Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene Jay Ley.
Speaker 1: We bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot Com, and of course, on the Bloomberg Michael
Speaker 1: Wilson joins us right now. Mike Wilson, us equity strategist
Speaker 1: at Morgan Stanley. Do you share your colleagues discontent this
Speaker 1: about the equity markets? Well, good morningtime, morning, all the like.
Speaker 1: The discontent in the economy may not necessarily mean discontent
Speaker 1: in the markets. I mean, as you know, markets trade
Speaker 1: differently from the economy, and look, we are looking at
Speaker 1: a slowdown for sure, as the case counts rise, potential
Speaker 1: lockdowns and all that good stuff. Look, there's a there's
Speaker 1: a while. The SMP five hundred is basically flat since
Speaker 1: early September. There's a raging bowl market going on under
Speaker 1: the surface. This is the point we've been really trying
Speaker 1: to emphasize that as the if we look forward to
Speaker 1: next year, there's still a lot of undervalued assets within
Speaker 1: the equity market that hadn't hadn't participated yet, and that's
Speaker 1: what that's the big story that's really going on in
Speaker 1: the equity market. Is it absolutely relative? Do you unload
Speaker 1: your tech to go over to material cyclicals, banks and
Speaker 1: the rest or do they participate as well? Well, we
Speaker 1: did that. I mean that that that was the strategy.
Speaker 1: I mean, you guys are talking about, you know, stepping
Speaker 1: into the fray back in March being difficult. I think
Speaker 1: it was even more difficult to kind of move away
Speaker 1: from the former leaders to the laggards, right that. That's
Speaker 1: that's that's real career risk for hunted people. And I
Speaker 1: think folks have fought that as long as they can,
Speaker 1: and now it's becoming apparent that they need to consider
Speaker 1: that move. And that's what that's what the last three
Speaker 1: weeks is really all about. The combination of an election
Speaker 1: result plus the vaccine news is now forcing people to
Speaker 1: consider the possibility that this leadership change is not temporary,
Speaker 1: that it's actually more sustainable, and positions and portfolios are
Speaker 1: just not ready for that capitulation. We've got two time
Speaker 1: frames here, Mike, you and I've talked about him so
Speaker 1: many times, the net um and the medium term as well.
Speaker 1: You've had this trading range that you've developed and it's
Speaker 1: evolved slightly as the year has progressed. Mike, can you
Speaker 1: walk us through that range right now? And why you
Speaker 1: think we might be in protest at the lower rent
Speaker 1: of that range? Yeah, I mean, trying to call you know,
Speaker 1: corrections in a bull market is sometimes a fools game,
Speaker 1: but sometimes it makes sense. So obviously, as you know,
Speaker 1: we were extremely bullish from March through basically August, and
Speaker 1: we we then thought the market would go through some
Speaker 1: consolidation and we throughout this range of fifty which was
Speaker 1: technically driven now that worked really really well from you know,
Speaker 1: basically August through the end of October. We made a
Speaker 1: trading by call at the low end of that range
Speaker 1: right before the election that worked out really well. And
Speaker 1: now we're up at the upper end of that band again.
Speaker 1: Actually through it, we're at thirty thirty five. So you know,
Speaker 1: we're just we're gonna be objective about this. We're not
Speaker 1: gonna get dogmatic about some training range. But look, at
Speaker 1: the end of the day, John, five, you've baked in
Speaker 1: pretty much as much upset as you can legitimately, uh,
Speaker 1: you know, sort of confirmed with fundamentals. Okay, the technicals
Speaker 1: are one thing, but but also on a fundamental basis,
Speaker 1: it's hard for us to stretch it much beyond that
Speaker 1: you have liquidity, you know, maybe surging in the market
Speaker 1: that's taking things higher. But our job is to tell
Speaker 1: our clients when the risk reward is attractive, and right
Speaker 1: now the risk reward is much less attractive than the
Speaker 1: west three weeks ago. It doesn't change our view about
Speaker 1: the bowl market extending into next year. And and once
Speaker 1: again the main message we want to leave with clients
Speaker 1: is don't focus so much on the index. Let's find
Speaker 1: the opportunities that are clearly in a bowl market. And
Speaker 1: as you were talking earlier in the show, I mean
Speaker 1: the Russell two thousands of this month and it's just
Speaker 1: starting to have relative outperformance. That's Those are the types
Speaker 1: of things that we want to focus on for clients.
