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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern

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Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business app.

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Speaker 1: Listen on demand wherever you get your podcasts, or watch

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Speaker 1: us live on YouTube.

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Speaker 2: There are textbooks in school where you look at it

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Speaker 2: and go, God, I hope I can get a quality see.

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Speaker 3: That would be.

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Speaker 2: Stephen Chichetti, who is in Ohio State, a legend at

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Speaker 2: brandeis outside Boston with work for the nation at the

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Speaker 2: Bank of International Settlements, came out of the solo combine

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Speaker 2: at Massachusetts Institute of Technology. Steve Chikichetti owns money in banking.

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Speaker 2: He owns all the plumbing that you all.

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Speaker 4: Learn and then you forget that.

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Speaker 2: It has a lot to do with the FED meeting

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Speaker 2: here on Wednesday, joining us an expert on this Amandolina

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Speaker 2: of Black Crock. You and I are like, we look

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Speaker 2: at all this stuff and go, who's our expert on this?

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Speaker 2: Why is short term money so difficult? Why do we

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Speaker 2: all worship Steve Chiicetti like that.

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Speaker 5: Good morning, thank you for having me.

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Speaker 6: I think the short term rate is probably most in

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Speaker 6: focus because it's the way that the Fed's policy transmits

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Speaker 6: through the economy.

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Speaker 5: When they are changing the reserve, it's the SCURTI. It's

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Speaker 5: really the primary tool.

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Speaker 6: And so when we talk about the FED lowering rates,

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Speaker 6: they're actually not changing the intermediate tenure or the thirty

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Speaker 6: year treasury. They're changing the FED funds rate, which is

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Speaker 6: a much more short term policy rate. What you are

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Speaker 6: also alluding to is kind of the shift in the

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Speaker 6: runoff of the balance sheet, which also has impacts on

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Speaker 6: repo market, short term funding markets, and the availability of reserves.

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Speaker 5: And so I'm actually.

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Speaker 6: Less focused on that, I would say, for this upcoming meeting,

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Speaker 6: because I think there are just so many points that

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Speaker 6: we want to get from Chair Powell about twenty twenty

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Speaker 6: six and the path beyond and where the Committee is.

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Speaker 2: Kerwood Powell says about twenty twenty six. If he's not

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Speaker 2: going to be.

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Speaker 6: Here for opening day, I think, I think, what, well,

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Speaker 6: his term will end in May, so he will be

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Speaker 6: with us for a little bit longer.

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Speaker 4: The red sox slip out of.

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Speaker 6: First, I think what I would like to hear from him, though,

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Speaker 6: is kind of how the Committee is entering twenty twenty

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Speaker 6: six in terms of the hawks versus the DUBBSH split

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Speaker 6: and whether or not there is any sort of consensus

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Speaker 6: around where neutral is. As you know, what we are

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Speaker 6: most focused on is the depth and the drivers of

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Speaker 6: the federate cutting cycle, not the timing, and so I

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Speaker 6: think that's really what we're'll be listening for on Wednesday.

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Speaker 7: In terms of the credit markets, Amanda, you know the

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Speaker 7: great return so far twenty twenty five, it's been a

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Speaker 7: good year. What's the twenty six outlook for macro credit?

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Speaker 8: Here?

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Speaker 6: If I had to sum it up, I would say

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Speaker 6: we still have a generally constructive stance, but I think

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Speaker 6: leaning even more into the idea that if you're allocating

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Speaker 6: to credit, you should be allocating for income and all

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Speaker 6: in yield. Not because there's room for spreads to move

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Speaker 6: materially tighter, and actually not because we think long in

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Speaker 6: or intermediate rates are going tighter. Actually, if you look

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Speaker 6: at HYLD spreads, they're back at two sixty four.

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Speaker 5: It's actually not that far.

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Speaker 6: It's a couple basis points from the local tights. So

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Speaker 6: we are really in some ways price for perfection and credit.

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Speaker 4: Too, would your jarget, Yes, Basically.

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Speaker 6: We're price for perfection indeed, there's there's a there's very

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Speaker 6: little room for spreads to move materially tighter. I would say,

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Speaker 6: though I would be rum missed if I didn't say this,

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Speaker 6: that I at the same time that spreads are tight,

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Speaker 6: and we acknowledge that the bar for credit spreads to

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Speaker 6: move wider on a sustained basis is also very high.

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Speaker 2: Bloomberg Surveillance across the nation. Good morning on a Monday. Look, Paul,

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Speaker 2: look out the window here dark.

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Speaker 4: It's dark?

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Speaker 2: Now?

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Speaker 7: What is that a zero dark there?

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Speaker 4: Wednessdate light savings? Yeah, have it existly, we say, good

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Speaker 4: morning across the nation. On YouTube.

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Speaker 2: Subscribe to Bloomberg Podcast anastagiam Aroso with us here in

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Speaker 2: a moment and ninety two nine FM Boston, ninety nine

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Speaker 2: one FM Washington here in the Tri State area in

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Speaker 2: the line of Blackrock with Paul Sweeney.

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Speaker 7: Man talk to us about credit quality yet there. We

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Speaker 7: haven't really heard any problems out there. Are you concerned

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Speaker 7: that that could be an issue for twenty twenty six?

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Speaker 6: What we are seeing our idiosyncratic instances of defaults. I

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Speaker 6: would say, underperformance of certain coports of credit triple cs

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Speaker 6: in the leverage loan area, smaller issuers and private credit

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Speaker 6: for example. So we are seeing i would say dispersion,

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Speaker 6: but it's stopping well short of market disruption, and I

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Speaker 6: think that's a trend that will continue into twenty twenty six.

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Speaker 6: In general, I think one of the most interesting dynamics

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Speaker 6: has actually been in the investment grade landscape, where you've

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Speaker 6: seen higher rated companies kind of methodically add debt to

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Speaker 6: their capital structures. That's a trend that we think will

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Speaker 6: continue into twenty twenty six. And then I think in general,

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Speaker 6: one of our views has been that the peak in

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Speaker 6: credit defaults in the leverage financi universe is likely behind

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Speaker 6: us at this point. They peaked in November of twenty

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Speaker 6: twenty four in the leverage loan market, and we feel

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Speaker 6: very confident that that peak is behind us.

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Speaker 2: When you do a quote deep analysis of private credit fundamentals,

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Speaker 2: which restaurant do you go to?

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Speaker 6: In bim down so that that is actually an extensive

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Speaker 6: analysis of thousands of companies that we can track through

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Speaker 6: third party data sources across the US and Europe using

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Speaker 6: a variety of third party tools. So we're doing that

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Speaker 6: in an industry wide analysis. The takeaway and our view

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Speaker 6: please credit fundamentals at a high level, so think interest coverage,

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Speaker 6: covenant defaults are actually improving under the surface, though there's

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Speaker 6: wide dispersion in ebitdell growth, for example, across company sizes,

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Speaker 6: company sectors. Again fits with that point that Paul alluded

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Speaker 6: to dispersion but not disruption, but really in general credit

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Speaker 6: in private credit is mirroring a lot of the same

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Speaker 6: themes that we see in liquid credit under the surface,

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Speaker 6: more differentiation, but in aggregate solid fundamentals.

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Speaker 2: Is it being priced Paul helped me, or you're better

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Speaker 2: at it? Is it being priced fairly?

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Speaker 4: Is that the right language? Yeah? Is it like when

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Speaker 4: you this stuff is like not liquid? Is it?

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Speaker 6: Do you know the weekly Sure we can deep We

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Speaker 6: can track that actually in spread levels for new private

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Speaker 6: credit deals and spread levels for new liquid credit deals.

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Speaker 5: So right, kind of an apples to apples comparison.

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Speaker 6: What you see is that as the risk on tone

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Speaker 6: in the liquid credit market has been strong, not dissimilar

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Speaker 6: to equities, spreads for new private credit loans have also tightened,

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Speaker 6: So the markets are moving in tandem. It's very consistent

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Speaker 6: with our view that there's almost a financing continuum across

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Speaker 6: these these asset classes where they're not siloed like they

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Speaker 6: used to be several years ago. Actually, private credit can

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Speaker 6: service and is servicing borrowers that are large enough to

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Speaker 6: access in the public markets.

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Speaker 7: So, I mean, Blackrock, you guys do everything, You're everywhere.

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Speaker 7: So do portfolio managers come to you and say, educate

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Speaker 7: me on the private credit market. I want to maybe

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Speaker 7: increase my exposures at how the conversation.

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Speaker 6: I mean, I would say, our information flow across the

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Speaker 6: firm goes in both directions, and I think that's probably

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Speaker 6: a really strong competitive advantage. But yes, I would say,

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Speaker 6: and this goes to our clients as well. Several years ago,

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Speaker 6: when we were having conversations with investors, maybe it was

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Speaker 6: a different person allocating to private credit versus liquid credit.

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Speaker 6: Now there's actually more commonalities. It might be the same person,

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Speaker 6: And I think that makes sense because the relative value

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Speaker 6: discussion is not happening in a silo in these markets

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Speaker 6: that liquid credit is informing private credit and vice versa.

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Speaker 6: Never mind equities for example, and rights.

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Speaker 7: Are there certain sectors here just across the fixed income

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Speaker 7: space the credit space that are I don't know, screening

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Speaker 7: walls you guys these days.

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Speaker 6: I would say, we continue to like financials. This was

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Speaker 6: actually something that came up at the Bloomberg Intelligence.

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Speaker 7: So LUs Morgan reports learnings. The next day they come

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Speaker 7: to the bond market and they call you guys.

