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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside

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Speaker 1: my co host Matt Miller. Every business day we bring

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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

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Speaker 1: with essential market moving news. Find the Bloomberg Markets Podcast

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Speaker 1: on Apple Podcasts or wherever you listen to podcasts, and

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Speaker 1: at Bloomberg dot com slash podcast. Let's talk a little

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Speaker 1: crypto now, Matt, looking at Bitcoin. It's up about a

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Speaker 1: half of one percent today to sixty two thousand, let's

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Speaker 1: call it seven d two thousand, seven hundred. Coin based Global,

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Speaker 1: the big initial offering yesterday via a director listing. It

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Speaker 1: is up two percent today after a wild day of

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Speaker 1: trading yesterday. But it's up two percent today. What we

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Speaker 1: need here is a little perspective on all things crypto.

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Speaker 1: To do that, we turned to Barry Ridhold's founder RD

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Speaker 1: Holt's Wealth Management. He's a Bloomberg Opinion calmness and host

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Speaker 1: of Masters in Business on Bloomberg. Really like fantastic podcast.

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Speaker 1: All right, Barry, coin Base yesterday, A lot of folks

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Speaker 1: are out there with a narrative that coin base, uh

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Speaker 1: was a validation point for the crypto market. Is that

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Speaker 1: how you viewed it. I was more intrigued by the

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Speaker 1: fact that it was a direct listing by passing the

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Speaker 1: usual I P O process. And you have folks, especially

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Speaker 1: out in Silicon Valley, people like Bill Gurley of Benchmark Capital,

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Speaker 1: who have been saying, hey, why are we having big

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Speaker 1: brokerage firms and Wall Street capturing or miss pricing so

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Speaker 1: much of the value of these new companies. Hold that aside.

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Speaker 1: Maybe that's a little too inside baseball, but but the

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Speaker 1: what what coin base validates is that there is now

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Speaker 1: a credible way uh to deal on an institutional basis

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Speaker 1: with holding crypto. So some of the studies have shown

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Speaker 1: maybe even of all mind coins have either been law

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Speaker 1: or are locked in password protected Matt Mill where can

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Speaker 1: access it? And and you know, imagine if a third

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Speaker 1: of brokerage accounts, sorry you, your money is gone. You're

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Speaker 1: purposely rubbing salt in my wounds. Here, Berry, how much?

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Speaker 1: How much bitcoin have you lost somewhere? How many? Nine eleven?

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Speaker 1: I don't know, And even if I knew, I couldn't

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Speaker 1: tell you because my wife already wants to kill me.

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Speaker 1: So whenever she asked me like how much is it,

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Speaker 1: I'm like, it's a very small amount. Don't worry. The

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Speaker 1: g T three fully mocked up for the track for you.

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Speaker 1: You definitely definitely that it's definitely regular password by blockchain wallet.

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Speaker 1: And uh, I promptly forgot about it. You know, it

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Speaker 1: was two thousand twelve. What what did I know? So

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Speaker 1: coin base is what solves theoretically anyway solves that problem

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Speaker 1: because you don't have to I mean, I've heard stories

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Speaker 1: about people etching past words on on metal bars and

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Speaker 1: then sticking that into a into a bank vault, and

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Speaker 1: then you have to worry is the melting point of

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Speaker 1: that steel high enough in case the bank burns down?

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Speaker 1: I mean, think about how crazy that is. Dude, Matthew

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Speaker 1: Mellen used to do. He Matthew Mellen used to put

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Speaker 1: it on He used to go and buy laptops and

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Speaker 1: then put it on them in cold storage and then

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Speaker 1: go and buy safe and bring them to friends houses

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Speaker 1: and then put it in the safe in a friend's house.

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Speaker 1: You know, So like, uh, some people get very That's

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Speaker 1: why I like the equity traded product that coin Shares does.

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Speaker 1: You can buy bitcoin through them and they just hold

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Speaker 1: it in custody for you. As someone who has had

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Speaker 1: computers and laptops. Going back to my Mac Classic, I

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Speaker 1: wouldn't want to put a billion dollars of value on

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Speaker 1: something as completely unreliable as a laptop in cold storage.

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Speaker 1: Talk about a recipe for disaster, No hard pass, Barry.

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Speaker 1: I want to get to UM. You know, I've been

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Speaker 1: working here at Bloomberg since January of two thousand and UM.

