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Speaker 1: Welcome to the Bloomberg pm L podcast. I'm Pim Fox.

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Speaker 1: Along with my co host Lisa Abramowitz. Each day we

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Speaker 1: bring you the most important, noteworthy, and useful interviews for

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Speaker 1: you and your money, whether you're at the grocery store

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Speaker 1: or the trading floor. Find the Bloomberg pm L podcast

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Speaker 1: on iTunes, SoundCloud and at Bloomberg dot com. In the

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Speaker 1: past month, we have gotten some details about the White

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Speaker 1: House's potential budget, but what will this mean for the

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Speaker 1: US is credit rating. I want to bring in Sarah Carlson.

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Speaker 1: She's vice president and senior analyst for Moody's Investors Service

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Speaker 1: in London. And Sarah, you know, we haven't gotten that

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Speaker 1: many details, and perhaps on purpose, we've found out that, uh,

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Speaker 1: it will not be released in a more sort of

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Speaker 1: a fully baked proposal until it is more fully baked

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Speaker 1: and and it's already pastbuster with some of the members

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Speaker 1: of Congress. But Sarah, so far do you see anything

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Speaker 1: that could lead Moodies to downgrade the US from its

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Speaker 1: triple A rating currently? Well, so far, I mean it's

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Speaker 1: important to stress that the thing that's going to be

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Speaker 1: really important for the USS sovereign rating at Moodies is

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Speaker 1: really what the future path for entitlement spending looks like.

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Speaker 1: The kind of detail that we've got so far really

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Speaker 1: doesn't move the dial one way or another there, because

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Speaker 1: whatever spending cuts, the balance between spending cuts and spending

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Speaker 1: increases that we're seeing so far don't really create additional

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Speaker 1: fiscal space for the kind of rise in an entitlement

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Speaker 1: spending that we're expecting to see over the next five

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Speaker 1: ten years. Sarah, the number twenty rattles around in my

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Speaker 1: brain a lot, because I think we're are we at

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Speaker 1: the twenty trillion dollar mark in terms of federal debt? Uh?

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Speaker 1: In terms of federal debt, No, they're not. Um So,

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Speaker 1: I thought that was the US the US Treasury total

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Speaker 1: public debt outstanding. It could be publicly held debts, So

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Speaker 1: it's less than that because remember, the US is about

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Speaker 1: a trillion dollar economy, twenty trillion dollar economy and um,

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Speaker 1: so that would make the Deutch GDP ratio, which it's

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Speaker 1: not right because it actually is heading in the wrong direction. Right. So, Sarah,

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Speaker 1: what are you going to be looking at when we

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Speaker 1: do get more details about President Trump's budget proposal to

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Speaker 1: determine whether or not affects the credit worthiness of the

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Speaker 1: United States. Sure, I mean the big thing, as I said,

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Speaker 1: that that will really matter is what happens with the

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Speaker 1: future deficit trends and what that means for future debt trends.

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Speaker 1: The US does have the highest debt burden of all

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Speaker 1: of the Triple A rated economies. Now, it has some

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Speaker 1: other strengths that those other countries don't have, like the

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Speaker 1: role that the dollar place in the international financial system

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Speaker 1: by something. But as I say, that's really important to

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Speaker 1: see what's happening with the debt trajectory. And given the

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Speaker 1: role that entitlement spending plays in the overall federal budget.

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Speaker 1: Your mandatory outlays are just under two thirds of total

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Speaker 1: expenditure by the US, and entitlements are a huge component

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Speaker 1: of that. That's going to be really important and we'll

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Speaker 1: be absolutely key for the future rating trajectory. When I

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Speaker 1: was taking a look at the Congressional Budget Offices UH

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Speaker 1: forecast for where the deficit would go in the US,

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Speaker 1: one thing that caught my attention was the increasing provision

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Speaker 1: set aside for interest payments. How have you modeled for

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Speaker 1: the rise in benchmark yields in the US, and how

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Speaker 1: that might play into the credit worthiness of the country. Well,

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Speaker 1: our expectations for interest expenses are very similar to those

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Speaker 1: of the Congressional Budget Office. So in fiscal two thousand sixteen,

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Speaker 1: net interest expenses were around six point four percent. We're

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Speaker 1: expecting that to go no worth of eleven in fiscal okay,

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Speaker 1: So based on that, what's the underlying assumption for treasure yields? Uh,

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Speaker 1: There isn't an unther we it changes from year to year.

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Speaker 1: Doesn't have to have to have like a sense of

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Speaker 1: how much it could go up because I mean, for example,

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Speaker 1: if some of the more dramatic projections for say ten

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Speaker 1: year yields to go up to five percent in the

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Speaker 1: next two years, that would shoot up a lot more. No,

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Speaker 1: of course it would, um. But it also depends, for example,

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Speaker 1: on the maturity structure of the US that stocks. So

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Speaker 1: it's not quite so simple as just saying what is

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Speaker 1: the ten year treasury yield? But are the bottom line

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Speaker 1: for us is that our expectation is if you look

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Speaker 1: across the various maturities for US, that that you'll see UH,

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Speaker 1: net interest expenses as a percentage of total spending almost

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Speaker 1: double between now and is there a number there that

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Speaker 1: we can look at. I mean I was thinking, for example,

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Speaker 1: on the Treasury Direct website, you can get this for

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Speaker 1: each quarter, and we're talking about a hundred and eighty

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Speaker 1: eight billion dollars that's just for this fiscal year. UM.

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Speaker 1: I mean yeah, to give you a sense again of

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Speaker 1: what's expected for this year, the CBOs baseline assumption is

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Speaker 1: for seventy billion, rising almost a three hundred billion next year,

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Speaker 1: and so on and so forth. You're at just over

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Speaker 1: sixty billion. Sarah, real quick. In two thousand and eleven

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Speaker 1: SMP downgrade at the U S has Moody's reconsidered whether

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Speaker 1: they ought to do the same. Uh. The rating and

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Speaker 1: the out the stable outlook on the US is triple A. Uh,

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Speaker 1: you know, is what it is. UM. But as I say,

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Speaker 1: the thing that's really going to be important for US

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Speaker 1: going forward is what happens with entitlement spending. UM. Because

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Speaker 1: while there is a great deal of discussion about some

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Speaker 1: other budget items, uh, those things things like Medicare and

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Speaker 1: Social Security really dwarf all other expenditures that the US makes,

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Speaker 1: even dwarf military spending. Thanks very much, Sarah Carlson, Vice President,

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Speaker 1: Senior analyst at Moody's Investor Service giving us a little

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Speaker 1: bit of detail on the federal debt and the interest

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Speaker 1: payments that are going to eat up an even larger

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Speaker 1: portion of the federal budget. Here to help us sort

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Speaker 1: of decipher at least the Keystone XL pipeline is minal

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Speaker 1: vem bu Car. I want to thank you very much

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Speaker 1: for being here. And UM, I know I messed up

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Speaker 1: your name, but I'm sorry, but you are the Van Burker.