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Speaker 6: So financials are great from the perspective of we actually

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Speaker 6: like the sector from tailwinds of m and A capital

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Speaker 6: markets activity deregulation. But also financials offer you an ability

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Speaker 6: to move down in capital structure in an issuer that

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Speaker 6: you like, right, so maybe you're in the subordinated debt

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Speaker 6: versus the senior and that's actually a way to pick

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Speaker 6: up additional return in an issuer that you feel comfortable.

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Speaker 6: But I would also say that heading into twenty twenty six,

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Speaker 6: we're kind of watching for a reacceleration in the middle

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Speaker 6: in consumers, so cyclicals in some areas could be attractive.

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Speaker 2: A nice brief here for global Wall Street and fixed

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Speaker 2: income Amanda line them with us with black Rock, Anastasia

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Speaker 2: mroso ineequity markets to do that in a bit, all

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Speaker 2: sorts of good guests coming up with good conversation.

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Speaker 4: Right now, we're efforting GEETHA.

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Speaker 2: Raganoth and on the news flow over the weekend on

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Speaker 2: Netflix Lukashaw that extraordinary.

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Speaker 7: Article of conversation really yesterday at.

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Speaker 4: The White House. So we're hoping to get Githa on here.

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Speaker 2: It's some point, how do you look at It's off

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Speaker 2: your remed But I'm going there and don't give me

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Speaker 2: this compliance mallarchy.

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Speaker 4: No one's listening this morning. The bottom line is all

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Speaker 4: these big.

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Speaker 2: Tech companies like Netflix, like you know, the names don't matter.

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Speaker 2: They can issue billions of debt. What's the sow what

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Speaker 2: of that?

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Speaker 5: A couple of things.

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Speaker 6: One, as a credit investor, if a company is highly rated,

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Speaker 6: it's not a foregone conclusion that they will stay at

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Speaker 6: that rating.

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Speaker 5: So I think that's kind of first and foremost.

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Speaker 6: It reminds me when I covered healthcare many years ago,

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Speaker 6: a lot of those companies were double A, triple A rated.

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Speaker 6: They waited for strategic m ANDA deals, but they used

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Speaker 6: that balance sheet flexibility, added debt to their capital structure.

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Speaker 6: Took a couple of notches of downgrade, but we're still

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Speaker 6: in investment grade territory. The other key thing that investors

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Speaker 6: watch on M and A financings, if it is funded

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Speaker 6: with cash or debt, oftentimes there's a period of increased

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Speaker 6: leverage followed by deleveraging from the company. So listening to

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Speaker 6: what the management team says about what is their plan

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Speaker 6: to get back to the target leverage over x period

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Speaker 6: of time, that is something that investors closely watch. So

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Speaker 6: say a company is temporarily above their target leverage but

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Speaker 6: has a plan to get down to the target within

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Speaker 6: twelve to twenty four months, that will be something that

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Speaker 6: investors will watch closely.

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Speaker 5: So there are a lot of implications for capital.

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Speaker 6: Structure, for rating, for credit quality, but in general, most

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Speaker 6: of these companies are very committed to staying investment grade.

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Speaker 7: It's just the.

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Speaker 6: Degree of how highly rated they are. And I think

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Speaker 6: the takeaway from even the post pandemic period is CFOs

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Speaker 6: and treasurers don't need to be double A or triple

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Speaker 6: A rated to have ample access to the capital markets.

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Speaker 7: How about new issuance, what's the expectation for twenty twenty.

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Speaker 6: Six, I think their scope for reacceleration. I would say

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Speaker 6: one of the views that we've had for a while

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Speaker 6: is that this strategic m and A rebound that we've

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Speaker 6: definitely seen over the past few months is poised to

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Speaker 6: extend into twenty twenty six. CEO confidence is a big

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Speaker 6: implication of that. I think there's a lot of unfinished

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Speaker 6: business from the pandemic in terms of diversification that companies

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Speaker 6: will want to achieve. Some of that will be funded

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Speaker 6: as it has been with cash and debt historically, so

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Speaker 6: that will result in issuance in the capital markets. And

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Speaker 6: then also the maturity walls in twenty twenty eight and

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Speaker 6: twenty twenty nine in the high old.

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Speaker 5: Market are steep.

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Speaker 6: I think it's reasonable to assume that companies, as they

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Speaker 6: have been well pre funding pre fund years in advance.

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Speaker 4: I don't look at the yield.

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Speaker 2: On money markets because of the triple leverage doll cash flow. I'm,

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Speaker 2: you know, net clean with a field goal out at

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Speaker 2: nine ten percent.

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Speaker 4: But all of a sudden I noticed this weekend money market.

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Speaker 2: Funds have come in from what paula glorious five percent,

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Speaker 2: steady steady four percent. How is the flow dynamics of

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Speaker 2: what is black rev scene on money market funds nudging

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Speaker 2: under four percent.

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Speaker 6: There's been an expectation that some of that capital will

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Speaker 6: flow into say credit and equity markets, but it has

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Speaker 6: It hasn't really to the extent that many anticipated.

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Speaker 5: I think part of that might be.

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Speaker 6: While those numbers in absolute terms are large as a

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Speaker 6: proportion of the overall invested in landscape, proportionately, they're not

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Speaker 6: that out of line because, as we know, equity values

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Speaker 6: and fixed income have.

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Speaker 5: Increased as well.

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Speaker 6: So I think it would be a bonus if that

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Speaker 6: money flew into the markets. But I would say the

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Speaker 6: demand backdrop outside of that is very robust, and we're

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Speaker 6: not relying on that for a constructive view and riskss well,

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Speaker 6: the folks as a screen.

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Speaker 2: Bt mm screen which is just magnificent. I was somebody

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Speaker 2: taught I think Gera taught me this screen years ago.

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Speaker 2: The three month T bill Paul three point sixty three percent.

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Speaker 4: Yeah, did I know that? I mean it's sort have

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Speaker 4: crept up on us.

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Speaker 7: I mean I know, I know it. Seasoned investors. All

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Speaker 7: they do is roll te bills. Yeah, that's what they do.

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Speaker 7: And they go skiing and they play off. That's all

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Speaker 7: they do is roll t builds.

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Speaker 4: Well, it's the way Amanda the world.

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Speaker 9: I don't know.

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Speaker 4: And they say that's a living.

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Speaker 2: Okay, what do you tell equity market people. I'm a

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Speaker 2: big believer that the bond market leads in analysis and zeitgeist.

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Speaker 2: If you will the equity market. What would you say

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Speaker 2: to Anastasia m Rosa right now about the bond market

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Speaker 2: that affects equities.

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Speaker 5: I would say all two things.

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Speaker 6: One, we are looking to the equity market for the

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Speaker 6: earnings trajectory, which I think is very much informing the

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Speaker 6: resilient tone that we see in credit. Oftentimes equity investors

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Speaker 6: will be thinking about where can a company access capital

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Speaker 6: in the corporate credit market. And I would say, right now,

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Speaker 6: if I had to relay one message, it's that capital

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Speaker 6: markets are wide open and robust.

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Speaker 7: Absolutely you thank you.

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Speaker 4: Thank you for coming, and thank you for all your

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Speaker 4: work for us this year. Thanks. I hope we see

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Speaker 4: you before the end of the year.

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Speaker 2: Amanda Line is with black Crow just extraordinary with all

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Speaker 2: the different nuances a fixed incomeany.

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Speaker 4: Stay with us.

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Speaker 3: More from Bloomberg Surveillance coming up after this.

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Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live

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Speaker 1: weekday afternoons from seven to ten am Eastern Listen on

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Speaker 1: Apple Karplay and Android Auto with the Bloomberg Business app,

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Speaker 1: or watch us live on YouTube.

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Speaker 2: We are advantaged and again, folks, I can't say enough.

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Speaker 2: If you have conversations with quality people. The newsflow always

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Speaker 2: fits in. Keitha Raghanoth and her people say said, she's

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Speaker 2: not coming on unless there's headlines. In real time, we

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Speaker 2: have paramount headlines coming across the Bloomberg professional servers.

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Speaker 4: Githa, let's just start with the sum total.

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Speaker 2: Are you surprised at the rapidity of the Ellison response.

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Speaker 4: To what we saw with Netflix and Warner Brothers Discovery.

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Speaker 8: Yeah, not surprised at all. Tom. I mean, we knew

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Speaker 8: they were not going to go away easily.

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Speaker 10: You know, there was so much drama last week, even

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Speaker 10: as we knew that Netflix was kind of closing in

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Speaker 10: on the Warner Brothers deal. But just from you know,

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Speaker 10: first take, so basically even last week, we know that

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Speaker 10: as Netflix kind of made its offer, it just just

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Speaker 10: a little bit shy of twenty eight dollars per share

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Speaker 10: for the studio. Paramount had actually made the offer for

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Speaker 10: a thirty dollars cash bid for all of.

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Speaker 8: Warner Brothers Discovery.

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Speaker 10: So the thing is, when you kind of compare the

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Speaker 10: two offers here, the Netflix offer is still superior because

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Speaker 10: it's only for part of the company. The remaining part

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Speaker 10: of the company, which is the TV networks business. We

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Speaker 10: value it at about four dollars a share. So you

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Speaker 10: put the value of the total Warner Brothers Discovery assets,

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Speaker 10: the entire portfolio thirty two dollars, so right off the bat,

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Speaker 10: slightly lower than what Netflix is offering. Of course, I

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Speaker 10: think the way that Paramount Skydance would frame this is

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Speaker 10: there is a lot less regulatory risk and there is

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Speaker 10: much more certainty that this deal actually goes through.

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Speaker 4: Paul Tweeny with Geetha.

