1 00:00:05,120 --> 00:00:09,200 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. Along 2 00:00:09,200 --> 00:00:13,200 Speaker 1: with Jonathan Farrell and Lisa Brownowitz. Daily we bring you 3 00:00:13,280 --> 00:00:18,600 Speaker 1: insight from the best and economics, finance, investment, and international relations. 4 00:00:18,840 --> 00:00:23,799 Speaker 1: To find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot Com, 5 00:00:23,920 --> 00:00:30,280 Speaker 1: and of course on the Bloomberg terminal. I'm wearing blue 6 00:00:30,680 --> 00:00:33,199 Speaker 1: for frost this air MS tie. We wear that when 7 00:00:33,280 --> 00:00:37,080 Speaker 1: Johnny Phillion shows up chief executive of BMP Parry bout, 8 00:00:37,120 --> 00:00:40,200 Speaker 1: Lisa brownwits and time King John Farrell wishing it was here. 9 00:00:40,560 --> 00:00:43,280 Speaker 1: I mean it's it's frankly too bad because John is 10 00:00:43,640 --> 00:00:46,479 Speaker 1: far more knowledgeable of this. But for the gentleman from 11 00:00:46,520 --> 00:00:48,600 Speaker 1: BMP parow, We're gonna get right into it. With futures 12 00:00:48,640 --> 00:00:52,599 Speaker 1: up thirt Lisa's got actually adult questions forget about it. 13 00:00:53,080 --> 00:00:58,680 Speaker 1: Explain the joy in two thousand eighteen when France pled 14 00:00:58,760 --> 00:01:02,000 Speaker 1: this incredibly differ are called feed off. What was it 15 00:01:02,080 --> 00:01:05,040 Speaker 1: like for all of the BNP Perry pat family to 16 00:01:05,240 --> 00:01:08,360 Speaker 1: see France do this four years ago? Well, Tom, thank 17 00:01:08,360 --> 00:01:10,360 Speaker 1: you for having me. By the way, Lisa as well, 18 00:01:10,880 --> 00:01:15,280 Speaker 1: it was a real celebration for the whole country, including 19 00:01:15,319 --> 00:01:17,760 Speaker 1: at bmp PI. But obviously, and that was the second 20 00:01:17,800 --> 00:01:22,120 Speaker 1: time that France won the World Cup. Then there with 21 00:01:22,200 --> 00:01:25,440 Speaker 1: a lot of expectations for this upcoming World Cup viavly Blue, right, 22 00:01:25,760 --> 00:01:30,800 Speaker 1: it's always complex to be the defending country, right exactly. 23 00:01:30,959 --> 00:01:35,040 Speaker 1: And you know today in this uh, in this soccer landscape, 24 00:01:35,040 --> 00:01:38,440 Speaker 1: there is no small teams anymore. Francis play Denmarks or 25 00:01:38,520 --> 00:01:42,280 Speaker 1: Tunisia Australia, and you just never know. I will keep 26 00:01:42,319 --> 00:01:44,720 Speaker 1: an eye. I have the privilege of being French an American. 27 00:01:45,000 --> 00:01:47,440 Speaker 1: Then I have two teams, you know, to support and 28 00:01:47,480 --> 00:01:49,520 Speaker 1: because of John is not here with us today, but 29 00:01:49,560 --> 00:01:51,320 Speaker 1: I would keep an eye on England, I promise. I 30 00:01:51,400 --> 00:01:53,200 Speaker 1: went to John and I said, give me a smart 31 00:01:53,280 --> 00:01:56,720 Speaker 1: question there, uh John even and he said, asked about 32 00:01:56,720 --> 00:01:59,600 Speaker 1: a thirty six year old Olivier is getting a little old, 33 00:01:59,640 --> 00:02:04,080 Speaker 1: how an older French team do and the heat. Well, 34 00:02:04,280 --> 00:02:06,640 Speaker 1: it's a combination. You know. The World Cup is a 35 00:02:06,720 --> 00:02:09,680 Speaker 1: long journey, it's a one months competition, and you're right, 36 00:02:09,720 --> 00:02:13,400 Speaker 1: it's a combination of youth energy but experience. And I 37 00:02:13,440 --> 00:02:16,000 Speaker 1: think this French team is putty what equipped on on 38 00:02:16,040 --> 00:02:19,000 Speaker 1: both fronts. So you said that you're both us as 39 00:02:19,040 --> 00:02:21,640 Speaker 1: well as French, and you can vote for both teams, 40 00:02:21,680 --> 00:02:24,280 Speaker 1: and you can read from both teams as the US 41 00:02:24,520 --> 00:02:28,359 Speaker 1: arm of the biggest European bank, how much is your 42 00:02:28,400 --> 00:02:31,840 Speaker 1: main company diverting money to you because it is so 43 00:02:31,919 --> 00:02:35,680 Speaker 1: much stronger here in the US. Well, this economy is 44 00:02:36,960 --> 00:02:40,200 Speaker 1: still the most basilient economy in the world. Uh. If 45 00:02:40,280 --> 00:02:43,480 Speaker 1: we look at the status today in terms of tight 46 00:02:43,560 --> 00:02:47,560 Speaker 1: labor market, in terms of status of corporate balance sheets, 47 00:02:47,720 --> 00:02:52,720 Speaker 1: households are still spending and the capital markets are still functioning. 48 00:02:53,240 --> 00:02:57,200 Speaker 1: And uh, a US bank here has been benefiting from this. 49 00:02:57,600 --> 00:03:01,240 Speaker 1: Having said that, our economists are pretty predicting a shallow 50 00:03:01,360 --> 00:03:06,880 Speaker 1: recession in because the US economy is still very quite 51 00:03:06,960 --> 00:03:10,120 Speaker 1: interconnected with the rest of the world, we expect to 52 00:03:10,440 --> 00:03:14,840 Speaker 1: rebound in. How much does that affect your willingness to 53 00:03:14,960 --> 00:03:17,320 Speaker 1: lend right? I mean, because if you basically you're tasked 54 00:03:17,320 --> 00:03:20,400 Speaker 1: with trying to support other aspects of the bank, perhaps 55 00:03:20,400 --> 00:03:23,200 Speaker 1: that are in other areas that aren't as optimistic, perhaps 56 00:03:23,240 --> 00:03:25,320 Speaker 1: as the US, but the US is also in a 57 00:03:25,360 --> 00:03:28,360 Speaker 1: difficult spot. How do you decide how loose to be 58 00:03:28,480 --> 00:03:31,440 Speaker 1: with your purse? You? Risk management is critical. You have 59 00:03:31,480 --> 00:03:34,040 Speaker 1: to be quite selective with the sectors you cover with 60 00:03:34,080 --> 00:03:36,360 Speaker 1: the clients you support. But I have to say, if 61 00:03:36,400 --> 00:03:40,280 Speaker 1: I look at my client needs today, it's around three dimensions. 