Speaker 1: Some notes that I was reading research notes after Jannet
Speaker 1: Yellowin was nominated to be the next Sury secretary said
Speaker 1: this would turbo charge the euphoria for a longer period
Speaker 1: of time because the idea of a Treasury working more
Speaker 1: closely with the Federal Reserve willing to run the economy
Speaker 1: hot is good for inflation. Isn't only going to fuel
Speaker 1: the trades that you're talking about, Russell two thousand Financials.
Speaker 1: Do you agree that Janet Yellen at the Treasury is,
Speaker 1: if not a game changer, at least really adds momentum
Speaker 1: to what we're seeing in the market. Well. Absolutely. I
Speaker 1: mean that one of our themes this year has been
Speaker 1: that we're moving out of a what I would call
Speaker 1: monetary policy dominant regime to a fiscal policy dominant regime.
Speaker 1: In fact, Jenny Ellen and Ben Bernanke as well as
Speaker 1: been writing op eds for the last six months of
Speaker 1: imploring Congress to do more fiscal j Paul Is also
Speaker 1: signaled that in every press conference, and so the Fed
Speaker 1: is almost been imploring, you know, the government to say, look,
Speaker 1: we need your help this time. We need to get
Speaker 1: more fiscal cooperation, to use the chief money to finally
Speaker 1: pull us out of this sort of low gro environment.
Speaker 1: And putting Jenny Yellen as U S Treasury Secretary can
Speaker 1: only help uh that effort in my view, because you know,
Speaker 1: it does come down to a negotiation with Congress. And
Speaker 1: obviously Jenny Ellen has tremendous street credibility, and you know,
Speaker 1: we know who she is. She's and she also has
Speaker 1: a pension for some of these programs that are more
Speaker 1: favorable to the lower income cohort, which is exactly what
Speaker 1: has been working this year, right getting money to the
Speaker 1: folks who need it and who will spend it. Mike
Speaker 1: Wilson International Investment. Now what your inning are we in?
Speaker 1: Is it just beginning or has it been a nice
Speaker 1: pop and that's it? Well, this is another one that
Speaker 1: you know, sort of has been a bit of a
Speaker 1: widow maker for the last you know, six or seven years,
Speaker 1: in the sense that every time it tries to make
Speaker 1: a move, it just gives up. It's like the value
Speaker 1: versus growth phenomena. It's the same trade Tom, you know.
Speaker 1: And I think that we are at at an inflection
Speaker 1: point right now for the more cyclical parts of the
Speaker 1: market to work better because there's you know, economic growth acceleration,
Speaker 1: not just here but globally, and some of that inflationary too.
Speaker 1: So there's no doubt that those markets that we're right
Speaker 1: about our fundamental economic view, then those markets should have
Speaker 1: better performance over the course of the next twelve months.
Speaker 1: Best month ever on the stocksic Sundrid for in Europe
Speaker 1: this month unreal up around about Mike tremendous work with
Speaker 1: the team this year. Fantastic to follow some of the research.
Speaker 1: Have a wonderful thanksgiving, Sir Mike Wilson that of more
Speaker 1: Coin Stanley right now and this comes up on the
Speaker 1: economic data that we're gonna see in what John has
Speaker 1: talked about happening in the House of Commons right now
Speaker 1: with a Britain in recession that is a compare and
Speaker 1: contrast to Queen Anne three years ago. Tobias Adrian is
Speaker 1: one skill to put perspective on this with the International
Speaker 1: Monetary Fund and Director of Monetary and Capital Markets Dr
Speaker 1: Adrian out of the Massachusetts Institute of Technology, and I
Speaker 1: should say the New York Fellow Reserve, Tobias, I love
Speaker 1: your essay which links in the path forward one year,
Speaker 1: two year, let's say the path four it up to
Speaker 1: two thousand twenty three, and you link it directly in
Speaker 1: to the financial stability that the Chancellor of the Exchequer desires.
