1 00:00:00,080 --> 00:00:12,960 Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Jay Lee. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:27,840 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg I'm 5 00:00:27,840 --> 00:00:29,640 Speaker 1: ready placed to say that Johnny, Tom and I here 6 00:00:29,640 --> 00:00:32,200 Speaker 1: in New York City is Allison Williams, a CEDIA analyst 7 00:00:32,200 --> 00:00:34,720 Speaker 1: here at Bloomberg Intelligence, to run us through some of 8 00:00:34,720 --> 00:00:38,240 Speaker 1: the numbers from JP Morgan. Allison aggressively going through the 9 00:00:38,280 --> 00:00:40,639 Speaker 1: press release. So let's talk about it. The top line 10 00:00:40,680 --> 00:00:43,280 Speaker 1: for you, Allison this morning. So I think the top 11 00:00:43,320 --> 00:00:48,080 Speaker 1: line is the bottom line, the return on tangible equity, 12 00:00:49,080 --> 00:00:52,559 Speaker 1: which to us is extremely impressive. JP Morgan is already 13 00:00:52,600 --> 00:00:55,640 Speaker 1: executing at the top end of piers and that shows 14 00:00:55,680 --> 00:00:58,520 Speaker 1: that they continue to do so. Looking at the guidance, 15 00:00:58,560 --> 00:01:01,800 Speaker 1: I would say what's most positive is the expense guide, 16 00:01:01,840 --> 00:01:04,319 Speaker 1: which looks like it's coming in a little bit lower UM. 17 00:01:04,360 --> 00:01:07,160 Speaker 1: So again, it's a lot of data out there that 18 00:01:07,200 --> 00:01:09,720 Speaker 1: we need to sift through, but um on the surface 19 00:01:09,760 --> 00:01:12,880 Speaker 1: that's positive. On the net interest margin or net interest 20 00:01:12,920 --> 00:01:16,200 Speaker 1: income is similar to last quarter, um. However, recall that 21 00:01:16,280 --> 00:01:19,480 Speaker 1: intra quarter they did sort of guide down UM. But 22 00:01:19,560 --> 00:01:21,560 Speaker 1: again I think I wouldn't make too much of it, 23 00:01:21,920 --> 00:01:23,440 Speaker 1: too much out of it one way or the other. 24 00:01:23,440 --> 00:01:26,240 Speaker 1: They were saying fifty seven plus or minus. Then they said, oh, 25 00:01:26,319 --> 00:01:29,280 Speaker 1: maybe maybe it might be UM, you know, closer to 26 00:01:29,319 --> 00:01:33,000 Speaker 1: fifty seven. I think in general, uh, interest rates is 27 00:01:33,360 --> 00:01:35,720 Speaker 1: sort of the one situation that matters most of banks, 28 00:01:35,800 --> 00:01:38,600 Speaker 1: but where we'll probably get the least clarity this quarter, 29 00:01:38,760 --> 00:01:42,160 Speaker 1: just because of the dynamics driving that are really things 30 00:01:42,200 --> 00:01:44,760 Speaker 1: beyond the bank's control. Let's talk about an interest income 31 00:01:44,840 --> 00:01:47,160 Speaker 1: just briefly. Then the stock is filmed in the pre market, 32 00:01:47,200 --> 00:01:50,200 Speaker 1: but I run about two percentage points net interesting income 33 00:01:50,640 --> 00:01:53,200 Speaker 1: less than fifty seven point five billion dollars is to 34 00:01:53,280 --> 00:01:55,280 Speaker 1: a rate across for the other big banks on Wall Street. 35 00:01:55,360 --> 00:01:57,760 Speaker 1: Was still too early to tell, Allison, I think it's 36 00:01:57,800 --> 00:01:59,960 Speaker 1: a little too early to tell. We haven't sort of 37 00:02:00,080 --> 00:02:03,360 Speaker 1: gone through to see, um, what's happening with mix, and 38 00:02:03,400 --> 00:02:05,760 Speaker 1: I think that's could be the one area where we 39 00:02:05,760 --> 00:02:09,000 Speaker 1: get positively surprised and we could see an offset to 40 00:02:09,120 --> 00:02:11,600 Speaker 1: some of the margin pressures. So if we looked at 41 00:02:11,600 --> 00:02:13,799 Speaker 1: some of the weekly data that comes out consumer loan 42 00:02:13,840 --> 00:02:17,640 Speaker 1: growth UM has been doing better. That's higher margin and 43 00:02:17,680 --> 00:02:22,880 Speaker 1: to the extent that you have that influencing your portfolio, UM, 44 00:02:22,919 --> 00:02:25,880 Speaker 1: that's obviously helpful to net interest income. The other thing 45 00:02:26,000 --> 00:02:30,360 Speaker 1: fixed income trading, which is actually more important for City 46 00:02:30,360 --> 00:02:32,520 Speaker 1: and Goldman. It's a bigger share their earnings will hear 47 00:02:32,560 --> 00:02:36,359 Speaker 1: from them shortly, but that coming in much better than estimates. 48 00:02:36,440 --> 00:02:38,440 Speaker 1: We allcome, all of you worldwide and coast to coast. 49 00:02:38,440 --> 00:02:39,959 Speaker 1: It's a too big to fail day for me and 50 00:02:40,040 --> 00:02:42,040 Speaker 1: John Farrell, and you can do that with Fred Cannon 51 00:02:42,440 --> 00:02:45,760 Speaker 1: of KBW of course part of Stiffle as well, with 52 00:02:45,880 --> 00:02:49,960 Speaker 1: decades of experience, including being on the inside at Bank 53 00:02:50,000 --> 00:02:54,000 Speaker 1: of America years ago. Fred Cannon, these banks can't acquire 54 00:02:54,120 --> 00:02:57,560 Speaker 1: other banks, they got deposit issues and that they're just 55 00:02:57,600 --> 00:03:00,679 Speaker 1: gonna organically grow. Do you see the too big to 56 00:03:00,760 --> 00:03:05,160 Speaker 1: fails growing at nominal GDP less than nominal GDP or 57 00:03:05,240 --> 00:03:08,079 Speaker 1: they all blended gonna get JP Morgan like seven eight 58 00:03:08,160 --> 00:03:11,400 Speaker 1: nine pc per your growth? Well, I think in terms 59 00:03:11,400 --> 00:03:15,960 Speaker 1: of top line growth slightly slower than nominal GDP, the 60 00:03:16,040 --> 00:03:17,919 Speaker 1: small banks and FinTechs are going to pick up a 61 00:03:17,919 --> 00:03:20,440 Speaker 1: bit of market share in terms of asset growth, so 62 00:03:20,480 --> 00:03:22,280 Speaker 1: that keeps them down and you're seeing that in the 63 00:03:22,360 --> 00:03:25,880 Speaker 1: numbers that said bottom line growth. How do you get there? 