1 00:00:03,480 --> 00:00:08,200 Speaker 1: This is Bloomberg Surveillance. Monetary policy cannot by stimulate and 2 00:00:08,240 --> 00:00:12,360 Speaker 1: create permanent jobs, and it can't lift long run potential growth. 3 00:00:12,360 --> 00:00:14,880 Speaker 1: The central thing holding us back throughout this recovery has 4 00:00:14,920 --> 00:00:17,520 Speaker 1: been lack of demographic role to that's not change in 5 00:00:17,520 --> 00:00:19,800 Speaker 1: any type suit. We're creating a boat voted job and 6 00:00:19,880 --> 00:00:22,360 Speaker 1: they we're creating on average or two or thousand jobs 7 00:00:22,360 --> 00:00:24,040 Speaker 1: per month, and that's a lot more than we need 8 00:00:24,120 --> 00:00:27,200 Speaker 1: to absorb the growth and organ age population. Bloomberg Surveillance 9 00:00:27,440 --> 00:00:31,000 Speaker 1: your link to the world of economics, finance and investment 10 00:00:31,240 --> 00:00:35,120 Speaker 1: on Bloomberg Radio. Good morning everyone, Bloomberg Surveillance. Michael McKee 11 00:00:35,120 --> 00:00:38,360 Speaker 1: and Tom Keene. It's a Wednesday that important you see 12 00:00:38,440 --> 00:00:41,960 Speaker 1: be meeting tomorrow. We will brief you on economics, finance 13 00:00:42,120 --> 00:00:45,800 Speaker 1: and investment in this hour. The Forex Brief this morning 14 00:00:45,800 --> 00:00:50,160 Speaker 1: brought by Interactive Brokers, winner of FX Weeks two thousand 15 00:00:50,240 --> 00:00:54,760 Speaker 1: fifteen award for the best retail forex trading platform, visit 16 00:00:54,880 --> 00:01:00,279 Speaker 1: ib at ibk r dot com slash four x yen 17 00:01:00,440 --> 00:01:03,680 Speaker 1: was stronger now it's a churing one seventy six euro 18 00:01:03,840 --> 00:01:06,279 Speaker 1: one O nine fifty one, just a churring to the market. 19 00:01:06,480 --> 00:01:10,440 Speaker 1: Sterling was one forty two earlier, gives back a little one. 20 00:01:10,520 --> 00:01:14,639 Speaker 1: Well there it is zero on pound sterling and dollars 21 00:01:14,680 --> 00:01:17,479 Speaker 1: showing a little bit of strength, but a churn all 22 00:01:17,520 --> 00:01:20,920 Speaker 1: at all to the fore in exchange market futures down, 23 00:01:21,000 --> 00:01:24,200 Speaker 1: futures up, futures down, which means the only way to 24 00:01:24,240 --> 00:01:28,960 Speaker 1: save us towards excitement is David Wilson who joins us 25 00:01:28,959 --> 00:01:32,520 Speaker 1: here on the equity market. Fiser is doing something I 26 00:01:32,560 --> 00:01:35,160 Speaker 1: couldn't figure it out. They're buying back five billion dollars 27 00:01:35,160 --> 00:01:37,760 Speaker 1: of stock. Didn't they already announce that, right, But this 28 00:01:37,800 --> 00:01:39,959 Speaker 1: is a matter of actually doing it. It's one thing 29 00:01:39,959 --> 00:01:42,279 Speaker 1: to announce it, it's another thing to make it happen. 30 00:01:42,600 --> 00:01:45,440 Speaker 1: And they're doing it through what's called an accelerated repurchase 31 00:01:45,480 --> 00:01:48,880 Speaker 1: agreement with Goldman Sacks the dollar amounts equivalent about a 32 00:01:48,920 --> 00:01:51,880 Speaker 1: two point two percent stake, and Fightser shares her up 33 00:01:51,880 --> 00:01:55,120 Speaker 1: one and a half percent. So even with the pre announcement, 34 00:01:55,120 --> 00:01:57,320 Speaker 1: when they finally announce it, I mean a legit blue 35 00:01:57,400 --> 00:02:01,400 Speaker 1: chip company, it moves the market. It certainly is. In 36 00:02:01,520 --> 00:02:04,880 Speaker 1: early trading today they have Valiant Pharmaceuticals, which is up 37 00:02:04,920 --> 00:02:08,720 Speaker 1: three and a half percent. The embattled drug maker added 38 00:02:08,760 --> 00:02:11,560 Speaker 1: the vice chairman of Bill Ackman's Pershing Square Capital to 39 00:02:11,600 --> 00:02:15,480 Speaker 1: its board, along two other independent directors. Yeah, and you 40 00:02:15,520 --> 00:02:18,240 Speaker 1: can say that because Pershing Squares Valley its third larger 41 00:02:18,320 --> 00:02:21,880 Speaker 1: shareholder with a six point three percent steak to put 42 00:02:21,960 --> 00:02:25,600 Speaker 1: the Mexican Grill down three percent, The restaurant chain temporarily 43 00:02:25,680 --> 00:02:29,320 Speaker 1: closed a store near Boston after four employees got sick. 44 00:02:29,520 --> 00:02:32,720 Speaker 1: The shutdown in bill Rica, Massachusetts, was the latest in 45 00:02:32,760 --> 00:02:36,239 Speaker 1: a series of food safety issues that began in November. 46 00:02:36,840 --> 00:02:39,680 Speaker 1: Darting Restaurants up two and a half percent. The owner 47 00:02:39,680 --> 00:02:42,400 Speaker 1: of A Garden and other chains reported preliminary earnings for 48 00:02:42,400 --> 00:02:45,160 Speaker 1: the fiscal third quarter that beat analysts average. Haestmate in 49 00:02:45,200 --> 00:02:48,560 Speaker 1: the Bloomberg survey. Some analyst calls him note Ross Stores 50 00:02:48,600 --> 00:02:50,959 Speaker 1: down one and a half percent. The off price retailer 51 00:02:50,960 --> 00:02:53,519 Speaker 1: was lower than neutral at Goldman, Sacks and take Off, 52 00:02:53,639 --> 00:02:56,040 Speaker 1: taking off a list of the firm's top picks. All 53 00:02:56,080 --> 00:02:58,880 Speaker 1: this happening after Ross Stores rose twenty eight percent from 54 00:02:58,919 --> 00:03:01,880 Speaker 1: a low set in November. Three of our Hattrick Frontier 55 00:03:01,880 --> 00:03:04,400 Speaker 1: Communications down four and a half percent. The phone company 56 00:03:04,400 --> 00:03:06,640 Speaker 1: lowered to sell from Newtrold City Group and a couple 57 00:03:06,639 --> 00:03:10,040 Speaker 1: of internet companies down after being cut to sell from Newtroo. UBS. 58 00:03:10,160 --> 00:03:12,760 Speaker 1: Group On is one of them, down five percent. The 59 00:03:12,800 --> 00:03:15,760 Speaker 1: other is the consumer review website Yelp, which is down 60 00:03:15,840 --> 00:03:20,560 Speaker 1: five and a half percent. Do you use Yelp? I do? Actually? 61 00:03:20,600 --> 00:03:23,919 Speaker 1: Do you? Yeah, Mike, do you use Yelp? I do? 62 00:03:24,080 --> 00:03:27,120 Speaker 1: I don't get it? Well, I try. Well, it's it's 63 00:03:27,200 --> 00:03:29,680 Speaker 1: pretty simple. You just say I want to find a 64 00:03:29,760 --> 00:03:32,680 Speaker 1: place that sells a microphone, and you're just putting microphones 65 00:03:32,720 --> 00:03:35,120 Speaker 1: and will tell you for the stories that use it 66 00:03:35,160 --> 00:03:37,560 Speaker 1: for restaurants. Now, if I'm in a place and I 67 00:03:37,560 --> 00:03:40,080 Speaker 1: don't know what's going on, we look up what's around 68 00:03:40,200 --> 00:03:42,120 Speaker 1: and figure out where do I want to eat? Review 69 00:03:42,200 --> 00:03:45,840 Speaker 1: Yelp again, what do they do? Consumer review website? And 70 00:03:45,840 --> 00:03:48,160 Speaker 1: you can put it that way and say damn finding 71 00:03:48,160 --> 00:03:51,440 Speaker 1: a half percent And David Wilson thank you so much. 72 00:03:51,560 --> 00:03:54,200 Speaker 1: He's a former chairman of Security to Change Commission. We'll 73 00:03:54,240 --> 00:03:55,760 Speaker 1: get to that in a moment. Do Yelp and you 74 00:03:55,880 --> 00:03:58,080 Speaker 1: just type in Arthur Levin and you see that he's 75 00:03:58,080 --> 00:03:59,720 Speaker 1: sitting right next to you. Yeah, you can't. But this 76 00:03:59,800 --> 00:04:01,920 Speaker 1: time a year he's getting ready to go bass fishing 77 00:04:02,000 --> 00:04:05,240 Speaker 1: out of New York Harbor. It's seventy five degrees today, 78 00:04:05,320 --> 00:04:09,480 Speaker 1: it's seventy five degrees tomorrow. The water temperature is forty 79 00:04:09,480 --> 00:04:12,880 Speaker 1: two point six degrees in New York Harbor. You can't 80 00:04:12,880 --> 00:04:15,400 Speaker 1: just because it's warm out, you don't go bass fishing. 81 00:04:15,440 --> 00:04:19,920 Speaker 1: They haven't. They're not biting yet, right, that's right. We're 82 00:04:19,960 --> 00:04:23,039 Speaker 1: not many weeks away though, But for this kind of weather, 83 00:04:23,080 --> 00:04:26,359 Speaker 1: the baths coming around the Verretts. Did you buy a 84 00:04:26,360 --> 00:04:30,560 Speaker 1: new boat this year? You buy something five ft longer? No? No, no, no, 85 00:04:30,680 --> 00:04:37,520 Speaker 1: same Boatsure what we love? Well, we love? That's great. 86 00:04:37,520 --> 00:04:41,680 Speaker 1: Well full disclosure, aren't that? Levitt brought along a fabulous 87 00:04:41,880 --> 00:04:45,880 Speaker 1: note today, UM of a letter from the second Chairman 88 00:04:45,920 --> 00:04:51,080 Speaker 1: of the SEC just before your tenure from Mr Landis 89 00:04:51,120 --> 00:04:56,040 Speaker 1: described this original letter that he wrote two years after 90 00:04:56,080 --> 00:05:00,719 Speaker 1: the event. He was writing to UH ahead of one 91 00:05:00,720 --> 00:05:05,400 Speaker 1: of the brokerage associations in response to a letter that 92 00:05:05,440 --> 00:05:09,520 Speaker 1: he got from them, telling them all the things the 93 00:05:09,720 --> 00:05:13,160 Speaker 1: SEC was going to do, all the issues they were 94 00:05:13,160 --> 00:05:18,920 Speaker 1: going to pursue, disclosure issues, market issues, setting up an 95 00:05:19,040 --> 00:05:24,240 Speaker 1: organization to represent the markets. And it was fascinating because 96 00:05:25,080 --> 00:05:30,120 Speaker 1: almost every one of those issues are still with us today. 