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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along
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Speaker 2: with the recent rally firmly on hold as the world
Speaker 2: of weights Israel's next move. Investors keeping one eye on
Speaker 2: US labor market data a head of payrolls on Friday,
Speaker 2: Jim biancov Bianco Research writing, I've still a no lander,
Speaker 2: meaning guys, see the economy is okay, not even showing
Speaker 2: signs of a self landing. I can debate whether we
Speaker 2: are seeing much calling in this labor market. Jim joins
Speaker 2: us now for more. Jim, good morning, and welcome to
Speaker 2: New York. Thanks he at least it went through the
Speaker 2: JUMPIP connects. You look at what's happening with the quits right.
Speaker 2: Quits writes down, look at what's happening with the Honring's right.
Speaker 2: Honding's writes down, Why do you not see that as
Speaker 2: a sign of a slowed down in the slang pima
Speaker 2: kit If you look.
Speaker 3: At the bigger picture of the numbers, they are down
Speaker 3: from say July or June, but the bigger picture over
Speaker 3: the last several years, these are still numbers that are
Speaker 3: very constructive for.
Speaker 4: The labor market right now. If you look at if you.
Speaker 3: Want to expand out from the JILT report to payrolls
Speaker 3: to the household survey, those.
Speaker 4: Numbers look pretty good now.
Speaker 3: The one number that is weak has been the rising
Speaker 3: unemployment rate. But the Fed likes to use the phrase
Speaker 3: increase in labor supply, which is a euphemism for migration.
Speaker 4: We've getten more people coming into the country.
Speaker 3: The growth the population growth rate in the country right now,
Speaker 3: according to the CBO, is pushing a thirty year high
Speaker 3: because of migration, and a lot of those people are
Speaker 3: coming into the country are unemployed, and that's what's getting
Speaker 3: picked up in the unemployment rate, which is why that
Speaker 3: number is rising. That's not necessarily a sign that people
Speaker 3: are losing job.
Speaker 2: Just say, year at three six state doesn't scream no landing,
Speaker 2: Ten year at three seventy six doesn't scream no landing.
Speaker 2: What's your feel on this spun market?
Speaker 5: You know?
Speaker 3: I think that at three sixty in the two year note,
Speaker 3: it is priced in pretty much.
Speaker 4: The Fed cutting rates all the.
Speaker 3: Way to say three to three and a quarter that's
Speaker 3: in ten two year notes shouldn't go anywhere else. Wall
Speaker 3: Street is really on this idea that we're going to
Speaker 3: see a curve steepening. I guess I am too, but
Speaker 3: at this point that's a barish trade because we're going
Speaker 3: to stay at three sixty, and the way you steep
Speaker 3: in the curve is the ten year in yield has
Speaker 3: to start to rise from here. I don't see the
Speaker 3: two year note going, say under three percent, unless you
Speaker 3: make the case the economy is really falling apart and
Speaker 3: the Fed is going to cut rates well beyond say
Speaker 3: three percent, down to around two percent or lower.
Speaker 1: I love when people say I'm a no lander, I'm
Speaker 1: a soft lander. It's sort of like saying I'm a
Speaker 1: flat earther. But there's sort of a question here about
Speaker 1: what that means.
Speaker 2: I mean going forward.
Speaker 1: Does that mean that there just is no recession or
Speaker 1: does that mean that there actually is a reacceleration from
Speaker 1: here of growth and inflation.
Speaker 3: You know, you brought up a really good point because
Speaker 3: I've critici size the soft landing camp that it's this
Speaker 3: thing without a definition.
Speaker 4: So in a year I'll define it and tell you
Speaker 4: I was correct.
Speaker 3: I think, yeah, Well, I think a no lander scenario
Speaker 3: is if you accept that potential GDP, what would the
Speaker 3: economy grow without it being stimulated or restrained is around
Speaker 3: two and a half percent, two to two and a
Speaker 3: half percent. I think that's the no landing camp, is
Speaker 3: that we continue to grow at the two to two
Speaker 3: and a half percent camp. Also, if you wanted to
Speaker 3: throw inflation in there, I am in the sticky inflation
Speaker 3: camp that the long run inflation rate is probably closer
Speaker 3: to a three handle, if not a three handle, then
Speaker 3: down at two point zero percent, where the Fed thinks
Speaker 3: it's going to be. So if you add in the
Speaker 3: two together with nominal GDP, you know two to two
Speaker 3: and a half percent real growth, three ish percent inflation,
Speaker 3: we're talking about five and a half percent nominal GDP.
Speaker 4: And that's where you know the no Landing idea.
Speaker 1: Comes how much just being a no Lander sort of
Speaker 1: hinge on this idea that authorities already willing and able
Speaker 1: to come in and step in, whether it's raycuts, whether
Speaker 1: it's the Bazuka we goes to Scott from China, whether it's.
Speaker 2: Potential fiscal stimulus.
Speaker 1: In the United States despite the deficit that people care
Speaker 1: about but aren't necessarily pricing.
Speaker 3: In Oh, I think that you know the no Lander camp,
Speaker 3: if I defined it at the way I do, it's
Speaker 3: all of those things give me worried that we don't
Speaker 3: need the Fed aggressively cut rates, we don't need massive
Speaker 3: fiscal stimulus, and if we're going to get it, what
Speaker 3: we're going to do is we're going to produce more
Speaker 3: inflation and probably second half of twenty five. And that's
Speaker 3: really the biggest concern right now is are we going
Speaker 3: to overstimulate because in the no Landing camp where we
Speaker 3: don't really need that kind of stimulation, but so it
Speaker 3: looks like we're going to get it anyway.
Speaker 6: You said you're going to take the over of the
Speaker 6: Friday's payroll report of one hundred and fifty K, do
Speaker 6: you just immediately have to then slash sixty seventy thousand
Speaker 6: off of that because of the revisions we continuously see.
Speaker 4: Yeah, that's usually what happens.
Speaker 3: I think twenty five of the last thirty one months,
Speaker 3: the payroll report beats a Wall Street's estimate, and then
Speaker 3: the revisions come in. And it's almost to the point
Speaker 3: right now where people have been more and more asking
Speaker 3: me is what's your guests on revisions as opposed to
Speaker 3: what's your guests on the payroll report?
Speaker 4: Revisions?
