1 00:00:01,440 --> 00:00:05,320 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 2 00:00:05,400 --> 00:00:08,079 Speaker 1: weekdays at ten am Eastern on Affle car Playing and 3 00:00:08,240 --> 00:00:11,080 Speaker 1: broud Otto with the Bloomberg Business app. Listen on demand 4 00:00:11,160 --> 00:00:15,520 Speaker 1: wherever you get your podcasts, or watch us live on YouTube. 5 00:00:16,800 --> 00:00:18,159 Speaker 2: Well, a little bit of FED speak. We had some 6 00:00:18,200 --> 00:00:21,440 Speaker 2: economic data today with the jobs claims kind of right 7 00:00:21,480 --> 00:00:24,079 Speaker 2: in line with expectations. I don't know, I kind of 8 00:00:24,120 --> 00:00:27,520 Speaker 2: feel like this FED obviously has taken March off the 9 00:00:27,560 --> 00:00:29,400 Speaker 2: table for a cut, and I don't know where we 10 00:00:29,440 --> 00:00:31,160 Speaker 2: are from May, maybe fifty to fifty. I don't know 11 00:00:31,200 --> 00:00:32,960 Speaker 2: what the worp thing mcgiggie says, But let's talk to 12 00:00:33,040 --> 00:00:36,280 Speaker 2: somebody who actually does this for a living. That would 13 00:00:36,320 --> 00:00:39,159 Speaker 2: be one Ira Jersey, chief US interest rate strategist for 14 00:00:39,159 --> 00:00:42,720 Speaker 2: Bloomberg Intelligence. He is down in the Bloomberg campus getting 15 00:00:42,800 --> 00:00:45,720 Speaker 2: ready for what will be a spectacular lunch. I'm sure, 16 00:00:45,720 --> 00:00:47,120 Speaker 2: because that's how they do it down there in Prince. 17 00:00:47,440 --> 00:00:48,239 Speaker 3: Let's just talk about that. 18 00:00:48,320 --> 00:00:51,000 Speaker 2: Yeah, I know, I mean, it's unbelievable. They did a renovation, 19 00:00:51,200 --> 00:00:52,720 Speaker 2: which I don't even why they did a renovation because 20 00:00:52,720 --> 00:00:55,120 Speaker 2: it was already a great facility. But it's even better now, 21 00:00:55,280 --> 00:00:59,560 Speaker 2: all right, Ira, talk to us about May. I'll give 22 00:00:59,600 --> 00:01:01,200 Speaker 2: you March. We're not going to do anything in March. 23 00:01:01,280 --> 00:01:04,640 Speaker 2: That's fine, But I'm focusing now on May. I could 24 00:01:04,720 --> 00:01:07,199 Speaker 2: argue that they don't need to do anything in May. 25 00:01:07,640 --> 00:01:08,000 Speaker 2: What do you think? 26 00:01:08,080 --> 00:01:10,000 Speaker 4: Yeah, And there's certainly and there's Paul, There certainly are 27 00:01:10,080 --> 00:01:13,440 Speaker 4: people who are arguing that very that very thing. When 28 00:01:13,440 --> 00:01:15,440 Speaker 4: you look at the recent data, it does seem like 29 00:01:15,560 --> 00:01:18,400 Speaker 4: the economy is not selling down very much. You don't 30 00:01:18,400 --> 00:01:21,119 Speaker 4: have you have some signals that maybe inflation will kind 31 00:01:21,120 --> 00:01:24,000 Speaker 4: of stabilize here instead of continuing to fall. So that's 32 00:01:24,080 --> 00:01:26,560 Speaker 4: leading some people to think that the Federal Reserve might 33 00:01:26,640 --> 00:01:28,840 Speaker 4: not might not cut in May. So we are pricing, 34 00:01:28,880 --> 00:01:32,240 Speaker 4: like you said, using the WRP function, around around a 35 00:01:32,400 --> 00:01:34,880 Speaker 4: three quarters chance of a cut in May. And I 36 00:01:34,920 --> 00:01:38,160 Speaker 4: think that that's probably the correct pricing given the information 37 00:01:38,319 --> 00:01:41,520 Speaker 4: that we currently have. I think the you know, the 38 00:01:41,560 --> 00:01:43,160 Speaker 4: thing that we have to remember, though, is that the 39 00:01:43,200 --> 00:01:46,679 Speaker 4: Federal Reserve doesn't want the difference between inflation and the 40 00:01:46,720 --> 00:01:49,120 Speaker 4: Fed funds rate to get too wide because they think 41 00:01:49,120 --> 00:01:51,520 Speaker 4: that that will tighten financial conditions too much and slow 42 00:01:51,560 --> 00:01:55,560 Speaker 4: the economy more. Now you know, how effective is monetary 43 00:01:55,560 --> 00:01:57,640 Speaker 4: policy right now? And what is the lead and lags 44 00:01:57,680 --> 00:02:00,680 Speaker 4: of monetary policy right now? No one really knows, and 45 00:02:00,960 --> 00:02:03,960 Speaker 4: it's certainly much longer this time, I think because of 46 00:02:04,000 --> 00:02:06,640 Speaker 4: some of the structural changes, like everyone with low mortgage 47 00:02:06,720 --> 00:02:09,240 Speaker 4: rates that are don't have to refinance again and won't 48 00:02:09,840 --> 00:02:13,640 Speaker 4: when interest rates are four hundred basis points above where 49 00:02:14,080 --> 00:02:15,119 Speaker 4: where their mortgages are. 50 00:02:15,240 --> 00:02:17,560 Speaker 5: That would be me so fair enough, IRA, And you 51 00:02:17,600 --> 00:02:20,320 Speaker 5: had Thomas Barkin talking to Michael McKee earlier saying that 52 00:02:20,360 --> 00:02:22,880 Speaker 5: it is conceivable that the neutral rate has risen after 53 00:02:22,919 --> 00:02:23,520 Speaker 5: the pandemic. 54 00:02:23,639 --> 00:02:25,840 Speaker 3: So it feels like the thing that kind of throws some. 55 00:02:25,840 --> 00:02:27,680 Speaker 5: Cold water is that if a higher neutral rate, then 56 00:02:27,680 --> 00:02:29,560 Speaker 5: were just less tight than we thought. Therefore we can 57 00:02:29,639 --> 00:02:31,679 Speaker 5: wait longer to cut or you don't have to cut 58 00:02:31,680 --> 00:02:32,080 Speaker 5: as much. 59 00:02:33,080 --> 00:02:35,880 Speaker 4: Sure, and the neutral rate almost certainly is higher, right 60 00:02:35,880 --> 00:02:38,760 Speaker 4: the question is how much higher We had a time 61 00:02:38,800 --> 00:02:43,200 Speaker 4: period in between the crises, both from two thousand and 62 00:02:43,280 --> 00:02:46,600 Speaker 4: nine call it to twenty twenty to the pandemic, where 63 00:02:46,840 --> 00:02:49,120 Speaker 4: where our star The real neutral rate, whatever you want 64 00:02:49,120 --> 00:02:52,239 Speaker 4: to call it, was probably exceptionally low. And one of 65 00:02:52,280 --> 00:02:54,359 Speaker 4: the big reasons for that was just the lack of 66 00:02:54,400 --> 00:02:59,680 Speaker 4: volatility in the economy. Also lack of volatility in some markets, 67 00:02:59,680 --> 00:03:01,799 Speaker 4: although you know, obviously markets went up and down, but 68 00:03:02,560 --> 00:03:05,800 Speaker 4: generally speaking, you had a situation where where you had 69 00:03:05,800 --> 00:03:09,960 Speaker 4: exceptionally low our store. So you know, our store is higher, right, 70 00:03:10,120 --> 00:03:12,680 Speaker 4: I mean there's almost people who are saying that it's not. 71 00:03:13,040 --> 00:03:15,200 Speaker 4: I think, you know, aren't considering that we're in a 72 00:03:15,200 --> 00:03:17,919 Speaker 4: different regime now than we were the last ten years. 73 00:03:18,280 --> 00:03:20,680 Speaker 4: I think the question is it higher like it was 74 00:03:20,680 --> 00:03:23,000 Speaker 4: in two thousand and five or nineteen ninety five or 75 00:03:23,240 --> 00:03:26,800 Speaker 4: you know, nineteen eighty and I suspect that that, yes, 76 00:03:26,919 --> 00:03:28,880 Speaker 4: our store is higher than it was the last decade 77 00:03:29,000 --> 00:03:32,160 Speaker 4: or so, but we're not going back to the nineteen 78 00:03:32,200 --> 00:03:34,680 Speaker 4: eighties when you know, the real neutral rate was probably 79 00:03:34,680 --> 00:03:37,080 Speaker 4: somewhere closer to eight or nine percent. So you know, 80 00:03:37,120 --> 00:03:40,200 Speaker 4: we're not We're not there, but we're also not at 81 00:03:40,240 --> 00:03:42,280 Speaker 4: fifty basis points where at one and a half percent 82 00:03:42,560 --> 00:03:45,120 Speaker 4: or two percent something like that is our estimate of 83 00:03:45,120 --> 00:03:45,840 Speaker 4: where our star is. 84 00:03:46,280 --> 00:03:48,960 Speaker 2: So if I go you know, to the Morgan Stanley 85 00:03:49,160 --> 00:03:51,680 Speaker 2: fixing come trading floor and go over to the government desk, 86 00:03:51,720 --> 00:03:53,520 Speaker 2: I kind of feeling the traders there just kind of 87 00:03:53,920 --> 00:03:56,240 Speaker 2: scrolling through TikTok there's not a lot going on. It 88 00:03:56,280 --> 00:04:00,000 Speaker 2: feels like it's a trade range bound kind of trading range, 89 00:04:00,800 --> 00:04:02,800 Speaker 2: Is that right, iron, What maybe gets us out of that? 90 00:04:03,480 --> 00:04:05,960 Speaker 4: Yeah, we've been in a range. I think we'll probably 91 00:04:06,000 --> 00:04:07,920 Speaker 4: stay into a range at least until next week when 92 00:04:07,960 --> 00:04:10,839 Speaker 4: we get CPI in retail sales. You know, I don't 93 00:04:10,880 --> 00:04:12,800 Speaker 4: see really what would knock us out of this. So 94 00:04:13,240 --> 00:04:16,960 Speaker 4: it's not unusual for ten longer term treasury yields to 95 00:04:16,960 --> 00:04:20,080 Speaker 4: fall into some thirty to fifty base point range you know, 96 00:04:20,160 --> 00:04:22,240 Speaker 4: call it forty basis point range right now that we're in, 97 00:04:22,520 --> 00:04:24,840 Speaker 4: and just chop around within that until you get some 98 00:04:24,880 --> 00:04:29,839 Speaker 4: impetus that's usually fundamentally driven that drives the market out 99 00:04:29,839 --> 00:04:33,000 Speaker 4: of those ranges. And sometimes those ranges last for months 100 00:04:33,040 --> 00:04:34,560 Speaker 4: and months at a time. There was a you know, 101 00:04:34,560 --> 00:04:37,120 Speaker 4: I remember going back to twenty fifteen when we were 102 00:04:37,160 --> 00:04:39,000 Speaker 4: in the same range for about six months and I 103 00:04:39,000 --> 00:04:42,360 Speaker 4: was thinking about switching careers because there was nothing right about. So, 104 00:04:42,720 --> 00:04:44,520 Speaker 4: you know, I don't think we're going there right. I 105 00:04:44,520 --> 00:04:47,080 Speaker 4: think that we'll get some more information over at least 106 00:04:47,080 --> 00:04:49,840 Speaker 4: the next six weeks that gives us a better direction, 107 00:04:49,880 --> 00:04:51,920 Speaker 4: and maybe that direction and I think that this is 108 00:04:51,960 --> 00:04:55,360 Speaker 4: something that is permeating some of the trading desks, is, Hey, 109 00:04:55,360 --> 00:04:57,640 Speaker 