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Speaker 1: Welcome to the Bloomberg Penel Podcast. I'm Paul Swinge You,

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Speaker 1: along with my co host Lisa Brahma Waits. Each day

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Speaker 1: we bring you the most noteworthy and useful interviews for

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Speaker 1: you and your money, whether at the grocery store or

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Speaker 1: the trading floor. Find a Bloomberg penl podcast on Apple

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Speaker 1: podcast or wherever you listen to podcasts, as well as

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Speaker 1: at Bloomberg dot com. Time to check in with Bloomberg Opinion.

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Speaker 1: We're joined by Bloomberg Opinion columnists Bob Burgess. He's an

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Speaker 1: editor of Bloomberg Opinion, joining us here in our Bloomberg

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Speaker 1: Interactive Broker studio. Bob, I think I speak for Lisa

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Speaker 1: and most of our audience when I say, over the

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Speaker 1: last two or three days, we've all had to brush

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Speaker 1: up on the Repo market. What does it mean? Is

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Speaker 1: it important? Do I care? So, Bob? Do I care

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Speaker 1: about what's going on in the repo Market's been kind

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Speaker 1: of scorely the last few days? Yes, and no. I

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Speaker 1: think that um when people here that there's just locations

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Speaker 1: going on in the Repo market, they have nightmares and

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Speaker 1: flashbacks back to the financial crests, right, because this is

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Speaker 1: one area that really royal markets. But there's a sense

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Speaker 1: that was going on in the repo market now UH

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Speaker 1: is much different than what happened back then. Now it's

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Speaker 1: more of a technical move that we're seeing where you

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Speaker 1: have a confluence events coming together that is pushing up

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Speaker 1: these overnight borrowing costs. Back then, borrowing costs arising because

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Speaker 1: banks didn't trust each other, which was a major problem.

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Speaker 1: It's not really the reason why repo rates are rising

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Speaker 1: right now. I guess that it gets to the heart

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Speaker 1: of this real fear in markets right now. Will there

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Speaker 1: be sort of a winning out of the global slowdown

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Speaker 1: that will UH plunge a hole in the equity rally

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Speaker 1: or will we see some sort of everything rally continue

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Speaker 1: which we have been seeing. And I guess this is

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Speaker 1: something you addressed in a recent column. We're talking about

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Speaker 1: what markets need for this everything rally for bondstocks, currencies, commodities,

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Speaker 1: everything to rally together. So what is it that they need?

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Speaker 1: Right you know? This is one of those are years.

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Speaker 1: You have the global stock market, the global bomb market,

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Speaker 1: the global commodities market, and currency of returns all poised

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Speaker 1: to deliver positive returns for the first time since two

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Speaker 1: thousand ten Um Bank of America recently came out with

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Speaker 1: their monthly survey of institutional clients, and they identify three

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Speaker 1: things that would likely keep the as you put it,

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Speaker 1: the everything rally going. One of those is German fiscal

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Speaker 1: stimulus UH. The second is a fifty basis point rate

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Speaker 1: cut from the Federal Reserve, and the third is Chinese

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Speaker 1: infrastructure spending. But when you look at it, it looks

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Speaker 1: like only two of those three things are likely to happen. Um.

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Speaker 1: The Germans UM, instead of talking about borrowing UH to

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Speaker 1: blow out his budget for infra, for phisical spending, it's

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Speaker 1: actually talking about sticking with a balanced budget. UM. So

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Speaker 1: the Germans are steer, So we're not gonna get any

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Speaker 1: fiscal spending from the Germans. I'm not shocked at all.

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Speaker 1: Nobody else I think should be shocked at all. As

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Speaker 1: as as well UM. The second thing, the fifty basis

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Speaker 1: point rate cut from the thread, is increasingly looking less

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Speaker 1: likely by the hour. Um. You know, there's even a

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Speaker 1: couple of strategies reports out over the past couple of days.

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Speaker 1: I says, maybe the Fed shouldn't even cut rates, mainly

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Speaker 1: because of the consumer is relatively strong in the US.

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Speaker 1: You know, Brown Brothers Harriman is one firm that says,

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Speaker 1: maybe the FED shouldn't cut rates. So a fifty basis

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Speaker 1: point rate cut is definitely off the table. Might get

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Speaker 1: twenty five basis point rate cut today. We'll see what

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Speaker 1: they say about the outlook. The third point Chinese different

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Speaker 1: structure spending that's actually happening. Um, you know, the Chinese

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Speaker 1: recently introduced a proposal to allow local municipalities to sell

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Speaker 1: bonds to increase your infrastructure. So the bottom line is

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Speaker 1: the outlook for global risk assets seem to be dimming

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Speaker 1: at the point. So, Bob, it is uh FED day today.

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Speaker 1: It's not just REPO day, it's actually FED a rate

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Speaker 1: decision day. If the FED were to come out with

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Speaker 1: the you know, perhaps something less devilish, a little bit

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Speaker 1: more Hawker saying, hey, the data is not is actually

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Speaker 1: pretty solid. We're pretty good where we are. I'm not

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Speaker 1: sure the markets are prepared for that. I would agree.