Speaker 1: Can we have it both? Can we have our Turkey
Speaker 1: and need it too? Well? Good morning, thanks for having me. Yes,
Speaker 1: Center banks, including the Bank of England, but also the
Speaker 1: Federal Reserve and the e c B have deployed extraordinary
Speaker 1: measures this year in order to fight this terrible pandemic,
Speaker 1: and that has been tremendously helpful in easing financial conditions,
Speaker 1: getting financial markets to work, allowing firms and governments to
Speaker 1: borrow from markets. So that's a very very good outcome.
Speaker 1: But of course, an intended consequence of this monitor policy
Speaker 1: easing is for risk taking to return in financial markets.
Speaker 1: And indeed we see that high risk for us can
Speaker 1: get loans, but you have to make sure that there's
Speaker 1: not excessive risk taking, do you This is really important, folks,
Speaker 1: and this goes to the blue book, the Brown Book,
Speaker 1: and in the Green Book of the International Monetary Fund.
Speaker 1: Have you guys calculated the percent of g d P
Speaker 1: that we're going to have to spend on this pandemic?
Speaker 1: Progressive and liberal economist would say it's a much higher
Speaker 1: percent of g d P. Do you have a statistic tobias, Well, yes,
Speaker 1: we have looked at the fiscal expenditures this year and
Speaker 1: there were about twelve trillion globally twelve trillion, so that's
Speaker 1: uh depending on the economies. In advanced economies, it's up
Speaker 1: to fIF of GP that has been spent in two
Speaker 1: thousand twenty alone on fiscal expenditures in order to cushion
Speaker 1: the economy from this terrible pandemic. And yet still people
Speaker 1: say that monetary policy is doing the heavy lifting tobias.
Speaker 1: So even though you do that have that incredible fiscal expansion,
Speaker 1: still it is the idea of incredibly low interest rates
Speaker 1: and bond purchases and beyond by central banks. What are
Speaker 1: the financial stability risks of this disconnect that we keep
Speaker 1: talking about With markets flying higher records even as we
Speaker 1: look at a pretty bleak winter, So for the moment,
Speaker 1: things am pretty good shape. Banks have entered this crisis
Speaker 1: with much more capital than they enter the two thousand
Speaker 1: eight crisis, and um of course markets have come back
Speaker 1: and that has been very helpful in terms of sustaining
Speaker 1: the rescovery and sustaining the economy. We worry about the
Speaker 1: next three to four years. If monetary accommodation is still needed,
Speaker 1: financial conditions remain easy, that could fuel risk taking going forward.
Speaker 1: And so it's really in the medium term that we
Speaker 1: worry that there could be some degree of excessive risk
Speaker 1: taking in some corners of the vices you pointed out.
Speaker 1: Though this was the objective of policy to divorce financial
Speaker 1: conditions from underlying fundamentals. Use the word excessive. Can you
Speaker 1: define the word excessive and who gets to the side,
Speaker 1: whether it's successive. Absolutely, it's a balance. It's a balance.
Speaker 1: So you do want lending, you do want to support
Speaker 1: the economy, but you wanted to be measured and so
Speaker 1: getting the balance right is really what is on the
Speaker 1: table here. So in all of your uh, supportive monetary
Speaker 1: policy is going to be appropriate for some time in
Speaker 1: many countries, for many years, but that has to be
Speaker 1: combined with regulatory measures that make sure that there isn't
Speaker 1: excessive risk taking in terms of risky lending or the
Speaker 1: build up of leverage. Are you thinking right the macropodential
Speaker 1: tools around the housing markets that we've seen before and
Speaker 1: for instance the UK, those kind of things deparces that
Speaker 1: way your heads at the moment. Yeah, it would cover
Speaker 1: of course the banks, the non banks, as well as
Speaker 1: the household sector and the corporate sector. So you really
Speaker 1: have to look at the economic system as a whole.
