Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside
Speaker 1: my co host Matt Miller.
Speaker 2: Every business day, we bring you interviews from CEOs, market pros,
Speaker 2: and Bloomberg experts, along with essential market moving news.
Speaker 1: Find the Bloomberg Markets Podcast on Apple Podcasts or wherever
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Speaker 1: Let's go to Ira Jersey. He covers all the interest
Speaker 1: rates stuff for Bloomberg in intelligence.
Speaker 2: Ira.
Speaker 1: You know me, I try to stay away from that
Speaker 1: whole interest rate thing, the whole yield curve discussion. You
Speaker 1: don't want me anywhere near that. But I guess what
Speaker 1: I'm hearing today and over the last couple of days
Speaker 1: is higher for longer for US interest rates. Is that
Speaker 1: what the market's telling.
Speaker 3: You, Well, it's not so much the higher, it's more
Speaker 3: the stay high for longer. So the story really that
Speaker 3: we've been pricing the last couple of days, and we're
Speaker 3: talking about very short term, is the idea that the
Speaker 3: Federal Reserve is not going to be cutting interest rates,
Speaker 3: you know, maybe even into the second half of next year.
Speaker 3: So although we you know, we're still pricing for some
Speaker 3: probability of a hike later this year. The more important
Speaker 3: thing is that we're starting to price out cuts, and
Speaker 3: pricing out cuts is you know, in my opinion, that's
Speaker 3: what the FED is really needed to try to try
Speaker 3: to convince the market of for a long time, because
Speaker 3: the fact that you were pricing in cuts just means
Speaker 3: that the market was was that And if you look
Speaker 3: at equities or credit, markets have just gotten easier and
Speaker 3: financial conditions have eased because people thought that the FED
Speaker 3: was going to be early in cutting rates. And if
Speaker 3: they're not going to cut rates early, then that's just
Speaker 3: as good as hiking.
Speaker 2: Isn't it. I mean, we're getting close to great financial
Speaker 2: crisis levels on rates. How high did we go back
Speaker 2: then on a ten year on the thirty year ioerd
Speaker 2: because that was like the sky is falling and it
Speaker 2: doesn't feel like that at all right now.
Speaker 3: Well, if you're talking about the financial crisis in two
Speaker 3: thousand and seven, eight, you know, when we go back
Speaker 3: to the early two thousands, whereasically back to those levels
Speaker 3: on a lot of the curve, you know after two
Speaker 3: thousand and seven, you know, this is the first time
Speaker 3: we've seen rates basically in the last fifteen years anywhere
Speaker 3: close to these kinds of levels, particularly in the front
Speaker 3: end of the curve.
Speaker 2: It's very isn't that crazy? Ira, Like two thousand and seven,
Speaker 2: two thousand and eight, we barely got above five percent
Speaker 2: on the tenure, right, And that was when like, if
Speaker 2: the TARP vote didn't pass, the United States was going
Speaker 2: to fail as a country. Like, how come were that
Speaker 2: level now?
Speaker 3: Well, mainly because we're in much different inflationary dynamics now
Speaker 3: than we were back then, Right, so we have to
Speaker 3: have a monetary policy that's ultimately going to be more
Speaker 3: restrictive than it was back during the financial crisis. So
Speaker 3: you know, during the financial crisis, you had easing a
Speaker 3: monetary policy, You had the Federal Reserve, Remember you had
Speaker 3: the TARP vote, and then very soon thereafter they started
Speaker 3: their quantitative easing program and whether to buy a lot
Speaker 3: of treasury, started to buy a lot of mortgages. Now
Speaker 3: that's reversing, right, So they started to do that. Remember
Speaker 3: in twenty eighteen, twenty nineteen, the economy started to slow.
Speaker 3: Then you had the pandemic, and that'll cause obviously the
Speaker 3: Federal Reserve to be even easier and way easier even
Speaker 3: than it was during the financial crisis. So I think
Speaker 3: it's a it's reactive right now that we're going to
Speaker 3: see higher rates because of the strength of the economy,
Speaker 3: because of the monetary policy actions by the Fed, and importantly,
Speaker 3: and I think this is definitely can't be underappreciated. And
Speaker 3: if you go back to when the Treasury Department at
Speaker 3: the beginning of the month came out and said we're
Speaker 3: going to issue a trillion dollars of debt this quarter,
Speaker 3: so just the July through September quarter, that was eye
Speaker 3: popping to a lot of people because it was two
Speaker 3: hundred billion dollars more than we thought. And I think
Speaker 3: consensus was probably somewhere near there too. So you have
Speaker 3: supply dynamics on top of a reasonably strong economy and
Speaker 3: monetary policy that's going to stay very uh, you know,
Speaker 3: very tight for a while. All of those things are
Speaker 3: going to mean that rates are going to be you know,
Speaker 3: stuck probably at this these higher levels at least for
Speaker 3: you know, for a few quarters, if not even a year.
Speaker 4: It's no good.
Speaker 1: I'm looking to refinance the mortgage, IRA, You're not helping
Speaker 1: me out whatsoever, all right, No, not at all. Yeah, No, no,
Speaker 1: thank you very much again, Uh Jackson Hole, Wyoming. Matt
Speaker 1: and I will not be there, but our good friends
Speaker 1: at Bloomberg Surveillance will be there.
Speaker 2: And why, I mean, what's the point of even going.
Speaker 1: They're sending, well, they're gonna, They're sending the A team,
Speaker 1: So Ira, does it matter?
Speaker 4: Yeah?
Speaker 1: Does it matter?
Speaker 5: Ira?
Speaker 3: I doubt that that Ja Powell is going to say
Speaker 3: anything to uh, you know, to groundbreaking really because with
Speaker 3: press conferences at every single FOMC meeting, he only uh,
Speaker 3: you know, spoke to us in late July. So it's
Speaker 3: hard to imagine that even though the data has been
Speaker 3: a little bit better maybe than expectations, it hasn't been
Speaker 3: strong enough for you know, for the FED to completely
Speaker 3: change their view. But there will be nuance. I think
Speaker 3: that we'll be listening for so things like if if
Speaker 3: Jay Powell starts talking about the medium term and about
Speaker 3: some of the structural shifts in the in the global
Speaker 3: economy with wages and with supply chains and the like,
Speaker 3: you know, we might be able to at least you know,
Speaker 3: glean some information from there. Will it be massively market moving?
Speaker 4: I doubt it.
Speaker 3: But at the same time, liquidity has been pretty poor,
Speaker 3: which is one of the reasons you've seen such big moves.
Speaker 3: So if he does happen to say something that's a
Speaker 3: little bit unexpected, you could see a pop here and
Speaker 3: there in the market, whether it's you know rates, you know,
Speaker 3: ten year yields, five bases points lower, five bases points.
Speaker 1: Higher, real quick, Ira, Are you surprised how successful Messi's
Speaker 1: been in Miami so far?
Speaker 6: Not really.
Speaker 3: You know, Major League soccer teams have have salary caps,
Speaker 3: and they tend to spend their money more on attacking
Speaker 3: talent than they do on defenders. So Messi is just,
Speaker 3: you know, tearing up a lot of the defenses in
Speaker 3: Major League Soccer.
Speaker 1: It's fun to watch. It'll taste coming to New York
Speaker 1: right now. And John Fair was just saying, I was
Speaker 1: listening on surveillance. A ticket that usually goes for seventy
Speaker 1: five or one hundred bucks in New York for the
Speaker 1: New York Red Red Bulls, when Miami comes in a
Speaker 1: thousand bucks.
Speaker 4: Dude.
Speaker 2: He told me that the DC game tickets start at
Speaker 2: twelve dollars. Yeah, but I mean once Messi and when
Speaker 2: Messi comes, tickets start at four ninety six exactly. That's
Speaker 2: a delta.
Speaker 1: That's a delta. Ira Jersey, thanks so much for joining us.
Speaker 1: Irad Jersey chief US interest rate strategist and soccer strategist
Speaker 1: as well soccer owner. He's a mogul in the world
Speaker 1: of soccer.
Speaker 7: You're listening to the team Can's are live program Bloomberg
Speaker 7: Markets weekdays at ten am Eastern on Bloomberg dot Com,
Speaker 7: the iHeartRadio app, and the Bloomberg Business App, or listen
Speaker 7: on demand wherever you get your podcasts.
Speaker 2: I'm so glad.
Speaker 1: I'm not like like I'm managing a cyclical business. I
Speaker 1: put up a really good quarter. I saw a lot
Speaker 1: of tractors, the farmers in good shape. Yet my stock's
Speaker 1: down four percent because these darn analysts and investors are
Speaker 1: looking six, twelve, eighteen months down the road and saying, hey,
Speaker 1: it can't get any better than it is right now.
