having me to start with. Here's 20 00:01:01,960 --> 00:01:05,480 Speaker 3: the here's the story. There's been an an amassing of 21 00:01:05,880 --> 00:01:13,080 Speaker 3: as you as you correctly pointed out to of ground troops, tanks, artillery, infantry, 22 00:01:13,280 --> 00:01:17,800 Speaker 3: armored infantry, and so on and so forth, supported by 23 00:01:17,880 --> 00:01:22,840 Speaker 3: attack helicopters and what have you, mostly on the way 24 00:01:22,920 --> 00:01:27,800 Speaker 3: on the northern and eastern parts of the gases trap. 25 00:01:28,480 --> 00:01:32,959 Speaker 3: Now everyone assumes that you know a ground operation. A 26 00:01:33,080 --> 00:01:39,240 Speaker 3: large scale ground operation is therefore a foregun conclusion. So 27 00:01:39,319 --> 00:01:42,240 Speaker 3: let me put three question marks next to that. First, 28 00:01:42,480 --> 00:01:48,600 Speaker 3: there is the US President Biden, Defense Secretary Lloyd Austin, 29 00:01:48,840 --> 00:01:53,440 Speaker 3: and Secretary of State Anthony Blincoln, all three of which 30 00:01:53,760 --> 00:01:59,240 Speaker 3: very politely but very adamantly warned Israel of the complications 31 00:01:59,280 --> 00:02:03,800 Speaker 3: that will be inevitable if it so chooses to mount 32 00:02:03,880 --> 00:02:08,519 Speaker 3: a massive ground operation, with Biden even going further in saying, tante, 33 00:02:08,800 --> 00:02:12,120 Speaker 3: gentlemen with older ladies, and gentlemen if older respect, with 34 00:02:12,200 --> 00:02:16,120 Speaker 3: older respect. You need to have an exit strategy, You 35 00:02:16,200 --> 00:02:19,840 Speaker 3: need to have a political goal. What is your strategy here? 36 00:02:20,000 --> 00:02:23,080 Speaker 3: What is your political goal? And I'm not sure that 37 00:02:23,120 --> 00:02:26,040 Speaker 3: Israel has an answer for that. The second question mark 38 00:02:26,160 --> 00:02:30,360 Speaker 3: pertains to the fate of two hundred and twenty two hostages, 39 00:02:30,919 --> 00:02:34,640 Speaker 3: of which at least thirty three or babies and or 40 00:02:34,760 --> 00:02:40,120 Speaker 3: toddlers a ground operation could endanger them. A ground operation 41 00:02:40,320 --> 00:02:47,000 Speaker 3: could seal their fate in the most negative consequence and 42 00:02:47,040 --> 00:02:51,520 Speaker 3: the most negative circumstances. So I don't know necessarily that 43 00:02:51,639 --> 00:02:57,320 Speaker 3: a ground operation is conducive to secure their release. The 44 00:02:57,360 --> 00:03:01,400 Speaker 3: third question mark is whether orn Israel has and I 45 00:03:01,400 --> 00:03:03,880 Speaker 3: don't know the answer to that, to be honest, whether 46 00:03:03,960 --> 00:03:08,160 Speaker 3: or not Israel has sufficient and adequate intelligence, sufficient and 47 00:03:08,320 --> 00:03:13,799 Speaker 3: adequate what we call target a target back who are 48 00:03:13,840 --> 00:03:15,640 Speaker 3: you going to hit, where are you going to hit 49 00:03:15,680 --> 00:03:21,079 Speaker 3: it with? How much force committed to that objective? And 50 00:03:21,160 --> 00:03:24,200 Speaker 3: you take all these three question marks and you understand 51 00:03:24,280 --> 00:03:27,640 Speaker 3: why there has been amassing of troops but not yet 52 00:03:27,800 --> 00:03:28,680 Speaker 3: a ground operation. 53 00:03:30,400 --> 00:03:34,280 Speaker 2: I wonder about the aid that's being delivered to Gaza. 54 00:03:35,440 --> 00:03:39,960 Speaker 2: You know, the world media seems to be pressing for more, 55 00:03:40,400 --> 00:03:43,600 Speaker 2: and apparently Gaza is about to run out of fuel. 56 00:03:43,800 --> 00:03:47,280 Speaker 2: Israel continues to point out that, hey, when fuel trucks 57 00:03:47,320 --> 00:03:49,800 Speaker 2: go over there, Hamas takes them right away, So they 58 00:03:49,800 --> 00:03:53,840 Speaker 2: would essentially be delivering fuel directly to the enemy to 59 00:03:53,920 --> 00:03:57,040 Speaker 2: fuel the war effort against them. 60 00:03:57,520 --> 00:03:58,560 Speaker 1: How do they deal with that. 61 00:04:00,040 --> 00:04:02,920 Speaker 3: It's it's a it's a major problem because that fuel 62 00:04:03,360 --> 00:04:06,240 Speaker 3: is used for the generators who are then used for 63 00:04:06,320 --> 00:04:11,080 Speaker 3: the launching of the sum of the rockets that Hamas 64 00:04:11,600 --> 00:04:14,720 Speaker 3: and the Islamic jiha It's sister organization have. 65 00:04:15,080 --> 00:04:18,240 Speaker 2: Of course, they also need fuel to run desalinization plants 66 00:04:18,240 --> 00:04:19,599 Speaker 2: and hospitals. 67 00:04:19,120 --> 00:04:20,760 Speaker 3: Right exactly. 68 00:04:20,800 --> 00:04:21,760 Speaker 4: That was my second. 69 00:04:22,040 --> 00:04:24,480 Speaker 3: On the other hand, that same fuel, which is a 70 00:04:24,520 --> 00:04:30,000 Speaker 3: fungible commodity is used for hospitals, is used for the salonization, 71 00:04:30,160 --> 00:04:34,400 Speaker 3: as you mentioned correctly. And so the idea is that 72 00:04:34,680 --> 00:04:38,839 Speaker 3: only a limited number of convoys will go in, most 73 00:04:38,960 --> 00:04:42,680 Speaker 3: through the southern tip of the Gaza Strip, which actually 74 00:04:43,000 --> 00:04:48,279 Speaker 3: borders Egypt rather than Israel, but that the red cross 75 00:04:48,360 --> 00:04:53,680 Speaker 3: the un the Egyptians, and in some instances Israel will 76 00:04:53,760 --> 00:04:58,600 Speaker 3: monitor what's going in and who's receiving. What happens once 77 00:04:58,680 --> 00:05:03,120 Speaker 3: it crosses the the border of the Gate Defence whatever 78 00:05:04,160 --> 00:05:07,240 Speaker 3: and gets into Gaza, and as you mentioned, can be 79 00:05:07,360 --> 00:05:12,080 Speaker 3: taken over by Hamas is a problem, and that's part 80 00:05:12,120 --> 00:05:17,800 Speaker 3: of this humanitarian on crisis that is quietly but surely 81 00:05:18,600 --> 00:05:20,960 Speaker 3: brewing in Gaza. So that's that's going to be a 82 00:05:20,960 --> 00:05:25,520 Speaker 3: major jury, on top of which President Biden himself has 83 00:05:25,560 --> 00:05:31,280 Speaker 3: repeatedly asked that Israel allow for a continuous inflow of 84 00:05:31,680 --> 00:05:36,080 Speaker 3: humanitarian eight, including that gasoline, including that funeral. 85 00:05:37,040 --> 00:05:39,680 Speaker 1: So, Ambassador, I mean, I'm just not sure what the 86 00:05:39,760 --> 00:05:45,360 Speaker 1: catalyst is for a next step other than some significant 87 00:05:45,400 --> 00:05:49,359 Speaker 1: breakthrough on the hostage front. What do you believe or 88 00:05:49,400 --> 00:05:52,360 Speaker 1: what are most observers I guess expecting of the next 89 00:05:52,360 --> 00:05:53,680 Speaker 1: several days. 90 00:05:54,240 --> 00:05:58,159 Speaker 3: Well, okay, you know again, what is the political goal here? 91 00:05:58,320 --> 00:06:03,560 Speaker 3: The political goal is to eradicate Hamas. Then practically Israel 92 00:06:03,640 --> 00:06:06,200 Speaker 3: needs to take over the entire Gaza Strip, which is 93 00:06:06,240 --> 00:06:09,560 Speaker 3: two point two million people in a very narrow and 94 00:06:09,800 --> 00:06:13,599 Speaker 3: very densist in fact place on Earth. So that's a problem. 95 00:06:13,960 --> 00:06:15,640 Speaker 3: So what you should be looking in the next few 96 00:06:15,720 --> 00:06:18,720 Speaker 3: days is whether or not Israel clarifies what its political 97 00:06:18,880 --> 00:06:22,800 Speaker 3: end is, what political objective is. If it is less 98 00:06:22,839 --> 00:06:26,880 Speaker 3: than dismantling Hamas, then you will see a smaller scale 99 00:06:27,400 --> 00:06:34,040 Speaker 3: ground operation. But bear in mind, and you know, anyone 100 00:06:34,040 --> 00:06:36,800 Speaker 3: who's listening to us should bear in mind that there 101 00:06:36,800 --> 00:06:41,600 Speaker 3: are various kinds and various scopes of a ground operation. 102 00:06:42,200 --> 00:06:45,279 Speaker 3: It could be small incursions by smaller units, it could 103 00:06:45,320 --> 00:06:50,120 Speaker 3: be medium size incursions the other in and out, go in, destroy, 104 00:06:50,360 --> 00:06:53,560 Speaker 3: get out, and it could in fact be cutting the 105 00:06:53,600 --> 00:06:58,560 Speaker 3: Gaza Strip in half, leaving the southern part where most 106 00:06:58,600 --> 00:07:04,920 Speaker 3: of the population is right now intact and fighting Hamas 107 00:07:05,600 --> 00:07:08,919 Speaker 3: in the north. Now, there is another major consideration that 108 00:07:09,000 --> 00:07:12,960 Speaker 3: we haven't even discussed yet, which deserves a completely different 109 00:07:13,000 --> 00:07:19,960 Speaker 3: segments obviously, and that is the likelihood of escalation. The 110 00:07:20,000 --> 00:07:25,000 Speaker 3: more escalation, the more power, the more firepower is used 111 00:07:25,000 --> 00:07:28,960 Speaker 3: in Gaza, the more likely it is that it will 112 00:07:28,960 --> 00:07:35,040 Speaker 3: expand or spread into Lebanon or Chrisbala armed with nearly 113 00:07:35,360 --> 00:07:40,320 Speaker 3: one hundred thousand, much more precise rockets and empowered, emboldened 114 00:07:40,440 --> 00:07:44,520 Speaker 3: and supported by Iran. So this is a you know, 115 00:07:44,600 --> 00:07:48,400 Speaker 3: this is a series of bad choices that need. 116 00:07:48,320 --> 00:07:48,800 Speaker 5: To be made. 117 00:07:50,080 --> 00:07:53,920 Speaker 1: So just thirty seconds left, Ambassador, what is the status 118 00:07:54,040 --> 00:07:55,640 Speaker 1: with Lebanon right now? 119 00:07:57,000 --> 00:08:00,280 Speaker 3: Well, there's there's a ping pong of an extreme change 120 00:08:00,320 --> 00:08:02,920 Speaker 3: of fire going on for the last ninety six hours, 121 00:08:02,920 --> 00:08:08,160 Speaker 3: for the last four days. You know, my my biggest 122 00:08:08,200 --> 00:08:11,880 Speaker 3: stuff fear is that there will be an escalation as 123 00:08:11,920 --> 00:08:15,360 Speaker 3: a result of a miscalculation, That someone will think that 124 00:08:15,440 --> 00:08:18,560 Speaker 3: someone is planning something that the other side didn't really plan, 125 00:08:19,280 --> 00:08:24,320 Speaker 3: and the response would be disproportionate, and that would entail 126 00:08:25,000 --> 00:08:30,120 Speaker 3: a similar or equal disproportionate response and before you know it, 127 00:08:30,200 --> 00:08:34,640 Speaker 3: held breaks loose right now, right now, everyone is poking everyone, 128 00:08:34,720 --> 00:08:38,520 Speaker 3: but it's not it's not an escalatory yet. By the way, 129 00:08:38,800 --> 00:08:40,680 Speaker 3: I know, we don't work out of time. That's the 130 00:08:40,760 --> 00:08:44,840 Speaker 3: reason why President Biden sent the Gerald for the USS 131 00:08:44,960 --> 00:08:45,880 Speaker 3: Gerald carrier group. 132 00:08:46,000 --> 00:08:48,880 Speaker 1: Ye, very good, ambassador, Thank you so much for taking 133 00:08:48,880 --> 00:08:52,760 Speaker 1: the time. Ambassador Alone Pinkus, former israel A General counsel 134 00:08:52,840 --> 00:08:53,600 Speaker 1: in New York. 135 00:08:54,920 --> 00:08:58,760 Speaker 6: You're listening to the tap Kenso Live program Bloomberg Markets 136 00:08:58,800 --> 00:08:59,720 Speaker 6: weekdays at ten. 137 00:08:59,600 --> 00:09:02,120 Speaker 4: Am Darren on Bloomberg dot Com. 138 00:09:01,800 --> 00:09:05,000 Speaker 6: The iHeartRadio app and the Bloomberg Business App, or listening 139 00:09:05,040 --> 00:09:07,160 Speaker 6: on demand wherever you get your podcasts. 140 00:09:09,080 --> 00:09:12,000 Speaker 7: We welcome now our Bloomberg TV audience and radio listeners. 