62 00:03:40,760 --> 00:03:45,800 Speaker 1: Lending your right. Even the most frequent issuers in high grade, 63 00:03:46,160 --> 00:03:49,800 Speaker 1: you know, because of the higher cost of funding, they 64 00:03:50,000 --> 00:03:53,800 Speaker 1: try to wait, and we're actually bridging significant number of 65 00:03:53,840 --> 00:03:57,320 Speaker 1: capital market transactions to optimize your capital raising. Hold on 66 00:03:57,320 --> 00:03:59,160 Speaker 1: a second, So this is really important. Other words, you're 67 00:03:59,200 --> 00:04:02,080 Speaker 1: taking on your books that basically you're saying you'll lend 68 00:04:02,120 --> 00:04:04,160 Speaker 1: at a lower rate than the market rate to have 69 00:04:04,280 --> 00:04:06,600 Speaker 1: them wait until rates are lower. It's a combination of 70 00:04:06,720 --> 00:04:09,480 Speaker 1: lower rates or making sure they can pick the right 71 00:04:09,560 --> 00:04:12,400 Speaker 1: window high rate as remain open. But you have to 72 00:04:12,400 --> 00:04:15,160 Speaker 1: pick your windows if you want to optimize your capital rating. 73 00:04:15,320 --> 00:04:18,520 Speaker 1: The second important need I see from clients today is 74 00:04:18,520 --> 00:04:22,800 Speaker 1: waste management and hedging sprategies, and it's really across rates 75 00:04:22,800 --> 00:04:26,440 Speaker 1: and communities and currencies and in equities. They took a 76 00:04:26,480 --> 00:04:30,120 Speaker 1: cup of coffee in Beijing decades ago with the senior 77 00:04:30,160 --> 00:04:34,039 Speaker 1: officer of BMP parabout with the decades of French experience 78 00:04:34,160 --> 00:04:38,160 Speaker 1: in China, give us your perspective and our China is 79 00:04:38,200 --> 00:04:42,080 Speaker 1: going to extricate itself from this mess. Well, it's definity 80 00:04:42,120 --> 00:04:44,359 Speaker 1: another country. We have a lot of connection with the 81 00:04:44,360 --> 00:04:47,919 Speaker 1: bank as presidents there. Uh oh, you understate, come on 82 00:04:48,000 --> 00:04:52,440 Speaker 1: the bed. It's huge traditional presence there. And still if 83 00:04:52,480 --> 00:04:54,440 Speaker 1: you expect this economy in two any two eight three 84 00:04:54,600 --> 00:04:57,880 Speaker 1: to go through a shadowy session, your bozone is already 85 00:04:57,880 --> 00:05:01,040 Speaker 1: in my session. You still see to a China providing 86 00:05:01,080 --> 00:05:04,800 Speaker 1: some growth to the double economy which we expect to 87 00:05:04,800 --> 00:05:09,000 Speaker 1: be for two around two and it's a it's a downturn. 88 00:05:09,680 --> 00:05:12,159 Speaker 1: Uh in China. A lot of it will be around, 89 00:05:12,360 --> 00:05:16,640 Speaker 1: you know, getting truly out of the pandemic and obviously 90 00:05:16,680 --> 00:05:19,840 Speaker 1: expecting some most ability there. The heritage of your shop 91 00:05:20,200 --> 00:05:24,240 Speaker 1: is a wonderful reticence to speak about economic boom. Your economist, 92 00:05:24,240 --> 00:05:26,799 Speaker 1: Carl Rico, donno, we've got a not in a quaince. 93 00:05:26,839 --> 00:05:29,719 Speaker 1: So thank you, sir for stealing him from Bloodboard. Will 94 00:05:29,720 --> 00:05:33,119 Speaker 1: never forgive you. But Mr Rickodon and back to Dr 95 00:05:33,200 --> 00:05:36,880 Speaker 1: Cornado has been dead on about g d P. What 96 00:05:37,000 --> 00:05:41,040 Speaker 1: does he say in this titanic battle we're having on recession? 97 00:05:41,720 --> 00:05:43,839 Speaker 1: Calling by his way, it was my only way to 98 00:05:43,880 --> 00:05:46,120 Speaker 1: be to really continue to be part of the Bloomberog 99 00:05:46,160 --> 00:05:48,600 Speaker 1: family to have called on that. And we love to 100 00:05:48,960 --> 00:05:51,400 Speaker 1: thank you for that, having trained in post so many 101 00:05:51,440 --> 00:05:57,400 Speaker 1: years college saying in three shadow accision as we've just discussed, 102 00:05:57,400 --> 00:06:00,400 Speaker 1: you know, minus one percent, but he's very confident done that. 103 00:06:00,480 --> 00:06:04,279 Speaker 1: In four he sees is rebound because of the good 104 00:06:04,320 --> 00:06:07,599 Speaker 1: foundations of the resiliency of this economy and back to 105 00:06:08,040 --> 00:06:10,680 Speaker 1: a more normalized g D pig voles around. You know. Two, 106 00:06:11,320 --> 00:06:13,240 Speaker 1: how concerned you as you are? You as you look 107 00:06:13,240 --> 00:06:15,440 Speaker 1: at some of the risk management you're talking about earlier, 108 00:06:15,480 --> 00:06:18,800 Speaker 1: as you decide how much to lend, how do you 109 00:06:18,839 --> 00:06:22,000 Speaker 1: factor in exogenous events? How do you factor in a 110 00:06:22,080 --> 00:06:24,640 Speaker 1: colder winter? How do you focus in how do you 111 00:06:24,680 --> 00:06:27,960 Speaker 1: fold in the prospect of a federal reserve that potentially 112 00:06:27,960 --> 00:06:30,200 Speaker 1: could go well beyond what people currently I wish we 113 00:06:30,200 --> 00:06:32,400 Speaker 1: had all the answers to your wonderful questions. So how 114 00:06:32,440 --> 00:06:35,039 Speaker 1: do you even model it out? I wait, well, definitely 115 00:06:35,080 --> 00:06:36,719 Speaker 1: in bring out. But you know the way it really 116 00:06:36,760 --> 00:06:39,240 Speaker 1: works in the real life, it's really about the sectors, 117 00:06:39,279 --> 00:06:42,680 Speaker 1: about the clients, and honestly about the management you deal with, 118 00:06:42,760 --> 00:06:45,520 Speaker 1: because a big part of managing the companies between the 119 00:06:45,520 --> 00:06:49,200 Speaker 1: hands of the leaders um. You know, you you mentioned 120 00:06:49,200 --> 00:06:51,920 Speaker 1: in flish and you mentioned energy. If I look at 121 00:06:52,600 --> 00:06:55,840 Speaker 1: back to comparison between Europe and US. I think you're 122 00:06:55,920 --> 00:06:59,440 Speaker 1: up as two main challenges in the in the months 123 00:06:59,440 --> 00:07:02,480 Speaker 1: to come. It's obviously inflation and the e c B 124 00:07:02,680 --> 00:07:05,159 Speaker 1: is going exactly in the same direction as the FED. 125 00:07:05,480 --> 00:07:07,480 Speaker 1: You know they're gonna be okish, they're doing the job. 126 00:07:07,960 --> 00:07:10,840 Speaker 1: And the second one is energy. And on the energy 127 00:07:10,880 --> 00:07:14,320 Speaker 1: side you start seeing with the good news is for 128 00:07:14,400 --> 00:07:19,480 Speaker 1: two for the winter three. I think the Eurozone has 129 00:07:19,520 --> 00:07:22,440 Speaker 1: managed to, you know, to to to navigate through this 130 00:07:22,640 --> 00:07:25,840 Speaker 1: energy crisis. And I think the second trend and I 131 00:07:25,840 --> 00:07:28,880 Speaker 1: can see this happening already there, it will happen here eventually. 