Speaker 1: Somebody has to live this on a daily basis is
Speaker 1: Brook Southerland, and she covers all the industrial stuff, including
Speaker 1: dear for Bloomberg Are Opinion.
Speaker 2: Back to news.
Speaker 1: I don't know where are you these things still in
Speaker 1: Bloomberg Opinion bo Yeah, Brook Joints is here in our
Speaker 1: Bloomberg Interactive Brokers Studio. So Brook, what did you take
Speaker 1: of the deer earnings? How's the American farmer doing these days?
Speaker 8: You know, I think they had been doing pretty well,
Speaker 8: you know, on the back of rising crop prices, and
Speaker 8: that really provided an opportunity to go out and replace
Speaker 8: farm equipment because we had a very long period where
Speaker 8: you know, tractors were getting up there in terms of
Speaker 8: duration and people were holding off on purchases, and of
Speaker 8: course we've seen the other end of that, but now,
Speaker 8: you know, we're starting to see some pressure on crop prices,
Speaker 8: just with some of the harvesting proatorns that we've seen.
Speaker 8: But I think, you know, sort of the the crux
Speaker 8: of the issues. If you look at deer's numbers, they're
Speaker 8: very good, but it's not volumes that's really driving everything here.
Speaker 8: It's priced. And they have a ton of pricing power
Speaker 8: because they are such a dominant provider of tractors, and
Speaker 8: they also really have invested in the technology curve in
Speaker 8: terms of making their machines more efficient, more productive for
Speaker 8: those farmers, and that has really helped them get pricing power.
Speaker 8: But I think you have to wonder at what point
Speaker 8: have we reached sort of the peak of pushing through
Speaker 8: these price increases, we start to lap tougher comparisons. Has
Speaker 8: the farmer maybe had enough in terms of those price increases,
Speaker 8: And I think that's why you're seeing some of the
Speaker 8: pressure on the stairs today in the stock.
Speaker 2: Yeah, it's come down substantially, but they're still doing really well.
Speaker 2: I look at comp chart comp on the Bloomberg. It
Speaker 2: automatically defaults to a five year period, and they have
Speaker 2: more than tripled over the past five years. You know,
Speaker 2: compared to an S and P that's up sixty six percent.
Speaker 2: The Industrials index on the S and P is up
Speaker 2: fifty two percent. So they're a huge outperformer, right, Who
Speaker 2: are their biggest competitors? Like, who else has the name, brand,
Speaker 2: recognition and quality of a John Deere?
Speaker 8: I mean, not really anybody, And I think that's why
Speaker 8: they have so much pricing power. I mean, you do
Speaker 8: have competitors like CNH is one that people look at.
Speaker 2: I know is another tractor maker that people like. Lamborghini
Speaker 2: actually makes trackers tractors, not the car company that's owned
Speaker 2: by Folkswagen. But of course, yeah, Lamborghini started out as
Speaker 2: a tractor maker. That's what Feruccio Lamborghini did.
Speaker 1: Before make a better clutch.
Speaker 2: Yeah, that's right. He got in a fight with Enzo
Speaker 2: Ferrari about the clutch and he shifted businesses.
Speaker 8: But CNH has also made some comments about you know,
Speaker 8: we might be reaching sort of the limits of pricing
Speaker 8: increases with that farmer population. But and you know, to
Speaker 8: your point where you've seen that kind of really aggressive
Speaker 8: share climb, this is not the first time we wondered
Speaker 8: if this is as good as it gets for deer,
Speaker 8: because it has been a very good and somewhat prolonged
Speaker 8: ag production cycle here. But you know, at a certain
Speaker 8: point you can't go out forever.
Speaker 1: If I'm a farmer at in Iowa, how long do
Speaker 1: I own it my dear tractor before I replace it?
Speaker 3: Usually?
Speaker 8: I think it depends, I mean again on sort of
Speaker 8: what the market dynamics are and when it is a
Speaker 8: good time to spend on new equipment. And then, like
Speaker 8: I said, you know, they're also investing in better technology
Speaker 8: that can really help on the productivity front, especially for
Speaker 8: farmers that are suffering with labor shortages, to help get
Speaker 8: around some of that. And I think that all sort
Speaker 8: of weighs on the decision making.
Speaker 2: Process labor was an issue for Deer, and they solved
Speaker 2: that pretty quickly. I remember, is that an issue again
Speaker 2: or have they dealt with it for the long term
Speaker 2: and others have to now deal with that same issue.
Speaker 8: Well, I mean, the thing with these union negotiations is
Speaker 8: they kind of come back around.
Speaker 2: Well, That's why I'm wondering, because we're seeing it in
Speaker 2: automotive right the UAW right now is trying to negotiate
Speaker 2: a huge contract with GM and Ford and you also
Speaker 2: see you know, pilots and in airlines. The unions are
Speaker 2: getting agitated again. So has Deer, though, is that sort
Speaker 2: of one tailwind that they've already dealt with this?
Speaker 8: I think that to your point about how well Deer
Speaker 8: has been doing. I think that's one reason why the
Speaker 8: unions feel so empowered is that that was a pretty
Speaker 8: significant wage increase when they struck that deal. And then
Speaker 8: you just look at how successful Deer had has been
Speaker 8: and how much it has been able to increase prices
Speaker 8: for its customers and ramp up profits that it could
Speaker 8: was in a great position to shoulder that extra wage
Speaker 8: costs for those employees. UPS is obviously talking about trying
Speaker 8: to do the same thing down the road. They sounded
Speaker 8: very confident on their earnings call about being able to
Speaker 8: offset those higher wage costs with productivity improvements, investing in automation,
Speaker 8: things like that. And so I think that's what's really
Speaker 8: empowering the unions is they're saying, look, you're really raking
Speaker 8: it in and we want our for sure of that.
Speaker 1: If I'm a farmer in Iowa again, I'm going back
Speaker 1: there and I want to invest in a big tractor.
Speaker 1: Does Deer give me financing or where do I How
Speaker 1: does that work?
Speaker 8: They do have a financing arm?
Speaker 1: Yes, okay, because that guy, I mean, like Ge for example,
Speaker 1: that got to be such a huge part of their business.
Speaker 1: It's not like that for Deer.
Speaker 8: Well, Ge is now out of that.
Speaker 5: That's right.
Speaker 2: It didn't work that well.
Speaker 8: For they went maybe too far, too many different directions
Speaker 8: at the same time.
Speaker 2: But I do wonder though, I mean, is it is
Speaker 2: it a bonus to have your own in house financing
Speaker 2: arm when race ries like this, because you can find
Speaker 2: ways to maybe give customers a better deal than they're
Speaker 2: going to get from their local bank.
Speaker 8: That was always the argument. I mean, that's why Ge
Speaker 8: got into that business in the first place. And you
Speaker 8: know why some of these other companies have these financing arms.
Speaker 8: But it'll certainly be interesting to see how that plays
Speaker 8: out as we get further into this interest.
Speaker 1: Right, we've got you in studio, so we're going to
Speaker 1: just play around here. Rip up the script this, Tom
Speaker 1: Kean would say, US Steel a I didn't even think
Speaker 1: it was still in existence as a company until the
Speaker 1: takeover stuff happened. Where are we with that story here?
Speaker 8: It's it's heating up. It's the center of a binning ward.
Speaker 8: It's one of the oldest American companies, used to be
Speaker 8: one of the biggest, and now it increasingly looks like
Speaker 8: it is going to be bought by somebody.
Speaker 2: But they need so here's another place where unions have
Speaker 2: real strength. Right, Is it the case that the union
Speaker 2: has to support the bid in order for US Steel
Speaker 2: to be able to accept it.
Speaker 8: What US Steel has said is that the union does
Speaker 8: not have a veto over a takeover offer, but they
Speaker 8: do have the ability to mount a counter offer, and
Speaker 8: they have said this morning that they are going to
Speaker 8: transfer that right to a counter offer to Cleveland Cliffs.
Speaker 8: But I don't know that. You know, there's a lot
Speaker 8: of aggressive rhetoric out there, and I don't know that
Speaker 8: we should assume that US Steal necessarily doesn't want to
Speaker 8: sell to Cleveland Cliffs. There's some sort of bias against
Speaker 8: that sort of What they said is that they wanted
Speaker 8: Cleveland Cliffs to agree to an NDA to do a
Speaker 8: due diligence process, and Cleveland Cliffs wouldn't do that until
Speaker 8: they agreed to the economic terms upfront, which is somewhat unusual.
