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Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane, along

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Speaker 1: with Jonathan Ferroll and Lisa Brownowitz Jaily. We bring you

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Speaker 1: insight from the best and economics, finance, investment, and international relations.

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Speaker 1: Find Bloomberg Surveillance on Apple Podcast, Suncloud, Bloomberg dot Com,

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Speaker 1: and of course on the Bloomberg Terminal. We need to

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Speaker 1: look at that six dollar gallon of gas in Mammoth Mountain, California,

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Speaker 1: and yacht's cheaper other places, but it is front and

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Speaker 1: center for President Biden joining us a gentleman hugely qualified

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Speaker 1: on this strange word energy security. Amos Hockstein is Senior

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Speaker 1: Adviser of Energy Security at the Department of State and

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Speaker 1: joins us today. The thing here, Amos, every time around

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Speaker 1: is whip inflation now. And every president has a different path,

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Speaker 1: like Jerry Ford to whip inflation now. And you're reading

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Speaker 1: a history is the same as mine. This is a

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Speaker 1: tough task. What is the first order of business for

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Speaker 1: Joe Biden? Well, I think, first of all, good morning

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Speaker 1: and thank you for having me on the show. As

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Speaker 1: you said before, energy is energy security is a critical issue,

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Speaker 1: and I think the President took strong steps yesterday UH

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Speaker 1: to address the fallout in the energy markets as a

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Speaker 1: result a direct result of the Ukraine War and the invasion,

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Speaker 1: the unjust invasion and brutal war that that Putin is

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Speaker 1: waging in Ukraine, and that has consequences, as the President

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Speaker 1: said yesterday here at home, with rising costs of energy,

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Speaker 1: rising costs of oil, which of course translates, as you said,

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Speaker 1: into rising costs of gasoline for Americans. So President Biden

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Speaker 1: took a strong step yesterday announcing the largest UH SPR

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Speaker 1: released these strategic petroleum reserves a million barrels a day

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Speaker 1: for the next six months. H and that we've already

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Speaker 1: seen prices come down as a result of that announcement.

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Speaker 1: That's going to have a major impact in the oil markets,

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Speaker 1: and the energy markets are at large. Okay, but Amos,

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Speaker 1: what's important here, and this is pizza's security. John. This

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Speaker 1: filters down into every product, including a slice of pizza

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Speaker 1: at Famiglia in New York. It is up, up, up.

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Speaker 1: You're very delicate about the slice of pizza in New

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Speaker 1: York Times. I think it's as important as a girl

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Speaker 1: on the gas. I agree, it's important. There's another measure, Amos,

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Speaker 1: that you've announced yesterday, you called on Congress to do

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Speaker 1: something to make companies pay fees on wows from their

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Speaker 1: leases that they haven't used in years, and on acres

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Speaker 1: of public lands that they are hoarding without producing. As

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Speaker 1: from the statement from the White House release yesterday, the

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Speaker 1: Administration keeps talking about these nine thousand leases, Amos. I

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Speaker 1: don't think if you wrote this, you would have written that,

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Speaker 1: because if I asked you the following question, I want

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Speaker 1: a direct answer to a direct question of those nine

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Speaker 1: thousand leases, how many of those sit on productive land?

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Speaker 1: So I will answer you a direct answer, but let

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Speaker 1: me just say on a slice of pizza price, I agree,

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Speaker 1: the prices are going up everywhere. Part of that is.

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Speaker 1: Part of that is as a result of these skyrockety

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Speaker 1: energy prices where we're not a farm to table economy,

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Speaker 1: we're a farm to truck to table. So everything that

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Speaker 1: we consume has to go on as a result, has

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Speaker 1: resulted in a gallon of gasoline or a gallon diesel

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Speaker 1: trucks coming criss crossing the country for for delivering whether

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Speaker 1: it's ingredients for pizza or if it's for other commodities.

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Speaker 1: So there's a direct result, and that's why it's not

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Speaker 1: just uh, the gallon gasoline is not a political issue.

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Speaker 1: This is a real economic issue that we need to

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Speaker 1: we need to address and that is a result of

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Speaker 1: a foreign war that we have to be cognizant of.

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Speaker 1: As far as the leases look, we these are these

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Speaker 1: are in public lands. And your point is right. If

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Speaker 1: some of these leases are on uh, nonproductive acreage, then

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Speaker 1: the companies that are holding these leases for several years

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Speaker 1: sometimes UH and are not doing any seismic, not doing

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Speaker 1: the kind of work that needs to be done on

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Speaker 1: those on that acreage because there they think it's non productive.