97 00:05:30,240 --> 00:05:35,560 Speaker 1: UH they talked about qualified brokers, the segregation of securities, 98 00:05:36,040 --> 00:05:41,840 Speaker 1: registration prospectuses. Quote, beating the gun is beating the gun. 99 00:05:42,040 --> 00:05:47,080 Speaker 1: Beating the gun means trading front running. It means front running. 100 00:05:47,520 --> 00:05:50,839 Speaker 1: That's great. I haven't heard beating. Did you ever see 101 00:05:50,839 --> 00:05:53,039 Speaker 1: the music gun on the floor of the American mun 102 00:05:53,680 --> 00:05:56,880 Speaker 1: I've never heard of it before, But isn't that wonderful. 103 00:05:56,960 --> 00:06:00,600 Speaker 1: I think we should start talking once more about beating 104 00:06:00,640 --> 00:06:03,440 Speaker 1: the gun. The idea here, and it does fold into 105 00:06:03,440 --> 00:06:06,960 Speaker 1: our politics, is beating the system and the reason these 106 00:06:07,080 --> 00:06:11,640 Speaker 1: organized markets exist and so people know they get a 107 00:06:11,680 --> 00:06:15,000 Speaker 1: fair trade. Does the little guy get a fair trade? 108 00:06:15,240 --> 00:06:17,080 Speaker 1: I have had so many people the last couple of weeks. 109 00:06:17,160 --> 00:06:20,679 Speaker 1: Arthur asked me about the hedge funds and the people 110 00:06:20,880 --> 00:06:24,839 Speaker 1: moving the market's oil or whatever. Iron Ore, it's tough. 111 00:06:24,960 --> 00:06:31,160 Speaker 1: The little guy really should be using low expense ratio 112 00:06:31,440 --> 00:06:35,320 Speaker 1: mutual funds. The little guy doesn't have access to the 113 00:06:35,400 --> 00:06:39,080 Speaker 1: kind of information that the institutions do, and the little 114 00:06:39,080 --> 00:06:43,560 Speaker 1: guy knows that. Nevertheless, the little guy trades and a 115 00:06:43,720 --> 00:06:49,520 Speaker 1: fractionally costs. That is great grandfather traded at and I 116 00:06:49,560 --> 00:06:53,880 Speaker 1: think the little guy is more fairly represented than ever before. 117 00:06:54,720 --> 00:06:59,760 Speaker 1: But the message of the past of the Landis observation 118 00:07:00,240 --> 00:07:06,200 Speaker 1: is that these are never ending problems. The issue of transparency, 119 00:07:06,279 --> 00:07:10,320 Speaker 1: the issue of disclosure is just as relevant today as 120 00:07:10,360 --> 00:07:14,040 Speaker 1: it was when Landis wrote that letter. It's a wonderful 121 00:07:14,080 --> 00:07:19,800 Speaker 1: piece of memorabilia. Mr Lantis may not be surprised by 122 00:07:20,200 --> 00:07:23,280 Speaker 1: the length of time it's taking the agency to complete 123 00:07:23,320 --> 00:07:26,800 Speaker 1: market stability rules. SEC Chair Mary Joe White now says 124 00:07:27,520 --> 00:07:32,160 Speaker 1: won't get done by the time she steps down next January. 125 00:07:32,200 --> 00:07:35,440 Speaker 1: Should we be surprised or is this just what you expect? 126 00:07:35,520 --> 00:07:39,120 Speaker 1: And Uh, I'm not at all surprised. I think that 127 00:07:39,720 --> 00:07:44,480 Speaker 1: she's been unfairly criticized for not having accomplished more of 128 00:07:45,040 --> 00:07:49,840 Speaker 1: her mandated agenda. But what Congress did was dump everything 129 00:07:49,880 --> 00:07:54,640 Speaker 1: on the Commission and didn't fund the Commission to do everything. 130 00:07:54,840 --> 00:07:58,280 Speaker 1: I think that Mary Joe has done a heroic job. 131 00:07:59,000 --> 00:08:05,840 Speaker 1: Has ablished an environment of dignity, responsibility, and care for 132 00:08:05,920 --> 00:08:09,960 Speaker 1: the investor that I think is awfully important. And she's 133 00:08:10,520 --> 00:08:16,640 Speaker 1: fought back an alien Congress, particularly the Financial services so 134 00:08:16,760 --> 00:08:20,840 Speaker 1: called Oversight Committee. Uh. And I think he's been a 135 00:08:20,840 --> 00:08:24,120 Speaker 1: wonderful chair. The shock and awe which I had uh 136 00:08:24,160 --> 00:08:27,160 Speaker 1: And I consider myself an amateur in this Mr Sanders 137 00:08:27,200 --> 00:08:31,120 Speaker 1: doing better than good in Michigan? Is this about with 138 00:08:31,120 --> 00:08:34,839 Speaker 1: with your decades of service to the Democratic Party and 139 00:08:34,880 --> 00:08:37,319 Speaker 1: in your father's heritage, I might point out as well, 140 00:08:38,040 --> 00:08:40,720 Speaker 1: is this about Mr Sanders better than good? Or is 141 00:08:40,920 --> 00:08:45,040 Speaker 1: Mrs Clinton losing the pixie dust of mainstream Democrats? In 142 00:08:45,080 --> 00:08:48,839 Speaker 1: an interesting way, that Sanders phenomena is a parallel of 143 00:08:48,920 --> 00:08:55,079 Speaker 1: the Trump phenomena. The American voter doesn't want business as usual. 144 00:08:55,679 --> 00:08:58,600 Speaker 1: If that means Trump, so be it. If it means 145 00:08:58,640 --> 00:09:02,320 Speaker 1: Sanders will go with it. We don't want the same old, 146 00:09:02,480 --> 00:09:07,760 Speaker 1: same old same. Can Mrs Clinton adapt to that in 147 00:09:07,880 --> 00:09:10,920 Speaker 1: a sense, in a sense, but it's something she will 148 00:09:10,960 --> 00:09:14,640 Speaker 1: have to live with in a campaign against an anti 149 00:09:14,760 --> 00:09:19,440 Speaker 1: the ultimate anti establishment figure won't be easy. It isn't 150 00:09:19,480 --> 00:09:22,840 Speaker 1: a lock. Arthur Levitt, Thank you so much, Arthur Levit, 151 00:09:22,840 --> 00:09:26,200 Speaker 1: as a former chairman Security to change Commission. And we 152 00:09:26,240 --> 00:09:28,840 Speaker 1: look forward and I don't want to the best start 153 00:09:29,400 --> 00:09:32,960 Speaker 1: the basketball start probably the first week in April. There 154 00:09:33,000 --> 00:09:36,800 Speaker 1: we are, first week of April. Look forward to Theish report. 155 00:09:37,080 --> 00:09:41,240 Speaker 1: I get on there with you and broadcast live do 156 00:09:41,280 --> 00:09:43,240 Speaker 1: an hour Arthur Levitt, and get about get us, We 157 00:09:43,280 --> 00:09:46,920 Speaker 1: get them together and you don't get it done. The 158 00:09:46,960 --> 00:09:52,720 Speaker 1: fish Report, Fish Report brought to you by Yeah, um, 159 00:09:52,760 --> 00:09:55,840 Speaker 1: and you can do it. You can do the Tish Report. Yeah. 160 00:09:55,880 --> 00:09:59,400 Speaker 1: I'm very Do you realize I get sea sick? Just 161 00:09:59,480 --> 00:10:02,640 Speaker 1: if the mad Kenny swirls a little bit? I get 162 00:10:02,960 --> 00:10:05,360 Speaker 1: I'm wanting Michael bar do you get instantly s sick? 163 00:10:06,200 --> 00:10:07,960 Speaker 1: You know what? I hate to admit it. Yes, I 164 00:10:08,000 --> 00:10:15,320 Speaker 1: get instantly like bom switch goes off. Yeah, I'm absolutely useless, 165 00:10:15,520 --> 00:10:20,280 Speaker 1: Michael Barn. I will be fishing at the whatever that 166 00:10:20,360 --> 00:10:26,880 Speaker 1: waterside bar is on the East River. We will be there. 167 00:10:26,960 --> 00:10:30,160 Speaker 1: Features up nine gall features up seventy eight tenure yield 168 00:10:30,200 --> 00:10:34,040 Speaker 1: one point eight eight percent. A churn at to the market. 169 00:10:34,080 --> 00:10:37,360 Speaker 1: But it's Michael Vicky mentioned. The headline is oil as 170 00:10:37,400 --> 00:10:41,760 Speaker 1: a bid Today nine West Texas Centermedia up a good 171 00:10:41,840 --> 00:10:46,080 Speaker 1: eighties cents, Brent forty dollars fifty cents of Barrel up 172 00:10:46,200 --> 00:10:53,240 Speaker 1: eighty three cents. This morning tied down to check in 173 00:10:53,320 --> 00:10:55,760 Speaker 1: with Michael Barr for the latest news headlines. By time, 174 00:10:55,800 --> 00:10:58,280 Speaker 1: Thank you very much. Hillary Clinton and Bernie Sanders will 175 00:10:58,280 --> 00:11:01,480 Speaker 1: hold their eighth debate tonight in Florida. Last night, Clinton 176 00:11:01,559 --> 00:11:05,680 Speaker 1: won the Mississippi Democratic primary, but Sanders scored a narrow 177 00:11:05,800 --> 00:11:09,120 Speaker 1: upset win in Michigan. Clinton has more than half of 178 00:11:09,160 --> 00:11:12,319 Speaker 1: the delegates she needs to win the Democratic presidential nomination. 