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Speaker 1: I think I started paying attention like six or seven

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Speaker 1: years later. I remember distinctly hearing arguments for the continued

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Speaker 1: market run up in two thousands six seven that there

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Speaker 1: was so much cash on the sidelines, and I was

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Speaker 1: totally uh, you know, sold hook line and sinker on this. Man,

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Speaker 1: If there's two trillion dollars in cash on the sidelines,

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Speaker 1: then this market has a lot further to run. I've

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Speaker 1: never heard the end of that argument. No matter what,

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Speaker 1: there's always so much cash on the sidelines. What is

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Speaker 1: this coming from. Well, it's one of those tropes that

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Speaker 1: live brokers used to talk people into buying or trading stocks. Look,

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Speaker 1: there's always cash on the sidelines, number one. That doesn't

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Speaker 1: go away. And if you want to talk about cash

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Speaker 1: that matters, you're either talking about the velocity of money

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Speaker 1: how fast cash is moving through the economy. And as

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Speaker 1: we've seen in the velocity of money was very low

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Speaker 1: even as the market rocketed up to new highs. So

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Speaker 1: it can't be that. And and then there are other

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Speaker 1: things to look at. Um. The AII does a study

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Speaker 1: on a monthly basis of how much cash is allocated

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Speaker 1: within individual portfolios to stocks versus cash, and at peace

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Speaker 1: it's too much stock, and and at lows it's too

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Speaker 1: much cash. But you know, you get a signal from

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Speaker 1: that once every five or ten years. It's nothing that's

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Speaker 1: that's reliable. The one simple way to think about this is,

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Speaker 1: all right, so all that cash on the sidelines, what's

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Speaker 1: going to happen with that? Well, Matt, if I'm going

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Speaker 1: to buy a thousand shares of Amazon from you, I

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Speaker 1: have cash, you have stocked. We engage in that transaction

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Speaker 1: through through our robin Hood account. Now, how I have

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Speaker 1: a thousand shares of Amazon and you have six thousand

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Speaker 1: dollars in cash. The same exact amount of money is

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Speaker 1: still on the sidelines. For every buyer of stock. There

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Speaker 1: is a seller um who gets the cash, and so

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Speaker 1: the cash on the sidelines never changes. It's just ownership

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Speaker 1: of the cash and the equity swaps hands it. By

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Speaker 1: the way, does the dry powder article our argument for

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Speaker 1: private equity hold up for you? Is that a different story. UM,

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Speaker 1: So if you're talking about either private equity or venture

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Speaker 1: capital or or anything's like that, you're really talking about

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Speaker 1: a very different asset class that is attracting capital because

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Speaker 1: it's successful. Lets use venture capital is even better example,

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Speaker 1: because private equity is kind of hard to determine what's

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Speaker 1: private equity and what's UM traditional syndication and M and

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Speaker 1: A and other stuff like that. Venture capital started out

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Speaker 1: in the sixties and seventies as a way to, hey,

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Speaker 1: how can we work with the Defense Department and others

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Speaker 1: to steer money to these important technologies where if you

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Speaker 1: remember or have read about spot nick Us Island, Russia.

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Speaker 1: And as as these companies became more and more successful,

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Speaker 1: remember semiconductors and integrated circuits is something that was produced

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Speaker 1: by UM the Apollo program and the Defense Department and

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Speaker 1: at the same with the Internet. So as as more

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Speaker 1: and more of these products scenes attracted more successful returns,

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Speaker 1: more money flowed to that sector. Alright, fascinating conversation which

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Speaker 1: we will have to continue. We've got to kick off

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Speaker 1: our car show too. You mentioned the g T three.

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Speaker 1: I really want one, UM, really excited for naturally aspirated

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Speaker 1: boxer still in Porsche's lineup. Now, I want to bring

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Speaker 1: in former senior advisor of the US Treasury Department, Dan Katz.

