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Speaker 1: Welcome to the Bloomberg Panel podcast. I'm Paul swing you

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Speaker 1: along with my co host Lisa Brahmas. Each day we

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Speaker 1: bring you the most noteworthy and useful interviews for you

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Speaker 1: and your money, whether at the grocery store or the

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Speaker 1: trading floor. Find a Bloomberg penl podcast on Apple podcast

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Speaker 1: or wherever you listen to podcasts, as well as at

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Speaker 1: Bloomberg dot com. Let's bring in Max Abel, centrefinance reporter

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Speaker 1: for us here at Bloomberg, to give a sense of

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Speaker 1: what his big takeaway has been so far from the hearing.

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Speaker 1: So Max, well, look, I have to say, these executives

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Speaker 1: look confident, they look unrattled. I don't know a few

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Speaker 1: folks are watching, but it opened. The hearing is opened

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Speaker 1: with Maxine Waters trying to sort of like rabbit tat tat,

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Speaker 1: go through a lightning round, a lightning round. That's right,

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Speaker 1: it was a lightning round. She was um interrupting them.

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Speaker 1: They were sort of interrupting each other, she was plowing

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Speaker 1: through questions. I mean it was fascinating and as a

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Speaker 1: viewer and a live blogger here for the Bloomber Terminal,

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Speaker 1: I mean, honestly, it was exciting. But there has not

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Speaker 1: been um and there have not been any bombshells there.

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Speaker 1: There hasn't been anything scandalous and exciting. There hasn't even

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Speaker 1: been a moment as um shocking as when Manuchin told

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Speaker 1: Maxine Waters just in the last forty eight hours, you

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Speaker 1: know that she had to bang her gabble as as

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Speaker 1: the Treasury Secretary told her um not long ago. You know,

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Speaker 1: the reality is it's been um relatively predictable, nothing crazy.

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Speaker 1: So Max, what would be a successful day here for

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Speaker 1: these CEOs sitting in front of the Congress people, Well,

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Speaker 1: remember what this hearing is. It's it's about accountability, and

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Speaker 1: if they can leave today giving Congress a sense that

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Speaker 1: you know, these banks are manageable, they're relatively ethical, and

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Speaker 1: you know that what they're trying to do is help

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Speaker 1: the country and helps the economy rather than trying to

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Speaker 1: hurt the country and hurt the economy, which was I

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Speaker 1: think it's fair to say, is a picture that that

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Speaker 1: critics had in their mind, you know, not long ago,

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Speaker 1: in the wake of the fine into crisis, that that

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Speaker 1: counts as his success. But you know, it's also possible

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Speaker 1: that Congress members will get in somebody blows over things

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Speaker 1: like investments in guns or forced arbitration, or by the way,

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Speaker 1: a lack of diversity. What we're seeing is, you know,

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Speaker 1: seven white men standing in a row, just like in

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Speaker 1: the tobacco hearings in the nineties. I'm wondering if that's

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Speaker 1: going to come up later today. It's interesting Lloyd Blank

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Speaker 1: find the former chief executive of Goldman Sachs just tweeting out, boy,

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Speaker 1: I really missed my old job. Exclamation point, exclamation point,

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Speaker 1: exclamation point, and he was he was quoting a tweet

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Speaker 1: from the New York Post of lawmakers grilling Wall Street

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Speaker 1: big wigs over risks to the U S economy. It

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Speaker 1: does sort of highlight how being the CEO of a

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Speaker 1: major Wall Street bank is increasingly political, and it is

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Speaker 1: a political role. And it is interesting to note this

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Speaker 1: at a time when Wells Fargo is looking for another

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Speaker 1: head and you know, what is that role at this point?

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Speaker 1: I mean, can you talk a little bit about that.

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Speaker 1: Well the reason that Wells Fargo is looking for a

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Speaker 1: new chief executive officer is because the last one did

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Speaker 1: a pretty infamous job when he was hauled before Congress

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Speaker 1: not too long ago. Politics are a part of of

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Speaker 1: of Wall Street and Wall Street is a part of politics.

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Speaker 1: One thing that we've been tracking on the live blog

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Speaker 1: is that, um, even Democrats like Caroline Maloney and and

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Speaker 1: especially Republicans, some of their top donors, in some cases,

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Speaker 1: their literal top donors over their political careers are banks

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Speaker 1: or a bank lobbying group. You know, politics and finance

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Speaker 1: are really intertwined in the United States, and I think

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Speaker 1: the starkest reminder of that is that some of these

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Speaker 1: ceo s, you know, some some of the banks that

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Speaker 1: they worked for, would not be functioning companies if it

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Speaker 1: hadn't been for the bailout. Um, and now it's now,

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Speaker 1: oh my gosh, it's eleven years ago, it's more than

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Speaker 1: decade ago. So politics are it's just a crucial part

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Speaker 1: of of of what happens on Wall Street. But so far,

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Speaker 1: it feels like that, um, these executives have the upper hand.

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Speaker 1: They they sort of um, they just seem relatively calm

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Speaker 1: and comfortable. So Max, let's let's take a look at

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Speaker 1: Jamie Diamond. It seems like a lot of the questions

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Speaker 1: are going to him. He's taking in some cases the

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Speaker 1: lead here. How do you think his performance has been

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Speaker 1: so far? Well, First of all, you also have to

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Speaker 1: give a shout out to Maxine Waters performance. She opened

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Speaker 1: this by saying, I've read that you all you executives

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Speaker 1: are going to try to rely on Jamie Diamond taking

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Speaker 1: the microphone, and I'm not going to allow that. So

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Speaker 1: she she preempted Diamond was feeling the spotlight for too long,

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Speaker 1: which you know, I just have to say I thought

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Speaker 1: was fascinating. Diamond is such an important influential character on

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Speaker 1: Wall Street. I mean, first of all, all of the

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Speaker 1: executives here are essentially, you know, pups compared to Jamie Diamond.

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Speaker 1: We have you know, Solomon who took his job you know,

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Speaker 1: months ago. We have Charlie Sharf up on up on

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Speaker 1: sitting sitting a couple of seats away. Sharf was basically

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Speaker 1: Diamond's protege at JP Morgan um and then he lost

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Speaker 1: his job and and and ended up an executive elsewhere

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Speaker 1: at Wells Fargo. By the way, um My, my excellent

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Speaker 1: colleague Hannah did did a rundown of all the people

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Speaker 1: who might take over the CEO spot it Wells Fargo,

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Speaker 1: and a couple of them are people who now work

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Speaker 1: or have worked for Jamie Diamond. So he's just such

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Speaker 1: a powerful, such an influential figure. You know, he's also

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Speaker 1: just in a superficial sense, he's just also a really

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Speaker 1: magnetic guy. You know, he captures the attention of the room,

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Speaker 1: which is why I want to listeners that, well, why

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Speaker 1: is a complicated question, but I want to warrant folks that, um,

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Speaker 1: Michelle Davis and I wrote about a really interesting sort

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Speaker 1: of ecosystem of protesters who've been following Jamie Diamond around.