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Speaker 1: I think the markets have been um have been anticipating

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Speaker 1: a very devilish FED. But look at the housing starts

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Speaker 1: data that came out to this morning. I mean, you know,

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Speaker 1: the biggest monthly increase in housing starts since since two

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Speaker 1: thousand seven, uh, consumer spending has been surprisingly strong. Uh

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Speaker 1: So there are these metrics that suggest that the economy

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Speaker 1: is doing pretty good. That said, we know from history

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Speaker 1: that the consumers can lose confidence pretty quickly. If you

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Speaker 1: look at every recession going back to at the very

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Speaker 1: beginning of the recession is when the unemployment rate reached

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Speaker 1: its bottom. Okay, so don't be fooled by a I

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Speaker 1: want to employment rate saying the economy is strong. If

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Speaker 1: companies feel that the outlook is getting dimmer, they'll start

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Speaker 1: laying off workers, that unemployment rate will shoot up, and

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Speaker 1: that's when you'll see consumers start pulling back. How much

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Speaker 1: do you think that equity markets would sell off if

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Speaker 1: the Fed indicate yes, they're going to cut twenty five

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Speaker 1: bases points today, but going forward, who knows? You know,

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Speaker 1: it's it's it's it's hard to say. But if you

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Speaker 1: look at the rally this year in the U S

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Speaker 1: stock market, the sp up, that's despite UM economists forecasting

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Speaker 1: recession coming next year. That's despite strategists actually cutting their

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Speaker 1: earnings estimates for this year. So how do you explain that? Well,

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Speaker 1: the the only way you can explain the rally and

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Speaker 1: the stock market this year is from ever lower interest rates. Right,

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Speaker 1: simple discounted cash flow analysis suggests that you know future

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Speaker 1: earnings are more valuable now when you assign a lower

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Speaker 1: interest rate. If the Fed says maybe interest rates aren't

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Speaker 1: going to be as low as and Wark is expecting,

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Speaker 1: there's going to need to be a reprising Bob Bridgess,

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Speaker 1: thank you so much for being with us. Bob Bridges

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Speaker 1: as editor for Bloomberg Opinion, Joining us here in our

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Speaker 1: Bloomberg Interactive Broker Studios. US home construction surged in August

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Speaker 1: to the fastest pace since mid two thousand seven, showing

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Speaker 1: ongoing strength and accelerating strength on the heels of lower

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Speaker 1: mortgage rates. What does this mean for the United States

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Speaker 1: housing market? Joining us here to discuss Melissa Reagan, head

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Speaker 1: of US research for now Vina real Estate, which oversees

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Speaker 1: a hundred and twenty five billion dollars of assets. Melissa

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Speaker 1: joins us here in our Interactive Broker Studios to Melissa,

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Speaker 1: can you just give us a sense of the increase

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Speaker 1: in home construction? How do you see this sort of

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Speaker 1: in the bigger picture and what's going on in how

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Speaker 1: builders are responding to lower mortgage rates. Yeah, sure, absolutely,

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Speaker 1: so I think the numbers are really strong. Housing starts

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Speaker 1: up six point six percent year over year August twelve

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Speaker 1: percent during the month. I really focus in on the

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Speaker 1: multi family market and that was extremely strong as well,

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Speaker 1: with it like four hundred and forty five thousand starts,

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Speaker 1: And wasn't that kind of driving it was the apartment

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Speaker 1: building like that. So the majorities driven by single family.

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Speaker 1: So if he's in context of that, one point three

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Speaker 1: six four million, uh nine and like nineteen was single family,

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Speaker 1: and then the fot was was multi family. Um. So

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Speaker 1: when you put in that context, I think a lot

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Speaker 1: of it was driven by immigration in kind of the

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Speaker 1: southern regions, and you think at the southeast southwest, that's

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Speaker 1: where you saw a lot of really strong demand, and

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Speaker 1: that's completely consistent with where you're seeing population in very

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Speaker 1: strong levels of immigration. Right You've probably read the headlines

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Speaker 1: population is actually falling in places like San Francisco, New York,

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Speaker 1: UM to some extent l A. And I think this

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Speaker 1: is a reflection of that and very strong to me

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Speaker 1: and from multi family. Uh. Just as people still continue

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Speaker 1: to want to rent, So is this strong housing market

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Speaker 1: that we've been seeing. Is it just simply a function

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Speaker 1: of everybody's got a job and mortgage rates are low

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Speaker 1: and appear to be coming lower And are those the

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Speaker 1: two main drivers? Partly? Right? So I look at it,

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Speaker 1: that's definitely true. On the single family home starts angle

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Speaker 1: of it. Uh morgates are low. But you also have

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Speaker 1: to remember from that perspective, I think you need to

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Speaker 1: put in context. You know, a single family starts peaked

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Speaker 1: at like one point seven million right before the crisis, right,

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Speaker 1: so this is so pretty low in a historical content

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Speaker 1: from a peak perspective. From a multi family perspective, starts

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Speaker 1: are actually I'm wouldna say historically high, but they've been

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Speaker 1: elevated for a while. And that is definitely due to

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Speaker 1: strong in migration demand for rentals, the millennials, you know,

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Speaker 1: not being able to afford a home at this point.