Speaker 8: And I think there's just a lot more of this
Speaker 8: process to play out. And I also don't think we
Speaker 8: know who all of the parties are yet. So when
Speaker 8: US Steal announced its strategic review, they said they'd had
Speaker 8: multiple offers for all and also parts of the company.
Speaker 8: And I think there might be more players to come
Speaker 8: out of the woodwork here, and I think there's just
Speaker 8: a long way to go with this takeover story.
Speaker 7: All right.
Speaker 2: I got a question on a different issue, but you've
Speaker 2: been writing about it. So when I moved to Berlin
Speaker 2: into the sixteen, I had just bought myself a Portie
Speaker 2: nine to eleven carrerass here and I didn't want to
Speaker 2: lose it, so I paid the four and a half
Speaker 2: thousand dollars that I think it costs for me to
Speaker 2: get you know, half half a trailer on a freighter
Speaker 2: ship and shipped it over to Germany and it was great.
Speaker 2: I got to drive it on the Autuban. It absolutely
Speaker 2: loved it. It was the perfect car for Germany. But when
Speaker 2: I moved back to New York at the end of
Speaker 2: twenty twenty one and I went to call the same
Speaker 2: shipper to ask how much it would be, they quoted
Speaker 2: me more than twenty thousand dollars, approaching twenty five thousand dollars,
Speaker 2: So the price had essentially gone up five x and
Speaker 2: I had to sell my beloved Carrera. It was I'm
Speaker 2: still a little bit heartbroken, although it helped me to
Speaker 2: finance my current home. Are those prices coming back down
Speaker 2: to earth? Have we come back to normal now in
Speaker 2: terms of freight shipping, they have.
Speaker 8: Come back down. I would say you maybe or surely
Speaker 8: moved at the raw town. If you've moved in the
Speaker 8: spring of twenty twenty three, you might have had a
Speaker 8: better quoted on that. But yes, so it is that
Speaker 8: we did see shipping prices really crashing back down to
Speaker 8: earth as we sort of had that pivot away from
Speaker 8: good spending back towards services. But now we're starting to
Speaker 8: see signs of life again in the freight market. The DRWY,
Speaker 8: the WCI freight indexes increased for six straight weeks. That's
Speaker 8: the longest positive stretch since January twenty twenty two. And so,
Speaker 8: and you know, we're also seeing maybe some progress in
Speaker 8: the trucking market where we might be hitting a bottom
Speaker 8: and starting to find our way, you know, toward a
Speaker 8: point of stabilization, because it has been really rough for
Speaker 8: that freight sector. I mean, I know there's a lot
Speaker 8: of debate about whether the broader economy is in a session,
Speaker 8: but the freight sector has been there and it's been
Speaker 8: tough out there, and we're starting to see sort of
Speaker 8: a light at the end of the tunnel.
Speaker 1: I mean, you go over to like by the Port
Speaker 1: of Newark over there, like by Newark Airport, they got
Speaker 1: the container stack like twenty high.
Speaker 2: Yeah, go get one of that. And I only needed
Speaker 2: half from my car because the containers I think are
Speaker 2: forty feet long and I only needed twenty feet. But
Speaker 2: I just couldn't justify paying twenty five grand, and I
Speaker 2: wouldn't have been able to afford my house if I
Speaker 2: hadn't sold the nine eleven. That's probably a good thing
Speaker 2: in a sense. I'm living in a Porsche in West Yes,
Speaker 2: all right, Brooks.
Speaker 1: Other then she covers all the industrial stuff for Bloomberg Opinion.
Speaker 1: Joining us here in our Bloomberg Interactive Brokers Studio.
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Speaker 7: Markets weekdays at ten am Eastern on Bloomberg Radio, the
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Speaker 1: Let's stop tech talk here. The tech stocks have been
Speaker 1: particularly the top five to seven names have really been
Speaker 1: leading this market this year. As people are in search
Speaker 1: for growth and what are they doing. They're generating a
Speaker 1: ton of cash, which raises the question, what are these
Speaker 1: tech companies doing with their cash? Let's bring in Angelas.
Speaker 1: You know he's a senior industry analyst at CFRA Research.
Speaker 2: Hey, Angela.
Speaker 1: Again, a lot of these tech companies, you know, it's
Speaker 1: putting up gobs and gobs and cash like Alphabet, you know,
Speaker 1: one hundred and eighteen billion dollar cash pile. What are
Speaker 1: these companies doing with their cash? And what do you
Speaker 1: think they should be doing with their cash?
Speaker 9: Yeah, so for the most part, most of these you know,
Speaker 9: megacap tech names are really leveraging the cash towards buybacks,
Speaker 9: and it's what they've been doing for years at this
Speaker 9: point in time.
Speaker 6: Clearly, Apple kind of you know the post.
Speaker 9: A boy child in that area buying back, announcing a
Speaker 9: ninety billion dollar buy back earlier this year on top
Speaker 9: of the ninety billion they did last year.
Speaker 6: So that's really where most of the cash is going.
Speaker 9: Alphabet did the same thing, announcing a seventy billion dollar
Speaker 9: buy back this year on top of the seventy billion
Speaker 9: announced last year.
Speaker 6: So that's where the cash is going.
Speaker 9: A big reason for that is they really can't do
Speaker 9: anything else with it in the sense that the M
Speaker 9: and A market for a lot of these large cap
Speaker 9: companies are essentially closed outside of the fact that we
Speaker 9: are likely going to see an improved deal of that
Speaker 9: that Microsoft Activision transaction out there.
Speaker 6: So we expect them to continue to.
Speaker 9: Utilize most of the cash towards buybacks going forward, and
Speaker 9: we actually think that's the right move here and a
Speaker 9: big reason for that is it will support earnings grow.
Speaker 9: We do expect free cash flow to continue to grow
Speaker 9: here over the next five to ten years incrementally, and
Speaker 9: that'll continue to support a higher share price.
Speaker 4: Innar view.
Speaker 1: All right, So here's my pet peeve for the big
Speaker 1: tech names. I think they should be like Apple, for example,
Speaker 1: they should have a two and a half to three
Speaker 1: and a half percent dividend yield and they don't.
Speaker 5: Why is that?
Speaker 9: I think there's a perception out there where if you
Speaker 9: make a move like that, you know, it almost tells
Speaker 9: you that the maybe the growth trajectory of the company
Speaker 9: isn't going to be as favorable as maybe they believe
Speaker 9: that it should be. And you know, I think they
Speaker 9: do want to have a cash out there accessible in
Speaker 9: case they were able to go out there and make
Speaker 9: a a big splash out there in the market.
Speaker 6: Gets somewhat a creative on the m and a side
Speaker 6: of things.
Speaker 9: You know, clearly the regulatory environment does change over time,
Speaker 9: and I think they want to just have that cash
Speaker 9: available out there. And when you kind of look at
Speaker 9: what specifically Apple, right since twenty twelve, they've essentially bought
Speaker 9: back or reduced their sharecount by more than forty percent.
Speaker 9: That's absolutely remarkable because many of these companies out there
Speaker 9: that do have buybacks that are essentially washing out, you know,
Speaker 9: they are essentially kind of just offsetting, you know, share
Speaker 9: dilution with those buybacks, Apple is actually reducing their shareccount
Speaker 9: and they will will continue.
Speaker 6: To do so over the next decade.
Speaker 9: So we think the growth rejectory for Apple continues to
Speaker 9: be very attractive.
Speaker 6: And you know, when you look at a company like.
Speaker 9: Apple specifically, we think that is a stock that continues
Speaker 9: to be under owned in many respects because there are
Speaker 9: a lot of fund managers out there that can't own
Speaker 9: seven percent of a stock like Apple. So it's really
Speaker 9: interesting that you continue to kind of reduce the share
Speaker 9: count while also having kind of this under owned asset
Speaker 9: out there.
Speaker 6: So we think it's we continue to think it's the
Speaker 6: right move, and we think.
Speaker 9: Apple continues to view their stock is an attractive opportunity
Speaker 9: from evaluation perspective.
Speaker 2: I mean, I I hear this angelo from other analysts
Speaker 2: as well, that you know, they don't want to send
Speaker 2: the wrong sign to the markets that they're not a
Speaker 2: growth company, but Apple should set the tone. You know,
Speaker 2: they they don't the markets have to send a sign
Speaker 2: to Apple, not the other way around. They they they
Speaker 2: always have one hundred or two hundred billion dollars in
Speaker 2: cash and cash equivalents. I wonder what else they're gonna
Speaker 2: do with the money. I mean, why don't they make
Speaker 2: a big acquisition? I look at I look at the
Speaker 2: money they have, right, I guess last fiscal year was
Speaker 2: one hundred and sixty nine billion dollars, And then I
Speaker 2: look at a Disney market cap one hundred and fifty seven.