4: what happens if the FED doesn't cut as much as 110 00:04:57,640 --> 00:05:00,120 Speaker 4: the market's pricing. What happens if the FED only it 111 00:05:00,120 --> 00:05:02,520 Speaker 4: cuts two or three times? In fact, we have a 112 00:05:02,560 --> 00:05:05,080 Speaker 4: model that you can find out, go to Beico Models, 113 00:05:05,360 --> 00:05:10,160 Speaker 4: and we look at the options market on some industry 114 00:05:10,160 --> 00:05:12,680 Speaker 4: of futures contracts, and what we say is that the 115 00:05:12,720 --> 00:05:15,360 Speaker 4: market's pricing for a twenty percent chance that the FED 116 00:05:15,440 --> 00:05:18,480 Speaker 4: only cuts once or twice this year. And that's something 117 00:05:18,520 --> 00:05:20,880 Speaker 4: that we have to keep in mind. That's a real 118 00:05:20,920 --> 00:05:23,839 Speaker 4: possibility now, and if we continue to have such good data, 119 00:05:24,160 --> 00:05:26,200 Speaker 4: I think it becomes a higher and higher probability as 120 00:05:26,240 --> 00:05:26,880 Speaker 4: a year goes on. 121 00:05:27,400 --> 00:05:29,640 Speaker 5: That's really interesting. I wonder what would happen in the 122 00:05:29,680 --> 00:05:32,800 Speaker 5: markets in that case. Like equities may I mean like 123 00:05:32,839 --> 00:05:35,560 Speaker 5: that equities may like get okay if the growth is 124 00:05:35,640 --> 00:05:37,840 Speaker 5: really there, But the bond market, I don't know. I 125 00:05:37,880 --> 00:05:39,799 Speaker 5: think that would be a real sea change. We've already 126 00:05:39,839 --> 00:05:43,040 Speaker 5: come in from like six or seven to four real 127 00:05:43,120 --> 00:05:44,800 Speaker 5: quick twenty seconds thirty year today? 128 00:05:44,800 --> 00:05:45,680 Speaker 3: Are you looked? You care? 129 00:05:46,839 --> 00:05:47,119 Speaker 1: Yeah? 130 00:05:47,120 --> 00:05:50,520 Speaker 4: Well, yesterday's ten year auction went very well, So I 131 00:05:50,600 --> 00:05:52,559 Speaker 4: am a little bit concerned about the thirty year today 132 00:05:52,560 --> 00:05:55,640 Speaker 4: because what we've seen sometimes is one auction does well, 133 00:05:55,680 --> 00:05:57,600 Speaker 4: the next auction does poorly, or vice versa. 134 00:05:58,440 --> 00:06:00,800 Speaker 2: Bar enough, how can you know there's an tree auction today? 135 00:06:00,880 --> 00:06:03,040 Speaker 3: Because I know pays. 136 00:06:02,839 --> 00:06:03,680 Speaker 2: Attention to stuff. 137 00:06:03,720 --> 00:06:06,120 Speaker 3: To be totally fair, she pays attention in class. Bloomberg 138 00:06:06,160 --> 00:06:09,000 Speaker 3: Daybreak is really helpful with these things. So I said 139 00:06:09,000 --> 00:06:11,240 Speaker 3: it you get after that, work it up there. Oh 140 00:06:11,360 --> 00:06:12,200 Speaker 3: listen John Tucker. 141 00:06:12,240 --> 00:06:14,880 Speaker 5: But if you read it Bloomberg day Break after five 142 00:06:15,000 --> 00:06:18,960 Speaker 5: thirty am, they have really concise bits, not long stories, 143 00:06:19,120 --> 00:06:20,839 Speaker 5: really bite sized information for you. 144 00:06:20,880 --> 00:06:22,440 Speaker 3: And then I cut and past, put them on my notes, 145 00:06:22,480 --> 00:06:23,159 Speaker 3: put them on my thing. 146 00:06:23,240 --> 00:06:24,760 Speaker 2: Look at shoot our jersey. 147 00:06:24,760 --> 00:06:27,279 Speaker 3: Thanks no more organized in act intelligence. 148 00:06:26,880 --> 00:06:28,560 Speaker 2: Senior right strateg Just thank you so much for joining 149 00:06:28,600 --> 00:06:30,640 Speaker 2: us and learning. I mean, this is how she gets 150 00:06:30,680 --> 00:06:32,680 Speaker 2: so smart and see. But the key thing is if 151 00:06:32,720 --> 00:06:35,640 Speaker 2: you get in after it five thirty this is Bloomberg. 152 00:06:39,839 --> 00:06:43,760 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 153 00:06:43,839 --> 00:06:46,880 Speaker 1: weekdays at ten am Eastern on Apple card Play and 154 00:06:46,880 --> 00:06:49,800 Speaker 1: Android Auto with the Bloomberg Business app. You can also 155 00:06:49,880 --> 00:06:53,360 Speaker 1: listen live on Amazon Alexa from our flagship New York Station, 156 00:06:53,720 --> 00:06:56,479 Speaker 1: just say Alexa playing Bloomberg eleven thirty. 157 00:06:58,360 --> 00:07:00,880 Speaker 2: Let's go back to Disney, their stock that's having a 158 00:07:00,880 --> 00:07:03,960 Speaker 2: good day, up about nine percent here in early trading 159 00:07:04,000 --> 00:07:07,040 Speaker 2: on the back of a quarter that for some people was, 160 00:07:07,240 --> 00:07:09,960 Speaker 2: you know, kind of like boy, I think they've got 161 00:07:09,960 --> 00:07:12,440 Speaker 2: their handle on this thing now. And Laura Martin at 162 00:07:12,440 --> 00:07:14,720 Speaker 2: Needham she upgraded the stock to a buy today, So 163 00:07:14,760 --> 00:07:18,080 Speaker 2: that's helping the stock up nine point nine percent here today. 164 00:07:18,200 --> 00:07:20,400 Speaker 2: Let's check in with Getha rang Anatha and she covers 165 00:07:20,440 --> 00:07:23,800 Speaker 2: all the media stocks in the industry for Bloomberg Intelligence, 166 00:07:23,800 --> 00:07:26,560 Speaker 2: she's been all over this name here. Hey, Keith, the 167 00:07:26,600 --> 00:07:28,400 Speaker 2: stock's up about ten percent here. What do you think 168 00:07:28,400 --> 00:07:30,800 Speaker 2: the market's reacting to here today? 169 00:07:31,960 --> 00:07:34,960 Speaker 6: Yeah, I mean Disney is definitely back, Paul back with 170 00:07:35,040 --> 00:07:38,400 Speaker 6: a bank. Market is reacting to all of the profitability 171 00:07:38,440 --> 00:07:40,680 Speaker 6: that they're seeing with this company. I mean, one of 172 00:07:40,720 --> 00:07:43,720 Speaker 6: the big pain points with Disney has really been the 173 00:07:43,800 --> 00:07:46,600 Speaker 6: lack of streaming profitability. But now there seems to be 174 00:07:47,120 --> 00:07:49,840 Speaker 6: a clear path to the streaming business kind of getting 175 00:07:49,840 --> 00:07:52,640 Speaker 6: to that profitability metric. So we saw the losses come 176 00:07:52,640 --> 00:07:55,760 Speaker 6: in way below expectations. It was sixty five percent below 177 00:07:55,760 --> 00:07:58,760 Speaker 6: what people were projecting. They're still kind of guiding to 178 00:07:59,160 --> 00:08:02,320 Speaker 6: you know, hitting profitability by the September quarter, but most people, 179 00:08:02,320 --> 00:08:05,280 Speaker 6: i think on the street expected to happen much much sooner. 180 00:08:05,520 --> 00:08:07,560 Speaker 6: And then Hugh Johnston, who's the new CFO and this 181 00:08:07,680 --> 00:08:10,920 Speaker 6: was his first call with Disney, basically said that look 182 00:08:11,240 --> 00:08:15,560 Speaker 6: to or expect double digit operating margins in the streaming business. 183 00:08:15,600 --> 00:08:18,000 Speaker 6: And I think that was something that was really really 184 00:08:18,080 --> 00:08:20,640 Speaker 6: powerful because we know that, you know, the number that 185 00:08:20,680 --> 00:08:23,440 Speaker 6: we're all chasing is that twenty percent operating margin where 186 00:08:23,480 --> 00:08:25,480 Speaker 6: you know Netflix has been with their streaming business. 187 00:08:25,640 --> 00:08:28,080 Speaker 5: So the based on what we got, what is your 188 00:08:28,160 --> 00:08:30,320 Speaker 5: question today versus your question yesterday? 189 00:08:31,400 --> 00:08:33,959 Speaker 6: I mean, I think the one area that we kind 190 00:08:33,960 --> 00:08:36,839 Speaker 6: of still need clarity is how all of this the 191 00:08:36,920 --> 00:08:39,920 Speaker 6: streaming bundles are going to work. So it's really good 192 00:08:39,920 --> 00:08:43,520 Speaker 6: to see them kind of be proactive and go out 193 00:08:43,559 --> 00:08:47,360 Speaker 6: with their own solution. So they have that sports super 194 00:08:47,400 --> 00:08:49,680 Speaker 6: app that's coming out a little bit later this year 195 00:08:49,760 --> 00:08:52,280 Speaker 6: in conjunction with Fox and Warner Brothers. They have their 196 00:08:52,360 --> 00:08:56,760 Speaker 6: own ESPN Plus standalone app. Again a little bit of 197 00:08:57,520 --> 00:08:59,559 Speaker 6: you know, we're not really sure whether those are necessarily 198 00:08:59,600 --> 00:09:01,480 Speaker 6: going to can applies to each other. I don't think so. 199 00:09:01,559 --> 00:09:03,680 Speaker 6: I think, really Disney, what they're trying to do here 200 00:09:03,800 --> 00:09:07,040 Speaker 6: is kind of create this this super bundle because they 201 00:09:07,240 --> 00:09:10,520 Speaker 6: know that, you know, content bundling works, and everybody's kind 202 00:09:10,520 --> 00:09:12,920 Speaker 6: of looking aggregation is the holy grail, and I think 203 00:09:12,920 --> 00:09:15,120 Speaker 6: Disney wants to be at the forefront of it. But 204 00:09:15,160 --> 00:09:17,560 Speaker 6: definitely we need a little bit more kind of clarity 205 00:09:17,600 --> 00:09:19,880 Speaker 6: at least around like what the financial value creation is 206 00:09:19,920 --> 00:09:20,280 Speaker 6: going to be. 207 00:09:20,960 --> 00:09:23,360 Speaker 2: How about the theme park business that seems to continue 208 00:09:23,360 --> 00:09:26,240 Speaker 2: to be a really solid business for them, and I 209 00:09:26,280 --> 00:09:27,960 Speaker 2: know they you know, they announced several months ago that 210 00:09:27,960 --> 00:09:30,720 Speaker 2: they're really stepping up their investment in their theme parks 211 00:09:30,720 --> 00:09:32,200 Speaker 2: and their cruises and all that kind of stuff. How 212 00:09:32,200 --> 00:09:34,440 Speaker 2: did that business do very very well? 213 00:09:34,480 --> 00:09:38,040 Speaker 6: So again, operating income was for the quarter was well 214 00:09:38,080 --> 00:09:40,440 Speaker 6: above three billion dollars. That was again above what the 215 00:09:40,440 --> 00:09:42,840 Speaker 6: street was expecting. And really what we're seeing is a 216 00:09:42,880 --> 00:09:45,800 Speaker 6: lot of momentum at the international parks. So they opened, 217 00:09:46,040 --> 00:09:48,480 Speaker 6: you know, they've opened so many new attractions in their 218 00:09:49,160 --> 00:09:52,160 Speaker 6: overseas properties. You have a new Frozen Land in Hong Kong. 219 00:09:52,440 --> 00:09:56,520 Speaker 6: You have the new Zootopia attraction in Shanghai, and both 220 00:09:56,559 --> 00:09:59,559 Speaker 6: of those are doing really really well for the company, 221 00:09:59,600 --> 00:10:01,640 Speaker 6: and that has really enabled them to take, you know, 222 00:10:01,679 --> 00:10:05,400 Speaker 6: implement all of these price increases. So international parks really 223 00:10:05,480 --> 00:10:08,600 Speaker 6: kind of doing extremely well. Domestically. There's a little bit 224 00:10:08,600 --> 00:10:11,040 Speaker 6: of pressure from wage inflation, there's a little bit of 225 00:10:11,040 --> 00:10:13,040 Speaker 6: pressure from you know, tough comms from like the Walt 226 00:10:13,040 --> 00:10:16,400 Speaker 6: Disney World fifty that anniversary celebration, but again, you know, 227 00:10:16,600 --> 00:10:19,640 Speaker 6: just transient parks are really set up very very well, 228 00:10:20,080 --> 00:10:22,600 Speaker 6: and you mentioned the sixty billion dollar investment. Now seventy 229 00:10:22,640 --> 00:10:26,640 Speaker 6: percent of that capex is going to be towards new attractions, 230 00:10:26,720 --> 00:10:29,800 Speaker 6: so this is really going to be a major, major 231 00:10:29,920 --> 00:10:31,480 Speaker 6: profit driver for them going forward. 