Speaker 1: To us come back saying I love to continue the
Speaker 1: conversation to Adrian that I'm as director of Monetary and
Speaker 1: Capital Markets. Your man joins out from City Group, Doctor
Speaker 1: Man out of Thanksgiving. We're supposed to take a bigger
Speaker 1: broader view with you. Somebody mentioned there are another major
Speaker 1: bank looking for zero, looking for slow down, looking for recession.
Speaker 1: Can you be so grim as to tell us we're
Speaker 1: gonna begin to an approach in nb ER recession. Well,
Speaker 1: of course, the n b E R recession is the
Speaker 1: two consecutive quarters of negative growth. That's the official word. Um,
Speaker 1: I don't think we're going to be looking at that.
Speaker 1: That doesn't imply that we aren't going to be looking
Speaker 1: at a very difficult situation for a lot of people
Speaker 1: in the market. I think that you have said that
Speaker 1: you've you have this to to to uh stage recovery.
Speaker 1: One is manufacturing doing quite well. Um, you know, having
Speaker 1: a trade deficit and endurable and turable aplodes or capital
Speaker 1: goods is actually a good sign for business investment going forward.
Speaker 1: But of course, the labor market, the weakness, the continued
Speaker 1: weakness of the labor market is something that is going
Speaker 1: to drag the whole economy down. So you know, you've
Speaker 1: got two speeds. One is extremely slow actually in reverse,
Speaker 1: I mean that's what the initial claims is telling us.
Speaker 1: That's in reverse, that the capital goods trade deficit is
Speaker 1: actually positive, um, but that's going to keep us from
Speaker 1: being in um uh, you know, an official recession, but
Speaker 1: it's going to be very grim. I think we can't.
Speaker 1: Can you give us the nits medium term outlook than
Speaker 1: a city for you guys right now, just your base
Speaker 1: case and terms of the outlook. The contrast between the
Speaker 1: two well, as I say, i've you know, sort of
Speaker 1: outlined the fact that the continuing claims UM and the
Speaker 1: initial claims are pointing to a very difficult period of
Speaker 1: time over the next you know, a few months, possibly
Speaker 1: into the second quarter of next year. UM Our official
Speaker 1: forecast is that the US economy will have returned to
Speaker 1: the pre COVID level of GDP in Q two of
Speaker 1: next year. But I think that that has to be
Speaker 1: um considered in light of you know, this this burgeon
Speaker 1: in cases caseload in around around the country that's clearly
Speaker 1: going to weigh on that on that forecast, Katherine, we
Speaker 1: keep talking about how markets are ignoring the near term
Speaker 1: looking to a brighter period of time with a vaccine
Speaker 1: and traveling and more jobs, and the question that we
Speaker 1: keep coming back to on surveillance every morning is what
Speaker 1: is the damage, the longer term damage being done by
Speaker 1: the virus that is spreading at an exponential rate, and
Speaker 1: we're seeing that that's affecting the employment picture dramatically, with
Speaker 1: worse than expected uh jobless claims coming in. What is
Speaker 1: the scarring? How do you measure that? Well, there's you know,
Speaker 1: there are different ways of measuring it in the in
Speaker 1: the labor market data, but um, you know, the different
Speaker 1: US and so forth. But I really think that it's
Speaker 1: it's it's the labor market. It is um the small
Speaker 1: businesses that are disappearing, and it will take time to
Speaker 1: bring that back. But I also think that there are
Speaker 1: some other potential changes in the way the economy works
Speaker 1: that is a consequence of this divergence between what's happening
Speaker 1: to to companies um, sort of in terms of the
Speaker 1: real side, and what's happening to companies in terms of
Speaker 1: the financial side. So one of the things that we
Speaker 1: are seeing is that the companies that are flush have
Speaker 1: done well are buying their competitors, so that you know,
Speaker 1: M and A. So we're seeing more M and A.
Speaker 1: We're kind of we're looking at more of that coming
Speaker 1: forward over the next six months anyway, and so when
Speaker 1: we come out the other side, the structure of the
Speaker 1: economy looks very different, or potentially quite different with more concentration. UM.
Speaker 1: That of course is not good for labor market people
Speaker 1: in the labor market being able to get their wages
Speaker 1: and that sort of thing once they get employed. UM.
