1 00:00:13,320 --> 00:00:16,480 Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast. 2 00:00:16,600 --> 00:00:20,440 Speaker 1: UM Weldna Hire across Acid, reporter of Bloomberg, and I'm 3 00:00:20,480 --> 00:00:24,400 Speaker 1: Mike Reagan, Builda's sidekick and a senior editor at Bloomberg. 4 00:00:25,239 --> 00:00:27,960 Speaker 1: This week, the Federal Reserve laid out plans for hiking 5 00:00:28,000 --> 00:00:31,320 Speaker 1: interest rates in two and the markets initially were thrilled 6 00:00:31,400 --> 00:00:34,559 Speaker 1: before really digesting the news. Our guest this week is 7 00:00:34,560 --> 00:00:37,800 Speaker 1: one of the most well versed n FED policy and history. 8 00:00:38,000 --> 00:00:40,240 Speaker 1: I actually might want to bring him in right away. 9 00:00:40,680 --> 00:00:44,199 Speaker 1: It's Luke Kawa, my former deskmate, and he's currently a 10 00:00:44,240 --> 00:00:47,360 Speaker 1: strategist at U b S. Luke, welcome back to the show. 11 00:00:48,680 --> 00:00:51,400 Speaker 1: Great to be here, Thanks for having me, folks. So 12 00:00:51,520 --> 00:00:54,600 Speaker 1: I said that Luke is well versed in FED stuff, 13 00:00:54,600 --> 00:00:58,440 Speaker 1: he just so happens to also be supremely well versed 14 00:00:58,480 --> 00:01:01,960 Speaker 1: in all of Taylor Swift's versis and Mike, I don't 15 00:01:01,960 --> 00:01:04,679 Speaker 1: know about you, but Luke and I are feeling two, 16 00:01:04,760 --> 00:01:07,480 Speaker 1: which is why I wanted to invite him on the show. 17 00:01:07,800 --> 00:01:09,119 Speaker 1: And I want to ask you if you have any 18 00:01:09,160 --> 00:01:11,840 Speaker 1: idea what I'm referencing. You know, Vilna, I know you 19 00:01:11,880 --> 00:01:14,880 Speaker 1: think you can burn me with the Taylor Swift references. 20 00:01:15,760 --> 00:01:19,160 Speaker 1: It just makes me feel happy, free, confused, and lonely 21 00:01:19,200 --> 00:01:22,400 Speaker 1: at the same time. I remind you I'm I'm the 22 00:01:22,400 --> 00:01:25,960 Speaker 1: father of three daughters, and although I'm more of a 23 00:01:25,959 --> 00:01:30,480 Speaker 1: Halsey guy and I actually prefer Scooters versions better. I 24 00:01:30,480 --> 00:01:32,400 Speaker 1: don't think you can burn me as much on Taylor 25 00:01:32,440 --> 00:01:34,440 Speaker 1: Swift as as you think you can. But let's see, 26 00:01:34,720 --> 00:01:36,680 Speaker 1: you shouldn't say that in front of in front of Luke. 27 00:01:36,800 --> 00:01:39,920 Speaker 1: So I actually have Luke's already left the show. Yeah, Luke, 28 00:01:40,120 --> 00:01:42,720 Speaker 1: he's gone. Next next, next thing. You're going to tell 29 00:01:42,720 --> 00:01:45,640 Speaker 1: me you're a big Jake Jillenhall fans. Yeah, don't, don't. 30 00:01:45,680 --> 00:01:47,440 Speaker 1: Don't say anything else. I actually have a quiz for you. 31 00:01:47,560 --> 00:01:51,040 Speaker 1: Let's test your test your knowledge. I'm going to read 32 00:01:51,080 --> 00:01:55,160 Speaker 1: you some Taylor Swift song titles. All of them are 33 00:01:55,200 --> 00:01:57,880 Speaker 1: going to be applicable to markets, and I want you 34 00:01:57,960 --> 00:02:00,760 Speaker 1: to guess which one is not a Tylor Swift song, 35 00:02:01,120 --> 00:02:05,400 Speaker 1: which one is not a Taylor Swift song. Okay, alright, 36 00:02:05,760 --> 00:02:08,120 Speaker 1: you know the titles of the song I'm less familiar with. 37 00:02:08,160 --> 00:02:12,960 Speaker 1: If you could sing the verses and the quirs, maybe 38 00:02:13,000 --> 00:02:16,040 Speaker 1: maybe Luke will do that first. But here we go. Okay, 39 00:02:16,120 --> 00:02:19,960 Speaker 1: red yep, that's a Teller Shoft song. Gold Rush that 40 00:02:20,560 --> 00:02:25,519 Speaker 1: shake it off? Okay, keep going, break even and treacherous. 41 00:02:26,680 --> 00:02:30,520 Speaker 1: I'm gonna say gold Rush is not a Taylor Swift song. Luke, 42 00:02:32,200 --> 00:02:38,000 Speaker 1: thank you, very very very wrong. Even break even is 43 00:02:38,000 --> 00:02:40,680 Speaker 1: the right answer, all right? I was I was, Chris. 44 00:02:40,720 --> 00:02:42,320 Speaker 1: I thought you were throwing in a Neil Young song 45 00:02:42,360 --> 00:02:45,560 Speaker 1: there to confuse me in honor of Luke's Canadian nous. 46 00:02:45,680 --> 00:02:49,239 Speaker 1: You're gonna hit me with some some Neil Young. I'll 47 00:02:49,240 --> 00:02:53,240 Speaker 1: give you a six. I would say, you still fail, 48 00:02:53,280 --> 00:02:56,440 Speaker 1: but you get a six. All right. Well, you know, 49 00:02:56,600 --> 00:03:00,280 Speaker 1: my my youngest daughter's biggest pastime is eave dropping on 50 00:03:00,320 --> 00:03:02,640 Speaker 1: the podcast to look for things to burn me about. 51 00:03:02,639 --> 00:03:05,280 Speaker 1: And obviously that that's not the first time I've made 52 00:03:05,280 --> 00:03:08,280 Speaker 1: the scooters version joke. And she said, Dad, last time 53 00:03:08,320 --> 00:03:10,680 Speaker 1: I was gonna burst in there and cancel you myself 54 00:03:10,840 --> 00:03:15,080 Speaker 1: personally over that. I don't think it's it's not cancellable maybe, 55 00:03:15,160 --> 00:03:17,679 Speaker 1: but anyway, yeah, I think this will be the last 56 00:03:17,680 --> 00:03:20,119 Speaker 1: time you mentioned it. All right, Luke. Well, let's get Luke. 57 00:03:20,240 --> 00:03:22,160 Speaker 1: Let's get Luke to talk about the real stuff here 58 00:03:22,200 --> 00:03:24,440 Speaker 1: and and look if you can squeeze in some Taylor 59 00:03:24,480 --> 00:03:28,200 Speaker 1: Swift references, then I will be doubly impressed. But let's 60 00:03:28,200 --> 00:03:30,480 Speaker 1: start with what Fildonna was talking about that FED meeting 61 00:03:30,680 --> 00:03:33,000 Speaker 1: this week. Uh, And I know, look, you had a 62 00:03:33,000 --> 00:03:35,880 Speaker 1: tweet that I appreciated where You're like, if you had 63 00:03:35,920 --> 00:03:40,120 Speaker 1: given me the FED statement basically in the the Economic 64 00:03:40,920 --> 00:03:44,520 Speaker 1: Outlook statement, the s EP, you would not have guessed 65 00:03:44,520 --> 00:03:46,360 Speaker 1: the the market reaction. I was kind of in the 66 00:03:46,400 --> 00:03:49,200 Speaker 1: same boat. It's sort of it surprised me because when 67 00:03:49,200 --> 00:03:51,880 Speaker 1: I look at the dot plot um and our colleague 68 00:03:51,920 --> 00:03:54,120 Speaker 1: Cameron Christ has written a lot about this, the notion 69 00:03:54,240 --> 00:03:57,480 Speaker 1: that well, if we get more hikes sooner, you know, 70 00:03:57,680 --> 00:04:00,800 Speaker 1: we'll get less later um in the cycle. So that 71 00:04:00,960 --> 00:04:03,960 Speaker 1: that kind of seems to be the narrative people latched 72 00:04:04,000 --> 00:04:06,120 Speaker 1: onto when when the stock market rallied, you know, we're 73 00:04:06,120 --> 00:04:10,880 Speaker 1: gonna get three hikes next year, three hikes in three 74 00:04:11,720 --> 00:04:14,240 Speaker 1: and just two hikes in But I don't know. Look, 75 00:04:14,240 --> 00:04:16,240 Speaker 1: when I look at the dot plot, I have modest 76 00:04:16,279 --> 00:04:19,000 Speaker 1: to moderate confidence to use some FED speak in sort 77 00:04:19,000 --> 00:04:23,920 Speaker 1: of the near term dots, you know, dots, dots. I've 78 00:04:24,080 --> 00:04:27,599 Speaker 1: very less confidence in that that's what we're actually going 79 00:04:27,680 --> 00:04:30,239 Speaker 1: to see in. I'm like, I I don't even bother 80 00:04:30,520 --> 00:04:32,720 Speaker 1: with that. I think it's way too far in advance. 81 00:04:33,480 --> 00:04:36,840 Speaker 1: So walk us through. I mean, is that the safe narrative? 