WEBVTT - Markets, Commodities, And Twitter (Podcast) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.520 with essential market moving news. Find the Bloomberg Markets podcast 0:00:15.560 --> 0:00:18.439 called Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:23.800 at Bloomberg dot com slash podcast. Since we have Lisa here, 0:00:23.920 --> 0:00:26.040 we figured we'd booked a whole bunch of super smart 0:00:26.160 --> 0:00:28.680 rates guests, So pream Isra is the first on our 0:00:28.760 --> 0:00:30.479 docket to join us. Pre a great to have you 0:00:30.520 --> 0:00:33.480 on the program. Um, I'm gonna kind of sit back 0:00:33.479 --> 0:00:37.479 while you and Lisa explain to me what's going on. 0:00:37.720 --> 0:00:40.159 I know that what the curve is inverted for like 0:00:40.200 --> 0:00:43.879 the third time, maybe the fourth time, right, Um, and 0:00:44.840 --> 0:00:48.040 Jay help me out. Lisa, Sorry, Lee, Lisa helped me out. 0:00:48.120 --> 0:00:51.440 Jay Powell pays attention to the three month tenure, but 0:00:51.479 --> 0:00:55.200 we're all fixated on the two year, ten year. Well, okay, 0:00:55.200 --> 0:00:57.320 so there are yield curve in versions. People. If it's 0:00:57.320 --> 0:01:00.480 waiting for this, you're seeing people really bid into the 0:01:00.640 --> 0:01:04.959 long end. There is this expectation for some sort of recession. 0:01:05.560 --> 0:01:08.360 But the thing that really has struck me in Matt. 0:01:08.360 --> 0:01:10.559 You know, to me, the fascinating aspect is that people 0:01:10.560 --> 0:01:13.480 are already pricing in rate cuts, and a lot of 0:01:13.520 --> 0:01:16.160 people are pushing back and saying it is too soon 0:01:16.680 --> 0:01:20.560 to predict the FED will curtail their rate hiking cycle. 0:01:21.120 --> 0:01:23.640 Can you weigh in on that, this idea that there 0:01:23.720 --> 0:01:27.000 is going to be some sort of retracement of a 0:01:27.000 --> 0:01:32.400 federal reserve that is dead set uncurtailing inflation. Sure, thanks 0:01:32.400 --> 0:01:34.600 for having me, and I love all the rich talc. 0:01:35.280 --> 0:01:38.480 It's it's really the heart of the issue right now. 0:01:38.800 --> 0:01:41.479 So you know, I think it's fair the market pricing 0:01:41.480 --> 0:01:44.000 in these cuts. What I struggled with not so much 0:01:44.000 --> 0:01:46.679 as the concern. I mean, the FED is likely to 0:01:46.760 --> 0:01:50.400 hike at the fastest space into the highest level really 0:01:50.440 --> 0:01:53.240 since the nineties, so it is a significant amount of frightening. 0:01:53.320 --> 0:01:55.600 We also have balance sheet run off, so there is 0:01:55.600 --> 0:01:57.600 a lot of tightening, and so I think the concern 0:01:57.680 --> 0:02:01.240 about growth and the consumer six months out, one year out, 0:02:01.280 --> 0:02:04.120 I think is legitimate, and which is why we're actually 0:02:04.120 --> 0:02:07.000 long long and real rates. We went long last week. 0:02:07.400 --> 0:02:10.600 What I struggled with is the pricing and of rate cuts. 0:02:10.919 --> 0:02:12.760 I think the FED is telling us, and I'm taking 0:02:12.760 --> 0:02:15.840 them at face value. They've changed their reaction function. They 0:02:15.880 --> 0:02:19.720 care about inflation unconditionally, which means, even though they know 0:02:19.760 --> 0:02:23.080 that they have a dual mandate, if growth slows down, 0:02:23.440 --> 0:02:26.160 I think they'll view it as collateral damage. They really 0:02:26.160 --> 0:02:29.280 have to get price stability and their inflation credibility back 0:02:29.320 --> 0:02:31.880 on track. So if inflation stays higher, we're looking for 0:02:31.919 --> 0:02:36.880 another actually above consensus headline inflation number this week. We're 0:02:37.000 --> 0:02:40.280 concerned that that's going to make the FED continue to hike, 0:02:40.880 --> 0:02:43.320 and I think the market pricing and cuts right after 0:02:43.440 --> 0:02:45.959 the last hike that I struggled with, I think they're 0:02:45.960 --> 0:02:48.120 going to stay on hold for a while, so