1 00:00:02,640 --> 00:00:05,320 Speaker 1: Welcome to the Bloomberg Penl podcast. I'm Paul swing you, 2 00:00:05,360 --> 00:00:07,680 Speaker 1: along with my co host Lisa Brahma wits. Each day 3 00:00:07,720 --> 00:00:10,240 Speaker 1: we bring you the most noteworthy and useful interviews for 4 00:00:10,280 --> 00:00:12,520 Speaker 1: you and your money. Whether at the grocery store or 5 00:00:12,560 --> 00:00:15,480 Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple 6 00:00:15,520 --> 00:00:17,959 Speaker 1: podcast or wherever you listen to podcasts, as well as 7 00:00:17,960 --> 00:00:20,360 Speaker 1: at Bloomberg dot com. We have been talking a lot 8 00:00:20,400 --> 00:00:24,040 Speaker 1: about stocks, as the SMP and NASDAC enter correction territory. 9 00:00:24,079 --> 00:00:27,200 Speaker 1: There is a question though about the bond market, in 10 00:00:27,240 --> 00:00:30,200 Speaker 1: particular the risk your credit markets. I'm really glad to 11 00:00:30,200 --> 00:00:32,720 Speaker 1: say that we've got Christine Todd, head of US Fixed 12 00:00:32,760 --> 00:00:35,800 Speaker 1: Income with us from a MOONDI pioneer which oversees ninety 13 00:00:35,800 --> 00:00:39,000 Speaker 1: billion dollars. Christine, thank you so much for being with us. 14 00:00:39,240 --> 00:00:42,040 Speaker 1: I want to start with high yield bonds because we're 15 00:00:42,080 --> 00:00:46,040 Speaker 1: seeing unprecedented outflows from the biggest e t f s 16 00:00:46,120 --> 00:00:48,960 Speaker 1: that invest in these uh in these securities, and we're 17 00:00:49,000 --> 00:00:53,400 Speaker 1: also seeing the shares of those ETFs decline significantly today 18 00:00:53,479 --> 00:00:55,400 Speaker 1: h y G, which is the biggest of it. UH 19 00:00:55,720 --> 00:01:00,000 Speaker 1: thinking the most is how concerned are you? Without getting 20 00:01:00,040 --> 00:01:01,920 Speaker 1: to the esoterics of E T F S versus the 21 00:01:01,960 --> 00:01:05,280 Speaker 1: underlying market. How concerned are you about some sort of 22 00:01:05,319 --> 00:01:08,640 Speaker 1: liquidity spiral that's going to really push prices down a 23 00:01:08,640 --> 00:01:13,000 Speaker 1: lot more? From here in bonds, we more see it 24 00:01:13,000 --> 00:01:17,320 Speaker 1: as an opportunity than a concern. UM. When you're an 25 00:01:17,319 --> 00:01:21,759 Speaker 1: active manager and you see that there is UM fear 26 00:01:21,800 --> 00:01:27,720 Speaker 1: based selling UM not fundamentally based UM, then you really 27 00:01:27,720 --> 00:01:33,280 Speaker 1: are seeing correlations separate and that the opportunity for bond 28 00:01:33,319 --> 00:01:38,080 Speaker 1: picking increases. So we can take advantage of forced selling 29 00:01:38,520 --> 00:01:44,399 Speaker 1: causing dislocation and valuations and improve the UM credit profile 30 00:01:44,880 --> 00:01:51,640 Speaker 1: and the yield profile of the portfolios as this is happening. UM. Interesting, Well, 31 00:01:51,680 --> 00:01:55,040 Speaker 1: I was going to say that, UM, you're you're really 32 00:01:55,080 --> 00:01:58,920 Speaker 1: seeing a process of price discovery and that when you 33 00:01:58,960 --> 00:02:03,640 Speaker 1: look at ind see and UM marked prices, Uh, it's 34 00:02:03,720 --> 00:02:09,480 Speaker 1: it's really more a gauge than a execution level. So 35 00:02:09,560 --> 00:02:12,440 Speaker 1: that too is something that you can take thorough advantage of. 36 00:02:13,000 --> 00:02:15,799 Speaker 1: And that the ets being four sellers are at the 37 00:02:15,840 --> 00:02:19,680 Speaker 1: mercy of so Christine. So if someone was brave enough 38 00:02:19,720 --> 00:02:22,000 Speaker 1: to dip their toe back into the bond market, here 39 00:02:22,000 --> 00:02:26,560 Speaker 1: where some sectors that you think they should look for initially, Well, 40 00:02:26,720 --> 00:02:29,600 Speaker 1: the obvious place to look is in the energy sector 41 00:02:30,200 --> 00:02:34,080 Speaker 1: UM that is taking the biggest hit from the fears 42 00:02:34,120 --> 00:02:39,120 Speaker 1: around the coronavirus, and the more stable subsectors with energy 43 00:02:39,680 --> 00:02:44,240 Speaker 1: UM like pipelines are are less leveraged to the price 44 00:02:44,280 --> 00:02:47,519 Speaker 1: of the commodity, and we think there are really strong 45 00:02:47,520 --> 00:02:52,320 Speaker 1: opportunities there. What we're doing is really topping up our 46 00:02:52,360 --> 00:02:56,720 Speaker 1: best ideas rather than adding new names to the portfolio, 47 00:02:56,880 --> 00:03:01,000 Speaker 1: So sticking with our convictions and doubling down on where 48 00:03:01,040 --> 00:03:04,040 Speaker 1: we see value. So are you doubling down on pipelines? 49 00:03:05,320 --> 00:03:09,480 Speaker 1: We are reaching our targets, which is UM an equal 50 00:03:09,520 --> 00:03:13,520 Speaker 1: to overweight an energy via exposure to pipelines. And why 51 00:03:13,520 --> 00:03:17,360 Speaker 1: did you start doing that? So we've been active in 52 00:03:17,840 --> 00:03:21,640 Speaker 1: UH managing around the subsectors of energy, and we've been 53 00:03:21,680 --> 00:03:24,160 Speaker 1: accelerating that process in the last couple of days, but 54 00:03:25,080 --> 00:03:28,560 Speaker 1: not phrenetically. I mean, the key here is to be patient. 