82 00:04:36,880 --> 00:04:39,800 Speaker 1: You think that the market viewed it as dovish at 83 00:04:39,839 --> 00:04:44,120 Speaker 1: least temporarily because the notion that you know, the terminal 84 00:04:44,200 --> 00:04:47,040 Speaker 1: rate will be you know, it won't be a three 85 00:04:47,160 --> 00:04:49,440 Speaker 1: hike a year type of situation, that the terminal rate 86 00:04:49,520 --> 00:04:51,839 Speaker 1: is kind of where everyone expected it. And how do 87 00:04:51,839 --> 00:04:53,960 Speaker 1: you view those dots? Are you in sort of on 88 00:04:54,000 --> 00:04:56,680 Speaker 1: board with me? Where the the further out your dots? 89 00:04:56,760 --> 00:04:58,440 Speaker 1: I I, you know, I don't. I don't put a 90 00:04:58,440 --> 00:05:01,320 Speaker 1: lot of confidence in them. Yeah, I mean I put 91 00:05:01,320 --> 00:05:03,960 Speaker 1: it this way. I think what you're describing is precisely 92 00:05:04,040 --> 00:05:05,880 Speaker 1: where the markets at if you look at you know, 93 00:05:05,880 --> 00:05:08,120 Speaker 1: if you do your dots, go on Bloomberg and look 94 00:05:08,160 --> 00:05:12,760 Speaker 1: at you know, the Fed funds futures are overnight index swaps, 95 00:05:12,800 --> 00:05:15,480 Speaker 1: and how those correspond to the median dot, they're they're 96 00:05:15,480 --> 00:05:19,719 Speaker 1: pretty much there, and then the basis just goes wider 97 00:05:19,720 --> 00:05:22,280 Speaker 1: and wider as you go to the to the out years. 98 00:05:22,320 --> 00:05:25,240 Speaker 1: So I think your description there, you know, really really 99 00:05:25,320 --> 00:05:28,400 Speaker 1: does fit in terms of thinking, you know, and how 100 00:05:28,440 --> 00:05:31,640 Speaker 1: markets reacted, and you know, the digestion phase are going 101 00:05:31,680 --> 00:05:35,840 Speaker 1: on afterwards, I think, you know, focusing on the three 102 00:05:35,920 --> 00:05:40,599 Speaker 1: and two and then thinking, okay, now, now what way 103 00:05:40,680 --> 00:05:43,800 Speaker 1: is the risk you really? Because for at least since 104 00:05:43,880 --> 00:05:46,080 Speaker 1: the you know, let's call it June f O m C, 105 00:05:46,600 --> 00:05:49,080 Speaker 1: when the Fed first kind of introduced this idea that 106 00:05:49,160 --> 00:05:52,680 Speaker 1: they were kind a more more worried, more sensitive to 107 00:05:52,720 --> 00:05:55,359 Speaker 1: these really high realized inflation now comes we were getting. 108 00:05:55,680 --> 00:05:57,360 Speaker 1: It's been a story of the Fed catching up to 109 00:05:57,400 --> 00:06:00,560 Speaker 1: the markets, catching up to the markets on the need 110 00:06:00,680 --> 00:06:04,240 Speaker 1: for some kind of short term, near term right sizing 111 00:06:04,560 --> 00:06:07,280 Speaker 1: of policy. But now we're in a place where, okay, 112 00:06:07,279 --> 00:06:09,760 Speaker 1: what has to happen for the Fed to hike more 113 00:06:09,800 --> 00:06:13,599 Speaker 1: than three times next year? Okay, So that means that 114 00:06:13,600 --> 00:06:16,479 Speaker 1: would mean something like taper ends in March and there's 115 00:06:16,520 --> 00:06:20,119 Speaker 1: no pause and immediate hike and going once a quarter, 116 00:06:20,720 --> 00:06:23,960 Speaker 1: or it means you're going in excess of twenty five 117 00:06:24,000 --> 00:06:27,080 Speaker 1: basis points per quarter. That's that's getting to be a 118 00:06:27,200 --> 00:06:30,080 Speaker 1: you know, a rather high bar to clear. So now 119 00:06:30,200 --> 00:06:32,800 Speaker 1: we're we're finally out of place where the risk you 120 00:06:32,880 --> 00:06:36,440 Speaker 1: for the Fed is a lot more balanced in terms 121 00:06:36,480 --> 00:06:38,839 Speaker 1: of going forward from here. So I think that's something 122 00:06:38,880 --> 00:06:42,680 Speaker 1: that it provides a bit of comfort for markets, and 123 00:06:42,680 --> 00:06:45,400 Speaker 1: and also just the idea that if you're looking at 124 00:06:45,480 --> 00:06:48,599 Speaker 1: the the out year forecast, not that the market necessarily 125 00:06:48,640 --> 00:06:51,480 Speaker 1: thinks the Fed will realize what they've penciled in for 126 00:06:52,240 --> 00:06:55,919 Speaker 1: two and four or rather, but if you if you 127 00:06:55,920 --> 00:06:58,960 Speaker 1: look across that and marry them with the PC forecast, 128 00:06:59,040 --> 00:07:03,000 Speaker 1: you're looking at negative or zero real rates as as 129 00:07:03,000 --> 00:07:05,240 Speaker 1: far as the I can see for for the policy rate. 130 00:07:05,320 --> 00:07:09,080 Speaker 1: That's not a bad backdrop for risk assets with you know, 131 00:07:09,279 --> 00:07:14,480 Speaker 1: above trend growth and negative or zero policy rates. And 132 00:07:14,760 --> 00:07:16,760 Speaker 1: before we even get to that, let's talk about the taper. 133 00:07:16,760 --> 00:07:19,360 Speaker 1: I mean to me, if all of a sudden you 134 00:07:19,440 --> 00:07:24,080 Speaker 1: remove thirty billion dollars a month in bid from treasury 135 00:07:24,080 --> 00:07:27,360 Speaker 1: and mortgage markets, that seems living dangerous to me in 136 00:07:27,400 --> 00:07:30,640 Speaker 1: those first few months. I mean, um, listeners will know 137 00:07:30,720 --> 00:07:32,840 Speaker 1: I tend to worry more than I probably should about 138 00:07:32,840 --> 00:07:34,600 Speaker 1: stuff like that, but that that seems to me like 139 00:07:34,680 --> 00:07:37,720 Speaker 1: a set up for some volatility in the bond market, 140 00:07:37,760 --> 00:07:40,280 Speaker 1: that that maybe could could be contagient to other markets 141 00:07:40,320 --> 00:07:43,560 Speaker 1: and and have a sort of an ugly first quarter there. Um, 142 00:07:43,680 --> 00:07:46,080 Speaker 1: how are you thinking about that, and you know, is 143 00:07:46,120 --> 00:07:48,680 Speaker 1: it possible that you know, the Fed sort of you know, 144 00:07:48,960 --> 00:07:51,080 Speaker 1: changes its mind on how much it's tapering if it does, 145 00:07:51,120 --> 00:07:53,600 Speaker 1: see uh see a little bit of a freak out 146 00:07:54,880 --> 00:07:58,040 Speaker 1: unlike and it's it's clear that, you know, balance sheet 147 00:07:58,080 --> 00:08:01,120 Speaker 1: policy is not on autopilot this time around. The Fed 148 00:08:01,280 --> 00:08:03,600 Speaker 1: is being a little more nimble in terms of how 149 00:08:03,600 --> 00:08:06,160 Speaker 1: it's making adjustments there. But what happened on the tape 150 00:08:06,200 --> 00:08:08,960 Speaker 1: here the doubling of the pace that was kind of 151 00:08:08,960 --> 00:08:13,080 Speaker 1: bang in line with with the consensus estimate. So don't expect, 152 00:08:13,360 --> 00:08:15,880 Speaker 1: you know, that to move markets too much. And just 153 00:08:15,960 --> 00:08:20,480 Speaker 1: the idea that we should be looking primarily at asset 154 00:08:20,560 --> 00:08:24,000 Speaker 1: purchases as you know, affecting prices through this you know, 155 00:08:24,040 --> 00:08:28,760 Speaker 1: supply demand imbalance and you know, portfolio rebalancing channel. I 156 00:08:28,760 --> 00:08:31,080 Speaker 1: I think the evidence for that is point week compared 157 00:08:31,120 --> 00:08:34,000 Speaker 1: to the rate signaling channel, and it's you know, for 158 00:08:34,040 --> 00:08:36,840 Speaker 1: as long as a central bank is buying bonds, you know, 159 00:08:36,920 --> 00:08:39,360 Speaker 1: it's not going to be hiking rates. That's where the 160 00:08:39,520 --> 00:08:43,320 Speaker 1: kind of the main signal and the main accommodative impulse 161 00:08:43,400 --> 00:08:46,760 Speaker 1: comes in through asset purchases. And I think it was 162 00:08:46,800 --> 00:08:48,680 Speaker 1: one of the lessons from the taper tantrum back in 163 00:08:50,360 --> 00:08:54,480 Speaker 1: what happened when the when in you know, May, when 164 00:08:54,600 --> 00:08:57,719 Speaker 1: Bernankee started hinting at possible reduction in the pace of 165 00:08:57,760 --> 00:09:01,040 Speaker 1: asset purchases, the front end got pulled forward a heck 166 00:09:01,080 --> 00:09:04,200 Speaker 1: of a lot. It was traders just pulling forward expectations 167 00:09:04,240 --> 00:09:06,760 Speaker 1: for one liftoff would happen based on that. So I 168 00:09:06,800 --> 00:09:10,440 Speaker 1: think that that was a good test case showing us that, uh, 169 00:09:11,120 --> 00:09:15,000 Speaker 1: that's the main channel through which QI is working. And 170 00:09:15,280 --> 00:09:18,319 Speaker 1: when the tapering paste got doubled at one point on 171 00:09:18,320 --> 00:09:22,959 Speaker 1: on Wednesday March, got prices ast, so again it's that's 172 00:09:23,080 --> 00:09:25,800 Speaker 1: that's the main channel that you know, I see it 173 00:09:25,880 --> 00:09:29,000 Speaker 1: mainly working through rather than rather than any kind of 174 00:09:29,040 --> 00:09:33,560 Speaker 1: supply demand channel. That was the heyday of scooters versions. 