232 00:10:32,080 --> 00:10:34,920 Speaker 5: Git there was a journal article that I just felt 233 00:10:34,960 --> 00:10:37,320 Speaker 5: like helped someone like me who's not seeped in Disney, 234 00:10:37,360 --> 00:10:41,079 Speaker 5: like you guys, understand how they're just seeping in to 235 00:10:41,320 --> 00:10:44,600 Speaker 5: all the Americana that's out there. They said, Taylor Swift, 236 00:10:44,679 --> 00:10:48,600 Speaker 5: football and Fortnite, but like anywhere that you will want 237 00:10:48,640 --> 00:10:50,720 Speaker 5: to be or listen to or watch. 238 00:10:50,520 --> 00:10:53,000 Speaker 3: Disney will be there. What did you make of the 239 00:10:53,040 --> 00:10:54,559 Speaker 3: Fortnite investment? 240 00:10:55,840 --> 00:10:59,040 Speaker 6: Super smart move by them, right, It's so strategic, it's 241 00:10:59,080 --> 00:11:01,280 Speaker 6: so smart, and it's still a kind of not a 242 00:11:01,400 --> 00:11:04,240 Speaker 6: huge investment. One point five billion gives them some steak, 243 00:11:04,320 --> 00:11:06,120 Speaker 6: gives them some skin in the game, and there's a 244 00:11:06,160 --> 00:11:08,360 Speaker 6: lot of upside, not too much downside. So I think 245 00:11:08,400 --> 00:11:11,000 Speaker 6: a really good way for them. And remember, Alex, they've 246 00:11:11,000 --> 00:11:13,520 Speaker 6: had this kind of really checkered past when it comes 247 00:11:13,520 --> 00:11:15,160 Speaker 6: to video games. It's not that they haven't been there. 248 00:11:15,200 --> 00:11:17,679 Speaker 6: They were in the publishing business. Didn't really work out 249 00:11:17,679 --> 00:11:21,000 Speaker 6: for them. They exited that business in twenty sixteen started 250 00:11:21,080 --> 00:11:23,800 Speaker 6: licensing out a lot of their content. But you know, licensing, 251 00:11:23,800 --> 00:11:26,360 Speaker 6: you're still kind of this passive participant. They really need 252 00:11:26,400 --> 00:11:28,359 Speaker 6: to be there. They need to be an active participant 253 00:11:28,360 --> 00:11:31,360 Speaker 6: in the video gaming industry. There's so much overlap between 254 00:11:31,400 --> 00:11:33,440 Speaker 6: all of the audiences that go to the you know, 255 00:11:33,440 --> 00:11:37,000 Speaker 6: the Disney parks and you know the people who are gaming. Right, 256 00:11:37,000 --> 00:11:39,320 Speaker 6: it's all these youngsters and they really want to be there, 257 00:11:40,160 --> 00:11:41,720 Speaker 6: and this is a great way for them to do it. 258 00:11:42,440 --> 00:11:44,720 Speaker 2: Well, listener, it just writes in here and says Carolo. 259 00:11:44,800 --> 00:11:48,560 Speaker 2: Swift also announced her concert movie would be exclusively on 260 00:11:48,679 --> 00:11:50,840 Speaker 2: Disney Plus starting next month. 261 00:11:51,240 --> 00:11:54,200 Speaker 5: Thank you for that, with five new songs. Really, yeah, 262 00:11:54,240 --> 00:11:55,839 Speaker 5: so you already saw it. You're gonna want to see 263 00:11:55,840 --> 00:11:58,400 Speaker 5: it again because there's five new performances. 264 00:11:57,880 --> 00:12:00,400 Speaker 2: On Contucker's all fired up for that, all right, So. 265 00:12:00,440 --> 00:12:02,040 Speaker 3: I'm going to address it throughout the two You were 266 00:12:02,040 --> 00:12:02,319 Speaker 3: going to. 267 00:12:02,240 --> 00:12:04,440 Speaker 2: Have to say exactly. He to talk to us about 268 00:12:04,760 --> 00:12:07,040 Speaker 2: the movie business to film, the entertainment business that was 269 00:12:07,640 --> 00:12:10,920 Speaker 2: at one point for a long time just a sort 270 00:12:11,000 --> 00:12:15,280 Speaker 2: of tremendous value. Just smash it after smash it, billion 271 00:12:15,320 --> 00:12:18,160 Speaker 2: dollar box office became the norm. What are they saying 272 00:12:18,200 --> 00:12:19,880 Speaker 2: about their theatrical business. 273 00:12:20,320 --> 00:12:22,439 Speaker 6: Yeah, and they were asked about this last night, Paul, 274 00:12:22,480 --> 00:12:25,640 Speaker 6: And you know, the content the studio has not really 275 00:12:25,679 --> 00:12:29,439 Speaker 6: been the blockbuster you know that it was. We've had 276 00:12:29,440 --> 00:12:32,080 Speaker 6: a whole string of misfires over the past few months. 277 00:12:32,160 --> 00:12:34,520 Speaker 6: But I think what Barb Bager was saying is they 278 00:12:34,520 --> 00:12:37,280 Speaker 6: are in the process of rebuilding. The whole content pipeline 279 00:12:37,320 --> 00:12:40,480 Speaker 6: is refilling. They're having this really smart move here with 280 00:12:40,520 --> 00:12:43,480 Speaker 6: this new Taylor Swift movie coming out on March fifteenth. 281 00:12:43,559 --> 00:12:46,240 Speaker 6: And then they spoke about, you know, having this new 282 00:12:46,320 --> 00:12:48,720 Speaker 6: Moana movie. This was originally going to be a series 283 00:12:48,760 --> 00:12:50,920 Speaker 6: on Disney Plus it's it's now going to be a theatrical, 284 00:12:51,040 --> 00:12:54,319 Speaker 6: full blown theatrical release. And again we're prepping for twenty 285 00:12:54,400 --> 00:12:57,240 Speaker 6: twenty six, really, which is going to be the biggest 286 00:12:57,280 --> 00:12:59,760 Speaker 6: year for the box office ever since the pandemic, and 287 00:12:59,840 --> 00:13:01,920 Speaker 6: a lot of that will be Disney kind of driving 288 00:13:01,920 --> 00:13:04,480 Speaker 6: the slate right with. You have the whole Star Wars 289 00:13:04,520 --> 00:13:07,240 Speaker 6: coming back with Mandalorian and Grogu, you have a whole 290 00:13:07,280 --> 00:13:10,200 Speaker 6: set of Marvel releases, so it's going to be really 291 00:13:10,200 --> 00:13:12,400 Speaker 6: interesting as we kind of build to that. So again, 292 00:13:12,880 --> 00:13:15,800 Speaker 6: nothing really major in twenty twenty four, maybe other than 293 00:13:15,840 --> 00:13:18,640 Speaker 6: you know, kind of the Deadpool movie. But we're kind 294 00:13:18,640 --> 00:13:21,840 Speaker 6: of building towards a much stronger slate in twenty five twenty. 295 00:13:21,880 --> 00:13:24,800 Speaker 5: Nothing big coming except for the Deadpool. Excuse me, I've 296 00:13:24,840 --> 00:13:26,360 Speaker 5: been waiting for this movie for years. 297 00:13:26,400 --> 00:13:27,439 Speaker 3: Deadpool three. 298 00:13:27,920 --> 00:13:29,079 Speaker 2: You're a big fan of the franchise. 299 00:13:29,120 --> 00:13:31,320 Speaker 3: Definitely not my audience that I'm talking to right now. 300 00:13:32,280 --> 00:13:35,319 Speaker 2: Okay, I thought you said Deadpool. I thought it was 301 00:13:35,360 --> 00:13:38,199 Speaker 2: like a financial movie. I would have gone see. 302 00:13:38,040 --> 00:13:39,760 Speaker 3: That Reynolds Deadpool. 303 00:13:40,600 --> 00:13:43,320 Speaker 2: It's very brilliant. Yeah, I don't grow out much. 304 00:13:43,360 --> 00:13:46,920 Speaker 5: This is the third one having Wolverine make a little cameo. 305 00:13:47,120 --> 00:13:47,480 Speaker 3: Whatever. 306 00:13:47,559 --> 00:13:50,560 Speaker 5: Anyway, it's gonna be awesome. Paul, What do you make 307 00:13:50,600 --> 00:13:51,720 Speaker 5: of like how fast Disney was. 308 00:13:51,720 --> 00:13:54,720 Speaker 2: Able to move Well, A lot of people tell you 309 00:13:54,760 --> 00:13:56,840 Speaker 2: they didn't move fast enough. But it's I think when 310 00:13:56,880 --> 00:13:59,200 Speaker 2: i Figer came in, I mean, yeah, yeah, and it's 311 00:13:59,200 --> 00:14:00,960 Speaker 2: but the stock's been kind of dead money for a 312 00:14:00,960 --> 00:14:03,880 Speaker 2: while and Githa well knows here. It's just a question 313 00:14:03,920 --> 00:14:05,679 Speaker 2: of when can we get a sense of when the 314 00:14:05,800 --> 00:14:07,600 Speaker 2: streaming losses are going to be in the rear view mirror. 315 00:14:07,920 --> 00:14:10,400 Speaker 2: And you know, bob byger surprises. You know, I guess 316 00:14:10,520 --> 00:14:12,440 Speaker 2: a year or so ago when he said some of 317 00:14:12,440 --> 00:14:14,560 Speaker 2: these assets might be for sale, like the ABC networks, 318 00:14:14,600 --> 00:14:17,800 Speaker 2: some of the cable networks. Any update on that, no. 319 00:14:17,960 --> 00:14:20,680 Speaker 6: So you know, yes he did. He you know, we 320 00:14:20,720 --> 00:14:22,600 Speaker 6: did have him kind of say everything's up for sale, 321 00:14:22,600 --> 00:14:24,400 Speaker 6: and then he kind of walked back all of that. 322 00:14:24,960 --> 00:14:27,960 Speaker 6: And now it's see, you know, it's kind of starting 323 00:14:28,000 --> 00:14:30,320 Speaker 6: to make sense because they're obviously taking all that content, 324 00:14:30,760 --> 00:14:32,840 Speaker 6: they're putting it now on the super app, So it 325 00:14:33,120 --> 00:14:34,840 Speaker 6: makes sense for them to still kind of hold on 326 00:14:34,880 --> 00:14:37,200 Speaker 6: to their linear TV assets because they still do have 327 00:14:37,320 --> 00:14:39,760 Speaker 6: very valuable sports rights on there. So I think they're 328 00:14:39,840 --> 00:14:43,040 Speaker 6: kind of aiming for this bigger, kind of grander strategy. 