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Speaker 2: Raganath and Paul, I'm just going to say within the

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Speaker 2: forty five headlines, the enterprise value numbers are eighty ish

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Speaker 2: billion versus one hundred and eight billion with this new offer,

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Speaker 2: a twenty billion isht See how I nailed it exactly.

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Speaker 4: That's why they has to be to leave rum.

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Speaker 7: Continue, Keith, as you talk institutional investors out there, is

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Speaker 7: there a preference for one of Brothers Discovery shareholders? You know,

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Speaker 7: which deal did they would they prefer?

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Speaker 2: Here?

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Speaker 7: I mean this one. The good news about this one

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Speaker 7: is one hundred percent cash versus the Netflix, which is

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Speaker 7: mostly cash, but there is an equity component.

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Speaker 10: Yeah, I don't know if that makes too much of

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Speaker 10: a difference, Paul, because I mean we're talking about Netflix

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Speaker 10: stock which which is really equal, you know, equivalent to

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Speaker 10: cash or maybe even better. I mean, this is a

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Speaker 10: company that is that was valued right before this deal

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Speaker 10: went through at about thirty times forward. So again a

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Speaker 10: lot of value in in the Netflix stock. There's this

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Speaker 10: fantastic earnings power, or there's fantastic free cash flow potential.

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Speaker 10: So I think that the deals are pretty comparable. As

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Speaker 10: I was just mentioning to Tom, you just from the

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Speaker 10: first look of the deals itself, the Netflix offers actually

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Speaker 10: superior because you do have a four dollar value on

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Speaker 10: the TV networks, and here the implied value with paramount

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Speaker 10: would be two dollars, which would obviously be lower.

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Speaker 2: We say good morning to Los Angeles and of course

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Speaker 2: to Michael Milk and as well quote junk bound King

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Speaker 2: Drexel Burnham Lambert nineteen eighties.

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Speaker 4: What I see your Paul is a word hostile.

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Speaker 2: And the answer is there's new tensions in the debates. Well,

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Speaker 2: it's going to be easy, Paul, to go out there

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Speaker 2: for either party in this battle and get debt inequity

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Speaker 2: deals done.

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Speaker 7: No, I think the capital part of this is going

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Speaker 7: to be that's the easiest part. There's lots of capital

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Speaker 7: at there, so I think either deal can get done

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Speaker 7: very easily in this marketplace. So Githa, One of the

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Speaker 7: issues Tom brings up here is in the initial Paramounts

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Speaker 7: guidance they were talking about some maybe getting some equity

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Speaker 7: capital from Mid East partners. That made some people uncomfortable,

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Speaker 7: and I don't see the Mid East partners in this transaction.

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Speaker 7: This is basically saying equity to be backstopped by Ellison

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Speaker 7: family and Redbird Capital and folks. Redbird Capital is an

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Speaker 7: investment bank that focuses on the media and entertainment industry.

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Speaker 7: They're well known in those circles. So it looks like

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Speaker 7: this is the Ellison standing up and say we're going

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Speaker 7: to fund this whole thing.

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Speaker 10: Yeah.

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Speaker 8: Absolutely.

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Speaker 10: And the problem with that initial reporting, you know, which

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Speaker 10: suggested that about twenty or twenty one billion was going

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Speaker 10: to come from you know, the Saudi Wealth Sovereign Wealth funds,

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Speaker 10: is the problem that once you have a foreign investor involved,

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Speaker 10: there's a whole different regulatory angle to that. And so

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Speaker 10: then this is basically you know, Paramount saying hey, look

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Speaker 10: we're going to get this deal on fast track. You

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Speaker 10: should be really choosing us over Netflix, because that is

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Speaker 10: fraught with so much of antitrust and regulatory risk.

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Speaker 4: I mean just capital, folks.

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Speaker 2: And when I went up to Fenwick Park a couple

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Speaker 2: of years ago, I mean the turnaround for the Red

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Speaker 2: Sox that happened when I went up there and did

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Speaker 2: the CFO story. Redbird Capital is involved in all sorts

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Speaker 2: of sports. They have Aaron Judge on the cover of

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Speaker 2: their their website, Jerry Cardinal and importantly John Thornton, who

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Speaker 2: has a heritage here.

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Speaker 4: With Robert Klein. I mean, this is not an upstart firm.

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Speaker 2: Our listeners and viewers folks may not know Redbird Capital,

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Speaker 2: but Paul, can I assume they're players in this.

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Speaker 7: They are a familiar names, They're definitely players. And then

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Speaker 7: they've also got the debt. Capital is going to be

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Speaker 7: led by some you know, some big players, their Bank

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Speaker 7: of American City and Apollo Group, so parents lined you

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Speaker 7: look at that, yep. So like all the players are

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Speaker 7: a bank that's not involved, everybody's going to get paid here.

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Speaker 7: And Michael Klein, who was used to run Cities Investment

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Speaker 7: banking his firm is also advising, So everybody's involved here.

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Speaker 7: So is this just simply Githa going to be a

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Speaker 7: whoever comes in with the higher number wins. Is this

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Speaker 7: how this might play out?

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Speaker 10: I think so, Paul, and I think you know what's

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Speaker 10: going to be interesting is if Netflix is now forced

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Speaker 10: to increase its offware. Right, I don't know if the

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Speaker 10: twenty eight dollars is going to cut it anymore. Do

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Speaker 10: they need to take it up to thirty dollars a

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Speaker 10: share or even higher? That is the question. And you know,

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Speaker 10: in all this the Big Winner and all this drama,

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Speaker 10: the Big Winner continues to beat David's Osla.

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Speaker 4: Keitha.

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Speaker 2: I look at this and I think of Lukashaw's magisterial

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Speaker 2: effort this weekend.

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Speaker 4: Keitha, did you help him with that? Did you deserve

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Speaker 4: a coll writer in that story?

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Speaker 8: I did not.

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Speaker 11: Unfortunately, the photographs and you know, for people like Paul

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Speaker 11: and you are steeped in this, for all of you

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Speaker 11: across the nation, I'm like you, It's like, how many

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Speaker 11: times have I seen Casablanca and the photographs, Keitha of

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Speaker 11: the Paramount studio and the gauze of the morning sunrise

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Speaker 11: with the hills that.

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Speaker 4: You used to be able to not see.

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Speaker 2: Now with the better pollution, you can see the San

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Speaker 2: Gabriel mountains a Hollywood hill. Who do all those people

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Speaker 2: want to win this hostile battle?

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Speaker 10: So really, if you look at it from a Hollywood perspective, Tom,

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Speaker 10: I think they would actually prefer Paramount, And a big

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Speaker 10: reason is because Paramount is big in terms of movie,

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Speaker 10: in terms of TV content. I mean they want to,

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Speaker 10: you know, bolster the studio operations. We know that they're

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Speaker 10: not going to cut back on you know, theatrical releases.

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Speaker 10: So in many ways, I mean, with Paramount you get

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Speaker 10: more of a known devil if you will.

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Speaker 8: With Netflix, there's just too many unknowns.

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Speaker 10: I mean, yes, they're saying all the right things now

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Speaker 10: just to appease regulators, but who knows what they'll do

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Speaker 10: down the road.

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Speaker 7: KEITHA Paramount obviously owns the Paramount Studio, Warner Brothers owns

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Speaker 7: Warners Studio. Is that a regulatory risk putting those two together,

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Speaker 7: because that would leave just Universal and maybe Sony.

442
00:20:55,359 --> 00:20:57,639
Speaker 8: Yeah, so I don't think so.

443
00:20:57,720 --> 00:20:59,920
Speaker 10: So Actually, if you put the two studios together, you'd

444
00:21:00,040 --> 00:21:03,919
Speaker 10: do get about a twenty five to thirty percent domestic

445
00:21:04,080 --> 00:21:07,920
Speaker 10: box office share. The trigger point, as pointed out by

446
00:21:08,240 --> 00:21:11,480
Speaker 10: Jennifer Ree or anti trust analyst, is usually something greater

447
00:21:11,640 --> 00:21:14,840
Speaker 10: than thirty five percent, so they should still be okay

448
00:21:15,560 --> 00:21:16,800
Speaker 10: from an anti trust standpoint.

449
00:21:17,160 --> 00:21:19,760
Speaker 2: Keithan Roganathan with us, we welcome all of you across

450
00:21:19,840 --> 00:21:22,640
Speaker 2: the nation. Good morning around the world as well all

451
00:21:22,680 --> 00:21:25,680
Speaker 2: the different ways on podcasts on Spotify series XM.

452
00:21:26,119 --> 00:21:30,080
Speaker 3: Thank you for listening on YouTube. Subscribe to Bloomberg Podcast. Paul,

453
00:21:30,080 --> 00:21:32,359
Speaker 3: I'm learning every step of the way. I thought the

454
00:21:32,480 --> 00:21:36,199
Speaker 3: Paramount logo was the matter Horn because I was there

455
00:21:36,240 --> 00:21:36,680
Speaker 3: as a kid.

456
00:21:36,760 --> 00:21:37,520
Speaker 4: Blah blah blah.

457
00:21:37,960 --> 00:21:38,000
Speaker 11: No.

458
00:21:38,680 --> 00:21:44,840
Speaker 2: Nineteen fourteen, the founder of Paramount, William Hodkinson, sketched on

459
00:21:44,920 --> 00:21:48,639
Speaker 2: a cocktail napkin Lamond Peak in Utah.

460
00:21:49,040 --> 00:21:50,280
Speaker 4: It's a mountain in Utah.

461
00:21:50,400 --> 00:21:53,920
Speaker 2: Okay, I never I'm learning every day here as we go.

