1 00:00:00,080 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:11,600 --> 00:00:15,440 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along 3 00:00:15,440 --> 00:00:18,680 Speaker 2: with Lisa Bromwitz and Amrie Hordern. Join us each day 4 00:00:18,720 --> 00:00:22,239 Speaker 2: for insight from the best in markets, economics, and geopolitics 5 00:00:22,400 --> 00:00:24,880 Speaker 2: from our global headquarters in New York City. We are 6 00:00:24,920 --> 00:00:27,680 Speaker 2: live on Bloomberg Television weekday mornings from six to nine 7 00:00:27,680 --> 00:00:31,280 Speaker 2: am Eastern. Subscribe to the podcast on Apple, Spotify, or 8 00:00:31,280 --> 00:00:33,919 Speaker 2: anywhere else you listen, and as always on the Bloomberg 9 00:00:34,000 --> 00:00:36,959 Speaker 2: Terminal and the Bloomberg Business App. I'm pleased to say 10 00:00:36,960 --> 00:00:39,440 Speaker 2: that joining us now is the seventeenth United States Secretary 11 00:00:39,440 --> 00:00:43,479 Speaker 2: of Energy, self described energy nerd turned entrepreneur now dedicated 12 00:00:43,520 --> 00:00:46,960 Speaker 2: his time to public services. Mister Secretary Chris Right, thank 13 00:00:47,000 --> 00:00:49,320 Speaker 2: you very much for joining Bloomberg Surveillance this morning. We 14 00:00:49,360 --> 00:00:52,080 Speaker 2: appreciate your time. We just wanted an initial reaction from 15 00:00:52,120 --> 00:00:56,520 Speaker 2: you to the tariffs we heard retaliated by China overnight. 16 00:00:56,560 --> 00:00:58,200 Speaker 3: What's your reaction this morning, sir. 17 00:01:01,120 --> 00:01:03,000 Speaker 4: Oh, I think you see we're right in the midst 18 00:01:03,000 --> 00:01:06,839 Speaker 4: of a negotiation. This is home territory for President Trump, 19 00:01:07,200 --> 00:01:09,000 Speaker 4: both in his business career. 20 00:01:08,760 --> 00:01:10,280 Speaker 5: And his first term as president. 21 00:01:10,880 --> 00:01:14,080 Speaker 4: You know, he reads the marketplace, he engages with people, 22 00:01:14,120 --> 00:01:16,640 Speaker 4: he uses leverage, and we're gonna get to a great result. 23 00:01:17,400 --> 00:01:19,080 Speaker 4: We're seeing in the midst of it right now. But 24 00:01:19,120 --> 00:01:21,080 Speaker 4: I'm quite optimistic about where we're going. 25 00:01:21,400 --> 00:01:23,960 Speaker 6: Well, the United States has already slashed it's forecast for 26 00:01:24,000 --> 00:01:27,280 Speaker 6: global oil demand. If we continue on this path of 27 00:01:27,360 --> 00:01:31,440 Speaker 6: a trade war, do you expect demand to continue to decelerate? 28 00:01:35,440 --> 00:01:39,000 Speaker 4: Oh, Their prediction of the demise of demand growth for 29 00:01:39,080 --> 00:01:42,440 Speaker 4: oil is is older than I am. So Look, there's 30 00:01:42,480 --> 00:01:46,440 Speaker 4: cyclical factors on economic growth that do impact at the 31 00:01:46,600 --> 00:01:48,800 Speaker 4: long term growth rate of oil little more than a 32 00:01:48,840 --> 00:01:51,680 Speaker 4: million barrels of oil per day per year has been 33 00:01:51,720 --> 00:01:55,040 Speaker 4: going on for decades. I don't see any big change 34 00:01:55,080 --> 00:01:58,520 Speaker 4: in that in the foreseeable future. You see a marketplace 35 00:01:58,600 --> 00:02:02,000 Speaker 4: right now that is worried about economic growth, and I 36 00:02:02,000 --> 00:02:04,600 Speaker 4: think you're seeing some softening in oil prices from that. 37 00:02:05,240 --> 00:02:08,400 Speaker 4: But I think that fear, I think that fear is misplaced. 38 00:02:09,080 --> 00:02:11,080 Speaker 4: I think we're going to end out in a better 39 00:02:11,160 --> 00:02:14,160 Speaker 4: economic situation than we went into this Trump term, I 40 00:02:14,160 --> 00:02:16,760 Speaker 4: think by a long shot. Look, two things are driving 41 00:02:16,800 --> 00:02:20,560 Speaker 4: tariff policy for President Trump. One is we've been very 42 00:02:20,600 --> 00:02:23,920 Speaker 4: welcoming to exports from other nations. We want other nations 43 00:02:23,960 --> 00:02:26,720 Speaker 4: to be just as welcoming of US exports, so we 44 00:02:26,720 --> 00:02:29,399 Speaker 4: can grow our exports more in line with our imports. 45 00:02:30,200 --> 00:02:35,320 Speaker 4: And President Trump wants to see America reindustrialize, investment, jobs, 46 00:02:35,400 --> 00:02:37,560 Speaker 4: and heavy industry back in our country. 47 00:02:38,000 --> 00:02:40,200 Speaker 5: Both those are going to be wonderful for the United States. 48 00:02:40,560 --> 00:02:41,240 Speaker 7: Well, it's not just. 49 00:02:41,240 --> 00:02:44,919 Speaker 6: A softening of oil prices, mister secretary. I'm sure you've 50 00:02:44,919 --> 00:02:48,560 Speaker 6: seen that since Trump's inauguration, prices are down more than 51 00:02:48,760 --> 00:02:52,280 Speaker 6: ten dollars. At what level do you think you can 52 00:02:52,320 --> 00:02:55,000 Speaker 6: see drill baby drills? The President likes to call it 53 00:02:55,040 --> 00:02:57,360 Speaker 6: when it comes to shale producers, because what we're hearing 54 00:02:57,680 --> 00:02:59,799 Speaker 6: is that they cannot do this if price is fall 55 00:03:00,200 --> 00:03:01,200 Speaker 6: fifty dollars a barrel. 56 00:03:05,160 --> 00:03:05,400 Speaker 5: Yeah. 57 00:03:05,440 --> 00:03:08,920 Speaker 4: Look, investment decisions of oil and gas companies in the 58 00:03:09,000 --> 00:03:10,919 Speaker 4: US and abroad or based on a little bit of 59 00:03:11,040 --> 00:03:13,560 Speaker 4: multi year view of oil and gas prices. They're not 60 00:03:13,760 --> 00:03:16,840 Speaker 4: moved based on the spot price of oil today, or 61 00:03:16,840 --> 00:03:19,560 Speaker 4: oil last week or oil next week. So these are 62 00:03:19,639 --> 00:03:22,760 Speaker 4: longer term decisions that are being made. We saw oil 63 00:03:22,760 --> 00:03:26,720 Speaker 4: and gas prices move down immediately after President Trump was elected, 64 00:03:26,960 --> 00:03:29,360 Speaker 4: and that was the market seeing, Oh, yes, all the 65 00:03:29,480 --> 00:03:32,120 Speaker 4: nonsense that's tried to kill the oil and gas industry, 66 00:03:32,400 --> 00:03:36,400 Speaker 4: promised it'll be over soon, stopped giving permits on federal lands. 67 00:03:36,600 --> 00:03:39,240 Speaker 4: All that stuff is going away, and so there's much 68 00:03:39,280 --> 00:03:41,440 Speaker 4: more of a green light on production. So if you 69 00:03:41,480 --> 00:03:43,640 Speaker 4: put more supply into a marketplace, you're going to get 70 00:03:43,640 --> 00:03:46,160 Speaker 4: lower prices. Now we're seeing, as they said, that sort 71 00:03:46,160 --> 00:03:49,680 Speaker 4: of extra fear of world economic growth in the next 72 00:03:49,680 --> 00:03:51,440 Speaker 4: few months over the tariff dialogue. 73 00:03:51,520 --> 00:03:52,480 Speaker 5: That's real fear. 74 00:03:52,880 --> 00:03:55,720 Speaker 4: But I think the marketplace may be discounting the wrong 75 00:03:55,760 --> 00:03:59,760 Speaker 4: answer here. We're going to see very very positive economic 76 00:03:59,800 --> 00:04:00,960 Speaker 4: growth in the next few years. 77 00:04:01,040 --> 00:04:03,280 Speaker 6: But is it still realistic to be talking about adding 78 00:04:03,320 --> 00:04:06,600 Speaker 6: the United States adding another three million barrels of production 79 00:04:06,800 --> 00:04:07,760 Speaker 6: at these prices? 80 00:04:11,520 --> 00:04:14,960 Speaker 4: Well, I think you're referring to Scott Besson's plan there, 81 00:04:15,040 --> 00:04:19,479 Speaker 4: and his three millions was three million barrels of oil equivalent. 82 00:04:20,000 --> 00:04:22,880 Speaker 4: Most of that growth will come from natural gas, and 83 00:04:22,960 --> 00:04:25,839 Speaker 4: of course the domestic demand for natural gas with the 84 00:04:25,880 --> 00:04:30,480 Speaker 4: growth of AI resourcing manufacturing and our surging exports. 85 00:04:30,800 --> 00:04:34,960 Speaker 5: Boy, yes, we will grow oil equivalent. 86 00:04:34,360 --> 00:04:37,719 Speaker 4: Production by at least that much during President's term. But 87 00:04:37,800 --> 00:04:41,039 Speaker 4: we will also grow oil production and other liquid natural 88 00:04:41,040 --> 00:04:44,279 Speaker 4: gas liquid production in the United States as well. So 89 00:04:44,480 --> 00:04:46,880 Speaker 4: absolutely are we going to see strong growth in American 90 00:04:47,040 --> 00:04:48,640 Speaker 4: energy production one hundred percent. 