132 00:07:29,360 --> 00:07:35,119 Speaker 1: You see a real commitment to diversify sources of energy 133 00:07:35,640 --> 00:07:41,840 Speaker 1: renewable hydrogen, star wind, hydro when it works. But I 134 00:07:41,880 --> 00:07:44,880 Speaker 1: think the trainers left the station on this front. And 135 00:07:44,920 --> 00:07:49,640 Speaker 1: in Europe there is a probably very favorable regulatory and 136 00:07:50,120 --> 00:07:54,080 Speaker 1: UH fiscal environment to support this trend toward s G 137 00:07:54,200 --> 00:07:57,080 Speaker 1: and sustainability. Johnny Julian, thank you so much for joining 138 00:07:57,120 --> 00:07:59,280 Speaker 1: us here and we do accept your invitation to come 139 00:07:59,320 --> 00:08:05,000 Speaker 1: to Paris and April. You got team surveillance at the 140 00:08:05,040 --> 00:08:11,160 Speaker 1: little cafe. There's a little cafe overlooking Dander Luxembourg effee 141 00:08:11,200 --> 00:08:13,600 Speaker 1: sweets and you know the three of us out there 142 00:08:13,640 --> 00:08:15,840 Speaker 1: remote on the street, but are you really that person? 143 00:08:16,480 --> 00:08:22,880 Speaker 1: Thank you for inviting yours. I'll be going to bucket. 144 00:08:23,200 --> 00:08:28,360 Speaker 1: I need a bugette great as with BMP Perry. Thank 145 00:08:28,360 --> 00:08:30,240 Speaker 1: you so much for telling us France will do it 146 00:08:30,280 --> 00:08:44,960 Speaker 1: again at the World Cup as well. Right now. David Balan, 147 00:08:45,040 --> 00:08:49,480 Speaker 1: Chief Investment Officer, Global Head of Investments, It's City Global Wealth. David, 148 00:08:49,840 --> 00:08:52,560 Speaker 1: I'm not surprised to hear you say quality is in 149 00:08:52,720 --> 00:08:56,320 Speaker 1: order for two thousand twenty three. But color to the quality, 150 00:08:56,480 --> 00:08:59,760 Speaker 1: what does it look like? Well, you know, we're gonna 151 00:09:00,000 --> 00:09:01,720 Speaker 1: continue to earn money all the way through the next 152 00:09:01,760 --> 00:09:04,040 Speaker 1: year without a decline. Those stocks that pay dividends and 153 00:09:04,080 --> 00:09:06,640 Speaker 1: pay buybacks, well you and Lisa were just talking about 154 00:09:06,720 --> 00:09:10,480 Speaker 1: is incredibly important because the Fed has raised rates and 155 00:09:10,559 --> 00:09:13,000 Speaker 1: is going to raise rates more looking at the data 156 00:09:13,280 --> 00:09:16,000 Speaker 1: on inflation that is behind it, the leading you know, 157 00:09:16,040 --> 00:09:19,040 Speaker 1: the lagging indicators, that's what they're looking at, and as 158 00:09:19,080 --> 00:09:21,280 Speaker 1: a result, they're gonna have rates go too high and 159 00:09:21,280 --> 00:09:23,400 Speaker 1: they're going to keep them there for too long. And 160 00:09:23,440 --> 00:09:25,120 Speaker 1: if they do that, we are going to have not 161 00:09:25,200 --> 00:09:28,080 Speaker 1: only a recession, but potentially it's seriously you know, serious 162 00:09:28,080 --> 00:09:30,520 Speaker 1: in terms of its length, and potentially it's breadth. And 163 00:09:30,520 --> 00:09:32,720 Speaker 1: that's really what's being set up here. And the market 164 00:09:32,960 --> 00:09:35,679 Speaker 1: you know, looks at it somewhat sanguin, you know when 165 00:09:35,720 --> 00:09:38,360 Speaker 1: the senguin lens, and I think that's a mistake because 166 00:09:38,480 --> 00:09:40,600 Speaker 1: really what we're dealing here is potentially with an earnings 167 00:09:40,600 --> 00:09:43,040 Speaker 1: decline that is not yet priced into the market. For 168 00:09:44,600 --> 00:09:48,720 Speaker 1: the earnings decline assumes also revenue declined. Do you just assume, 169 00:09:48,800 --> 00:09:52,600 Speaker 1: with the dearth of nominal GDP off the the oddities 170 00:09:52,640 --> 00:09:55,080 Speaker 1: of the last twenty four months at revenue growth comes 171 00:09:55,080 --> 00:09:57,920 Speaker 1: in as well as earnings, but actually is going to 172 00:09:58,000 --> 00:10:01,320 Speaker 1: come in tom is the is the is the profit margin? Right. 173 00:10:01,360 --> 00:10:04,000 Speaker 1: Revenues will go up, of course with inflation, but costs 174 00:10:04,000 --> 00:10:06,240 Speaker 1: are going to go up more than that. The ability 175 00:10:06,240 --> 00:10:08,880 Speaker 1: for people who produce goods to actually pass on pricing 176 00:10:08,960 --> 00:10:11,400 Speaker 1: creatures is going to go away. And the reason is 177 00:10:11,440 --> 00:10:15,640 Speaker 1: because inventories are extremely hot. And what inventories do is they, 178 00:10:15,640 --> 00:10:17,400 Speaker 1: you know, they drive prices down so we'll all be 179 00:10:17,440 --> 00:10:20,280 Speaker 1: able to buy, you know, things less expensively during this 180 00:10:20,360 --> 00:10:23,320 Speaker 1: coming in Black Friday, in Christmas season, but ultimately it's 181 00:10:23,360 --> 00:10:25,560 Speaker 1: going to make profits you know, go down next year, 182 00:10:25,880 --> 00:10:27,800 Speaker 1: and I think it's going to cause you know, the 183 00:10:27,840 --> 00:10:30,200 Speaker 1: economy to slow more than people think, because you know, 184 00:10:30,280 --> 00:10:34,000 Speaker 1: once inventories build like this, then production, your future