179 00:11:12,800 --> 00:11:16,720 Speaker 1: Republican front runner Donald Trump insists there's tremendous positive energy 180 00:11:16,720 --> 00:11:19,840 Speaker 1: in the party. Trump told NBC's Today some people have 181 00:11:19,960 --> 00:11:24,040 Speaker 1: never voted before, and they're voting for Trump. He stretched 182 00:11:24,040 --> 00:11:27,520 Speaker 1: his lead over his Republican rivals after wins in Michigan, Mississippi, 183 00:11:27,600 --> 00:11:31,640 Speaker 1: and Hawaii. Ted Cruz won the Idaho primary. Two people 184 00:11:31,679 --> 00:11:34,880 Speaker 1: have drowned in Oklahoma and Texas as a large storm 185 00:11:34,920 --> 00:11:38,440 Speaker 1: system moves over sections of the South today. Flashblood warning 186 00:11:38,480 --> 00:11:41,440 Speaker 1: is an effect for parts of eastern Texas, southern Arkansas, 187 00:11:41,520 --> 00:11:44,800 Speaker 1: and northern Louisiana. Global News twenty four hours a day, 188 00:11:44,800 --> 00:11:48,120 Speaker 1: powered by our two hundred journalists more than a hundred 189 00:11:48,160 --> 00:11:50,680 Speaker 1: fifty news bureaus from around the world. I'm Michael Barr. 190 00:11:51,000 --> 00:11:54,480 Speaker 1: To Michael, thanks so much again. Tomorrow, our exclusive corverge, 191 00:11:54,520 --> 00:11:58,440 Speaker 1: the ECB with the headlines from the Bloomberg Professional Service, 192 00:11:58,440 --> 00:12:00,520 Speaker 1: will have that for you with the Import and Press 193 00:12:00,559 --> 00:12:07,040 Speaker 1: Conference at eight thirty. It's Bloomberg's Surveillance market Drivers brought 194 00:12:07,040 --> 00:12:08,840 Speaker 1: to you by your Mercedes Benz Tri State dealer. No 195 00:12:08,880 --> 00:12:11,120 Speaker 1: matter what the weather, Mercedes Benz Formatic All wheel Drive 196 00:12:11,160 --> 00:12:13,640 Speaker 1: brings peace of mind and driving confidence. Visit your Mercedes 197 00:12:13,679 --> 00:12:23,000 Speaker 1: Benz Tri State dealer for a test drive. Today. Global 198 00:12:23,040 --> 00:12:26,440 Speaker 1: Business News twenty four hours a day at Bloomberg dot com, 199 00:12:26,679 --> 00:12:29,520 Speaker 1: the Radio plus Mobile Act and on your radio. This 200 00:12:29,880 --> 00:12:33,240 Speaker 1: is a Bloomberg Business Flash and I'm Karen Moscow. This 201 00:12:33,360 --> 00:12:36,360 Speaker 1: updates brought to you by Interactive Brokers and CME Group. 202 00:12:36,400 --> 00:12:38,719 Speaker 1: If you're looking for a global futures contracts at low 203 00:12:38,760 --> 00:12:42,520 Speaker 1: trading costs, look no further. Interactive Brokers as the industry leader. 204 00:12:42,600 --> 00:12:45,360 Speaker 1: Learn more at Interactive Brokers dot com slash c m 205 00:12:45,440 --> 00:12:49,040 Speaker 1: E Group US At index futures, they're higher signally more 206 00:12:49,080 --> 00:12:51,240 Speaker 1: gains for equities heading into the eighth year of a 207 00:12:51,280 --> 00:12:54,440 Speaker 1: bull run as investors away queues from central banks. We 208 00:12:54,520 --> 00:12:57,200 Speaker 1: checked the markets every fifteen minutes throughout the trading day 209 00:12:57,200 --> 00:13:00,400 Speaker 1: on Bloomberg snp Emity Future is up. A body points 210 00:13:00,440 --> 00:13:03,000 Speaker 1: to Dow E Many futures up sixty nine, nasdack E 211 00:13:03,040 --> 00:13:05,679 Speaker 1: Many futures up fifteen. The docks in Germany's up one 212 00:13:05,679 --> 00:13:08,960 Speaker 1: point two percent. Ten Your treasury down thirteen thirty seconds, 213 00:13:08,960 --> 00:13:11,280 Speaker 1: the yield one point eight seven percent to yield on 214 00:13:11,320 --> 00:13:14,040 Speaker 1: the two year point eight nine percent. Nim X screwed 215 00:13:14,080 --> 00:13:16,520 Speaker 1: oil up two per cent or seventy three cents to 216 00:13:16,600 --> 00:13:19,440 Speaker 1: thirty seven twenty three of arrol Comex gold is down 217 00:13:19,480 --> 00:13:22,920 Speaker 1: one or fifteen dollars fifty cents at twelve forty seven 218 00:13:22,960 --> 00:13:25,960 Speaker 1: thirty announced the euro at dollar oh nine five zero, 219 00:13:26,080 --> 00:13:27,880 Speaker 1: the n one twelve point eight one, and that's a 220 00:13:27,920 --> 00:13:32,679 Speaker 1: Bloomberg business flash. Tom and Mike Carabasco, thank you very much. Well, 221 00:13:32,760 --> 00:13:38,920 Speaker 1: as Tom mentioned, ECB means tomorrow Mario jogging a range 222 00:13:38,960 --> 00:13:41,600 Speaker 1: of options. You heard Lena kamal Eva saying a few 223 00:13:41,600 --> 00:13:45,319 Speaker 1: moments ago that she thinks helicopter money maybe the answer, 224 00:13:45,679 --> 00:13:48,640 Speaker 1: Ben Emmons from Leader Kappel is going to have to 225 00:13:48,679 --> 00:13:51,920 Speaker 1: trade whatever Mr Joggy does. So let's bring him in 226 00:13:51,960 --> 00:13:55,720 Speaker 1: and get the market's view of what's likely to happen 227 00:13:55,720 --> 00:14:00,000 Speaker 1: and what the impact is going to be. Uh, Ben, 228 00:14:00,000 --> 00:14:04,600 Speaker 1: what do you think Mario dragging does and would it 229 00:14:04,640 --> 00:14:06,440 Speaker 1: be the same thing as something that will have an 230 00:14:06,440 --> 00:14:10,560 Speaker 1: impact on the markets and uh and help out the Eurozone? Right? 231 00:14:10,600 --> 00:14:12,559 Speaker 1: Good morning, my Mike and Tom. Thanks, thanks you for 232 00:14:12,640 --> 00:14:15,199 Speaker 1: having me um. Well, I think if you look back 233 00:14:15,200 --> 00:14:17,320 Speaker 1: at the history of what the sub has done so 234 00:14:17,400 --> 00:14:20,880 Speaker 1: far and what there's there's two things that distinguished there. Right, 235 00:14:20,960 --> 00:14:23,880 Speaker 1: One should be very good at signaling what what is 236 00:14:23,920 --> 00:14:26,560 Speaker 1: going to do next? And markets are anticipating and I 237 00:14:26,600 --> 00:14:29,200 Speaker 1: did a little little quick study on that and so like, yeah, 238 00:14:29,560 --> 00:14:32,960 Speaker 1: the market rallies ahead of this potential announcement, but then 239 00:14:32,960 --> 00:14:37,000 Speaker 1: the announcement itself is welcome relatively muted, and you can 240 00:14:37,000 --> 00:14:39,880 Speaker 1: see this in interest rates and and and stock prices 241 00:14:39,920 --> 00:14:42,120 Speaker 1: and currence, etcetera. If you look at the history changes 242 00:14:42,160 --> 00:14:44,440 Speaker 1: that the NOE do send you shows that shows that 243 00:14:44,520 --> 00:14:47,800 Speaker 1: table um. So I think tomorrow you have again this 244 00:14:47,920 --> 00:14:52,280 Speaker 1: sort of response where largely market expectations are set at 245 00:14:52,320 --> 00:14:55,160 Speaker 1: that Q will expand and that they will introduce negative 246 00:14:55,200 --> 00:14:57,360 Speaker 1: depositive rates, and then they will look at the details 247 00:14:57,440 --> 00:14:59,920 Speaker 1: of maybe there's there's tweaks here and there that may 248 00:15:00,080 --> 00:15:03,320 Speaker 1: lead to to surprise. But I think the background here 249 00:15:03,440 --> 00:15:06,320 Speaker 1: is Mike is that Drag has to always get some 250 00:15:06,480 --> 00:15:09,920 Speaker 1: form of compromise among his ECB members for this next 251 00:15:10,120 --> 00:15:13,640 Speaker 1: policy action, and that means that he is very good 252 00:15:13,680 --> 00:15:17,680 Speaker 1: at signaling, you know, a potential new action coming, and 253 00:15:17,720 --> 00:15:20,320 Speaker 1: then as the market response to that, he can then 254 00:15:20,480 --> 00:15:23,440 Speaker 1: create this sort of environment saying, look at works, So 255 00:15:23,520 --> 00:15:26,280 Speaker 1: therefore let's create this have a compromise about what we're 256 00:15:26,320 --> 00:15:28,720 Speaker 1: gonna do, because there's going to be resistance by some 257 00:15:28,800 --> 00:15:31,560 Speaker 1: e c D members of having much more QUI and 258 00:15:31,640 --> 00:15:34,680 Speaker 1: otis who would argue for for for less key, etcetera. 259 00:15:34,920 --> 00:15:38,040 Speaker 1: So there's that element as well. So I think you're 260 00:15:38,080 --> 00:15:40,960 Speaker 1: having a tomorrow and effect where interest rates are probably 261 00:15:41,000 --> 00:15:43,800 Speaker 1: going to be relatively new to I think what I 262 00:15:43,840 --> 00:15:46,120 Speaker 1: want to watch tomorrow really is how credit marks are 263 00:15:46,120 --> 00:15:49,800 Speaker 1: going to respond exactly the Actually you've got a nice 264 00:15:49,840 --> 00:15:51,760 Speaker 1: work out of that. But what is so important to me, 265 00:15:51,880 --> 00:15:54,440 Speaker 1: Ben Emmons, is if I look at the German two 266 00:15:54,520 --> 00:15:59,720 Speaker 1: year is essentially a global proxy of negative rates. It's 267 00:15:59,760 --> 00:16:03,920 Speaker 1: a actor and it's basically in one direction. Do you 268 00:16:04,120 --> 00:16:09,840 Speaker 1: just presume, with whatever the strategy is, whatever the orthodox 269 00:16:10,000 --> 00:16:14,400 Speaker 1: unorthodox soup that they do, that the German two year 270 00:16:14,480 --> 00:16:18,320 Speaker 1: will drive to a new negative yield below negative zero 271 00:16:18,360 --> 00:16:21,800 Speaker 1: points six zero percent. Yeah, I would agree with you, Tom, 272 00:16:21,840 --> 00:16:24,520 Speaker 1: That's that's right, because one that's driven by that depositive 273 00:16:24,600 --> 00:16:28,080 Speaker 1: rate and then future expectations of more cuts in the 274 00:16:28,200 --> 00:16:31,880 Speaker 1: depositive rate. That's that's in that do your yield and 275 00:16:31,880 --> 00:16:34,880 Speaker 1: and indeed you could have more extreme level of this 276 00:16:35,080 --> 00:16:37,360 Speaker 1: two year yield because if you look at the history 277 00:16:37,480 --> 00:16:39,680 Speaker 1: so far of what what actually has had a major 278 00:16:39,760 --> 00:16:43,600 Speaker 1: impact from from the CBS programs has been on that 279 00:16:43,640 --> 00:16:45,880 Speaker 1: two year yield in Germany at that one has gone 280 00:16:45,880 --> 00:16:51,359 Speaker 1: down really dramatically, whereas the Euros being that's the proxy 281 00:16:51,560 --> 00:16:54,920 Speaker 1: the German two year yield to review, folks, it's it's 282 00:16:54,920 --> 00:16:57,160 Speaker 1: been negative. Let me go back and give you roughly 283 00:16:57,200 --> 00:17:00,240 Speaker 1: the date or it flip negative, it flip negative. They've 284 00:17:00,640 --> 00:17:04,640 Speaker 1: about almost positive. Call it November of two thousand fourteen. 