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Speaker 1: I beg your pardon. Who is really our best great

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Speaker 1: energy reporter for Bloomberg. I've reading your stuff all the time.

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Speaker 1: This approval by the by the President for the Keystone

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Speaker 1: excel is is this a done and dusted situation or

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Speaker 1: are we just going to spend a lot of time

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Speaker 1: paying lawyers now lots of lawyers. Um, it's not done

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Speaker 1: in dusted. It was expected that Trump would approve the pipeline. Um,

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Speaker 1: you know, he already kind of helped Dakota access UH

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Speaker 1: finish up their project, and we were expecting the federal approval.

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Speaker 1: But it's far from over. Um. Last time, the company

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Speaker 1: encountered a lot of problems in Nebraska and it's really

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Speaker 1: the state and local level that they're going to be

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Speaker 1: a lot of you know, protests and litigation going forward.

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Speaker 1: So this is TransCanada that was granted the permit to

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Speaker 1: work on the Keystone Pipeline project, correct, And so with

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Speaker 1: this uh particular project, what will the next step be

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Speaker 1: for TransCanada to move this closer to a reality? Right?

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Speaker 1: So they've applied for approval in Nebraska with the state's

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Speaker 1: Public Service Commission and that's kind of a lengthy process.

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Speaker 1: There are already opponents who have filed up locations to

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Speaker 1: intervene um and you know, turns into this long process

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Speaker 1: where the earliest they can actually get approval there is September. UM,

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Speaker 1: there's lots of public hearings. Uh, you know a lot

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Speaker 1: of stakeholders that have input, landowners, um, environmental groups. Well,

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Speaker 1: can you give us a read on how the people

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Speaker 1: in Nebraska who would be voting on this currently feel.

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Speaker 1: I mean, what's the sort of tea leaves? Where were

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Speaker 1: they pointing right now? Well, you know, last time around,

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Speaker 1: there were a lot of environmental groups that, you know,

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Speaker 1: just as they have with other pipeline projects, chimed in

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Speaker 1: about just opposing the use of fossil fuels and developing

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Speaker 1: more infrastructure for fossil fuels. But the other side of

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Speaker 1: it is the landowners. Um, you know, eminent domain is

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Speaker 1: actually an issue where these opponents and Republicans agree, uh

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Speaker 1: a few patches of common ground, and you know, the

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Speaker 1: land fight is just as much kind of in the

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Speaker 1: spotlight as the environmental stuff. Does the price of oil

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Speaker 1: at forty seven dollars a barrel change the dynamics of

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Speaker 1: this project from when it was first conceived, because as

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Speaker 1: I understand that the oil was supposed to come from

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Speaker 1: is supposed to come from Canada, from the oil sands

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Speaker 1: and make its way down to the refining infrastructure that

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Speaker 1: the United States has in order to then ship it,

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Speaker 1: sell it and make money. Is that something that has

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Speaker 1: been affected by the strothan oil prices? Right? I mean

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Speaker 1: that's a question that a lot of people are asking.

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Speaker 1: When the State Department back issued their environmental review, oil

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Speaker 1: was around a hundred dollars of barrel. It's about half

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Speaker 1: that now, you know, hovering around fifty. And people who

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Speaker 1: oppose the project will say that, you know, the dynamics

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Speaker 1: have changed, it's not economic anymore. Um. The company has

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Speaker 1: you know, said that, no, you still need this because

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Speaker 1: Canadian production is growing um. But the Canadian government is

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Speaker 1: also approving other pipeline expansions too, so it seems like

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Speaker 1: that bottleneck that you kind of have in Canada right

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Speaker 1: now is easing. How does this fit into the network

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Speaker 1: of pipelines that currently exist, because we have the Dakota

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Speaker 1: Access pie A plan, which was a separate project but

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Speaker 1: is connected. And I believe that a lot of that

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Speaker 1: confrontation had to do with Native Americans who were alleging

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Speaker 1: that the pipeline itself could harm the groundwater and some

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Speaker 1: sacred areas that are upstream from their water supply, right.

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Speaker 1: I mean the main patch there that got halted was

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Speaker 1: the pipe that was going to run under like Ohahi

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Speaker 1: and North Dakota, and that I mean, it's still there's

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Speaker 1: a case still in court. I mean, the pipeline is

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Speaker 1: basically close to being up and running, um and you know,

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Speaker 1: the courts haven't stopped that, so practically speaking, there's nothing

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Speaker 1: really getting in their way. But that was, Yeah, from

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Speaker 1: the tribal perspective, that was a big thing, um, the

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Speaker 1: issue of water, and that's definitely something that you'll see

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Speaker 1: play out with opposition to Keystone too. When you talk

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Speaker 1: about imminent domain how much land would have to be

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Speaker 1: seized from private owners to make way for this project.

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Speaker 1: You know, that's actually a good question. Um, the route

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Speaker 1: in Nebraska changed last time around, when you know, this

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Speaker 1: thing went on for seven years, um, and so we'll

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Speaker 1: we'll see kind of how that plays out after the

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Speaker 1: the process in the PSC in Nebraska plays out. After

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Speaker 1: getting that approval is when TransCanada would choose to invoke

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Speaker 1: eminent domain and that would launch, you know, a whole

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Speaker 1: new round of litigation, the effort on the part of

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Speaker 1: President Donald Trump in order to unleash the industrial prowess

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Speaker 1: of the United States. Are there regulations in uh in

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Speaker 1: place right now that you can say that the pipeline

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Speaker 1: owners particularly would like to see a removed I mean,

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Speaker 1: is there a process that that is that is under

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Speaker 1: threat as well? So, and this is something that we've

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Speaker 1: reported on a little bit already. But be sickly, you know,

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Speaker 1: on the federal level, for big projects like this, it

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Speaker 1: makes a difference. You know, you need State Department approval

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Speaker 1: for pipelines across the border. Um, you needed the Army

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Speaker 1: Corps approval for the federal land for Dakota access. But

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Speaker 1: when it comes to this big wave of pipeline opposition.

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Speaker 1: So much of how these projects get stuck is at

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Speaker 1: the state level, UM, at the local level. And while

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Speaker 1: Trump can green light these big projects, UM, he can

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Speaker 1: make all the promises that he wants to the oil

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Speaker 1: and gas industry, he really can't change the state hurdles.

