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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along

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Speaker 1: with my co host of Bonnie Quinn. Every business day

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Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,

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Speaker 1: along with essential market moving news. Kind the Bloomberg Markets

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Speaker 1: Podcast on Apple podcast or wherever you listen to podcasts,

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Speaker 1: and on Bloomberg dot com. Well, as we all become

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Speaker 1: a little bit more aware of our surroundings and you know,

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Speaker 1: kenniness and everything really in association with the pandemic, it

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Speaker 1: is a good time to talk to Jonathan Webb, who's

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Speaker 1: founder and CEO of app Harvest is based in Lexington, Kentucky,

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Speaker 1: but it's basically an eye tech company building the world's

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Speaker 1: largest indoor farms, which of course you know we'll have

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Speaker 1: sustainable fresh fruits and vegetables year round with no chemical

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Speaker 1: pesticides and one rainwater. So Jonathan very very excited to

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Speaker 1: speak with you today. First of all, give us a

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Speaker 1: little bit more of an idea of app harvests clientele

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Speaker 1: and also how many farms you have now up and

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Speaker 1: down Applelacha. All right, well, thank you for having me.

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Speaker 1: Uh So, app Harvest is set out to build some

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Speaker 1: of the world's largest controlled environment agriculture facilities, and we're

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Speaker 1: doing it here in central Appalachia where we can get

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Speaker 1: to about sev of the US in a one day drive.

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Speaker 1: Right now, we just launched our first flagship farm, which

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Speaker 1: which is nearly two point eight million square feet under glass.

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Speaker 1: To put that in perspective, it's nearly twice as large

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Speaker 1: as his Amazon's largest distribution center, So so very large

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Speaker 1: and scale. Uh. And we're focused on growing fruits and vegetables. Uh.

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Speaker 1: And and our first product is tomatoes, which tomatoes right

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Speaker 1: now are the number one produce import from Mexico nearly

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Speaker 1: four billion pounds last year. So we're we're happy to

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Speaker 1: be on store shelves as of last week, and we're

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Speaker 1: selling to some of the top twenty five grocers here

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Speaker 1: in the US. What had more of an impact on

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Speaker 1: your business Donald Trump being president or the pandemic? Uh? Well,

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Speaker 1: we we've had great relationships on both sides of the aisle. UH.

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Speaker 1: With the new administration coming in and obviously having a

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Speaker 1: focus on E s G. That's something that's quartered. Our

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Speaker 1: business will will be a public benefit corporation traded on

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Speaker 1: the Nasdaq or b Corp. So so obviously E. S

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Speaker 1: G is quarta to who we are. But but then

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Speaker 1: there's the conversation on food security and resiliency in the US.

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Speaker 1: And it doesn't matter what side of the aisle you're on. UH.

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Speaker 1: It doesn't make sense to truck a fruit and vegetable

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Speaker 1: two weeks, two thousand miles UH imported from another country

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Speaker 1: and get to the east coast, to midwest and southeast.

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Speaker 1: So we have a long way to go here in

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Speaker 1: the US of rebuilding agriculture UH and creating systems that

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Speaker 1: that are resilient for for our future. UH. With climate

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Speaker 1: disruption and demands for food. UH. You you look at

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Speaker 1: the U n who came and visited us recently, the

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Speaker 1: UN Security Council, and they predict it the world needs

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Speaker 1: fifty to seventy more food by we all have to

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Speaker 1: work together to to build a much stronger resilient food system.

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Speaker 1: We have to utilize technology and infrastructure to do that.

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Speaker 1: And for us, we don't really think it's the left

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Speaker 1: or right conversation. It's it's really both sides of the

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Speaker 1: aisle need to be at the table. Sure, it is

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Speaker 1: probably a price conversation, though, right, how much more does

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Speaker 1: it cost to buy, you know, produce from your farms.

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Speaker 1: I presume it has to cost more. No, that's a

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Speaker 1: great question. I mean, our job and my job here

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Speaker 1: is to make sure we're not raising prices for for

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Speaker 1: the everyday American. Uh. You know, I grew up in

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Speaker 1: Kentucky in the middle part of the country, and and

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Speaker 1: I can tell you you know, you look at most

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Speaker 1: mothers and fathers across the US that that are going

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Speaker 1: to the grocery store. They're just worried about putting food

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Speaker 1: on the table. And we definitely cannot raise their prices.

