WEBVTT - Bloomberg Intelligence: Inflation Risk, Disney Surges, Einhorn on Markets 0:00:01.440 --> 0:00:05.320 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:00:05.400 --> 0:00:08.079 weekdays at ten am Eastern on Affle car Playing and 0:00:08.240 --> 0:00:11.080 broud Otto with the Bloomberg Business app. Listen on demand 0:00:11.160 --> 0:00:15.520 wherever you get your podcasts, or watch us live on YouTube. 0:00:16.800 --> 0:00:18.159 Well, a little bit of FED speak. We had some 0:00:18.200 --> 0:00:21.440 economic data today with the jobs claims kind of right 0:00:21.480 --> 0:00:24.079 in line with expectations. I don't know, I kind of 0:00:24.120 --> 0:00:27.520 feel like this FED obviously has taken March off the 0:00:27.560 --> 0:00:29.400 table for a cut, and I don't know where we 0:00:29.440 --> 0:00:31.160 are from May, maybe fifty to fifty. I don't know 0:00:31.200 --> 0:00:32.960 what the worp thing mcgiggie says, But let's talk to 0:00:33.040 --> 0:00:36.280 somebody who actually does this for a living. That would 0:00:36.320 --> 0:00:39.159 be one Ira Jersey, chief US interest rate strategist for 0:00:39.159 --> 0:00:42.720 Bloomberg Intelligence. He is down in the Bloomberg campus getting 0:00:42.800 --> 0:00:45.720 ready for what will be a spectacular lunch. I'm sure, 0:00:45.720 --> 0:00:47.120 because that's how they do it down there in Prince. 0:00:47.440 --> 0:00:48.239 Let's just talk about that. 0:00:48.320 --> 0:00:51.000 Yeah, I know, I mean, it's unbelievable. They did a renovation, 0:00:51.200 --> 0:00:52.720 which I don't even why they did a renovation because 0:00:52.720 --> 0:00:55.120 it was already a great facility. But it's even better now, 0:00:55.280 --> 0:00:59.560 all right, Ira, talk to us about May. I'll give 0:00:59.600 --> 0:01:01.200 you March. We're not going to do anything in March. 0:01:01.280 --> 0:01:04.640 That's fine, But I'm focusing now on May. I could 0:01:04.720 --> 0:01:07.199 argue that they don't need to do anything in May. 0:01:07.640 --> 0:01:08.000 What do you think? 0:01:08.080 --> 0:01:10.000 Yeah, And there's certainly and there's Paul, There certainly are 0:01:10.080 --> 0:01:13.440 people who are arguing that very that very thing. When 0:01:13.440 --> 0:01:15.440 you look at the recent data, it does seem like 0:01:15.560 --> 0:01:18.400 the economy is not selling down very much. You don't 0:01:18.400 --> 0:01:21.119 have you have some signals that maybe inflation will kind 0:01:21.120 --> 0:01:24.000 of stabilize here instead of continuing to fall. So that's 0:01:24.080 --> 0:01:26.560 leading some people to think that the Federal Reserve might 0:01:26.640 --> 0:01:28.840 not might not cut in May. So we are pricing, 0:01:28.880 --> 0:01:32.240 like you said, using the WRP function, around around a 0:01:32.400 --> 0:01:34.880 three quarters chance of a cut in May. And I 0:01:34.920 --> 0:01:38.160 think that that's probably the correct pricing given the information 0:01:38.319 --> 0:01:41.520 that we currently have. I think the you know, the 0:01:41.560 --> 0:01:43.160 thing that we have to remember, though, is that the 0:01:43.200 --> 0:01:46.679 Federal Reserve doesn't want the difference between inflation and the 0:01:46.720 --> 0:01:49.120 Fed funds rate to get too wide because they think 0:01:49.120 --> 0:01:51.520 that that will tighten financial conditions too much and slow 0:01:51.560 --> 0:01:55.560 the economy more. Now you know, how effective is monetary 0:01:55.560 --> 0:01:57.640 policy right now? And what is the lead and lags 0:01:57.680 --> 0:02:00.680 of monetary policy right now? No one really knows, and 0:02:00.960 --> 0:02:03.960 it's certainly much longer this time, I think because of 0:02:04.000 --> 0:02:06.640 some of the structural changes, like everyone with low mortgage 0:02:06.720 --> 0:02:09.240 rates that are don't have to refinance again and won't 0:02:09.840 --> 0:02:13.640 when interest rates are four hundred basis points above where 0:02:14.080 --> 0:02:15.119 where their mortgages are. 0:02:15.240 --> 0:02:17.560 That would be me so fair enough, IRA, And you 0:02:17.600 --> 0:02:20.320 had Thomas Barkin talking to Michael McKee earlier saying that 0:02:20.360 --> 0:02:22.880 it is conceivable that the neutral rate has risen after 0:02:22.919 --> 0:02:23.520 the pandemic. 