Speaker 3: I think are getting overstated a little bit that usually
Speaker 3: when they run and cycles the revisions, up until twenty two,
Speaker 3: the revisions were mostly upward, and since twenty two they've
Speaker 3: been mostly downward. And so I don't see the revisions
Speaker 3: as being some kind of dark secret thing that tells
Speaker 3: us that the economy is in trouble.
Speaker 4: But yeah, I probably see.
Speaker 3: That the revisions will pull back on the numbers that
Speaker 3: we saw in July and August, but the headline number,
Speaker 3: you know, like I said, most of the time, it
Speaker 3: seems to be when we get the next.
Speaker 6: Payroll report, the following one, when you look at what
Speaker 6: happened in October, we're going to have Hurricane Helen's impact
Speaker 6: and also the strike workers at the ports. How difficult
Speaker 6: is it going to be to really extrapolate the labor data.
Speaker 3: Oh yeah, and don't forget the boning strike too. And
Speaker 3: so I heard Mike McKee say this the other day,
Speaker 3: and I'll you know, there is a possibility of a
Speaker 3: negative payroll report coming up. The payroll survey week is
Speaker 3: the thirteenth. If these strikes keep going into disruptions into
Speaker 3: the thirteenth and we find that, you know, getting things
Speaker 3: back to normal after Hurricane Helene, goes more than two weeks,
Speaker 3: we could see this start to impact jobs. Remember the
Speaker 3: way the Jobs for survey works, they have a company report.
Speaker 3: If the company doesn't have power or it's closed and
Speaker 3: it doesn't report, they put them down for zero this month.
Speaker 3: They'll pick it up next month, revise it, and you
Speaker 3: could see a big dive in the numbers. Hurricane Harvey.
Speaker 3: We saw that last twenty seventeen, in September, we saw
Speaker 3: a negative payroll report off of that when it hit.
Speaker 2: Houston, and a one with Blimback Economics late to this
Speaker 2: hour and has put some numbers on this. If the
Speaker 2: strike lasts more than two weeks, we estimate the knock
Speaker 2: on effects could lower October payrolls do the first November
Speaker 2: by Money's eighty thousand jumps. They think that's going to
Speaker 2: lead the Federal Reserve to interest rates again by fifty
Speaker 2: basis points. If those numbers actually materialize. Wearing you on
Speaker 2: the fence move November seventh.
Speaker 3: You know that that's going to be a difficult one
Speaker 3: because if we were to see that type of number,
Speaker 3: and that's just off of the port strike, we still
Speaker 3: got the bone strike, We've still got the hurricane and
Speaker 3: maybe disruption from the Middle East coming as well. With
Speaker 3: energy prices, it's going to muddy the water for the FED.
Speaker 3: It's going to make it very, very difficult to try
Speaker 3: and discern what is the economy doing.
Speaker 4: Yeah, we know that there's this port strike. Yeah we
Speaker 4: know it depressed jobs, but we also know it's temporary,
Speaker 4: that the.
Speaker 3: Port strike will eventually end and things will eventually return
Speaker 3: back to normal.
Speaker 4: It's going to be very difficult for them.
Speaker 3: I think Paul set up the case for twenty five
Speaker 3: at a couple of days ago when he spoke in
Speaker 3: that that seems to be more of the prudent action,
Speaker 3: especially that it's two days after the election and there's
Speaker 3: a reasonable chance we won't know the outcome of the
Speaker 3: election by November seventh as well.
Speaker 2: Jim, it's going to say it new Y'll say thank you, sir,
Speaker 2: Jim bian Cut.
Speaker 5: We said.
Speaker 1: Davis, chief economist at Vanguard, Joe, thank you so much
Speaker 1: for being with us. I want to start just with
Speaker 1: weakening but not weak. How do you parse the difference
Speaker 1: at a time where we definitely are seeing weakening?
Speaker 7: Well sure, and again I think that's also really at
Speaker 7: the heart of the Federal Reserves response. We've clearly seen
Speaker 7: a slow down the labor market.
Speaker 4: Part of that's been very welcome.
Speaker 7: I mean, we were out of balance for the past
Speaker 7: two years and had you know, really rapid wage growth.
Speaker 7: We're approaching the levels now where any further weakening or
Speaker 7: slow or just slowing or cooling would really put you know,
Speaker 7: really bigger concerns on the table. I think the Federal
Speaker 7: Reserve has been weighing this information very importantly, and so
Speaker 7: you know, really explains you know, some of their.
Speaker 5: Pretty aggressive moves.
Speaker 7: I mean, I think the big tension in the market
Speaker 7: is are there the are the jobs figures really representative
Speaker 7: of the strength of the economy, or is it things
Speaker 7: such as GDP growth, which is going to three percent
Speaker 7: and not showing any signs of a slowdown.
Speaker 5: So which is it, Joe?
Speaker 1: I mean, we just had all CEO Mark Rowan speaking
Speaker 1: with our own Jonathan Farrow, and he was basically saying
Speaker 1: that the fifty basis point raycut was a really expensive
Speaker 1: insurance policy and that actually this is not an economy
Speaker 1: that needs it. Based on GDP and based on earnings.
Speaker 1: What makes you think that the labor market data, like
Speaker 1: the underpinnings of jolts that show that quits rates have
Speaker 1: really gone down, what makes you think that we should
Speaker 1: more heavily weight that.
Speaker 7: Well, again, I mean I think the whole insurance phrasing
Speaker 7: is actually pretty appropriate. You know, again, the economy is
Speaker 7: pretty resilient. I think we still have some turbulence ahead.
Speaker 7: Our lead indicators, which you mentioned at the outset, still
Speaker 7: point to some further weakness, and they're pretty powerful indicators
Speaker 7: given just the breath of our sample. And so I
Speaker 7: think what they're trying to do again, let's be clear,
Speaker 7: the Federal Reserve is all in on the soft landing expectation,
Speaker 7: and so I think they're going to be fairly aggressive
Speaker 7: to try to increase the odds that that happens. But
Speaker 7: there is risk in that strategy if the labor market,
Speaker 7: which I don't think it is, but if the labor
Speaker 7: market is setting the false signal and it's the GDP
Speaker 7: numbers that are more accurate or more representative than you
Speaker 7: know six months from that, we're going to have this
Speaker 7: crossroads because the equity market, I think, is looking at
Speaker 7: GDP and the bond market and the treasury market is
Speaker 7: looking at jobs.
Speaker 5: Well, Joe Powell tried.