that 0:02:48.240 --> 0:02:51.200 inversion that Matt's talking about. I think that inversion stays 0:02:51.320 --> 0:02:53.720 deepens further because we're all going to wait for the 0:02:53.720 --> 0:02:56.440 FED to respond to slower growth, and they're going to 0:02:56.520 --> 0:02:59.400 be their hands are a bit tied until inflation gets 0:02:59.400 --> 0:03:02.119 closer to percent. I don't think they'll have that. It's 0:03:02.120 --> 0:03:04.800 two percent the number that we're looking for pre I 0:03:04.840 --> 0:03:08.600 was reading a note from Ben Emmons over at Medley 0:03:08.639 --> 0:03:12.800 Advisors this weekend, and he says, um an unemployment rate 0:03:12.840 --> 0:03:17.880 of sorry, uh uh, an inflation rate of three point 0:03:17.960 --> 0:03:20.720 six percent would be three and a half percent would 0:03:20.720 --> 0:03:24.160 be headed in the right direction. I think it's headed 0:03:24.200 --> 0:03:26.200 in the right direction. It can help them slow down 0:03:26.200 --> 0:03:28.560 the place of hikes like we're looking for after this 0:03:29.560 --> 0:03:33.320 fifties twenty five. But I think to ease you have 0:03:33.400 --> 0:03:36.680 to have two percent very clearly in front of you. 0:03:36.760 --> 0:03:38.560 I think three and a half is still too high. 0:03:38.600 --> 0:03:40.560 I mean, if we're a two and a half, that's 0:03:40.560 --> 0:03:43.480 a big decline and growth is slowing significantly. I think 0:03:43.600 --> 0:03:45.800 that might be mode level where they can cut. But 0:03:45.880 --> 0:03:48.120 absolutely I think getting to three three and a half, 0:03:48.640 --> 0:03:51.720 they'll say, look, their success, our tightening is having an impact. 0:03:51.800 --> 0:03:54.880 We can slow down, we can pause the hiking cycle. 0:03:55.200 --> 0:03:58.040 I think cutting is just a higher hurdle. Right. We're 0:03:58.040 --> 0:04:01.800 speaking with Permsra Ahead of Rates Strategy over at TV Securities. 0:04:01.880 --> 0:04:04.640 Prior earlier this morning, we were speaking with Sonalza Sai, 0:04:05.120 --> 0:04:09.480 a Franklin Templeton who said she expects inflation headline and 0:04:09.600 --> 0:04:12.480 c p I to remain at about seven and a 0:04:12.560 --> 0:04:17.840 half to eight percent at year end. What kind of 0:04:18.080 --> 0:04:21.279 FED funds rate would that imply if the Fed really 0:04:21.360 --> 0:04:25.720 saw that inflation, Yes, was trending down, but only by 0:04:25.800 --> 0:04:30.000 about a percentage point. Oh that's not a good That's 0:04:30.279 --> 0:04:33.520 much higher than our forecast. We've got FED funds closed 0:04:33.600 --> 0:04:36.159 like three seventy five by your en four percent biole 0:04:36.320 --> 0:04:39.279 next year with a five and a half percent cp I. 0:04:39.360 --> 0:04:42.000 So if you're telling me it's seven percent, I mean 0:04:42.080 --> 0:04:45.400 I don't think we go up necessarily a lot more 0:04:45.440 --> 0:04:47.680 than four four and a quarter, but I think it's 0:04:47.680 --> 0:04:49.960 going to make that it makes it very hard for 0:04:50.000 --> 0:04:53.280 the Fed to sound responsive to growth. Let's say, let's 0:04:53.320 --> 0:04:56.359 sort of reframe this in terms of the CPI print 0:04:56.400 --> 0:04:59.599 that we get this week on Wednesday. Is the risk 0:05:00.080 --> 0:05:03.760 of possible upside or a downside surprise? What's the bigger 0:05:03.880 --> 0:05:09.480 risk based on market positioning for rates? I actually think, 0:05:09.520 --> 0:05:12.160 I mean we're looking for upside surprise because I think 0:05:12.200 --> 0:05:14.880 even though oil prices have fallen, they didn't really fall 0:05:14.920 --> 0:05:18.599 in June. But I think the markets more vulnerable to 0:05:18.680 --> 0:05:21.840 a weaker surprise, meaning you know, we were sort of 0:05:22.160 --> 0:05:25.119 we've priced in high inflation, and so if you start 0:05:25.200 --> 0:05:28.160 to see weaker inflation prints, I think these FED hikes 0:05:28.160 --> 0:05:30.839 start to get taken out. The idea maybe the touts 0:05:30.960 --> 0:05:33.760 