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Speaker 1: So he's all kind of one and the same, the

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Speaker 1: homeownership versus the rental single family starts being down from

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Speaker 1: their peak, It's it's all interrelated, so to speak. Well,

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Speaker 1: uh So, Paul and I were in Nashville not so

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Speaker 1: long ago, and I was struck by all of the

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Speaker 1: construction cranes in downtown Nashville, which makes sense given the

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Speaker 1: fact that a number of businesses are moving from places

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Speaker 1: like New York to Nashville, and there certainly is outmigration

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Speaker 1: from the bigger cities to places like Nashville. At what

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Speaker 1: point is it over building, right? I mean, especially if

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Speaker 1: there is somewhat of a downturn and the jobs remain

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Speaker 1: in the big cities and some of these other ones

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Speaker 1: do lose out like we saw in two thousand and

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Speaker 1: eight and two thousand nine. Yeah, absolutely, I think. Listen,

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Speaker 1: I think the big cities will They're not going anywhere,

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Speaker 1: and so somebody who the headlines get a little overstated

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Speaker 1: of population film and they try to make the same

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Speaker 1: dramatic big cities are not going anywhere to the extent

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Speaker 1: what I do think has happened in places like Nashville's.

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Speaker 1: They have changed who they are from fifteen years ago.

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Speaker 1: So Nashville and you can think of Charlotte, Raleigh, Austin

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Speaker 1: all being in that same kind of category fifteen or

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Speaker 1: twenty years ago did not have the vibrancy the people,

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Speaker 1: the businesses, and today they do, and I think they

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Speaker 1: will have staying power in a downturn in the next cycle.

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Speaker 1: Um but yes, to the extent that you want to

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Speaker 1: have a certain job, right, think about finance, that's that's

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Speaker 1: largely going to still be in New York. So, you know,

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Speaker 1: we're ten plus years into this economic cycle. So yet

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Speaker 1: you know, the real estate, the consumer is still strong.

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Speaker 1: How are you, Folcus at Novine on your real estate investments?

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Speaker 1: How are you kind of positioning yourselves now? I mean,

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Speaker 1: at some point this has all got to end. We

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Speaker 1: you know, it's not that long ago that we still

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Speaker 1: have the memories of the financial crisis and there in

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Speaker 1: the real estate issues. So how are you guys positioning

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Speaker 1: your portfolios? Yeah, I think at this point you realize

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Speaker 1: you're you're late in the cycle. And I think that's

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Speaker 1: just consensus at this point. We all we all know that.

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Speaker 1: And so what we do is we think about the

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Speaker 1: sectors we want to be in that we think will

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Speaker 1: actually provide us with a protection in a downturn. So

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Speaker 1: some of us have been more of the alternative property

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Speaker 1: types which tend to still grow in a downturn. Alternative

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Speaker 1: alternative Yeah, so when even so, you can think of

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Speaker 1: self storage, or you can think of senior housing, or

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Speaker 1: you can think of manufactured house at it things that

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Speaker 1: that actually do pretty well in the downturn, just because

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Speaker 1: of the demand drivers. At the same time, when you

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Speaker 1: think about apartments or offices, industrial or retail, we just

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Speaker 1: get more selective UM and we get really focused on

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Speaker 1: making sure we're focused on high quality location. Price. Obviously

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Speaker 1: UM is a factor in that as well, So you

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Speaker 1: just narrow down the opportunity set and be you'd be

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Speaker 1: more selective in the investment process. One thing I'm trying

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Speaker 1: to understand is the amount of money getting raised for

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Speaker 1: real estate funds at this point in the credit cycle.

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Speaker 1: Because you're saying it's consensus, we're late cycle. Why is Blackstone,

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Speaker 1: for example, raising an unprecedented amount of money for commercial

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Speaker 1: real estate? Uh, and you see a whole other host

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Speaker 1: of fund managers doing the same. Is this for now

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Speaker 1: or is this for a downturn? I do think in

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Speaker 1: some sense, if you're an investor who looks at it

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Speaker 1: from a multi asset perspective, If you're an investor who

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Speaker 1: has stocks, bonds, and then you think about real estate

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Speaker 1: or real asset, what you think about is in a downturn,

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Speaker 1: real estate or real assets can provide me with some

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Speaker 1: pure diversification relative to my stocker bond portfolio. And I

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Speaker 1: think there's a lot of that going on. And I

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Speaker 1: think investors saying, hey, I've probably been under allocated to

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Speaker 1: real estate real assets, you know, for probably twenty years now,

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Speaker 1: and it's time to start helping that allocation, you know,

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Speaker 1: to call it ten or fifteen percent of my portfolio.

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Speaker 1: It's almost just a pure diversification play of nothing else.

