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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene. Along

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Speaker 1: with Jonathan Ferrell and Lisa Brownwitz. Daily we bring you

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Speaker 1: insight from the best and economics, finance, investment, and international relations.

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Speaker 1: Find Bloomberg Surveillance on Apple Podcast, sun Cloud, Bloomberg dot Com,

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Speaker 1: and of course on the Bloomberg terminal. Right now, joining us,

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Speaker 1: and we welcome all of you on Bloomberg Radio and

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Speaker 1: Bloomberg Television worldwide and particularly on the continent of Europe.

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Speaker 1: The Ukraine at National Bank Deputy Governor Serge Nikolai Chuck

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Speaker 1: joins us now from his Ukraine. Thank you so much,

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Speaker 1: sir for joining us this morning. I want to stay

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Speaker 1: on the financial right now. So many questions to ask you.

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Speaker 1: What do you need is an institution, your economist? What

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Speaker 1: do you need now from the Bank of International Settlements

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Speaker 1: and the major central bank acres such as chairman Power,

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Speaker 1: what do they need to do to assist your nation?

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Speaker 1: Thank you very much for inviting me, and thank you

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Speaker 1: very much for the globe for supporting the Ukraine against

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Speaker 1: this Russian aggression. Definitely today's today, we are very happy

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Speaker 1: that major advanced countries and also international financial organizations support

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Speaker 1: US and also we try to do our best to

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Speaker 1: impose as most harsh sanctions to Russia in order to

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Speaker 1: in order to UH increase the cost of this invasion

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Speaker 1: on Ukraine. Coming back to your question regarding BI S

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Speaker 1: and I AM. So far, we tried to persuade the managers,

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Speaker 1: the leaders of this UH, of this organization that in

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Speaker 1: the car environment, Russia cannot be allowed to be the

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Speaker 1: member of this respected organization in the situation with where

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Speaker 1: with this such military military aggression and direct invasion into

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Speaker 1: the territory of Ukraine. That's why we approach this organization

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Speaker 1: with the request to suspend the membership of the Russia

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Speaker 1: in UH. In a way in the financial organization of

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Speaker 1: the world, it's definitely cover it. Do you know you

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Speaker 1: aware of the I m F and whether it's helping

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Speaker 1: the Russians understand the sanctions and work around the sanctions

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Speaker 1: they're seeking advice from them. Most your interpretation of what's

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Speaker 1: happening between a multilatural institutions at the moment and how

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Speaker 1: they're actually working with Russia day by day. My understanding

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Speaker 1: that at the current moment, so the active cooperation between

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Speaker 1: the International Financial Organization and Russian financial institution is suspended.

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Speaker 1: We hope that this that is the only first step.

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Speaker 1: We hope that you know, in the current environment, you know,

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Speaker 1: the membership of Russian financial organization like central Bank, like

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Speaker 1: Ministry of Finance, and so ONCEO can cannot be allowed it.

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Speaker 1: So all this respected organized respected in the past, organization

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Speaker 1: like Central Bank of Russia. So nowadays they try to

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Speaker 1: to you know, to finance to support their terroristic state,

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Speaker 1: which we consider the Russian state. Uh uh is now

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Speaker 1: so we don't think that in the current moment, is

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Speaker 1: is reasonable to have any any operations, any relations with

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Speaker 1: Russian authorities. Your continue. I'm just wondering. We all see

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Speaker 1: these numbers, huge numbers beaing under around. Have you got

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Speaker 1: to rate? Have you done any studies on how much

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Speaker 1: age you actually need? Do you have a number in

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Speaker 1: mind of what you need right now? Uh? So far

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Speaker 1: we try to keep our financial system under control. But

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Speaker 1: again our preliminary estimates show that on the daily basis,

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Speaker 1: our GDP now only half of the you know, of

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Speaker 1: the normal GDP amount under the peace peaceful conditions. So

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Speaker 1: definitely it will put a huge strain on our public finances.

