WEBVTT - Banks Beating Expectations but Higher for Longer Looms 0:00:01.360 --> 0:00:05.680 This is Bloomberg Business Wait inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.680 global business, finance and tech news. The Bloomberg Business Week 0:00:13.720 --> 0:00:18.600 Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:20.560 --> 0:00:25.360 Jinny's talking about Vava's Brian moynihan profit topping estimates on 0:00:25.400 --> 0:00:28.120 trading net interest income that he had Goldman Tim profit 0:00:28.200 --> 0:00:32.000 slumping thirty three percent, the company CEO David Salin pleading patients. 0:00:32.040 --> 0:00:33.120 We know, we talked. 0:00:32.840 --> 0:00:35.920 About it with Shri yesterday. Sweat Arajan just some of 0:00:35.960 --> 0:00:38.000 the changes that that company is undergoing. 0:00:38.080 --> 0:00:40.080 Well, let's get to our big bank round up with 0:00:40.200 --> 0:00:42.320 us on the highlights and low lights of today's reporting. 0:00:42.320 --> 0:00:44.839 We got Bloomberg News America's finance team leader in our 0:00:44.840 --> 0:00:48.280 Bloomberg Interactive Brokers studio, Sally Bakewell with us. Also with 0:00:48.360 --> 0:00:52.239 us as Cheryl Angelo, Capital senior portfolio manager involved in 0:00:52.280 --> 0:00:56.960 managing several financial strategies, joins us on zoom in Atlanta. Sally, 0:00:57.000 --> 0:00:58.800 give us your big takeaways. Where do you want to start? 0:00:59.440 --> 0:00:59.520 So? 0:00:59.560 --> 0:01:01.200 I think, yeah, the Bank of America had a pretty 0:01:01.240 --> 0:01:04.720 good quarter by many metrics. Overall profit and net interest 0:01:04.720 --> 0:01:08.160 income topped estimates. It did better than expected in investment banking, 0:01:08.200 --> 0:01:10.520 you know, despite the persistent deal slump, and it did 0:01:10.560 --> 0:01:13.399 way better by a long way in trading because the 0:01:13.440 --> 0:01:15.520 bank has actually, you know, spent a lot of time 0:01:15.880 --> 0:01:19.120 in investment, in expanding its balance sheet and taking on 0:01:19.160 --> 0:01:22.560 more clients in its trading business. But Goldman it was 0:01:22.560 --> 0:01:25.279 a bit of a different kettle of fish. Profit fell, 0:01:25.440 --> 0:01:28.240 it was hit by another quarter of real estate write offs, 0:01:28.680 --> 0:01:31.639 and of course it was impacted by sluggish investment banking, 0:01:31.680 --> 0:01:35.080 even though trading was better than expected. What was interesting 0:01:35.120 --> 0:01:37.960 is both banks sort of steered clear of you know, 0:01:38.080 --> 0:01:42.280 making very decisive comments about when investment banking might bounce back, 0:01:42.959 --> 0:01:46.440 which they have done in previous quarters, perhaps indicating that 0:01:46.680 --> 0:01:49.360 those green shoots in investment banking they had long talked 0:01:49.360 --> 0:01:51.720 about and might be pushed sort of further back on. 0:01:51.720 --> 0:01:54.720 The Hurican Stock's not going to come out and save 0:01:54.800 --> 0:01:56.320 investment banking, probably not. 0:01:56.960 --> 0:02:00.440 Even though they should do, given you know, the wonderful 0:02:00.440 --> 0:02:04.560 sandals that I own. But yeah, I think with the 0:02:04.600 --> 0:02:08.200 geopolitical concerns, and we know Jamie Diamond referenced those on Friday. 0:02:08.240 --> 0:02:10.880 He said it is. You know, this is one of 0:02:10.919 --> 0:02:13.560 the most dangerous times in history. So I think that's 0:02:13.600 --> 0:02:16.079 a big cloud over the investment banking. 