64 00:03:25,919 --> 00:03:29,880 Speaker 1: Operating leverage, keep the expenses down, and buy backs, that's 65 00:03:29,919 --> 00:03:32,920 Speaker 1: the key. I mean, I I thought Mr Diamond's comments 66 00:03:32,919 --> 00:03:34,520 Speaker 1: and of course there'll be much more in this John 67 00:03:34,840 --> 00:03:38,280 Speaker 1: as well, But Allison, I mean the comments were all upbeat, upbeat, 68 00:03:38,360 --> 00:03:41,240 Speaker 1: up beat, you know, the usual boilerplate and investor relations 69 00:03:41,240 --> 00:03:44,240 Speaker 1: guy would put together for Mr Diamond. Where's the gloomy here? 70 00:03:44,280 --> 00:03:46,800 Speaker 1: I'm in a gloomy mood today. Is there any gloom 71 00:03:46,800 --> 00:03:49,840 Speaker 1: in the JP Morgan story? I can't find it so 72 00:03:50,000 --> 00:03:54,560 Speaker 1: not so far. But you see any gloom? I don't 73 00:03:54,600 --> 00:03:56,400 Speaker 1: see a lot of gloom in this, but we wouldn't 74 00:03:56,400 --> 00:03:58,560 Speaker 1: expect at this point in time, John, you see any 75 00:03:58,920 --> 00:04:03,600 Speaker 1: stalks up nineteen percent through the way people talk about 76 00:04:03,640 --> 00:04:05,680 Speaker 1: the banks freadits and if they've had a terrible year, 77 00:04:06,360 --> 00:04:08,800 Speaker 1: what's going on? How do you reconcile the sentiment around 78 00:04:08,800 --> 00:04:10,400 Speaker 1: some of these big names with the performance in the 79 00:04:10,400 --> 00:04:12,960 Speaker 1: equity market? Well, I mean the year to date is 80 00:04:12,960 --> 00:04:15,120 Speaker 1: a tough one because remember we had such a bad 81 00:04:15,320 --> 00:04:17,719 Speaker 1: that applies to the whole index that applies to the 82 00:04:17,760 --> 00:04:20,159 Speaker 1: whole index, That applies to the whole of the SMP 83 00:04:20,320 --> 00:04:21,880 Speaker 1: five hundred. You look at it on the year, we've 84 00:04:21,920 --> 00:04:25,679 Speaker 1: done nothing. But what a difference a month make, of course, 85 00:04:25,720 --> 00:04:28,520 Speaker 1: but let's talk about this. If you ask people about 86 00:04:28,520 --> 00:04:30,800 Speaker 1: how stocks have done this year, they feel like stocks 87 00:04:30,800 --> 00:04:33,360 Speaker 1: have done well. You ask them how banks have done 88 00:04:33,360 --> 00:04:37,000 Speaker 1: this year, they feel like banks haven't performed. So what's 89 00:04:37,040 --> 00:04:40,120 Speaker 1: happening is that the banks have made progress, especially on 90 00:04:40,160 --> 00:04:43,160 Speaker 1: the bottom line, and the multiples have held, and that's 91 00:04:43,160 --> 00:04:46,200 Speaker 1: allowed for this growth. And we're still trading at fifteen 92 00:04:46,240 --> 00:04:50,240 Speaker 1: year lows on on multiple on pe ratios for the banks, 93 00:04:50,560 --> 00:04:52,520 Speaker 1: and so the fact is that they're bouncing along the 94 00:04:52,560 --> 00:04:55,479 Speaker 1: bottom evaluation and continuing to make some progress in terms 95 00:04:55,520 --> 00:04:57,479 Speaker 1: of the bottom line, and that that has allowed some 96 00:04:57,560 --> 00:05:01,040 Speaker 1: reasonable UH money to be even the bank stoxes here. 97 00:05:01,160 --> 00:05:03,440 Speaker 1: Just in terms of ivise effects, Allison looking back twelve 98 00:05:03,440 --> 00:05:06,080 Speaker 1: months for this quarter, is that when we see somebody 99 00:05:06,080 --> 00:05:08,680 Speaker 1: out performance and fick redative to equities, it's a big 100 00:05:08,680 --> 00:05:11,279 Speaker 1: base effect to play here. So that'll be the story 101 00:05:11,360 --> 00:05:14,400 Speaker 1: next quarter. I think the story of this quarter is though, 102 00:05:14,400 --> 00:05:18,440 Speaker 1: that embody comparisons are easing, so we really strong half 103 00:05:18,440 --> 00:05:20,520 Speaker 1: that sort of faded in three Q. But I think 104 00:05:20,520 --> 00:05:22,520 Speaker 1: for FICK, and again we're gonna want to dig into 105 00:05:22,560 --> 00:05:25,039 Speaker 1: the details, but September was a really strong month for 106 00:05:25,080 --> 00:05:28,040 Speaker 1: credit issuance. It was a strong month for credit trading, 107 00:05:28,240 --> 00:05:31,600 Speaker 1: especially in high yield. We know that's more profitable. UM. 108 00:05:31,640 --> 00:05:35,080 Speaker 1: You know, we had good, good spreads, We had a good, 109 00:05:35,200 --> 00:05:37,320 Speaker 1: good bond price movement. So I think that might be 110 00:05:37,400 --> 00:05:40,479 Speaker 1: what you're seeing play into fictual quest. The question is 111 00:05:40,560 --> 00:05:43,839 Speaker 1: with FICK, is going to be sustainable? Allison, I have 112 00:05:43,880 --> 00:05:46,440 Speaker 1: a question and it is a light question, but it's 113 00:05:46,480 --> 00:05:49,440 Speaker 1: also serious as well. I looked through quickly as sped 114 00:05:49,520 --> 00:05:52,320 Speaker 1: read through all their stuff. I don't see we Work mentioned, 115 00:05:52,880 --> 00:05:54,600 Speaker 1: and you know this is in the headlines, and I 116 00:05:54,640 --> 00:05:57,080 Speaker 1: would give us the I know, I agree, but for 117 00:05:57,160 --> 00:05:59,720 Speaker 1: our listening on its give us the amount of we 118 00:05:59,720 --> 00:06:02,640 Speaker 1: were Is it like literally a drop in a lake? 119 00:06:03,160 --> 00:06:05,919 Speaker 1: I think, you know, WE Work, I think is a 120 00:06:06,000 --> 00:06:10,280 Speaker 1: broader you know, people might say perhaps a reputational issue. 