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Speaker 1: That's not up to him. So there's no magic wand

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Speaker 1: that he can wait and make everything better. Well, do

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Speaker 1: you have a sense of how much economic benefit this

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Speaker 1: project could lend to the US? You know? Well, I mean,

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Speaker 1: because that's that's that's ultimately at the crops of President

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Speaker 1: Trump's whole point, right, which is, let's approve these projects

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Speaker 1: which are going to make which will make America great again,

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Speaker 1: bring back jobs, generate growth. So how much growth is

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Speaker 1: being estimated from from this pipeline project? I mean again

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Speaker 1: the you know what, I'm sorry, I hold that thought

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Speaker 1: for another discussion for right now. We turned to President

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Speaker 1: Donald Trump's meeting with the National Economic Council at the

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Speaker 1: White House. He's expected to address this early announcement recording

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Speaker 1: his approval for the Keystone Exile pipeline. As we were

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Speaker 1: just talking about, let's listen in I okay, you know,

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Speaker 1: it seems like, we're not getting the audio signal right now,

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Speaker 1: but we will throw to it as soon as we

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Speaker 1: get it. Um. But just to continue on that point,

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Speaker 1: I mean, he's talking about the Keystone Excel pipeline inline

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Speaker 1: with the Economic Council. Let's see if we've got some sound. Now,

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Speaker 1: presidential permit for the Keystone Xcel pipeline, Transcanata will finally

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Speaker 1: be allowed to complete this long overdue project with efficiency

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Speaker 1: and with speed. We're working out the final details as

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Speaker 1: we speak. It's going to be an incredible pipeline, greatest

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Speaker 1: technology known demand or a woman. And frankly, uh, we're

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Speaker 1: very proud of it. Russ Curling, President of trans Canada,

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Speaker 1: is right behind me, and I'm gonna have to say

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Speaker 1: a few words. I know, Russ, you've been waiting for

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Speaker 1: a long long time, and I hope you don't pay

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Speaker 1: your consultants anything because they had nothing to do with

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Speaker 1: you anything. In fact, you should ask for the hundreds

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Speaker 1: of millions of dollars backs that you pay them because

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Speaker 1: they didn't do a damn thing. Exfecating with no vote. Right,

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Speaker 1: it's a great day for American jobs and a historic

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Speaker 1: moment for North America and energy independence. This announcement is

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Speaker 1: part of a new year of American energy policy that

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Speaker 1: will lower cost for American families and very significantly reduce

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Speaker 1: our dependence on far and oil and create thousands of

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Speaker 1: jobs right here in America. And I also would like

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Speaker 1: to add, I think it's a lot safer to have

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Speaker 1: pipelines than to use other forms of transportation for your product.

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Speaker 1: When completed, the Keystone Exhale pipeline will span nine hundred

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Speaker 1: miles WOW and have the capacity to deliver more than

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Speaker 1: eight hundred thousand barrels of oil per day to the

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Speaker 1: Gulf Coast refinery at some big pipeline. The fact is

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Speaker 1: that this eight billion dollar investment in American energy was

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Speaker 1: delayed for so long. It demonstrates how our government has

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Speaker 1: too often failed at citizens and companies over the past

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Speaker 1: long period of time. Today we begin to make things

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Speaker 1: right and to do things right. Today we take one

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Speaker 1: more step in putting the job's, wages and economic security

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Speaker 1: of American citizens first, put America first. As the Keystone

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Speaker 1: Excel Pipeline now moves forward. This is just the first

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Speaker 1: of many energy and infrastructure projects that my administration will approve,

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Speaker 1: and we've already approved a couple of other big ones,

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Speaker 1: very very big ones which will be announcing. So in

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Speaker 1: order to help put Americans back to work, grow our

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Speaker 1: economy and rebuild our nation. And with that, I'd like

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Speaker 1: to invite Russ to say a few words. Russ is

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Speaker 1: a very highly respected man in the energy world. He's

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Speaker 1: president of trans Canada. And I know you're gonna do

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Speaker 1: a fantastic job for us and get it up and

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Speaker 1: hire plenty of American people. Thank you, ye, thank you

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Speaker 1: as president, and uh, this is a very very uh

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Speaker 1: important day for us for a company and so on

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Speaker 1: behalf and to build thousands of people that have worked

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Speaker 1: very hard to get here, as you pointed out, a

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Speaker 1: very long time to get here. But we're very relieved

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Speaker 1: and very much just want to get to work. Some

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Speaker 1: of those folks have with me today the building trades

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Speaker 1: with which was Sewan Garvey Um. Some of our our

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Speaker 1: destruction contracts from Quanta are types of flyers from from

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Speaker 1: well spun Um. There's thousands of people that are just

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Speaker 1: ready an itching tip to get to work with a

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Speaker 1: lot of work to do in the field. But as

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Speaker 1: you pointed out, this is the safest and most reliable

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Speaker 1: way to move our ex market. UM, we're gonna use

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Speaker 1: the best technology. UM. It will create thousands of jobs

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Speaker 1: UM and UH tax important tracts revenues in local communities.

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Speaker 1: And that something offense overlooked in new projects like this

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Speaker 1: is local communities benefit greatly from these projects. It gives

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Speaker 1: them tax revenues in which they can invest in schools, hospitals, roads, teachers, nurses,

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Speaker 1: all of those things build the fabric of communities and

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Speaker 1: UH and make the places better for for those posts

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Speaker 1: two ways. So again, thank you very much for this opportunity,

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Speaker 1: and we're not gonna let you down. Sir. Well, thank you,

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Speaker 1: rus And I I know the voters appreciate this. Some

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Speaker 1: of them expressed it very very strongly. The workers definitely

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Speaker 1: appreciated that the building trades heads didn't. But now maybe

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Speaker 1: they're gonna start to where my building places got. I

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Speaker 1: think they're gonna start to because other people were not

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Speaker 1: going to be signing this build that I can tell you.

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Speaker 1: And if it ever did get done, it would be years.

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Speaker 1: But I don't think it would have ever gotten done.

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Speaker 1: So we put a lot of people to work, all

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Speaker 1: great workers to work, and they did appreciate it, and

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Speaker 1: they appreciated Russ very much at the polls, as you

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Speaker 1: probably noticed, and so we're very happy about it. So

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Speaker 1: the bottom line, Keystone finished, They're gonna start construction. When

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Speaker 1: I got to see work to do un Neibraska to

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Speaker 1: get on permits there, looking forward to working through the

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Speaker 1: local Uh. You don't why. Nebraska is a great governor.