0:02:15.960 --> 0:02:18.079 As we and we know Golvin Saxton about one point 0:02:18.120 --> 0:02:19.760 seven percent b of actually up about two and a 0:02:19.840 --> 0:02:22.519 quarter percent. I want to bring in Cheryl Page. She's 0:02:22.560 --> 0:02:26.000 angel O Capital senior portfolio manager involved in the managing 0:02:26.000 --> 0:02:28.320 of several financial strategies at the firm. She's on Zoom 0:02:28.320 --> 0:02:32.359 in Atlanta. So Cheryl, come on in. You know, it's 0:02:32.400 --> 0:02:35.640 interesting and I'm just curious. As Sally went through the 0:02:35.639 --> 0:02:38.480 two big banks that reported today, we've heard from a 0:02:38.480 --> 0:02:40.680 lot of the big banks, certainly last week as well. 0:02:41.040 --> 0:02:43.680 Is there anything that you've been hearing that's actionable for 0:02:43.800 --> 0:02:45.040 you in terms of investing. 0:02:46.560 --> 0:02:46.800 Yeah. 0:02:46.960 --> 0:02:49.920 I think what we've seen thus far this earning season 0:02:50.040 --> 0:02:55.320 has been outperformance relative to expectations, and I think across 0:02:55.360 --> 0:02:59.240 the board we're seeing beats on ANII and better than 0:02:59.280 --> 0:03:02.440 expected credit quality, which really have been the two points 0:03:02.440 --> 0:03:06.519 of concern as we look at bank fundamentals where to 0:03:06.600 --> 0:03:10.919 deposit betas go from here? They typically don't. They typically 0:03:10.919 --> 0:03:13.680 continue to rise until a couple quarters past the last 0:03:13.760 --> 0:03:17.480 rate hike, and credit quality has been something we've been 0:03:17.480 --> 0:03:21.399 expecting to normalize for quite some time, so we're encouraged 0:03:21.400 --> 0:03:26.440 with results. We're seeing less normalization less quickly than we 0:03:26.440 --> 0:03:29.880 would have anticipated, and a lot of levers that banks 0:03:29.880 --> 0:03:33.000 are able to pull in terms of continuing to drive 0:03:33.120 --> 0:03:36.880 higher ANII than expected. So what we really take away 0:03:36.880 --> 0:03:41.000 from this, I think is the business models that work 0:03:41.080 --> 0:03:44.480 probably best in this environment tend to skew towards the 0:03:44.600 --> 0:03:46.960 large cap banks where we have a bit of a 0:03:47.040 --> 0:03:51.280 balance between a really strong consumer still and then on 0:03:51.320 --> 0:03:54.400 the smaller side of the spectrum, where community banks may 0:03:54.440 --> 0:03:57.000 be the only bank in town and continue to benefit 0:03:57.160 --> 0:04:01.200 from deposit flow stabilization. So we sort of like a 0:04:01.200 --> 0:04:05.400 Barbelle approach here, and we would be most concerned at 0:04:05.400 --> 0:04:07.760 the margin at some of the regional banks that ski 0:04:07.920 --> 0:04:12.000 relatively higher on commercial real estate and office cre in particular. 0:04:12.320 --> 0:04:14.880 What about Sheryl investment banking? When do you see investment 0:04:14.920 --> 0:04:16.000 banking bouncing back? 0:04:17.640 --> 0:04:20.960 I think that is a difficult one. It clearly we 0:04:21.040 --> 0:04:26.000 have seen better results than anticipated, but still down pretty 0:04:26.000 --> 0:04:29.360 heavily year over year, and it's difficult to see when 0:04:29.400 --> 0:04:32.040 that turn may happen. But one of the things that 0:04:32.080 --> 0:04:34.839 we do expect will start to accelerate as we move 0:04:34.839 --> 0:04:38.600 into twenty twenty four. Is M and A and particularly 0:04:38.640 --> 0:04:41.159 in the banking sector. I think there's a lot of 0:04:41.200 --> 0:04:44.600 focus that will be put on expense reduction, and M 0:04:44.680 --> 0:04:47.680 and A is a way to achieve that, particularly in 0:04:47.720 --> 0:04:51.159 the banking sector, and that could drive some higher investment 0:04:51.200 --> 0:04:55.559 banking fees as we move into calendar twenty twenty four. 0:04:56.040 --> 0:04:58.160 Sal you want to come back into in terms of 0:04:58.200 --> 0:05:00.000 we got you know, obviously we heard from JP Moore 0:05:00.080 --> 0:05:04.279 again and City last week. We've really been kind of 0:05:04.279 --> 0:05:06.440 waiting to hear from these guys to see what they 0:05:06.480 --> 0:05:08.479 have to say and women about what they have to 0:05:08.520 --> 0:05:11.080 say about the health of the banking sector. Is there 0:05:11.160 --> 0:05:13.320 kind of a theme, a trend line. I know they're 0:05:13.360 --> 0:05:14.480 not all apples to apples. 