55 00:03:29,200 --> 00:03:32,440 Speaker 1: And we don't think that we've seen floor and prices 56 00:03:32,440 --> 00:03:35,640 Speaker 1: in the wides and yields UM. You know, we've only dropped, 57 00:03:35,920 --> 00:03:37,920 Speaker 1: you know, in high yields in the terms of the 58 00:03:37,960 --> 00:03:41,760 Speaker 1: index you know, call it eighties and ninety basis points 59 00:03:41,800 --> 00:03:46,480 Speaker 1: since the UM Corona scare really took hold and we're 60 00:03:46,560 --> 00:03:49,960 Speaker 1: down you know, over our d and twenty basis points 61 00:03:50,000 --> 00:03:51,960 Speaker 1: since the beginning of two thousand nineteen. So this is 62 00:03:52,000 --> 00:03:56,320 Speaker 1: not UM, you know, a wide by recommendation. This is 63 00:03:56,400 --> 00:03:59,440 Speaker 1: being very selective in the names that you pick and 64 00:03:59,760 --> 00:04:03,880 Speaker 1: UM sticking with your convictions from a bottom up fundamental analysis. So, Christine, 65 00:04:03,880 --> 00:04:06,720 Speaker 1: I'm looking at my Bloomberg termal here to your treasury 66 00:04:06,760 --> 00:04:11,000 Speaker 1: one point zero five, very near the all time low. 67 00:04:11,240 --> 00:04:13,560 Speaker 1: Do we need to be on a zero interst rate 68 00:04:13,640 --> 00:04:16,760 Speaker 1: watch for the two year? Do you think? Well? The 69 00:04:16,800 --> 00:04:19,880 Speaker 1: Feed has been very clear about wanting to stay very 70 00:04:19,920 --> 00:04:24,919 Speaker 1: far away from zero bound interest rates and UH. The 71 00:04:25,200 --> 00:04:28,839 Speaker 1: at some point though the FED is resisting. At some point, 72 00:04:28,920 --> 00:04:32,640 Speaker 1: the Fed is going to want to see UM longer 73 00:04:32,720 --> 00:04:36,240 Speaker 1: term rates rise more than shorter term rates UM, but 74 00:04:36,320 --> 00:04:40,760 Speaker 1: to see optimism in the markets. So you might see 75 00:04:41,120 --> 00:04:45,400 Speaker 1: the front end of the curve come down with the 76 00:04:45,400 --> 00:04:50,280 Speaker 1: FED succumbing to pressure UM from the coronavirus, mainly from 77 00:04:50,320 --> 00:04:56,159 Speaker 1: tighter financial conditions UM, not so much from the administration UM, 78 00:04:56,279 --> 00:04:59,960 Speaker 1: but in reaction to UM. You know, the consumer retrend 79 00:05:00,040 --> 00:05:03,080 Speaker 1: shan and probably what you'd see is a fifty basis 80 00:05:03,120 --> 00:05:06,880 Speaker 1: point move UM characterized as an emergency cut that could 81 00:05:06,920 --> 00:05:11,360 Speaker 1: be walked back when the crisis subsides. So the answer 82 00:05:11,400 --> 00:05:14,520 Speaker 1: to that is, we could see lower two year rates, 83 00:05:15,040 --> 00:05:18,440 Speaker 1: but UM, the market wouldn't come down to zero because 84 00:05:18,440 --> 00:05:24,240 Speaker 1: they would be optimism around the stimulative leaning of the 85 00:05:24,279 --> 00:05:28,040 Speaker 1: Fed and the stability of economic growth. Christine, just real 86 00:05:28,120 --> 00:05:30,640 Speaker 1: quick here thirty seconds. I'm looking right now. It Fed 87 00:05:30,680 --> 00:05:33,800 Speaker 1: funds rates pricing in almost three and a half rate 88 00:05:33,800 --> 00:05:36,440 Speaker 1: cuts by the end of January. Do you think that 89 00:05:36,440 --> 00:05:38,520 Speaker 1: that's reasonable? Do you expect the Fed to cut that 90 00:05:38,680 --> 00:05:44,359 Speaker 1: that much? We do not. UM. We are very confident 91 00:05:44,600 --> 00:05:49,640 Speaker 1: that the FED is influenced by the economic fundamentals and 92 00:05:49,760 --> 00:05:52,760 Speaker 1: that the pressure from as I said, the yield curve 93 00:05:52,839 --> 00:05:58,880 Speaker 1: the administration UM can be avoided. UM though UH, a 94 00:05:59,080 --> 00:06:02,640 Speaker 1: consumer retrend MINT and the reversal of some of the 95 00:06:02,800 --> 00:06:06,560 Speaker 1: very strong economic numbers that we've seen would cause the 96 00:06:06,600 --> 00:06:11,760 Speaker 1: Fed to act. And as mentioned UH, an emergency move 97 00:06:11,920 --> 00:06:15,159 Speaker 1: of fifty basis points could be easily walked back, but 98 00:06:15,279 --> 00:06:22,240 Speaker 1: we don't see a strategic plotting towards easier policy because 99 00:06:22,520 --> 00:06:25,359 Speaker 1: of the fear in the market of the coronavirus. It 100 00:06:25,360 --> 00:06:29,520 Speaker 1: would be based on the fundamentals the consumer, the housing market, 101 00:06:29,520 --> 00:06:31,960 Speaker 1: the job market, et cetera. Christine Todd, thanks so much 102 00:06:31,960 --> 00:06:34,839 Speaker 1: for joining us to really appreciate your, uh, your thoughts 103 00:06:34,880 --> 00:06:36,839 Speaker 1: on the fixed income market. Christine is the head of 104 00:06:36,920 --> 00:06:39,960 Speaker 1: US fixed income for a Mundi pioneer of about ninety 105 00:06:40,040 --> 00:06:47,840 Speaker 1: billion dollars under management based in Boston. There's sort of 106 00:06:47,880 --> 00:06:51,080 Speaker 1: an expectation that at a certain point there will be 107 00:06:51,160 --> 00:06:54,080 Speaker 1: some sort of stimulus, whether it be monetary as is 108 00:06:54,120 --> 00:06:57,239 Speaker 1: currently being priced into the Fed funds features, or whether 109 00:06:57,279 --> 00:07:00,080 Speaker 1: it will be fiscal. And this certainly comes as the 110 00:07:00,080 --> 00:07:03,360 Speaker 1: Democratic debates heat up as we head into Super Tuesday, 111 00:07:03,720 --> 00:07:07,440 Speaker 1: leading to a question, what is the cost of some 112 00:07:07,520 --> 00:07:10,120 Speaker 1: of these fiscal stimulus plans, in particular those put out 113 00:07:10,120 --> 00:07:13,000 Speaker 1: by Bernie Sanders And doesn't matter? Ben Holland took a 114 00:07:13,000 --> 00:07:15,800 Speaker 1: look at that. He's a political economy editor for Bloomberg News, 115 00:07:15,880 --> 