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Speaker 1: They have a great governor. We've been working there for

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Speaker 1: some time and I do believe that we'll get through

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Speaker 1: that process. But obviously have to engage with the local

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Speaker 1: landowners tropical communities. So we're reaching out to those over

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Speaker 1: the coming months to get the other necessary permits that

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Speaker 1: we need, and then we look forward to start construction. Okay,

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Speaker 1: I'm sure to addressed it will do good. Pets. A

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Speaker 1: fantastic governor has done a great job. But I'll call

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Speaker 1: him today. So thank you all very much, appreciate it.

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Speaker 1: Thank you. You've been listening to President Donald Trump. He

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Speaker 1: was speaking about his signing of the order approving the

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Speaker 1: construction and completion of the Keystone XL pipeline. In the

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Speaker 1: him With him were Rick Perry. Uh. He is the

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Speaker 1: Secretary of Energy, along with Wilbur Ross, the Secretary of

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Speaker 1: Commerce and also speaking there was Russ Girling. He is

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Speaker 1: the president and the chief executive trans Canada, the construction

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Speaker 1: company that will well the oil pipeline company that will

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Speaker 1: operate the Keystone XL Here to just bring us up

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Speaker 1: to date, we have Menal van Berger. Did I get that?

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Speaker 1: I just have trouble. It's just me. Did you heard

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Speaker 1: that what the president was saying? And then at the

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Speaker 1: very end they talked about Nebraska and that goes to

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Speaker 1: what you were reporting, which is that great you get

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Speaker 1: the federal permits, but it's the local level that is

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Speaker 1: the big issue sometimes, right, Yeah, I mean, you know

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Speaker 1: Trump says, you know, I'll call Nebraska, and they joked

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Speaker 1: about that a little bit, but he can't do that.

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Speaker 1: I mean, and I think, you know, you heard Girling say,

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Speaker 1: we've been doing a lot of work in Nebraska, and

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Speaker 1: you know, we've spent a lot of years trying to

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Speaker 1: figure this out. So I think, uh, you know, they're obviously,

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Speaker 1: like he said, he's relieved, unexcited. But I didn't think

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Speaker 1: they're deluding themselves. They know they have a lot of

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Speaker 1: work to do. Still, thank you so much, Mean Van Berger,

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Speaker 1: energy reporter for Bloomberg, who has so kindly stayed here

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Speaker 1: and reflected on what we have heard, as well as

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Speaker 1: the whole situation and the arduous road ahead to get

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Speaker 1: this pipeline completed regardless of any presidential sign off. You know, Pam,

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Speaker 1: It's really interesting. We hear a lot about activists investors

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Speaker 1: in sort of their influence over companies, but it turns

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Speaker 1: out there actually is a predictable way to identify which

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Speaker 1: companies are vulnerable to such activists intervention. I want to

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Speaker 1: bring in Joel Levington, a senior credit analyst with Bloomberg Intelligence.

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Speaker 1: He is here with us in our Bloomberg eleven three

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Speaker 1: oh studio. Joel, We're so happy to have you first

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Speaker 1: before we talk about how to identify companies that are

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Speaker 1: targets or possible likely probable targets for activists. Why is

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Speaker 1: it important to know whether a company would be uh

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Speaker 1: the target of an activist investor? Sure, Lisa, and thank

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Speaker 1: you for having me Uh. I think there's implications for

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Speaker 1: both the stockholders as well as for bond holders. UH.

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Speaker 1: For stocks, it might be a catalyst for improvement if

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Speaker 1: you can find UH somebody that can lead the company

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Speaker 1: to either improve performance or maybe more optimal balance sheet

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Speaker 1: for credit. Uh, it could work the same way, except

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Speaker 1: tends to be more negative in that uh, activists tend

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Speaker 1: to come in and want to add more leverage into

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Speaker 1: a situation, which is uh, you know, would add credit risk.

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Speaker 1: So in other words, coming from a credit perspective, you're

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Speaker 1: sort of saying, look out, here are some companies that

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Speaker 1: could potentially have surprising shifts in their valuations that could

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Speaker 1: upend some of your expectations. Right, that's right, Okay, that's right.

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Speaker 1: So which companies that you IDEA five? Sure? Well? I

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Speaker 1: didn't identify any of them, Luckily, we Luckily we put

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Speaker 1: a model together that identified a lot of them. Uh.

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Speaker 1: And what we did is we broke it out by

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Speaker 1: different category, the sectors that they're in, and some of

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Speaker 1: the names that screen high or ge which has been

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Speaker 1: flagging in our model going back to two thousand and fourteen,

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Speaker 1: the year before try And actually got involved, as well

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Speaker 1: as Ford and Kroger, they stood out as kind of

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Speaker 1: bigger names for their sectors. What is this measuring? Sure? Well?

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Speaker 1: What what what I did is I went back and

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Speaker 1: looked at a lot of the research papers that try

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Speaker 1: And has produced. And what try And, of course is

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Speaker 1: the vehicle by which Nelson pelts the activist investor has

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Speaker 1: invested previously in PepsiCo UH and currently I believe has

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Speaker 1: a position in a Procter and Gamble, Yes and and

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Speaker 1: G and pent Air in the world of industrials, and

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Speaker 1: so for for them, they looked at a variety of

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Speaker 1: different factors like sales growth, margins, returns, capital intensity of

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Speaker 1: the business and stock performance. And so using the Bloomberg terminal,

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Speaker 1: we put all these factors together and then started measuring

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Speaker 1: peers to see like which stood out. And so out

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Speaker 1: of that comes our flaggers of for companies UH at

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Speaker 1: risk for activism as well as for potential credit reading

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Speaker 1: down grades. When we did this the first time on

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Speaker 1: June sixteenth last year, UH, the eight names that we

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Speaker 1: listed wound up having twelve down grades and no upgrades.

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Speaker 1: So certainly a credit flagg are as well. You know,

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Speaker 1: I want to talk a little bit about the composition

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Speaker 1: of activist investors. When you first hear that words, you

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Speaker 1: think of Carl Icon or some of these other UH

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Speaker 1: sort of big figures. But how much of the activism

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Speaker 1: has shifted to say, mutual fund companies that own a

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Speaker 1: lot of a lot of stocks of a specific company

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Speaker 1: and can consolidate that to be a pretty big voice. Yeah, no,

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Speaker 1: it's a it's a very good point, Lisa, and not

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Speaker 1: only mutual funds, but the type of activists. Whereas a

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Speaker 1: carl Icon might be more aggressive for financial risk changes,

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Speaker 1: there are others such as Starboard or UM or here

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Speaker 1: with Tryan where they focus more on the operational side

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Speaker 1: and how do we improve operations so which is not

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Speaker 1: always a negative for credit if you can, you know,

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Speaker 1: improve the quality of earnings and sales growth. What would

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Speaker 1: be the best use of this information for a bond

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Speaker 1: trade bond investor? And then just tell us also for

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Speaker 1: an equity investor, how would they use it? Sure? I

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Speaker 1: think for a bond investor, the key is, you know,

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Speaker 1: here is a identifiable risk? Are you getting paid for it?