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Speaker 1: You know, he's magnetic not only in the sense that

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Speaker 1: he attracts um you know, fans, he's magnetic in the

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Speaker 1: sense that he also attracts critics. And we we wrote

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Speaker 1: about critics who have been falling around the United States,

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Speaker 1: which is why I think it's fair to say that

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Speaker 1: later this afternoon, it's totally possible we're going to hear

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Speaker 1: from from Chase critics. Um in in hearing itself. All right,

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Speaker 1: So let's switch gears a little bit, because this all

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Speaker 1: comes ahead of bank earnings, and that'll get kicked off

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Speaker 1: talking about Jamie Diamond, JP Morgan. It will be among

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Speaker 1: the first to report alongside Walls Fargo, and I'm just

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Speaker 1: wondering how that backdrop complicates these hearings, the fact that

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Speaker 1: banks are expected to report uh subdued numbers at best,

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Speaker 1: especially due to a lack of volumes in fixed income

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Speaker 1: trading and just in general feeling of malaise in markets

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Speaker 1: during the first quarter. How does that affect these hearings?

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Speaker 1: You know, I think that you can't take your eye

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Speaker 1: off the ball of of the big picture, which is

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Speaker 1: that the banks um are still so remarkably profitable. You know,

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Speaker 1: over the last um a few years, they've gotten, they've

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Speaker 1: gotten bigger, they've they've they've quite literally made more money

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Speaker 1: than they've ever made before. And I think that it

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Speaker 1: will be hard for Wall Street to plead um tough

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Speaker 1: times or to focus on fear um when just I

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Speaker 1: think that it would be easy for ban critics just

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Speaker 1: to point out just just a simple scale of how

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Speaker 1: big they've gotten and and how and how lucrative their

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Speaker 1: businesses have been, even if the short term outlook might

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Speaker 1: might look starker than I'd like. So, Max, where do

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Speaker 1: you think, and you've mentioned that this morning session was

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Speaker 1: relatively a tame where do you think, uh, some of

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Speaker 1: these banks CEOs could be exposed here in front of

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Speaker 1: the committee. Well, you know, one change we've seen recently,

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Speaker 1: after after Michelle Davis and I wrote wrote that story

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Speaker 1: that I mentioned about the ecosystem of skers, is that

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Speaker 1: UM JP Morgan came out and they said, you know,

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Speaker 1: actually we're no longer going to do business. We're no

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Speaker 1: longer going to fund private prisons. UM. And you know,

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Speaker 1: I have to say, as a journalist who had written

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Speaker 1: about the subject only a few months earlier, I was

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Speaker 1: really surprised. It was sort of amazing to see UM

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Speaker 1: the powerful kind of change their ways thanks to the

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Speaker 1: actions of of of relatively powerless critics that JP Morgan

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Speaker 1: made a decision that they were going to change. It

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Speaker 1: would be fascinating if private prisons come up again. It'll

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Speaker 1: be fascinating to see how much UM attention climate change

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Speaker 1: Cole uh Guns get. We saw David Solomon talk about

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Speaker 1: not funding I believe, you know, bum bumber stock. You know,

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Speaker 1: any of these things could become big, big, big attention

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Speaker 1: grabbing headlines, even even a relatively boring subject that's close

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Speaker 1: to my heart because I've been reporting on it here

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Speaker 1: at Bloomberg News. Arbitration force arbitration that came up once.

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Speaker 1: You know, it's totally possible that that will get some

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Speaker 1: more oxygen. Again, I think the question is, though you

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Speaker 1: know how how long the oxygen lasts? Just real quick here,

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Speaker 1: can you tell us the sort of nuts and bolts

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Speaker 1: of what's at stake with the arbitration issue. Yeah, honestly,

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Speaker 1: I'm strilled that you would ask so force arbutration was

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Speaker 1: basically a subject that no one really cared about only

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Speaker 1: a few years ago. Even though arbitration, which if if

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Speaker 1: listeners don't know, it's basically kind of like a parallel

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Speaker 1: shadow system. You know, it's separate from courts, it's a

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Speaker 1: privatized justice system, and it essentially was just kind of

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Speaker 1: tiny only a few decades ago, but it's it's now gigantic.

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Speaker 1: You know, if you're listening to this and you have

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Speaker 1: a job, the chances are you have also signed an

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Speaker 1: arbitration agreement that means you can't see your boss, and

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Speaker 1: certainly if you're a customer of these banks, there's also

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Speaker 1: a good chance you've also signed an arbitration agreement, which

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Speaker 1: which would mean that you won't be able to sue

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Speaker 1: these firms. And that caused a great amount of consternation

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Speaker 1: among critics um who care about both employees and consumers. Now,

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Speaker 1: the banks will say, or employers will say, arbitration is,

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Speaker 1: you know, affair system. It's cheaper. It's kind of less embarrassing,

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Speaker 1: you know, because if someone has a has a claim,

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Speaker 1: you know, it doesn't have to go into court. You

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Speaker 1: can sort of keep it, keep it relatively quiet. The

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Speaker 1: rub there is it in the ME two era. Arbitration

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Speaker 1: helps explain why you haven't seen as many harassment claims. Um,

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Speaker 1: you don't fall under the spotlight because as you might otherwise,

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Speaker 1: because they get trapped in the arbitration system. That's the

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Speaker 1: kind of thing I'll be looking forward to seeing. We'll

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Speaker 1: be looking forward to reading. Max Abelson. We're gonna have

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Speaker 1: to stop it there. Thank you so much for joining

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Speaker 1: us on short notice. We appreciate it. Max Abelson from

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Speaker 1: Bloomberg News covering all things financials. Our next guest has

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Speaker 1: a very interesting theory how we can be come better investors.

