WEBVTT - Bloomberg Surveillance TV: June 11, 2025 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.600 --> 0:00:15.440 This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 0:00:15.440 --> 0:00:18.400 with Lisa Bromwitz and am Marie Hordern. Join us each 0:00:18.480 --> 0:00:21.360 day for insight from the best in markets, economics, and 0:00:21.400 --> 0:00:24.720 geopolitics from our global headquarters in New York City. We 0:00:24.760 --> 0:00:27.400 are live on Bloomberg Television weekday mornings from six to 0:00:27.480 --> 0:00:31.000 nine am Eastern. Subscribe to the podcast on Apple, Spotify 0:00:31.200 --> 0:00:33.479 or anywhere else you listen, and as always on the 0:00:33.479 --> 0:00:37.400 Bloomberg Terminal and the Bloomberg Business app. Tawson's slock of Apollo, 0:00:37.440 --> 0:00:40.400 writing the consensus expects inflation to rise in the US 0:00:40.880 --> 0:00:44.640 but fall in the Eurozone. Tawson joins us. Now for more, Towson, 0:00:44.680 --> 0:00:46.159 Let's focus on the US side of things, and then 0:00:46.159 --> 0:00:49.160 we can get to a more global dimension. Let's focus 0:00:49.200 --> 0:00:51.040 on the US with the tariffs in mind. Is it 0:00:51.120 --> 0:00:53.559 too early, Tawson to expect those tariffs to show up 0:00:53.680 --> 0:00:54.720 in the day of this morning? 0:00:55.520 --> 0:00:56.160 No, it's not. 0:00:56.400 --> 0:00:58.040 What really is the key is you hear is that 0:00:58.120 --> 0:01:01.280 there is indeed going to view some upside pressure on inflation. 0:01:01.600 --> 0:01:03.120 And what's most critical. 0:01:02.680 --> 0:01:06.200 About this is that it's all about the behavior among companies. 0:01:06.480 --> 0:01:08.120 How do they respond to teriffs. 0:01:08.280 --> 0:01:10.399 Do they pass on one hundred percent, will they pass 0:01:10.440 --> 0:01:12.319 on fifty percent, or will they pass on nothing. 0:01:12.600 --> 0:01:14.320 If they pass on nothing, of course. 0:01:14.160 --> 0:01:16.480 Then terraffs have to be absorbed by the E and 0:01:16.520 --> 0:01:19.560 the PE ratio and amy by earnings. So it becomes 0:01:19.640 --> 0:01:22.399 very important the data prints today and for the coming months, 0:01:22.440 --> 0:01:25.119 and we should expect to see some upside pressure on 0:01:25.240 --> 0:01:28.440 inflation coming from terrorists. But it's also the upside pressure 0:01:28.480 --> 0:01:31.280 we're watching that's coming from what's going on with the dollar. 0:01:31.440 --> 0:01:33.720 The dollar is down quite significant since the beginning of 0:01:33.720 --> 0:01:36.440 the year. This is also beginning to creep in as 0:01:36.480 --> 0:01:38.959 a risk to the upside for inflation. And finally, the 0:01:39.040 --> 0:01:41.360 other thing that's also beginning to become risk is that 0:01:41.520 --> 0:01:44.679 the restrictions and immigration we saw last Friday some upweight 0:01:44.680 --> 0:01:47.520 pressure on wage inflation. This is also something that's an 0:01:47.600 --> 0:01:50.000 upside risk to inflation over the coming months. So the 0:01:50.000 --> 0:01:52.559 bottom line to a question Jonathan, is that we should 0:01:52.600 --> 0:01:55.440 expect to see from a number of different forces upside 0:01:55.440 --> 0:01:57.840 pressure on inflation for the next several months, including in 0:01:57.880 --> 0:01:58.559 the data today. 0:01:58.800 --> 0:02:01.240 Will it be sustained beyond the next several months, tossing 0:02:01.280 --> 0:02:03.440 as you alluded to. As you indicated, that is the 0:02:03.960 --> 0:02:06.560 key question right now, the central question for a lot 0:02:06.560 --> 0:02:09.120 of people in financial markets. What is on your dashboard 0:02:09.120 --> 0:02:10.080 that guides that view. 0:02:10.840 --> 0:02:13.880 Well, my dashboard is to type ECFC, go on Bloomberg 0:02:13.919 --> 0:02:15.760 and look at what the consensus is expecting, and that 0:02:15.800 --> 0:02:17.920 will tell you that CPI is