141 00:09:12,080 --> 00:09:14,960 Speaker 7: It is the second major oil deal in just the 142 00:09:14,960 --> 00:09:17,080 Speaker 7: past few weeks, and this is a big one, Chevron 143 00:09:17,080 --> 00:09:20,200 Speaker 7: announcing a fifty three billion dollar all stock deal to 144 00:09:20,280 --> 00:09:22,640 Speaker 7: buy Hess. And we're joined now by the two men 145 00:09:22,679 --> 00:09:25,800 Speaker 7: behind it, Mike Worth, Chevron Chairman and CEO, and John Hess, 146 00:09:26,000 --> 00:09:29,959 Speaker 7: Hess Corporation CEO. Gentlemen, thank you so much. What a pleasure, 147 00:09:30,640 --> 00:09:32,920 Speaker 7: no joke. This is the only question I'm getting today. Well, 148 00:09:32,960 --> 00:09:36,080 Speaker 7: the toy trucks from Hess continue to be available at 149 00:09:36,120 --> 00:09:36,720 Speaker 7: Christmas time. 150 00:09:36,880 --> 00:09:39,520 Speaker 8: Yeah, so you know, not all of you in suspense. Yes, 151 00:09:39,600 --> 00:09:41,600 Speaker 8: they will, Okay, back next year is going to be 152 00:09:41,640 --> 00:09:44,760 Speaker 8: the sixtieth anniversary of the Hestoid truck. We sell them 153 00:09:44,840 --> 00:09:47,760 Speaker 8: on the internet and we continue, we intend to continue 154 00:09:47,760 --> 00:09:48,280 Speaker 8: selling them. 155 00:09:48,360 --> 00:09:50,880 Speaker 9: So I gotta ask, I didn't know about these trucks beforehand. 156 00:09:51,320 --> 00:09:53,720 Speaker 9: Was it part of the deal? Is there some line 157 00:09:53,720 --> 00:09:55,240 Speaker 9: in the deal about the trucks? Was it part of 158 00:09:55,280 --> 00:09:55,880 Speaker 9: the negotiation? 159 00:09:56,520 --> 00:09:58,280 Speaker 8: Let me put it this way, Mike and I came 160 00:09:58,360 --> 00:10:01,640 Speaker 8: to a mutually agreeable understanding. Need to continue selling the trucks. 161 00:10:01,679 --> 00:10:02,160 Speaker 9: That's a yes. 162 00:10:02,559 --> 00:10:05,120 Speaker 7: That has been Actually yes, been two CEOs. So Mike 163 00:10:05,160 --> 00:10:08,560 Speaker 7: walkers through Actually how this deal did come about. We 164 00:10:08,600 --> 00:10:10,360 Speaker 7: heard earlier that you guys been talking for a couple 165 00:10:10,400 --> 00:10:12,480 Speaker 7: of years, and I'm really curious as to why now 166 00:10:12,559 --> 00:10:14,480 Speaker 7: is the right time to make this happen. 167 00:10:14,520 --> 00:10:16,080 Speaker 4: Well, we have been talking for a while. 168 00:10:16,120 --> 00:10:20,679 Speaker 10: There's a terrific alignment between the two companies, our portfolios, 169 00:10:21,000 --> 00:10:25,520 Speaker 10: the cultures of the company and the people, and particularly 170 00:10:25,559 --> 00:10:28,720 Speaker 10: as it has his development in Guiana has continued to 171 00:10:28,720 --> 00:10:32,040 Speaker 10: be de risked and progress. What was at one point 172 00:10:32,120 --> 00:10:35,200 Speaker 10: in time kind of a wider gap in valuation has 173 00:10:35,320 --> 00:10:38,040 Speaker 10: narrowed and the stocks of the two companies have traded 174 00:10:38,080 --> 00:10:39,880 Speaker 10: into a range where it works for both of us. 175 00:10:39,960 --> 00:10:43,520 Speaker 10: And so now's the time that those circumstances have come together. 176 00:10:43,559 --> 00:10:46,040 Speaker 10: But for quite some time we've seen the fit and 177 00:10:46,080 --> 00:10:47,479 Speaker 10: the appeal and been. 178 00:10:47,120 --> 00:10:49,920 Speaker 7: Working on this, which I'm just so curious John, because 179 00:10:50,840 --> 00:10:53,080 Speaker 7: on the call, it seemed like some analysts were intimating 180 00:10:53,080 --> 00:10:54,760 Speaker 7: the Hey, did you get a high enough price? 181 00:10:54,960 --> 00:10:55,240 Speaker 4: Sure? 182 00:10:55,520 --> 00:10:57,839 Speaker 7: And also you're doing things very well in Guyana, and 183 00:10:57,840 --> 00:10:59,640 Speaker 7: I appreciate it's also the back and etc. But we 184 00:10:59,640 --> 00:11:01,720 Speaker 7: just spoke Gaiana. You guys are already crushing it, like 185 00:11:01,920 --> 00:11:02,880 Speaker 7: why do you need Chevron? 186 00:11:03,240 --> 00:11:06,440 Speaker 8: Yeah, well, it's a great question. I think some context 187 00:11:06,520 --> 00:11:10,040 Speaker 8: would be important. Our stock for the last five years 188 00:11:10,200 --> 00:11:13,760 Speaker 8: was the number one total shareholder return in the industry, 189 00:11:13,800 --> 00:11:17,000 Speaker 8: whether it's independent or whether it's major oil company. Last 190 00:11:17,040 --> 00:11:20,560 Speaker 8: year our stock went up ninety four percent, number two 191 00:11:20,600 --> 00:11:23,840 Speaker 8: on the SMP. So we've already created a lot of value. 192 00:11:24,480 --> 00:11:28,160 Speaker 8: At the same time, now that the pricing got in 193 00:11:28,280 --> 00:11:31,400 Speaker 8: arrange that would work both for Chevron and work for Hess, 194 00:11:32,440 --> 00:11:34,920 Speaker 8: we think we came up with a win win. Hess 195 00:11:35,880 --> 00:11:39,439 Speaker 8: brings Chevron growth in resource growth in production, growth in 196 00:11:39,559 --> 00:11:43,840 Speaker 8: cash flow. Chevron brings Hess financial strength in terms of 197 00:11:43,880 --> 00:11:47,800 Speaker 8: a diversity of world class assets, in terms of sterling 198 00:11:47,880 --> 00:11:52,040 Speaker 8: balance sheet, and in terms of industry leading cash returns, 199 00:11:52,040 --> 00:11:54,560 Speaker 8: and when you put the two together, you create the 200 00:11:54,640 --> 00:11:58,600 Speaker 8: premier oil and gas company position for the energy transition. 201 00:12:00,240 --> 00:12:02,680 Speaker 9: Mike, what I'm hearing here is that this is a 202 00:12:02,679 --> 00:12:06,520 Speaker 9: great fit. Could you do this on your own? Could 203 00:12:06,559 --> 00:12:11,679 Speaker 9: you build what Hess has built from the ground up? 204 00:12:12,000 --> 00:12:14,040 Speaker 9: Is it easier to buy than build right now? 205 00:12:14,160 --> 00:12:17,199 Speaker 10: Well, Look, this is about long term growth and long 206 00:12:17,320 --> 00:12:21,000 Speaker 10: term value, which is what we're always seeking. Hess has 207 00:12:21,040 --> 00:12:24,760 Speaker 10: a unique portfolio that actually strengthens our portfolio with some 208 00:12:24,800 --> 00:12:26,760 Speaker 10: things we're always trying to do. We're always out exploring, 209 00:12:26,800 --> 00:12:30,760 Speaker 10: we're looking for new findes. Gianus the biggest discovery in 210 00:12:30,800 --> 00:12:33,360 Speaker 10: more than a decade in this industry. It's just a 211 00:12:33,600 --> 00:12:37,840 Speaker 10: unique and compelling asset, and so it would be difficult 212 00:12:37,880 --> 00:12:40,680 Speaker 10: for us to do on our own. We continue to explore, 213 00:12:40,720 --> 00:12:43,400 Speaker 10: we'll continue. Everybody in our industry is looking for these things. 214 00:12:43,679 --> 00:12:45,640 Speaker 10: But this was a great opportunity for us to join 215 00:12:45,679 --> 00:12:48,840 Speaker 10: a partnership that's done a terrific job in developing this asset. 216 00:12:48,880 --> 00:12:51,640 Speaker 10: But also the other assets in the Hess portfolio are 217 00:12:51,679 --> 00:12:53,640 Speaker 10: ones that will be additive for us as well, the 218 00:12:53,679 --> 00:12:56,320 Speaker 10: back in the deep water Gulf of Mexico Southeast Asia. 219 00:12:56,400 --> 00:12:59,240 Speaker 10: And so it's a very nice fit at a portfolio level, 220 00:12:59,320 --> 00:13:01,280 Speaker 10: nice fit at a culture level, and we're going to 221 00:13:01,280 --> 00:13:02,679 Speaker 10: create more value for shareholders. 222 00:13:02,760 --> 00:13:04,360 Speaker 7: Yeah, so let's get to the boggin part too. So 223 00:13:04,400 --> 00:13:06,520 Speaker 7: how important is the balcon going to be in your portfolio? 224 00:13:06,600 --> 00:13:08,520 Speaker 7: Because clearly the rhetoric apter this deal was it's all 225 00:13:08,559 --> 00:13:11,240 Speaker 7: about Guiana, right, Like, that's this deep water, it's amazing, 226 00:13:11,360 --> 00:13:13,320 Speaker 7: the costs are solo is going to be awesome. Well, 227 00:13:13,360 --> 00:13:14,199 Speaker 7: where's the balcon in this? 228 00:13:14,520 --> 00:13:15,840 Speaker 4: Well, Balcon's very important. 229 00:13:15,960 --> 00:13:18,760 Speaker 10: We've got a big shale business already right with positions 230 00:13:18,760 --> 00:13:22,040 Speaker 10: of the Permian, the DJ Basin. We're the largest producer 231 00:13:22,040 --> 00:13:24,079 Speaker 10: and Hess has been doing a great job in the 232 00:13:24,080 --> 00:13:26,480 Speaker 10: baking for a long time. That's really where this all began. 233 00:13:27,080 --> 00:13:30,199 Speaker 10: And so for us, it's about adding another scaled position 234 00:13:30,320 --> 00:13:33,600 Speaker 10: in shale that is performing very well. We can bring 235 00:13:33,640 --> 00:13:36,520 Speaker 10: whatever expertise we may have. We're working on technologies to 236 00:13:36,559 --> 00:13:40,319 Speaker 10: improve recovery and learn from our new colleagues at Hess. 237 00:13:40,400 --> 00:13:42,600 Speaker 10: We were doing things in a basin when we went 238 00:13:42,640 --> 00:13:44,520 Speaker 10: to the DJ we learned some things that we hadn't 239 00:13:44,520 --> 00:13:46,199 Speaker 10: been doing in the Permian that made us better. I'm 240 00:13:46,200 --> 00:13:48,839 Speaker 10: certain the same thing will happen here. So it's absolutely 241 00:13:48,880 --> 00:13:50,240 Speaker 10: an important part of the transaction. 242 00:13:50,480 --> 00:13:53,240 Speaker 9: Tony took about the price narrowing. You started off far 243 00:13:53,280 --> 00:13:57,319 Speaker 9: apop bidosk kind of widespread, Kate Man, what bruls it in? 244 00:13:57,720 --> 00:14:01,760 Speaker 9: What facts has allowed you to bring that understanding between 245 00:14:01,760 --> 00:14:02,720 Speaker 9: the two films together. 246 00:14:03,040 --> 00:14:07,400 Speaker 8: Well, you know, the gap in shareholders recognizing our value. 247 00:14:08,280 --> 00:14:11,280 Speaker 8: We weren't getting credit for this eleven billion barrels of 248 00:14:11,320 --> 00:14:13,680 Speaker 8: oil equivalent resource. 249 00:14:13,240 --> 00:14:14,480 Speaker 4: That we had in the market. 250 00:14:14,559 --> 00:14:16,000 Speaker 9: Narraed the gap for you, Yes. 251 00:14:16,480 --> 00:14:19,400 Speaker 8: Exactly, and then it got to the point where it 252 00:14:19,440 --> 00:14:21,200 Speaker 8: got to the wind zone for Mike and the wind 253 00:14:21,320 --> 00:14:23,320 Speaker 8: zone for us. And you know, you also got to 254 00:14:23,360 --> 00:14:25,520 Speaker 8: remember this is a stock for stock deals, So some 255 00:14:25,560 --> 00:14:28,200 Speaker 8: people would say, well, geez, you're selling it, and we're 256 00:14:28,200 --> 00:14:31,240 Speaker 8: not selling for cash. We're staying invested. Our family is 257 00:14:31,320 --> 00:14:33,400 Speaker 8: going to be a long term shareholder of Chevron, and 258 00:14:33,440 --> 00:14:35,520 Speaker 8: we're happy about it, and we think there's going to 259 00:14:35,520 --> 00:14:37,920 Speaker 8: be a lot of upside to come in addition to 260 00:14:38,000 --> 00:14:40,720 Speaker 8: which our own dividend is going to go from a 261 00:14:40,760 --> 00:14:43,480 Speaker 8: dollar seventy five a share to six dollars a share 262 00:14:43,480 --> 00:14:45,840 Speaker 8: and next year six fifty a share. So you're getting 263 00:14:45,880 --> 00:14:49,040 Speaker 8: the benefit of growth and asset value with growth, and 264 00:14:49,080 --> 00:14:51,160 Speaker 8: cash with turns. And that's a magic formula. And I 265 00:14:51,200 --> 00:14:53,640 Speaker 8: think it'll be the best oil company to own and 266 00:14:53,720 --> 00:14:55,680 Speaker 8: actually the best oil company to work for. 267 00:14:55,840 --> 00:14:57,520 Speaker 7: I have to say, you guys seem to get along 268 00:14:57,600 --> 00:15:00,240 Speaker 7: quite well. You don't al Wes see that with the 269 00:15:00,280 --> 00:15:04,600 Speaker 7: oil mergers. How did you guys first start this conversation 270 00:15:05,040 --> 00:15:05,640 Speaker 7: like years ago? 271 00:15:05,680 --> 00:15:06,640 Speaker 9: What what was that? 272 00:15:06,800 --> 00:15:08,360 Speaker 7: Was it like you guys at a Sarah Week dinner 273 00:15:08,440 --> 00:15:09,440 Speaker 7: like chatting? 