Speaker 1: And so consolidation is great for markets, it's great for
Speaker 1: stock prices, but it is really bad for both UM
Speaker 1: innovation and for workers. So longer term, the type of
Speaker 1: m and A concentration that we might end up with
Speaker 1: six months from now is not something that we're happy
Speaker 1: about in the longer term. Captain Man, a fancy question
Speaker 1: here on foreign exchange and your excellence at international economics.
Speaker 1: What happens is you end up having dollar dynamics which
Speaker 1: harm countries. They complain, and you get an abrupt reversal
Speaker 1: as well with a week dollar. I guess their currencies
Speaker 1: get stronger. We had one house today go to a
Speaker 1: yen nine, which is a shockingly strong yen. Is that
Speaker 1: what's in store for us next year are strong currencies?
Speaker 1: Where other nations scream at President Biden, you know, I
Speaker 1: think that, UM, there's a general view in the market
Speaker 1: that dollar depreciation is UH is sort of in the
Speaker 1: cards baked in almost UM. But I think we have
Speaker 1: to look at a lot of variation in how economies
Speaker 1: are going to be performing over the next year. We
Speaker 1: do see a lot of differences in UM potential improvement
Speaker 1: in the economies over the course of the year based
Speaker 1: on policy differences, based on virus vaccine acceptance differences. So
Speaker 1: I think it's it's UH. I think it's premature to
Speaker 1: say that, you know, we're looking at a claus a
Speaker 1: louver situation where UM, the dollar gets too weak and
Speaker 1: then everybody has to go in and try to reverse course.
Speaker 1: I think there's a lot more choppy waters, and it
Speaker 1: depends on whether you're looking at Latin America, are looking
Speaker 1: at Asia in terms of emerging markets UM, and even
Speaker 1: differences between Europe and Japan against the against the dollar.
Speaker 1: I think we've got a lot of different factors at play.
Speaker 1: Getting somebody action to the data dump of the last
Speaker 1: eleven minutes. Kathy Jones, a good friend of this program
Speaker 1: of Charles Swab playing against saying jobless claims up to
Speaker 1: seven seventy eight not a good sign, but jurable goods,
Speaker 1: artist rights more than expected. Same old story manufacturing good,
Speaker 1: but job market not so good. And Katherine, you touched
Speaker 1: on this a little bit earlier, your thoughts on how
Speaker 1: long that kind of dynamic can persist these two different
Speaker 1: economies that seem to be persisting at the moment, at
Speaker 1: least not just in the United States, but in Europe
Speaker 1: too well. Manufacturing is really being supported by UM both
Speaker 1: the policies that were put into place to replace worker
Speaker 1: incomes at a time when they couldn't spend it on
Speaker 1: anything else. So that's why we're seeing manufacturing goods looking
Speaker 1: so good, retail sales are looking so good, or well,
Speaker 1: we're good looking so good in terms of in terms
Speaker 1: of the bounce off the bottom UM and and then
Speaker 1: the fur allowing schemes in Europe. These are all sort
Speaker 1: of designed to replace worker incomes, but of course they
Speaker 1: have limited things to spend it on, and retail sales
Speaker 1: is one of the ways they're spending it durable goods,
Speaker 1: So there's that UM. Then of course there's the replacing
Speaker 1: the inventories associated with the lockdown periods. Both of those,
Speaker 1: at least in the United States are coming to an end,
Speaker 1: especially the support programs designed to support people's income without
Speaker 1: any kind of kind of move towards a either replacement
Speaker 1: of those incomes or move towards another strategy of spending
Speaker 1: tax changes and regulatory changes that are going to promote
Speaker 1: business investment to promote employment. Um then then we do
Speaker 1: have this situation where ultimately the lack of consumption, as
Speaker 1: Michael Vickey mentioned earlier, the lack of consumption is going
Speaker 1: to drag down the business side as well. So you
Speaker 1: can't go out too far on the limb with manufacturing
Speaker 1: doing well and employment doing poorly. Ultimately, you know, you
Speaker 1: fall off cancer and always wonderful to get your perspective
Speaker 1: cancer man that a city group. Thank you for this
Speaker 1: Wednesday before Thanksgiving, a time normally of immense travel. I
Speaker 1: call it the fourth Wednesday of November. It's just simple.