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Speaker 1: And we can do that through scale and through our

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Speaker 1: efficiencies of how we're operating. We run completely on recycled rainwater.

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Speaker 1: We have no water cost, and if you look at

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Speaker 1: a fruit and vegetable, nine of a fruit and vegetable

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Speaker 1: as water were in a water rich region, we're aver

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Speaker 1: collect that rain water. We also know the distribution where

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Speaker 1: we can get to major markets in a one day drive.

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Speaker 1: That reduces our trucking by a week in two weeks

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Speaker 1: also cost savings. So there's a multitude of factors as

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Speaker 1: to how we're able to back into our price. But

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Speaker 1: but at the end of the day, we we absolutely

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Speaker 1: or are are committed to selling a fruit and vegetable

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Speaker 1: adder around the same price and what consumers already see

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Speaker 1: at the grocery store. But you know, Jonathan, we hear

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Speaker 1: from farmers all the time how very, very difficult it

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Speaker 1: is to actually, you know, make some profit in this world,

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Speaker 1: and that it's it's just it's just so hard. And

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Speaker 1: you know, you have to make sure you pick your

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Speaker 1: crops right for the year, you have to make sure

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Speaker 1: that you avail yourself of all the subsidies that are

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Speaker 1: available to farmers and so on. And it's still hard

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Speaker 1: to just even make a living for a single farmer.

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Speaker 1: How are you guys managing to do it for you know,

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Speaker 1: a multitude of farms. Well, it's it's where we're we

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Speaker 1: have to use technology and we have to build farms

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Speaker 1: for the future. And you know, you look at the

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Speaker 1: last great technological revolution that hit American farming, it was

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Speaker 1: the tractor. And we really have not seen a significant

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Speaker 1: uh you know, piece of technology hit American farming since

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Speaker 1: the tractor. Uh. And and now you know the way

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Speaker 1: we operate our farm where we're using industrial sensors and

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Speaker 1: software can operate the farm on an iPhone and iPad.

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Speaker 1: We're controlling the environment to optimize for the plant. Uh

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Speaker 1: And we have to use technology and there's an upfront

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Speaker 1: cost to that, but then we're able to recoup that

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Speaker 1: cost over time. And as far as you you talk

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Speaker 1: about farmers having to fight against the climate that's changing,

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Speaker 1: you know, we don't have to worry about that. We

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Speaker 1: grow indoors. We control our climate. Uh And And what

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Speaker 1: my background was in solar, I was a part of

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Speaker 1: building some of the largest solar in the US. And

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Speaker 1: we've tried to say this is the third wave of

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Speaker 1: sustainable infrastructure. You know, account wait to go under tour

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Speaker 1: one of these farms at some point because they really

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Speaker 1: do sound fascinating and hopefully the technology will take off

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Speaker 1: and and other people who are able to take advantage

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Speaker 1: of it as well. Jonathan, thank you so much. We

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Speaker 1: will stay in touch. Jonathan Webb is founder and CEO

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Speaker 1: of agh Tech Company, A harvest some of the largest

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Speaker 1: indoor farms in the world in Appala jam Looking at

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Speaker 1: the U s dollar here, the d x Y index

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Speaker 1: sitting just above at ninety and that's the lowest level

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Speaker 1: it's been since back in two thousand eighteen. And it's

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Speaker 1: not about twelve twelve and a half percent from the

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Speaker 1: pre pandemic highs Our next guest think that the dollar

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Speaker 1: can stay lower for longer. We are pleased to welcome

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Speaker 1: Stephen Roach, senior fellow at Yale University and former chairman

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Speaker 1: of Morgan Stanley Asia. Discussed his column here. The weaker

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Speaker 1: dollar trend is only just beginning. Stephen. Thanks much for

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Speaker 1: joining us here. What is your call on the dollar

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Speaker 1: and what's driving it well? Last June I wrote an

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Speaker 1: opinion piece on Bloomberg that argued the dollar could drop

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Speaker 1: as much as thirty five percent by the end of

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Speaker 1: and I cited three factors that led me to that

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Speaker 1: seemingly outrageous conclusion. One sharp widening of the balance of