121 00:06:10,440 --> 00:06:13,479 Speaker 1: It's not something that you know, perhaps there might have 122 00:06:13,560 --> 00:06:16,360 Speaker 1: been a mark in the portfolio. There's a big headline 123 00:06:16,440 --> 00:06:19,440 Speaker 1: number about how much UM they're invested, but that's across 124 00:06:19,480 --> 00:06:21,960 Speaker 1: their private equity funds, and they do have a very 125 00:06:21,960 --> 00:06:25,440 Speaker 1: big portfolio. The question I think is more um, you know, 126 00:06:25,480 --> 00:06:27,200 Speaker 1: I guess softer in terms of, you know, what are 127 00:06:27,200 --> 00:06:29,520 Speaker 1: they doing from here? And so I'm not necessarily saying 128 00:06:29,960 --> 00:06:33,040 Speaker 1: that there's a reputational hit. I'm saying that, you know, 129 00:06:33,080 --> 00:06:34,960 Speaker 1: people are going to want to know, like, what is 130 00:06:35,080 --> 00:06:38,520 Speaker 1: what's JP Morgan doing? Um from here? They're gonna just 131 00:06:38,560 --> 00:06:40,440 Speaker 1: want to hear a little bit and a little bit 132 00:06:40,480 --> 00:06:42,760 Speaker 1: more about that. And that was really something for for 133 00:06:42,960 --> 00:06:45,480 Speaker 1: I think the call all along, it's not necessarily something 134 00:06:46,000 --> 00:06:48,320 Speaker 1: you would see in the press release unless there was 135 00:06:48,400 --> 00:06:51,600 Speaker 1: some outsized hit. We're looking ahead for it. I just wander, 136 00:06:51,680 --> 00:06:55,000 Speaker 1: from your perspective, the hangover from the we work saga 137 00:06:55,440 --> 00:06:57,400 Speaker 1: for I p o s for the back end of 138 00:06:57,400 --> 00:07:00,000 Speaker 1: this year, for investment bank fees, how do you think 139 00:07:00,040 --> 00:07:01,400 Speaker 1: we set up for the back half of this year 140 00:07:01,400 --> 00:07:03,440 Speaker 1: at the back end of this year. I'm pretty cautious 141 00:07:03,520 --> 00:07:05,600 Speaker 1: on that. I mean, what we're seeing is these unicorns 142 00:07:05,680 --> 00:07:08,760 Speaker 1: in the just cannot get their private market valuations in 143 00:07:08,800 --> 00:07:10,840 Speaker 1: the public market. I mean, we work you think is 144 00:07:10,840 --> 00:07:13,080 Speaker 1: a one off, but it's continual. In other words, we've 145 00:07:13,160 --> 00:07:16,480 Speaker 1: we've seen this story before of these unicorns having these 146 00:07:16,560 --> 00:07:19,040 Speaker 1: huge private market valuations and they just don't come through. 147 00:07:19,560 --> 00:07:22,680 Speaker 1: And that's a tough story to to build up your 148 00:07:22,680 --> 00:07:24,320 Speaker 1: I p O pipeline one. Just to fund a word 149 00:07:24,360 --> 00:07:27,000 Speaker 1: on the Allison, how difficult Q four might be because 150 00:07:27,040 --> 00:07:28,960 Speaker 1: of some of the big dramas, the big sagas that 151 00:07:29,000 --> 00:07:31,240 Speaker 1: we've had with some of these prime profile I p 152 00:07:31,400 --> 00:07:34,360 Speaker 1: O s. So, so I'll say two words and for 153 00:07:34,480 --> 00:07:36,800 Speaker 1: earnings easy comps. So that's what we'll be talking about 154 00:07:36,800 --> 00:07:38,920 Speaker 1: in January. But I think that you know, the I 155 00:07:39,000 --> 00:07:41,120 Speaker 1: p O question, I think is a is a bigger 156 00:07:41,200 --> 00:07:44,680 Speaker 1: question sort of I think going into and I think 157 00:07:44,720 --> 00:07:47,120 Speaker 1: what's also interesting is that this while you have sort 158 00:07:47,120 --> 00:07:50,440 Speaker 1: of we were canceling their deal, you have paloton um, 159 00:07:50,480 --> 00:07:53,280 Speaker 1: you know, disappointing, you also have all these conferences going 160 00:07:53,320 --> 00:07:56,400 Speaker 1: on in Morgan stan Ley Goldman getting into these conferences 161 00:07:56,400 --> 00:07:59,200 Speaker 1: where the private investors are saying that they're not getting 162 00:07:59,360 --> 00:08:02,559 Speaker 1: enough money. So I think it's sort of and perhaps 163 00:08:02,600 --> 00:08:04,720 Speaker 1: talking about the circumventing the banks and is there a 164 00:08:04,760 --> 00:08:07,320 Speaker 1: way for them to sort of get more of the economics, 165 00:08:07,800 --> 00:08:09,680 Speaker 1: which in a way I think highlights sort of the 166 00:08:09,800 --> 00:08:12,600 Speaker 1: role of the intermediary, right. Some people think that they're 167 00:08:12,640 --> 00:08:16,800 Speaker 1: overpriced something they're overpriced underpriced. So that's that is something 168 00:08:16,840 --> 00:08:18,440 Speaker 1: we're gonna look to hear more about in the call 169 00:08:18,640 --> 00:08:20,160 Speaker 1: to two of you thank you so much else than 170 00:08:20,240 --> 00:08:23,400 Speaker 1: you can thank you so much for being with KBW 171 00:08:23,600 --> 00:08:26,000 Speaker 1: before they write up their banking combine and write up 172 00:08:26,120 --> 00:08:43,960 Speaker 1: reports on four banks, so they somebody who's run out 173 00:08:44,000 --> 00:08:49,240 Speaker 1: of ammunition? Is the week company we did? Did you 174 00:08:49,240 --> 00:08:51,760 Speaker 1: read the whole prospectives? Right? John? I didn't, but nice 175 00:08:51,760 --> 00:08:58,480 Speaker 1: when he did. We are down to Coupan with what's 176 00:08:58,520 --> 00:09:02,840 Speaker 1: called an equity kicker in the trade to guarantee I say, 177 00:09:02,920 --> 00:09:08,199 Speaker 1: a thirty percent return. This is like you know this 178 00:09:08,200 --> 00:09:11,360 Speaker 1: this transaction they're trying to structure. So there's two options. 