1 00:00:00,840 --> 00:00:04,000 Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 2 00:00:04,080 --> 00:00:05,280 Speaker 1: my co host Matt Miller. 3 00:00:05,640 --> 00:00:09,600 Speaker 2: Every business day, we bring you interviews from CEOs, market pros, 4 00:00:09,720 --> 00:00:13,600 Speaker 2: and Bloomberg experts, along with essential market moving news. 5 00:00:14,160 --> 00:00:17,279 Speaker 1: Find the Bloomberg Markets Podcast on Apple Podcasts or wherever 6 00:00:17,400 --> 00:00:20,520 Speaker 1: you listen to podcasts, and at Bloomberg dot com slash podcast. 7 00:00:21,640 --> 00:00:24,000 Speaker 1: June fourteenth, which for me is Flag Day, but for 8 00:00:24,079 --> 00:00:27,360 Speaker 1: some other people it is FED Day. We're gonna hear 9 00:00:27,360 --> 00:00:30,080 Speaker 1: from the Fed June fourteenth to get their latest thinking 10 00:00:30,120 --> 00:00:32,400 Speaker 1: on interest rates. I want to bring in Ira Jersey 11 00:00:32,400 --> 00:00:34,400 Speaker 1: because he actually does this stuff for a living. We 12 00:00:34,440 --> 00:00:37,160 Speaker 1: actually pay him for this. Ira Jersey, chief US indust 13 00:00:37,200 --> 00:00:40,960 Speaker 1: rate strategist for Bloomberg Intelligence. So, Ira, I guess you 14 00:00:40,960 --> 00:00:42,440 Speaker 1: know kind of the new term that I heard here 15 00:00:42,520 --> 00:00:45,159 Speaker 1: is is skip. Are they going to skip a rate 16 00:00:45,280 --> 00:00:47,280 Speaker 1: increase here? Then maybe kind of re evaluate? 17 00:00:47,320 --> 00:00:47,680 Speaker 3: Maybe? 18 00:00:47,760 --> 00:00:50,720 Speaker 4: Yeah, Yeah, I think I think they will skip. I 19 00:00:50,840 --> 00:00:53,560 Speaker 4: wouldn't be surprised if the skip turned into a proper pause. 20 00:00:54,080 --> 00:00:57,720 Speaker 4: But there certainly are a number of people who are 21 00:00:57,720 --> 00:01:01,400 Speaker 4: thinking that perhaps the Federal Reserve, if they do skip, 22 00:01:01,440 --> 00:01:04,759 Speaker 4: could potentially hike again in July and that's not out 23 00:01:04,800 --> 00:01:07,039 Speaker 4: of the question, but I think that the hurdle just 24 00:01:07,080 --> 00:01:09,959 Speaker 4: gets a little bit higher and it gets more difficult 25 00:01:10,000 --> 00:01:13,320 Speaker 4: to get over that hump, particularly if we wind up 26 00:01:13,319 --> 00:01:17,640 Speaker 4: seeing economic data, right, real economic data start to slip 27 00:01:17,640 --> 00:01:19,240 Speaker 4: as much as it is. And in fact, if you 28 00:01:19,280 --> 00:01:22,640 Speaker 4: look at things like the ISM data that we've recently received, 29 00:01:22,880 --> 00:01:25,920 Speaker 4: you know that's already in and near recessionary territories, if 30 00:01:26,000 --> 00:01:26,640 Speaker 4: not actually in it. 31 00:01:27,040 --> 00:01:29,560 Speaker 5: Iira, I have to get your thoughts on this debate 32 00:01:29,640 --> 00:01:33,480 Speaker 5: over the Treasury's flood of bill issueings is basically being 33 00:01:33,520 --> 00:01:36,080 Speaker 5: the latest test for banks kind of break it down 34 00:01:36,240 --> 00:01:38,200 Speaker 5: for us as far as what the issues are there 35 00:01:38,440 --> 00:01:40,480 Speaker 5: and what that could potentially mean for any sort of 36 00:01:40,560 --> 00:01:42,199 Speaker 5: volatility that we could see in the bomb market. 37 00:01:43,319 --> 00:01:45,959 Speaker 4: Yeah, so I don't think it's a debate. There will be, 38 00:01:46,319 --> 00:01:48,760 Speaker 4: and we'll get an announcement actually just in about forty 39 00:01:48,800 --> 00:01:52,760 Speaker 4: five minutes for what the Treasury Department is going to 40 00:01:52,760 --> 00:01:55,600 Speaker 4: be issuing in terms of four to eight and four 41 00:01:55,640 --> 00:01:59,720 Speaker 4: months bills that they're going to auction on Thursday. They 42 00:01:59,760 --> 00:02:02,520 Speaker 4: have to increase the sizes to rebuild the cash balance 43 00:02:02,600 --> 00:02:05,840 Speaker 4: in the Treasury General Account, which is the checking account 44 00:02:05,880 --> 00:02:09,160 Speaker 4: that the Fed keeps for on behalf of the government. 45 00:02:09,840 --> 00:02:12,239 Speaker 4: And what happens is when when the Treasury General account 46 00:02:12,280 --> 00:02:15,239 Speaker 4: goes up, then other liabilities at the FED need to 47 00:02:15,280 --> 00:02:18,680 Speaker 4: go down, and that's either bank reserves, so deposits come 48 00:02:18,720 --> 00:02:22,280 Speaker 4: out of the system, and that means that bank reserves 49 00:02:22,320 --> 00:02:25,840 Speaker 4: go down, or money market mutual funds, if they purchase 50 00:02:25,919 --> 00:02:31,120 Speaker 4: the T bills, might instead not use the reverse repo 51 00:02:31,200 --> 00:02:34,000 Speaker 4: facility that's been used quite frequently to the tune of 52 00:02:34,000 --> 00:02:36,760 Speaker 4: two point two trillion dollars by money market mutual funds 53 00:02:37,480 --> 00:02:40,120 Speaker 4: might move those So if money market mutual funds at 54 00:02:40,120 --> 00:02:42,040 Speaker 4: the primary buyer of these tea bills, it's really not 55 00:02:42,080 --> 00:02:45,720 Speaker 4: an issue. But I suspect that upwards of seventy percent 56 00:02:45,919 --> 00:02:48,280 Speaker 4: of the T bills are going to be are going 57 00:02:48,320 --> 00:02:51,400 Speaker 4: to be purchased for cash, and that means that bank 58 00:02:51,440 --> 00:02:53,840 Speaker 4: reserves are going to go down. It means bank deposits 59 00:02:53,880 --> 00:02:56,560 Speaker 4: go down, and it could see some depositively. Now the 60 00:02:56,639 --> 00:03:01,840 Speaker 4: question is there's a distributional issue here where most of 61 00:03:01,880 --> 00:03:04,200 Speaker 4: the depositive outflow is probably not going to be in 62 00:03:04,240 --> 00:03:07,239 Speaker 4: the medium and smaller banks that were the problem back 63 00:03:07,280 --> 00:03:09,600 Speaker 4: in March. I think it comes out of more of 64 00:03:09,600 --> 00:03:12,120 Speaker 4: the bulge bracket firms that already have a lot of reserves, 65 00:03:12,160 --> 00:03:15,240 Speaker 4: so probably won't be as systemically of a problem at 66 00:03:15,320 --> 00:03:19,360 Speaker 4: least not initially. Now by year end that might change 67 00:03:19,440 --> 00:03:21,360 Speaker 4: quite a lot. We're working on that now. We'll have 68 00:03:21,400 --> 00:03:24,720 Speaker 4: a no doubt tomorrow morning looking at the reserve requirements 69 00:03:24,720 --> 00:03:26,840 Speaker 4: and how low they can get in how quickly. But 70 00:03:26,919 --> 00:03:29,120 Speaker 4: I don't think it's a June July issue. Could be 71 00:03:29,160 --> 00:03:31,600 Speaker 4: something for later in the third quarter or before year 72 00:03:31,680 --> 00:03:32,200 Speaker 4: end for sure. 73 00:03:32,919 --> 00:03:35,480 Speaker 1: So all right, this is really get into the plumbing. 74 00:03:35,480 --> 00:03:39,360 Speaker 1: But in terms of buying US security share, when they 75 00:03:39,400 --> 00:03:43,400 Speaker 1: come to auction, international buyers, are they there, how big 76 00:03:43,440 --> 00:03:45,520 Speaker 1: are they and who are they? 77 00:03:45,200 --> 00:03:48,480 Speaker 4: So foreigners typically don't buy a whole lot of tea bills. 78 00:03:48,520 --> 00:03:52,280 Speaker 4: Actually the central banks buy a few, but the primary 79 00:03:52,320 --> 00:03:56,000 Speaker 4: buyer are domestic investment funds that means money market mutual funds. 80 00:03:56,000 --> 00:03:59,400 Speaker 4: So you know it used to be when and where 81 00:03:59,440 --> 00:04:02,200 Speaker 4: this comes from is I don't want to say it's old, 82 00:04:02,280 --> 00:04:06,480 Speaker 4: but prior to the global financial crisis, when the US 83 00:04:06,480 --> 00:04:09,240 Speaker 4: had twin deficits, there was a lot of buying of 84 00:04:09,480 --> 00:04:12,840 Speaker 4: US treasury securities, both at auction and outside of auction 85 00:04:13,280 --> 00:04:17,039 Speaker 4: by foreign central banks in particular, that's actually stopped. Most 86 00:04:17,080 --> 00:04:20,480 Speaker 4: people still think that, you know, foreigners or massive buyers. 