Speaker 8: To solve this tension by just saying the labor market
Speaker 8: is a real time indicator and GDP is not. GDP
Speaker 8: is historically bad at predicting a recession. Does that mean
Speaker 8: that we just can completely discount it, completely discount the
Speaker 8: strength and what it tells us about one inflation coming
Speaker 8: in and the likelihood that unemployment moves in a more
Speaker 8: malicious manner.
Speaker 9: Yeah.
Speaker 7: I wouldn't be too quick to completely discount GDP because
Speaker 7: underneath GDP is corporate earnings, corporate profits, business investment, and
Speaker 7: so I think that it is important. I mean again,
Speaker 7: I think you know, policymakers, to be fair to chair
Speaker 7: the power, I think they are looking at a distillation
Speaker 7: but there's no doubt that the futteral Reserve is weighing
Speaker 7: the jobs market much more heavily than the GDP numbers. Again,
Speaker 7: I think, you know, the next several months will.
Speaker 4: Have some weakness.
Speaker 7: If we're right, then the federal Reserve will look very prescient.
Speaker 4: But nevertheless, you know, we're coming at a.
Speaker 7: Modest crossroads i'd say roughly six months from now, and
Speaker 7: that is and it's not a Bears crossroads. It's more
Speaker 7: of is the equity market right and this softness in
Speaker 7: the labor market's going to stabilize and then we're following
Speaker 7: GDP or is it going to be the latter and
Speaker 7: we're going to have GDP go come from three to two.
Speaker 7: I wish I had more conviction of which one it's
Speaker 7: going to be. Policymakers are trying to change that calculus
Speaker 7: in the next several months, but that is really the
Speaker 7: heart of the issue.
Speaker 1: I love the way that you're phrasing this because it's
Speaker 1: really accurate. It makes me feel like, right now the
Speaker 1: labor market is doing to dictate the bond market, and
Speaker 1: it's basically the GDP numbers Atlanta Fed. GDP is what
Speaker 1: almost every analyst who comes on the show, Who's bullish
Speaker 1: and Equities points to and says, look what's slow down?
Speaker 1: I just wonder how much the Fed could get ahead
Speaker 1: of this in economic terms. In other words, if they
Speaker 1: cut by they just cut by fifty basis points, if
Speaker 1: they do another fifty basis point cut, say in November,
Speaker 1: how much could they affect change to actually bring the
Speaker 1: labor market up to GDP and GDI rather than bring
Speaker 1: GDP and GDI down to the weakness that we're seeing
Speaker 1: currently in the labor market.
Speaker 7: Well, again, I think there are recent actions, there is
Speaker 7: some lag. So I mean the financial markets respond instantaneously.
Speaker 7: We're already trying to get ahead of the Futter Reserve.
Speaker 7: But in terms of the labor market the next three months,
Speaker 7: they're pretty much baked. I actually wish I knew exactly
Speaker 7: what the numbers would be, But our leading indicators say, listen,
Speaker 7: there's still some choppiness, but they're not going to go negative.
Speaker 7: That would be a surprise to me. And so again
Speaker 7: I think where it's going to come out. The Federal
Speaker 7: Reserve is now trying to look six months out and saying, listen,
Speaker 7: we want to nail that landing. The only risk I
Speaker 7: think the more bullish part of the economists or analyst
Speaker 7: community is saying is listen, you don't need to be
Speaker 7: cutting at all or not much. And so I think
Speaker 7: the Futter Reserve, if they're going to fight that narrative,
Speaker 7: they have to explain why they believe they're so restrictive
Speaker 7: and yet we have three percent GDP growth. I'm still
Speaker 7: waiting for the answer, but I think that's something that
Speaker 7: would be helpful for the Thurd Reserve to articulate where
Speaker 7: they're going to go for the next six months.
Speaker 6: Joe, but how are you going to review the non
Speaker 6: farm payers report November third? That's looking back at October
Speaker 6: when you see all these mismatches in the economy and
Speaker 6: people will be out of work. We know that because
Speaker 6: of what's going on with the number of strikes and
Speaker 6: Boeing and the port.
Speaker 7: Well again, I think you have to look at other things.
Speaker 7: I think you have to look at the new entrance
Speaker 7: coming in. I mean, one of the biggest reasons why
Speaker 7: we didn't have a more material slowdown this year was
Speaker 7: just the really the surgeon immigration. So you're going to
Speaker 7: look at a distillation picture. It's not so much what
Speaker 7: the headline is it's the breath of job creation. It's
Speaker 7: industries that are always strong, are they continuing to add
Speaker 7: at a current pace. It's the hours being worked outside
Speaker 7: of the strikes and areas. So yeah, yeah, Again, like
Speaker 7: anything in life, there's going to be noise in that report.
Speaker 7: I think what you're trying to say more than anything
Speaker 7: is the diffusion or the breath of industries and companies
Speaker 7: therefore that are in the continuing to add to just
Speaker 7: the jobs.
Speaker 5: Joe.
Speaker 8: You also talk about something in your research, a phrase
Speaker 8: that feels like it's been dropped by the wayside as
Speaker 8: of late, and that is the last mile of inflation.
Speaker 8: That's some of the unevenness that you see. You expect
Speaker 8: inflation to remain stubborn in this the second half of
Speaker 8: twenty twenty four. Does that mean this whole sort of
Speaker 8: idea that Powell was doing some sort of victory lap,
Speaker 8: even though he didn't explicitly say it, saying that inflation
Speaker 8: has been conquered.
Speaker 5: That that's not exactly right.
Speaker 7: Well, I get I think the Federal Reserve, you know,
Speaker 7: they're one of the few institutions that can actually affect
Speaker 7: the outcome because if everyone believes that inflation is on
Speaker 7: their control.
Speaker 5: It tends to go their way.
Speaker 7: But you know, the housing market and all of its
Speaker 7: esoteric calculations has been you know, one of the airs
Speaker 7: that's really been subborn. And I think that you know,
Speaker 7: even FED officials would acknowledge that. But again, you know,
Speaker 7: this is a fairly dovish institution. But to give the
Speaker 7: feder Reserve credit, they said that they could have a
Speaker 7: trade off of bringdown inflation without a material impact in
Speaker 7: the labor market. Now, you know, they got a really
Speaker 7: good luck in terms of the immigration surge, but tracking
Speaker 7: to date, so again, you know, I'm not cheering against
Speaker 7: the soft landing. I'm just waiting to see, you know,
Speaker 7: where does that calculus given their aggressive cuts and what
Speaker 7: likely will continue for a little bit of while a
Speaker 7: little bit of time. Where are where are we six
Speaker 7: months from now? And that's something that we will continue
Speaker 7: to focus on.