91 00:04:49,080 --> 00:04:50,840 Speaker 6: Mister Secretary, You've been on a tour in the Middle 92 00:04:50,880 --> 00:04:53,720 Speaker 6: East for about two weeks since our understanding that before 93 00:04:53,760 --> 00:04:57,040 Speaker 6: Saudi Arabia decided to add even more barrels to the market, 94 00:04:57,320 --> 00:04:59,760 Speaker 6: there was a conversation, a dialogue between the Trump and 95 00:04:59,760 --> 00:05:03,000 Speaker 6: Minute registration and the Kingdom. Can you give us a 96 00:05:03,000 --> 00:05:05,480 Speaker 6: sense of what that dialogue looked like. Is the United 97 00:05:05,520 --> 00:05:09,520 Speaker 6: States supportive of OPEC plus adding more barrels to this market. 98 00:05:12,760 --> 00:05:16,719 Speaker 4: Yeah, we don't directly coordinate on oil production policies or whatever. 99 00:05:16,800 --> 00:05:19,960 Speaker 4: That's certainly an OPEX purview. But I don't think anyone 100 00:05:20,000 --> 00:05:24,279 Speaker 4: in the world misunderstands President Trump's desire to see more 101 00:05:24,400 --> 00:05:29,600 Speaker 4: energy produced, therefore lower prices and more economic activity. Absolutely, 102 00:05:29,680 --> 00:05:32,640 Speaker 4: that's President Trump's agenda. Look at his genda can be 103 00:05:32,680 --> 00:05:36,360 Speaker 4: summarized as prosperity at home and peace abroad. 104 00:05:36,839 --> 00:05:38,320 Speaker 5: Lower oil prices. 105 00:05:37,960 --> 00:05:41,280 Speaker 4: Help both of those, and the piece abroad that's the 106 00:05:41,320 --> 00:05:43,640 Speaker 4: most concern right now. In the region where I am 107 00:05:43,640 --> 00:05:47,159 Speaker 4: in the Middle East is Iran. Iran over during the 108 00:05:47,160 --> 00:05:51,600 Speaker 4: Biden administration, oil prices were higher. There was sort of 109 00:05:51,640 --> 00:05:55,839 Speaker 4: an appeasement attitude and no strong enforcement of sanctions, enormous 110 00:05:55,839 --> 00:05:58,960 Speaker 4: funding de Hamas to Hesbaala to the Huthis, and a 111 00:05:59,040 --> 00:06:02,760 Speaker 4: rapid advancement of their nuclear program. President Trump's agenda is 112 00:06:02,839 --> 00:06:06,640 Speaker 4: exactly the opposite that it's peace through strength. But we 113 00:06:06,760 --> 00:06:10,640 Speaker 4: simply cannot and will not accept a nuclear armed Iran. 114 00:06:11,160 --> 00:06:13,000 Speaker 6: Well, when it comes to Ron, we saw even more 115 00:06:13,040 --> 00:06:16,400 Speaker 6: sanctions on the regime yesterday. When it comes to these 116 00:06:16,400 --> 00:06:18,560 Speaker 6: oil sanctions, the President has said he wants to go 117 00:06:18,640 --> 00:06:21,479 Speaker 6: back to maximum pressure. Is that part of the conversation 118 00:06:21,600 --> 00:06:24,880 Speaker 6: you're having with golf allies on this tour that they'd 119 00:06:24,920 --> 00:06:27,120 Speaker 6: be willing to step in if some of those Iranian 120 00:06:27,160 --> 00:06:28,520 Speaker 6: barrels come off the market. 121 00:06:31,839 --> 00:06:35,039 Speaker 4: Well, fortunately, just from the United States production itself and 122 00:06:35,120 --> 00:06:38,800 Speaker 4: the size of the global oil market today, Absolutely, we 123 00:06:38,880 --> 00:06:43,160 Speaker 4: can tolerate squeezing out Iranian exports. That and of course, 124 00:06:43,200 --> 00:06:45,800 Speaker 4: do all the golf neighbors want the same thing we want? 125 00:06:45,960 --> 00:06:46,279 Speaker 5: Yes. 126 00:06:46,640 --> 00:06:50,440 Speaker 4: Do they fear a nuclear armed Iran? Absolutely? Do they 127 00:06:50,480 --> 00:06:53,159 Speaker 4: think now is the time to turn the screws and 128 00:06:53,520 --> 00:06:57,719 Speaker 4: end Iran's nuclear weapons program? Absolutely? But yeah, can the 129 00:06:57,720 --> 00:07:01,520 Speaker 4: world tolerate that absolutely. Years ago, twenty years ago, could 130 00:07:01,520 --> 00:07:05,320 Speaker 4: this have happened? No, But today we both have large 131 00:07:05,360 --> 00:07:09,720 Speaker 4: American oil production, better relations with our neighbors, and a strong, 132 00:07:09,880 --> 00:07:13,360 Speaker 4: resolute leader. In forty years of trouble, forty five years 133 00:07:13,400 --> 00:07:16,360 Speaker 4: of trouble from Iran, we've never had a better chance 134 00:07:16,760 --> 00:07:21,160 Speaker 4: to reduce Iranian power, reduce Iranian tyranny in the Middle East, 135 00:07:21,480 --> 00:07:23,400 Speaker 4: and we don't want to miss that opportunity. 136 00:07:23,520 --> 00:07:25,760 Speaker 6: As a secretary, the President has said a lot, even 137 00:07:25,800 --> 00:07:27,680 Speaker 6: recently to me on Air Force One, he likes that. 138 00:07:27,760 --> 00:07:30,440 Speaker 6: Guess oil prices are coming down? Do you and the 139 00:07:30,480 --> 00:07:33,000 Speaker 6: President have a price in mind. 140 00:07:36,240 --> 00:07:40,360 Speaker 4: No, I think my whole life, I've avoided predicting prices 141 00:07:40,440 --> 00:07:44,640 Speaker 4: or dictating prices. We have a wonderful free market economy. 142 00:07:44,680 --> 00:07:47,680 Speaker 4: That's what makes the world wealthier. That's what allows consumers 143 00:07:47,720 --> 00:07:51,000 Speaker 4: to continually re express choices in every direction. 144 00:07:51,400 --> 00:07:53,840 Speaker 5: So no, there's no formula for a good oil price. 145 00:07:54,040 --> 00:07:58,000 Speaker 4: There's just a broader belief that lower cost diesel, lower 146 00:07:58,040 --> 00:08:02,000 Speaker 4: cost gasoline, lower cost home heat, lower cost electricity, all 147 00:08:02,040 --> 00:08:05,040 Speaker 4: of those are good for American consumers and good for businesses. 148 00:08:05,720 --> 00:08:09,680 Speaker 4: That's President Trump's energy agenda and I'm here to implement. 149 00:08:09,280 --> 00:08:11,840 Speaker 2: It, Miss the Secretary, appreciate your time this morning, this 150 00:08:11,920 --> 00:08:14,040 Speaker 2: evening where you are. Thank you very much for being 151 00:08:14,040 --> 00:08:26,840 Speaker 2: with Blimberg TV. The Energy Secretary there, Chris right. This 152 00:08:26,960 --> 00:08:28,880 Speaker 2: is what Sarah Hunt of our pint Saxon was has 153 00:08:28,920 --> 00:08:31,560 Speaker 2: to say. The damage has been done both to markets 154 00:08:31,600 --> 00:08:34,040 Speaker 2: and to sentiment. Goes on to say, what we do 155 00:08:34,200 --> 00:08:37,720 Speaker 2: know is that the uncertainty is likely to continue. Sarah 156 00:08:37,800 --> 00:08:38,120 Speaker 2: joins us. 157 00:08:38,160 --> 00:08:38,600 Speaker 3: Now for more. 158 00:08:38,640 --> 00:08:40,720 Speaker 2: Sarah and Mornick, good morning. How much weight can you 159 00:08:40,720 --> 00:08:42,240 Speaker 2: put on the guidance from the banks this morning? 160 00:08:42,880 --> 00:08:45,400 Speaker 1: Well, I think it's interesting that they're giving guidance at all, 161 00:08:45,520 --> 00:08:48,880 Speaker 1: because I expected a lot more of a not necessarily 162 00:08:48,920 --> 00:08:51,559 Speaker 1: pulling guidance, but a larger uncertainty. 163 00:08:51,600 --> 00:08:52,960 Speaker 7: We were going to bracket things. 164 00:08:53,240 --> 00:08:55,880 Speaker 1: So I think that there is a call to strength 165 00:08:55,920 --> 00:08:57,920 Speaker 1: there that says, you know what, we see what's going on, 166 00:08:57,960 --> 00:08:59,760 Speaker 1: We see what's going on in fixed income markets, and 167 00:09:00,080 --> 00:09:01,640 Speaker 1: see that this is actually going to be a decent 168 00:09:01,720 --> 00:09:03,679 Speaker 1: year for us. And I think for the bigger banks 169 00:09:03,679 --> 00:09:05,160 Speaker 1: that's an easier thing to say than it is for 170 00:09:05,160 --> 00:09:05,880 Speaker 1: some of the smaller events. 