87 00:04:21,040 --> 00:04:24,960 Speaker 4: Foreigners have not increased their holdings of US treasury securities 88 00:04:25,000 --> 00:04:29,320 Speaker 4: significantly central banks over the last six seven years. Who 89 00:04:29,400 --> 00:04:32,680 Speaker 4: has been buying there are private investors. And private investors 90 00:04:32,720 --> 00:04:36,400 Speaker 4: typically don't buy tea bills. They buy longer term treasury securities, 91 00:04:36,440 --> 00:04:39,719 Speaker 4: you know, thirty years for pension funds and investment and 92 00:04:40,040 --> 00:04:43,599 Speaker 4: insurance companies, or they just buy for their portfolio because 93 00:04:44,040 --> 00:04:46,080 Speaker 4: interest rates in the US are still higher than they 94 00:04:46,080 --> 00:04:47,560 Speaker 4: are in a lot of other jurisdictions. 95 00:04:48,080 --> 00:04:48,520 Speaker 3: And IIRA. 96 00:04:48,920 --> 00:04:51,680 Speaker 5: We have a story on the terminal from Liz McCormick, 97 00:04:51,760 --> 00:04:54,359 Speaker 5: Michael McKinsey, and Craig trur Is talking about how bond 98 00:04:54,360 --> 00:04:56,800 Speaker 5: bulls are betting that the FED is right in anticipating 99 00:04:56,839 --> 00:04:59,760 Speaker 5: low rates to return. In Fed official's long run neutral 100 00:05:00,200 --> 00:05:03,200 Speaker 5: median forecast looking at that is around two and a 101 00:05:03,279 --> 00:05:05,279 Speaker 5: half percent. Do you think that's accurate? 102 00:05:06,720 --> 00:05:11,320 Speaker 4: So I actually think that ultimately the floor that when 103 00:05:11,320 --> 00:05:13,280 Speaker 4: the Federal Reserve starts to cut will actually be below 104 00:05:13,320 --> 00:05:15,440 Speaker 4: two and a half percent. I think that they'll wind 105 00:05:15,520 --> 00:05:18,720 Speaker 4: up cutting probably closer to two. Of course, you're talking 106 00:05:18,720 --> 00:05:20,520 Speaker 4: about twenty twenty five or twenty twenty six, it was 107 00:05:20,560 --> 00:05:23,680 Speaker 4: still a long ways off from that. You know, where 108 00:05:23,680 --> 00:05:26,599 Speaker 4: I think the market is probably a little bit a 109 00:05:26,600 --> 00:05:29,640 Speaker 4: little bit wrong is that the market seems to think 110 00:05:29,680 --> 00:05:31,800 Speaker 4: that the Federal Reserve, there's a good chance that the 111 00:05:31,839 --> 00:05:33,800 Speaker 4: Federal Reserve is going to start cutting interest rates this 112 00:05:33,920 --> 00:05:36,680 Speaker 4: year and January of next year. I suspect that the 113 00:05:36,720 --> 00:05:39,360 Speaker 4: Federal Reserve will wind up raining on hold a bit longer, 114 00:05:39,400 --> 00:05:42,080 Speaker 4: so regardless of what they do kind of this month 115 00:05:42,080 --> 00:05:44,680 Speaker 4: and next month, that once they get to the peak, 116 00:05:44,760 --> 00:05:46,800 Speaker 4: that they'll be on hold for the better part of 117 00:05:46,839 --> 00:05:49,720 Speaker 4: the year, maybe more than a year. But once they 118 00:05:49,720 --> 00:05:51,600 Speaker 4: start to cut, they're going to cut aggressively. They're not 119 00:05:51,640 --> 00:05:53,560 Speaker 4: going to cut in twenty five base point increments once 120 00:05:53,600 --> 00:05:56,120 Speaker 4: a quarter like some people are thinking. I think that 121 00:05:56,160 --> 00:05:58,480 Speaker 4: they cut fifty basis points, you know, every meeting for 122 00:05:59,360 --> 00:06:01,560 Speaker 4: four or five meterets, and then they wind up cutting 123 00:06:01,560 --> 00:06:03,760 Speaker 4: interest rates down towards two percent. So two and a 124 00:06:03,800 --> 00:06:07,279 Speaker 4: half is not outside the range of possibility. But I 125 00:06:07,320 --> 00:06:09,960 Speaker 4: do think that there's a floor probably two is percent, 126 00:06:10,080 --> 00:06:12,400 Speaker 4: and hopefully we don't go below that, because if we 127 00:06:12,440 --> 00:06:14,719 Speaker 4: go below that, that means we have disinflation again, and 128 00:06:14,760 --> 00:06:19,040 Speaker 4: it seems like that's not likely given the demographic and 129 00:06:19,640 --> 00:06:23,520 Speaker 4: economic dynamics that have developed since the COVID pandemic. 130 00:06:24,000 --> 00:06:25,719 Speaker 3: All right, Ira, thank you so much. We appreciate that. 131 00:06:25,760 --> 00:06:29,240 Speaker 1: Ira Jersey, Chief US Interest rate Strategist for Bloomberg Intelligence. 132 00:06:30,640 --> 00:06:34,080 Speaker 6: You're listening to the team. Can's are live program Bloomberg 133 00:06:34,120 --> 00:06:37,480 Speaker 6: Markets weekdays at ten am Eastern on Bloomberg dot com, 134 00:06:37,560 --> 00:06:40,720 Speaker 6: the iHeartRadio app, and the Bloomberg Business App, or listen 135 00:06:40,760 --> 00:06:42,880 Speaker 6: on demand wherever you get your podcasts. 136 00:06:45,240 --> 00:06:47,760 Speaker 1: All swinging down here in Orlando, Florida the b and 137 00:06:47,920 --> 00:06:51,479 Speaker 1: Y Insight Purshing Insight twenty twenty three conference where they 138 00:06:51,520 --> 00:06:55,200 Speaker 1: got about two thousand and their financial clients down here. 139 00:06:55,240 --> 00:06:57,840 Speaker 1: I'm talking about all things on financial services. So some 140 00:06:57,839 --> 00:07:00,760 Speaker 1: good stuff down here, Jess. You can spend thirty five 141 00:07:00,800 --> 00:07:05,200 Speaker 1: hundred bucks for I don't know vr Apple thing Mejig, I. 142 00:07:05,120 --> 00:07:07,239 Speaker 5: Don't think so. I think I'm gonna have to pass 143 00:07:07,279 --> 00:07:11,120 Speaker 5: on that one since it's a more than my rent. 144 00:07:11,360 --> 00:07:11,880 Speaker 3: Exactly. 145 00:07:11,960 --> 00:07:14,080 Speaker 1: I know, I don't know what they're doing, but let's 146 00:07:14,160 --> 00:07:16,559 Speaker 1: let's roundtable this with a couple of smart people who 147 00:07:17,000 --> 00:07:20,240 Speaker 1: know the text base. No Apple know this whole metaverse thing. 148 00:07:20,520 --> 00:07:23,960 Speaker 1: Anurag Rana and Mandeep Sing their senior tech analysts for 149 00:07:24,120 --> 00:07:25,400 Speaker 1: Bloomberg Intelligence. 150 00:07:27,240 --> 00:07:30,200 Speaker 3: Let's go on. Let's start with you. You cover Apple. 151 00:07:29,960 --> 00:07:33,680 Speaker 1: And as does Mandi. But what are they thinking with 152 00:07:33,760 --> 00:07:38,040 Speaker 1: this thirty four and ninety nine dollars price point. 153 00:07:39,440 --> 00:07:41,160 Speaker 7: See Paul from our site. They're going to try to 154 00:07:41,200 --> 00:07:45,080 Speaker 7: create an ecosystem of a new applications, new way of computing. 155 00:07:45,960 --> 00:07:49,840 Speaker 7: This is a completely different ecosystem that they're currently the 156 00:07:49,840 --> 00:07:52,440 Speaker 7: one that they have with the you know, the iPad, 157 00:07:52,560 --> 00:07:56,840 Speaker 7: the iPhone, the air pods. So it is a first 158 00:07:56,840 --> 00:08:00,560 Speaker 7: step in it. They really need develop us to build 159 00:08:00,600 --> 00:08:04,400 Speaker 7: applications on it. We need new content and frankly speaking, 160 00:08:04,440 --> 00:08:06,640 Speaker 7: that's really the game here. This is not It is 161 00:08:06,680 --> 00:08:09,240 Speaker 7: going to take years to really build out, so we 162 00:08:09,280 --> 00:08:13,000 Speaker 7: don't expect any near time action, but we are fairly 163 00:08:13,040 --> 00:08:14,400 Speaker 7: optimistic in the long run. 164 00:08:14,720 --> 00:08:18,160 Speaker 5: Man deep, how do we square this away with Meta's headset? 165 00:08:18,480 --> 00:08:22,400 Speaker 8: So, actually, what Apple has done is really made it 166 00:08:22,520 --> 00:08:26,480 Speaker 8: hard for Meta to go anywhere with their hardware ambitions. 167 00:08:26,520 --> 00:08:29,760 Speaker 8: At least, I think what their demo showed was Apple 168 00:08:29,880 --> 00:08:33,200 Speaker 8: can build this much better than what Meta has done, 169 00:08:33,240 --> 00:08:35,920 Speaker 8: and just take aside the price point for a moment, 170 00:08:36,360 --> 00:08:39,200 Speaker 8: but clearly what they showed was something that I think 171 00:08:39,480 --> 00:08:42,600 Speaker 8: consumers may want, not at that price point. And for 172 00:08:42,760 --> 00:08:47,199 Speaker 8: Meta having invested billions of dollars in developing their own headset, 173 00:08:47,600 --> 00:08:50,640 Speaker 8: I mean it leaves them with very little room to 174 00:08:50,720 --> 00:08:53,040 Speaker 8: be the scale player, even though they have that eighty 175 00:08:53,080 --> 00:08:56,160 Speaker 8: percent share and they have a five hundred dollars headset. 