1 00:00:05,120 --> 00:00:09,200 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene along 2 00:00:09,240 --> 00:00:13,200 Speaker 1: with Jonathan Ferwell and Lisa Brownwitz Jaily, we bring you 3 00:00:13,320 --> 00:00:18,600 Speaker 1: insight from the best and economics, finance, investment, and international relations. 4 00:00:18,960 --> 00:00:23,840 Speaker 1: Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot Com, 5 00:00:23,920 --> 00:00:30,480 Speaker 1: and of course on the Bloomberg terminal. Well, what we 6 00:00:30,520 --> 00:00:32,760 Speaker 1: need to do, John and Lisa is remain calm on 7 00:00:32,920 --> 00:00:35,920 Speaker 1: radio and television. Right now, we welcome Neil dot Ahead 8 00:00:35,920 --> 00:00:40,080 Speaker 1: of US Economic Research, Renaissance macro research. Neil, you are 9 00:00:40,080 --> 00:00:43,479 Speaker 1: the king of transitory. Why is six point x per 10 00:00:43,560 --> 00:00:47,760 Speaker 1: cent inflation transitory? Well, I don't know that I'm the 11 00:00:47,840 --> 00:00:51,559 Speaker 1: king of transitory yet, Tom. I mean, we have been 12 00:00:51,560 --> 00:00:55,880 Speaker 1: telling clients that that inflation is going to be getting 13 00:00:55,880 --> 00:00:59,200 Speaker 1: worse before it gets better, and um, you know, today's 14 00:00:59,200 --> 00:01:04,160 Speaker 1: inflation data has been so it vindicates that. I mean, 15 00:01:04,200 --> 00:01:05,959 Speaker 1: I think if you look at this, this is actually 16 00:01:06,040 --> 00:01:12,400 Speaker 1: somewhat worse under the surface than it is on the surface. Um, 17 00:01:12,480 --> 00:01:15,520 Speaker 1: so you know, I'm looking at my Bloomberg obviously shelter, 18 00:01:15,680 --> 00:01:17,600 Speaker 1: but you know, look, we still got a beat despite 19 00:01:17,680 --> 00:01:21,559 Speaker 1: no contribution from airfares. Air airline fares were actually a drag. 20 00:01:22,840 --> 00:01:25,839 Speaker 1: It's hard to see how that keeps up. Considering, um, 21 00:01:25,880 --> 00:01:29,319 Speaker 1: you know, the travel situation which is beginning to heat up. 22 00:01:29,360 --> 00:01:32,760 Speaker 1: I mean, if you look at search interests for flights, uh, 23 00:01:32,880 --> 00:01:37,000 Speaker 1: there's increasing demand for travel. So it's it's unlikely that 24 00:01:37,000 --> 00:01:41,840 Speaker 1: that we see a repeat performance on that front going forward. Um. 25 00:01:41,920 --> 00:01:44,920 Speaker 1: You know, I still think there's a decent amount in 26 00:01:44,959 --> 00:01:47,680 Speaker 1: the pipeline for use car and truck prices to keep 27 00:01:47,800 --> 00:01:50,440 Speaker 1: going up. Um. But again, the big, the big story 28 00:01:50,520 --> 00:01:52,840 Speaker 1: is here is rental inflation, and it's and it's and 29 00:01:52,840 --> 00:01:57,200 Speaker 1: it's firming. So UM, I do think that the FEDS 30 00:01:57,240 --> 00:01:59,160 Speaker 1: still has a story to tell. So it's not so 31 00:01:59,280 --> 00:02:01,960 Speaker 1: much what the lation is doing. Obviously that's important, but 32 00:02:02,000 --> 00:02:04,960 Speaker 1: really it's what's the FED going to do about it? Um? 33 00:02:05,760 --> 00:02:10,240 Speaker 1: And I think Powell, um, it's not ready to do 34 00:02:10,320 --> 00:02:14,639 Speaker 1: something about it. Yeah to Q one, Nail if you can, 35 00:02:14,840 --> 00:02:16,640 Speaker 1: Sorry to jump in, but I think this is important 36 00:02:16,880 --> 00:02:19,000 Speaker 1: when we get to Q one, and as I listen 37 00:02:19,080 --> 00:02:21,600 Speaker 1: to you, it seems to be getting broader and stickier 38 00:02:22,120 --> 00:02:23,960 Speaker 1: when we get to Q one. If we're still in 39 00:02:24,000 --> 00:02:27,919 Speaker 1: this position, and unemployment, as Jim Pallada suggested, could drop 40 00:02:27,960 --> 00:02:30,840 Speaker 1: to a three handle. How do you think communication evolves 41 00:02:30,840 --> 00:02:33,880 Speaker 1: around that? From your perspective, you're understanding of the reaction 42 00:02:33,919 --> 00:02:37,919 Speaker 1: function of the FED. Well, I think that that will 43 00:02:38,040 --> 00:02:40,520 Speaker 1: keep the door open for rate hikes starting in the 44 00:02:40,560 --> 00:02:43,679 Speaker 1: second half of of next year. I mean, remember that 45 00:02:43,840 --> 00:02:48,080 Speaker 1: the FED is a very slow moving entity, right, and 46 00:02:48,120 --> 00:02:51,160 Speaker 1: their institutional constraints. I mean, think about what Powell said 47 00:02:52,280 --> 00:02:55,080 Speaker 1: last week. I mean, you know, you had folks like 48 00:02:55,160 --> 00:02:58,880 Speaker 1: Waller and soon to depart corals talking about how, well, 49 00:02:58,919 --> 00:03:01,799 Speaker 1: if the next two inflation prints or firm, we may 50 00:03:01,840 --> 00:03:06,000 Speaker 1: have to shift the timeline for rate hikes. Um, you know, 51 00:03:06,080 --> 00:03:10,000 Speaker 1: maybe even hinting at speeding up the tapering process. Powell, 52 00:03:10,160 --> 00:03:14,400 Speaker 1: I think effectively put the kabash on on that talk 53 00:03:14,639 --> 00:03:18,200 Speaker 1: last week. So they've kind of locked themselves in to 54 00:03:18,480 --> 00:03:21,800 Speaker 1: a steady pace of tapering I think over the first 55 00:03:21,800 --> 00:03:24,960 Speaker 1: half of next year. So you know, look, we're talking about, 56 00:03:25,120 --> 00:03:30,040 Speaker 1: you know, potentially substantial acceleration and employment activity between now 57 00:03:30,080 --> 00:03:33,120 Speaker 1: and the end of the year. Obviously inflation is firming, 58 00:03:33,520 --> 00:03:37,440 Speaker 1: so we're seeing an acceleration and nominal growth and guess 59 00:03:37,480 --> 00:03:42,040 Speaker 1: what the FET is still buying right, So, um, So 60 00:03:42,240 --> 00:03:44,640 Speaker 1: it just tells you how slow moving the fete is 61 00:03:45,400 --> 00:03:48,000 Speaker 1: um And look, I mean I think that labor supply 62 00:03:48,080 --> 00:03:50,000 Speaker 1: is going to come up, and I think the FED 63 00:03:50,040 --> 00:03:52,640 Speaker 1: will have a good story to tell and they'll they'll, 64 00:03:52,760 --> 00:03:54,800 Speaker 1: you know, and they'll continue to stick to that. But 65 00:03:55,680 --> 00:03:57,520 Speaker 1: you know, the risk, of course, is that there's more 66 00:03:57,560 --> 00:04:00,640 Speaker 1: of an abrupt shifting policy. Sometime later night, steer Neil. 67 00:04:00,680 --> 00:04:02,880 Speaker 1: Let's say the data continues to come in like this, 68 00:04:03,000 --> 00:04:05,800 Speaker 1: and the fact it feels like it needs to hike rates. 69 00:04:05,800 --> 00:04:09,080 Speaker 1: How high can rates go given where the economy is, 70 00:04:09,080 --> 00:04:12,320 Speaker 1: given how much debt we've incurred. Well, so that's the issue, right. 71 00:04:12,440 --> 00:04:14,520 Speaker 1: Li says that if you look at the pricing in 72 00:04:14,560 --> 00:04:17,200 Speaker 1: the forward market, I mean, the curve is so flat. 73 00:04:17,320 --> 00:04:21,120 Speaker 1: So basically, if I'm interpreting the market correctly, it's, you know, 74 00:04:21,240 --> 00:04:23,360 Speaker 1: let's hike twice and then be done, which sort of 75 00:04:23,440 --> 00:04:26,760 Speaker 1: raises the question like why hike at all? Like so 76 00:04:26,839 --> 00:04:29,560 Speaker 1: I don't, um, you know, to me, the back end 77 00:04:29,600 --> 00:04:33,159 Speaker 1: of the curve looks very misspriced. Um, because there looks 78 00:04:33,200 --> 00:04:35,559 Speaker 1: to be, at least in my mind, a significant amount 79 00:04:35,600 --> 00:04:38,080 Speaker 1: of momentum in the in the in the economic situation, 80 00:04:38,120 --> 00:04:40,520 Speaker 1: I mean, demand is running very very strong, and it 81 00:04:40,600 --> 00:04:43,400 Speaker 1: still continues to run strong, and you know, you mentioned 82 00:04:43,400 --> 00:04:47,400 Speaker 1: about how real wages may slow demand. That's unlikely in 83 00:04:47,440 --> 00:04:51,400 Speaker 1: my view, because aggregate incomes are surging, right, So it's 84 00:04:51,440 --> 00:04:53,760 Speaker 1: not just about what people are making on each our work. 85 00:04:53,800 --> 00:04:57,039 Speaker 1: It's about how many people are working, how long they're working, 86 00:04:57,600 --> 00:05:00,320 Speaker 1: and also they're hourly earnings. And if you up the 87 00:05:00,440 --> 00:05:03,320 Speaker 1: some product of those three things, I mean, that's growing 88 00:05:03,360 --> 00:05:06,440 Speaker 1: like ten percent, So that's a rough proxy annualize, So 89 00:05:06,440 --> 00:05:08,840 Speaker 1: that's a rough proxy phenomenal GDP. So now we need 90 00:05:08,880 --> 00:05:11,320 Speaker 1: to think about what's going to be the distribution of 91 00:05:11,360 --> 00:05:13,520 Speaker 1: that growth. I mean, is it going to be you know, 92 00:05:13,760 --> 00:05:17,279 Speaker 1: six percent real real activity and maybe four percent inflation? 