462
00:21:54,240 --> 00:21:57,920
Speaker 2: Paul Sweeney with KEITHA. Raganoth and on this new news

463
00:21:58,119 --> 00:21:59,800
Speaker 2: on Netflix and Warner Brothers.

464
00:22:00,080 --> 00:22:02,240
Speaker 7: Keith, what do you think the response will be from

465
00:22:02,240 --> 00:22:05,800
Speaker 7: Warner Brothers Discovery here? What are the next steps? I guess?

466
00:22:06,760 --> 00:22:10,200
Speaker 10: So they already actually rebuffed this, so in the you know,

467
00:22:10,920 --> 00:22:13,520
Speaker 10: just as the deal was closing with Netflix on Thursday

468
00:22:13,640 --> 00:22:17,560
Speaker 10: evening last week, a Paramount actually made this last ditch effort,

469
00:22:17,680 --> 00:22:21,280
Speaker 10: putting across this thirty dollars or cash bid. None of

470
00:22:21,320 --> 00:22:24,200
Speaker 10: the details were known, but Warner Brothers actually rejected that,

471
00:22:24,320 --> 00:22:26,680
Speaker 10: So I'm not necessarily sure that you know, this is

472
00:22:27,080 --> 00:22:29,960
Speaker 10: going to work with the board. Of course, they're going

473
00:22:30,040 --> 00:22:33,680
Speaker 10: hostile here. They're taking this directly to shareholders. Again, the

474
00:22:33,880 --> 00:22:37,119
Speaker 10: number itself is not super enticing. I think they're going

475
00:22:37,200 --> 00:22:41,160
Speaker 10: to have to do slightly better, But then again, who knows.

476
00:22:41,359 --> 00:22:45,560
Speaker 7: So I mean again, I guess Comcast was the other bidder.

477
00:22:45,960 --> 00:22:48,040
Speaker 7: Do we have any reason to believe they will come

478
00:22:48,440 --> 00:22:49,400
Speaker 7: in and play in this game?

479
00:22:50,440 --> 00:22:52,400
Speaker 8: I highly doubt it, Paul.

480
00:22:52,520 --> 00:22:55,240
Speaker 10: I don't think they want to get involved in another

481
00:22:55,520 --> 00:22:58,480
Speaker 10: very very expensive bidding war that we've seen this movie

482
00:22:58,600 --> 00:23:02,679
Speaker 10: before with Comcast. They went into this when Disney Fox, uh,

483
00:23:02,760 --> 00:23:04,680
Speaker 10: when the whole Disney Fox drama was going on.

484
00:23:05,280 --> 00:23:06,520
Speaker 8: They overpaid for Sky.

485
00:23:06,640 --> 00:23:08,520
Speaker 10: They paid a fifteen x multiple when they should have

486
00:23:08,520 --> 00:23:11,199
Speaker 10: probably paid about seven x, and they've you know, been reeling,

487
00:23:12,160 --> 00:23:14,919
Speaker 10: reeling from all kinds of pressure ever since. And if

488
00:23:14,960 --> 00:23:17,800
Speaker 10: you just look at the you know, business composition for Comcast,

489
00:23:17,880 --> 00:23:20,240
Speaker 10: eighty five percent of ebit dot coms from their cable

490
00:23:20,280 --> 00:23:21,080
Speaker 10: broadband business.

491
00:23:21,119 --> 00:23:23,080
Speaker 8: So that's really what they should be focusing on.

492
00:23:23,960 --> 00:23:27,840
Speaker 10: So I think the you know, even if they don't paid,

493
00:23:28,440 --> 00:23:30,639
Speaker 10: I don't think it's such a big existential question for

494
00:23:30,720 --> 00:23:31,479
Speaker 10: Comcast right now.

495
00:23:32,080 --> 00:23:34,520
Speaker 2: What are you going to look at today, Keith, I mean,

496
00:23:34,560 --> 00:23:37,000
Speaker 2: away from all the numbers and the excitement of the

497
00:23:37,320 --> 00:23:39,920
Speaker 2: bit and all that, what's a grizzled.

498
00:23:39,560 --> 00:23:41,560
Speaker 4: Pro like, you're going to look at on the XL

499
00:23:41,640 --> 00:23:44,360
Speaker 4: spreadsheet the synergies.

500
00:23:44,560 --> 00:23:47,120
Speaker 10: So you know, when you kind of think about Netflix

501
00:23:47,160 --> 00:23:49,800
Speaker 10: actually laid out two to three billion dollars in synergies,

502
00:23:50,040 --> 00:23:52,280
Speaker 10: and that's the only part of the operation that's only

503
00:23:52,359 --> 00:23:54,560
Speaker 10: with you know, the studio and streaming business, and really

504
00:23:54,600 --> 00:23:56,400
Speaker 10: all of those synergies are just going to come from

505
00:23:56,840 --> 00:23:59,360
Speaker 10: the streaming business. You know, because you have HBO Max,

506
00:23:59,440 --> 00:24:01,760
Speaker 10: you have netfl Netflix. You don't want to run two

507
00:24:01,840 --> 00:24:05,320
Speaker 10: separate services necessarily, So it's combining the text tax. In

508
00:24:05,400 --> 00:24:07,720
Speaker 10: the case of Paramount, there's a whole lot more of

509
00:24:07,800 --> 00:24:10,560
Speaker 10: synergies that can be extracted. You have two separate studios,

510
00:24:10,560 --> 00:24:13,720
Speaker 10: you have two separate or many streaming platforms, you have

511
00:24:13,920 --> 00:24:16,320
Speaker 10: two different TV network's divisions. So when you kind of

512
00:24:16,359 --> 00:24:19,440
Speaker 10: look at the savings potential there, obviously it's huge. It

513
00:24:19,640 --> 00:24:22,240
Speaker 10: just means that Paramount can actually go much higher in

514
00:24:22,359 --> 00:24:22,959
Speaker 10: terms of a bit.

515
00:24:23,080 --> 00:24:25,359
Speaker 2: And while you're on here with us, KEITHA, published moments

516
00:24:25,400 --> 00:24:29,320
Speaker 2: ago called from there two to three billion synergy, six

517
00:24:29,600 --> 00:24:32,920
Speaker 2: billion plus synergy. Yep, I'm going to call that a

518
00:24:33,080 --> 00:24:36,920
Speaker 2: double Yeah, a double synergy. Sure, Paramount takes over the

519
00:24:37,240 --> 00:24:39,760
Speaker 2: Is it synergy French for firing?

520
00:24:40,080 --> 00:24:42,120
Speaker 7: I think so. So if I'm a set designer at

521
00:24:42,440 --> 00:24:44,320
Speaker 7: Warner Brothers, I look across the street and I see

522
00:24:44,760 --> 00:24:47,720
Speaker 7: a set designer Paramount, I'm like, well, we're not going

523
00:24:47,760 --> 00:24:48,240
Speaker 7: to have two.

524
00:24:48,119 --> 00:24:48,760
Speaker 4: Of them, Keitha.

525
00:24:49,040 --> 00:24:51,479
Speaker 2: How bad will the carnage be in a Hollywood off

526
00:24:51,560 --> 00:24:53,399
Speaker 2: this looking at these synergies.

527
00:24:54,240 --> 00:24:55,800
Speaker 8: It will be bad. It will be very bad.

528
00:24:55,800 --> 00:24:58,240
Speaker 10: I mean we're already seeing that from Paramount sky Dance,

529
00:24:58,520 --> 00:25:01,080
Speaker 10: and sky Dance has so much of a smaller studio

530
00:25:01,160 --> 00:25:02,320
Speaker 10: operation than Paramount.

531
00:25:02,720 --> 00:25:05,959
Speaker 8: So this is this is obviously going to be awful

532
00:25:06,600 --> 00:25:07,679
Speaker 8: in terms of job losses.

533
00:25:07,920 --> 00:25:10,440
Speaker 2: Generous of you to be with us with these breaking headlines, Keitha.

534
00:25:10,520 --> 00:25:14,040
Speaker 2: Rogenath and owning the high ground? Is it okay for

535
00:25:14,160 --> 00:25:15,639
Speaker 2: me to say crazy Hollywood?

536
00:25:15,880 --> 00:25:18,480
Speaker 7: Sure? Absolutely? Yeah, Well this is I mean, there's just

537
00:25:18,560 --> 00:25:21,960
Speaker 7: a few chairs left in Hollywood in terms of studios,

538
00:25:22,000 --> 00:25:26,040
Speaker 7: and this one's trading so you better put your best.

539
00:25:25,920 --> 00:25:32,080
Speaker 2: Foot's surprised as an amateur here, the Disney is absolutely silent.

540
00:25:32,480 --> 00:25:36,200
Speaker 7: Like yep silence, And that I think personally, I think

541
00:25:36,240 --> 00:25:38,440
Speaker 7: that's a great strategy. Let these people do with their

542
00:25:38,480 --> 00:25:40,639
Speaker 7: craziness and we're just going to sit here and make

543
00:25:40,720 --> 00:25:43,800
Speaker 7: movies and TV shows and you know, theme parks and

544
00:25:43,840 --> 00:25:45,240
Speaker 7: thru ships and all that kind of stuff.

545
00:25:45,400 --> 00:25:46,000
Speaker 4: Stay with us.

546
00:25:46,320 --> 00:25:49,399
Speaker 3: More from Bloomberg Surveillance coming up after this.

547
00:25:56,600 --> 00:26:00,520
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

548
00:26:00,560 --> 00:26:03,560
Speaker 1: starting at seven am Eastern on Apple Coarclay, and Android

549
00:26:03,600 --> 00:26:06,600
Speaker 1: Auto with the Bloomberg Business app. You can also listen

550
00:26:06,720 --> 00:26:09,960
Speaker 1: live on Amazon Alexa from our flagship New York station,

551
00:26:10,520 --> 00:26:13,160
Speaker 1: Just say Alexa, play Bloomberg eleven thirty.