pricing will go down, but I do think rates will fall. 0:05:33.800 --> 0:05:36.200 I mean we've risen a lot, even in the front end, 0:05:36.760 --> 0:05:39.640 so I think now with growth concerns sort of front 0:05:39.640 --> 0:05:42.360 and center, a weaker inflation, and I should say it's 0:05:42.360 --> 0:05:45.080 not just headline, it's core, and it's details of the core. 0:05:45.400 --> 0:05:47.719 If all the decline is driven by airline fares, I 0:05:47.720 --> 0:05:50.000 think the market should ignore it. If it's driven by 0:05:50.040 --> 0:05:53.440 shelter service inflation, the consumer is pulling back and therefore 0:05:53.800 --> 0:05:56.480 service inflation is slowing down. I think the market is 0:05:56.480 --> 0:05:58.360 going to say, great, now the FED can slow down 0:05:58.480 --> 0:06:01.520 hikes and that doesn't result in a recession. And so 0:06:01.720 --> 0:06:04.040 I think some of the real move this, you know, 0:06:04.320 --> 0:06:07.080 inversion of the curve or over the FED over doing 0:06:07.080 --> 0:06:10.000 it risk. I think that starts to come off. I 0:06:10.000 --> 0:06:12.080 think it's truly for it. I think we only see 0:06:12.120 --> 0:06:14.520 that sign closer to your end, but but that's the risk. 0:06:14.880 --> 0:06:16.680 Pria thanks so much for joining us. Pre A Miser 0:06:16.720 --> 0:06:19.840 their managing director and global head of rate strategy at 0:06:19.880 --> 0:06:23.560 t D Securities. So, Lisa, I saw that interview they 0:06:23.560 --> 0:06:25.560 do with Nale Decide this morning. I thought it was 0:06:26.000 --> 0:06:30.839 fantastic and both Priya and Sinale are have been going 0:06:30.960 --> 0:06:33.080 long on the long end of the curve, right is 0:06:33.120 --> 0:06:36.880 that is that consensus right now? Basically people see a 0:06:36.960 --> 0:06:40.599 more consistent outlook over the next ten to thirty years 0:06:40.640 --> 0:06:43.520 than they do over the next two months. That's my 0:06:43.600 --> 0:06:45.719 takeaway as we look at a market that is highly 0:06:45.760 --> 0:06:47.880 tollowed off, as we look at that market, and as 0:06:47.880 --> 0:06:51.560 we focus on Way. Paul Sweeney is out this week 0:06:51.720 --> 0:06:54.960 on the Big Island. Lisa just came back. Magnum p I. 0:06:55.520 --> 0:06:59.800 The Robin's nest was demolished in two thousand eighteen. This 0:07:00.000 --> 0:07:07.039 is Bloomberg. Let's go to Darway cong right now and 0:07:07.080 --> 0:07:10.080 talk about the commodities portion of that equation. He's a 0:07:10.120 --> 0:07:13.120 portfolio manager and head of Commodities over at d w 0:07:13.520 --> 0:07:17.160 S Group. Darway. Thanks so much for joining us. Um 0:07:17.200 --> 0:07:20.679 are we seeing commodities prices turned down? I've seen charts 0:07:20.720 --> 0:07:23.680 recently the show. You know, not just the aggs, but 0:07:23.840 --> 0:07:26.760 also the metals and the oils start to turn over, 0:07:26.840 --> 0:07:29.200 even though we still have this natural gas story in Europe. 0:07:30.760 --> 0:07:34.680 Uh Hi, Matt, thank you for inviting me today. Yes, 0:07:34.720 --> 0:07:37.120 we do see quite a bit of a correction recently 0:07:37.760 --> 0:07:41.240 across the board across all commodities and your rights across 0:07:42.360 --> 0:07:46.720 energy complexes, cross based metal and certainly agriculture as well. 0:07:47.040 --> 0:07:49.480 But we do think the drivers behind each part of 0:07:49.520 --> 0:07:54.120 the sector is different, so plus energy. Clearly energy is 0:07:54.160 --> 0:07:58.680 most directly related to people's concerns about the session and 0:07:58.800 --> 0:08:01.360 the demand correct in there. It could be very severe 0:08:01.720 --> 0:08:05.960 should we have a deep prolonged recession, but we do 0:08:06.080 --> 0:08:10.040 think right now that's a little bit overdone from the 0:08:10.120 --> 0:08:14.400 energy price correction perspective. On the natural gas side versus oil, 0:08:14.920 --> 0:08:18.400 US natural gas price corrected much more than the global 0:08:18.640 --> 0:08:21.840 