179 00:09:11,400 --> 00:09:15,680 Speaker 1: Either the soft bank bailout all ultimately JP Morgan leading 180 00:09:15,720 --> 00:09:18,439 Speaker 1: a group of bankers and securing some debt for them. 181 00:09:18,520 --> 00:09:23,559 Speaker 1: JP Morgan's turnishing their reputation, including including a two billion 182 00:09:23,640 --> 00:09:29,760 Speaker 1: dollar note payment and kind note coupon almost double Tom 183 00:09:29,920 --> 00:09:33,199 Speaker 1: what they've paid last year. I'm real has never written 184 00:09:33,520 --> 00:09:36,360 Speaker 1: that larger coupon or that large and equity kicker. You 185 00:09:36,480 --> 00:09:39,400 Speaker 1: talked to adults, What do the adults of Wall Street 186 00:09:39,480 --> 00:09:43,200 Speaker 1: say when they see fifteent coupon and equity kicker on 187 00:09:43,280 --> 00:09:47,520 Speaker 1: warrants promising thirty percent return, it's a tough environment to 188 00:09:47,520 --> 00:09:51,680 Speaker 1: get that done. Obviously, what ever, right ever, let alone 189 00:09:51,679 --> 00:09:53,800 Speaker 1: in the market that we're in right now, they're talking 190 00:09:53,840 --> 00:09:56,000 Speaker 1: to everybody and their mother to try to get this done. 191 00:09:56,080 --> 00:09:58,360 Speaker 1: But whether they can or not, if they do, it's 192 00:09:58,360 --> 00:10:01,000 Speaker 1: a real hail Mary. The myth maddox here is what's 193 00:10:01,000 --> 00:10:03,040 Speaker 1: called a cramdown, which is if you do a coupon, 194 00:10:03,160 --> 00:10:05,559 Speaker 1: and you do that, you cram down to value where 195 00:10:05,559 --> 00:10:08,200 Speaker 1: it kicks right over to the new investors. How many 196 00:10:08,320 --> 00:10:11,679 Speaker 1: billion is the is the diminishment here to get this 197 00:10:11,720 --> 00:10:14,080 Speaker 1: thing done? I mean they're trying to get two billion 198 00:10:14,120 --> 00:10:16,160 Speaker 1: of this done, right but I mean everybody that I 199 00:10:16,240 --> 00:10:18,840 Speaker 1: talked to is saying, oh, it's it's it's a tough one. 200 00:10:18,880 --> 00:10:21,439 Speaker 1: It's a stretch, and you know it's a lot of 201 00:10:21,800 --> 00:10:26,600 Speaker 1: a lot of money. Billion. What's the thing worth right now? 202 00:10:26,640 --> 00:10:29,959 Speaker 1: I have no idea less than ten Probably it's a 203 00:10:30,000 --> 00:10:34,400 Speaker 1: distress nesset now, that's what it is. Who's making the decision? 204 00:10:34,920 --> 00:10:38,280 Speaker 1: We work? Well, they have two new CEOs now, right, 205 00:10:38,320 --> 00:10:40,480 Speaker 1: and so Adam Newman is not the one here saying 206 00:10:40,520 --> 00:10:43,000 Speaker 1: that we prefers off banker. We don't. It's the two 207 00:10:43,000 --> 00:10:45,920 Speaker 1: new CEOs. I've got to say something. So they are 208 00:10:46,320 --> 00:10:49,280 Speaker 1: supposed to run out of cash pretty soon, right next 209 00:10:49,320 --> 00:10:55,200 Speaker 1: month exactly, and so um, remember their restructuring. Restructuring is expensive, right, 210 00:10:55,240 --> 00:10:57,400 Speaker 1: They have to fire people, which is expensive. They have 211 00:10:57,559 --> 00:10:59,959 Speaker 1: to get sell assets, which is expensive. They have to 212 00:11:00,000 --> 00:11:02,520 Speaker 1: try to get out of some leases, which is expensive. 213 00:11:02,559 --> 00:11:04,880 Speaker 1: So they have to take they have to spend money 214 00:11:04,920 --> 00:11:08,000 Speaker 1: before they could even ever think about making money. And 215 00:11:08,040 --> 00:11:10,840 Speaker 1: so if you're somebody who's betting on them now through, 216 00:11:11,040 --> 00:11:14,720 Speaker 1: even with the coupon, at what point they actually turn 217 00:11:14,800 --> 00:11:18,040 Speaker 1: around is a really tough question. Two options were on 218 00:11:18,080 --> 00:11:20,600 Speaker 1: the table, and it looks like from our reporting this morning, 219 00:11:20,600 --> 00:11:24,520 Speaker 1: they're exploding exploring the JP Morgan lifeline over the soft 220 00:11:24,520 --> 00:11:28,400 Speaker 1: bank lifeline. Why do we have a hy at this point? So, 221 00:11:28,559 --> 00:11:31,760 Speaker 1: if you think about it, if you take the debt right, 222 00:11:31,880 --> 00:11:34,280 Speaker 1: you still have a more institutional base. If you get 223 00:11:34,320 --> 00:11:37,439 Speaker 1: more equity from soft bank, soft bank owns you, right, 224 00:11:37,760 --> 00:11:40,720 Speaker 1: and it's risky you're sharing all your income with soft 225 00:11:40,720 --> 00:11:46,319 Speaker 1: bank rather than paying them down a coupon. Oh well, 226 00:11:46,360 --> 00:11:49,240 Speaker 1: so that's the real problem with UM, you know, taking 227 00:11:49,240 --> 00:11:51,400 Speaker 1: the soft Bank money. Remember soft Bank already owns almost 228 00:11:51,440 --> 00:11:55,120 Speaker 1: fort of the company, so it's a real tough one 229 00:11:55,160 --> 00:11:58,880 Speaker 1: when um, you know, they already practically own you, and 230 00:11:58,920 --> 00:12:03,160 Speaker 1: they own more than Newman himself. But what about I 231 00:12:03,160 --> 00:12:05,240 Speaker 1: don't mean to interrupt it, you just you just did. 232 00:12:05,840 --> 00:12:08,040 Speaker 1: I was busy, you know, like the fan mail is 233 00:12:08,080 --> 00:12:09,840 Speaker 1: coming in, and I just had to talk to Michael 234 00:12:09,880 --> 00:12:15,000 Speaker 1: from from I don't know, up North, very very quickly. 