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Speaker 1: Is there any sense that the commercial or real estate

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Speaker 1: or residential real estate market is overheating at all at

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Speaker 1: the moment? Yeah, you know, there's been a lot of

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Speaker 1: discussion about that for probably five years now. I would say,

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Speaker 1: I mean really, um and and because people have seen

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Speaker 1: the cranes in Nashville for more than five years now,

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Speaker 1: and so you have a lot of those questions. The

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Speaker 1: demand has kept up, So from an apartment perspective, you

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Speaker 1: still have rents growing above inflation. Demand is there. You

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Speaker 1: do see oversupply in certain pockets of the southern regions

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Speaker 1: like a Dallas or a Houston. And um, but by

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Speaker 1: and large, I would say supply de man have kept

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Speaker 1: in sync, so really strong demand for apartments even with

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Speaker 1: the supply just quickly here, which market do you see

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Speaker 1: as having the most potential upside here in the US

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Speaker 1: at this point. That's a great question. UM. We're really

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Speaker 1: favoring some of the more tech driven markets. UM. You

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Speaker 1: could think of San Francisco, l A, San Diego, Portland. UM.

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Speaker 1: But we also like some of the southern regions too. UM.

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Speaker 1: I still think there'd be good demand in migration in

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Speaker 1: places like Nashville, UM, who have really changed their stripes

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Speaker 1: of who they are as a city. Melissa Reagan, thank

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Speaker 1: you so much for joining us. Melissa's the head of

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Speaker 1: US research for Moving real Estate with about a hundred

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Speaker 1: and twenty five billion dollars under management on the real

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Speaker 1: estate side. She joins us here in our Bloomberg Interactor

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Speaker 1: Broker studio. We saw again more evidence today with a

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Speaker 1: new housing starts and new uh. You know, the real

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Speaker 1: estate market in the US remains very solid. Well, it

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Speaker 1: is FED day, but it's not your typical FED day.

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Speaker 1: Instead of obsessing over what we might hear from the

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Speaker 1: Fed this afternoon, we're talking about a little known part

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Speaker 1: of the capital markets, and that is the overnight federal

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Speaker 1: repo market. They get the latest. We welcome Hugh Nicola,

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Speaker 1: Principal and head of fixed Income at gent Trust with

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Speaker 1: about two billion dollars under management, and Alex Harris, Bond

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Speaker 1: reporter for Bloomberg News, both joining us here in our

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Speaker 1: Bloomberg Interactive Broker Studio. So Alex, let's start with you.

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Speaker 1: Just give us the latest on what is going on

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Speaker 1: with this three day story about the federal repo market. Um. Well,

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Speaker 1: so it kind of had started building actually last Friday.

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Speaker 1: You were starting to hear about withdrawals from the money

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Speaker 1: market funds to cover that corporate tax payment. And then

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Speaker 1: Monday everything kind of came to a head because you

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Speaker 1: had collateral coming in and so from these treasury coupon

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Speaker 1: auction settlements. Um. But then you know, there's some X

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Speaker 1: factors and things that we're still trying to sort through.

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Speaker 1: There were rumors flying around about you know, Saudi Arabia

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Speaker 1: pulling cash out of the funding markets to shore you know,

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Speaker 1: their liquidity after the attacks. You were you know, so

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Speaker 1: I'm hearing a few different things, but ultimately that was

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Speaker 1: sort of the crux of it is a supply demand

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Speaker 1: and balance, and so you repo got really unstable, and

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Speaker 1: with it, it just pulled all these other rates up,

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Speaker 1: the security overnight financing rate, which regulators are looking at

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Speaker 1: is sort of the air presumptive to Liebor shot up.

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Speaker 1: And even today, you know, the setting for as of

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Speaker 1: yesterday was five five point five percent. That was a

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Speaker 1: two basis point move. And then more concerning is that

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Speaker 1: the FED funds rate, the FEDS policy target rate moved

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Speaker 1: out of the range. Today it's at two thirty and

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Speaker 1: the FEDS benchmark range is two to two and a

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Speaker 1: quarter percent. And that's more concerning here. And even though

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Speaker 1: repo's starting to sort of normalize, things are calming down.

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Speaker 1: What's what's more worrisome in long run is that the

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Speaker 1: FED has lost control. It's the perception that the FED

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Speaker 1: has lost control of the benchmark and of policy and

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Speaker 1: the transmission mechanism. And so I think that's now what

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Speaker 1: the meeting becomes today is you know what kind of

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Speaker 1: steps is Jerome Powell on the FOMC gonna take here

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Speaker 1: to kind of you know, help keep you know, the

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Speaker 1: FED funds rate within its target range and keep things

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Speaker 1: sort of under control and controlling the short term interest rates. Hugh,

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Speaker 1: how are you viewing the rebot disruption of this week? So, um,

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Speaker 1: first of all, thank you for having me here. Um

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Speaker 1: I don't think uh in you know, in ah in summery,

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Speaker 1: I don't think it's a huge deal, right, I mean,

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Speaker 1: we need to worry about this market, right, I mean

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Speaker 1: there is an important market for the financial industry, right,

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Speaker 1: I mean, for it's a lifeblood essentially financing of the

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Speaker 1: of the financial industry. So we've got to keep an

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Speaker 1: eye on if there are issues with liquidity or if

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Speaker 1: there's some break in the system. We need to know

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Speaker 1: what's going on. But that being said, you know, this

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Speaker 1: isn't a problem that the Fed isn't was unaware of.