285 00:17:04,680 --> 00:17:08,520 Speaker 1: Within a quick look, what does Mr drog want the 286 00:17:08,600 --> 00:17:11,359 Speaker 1: German two year to do? Or does he not care? 287 00:17:11,560 --> 00:17:13,560 Speaker 1: Because that's what I'm hearing in a lot of interviews. 288 00:17:14,640 --> 00:17:18,080 Speaker 1: I think he cares more about the broader impact of 289 00:17:18,200 --> 00:17:21,920 Speaker 1: that program. If I read back his speech from from 290 00:17:21,960 --> 00:17:26,040 Speaker 1: April two thousand fourteen that he had in Amsterdam where 291 00:17:26,080 --> 00:17:29,120 Speaker 1: he laid out the framework, he basically laid on three points, 292 00:17:29,119 --> 00:17:31,920 Speaker 1: say we're going to use foward guidance that we're going 293 00:17:31,960 --> 00:17:34,920 Speaker 1: to use credit easing with l t R O S 294 00:17:35,000 --> 00:17:37,200 Speaker 1: and then we're going to use a broad base as 295 00:17:37,240 --> 00:17:39,640 Speaker 1: a bridgase program to get our inflation was stable there 296 00:17:39,640 --> 00:17:41,920 Speaker 1: two percent. That's kind of his framework thinking. Now he's 297 00:17:41,960 --> 00:17:45,800 Speaker 1: addressed altale components, so I think he's not so so 298 00:17:46,040 --> 00:17:48,560 Speaker 1: concerned about this really extreme negative yield in the two 299 00:17:48,640 --> 00:17:52,600 Speaker 1: year German government rod are that this this impact of 300 00:17:52,680 --> 00:17:55,360 Speaker 1: his program along those three lines that he laid out 301 00:17:55,359 --> 00:17:59,480 Speaker 1: in that speech. I think though, that he is concerned 302 00:17:59,480 --> 00:18:02,800 Speaker 1: probably and at each to be members sue about the 303 00:18:02,840 --> 00:18:06,200 Speaker 1: constraints that the banking system is again facing, especially when 304 00:18:06,200 --> 00:18:09,400 Speaker 1: we went through in January. So I would think that 305 00:18:09,440 --> 00:18:11,640 Speaker 1: they would, you know, can always add more liquid into 306 00:18:11,680 --> 00:18:14,080 Speaker 1: the system, but moreover, if they want to look more 307 00:18:14,160 --> 00:18:18,000 Speaker 1: specifically at the aspect of what happened in January and 308 00:18:18,920 --> 00:18:21,280 Speaker 1: we want to address that, because they could devel the 309 00:18:21,320 --> 00:18:24,879 Speaker 1: other aspects of our program. Right, So, yeah, he he 310 00:18:24,960 --> 00:18:27,800 Speaker 1: will care about that negative rate, but he really cares 311 00:18:27,840 --> 00:18:30,359 Speaker 1: about in the broader contactly if that negative leads to 312 00:18:30,359 --> 00:18:33,920 Speaker 1: two presentation and broad based lending, and it's fine by him, 313 00:18:34,040 --> 00:18:39,120 Speaker 1: and that's ultimately still their objectives that's happening right now, true, 314 00:18:39,240 --> 00:18:42,000 Speaker 1: and I think that's that's indeed what they would trying. 315 00:18:42,359 --> 00:18:44,280 Speaker 1: What I think they will try and address is that 316 00:18:44,560 --> 00:18:46,920 Speaker 1: that they have seen that well, we had some success 317 00:18:47,119 --> 00:18:50,120 Speaker 1: with the weaker currency and lower rate, but we haven't 318 00:18:50,119 --> 00:18:54,440 Speaker 1: had much success with credit extensions for that matter. The 319 00:18:54,560 --> 00:18:56,840 Speaker 1: for example, when they introduced what they called target at 320 00:18:56,920 --> 00:18:59,040 Speaker 1: lth r ros which is a is a healthy ERRO 321 00:18:59,160 --> 00:19:02,960 Speaker 1: program that were banks the finance collateral that's that's that's 322 00:19:03,040 --> 00:19:06,320 Speaker 1: lent to non financial corporations that they may look to 323 00:19:06,359 --> 00:19:09,119 Speaker 1: expand them because their facility is only eighteen billion outstanding 324 00:19:09,200 --> 00:19:11,640 Speaker 1: is very small. They never had any kind of success. 325 00:19:12,119 --> 00:19:14,359 Speaker 1: They may look at alternatives to this too, that the 326 00:19:14,560 --> 00:19:18,080 Speaker 1: credit spreads and still relatively widening Europe, including banks spreads 327 00:19:18,600 --> 00:19:21,879 Speaker 1: that they may make tweets there. They can purchase corporate bounds, 328 00:19:21,920 --> 00:19:24,920 Speaker 1: they can buy financial death. They could do that or 329 00:19:24,960 --> 00:19:27,120 Speaker 1: signal their offer and I think again drug is really 330 00:19:27,160 --> 00:19:30,560 Speaker 1: good about that, but signaling something like that coming coming 331 00:19:30,560 --> 00:19:33,160 Speaker 1: down the pike to generate the effect and then get 332 00:19:33,160 --> 00:19:36,119 Speaker 1: the compromise to actually implement a program like like that. 333 00:19:36,160 --> 00:19:38,080 Speaker 1: So I think all those things are in the works. 334 00:19:38,440 --> 00:19:41,560 Speaker 1: I'm actually for tomorrow in THEE really focused on how 335 00:19:41,560 --> 00:19:45,000 Speaker 1: credit markets will respond to to to drug as he 336 00:19:45,040 --> 00:19:48,120 Speaker 1: announces this new program because the QE program, I think 337 00:19:48,200 --> 00:19:51,720 Speaker 1: is largely priced. Okay, Panammon's thank you so much, Leader Capital, 338 00:19:51,960 --> 00:19:55,440 Speaker 1: because we brief you towards tomorrow and the drug Press 339 00:19:55,480 --> 00:19:58,080 Speaker 1: caravans will have that all the details in the eight 340 00:19:58,119 --> 00:20:02,200 Speaker 1: o'clock hour tomorrow. Future Up seven from New York, Bloomberg 341 00:20:02,240 --> 00:20:07,440 Speaker 1: Surveillance cutting it down to the oven Bell, brought to 342 00:20:07,440 --> 00:20:09,520 Speaker 1: you by the Jeep Grand Cherokee, the most awarded suv 343 00:20:09,600 --> 00:20:11,520 Speaker 1: every the Grand Checker. He continues to raise the bar 344 00:20:11,560 --> 00:20:14,639 Speaker 1: with its luxurious interior and legendary four by four capability. 345 00:20:14,720 --> 00:20:24,600 Speaker 1: Drive on at your local Jeep dealer today, broadcasting live 346 00:20:24,720 --> 00:20:28,080 Speaker 1: to New York, Cloomberg eleventh Yo to Washington, d C, 347 00:20:28,320 --> 00:20:33,520 Speaker 1: Bloomberg to Boston, Bloomberg twill Liners to San Francisco, Bloomberg 348 00:20:33,640 --> 00:20:37,240 Speaker 1: nine to the Country series at SAM Channel one nineteen 349 00:20:37,400 --> 00:20:40,840 Speaker 1: and around the globe the Bloomberg Radio Plus Appen Bloomberg 350 00:20:40,920 --> 00:20:45,320 Speaker 1: dot Com. This is Bloomberg Surveillance. Good morning, I'm Karen 351 00:20:45,400 --> 00:20:48,520 Speaker 1: Moscow along with Tom Keene and Michael meet McKee. And 352 00:20:48,520 --> 00:20:50,399 Speaker 1: that is the sound of the opening ballads, brought to 353 00:20:50,440 --> 00:20:55,520 Speaker 1: you by SEI Imaginement. Asset Management Servicing is unconstrained by infrastructure. 354 00:20:55,680 --> 00:20:58,440 Speaker 1: See how sc has global operating platform can be York 355 00:20:58,480 --> 00:21:01,040 Speaker 1: catalyst for a business. Expanse in at se i C 356 00:21:01,240 --> 00:21:04,520 Speaker 1: dot com, slash imagine stocks higher at the open. The 357 00:21:04,680 --> 00:21:06,760 Speaker 1: S and P five hundred up three ten percent or 358 00:21:06,760 --> 00:21:10,159 Speaker 1: six points to nine five Dow Jones Industrial average up 359 00:21:10,160 --> 00:21:13,240 Speaker 1: three tens percent or forty eight points to seventeen thousand eighteen. 