production 185 00:10:34,280 --> 00:10:37,640 Speaker 1: will be reducing disproportionately downward. David, I want to sit 186 00:10:37,679 --> 00:10:40,280 Speaker 1: on something that you said that potentially because if it's 187 00:10:40,280 --> 00:10:42,520 Speaker 1: going to raise rates far beyond people think, even in 188 00:10:42,960 --> 00:10:45,200 Speaker 1: the face of weakness, that is happening more rapidly than 189 00:10:45,240 --> 00:10:47,920 Speaker 1: perhaps people realize. This is going to lead to a 190 00:10:48,040 --> 00:10:51,000 Speaker 1: long and potentially deep recession, right, I mean, that's essentially 191 00:10:51,000 --> 00:10:52,880 Speaker 1: what you're saying, and then that's not being priced in. 192 00:10:53,160 --> 00:10:55,720 Speaker 1: I'm looking right now at NASDAC down this year. I'm 193 00:10:55,720 --> 00:10:58,960 Speaker 1: looking at an SMP and down this year. Where is 194 00:10:58,960 --> 00:11:01,320 Speaker 1: it not being priced stand well, Le, So you know, 195 00:11:01,559 --> 00:11:03,800 Speaker 1: if you actually take a look at recessions historically, you 196 00:11:03,840 --> 00:11:06,800 Speaker 1: know they could see markets down you know, easily between 197 00:11:06,880 --> 00:11:10,720 Speaker 1: thirty But this is the most important single line that 198 00:11:10,760 --> 00:11:13,520 Speaker 1: you know, I think people are missing. Markets have never 199 00:11:13,679 --> 00:11:18,360 Speaker 1: bottomed before a recession has begun. Look back at the 200 00:11:18,400 --> 00:11:21,000 Speaker 1: historical data and that's why you know, you see these 201 00:11:21,000 --> 00:11:23,400 Speaker 1: bear market rallies, you see shortcovering, you see the fact 202 00:11:23,400 --> 00:11:25,199 Speaker 1: that we're in the fourth quarter, and the fourth quarter 203 00:11:25,240 --> 00:11:27,320 Speaker 1: is always a good quarter. You know, all of those 204 00:11:27,320 --> 00:11:30,240 Speaker 1: things are true too. But what we have to do 205 00:11:30,320 --> 00:11:32,600 Speaker 1: is actually price in what is going what is going 206 00:11:32,640 --> 00:11:34,800 Speaker 1: to happen in the future, and what you said earlier. 207 00:11:34,800 --> 00:11:36,360 Speaker 1: You know, let's take a look at housing as a 208 00:11:36,440 --> 00:11:39,280 Speaker 1: leading indicator right right now. You know, housing, how the 209 00:11:39,320 --> 00:11:41,319 Speaker 1: houses that were started a year ago when interest rates 210 00:11:41,400 --> 00:11:43,760 Speaker 1: a three percent needs to be completed, so the amount 211 00:11:43,800 --> 00:11:47,960 Speaker 1: of housing unemployment that's taken place is virtually zero. We 212 00:11:48,000 --> 00:11:50,840 Speaker 1: think that there'll be four hundred thousand people unemployed in 213 00:11:50,920 --> 00:11:53,640 Speaker 1: housing next year, and about two million people who will 214 00:11:53,640 --> 00:11:57,240 Speaker 1: be unemployed across the economy, which is not especially deep recession, 215 00:11:57,280 --> 00:12:00,600 Speaker 1: but it's certainly not positive employment growth as we've almost 216 00:12:00,600 --> 00:12:03,000 Speaker 1: all year long. David, what does this mean in terms 217 00:12:03,040 --> 00:12:04,960 Speaker 1: of what you're recommending to her clients? I mean, if 218 00:12:05,000 --> 00:12:07,400 Speaker 1: you're talking about a long and deep recession, is this 219 00:12:07,520 --> 00:12:09,920 Speaker 1: hide out in tenure treasuries? Is this hiding out in 220 00:12:10,000 --> 00:12:11,839 Speaker 1: t bills until we have a better sense of what's 221 00:12:11,840 --> 00:12:14,960 Speaker 1: going to happen. Yeah, we are deeply wave Lisa over 222 00:12:15,120 --> 00:12:18,120 Speaker 1: were deeply overweight bonds at the moment you know, we 223 00:12:18,120 --> 00:12:19,880 Speaker 1: think the bonds are going to be a terrific investment, 224 00:12:19,880 --> 00:12:21,400 Speaker 1: by the way, because you know, if you buy attaining 225 00:12:21,440 --> 00:12:23,960 Speaker 1: your bond today, let's say three a D right, and 226 00:12:24,000 --> 00:12:26,080 Speaker 1: it happens to go to you know, three P and 227 00:12:26,120 --> 00:12:28,280 Speaker 1: you hold it for a year and change, you know 228 00:12:28,320 --> 00:12:30,920 Speaker 1: that total return on that bond could be because we 229 00:12:31,000 --> 00:12:33,240 Speaker 1: think interest rates are going to be down a year 230 00:12:33,360 --> 00:12:34,640 Speaker 1: to a year and a half from now. You know, 231 00:12:34,679 --> 00:12:36,960 Speaker 1: we hit the long term rate on the Tenure Committe 232 00:12:36,960 --> 00:12:39,520 Speaker 1: between two fifty and three. And that's because once our 233 00:12:39,520 --> 00:12:42,480 Speaker 1: recession begins, rage will of course, you know, come down, 234 00:12:42,720 --> 00:12:45,360 Speaker 1: and once we have unemployment prints for a couple of months, 235 00:12:45,880 --> 00:12:47,920 Speaker 1: will finally realize as vocal, did they have to do 236 00:12:48,000 --> 00:12:50,880 Speaker 1: something about it? Well, your economics team, and good morning 237 00:12:50,880 --> 00:12:54,119 Speaker 1: Andrew Holland Horse has been way out front on the slowdown, 238 00:12:54,600 --> 00:12:57,559 Speaker 1: called David Bale, and we've got a stagger to December 239 00:12:57,640 --> 00:13:00,400 Speaker 1: two and all of a sudden the jobs report, which 240 00:13:00,440 --> 00:13:03,559 Speaker 1: is of interest. Are we going to see the unemployment 241 00:13:03,720 --> 00:13:05,959 Speaker 1: rate move in December yet or does that all wait 242 00:13:06,040 --> 00:13:09,040 Speaker 1: till the first week of January? Well it certainly could, 243 00:13:09,120 --> 00:13:12,920 Speaker 1: you know, Tom. The rders come down relatively little so far, 244 00:13:13,080 --> 00:13:14,920 Speaker 1: you know. But what we're seeing are you know, the 245 00:13:14,960 --> 00:13:17,559 Speaker 1: postings come down. We're seeing a lot of pre announcements 246 