175 00:09:34,080 --> 00:09:36,320 Speaker 1: Oh no, oh my gosh, I thought we were done 176 00:09:36,320 --> 00:09:40,240 Speaker 1: with scooter. That was the good old days. Oh my gosh. Anyway, Luke, 177 00:09:40,400 --> 00:09:43,160 Speaker 1: speaking of signals from the bond market, I know you 178 00:09:43,200 --> 00:09:46,000 Speaker 1: said in a note recently that sticky high inflation and 179 00:09:46,040 --> 00:09:49,800 Speaker 1: the removal of monetary accommodation should lead to higher bond 180 00:09:49,840 --> 00:09:52,440 Speaker 1: yields over time. So that's not something that we've really 181 00:09:52,440 --> 00:09:55,200 Speaker 1: seen recently, and I know Paul was asked about this 182 00:09:55,320 --> 00:09:57,959 Speaker 1: at the press conference this week as well. So can 183 00:09:58,000 --> 00:10:01,000 Speaker 1: you maybe layout for us you reasoning for why it 184 00:10:01,000 --> 00:10:04,360 Speaker 1: hasn't happened, and then second, what might actually start leading 185 00:10:04,400 --> 00:10:09,520 Speaker 1: to us actually seeing higher bond yields. Yeah, so, I 186 00:10:09,520 --> 00:10:12,280 Speaker 1: I think a lot of this is having a lot 187 00:10:12,320 --> 00:10:14,920 Speaker 1: of humility looking at the bond market and thinking about 188 00:10:14,920 --> 00:10:18,240 Speaker 1: the burden of proof required to get yields higher. It's 189 00:10:18,280 --> 00:10:20,680 Speaker 1: one thing to get yields higher when the ten years 190 00:10:20,720 --> 00:10:23,600 Speaker 1: at you know, at fifty basis points and we're we're 191 00:10:23,600 --> 00:10:25,720 Speaker 1: all locked down and in the middle of a crisis, 192 00:10:26,000 --> 00:10:29,160 Speaker 1: it's a it's another thing to expect that above trend 193 00:10:29,480 --> 00:10:33,320 Speaker 1: economic growth can continue. So I think Powell hit on 194 00:10:33,360 --> 00:10:36,840 Speaker 1: some some good or interesting reasons. And the crux of 195 00:10:36,920 --> 00:10:39,160 Speaker 1: the point that all interpret him is trying to make 196 00:10:39,440 --> 00:10:42,960 Speaker 1: in talking about the long end is that you really 197 00:10:42,960 --> 00:10:47,719 Speaker 1: shouldn't extract extrapolated as kind of the pure fed expectations 198 00:10:47,760 --> 00:10:51,240 Speaker 1: over ten years. That there are non economic factors that 199 00:10:51,360 --> 00:10:53,880 Speaker 1: affect the that affect the long end. And you know, 200 00:10:53,920 --> 00:10:55,400 Speaker 1: for for instance, if you talk to you know, any 201 00:10:55,440 --> 00:10:58,920 Speaker 1: big bond manager, they'll they'll talk about kind of liability 202 00:10:59,080 --> 00:11:02,640 Speaker 1: driven invest Smith demand, you'll you'll hear more about the 203 00:11:02,640 --> 00:11:05,800 Speaker 1: the massive yield pickup available for for foreign investors just 204 00:11:05,840 --> 00:11:09,319 Speaker 1: buying hedge US treasuries, things of that nature. So I 205 00:11:09,600 --> 00:11:13,600 Speaker 1: think that's one reason to suspect that the long end 206 00:11:13,720 --> 00:11:16,000 Speaker 1: might not go up as might as much as you 207 00:11:16,080 --> 00:11:19,640 Speaker 1: might think, given the strength of the economic recovery and 208 00:11:19,679 --> 00:11:23,680 Speaker 1: the potential outlook for for Fed policy rate ranks. But 209 00:11:23,679 --> 00:11:25,480 Speaker 1: but I also think that a lot of this is 210 00:11:25,880 --> 00:11:29,360 Speaker 1: you know, the market saying, okay, like this, it's you know, 211 00:11:29,400 --> 00:11:31,520 Speaker 1: it's a good debut album. It's a good you know, 212 00:11:31,559 --> 00:11:34,560 Speaker 1: self titled Taylor Swift. But is there is there a 213 00:11:34,640 --> 00:11:38,240 Speaker 1: fearless coming? What's what's the sophomore album going to be? 214 00:11:38,240 --> 00:11:41,520 Speaker 1: Because the story of last cycle was essentially all of 215 00:11:41,559 --> 00:11:43,760 Speaker 1: the risk, and all the shocks that end up manifesting 216 00:11:44,040 --> 00:11:47,240 Speaker 1: were largely to the downside. With the exception i'd say 217 00:11:47,280 --> 00:11:50,600 Speaker 1: of you know, the post election, when we got excited 218 00:11:50,600 --> 00:11:54,640 Speaker 1: for the potential for fiscal stimulus under than then President Trump. 219 00:11:54,720 --> 00:11:57,920 Speaker 1: It was European debt crisis after debt crisis, it was 220 00:11:58,320 --> 00:12:01,280 Speaker 1: SMP rating downgrade it as you know, even brief fears 221 00:12:01,320 --> 00:12:04,880 Speaker 1: of the US double depercession, China hard landing. So all 222 00:12:04,920 --> 00:12:08,320 Speaker 1: of that then conditions I believe traders to think that 223 00:12:08,440 --> 00:12:11,240 Speaker 1: any periods of above trend growth are going to be 224 00:12:11,400 --> 00:12:14,520 Speaker 1: very fleeting, and that the rate hikes that the Fed 225 00:12:14,679 --> 00:12:18,679 Speaker 1: is kind of teeing up next year to quell inflation 226 00:12:18,800 --> 00:12:21,240 Speaker 1: and a certain to a certain extent, uh, you know, 227 00:12:21,640 --> 00:12:24,240 Speaker 1: trim demand growth at least a little bit, that that's 228 00:12:24,280 --> 00:12:27,800 Speaker 1: going to have a very deliterious effect on the economic outlook. 229 00:12:27,960 --> 00:12:30,719 Speaker 1: We we couldn't disagree more. We just think the fundamentals 230 00:12:30,760 --> 00:12:34,720 Speaker 1: for this expansion are so much stronger than they are 231 00:12:34,720 --> 00:12:38,320 Speaker 1: compared to being at this point post global financial crisis. 232 00:12:38,520 --> 00:12:41,640 Speaker 1: If you look at aggregate labor income, if you look 233 00:12:41,679 --> 00:12:44,720 Speaker 1: at capex intentions, if you look at the you know, 234 00:12:44,840 --> 00:12:48,840 Speaker 1: the extent to which fiscal policy is still you know, accommodative, 235 00:12:49,160 --> 00:12:52,000 Speaker 1: given where we are in the in the business cycle, 236 00:12:52,280 --> 00:12:55,280 Speaker 1: all of these just scream much better foundation for growth. 237 00:12:55,320 --> 00:12:58,600 Speaker 1: And that's what gives central banks the confidence right now 238 00:12:58,640 --> 00:13:01,240 Speaker 1: to be pulling back on a common Asian even as 239 00:13:01,280 --> 00:13:02,959 Speaker 1: you have you know the threat of the old macron 240 00:13:03,040 --> 00:13:05,360 Speaker 1: variant and a lot of uncertainty about that. It's you know, 241 00:13:05,400 --> 00:13:08,640 Speaker 1: it's akin to if you if you have a choice 242 00:13:08,679 --> 00:13:11,640 Speaker 1: between if you've got a picture, Garrett Cole, great picture Yankees. 243 00:13:11,960 --> 00:13:15,000 Speaker 1: He's injured, he's rehabbing, suffers a bit of a set 244 00:13:15,000 --> 00:13:17,040 Speaker 1: back in his rehab, so he's just about you know 245 00:13:17,080 --> 00:13:20,440 Speaker 1: at se if you can choose between starting him in 246 00:13:20,480 --> 00:13:23,160 Speaker 1: a game or starting me in a game, you're going 247 00:13:23,200 --> 00:13:26,440 Speaker 1: to choose him. We just have that much. We have 248 00:13:26,600 --> 00:13:29,520 Speaker 1: that much of a better economy right now that central 249 00:13:29,559 --> 00:13:33,320 Speaker 1: banks can you know, afford to do this and still 250 00:13:33,320 --> 00:13:35,400 Speaker 1: have a high degree of confidence. That's how much better 251 00:13:35,720 --> 00:13:40,000 Speaker 1: the underlying fundamentals are this time. Well thought, I'll allow 252 00:13:40,000 --> 00:13:42,520 Speaker 1: a little baseball talk if he starts talking hockey though, 253 00:13:42,559 --> 00:13:45,280 Speaker 1: get that you got the mute button handy right? If 254 00:13:45,360 --> 00:13:48,720 Speaker 1: Luke starts going in a NHL that, uh no, because 255 00:13:48,720 --> 00:13:53,559 Speaker 1: we're big Sabers fans in my household. Hockey. Although look, 256 00:13:53,679 --> 00:13:55,640 Speaker 1: I gotta ask, so what what would their album tell 257 00:13:55,720 --> 00:13:57,880 Speaker 1: uswift album Red b I guess that's like two thousand 258 00:13:57,920 --> 00:13:59,960 Speaker 1: and eight, though you're you're not worried about about that. 259 00:14:00,320 --> 00:14:03,160 Speaker 1: See yeah, no, Red is uh Red is what we 260 00:14:03,280 --> 00:14:06,839 Speaker 1: thought one like was going to be. Just you know 261 00:14:06,960 --> 00:14:09,760 Speaker 1: this back to back to normal kind of polly and 262 00:14:10,040 --> 00:14:13,959 Speaker 1: we're all better everything inspiring on all cylinders, didn't didn't 263 00:14:14,040 --> 00:14:16,199 Speaker 1: quite get there, but red was red with what we 264 00:14:16,240 --> 00:14:19,080 Speaker 1: thought one was going to be at as soon as 265 00:14:19,080 --> 00:14:29,840 Speaker 1: we heard about a vaccine. At the end of all, right, 266 00:14:29,880 --> 00:14:31,720 Speaker 1: why want to I want to get back to that 267 00:14:31,760 --> 00:14:35,080 Speaker 1: idea of you're very confident in this economy. I was 268 00:14:35,080 --> 00:14:38,080 Speaker 1: reading your Macro quarterly for the fourth quarter you and 269 00:14:38,120 --> 00:14:41,400 Speaker 1: Evan Brown and Ryan Primer put out and credit this 270 00:14:41,520 --> 00:14:43,920 Speaker 1: is a few weeks old. I don't know the exact 271 00:14:44,000 --> 00:14:46,280 Speaker 1: date of it, but basically, you know, the title of 272 00:14:46,320 --> 00:14:48,920 Speaker 1: it is preparing for another round of kind up demand. 