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Speaker 1: I mean they talked about essentially a repo facility and

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Speaker 1: premier repo facility in UM in June, putting it in place.

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Speaker 1: They knew that they were drawing down on access reserves

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Speaker 1: over time. I mean that's been a long standing trend

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Speaker 1: we've seen reserves coming down, So we knew reserves were

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Speaker 1: leaving the system. Um So, I think the shock was

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Speaker 1: just how dramatic it was. Right So um, as Alex mentioned,

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Speaker 1: you had essentially the auctions that settled on Monday, you

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Speaker 1: also had talked corporate tax payments, took a lot of

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Speaker 1: money on the system, and suddenly you see reaper rates

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Speaker 1: up eight. Just to be clear, as we talked about this,

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Speaker 1: for people who don't know what repro rates are, aren't

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Speaker 1: familiar with what we're actually talking about. It's basically banks

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Speaker 1: offering treasuries other high quality securities. Uh, it's a sort

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Speaker 1: of as collateral for cash from other firms, and basically

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Speaker 1: because there wasn't enough cash on the balance sheets of

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Speaker 1: these other firms, they were demanding a much bigger premium

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Speaker 1: for that cash. Right, just to sort of lay this

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Speaker 1: out there, to give people sense of what we're talking

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Speaker 1: about exactly, it's a collateralized loan, right, So Okay, I mean,

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Speaker 1: I think it's important to think about this because basically

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Speaker 1: that's why people are talking about a cash crunch, because

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Speaker 1: there was not enough physical cash on the balance sheets

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Speaker 1: of other firms to make this a sort of seamless process, right,

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Speaker 1: I mean that's yes, well, I mean, but the other

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Speaker 1: issue is is that you also have to think about

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Speaker 1: it from the collateral side that there is. You know,

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Speaker 1: one of the takeaways from this is just there are

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Speaker 1: just too many treasuries in the system, and this is

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Speaker 1: a problem because treasuries pile of debt is only gonna grow.

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Speaker 1: I don't see anything about deficit reductions. I don't see

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Speaker 1: anything about debt reduction, Like that's only going to continue

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Speaker 1: to grow. And that's why people are really now getting

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Speaker 1: nervous about the fourth quarter, because treasury bill supply is

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Speaker 1: going to resume its March higher treasuries cash buffer is

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Speaker 1: going to continue to grow, and that actually pulls reserves

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Speaker 1: out of the system. So, like you talked about, with this,

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Speaker 1: you know, reserve scarcity level with the Fed, it becomes

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Speaker 1: a bit more problematic because you're really hitting those precarious

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Speaker 1: levels and that's what the market is really worried about

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Speaker 1: going forward. So he does this affect your kind of

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Speaker 1: overall investing view in any way, shape or form, or

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Speaker 1: you kind of viewing everything the same way you did before?

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Speaker 1: You know, I think the Fed, uh, we'll have a

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Speaker 1: handle on this. I mean, we'll bound the scene announcement

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Speaker 1: today on something um particularly with the meeting coming up

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Speaker 1: later today. So no, I'm not worried. Uh right now,

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Speaker 1: I'm not worried. It doesn't really affect us per se.

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Speaker 1: How does this affect investors in general? It's essentially if

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Speaker 1: this kind of panic bleeds into other markets, right, and

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Speaker 1: then from other financial markets into the real economy. That's

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Speaker 1: the worried. Um. I think we've got to handle on

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Speaker 1: it right now. So no, not concerned at the moment.

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Speaker 1: Are you buying bonds or do you think yields go lower?

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Speaker 1: Well on this new I wouldn't. I'm not buying it's

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Speaker 1: not in this but just in general, you know, Um,

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Speaker 1: you know, I've been on the mind that you you

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Speaker 1: buy dips because I think that it seems recently that

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Speaker 1: you know that a lot of once first we had

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Speaker 1: a lot of good news for bonds, trade war being

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Speaker 1: good news for bonds, and then we had UH and

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Speaker 1: then we had to sell off, we had some negative news.

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Speaker 1: So it's difficult to see that this that the trade

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Speaker 1: ward tweeting, et cetera won't continue and won't ramp up

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Speaker 1: at some stage, and that you know, I like bonds.

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Speaker 1: Hugh Nicola, thank you so much for being with us.

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Speaker 1: Principle and had a fixed income at gen Trust, overseeing

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Speaker 1: about two billion dollars. Of course he likes bonds. He

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Speaker 1: focuses on fixed income, although it doesn't necessarily translate always.

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Speaker 1: Alex Harris, thank you so much for being with us.