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Speaker 1: Then you have two choices. Either you can return the

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Speaker 1: lease or give it up, or you can simply pay

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Speaker 1: the higher fees because you want to hold onto that

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Speaker 1: lease for a little longer um so that you can

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Speaker 1: develop it later. Uh. And I think that so that

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Speaker 1: is I would have written that any less, you know

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Speaker 1: why they might want to sit on it and develop

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Speaker 1: it later. It could be on third rate land that

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Speaker 1: requires a higher crude price. You know how this works.

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Speaker 1: The way this is being framed by the administration is

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Speaker 1: that these land leases are being hoarded that were sitting

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Speaker 1: on productive land and it's not being produced because these

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Speaker 1: companies agreedy. I mean, I'll read the line out from

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Speaker 1: the President his words, companies have an obligation that goes

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Speaker 1: beyond just the shareholders, to their customers, their communities in

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Speaker 1: their country. No American company should take advantage of a

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Speaker 1: pandemic or putin to enrich themselves at the expense of

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Speaker 1: American families. What evidence is that that they're holding those releases? Why,

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Speaker 1: I'll finished, then you can go, and I'll give you

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Speaker 1: all the time you need. What evidence is that that

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Speaker 1: they're holding those leases because they're being greedy to profit

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Speaker 1: from what's happening in Ukraine. So so let's disagregate there.

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Speaker 1: There are a number of issues here, and the President

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Speaker 1: actually recognized the companies, the oil companies that are responding

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Speaker 1: to this price environment, that are responding to this world

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Speaker 1: supply shortage that we're in and have announced extraordinary increases

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Speaker 1: in capex uh and in reinvestment in the United States

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Speaker 1: in bringing on additional production. And he's recognized him and

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Speaker 1: said that was a that is progress and he and

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Speaker 1: he praised them for doing that. But there are other companies,

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Speaker 1: and you know that, Jonathan, that are saying, look, I

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Speaker 1: have the ability to increase production with prices at prices

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Speaker 1: were at a hundred and twenty and a hundred and

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Speaker 1: thirty just just a week ago, and said I'm not

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Speaker 1: gonna do it. And he called out some of those

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Speaker 1: who have said, even at two it or three barrel,

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Speaker 1: I'm not going to increase production because a variety of reasons,

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Speaker 1: and some of them are saying, my, my, the funds

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Speaker 1: that back me or that owned my that my my

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Speaker 1: shareholders or my uh my holders of my debt are saying,

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Speaker 1: don't do that. Give us increased dividends during this time.

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Speaker 1: There is no well that is not profitable at a

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Speaker 1: d and twenty a hundred and thirty. And if you're

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Speaker 1: making a decision at prolonged period of time of above

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Speaker 1: eighty five dollars, which we've now been in for for

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Speaker 1: a few months, that you can't make more investment to

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Speaker 1: bring on production than I think the President is right

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Speaker 1: to call them out, especially when other companies are saying, no,

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Speaker 1: this is the kind of exactly the kind of environment

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Speaker 1: that we're that we are going to increase production. And look,

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Speaker 1: we did two things. One the President announced that we're

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Speaker 1: going to release a million barrels a day in order

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Speaker 1: to increase the certainty of liquidity in the in the

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Speaker 1: energy markets and to make sure there's enough oil on

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Speaker 1: the market to support the U S economy as all

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Speaker 1: as the global coming number two. He has said that

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Speaker 1: we're going to replenish the reserve at a time when

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Speaker 1: we finished dispersing and releasing the oil and when prices

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Speaker 1: come down, So we're gonna sell the oil now at

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Speaker 1: high prices buy it back later. That gives incentive to

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Speaker 1: the oil companies to say, look, I know that even

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Speaker 1: though the US is going to release these reserves, I'm

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Speaker 1: going to have a buyer in the US government later on.