273 00:14:49,200 --> 00:14:52,440 Speaker 1: You say, supply chain issues that are contributing to slower 274 00:14:52,520 --> 00:14:55,120 Speaker 1: growth and higher inflation will get better, not worse, as 275 00:14:55,240 --> 00:14:59,600 Speaker 1: vaccinations improve public health outcomes. That all made a lot 276 00:14:59,600 --> 00:15:02,680 Speaker 1: of sense at the time, and I suppose it still 277 00:15:02,720 --> 00:15:05,040 Speaker 1: makes a lot of sense. But by this Ammycron is 278 00:15:05,400 --> 00:15:07,680 Speaker 1: a wild card. You know, we're sitting here in the 279 00:15:07,680 --> 00:15:11,080 Speaker 1: office seeing headlines go by about companies signing their employees 280 00:15:11,160 --> 00:15:14,000 Speaker 1: home again. You know, it's it seems like pretty much 281 00:15:14,000 --> 00:15:16,640 Speaker 1: a wild card variable again coming from me, the guy 282 00:15:16,640 --> 00:15:19,760 Speaker 1: who worries about everything. But did that send you back 283 00:15:19,800 --> 00:15:22,040 Speaker 1: to the drawing board at all? This new variant UH 284 00:15:22,080 --> 00:15:24,960 Speaker 1: to sort of reassess your outlook for for GDP and 285 00:15:24,960 --> 00:15:29,560 Speaker 1: and pent up demand and everything going forward in the Yeah, 286 00:15:29,560 --> 00:15:33,160 Speaker 1: I I say, it's definitely something that if you had 287 00:15:33,640 --> 00:15:36,760 Speaker 1: a base case that was very optimistic and a bowl 288 00:15:36,800 --> 00:15:40,680 Speaker 1: case on top of that, you have to say, well, actually, 289 00:15:40,680 --> 00:15:42,520 Speaker 1: you know, we we gotta we gotta take out the 290 00:15:42,560 --> 00:15:44,680 Speaker 1: bowl case. The you know, the base case is now 291 00:15:44,960 --> 00:15:48,240 Speaker 1: the bowl case. And what was our and what was 292 00:15:48,320 --> 00:15:50,600 Speaker 1: kind of our more muddling through case, You've got to 293 00:15:50,640 --> 00:15:53,320 Speaker 1: raise the probability on that more so, I I would 294 00:15:53,360 --> 00:15:56,800 Speaker 1: view oh, Macron as more cutting off the right tail 295 00:15:57,440 --> 00:16:00,920 Speaker 1: of growth and growth outcomes as we as we head 296 00:16:00,920 --> 00:16:05,880 Speaker 1: into Remember that prior to what the day before Thanksgiving, 297 00:16:06,520 --> 00:16:09,440 Speaker 1: we were poised to see a pretty material acceleration and 298 00:16:09,480 --> 00:16:12,760 Speaker 1: economic activity in both the US and China, the world's 299 00:16:12,760 --> 00:16:15,480 Speaker 1: too largest economies, from Q three to Q four, and 300 00:16:15,520 --> 00:16:17,400 Speaker 1: we're about to head into this new year with a 301 00:16:17,400 --> 00:16:19,960 Speaker 1: full head of steam. So that's that's obviously not going 302 00:16:20,000 --> 00:16:22,880 Speaker 1: to happen at all to the same degree. So you're 303 00:16:23,080 --> 00:16:25,200 Speaker 1: it's I see more of this as more reducing the 304 00:16:25,320 --> 00:16:28,480 Speaker 1: right tail of activity than as something that you know 305 00:16:28,760 --> 00:16:31,320 Speaker 1: very much throws us to the left tail side of 306 00:16:31,360 --> 00:16:34,920 Speaker 1: equation where we have to be worried about recession again. 307 00:16:35,240 --> 00:16:39,760 Speaker 1: And from a more portfolio and asset allocation standpoint, I'd 308 00:16:39,800 --> 00:16:42,640 Speaker 1: say what this does is that it makes you think 309 00:16:42,680 --> 00:16:45,800 Speaker 1: a little more about what assets you think are going 310 00:16:45,840 --> 00:16:49,120 Speaker 1: to be you know, appropriate hedges and how so you know, 311 00:16:49,160 --> 00:16:52,520 Speaker 1: for instance, we we still kind of had a good 312 00:16:52,720 --> 00:16:54,520 Speaker 1: view on the U S dollar and its role as 313 00:16:54,560 --> 00:16:57,960 Speaker 1: a portfolio hedge. In the event that investors are going 314 00:16:58,000 --> 00:17:00,440 Speaker 1: to have a growth scare are going to worry about 315 00:17:00,480 --> 00:17:03,040 Speaker 1: the pandemic a fair bit that usually gives a U. 316 00:17:03,120 --> 00:17:06,160 Speaker 1: S dollars some kind of you know, flight to safety benefit. 317 00:17:06,920 --> 00:17:09,480 Speaker 1: But on the other hand, given how much near term 318 00:17:09,520 --> 00:17:13,000 Speaker 1: fed pricing we've had, it also means that concerns about 319 00:17:13,040 --> 00:17:16,399 Speaker 1: growth decelerations, how the potentialists suck out some of that 320 00:17:16,520 --> 00:17:19,359 Speaker 1: pricing in the US front end. So on. On the margin, 321 00:17:19,440 --> 00:17:23,200 Speaker 1: this is something that would increase the attractiveness of US 322 00:17:23,280 --> 00:17:26,919 Speaker 1: duration a little more as a hedge relative to the 323 00:17:27,000 --> 00:17:31,200 Speaker 1: US dollar from that kind of portfolio asset allocation standpoint, 324 00:17:31,280 --> 00:17:33,960 Speaker 1: So that's you know, that's something we continue to think 325 00:17:33,960 --> 00:17:36,919 Speaker 1: through and try and make sure we're as effectively and 326 00:17:36,960 --> 00:17:42,400 Speaker 1: efficiently balanced in the way we're protecting ourselves from different scenarios. So, look, 327 00:17:42,440 --> 00:17:44,679 Speaker 1: can you actually talk about some of the areas of 328 00:17:44,720 --> 00:17:47,040 Speaker 1: the stock market that you guys do like, Because I 329 00:17:47,080 --> 00:17:49,200 Speaker 1: was reading your note it says you like risk assets, 330 00:17:49,240 --> 00:17:53,439 Speaker 1: most leverage, typical strength. So you mentioned small caps as 331 00:17:53,480 --> 00:17:57,479 Speaker 1: well as financials and energy regions such as Japan and Europe. 332 00:17:57,560 --> 00:17:59,680 Speaker 1: So can you talk about what's behind that. I was 333 00:17:59,680 --> 00:18:03,560 Speaker 1: actually struck by the energy call and what's behind that 334 00:18:03,680 --> 00:18:07,760 Speaker 1: as well? Yeah, so, and I would say that if 335 00:18:07,760 --> 00:18:10,480 Speaker 1: we're talking about, you know, sectors versus regions, and whereas 336 00:18:10,520 --> 00:18:13,359 Speaker 1: they're they're more conviction, there's there's more conviction the in 337 00:18:13,400 --> 00:18:16,959 Speaker 1: the sector calls than the than the regional calls. But still, 338 00:18:17,000 --> 00:18:19,800 Speaker 1: you know it broadly the story is is similar across 339 00:18:19,800 --> 00:18:23,879 Speaker 1: all and that these are relatively relatively cheap areas of 340 00:18:23,880 --> 00:18:26,240 Speaker 1: the market. We think the kind of the the macro 341 00:18:26,440 --> 00:18:30,119 Speaker 1: catalyst validate being being more involved in them and having 342 00:18:30,280 --> 00:18:34,200 Speaker 1: some of the better or close to as good earnings growth. 