1 00:00:04,760 --> 00:00:08,080 Speaker 1: Welcome to the Bloomberg P and L Podcast. I'm Pim Fox. 2 00:00:08,119 --> 00:00:11,200 Speaker 1: Along with my co host Lisa Abramowitz. Each day we 3 00:00:11,280 --> 00:00:14,480 Speaker 1: bring you the most important, noteworthy, and useful interviews for 4 00:00:14,520 --> 00:00:16,880 Speaker 1: you and your money, whether at the grocery store or 5 00:00:16,920 --> 00:00:20,680 Speaker 1: the trading floor. Find the Bloomberg P L Podcast on iTunes, 6 00:00:20,840 --> 00:00:30,080 Speaker 1: SoundCloud and at Bloomberg dot com. Secretary of State Rex 7 00:00:30,200 --> 00:00:34,880 Speaker 1: Tillerson meeting with Sergei Lavrov, the Russian foreign minister, meeting 8 00:00:34,920 --> 00:00:38,440 Speaker 1: in the Kremlin today to talk about, among other things, Syria. 9 00:00:38,800 --> 00:00:41,360 Speaker 1: Here to tell us about Syria is Dr Ariel Cohen, 10 00:00:41,440 --> 00:00:44,519 Speaker 1: Senior Fellow of the Atlantic Council. He is also the 11 00:00:44,560 --> 00:00:47,519 Speaker 1: director of the Center for Energy and Natural Resources and 12 00:00:47,600 --> 00:00:51,919 Speaker 1: Geopolitics at the Institute for Analysis of Global Security, and 13 00:00:52,080 --> 00:00:56,360 Speaker 1: Dr Cohen joins us from Washington. Dr Cohen, in the 14 00:00:56,440 --> 00:01:01,480 Speaker 1: context of your sort of dual roles energy natural resources 15 00:01:01,520 --> 00:01:04,360 Speaker 1: as well as politics, or if you could speak to 16 00:01:04,600 --> 00:01:08,520 Speaker 1: the issue of natural resource as a strategic issue for 17 00:01:08,600 --> 00:01:13,240 Speaker 1: the Russians, Is there anything that Rex Tillerson, he's formally 18 00:01:13,240 --> 00:01:15,720 Speaker 1: of course chief executive X on mobile. Is there anything 19 00:01:15,760 --> 00:01:20,959 Speaker 1: that he can say or do that would soften Vladimir 20 00:01:21,040 --> 00:01:26,120 Speaker 1: Putin's position when it comes to Russia and Syria. I 21 00:01:26,200 --> 00:01:29,399 Speaker 1: doubt it because putting his doubling down on his support 22 00:01:29,480 --> 00:01:33,720 Speaker 1: of Bashar Assad, he probably did not expect Donald Trump 23 00:01:33,760 --> 00:01:41,080 Speaker 1: to turn against Russia and against Russian alliance with assad. Um. 24 00:01:41,120 --> 00:01:44,200 Speaker 1: As you know, Trump called us At an animal. He 25 00:01:44,240 --> 00:01:49,480 Speaker 1: has written him off just after the administration said maybe, uh, 26 00:01:49,680 --> 00:01:52,240 Speaker 1: pushing as Adat was not a priority, and then of 27 00:01:52,280 --> 00:01:56,760 Speaker 1: course assad went and did something so horrible as guessing children. Uh. 28 00:01:56,920 --> 00:02:03,760 Speaker 1: Tillerson is in Moscow. He is um actually decorated Russian um, 29 00:02:03,920 --> 00:02:07,360 Speaker 1: beneficiary of the Order of Friendship given to him by 30 00:02:07,400 --> 00:02:11,079 Speaker 1: Putting himself several years ago for the X on Russia 31 00:02:11,600 --> 00:02:16,400 Speaker 1: X and ross neft Um big oil deal. He understands 32 00:02:16,480 --> 00:02:22,200 Speaker 1: Russian predicament um. Russia is pretty much a one uh 33 00:02:22,360 --> 00:02:26,240 Speaker 1: one pony trick, one p show with oil and gas 34 00:02:26,280 --> 00:02:32,440 Speaker 1: and some of other um raw materials. Russia exports lumbert timber, 35 00:02:33,120 --> 00:02:36,799 Speaker 1: some metals, and of course weapons and nuclear reactors. Of course, 36 00:02:37,440 --> 00:02:42,760 Speaker 1: as you saw with the bankruptcy of Westinghouse, Russian Rossatom 37 00:02:43,120 --> 00:02:44,840 Speaker 1: is going to be in a better position to sell 38 00:02:45,160 --> 00:02:47,880 Speaker 1: reactors around the world. But basically Russia is a bad 39 00:02:47,880 --> 00:02:51,919 Speaker 1: economic situation and what it's doing in Syria is making 40 00:02:52,200 --> 00:02:55,280 Speaker 1: that situation much much worse. Wait, well to that point, 41 00:02:55,360 --> 00:02:58,760 Speaker 1: Dr Colm, what I don't fully understand is why Russia 42 00:02:58,880 --> 00:03:01,480 Speaker 1: is so loyal to the shar Asad and why they 43 00:03:01,520 --> 00:03:07,120 Speaker 1: are so committed to being involved in the Syria Civil war. Uh. 44 00:03:07,160 --> 00:03:12,760 Speaker 1: They want to support uh their ally UH, not just Bashar, 45 00:03:13,040 --> 00:03:16,600 Speaker 1: his father Hafez was Russian ally going all the way 46 00:03:16,639 --> 00:03:20,320 Speaker 1: back to the nineties seventies. UH. They have a strategic 47 00:03:20,360 --> 00:03:25,680 Speaker 1: relationship with the Allawi's, with a sect that Bashar and 48 00:03:25,840 --> 00:03:30,680 Speaker 1: his father came from. It's essential in Alloite Ala White regime, 49 00:03:30,800 --> 00:03:34,000 Speaker 1: and also Russia in Iran are in a strategic alliance 50 00:03:34,080 --> 00:03:39,440 Speaker 1: as well as the terrorists Iranian offshoot called Kisbala in Lebanon. 51 00:03:39,840 --> 00:03:43,920 Speaker 1: So this is the anti Western, anti Sunni Arab bloc 52 00:03:44,160 --> 00:03:47,560 Speaker 1: in the Middle East. It is the Iranian Crescent going 53 00:03:47,600 --> 00:03:50,560 Speaker 1: all the way from Tehran to the Mediterranean, and Russia 54 00:03:50,720 --> 00:03:53,960 Speaker 1: is a very very important part of that. Is there 55 00:03:54,000 --> 00:03:58,040 Speaker 1: any possibility that the Saudis will come in and maybe 56 00:03:58,720 --> 00:04:03,119 Speaker 1: change the agreement to curtail the increase of oil because 57 00:04:03,240 --> 00:04:07,560 Speaker 1: if Russia is dependent on revenue from oil production, why 58 00:04:07,600 --> 00:04:11,120 Speaker 1: would the Saudis as Sunni state that is really in 59 00:04:11,200 --> 00:04:15,400 Speaker 1: confrontation with Iran and with bush are Al Assad. Why 60 00:04:15,400 --> 00:04:19,920 Speaker 1: would the Saudis continue behavior that in a sense offers 61 00:04:19,960 --> 00:04:24,480 Speaker 1: the Russians a financial incentive to keep doing what they're doing. Well, 62 00:04:24,560 --> 00:04:26,719 Speaker 1: Russians are not happy with the oil at fifty, They 63 00:04:26,760 --> 00:04:28,800 Speaker 1: would much of it have an oil at seventy five 64 00:04:28,920 --> 00:04:33,159 Speaker 1: or But for the Sauties it's also a challenge. They five. 65 00:04:33,720 --> 00:04:36,839 Speaker 1: They try to cut a deal with Puchin, in with 66 00:04:36,920 --> 00:04:40,920 Speaker 