274 00:15:09,440 --> 00:15:10,000 Speaker 9: What was it like? 275 00:15:10,680 --> 00:15:13,480 Speaker 10: It was actually the dinner, but it wasn't at sarah Wick, 276 00:15:13,560 --> 00:15:15,920 Speaker 10: it was at another location. But look, John and I 277 00:15:15,960 --> 00:15:18,800 Speaker 10: have been friends. We've been great admirers of hess. I've 278 00:15:18,800 --> 00:15:21,320 Speaker 10: been a great admirer of John for many, many years, 279 00:15:22,000 --> 00:15:24,520 Speaker 10: and it was a very natural evolution, I think, as 280 00:15:24,520 --> 00:15:27,480 Speaker 10: we're both looking to improve our businesses and create value 281 00:15:27,480 --> 00:15:30,600 Speaker 10: for our Shareholder's been a nice conversation. As John said, 282 00:15:30,600 --> 00:15:34,160 Speaker 10: in the beginning, the market wasn't recognizing the potential in 283 00:15:34,480 --> 00:15:37,080 Speaker 10: the Guiana acid in particulars that's been de risked and 284 00:15:37,120 --> 00:15:39,880 Speaker 10: as we get closer and closer to this cash flow inflection, 285 00:15:40,440 --> 00:15:42,920 Speaker 10: we really did move into this zone. But it's been 286 00:15:43,040 --> 00:15:46,160 Speaker 10: very it's been a very friendly discussion along the way 287 00:15:46,320 --> 00:15:48,920 Speaker 10: like it and by the way, you haven't mentioned yet, 288 00:15:48,920 --> 00:15:51,040 Speaker 10: but we look forward to John joining Chevron's board of 289 00:15:51,080 --> 00:15:54,680 Speaker 10: directors and continuing to exert influence over the strategy of 290 00:15:54,680 --> 00:15:58,560 Speaker 10: our company. And he's got key relationships with partners and 291 00:15:58,760 --> 00:16:01,560 Speaker 10: governments around the world that will continue to benefit from us. 292 00:16:01,920 --> 00:16:03,720 Speaker 8: And also, if I can, you know, Mike and I'm 293 00:16:03,800 --> 00:16:07,320 Speaker 8: known as each other through the industry for years. I 294 00:16:07,360 --> 00:16:09,040 Speaker 8: have a lot of respect for him. I think he's 295 00:16:09,080 --> 00:16:11,160 Speaker 8: the best CEO in the energy industry, one of the 296 00:16:11,200 --> 00:16:14,040 Speaker 8: best in the United States. So have a lot of 297 00:16:14,040 --> 00:16:14,800 Speaker 8: respect for him. 298 00:16:14,840 --> 00:16:17,360 Speaker 7: So it wasn't succession things for Hess. It was a 299 00:16:17,360 --> 00:16:18,160 Speaker 7: lot of succession. 300 00:16:18,440 --> 00:16:21,080 Speaker 8: No, No, we were actually prepared to continue as an 301 00:16:21,080 --> 00:16:25,080 Speaker 8: independent That's what our history is. We're celebrating our ninetieth 302 00:16:25,080 --> 00:16:28,080 Speaker 8: anniversary as a company this year. We have the best 303 00:16:28,080 --> 00:16:30,400 Speaker 8: hand in the business, the best growth portfolio the business, 304 00:16:30,440 --> 00:16:32,480 Speaker 8: and we're just executing the strategy go forward. 305 00:16:32,880 --> 00:16:35,240 Speaker 5: But you know, Chevron. 306 00:16:34,840 --> 00:16:38,960 Speaker 8: Brings forward that diverse portfolio of assets, strong balance sheet, 307 00:16:39,160 --> 00:16:41,680 Speaker 8: as well as high cash returns. And you put those 308 00:16:41,680 --> 00:16:45,880 Speaker 8: strains together with our growth trains, you really create I'd say, 309 00:16:46,080 --> 00:16:48,520 Speaker 8: you know, the premier energy company that's out there, Mike. 310 00:16:48,560 --> 00:16:51,000 Speaker 9: There aren't many assets like Hess out there, but there 311 00:16:51,000 --> 00:16:52,720 Speaker 9: are a lot of assets out there. And I hate 312 00:16:52,760 --> 00:16:54,080 Speaker 9: to sort of ask this question or day when you 313 00:16:54,160 --> 00:16:56,440 Speaker 9: doing a massive deal, what have you done yet? Is 314 00:16:56,440 --> 00:16:58,600 Speaker 9: this an industry that is going to continue to consolidate. 315 00:16:58,640 --> 00:17:01,240 Speaker 9: We've just seen two really big deals in as many 316 00:17:01,280 --> 00:17:02,680 Speaker 9: weeks that can't be by accident. 317 00:17:03,400 --> 00:17:06,119 Speaker 10: Well, I can only speak to our deal, and this 318 00:17:06,160 --> 00:17:07,879 Speaker 10: is the right deal for us. We actually did another 319 00:17:07,920 --> 00:17:12,679 Speaker 10: deal earlier this year. So for us, integrating is very important. 320 00:17:12,720 --> 00:17:14,960 Speaker 10: To do a transaction, you actually to create value. You 321 00:17:14,960 --> 00:17:17,680 Speaker 10: need to bring the companies together, the people. You need 322 00:17:17,720 --> 00:17:20,520 Speaker 10: to continue to operate safely and deliver to your customers. 323 00:17:20,560 --> 00:17:24,320 Speaker 10: And so our focus for the next you know, several months, 324 00:17:24,560 --> 00:17:28,240 Speaker 10: if not longer, is really about execution and executing well 325 00:17:28,920 --> 00:17:31,240 Speaker 10: in the long of time. You know, our industry has 326 00:17:31,280 --> 00:17:35,199 Speaker 10: grown through organic and inorganic activity every time our company 327 00:17:35,240 --> 00:17:37,320 Speaker 10: has done the same. And I do think you know, 328 00:17:37,359 --> 00:17:39,680 Speaker 10: in the future, there potentially could be other things, but 329 00:17:39,760 --> 00:17:42,159 Speaker 10: that's that's not here and now that's further down the 330 00:17:42,200 --> 00:17:42,840 Speaker 10: road for sure. 331 00:17:42,920 --> 00:17:45,320 Speaker 7: Do you guys think that oil's going to stay volatile 332 00:17:45,520 --> 00:17:47,800 Speaker 7: and trade above one hundred hundred and fifty. I'm not 333 00:17:47,840 --> 00:17:49,240 Speaker 7: going to John, because I feel like maybe you can 334 00:17:49,280 --> 00:17:51,200 Speaker 7: talk more about what you really think the oil price 335 00:17:51,320 --> 00:17:52,000 Speaker 7: is going to be. Now. 336 00:17:52,240 --> 00:17:55,040 Speaker 8: Look, you know, in the short term there's a direct 337 00:17:55,080 --> 00:18:00,160 Speaker 8: correlation between world oil inventories and price. World inventories are 338 00:18:00,240 --> 00:18:03,080 Speaker 8: drawing at about a million barrels a day this quarter. As 339 00:18:03,119 --> 00:18:05,000 Speaker 8: you get to next year, do we think demand's going 340 00:18:05,040 --> 00:18:07,320 Speaker 8: to grow maybe a million and a half barrels a 341 00:18:07,359 --> 00:18:10,040 Speaker 8: day barring a worldwide recession. Hopefully we don't get there. 342 00:18:10,080 --> 00:18:12,800 Speaker 8: I know they are all kinds of geop political events, 343 00:18:12,840 --> 00:18:15,439 Speaker 8: be it in the Ukraine or be it in the 344 00:18:15,560 --> 00:18:19,159 Speaker 8: levent that are going on right now, tragic events. But 345 00:18:19,440 --> 00:18:22,320 Speaker 8: taking that factor out, you know, we think the market's 346 00:18:22,359 --> 00:18:24,320 Speaker 8: going to be tight and the supply side of the 347 00:18:24,359 --> 00:18:26,240 Speaker 8: equation is going to have to run fast to keep 348 00:18:26,320 --> 00:18:29,520 Speaker 8: up with the demand side. Shales no longer the swing producer. 349 00:18:29,640 --> 00:18:32,000 Speaker 8: Saudi Arabia and Opek are They're going to keep the 350 00:18:32,040 --> 00:18:35,000 Speaker 8: market stabilized. But I think the real issue for the 351 00:18:35,040 --> 00:18:37,840 Speaker 8: world to understand is that oil and gas are needed 352 00:18:37,880 --> 00:18:41,640 Speaker 8: for decades. They're key to an affordable, just and secure 353 00:18:41,800 --> 00:18:46,440 Speaker 8: energy transition. I think the conflict in Ukraine put a 354 00:18:46,480 --> 00:18:49,560 Speaker 8: shining light on energy security. And at the end of 355 00:18:49,640 --> 00:18:53,560 Speaker 8: the day, you know, oil and gas are strategic industry 356 00:18:53,640 --> 00:18:56,720 Speaker 8: for our country in terms of jobs twelve million jobs, 357 00:18:56,760 --> 00:19:00,840 Speaker 8: more than automotive direct and indirect, in terms of electricity 358 00:19:00,880 --> 00:19:03,080 Speaker 8: costs two to three times less than they are in 359 00:19:03,119 --> 00:19:06,960 Speaker 8: Europe and most of Asia, and ultimately national security. We're 360 00:19:07,080 --> 00:19:10,720 Speaker 8: energy independent Europe by seventy percent of their oil, China 361 00:19:10,720 --> 00:19:13,040 Speaker 8: buy seventy percent of their oil, so we have a 362 00:19:13,080 --> 00:19:17,840 Speaker 8: real strength. We should be leaning into it for economic prosperity, 363 00:19:18,040 --> 00:19:19,600 Speaker 8: but also national security. 364 00:19:19,720 --> 00:19:21,639 Speaker 9: Mike, isn't that the real message from this deal? You 365 00:19:21,640 --> 00:19:24,040 Speaker 9: could have done a deal in the energy transition space, 366 00:19:24,400 --> 00:19:27,280 Speaker 9: you didn't. You did this deal. Isn't the message coming 367 00:19:27,280 --> 00:19:33,440 Speaker 9: from this that the industry is now to point where 368 00:19:33,640 --> 00:19:35,159 Speaker 9: it is going to invest in the future, That the 369 00:19:35,280 --> 00:19:39,000 Speaker 9: energy transition story is of interest, but it's not the 370 00:19:39,000 --> 00:19:42,359 Speaker 9: only area of interest. That this is an industry the 371 00:19:42,400 --> 00:19:46,000 Speaker 9: country that the world still needs to rely on. You 372 00:19:46,040 --> 00:19:48,440 Speaker 9: could have done other deals, you did. This one isn't 373 00:19:48,440 --> 00:19:49,439 Speaker 9: that the message that comes. 374 00:19:49,280 --> 00:19:51,080 Speaker 10: From this, well, I'd put it a little differently, Gay. 375 00:19:51,160 --> 00:19:52,280 Speaker 10: We have done other deals. 376 00:19:52,400 --> 00:19:52,640 Speaker 4: Yeah. 377 00:19:52,680 --> 00:19:55,720 Speaker 10: Earlier this quarter we closed on the largest green hydrogen 378 00:19:56,320 --> 00:19:59,399 Speaker 10: manufacturing and storage facility that will be built in the 379 00:19:59,480 --> 00:20:02,720 Speaker 10: United States. We're the second largest renewable fuels producer in 380 00:20:02,760 --> 00:20:06,439 Speaker 10: the US and we're expanding our production capacity there. So 381 00:20:06,520 --> 00:20:09,040 Speaker 10: we are doing the other deals. But I think the 382 00:20:09,080 --> 00:20:12,200 Speaker 10: point that John's making is really important. We need to 383 00:20:12,240 --> 00:20:14,720 Speaker 10: continue to invest in the energy system that supplies the 384 00:20:14,760 --> 00:20:17,600 Speaker 10: world today, even as we're investing in one that can 385 00:20:17,640 --> 00:20:20,359 Speaker 10: integrate into that and help produce the carbon intensity tomorrow. 386 00:20:20,440 --> 00:20:23,240 Speaker 10: We believe the future of energy is lower carbon. We 387 00:20:23,280 --> 00:20:26,359 Speaker 10: believe these new technologies will play a greater role, and 388 00:20:26,400 --> 00:20:28,520 Speaker 10: we continue to invest. So I don't think you should 389 00:20:28,520 --> 00:20:31,480 Speaker 10: read this as a lack of commitment to the energy transition. 