WEBVTT - Bloomberg Surveillance TV: February 5th, 2026

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<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio news.

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<v Speaker 2>This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along

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<v Speaker 2>with Lisa Bromwitz and Amrie Hordernt. Join us each day

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<v Speaker 2>for insight from the best in markets, economics, and geopolitics

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<v Speaker 2>from our global headquarters in New York City. We are

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<v Speaker 2>live on Bloomberg Television weekday mornings from six to nine

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<v Speaker 2>anywhere else you listen, and as always on the Bloomberg

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<v Speaker 2>Terminal and the Bloomberg Business app. We'll begin this out

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<v Speaker 2>with stocks adding to losses following the NASTAG one hundred's

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<v Speaker 2>biggest two day job since October. Liz Ane Sander's a

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<v Speaker 2>child swap, writing, corllage, and software stocks likely tied to

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<v Speaker 2>the nature of speculation in the AI space headlines and

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<v Speaker 2>even a slight change in the narrative can result in

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<v Speaker 2>fierce moves. Lizan joins us now for more Lizen, we

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<v Speaker 2>have seen some fierce moves, welcome to the program. We've

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<v Speaker 2>seen them in precious metals mass de leveraging there. We

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<v Speaker 2>looked at Bigcoin earlier on this morning. A break is

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<v Speaker 2>seventy thousand software more recently hammered private market firms too.

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<v Speaker 2>Is there a common thread to the deleveraging we've seen

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<v Speaker 2>in each individual pocket of the market.

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<v Speaker 3>Well, I think the deleveraging piece, John is an important

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<v Speaker 3>part of it when you look at how much leverage

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<v Speaker 3>it built into things like the gold trade and the

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<v Speaker 3>silver trade, and then the fact that you had the

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<v Speaker 3>CME raised margin requirements that pushed a lot of speculators

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<v Speaker 3>out fairly quickly. There was deleveraging there. Anytime you have

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<v Speaker 3>margin issues, raising of margin requires margin calls. That has

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<v Speaker 3>feeders into other high momentum areas. I really think one

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<v Speaker 3>of the threads too, is that rotation is the new

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<v Speaker 3>momentum trade. So there's a lot of money positioned to

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<v Speaker 3>find not just the shiny new object, but what's the

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<v Speaker 3>dull new object and kind of chase that rotation. And

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<v Speaker 3>I think we stay in that environment, probably at least

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<v Speaker 3>in the near term.

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<v Speaker 2>How much confidence can we take Lasan to your point

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<v Speaker 2>from the moves we've seen an equal white record high

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<v Speaker 2>regional bank stocks just short of all time highs. How

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<v Speaker 2>much weight can we put on that.

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<v Speaker 3>I think the broadening trade has legs because there's fundamental

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<v Speaker 3>underpinnings to it. It's not just a rotation trade. But

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<v Speaker 3>when you look at the direction of travel, you look

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<v Speaker 3>at the earnings growth rates save for the cohort that

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<v Speaker 3>is the Magnificent seven, and you compare it to the

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<v Speaker 3>other four hundred and ninety three. The growth rate for

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<v Speaker 3>the mag seven is still higher than the other four

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<v Speaker 3>in ninety three, but the direction is what matters, and

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<v Speaker 3>the direction is heading down a bit for the seven,

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<v Speaker 3>up a bit for the four ninety three. You're seeing

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<v Speaker 3>it down the cap space where you've actually got not

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<v Speaker 3>just a positive trajectory in terms of earnings growth at

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<v Speaker 3>higher levels for an index like the Rustle two thousand,

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<v Speaker 3>but a little bit more stability in that outlook as

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<v Speaker 3>opposed to high estimates and then they get pulled down

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<v Speaker 3>when you're in earning season. So I think there are

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<v Speaker 3>fundamental underpinnings the buildout of AI adding to the benefit

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<v Speaker 3>of the more cyclical areas, be it energy or industrials

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<v Speaker 3>and materials. That helps to explain the broadening out trade

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<v Speaker 3>outside of the US, because many of those more cyclical

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<v Speaker 3>areas is what dominate their economies as opposed to tech

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<v Speaker 3>having been the dominant force in our economy. So I

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<v Speaker 3>think it's a meaningful shift that probably will continue.