93 00:05:17,360 --> 00:05:19,240 Speaker 1: Is it going to be seven percent real activity and 94 00:05:19,240 --> 00:05:22,120 Speaker 1: three percent inflation? What I can tell you at a 95 00:05:22,120 --> 00:05:24,280 Speaker 1: minimum is that the FED is going to be having 96 00:05:24,320 --> 00:05:27,400 Speaker 1: to revise up their inflation estimates for next year. And 97 00:05:27,400 --> 00:05:29,120 Speaker 1: one of the things that we've been seeing is that 98 00:05:29,160 --> 00:05:31,800 Speaker 1: they've you know, when you look at the median expectations, 99 00:05:31,920 --> 00:05:35,520 Speaker 1: they've always been sort of just expecting inflation to slow 100 00:05:35,520 --> 00:05:37,719 Speaker 1: down to two percent, right, So it's just sort of 101 00:05:37,720 --> 00:05:39,920 Speaker 1: this mark to market exercise. There hasn't been this kind 102 00:05:39,920 --> 00:05:44,240 Speaker 1: of capitulation from the FED on the inflation story. And 103 00:05:44,560 --> 00:05:47,640 Speaker 1: I wouldn't expect that in December, and I wouldn't expect 104 00:05:47,680 --> 00:05:50,640 Speaker 1: it in March either, because, if anything, the composition of 105 00:05:50,680 --> 00:05:53,440 Speaker 1: the of the farm C is going to change. I 106 00:05:53,480 --> 00:05:55,760 Speaker 1: don't think Biden is going to put people in there 107 00:05:56,320 --> 00:05:59,320 Speaker 1: that are going to adopt a more hawkish response function 108 00:05:59,360 --> 00:06:02,240 Speaker 1: to the data that's coming in. Neil Love catching up 109 00:06:02,240 --> 00:06:04,240 Speaker 1: with you, the perfect guest to talk about this with 110 00:06:04,360 --> 00:06:12,440 Speaker 1: Neil down to that every nice on smacro research. Right now, 111 00:06:12,480 --> 00:06:15,159 Speaker 1: we will pause, and this is a wonderful interlude into 112 00:06:15,360 --> 00:06:18,760 Speaker 1: cp I and all that we cover here. Jeanne Plan 113 00:06:19,160 --> 00:06:22,719 Speaker 1: the CEO of BMP perry Ba USA. He's an acclaimed 114 00:06:22,760 --> 00:06:26,279 Speaker 1: world class sailor, but far more he has carried forward 115 00:06:26,320 --> 00:06:30,080 Speaker 1: the heritage of b MP Parry Ba from Roland Garrows 116 00:06:30,120 --> 00:06:33,599 Speaker 1: almost fifty years ago, where it's safe to say he 117 00:06:33,760 --> 00:06:37,440 Speaker 1: and his bank brand and own the sport of tennis. John, 118 00:06:37,480 --> 00:06:40,400 Speaker 1: the only equivalent, see I know, is what Barclays did 119 00:06:40,440 --> 00:06:44,160 Speaker 1: in Premier League years ago. Jean, if you have had 120 00:06:44,160 --> 00:06:47,640 Speaker 1: a bang up year in the branding of tennis, what 121 00:06:47,839 --> 00:06:51,440 Speaker 1: will b MP Parry BA do in two thousand twenty two? 122 00:06:51,680 --> 00:06:54,919 Speaker 1: How do you carry for the open in Indian Wells 123 00:06:55,240 --> 00:07:02,200 Speaker 1: and bring it into your banking business of next year. Well, Tom, 124 00:07:02,279 --> 00:07:04,159 Speaker 1: John and Lisa, thank you so much for having me 125 00:07:04,200 --> 00:07:08,599 Speaker 1: on the show. Um and Tom, you definitely follow and 126 00:07:08,680 --> 00:07:12,880 Speaker 1: no tennis extremely well. You mentioned Indian Wals, which we 127 00:07:13,000 --> 00:07:16,800 Speaker 1: managed to you know, really host in one, which we 128 00:07:16,840 --> 00:07:19,720 Speaker 1: could not do in twenty and it was an amazing 129 00:07:19,840 --> 00:07:23,400 Speaker 1: way to send the message at work, back back in business, 130 00:07:23,440 --> 00:07:26,160 Speaker 1: back with clients. And as you said, the bank is 131 00:07:26,840 --> 00:07:29,320 Speaker 1: has tennis in its DNA and the plan is to 132 00:07:29,440 --> 00:07:32,080 Speaker 1: having Indian Wells in twenty twenty two in March. This 133 00:07:32,280 --> 00:07:35,680 Speaker 1: is you know, spring season opener and hopefully this time 134 00:07:35,680 --> 00:07:39,160 Speaker 1: full capacity a lot of fans. And you know, the 135 00:07:39,280 --> 00:07:41,680 Speaker 1: values of tennis fits pretty well the value of the 136 00:07:41,720 --> 00:07:45,000 Speaker 1: bank going forward. Uh. We you know, it's a it's 137 00:07:45,000 --> 00:07:47,840 Speaker 1: a global sport. The bank is a global bank. It's 138 00:07:47,880 --> 00:07:52,120 Speaker 1: all about sportsmanship, you know, personal improvement and really uh, 139 00:07:52,600 --> 00:07:55,400 Speaker 1: it's a it's it's a sport that you can really 140 00:07:55,520 --> 00:07:58,840 Speaker 1: you know, develop and and and uh and follow around 141 00:07:58,880 --> 00:08:00,560 Speaker 1: the world. And this is this is why we like 142 00:08:00,600 --> 00:08:02,280 Speaker 1: the game, Johnny. If let's pick up on that line 143 00:08:02,320 --> 00:08:04,880 Speaker 1: you just mentioned, the bank is back. The bank is back, 144 00:08:05,320 --> 00:08:07,800 Speaker 1: the employees back at the back on the trading floors, 145 00:08:07,920 --> 00:08:09,920 Speaker 1: business is usual. Can you help me understand how things 146 00:08:09,920 --> 00:08:12,520 Speaker 1: are revolving at the moment, how things are normalizing in 147 00:08:12,560 --> 00:08:17,600 Speaker 1: your business, your bank. We are absolutely, John, we are 148 00:08:17,760 --> 00:08:21,640 Speaker 1: really you know, uh, asking and more specifically, you know, 149 00:08:21,920 --> 00:08:25,600 Speaker 1: incentifizing our staff to come back on premises. You know, 150 00:08:26,040 --> 00:08:30,320 Speaker 1: we have to acknowledge that the digitalization of our economy 151 00:08:30,400 --> 00:08:32,840 Speaker 1: during the pandemic, you know, as allower us to stay 152 00:08:32,880 --> 00:08:36,440 Speaker 1: in business, to stay connected, including today, by the way, 153 00:08:36,320 --> 00:08:39,480 Speaker 1: I love I love being in the studio. I look 154 00:08:39,520 --> 00:08:42,840 Speaker 1: forward to being back in person with you hopefully you know, 155 00:08:42,960 --> 00:08:45,520 Speaker 1: in the months to come. But having said that, nothing 156 00:08:45,600 --> 00:08:50,640 Speaker 1: replaces the in person relationship and connectivity. It's very complicated 157 00:08:50,679 --> 00:08:54,960 Speaker 1: to convey companies values digitally. And this is what we 158 00:08:55,080 --> 00:08:57,080 Speaker 1: do on the His coast, you know, in the building 159 00:08:57,080 --> 00:09:00,800 Speaker 1: you know, well here in mid town Manhattan, we now 160 00:09:00,920 --> 00:09:04,680 Speaker 1: have over thirty percent for staff back on premises on 161 00:09:04,840 --> 00:09:10,280 Speaker 1: a rotational basis obviously, uh. And we're targeting for by 162 00:09:10,360 --> 00:09:16,760 Speaker 1: your hand and hopefully early in two. We are trying 163 00:09:16,760 --> 00:09:19,840 Speaker 1: to make the office attractive or we're designing of frauds 164 00:09:19,880 --> 00:09:23,199 Speaker 1: to make the time effective. Um. You know it has 165 00:09:23,400 --> 00:09:27,280 Speaker 1: We have to provide value for employees to enjoy being 166 00:09:27,320 --> 00:09:29,880 Speaker 1: back on premises, and management is a refocused on it. 167 00:09:30,080 --> 00:09:32,480 Speaker 1: They want to be paid more. You know that you 168 00:09:32,480 --> 00:09:34,280 Speaker 1: can say the bank is back, we will care about 169 00:09:34,280 --> 00:09:36,480 Speaker 1: this business. I care about this industry. You care about 170 00:09:36,480 --> 00:09:38,959 Speaker 1: this industry. It's great to see people on trading flaws again. 171 00:09:39,080 --> 00:09:41,280 Speaker 1: But you know, if something's got lost with this younger generation, 172 00:09:41,320 --> 00:09:42,800 Speaker 1: they don't want to be a part of it. In 173 00:09:42,840 --> 00:09:44,960 Speaker 1: the same way, how are you grappling with that? Does 174 00:09:45,000 --> 00:09:49,360 Speaker 1: the price get it done well? It's uh, it's one 175 00:09:49,400 --> 00:09:53,720 Speaker 1: of the major challenges and concerns. There is a tremendous 176 00:09:53,760 --> 00:09:57,680 Speaker 1: competition for talent. Uh and it's already by the way, 177 00:09:57,720 --> 00:10:01,760 Speaker 1: within the banking industry. Competition comes from outside of the 178 00:10:01,800 --> 00:10:05,800 Speaker 1: banking industry. UH. And it's in some very targeted areas 179 00:10:05,840 --> 00:10:09,280 Speaker 1: you're rightly mentioned, you know, in corporate banking, the juniors. 