176 00:08:56,240 --> 00:08:58,840 Speaker 8: I would be surprised if they continue to pour more 177 00:08:58,880 --> 00:09:02,199 Speaker 8: money because now that Apple has entered, they will lower 178 00:09:02,240 --> 00:09:04,920 Speaker 8: the price over time. And I think when it comes 179 00:09:04,960 --> 00:09:07,760 Speaker 8: to hardware, there's no other company that can build better 180 00:09:07,800 --> 00:09:08,800 Speaker 8: hardware than Apple. 181 00:09:09,080 --> 00:09:13,040 Speaker 1: So Mandy, what's you know, mister Zuckerberg to do here? 182 00:09:13,200 --> 00:09:15,800 Speaker 1: Is he content not to be in a hardware business? Again, 183 00:09:15,920 --> 00:09:17,920 Speaker 1: I don't think of hardware when I think of Meta. 184 00:09:18,600 --> 00:09:20,880 Speaker 1: But how would they play here just by sybody with 185 00:09:20,920 --> 00:09:22,679 Speaker 1: their applications with the metaverse? 186 00:09:23,000 --> 00:09:26,920 Speaker 8: Yes, And what Meta has done in the background is 187 00:09:26,920 --> 00:09:31,000 Speaker 8: they have invested heavily in AI and large language models, 188 00:09:31,040 --> 00:09:34,640 Speaker 8: and they could still you know, build applications for the metaverse. 189 00:09:35,120 --> 00:09:38,079 Speaker 8: I think they're better off trying to build it for 190 00:09:38,840 --> 00:09:41,440 Speaker 8: you know, all the devices out there. And I think, 191 00:09:41,520 --> 00:09:45,640 Speaker 8: going by what Apple has shown us they will be 192 00:09:45,960 --> 00:09:48,440 Speaker 8: one of the kind of the leaders when it comes 193 00:09:48,480 --> 00:09:52,880 Speaker 8: to the adoption for VR AR mixed reality headset. So 194 00:09:53,240 --> 00:09:56,320 Speaker 8: what Meta probably will eventually end up doing is they 195 00:09:56,360 --> 00:09:59,640 Speaker 8: will develop applications. They'll use whatever they have built on 196 00:09:59,679 --> 00:10:03,959 Speaker 8: the A side to be compatible with Apple, and that 197 00:10:04,040 --> 00:10:07,200 Speaker 8: may be a better approach than trying to develop their 198 00:10:07,240 --> 00:10:08,600 Speaker 8: own ecosystem entirely. 199 00:10:08,840 --> 00:10:11,040 Speaker 5: Hey on Rock, I wanted to jump in and get 200 00:10:11,040 --> 00:10:14,079 Speaker 5: your take as far as what could be the potential 201 00:10:14,160 --> 00:10:18,000 Speaker 5: next catalyst for Apple stock. It's interesting because Morgan Stanley 202 00:10:18,040 --> 00:10:20,240 Speaker 5: is thinking they're actually looking to October for the next 203 00:10:20,280 --> 00:10:22,960 Speaker 5: catalyst when they expect to learn more about the headset volumes. 204 00:10:23,080 --> 00:10:24,280 Speaker 5: Do you think we'll have to wait that long? 205 00:10:25,720 --> 00:10:27,640 Speaker 7: I mean it could be even longer than that. If 206 00:10:27,960 --> 00:10:31,360 Speaker 7: the consumer spending starts to slow down, then iPhone fifteen 207 00:10:31,440 --> 00:10:33,920 Speaker 7: may not do exactly what all of us are hoping, 208 00:10:33,960 --> 00:10:36,640 Speaker 7: which is jumpstart the top line growth rate. You know, 209 00:10:36,720 --> 00:10:39,920 Speaker 7: and Paul and I have talked about this a lot, 210 00:10:40,000 --> 00:10:42,160 Speaker 7: that this is a company that's not going to go 211 00:10:42,559 --> 00:10:46,120 Speaker 7: top line above ten percent anytime soon. And that's because 212 00:10:46,160 --> 00:10:50,040 Speaker 7: the scale, the size, the penetration rate of iPhones. So 213 00:10:50,160 --> 00:10:52,120 Speaker 7: I think it's going to be a while before if 214 00:10:52,160 --> 00:10:54,959 Speaker 7: people are thinking this is going to grow double digits again, 215 00:10:55,240 --> 00:10:56,880 Speaker 7: you know, they may have to wait quite a bit 216 00:10:56,920 --> 00:10:57,280 Speaker 7: of time. 217 00:10:58,520 --> 00:11:00,439 Speaker 3: So, Man, Dave, what do we know now? 218 00:11:00,720 --> 00:11:04,200 Speaker 1: It's been I don't know, maybe a year since you know, 219 00:11:04,360 --> 00:11:05,920 Speaker 1: Meta kind of you know, more than a year when 220 00:11:05,920 --> 00:11:07,959 Speaker 1: they changed their name and they said we're going all 221 00:11:07,960 --> 00:11:10,439 Speaker 1: in on this metaverse and then they've kind of paired 222 00:11:10,440 --> 00:11:14,440 Speaker 1: back their investment ambitions maybe in that business. What's the 223 00:11:14,520 --> 00:11:18,120 Speaker 1: understanding on the street as to Meta's kind of next 224 00:11:18,200 --> 00:11:19,920 Speaker 1: one to two to three years in terms of investment, 225 00:11:19,960 --> 00:11:21,120 Speaker 1: in terms of how they'll evolve. 226 00:11:21,720 --> 00:11:24,480 Speaker 8: I mean, clearly they have you know, made a one 227 00:11:24,520 --> 00:11:27,640 Speaker 8: to ady degree turn this year compared to where they 228 00:11:27,640 --> 00:11:32,200 Speaker 8: were last year, and that has increased, you know, at 229 00:11:32,240 --> 00:11:35,959 Speaker 8: least expectations that they'll focus more on profitability. They will 230 00:11:36,080 --> 00:11:39,080 Speaker 8: not lose as much money as they were doing before 231 00:11:39,280 --> 00:11:40,920 Speaker 8: on reality labs. 232 00:11:41,320 --> 00:11:41,720 Speaker 5: Still. 233 00:11:41,840 --> 00:11:46,800 Speaker 8: I think they are investing on building data center capacity, 234 00:11:46,840 --> 00:11:51,760 Speaker 8: adding more applications that are metaverse oriented, and I think 235 00:11:51,840 --> 00:11:54,680 Speaker 8: the street is okay with that. It's just the hardware side, 236 00:11:55,000 --> 00:11:59,040 Speaker 8: which I think where they're losing money on every headset 237 00:11:59,080 --> 00:12:01,720 Speaker 8: that they're selling. That may not be a good strategy 238 00:12:01,760 --> 00:12:05,199 Speaker 8: because the more you scale, you know, it's a bigger 239 00:12:05,240 --> 00:12:08,360 Speaker 8: hole when it comes to your operating income. 240 00:12:09,080 --> 00:12:10,200 Speaker 9: An a rog have to get. 241 00:12:10,040 --> 00:12:13,840 Speaker 5: Your thoughts also when it comes to this fifteen inch 242 00:12:14,200 --> 00:12:17,760 Speaker 5: MacBook Air that's starting around thirteen hundred dollars. 243 00:12:19,160 --> 00:12:22,280 Speaker 7: Yeah, I'm actually looking forward to it. I'm a cheap guy, 244 00:12:22,320 --> 00:12:25,200 Speaker 7: but I think I'm going to go by that. I 245 00:12:25,280 --> 00:12:28,280 Speaker 7: love my MacBook Air. I've had it for I mean, 246 00:12:28,320 --> 00:12:31,520 Speaker 7: I think fifteen years, two different models in that tankgame, 247 00:12:31,559 --> 00:12:35,440 Speaker 7: and it's just a beautiful machine. I'm very optimistic in that. 248 00:12:35,559 --> 00:12:39,080 Speaker 7: But having said that, once again, mathematically as as a 249 00:12:39,120 --> 00:12:42,480 Speaker 7: company for Apple, it's not going to have a material 250 00:12:42,480 --> 00:12:45,080 Speaker 7: impact over the next twelve months, and that has to 251 00:12:45,080 --> 00:12:48,440 Speaker 7: do with very tough comparison the PC market in the slump. 252 00:12:48,840 --> 00:12:51,400 Speaker 7: But personally I'm very keen on that machine. 253 00:12:52,520 --> 00:12:54,960 Speaker 1: All right on rag Rana men deep seeing our senior 254 00:12:55,000 --> 00:12:58,120 Speaker 1: technology analyst from Bloomberg Intelligence helping us break down. You know, 255 00:12:58,120 --> 00:12:59,800 Speaker 1: it was a pretty big event yesterday for Apple with 256 00:12:59,840 --> 00:13:03,400 Speaker 1: this new virtual reality augmented reality device. 257 00:13:03,760 --> 00:13:07,400 Speaker 6: You're listening to the tape Kensur Live program Bloomberg Markets 258 00:13:07,440 --> 00:13:10,840 Speaker 6: weekdays at ten am Eastern on Bloomberg Radio, the tune 259 00:13:10,880 --> 00:13:13,840 Speaker 6: in app, Bloomberg dot Com, and the Bloomberg Business App. 260 00:13:13,880 --> 00:13:16,679 Speaker 6: You can also listen live on Amazon Alexa from our 261 00:13:16,720 --> 00:13:21,120 Speaker 6: flagship New York station, Just Say Alexa play Bloomberg eleven thirty. 