1: Iran and limit the production. But guess what, every time 67 00:04:40,960 --> 00:04:45,720 Speaker 1: the production the price because of the production cut goes 68 00:04:45,760 --> 00:04:51,880 Speaker 1: to sixty. Our shale producers in the United States, in 69 00:04:52,120 --> 00:04:55,600 Speaker 1: the oil sands in Canada and other shale producers can 70 00:04:55,640 --> 00:05:00,200 Speaker 1: pump more and the price almost automatically drives down back 71 00:05:00,240 --> 00:05:03,320 Speaker 1: to fifty or even below fifty. The Salis have their 72 00:05:03,360 --> 00:05:08,680 Speaker 1: own huge um economic problem with cheap oil. They are 73 00:05:08,760 --> 00:05:13,840 Speaker 1: in deficit. Uh, they are preparing Saudi Aramco for an 74 00:05:13,880 --> 00:05:16,599 Speaker 1: I p O that's always going to be the largest 75 00:05:16,640 --> 00:05:19,760 Speaker 1: I p O in the world. So Satis don't have 76 00:05:19,880 --> 00:05:24,880 Speaker 1: a lot of margin. But we'll see if the Russians 77 00:05:24,880 --> 00:05:28,760 Speaker 1: are really are not playing ball. Is Iranians are still threatening. Yes, 78 00:05:28,800 --> 00:05:32,599 Speaker 1: the versalities still have the spare capacity to flood the 79 00:05:32,640 --> 00:05:37,080 Speaker 1: market and drive oil to Let's say, at which point 80 00:05:37,120 --> 00:05:41,640 Speaker 1: it's not good news for our domestic shell producers. Real quick, 81 00:05:41,720 --> 00:05:44,680 Speaker 1: At what point do you think that the economic issues 82 00:05:44,720 --> 00:05:47,640 Speaker 1: that Russia is facing with lower oil prices and sanctions 83 00:05:47,880 --> 00:05:53,800 Speaker 1: will feed into their willingness to compete continue supporting Syria. Well, 84 00:05:53,839 --> 00:05:57,279 Speaker 1: there two or three challenges here. Number one, Uh, the 85 00:05:57,360 --> 00:06:00,560 Speaker 1: Russians are very careful how they intervene in Syria. It's 86 00:06:00,760 --> 00:06:04,159 Speaker 1: a relatively small force. It's not alone a lot of 87 00:06:04,200 --> 00:06:08,480 Speaker 1: ground troops. It's more air force. But uh, the first 88 00:06:08,600 --> 00:06:10,960 Speaker 1: sort of ringer for the Russians was at the G 89 00:06:11,160 --> 00:06:16,440 Speaker 1: seven meeting where us uk um and maybe Germany. I know, 90 00:06:16,560 --> 00:06:20,640 Speaker 1: actually Germany was against it. They tried uh to impose 91 00:06:20,760 --> 00:06:26,159 Speaker 1: additional sanctions against Russia because of the Syrian chemical attack. 92 00:06:26,240 --> 00:06:30,760 Speaker 1: Italy and Germany where against it. But the Russians continue, 93 00:06:31,440 --> 00:06:33,159 Speaker 1: then we might have to say, maybe they will do 94 00:06:33,240 --> 00:06:35,120 Speaker 1: more sanctions. I'm so sorry, We're gonna have to leave 95 00:06:35,120 --> 00:06:37,200 Speaker 1: it there. We can talk all afternoon. Dr Ariel Cohen, 96 00:06:37,440 --> 00:06:40,080 Speaker 1: Senior Fellow at the Atlantic Council, also director of the 97 00:06:40,120 --> 00:06:44,240 Speaker 1: Center for Energy Natural Resources, and geopolitics at the Institute 98 00:06:44,279 --> 00:06:58,640 Speaker 1: for Analysis of Global Security. We want to get the 99 00:06:58,680 --> 00:07:01,800 Speaker 1: voice of an executive from the automobile industry joining us 100 00:07:01,800 --> 00:07:03,720 Speaker 1: now as Ian Robertson. He is a member of the 101 00:07:03,760 --> 00:07:08,120 Speaker 1: Board of Management and Global Sales and Marketing director for BMW. 102 00:07:08,360 --> 00:07:11,800 Speaker 1: He joins us today from the New York International Auto Show, 103 00:07:11,840 --> 00:07:14,720 Speaker 1: taking place at the Jacob Javits Center in New York. 104 00:07:15,000 --> 00:07:17,320 Speaker 1: Ian Robertson, thank you very much for being with us. 105 00:07:19,000 --> 00:07:20,360 Speaker 1: Good to be with you. All right. I want to 106 00:07:20,360 --> 00:07:21,880 Speaker 1: give you the chance, first of all, just to give 107 00:07:21,960 --> 00:07:25,640 Speaker 1: us an update on some sales reports that you've just released, 108 00:07:25,640 --> 00:07:28,520 Speaker 1: and then we'll get into the details of what you're unveiling, 109 00:07:28,560 --> 00:07:31,680 Speaker 1: what you're showing off at the New York International Auto Show. 110 00:07:33,520 --> 00:07:36,440 Speaker 1: You know, we just announced quality results. They're up around 111 00:07:36,440 --> 00:07:39,040 Speaker 1: five and a half percent. But I think a notable 112 00:07:39,080 --> 00:07:42,800 Speaker 1: achievement was we did two fifty four thousand sales in 113 00:07:42,880 --> 00:07:45,520 Speaker 1: March alone, and it wouldn't have been that long ago 114 00:07:45,600 --> 00:07:47,560 Speaker 1: where that sort of number would have been almost an 115 00:07:47,600 --> 00:07:50,480 Speaker 1: impossible dreams. So I'm delighted with the performance. Right around 116 00:07:50,480 --> 00:07:53,720 Speaker 1: the world during Q one, we've heard a lot, particularly 117 00:07:53,800 --> 00:07:58,200 Speaker 1: in the US, about lower resale values of cars and 118 00:07:58,520 --> 00:08:01,720 Speaker 1: that you know, frankly, people have been saturated, They borrowed 119 00:08:01,800 --> 00:08:04,120 Speaker 1: so much that they aren't going to buy that much 120 00:08:04,200 --> 00:08:08,040 Speaker 1: more in the near future. How come BMW isn't reflecting 121 00:08:08,120 --> 00:08:12,920 Speaker 1: that in their March sales. You know, I'm on the 122 00:08:13,000 --> 00:08:16,720 Speaker 1: record of saying at the start of that I thought 123 00:08:16,720 --> 00:08:19,200 Speaker 1: the US market had pete. I thought it was being 124 00:08:19,240 --> 00:08:21,120 Speaker 1: over pushed. I thought there was a lot of inventory 125 00:08:21,160 --> 00:08:23,000 Speaker 1: on the ground, and you know that proved to be 126 00:08:23,080 --> 00:08:25,800 Speaker 1: the case. We we cut our inventory a lot last year. 127 00:08:26,680 --> 00:08:29,480 Speaker 1: We didn't chase the last volume, which I think was 128 00:08:29,520 --> 00:08:32,120 Speaker 1: an important step because at the end of the day, 129 00:08:32,240 --> 00:08:35,319 Speaker 1: you know, we're driving for a profitability position as well. 130 00:08:35,800 --> 00:08:40,240 Speaker 1: Um So from that perspective, you know, our results actually 131 00:08:40,360 --> 00:08:43,959 Speaker 1: underscore that. As we come into this year, GDP numbers 132 00:08:43,960 --> 00:08:47,480 Speaker 1: are good, the unemployment figures are also good, and I think, 133 00:08:47,679 --> 00:08:50,199 Speaker 1: you know, there are some encouraging signs on Wall Street. 