180 00:10:09,760 --> 00:10:12,000 Speaker 1: It's in leverage finance as well. Whether it's such a 181 00:10:12,080 --> 00:10:14,960 Speaker 1: high demand, I can tell you. It's in some you know, 182 00:10:15,160 --> 00:10:19,680 Speaker 1: new technology areas as well, such as cyber and AI. 183 00:10:19,760 --> 00:10:21,640 Speaker 1: And it's in retail. We have a retail bank in 184 00:10:21,679 --> 00:10:25,920 Speaker 1: the United States. Retail as well is experiencing some tensions 185 00:10:25,960 --> 00:10:29,280 Speaker 1: in terms of uh, you know, a strong competition for 186 00:10:29,320 --> 00:10:32,040 Speaker 1: some positions. How do we deal with it? Listen, first 187 00:10:32,080 --> 00:10:34,600 Speaker 1: and foremost, as you said, you know, it's about remaining 188 00:10:34,600 --> 00:10:38,520 Speaker 1: competitive in terms of compensation. That is absolutely critical. But 189 00:10:38,600 --> 00:10:42,560 Speaker 1: it's not only about compensation, john it's uh, it's working 190 00:10:42,600 --> 00:10:45,959 Speaker 1: for a company that has a purpose. I believe that 191 00:10:46,040 --> 00:10:49,320 Speaker 1: the mp PI BAT or focus on CSR on sustainability 192 00:10:49,400 --> 00:10:53,600 Speaker 1: is quite compelling. It's acknowledging the fact that some of 193 00:10:53,679 --> 00:10:57,959 Speaker 1: our staff, particularly the younger generation, is looking for flexibility 194 00:10:58,040 --> 00:11:02,200 Speaker 1: and the new ways of you know, digitizing. The business 195 00:11:02,280 --> 00:11:06,439 Speaker 1: is probably there, and we have to make the workplace 196 00:11:06,559 --> 00:11:10,080 Speaker 1: attractive and people coming back here. It has to be 197 00:11:10,160 --> 00:11:14,120 Speaker 1: for a real value, Johnny, especially as you expand again 198 00:11:14,200 --> 00:11:16,480 Speaker 1: in the United States, I do wonder how you compete 199 00:11:16,480 --> 00:11:19,080 Speaker 1: with the likes of JP Morgan and the oligarchy of 200 00:11:19,240 --> 00:11:21,679 Speaker 1: US banks at a time when everyone wants a piece 201 00:11:21,920 --> 00:11:27,440 Speaker 1: of the US dynamism. That's very true. And you know, 202 00:11:27,600 --> 00:11:30,520 Speaker 1: for a bank like BNP PIPA, which is a leader 203 00:11:31,400 --> 00:11:33,800 Speaker 1: in the EUBO zone and as you know, Lisa, we 204 00:11:33,840 --> 00:11:36,400 Speaker 1: have a fairly large platform in the United States. We 205 00:11:36,480 --> 00:11:39,680 Speaker 1: have a diversified business model. We have a retail activity 206 00:11:39,720 --> 00:11:43,520 Speaker 1: or wholesale activity. We have fourteen thousand people in this country, 207 00:11:44,240 --> 00:11:48,880 Speaker 1: meaning contributing to the workforce here. But to be successful 208 00:11:49,280 --> 00:11:51,960 Speaker 1: as a US bank owned by a European leader, you 209 00:11:51,960 --> 00:11:54,280 Speaker 1: have to be very targeted and to get a piece 210 00:11:54,320 --> 00:11:56,840 Speaker 1: of the dynamism in this country of this, by the way, 211 00:11:57,040 --> 00:12:00,720 Speaker 1: amazing recovery that we believe will continue into a twenty two. 212 00:12:00,960 --> 00:12:04,720 Speaker 1: You have to be targeted. You have to really realize 213 00:12:04,760 --> 00:12:07,240 Speaker 1: what kind of value can provide to clients. And this 214 00:12:07,320 --> 00:12:12,479 Speaker 1: is what we've done. With our wholesale activities and retail activities. 215 00:12:12,559 --> 00:12:15,400 Speaker 1: We we can be quite effective with US clients who 216 00:12:15,720 --> 00:12:18,280 Speaker 1: not only have a business model in the United States, 217 00:12:18,320 --> 00:12:22,160 Speaker 1: but who are becoming much more international and benefiting from 218 00:12:22,240 --> 00:12:25,560 Speaker 1: the U s cross but European expansion that we see 219 00:12:25,600 --> 00:12:29,080 Speaker 1: happening as well. In one and twenty twenty two, Johnny, 220 00:12:29,080 --> 00:12:31,040 Speaker 1: if you forgive me, because only have sixty seconds left 221 00:12:31,040 --> 00:12:33,120 Speaker 1: on the clock, we get some inflation data in American 222 00:12:33,160 --> 00:12:36,000 Speaker 1: about five minutes. What's your take from the companies you 223 00:12:36,080 --> 00:12:38,920 Speaker 1: serve you finance, what are you learning understanding? What are 224 00:12:38,920 --> 00:12:43,520 Speaker 1: you learning at the moment about the price pressure in America. Well, 225 00:12:43,600 --> 00:12:45,920 Speaker 1: first and foremost, I'm learning that, you know, they are 226 00:12:46,080 --> 00:12:50,280 Speaker 1: really very optimistic about you know, the expansion only the 227 00:12:50,360 --> 00:12:53,559 Speaker 1: recovery we face here, which is carry which will carry 228 00:12:54,160 --> 00:12:58,040 Speaker 1: you out in a carry on in two. And I 229 00:12:58,120 --> 00:13:01,800 Speaker 1: see them investing. I see them, uh, you know, positioning 230 00:13:01,800 --> 00:13:05,920 Speaker 1: themselves for more capex investment and obviously trying to hire. Uh. 231 00:13:06,080 --> 00:13:10,040 Speaker 1: Inflation is a concern for sure, but we believe that 232 00:13:10,559 --> 00:13:14,600 Speaker 1: with um, you know, the supply chain disruptions will we'll 233 00:13:14,679 --> 00:13:19,600 Speaker 1: probably you know normalize opput in two uh and uh 234 00:13:19,679 --> 00:13:23,679 Speaker 1: that they should. It's that's not the biggest concern, particularly 235 00:13:23,679 --> 00:13:27,440 Speaker 1: with such a g D pickles that we're experiencing in 236 00:13:27,440 --> 00:13:30,440 Speaker 1: in this country. Johnny, thank you, sir. As always it's 237 00:13:30,440 --> 00:13:32,680 Speaker 1: going to catch up. A privilege, a pleasure. Johnny philly 238 00:13:32,760 --> 00:13:41,040 Speaker 1: on there the BNP paraboun USA CEO right now, and 239 00:13:41,120 --> 00:13:43,120 Speaker 1: this is a joy. He's a gentleman and this is 240 00:13:43,160 --> 00:13:46,400 Speaker 1: always a joy, and that he's running an airline and 241 00:13:46,600 --> 00:13:49,880 Speaker 1: actually is familiar with the cockpit. He's a former gentleman 242 00:13:49,920 --> 00:13:54,040 Speaker 1: from Colorado Springs and outside Dallas, Texas. Scott Kirby joins 243 00:13:54,120 --> 00:13:58,240 Speaker 1: US now the chief executive officer of United Airlines. I 244 00:13:58,640 --> 00:14:01,679 Speaker 1: don't want to ask a snirt question, but I think Scott, 245 00:14:01,720 --> 00:14:06,000 Speaker 1: it goes to the pressure you face with COVID and vaccine. 246 00:14:06,920 --> 00:14:09,800 Speaker 1: Could Aaron Rodgers fly out at Green Bay this morning 247 00:14:09,800 --> 00:14:14,080 Speaker 1: on United Airlines? I have no idea where Aaron Rodgers ploye, 248 00:14:14,480 --> 00:14:17,440 Speaker 1: but at the moment, uh, there there's we have a 249 00:14:17,480 --> 00:14:20,120 Speaker 1: requirement frire employee. Uh and we got nine nine point 250 00:14:20,160 --> 00:14:22,680 Speaker 1: seven percent of employees. Yeah. I'm really glad you have 251 00:14:22,760 --> 00:14:25,240 Speaker 1: that done. And if you fly international, you've gotta have 252 00:14:25,760 --> 00:14:28,640 Speaker 1: you got to be vaccinated in most geographies. But what 253 00:14:28,680 --> 00:14:31,920 Speaker 1: about domestic right now? Are you checking? I mean United 254 00:14:32,040 --> 00:14:34,560 Speaker 1: is lead on this, folks. Let's be direct about it. 255 00:14:34,600 --> 00:14:37,040 Speaker 1: And this is your experience running American and all the 256 00:14:37,080 --> 00:14:40,560 Speaker 1: other responsibilities you've had. What do you do with passengers 257 00:14:40,640 --> 00:14:45,280 Speaker 1: right now? Domestically in America? There is not a requirement 258 00:14:45,600 --> 00:14:49,240 Speaker 1: domestically for vaccines. There is a requirement, of course to 259 00:14:49,280 --> 00:14:52,760 Speaker 1: wear a mask onboard airplanes. And the airflow on airplane, 260 00:14:52,920 --> 00:14:54,480 Speaker 1: you know, literally is the best if you're going to 261 00:14:54,520 --> 00:14:59,080 Speaker 1: be anywhere indoors. And our view has been on this 262 00:14:59,360 --> 00:15:02,760 Speaker 1: point at and the administration has already said this, and 263 00:15:03,040 --> 00:15:04,920 Speaker 1: I agree with them, which is the best way to 264 00:15:04,920 --> 00:15:09,440 Speaker 1: get people vaccinated is frictional trans transactions every time you 265 00:15:09,480 --> 00:15:11,280 Speaker 1: go to a restaurant, every time you get on a 266 00:15:11,280 --> 00:15:13,720 Speaker 1: airplane or a train or a bus or a subway. 