171 00:09:05,920 --> 00:09:08,000 Speaker 2: I think how positive people were coming into twenty twenty 172 00:09:08,080 --> 00:09:11,400 Speaker 2: five sentiment sky high. Long growth will improve. Capital markets 173 00:09:11,440 --> 00:09:14,040 Speaker 2: activity is going to be fantastic. Lisa was asking this 174 00:09:14,120 --> 00:09:16,360 Speaker 2: question in the last thirty minutes or so. The capital 175 00:09:16,400 --> 00:09:20,120 Speaker 2: market's activity now for the financials delayed or derailed? Which 176 00:09:20,120 --> 00:09:20,600 Speaker 2: one is it. 177 00:09:21,160 --> 00:09:23,760 Speaker 1: I'm going to say delayed. I don't think it's necessarily derailed. 178 00:09:23,800 --> 00:09:26,600 Speaker 1: I think that ultimately. You know, what was interesting about 179 00:09:26,600 --> 00:09:28,880 Speaker 1: the comments that you brought up earlier in Marie was 180 00:09:29,000 --> 00:09:30,920 Speaker 1: that in that long list were some of the things 181 00:09:30,920 --> 00:09:33,160 Speaker 1: that are supposed to be positive, which is the deregulation, 182 00:09:33,240 --> 00:09:35,240 Speaker 1: and which is some of the mergers and acquisitions and 183 00:09:35,280 --> 00:09:36,320 Speaker 1: stuff that we were. 184 00:09:36,160 --> 00:09:37,240 Speaker 7: Talking about going into this. 185 00:09:37,520 --> 00:09:39,800 Speaker 1: But the fact that the tariffs came so soon, and 186 00:09:39,840 --> 00:09:43,360 Speaker 1: the tariffs came so hot relative to what the expectations were, 187 00:09:43,559 --> 00:09:46,600 Speaker 1: I think has got everybody going losing sight of the 188 00:09:46,600 --> 00:09:48,240 Speaker 1: fact that there may be other things, and I'm not 189 00:09:48,280 --> 00:09:50,400 Speaker 1: sure any of us know exactly what that's going to be. 190 00:09:50,720 --> 00:09:53,439 Speaker 8: Is the market reacting to the hot rhetoric, or is 191 00:09:53,480 --> 00:09:57,600 Speaker 8: the market reacting to market structure issues that are amplifying 192 00:09:57,679 --> 00:10:00,319 Speaker 8: moves that are then causing people, for lack of a 193 00:10:00,400 --> 00:10:01,320 Speaker 8: better word, freak out. 194 00:10:01,480 --> 00:10:03,480 Speaker 1: So this is another problem where the answer is yes, 195 00:10:03,840 --> 00:10:06,520 Speaker 1: because it's all the things right. It's both they're reacting 196 00:10:06,520 --> 00:10:09,200 Speaker 1: to the moves, and there is some there have been 197 00:10:09,240 --> 00:10:12,200 Speaker 1: some ongoing discussions about what's going on underneath the markets 198 00:10:12,240 --> 00:10:14,640 Speaker 1: and whether there's anything going on within the structure of 199 00:10:14,800 --> 00:10:17,720 Speaker 1: the treasury basis trade, this the FX markets. 200 00:10:17,840 --> 00:10:18,439 Speaker 7: So I think that. 201 00:10:18,400 --> 00:10:20,800 Speaker 1: There's a combination of things where you get the first 202 00:10:20,840 --> 00:10:23,800 Speaker 1: reaction on fundamentals, and then the second reaction comes from 203 00:10:23,840 --> 00:10:25,760 Speaker 1: things that we're not necessarily able to see. 204 00:10:25,840 --> 00:10:26,920 Speaker 7: Where are we in that? 205 00:10:27,000 --> 00:10:28,560 Speaker 8: I mean, is there a sense that there's something that 206 00:10:28,640 --> 00:10:30,600 Speaker 8: just blew up, or there's something that's in the process 207 00:10:30,600 --> 00:10:33,000 Speaker 8: of blowing up, and we're watching it and then creating 208 00:10:33,000 --> 00:10:35,960 Speaker 8: a narrative around American exceptionalism around it, and then adding 209 00:10:36,000 --> 00:10:39,960 Speaker 8: some narrative talk about that, and everyone's running to the edges. 210 00:10:39,679 --> 00:10:40,320 Speaker 7: And just hiding. 211 00:10:40,320 --> 00:10:42,280 Speaker 8: I mean, I'm trying to figure out the anatomy of 212 00:10:42,320 --> 00:10:45,800 Speaker 8: what is going on. After a really tumultuous couple of weeks. 213 00:10:46,000 --> 00:10:47,839 Speaker 7: I think that you are not the only one. 214 00:10:47,840 --> 00:10:49,319 Speaker 1: I think all of us are trying to figure out 215 00:10:49,320 --> 00:10:51,800 Speaker 1: what's been going on underneath the surface and or the 216 00:10:51,840 --> 00:10:55,400 Speaker 1: size of some of these moves. How problematic that is 217 00:10:55,440 --> 00:10:57,760 Speaker 1: because so many firms have levered up more and more 218 00:10:57,800 --> 00:11:00,640 Speaker 1: as we've had less volatility, and then you get volatility 219 00:11:00,640 --> 00:11:02,520 Speaker 1: that is off the charts, and you have to think 220 00:11:02,520 --> 00:11:05,040 Speaker 1: that there are some reactions to that, and some of 221 00:11:05,040 --> 00:11:06,839 Speaker 1: those are going to be people making a lot of money, 222 00:11:06,880 --> 00:11:08,480 Speaker 1: and some of them are going to be the opposite. 223 00:11:08,520 --> 00:11:10,760 Speaker 1: And I don't think we have an understanding right now 224 00:11:10,800 --> 00:11:14,520 Speaker 1: of which is the bigger piece of that. As money 225 00:11:14,559 --> 00:11:16,520 Speaker 1: also moves out of the US and goes to other 226 00:11:16,559 --> 00:11:19,080 Speaker 1: places which are smaller than the US, so therefore the 227 00:11:19,160 --> 00:11:21,120 Speaker 1: effects are magnified. So I think that there are a 228 00:11:21,160 --> 00:11:23,600 Speaker 1: lot of different parts of that equation, and I'm not 229 00:11:23,640 --> 00:11:26,080 Speaker 1: sure that we're able to simultaneously solve it right now. 230 00:11:26,160 --> 00:11:28,400 Speaker 6: The Treasury Secretary said yesterday they're going to go through 231 00:11:28,440 --> 00:11:30,280 Speaker 6: the queue when it comes to these deals they're making 232 00:11:30,320 --> 00:11:31,960 Speaker 6: with other countries, and then there's going to be a 233 00:11:31,960 --> 00:11:35,400 Speaker 6: period of quote, great certainty after these ninety days. 234 00:11:35,440 --> 00:11:37,040 Speaker 5: That what you expect ninety days and you get some 235 00:11:37,040 --> 00:11:37,920 Speaker 5: certainty in the market. 236 00:11:38,360 --> 00:11:40,680 Speaker 1: I would love to see great certainty in ninety days. 237 00:11:40,920 --> 00:11:43,120 Speaker 1: I'm not sure that you're going to get great certainty 238 00:11:43,160 --> 00:11:45,120 Speaker 1: because I think that as we go through all of 239 00:11:45,160 --> 00:11:46,480 Speaker 1: these things, there's going. 240 00:11:46,360 --> 00:11:47,480 Speaker 7: To be continuous changes. 241 00:11:47,520 --> 00:11:49,080 Speaker 1: So I think that if you take some of the 242 00:11:49,200 --> 00:11:51,280 Speaker 1: uncertainty off the table, which. 243 00:11:51,080 --> 00:11:52,240 Speaker 7: We haven't yet at all. 244 00:11:52,520 --> 00:11:54,319 Speaker 1: And I think that there was some expectation that once 245 00:11:54,320 --> 00:11:56,200 Speaker 1: the announcements were made, that was going to be a 246 00:11:56,240 --> 00:11:59,200 Speaker 1: catalyst in and of itself from an uncertainty standpoint, and 247 00:11:59,240 --> 00:12:00,679 Speaker 1: all it's done is that up. 248 00:12:00,920 --> 00:12:02,840 Speaker 7: So I think that there is going to be some. 249 00:12:02,720 --> 00:12:04,719 Speaker 1: As you start to get deals through the pipeline and 250 00:12:04,720 --> 00:12:06,800 Speaker 1: people start to understand what they are, I think that 251 00:12:06,840 --> 00:12:09,120 Speaker 1: will help calm things down. But right now we're still 252 00:12:09,120 --> 00:12:10,959 Speaker 1: in that phase where that hasn't happened yet, and I 253 00:12:11,040 --> 00:12:13,600 Speaker 1: think we are that max uncertainty that we all keep 254 00:12:13,640 --> 00:12:15,959 Speaker 1: hoping to get behind just continues on a daily basis. 255 00:12:15,960 --> 00:12:18,480 Speaker 2: As a forward multiple on the SMP doesn't screen recession 256 00:12:18,640 --> 00:12:20,680 Speaker 2: right now, Camra Dawsum, might that point in the last 257 00:12:20,720 --> 00:12:23,520 Speaker 2: hour from your perspective, given the price move we've already seen, 258 00:12:23,559 --> 00:12:25,480 Speaker 2: do you think we have the capacity to absorb back 259 00:12:25,480 --> 00:12:27,760 Speaker 2: news now going into the next several months where we 260 00:12:27,840 --> 00:12:30,960 Speaker 2: might see some pretty big downside surprices on data. 261 00:12:31,120 --> 00:12:31,800 Speaker 7: Well, I think that. 262 00:12:31,800 --> 00:12:34,120 Speaker 1: We came into this year with the market and even 263 00:12:34,200 --> 00:12:36,800 Speaker 1: elevated at multiple than it was right now. So is 264 00:12:36,840 --> 00:12:38,600 Speaker 1: it back to a place where you can feel very 265 00:12:38,640 --> 00:12:40,400 Speaker 1: comfortable with it. No, which is why I think that 266 00:12:40,440 --> 00:12:42,480 Speaker 1: you've got risks to the upside and risk of the downside. 