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Speaker 1: So it continues that incentive to increase production. And I

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Speaker 1: think that this is what we needed. We needed to

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Speaker 1: put something into the system where we can bridge The

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Speaker 1: oil companies have said, you look at Exxon and Chevron,

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Speaker 1: Conoco Oxy have said they're going to increase production. We're

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Speaker 1: going to increase nine thousand to a million barrels a

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Speaker 1: day this year, and that means but it's only gonna

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Speaker 1: come on in the middle of the third quarter to

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Speaker 1: the end of the year, So we have a gap

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Speaker 1: between now and that period of time. So what the

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Speaker 1: President did yesterday. This historic move is to say, I'm

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Speaker 1: gonna the US government is going to fill that gap

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Speaker 1: between now and there and put that same million barrels

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Speaker 1: a day of production that we were hoping to get

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Speaker 1: at the end that we're going to get at the

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Speaker 1: end of the year, and put that out now so

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Speaker 1: that we're not replacing the private sector, We're incentivizing it

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Speaker 1: and letting the American consumer benefit from lower prices between

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Speaker 1: now and there. They likes the Goldmen, Sex disagree. Jeff

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Speaker 1: Curry says this the U S policy, use of an

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Speaker 1: SPR release, a potential deal with Iran, extreme price volatility,

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Speaker 1: and the growing risk of a recession next year are

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Speaker 1: all exacerbating the uncertainty face by producers, reducing their incentive

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Speaker 1: to invest more. And What's the reason I bring this

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Speaker 1: stuff up is that I want to avoid this really

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Speaker 1: kind of simplistic conversation that something untoward is happening in

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Speaker 1: the oil patch when you know that what happens in

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Speaker 1: the oil industry is incredibly complex. Now you've said something

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Speaker 1: else over the last few years as well, over the

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Speaker 1: last twelve months. I'll bring up another thing. This was November.

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Speaker 1: President Biden urged the FTC Commission share to investigate oil

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Speaker 1: and gas companies retail prices, blaming industry leaders. As gas

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Speaker 1: prices continue to saw, it's become this talking point the

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Speaker 1: oil majors are hoarding these leases, even though you admit,

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Speaker 1: we don't know what's on that acreage. We don't know

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Speaker 1: what's on that acorage. Then there's this other talking point

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Speaker 1: that somehow these companies are price couching and in the

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Speaker 1: President's words, taking advantage of a pandemic or putin to

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Speaker 1: enrich themselves at the expense of American families. I'm just

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Speaker 1: asking what evidences they're off that you wanted to start

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Speaker 1: this probe. What have you found, What evidence is that

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Speaker 1: what companies are price couching right now? And if you

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Speaker 1: can identify them and the name them, what are you

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Speaker 1: doing about it? Well, first, I think, as we said yesterday,

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Speaker 1: I don't believe person all to Mr Curry's comments. Uh.

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Speaker 1: I've i in my colleagues and the US government. We've

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Speaker 1: been in close contact with the energy industry, and most

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Speaker 1: companies have actually said that they believe what we did

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Speaker 1: yesterday was exactly the right thing to do, uh, and

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Speaker 1: that they feel that it hasn't in sentive because it

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Speaker 1: is for six months before their production comes online, and

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Speaker 1: because we're going to spend the next couple of years

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Speaker 1: replenishing the reserve, that means that they are incentivized to

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Speaker 1: continue to spend the capex that they've announced to increase production.

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Speaker 1: So with respect to Golden Saxon, I take a lot

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Speaker 1: of issue with some of the other things that he

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Speaker 1: said in that I have no tag you too. But

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Speaker 1: another question you'd be asked as well, Amoss, is who

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Speaker 1: would make who would make a decision like this to

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Speaker 1: boost capex on front month? Brent Futures, who would do that?

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Speaker 1: W c I Futures front month? Who would do that?

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Speaker 1: You know what the rest of the curve looks like.

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Speaker 1: Why would they make a decision based on where the

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Speaker 1: front month is? Well, don't I'll tell you they are

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Speaker 1: making that decision. Uh. They have announced that they're going

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Speaker 1: to several of the majors who are the largest holders

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Speaker 1: and rulers in in the Permian UH and in other

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Speaker 1: shale basins, have said that they are increasing cap x.