267 00:15:14,360 --> 00:15:16,280 Speaker 1: But to do it through work and then you do 268 00:15:16,320 --> 00:15:18,520 Speaker 1: it once and you get a high percentage of the 269 00:15:18,520 --> 00:15:21,520 Speaker 1: population vaccinated. And that's really the most efficient way. And 270 00:15:21,520 --> 00:15:23,520 Speaker 1: of course that's what we did at United as well. Scott, 271 00:15:23,520 --> 00:15:27,320 Speaker 1: how much resistance did you face from your employees to 272 00:15:27,480 --> 00:15:31,120 Speaker 1: these mandates? Well, you know, we got ninety nine point 273 00:15:31,160 --> 00:15:35,440 Speaker 1: seven and uh, you know, there's so many of those people, 274 00:15:35,800 --> 00:15:40,000 Speaker 1: uh started off unvaccinated or did not want UM to 275 00:15:40,000 --> 00:15:43,080 Speaker 1: to have the mandate. Ironically, a lot of them actually 276 00:15:43,120 --> 00:15:45,680 Speaker 1: had been vaccinated, but they just didn't They objected to 277 00:15:45,720 --> 00:15:48,960 Speaker 1: the requirement. But um, But the good news is we 278 00:15:48,960 --> 00:15:51,280 Speaker 1: were open, honest, and transparent. We started started talking to 279 00:15:51,320 --> 00:15:53,680 Speaker 1: our employees about it in January, and so when we 280 00:15:53,760 --> 00:15:56,400 Speaker 1: did it, it wasn't a surprise. It didn't come out 281 00:15:56,400 --> 00:15:59,360 Speaker 1: of left field. We were firm. We never waffled about it. 282 00:15:59,800 --> 00:16:02,760 Speaker 1: It is always about safety, that's what it was. You know, 283 00:16:02,920 --> 00:16:05,600 Speaker 1: I literally have written a letter to the families of 284 00:16:05,600 --> 00:16:08,080 Speaker 1: every employee that lost their lives to COVID and when 285 00:16:08,120 --> 00:16:11,280 Speaker 1: you do that, you know it feel you feel it. Um. 286 00:16:11,320 --> 00:16:15,080 Speaker 1: I felt it, and that the second time I started 287 00:16:15,080 --> 00:16:17,360 Speaker 1: writing a letter again in July, after the delta variant 288 00:16:17,440 --> 00:16:19,200 Speaker 1: kicking up, you know, I walked around and talk to 289 00:16:19,280 --> 00:16:22,560 Speaker 1: my wife and call our teams. Said, we're doing it, um, 290 00:16:22,560 --> 00:16:25,800 Speaker 1: because it's about saving lines. Scott looking ahead to the 291 00:16:25,920 --> 00:16:27,960 Speaker 1: end of the pandemic, because it does feel like we 292 00:16:28,000 --> 00:16:30,200 Speaker 1: are getting to a place where we can talk about that. 293 00:16:30,680 --> 00:16:35,240 Speaker 1: How much will prices of airfares be higher? Simply because 294 00:16:35,280 --> 00:16:37,600 Speaker 1: there is such a debt overhang, there is such a 295 00:16:37,760 --> 00:16:42,840 Speaker 1: lost year, a lost era feels like of travel. Well, 296 00:16:43,200 --> 00:16:46,160 Speaker 1: you know, ultimately I think prices, you know, by the 297 00:16:46,160 --> 00:16:48,960 Speaker 1: time we're getting the next summer, I guess I'm guessing 298 00:16:48,960 --> 00:16:53,680 Speaker 1: we'll be back to two thousand nineteen levels. Uh and 299 00:16:53,680 --> 00:16:55,600 Speaker 1: and then they'll go up based on kind of our 300 00:16:55,640 --> 00:16:58,120 Speaker 1: cost input. You know, fuel is a perfect example. When 301 00:16:58,120 --> 00:17:01,320 Speaker 1: fuel goes up, airline tickets up, and when people goes down, 302 00:17:01,400 --> 00:17:04,000 Speaker 1: they tend to come down. Um. And you know, the 303 00:17:04,000 --> 00:17:07,120 Speaker 1: good but the good news is most airlines and particularly 304 00:17:07,200 --> 00:17:11,560 Speaker 1: United you know, got much more productive using technology and 305 00:17:11,600 --> 00:17:14,719 Speaker 1: more efficient, and so our core cost structure. We at 306 00:17:14,800 --> 00:17:17,640 Speaker 1: United think that we can be ten percent larger than 307 00:17:17,640 --> 00:17:21,119 Speaker 1: we were before with the same level of employment, and 308 00:17:21,200 --> 00:17:23,520 Speaker 1: so some of that is gonna is gonna help mitigate 309 00:17:23,560 --> 00:17:26,639 Speaker 1: any increases. But my guess is we're gonna be getting 310 00:17:26,680 --> 00:17:29,480 Speaker 1: back to kind of two thousand nineteen levels by this 311 00:17:29,560 --> 00:17:32,679 Speaker 1: coming summer. If you're just joining us Bloomberg, Greece. Scott Kirby, 312 00:17:32,760 --> 00:17:36,640 Speaker 1: the chief executive officer of United Airlines, Lisa brand Woodson 313 00:17:36,680 --> 00:17:41,240 Speaker 1: Tim Kane. Mr Kirby Lansing, Michigan, is looking at Delta 314 00:17:41,280 --> 00:17:44,480 Speaker 1: in American and not looking at United this morning. I 315 00:17:44,520 --> 00:17:48,399 Speaker 1: believe you pull out of eleven smaller towns today. Is 316 00:17:48,440 --> 00:17:54,200 Speaker 1: this some form of reversion to monopsony or monopoly within 317 00:17:54,240 --> 00:17:57,600 Speaker 1: the airline business that we don't have competition into some 318 00:17:57,680 --> 00:18:01,320 Speaker 1: of these smaller towns. Uh, not at all. This is 319 00:18:01,359 --> 00:18:05,800 Speaker 1: simply the economic reality of Frankly, you know, not enough 320 00:18:05,800 --> 00:18:09,960 Speaker 1: pilots in the country, and with not enough pilots, you know, 321 00:18:10,119 --> 00:18:14,359 Speaker 1: flying small regional jets just gets to be impossible in 322 00:18:14,400 --> 00:18:16,639 Speaker 1: your choices. If you're only gonna have enough pilot do 323 00:18:16,680 --> 00:18:17,879 Speaker 1: you want to fly to London or do you want 324 00:18:17,880 --> 00:18:20,240 Speaker 1: to be landing and we're gonna fly to London and 325 00:18:20,240 --> 00:18:22,360 Speaker 1: and it's as simple as that. Did you do this 326 00:18:22,480 --> 00:18:25,800 Speaker 1: in conversation with the other domestic carriers? Was this an 327 00:18:25,920 --> 00:18:29,160 Speaker 1: organized plan to be sure to two airlines say we're 328 00:18:29,240 --> 00:18:33,639 Speaker 1: left in each town? Absolutely not. That would have been illegal, 329 00:18:33,840 --> 00:18:36,120 Speaker 1: but we didn't do it. Now Robert Crandell's listening down 330 00:18:36,160 --> 00:18:40,840 Speaker 1: in Florida. Question, Scott, I do wonder your conversations with 331 00:18:40,880 --> 00:18:44,720 Speaker 1: other executives how much you hear about business travel coming back, 332 00:18:44,760 --> 00:18:48,359 Speaker 1: how much you're adapting airplanes to an era without the 333 00:18:48,440 --> 00:18:52,200 Speaker 1: kind of business class that you used to have. Well, 334 00:18:52,480 --> 00:18:54,720 Speaker 1: you know, I'm in uh. It used to be a 335 00:18:54,800 --> 00:18:56,880 Speaker 1: year and after it as a minority of one, and 336 00:18:56,960 --> 00:18:58,720 Speaker 1: it's still a minority today. But there are a lot 337 00:18:58,720 --> 00:19:01,240 Speaker 1: more people that agree with say, which is I think 338 00:19:01,240 --> 00:19:04,920 Speaker 1: business travel is gonna come back. Um. We see all 339 00:19:05,040 --> 00:19:08,680 Speaker 1: kinds of anecdotes, and particularly once people start traveling, they're 340 00:19:08,720 --> 00:19:12,600 Speaker 1: getting back to traveling. I'm here at right now, and 341 00:19:12,840 --> 00:19:16,000 Speaker 1: it is so much more impactful being here in person 342 00:19:16,080 --> 00:19:19,080 Speaker 1: than it would be doing doom meetings. You know everything 343 00:19:19,119 --> 00:19:21,680 Speaker 1: that you know, the magic happens at dinners or at 344 00:19:21,720 --> 00:19:24,800 Speaker 1: a happy hour, meeting someone for a drink, that's where 345 00:19:24,800 --> 00:19:26,679 Speaker 1: things really happen. You get to know pi where you 346 00:19:26,720 --> 00:19:33,200 Speaker 1: build relationships, and that is human nature hasn't changed. Technology 347 00:19:33,280 --> 00:19:36,200 Speaker 1: is great, but just like video conferencing didn't kill business 348 00:19:36,240 --> 00:19:38,480 Speaker 1: travel back in the eighties when Bob Crandell was worried 349 00:19:38,480 --> 00:19:42,480 Speaker 1: about it. Uh, it's not gonna kill it now. One 350 00:19:42,520 --> 00:19:46,359 Speaker 1: final question. Lisa is really focused in on this s 351 00:19:46,480 --> 00:19:49,359 Speaker 1: f OO is c d G. She wants to take 352 00:19:49,400 --> 00:19:54,679 Speaker 1: the seven Dreamliner. How bad are you getting killed on 353 00:19:54,880 --> 00:19:58,600 Speaker 1: fuel costs for Lisa to go first class s FO 354 00:19:58,760 --> 00:20:02,560 Speaker 1: to c d G. Yeah, well, you know, fuel prices 355 00:20:02,600 --> 00:20:05,399 Speaker 1: are up. There are biggest there are biggest cost in 356 00:20:05,560 --> 00:20:08,520 Speaker 1: but um, but we're glad to be getting back to 357 00:20:08,600 --> 00:20:12,640 Speaker 1: flying from San France to Paris and all the other markets. Uh. 358 00:20:12,680 --> 00:20:15,160 Speaker 1: And love welcoming the customers on board. And I can 359 00:20:15,160 --> 00:20:18,400 Speaker 1: tell you having phone for International in the last week there, 360 00:20:18,600 --> 00:20:23,080 Speaker 1: everybody on board is excited, employees, customers. If it's palpable 361 00:20:23,119 --> 00:20:24,800 Speaker 1: when you get on board of the International fly, do 362 00:20:24,880 --> 00:20:27,399 Speaker 1: you call Muhammad Larian like at the end of every 363 00:20:27,440 --> 00:20:31,480 Speaker 1: month and thank him for flying United? Dr Larry and Cambridge. 