00:07:18,640 Speaker 1: joining us from our ninety now on studios in Washington, 116 00:07:18,720 --> 00:07:22,160 Speaker 1: d C. Ben, you wrote that perhaps it doesn't even 117 00:07:22,280 --> 00:07:26,360 Speaker 1: matter whether Bernie Sanders is numbers actually add up because 118 00:07:26,400 --> 00:07:30,760 Speaker 1: borrowing rates are just so low. Can you explain? Yeah, 119 00:07:30,800 --> 00:07:33,080 Speaker 1: I think what's striking here is that there is this 120 00:07:33,200 --> 00:07:35,760 Speaker 1: debate going on in the Democratic Party, you have Bernie 121 00:07:35,760 --> 00:07:38,920 Speaker 1: Sanders with all these very big, you know, unprecedented in 122 00:07:39,040 --> 00:07:42,320 Speaker 1: recent history spending plans. He says he's going to pay 123 00:07:42,360 --> 00:07:45,760 Speaker 1: for them all by raising taxes on various things, and 124 00:07:45,840 --> 00:07:48,000 Speaker 1: his opponents say, oh, well, but your numbers don't add up, 125 00:07:48,560 --> 00:07:50,840 Speaker 1: and Bernie Sanders says, yes they do, and the opponents say, no, 126 00:07:50,920 --> 00:07:53,200 Speaker 1: they don't. And what's old is that while all this 127 00:07:53,280 --> 00:07:55,760 Speaker 1: is going on, the cost of government borrowing in the 128 00:07:55,840 --> 00:07:58,360 Speaker 1: United States has plunged to levels that have never been 129 00:07:58,360 --> 00:08:00,640 Speaker 1: seen before. So you might think it would be a 130 00:08:00,680 --> 00:08:03,040 Speaker 1: good time for both Bonie Sounders and the other Democrats 131 00:08:03,080 --> 00:08:05,480 Speaker 1: to say, well, if these plans don't in fact that 132 00:08:05,760 --> 00:08:07,720 Speaker 1: it doesn't matter, it might be a good thing. Maybe 133 00:08:07,760 --> 00:08:11,960 Speaker 1: the economy could use some more physical stimulants. So it's interesting, 134 00:08:12,000 --> 00:08:15,560 Speaker 1: Ben It raises a question, don't deficits matter? Doesn't the 135 00:08:15,680 --> 00:08:19,680 Speaker 1: national debt matter anymore? I think there's I don't think 136 00:08:19,720 --> 00:08:22,400 Speaker 1: that many people would make the case that deficits don't matter, 137 00:08:22,520 --> 00:08:24,520 Speaker 1: but I think more and more economists would make the 138 00:08:24,560 --> 00:08:27,559 Speaker 1: case that there is no reason why we should worry 139 00:08:27,600 --> 00:08:30,760 Speaker 1: about the ones that the United States is running right now, 140 00:08:31,200 --> 00:08:34,280 Speaker 1: because there's running deficits of around five percent of gross 141 00:08:34,280 --> 00:08:38,280 Speaker 1: domestic product. That's pretty big. It's nothing like you had 142 00:08:38,320 --> 00:08:42,000 Speaker 1: in two thousand and ten after the crisis, but for us, 143 00:08:42,200 --> 00:08:44,800 Speaker 1: you know, for a decade into an expansion, it's a 144 00:08:44,800 --> 00:08:47,760 Speaker 1: pretty big deficit. It's not causing inflation, it's not causing 145 00:08:47,760 --> 00:08:51,120 Speaker 1: flight from bond markets, it's not causing yields to go up, 146 00:08:51,160 --> 00:08:53,719 Speaker 1: it's not crowding out any investment. So a lot of 147 00:08:53,760 --> 00:08:56,920 Speaker 1: economists have concluded, well, it's not something we need to 148 00:08:56,920 --> 00:09:00,640 Speaker 1: worry about right now. Ben, what's the alternative? Certain here 149 00:09:00,920 --> 00:09:04,000 Speaker 1: that the more debt that an economy takes on, the 150 00:09:04,080 --> 00:09:07,320 Speaker 1: more that you head into a deflationary spiral where it's 151 00:09:07,360 --> 00:09:10,120 Speaker 1: sort of a weight hanging over the economy and it 152 00:09:10,200 --> 00:09:15,080 Speaker 1: doesn't act in a stimulative manner. Well, I think that 153 00:09:15,240 --> 00:09:17,520 Speaker 1: is a concern. But I think what's happened if if 154 00:09:17,559 --> 00:09:19,280 Speaker 1: you look at Japan, which has kind of led the 155 00:09:19,320 --> 00:09:20,960 Speaker 1: way and a lot of this stuff, and a lot 156 00:09:21,000 --> 00:09:23,640 Speaker 1: of other developed economies like the United States and Europe 157 00:09:23,679 --> 00:09:26,560 Speaker 1: are kind of getting that what you had was was 158 00:09:26,600 --> 00:09:30,960 Speaker 1: a big build up in private debt, and when that crashed, 159 00:09:31,160 --> 00:09:32,959 Speaker 1: which was about ten years before it crashed in the 160 00:09:33,040 --> 00:09:36,760 Speaker 1: United States. So in the late n what the government 161 00:09:36,800 --> 00:09:39,640 Speaker 1: was doing was really stepping in with deficit spending to 162 00:09:39,720 --> 00:09:42,040 Speaker 1: fill that big hole in demand that have been left 163 00:09:42,040 --> 00:09:44,719 Speaker 1: by the bursting of a private credit bubble. Well that's 164 00:09:44,720 --> 00:09:47,480 Speaker 1: pretty much what happened in the United States ten years later, 165 00:09:48,040 --> 00:09:50,800 Speaker 1: and the United States ever since two thousand eight, the 166 00:09:50,840 --> 00:09:53,600 Speaker 1: government has been stepping in just like the Japanese government 167 00:09:53,640 --> 00:09:56,880 Speaker 1: did to fill the gap in demand by its own 168 00:09:56,880 --> 00:10:00,560 Speaker 1: deficit spending. So Ben this sounds to me a lot 169 00:10:00,640 --> 00:10:04,240 Speaker 1: like modern monetary theory or M empty. Can you explain 170 00:10:04,320 --> 00:10:07,680 Speaker 1: what M empty is and is it becoming more accepted 171 00:10:07,720 --> 00:10:11,840 Speaker 1: by more economists? If you listen to what the most 172 00:10:11,840 --> 00:10:14,640 Speaker 1: economists say about m MT, you'd probably conclude that it 173 00:10:14,720 --> 00:10:17,200 Speaker 1: isn't becoming more accepted. But then if you listen to 174 00:10:17,240 --> 00:10:20,320 Speaker 1: the way that the economists talk about things like deficits 175 00:10:20,360 --> 00:10:22,960 Speaker 1: and government that I think you'd conclude that it is 176 00:10:23,080 --> 00:10:26,120 Speaker 1: becoming more accepted. So it's kind of creeping into the debate. 