0:02:23.639 --> 0:02:25.840 So it feels like the thing that kind of throws some. 0:02:25.840 --> 0:02:27.680 Cold water is that if a higher neutral rate, then 0:02:27.680 --> 0:02:29.560 were just less tight than we thought. Therefore we can 0:02:29.639 --> 0:02:31.679 wait longer to cut or you don't have to cut 0:02:31.680 --> 0:02:32.080 as much. 0:02:33.080 --> 0:02:35.880 Sure, and the neutral rate almost certainly is higher, right 0:02:35.880 --> 0:02:38.760 the question is how much higher We had a time 0:02:38.800 --> 0:02:43.200 period in between the crises, both from two thousand and 0:02:43.280 --> 0:02:46.600 nine call it to twenty twenty to the pandemic, where 0:02:46.840 --> 0:02:49.120 where our star The real neutral rate, whatever you want 0:02:49.120 --> 0:02:52.239 to call it, was probably exceptionally low. And one of 0:02:52.280 --> 0:02:54.359 the big reasons for that was just the lack of 0:02:54.400 --> 0:02:59.680 volatility in the economy. Also lack of volatility in some markets, 0:02:59.680 --> 0:03:01.799 although you know, obviously markets went up and down, but 0:03:02.560 --> 0:03:05.800 generally speaking, you had a situation where where you had 0:03:05.800 --> 0:03:09.960 exceptionally low our store. So you know, our store is higher, right, 0:03:10.120 --> 0:03:12.680 I mean there's almost people who are saying that it's not. 0:03:13.040 --> 0:03:15.200 I think, you know, aren't considering that we're in a 0:03:15.200 --> 0:03:17.919 different regime now than we were the last ten years. 0:03:18.280 --> 0:03:20.680 I think the question is it higher like it was 0:03:20.680 --> 0:03:23.000 in two thousand and five or nineteen ninety five or 0:03:23.240 --> 0:03:26.800 you know, nineteen eighty and I suspect that that, yes, 0:03:26.919 --> 0:03:28.880 our store is higher than it was the last decade 0:03:29.000 --> 0:03:32.160 or so, but we're not going back to the nineteen 0:03:32.200 --> 0:03:34.680 eighties when you know, the real neutral rate was probably 0:03:34.680 --> 0:03:37.080 somewhere closer to eight or nine percent. So you know, 0:03:37.120 --> 0:03:40.200 we're not We're not there, but we're also not at 0:03:40.240 --> 0:03:42.280 fifty basis points where at one and a half percent 0:03:42.560 --> 0:03:45.120 or two percent something like that is our estimate of 0:03:45.120 --> 0:03:45.840 where our star is. 0:03:46.280 --> 0:03:48.960 So if I go you know, to the Morgan Stanley 0:03:49.160 --> 0:03:51.680 fixing come trading floor and go over to the government desk, 0:03:51.720 --> 0:03:53.520 I kind of feeling the traders there just kind of 0:03:53.920 --> 0:03:56.240 scrolling through TikTok there's not a lot going on. It 0:03:56.280 --> 0:04:00.000 feels like it's a trade range bound kind of trading range, 0:04:00.800 --> 0:04:02.800 Is that right, iron, What maybe gets us out of that? 0:04:03.480 --> 0:04:05.960 Yeah, we've been in a range. I think we'll probably 0:04:06.000 --> 0:04:07.920 stay into a range at least until next week when 0:04:07.960 --> 0:04:10.839 we get CPI in retail sales. You know, I don't 0:04:10.880 --> 0:04:12.800 see really what would knock us out of this. So 0:04:13.240 --> 0:04:16.960 it's not unusual for ten longer term treasury yields to 0:04:16.960 --> 0:04:20.080 fall into some thirty to fifty base point range you know, 0:04:20.160 --> 0:04:22.240 call it forty basis point range right now that we're in, 0:04:22.520 --> 0:04:24.840 and just chop around within that until you get some 0:04:24.880 --> 0:04:29.839 impetus that's usually fundamentally driven that drives the market out 0:04:29.839 --> 0:04:33.000 of those