Speaker 2: Why don't they just use it? No?
Speaker 6: I think that's a fair point. I think a big
Speaker 6: reason they don't do it.
Speaker 9: I mean, maybe not as much as an Apple's case,
Speaker 9: but in others I think there you know, I think
Speaker 9: there would be too much kind of backlash from a
Speaker 9: regulatory perspective to allow a deal like that to take place,
Speaker 9: to be honest with you, but you know, I think
Speaker 9: Apple does want to kind of have that cash available
Speaker 9: just in case they want to make a move like that.
Speaker 9: But at the end of the day, listen, it's not
Speaker 9: in their DNA, right. They've never made an acquisition or
Speaker 9: for three billion dollars.
Speaker 6: We know that.
Speaker 9: And when you kind of look ahead, and we look
Speaker 9: at their pipeline. We continue to view this as a
Speaker 9: company that could no longer term continue to grow the
Speaker 9: EPs at a ten percent plus clip. And those buybacks
Speaker 9: in terms of you know, essentially buying back three percent
Speaker 9: of their shares to continue to help that EPs grow trajectory.
Speaker 9: We'll support that ten percent plus EPs clip. So again,
Speaker 9: we think it's the right move that they that cash.
Speaker 9: That net cash balance has been dwindling over the last
Speaker 9: couple of years to maybe to your point where that
Speaker 9: they don't they acknowledged that they don't need as much
Speaker 9: cash out there, But in the same respect, I mean, listen,
Speaker 9: I mean, it's it's a great problem to have, right
Speaker 9: if you're Apple, if you're Alphabet, or anybody any of
Speaker 9: these other megacap tech firms out there.
Speaker 1: All right, Angela, Aside from from Apple, what else do
Speaker 1: you like in your coverage area?
Speaker 9: Yeah, I mean, listen, We do continue to like a
Speaker 9: lot of the chip names out there, you know, specifically
Speaker 9: kind of the ongoing AI.
Speaker 6: Shift out there towards general of AI. We think you're
Speaker 6: still in the early innings there.
Speaker 9: And Video of course, is a name that has you know,
Speaker 9: essentially tripled this year and essentially nearly quadrupled off its lows.
Speaker 9: But that being said, we do think that, you know,
Speaker 9: over the next kind of three to four years, you're
Speaker 9: going to see this shift, this titanic shift in the
Speaker 9: form of how computing and networking chips out there are
Speaker 9: going to kind of be valued and the amount of
Speaker 9: demand you're going to see kind of from this general
Speaker 9: AI shift. And that being said, we continue to like
Speaker 9: in Vidia as well as Broadcom, which has been two
Speaker 9: of the big winners out there. On top of that,
Speaker 9: mar as well as A and D we think are
Speaker 9: going to be big winners in the coming years. On
Speaker 9: top of kind of you know, some of our favorite
Speaker 9: names on the megacat tech names.
Speaker 1: I'll tell you what Angelo in Nvidia. I guess they
Speaker 1: report after the close on Wednesday. Man, they better put
Speaker 1: up a big print because given what their stock has
Speaker 1: done on the back of that true big raise they
Speaker 1: had last quarter, exciting, what's the risk in that name?
Speaker 1: Do you think? I mean, man, I can't think of
Speaker 1: a company's got more expectations built into their stock short
Speaker 1: term than in Video.
Speaker 9: Yeah, And to be honest with you, it's going to
Speaker 9: be tough for them to kind of expede exceed some
Speaker 9: of those expectations out there. I mean, at this point
Speaker 9: in time, you kind of look at what they did
Speaker 9: in terms of their last quarterly results essentially kind of
Speaker 9: double the expectation on the data center side of things,
Speaker 9: and we do think that, you know, they've got a
Speaker 9: good problem out there in the sense that their chips
Speaker 9: are supply constrained out there. When you kind of look
Speaker 9: at the valuation, at least relative to historical levels, it's
Speaker 9: actually not that demanding. So we think there's very little
Speaker 9: downside potential at least in terms of where the consensus
Speaker 9: estimates are, and there is upside potential. But that said,
Speaker 9: you know, the valuation is always kind of the question
Speaker 9: mark with Nvidia. Here, we think where investors continue to
Speaker 9: underestimate the Nvidia story is really kind of the fact
Speaker 9: that this is more of a total solutions company rather.
Speaker 6: Than a steamy conductor company.
Speaker 9: So you know, the capabilities and the upside potential on
Speaker 9: the software side of the side of things, if they
Speaker 9: taught that up on this earning school, that's where the
Speaker 9: upside potential we think is for the stop.
Speaker 1: All right, Angela, thanks so much for joining us. Really
Speaker 1: appreciate getting a couple of minutes of your time. Angelo
Speaker 1: is you know, he's a senior industry analyst, says c
Speaker 1: f r A Research.
Speaker 7: You're listening to the team ken'shur Live program Bloomberg Markets
Speaker 7: weekdays at ten am Eastern on Bloomberg dot Com, the
Speaker 7: iHeartRadio app and the Bloomberg Business app, or listen on
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Speaker 1: Bitcoint off five point six percent is to just reporting
Speaker 1: twenty six tho ninety people heading for the exits.
Speaker 8: Here.
Speaker 1: I'm going to check in with the King of South Beach,
Speaker 1: Mike mcloan, senior macro strategist with Bloomberg Intelligence. Mike, what's
Speaker 1: happening out there with the bitcoin?
Speaker 10: You always bring me on and I start laughing from
Speaker 10: those Southeast connotations. So I appreciate that.
Speaker 6: I appreciate that Paul.
Speaker 10: Bitcoin is I think resuming a bear mark, and I
Speaker 10: look at it. The headline I put out today is
Speaker 10: appeared to me it appairs similar to the US stock
Speaker 10: market in nineteen thirty when it rolled over and then
Speaker 10: it kept going over down after it bounced. And the
Speaker 10: key thing about it is, let's just look at bitcoin
Speaker 10: right before this COVID right before the biggest pomp and
Speaker 10: liquidity in history. It was around ten thousand and still
Speaker 10: right now it's around twenty six. So I think there's
Speaker 10: risk it can head that way. It's the leading indicator.
Speaker 10: It's one of the most world speculative digital assets, most significant.
Speaker 10: But I think that leading indicator is what to me
Speaker 10: is important for the rest of the market, like the
Speaker 10: stock market. The key to me win is just look
Speaker 10: at that US government too. You know you can purchase
Speaker 10: a too. You note around five percent lock up almost
Speaker 10: ten percent in two years, first time you've been able
Speaker 10: to do that since about two thousand and seven. I
Speaker 10: look at it. Every rational person in the planet who's
Speaker 10: got money and is invested is looking at that and saying,
Speaker 10: thank you, I'll do that. And I think that's what's
Speaker 10: happening with all risk assets, and it's just getting started.
Speaker 2: Is there a concern that you know, Elon Musk has
Speaker 2: sold a ton of bitcoin? Didn't I read that somewhere?
Speaker 10: Yeah, I thought he sold already. I heard SpaceX today.
Speaker 10: But this is a problem I think with bitcoin. You're
Speaker 10: kind I think in this case, some of these leverage
Speaker 10: longs that brought right when the black Rock announced that
Speaker 10: they were going to apply for an ETF, it hasn't
Speaker 10: been approved. The market rally from about twenty five thousand
Speaker 10: to just above thirty. You get a lot of leverage
Speaker 10: longs in theirs. I think we're stopping those people out,
Speaker 10: and it's they're getting long for the wrong reason. With
Speaker 10: the hopium that you're going to get an ETF. To me,
Speaker 10: it's a fund of metals.
Speaker 4: Yeah.
Speaker 10: Well it's a word I learned from bitcoin people and
Speaker 10: crypto people, that opium. And so now it's the question
Speaker 10: of what stops this downward trajectory. So one thing I
Speaker 10: pointed out and published to say, if you just look
Speaker 10: at one hundred week move an average at Bitcoin, it's
Speaker 10: rolled over and it's trending downward for the highest velocity ever.
Speaker 10: Now Bitcoin's only been around about fourteen years. And then
Speaker 10: I think to myself, what stops just normal reversion of
Speaker 10: the best performing asset ever. And number one thing is
Speaker 10: the FED is still tightening. The FED is still telling
Speaker 10: you is still taking liquid e the way, and here's
Speaker 10: a highly speculative asset that went up a lot. I
Speaker 10: still think that's the risk it continues to revert.
Speaker 1: Mike this sounds for bitcoin. From what I'm hearing from you,
Speaker 1: that more of a technical kind of thing. Do I
Speaker 1: look at GRET charts? Do I see where a technical
Speaker 1: bottom is here? Do I start doing that kind of thing?