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Speaker 1: On the also on the resource of the Central Bank,

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Speaker 1: And definitely we need the support of the global community

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Speaker 1: to to keep our to keep our finances viable, and

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Speaker 1: to support us in our fighting against Russia. But it's

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Speaker 1: very difficult now, you know, to account how many billions

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Speaker 1: of dollars, how many probably hundreds of millions billions of

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Speaker 1: dollars we will need again after the war, to uh to,

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Speaker 1: to to to to to restore how economy, economy, How

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Speaker 1: do we even begin to do normal central banking in

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Speaker 1: such an abnormal time? How do you even assess the

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Speaker 1: economic damage and even hold meetings at a time when

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Speaker 1: things are so in flux? You know, actually that was

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Speaker 1: that you already eight years from the start of the

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Speaker 1: military conflict with the Russian Federation, And definitely we had

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Speaker 1: some business continuity plans how to deal in the case

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Speaker 1: of the direct military innovasion. All the time we consider

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Speaker 1: it such scenarios as to be of low probability, but

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Speaker 1: unfortunate plea, this low probability realized neverthe will nevertheless, so

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Speaker 1: we I suppose that we were more or less prepared

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Speaker 1: even for such for such a scenario, and we continue

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Speaker 1: to do our our work in these conditions as much

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Speaker 1: effective as its possible. So, Jay, you wrote a paper

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Speaker 1: in another time in place two thousand nineteen and monetary transmission.

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Speaker 1: I want you to tell me what the currency will do,

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Speaker 1: not only the revenue, but what ruble will do as

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Speaker 1: ruble weekends. Do you just assume that Russia bombs itself

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Speaker 1: back to a barter economy? You know, definitely the monitor

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Speaker 1: monitory transmission even described in my paper does not work now.

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Speaker 1: So we don't want to play these games and like

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Speaker 1: Russian Central Bank does, and we don't think that they

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Speaker 1: key policy. Read nowadays, it's an effective instrument. So we

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Speaker 1: just suspended to consider the our monetary policy and as

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Speaker 1: conducted by under the inclation targeting regime. We we suspended

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Speaker 1: to consider our policy rate as the main instrument. So

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Speaker 1: now we would say, so we do we manage our

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Speaker 1: financial sector, we manage our economy. We are monetory instruments,

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Speaker 1: instruments almost manually as an economist, So what do you

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Speaker 1: make of the financial warfare that Western nations have really

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Speaker 1: been waging to try to isolate Russia. Do you think

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Speaker 1: that when we look back in history it will be

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Speaker 1: considered a success? Uh, you know, probably the unique situation

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Speaker 1: nowadays that um Uh. The unique situation is that you know,

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Speaker 1: you hit the Western world nowadays, hit the economy which

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Speaker 1: used to function in completely normal market conditions, I mean

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Speaker 1: market conditions, normal market conditions in the economic sense, and

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Speaker 1: also for the financial system. We used to live uh

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Speaker 1: in the Soviet Union, but which was was also isolated

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Speaker 1: from the Western world. But at that time, you know,

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Speaker 1: so they were uh that economy, that economy was you know,

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Speaker 1: was built from the beginning on completely different grounds. Nowadays,

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Speaker 1: I suppose that this hit to the economy which was

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Speaker 1: really integrated in the global economic and financial world. So

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Speaker 1: it's really massive and frankly speaking, I expect really catastrophic

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Speaker 1: consequences of the Russian economy and for the Russian and

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Speaker 1: financial system. Deely want to finition something important, not just

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Speaker 1: for your economy, but for the rest of the world,

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Speaker 1: and I think it might help papers the tension. We've

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Speaker 1: gone through the stats on this program. The Russian Ukraine

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Speaker 1: supply more than a quarter of the world's we exports.

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Speaker 1: One fit at the corn sales and any percent of

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Speaker 1: the sun flower royal can't goes at some point, Deputy Government,

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Speaker 1: the farmers need to get back out into the fields.