267 00:12:42,520 --> 00:12:44,640 Speaker 1: Because you get really good news in this market wants 268 00:12:44,679 --> 00:12:46,200 Speaker 1: to take off, you get really bad news, and we 269 00:12:46,240 --> 00:12:48,160 Speaker 1: can say, you know, the multiple still expensive and it 270 00:12:48,200 --> 00:12:50,199 Speaker 1: can still come down a little bit. I think that 271 00:12:50,240 --> 00:12:53,079 Speaker 1: what we're looking for is a very choppy year, unfortunately, 272 00:12:53,360 --> 00:12:56,280 Speaker 1: and some hope that as you get through some of 273 00:12:56,320 --> 00:12:59,840 Speaker 1: these issues in terms of understanding what's going to happen, 274 00:13:00,080 --> 00:13:03,640 Speaker 1: people can start making decisions and that delayed economic activity 275 00:13:03,679 --> 00:13:05,400 Speaker 1: doesn't accelerate too much. 276 00:13:05,520 --> 00:13:07,520 Speaker 2: So in the meantime, we just want some way to hide. 277 00:13:07,559 --> 00:13:09,760 Speaker 2: Some people do anyway, some people more aggressive than that. 278 00:13:09,760 --> 00:13:11,040 Speaker 2: But if you want a tin hat and a rock 279 00:13:11,080 --> 00:13:13,320 Speaker 2: to hide under right now, it's not the treasury market. 280 00:13:13,480 --> 00:13:14,199 Speaker 3: What is it. 281 00:13:14,200 --> 00:13:15,360 Speaker 7: It's not the treasury market. 282 00:13:15,480 --> 00:13:18,520 Speaker 1: It's some of the areas that have done fairly well 283 00:13:19,000 --> 00:13:22,040 Speaker 1: in general recessions. Those things like consumer staples, they got 284 00:13:22,080 --> 00:13:24,120 Speaker 1: really really cheap at the end of last year, and 285 00:13:24,200 --> 00:13:26,560 Speaker 1: everybody was looking for more exciting things and more growth, 286 00:13:26,640 --> 00:13:28,160 Speaker 1: and then you look at those multiples, you go, you 287 00:13:28,160 --> 00:13:30,200 Speaker 1: know what, that's not so scary. Some of the defense 288 00:13:30,240 --> 00:13:32,680 Speaker 1: stocks have gotten killed also, and so I think that 289 00:13:33,280 --> 00:13:36,040 Speaker 1: there's some opportunity there. There are some places, even something 290 00:13:36,080 --> 00:13:38,000 Speaker 1: like Walmart. Look at the big banks, there are places 291 00:13:38,000 --> 00:13:40,200 Speaker 1: where they can absorb it. I think the harder thing 292 00:13:40,280 --> 00:13:42,720 Speaker 1: is going to be for smaller and MidCap stocks, because 293 00:13:42,720 --> 00:13:44,920 Speaker 1: the uncertainty is very high right now, and I think 294 00:13:44,920 --> 00:13:46,200 Speaker 1: for them it's much more difficult. 295 00:13:46,240 --> 00:13:47,720 Speaker 8: I want to set on one point that you said 296 00:13:47,760 --> 00:13:50,720 Speaker 8: and make this full circle. The big banks coming into 297 00:13:50,720 --> 00:13:52,840 Speaker 8: this year, a lot of people were really excited about 298 00:13:52,880 --> 00:13:55,360 Speaker 8: them because of the growth in the economy that they 299 00:13:55,360 --> 00:13:58,600 Speaker 8: were expecting, as well as deregulation wave. That's something that 300 00:13:58,640 --> 00:14:01,240 Speaker 8: we heard from Jamie Diamond that the deregulation is going 301 00:14:01,280 --> 00:14:03,439 Speaker 8: to be a real positive. We also are seeing that 302 00:14:03,840 --> 00:14:07,160 Speaker 8: steeper yield curve that could also benefit these banks in 303 00:14:07,160 --> 00:14:09,080 Speaker 8: some ways. Are the banks that have in in good 304 00:14:09,080 --> 00:14:12,080 Speaker 8: times and that given how much they've built capital and 305 00:14:12,080 --> 00:14:15,199 Speaker 8: what a different position they're in now than pre pandemic. 306 00:14:15,320 --> 00:14:16,960 Speaker 1: I think that it's a much Yes, I think it's 307 00:14:17,000 --> 00:14:19,400 Speaker 1: a much different situation for them now. But I also 308 00:14:19,400 --> 00:14:21,600 Speaker 1: think if you look back when all the technology stocks 309 00:14:21,640 --> 00:14:24,600 Speaker 1: are outperforming, the banks are underperforming. So in good times 310 00:14:24,800 --> 00:14:27,040 Speaker 1: they tend to lag a little bit, and in bad times, 311 00:14:27,120 --> 00:14:29,080 Speaker 1: I think people go, oh, my goodness, there's a great 312 00:14:29,160 --> 00:14:31,640 Speaker 1: business model, and we're all looking at cash those we're 313 00:14:31,640 --> 00:14:33,600 Speaker 1: all looking at balance sheets again, all of those things 314 00:14:33,640 --> 00:14:36,400 Speaker 1: become of utmost importance when you have this much volatility. 315 00:14:36,440 --> 00:14:38,960 Speaker 2: Can we finish on tech? What becomes of Apple if 316 00:14:39,000 --> 00:14:41,640 Speaker 2: we don't get an exemption for that name? What happens 317 00:14:41,640 --> 00:14:42,640 Speaker 2: to some of these companies. 318 00:14:44,160 --> 00:14:46,480 Speaker 1: I don't necessarily want to speculate on what happens to 319 00:14:46,480 --> 00:14:47,920 Speaker 1: Apple if it doesn't get an exemption. 320 00:14:48,080 --> 00:14:49,880 Speaker 2: I think that is it not bad that you couldn't 321 00:14:49,880 --> 00:14:51,560 Speaker 2: possibly even speculate, Well. 322 00:14:51,440 --> 00:14:53,480 Speaker 1: I mean you can sure, you can speculate, and you 323 00:14:53,520 --> 00:14:55,480 Speaker 1: can say, well, ninety percent of their phones are coming 324 00:14:55,520 --> 00:14:57,840 Speaker 1: from here, then we lose x amount. I think the 325 00:14:58,400 --> 00:15:01,000 Speaker 1: problem is it is such and I mean this goes 326 00:15:01,000 --> 00:15:03,720 Speaker 1: back to those discussions in twenty eighteen and twenty nineteen 327 00:15:03,720 --> 00:15:06,440 Speaker 1: that the tech stocks are actually staples of themselves because 328 00:15:06,520 --> 00:15:06,840 Speaker 1: are you. 329 00:15:06,800 --> 00:15:08,080 Speaker 7: Going to live without an iPhone? 330 00:15:08,120 --> 00:15:09,880 Speaker 1: And how many people are going to say, Okay, now 331 00:15:09,880 --> 00:15:12,000 Speaker 1: I'll just go back to the method of financing it 332 00:15:12,040 --> 00:15:14,000 Speaker 1: that the phone companies used to do, and I won't 333 00:15:14,000 --> 00:15:16,080 Speaker 1: buy it outright, so that two thousand dollars doesn't become 334 00:15:16,280 --> 00:15:19,240 Speaker 1: as scary as twelve hundred dollars. They're expensive things to 335 00:15:19,280 --> 00:15:22,840 Speaker 1: start with, but I think that the ingrainedness of that 336 00:15:22,920 --> 00:15:25,680 Speaker 1: technology into our lives is difficult to separate. 337 00:15:25,960 --> 00:15:27,760 Speaker 7: So I don't know that for that. 338 00:15:27,800 --> 00:15:30,080 Speaker 1: Reason, it's as bad as it would be because it's 339 00:15:30,120 --> 00:15:32,600 Speaker 1: not a lot of speculative buyers of iPhones. 340 00:15:32,960 --> 00:15:45,360 Speaker 2: So Rahan, I appreciate it. Of Vutpant Saxon Woods. We 341 00:15:45,520 --> 00:15:48,360 Speaker 2: begin this out with stocks fluctuating. It's earning season kicks 342 00:15:48,360 --> 00:15:51,000 Speaker 2: into full gear, so Vita suplimanning. But Bank for America 343 00:15:51,040 --> 00:15:54,600 Speaker 2: writing first quarter beats animisses may not move the needle 344 00:15:54,640 --> 00:15:57,480 Speaker 2: as much as in recent quarters. There is a reasonable 345 00:15:57,520 --> 00:16:03,600 Speaker 2: probability the absence some resolution or clarity transparency could be compromised. 346 00:16:03,720 --> 00:16:05,600 Speaker 2: Savita joined us now for more Cevita, good. 347 00:16:05,480 --> 00:16:06,520 Speaker 7: Morning, Good morning. 