Speaker 10: I view it as the opposite. I was just on
Speaker 10: a call and they're toat pointing all the technicals. People
Speaker 10: trade it too much. I view it as number one
Speaker 10: headline is the FED is still tightening. And then you
Speaker 10: try to put it into things that we see as humans.
Speaker 10: We can't really you can see the tightening, can feel,
Speaker 10: but you can watch the price. And I just point
Speaker 10: out trends down, FEDS tightening. Use it discipline of a
Speaker 10: good investor, respect the trend. So as far as I
Speaker 10: think people are looking at twenty five thousand is the
Speaker 10: first level, and then of course look at twenty thousand.
Speaker 10: I mentioned a level I think it could go back
Speaker 10: to in a normal recession environment, which is the view
Speaker 10: of Anna Wong our cheap economs. We should be heading
Speaker 10: towards the recession, which is the indication from the inverted
Speaker 10: Yeeld curve, And why not go back to ten thousand,
Speaker 10: That's where it was before the FED. Well, that's where
Speaker 10: the it was hovering around ten thousand right before this
Speaker 10: massive pump on liquidity with the COVID. Now that liquidity
Speaker 10: is going way to break neck pace. Bottom line is
Speaker 10: all the lessons of history in assets that pump on liquidity,
Speaker 10: and when that liquidity goes away, you know that lessons
Speaker 10: are that assets usually reverted. It's a question of how far.
Speaker 2: Where do you expect to see bitcoin in the coming years.
Speaker 2: I mean, is it possible that we drop back down
Speaker 2: to sixteen thousand or even test those limits again?
Speaker 4: Yeah?
Speaker 10: So I think it has a bottom around fifteen and
Speaker 10: most people look at that as oh, I'm going to
Speaker 10: be buying here and getting near there, and that is
Speaker 10: the risk I see as the bottom line for me,
Speaker 10: Matt is this is part of the macro. It's just
Speaker 10: a good indication that I think we're heading into more
Speaker 10: significant bear market. We look at the stock market, it
Speaker 10: typically doesn't bottom until about two years after the FED
Speaker 10: starts easy. We haven't done that. They're still tightening, and
Speaker 10: to me, this is part of just this is the
Speaker 10: leading indicator. So I see, I don't know how long
Speaker 10: it takes, but like I said, I compared it to
Speaker 10: the stock market in nineteen thirty and right now it's
Speaker 10: a bear market. It's heading lower and the FED still tightening.
Speaker 10: So I don't even see light at the end of
Speaker 10: the tunnel for risk assets the bottom and bitcoin is
Speaker 10: just the best leading indicator.
Speaker 4: All right.
Speaker 1: So aside from bitcoin, what's the you know, if I
Speaker 1: go to a BBI commodity, what are some of the
Speaker 1: top two or three things you guys are working on.
Speaker 10: Well, I'm still watching crude oil and now crudel is
Speaker 10: hovering about unchanged in the year. Obviously, I'm still bears
Speaker 10: crudel and a normal trajectory after the pump last year,
Speaker 10: as you typically head towards two cheap levels. Two cheap
Speaker 10: levels in crudel, not at eighty, it's around forty or fifty.
Speaker 10: And then you look at the macro of it. China
Speaker 10: is clearly in decline. Stops this downward revision and economic
Speaker 10: outlook for China, I don't see it now. We should
Speaker 10: expect stimulus from there, but they just upset their biggest
Speaker 10: export customers, Europe and the US with this war. And
Speaker 10: it's not really China anymore. It's one leader, President Zy.
Speaker 10: So I think you're seeing a situation in China It's
Speaker 10: similar to peak Soviet Union and peak Japan in the
Speaker 10: late eighties early nineties. So there's a demand side and
Speaker 10: great and that's still going that way. When you look
Speaker 10: at copper, copper is pointing that way. Copper is tilting lower.
Speaker 10: It's right around three dollars and seventy cents a pound.
Speaker 10: Its average price for the last year twenty years is
Speaker 10: three dollars a pound. That shows deflationary forces over overall.
Speaker 10: And I don't see what stops it from going that level.
Speaker 10: You have to see a major pickup in China, you
Speaker 10: have to see major weakness in US dollar and fed
Speaker 10: easy Typically they're they're all going the wrong way at
Speaker 10: the moment. So I look at this is the early
Speaker 10: days of a bear market, and then you have to
Speaker 10: ask yourself, is just what happens to all these asks?
Speaker 10: If the US dour market rolls over for normal recession
Speaker 10: and typic, it doesn't bottom until we're well into an
Speaker 10: easing cycle. We're still tidying.
Speaker 1: So when you're out of the clubbing South Beach, you
Speaker 1: don't talk commodities. Do you have, Mike, Please tell me
Speaker 1: you got a better game than that.
Speaker 10: Well, I try to avoid the subject but I have
Speaker 10: to admit I've been in warning to most people, and
Speaker 10: people I just point out studying the history. I've been
Speaker 10: doing a lot of that late lately. Is I think
Speaker 10: we're heading towards the biggest reset of our lifetime. Now
Speaker 10: you just look at property values in Florida. There is
Speaker 10: no history of major fluctuations and property values in Florida.
Speaker 10: It looks like there's just starting to roll over. What
Speaker 10: I'm hearing and this thing. The bottom line is we're
Speaker 10: still taking away the punch bowl, and that is what
Speaker 10: I'm really worried about. It's a classic example of the
Speaker 10: Look at PPI. The producer price in the next went
Speaker 10: from eighteen to minus three. That's finished goods. That's the
Speaker 10: biggest correction since nineteen forty eight, so pretty significant deflationary forces.
Speaker 10: And then you look at the Fed funds at five
Speaker 10: and a quarter, it's well above and CPI well above PEPI.
Speaker 10: It's clearly contractory and we're just early days. So I
Speaker 10: look at this this is this is just a normal cycle.
Speaker 10: And the normal cycle is we're very elevating in risk assets.
Speaker 10: And bitcoin is the good leading indicator, which crude oil
Speaker 10: around forty, copper lower and you know, I just be
Speaker 10: lucky lucky. I mean, here's the lose lose. Every time
Speaker 10: the stock market's gone up, it's increased rate height expectations.
Speaker 10: I don't think the Fed's going to ease until the
Speaker 10: stock market tells him to by going down.
Speaker 1: All right, Yeah, good stuff.
Speaker 2: And I want to get you back on a little
Speaker 2: bit later, Mike, if we can to talk about what's
Speaker 2: going on with the eggs, because I think it's bigger
Speaker 2: than people realize, certainly bigger than we give it time for.
Speaker 2: And any he knows that stuff, I know. Yeah, all right,
Speaker 2: that's why he's the man for that.
Speaker 7: You're listening to the tape. Catch a live program Bloomberg
Speaker 7: Markets weekdays at ten am Eastern on Bloomberg Radio, the
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Speaker 7: You can also listen live on Amazon Alexa from our
Speaker 7: flagship New York station. Just say Alexa play Bloomberg eleven thirty.
Speaker 1: You know, Mat, when we talk about the economy, oftentimes
Speaker 1: folks to say, you know, I'm thinking about a hard landing.
Speaker 1: I'm thinking about a soft landing. And then we've recently
Speaker 1: heard this phrase, no landing and I think we need
Speaker 1: to talk to a licensed pilot, because I don't think
Speaker 1: that's even possible. Fortunate for us, our next guest is
Speaker 1: a licensed pilot, Jamie Patten. She's co head of Global
Speaker 1: Rates at TCW. So Jamie got a lot of smart
Speaker 1: people there at TCW out in Los Angeles. What kind
Speaker 1: of economic landing are you guys calling for?
Speaker 11: Well, thank you for bringing up the no landing scenario analogy,
Speaker 11: which is my least favorite analogy of all, mostly because
Speaker 11: it defies the laws of physics.
Speaker 12: What goes up must come down.
Speaker 11: But also just being a pilot, airplanes run on gas,
Speaker 11: and even if everything goes perfectly and you really don't
Speaker 11: want to land, you're going to run out of gas.
Speaker 12: So I hate that analogy.
Speaker 11: But I do love flying analogies, and I think that
Speaker 11: they're perfect for monetary policy hiking cycles, especially this one.
Speaker 12: At TCW, we are expecting a hard landing.