329 00:14:43,360 --> 00:14:45,240 Speaker 6: I don't necessarily think that they're looking to sell any 330 00:14:45,280 --> 00:14:46,760 Speaker 6: of their linear TV networks right now. 331 00:14:46,880 --> 00:14:49,440 Speaker 2: So interesting. Okay, very good Keith, a great update, Thanks 332 00:14:49,440 --> 00:14:52,080 Speaker 2: for taking the time. KEITHA wrong and nothing. She is 333 00:14:52,160 --> 00:14:55,520 Speaker 2: the media analyst for Bloomberg Intelligence. Joining us via zoom 334 00:14:56,000 --> 00:15:00,280 Speaker 2: from the HQ down at Princeton, New Jersey. 335 00:15:00,640 --> 00:15:04,520 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 336 00:15:04,600 --> 00:15:07,320 Speaker 1: weekdays at ten am Eastern on Apple car Playing and 337 00:15:07,440 --> 00:15:10,320 Speaker 1: Broun Auto with the Bloomberg Business app. Listen on demand 338 00:15:10,360 --> 00:15:14,680 Speaker 1: wherever you get your podcasts, or watch us live on YouTube. 339 00:15:16,080 --> 00:15:18,040 Speaker 5: Here's one of the top red stories in the terminal 340 00:15:18,120 --> 00:15:22,440 Speaker 5: right now. Greenlight Capital forced to shift its strategy as 341 00:15:22,480 --> 00:15:27,400 Speaker 5: the growth of passive investing in algorithmic trading transformed the markets. 342 00:15:27,600 --> 00:15:30,600 Speaker 5: Quite a statement from David Einhorn. He spoke to barrybit Holtz, 343 00:15:30,640 --> 00:15:33,160 Speaker 5: who's the host of Masters in Business on Bloomberg Radio. 344 00:15:33,200 --> 00:15:34,760 Speaker 3: Here's part of that conversation. 345 00:15:35,720 --> 00:15:40,000 Speaker 7: I view the markets as fundamentally broken, like the fundamentally broken. 346 00:15:40,080 --> 00:15:40,920 Speaker 2: That's a big statement. 347 00:15:41,000 --> 00:15:45,360 Speaker 7: Yeah, there's value is just not a consideration for most 348 00:15:45,640 --> 00:15:48,240 Speaker 7: investment money that's out there. There's all the machine money 349 00:15:48,240 --> 00:15:51,320 Speaker 7: and algorithmic money, which doesn't have an opinion about value. 350 00:15:51,360 --> 00:15:53,840 Speaker 7: It has an opinion about price, like what is the 351 00:15:53,840 --> 00:15:56,040 Speaker 7: price going to be in fifteen minutes and I want 352 00:15:56,080 --> 00:15:58,160 Speaker 7: to be ahead of that? Or zero day options, what 353 00:15:58,240 --> 00:15:59,800 Speaker 7: is the price of the S and P or what 354 00:16:00,240 --> 00:16:02,560 Speaker 7: stock you're doing for today, what's it going to be 355 00:16:02,640 --> 00:16:05,440 Speaker 7: in the next half hour, two hours, three hours. Those 356 00:16:05,440 --> 00:16:08,960 Speaker 7: are opinions about price. Those are not opinions about value. 357 00:16:09,240 --> 00:16:13,080 Speaker 7: Passive investors have no opinion about value. They're going to 358 00:16:13,200 --> 00:16:16,680 Speaker 7: assume everybody else has done the work right, right, and 359 00:16:16,720 --> 00:16:19,600 Speaker 7: then you have all of what's left of active management, 360 00:16:19,880 --> 00:16:22,000 Speaker 7: and so much of it the value industry has gotten 361 00:16:22,000 --> 00:16:23,240 Speaker 7: completely annihilated. 362 00:16:24,560 --> 00:16:27,960 Speaker 5: That was David Einhorn speaking to Barry good Holtz, who 363 00:16:28,040 --> 00:16:31,120 Speaker 5: is the host of Masters in Business podcast. You can 364 00:16:31,120 --> 00:16:34,480 Speaker 5: definitely listen to the whole interview on that podcast. Barry 365 00:16:34,520 --> 00:16:35,840 Speaker 5: joins us now in the studio. 366 00:16:35,920 --> 00:16:38,400 Speaker 3: Barry, what was your takeaway from the interview? 367 00:16:38,440 --> 00:16:41,200 Speaker 5: I mean, you could argue, obviously he's talking his book, 368 00:16:41,240 --> 00:16:43,560 Speaker 5: but today is a beautiful case in point of like 369 00:16:43,640 --> 00:16:46,440 Speaker 5: nearing five thousand on a couple big tech stocks and 370 00:16:46,440 --> 00:16:46,800 Speaker 5: that's it. 371 00:16:47,280 --> 00:16:49,600 Speaker 8: So there were a couple of big takeaways. You know, 372 00:16:49,640 --> 00:16:53,280 Speaker 8: we didn't talk about what he said surrounding the SEC 373 00:16:53,480 --> 00:16:55,800 Speaker 8: no longer really enforcing things. She had to all enforce 374 00:16:55,840 --> 00:16:59,360 Speaker 8: a little bit of insart or trading rules, but there's 375 00:16:59,360 --> 00:17:03,240 Speaker 8: an absence there, according to Einhorn. To me, what's really 376 00:17:03,240 --> 00:17:06,560 Speaker 8: fascinating about him is, here's a guy who had a 377 00:17:06,640 --> 00:17:10,959 Speaker 8: spectacular start to his career first fifteen years, put up 378 00:17:11,000 --> 00:17:17,040 Speaker 8: incredible numbers, famously shorted Allied Capital, famously shorted Lehman Brothers 379 00:17:17,080 --> 00:17:20,440 Speaker 8: right before they went bankrupt, and then hit a rough 380 00:17:20,480 --> 00:17:24,600 Speaker 8: stretch in the twenty tens. Normally that's where a story 381 00:17:24,680 --> 00:17:28,560 Speaker 8: would end. But what makes Einhorn such a fascinating investor 382 00:17:29,040 --> 00:17:32,520 Speaker 8: and analyst, and he was very proud to describe himself 383 00:17:32,560 --> 00:17:36,359 Speaker 8: as an analyst, is they rethought their strategy. They looked 384 00:17:36,359 --> 00:17:38,879 Speaker 8: at what's changed in the structure of the market and said, 385 00:17:39,359 --> 00:17:43,679 Speaker 8: we can no longer do basic superficial value investing and 386 00:17:43,720 --> 00:17:47,360 Speaker 8: hope the market catches up. We have to change our metrics, 387 00:17:47,359 --> 00:17:49,800 Speaker 8: we have to change our approach. And for the past 388 00:17:49,840 --> 00:17:53,280 Speaker 8: five years they've been putting up really good numbers. The 389 00:17:53,600 --> 00:17:54,439 Speaker 8: shift has worked. 390 00:17:54,520 --> 00:17:56,320 Speaker 2: What did they change? What did they change till I 391 00:17:56,320 --> 00:17:56,800 Speaker 2: guess so? 392 00:17:57,440 --> 00:18:00,320 Speaker 8: What their belief and their strategy used to be is 393 00:18:01,000 --> 00:18:05,639 Speaker 8: find stocks that the market doesn't recognize the value what 394 00:18:05,720 --> 00:18:09,960 Speaker 8: he described as variant perception, buy them and wait for 395 00:18:10,000 --> 00:18:12,359 Speaker 8: the market to figure it out. Hey, you know, we 396 00:18:12,480 --> 00:18:15,160 Speaker 8: buy stocks if the pe of the market is sixteen, 397 00:18:15,560 --> 00:18:17,639 Speaker 8: we can find stocks with a pe of twelve and 398 00:18:17,680 --> 00:18:21,200 Speaker 8: eventually everybody will come to our party, he said. As 399 00:18:21,320 --> 00:18:24,960 Speaker 8: value investors have seen outflows as value funds have gone 400 00:18:25,000 --> 00:18:25,680 Speaker 8: out of business. 401 00:18:26,160 --> 00:18:27,439 Speaker 2: You can't rely on. 402 00:18:27,320 --> 00:18:29,679 Speaker 8: That sector to do that. So now we have to 403 00:18:29,720 --> 00:18:33,119 Speaker 8: find deep value stocks that are taking matters into their 404 00:18:33,119 --> 00:18:33,760 Speaker 8: own hands. 405 00:18:34,200 --> 00:18:35,159 Speaker 2: What do you mean by. 406 00:18:35,000 --> 00:18:38,480 Speaker 8: That, Well, cheap companies that have enough growth and enough 407 00:18:38,520 --> 00:18:42,400 Speaker 8: cash flow to do big increases in dividends, big increases 408 00:18:42,440 --> 00:18:45,679 Speaker 8: in share buybacks, and even if the rest of the 409 00:18:45,720 --> 00:18:50,000 Speaker 8: market doesn't figure out their own business model, will allow 410 00:18:50,040 --> 00:18:53,880 Speaker 8: their stock price to grow by returning capital to shareholders 411 00:18:54,119 --> 00:18:55,280 Speaker 8: through buybacks and dividends. 412 00:18:55,320 --> 00:18:56,400 Speaker 3: And that gets harder though. 413 00:18:56,480 --> 00:18:58,680 Speaker 5: Isn't everybody looking for exactly the same thing in a 414 00:18:58,720 --> 00:18:59,840 Speaker 5: smaller pool of candidates. 415 00:19:00,160 --> 00:19:02,920 Speaker 8: You know, back when I was on a trading desk 416 00:19:03,080 --> 00:19:06,600 Speaker 8: in the nineteen nineties, in the medieval times, there were 417 00:19:06,680 --> 00:19:10,399 Speaker 8: thousands and thousands of sales side analysts, and everybody was 418 00:19:10,440 --> 00:19:14,359 Speaker 8: looking for those sort of stocks, and there was there's 419 00:19:14,359 --> 00:19:17,320 Speaker 8: something to be said for the shift, and I think 420 00:19:17,359 --> 00:19:23,560 Speaker 8: he got this right. Algorithmic trading, quantitative analysis and passive 421 00:19:23,600 --> 00:19:29,200 Speaker 8: investing has eliminated a huge number of those analysts. Then 422 00:19:29,240 --> 00:19:32,639 Speaker 8: you take you know, the Wilshire five thousand is thirty 423 00:19:32,680 --> 00:19:35,760 Speaker 8: four hundred stocks. There aren't as many stocks as there 424 00:19:35,800 --> 00:19:40,520 Speaker 8: once were. Anything that small cap or microcap is completely overlooked. 425 00:19:40,920 --> 00:19:44,880 Speaker 8: And so the odd thing about price discovery and passive 426 00:19:44,920 --> 00:19:50,960 Speaker 8: investing is it's created these inefficiencies where value is getting overlooked. 427 00:19:51,000 --> 00:19:54,520 Speaker 8: If everybody is doing either growth or passive, it creates 428 00:19:54,560 --> 00:19:56,720 Speaker 8: an opportunity for investors like Einhorn. 429 00:19:58,160 --> 00:20:00,240 Speaker 2: Do we know how much assets he has under mounage. 430 00:20:00,400 --> 00:20:02,240 Speaker 8: I think it's about three or four billion dollars. I 431 00:20:02,240 --> 00:20:05,040 Speaker 8: mean it's off his peak. He went through a period 432 00:20:05,080 --> 00:20:08,399 Speaker 8: in the mid twenty tens markets up ten twelve percent. 