343 00:18:34,240 --> 00:18:36,440 Speaker 1: As you know, a lot of the tech heavyweights that 344 00:18:36,480 --> 00:18:40,840 Speaker 1: about earned for a generation now have that some of 345 00:18:40,880 --> 00:18:44,280 Speaker 1: that valuation gap be remedied. When it comes to financials, 346 00:18:44,359 --> 00:18:48,119 Speaker 1: what we see, as you know, global financials is real 347 00:18:48,240 --> 00:18:53,320 Speaker 1: rates marching higher as central banks withdraw policy withdraw policy stimulus, 348 00:18:53,640 --> 00:18:56,840 Speaker 1: and you know, that's something that if it's not something 349 00:18:56,880 --> 00:19:00,640 Speaker 1: that immediately kind of tips over a global econom like activity, 350 00:19:00,640 --> 00:19:03,679 Speaker 1: and particularly if it's something that's happening in a synchronized 351 00:19:03,680 --> 00:19:06,960 Speaker 1: fashion globally rather than just being the US, uh, this 352 00:19:07,040 --> 00:19:09,600 Speaker 1: is something that it's going to benefit banks in generally 353 00:19:09,720 --> 00:19:12,760 Speaker 1: the higher real rates, even if the curve is biased 354 00:19:12,760 --> 00:19:15,720 Speaker 1: towards flattening. Also, if you look at forward earnings for 355 00:19:15,800 --> 00:19:19,679 Speaker 1: share estimates for the banking group, those those seem like 356 00:19:19,720 --> 00:19:22,439 Speaker 1: they have a pretty low bar to be revised up 357 00:19:23,119 --> 00:19:25,239 Speaker 1: going forward. And part of that is the fact that, 358 00:19:25,600 --> 00:19:27,520 Speaker 1: especially at the U S, banks have have had a 359 00:19:27,520 --> 00:19:30,399 Speaker 1: lot of lone loss reserve releases this year. You know, 360 00:19:30,520 --> 00:19:34,040 Speaker 1: we COVID wasn't as out of a credit event as expected, 361 00:19:34,040 --> 00:19:37,280 Speaker 1: in large part because of all the fiscal and monetary stimulus. 362 00:19:37,440 --> 00:19:39,280 Speaker 1: So you know, therefore they were able to kind of 363 00:19:39,760 --> 00:19:43,920 Speaker 1: release that cushion more so than others. And in another 364 00:19:44,000 --> 00:19:46,679 Speaker 1: segments like European banks for instance, there's a lot more 365 00:19:46,760 --> 00:19:49,639 Speaker 1: room for that to come down and for shareholder return 366 00:19:49,760 --> 00:19:52,800 Speaker 1: programs dividends and buy backs to to also go up. 367 00:19:53,240 --> 00:19:56,120 Speaker 1: When it comes to energy, this is you know, a 368 00:19:56,119 --> 00:19:59,720 Speaker 1: a view that energy stocks are discounting a lower price 369 00:19:59,720 --> 00:20:02,080 Speaker 1: of boy will then you currently exists in the market, 370 00:20:02,480 --> 00:20:07,560 Speaker 1: and that kind of this uh, this higher higher range 371 00:20:07,640 --> 00:20:11,119 Speaker 1: for oil compared to last cycle is going to persist. 372 00:20:11,240 --> 00:20:13,800 Speaker 1: We're not necessarily in the camp that you're going to get, 373 00:20:13,840 --> 00:20:16,720 Speaker 1: you know, this hundred and fifty two dollar oil. That's 374 00:20:16,760 --> 00:20:19,679 Speaker 1: not kind of what informs our optimism on the on 375 00:20:19,720 --> 00:20:22,639 Speaker 1: the energy sector. It's that energy companies are trading as 376 00:20:22,640 --> 00:20:25,240 Speaker 1: though the price of oil is significantly lower than it 377 00:20:25,320 --> 00:20:27,960 Speaker 1: is now, so there's further room for earnings, for share 378 00:20:28,040 --> 00:20:31,920 Speaker 1: estimates to go up. And also just looking at the 379 00:20:31,920 --> 00:20:35,560 Speaker 1: the kind of reasons why you might think the oil 380 00:20:35,640 --> 00:20:38,920 Speaker 1: market could go out of kilter in the near term. 381 00:20:39,960 --> 00:20:43,119 Speaker 1: We see OPEC as mostly on a preset course in 382 00:20:43,240 --> 00:20:45,720 Speaker 1: terms of how they're returning oil to the market in 383 00:20:45,720 --> 00:20:48,639 Speaker 1: a fairly telegraphed fashion. And what we also see then 384 00:20:48,760 --> 00:20:52,159 Speaker 1: is a ton of capital discipline from US shale producers. 385 00:20:52,240 --> 00:20:54,800 Speaker 1: So one thing that's been interesting to look at is 386 00:20:54,800 --> 00:20:56,439 Speaker 1: that if you look at the you know, the drilled 387 00:20:56,440 --> 00:20:59,560 Speaker 1: but uncompleted wells the ducks. Those are the ones that 388 00:20:59,640 --> 00:21:02,600 Speaker 1: essentially can get turned on the fastest when you're when 389 00:21:02,600 --> 00:21:06,399 Speaker 1: you're trying to kind of boost production. What US oil 390 00:21:06,440 --> 00:21:09,639 Speaker 1: producers have been doing to help boost supply off the 391 00:21:09,680 --> 00:21:12,440 Speaker 1: you know, very low levels it was at post pandemic, 392 00:21:12,680 --> 00:21:17,800 Speaker 1: but not necessarily the levels that it's that it was 393 00:21:17,840 --> 00:21:20,000 Speaker 1: at in the kind of the zenith of the shail 394 00:21:20,080 --> 00:21:22,639 Speaker 1: boom is that they've just been running down those inventories. 395 00:21:22,680 --> 00:21:25,399 Speaker 1: What that means going forward is you need capex and 396 00:21:25,400 --> 00:21:27,960 Speaker 1: as we see rig counts go up, that's going to 397 00:21:28,000 --> 00:21:31,000 Speaker 1: be about not about boosting production, that's going to be 398 00:21:31,000 --> 00:21:34,360 Speaker 1: about right sizing inventory accounts to a large extent, So 399 00:21:34,960 --> 00:21:38,080 Speaker 1: U shail companies right now are very openly being run 400 00:21:38,280 --> 00:21:40,520 Speaker 1: for the benefit of shareholders, for the benefit of the 401 00:21:40,560 --> 00:21:43,320 Speaker 1: balance sheet, and production growth is far down the list 402 00:21:43,320 --> 00:21:46,080 Speaker 1: of priorities. That's something that keeps a bit of a 403 00:21:46,119 --> 00:21:49,760 Speaker 1: lid on the supply outlook and the demand outlooks. As 404 00:21:49,800 --> 00:21:52,280 Speaker 1: you know, we have a very optimistic view there, so 405 00:21:52,480 --> 00:21:54,920 Speaker 1: you know, continue to see that market remaining pretty tight. 406 00:21:55,840 --> 00:21:58,240 Speaker 1: Well that I do have kind of an ulterior motive. 407 00:21:58,320 --> 00:22:01,719 Speaker 1: I was hoping we could ask Luca question so loaded 408 00:22:01,800 --> 00:22:04,000 Speaker 1: that he gets fired and has to come back to Bloomberg. 409 00:22:04,040 --> 00:22:05,600 Speaker 1: What do you what do you think is that? Does 410 00:22:05,600 --> 00:22:08,639 Speaker 1: that mean I would love to sit next to Luke again? 411 00:22:10,480 --> 00:22:12,840 Speaker 1: In my eyes, it's I mean, it's kind of mean, 412 00:22:12,960 --> 00:22:15,919 Speaker 1: but I'm for it. I'm dropping a Teller Swift reference there, 413 00:22:15,920 --> 00:22:18,000 Speaker 1: you guys. Pray didn't even Oh yes, oh I didn't 414 00:22:18,000 --> 00:22:20,639 Speaker 1: because I figured you wouldn't know it so well. You 415 00:22:20,680 --> 00:22:22,920 Speaker 1: know how much grief I'm gonna get from my old 416 00:22:22,920 --> 00:22:26,000 Speaker 1: man friends for for Taylor Swift. I'm never gonna hear 417 00:22:26,080 --> 00:22:29,640 Speaker 1: none of this. But anyway, Luke, I'm gonna go there. 418 00:22:29,680 --> 00:22:32,800 Speaker 1: You know, it's not quite Thanksgiving, it's not quite Christmas, 419 00:22:32,840 --> 00:22:35,080 Speaker 1: and you're not supposed to talk about this stuff but politics. 420 00:22:35,080 --> 00:22:38,600 Speaker 1: I want to talk politics with you. I think you 421 00:22:38,680 --> 00:22:42,160 Speaker 1: are one of the few who can talk political economy 422 00:22:42,200 --> 00:22:44,760 Speaker 1: type of things, and I'm just curious. You know, we've 423 00:22:44,760 --> 00:22:47,920 Speaker 1: got the mid term elections coming up in November. Obviously, 424 00:22:48,119 --> 00:22:50,520 Speaker 1: it's that's a world away in market time. You know, 425 00:22:50,560 --> 00:22:53,359 Speaker 1: inflation obviously has been the biggest political talking point right 426 00:22:53,400 --> 00:22:56,240 Speaker 1: from the from the right. Is it too early to 427 00:22:56,320 --> 00:22:59,960 Speaker 1: sort of factor in politics the mid term? A lot 428 00:23:00,000 --> 00:23:03,440 Speaker 1: sctions into any any market used for for next year 429 00:23:03,440 --> 00:23:07,120 Speaker 1: and beyond, and I especially you know when you think 430 00:23:07,160 --> 00:23:10,720 Speaker 1: about the fiscal headwind or tail wind that we had 431 00:23:10,800 --> 00:23:15,719 Speaker 1: last year, and you know, surprise, surprise, all of a sudden, 432 00:23:15,760 --> 00:23:19,560 Speaker 1: fiscal policy was a fabulous thing for the markets. But 433 00:23:19,600 --> 00:23:22,040 Speaker 1: you know, this year, I gotta think, you know, at 434 00:23:22,080 --> 00:23:25,160 Speaker 1: best it's neutral, At worst, it becomes a headwind if 435 00:23:25,200 --> 00:23:28,280 Speaker 1: they managed to actually raise the corporate taxes. UM, I 436 00:23:28,320 --> 00:23:32,400 Speaker 1: certainly don't see any big stimulus package getting past uh. 437 00:23:32,520 --> 00:23:34,560 Speaker 1: At least I would surprise the market to the upside. 