134 00:08:50,360 --> 00:08:52,679 Speaker 1: Having said all of that, I don't expect a lot 135 00:08:52,760 --> 00:08:55,480 Speaker 1: of upside in the in the US market this year 136 00:08:55,880 --> 00:08:59,480 Speaker 1: as well. So I'm very much in the position of 137 00:08:59,520 --> 00:09:02,959 Speaker 1: we're going to a flat maybe single digit growth. We 138 00:09:03,040 --> 00:09:05,720 Speaker 1: saw that in Q one. Let's see how it develops. 139 00:09:05,800 --> 00:09:07,679 Speaker 1: During the rest of the year, But I don't think 140 00:09:07,679 --> 00:09:09,719 Speaker 1: there's a big upside in the US market this year. 141 00:09:10,160 --> 00:09:14,040 Speaker 1: Ian Robertson, you almost didn't make it into the automobile industry. 142 00:09:14,320 --> 00:09:19,840 Speaker 1: You studied marine science at I guess the University of Whales, right, 143 00:09:19,880 --> 00:09:21,960 Speaker 1: and you were not going to be in a desert 144 00:09:22,120 --> 00:09:23,880 Speaker 1: or in the North Sea. You wanted to be in 145 00:09:24,000 --> 00:09:26,439 Speaker 1: something that you were passionate about when you when you 146 00:09:26,640 --> 00:09:29,120 Speaker 1: joined the Rover at the age of seventeen, did you 147 00:09:29,160 --> 00:09:32,440 Speaker 1: ever think you'd be talking about electric and electric hybrid cars? 148 00:09:32,520 --> 00:09:34,760 Speaker 1: I think what BMW sold twenty thousand of them, or 149 00:09:34,760 --> 00:09:39,040 Speaker 1: at least delivered more than twenty thousand so far. That's true. 150 00:09:39,080 --> 00:09:41,280 Speaker 1: I actually joined the car industry straight from university when 151 00:09:41,320 --> 00:09:43,600 Speaker 1: I was twenty one, but that's a long time ago 152 00:09:43,640 --> 00:09:47,360 Speaker 1: as well. Now it's thirty eight years uh this this year, 153 00:09:47,520 --> 00:09:50,839 Speaker 1: so you know, from that perspective, the industry has changed 154 00:09:50,880 --> 00:09:53,840 Speaker 1: a lot. But you know, I'm also of the opinion 155 00:09:53,920 --> 00:09:55,480 Speaker 1: that what we're going to see in the next five 156 00:09:55,640 --> 00:09:58,319 Speaker 1: or seven years will probably be more changed than we've 157 00:09:58,360 --> 00:10:00,360 Speaker 1: seen in the past hundred and the car the street 158 00:10:00,360 --> 00:10:04,199 Speaker 1: BMW included is just over a hundred years old and 159 00:10:04,320 --> 00:10:07,679 Speaker 1: that's because we're seeing new path trains, we're seeing new materials, 160 00:10:07,760 --> 00:10:11,319 Speaker 1: were saying new ways of designing cars. We're seeing the 161 00:10:11,480 --> 00:10:13,880 Speaker 1: customer behaving in a way which they haven't done in 162 00:10:13,920 --> 00:10:16,520 Speaker 1: the past. Because you know, we're at the moment, for example, 163 00:10:16,880 --> 00:10:19,720 Speaker 1: renting cars by the minute in many, many cities around 164 00:10:19,720 --> 00:10:23,599 Speaker 1: the world. So all of these changes brought about by digitalization, 165 00:10:23,720 --> 00:10:27,120 Speaker 1: brought about by the new way of thinking with autonomous 166 00:10:27,240 --> 00:10:31,439 Speaker 1: driving and electro mobility are actually changing the whole perspective 167 00:10:31,480 --> 00:10:34,920 Speaker 1: of the industry. It's really really exciting times. Which market 168 00:10:35,080 --> 00:10:38,240 Speaker 1: around the world is the one that has the greatest 169 00:10:38,280 --> 00:10:42,760 Speaker 1: demand for electric cars right now? You know, it very 170 00:10:42,840 --> 00:10:45,640 Speaker 1: much depends at this stage in the development what governments 171 00:10:45,679 --> 00:10:47,760 Speaker 1: are doing. And you know the example I always use 172 00:10:47,840 --> 00:10:50,880 Speaker 1: is Norway. You know, around about six seven years ago 173 00:10:51,080 --> 00:10:55,520 Speaker 1: Northern Norwegian government, by the way, about the Norwegian economy 174 00:10:55,640 --> 00:10:58,640 Speaker 1: is based on oil, they decided that they wanted to 175 00:10:58,679 --> 00:11:02,200 Speaker 1: go for electromobility. As such, they put a big incentive 176 00:11:02,240 --> 00:11:04,440 Speaker 1: in place, no v A T on the cars. They 177 00:11:04,480 --> 00:11:06,720 Speaker 1: allowed people to drive in the bus lane. So if 178 00:11:06,840 --> 00:11:10,040 Speaker 1: you work downtown in Oslo, you can say forty five 179 00:11:10,040 --> 00:11:12,120 Speaker 1: minutes in the morning, forty five minutes in the afternoon, 180 00:11:12,559 --> 00:11:17,079 Speaker 1: free charging, free infrastructure. Last year, over twenty of the 181 00:11:17,240 --> 00:11:20,600 Speaker 1: total market was electric. If you look at other governments 182 00:11:20,640 --> 00:11:23,920 Speaker 1: who've done similar things, that's where it really works well. 183 00:11:24,080 --> 00:11:27,280 Speaker 1: And I think we are seeing now an acceleration of 184 00:11:27,360 --> 00:11:30,560 Speaker 1: this right around the world. You know, I'm struck by 185 00:11:30,960 --> 00:11:33,400 Speaker 1: the US and how different it is in the U 186 00:11:33,559 --> 00:11:36,400 Speaker 1: s which is the biggest car market. Correct or is 187 00:11:36,600 --> 00:11:38,199 Speaker 1: China Ano the biggest car up market or is it 188 00:11:38,320 --> 00:11:41,160 Speaker 1: still the US? It's still the US right now. China 189 00:11:41,240 --> 00:11:43,040 Speaker 1: is now the biggest car market in the world. China 190 00:11:43,600 --> 00:11:46,079 Speaker 1: overtook the US three or four years ago. Wow, and 191 00:11:46,160 --> 00:11:48,360 Speaker 1: way behind the times. Thank you for that clarification. So 192 00:11:48,720 --> 00:11:51,400 Speaker 1: in the US, which is a massive car market, you 193 00:11:51,480 --> 00:11:54,959 Speaker 1: have people going to trucks, uh, and you have you know, 194 00:11:55,160 --> 00:11:57,880 Speaker 1: this sort of move back toward fossil fuel vehicles. Is 195 00:11:57,920 --> 00:12:00,679 Speaker 1: there any concern or downside risk that this move to 196 00:12:00,760 --> 00:12:04,880 Speaker 1: electric won't go quickly enough to justify the investments that 197 00:12:05,000 --> 00:12:10,199 Speaker 1: BMW is making in the technology. You know, we we 198 00:12:10,360 --> 00:12:13,360 Speaker 1: look at every market individually, and as I said, government 199 00:12:13,440 --> 00:12:16,800 Speaker 1: policy plays a big part in the actual takeup of 200 00:12:16,880 --> 00:12:20,720 Speaker 1: electronome ability. But over time, you know, we are always 201 00:12:20,840 --> 00:12:24,439 Speaker 1: seeing the reduction in emission levels. It's a very very 202 00:12:24,480 --> 00:12:27,360 Speaker 1: important topic for US and the industry in total. So 203 00:12:27,960 --> 00:12:33,040 Speaker 1: overall this is a progressive position around the world. So, yes, 204 00:12:33,360 --> 00:12:36,120 Speaker 1: trucks are important here. By the way, trucks are important 205 00:12:36,200 --> 00:12:38,040 Speaker 1: or s A V s are important in many many 206 00:12:38,120 --> 00:12:40,520 Speaker 1: markets around the world. In our Q one here in 207 00:12:40,559 --> 00:12:44,079 Speaker 1: the US, we did around trucks, um. But at the 208 00:12:44,160 --> 00:12:47,160 Speaker 1: same time that also tells you that the market is 209 00:12:47,240 --> 00:12:51,120 Speaker 1: non trucks. So from that perspective, it's a good balance. Now, 210 00:12:51,480 --> 00:12:53,679 Speaker 1: Ian Robertson, are you're going to be in Coachella this 211 00:12:53,920 --> 00:12:59,160 Speaker 1: uh this weekend? I'm not. I'm I'm back in Europe 212 00:12:59,200 --> 00:13:01,560 Speaker 1: and I'm under Shane High Alright. The reason I asked 213 00:13:01,840 --> 00:13:04,640 Speaker 1: exactly twelve hours of time delay? Well, the reason I 214 00:13:04,720 --> 00:13:08,199 Speaker 1: asked us because of course BMW is debuting a variety 215 00:13:08,240 --> 00:13:10,719 Speaker 1: of models, the BMW I three Electric. It will be 216 00:13:10,760 --> 00:13:14,040 Speaker 1: at the Music Festival, uh this coming weekend. Tell us 217 00:13:14,040 --> 00:13:19,120 Speaker 1: about the I performance line. You know, I performance is 218 00:13:19,160 --> 00:13:22,600 Speaker 1: in good shape. And this morning in the World Car Awards, 219 00:13:22,679 --> 00:13:24,760 Speaker 1: the I three picked up the Urban Car of the Year, 220 00:13:24,840 --> 00:13:27,840 Speaker 1: so another accolade. And you know last year we did 221 00:13:27,880 --> 00:13:30,240 Speaker 1: sixty two thousand electric cars. We're aiming to do a 222 00:13:30,360 --> 00:13:33,320 Speaker 1: hundred thousand this year. Q one would tell us where 223 00:13:33,559 --> 00:13:36,079 Speaker 1: on target to achieve that, and that tells you this 224 00:13:36,320 --> 00:13:40,000 Speaker 1: momentum is building. So you know, another addition to the 225 00:13:40,120 --> 00:13:42,559 Speaker 1: range is the five thirty can be used in the 226 00:13:42,640 --> 00:13:45,839 Speaker 1: multiple occupancy lanes in California. That's the first as well. 227 00:13:46,240 --> 00:13:48,719 Speaker 1: There are more cars in the pipeline, so we have 228 00:13:49,080 --> 00:13:52,280 Speaker 1: an I eight roadster that's coming, and of course we've 229 00:13:52,280 --> 00:13:55,679 Speaker 1: announced an electric I three, an electric Mini, and what 230 00:13:55,840 --> 00:13:59,079 Speaker 1: we're calling the I Next vehicles. So the trend is 231 00:13:59,320 --> 00:14:02,760 Speaker 1: is very very clear all around the world. Thank you 232 00:14:02,880 --> 00:14:05,880 Speaker 1: so much. Fascinating to hear the new developments. Ian Robertson, 233 00:14:06,000 --> 00:14:09,200 Speaker 1: member of the board of Management and a global sales 234 00:14:09,280 --> 00:14:13,000 Speaker 1: and marketing director for BMW. He was speaking from the 235 00:14:13,120 --> 00:14:15,920 Speaker 1: Javit Center where the New York International Auto Show is. 236 00:14:16,080 --> 00:14:19,720 Speaker 1: Right now and tomorrow we will be broadcasting live from 237 00:14:19,880 --> 00:14:22,480 Speaker 1: the New York International Auto Show at the Javit Center 238 00:14:22,680 --> 00:14:25,640 Speaker 1: to bring you the newest models, the latest automative trends 239 00:14:25,680 --> 00:14:27,480 Speaker 1: and sales outlook. So I'm sure we'll be talking a 240 00:14:27,560 --> 00:14:31,920 Speaker 1: lot more about electric and the push into more varieties 241 00:14:32,160 --> 00:14:34,960 Speaker 1: of such vehicles. I'm Lisa Baram Away's here with pim Fox. 242 00:14:35,080 --> 00:14:50,360 Speaker 1: This is Bloomberg. We are about to get earnings starting 243 00:14:50,440 --> 00:14:53,800 Speaker 1: tomorrow from the biggest bank starting with JP Morgan City 244 00:14:53,840 --> 00:14:56,480 Speaker 1: Group and Wells Fargo, and there are a lot of questions. 245 00:14:56,520 --> 00:14:59,400 Speaker 1: I mean, we know that bond trading revenues are supposed 246 00:14:59,400 --> 00:15:01,040 Speaker 1: to be us and if it, we also know that 247 00:15:01,160 --> 00:15:03,840 Speaker 1: some of the loan loss provisions that they've been setting 248 00:15:03,840 --> 00:15:06,200 Speaker 1: aside are expected to increase. To make sense of all 249 00:15:06,240 --> 00:15:09,480 Speaker 1: of this and give a better vision into what we 250 00:15:09,520 --> 00:15:11,680 Speaker 1: should look for, I want to bring in Michael Scanlon, 251 00:15:11,680 --> 00:15:15,440 Speaker 1: who's a portfolio manager for Menu Life Asset Management. Michael, 252 00:15:15,760 --> 00:15:17,640 Speaker 1: what are you looking for? What do you want to 253 00:15:17,840 --> 00:15:21,560 Speaker 1: know from tomorrow's earnings results? Well, good morning and thanks 254 00:15:21,560 --> 00:15:24,360 Speaker 1: for having me. So there'll be a number of key 255 00:15:24,480 --> 00:15:26,960 Speaker 1: things that people will be focused on with this round 256 00:15:27,000 --> 00:15:30,040 Speaker 1: of earnings. You know, it looks like the market related earnings. 257 00:15:30,280 --> 00:15:32,720 Speaker 1: Market related revenues are going to be up year over year, 258 00:15:33,800 --> 00:15:38,880 Speaker 1: largely largely driven by fixed trading, fixed income currencies and commodities. 259 00:15:39,960 --> 00:15:42,360 Speaker 1: On the net interest margin side, you know, they'll be 260 00:15:43,040 --> 00:15:45,920 Speaker 1: people will be more focused on what the commentary is 261 00:15:45,960 --> 00:15:47,920 Speaker 1: in light of the fact that the yield on the 262 00:15:48,000 --> 00:15:51,520 Speaker 1: tenure has gone down, uh thus far this quarter. And 263 00:15:51,720 --> 00:15:53,720 Speaker 1: the other thing to really keep a focus on is credit. 