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Speaker 1: I think they're going to increase production. Total US production

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Speaker 1: is going to grow by about ten percent by that

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Speaker 1: ninod to a million barrels. It's just that these things

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Speaker 1: don't happen overnight. You know that the decision to spend

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Speaker 1: money billions of dollars to bring up production doesn't mean

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Speaker 1: production comes on the next day. But I want to

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Speaker 1: address the point that you said, because I think the

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Speaker 1: President was very clear there are two We're not taking

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Speaker 1: a broad swipe of the whole industry, he said. I

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Speaker 1: wanted that he wanted to acknowledge the fact that part

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Speaker 1: of the industry has done exactly what it needs to

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Speaker 1: do and to see HI old prices incentivizing them to

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Speaker 1: bring about more production other companies, and we can't ignore

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Speaker 1: this done some companies have said, and the quote that

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Speaker 1: he used in his speech that even at two hundred

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Speaker 1: dollars of barrel, I will not increase production because of

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Speaker 1: uh so called fiscal discipline, that is not I'm not

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Speaker 1: making that up there to be fair to you, just

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Speaker 1: let me jump in to be fair to you. That

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Speaker 1: was a comment on this network. I heard it, I

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Speaker 1: talked about it, I repeated it. It's something I've said before.

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Speaker 1: Another thing I've highlighted as well was a Wall Street

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Speaker 1: Journal report that came out in the last few weeks,

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Speaker 1: the administration is trying to make a call to the

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Speaker 1: Saudiast and read trying to arrange a call with the

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Speaker 1: Crown Prince Mohammad have been Salman and they won't take

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Speaker 1: the call. Now, I spoke to a member of OPEC,

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Speaker 1: and you can respond to that in a moment. I

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Speaker 1: spoke to a member of OPEC this week, and I

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Speaker 1: thought it was utterly embarrassing for them that they had

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Speaker 1: a meeting earlier this month that lasted thirteen minutes, and

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Speaker 1: one just yesterday there was one minute shorter. Now, I

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Speaker 1: wonder if it's more embarrassing for us that they're laughing

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Speaker 1: in our faces and doing this. Now you speak to

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Speaker 1: the Saudiast, talk to me about it. A. Is that false?

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Speaker 1: Did the administration trying to arrange a call with Crown

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Speaker 1: Prince Mohammad been some man and the President of the

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Speaker 1: United States? And B why are their meetings last thing

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Speaker 1: thirteen minutes if we're in a massive energy crisis. So one,

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Speaker 1: there was a call that was going to be arranged

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Speaker 1: between the President and King's onmone and that called did

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Speaker 1: take place. Nobody that those reports I'm seeing constantly reports

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Speaker 1: of Saudi snubbing the US or I think there's an

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Speaker 1: interest in in certain quarters UH to to bring about

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Speaker 1: this kind of narrative that is completely false. I was inside.

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Speaker 1: I've been to Saudi Arabia on a number of occasions

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Speaker 1: over the last several weeks, on a couple of months,

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Speaker 1: on a couple of occasions, I was told what the

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Speaker 1: Saudis told me on the front pages of the news

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Speaker 1: of a US newspaper about three hours before the meeting started, UH,

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Speaker 1: and I showed this out. He's the headline, so that

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Speaker 1: we can jointly comment about the the hyperbole of the

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Speaker 1: press on this. So I would really relax. I don't

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Speaker 1: think there's any relationship between the United States and Saudi

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Speaker 1: is strategic. We have a lot of issues that we

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Speaker 1: need to work on together. UH. There are complexities in

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Speaker 1: that relationship that we are working on. We have a

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Speaker 1: lot of issues that UH that are of common interest

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Speaker 1: fighting terrorism UH that Saudi has had to suffer through

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Speaker 1: over the last several weeks, specifically from the houthies. We

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Speaker 1: are a lot of strategic interests elsewhere in the region

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Speaker 1: and as well on energy, and I'll tell you that

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Speaker 1: we're having very good discussions there the press and reality

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Speaker 1: on this one are are really far apart. On OPEC. Look,

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Speaker 1: I was asked before the OPEC meeting if we had

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Speaker 1: a message to OPEC, and my answer was, I have

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Speaker 1: no message for ROPE. But these are folks that know

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Speaker 1: the industry, they know the market, they know the supply

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Speaker 1: and demand. I must have a h difference of opinion. Uh,

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Speaker 1: we believe that, not just believe, but I can see

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Speaker 1: the physical evidence that the market is short about two

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Speaker 1: million barrels a day if not more from Russian supplies

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Speaker 1: into the global market. That is that is clear to me.

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Speaker 1: We can see that. Obviously, some perhaps an OPEC, don't

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Speaker 1: see the shortage of supply, but I can understand that

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Speaker 1: it's a complex issue for them with the OPEC versus

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Speaker 1: OPEC plus I think that that's uh, they're gonna have

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Speaker 1: to take some time and perhaps if you're not going

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Speaker 1: to discuss the issues very seriously, UM, perhaps eleven or

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Speaker 1: twelve minutes is all you need. But at the end

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Speaker 1: of the day, they've they've done what they needed to do,

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Speaker 1: and UH they've increased production by announced that they're going

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Speaker 1: to continue the increases of production. We don't think that's right.