235 00:12:15,040 --> 00:12:18,160 Speaker 1: Here they need Kendall Roy. I mean, the answer is 236 00:12:18,200 --> 00:12:20,520 Speaker 1: they need somebody like Kendall who was going to fly 237 00:12:20,679 --> 00:12:23,280 Speaker 1: in and save this thing. All a succession, Oh, I 238 00:12:23,320 --> 00:12:27,839 Speaker 1: wish Kendall Roy could be the person. Spoilers, No spoilers. 239 00:12:27,880 --> 00:12:31,079 Speaker 1: I didn't watch Sunday Nights. We're in the new episode. 240 00:12:31,480 --> 00:12:34,040 Speaker 1: Just no spoilers. You're like you did this week Game 241 00:12:34,040 --> 00:12:37,080 Speaker 1: with Thrones. Don't ruin this for people. There's no different. 242 00:12:37,120 --> 00:12:39,679 Speaker 1: Succession is the same as game and thrown. Seriously, who 243 00:12:39,760 --> 00:12:41,640 Speaker 1: was the white Knight to come in? Buffet is not 244 00:12:41,640 --> 00:12:44,120 Speaker 1: going to come in works on a seven or eight 245 00:12:44,120 --> 00:12:49,120 Speaker 1: percent coupon? Here were percent coupon? Is this like Steven 246 00:12:49,200 --> 00:12:52,600 Speaker 1: Schwartzman comes in and black Stone. No, well, yeah, even 247 00:12:52,640 --> 00:12:55,079 Speaker 1: they might even be messy for Stephen Schwartzman. Right, you 248 00:12:55,160 --> 00:12:57,559 Speaker 1: gotta think like somebody who likes to stress a little 249 00:12:57,559 --> 00:13:00,800 Speaker 1: bit more than that, like an Apollo. But I doubt that. Okay, 250 00:13:01,320 --> 00:13:04,319 Speaker 1: what what are the adults should Apollo do when they 251 00:13:04,360 --> 00:13:07,079 Speaker 1: see what Jillian Tan and our team wrote about. Yeah, 252 00:13:07,200 --> 00:13:11,120 Speaker 1: I mean, I don't you're talking about Steve Schwartzman, for example, 253 00:13:11,200 --> 00:13:13,720 Speaker 1: very similar to Apollo. Steve has spoken about we work 254 00:13:14,000 --> 00:13:17,640 Speaker 1: publicly before. He said that he doesn't understand where the 255 00:13:17,640 --> 00:13:20,200 Speaker 1: economics came from in the first place. By the way, 256 00:13:20,240 --> 00:13:22,560 Speaker 1: over the weekend, I had bankers involved in all of 257 00:13:22,600 --> 00:13:25,560 Speaker 1: this deal, all of these deals saying oh, we probably 258 00:13:25,600 --> 00:13:27,520 Speaker 1: should have seen the writing on the wall a while ago. 259 00:13:28,080 --> 00:13:33,520 Speaker 1: It's a little far gone. That's the problem. Tom. We're working. 260 00:13:33,559 --> 00:13:35,840 Speaker 1: We can. We thank you all for listening. On the 261 00:13:35,880 --> 00:13:52,079 Speaker 1: week Company. There have been any number of stories over 262 00:13:52,120 --> 00:13:55,240 Speaker 1: the last forty eight hours. Really, Turkey and Syria front 263 00:13:55,280 --> 00:13:57,080 Speaker 1: and center, and of course all the bank earnings as 264 00:13:57,080 --> 00:14:00,560 Speaker 1: well in the financial world, and Brexit has become a 265 00:14:00,600 --> 00:14:04,440 Speaker 1: state of confusion. Theresa Raphael writes brilliantly on this, and 266 00:14:04,520 --> 00:14:07,800 Speaker 1: particularly writes on a relative basis and has a wonderful 267 00:14:07,960 --> 00:14:13,000 Speaker 1: essay on what the United Kingdom will look like after 268 00:14:13,800 --> 00:14:17,440 Speaker 1: Brexit or non Brexit or no deal or deal Brexit, 269 00:14:17,800 --> 00:14:20,800 Speaker 1: whatever the eight flavors are. And what fascinates me to 270 00:14:20,880 --> 00:14:26,680 Speaker 1: reason your essay is the Europeans are sort of afraid 271 00:14:27,400 --> 00:14:31,640 Speaker 1: of what a separate United Kingdom will be like. Why 272 00:14:31,800 --> 00:14:37,880 Speaker 1: is Paris, Berlin and Brussels afraid of what this independent, 273 00:14:38,000 --> 00:14:41,480 Speaker 1: newly independent United Kingdom will look like? Right, So this 274 00:14:41,560 --> 00:14:45,120 Speaker 1: is one of the fears that you hear from Angela 275 00:14:45,160 --> 00:14:49,360 Speaker 1: Merkel in Germany, also from Makron, that an independent UK 276 00:14:50,000 --> 00:14:53,200 Speaker 1: will look a little bit like a Singapore on the 277 00:14:53,720 --> 00:14:59,520 Speaker 1: Thames River. It will cut taxes, slash regulations, open, uh, 278 00:14:59,600 --> 00:15:02,840 Speaker 1: you know, put itself to the world's banks and businesses, 279 00:15:03,120 --> 00:15:07,080 Speaker 1: and you know, actually become, um, you know, such a 280 00:15:07,360 --> 00:15:11,640 Speaker 1: formidable competitor to the EU that that Brexit, uh, you know, 281 00:15:11,800 --> 00:15:16,320 Speaker 1: encourages other EU countries to maybe try to join Britain's orbit. 282 00:15:16,360 --> 00:15:18,640 Speaker 1: And so, you know, one of the balances that has 283 00:15:18,680 --> 00:15:21,560 Speaker 1: to be struck in Europe is they you know, now 284 00:15:21,640 --> 00:15:23,080 Speaker 1: I think very much would like to be rid of 285 00:15:23,120 --> 00:15:27,000 Speaker 1: the UK. Uh. It's the Brexit negotiations have dragged on 286 00:15:27,040 --> 00:15:28,360 Speaker 1: and on, but they want to do it in a 287 00:15:28,400 --> 00:15:31,800 Speaker 1: way that that uh it seemed to hurt and doesn't 288 00:15:31,840 --> 00:15:34,920 Speaker 1: give the UK of some trade advantage that they will 289 00:15:34,960 --> 00:15:38,720 Speaker 1: then come to regret. Okay, but the feasibility of this, 290 00:15:38,840 --> 00:15:41,480 Speaker 1: I mean, there's been the Norway on the Thames, and 291 00:15:42,000 --> 00:15:45,000 Speaker 1: Singapore and the Thames in Toronto on the Thames and 292 00:15:45,040 --> 00:15:48,320 Speaker 1: the rest of it. I don't hear anybody except the 293 00:15:48,320 --> 00:15:55,680 Speaker 1: wishful hopeful, actually linking the culture, the ethos, the geography 294 00:15:55,800 --> 00:15:59,280 Speaker 1: of Singapore with what we see in a more northern latitude. 