natural gas price actually going opposite direction. Large part of 0:08:21.880 --> 0:08:25.560 that is driven by the recent vire freeport that caused 0:08:26.240 --> 0:08:28.520 the export to slow down, and we do think once 0:08:28.600 --> 0:08:34.080 to export blockage, what to reverse welcome to see the 0:08:34.120 --> 0:08:37.360 export pick up again, and then probably energy price, especially 0:08:37.400 --> 0:08:39.760 metural gas price wor pick up again as well. Darway's 0:08:39.800 --> 0:08:43.960 taking on the crude story on the oil, not the gas. 0:08:44.320 --> 0:08:46.520 I'm wondering what the floor and what the ceiling is 0:08:46.600 --> 0:08:50.240 for your expectations at this point, given that just a 0:08:50.280 --> 0:08:53.200 few months ago you saw the potential for a hundred 0:08:53.240 --> 0:08:58.240 and fifty five barrel and Brent and now we're seeing 0:08:58.280 --> 0:09:03.440 recession concerns overwhelmed some of the demand issues and really 0:09:03.480 --> 0:09:08.280 caused the clients. Um, that's a very good question of 0:09:08.520 --> 0:09:13.000 our earlier assumption really comes from the unknown from how 0:09:13.120 --> 0:09:15.839 much would the Russian oil be off market? I think 0:09:15.920 --> 0:09:20.120 at the beginning of March there has really been very 0:09:20.480 --> 0:09:25.000 little clarity about how deep the sension could go and 0:09:25.040 --> 0:09:30.640 how much impact there are in terms of just ability 0:09:30.720 --> 0:09:34.280 for for replacement for the oil. But we have found 0:09:34.280 --> 0:09:36.440 since then, and I think the market recognized that is 0:09:36.920 --> 0:09:40.960 the exports from Russia has been disrupted, but not to 0:09:41.040 --> 0:09:44.720 the large degree that could have happened. And then even 0:09:44.720 --> 0:09:47.720 though Europe is about to impose more ascension hasn't started yet, 0:09:47.720 --> 0:09:51.680 so Europe is still buying oil from Russia. UM that 0:09:52.080 --> 0:09:56.800 that replacement of demands from Asia has been very palpable 0:09:56.880 --> 0:09:59.800 and was a increase buying from both India and China. 0:10:00.440 --> 0:10:04.040 They can take up what the Europe doesn't buy. So 0:10:04.520 --> 0:10:09.760 we're seeing less supply disruption than earlier expected. So that's 0:10:09.760 --> 0:10:12.320 why the price has declined. What's your outlook for China 0:10:12.400 --> 0:10:14.720 and how much does that play into the price because 0:10:14.760 --> 0:10:17.640 they've been locked down and I know, Um, that's also 0:10:17.679 --> 0:10:22.480 stopped a lot of driving demand. Uh trying. That's an 0:10:22.480 --> 0:10:25.240 interesting story because in terms of the crew purchase, they 0:10:25.280 --> 0:10:28.520 actually haven't declined very much, so the country is still 0:10:28.559 --> 0:10:32.680 important crewe uh even though the demand part is impacted 0:10:32.679 --> 0:10:38.920 directly because of the traffic constraint. Um we're seeing China 0:10:39.040 --> 0:10:44.560 releasing some of the products of gasoline diesel, allowed that 0:10:44.679 --> 0:10:48.120 to export out of China recently. Still very limited by 0:10:48.160 --> 0:10:52.480 allowing that to occur, so we may see some more 0:10:52.520 --> 0:10:56.559 inventory freeda from China. Chinese stories are very interesting because 0:10:56.840 --> 0:10:59.520 it is a policy issue for China in terms of 0:10:59.559 --> 0:11:04.040 the COVID constraints. So near term we see the same 0:11:04.040 --> 0:11:08.040 concern on COVID, but once that would to to change 0:11:08.480 --> 0:11:11.920 onnticipating very large spending package. We just saw one recently 0:11:12.120 --> 0:11:15.520 with a recent a large MOM program that's worth about 0:11:16.120 --> 0:11:19.520 billion US dollars that that if that would to kick in, 0:11:19.559 --> 0:11:23.240 we'll want to see sharp reversal of demand from China. Darwai, 0:11:23.240 --> 0:11:25.920 thanks so much for joining us. Darway Kung there portfolio 0:11:25.960 --> 0:11:29.000 manager and head of Commodities over at d w S Group. 