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Speaker 1: We could become better investors not by playing the cards

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Speaker 1: were dealt any harder, but by playing the other players

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Speaker 1: at the table a lot smarter. Ben Hunt, co founder,

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Speaker 1: chief investment officer of Second Foundation Partners, joins us. He's

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Speaker 1: also creator an author of Epsilon theory joins us from

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Speaker 1: reading Connecticut. Ben, thanks so much for joining us. Start

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Speaker 1: off by just giving us your theory about how we

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Speaker 1: can become better investors. You bet, Paul great, great to

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Speaker 1: be on with you and Lisa. You know what I

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Speaker 1: mean when I say that we need to play the

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Speaker 1: players rather than just play the cards. Is I think

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Speaker 1: it's really important again, whether you're playing poker or you're

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Speaker 1: playing the markets, to step back and and understand what

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Speaker 1: what are the stories that at the poker table people

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Speaker 1: are telling you with their bets and their bluffs, and

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Speaker 1: in markets? What are the stories that we are reading

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Speaker 1: in the financial media? What what? What are the what

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Speaker 1: are the drums that Wall Street is beating? And I

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Speaker 1: think if you step back and you try to look

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Speaker 1: at that, you can give you a real edge up

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Speaker 1: and understanding where markets are going and how you can

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Speaker 1: play a better game. So give us a sense of

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Speaker 1: what that means today. I mean, what is the drum

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Speaker 1: that Wall Street is beating right now? It's the narrative? Sure, sure, well,

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Speaker 1: let me start with the drums that aren't beating, because

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Speaker 1: last year this time last year, we had strong drum beating,

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Speaker 1: a strong narrative that inflation was back and rearing its head,

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Speaker 1: that there were concerns about that that coming back. And

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Speaker 1: then at the end of the spring, going into the

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Speaker 1: summer and certainly last fall, you had the the trade

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Speaker 1: war narrative that uh, you know, we're on the verge

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Speaker 1: of of of a real global economic slow down, if

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Speaker 1: not collapse, and leading to the sharp decline you saw

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Speaker 1: in risk assets last fall and then culminating in December.

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Speaker 1: But what you saw in December was a resurgence of

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Speaker 1: our old friend, the narrative that central banks are large

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Speaker 1: and in charge, the narrative that central banks have got

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Speaker 1: your back. And so far this year in tooth I

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Speaker 1: was in nineteen, that has absolutely been that dominant narrative

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Speaker 1: that whatever happens in the world right, whatever happens around Brexit,

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Speaker 1: or whatever happens with China, or whatever happens anywhere, that

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Speaker 1: the Fed, the ECB, the central banks of the world,

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Speaker 1: that they've got your back. So, Ben, what as you

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Speaker 1: take a look at the other players at the table

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Speaker 1: right now, what are you learning? What are you thinking about?

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Speaker 1: Where you I think opportunities lie? Yeah, Well, what's interesting

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Speaker 1: is that is that while the you know, the central

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Speaker 1: bank narrative. The this this this idea that that the

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Speaker 1: FED and foremost of all of them, has got your back.

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Speaker 1: You know, this isn't new, right, We've been we've been

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Speaker 1: We've seeing the promotion this narrative and the reality of it, frankly,

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Speaker 1: but but it is a lot of the narrative here,

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Speaker 1: the belief that the FED is there to to support markets.

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Speaker 1: You know, we've been seeing this for the better part

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Speaker 1: of the decade. Now. What's what's interesting to me is

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Speaker 1: is not that that narrative shows any sign of weakening,

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Speaker 1: because it's it's not, if anything, when you look at

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Speaker 1: what the White House is saying and in you know,

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Speaker 1: in terms of really trying to push the FED to

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Speaker 1: do more to stimulate right, to do more easing rather

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Speaker 1: than tightening. You know, I don't think that this, this

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Speaker 1: drum beating, whether it's from the White House or from

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Speaker 1: the Wall Street, is going to go away at all.

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Speaker 1: But I'll tell you this, I do see it changing.

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Speaker 1: And then the way I see it evolving is away

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Speaker 1: from all central banks linking arms and doing this together.

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Speaker 1: And more and more you're seeing stories in the narrative

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Speaker 1: about a competition, particularly around currencies, particularly between the US

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Speaker 1: and Europe. So practically, what does this mean in terms

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Speaker 1: of it Practically, it means that that that both the

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Speaker 1: ECB and the FED are going to take steps to

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Speaker 1: weaken their currencies. As an investor, like what should investor

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Speaker 1: to do well? For investors, it depends way what aspect

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Speaker 1: you're you're thinking about investing. So if you're looking the

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Speaker 1: fixed income market, I think you've got a real chance

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Speaker 1: here that, uh, the the inflation narrative will start to

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Speaker 1: pick up again because the U s economy is frankly strong,

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Speaker 1: and the FED is going to do more to weaken,

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Speaker 1: not to tighten. So that's if you're if you're looking

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Speaker 1: at anything that's going to be inflation sensitive, and if

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Speaker 1: you're looking at stuff that's right sensitive, especially on the

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Speaker 1: long end, you know that's that's a that's a negative

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Speaker 1: thing to happen. But if you're looking for stocks, look,

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Speaker 1: I mean both in the Europe and and and here

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Speaker 1: in the States, both central banks are going to do

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Speaker 1: more of what they've been doing, which is very supportive

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Speaker 1: for equity markets. So Ben just kind of going back

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Speaker 1: to your theory a little bit, is it, And I'm

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Speaker 1: just kind of reading through a little bit is this

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Speaker 1: kind of a a new way to kind of look

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Speaker 1: at money flows. You know, I want to go, I

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Speaker 1: want to hit more. They ain't kind of thing. Well,

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Speaker 1: it's it's it's an old idea, really, I mean the

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Speaker 1: it's it's the old idea that and this goes back to,

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Speaker 1: you know, how people played the game of markets back

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Speaker 1: in the thirties and the forties and the fifties and

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Speaker 1: the sixties. It's really looking at where is the money going?

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Speaker 1: Who are the other players on Wall Street? Including who

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Speaker 1: are the players like at the FED and the White

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Speaker 1: House and the like. And frankly, it's not looking less

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Speaker 1: at fundamentals, but realizing that in this sort of world,

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Speaker 1: the fundamentals mean less and these money flows mean a

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Speaker 1: lot more. So how do you factor in the algos,

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Speaker 1: the quantitative funds that are doing ostensibly a lot of

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Speaker 1: the trading and equities and frankly increasingly even in the

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Speaker 1: bond markets. I just have to wonder, you know, people

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Speaker 1: when there's price action that doesn't make sense or seems

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Speaker 1: you know, overly need jerk, people just said, you know, say, oh,

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Speaker 1: it's the algals. How do you how do you work

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Speaker 1: with them? Playing poker? Against you. Well, yeah, that's right.

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Speaker 1: Well I'll say two things. So, so, most most of

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Speaker 1: the algos that are out there are not what i'll

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Speaker 1: call fast twitch investors. They're they're they're barges, right, so

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Speaker 1: they can rebalance monthly, they rebalance slowly, and so there

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Speaker 1: they really are like a barge and they follow along.