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Speaker 1: Bloomberger News Bond reporter, explaining how the report market is

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Speaker 1: kind of affecting everything right now. Well, diversity in the

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Speaker 1: workplace continues to be a challenge for most industries, including

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Speaker 1: the financial services industries. I think at the latest we

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Speaker 1: welcome Tracy Davies. She's President of Money based in London,

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Speaker 1: but joining us here in our Bloomberg Interactive Broker studio.

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Speaker 1: So Tracy, thanks so much for joining us. And I've

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Speaker 1: spent most of my career in the financial services industry,

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Speaker 1: and I've seen the challenge of promoting and creating diversity

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Speaker 1: in the workplace, and I know the industry tries very hard,

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Speaker 1: has been doing it, you know what, I think a

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Speaker 1: pretty good job. But still at the highest levels there's

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Speaker 1: probably isn't the proper representation of women, for example, What

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Speaker 1: do you think is going on in the financial services industry? Yeah, well,

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Speaker 1: I think the financial services industry is not alone. There

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Speaker 1: are there are many industries, and not a problem just

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Speaker 1: for this industry. Um, it does seem to be a

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Speaker 1: little off pace though compared to say some of the industries,

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Speaker 1: like my industry in the media. If you look at

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Speaker 1: the Lady stats, I think we've got in the US

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Speaker 1: about the exact committees now women versus thirty now that

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Speaker 1: we've gone through in the UK, so I think there

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Speaker 1: is still I mean it's not fifty fifty, so there's

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Speaker 1: still work to them. But you're right, there are a

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Speaker 1: lot of companies making a lot of progress and I

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Speaker 1: think that's really important and really exciting. So I think

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Speaker 1: we are seeing a shift new and there's actually gonna

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Speaker 1: be an emphasis on this at the at the Money

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Speaker 1: conference focused on fintech and of the financial services. It's

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Speaker 1: upcoming in October. Can you talk a little bit about that. Yeah,

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Speaker 1: So we have a whole program dedicated to this called

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Speaker 1: rise Up, which is about empowering women um and enabling

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Speaker 1: them to the next step. There's a load of talented

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Speaker 1: women out there. We run a program to accelerate. So

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Speaker 1: we did this last year. It's our second year. Last

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Speaker 1: year's cohort, thirty three percent have been promoted into more

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Speaker 1: senior roles. So we see that as direct legacy of

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Speaker 1: launching rise Up and inspiring and connecting them because what

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Speaker 1: we do is we connect them to senior folk in

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Speaker 1: the industry, senior mentors. This is a really important thing.

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Speaker 1: So when we are seeing progress, that's interesting you talk

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Speaker 1: about that the mentorship, and that's something that's very important

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Speaker 1: for for everyone in all walks of life, was certainly

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Speaker 1: in business. Do women have a particular challenge kind of

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00:22:47,880 --> 00:22:51,400
Speaker 1: creating those relationships and getting that kind of support. Yeah.

431
00:22:51,440 --> 00:22:53,959
Speaker 1: I think what we see is not just financial services,

432
00:22:53,960 --> 00:22:57,760
Speaker 1: but generally women I think spend less time invest in networks,

433
00:22:58,280 --> 00:23:00,800
Speaker 1: and that's one of the really important things that we drive.

434
00:23:01,200 --> 00:23:04,439
Speaker 1: We enable that network connection, but invest more time in

435
00:23:05,400 --> 00:23:08,520
Speaker 1: building your network. I think there's a really interesting debate

436
00:23:08,560 --> 00:23:12,800
Speaker 1: around sponsorship and networking and mentoring, and women seem to

437
00:23:12,880 --> 00:23:15,640
Speaker 1: have less sponsors in organizations, and so I know that's

438
00:23:15,640 --> 00:23:19,760
Speaker 1: a real focus from some organizations. Mentoring and sponsoring are different,

439
00:23:20,160 --> 00:23:22,959
Speaker 1: um but we've seen great results, so we're super pleased.

440
00:23:23,200 --> 00:23:25,280
Speaker 1: So let's talk a little bit about this conference in

441
00:23:25,280 --> 00:23:28,880
Speaker 1: October being hosted by Money twenty. It's going to focus

442
00:23:29,040 --> 00:23:33,280
Speaker 1: on financial technologies, and I think immediately of how well

443
00:23:33,359 --> 00:23:35,399
Speaker 1: Square and Stripe and some of these other companies have

444
00:23:35,440 --> 00:23:37,600
Speaker 1: done so far this year, I'm wondering, what do you

445
00:23:37,600 --> 00:23:40,200
Speaker 1: think will be sort of the buzzword of the conference

446
00:23:40,240 --> 00:23:43,680
Speaker 1: this year. Well, there's always a lot to talk about.