364 00:20:31,720 --> 00:20:35,119 Speaker 1: He only flies United. He like literally won't go unless 365 00:20:35,160 --> 00:20:37,720 Speaker 1: you know he goes there. Well, I I will now 366 00:20:37,760 --> 00:20:40,359 Speaker 1: that you told me that. I think one of our 367 00:20:40,400 --> 00:20:44,639 Speaker 1: other biggest flyers secretary carry last night, because we have 368 00:20:44,760 --> 00:20:47,399 Speaker 1: we have a lot of those. Uh yeah, Scott Kirby, 369 00:20:47,440 --> 00:20:50,159 Speaker 1: thank you so much, greatly appreciate it. Right now, the 370 00:20:50,240 --> 00:20:55,000 Speaker 1: CEO they're ringing a bell for Scott Kirby the the 371 00:20:55,520 --> 00:21:04,040 Speaker 1: end of the pandemic. Perhaps we are who we are, 372 00:21:04,359 --> 00:21:08,600 Speaker 1: David Rubinstein. This is a star football player whose career 373 00:21:08,720 --> 00:21:12,280 Speaker 1: ended early, and this is someone who was ever framed 374 00:21:12,640 --> 00:21:17,159 Speaker 1: by the horrific mining accident of Farmington, West Virginia in 375 00:21:17,280 --> 00:21:22,280 Speaker 1: nineteen Who is Joe Manchin And what do the Washington 376 00:21:22,359 --> 00:21:28,760 Speaker 1: elite not understand about him? Well? I think they don't 377 00:21:28,840 --> 00:21:31,760 Speaker 1: understand that he is in a state that's heavily Republican, 378 00:21:32,200 --> 00:21:34,800 Speaker 1: and though he's a Democrat and he was Democratic governor 379 00:21:34,840 --> 00:21:39,080 Speaker 1: as well, the state went for President Trump overwhelmingly, and 380 00:21:39,160 --> 00:21:41,960 Speaker 1: therefore I just don't think you can expect him to 381 00:21:42,000 --> 00:21:45,479 Speaker 1: be doing whatever the Democratic Party leadership wants. He is 382 00:21:45,840 --> 00:21:47,679 Speaker 1: a Democrat and he's not going to switch to being 383 00:21:47,680 --> 00:21:51,480 Speaker 1: a Republican. But he's very independent and he's not dependent 384 00:21:51,560 --> 00:21:54,639 Speaker 1: on the Democratic leadership for his power base. Do you 385 00:21:54,800 --> 00:21:57,879 Speaker 1: since David, and this is after the election, to be 386 00:21:58,040 --> 00:22:04,080 Speaker 1: unfair that he is in close conversation with Democratic moderates 387 00:22:04,080 --> 00:22:11,160 Speaker 1: who are shell shocked. Yes, absolutely, Um, I think he's 388 00:22:11,200 --> 00:22:14,719 Speaker 1: saying to them, and I think he believes that the 389 00:22:14,760 --> 00:22:17,800 Speaker 1: election in Virginia showed that you can go too far 390 00:22:17,840 --> 00:22:20,000 Speaker 1: to the left, and that's what he thinks probably happened 391 00:22:20,040 --> 00:22:22,400 Speaker 1: in Virginia. So what he's trying to do is to say, 392 00:22:22,400 --> 00:22:24,520 Speaker 1: we don't need to have some of these policies that 393 00:22:24,560 --> 00:22:27,080 Speaker 1: are spending a lot of money. We shouldn't, he believes 394 00:22:27,200 --> 00:22:29,960 Speaker 1: very strongly, and not giving people more what he would 395 00:22:29,960 --> 00:22:34,400 Speaker 1: call handouts or more gifts from the government in his view. Uh, 396 00:22:34,400 --> 00:22:36,440 Speaker 1: and really we should pay for some of the things 397 00:22:36,520 --> 00:22:39,679 Speaker 1: that we are paying that we're trying to get through legislation, 398 00:22:39,880 --> 00:22:41,840 Speaker 1: and right now we're not really paying for it. And 399 00:22:41,880 --> 00:22:44,679 Speaker 1: he doesn't favor increasing taxes either. He would favor not 400 00:22:44,720 --> 00:22:47,960 Speaker 1: having these programs. But he is a very personable person. 401 00:22:48,359 --> 00:22:51,480 Speaker 1: I've known him for a long time. Uh, he's very intelligent, 402 00:22:51,800 --> 00:22:55,520 Speaker 1: he's very engaging. He just happens to have a views 403 00:22:55,560 --> 00:22:58,440 Speaker 1: that are a little more conservative than Democratic Party leadership, 404 00:22:58,640 --> 00:23:01,720 Speaker 1: and a little bit more conservative then maybe some other 405 00:23:01,760 --> 00:23:03,760 Speaker 1: people in Washington would like him to be. But he's 406 00:23:03,800 --> 00:23:07,640 Speaker 1: reflecting his constituency. Remember it's a constituency does a very 407 00:23:07,640 --> 00:23:10,640 Speaker 1: Republican and Uh he could probably win as the state 408 00:23:10,640 --> 00:23:12,639 Speaker 1: if he if he switched to a Republican, which is 409 00:23:12,640 --> 00:23:14,320 Speaker 1: not going to do, he could probably get elected as 410 00:23:14,320 --> 00:23:16,680 Speaker 1: a Republican. He's very popular, but he's also trying to 411 00:23:16,720 --> 00:23:19,680 Speaker 1: reflect the views of his state. David. Does he enjoy 412 00:23:19,800 --> 00:23:26,399 Speaker 1: his power. I've met very few people that don't enjoy 413 00:23:26,440 --> 00:23:28,520 Speaker 1: their power in Washington, d C. So I would think 414 00:23:28,560 --> 00:23:31,000 Speaker 1: he probably does enjoy it. He doesn't run around saying, 415 00:23:31,160 --> 00:23:33,920 Speaker 1: look how powerful I am. But when you are as 416 00:23:33,920 --> 00:23:35,840 Speaker 1: powerful as he as he is, and I don't think 417 00:23:35,840 --> 00:23:39,000 Speaker 1: I've ever seen a person who's not in the leadership, 418 00:23:39,200 --> 00:23:41,480 Speaker 1: not the majority leader, a minority leader, have as much 419 00:23:41,480 --> 00:23:43,840 Speaker 1: power as he has. He has much more power now 420 00:23:44,040 --> 00:23:46,959 Speaker 1: to affect the outcome of major legislation than anybody I 421 00:23:47,000 --> 00:23:48,920 Speaker 1: know other than a majority leader or a minority leader 422 00:23:48,960 --> 00:23:51,160 Speaker 1: or the Speaker of the House. Enormous amount of power, 423 00:23:51,359 --> 00:23:53,160 Speaker 1: and I think he probably does enjoy it. Why would 424 00:23:53,200 --> 00:23:55,800 Speaker 1: he not? Does he plan to use it? Just launch 425 00:23:55,840 --> 00:24:03,359 Speaker 1: into something else politically? Say President Uh to be realistic 426 00:24:03,400 --> 00:24:05,600 Speaker 1: about it. I don't think that's that that can happen. 427 00:24:05,640 --> 00:24:07,800 Speaker 1: I mean, and he wouldn't say that it can happen. Remember, 428 00:24:07,840 --> 00:24:10,680 Speaker 1: he's now, I think, in his early to mid seventies, 429 00:24:10,920 --> 00:24:14,440 Speaker 1: and while that's young for some presidents, you might say, Um, 430 00:24:14,480 --> 00:24:16,840 Speaker 1: he would not be about that attractive to the Democratic 431 00:24:16,920 --> 00:24:20,280 Speaker 1: Party UH primaries in my view, because he'd probably be 432 00:24:20,320 --> 00:24:22,800 Speaker 1: too much of a moderate to do when in the primaries, 433 00:24:23,000 --> 00:24:26,119 Speaker 1: and I therefore think it's unrealistic. Um, he is not 434 00:24:26,280 --> 00:24:28,879 Speaker 1: likely to run again for governor in my view. I 435 00:24:28,880 --> 00:24:30,880 Speaker 1: think he's pretty happy in the Senate, So I think 436 00:24:30,880 --> 00:24:32,800 Speaker 1: he's going to stay in the Senate. UH. If he 437 00:24:32,880 --> 00:24:34,919 Speaker 1: runs re election, he will be up in two years, 438 00:24:35,240 --> 00:24:37,639 Speaker 1: and he hasn't announced yet whether he'll run again. I 439 00:24:37,680 --> 00:24:40,800 Speaker 1: suspect he will, but he hasn't society yet. David, you 440 00:24:40,840 --> 00:24:44,280 Speaker 1: have studied and indeed live, the path from Mr Jones 441 00:24:44,320 --> 00:24:47,159 Speaker 1: to Mr Welch to Mr m l and on to 442 00:24:47,280 --> 00:24:50,280 Speaker 1: what we have now with Mr Kupp at General Electric. 