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Speaker 1: He is also a Bloomberg opinion contributor, and he's written

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Speaker 1: a story about airlines um who have which have already

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Speaker 1: received so many tens of billions of dollars in taxpayer

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Speaker 1: help that maybe it's um, it's already too much. They

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Speaker 1: don't need anymore, Dan Um. In your in your piece,

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Speaker 1: you point out that US airlines got a fifty billion

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Speaker 1: dollar lifeline um last year last March, and then another

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Speaker 1: twenty billion dollars through the bipartisan year end relief package

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Speaker 1: and President biden stimulus plan. At this point, shouldn't the

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Speaker 1: US government own the US airlines outright? Uh? Well, it's

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Speaker 1: it's great to be with you, Matt and uh. And

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Speaker 1: you know, when I think about the amount of support

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Speaker 1: that's been provided to the airline, I think you really

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Speaker 1: have to break it up into what was done during

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Speaker 1: the heart of the panic, and then what was done

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Speaker 1: at at more recent times, and so in the context

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Speaker 1: of the original uh, the original intervention in March, Now,

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Speaker 1: the industry was really in an unprecedented free fall, you know,

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Speaker 1: just to take Delta, which reported this morning, you know,

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Speaker 1: they reported this morning that they were actually cash positive

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Speaker 1: in March and had access to about sixteen billion dollars

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Speaker 1: of liquidity. But in March, in their same morning report,

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Speaker 1: they were burning a hundred million dollars a day and

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Speaker 1: only had access to six million dollars of liquidity. And

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Speaker 1: deltas you know, widely acknowledged as one of the stronger

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Speaker 1: carriers in terms of the financial position amongst the large

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Speaker 1: carriers out there. So we really faced what could potentially

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Speaker 1: be a collapse of the industry or widespread, hugely widespread

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Speaker 1: layoffs that would have come at the worst possible time,

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Speaker 1: both for the labor market and also for our ability

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Speaker 1: to respond to the pandemic. So what we did in

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Speaker 1: at the end of March, you know, under the leadership

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Speaker 1: of of Secretary Minution, who was who's really uh, you know,

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Speaker 1: extraordinary in this period, I think is clearly going to

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Speaker 1: be remembered as one of the great Treasury secretaries in history.

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Speaker 1: As we put together a package that stabilized the airlines

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Speaker 1: in the short term by offering UH some payroll support

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Speaker 1: and also provided them access to loans, which had an

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Speaker 1: extremely helpful effect in allowing them to gain access to

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Speaker 1: credit markets where they've borrowed very very successfully over the

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Speaker 1: last year. And the result of that has been that

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Speaker 1: we've kept the airline that we kept the airline industry

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Speaker 1: together during the hardest part of the pandemic and UH

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Speaker 1: and and gotten them through to the other side. UH.

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Speaker 1: The question now is what should taxpayers do visa v

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Speaker 1: airlines UH in the near term? And you know, I

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Speaker 1: think I think there's little argument, based on the financial

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Speaker 1: metrics that we're seeing from the carriers today that they

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Speaker 1: needed another fourteen billion dollars in March. And then there's

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Speaker 1: going to be another fight, probably in September when the

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Speaker 1: protections associated with the March UH taxpayer funds expire, over

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Speaker 1: whether they should receive further support. And I think any

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Speaker 1: reasonable observer would say it's time for the government to

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Speaker 1: step back and allow the industry to stand on it. So, so, Dan,

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Speaker 1: do you think do you think the industry is out

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Speaker 1: of the woods now? Look, I'm not really in a

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Speaker 1: position to accurately forecast what the return of airline demand

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Speaker 1: is going to be like. Uh, you know, certainly there

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Speaker 1: are big issues associated with international travel and also with

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Speaker 1: business travel, which is so important to these carriers strategy. Um.

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Speaker 1: But what I will say is that they're all in

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Speaker 1: a very strong financial propression. Most of them are in

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Speaker 1: a very strong financial position, and so manage of teams

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Speaker 1: employees are in a position to navigate that future demand

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Speaker 1: purf uh, and it's time for them to do that

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Speaker 1: in the absence of taxpayer support. I just want to

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Speaker 1: get something you said earlier about Steve Manuchin. You think

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Speaker 1: he's going to go down as one of the great

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Speaker 1: Treasury secretaries in history um owing to his actions during

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Speaker 1: the pandemic bailout. The Paycheck Protection Program has so often

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Speaker 1: been derided as inefficient and and inept at the hands

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Speaker 1: of Steve Manuchin. Um, what do you think he did

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Speaker 1: that that merits putting him up along the grates in

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Speaker 1: the in the Hall of fame for Treasury secretaries. Well, look,

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Speaker 1: you know, just just quickly to respond to your point

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Speaker 1: on the p p P, I think a lot of

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Speaker 1: the news coverage, unsurprisingly has focused on uh some of uh,