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Speaker 1: payments of the current account deficit to the there was

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Speaker 1: a myth behind the notion that there is no alternative

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Speaker 1: to the dollar or the so called Tina defense. And Thirdly,

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Speaker 1: I stress that I thought the Federal Reserve would do

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Speaker 1: nothing to defend a weaker currency, as central banks normally do,

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Speaker 1: they tighten monetary policy to stave off weaker currency, and

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Speaker 1: this FED is not going to tighten for any currency

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Speaker 1: related reasons. So you know, I uh came up with

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Speaker 1: this thirty five UH call, and you know, we're about

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Speaker 1: a third of the way there, and so there's more

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Speaker 1: to come, if I'm going to be right, Yeah, I mean,

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Speaker 1: the Fed may not do anything. Is there anything that

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Speaker 1: Janet Yellen might do directly or indirectly? As Treasury Secretary

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Speaker 1: Stephen Well, like, I have huge respect for Janet Yelling.

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Speaker 1: She's got a lot or plate Bunny, and um, I

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Speaker 1: think you know, you'll you'll start to hear echoes of

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Speaker 1: Bob Reuben in the Janet Yellen where she just simply

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Speaker 1: says that, you know, the US is always in favor

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Speaker 1: of a strong dollar. But no, there won't be anything

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Speaker 1: other than the sort of rhetorical uh statements rather than

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Speaker 1: any concrete action to stave off this weakness, because Stephen,

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Speaker 1: it appears, you know, if we do listen to Fed

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Speaker 1: Chairman pal Um some seemingly, you know, obviously some very

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Speaker 1: strong commentary since the beginning of this pandemic about the

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Speaker 1: interest rate environment and his outlook lower for longer, talking

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Speaker 1: about you know it in years not quarters. Do you

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Speaker 1: expect that stance to stay? Yeah, I do. I think,

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Speaker 1: you know, if anything, it's it's a more stronger stance

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Speaker 1: for sustained monetary accommodation than it was when I first

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Speaker 1: I thought the dollar would fall six months ago. The

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Speaker 1: feed as you know, has adopted this new framework of

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Speaker 1: average inflation targeting, which means it's going to forgive any

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Speaker 1: short term overshoots a relative to their price to stability metrics,

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Speaker 1: so you know, if anything, they're going to stay easier

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Speaker 1: for longer. And when countries have big current account deficits,

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Speaker 1: they can do one or two things or both. They

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Speaker 1: can allow the Monterrey policy, the titan or uh, you know,

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Speaker 1: let let the currency go and with with the fed

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Speaker 1: um sort of giving up on the monetary policy, and

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Speaker 1: all the currency will will absorb the bulk of the adjustment.

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Speaker 1: So Stephen, when you say weakness, it's obviously weakness versus

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Speaker 1: you know, other assets, other currencies. Will it be primarily

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Speaker 1: you know, the Chinese? You on, Will it be the euro,

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Speaker 1: British pound? Where will we see the weakness? Most obviously

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Speaker 1: I think it will be pretty broadly based. Vanny, I

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Speaker 1: think you'll see it again the reven b, which has

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Speaker 1: been strengthening steadily and looks like it's going to be

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Speaker 1: going up a good deal further this year, but you'll

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Speaker 1: also see it against the Euro that you know, the

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Speaker 1: Euro has I think right now, I would say is

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Speaker 1: probably the most undervalued major currency in the world. It's um. Uh.

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Speaker 1: You know, it's down still on a broad trade weighted

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Speaker 1: basis about four percent from its UM March two thousand

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Speaker 1: and fourteen posted UM crisis high. And uh. You know,

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Speaker 1: I've been a euroskeptic basically all my life, largely because

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Speaker 1: while while the Eurozone has a single currency in a

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Speaker 1: single central bank, it's never had a unified fiscal policy,

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Speaker 1: and that now seems to be changing. Uh. There was

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Speaker 1: a deal cut in July of last year, the so

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Speaker 1: called next generation UH EU fund UH complete with European

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Speaker 1: bond issuing authority, that I think is a you know,

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Speaker 1: a potential game changer in terms of European fiscal policy.