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Speaker 1: And get back to work. Can you help us understand

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Speaker 1: the amount of devastation we could see to those goods

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Speaker 1: if those farmers can't get back into the fields and

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Speaker 1: work in the next several months. Yes, So that's a

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Speaker 1: very important question for the global equonomy, for for for

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Speaker 1: the feud security globally. Yeah, Ukraine and also Russia and

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Speaker 1: some extents that are very very important suppliers of their wheat,

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Speaker 1: of the card, of the oil seeds and or sunflower

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Speaker 1: oil to the global markets. And I hope that, I

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Speaker 1: hope that this military invasion will be suspended very fast

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Speaker 1: and our farmers will be able to uh to have

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Speaker 1: the normal agricultural year this year. Otherwise, I'm afraid that

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Speaker 1: I'm a friend that even global consequences could be very

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Speaker 1: very very very very toll. Could you help people understand

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Speaker 1: what that would look like depu the governor if this

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Speaker 1: wasn't down with quickly enough and this went into the summer,

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Speaker 1: I don't know, I don't know, I I don't I'm

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Speaker 1: not able to provide you any estimates at the moment.

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Speaker 1: And you know, currently we try to do our best

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Speaker 1: to secure there to ensure the function of the payments

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Speaker 1: in the country and secure the financial community in this environment.

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Speaker 1: So probably will will will we have to do such

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Speaker 1: calculations and to in order to understand how the world

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Speaker 1: will you know, live without the supply of this food

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Speaker 1: stoff from from your queen. Well, let's hope so it

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Speaker 1: doesn't come to that. Deputy Governor, thank you so much

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Speaker 1: for your time today and our thoughts here at Bloomberger

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Speaker 1: with you all, with the people of Ukraine and with

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Speaker 1: you and your government and the Central Bank this morning.

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Speaker 1: Say you Nikolai Chuck there, the Deputy Governor of the

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Speaker 1: Bank Ukraine. Thank you, sir, thank you very much. Let's

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Speaker 1: get right to it, at least so Mario Gabelli joins

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Speaker 1: to say he's co investment Officer for Value at Gabelly Funds.

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Speaker 1: Barely describes his contribution to investment finance in America, and

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Speaker 1: we do make note of long ago and far away,

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Speaker 1: Mario Gabella used to write twelve page sell side analyst

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Speaker 1: notes on what's going on in the market. Mario, let's

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Speaker 1: go there. I love your note of this morning where

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Speaker 1: you say look for M and A. Given all that's

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Speaker 1: going on in American finance, and you speak of vertical

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Speaker 1: and horizontal mergers and acquisitions. I love that describe well, Tom,

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Speaker 1: make it simple. Uh. We have a new regulatory regime

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Speaker 1: in the United States, Lina Khan and others looking at

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Speaker 1: and saying, should a company that has five percent market

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Speaker 1: share in a company that has eight percent market share,

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Speaker 1: should they be combined under the old h F index

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Speaker 1: Without getting into the details of that because I don't

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Speaker 1: know how to pronounce it, but basically what I'd like

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Speaker 1: to see the buyers of companies. The buyers of companies

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Speaker 1: are strategic. For example, Cummins Engine decided to buy what

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Speaker 1: I used to call Arvin Meritor are meritory. But on

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Speaker 1: the same time, private equity is buying companies in the

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Speaker 1: same and that's Tenneco. So uh is uh? What is

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Speaker 1: Cummins doing is that a vertical integration into products that

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Speaker 1: will then go into the products that they sell. Is

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Speaker 1: that their customer pipeline. So that's as simple as that. Today.

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Speaker 1: For example, well built and from my point of view,

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Speaker 1: you cannot have the government look at things in linear

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Speaker 1: way the way aerojet was turned down. They are a

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Speaker 1: producer of hypersonic capability in this country, which is a

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Speaker 1: major defense dynamic. Extraordinarily good balance sheet. They've got a

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Speaker 1: couple of hundred million dollars in cash the Maxus assets

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Speaker 1: that they can sell off. Lockheed was trying to buy them,

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Speaker 1: but they can't put five hundred million dollars. You just

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Speaker 1: don't have it, whereas Lockheed could do it. And we

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Speaker 1: all have to be prepared for I want to get

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Speaker 1: I want to get Lisa Bramitt's and there, Lisa, give

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Speaker 1: me one short answer here from Mario Gabelli. Mario, you're

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Speaker 1: flogging your book on television behind you, uh, merger Masters.