0:11:32.480 --> 0:11:35.720 Let's get over right now to Alex Webb Rights for 0:11:35.720 --> 0:11:40.040 Bloomberg Opinion and covers tech for us, and uh, he's 0:11:40.080 --> 0:11:42.679 going to talk about Twitter and exactly what's going on 0:11:42.720 --> 0:11:44.680 there with Elon Musk doing his you turn. I will 0:11:44.679 --> 0:11:46.560 tell you also, the Bloomberg Markets is brought to you 0:11:46.600 --> 0:11:50.680 by Commonwealth, supporting more than two thousand independent financial advisors 0:11:50.679 --> 0:11:53.400 with the solution they need to grow a thriving business, 0:11:53.720 --> 0:11:57.920 Commonwealth go where you grow. Visit Commonwealth dot com to 0:11:58.120 --> 0:12:01.839 learn more with that other way, Uh, let's get over 0:12:01.880 --> 0:12:04.520 to alex web and and find out what happens next. 0:12:04.640 --> 0:12:07.600 I think Alex to be fair, we none of us 0:12:07.640 --> 0:12:10.640 were really expecting Elon Musk to buy Twitter. Is that 0:12:10.720 --> 0:12:14.679 a fair statement. I mean, some people clearly were, because 0:12:14.679 --> 0:12:16.760 the share price got one stage, got very close to 0:12:16.760 --> 0:12:20.160 the offer price, but not for very long weeks and weeks, 0:12:20.200 --> 0:12:23.000 you know, not for a little while. There's been certainly 0:12:23.200 --> 0:12:26.360 a lot of very confusing messaging, and you know, Elon 0:12:26.440 --> 0:12:28.680 Musk says that she wants to buy it and then 0:12:28.960 --> 0:12:32.880 does something even before today, which seems to suggest very 0:12:32.960 --> 0:12:37.000 much the opposite. It clearly was not looking good because 0:12:37.000 --> 0:12:38.920 the the offer price was fifty four dollars twenty The 0:12:38.960 --> 0:12:42.679 share price is now in the low thirties particularly given 0:12:42.720 --> 0:12:45.959 the latest news, some analysts forecasting that it could fall 0:12:46.000 --> 0:12:49.520 as low as the low twenties. So um, just even 0:12:50.679 --> 0:12:55.439 cutting aside any Elon Must related whimsy, from pure financial perspective, 0:12:55.559 --> 0:12:57.280 it was very hard to see why he would want 0:12:57.360 --> 0:12:59.559 to do this deal. But he's already sealed it, so 0:12:59.600 --> 0:13:00.880 there was an you know, he's tied to it in 0:13:00.960 --> 0:13:03.280 a sense. Well that that's really where wanting to go, 0:13:03.440 --> 0:13:06.080 this idea that he's trying to back out of the deal. 0:13:06.160 --> 0:13:09.040 But the deal exists and is currently being debated in 0:13:09.120 --> 0:13:12.800 a Delaware chord, and you have Twitter board members saying 0:13:13.040 --> 0:13:14.880 you gotta buy this, and you've gotta buy it at 0:13:14.920 --> 0:13:17.840 fifty four and twenty cents. Is this all just a 0:13:17.840 --> 0:13:23.720 lot of drama around renegotiating price. That's hard to tell, Like, 0:13:23.800 --> 0:13:26.440 you know, that's essentially I've said this is someone earlier today. 0:13:26.440 --> 0:13:28.880 Actually that so many questions when you're going broadcasts to 0:13:28.920 --> 0:13:31.120 do with Elon Must, they ultimately come down to what 0:13:31.320 --> 0:13:34.680 is Elon thinking? And no one knows what Ellen is thinking. 0:13:34.760 --> 0:13:36.920 He may still wants to do the deal, just in 0:13:36.920 --> 0:13:38.720 a reduced form. He may not want to do the 0:13:38.760 --> 0:13:41.559 deal at all. Ultimately, I think that you know it 0:13:41.679 --> 0:13:44.440 was looking over priced. Now, if he really wanted to, 0:13:44.520 --> 0:13:46.120 could he raise that money? Yeah, of course he could. 