expected to go up 0:02:17.919 --> 0:02:20.799 from two point six to three point three by the 0:02:20.880 --> 0:02:23.200 end of the year. So that's roughly a half a 0:02:23.200 --> 0:02:26.480 percentage point increase in inflation. And that's the same for 0:02:26.560 --> 0:02:30.000 core PCE and for headline PCE. So the issue there 0:02:30.120 --> 0:02:32.640 is that we should expect to see this take quite 0:02:32.639 --> 0:02:35.880 some time because it all depends on the company's behavior 0:02:36.160 --> 0:02:38.720 in terms of when do they begin to implement higher 0:02:38.760 --> 0:02:41.440 prices on the back of inflation going up. And that 0:02:41.639 --> 0:02:44.840 is something that in the profile of inflation onambiguously pushes 0:02:44.919 --> 0:02:47.960 us up above three percent. And this is very important 0:02:47.960 --> 0:02:50.600 because the starting point if we had started with inflation 0:02:50.639 --> 0:02:52.639 today at one and a half and we had half 0:02:52.639 --> 0:02:54.640 of percent, then we're going to get much closer to 0:02:54.680 --> 0:02:56.919 the feeds target. But the problem is that the levels 0:02:56.919 --> 0:02:59.760 we're at two point eight of inflation today is already 0:03:00.080 --> 0:03:01.000 at a level that is. 0:03:01.000 --> 0:03:02.560 Significant above the FED target. Too. 0:03:02.600 --> 0:03:04.840 If you add a shock of lifting another half of 0:03:04.840 --> 0:03:07.760 a percentage point to inflation, that really complicates the FED 0:03:07.880 --> 0:03:10.000 job and therefore makes it very difficult for them to 0:03:10.080 --> 0:03:12.240 cut breaks in the environment whether there's so much upweight 0:03:12.240 --> 0:03:13.040 pressure on inflation. 0:03:14.160 --> 0:03:17.280 So turstin in all other things being equal, world, right, 0:03:17.320 --> 0:03:19.160 when you slap a tariff on the price of those 0:03:19.200 --> 0:03:19.840 goods move up. 0:03:19.880 --> 0:03:20.680 I think that's clear. 0:03:20.880 --> 0:03:23.120 There are some offsets though, potentially, and I'm interested in 0:03:23.120 --> 0:03:26.480 your thoughts there. One, right, energy prices have been lower 0:03:26.560 --> 0:03:28.560 now for a kind of sustained period of time, so 0:03:28.600 --> 0:03:32.560 there's some disinflationary potential there. Also, the ISM service number 0:03:32.639 --> 0:03:36.080 last week came in below fifty, and so there's some 0:03:36.120 --> 0:03:39.680 signs of slowing in the service economy. So how do 0:03:39.760 --> 0:03:41.840 you think about some of those potential offsets and do 0:03:41.840 --> 0:03:44.800 you think they're enough to maybe stunt the impact of 0:03:45.200 --> 0:03:47.080 what you're expecting from a tariff perspective. 0:03:47.800 --> 0:03:50.400 No, you're right, from a growth perspective, lower energy prices 0:03:50.480 --> 0:03:53.480 is certainly helpful. But coll PCE and co CPI of 0:03:53.560 --> 0:03:55.880 course excludes food and energy. So from the fests perspective, 0:03:55.920 --> 0:03:58.840 they would likely focus on that there is general upweight 0:03:58.880 --> 0:04:02.320 pressure in the broader measures of inflation excluding food and 0:04:02.400 --> 0:04:04.560 energy and to your services. It's right, and if I 0:04:04.640 --> 0:04:08.000 B has been showing some upside pressure also on the 0:04:08.080 --> 0:04:11.120 expectations to inflation. There's also some measures of course of 0:04:11.120 --> 0:04:13.880 inflation expectations, both for the University of Michigan and the 0:04:13.880 --> 0:04:16.719 Conference Board that is also telling you that infaced expectations 0:04:16.720 --> 0:04:19.160 are way too high red to where the FED would 0:04:19.160 --> 0:04:21.039 like them to be. So you're right, there are some 0:04:21.200 --> 0:04:24.000 nuances in terms of yes, that different things going on 0:04:24.040 --> 0:04:27.120 in some of them, especially survey based data of what's 0:04:27.120 --> 0:04:29.320 going on with inflation, especially when it comes to household 0:04:29.360 --> 0:04:30.919 expectations being very very high. 0:04:31.160 --> 0:04:32.760 So combined, I would. 