262 00:13:23,080 --> 00:13:25,160 Speaker 3: So the big, big news coming out of Marshton and DC. 263 00:13:25,320 --> 00:13:28,480 Speaker 1: Secretary of State Anthony Blincoln plans to visit China in 264 00:13:28,520 --> 00:13:31,720 Speaker 1: the coming weeks for talks with top officials, possibly including 265 00:13:32,080 --> 00:13:35,480 Speaker 1: President Jijimping. People familiar with the matter said, as the 266 00:13:35,640 --> 00:13:39,720 Speaker 1: US looks to resume high level communication despite continued at tensions, 267 00:13:39,720 --> 00:13:41,120 Speaker 1: want to get the latest on that. We bring in 268 00:13:41,240 --> 00:13:44,920 Speaker 1: Justin Sinky covers the White House and DC for Bloomberg News. 269 00:13:45,480 --> 00:13:49,000 Speaker 3: Justin Big News. Give us your some sense of context here. 270 00:13:49,640 --> 00:13:52,640 Speaker 10: Yeah, well, you know, the relationship between the US and 271 00:13:52,679 --> 00:13:55,600 Speaker 10: China has been strained sort of multiple points over the 272 00:13:55,640 --> 00:13:59,800 Speaker 10: last you know, well lots of years, last decade, however 273 00:14:00,080 --> 00:14:02,839 Speaker 10: far back you want to go. But there had seemed 274 00:14:02,880 --> 00:14:05,680 Speaker 10: to be a sort of warming between President Biden and 275 00:14:06,360 --> 00:14:09,600 Speaker 10: President Juhn Ping of China at the sum in Bali 276 00:14:09,679 --> 00:14:12,680 Speaker 10: last fall. All of that was sort of thrown off 277 00:14:12,800 --> 00:14:16,120 Speaker 10: track when right ahead of the Secretary of Blncoln's planned 278 00:14:16,679 --> 00:14:21,280 Speaker 10: trip earlier this year to Beijing, the Chinese Bible balloon 279 00:14:21,320 --> 00:14:23,880 Speaker 10: flew over the US, so that led the State Department 280 00:14:23,920 --> 00:14:26,360 Speaker 10: to scrap the plans, and since then there's been a 281 00:14:26,400 --> 00:14:31,560 Speaker 10: real breakdown in sort of conversations between China and the US. 282 00:14:31,640 --> 00:14:34,760 Speaker 10: There's been a number of military drills recently where US 283 00:14:34,960 --> 00:14:39,720 Speaker 10: or Chinese aircraft and ships have buzzed in front of 284 00:14:40,160 --> 00:14:44,120 Speaker 10: US aircraft or ships, and so it seems like there 285 00:14:44,200 --> 00:14:47,560 Speaker 10: was a real tension and Secretary B. Lincoln headed back 286 00:14:47,600 --> 00:14:50,280 Speaker 10: to Beijing a signal that things may be warming and 287 00:14:50,600 --> 00:14:51,640 Speaker 10: getting back on track. 288 00:14:52,120 --> 00:14:54,440 Speaker 5: Justin, do we have a sense of the exact timing 289 00:14:54,680 --> 00:14:57,040 Speaker 5: of when his trip to Beijing could happen. 290 00:14:57,760 --> 00:15:01,320 Speaker 10: We expect in the next few weeks. The specific dates, 291 00:15:02,000 --> 00:15:03,880 Speaker 10: I'm not sure if they're locked in yet or they're 292 00:15:03,920 --> 00:15:05,920 Speaker 10: just not being shared yet. The State Department has said 293 00:15:05,960 --> 00:15:08,400 Speaker 10: that they don't have anything to announce officially yet. But 294 00:15:09,520 --> 00:15:12,920 Speaker 10: my colleagues Jenny Leonard and Marie Horton, who reported this 295 00:15:12,960 --> 00:15:15,680 Speaker 10: piece out, till fairly confidence this trip is not only happening, 296 00:15:15,680 --> 00:15:17,680 Speaker 10: but happening in the relatively near future. 297 00:15:18,200 --> 00:15:21,320 Speaker 1: And justin, I'm not sure how these things work here 298 00:15:21,360 --> 00:15:24,560 Speaker 1: when it comes to the diplomacy is typically a high 299 00:15:24,640 --> 00:15:27,400 Speaker 1: level visit by a Secretary of State, perhaps a precursor 300 00:15:27,440 --> 00:15:30,040 Speaker 1: for getting Present Biden president G together at some point. 301 00:15:30,760 --> 00:15:33,240 Speaker 10: Yeah, or at the very least, even President Biden has 302 00:15:33,240 --> 00:15:35,240 Speaker 10: said that he expects and hopes to talk to G 303 00:15:35,400 --> 00:15:39,240 Speaker 10: on the phone sometime soon. So there are a number 304 00:15:39,240 --> 00:15:44,360 Speaker 10: of you know, diplomatic forum again this fall or the 305 00:15:44,440 --> 00:15:47,240 Speaker 10: G twenty, it could again be an opportunity for them 306 00:15:47,240 --> 00:15:50,400 Speaker 10: to meet. But I would expect, you know, if this 307 00:15:50,440 --> 00:15:53,720 Speaker 10: meeting goes well, to two possible things to accomplish setting 308 00:15:53,800 --> 00:15:57,280 Speaker 10: up that phone call between Biden and G. And secondly, 309 00:15:57,320 --> 00:16:01,200 Speaker 10: the US is really pushed for real opening military to 310 00:16:01,280 --> 00:16:06,280 Speaker 10: military communication, which the Chinese cut off after former Speaker 311 00:16:06,280 --> 00:16:10,680 Speaker 10: Pelosi went to Taiwan late last year, and so I 312 00:16:10,720 --> 00:16:12,920 Speaker 10: think that was the goal of the original Blinking trip. 313 00:16:13,000 --> 00:16:15,360 Speaker 10: Then the spy balloon happened, and so there's a hope 314 00:16:15,360 --> 00:16:18,440 Speaker 10: that that can kind of kickstart if things go well. 315 00:16:18,480 --> 00:16:21,600 Speaker 10: When Secretary Blanking Ghostavision. 316 00:16:21,600 --> 00:16:25,160 Speaker 5: Justin talk to us about what this visit would essentially mean. 317 00:16:25,200 --> 00:16:28,240 Speaker 5: When we're putting this in context to Presidents Biden's efforts 318 00:16:28,280 --> 00:16:31,280 Speaker 5: to really try to restore some normalcy to the relationship here. 319 00:16:32,080 --> 00:16:37,000 Speaker 10: Yeah, I mean there Not only did Speaker Pelosi's trip 320 00:16:37,080 --> 00:16:39,720 Speaker 10: really kind of strain re license, but there have been 321 00:16:39,720 --> 00:16:41,880 Speaker 10: a number of pressure points over the last few years. 322 00:16:42,800 --> 00:16:49,800 Speaker 10: Obviously China's reaction to Russia's invasion of Ukraine, the Biden 323 00:16:49,840 --> 00:16:52,920 Speaker 10: administration has been mostly happy with, but has wanted to 324 00:16:52,960 --> 00:16:58,320 Speaker 10: push for kind of a stronger breaking of ties between 325 00:16:58,400 --> 00:17:02,640 Speaker 10: Russia and China, the situation in Taiwan, the situation and 326 00:17:03,040 --> 00:17:07,760 Speaker 10: sort of the South Pacific in general, where China has 327 00:17:07,760 --> 00:17:10,840 Speaker 10: been increasingly assertive. And so you put all that into 328 00:17:10,840 --> 00:17:13,560 Speaker 10: the context, especially of trade, when you think about the 329 00:17:13,560 --> 00:17:21,120 Speaker 10: economy and efforts to sort of counter Chinese manufacturing influence 330 00:17:21,240 --> 00:17:24,040 Speaker 10: and post COVID, I think all of these are sort 331 00:17:24,040 --> 00:17:26,399 Speaker 10: of sore spots that there's a real hope than the 332 00:17:26,400 --> 00:17:29,840 Speaker 10: Biden administration that improved dialogue can help get past. 333 00:17:30,960 --> 00:17:33,760 Speaker 1: Hey justin you know, it's interesting we seem to sort 334 00:17:33,800 --> 00:17:36,800 Speaker 1: of past several weeks a lot of high profile US 335 00:17:36,960 --> 00:17:39,960 Speaker 1: executives heading over to China. Jamie Diamond was there for 336 00:17:40,000 --> 00:17:43,080 Speaker 1: big a Jpmorton conference. Elon Musk was there, Tim Cook 337 00:17:43,119 --> 00:17:46,960 Speaker 1: from Apple. It feels like maybe the government officials are 338 00:17:47,040 --> 00:17:49,520 Speaker 1: kind of behind a little bit of the private sector. 339 00:17:49,840 --> 00:17:52,280 Speaker 1: What's the feeling with in DC about what we should 340 00:17:52,280 --> 00:17:53,000 Speaker 1: be doing in China? 341 00:17:53,720 --> 00:17:57,000 Speaker 10: Yeah, I think that there is. There are sort of 342 00:17:57,440 --> 00:18:00,920 Speaker 10: countervailing winds. Right on the one hand, I think there 343 00:18:00,920 --> 00:18:03,439 Speaker 10: is a sense among many that they are trying to 344 00:18:03,480 --> 00:18:06,000 Speaker 10: repair this relationship to at least make it more functional 345 00:18:06,080 --> 00:18:11,440 Speaker 10: than it's been, particularly because you're seeing these military maneuvers 346 00:18:11,560 --> 00:18:15,439 Speaker 10: or communication breakdowns, that there's a real concern that it 347 00:18:15,480 --> 00:18:19,920 Speaker 10: could bleed inadvertently to something bad happening. At the same time, 348 00:18:20,000 --> 00:18:23,240 Speaker 10: we're about to have a presidential election in twenty twenty 349 00:18:23,240 --> 00:18:26,199 Speaker 10: four where the issue of China is certain to be central. 