438 00:23:34,960 --> 00:23:37,320 Speaker 1: What are you thinking about the political climate in the 439 00:23:37,440 --> 00:23:40,600 Speaker 1: US and and that fiscal piece of the puzzle for 440 00:23:40,640 --> 00:23:45,000 Speaker 1: this year. So it's it's great that I can artfully 441 00:23:45,520 --> 00:23:49,120 Speaker 1: sidestep this so well because how how how I'm thinking 442 00:23:49,119 --> 00:23:53,840 Speaker 1: about politics and and the policy outlooked generally, is that obviously, 443 00:23:53,840 --> 00:23:56,520 Speaker 1: if we look back through the past eighteen to twenty 444 00:23:56,520 --> 00:23:59,960 Speaker 1: four months, how important has policy been into the matt 445 00:24:00,000 --> 00:24:02,359 Speaker 1: Are economic outlook. It's been the it's been the alpha 446 00:24:02,359 --> 00:24:05,040 Speaker 1: and little mega. It's been pretty much everything until we 447 00:24:05,160 --> 00:24:07,920 Speaker 1: got to the vaccine, and even since then, it's helped 448 00:24:08,000 --> 00:24:12,600 Speaker 1: kind of distinguish relative winners and losers note performers etcetera. 449 00:24:12,680 --> 00:24:17,159 Speaker 1: By by the extent of the stimulus after that. The 450 00:24:17,160 --> 00:24:21,320 Speaker 1: the thing now is that it's less important because you've 451 00:24:21,440 --> 00:24:24,399 Speaker 1: put the private sector in in such a healthy shape 452 00:24:24,960 --> 00:24:28,000 Speaker 1: that we can hand the baton pretty pretty artfully. That 453 00:24:28,280 --> 00:24:31,880 Speaker 1: you know. I don't foresee a large range. I don't 454 00:24:31,920 --> 00:24:35,720 Speaker 1: foresee in the range of fiscal outcomes, especially for the 455 00:24:35,880 --> 00:24:38,560 Speaker 1: for the US, China potentially a different story, more and 456 00:24:38,680 --> 00:24:41,840 Speaker 1: more volatility there. But in the US, I don't see 457 00:24:41,880 --> 00:24:45,239 Speaker 1: within the range of fiscal outcomes next year something that 458 00:24:45,320 --> 00:24:49,040 Speaker 1: jeopardizes above trend growth. Don't see that as a factor. 459 00:24:49,160 --> 00:24:51,520 Speaker 1: I think the private sector is going to grab the 460 00:24:51,640 --> 00:24:55,960 Speaker 1: baton and absolutely dash with it. That's bad news, full down. 461 00:24:55,960 --> 00:24:57,360 Speaker 1: I think he's gonna keep his job. I don't think 462 00:24:57,359 --> 00:25:00,359 Speaker 1: we're gonna get him canceled with that one. Yeah, really, 463 00:25:00,400 --> 00:25:02,399 Speaker 1: I really do miss sitting next to you, Luke. Now, 464 00:25:02,720 --> 00:25:04,920 Speaker 1: I used to pick up digging when pulled on it 465 00:25:05,040 --> 00:25:07,320 Speaker 1: be on calls, so I think that's the bigger part. 466 00:25:07,400 --> 00:25:26,280 Speaker 1: He was. He was the best seatmate. Look, I love 467 00:25:26,359 --> 00:25:29,040 Speaker 1: this bit in one of your recent notes because I 468 00:25:29,080 --> 00:25:32,040 Speaker 1: actually hadn't seen it anywhere else. It said, supply constraints 469 00:25:32,040 --> 00:25:35,760 Speaker 1: are in some instances consumers way of telling corporations to 470 00:25:35,880 --> 00:25:39,840 Speaker 1: increase capital expenditures. I know you mentioned topics earlier, but 471 00:25:40,720 --> 00:25:43,159 Speaker 1: it sounds like you are expecting more topics and I'm 472 00:25:43,160 --> 00:25:47,520 Speaker 1: wondering why and what that means for the market. Yeah, So, 473 00:25:47,560 --> 00:25:51,200 Speaker 1: I mean, I think that's one of the silver linings 474 00:25:51,280 --> 00:25:56,200 Speaker 1: of inflation, right that it's uh in this environment, it's 475 00:25:56,240 --> 00:25:57,960 Speaker 1: a it's a little different because a lot of the 476 00:25:58,080 --> 00:26:02,119 Speaker 1: supply constraints are so COVID induced and artificial. But we 477 00:26:02,200 --> 00:26:06,600 Speaker 1: see that kind of income and measures of demand are 478 00:26:06,680 --> 00:26:11,240 Speaker 1: are above pre COVID levels, and I suspect that that 479 00:26:11,280 --> 00:26:14,240 Speaker 1: body and motion is going to stay in motion. So 480 00:26:14,520 --> 00:26:16,879 Speaker 1: what then has to adjust on on a going forward 481 00:26:16,880 --> 00:26:20,800 Speaker 1: basis is the supply side. I think we can to 482 00:26:20,880 --> 00:26:24,440 Speaker 1: a certain extent trust companies and their and their capex intentions, 483 00:26:24,480 --> 00:26:28,840 Speaker 1: which across regional FED surveys are are extremely high if 484 00:26:28,880 --> 00:26:31,160 Speaker 1: we're looking at the you know, the sixth month forward 485 00:26:31,200 --> 00:26:35,800 Speaker 1: outlook for capex. I think also embedded in this though, 486 00:26:35,880 --> 00:26:39,120 Speaker 1: is the is the downside risk that you know, right 487 00:26:39,119 --> 00:26:42,080 Speaker 1: now nobody's talking about, but I'm sure sometime within the 488 00:26:42,119 --> 00:26:45,680 Speaker 1: next year we'll start to is the idea that because 489 00:26:45,720 --> 00:26:48,359 Speaker 1: of because the inflationary forces were running through. Now the 490 00:26:49,200 --> 00:26:51,640 Speaker 1: eventually we're going to end up with this inflationary forces, 491 00:26:52,000 --> 00:26:55,119 Speaker 1: and part of that might be fueled by the capital 492 00:26:55,119 --> 00:26:58,720 Speaker 1: expenditures we get. Usually it's I forget who said it 493 00:26:58,800 --> 00:27:02,240 Speaker 1: might have been uh nessing talent, but he said something 494 00:27:02,280 --> 00:27:05,760 Speaker 1: akin to I've seen a lot of gluts that aren't 495 00:27:05,800 --> 00:27:09,280 Speaker 1: necessarily followed by shortages. But pretty much every shortage I 496 00:27:09,320 --> 00:27:12,119 Speaker 1: see is you know, followed at some point or another 497 00:27:12,640 --> 00:27:15,080 Speaker 1: by a by a glut. So I think that's kind 498 00:27:15,080 --> 00:27:17,320 Speaker 1: of one risk. But in the near term, it's it's 499 00:27:17,400 --> 00:27:19,760 Speaker 1: let's let's focus on let's look, let's get horse in 500 00:27:19,760 --> 00:27:22,600 Speaker 1: the mouth. We've got a strong capex outlook. And one 501 00:27:22,640 --> 00:27:24,600 Speaker 1: of the great things about capex is if you're looking 502 00:27:24,640 --> 00:27:27,560 Speaker 1: at kind of the profit equation where profits come from 503 00:27:28,040 --> 00:27:30,560 Speaker 1: capital expenditures or something that you know, for one company 504 00:27:30,600 --> 00:27:32,680 Speaker 1: who you're who you're buying the capex from, that's you 505 00:27:32,760 --> 00:27:35,359 Speaker 1: an immediate source of revenues and earnings for them, But 506 00:27:35,440 --> 00:27:39,000 Speaker 1: for the company doing the capital expenditures, that's being depreciated 507 00:27:39,040 --> 00:27:41,639 Speaker 1: over time. So it's something that through its very act 508 00:27:42,119 --> 00:27:44,960 Speaker 1: from an accounting standpoint, does have a very positive effect 509 00:27:45,320 --> 00:27:47,800 Speaker 1: on on earnings the way they're the way they're reported. 