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Speaker 1: That's how I would be looking at it, or at

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Speaker 1: least that's how I was on the on the buy side.

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Speaker 1: If you are an equity person, and maybe that becomes

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Speaker 1: a catalyst of change, and then you can start looking

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Speaker 1: at the holders and where that might be coming from,

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Speaker 1: like who would where's the impetus for it um and

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Speaker 1: what would be the earnings opportunity if the company could

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Speaker 1: achieve either sales growth or margins or whatever the item

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Speaker 1: is akin to its fear set, and that would be

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Speaker 1: the opportunity for you know, like earnings and perhaps appreciation.

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Speaker 1: You know, Joel, I'm interested in the response that you've

429
00:25:06,640 --> 00:25:10,000
Speaker 1: gotten to this index that you've put together, because for

430
00:25:10,080 --> 00:25:12,920
Speaker 1: so many years after the crisis, people just repiling into

431
00:25:12,960 --> 00:25:16,720
Speaker 1: indexes and sort of writing this UH beta wave or

432
00:25:16,960 --> 00:25:20,359
Speaker 1: you know, just trying to get just something, you know,

433
00:25:20,440 --> 00:25:22,879
Speaker 1: just basically writing the stimulus. But now it seems like

434
00:25:22,920 --> 00:25:26,880
Speaker 1: there is so much more focused on picking specific bonds.

435
00:25:27,520 --> 00:25:30,040
Speaker 1: Have you found that as well, without a doubt, without

436
00:25:30,040 --> 00:25:32,440
Speaker 1: a doubt, And you know, the customer engagement has been

437
00:25:32,680 --> 00:25:34,920
Speaker 1: quite good, and in fact it tends to be Can

438
00:25:34,960 --> 00:25:37,359
Speaker 1: we have more can we get historic data to UH

439
00:25:37,440 --> 00:25:40,400
Speaker 1: to test prove the system that will be coming out

440
00:25:40,440 --> 00:25:44,480
Speaker 1: next week? So the baby we'll talk again. Are there

441
00:25:44,520 --> 00:25:48,080
Speaker 1: any areas that you would like to add to this

442
00:25:48,240 --> 00:25:52,199
Speaker 1: information pile? Because it's not only what happens, it's the

443
00:25:52,240 --> 00:25:54,440
Speaker 1: outcome that matters, right, I mean, it's not just well,

444
00:25:54,760 --> 00:25:57,399
Speaker 1: whether the investor is correct, because in the real world

445
00:25:57,680 --> 00:26:00,480
Speaker 1: outcome might be quite different. That's exactly right, And that's

446
00:26:00,520 --> 00:26:02,760
Speaker 1: one of the great things about the tool UH and

447
00:26:03,040 --> 00:26:05,359
Speaker 1: I guess version two point oh is that because it

448
00:26:05,440 --> 00:26:07,600
Speaker 1: has historic data in it, we can go back and

449
00:26:07,680 --> 00:26:11,680
Speaker 1: measure where activists actually hit UH and what was the

450
00:26:11,720 --> 00:26:15,040
Speaker 1: stock outcome was the bond outcome for most What we

451
00:26:15,040 --> 00:26:18,120
Speaker 1: find is that the bond outcome was fairly negative and

452
00:26:18,320 --> 00:26:20,919
Speaker 1: the stock outcome. We have a U S equity strategist

453
00:26:20,960 --> 00:26:23,159
Speaker 1: that is going to be writing on that in the

454
00:26:23,200 --> 00:26:26,399
Speaker 1: in the near future. Were there any specific companies that

455
00:26:26,480 --> 00:26:28,639
Speaker 1: stood out to you other than the ones you've mentioned,

456
00:26:28,640 --> 00:26:31,679
Speaker 1: because these are big companies General Electric and and so on.

457
00:26:31,720 --> 00:26:34,840
Speaker 1: I mean, you would have to amass a significant steak,

458
00:26:34,920 --> 00:26:37,760
Speaker 1: either in bonds or in stock in order to really

459
00:26:37,800 --> 00:26:41,639
Speaker 1: influence anything. There Are there any smaller companies that popped

460
00:26:41,720 --> 00:26:45,120
Speaker 1: up on your radar? UH, There's a there's a there's

461
00:26:45,119 --> 00:26:48,000
Speaker 1: a lot of companies, even like in the supermarket area.

462
00:26:48,040 --> 00:26:49,959
Speaker 1: I guess the things that that I thought were kind

463
00:26:49,960 --> 00:26:54,040
Speaker 1: of interesting was that the system UH certainly flagged on

464
00:26:54,320 --> 00:26:57,760
Speaker 1: more stable companies like a heavily in the supermarket area.

465
00:26:58,440 --> 00:27:00,720
Speaker 1: On the industrial side, where you have a steady set

466
00:27:00,720 --> 00:27:03,600
Speaker 1: of cash flow, but maybe a margin issue or you're

467
00:27:03,680 --> 00:27:07,119
Speaker 1: not growing sales as quick as your peers where something

468
00:27:07,160 --> 00:27:10,600
Speaker 1: could be done both operationally and also could be done

469
00:27:10,600 --> 00:27:12,639
Speaker 1: from a balance sheet perspective. You know, I want to

470
00:27:12,640 --> 00:27:15,639
Speaker 1: switch gears a little bit to another spot in credit

471
00:27:15,680 --> 00:27:17,800
Speaker 1: markets that's been causing a lot of concern for people,

472
00:27:18,160 --> 00:27:21,000
Speaker 1: and that is the auto sector. And I know we

473
00:27:21,000 --> 00:27:23,280
Speaker 1: were talking about this yesterday, Joel. You know, we hear

474
00:27:23,320 --> 00:27:28,040
Speaker 1: all about the auto loan losses increasing too, liquids is increasing, uh,

475
00:27:28,080 --> 00:27:30,960
Speaker 1: and and some of the concerns and the poor results

476
00:27:30,960 --> 00:27:32,960
Speaker 1: that we've seen as a result of that. How is