177 00:10:26,559 --> 00:10:29,160 Speaker 1: And the essential argument of m m T is that 178 00:10:30,600 --> 00:10:34,400 Speaker 1: when governments run depth sits, the thing that they have 179 00:10:34,440 --> 00:10:36,960 Speaker 1: to worry about is inflation. They don't have to worry 180 00:10:36,960 --> 00:10:40,040 Speaker 1: about going bankrupt. They might do if they're using another 181 00:10:40,080 --> 00:10:42,000 Speaker 1: you know, if they're borrowing in another currency. But if 182 00:10:42,000 --> 00:10:45,040 Speaker 1: you're the United States, if you're Japan, the United Kingdom, 183 00:10:45,200 --> 00:10:47,440 Speaker 1: you don't have to worry about going bankrupt. You have 184 00:10:47,520 --> 00:10:50,000 Speaker 1: to worry about, well, will I spend too much money 185 00:10:50,280 --> 00:10:56,240 Speaker 1: and create inflation? That's clearly not a problem right now. Fascinating. 186 00:10:56,440 --> 00:10:58,800 Speaker 1: Ben Holland, thank you so much for joining. I spend 187 00:10:58,800 --> 00:11:01,960 Speaker 1: hard political economy at for Bloomberg News, joining us from 188 00:11:02,559 --> 00:11:05,000 Speaker 1: One Studios in Washington, d C. And I will say, Paul, 189 00:11:05,360 --> 00:11:08,439 Speaker 1: the conversation comes at a really salient point, especially as 190 00:11:08,440 --> 00:11:11,959 Speaker 1: Hong Kong starts to do helicopter money, essentially giving each 191 00:11:12,040 --> 00:11:15,319 Speaker 1: family a certain quotation of just cash to go out 192 00:11:15,360 --> 00:11:29,959 Speaker 1: and spend an on street of us. And just walked 193 00:11:30,000 --> 00:11:32,480 Speaker 1: into the Bloomberg Atta Active Broker Studios in his hoodie, 194 00:11:32,559 --> 00:11:35,520 Speaker 1: his Bloomberg Intelligence hoodie, and he said, the world's melting down, 195 00:11:35,520 --> 00:11:38,040 Speaker 1: and you want me to talk about ink cartridges And 196 00:11:38,080 --> 00:11:39,920 Speaker 1: we said, yes, that is exactly what we want to 197 00:11:39,960 --> 00:11:42,520 Speaker 1: talk about. Because even though we do have the coronavirusphere 198 00:11:42,600 --> 00:11:45,760 Speaker 1: spreading and concerns about what that means, there is actual 199 00:11:45,800 --> 00:11:48,679 Speaker 1: business getting done and discussion of it and we want 200 00:11:48,679 --> 00:11:51,480 Speaker 1: to bring in Austin Carr, technology reporter for Bloomberg News, 201 00:11:51,520 --> 00:11:53,200 Speaker 1: as well as an on screen of Austin senior semi 202 00:11:53,200 --> 00:11:56,200 Speaker 1: conductor and hardware analyst. And Austin you wrote a story 203 00:11:56,320 --> 00:11:59,160 Speaker 1: for Business Week that Xerox and HPR and a thirty 204 00:11:59,160 --> 00:12:03,000 Speaker 1: five billion dollar fight over in cartridges, which is comical 205 00:12:03,040 --> 00:12:05,560 Speaker 1: considering the fact that the concept of paper and ink 206 00:12:05,840 --> 00:12:08,640 Speaker 1: seems to be going the way of the cart and horse. 207 00:12:09,160 --> 00:12:11,440 Speaker 1: What was sort of the gist of the piece. Well, 208 00:12:11,640 --> 00:12:13,920 Speaker 1: I think first of all, we should just clarify that 209 00:12:13,960 --> 00:12:16,760 Speaker 1: the printer market is still massive. In fact, it's estimated 210 00:12:16,800 --> 00:12:19,839 Speaker 1: that between the consumer and office market there's still about 211 00:12:19,880 --> 00:12:23,360 Speaker 1: three point two trillion pieces of paper printed every year. 212 00:12:23,400 --> 00:12:25,080 Speaker 1: So that takes a lot of ink, That takes a 213 00:12:25,080 --> 00:12:27,600 Speaker 1: lot of printer sales um So this is really a 214 00:12:27,600 --> 00:12:30,719 Speaker 1: story about two aging innovation giants the twentieth century. They 215 00:12:30,720 --> 00:12:34,080 Speaker 1: own the innovation market if Silicon Valley, they arguably invented 216 00:12:34,080 --> 00:12:37,200 Speaker 1: the sort of garage startup, and yet they've seen in 217 00:12:37,240 --> 00:12:39,920 Speaker 1: the last decade or so this disruption in the digital 218 00:12:39,920 --> 00:12:42,200 Speaker 1: market and then just hanging on to their old world 219 00:12:42,600 --> 00:12:46,040 Speaker 1: products like printers and ink, which really is what accounts 220 00:12:46,080 --> 00:12:49,000 Speaker 1: for a large portion of their profits. So this is 221 00:12:49,000 --> 00:12:51,400 Speaker 1: a story about Xerox trying to take over a much 222 00:12:51,480 --> 00:12:54,240 Speaker 1: larger aging giant to see whether they can create some 223 00:12:54,320 --> 00:12:58,240 Speaker 1: sort of printer super giant as the market continues to consolidate. 224 00:12:58,559 --> 00:13:00,400 Speaker 1: So on, and give us a sense here, I'm looking Zerox. 