433 00:20:08,480 --> 00:20:11,200 Speaker 8: They're down eight ten twelve percent. They saw a bunch 434 00:20:11,280 --> 00:20:16,680 Speaker 8: of outflows after really putting some big numbers up. In fact, 435 00:20:17,280 --> 00:20:21,199 Speaker 8: over since inception in ninety six, they've still outperformed the 436 00:20:21,280 --> 00:20:23,840 Speaker 8: S ANDP by just about double Maybe it's a touch 437 00:20:24,240 --> 00:20:27,000 Speaker 8: light of that, but not on an annual basis total 438 00:20:27,520 --> 00:20:31,480 Speaker 8: courtesy of compounding for twenty plus years. But there was 439 00:20:31,840 --> 00:20:34,520 Speaker 8: the period in the twenty tens where he spent nearly 440 00:20:34,520 --> 00:20:37,440 Speaker 8: the whole decade not putting up great numbers. And it's 441 00:20:37,480 --> 00:20:40,840 Speaker 8: only the past five years that Greenlight has begun to 442 00:20:40,880 --> 00:20:44,760 Speaker 8: outperform again. And that's what this second act is very 443 00:20:44,880 --> 00:20:48,080 Speaker 8: unusual in finance. Most people don't say, Okay, I'm going 444 00:20:48,119 --> 00:20:50,080 Speaker 8: to take everything I've done for the past twenty years, 445 00:20:50,400 --> 00:20:52,280 Speaker 8: throw it out and start over. I give a lot 446 00:20:52,280 --> 00:20:53,000 Speaker 8: of credit to him. 447 00:20:53,080 --> 00:20:55,760 Speaker 5: What's interesting too is that he mentioned you know, al goes, etc. 448 00:20:56,080 --> 00:20:58,600 Speaker 5: But also one of the top right articles, also right 449 00:20:58,600 --> 00:21:00,760 Speaker 5: now in the terminal is meme trader is fueling an 450 00:21:00,760 --> 00:21:05,280 Speaker 5: over twenty six hundred percent spike in a holographic tech firm, 451 00:21:05,320 --> 00:21:08,520 Speaker 5: meaning that like misadigive plotin getting taken out by a 452 00:21:08,520 --> 00:21:12,600 Speaker 5: bunch of random guys sitting at home on a computer 453 00:21:13,040 --> 00:21:15,000 Speaker 5: like that must be very difficult too for him to 454 00:21:15,000 --> 00:21:15,679 Speaker 5: sort of reckon with. 455 00:21:16,040 --> 00:21:18,680 Speaker 8: You know, the funny thing when you see that take 456 00:21:18,800 --> 00:21:26,679 Speaker 8: place is you have to realize that even a huge 457 00:21:26,800 --> 00:21:30,200 Speaker 8: thousand percent move in some of these meme stocks, they 458 00:21:30,320 --> 00:21:33,879 Speaker 8: have to be supported by the fundamentals. Eventually, you know, 459 00:21:34,080 --> 00:21:36,480 Speaker 8: markets will eventually. 460 00:21:35,800 --> 00:21:37,520 Speaker 3: Maybe bed bath and beyond a disagree. 461 00:21:37,640 --> 00:21:40,080 Speaker 8: Right, Well, but you know, when we look at what 462 00:21:40,119 --> 00:21:44,240 Speaker 8: happened with AMC, perfect example, they very intelligently said, hey, 463 00:21:44,359 --> 00:21:47,399 Speaker 8: what's our stock price doing up? Yere, let's float some 464 00:21:47,640 --> 00:21:50,560 Speaker 8: float some shares, Let's get get some capital in. And 465 00:21:50,600 --> 00:21:54,600 Speaker 8: they were able to very inexpensively clean up their balance 466 00:21:54,640 --> 00:21:59,320 Speaker 8: sheet in a way that most me companies don't get 467 00:21:59,320 --> 00:22:02,600 Speaker 8: an option, don't get an opportunity to. So. So Yeah, 468 00:22:02,960 --> 00:22:05,760 Speaker 8: and if you look at all those memestocks, they're all 469 00:22:05,800 --> 00:22:08,080 Speaker 8: around trips, every last one of them is. You know, 470 00:22:08,520 --> 00:22:11,280 Speaker 8: they've run up one thousand percent, they've given back ninety 471 00:22:11,280 --> 00:22:15,280 Speaker 8: percent of those gains go bankrupt, right they've been Hey, 472 00:22:15,320 --> 00:22:17,840 Speaker 8: by the way, if you want to buy a bankrupt company, 473 00:22:17,960 --> 00:22:21,639 Speaker 8: then maybe you're not before the bankruptcy filing afterwards a 474 00:22:21,680 --> 00:22:25,800 Speaker 8: different conversation, but before maybe you're not a really good 475 00:22:25,840 --> 00:22:30,119 Speaker 8: fundamental investor. You're just playing that trend. I think Einhorn 476 00:22:30,160 --> 00:22:32,840 Speaker 8: and we didn't talk about the meme stocks very much, 477 00:22:33,200 --> 00:22:35,400 Speaker 8: but I think he would be he would be intended 478 00:22:35,440 --> 00:22:38,359 Speaker 8: to you know, short those all. 479 00:22:38,440 --> 00:22:40,520 Speaker 5: Right, Barry, thanks a lot, really appreciate it wonderful to 480 00:22:40,520 --> 00:22:42,919 Speaker 5: get you in here. I Barry Ritholtz joining us. You 481 00:22:42,960 --> 00:22:46,199 Speaker 5: can download the Masters in Business podcast right now at 482 00:22:46,200 --> 00:22:49,720 Speaker 5: Bloomberg dot com or wherever you get your podcast. Catch 483 00:22:49,720 --> 00:22:52,360 Speaker 5: the show every Saturday at ten am Wall Street Time 484 00:22:52,440 --> 00:22:54,680 Speaker 5: on Bloomberg Radio. Gonna be a great conversation. I'm really 485 00:22:54,680 --> 00:22:55,520 Speaker 5: looking forward to this one. 486 00:22:55,680 --> 00:22:57,679 Speaker 2: Yeah. Absolutely. I don't know how he gets all these 487 00:22:57,720 --> 00:22:59,760 Speaker 2: good guests. I think it's because he's a good interviewer. 488 00:23:00,640 --> 00:23:02,600 Speaker 2: He's got a lot of people that download his podcast, 489 00:23:02,840 --> 00:23:03,800 Speaker 2: so it's worth your times. 490 00:23:05,320 --> 00:23:09,240 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 491 00:23:09,320 --> 00:23:12,840 Speaker 1: weekdays at ten am Eastern on applecar Play and Android 492 00:23:12,840 --> 00:23:15,639 Speaker 1: Auto with the Bloomberg Business app. You can also listen 493 00:23:15,760 --> 00:23:18,840 Speaker 1: live on Amazon Alexa from our flagship New York station, 494 00:23:19,200 --> 00:23:22,920 Speaker 1: just say Alexa playing Bloomberg eleven thirty. 495 00:23:23,680 --> 00:23:26,000 Speaker 5: We're like almost close to five thousand on the SMD, 496 00:23:26,080 --> 00:23:28,120 Speaker 5: so I realize it's a round number, but we still care. 497 00:23:28,520 --> 00:23:29,879 Speaker 3: Let's see if Dan Griffith cares. 498 00:23:29,920 --> 00:23:34,000 Speaker 5: He is a Huntington private bank. He's a vice president, 499 00:23:34,040 --> 00:23:37,520 Speaker 5: the senior vice president there and director of wealth Strategy. Dan, 500 00:23:37,600 --> 00:23:40,320 Speaker 5: I appreciate that your longer term and like five thousand 501 00:23:40,320 --> 00:23:43,440 Speaker 5: won't mean a lot. However, what I keeping struck by 502 00:23:43,720 --> 00:23:47,280 Speaker 5: is that we are continually over sold, way above our skis, 503 00:23:47,480 --> 00:23:49,399 Speaker 5: but no one wants to sell right now as we 504 00:23:49,480 --> 00:23:50,280 Speaker 5: near five thousand. 505 00:23:50,960 --> 00:23:53,680 Speaker 9: No, I think that's right. I think what's interesting is 506 00:23:53,760 --> 00:23:56,680 Speaker 9: as maybe this is for retail customers too. The five 507 00:23:56,720 --> 00:23:59,680 Speaker 9: thousand number does make a difference because broadly it gets 508 00:23:59,680 --> 00:24:01,879 Speaker 9: people to say, oh, maybe there is some confidence in 509 00:24:01,920 --> 00:24:03,720 Speaker 9: the market, and I think there are a lot of 510 00:24:03,840 --> 00:24:07,080 Speaker 9: underlying factors that support that. But I think round numbers 511 00:24:07,119 --> 00:24:09,160 Speaker 9: sometimes do kind of wake people up and get them 512 00:24:09,160 --> 00:24:10,760 Speaker 9: to say, maybe this is something I should pay a 513 00:24:10,760 --> 00:24:11,560 Speaker 9: little more attention to. 514 00:24:12,400 --> 00:24:14,400 Speaker 2: So what are you paying attention to these days? 515 00:24:14,480 --> 00:24:14,640 Speaker 1: Dan? 516 00:24:14,720 --> 00:24:17,080 Speaker 2: We had a great finish to twenty twenty three, probably 517 00:24:17,520 --> 00:24:20,359 Speaker 2: took a lot of investors, you know, by surprise. Here. 518 00:24:19,720 --> 00:24:21,640 Speaker 2: What are we doing here in February? 519 00:24:21,680 --> 00:24:22,919 Speaker 9: A lot of I think we're looking at a lot 520 00:24:22,960 --> 00:24:24,560 Speaker 9: of core numbers, and right now a lot of them 521 00:24:24,560 --> 00:24:25,480 Speaker 9: look very positive. 522 00:24:25,880 --> 00:24:26,040 Speaker 8: You know. 523 00:24:26,040 --> 00:24:29,680 Speaker 9: Obviously we're looking for earnings growth next year. This year, 524 00:24:29,720 --> 00:24:32,240 Speaker 9: you know, maybe ten percent or more. We're looking at 525 00:24:32,480 --> 00:24:33,200 Speaker 9: jobless numbers. 526 00:24:33,240 --> 00:24:33,440 Speaker 2: Again. 527 00:24:33,480 --> 00:24:35,200 Speaker 9: We got a good number this morning, which I thought 528 00:24:35,240 --> 00:24:37,520 Speaker 9: was really positive on the heels of you know, some 529 00:24:37,560 --> 00:24:40,679 Speaker 9: great numbers earlier this month, and we're looking at the 530 00:24:40,680 --> 00:24:41,920 Speaker 9: sentiment of our customers. 531 00:24:41,960 --> 00:24:42,600 Speaker 2: In particular. 532 00:24:42,680 --> 00:24:44,600 Speaker 9: We are a great middle market bank that does a 533 00:24:44,600 --> 00:24:48,080 Speaker 9: wonderful job, particularly in the Midwest, particularly in manufacturing, and 534 00:24:48,119 --> 00:24:50,680 Speaker 9: as we talk to our clients, they say, we're really 535 00:24:50,720 --> 00:24:53,639 Speaker 9: optimistic about a lot of things, which is reflected in 536 00:24:53,680 --> 00:24:55,840 Speaker 9: the ism numbers that you know earlier this month that 537 00:24:56,040 --> 00:24:56,960 Speaker 9: we're pretty positive. 538 00:24:57,000 --> 00:24:57,800 Speaker 2: So I think what. 539 00:24:57,720 --> 00:25:00,439 Speaker 9: We're looking at is the core fundamentals. Even if we 540 00:25:00,480 --> 00:25:02,720 Speaker 9: have a little bit of a slowdown later this year, 541 00:25:02,760 --> 00:25:04,480 Speaker 9: which we're still fifty to fifty and have been for 542 00:25:04,560 --> 00:25:06,600 Speaker 9: quite some time, we think that that will probably be 543 00:25:06,640 --> 00:25:10,560 Speaker 9: a pretty modest pullback, that the economy is healthy enough 544 00:25:10,560 --> 00:25:11,240 Speaker 9: to recover from. 545 00:25:11,280 --> 00:25:13,239 Speaker 5: Well, let's be honest, it's still big tech. I mean, 546 00:25:13,280 --> 00:25:14,800 Speaker 5: you look at the SMP equal weighted and we have 547 00:25:14,840 --> 00:25:17,400 Speaker 5: definitely hit resistance. SMP moves higher. Yeah, okay, you get 548 00:25:17,400 --> 00:25:19,520 Speaker 5: the Russell is having a little bit of a bounce today, 549 00:25:19,520 --> 00:25:22,560 Speaker 5: but this is not a widespread rally. 