350 00:18:26,640 --> 00:18:29,439 Speaker 10: Former President Donald Trump obviously made that a sort of 351 00:18:29,440 --> 00:18:33,320 Speaker 10: signature campaign issue and has talked a lot about being 352 00:18:33,359 --> 00:18:35,920 Speaker 10: tough on China as part of his push back into 353 00:18:35,920 --> 00:18:40,560 Speaker 10: the Republican primary. It's something that the Biden administration has 354 00:18:40,560 --> 00:18:44,879 Speaker 10: tried to counter by big government programs to return manufacturing 355 00:18:44,880 --> 00:18:47,560 Speaker 10: back to the United States. And so it's one of 356 00:18:47,600 --> 00:18:49,919 Speaker 10: those tricky things where I think if you talk to 357 00:18:50,280 --> 00:18:53,760 Speaker 10: people about is it good for business to improve those ties, 358 00:18:53,800 --> 00:18:56,320 Speaker 10: they'll say yes, Is it good for politics to improve 359 00:18:56,359 --> 00:18:57,159 Speaker 10: those ties? Maybe no. 360 00:18:58,480 --> 00:19:00,720 Speaker 3: I just think thank thank you so much for joining us. 361 00:19:00,800 --> 00:19:04,000 Speaker 1: Really appreciated getting the latest air Secretary of State Blincoln 362 00:19:04,240 --> 00:19:06,600 Speaker 1: announcing that he intends to travel to China in the 363 00:19:06,640 --> 00:19:09,800 Speaker 1: near future, so presumably that is good news. 364 00:19:11,080 --> 00:19:14,520 Speaker 6: You're listening to the team Ken's are Live program Bloomberg 365 00:19:14,560 --> 00:19:17,919 Speaker 6: Markets weekdays at ten am Eastern on Bloomberg dot Com, 366 00:19:18,000 --> 00:19:21,160 Speaker 6: the iHeartRadio app, and the Bloomberg Business App, or listen 367 00:19:21,240 --> 00:19:23,320 Speaker 6: on demand wherever you get your podcasts. 368 00:19:25,520 --> 00:19:27,640 Speaker 1: Let's get a breakdown what's happening with the markets. Billy 369 00:19:27,680 --> 00:19:30,720 Speaker 1: Lipschaltzy covers the Markets force. He joins us in a 370 00:19:30,760 --> 00:19:34,199 Speaker 1: Bloomberg Inactive broker studio, as does Scarlet Food TV anchor 371 00:19:34,240 --> 00:19:39,359 Speaker 1: for Bloomberg Television business sports host as well. So Bailly 372 00:19:39,440 --> 00:19:41,639 Speaker 1: gave us kind of the movements in the golf stocks. 373 00:19:41,720 --> 00:19:44,280 Speaker 1: Let's go to Scarlett right away here. I mean, this 374 00:19:44,320 --> 00:19:45,000 Speaker 1: news shocked me. 375 00:19:45,200 --> 00:19:48,160 Speaker 3: Scarlett. I'm a golfer, I follow the business, I follow 376 00:19:48,200 --> 00:19:50,480 Speaker 3: the sport of it. I was shocked at this happened. 377 00:19:50,680 --> 00:19:53,960 Speaker 11: Totally shocked. Given that the two had really dug in 378 00:19:54,000 --> 00:19:56,760 Speaker 11: the two sides live golf and the PGA Tour, there 379 00:19:56,840 --> 00:20:00,400 Speaker 11: was a lot of charges flung against each other, suits 380 00:20:00,440 --> 00:20:03,000 Speaker 11: between the two. The DOJ got involved because it was 381 00:20:03,040 --> 00:20:07,080 Speaker 11: also looking into the PGA for monopolistic antitrust type of behavior. 382 00:20:07,320 --> 00:20:09,080 Speaker 11: And then all of a sudden, you have them declaring 383 00:20:09,080 --> 00:20:12,719 Speaker 11: a truce in what really was a civil war in golf. 384 00:20:13,600 --> 00:20:17,520 Speaker 11: So who caved It's not clear, but I guess if 385 00:20:18,480 --> 00:20:23,320 Speaker 11: the PGA Tour has admitted, basically conceded that live has 386 00:20:23,720 --> 00:20:26,240 Speaker 11: a role to play, my guess is PGA Tour did. 387 00:20:27,080 --> 00:20:27,920 Speaker 3: Yeah, that's exactically. 388 00:20:28,000 --> 00:20:28,359 Speaker 9: Well. 389 00:20:28,440 --> 00:20:30,320 Speaker 1: You know, it's interesting if you look at the Bloomberg 390 00:20:30,440 --> 00:20:35,359 Speaker 1: news story, the headline is PGA bows and so I 391 00:20:35,359 --> 00:20:38,159 Speaker 1: immediately emailed the editor, which you can do because all 392 00:20:38,200 --> 00:20:40,760 Speaker 1: the contact information to the bottom of every Bloomberg story helpful. 393 00:20:40,880 --> 00:20:43,000 Speaker 1: And I said, I said, really, because I didn't. I 394 00:20:43,040 --> 00:20:46,000 Speaker 1: don't think that, not knowing anything about this deal, but 395 00:20:46,080 --> 00:20:48,800 Speaker 1: I thought pg had by far the upper hand here. 396 00:20:49,160 --> 00:20:52,080 Speaker 1: Nobody cared about Live Golf, nobody watched it, nobody went 397 00:20:52,160 --> 00:20:54,760 Speaker 1: to the events relative to a PGA event. Yes, they 398 00:20:54,800 --> 00:20:57,080 Speaker 1: had the money, and that's I guess the big issue. 399 00:20:57,200 --> 00:20:59,920 Speaker 11: Yes, they had an investor with bottomless pockets, which was 400 00:21:00,040 --> 00:21:03,119 Speaker 11: basically the Sovereign Wealth Fund of Saudi Arabia, and my 401 00:21:03,240 --> 00:21:06,240 Speaker 11: understanding is the reporting shows that they've already made a 402 00:21:06,240 --> 00:21:08,560 Speaker 11: two billion dollar investment in Live, and they were prepared 403 00:21:08,600 --> 00:21:11,560 Speaker 11: to spend more on it in the years to come. 404 00:21:11,680 --> 00:21:14,280 Speaker 11: The problem with Live was that they didn't have a 405 00:21:14,480 --> 00:21:18,400 Speaker 11: US broadcast partnership, right, They didn't have media rights, So 406 00:21:18,480 --> 00:21:20,080 Speaker 11: the only way you could watch live golf is to 407 00:21:20,080 --> 00:21:23,760 Speaker 11: go in person, and it was hosted at two Donald 408 00:21:23,760 --> 00:21:26,280 Speaker 11: Trump owned golf courses here in the US, along with 409 00:21:26,359 --> 00:21:29,840 Speaker 11: other places overseas, or you could watch it on YouTube, 410 00:21:29,880 --> 00:21:33,720 Speaker 11: streamed on YouTube, or on Live goolf website itself. Unlike 411 00:21:34,359 --> 00:21:39,080 Speaker 11: PGA Tour tournaments, which are available on what, NBC, CBS, ESPN, 412 00:21:39,400 --> 00:21:41,120 Speaker 11: and Living else. 413 00:21:41,200 --> 00:21:43,520 Speaker 1: Live does have a TV deal with the CW Network, 414 00:21:43,520 --> 00:21:46,560 Speaker 1: which is a bunch of independently own you know, broadcast 415 00:21:46,560 --> 00:21:48,359 Speaker 1: stations that are carried on cable. 416 00:21:48,440 --> 00:21:49,200 Speaker 11: Right, that's a good point. 417 00:21:49,280 --> 00:21:51,200 Speaker 1: Yes, so they do have some distribution there, but it's 418 00:21:51,200 --> 00:21:53,240 Speaker 1: just not nearly and they don't have near the sponsorship 419 00:21:53,320 --> 00:21:55,960 Speaker 1: or near any of the prestige. So I'm just shocked 420 00:21:56,000 --> 00:21:57,560 Speaker 1: at this announcement, and I can't wait to really get 421 00:21:57,600 --> 00:21:59,719 Speaker 1: the full reporting here, because this is the last thing 422 00:21:59,800 --> 00:22:00,399 Speaker 1: I know. 423 00:22:00,440 --> 00:22:02,159 Speaker 11: I can't wait to get the TikTok on this, and 424 00:22:02,200 --> 00:22:04,640 Speaker 11: of course this split the world of golf players too, 425 00:22:04,720 --> 00:22:07,280 Speaker 11: right because Live Golf was really led by the former 426 00:22:07,280 --> 00:22:09,639 Speaker 11: golf star Greg Norman, and they poached a lot of 427 00:22:09,640 --> 00:22:12,879 Speaker 11: the best players, whether it's Phil Mickelson or Dustin Johnson, 428 00:22:12,920 --> 00:22:13,840 Speaker 11: Cameron Spait. 429 00:22:13,680 --> 00:22:15,400 Speaker 3: Past their prime, all past their prime. 