360 00:21:13,520 --> 00:21:15,879 Speaker 1: The nastac of four ten percent or eighteen points to 361 00:21:15,960 --> 00:21:19,679 Speaker 1: forty six sixty seven ten year Treasury down thirteen thirty seconds, 362 00:21:19,680 --> 00:21:21,879 Speaker 1: the yield one point eight seven percent yield on the 363 00:21:21,920 --> 00:21:25,199 Speaker 1: two year point eight nine percent NIMEX. Scrude oil is 364 00:21:25,320 --> 00:21:27,880 Speaker 1: up two percent or seventy three cents to thirty seven 365 00:21:27,920 --> 00:21:30,880 Speaker 1: twenty two of arrel comex goal down one point three 366 00:21:30,880 --> 00:21:33,680 Speaker 1: percent or sixteen dollars ten cents to twelve forty six 367 00:21:33,680 --> 00:21:36,280 Speaker 1: seventy and ounce. The euro a dollar oh nine four 368 00:21:36,320 --> 00:21:39,840 Speaker 1: eight a N one twelve point eight three. Tom and Mike, Karen, 369 00:21:40,160 --> 00:21:44,359 Speaker 1: thanks so much, and Karen, like myself, we usually don't 370 00:21:44,520 --> 00:21:50,640 Speaker 1: quote net gas, which is important because it is cratered 371 00:21:50,640 --> 00:21:54,520 Speaker 1: with a four day rebound here recently, but I rarely 372 00:21:54,600 --> 00:21:59,000 Speaker 1: use the word cratered and yet it works for net gas. 373 00:21:59,040 --> 00:22:02,520 Speaker 1: I've begged our cracked team, Mike, what's our staff up to? 374 00:22:02,720 --> 00:22:09,000 Speaker 1: Like eighty people? It depends some of them. Some of 375 00:22:09,000 --> 00:22:12,400 Speaker 1: them are some of the voting, the voting. Yeah, they're 376 00:22:12,400 --> 00:22:15,080 Speaker 1: they're they're old enough to vote. Um. Anyways, our correct 377 00:22:15,119 --> 00:22:18,720 Speaker 1: team finally at tracked him down. Stephen Shark joins us 378 00:22:18,760 --> 00:22:21,320 Speaker 1: from the Shark Report right now. Stephen, wonderful to have 379 00:22:21,359 --> 00:22:26,080 Speaker 1: you on. Why is oil up in that gas? Self? Uh? 380 00:22:26,280 --> 00:22:30,600 Speaker 1: That gas is uh down because actually it's up. We're 381 00:22:30,680 --> 00:22:33,560 Speaker 1: essentially at a technical turning point. Guys. It is so 382 00:22:33,640 --> 00:22:35,960 Speaker 1: cheap at this point. I got down to about a 383 00:22:36,000 --> 00:22:40,679 Speaker 1: dollar sixty, which is what about ten dollars barrel oil equivalent. Uh. 384 00:22:40,760 --> 00:22:44,160 Speaker 1: The reason for the bearish uh bearishness and gas, aside 385 00:22:44,200 --> 00:22:46,720 Speaker 1: from the little pop that we're getting now, is the 386 00:22:46,760 --> 00:22:49,760 Speaker 1: fact that the U. S. Industrial economy has been, continues 387 00:22:49,800 --> 00:22:53,080 Speaker 1: to be will be for the foreseeable future in a 388 00:22:53,160 --> 00:22:56,040 Speaker 1: steep recession. Keep in mind, I'm saying the industrial sector 389 00:22:56,080 --> 00:22:59,159 Speaker 1: of the economy, hence why we've gotten the pullback. So 390 00:22:59,320 --> 00:23:02,160 Speaker 1: with natural us your only other driver outside of commercial 391 00:23:02,200 --> 00:23:05,280 Speaker 1: industrial demand, which is at a post grade recession low. 392 00:23:05,320 --> 00:23:07,800 Speaker 1: By the way, is the weather, and of course now 393 00:23:07,840 --> 00:23:10,520 Speaker 1: we're in the shoulder months, we don't have gas furnace demand, 394 00:23:10,560 --> 00:23:12,480 Speaker 1: we don't have our conditioning demand, so we don't have 395 00:23:12,560 --> 00:23:16,000 Speaker 1: power demand on the residential side, So hence why we've 396 00:23:16,000 --> 00:23:18,840 Speaker 1: had such a precipitous drop. But the funny thing about 397 00:23:18,920 --> 00:23:23,520 Speaker 1: natural gas is it's the ultimate or the consummate contrarian play. 398 00:23:23,560 --> 00:23:26,080 Speaker 1: So we were weak throughout the winter, even if this 399 00:23:26,200 --> 00:23:29,000 Speaker 1: was a cold winter. On average, we see weakness in 400 00:23:29,080 --> 00:23:31,280 Speaker 1: gas prices during the winter, and then you tend to 401 00:23:31,320 --> 00:23:35,320 Speaker 1: see a countercyclical rebound in natural gas once we get 402 00:23:35,320 --> 00:23:37,399 Speaker 1: into the show of the months. So perhaps that's what 403 00:23:37,480 --> 00:23:40,639 Speaker 1: we're's seeing right now at technical bounds, which could also 404 00:23:40,840 --> 00:23:43,360 Speaker 1: come into being a contrarian trade over the next month 405 00:23:43,480 --> 00:23:46,560 Speaker 1: two months. Now. With regard to oil, this is the 406 00:23:46,560 --> 00:23:49,960 Speaker 1: market that's not trading on fundamentals. We've had a significant 407 00:23:50,000 --> 00:23:52,639 Speaker 1: pop in oil prices over the last two weeks. But 408 00:23:52,880 --> 00:23:56,080 Speaker 1: I'm going to underscore this, this is nothing but a 409 00:23:56,160 --> 00:24:00,320 Speaker 1: major short squeeze rally. I'll give you for instance, as 410 00:24:00,359 --> 00:24:04,080 Speaker 1: of a week ago, according to the CFTC, both bullish 411 00:24:04,160 --> 00:24:09,359 Speaker 1: speculators and bearrass speculators liquidated some of their positions going 412 00:24:09,359 --> 00:24:12,840 Speaker 1: into two Fridays ago. The difference is when the bulls 413 00:24:12,920 --> 00:24:16,919 Speaker 1: liquidated their position, they sold one contract. When the Bears 414 00:24:17,000 --> 00:24:21,000 Speaker 1: liquidated into position, they bought back eighty two contracts. So 415 00:24:21,000 --> 00:24:24,240 Speaker 1: when you sell one contract and you buy eighty two contracts, 416 00:24:24,359 --> 00:24:26,960 Speaker 1: guess what happens to price? And hence we are now 417 00:24:27,119 --> 00:24:32,480 Speaker 1: into this significant short squeeze. How long does it last? Uh, 418 00:24:32,480 --> 00:24:35,920 Speaker 1: it's a great question, Mike, Uh, it could. Now what's 419 00:24:35,960 --> 00:24:39,960 Speaker 1: happened here is this rally is driven solely by a 420 00:24:40,000 --> 00:24:43,960 Speaker 1: liquidation by the bears. Now what we've seen now over 421 00:24:44,000 --> 00:24:47,880 Speaker 1: the past week is open interest beginning to rise. So 422 00:24:48,400 --> 00:24:50,920 Speaker 1: if the rally to this point was driven by a 423 00:24:51,000 --> 00:24:55,560 Speaker 1: bearress speculation, if open interest is indeed rising, that could 424 00:24:55,600 --> 00:24:59,000 Speaker 1: be a significant sign that money, bullish money is coming 425 00:24:59,119 --> 00:25:03,240 Speaker 1: into the market. It so this could prolong the rebound. 426 00:25:03,600 --> 00:25:06,399 Speaker 1: So how long No one's going to be able to 427 00:25:06,440 --> 00:25:09,720 Speaker 1: tell you that. But certainly we're going through the we're 428 00:25:09,720 --> 00:25:13,480 Speaker 1: going through the turnaround season, the maintenance season, so we're 429 00:25:13,520 --> 00:25:17,200 Speaker 1: buying a lot fewer battles physical buyers because the refineries 430 00:25:17,200 --> 00:25:19,439 Speaker 1: are shutting down units for maintenance to get ready for 431 00:25:19,440 --> 00:25:22,280 Speaker 1: the summer. So this is more or less a spec 432 00:25:22,480 --> 00:25:26,280 Speaker 1: driven rally. So this could happen until when, until the 433 00:25:26,359 --> 00:25:28,800 Speaker 1: end of the turnaround season when we bring the physical 434 00:25:28,800 --> 00:25:32,720 Speaker 1: buyers back into the market and some fundamentals are again 435 00:25:32,800 --> 00:25:37,640 Speaker 1: injected into this market. So roll of dice. This could 436 00:25:37,760 --> 00:25:40,440 Speaker 1: last a couple of more months, could last just another day. 437 00:25:40,480 --> 00:25:43,719 Speaker 1: It could be with yesterday's sella it could I've already 438 00:25:43,760 --> 00:25:46,600 Speaker 1: run its course. No one unfortunately tell you that, right. 439 00:25:46,600 --> 00:25:49,600 Speaker 1: And to be clear, you're not long oil because this 440 00:25:49,640 --> 00:25:53,719 Speaker 1: has been a raging debate. Uh. Danzazuki with Francisco Blanche 441 00:25:53,720 --> 00:25:58,480 Speaker 1: at Maryland suggest prices to fifty and they've got fundamental enthusiasm. 442 00:25:59,080 --> 00:26:04,640 Speaker 1: Jeff de Grab working technically, was ruthless today looking for 443 00:26:04,760 --> 00:26:08,720 Speaker 1: a retest of loads and even into the teens. Yeah. 444 00:26:08,760 --> 00:26:11,400 Speaker 1: I cannot make, guys, I cannot make the fundamental case. 445 00:26:11,400 --> 00:26:16,760 Speaker 1: I understand. Uh, there is the the inclination we're looking at. Um. Certainly, 446 00:26:16,800 --> 00:26:20,560 Speaker 1: prices are so cheap, But just because prices are cheap 447 00:26:20,600 --> 00:26:22,400 Speaker 1: doesn't mean that's not a reason to buy. They're they're 448 00:26:22,480 --> 00:26:24,800 Speaker 1: cheap for a really good reason. And that really good 449 00:26:24,800 --> 00:26:27,399 Speaker 1: reason is we are still producing a lot of oil, 450 00:26:27,520 --> 00:26:31,159 Speaker 1: not only here in North America. But what seems to 451 00:26:31,160 --> 00:26:34,080 Speaker 1: be have driven some of the spectative rally. Is this 452 00:26:34,640 --> 00:26:39,240 Speaker 1: idiotic notion that somehow OPEC is going to come to 453 00:26:39,320 --> 00:26:42,639 Speaker 1: some sort of agreement on the production freeze. I'll just 454 00:26:42,760 --> 00:26:46,560 Speaker 1: point it to yesterday's ballistic missile test by Iran. There 455 00:26:46,640 --> 00:26:49,040 Speaker 1: is no way the Suny side of OPEC and the 456 00:26:49,080 --> 00:26:51,080 Speaker 1: SA side of OPEC are gonna come to an agreement 457 00:26:51,119 --> 00:26:54,960 Speaker 1: on production anytime in the foreseeable future. So if you 458 00:26:55,080 --> 00:26:57,879 Speaker 1: are buying oil on the assumption OPEC is going to 459 00:26:57,960 --> 00:27:02,160 Speaker 1: freeze production, good luck with that, because that is not happening. 