0:05:14.800 --> 0:05:17.440 Yeah, I think the trend line the theme is that 0:05:18.200 --> 0:05:22.599 so JP Morgan and City they did see charge offs increase, 0:05:23.520 --> 0:05:27.320 but they are still low compared to historic levels. And 0:05:27.400 --> 0:05:29.320 as we heard from Bank of America, it was a 0:05:29.320 --> 0:05:33.120 similar thing today. Charge offs ticked up, but as we 0:05:33.160 --> 0:05:36.800 heard from Brian moynihan, the consumer remains healthy, although spending 0:05:36.839 --> 0:05:40.520 is starting to slow. So again it's a sort of 0:05:40.800 --> 0:05:46.040 ominous cloud that things are starting to deteriorate a little bit, 0:05:46.080 --> 0:05:49.800 but they're not quite reaching kind of pre pandemic levels yet. 0:05:50.279 --> 0:05:53.320 When you say not quite reaching pre pandemic levels, would 0:05:53.360 --> 0:05:55.440 that be a good thing because it's a normalization or 0:05:55.440 --> 0:05:56.520 would that be frowned upon? 0:05:57.440 --> 0:06:01.680 I think it would probably be. Well, then there probably 0:06:01.720 --> 0:06:04.680 be a good thing in the sense that they'd be 0:06:04.760 --> 0:06:07.560 coming back to sort of a no one wants sort 0:06:07.560 --> 0:06:10.599 of credit charge offs or right downs. But I think 0:06:10.640 --> 0:06:13.640 if they're you know, if they're bouncing off historic lows, 0:06:13.640 --> 0:06:15.039 it's less a thing to worry about. 0:06:15.760 --> 0:06:17.760 No, and yeah, that makes a lot of sense, right, 0:06:17.760 --> 0:06:19.240 but it is right we try to figure out kind 0:06:19.240 --> 0:06:22.240 of what's normal coming off the pandemic and then in 0:06:22.279 --> 0:06:25.240 comparison to where we were pre pandemic. Cheryl, I asked 0:06:25.240 --> 0:06:28.760 you about actionable Is there names and remind us of 0:06:28.760 --> 0:06:32.160 your strategy because if what I remember, it's a credit 0:06:32.279 --> 0:06:34.600 or debt play as well as an equity play. But 0:06:34.640 --> 0:06:37.880 is there is there anything actionable off of the round 0:06:37.920 --> 0:06:40.520 of earnings that we've heard from the financial space for 0:06:40.640 --> 0:06:43.520 you specifically, Yeah. 0:06:43.480 --> 0:06:46.400 And again it's still a little early in the earning season. 0:06:46.640 --> 0:06:48.599 We are encouraged by way what we've seen so far. 0:06:49.000 --> 0:06:52.240 Our strategies tend to be more credit focused and more 0:06:52.320 --> 0:06:55.880 focused on sort of that smaller end of the cohort 0:06:55.960 --> 0:06:59.800 fifty billion in below, where we do see actually quite 0:07:00.240 --> 0:07:05.039 a compelling risk reward opportunity. Given the dislocation in the 0:07:05.040 --> 0:07:08.880 banking sector that still hasn't fully recovered from the volatility 0:07:08.960 --> 0:07:13.080 back in March. We're able to source in the markets 0:07:13.080 --> 0:07:17.240 today equity like returns for fixed income investments, and so 0:07:17.280 --> 0:07:21.640 that's where we've been deploying the bulk of our dry powder, frankly, 0:07:21.840 --> 0:07:24.840 in this environment. On the bank, back of what we've 0:07:24.840 --> 0:07:28.880 seen thus far this earning season, most actionable for me, 0:07:28.960 --> 0:07:32.120 I think the ones that really are the standout banks 0:07:32.200 --> 0:07:34.600 thus far, I would I would highlight JP Morgan and 0:07:34.680 --> 0:07:38.880 Wells Fargo. JP Morgan continues to beat and raise the 0:07:38.960 --> 0:07:42.600 fourth increase this year on NII and a lot of 0:07:43.360 --> 0:07:46.600 benefit obviously from First Republic as well helping out in 0:07:46.640 --> 0:07:51.160 the results. And then on the Wells Fargo side, really 0:07:51.200 --> 0:07:53.560 a lot of excess capital and still some lovers to 0:07:53.640 --> 0:07:55.800 pull on the expense side. So I think that's where 0:07:55.800 --> 0:07:59.880 we would see the most upside thus far this recording season, surely. 