430 00:22:15,280 --> 00:22:17,720 Speaker 11: All past their prime, but big names nonetheless, And the 431 00:22:17,800 --> 00:22:21,240 Speaker 11: difference was that they got paid these multi year contracts, 432 00:22:21,640 --> 00:22:24,120 Speaker 11: large upfront payments. So one big question is what does 433 00:22:24,160 --> 00:22:26,560 Speaker 11: this mean in terms of their splashy contracts. Will they 434 00:22:26,680 --> 00:22:28,760 Speaker 11: continue to get paid out for this year their second year? 435 00:22:28,760 --> 00:22:30,359 Speaker 1: I don't know. Well, what does it mean for all 436 00:22:30,359 --> 00:22:34,840 Speaker 1: the people who were not supporting the Live Tour because 437 00:22:34,880 --> 00:22:37,640 Speaker 1: of its involvement with Saudi Arabia. Now Saudi Arabia's would 438 00:22:37,640 --> 00:22:40,960 Speaker 1: be even more involved of what is left of professional golf. 439 00:22:41,000 --> 00:22:43,680 Speaker 1: I wonder how that's going to play with large parts 440 00:22:43,680 --> 00:22:43,920 Speaker 1: of them. 441 00:22:43,960 --> 00:22:45,800 Speaker 11: I don't know, my guess as money speaks, so in 442 00:22:45,840 --> 00:22:48,520 Speaker 11: the end it will work itself out. I mean, there 443 00:22:48,560 --> 00:22:51,000 Speaker 11: are a lot of uncomfortable press conferences with the players 444 00:22:51,040 --> 00:22:54,520 Speaker 11: that did sign on with Live Golf, or asking golf 445 00:22:54,520 --> 00:22:56,440 Speaker 11: players in general whether they would ever sign on would 446 00:22:56,440 --> 00:22:58,159 Speaker 11: live golf. They just didn't want to go there and 447 00:22:58,200 --> 00:23:01,920 Speaker 11: answer the difficult questions about sports washing and how Saudi 448 00:23:01,920 --> 00:23:05,480 Speaker 11: Arabia was using it its heft to get into sports 449 00:23:05,520 --> 00:23:08,639 Speaker 11: as a way to really accumulate soft power. 450 00:23:09,359 --> 00:23:11,679 Speaker 5: Bailey, you were walking us through some of the stock 451 00:23:11,760 --> 00:23:14,440 Speaker 5: moves here. What are some other beneficiaries like Top Golf 452 00:23:14,440 --> 00:23:15,440 Speaker 5: that are moving this morning? 453 00:23:15,880 --> 00:23:18,679 Speaker 12: It's really Top Golf, Callaway and a Kushna again, the 454 00:23:18,800 --> 00:23:22,080 Speaker 12: company that is the home of titleist Scottie Cameron Putters 455 00:23:22,080 --> 00:23:24,200 Speaker 12: and Footjoy that are rallying, both again up more than 456 00:23:24,200 --> 00:23:27,040 Speaker 12: five percent. But Scarlett, this is coming reading from a 457 00:23:27,080 --> 00:23:30,119 Speaker 12: note from Jeffrey saying that this unexpected agreement holds immense 458 00:23:30,160 --> 00:23:32,800 Speaker 12: potential to elevate the sport of golf to new heights. 459 00:23:32,920 --> 00:23:35,720 Speaker 12: Is that your expectation. Is this really a deal that 460 00:23:36,320 --> 00:23:38,439 Speaker 12: is going to be like the AFL and NFL merging 461 00:23:38,440 --> 00:23:40,240 Speaker 12: and all of a sudden everyone wants to grab their golf. 462 00:23:40,359 --> 00:23:42,360 Speaker 11: I guess it depends on whether the PGA is going 463 00:23:42,400 --> 00:23:44,480 Speaker 11: to change up its format or not. Because lif Golf 464 00:23:44,560 --> 00:23:47,240 Speaker 11: was very different from the PGA in that they didn't 465 00:23:47,240 --> 00:23:49,360 Speaker 11: have a thirty six hole cut, meaning no one goes 466 00:23:49,400 --> 00:23:51,600 Speaker 11: home after two rounds. They had team play, they had 467 00:23:51,640 --> 00:23:55,719 Speaker 11: shorter events, they had DJ's like the Chainsmokers performing at 468 00:23:55,720 --> 00:23:57,680 Speaker 11: their tournament. I mean, it was just a different feel 469 00:23:57,760 --> 00:23:59,920 Speaker 11: in general. It was a little hip or a little 470 00:24:00,600 --> 00:24:04,399 Speaker 11: so maybe with this merger, the PGA will change its 471 00:24:04,440 --> 00:24:07,040 Speaker 11: stripes a little bit and make it, I don't know, 472 00:24:07,400 --> 00:24:09,600 Speaker 11: make it more up to date. Because PJ was kind 473 00:24:09,640 --> 00:24:11,280 Speaker 11: of the home of you know, this is golf. We're 474 00:24:11,320 --> 00:24:13,200 Speaker 11: very traditional and this is how you follow the rules, 475 00:24:13,200 --> 00:24:14,840 Speaker 11: and this is what the way we've always done it. 476 00:24:14,880 --> 00:24:19,320 Speaker 11: And it wasn't exactly appealing to younger viewers except the 477 00:24:19,320 --> 00:24:24,680 Speaker 11: pandemic came along and really helped people rediscover golf. Does 478 00:24:24,680 --> 00:24:25,359 Speaker 11: this change it for you? 479 00:24:25,400 --> 00:24:25,879 Speaker 1: I mean, will you. 480 00:24:25,880 --> 00:24:28,000 Speaker 3: Watch the livie Well no, I mean here's the thing. 481 00:24:28,080 --> 00:24:31,280 Speaker 1: I mean, I consume this stuff big time, watch all 482 00:24:31,320 --> 00:24:33,320 Speaker 1: the golf all the you know, all the time. I 483 00:24:33,440 --> 00:24:36,360 Speaker 1: haven't watched any live For my personal reasons, I don't 484 00:24:36,359 --> 00:24:39,679 Speaker 1: support that tour. I have nothing against the players who 485 00:24:39,720 --> 00:24:41,679 Speaker 1: went there, because it's a great opportunity for them to 486 00:24:41,760 --> 00:24:44,120 Speaker 1: make way more money than they could on the PGA Tour, 487 00:24:44,359 --> 00:24:46,760 Speaker 1: So good for them. But you felt at some point 488 00:24:46,840 --> 00:24:48,080 Speaker 1: that for the game of golf. Yet they had to 489 00:24:48,200 --> 00:24:50,960 Speaker 1: have to get back together at some force in some way, 490 00:24:51,160 --> 00:24:52,640 Speaker 1: but I thought it would have been and I still 491 00:24:52,640 --> 00:24:54,800 Speaker 1: think it needs to be with the PGA Tour kind 492 00:24:54,800 --> 00:24:56,480 Speaker 1: of leading the way. So we'll have to get a 493 00:24:56,520 --> 00:24:58,480 Speaker 1: lot more reporting, and I guess you know, I love that. 494 00:24:58,560 --> 00:25:00,760 Speaker 1: I can't wait to see the prescott on this. 495 00:25:00,960 --> 00:25:03,040 Speaker 11: I know the kinds of questions that they'll be asking. 496 00:25:03,280 --> 00:25:05,360 Speaker 11: By the way, we're going to be speaking with Mike One, 497 00:25:05,480 --> 00:25:09,200 Speaker 11: who is the CEO of the US Golf Association, which 498 00:25:09,240 --> 00:25:11,960 Speaker 11: is kind of the umbrella body that oversees amateur golf, 499 00:25:12,000 --> 00:25:14,360 Speaker 11: so lots and lots of questions for him. I don't 500 00:25:14,400 --> 00:25:16,320 Speaker 11: know what this means in terms of the DOJ also 501 00:25:16,359 --> 00:25:19,359 Speaker 11: looking into the PGA and whether they would approve this 502 00:25:19,440 --> 00:25:20,600 Speaker 11: kind of murder as well. 503 00:25:20,680 --> 00:25:24,399 Speaker 1: Yep, okay, great stuff, you know, Scarlet Fu, thank you 504 00:25:24,440 --> 00:25:27,000 Speaker 1: so much. We appreciate that. Scarlet Fool Supper Television and 505 00:25:27,040 --> 00:25:29,680 Speaker 1: Belly Lipscholtz covering all the market stuff and the movers 506 00:25:29,680 --> 00:25:32,520 Speaker 1: on this golf news. Belly Lipschultz from Bloomberg News covering 507 00:25:32,680 --> 00:25:33,159 Speaker 1: the market. 508 00:25:33,320 --> 00:25:36,440 Speaker 6: You're listening to the tape Ken's Are Live program Bloomberg 509 00:25:36,480 --> 00:25:40,080 Speaker 6: Markets weekdays at ten am Eastern on Bloomberg Radio, the 510 00:25:40,119 --> 00:25:43,359 Speaker 6: tune in app, Bloomberg dot Com, and the Bloomberg Business App. 511 00:25:43,400 --> 00:25:46,199 Speaker 6: You can also listen live on Amazon Alexa from our 512 00:25:46,240 --> 00:25:51,240 Speaker 6: flagship New York station Just Say Alexa playing Bloomberg eleven thirty. 513 00:25:52,440 --> 00:25:53,200 Speaker 3: Just checking in here. 514 00:25:53,280 --> 00:25:56,000 Speaker 1: I'm seeing on Alson Williams has got one of these 515 00:25:56,520 --> 00:25:58,760 Speaker 1: notes that you just have to read because if you 516 00:25:58,800 --> 00:26:01,159 Speaker 1: think about you investing in the big band, recently it's 517 00:26:01,200 --> 00:26:03,920 Speaker 1: been about, hey, when are they going to start returning cash. 518 00:26:03,640 --> 00:26:06,400 Speaker 3: To shareholders and maybe even more cash to shareholders. Yeah, 519 00:26:06,440 --> 00:26:06,800 Speaker 3: we had to. 520 00:26:06,800 --> 00:26:08,760 Speaker 1: Pay our we were in the penalty box after the 521 00:26:08,760 --> 00:26:12,120 Speaker 1: Great Financial Crisis. But time to start paying back some money. 