460 00:27:05,520 --> 00:27:09,399 Speaker 1: But so far, we put a floor under oil because 461 00:27:09,440 --> 00:27:12,960 Speaker 1: people are thinking it it might what what changes? What 462 00:27:12,960 --> 00:27:15,720 Speaker 1: what do? What happens to get people to believe that 463 00:27:15,800 --> 00:27:19,360 Speaker 1: you're correct? Um, well, at this point, we've already got 464 00:27:19,359 --> 00:27:22,760 Speaker 1: five and seventeen million barrels of oil the commercial stocks 465 00:27:22,760 --> 00:27:25,600 Speaker 1: sitting there. That is at the highest level since Baby 466 00:27:25,680 --> 00:27:27,560 Speaker 1: Ruth was hitting home runs up there in the Bronx. 467 00:27:28,560 --> 00:27:32,120 Speaker 1: At this point, it's just going to be a wait 468 00:27:32,200 --> 00:27:35,160 Speaker 1: and see game. We have to let this run its course. Uh, 469 00:27:35,240 --> 00:27:39,360 Speaker 1: certainly once we get into the demand season, Mike. So 470 00:27:39,840 --> 00:27:42,399 Speaker 1: perhaps we're going to have to wait until either the 471 00:27:42,480 --> 00:27:44,479 Speaker 1: beginning of the summer or the end of the summer, 472 00:27:44,800 --> 00:27:48,600 Speaker 1: after we get through the peak oil demand season gasoline 473 00:27:48,640 --> 00:27:51,120 Speaker 1: season that is in July and August. Then perhaps because 474 00:27:51,520 --> 00:27:56,440 Speaker 1: if you juxtapose today's price bath in oil with last 475 00:27:56,480 --> 00:28:00,680 Speaker 1: year's price bath in oil, they're they're going in lockstep fashion. 476 00:28:01,080 --> 00:28:05,280 Speaker 1: So in January last oil bottomed out about forty rallied 477 00:28:05,320 --> 00:28:09,359 Speaker 1: to sixty in May that we went into the summer 478 00:28:09,440 --> 00:28:11,400 Speaker 1: demand season, and by the end of the summer demand 479 00:28:11,440 --> 00:28:13,600 Speaker 1: season oil was at forty dollars a barrel, and then 480 00:28:13,640 --> 00:28:15,240 Speaker 1: of course at the beginning of this year it dropped 481 00:28:15,280 --> 00:28:18,480 Speaker 1: out to basically twenty a barrel, So I could see 482 00:28:18,520 --> 00:28:22,520 Speaker 1: that happening again. So this rally certainly could continue into 483 00:28:22,520 --> 00:28:26,400 Speaker 1: the summer, but certainly I'm not expecting a significant pullback 484 00:28:26,440 --> 00:28:30,959 Speaker 1: in production enough enough to compensate for soft demand, and 485 00:28:31,040 --> 00:28:34,080 Speaker 1: hence why I wouldn't be surprised if this current lockstep 486 00:28:34,280 --> 00:28:38,400 Speaker 1: again follows last year's very very quickly. Here when we 487 00:28:38,440 --> 00:28:40,960 Speaker 1: say we're up to our eyeballs and oil, are we 488 00:28:41,040 --> 00:28:45,600 Speaker 1: up to our eyeballs and natural gas? Absolutely? And that's 489 00:28:45,640 --> 00:28:49,240 Speaker 1: the bigger issue here, because production is showing no signs 490 00:28:49,280 --> 00:28:52,640 Speaker 1: of any sort of significant cutback. So again, as I said, 491 00:28:52,680 --> 00:28:55,720 Speaker 1: you're only two drivers for natural gas essentially are commercial 492 00:28:55,720 --> 00:28:58,920 Speaker 1: and industrial demand, which is in recession, and then the weather. 493 00:28:59,320 --> 00:29:02,200 Speaker 1: Now the different is here at that natural gas. All 494 00:29:02,240 --> 00:29:04,720 Speaker 1: it is going to take to get natural gas back 495 00:29:04,760 --> 00:29:06,680 Speaker 1: to three dollars a deck of term from where it 496 00:29:06,760 --> 00:29:09,360 Speaker 1: is today at about a dollar seventy a dec of therm. 497 00:29:09,520 --> 00:29:11,640 Speaker 1: All it's going to take, guys, is a really really 498 00:29:11,840 --> 00:29:16,160 Speaker 1: hot summer. So if you get a sweltering summer in Boston, 499 00:29:16,200 --> 00:29:18,239 Speaker 1: it's got to be the northern latitudes also, because it's 500 00:29:18,240 --> 00:29:20,720 Speaker 1: always hot in the south, so Boston, New York, in 501 00:29:20,800 --> 00:29:23,800 Speaker 1: Chicago have to swelter. If that happens, you'll see a 502 00:29:23,840 --> 00:29:26,920 Speaker 1: significant bounce in natural gas the end of the summer. 503 00:29:27,040 --> 00:29:30,239 Speaker 1: Stephen Shark. We will return Stephen Shark on oil, one 504 00:29:30,280 --> 00:29:33,400 Speaker 1: of the great debates of this moment. The market up 505 00:29:33,440 --> 00:29:39,200 Speaker 1: forty five points. Time now to bring in Michael R. 506 00:29:39,320 --> 00:29:41,840 Speaker 1: For the latest news headlines. Michael, by time, Thank you 507 00:29:41,920 --> 00:29:45,120 Speaker 1: very much. Vice President Joe Biden says we will act 508 00:29:45,280 --> 00:29:49,240 Speaker 1: if Iran breaks the nuclear deal. Biden is in Jerusalem 509 00:29:49,240 --> 00:29:52,280 Speaker 1: today for meetings. But this really Prime Minister Benjamin Netan Yahoo. 510 00:29:52,560 --> 00:29:56,080 Speaker 1: It comes after Iran's news agency says the country fired 511 00:29:56,080 --> 00:29:59,719 Speaker 1: two ballistic missiles with the phrase Israel must be wiped 512 00:30:00,000 --> 00:30:03,920 Speaker 1: out written and Hebrew on them. Biden says US Israel 513 00:30:04,040 --> 00:30:08,480 Speaker 1: relations remain strong. It doesn't mean we don't disagree, but 514 00:30:08,880 --> 00:30:12,920 Speaker 1: you you never need to doubt that the United States 515 00:30:13,000 --> 00:30:16,680 Speaker 1: America has Israel's back, and we knows we has our 516 00:30:16,760 --> 00:30:18,880 Speaker 1: back as well. And my dad, it's not a one 517 00:30:18,880 --> 00:30:22,360 Speaker 1: wish street. Biden will meet later today with Palestinian President 518 00:30:22,400 --> 00:30:26,080 Speaker 1: Mark Muda bas Democrats Hillary Clinton and Bernie Sanders will 519 00:30:26,120 --> 00:30:30,400 Speaker 1: debate again tonight. Clinton won the Mississippi primary yesterday, while 520 00:30:30,440 --> 00:30:33,200 Speaker 1: Sanders never really scored an upset and win in Michigan. 521 00:30:33,400 --> 00:30:37,320 Speaker 1: Donald Trump won Republican contests in Michigan, Mississippi, and Hawaii. 522 00:30:37,560 --> 00:30:41,440 Speaker 1: Ted Cruz one Idaho. He was the Beatles Other George 523 00:30:41,560 --> 00:30:45,080 Speaker 1: Beatles manager George Martin, has died. Martin produced some of 524 00:30:45,080 --> 00:30:53,960 Speaker 1: the most influential Beatles albums, including Sergeant Pepper's Lonely Hearts 525 00:30:53,960 --> 00:30:56,840 Speaker 1: Club Band. George Martin was ninety Global News twenty four 526 00:30:56,840 --> 00:30:59,880 Speaker 1: hours a day, powered by our journalists, and one of 527 00:30:59,920 --> 00:31:02,400 Speaker 1: the hundred fifty news bureaus from around the world. Michael 528 00:31:02,400 --> 00:31:06,800 Speaker 1: bar extraordinary individual, he was it is. It is just 529 00:31:07,000 --> 00:31:10,320 Speaker 1: album after album of original I don't think you've ever 530 00:31:10,320 --> 00:31:14,400 Speaker 1: seen that again, may I don't think so. Absolutely extraordinary, 531 00:31:14,560 --> 00:31:21,040 Speaker 1: Sir George Martin. This is Bloomberg Surveillance. Who was Steve Shark? 532 00:31:21,680 --> 00:31:24,080 Speaker 1: Tom noted the weather. It's going to be in the 533 00:31:24,120 --> 00:31:27,840 Speaker 1: sixties all through next week in New York. Stephen Shark 534 00:31:27,960 --> 00:31:36,480 Speaker 1: next on what the temperatures mean for the price of energy. 535 00:31:37,600 --> 00:31:40,960 Speaker 1: Global Business News twenty four hours a day at Bloomberg 536 00:31:41,040 --> 00:31:44,120 Speaker 1: dot Com, the Radio plus Mobile Act and on your radio. 537 00:31:44,440 --> 00:31:48,120 Speaker 1: This is a Bloomberg Business Flash and I'm Karen Moscow. 538 00:31:48,240 --> 00:31:51,600 Speaker 1: This updates brought to you by National Realty Returns on 539 00:31:51,680 --> 00:31:53,640 Speaker 1: cash and rented real estate find them at n r 540 00:31:53,760 --> 00:31:57,000 Speaker 1: i A dot net. U S stocks higher headed toward 541 00:31:57,040 --> 00:31:59,479 Speaker 1: an eighth year of a bull run led by a rebound, 542 00:31:59,480 --> 00:32:02,880 Speaker 1: and energy shares amid speculations central banks will continue to 543 00:32:02,920 --> 00:32:06,600 Speaker 1: provide stimulus to bolster sluggish global growth. We check the 544 00:32:06,600 --> 00:32:09,520 Speaker 1: market severy fifteen minutes throughout the trading day on Bloomberg 545 00:32:09,880 --> 00:32:12,480 Speaker 1: SNP five hundred, up three tenths per cent, or six points. 