0:13:46.120 --> 0:13:47.600 He could just sell down his test or stake. Does 0:13:47.600 --> 0:13:49.840 he want to sell down his test stake? Almost certainly 0:13:49.880 --> 0:13:52.560 not so. Um, it leaves him in a pickle where 0:13:52.600 --> 0:13:54.320 clearly the Dela where court is going to have to 0:13:54.320 --> 0:13:55.839 make some sort of decision. I think this would be 0:13:55.880 --> 0:13:58.520 one of the if not the biggest decision of this 0:13:58.600 --> 0:14:02.119 nature ever carried up ever taken by the court. Previously, 0:14:02.200 --> 0:14:04.439 there is evidence to suggests that they have forced these 0:14:04.440 --> 0:14:07.360 deals through. The case law that most people tend to 0:14:07.400 --> 0:14:09.760 site is in the meat industry twenty years ago, where 0:14:09.760 --> 0:14:13.040 a company had agreed a deal, the market collapsed and 0:14:13.080 --> 0:14:14.839 then they tried to say, oh, well you weren't didn't 0:14:15.040 --> 0:14:18.360 provide us ironically with full data, which it sounds very 0:14:18.360 --> 0:14:20.440 similar to what Ellen has been saying. And they were 0:14:20.440 --> 0:14:23.400 forced to do the deal anyway. And so, but that 0:14:23.440 --> 0:14:25.400 was a third three point two billion dollars deal. This 0:14:25.480 --> 0:14:27.600 is a forty four billion dollar deal. So there's a huge, 0:14:27.760 --> 0:14:31.400 huge difference there. Um, can he not simply pay the 0:14:31.440 --> 0:14:33.920 billion dollar breakup fee and walk away? I mean, he's 0:14:34.560 --> 0:14:38.200 super rich, right, It would be an expensive, um sort 0:14:38.240 --> 0:14:41.720 of mistake. I guess we would see there's a mistake. 0:14:41.760 --> 0:14:45.600 He probably wouldn't. But can he do that? Not if 0:14:45.640 --> 0:14:48.080 Twitter doesn't agree to it? Right? If they they? If 0:14:48.080 --> 0:14:50.120 Twitter saying look, you you've agreed to do this deal, 0:14:50.360 --> 0:14:52.360 you have to do this deal now. If the thing 0:14:52.400 --> 0:14:54.440 is with a breakup fee, is that is when both 0:14:54.480 --> 0:14:58.720 sides of the of the agreements say, oh, for whatever reason, 0:14:58.880 --> 0:15:03.000 we code determined that this is not going to work, 0:15:03.040 --> 0:15:05.440 for whatever the reasons might be, but irrespect to that, 0:15:05.480 --> 0:15:07.640 you've got to pay the breakup fee. For instance, that 0:15:07.680 --> 0:15:11.000 would be if for antitrust reasons they weren't allowed to 0:15:11.000 --> 0:15:12.560 do the deal. You'd still have to pay the breakup 0:15:12.600 --> 0:15:15.160 fee because you know, you've endured some damage over course 0:15:15.200 --> 0:15:17.960 that time. But just the buyer not one to do 0:15:18.000 --> 0:15:21.440 the deal. That is not enough to go actually the 0:15:21.480 --> 0:15:23.400 breakup fee and be done with it. Is there anyone 0:15:23.440 --> 0:15:27.480 standing by waiting in the wings? Any white night here, 0:15:27.880 --> 0:15:32.400 um even maybe a beige night. Well, we've not seen 0:15:32.400 --> 0:15:35.400 any big names reported, but there is over the years, 0:15:35.440 --> 0:15:38.360 there's been any any amount of speculation, you know, big 0:15:38.440 --> 0:15:40.520 names like Google for instance. Hard to see how that 0:15:40.560 --> 0:15:43.800 would be doable from an antitrust perspective, given that fundamentally 0:15:43.840 --> 0:15:47.880 YouTube is a social media channel. Um, but there are 0:15:48.680 --> 0:15:50.720 you hear some of these names like Oracle or sales Force, 0:15:50.760 --> 0:15:54.280 some less sexy names who you know clearly have the capital, 0:15:54.320 --> 0:15:57.040 and you know that far hose of data's valuable, particularly 0:15:57.040 --> 0:15:59.400 for in the advertising business, Alex. It's a bigger question, 0:15:59.440 --> 0:16:02.320 which is at what point does it become more damaging 0:16:02.360 --> 0:16:05.520 for Twitter to pursue and try to hold elon musk 0:16:06.920 --> 0:16:11.000 price tag versus cutting their losses, cutting a deal with him, 0:16:11.280 --> 0:16:14.600 letting him out, and trying to move on. And you 0:16:14.600 --> 0:16:17.080 could say that that pass that point has long since passed. 