0:08:00.840 --> 0:08:02.640 I think for Bank of America it's been a bit 0:08:02.680 --> 0:08:07.080 of an outlier, largely because of its unrealized bond losses, 0:08:07.960 --> 0:08:10.160 and the bank has been sort of a lot of 0:08:10.200 --> 0:08:14.240 pains to say that it will likely, it's very unlikely 0:08:14.280 --> 0:08:17.400 to need to sell sell these. They'll be held to maturity. 0:08:18.000 --> 0:08:20.640 They have plenty of liquidity. Anyway. I just wonder what's 0:08:20.720 --> 0:08:24.040 your perspective on the fact that those unrealized loss and 0:08:24.120 --> 0:08:27.480 losses did widen in the third culture and they absolutely 0:08:27.560 --> 0:08:30.960 dwarf those of you know, the biggest US bank, JP Morgan. 0:08:32.520 --> 0:08:34.880 Yeah, I think that has been the point of debate 0:08:35.000 --> 0:08:39.160 clearly on the stock and you know, given the yields 0:08:39.200 --> 0:08:43.080 and the bond portfolio has been an area of concern. 0:08:43.720 --> 0:08:46.440 I think when we look at sort of capital accretion 0:08:46.679 --> 0:08:49.760 that has taken place and the fact that the portfolio 0:08:49.800 --> 0:08:54.040 gets shorter and you see maturities coming through, there's a 0:08:54.080 --> 0:08:57.000 way to sort of earn through this. And I think 0:08:57.040 --> 0:09:00.400 that was the takeaway that I had from today, But 0:09:00.720 --> 0:09:03.840 it remains a little outsized relative to peer group. 0:09:04.160 --> 0:09:06.640 Well, a great roundup by both of you, so appreciated. 0:09:06.880 --> 0:09:10.160 Bloomberg News America's finance team leader who I guess is 0:09:10.200 --> 0:09:12.160 getting no sleep right now, Sally. 0:09:11.880 --> 0:09:13.200 Bank, Well, because. 0:09:12.920 --> 0:09:15.840 It's like not early I know, right, it's just like 0:09:15.920 --> 0:09:16.400 it's like a. 0:09:16.360 --> 0:09:18.600 Major it's quotly sleep deprivation. 0:09:19.600 --> 0:09:21.960 Here in our Bloomberg Interactive Broker Studio and our thanks 0:09:22.000 --> 0:09:24.520 again to Sheryl Pate out there on zoom in Atlanta. 0:09:24.600 --> 0:09:27.640 She's Angel Oak Capital, senior portfolio manager and as we mentioned, 0:09:28.360 --> 0:09:31.559 you know, managing several financial strategies, but she said, really 0:09:31.640 --> 0:09:33.760 involved in the credit side of things. You guys, thank 0:09:33.800 --> 0:09:35.040 you so much, really appreciate it. 0:09:35.480 --> 0:09:39.040 You're listening to the Bloomberg Business Week podcast. Catch us 0:09:39.080 --> 0:09:42.440 live weekday afternoons from three to six Eastern Listen on 0:09:42.480 --> 0:09:46.520 Bloomberg dot com, the iHeartRadio app, and the Bloomberg Business App, 0:09:46.800 --> 0:09:49.120 or watch us live on YouTube. 0:09:50.320 --> 0:09:52.720 We're about to go on a little adventure together, and 0:09:52.760 --> 0:09:53.920 that adventure. 0:09:53.520 --> 0:09:55.880 Is going to span seventeen years of music. 0:09:57.280 --> 0:10:07.200 How does that sound. 0:10:04.960 --> 0:10:05.680 All right? Everybody? 0:10:05.720 --> 0:10:09.360 Well, they Ventor is definitely underway the Errors tour, right. 