550 00:25:22,640 --> 00:25:23,320 Speaker 3: So what do you do. 551 00:25:23,760 --> 00:25:26,720 Speaker 9: I think there's some validity to that. I think it's 552 00:25:26,920 --> 00:25:28,800 Speaker 9: it's better than it used to be. Maybe that might 553 00:25:28,800 --> 00:25:30,400 Speaker 9: be the way to describe it. 554 00:25:31,680 --> 00:25:33,199 Speaker 3: We thought, okay, that's right exactly. 555 00:25:33,680 --> 00:25:35,720 Speaker 9: I think the recovery is a little broader this year. 556 00:25:35,960 --> 00:25:38,480 Speaker 9: Obviously it's still still one sided to some degree, but 557 00:25:38,800 --> 00:25:40,879 Speaker 9: you know, the earnings beats we saw were eighty percent 558 00:25:40,880 --> 00:25:43,080 Speaker 9: across the board, and that's a good example of where 559 00:25:43,080 --> 00:25:45,480 Speaker 9: we think that recovery is maybe broader than it would 560 00:25:45,480 --> 00:25:46,640 Speaker 9: have been in twenty twenty three. 561 00:25:47,240 --> 00:25:49,560 Speaker 2: So what are some of the industries that are the 562 00:25:49,560 --> 00:25:52,159 Speaker 2: sectors that you guys look at for opportunity here? I mean, 563 00:25:52,240 --> 00:25:54,480 Speaker 2: John Tucker's belonging the Magnificent Seven, but the rest of 564 00:25:54,520 --> 00:25:56,560 Speaker 2: us are looking for some value here. 565 00:25:56,560 --> 00:25:58,800 Speaker 9: I think, well, I think that's where to look around 566 00:25:58,800 --> 00:26:01,600 Speaker 9: to say, if the the remainder of the sectors are 567 00:26:01,640 --> 00:26:04,760 Speaker 9: going to be able to recover in ways the Magnificent 568 00:26:04,840 --> 00:26:07,960 Speaker 9: Seven weren't, or they'll be able to kind of mirror 569 00:26:07,960 --> 00:26:09,879 Speaker 9: what happened in twenty twenty three. And some of the 570 00:26:09,920 --> 00:26:12,320 Speaker 9: sectors we're looking for are the ones that have been 571 00:26:12,400 --> 00:26:14,359 Speaker 9: left out a little bit. Some of that also is 572 00:26:14,400 --> 00:26:17,040 Speaker 9: going to be, you know, sectors that are less interested 573 00:26:17,080 --> 00:26:20,000 Speaker 9: in interest rate fluctuation, so we're looking at that as well. 574 00:26:20,040 --> 00:26:23,560 Speaker 9: So again, a lot of manufacturing is less related to 575 00:26:23,680 --> 00:26:26,400 Speaker 9: interest rate, and so as a result, they're looking at 576 00:26:26,440 --> 00:26:30,240 Speaker 9: just core supply chain, core demand, with consumer sentiments still 577 00:26:30,240 --> 00:26:32,320 Speaker 9: being really close to one hundred. Again, a lot of 578 00:26:32,320 --> 00:26:34,640 Speaker 9: them are very optimistic, and so there's upside there too. 579 00:26:34,720 --> 00:26:37,240 Speaker 5: So let's talk about the industrial sector because it's so 580 00:26:37,320 --> 00:26:40,040 Speaker 5: interesting with all the Infrastructure Act, the Chip Act, and 581 00:26:40,080 --> 00:26:42,919 Speaker 5: the IRA, which is a structural story for these guys, 582 00:26:42,920 --> 00:26:45,159 Speaker 5: But in terms of order books and actual profits and 583 00:26:45,200 --> 00:26:48,320 Speaker 5: money in hand, we haven't seen that happen. How do 584 00:26:48,359 --> 00:26:50,320 Speaker 5: you think that cycle plays out? And then how do 585 00:26:50,359 --> 00:26:52,479 Speaker 5: you manage that as an investor? I think there are 586 00:26:52,480 --> 00:26:53,600 Speaker 5: two things that are irrelevant. 587 00:26:53,640 --> 00:26:55,520 Speaker 9: One is that we are starting to see inventories in 588 00:26:55,560 --> 00:26:58,359 Speaker 9: demand start to just the beginning of them start to 589 00:26:58,359 --> 00:27:00,399 Speaker 9: tick up a little bit. So I think we're we're 590 00:27:00,440 --> 00:27:02,880 Speaker 9: just watching the wave begin to grow there. And again, 591 00:27:02,920 --> 00:27:04,760 Speaker 9: in the conversations I get to have every day with 592 00:27:04,800 --> 00:27:07,080 Speaker 9: business owners, I see that on a kind of case 593 00:27:07,119 --> 00:27:10,560 Speaker 9: by case basis, there's optimism there that makes sense. If 594 00:27:10,560 --> 00:27:12,399 Speaker 9: you look back at twenty twenty two, part of the 595 00:27:12,400 --> 00:27:14,800 Speaker 9: strength that we see in the market today is that 596 00:27:14,840 --> 00:27:18,280 Speaker 9: people were building in a potential recession in twenty twenty three, 597 00:27:18,320 --> 00:27:20,600 Speaker 9: so they kind of tightened their belts and looked around 598 00:27:20,640 --> 00:27:21,840 Speaker 9: and said, hey, what do we need to do to 599 00:27:21,880 --> 00:27:25,119 Speaker 9: prepare for a recession that ultimately didn't happen. And so 600 00:27:25,200 --> 00:27:27,480 Speaker 9: as a result, many of those companies have a core 601 00:27:27,520 --> 00:27:32,040 Speaker 9: strength going into twenty twenty four right now that results 602 00:27:32,240 --> 00:27:36,680 Speaker 9: from some really conservative behavior, and I think, particularly in manufacturing, 603 00:27:36,760 --> 00:27:38,960 Speaker 9: that is a great example of that. So I think 604 00:27:39,000 --> 00:27:41,240 Speaker 9: a lot of people are coming from a very solid 605 00:27:41,280 --> 00:27:45,000 Speaker 9: foundation that isn't as interest rate restricted as we mentioned before, 606 00:27:45,320 --> 00:27:46,720 Speaker 9: and so as a result, I think they're going to 607 00:27:46,760 --> 00:27:48,120 Speaker 9: do well as we move into this year. 608 00:27:48,720 --> 00:27:51,440 Speaker 2: One of the names that you guys talked about Parker 609 00:27:51,480 --> 00:27:54,439 Speaker 2: Hannafin based in Cleveland, Ohio, Northeast Ohio. 610 00:27:54,480 --> 00:27:55,399 Speaker 3: Company that's right, that. 611 00:27:55,640 --> 00:27:57,840 Speaker 2: Is manufacturing and stocks up eleven percent year to date, 612 00:27:57,920 --> 00:28:00,440 Speaker 2: up about forty seven percent of the trailing twelve months. 613 00:28:00,480 --> 00:28:02,440 Speaker 2: So it's been a good call. What's your play there? 614 00:28:02,760 --> 00:28:04,440 Speaker 9: Well, I think there are two things that are kind 615 00:28:04,440 --> 00:28:06,560 Speaker 9: of a good news bad news scenario. One of them 616 00:28:06,640 --> 00:28:11,120 Speaker 9: is that as manufacturing and industry kind of recovers, they're going. 617 00:28:11,040 --> 00:28:11,600 Speaker 2: To recover, right. 618 00:28:11,640 --> 00:28:14,080 Speaker 9: They benefit from that as their core business, and that's 619 00:28:14,119 --> 00:28:15,960 Speaker 9: the good news the bad news for them or maybe 620 00:28:15,960 --> 00:28:19,399 Speaker 9: for other folks, is they really benefit from people like 621 00:28:19,480 --> 00:28:21,959 Speaker 9: Boeing and Airbus kind of stubbing their toe a little bit. 622 00:28:22,000 --> 00:28:24,440 Speaker 9: So as Boeing has suffered some bad news, that's kind 623 00:28:24,440 --> 00:28:27,320 Speaker 9: of good news for Parker Hannafin. Unfortunately, it doesn't look 624 00:28:27,359 --> 00:28:29,600 Speaker 9: like that news is going to go an go away 625 00:28:29,600 --> 00:28:31,760 Speaker 9: anytime soon, and so we think that's that's a play 626 00:28:31,760 --> 00:28:33,320 Speaker 9: and something that our folks are looking at. 627 00:28:33,400 --> 00:28:38,120 Speaker 5: You know, what Paul did, He left me Exon and 628 00:28:38,120 --> 00:28:41,120 Speaker 5: there's Microsoft. We'll get to that. But you like Exon, 629 00:28:41,600 --> 00:28:44,239 Speaker 5: I can't blame you after that quarter? What do you 630 00:28:44,320 --> 00:28:46,360 Speaker 5: like about them? Could you still buy here? 631 00:28:46,600 --> 00:28:46,840 Speaker 3: Yes? 632 00:28:46,920 --> 00:28:47,360 Speaker 2: I think so. 633 00:28:47,600 --> 00:28:49,920 Speaker 9: We've been excited about them for a long time, and 634 00:28:49,920 --> 00:28:52,320 Speaker 9: obviously it's kind of funny to come back and say 635 00:28:52,400 --> 00:28:53,440 Speaker 9: we're still excited. 636 00:28:53,440 --> 00:28:54,640 Speaker 2: We still think it's good. 637 00:28:54,440 --> 00:28:57,280 Speaker 9: And fortunately good earnings news kind of played out well there. 638 00:28:57,720 --> 00:29:00,160 Speaker 9: We think their play in the in the shale, the 639 00:29:00,200 --> 00:29:01,880 Speaker 9: Permian and shale where they are right now, that is 640 00:29:01,960 --> 00:29:04,200 Speaker 9: kind of just beginning to come out. And I also 641 00:29:04,240 --> 00:29:06,200 Speaker 9: think the fact that they are a much more vertical 642 00:29:06,200 --> 00:29:08,680 Speaker 9: company makes a big difference, you know, because they have 643 00:29:08,720 --> 00:29:11,640 Speaker 9: the opportunity to if oil is volatile, they're still working 644 00:29:11,680 --> 00:29:13,880 Speaker 9: on the chemical side as well, So we think the 645 00:29:13,960 --> 00:29:17,040 Speaker 9: vertical nature of their company makes it makes it something 646 00:29:17,080 --> 00:29:19,520 Speaker 9: that is a lot more attractive than even others appeers 647 00:29:19,560 --> 00:29:20,520 Speaker 9: in their sector. 648 00:29:20,720 --> 00:29:23,600 Speaker 2: Alex do people even talk about peak oil anymore? 649 00:29:24,200 --> 00:29:27,880 Speaker 5: No, no, no, but I mean yes, no, that'll always 650 00:29:27,920 --> 00:29:30,640 Speaker 5: come back. But if what we've learned in the past 651 00:29:30,680 --> 00:29:35,360 Speaker 5: fifteen years is that US oil companies will innovate like crazy, 652 00:29:35,480 --> 00:29:37,760 Speaker 5: and they can and they can execute like the permium 653 00:29:37,760 --> 00:29:41,000 Speaker 5: revolution on the show, revolution that happened from like the small. 654 00:29:40,760 --> 00:29:42,920 Speaker 3: Guys, not the big guys. So as long as we have. 655 00:29:42,960 --> 00:29:44,960 Speaker 5: That innovation there, it's going to be hard to really 656 00:29:44,960 --> 00:29:46,960 Speaker 5: see that the peak demand thing. 