546 00:32:12,480 --> 00:32:15,400 Speaker 1: In nineteen eighty five. Dow Jones Industrial average of four 547 00:32:15,440 --> 00:32:18,000 Speaker 1: tenths per cent or sixty two points to seventeen thousand, 548 00:32:18,000 --> 00:32:21,120 Speaker 1: twenty six. Then asdac is little changed up three points 549 00:32:21,120 --> 00:32:23,920 Speaker 1: to forty six fifty one. Ten year treasury down ten 550 00:32:23,960 --> 00:32:26,320 Speaker 1: thirty seconds, the yield one point eight six percent, the 551 00:32:26,440 --> 00:32:29,200 Speaker 1: yield on the two year point eight nine percent. Nimex 552 00:32:29,240 --> 00:32:31,640 Speaker 1: screwed oil up one point six percent or fifty seven 553 00:32:31,680 --> 00:32:34,560 Speaker 1: cents to thirty seven oh seven A barrel comes goal 554 00:32:34,600 --> 00:32:37,240 Speaker 1: down one point four percent or seventeen dollars thirty cents 555 00:32:37,240 --> 00:32:40,080 Speaker 1: at twelve forty five eight. Announce the euro at other 556 00:32:40,200 --> 00:32:42,720 Speaker 1: oh nine five one the n one twelve point eight nine. 557 00:32:43,160 --> 00:32:46,560 Speaker 1: Valion Pharmaceuticals International will had three new board members, including 558 00:32:46,560 --> 00:32:49,480 Speaker 1: a representative from one of the drug maker's biggest investors, 559 00:32:49,680 --> 00:32:53,760 Speaker 1: and expand the panel to fourteen directors from twelve. Also 560 00:32:53,840 --> 00:32:57,000 Speaker 1: BMW predicting only a slight increase in deliveries, taking a 561 00:32:57,040 --> 00:32:59,520 Speaker 1: cautious approach for a year when it risked losing its 562 00:32:59,640 --> 00:33:02,720 Speaker 1: lead in a luxury car market to Mercedes Benz. That's 563 00:33:02,720 --> 00:33:06,760 Speaker 1: a Bloomberg business flash, Tommy, Mike, Karen Muska, thank you 564 00:33:06,840 --> 00:33:09,640 Speaker 1: very much. Stephen Shark of the Short Report is with us. 565 00:33:09,640 --> 00:33:13,720 Speaker 1: We're talking about the price of energy, we talked a 566 00:33:13,760 --> 00:33:16,160 Speaker 1: little bit about natural gas and how it was a 567 00:33:16,200 --> 00:33:20,080 Speaker 1: mild winter didn't help the price of natural gas. To 568 00:33:20,160 --> 00:33:26,480 Speaker 1: what extent, Stephen, is oil correlated with the weather. Uh, 569 00:33:26,520 --> 00:33:29,640 Speaker 1: it's correlated to the sense from the point of of 570 00:33:29,680 --> 00:33:33,000 Speaker 1: course the sloped fuels and the products, so gasoline and 571 00:33:33,000 --> 00:33:36,160 Speaker 1: so forth. So for instance, as you pointed out, we 572 00:33:36,200 --> 00:33:40,160 Speaker 1: had a very mild uh summer, excusely winter, So that 573 00:33:40,200 --> 00:33:42,520 Speaker 1: meant in the northern latitudes you didn't have snow, he 574 00:33:42,600 --> 00:33:45,080 Speaker 1: didn't have ice, so you didn't have the normal weather 575 00:33:45,200 --> 00:33:48,480 Speaker 1: demand destruction. So again, the weather is going to play 576 00:33:48,480 --> 00:33:52,680 Speaker 1: a different certainly in the winter, depending on the road conditions. 577 00:33:52,680 --> 00:33:55,000 Speaker 1: So the road conditions for the most part were very 578 00:33:55,000 --> 00:33:58,479 Speaker 1: favorable to strong gasoline demand. And indeed this is this 579 00:33:58,560 --> 00:34:01,960 Speaker 1: is exactly what we saw. And so that's also going 580 00:34:02,000 --> 00:34:04,600 Speaker 1: to impact at this point right now in the Midwest 581 00:34:04,640 --> 00:34:08,120 Speaker 1: because we're starting to enter the planting season, so you're 582 00:34:08,160 --> 00:34:12,080 Speaker 1: going to see an outsized gaining demand for distillate fuels. 583 00:34:12,200 --> 00:34:14,800 Speaker 1: So certainly if we get a rainy a rainy spring, 584 00:34:15,080 --> 00:34:17,520 Speaker 1: or a rainy fall so forth, and it kind of 585 00:34:17,560 --> 00:34:20,719 Speaker 1: delays the planting or the harvest thing. Uh, if you're 586 00:34:20,719 --> 00:34:23,480 Speaker 1: in the fall, that is, that's certainly going to impact 587 00:34:23,520 --> 00:34:25,920 Speaker 1: your demand patterns. And then of course we get into 588 00:34:25,960 --> 00:34:30,480 Speaker 1: the summer. So from an oil standpoint, it all depends, uh, 589 00:34:30,640 --> 00:34:33,520 Speaker 1: certainly at points of the year. At some points this look, 590 00:34:33,600 --> 00:34:35,520 Speaker 1: deals are going to lead the market, which is what 591 00:34:35,600 --> 00:34:37,440 Speaker 1: we're going to start to see in the Midwest and 592 00:34:37,600 --> 00:34:39,680 Speaker 1: other points of Gasolene is going to drop the market 593 00:34:39,719 --> 00:34:42,520 Speaker 1: typically around the holiday season, of course, and then once 594 00:34:42,560 --> 00:34:45,120 Speaker 1: we get into the vacation season in the summer, well, 595 00:34:45,120 --> 00:34:48,160 Speaker 1: there you go. Vacation season is coming up. Let's price 596 00:34:48,239 --> 00:34:50,560 Speaker 1: gatly and going to be for people who are going 597 00:34:50,600 --> 00:34:52,239 Speaker 1: to get in the cars. But we got spring break 598 00:34:52,320 --> 00:34:55,439 Speaker 1: coming up here. Uh, people are going to be Um, 599 00:34:56,160 --> 00:34:58,520 Speaker 1: obviously prices are low, but where do they go as 600 00:34:58,600 --> 00:35:02,680 Speaker 1: the driving season picks up. Well, historically they're going to increase. 601 00:35:02,760 --> 00:35:05,359 Speaker 1: And it's going to be a factor of of two 602 00:35:05,440 --> 00:35:09,279 Speaker 1: variables here. Of course, one is the increased demand more 603 00:35:09,320 --> 00:35:12,399 Speaker 1: cars on the road, Uh, and so the constraints that's 604 00:35:12,400 --> 00:35:15,840 Speaker 1: going to be putting on manufacturing gasoline and getting gasoline 605 00:35:15,840 --> 00:35:17,719 Speaker 1: to where it needs to be of course at your 606 00:35:17,760 --> 00:35:20,320 Speaker 1: local pump. But also it's going to be the factor 607 00:35:20,520 --> 00:35:23,880 Speaker 1: of the summer grade gasoline. So right now we blend 608 00:35:23,920 --> 00:35:26,040 Speaker 1: for gasoline or in the winter, you're gonna blend for 609 00:35:26,120 --> 00:35:29,480 Speaker 1: gasoline that has a different vapor pressure. But once we 610 00:35:29,520 --> 00:35:32,359 Speaker 1: get into the summer, you're going to have to you'll 611 00:35:32,360 --> 00:35:36,080 Speaker 1: lower your vapor pressure for environmental mental reasons, So of 612 00:35:36,120 --> 00:35:39,400 Speaker 1: course to blend for lower vapor pressure. When you get 613 00:35:39,480 --> 00:35:43,120 Speaker 1: twenty your so petrochemicals that go into making a gallon 614 00:35:43,280 --> 00:35:46,520 Speaker 1: of gasoline much harder, so you'll you'll probably get like 615 00:35:46,560 --> 00:35:49,879 Speaker 1: a thirty forty cent increase at the pump, but given 616 00:35:49,920 --> 00:35:52,920 Speaker 1: where prices are right now, and it's still extremely favorable 617 00:35:52,960 --> 00:35:55,359 Speaker 1: once you get into the summer. Steven Shark is known 618 00:35:55,400 --> 00:35:58,600 Speaker 1: for hyper detailed reports. We protect the copyright of all. 619 00:35:58,600 --> 00:36:00,640 Speaker 1: I guess we're not going to send you this short report. 620 00:36:00,760 --> 00:36:04,320 Speaker 1: Contact Stephen Short. Stephen. In the back of your report, 621 00:36:05,000 --> 00:36:10,040 Speaker 1: you have a fabulous eight paragraphs which is titled this 622 00:36:10,080 --> 00:36:14,480 Speaker 1: is a tragedy. You rip apart the jobs report and 623 00:36:14,520 --> 00:36:17,439 Speaker 1: the arch thing that Mike McKee and I hear from 624 00:36:17,440 --> 00:36:20,799 Speaker 1: our listeners, and maybe what Mr Trump hears from his 625 00:36:20,920 --> 00:36:25,239 Speaker 1: listeners or Mr Sanders here's from his listeners, which is 626 00:36:25,239 --> 00:36:29,560 Speaker 1: a quality of job formation. You were stunned at the 627 00:36:29,640 --> 00:36:33,240 Speaker 1: gift of low energy, and we're not creating the jobs 628 00:36:33,280 --> 00:36:36,759 Speaker 1: we need to create. Disgust absolutely, And when natural gas 629 00:36:36,920 --> 00:36:40,279 Speaker 1: is at three dollars, uh, when it when it's fun 630 00:36:40,320 --> 00:36:44,920 Speaker 1: When we guess natural gas prices um crash. Someone in 631 00:36:44,960 --> 00:36:47,600 Speaker 1: a discussion I was given down Houston asshalt. Isn't this 632 00:36:47,719 --> 00:36:51,839 Speaker 1: the catalyst for a manufacturing renaissance in this country? And 633 00:36:51,880 --> 00:36:54,960 Speaker 1: I absolutely agreed. And this this was a question from 634 00:36:54,960 --> 00:36:58,360 Speaker 1: a man from a very large steel company. So certainly 635 00:36:58,560 --> 00:37:02,160 Speaker 1: the comparative dage that we have over the world with 636 00:37:02,239 --> 00:37:04,520 Speaker 1: our energy costs and the fact that we are not 637 00:37:04,640 --> 00:37:09,479 Speaker 1: creating jobs. Guys, by teen, on the current trends since 638 00:37:09,520 --> 00:37:14,080 Speaker 1: the Great Recession, they're going to be more people waiters 639 00:37:14,320 --> 00:37:17,880 Speaker 1: and bartenders than are working in factories in mills in 640 00:37:17,880 --> 00:37:20,759 Speaker 1: this country. And if we look back at the job 641 00:37:20,800 --> 00:37:23,920 Speaker 1: creation since the Great Recession, or I should say this 642 00:37:24,400 --> 00:37:28,360 Speaker 1: last week's jobs report, it was heralded it was great 643 00:37:28,760 --> 00:37:32,399 Speaker 1: because we had so many jobs two dre added into 644 00:37:32,400 --> 00:37:35,640 Speaker 1: the private sector. Guys, more than half of those jobs 645 00:37:35,880 --> 00:37:39,600 Speaker 1: were on industries that pay five hundred dollars five fifty 646 00:37:39,600 --> 00:37:42,640 Speaker 1: dollars a week, that is minimum wage jobs. That that 647 00:37:42,719 --> 00:37:45,719 Speaker 1: we are creating, and that's certainly not any sort of 648 00:37:45,840 --> 00:37:49,680 Speaker 1: engine of growth, and hence why you're getting the bizarre 649 00:37:49,920 --> 00:37:52,640 Speaker 1: results that we're seeing in the election. When Donald Trump 650 00:37:52,719 --> 00:37:57,000 Speaker 1: and Bernie Standers are you know, are are getting so 651 00:37:57,080 --> 00:38:00,440 Speaker 1: much positive consideration, there are obviously a lot of people 652 00:38:00,480 --> 00:38:03,640 Speaker 1: out there that are concerned. So that is the tragedy. 