443 00:24:50,640 --> 00:24:57,560 Speaker 1: Your thoughts on the end of GE as we knew it, Well, 444 00:24:57,600 --> 00:25:01,199 Speaker 1: it's a sad situation for American corp life. You might 445 00:25:01,720 --> 00:25:03,760 Speaker 1: think about it that way, because this is one of 446 00:25:03,800 --> 00:25:06,360 Speaker 1: the most powerful companies in the world for a long time, 447 00:25:06,359 --> 00:25:08,359 Speaker 1: and when Jack Welsh was running it, it seemed to 448 00:25:08,400 --> 00:25:11,359 Speaker 1: be the most impressive company in America. And now the 449 00:25:11,400 --> 00:25:14,000 Speaker 1: company is being broken up. Larry Colp is a very 450 00:25:14,080 --> 00:25:17,239 Speaker 1: talented executive. He did a terrific job at Danaher and 451 00:25:17,320 --> 00:25:19,359 Speaker 1: after a couple of years, if his conclusion is the 452 00:25:19,400 --> 00:25:20,879 Speaker 1: best thing to do is to break it up to 453 00:25:21,040 --> 00:25:23,480 Speaker 1: unlock value, I think he's probably made the right decision. 454 00:25:23,720 --> 00:25:26,080 Speaker 1: So it's unfortunate, but you know, time moves on, and 455 00:25:26,440 --> 00:25:29,879 Speaker 1: no company can stay as big as as g was forever. 456 00:25:30,160 --> 00:25:32,040 Speaker 1: And it really had to make some change that it 457 00:25:32,080 --> 00:25:34,239 Speaker 1: didn't make changes quickly enough, and that's why they now 458 00:25:34,280 --> 00:25:35,800 Speaker 1: have to do what they're doing. And David, do you 459 00:25:35,800 --> 00:25:37,680 Speaker 1: think that in ten twenty years we're gonna be saying 460 00:25:37,680 --> 00:25:44,240 Speaker 1: the same thing about Amazon? There very few companies that 461 00:25:44,400 --> 00:25:46,960 Speaker 1: stay at the top of the world for as long 462 00:25:47,000 --> 00:25:49,640 Speaker 1: as the g E did. Amazon could be one of them. 463 00:25:49,640 --> 00:25:51,880 Speaker 1: But Amazon is still a relatively young company. But there's 464 00:25:51,880 --> 00:25:54,800 Speaker 1: no doubt that there's gonna be more companies coming along 465 00:25:54,920 --> 00:25:56,840 Speaker 1: that we haven't heard of that are going to be 466 00:25:56,920 --> 00:25:59,560 Speaker 1: the dominant companies uh in the world. In a few years. 467 00:25:59,600 --> 00:26:03,760 Speaker 1: For example, twenty years ago, who heard of Amazon, tesla Um? 468 00:26:03,960 --> 00:26:07,280 Speaker 1: Even Apple wasn't that big a deal then, or Netflix. 469 00:26:07,280 --> 00:26:09,040 Speaker 1: So the world changes. That took one of the great 470 00:26:09,040 --> 00:26:11,000 Speaker 1: things about capitals, and you can start a company and 471 00:26:11,080 --> 00:26:13,080 Speaker 1: a few years you can make it a very powerful company. 472 00:26:13,280 --> 00:26:15,560 Speaker 1: Amazon has in pretty good shape though. I think there'll 473 00:26:15,600 --> 00:26:18,080 Speaker 1: be around for quite some time though. David Rubin saying 474 00:26:18,080 --> 00:26:21,200 Speaker 1: thank you so much, greatly appreciating and peer to peer conversations. 475 00:26:21,200 --> 00:26:24,600 Speaker 1: Look for that tonight with a timely conversation with the 476 00:26:24,640 --> 00:26:31,920 Speaker 1: Senator from West Virginia, John on this guest. We've got 477 00:26:31,920 --> 00:26:34,600 Speaker 1: to start with CPI Wednesday, but there's a whole lot 478 00:26:34,680 --> 00:26:38,360 Speaker 1: going on that Robbo Bank is truly expert at TAK. 479 00:26:38,560 --> 00:26:40,720 Speaker 1: There's a ton and I think the overwhelming story still 480 00:26:40,800 --> 00:26:43,560 Speaker 1: is to try and understand what the incoming data means 481 00:26:43,600 --> 00:26:45,800 Speaker 1: for the fence next move. Let's start that with Jane 482 00:26:45,800 --> 00:26:48,320 Speaker 1: Funny right now, head of FX Strategy at RAMA Bank. Jane, 483 00:26:48,359 --> 00:26:53,040 Speaker 1: can we begin there what the incoming data CPI this morning, payrolls, 484 00:26:53,119 --> 00:26:55,360 Speaker 1: last week, the ice M actually mean for the federal's 485 00:26:55,359 --> 00:26:59,840 Speaker 1: eve gun into next year. Well, to be honest, I 486 00:27:00,160 --> 00:27:01,879 Speaker 1: think we're going to answer the question of whether or 487 00:27:01,880 --> 00:27:04,960 Speaker 1: not a transitory is gone des by looking at to 488 00:27:04,960 --> 00:27:06,800 Speaker 1: today's data. I mean, yes, if it comes in a 489 00:27:06,800 --> 00:27:12,879 Speaker 1: lot weaker than maybe some of the less inflationary among 490 00:27:12,960 --> 00:27:14,960 Speaker 1: us are going to just to say, you know what, 491 00:27:15,000 --> 00:27:17,159 Speaker 1: this is transitory. But I think more of the answers 492 00:27:17,440 --> 00:27:19,800 Speaker 1: have got to be in the wage inflation because it's 493 00:27:19,800 --> 00:27:22,080 Speaker 1: only when we see wage inflation. If we don't see 494 00:27:22,119 --> 00:27:24,560 Speaker 1: wage inflation, that will be able to tell whether or 495 00:27:24,560 --> 00:27:27,640 Speaker 1: not there are those second round effects. You know. When 496 00:27:27,680 --> 00:27:29,040 Speaker 1: One thing that I think it's going to be really 497 00:27:29,080 --> 00:27:32,199 Speaker 1: quite thematic for for the currency markets certainly going forward 498 00:27:32,520 --> 00:27:34,720 Speaker 1: over the next over the next six months, or maybe 499 00:27:34,760 --> 00:27:37,520 Speaker 1: even beyond, is the fact that not all labor markets 500 00:27:37,560 --> 00:27:40,200 Speaker 1: are the same. They are very different. You have more flexibility, 501 00:27:40,240 --> 00:27:42,720 Speaker 1: for instance, in the US probably going to have more 502 00:27:42,760 --> 00:27:45,040 Speaker 1: wage inflation, and yet that's not going to be a 503 00:27:45,080 --> 00:27:47,399 Speaker 1: pattern that we see elsewhere, and that is going to 504 00:27:47,520 --> 00:27:50,879 Speaker 1: be really important in trying to judge interest rate differentials 505 00:27:50,880 --> 00:27:54,280 Speaker 1: and effects going forward. Jenny's you understand better than most 506 00:27:54,440 --> 00:27:57,200 Speaker 1: most things are solved in economics with the calendar. Just time, 507 00:27:57,400 --> 00:27:59,320 Speaker 1: let it pass. For the Chairman of the Federal Reserve, 508 00:27:59,359 --> 00:28:01,199 Speaker 1: I wonder how much time is on his side, and 509 00:28:01,200 --> 00:28:03,920 Speaker 1: how you balance what we're seeing on wages which picked 510 00:28:04,000 --> 00:28:06,840 Speaker 1: up still below inflation in America, but wages picking up 511 00:28:06,840 --> 00:28:09,520 Speaker 1: at the same time the participation rate in America is 512 00:28:09,600 --> 00:28:14,240 Speaker 1: not How do you balance those two things, Jane, Well, 513 00:28:14,320 --> 00:28:16,600 Speaker 1: that's exactly the problem. In the US. You have a 514 00:28:16,680 --> 00:28:19,840 Speaker 1: very flexible labor market. The participation rate has dropped. People 515 00:28:19,840 --> 00:28:22,480 Speaker 1: have fallen out of the labor market, and therefore you're 516 00:28:22,480 --> 00:28:24,960 Speaker 1: going to have or we've seen wage pressures as firms 517 00:28:24,960 --> 00:28:27,639 Speaker 1: scowring around trying to find labor. Now you go to 518 00:28:27,680 --> 00:28:30,119 Speaker 1: a country like Japan, it's not the same sort of 519 00:28:30,200 --> 00:28:33,960 Speaker 1: labor market. Firms tend to hoard labor. You don't have 520 00:28:34,080 --> 00:28:37,320 Speaker 1: firm scowing around trying to find workers because they already 521 00:28:37,320 --> 00:28:40,400 Speaker 1: have them. And that's probably a situation more work into 522 00:28:40,400 --> 00:28:43,560 Speaker 1: what we have in Europe too, So at Legard for instance, 523 00:28:43,560 --> 00:28:46,400 Speaker 1: that remaining quite davish, expecting that inflation is going to 524 00:28:46,440 --> 00:28:48,920 Speaker 1: be more transitory. Well, maybe the answer to that maybe 525 00:28:48,920 --> 00:28:51,640 Speaker 1: the differences in the labor market. Similarly, you can you 526 00:28:51,680 --> 00:28:54,680 Speaker 1: can see differences in the labor market in Australia too. 527 00:28:54,720 --> 00:28:57,440 Speaker 1: They haven't had the same reactions in the US. So 528 00:28:57,680 --> 00:28:59,880 Speaker 1: in the US, yeah, we're potentially going to see an 529 00:29:00,000 --> 00:29:02,720 Speaker 1: interest rate hike. We think at the end of next year, 530 00:29:02,760 --> 00:29:05,640 Speaker 1: maybe around December. Obviously some people thinking it's going to 531 00:29:06,000 --> 00:29:09,560 Speaker 1: come earlier. But that's not going to be necessarily the 532 00:29:09,640 --> 00:29:13,040 Speaker 1: same dynamic that you see elsewhere for those of you 533 00:29:13,200 --> 00:29:15,720 Speaker 1: on radio, and you can see it clearly on TV. 534 00:29:15,960 --> 00:29:19,080 Speaker 1: Jane folio is at the Rabble Bank London desk. That 535 00:29:19,240 --> 00:29:22,480 Speaker 1: is a desk of