657 00:29:47,160 --> 00:29:49,760 Speaker 2: Yeah, that's the question we ad. 658 00:29:49,880 --> 00:29:52,560 Speaker 5: We're definitely not at, but that's what we're definitely headed 659 00:29:52,600 --> 00:29:56,000 Speaker 5: to that at some point. Hence Saudi Arabia, you know, 660 00:29:56,080 --> 00:29:58,680 Speaker 5: pulling back on what they're going to be producing in 661 00:29:58,760 --> 00:30:00,760 Speaker 5: terms of thirteen million barrels a day and developing a 662 00:30:00,800 --> 00:30:01,720 Speaker 5: twelve million. 663 00:30:01,480 --> 00:30:03,880 Speaker 3: Right like you have. The end is coming, but it 664 00:30:03,880 --> 00:30:05,240 Speaker 3: could be coming like forty years later. 665 00:30:05,440 --> 00:30:08,200 Speaker 2: Saudi ramcod do. I guess a secondary offering now with 666 00:30:08,440 --> 00:30:11,520 Speaker 2: Bolmi Saxon City twenty billion dollars offering. So it's a 667 00:30:11,600 --> 00:30:13,680 Speaker 2: nice payday. Yeah, yeah, how that goes? Because I got 668 00:30:13,760 --> 00:30:15,480 Speaker 2: rent Crew, it's still at eighty bucks. Good time to 669 00:30:15,520 --> 00:30:17,400 Speaker 2: sell some stock, I would think, right, all right? Another 670 00:30:17,800 --> 00:30:20,560 Speaker 2: I think name that our analysts here at Bloomberg Intelligence 671 00:30:20,600 --> 00:30:24,320 Speaker 2: are super bullish on is Microsoft. So what's your call there? Again? 672 00:30:24,440 --> 00:30:25,520 Speaker 3: Kind of singing the same song. 673 00:30:25,560 --> 00:30:26,200 Speaker 2: I hate to do it. 674 00:30:26,280 --> 00:30:29,000 Speaker 9: Not particularly innovative, but I think if you look at it, 675 00:30:29,280 --> 00:30:31,680 Speaker 9: we used to talk about Microsoft as, you know, a 676 00:30:31,720 --> 00:30:34,560 Speaker 9: computing company. Now you look at it and say they're computing, 677 00:30:34,800 --> 00:30:37,880 Speaker 9: they're a cloud company, they're a gaming company, their AI company, 678 00:30:38,160 --> 00:30:40,560 Speaker 9: and in particular, if you look back, they're really starting 679 00:30:40,600 --> 00:30:44,440 Speaker 9: to report meaningful profits from their AI business. And so 680 00:30:44,640 --> 00:30:46,880 Speaker 9: obviously we think that's the beginning of a wave as well. 681 00:30:46,880 --> 00:30:49,920 Speaker 9: There's lots of reasons to think that Microsoft has some upside. 682 00:30:50,040 --> 00:30:52,080 Speaker 2: I'm looking at the an R function for Microsoft. A 683 00:30:52,120 --> 00:30:55,160 Speaker 2: couple things jump out of me. First sixty five analysts 684 00:30:55,200 --> 00:31:00,560 Speaker 2: cover the stock. How efficient is that? That's a lots 685 00:31:01,360 --> 00:31:04,800 Speaker 2: five holds no cells? So Street likes it. 686 00:31:05,040 --> 00:31:05,240 Speaker 8: Yes. 687 00:31:05,520 --> 00:31:07,240 Speaker 5: What I also love about these picks is that these 688 00:31:07,320 --> 00:31:09,760 Speaker 5: are like I mean, I appreciate Microsoft is at the 689 00:31:09,800 --> 00:31:13,440 Speaker 5: forefront of AI, but they're also like old school real 690 00:31:13,480 --> 00:31:16,760 Speaker 5: economy companies. Again, I realized that Microsoft might be treading 691 00:31:16,760 --> 00:31:18,320 Speaker 5: that line in a big, big way. But like a 692 00:31:18,320 --> 00:31:20,320 Speaker 5: Parker Hannat been in an Exxon like, these are not 693 00:31:21,040 --> 00:31:22,280 Speaker 5: We're going to get into a recession. 694 00:31:22,320 --> 00:31:24,120 Speaker 3: Everything's going to be terrible. You can only a bet 695 00:31:24,120 --> 00:31:25,400 Speaker 3: On AI right. 696 00:31:25,560 --> 00:31:28,480 Speaker 9: Well, I think Outset's right right. Exon's another example of 697 00:31:28,560 --> 00:31:31,920 Speaker 9: where you've got wonderful core fundamentals and that vertical piece 698 00:31:31,960 --> 00:31:34,400 Speaker 9: that we talked about, and on top of that, they've 699 00:31:34,440 --> 00:31:37,080 Speaker 9: got the horsepower and ability and a track record I 700 00:31:37,080 --> 00:31:39,800 Speaker 9: think in both cases to do the kind of innovation 701 00:31:39,880 --> 00:31:41,680 Speaker 9: that's going to bring them into the future in a 702 00:31:41,720 --> 00:31:44,440 Speaker 9: meaningful way. And those are the kind of companies we 703 00:31:44,480 --> 00:31:44,880 Speaker 9: really like. 704 00:31:45,360 --> 00:31:47,720 Speaker 2: All Right, very good Dan, thanks for making the trip in. 705 00:31:47,840 --> 00:31:50,240 Speaker 2: Thanks for having me. Dan, Yes, Senior vice president and 706 00:31:50,280 --> 00:31:53,000 Speaker 2: director of Wealth Strategy, Huntington Private Bank. 707 00:31:54,600 --> 00:31:58,480 Speaker 1: You're listening to the Bloomberg Intelligence Podcast. Catch us live 708 00:31:58,560 --> 00:31:59,640 Speaker 1: weekdays at ten am. 709 00:31:59,600 --> 00:32:00,400 Speaker 2: E's too on. 710 00:32:00,480 --> 00:32:03,920 Speaker 1: Applecar Play and Android Auto with a Bloomberg Business app. 711 00:32:04,000 --> 00:32:06,840 Speaker 1: You can also listen live on Amazon Alexa from our 712 00:32:06,880 --> 00:32:11,280 Speaker 1: flagship New York station. Just say Alexa Play Bloomberg eleven thirty. 713 00:32:13,360 --> 00:32:16,000 Speaker 5: So something that's on my radar. It may have faded 714 00:32:16,040 --> 00:32:18,400 Speaker 5: a little bit from yours, but it is important. Is 715 00:32:18,440 --> 00:32:23,400 Speaker 5: the Biden administration placing a moratorium on LG export projects 716 00:32:23,520 --> 00:32:25,200 Speaker 5: to non FTA countries. 717 00:32:25,600 --> 00:32:26,280 Speaker 3: It was huge. 718 00:32:26,360 --> 00:32:28,680 Speaker 5: I was in Florence and it was a huge, huge deal. 719 00:32:28,760 --> 00:32:31,000 Speaker 5: Everyone was complaining about it. Everyone was worried about it, 720 00:32:31,000 --> 00:32:33,680 Speaker 5: and no one understands it. So let's get into it, 721 00:32:33,720 --> 00:32:37,160 Speaker 5: because Joe Manchin certainly is so today this is what's happening. 722 00:32:37,200 --> 00:32:40,360 Speaker 5: The Senate Energy and Natural Resources Committee, which is led 723 00:32:40,400 --> 00:32:44,480 Speaker 5: by West Virginia Democrat Joe Mansion, is probing the administration's decision, 724 00:32:44,760 --> 00:32:46,920 Speaker 5: and they're holding a hearing on the issue, at which 725 00:32:46,960 --> 00:32:49,840 Speaker 5: Deputy Secretary of Energy David Turk will be there. This 726 00:32:49,960 --> 00:32:52,040 Speaker 5: is just one of many hearings on this has many 727 00:32:52,040 --> 00:32:54,520 Speaker 5: got a lot of head scratching when this came out, 728 00:32:54,680 --> 00:32:56,680 Speaker 5: So let's get some more insight here. Dustin Meyer is 729 00:32:56,800 --> 00:33:00,120 Speaker 5: Senior VP of Policy, Economics and Regulatory Affairs at the 730 00:33:00,120 --> 00:33:02,920 Speaker 5: American Petroleum Institute down in DC. 731 00:33:03,480 --> 00:33:07,200 Speaker 3: What do you think, Dustin? We can expect. I realized 732 00:33:07,200 --> 00:33:08,480 Speaker 3: for some people this may feel. 733 00:33:08,400 --> 00:33:11,880 Speaker 5: Niche, but This is a huge moment for energy in 734 00:33:11,920 --> 00:33:14,720 Speaker 5: our country in terms of wealth and in terms of security. 735 00:33:16,000 --> 00:33:18,080 Speaker 10: Yeah, you got to write, Alex, I mean the benefits 736 00:33:18,120 --> 00:33:21,080 Speaker 10: of USL ANDNG are clearer now than ever. I mean, 737 00:33:21,280 --> 00:33:23,760 Speaker 10: the role that USL and G has played, especially in 738 00:33:23,800 --> 00:33:26,400 Speaker 10: the last couple of years, in helping our allies in 739 00:33:26,440 --> 00:33:30,200 Speaker 10: Europe displaced Russian pipeline gas is really difficult to overstate. 740 00:33:30,520 --> 00:33:33,600 Speaker 10: But beyond the geopolitical benefits, the benefits to the US 741 00:33:33,720 --> 00:33:37,920 Speaker 10: economy are equally obvious. These projects are enormous creators of 742 00:33:38,120 --> 00:33:41,440 Speaker 10: job down in the Gulf coat wherever they're developed. This 743 00:33:41,480 --> 00:33:43,440 Speaker 10: is a really good thing for our country. This is 744 00:33:43,480 --> 00:33:45,800 Speaker 10: a really good thing for our allies. That's why we 745 00:33:45,840 --> 00:33:48,840 Speaker 10: think it's so unbelievably misguided for the administration to be 746 00:33:48,920 --> 00:33:50,320 Speaker 10: issuing this pause right now. 747 00:33:50,920 --> 00:33:54,000 Speaker 2: What is the reasoning from the administration for issuing this pause. 748 00:33:55,120 --> 00:33:57,000 Speaker 10: They would cite a lot of things. I think most 749 00:33:57,000 --> 00:33:59,720 Speaker 10: people would agree that this is pretty nakedly political in 750 00:33:59,800 --> 00:34:02,680 Speaker 10: what they are doing. But they would cite concerns over 751 00:34:02,920 --> 00:34:05,680 Speaker 10: what is the impact on domestic natural gas prices, what 752 00:34:05,840 --> 00:34:09,239 Speaker 10: is the climate impact, and how does this play with 753 00:34:09,280 --> 00:34:13,640 Speaker 10: the evolving transition around the energy landscape. We think at 754 00:34:13,640 --> 00:34:17,240 Speaker 10: this stage we don't need to do studies on this anymore. 755 00:34:17,320 --> 00:34:20,800 Speaker 10: We have the proof we've been exporting for seven years. 756 00:34:21,120 --> 00:34:25,120 Speaker 10: We have the evidence that can show the enormous economic benefits, 757 00:34:25,200 --> 00:34:28,799 Speaker 10: that can show the enormous geopolitical benefits, and that can 758 00:34:28,880 --> 00:34:33,040 Speaker 10: show the enormous environmental benefits. Everywhere around the world when 759 00:34:33,080 --> 00:34:36,279 Speaker 10: gas gets scars, countries turned back to coal. That's why 760 00:34:36,360 --> 00:34:39,520 Speaker 10: it's incredibly important for us to maintain that reliable and 761 00:34:39,560 --> 00:34:42,000 Speaker 10: abundant supply from the United States. 