510 00:27:47,880 --> 00:27:50,400 Speaker 1: So if something that does inform our view that you're 511 00:27:50,440 --> 00:27:53,760 Speaker 1: going to have some you know, pretty strong at least 512 00:27:53,840 --> 00:27:59,120 Speaker 1: kind of twenty seventeen like levels of EPs growth next year. Yeah, 513 00:27:59,119 --> 00:28:00,720 Speaker 1: I'm glad you brought that. But I've been saying for 514 00:28:00,760 --> 00:28:04,000 Speaker 1: a while, I feel like there's deflation or or low 515 00:28:04,080 --> 00:28:05,760 Speaker 1: inflation on the other end of this when all the 516 00:28:05,800 --> 00:28:08,919 Speaker 1: supply bottlenecks or work through. You know, if we do 517 00:28:09,000 --> 00:28:11,560 Speaker 1: see that, Luke is uh, is that where transitory You're 518 00:28:11,560 --> 00:28:14,680 Speaker 1: gonna be taken out of retirement to describe that scenario, 519 00:28:14,720 --> 00:28:16,400 Speaker 1: do you think or is it something that FED would 520 00:28:16,520 --> 00:28:21,880 Speaker 1: react to? Yeah, I I I mean, that's that's kind 521 00:28:21,880 --> 00:28:25,600 Speaker 1: of an interesting outcome that I think we've seen in 522 00:28:25,600 --> 00:28:30,160 Speaker 1: the past. When the Fed quote unquote wants to hike 523 00:28:31,040 --> 00:28:33,879 Speaker 1: it will it will find a preferred measure of inflation 524 00:28:34,000 --> 00:28:36,440 Speaker 1: that it wants to focus on too, to justify those tykes. 525 00:28:36,480 --> 00:28:39,440 Speaker 1: I remember when you know the Dallas Fed trimmed to 526 00:28:39,480 --> 00:28:42,400 Speaker 1: mean was was all the rage within the FED. And 527 00:28:42,560 --> 00:28:45,280 Speaker 1: you know, one interesting part of this is that you're 528 00:28:45,320 --> 00:28:47,600 Speaker 1: going to see this this big gap that we have 529 00:28:47,800 --> 00:28:51,520 Speaker 1: between c p I and n PC continue to say 530 00:28:51,680 --> 00:28:55,240 Speaker 1: wide and even wide and further based on just shelter 531 00:28:55,360 --> 00:28:57,520 Speaker 1: being a much bigger part of cp I than it 532 00:28:57,600 --> 00:29:01,440 Speaker 1: is for pc PC more important to the to the FED, 533 00:29:01,520 --> 00:29:03,719 Speaker 1: or at least you know what they what they target. 534 00:29:03,880 --> 00:29:07,440 Speaker 1: So I I think that you know, you you take 535 00:29:07,480 --> 00:29:10,200 Speaker 1: the FED more or less at their at their word 536 00:29:10,360 --> 00:29:13,440 Speaker 1: in terms of dealing with inflation. But I think it's 537 00:29:13,440 --> 00:29:17,680 Speaker 1: important to remember that if inflation is clearly just managing 538 00:29:17,720 --> 00:29:20,680 Speaker 1: the flip side of this kind of managing the high 539 00:29:20,760 --> 00:29:23,600 Speaker 1: readings we have now base effects cutting the other way, 540 00:29:23,880 --> 00:29:26,920 Speaker 1: you know, some build out of excess capacity, then it 541 00:29:26,920 --> 00:29:29,360 Speaker 1: would be it would be very odd if the FED 542 00:29:29,560 --> 00:29:32,160 Speaker 1: that showed a lot of tolerance for very above trend 543 00:29:32,200 --> 00:29:36,120 Speaker 1: inflation right now, because it you know, knows or identifies 544 00:29:36,480 --> 00:29:38,680 Speaker 1: that you know, some of that is transitory. It would 545 00:29:38,680 --> 00:29:40,960 Speaker 1: be very odd if they reacted to a bit of 546 00:29:41,000 --> 00:29:44,520 Speaker 1: disinflation the other way, particularly if real growth is very 547 00:29:44,560 --> 00:29:47,640 Speaker 1: strong and you know, in the employment rate and measures 548 00:29:47,680 --> 00:29:52,080 Speaker 1: of labor utilization are are looking pretty healthy. Yeah, alright, 549 00:29:52,120 --> 00:29:54,640 Speaker 1: look good stuff. Before we get to the crazy thing, Luke, 550 00:29:54,680 --> 00:29:56,440 Speaker 1: I do have to ask you, as your role of 551 00:29:56,560 --> 00:30:00,400 Speaker 1: sort of men's fashion icon around here at Blueberg. Well, 552 00:30:00,440 --> 00:30:03,280 Speaker 1: Don I used to describe Luke's fashion sense as risk 553 00:30:03,360 --> 00:30:06,080 Speaker 1: on Luke. Now that you're at a bank, is it? 554 00:30:06,160 --> 00:30:08,400 Speaker 1: Are you more? Have you toned it down? You still 555 00:30:08,560 --> 00:30:13,920 Speaker 1: risk on a dresser or more of a dresser. I'm 556 00:30:13,960 --> 00:30:17,320 Speaker 1: a I'm a sixty so I'm you know, sixty equities, 557 00:30:17,360 --> 00:30:20,800 Speaker 1: twenty bonds and twenty alternatives. You know that's that's I think, 558 00:30:20,840 --> 00:30:23,959 Speaker 1: what I mean, what I'm aiming for now. Yeah, all right, 559 00:30:24,240 --> 00:30:26,000 Speaker 1: You've got a little he's got a little crypto in 560 00:30:26,040 --> 00:30:29,600 Speaker 1: his wordrobe, some some laser beam ties. Maybe, I don't know, 561 00:30:29,640 --> 00:30:32,720 Speaker 1: we'll see who does really great to have you. But 562 00:30:32,960 --> 00:30:35,160 Speaker 1: you know, we can't let you go without some crazy things, 563 00:30:35,200 --> 00:30:38,239 Speaker 1: so uh stand by for the crazy things. Tiden up 564 00:30:38,280 --> 00:30:42,040 Speaker 1: your straight jackets. It's time for the craziest things we 565 00:30:42,120 --> 00:30:47,040 Speaker 1: saw in markets this week. Fill that'll let's start with you. Okay, 566 00:30:47,160 --> 00:30:50,840 Speaker 1: my weirdest thing, and anybody could have seen this coming, 567 00:30:50,840 --> 00:30:53,440 Speaker 1: but it's still super weird. H and R Block is 568 00:30:53,440 --> 00:30:58,440 Speaker 1: suing Jack Dorsey's Block for trademark infringement. So H and 569 00:30:58,520 --> 00:31:02,240 Speaker 1: R Block said the company formerly known as Square because 570 00:31:02,280 --> 00:31:04,440 Speaker 1: if you'll remember, a couple of weeks ago, Square changed 571 00:31:04,480 --> 00:31:07,960 Speaker 1: its name to block. H and R said it appears 572 00:31:08,000 --> 00:31:10,920 Speaker 1: to be taking a shortcut to capitalize on the well 573 00:31:11,000 --> 00:31:15,960 Speaker 1: known block moniker and that it might create confusion for consumers. 574 00:31:16,560 --> 00:31:18,600 Speaker 1: H and R Block has been around for something like 575 00:31:18,640 --> 00:31:24,400 Speaker 1: six or seven decades, so anybody could have seen this coming. Yeah, yeah, 576 00:31:24,560 --> 00:31:26,200 Speaker 1: I have to follow that one. I don't know. I 577 00:31:26,240 --> 00:31:28,480 Speaker 1: don't know if I'm mature, what I what I would 578 00:31:28,480 --> 00:31:32,040 Speaker 1: decide on that. I that's a tough one. All right, Louke, 579 00:31:32,080 --> 00:31:34,920 Speaker 1: how about you? You You got anything crazy first? Okay? I like, 580 00:31:34,960 --> 00:31:36,920 Speaker 1: I'll give you. I'll give you a couple. The first 581 00:31:37,320 --> 00:31:42,320 Speaker 1: is so on on Thursday, we we woke up to 582 00:31:42,560 --> 00:31:47,360 Speaker 1: a unexpected rate hike from the Bank of England. And 583 00:31:47,840 --> 00:31:51,000 Speaker 1: you know what normally happens when you have a monetary 584 00:31:51,000 --> 00:31:54,560 Speaker 1: surprise of this nature. I would, I personally would expect 585 00:31:54,920 --> 00:31:59,120 Speaker 1: be the curve to flatten. It did not. It it's 586 00:31:59,120 --> 00:32:02,120 Speaker 1: deepened by a very little bit, but it's still steepened. 587 00:32:02,160 --> 00:32:05,360 Speaker 1: Having two ten steepen on a day with a hawkish 588 00:32:05,400 --> 00:32:09,120 Speaker 1: monetary surprise, that is something, you know, very weird for 589 00:32:09,200 --> 00:32:12,000 Speaker 1: you know, for contrast, when the when the Bank of 590 00:32:12,040 --> 00:32:15,720 Speaker 1: Canada cut rates back in January in a very surprising 591 00:32:15,760 --> 00:32:17,960 Speaker 1: move the curve deepened by about you know, ten to 592 00:32:17,960 --> 00:32:21,080 Speaker 1: fifteen basis points that day. That's the kind of you know, 593 00:32:21,400 --> 00:32:23,080 Speaker 1: expectation you have. I would have thought that, you know, 594 00:32:23,120 --> 00:32:26,080 Speaker 1: in reverse, given that this was a more surprising hike. 595 00:32:26,440 --> 00:32:29,160 Speaker 1: The the other thing I'll throw in, and it's from 596 00:32:29,200 --> 00:32:34,640 Speaker 1: I think new New Bloomberg columnists Heavier Blast, pointing out 597 00:32:34,800 --> 00:32:37,600 Speaker 1: that we all know that there's kind of concerns about 598 00:32:38,560 --> 00:32:44,560 Speaker 1: energy shortages, the natural gas shortages, the weather Europe, etcetera, 599 00:32:44,720 --> 00:32:47,600 Speaker 1: what have you. He's already pointing that out, that you're 600 00:32:47,640 --> 00:32:51,120 Speaker 1: seeing traders start to hedge in and build in some 601 00:32:51,200 --> 00:32:54,600 Speaker 1: kind of risk premia for an especially cold winter next year. 602 00:32:54,920 --> 00:32:57,440 Speaker 1: We know that, you know, making predictions is hard, especially 603 00:32:57,480 --> 00:33:00,360 Speaker 1: about the future. But trying to forecast you know, the 604 00:33:00,680 --> 00:33:03,640 Speaker 1: degree of whether severity or what will be the supply 605 00:33:03,760 --> 00:33:07,640 Speaker 1: dynamics demand dynamics in this commodity market over a year 606 00:33:07,680 --> 00:33:10,880 Speaker 1: down the road. Boy, that's uh, that seems pretty odd 607 00:33:10,880 --> 00:33:13,360 Speaker 1: to me. Yeah, whether they got the old Farmers Almanac 608 00:33:13,440 --> 00:33:15,680 Speaker 1: out or something. I guess I wonder, I wonder if 609 00:33:15,720 --> 00:33:19,400 Speaker 1: whether predicting will ever get you know, more accurate into 610 00:33:19,440 --> 00:33:22,440 Speaker 1: the distant future like that. And uh, that's a trick. 