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<v Speaker 4>Given this meaningful shift that a lot of people are

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<v Speaker 4>pricing into a number of different assets, how do you

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<v Speaker 4>take into consideration announcement like what we got today from Challenger,

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<v Speaker 4>Gray and Christmas with the greatest number of job cut

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<v Speaker 4>announcements in a January going back to two thousand and nine.

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<v Speaker 3>Well, you know, at least you were right to point

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<v Speaker 3>out a little bit earlier that there's a concentration there

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<v Speaker 3>in terms of a small number of companies. But I

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<v Speaker 3>think this is a really well, it's a potentially important

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<v Speaker 3>data point here if it's not a one month blip

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<v Speaker 3>because much has been discussed about the low hiring, low

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<v Speaker 3>firing kind of backdrop. Obviously, ideally if that's going to break,

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<v Speaker 3>it breaks by higher hiring. But if it starts to

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<v Speaker 3>break in the other direction, I think that changes the

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<v Speaker 3>narrative around the employment picture. It may also change the

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<v Speaker 3>narrative as it relates to federal reserve policy. So if

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<v Speaker 3>you wanted to put something on the maybe the bullish

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<v Speaker 3>for the market side of the ledger, you could point

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<v Speaker 3>to that. I think it's too soon to tell. But

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<v Speaker 3>you guys also pointed out earlier that in the absence

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<v Speaker 3>of the jobs report, which of course we'll only get

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<v Speaker 3>we'll only get a few days delayed, we put more weight.

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<v Speaker 3>And when you look at the ADP data too, there

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<v Speaker 3>was meat in there. Smaller companies really under pressure. The

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<v Speaker 3>only place where job growth is robust is in those

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<v Speaker 3>more defensive areas like health services and education, with the

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<v Speaker 3>biggest draw down coming in professional and businesses services. That

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<v Speaker 3>ties into where you're seeing weakness and challenger.

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<v Speaker 4>This seems like a really mundied moment, and I really

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<v Speaker 4>just want to lean into impair this idea with the

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<v Speaker 4>leverage trades that you see unwinding and this comment that

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<v Speaker 4>you made that I think is fantastic, which is rotation

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<v Speaker 4>is a new moment um trade. Do you see a

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<v Speaker 4>potential at which you start to fade some of this

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<v Speaker 4>is broadening out in the near term, not the long term,

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<v Speaker 4>because the momentum gets ahead of itself.

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<v Speaker 5>I mean, is that sort of the.

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<v Speaker 4>Recipe for twenty twenty six is to sort of fade

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<v Speaker 4>the extremes as this rolling ball of cash just keeps

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<v Speaker 4>going to different sectors.

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<v Speaker 3>And I think there's a healthy underpinning. When you have

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<v Speaker 3>when you have sort of excess, get healed evaluation, excess,

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<v Speaker 3>speculation access via a process of rotation. I think that's

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<v Speaker 3>an easier to stomach kind of healing of those excesses

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<v Speaker 3>than if the bottom fell all at once. For instance,

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<v Speaker 3>the Nasdaq at the index level has only had a

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<v Speaker 3>four percent drawdown maximum drawdown so far this year, but

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<v Speaker 3>the average member within the Nasdaq is down just under

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<v Speaker 3>twenty percent, So you've had sort of this internal bear market.

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<v Speaker 3>It just happened and through a process of time. I

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<v Speaker 3>think probably most investors would choose that kind of twenty

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<v Speaker 3>percent draw down versus the index coming down twenty percent

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<v Speaker 3>all at once. So it's painful if you're caught on

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<v Speaker 3>the wrong side of the proverbial trade. But I think

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<v Speaker 3>that's a healthy way to go through a process of

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<v Speaker 3>healing some of this sexcess, particularly on the speculation side.

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<v Speaker 2>Stay with us more Blomberg surveillance coming up after this.

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<v Speaker 3>Plan.

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<v Speaker 2>Campex at Alphabet as much as one hundred and eighty

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<v Speaker 2>five billion dollars this year, so for twenty six that's

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<v Speaker 2>more than the previous three years combined. Who's a help

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<v Speaker 2>in this morning? Chip makers and video, AMD and Broadcom

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<v Speaker 2>looking at cash in and VideA this morning got by

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<v Speaker 2>more than one percent. Joining us now to discuss is

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<v Speaker 2>Chris Casso. It covers semiconductors for Wolf Research. Chris, Welcome

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<v Speaker 2>to the program. Let's talk about where we were yesterday

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<v Speaker 2>before we get to we are this morning. Yesterday, I

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<v Speaker 2>found like at one point that maybe the pain and

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<v Speaker 2>software is beginning to bleed into hardware, into things like

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<v Speaker 2>chips and semi's Chris, how insulted are they from developments elsewhere.