0:10:10.440 --> 0:10:13.560 The concert film released just last week, breaking in more 0:10:13.559 --> 0:10:15.880 than one hundred million in advanced sales. That's expected to 0:10:15.920 --> 0:10:19.040 double within weeks. We just talked about that moments ago. 0:10:19.120 --> 0:10:22.720 We also have talked about just anything. It feels like 0:10:22.960 --> 0:10:25.079 Taylor touches Tim just turns to gold. 0:10:25.320 --> 0:10:28.600 It certainly includes the re recording of her albums, and 0:10:28.600 --> 0:10:31.160 that brings us to a story in the current screen 0:10:31.200 --> 0:10:33.720 time issue of Bloomberg Business Week. It's on newstands, it's 0:10:33.760 --> 0:10:36.600 online at Bloomberg dot com, Slash BusinessWeek, and of course 0:10:36.760 --> 0:10:39.760 always on the Bloomberg terminal. The story by Ashley Carmen. 0:10:39.960 --> 0:10:43.240 She covers podcasts the music industry creators at Bloomberg News. 0:10:43.480 --> 0:10:45.760 She's with us right now in our Bloomberg Interactive Brokers 0:10:45.760 --> 0:10:51.040 studio along with the editor of Bloomberg BusinessWeek, Joel Weber. Joel, 0:10:51.320 --> 0:10:54.080 can we talking about Taylor? Yeah? The answer to that 0:10:54.160 --> 0:10:56.280 question is always yes. I'm just waiting for the screen 0:10:56.360 --> 0:10:58.920 time Taylor's Taylor Edition? 0:11:00.080 --> 0:11:00.440 Is this right? 0:11:00.679 --> 0:11:00.880 You know? 0:11:01.360 --> 0:11:04.400 It might be a thing, you know, Look, she. 0:11:04.360 --> 0:11:06.800 Would be a great guest editor. Noel, you're a great 0:11:06.880 --> 0:11:07.800 editor of the magazine. 0:11:07.880 --> 0:11:10.120 You can get Taylor Swift to edit this magazine. I 0:11:10.120 --> 0:11:17.160 will take the week off maybe longer. What a force, right, 0:11:17.360 --> 0:11:20.320 and you know, just a little personal page out of 0:11:20.320 --> 0:11:22.720 my life. I'll be going to see this movie on Friday. 0:11:22.880 --> 0:11:23.920 Don't give away the ending. 0:11:25.760 --> 0:11:28.559 Ending she's probably a billionaire. 0:11:28.920 --> 0:11:30.120 But hold on, what's the occasion? 0:11:30.160 --> 0:11:32.120 This is great Friday night and I could get tickets 0:11:32.160 --> 0:11:33.520 like three weeks ago, and I was like, I'm better 0:11:33.559 --> 0:11:35.920 book this now. So yeah, I will do this hit 0:11:36.280 --> 0:11:38.520 there on Friday, and then I will take my son 0:11:38.559 --> 0:11:42.640 and my wife to a movie called The Aras to her. So, uh, 0:11:43.080 --> 0:11:46.440 what's incredible about this is that it just totally has 0:11:46.840 --> 0:11:50.040 taken I think pop culture and just like taking it 0:11:50.080 --> 0:11:53.600 to a whole other level. Obviously, what she's been able 0:11:53.640 --> 0:11:57.679 to do at live shows is one thing. Now she's 0:11:57.920 --> 0:12:01.560 able to do it in movie theaters. But the best part, 0:12:01.640 --> 0:12:04.680 and as Ashley wrote in our screen Time issue, is 0:12:04.840 --> 0:12:08.959 actually when you think about what she's done with albums, 0:12:08.679 --> 0:12:12.920 it actually sets up just how powerful of a force 0:12:13.679 --> 0:12:17.200 Taylor Swift actually is. So this is not a news story. 0:12:17.559 --> 0:12:19.720 But yet it's not nearly over. 0:12:19.640 --> 0:12:20.240 Yet, is it? 0:12:20.280 --> 0:12:25.800 Actually it is not over yet? Yeah, So should we 0:12:25.800 --> 0:12:27.640 maybe back up and talk a little bit about what. 0:12:27.559 --> 0:12:30.640 The situation is that, I mean, I need to start 0:12:30.640 --> 0:12:33.839 at the beginning. I actually don't know why she how 0:12:33.880 --> 0:12:36.959 Scooter Brown got hold of these these the rights to 0:12:37.000 --> 0:12:37.520 this right. 0:12:37.720 --> 0:12:40.480 So, when Taylor was an up and coming, you know, 0:12:40.800 --> 0:12:43.400 a known name, she was on a label group called 0:12:43.440 --> 0:12:46.000 Big Machine label group that was never a thing. 0:12:46.080 --> 0:12:47.120 She was always known. 0:12:48.559 --> 0:12:54.760 From the day she was born, right, exactly exactly. Eventually 0:12:54.840 --> 0:12:58.920 Big Machine sold to Scooter Bron's management company, and so 0:12:59.000 --> 0:13:03.680 when they did that, Tailer's master recordings went with that deal. 0:13:03.880 --> 0:13:07.600 And is this typical, like artists don't have control over 0:13:08.360 --> 0:13:09.600 these two versions of rights. 