Speaker 5: Joe before we.
Speaker 1: Let you go, How much are you expecting the jobs
Speaker 1: are part to surprise the upside of the down side
Speaker 1: when we get them on Friday?
Speaker 7: Oh my goodness. I've been employed for twenty two years
Speaker 7: in part because I've tried to avoid these questions. But
Speaker 7: I would say there's monest risk on the downside. But
Speaker 7: take that with the grain of salt. If I was
Speaker 7: that accurate, I would probably already be retired.
Speaker 5: I love it.
Speaker 1: I expected you to be like, well, suddenly disturbance. Can
Speaker 1: hear you, Joe Davis, a Vanguard, thank you so.
Speaker 2: Much for being with us.
Speaker 5: I really appreciate it.
Speaker 1: Tony Rodriguez, head of fixed Income strategy at neuven And
Speaker 1: what do you make of that? What we just we're
Speaker 1: hearing about from Joe that essentially the bond market is
Speaker 1: taking its cues from the potential weakening of the labor market,
Speaker 1: whereas stocks really are looking much more at GDP and GDI.
Speaker 10: Yeah, I think that's accurate, and I think when you
Speaker 10: take that to the fixed income context, you're seeing the
Speaker 10: equity like response in the credit markets. Right So emerging
Speaker 10: markets are doing well, preferreds are doing well, high yields
Speaker 10: doing well. So credit risk is highly valued right now,
Speaker 10: and the fundamentals are very solid, defaults are low, corporate
Speaker 10: profits are good. So you're seeing the same story in
Speaker 10: the fixed income market. It's just that it's focused on
Speaker 10: the credit sectors. So I think the disconnect is maybe
Speaker 10: that in the treasury market you are seeing people that
Speaker 10: are kind of hedging against their risk books. So if
Speaker 10: you have an aggressive equity position, one of the only
Speaker 10: things that's going to work well. If in fact we
Speaker 10: get the hard landing that's not the highest probability, treasuries
Speaker 10: will rally. Treasuries will serve as a hedge. So I
Speaker 10: think there's a lot of money in that market that
Speaker 10: is serving as a hedge too, taking risk and the
Speaker 10: credit markets taking risk in the equity markets private markets.
Speaker 1: That didn't work though over the past couple of years
Speaker 1: because the issue the risk was inflation, and the different
Speaker 1: kinds of risk can mean that the bonds can be
Speaker 1: a buffer or not. Are you basically saying the increasingly
Speaker 1: bonds very diversifier because inflation is off the table, that
Speaker 1: is no longer a concern in any investor's mind that
Speaker 1: you speak with.
Speaker 10: Essentially, yes, I mean we wouldn't say inflation risk is
Speaker 10: off the table completely, but it's certainly much lower risk
Speaker 10: than it had been.
Speaker 9: We do think inflation continues to come down.
Speaker 10: So when you think of fixed income, you want to
Speaker 10: get income out of it, liquidity and a hedge and stability.
Speaker 10: Back when inflation really started to take off, in twenty two,
Speaker 10: there was no income in it, there was no potential
Speaker 10: for protection because rates were so low, there was still liquidity.
Speaker 10: We sit here today and you have income now out
Speaker 10: of your fixed income portfolio. Treasury is probably the least
Speaker 10: attractive area to find it, but you do have income
Speaker 10: in it, and you do have now what we think
Speaker 10: will be a hedge because you're coming off of three
Speaker 10: and a half to four percent type of levels rather
Speaker 10: than what had been sub two percent levels.
Speaker 8: So Tony yesterday, we have a big risk off type day.
Speaker 8: It's pretty textbook. Over geopolitical fears and Iran in Israel,
Speaker 8: it's pretty textbook.
Speaker 5: Except for credit.
Speaker 8: Market spreads barely move maybe one basis point for the
Speaker 8: overall market, maybe five for a high yield. Is it
Speaker 8: a market immune? Did you a political risk? Or is
Speaker 8: it just more common investors?
Speaker 1: What is it?
Speaker 5: Yeah?
Speaker 9: I don't think it's immune, but I do think it's
Speaker 9: more common investors.
Speaker 10: Even at oil prices, while they went up, they didn't
Speaker 10: spike as much as you might have expected. So I
Speaker 10: think people, you know, maybe it's the frog and the
Speaker 10: boiling water type of syndrome that all of these geopolitical
Speaker 10: risks there are so many hot spots out there, and
Speaker 10: there has been escalating risk in all of them that
Speaker 10: maybe the markets have seen the movie before and it's
Speaker 10: going to be, you know, a really cataclysmic event if
Speaker 10: in fact, it gets to the point where we start
Speaker 10: to see really the MIDI theater expand into more players.
Speaker 10: But for now, I think the market's looking at it
Speaker 10: as this has just been the ebb and flow of this,
Speaker 10: you know, continuing escalation that we're seeing. So we haven't
Speaker 10: had a major disruption, but it's a big risk out
Speaker 10: there in our minds.
Speaker 9: Is that geopolitical risk?
Speaker 6: Yeah, So if you were going to take that risk
Speaker 6: on board and you were actually really nervous that this
Speaker 6: was a different movie than the one we've seen, what
Speaker 6: should you be doing well?
Speaker 9: From our perspectives. A couple of things.
Speaker 10: One is that you don't want to be at the
Speaker 10: high end of your risk budget when you look at
Speaker 10: not only the risks that are out there, but when
Speaker 10: you also look at just valuations and the broader capital
Speaker 10: markets right fixing Kime. You look at credit spreads, equity market,
Speaker 10: you look at valuations. None of them are considered you know,
Speaker 10: historically cheap. They're at best case fare maybe aggressively priced,
Speaker 10: so that tells you you want to have some powder dry,
Speaker 10: you want to be kind of at the midpoint of
Speaker 10: your risk budget. In addition to that, within all the
Speaker 10: various asset classes, we're leaning more towards a little bit
Speaker 10: higher in quality, a little bit higher in liquidity, and
Speaker 10: making sure we have stronger fundamentals and can kind of
Speaker 10: see their way through any potential impact from economic weakness
Speaker 10: coming from geopolitical event.