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<v Speaker 1>Well, you know that the pain and software bleeding into

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<v Speaker 1>ships doesn't make a ton of sense to us, because

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<v Speaker 1>the stocks that we cover, the semiconductor stocks, are enabling

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<v Speaker 1>the disruption that that's happening, or you know, as potentially happens. So,

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<v Speaker 1>you know, we've been pretty positive on this, and particularly

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<v Speaker 1>in the part of the space which is underperformed over

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<v Speaker 1>the last six months, which is you know, the the

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<v Speaker 1>chip makers themselves, the in Vidia, A m D, Broadcom.

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<v Speaker 1>What we've seen is the suppliers to the chip makers,

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<v Speaker 1>like memory and semiicap equipment has actually done very well,

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<v Speaker 1>but you know, in Nvidia has underperformed, and that's kind

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<v Speaker 1>of where we've pivoted a bit.

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<v Speaker 2>Now, Chris, when Alphabet comes out and says we're going

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<v Speaker 2>to spend as much as one hundred and eighty five

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<v Speaker 2>billion this year, who gets that money?

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<v Speaker 6>Who wins it?

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<v Speaker 5>Well, broad would be the biggest supplier to Google.

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<v Speaker 1>They do the chip that is Google's TPU chip, which

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<v Speaker 1>is their custom chip for AI.

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<v Speaker 5>So Broadcom is the biggest beneficiary of that.

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<v Speaker 1>But you know, we've also saw a big spending for

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<v Speaker 1>Meta as well last week. This is not just a

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<v Speaker 1>Google trend, this is a this is an overall trend.

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<v Speaker 5>How much does this.

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<v Speaker 4>Really indicate that they're going to be willing I'm talking

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<v Speaker 4>about Meta and Google and others who are the buyers

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<v Speaker 4>of the Nvidia products, of the A M D products.

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<v Speaker 4>How much are they willing to continue paying up? Is

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<v Speaker 4>this a margin story that could potentially be crimping some

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<v Speaker 4>of the dynamism in terms of the share performance?

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<v Speaker 1>Well, you know, I mean, first with regard to the spending,

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<v Speaker 1>there's been concern about can the spending continue, can it

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<v Speaker 1>grow from these levels since you know, really you know,

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<v Speaker 1>twenty twenty three when chet GBT came out and now

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<v Speaker 1>Google is spending you know, more than the entire industry

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<v Speaker 1>did back at that time. So you know, that's one

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<v Speaker 1>part of it. The where I think investors have actually

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<v Speaker 1>been a little more comfortable, and you know, Google's had

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<v Speaker 1>a good run.

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<v Speaker 5>Meta was up on that on that earnings.

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<v Speaker 1>Report despite the big capex is that the customers of

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<v Speaker 1>the companies I cover are actually starting to monetize this now.

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<v Speaker 1>So you're getting some monetization in exchange for that this.

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<v Speaker 5>Very high spending. Uh So, you know, I think the fact.

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<v Speaker 1>That the customers of the companies I cover are actually

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<v Speaker 1>making money on this gives us more confidence that the

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<v Speaker 1>spending will in fact continue.

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<v Speaker 5>How much is.

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<v Speaker 4>Google stealing in video's lunch, especially given the fact that

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<v Speaker 4>the TPU is considered a more efficient way to play

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<v Speaker 4>the AI game for a lot of different customers.

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<v Speaker 1>Well, TPU that that Google provides has been successful for

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<v Speaker 1>some time, and they still buy a lot of Nvidia chips,

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<v Speaker 1>and most of those chips go into their own cloud

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<v Speaker 1>where enterprise customers will come to the Google Cloud and

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<v Speaker 1>they want to use in video. And because in video

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<v Speaker 1>as the industry stands there, Google has to do that.