Speaker 11: Specifically, the analogy that I like the most is a
Speaker 11: soft field landing, which, to give you a little bit
Speaker 11: of background, not to talk about flying too much, but
Speaker 11: do it. Soft field landings are notoriously dangerous. Pilots never
Speaker 11: totally know what hazards lurk under the soft under the
Speaker 11: surface of a soft field landing. So a soft field
Speaker 11: landing is off airport. It could be grass, gravel, sand,
Speaker 11: snow exactly so, there could be wildlife wandering around. There's
Speaker 11: barbed wire fences difficult to see from the air. A
Speaker 11: regional banking crisis might be brewing under the surface of
Speaker 11: a robust economy, and as we're coming in for this landing,
Speaker 11: we are not expecting it to be soft for a
Speaker 11: lot of reasons that I can get into, but we
Speaker 11: also see so many hazards and just the chances that
Speaker 11: the economy has a soft landing with a hiking cycle
Speaker 11: that's been the most aggressive and forty years, we just
Speaker 11: find to be very unlikely.
Speaker 2: You know, I heard a great analogy this morning on
Speaker 2: surveillance from Laura Rain. She said that the economy is
Speaker 2: like an eighteen wheeler and before the Great Financial Crisis,
Speaker 2: when a lot of people still had fixed rate mortgages
Speaker 2: or floating rate mortgages, sorry, floating rate mortgages, the FED
Speaker 2: could pull on the brake lever and that would slow
Speaker 2: down like ten wheels, so it could bring, you know,
Speaker 2: the economy to a stop relatively quickly. But now that
Speaker 2: everyone has shifted to fixed rate mortgages, the brake lever
Speaker 2: only affects like three or four wheels, and it's much
Speaker 2: harder to slow this truck down. Does that make more sense?
Speaker 12: Absolutely so.
Speaker 11: The way that we talk about this is the interesst
Speaker 11: rate sensitivity of the US economy, and specifically, we've heard
Speaker 11: a lot of FED speakers talk about this recently in
Speaker 11: the form of monetary policy lags. So we know they're long,
Speaker 11: we know they're variable, we know it takes time for
Speaker 11: an adjustment and monetary policy such as the FED hiking
Speaker 11: rates to feed its way through the macro economy, but
Speaker 11: we don't know how long. And recently these Feds SPA,
Speaker 11: especially Waller last month, has said the lag should be
Speaker 11: shorter now because we have forward guidance that feeds into
Speaker 11: rates markets instantly, and the size of the shock will
Speaker 11: make the lags shorter.
Speaker 12: We very much disagree with this.
Speaker 11: We think that lags are likely to be longer today,
Speaker 11: not just The mortgage argument is a really good one.
Speaker 11: It's an eight trillion dollar agency MBS market and less
Speaker 11: than one percent now is adjustable rate. Prior to the
Speaker 11: global financial crisis, it was twelve to twenty times that.
Speaker 11: There are also other reasons that make our economy today
Speaker 11: less rates sensitive. One is the Fed's eight trillion dollar
Speaker 11: ballance sheet cushioning the blow of financial markets. It was
Speaker 11: one trillion prior to the global financial crisis, and also
Speaker 11: some psychological impacts where the economy really has changed in
Speaker 11: some ways post COVID. One thing that we talk about
Speaker 11: here is labor hoarding. If a company had really struggled
Speaker 11: to get labor during COVID prior to COVID, they're also
Speaker 11: really hesitant to lay off that labor or reduce that
Speaker 11: labor today. And it's harder to see that in economic data,
Speaker 11: but one thing you could look at is something like
Speaker 11: overtime hours, specifically in manufacturing. It's the lowest we've ever
Speaker 11: seen outside of recessionary times. So what does that tell us?
Speaker 11: We don't really need this labor, but we're going to
Speaker 11: keep it around, so maybe we just have them working
Speaker 11: less and less.
Speaker 12: And then you.
Speaker 11: Might ask, well, why does that all matter? Not just
Speaker 11: because we need to know when these interest rate hikes
Speaker 11: are going to impact the economy, but if the FED
Speaker 11: thinks that the interest rate impacts are going to impact
Speaker 11: the economy sooner, and we think that's not true. That
Speaker 11: means the FED is very likely to keep rates too
Speaker 11: high for too long, over tighten, and that would raise
Speaker 11: the risks of a larger than expected decline in growth
Speaker 11: and eventually inflation. It supports our long duration position. I
Speaker 11: also think that's why this no landing scenario gets spread around,
Speaker 11: where people are just expecting the lag to be short.
Speaker 11: It's actually long. They think everything is great, but we
Speaker 11: see it coming crashing down pretty hard, just in more
Speaker 11: like a year instead of three months.
Speaker 1: Man, you guys are brutal out there in la I mean,
Speaker 1: I know you got writer strikes and actors strikes, but.
Speaker 2: Man, that's a dour outlook, not just brutal, a big deal,
Speaker 2: a massive attraction. If you're doing a tour around the country,
Speaker 2: do you stop at TCW.
Speaker 13: That's me.
Speaker 1: You build around TCW and Capitol Group and everything else
Speaker 1: falls into place.
Speaker 4: All right.
Speaker 1: So are we gonna get any rate cuts next year?
Speaker 6: Jamie?
Speaker 12: We do think the Fed will cut rates next year.
Speaker 11: The market has the Fed cutting rates about halfway through
Speaker 11: the year. The Fed itself has has the Fed cutting
Speaker 11: rates about one hundred basis points.
Speaker 12: Next year, we agree.
Speaker 11: We think that the FED will wait to cut rates
Speaker 11: until they are very confident that inflation is heading back
Speaker 11: down towards their two percent target. And even though they're
Speaker 11: probably really happy with the progress they've seen in the
Speaker 11: June and July inflation prints, they still have a way
Speaker 11: to go. The last two prints for consumer prices CPI
Speaker 11: was three percent three point two percent. That's one third
Speaker 11: of what inflation was last summer and one half of
Speaker 11: what it was even at the beginning of the year,
Speaker 11: but it still has.
Speaker 12: A ways to go.
Speaker 11: The fed's own forecast of core PC is still three
Speaker 11: point nine percent at the end of the year, so
Speaker 11: that's really far above their two percent targets.
Speaker 1: Still, all right, Jamie Patten, that was excellent stuff. We're
Speaker 1: going to have you back whether you like it or not.
Speaker 1: Jamie Patten, co head of Global Rates at TCW. Not
Speaker 1: a soft landing kind of person. Definitely not a no
Speaker 1: landing kind of person, kind of suggesting there's a harder
Speaker 1: landing on the horizon.
Speaker 7: F you're listening to the tape Cancer Live program Bloomberg
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Speaker 7: flagship New York station. Just say Alexa play Bloomberg eleven thirty.
Speaker 2: Gaming.
Speaker 1: That's just the way of saying the casino business, which
Speaker 1: I love. Charles Gillespie, CEO of Gambling dot Com Joints
Speaker 1: is Charles, thanks so much for joining us here Gambling
Speaker 1: dot Com. Tell us about this company. What do you
Speaker 1: guys up to?
Speaker 14: Thanks guys, great to be here. So, Gambling dot Com
Speaker 14: group publishes essentially online comparison shopping websites for the global
Speaker 14: online gambling industry. So you know, if you're going to
Speaker 14: go to Paris, for example, and you need to book
Speaker 14: a hotel, you're probably going to go to hotels dot
Speaker 14: com or Expedia or something like that, get all the
Speaker 14: information there at one place, and then book your hotel.
Speaker 14: We essentially do the same thing, but for online gambling.
Speaker 14: So if you want to bet on sports and you're
Speaker 14: in New York or New Jersey or one of the
Speaker 14: other twenty five states where you can bet on sports
Speaker 14: legally in the United States, you come to gambling dot
Speaker 14: Com or one of our.
Speaker 13: Fifty other websites.
Speaker 14: We also have Bookies dot com, casinos dot com. We
Speaker 14: also on rotewire dot com, and we'll give you all
Speaker 14: that information help you find a you know, the best
Speaker 14: sports book or online casino for whatever your needs are.
Speaker 2: Are you comparing the odds?
Speaker 1: Who's going to offer me the best odds? Or what
Speaker 1: do you what are you actually measuring?
Speaker 4: We do that.
Speaker 14: Yeah, so bookies dot Com has got odds comparison then
Speaker 14: and tons of data about sports, but a lot of users,
Speaker 14: you know, they don't even need that level of information.
Speaker 14: They just want to know, Okay, in I don't know Pennsylvania,
Speaker 14: what sports books are even available, which ones are legal?
Speaker 14: And uh you know of the ones that are legal, well,
Speaker 14: which ones have the best sign up offers, which ones
Speaker 14: have the best customer service, which ones will pay me
Speaker 14: quickly if I win?
Speaker 4: You know.
Speaker 14: So in many cases, it's just kind of, frankly, more
Speaker 14: more basic things that move the needle for for individual users.
Speaker 13: That we supply.