552
00:26:13,840 --> 00:26:17,600
Speaker 2: What a joy to go down and stand in between

553
00:26:17,760 --> 00:26:22,639
Speaker 2: two dinosaurs at the Houston Dinosaur Museum like they were

554
00:26:22,720 --> 00:26:25,840
Speaker 2: like Jurassic Parks, scary, like real, not like in New

555
00:26:25,960 --> 00:26:29,199
Speaker 2: York City, like really like, oh they're moving, aren't they

556
00:26:29,960 --> 00:26:32,159
Speaker 2: and meet with the CFA Society Houston.

557
00:26:32,240 --> 00:26:34,320
Speaker 4: It was a high point. Joining us here.

558
00:26:34,400 --> 00:26:40,240
Speaker 2: The Queen of shopping around the river Oaks District, Victoria Fernandez, Houston.

559
00:26:40,000 --> 00:26:42,680
Speaker 5: Is lovely it is, and I'm glad you were able

560
00:26:42,720 --> 00:26:43,359
Speaker 5: to experience that.

561
00:26:43,480 --> 00:26:44,800
Speaker 12: But I have to say I was afraid you were

562
00:26:44,840 --> 00:26:46,840
Speaker 12: going to call me a dinosaur at first when you

563
00:26:47,000 --> 00:26:49,440
Speaker 12: started that intro, and I'm glad that wasn't it.

564
00:26:49,840 --> 00:26:52,960
Speaker 2: But the vitality of Houston. I was sort of blown

565
00:26:53,200 --> 00:26:56,800
Speaker 2: away at the stereotype of oil. It's way more than that.

566
00:26:57,160 --> 00:26:59,520
Speaker 5: Rist so much more than that seventies eighties.

567
00:26:59,600 --> 00:27:01,280
Speaker 12: Yes, you can say it was an oil and gas

568
00:27:01,400 --> 00:27:04,639
Speaker 12: economy exactly, which we love land man. But yeah, this

569
00:27:04,760 --> 00:27:08,400
Speaker 12: city has changed dramatically. It's a very diverse city, both

570
00:27:08,480 --> 00:27:10,880
Speaker 12: in terms of population and in terms of the economy.

571
00:27:11,640 --> 00:27:13,760
Speaker 7: So Victoria twenty twenty five a little bit in a

572
00:27:13,800 --> 00:27:16,159
Speaker 7: review mirror here s and p of fifteen percent. The

573
00:27:16,240 --> 00:27:19,680
Speaker 7: nasting up twenty fixed incomes some very high single digit returns.

574
00:27:20,240 --> 00:27:23,000
Speaker 7: Let's lay the groundwork for twenty twenty six. What's the

575
00:27:23,080 --> 00:27:24,520
Speaker 7: conversation you're having with your clients.

576
00:27:24,680 --> 00:27:27,480
Speaker 12: Yeah, so we're telling them to bring their expectations down

577
00:27:27,520 --> 00:27:29,120
Speaker 12: a little bit for twenty twenty six.

578
00:27:29,200 --> 00:27:32,119
Speaker 5: They've had two years of really strong growth in.

579
00:27:32,119 --> 00:27:34,239
Speaker 12: The equity markets and in the fixed income markets, as

580
00:27:34,280 --> 00:27:36,119
Speaker 12: you've talked about as well. But I think we're going

581
00:27:36,200 --> 00:27:37,600
Speaker 12: to see that pull back a little bit.

582
00:27:37,680 --> 00:27:37,800
Speaker 2: Now.

583
00:27:37,840 --> 00:27:40,360
Speaker 12: We've had a little bit of consolidation in the markets

584
00:27:40,400 --> 00:27:43,200
Speaker 12: already at the end of this year. I think as

585
00:27:43,240 --> 00:27:46,000
Speaker 12: we go into next year, first quarter will be pretty strong.

586
00:27:46,119 --> 00:27:48,560
Speaker 12: You've got a lot of stimulus coming in in the

587
00:27:48,600 --> 00:27:50,720
Speaker 12: first quarter of the year. But then I think that

588
00:27:50,840 --> 00:27:53,600
Speaker 12: will start to fade. And the question is can earnings

589
00:27:54,119 --> 00:27:57,080
Speaker 12: survive And if so, then I think you have a

590
00:27:57,320 --> 00:28:01,040
Speaker 12: decent year. But if we start to struggle on those earnings,

591
00:28:01,080 --> 00:28:03,639
Speaker 12: then I think we could see some struggles.

592
00:28:04,080 --> 00:28:07,120
Speaker 7: And on the earnings front, boy, second quarter very good,

593
00:28:07,200 --> 00:28:11,280
Speaker 7: third quarter really good. What is your earnings that look

594
00:28:11,359 --> 00:28:12,200
Speaker 7: for next year? Yeah?

595
00:28:12,280 --> 00:28:14,320
Speaker 5: Look, third quarter, I mean we were.

596
00:28:14,320 --> 00:28:18,160
Speaker 12: Double expectations on EPs growth, right and revenue growth close

597
00:28:18,240 --> 00:28:19,040
Speaker 12: to seven percent.

598
00:28:19,800 --> 00:28:22,320
Speaker 5: Again, we look out and we go but if the

599
00:28:22,400 --> 00:28:24,800
Speaker 5: consumer is starting to slow, that the consumer doesn't have

600
00:28:24,840 --> 00:28:25,639
Speaker 5: to fall off a cliff.

601
00:28:25,680 --> 00:28:28,119
Speaker 12: But if the consumer's slowing and we saw real spending

602
00:28:28,160 --> 00:28:31,760
Speaker 12: come out at being flat last week, then you're looking

603
00:28:31,840 --> 00:28:34,400
Speaker 12: at less spending. You're looking at revenues coming down, you're

604
00:28:34,440 --> 00:28:37,040
Speaker 12: looking at margin compressions. All of these things tells us

605
00:28:37,280 --> 00:28:38,400
Speaker 12: that we should see.

606
00:28:38,280 --> 00:28:40,760
Speaker 5: Earnings start to pull back. A little bit next year.

607
00:28:41,840 --> 00:28:45,040
Speaker 7: I mean, we had tariffs. I'm going to say it's

608
00:28:45,200 --> 00:28:50,240
Speaker 7: kind of been almost a non event after that initial shock.

609
00:28:50,560 --> 00:28:52,800
Speaker 7: Haven't necessarily seen it in the numbers are in the

610
00:28:52,840 --> 00:28:53,520
Speaker 7: economic data.

611
00:28:53,520 --> 00:28:55,400
Speaker 12: I'm not sure, And I wonder, Paul, if you just

612
00:28:55,560 --> 00:28:58,920
Speaker 12: jinxed us right by saying by saying that. I do

613
00:28:59,080 --> 00:29:02,400
Speaker 12: think we have Supreme Court decision coming along on IPA, right,

614
00:29:02,520 --> 00:29:03,240
Speaker 12: and that could.

615
00:29:03,080 --> 00:29:04,240
Speaker 5: Bring some more volatility.

616
00:29:04,320 --> 00:29:06,880
Speaker 12: But I think in the long run there's not going

617
00:29:06,960 --> 00:29:09,200
Speaker 12: to be an issue around refunds, and it's going to

618
00:29:09,280 --> 00:29:12,160
Speaker 12: be more of how the administration puts them into play than.

619
00:29:12,120 --> 00:29:15,640
Speaker 2: If they do your magic of saying, hey, you're scared,

620
00:29:15,840 --> 00:29:18,239
Speaker 2: you've got to participate in the markets. It's really been

621
00:29:18,640 --> 00:29:22,920
Speaker 2: noted this across Mark Global Investments. This is Victoria Fernandez,

622
00:29:22,960 --> 00:29:26,120
Speaker 2: of course, and always Bob Bell. Okay, great, but what

623
00:29:26,440 --> 00:29:29,680
Speaker 2: changes the money market fund is not four point x

624
00:29:29,760 --> 00:29:30,720
Speaker 2: percent anymore?

625
00:29:30,840 --> 00:29:31,160
Speaker 5: Correct?

626
00:29:31,280 --> 00:29:36,480
Speaker 2: What does the behavioral change in Crossmark clients from a

627
00:29:36,560 --> 00:29:38,760
Speaker 2: three point six percent money market fund?

628
00:29:39,160 --> 00:29:39,320
Speaker 8: Yeah?

629
00:29:39,360 --> 00:29:43,120
Speaker 12: I think clients before were okay letting cash sit around.

630
00:29:43,320 --> 00:29:45,840
Speaker 12: They didn't feel that opportunity costs so much because they

631
00:29:45,880 --> 00:29:49,760
Speaker 12: were earning higher rates in that money market now, however,

632
00:29:49,840 --> 00:29:51,680
Speaker 12: we're saying, but look, you've just seen the ten year

633
00:29:51,760 --> 00:29:54,600
Speaker 12: go up fourteen basis points all right. On the treasuries,

634
00:29:54,920 --> 00:29:57,520
Speaker 12: you're seeing a steepening of the yield curve. There's some

635
00:29:57,680 --> 00:30:01,400
Speaker 12: opportunities because there's rotation Tom that we're seeing. It's not

636
00:30:01,640 --> 00:30:04,640
Speaker 12: just healthcare and utilities and energy like we've talked about.

637
00:30:04,880 --> 00:30:09,080
Speaker 12: We're seeing a rotation on the internals and transportation, global autos,

638
00:30:09,280 --> 00:30:12,760
Speaker 12: global materials. You're even seeing it in some of the homebuilders.