611 00:33:22,480 --> 00:33:24,360 Speaker 1: I have to read dot com. Javier is great by 612 00:33:24,360 --> 00:33:27,200 Speaker 1: the way. All right, well, I'm gonna try to regain 613 00:33:27,320 --> 00:33:30,320 Speaker 1: some rock and roll dignity here after all this Taylor 614 00:33:30,360 --> 00:33:35,720 Speaker 1: Swift talk with a story from Rolling Stone about Bruce Springsteen. Bildona, 615 00:33:35,920 --> 00:33:37,959 Speaker 1: I trust you've heard of him. He's kind of like 616 00:33:38,000 --> 00:33:41,120 Speaker 1: the Taylor Swift of my generation, I guess you could say. 617 00:33:41,320 --> 00:33:44,880 Speaker 1: And this is not gonna sound that crazy, but it's crazy. 618 00:33:44,920 --> 00:33:46,920 Speaker 1: If you know. Bruce kind of a guy who never 619 00:33:47,040 --> 00:33:50,840 Speaker 1: quote unquote sold out, but he sold the publishing catalog 620 00:33:51,560 --> 00:33:54,600 Speaker 1: all those songs, so all the mass recordings and all 621 00:33:54,640 --> 00:33:58,000 Speaker 1: the publishing rights to Sony and what that basically paves 622 00:33:58,080 --> 00:34:02,280 Speaker 1: the way for is you know Springsteen and some you know, baby, 623 00:34:02,280 --> 00:34:05,240 Speaker 1: we're born to run to Taco bell or or or 624 00:34:05,240 --> 00:34:08,719 Speaker 1: stuff like that, pink Cadillac commercials and whatnot. But I 625 00:34:08,760 --> 00:34:10,799 Speaker 1: want to play a game. Get the game show going 626 00:34:10,840 --> 00:34:13,000 Speaker 1: to and play a little prices right with you? And Luke? 627 00:34:13,200 --> 00:34:17,839 Speaker 1: What do you suppose the publishing rights to the entire 628 00:34:17,880 --> 00:34:21,680 Speaker 1: Bruce Springsteen catalog is worth? If you're Sony Music, what 629 00:34:21,719 --> 00:34:26,600 Speaker 1: are you paying? Well, let's start with you fifty million? Okay, 630 00:34:26,600 --> 00:34:29,879 Speaker 1: I'm keeping I'm gonna keep a poker face here. I've 631 00:34:29,880 --> 00:34:33,040 Speaker 1: both thought you're a Jersey girl. You know at heart, 632 00:34:33,120 --> 00:34:35,520 Speaker 1: that's a high price. I know it's a that's a 633 00:34:35,520 --> 00:34:38,120 Speaker 1: pretty high price tag. I mean usually I like low 634 00:34:38,160 --> 00:34:40,759 Speaker 1: ball things, so I'm going with fifty million. I'm trying 635 00:34:40,800 --> 00:34:43,680 Speaker 1: to keep my poker face here. But Luke, so what 636 00:34:43,680 --> 00:34:46,399 Speaker 1: what I've done is I didn't cheat by looking up 637 00:34:46,719 --> 00:34:49,279 Speaker 1: looking this up, but I was frantically googling just to 638 00:34:49,320 --> 00:34:53,560 Speaker 1: make sure I took the well what it's scooter by 639 00:34:53,600 --> 00:34:56,799 Speaker 1: by Taylor? So for three million, so I'm gonna go. 640 00:34:57,040 --> 00:35:00,080 Speaker 1: You know, we're definitely going under three hundred million, but 641 00:35:00,160 --> 00:35:02,680 Speaker 1: I'm gonna go more than fifty million. I'd say that, like, 642 00:35:02,680 --> 00:35:05,399 Speaker 1: Bruce Springsteen is basically half the Taylor Swift, so we'll 643 00:35:05,440 --> 00:35:10,240 Speaker 1: give it a hundred fifty million. Bruce Springsteen is half 644 00:35:10,239 --> 00:35:13,960 Speaker 1: a Teller Swift. Luke, I hope your colleagues that ubs 645 00:35:14,040 --> 00:35:16,520 Speaker 1: heard that and you get all the grief you deserve 646 00:35:16,640 --> 00:35:19,319 Speaker 1: when you return to the office. Bruce Springsteen is half 647 00:35:19,320 --> 00:35:22,799 Speaker 1: a Taylor Swift. That's a really good strategy though, that 648 00:35:22,920 --> 00:35:28,920 Speaker 1: was that was so smart. Five hundred million for Springstein catalog. 649 00:35:29,640 --> 00:35:32,080 Speaker 1: So he's like a Taylor swift and a half and 650 00:35:32,120 --> 00:35:35,920 Speaker 1: then some wow. I really was sure fifty million was 651 00:35:35,920 --> 00:35:38,839 Speaker 1: a good guest. Fifty We'll not a fifty million Spring 652 00:35:39,080 --> 00:35:42,440 Speaker 1: Springsteen could get fifty million for like a show with 653 00:35:42,560 --> 00:35:44,760 Speaker 1: the Stone Pony. Come on, yes, I guess I'm sorry. 654 00:35:44,880 --> 00:35:49,160 Speaker 1: On the other hand, Taylor, Taylor has at least of 655 00:35:49,160 --> 00:35:52,840 Speaker 1: her career left to go, so three hundred, you know, 656 00:35:52,920 --> 00:35:55,759 Speaker 1: the five hundred I think on atmorize it a little 657 00:35:55,760 --> 00:35:58,799 Speaker 1: bit there on on an expected value basis, I still 658 00:35:58,840 --> 00:36:03,160 Speaker 1: think we've got Taylor reg Andrus here. All right, all right, well, 659 00:36:03,160 --> 00:36:05,880 Speaker 1: what do you think Scooter's steak is worth now that 660 00:36:06,000 --> 00:36:10,120 Speaker 1: she's redoing everything? That's definitely a depreciating asset. I would think, yeah, 661 00:36:10,160 --> 00:36:13,040 Speaker 1: I mean, like, let's let's make that a let's make 662 00:36:13,080 --> 00:36:19,479 Speaker 1: that a doughnut short as the expression goes, fair enough, 663 00:36:20,000 --> 00:36:22,560 Speaker 1: Lucas short Scooter, I don't know. I think Scooter is 664 00:36:22,560 --> 00:36:23,919 Speaker 1: going to figure it out a way to come back 665 00:36:24,360 --> 00:36:26,600 Speaker 1: back from it. All my money, I think I think 666 00:36:26,640 --> 00:36:29,000 Speaker 1: this is the last time we mentioned Yeah, I just 667 00:36:29,080 --> 00:36:33,520 Speaker 1: like to be a troll about Well, we're great to 668 00:36:33,520 --> 00:36:35,920 Speaker 1: catch up with you. We we really appreciate your time 669 00:36:36,160 --> 00:36:38,759 Speaker 1: and and we're gonna have to have you back in 670 00:36:38,840 --> 00:36:42,719 Speaker 1: two and talk about if you've got anything wrong. Invariably, Hey, 671 00:36:42,719 --> 00:36:44,759 Speaker 1: thanks for thanks for having me, folks. The best of 672 00:36:44,760 --> 00:36:47,760 Speaker 1: the holidays to to you and the families, and we're 673 00:36:47,760 --> 00:36:49,640 Speaker 1: we don't really think you'll get anything wrong. I'm assuming 674 00:36:49,680 --> 00:36:54,160 Speaker 1: Luke's reports are all going to be about on these calls, 675 00:36:54,160 --> 00:36:57,120 Speaker 1: and you're doing pretty good. I think, Luka great to 676 00:36:57,160 --> 00:37:07,279 Speaker 1: see it. Thank you, Luke. Care folks, What Goes Up. 677 00:37:07,280 --> 00:37:09,399 Speaker 1: We'll be back next week. Until then, you can find 678 00:37:09,480 --> 00:37:12,760 Speaker 1: us on the Bloomberg Terminal website and app or wherever 679 00:37:12,800 --> 00:37:15,279 Speaker 1: you get your podcasts. We'd love it if you took 680 00:37:15,280 --> 00:37:17,560 Speaker 1: the time to rate and review the show on Apple 681 00:37:17,640 --> 00:37:20,680 Speaker 1: Podcasts so more listeners can find us. And you can 682 00:37:20,680 --> 00:37:24,640 Speaker 1: find us on Twitter, follow me at Reaganonymous. The Dota 683 00:37:24,680 --> 00:37:27,560 Speaker 1: Hirich is that the Dotta Hirich. You can also follow 684 00:37:27,560 --> 00:37:31,200 Speaker 1: Bloomberg Podcasts at podcast and thank you to Charlie Pelletta. 685 00:37:31,200 --> 00:37:34,880 Speaker 1: Bloomberg Radio. What Goes Up is produced by Laura Carlson. 686 00:37:35,320 --> 00:37:39,200 Speaker 1: The head of Bloomberg Podcast is Francesco Levy. Thanks for listening. 687 00:37:39,239 --> 00:37:40,040 Speaker 1: See you next time.