522 00:26:12,119 --> 00:26:12,600 Speaker 3: And they were. 523 00:26:13,000 --> 00:26:15,639 Speaker 1: But now Allison's suggesting maybe maybe putting the brakes on it. 524 00:26:15,720 --> 00:26:18,600 Speaker 1: Alison Williams jorians that she's a senior banks analyst for 525 00:26:18,600 --> 00:26:20,920 Speaker 1: Bloomberg Intelligence. I know, Alison, you've got a research note 526 00:26:20,920 --> 00:26:22,800 Speaker 1: out today kind of talking about that issue. 527 00:26:22,840 --> 00:26:25,600 Speaker 3: So are their banks pulling back on their buybacks? 528 00:26:26,240 --> 00:26:29,399 Speaker 9: So I think the banks are taking applause. Hopefully the 529 00:26:29,560 --> 00:26:32,040 Speaker 9: strength that we saw in the first quarter is not 530 00:26:32,200 --> 00:26:37,080 Speaker 9: a one hit wonder. But what we had seen was 531 00:26:37,800 --> 00:26:42,000 Speaker 9: last year. At the June stress tests, we were sort 532 00:26:42,000 --> 00:26:47,040 Speaker 9: of surprised. Back in America, JP Morgan and City Group 533 00:26:47,080 --> 00:26:49,639 Speaker 9: were also surprised in terms of the results of that 534 00:26:49,760 --> 00:26:55,560 Speaker 9: test and pushing up their higher capital requirements. They pulled 535 00:26:55,600 --> 00:26:58,639 Speaker 9: back for a few quarters, shrunk their balance sheet, got 536 00:26:58,680 --> 00:27:03,000 Speaker 9: their capital ratios, return to buybacks. Wells Fargo also on 537 00:27:03,080 --> 00:27:06,040 Speaker 9: pause return to buybacks. Keep in mind they had some 538 00:27:06,960 --> 00:27:09,879 Speaker 9: huge legal expenses last year, still relating to some of 539 00:27:09,920 --> 00:27:14,960 Speaker 9: their historical issues. So first quarter we had better buybacks 540 00:27:15,000 --> 00:27:18,119 Speaker 9: than expected, sort of sort of almost across the board. 541 00:27:18,520 --> 00:27:21,560 Speaker 9: But now banks are taking a pause and there's a 542 00:27:21,600 --> 00:27:25,760 Speaker 9: few good reasons for that. One is higher capital is 543 00:27:25,800 --> 00:27:29,320 Speaker 9: coming requirements, so it's coming for the industry. Part of 544 00:27:29,359 --> 00:27:32,000 Speaker 9: that is due to the March turmoil. Part of that 545 00:27:32,119 --> 00:27:35,240 Speaker 9: is something we refer to as Basil three endgame, which 546 00:27:35,320 --> 00:27:37,359 Speaker 9: the banks have been waiting for for a long time. 547 00:27:38,480 --> 00:27:41,280 Speaker 9: So we have that. Nathan Dean thinks that, who's our 548 00:27:41,280 --> 00:27:45,480 Speaker 9: regulatory analyst, thinks that could be coming next week. And 549 00:27:45,520 --> 00:27:48,159 Speaker 9: then we had the stress tests again, and you know, 550 00:27:48,200 --> 00:27:51,040 Speaker 9: the issue is the stress tests set a buffer for 551 00:27:51,119 --> 00:27:54,080 Speaker 9: these banks based on the losses that they see and 552 00:27:54,200 --> 00:27:56,919 Speaker 9: the extent of the losses and the extent of the decline, 553 00:27:57,440 --> 00:27:59,680 Speaker 9: and we have a higher starting point for a home 554 00:27:59,720 --> 00:28:02,320 Speaker 9: price is we have a higher starting point for employment, 555 00:28:02,880 --> 00:28:05,400 Speaker 9: which means the decline is greater, and we could see 556 00:28:05,520 --> 00:28:07,720 Speaker 9: increases related to that test. So we think banks are 557 00:28:07,760 --> 00:28:10,520 Speaker 9: going to be conservative. And by the way, we have 558 00:28:10,560 --> 00:28:12,919 Speaker 9: an economy that we're very uncertain about. 559 00:28:13,000 --> 00:28:15,679 Speaker 5: So if we're more conservative when it comes to the 560 00:28:15,680 --> 00:28:17,920 Speaker 5: bank side of things, when it does come to buybacks, 561 00:28:18,040 --> 00:28:21,440 Speaker 5: does the broader stock market begin to lose a bit 562 00:28:21,440 --> 00:28:23,560 Speaker 5: of a pillar support there to prop it up. 563 00:28:24,600 --> 00:28:29,840 Speaker 9: So I think it probably depends across companies. You know, 564 00:28:30,240 --> 00:28:33,200 Speaker 9: the one but the one bank that we think really 565 00:28:33,320 --> 00:28:37,680 Speaker 9: has the potential toinuous, continuous strong bank. Well, I guess 566 00:28:37,680 --> 00:28:41,000 Speaker 9: there's two banks. There's Morgan Stanley, who really is more 567 00:28:41,000 --> 00:28:43,880 Speaker 9: of an asset and wealth manager at this point, but 568 00:28:43,920 --> 00:28:46,360 Speaker 9: then there's also Wells Fargo. And the reason why but 569 00:28:46,480 --> 00:28:49,480 Speaker 9: Wells Fargo is likely to continue buybacks is they don't 570 00:28:50,280 --> 00:28:54,400 Speaker 9: have a lot of other options because their bound cheat 571 00:28:54,400 --> 00:28:59,880 Speaker 9: growth is restricted, and they also maybe passed the worst 572 00:29:00,040 --> 00:29:02,520 Speaker 9: of those legal issues, So we have a special case there. 573 00:29:03,120 --> 00:29:06,160 Speaker 9: So you know, looking I think more broadly, and Gina 574 00:29:06,240 --> 00:29:08,040 Speaker 9: mar and Adams and her team does a lot of 575 00:29:08,080 --> 00:29:11,040 Speaker 9: work on this, but looking more broadly, if the environment 576 00:29:11,160 --> 00:29:14,200 Speaker 9: is weaker, does that open up the opportunity for buybacks broadly? 577 00:29:15,240 --> 00:29:18,600 Speaker 1: So, Allison, I mean, it seems like the banks are 578 00:29:18,600 --> 00:29:20,760 Speaker 1: finding themselves back in the doghouse a little bit from 579 00:29:20,760 --> 00:29:23,560 Speaker 1: a regulatory perspective. They it's been almost more than a 580 00:29:23,600 --> 00:29:26,200 Speaker 1: decade trying to you know, get themselves out of that 581 00:29:26,200 --> 00:29:28,480 Speaker 1: are for the Great Financial Crisis? Is it just because 582 00:29:28,520 --> 00:29:31,200 Speaker 1: a couple of regional banks couldn't manage interest rate risk? 583 00:29:32,040 --> 00:29:34,160 Speaker 9: So I think, yeah, I think there's a few things 584 00:29:34,200 --> 00:29:36,480 Speaker 9: going on there. I think for the for the biggest 585 00:29:36,600 --> 00:29:40,640 Speaker 9: banks that I cover, you know, we had sort of 586 00:29:40,800 --> 00:29:44,000 Speaker 9: gotten to this really strong period. Then the pandemic hit 587 00:29:44,120 --> 00:29:48,640 Speaker 9: that changed some things, and you know, I think that 588 00:29:49,360 --> 00:29:55,000 Speaker 9: the one thing that is really difficult to manage is 589 00:29:55,040 --> 00:29:58,680 Speaker 9: this process so that we have we've had stress tests 590 00:29:58,680 --> 00:30:01,840 Speaker 9: since the Financial crisis, but the process now is every 591 00:30:01,920 --> 00:30:04,000 Speaker 9: year we have a test and so every year your 592 00:30:04,040 --> 00:30:08,240 Speaker 9: requirement can change. So you're basically having to manage a 593 00:30:08,280 --> 00:30:11,640 Speaker 9: business for the long term to a target that moves 594 00:30:11,680 --> 00:30:13,880 Speaker 9: every year. And so I think that that is sort 595 00:30:13,920 --> 00:30:17,360 Speaker 9: of difficult, and it is set up so that you know, 596 00:30:17,360 --> 00:30:19,640 Speaker 9: the higher the starting point, right, the better things you are, 597 00:30:19,680 --> 00:30:22,560 Speaker 9: the more conservative you'll be with capital. And so that 598 00:30:22,680 --> 00:30:24,160 Speaker 9: was a little bit what I alluded to. That was 599 00:30:24,160 --> 00:30:25,720 Speaker 9: a little bit that we saw last year. But I 600 00:30:25,720 --> 00:30:30,680 Speaker 9: think that is definitely noise that it's introduced for And 601 00:30:31,080 --> 00:30:34,080 Speaker 9: Basil three endgame is another thing that has been coming 602 00:30:34,440 --> 00:30:37,680 Speaker 9: for a long time. I mean, you know, Paul that 603 00:30:37,800 --> 00:30:40,520 Speaker 9: the Basil three rules came out, I mean how long ago, 604 00:30:40,600 --> 00:30:43,480 Speaker 9: and we're still looking to finalize those from the crisis. 