ranges. And sometimes those ranges last for months 0:04:33.040 --> 0:04:34.560 and months at a time. There was a you know, 0:04:34.560 --> 0:04:37.120 I remember going back to twenty fifteen when we were 0:04:37.160 --> 0:04:39.000 in the same range for about six months and I 0:04:39.000 --> 0:04:42.360 was thinking about switching careers because there was nothing right about. So, 0:04:42.720 --> 0:04:44.520 you know, I don't think we're going there right. I 0:04:44.520 --> 0:04:47.080 think that we'll get some more information over at least 0:04:47.080 --> 0:04:49.840 the next six weeks that gives us a better direction, 0:04:49.880 --> 0:04:51.920 and maybe that direction and I think that this is 0:04:51.960 --> 0:04:55.360 something that is permeating some of the trading desks, is, Hey, 0:04:55.360 --> 0:04:57.640 what happens if the FED doesn't cut as much as 0:04:57.640 --> 0:05:00.120 the market's pricing. What happens if the FED only it 0:05:00.120 --> 0:05:02.520 cuts two or three times? In fact, we have a 0:05:02.560 --> 0:05:05.080 model that you can find out, go to Beico Models, 0:05:05.360 --> 0:05:10.160 and we look at the options market on some industry 0:05:10.160 --> 0:05:12.680 of futures contracts, and what we say is that the 0:05:12.720 --> 0:05:15.360 market's pricing for a twenty percent chance that the FED 0:05:15.440 --> 0:05:18.480 only cuts once or twice this year. And that's something 0:05:18.520 --> 0:05:20.880 that we have to keep in mind. That's a real 0:05:20.920 --> 0:05:23.839 possibility now, and if we continue to have such good data, 0:05:24.160 --> 0:05:26.200 I think it becomes a higher and higher probability as 0:05:26.240 --> 0:05:26.880 a year goes on. 0:05:27.400 --> 0:05:29.640 That's really interesting. I wonder what would happen in the 0:05:29.680 --> 0:05:32.800 markets in that case. Like equities may I mean like 0:05:32.839 --> 0:05:35.560 that equities may like get okay if the growth is 0:05:35.640 --> 0:05:37.840 really there, But the bond market, I don't know. I 0:05:37.880 --> 0:05:39.799 think that would be a real sea change. We've already 0:05:39.839 --> 0:05:43.040 come in from like six or seven to four real 0:05:43.120 --> 0:05:44.800 quick twenty seconds thirty year today? 0:05:44.800 --> 0:05:45.680 Are you looked? You care? 0:05:46.839 --> 0:05:47.119 Yeah? 0:05:47.120 --> 0:05:50.520 Well, yesterday's ten year auction went very well, So I 0:05:50.600 --> 0:05:52.559 am a little bit concerned about the thirty year today 0:05:52.560 --> 0:05:55.640 because what we've seen sometimes is one auction does well, 0:05:55.680 --> 0:05:57.600 the next auction does poorly, or vice versa. 0:05:58.440 --> 0:06:00.800 Bar enough, how can you know there's an tree auction today? 0:06:00.880 --> 0:06:03.040 Because I know pays. 0:06:02.839 --> 0:06:03.680 Attention to stuff. 0:06:03.720 --> 0:06:06.120 To be totally fair, she pays attention in class. Bloomberg 0:06:06.160 --> 0:06:09.000 Daybreak is really helpful with these things. So I said 0:06:09.000 --> 0:06:11.240 it you get after that, work it up there. Oh 0:06:11.360 --> 0:06:12.200 listen John Tucker. 0:06:12.240 --> 0:06:14.880 But if you read it Bloomberg day Break after five 0:06:15.000 --> 0:06:18.960 thirty am, they have really concise bits, not long stories, 0:06:19.120 --> 0:06:20.839 really bite sized information for you. 0:06:20.880 --> 0:06:22.440 And then I cut and past, put them on my notes, 0:06:22.480 --> 0:06:23.159 put them on my thing. 0:06:23.240 --> 0:06:24.760 Look at shoot our jersey. 0:06:24.760 --> 0:06:27.279 Thanks no more organized in act intelligence. 0:06:26.880 --> 0:06:28.560 Senior right strateg Just thank you so much for joining 0:06:28.600 --> 0:06:30.640 us and learning. I mean, this is how she gets 0:06:30.680 --> 0:06:32.680 so smart and see. But the key thing is if 0:06:32.720 --> 0:06:35.640 you get in after it five thirty this is Bloomberg. 