653 00:38:03,920 --> 00:38:07,680 Speaker 1: What's going to happen when oil and energy prices either 654 00:38:07,880 --> 00:38:10,640 Speaker 1: move higher or the rest of the world catches up 655 00:38:10,640 --> 00:38:13,839 Speaker 1: to these low prices and we lose that advantage If 656 00:38:13,880 --> 00:38:16,520 Speaker 1: we can't make hate now when the sun is shining, 657 00:38:16,840 --> 00:38:19,520 Speaker 1: what happens when the clouds appear? And that is indeed 658 00:38:19,520 --> 00:38:22,879 Speaker 1: a very scary thought for me. You know, I look 659 00:38:22,920 --> 00:38:26,840 Speaker 1: Steve at at the job dynamics and folks, I can't 660 00:38:26,960 --> 00:38:30,359 Speaker 1: convey the amount of mail we get when the job 661 00:38:30,400 --> 00:38:33,400 Speaker 1: optimists I'm going to call them show up. Part of 662 00:38:33,440 --> 00:38:39,120 Speaker 1: this is incentivizing investment. If we incentivize energy investment, would 663 00:38:39,120 --> 00:38:40,600 Speaker 1: it mean a thing to me? It wouldn't. I mean, 664 00:38:40,680 --> 00:38:44,560 Speaker 1: the industries basically in chaos until they sort the new 665 00:38:44,600 --> 00:38:50,320 Speaker 1: price out, aren't they? Oh yeah, I know, absolutely so. 666 00:38:50,760 --> 00:38:54,799 Speaker 1: Uh uh. And but what's what's going to happen now. Now. 667 00:38:54,960 --> 00:38:58,239 Speaker 1: From a job standpoint, those jobs aren't coming back. We've 668 00:38:58,239 --> 00:39:00,680 Speaker 1: lost a hundred and fifty thousand jobs. It's not more 669 00:39:00,800 --> 00:39:03,040 Speaker 1: in the energy sector. And these are jobs that pay 670 00:39:03,080 --> 00:39:06,040 Speaker 1: fourteen hundred dollars a week. I mean, these are these 671 00:39:06,080 --> 00:39:09,759 Speaker 1: are the best paying jobs out there. So unfortunately those 672 00:39:09,840 --> 00:39:12,240 Speaker 1: jobs will come back, but not nearly to the degree 673 00:39:12,600 --> 00:39:15,759 Speaker 1: that we've lost it. But in the end, what we're 674 00:39:15,760 --> 00:39:19,520 Speaker 1: seeing now is this retrenchment, forced retrenchment on the U. S. 675 00:39:19,640 --> 00:39:23,600 Speaker 1: Energy industry. And this is something that I can't imagine 676 00:39:23,600 --> 00:39:26,839 Speaker 1: that OPEC did not see this happening. This industry, the 677 00:39:26,880 --> 00:39:30,239 Speaker 1: North American industry, is going to come out of this 678 00:39:30,440 --> 00:39:33,920 Speaker 1: depression in their in their in their sphere of the world, 679 00:39:33,960 --> 00:39:36,280 Speaker 1: and they're gonna come out of this that much stronger. 680 00:39:36,400 --> 00:39:38,520 Speaker 1: They're gonna come out with once you get through the 681 00:39:38,640 --> 00:39:41,840 Speaker 1: M and A activity, once we let the debt laid 682 00:39:41,840 --> 00:39:44,120 Speaker 1: in E piece, that is, if the banks ever let 683 00:39:44,160 --> 00:39:46,960 Speaker 1: them crash, they're going those assets are going to be 684 00:39:47,000 --> 00:39:50,239 Speaker 1: had for cents on the dollar. The productivity, the efficiency 685 00:39:50,280 --> 00:39:52,760 Speaker 1: gains are going to be that much greater, the margins 686 00:39:52,760 --> 00:39:55,640 Speaker 1: are going to be that much fatter, and hence why 687 00:39:55,760 --> 00:39:59,879 Speaker 1: I'm doubtful that will ever see seventy oil at any 688 00:40:00,280 --> 00:40:02,440 Speaker 1: which was the breaking point of the bear market. I 689 00:40:02,520 --> 00:40:04,920 Speaker 1: doubt we'll ever get there at any point in the 690 00:40:04,960 --> 00:40:07,839 Speaker 1: foreseeable future because this industry is going to be that 691 00:40:07,960 --> 00:40:11,560 Speaker 1: much better. And guys, let's not forget the other reason 692 00:40:11,600 --> 00:40:16,120 Speaker 1: why especially wants low ower prices. The in elasticity prices 693 00:40:16,200 --> 00:40:19,719 Speaker 1: and elasticity of demand for gasoline is falling because what 694 00:40:19,840 --> 00:40:23,120 Speaker 1: I'm calling it the Elon Musk effect. You have substitutes 695 00:40:23,200 --> 00:40:25,880 Speaker 1: into this market. So we're as we will get a 696 00:40:25,960 --> 00:40:28,880 Speaker 1: popping demand. That demand is not going to be commensurate 697 00:40:28,920 --> 00:40:31,760 Speaker 1: with other pops of demand we've seen in the past, 698 00:40:31,960 --> 00:40:35,240 Speaker 1: because now I have alternatives the Tesla drive down Putnam 699 00:40:35,280 --> 00:40:37,719 Speaker 1: Avenue in Greenwich. When I lived up in Greenwich twenty 700 00:40:37,800 --> 00:40:40,520 Speaker 1: years ago, which is America, let's be honest, Well, right, 701 00:40:40,719 --> 00:40:44,040 Speaker 1: but the status car on Greenwage Avenue was what the Humby, 702 00:40:44,320 --> 00:40:47,400 Speaker 1: which got like seven yards to the gallon drive down 703 00:40:47,400 --> 00:40:51,680 Speaker 1: Greenwage Avenue. Today it's the Tesla. So inside of one generation, 704 00:40:51,880 --> 00:40:56,000 Speaker 1: we've completely turned the demand economics on its head and 705 00:40:56,360 --> 00:40:58,440 Speaker 1: the ties out of the bottle. So we're not going 706 00:40:58,480 --> 00:41:00,520 Speaker 1: back and wait until you see the back the dry 707 00:41:00,680 --> 00:41:04,680 Speaker 1: least technology on inelasticities. So OPEC is aware of this. 708 00:41:05,000 --> 00:41:08,239 Speaker 1: They're they're fighting a losing battle. They're just trying along 709 00:41:08,320 --> 00:41:10,840 Speaker 1: it a little bit more one for our Canadian listeners, 710 00:41:10,880 --> 00:41:13,080 Speaker 1: give us an update on how Canada is faring with 711 00:41:13,760 --> 00:41:18,399 Speaker 1: Brent crude. It's it's brutal as bad as it is 712 00:41:18,560 --> 00:41:21,800 Speaker 1: in the US oil patch and everywhere from North Dakota 713 00:41:22,160 --> 00:41:25,880 Speaker 1: down through Houston, you go out through Canada and Canada 714 00:41:26,520 --> 00:41:30,560 Speaker 1: their their biggest problem is there at the end of 715 00:41:30,560 --> 00:41:35,040 Speaker 1: the pipe. So the complete dynamics what's happening natural gas 716 00:41:35,120 --> 00:41:39,480 Speaker 1: has decimated the Canadian natural gas market because you've got 717 00:41:39,560 --> 00:41:41,879 Speaker 1: so much gas being produced to my home state here 718 00:41:41,880 --> 00:41:44,920 Speaker 1: in Pennsylvania and close the border in eastern Ohio with 719 00:41:44,960 --> 00:41:48,799 Speaker 1: the Uticus shale, that we've completely changed the epicenter of 720 00:41:48,800 --> 00:41:51,600 Speaker 1: the Canadian natural gas market because we're exporting and those 721 00:41:51,640 --> 00:41:54,880 Speaker 1: exports are going to grow into Ontario. So we've completely 722 00:41:54,920 --> 00:41:58,200 Speaker 1: displaced the western Canadian market at this point. So this 723 00:41:58,280 --> 00:42:02,000 Speaker 1: is something that Canada is dealing with right now, considering 724 00:42:02,040 --> 00:42:05,160 Speaker 1: that just trading part of the United States doesn't need 725 00:42:05,560 --> 00:42:09,600 Speaker 1: one of their key exports right to Steven got to 726 00:42:09,640 --> 00:42:11,920 Speaker 1: see again when you're in New York. Great briefing Stephen Shork, 727 00:42:11,960 --> 00:42:16,279 Speaker 1: the short report of Pennsylvania just fabulous, and his his 728 00:42:16,480 --> 00:42:20,360 Speaker 1: research there um on the February jobs report about you know, 729 00:42:20,440 --> 00:42:24,840 Speaker 1: great jobs report with revisions, a terrific jobs report, but 730 00:42:24,920 --> 00:42:30,000 Speaker 1: the income makeup is uh gives one pause, Mike. It's 731 00:42:30,040 --> 00:42:33,520 Speaker 1: interesting he wades into that debate. Yeah. Yeah, he took 732 00:42:33,520 --> 00:42:36,120 Speaker 1: a real right turn there. We like, we like that 733 00:42:36,200 --> 00:42:39,640 Speaker 1: within all of our guests, John Writing, thank you, Stephen Shork, 734 00:42:39,920 --> 00:42:43,920 Speaker 1: thank you. Tomorrow, Mario Dragging will be our guest in 735 00:42:43,960 --> 00:42:46,560 Speaker 1: the eight thirty hour. This is Bloomberg surveillance.