348 00:16:06,640 --> 00:16:08,560 Speaker 2: Reflected on the bank earning so far and so far, 349 00:16:08,680 --> 00:16:10,680 Speaker 2: so good. And there's a line that you used over 350 00:16:10,680 --> 00:16:13,800 Speaker 2: the last week that it's dangerous to underestimate companies on 351 00:16:13,840 --> 00:16:15,920 Speaker 2: the S and P five hundred now dangerous is it 352 00:16:16,000 --> 00:16:16,800 Speaker 2: really well. 353 00:16:16,880 --> 00:16:20,960 Speaker 9: I think that my mantra is own cash and stocks, 354 00:16:21,280 --> 00:16:25,520 Speaker 9: sell bonds, because if we're in this environment of inflation 355 00:16:26,040 --> 00:16:28,880 Speaker 9: of you know, even lower growth, I think that's a 356 00:16:29,040 --> 00:16:34,400 Speaker 9: terrible environment for asset classes that have no optionality. When 357 00:16:34,440 --> 00:16:37,320 Speaker 9: you think about stocks, they have lots of options. Companies 358 00:16:37,440 --> 00:16:40,800 Speaker 9: can pull forward cash return, they can you know, they 359 00:16:40,840 --> 00:16:44,440 Speaker 9: have creative accounting mechanisms. So there's a lot of optionality 360 00:16:44,480 --> 00:16:47,680 Speaker 9: that companies have that the bond market doesn't. When I 361 00:16:47,680 --> 00:16:51,720 Speaker 9: think about earnings, this this upcoming quarter, you know, who 362 00:16:51,760 --> 00:16:54,640 Speaker 9: cares what happened in Q one? I think the focus 363 00:16:54,720 --> 00:16:56,920 Speaker 9: is going to be on guidance or lack thereof. 364 00:16:57,160 --> 00:16:58,280 Speaker 7: So what worries me. 365 00:16:58,320 --> 00:17:01,320 Speaker 9: Is that a lot of companies intimated that they you know, 366 00:17:01,360 --> 00:17:03,800 Speaker 9: they have to pull guidance, and we saw this in 367 00:17:03,800 --> 00:17:05,360 Speaker 9: twenty twenty with COVID. 368 00:17:06,440 --> 00:17:07,160 Speaker 7: It's not great. 369 00:17:07,320 --> 00:17:09,840 Speaker 9: So what we found is that companies that pull guidance, 370 00:17:09,840 --> 00:17:13,560 Speaker 9: that used to issue guidance typically under perform on average 371 00:17:13,600 --> 00:17:17,160 Speaker 9: by about three percent until they actually start start giving 372 00:17:17,240 --> 00:17:21,200 Speaker 9: us guidance. So it's understandable that these corporates can't give 373 00:17:21,280 --> 00:17:23,320 Speaker 9: us guidance. Who knows, I mean, it's a it's a 374 00:17:23,400 --> 00:17:27,359 Speaker 9: very uncertain environment. But that transparency that we used to 375 00:17:27,440 --> 00:17:31,040 Speaker 9: have in the s and P. Five hundred has been compromised, 376 00:17:31,040 --> 00:17:32,720 Speaker 9: and I think that's the key risk. 377 00:17:32,800 --> 00:17:34,480 Speaker 2: Can we talk about the playbook for you and the team. 378 00:17:34,480 --> 00:17:36,560 Speaker 2: Have you spent some time on the stagflash playbook. 379 00:17:36,800 --> 00:17:37,080 Speaker 5: We have. 380 00:17:37,200 --> 00:17:39,280 Speaker 9: We've spent a lot of time on that playbook. We've 381 00:17:39,280 --> 00:17:41,760 Speaker 9: spent a lot of time on the tech bubble, you know, 382 00:17:41,840 --> 00:17:45,200 Speaker 9: de Rating Playbook two thousand and eight, and I think 383 00:17:45,280 --> 00:17:49,320 Speaker 9: this environment rhymes with all of those. During a stagflationary environment, 384 00:17:50,000 --> 00:17:52,399 Speaker 9: you want it to be in stocks over bonds. You 385 00:17:52,440 --> 00:17:54,600 Speaker 9: want it to be in value overgrowth. 386 00:17:54,920 --> 00:17:55,600 Speaker 7: So you wanted to. 387 00:17:55,600 --> 00:18:00,400 Speaker 9: Basically buy cash and cash yield and that's where cap 388 00:18:00,520 --> 00:18:03,000 Speaker 9: value comes in. And that's still you know, I still 389 00:18:03,040 --> 00:18:08,080 Speaker 9: see this as a very unusually attractive size and style 390 00:18:08,119 --> 00:18:10,800 Speaker 9: box in the s and P. Five hundred, nobody talks 391 00:18:10,800 --> 00:18:13,320 Speaker 9: about large cap value anymore because it hasn't worked for 392 00:18:13,359 --> 00:18:14,320 Speaker 9: such a long time. 393 00:18:14,600 --> 00:18:17,440 Speaker 5: But if you think about these companies, these are you know. 394 00:18:17,400 --> 00:18:22,120 Speaker 9: Kind of big companies that have rationalized capacity, are focused 395 00:18:22,119 --> 00:18:26,000 Speaker 9: on returning cash. You know, energy companies have transformed their 396 00:18:26,040 --> 00:18:31,680 Speaker 9: philosophy from drilling and capex to cash return above everything else, 397 00:18:32,240 --> 00:18:34,760 Speaker 9: and these are companies that actually benefit from a little 398 00:18:34,800 --> 00:18:36,879 Speaker 9: bit of inflation, which we're likely to get if we 399 00:18:36,920 --> 00:18:37,920 Speaker 9: see these tariffs go. 400 00:18:37,920 --> 00:18:39,840 Speaker 7: Through in any way, shape or form. 401 00:18:40,160 --> 00:18:41,880 Speaker 8: Well, how much you look at companies that are really 402 00:18:41,880 --> 00:18:44,600 Speaker 8: domestically based too, and not necessarily international. 403 00:18:44,800 --> 00:18:46,880 Speaker 9: Yeah, so this is the tricky part because a lot 404 00:18:46,880 --> 00:18:51,240 Speaker 9: of companies that are domestically based are the buyers or 405 00:18:51,320 --> 00:18:55,680 Speaker 9: suppliers or in some way maybe more vulnerable than the 406 00:18:55,760 --> 00:18:59,480 Speaker 9: multinational companies that actually have the foreign exposure. So I 407 00:18:59,480 --> 00:19:02,080 Speaker 9: think that's where you really want to dig down and 408 00:19:02,160 --> 00:19:06,159 Speaker 9: see what their externalities are, what their dependencies are, and 409 00:19:06,240 --> 00:19:08,920 Speaker 9: if that's on. If you've got a domestic company that's 410 00:19:08,960 --> 00:19:12,439 Speaker 9: dependent on a big MNC, you know it's not a 411 00:19:12,440 --> 00:19:14,840 Speaker 9: great situation. This is why I don't think small caps 412 00:19:14,840 --> 00:19:17,800 Speaker 9: are really the safe haven in this type of environment. 413 00:19:18,160 --> 00:19:20,040 Speaker 9: I think what's interesting, though, is if you look at 414 00:19:20,040 --> 00:19:24,080 Speaker 9: the multinationals, they may have more options than we think. 415 00:19:24,240 --> 00:19:25,240 Speaker 7: So I think. 416 00:19:25,200 --> 00:19:29,959 Speaker 9: Tech aside other companies in the US have shown a 417 00:19:30,000 --> 00:19:34,399 Speaker 9: lot of resilience during periods of macro volatility. So you 418 00:19:34,520 --> 00:19:37,840 Speaker 9: think about what we've experienced over the last four or 419 00:19:37,840 --> 00:19:41,920 Speaker 9: five years, We've had inflation go from negative to nine 420 00:19:42,000 --> 00:19:46,040 Speaker 9: percent to three wherever we are now, and that could 421 00:19:46,080 --> 00:19:50,120 Speaker 9: go higher. But during that period, US corporates actually saw 422 00:19:50,640 --> 00:19:53,920 Speaker 9: very little in terms of margin risk. So I think 423 00:19:53,960 --> 00:19:56,719 Speaker 9: that's the lesson that we have today is the idea 424 00:19:56,760 --> 00:19:59,600 Speaker 9: that we could actually see margins hold up better than 425 00:19:59,640 --> 00:20:00,199 Speaker 9: expect did. 426 00:20:00,440 --> 00:20:03,240 Speaker 8: A week ago, you downgraded your expectation from the sixty 427 00:20:03,240 --> 00:20:05,760 Speaker 8: six hundred range to fifty six hundred, which is still 428 00:20:05,760 --> 00:20:07,760 Speaker 8: an upside from where we are today. And I just 429 00:20:07,880 --> 00:20:10,600 Speaker 8: wonder what leads that if it's not going to be 430 00:20:10,640 --> 00:20:13,520 Speaker 8: big tech, and if potentially you have bond yields that 431 00:20:13,560 --> 00:20:17,879 Speaker 8: are not going to be cooperative into potentially a stagflationary 432 00:20:18,040 --> 00:20:19,080 Speaker 8: type of environment. 433 00:20:19,280 --> 00:20:21,800 Speaker 9: Yeah, I think large cap value gets us there. I 434 00:20:21,800 --> 00:20:24,520 Speaker 9: think you without participation of tech, without I mean tech 435 00:20:24,600 --> 00:20:27,639 Speaker 9: could flatline tech could even go down as it has already, 436 00:20:27,720 --> 00:20:30,120 Speaker 9: and we could see the market end a little bit higher. 