0:06:39.839 --> 0:06:43.760 You're listening to the Bloomberg Intelligence Podcast. Catch us live 0:06:43.839 --> 0:06:46.880 weekdays at ten am Eastern on Apple card Play and 0:06:46.880 --> 0:06:49.800 Android Auto with the Bloomberg Business app. You can also 0:06:49.880 --> 0:06:53.360 listen live on Amazon Alexa from our flagship New York Station, 0:06:53.720 --> 0:06:56.479 just say Alexa playing Bloomberg eleven thirty. 0:06:58.360 --> 0:07:00.880 Let's go back to Disney, their stock that's having a 0:07:00.880 --> 0:07:03.960 good day, up about nine percent here in early trading 0:07:04.000 --> 0:07:07.040 on the back of a quarter that for some people was, 0:07:07.240 --> 0:07:09.960 you know, kind of like boy, I think they've got 0:07:09.960 --> 0:07:12.440 their handle on this thing now. And Laura Martin at 0:07:12.440 --> 0:07:14.720 Needham she upgraded the stock to a buy today, So 0:07:14.760 --> 0:07:18.080 that's helping the stock up nine point nine percent here today. 0:07:18.200 --> 0:07:20.400 Let's check in with Getha rang Anatha and she covers 0:07:20.440 --> 0:07:23.800 all the media stocks in the industry for Bloomberg Intelligence, 0:07:23.800 --> 0:07:26.560 she's been all over this name here. Hey, Keith, the 0:07:26.600 --> 0:07:28.400 stock's up about ten percent here. What do you think 0:07:28.400 --> 0:07:30.800 the market's reacting to here today? 0:07:31.960 --> 0:07:34.960 Yeah, I mean Disney is definitely back, Paul back with 0:07:35.040 --> 0:07:38.400 a bank. Market is reacting to all of the profitability 0:07:38.440 --> 0:07:40.680 that they're seeing with this company. I mean, one of 0:07:40.720 --> 0:07:43.720 the big pain points with Disney has really been the 0:07:43.800 --> 0:07:46.600 lack of streaming profitability. But now there seems to be 0:07:47.120 --> 0:07:49.840 a clear path to the streaming business kind of getting 0:07:49.840 --> 0:07:52.640 to that profitability metric. So we saw the losses come 0:07:52.640 --> 0:07:55.760 in way below expectations. It was sixty five percent below 0:07:55.760 --> 0:07:58.760 what people were projecting. They're still kind of guiding to 0:07:59.160 --> 0:08:02.320 you know, hitting profitability by the September quarter, but most people, 0:08:02.320 --> 0:08:05.280 i think on the street expected to happen much much sooner. 0:08:05.520 --> 0:08:07.560 And then Hugh Johnston, who's the new CFO and this 0:08:07.680 --> 0:08:10.920 was his first call with Disney, basically said that look 0:08:11.240 --> 0:08:15.560 to or expect double digit operating margins in the streaming business. 0:08:15.600 --> 0:08:18.000 And I think that was something that was really really 0:08:18.080 --> 0:08:20.640 powerful because we know that, you know, the number that 0:08:20.680 --> 0:08:23.440 we're all chasing is that twenty percent operating margin where 0:08:23.480 --> 0:08:25.480 you know Netflix has been with their streaming business. 0:08:25.640 --> 0:08:28.080 So the based on what we got, what is your 0:08:28.160 --> 0:08:30.320 question today versus your question yesterday? 0:08:31.400 --> 0:08:33.959 I mean, I think the one area that we kind 0:08:33.960 --> 0:08:36.839 of still need clarity is how all of this the 0:08:36.920 --> 0:08:39.920 streaming bundles are going to work. So it's really good 0:08:39.920 --> 0:08:43.520 to see them kind of be proactive and go out 0:08:43.559 --> 0:08:47.360 with their own solution. So they have that sports super 0:08:47.400 --> 0:08:49.680 app that's coming out a little bit later this year 0:08:49.760 --> 0:08:52.280 in conjunction with Fox and Warner Brothers. They have their 0:08:52.360 --> 0:08:56.760 own ESPN Plus standalone app. Again a little bit of 0:08:57.520 --> 0:08:59.559 you know, we're not really sure whether those are necessarily 0:08:59.600 --> 0:09:01.480 going to can applies to each other. I don't think so. 0:09:01.559 --> 0:09:03.680 I think, really Disney, what they're trying to do here 0:09:03.800 --> 0:09:07.040 is kind of create this this super bundle