0:13:09.679 --> 0:13:12.600 Yeah, so okay. So the master recordings, which is the 0:13:12.720 --> 0:13:17.400 literal like recording of a song, that specific song in 0:13:17.400 --> 0:13:20.600 this case and in many cases, is owned by her 0:13:20.640 --> 0:13:24.600 former record label. What they did not own, because she 0:13:24.880 --> 0:13:27.600 was a songwriter on all of her songs, is the composition, 0:13:27.720 --> 0:13:31.000 so that is, you know, the lyrics, the notes, the melody, 0:13:31.120 --> 0:13:34.280 all of that. So that set her up when when 0:13:34.320 --> 0:13:36.719 Scooter took over her records for the first he was 0:13:36.760 --> 0:13:38.400 doing the rights of the first six albums that she 0:13:38.440 --> 0:13:41.200 put out. They have a very long history of not 0:13:41.280 --> 0:13:42.520 liking each other. It's definitely not. 0:13:42.559 --> 0:13:45.800 Worth being She was vocal about it, very vocal. 0:13:45.520 --> 0:13:50.160 About it happen exactly. She didn't trust him with these recordings, 0:13:50.679 --> 0:13:53.440 and so when that happened, she decided to kind of 0:13:54.480 --> 0:13:58.640 go with the nuclear option, which is to re record 0:13:58.840 --> 0:14:01.240 all of these albums. And she can do that because 0:14:01.240 --> 0:14:03.440 she still has the rights to this composition. And so 0:14:03.480 --> 0:14:04.160 that's why you. 0:14:04.160 --> 0:14:08.120 Know who you don't want to see go nuclearlor. 0:14:07.120 --> 0:14:11.560 Swift, Yeah and shame they didn't do well, right. 0:14:11.720 --> 0:14:11.960 Yeah. 0:14:12.040 --> 0:14:14.800 So she has been on this mission to re record 0:14:14.800 --> 0:14:17.240 these albums. She's released a few already and she's going 0:14:17.280 --> 0:14:19.240 to be releasing nineteen eighty nine. And you can tell 0:14:19.240 --> 0:14:21.440 when these are the re recorded versions because in parentheses 0:14:21.440 --> 0:14:24.040 they'll say Taylor's version that is set to come out 0:14:24.120 --> 0:14:24.840 later this month. 0:14:25.040 --> 0:14:27.840 How different? Sorry, Joel, I keep cutting it. Go ahead, Sorry, 0:14:27.880 --> 0:14:28.640 when it's Taylor. 0:14:28.800 --> 0:14:30.680 You're in charge, You're in charge. 0:14:31.280 --> 0:14:31.840 How different? 0:14:32.160 --> 0:14:33.440 I'll go scorch or later. 0:14:34.000 --> 0:14:36.680 How different? This is my last question I've thronest. How 0:14:36.720 --> 0:14:40.520 different is the Taylor's version versus a I don't want 0:14:40.520 --> 0:14:42.560 to call it Scooter Brown versions with the Big Machine 0:14:42.600 --> 0:14:43.200 version compared. 0:14:43.400 --> 0:14:46.120 I haven't just a you know, twelve year old in 0:14:46.160 --> 0:14:46.480 your house. 0:14:46.480 --> 0:14:48.200 What you wouldn't want to do is listen to the 0:14:48.280 --> 0:14:51.360 non Taylor's version if you're a swiftye, because then you're 0:14:51.480 --> 0:14:53.600 only listening to the Taylor version. 0:14:54.000 --> 0:14:56.160 That gets into why she's been I think so successful. 0:14:56.200 --> 0:14:59.120 But as far as you know, did she stick to 0:14:59.160 --> 0:15:03.280 the original recording style? Yes, Like she has really tried 0:15:03.320 --> 0:15:06.600 to basically recreate those original albums. There's been a couple 0:15:06.680 --> 0:15:10.040 tweaks here and there, a couple of lyric changes. She's released, 0:15:10.960 --> 0:15:15.920 like new bonus tracks with different artists, so she's added 0:15:15.960 --> 0:15:18.320 on but no, broadly speaking, like these are meant to 0:15:18.520 --> 0:15:21.600 replace those original albums. 