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Speaker 1: I'm trying to say is that at the margins, it

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Speaker 1: actually makes the importance of discretionary investors, people who listen

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Speaker 1: to this radio show and do something, people who are

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Speaker 1: you know, managing a discretionary fund. When you when you're

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Speaker 1: when you're when you're in the river with a lot

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Speaker 1: of barges, it actually provides a lot more room for

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Speaker 1: the the speedboats to to to make an impact. Right.

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Speaker 1: So it's it's it's interesting that you're right that that

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Speaker 1: more of the dollar volume, more of the money flows

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Speaker 1: in terms of absolute amounts, is handled with these i'll

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Speaker 1: call them kind of barge like algorithms, but they follow along.

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Speaker 1: And so it really is is it's interesting to me,

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Speaker 1: is that the human money, I think, can actually make

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Speaker 1: more of a difference. And so what I'm trying to

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Speaker 1: look at is is what is the human money doing

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Speaker 1: and what is the behavior of investors. That's where I

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Speaker 1: think you need to go in terms of playing the player.

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Speaker 1: So Ben, you know, one of the things that's interesting

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Speaker 1: for active investors over the last several years the impact

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Speaker 1: of social media as a way to kind of track

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Speaker 1: investors sentiment, who's paying attention to what stocks, to what stories?

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Speaker 1: And Bloomberg has a lot of functionality on the terminal

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Speaker 1: to help terminal users kind of track that is that

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Speaker 1: kind of a twenty one century way or an analogy

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Speaker 1: to kind of money flows or reading the tape from

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Speaker 1: days of viewer. It's similar. But I'll but I'll tell

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Speaker 1: you this when you're looking at social media. You know,

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Speaker 1: we talked about influencers a lot, right, and and that

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Speaker 1: that corollary for markets is it's not how many people

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Speaker 1: are talking about something, whether we're you know, whether it's

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Speaker 1: social media or or it's uh, you know, television or newspaper,

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Speaker 1: it's who is talking about it. So it's it's it's

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Speaker 1: really I think much more important to follow the influencers because,

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Speaker 1: as the name implies, they really do have an influence.

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Speaker 1: We really are hardwired to respond to this stuff. And

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Speaker 1: that's true if you're you know, a Twitter follower, or

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Speaker 1: on or on Instagram and you're following an influencer, or

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Speaker 1: if you're listening to this show or two to end

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Speaker 1: the financial media, and you know J Powell decides to

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Speaker 1: come out and say something. So I'll say this, when

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Speaker 1: we're looking at media and we're looking at these signals

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Speaker 1: that come out of the narrative, it's less important to

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Speaker 1: see how many people are saying something, and much more

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Speaker 1: important to say who is saying something. Ben Hunt, thank

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Speaker 1: you so much for being with us. Ben Hunt, co

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Speaker 1: founder and chief investment officer of Second Foundation Partners. Well,

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Speaker 1: the right hailing business is going to get even more

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Speaker 1: crowded in the US public apprigity markets. First we had

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Speaker 1: Lift going public, and now news is coming out that

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Speaker 1: Uber is right behind like a a file in the

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Speaker 1: next day or two. But as I look at Lift here,

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Speaker 1: the stock is down six point two percent today to

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Speaker 1: sixty three dollars to share. Notable that it is well

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Speaker 1: below it's seventy two I p O price. So at

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Speaker 1: least the first right sharing investors are not feeling the love.

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Speaker 1: Let's talk about the space in general. It's a lot

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Speaker 1: going on. We welcome Man Deep sing Man Deep is

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Speaker 1: a senior tech industry annalys for Bloomberg Intelligence. He ran

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Speaker 1: literally ran to see us here in a Bloomberg Interactive

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Speaker 1: broker studio. He did take a car. Okay, sorry, I'll

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Speaker 1: be all week. So man, Deep, let's start with what

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Speaker 1: we'll get to Uber. But let's start with Lift. It's

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Speaker 1: not the I p O they were looking for, right

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Speaker 1: what do what do you think is going on here?

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Speaker 1: I think and I compare Lift to Uber. Uber is

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Speaker 1: definitely the iconic brand, you know, with scale that's probably

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Speaker 1: more brand value than you know, anybody else out there

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Speaker 1: in the right sharing space. So it really reflects the

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Speaker 1: pressure you know, as an investor, as a right sharing investor,

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Speaker 1: which one would you pick? And my guess is, you know,

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Speaker 1: given of Uber is much more diversified, it has got

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Speaker 1: a lot more value generation potential than Lift. Now, the

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Speaker 1: difference between Lift and Uber is, you know, when you

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Speaker 1: look at take rates or average revenue provider, Lift is

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Speaker 1: probably going to be better because of its niche focus.

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Speaker 1: But that's not what investors are going to focus on

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Speaker 1: because this space is not profitable at all. So it

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Speaker 1: doesn't matter, you know, even if Lift, it just doesn't

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Speaker 1: matter money you're baking it? Who cares? I love this

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Speaker 1: image of Lift coming out and putting their I p

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Speaker 1: O on the market, getting their thing, and then Uber

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Speaker 1: coming in with you know, two big guns, like shooting

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Speaker 1: at the sky, being like here we come. I'm wondering.

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Speaker 1: So the estimate is that they're going to get about

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Speaker 1: ten billion dollars in the year's biggest ip O. Do

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Speaker 1: you think it's gonna be over under? Do you think

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Speaker 1: it seems like it's being fairly valued? How do we

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Speaker 1: even assess the value of a company that makes no

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Speaker 1: money and has so in this case, from what we

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Speaker 1: have learned so far, Uber is about five times bigger

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Speaker 1: than Lift in terms of bookings, in terms of revenue.

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Speaker 1: So the fact that they're trying to raise ten billion

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Speaker 1: makes sense because Lift phrases raised for two billion dollars

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Speaker 1: close to billion dollars in the ip So from that perspective,

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Speaker 1: it makes sense. And my guesses they would have probably

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Speaker 1: eleven of their float as well, so it will be

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Speaker 1: you know, oversubscribed, that would be my best guess, and

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Speaker 1: it would kind of have a similar first day trading

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Speaker 1: uh like Lift. But it remains to be seen how

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Speaker 1: it will trade. You know, a month or two down

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Speaker 1: the line. Given all the focus on profitability and cash burn, alright,

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Speaker 1: let's let's go to those fundamental things like profitability and

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Speaker 1: cash burn. Um so lay after people? Why. I guess

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Speaker 1: what Lisa and I've heard from fund managers that we've

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Speaker 1: talked to on the show, is there really is a

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Speaker 1: concern about that path the profitability. It's maybe more so

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Speaker 1: and they we we thought about when Facebook and Google

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Speaker 1: were coming public. What's different about these companies and makes

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Speaker 1: it difficult to really envision that path of profitability. I

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Speaker 1: think the biggest problem with right sharing business in general

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Speaker 1: is the economies of scale are missing. So when I