0:04:32.560 --> 0:04:34.760 Still come to the conclusion that I worry more about 0:04:34.760 --> 0:04:36.640 the upside risk. This is also what the FED has 0:04:36.640 --> 0:04:39.160 in their own forecast, That's what the consensus is forecasting. 0:04:39.320 --> 0:04:41.839 That's also what we're forecasting. So for what is word, 0:04:41.960 --> 0:04:45.160 I still think that the overall risks. Yes, surveys may 0:04:45.200 --> 0:04:47.440 show that ism was a little bit weaker when it 0:04:47.480 --> 0:04:49.560 came to prices paid, but the bottom line is that 0:04:49.600 --> 0:04:52.360 the tailwinds coming from tariffs coming from a lower dollar, 0:04:52.520 --> 0:04:55.200 coming from restrictions and immigration are just pretty strong. And 0:04:55.240 --> 0:04:58.000 that's combined with at the same time a slowdown in growth, 0:04:58.279 --> 0:05:01.160 partly because of teriffs of course also weighing on sales 0:05:01.200 --> 0:05:03.920 for companies, but also slow down in growth because of the. 0:05:03.880 --> 0:05:05.080 New factor that's emerging. 0:05:05.320 --> 0:05:08.119 Nearly consumers are beginning to take a hit now because 0:05:08.160 --> 0:05:11.080 student loan payments are restarting, and people are beginning to 0:05:11.080 --> 0:05:12.760 take a hit on their credit scores if they don't 0:05:12.800 --> 0:05:13.800 pay their student loans. 0:05:13.880 --> 0:05:15.400 So the New York Fad is estimating that's. 0:05:15.320 --> 0:05:17.800 A much as six seven eight million households that now 0:05:17.800 --> 0:05:20.080 are at risk of no longer being able to get credit. 0:05:20.120 --> 0:05:22.080 So that's a hitlint to growth, while we at the 0:05:22.120 --> 0:05:24.279 same time have some upward push on inflation. So that's 0:05:24.279 --> 0:05:27.440 taflation in a nutshell. As the baseline scenario that we 0:05:27.560 --> 0:05:29.600 view as the most likely case at the moment. 0:05:29.680 --> 0:05:32.080 A Tellston that final point is so important. Our consumers 0:05:32.080 --> 0:05:34.200 in a position to eat tap and it's the labor 0:05:34.240 --> 0:05:36.960 market tight enough for them to demand the higher way 0:05:37.080 --> 0:05:39.920 just to fund it. What's your assessment of that situation now? 0:05:40.520 --> 0:05:42.680 So one way to assess that is once again to 0:05:42.680 --> 0:05:44.000 go to you a Bloomberg sho need to look at 0:05:44.000 --> 0:05:46.400 the red Book same store retail sales that went up 0:05:46.440 --> 0:05:49.440 a lot just immediately during the Liberation Day weeks when 0:05:49.440 --> 0:05:51.240 we had, of course a lot of people that were 0:05:51.240 --> 0:05:53.880 front loading their purchases. But in the last several weeks, 0:05:53.880 --> 0:05:56.080 the same store retail sales date up on Redbook has 0:05:56.080 --> 0:05:59.280 started a show and seeping lower. We're now below five 0:05:59.320 --> 0:06:01.839 percent in numbers growth for same store retail sales. 0:06:02.120 --> 0:06:04.120 We are watching that trend very very carefully. 0:06:04.120 --> 0:06:06.080 And this is weekly data that comes out every Tuesday 0:06:06.080 --> 0:06:08.560 at nine am that will tell us something about is 0:06:08.600 --> 0:06:11.520 the consumer really in such great shape as the balance 0:06:11.520 --> 0:06:15.040 sheet would be saying, or are these headwinds, especially headwinds 0:06:15.120 --> 0:06:18.360 coming from terres headwinds coming across the border, especially from 0:06:18.480 --> 0:06:20.560 the student owned problems that are beginning to emerge, And 0:06:20.560 --> 0:06:21.240 they only really. 