264 00:15:53,840 --> 00:15:56,200 Speaker 1: You know, there's been obviously a lot written, a lot 265 00:15:56,240 --> 00:15:58,520 Speaker 1: in the press the last handful of weeks here on credit, 266 00:15:58,600 --> 00:16:02,040 Speaker 1: whether it's subprime auto or the credit card companies. Uh So, 267 00:16:02,240 --> 00:16:04,520 Speaker 1: just that there's any change there in terms of realized 268 00:16:04,560 --> 00:16:08,680 Speaker 1: charge off rates are commentary around future expectations. Michael, is 269 00:16:08,800 --> 00:16:11,440 Speaker 1: JP more get expensive if you believe that they're going 270 00:16:11,480 --> 00:16:15,320 Speaker 1: to earn eight bucks a year? Uh So, the well, 271 00:16:15,360 --> 00:16:17,680 Speaker 1: the eight dollar year number is even a little above 272 00:16:17,680 --> 00:16:19,680 Speaker 1: where the street is for next year. But you know 273 00:16:19,760 --> 00:16:22,720 Speaker 1: when you look at that company, um, you know, just 274 00:16:22,880 --> 00:16:25,880 Speaker 1: looking at on a multiple basis, you know, near term, uh, 275 00:16:25,960 --> 00:16:27,920 Speaker 1: it might be a little bit stretched, but obviously this 276 00:16:28,080 --> 00:16:30,680 Speaker 1: is a franchise that has tremendous earnings power going forward. 277 00:16:31,240 --> 00:16:34,960 Speaker 1: And when you think about the potential lightning for the 278 00:16:35,040 --> 00:16:39,800 Speaker 1: regulatory environment or potentially a lighter ce car touch, uh, 279 00:16:39,960 --> 00:16:43,400 Speaker 1: you know, your capital return story could really increase materially there, 280 00:16:43,440 --> 00:16:47,160 Speaker 1: which obviously drives a much better total return for shareholders. Well, Michael, 281 00:16:47,200 --> 00:16:50,480 Speaker 1: talking about the regulatory regime, do you expect that any 282 00:16:50,520 --> 00:16:53,520 Speaker 1: of the banks will address some of the optimism that 283 00:16:53,600 --> 00:16:56,280 Speaker 1: we've seen from investors that there will be sort of 284 00:16:56,320 --> 00:16:59,800 Speaker 1: a pullback with respect particularly to capital requirements that that 285 00:17:00,240 --> 00:17:02,640 Speaker 1: force these banks to hold chillions of dollars of h 286 00:17:02,840 --> 00:17:07,040 Speaker 1: safe assets. Well, maybe you get some commentary around that 287 00:17:07,160 --> 00:17:10,840 Speaker 1: and some optimistic views, but I mean, frankly, nobody has 288 00:17:10,920 --> 00:17:13,040 Speaker 1: insight into exactly what's going to go on there in 289 00:17:13,200 --> 00:17:16,399 Speaker 1: terms of lightning the touch. Uh So it would all 290 00:17:16,480 --> 00:17:19,920 Speaker 1: be very subjective comments, uh, and nothing that you could 291 00:17:20,000 --> 00:17:23,719 Speaker 1: objectively measure at this point. Although Michael, as a portfolio manager, 292 00:17:23,840 --> 00:17:27,200 Speaker 1: when do you have to see something concrete in order 293 00:17:27,320 --> 00:17:30,320 Speaker 1: to decide whether or not to buy into this idea 294 00:17:30,480 --> 00:17:34,879 Speaker 1: of less regulation and perhaps lower capital buffers. Yeah, so 295 00:17:35,000 --> 00:17:36,439 Speaker 1: right now, I think when you look at the stocks, 296 00:17:36,480 --> 00:17:39,240 Speaker 1: that's still sort of uh, you know, not really priced 297 00:17:39,280 --> 00:17:41,240 Speaker 1: into the stocks. It's still somewhat of a free call 298 00:17:41,320 --> 00:17:43,399 Speaker 1: option on the future. I think when you look at 299 00:17:43,400 --> 00:17:45,360 Speaker 1: a lot of these franchises, and you know, we've talked 300 00:17:45,359 --> 00:17:48,920 Speaker 1: about GP Morgan specifically, I mean that's a company where, um, 301 00:17:49,160 --> 00:17:51,080 Speaker 1: you know, they've still got a lot of earnings leverage 302 00:17:51,119 --> 00:17:53,760 Speaker 1: going forward, and then if you're talking about taking their 303 00:17:53,800 --> 00:17:57,439 Speaker 1: payout ratio between buy back and dividends, you know, somewhere 304 00:17:57,520 --> 00:18:00,360 Speaker 1: closer to a full return of earn is on an 305 00:18:00,400 --> 00:18:03,200 Speaker 1: annual basis. Um. You know, at this point, I don't 306 00:18:03,200 --> 00:18:05,200 Speaker 1: think the market is pricing that in it all. So 307 00:18:05,280 --> 00:18:08,680 Speaker 1: if we do get positive, um, you know, concrete details 308 00:18:08,720 --> 00:18:11,879 Speaker 1: on exactly what's going on there, that could drive further upside. Michael, 309 00:18:11,880 --> 00:18:15,040 Speaker 1: I want to get your thoughts on Wells Fargo and 310 00:18:15,200 --> 00:18:17,479 Speaker 1: the performance that Tim Sloan is doing. Stock is down 311 00:18:17,520 --> 00:18:19,520 Speaker 1: about two and three quarters of our percent so far 312 00:18:19,640 --> 00:18:22,880 Speaker 1: this year, pays nearly a three percent dividend. How's Tim 313 00:18:22,960 --> 00:18:29,080 Speaker 1: Sloan reviving Wells Fargo? Yeah, so obviously Wells fargoes and 314 00:18:29,200 --> 00:18:32,359 Speaker 1: the crosshairs right now in terms of the fact that 315 00:18:32,480 --> 00:18:35,679 Speaker 1: this this issue from late last year is still lingering. Uh, 316 00:18:35,800 --> 00:18:38,480 Speaker 1: that's not a stock that we currently have in our portfolio. 317 00:18:38,800 --> 00:18:41,199 Speaker 1: The issue, I'm sorry, Michael, the issue that you're referencing 318 00:18:41,400 --> 00:18:44,920 Speaker 1: has to do with the opening of fraudulent accounts by 319 00:18:45,400 --> 00:18:48,600 Speaker 1: members of the workforce at Wells Fargo in order to 320 00:18:48,640 --> 00:18:52,120 Speaker 1: meet sales goals. At least that's the allegations, correct, correct, Yeah, 321 00:18:52,160 --> 00:18:55,040 Speaker 1: just the aggressive sales tactics. And you know what ultimately 322 00:18:55,119 --> 00:18:59,080 Speaker 1: looks like some fraud um and clawback executive pay clawbacks 323 00:19:00,000 --> 00:19:02,639 Speaker 1: actly two and the cloud back executive compensation in light 324 00:19:02,720 --> 00:19:05,000 Speaker 1: of the discoveries there. You know, I think when you 325 00:19:05,080 --> 00:19:08,280 Speaker 1: look at Wells, obviously still a great franchise. Uh, you know, 326 00:19:08,480 --> 00:19:10,760 Speaker 1: right now, we don't own the stock in the portfolio. 