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Speaker 1: look at the cost structure, there is no fixed cost

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Speaker 1: structure for right sharing. The cost grow as you're scaling

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Speaker 1: the business, which is unheard off. And you look at

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Speaker 1: you know, any other businesses with scale and fixed cost structure,

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Speaker 1: you get operating leverage. That's not happening in case off Lift,

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Speaker 1: that's not happening in case of Uber, which is five

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Speaker 1: times bigger than Lift. So when will they see the

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Speaker 1: economies of scale? When will the cost structure be stabilized

428
00:22:44,560 --> 00:22:47,400
Speaker 1: so that you see operating leverage? And yeah, who knows

429
00:22:47,480 --> 00:22:49,879
Speaker 1: right and Deep thing. We're speaking with senior tech industry

430
00:22:49,880 --> 00:22:53,359
Speaker 1: analysts for Bloomberg Intelligence. Ben Deep, I'm wondering, Uh, you know,

431
00:22:53,440 --> 00:22:56,600
Speaker 1: you say that maybe investors will start to care about

432
00:22:56,680 --> 00:23:00,400
Speaker 1: cash burn and making money a month or two after

433
00:23:00,480 --> 00:23:02,600
Speaker 1: the I p O. Why don't they care about it

434
00:23:02,760 --> 00:23:05,040
Speaker 1: before buying into the I p O? I mean, I

435
00:23:05,080 --> 00:23:07,320
Speaker 1: know this is crazy, but why are they gonna wait,

436
00:23:07,480 --> 00:23:12,119
Speaker 1: you know, a month to care the euphoria around an

437
00:23:12,359 --> 00:23:15,800
Speaker 1: iconic brand? I mean think of Were as a global brand.

438
00:23:15,880 --> 00:23:19,320
Speaker 1: This is like as big as Amazon investors here with

439
00:23:19,359 --> 00:23:21,560
Speaker 1: actual money, right, I mean euphoria, I get it, But

440
00:23:21,680 --> 00:23:24,800
Speaker 1: I mean why would they care later? Am I crazy? This?

441
00:23:24,800 --> 00:23:27,080
Speaker 1: This is what having been in an I p O banker,

442
00:23:27,320 --> 00:23:30,359
Speaker 1: what happens is you get the scarcity value of surrounding

443
00:23:30,359 --> 00:23:33,800
Speaker 1: initial public offering and you're you're afraid to miss out.

444
00:23:34,240 --> 00:23:36,399
Speaker 1: So it's you know, I really want to own X

445
00:23:36,480 --> 00:23:39,560
Speaker 1: number shares, so I'm gonna go put an indication interest

446
00:23:39,680 --> 00:23:42,480
Speaker 1: of ten x and then I then oh boy, I

447
00:23:42,520 --> 00:23:44,080
Speaker 1: got two shares and now what do I do with them?

448
00:23:44,119 --> 00:23:46,840
Speaker 1: So there's some of those issues, But I mean, I

449
00:23:46,840 --> 00:23:51,480
Speaker 1: guess it's interesting for LIFT. They did go first before Uber,

450
00:23:52,160 --> 00:23:54,399
Speaker 1: I guess most people thought it was an advantage, but

451
00:23:54,880 --> 00:23:58,120
Speaker 1: maybe not in hindsight. Well, I mean it was an

452
00:23:58,119 --> 00:24:01,320
Speaker 1: advantage because they owned the narrative for the time and

453
00:24:01,359 --> 00:24:04,359
Speaker 1: they were able to raise the IPO pricing. Remember Lift

454
00:24:04,440 --> 00:24:06,359
Speaker 1: raise the ip of pricing. They were priced at the

455
00:24:06,400 --> 00:24:08,679
Speaker 1: high end, and the stock had a good pop the

456
00:24:08,720 --> 00:24:11,720
Speaker 1: first day. The problem is this is happening too close.

457
00:24:11,760 --> 00:24:15,160
Speaker 1: You know, right after a lift, Uber is announcing it's

458
00:24:15,359 --> 00:24:19,119
Speaker 1: as one within two weeks of that, and so there's

459
00:24:19,160 --> 00:24:21,600
Speaker 1: already been a lot of focus in terms of the

460
00:24:21,640 --> 00:24:26,240
Speaker 1: path to profitability. So it begs the question, how quickly

461
00:24:26,320 --> 00:24:28,080
Speaker 1: can they get there? Okay, I want to ask the

462
00:24:28,080 --> 00:24:31,240
Speaker 1: Flip question, which is didn't hurt Uber to come second

463
00:24:31,280 --> 00:24:34,160
Speaker 1: in the sense that lifts I p O is down,

464
00:24:34,359 --> 00:24:36,520
Speaker 1: you know, and you are seeing a rocky kind of

465
00:24:36,560 --> 00:24:41,040
Speaker 1: start to the whole share share registration. So I'm just wondering,

466
00:24:41,440 --> 00:24:44,040
Speaker 1: you know, for Uber's sake, could people say, you know,

467
00:24:44,080 --> 00:24:46,879
Speaker 1: I kind of was burned on Lift. I'm not gonna

468
00:24:47,040 --> 00:24:51,440
Speaker 1: I'm not gonna feel as euphoric. I think it Uber

469
00:24:51,600 --> 00:24:57,080
Speaker 1: the brand value ements. It's just the I think people

470
00:24:57,119 --> 00:24:59,840
Speaker 1: are going to invest in Uber for for its brand

471
00:25:00,080 --> 00:25:03,160
Speaker 1: or its value generation potential, and they're going to view

472
00:25:03,160 --> 00:25:06,040
Speaker 1: it the same way as an Amazon or Facebook or

473
00:25:06,080 --> 00:25:08,600
Speaker 1: one of these you know, big companies. So let's talk

474
00:25:08,640 --> 00:25:13,960
Speaker 1: about evaluation a little bit. Where where did Lift come public?

475
00:25:14,119 --> 00:25:15,680
Speaker 1: Give us kind of a metric, and then maybe where

476
00:25:15,680 --> 00:25:17,720
Speaker 1: do you think Uber is going to come in above that?

477
00:25:17,840 --> 00:25:22,880
Speaker 1: Below that? Yeah? So Lift traded initially at about ten

478
00:25:23,000 --> 00:25:25,880
Speaker 1: times strilling twelve months sales. That now, that was at

479
00:25:25,920 --> 00:25:29,040
Speaker 1: the very high end. I think in case of Uber,

480
00:25:29,280 --> 00:25:32,520
Speaker 1: it's reasonable to expect that they will trade at the

481
00:25:32,560 --> 00:25:35,440
Speaker 1: ten time sales metric as well. So that should take

482
00:25:35,480 --> 00:25:39,120
Speaker 1: them above the hundred billion dollar market cap. And uh yeah,

483
00:25:39,240 --> 00:25:41,879
Speaker 1: that's that's a reasonable expectation. So I want to go

484
00:25:41,920 --> 00:25:44,000
Speaker 1: to something. You just said that Uber is going to

485
00:25:44,080 --> 00:25:47,640
Speaker 1: be in the same camp as Amazon. Is that right?