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Speaker 1: you know, less desirable outcomes as we implemented the program

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Speaker 1: very very quickly. But what it hasn't focused on is

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Speaker 1: the overwhelming speed and success of the vast, vast majority

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Speaker 1: of the program. That that in and out itself, right,

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Speaker 1: the simplicity of getting it out there, speed of getting

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Speaker 1: it out there, which which is always going to involve

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Speaker 1: some execution risk, that that was hugely helpful to stabilize

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Speaker 1: in the economy and keeping workers attached to attached to

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Speaker 1: their healthcare and their and their employers, and also saving

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Speaker 1: you know, many many millions of jobs at small businesses

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Speaker 1: across the country. So I don't I don't think that's

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Speaker 1: really a fair critique of the p p P and

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Speaker 1: in terms of the broader legacy. But but but wait,

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Speaker 1: so you think the p p P was an efficiently

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Speaker 1: used program. All that money um went to you're saying,

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Speaker 1: save jobs and keep employee healthcare, and and that's documented. Well,

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Speaker 1: I think that, uh you can if unipick find uh,

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Speaker 1: you know, relatively small in relation to the entire scale

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Speaker 1: of the program issues to include fraud access by public companies.

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Speaker 1: We're all familiar with the stories out there, but you know,

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Speaker 1: some of my colleagues, Mike Falkoner and Steve Myron have

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Speaker 1: looked at in the paper they put out at the

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Speaker 1: end of last year, the program on the whole was

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Speaker 1: hugely successful in saving tens of millions of jobs. And

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Speaker 1: so I don't think it's fair to say because there

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Speaker 1: was one news story about shake Shack, or there were

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Speaker 1: a few instance to the fraud, that the whole program

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Speaker 1: is hard. I think if you look at the complete record,

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Speaker 1: there's no question that this program was hugely important in

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Speaker 1: protecting the economy through the worst of the pandemic. Dan,

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Speaker 1: thanks so much for joining us. We appreciate it. Dan Katz,

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Speaker 1: he's a former senior advisor at the U. S. Treasury

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Speaker 1: Department from one. He's also a Bloomberg opinion contributor. Dan

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Speaker 1: cats looking at the market here, Matt continued strength in

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Speaker 1: this market. Continue to see green on the screen. It's

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Speaker 1: a positive economic data and some decent earnings. Yeah. Absolutely,

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Speaker 1: the bank earnings picture, although I guess, um, you and

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Speaker 1: Dave Wilson need to sit down over a beer and

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Speaker 1: discuss that. Maybe you can meet in Montclair and figure

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Speaker 1: out whether these bank earnings look good or bad. They

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Speaker 1: are definitely they have definitely beaten by a large margin um.

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Speaker 1: Certainly JP Morgan yesterday and Goldman Sachs, but even today

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Speaker 1: Bank America I thought was really pretty good when they

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Speaker 1: came out with earnings a little bit early. We'll continue

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Speaker 1: to watch reaction. This is Bloomberg. Let's get a look

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Speaker 1: at this market holistical way. We do that with Chris

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Speaker 1: Wolfe's the chief investment officer for First Republic Private Wealth Management.

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Speaker 1: They have about two and twenty billion dollars in assets

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Speaker 1: under management. So christ Matt and I were just talking

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Speaker 1: about this market, and we're saying, hey, even when you

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Speaker 1: got a big company like a city like a Bank

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Speaker 1: of American, report some really strong numbers, the stock doesn't

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Speaker 1: necessarily move higher. Does that signal maybe a risk for

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Speaker 1: this market that, uh, the market's really discounting just extraordinary

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Speaker 1: earnings and if you don't deliver, you're not gonna get paid. Yeah.

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Speaker 1: I think there's a syentim here, which is what's going

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Speaker 1: on in the first quarter. And I think a lot

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Speaker 1: of expectations for investors were built up to a pretty

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Speaker 1: high level. So what they're really looking for, I think

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Speaker 1: is the guidance about the second half of the remainder

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Speaker 1: part of this year. And that guidance has turned out

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Speaker 1: to be just a little bit tepid. It makes sense

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Speaker 1: for folks to offer guidance that's not super bullish right now.

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Speaker 1: So I think investors just built up an expectation that

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Speaker 1: the guidance for the remainder of the year and particularly financials,

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Speaker 1: you know, loan volume and other things, would be very strong,

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Speaker 1: and it's just come in a little bit less than expected.