390 00:20:31,920 --> 00:20:33,879 Speaker 10: But we need to invest in what the world runs 391 00:20:33,880 --> 00:20:36,640 Speaker 10: on today. This makes us a stronger producer. It takes 392 00:20:36,680 --> 00:20:39,119 Speaker 10: two great American companies and brings them together, which is 393 00:20:39,119 --> 00:20:42,520 Speaker 10: good for national security and economic security. And we're committed. 394 00:20:42,600 --> 00:20:44,800 Speaker 10: Both of our companies are committed to a lower carbon 395 00:20:44,920 --> 00:20:45,920 Speaker 10: energy system. 396 00:20:46,000 --> 00:20:49,240 Speaker 7: Mike, speaking of are you able to pump more in 397 00:20:49,280 --> 00:20:51,800 Speaker 7: Venezuela right now, and we be investing more in Venezuela 398 00:20:51,880 --> 00:20:53,400 Speaker 7: because of some sanction relief. 399 00:20:54,119 --> 00:20:57,400 Speaker 10: So we have seen production in our ventures in Venezuela 400 00:20:57,680 --> 00:21:00,600 Speaker 10: increase this year from around fifty five and barrels a 401 00:21:00,640 --> 00:21:03,240 Speaker 10: day when the year began to something between one hundred 402 00:21:03,280 --> 00:21:05,879 Speaker 10: and one hundred and fifty today, and we've been gradually 403 00:21:05,920 --> 00:21:10,119 Speaker 10: seeing that come up. We've recently seen some further actions 404 00:21:10,200 --> 00:21:13,920 Speaker 10: by the US to reduce some of the sanctions on Venezuela. 405 00:21:14,440 --> 00:21:17,080 Speaker 10: This is a slow moving story. 406 00:21:17,200 --> 00:21:19,520 Speaker 7: It's sustainable, though, Like if you increase to one fifty, 407 00:21:19,520 --> 00:21:20,480 Speaker 7: can you hold it there? 408 00:21:20,960 --> 00:21:22,800 Speaker 10: I think we can as long as we can operate 409 00:21:22,840 --> 00:21:24,920 Speaker 10: the way we're operating today, and some of these constraints 410 00:21:24,960 --> 00:21:29,640 Speaker 10: have been taken off of us, and the Venezuelan industry 411 00:21:29,640 --> 00:21:31,960 Speaker 10: has been under pressure for a variety of reasons for 412 00:21:32,000 --> 00:21:34,840 Speaker 10: the last couple of decades, and turning that around will 413 00:21:34,880 --> 00:21:37,480 Speaker 10: take time and it will take investment. So I wouldn't 414 00:21:37,480 --> 00:21:40,520 Speaker 10: expect this to be something that goes up dramatically, but yes, 415 00:21:40,600 --> 00:21:44,160 Speaker 10: we've seen some steady improvement and we're looking to try 416 00:21:44,160 --> 00:21:44,800 Speaker 10: to continue that. 417 00:21:45,359 --> 00:21:47,520 Speaker 7: Gentlemen, thank you so much. We could talk forever, but 418 00:21:47,720 --> 00:21:50,000 Speaker 7: We'll let you guys go. It's been a very long day. Mike. 419 00:21:50,040 --> 00:21:53,760 Speaker 7: We're at Chevron chairman and CEO and John hess Has Corporation. 420 00:21:53,840 --> 00:21:54,920 Speaker 7: Cee you congrats on the merger. 421 00:21:54,920 --> 00:21:55,160 Speaker 11: Guys. 422 00:21:55,200 --> 00:21:55,560 Speaker 4: Thank you. 423 00:21:55,560 --> 00:21:58,520 Speaker 6: You're listening to the take can to our live program 424 00:21:58,600 --> 00:22:02,560 Speaker 6: Bloomberg Markets. He's at ten am Eastern on Bloomberg Radio, 425 00:22:02,720 --> 00:22:04,800 Speaker 6: the tune in app, Bloomberg dot Com, and. 426 00:22:04,760 --> 00:22:06,040 Speaker 4: The Bloomberg Business app. 427 00:22:06,119 --> 00:22:08,919 Speaker 6: You can also listen live on Amazon Alexa from our 428 00:22:08,960 --> 00:22:14,080 Speaker 6: flagship New York station Just Say Alexa playing Bloomberg eleven thirty. 429 00:22:15,160 --> 00:22:15,320 Speaker 11: R J. 430 00:22:15,440 --> 00:22:18,000 Speaker 1: Gallow he's at that Federated Hermes thing. I first met 431 00:22:18,040 --> 00:22:21,840 Speaker 1: the Federated folks out in Pittsburgh. That's kind of where 432 00:22:21,840 --> 00:22:24,600 Speaker 1: they hang out. But they're all over the place these days. Hey, RJ. 433 00:22:24,920 --> 00:22:27,840 Speaker 1: We see Bill Ackman here says he's covered his bond 434 00:22:27,840 --> 00:22:31,960 Speaker 1: short amid mounting global risk. Did you notice that? And 435 00:22:32,040 --> 00:22:34,040 Speaker 1: kind of what's that? Do you have any comment there? 436 00:22:35,240 --> 00:22:36,320 Speaker 4: Well, so even. 437 00:22:36,119 --> 00:22:39,520 Speaker 12: Gets a lot of attention in the market, and you know, 438 00:22:39,800 --> 00:22:42,480 Speaker 12: more attention than r J. Gallow A Federated Hermes and 439 00:22:42,520 --> 00:22:45,800 Speaker 12: that makes sense. But I would note that we have 440 00:22:45,880 --> 00:22:49,800 Speaker 12: Federated Hermes have been leaning along and we've been wrong. 441 00:22:50,480 --> 00:22:53,879 Speaker 12: The bond market sell off has taken on sort of 442 00:22:53,880 --> 00:22:56,280 Speaker 12: a life of its own. It's knocking down all kinds 443 00:22:56,280 --> 00:22:58,720 Speaker 12: of financial assets. Stocks are looking at bonds an awful 444 00:22:58,760 --> 00:23:01,880 Speaker 12: lot these days. I can't say I'm surprised that Bill 445 00:23:01,920 --> 00:23:04,880 Speaker 12: Ackman's comment. I mean, there's one sentence that is very, 446 00:23:05,040 --> 00:23:07,879 Speaker 12: very very brief, but it tells you what he's thinking. 447 00:23:08,480 --> 00:23:12,520 Speaker 12: I do think the geopolitical situation has deteriorated sharply for 448 00:23:12,600 --> 00:23:17,000 Speaker 12: obvious reasons, and the prospect of a wider conflict, you know, 449 00:23:17,080 --> 00:23:20,680 Speaker 12: bringing in many different parties. You know, typically when when 450 00:23:20,720 --> 00:23:24,800 Speaker 12: things like this happen, it should be friendly to treasury prices. 451 00:23:24,840 --> 00:23:28,080 Speaker 12: So far, we've only had brief moments of that, and 452 00:23:28,240 --> 00:23:29,879 Speaker 12: there could be more to come. It's hard to be 453 00:23:30,000 --> 00:23:33,240 Speaker 12: short treasuries when there's so much geopolitical risk and so 454 00:23:33,320 --> 00:23:34,960 Speaker 12: many potential directions this could go. 455 00:23:35,640 --> 00:23:40,399 Speaker 2: But it's hard to be long, especially duration, when you 456 00:23:40,440 --> 00:23:45,040 Speaker 2: know little swings in yield can mean a huge swing 457 00:23:45,080 --> 00:23:49,520 Speaker 2: in the price, and we're seeing big swings in yields, right, 458 00:23:49,600 --> 00:23:50,720 Speaker 2: So how do you deal with that? 459 00:23:52,680 --> 00:23:54,440 Speaker 12: It's a great point. I mean, now, first of all, 460 00:23:55,080 --> 00:23:58,919 Speaker 12: remember just some some bond math the The fact that 461 00:23:59,000 --> 00:24:02,520 Speaker 12: yields have risen has taken the duration on the US 462 00:24:02,640 --> 00:24:07,760 Speaker 12: Treasury Index to five seventy two. Last back in May, 463 00:24:07,960 --> 00:24:11,200 Speaker 12: it was six thirty nine. You know, that's these are 464 00:24:11,320 --> 00:24:16,000 Speaker 12: positively convect instruments, right. So the fact of the matter 465 00:24:16,119 --> 00:24:19,200 Speaker 12: is is that the duration passive duration of the index 466 00:24:19,240 --> 00:24:23,480 Speaker 12: has gotten shorter because yields have gone higher. That doesn't 467 00:24:23,520 --> 00:24:27,200 Speaker 12: necessarily insulate you from price loss, but you're losing at 468 00:24:27,320 --> 00:24:31,320 Speaker 12: lesser and lesser velocity as a result. So but we're 469 00:24:31,359 --> 00:24:33,320 Speaker 12: not focusing as much on that as much as we 470 00:24:33,359 --> 00:24:37,600 Speaker 12: are the fundamentals that we think are apt to erode. 471 00:24:37,800 --> 00:24:40,639 Speaker 12: The economy has been red hot. It is obviously clear 472 00:24:40,880 --> 00:24:45,679 Speaker 12: employment strong. There's very few signs of the consumer fading. 473 00:24:45,800 --> 00:24:48,960 Speaker 12: Just yet, we think it's a matter of time that 474 00:24:49,080 --> 00:24:53,679 Speaker 12: the diminishment of that COVID area access savings pressure on 475 00:24:53,760 --> 00:24:58,760 Speaker 12: small businesses much much higher borrowing costs all over the economy. 476 00:24:59,640 --> 00:25:02,960 Speaker 12: You know, the rules of economics have not been revoked. 477 00:25:02,600 --> 00:25:06,080 Speaker 12: The time frame and the lags are difficult this time. 478 00:25:06,119 --> 00:25:08,760 Speaker 12: But we still think we will manifest itself in a 479 00:25:08,880 --> 00:25:12,160 Speaker 12: slower economy and we'll get some relief from these current 480 00:25:12,160 --> 00:25:15,320 Speaker 12: bond yields, and yield should retrace somewhat lower over the 481 00:25:15,320 --> 00:25:17,480 Speaker 12: next three to six months, so we're stilling. 482 00:25:17,200 --> 00:25:19,119 Speaker 2: We've got to be slower than five percent, which is 483 00:25:19,119 --> 00:25:22,760 Speaker 2: what we're hearing in terms of third quarter guestimates and 484 00:25:22,800 --> 00:25:26,760 Speaker 2: even for Q four some forecasts. My question on the 485 00:25:26,800 --> 00:25:32,959 Speaker 2: consumer is, clearly the consumer is going to spend down savings, 486 00:25:33,160 --> 00:25:36,040 Speaker 2: and clearly the consumer is putting more on credit cards 487 00:25:36,080 --> 00:25:38,960 Speaker 2: and we're seeing delinquencies pop up. But is that more 488 00:25:39,119 --> 00:25:42,600 Speaker 2: than you know it usually is or are we just 489 00:25:42,640 --> 00:25:45,440 Speaker 2: getting back to pre COVID levels. 490 00:25:46,680 --> 00:25:48,679 Speaker 12: No, it's a great question, and we recently had a 491 00:25:48,680 --> 00:25:51,560 Speaker 12: webcast with some colleagues, Orlando and Linda Distil, who talked 492 00:25:51,560 --> 00:25:54,439 Speaker 12: to you guys sometimes both TV and radio, and we 493 00:25:54,440 --> 00:25:56,720 Speaker 12: were trying to sort of back up and look at 494 00:25:56,720 --> 00:25:58,800 Speaker 12: the whole picture for the consumer, because the bottom line is, 495 00:25:58,840 --> 00:26:01,439 Speaker 12: even though there are negative some of which we just 496 00:26:01,520 --> 00:26:05,360 Speaker 12: touched on, the unemployment rate is low, real personal incomes 497 00:26:05,440 --> 00:26:08,280 Speaker 12: relative to the now lower level of inflation, albeit stole 498 00:26:08,359 --> 00:26:10,639 Speaker 12: north of two, but lower than it was, real personal 499 00:26:10,720 --> 00:26:14,840 Speaker 12: incomes have gone up. When you think about the benefits 500 00:26:14,880 --> 00:26:18,920 Speaker 12: to savers from having very safe liquid assets like money 501 00:26:18,920 --> 00:26:20,879 Speaker 12: market funds, which We manage plenty of them here at 502 00:26:20,880 --> 00:26:24,199 Speaker 12: federated hermes. People in the hir income brackets who have 503 00:26:24,280 --> 00:26:26,480 Speaker 12: plenty of savings and aren't pulling it all down to 504 00:26:26,520 --> 00:26:30,880 Speaker 12: spend are benefiting from low risk, real returns. So there 505 00:26:30,920 --> 00:26:34,480 Speaker 12: are tailwinds to the consumer. We are not calling for 506 00:26:34,560 --> 00:26:36,800 Speaker 12: a collapsing consumer, and that's not the case at all. 507 00:26:37,040 --> 00:26:38,960 Speaker 12: I think what we're going to see is that the 508 00:26:39,320 --> 00:26:43,040 Speaker 12: median household, maybe even up to the top twenty percent 509 00:26:43,040 --> 00:26:45,840 Speaker 12: of households. Everybody but the top twenty percent is probably 510 00:26:45,880 --> 00:26:48,960 Speaker 12: going to fade enough so that the economic momentum coming 511 00:26:48,960 --> 00:26:50,760 Speaker 12: out of what will be a very strong print for 512 00:26:50,840 --> 00:26:53,720 Speaker 12: Q three GDP is going to slow down. That the 513 00:26:53,720 --> 00:26:56,399 Speaker 12: economy is not about to tank, but it's going to slow, 514 00:26:56,480 --> 00:26:58,080 Speaker 12: and that's going to be good news for the FED 515 00:26:58,440 --> 00:27:00,960 Speaker 12: in their broader effort to still get in going down. 516 00:27:01,160 --> 00:27:04,119 Speaker 12: Then you throw in the geopolitical risk, the sentiment destroying 517 00:27:04,520 --> 00:27:09,320 Speaker 12: challenges that occur from wars happening across different parts of 518 00:27:09,359 --> 00:27:12,359 Speaker 12: the world. We think that the economy is going to slow, 519 00:27:12,400 --> 00:27:14,600 Speaker 12: the net impact on the consumer is a negative enough 520 00:27:15,000 --> 00:27:17,399 Speaker 12: not for them to collapse, but to fade from what 521 00:27:17,480 --> 00:27:19,359 Speaker 12: has been a breakneck pace of spending. 