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<v Speaker 1>Where Google uses TPU more more significantly is in their

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<v Speaker 1>own internal workloads and in that, you know, the way

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<v Speaker 1>we look at the market is that market is considered

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<v Speaker 1>kind of out out of in Vidia's available market. What's

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<v Speaker 1>changed over the last couple of months is that Google

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<v Speaker 1>has also started inviting some customers like Anthropic for example,

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<v Speaker 1>to come onto their cloud and use TPU, which has

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<v Speaker 1>expanded the market some. But in general, our view is

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<v Speaker 1>that the vast majority of this market is still in

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<v Speaker 1>Vidia's domain because it's the most flexible, they have the

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<v Speaker 1>software support. It's very hard for other customers to kind

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<v Speaker 1>of get off of in Vidia. Google is a bit

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<v Speaker 1>of an exception, and it's a big exception, but for

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<v Speaker 1>the most part that this is still going to be

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<v Speaker 1>a majority market for Nvidia.

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<v Speaker 7>Is that going to change though in the future at

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<v Speaker 7>some point where in Vidia's biggest competition is actually going

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<v Speaker 7>to be Google.

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<v Speaker 1>Well, and the question is so who else is Google

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<v Speaker 1>going to be able to sell TPU too? So, you know,

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<v Speaker 1>Google is you know, significant part of the of the market,

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<v Speaker 1>but they will they start selling it to others, and

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<v Speaker 1>our view is that you know, preps some and Anthropic

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<v Speaker 1>deal is one example of that, but Google is not

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<v Speaker 1>likely to sell TPU to Amazon. They're not likely to

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<v Speaker 1>sell it to Microsoft. If you're an enterprise customer doing

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<v Speaker 1>work on even the Google Cloud, you still need in

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<v Speaker 1>VideA because in Vidia has the software support. They support

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<v Speaker 1>all the frameworks. So I think there is a competitive threat.

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<v Speaker 1>I think it's it's baked into the cake right now,

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<v Speaker 1>and I don't think that competitive threat gets much more

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<v Speaker 1>significant now. One of the other factors is that everybody

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<v Speaker 1>else is also trying to do.

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<v Speaker 5>Their own ships.

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<v Speaker 1>Meta has their own chip, Amazon has their own chip,

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<v Speaker 1>and right now, the size of those chips is much.

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<v Speaker 5>Smaller than we're in Vidia and Google is right now.

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<v Speaker 1>If those chips kind of have their TPU moment and

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<v Speaker 1>get larger, then that becomes a bigger threat, but so

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<v Speaker 1>far we haven't seen that.

0:12:08.200 --> 0:12:08.840
<v Speaker 3>Sorry about that.

0:12:09.200 --> 0:12:13.120
<v Speaker 7>So basically, if Google is ahead of Meta and all

0:12:13.120 --> 0:12:16.960
<v Speaker 7>these others that are making TPUs, who do you think

0:12:17.120 --> 0:12:21.320
<v Speaker 7>is the most competition when it comes to Google's who's

0:12:22.160 --> 0:12:23.240
<v Speaker 7>right behind them in the race.

0:12:25.160 --> 0:12:30.800
<v Speaker 1>So you know, probably the other company that's doing their

0:12:30.800 --> 0:12:34.480
<v Speaker 1>own that is probably closest would be Amazon and their

0:12:34.520 --> 0:12:38.880
<v Speaker 1>trainingum ship. And so far it's been, you know, somewhat successful,

0:12:38.880 --> 0:12:41.040
<v Speaker 1>but nowhere near as successful as Google. So I'd say

0:12:41.040 --> 0:12:43.000
<v Speaker 1>that would probably be the next one that we'd be watching.

0:12:43.559 --> 0:12:47.040
<v Speaker 2>Stay with US multilindex, Savanna's coming up off to this

0:12:56.400 --> 0:12:59.240
<v Speaker 2>at Mosa, Ryman James writes in this US eron deal

0:12:59.280 --> 0:13:01.640
<v Speaker 2>making a piss active and since there but the US's

0:13:01.720 --> 0:13:04.920
<v Speaker 2>demands will be a high bar for Tehran, Saclair joins

0:13:04.960 --> 0:13:06.679
<v Speaker 2>us now for more, ED, welcome to the program. Let's

0:13:06.679 --> 0:13:08.800
<v Speaker 2>talk about as US demands, what are they?