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Speaker 1: I don't I don't read a lot into today's trading

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Speaker 1: that there's a huge risk here. I think what's behind

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Speaker 1: all of it in terms of the economic data is

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Speaker 1: still very strong that we're going to get into an

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Speaker 1: earning season, not just for first quarter, which would be good,

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Speaker 1: but I think it'll be carried through the second and

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Speaker 1: third quarter. Does loan growth have to be strong for

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Speaker 1: you to really expect seven, you know, eight percent growth

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Speaker 1: this year for you to really expect to pop in.

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Speaker 1: Do people need to be running out and borrowing money

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Speaker 1: for businesses if the economy is going to be growing

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Speaker 1: that that quickly? You know? I think, Look, we wrote

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Speaker 1: a piece a couple of months ago called the Year

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Speaker 1: two Bridges. We thought one was gonna have required to

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Speaker 1: get through it a healthcare bridge and a stimulus bridge

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Speaker 1: and BOYD and we're getting that in spades. I do

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Speaker 1: think there's some learnering concerns though about kind of the

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Speaker 1: variants in COVID, and ultimately the Johnson Johnson vaccine news

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Speaker 1: has been to think a little bit challenging. So um,

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Speaker 1: I think that healthcare bridge is mostly built, but it's

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Speaker 1: got a ways to go, and the stimulus bridge is

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Speaker 1: just you know, being built as fast as possible. So

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Speaker 1: why would we use this as an example because I

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Speaker 1: think when you're talking about the second, third, and fourth quarter,

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Speaker 1: there's a little bit of caution now, But as sentiment improves,

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Speaker 1: the COVID bridge gets finalized and we get into a

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Speaker 1: place where there's more infrastructure spending, I think sentiment improves

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Speaker 1: a little bit more and that releases some of the

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Speaker 1: savings to get you to the seven, eight, nine. And

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Speaker 1: by the way, there's even an outside chance on GDP

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Speaker 1: that you print a nine or ten handle uh in

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Speaker 1: one because of all the stimulus that hasn't been spent yet,

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Speaker 1: a lot of it's been saved. So to the extent

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Speaker 1: companies looking to run out and borrow money, I think

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Speaker 1: what they're gonna be is a little bit cautious and

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Speaker 1: kind of use the first quarter and use the kind

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Speaker 1: of spending story that consumers are going to put up

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Speaker 1: there as sentiments improves as a way to respond to that.

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Speaker 1: But you know, all things told, banks are in a

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Speaker 1: pretty good shape to capture that, you know, potential loan

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Speaker 1: growth later this year. All right, Chris, we look at

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Speaker 1: these equity markets here charging charging to ever higher highs.

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Speaker 1: What's the biggest risks to the equity call right here?

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Speaker 1: You know that. I think the biggest is really two

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Speaker 1: of them. One is the bridges we just talked about

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Speaker 1: fail for some reason. There's a variant mutation in the

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Speaker 1: uh COVID story that we just don't understand yet. Science

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Speaker 1: suggests that mutations are picking up outside the rest of

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Speaker 1: the world, and that's kind of a tale to that

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Speaker 1: story as well. The big surprise has been how weak

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Speaker 1: the vaccine response has been in Europe and other areas

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Speaker 1: of the world. The US, despite all of our challenges,

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Speaker 1: is actually leading in this regard. So the risks of

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Speaker 1: the rest of the world just ends up with lots

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Speaker 1: of variants running around and we end up in a

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Speaker 1: reinfection pattern. And that's a meaningful one with respect to

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Speaker 1: consumption sentiment and ultimately market multiples. UM. You know, I

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Speaker 1: think the second piece is more strategic, and it's really

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Speaker 1: what's the relationship between US and China right now? It's

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Speaker 1: you know, fairly challenged. There's a lot of things that

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Speaker 1: look like China wants to be equal with the US.