522 00:27:20,000 --> 00:27:20,440 Speaker 4: Hey, RJ. 523 00:27:20,560 --> 00:27:23,080 Speaker 1: When I look at the Bloomberg Index browser, I n 524 00:27:23,280 --> 00:27:25,000 Speaker 1: go for those sitting in front of a terminal. I 525 00:27:25,000 --> 00:27:27,600 Speaker 1: see the only place in the US fixed income that's 526 00:27:28,280 --> 00:27:31,120 Speaker 1: in the green this year is US corporate high yield 527 00:27:31,200 --> 00:27:34,480 Speaker 1: up three point nine percent. Do I stay with that trade? 528 00:27:34,520 --> 00:27:36,160 Speaker 1: Do I add to it? Or do I say, boy, 529 00:27:36,160 --> 00:27:38,880 Speaker 1: maybe I should redeploy high yield here? 530 00:27:39,640 --> 00:27:42,200 Speaker 12: Yeah, I have an ull screen on my launch pat 531 00:27:42,280 --> 00:27:44,480 Speaker 12: year that I've built, and it's just a sea of red, 532 00:27:45,720 --> 00:27:47,760 Speaker 12: and the greens that show up are few and far 533 00:27:47,840 --> 00:27:51,520 Speaker 12: between leverage loans or another space that actually has some 534 00:27:51,560 --> 00:27:54,760 Speaker 12: positives in both of those cases, leverage loans and US 535 00:27:54,800 --> 00:27:57,280 Speaker 12: high yield. To your question, you know that's a credit 536 00:27:57,280 --> 00:28:00,600 Speaker 12: intensive asset, not a duration intensive one. So it makes 537 00:28:00,640 --> 00:28:04,440 Speaker 12: sense that with the economy surprising to the upside, surprising everyone, 538 00:28:04,760 --> 00:28:07,800 Speaker 12: including Chairman Powell. He said it last week. Everyone's been 539 00:28:07,840 --> 00:28:10,760 Speaker 12: surprised by the economy's performance in this calendar year. It's 540 00:28:10,800 --> 00:28:14,960 Speaker 12: been great for higher, higher credit risk assets. It's been 541 00:28:15,080 --> 00:28:18,159 Speaker 12: terrible for duration, low credit risk assets that are an 542 00:28:18,200 --> 00:28:21,560 Speaker 12: interest rates sensitive. We think that should start to flip 543 00:28:21,600 --> 00:28:25,360 Speaker 12: the script. We are underweight high yield, we are underweight loans. 544 00:28:26,119 --> 00:28:29,679 Speaker 12: We believe that the slowing economy, small business bankruptcies are 545 00:28:29,720 --> 00:28:32,520 Speaker 12: on the rise, the accumulative impact of the tight ning 546 00:28:32,560 --> 00:28:36,640 Speaker 12: of monetary conditions to include what are likely collapsing commercial 547 00:28:36,640 --> 00:28:39,600 Speaker 12: real estate values in office space, all of these factors 548 00:28:39,760 --> 00:28:41,680 Speaker 12: are going to catch up and they're going to reward 549 00:28:42,400 --> 00:28:45,200 Speaker 12: higher quality bonds over lower quality bonds. So we're underweight 550 00:28:45,280 --> 00:28:47,560 Speaker 12: high yield and underweight leverage loans at this point. That 551 00:28:47,600 --> 00:28:49,800 Speaker 12: has not been the right call up to this point, 552 00:28:50,600 --> 00:28:52,280 Speaker 12: but we're looking forward to. 553 00:28:52,280 --> 00:28:54,800 Speaker 1: That turning around. Hey RJ, for better worse, some my 554 00:28:54,880 --> 00:28:57,959 Speaker 1: co host is a native of the great State of Ohio, 555 00:28:58,080 --> 00:29:00,920 Speaker 1: so of course I have to ask you, Oh no, 556 00:29:01,200 --> 00:29:05,880 Speaker 1: how real. Look at I see here, boy, your Michigan 557 00:29:05,920 --> 00:29:08,400 Speaker 1: Wolverings look like the team to beat this year. Tell 558 00:29:08,480 --> 00:29:09,000 Speaker 1: us about it. 559 00:29:09,320 --> 00:29:11,600 Speaker 12: That was a beatdown of Michigan State. I mean that 560 00:29:11,640 --> 00:29:13,480 Speaker 12: was I almost felt bad for the Green and White. 561 00:29:14,600 --> 00:29:16,160 Speaker 1: So you guys, I mean this is gonna be it. 562 00:29:16,240 --> 00:29:17,960 Speaker 1: I mean, this looks like maybe the best Michigan team 563 00:29:17,960 --> 00:29:18,680 Speaker 1: in a long time. 564 00:29:19,720 --> 00:29:22,480 Speaker 12: Oh yeah, yeah, no, it's very exciting to watch, you know, 565 00:29:22,640 --> 00:29:26,040 Speaker 12: very talented team. I watched football a lot, but I 566 00:29:26,080 --> 00:29:27,920 Speaker 12: don't know if you want me to expound any further 567 00:29:27,960 --> 00:29:28,560 Speaker 12: than that, No, we'll. 568 00:29:28,520 --> 00:29:30,479 Speaker 1: Leave it because so you're gonna come in. I'll tell you. 569 00:29:30,520 --> 00:29:31,080 Speaker 9: I'll tell you what. 570 00:29:31,240 --> 00:29:34,720 Speaker 2: I love it when Michigan has a strong team, and 571 00:29:34,760 --> 00:29:37,320 Speaker 2: I'm sure they love it when Ohio State is a 572 00:29:37,320 --> 00:29:40,440 Speaker 2: big competitor, like that's what makes it fun. When you 573 00:29:40,480 --> 00:29:42,600 Speaker 2: don't know who's going to win the game, When when 574 00:29:42,640 --> 00:29:44,080 Speaker 2: the boys really have to give it. 575 00:29:44,200 --> 00:29:46,160 Speaker 1: They're all right, you know, we're looking for it to 576 00:29:46,360 --> 00:29:47,760 Speaker 1: We're looking forward to that game at the end of 577 00:29:47,800 --> 00:29:51,360 Speaker 1: the year Michigan. Okay, all right, very good. 578 00:29:51,400 --> 00:29:51,560 Speaker 4: R J. 579 00:29:51,680 --> 00:29:53,120 Speaker 1: Gallagho Federated at Armies. 580 00:29:54,320 --> 00:29:57,720 Speaker 6: You're listening to the Team Ken's Are Live program, Bloomberg 581 00:29:57,800 --> 00:30:01,320 Speaker 6: Markets weekdays at ten am Easter, Blueberg dot Com, the 582 00:30:01,400 --> 00:30:04,520 Speaker 6: iHeartRadio app, and the Bloomberg Business app, or listen on 583 00:30:04,600 --> 00:30:06,520 Speaker 6: demand wherever you get your podcast. 584 00:30:08,800 --> 00:30:11,680 Speaker 1: We welcome Elizabeth Hurt. She's a professor of political science 585 00:30:11,680 --> 00:30:15,120 Speaker 1: at Northwestern University. Professor, thanks so much for joining us here. 586 00:30:15,560 --> 00:30:17,840 Speaker 1: I mean a lot of us. I'm going to say, 587 00:30:17,920 --> 00:30:19,800 Speaker 1: not just here in the US, but around the world. 588 00:30:20,080 --> 00:30:22,880 Speaker 1: I don't think we have a full appreciation of the 589 00:30:22,960 --> 00:30:28,360 Speaker 1: stark differences between Israel and the Palestinians that manifest itself. 590 00:30:28,360 --> 00:30:31,560 Speaker 1: With all this attention we've seen over the decades, where 591 00:30:31,560 --> 00:30:34,520 Speaker 1: do you where's the starting point for us to try 592 00:30:34,520 --> 00:30:35,680 Speaker 1: to get an understanding there? 593 00:30:37,160 --> 00:30:40,000 Speaker 11: Thanks for having me, Good morning to all your listeners 594 00:30:40,040 --> 00:30:42,880 Speaker 11: and viewers. Listen. It's a really good question, and I 595 00:30:42,880 --> 00:30:45,000 Speaker 11: think it's not one that's very easy to answer because 596 00:30:45,000 --> 00:30:47,680 Speaker 11: there are many different starting points. One of the most 597 00:30:47,680 --> 00:30:51,440 Speaker 11: common starting points would be to simply begin with Zionism, 598 00:30:51,520 --> 00:30:54,160 Speaker 11: with the founding of the idea that the Jewish people 599 00:30:54,240 --> 00:30:57,120 Speaker 11: in Europe, this is a European movement, should have their 600 00:30:57,120 --> 00:31:00,280 Speaker 11: own homeland and that homeland would ensure they're safe in 601 00:31:00,320 --> 00:31:03,800 Speaker 11: the face of persecution and violence by Europeans in the 602 00:31:04,040 --> 00:31:06,960 Speaker 11: nineteenth century. So this goes back to the nineteenth century. 603 00:31:07,040 --> 00:31:09,120 Speaker 11: We can fast forward to the end of World War II. 604 00:31:09,760 --> 00:31:13,640 Speaker 11: We know about the horrors of the Holocaust. People were 605 00:31:13,640 --> 00:31:16,160 Speaker 11: in Jewish people were in desperate search of a homeland, 606 00:31:16,680 --> 00:31:19,600 Speaker 11: and the British, who were controlling the region that we 607 00:31:19,680 --> 00:31:23,560 Speaker 11: now know of as Israel Palestine, declared through the Balfour 608 00:31:23,680 --> 00:31:27,320 Speaker 11: Declaration that the Jewish homeland would have the support and 609 00:31:27,360 --> 00:31:30,880 Speaker 11: sanction of the British imperial power. And it wasn't long 610 00:31:30,960 --> 00:31:35,440 Speaker 11: before Israel declared independence as a state on the mid 611 00:31:35,480 --> 00:31:38,320 Speaker 11: May fourt to May nineteen forty eight, and since then 612 00:31:38,800 --> 00:31:44,280 Speaker 11: it has been slowly but surely expressing its authority and 613 00:31:44,320 --> 00:31:47,320 Speaker 11: control and sovereignty over what we now know as Israel 614 00:31:47,360 --> 00:31:50,320 Speaker 11: and Palas. And these lands are contested and have been 615 00:31:50,400 --> 00:31:53,040 Speaker 11: contested since the first Jews started arriving. 616 00:31:53,720 --> 00:31:57,360 Speaker 1: So, you know, a lot of people think, and I 617 00:31:57,440 --> 00:31:58,120 Speaker 1: have thought in. 618 00:31:58,080 --> 00:32:01,120 Speaker 2: The past, that Israel, that the Israelis came in there 619 00:32:01,200 --> 00:32:06,120 Speaker 2: and took over Palestine, like there was a country there 620 00:32:06,360 --> 00:32:09,920 Speaker 2: called Palestine and that was okay, moved into by Israel. 621 00:32:09,960 --> 00:32:12,479 Speaker 2: But actually that's not the case. Right there, what was 622 00:32:12,520 --> 00:32:16,080 Speaker 2: there before the Israelis went in, So this was. 623 00:32:16,200 --> 00:32:18,360 Speaker 11: We did not have the sovereign state system, and this 624 00:32:18,440 --> 00:32:20,680 Speaker 11: was kind of the days of empire, and so we 625 00:32:20,840 --> 00:32:23,760 Speaker 11: had Originally it was an Ottoman province. What we now 626 00:32:23,800 --> 00:32:26,920 Speaker 11: know as Palestine was an Ottoman province, which is like 627 00:32:26,960 --> 00:32:30,400 Speaker 11: a state in the Ottoman Empire. That state. When the 628 00:32:30,400 --> 00:32:34,960 Speaker 11: Ottoman Empire fell after World War One, it was basically disassembled, 629 00:32:35,000 --> 00:32:38,120 Speaker 11: it ceased to exist. A rump state came into being. 630 00:32:38,200 --> 00:32:40,440 Speaker 11: That was Turkey. That is what the kind of the 631 00:32:40,520 --> 00:32:45,440 Speaker 11: inheritor of the Ottoman Empire, and the British colonial authorities 632 00:32:45,480 --> 00:32:49,480 Speaker 11: took over what was then called Mandatory Palestine, which was 633 00:32:49,520 --> 00:32:52,840 Speaker 11: an area that was under the authority of the British 634 00:32:52,920 --> 00:32:57,400 Speaker 11: colonial powers, and Mandatory Palestine was then ruled by the 635 00:32:57,400 --> 00:33:00,640 Speaker 11: British until after the Second World War went they gave 636 00:33:00,800 --> 00:33:07,600 Speaker 11: up authority over the territory and Israel declared independence with 637 00:33:07,800 --> 00:33:12,360 Speaker 11: the express support of the British authorities in the Balfour Declaration. 