0:13:10.000 --> 0:13:13.200
<v Speaker 8>Well, they don't want any reactivation of the nuclear program,

0:13:13.559 --> 0:13:16.960
<v Speaker 8>as Tyler highlighted, can any support for those proxy groups

0:13:17.520 --> 0:13:22.480
<v Speaker 8>President Trump wants kind of essentially probably regime change, which

0:13:22.520 --> 0:13:24.480
<v Speaker 8>is part of the high bar that we think that

0:13:24.640 --> 0:13:28.800
<v Speaker 8>is unable to be cleared here at Raymond James, we consistently.

0:13:28.280 --> 0:13:29.400
<v Speaker 6>Get questions about this.

0:13:29.840 --> 0:13:32.280
<v Speaker 8>But one thing that we have highlighted consistently on a

0:13:32.320 --> 0:13:35.360
<v Speaker 8>lot of these high geopolitical risks out there is that

0:13:35.440 --> 0:13:39.280
<v Speaker 8>they have been coming fast and furious, oftentimes unprecedented, but

0:13:39.400 --> 0:13:43.280
<v Speaker 8>often without a huge market impact. So from a market lens,

0:13:43.960 --> 0:13:47.160
<v Speaker 8>this here kind of is important, but maybe not as

0:13:47.200 --> 0:13:51.559
<v Speaker 8>important as other geopolitical events related to Iran have been

0:13:51.640 --> 0:13:53.160
<v Speaker 8>over the last decade or two.

0:13:53.720 --> 0:13:55.600
<v Speaker 7>ED, what do you think the tolerance the patient has

0:13:55.920 --> 0:13:58.040
<v Speaker 7>the president has right now in terms of how long

0:13:58.080 --> 0:14:00.240
<v Speaker 7>he's willing to let the talks go, because we have

0:14:00.280 --> 0:14:02.640
<v Speaker 7>seen the Iranians change the tenor of the talks and

0:14:02.679 --> 0:14:04.000
<v Speaker 7>also the location of the talks.

0:14:05.840 --> 0:14:08.160
<v Speaker 8>It is I think he's open, but I don't think

0:14:08.160 --> 0:14:09.800
<v Speaker 8>he has a huge tolerance here.

0:14:10.160 --> 0:14:11.040
<v Speaker 6>I think there's two things.

0:14:11.040 --> 0:14:14.480
<v Speaker 8>When we look back to kind of the kind of

0:14:14.520 --> 0:14:18.840
<v Speaker 8>attack on Iran last summer, the President outlined kind of

0:14:18.840 --> 0:14:22.360
<v Speaker 8>some clear issues. He gave a deadline, the deadline passed,

0:14:22.480 --> 0:14:25.400
<v Speaker 8>and he gave the order to strike. I think we

0:14:25.440 --> 0:14:28.120
<v Speaker 8>could see the same thing here, Emory. What I've seen

0:14:28.480 --> 0:14:30.960
<v Speaker 8>consistently from this president though, is that he will only

0:14:31.320 --> 0:14:34.160
<v Speaker 8>strike take a military action if he thinks that he

0:14:34.160 --> 0:14:37.440
<v Speaker 8>can have a quick win as well as the response

0:14:37.600 --> 0:14:40.120
<v Speaker 8>is not going to get him entangled into something deeper.

0:14:40.400 --> 0:14:42.400
<v Speaker 8>And so to me, that's one of the big debates here.

0:14:42.800 --> 0:14:45.040
<v Speaker 8>Is there something that he can do here that he

0:14:45.200 --> 0:14:47.720
<v Speaker 8>views is that quick win that he can send that

0:14:47.760 --> 0:14:50.880
<v Speaker 8>message to the regime, that he can get that activity

0:14:51.320 --> 0:14:53.480
<v Speaker 8>or that response that does not involve the loss of

0:14:53.600 --> 0:14:54.240
<v Speaker 8>US lives.

0:14:54.680 --> 0:14:56.880
<v Speaker 6>If he has that on the table, he absolutely takes that.

0:14:57.160 --> 0:14:59.280
<v Speaker 8>If he doesn't, that's where he might pause and give

0:14:59.320 --> 0:15:01.000
<v Speaker 8>a little bit more way to these talks.

0:15:01.040 --> 0:15:04.120
<v Speaker 7>Well, and what would you characterize as a quick win,

0:15:04.240 --> 0:15:06.280
<v Speaker 7>because the Iranians say that if there is an attack,

0:15:06.400 --> 0:15:10.120
<v Speaker 7>this could be a regional conflict, a bigger one.