00:13:17,600 --> 00:13:20,079 Speaker 1: of layoffs all across the tech industry. Some of the 247 00:13:20,200 --> 00:13:23,120 Speaker 1: names you were talking about, you know, are are planning 248 00:13:23,160 --> 00:13:26,800 Speaker 1: you know ten in fifteen thou uh, you know, layoffs 249 00:13:27,280 --> 00:13:30,000 Speaker 1: next you next year. But those haven't happened yet. And 250 00:13:30,040 --> 00:13:33,160 Speaker 1: of course we haven't seen this sort of industrial company 251 00:13:33,480 --> 00:13:36,800 Speaker 1: off anybody at this point because of the hoarding of labor. David, 252 00:13:36,840 --> 00:13:39,280 Speaker 1: thank you for the brief. David Balin City Group Global Wealth, 253 00:13:39,400 --> 00:13:45,280 Speaker 1: just thrilled to have them on. We are briefed by 254 00:13:45,320 --> 00:13:49,839 Speaker 1: Amrita Sind of Energy Aspects this morning. A Marina help 255 00:13:49,920 --> 00:13:52,040 Speaker 1: me with a recent pullback in oil? Is it just 256 00:13:52,080 --> 00:13:54,960 Speaker 1: a bat Demand won't be there now? I think there's 257 00:13:55,000 --> 00:13:57,079 Speaker 1: a lot of confusion in the market right now, right 258 00:13:57,160 --> 00:13:59,600 Speaker 1: and yes, demand in China is weak, and this is 259 00:13:59,640 --> 00:14:02,920 Speaker 1: something been saying for some time. Don't get too excited 260 00:14:02,960 --> 00:14:05,880 Speaker 1: by all the headlines coming out of China about reopening 261 00:14:05,880 --> 00:14:09,120 Speaker 1: because that reopening isn't happening until April of next year. 262 00:14:09,520 --> 00:14:11,680 Speaker 1: So right here, right now, there are more locked down. 263 00:14:11,720 --> 00:14:15,280 Speaker 1: So absolutely demand in China will remain weak. Now the 264 00:14:15,480 --> 00:14:18,120 Speaker 1: thing is the rest of the world demand is actually 265 00:14:18,120 --> 00:14:21,520 Speaker 1: pretty decent and the numbers coming in have actually surprised 266 00:14:21,560 --> 00:14:23,880 Speaker 1: to the upside and not downside. So how does that 267 00:14:23,920 --> 00:14:26,280 Speaker 1: frame up for next year? Every you know, a hundred 268 00:14:26,320 --> 00:14:30,400 Speaker 1: page report I skimmed through says Pacific rim demand is 269 00:14:30,440 --> 00:14:33,400 Speaker 1: the variable. If we get what Lisa talks about five 270 00:14:33,960 --> 00:14:36,960 Speaker 1: China GDP growth, does that reverse you out to a 271 00:14:37,040 --> 00:14:40,360 Speaker 1: hundred and twenty a barrel? Absolutely, China, It's going to 272 00:14:40,480 --> 00:14:44,480 Speaker 1: be critical for next year's balances. And I think again, 273 00:14:44,520 --> 00:14:48,920 Speaker 1: if you look at what has caused this year's kind 274 00:14:48,920 --> 00:14:52,200 Speaker 1: of softness, it's been China. It's not that we were 275 00:14:52,240 --> 00:14:56,640 Speaker 1: expecting a reopening, but these renewed lockdowns have actually dental 276 00:14:56,720 --> 00:15:01,040 Speaker 1: demand quite substantially more than we all the market was expecting. 277 00:15:01,040 --> 00:15:02,960 Speaker 1: And I think that's one of the biggest reasons why 278 00:15:03,040 --> 00:15:06,200 Speaker 1: China is not out buying crude right now. They are 279 00:15:06,240 --> 00:15:09,160 Speaker 1: going to be the biggest variable for next year, especially 280 00:15:09,560 --> 00:15:12,880 Speaker 1: given all the uncertainties around Russian oil. With the EU 281 00:15:13,000 --> 00:15:15,280 Speaker 1: and bargo ticking in on the fifth of December, we 282 00:15:15,360 --> 00:15:18,360 Speaker 1: are going to lose some Russian barrels, but that is 283 00:15:18,400 --> 00:15:20,920 Speaker 1: again going to be after the products embargo on the 284 00:15:20,960 --> 00:15:23,200 Speaker 1: fifth of February, So the timing is going to be 285 00:15:23,240 --> 00:15:26,120 Speaker 1: critical that if China starts to reopen from April, the 286 00:15:26,160 --> 00:15:29,240 Speaker 1: real upside and the drill tightening and balances is going 287 00:15:29,280 --> 00:15:31,320 Speaker 1: to be Then why is the bookcase for oil now 288 00:15:31,400 --> 00:15:33,520 Speaker 1: coming truition now given that we are getting a bit 289 00:15:33,560 --> 00:15:36,200 Speaker 1: colder now and that we do have a bit more 290 00:15:36,240 --> 00:15:39,360 Speaker 1: resilient of US economy. Yeah, I mean, look, there's a 291 00:15:39,400 --> 00:15:41,880 Speaker 1: lot of your end positioning going on as well. But 292 00:15:42,160 --> 00:15:44,080 Speaker 1: what I and this gets a little bit technical to 293 00:15:44,160 --> 00:15:46,680 Speaker 1: bear with me, but I think what's been interesting is, 294 00:15:46,840 --> 00:15:48,320 Speaker 1: you know, and I've seen a lot of kind of 295 00:15:48,600 --> 00:15:52,200 Speaker 1: narrative around this that Accruede has obviously sold off and 296 00:15:52,240 --> 00:15:54,840 Speaker 1: that just means everything. It's very verish. If you look 297 00:15:54,840 --> 00:15:58,160 Speaker 1: at the products markets, pretty much every single products and 298 00:15:58,200 --> 00:16:00,360 Speaker 1: all of all of them in Asia are back dated. 299 00:16:00,440 --> 00:16:04,400 Speaker 1: That tells you that the underlying demand conditions are strong. 300 00:16:05,040 --> 00:16:09,480 Speaker 1: Usually when the market is wobbling because of fundamentals, it 301 00:16:09,560 --> 00:16:11,680 Speaker 1: tends to come for the product site. But if you 302 00:16:11,720 --> 00:16:14,640 Speaker 1: look at gasoline, diesel, even fuel oil and after which 303 00:16:14,680 --> 00:16:18,040 Speaker 1: had been weaker, have all strengthened over the course of 304 00:16:18,080 --> 00:16:21,120 Speaker 1: the month. So this is more of a macro thing 305 00:16:21,160 --> 00:16:25,440 Speaker 1: that's driving crude stronger dollar obviously, worries about continuous rate highs. 