437 00:20:30,160 --> 00:20:33,240 Speaker 9: And I think the idea is where we haircut or 438 00:20:33,359 --> 00:20:37,399 Speaker 9: target is not necessarily the equity risk premium, but really 439 00:20:37,440 --> 00:20:40,359 Speaker 9: the risk free rate. And if you think about it, 440 00:20:40,400 --> 00:20:42,639 Speaker 9: the risk free rate is a ten year T bond 441 00:20:42,680 --> 00:20:46,040 Speaker 9: yield and that has all of a sudden taken a 442 00:20:46,119 --> 00:20:49,560 Speaker 9: step function higher in terms of its risk, I mean 443 00:20:49,680 --> 00:20:52,919 Speaker 9: foreign demand. We've got a buyer strike. There's still a 444 00:20:53,000 --> 00:20:58,840 Speaker 9: lot of US Treasury bonds owned by foreign foreign regions. 445 00:20:58,880 --> 00:21:01,240 Speaker 9: So I think that's the risk, is that you see 446 00:21:01,240 --> 00:21:04,159 Speaker 9: that risk free rate no longer be risk free, and 447 00:21:04,200 --> 00:21:06,320 Speaker 9: it's actually one of the riskiest areas in in the 448 00:21:06,640 --> 00:21:10,680 Speaker 9: capital market spectrum. That said, when you look at companies 449 00:21:10,720 --> 00:21:13,840 Speaker 9: that can benefit from rising rates and rising inflation, that 450 00:21:13,880 --> 00:21:17,400 Speaker 9: really firmly falls into that value bucket. It's energy, It's 451 00:21:17,440 --> 00:21:21,240 Speaker 9: even financials. Financial companies. Big financial companies have de levered 452 00:21:21,320 --> 00:21:23,680 Speaker 9: and are actually in a pretty good place right now 453 00:21:24,080 --> 00:21:27,280 Speaker 9: if we still want America to grow, and I think 454 00:21:27,320 --> 00:21:30,040 Speaker 9: that's that's part of the policy mantras. 455 00:21:30,040 --> 00:21:31,320 Speaker 7: Make America grow again. 456 00:21:31,760 --> 00:21:35,320 Speaker 9: Who's gonna lend money to these companies, probably some of 457 00:21:35,320 --> 00:21:36,840 Speaker 9: the larger US banks. 458 00:21:36,880 --> 00:21:38,200 Speaker 7: I think that's the next leg. 459 00:21:39,160 --> 00:21:41,000 Speaker 9: Energy is a great place to be if you're in 460 00:21:41,000 --> 00:21:45,280 Speaker 9: a stagflationary setup absenter recession. I don't think we get 461 00:21:45,320 --> 00:21:47,880 Speaker 9: the FED to cut because I think you know, that 462 00:21:47,920 --> 00:21:52,560 Speaker 9: would require a meaningful down draft in inflation that they're 463 00:21:52,600 --> 00:21:54,840 Speaker 9: just not seeing. So we have the FED on hold 464 00:21:54,840 --> 00:21:57,200 Speaker 9: this year, and that's an environment where you still wanna 465 00:21:57,280 --> 00:22:02,000 Speaker 9: own cash, cash return, anything that's got that short duration, 466 00:22:03,000 --> 00:22:05,440 Speaker 9: you know, kind of characteristic when it. 467 00:22:05,359 --> 00:22:06,920 Speaker 6: Comes to trade in terwris. Do you think the risk 468 00:22:07,000 --> 00:22:09,639 Speaker 6: is that it hits earnings more or actual growth? 469 00:22:10,720 --> 00:22:11,720 Speaker 7: You know, it's a good question. 470 00:22:11,760 --> 00:22:14,560 Speaker 9: I think it hits growth in the near term because 471 00:22:14,560 --> 00:22:18,359 Speaker 9: it's very difficult to plan and do anything when you 472 00:22:18,480 --> 00:22:20,720 Speaker 9: don't know what the what the playing field is going 473 00:22:20,800 --> 00:22:24,680 Speaker 9: to look like. That said, companies have generally been able 474 00:22:24,760 --> 00:22:28,000 Speaker 9: to navigate periods of uncertainty, and I guess I would 475 00:22:28,080 --> 00:22:31,280 Speaker 9: highlight we're always in a period of uncertainty. I mean, today, 476 00:22:31,320 --> 00:22:33,400 Speaker 9: we know that Trump just came out. 477 00:22:33,400 --> 00:22:34,600 Speaker 7: President Trump came out. 478 00:22:34,480 --> 00:22:38,520 Speaker 9: With this this package that's potentially worse than expected. But 479 00:22:38,840 --> 00:22:42,360 Speaker 9: you know, the two years ago we could have had 480 00:22:42,359 --> 00:22:45,359 Speaker 9: the same type of uncertainty. We've had COVID, We've had 481 00:22:45,720 --> 00:22:50,480 Speaker 9: other types of shocks that corporates have handled. So I 482 00:22:50,480 --> 00:22:53,080 Speaker 9: guess I look at this and I think, okay, companies 483 00:22:53,080 --> 00:22:55,800 Speaker 9: are sitting there kind of waiting for clarity. But we 484 00:22:55,960 --> 00:22:58,960 Speaker 9: know that China is the culprit here. We know that 485 00:22:58,960 --> 00:23:01,800 Speaker 9: that's where the US as playing hardball. We've had a 486 00:23:01,840 --> 00:23:05,000 Speaker 9: stay of execution on other regions at least for ninety 487 00:23:05,080 --> 00:23:07,879 Speaker 9: days or you know, we'll see, But I think that 488 00:23:07,960 --> 00:23:10,640 Speaker 9: at least we know kind of a little bit more 489 00:23:10,640 --> 00:23:13,360 Speaker 9: than we knew prior to Liberation Day. 490 00:23:13,520 --> 00:23:15,480 Speaker 2: We played this guy back in twenty eighteen, and it 491 00:23:15,520 --> 00:23:17,879 Speaker 2: was far worst for equacies, far worst for credit, and 492 00:23:17,920 --> 00:23:20,080 Speaker 2: the tarifs were nowhere near as high as they are 493 00:23:20,160 --> 00:23:23,720 Speaker 2: right now. How instructive is the twenty eighteen example for you, Well, 494 00:23:23,800 --> 00:23:24,679 Speaker 2: twenty eighteen. 495 00:23:24,440 --> 00:23:27,800 Speaker 9: I think was interesting because companies were pretty good about 496 00:23:27,840 --> 00:23:31,040 Speaker 9: being able to shift their sourcing models. So what worried 497 00:23:31,160 --> 00:23:33,679 Speaker 9: us after April second was that it wasn't like you 498 00:23:33,680 --> 00:23:36,040 Speaker 9: could shift your sourcing model somewhere else. It was like 499 00:23:36,160 --> 00:23:37,919 Speaker 9: everything was under siege. 500 00:23:38,200 --> 00:23:39,120 Speaker 7: Today, I think. 501 00:23:39,000 --> 00:23:41,520 Speaker 9: That's a little bit mollified by the fact that we've 502 00:23:41,560 --> 00:23:46,800 Speaker 9: seen this potential for negotiations outside of China, So I. 503 00:23:46,720 --> 00:23:48,240 Speaker 7: Think that's a positive. 504 00:23:48,320 --> 00:23:51,399 Speaker 9: But when you think about the tariff setup back in 505 00:23:51,440 --> 00:23:55,600 Speaker 9: twenty eighteen, even before that, companies had been pretty aggressively 506 00:23:56,160 --> 00:23:59,439 Speaker 9: shifting sourcing out of China to other regions of the world. 507 00:23:59,480 --> 00:24:02,399 Speaker 9: So I think that's the other kind of takeaway is 508 00:24:02,400 --> 00:24:04,680 Speaker 9: that half the economic activity that we used to do 509 00:24:05,320 --> 00:24:08,720 Speaker 9: with China has been shifted to other parts of the world. 510 00:24:08,800 --> 00:24:10,719 Speaker 2: Is it just too difficult to internalize some of these 511 00:24:10,800 --> 00:24:12,920 Speaker 2: numbers being thrown around. Are they just so large that 512 00:24:12,960 --> 00:24:14,120 Speaker 2: people don't think they're going to happen. 513 00:24:14,200 --> 00:24:16,640 Speaker 9: Well, yeah, I mean I think that, you know, going 514 00:24:16,680 --> 00:24:20,879 Speaker 9: above one hundred percent on tariffs, like our unitary elasticity 515 00:24:20,960 --> 00:24:24,400 Speaker 9: model breaks down. I mean, you know, it's very difficult 516 00:24:24,400 --> 00:24:26,359 Speaker 9: to model that in. But I think the idea is 517 00:24:27,119 --> 00:24:30,560 Speaker 9: that's the region where we're really going to see trade limited. 518 00:24:31,080 --> 00:24:33,080 Speaker 7: But the good news is we've already. 519 00:24:32,680 --> 00:24:37,200 Speaker 9: Been in an environment where companies have been reshuffling away 520 00:24:37,240 --> 00:24:39,160 Speaker 9: from China to other regions of the world. 521 00:24:39,280 --> 00:24:42,200 Speaker 2: Just feels like mutually a shured destruction. People see them 522 00:24:42,200 --> 00:24:43,719 Speaker 2: going on. They don't think they're going to last very 523 00:24:43,760 --> 00:24:44,800 Speaker 2: long because they're just. 524 00:24:44,800 --> 00:24:47,560 Speaker 6: Too high and it can't work. It's full decoupling. You 525 00:24:47,640 --> 00:24:49,679 Speaker 6: have to ask the question, though, is it also de risking? 