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Speaker 1: The President is not asking other people to do the

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Speaker 1: work that we should do. He took action yesterday by

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Speaker 1: himself on behalf of the US government for the American

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Speaker 1: public of releasing a million barrels a day. I believe,

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Speaker 1: by the way, Jonathan, that we're going to have additional

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Speaker 1: capacity coming online from our allies. Uh, and we the

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Speaker 1: President coordinated this release, as he has all other measures

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Speaker 1: against President putin with our allies when he was in

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Speaker 1: meetings at the G seven and the NATO summit last week.

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Speaker 1: He's discussed it with leaders even earlier this week. We've

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Speaker 1: I've had conversation with my counterparts and uh, there's a

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Speaker 1: meeting that is going on right now of the i

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Speaker 1: e A, the International Energy Agency to look at additional

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Speaker 1: releases from the international markets. So we won't just have

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Speaker 1: coming on the market United States would rather have well

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Speaker 1: coming online to the market in Asia and as well

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Speaker 1: as Europe over the next several months. Unless you're a professional,

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Speaker 1: you've given us tons of time and that's valuable to me.

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Speaker 1: You know that. Thank you very much. I appreciate it.

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Speaker 1: Amos hostein there of the US administration on the situation

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Speaker 1: right now here are the Secretary of Labor, Our John Pharaoh,

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Speaker 1: you want to us now on Bloomberg TV and on

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Speaker 1: Bloomberg Radio, US Labor Secretary Moddy Welsh Secretary Welsh, what

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Speaker 1: a jobs report? Just fantastic. Most people have come on

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Speaker 1: the program this morning with Tom and myself and Lisa

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Speaker 1: on Bloomberg Surveymance and on the open of all said,

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Speaker 1: it looks great. What are you most infused by looking

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Speaker 1: at this? Well, I think one of the things that

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Speaker 1: that that I like is we we saw at increase

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Speaker 1: in labor participation rate. So one thing we spoke about

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Speaker 1: this morning. You know, a good you know, unemployment number low,

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Speaker 1: a good strong report, good last three months report, actually

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Speaker 1: a good US eleven months report, over four hundred fifty jobs.

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Speaker 1: And we think about moving forward into two you know,

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Speaker 1: one point six million people still need to return back

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Speaker 1: to the workforce. How do we get them those folks

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Speaker 1: back to work? How do we make sure that that

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Speaker 1: labor participation number goes up? Certainly there's still jobs open

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Speaker 1: the United States. That's one of the things I'm not

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Speaker 1: taking away from the report. I'm very excited about the report,

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Speaker 1: but but I think we're thinking about here, how do

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Speaker 1: we move forward. The second thing is we're also looking at,

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Speaker 1: you know, what what can be done by Congress. We

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Speaker 1: have the Bipodisan Innovation Act other known as the CHIPS Bill,

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Speaker 1: that allows us opportunity for supply chain issues moving forward.

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Speaker 1: We have some COVID relief money still being talked about

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Speaker 1: it at up a Capitol Hill. They need to pass

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Speaker 1: that because we need to. We're watching I'm seeing what's

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Speaker 1: going on in China and parts of Europe with another

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Speaker 1: variant going up. We want to make sure that we're

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Speaker 1: prepared for that here in the United States. Uh And

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Speaker 1: then obviously inflation we're working to the President is is

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Speaker 1: very lazy focus on bringing the cost down. Lots of

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Speaker 1: challenges there. You were just talking about global challenges there

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Speaker 1: that we have in other markets. You know, we have

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Speaker 1: to you know, continue to work very closely on that.

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Speaker 1: You know, the Fed Reserve they're gonna they're gonna take

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Speaker 1: their action. I can't really comment on that, but we

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Speaker 1: have to we have to make sure that in the

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Speaker 1: short term we do I mean we can and reduce

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Speaker 1: those prices, but also long term that it doesn't happen again.

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Speaker 1: A lot of what we're seeing in inflation is due

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Speaker 1: to the pandemic obviously what we're seeing with with Putin

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Speaker 1: and what he's doing with Ukraine. But but we also

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Speaker 1: have to think long term, how do we prepare the

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Speaker 1: country that we don't go through us again it. Secondly, Welsh,

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Speaker 1: I've only got a few more minutes with you because

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Speaker 1: I know you've got to do a range of interviews.