the Netherlands. And what's important here 536 00:29:22,560 --> 00:29:26,280 Speaker 1: John and Lisa with the inflation argument is Robbo Bank 537 00:29:26,520 --> 00:29:31,560 Speaker 1: is absolute ground zero for the food industry hedging in 538 00:29:31,640 --> 00:29:36,160 Speaker 1: the world. They own it from forward. Jane, you have 539 00:29:36,320 --> 00:29:40,640 Speaker 1: a view of food inflation like not one single person 540 00:29:41,080 --> 00:29:44,200 Speaker 1: we talked to. What do you observe it, Robbo Bank 541 00:29:44,600 --> 00:29:52,320 Speaker 1: about food inflation, hedging and speculation dynamics right now? Well, 542 00:29:52,360 --> 00:29:54,720 Speaker 1: to be honest, I we take that back into energy 543 00:29:54,720 --> 00:29:56,920 Speaker 1: and awful lot of food companies like it, well sort 544 00:29:56,960 --> 00:30:00,520 Speaker 1: of manufacturers have big factories and energy but picularly in 545 00:30:00,720 --> 00:30:03,720 Speaker 1: Europe parts of Asia has been a real problem this year. 546 00:30:03,760 --> 00:30:05,880 Speaker 1: So an awful lot of people trying to hedge that energy, 547 00:30:06,360 --> 00:30:09,480 Speaker 1: trying not to pass those costs onto the consumer. But 548 00:30:09,640 --> 00:30:12,000 Speaker 1: they are probably coming. So we are seeing that sort 549 00:30:12,040 --> 00:30:15,200 Speaker 1: of inflation coming through. And this is this is why, 550 00:30:15,320 --> 00:30:17,760 Speaker 1: of course central banks or various central banks are going 551 00:30:17,800 --> 00:30:20,880 Speaker 1: to be going to be cautious, because even if wages 552 00:30:21,120 --> 00:30:23,960 Speaker 1: go up, if you've got food inflation or energy inflation 553 00:30:24,000 --> 00:30:26,800 Speaker 1: going up by more of a pace, you're still going 554 00:30:26,840 --> 00:30:31,200 Speaker 1: to have real wage depreciation. And that's not the sort 555 00:30:31,240 --> 00:30:34,240 Speaker 1: of thing that's central banks high interest rates into. So 556 00:30:34,720 --> 00:30:38,800 Speaker 1: this whole dynamic is really quite complex and really quite fascinating, 557 00:30:38,840 --> 00:30:41,720 Speaker 1: and I think that's going to be the situation next year. 558 00:30:41,760 --> 00:30:43,560 Speaker 1: So some more volatility. I think at the short end 559 00:30:43,560 --> 00:30:45,880 Speaker 1: of the curve Gene, why isn't the dollar stronger given 560 00:30:45,880 --> 00:30:50,160 Speaker 1: the back draft you just laid out, I think there's 561 00:30:50,200 --> 00:30:51,960 Speaker 1: a lot of good news in the price. So for instance, 562 00:30:51,960 --> 00:30:54,120 Speaker 1: if we go back to June, I think June for me, 563 00:30:54,240 --> 00:30:56,640 Speaker 1: the done FMC was really interesting because that's when we 564 00:30:56,680 --> 00:30:59,240 Speaker 1: saw that big movement in the dock plots of various 565 00:30:59,280 --> 00:31:02,360 Speaker 1: f WEGM seen was relative too much. That's when we 566 00:31:02,440 --> 00:31:04,680 Speaker 1: began to see this dollar rally. Now, the dollar really 567 00:31:04,680 --> 00:31:07,160 Speaker 1: has been on the front foot. It's been rallying, you know, 568 00:31:07,200 --> 00:31:10,120 Speaker 1: since June. It's it's it's it's gained ground. And I 569 00:31:10,160 --> 00:31:11,960 Speaker 1: think at this point in time, there's a lot of 570 00:31:12,000 --> 00:31:13,640 Speaker 1: news in the price. And when you've got a lot 571 00:31:13,640 --> 00:31:15,840 Speaker 1: of good news in the price and in terms of 572 00:31:15,880 --> 00:31:18,800 Speaker 1: the fair et cetera, well you know, how much more 573 00:31:18,960 --> 00:31:21,360 Speaker 1: can the dollar go. You're also looking at a situation 574 00:31:21,360 --> 00:31:25,320 Speaker 1: where we see risk appetite, certainly for US stocks really benefiting. 575 00:31:25,360 --> 00:31:27,880 Speaker 1: So you've got the dollar gaining and risk appetite for 576 00:31:28,000 --> 00:31:30,760 Speaker 1: for stocks gaining too. And I think perhaps that's not 577 00:31:31,000 --> 00:31:33,960 Speaker 1: a natural dynamic, and perhaps that's something which has has 578 00:31:34,040 --> 00:31:36,320 Speaker 1: has maybe forced some of the bullishness out of the 579 00:31:36,400 --> 00:31:38,440 Speaker 1: US dollar as well. You said it, Jane, what a 580 00:31:38,480 --> 00:31:41,040 Speaker 1: fascinating moment this is. It's great to explore it with 581 00:31:41,120 --> 00:31:49,920 Speaker 1: your Jaane Farley There, Ramma Bank, it's a different Disney 582 00:31:50,000 --> 00:31:52,000 Speaker 1: John and you know, I guess they're waiting for Mandalorian 583 00:31:52,040 --> 00:31:54,320 Speaker 1: and streaming and a John. Did you watch Mandalorian? I 584 00:31:54,360 --> 00:31:56,960 Speaker 1: did not. Yeah, it's it's you know, it's cappy. It's 585 00:31:57,000 --> 00:31:59,120 Speaker 1: like there and we're all waiting for it. Okay, should 586 00:31:59,120 --> 00:32:00,960 Speaker 1: we talk to an expert? We should probably think we 587 00:32:00,960 --> 00:32:04,560 Speaker 1: should do that. Michael Michael Nathans and joining a senior 588 00:32:04,600 --> 00:32:08,840 Speaker 1: analyst at Marfat Nathans and with Craig mafat Definitive. Here, Michael, 589 00:32:08,880 --> 00:32:12,160 Speaker 1: I want to talk about Disney on this conference call 590 00:32:12,400 --> 00:32:15,520 Speaker 1: in the fear they have over the streamers. I've got 591 00:32:15,600 --> 00:32:19,640 Speaker 1: Apple and Culver City over five hundred thousand square feet, 592 00:32:20,000 --> 00:32:24,360 Speaker 1: doubling employee count to three thousand something, Netflix with three 593 00:32:24,400 --> 00:32:27,280 Speaker 1: hundred thousand square feet. They've got a million square feet 594 00:32:27,280 --> 00:32:30,600 Speaker 1: in l A. How scared is Disney about the new 595 00:32:30,680 --> 00:32:34,479 Speaker 1: streamers joining them in l A. I don't think Disney 596 00:32:34,480 --> 00:32:37,920 Speaker 1: is scared about competition. I think Disney is gonna be 597 00:32:37,960 --> 00:32:41,040 Speaker 1: focused on how can they accelerate their growth because in 598 00:32:41,080 --> 00:32:43,520 Speaker 1: the past couple of quarters has been a slowdown at Disney. 599 00:32:43,520 --> 00:32:46,480 Speaker 1: Plus I don't you know, I think there's enough room 600 00:32:46,560 --> 00:32:49,520 Speaker 1: for Disney probably to win, and they need to talk 601 00:32:49,560 --> 00:32:53,280 Speaker 1: to us about what they're seeing, why there's a slowdown, 602 00:32:53,760 --> 00:32:56,600 Speaker 1: or whether they're gonna do about it. Okay, what are 603 00:32:56,600 --> 00:32:59,120 Speaker 1: they gonna do about it? I mean Disney is here, 604 00:32:59,160 --> 00:33:01,880 Speaker 1: They're coming out of a pandemic. They get x thousand 605 00:33:01,880 --> 00:33:04,960 Speaker 1: people at Shanghai Disney. You know, COVID and Shine and 606 00:33:04,960 --> 00:33:07,760 Speaker 1: all that. What does your crystal ball see or is 607 00:33:07,760 --> 00:33:11,920 Speaker 1: it like a massive opportunity coming out of the pandemic 608 00:33:12,160 --> 00:33:17,200 Speaker 1: to buy pandemic affected Disney. You know, we're neutral, truly neutral, 609 00:33:17,240 --> 00:33:21,600 Speaker 1: because I think the stock last year more than compensated 610 00:33:21,600 --> 00:33:24,400 Speaker 1: for the streaming opportunity in the park recovery, and for 611 00:33:24,440 --> 00:33:26,280 Speaker 1: the past twelve months or so, it's it's just been 612 00:33:26,280 --> 00:33:29,320 Speaker 1: trading water. Our thesis is that to spend a lot 613 00:33:29,400 --> 00:33:32,040 Speaker 1: more money on content. Maybe that's to your Appling and 614 00:33:32,120 --> 00:33:37,240 Speaker 1: Netflix point, that there's so much great content available that 615 00:33:37,520 --> 00:33:38,920 Speaker 1: the only way you get stub to this point is 616 00:33:38,920 --> 00:33:41,880 Speaker 1: by spending more money and content building awareness, trying to 617 00:33:41,920 --> 00:33:44,240 Speaker 1: have a breakthrough head. Disney has done a great job 618 00:33:44,280 --> 00:33:47,280 Speaker 1: gang in this level. In order to grow further, they 619 00:33:47,320 --> 00:33:49,800 Speaker 1: need a lot more content. Um, you know, they have 620 00:33:49,880 --> 00:33:52,880 Speaker 1: to have a flywheel spinning faster. They don't then they've 621 00:33:52,880 --> 00:33:55,640 Speaker 1: done so far. They've also got to consolidate what they own. 622 00:33:55,880 --> 00:33:58,280 Speaker 1: And Michael, now you're focused on this, how did they 623 00:33:58,360 --> 00:34:00,640 Speaker 1: leverage Huluk? What do you make spanking them to do 624 00:34:00,680 --> 00:34:04,320 Speaker 1: in the coming months? Courts Okay, so Hulu is a 625 00:34:04,400 --> 00:34:07,400 Speaker 1: JV between them and Comcast. In two years, they have 626 00:34:07,520 --> 00:34:10,479 Speaker 1: the right to buy it back. Rethink they'd be smart 627 00:34:10,560 --> 00:34:13,359 Speaker 1: to buy back sooner and try to create a more 628 00:34:13,520 --> 00:34:17,920 Speaker 1: unified Disney bundle. You know Who's on its own Apple 629 00:34:18,000 --> 00:34:22,120 Speaker 1: Island and Disney Plus has allen. You put him together, um, 630 00:34:22,200 --> 00:34:24,919 Speaker 1: and you create one single application where you can get 631 00:34:24,920 --> 00:34:28,480 Speaker 1: Who and Disney Plus UM and basically try to push 632 00:34:28,520 --> 00:34:31,479 Speaker 1: more people to the bundle than's Disney and Who plus 633 00:34:32,200 --> 00:34:34,600 Speaker 1: Disney Plus and Who. They have to buy it from 634 00:34:34,680 --> 00:34:39,080 Speaker 1: Comcast UM. I'm sure they're talking to them now about it. 635 00:34:39,080 --> 00:34:41,440 Speaker 1: It's not going to be cheap to do it, but 636 00:34:41,480 --> 00:34:44,000 Speaker 1: they need to. Basically, we've find we've had the research 637 00:34:44,080 --> 00:34:47,840 Speaker 1: is at Disney Plus has done. It's not well penetrated 638 00:34:47,880 --> 00:34:51,440 Speaker 1: amongst older viewers. It's done a great job among kids, 639 00:34:51,760 --> 00:34:55,080 Speaker 1: families and fans of their content. But for the older 640 00:34:55,120 --> 00:34:58,960 Speaker 1: viewer that's not a Disney Disney fan that wants gen 641 00:34:59,080 --> 00:35:02,120 Speaker 1: entertainment content need to do more and putting it together 642 00:35:02,120 --> 00:35:05,640 Speaker 1: with Hulu more closely probably could drive penetration. So we're 643 00:35:05,640 --> 00:35:09,279 Speaker 1: expecting something in the next two years before actually the 644 00:35:09,320 --> 00:35:12,920 Speaker 1: timetables up to try to consolidate the position. It is 645 00:35:12,960 --> 00:35:15,320 Speaker 1: this for a biggest slice for Bigger Pie or Michael. 646 00:35:15,360 --> 00:35:17,439 Speaker 1: Could that be in a hate this term the Netflix killer, 647 00:35:17,480 --> 00:35:19,319 Speaker 1: but could that be something that hurts Netflix if the 648 00:35:19,360 --> 00:35:23,000 Speaker 1: likes of Disney can diversify the content slate beyond that 649 00:35:23,080 --> 00:35:27,920 Speaker 1: narrow demographic you described. Yeah, So our our view is 650 00:35:27,960 --> 00:35:31,759 Speaker 1: like Netflix is a base a based consumer choice, but 651 00:35:31,840 --> 00:35:33,640 Speaker 1: as time goes on, what you're seeing is more people 652 00:35:33,640 --> 00:35:36,960 Speaker 1: are adding more services on top of Netflix. Our Netflix 653 00:35:36,960 --> 00:35:39,080 Speaker 1: nesis you know we've been running on the stock is 654 00:35:39,480 --> 00:35:42,719 Speaker 1: that content is not monopoly, that it's impossible to have 655 00:35:42,760 --> 00:35:46,399 Speaker 1: a monopoly position and content and the competition and Tom 656 00:35:46,400 --> 00:35:49,719 Speaker 1: talked about you're talking about to us impacts Netflix is 657 00:35:50,160 --> 00:35:53,240 Speaker 1: the time spent in Netflix, Netflix, the price and power, 658 00:35:53,760 --> 00:35:57,600 Speaker 1: maybe the cost of doing business. So ultimately more competition 659 00:35:57,680 --> 00:36:01,080 Speaker 1: I would think would have some negative packed on Netflix's 660 00:36:01,080 --> 00:36:04,680 Speaker 1: ability to raise prices and to compete. But in the 661 00:36:04,719 --> 00:36:07,920 Speaker 1: past twelve to fifty months, the pandemic has really slowed 662 00:36:07,920 --> 00:36:10,799 Speaker 1: down the ability to compete because you can't. You had 663 00:36:11,000 --> 00:36:14,680 Speaker 1: a good two months slowdown with no content is produced, 664 00:36:14,880 --> 00:36:17,400 Speaker 1: and Netflix had a massive advantage. So for us, the 665 00:36:17,440 --> 00:36:20,080 Speaker 1: next one to two years will be a catch up 666 00:36:20,160 --> 00:36:22,839 Speaker 1: on spending for all these companies that couldn't compete during 667 00:36:22,880 --> 00:36:25,080 Speaker 1: the pandemic. Michael, when you talk about the fact that 668 00:36:25,160 --> 00:36:30,400 Speaker 1: Disney Plus hasn't really penetrated the older individuals, the older households. 669 00:36:30,680 --> 00:36:34,359 Speaker 1: Are they fully penetrated with the younger households with those 670 00:36:34,440 --> 00:36:38,560 Speaker 1: that have children? Lisa, obviously no. You know, Netflix is 671 00:36:38,560 --> 00:36:43,440 Speaker 1: about penetrated across the board. Disney added best penetration rates 672 00:36:43,440 --> 00:36:47,840 Speaker 1: about so there's room to go amongst you know, the 673 00:36:47,960 --> 00:36:50,680 Speaker 1: core demo, So there's definitely room to go. But then 674 00:36:50,800 --> 00:36:53,680 Speaker 1: as we show, it drops off dramatically, So yeah, there's 675 00:36:53,800 --> 00:36:56,480 Speaker 1: upside going to the core, and then they have to 676 00:36:56,520 --> 00:36:58,720 Speaker 1: expand past the corn. That's what we want to hear about, 677 00:36:58,840 --> 00:37:01,000 Speaker 1: you know, and there is cultivate endings a little bit later, Mark, 678 00:37:01,040 --> 00:37:04,320 Speaker 1: before you go, what was meta about? We haven't spoken 679 00:37:04,400 --> 00:37:06,399 Speaker 1: since then? What was that about? What are you telling? 680 00:37:06,920 --> 00:37:09,200 Speaker 1: What is that? Exactly? By the way, we have a 681 00:37:09,239 --> 00:37:16,640 Speaker 1: buying Facebook right exactlete. What's meta about? Meta is about 682 00:37:16,760 --> 00:37:21,719 Speaker 1: a world in which Facebook could, um try to have 683 00:37:21,920 --> 00:37:23,880 Speaker 1: more control live or not over the world they have 684 00:37:24,000 --> 00:37:26,040 Speaker 1: now right where it's it's it's a it's a universe 685 00:37:26,080 --> 00:37:30,839 Speaker 1: where there will be commerce, they'll be communication, um, there'll 686 00:37:30,840 --> 00:37:35,600 Speaker 1: be games, and Facebook's trying to basically have a leading 687 00:37:35,680 --> 00:37:38,719 Speaker 1: position in that world. We've done some Mark on this 688 00:37:39,239 --> 00:37:42,920 Speaker 1: recovery the gaming industry. We think gaming will lead, and 689 00:37:42,960 --> 00:37:46,040 Speaker 1: I'm not sure that Facebook actually have a position they 690 00:37:46,160 --> 00:37:48,960 Speaker 1: want to have in this business. The other thing, Jonathan, 691 00:37:49,080 --> 00:37:50,960 Speaker 1: is it was a way to take the turn of 692 00:37:51,000 --> 00:37:55,160 Speaker 1: investment dollars, classify it and we can now separate that 693 00:37:55,280 --> 00:37:57,839 Speaker 1: from the core Facebook earnings number, and we can say 694 00:37:57,880 --> 00:37:59,920 Speaker 1: to you and everyone else, look how cheap Facebook is. 695 00:38:00,040 --> 00:38:03,120 Speaker 1: It's meta. If you ever met a no value at all, 696 00:38:03,360 --> 00:38:05,880 Speaker 1: which we do, the core business is actually a lot 697 00:38:05,960 --> 00:38:08,440 Speaker 1: more properly you think. But yeah, we'll talk to you 698 00:38:08,520 --> 00:38:11,080 Speaker 1: in three to five to ten years about meta um 699 00:38:11,320 --> 00:38:13,279 Speaker 1: and we don't evaluate at all. But it's helped us, 700 00:38:13,880 --> 00:38:17,000 Speaker 1: you know, clarify the valuation. I look forward to it. 701 00:38:17,120 --> 00:38:20,319 Speaker 1: It's a world Tom where regulates us like us politicians. 702 00:38:21,080 --> 00:38:22,480 Speaker 1: I want to sit around a table with us in 703 00:38:22,520 --> 00:38:25,239 Speaker 1: sharra drink. Michael Nathan said thank you, sir. Michael Niceton 704 00:38:25,239 --> 00:38:27,200 Speaker 1: said a muffit next and said thank you very much. 705 00:38:27,600 --> 00:38:31,359 Speaker 1: This is the Bloomberg Surveillance Podcast. Thanks for listening. Join 706 00:38:31,480 --> 00:38:34,800 Speaker 1: us live weekdays from seven to ten am Eastern on 707 00:38:34,920 --> 00:38:39,120 Speaker 1: Bloomberg Radio and on Bloomberg Television each day from six 708 00:38:39,280 --> 00:38:44,080 Speaker 1: to nine am for insight from the best in economics, finance, investment, 709 00:38:44,280 --> 00:38:49,239 Speaker 1: and international relations. And subscribe to the Surveillance podcast on 710 00:38:49,360 --> 00:38:53,200 Speaker 1: Apple podcast, SoundCloud, Bloomberg dot com, and of course, on 711 00:38:53,320 --> 00:38:57,400 Speaker 1: the terminal. I'm Tom Keene, and this is Bloomberg.