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Speaker 1: I mean, I know you need to sell a couple

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Speaker 1: more copies to make the month go. But Mario, if

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Speaker 1: I look at Merger Masters now when you wrote that book, yeah,

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Speaker 1: get up and get the book on a radio. Folks.

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Speaker 1: This is this is but but Mario, seriously you mentioned it.

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Speaker 1: Private equity is in there right now. How does your

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Speaker 1: world chase that. Steve Schwartzman is in buying companies now?

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Speaker 1: But they always do that Tom And basically instead of

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Speaker 1: just buying it, holding it and then recapitalizing and then

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Speaker 1: spending it in five years, they not only buy the company, Tom,

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Speaker 1: but they basically then go in and add companies to

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Speaker 1: what they're buying. And what that means is the follow

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Speaker 1: If you're buying something today, what ideal world, ideal world

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Speaker 1: on a PE world is to buy something that has

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Speaker 1: cash flow minus capex at a multiple that five years

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Speaker 1: or ten years you can sell off at no lower

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Speaker 1: multiple and then uh, but interest rates changing. So that's

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Speaker 1: what they do, and they do it effectively, and they're

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Speaker 1: raising significant amounts of capital and they're moving around. So

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Speaker 1: any organization, and if Lisa is interested and looking at

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Speaker 1: putting private equity into the funds, because they marked not

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Speaker 1: to market, which is what happens daily to money managers

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Speaker 1: like us, but they market, uh, mark the portfolios to model,

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Speaker 1: which means that institutions like the lag effect that changes

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Speaker 1: in the in the stock market. Then what happens is

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Speaker 1: not complicated. Uh, you know, more money goes in. So

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Speaker 1: what you want to do, you want to do is

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Speaker 1: buy Schwartzmann's company. You want to buy Keke Henrykravis's company

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Speaker 1: k k R. So by the PE firms now in

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Speaker 1: the public markets, there's one called their public market stocks.

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Speaker 1: John Malone would be a good example of that. Yeah,

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Speaker 1: Another good example would be aren't Buffetts Berkshire Hathaway Mario,

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Speaker 1: I am very interested in all of the different ways

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Speaker 1: to formulate value. But at the same time, right at

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Speaker 1: this moment, a lot of people are trying to understand

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Speaker 1: the parameters to input into these flip formulas. Where is

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Speaker 1: the price of oil? Where is uh the interest rate strategy?

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Speaker 1: So when it comes to oil, as we're trying to

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Speaker 1: game out commodities, how do you even come up with

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Speaker 1: input prices? At this point, at least when you look

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Speaker 1: at the companies that reported earnings and the balance sheet,

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Speaker 1: you basically have to look get the ecosystem. Two years

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Speaker 1: ago in March, or when we had a disaster in

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Speaker 1: the market where we had COVID impact, basically the only

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Speaker 1: thing that did well was God gouges and then eventually

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Speaker 1: growth stocks by growth based on a multiple of revenues

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Speaker 1: and revenue percentage growth. Today you're having the market look

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Speaker 1: at let's say energy, I, as a buyer of related

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Speaker 1: products two years ago, was cutting down on my inventory,

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Speaker 1: cutting down to my capex because I needed to preserve

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Speaker 1: my working capital in my cash. Today, I'm taking whatever

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Speaker 1: I can put into my inventory at whatever price I

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Speaker 1: have to pay, and I need to understand life accounting.

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Speaker 1: I need to understand firefolk counting. You know, we're dusting

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Speaker 1: awful lot of old technologies to get that part energy oil.