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Speaker 1: So I think, you know, Europe will get through this

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Speaker 1: pandemic which they're suffering mightily from again right now, and

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Speaker 1: I think there's a a compelling case of the upside

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Speaker 1: for what is probably the most undervalued major currency in

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Speaker 1: the world. Stephen, I'd love to call on your experience

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Speaker 1: as chair of Morgan Stanley Asia. We now have a

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Speaker 1: new administration in the White House, how do you think

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Speaker 1: our policy should evolve with China over the coming years

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Speaker 1: given what we've experienced over the last four Well, look,

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Speaker 1: you know, anything that's better than what we've been through

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Speaker 1: over the past four years. I'm hopeful that there will

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Speaker 1: be a measured, careful reassessment of all of the actions

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Speaker 1: that were taken during the Trump administration. I think, UM,

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Speaker 1: I look for the Biden administration to do that. Nothing immediate,

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Speaker 1: no major breakthrough, but I'm hopeful that UH we can

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Speaker 1: once again initiate a more constructive exchange on big issues

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Speaker 1: we have in common like UM, global health policy and

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Speaker 1: climate change UH, and then began to develop a more

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Speaker 1: I think sustainable framework of engagement on some of these

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Speaker 1: tough structural issues that were put on the table by

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Speaker 1: the Trump administration UH several years ago, in terms of

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Speaker 1: innovation policy, intellectual property rights protection, force technology transfer, UH,

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Speaker 1: cybersecurity subsidies to stay on enterprises. These are really important issues,

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Speaker 1: and I give the Trump administration credit for raising them,

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Speaker 1: but they provided nothing in the way of resolving them.

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Speaker 1: The so called Phase one trade deal did nothing on

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Speaker 1: these issues that should be immediately I would I would

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Speaker 1: hope abandoned, and I think there's a much better framework

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Speaker 1: to engage on the structural issues that I would hope

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Speaker 1: that Biden administration could begin to roll out. Stephen would

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Speaker 1: love to talk about China for a lot longer, but

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Speaker 1: unfortunately your time is up. But Duke and back again soon.

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Speaker 1: We really need to sort of focus on China and

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Speaker 1: exactly what's been going on over there. You know, I

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Speaker 1: think the pandemic is as much as we've talked about

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Speaker 1: China over the last year, I think the pandemic has

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Speaker 1: has made us focus a little bit more on the

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Speaker 1: United States in the last little while. So thank you

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Speaker 1: to Stephen Roach, of course, who was a huge, huge

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Speaker 1: history with China and Asia. More broadly, he's senior fellow

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Speaker 1: at Yale University, former chairman of Morgan Stanley Asia, and

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Speaker 1: do have a read of his column. The weaker dollar

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Speaker 1: trend is only just beginning. The British pound is just

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Speaker 1: a little bit stronger today. We're keeping an eye, of course,

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Speaker 1: on earnings. About two thirds of the SMB five hundred

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Speaker 1: companies are reporting this week. And I also want to

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Speaker 1: point out that Leon black out at Apollo this after

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Speaker 1: he got caught paying for Jeffrey Epstein to the tune

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Speaker 1: of one fifty eight million dollars. The private equity Titan

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Speaker 1: was willing to overlook, apparently that Epstein had served thirteen

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Speaker 1: months in a Florida jail. But it all came to

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Speaker 1: a head over the weekend and after meetings between the

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Speaker 1: three owners, Black is out and there is a new

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Speaker 1: person in his place. And that is your latest Spoomberg

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Speaker 1: business flash. Let's get now to some of those earnings

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Speaker 1: this week. Karen nub Hard to senior industrial as analysts

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Speaker 1: for Bloomberg Intelligence, obviously covering the likes of GE and

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Speaker 1: three M Karen, what are we looking for this week? Uh?

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Speaker 1: You know, um, we're gonna certainly see sequential improvement, but

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Speaker 1: everybody's going to really be looking to companies have not

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Speaker 1: been giving guidance for most of twenty Um. I think

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Speaker 1: a lot of them will give us some guidance on

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Speaker 1: because things have stabilized and are going up in the

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Speaker 1: right direction. And today's story was GE on the cash

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Speaker 1: flow side. That's that's really why that's up so much.