Speaker 14: But yeah, for the sophisticated users, we've got odds comparison
Speaker 14: and all kinds of great stuff.
Speaker 2: Now, Charles, this is it's kind of a controversial business.
Speaker 2: If you're an adult, you should probably be able to
Speaker 2: make your own decisions about what you do with your money,
Speaker 2: and if it were illegal, you know, everybody would be
Speaker 2: doing it underground anyway. But did you have any reservations
Speaker 2: with using such blunt brand names? Gambling dot com and
Speaker 2: bookies dot com is something that I don't think my
Speaker 2: mom would want me messing around with.
Speaker 13: Absolutely not.
Speaker 14: I mean, you know, to borrow a British saying, you know,
Speaker 14: they do what it says on the tin.
Speaker 13: You know, it's very clear. It's it's good branding.
Speaker 4: You know.
Speaker 13: I obviously I'm an industry guy.
Speaker 14: I've been doing this for seventeen years, so you know,
Speaker 14: I've been drinking the kool aid for a long time.
Speaker 14: But I don't think that the industry is controversially controversial
Speaker 14: at all. You know, when you zoom out and look
Speaker 14: at it from a you know, you look at the
Speaker 14: whole kind of thing in its entirety. What I think
Speaker 14: is controversial is states that haven't regulated online gambling, because
Speaker 14: it's not like online galling isn't happening in these states.
Speaker 14: You said it yourself that you know, all these people
Speaker 14: are playing online regardless. This is a question of whether
Speaker 14: they're at the regulated sites or if they're at the
Speaker 14: Costa Rican and Panama based sites. And you know, you
Speaker 14: can't help the problem gamblers if they're not within the
Speaker 14: regulated ecosystem because you don't know anything about.
Speaker 13: Them, you know. So it's it's it's clearly a net.
Speaker 14: Positive for every jurisdiction that regulates the industry because they
Speaker 14: get they get so many more tools to actually help
Speaker 14: people that need help. And that is the real thing
Speaker 14: that we should all be doing, is trying to do
Speaker 14: what we can to minimize gambling related harm and that
Speaker 14: that obviously starts with a regulated market.
Speaker 1: How important was it for the industry and Charles for
Speaker 1: ESPN to really to ink their deal? I think was
Speaker 1: it with Pen? I forget was it with pen, but
Speaker 1: just to ink their deal to really kind of put
Speaker 1: jump into the deep end of the pool with their
Speaker 1: deal with Pen Entertainment.
Speaker 13: Yeah, I'm not sure they're in the deep end of
Speaker 13: the pool.
Speaker 14: I'd say they've they're in the shallow end or at
Speaker 14: the kittie pool, you know, they're not.
Speaker 13: They're not actually the ones taking the bets.
Speaker 14: And what they've done with Penn is they've licensed the
Speaker 14: ESPN name to Penn, but Pen is the regulated gambling
Speaker 14: operator with all the licenses that's going to do the
Speaker 14: heavy lifting.
Speaker 13: But it is a very big deal.
Speaker 14: You know, this, this American sports betting renaissance started in
Speaker 14: twenty eighteen with the Supreme Court decision, and you know,
Speaker 14: ever since that moment, all eyes have been on ESPN
Speaker 14: and there's been tons of speculation about what they may
Speaker 14: actually do. Disney's, you know, obviously had a very kind
Speaker 14: of conservative approach to the whole thing. They don't want
Speaker 14: to be seen to be in the gambling business. They
Speaker 14: certainly don't have anything to do with online casino. And
Speaker 14: it took five years, but they've finally done a deal.
Speaker 14: It's a it's it's a relatively simple deal where they
Speaker 14: licensed their brands to pen and as they said, Penel operated.
Speaker 14: You know, there's there's other chess pieces they got moved
Speaker 14: around when Penn announced that deal.
Speaker 13: Uh, you know, they.
Speaker 14: Had previously acquired our Stool, which is, you know, a
Speaker 14: fascinating media organization and and talk.
Speaker 2: About controversial David, Yeah.
Speaker 14: There's plenty of things have been said about about Barstool,
Speaker 14: and I don't want to wade into that conversation, but
Speaker 14: just from a pure media perspective, I mean, they have
Speaker 14: incredible engagement and a lot of the content is highly compelling.
Speaker 14: You know, it is a it is a fascinating business.
Speaker 14: And and in the in the end, Pen, you know,
Speaker 14: I think realized maybe that's not the best fit for
Speaker 14: a regulated gambling company. You know, obviously not everybody agrees
Speaker 14: with everything that that Portanoy says. And you know, I
Speaker 14: think certain gaming regulators in the end were just not
Speaker 14: totally comfortable, right, And and Pen needed to essentially replace
Speaker 14: that partner.
Speaker 13: And that's what they've done.
Speaker 14: And and and Dave Portnoy at the end of this
Speaker 14: is has come out looking like an absolute legend, sold
Speaker 14: barstool for you know, an actual proper fortuit, and then
Speaker 14: and now having gont it back for a dollar exactly.
Speaker 13: It's it's the stuff that's fun to follow.
Speaker 1: That, that's for sure. Charles Gillespie, thanks so much for
Speaker 1: joining us. Charles Gillespie is the CEO of Gambling dot Com.
Speaker 1: This is Bloomberg.
Speaker 7: You're listening to the tape Cansur live program Bloomberg Markets
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Speaker 2: Now. I have been covering the automotive industry for a
Speaker 2: couple of decades. As a result, I kind of know
Speaker 2: everybody that works in the industry. So oftentimes these manufacturers
Speaker 2: will give me cars or motorcycles to test drive for
Speaker 2: a week and figure out, you know, what the product
Speaker 2: is like, which is I think very helpful in my reporting.
Speaker 2: This week, I'm driving a car from a brand that's
Speaker 2: very close to my heart. It's an Audi qight.
Speaker 1: E tron Audi qateron.
Speaker 2: Art, which is a little bit confusing, but basically it's
Speaker 2: their biggest suv that's powered solely by batteries and well
Speaker 2: we have video of it as well, so if you're listening,
Speaker 2: you can go to YouTube dot com and just type
Speaker 2: Bloomberg Radio and you'll see this vehicle. Now close to
Speaker 2: my heart because the first car I ever bought was
Speaker 2: an Audi a four Avant, the station wagon version sure
Speaker 2: that was not battery powered, back in two thousand and
Speaker 2: that was a two point five liter turbo diesel, which
Speaker 2: I loved so much, same color, pretty much, and the
Speaker 2: interior felt the same. Everything kind of felt the same.
Speaker 2: The only difference is the powertrain. I want to bring
Speaker 2: in Kyle Stock. He is a senior correspondent for Bloomberg BusinessWeek.
Speaker 2: He covers the car industry very closely as well. And Kyle,
Speaker 2: first of all, I'm not sure if you've driven this Audi,
Speaker 2: but if you've driven almost any Audi, the experience is
Speaker 2: really similar. And I think that's what they're going for.
Speaker 7: Yeah.
Speaker 5: And then and it's like very techy luxury, right, I
Speaker 5: mean it's.
Speaker 15: They do this very well with the screens, with the
Speaker 15: digital dials, with the you know, the real time map information.
Speaker 5: It's a it's a spaceship cockpit for me.
Speaker 2: It is, but in a in like an understated way.
Speaker 2: So they have Obviously tech is their thing. I think
Speaker 2: their motto is for sprung doorche Technique, which who Germany.
Speaker 2: In German, it means advancement through technology. That's what they've
Speaker 2: always done. Uh. The you know, everything in the car
Speaker 2: is luxurious and it's and it's and it's almost perfect
Speaker 2: in a refined kind of way, not in a flamboyant,
Speaker 2: like in your face kind of way. You're not drowning
Speaker 2: in leather there's not a fifty five inch screen, but
Speaker 2: there's exactly as much as you need, which I think
Speaker 2: is really cool. But I don't think they've cracked the
Speaker 2: whole battery tech thing because the range just isn't as
Speaker 2: impressive as other electric SUVs and you don't get Kyle
Speaker 2: to kind of, you know, punch you in the gut
Speaker 2: acceleration that you do in other electric vehicles.
Speaker 5: Yeah, you're talking about the Q eight.
Speaker 2: You were just saying the Q eight e Tron, which
Speaker 2: is their new version of the E Tron. Now they're
Speaker 2: calling it the Q eight Etron, even though it's not
Speaker 2: nearly as big um or as you know, special looking
Speaker 2: as the gas powered Q eight. But yeah, they just
Speaker 2: they don't seem to have the get up and go
Speaker 2: the other evs have, or you know, three hundred four
Speaker 2: a mile range.