Speaker 1: There's sort of this counterintuitive feeling right now in market
Speaker 1: is there's a real question. We were talking with way
Speaker 1: Lee of Blackrock earlier this morning, who agrees with her
Speaker 1: colleague Glarry Flankfink, who is talking about that maybe this
Speaker 1: bond market has priced in too many weight cuts at
Speaker 1: the same time that people are talking about the potential
Speaker 1: we're downside surprise that inevitably the Fed would respond to.
Speaker 1: Do you think that there has been sort of an
Speaker 1: overstating of the Fed's reaction function, in other words, a
Speaker 1: more billish position on the economy, or do you think
Speaker 1: that people are going to be surprised by how much
Speaker 1: they are going to have to cut now?
Speaker 10: I think that the markets are pricing in too many
Speaker 10: cuts there's been an overstatement of that. I do think
Speaker 10: that the probability of soft landing increased quite a bit
Speaker 10: when the FED cut fifty is their initial cut, rather
Speaker 10: than twenty five. And also you saw what China has
Speaker 10: done over the last week and change, where again they're
Speaker 10: not game changing things out of China, but they are
Speaker 10: stabilization and first step moves by China. All of that
Speaker 10: helps to reduce the risk of hard landing. So to us,
Speaker 10: the treasury market, the FED funds futures market proggressively pricing.
Speaker 10: Part of that, though, is because of our flows in
Speaker 10: those markets that are hedging. They're using that market to hedge,
Speaker 10: and we do think that if you get a hard
Speaker 10: landing a very significant geopolitical escalation, the Fed's not going
Speaker 10: to stop cutting at three and a quarter to three
Speaker 10: and a half, which is what our target is for
Speaker 10: the middle of next year, you'll see a sub two
Speaker 10: percent funds rate. You'll see a tenure that's at two
Speaker 10: percent or lower. Again, that's a very low probability in
Speaker 10: our minds, but it will be an effective hedge to
Speaker 10: the declines you'll find in your equity market or the
Speaker 10: widening and spreads you might see in the credit market.
Speaker 8: So if that's the low probability, does that mean base
Speaker 8: case just the natural place for yields to go from
Speaker 8: here on that is higher.
Speaker 10: I think base cases rangebound. I mean we kind of
Speaker 10: think fair value tenure three and three quarters to four
Speaker 10: percent is about fair value. It's a real rate that
Speaker 10: might end up in that one and a half to
Speaker 10: two percent area, and we think that's a good long
Speaker 10: run equilibrium level. You rarely get to that level and
Speaker 10: sit at that level, but for now that would be
Speaker 10: what we think is a fair value zone. So it's
Speaker 10: just a fed that needs to get down in terms
Speaker 10: of the funds rate patiently in our minds, not fifty
Speaker 10: base point cuts, but twenty five based point cuts. And
Speaker 10: if that happens, you can get this, you know, sought
Speaker 10: after soft landing, which can help the US economy grow.
Speaker 10: We don't think of three percent then maybe sustain a
Speaker 10: two percent one and a half to two percent type
Speaker 10: of pace.
Speaker 5: What's your call and payrolls on Friday, we'd.
Speaker 10: Say that the risks are probably to the downside, but
Speaker 10: not materially. So one hundred, one hundred and fifty we
Speaker 10: think is the right range.
Speaker 1: Tony Rodriguez Nupie.
Speaker 5: Thank you so much for being with us.
Speaker 2: This was the deal we agreed to it. If the
Speaker 2: stock closed, it an all time hard investigate. Mark Rowan
Speaker 2: would show up alongside me and it's a man of
Speaker 2: its worth market morning. It's good to see you.
Speaker 5: Thank you, and technically you were here, you came to
Speaker 5: visit us, so thank you.
Speaker 2: Thank you. You planned it this way. I'm sure big
Speaker 2: target for twenty twenty nine ten billion dollars of anue larnings.
Speaker 2: I think we have to start with a pretty broad question.
Speaker 2: Race to coming down economy is pretty decent. Let's just cool,
Speaker 2: financial conditions easy. Why people coming to you instead of
Speaker 2: just issuing a bond in public markets?
Speaker 5: I think if they come to us when they can
Speaker 5: issue a bond in public markets and it's can't, is
Speaker 5: not that it's not open, It's that they want to
Speaker 5: do something that the public markets will not allow. Public markets,
Speaker 5: over the past two decades have become very vanilla, call
Speaker 5: it beta. If you want to do something unique, if
Speaker 5: you want to finance the next generation of infrastructure, you
Speaker 5: want to build a project, you want to build data centers,
Speaker 5: you want to build power, you want long data do
Speaker 5: you want special features that's just not available, you come
Speaker 5: to someone like us, and increasingly private markets are offering
Speaker 5: really compelling solutions to investment grade borrowers.
Speaker 2: Let's talk about some of those deals, IC and c
Speaker 2: AB and beth Intel recently. What's the common theme behind
Speaker 2: those three company for you?
Speaker 5: The common theme for US is excess return relative to
Speaker 5: the credit of the underlying borrower. The common theme for
Speaker 5: the issuer is they are achieving something they could not
Speaker 5: otherwise achieve. When we did ABMBV some six billion dollars
Speaker 5: years ago, everyone around us, our peer group, that was interesting.
Speaker 5: That was one off in COVID. You'll never do another one.
Speaker 5: Another investment grade private deal. One hundred billion dollars later,
Speaker 5: we're still doing investment grade private deals. And I see
Speaker 5: nothing but a long line of interesting borrowers and interesting situations.
Speaker 5: Because think about what we're doing in the world today.
Speaker 5: We are building infrastructure, We are building and changing energy transition.
Speaker 5: We're just at the beginning of this. We are building
Speaker 5: the next generation of data and power. Every one of
Speaker 5: those things is long dated. Many of them are complex financings.
Speaker 5: Some will go to the banking system, some will go
Speaker 5: to public markets, but increasingly for these more complicated financings
Speaker 5: and long dated financings, Private market investment grade is where
Speaker 5: borrowers are coming.
Speaker 2: There was a theme an invested and you've talked about
Speaker 2: this with me yourself, privately global industrial renaissance. What are
Speaker 2: you talking about?
Speaker 5: We're talking about is this massive need for capital. I mean,
Speaker 5: you can believe or not believe all the figures that
Speaker 5: are out there, but when you add up the amount
Speaker 5: of money that is needed for energy transition, the amount
Speaker 5: of money that is needed to fix our infrastructure, the
Speaker 5: amount of money that will be needed to build data
Speaker 5: centers and power to supply them, much less to connect
Speaker 5: and redo our power lines. You're talking about the amount
Speaker 5: of money that's been spent since the invention of five,
Speaker 5: all with the backdrop of the US government borrowing two
Speaker 5: trillion dollars to finance itself. On a current basis, this
Speaker 5: is not a question of will private markets grow. The
Speaker 5: question will be how much. Yes, public markets will continue
Speaker 5: to play a really important role, banking system, really important role.