477
00:27:33,000 --> 00:27:37,159
Speaker 1: this affecting Hurts and you know Avis and some of

478
00:27:37,200 --> 00:27:41,040
Speaker 1: these companies that really depend on resale values of cars

479
00:27:41,080 --> 00:27:43,840
Speaker 1: in order to meet their bogies. Sure, well, I'm a

480
00:27:43,920 --> 00:27:46,600
Speaker 1: John Mellencamp fin but this does not hurt so good

481
00:27:46,880 --> 00:27:50,480
Speaker 1: for Hurts. Uh. They have really taken it on the

482
00:27:50,560 --> 00:27:54,880
Speaker 1: chin since last November where they significantly lowered their earnings

483
00:27:54,880 --> 00:27:58,800
Speaker 1: guidance because of residual value declines or declines in the

484
00:27:58,920 --> 00:28:01,600
Speaker 1: values of used ours when they go to sell them,

485
00:28:01,960 --> 00:28:04,040
Speaker 1: and so they've had to take right offs on that.

486
00:28:04,119 --> 00:28:07,520
Speaker 1: Ford was out yesterday commenting that you know that they're

487
00:28:07,520 --> 00:28:11,639
Speaker 1: seeing declines and values. Also this week, Ali Financial came

488
00:28:11,680 --> 00:28:15,800
Speaker 1: out with commentary basically saying that that they're seeing significant

489
00:28:15,800 --> 00:28:18,639
Speaker 1: weakness there too, more than what they expected, which is

490
00:28:18,680 --> 00:28:23,159
Speaker 1: really crushed Hurts bonds, Avis's bonds, and to a lesser effect,

491
00:28:23,440 --> 00:28:26,760
Speaker 1: some of the o e ms that are auto manufacturers

492
00:28:26,800 --> 00:28:30,320
Speaker 1: that have captive finance companies where that derivative exposure is

493
00:28:30,359 --> 00:28:32,760
Speaker 1: going to be as well. Last point to here when

494
00:28:32,760 --> 00:28:35,920
Speaker 1: you mentioned Ally Financial, which of course is the old GM,

495
00:28:36,040 --> 00:28:39,240
Speaker 1: which is the financing arm. One of the comments that

496
00:28:39,280 --> 00:28:42,600
Speaker 1: we got this week about their uh, their position was

497
00:28:42,680 --> 00:28:47,920
Speaker 1: that the subprime borrower in automobile loans is who is

498
00:28:47,960 --> 00:28:52,120
Speaker 1: in trouble. The If you've got good credit, you're paying

499
00:28:52,160 --> 00:28:55,080
Speaker 1: your bills. It's the subprime area where we're seeing more

500
00:28:55,120 --> 00:28:58,400
Speaker 1: delinquencies and defaults. Yeah, pay me your spot on and

501
00:28:58,560 --> 00:29:01,280
Speaker 1: uh my, my colleague Ryan O'Connell has done some great

502
00:29:01,280 --> 00:29:03,360
Speaker 1: work on this where he shows like if you look

503
00:29:03,400 --> 00:29:06,640
Speaker 1: at the last three quarters both for Ali Financial and

504
00:29:06,680 --> 00:29:10,920
Speaker 1: Capital One, their net charge offs have been increasing each quarter.

505
00:29:11,320 --> 00:29:13,840
Speaker 1: So it's telling you that there's a component of the

506
00:29:13,960 --> 00:29:16,760
Speaker 1: economy that isn't doing as well as you know, like

507
00:29:16,880 --> 00:29:19,360
Speaker 1: what might be dictated by by the stock market over

508
00:29:19,400 --> 00:29:22,400
Speaker 1: the last several months that makes sense. Well, thanks very

509
00:29:22,440 --> 00:29:25,640
Speaker 1: much to Levington. He is a Levington. He is a

510
00:29:25,680 --> 00:29:28,560
Speaker 1: senior credit analysts for Bloomberg Intelligence. I always learned something

511
00:29:28,600 --> 00:29:31,080
Speaker 1: new when we when we have you one because you

512
00:29:31,160 --> 00:29:33,760
Speaker 1: focus on something specific and then give us that broad

513
00:29:34,040 --> 00:29:50,800
Speaker 1: reason for understanding it. Investing in airlines, let's find out

514
00:29:50,880 --> 00:29:52,920
Speaker 1: from Frank Holmes. He is the chief executive and the

515
00:29:52,960 --> 00:29:56,360
Speaker 1: chief investment officer of US Global Investors. They are based

516
00:29:56,400 --> 00:29:59,640
Speaker 1: in San Antonio, Texas. Frank joins us in the studio

517
00:29:59,640 --> 00:30:02,240
Speaker 1: here at Boomberg World Headquarters. Frank, always a pleasure, thanks

518
00:30:02,280 --> 00:30:06,160
Speaker 1: for being here. Um airlines, you know warm we keep

519
00:30:06,200 --> 00:30:08,680
Speaker 1: Whenever you hear airlines, I think warm. Buffett. Yes, he

520
00:30:08,720 --> 00:30:10,600
Speaker 1: said he would never invest in them. Now he will

521
00:30:11,240 --> 00:30:15,760
Speaker 1: UM tell us about the whole airline industry as in

522
00:30:15,880 --> 00:30:18,840
Speaker 1: terms of investments, because I would wonder whether there is

523
00:30:18,880 --> 00:30:23,640
Speaker 1: any uh, you know, pressure because of potential travel bands

524
00:30:23,680 --> 00:30:26,400
Speaker 1: and changes in the in the legal restrictions about what

525
00:30:26,520 --> 00:30:29,000
Speaker 1: goes on in the airlines. I think that there's no

526
00:30:29,040 --> 00:30:32,320
Speaker 1: doubt there that impact is some of the global travel.

527
00:30:32,880 --> 00:30:35,240
Speaker 1: But what's really happened. I think that's a change for

528
00:30:35,280 --> 00:30:37,240
Speaker 1: why Buffett and when we first talked about this. In

529
00:30:37,400 --> 00:30:40,719
Speaker 1: launching the jet C t F, the question was he

530
00:30:40,760 --> 00:30:43,720
Speaker 1: was a head wind buffett towards the airlines because he

531
00:30:43,760 --> 00:30:46,760
Speaker 1: was anti Now he's a tail wind UH and he

532
00:30:47,240 --> 00:30:49,760
Speaker 1: and went into the industry. I think for three reasons.