0:16:18.040 --> 0:16:19.800 They have clearly endured a lot of damage over the 0:16:19.800 --> 0:16:21.920 past few months and have in a certain amount of stasis, 0:16:21.920 --> 0:16:25.120 except I think clarity is something the shareholders almost certainly want. 0:16:25.440 --> 0:16:29.000 But if there's no path to moving the share price 0:16:29.080 --> 0:16:33.160 from the twenties and thirties to the fifties again, then 0:16:33.240 --> 0:16:35.560 this is the best deal for shareholders, right, And so 0:16:35.640 --> 0:16:38.320 that's why potentially that's why they're trying to fight for it. 0:16:38.560 --> 0:16:41.680 From the Tesla side, how concerning is it and how 0:16:41.760 --> 0:16:44.240 much do you start to hear some pushback about a 0:16:44.320 --> 0:16:49.160 CEO who can joke about an acquisition, who can make 0:16:49.240 --> 0:16:53.080 comments and make agreements without thinking them through, perhaps, or 0:16:53.880 --> 0:16:56.720 you know, just on a whim and try to backpedal 0:16:56.840 --> 0:16:59.480 just as quickly. I mean, has it had any material 0:16:59.520 --> 0:17:03.480 effect on the nuts and bolts of his business? Tesla 0:17:03.520 --> 0:17:05.919 shares are down. I think they're down something like, if 0:17:05.920 --> 0:17:08.360 I recall correctly, something like twelve percent since this this 0:17:08.760 --> 0:17:11.520 since the Twitter deal was announced. Now, whether there's a 0:17:11.520 --> 0:17:15.200 correlation between the two or whether that's the cause entirely, 0:17:15.520 --> 0:17:17.880 it is hard to say. It also suggests that all 0:17:17.920 --> 0:17:21.200 investment in Tesla is rational, which you could say isn't 0:17:21.200 --> 0:17:22.760 necessarily the case as well, when you look at some 0:17:22.800 --> 0:17:27.479 of the earnings fundamentals, it is clearly or has clearly 0:17:27.560 --> 0:17:29.760 been a distraction. But Elon runs a whole bunch of 0:17:29.760 --> 0:17:32.679 companies and they seem to distract from each other, and 0:17:32.760 --> 0:17:35.560 yet Tesla share prices where it is, so, you know, 0:17:36.720 --> 0:17:39.720 I think that the bigger risk would have been perhaps 0:17:40.000 --> 0:17:42.160 relationship with China, stuff like that. Is that, but that's 0:17:42.160 --> 0:17:44.760 probably more of a relation of risk for Twitter. I mean, 0:17:44.880 --> 0:17:46.720 there are so many different moving parts here that it's 0:17:46.800 --> 0:17:49.680 hard to kind of pin anyone down and saying that's 0:17:49.680 --> 0:17:53.040 been detrimental to this. Yes, there's so many moving parts 0:17:53.040 --> 0:17:56.240 to everything I'm finding this morning. Um. In terms of 0:17:56.600 --> 0:17:58.840 the deal, though, one thing I was thinking as I 0:17:58.880 --> 0:18:00.840 read through this over the weekend and Alex is that 0:18:01.320 --> 0:18:04.919 his friends he's got on board must be annoyed. His 0:18:05.000 --> 0:18:07.439 bankers must think, God, this guy waste so much of 0:18:07.440 --> 0:18:11.280 our time. His lawyers even must. I'm sure they're happy 0:18:11.280 --> 0:18:15.040 about the billing, but just unbelievable how much business this 0:18:15.080 --> 0:18:18.959 guy generates. Is it not hurtful to his relationships? I mean, 0:18:19.000 --> 0:18:21.240 if you're a lawyer, you're probably pretty happy, as you say, yeah, 0:18:21.240 --> 0:18:24.119 because your generates all billable hours. If your banker is 0:18:24.160 --> 0:18:26.040 a bit more complicated. It also depends where you are 0:18:26.200 --> 0:18:28.680 in the value chain. If you committed equity, then perhaps 0:18:28.760 --> 0:18:31.880 you're a little bit perturbed, although equally, did you want 0:18:31.880 --> 0:18:34.399 to be buying in at that price given the direction 0:18:34.400 --> 0:18:35.800 of travel. If you can get out of that, you 0:18:35.880 --> 0:18:38.240 might be quite happy. From the debt perspective, of course, 0:18:38.280 --> 0:18:40.000 the debt situation now, if there was a bridge, if 0:18:40.000 --> 0:18:42.080 there was bridging financing in there, and then all of 0:18:42.119 --> 0:18:44.520 a sudden you've got to find new financing. In the 0:18:44.560 --> 0:18:47.960 current climate, it would have been a significantly different ask 0:18:48.000 --> 0:18:50.240 because interest rates are so much higher. So again I'm 0:18:50.240 --> 0:18:52.200 sorry to be, you know, a little too