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Speaker 1: We as a country, they forgot about it as a

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Speaker 1: strategic element, even though you had the Sundies and the

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Speaker 1: she is fighting forever and you had all sorts of

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Speaker 1: those dynamics. And it was a bad policy. It failed

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Speaker 1: in transition. We all want we all want renewables, we

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Speaker 1: all want a solar wind hydro, but we need transmission,

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Speaker 1: we need storage, and it's not coming. It's bad policy.

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Speaker 1: We're out of time here, but you're gonna continue on radio,

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Speaker 1: Mario on TV for radio. I need you to hold

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Speaker 1: up Merges and Masters again so we can move. Hold

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Speaker 1: the book up right now, Mario, so we can move.

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Speaker 1: This was written by a colleague of mine on Barrens

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Speaker 1: for thirty five years. It's a great yea. It deals

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Speaker 1: with how to make money when a romance is announced.

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Speaker 1: In other words, company A wants to buy company B.

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Speaker 1: And it also tells you how the investment bankers, the lawyers,

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Speaker 1: tomp and the orbit treasures work in the process of

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Speaker 1: doing this. And uh, you know, it's a good discipline

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Speaker 1: for someone that has mathematical background, has common sense and

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Speaker 1: wants to make money over there. And we're gonna wrap

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Speaker 1: this up and go to the headlines to Mario. But

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Speaker 1: all I'm gonna say, folks is this is a grown

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Speaker 1: up book for Global Wall Street. And if you're on

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Speaker 1: Global Wall Street, it's a single best book on the

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Speaker 1: machinery of Gabelli's world. Margot Belly. A quick brief now

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Speaker 1: from Nila Richardson, chief economist at a DP. I'm sorry, Nila,

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Speaker 1: I say automatic data processing because I'm a fossil. Uh, Nila,

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Speaker 1: we do have the US economic data. Does it signal

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Speaker 1: a buoyant economy or we truly in some form of slowdown? Well,

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Speaker 1: we're going to slow down from last year's high pace.

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Speaker 1: We are a healthy economy. I think we continue to

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Speaker 1: grow robustly, but we are in the economy that has

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Speaker 1: the absence of a high degree of federal spending and

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Speaker 1: monetary easing that is going to fade away. So yes,

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Speaker 1: healthy economy. Uh. And those jobless claims are another good

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Speaker 1: sign how far we've come in the labor market. But

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Speaker 1: we should see some following growth. And the real battle now,

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Speaker 1: the real the real issue now, not the battle The

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Speaker 1: issue now is inflation, and inflation that is only getting

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Speaker 1: hotter as we see commodities surge the fastest pace, going

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Speaker 1: back at least by one measure, to the nineties seventies.

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Speaker 1: How much do you expect wages to respond to this

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Speaker 1: to the upside versus actually people coming back into the

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Speaker 1: labor market in order to get paychecks in response to

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Speaker 1: this inflation. Well, we really saw inflation accelerate in the

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Speaker 1: fourth quarter. And the interesting of the thing about it

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Speaker 1: is that inflation in terms of inflation rising for wages

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Speaker 1: wage gains in the fourth quarter. Was interesting about it

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Speaker 1: is through most of the recovery, it's been the low

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Speaker 1: pay sector that's seen the high wage increases, right, so

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Speaker 1: those people who are making lower wages, those wages were

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Speaker 1: increasing faster. Now we're seeing a bit of a flip

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Speaker 1: in our data. We're seeing those industries that are correlated

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Speaker 1: with high page jobs, information tech, finance, professional business services

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Speaker 1: really accelerate and that might not only show wage inflation,

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Speaker 1: but wage disparity between people who can deal with inflation

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Speaker 1: a little bit better and the higher incomes and people

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Speaker 1: who are still struggling to So to your point, getting

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Speaker 1: people back into the labor force and a time with

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Speaker 1: very high price levels is really important, so as we

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Speaker 1: as the FED looks to contain inflation, and it's really

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Speaker 1: important that the job's recovery continues because it's not quite