0:06:21.120 --> 0:06:22.240 Started emerging here in ME. 0:06:22.600 --> 0:06:24.920 And we are worried that the US consumer could begin 0:06:25.000 --> 0:06:26.920 to slow down, and we're beginning to see some signs 0:06:26.920 --> 0:06:29.360 of that trend downwards in the red Book same store 0:06:29.360 --> 0:06:30.320 retail sales data. 0:06:30.400 --> 0:06:33.160 What you're describing is potentially a nightmare for the Federal Reserve. 0:06:33.400 --> 0:06:35.560 You talked about the dynamics planing out in Europe. The 0:06:35.600 --> 0:06:37.880 ECP has been reducing interest rates now for a number 0:06:37.920 --> 0:06:40.080 of months, Tolson, where do you think it leaves the 0:06:40.080 --> 0:06:41.680 federal reserve at a time when I hear a lot 0:06:41.720 --> 0:06:44.279 of people saying they should just sit this out, sit 0:06:44.320 --> 0:06:46.360 this out for the summer, and maybe sit this out 0:06:46.760 --> 0:06:47.599 for the rest of the year. 0:06:48.440 --> 0:06:52.520 That's extremely important because this issue is, of course exactly that. 0:06:52.520 --> 0:06:55.040 If you have higher infletion, the FITCH would be hiking. 0:06:55.360 --> 0:06:57.640 If you have lower growth, the FITCH would be cutting. 0:06:57.839 --> 0:06:59.880 So which one is it? Does the fit like apple's 0:07:00.200 --> 0:07:02.440 like oranges? How much weight do they put on inflation 0:07:02.520 --> 0:07:04.440 growing up? How much weight do they put on growth 0:07:04.480 --> 0:07:07.400 slowing down? And the dual mandate is torn in two 0:07:07.520 --> 0:07:10.440 completely opposite directions. That's why the easy answers to that 0:07:10.480 --> 0:07:12.400 for their I from SEAM members is to say we're 0:07:12.400 --> 0:07:15.560 not doing anything but executory. Your point, Jonathan, what if 0:07:15.560 --> 0:07:17.960 the inflation data does start to move up much more? 0:07:18.040 --> 0:07:20.239 Or on the other hand, what if growth starts slowing 0:07:20.280 --> 0:07:22.760 down more. It's a really difficult spot for the vetter 0:07:22.760 --> 0:07:25.600 to be in because monetary policy works with a lack 0:07:25.840 --> 0:07:27.600 If I'm sea members will say that's as much as 0:07:27.600 --> 0:07:30.200 well to eighteen months. So it's almost impossible for them 0:07:30.360 --> 0:07:32.760 to catch this falling knife because we just don't know 0:07:32.760 --> 0:07:34.800 at this stage whether the growth slow down will dominate 0:07:35.000 --> 0:07:36.960 or whether the rise inflation will be dominating it. 0:07:37.120 --> 0:07:42.720 Tolston provocative stuff. Appreciate the catch up. Tolston slocktair of Apollo. 0:07:50.600 --> 0:07:52.720 If we can build on the conversation with a perfect guest, 0:07:52.880 --> 0:07:55.880 Bob Diamond, the founding partner of Atlas Merchant Capital and 0:07:55.920 --> 0:07:58.880 the former Barclay's CEO. Come on, I got to see you, 0:07:59.240 --> 0:08:01.400 Marrin Jonathan. I'm good, it's going to see you, sir. 0:08:01.440 --> 0:08:03.720 Let's just recap things. Where are we right now, big 0:08:03.760 --> 0:08:06.400 sety thousand foot view of the bank in sector in America? 0:08:06.400 --> 0:08:07.360 How are thing's shapen up? 0:08:07.600 --> 0:08:07.760 You know? 0:08:07.840 --> 0:08:10.160 I think I think just kind of the back and 0:08:10.200 --> 0:08:12.000 forth and on the one hand and on the other 0:08:12.000 --> 0:08:16.000 hand from Herman suggests pretty much my view, which is 0:08:16.080 --> 0:08:19.160 kind of a balance, you know. I think we'll see 0:08:19.160 --> 0:08:24.480 a turnaround in deal making in advisory in the second 0:08:24.480 --> 0:08:26.880 half of the year that was a bit slower than 0:08:26.920 --> 0:08:29.920 people expected in the first half. I don't think Wall 0:08:30.000 --> 0:08:32.719 Street will repeat the kind of trading performance they had, 0:08:32.760 --> 0:08:35.120 which was it was kind of like Christmas in the 0:08:35.160 --> 0:08:39.880 first quarter for trading desks with all the volatility. But 0:08:40.000 --> 0:08:42.920 I think, you know, I think it's it's a good environment, 0:08:43.040 --> 0:08:46.880 so no big warning signs. I think the as you said, 0:08:46.920 --> 0:08:50.000 the report from City that at long lost provisions are 0:08:50.040 --> 0:08:53.160 a bit higher is not surprising. I would be very 0:08:53.200 --> 0:08:55.040 surprised if they're more than a bit higher. 