because they 0:09:07.240 --> 0:09:10.520 know that, you know, content bundling works, and everybody's kind 0:09:10.520 --> 0:09:12.920 of looking aggregation is the holy grail, and I think 0:09:12.920 --> 0:09:15.120 Disney wants to be at the forefront of it. But 0:09:15.160 --> 0:09:17.560 definitely we need a little bit more kind of clarity 0:09:17.600 --> 0:09:19.880 at least around like what the financial value creation is 0:09:19.920 --> 0:09:20.280 going to be. 0:09:20.960 --> 0:09:23.360 How about the theme park business that seems to continue 0:09:23.360 --> 0:09:26.240 to be a really solid business for them, and I 0:09:26.280 --> 0:09:27.960 know they you know, they announced several months ago that 0:09:27.960 --> 0:09:30.720 they're really stepping up their investment in their theme parks 0:09:30.720 --> 0:09:32.200 and their cruises and all that kind of stuff. How 0:09:32.200 --> 0:09:34.440 did that business do very very well? 0:09:34.480 --> 0:09:38.040 So again, operating income was for the quarter was well 0:09:38.080 --> 0:09:40.440 above three billion dollars. That was again above what the 0:09:40.440 --> 0:09:42.840 street was expecting. And really what we're seeing is a 0:09:42.880 --> 0:09:45.800 lot of momentum at the international parks. So they opened, 0:09:46.040 --> 0:09:48.480 you know, they've opened so many new attractions in their 0:09:49.160 --> 0:09:52.160 overseas properties. You have a new Frozen Land in Hong Kong. 0:09:52.440 --> 0:09:56.520 You have the new Zootopia attraction in Shanghai, and both 0:09:56.559 --> 0:09:59.559 of those are doing really really well for the company, 0:09:59.600 --> 0:10:01.640 and that has really enabled them to take, you know, 0:10:01.679 --> 0:10:05.400 implement all of these price increases. So international parks really 0:10:05.480 --> 0:10:08.600 kind of doing extremely well. Domestically. There's a little bit 0:10:08.600 --> 0:10:11.040 of pressure from wage inflation, there's a little bit of 0:10:11.040 --> 0:10:13.040 pressure from you know, tough comms from like the Walt 0:10:13.040 --> 0:10:16.400 Disney World fifty that anniversary celebration, but again, you know, 0:10:16.600 --> 0:10:19.640 just transient parks are really set up very very well, 0:10:20.080 --> 0:10:22.600 and you mentioned the sixty billion dollar investment. Now seventy 0:10:22.640 --> 0:10:26.640 percent of that capex is going to be towards new attractions, 0:10:26.720 --> 0:10:29.800 so this is really going to be a major, major 0:10:29.920 --> 0:10:31.480 profit driver for them going forward. 0:10:32.080 --> 0:10:34.920 Git there was a journal article that I just felt 0:10:34.960 --> 0:10:37.320 like helped someone like me who's not seeped in Disney, 0:10:37.360 --> 0:10:41.079 like you guys, understand how they're just seeping in to 0:10:41.320 --> 0:10:44.600 all the Americana that's out there. They said, Taylor Swift, 0:10:44.679 --> 0:10:48.600 football and Fortnite, but like anywhere that you will want 0:10:48.640 --> 0:10:50.720 to be or listen to or watch. 0:10:50.520 --> 0:10:53.000 Disney will be there. What did you make of the 0:10:53.040 --> 0:10:54.559 Fortnite investment? 0:10:55.840 --> 0:10:59.040 Super smart move by them, right, It's so strategic, it's 0:10:59.080 --> 0:11:01.280 so smart, and it's still a kind of not a 0:11:01.400 --> 0:11:04.240 huge investment. One point five billion gives them some steak, 0:11:04.320 --> 0:11:06.120 gives them some skin in the game, and there's a 0:11:06.160 --> 0:11:08.360 lot of upside, not too much downside. So I think 0:11:08.400 --> 0:11:11.000 a really good way for them. And remember, Alex, they've 0:11:11.000 --> 0:11:13.520 had this kind of really checkered past when it comes 0:11:13.520 --> 0:11:15.160 to video games. It's not that they haven't been there. 