0:15:10.480 --> 0:15:10.720
<v Speaker 6>Yeah.

0:15:10.760 --> 0:15:12.840
<v Speaker 8>So I think that the two examples that I would

0:15:12.840 --> 0:15:16.520
<v Speaker 8>give is the kind of the assassination of Sulimany back

0:15:16.560 --> 0:15:20.200
<v Speaker 8>in twenty twenty, where that was a clear, kind of

0:15:20.320 --> 0:15:24.640
<v Speaker 8>concise military action. The attack on the military or on

0:15:24.680 --> 0:15:28.200
<v Speaker 8>the nuclear basis last summer, You could probably kind of

0:15:28.200 --> 0:15:30.080
<v Speaker 8>look to that in a pattern in terms of the

0:15:30.080 --> 0:15:33.120
<v Speaker 8>way in which he was able to capture Maduro without

0:15:33.200 --> 0:15:36.000
<v Speaker 8>the kind of loss of US lives. He looks at

0:15:36.080 --> 0:15:39.520
<v Speaker 8>a lot of these military engagements. Is there something specific

0:15:39.960 --> 0:15:44.000
<v Speaker 8>that is significant but quick that he can do? And

0:15:44.040 --> 0:15:46.800
<v Speaker 8>then we look back to what happened after Sulamani. After

0:15:46.800 --> 0:15:50.560
<v Speaker 8>those nuclear strikes. Aroan did respond, but they responded in

0:15:50.600 --> 0:15:52.920
<v Speaker 8>a way that was not escalatory, in a way that

0:15:53.000 --> 0:15:56.000
<v Speaker 8>was almost symbolic that allowed us to move on. And

0:15:56.040 --> 0:15:57.480
<v Speaker 8>I think that's actually part of the reason why the

0:15:57.480 --> 0:16:00.760
<v Speaker 8>markets have not responded, is they are used to accustom

0:16:00.960 --> 0:16:04.040
<v Speaker 8>to this quick win attitude that Trump takes to some

0:16:04.040 --> 0:16:06.440
<v Speaker 8>of these foreign policy engagements. As long as that stays

0:16:06.440 --> 0:16:09.560
<v Speaker 8>in place, that's where the market does not necessarily react

0:16:09.600 --> 0:16:11.200
<v Speaker 8>to these events just yet.

0:16:11.280 --> 0:16:13.240
<v Speaker 4>We were talking to Terry Haynes yesterday about how this

0:16:13.320 --> 0:16:15.440
<v Speaker 4>is a president who can to gum and walk at

0:16:15.440 --> 0:16:18.040
<v Speaker 4>the same time and deal with international and domestic at

0:16:18.080 --> 0:16:20.400
<v Speaker 4>the same time. The international is just getting more and

0:16:20.440 --> 0:16:22.000
<v Speaker 4>more active even as we focus on some.

0:16:21.920 --> 0:16:22.920
<v Speaker 6>Of these domestic issues.

0:16:22.920 --> 0:16:26.520
<v Speaker 4>We also had that call between Jijinping yesterday and President Trump,

0:16:26.520 --> 0:16:28.400
<v Speaker 4>a number of headlines coming out of it. What did

0:16:28.480 --> 0:16:31.080
<v Speaker 4>you take away from that, This trip by President Trump

0:16:31.240 --> 0:16:33.560
<v Speaker 4>to China and April, then the promise that by the

0:16:33.680 --> 0:16:36.240
<v Speaker 4>end of the year, Xijenping would be coming to the

0:16:36.240 --> 0:16:36.800
<v Speaker 4>White House.

0:16:37.920 --> 0:16:41.800
<v Speaker 8>Yeah, so it's basically our base case. We had last

0:16:41.880 --> 0:16:44.880
<v Speaker 8>year kind of the meeting between Trump and she in

0:16:45.200 --> 0:16:47.800
<v Speaker 8>late October, which laid out kind of these two kind

0:16:47.800 --> 0:16:50.960
<v Speaker 8>of home and away meetings. What we've heard from our

0:16:51.000 --> 0:16:53.360
<v Speaker 8>contacts is that President Trump has sent a message to

0:16:53.400 --> 0:16:57.120
<v Speaker 8>his administration, do not do anything that is seen by

0:16:57.200 --> 0:16:59.960
<v Speaker 8>China as escalatory or punitive to them.