486
00:25:48,000 --> 00:25:50,199
Speaker 1: I mean, in other words, what is the barrier to

487
00:25:50,400 --> 00:25:54,919
Speaker 1: entry with ridesharing company other than recognition and the downloads

488
00:25:54,920 --> 00:25:59,560
Speaker 1: of the app on on people's smartphones. It seems like

489
00:26:00,080 --> 00:26:02,720
Speaker 1: the barrier to entry is bigger with Amazon. That is

490
00:26:02,720 --> 00:26:07,320
Speaker 1: for Uber. Well, right, sharing is a consolidated space, so

491
00:26:07,400 --> 00:26:10,679
Speaker 1: you may hear about new companies coming up, you know,

492
00:26:10,800 --> 00:26:14,520
Speaker 1: trying to cater to a knit segment, but right now,

493
00:26:14,640 --> 00:26:16,760
Speaker 1: right sharing, the way I look at it, globally, there

494
00:26:16,760 --> 00:26:19,920
Speaker 1: are four to five players. Soft Bank is an investor

495
00:26:20,119 --> 00:26:23,960
Speaker 1: in almost all of them, and it's a very consolidated market, which,

496
00:26:24,520 --> 00:26:27,280
Speaker 1: to be very honest, helps should help them with the

497
00:26:27,320 --> 00:26:32,040
Speaker 1: profitability aspect. And a new entrant can have, you know,

498
00:26:32,280 --> 00:26:34,520
Speaker 1: create the same kind of scale, and they don't have

499
00:26:34,640 --> 00:26:38,320
Speaker 1: the same data as Uber and Lift have around the drivers,

500
00:26:38,359 --> 00:26:41,560
Speaker 1: around riders, around city, so that's a competitive advantage. I

501
00:26:41,560 --> 00:26:44,160
Speaker 1: think about the one of the pushbacks that we heard,

502
00:26:44,240 --> 00:26:46,680
Speaker 1: not just for Lift and Uber but the other tech

503
00:26:47,000 --> 00:26:49,760
Speaker 1: um companies in generalists is the super voting stock and

504
00:26:49,760 --> 00:26:52,800
Speaker 1: the control that puts into the founders. Is that something

505
00:26:52,960 --> 00:26:56,160
Speaker 1: that you think is a real investor concern or most

506
00:26:56,160 --> 00:26:58,359
Speaker 1: people just pretty sanguente about it. So I think that

507
00:26:58,400 --> 00:27:01,240
Speaker 1: should play out favorably for the Uber i p O.

508
00:27:01,320 --> 00:27:04,239
Speaker 1: The fact that they don't have special voting rights, the

509
00:27:04,320 --> 00:27:08,200
Speaker 1: fact that you know, everybody is an equal investor or

510
00:27:08,280 --> 00:27:11,760
Speaker 1: will be an equal investor in Uber, I think should

511
00:27:11,800 --> 00:27:15,199
Speaker 1: be favorable for the Uber i p O. But I

512
00:27:15,240 --> 00:27:19,720
Speaker 1: think with Lift, given its niche focus, having control with

513
00:27:19,800 --> 00:27:22,080
Speaker 1: the founders isn't such a bad thing. I think they

514
00:27:22,080 --> 00:27:25,600
Speaker 1: can steer where they're going with monetization and expansion, and

515
00:27:25,640 --> 00:27:27,199
Speaker 1: that may not be a bad thing. What about the

516
00:27:27,200 --> 00:27:29,600
Speaker 1: regulatory risks here the idea that you have a lot

517
00:27:29,600 --> 00:27:32,320
Speaker 1: of cities pushing back, especially because of cab drivers that

518
00:27:32,359 --> 00:27:35,760
Speaker 1: are getting put out of business. Do you see that

519
00:27:35,800 --> 00:27:39,320
Speaker 1: as being a material threat that is incalculable and concerning

520
00:27:39,320 --> 00:27:44,720
Speaker 1: for investors that are overcome by their euphoria. Evidently absolutely, Yeah, Yeah,

521
00:27:45,200 --> 00:27:48,680
Speaker 1: it is a big threat and something where Uber has

522
00:27:48,720 --> 00:27:51,080
Speaker 1: seen a lot of lawsuits and so far as the

523
00:27:51,119 --> 00:27:54,160
Speaker 1: settlements they have had have been for smaller amounts, So

524
00:27:55,200 --> 00:27:57,879
Speaker 1: I don't think it's that big offer risks, but you

525
00:27:57,960 --> 00:28:00,720
Speaker 1: never know if if a big city like New York

526
00:28:00,800 --> 00:28:03,320
Speaker 1: or San Francisco comes up with a verdict that goes

527
00:28:03,359 --> 00:28:06,120
Speaker 1: against them, this is a huge threat. Okay, So it's

528
00:28:06,119 --> 00:28:08,400
Speaker 1: not just Uber. We've got some other tech IPOs coming

529
00:28:08,480 --> 00:28:11,560
Speaker 1: up in the next quarter or two. What else are

530
00:28:11,760 --> 00:28:13,720
Speaker 1: you and the b I tech team looking at? So,

531
00:28:13,880 --> 00:28:17,440
Speaker 1: pinterest is obviously a big one. You know there there

532
00:28:17,600 --> 00:28:21,200
Speaker 1: is a food delivery company, Postmates, that's likely to go public,

533
00:28:21,240 --> 00:28:24,840
Speaker 1: and we just published some research around you know, right

534
00:28:24,880 --> 00:28:29,000
Speaker 1: sharing companies likely to acquire food delivery because the top

535
00:28:29,040 --> 00:28:31,760
Speaker 1: line growth for right sharing is so much better. They

536
00:28:31,760 --> 00:28:34,760
Speaker 1: have such a long runway compared to food delivery, which

537
00:28:34,840 --> 00:28:37,960
Speaker 1: is much smaller, and they don't have the scale. So

538
00:28:38,160 --> 00:28:42,280
Speaker 1: we think right sharing will be the consolidators. The Ubers

539
00:28:42,320 --> 00:28:44,960
Speaker 1: and Lift will eventually end up buying a lot of

540
00:28:44,960 --> 00:28:48,440
Speaker 1: food delivery companies and consolidated this space even further. And

541
00:28:48,480 --> 00:28:52,160
Speaker 1: those are seamless and and things like that. Those are