0:08:55.160 --> 0:08:57.480 An okay environment for the big banks or for the 0:08:57.480 --> 0:08:58.480 smaller banks as well. 0:08:58.679 --> 0:09:01.160 Well, it's a great environment and for the smaller banks. 0:09:01.160 --> 0:09:03.480 And as you know, we're very focused on regional and 0:09:03.480 --> 0:09:09.239 community banks. We've done our first clothes in an investment 0:09:09.520 --> 0:09:13.040 strategy for that sector. We think that the four and 0:09:13.080 --> 0:09:17.559 a half thousand regional and community banks one, they're incredibly 0:09:17.559 --> 0:09:19.760 important to the economy. They do over half of the 0:09:19.840 --> 0:09:23.800 lending to small businesses and family owned businesses. But four 0:09:23.840 --> 0:09:26.920 and a half thousands probably the wrong number. In many 0:09:27.000 --> 0:09:29.960 of the smaller, more private community banks that are so 0:09:30.040 --> 0:09:33.640 important to their communities are frankly just too small to 0:09:33.679 --> 0:09:39.480 succeed with higher technology costs, higher regulatory costs, higher compliance costs. 0:09:39.480 --> 0:09:44.280 And Jonathan, what we're seeing is with a focus of 0:09:44.320 --> 0:09:49.400 our banking expertise, our integration expertise. The CEOs of these 0:09:49.480 --> 0:09:54.280 banks want to take part in consolidation. The opportunity to 0:09:54.440 --> 0:09:59.880 increase ROE through cost synergies, particularly on in state transaction, 0:10:00.520 --> 0:10:04.800 is terrific. So I think in addition to that, as 0:10:04.840 --> 0:10:07.440 you look at the go forward business opportunity, we have 0:10:07.520 --> 0:10:12.040 higher rates, they're probably trending somewhat lower but not too aggressively, 0:10:12.520 --> 0:10:17.640 and very high demand for credit. So the environment could 0:10:17.640 --> 0:10:21.600 not be better for a strong regional bank today. 0:10:22.040 --> 0:10:24.839 We often hear that in tariffs and rates act as 0:10:24.880 --> 0:10:29.040 overhangs on potential m and A and consolidation. But stepping back, 0:10:29.080 --> 0:10:31.880 there's also a tremendous amount of disruption going on at 0:10:31.880 --> 0:10:36.520 an industry level. AI is disrupting many industries. You still 0:10:36.520 --> 0:10:39.360 have this transition in terms of office in real estate 0:10:39.440 --> 0:10:42.559 post COVID, you have the energy transition, and we'll see 0:10:42.600 --> 0:10:43.839 what happens with reshoring. 0:10:43.920 --> 0:10:45.280 So would you argue that. 0:10:45.240 --> 0:10:47.680 Disruption in above itself is going to lead to more 0:10:47.960 --> 0:10:51.800 industry consolidation and M and A across various sectors. 0:10:52.559 --> 0:10:57.080 Yeah, I don't think that's a bad hypothesis, particularly with AI. 0:10:57.280 --> 0:11:00.360 I think looking at financial services again, which is kind 0:11:00.360 --> 0:11:03.720 of our expertise and our focus. It's nothing but positive 0:11:03.960 --> 0:11:08.120 in terms of in the first stage, greater efficiency and 0:11:08.240 --> 0:11:12.480 even where there's been that disruption in the US kind 0:11:12.520 --> 0:11:17.240 of the US economy around uncertainty and tariffs. We have 0:11:17.280 --> 0:11:20.599 a couple of broker dealers that were invested in overseas 0:11:20.679 --> 0:11:24.480 Panmore Gordon in the UK and Kepler Chevro and Peraspace, 0:11:24.600 --> 0:11:28.319 but really focused on Europe for equity sales, trading and research. 