0:11:15.200 --> 0:11:17.679 They were in the publishing business. Didn't really work out 0:11:17.679 --> 0:11:21.000 for them. They exited that business in twenty sixteen started 0:11:21.080 --> 0:11:23.800 licensing out a lot of their content. But you know, licensing, 0:11:23.800 --> 0:11:26.360 you're still kind of this passive participant. They really need 0:11:26.400 --> 0:11:28.359 to be there. They need to be an active participant 0:11:28.360 --> 0:11:31.360 in the video gaming industry. There's so much overlap between 0:11:31.400 --> 0:11:33.440 all of the audiences that go to the you know, 0:11:33.440 --> 0:11:37.000 the Disney parks and you know the people who are gaming. Right, 0:11:37.000 --> 0:11:39.320 it's all these youngsters and they really want to be there, 0:11:40.160 --> 0:11:41.720 and this is a great way for them to do it. 0:11:42.440 --> 0:11:44.720 Well, listener, it just writes in here and says Carolo. 0:11:44.800 --> 0:11:48.560 Swift also announced her concert movie would be exclusively on 0:11:48.679 --> 0:11:50.840 Disney Plus starting next month. 0:11:51.240 --> 0:11:54.200 Thank you for that, with five new songs. Really, yeah, 0:11:54.240 --> 0:11:55.839 so you already saw it. You're gonna want to see 0:11:55.840 --> 0:11:58.400 it again because there's five new performances. 0:11:57.880 --> 0:12:00.400 On Contucker's all fired up for that, all right, So. 0:12:00.440 --> 0:12:02.040 I'm going to address it throughout the two You were 0:12:02.040 --> 0:12:02.319 going to. 0:12:02.240 --> 0:12:04.440 Have to say exactly. He to talk to us about 0:12:04.760 --> 0:12:07.040 the movie business to film, the entertainment business that was 0:12:07.640 --> 0:12:10.920 at one point for a long time just a sort 0:12:11.000 --> 0:12:15.280 of tremendous value. Just smash it after smash it, billion 0:12:15.320 --> 0:12:18.160 dollar box office became the norm. What are they saying 0:12:18.200 --> 0:12:19.880 about their theatrical business. 0:12:20.320 --> 0:12:22.439 Yeah, and they were asked about this last night, Paul, 0:12:22.480 --> 0:12:25.640 And you know, the content the studio has not really 0:12:25.679 --> 0:12:29.439 been the blockbuster you know that it was. We've had 0:12:29.440 --> 0:12:32.080 a whole string of misfires over the past few months. 0:12:32.160 --> 0:12:34.520 But I think what Barb Bager was saying is they 0:12:34.520 --> 0:12:37.280 are in the process of rebuilding. The whole content pipeline 0:12:37.320 --> 0:12:40.480 is refilling. They're having this really smart move here with 0:12:40.520 --> 0:12:43.480 this new Taylor Swift movie coming out on March fifteenth. 0:12:43.559 --> 0:12:46.240 And then they spoke about, you know, having this new 0:12:46.320 --> 0:12:48.720 Moana movie. This was originally going to be a series 0:12:48.760 --> 0:12:50.920 on Disney Plus it's it's now going to be a theatrical, 0:12:51.040 --> 0:12:54.319 full blown theatrical release. And again we're prepping for twenty 0:12:54.400 --> 0:12:57.240 twenty six, really, which is going to be the biggest 0:12:57.280 --> 0:12:59.760 year for the box office ever since the pandemic, and 0:12:59.840 --> 0:13:01.920 a lot of that will be Disney kind of driving 0:13:01.920 --> 0:13:04.480 the slate right with. You have the whole Star Wars 0:13:04.520 --> 0:13:07.240 coming back with Mandalorian and Grogu, you have a whole 0:13:07.280 --> 0:13:10.200 set of Marvel releases, so it's going to be really 0:13:10.200 --> 0:13:12.400 interesting as we kind of build to that. So again, 0:13:12.880 --> 0:13:15.800 nothing really major in twenty twenty four, maybe other than 0:13:15.840 --> 0:13:18.640 you know, kind of the Deadpool movie. But we're kind 0:13:18.640 --> 0:13:21.840 of building towards a much stronger slate in twenty five twenty. 0:13:21.880 --> 0:13:24.800 Nothing big coming except for the Deadpool. Excuse me, I've 0:13:24.840 --> 0:13:26.360 been waiting for this movie for years. 0:13:26.400 --> 0:13:27.439 Deadpool three. 0:13:27.920 --> 0:13:29.079 You're a big fan of the franchise. 