447
00:23:43,680 --> 00:23:45,960
Speaker 1: I think there's a couple of really big ones that

448
00:23:46,000 --> 00:23:48,919
Speaker 1: are standing out at the moment. So there's a we

449
00:23:49,119 --> 00:23:52,119
Speaker 1: see there's a big focus on digital banking now in

450
00:23:52,160 --> 00:23:54,280
Speaker 1: the in the US, so we've got CEOs of Chime

451
00:23:54,359 --> 00:23:58,639
Speaker 1: and twenty six that's coming from Europe Grasshopper. So we're

452
00:23:58,640 --> 00:24:00,960
Speaker 1: seeing a lot of the new banks, the neo banks,

453
00:24:00,960 --> 00:24:03,080
Speaker 1: the digital banks. I think that's a big talking difference

454
00:24:03,080 --> 00:24:05,840
Speaker 1: between a digital bank and a bank that has online presence.

455
00:24:06,160 --> 00:24:09,120
Speaker 1: Well there are no branches and they're often very very

456
00:24:09,160 --> 00:24:12,440
Speaker 1: digitally based and a based, so they don't have branches.

457
00:24:12,560 --> 00:24:16,920
Speaker 1: Okay um. So the other big talking point is obviously

458
00:24:17,119 --> 00:24:21,280
Speaker 1: the developments around Facebook and Calibra. We've announced last week.

459
00:24:21,320 --> 00:24:23,560
Speaker 1: David Marcus is speaking, so I think that's going to

460
00:24:23,600 --> 00:24:25,200
Speaker 1: be a big talking point. There's a lot of people

461
00:24:26,000 --> 00:24:28,720
Speaker 1: interested to know what that's all about. So I think

462
00:24:28,840 --> 00:24:32,240
Speaker 1: they're two really big talking points this year. And we

463
00:24:32,280 --> 00:24:34,320
Speaker 1: do have Strike speaking as well, so we'll gabri it,

464
00:24:34,359 --> 00:24:38,000
Speaker 1: we'll speak. So we just see constant innovation here in

465
00:24:38,040 --> 00:24:40,320
Speaker 1: the US, but we do this around the world. You

466
00:24:40,359 --> 00:24:43,080
Speaker 1: know this there is it is changing. We just see

467
00:24:43,119 --> 00:24:45,760
Speaker 1: constant change coming through in a good way for the consumer.

468
00:24:45,800 --> 00:24:47,680
Speaker 1: I think Lisa and I a couple of weeks ago

469
00:24:47,720 --> 00:24:51,040
Speaker 1: spent some time at a fintech conference in Boston. We

470
00:24:51,200 --> 00:24:53,200
Speaker 1: learned a lot. One of the things we we heard

471
00:24:53,560 --> 00:24:56,119
Speaker 1: was that there is a lot of investment in technology

472
00:24:56,600 --> 00:24:58,720
Speaker 1: in the financial services industry. We even you know, we're

473
00:24:58,720 --> 00:25:00,800
Speaker 1: here from the government to access of on the JP

474
00:25:00,840 --> 00:25:04,639
Speaker 1: Morgan's But how about some of the smaller midsize financial institutions.

475
00:25:04,680 --> 00:25:06,760
Speaker 1: Are they at risk of not of kind of getting

476
00:25:06,800 --> 00:25:10,639
Speaker 1: lost because they don't maybe have the capabilities to wherewithal

477
00:25:10,760 --> 00:25:13,880
Speaker 1: to make the big technological invention investments. Yeah, I mean,

478
00:25:13,920 --> 00:25:16,320
Speaker 1: I think I when we see companies of all scale,

479
00:25:16,320 --> 00:25:17,760
Speaker 1: and it's one of the things that you see coming

480
00:25:17,760 --> 00:25:20,600
Speaker 1: out of money tween twenties, people making those connections. So

481
00:25:20,680 --> 00:25:23,360
Speaker 1: whether they're obviously there's a lot talked about the large companies,

482
00:25:23,640 --> 00:25:25,840
Speaker 1: but you know a lot of the mid sized companies

483
00:25:26,240 --> 00:25:29,040
Speaker 1: working with the right startups. So much about this industry

484
00:25:29,080 --> 00:25:31,840
Speaker 1: is about partnerships and finding those partnerships. So it's exactly

485
00:25:31,880 --> 00:25:34,600
Speaker 1: why money was created, so you can have the big,

486
00:25:34,640 --> 00:25:36,800
Speaker 1: the small, the middle. That's what we do. You have

487
00:25:36,840 --> 00:25:39,560
Speaker 1: over ten thousand people in Vegas in October and they're

488
00:25:39,560 --> 00:25:42,560
Speaker 1: all they're working out who to work with. It's so

489
00:25:42,640 --> 00:25:44,840
Speaker 1: I think there is as much opportunity. You think about

490
00:25:45,000 --> 00:25:46,879
Speaker 1: who to work with, and you think about getting in

491
00:25:47,280 --> 00:25:49,040
Speaker 1: a room and saying, you know, should we work together?