0:11:28.720 --> 0:11:32.640 They both had record earnings in the first quarter for 0:11:32.800 --> 0:11:36.880 flows from US investors into the UK equity market and 0:11:37.040 --> 0:11:40.840 into the European equity market. It's incredible to me every 0:11:40.880 --> 0:11:44.560 time we see these disruptions, it's like the markets are 0:11:44.600 --> 0:11:48.320 reacting almost before we're ready to do the analysis. So 0:11:48.320 --> 0:11:51.680 those are first quarter numbers at Paranmore Gordon and Kepler 0:11:51.760 --> 0:11:55.600 Chevro and their records for the firms in terms of 0:11:55.640 --> 0:11:59.520 flows from US investors into the UK and into Europe. 0:11:59.559 --> 0:12:02.880 So it's amazing how agile the investors are. 0:12:03.360 --> 0:12:05.000 I was going to follow up and ask you about 0:12:05.000 --> 0:12:07.079 that because I know you have a very global experience 0:12:07.120 --> 0:12:10.240 throughout your banking career, and it's also just stunning to 0:12:10.280 --> 0:12:14.720 think about how soon the January American exceptionalism thesis turned 0:12:14.720 --> 0:12:18.440 into sell America after Liberation Day. Do you see those 0:12:18.480 --> 0:12:22.000 trends in terms of flows and sentiment moving away from 0:12:22.120 --> 0:12:24.920 US markets continuing or is it more of a kind 0:12:24.960 --> 0:12:25.920 of a near term LIP. 0:12:26.320 --> 0:12:28.239 I think there are reasons to continue. 0:12:28.320 --> 0:12:30.880 So one of the reasons is it's been a big, 0:12:30.920 --> 0:12:33.760 big divergence almost since two thousand and eight in the 0:12:33.840 --> 0:12:37.920 Great Financial Crisis, certainly in banks, but really in equities 0:12:37.960 --> 0:12:42.800 in general. The outperformance of US equity markets has been very, 0:12:42.920 --> 0:12:46.520 very clear relative to the UK in Europe, so you 0:12:47.760 --> 0:12:51.000 had a bounce coming. And I think one of the 0:12:51.040 --> 0:12:56.520 catalysts for that is this administration's kind of gave a 0:12:56.679 --> 0:13:00.800 boot in the butt for the European to say, we 0:13:00.920 --> 0:13:04.000 really have to focus on spending, we really have to 0:13:04.040 --> 0:13:07.360 focus on private sector, we really have to focus on 0:13:07.400 --> 0:13:11.760 the economy growing. And I think the attitude change across 0:13:11.800 --> 0:13:14.840 Europe and the attitude change in the UK toward private 0:13:14.920 --> 0:13:19.800 sector's success business profitability has been positive for them. So 0:13:19.880 --> 0:13:22.439 I think the US is still like the leading economy. 0:13:23.120 --> 0:13:26.200 It's so you know, the financial services industry is so deep, 0:13:26.240 --> 0:13:29.520 it's just such an impressive machine It's not a negative 0:13:29.559 --> 0:13:32.040 on the US necessarily. I think once we work through 0:13:32.080 --> 0:13:35.200 the uncertainty around tariffs, we'll see the strength. But a 0:13:35.240 --> 0:13:37.800 bounce in Europe and a bounce in the UK was coming. 0:13:37.960 --> 0:13:39.720 Do you still see the policy makes from this White 0:13:39.760 --> 0:13:41.520 House's pro risk, pro growth? 0:13:43.000 --> 0:13:46.920 I think I think, to me, Jonathan, the single thing 0:13:46.960 --> 0:13:49.640 that investors are looking for right now, well is that 0:13:49.720 --> 0:13:51.959 one thing. But if I if I picked one out 0:13:51.960 --> 0:13:55.480 at certainty and I think, you know, calming down the 0:13:55.559 --> 0:13:59.000 situation with US and China would be a very big 0:13:59.040 --> 0:14:01.360 part of that. So I think think the announcement today, 0:14:02.640 --> 0:14:06.720 if if we move forward with solving some of those situations. 0:14:06.760 --> 0:14:09.080 I mean, keep in mind, if you go back like 0:14:09.679 --> 0:14:12.960 ten decades then you know, tariffs were like two and 0:14:12.960 --> 0:14:16.040 a half percent on average, they got up to twenty 0:14:16.120 --> 0:14:18.520 five or thirty percent with all of the all of 0:14:18.559 --> 0:14:21.240 the noise. If they settle around five or six percent, 0:14:21.840 --> 0:14:24.080 you know, I think we have you know, we have 0:14:24.120 --> 0:14:26.520 confidence again, and we have certainty again. I think we'll 0:14:26.560 --> 0:14:29.760 bring we'll have deal making comeback. So I think this 0:14:29.840 --> 0:14:33.240 is a big moment, and I think what's been recognized 0:14:33.360 --> 0:14:35.840 is that China actually has some pretty strong. 