Speaker 5: But this tool, this notion of private investment grade, has
Speaker 5: really not been available to CFOs or others arranging financing
Speaker 5: and increase.
Speaker 2: It will be how labor intensive? Is this for you
Speaker 2: and as you do more deals, do you get a
Speaker 2: benefit from that that you are able to replicate things
Speaker 2: and use less and less people.
Speaker 5: This is scars of experience. So these are all labor intensive,
Speaker 5: and that is actually what the competitive advantage is. The
Speaker 5: investment grade bond market became so efficient and so low
Speaker 5: cost that financial firms stopped allocating resources to it. There
Speaker 5: weren't just not any money in doing that, and so
Speaker 5: the market is very available, but it is very plain vanilla.
Speaker 5: Almost no one has built what we've built. When you
Speaker 5: look at employment at Apollo, the greatest group of employment
Speaker 5: four thousand people, some eight billion dollars that we've spent
Speaker 5: over the past fifteen years all goes to what we
Speaker 5: call origination. Now, not all of these originators are out
Speaker 5: calling on investment grade borrowers. Some are running other types
Speaker 5: of origination vehicles, aircraft finance, fleet finance, receivables finance, inventory finance,
Speaker 5: infrastructure finance. Increasingly, this is.
Speaker 2: How America borrows introduce City and a twenty five billion
Speaker 2: dollar partnership. What's behind that, It's that acknowledgment from you
Speaker 2: that you've got more cash than you know what to.
Speaker 5: Do with I think it's an acknowledgment that origination, the
Speaker 5: control of the product is actually what has value, and
Speaker 5: some of that origination we're going to build ourselves, and
Speaker 5: we've built more of it than any But let's face it,
Speaker 5: we a whole industry is short origination. To the extent
Speaker 5: we can find a meeting of the minance with city,
Speaker 5: that's fabulous. And I think the bigger theme here is
Speaker 5: the banking system, particularly one of the big four banks,
Speaker 5: is actually figuring out what we believe all along. We
Speaker 5: don't want what the bank wants. We don't want the
Speaker 5: bank's customer. We want the asset the bank. We can't
Speaker 5: offer advice, m and A, derivatives hedging, foreign exchange, payments,
Speaker 5: credit cards, or any other service the bank wants to
Speaker 5: offer those things. The bank sometimes wants the loan, but
Speaker 5: more often than not does not want the loan.
Speaker 2: Who do you think fielded the most calls that day
Speaker 2: when that was announced that partnership. Was it Jane Fraser,
Speaker 2: an annoyed asset managers or was it you an annoyed bankers.
Speaker 5: From the comparing of notes last night, it was Jane.
Speaker 2: It was Jane. Did you get the calls you saw
Speaker 2: from AHI.
Speaker 5: We definitely got a few calls.
Speaker 2: Do you get the sense that this is the beginning
Speaker 2: of something bigger? Twenty five billions the number with citsy
Speaker 2: just give me an idea of what this looks like
Speaker 2: further down the line. Does it include other banks too?
Speaker 5: I think it does, and now I think it is
Speaker 5: difficult to serve lots of people in the same way
Speaker 5: with the same terms. But the City partnership is focused
Speaker 5: on a certain type of borrower. I think you'll see
Speaker 5: international partnerships. I think you'll see investment grade partnerships. I
Speaker 5: think you'll see infrastructure related partnerships. I do think that
Speaker 5: we are becoming a partner in some ways to the
Speaker 5: banking system, rather than how it is portrayed in the press,
Speaker 5: which is, you know, a fierce competition over everything.
Speaker 2: This conversation so far has really been about how the
Speaker 2: financing give companies, particularly in this country, is changing, how
Speaker 2: the company's doing the financing is shifting, the emphasis being
Speaker 2: on private markets. Part of your vision is how investing
Speaker 2: is going to change as well, So let's spend some
Speaker 2: time on that. How is investing going to change? How
Speaker 2: do we think about public versus private now, And how
Speaker 2: do you hope we're going to think about it in
Speaker 2: years to come?
Speaker 5: Look for me, this is your forty. It's sometimes hard
Speaker 5: to believe I've been doing it this long, but we
Speaker 5: grew up thinking private was risky and public was safe.
Speaker 5: And probably forty years ago that was true. Private was
Speaker 5: three products private equity, venture capital, and hedge funds, all
Speaker 5: three of which can be risky, but done the right
Speaker 5: way are excellent investments. And public was eight thousand public companies,
Speaker 5: diversified portfolios of stocks and bonds. Let's just say that's
Speaker 5: not how the world is today. The world that we
Speaker 5: see private is safe and risky and public is safe
Speaker 5: and risky. And if that's true, everything we know about
Speaker 5: portfolio management, the way we construct portfolios today is going
Speaker 5: to change. Think of the typical investor a very bland
Speaker 5: I say, a three flavor ice cream portfolio, sure stocks, bonds,
Speaker 5: and a little bit of alternatives. Why well, because when
Speaker 5: something is risky, you put it in a small bucket
Speaker 5: called alternatives, you watch it carefully, and you demand high
Speaker 5: returns out of it. But if private is just another form,
Speaker 5: I think what you're going to see is the whole
Speaker 5: business of what I call replacement fixed income, which today
Speaker 5: means investment grade public credit. I think is going to
Speaker 5: be investment grade public and investment grade private eighteen months
Speaker 5: from now. I do not believe investors will actually know
Speaker 5: the difference between investment grade public and investment grade private.
Speaker 5: It will not be the issuers, It will not be
Speaker 5: the size, it will not be the ratings, it will
Speaker 5: not even be the liquidity. Everything that exists in the
Speaker 5: public markets, repo borrowing, market making, daily pricing, is coming
Speaker 5: to the private markets.
Speaker 2: What is the total addressable market? What kind of numbers
Speaker 2: are we thinking about?
Speaker 5: We're talking about massive marketplace when we look at the
Speaker 5: entirety of our industry, hired of our industry has been
Speaker 5: built out of the alternative bucket of institutional investors. The
Speaker 5: fixed income bucket, which is what I'm talking about now,
Speaker 5: is fifty percent larger than the alternative bucket and is
Speaker 5: mostly one hundred percent private. Works to be public.