492
00:25:49,080 --> 00:25:51,480
Speaker 1: It might work. I also think of consolidation and somebody

493
00:25:51,520 --> 00:25:54,080
Speaker 1: coming and saying I want to buy you. How much

494
00:25:54,119 --> 00:25:56,760
Speaker 1: more of that kind of activity do you expect. Yeah, well,

495
00:25:56,760 --> 00:26:00,000
Speaker 1: there's been a lot of consolidation. I think the two

496
00:26:00,080 --> 00:26:02,199
Speaker 1: This one was confirmed this morning, so you know, we

497
00:26:02,320 --> 00:26:05,040
Speaker 1: do see there's been some consolidation in payments, but that's

498
00:26:05,040 --> 00:26:08,560
Speaker 1: about getting global scale. This is a global industry. There's

499
00:26:08,600 --> 00:26:11,040
Speaker 1: a lot of global opportunity out there. So we've seen

500
00:26:11,080 --> 00:26:14,520
Speaker 1: some very big ones, um you know, so it's been

501
00:26:14,680 --> 00:26:17,080
Speaker 1: quite a talking point this year. You know, M and

502
00:26:17,119 --> 00:26:19,120
Speaker 1: A is a fact of life, so we may see

503
00:26:19,160 --> 00:26:21,119
Speaker 1: some more, but we've seen some big ones in here.

504
00:26:21,160 --> 00:26:23,160
Speaker 1: But it's about global scale because there's a really big

505
00:26:23,160 --> 00:26:26,520
Speaker 1: global opportunity. Payments is a really hot sector. People want

506
00:26:26,520 --> 00:26:28,199
Speaker 1: to be in it and they want global scale, and

507
00:26:28,240 --> 00:26:30,960
Speaker 1: that's what the consolidation has been about. How important was

508
00:26:30,960 --> 00:26:35,359
Speaker 1: it that Libra came into the marketplace in terms of

509
00:26:35,400 --> 00:26:39,200
Speaker 1: maybe validating the whole blood chain or financially you know

510
00:26:39,280 --> 00:26:42,159
Speaker 1: digital payments sound important? Was it? I think it's an

511
00:26:42,160 --> 00:26:44,679
Speaker 1: important development. I think there's a lot of debate about it.

512
00:26:44,720 --> 00:26:46,760
Speaker 1: I mean that debate is you know, it's only been

513
00:26:46,760 --> 00:26:50,240
Speaker 1: announced quite recently, this development. There's a lot of interests

514
00:26:50,240 --> 00:26:53,239
Speaker 1: from regulators. You've had the hearings here, So I think

515
00:26:53,280 --> 00:26:55,119
Speaker 1: it's a big talking point. I think people are still

516
00:26:55,160 --> 00:26:56,880
Speaker 1: trying to work their way through what does this mean,

517
00:26:57,000 --> 00:26:59,639
Speaker 1: what's the impact going to be, etcetera, etcetera. So it's

518
00:26:59,640 --> 00:27:02,199
Speaker 1: a big oaking point, although there is also a larger question,

519
00:27:02,200 --> 00:27:05,040
Speaker 1: which is our crypto assets, cryptocurrency is going to be

520
00:27:05,119 --> 00:27:10,520
Speaker 1: more into integral in the entire uh fintech world. Yeah,

521
00:27:10,560 --> 00:27:13,080
Speaker 1: I mean that debate is going to run. It's going

522
00:27:13,119 --> 00:27:15,840
Speaker 1: to be a big debate money. That's what we're there

523
00:27:15,880 --> 00:27:18,719
Speaker 1: to do. You know, we we're in neutral platform. We

524
00:27:18,760 --> 00:27:21,080
Speaker 1: make sure that this debate gets hosted, which is why

525
00:27:21,280 --> 00:27:25,520
Speaker 1: having David Marcus speak money is very important to us.

526
00:27:25,840 --> 00:27:28,440
Speaker 1: Thank you so much for being with us, really very

527
00:27:28,480 --> 00:27:32,399
Speaker 1: Tracy Davies is joining as president of Money twenty twenty,

528
00:27:32,560 --> 00:27:35,360
Speaker 1: which is going to be held in Las Vegas at

529
00:27:35,359 --> 00:27:40,680
Speaker 1: the Venetian October seven through October. More than ten thou

530
00:27:40,840 --> 00:27:44,639
Speaker 1: people have already registered fintech. As we've heard and Tracy mentioned,

531
00:27:44,720 --> 00:27:49,240
Speaker 1: it is a very hot area. Payments, digital payments, fintech

532
00:27:49,280 --> 00:27:52,159
Speaker 1: in general, uh, really attracting a lot of investor interest.

533
00:27:52,520 --> 00:27:54,760
Speaker 1: Thanks for listening to the Bloomberg P and L podcast.

534
00:27:54,920 --> 00:27:57,520
Speaker 1: You can subscribe and listen to interviews at Apple Podcasts

535
00:27:57,600 --> 00:28:00,679
Speaker 1: or whatever podcast platform you prefer. Paul Sweeney, I'm on

536
00:28:00,720 --> 00:28:03,399
Speaker 1: Twitter at pt Sweeney. I'm Lisa Abram Wohits. I'm on

537
00:28:03,400 --> 00:28:06,280
Speaker 1: Twitter at Lisa Abram whits one. Before the podcast, you

538
00:28:06,280 --> 00:28:08,840
Speaker 1: can always catch us worldwide. I'm Bloomberg Radio