Speaker 1: The college kids come home, there's all the things we've
Speaker 1: done over the years, and then there's a pandemic. It
Speaker 1: has hit no one harder than the hospitality industry and
Speaker 1: particularly how we transport in our business and hospitality, and
Speaker 1: that would be travel. So it would be good not
Speaker 1: to speak to a CEO talking their book and boy
Speaker 1: we've done a great job on that. Thank you, guy
Speaker 1: Johnson for leading that coverage at worldwide. But how about
Speaker 1: talking to somebody who's single handedly changed how we traveled.
Speaker 1: His name is Brian Kelly. He's never gotten the credit
Speaker 1: from a straight business community about what the Points guy
Speaker 1: has done. It was a website, it was a joke.
Speaker 1: Everybody laughed at him until they realized JP Morgan was
Speaker 1: listening and Mr Diamond was taking notes when Brian Kelly
Speaker 1: opened his mouth. Brian, you were unprepared for this. What
Speaker 1: are your thoughts into two thousand tw one? Well, Tom,
Speaker 1: just first off, thanks for giving me that intro instead
Speaker 1: of just saying I'm an influencer. And next I'm kidding. No.
Speaker 1: This year has been absolutely wild for for consumers traveling um.
Speaker 1: But I do see hope on the horizon, you know,
Speaker 1: just in talking to our millions of readers and looking
Speaker 1: on social media, I do feel this bubble of revenge
Speaker 1: travel that's that's gonna come up, I think. In so,
Speaker 1: I do see good things on the horizon when we
Speaker 1: look at things like quantas setting up rules. Do you
Speaker 1: feel your world will be the rule makers that force
Speaker 1: use of vaccination? You know, I traveled to Ghana quite
Speaker 1: a bit and I have to show my yellow fever vaccination.
Speaker 1: So yeah, I wouldn't be surprised if countries you know
Speaker 1: this virus. It's crazy how quickly it can spread once
Speaker 1: you think you get it under control. All it takes
Speaker 1: is a couple of quick mistakes and it can spread
Speaker 1: like wildfire. So yeah, I do see more countries putting
Speaker 1: in a virus passport, you know, once these billions of
Speaker 1: doses are out there and we can actually track who
Speaker 1: got it. Bryan, I hope that I can join the
Speaker 1: wave of revenge travel. I think a lot of people
Speaker 1: are looking forward to get back, getting back on planes
Speaker 1: and seeing the world. I am wondering, though, if it's
Speaker 1: going to be more expensive. The hospitality industry, as Tom
Speaker 1: was saying, has gotten hit very hard. How willing do
Speaker 1: you think, based anecdotally on what you've seen so far,
Speaker 1: will they be to continue some of these points and
Speaker 1: loyalty programs when they need cash they need the money. Well,
Speaker 1: it's funny because these points and loyalty programs bring in
Speaker 1: billions of dollars in upfront cash. You know, we saw
Speaker 1: Hilton and Marryott sell billions this year for future use
Speaker 1: to the credit card companies. So you know, the loyalty
Speaker 1: programs need people to use those points. So we've been
Speaker 1: seeing incredible promotions. Even this Black Friday, Virgin Atlantic is
Speaker 1: selling their miles at a half off. You can fly
Speaker 1: New York or l A to London for basically a thousand,
Speaker 1: undred dollars when you back during these promotions. So it's
Speaker 1: a great time for con sumers. And I don't foresee
Speaker 1: you know, prices going up for a long time because simply,
Speaker 1: you know, supply and demand, and there's still so many
Speaker 1: people sitting it out until they can get a vaccine,
Speaker 1: which may not be till the end of next year.
Speaker 1: So it's a good time for deals, all right. But
Speaker 1: but something's got to give, Brian, right, I mean, we're
Speaker 1: looking at a market that's been decimated. If you look
Speaker 1: at the losses in the airline industry that's projected that
Speaker 1: we're projected in this week billions and billions of dollars.