295 00:15:59,440 --> 00:16:01,640 Speaker 1: Yeah lately, I mean, I think the people you know, 296 00:16:02,320 --> 00:16:06,320 Speaker 1: worrying most about Singapore and the Thames really haven't spent 297 00:16:06,400 --> 00:16:08,240 Speaker 1: a lot of time in the UK. You just can't 298 00:16:08,240 --> 00:16:11,600 Speaker 1: compare a one party city state of six and a 299 00:16:11,640 --> 00:16:16,880 Speaker 1: half million to a country as large and geographically diverse 300 00:16:17,040 --> 00:16:21,400 Speaker 1: and politically pluralistic as the United Kingdom. And you know, 301 00:16:21,440 --> 00:16:25,520 Speaker 1: the main um reality of British politics now is it's 302 00:16:25,560 --> 00:16:28,520 Speaker 1: going in the other direction. Even the Conservatives, traditionally the 303 00:16:28,520 --> 00:16:31,640 Speaker 1: party of you know, fiscal prudence and low spending and 304 00:16:31,680 --> 00:16:35,120 Speaker 1: low taxation, are turning it on when it comes to 305 00:16:35,440 --> 00:16:40,920 Speaker 1: offering voters much enhanced public services, more spending. They still 306 00:16:41,000 --> 00:16:43,440 Speaker 1: want to keep tax rates low, but they don't have 307 00:16:43,640 --> 00:16:46,760 Speaker 1: that much to cut really kind of realm of corporate taxes. 308 00:16:47,560 --> 00:16:49,320 Speaker 1: You know, I looked at the photos of the Queen 309 00:16:49,400 --> 00:16:52,680 Speaker 1: and Prince Charles and all that. I didn't see Boyd 310 00:16:52,720 --> 00:16:55,400 Speaker 1: George there. But you know I I I looked for 311 00:16:55,480 --> 00:16:57,720 Speaker 1: as at the speech and I you know, read through 312 00:16:57,960 --> 00:17:00,480 Speaker 1: some of those stuff and I get that. But how 313 00:17:00,560 --> 00:17:03,840 Speaker 1: much the Queen is supposed to voice what the Prime 314 00:17:03,840 --> 00:17:07,480 Speaker 1: Minister wants, how much of it is like actual policy, 315 00:17:07,920 --> 00:17:11,800 Speaker 1: and how much of it was if I'm elected free beer? Yeah, 316 00:17:11,800 --> 00:17:15,240 Speaker 1: I mean it is obviously he the the government rights 317 00:17:15,359 --> 00:17:18,840 Speaker 1: the Queen's speech. This one was you know, it was 318 00:17:18,840 --> 00:17:21,000 Speaker 1: a bit of a joke because the government is meant 319 00:17:21,040 --> 00:17:23,040 Speaker 1: to be setting out its agenda, but it doesn't have 320 00:17:23,080 --> 00:17:26,280 Speaker 1: a majority. It has a majority of minus forty five, 321 00:17:26,440 --> 00:17:29,960 Speaker 1: so it's not a legislative Agenda's effectively an election manifesto. 322 00:17:30,600 --> 00:17:33,680 Speaker 1: Uh so it is a lot of you know, sort 323 00:17:33,680 --> 00:17:36,640 Speaker 1: of free here. There was lots of talk about social 324 00:17:36,680 --> 00:17:39,760 Speaker 1: care and other spending programs. It's basically telling voters, if 325 00:17:39,760 --> 00:17:42,280 Speaker 1: you elect us, this is what will you know, this 326 00:17:42,359 --> 00:17:44,760 Speaker 1: is what we'll do. Um, and so it was very 327 00:17:44,760 --> 00:17:47,399 Speaker 1: controversial as well. Well you're you're a great student of 328 00:17:47,440 --> 00:17:49,639 Speaker 1: the press. There was was a feeling that Queen was 329 00:17:49,680 --> 00:17:53,760 Speaker 1: put in a compromising position. Yeah, there was a lot 330 00:17:53,800 --> 00:17:59,879 Speaker 1: of scrutiny of the decision to prorogue or suspend parliament 331 00:18:00,040 --> 00:18:02,480 Speaker 1: even for the short period and have a queen speech. 332 00:18:02,880 --> 00:18:06,280 Speaker 1: It was very performative. It doesn't serve any uh, you know, 333 00:18:06,320 --> 00:18:09,240 Speaker 1: any practical function. But you know, we are now in 334 00:18:09,280 --> 00:18:12,800 Speaker 1: the realm of you know, the ridiculous, I think, in 335 00:18:12,840 --> 00:18:14,760 Speaker 1: the view of many people, and this was just par 336 00:18:14,960 --> 00:18:18,240 Speaker 1: for this new course that you know that everyone is on. Well, 337 00:18:18,240 --> 00:18:20,800 Speaker 1: thank you, truths revel with a really good essay folks, 338 00:18:20,800 --> 00:18:23,520 Speaker 1: sing Singapore and Attams. For those of you in Newport, 339 00:18:23,600 --> 00:18:27,760 Speaker 1: Rhode Island, it's Singapore and Thames. But I don't understand 340 00:18:27,800 --> 00:18:32,000 Speaker 1: the Thames Thames, Singapore and Thames. I'll try to get 341 00:18:32,000 --> 00:18:36,000 Speaker 1: that on Twitter. Bloomberg Opinion touris Raphael with us this morning. 342 00:18:50,240 --> 00:18:53,560 Speaker 1: Let us pause and do this over the next good 343 00:18:53,600 --> 00:18:57,800 Speaker 1: half hour with Gerard Cassidy of RBC Capital Markets, who 344 00:18:57,880 --> 00:19:01,119 Speaker 1: said two years ago, I know they're going nowhere, but 345 00:19:01,240 --> 00:19:06,600 Speaker 1: at some point they'll move. If patient investors the banks moved, Gerard, 346 00:19:06,600 --> 00:19:09,600 Speaker 1: I looked at Golden Sacks today tenure track record three 347 00:19:09,600 --> 00:19:13,560 Speaker 1: point six percent per year. I looked at JP Morgan 348 00:19:13,680 --> 00:19:18,000 Speaker 1: ten point x percent per year. Does JP Morgan's succeed 349 00:19:18,920 --> 00:19:25,360 Speaker 1: because of their best practices or because they avoid worst practices? Tom, 350 00:19:25,440 --> 00:19:28,640 Speaker 1: That's a really good point, because you put your thumb 351 00:19:28,640 --> 00:19:31,640 Speaker 1: on it. With JP Morgan, they know how to execute 352 00:19:32,320 --> 00:19:37,680 Speaker 1: the investment banking commercial banking businesses are generally commodity businesses. 