638 00:33:13,480 --> 00:33:16,160 Speaker 11: That's the quick history. So no country named Palestine, but 639 00:33:17,320 --> 00:33:18,960 Speaker 11: there was Palestine. 640 00:33:18,360 --> 00:33:21,640 Speaker 2: Well, and there were Palestinian people. Are they I mean, 641 00:33:22,720 --> 00:33:23,760 Speaker 2: are they Jordanian? 642 00:33:25,240 --> 00:33:29,480 Speaker 11: They're actually Palestinian people. Many of the Palestinian people, after 643 00:33:29,600 --> 00:33:32,560 Speaker 11: Israel was founded the State of Israel in nineteen forty eight, 644 00:33:32,840 --> 00:33:35,560 Speaker 11: were forced from their homes and they had to leave 645 00:33:36,160 --> 00:33:39,720 Speaker 11: their historic villages and towns and communities, and many of 646 00:33:39,720 --> 00:33:42,360 Speaker 11: them did go to Jordan, and many went to other 647 00:33:42,440 --> 00:33:45,320 Speaker 11: surrounding countries and became refugees, and many of them are 648 00:33:45,360 --> 00:33:48,600 Speaker 11: still living in refugee camps in the surrounding countries today. 649 00:33:48,960 --> 00:33:53,880 Speaker 11: They are Palestinian Jordanians, but they are not just Jordanians. 650 00:33:54,240 --> 00:33:59,000 Speaker 11: So these countries are inventions of western colonial powers and 651 00:33:59,040 --> 00:34:01,160 Speaker 11: the lines that were drawn to divide them one from 652 00:34:01,200 --> 00:34:04,800 Speaker 11: another are relatively recent, but the peoples have been there 653 00:34:04,840 --> 00:34:06,000 Speaker 11: for a very long time. 654 00:34:06,440 --> 00:34:09,359 Speaker 1: Professor, I don't even know if there's an answer here. 655 00:34:09,360 --> 00:34:12,560 Speaker 1: But if I were to if is there an independent 656 00:34:13,560 --> 00:34:19,080 Speaker 1: consensus about who should get the land? I mean independently, 657 00:34:19,640 --> 00:34:21,799 Speaker 1: if you just look at them, I don't know. Is 658 00:34:21,840 --> 00:34:22,759 Speaker 1: there any consensus? 659 00:34:23,960 --> 00:34:26,960 Speaker 11: No, right, And that's why I know there is no consensus, 660 00:34:27,000 --> 00:34:29,160 Speaker 11: and that's why I we're seeing so much violence today. 661 00:34:29,520 --> 00:34:31,680 Speaker 11: The only way we're going to reach an end to 662 00:34:31,719 --> 00:34:34,440 Speaker 11: this horrific violence, which is taking innocent lives. I think 663 00:34:34,440 --> 00:34:37,000 Speaker 11: we can all agree and we can all condemn and 664 00:34:37,040 --> 00:34:39,920 Speaker 11: settle around the consensus that innocent lives should not be taken, 665 00:34:40,280 --> 00:34:43,800 Speaker 11: Civilians should not be killed, children should not be murdered. 666 00:34:44,480 --> 00:34:47,319 Speaker 11: That's the consensus. How do we get there? Who we 667 00:34:47,440 --> 00:34:50,359 Speaker 11: have to share the land? I think that now that's 668 00:34:50,360 --> 00:34:52,640 Speaker 11: where there is no consensus. Who does the land belong to? 669 00:34:52,680 --> 00:34:54,600 Speaker 11: Who has the right to govern it, Who has the 670 00:34:54,840 --> 00:34:58,080 Speaker 11: legitimate authority over its people to define it, write its 671 00:34:58,160 --> 00:35:02,200 Speaker 11: laws and right its constitutions, aim the state. That's what's contested, 672 00:35:02,520 --> 00:35:04,480 Speaker 11: and no there is no consensus, but there are two 673 00:35:04,560 --> 00:35:07,560 Speaker 11: peoples and there is one land, so there's this violence 674 00:35:07,640 --> 00:35:10,120 Speaker 11: is going to continue until there's some kind of resolution 675 00:35:10,200 --> 00:35:10,760 Speaker 11: that's reached. 676 00:35:11,360 --> 00:35:15,120 Speaker 2: How much of this is based in religion, I mean, 677 00:35:15,200 --> 00:35:19,840 Speaker 2: it's it seems like if you pulled that those beliefs 678 00:35:19,880 --> 00:35:23,880 Speaker 2: out that some you know, magical being gave you or 679 00:35:24,680 --> 00:35:27,440 Speaker 2: this person or that person a piece of land, we 680 00:35:27,480 --> 00:35:29,920 Speaker 2: wouldn't have these these wars. 681 00:35:31,640 --> 00:35:34,000 Speaker 11: That's a good question. I wish it were the case 682 00:35:34,000 --> 00:35:38,040 Speaker 11: that were just a matter of belief, but the attachments 683 00:35:38,480 --> 00:35:44,200 Speaker 11: and the stakes and the ramifications of this conflict run 684 00:35:44,560 --> 00:35:48,520 Speaker 11: much farther and wider than just belief. They are about 685 00:35:49,000 --> 00:35:54,280 Speaker 11: control of the economies, control of water, control of access 686 00:35:54,320 --> 00:35:58,759 Speaker 11: to ports, control of historical sites that have religious but 687 00:35:58,880 --> 00:36:03,520 Speaker 11: also political and social connotations that run back centuries. So 688 00:36:03,760 --> 00:36:06,799 Speaker 11: we can't really disentangle the religious aspect. For sure, it 689 00:36:06,880 --> 00:36:09,840 Speaker 11: heightens the tension, but it's really not the only factor 690 00:36:09,880 --> 00:36:10,280 Speaker 11: at play. 691 00:36:10,840 --> 00:36:15,920 Speaker 1: Do we know to what extent the Palestinian people wherever 692 00:36:15,960 --> 00:36:18,400 Speaker 1: they are the West Bank Aza, to what extent do 693 00:36:18,560 --> 00:36:22,640 Speaker 1: they support Hamas Because it seems like you could get 694 00:36:22,640 --> 00:36:25,680 Speaker 1: these two peoples together and say you get your land, 695 00:36:25,920 --> 00:36:29,120 Speaker 1: We're gonna split this land up, and it's nobody's gonna 696 00:36:29,120 --> 00:36:30,680 Speaker 1: be really happy, but this is the way it's going 697 00:36:30,719 --> 00:36:32,560 Speaker 1: to be, and it's the best for everybody. But then 698 00:36:32,600 --> 00:36:35,080 Speaker 1: Hamas comes in and really makes it difficult. So what's 699 00:36:35,080 --> 00:36:38,279 Speaker 1: the level of support for Hamas and Hezbola amongst some 700 00:36:38,320 --> 00:36:39,439 Speaker 1: of the Palestinians. 701 00:36:40,560 --> 00:36:43,279 Speaker 11: The level of support for Hamas and Hezbola has been 702 00:36:43,360 --> 00:36:48,399 Speaker 11: increasing as a result of the fact that Israel has 703 00:36:48,560 --> 00:36:52,319 Speaker 11: continued to build and support settlements in the West Bank. So, 704 00:36:52,360 --> 00:36:54,960 Speaker 11: in other words, your idea of giving each side some 705 00:36:55,120 --> 00:36:58,440 Speaker 11: land and calling it a day is a great idea, 706 00:36:58,480 --> 00:37:00,399 Speaker 11: and that was tried in the nineteen ninety news it's 707 00:37:00,400 --> 00:37:05,239 Speaker 11: called the Oslo Accords. Neither side was particularly happy and 708 00:37:05,600 --> 00:37:08,480 Speaker 11: neither side cooperated, and so what we have there were 709 00:37:08,560 --> 00:37:11,680 Speaker 11: unaddressed issues that we have today that is an increasingly 710 00:37:11,800 --> 00:37:15,200 Speaker 11: expansionist Israel. In other words, it's it's getting bigger and bigger, 711 00:37:15,400 --> 00:37:19,880 Speaker 11: taking more and more land, and the Palestinians are increasingly desperate, 712 00:37:20,000 --> 00:37:24,720 Speaker 11: frustrated and lashing out. So we're seeing a support rising 713 00:37:24,760 --> 00:37:27,839 Speaker 11: support for Hamas. However, support for Hamas is quite low 714 00:37:28,080 --> 00:37:32,359 Speaker 11: historically among the Palestinians. Palestinians don't want this violence either. 715 00:37:32,400 --> 00:37:34,320 Speaker 11: I mean, who would, No one does exactly. 716 00:37:34,640 --> 00:37:39,080 Speaker 1: This is just it's just incredibly you know, just just. 717 00:37:39,239 --> 00:37:41,920 Speaker 2: It's complex, which is why it's great to have someone 718 00:37:41,960 --> 00:37:46,799 Speaker 2: like professor Hurd, who studied government at Wesley and international 719 00:37:46,840 --> 00:37:49,680 Speaker 2: finance at Yale, political science at Johns Hopkins to put 720 00:37:49,719 --> 00:37:52,080 Speaker 2: these disciplines together and help us figure things out. 721 00:37:52,160 --> 00:37:52,440 Speaker 6: Very good. 722 00:37:52,440 --> 00:37:54,760 Speaker 1: Elizabeth Herd, Chair of Religious Studies and professor of political 723 00:37:54,760 --> 00:37:55,719 Speaker 1: science at Northwestern. 724 00:37:55,880 --> 00:37:59,000 Speaker 6: You're listening to the tape cans Are Line program Bloomberg 725 00:37:59,040 --> 00:38:02,640 Speaker 6: Markets Weekday said ten am Eastern on Bloomberg Radio, the 726 00:38:02,719 --> 00:38:04,799 Speaker 6: tune in app, Bloomberg dot Com. 727 00:38:04,480 --> 00:38:05,879 Speaker 4: And the Bloomberg Business app. 728 00:38:05,960 --> 00:38:08,799 Speaker 6: You can also listen live on Amazon Alexa from our 729 00:38:08,800 --> 00:38:13,120 Speaker 6: flagship New York station, Just say Alexa, play Bloomberg eleven. 730 00:38:12,920 --> 00:38:15,280 Speaker 1: Thirty Fraser Alkinson. 731 00:38:15,320 --> 00:38:17,400 Speaker 2: In fact, they they're the first ones really to go 732 00:38:17,440 --> 00:38:21,640 Speaker 2: electric because the municipalities need to show their green creds. 733 00:38:22,120 --> 00:38:26,480 Speaker 2: And I mean, frankly, there's so many buses and you know, 734 00:38:28,120 --> 00:38:32,000 Speaker 2: sort of mass transit vehicles on the road that it's 735 00:38:32,040 --> 00:38:34,799 Speaker 2: better for all of us if they're not spewing out 736 00:38:35,719 --> 00:38:37,719 Speaker 2: nasty things from the exhaust pipe. 737 00:38:38,000 --> 00:38:41,480 Speaker 1: Absolutely Fraser Atkinson joins, I ceased to see Green Power 738 00:38:41,960 --> 00:38:45,000 Speaker 1: Motor Company. It's a public traded company. Gp is as symbol. 739 00:38:46,120 --> 00:38:48,200 Speaker 1: Talk to us first of all, Fraser, thanks so much 740 00:38:48,200 --> 00:38:50,799 Speaker 1: for joining us, really appreciate it. Can you tell us 741 00:38:50,840 --> 00:38:52,840 Speaker 1: what you guys do a Green Power what's your play 742 00:38:52,960 --> 00:38:53,920 Speaker 1: in the EV space? 743 00:38:55,320 --> 00:38:59,200 Speaker 13: Well, thanks for having us on your show, and we're 744 00:38:59,680 --> 00:39:02,760 Speaker 13: we're we're focused on the medium and heavy duty space, 745 00:39:03,480 --> 00:39:07,680 Speaker 13: which is quite different than the traditional light duty automotive. 746 00:39:08,560 --> 00:39:09,759 Speaker 5: Those vehicles tend to. 747 00:39:09,680 --> 00:39:13,080 Speaker 13: Be used less than an hour a day, and our 748 00:39:13,160 --> 00:39:17,359 Speaker 13: vehicles are on average use twelve fourteen, sixteen hours a day, 749 00:39:18,080 --> 00:39:20,840 Speaker 13: and we even have a few deployments where they're used 750 00:39:21,080 --> 00:39:24,440 Speaker 13: twenty four hours a day and they do top charging 751 00:39:24,520 --> 00:39:27,319 Speaker 13: in the early hours of the morning. So that's the 752 00:39:27,320 --> 00:39:32,000 Speaker 13: space that we're focused on, and it's been a little 753 00:39:32,040 --> 00:39:32,799 Speaker 13: slower to. 754 00:39:34,480 --> 00:39:36,640 Speaker 5: Catch on, but we're finding. 755 00:39:36,280 --> 00:39:41,960 Speaker 13: That it's got some serious legs for both the current 756 00:39:42,080 --> 00:39:42,840 Speaker 13: and the future. 