639
00:30:13,000 --> 00:30:15,680
Speaker 12: So if we're starting to see some opportunities there that

640
00:30:15,800 --> 00:30:18,800
Speaker 12: the internal trends are shifting, there's there where you want

641
00:30:18,800 --> 00:30:20,080
Speaker 12: to go ahead and put some money to work.

642
00:30:20,200 --> 00:30:23,040
Speaker 3: Victoria Fernandez here and the greater equity market.

643
00:30:23,600 --> 00:30:25,200
Speaker 4: What inning of Houston?

644
00:30:25,640 --> 00:30:27,680
Speaker 2: You know, you're driving over to the hotel and you

645
00:30:27,760 --> 00:30:30,160
Speaker 2: go by the Houston Asters Stadium.

646
00:30:30,360 --> 00:30:32,280
Speaker 7: You're driving your traffic is what you're doing.

647
00:30:33,160 --> 00:30:35,960
Speaker 4: That's what we're doing in a Houston Astros game. What

648
00:30:36,160 --> 00:30:38,560
Speaker 4: inning are we in in this great Ballmark?

649
00:30:39,280 --> 00:30:42,320
Speaker 12: I think you might be doing that seventh inning stretch

650
00:30:42,560 --> 00:30:45,840
Speaker 12: right about now. Yeah, you're singing the song you're having

651
00:30:46,040 --> 00:30:48,560
Speaker 12: getting your bag of peanuts for the end of the game.

652
00:30:48,960 --> 00:30:52,120
Speaker 12: I think we're getting close to that just because the

653
00:30:52,200 --> 00:30:54,800
Speaker 12: stretch that we've seen in valuations again, we might be

654
00:30:54,920 --> 00:30:58,160
Speaker 12: hitting that peak earnings expectation and coming in even though

655
00:30:58,200 --> 00:31:00,520
Speaker 12: there's stimulus coming next year. Like we say, there are

656
00:31:00,880 --> 00:31:05,120
Speaker 12: quite a few headwinds still, labor market deteriorating, manufacturing weakness,

657
00:31:05,240 --> 00:31:07,640
Speaker 12: all of these things that we continue to watch.

658
00:31:07,880 --> 00:31:09,560
Speaker 5: So I think you could be getting towards the end

659
00:31:09,600 --> 00:31:09,800
Speaker 5: in the.

660
00:31:09,840 --> 00:31:12,800
Speaker 2: Seventh inning stretch, Paul, your official beer of the Houston

661
00:31:12,880 --> 00:31:15,240
Speaker 2: astros a Crawford Bach.

662
00:31:15,640 --> 00:31:18,680
Speaker 4: Really, I did not know that that's a local beverage.

663
00:31:18,760 --> 00:31:21,960
Speaker 4: It is Wow, it's learning every time she comes, every

664
00:31:22,000 --> 00:31:23,320
Speaker 4: time a wisdom.

665
00:31:23,040 --> 00:31:24,720
Speaker 12: Head down to it and you have to sing deep

666
00:31:24,760 --> 00:31:27,040
Speaker 12: in the heart of Texas for seventh inning stretch.

667
00:31:27,160 --> 00:31:28,640
Speaker 5: That's yeah, right there you.

668
00:31:28,680 --> 00:31:30,840
Speaker 7: Go with your Crawford What are we doing in the

669
00:31:30,880 --> 00:31:33,640
Speaker 7: bond market here? Again? I got some very nice returns

670
00:31:33,680 --> 00:31:36,920
Speaker 7: in twenty twenty five, even particularly in the credit market.

671
00:31:37,000 --> 00:31:40,000
Speaker 7: So with leverage loans and how yield is that still

672
00:31:40,080 --> 00:31:40,600
Speaker 7: the play here?

673
00:31:41,040 --> 00:31:43,520
Speaker 12: You know, spreads had widened out a little bit. There

674
00:31:43,600 --> 00:31:45,720
Speaker 12: was a lot of concern and you have people talking

675
00:31:45,720 --> 00:31:47,880
Speaker 12: about private credit and is that going to leak into

676
00:31:48,000 --> 00:31:48,760
Speaker 12: investment grade?

677
00:31:49,080 --> 00:31:51,920
Speaker 5: Now you look here to date, high yield.

678
00:31:51,800 --> 00:31:55,200
Speaker 12: Has widened out pretty significantly special triples, especially triple c's,

679
00:31:55,240 --> 00:31:58,080
Speaker 12: but investment grade has not it winded him.

680
00:31:58,080 --> 00:31:58,840
Speaker 5: It's come back in.

681
00:31:59,240 --> 00:32:01,840
Speaker 12: So I do I think you need to be very

682
00:32:01,960 --> 00:32:05,000
Speaker 12: selective is to win you hop in the credit market

683
00:32:05,120 --> 00:32:07,080
Speaker 12: because you want to watch those spreads right now. You

684
00:32:07,120 --> 00:32:09,680
Speaker 12: don't want to pay too much for those. But you've

685
00:32:09,720 --> 00:32:12,840
Speaker 12: got a steepening yield curve. Twenties to thirties is steepening,

686
00:32:12,880 --> 00:32:14,640
Speaker 12: and I think the long end of the curve is

687
00:32:14,680 --> 00:32:17,640
Speaker 12: going to continue to go higher. Look at what Japan

688
00:32:18,000 --> 00:32:21,160
Speaker 12: is doing, fiscal supply coming in. I don't think inflation

689
00:32:21,320 --> 00:32:24,000
Speaker 12: is coming back to two percent anytime soon. So I

690
00:32:24,080 --> 00:32:26,120
Speaker 12: think that steepening gives you a chance to go out

691
00:32:26,120 --> 00:32:27,360
Speaker 12: a little bit longer on the curve.

692
00:32:27,440 --> 00:32:30,320
Speaker 2: Okay, I'm sorry, but there's some things in America that

693
00:32:30,600 --> 00:32:34,960
Speaker 2: maintain you think of all the upset Paul over the year,

694
00:32:35,680 --> 00:32:37,320
Speaker 2: it's a good and wonderful thing.

695
00:32:37,960 --> 00:32:38,840
Speaker 4: The Texas A and.

696
00:32:38,960 --> 00:32:43,840
Speaker 2: M will play in the Goodyear Cotton Bowl Classic that's

697
00:32:43,880 --> 00:32:47,160
Speaker 2: from my childhood as well. They're how excited, I mean,

698
00:32:47,240 --> 00:32:50,560
Speaker 2: this is great Texas Ayan and the fighting Texas Aggies

699
00:32:50,800 --> 00:32:55,719
Speaker 2: will take on the Ohio State is the Indiana watches.

700
00:32:55,880 --> 00:32:56,920
Speaker 4: Are you going to go to the game?

701
00:32:57,320 --> 00:32:59,000
Speaker 12: I will not be at the game that I will

702
00:32:59,120 --> 00:33:01,600
Speaker 12: be watching. And it's going to be a tough one.

703
00:33:01,800 --> 00:33:04,760
Speaker 12: I mean against Ohio State. It's going to be tough.

704
00:33:04,880 --> 00:33:06,280
Speaker 5: But we're going to give it all.

705
00:33:06,320 --> 00:33:09,239
Speaker 7: We got only aggies. Yeah, we know some aggies here

706
00:33:09,280 --> 00:33:11,400
Speaker 7: in the building, do you sure?

707
00:33:12,760 --> 00:33:14,600
Speaker 12: And I know people are upset about some of the

708
00:33:14,640 --> 00:33:16,880
Speaker 12: group of five making it. But my daughter is in

709
00:33:17,600 --> 00:33:20,200
Speaker 12: her first year of law school at Tulane. She went

710
00:33:20,320 --> 00:33:23,480
Speaker 12: in here and she said, who knew Tulane would be

711
00:33:23,560 --> 00:33:24,440
Speaker 12: my football school?

712
00:33:24,520 --> 00:33:24,680
Speaker 8: Right?

713
00:33:24,760 --> 00:33:26,920
Speaker 5: But I ended up getting to go to So it's

714
00:33:26,960 --> 00:33:27,600
Speaker 5: really cool.

715
00:33:28,400 --> 00:33:28,600
Speaker 11: Yeah.

716
00:33:28,680 --> 00:33:30,640
Speaker 2: I noticed that that Tulane like it's sort of like

717
00:33:30,720 --> 00:33:34,080
Speaker 2: do because like, oh they played football exactly exactly.

718
00:33:34,400 --> 00:33:37,440
Speaker 4: Okay, great school. Thank you, Thank you to Houston for

719
00:33:37,520 --> 00:33:39,640
Speaker 4: the hospitality down there was really really.

720
00:33:39,680 --> 00:33:43,080
Speaker 5: We're glad you enjoyed it. Come back anytime, trust me.

721
00:33:43,200 --> 00:33:47,080
Speaker 4: After going to not River Oaks or something. What's the

722
00:33:47,200 --> 00:33:50,680
Speaker 4: little shopping mall there like little streets and little store.

723
00:33:50,800 --> 00:33:55,200
Speaker 5: There's Rice Village, There's Island. Yes, there's Highland Village. There's

724
00:33:55,200 --> 00:33:55,800
Speaker 5: a few of them.

725
00:33:55,880 --> 00:34:00,760
Speaker 4: I don't know which village. My wallet was lighted. Thank

726
00:34:00,840 --> 00:34:04,880
Speaker 4: you so much with cross Mark Global Investments. Greatly appreciate that.

727
00:34:05,200 --> 00:34:05,840
Speaker 4: Stay with us.