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Speaker 1: In many ways they are, But the reality is, I

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Speaker 1: think economically, things like digital currencies, for example, changing payment

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Speaker 1: systems represents structural changes that I'm not sure how they're

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Speaker 1: all going to play out, And I think for most investors,

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Speaker 1: I'm not sure they're all bad, but they may represent

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Speaker 1: a change and a big change to the way they

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Speaker 1: think about investing in one and beyond. So what are

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Speaker 1: you saying that China maybe as a command economy UM

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Speaker 1: has a little bit of a lead here in the

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Speaker 1: in the short and near term. But with respect to

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Speaker 1: blockchain technology all the way back to the you know,

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Speaker 1: mine is tracking people with COVID. I mean, there's no

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Speaker 1: privacy issues there. They run everything that that is absolutely true,

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Speaker 1: but that's their model, and their their model works to

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Speaker 1: put up GDP numbers, you know, fairly consistently. You can

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Speaker 1: believe them or not but the reality is that's where

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Speaker 1: they are. The relationship US has what China is important though,

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Speaker 1: key though. All right, Chris, thanks so much for joining us.

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Speaker 1: Chris Wolf, their chief investment officer of First Republic Private

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Speaker 1: Wealth Management, talking to us about the state of the

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Speaker 1: economy as we're in the heart of bank earnings. This

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Speaker 1: is Bloomberg I want to bring in right now. Can Leon,

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Speaker 1: he's a global director of UH Industry and Equity Research

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Speaker 1: at cf are A Research, talking to us about what

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Speaker 1: we saw this morning and yesterday, Um, in terms of

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Speaker 1: bank earnings and what we can expect tomorrow. Can first off, UM,

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Speaker 1: talk to me about Bank America earnings. They came out early,

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Speaker 1: very early. In fact, it was the first time I

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Speaker 1: can remember coming out in the five am hour Bank

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Speaker 1: America earnings. They looked good. Um, initially not you know,

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Speaker 1: JP Morgan, Goldman Sacks good, but still pretty good. And

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Speaker 1: yet the stock is off. Why are investors selling it?

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Speaker 1: So Bank of America is more of a commercial bank

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Speaker 1: than a capital markets driven back JP Morgan also is

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Speaker 1: kind of a hybrid. Of course, Goldman, Sachs and Morgan

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Speaker 1: Stanley are all feed in with the capital markets, which

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Speaker 1: we like a lot Bank of America. Then when you

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Speaker 1: look at the mechanics of how it drives growth and

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Speaker 1: the high investor expectations ahead has to drive higher net

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Speaker 1: interest income, which means a steepening yield curve, and then

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Speaker 1: it's the US economy. Can we get the consumer and

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Speaker 1: commercial businesses to increase lown activity. Those measures were negative

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Speaker 1: in the quarter, and that's why the stock is trading down.

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Speaker 1: And the expectations is from the CFO of Bank America's

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Speaker 1: maybe with a rising yield curve, you know, we can

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Speaker 1: bring back a billion dollars of net interest income that's

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Speaker 1: not there today. So it's a very different profile than

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Speaker 1: a JP Morgan, which is a little bit more like

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Speaker 1: an investment bank, or the ones we really liked with

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Speaker 1: strong buys, Goldman Sachs and Morgan Stanley. So that's interesting, Ken,

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Speaker 1: because yesterday we had Chris Whale and on, chairman of

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Speaker 1: Will and Global Advisors, and he was making the argument

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Speaker 1: that you know, when you strip out some of the

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Speaker 1: reserve reversals UH and some of the capital markets business,

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Speaker 1: the underlying banking business, he thinks by YearIn is going

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Speaker 1: to be in a world of trouble. Is that too

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Speaker 1: bearish from your perspective, it isn't. But most of the

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Speaker 1: bank analysts, so I am a bank analyst, but you

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Speaker 1: know they're siloed and and they they're just seeing, we're

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Speaker 1: going to model out of higher net interesting home this

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Speaker 1: year and next year. And you know what's interesting here

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Speaker 1: is when you look at traditional commercial banks, JP Morgan

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Speaker 1: is the only one that has shown positive growth in

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Speaker 1: this category since two thousand and fifteen, not Wills far Ago,

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Speaker 1: Knock Bank of America, perhaps not some of the regional banks.

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Speaker 1: So it is tough, but the overall environment works two ways.

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Speaker 1: We have recovery, but you've got to see that pull

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Speaker 1: through into the bank metrics I mentioned. And secondly, the

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Speaker 1: risk related to UH credit risk exposure and loan reserves

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Speaker 1: is getting better. And that that to me, is more

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Speaker 1: of a rear mirror conversation, more in front of us.