533
00:30:50,200 --> 00:30:52,480
Speaker 1: One is it's a motor around the industry. It's very

534
00:30:52,520 --> 00:30:55,760
Speaker 1: hard to build a new airport or get new UH

535
00:30:55,800 --> 00:30:58,400
Speaker 1: slips to be able to fly back and forth. There's

536
00:30:58,440 --> 00:31:02,520
Speaker 1: a shortage of pilots. The rules becoming a pilot changed dramatically.

537
00:31:02,760 --> 00:31:05,600
Speaker 1: The CEO is like the CEO of American airlines, take

538
00:31:05,720 --> 00:31:08,320
Speaker 1: stock in lieu of salary, so they're much more focused

539
00:31:08,320 --> 00:31:11,160
Speaker 1: on returns on capital bottom line. They have the highest

540
00:31:11,200 --> 00:31:13,600
Speaker 1: castle returns and capital in their history, and they're very

541
00:31:13,640 --> 00:31:16,959
Speaker 1: disciplined for it. So I think that that's more significant

542
00:31:17,080 --> 00:31:19,800
Speaker 1: of why he spent ten billion dollars buying the four

543
00:31:20,120 --> 00:31:23,720
Speaker 1: big pillars of the airline industry. Frank, I'm looking at

544
00:31:23,720 --> 00:31:26,840
Speaker 1: your jets e t F which invests in airline shares,

545
00:31:26,880 --> 00:31:29,160
Speaker 1: and the expense ratio is point six percent, which is

546
00:31:29,160 --> 00:31:32,680
Speaker 1: actually quite a bit higher than a lot of other

547
00:31:32,840 --> 00:31:36,000
Speaker 1: e t f s and equity funds. What do you

548
00:31:36,120 --> 00:31:39,480
Speaker 1: do to provide value and earn that point six percent

549
00:31:39,680 --> 00:31:42,840
Speaker 1: in this fund. It's a great question. It's a smart beta,

550
00:31:42,960 --> 00:31:44,760
Speaker 1: and then they call it a smart beta too, not

551
00:31:44,840 --> 00:31:48,520
Speaker 1: only because of how we screen stocks that go into it.

552
00:31:48,520 --> 00:31:52,360
Speaker 1: It is the overall structure that the four major airlines,

553
00:31:52,440 --> 00:31:56,600
Speaker 1: which represent of all air travel in America, are forty

554
00:31:56,720 --> 00:32:01,640
Speaker 1: five percent of the of the fund, and they rebalance

555
00:32:01,680 --> 00:32:04,880
Speaker 1: each quarter. And then we look at those companies that

556
00:32:04,960 --> 00:32:08,120
Speaker 1: have the highest cash forward turns on invested capital the

557
00:32:08,480 --> 00:32:11,800
Speaker 1: what they call the revenue perceived mile, and we screen them.

558
00:32:11,920 --> 00:32:16,720
Speaker 1: So there's about a change each quarter of screening old

559
00:32:16,720 --> 00:32:21,440
Speaker 1: stocks that don't qualify for this detailed financial analysis. And

560
00:32:21,480 --> 00:32:24,760
Speaker 1: we did both four thousand hours of research doing back

561
00:32:24,800 --> 00:32:27,600
Speaker 1: studies of looking during the when they were through bankruptcy,

562
00:32:28,120 --> 00:32:30,160
Speaker 1: what were the best factors to deal with in a

563
00:32:30,320 --> 00:32:33,160
Speaker 1: rising market of following market price of oil rising price

564
00:32:33,160 --> 00:32:36,160
Speaker 1: of oil falling, And we came up with five factors.

565
00:32:36,360 --> 00:32:39,920
Speaker 1: And I really thrilled about it because it's doing exactly

566
00:32:39,960 --> 00:32:44,920
Speaker 1: what our performers showed it would do. And our US

567
00:32:45,000 --> 00:32:50,760
Speaker 1: companies are foreign. But what's interesting is that se of

568
00:32:50,800 --> 00:32:53,520
Speaker 1: the names are foreign, so they're only kept it one percent,

569
00:32:53,640 --> 00:32:56,440
Speaker 1: so they really don't currency swings don't impair it, but

570
00:32:56,520 --> 00:32:59,200
Speaker 1: it does capture if an airline's is very strong out

571
00:32:59,200 --> 00:33:01,680
Speaker 1: of Asia. Uh. And the other interesting part is that

572
00:33:01,680 --> 00:33:05,640
Speaker 1: they can buy airports, and airports here are not owned

573
00:33:05,640 --> 00:33:09,240
Speaker 1: by the public, but they're very big private equity. Beijing

574
00:33:09,760 --> 00:33:14,760
Speaker 1: is a public, Bangkok is public. Uh and also in Mexico. Wa. Wait,

575
00:33:14,800 --> 00:33:16,720
Speaker 1: hold on a second, how does an e t f

576
00:33:17,440 --> 00:33:21,960
Speaker 1: by airports or a state in airports that are as

577
00:33:22,000 --> 00:33:25,920
Speaker 1: you say, largely financed through private equity in debt, Well,

578
00:33:25,960 --> 00:33:29,280
Speaker 1: they're like there, it's more of a private equity model,

579
00:33:29,360 --> 00:33:32,600
Speaker 1: so that the Toronto stock than the Toronto Airport. The

580
00:33:32,640 --> 00:33:35,560
Speaker 1: Pearson is a private equo owned by private equity. The

581
00:33:35,600 --> 00:33:39,240
Speaker 1: interesting part is that you can buy airports outside of

582
00:33:39,400 --> 00:33:42,680
Speaker 1: the US that are public and they grow their cash

583
00:33:42,760 --> 00:33:46,040
Speaker 1: low at a fift caagar uh. So that means every

584
00:33:46,040 --> 00:33:49,520
Speaker 1: five years at doubles. That's very much how private equity functions.

585
00:33:50,040 --> 00:33:53,080
Speaker 1: So I think that they qualify and they will show

586
00:33:53,160 --> 00:33:55,680
Speaker 1: up as soon as they're cash flow and their revenue

587
00:33:55,680 --> 00:33:59,120
Speaker 1: per share on a quarterly basis is lagging over four quarters,

588
00:33:59,120 --> 00:34:02,760
Speaker 1: they're out. This is why you got what the Macquarie

589
00:34:02,760 --> 00:34:06,560
Speaker 1: Infrastructure Fund is part of your holding. Yes, and they

590
00:34:06,600 --> 00:34:08,360
Speaker 1: own uh and they have a couple of them, but

591
00:34:08,560 --> 00:34:11,600
Speaker 1: the one we own a particular owns airports. Right. Um,

592
00:34:11,640 --> 00:34:13,600
Speaker 1: I want to just focus on American airlines because you

593
00:34:13,640 --> 00:34:15,040
Speaker 1: brought that up for a second. I mean, this is

594
00:34:15,040 --> 00:34:17,080
Speaker 1: a stock that was trading your fifty dollars to share

595
00:34:17,080 --> 00:34:21,040
Speaker 1: in January. Also in December, it's down, you know, it's

596
00:34:21,040 --> 00:34:25,040
Speaker 1: down almost from those highs. But this is stock that's

597
00:34:25,040 --> 00:34:27,799
Speaker 1: pretty volatile. Airlines are volatile investments, right, I mean this

598
00:34:27,880 --> 00:34:30,080
Speaker 1: was a twenty five dollar stock back in last summer.