605 00:30:43,880 --> 00:30:48,240 Speaker 9: And for the regional banks, it is a few banks 606 00:30:48,600 --> 00:30:52,960 Speaker 9: that mismanaged risk. But the regulator's job is to say, 607 00:30:53,600 --> 00:30:56,600 Speaker 9: you know, could there have been something in place that 608 00:30:56,640 --> 00:31:01,040 Speaker 9: would have helped these these banks keep things online? Right, 609 00:31:01,120 --> 00:31:06,240 Speaker 9: So you know, sometimes rules are meant to protect someone 610 00:31:06,440 --> 00:31:09,480 Speaker 9: like the like the seatbelt law, and you know, the 611 00:31:09,560 --> 00:31:12,920 Speaker 9: largest banks have a lot of different regulations banks and 612 00:31:13,920 --> 00:31:16,840 Speaker 9: you know, in recent years some of those got rolled 613 00:31:16,840 --> 00:31:19,320 Speaker 9: back for sort of the next tier of banks. And 614 00:31:19,360 --> 00:31:21,680 Speaker 9: now I think regulators are looking at you know, maybe 615 00:31:21,680 --> 00:31:22,760 Speaker 9: that wasn't such a great. 616 00:31:22,560 --> 00:31:25,320 Speaker 5: Idea, Allison. As you know, whenever we talk about buybacks, 617 00:31:25,360 --> 00:31:28,400 Speaker 5: we also talk about dividends. What are you expecting and 618 00:31:28,480 --> 00:31:30,360 Speaker 5: could we see an increase in dividends this year. 619 00:31:30,880 --> 00:31:34,120 Speaker 9: So I do think that we will see for select banks, 620 00:31:34,120 --> 00:31:37,600 Speaker 9: so Wells Fargo again is one who during the crisis 621 00:31:37,640 --> 00:31:41,360 Speaker 9: cut their dividend. They were perhaps more a little too 622 00:31:41,360 --> 00:31:46,680 Speaker 9: aggressive before the crisis, just in terms of you know, 623 00:31:46,880 --> 00:31:49,440 Speaker 9: part of it is of provisions, which there was a 624 00:31:49,440 --> 00:31:52,480 Speaker 9: new accounting that makes that more volatile, legal issues more volatile. 625 00:31:53,320 --> 00:31:56,760 Speaker 9: But the bottom line is they're walking back that ratio, 626 00:31:57,160 --> 00:31:59,240 Speaker 9: moving that up a little bit, and so we think 627 00:31:59,320 --> 00:32:02,640 Speaker 9: that they could be a standout. For JP Morgan and 628 00:32:02,720 --> 00:32:05,240 Speaker 9: City Group, it was a real negative last year that 629 00:32:05,280 --> 00:32:08,760 Speaker 9: we saw flat dividends that we did not see an 630 00:32:08,800 --> 00:32:12,360 Speaker 9: increase again. I think we're going to have to see 631 00:32:12,360 --> 00:32:16,479 Speaker 9: what happens over the next month or so. But especially 632 00:32:16,520 --> 00:32:19,520 Speaker 9: in the case of JP Morgan generating significant capital, they're 633 00:32:19,520 --> 00:32:22,760 Speaker 9: going to beat their profitability targets this year. They did 634 00:32:22,800 --> 00:32:25,560 Speaker 9: do the first Republic acquisition that used up some of it. 635 00:32:26,600 --> 00:32:28,640 Speaker 9: Whereas for a City Group, I think, you know, they 636 00:32:28,800 --> 00:32:31,560 Speaker 9: still have a lot of balls in the air. They 637 00:32:31,600 --> 00:32:33,680 Speaker 9: have this IPO that's going to be pushed out now 638 00:32:33,760 --> 00:32:37,200 Speaker 9: versus the sale of the Bandamax unit, so they could 639 00:32:37,280 --> 00:32:38,840 Speaker 9: keep more on the conservative side. 640 00:32:39,440 --> 00:32:42,280 Speaker 1: So Alison, I feel like if I were a bank investor, 641 00:32:42,320 --> 00:32:45,000 Speaker 1: a banks investor, I think what I have to do 642 00:32:45,080 --> 00:32:47,360 Speaker 1: is just buy the best balance sheet. I can't take 643 00:32:47,400 --> 00:32:50,240 Speaker 1: any risk really because I just it just feels like 644 00:32:50,280 --> 00:32:52,720 Speaker 1: the pendulum is starting to swing back again against the banks. 645 00:32:53,280 --> 00:32:56,040 Speaker 9: I think in general, for banks, you want to buy 646 00:32:56,080 --> 00:33:00,440 Speaker 9: the biggest risk manager, right because there are you know, 647 00:33:00,720 --> 00:33:02,840 Speaker 9: there's a lot of things you don't know, and it's 648 00:33:03,320 --> 00:33:07,080 Speaker 9: you want to be with the team that is sort 649 00:33:07,120 --> 00:33:09,840 Speaker 9: of looking at their portfolio of businesses and their portfolio 650 00:33:09,920 --> 00:33:15,880 Speaker 9: of risk and managing those risks effectively. Because in general, 651 00:33:15,920 --> 00:33:20,360 Speaker 9: financial stocks, you know that all stocks, we know that 652 00:33:20,840 --> 00:33:24,240 Speaker 9: the saying goes to, you know, buy into the fear 653 00:33:25,200 --> 00:33:30,479 Speaker 9: financial stocks certainly you know fit that. Again, I'm not 654 00:33:30,520 --> 00:33:33,240 Speaker 9: making that recommendation since we don't do that at Boomberg. 655 00:33:33,560 --> 00:33:35,640 Speaker 9: I'm just saying, like, you know, there's a saying out there, 656 00:33:35,680 --> 00:33:39,320 Speaker 9: and certainly financial stocks, you know, when there's fear, people 657 00:33:39,320 --> 00:33:42,400 Speaker 9: become very uncertain, right, They become uncertain about the unknowns, 658 00:33:42,960 --> 00:33:47,880 Speaker 9: the no nonnwns, unknown nonnwns, and so you really just 659 00:33:47,920 --> 00:33:49,960 Speaker 9: want to have someone at the helm and you want 660 00:33:50,000 --> 00:33:53,520 Speaker 9: to invest in the bank at the helm who can 661 00:33:53,560 --> 00:33:54,440 Speaker 9: manage those risks. 662 00:33:54,480 --> 00:33:57,320 Speaker 5: Accordingly, we only have about a minute left. I know 663 00:33:57,400 --> 00:33:59,480 Speaker 5: you focus more when it comes to the big banks 664 00:33:59,520 --> 00:34:01,800 Speaker 5: instead of the regionals, But where are you looking right 665 00:34:01,840 --> 00:34:04,640 Speaker 5: now for any sort of red flags. Obviously have gotten 666 00:34:04,680 --> 00:34:06,480 Speaker 5: a couple months out of those bank stresses that we 667 00:34:06,480 --> 00:34:07,120 Speaker 5: saw in March. 668 00:34:07,880 --> 00:34:09,120 Speaker 8: I think you know that. 669 00:34:09,920 --> 00:34:12,920 Speaker 9: So we had some of the surprises, and granted there 670 00:34:12,960 --> 00:34:17,560 Speaker 9: were idiosyncratic risks, but these are broad issues. So the 671 00:34:17,600 --> 00:34:20,879 Speaker 9: cost of deposits, you know, the funding is going up, 672 00:34:21,560 --> 00:34:24,680 Speaker 9: and commercial real estate I think is something that's well 673 00:34:24,680 --> 00:34:27,319 Speaker 9: known in the market. So I think we have sort 674 00:34:27,360 --> 00:34:30,360 Speaker 9: of a lot of the red flags out there, and 675 00:34:30,480 --> 00:34:33,440 Speaker 9: especially with regional banks, you know, with the pricing that 676 00:34:33,480 --> 00:34:36,480 Speaker 9: they're they're at, they're they're pricing in a lot of risso, 677 00:34:37,080 --> 00:34:39,440 Speaker 9: you know, and maybe another way of looking at it is, 678 00:34:39,920 --> 00:34:43,920 Speaker 9: you know, what could be the opportunities Fixed income trading 679 00:34:44,200 --> 00:34:47,120 Speaker 9: I think is one area that will continue to benefit 680 00:34:47,800 --> 00:34:51,640 Speaker 9: and it's when you look across these banks. You know, 681 00:34:52,040 --> 00:34:56,400 Speaker 9: granted markets were very difficult last year. Banking fees, as 682 00:34:56,400 --> 00:34:58,279 Speaker 9: we know, our down all up, but trading is a 683 00:34:58,280 --> 00:35:00,800 Speaker 9: big source of revenue and some of these capital markets 684 00:35:01,200 --> 00:35:04,600 Speaker 9: banks could still continue to benefit from that area. 685 00:35:04,680 --> 00:35:06,040 Speaker 3: All right, Alison, thank you very much. 686 00:35:06,160 --> 00:35:09,280 Speaker 1: As always, love getting your thoughts there on the big banks, 687 00:35:09,280 --> 00:35:13,320 Speaker 1: Allison Williams. She's a senior analyst covering all the banks 688 00:35:13,320 --> 00:35:15,960 Speaker 1: for Bloomberg Intelligence. He's also the director of Research for 689 00:35:16,640 --> 00:35:18,560 Speaker 1: the US for Bloomberg Intelligence. 690 00:35:21,320 --> 00:35:24,440 Speaker 2: Thanks for listening to the Bloomberg Markets podcast. You can 691 00:35:24,480 --> 00:35:28,240 Speaker 2: subscribe and listen to interviews at Apple Podcasts or whatever 692 00:35:28,320 --> 00:35:32,040 Speaker 2: podcast platform you prefer. I'm Matt Miller. I'm on Twitter 693 00:35:32,239 --> 00:35:34,320 Speaker 2: at Matt Miller nineteen seventy three. 694 00:35:34,640 --> 00:35:37,000 Speaker 3: And I'm Paul Sweeney. I'm on Twitter at pt Sweeney. 695 00:35:37,120 --> 00:35:39,799 Speaker 1: Before the podcast, you can always catch us worldwide at 696 00:35:39,800 --> 00:35:40,800 Speaker 1: Bloomberg Radio.