0:13:29.120 --> 0:13:31.320 Definitely not my audience that I'm talking to right now. 0:13:32.280 --> 0:13:35.319 Okay, I thought you said Deadpool. I thought it was 0:13:35.360 --> 0:13:38.199 like a financial movie. I would have gone see. 0:13:38.040 --> 0:13:39.760 That Reynolds Deadpool. 0:13:40.600 --> 0:13:43.320 It's very brilliant. Yeah, I don't grow out much. 0:13:43.360 --> 0:13:46.920 This is the third one having Wolverine make a little cameo. 0:13:47.120 --> 0:13:47.480 Whatever. 0:13:47.559 --> 0:13:50.560 Anyway, it's gonna be awesome. Paul, What do you make 0:13:50.600 --> 0:13:51.720 of like how fast Disney was. 0:13:51.720 --> 0:13:54.720 Able to move Well, A lot of people tell you 0:13:54.760 --> 0:13:56.840 they didn't move fast enough. But it's I think when 0:13:56.880 --> 0:13:59.200 i Figer came in, I mean, yeah, yeah, and it's 0:13:59.200 --> 0:14:00.960 but the stock's been kind of dead money for a 0:14:00.960 --> 0:14:03.880 while and Githa well knows here. It's just a question 0:14:03.920 --> 0:14:05.679 of when can we get a sense of when the 0:14:05.800 --> 0:14:07.600 streaming losses are going to be in the rear view mirror. 0:14:07.920 --> 0:14:10.400 And you know, bob byger surprises. You know, I guess 0:14:10.520 --> 0:14:12.440 a year or so ago when he said some of 0:14:12.440 --> 0:14:14.560 these assets might be for sale, like the ABC networks, 0:14:14.600 --> 0:14:17.800 some of the cable networks. Any update on that, no. 0:14:17.960 --> 0:14:20.680 So you know, yes he did. He you know, we 0:14:20.720 --> 0:14:22.600 did have him kind of say everything's up for sale, 0:14:22.600 --> 0:14:24.400 and then he kind of walked back all of that. 0:14:24.960 --> 0:14:27.960 And now it's see, you know, it's kind of starting 0:14:28.000 --> 0:14:30.320 to make sense because they're obviously taking all that content, 0:14:30.760 --> 0:14:32.840 they're putting it now on the super app, So it 0:14:33.120 --> 0:14:34.840 makes sense for them to still kind of hold on 0:14:34.880 --> 0:14:37.200 to their linear TV assets because they still do have 0:14:37.320 --> 0:14:39.760 very valuable sports rights on there. So I think they're 0:14:39.840 --> 0:14:43.040 kind of aiming for this bigger, kind of grander strategy. 0:14:43.360 --> 0:14:45.240 I don't necessarily think that they're looking to sell any 0:14:45.280 --> 0:14:46.760 of their linear TV networks right now. 0:14:46.880 --> 0:14:49.440 So interesting. Okay, very good Keith, a great update, Thanks 0:14:49.440 --> 0:14:52.080 for taking the time. KEITHA wrong and nothing. She is 0:14:52.160 --> 0:14:55.520 the media analyst for Bloomberg Intelligence. Joining us via zoom 0:14:56.000 --> 0:15:00.280 from the HQ down at Princeton, New Jersey. 0:15:00.640 --> 0:15:04.520 You're listening to the Bloomberg Intelligence podcast. Catch us live 0:15:04.600 --> 0:15:07.320 weekdays at ten am Eastern on Apple car Playing and 0:15:07.440 --> 0:15:10.320 Broun Auto with the Bloomberg Business app. Listen on demand 0:15:10.360 --> 0:15:14.680 wherever you get your podcasts, or watch us live on YouTube. 0:15:16.080 --> 0:15:18.040 Here's one of the top red stories in the terminal 0:15:18.120 --> 0:15:22.440 right now. Greenlight Capital forced to shift its strategy as 0:15:22.480 --> 0:15:27.400 the growth of passive investing in algorithmic trading transformed the markets. 0:15:27.600 --> 0:15:30.600 Quite a statement from David Einhorn. He spoke to barrybit Holtz, 0:15:30.640 --> 0:15:33.160 who's the host of Masters in Business on Bloomberg Radio. 0:15:33.200 --> 0:15:34.760 Here's part of that conversation. 0:15:35.720 --> 0:15:40.000 I view the markets as fundamentally broken, like the fundamentally broken. 0:15:40.080 --> 0:15:40.920 That's a big statement. 0:15:41.000 --> 0:15:45.360 Yeah, there's value is just not a consideration for most 0:15:45.640 --> 0:15:48.240 investment money that's out there. There's all the machine money 0:15:48.240 --> 0:15:51.320 and algorithmic money, which doesn't have an opinion about value. 