599
00:34:30,160 --> 00:34:33,600
Speaker 1: So you've got to be aware of that, don't you. Absolutely,

600
00:34:33,800 --> 00:34:38,200
Speaker 1: And the data on on the airline's industry is much

601
00:34:38,239 --> 00:34:41,640
Speaker 1: greater than the overall market and it reminds me of biotechnology.

602
00:34:41,880 --> 00:34:44,319
Speaker 1: And it's also like gold stocks. I was gonna say,

603
00:34:44,320 --> 00:34:46,560
Speaker 1: do you balance this out with your goal position, because

604
00:34:46,600 --> 00:34:48,520
Speaker 1: I know that you you're gonna talk about gold, But

605
00:34:48,560 --> 00:34:50,560
Speaker 1: I mean, if you want, if you want volatility, go ahead,

606
00:34:50,600 --> 00:34:54,719
Speaker 1: get an airline. But will the gold at around an ounce?

607
00:34:54,960 --> 00:34:58,000
Speaker 1: Would that in mitigate any of the volunt that has

608
00:34:58,040 --> 00:35:00,960
Speaker 1: a different set of animals to drive the the gold space.

609
00:35:01,320 --> 00:35:04,480
Speaker 1: So energy is what happens in oil prices. Oil was

610
00:35:04,640 --> 00:35:06,759
Speaker 1: rising until a couple of weeks ago and then it

611
00:35:06,800 --> 00:35:10,200
Speaker 1: started petering out and falling below fifty dollars, So it's

612
00:35:10,200 --> 00:35:14,120
Speaker 1: psychologically has an impact on the evaluations. Oil won't have

613
00:35:14,200 --> 00:35:16,480
Speaker 1: a real significant impact on their cash loollness it's over

614
00:35:16,520 --> 00:35:20,080
Speaker 1: sixty dollars in barrel for a period of time, I

615
00:35:20,120 --> 00:35:22,920
Speaker 1: don't see that. I think it vacillates in between forty

616
00:35:22,920 --> 00:35:26,359
Speaker 1: and sixty dollars price of oil. So these companies are

617
00:35:26,440 --> 00:35:30,719
Speaker 1: throwing off lots of cash flow. American is just one

618
00:35:30,760 --> 00:35:32,960
Speaker 1: of those those animals, and you're right, they are just

619
00:35:33,040 --> 00:35:36,600
Speaker 1: more volatile. But the basket itself, when you own the

620
00:35:36,680 --> 00:35:40,520
Speaker 1: e t F lowers that volatility. And that's what's really

621
00:35:40,520 --> 00:35:44,279
Speaker 1: important for investors that you are capturing the trend in

622
00:35:44,320 --> 00:35:47,120
Speaker 1: the industry. And it's really important to follow middle class.

623
00:35:47,120 --> 00:35:49,640
Speaker 1: A rise in the middle class is very important for travel.

624
00:35:50,239 --> 00:35:54,200
Speaker 1: Uh two million people a day flying America. The biggest

625
00:35:54,200 --> 00:35:56,600
Speaker 1: tourists in the in the world have been Americans because

626
00:35:56,600 --> 00:35:59,200
Speaker 1: of the strong middle class of almost a hundred million people.

627
00:35:59,600 --> 00:36:03,560
Speaker 1: Now China is an equal of size in middle class,

628
00:36:03,680 --> 00:36:05,960
Speaker 1: and so you're seeing the Chinese or they just had

629
00:36:05,960 --> 00:36:08,360
Speaker 1: the report of American Airlines. What wanted to take a

630
00:36:08,800 --> 00:36:13,719
Speaker 1: potential taken in China Southern Airways, correct, and that's all

631
00:36:13,840 --> 00:36:18,200
Speaker 1: trying to cater to this cross the Pacific travel opportunity.

632
00:36:18,600 --> 00:36:22,600
Speaker 1: And so I think that we have some unique opportunities

633
00:36:22,680 --> 00:36:26,440
Speaker 1: here in this industry because they're much most important for

634
00:36:26,520 --> 00:36:29,919
Speaker 1: us as investors. They're much more disciplined on driving high

635
00:36:29,920 --> 00:36:32,520
Speaker 1: returns investor capital. Which region in the world do you

636
00:36:32,560 --> 00:36:37,480
Speaker 1: think is the best potential place for airlines right now?

637
00:36:38,080 --> 00:36:41,480
Speaker 1: I would think Asia. Uh. You saw how fast last

638
00:36:41,560 --> 00:36:45,000
Speaker 1: year Delta and United cut back a lot of flights

639
00:36:45,040 --> 00:36:48,280
Speaker 1: to Europe as a europe euro was falling and trade

640
00:36:48,360 --> 00:36:52,719
Speaker 1: coming over here Europeans slowing down. Um. But Asia, the

641
00:36:52,960 --> 00:36:56,040
Speaker 1: Hong Kong dollars pegged to the dollar. Uh, it's much

642
00:36:56,080 --> 00:36:59,200
Speaker 1: more stable. And they all want to come to America.

643
00:36:59,840 --> 00:37:03,880
Speaker 1: They love America, right, Franklin, thank you so much for

644
00:37:03,960 --> 00:37:06,680
Speaker 1: joining US. I really appreciate it. CEO and Chief Investment

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Speaker 1: Officer of US Global Investors based in San Antonio, Texas,

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Speaker 1: which is a beautiful, beautiful city. Thanks for listening to

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Speaker 1: the Bloomberg P and L podcast. You can subscribe and

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Speaker 1: listen to interviews at iTunes, SoundCloud, or whatever podcast platform

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Speaker 1: you prefer. I'm pim Fox. I'm out there on Twitter

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Speaker 1: at pim Fox. I'm out there on Twitter at Lisa Abramo.

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Speaker 1: It's one before the podcast. You can always catch us

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Speaker 1: worldwide on Bloomberg Radio