757 00:39:43,000 --> 00:39:47,960 Speaker 2: Frazer, how do you juice those vehicles up for such 758 00:39:49,040 --> 00:39:53,680 Speaker 2: industrial use? I mean I would think, you know, most 759 00:39:53,719 --> 00:39:57,719 Speaker 2: electric vehicles have range of a few hours and then 760 00:39:57,760 --> 00:40:01,319 Speaker 2: you've got to plug them in for many more. How 761 00:40:01,320 --> 00:40:04,440 Speaker 2: do you make sure that these electric buses have enough 762 00:40:05,800 --> 00:40:08,760 Speaker 2: energy to do their duty well. 763 00:40:08,800 --> 00:40:13,319 Speaker 13: Most of the applications we're involved with tend to be 764 00:40:14,160 --> 00:40:17,080 Speaker 13: lower speed and lots of stops and starts, which is 765 00:40:17,280 --> 00:40:22,040 Speaker 13: absolutely ideal for an EV In terms of charging are 766 00:40:22,760 --> 00:40:27,800 Speaker 13: the Class four vehicles, which is our largest volume seller 767 00:40:28,520 --> 00:40:31,680 Speaker 13: both in terms of passenger cargo and as well the 768 00:40:31,760 --> 00:40:36,400 Speaker 13: Type A school bus is that that particular set of 769 00:40:36,480 --> 00:40:40,520 Speaker 13: vehicles we can either charge with a Level two or 770 00:40:40,560 --> 00:40:44,640 Speaker 13: a DC fast charge, So we're very flexible and can 771 00:40:44,680 --> 00:40:49,560 Speaker 13: be compatible with what the requirements might be what a 772 00:40:49,600 --> 00:40:52,520 Speaker 13: customer might need from the use of that vehicle. 773 00:40:53,280 --> 00:40:56,520 Speaker 1: So where do you make these electric school buses. 774 00:40:57,600 --> 00:41:02,000 Speaker 13: Well, we've got we use contract manufacturers, similar to what 775 00:41:02,080 --> 00:41:06,040 Speaker 13: Apple does with their various products. All of our products 776 00:41:06,080 --> 00:41:13,439 Speaker 13: are designed and final assembly in the United States. We 777 00:41:13,719 --> 00:41:17,880 Speaker 13: recently opened a facility in West Virginia that was courtesy 778 00:41:17,920 --> 00:41:20,919 Speaker 13: of the state of West Virginia bought the facility for 779 00:41:20,960 --> 00:41:26,160 Speaker 13: our use, and that is going to be our focus 780 00:41:26,239 --> 00:41:29,120 Speaker 13: for our Type A, the smaller school bus, and the 781 00:41:29,160 --> 00:41:34,440 Speaker 13: Type D, the larger school bus. Where we see demand 782 00:41:34,520 --> 00:41:37,040 Speaker 13: across the board for both of those products. 783 00:41:37,719 --> 00:41:42,680 Speaker 2: Is demand now starting to pick up exponentially. I mean, 784 00:41:42,680 --> 00:41:45,839 Speaker 2: you've been at green Power since twenty ten, so you've 785 00:41:45,880 --> 00:41:50,920 Speaker 2: seen a solid thirteen years of this business. Does it 786 00:41:50,960 --> 00:41:52,919 Speaker 2: look a lot different in the last couple of years 787 00:41:52,920 --> 00:41:55,400 Speaker 2: than it did to you for the first decade. 788 00:41:55,640 --> 00:41:59,400 Speaker 13: Well, the early years, there literally were no medium or 789 00:41:59,400 --> 00:42:02,799 Speaker 13: heavy duty the electric buses that have been deployed. The 790 00:42:02,840 --> 00:42:08,279 Speaker 13: first one was twenty eleven twenty twelve, and that was 791 00:42:08,800 --> 00:42:14,000 Speaker 13: with a company that had already generated deliveries and sales 792 00:42:14,120 --> 00:42:18,480 Speaker 13: in other jurisdictions. So the industry is really only ten 793 00:42:18,560 --> 00:42:23,560 Speaker 13: years old or ten plus. And the early years, the vehicles, 794 00:42:25,080 --> 00:42:28,799 Speaker 13: the batteries were too heavy, the range wasn't able to 795 00:42:28,880 --> 00:42:33,400 Speaker 13: satisfy even the most basic duty cycle. All that's changed 796 00:42:34,280 --> 00:42:38,360 Speaker 13: to where now we can handle probably ninety five ninety 797 00:42:38,360 --> 00:42:43,000 Speaker 13: six percent of almost all duty cycles for medium or 798 00:42:43,040 --> 00:42:48,200 Speaker 13: heavy duty truck or bus, and that's really helped fuel 799 00:42:48,360 --> 00:42:52,720 Speaker 13: the interest in electrifying fleets, and then combined with money 800 00:42:52,760 --> 00:42:56,600 Speaker 13: and mandates at both the federal and the state level 801 00:42:57,160 --> 00:43:02,160 Speaker 13: where certain operators are required to electrify fleets within certain 802 00:43:02,200 --> 00:43:08,560 Speaker 13: time periods, has really created incredible tailwinds for the whole 803 00:43:08,600 --> 00:43:10,200 Speaker 13: industry as well as our company. 804 00:43:10,680 --> 00:43:13,399 Speaker 1: Fraser talk to us about kind of the sales process here. 805 00:43:13,400 --> 00:43:16,719 Speaker 1: When you go to a school district, just describe for 806 00:43:16,760 --> 00:43:18,320 Speaker 1: us how the sales process goes. 807 00:43:20,040 --> 00:43:23,960 Speaker 13: Typically, they'd like the school districts. 808 00:43:23,520 --> 00:43:27,080 Speaker 5: Are very hands on. They like to see, see and 809 00:43:27,160 --> 00:43:28,040 Speaker 5: touch the vehicle. 810 00:43:28,120 --> 00:43:31,759 Speaker 13: They like to have their various groups know whether it's 811 00:43:31,840 --> 00:43:38,680 Speaker 13: the maintenance group, whether it's the drivers group, the trustees, 812 00:43:38,719 --> 00:43:43,000 Speaker 13: that you really have to answer any questions that their 813 00:43:43,040 --> 00:43:43,960 Speaker 13: constituents have. 814 00:43:44,760 --> 00:43:46,560 Speaker 5: So we tend to do. 815 00:43:46,520 --> 00:43:50,360 Speaker 13: A lot of ride in drives or demonstrations of the vehicles, 816 00:43:50,920 --> 00:43:54,160 Speaker 13: and often those aren't just one or twice, but there 817 00:43:54,160 --> 00:44:00,799 Speaker 13: are multiple occasions. And once a particular organization isisfy that yes, 818 00:44:00,880 --> 00:44:04,319 Speaker 13: this is the vehicle that they can see they want 819 00:44:04,360 --> 00:44:07,840 Speaker 13: to move forward with, then depending on the state, some 820 00:44:08,000 --> 00:44:12,360 Speaker 13: states require dealers be involved in the process, others allow 821 00:44:12,520 --> 00:44:14,920 Speaker 13: us to go direct. We have a real mix in 822 00:44:15,000 --> 00:44:18,560 Speaker 13: terms of our go to market strategy. But then we're 823 00:44:18,719 --> 00:44:24,640 Speaker 13: engaged in terms of, you know, essentially the big picture question, 824 00:44:24,680 --> 00:44:26,400 Speaker 13: which is how are they going to pay for it? 825 00:44:26,719 --> 00:44:29,719 Speaker 13: And school districts are not organizations that have a lot 826 00:44:29,760 --> 00:44:32,640 Speaker 13: of money. So it's the recent funding that has come 827 00:44:32,680 --> 00:44:36,080 Speaker 13: in both federally and with certain states that has really 828 00:44:36,120 --> 00:44:41,040 Speaker 13: fueled the excitement and the electrification around school buses. 829 00:44:41,600 --> 00:44:43,279 Speaker 1: So I want to get a sense. I'm just looking 830 00:44:43,280 --> 00:44:45,920 Speaker 1: at your financial statements to your fraser, how do you 831 00:44:45,960 --> 00:44:49,240 Speaker 1: fund your growth? I see you know, your public traded company, 832 00:44:49,280 --> 00:44:51,560 Speaker 1: but a market cap of only seventy one million dollars, 833 00:44:52,480 --> 00:44:54,360 Speaker 1: you know, several million dollars, a debt on the balance 834 00:44:54,840 --> 00:44:58,200 Speaker 1: and iba the negative. How do you fund your growth? 835 00:44:59,600 --> 00:45:04,759 Speaker 13: Well, our business model, we've had success in generating a 836 00:45:04,800 --> 00:45:08,040 Speaker 13: gross profit on every cell or not every cell, but 837 00:45:08,120 --> 00:45:12,120 Speaker 13: the combined cells of our vehicle every quarter, which is 838 00:45:12,160 --> 00:45:15,480 Speaker 13: actually pretty unique, and that most of our competition is 839 00:45:16,440 --> 00:45:19,279 Speaker 13: still operating with a gross profit loss. In other words, 840 00:45:19,320 --> 00:45:22,960 Speaker 13: every vehicle they sell, they're actually selling at a loss 841 00:45:23,040 --> 00:45:27,719 Speaker 13: before any of their expenses. And our growth has been 842 00:45:27,800 --> 00:45:30,600 Speaker 13: such that we are getting closer and closer to that 843 00:45:31,480 --> 00:45:34,960 Speaker 13: important break even from a cash flow point of view. 844 00:45:35,680 --> 00:45:40,640 Speaker 13: We also had built up our inventory that post. When 845 00:45:40,680 --> 00:45:44,160 Speaker 13: we went and did our nastac Ipo in the fall 846 00:45:44,280 --> 00:45:47,960 Speaker 13: of twenty twenty, we were able to move from building 847 00:45:48,120 --> 00:45:51,279 Speaker 13: vehicles pursuingto customer orders to where we're actually able to 848 00:45:51,320 --> 00:45:54,640 Speaker 13: build into inventory, and that was critical in getting some 849 00:45:54,760 --> 00:45:58,760 Speaker 13: of the larger deals that we are now delivering into 850 00:45:59,320 --> 00:46:03,040 Speaker 13: so in our most recent quarter, our inventory actually was 851 00:46:03,200 --> 00:46:07,799 Speaker 13: lower in terms of the overall amount that we had 852 00:46:07,800 --> 00:46:12,880 Speaker 13: in inventory because we've been able to shift to deliveries 853 00:46:13,040 --> 00:46:14,520 Speaker 13: and fulfilling orders. 854 00:46:15,600 --> 00:46:17,399 Speaker 4: That as a. 855 00:46:17,360 --> 00:46:20,440 Speaker 13: Result of being able to show that we had the 856 00:46:20,480 --> 00:46:26,719 Speaker 13: ability to satisfy the various order requirements, and we've been 857 00:46:27,120 --> 00:46:30,120 Speaker 13: a low cost operator, we've been able to manage our 858 00:46:30,200 --> 00:46:33,040 Speaker 13: numbers so that our expenses compared to our peers are 859 00:46:33,080 --> 00:46:38,120 Speaker 13: substantially less, so we don't have a large financial requirement. 860 00:46:38,680 --> 00:46:42,000 Speaker 13: And lastly, we did have an ATM, or do have 861 00:46:42,040 --> 00:46:43,080 Speaker 13: an ATM in place. 862 00:46:43,560 --> 00:46:45,719 Speaker 5: We haven't drawn on it because we haven't needed it. 863 00:46:47,120 --> 00:46:50,960 Speaker 13: But in the early part of twenty twenty three, as 864 00:46:51,000 --> 00:46:56,480 Speaker 13: we're going through that inventory growth, we were able to 865 00:46:56,880 --> 00:46:59,720 Speaker 13: take down about five million dollars off our ATM. 866 00:47:00,080 --> 00:47:03,480 Speaker 1: Okay, interesting story, a really interesting story. Looks like potentially 867 00:47:03,480 --> 00:47:07,000 Speaker 1: some growth there going forward as maybe see some inflation 868 00:47:07,080 --> 00:47:08,600 Speaker 1: Reduction Act money come into the play. 869 00:47:08,800 --> 00:47:11,880 Speaker 6: You're listening to the tape Cat's our live program, Bloomberg 870 00:47:11,960 --> 00:47:15,560 Speaker 6: Markets weekdays at ten am Eastern on Bloomberg Radio, the 871 00:47:15,600 --> 00:47:17,560 Speaker 6: tune in app, Bloomberg dot Com, and. 872 00:47:17,520 --> 00:47:18,839 Speaker 4: The Bloomberg Business App. 873 00:47:18,880 --> 00:47:21,680 Speaker 6: You can also listen live on Amazon Alexa from our 874 00:47:21,719 --> 00:47:26,080 Speaker 6: flagship New York station, Just say Alexa play Bloomberg eleven thirty. 875 00:47:26,719 --> 00:47:28,960 Speaker 1: Let's continue our c Suite conversation. This time we're going 876 00:47:29,000 --> 00:47:34,520 Speaker 1: to focus on the healthcare space, big pharma, biotechnology, therapeutics, 877 00:47:34,560 --> 00:47:37,400 Speaker 1: all that good stuff. For that, We're joined by Joel Lewis. 