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Speaker 1: When we were talking about this last year. JP Morgan

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Speaker 1: still down off today's seven tenths of percent. It fell

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Speaker 1: yesterday one nine percent. It was down on Tuesday one

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Speaker 1: down on Monday two tenths of percent. I mean, investors

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Speaker 1: this week just don't like the bank um has it

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Speaker 1: just run too far, too fast, you know, UH, so

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Speaker 1: I've been covering these banks for over ten years and

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Speaker 1: I've never seen JP Morgan even when they have a

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Speaker 1: blowout quarter UM where the stock goes up. And in

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Speaker 1: this case though, they had the window dressing as you've

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Speaker 1: mentioned of these loanloest reserves which boost earnings. But overall

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Speaker 1: this is best in class UM commercial bank JP Morrigan,

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Speaker 1: and they have a bigger exposure to the investment bank UM.

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Speaker 1: I would say that, you know, over the long term,

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Speaker 1: UH listeners should do JP Morgan as a very attractive

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Speaker 1: large cap core holding in their portfolio. So can as

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Speaker 1: you're talking to your clients UM during this period, what

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Speaker 1: are your top picks that you're pushing that you know

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Speaker 1: financials have done so well so for portfolios thinking about sectors,

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Speaker 1: and we had black Rock and Swab today as well,

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Speaker 1: UH swaps today. These are these are phenomenal world class

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Speaker 1: franchises UM. And I think if it gets to being

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Speaker 1: a stock picking world, which is what we do to UM,

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Speaker 1: I'm going to stay with the capital markets given more

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Speaker 1: in a risk on environment and low rate UM. You're

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Speaker 1: gonna hear this lad and clear from Morgan Stanley tomorrow

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Speaker 1: on great results and Goldman Sachs had a grand slam.

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Speaker 1: It wasn't a home run, it was a grand slam. Uh.

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00:25:27,600 --> 00:25:30,960
Speaker 1: And that's where we are with strong boys. Um to

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00:25:31,080 --> 00:25:33,760
Speaker 1: the negative point of the other analysts you mentioned, we

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00:25:33,880 --> 00:25:37,280
Speaker 1: also have a cell recommendation on Wells Fargo. I don't

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00:25:37,280 --> 00:25:42,280
Speaker 1: think they have uh, the real turn of positive interest

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00:25:42,440 --> 00:25:46,560
Speaker 1: income generation that they really need and loan activity because

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00:25:46,560 --> 00:25:50,360
Speaker 1: their franchise was hurt by some of the sales practices

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00:25:50,440 --> 00:25:53,640
Speaker 1: they had. That's where we are. Hey, Ken, thank you

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Speaker 1: so much for joining us. We always appreciate getting your

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00:25:55,520 --> 00:25:57,200
Speaker 1: thoughts at this time at the quarter when we have

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Speaker 1: the big banks putting up their numbers. Ken Leone, Global

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Speaker 1: director of Industry and Equity Research at c f r

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00:26:03,520 --> 00:26:06,480
Speaker 1: A Research has been covering the banks for about a decade.

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00:26:06,480 --> 00:26:09,520
Speaker 1: And it's interesting MANDI favoring those the big investment banks

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00:26:09,520 --> 00:26:13,160
Speaker 1: as opposed to perhaps some of the more commercial banks. Um.

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00:26:13,200 --> 00:26:14,920
Speaker 1: So that seems to be the way that he's looking

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00:26:14,960 --> 00:26:17,560
Speaker 1: at it right here in Goldman Saxes gets his strong

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00:26:17,600 --> 00:26:20,159
Speaker 1: by rating. And again, as you pointed out, Matt, the banks,

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00:26:20,240 --> 00:26:22,760
Speaker 1: you know, maybe priced in to perfection, you know, buy

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00:26:22,840 --> 00:26:24,760
Speaker 1: on the rumors, selling the news type of thing here

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00:26:24,800 --> 00:26:28,080
Speaker 1: as they record their numbers. Thanks for listening to the

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Speaker 1: Bloomberg Markets podcast. You can subscribe and listen to interviews

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00:26:32,040 --> 00:26:36,320
Speaker 1: of Apple Podcasts or whatever podcast platform you prefer. I'm

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00:26:36,359 --> 00:26:40,800
Speaker 1: Matt Miller. I'm on Twitter at Matt Miller. Put on

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00:26:40,920 --> 00:26:44,000
Speaker 1: fall Sweeney I'm on Twitter at pt Sweeney Before the podcast.

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Speaker 1: You can always catch us worldwide at Bloomberg Radio