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Speaker 1: You're a busy man this morning, so I went through

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Speaker 1: a couple of other issues. There is a labor contract

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Speaker 1: covering about twenty two thousand West Coast dock workers at

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Speaker 1: sites including l A and Long Beach Ports that expires

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Speaker 1: until life. F onest I know you're aware of that.

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Speaker 1: I want you to help me understand what's the difference

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Speaker 1: between those unions, those individuals behind those groups to represent them,

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Speaker 1: using their leverage to secure better terms and exploiting the

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Speaker 1: country's dependence on those ports. What's the difference. I don't

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Speaker 1: think they'll do that. I mean I was out in

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Speaker 1: Seattle and Tacoma in Portland last week specifically to talk

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Speaker 1: to the come penny in companies about about the negotiation,

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Speaker 1: a little bit about how they feel about it in

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Speaker 1: the unions and express the both sides the importance of

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Speaker 1: what we've gone through as a nation over the last

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Speaker 1: eighteen months with supply chain and challenges and still having

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Speaker 1: ships out in the ocean. They all understand the importance

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Speaker 1: of that, and I think that I don't. I don't

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Speaker 1: see either side exploiting the situation we're living in for

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Speaker 1: better wages. The contract will begin negotiation at some point

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Speaker 1: in the next month or so. I believe that's when

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Speaker 1: it'll start. They have to do some notification piece. But

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Speaker 1: I'm going to monitor the situation very closely. Obviously, UM

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Speaker 1: I want to make sure that that we we don't

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Speaker 1: stop our ports. I mean that the last thing we

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Speaker 1: need in this country right now or in this world,

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Speaker 1: quite honestly, is shutting down other supply chain and creating

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Speaker 1: other supply chain issues. Are you going to step in

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Speaker 1: if I need to? I will, I saw, I said

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Speaker 1: the both sides. I mean, I don't think I have

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Speaker 1: to step in at this point. If I did, I'd

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Speaker 1: be having a very different conversation with you. But I think,

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Speaker 1: you know, I feel good where the conversation is with

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Speaker 1: the with the sides right now. I think that they

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Speaker 1: all understand the magnitude of this particular moment. This is

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Speaker 1: on like any other moment they've ever had when it

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Speaker 1: comes to negotiations. Uh, still in coming out of a pandemic,

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Speaker 1: and you know, moving forward all these issues around this.

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Speaker 1: So I think they acknowledge very seriously the situation this

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Speaker 1: country is in, and quite honestly, I supply chain is in.

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Speaker 1: You've been to those ports. You travel a lot. I

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Speaker 1: believe it's sixty cities in thirty states during the first year.

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Speaker 1: You know where I'm going with this. You've also been

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Speaker 1: really criticized because you've spent a hundred and sixty two

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Speaker 1: days in Boston out of your first two eight four

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Speaker 1: days in office. Second be well, So you know this

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Speaker 1: comes up often when you and I talk, keeps coming up,

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Speaker 1: People keep talking to me about it. Yeah, I think

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Speaker 1: I think it's a ridiculous argument and ridiculous point that's

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Speaker 1: being made. In the very beginning of me being Secretary

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Speaker 1: of Labor, we at just a department Labor where I'm

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Speaker 1: standing in front of right now. Nobody was in the office.

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Speaker 1: We were shut down because of COVID nineteen and I

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Speaker 1: was doing my job. I travel around the country. Some

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Speaker 1: of those numbers, some of those numbers that are reported,

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Speaker 1: I go home every weekend to Boston. I'm going to

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Speaker 1: continue to go home to Boston every weekend because I

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Speaker 1: have a mother that's there, and I have a family

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Speaker 1: that's there, and I've made it very there from the

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Speaker 1: very beginning. So I think when when when that article

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Speaker 1: was written and that report to put those facts in,

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Speaker 1: she's incorporating the weekends into that. And if she took

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Speaker 1: those out and actually did an accurate account of what happened,

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Speaker 1: that would tell a very different start. Secondy, Walsh, I've

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Speaker 1: got a mother in London. I've got to be in

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Speaker 1: New York. That's what happens. Sometimes people are basically asking

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Speaker 1: why you haven't chosen to live in Washington, d C.