353 00:19:37,720 --> 00:19:42,720 Speaker 1: There's no patents or proprietary you know, products that really 354 00:19:42,760 --> 00:19:47,400 Speaker 1: can distinguish one bank from another bank. It's all about execution, 355 00:19:47,960 --> 00:19:51,159 Speaker 1: and that's what JP Morgan did again this quarter, and 356 00:19:51,200 --> 00:19:54,080 Speaker 1: they're demonstrating that they're really starting to lead the pack, 357 00:19:54,440 --> 00:19:58,320 Speaker 1: that they're able to deliver better than expected results because 358 00:19:58,320 --> 00:20:00,720 Speaker 1: they're executing, whereas the other bank things don't seem to 359 00:20:00,760 --> 00:20:04,680 Speaker 1: be executing as well. In some cases, what is executing me? 360 00:20:04,920 --> 00:20:07,080 Speaker 1: You've only been doing this for four hundred years, you 361 00:20:07,160 --> 00:20:11,280 Speaker 1: were and Hamilton was arguing before Andrew Jackson about there 362 00:20:11,280 --> 00:20:16,520 Speaker 1: being too many banks. What does executing actually mean? It 363 00:20:16,600 --> 00:20:21,639 Speaker 1: really comes down to looking at the playbook and having 364 00:20:21,640 --> 00:20:25,520 Speaker 1: a map to drive the revenues and control your expenses. 365 00:20:25,840 --> 00:20:29,439 Speaker 1: So it means making sure people are following up on 366 00:20:29,560 --> 00:20:33,240 Speaker 1: phone calls with clients after a client meeting. It means 367 00:20:33,320 --> 00:20:36,359 Speaker 1: that you know, opening branches, you know, when you're building 368 00:20:36,359 --> 00:20:39,240 Speaker 1: out new branches, as JP Morgan is doing in Boston 369 00:20:39,480 --> 00:20:42,800 Speaker 1: and Washington, d C. For example, opening them on time, 370 00:20:43,160 --> 00:20:45,800 Speaker 1: having the layouts the way they wanted to. It's all 371 00:20:45,840 --> 00:20:48,920 Speaker 1: these little things that really add up. You see, always 372 00:20:48,920 --> 00:20:51,320 Speaker 1: set up cassidy with that answer, because I knew where 373 00:20:51,359 --> 00:20:55,280 Speaker 1: I was going next. Paul, this was Jamie Diamond's annual essay, 374 00:20:55,640 --> 00:20:58,240 Speaker 1: and he just he put in trumpy and all caps 375 00:20:58,359 --> 00:21:01,320 Speaker 1: hard work, hard work. It's just how work. It's just jarred. 376 00:21:01,359 --> 00:21:03,359 Speaker 1: I mean, it's I can't remember a day when we 377 00:21:03,400 --> 00:21:05,480 Speaker 1: had so many big banks reporting on one day. So 378 00:21:05,680 --> 00:21:07,760 Speaker 1: what I think a lot of our listeners and investors 379 00:21:07,760 --> 00:21:09,560 Speaker 1: are trying to do is try to take a step 380 00:21:09,560 --> 00:21:12,440 Speaker 1: back and say what can we take away about the 381 00:21:12,560 --> 00:21:18,680 Speaker 1: U S and global banking business from today's results. It's 382 00:21:18,720 --> 00:21:21,919 Speaker 1: really interesting that you bring that up, because we are 383 00:21:22,040 --> 00:21:25,160 Speaker 1: overwhelmed with bank results today and we will be tomorrow. 384 00:21:25,720 --> 00:21:28,240 Speaker 1: And when you step back for a moment and look 385 00:21:28,280 --> 00:21:32,199 Speaker 1: at the bigger picture, our banking system is very strong. 386 00:21:32,359 --> 00:21:35,560 Speaker 1: Our biggest banks are very strong, and they're taking market 387 00:21:35,600 --> 00:21:39,480 Speaker 1: share away from the European banks who continue to struggle 388 00:21:39,600 --> 00:21:43,240 Speaker 1: in the capital markets businesses. But what's also clear from 389 00:21:43,240 --> 00:21:47,600 Speaker 1: today's results is the consumer banking business in the United 390 00:21:47,600 --> 00:21:50,919 Speaker 1: States is very strong, which is supported by their strong 391 00:21:51,240 --> 00:21:54,919 Speaker 1: consumer numbers. We see whether it's employment wage gains, and 392 00:21:54,960 --> 00:21:58,320 Speaker 1: that's now showing up in the banking results. So, Gerard, 393 00:21:58,359 --> 00:22:00,119 Speaker 1: one of the narratives that I think we hear a 394 00:22:00,119 --> 00:22:03,320 Speaker 1: lot as we think about global banking um is that 395 00:22:03,359 --> 00:22:06,960 Speaker 1: the US banks did a pretty good job post crisis 396 00:22:07,040 --> 00:22:10,080 Speaker 1: kind of right sizing themselves to the new world, the 397 00:22:10,080 --> 00:22:13,879 Speaker 1: new regulatory world, the new return outlook, whereas perhaps the 398 00:22:13,920 --> 00:22:17,400 Speaker 1: Europeans really haven't been as aggressive. Is that a fair assessment. 399 00:22:18,160 --> 00:22:21,320 Speaker 1: That's a very fair assessment. But I wouldn't put it 400 00:22:21,440 --> 00:22:24,879 Speaker 1: all on the shoulders at the banks did it themselves. 401 00:22:25,359 --> 00:22:27,560 Speaker 1: They were forced to do it by the Federal Reserve. 