327 00:19:10,920 --> 00:19:12,960 Speaker 1: We think there's still a bit of an overhang with 328 00:19:13,040 --> 00:19:15,800 Speaker 1: this ongoing investigation. Maybe the news even gets a little 329 00:19:15,840 --> 00:19:18,560 Speaker 1: bit worse from here. Um. But frankly, when we look 330 00:19:18,600 --> 00:19:21,080 Speaker 1: at our portfolio, we like some of these names that 331 00:19:21,160 --> 00:19:23,840 Speaker 1: have more capital markets exposure because we think there's more 332 00:19:24,000 --> 00:19:26,720 Speaker 1: upside there. So some of our bigger holdings in the 333 00:19:26,800 --> 00:19:29,920 Speaker 1: portfolio GP Oregon City Group, which is got to bias 334 00:19:29,960 --> 00:19:32,560 Speaker 1: towards that side of the market. Michael, where do you 335 00:19:32,720 --> 00:19:37,320 Speaker 1: think the positive momentum is coming from within the credit side? 336 00:19:37,400 --> 00:19:41,119 Speaker 1: Is it coming from the incredible amount of investment rate 337 00:19:41,200 --> 00:19:44,000 Speaker 1: bond issuance? Is it coming from uncertainty around the FED? 338 00:19:44,480 --> 00:19:46,960 Speaker 1: What's your view on this? Yeah, I would say it's 339 00:19:46,960 --> 00:19:48,960 Speaker 1: a combination of both those things. Actually. I mean, you 340 00:19:49,000 --> 00:19:51,360 Speaker 1: think about what everything is going on around the world 341 00:19:51,400 --> 00:19:54,359 Speaker 1: in terms of central bank activity right now. You know, 342 00:19:54,440 --> 00:19:57,240 Speaker 1: the Fed's already increased rates, are going to continue increasing 343 00:19:57,359 --> 00:20:00,840 Speaker 1: rates this year. Obviously, recently we've gotten some updates in 344 00:20:01,000 --> 00:20:03,520 Speaker 1: terms of the expectation that the FED might be shrinking 345 00:20:03,560 --> 00:20:05,520 Speaker 1: the balance sheet come the end of the year. The 346 00:20:05,600 --> 00:20:09,159 Speaker 1: ECB is contemplating doing a rate hike and potentially lightening 347 00:20:09,200 --> 00:20:11,960 Speaker 1: their balance sheet as well, So that should induce some 348 00:20:12,040 --> 00:20:16,040 Speaker 1: more volatility into rates, which is ultimately good for these uh, 349 00:20:16,280 --> 00:20:18,320 Speaker 1: these banks which are sensitive to that part of the 350 00:20:18,400 --> 00:20:21,320 Speaker 1: market and their earnings. Uh. And then you know you 351 00:20:21,400 --> 00:20:24,160 Speaker 1: also spoke about issuance, right, I mean, whether it's hie 352 00:20:24,240 --> 00:20:27,320 Speaker 1: yield investment grade that the bond markets are definitely still 353 00:20:27,400 --> 00:20:31,320 Speaker 1: open for business. All these deals are multiple times over subscribe, 354 00:20:31,400 --> 00:20:33,879 Speaker 1: so um, you know that's that side of the business 355 00:20:33,960 --> 00:20:35,960 Speaker 1: for these folks is very strong right now. So that 356 00:20:36,080 --> 00:20:38,560 Speaker 1: means that you like JP Morgan and City Group to 357 00:20:38,800 --> 00:20:43,280 Speaker 1: the top fixed income trading revenue shops by by revenue globally. 358 00:20:44,200 --> 00:20:45,680 Speaker 1: I think that's a fair comment. Yeah, and then we 359 00:20:45,760 --> 00:20:48,800 Speaker 1: also own uh Goldman Sacks as well, which would have 360 00:20:48,800 --> 00:20:51,639 Speaker 1: exposed to that part of the market. Michael Scalon, we 361 00:20:51,960 --> 00:20:54,720 Speaker 1: just quickly your thoughts on the re emergence of Glass 362 00:20:55,000 --> 00:20:58,399 Speaker 1: Stiegel at least coming from Washington and several proposals that 363 00:20:58,520 --> 00:21:02,480 Speaker 1: we expect from the Treasury secret To Stephen Manuchin. Yes, 364 00:21:02,640 --> 00:21:06,000 Speaker 1: I can't say, um, I have any terribly unique ins 365 00:21:06,480 --> 00:21:08,760 Speaker 1: into the expectations there. What I would say is, you know, 366 00:21:08,840 --> 00:21:11,240 Speaker 1: we live in a very different world today from the 367 00:21:11,280 --> 00:21:14,600 Speaker 1: structure of the capital markets perspective, UM, and it's going 368 00:21:14,640 --> 00:21:16,800 Speaker 1: to take a pretty unique proposal. I'm not sure they 369 00:21:16,840 --> 00:21:18,280 Speaker 1: could go back to what was in place in the 370 00:21:18,359 --> 00:21:20,359 Speaker 1: late nineties. That probably have to do something which is 371 00:21:20,400 --> 00:21:23,280 Speaker 1: pretty materially different. UM. So we'll have to wait and 372 00:21:23,320 --> 00:21:25,520 Speaker 1: see what the structure of the proposals will look like. 373 00:21:25,840 --> 00:21:27,200 Speaker 1: Al Right, I want to thank you very much for 374 00:21:27,320 --> 00:21:30,640 Speaker 1: joining us. Michael Scanlon his portfolio manager from Manual Life 375 00:21:30,720 --> 00:21:34,320 Speaker 1: Asset Management. He joins us from Boston, home to Bloomberg 376 00:21:34,520 --> 00:21:37,440 Speaker 1: twelve hundred and of course, so we're talking about bank stocks, 377 00:21:37,480 --> 00:21:40,280 Speaker 1: and banks will be releasing their earnings, beginning with JP Morgan. 378 00:21:40,400 --> 00:21:42,600 Speaker 1: They will release their earnings tomorrow. We will cover them 379 00:21:42,680 --> 00:21:46,160 Speaker 1: right here on Bloomberg Live. And also city groups they'll 380 00:21:46,160 --> 00:21:47,720 Speaker 1: be coming out with their earnings as well. We also 381 00:21:47,760 --> 00:21:49,440 Speaker 1: look forward to Wells Fargo and then I guess the 382 00:21:49,840 --> 00:21:52,600 Speaker 1: next week put it on your calendar. We've got black 383 00:21:52,680 --> 00:22:08,320 Speaker 1: Rock Reports, right, biggest ETF house. There you go while 384 00:22:08,440 --> 00:22:10,760 Speaker 1: coming up, you know, Lisa brahma Witz, I think of 385 00:22:10,920 --> 00:22:12,440 Speaker 1: May and I think of Memorial Day. You know what 386 00:22:12,520 --> 00:22:19,000 Speaker 1: I think of the Indianapolis five race. Yes, you don't 387 00:22:19,040 --> 00:22:21,760 Speaker 1: think about that? No? Al right, well you are going 388 00:22:21,800 --> 00:22:24,000 Speaker 1: to think about it, because not only is the Indianapolis 389 00:22:24,040 --> 00:22:27,080 Speaker 1: five taking place, but the weekend, I believe the weekend 390 00:22:27,119 --> 00:22:29,639 Speaker 1: before that, two weekends before that, there's gonna be a 391 00:22:29,800 --> 00:22:34,480 Speaker 1: major auction of classic automobiles in Indianapolis. And we're lucky 392 00:22:34,520 --> 00:22:37,159 Speaker 1: to have Dave Majors. He's the chief