728
00:34:06,160 --> 00:34:09,279
Speaker 3: More from Bloomberg Surveillance coming up after this.

729
00:34:16,480 --> 00:34:20,360
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

730
00:34:20,400 --> 00:34:23,400
Speaker 1: starting at seven am Eastern on Apple Cocklay and Android

731
00:34:23,440 --> 00:34:26,439
Speaker 1: Auto with the Bloomberg Business app. You can also listen

732
00:34:26,560 --> 00:34:29,799
Speaker 1: live on Amazon Alexa from our flagship New York station,

733
00:34:30,360 --> 00:34:33,880
Speaker 1: Just say Alexa play Bloomberg eleven thirty Terror.

734
00:34:33,719 --> 00:34:37,840
Speaker 2: Of the University of New Mexico with partners Group Anastasia Amorros.

735
00:34:37,880 --> 00:34:40,480
Speaker 2: So you nailed this three years ago. Do you have

736
00:34:40,560 --> 00:34:43,359
Speaker 2: the same conviction on equities now that you did three

737
00:34:43,440 --> 00:34:43,839
Speaker 2: years ago?

738
00:34:44,160 --> 00:34:44,400
Speaker 11: I do.

739
00:34:44,640 --> 00:34:46,640
Speaker 9: Look, it's a bit of a different feeling going to

740
00:34:46,680 --> 00:34:49,560
Speaker 9: twenty twenty six because of where valuations are. But yes,

741
00:34:49,719 --> 00:34:52,520
Speaker 9: we still do have the convictions that new highs, higher

742
00:34:52,600 --> 00:34:55,480
Speaker 9: highs are still ahead. And you know the reason for

743
00:34:55,640 --> 00:34:58,080
Speaker 9: that is this combination of policy support I would say

744
00:34:58,080 --> 00:34:58,719
Speaker 9: around the world.

745
00:34:58,960 --> 00:35:00,760
Speaker 5: But and then you asked it as about the rate cuts.

746
00:35:00,800 --> 00:35:01,919
Speaker 5: It is about the tax cuts.

747
00:35:01,960 --> 00:35:04,799
Speaker 9: It is about the mittrum elections that will likely shore

748
00:35:04,880 --> 00:35:05,960
Speaker 9: up some additional support.

749
00:35:06,080 --> 00:35:08,200
Speaker 5: So yes, that should support the market.

750
00:35:08,120 --> 00:35:08,840
Speaker 4: Is the easiest.

751
00:35:08,920 --> 00:35:12,040
Speaker 2: Is Atlanta GDP now was four percent Now it's three

752
00:35:12,239 --> 00:35:16,560
Speaker 2: point five to three percent real GDP growth estimate right now?

753
00:35:17,040 --> 00:35:19,640
Speaker 4: Does that just bringing right over to double digit earnings growth?

754
00:35:20,400 --> 00:35:22,640
Speaker 5: I mean, yes, it's been supportive of earnings growth.

755
00:35:22,719 --> 00:35:25,279
Speaker 9: I think AI has also been supportive of earnings growth

756
00:35:25,320 --> 00:35:28,240
Speaker 9: and the adoption well, because it does in some cases

757
00:35:28,360 --> 00:35:29,279
Speaker 9: drive productivity.

758
00:35:29,360 --> 00:35:30,839
Speaker 5: Some companies are citing.

759
00:35:30,600 --> 00:35:33,680
Speaker 9: That twenty or thirty percent is the increases in productivity

760
00:35:33,760 --> 00:35:37,160
Speaker 9: that they're seeing. I will tell you, across our portfolio companies,

761
00:35:37,200 --> 00:35:40,840
Speaker 9: embedding artificial intelligence is a big focus as well, and

762
00:35:41,000 --> 00:35:42,959
Speaker 9: so we're looking for something like one hundred and seventy

763
00:35:43,040 --> 00:35:46,279
Speaker 9: million in Ebada uplift across portcos because of that.

764
00:35:46,520 --> 00:35:48,480
Speaker 4: Jets get uplift because they use AI.

765
00:35:48,960 --> 00:35:52,479
Speaker 7: I don't think so think so that was that was ugly.

766
00:35:53,960 --> 00:35:56,560
Speaker 7: It seems like financial central banks around the world for

767
00:35:56,640 --> 00:36:00,279
Speaker 7: the most part, are in an accommodative mood here, and

768
00:36:00,360 --> 00:36:02,080
Speaker 7: how does that figure into your twenty six out work?

769
00:36:02,400 --> 00:36:05,120
Speaker 9: That's right, I mean the US certainly accommodative. Expecting a

770
00:36:05,200 --> 00:36:07,440
Speaker 9: ray cut this Wednesday, and it is priced into the

771
00:36:07,520 --> 00:36:09,800
Speaker 9: yield curve, which you know, something may push back and

772
00:36:09,840 --> 00:36:12,319
Speaker 9: say it's already baked in, but I would say it's

773
00:36:12,360 --> 00:36:14,719
Speaker 9: all about the impact on the economy and that is

774
00:36:14,840 --> 00:36:17,279
Speaker 9: to be felt in twenty twenty six. So when you

775
00:36:17,360 --> 00:36:21,160
Speaker 9: apply seventy five basis points to over eleven trillion dollars

776
00:36:21,239 --> 00:36:24,400
Speaker 9: of floating rate liabilities, that's a lot of resets lower

777
00:36:24,520 --> 00:36:26,560
Speaker 9: that are still to come. And then also on the

778
00:36:26,600 --> 00:36:29,360
Speaker 9: flip side, Paul, you've got fixed rates maturities that are

779
00:36:29,400 --> 00:36:32,120
Speaker 9: coming DOE and those will be refied a lower rate

780
00:36:32,200 --> 00:36:34,840
Speaker 9: as well. So that's a lot of cash back to

781
00:36:34,960 --> 00:36:37,759
Speaker 9: the corporations, in some cases cash back to the real

782
00:36:37,880 --> 00:36:41,879
Speaker 9: estate operators and the consumers. So that certainly is accommodative

783
00:36:41,920 --> 00:36:45,120
Speaker 9: for the US. I will say in Europe, consensus is

784
00:36:45,239 --> 00:36:48,640
Speaker 9: sort of assuming that THECB is done and we'll stay

785
00:36:48,640 --> 00:36:51,560
Speaker 9: at two percent, we think one or two more rate cuts.

786
00:36:51,440 --> 00:36:54,279
Speaker 5: Is possible in twenty twenty six. Over in Europe that

787
00:36:54,320 --> 00:36:55,400
Speaker 5: should also be supportive.

788
00:36:55,880 --> 00:36:59,319
Speaker 7: So your partners group now, and just did my Google search,

789
00:36:59,360 --> 00:37:03,160
Speaker 7: I went through your website Private Equity Global, Private Equity Provider.

790
00:37:03,400 --> 00:37:07,120
Speaker 7: What are the folks that partners group thinking about? Is

791
00:37:07,200 --> 00:37:08,719
Speaker 7: this twenty six gonna be a good year to put

792
00:37:08,760 --> 00:37:09,600
Speaker 7: capital to work?

793
00:37:10,120 --> 00:37:12,640
Speaker 9: Yes, we absolutely think twenty twenty six is going to

794
00:37:12,680 --> 00:37:15,160
Speaker 9: be a good year. Twenty twenty five actually turned out

795
00:37:15,200 --> 00:37:17,840
Speaker 9: to be a good year, so I will say industry

796
00:37:17,920 --> 00:37:22,480
Speaker 9: wide transaction activity is looking to be up thirty five percent.

797
00:37:22,640 --> 00:37:25,839
Speaker 9: You're a year which is quite significant in Europe. Maybe

798
00:37:25,840 --> 00:37:27,759
Speaker 9: you wouldn't guess it, but we're actually looking for the

799
00:37:27,880 --> 00:37:30,880
Speaker 9: best year since twenty twenty one, even slightly surpassing that.

800
00:37:31,280 --> 00:37:33,360
Speaker 9: So activity is back, and Paul I would say the

801
00:37:33,440 --> 00:37:35,920
Speaker 9: reason for that is the buyers and sellers who kind

802
00:37:35,920 --> 00:37:38,640
Speaker 9: of been far apart are coming a lot closer together.

803
00:37:39,120 --> 00:37:40,960
Speaker 9: I think part of it has to do with those

804
00:37:41,040 --> 00:37:45,839
Speaker 9: rates falling because financing conditions are more accommodative. As Amanda said,

805
00:37:46,120 --> 00:37:49,520
Speaker 9: you know, capital markets are wide open, and that means

806
00:37:49,760 --> 00:37:53,239
Speaker 9: you can finance the transaction, you can get better deal economics,

807
00:37:53,480 --> 00:37:56,240
Speaker 9: and you know, all things equal, that kind of supports

808
00:37:56,280 --> 00:37:58,560
Speaker 9: the interest in making that transaction happen.

809
00:37:58,640 --> 00:38:01,120
Speaker 7: All right, So your firm is Swiss based. The name

810
00:38:01,200 --> 00:38:02,520
Speaker 7: of the city is zug.

811
00:38:02,719 --> 00:38:06,680
Speaker 5: Zook, Switzerland. Yes, I've never been to g It is

812
00:38:06,760 --> 00:38:08,080
Speaker 5: a city outside of Zurich.

813
00:38:08,120 --> 00:38:10,160
Speaker 9: It's about thirty forty minute drive from there. It's a

814
00:38:10,239 --> 00:38:14,920
Speaker 9: wonderful place. You should visit, but that is our Swiss headquarters.

815
00:38:14,960 --> 00:38:17,440
Speaker 9: Our America's headquarters are in Denver, and of course a

816
00:38:17,600 --> 00:38:18,759
Speaker 9: large presence here in New York.