Speaker 2: Investment credit I could see different to debt. Can you
Speaker 2: tell me how that's going to be transformed, and whether
Speaker 2: some of the companies that typically would be going public
Speaker 2: are going to stay private. Whether we've got to see
Speaker 2: a big shift in capital markets over the next five
Speaker 2: years or so.
Speaker 5: On that front, well, we're seeing it already. So this
Speaker 5: is a two prong to answer, which is eight thousand
Speaker 5: public companies is now four thousand public companies. Fewer than
Speaker 5: one hundred companies go public every year, and more than
Speaker 5: one hundred companies go private. There do not seem to
Speaker 5: be compelling reasons for companies to be public, particularly with
Speaker 5: what's happened on the investing side. So much of our
Speaker 5: market today is indexed and correlated. Think of passive now
Speaker 5: sixty seventy percent of the overall marketplace. Active management, which
Speaker 5: historically has been the buying and selling of stocks, has
Speaker 5: really been a very, very difficult place to be, has
Speaker 5: failed to beat the index ninety plus percent of the
Speaker 5: time for twenty years. I think we're going to see
Speaker 5: an evolution also take place in equity. It's going to
Speaker 5: happen more slowly. In fixed income, we are going to
Speaker 5: see fixed income replacement, public and private essentially come together.
Speaker 5: And the reason I know that is we're seeing it
Speaker 5: every single day. And in fixed income we have arbiters
Speaker 5: of credit quality rating agencies who tell investors that something
Speaker 5: public and something private is of the same quality in
Speaker 5: equity we lack those arbiters. But nonetheless, I think investors
Speaker 5: are beginning to understand when ten stocks are thirty five
Speaker 5: to forty percent of your portfolio and four stocks have
Speaker 5: determined all your returns for the past four years, and
Speaker 5: one stock has basically been one hundred percent of your quarter.
Speaker 5: I mean, think of what we've done as a country.
Speaker 5: We've taken the largest pool of savings in the world
Speaker 5: four oh one K, twelve to thirteen trillion dollars from
Speaker 5: a group of people who need retirement savings more than evident.
Speaker 5: What are they own? They own daily liquid stock index
Speaker 5: funds generally S and P for fifty years. Why well,
Speaker 5: we have a mistaken belief that public is safe and
Speaker 5: private is risky. You look at the best retirement system
Speaker 5: anywhere in the Western world in Australia, where they've introduced
Speaker 5: superannuation forty years ago. Just a fancy way of saying
Speaker 5: is they gave the equivalent of four oh one K
Speaker 5: investors access to private markets. The returns have been nothing
Speaker 5: short of spectacular. Outcomes for investors can be not a
Speaker 5: little better fifty and sixty percent better.
Speaker 2: You know the view here public is transparent and private
Speaker 2: is a payak. How do you change that view?
Speaker 5: Well, I think it's going to happen in fixed income.
Speaker 5: I think when you get to daily pricing, when you
Speaker 5: get to daily liquidity, when you can see a market.
Speaker 5: But let's not fool ourselves. Markets are different than we
Speaker 5: think they are. Everything changed in two thousand and eight,
Speaker 5: as it should as a response to the financial crisis,
Speaker 5: but we just did not experience as investors those changes
Speaker 5: because right after we change the rules, we printed eight
Speaker 5: trillion dollars and everything went up into the right. One
Speaker 5: of the most interesting things that changed there is no
Speaker 5: liquidity in public fixed income the SATs I've seen it
Speaker 5: takes five days to sell an investment grade corporate bond.
Speaker 5: So when you see a quote, is that liquid, Well,
Speaker 5: we feel good because it's public, it's there, we can
Speaker 5: see it. I do think we're going to end up
Speaker 5: not caring in fixed income in the next eighteen months
Speaker 5: as to whether something is public or private. The comfort
Speaker 5: that people are developing in private markets on the fixed
Speaker 5: income side, I believe will eventually extend to equity and
Speaker 5: we will see equity also adopt side by side with public.
Speaker 5: As I sometimes joke investors will own equity that is
Speaker 5: private rather than private equity, the difference being the leverage.
Speaker 2: You say, wait, you mean investors to regulate to say
Speaker 2: it the same way.
Speaker 5: I think they do. I mean, the conversation with regulators
Speaker 5: is actually a fascinating one because clearly change is scared.
Speaker 5: But the typical conversation is every dollar of borrowing that
Speaker 5: moves outside of the banking system to the investment marketplace.
Speaker 5: And let's face it, there are only two choices for regulators.
Speaker 5: Money in an economy can come from investors or from banks.
Speaker 5: There's no third choice. So every dollar that moves actually
Speaker 5: de levers the banking system and makes it safer, and
Speaker 5: people recoil in shock. And this is just math. A
Speaker 5: bank is levered twelve to fourteen times. The typical institutional
Speaker 5: investor is levered zero. The typical mutual fund levered zero,
Speaker 5: typical BDC levered one point five times, typical retirement services
Speaker 5: company levered eight times. It is deleveraging. The second is disclosure.
Speaker 5: We think it's not transparent. The typical bank disclosure says
Speaker 5: loans to customers and loans to companies. You click on
Speaker 5: our website you can see every security we own every quarter.
Speaker 5: Then you talk about maturity transformation. Maturity transformation is really
Speaker 5: where the economy has suffered and financial markets have suffered.
Speaker 5: Are in business to do maturity transformation. They borrow shortened
Speaker 5: form of deposits and lend long in form of loans.
Speaker 5: That's not a bad thing, that's just how they're set up.
Speaker 5: In the investment marketplace, generally, you're talking about investors who
Speaker 5: are matched from a maturity point of view. And the
Speaker 5: final thing that I always sit with regulators, what percentage
Speaker 5: of assets in the US banking system are investment grade?
Speaker 5: They don't know. We have a perception that they're all
Speaker 5: investment grade, but the reality is about sixty percent of
Speaker 5: bank assets our investment grade. You look at a balance
Speaker 5: sheet like ours and just as an example, we're ninety
Speaker 5: plus percent investment grade. And so it's change, but it
Speaker 5: is actually changed. That is making the system more robust
Speaker 5: and more diversified. And we let's make no mistake, we
Speaker 5: are the envy of the world. We the US are
Speaker 5: the envy of the world. In Europe, they are squeezing
Speaker 5: the banking system through Boslin game, but they haven't yet
Speaker 5: decided to allow investors to fill that gap, and there
Speaker 5: are questions, why are we struggling with financial markets? Well,
Speaker 5: you're squeezing the banking system and you're not allowing investors
Speaker 5: to fill the gap.