executive officer of 393 00:22:37,280 --> 00:22:40,320 Speaker 1: Meekam Auctions, joining us along with Frank Meekam. He's the 394 00:22:40,400 --> 00:22:45,119 Speaker 1: director of Consignment also obviously of Mekam Auctions. Gentlemen, thank 395 00:22:45,160 --> 00:22:47,439 Speaker 1: you very much for being here in the studio. Um, 396 00:22:47,600 --> 00:22:49,600 Speaker 1: you know, I want to start off with you, Dave, 397 00:22:49,720 --> 00:22:52,960 Speaker 1: maybe just give us an overview of the market, because boy, 398 00:22:53,000 --> 00:22:55,879 Speaker 1: you know, if you look at the prices of muscle 399 00:22:56,000 --> 00:22:59,840 Speaker 1: cars and we'll define that or you'll help us define 400 00:23:00,040 --> 00:23:04,919 Speaker 1: uh uh, they are just skyrocketed. What is the reason 401 00:23:05,040 --> 00:23:08,680 Speaker 1: behind this and is it sustainable? Well that the entire 402 00:23:08,720 --> 00:23:11,840 Speaker 1: collector car market has been a great market for the 403 00:23:11,960 --> 00:23:14,560 Speaker 1: last ten fifteen years, and I think the numbers if 404 00:23:14,600 --> 00:23:18,240 Speaker 1: you look at various research collector car markets returned over 405 00:23:18,320 --> 00:23:20,879 Speaker 1: fo over the last ten years. As a as an 406 00:23:20,920 --> 00:23:24,560 Speaker 1: alternative asset class, our bread and butter is the American 407 00:23:24,640 --> 00:23:27,000 Speaker 1: muscle car. Of course, we we sell pre war, we 408 00:23:27,119 --> 00:23:30,399 Speaker 1: have exotics, and we do a lot of sixties and 409 00:23:30,480 --> 00:23:34,200 Speaker 1: seventies American muscle cars. And I think right now nothing 410 00:23:34,359 --> 00:23:37,560 Speaker 1: is hotter than that market. And it's the as as 411 00:23:37,640 --> 00:23:41,480 Speaker 1: Frank Meekham has described it. It's the blue collar collector market, 412 00:23:42,119 --> 00:23:45,240 Speaker 1: the high end market, the high end Ferrari European market 413 00:23:45,359 --> 00:23:47,960 Speaker 1: is cooled off just a little bit, but as it does, 414 00:23:48,040 --> 00:23:50,080 Speaker 1: we're seeing our market really start to pick up in 415 00:23:50,119 --> 00:23:53,119 Speaker 1: a lot of activity, particularly uh a latter part of 416 00:23:53,200 --> 00:23:56,440 Speaker 1: two thousand sixteen and so far in seventeen. Uh. Frank, 417 00:23:56,720 --> 00:24:00,840 Speaker 1: to that point, what is the price the average price 418 00:24:01,000 --> 00:24:03,200 Speaker 1: some of your muscle cars that they've been retailing for 419 00:24:03,640 --> 00:24:07,520 Speaker 1: in the past year, and who are the biggest buyers. Well, 420 00:24:07,560 --> 00:24:10,520 Speaker 1: you take a look at the price of the American 421 00:24:10,600 --> 00:24:15,840 Speaker 1: muscle cars. You're seeing cars that uh eighteen months ago 422 00:24:16,080 --> 00:24:20,399 Speaker 1: that we're fifty sixty thousand trading close to over a 423 00:24:20,520 --> 00:24:23,720 Speaker 1: hundred thousand. I think your average price is going to 424 00:24:23,800 --> 00:24:28,040 Speaker 1: be in that fifty to seventy range on American muscle cars. 425 00:24:28,480 --> 00:24:30,600 Speaker 1: But you have cars that you get up on the 426 00:24:30,680 --> 00:24:36,240 Speaker 1: high end, uh of the elite cars, the heavy COODA convertibles, 427 00:24:36,440 --> 00:24:43,119 Speaker 1: the uh ZL ones, the the top collector talking to corvettes, 428 00:24:43,160 --> 00:24:46,119 Speaker 1: and a variety of of makes right, because it's all 429 00:24:46,200 --> 00:24:48,600 Speaker 1: over the map. Yeah yeah, So okay, so let's let's 430 00:24:48,640 --> 00:24:49,919 Speaker 1: let's do this. And I want to start off by 431 00:24:50,040 --> 00:24:53,200 Speaker 1: just you know, favoring Greg Jared in our newsroom because 432 00:24:53,480 --> 00:24:57,199 Speaker 1: I understand that you've got a n Pontiac GTO convertible 433 00:24:57,440 --> 00:25:00,480 Speaker 1: that is coming on the auction block. What what what 434 00:25:01,280 --> 00:25:03,560 Speaker 1: kind of price range are you talking about there? Well, 435 00:25:03,640 --> 00:25:06,800 Speaker 1: when you the g t O convertible that we have 436 00:25:07,359 --> 00:25:09,480 Speaker 1: is a great car to talk about because when you 437 00:25:09,520 --> 00:25:13,000 Speaker 1: talk about the muscle car era, that is truly the 438 00:25:13,560 --> 00:25:15,840 Speaker 1: first car of the era and what what is known 439 00:25:15,880 --> 00:25:19,040 Speaker 1: as the car that started the era. So you're talking 440 00:25:19,160 --> 00:25:22,480 Speaker 1: about a car that is going to be in the 441 00:25:22,840 --> 00:25:26,600 Speaker 1: seventy thousand dollar range. And Dave, you know, as we 442 00:25:26,720 --> 00:25:29,159 Speaker 1: talk about seventy two hundred thousand dollars blue collar car. 443 00:25:29,240 --> 00:25:31,800 Speaker 1: I mean it's not quite blue collar anymore. Who are 444 00:25:31,880 --> 00:25:35,840 Speaker 1: the buyers of this? Well, buyers tend to be um 445 00:25:36,560 --> 00:25:40,200 Speaker 1: entrepreneurs who have been very successful in their businesses. Some 446 00:25:40,359 --> 00:25:45,879 Speaker 1: of them looked to collector cars as an investment, but 447 00:25:46,280 --> 00:25:47,919 Speaker 1: a great many of them are looking to collect your 448 00:25:47,960 --> 00:25:51,520 Speaker 1: cars as as just a passion that happens to have 449 00:25:51,960 --> 00:25:54,800 Speaker 1: a good investment returns as well. It's the stock portfolio 450 00:25:54,880 --> 00:25:56,480 Speaker 1: you can take to the park and show your friends 451 00:25:56,520 --> 00:25:58,640 Speaker 1: on Sunday afternoon. How many cars do you have? Again, 452 00:25:59,160 --> 00:26:01,560 Speaker 1: I have more than my share. It somewhere around twelve. 