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Speaker 1: complete yet. How do you even begin to game out

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Speaker 1: the ramifications of a hundred and thirty dollars of barrel

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Speaker 1: oil a hundred and fifty dollars of barrel oil as

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Speaker 1: we talk about that on this bifurcated recovery of the

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Speaker 1: haves and the have nots as you put it, well,

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Speaker 1: let's just talk about getting the work. Where most of

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Speaker 1: Main Street sees those higher oil prices is at the

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Speaker 1: gas pump, and so it's transportation costs and accelerate. We

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Speaker 1: already know that housing costs have accelerated, childcare costs have

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Speaker 1: been high through the pandemic, and we're already high before

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Speaker 1: it's really a material concern for main street families and

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Speaker 1: for working families. And we know that energy prices fill

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Speaker 1: over into other goods and other inputs. And so if

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Speaker 1: you add on accelerated energy prices to what is already

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Speaker 1: UH supply shortages and the great interview you just did

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Speaker 1: pointing to the effect of both energy and agriculture and

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Speaker 1: perhaps food prices. You're seeing that for people who are

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Speaker 1: still trying to work their way out of this pandemic. Economically,

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Speaker 1: headline inflation is a big concern if inflation is entrenched, Nila,

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Speaker 1: do you look at top line inflation, does the core

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Speaker 1: and all the fancy economists like you do, all those

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Speaker 1: fancy inflation measurements drift away or do they become more important?

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Speaker 1: You look at the consumer, because the consumer is looking

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Speaker 1: at headline inflation. The consumers go into the grocery store

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Speaker 1: Belk and they're seeing the bear shelves, and so the

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Speaker 1: consumers expectations are going to feed inflation over the long term.

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Speaker 1: The good news is a year out we're seeing high

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Speaker 1: consumer inflation expectations, but three to five years out they

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Speaker 1: start to decline. That's the trend we want to keep.

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Speaker 1: So I think that fancy economics has its place, but

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Speaker 1: also go into the grocery store and watching the consumer

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Speaker 1: at the gas pumping at the grocery store has its

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Speaker 1: place to particularly in this environment. It's getting expensive, that's

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Speaker 1: for sure, Nata. Thank you as always, Nata Richards in

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Speaker 1: that of a d P in all of our reporting

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Speaker 1: it is not just oil. It is a complex story.

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Speaker 1: Joining us now thrilled to bring you Dary County's portfolio

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Speaker 1: manager and a head of commodities at DWS with years

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Speaker 1: of experience on the up and down and right now

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Speaker 1: the very up up on commodities. Don't these are not

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Speaker 1: financial instruments. What is the media coverage missing about the

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Speaker 1: fact that aluminum or wheat have huge fixed costs in

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Speaker 1: their production? What are we missing that these are not

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Speaker 1: the usual liquid instruments were used to good money and

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Speaker 1: thanks Tom, that's a wonderful question. We do see sniff

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Speaker 1: and price impact across all commodities. However, there's also a

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Speaker 1: human element to all of the prices. We tend to

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Speaker 1: forget as market market protectioners that we focus on price

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Speaker 1: and return. But alumnus used for industrial uses and many

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Speaker 1: countries depend on aluminum as input to help keep the

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Speaker 1: factories going and help keep the workers employed. Wheat is

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Speaker 1: even bigger issue. It directly links to food security. Both

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Speaker 1: Ukraine and Russia are large exporters of wheat, in particular

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Speaker 1: to areas like Northern Africa, Central Asia, Middle East. For

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Speaker 1: these countries, they're going to experience very sharp press inflation.