542
00:28:52,160 --> 00:28:55,200
Speaker 1: the ones, and they're going to become uh, they're gonna

543
00:28:55,240 --> 00:28:58,000
Speaker 1: fall under Uber and Lift. That's a really interesting thesis

544
00:28:58,000 --> 00:28:59,920
Speaker 1: and that actually makes a whole lot of sense. Those

545
00:29:00,000 --> 00:29:02,200
Speaker 1: smart people and Bloomberg Intelligence do the right that smart

546
00:29:02,240 --> 00:29:04,360
Speaker 1: research you can find on the Bloomberg terminal. B I

547
00:29:04,400 --> 00:29:07,520
Speaker 1: go all right, man Dave Saying, senior tech industry analyzed

548
00:29:07,560 --> 00:29:13,480
Speaker 1: FORRE you go joining us here and active progress. Guys

549
00:29:25,840 --> 00:29:29,440
Speaker 1: Welleen has been a risk on environment, no doubt about that.

550
00:29:29,520 --> 00:29:32,720
Speaker 1: Stocks and bonds of both staging strong raunies after that

551
00:29:33,240 --> 00:29:37,000
Speaker 1: very week. And to to get a sense of where

552
00:29:37,040 --> 00:29:40,240
Speaker 1: there are values in interest rates and in the currency markets,

553
00:29:40,240 --> 00:29:43,160
Speaker 1: we welcome to our next guest, ed Al Husseini, senior

554
00:29:43,200 --> 00:29:46,680
Speaker 1: interest rate and currency analysts for Columbia, thread Needle Investments.

555
00:29:46,680 --> 00:29:49,920
Speaker 1: He joins us from hopefully sunny in warm Minneapolis, Minnesota,

556
00:29:49,960 --> 00:29:53,680
Speaker 1: But somehow I doubt it. Um so, ed, just give

557
00:29:53,760 --> 00:29:55,760
Speaker 1: us a sense from your perspectives, you step back and

558
00:29:55,800 --> 00:29:59,760
Speaker 1: look at the global landscape for interest rates where I'm

559
00:29:59,800 --> 00:30:02,960
Speaker 1: sorry for currencies. Where are you seeing value now across

560
00:30:03,200 --> 00:30:08,280
Speaker 1: the various currencies? Sure, yeah, so we've had um you know,

561
00:30:08,320 --> 00:30:10,320
Speaker 1: the headroom has shrunk a little bit in terms of

562
00:30:10,680 --> 00:30:14,200
Speaker 1: you know, currency valuation. I would say the broad pressed

563
00:30:14,480 --> 00:30:16,440
Speaker 1: and this has been our position for some time now,

564
00:30:16,560 --> 00:30:19,760
Speaker 1: is that the dollar continues to be quite attractive. First,

565
00:30:19,760 --> 00:30:22,200
Speaker 1: it's a it's a largely positive carry trade versus most

566
00:30:22,240 --> 00:30:24,959
Speaker 1: of the developed market piers. And second, when we look

567
00:30:25,000 --> 00:30:27,720
Speaker 1: at growth differentials, you know, despite the fact that we've

568
00:30:27,760 --> 00:30:31,120
Speaker 1: had a slowdown here in the US, growth outside the

569
00:30:31,160 --> 00:30:33,960
Speaker 1: US it looks looks particularly weak, you know, particularly in

570
00:30:34,560 --> 00:30:37,080
Speaker 1: Europe and Asia. So that differential continues to skew in

571
00:30:37,120 --> 00:30:40,080
Speaker 1: favor of the dollar. So being long dollar versus versus

572
00:30:40,080 --> 00:30:42,360
Speaker 1: the Euro looks attractive. And then if you look at

573
00:30:42,400 --> 00:30:45,680
Speaker 1: the smaller open economies within the developed market space that

574
00:30:45,720 --> 00:30:48,600
Speaker 1: are starting to ease to accommodate for that slowdown and

575
00:30:48,640 --> 00:30:51,640
Speaker 1: global growth. You're looking at Sweden, You're looking at Canada,

576
00:30:51,680 --> 00:30:54,840
Speaker 1: you're looking at Australia. Those currencies continue to look quite

577
00:30:55,120 --> 00:30:58,320
Speaker 1: vulnerable as well. Let's just set the record straight. Minneapolis

578
00:30:58,320 --> 00:31:01,480
Speaker 1: and spring is absolutely beauty, full and ed. Please support

579
00:31:01,480 --> 00:31:05,600
Speaker 1: Minneapolis because I lived near there not so long ago,

580
00:31:05,720 --> 00:31:10,000
Speaker 1: and it is absolutely a beautiful, beautiful city except for

581
00:31:10,120 --> 00:31:13,800
Speaker 1: in the winter when it's thirty. But I want, I

582
00:31:13,840 --> 00:31:16,160
Speaker 1: want to take the other side of this, the Euro

583
00:31:16,280 --> 00:31:19,680
Speaker 1: side of this, and talk about positioning, because you're right

584
00:31:19,840 --> 00:31:22,320
Speaker 1: that it does make sense that that Europe is weakening

585
00:31:22,360 --> 00:31:25,000
Speaker 1: more than the US, so on a relative basis, the

586
00:31:25,400 --> 00:31:29,080
Speaker 1: dollar seems like it should uh strengthen versus the euro.

587
00:31:29,240 --> 00:31:33,560
Speaker 1: And yet the short euro positioning is so crowded right now.

588
00:31:33,600 --> 00:31:36,320
Speaker 1: How do you sort of reconcile that or are you

589
00:31:36,400 --> 00:31:39,640
Speaker 1: concerned about that? It's a stretch trade. There's there's no

590
00:31:39,680 --> 00:31:42,120
Speaker 1: way around that. I think I think it's absolutely correct

591
00:31:42,120 --> 00:31:45,960
Speaker 1: to be concerned. Um I think at this point you

592
00:31:45,960 --> 00:31:48,360
Speaker 1: don't want to front run the data to aggressively in

593
00:31:48,400 --> 00:31:51,520
Speaker 1: the sense that if you do expect there to be

594
00:31:51,600 --> 00:31:54,600
Speaker 1: some some global reflation coming back onto the table in

595
00:31:54,600 --> 00:31:56,840
Speaker 1: the second half of the year, it does make sense

596
00:31:56,880 --> 00:32:00,160
Speaker 1: to start getting along the door at least cut cut

597
00:32:00,240 --> 00:32:03,000
Speaker 1: your daughter alongs UM. But you don't want to run

598
00:32:03,040 --> 00:32:05,400
Speaker 1: front to run that too aggressively in an environment where