0:14:35.600 --> 0:14:38.880 Cards rare earths is one of them. 0:14:39.760 --> 0:14:41.760 But you know, as you look at the latest numbers, 0:14:41.840 --> 0:14:46.960 China still had a increase in exports. Exports to the 0:14:47.040 --> 0:14:49.640 US were down thirty percent, but exports to the rest 0:14:49.680 --> 0:14:53.720 of the world were up eleven percent, So overall their exports. 0:14:53.280 --> 0:14:54.640 Were up more than twenty percent. 0:14:54.640 --> 0:14:58.360 Of the Internet right, so less than ten percent of 0:14:58.440 --> 0:15:01.040 their exports are to the US down. 0:15:01.160 --> 0:15:03.160 This is something you talked about. The last few months 0:15:03.200 --> 0:15:05.520 have revealed the leverage that the Chinese have this time around, 0:15:05.520 --> 0:15:08.480 maybe in a way that wasn't really enforced several years 0:15:08.480 --> 0:15:10.040 ago in the president's first term. 0:15:10.480 --> 0:15:10.680 Yeah. 0:15:10.720 --> 0:15:13.400 Absolutely, and I think there might be some positives that 0:15:13.960 --> 0:15:20.320 redirect and re order some critical security based industries, technology, pharma, 0:15:20.480 --> 0:15:23.400 medical supplies, etc. But I think the theme that I'm 0:15:23.440 --> 0:15:25.520 just hearing from Bob is one we just talked about 0:15:25.520 --> 0:15:27.040 with Ed earlier, which is. 0:15:27.040 --> 0:15:28.880 This unintended consequences. 0:15:28.920 --> 0:15:32.040 We've given a kick to Europe to start spending and 0:15:32.080 --> 0:15:35.320 maybe in many ways created better growth opportunities for them 0:15:35.520 --> 0:15:37.400 that they wouldn't have taken on earlier, much like the 0:15:37.440 --> 0:15:38.760 deepseak analog. 0:15:38.720 --> 0:15:40.680 Bop, does that mean that you're more focused on the 0:15:40.760 --> 0:15:42.880 US as everyone starts to look, how swear, But maybe 0:15:42.920 --> 0:15:44.640 the better opportunities here now. 0:15:44.640 --> 0:15:46.720 Relative to the last three or four years. 0:15:47.720 --> 0:15:50.560 I think the opportunities in the UK and Europe are there. 0:15:50.560 --> 0:15:52.920 But Jonathan, one of the things we felt in Atlas 0:15:52.920 --> 0:15:56.200 Merchant Capital was one of our real competitive advantages in 0:15:56.200 --> 0:15:58.800 financial services is we are focused on the UK and 0:15:58.840 --> 0:16:02.000 Europe in the USA US. Prior to COVID, we had 0:16:02.040 --> 0:16:04.840 done just as many investments in the UK and Europe 0:16:04.840 --> 0:16:07.440 as we've done in the US since COVID has been 0:16:07.600 --> 0:16:10.640 US US US, because that's where the opportunities are. 0:16:11.200 --> 0:16:12.840 So I would say it differently. 0:16:12.920 --> 0:16:16.160 I hope we continue to see opportunities here and US 0:16:16.280 --> 0:16:20.560 regional and community banks writ large, that's a phenomenal opportunity 0:16:20.600 --> 0:16:21.240 in the US. 0:16:21.520 --> 0:16:24.320 But if you give us more opportunities. 0:16:23.560 --> 0:16:26.880 For growth in the UK and Europe than Atlas Merchant 0:16:26.880 --> 0:16:29.120 Capital is going to be very, very busy, And then 0:16:29.200 --> 0:16:31.240 that's the direction that looks like we're going on. 0:16:31.320 --> 0:16:32.880 Just give us the number quickly again, what are we 0:16:32.880 --> 0:16:34.880 at now regional banks in this country? Four four and 0:16:34.880 --> 0:16:35.320 a half. 0:16:35.160 --> 0:16:37.760 Four and a half thousand, and it's probably the wrong number. 0:16:37.800 --> 0:16:39.720 And you've got just come a down to wall I. 0:16:39.640 --> 0:16:42.600 Think three years from today market down will be at 0:16:42.640 --> 0:16:43.560 one to two thousand. 