817
00:38:19,160 --> 00:38:20,480
Speaker 4: You have a spectacle.

818
00:38:20,760 --> 00:38:23,680
Speaker 2: The first we protect the copyright of our guests get

819
00:38:23,760 --> 00:38:27,839
Speaker 2: from partners Group. Anastasia's Miracle newsletter because it's got her

820
00:38:27,920 --> 00:38:33,439
Speaker 2: report is all sorts of sophistication. Your AI chart is complex, Yeah,

821
00:38:33,680 --> 00:38:37,720
Speaker 2: and it's it's a remarkable growth pattern to twenty seven.

822
00:38:38,239 --> 00:38:44,440
Speaker 2: What's your conviction, your certitude that AI will develop commercial opportunity?

823
00:38:45,280 --> 00:38:46,640
Speaker 5: It's high, Tom, it's high.

824
00:38:47,040 --> 00:38:49,239
Speaker 9: So first of all, a lot of people talk about

825
00:38:49,280 --> 00:38:52,600
Speaker 9: AI bubbles, but let's describe what is What do we

826
00:38:52,640 --> 00:38:55,719
Speaker 9: even mean by AI bubble? Is shortcut to productivity?

827
00:38:55,880 --> 00:38:56,760
Speaker 8: Is that in a bubble?

828
00:38:57,080 --> 00:38:59,320
Speaker 5: Do we want to use less chat GBT? Do we

829
00:38:59,400 --> 00:39:02,680
Speaker 5: want to use less perplexity, anthropic and Gemini? And do

830
00:39:02,800 --> 00:39:03,719
Speaker 5: we want to roll back?

831
00:39:03,880 --> 00:39:06,719
Speaker 9: No, it's quite the opposite. I think the genie is

832
00:39:06,719 --> 00:39:09,840
Speaker 9: out of the bottle. The productivity is there and everybody

833
00:39:09,920 --> 00:39:10,600
Speaker 9: wants to embed it.

834
00:39:10,920 --> 00:39:13,879
Speaker 2: I mean I use perplexity this weekend, Paul, I type

835
00:39:14,600 --> 00:39:16,799
Speaker 2: I'm all over it. I type it if I cut

836
00:39:16,960 --> 00:39:19,880
Speaker 2: down a Christmas tree in Central Park.

837
00:39:20,160 --> 00:39:22,120
Speaker 4: What time is the best time in day to do it? Right?

838
00:39:22,360 --> 00:39:24,120
Speaker 4: You know, that's kind of question.

839
00:39:24,480 --> 00:39:25,080
Speaker 5: What's the answer.

840
00:39:25,480 --> 00:39:28,640
Speaker 4: The answer is two am, and you'll enjoy it at

841
00:39:28,719 --> 00:39:33,120
Speaker 4: precinct fifty seven. Don't do that focused on that was

842
00:39:33,160 --> 00:39:33,560
Speaker 4: a joke.

843
00:39:34,360 --> 00:39:37,480
Speaker 2: But Anastasia, how does Johnson and Johnson or any other

844
00:39:37,560 --> 00:39:42,440
Speaker 2: given company the identifiable path to twenty twenty seven? How

845
00:39:42,480 --> 00:39:46,000
Speaker 2: does AI generate better margin? Right?

846
00:39:46,120 --> 00:39:48,359
Speaker 5: So, first of all, it is about productivity.

847
00:39:48,560 --> 00:39:51,520
Speaker 9: It is about you know, driving efficiencies and as I

848
00:39:51,600 --> 00:39:55,200
Speaker 9: mentioned John across our portfolio companies, but one hundred and

849
00:39:55,239 --> 00:39:59,359
Speaker 9: seventy trillion, one hundred and seventy million dollars in ebit

850
00:39:59,400 --> 00:40:01,760
Speaker 9: of uplift translate to about two and a half billion

851
00:40:01,800 --> 00:40:03,040
Speaker 9: dollars in enterprise value?

852
00:40:03,280 --> 00:40:03,960
Speaker 8: How do you do that?

853
00:40:04,120 --> 00:40:06,800
Speaker 9: I mean, take for example, an industrial tech operation or

854
00:40:06,840 --> 00:40:10,960
Speaker 9: a complex supply chain management or like an enterprise resource system.

855
00:40:11,239 --> 00:40:14,400
Speaker 9: Think about processes that require a lot of data inputs

856
00:40:14,440 --> 00:40:18,080
Speaker 9: that maybe previously have been manual not connected. But with

857
00:40:18,400 --> 00:40:21,280
Speaker 9: embedding of AI tools, you can connect all those different

858
00:40:21,400 --> 00:40:23,880
Speaker 9: disparate sources. So that's I think how a lot of

859
00:40:23,960 --> 00:40:28,759
Speaker 9: companies are driving those initial that initial value creation with AI.

860
00:40:29,400 --> 00:40:32,239
Speaker 9: Longer term it is also about the revenue uplift, and

861
00:40:32,600 --> 00:40:35,480
Speaker 9: we're seeing some preliminary I would say signs of that.

862
00:40:35,800 --> 00:40:37,359
Speaker 9: You know, one of the surveys that I've seen from

863
00:40:37,400 --> 00:40:40,799
Speaker 9: mckensey is that most companies are realizing less than five

864
00:40:40,880 --> 00:40:42,480
Speaker 9: percent in terms of revenue uplift.

865
00:40:42,760 --> 00:40:45,400
Speaker 5: Some have more than ten, but very few. But I

866
00:40:45,480 --> 00:40:48,719
Speaker 5: think that's on the roadmap. Tom. That might be not

867
00:40:48,840 --> 00:40:51,120
Speaker 5: the first wave, not the second one, but the third one.

868
00:40:51,160 --> 00:40:52,520
Speaker 8: But for now, it's.

869
00:40:52,320 --> 00:40:55,440
Speaker 9: About cost cutting. It's about getting more out of the

870
00:40:55,480 --> 00:40:56,520
Speaker 9: same amount of resources.

871
00:40:57,040 --> 00:40:59,600
Speaker 2: Paul, she's under selling it. I mean, Zoo is looking

872
00:40:59,640 --> 00:41:03,440
Speaker 2: out of it's absolutely gorgeous. Those are nice.

873
00:41:03,320 --> 00:41:07,759
Speaker 9: Common but the stibulator there this week and Denver headquarters.

874
00:41:07,440 --> 00:41:10,480
Speaker 7: Might be even better. Right between Denver and Boulder. Are

875
00:41:10,480 --> 00:41:11,120
Speaker 7: you're familiar with that?

876
00:41:11,280 --> 00:41:13,759
Speaker 5: You should absolutely look awesome here.

877
00:41:13,920 --> 00:41:15,520
Speaker 7: Now do you get how come I don't know about you?

878
00:41:15,840 --> 00:41:19,880
Speaker 9: You should absolutely come out clients in our Denver headquarters

879
00:41:20,160 --> 00:41:20,640
Speaker 9: earlier this.

880
00:41:20,719 --> 00:41:25,440
Speaker 7: Year, wait this February talk to us about just real

881
00:41:25,520 --> 00:41:28,520
Speaker 7: quick thirty seconds. Earnings seem really strong out there. Are

882
00:41:28,560 --> 00:41:29,680
Speaker 7: they enough to support this market?

883
00:41:30,840 --> 00:41:31,040
Speaker 8: Yes?

884
00:41:31,280 --> 00:41:33,720
Speaker 9: I mean, as Tom mentioned as lot as the economy

885
00:41:33,760 --> 00:41:37,320
Speaker 9: is on solid footing and they're also levers that companies

886
00:41:37,360 --> 00:41:40,160
Speaker 9: are pulling to offset the tariffs. You know, unfortunately that

887
00:41:40,400 --> 00:41:43,719
Speaker 9: does resolve itself in weaker labor market. But as far

888
00:41:43,760 --> 00:41:46,640
Speaker 9: as corporate America goes, you know, we're expecting nine or

889
00:41:46,680 --> 00:41:48,960
Speaker 9: ten percent of our news growth next year, and all

890
00:41:49,000 --> 00:41:51,880
Speaker 9: things equal, that should translate to about seventy five hundred

891
00:41:52,000 --> 00:41:53,719
Speaker 9: or so on the S and P five hundred.

892
00:41:53,840 --> 00:41:57,520
Speaker 2: Do you do an equity briefing at the Park Hotel

893
00:41:57,680 --> 00:41:59,640
Speaker 2: in Zoo, we could fancy.

894
00:41:59,360 --> 00:42:01,200
Speaker 7: Paul instead of shop there.

895
00:42:01,239 --> 00:42:05,400
Speaker 4: They have a fond hut where you It's a place

896
00:42:05,560 --> 00:42:08,200
Speaker 4: to glow. I can be a fond hut.

897
00:42:08,960 --> 00:42:11,320
Speaker 5: I do not yet been. I've been to the Mark Hotel.

898
00:42:11,320 --> 00:42:12,879
Speaker 5: I've not you been to the fondu Hut.

899
00:42:12,920 --> 00:42:14,920
Speaker 7: I may check it out this she's going to Zook tonight.

900
00:42:15,120 --> 00:42:18,000
Speaker 4: It's just it says a road trip to me at

901
00:42:18,040 --> 00:42:21,680
Speaker 4: a station on this group of Zoog Switzerland.

902
00:42:21,920 --> 00:42:27,040
Speaker 2: Thank you so much for inviting us to the fond Hut, Zoog, Switzerland.

903
00:42:27,560 --> 00:42:32,360
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904
00:42:32,520 --> 00:42:36,279
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905
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906
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907
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908
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