599
00:32:05,440 --> 00:32:08,920
Speaker 1: the ECB is still very much firmly focused on on

600
00:32:09,000 --> 00:32:15,040
Speaker 1: easing policy while the feed is essentially sitting on its head. Interesting,

601
00:32:15,080 --> 00:32:19,600
Speaker 1: So as we think about Sterling, um sitting here one

602
00:32:19,920 --> 00:32:22,800
Speaker 1: let's go to the dark side. If we have a

603
00:32:22,880 --> 00:32:27,479
Speaker 1: hard Brexit, where do you think that goes? I mean

604
00:32:27,520 --> 00:32:31,800
Speaker 1: the correct answers, I have no clue. Um, It's honest,

605
00:32:34,720 --> 00:32:38,360
Speaker 1: it's an exceptionally difficult UM, you know, set up for

606
00:32:38,360 --> 00:32:41,160
Speaker 1: for the Sterling. At the moment um. You know, we

607
00:32:41,240 --> 00:32:44,160
Speaker 1: have had some some some more positive you know, noise

608
00:32:44,600 --> 00:32:47,000
Speaker 1: in in the political set up. In the course of

609
00:32:47,040 --> 00:32:50,080
Speaker 1: the past a couple of weeks, the probability of that

610
00:32:50,160 --> 00:32:52,440
Speaker 1: of that hard exit, at least in the short term,

611
00:32:52,480 --> 00:32:55,719
Speaker 1: seems to have diminished. Um. Whether you're able to trade

612
00:32:55,760 --> 00:32:59,160
Speaker 1: on it, uh is very difficult, and it is a

613
00:32:59,160 --> 00:33:02,080
Speaker 1: currency where people a position both ways. But those trading

614
00:33:02,200 --> 00:33:05,080
Speaker 1: ranges are exceptionally tight right now. UH, you know, whether

615
00:33:05,120 --> 00:33:07,200
Speaker 1: you look at the spot space or or or the

616
00:33:07,200 --> 00:33:10,400
Speaker 1: option space. So it's UM, it's a very difficult trade

617
00:33:10,440 --> 00:33:13,200
Speaker 1: to set up. So I want to scarce a little

618
00:33:13,200 --> 00:33:16,520
Speaker 1: bit too interest rates. Because every analyst and economists who

619
00:33:16,520 --> 00:33:18,920
Speaker 1: we speak to, or not everyone, but the vast majority

620
00:33:19,280 --> 00:33:21,440
Speaker 1: say that the bond market is priced in too much

621
00:33:21,520 --> 00:33:24,080
Speaker 1: pessimism in the United States, given how much the U

622
00:33:24,200 --> 00:33:27,960
Speaker 1: S economy is growing, and yet bond yields continue to fall.

623
00:33:28,080 --> 00:33:30,400
Speaker 1: So who is right and is it true? Do you

624
00:33:30,480 --> 00:33:33,440
Speaker 1: agree with the idea that there is too much pessimism

625
00:33:33,440 --> 00:33:37,400
Speaker 1: baked into where treasure yields are today? I don't think so,

626
00:33:37,560 --> 00:33:40,600
Speaker 1: And I think we're right about fair. I think versus

627
00:33:40,680 --> 00:33:43,240
Speaker 1: where we were, you know, say three to six months ago,

628
00:33:43,320 --> 00:33:45,959
Speaker 1: there's definitely a lot less value in the longer end

629
00:33:45,960 --> 00:33:48,920
Speaker 1: of the curve, so being exposed to treasury duration is

630
00:33:49,280 --> 00:33:51,840
Speaker 1: less attractive at this stage. Um, And I think the

631
00:33:51,920 --> 00:33:54,760
Speaker 1: value is shifted to being long in in the front's end,

632
00:33:55,080 --> 00:33:56,920
Speaker 1: so that the cash to the two year segment of

633
00:33:56,960 --> 00:33:59,200
Speaker 1: the curve. Uh. That's the way I would set it

634
00:33:59,280 --> 00:34:02,320
Speaker 1: up in terms of you know, the long und trading

635
00:34:02,360 --> 00:34:05,200
Speaker 1: around two fifty right now, it's sort of the medium

636
00:34:05,280 --> 00:34:08,719
Speaker 1: term range has been to thirty five to fifty five. Uh,

637
00:34:08,840 --> 00:34:12,239
Speaker 1: that's very much fair given the rampdown and growth and

638
00:34:12,280 --> 00:34:14,760
Speaker 1: inflation that we've seen, and I think the inflation picture

639
00:34:14,840 --> 00:34:17,759
Speaker 1: to me is much more troubling. Core inflation, you know,

640
00:34:17,840 --> 00:34:20,920
Speaker 1: continues to weaken. Momentum broke somewhere in the middle of

641
00:34:21,000 --> 00:34:23,560
Speaker 1: last year, and and and as continued to weaken since then,

642
00:34:24,520 --> 00:34:27,880
Speaker 1: despite the fact that the economy is is relatively healthy

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00:34:28,120 --> 00:34:31,840
Speaker 1: um and the Fed's ability to get inflation up beyond

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00:34:31,880 --> 00:34:34,480
Speaker 1: two percent is quite limited. In other words, the risk

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00:34:34,560 --> 00:34:38,359
Speaker 1: that inflation moves to the upside are quite limited. This

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00:34:38,400 --> 00:34:41,320
Speaker 1: has brought down the ceiling on rates across the curve

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00:34:41,960 --> 00:34:44,640
Speaker 1: um in our minds. You know, when we look at

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00:34:45,000 --> 00:34:48,400
Speaker 1: sort of the fair value trading range for the tenure

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00:34:48,520 --> 00:34:50,759
Speaker 1: or twelve months out somewhere between two fifty and two

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00:34:50,800 --> 00:34:54,160
Speaker 1: seventy five. So uh, you know, there's not a ton

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00:34:54,200 --> 00:34:56,359
Speaker 1: of value, but I think it's it's very close to fair.

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00:34:56,600 --> 00:34:59,319
Speaker 1: Very good. Ed al Husay any senior interest rates and

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00:34:59,360 --> 00:35:04,480
Speaker 1: currency and I'll from Columbia, Thread Needle Investments from Lovely Springtime, Minneapolis, Minnesota.

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Speaker 1: At thanks so much for joining us. Thanks for listening

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Speaker 1: to the Bloomberg P and L podcast. You can subscribe

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Speaker 1: and listen to interviews at Apple Podcasts or whatever podcast

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Speaker 1: I'm Lisa A. Bram Woyds. I'm on Twitter at Lisa A.

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00:35:19,520 --> 00:35:22,120
Speaker 1: Bram Woyits one before the podcast. You can always catch

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Speaker 1: us worldwide. I'm Bloomberg Radio