225 00:13:00,440 --> 00:13:03,120 Speaker 1: It's a much smaller company than HP. How are they 226 00:13:03,160 --> 00:13:08,559 Speaker 1: going to finance this thing debt? Quite quite simply today 227 00:13:08,600 --> 00:13:11,160 Speaker 1: than it was back in November when they proposed the deal. Absolutely, 228 00:13:11,240 --> 00:13:14,160 Speaker 1: and and this has become a point of contention to 229 00:13:15,040 --> 00:13:18,920 Speaker 1: UM for for HP in its refusal and its continuing 230 00:13:18,960 --> 00:13:25,120 Speaker 1: refusal of of the Xerox M and AM approach is 231 00:13:25,160 --> 00:13:28,280 Speaker 1: that it will be too debt heavy. UM and our 232 00:13:28,400 --> 00:13:32,560 Speaker 1: take is that, in fact, HP looked at xerox um 233 00:13:32,679 --> 00:13:36,800 Speaker 1: last year and they spurned that deal potentially because they 234 00:13:36,840 --> 00:13:39,880 Speaker 1: weren't enough cost synergies and they couldn't make the deal work. 235 00:13:40,320 --> 00:13:43,720 Speaker 1: Look in the grand scheme of things, right, So Austin 236 00:13:43,880 --> 00:13:48,360 Speaker 1: story is on point in that supplies is what matters. UM. 237 00:13:48,400 --> 00:13:51,320 Speaker 1: If you look at the supplies business, it is roughly 238 00:13:52,280 --> 00:13:55,400 Speaker 1: of overall HP sales. It's a very very all of 239 00:13:55,480 --> 00:13:59,960 Speaker 1: supply printing, including the consumer business and the corporate business 240 00:14:00,040 --> 00:14:02,880 Speaker 1: and supplies has a six operating margin which they want 241 00:14:02,880 --> 00:14:06,520 Speaker 1: to take to seventeen. Supplies alone probably is well into 242 00:14:06,559 --> 00:14:10,800 Speaker 1: the twenties UM. And they've tried to sort of use 243 00:14:10,880 --> 00:14:15,240 Speaker 1: this four box model in the previous CEO's tenure to 244 00:14:15,360 --> 00:14:19,440 Speaker 1: try and push more printers um and have it be 245 00:14:19,520 --> 00:14:22,280 Speaker 1: sticky over a long term with an office such that 246 00:14:22,320 --> 00:14:25,040 Speaker 1: it can drag the supplies business and so they'll give 247 00:14:25,040 --> 00:14:27,640 Speaker 1: you the printer at their discount. In the consumer business, 248 00:14:27,720 --> 00:14:30,800 Speaker 1: that hasn't necessarily worked because the consumers are buying the 249 00:14:30,880 --> 00:14:34,120 Speaker 1: cheap printers and then going to the fake printing supplies 250 00:14:34,160 --> 00:14:37,600 Speaker 1: from off brands and using that, so you you're not 251 00:14:37,720 --> 00:14:40,800 Speaker 1: sort of benefiting from that. I love the quote Austin 252 00:14:40,800 --> 00:14:43,240 Speaker 1: and your story. The industry may not be sexy, but 253 00:14:43,320 --> 00:14:46,240 Speaker 1: it's not going anywhere. There is a question though, and 254 00:14:46,280 --> 00:14:47,960 Speaker 1: I do want to bring it forward since and now 255 00:14:48,040 --> 00:14:50,440 Speaker 1: you did come in here and then the coronavirus is 256 00:14:50,600 --> 00:14:53,920 Speaker 1: the headline right now? What about supply chains? What about 257 00:14:54,280 --> 00:14:57,000 Speaker 1: some other aspects of these companies? Both of them shares 258 00:14:57,040 --> 00:14:59,680 Speaker 1: down more than three percent on a daylight today and 259 00:14:59,760 --> 00:15:01,560 Speaker 1: on I'd love you to take a crack of that, 260 00:15:01,600 --> 00:15:03,320 Speaker 1: I mean, do you have a sense of how much 261 00:15:03,440 --> 00:15:06,880 Speaker 1: they are affected? Here? Absolutely? Look, I mean the entire 262 00:15:07,760 --> 00:15:11,120 Speaker 1: tech ecosystem supply chain goes through China, and this is 263 00:15:11,200 --> 00:15:15,120 Speaker 1: the downside of having become concentrated in that part of 264 00:15:15,160 --> 00:15:18,760 Speaker 1: the world of the last twenty years, given logistics, ease, 265 00:15:19,040 --> 00:15:25,440 Speaker 1: cost preference, etcetera, etcetera. And so um uh and and 266 00:15:26,120 --> 00:15:28,560 Speaker 1: you're going to be impacted. One queue is done, right, 267 00:15:28,600 --> 00:15:30,760 Speaker 1: so you're gonna take numbers down for one queue. The 268 00:15:30,840 --> 00:15:33,840 Speaker 1: question is what does two Q look like, both from 269 00:15:33,840 --> 00:15:37,760 Speaker 1: a demand perspective as well as from a supply perspective, 270 00:15:37,800 --> 00:15:40,080 Speaker 1: and can you get product out the door to meet 271 00:15:40,120 --> 00:15:43,800 Speaker 1: that demand? And that's going to be the telling sign 272 00:15:44,160 --> 00:15:46,800 Speaker 1: if you don't have enough product and if demand is 273 00:15:46,840 --> 00:15:50,520 Speaker 1: week that matchup of those two will determine how you 274 00:15:50,600 --> 00:15:53,160 Speaker 1: shape up for the full year. Um and we have 275 00:15:53,240 --> 00:15:57,600 Speaker 1: some sensitivity here from from our work if you and 276 00:15:57,640 --> 00:16:00,360 Speaker 1: supplies are a big portion of that to what happens 277 00:16:00,400 --> 00:16:03,440 Speaker 1: is if you take supplies down, you take margins down 278 00:16:03,480 --> 00:16:06,080 Speaker 1: with it pretty hard. I mean, because because PCs are 279 00:16:06,160 --> 00:16:10,080 Speaker 1: a low to mid single digit operating margin business, it 280 00:16:10,120 --> 00:16:13,680 Speaker 1: ain't sexy by any stretch, right, So the printer, the 281 00:16:13,720 --> 00:16:16,720 Speaker 1: printer business and the supplies business is what's carrying HP. 282 00:16:17,160 --> 00:16:20,760 Speaker 1: You ding that business, coronavirus dings that and you print 283 00:16:20,800 --> 00:16:26,160 Speaker 1: even less then EPs is disproportionately her Austin, is this 284 00:16:26,200 --> 00:16:28,800 Speaker 1: still going to get done well? I think that's the 285 00:16:29,000 --> 00:16:32,040 Speaker 1: big