equivocate a 0:18:52.240 --> 0:18:54.680 little bit, but it isn't a clear picture that everybody 0:18:54.720 --> 0:18:57.720 will be angry at him. I think clearly if you 0:18:57.800 --> 0:19:01.679 are Twitter, back to Lisa's original question that you know 0:19:02.240 --> 0:19:03.960 good Twitter wanted to get out of this. I'm sure 0:19:03.960 --> 0:19:05.919 Twitter is annoyed because they he's kind of come in 0:19:06.000 --> 0:19:08.400 throwing a metaphorical grenade into the business which has proven 0:19:08.440 --> 0:19:10.399 a distraction for however many months in his life, to 0:19:10.400 --> 0:19:13.119 prove a distraction for another few months. So those are 0:19:13.119 --> 0:19:15.720 the people I think are most put out right. Although 0:19:15.720 --> 0:19:17.760 you wonder how many employees really wanted to work for 0:19:17.800 --> 0:19:20.840 Elon Musk and I'll leave that a question. Alex Web, 0:19:20.880 --> 0:19:22.960 thanks so much for joining us. Alex Web their Bloomberg 0:19:23.000 --> 0:19:26.639 opinion calumnists who covers tech for us. Talking to us 0:19:26.680 --> 0:19:29.720 about the Elon Musk Twitter deal, I noticed everyone cares. 0:19:29.800 --> 0:19:33.560 Even people who are normally covering rates have commented on 0:19:33.600 --> 0:19:44.080 Twitter today shade this is Bloomberg. Let's bring in Burt 0:19:44.080 --> 0:19:47.040 White to talk about this and how it affects his 0:19:47.160 --> 0:19:49.920 market outlook, his chief strategy officer at the Carson Group 0:19:50.359 --> 0:19:54.919 and bert Um, you know, these prices are real. Um. 0:19:55.040 --> 0:19:59.879 The Fed seems pretty determined to break the back of inflation. 0:20:00.040 --> 0:20:02.160 And can we take them at their word that they're 0:20:02.160 --> 0:20:05.520 gonna do whatever it takes and offer clear and effective 0:20:05.520 --> 0:20:09.919 communication along the way. Yeah, I think you can. And 0:20:09.960 --> 0:20:11.840 I think I think what you're beginning to get a 0:20:11.880 --> 0:20:15.719 sense of is that, Um, you know what, what's causing 0:20:15.720 --> 0:20:19.080 this inflation is a bit demand, but it's released the 0:20:19.480 --> 0:20:22.040 supply side. And so I think what the Feds beginning 0:20:22.040 --> 0:20:25.520 to realize is what's just as important as their rate 0:20:25.760 --> 0:20:29.320 rising is their narrative. Right. They've got to talk pretty tough. 0:20:29.359 --> 0:20:31.960 They've got to redefine what hawk is is. I think 0:20:32.000 --> 0:20:34.159 they are doing that as best they can, and that 0:20:34.320 --> 0:20:36.560 certainly was in the minutes, and I think they're going 0:20:36.560 --> 0:20:38.480 to continue to do that because at the end of 0:20:38.480 --> 0:20:42.080 the day, Um, you can raise rates all you want, um, 0:20:42.119 --> 0:20:45.359 but the demand side is not as big an issue. 0:20:45.400 --> 0:20:48.480 It's a supply side. So the Feds just buying time 0:20:48.520 --> 0:20:51.080 here with this tough talk until the supply chains begin 0:20:51.160 --> 0:20:53.720 to loosen up a bit, which we're starting to see happen. 0:20:53.960 --> 0:20:56.960 It sounds like you doubt the commitment to raising rates 0:20:57.000 --> 0:20:59.520 to the degree that a lot of people in the 0:20:59.520 --> 0:21:03.280 market currently are pricing in. Is that right? Yeah? I 0:21:03.280 --> 0:21:05.480 think I think a lot of this is talk. You know. 0:21:05.520 --> 0:21:08.280 The good news is that that the markets come down 0:21:08.320 --> 0:21:10.640 a little bit, a feed has come up a little bit, 0:21:11.160 --> 0:21:13.359 which is really what has got the market a little 0:21:13.359 --> 0:21:17.160 bit more comfortable. They were in completely different camps set 0:21:17.200 --> 0:21:20.040 in left field in La La Land, the market much 0:21:20.080 --> 0:21:22.760 more on Hawkish Land, and those two things have come 0:21:22.840 --> 0:21:25.520 together a bit um. But I do believe that the 0:21:25.640 --> 0:21:29.120 Fed wants to take a couple of really big swings 0:21:29.160 --> 0:21:32.600