526 00:24:49,880 --> 00:24:51,119 Speaker 6: Is the United States going to make sure that they 527 00:24:51,119 --> 00:24:53,840 Speaker 6: don't get things like high end chips. One thing I'll 528 00:24:53,880 --> 00:24:55,639 Speaker 6: say about these numbers is we know Trump likes to 529 00:24:55,640 --> 00:24:56,120 Speaker 6: start from. 530 00:24:56,000 --> 00:24:57,080 Speaker 7: A maximalist approach. 531 00:24:57,440 --> 00:24:59,960 Speaker 6: Well, they're above what he promised on the campaign train, 532 00:25:00,320 --> 00:25:02,439 Speaker 6: which was ten percent around the United States. And up 533 00:25:02,440 --> 00:25:04,720 Speaker 6: to sixty percent on China. So I think if you're 534 00:25:04,760 --> 00:25:06,840 Speaker 6: looking at this play play out and it is going 535 00:25:06,840 --> 00:25:09,240 Speaker 6: to be art of the deal, then maybe that's where 536 00:25:09,240 --> 00:25:09,719 Speaker 6: we end up. 537 00:25:09,720 --> 00:25:11,840 Speaker 2: What he promised one forty five and going up. At 538 00:25:11,840 --> 00:25:13,680 Speaker 2: the moment, I'm not sure they've stuff. Savitrio's good to 539 00:25:13,680 --> 00:25:16,600 Speaker 2: see it, Thanks for coming, Thanks for being here, Savita Supermanium. 540 00:25:16,640 --> 00:25:28,800 Speaker 2: There of Bank of America on the sancruity market joining 541 00:25:28,840 --> 00:25:31,600 Speaker 2: us now around the table twenty percent of Pimco. Tony, 542 00:25:31,640 --> 00:25:33,560 Speaker 2: good to see you. It's been a while, Thanks for 543 00:25:33,640 --> 00:25:35,840 Speaker 2: dropping by. I just got one question. Help percent answer? 544 00:25:35,880 --> 00:25:38,600 Speaker 2: This has Japan been dump in US treasuries and how 545 00:25:38,640 --> 00:25:39,040 Speaker 2: would we know? 546 00:25:40,280 --> 00:25:41,080 Speaker 3: Are in the data? 547 00:25:41,280 --> 00:25:41,320 Speaker 1: No? 548 00:25:41,880 --> 00:25:45,280 Speaker 10: Slowly And people talk about China's selling, that they'll start selling, 549 00:25:45,320 --> 00:25:47,880 Speaker 10: but they've been selling since February twenty twenty two when 550 00:25:48,600 --> 00:25:51,240 Speaker 10: Russia invaded Ukraine. They had at that time one point 551 00:25:51,359 --> 00:25:54,440 Speaker 10: one five trillion of US treasuries. Now they have seven 552 00:25:54,520 --> 00:25:57,200 Speaker 10: hundred and fifty billions, so almost four hundred billion has. 553 00:25:57,119 --> 00:25:57,960 Speaker 3: Been sold so far. 554 00:25:58,520 --> 00:26:00,239 Speaker 10: So this idea that China will sell them have an 555 00:26:00,240 --> 00:26:02,399 Speaker 10: impact on the market, well, that's kind of looking in 556 00:26:02,480 --> 00:26:05,080 Speaker 10: the rearview mirror There could be more of that, for sure, 557 00:26:05,600 --> 00:26:09,440 Speaker 10: and it's geopolitically driven, but it's not the determinant of 558 00:26:09,640 --> 00:26:10,280 Speaker 10: yields right now. 559 00:26:10,480 --> 00:26:13,280 Speaker 8: So what is the determinant what's going on right now? 560 00:26:14,480 --> 00:26:16,600 Speaker 10: I think the nervousness you see in the value of 561 00:26:16,600 --> 00:26:19,960 Speaker 10: the US dollar and the concerns and markets reflects this 562 00:26:20,200 --> 00:26:21,960 Speaker 10: a big concept. And I'm going to talk about it 563 00:26:22,000 --> 00:26:23,240 Speaker 10: because I wrote a book on it. It was a 564 00:26:23,280 --> 00:26:25,720 Speaker 10: decade ago and Tom Keene I heard on the radio 565 00:26:25,840 --> 00:26:28,240 Speaker 10: this morning talking about how the Greek yield to a 566 00:26:28,359 --> 00:26:31,120 Speaker 10: thirty year bonds is lower than the US thirty year bond. 567 00:26:31,320 --> 00:26:32,399 Speaker 2: Please tell them hasn't changed? 568 00:26:33,240 --> 00:26:34,480 Speaker 3: And so what that tells us jo? 569 00:26:34,560 --> 00:26:36,920 Speaker 10: And of course has something's different in terms of the 570 00:26:37,000 --> 00:26:39,640 Speaker 10: assessment of credit now. A decade ago when I wrote 571 00:26:39,640 --> 00:26:41,960 Speaker 10: a book, it's called the Kynesian endpoint, the idea that 572 00:26:42,600 --> 00:26:46,080 Speaker 10: our nations can reach practical limits to their indebtedness. Greece 573 00:26:46,200 --> 00:26:48,600 Speaker 10: reached a Keynesian endpoint, could no longer borrow from the 574 00:26:48,640 --> 00:26:52,200 Speaker 10: financial markets because of its credit problems. The UK, under 575 00:26:52,280 --> 00:26:55,560 Speaker 10: this trust twenty twenty two reached a Keynesian endpoint, and 576 00:26:55,600 --> 00:26:58,760 Speaker 10: ever since, Rachel Reeves, the Chancellor of each checker or 577 00:26:58,760 --> 00:27:03,000 Speaker 10: the Treasury Secretary has put the UK in austerity. So 578 00:27:03,080 --> 00:27:06,000 Speaker 10: the US is seeing stress relates the idea of reaching 579 00:27:06,080 --> 00:27:09,119 Speaker 10: practical limits to indebtedness, and it needs the world to 580 00:27:09,320 --> 00:27:12,480 Speaker 10: keep have confidence in the US to fund the high 581 00:27:12,560 --> 00:27:14,240 Speaker 10: level of a deadness that we have. So that's one 582 00:27:14,280 --> 00:27:16,760 Speaker 10: of the major concepts to be thinking about in terms 583 00:27:16,760 --> 00:27:18,960 Speaker 10: of the stress in markets. 584 00:27:19,080 --> 00:27:21,680 Speaker 8: So are you saying that what we have seen this 585 00:27:21,920 --> 00:27:25,159 Speaker 8: week is Donald Trump's Liz Trust moment for the United States? 586 00:27:25,480 --> 00:27:28,400 Speaker 3: I'd rather call it a read my lips moment. 587 00:27:28,800 --> 00:27:32,640 Speaker 10: George Bush nineteen eighty eight convention speech, written by Peggy Newton, 588 00:27:32,720 --> 00:27:36,200 Speaker 10: famous for writing speeches for Ronald Reagan, said the biggest 589 00:27:36,200 --> 00:27:39,160 Speaker 10: takeaway is when he said, read my lips, no new taxes. 590 00:27:39,359 --> 00:27:42,159 Speaker 10: Two years later, as president, he raised taxes because the 591 00:27:42,280 --> 00:27:45,520 Speaker 10: interest on the debt reached the record level three point 592 00:27:45,600 --> 00:27:48,040 Speaker 10: two percent that stands today, that'll be broken next year. 593 00:27:48,320 --> 00:27:50,359 Speaker 10: I say it's a read my lips moment because George 594 00:27:50,400 --> 00:27:53,000 Speaker 10: Bush had to do something that was anathema to the party, 595 00:27:53,720 --> 00:27:57,399 Speaker 10: make a politically difficult decision to raise taxes. So today 596 00:27:57,600 --> 00:28:02,920 Speaker 10: we see with societal upheaval, stress related to difficult choices 597 00:28:03,000 --> 00:28:05,120 Speaker 10: that we have to make because of the high level 598 00:28:05,160 --> 00:28:07,000 Speaker 10: of in deadness, and so we'll have more of these 599 00:28:07,200 --> 00:28:10,440 Speaker 10: read my lips moments ahead stress regarding how much to 600 00:28:10,560 --> 00:28:14,560 Speaker 10: raise taxes, cut taxes, spending, etc. So lots of difficult 601 00:28:14,600 --> 00:28:17,960 Speaker 10: decisions that have to be guided and managed very carefully 602 00:28:18,040 --> 00:28:22,280 Speaker 10: and communicated well so the markets understand where we're headed, Tony, 603 00:28:22,320 --> 00:28:22,520 Speaker 10: how do. 604 00:28:22,560 --> 00:28:24,280 Speaker 6: We get from a read my lips moment though, to 605 00:28:24,320 --> 00:28:25,200 Speaker 6: a list trust moment? 606 00:28:26,240 --> 00:28:29,359 Speaker 10: If there's complete ignorance of what the bond market is 607 00:28:29,480 --> 00:28:32,080 Speaker 10: concerned about, I would think that you would have that moment, 608 00:28:32,280 --> 00:28:36,520 Speaker 10: But so far you see some relenting to the bond market, 609 00:28:36,720 --> 00:28:39,240 Speaker 10: and the James Carvill like remember he said, of course 610 00:28:39,600 --> 00:28:41,960 Speaker 10: he liked to be reincarnated as a bonabista because he 611 00:28:42,040 --> 00:28:47,160 Speaker 10: can intimidate anyone, if anyone, If the policymakers decide to 612 00:28:47,400 --> 00:28:49,800 Speaker 10: say no to the bond market in the sense of 613 00:28:50,120 --> 00:28:52,800 Speaker 10: allowing inflation to write so the Federal Reserve could permit, it, 614 00:28:53,320 --> 00:28:54,400 Speaker 10: could create that moment. 