question about the announcement that they had earlier this 286 00:16:32,080 --> 00:16:34,760 Speaker 1: week attached to their earnings, is that they're pushing back 287 00:16:34,760 --> 00:16:37,200 Speaker 1: on this deal by announcing, uh, you know, this big 288 00:16:37,200 --> 00:16:41,160 Speaker 1: boost of fifteen billion dollars in buy backs, uh, huge 289 00:16:41,160 --> 00:16:43,640 Speaker 1: cost savings is not just mentioned that they're looking for. 290 00:16:44,200 --> 00:16:46,400 Speaker 1: And so if you see any disruption that supply chain 291 00:16:46,480 --> 00:16:49,280 Speaker 1: or slow down in PC or printer sales even more 292 00:16:49,320 --> 00:16:52,000 Speaker 1: than what they've seen, that's gonna put a lot of 293 00:16:52,000 --> 00:16:55,080 Speaker 1: pressure on HP to sort of explore this deal more. 294 00:16:55,160 --> 00:16:57,680 Speaker 1: In Enrica, Laura's who came in a CEO in November 295 00:16:58,200 --> 00:17:01,080 Speaker 1: basically said, you know what, we're sort of going we 296 00:17:01,120 --> 00:17:03,320 Speaker 1: have a winning strategy. He dis xerox a bunch on 297 00:17:03,360 --> 00:17:05,680 Speaker 1: the earnings call, but at the same time he kept saying, 298 00:17:05,720 --> 00:17:07,639 Speaker 1: we're open to this idea. But a lot of if 299 00:17:07,640 --> 00:17:09,919 Speaker 1: you talk to analysts, they do feel like, you know, 300 00:17:10,440 --> 00:17:12,040 Speaker 1: there may be more of a likelihood of that HP 301 00:17:12,200 --> 00:17:15,119 Speaker 1: ends up buying Xerox than the other way around. Just 302 00:17:15,359 --> 00:17:18,000 Speaker 1: on the call. On the call, he was very explicit 303 00:17:18,080 --> 00:17:20,520 Speaker 1: about he says, they don't have good technology, they're they're 304 00:17:20,560 --> 00:17:24,200 Speaker 1: small by comparison, and uh, you know. And we spoke 305 00:17:24,240 --> 00:17:26,320 Speaker 1: to him after the call and he was, uh, he 306 00:17:26,359 --> 00:17:28,040 Speaker 1: said he was pumped up about how well it went. 307 00:17:28,480 --> 00:17:32,119 Speaker 1: Austo Car, thanks so much for joining Austin Car, technology 308 00:17:32,119 --> 00:17:34,479 Speaker 1: reporter for Bloomberg News and on Entreni bast and our 309 00:17:34,520 --> 00:17:38,280 Speaker 1: senior UH technology analyst for Bloomberg Telenges posts joining us 310 00:17:38,280 --> 00:17:48,359 Speaker 1: here in our Bloomberg Interactive Broker studio. Well. Last night, 311 00:17:48,400 --> 00:17:51,120 Speaker 1: President Trump held a press conference along with members of 312 00:17:51,160 --> 00:17:54,520 Speaker 1: the CDC to talk about the coronavirus and the state 313 00:17:54,560 --> 00:17:57,359 Speaker 1: of US preparedness for the virus. Let's tick a listen. 314 00:17:57,560 --> 00:18:01,280 Speaker 1: Because of all we've done, the risk to the American 315 00:18:01,520 --> 00:18:04,480 Speaker 1: people remains very low. We're ready to adapt and we're 316 00:18:04,480 --> 00:18:07,639 Speaker 1: ready to do whatever we have to. This one is different, 317 00:18:07,840 --> 00:18:10,440 Speaker 1: much different. This is a flu. This is like a flu. 318 00:18:10,640 --> 00:18:13,840 Speaker 1: I think the stock market will recover. Uh, the economy 319 00:18:13,880 --> 00:18:18,159 Speaker 1: is very strong. We are totally ready, willing enabled. That 320 00:18:18,280 --> 00:18:21,000 Speaker 1: was President Trump last evening at the White House talking 321 00:18:21,040 --> 00:18:24,959 Speaker 1: about the coronavirus and the preparedness of the United States 322 00:18:25,000 --> 00:18:27,840 Speaker 1: for that. Let's take a little bit deeper onto that 323 00:18:28,040 --> 00:18:32,080 Speaker 1: state of preparedness uh by the US government and economy. 324 00:18:32,160 --> 00:18:34,800 Speaker 1: Vivian Ho she's at James A. Baker, the Third Institute 325 00:18:34,880 --> 00:18:38,560 Speaker 1: Chair in Health Economics and Director Center for Health and 326 00:18:38,600 --> 00:18:42,960 Speaker 1: Biosciences at Rice University in Houston, Texas. Vivian, thanks so 327 00:18:43,040 --> 00:18:46,040 Speaker 1: much for joining us. Give us a sense of kind 328 00:18:46,040 --> 00:18:48,800 Speaker 1: of where you think the US is in terms of 329 00:18:48,880 --> 00:18:54,080 Speaker 1: preparedness for dealing with a potential wider outbreak of the 330 00:18:54,119 --> 00:18:58,680 Speaker 1: coronavirus in the US. I think the US is actually 331 00:18:58,880 --> 00:19:00,920 Speaker 1: in a fair amount of trouble in terms of what's 332 00:19:00,920 --> 00:19:05,360 Speaker 1: going to happen with the coronavirus, because the speech yesterday 333 00:19:05,400 --> 00:19:08,800 Speaker 1: basically told citizens that there wasn't much to worry about. 