0:15:21.360 --> 0:15:22.880 And she's done really well with them. 0:15:22.960 --> 0:15:29.440 Okay, Tim's beak, but this is this is where well, 0:15:29.440 --> 0:15:31.440 that gets the heart of it, right, because if you're 0:15:31.760 --> 0:15:35.840 on say Spotify, and you're gonna listen to Taylor Swift, 0:15:36.200 --> 0:15:40.960 guess what album comes out first? It's the new ones, right, 0:15:41.000 --> 0:15:45.000 So every time she releases the Taylor's version, the old 0:15:45.080 --> 0:15:49.160 version goes lower and lower and lower. And you know, 0:15:49.240 --> 0:15:51.440 the guy that she didn't want to have control, any 0:15:52.120 --> 0:15:54.880 control of anything, makes less and less money on it. 0:15:55.040 --> 0:15:58.240 Well, so actually she so Scooter no longer owns these recordings. 0:15:58.240 --> 0:16:01.240 We should say Scooter sold them to Shamrock and now 0:16:01.280 --> 0:16:05.560 they hold onto these But regardless, I mean, she wants 0:16:05.600 --> 0:16:08.560 control of her own tracks, and she has been extremely successful. 0:16:08.560 --> 0:16:09.840 I can tell you guys, A little bit of a 0:16:09.920 --> 0:16:13.600 stat here. So, as of July one of her album's Fearless, 0:16:13.680 --> 0:16:17.040 Taylor's version had earned a one point four to seven 0:16:17.160 --> 0:16:21.560 billion on demand song streams since its release. Okay, in 0:16:21.600 --> 0:16:25.240 that same amount of time the original Yeah, in the 0:16:25.280 --> 0:16:27.760 same amount of time the original albums and the non 0:16:27.840 --> 0:16:31.560 Taylor's version received six hundred and eighty point four million, 0:16:31.840 --> 0:16:36.880 so obviously still substantial, but much much smaller than what 0:16:36.960 --> 0:16:40.240 she's receiving on that new album. And then since it's 0:16:40.240 --> 0:16:44.080 November twenty twenty one release, Red Taylor's version had reached 0:16:44.160 --> 0:16:47.480 two point eighty six billion on demand streams, while the 0:16:47.560 --> 0:16:50.200 non Taylor version earned four hundred and seventy six point 0:16:50.200 --> 0:16:53.960 five millions. So people are widely choosing to listen to 0:16:53.960 --> 0:16:56.680 Taylor's version, and kind of like what Joel was talking about, 0:16:57.520 --> 0:17:01.400 in some ways, this has become almost an ethical conversation, 0:17:01.600 --> 0:17:03.960 like who are you going to support this artist who 0:17:03.960 --> 0:17:07.720 has been very public about her disputes over her rights 0:17:07.720 --> 0:17:09.439 and her ownership. Are you going to support her? Are 0:17:09.440 --> 0:17:13.639 you going to support you know, the investors who have 0:17:13.800 --> 0:17:15.240 bought this in different ways. 0:17:15.280 --> 0:17:17.000 Well, I will say my daughter, who's been a fan 0:17:17.080 --> 0:17:19.919 for a long time, but she took that evil Scooter 0:17:19.960 --> 0:17:21.840 Braun Like it's like, what, how do you even know 0:17:21.840 --> 0:17:24.320 who Scooter Braun is? And it's just interesting how she 0:17:24.880 --> 0:17:27.600 has realized, as you say, it's an ethical decision in 0:17:27.680 --> 0:17:29.120 terms of what music you choose to play. 0:17:29.240 --> 0:17:32.160 Has she written lyrics about Scooter Braun? 0:17:33.080 --> 0:17:34.840 There is speculation. 0:17:34.600 --> 0:17:38.520 History of Taylor going scorched earth on ex boyfriends, you know, 0:17:38.680 --> 0:17:41.840 like Jake Jillenhall once had a career and then became. 0:17:41.600 --> 0:17:44.520 A victor of great sound of some songs, right. 0:17:44.400 --> 0:17:46.159 Like, so so there is this history. 0:17:46.200 --> 0:17:47.880 Has she gone there? 0:17:48.000 --> 0:17:50.399 There is definitely speculation that some of the songs she 0:17:50.440 --> 0:17:53.439 has written are about Scooter. I don't know that she 0:17:53.480 --> 0:17:55.440 has ever confirmed or tonight. 0:17:55.200 --> 0:17:57.960 I don't know. I mean neither with Jake Jillenhall either. 