615 00:28:54,560 --> 00:28:54,960 Speaker 3: But it's not. 616 00:28:55,200 --> 00:28:57,880 Speaker 10: And that's why you see Fed Chair Powell being very 617 00:28:58,040 --> 00:29:01,959 Speaker 10: slow and gradual and prudent about rate cuts because it's 618 00:29:02,040 --> 00:29:04,360 Speaker 10: the right thing to do, because high inflation would be 619 00:29:04,480 --> 00:29:07,680 Speaker 10: saying something very negative to the bond markets. So I 620 00:29:07,760 --> 00:29:11,960 Speaker 10: think as if we go on at physically irresponsible path, 621 00:29:12,840 --> 00:29:15,280 Speaker 10: you see the bond market pushing back, and what. 622 00:29:15,280 --> 00:29:15,880 Speaker 3: I would expect. 623 00:29:15,920 --> 00:29:18,640 Speaker 10: Then the final word is a hall of mirrors effect 624 00:29:18,960 --> 00:29:24,080 Speaker 10: where not only are investors looking at policymakers, but policymakers 625 00:29:24,120 --> 00:29:26,600 Speaker 10: are looking at markets because they matter a great deal 626 00:29:26,680 --> 00:29:28,440 Speaker 10: now with the high level of debt that the US has, 627 00:29:28,560 --> 00:29:29,240 Speaker 10: aren't we there. 628 00:29:29,120 --> 00:29:32,400 Speaker 6: Right now policymakers looking at markets. Donald Trump even talked 629 00:29:32,440 --> 00:29:35,160 Speaker 6: about that the bond market was a bit queasy overnight. 630 00:29:35,560 --> 00:29:38,240 Speaker 10: It happened now, But in a multi dimensional game of 631 00:29:38,360 --> 00:29:40,560 Speaker 10: chess that you know Donald Trump plays, if you think 632 00:29:40,720 --> 00:29:42,880 Speaker 10: he's thinking that, then you've got to think something else. 633 00:29:42,920 --> 00:29:46,520 Speaker 10: Perhaps who knows. So it may be the case that 634 00:29:46,960 --> 00:29:49,440 Speaker 10: policymakers are looking. And the big signal this week from 635 00:29:49,480 --> 00:29:54,760 Speaker 10: policymakers in Washington and Trump's team of rivals is the ascension, 636 00:29:54,840 --> 00:29:58,360 Speaker 10: if you will, of Scott Bessant, the Treasury Secretary, speaking 637 00:29:58,440 --> 00:30:02,160 Speaker 10: more in a fashion in ways that we're used to rubenesque. 638 00:30:02,280 --> 00:30:05,000 Speaker 10: You could say, as we saw under Bill Clinton and 639 00:30:05,160 --> 00:30:06,600 Speaker 10: Robert Rubin's Treasury secretary. 640 00:30:06,880 --> 00:30:09,479 Speaker 8: We were speaking with Greg Peters of PGM Fixed Income earlier, 641 00:30:09,720 --> 00:30:11,520 Speaker 8: and he said that this week really has been a 642 00:30:11,560 --> 00:30:13,640 Speaker 8: game changer for him, that he can't put this back 643 00:30:13,680 --> 00:30:16,440 Speaker 8: in the bottle, you can't unsay certain things, and that 644 00:30:16,560 --> 00:30:19,960 Speaker 8: this really is making him rethink the role of treasuries 645 00:30:20,040 --> 00:30:22,760 Speaker 8: as a safe haven asset, given that if the goal 646 00:30:23,200 --> 00:30:25,959 Speaker 8: is to reduce trade, then essentially there will be less 647 00:30:26,120 --> 00:30:30,320 Speaker 8: dollars overseas to invest naturally in US treasuries. Are you 648 00:30:30,360 --> 00:30:31,480 Speaker 8: thinking about something similar? 649 00:30:31,680 --> 00:30:33,920 Speaker 10: Yeah, And I was looking this morning and anyone could 650 00:30:34,080 --> 00:30:37,880 Speaker 10: on the IMF website the cofer data co fort data. 651 00:30:38,000 --> 00:30:41,080 Speaker 10: It shows how much of the world's twelve trillion in 652 00:30:41,160 --> 00:30:44,640 Speaker 10: reserves put in the US dollar. The figures today fifty 653 00:30:44,680 --> 00:30:48,560 Speaker 10: eight percent. It's been in decline. The next closest nation 654 00:30:48,840 --> 00:30:52,120 Speaker 10: or set of nations is Europe at twenty percent. For 655 00:30:52,280 --> 00:30:55,800 Speaker 10: the Chinese currency. It has this fewer dollars of reserves 656 00:30:56,040 --> 00:30:59,000 Speaker 10: in its currency than in the Canadian dollar. And so 657 00:31:00,080 --> 00:31:02,760 Speaker 10: other point to make though that's just the background. If 658 00:31:02,800 --> 00:31:05,520 Speaker 10: you lined up friends and foes of the United States, 659 00:31:05,560 --> 00:31:07,680 Speaker 10: and I don't need to put anyone in the foes category, 660 00:31:07,760 --> 00:31:10,480 Speaker 10: but just deemed or perceived as foes, you see that 661 00:31:10,520 --> 00:31:13,640 Speaker 10: the nations that are friends would have still have about 662 00:31:13,800 --> 00:31:16,920 Speaker 10: six account for about sixty percent of world reserve assets. 663 00:31:16,920 --> 00:31:19,240 Speaker 10: So if each of the friends and foes went to 664 00:31:19,360 --> 00:31:23,400 Speaker 10: their respective corners, you expect that the amount of money 665 00:31:23,480 --> 00:31:26,080 Speaker 10: held in dollars would still be roughly the same, close 666 00:31:26,120 --> 00:31:28,440 Speaker 10: to six percent, if it went to the extremes. 667 00:31:29,200 --> 00:31:31,680 Speaker 3: That's one major major point. The next one is liquidity. 668 00:31:31,720 --> 00:31:33,920 Speaker 10: Of course, the US bond market this week has seen, 669 00:31:33,960 --> 00:31:36,560 Speaker 10: according to the New York Fed, a seven hundred billion 670 00:31:36,720 --> 00:31:37,960 Speaker 10: or so of daily volume. 671 00:31:38,120 --> 00:31:39,640 Speaker 3: No market comes. 672 00:31:39,480 --> 00:31:39,960 Speaker 5: Close to that. 673 00:31:40,120 --> 00:31:42,240 Speaker 10: This isn't to say that over time we couldn't see 674 00:31:42,280 --> 00:31:45,920 Speaker 10: that fifty eight percent of money held in dollars decline, 675 00:31:45,960 --> 00:31:48,240 Speaker 10: and you have a plurality forty. 676 00:31:48,040 --> 00:31:51,320 Speaker 3: Nine percent in dollars, more in euros, more in the end, et. 677 00:31:51,280 --> 00:31:54,000 Speaker 10: Cetera, et cetera. It's possible, and it'll be gradual. I 678 00:31:54,520 --> 00:31:56,320 Speaker 10: weren't expected to be immediate at LISTA. 679 00:31:56,320 --> 00:31:57,920 Speaker 2: I'm praised you brought up bliz Trus for a bunch 680 00:31:57,960 --> 00:32:00,280 Speaker 2: of reasons, including this one. The former British Prime Minster 681 00:32:00,360 --> 00:32:03,040 Speaker 2: eventually left, had to reverse policy, made a scapegoat of 682 00:32:03,080 --> 00:32:05,880 Speaker 2: a chancellor. It's a very different moment for this moment 683 00:32:06,000 --> 00:32:09,080 Speaker 2: in the United States. I don't see that happening anytime soon. 684 00:32:09,240 --> 00:32:12,640 Speaker 8: Well, I don't foresee President Trump stepping down. It's unclear 685 00:32:12,680 --> 00:32:14,960 Speaker 8: who he can escape goat. This was what he promised, 686 00:32:15,160 --> 00:32:17,160 Speaker 8: promise has made, promise is kept. And there are a 687 00:32:17,160 --> 00:32:19,200 Speaker 8: lot of people who say ultimately that the goal is 688 00:32:19,280 --> 00:32:21,960 Speaker 8: the right one. But you raise a great point, what's 689 00:32:22,000 --> 00:32:24,120 Speaker 8: the off ramp? How much do you say that what 690 00:32:24,240 --> 00:32:26,480 Speaker 8: we are seeing right now is a structural change that 691 00:32:26,640 --> 00:32:29,400 Speaker 8: is going to last where you cannot get these relationships 692 00:32:29,440 --> 00:32:30,400 Speaker 8: back in the same kind of way. 693 00:32:30,480 --> 00:32:32,280 Speaker 2: Tony's good to see you, as always, Thanks for very 694 00:32:32,880 --> 00:32:36,280 Speaker 2: thank you, Tony for sensei there of PIMCO. This is 695 00:32:36,400 --> 00:32:41,760 Speaker 2: the Bloomberg Sevenants podcast, bringing you the best in markets, economics, angiopolitics. 696 00:32:42,040 --> 00:32:44,520 Speaker 2: You can watch the show live on Bloomberg TV weekday 697 00:32:44,560 --> 00:32:47,760 Speaker 2: mornings from six am to nine am Eastern. Subscribe to 698 00:32:47,800 --> 00:32:51,000 Speaker 2: the podcast on Apple, Spotify or anywhere else you listen, 699 00:32:51,320 --> 00:32:53,880 Speaker 2: and as always, on the Bloomberg Terminal and the Bloomberg 700 00:32:53,960 --> 00:32:54,520 Speaker 2: Business app.