334 00:19:08,840 --> 00:19:12,200 Speaker 1: But we see the spread of the disease all over 335 00:19:12,280 --> 00:19:15,040 Speaker 1: the world. There are several countries with cases now, which 336 00:19:15,080 --> 00:19:18,280 Speaker 1: means it's only a matter of time before the disease 337 00:19:18,520 --> 00:19:21,639 Speaker 1: reaches the US unless the President wants to make a 338 00:19:21,640 --> 00:19:24,639 Speaker 1: decision that we cut off all trade in goods and 339 00:19:24,680 --> 00:19:27,719 Speaker 1: services and people traveling, which we could. We could do 340 00:19:27,760 --> 00:19:30,280 Speaker 1: that and we could then shut down the economy because 341 00:19:30,320 --> 00:19:33,680 Speaker 1: of how much of our economy depends on trade and 342 00:19:34,520 --> 00:19:38,120 Speaker 1: UM transfer of goods and services and people across borders 343 00:19:38,160 --> 00:19:42,320 Speaker 1: and so UM. We have local governments and schools and 344 00:19:42,320 --> 00:19:46,200 Speaker 1: and other UM places not prepared for what will happen 345 00:19:46,240 --> 00:19:49,280 Speaker 1: when this disease actually reaches this country. So what Vivian 346 00:19:49,359 --> 00:19:53,080 Speaker 1: should they be doing to prepare well? I thought that 347 00:19:53,240 --> 00:19:58,720 Speaker 1: UM when Anthony Fauci spoke yesterday afterwards, UM you know 348 00:19:58,840 --> 00:20:03,240 Speaker 1: he's he and others are saying, UM, try not to 349 00:20:03,320 --> 00:20:08,320 Speaker 1: be two alarmed. This is this is something like a flu. 350 00:20:08,480 --> 00:20:12,600 Speaker 1: We're going to have cases of UM diseases similar to 351 00:20:12,760 --> 00:20:15,879 Speaker 1: say to pneumonia, and those are of high risk to 352 00:20:16,119 --> 00:20:21,040 Speaker 1: seniors and those with compromised immune systems UM, and we 353 00:20:21,119 --> 00:20:24,680 Speaker 1: need to be directing more resources towards the c D 354 00:20:24,800 --> 00:20:28,600 Speaker 1: c UM. Apparently we don't have enough test kits that 355 00:20:28,640 --> 00:20:32,880 Speaker 1: are adequate for local UM local governments and state governments 356 00:20:32,880 --> 00:20:35,359 Speaker 1: to be able to test UM patients, So that's going 357 00:20:35,400 --> 00:20:38,800 Speaker 1: to be a problem. We're probably gonna have cases where 358 00:20:39,320 --> 00:20:42,280 Speaker 1: parts of the country are going to try and and 359 00:20:42,400 --> 00:20:47,400 Speaker 1: UM quarantine people at home, closed schools temporarily, UM, close 360 00:20:47,520 --> 00:20:52,159 Speaker 1: work offices temporarily. But my guess is because this is 361 00:20:52,200 --> 00:20:55,120 Speaker 1: so hard to control the spread of the disease, eventually 362 00:20:55,200 --> 00:20:58,560 Speaker 1: officials are going to throw their hands up and say, uh, sorry, 363 00:20:58,640 --> 00:21:01,600 Speaker 1: we can't handle this um and and try and go 364 00:21:01,680 --> 00:21:05,800 Speaker 1: about your normal everyday business or otherwise the economy really 365 00:21:05,800 --> 00:21:08,920 Speaker 1: takes for a significant period of time. So, Vivian, you know, 366 00:21:08,960 --> 00:21:11,520 Speaker 1: over the last several days, it appears that there's kind 367 00:21:11,520 --> 00:21:15,240 Speaker 1: of a disconnect between the CDC and the Trump administration 368 00:21:15,359 --> 00:21:18,479 Speaker 1: different you know, kind of framing the risk profile of 369 00:21:18,520 --> 00:21:22,199 Speaker 1: this disease. How problematic is that for you know, local 370 00:21:22,240 --> 00:21:25,040 Speaker 1: authorities to maybe make the decisions they need to make. 371 00:21:25,800 --> 00:21:29,720 Speaker 1: I think it's extremely problematic because there needs to be 372 00:21:29,960 --> 00:21:35,520 Speaker 1: some guidance and expertise at the top saying what resources, 373 00:21:36,000 --> 00:21:39,480 Speaker 1: um are these governments going to receive and what should 374 00:21:39,480 --> 00:21:41,840 Speaker 1: they be planning for And you need to have that 375 00:21:42,000 --> 00:21:45,639 Speaker 1: coming from the federal level unless there are UM state 376 00:21:45,720 --> 00:21:47,960 Speaker 1: experts who are going to give this guidance. Now, now, 377 00:21:47,960 --> 00:21:50,679 Speaker 1: I think Alexaser is a terrific Secretary of Health and 378 00:21:50,760 --> 00:21:54,480 Speaker 1: Human Services, but it troubles me that that that Vice 379 00:21:54,520 --> 00:21:57,760 Speaker 1: President Pence was put in charge of dealing with this disease. 380 00:21:58,040 --> 00:22:01,840 Speaker 1: You know, when America goes to war or goes to battle, 381 00:22:02,200 --> 00:22:05,480 Speaker 1: we put a general in charge who has military experience. 382 00:22:05,960 --> 00:22:08,959 Speaker 1: Um if we're as a country going to try and 383 00:22:09,000 --> 00:22:12,280 Speaker 1: fight this disease, we should be having a doctor or 384 00:22:12,320 --> 00:22:16,439 Speaker 1: an epidemiologist who understands the spread of infectious diseases calling 385 00:22:16,480 --> 00:22:19,679 Speaker 1: the shots. So let's walk through the iterations of what 386 00:22:19,720 --> 00:22:23,480 Speaker 1: you expect is most likely, because it is highly unlikely 387 00:22:23,480 --> 00:22:26,720 Speaker 1: that the United States at this point would or could 388 00:22:26,760 --> 00:22:30,119 Speaker 1: completely shut off its borders and all trade. What do 389 00:22:30,200 --> 00:22:33,600 Speaker 1: you expect to happen based on the contagiousness of the 390 00:22:33,600 --> 00:22:36,240 Speaker 1: disease that we are familiar with at this point, as 391 00:22:36,240 --> 00:22:38,720 Speaker 1: well as the preparatory measures that have been put in place. 