0:17:00.560 --> 0:17:02.600
<v Speaker 6>We look at the tariffs.

0:17:02.240 --> 0:17:04.480
<v Speaker 8>That came out on semiconductors, the tariffs that came out

0:17:04.520 --> 0:17:07.119
<v Speaker 8>on critical and rare earth minerals. Those were essentially a

0:17:07.160 --> 0:17:10.840
<v Speaker 8>punt in the semiconductor tarifs were a punt until April.

0:17:11.280 --> 0:17:14.840
<v Speaker 8>What we expect as these two leaders get together is

0:17:15.240 --> 0:17:18.560
<v Speaker 8>kind of some fan fear, some announcements that sound bigger

0:17:18.560 --> 0:17:21.640
<v Speaker 8>than that they are. But there is generally a desire

0:17:21.680 --> 0:17:25.439
<v Speaker 8>between both Trump and She to contain this relationship because

0:17:25.440 --> 0:17:27.720
<v Speaker 8>they don't want the fight. Because if we look back

0:17:27.720 --> 0:17:30.119
<v Speaker 8>to last year as we entered the year, there was

0:17:30.160 --> 0:17:32.840
<v Speaker 8>a lot of escalation and some of this was mutually

0:17:32.880 --> 0:17:35.320
<v Speaker 8>a short destruction. They don't want to go back to that.

0:17:35.359 --> 0:17:36.960
<v Speaker 8>They don't want to go back to the restrictions on

0:17:37.040 --> 0:17:39.040
<v Speaker 8>rare earth. China doesn't want to go back to some

0:17:39.080 --> 0:17:42.040
<v Speaker 8>of the restrictions we're putting on airplane parts and chemicals

0:17:42.160 --> 0:17:47.000
<v Speaker 8>because both economies cannot work unless the other economy provides

0:17:47.000 --> 0:17:49.760
<v Speaker 8>them with some critical components to their supply chains.

0:17:49.960 --> 0:17:52.120
<v Speaker 4>Does this mean that we can avoid new tariff headlines

0:17:52.119 --> 0:17:53.600
<v Speaker 4>for at least the next four weeks.

0:17:54.200 --> 0:17:55.400
<v Speaker 6>I will never say that.

0:17:56.359 --> 0:17:59.520
<v Speaker 8>Kind of the reality is is that both Trump and

0:17:59.600 --> 0:18:02.280
<v Speaker 8>She like to escalate to de escalate, and so my

0:18:02.359 --> 0:18:05.000
<v Speaker 8>base case as we get closer to those April meetings

0:18:05.520 --> 0:18:08.760
<v Speaker 8>over this next couple of weeks or months is we

0:18:08.800 --> 0:18:11.400
<v Speaker 8>will always have a new tariff headline as a way

0:18:11.480 --> 0:18:15.240
<v Speaker 8>of getting negotiating position. China's actually done this probably better

0:18:15.280 --> 0:18:18.560
<v Speaker 8>than anyone else. As we go back to those October meetings,

0:18:18.960 --> 0:18:23.119
<v Speaker 8>she kind of announced a whole series of new restrictions,

0:18:23.160 --> 0:18:25.720
<v Speaker 8>only to take those off during meetings, and Trump was

0:18:25.760 --> 0:18:27.520
<v Speaker 8>able to say, hey, I got you know, she to

0:18:27.560 --> 0:18:30.159
<v Speaker 8>take all of these things off that he didn't actually

0:18:30.160 --> 0:18:32.399
<v Speaker 8>want to do. He just wanted to have something that

0:18:32.480 --> 0:18:35.280
<v Speaker 8>he could negotiate away. So I'm always telling clients at

0:18:35.320 --> 0:18:38.600
<v Speaker 8>Raymond James watch for that escalation because they want the

0:18:38.720 --> 0:18:41.879
<v Speaker 8>opportunity to de escalate during the meeting and not actually

0:18:41.880 --> 0:18:44.600
<v Speaker 8>give up something, but sound as if they gave up something.

0:18:45.400 --> 0:18:48.960
<v Speaker 2>This is the Bloomberg Survendics podcast, bringing you the best

0:18:48.960 --> 0:18:52.040
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0:18:52.040 --> 0:18:55.080
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0:18:55.200 --> 0:18:59.120
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0:19:08.080 --> 0:19:08.520
<v Speaker 1>Mm hmm