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Speaker 1: But you know, it looks like things are stabilizing and

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Speaker 1: we're gonna see um, you know, um improvement ahead better

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Speaker 1: in the second half, but people really want to get

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Speaker 1: comfortable that twenty one is going to be a decent year. Now,

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Speaker 1: where is the demand coming from, Karen, Because you know,

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Speaker 1: we're seeing some data really holding up in terms of

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Speaker 1: the consumer today with consumer confidence and so on, and

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Speaker 1: now it looks like some of these big industrials are

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Speaker 1: also seeing demand. Is a domestic demand, Uh, it's well

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Speaker 1: not China's China's up a lot. Um you know, US

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Speaker 1: is coming back. I mean it's mixed, it's really by

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Speaker 1: it's really by end market. Like the UM three m

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Speaker 1: was talking about home improvement and personal safety. You know,

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Speaker 1: they make the respirators, data centers, things like that, but

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Speaker 1: they're in a big pop and auto production just because

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Speaker 1: you know, it had been much slower earlier in the year,

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Speaker 1: and um g E really it was healthcare and stabilization

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Speaker 1: some of their other businesses, but like power, but that's

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Speaker 1: really an internal story. Aviation was bad, but not as

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Speaker 1: bad as expected, you know, so so you know, um

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Speaker 1: it's it's really you know, um home improvement, some spots

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Speaker 1: and healthcare, anything related to safety. You know, Honeywell is

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Speaker 1: going to talk about personal safety too. That's going to

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Speaker 1: be better than expected. Um, you know because of COVID.

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Speaker 1: So you know, I wouldn't say we're back home, but

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Speaker 1: we're certainly directionally, we're going on the right way. Yeah,

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Speaker 1: these companies pivoting just a little bit, now, will they?

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Speaker 1: And have they spoken about supply chains and how they

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Speaker 1: have forceful supply chains to to get a little bit

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Speaker 1: more um, you know, lubricated in some ways so that

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Speaker 1: you know, the likes of Ppe and some of this

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Speaker 1: healthcare equipment can get produced faster and get to the

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Speaker 1: places necessary. Yeah, that's gotten much much better. I mean

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Speaker 1: three Mum had a uh you know how the squadrupled

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Speaker 1: production and they got to their two billion in in

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Speaker 1: in respirators um for twenty and they were you know,

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Speaker 1: a quarter of that earlier in the year, and there

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Speaker 1: wasn't really supply issues. Um, I'd say the same thing,

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Speaker 1: um in honeywell and some of the other so that

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Speaker 1: that supply chain really isn't coming up that much anymore. Interesting,

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Speaker 1: So animalst aren't even asking about it. It's just solved.

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Speaker 1: A lot of people, a lot of around the world,

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Speaker 1: a lot of places are back to work. They've learned

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Speaker 1: how to manage a round of the virus. Now we

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Speaker 1: always have a new administration, wouldn't have been for the

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Speaker 1: last quarter, but it would be for the next quarter.

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Speaker 1: So are any of these companies making decisions based on

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Speaker 1: the fact that we now have a Biden administration in

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Speaker 1: terms of you know, foreign policy and how their international

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Speaker 1: outlook might be. Well, it's certainly um with you know,

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Speaker 1: trade barriers probably getting a little bit better. Um, you know,

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Speaker 1: working on our global relationships. I think that's in you know,

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Speaker 1: incrementally will be better. I don't think anybody's going to

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Speaker 1: make major strategic changes, um. I would say, um, there is.

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Speaker 1: There may be some internal opportunities life like infrastructure, you know,

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Speaker 1: because we have some big spending plans and it's quite

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Speaker 1: broad based. It's not just let's let's fix the roads. Um. So,

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Speaker 1: they'll they'll probably be um some domestic opportunity. UM So

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Speaker 1: I think people are hopeful, but not making major shifts yet,

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Speaker 1: but certainly hopeful. You know when you say you know

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Speaker 1: domestic opportunity. We're obviously gonna build America back. I mean,

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Speaker 1: how how much are these companies lobbying to get a

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Speaker 1: place in that choir and how much are they sort

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Speaker 1: of looking to divert some of their resources to projects

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Speaker 1: that might come down the pike. Well, you know, I

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Speaker 1: think I think it's going to be a very broad

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Speaker 1: based program as you know, like there will be a