Speaker 1: How are they going to recoup that? And if they don't,
Speaker 1: does that mean no soda charging for your luggage? I mean,
Speaker 1: I'm just talking about the practical implications of the quality
Speaker 1: of life aspects of these hospitality industries. Well, it's funny
Speaker 1: because the airlines have actually made it better for consumers
Speaker 1: in waving most change fees. You can now book the
Speaker 1: cheapest flight and change it for free. They say that's
Speaker 1: going to be forever, but I agree with you something
Speaker 1: a shoe is going to drop at some point. But
Speaker 1: the way they're doing that is by managing capacity, by
Speaker 1: you know, retiring old and efficient jets. You know, their
Speaker 1: real industry has been right size. Um. But I don't
Speaker 1: first see any punitive changes to consumers anytime soon, even Brian.
Speaker 1: We talked to k l M CEO this week and
Speaker 1: he that k l M and Air France are talking
Speaker 1: to the Dutch government about a bailout. And there's a
Speaker 1: dance in the United States Southwest Air making headlines in
Speaker 1: the last twenty four hours. From where you sit, Brian Kelly,
Speaker 1: do you just assume that we're going to see more
Speaker 1: government aid to the industry to get them to the
Speaker 1: other side of the points, Guy Bridge, I don't see it.
Speaker 1: You know, we saw Norwegian Air got the big notes
Speaker 1: from their government. The US has since you know, not
Speaker 1: really been willing to extend, although the US CEOs are
Speaker 1: in Washington every other day begging for it. You know,
Speaker 1: I think you know, these publicly traded companies. You know,
Speaker 1: I learned a lesson that you should probably stuck up
Speaker 1: a little bit more on cash. I don't foresee another
Speaker 1: big bailout. I think they just have to right size
Speaker 1: things and so the demand returns. I mean this this summer,
Speaker 1: just because of the pandemic. Lisa was going through the Adirondacks.
Speaker 1: I don't Brian, if you know the Adirondacks are mountains
Speaker 1: north of New York City, and she was doing, yeah,
Speaker 1: canoeing and portage and all that. She's trying to use
Speaker 1: her point miles off a major bank to help her
Speaker 1: pay for the portage between the links. What is seriously,
Speaker 1: what are the bank's gonna do here? You mean you changes, Brian,
Speaker 1: What is the next step for the banks? You get
Speaker 1: two hundred thousand points? You know, it's funny you say
Speaker 1: that the banks this summer really took a break from
Speaker 1: big promotions, you know, because the credit risk was just
Speaker 1: so unknown. You know, are people gonna be defaulting left
Speaker 1: and right? It appears that's not the case, although we're
Speaker 1: not quite sure how many consumers are defaulting because people
Speaker 1: have been given so much forgiveness. But the banks came
Speaker 1: back with huge offers. This fall. We saw big sign
Speaker 1: up bonuses, and I have seen a shift towards more
Speaker 1: flexible points instead of credit cards that offer you know,
Speaker 1: airline miles. Now you know, even Chase is offering to
Speaker 1: use your points on groceries at a really rich rate.
Speaker 1: So I foresee the credit card companies allowing those points
Speaker 1: to be more flexible for use on things like merchandise.
Speaker 1: I'll tell you, Brian, through the pandemic, thanks for keeping
Speaker 1: the spirit up. It's really wonderful during a pandemic to
Speaker 1: see Mr Kelly in the mall dives and he got
Speaker 1: there for a hundred and forty two dollars and six
Speaker 1: jillion points that I'm going to Rwanda this credit course.
Speaker 1: Why did I? Why did I? Why? Am I surprised? Right?
Speaker 1: Kelly go away? The points guy traveling all the places
Speaker 1: Lisa and I Tom, I just want to make a
Speaker 1: Bloomberg surveillance correction. Okay, you cannot use your points to portage.
Speaker 1: I learned this the hard way. I tried because get
Speaker 1: the truck out and put the canoe drop of the jeep.
Speaker 1: So yeah, you need your points to portage. Thanks for
Speaker 1: listening to the Bloomberg Surveillance Podcast. Subscribe and listen to
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Speaker 1: I'm on Twitter at Tom Keane before the podcast. You
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