0:17:58.000 --> 0:18:03.240 It's just it just Google that I didn't know they dated. Okay, yeah, 0:18:03.280 --> 0:18:03.760 it takes. 0:18:03.640 --> 0:18:04.640 Your role, not Scooters. 0:18:05.200 --> 0:18:05.639 I don't know. 0:18:06.240 --> 0:18:12.240 I'm no it is, but you know, we've been kind 0:18:12.240 --> 0:18:14.600 of laughing not laughing, but I feel like we talk 0:18:14.640 --> 0:18:16.960 about the financial markets and Taylor Swift comes up, like 0:18:17.000 --> 0:18:19.959 it's just whether the economic impact. You know, we were 0:18:20.000 --> 0:18:21.800 all out of screen time on the West Coast and 0:18:21.840 --> 0:18:23.760 how many conversations. 0:18:23.000 --> 0:18:24.920 People want to talk about with Taylor. 0:18:24.640 --> 0:18:28.959 Swift and Beyonce. To be fair, one thing though, that 0:18:29.040 --> 0:18:30.760 you know, in terms of what you did, like, she 0:18:30.920 --> 0:18:32.919 can do this? Can anybody else do this? And other 0:18:33.000 --> 0:18:33.800 artists have tried. 0:18:34.480 --> 0:18:37.120 Other artists have definitely tried. I'm sure we are all 0:18:37.160 --> 0:18:41.080 not familiar with Deaf Leopard's attempt to re record some 0:18:41.119 --> 0:18:43.639 of their songs over are you? 0:18:44.080 --> 0:18:44.320 I know? 0:18:46.600 --> 0:18:46.800 Check? 0:18:46.880 --> 0:18:50.280 Yeah, okay, Deaf Leopard had tried to do this. Prince 0:18:50.320 --> 0:18:52.520 has tried to do this. Other artists have tried to 0:18:52.560 --> 0:18:57.240 do this. But I would say it's interesting because Taylor's version, Yeah, 0:18:57.280 --> 0:19:01.200 they're not Taylor's version. And this is also uniquely a 0:19:01.359 --> 0:19:04.240 era of streaming. So in the past, you might have 0:19:04.280 --> 0:19:07.919 bought an album once you had it on vinyl or 0:19:08.000 --> 0:19:10.919 CD or tape, and that was your copy of the 0:19:10.960 --> 0:19:13.560 record and that's what you listen to. But now in streaming, 0:19:13.600 --> 0:19:16.199 you are constantly making a decision which one do I 0:19:16.200 --> 0:19:19.440 want to listen to? And that totally changes the economics. 0:19:20.040 --> 0:19:22.159 You know what else changes the economics Being able to 0:19:22.320 --> 0:19:24.880 sell out stadiums for one thousand dollars a ticket. 0:19:24.640 --> 0:19:28.600 You know, take your family to a tailors. Yeah, okay, 0:19:28.600 --> 0:19:29.640 well a movie. 0:19:29.640 --> 0:19:34.160 I was able to buy three tickets for like thirty 0:19:34.560 --> 0:19:37.359 less than thirty bucks each, twenty bucks. 0:19:37.080 --> 0:19:39.360 Each instead of three thousand dollars, So. 0:19:39.320 --> 0:19:41.080 Let me do that math for you. And I was like, 0:19:41.119 --> 0:19:43.480 that'll be Friday at a movie theater is good enough 0:19:43.480 --> 0:19:48.000 for the Weber household. But the other thing that that 0:19:48.080 --> 0:19:51.280 speaks to, though, is like, if you're an artist, now 0:19:51.960 --> 0:19:55.240 you do those live shows and that is where the 0:19:55.280 --> 0:19:58.240 money is, right, But for Taylor, it's like all of 0:19:58.280 --> 0:20:01.160 these other things are also money is because. 0:20:00.840 --> 0:20:02.400 She's such a horse, right right. 0:20:02.480 --> 0:20:04.280 She is the other thing I love about Taylor, which 0:20:04.280 --> 0:20:06.200 is my last tangent. 0:20:07.840 --> 0:20:10.879 My name is Joe Weather Weber, and I love Taylor sweaters. 0:20:12.480 --> 0:20:16.600 I'm forced to listen to a lot of But she 0:20:16.760 --> 0:20:17.560 turns her. 0:20:17.480 --> 0:20:22.520 Vulnerabilities into the magic that dreads your business that actually 0:20:22.560 --> 0:20:24.800 speaks to exactly what we're talking about with the Taylor's version. 0:20:24.880 --> 0:20:27.160 It's like somebody tried to pull a fast one on her. 0:20:28.000 --> 0:20:29.879