306 00:16:25,840 --> 00:16:28,600 Speaker 1: We had even correlation with bitcoin, which is just insane 307 00:16:28,640 --> 00:16:31,080 Speaker 1: and tells you that not that many specialists are trading 308 00:16:31,120 --> 00:16:34,640 Speaker 1: crude oil right now. And policy uncertainty, which we've talked 309 00:16:34,680 --> 00:16:36,960 Speaker 1: about on this show before as well, is just not helping. 310 00:16:37,320 --> 00:16:39,880 Speaker 1: We don't know because of the amount of even media 311 00:16:39,920 --> 00:16:43,600 Speaker 1: reports constantly contradicting one another. You know, we have very 312 00:16:43,600 --> 00:16:46,080 Speaker 1: strong views about the EU embargo, but people are telling us, 313 00:16:46,080 --> 00:16:48,440 Speaker 1: clients are telling us, oh, do you think Europe is 314 00:16:48,440 --> 00:16:50,120 Speaker 1: going to go ahead with the embargo? And I think 315 00:16:50,120 --> 00:16:52,280 Speaker 1: that's what's creating a lot of confusion in the market. 316 00:16:52,360 --> 00:16:55,120 Speaker 1: So even putting aside all of that confusion, when you 317 00:16:55,160 --> 00:16:57,200 Speaker 1: hear from people who say they're actually Europe isn't a 318 00:16:57,280 --> 00:16:59,440 Speaker 1: much better position than they previously were, not just for 319 00:16:59,480 --> 00:17:02,560 Speaker 1: this winter, but for next winter, do you pay credence 320 00:17:02,560 --> 00:17:05,520 Speaker 1: to that? Do you feel like crisis averted regardless of 321 00:17:05,560 --> 00:17:08,440 Speaker 1: what happens in Russia and Ukraine and that there has 322 00:17:08,480 --> 00:17:13,359 Speaker 1: been immunization from the conflict. I'd say right now, sure, 323 00:17:13,480 --> 00:17:16,200 Speaker 1: Europe is in a much more comfortable position because it's 324 00:17:16,200 --> 00:17:18,760 Speaker 1: been mild and we have a bunch of energy cargoes 325 00:17:18,800 --> 00:17:22,200 Speaker 1: sitting um waiting to be discharged. But if it does 326 00:17:22,240 --> 00:17:25,720 Speaker 1: get cold, and I really tread to think how people 327 00:17:25,760 --> 00:17:28,160 Speaker 1: can say that next year is going to be fine 328 00:17:28,200 --> 00:17:30,680 Speaker 1: as well. We can get through this winter, assuming it's 329 00:17:30,680 --> 00:17:34,199 Speaker 1: a mild enough winter, no problem. Next year there's a 330 00:17:34,280 --> 00:17:36,520 Speaker 1: huge issue. And by the way, this is much more 331 00:17:36,520 --> 00:17:39,159 Speaker 1: a gas story than an old story um oil. We 332 00:17:39,240 --> 00:17:42,000 Speaker 1: haven't lost Russian or to begin with, So I don't 333 00:17:42,119 --> 00:17:45,800 Speaker 1: understand why even if the talk of ceasefire again instruction 334 00:17:45,840 --> 00:17:48,120 Speaker 1: which we completely disagree with to begin with, but let's 335 00:17:48,119 --> 00:17:50,960 Speaker 1: say it does again credence, how does it affect oil 336 00:17:51,000 --> 00:17:54,320 Speaker 1: because oil wasn't impacted, So why should oils sell off now? 337 00:17:55,160 --> 00:17:57,639 Speaker 1: If you know, even if there is a ceasefire, And 338 00:17:57,920 --> 00:18:00,560 Speaker 1: that's where I think the market is very fused and 339 00:18:00,560 --> 00:18:03,440 Speaker 1: you're just selling getting like suits of just macro sell 340 00:18:03,480 --> 00:18:06,080 Speaker 1: off and oil getting caught in with that one final 341 00:18:06,160 --> 00:18:09,320 Speaker 1: unfair question and then all of a sudden, money costs something, 342 00:18:09,320 --> 00:18:12,320 Speaker 1: the risk free rates legitimate, all of a sudden, the 343 00:18:12,359 --> 00:18:17,520 Speaker 1: investment calculation is like we remember, do you assume there 344 00:18:17,560 --> 00:18:21,400 Speaker 1: will be a boost in energy production? And what politicians 345 00:18:21,400 --> 00:18:24,040 Speaker 1: of all ILK are calling for, which is more production? 346 00:18:24,440 --> 00:18:30,080 Speaker 1: Are you optimistic hydrocarbon producers will produce more at the margin. No, 347 00:18:30,359 --> 00:18:33,560 Speaker 1: And for two simple reasons. One, shareholders continue to tell 348 00:18:33,600 --> 00:18:36,840 Speaker 1: them not to do so and prioritize green energy. And too, 349 00:18:37,000 --> 00:18:40,119 Speaker 1: because interest rates are going up again, servicing debt just 350 00:18:40,160 --> 00:18:42,520 Speaker 1: gets a lot more expensive. This is the other problem 351 00:18:42,520 --> 00:18:44,240 Speaker 1: that we're seeing in the U S. U S. Production 352 00:18:44,359 --> 00:18:47,480 Speaker 1: isn't rising particularly sharply, and I think the market will 353 00:18:47,520 --> 00:18:51,040 Speaker 1: realize this next year. But of course the problem for 354 00:18:51,080 --> 00:18:54,040 Speaker 1: the US is that freight rates have skyrocketed so moving 355 00:18:54,080 --> 00:18:57,280 Speaker 1: that oil has become extremely expensive. And I think that's 356 00:18:57,280 --> 00:18:59,040 Speaker 1: actually good to be a double whammy and way on 357 00:18:59,160 --> 00:19:02,360 Speaker 1: US production. Even Samrita sent thank you so much. Always 358 00:19:02,359 --> 00:19:05,960 Speaker 1: a clinic she is with energy aspects just outstanding as well. 359 00:19:16,920 --> 00:19:19,200 Speaker 1: Duck Cass now on the market's Duck. I loved your 360 00:19:19,200 --> 00:19:23,320 Speaker 1: note where you talked about old stock strategist named Voltaire 361 00:19:23,960 --> 00:19:25,480 Speaker 1: and it's just a point where you have to learn 362 00:19:25,560 --> 00:19:27,800 Speaker 1: to climb on board. How do you climb on board 363 00:19:27,800 --> 00:19:30,919 Speaker 1: a bull market? No one believes in it's rough. I 364 00:19:30,920 --> 00:19:34,320 Speaker 1: mean this has been some year, um. Most investors have 365 00:19:34,400 --> 00:19:37,920 Speaker 1: been beaten up. Fortunately, we had a profitable year a 366 00:19:37,960 --> 00:19:41,800 Speaker 1: hedge run Sea Breeze partners UM. We started the year bearish, 367 00:19:41,920 --> 00:19:44,879 Speaker 1: But the real key to our success this year and 368 00:19:44,920 --> 00:19:47,560 Speaker 1: hopefully in the future is that we're a throwback. We're 369 00:19:47,640 --> 00:19:51,000 Speaker 1: throwback to the original hedge fund A. W. Jones, which 370 00:19:51,040 --> 00:19:53,560 Speaker 1: was formed actually the year I was born. And I 371 00:19:53,600 --> 00:19:55,320 Speaker 1: think the business media spent a lot of time in 372 00:19:55,359 --> 00:19:59,320 Speaker 1: talking about market outlook Tom and Paul, not enough about process. 