402 00:22:27,920 --> 00:22:30,320 Speaker 1: So the Federal Reserve put a gun to these banks 403 00:22:30,320 --> 00:22:33,280 Speaker 1: heads back in No. Nine intent and forced them to 404 00:22:33,359 --> 00:22:36,919 Speaker 1: raise capital at distress prices. But by doing that, it 405 00:22:37,119 --> 00:22:39,879 Speaker 1: enabled them to write off the problems that they were 406 00:22:39,920 --> 00:22:42,600 Speaker 1: in into and they turned around much quicker that did 407 00:22:42,640 --> 00:22:45,119 Speaker 1: not happen over in Europe, and that is the huge 408 00:22:45,160 --> 00:22:48,000 Speaker 1: difference between the two banking systems. Did you read in 409 00:22:48,040 --> 00:22:50,399 Speaker 1: the you know, I mean everybody's mantage of the message, folks, 410 00:22:50,400 --> 00:22:52,720 Speaker 1: and you know we make jokes about it, but Paul 411 00:22:52,760 --> 00:22:54,760 Speaker 1: and I don't. Gerard Cassidy can read one of these 412 00:22:54,760 --> 00:22:58,040 Speaker 1: press releases in about six seconds. Is there any talking 413 00:22:58,080 --> 00:23:02,560 Speaker 1: there about right sizing, layoffs, all the other happy jargon 414 00:23:02,640 --> 00:23:07,280 Speaker 1: that's about firing people, Tom, I haven't seen any of that. 415 00:23:07,320 --> 00:23:11,080 Speaker 1: In fact, we've brought up on the call with JP Morgan. 416 00:23:11,160 --> 00:23:15,560 Speaker 1: I asked Jamie Diamond about the technology investing, how important 417 00:23:15,640 --> 00:23:19,040 Speaker 1: it is for the capital markets, business and markets, and 418 00:23:19,080 --> 00:23:22,240 Speaker 1: they are investing very heavily. So the one area that 419 00:23:22,280 --> 00:23:25,600 Speaker 1: you could see head count reduction, you know, the trading desks. 420 00:23:25,600 --> 00:23:27,040 Speaker 1: You and I both know you go to the New 421 00:23:27,080 --> 00:23:30,199 Speaker 1: York Stock Exchange today and it's a museum. Basically, there 422 00:23:30,240 --> 00:23:33,320 Speaker 1: aren't any many people there because technology is taken over. 423 00:23:33,400 --> 00:23:35,959 Speaker 1: So we've seen it in terms across the board head 424 00:23:36,040 --> 00:23:39,520 Speaker 1: count reductions. We haven't heard that at all, the second 425 00:23:39,560 --> 00:23:41,639 Speaker 1: time I've heard that this week. Somebody said earlier this 426 00:23:41,680 --> 00:23:46,320 Speaker 1: week Bloomberg surveillance was like a museum. No New York 427 00:23:46,320 --> 00:23:50,080 Speaker 1: Stock Exchange not not not your so so, Gerward, I mean, 428 00:23:50,480 --> 00:23:53,159 Speaker 1: is it simply what are the banks kind of telling 429 00:23:53,200 --> 00:23:56,120 Speaker 1: investors now about you know, the next two to three years. 430 00:23:56,119 --> 00:23:57,800 Speaker 1: We hear a lot of talking just about it is 431 00:23:57,880 --> 00:24:00,280 Speaker 1: just slower growth. We've got the I m F taking 432 00:24:00,320 --> 00:24:03,760 Speaker 1: down g d P numbers today. Um are they kind 433 00:24:03,760 --> 00:24:07,760 Speaker 1: of telling the investors top mind, growth going forward is 434 00:24:07,760 --> 00:24:09,080 Speaker 1: going to be less than maybe what it's been over 435 00:24:09,080 --> 00:24:13,320 Speaker 1: the last several years. They really haven't said that that specifically. 436 00:24:13,400 --> 00:24:15,840 Speaker 1: You know there there are somewhat reluctant to give out 437 00:24:15,920 --> 00:24:18,720 Speaker 1: that type of guidance over a long period of time. 438 00:24:19,080 --> 00:24:23,480 Speaker 1: But clearly what we're seeing is that as the economy slows, 439 00:24:23,920 --> 00:24:27,000 Speaker 1: banks are intertwined. I often say banks are products of 440 00:24:27,040 --> 00:24:29,520 Speaker 1: the economy, and so if the economy is going to 441 00:24:29,600 --> 00:24:33,680 Speaker 1: slowing growth in invariably that will lead to slower revenue 442 00:24:33,720 --> 00:24:36,160 Speaker 1: growth for the banks. Now, we did see this quarter 443 00:24:36,400 --> 00:24:38,879 Speaker 1: that net interest margin impression that we've talked about in 444 00:24:38,920 --> 00:24:41,680 Speaker 1: the past. Some banks were able to offset that would 445 00:24:41,680 --> 00:24:45,560 Speaker 1: better growth in the capital markets businesses and also origination volumes, 446 00:24:45,720 --> 00:24:48,480 Speaker 1: particularly in residential, mortgage and auto for some of the 447 00:24:48,480 --> 00:24:52,160 Speaker 1: banks were strong. Zara, give me one small small bank 448 00:24:52,240 --> 00:24:56,000 Speaker 1: we can talk about. Um. We continue to come back. 449 00:24:56,240 --> 00:24:58,359 Speaker 1: I think the last time we said a time about 450 00:24:58,400 --> 00:25:03,400 Speaker 1: the S one Bank Orp, s b B ACT Sam Bill, Bill, Xavier, Okay. 451 00:25:03,560 --> 00:25:05,960 Speaker 1: They you continue to do a very good job. And 452 00:25:06,000 --> 00:25:08,720 Speaker 1: it's interesting you bring that up because this country, we 453 00:25:08,800 --> 00:25:11,000 Speaker 1: have more banks than any of the world, any other 454 00:25:11,040 --> 00:25:13,520 Speaker 1: country in the world, and the small banks have a role. 455 00:25:13,600 --> 00:25:15,480 Speaker 1: They're not going to get in our view. We don't 456 00:25:15,480 --> 00:25:17,359 Speaker 1: think they go out of business. They need to have 457 00:25:17,400 --> 00:25:20,879 Speaker 1: a niche. If you have a nie, you can survive. 458 00:25:21,080 --> 00:25:23,600 Speaker 1: I gotta leave it there. Thank you so much, greatly appreciated. 459 00:25:23,640 --> 00:25:28,320 Speaker 1: Always end Broadcastidy RBC Capital Markets. Thanks for listening to 460 00:25:28,400 --> 00:25:32,919 Speaker 1: the Bloomberg Surveillance podcast. Subscribe and listen to interviews on 461 00:25:32,960 --> 00:25:38,800 Speaker 1: Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm 462 00:25:38,840 --> 00:25:42,160 Speaker 1: on Twitter at Tom Keane before the podcast. You can 463 00:25:42,200 --> 00:25:45,359 Speaker 1: always catch us worldwide. I'm Bloomberg Radio.