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Speaker 1: traditional infrastructure, but there's also talk of a big focus

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Speaker 1: on climate UM, you know, which will be a big thing, energy,

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Speaker 1: energy savings, etcetera. There's UM their talk of investment in

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Speaker 1: data infrastructure for UM, rural areas, etcetera. So UM, there's

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Speaker 1: a lot of opportunity for these companies if we get

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Speaker 1: the spending and with UM the Democrats having the majority

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Speaker 1: and the White House, some things might be able to

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Speaker 1: happen on on that front. So you know, g E

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Speaker 1: obviously is soaring today, but if you take a look

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Speaker 1: at your over year, we're still down one percent, so

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Speaker 1: it has a ways to go. How much more can

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Speaker 1: Larry cult do to revive the giant UM? You know,

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Speaker 1: I think there's UM a lot of room to go

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Speaker 1: still on the power side, which was where their big

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Speaker 1: problems were. But you're starting to see stabilization and now

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Speaker 1: they've had a couple of quarters where they've made money,

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Speaker 1: so there's still a lot of room to go on

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Speaker 1: that front. UM, there's a room to go and renewables

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Speaker 1: and now and then the other thing, the biggest thing

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Speaker 1: that the biggest swing that they can do on the

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Speaker 1: on the business side is you know, get a little

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Speaker 1: help from aviation and they're expecting some improvement in the

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Speaker 1: second half. That's where they made two thirds of their

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Speaker 1: money and then COVID it just collapsed. But that's going

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Speaker 1: to be better in twenty one. But you know, if

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Speaker 1: they got lucky on that side, they could really beat

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Speaker 1: But right now it's you know, they say, and they're right.

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Speaker 1: They're fixing the things they can fix, and they've been

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Speaker 1: in a two year program to turn power around and

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Speaker 1: renewables around, and you're starting to see that some of

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Speaker 1: the benefits able that cloth cutting and then aviation. Did

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Speaker 1: you know, it's terrible, but they did, you know, as

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Speaker 1: well as they could do, given that demand is down

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Speaker 1: thirty this year. Yeah, exactly. I mean, what will they

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Speaker 1: do with aviation? Is everything on polls right now? And

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Speaker 1: can it be free of cost if you like, you know,

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Speaker 1: while while all of these aviation units are waiting to

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Speaker 1: move back into regular gear. Yeah, they've taken a billion,

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Speaker 1: a little million more than a billion out of costs

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Speaker 1: in the aviation business though they've they've been able to

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Speaker 1: sort of stabilize um, the collapse and then you know,

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Speaker 1: as people get back to back to travel even incrementally,

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Speaker 1: that might help the parts business and frankly that's where

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Speaker 1: they make their money. And then um, the Max seven

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Speaker 1: three seven is is being produced again, not nearly at

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Speaker 1: the levels that they had hoped, but certainly UP is

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Speaker 1: better than down, right, So um, that's going to help

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Speaker 1: them as well on the aviation O east side. Um,

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Speaker 1: but they really need people to travel again, and uh,

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Speaker 1: that should get better as the year goes on. All right, Karen,

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Speaker 1: thank you. Up is definitely better than down for most stakeholders,

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Speaker 1: from employees to management to shareholders and the general public

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Speaker 1: as well. So thank you so much for all of

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Speaker 1: your intelligence. Karen Atlhardt is senior Industrial analyst for Bloomberg Intelligence,

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Speaker 1: and keep an eye out for more intelligence from her

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Speaker 1: on other industrials that haven't reported just yet. All right,

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Speaker 1: it's time bringing our cross Asset reporter is Sarah Ponzac,

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Speaker 1: who's keeping an eye on everything that's going on across

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Speaker 1: the markets. And it doesn't seem that there's all that

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Speaker 1: much going on, at least overall in the equity markets today, Sarah,

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Speaker 1: where is the action right? Everything that's going on today,

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Speaker 1: It's a pretty quiet day as of this morning. If

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Speaker 1: you do break it down, though, you do see some

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Speaker 1: larger moves at the more micro single stock level, and

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Speaker 1: Microsoft will point out Microsoft reporting earnings after the bell today.