Speaker 1: Why is that? I thought it isn't an E You
Speaker 1: don't talk about horsepower anymore, do you?
Speaker 2: Or do you can talk about horsepower equivalent? And this
Speaker 2: one has four hundred horsepower equivalent. Don't get me wrong.
Speaker 2: It's not slow, right, zero to sixty in like six seconds,
Speaker 2: which for a gas car is fast, right, But for
Speaker 2: an EV. I mean Kyle, we're looking at you know,
Speaker 2: the Kia GT ev stix or whatever it's called. The
Speaker 2: zero sixty and five seconds, Like, you know, these evs
Speaker 2: are beating Porschas off the line.
Speaker 5: Yeah.
Speaker 15: Well, part of the part of the equation you're seeing
Speaker 15: here is that QA and a lot of the Audi's
Speaker 15: are big cars.
Speaker 5: For one, they're heavy.
Speaker 15: Evs are heavy, and the content they put in there
Speaker 15: is heavy. So you know, you have seats that massage you.
Speaker 15: You have all the heaters, you have, all the electronics,
Speaker 15: you have all the you know, the luxury trappings and
Speaker 15: trimmings and that you know, weighs on a zero to
Speaker 15: sixty time. But it is notable that, you know, all
Speaker 15: the Mercedes Electric SUVs are super heavy too, and those
Speaker 15: things are quick. The BMW i X, which is.
Speaker 5: Their new like a bat out of hell.
Speaker 15: Yeah, that's pretty quick. You can choose your own picture,
Speaker 15: you know. The Cadillact Lyric is another one in this
Speaker 15: class that's honestly, really nice and kind of understated. Like
Speaker 15: these they they, you know, are subtle with their choices.
Speaker 15: It's not all screens, it's not all you know, theater
Speaker 15: and drama and rushing lights.
Speaker 1: But Kyle, What are what are the EV manufacturers what
Speaker 1: are they really marketing here? Or what are consumers finding
Speaker 1: a board?
Speaker 2: Is it range?
Speaker 1: Is it that it's zero to sixty that Matt focuses on.
Speaker 2: Is it screens?
Speaker 1: What are they really marketing on?
Speaker 5: So they're really it's funny it used to be range.
Speaker 15: It's then it went to sort of charging time, like
Speaker 15: high speed charging. You know, you won't have to wait
Speaker 15: more than ten minutes. And now it's sort of drifting
Speaker 15: into this like no compromise zone, Like you can have
Speaker 15: the giant CV you want with all the trappings and trimmings,
Speaker 15: and it will go far enough and it will charge
Speaker 15: fast enough, and you just just kind of don't worry
Speaker 15: about it.
Speaker 5: You know.
Speaker 15: Mercedes, like all the Mercedes electrics, except like the really
Speaker 15: entry level ones have you know, very impressive range figures.
Speaker 5: A lot of them are over three or miles, and
Speaker 5: they're they're frank about it.
Speaker 15: They say that, you know, if you buy a Mercedes,
Speaker 15: you don't want to have to worry about range. And
Speaker 15: then and then there's a there's another slice of the
Speaker 15: market that is really going after the performance.
Speaker 5: Like Matt mentioned that that new Kia.
Speaker 15: GT Audi has a couple of electric gts that are
Speaker 15: that are just kind of bonkers, the Porscha, of course,
Speaker 15: and and they're thrilling to drive.
Speaker 2: You know what. The the funny thing is And this
Speaker 2: is the only time I think I've ever said anything
Speaker 2: like this in my life.
Speaker 7: Oh, here we go.
Speaker 2: Even though it's not the fastest, even though it doesn't
Speaker 2: have the most range, this might be the one that
Speaker 2: I would buy if I were looking for a bee
Speaker 2: V SUV because the road handling is so nice, you know,
Speaker 2: the air suspension is so luxurious, because it has everything
Speaker 2: you need but not a thing more. And because I've
Speaker 2: grown up with Audi kind of in my blood, I
Speaker 2: really like it. It starts at seventy five grand, which expensive,
Speaker 2: but it's not as expensive as you know, a Mercedes
Speaker 2: or the BMW i X, which is ridiculously expensive. But
Speaker 2: it is more than the Lyric and certainly more than
Speaker 2: the Kia.
Speaker 5: That BMW starts at eighty seven the Lyric.
Speaker 2: I think it's the Cadillac the Okay, I got you, Okay.
Speaker 5: Yeah, the Lyric.
Speaker 15: That thing starts at basically fifty nine thousand, and it's
Speaker 15: a lot of car for that money. I mean fifty
Speaker 15: nine thousand, you can get an electric Kia.
Speaker 2: It's really really like Nissan Ariyah costs about that much
Speaker 2: when you had the good one exactly.
Speaker 5: I mean, Cadillac's not making a lot of them.
Speaker 15: It costs extra to get all wheel drive and like
Speaker 15: you know, the super crew stuff. But that car, there's
Speaker 15: a lot of value there at that price point.
Speaker 1: So, Matt, what do you once you get the what's
Speaker 1: Missus Miller driving?
Speaker 2: She drives evolvough XC ninety T eight and she's it's
Speaker 2: a hybrid, it's not a fully there and she's so
Speaker 2: in love with it. She says, you can pry this
Speaker 2: truck away from my cold dead hands. Okay, so we're
Speaker 2: not on there, but you know, I think it's fine.
Speaker 2: I would go hybrid as well right now, because I'm
Speaker 2: just I don't think the infrastructure is quite there yet.
Speaker 2: Kyle for a fully for a full ev and they're
Speaker 2: such great choices. The Volvo's a nice one, especially for
Speaker 2: my wife. I like the BMW X five hybrid because
Speaker 2: it actually has the Inline six, the incredibly refined you
Speaker 2: know BMW engine in line.
Speaker 1: Six that's an internal combustion engine.
Speaker 2: Yeah, but Inline six and a twenty five kilot battery.
Speaker 6: So it's got.
Speaker 2: But what do you think, Kyle about fully V versus hybrid.
Speaker 15: I'm all in, man, I think it's there. I think
Speaker 15: the charging is getting there. You'll see we're doing a
Speaker 15: big piece. You'll see it in the next week or
Speaker 15: two about how much infrastructure.
Speaker 5: Went in in the past year. Nice and then I didn't.
Speaker 15: Five billion dollars is going into charging in the next
Speaker 15: twelve months from the I administration, not twelve months, and
Speaker 15: that's probably twenty four months.
Speaker 5: But those stations will start popping up. I live out
Speaker 5: here in.
Speaker 6: Colorado, so cold weather's a deal.
Speaker 5: Elevations a deal wins a deal.
Speaker 15: But I've never I haven't had a problem, and.
Speaker 5: I think it's getting there.
Speaker 15: Oh but I'll tell you the Goldilocks rig that I
Speaker 15: really like, Matt. I just had the Mercedes GL four
Speaker 15: point fifty E, which is a hybrid and a serious hybrid.
Speaker 15: So this thing, like standard great Mercedes SUV goes fifty
Speaker 15: miles on a charge, which to me is kind of
Speaker 15: a magic number because like, yes, you're hardly for burning
Speaker 15: gas if you have that kind of range, and you
Speaker 15: have the gas if you need it, if you're going farther.
Speaker 15: I love this car. I don't know if you've been
Speaker 15: in it yet.
Speaker 2: I haven't tried it out. I definitely would would like to,
Speaker 2: but for now I've got to give this Q eight
Speaker 2: E Tron back. And it's a little bit of a
Speaker 2: bummer because you get in the flashy special cars and
Speaker 2: they're kind of fun and interesting to drive, but there
Speaker 2: are also a lot of work. This out eve to
Speaker 2: me like the perfect car for commuting. It's executive, it's
Speaker 2: German and.
Speaker 1: Everything you like. All Right, Kyle, thanks so much for
Speaker 1: joining us, and we'll get back to you on This
Speaker 1: is more car stuff. Kyle Stocks, Senior correspondent, Bloomberg BusinessWeek.
Speaker 1: What is Matt Miller driving? We're gonna do this more
Speaker 1: often because it's always fun to talk cars, and we'll
Speaker 1: get some smart car people on here.
Speaker 2: Thanks for listening to the Bloomberg Markets podcasts. You can
Speaker 2: subscribe and listen to interviews at Apple Podcasts or whatever
Speaker 2: podcast platform you prefer. I'm Matt Miller. I'm on Twitter
Speaker 2: at Matt Miller nineteen seventy three.
Speaker 1: And I'm Paul Sweeney. I'm on Twitter at pt Sweeney.
Speaker 1: Before the podcast, you can always catch us worldwide at
Speaker 1: Bloomberg Radio,