373 00:19:59,600 --> 00:20:03,600 Speaker 1: What's the process at Sea Breeze if you remember, Unlike 374 00:20:03,880 --> 00:20:08,600 Speaker 1: most investment funds of the day, Jones was created essentially 375 00:20:09,280 --> 00:20:12,359 Speaker 1: along and short long short hedge fund, or as Jones 376 00:20:12,400 --> 00:20:17,680 Speaker 1: called it, a hedged fund UM. So, like Jones, Sea 377 00:20:17,680 --> 00:20:21,399 Speaker 1: Breeze strategy is to balance long positions or bets that 378 00:20:21,440 --> 00:20:23,480 Speaker 1: the security is going to rise in price, with short 379 00:20:23,520 --> 00:20:28,920 Speaker 1: positions that bets security will fall UM. And they introduced 380 00:20:29,000 --> 00:20:32,880 Speaker 1: this approach in order to reduce exposure to market swings 381 00:20:33,080 --> 00:20:36,560 Speaker 1: and create alpha, and certainly relevant today with all the 382 00:20:36,640 --> 00:20:41,880 Speaker 1: economic and market outcomes uncertain they introduced something called pairs trading, 383 00:20:42,760 --> 00:20:45,320 Speaker 1: and I think it seems to be a continued ticket 384 00:20:45,400 --> 00:20:48,359 Speaker 1: or strategy in a period of very sluggish, uncertain and 385 00:20:48,440 --> 00:20:51,600 Speaker 1: uneven growth. And this direction we're taking. By the way, 386 00:20:51,800 --> 00:20:53,840 Speaker 1: you were talking about Taylor Swift. My favorite pair of 387 00:20:53,880 --> 00:21:00,280 Speaker 1: strade is short Taylor Swift and long El Fitzgerald. People. 388 00:21:00,800 --> 00:21:03,040 Speaker 1: If you think about it, if you think about the 389 00:21:03,119 --> 00:21:06,440 Speaker 1: last ten or fifteen years, guys come on ast traditional plane, 390 00:21:06,480 --> 00:21:09,439 Speaker 1: vanilla asset managers come on and they say they do 391 00:21:09,600 --> 00:21:11,920 Speaker 1: all the same thing. They buy the thirty favorite stocks, 392 00:21:12,160 --> 00:21:14,520 Speaker 1: they hold them through hell or high water, they play 393 00:21:14,560 --> 00:21:17,879 Speaker 1: a lot of golf, they acquire more assets their at 394 00:21:18,200 --> 00:21:21,520 Speaker 1: there's not managers. And when the tide went out as 395 00:21:21,560 --> 00:21:25,720 Speaker 1: it did this year, their exposed was swimming naked. Quote 396 00:21:25,720 --> 00:21:28,320 Speaker 1: of the year not seeing teleb love him to death 397 00:21:28,480 --> 00:21:32,080 Speaker 1: and he said gravity is back in physics and years 398 00:21:32,080 --> 00:21:34,920 Speaker 1: in mind Paul's world, the risk free rate is back. 399 00:21:35,640 --> 00:21:41,000 Speaker 1: How does the risk free rate change? Naive long only 400 00:21:41,359 --> 00:21:45,879 Speaker 1: active investment? You know, risk free is a big issue. 401 00:21:46,560 --> 00:21:51,480 Speaker 1: Um uh, this is the way I look at it, Tom. 402 00:21:51,560 --> 00:21:54,040 Speaker 1: The S and P dividend yield today is one point 403 00:21:54,119 --> 00:21:58,800 Speaker 1: six The two year yield just broached four point five 404 00:21:58,840 --> 00:22:03,680 Speaker 1: percent UM. With the profit cycle turning down, it is 405 00:22:03,800 --> 00:22:07,720 Speaker 1: quite obvious with this relationship materially different than it was 406 00:22:07,800 --> 00:22:10,560 Speaker 1: as little as eleven or twelve months ago that this 407 00:22:10,600 --> 00:22:13,360 Speaker 1: should be a fundamental part of one's core bearish view. 408 00:22:14,320 --> 00:22:17,320 Speaker 1: And obviously there are other headwinds that we have political 409 00:22:17,400 --> 00:22:21,800 Speaker 1: partner partisanship, we have the lack of leadership in Washington. 410 00:22:21,880 --> 00:22:24,240 Speaker 1: We have a wayward central bank. We have rising geo 411 00:22:24,280 --> 00:22:28,280 Speaker 1: political risks, were weakening non US economic growth, most notably 412 00:22:28,320 --> 00:22:31,760 Speaker 1: in China and Europe. And as you've talked all morning, 413 00:22:32,040 --> 00:22:35,600 Speaker 1: we have curb and version, which typically pre sages recession. 414 00:22:36,200 --> 00:22:38,720 Speaker 1: I think that that the profits cycle is turning down 415 00:22:38,800 --> 00:22:43,760 Speaker 1: much harder than most realized. In terms of market view, however, 416 00:22:43,840 --> 00:22:46,639 Speaker 1: I think we're basically model value. There's a tendency I 417 00:22:46,640 --> 00:22:50,160 Speaker 1: think to be hyperbolic and market views. It gets media 418 00:22:50,160 --> 00:22:54,320 Speaker 1: attention and gets celebrity. But I've observed that outlier forecasts, 419 00:22:54,359 --> 00:22:58,720 Speaker 1: both fulish and bearish, are rarely met. And as Buffett says, 420 00:22:58,720 --> 00:23:02,280 Speaker 1: it tells you more about the four asked than the forecast. So, Doug, 421 00:23:02,359 --> 00:23:04,480 Speaker 1: I mean, one of the many reasons we like chatting 422 00:23:04,480 --> 00:23:06,880 Speaker 1: with you is we come away knowing exactly what you're 423 00:23:06,920 --> 00:23:11,280 Speaker 1: doing in the market. Are you buying or selling this market? 