0:16:43.720 --> 0:16:46.120 It's a punchy go, that's for sure. You could be 0:16:46.120 --> 0:16:47.360 a big part of it. So you've boways got to 0:16:47.360 --> 0:16:47.600 see it. 0:16:47.680 --> 0:16:48.120 Good to see it. 0:16:48.240 --> 0:16:50.040 Thanks for and I appreciate your time. Pup time in 0:16:50.080 --> 0:17:03.000 there of Atlans merchis merchant capital. It's with me around 0:17:03.000 --> 0:17:05.960 the table. Greg Peters a PHM. Seth competer of Morkan 0:17:06.000 --> 0:17:08.000 Stanley Seth. Just your first take off the back of 0:17:08.000 --> 0:17:10.360 that data not in line with what you were expecting. 0:17:10.440 --> 0:17:13.640 Now, that's exactly right. We were expecting roughly with consensustead 0:17:13.640 --> 0:17:16.320 of be up, you know, two or three tenths on core. 0:17:16.840 --> 0:17:19.119 I think one thing that's important to remember though, is 0:17:19.119 --> 0:17:21.439 there are lots of moving parts here. We had already 0:17:21.480 --> 0:17:23.840 seen lots of swings and things like used cars before. 0:17:23.920 --> 0:17:27.439 We are coming into this year on a deflationary trend 0:17:27.560 --> 0:17:31.480 or disinflationary trend, and so you know, I think we 0:17:31.600 --> 0:17:33.840 got to just take this as one month's worth of noise. 0:17:33.960 --> 0:17:36.520 The other thing though, is it's still early game. So 0:17:36.560 --> 0:17:39.159 when we look at what happened before with tariffs, it 0:17:39.160 --> 0:17:41.800 did take two or three months before you saw any 0:17:42.119 --> 0:17:44.560 sign of the tariffs and the inflation data, and so 0:17:44.600 --> 0:17:47.800 I think this is still the beginning of the game, 0:17:47.840 --> 0:17:48.159 not the end. 0:17:48.160 --> 0:17:50.240 Of timing and sequencing is really important. I know you've 0:17:50.280 --> 0:17:53.400 done a research because I've read it. The data this 0:17:53.440 --> 0:17:56.240 morning you called it noise and not signal. What was 0:17:56.280 --> 0:17:58.600 the experience of the tariffs in the first term under 0:17:58.600 --> 0:18:01.480 this president and the timing of the sequencing of things, 0:18:01.520 --> 0:18:03.959 the hits inflation then the hits of growth, and why 0:18:04.000 --> 0:18:05.320 should we think it's going to be the same this 0:18:05.359 --> 0:18:05.800 time around. 0:18:06.119 --> 0:18:07.960 Yeah, I mean, I think that's what that was. What's 0:18:08.000 --> 0:18:10.639 really tricky is it does seem like the inflation comes 0:18:10.680 --> 0:18:12.680 from the tariffs after two or three months, the hit 0:18:12.720 --> 0:18:15.240 to growth comes after two or three quarters, and so 0:18:15.400 --> 0:18:18.680 that mismatch in timing I think makes it hard for markets, 0:18:18.720 --> 0:18:21.879 but very hard in particular for the FED. I think 0:18:21.960 --> 0:18:24.879 in twenty eighteen, one of the big changes then versus 0:18:25.000 --> 0:18:28.320 now is that it was mostly focused on China. If 0:18:28.320 --> 0:18:31.119 you look hard in the core consumer goods data, you 0:18:31.160 --> 0:18:34.320 can see the effect of inflation, but it was transitory. 0:18:34.359 --> 0:18:37.440 Then we have every reason to suspect it'll be temporary 0:18:37.480 --> 0:18:40.200 this time. But the numbers are bigger now. All around 0:18:40.200 --> 0:18:43.840 the world tariffs, bigger tariffs on China, Modlo, whatever sort 0:18:43.840 --> 0:18:46.720 of deal comes out from London, and so we think 0:18:46.720 --> 0:18:49.600 there's a big difference there also mudding the waters though 0:18:49.600 --> 0:18:52.560 we know how much front running there was before the 0:18:52.560 --> 0:18:54.720 tariffs coming in, So is that going to change a 0:18:54.760 --> 0:18:57.199 little bit the pricing dynamic easily could do? 0:18:57.400 --> 0:18:59.760 Greg, would you fight any excitement this morning around this 0:18:59.760 --> 0:19:00.240