Speaker 2: Have you had this conversation with a senator from Massachusetts?
Speaker 2: As that conversation ever happened.
Speaker 5: It hasn't, but I welcome it. I've spent I spend
Speaker 5: lots of time in DC and elsewhere speaking to regulators
Speaker 5: because we are in a really dynamic phase. Everything that
Speaker 5: we think works the way it works has changed, and
Speaker 5: we're about to experience and are experiencing the changes that
Speaker 5: were made in two thousand and eight in response to
Speaker 5: the financial crisis.
Speaker 2: Speaking of changes, Washington, DC is becoming increasingly interventionist. You
Speaker 2: compared some of the benefits of doing business in America
Speaker 2: and doing business in Europe. Doing business in America is
Speaker 2: anturally not as easy as it used to be, and
Speaker 2: it may well get harder. What's your view on where
Speaker 2: we're heading?
Speaker 5: You may be right, but it's all relative. This is
Speaker 5: the single best market to be in at this point
Speaker 5: in time. Barnutt.
Speaker 2: When we spoke before Christmas and we talked about the
Speaker 2: choices on the menu, then for the upcoming election. You
Speaker 2: went too impressed. The menu's changed a little bit. What's
Speaker 2: your view?
Speaker 5: Well, since I'll be under banishment here if I give
Speaker 5: you a direct view, let me to say. The way
Speaker 5: I frame this is you are either more scared of
Speaker 5: four years of the status quo or more scared of
Speaker 5: four years of change. You just have to decide what
Speaker 5: you're more scared of. Me personally, I'm more scared of
Speaker 5: four years of the status quo.
Speaker 2: What's wrong with the status quo?
Speaker 5: I see a direction where the trend is not our friend.
Speaker 5: Right now? We are, as you suggest, we are the
Speaker 5: single best place to do business in the world. We
Speaker 5: are the luckiest people in the world. Can we screw
Speaker 5: it up? Yeah? We can. The notion that we are
Speaker 5: spending two trillion and excess of what we take in
Speaker 5: in peacetime with full employment does not vode well for
Speaker 5: the availability of capital to do what we need to
Speaker 5: do for the next generation. We're spending the next generation's
Speaker 5: money currently.
Speaker 2: Do you see any one of the campaigns that's to do?
Speaker 5: And I think about that on the campaign trail though
Speaker 5: in reality, let's hope. All we can hope for is
Speaker 5: better governance.
Speaker 2: I've said repeatedly on Bloomberg Surveiymans on Bloomberg TV, on
Speaker 2: Bloomberg Radio for years that America has the privilege, the
Speaker 2: unique privilege of acting recklessly. Are we losing that not yet?
Speaker 5: We have a long way to go. We have lots
Speaker 5: of examples around the globe of people who have acted
Speaker 5: recklessly for a much longer period of time than we
Speaker 5: have been acting recklessly. But we also have obligations that
Speaker 5: others do not. Right now, we are the beneficiary of
Speaker 5: being the strongest economy, the strongest capital market, the strongest military,
Speaker 5: and the best place to do business. I mean, if
Speaker 5: you tick off what's happened over the past years here,
Speaker 5: we may not like how we got here and how
Speaker 5: we financed it. Three years ago we decided to build infrastructure.
Speaker 5: We allocated two trillion dollars. None of that's built yet,
Speaker 5: it's all being built. Two years ago, we spent fifty
Speaker 5: two billion dollars of semiconductor subsidies to build semiconductors. Here,
Speaker 5: not a single plant is open. It's all being built.
Speaker 5: A year ago Inflation Reduction Act to encourage the manufacturer
Speaker 5: of renewables one point three to two point three trillion,
Speaker 5: No one really knows. Not a single plant is opened.
Speaker 5: We are the beneficiary and the largest recipient of foreign
Speaker 5: direct investment three years in a row. So people around
Speaker 5: the globe are actually figuring out we're better off here.
Speaker 5: And something tells me we're ramping defense production. All of
Speaker 5: those things are fiscally stimulative and positive for employment. Or
Speaker 5: by the way, we have no legal immigration. This sets
Speaker 5: us up very well fiscally for a strong economy.
Speaker 2: Which I think we're seeing at a reserve is kind
Speaker 2: of interest rates by fifty basis points. Are you in
Speaker 2: tolston slock camp? And you can agree with, agree or
Speaker 2: disagree with. Tulson of course works here. He believes his
Speaker 2: economy doesn't need rate cuts. We're in a great place.
Speaker 2: Do you share that view?
Speaker 5: I said it. I was, I guess unfortunate to be
Speaker 5: on TV an hour after the rate cut. I said,
Speaker 5: this was a very very expensive insurance policy. What's expensive
Speaker 5: about it the notion that we would cut rates. Financial
Speaker 5: markets are wide open, equities are at all time high,
Speaker 5: financing is available, real estate prices are going up in
Speaker 5: every market, and yet we're stimulating, and we're stimulating fiscally.
Speaker 5: It is not clear that we need more rate cuts
Speaker 5: at this point in time, and to the extent we
Speaker 5: encourage growth, and growth was very strong, as you saw
Speaker 5: from GDP for the quarter. To the extent we accelerate
Speaker 5: the economy and have to go in the other direction,
Speaker 5: that would not be a good deck.
Speaker 2: Just pause. You think the FED might have to start
Speaker 2: hiking interest rates again in twenty five.
Speaker 5: I'm not saying that yet. I'm just saying I see
Speaker 5: no reason for the cutting of rates right now. So
Speaker 5: am I in the Torston camp. I'm absolutely in the
Speaker 5: Torston camp. And it's my privilege to have him down
Speaker 5: the hall. I make sure to check in with him
Speaker 5: every morning.
Speaker 2: I do as well, Mark Ryan, this was a privilege,
Speaker 2: a pleasure, good luck for the next five years, and
Speaker 2: I hope it told you every year.
Speaker 5: Every year you get to do it.
Speaker 2: Mark, Thank you, sir, appreciate it. This is the Bloomberg
Speaker 2: Seventans podcast, bringing you the best in markets, economics, angiopolitics.
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