453 00:26:02,600 --> 00:26:04,920 Speaker 1: Somewhere around twelve. I like that. It's always good to 454 00:26:05,000 --> 00:26:07,720 Speaker 1: be vague when you go past a dozen. Uh. You know. 455 00:26:07,880 --> 00:26:11,320 Speaker 1: I want to ask you though about the issue of providence, 456 00:26:11,480 --> 00:26:14,680 Speaker 1: because a lot of people who collect automobiles, just like 457 00:26:14,800 --> 00:26:17,359 Speaker 1: anything else, they want to know who owned it. They 458 00:26:17,400 --> 00:26:20,040 Speaker 1: want to know whether the engine is the original engine, 459 00:26:20,080 --> 00:26:23,840 Speaker 1: whether it's been restored. Maybe you could just define fink 460 00:26:23,960 --> 00:26:26,280 Speaker 1: some of these details, because you know, you talk about 461 00:26:26,359 --> 00:26:28,240 Speaker 1: is it a driver, is it a show car? Is 462 00:26:28,280 --> 00:26:32,920 Speaker 1: it a barn find? Well, it's like any other collectible. Uh, 463 00:26:33,400 --> 00:26:37,720 Speaker 1: there's different grades of collectibility. Uh. You start at your 464 00:26:37,840 --> 00:26:41,520 Speaker 1: entry level uh driver and collector cars UM that are 465 00:26:41,560 --> 00:26:44,280 Speaker 1: anywhere from ten to thirty thousand dollars and start working 466 00:26:44,320 --> 00:26:47,320 Speaker 1: your way up. But when you start talking about providence, UH, 467 00:26:47,440 --> 00:26:50,920 Speaker 1: you're talking about things. Does it has uh factory paperwork 468 00:26:51,000 --> 00:26:53,119 Speaker 1: for when the car was sold new? Do you have 469 00:26:53,480 --> 00:26:57,480 Speaker 1: the original invoice or a build sheet? I'm thinking of 470 00:26:57,560 --> 00:27:01,800 Speaker 1: this nine Ford Mustang at is coming up for auction, right. 471 00:27:01,800 --> 00:27:04,600 Speaker 1: I think it's got number it's number two, serial number 472 00:27:04,640 --> 00:27:09,440 Speaker 1: two that rolled off the the production line and the 473 00:27:09,560 --> 00:27:12,680 Speaker 1: only other car H serial number one is that of 474 00:27:12,840 --> 00:27:18,080 Speaker 1: course at the museum. When you talk about such huge 475 00:27:18,160 --> 00:27:21,480 Speaker 1: returns and from the from an investment standpoint, Dave, have 476 00:27:21,640 --> 00:27:26,080 Speaker 1: you ever in your history working with muscle cars or 477 00:27:27,000 --> 00:27:31,960 Speaker 1: uh collectors cars, ever seen such quick appreciation? Well, I think, 478 00:27:32,040 --> 00:27:35,560 Speaker 1: particularly for some cars, UM, you know, the appreciation was 479 00:27:35,880 --> 00:27:38,920 Speaker 1: might have been on that level of unsustainable. But the 480 00:27:39,000 --> 00:27:41,480 Speaker 1: American muscle cars really are just starting to take off. 481 00:27:41,560 --> 00:27:43,760 Speaker 1: And I think one of the things that we're most 482 00:27:43,800 --> 00:27:47,240 Speaker 1: proud of is we're starting to see American cars sixties 483 00:27:47,280 --> 00:27:50,520 Speaker 1: and seventies American muscle cars bring two and three million 484 00:27:50,560 --> 00:27:53,040 Speaker 1: dollars at auction, which puts them in the same class 485 00:27:53,080 --> 00:27:57,000 Speaker 1: as the traditional high value European cars, and so we're 486 00:27:57,160 --> 00:28:00,119 Speaker 1: generating respect. But but is this sort of gay mean 487 00:28:00,600 --> 00:28:04,680 Speaker 1: the rapid game is this unprecedented for American moss of cars? Well, 488 00:28:05,200 --> 00:28:09,040 Speaker 1: oftentimes the question is is the is the rapid gain 489 00:28:09,080 --> 00:28:13,760 Speaker 1: of bubble? But bubbles typically are driven by by speculation, 490 00:28:14,680 --> 00:28:17,399 Speaker 1: and this is a market that's not driven by speculation. 491 00:28:17,480 --> 00:28:21,040 Speaker 1: This is driven by patient So um, it's this is 492 00:28:21,160 --> 00:28:25,240 Speaker 1: unlike other financial markets where you see the the ups 493 00:28:25,280 --> 00:28:27,920 Speaker 1: and downs that are driven by supply and demand. This 494 00:28:28,119 --> 00:28:31,000 Speaker 1: is this is driven by people that truly love the 495 00:28:31,040 --> 00:28:33,920 Speaker 1: cars that they're buying that happened to be good investments 496 00:28:33,920 --> 00:28:36,240 Speaker 1: and good investment returns as well. So you know, I 497 00:28:36,520 --> 00:28:39,880 Speaker 1: don't see this market, you know, functioning like other markets 498 00:28:39,920 --> 00:28:43,120 Speaker 1: and having corrections. Well, Greg Jared in our newsroom has 499 00:28:43,200 --> 00:28:45,320 Speaker 1: just to signal me that he'd like me to purchase 500 00:28:45,480 --> 00:28:49,880 Speaker 1: the g t O. The GTO He says he deserves it. 501 00:28:50,360 --> 00:28:52,719 Speaker 1: I don't know, maybe he deserves the sixty nine Chevrolet 502 00:28:52,840 --> 00:28:55,960 Speaker 1: Camaro SS that's also coming on the auction block. What 503 00:28:56,080 --> 00:28:59,040 Speaker 1: he estimate that to go for? Well, Camaros have always 504 00:28:59,160 --> 00:29:03,320 Speaker 1: been our bread and butter. It's a car that the 505 00:29:03,440 --> 00:29:07,080 Speaker 1: American public has always recognized, uh, you know, probably one 506 00:29:07,120 --> 00:29:11,720 Speaker 1: of the behind only Mustang and Corvette is the number 507 00:29:11,800 --> 00:29:16,800 Speaker 1: one brand in the American car world. Um, it's a 508 00:29:16,880 --> 00:29:19,680 Speaker 1: car that it can be very reasonable and you can 509 00:29:19,720 --> 00:29:21,840 Speaker 1: get in the twenty thirty thou range where you can 510 00:29:21,920 --> 00:29:27,640 Speaker 1: have a Camaro that'll bring six seved So Greg Jarrett 511 00:29:27,680 --> 00:29:31,040 Speaker 1: now has his face pressed against the glass and I'm saying, please, please, 512 00:29:31,520 --> 00:29:33,640 Speaker 1: We'll save him. Maybe you could chill out that three 513 00:29:33,640 --> 00:29:37,880 Speaker 1: million dollars. He's even allowed to touch it if it's well. 514 00:29:38,000 --> 00:29:41,520 Speaker 1: We appreciate, we appreciate you guys coming in here. Dave 515 00:29:41,600 --> 00:29:45,160 Speaker 1: Major's chief executive officer of Makom Auctions, as well as 516 00:29:45,200 --> 00:29:49,240 Speaker 1: Frank Meecom, director of consignment at the firm, which is 517 00:29:49,280 --> 00:29:52,880 Speaker 1: based in Walworth, Wisconsin, which is where my mother is from. 518 00:29:52,960 --> 00:30:01,440 Speaker 1: So nice to see you guys. Thanks for listening to 519 00:30:01,440 --> 00:30:04,760 Speaker 1: the Bloomberg pien L podcast. You can subscribe and listen 520 00:30:04,840 --> 00:30:10,160 Speaker 1: to interviews at iTunes, SoundCloud, or whatever podcast platform you prefer. 521 00:30:10,480 --> 00:30:13,720 Speaker 1: I'm Pim Fox. I'm out there on Twitter at pim Fox. 522 00:30:14,080 --> 00:30:16,760 Speaker 1: I'm out there on Twitter at Lisa Abramo it's one 523 00:30:17,040 --> 00:30:19,760 Speaker 1: before the podcast. You can always catch us worldwide on 524 00:30:19,840 --> 00:30:20,600 Speaker 1: Bloomberg Radio