424 00:23:11,320 --> 00:23:16,720 Speaker 1: Are you waiting? Um? I have said that UM that 425 00:23:18,720 --> 00:23:21,920 Speaker 1: with the market decline over the last three months, I've 426 00:23:21,960 --> 00:23:25,159 Speaker 1: been able to buy great companies at good prices, but 427 00:23:25,240 --> 00:23:29,320 Speaker 1: not great companies that great prices. As the markets rallied, 428 00:23:29,560 --> 00:23:32,760 Speaker 1: I'm no longer being able to buy great companies at 429 00:23:32,760 --> 00:23:36,199 Speaker 1: good prices. I do see value. I see value in 430 00:23:36,280 --> 00:23:40,960 Speaker 1: several sectors. I think large cap technology has begun to 431 00:23:41,080 --> 00:23:45,240 Speaker 1: look very attractive. I'm back very large long in Amazon 432 00:23:45,720 --> 00:23:48,920 Speaker 1: as well as Alphabet and Microsoft. I think that their 433 00:23:48,960 --> 00:23:52,600 Speaker 1: competitive modes, if you think about it, have improved in 434 00:23:52,640 --> 00:23:56,639 Speaker 1: the last three years, and all these less well capitalized 435 00:23:56,760 --> 00:24:00,199 Speaker 1: competitors are falling by the wayside as well. If you 436 00:24:00,200 --> 00:24:03,679 Speaker 1: look at the NASTAC one hundred UM, the index is 437 00:24:03,720 --> 00:24:07,959 Speaker 1: selling at roughly four times sales and that's UH compared 438 00:24:08,000 --> 00:24:11,359 Speaker 1: to eight point five times at the peak in November December. 439 00:24:11,560 --> 00:24:15,800 Speaker 1: I'm buying bank I'm buying the banks UM, which Bank 440 00:24:15,800 --> 00:24:18,880 Speaker 1: of America, wells Fargo. As rates go higher and stay 441 00:24:18,960 --> 00:24:23,359 Speaker 1: higher for longer, the interest rates UH. The industry is 442 00:24:23,400 --> 00:24:26,320 Speaker 1: interest rates sensitive and assets sensors. And finally, I'm very 443 00:24:26,400 --> 00:24:30,200 Speaker 1: high on cannabis stocks UM. I own Green Thumb Industries, 444 00:24:30,240 --> 00:24:32,800 Speaker 1: which is the Krem Della Kreme. I own a small 445 00:24:32,800 --> 00:24:36,560 Speaker 1: stock terrorist t R SSF, which is benefiting from the 446 00:24:36,720 --> 00:24:40,199 Speaker 1: New Jersey exposure, is managed by the best executive in 447 00:24:40,200 --> 00:24:44,480 Speaker 1: the business, Jason Wilde. And in terms of unfavorable sectors, 448 00:24:44,760 --> 00:24:49,080 Speaker 1: I'd avoid all companies naturally. They are heavily indebted and 449 00:24:49,160 --> 00:24:52,520 Speaker 1: have large debt maturities coming up. And if you look 450 00:24:52,560 --> 00:24:56,840 Speaker 1: at companies like Carnival Cruise Lines and Carvana, they come 451 00:24:56,880 --> 00:24:59,439 Speaker 1: to mind, of course. And then there is f t X. 452 00:25:00,200 --> 00:25:01,679 Speaker 1: I want to go, Doug, what do you? What do you? 453 00:25:01,840 --> 00:25:04,159 Speaker 1: You know? This is removed from Doug cast folks, but 454 00:25:04,960 --> 00:25:07,679 Speaker 1: Doug cast on you and I have seen this a 455 00:25:07,760 --> 00:25:11,600 Speaker 1: million times before. And basically, to come on of this 456 00:25:12,440 --> 00:25:15,320 Speaker 1: is whatever the bigcoin chat chat chat is, you can 457 00:25:15,400 --> 00:25:18,160 Speaker 1: make eight percent with us, or whatever the bigcoin chat 458 00:25:18,240 --> 00:25:20,600 Speaker 1: chat chat is, you can make ten percent. This is 459 00:25:20,640 --> 00:25:24,120 Speaker 1: like the annuities Doug in our ut. I mean, we 460 00:25:24,160 --> 00:25:26,399 Speaker 1: have we seen this before and we should learn a 461 00:25:26,440 --> 00:25:29,640 Speaker 1: lesson from all this. Pol Um. By the way, I'm 462 00:25:29,640 --> 00:25:33,000 Speaker 1: looking forward to ft X, the movie starring Jonah Hill 463 00:25:33,040 --> 00:25:38,040 Speaker 1: as Sam Banquin. Fraud. But I've long been an outspoken 464 00:25:38,040 --> 00:25:45,359 Speaker 1: crypto bail bear, calling it a backslapping millennium fraud clear 465 00:25:45,560 --> 00:25:49,639 Speaker 1: many times with you in barrens and elsewhere. I like 466 00:25:49,720 --> 00:25:54,080 Speaker 1: what Charlie Munger said. He described bigcoin as stupid and evil, 467 00:25:54,840 --> 00:25:57,879 Speaker 1: and I think it's an epic failure that has plumbed 468 00:25:57,920 --> 00:26:01,080 Speaker 1: the depths of human investing. File Ali. It was a 469 00:26:01,080 --> 00:26:06,560 Speaker 1: monumental failure, failure accountability, transparency, filled with a numerous supporters 470 00:26:06,560 --> 00:26:11,359 Speaker 1: who possessed clear but often unexposed conflicts of interest and 471 00:26:11,440 --> 00:26:16,520 Speaker 1: driven by raudulent actions barring customer funds, creating FTX coins, 472 00:26:16,600 --> 00:26:20,760 Speaker 1: using them, showing them as reserves among the nonsensical and okay, 473 00:26:21,040 --> 00:26:23,520 Speaker 1: stupid and the other thing. The final thing is that 474 00:26:23,680 --> 00:26:27,320 Speaker 1: we should always remind us elves that we, as Benjamin Disraeli, 475 00:26:27,359 --> 00:26:29,639 Speaker 1: the Exchequer of England said, what we've learned from history 476 00:26:29,720 --> 00:26:32,080 Speaker 1: is that we haven't learned from history. And these things 477 00:26:32,240 --> 00:26:35,520 Speaker 1: endron ft X world Coom made off. They always occur 478 00:26:35,560 --> 00:26:38,359 Speaker 1: in the lot of stages of a bull market. Okay, 479 00:26:38,359 --> 00:26:40,800 Speaker 1: we gotta leave it there. Doug Cass, thank you so much. 480 00:26:40,840 --> 00:26:43,520 Speaker 1: Great to talk to you about Justin Verlander, his MVP. 481 00:26:43,880 --> 00:26:47,600 Speaker 1: This is the Bloomberg Surveillance Podcast. Thanks for listening. Join 482 00:26:47,720 --> 00:26:51,040 Speaker 1: us live weekdays from seven to ten ami Eastern on 483 00:26:51,160 --> 00:26:55,399 Speaker 1: Bloomberg Radio and on Bloomberg Television each day from six 484 00:26:55,520 --> 00:26:59,240 Speaker 1: to nine am for insight from the best in economics, 485 00:26:59,320 --> 00:27:03,720 Speaker 1: finance and astment and international relations. And subscribe to the 486 00:27:03,920 --> 00:27:08,560 Speaker 1: Surveillance podcast on Apple podcast, SoundCloud, Bloomberg dot com, and 487 00:27:08,600 --> 00:27:11,919 Speaker 1: of course, on the terminal. I'm Tom keene In. This 488 00:27:13,000 --> 00:27:13,679 Speaker 1: is Bloomberg.