392 00:22:39,760 --> 00:22:43,240 Speaker 1: I think it's I think it's highly unpredictable at this point, 393 00:22:43,320 --> 00:22:46,040 Speaker 1: simply because they're going to be different authorities who are 394 00:22:46,040 --> 00:22:49,840 Speaker 1: going to make different decisions and and and we don't 395 00:22:49,880 --> 00:22:52,359 Speaker 1: know who is going to be giving them counseling. But 396 00:22:52,440 --> 00:22:56,760 Speaker 1: you could have everything from um uh, you know, certain 397 00:22:56,800 --> 00:23:00,080 Speaker 1: governors saying Okay, we're going to declare a holiday and 398 00:23:00,080 --> 00:23:03,160 Speaker 1: and everyone stay home for a week to try and 399 00:23:03,640 --> 00:23:07,399 Speaker 1: get control of what happens to other states saying, well, 400 00:23:07,600 --> 00:23:10,280 Speaker 1: we need to go about our business and let's go 401 00:23:10,320 --> 00:23:13,040 Speaker 1: ahead and do this and UM, but let's try and 402 00:23:13,080 --> 00:23:17,760 Speaker 1: funnel as much resources as we can towards UM, towards 403 00:23:17,920 --> 00:23:22,040 Speaker 1: public clinics, and towards hospitals to deal with the expected 404 00:23:22,160 --> 00:23:24,400 Speaker 1: rise in the number of cases. I mean, there's a 405 00:23:24,440 --> 00:23:28,480 Speaker 1: fair amount of fluctuation that goes on every year in 406 00:23:28,480 --> 00:23:31,800 Speaker 1: the health care system already because of the flu and 407 00:23:31,880 --> 00:23:35,359 Speaker 1: so um. So our health care experts, you know, people 408 00:23:35,440 --> 00:23:37,879 Speaker 1: running our hospitals do know how to deal with this. 409 00:23:38,080 --> 00:23:41,000 Speaker 1: There's always a lot of discretion in terms of do 410 00:23:41,040 --> 00:23:45,120 Speaker 1: we admit patients with pneumonia and do we not? So 411 00:23:45,119 --> 00:23:48,240 Speaker 1: so in a sense they can deal with this. I 412 00:23:48,280 --> 00:23:51,680 Speaker 1: think it's just the problem is there's so much anxiety 413 00:23:51,720 --> 00:23:54,040 Speaker 1: and panic on top of it. You know, if you 414 00:23:54,080 --> 00:23:56,280 Speaker 1: get the flu, you're kind of like, I've had this, 415 00:23:56,359 --> 00:23:58,320 Speaker 1: I've you know, I've had this before, and they're saying 416 00:23:58,320 --> 00:24:00,560 Speaker 1: the mortality rate is somewhat similar or to the flu, 417 00:24:00,720 --> 00:24:04,040 Speaker 1: but it's just new. So Vivian, how do you think 418 00:24:04,160 --> 00:24:06,840 Speaker 1: this will play out in terms of the spread in 419 00:24:06,880 --> 00:24:09,160 Speaker 1: the US? Are you are the good folks at Rice 420 00:24:09,320 --> 00:24:11,080 Speaker 1: thinking this is going to happen and this is gonna 421 00:24:11,119 --> 00:24:13,040 Speaker 1: be bad. What's kind of your base case there? Oh, 422 00:24:13,119 --> 00:24:17,400 Speaker 1: I think everyone is is in is in disagreement right now. 423 00:24:17,560 --> 00:24:20,280 Speaker 1: I personally think it's only a matter of time. And 424 00:24:20,320 --> 00:24:22,720 Speaker 1: I have no idea whether it's going to happen within 425 00:24:22,760 --> 00:24:25,399 Speaker 1: the next two or three months, or whether it's going 426 00:24:25,440 --> 00:24:29,040 Speaker 1: to happen in six months or in a year. It's 427 00:24:29,200 --> 00:24:32,080 Speaker 1: just too early to say, because the scientists don't know 428 00:24:32,280 --> 00:24:35,520 Speaker 1: how the disease is spreading. They don't understand why it's 429 00:24:35,520 --> 00:24:38,400 Speaker 1: showing up, for example, in California with a person who 430 00:24:38,440 --> 00:24:42,280 Speaker 1: supposedly has no contact with anybody from China. Vivian Ho, 431 00:24:42,440 --> 00:24:44,600 Speaker 1: thank you so much for being with us. Vivian Hoe 432 00:24:44,720 --> 00:24:47,520 Speaker 1: is the director of the Center for Health and Biosciences 433 00:24:47,560 --> 00:24:50,880 Speaker 1: at Rice University, also the James A. Baker Institute Chair 434 00:24:50,880 --> 00:24:55,200 Speaker 1: and Health economics. Really interesting to hear what the potential 435 00:24:55,280 --> 00:24:58,080 Speaker 1: concerns are in terms of how to prepare for something 436 00:24:58,119 --> 00:25:01,120 Speaker 1: like this. It does seem though, Paul, and not being 437 00:25:01,119 --> 00:25:04,240 Speaker 1: a doctor or anything else, but looking at the medical 438 00:25:04,359 --> 00:25:07,760 Speaker 1: supplies industry, there seems to be a little bit more 439 00:25:07,800 --> 00:25:11,200 Speaker 1: optimism that six months a year run rate actually is 440 00:25:11,280 --> 00:25:15,240 Speaker 1: helpful in developing the right medications, UH and and vaccines, 441 00:25:15,280 --> 00:25:18,000 Speaker 1: and we are seeing some of those companies seeing their 442 00:25:18,000 --> 00:25:21,239 Speaker 1: shares surge as they prepare for that. Yeah, exactly right. 443 00:25:21,280 --> 00:25:24,200 Speaker 1: And as Vivian Hoa suggesting, like we've heard from a 444 00:25:24,280 --> 00:25:26,280 Speaker 1: lot of people, it's just too early to to kind 445 00:25:26,280 --> 00:25:28,520 Speaker 1: of figure out how this will play out in the US. 446 00:25:28,600 --> 00:25:31,199 Speaker 1: But again, I think it would be foolish probably, you 447 00:25:31,200 --> 00:25:32,560 Speaker 1: know what we're hearing from a lot of people. Would 448 00:25:32,560 --> 00:25:34,720 Speaker 1: would be foolish to think that it won't come to 449 00:25:34,720 --> 00:25:36,320 Speaker 1: the US and it won't be an issue. So now 450 00:25:36,320 --> 00:25:38,359 Speaker 1: it seems to be a question of how prepared is 451 00:25:38,400 --> 00:25:40,280 Speaker 1: the U. S Thanks for listening to the Bloomberg P 452 00:25:40,359 --> 00:25:42,920 Speaker 1: and L podcast. You can subscribe and listen to interviews 453 00:25:42,920 --> 00:25:46,719 Speaker 1: at Apple Podcasts or whatever podcast platform you prefer. Paul Sweeney, 454 00:25:46,800 --> 00:25:49,560 Speaker 1: I'm on Twitter at pt Sweeney. I'm Lisa Abram Woyds. 455 00:25:49,560 --> 00:25:52,600 Speaker 1: I'm on Twitter at Lisa Abram Woyds. One. Before the podcast, 456 00:25:52,600 --> 00:25:55,200 Speaker 1: you can always catch us worldwide on Bloomberg Radio.