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Speaker 1: Should the conflict escalate from here and interrupt the production

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Speaker 1: process for weed, we might see even worse, such a

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Speaker 1: squid shortage that could lead to significance of all This

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Speaker 1: leads to the microeconomics at the moment, how do you

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Speaker 1: define as a portfolio manager of great success? How do

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Speaker 1: you define demand destruction? Demand destruction really comes in a

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Speaker 1: couple of different ways. One is, if the press gets

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Speaker 1: high enough, for example, the gasoline press gets high enough,

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Speaker 1: people may choose to drive less, trouble less to save

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Speaker 1: money so they can afford other goods. So it's one

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Speaker 1: way to see that it's more impact on lower growth

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Speaker 1: rate assumption rather than completely replacement. That's a second type

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Speaker 1: of a demand disruption comes in the fact that people

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Speaker 1: could find alternative energy, additive energy shift from gasoline based

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Speaker 1: cars to electrical cars um in the US in particular,

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Speaker 1: that will have a very big impact on energy price.

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Speaker 1: It's always a lot of people along right now, and

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Speaker 1: the price shift we've seen, the distliccations we've seen when

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Speaker 1: we think about what the hedge is, what the hedges

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Speaker 1: is not what the hedge was a month or so ago.

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Speaker 1: If we got a headline that basically said we had

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Speaker 1: a ceasefire. I'm just wondering when you look across your portfolio,

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Speaker 1: how you've hedged that that way, What kind of instruments

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Speaker 1: you look to, what kind of trades you've got on. Well,

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Speaker 1: there are two things we focused on. One is outside

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Speaker 1: of oil, what are other commodities that have more long

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Speaker 1: term impact given the current environment. And we think based metal,

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Speaker 1: which is currently behind the other commodities in terms of

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Speaker 1: the price elevation, we think that's actually a great way

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Speaker 1: to hedge the portfolio because we do anticipate trying not

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Speaker 1: to continue to improve off the credit for the economy,

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Speaker 1: and that will help with demand on base metal regardless

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Speaker 1: of the energy performance. The second thing we are doing

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Speaker 1: in our portfolio is to think about having more deferred

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Speaker 1: exposure in our funds um the back end of the curve,

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Speaker 1: and let me use a more plane language, that later

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Speaker 1: delivery of oil that particular prices is not moving up

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Speaker 1: nearly as much as the prompt the near delivery of oil.

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Speaker 1: We think at some point of two prices will even out,

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Speaker 1: and that's why we are thinking very hard about shifting

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Speaker 1: some of our exposure to the deferred exposure. We've been

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Speaker 1: talking about whether sanctions will matter for commodities markets that

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Speaker 1: have already priced in a lot of self imposed sanctions

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Speaker 1: by a lot of commodity producers and importers. What's your

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Speaker 1: sense of how much further prices could climb if the

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Speaker 1: sanctions are written in name without the carve outs for

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Speaker 1: oil and metals, So of for oil brand as an example,

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Speaker 1: are target right now, so a hundred and thirty dollars

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Speaker 1: if there's no change to the current level of conflict.

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Speaker 1: If there's direct impact on delivery Russia's ability to deliver

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Speaker 1: out oil, we can easily see a hundred fifty or

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Speaker 1: more for oil price. Because Russia accounts for a very

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Speaker 1: large part of the global supply. Out of the eleven

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Speaker 1: million they produce, over seven million comes out of the country,

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Speaker 1: so that's to be interrupted, we can see significant impact.

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Speaker 1: It's just no easy solution to replace it. For the

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Speaker 1: other commodities. For weed in particular, that's a concern because

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Speaker 1: if we see disruption for Russia to deliver they are

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Speaker 1: one of the biggest producers in the world, biggest exporter,

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Speaker 1: and Ukraine's already experiencing humilitary and concerns, so we don't

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Speaker 1: really know if Ukraine will have the same ability to

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Speaker 1: produce fret and corn both at the same level as

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Speaker 1: they have in the past, So there's be in no

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Speaker 1: easy solution for that. That last point, there is just

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Speaker 1: going to be such a big deal for global politics,

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Speaker 1: particularly in Northern Africa, as you pointed out that way,

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Speaker 1: Kume that of DWS that way. Thank you for taking

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Speaker 1: us and signed the portfolio. This is the Bloomberg Surveillance Podcast.

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Speaker 1: Thanks for listening. Join us live weekdays from seven to

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