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Speaker 1: If you look at Microsoft today higher by one point

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Speaker 1: three percent at the moment, that's higher for a sick

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Speaker 1: straight yea. So we have a bit of a winning

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Speaker 1: street going on. And Microsoft deposited at a record high

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Speaker 1: the last time I checked on my screen, just ahead

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Speaker 1: of earning season. So we're seeing this phenomenon where ahead

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Speaker 1: of big act reports, this is the busiest week for

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Speaker 1: earnings in According to Bluebird Intelligence, we have about one

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Speaker 1: companies that are going to come out and report. That

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Speaker 1: amounts to about thirty six percent of SMP five market. Granted,

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Speaker 1: that's because many of these large companies are reporting Microsoft today.

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Speaker 1: Tomorrow we'll hear from the likes of Apples, Test Left, Facebook,

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Speaker 1: for example, and those three companies alone represent over a

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Speaker 1: tenth of the SMP five hundred. But into this we

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Speaker 1: have seen Big Text all of a sudden start to

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Speaker 1: take the lead once again. And to give you a sense,

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Speaker 1: you look at last week. For example, last week we

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Speaker 1: thought SMP five hundred growth beat value by the most

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Speaker 1: two thousand and eight. So we had seen this rotation

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Speaker 1: away from big tech for quite a while really ever

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Speaker 1: since we've got their rotation in late summer and the

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Speaker 1: months of August September, for example. But now we are

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Speaker 1: seeing these companies really come back and start to hit recordized.

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Speaker 1: Just the head of earning repoard alright, sir, so you're

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Speaker 1: talking about big tech companies, blue chip companies, but you

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Speaker 1: wrote an article recently at about blue Sphere Corporation. What's

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Speaker 1: blue Sphere? Why should we care? Right? So, blue Sphere

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Speaker 1: Corporation is representative of what's been going on really for

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Speaker 1: the past months, month and a half or so. In

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Speaker 1: a blue Sphere is a penny stock company. Uh, just

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Speaker 1: last week before last week, it didn't even trade for

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Speaker 1: a penny, traded for a fraction of a penny. And

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Speaker 1: lately we have seen a boom in penny stock trading.

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Speaker 1: In the month of December. If you look at over

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Speaker 1: the counter stocks, the volume that we saw, we saw

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Speaker 1: more than one trillion shares trade. That was the first

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Speaker 1: time in a decade or so, all of a sudden,

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Speaker 1: we see massive volume in these penny stocks and just

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Speaker 1: pops here and there. Some say it's just another frost marker,

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Speaker 1: for example, just added onto the list of what we've

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Speaker 1: been seen seeing with game Stop lately. But Blue Sphere

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Speaker 1: last week, it was the start of the week we

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Speaker 1: saw it just popped more than four hundred, almost out

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Speaker 1: of the blue. It came out of nowhere. But what

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Speaker 1: I did was I went back and I really dug

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Speaker 1: into some of the chat rooms where you see folks

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Speaker 1: talking about this stuff, for example on stock twits, on Reddit,

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Speaker 1: on discords that are really dedicated to Reddit users, for example.

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Speaker 1: And what was really fascinating to watch was just that

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Speaker 1: over the weekend, before we saw that four percent pop,

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Speaker 1: you just saw conversation really really start to heat up

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Speaker 1: about the stock seemingly out of nowhere. Now those on

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Speaker 1: on the sites will say it's a green energy stock,

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Speaker 1: they turn waste into energy. It's because of the Biden

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Speaker 1: policies that we're going to see the stock going to

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Speaker 1: the moon in their terms. But it's just fascinating because

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Speaker 1: as an example of one of many, these are typically

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Speaker 1: the types of conversations and the bills that you see

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Speaker 1: ahead of the time. A penny stock really just goes viral.

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Speaker 1: He's a possible to tell an advance which ones will

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Speaker 1: and which ones won't. I imagine that there were other

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Speaker 1: conversations taking place as well where the stock didn't pop

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Speaker 1: for afterwards. Yeah, certainly, And conversation on Blue Speer, for example,

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00:26:02,800 --> 00:26:05,200
Speaker 1: had been heating up for a while. It really started

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Speaker 1: the week before. There were a few comments here and there,

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Speaker 1: but then over the weekend you just hit critical maps

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Speaker 1: and you saw on stock to was for example, you

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00:26:13,359 --> 00:26:15,280
Speaker 1: can see the amount of people who follow a stock

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Speaker 1: that kept going up by the thousands of thousands and

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Speaker 1: and by the night of even and some of the

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00:26:20,080 --> 00:26:23,600
Speaker 1: members who are more so vocal were joking around the

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Speaker 1: night of saying that they couldn't sleep, asking others that

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Speaker 1: they were still awake because they were anxious of what

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Speaker 1: was going to happen. When financial marketcempting is pretty pretty remarkable. Um.