0:15:51.360 --> 0:15:53.840 It has an opinion about price, like what is the 0:15:53.840 --> 0:15:56.040 price going to be in fifteen minutes and I want 0:15:56.080 --> 0:15:58.160 to be ahead of that? Or zero day options, what 0:15:58.240 --> 0:15:59.800 is the price of the S and P or what 0:16:00.240 --> 0:16:02.560 stock you're doing for today, what's it going to be 0:16:02.640 --> 0:16:05.440 in the next half hour, two hours, three hours. Those 0:16:05.440 --> 0:16:08.960 are opinions about price. Those are not opinions about value. 0:16:09.240 --> 0:16:13.080 Passive investors have no opinion about value. They're going to 0:16:13.200 --> 0:16:16.680 assume everybody else has done the work right, right, and 0:16:16.720 --> 0:16:19.600 then you have all of what's left of active management, 0:16:19.880 --> 0:16:22.000 and so much of it the value industry has gotten 0:16:22.000 --> 0:16:23.240 completely annihilated. 0:16:24.560 --> 0:16:27.960 That was David Einhorn speaking to Barry good Holtz, who 0:16:28.040 --> 0:16:31.120 is the host of Masters in Business podcast. You can 0:16:31.120 --> 0:16:34.480 definitely listen to the whole interview on that podcast. Barry 0:16:34.520 --> 0:16:35.840 joins us now in the studio. 0:16:35.920 --> 0:16:38.400 Barry, what was your takeaway from the interview? 0:16:38.440 --> 0:16:41.200 I mean, you could argue, obviously he's talking his book, 0:16:41.240 --> 0:16:43.560 but today is a beautiful case in point of like 0:16:43.640 --> 0:16:46.440 nearing five thousand on a couple big tech stocks and 0:16:46.440 --> 0:16:46.800 that's it. 0:16:47.280 --> 0:16:49.600 So there were a couple of big takeaways. You know, 0:16:49.640 --> 0:16:53.280 we didn't talk about what he said surrounding the SEC 0:16:53.480 --> 0:16:55.800 no longer really enforcing things. She had to all enforce 0:16:55.840 --> 0:16:59.360 a little bit of insart or trading rules, but there's 0:16:59.360 --> 0:17:03.240 an absence there, according to Einhorn. To me, what's really 0:17:03.240 --> 0:17:06.560 fascinating about him is, here's a guy who had a 0:17:06.640 --> 0:17:10.959 spectacular start to his career first fifteen years, put up 0:17:11.000 --> 0:17:17.040 incredible numbers, famously shorted Allied Capital, famously shorted Lehman Brothers 0:17:17.080 --> 0:17:20.440 right before they went bankrupt, and then hit a rough 0:17:20.480 --> 0:17:24.600 stretch in the twenty tens. Normally that's where a story 0:17:24.680 --> 0:17:28.560 would end. But what makes Einhorn such a fascinating investor 0:17:29.040 --> 0:17:32.520 and analyst, and he was very proud to describe himself 0:17:32.560 --> 0:17:36.359 as an analyst, is they rethought their strategy. They looked 0:17:36.359 --> 0:17:38.879 at what's changed in the structure of the market and said, 0:17:39.359 --> 0:17:43.679 we can no longer do basic superficial value investing and 0:17:43.720 --> 0:17:47.360 hope the market catches up. We have to change our metrics, 0:17:47.359 --> 0:17:49.800 we have to change our approach. And for the past 0:17:49.840 --> 0:17:53.280 five years they've been putting up really good numbers. The 0:17:53.600 --> 0:17:54.439 shift has worked. 0:17:54.520 --> 0:17:56.320 What did they change? What did they change till I 0:17:56.320 --> 0:17:56.800 guess so? 0:17:57.440 --> 0:18:00.320 What their belief and their strategy used to be is 0:18:01.000 --> 0:18:05.639 find stocks that the market doesn't recognize the value what 0:18:05.720 --> 0:18:09.960 he described as variant perception, buy them and wait for 0:18:10.000 --> 0:18:12.359 the market to figure it out. Hey, you know, we 0:18:12.480 --> 0:18:15.160 buy stocks if the pe of the market is sixteen, 0:18:15.560 --> 0:18:17.639 we can find stocks with a pe of twelve and 0:18:17.680 --> 0:18:21.200 eventually everybody will come to our party, he said. As 0:18:21.320 --> 0:18:24.960 value investors have seen outflows as value funds have gone 0:18:25.000 --> 0:18:25.680 out of business. 0:18:26.160 --> 0:18:27.439