878 00:47:37,400 --> 00:47:40,520 Speaker 1: He's the CEO and president of Gallaxton Therapeutics. It's a 879 00:47:40,520 --> 00:47:45,160 Speaker 1: publica trade stock on nastac. Ga l T is the 880 00:47:45,239 --> 00:47:47,480 Speaker 1: symbol there. Joel, thanks so much for joining us here. 881 00:47:47,520 --> 00:47:50,440 Speaker 1: Talks about what you guys are working on over at 882 00:47:50,480 --> 00:47:52,080 Speaker 1: Galatin Therapeutics. 883 00:47:53,160 --> 00:47:55,399 Speaker 14: Hi, Matt, Hi Paul, thank you for having me today. 884 00:47:55,840 --> 00:47:58,279 Speaker 14: We pronounced the galactin therapeutic Actually. 885 00:47:58,239 --> 00:48:00,680 Speaker 1: We thank you A yeah. Yeah. 886 00:48:01,239 --> 00:48:05,359 Speaker 14: We are a late stage biotech company. We're conducting a 887 00:48:05,440 --> 00:48:08,279 Speaker 14: large global pivotal trial. It's a Phase two B three 888 00:48:08,400 --> 00:48:16,399 Speaker 14: trial in nash zorosis. Yeah yeah, So, I think when 889 00:48:16,400 --> 00:48:20,920 Speaker 14: people think about cirrhosis, they normally immediately go to sorosis 890 00:48:20,960 --> 00:48:26,440 Speaker 14: caused by alcohol. Actually, the fastest growing segment of this 891 00:48:26,520 --> 00:48:32,120 Speaker 14: patient population is getting zerosis from fatty liver disease. So 892 00:48:33,760 --> 00:48:37,000 Speaker 14: NASH is sort of the technical term for fatty liver disease, 893 00:48:37,080 --> 00:48:40,200 Speaker 14: non alcoholics, theado appatitis, I won't say that again, We'll 894 00:48:40,200 --> 00:48:44,720 Speaker 14: just call fatty liver disease. And again there's there's a large, 895 00:48:45,719 --> 00:48:50,359 Speaker 14: a huge, growing patient population. We are specifically focused on 896 00:48:50,520 --> 00:48:53,399 Speaker 14: patients who have progressed all the way to soorhosis. 897 00:48:54,320 --> 00:48:57,680 Speaker 1: So talk to us about I guess that the treatment. 898 00:48:57,680 --> 00:49:00,000 Speaker 1: How does your therapeutic work here? 899 00:49:01,040 --> 00:49:07,920 Speaker 14: Okay, So, we have a carbohydrate molecule that actually targets galectin, 900 00:49:08,560 --> 00:49:15,000 Speaker 14: specifically galectin three, which has been associated with many inflammatory diseases, 901 00:49:15,480 --> 00:49:18,440 Speaker 14: and when you think about soorrhrosis, it's the ultimate inflammation 902 00:49:18,920 --> 00:49:23,160 Speaker 14: that eventually leads to scar tissue. Our mechanism of action 903 00:49:23,320 --> 00:49:30,520 Speaker 14: we actually target activated macrophases, which is where galactin is produced, 904 00:49:30,960 --> 00:49:35,759 Speaker 14: and we reduce the over expression of galactin three when 905 00:49:35,840 --> 00:49:42,120 Speaker 14: people have sorosis and reduce. When you reduce that protein, 906 00:49:43,400 --> 00:49:46,520 Speaker 14: you give the Your livers are very regendative organ actually, 907 00:49:46,520 --> 00:49:47,879 Speaker 14: and you give it a chance to heal. 908 00:49:48,880 --> 00:49:50,960 Speaker 1: How how big is this market do you think? I know, 909 00:49:51,000 --> 00:49:53,520 Speaker 1: you guys size these markets out pretty closely. 910 00:49:54,440 --> 00:49:56,920 Speaker 14: So so and and I don't need everybody to take 911 00:49:57,000 --> 00:49:58,840 Speaker 14: just my word for it. So I was listening to 912 00:49:59,520 --> 00:50:02,839 Speaker 14: the fact You Liver Foundation, which is a patient advocacy group, 913 00:50:02,880 --> 00:50:06,640 Speaker 14: that the estimate is that one third of the world 914 00:50:06,680 --> 00:50:11,480 Speaker 14: population has fatty liver. And now when you say that, 915 00:50:11,560 --> 00:50:14,200 Speaker 14: it's not fatty liver disease, it's just fat in their liver. 916 00:50:14,360 --> 00:50:17,080 Speaker 1: So statosis is what it's. 917 00:50:16,880 --> 00:50:20,399 Speaker 14: Called the medical term, and out of that patient, out 918 00:50:20,400 --> 00:50:23,600 Speaker 14: of that potential patient group. Right now, in the US, 919 00:50:23,960 --> 00:50:28,000 Speaker 14: the estimate from insurance reibursement is sixteen million, more than 920 00:50:28,040 --> 00:50:32,120 Speaker 14: sixteen million patients. We've seen estimates higher because obviously not 921 00:50:32,160 --> 00:50:35,759 Speaker 14: everybody's insured. So we've seen estimates of up to twenty 922 00:50:35,800 --> 00:50:39,040 Speaker 14: eight million people who actually have fatty liver disease that's 923 00:50:39,080 --> 00:50:43,399 Speaker 14: progressed to NASH and of those patients, one to two 924 00:50:43,440 --> 00:50:46,360 Speaker 14: million of them will develop zorosis. 925 00:50:46,920 --> 00:50:49,319 Speaker 1: So what do I guess what we've heard a lot 926 00:50:49,400 --> 00:50:51,400 Speaker 1: about in the marketplace in the healthcare space over the 927 00:50:51,480 --> 00:50:54,600 Speaker 1: last several months are these GLP one drugs of zempic, 928 00:50:54,760 --> 00:50:59,760 Speaker 1: for example, How does that influence your part of the market. 929 00:51:00,480 --> 00:51:02,640 Speaker 14: Yeah, and I heard your podcast when you guys talked 930 00:51:02,640 --> 00:51:07,279 Speaker 14: about that back in August with Steven, So Yeah, obviously 931 00:51:07,360 --> 00:51:09,840 Speaker 14: there's a big drive in most of the companies in 932 00:51:10,680 --> 00:51:15,120 Speaker 14: the NASH space are targeting early stage fatty liver disease, 933 00:51:15,200 --> 00:51:19,400 Speaker 14: and clearly, you know, patients that lose weight have a 934 00:51:19,400 --> 00:51:23,400 Speaker 14: good chance to not progress to sorosis. The issue is, 935 00:51:23,880 --> 00:51:26,480 Speaker 14: you know, I don't see how that all of those 936 00:51:26,600 --> 00:51:29,240 Speaker 14: drugs are going to be so pervasive in the market. 937 00:51:29,239 --> 00:51:32,200 Speaker 14: They're always going to be a set of patients that 938 00:51:32,640 --> 00:51:35,479 Speaker 14: developed sorosis from fatty liver disease. And by the way, 939 00:51:36,120 --> 00:51:40,120 Speaker 14: we happen to be doing our study in sorosis caused 940 00:51:40,120 --> 00:51:42,520 Speaker 14: by fatty liver disease, but we do believe that this 941 00:51:42,640 --> 00:51:45,560 Speaker 14: mechanism of action will work with all soerotic patients. And 942 00:51:45,600 --> 00:51:50,000 Speaker 14: sorosis is caused by many things, including alcohol, including hepatitis. 943 00:51:50,040 --> 00:51:52,239 Speaker 14: That's a much bigger problem in Asia than here. But 944 00:51:52,880 --> 00:51:55,880 Speaker 14: we believe that this will always be a big patient population. 945 00:51:55,960 --> 00:51:59,160 Speaker 14: And again, just so everybody knows, the only treatment for 946 00:51:59,360 --> 00:52:03,759 Speaker 14: sorosis is liver transplant. There are no treatments for cirrhosis. 947 00:52:04,160 --> 00:52:08,120 Speaker 14: And just to give everybody an idea, we do about 948 00:52:08,280 --> 00:52:12,200 Speaker 14: nine thousand liver transplants a year in the US. I 949 00:52:12,239 --> 00:52:14,000 Speaker 14: think people think that number is much bigger. 950 00:52:14,680 --> 00:52:19,320 Speaker 1: Yep, Sore, where are you in the development of your therapeutics. 951 00:52:20,160 --> 00:52:24,920 Speaker 14: So we are conducting our Phase two B three adaptive 952 00:52:25,000 --> 00:52:29,759 Speaker 14: pivotal trial. We expect data in Q four of next year. 953 00:52:31,040 --> 00:52:34,680 Speaker 14: It's an interim analysis, but if we repeat the results 954 00:52:34,680 --> 00:52:39,040 Speaker 14: that we achieved in our phase two program, we will 955 00:52:39,600 --> 00:52:43,879 Speaker 14: be seeking an accelerated approval at that point in time. 956 00:52:44,480 --> 00:52:47,960 Speaker 1: So what's an endgame for your company and companies like 957 00:52:48,000 --> 00:52:50,200 Speaker 1: yours at You know, I'm not super familiar with the 958 00:52:50,200 --> 00:52:52,120 Speaker 1: healthcare space, but it seems like every Monday we have 959 00:52:52,160 --> 00:52:54,479 Speaker 1: a bunch of M and A trades where big farmer 960 00:52:54,520 --> 00:52:57,200 Speaker 1: company buys out a smaller farmer company to get access 961 00:52:57,200 --> 00:52:59,960 Speaker 1: to their therapeutics or their drugs. Is that a typical 962 00:53:00,200 --> 00:53:02,080 Speaker 1: Is that an exit for a company like yours? 963 00:53:02,840 --> 00:53:09,319 Speaker 14: I think most biotech companies have that as their exit strategy. 964 00:53:10,920 --> 00:53:14,319 Speaker 14: There's there's clearly a segment of the biotech industry that 965 00:53:14,440 --> 00:53:18,239 Speaker 14: wants to develop the drug themselves that that is not 966 00:53:18,480 --> 00:53:20,960 Speaker 14: our exit strategy. That you know, to do that, you 967 00:53:20,960 --> 00:53:25,000 Speaker 14: have to have large marketing departments and big big departments 968 00:53:25,000 --> 00:53:26,520 Speaker 14: that are looking at how you're going to price the 969 00:53:26,600 --> 00:53:29,120 Speaker 14: drug and all those things. So so yeah, that would 970 00:53:29,120 --> 00:53:33,600 Speaker 14: be you know, either either licensed the the ip or 971 00:53:34,000 --> 00:53:36,960 Speaker 14: partner in some other way with pharma or a sale. 972 00:53:37,680 --> 00:53:39,560 Speaker 1: And this is not just for older people. I mean, 973 00:53:39,600 --> 00:53:41,879 Speaker 1: I hear when we talk about fatty liver disease, it's 974 00:53:41,880 --> 00:53:43,760 Speaker 1: also for children as well, right. 975 00:53:44,400 --> 00:53:49,400 Speaker 14: So, so so there there is fatty liver disease in children. 976 00:53:49,440 --> 00:53:52,879 Speaker 14: They don't develop zorosis, right, Okay, so so so yes, 977 00:53:52,960 --> 00:53:56,000 Speaker 14: I would I would say that that there is a 978 00:53:56,040 --> 00:54:02,480 Speaker 14: growing problem with fatty liver disease in children. And certainly 979 00:54:03,440 --> 00:54:05,440 Speaker 14: we have some peers in the space that are looking 980 00:54:05,480 --> 00:54:08,440 Speaker 14: at those things, but we are so we are really 981 00:54:08,480 --> 00:54:11,319 Speaker 14: focused on the end stage of this disease where we 982 00:54:11,400 --> 00:54:13,279 Speaker 14: believe there's the greatest medical need. 983 00:54:13,640 --> 00:54:15,560 Speaker 1: All right, very good, Joel Lewis, thank you so much. 984 00:54:15,560 --> 00:54:18,879 Speaker 1: We appreciate it. CEO and president of Galectin Therapeutics, again, 985 00:54:18,960 --> 00:54:21,760 Speaker 1: g Alt is the ticker to load into your Bloomberg 986 00:54:21,800 --> 00:54:24,160 Speaker 1: terminok At that NaSTA quote's about one hundred million dollars 987 00:54:24,160 --> 00:54:26,319 Speaker 1: in market cap, up seventy five percent year to date. 988 00:54:26,400 --> 00:54:28,880 Speaker 1: So maybe some optimism out there in the street for 989 00:54:29,239 --> 00:54:30,760 Speaker 1: this drug and this treatment. 990 00:54:32,840 --> 00:54:35,920 Speaker 2: Thanks for listening to the Bloomberg Markets podcast. You can 991 00:54:35,960 --> 00:54:39,760 Speaker 2: subscribe and listen to interviews at Apple Podcasts. Or whatever 992 00:54:39,840 --> 00:54:43,560 Speaker 2: podcast platform you prefer. I'm Matt Miller. I'm on Twitter 993 00:54:43,760 --> 00:54:45,680 Speaker 2: at Matt Miller nineteen seventy three. 994 00:54:46,120 --> 00:54:48,560 Speaker 1: And I'm fall Sweeney. I'm on Twitter at pt Sweeney. 995 00:54:48,600 --> 00:54:51,319 Speaker 1: Before the podcast, you can always catch us worldwide at 996 00:54:51,320 --> 00:54:53,040 Speaker 1: Bloomberg Radio