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Speaker 1: But yeah, certainly there are those who really try to

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00:26:34,840 --> 00:26:36,560
Speaker 1: hype up a stock, up a stock and it might

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00:26:36,560 --> 00:26:38,159
Speaker 1: not work. And the way I went about doing this

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Speaker 1: was I actually I found Blue Spear on the day

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Speaker 1: that a popform by by looking up and ranking stocks

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00:26:44,520 --> 00:26:47,400
Speaker 1: by volume, and volume on this company was over two

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00:26:47,400 --> 00:26:50,520
Speaker 1: billion shares, which was a record, and really that had

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Speaker 1: never happened before for this company. It came out of nowhere.

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Speaker 1: This says an off exchange stock hasn't reported financial disclosures

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Speaker 1: and years um. So that's where I got star to them.

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Speaker 1: Then I walked backwards from there, and what you uncover

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Speaker 1: is is quite amazing. Blue Sphere trading a little bit

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00:27:07,400 --> 00:27:12,040
Speaker 1: over two cents per share, up about two today million

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00:27:12,080 --> 00:27:15,199
Speaker 1: shares traded. Year to date, the stock is up almost

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Speaker 1: thirty nine hundred percent. So so as she talks to

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Speaker 1: strategies and so on, I mean, should we be concerned

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00:27:22,440 --> 00:27:24,679
Speaker 1: about some of these types of speculative moves in the marketing,

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Speaker 1: including like a game stop right. So, so, typically what

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00:27:28,440 --> 00:27:32,680
Speaker 1: we hear from professional investors that this is another signal

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Speaker 1: that there is exuberance in the market, and it asserts

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00:27:35,880 --> 00:27:38,480
Speaker 1: itself in different ways. You see it in the penny

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00:27:38,520 --> 00:27:41,080
Speaker 1: stock boom, You see it in the likes of game

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00:27:41,119 --> 00:27:45,080
Speaker 1: stock and BlackBerry and AMC these days. You see it

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00:27:45,119 --> 00:27:48,400
Speaker 1: in in the back boom and I t o pop

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00:27:48,600 --> 00:27:52,320
Speaker 1: that there's many ways that this exuberance really asserts itself

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Speaker 1: in market. But we've now been hearing for months that

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00:27:55,359 --> 00:27:57,879
Speaker 1: this is something people need to worry about, this is

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00:27:57,920 --> 00:28:00,479
Speaker 1: something people should be concerned about, and yet the broader

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00:28:00,520 --> 00:28:05,000
Speaker 1: market has continued to move higher and act just fine. Um.

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Speaker 1: So it just goes to show that even if you

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Speaker 1: do believe that we're in a bubble, it's really really

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Speaker 1: hard to time when these things might come to an edge.

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Speaker 1: Eleven employees, it has extraordinary story. Sarah Panzac, thank you

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Speaker 1: so much for joining us cross set reporter looking at BlackBerry.

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Speaker 1: Here a name from my past stocks trading at eighteen

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Speaker 1: just under nineteen dollars to share. Vonnie was trading as

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Speaker 1: low as four or five dollars just recently, so go figure.

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Speaker 1: Thanks for listening to the Boomberg Markets podcast. You can

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00:28:31,359 --> 00:28:35,080
Speaker 1: subscribe and listen to interviews at Apple Podcasts or whatever

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00:28:35,240 --> 00:28:38,600
Speaker 1: podcast platform you prefer. I'm Bonnie Quinn. I'm on Twitter

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Speaker 1: at Bonnie Quinn and I'm Paul Sweeney. I'm on Twitter

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00:28:41,200 --> 00:28:44,000
Speaker 1: at pt Sweeney. Before the podcast, you can always catch

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Speaker 1: us worldwide at Bloomberg Radio