762 00:34:41,719 --> 00:34:43,480 Speaker 5: And which Paul is also a head scratcher, because if 763 00:34:43,480 --> 00:34:45,480 Speaker 5: you're worried about methane emissions from natural gas, then like 764 00:34:45,520 --> 00:34:48,719 Speaker 5: limit production, Like why like that' sports the endgame, right, 765 00:34:48,760 --> 00:34:51,960 Speaker 5: So that a little bit of head scratcher too, So Dustin, 766 00:34:52,040 --> 00:34:54,400 Speaker 5: I mean, fair enough, it's political. So why do we 767 00:34:54,480 --> 00:34:57,280 Speaker 5: really care come November six, isn't this just gonna all 768 00:34:57,320 --> 00:34:58,160 Speaker 5: magically go away? 769 00:34:59,520 --> 00:35:03,160 Speaker 10: Well, it depends on the you know, incoming what the 770 00:35:03,200 --> 00:35:05,879 Speaker 10: result of the election is. But we think that there's 771 00:35:06,000 --> 00:35:10,279 Speaker 10: already serious consequences of doing this pause. There's a lot 772 00:35:10,320 --> 00:35:13,799 Speaker 10: of buyer appetite out there right now for more leg 773 00:35:14,200 --> 00:35:17,720 Speaker 10: right buyers from Japan, from Korea, from Europe, from Brazil, 774 00:35:17,880 --> 00:35:21,319 Speaker 10: from India, from everywhere or everywhere around the world. They 775 00:35:21,440 --> 00:35:23,680 Speaker 10: want more gas. They would love to get it from 776 00:35:23,719 --> 00:35:27,480 Speaker 10: the United States. But this sends a very chilling message 777 00:35:27,640 --> 00:35:30,000 Speaker 10: to investors and to potential buyers. 778 00:35:30,520 --> 00:35:33,600 Speaker 2: Dustin, how big of a player is the United States 779 00:35:33,640 --> 00:35:35,480 Speaker 2: and the global LNG market? 780 00:35:36,440 --> 00:35:38,760 Speaker 10: Oh, We're huge. So we are right now the world's 781 00:35:38,800 --> 00:35:42,200 Speaker 10: largest LG exporter. As a reminder, it wasn't that long 782 00:35:42,239 --> 00:35:44,880 Speaker 10: ago when the United States was not just an importer 783 00:35:45,000 --> 00:35:47,279 Speaker 10: of lergy. We were projected by many to be the 784 00:35:47,320 --> 00:35:51,520 Speaker 10: world's largest importer of lergy. So that massive transformation and 785 00:35:51,600 --> 00:35:53,920 Speaker 10: has of course been good for the United States, but 786 00:35:53,960 --> 00:35:57,120 Speaker 10: that's brought enormous benefits overseas as well. So as the 787 00:35:57,160 --> 00:36:00,560 Speaker 10: world's largest LG exporter. You know, it was US who 788 00:36:00,600 --> 00:36:04,000 Speaker 10: is able to redirect our flows in twenty twenty two 789 00:36:04,080 --> 00:36:06,320 Speaker 10: to Europe to make sure that they could displace that 790 00:36:06,400 --> 00:36:09,799 Speaker 10: Russian pipeline gas that their system had become dependent on. 791 00:36:10,200 --> 00:36:12,600 Speaker 10: It's a really good thing to have these cargoes out 792 00:36:12,600 --> 00:36:15,400 Speaker 10: there on the water, but everyone recognizes that we're going 793 00:36:15,480 --> 00:36:19,040 Speaker 10: to need even more. We need a clear permitting process 794 00:36:19,040 --> 00:36:22,640 Speaker 10: for doing exactly that, and that's what this pause jeopardizes. 795 00:36:23,200 --> 00:36:26,560 Speaker 5: Here's my question, justin where in this may there be 796 00:36:26,600 --> 00:36:29,959 Speaker 5: a point like where should we be a little bit 797 00:36:30,239 --> 00:36:34,000 Speaker 5: more judicial in how we issue permits and how things 798 00:36:34,000 --> 00:36:36,560 Speaker 5: are built? Like where's the point? 799 00:36:37,680 --> 00:36:40,160 Speaker 10: Yeah, Well, no one is suggesting that there shouldn't be 800 00:36:40,239 --> 00:36:44,120 Speaker 10: a process, but there is already a very well established 801 00:36:44,160 --> 00:36:48,160 Speaker 10: and frankly fairly time consuming process for an LNG export 802 00:36:48,200 --> 00:36:50,719 Speaker 10: project to get approved in the United States. First you 803 00:36:50,800 --> 00:36:53,120 Speaker 10: need to permit from the DOE for exports to free 804 00:36:53,160 --> 00:36:56,400 Speaker 10: trade countries, Then you have to go through a very lengthy, 805 00:36:56,400 --> 00:36:59,920 Speaker 10: comprehensive pork review, and then finally you get your permit 806 00:37:00,040 --> 00:37:04,160 Speaker 10: from DOE for exports to non FTA countries. Nobody's suggesting 807 00:37:04,200 --> 00:37:07,320 Speaker 10: that we shouldn't have a process. All were suggesting is 808 00:37:07,360 --> 00:37:11,439 Speaker 10: that process should be clear and transparent and should use 809 00:37:11,520 --> 00:37:14,719 Speaker 10: buy and large the process that not just the previous administration, 810 00:37:15,000 --> 00:37:18,799 Speaker 10: but the Obama administration before it used. Remember, most of 811 00:37:18,840 --> 00:37:21,920 Speaker 10: the projects that are exporting today are a result of 812 00:37:21,960 --> 00:37:26,600 Speaker 10: approvals from the Obama administration because the Obama administration understood 813 00:37:26,640 --> 00:37:29,880 Speaker 10: the geopolitical benefits, they understood the environmental benefits, and they 814 00:37:29,960 --> 00:37:33,280 Speaker 10: understood the local economic benefits. Here in the United States. 815 00:37:33,320 --> 00:37:37,640 Speaker 10: That's all. We're suggesting that we should maintain that review process. 816 00:37:37,920 --> 00:37:42,560 Speaker 2: What type of response, if any, can the energy industry 817 00:37:42,640 --> 00:37:44,480 Speaker 2: do to kind of I don't know, either reverse this, 818 00:37:45,120 --> 00:37:48,120 Speaker 2: get around it, call him, yes, go. 819 00:37:48,080 --> 00:37:49,600 Speaker 3: To DC and touch lovemakers. 820 00:37:50,640 --> 00:37:50,879 Speaker 1: Yeah. 821 00:37:50,960 --> 00:37:53,000 Speaker 10: Yeah, And look, we have We have been talking with 822 00:37:53,040 --> 00:37:54,840 Speaker 10: a lot of folks on the hill and around the 823 00:37:54,880 --> 00:37:57,960 Speaker 10: Hill to make sure they understand the ramifications of this. 824 00:37:58,160 --> 00:38:01,480 Speaker 10: We strongly believe that LNG has a great role to 825 00:38:01,560 --> 00:38:04,600 Speaker 10: play in reducing emissions around the world and bolster and 826 00:38:04,640 --> 00:38:07,319 Speaker 10: the energy security of our allies. Our allies have been 827 00:38:07,440 --> 00:38:10,000 Speaker 10: very clear about this as well, and so we have 828 00:38:10,160 --> 00:38:13,160 Speaker 10: to communicate around this and make that abundantly clear. I 829 00:38:13,200 --> 00:38:16,000 Speaker 10: would note that there's so much that the industry is doing, 830 00:38:16,040 --> 00:38:19,600 Speaker 10: for example, on reducing methane emissions across our value chain. 831 00:38:19,680 --> 00:38:21,960 Speaker 10: That is a good thing that we're doing. That we're 832 00:38:22,000 --> 00:38:25,839 Speaker 10: doing to reduce emissions at the liquefaction sites themselves. Those 833 00:38:25,840 --> 00:38:28,960 Speaker 10: are important questions. We're working on that very hard. We 834 00:38:29,040 --> 00:38:32,920 Speaker 10: think that that cements and even further extends the value 835 00:38:32,920 --> 00:38:35,520 Speaker 10: proposition of LNG at this time. A lot of this 836 00:38:35,600 --> 00:38:39,960 Speaker 10: conversation always proceeds as if coal demand around the world 837 00:38:40,120 --> 00:38:43,640 Speaker 10: has already been eliminated, or that in fact is falling precipitously. 838 00:38:43,920 --> 00:38:46,799 Speaker 10: Nothing could be further from the truth. Coal demand last 839 00:38:46,840 --> 00:38:49,920 Speaker 10: year set a new record level. Most forecasters expect it 840 00:38:49,960 --> 00:38:52,160 Speaker 10: will be a new record this year as well. If 841 00:38:52,200 --> 00:38:55,200 Speaker 10: you look at the energy outlooks for China, for India, 842 00:38:55,320 --> 00:38:59,399 Speaker 10: for Vietnam, for major Asian economies, you can see they 843 00:38:59,440 --> 00:39:03,040 Speaker 10: are left with the choice between coal or natural gas. 844 00:39:03,080 --> 00:39:04,920 Speaker 10: We think that choice is pretty clear. It should be 845 00:39:05,000 --> 00:39:05,640 Speaker 10: natural gas. 846 00:39:05,719 --> 00:39:07,840 Speaker 3: All right, Dustin, thanks so much, appreciate you. What happening on. 847 00:39:07,880 --> 00:39:08,840 Speaker 3: I know it's a busy day for you. 848 00:39:08,920 --> 00:39:12,280 Speaker 5: Dustin Meyer, Senior VP of Policy, Economics and Regulatory Affairs 849 00:39:12,760 --> 00:39:15,480 Speaker 5: at the American Petroleum Institute. And what he brings up 850 00:39:15,480 --> 00:39:17,920 Speaker 5: at the end, there is the idea of energy equality. 851 00:39:18,400 --> 00:39:22,560 Speaker 5: It's different to see it here versus like India or 852 00:39:22,800 --> 00:39:25,760 Speaker 5: Africa or countries that don't have any power or minimal 853 00:39:25,800 --> 00:39:27,959 Speaker 5: power at all. And then how do you go from 854 00:39:27,960 --> 00:39:31,400 Speaker 5: something like cold to solar or nothing to solar, like 855 00:39:31,440 --> 00:39:34,120 Speaker 5: there's just not the infrastructure or the money to do that. 856 00:39:34,200 --> 00:39:36,480 Speaker 2: And I just remember from you know, the first year 857 00:39:36,600 --> 00:39:39,719 Speaker 2: the Russian invasion of Ukraine, European country is saying we're 858 00:39:39,719 --> 00:39:44,880 Speaker 2: going to build floating plants to liquid to what is it, reliquify, 859 00:39:45,040 --> 00:39:46,960 Speaker 2: re liquifed yea, yeah, so it comes across on the 860 00:39:47,000 --> 00:39:48,719 Speaker 2: ship from the US and then we can you know, 861 00:39:48,960 --> 00:39:49,359 Speaker 2: they have them. 862 00:39:49,360 --> 00:39:52,200 Speaker 3: They're good, they're they're building them up, they're they're floating outside. 863 00:39:52,440 --> 00:39:54,360 Speaker 3: They're good. Yeah, it's pretty amazing. 864 00:39:54,440 --> 00:39:57,160 Speaker 2: Yeah, it is so key. On top of that, Alex 865 00:39:57,200 --> 00:39:59,960 Speaker 2: will make sure we stay on top of that story. 866 00:40:00,800 --> 00:40:05,360 Speaker 1: This is the Bloomberg Intelligence Podcast, available on apples, Spotify, 867 00:40:05,560 --> 00:40:08,719 Speaker 1: and anywhere else you get your podcasts. Listen live each 868 00:40:08,760 --> 00:40:12,160 Speaker 1: weekday ten am to noon Eastern on Bloomberg dot com, 869 00:40:12,239 --> 00:40:15,640 Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app. 870 00:40:15,760 --> 00:40:18,800 Speaker 1: You can also watch us live every weekday on YouTube 871 00:40:19,000 --> 00:40:20,840 Speaker 1: and always on the Bloomberg Terminal.