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Speaker 1: I do live in Washington, I live in Now You've

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Speaker 1: got a permanent residence there in d C? Now, just

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Speaker 1: yes or not? I'm living out of a hotel. Okay. Secondly, Wealsh,

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Speaker 1: We're gonna make you that thank you for being with

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Speaker 1: a set our friend on John's Day, Jeffrey Rosenberg joins

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Speaker 1: his portfolio manager Systemic Multi Strategy funded black Rock Jeff Frozenberg.

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Speaker 1: We went curb and version off of this now negative

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Speaker 1: one basis points let's go back to Karnie Mellon and

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Speaker 1: talk to me about the nuances and disaggregation of curve inversion.

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Speaker 1: There's zero, there's a little bit in verse. Did maybe

430
00:22:00,760 --> 00:22:07,840
Speaker 1: there's more inversion. What is that nuance within this boom economy. Well, Tom,

431
00:22:07,840 --> 00:22:11,720
Speaker 1: this this report is just reaffirming what the markets were

432
00:22:11,760 --> 00:22:14,919
Speaker 1: expecting and the trend that you were talking about in

433
00:22:15,000 --> 00:22:17,720
Speaker 1: terms of the bond market, of of yield curve inversion.

434
00:22:18,280 --> 00:22:21,680
Speaker 1: You know, no surprises in this report. As Jonathan just mentioned,

435
00:22:21,880 --> 00:22:25,320
Speaker 1: the headline report, the headline number MS is really minor.

436
00:22:25,880 --> 00:22:28,560
Speaker 1: It's the strength in the labor markets that's that's being

437
00:22:29,000 --> 00:22:31,920
Speaker 1: seen here again and that's the challenge for the FED.

438
00:22:32,400 --> 00:22:34,520
Speaker 1: For the markets as we're seeing a little bit this morning,

439
00:22:34,520 --> 00:22:36,840
Speaker 1: a little bit more curve flattening. It is really much

440
00:22:36,880 --> 00:22:40,440
Speaker 1: more about UH. As Mike McKee was kind of highlighting,

441
00:22:40,520 --> 00:22:42,720
Speaker 1: you know, this is good news, but it's a little

442
00:22:42,760 --> 00:22:44,439
Speaker 1: bit too much of good news, and this is an

443
00:22:44,480 --> 00:22:47,520
Speaker 1: economy and the labor markets that's overheating. The FED has

444
00:22:47,560 --> 00:22:51,320
Speaker 1: to accelerate. Lots of expectations talked about at the top

445
00:22:51,359 --> 00:22:54,359
Speaker 1: of the show, some historic bond market and really financial

446
00:22:54,400 --> 00:22:57,720
Speaker 1: market UH losses in the first quarter. This is the

447
00:22:57,800 --> 00:23:03,000
Speaker 1: markets readjusting to a much faster pace of FED normalization,

448
00:23:03,040 --> 00:23:06,920
Speaker 1: and today's report only will reaffirm that view. And that's

449
00:23:06,920 --> 00:23:09,240
Speaker 1: what we're seeing with that little bit of flattening continuing

450
00:23:09,280 --> 00:23:11,520
Speaker 1: in the market that you're talking about, Jeff. For you,

451
00:23:11,680 --> 00:23:13,399
Speaker 1: is this good or bad news when it comes to

452
00:23:13,600 --> 00:23:19,800
Speaker 1: investing to investing, you know, I think it's just a

453
00:23:19,800 --> 00:23:23,359
Speaker 1: reaffirmation of our expectations, not good news or bad news,

454
00:23:23,400 --> 00:23:26,000
Speaker 1: but just this is what we expected and what we

455
00:23:26,080 --> 00:23:29,919
Speaker 1: expect is this is a very difficult environment for investing

456
00:23:30,040 --> 00:23:34,359
Speaker 1: because of the challenges of the dual aspects were about

457
00:23:34,400 --> 00:23:36,359
Speaker 1: to go into we're talking about from the May f

458
00:23:36,480 --> 00:23:39,399
Speaker 1: O m C, you know, the shrinking of the balance sheet,

459
00:23:39,560 --> 00:23:42,480
Speaker 1: and you know markets are pricing in a move towards

460
00:23:42,480 --> 00:23:45,520
Speaker 1: a fifty basis point hiking cycle. This is a very

461
00:23:45,720 --> 00:23:49,359
Speaker 1: very dramatic turn about. That's why you had such a

462
00:23:49,400 --> 00:23:52,440
Speaker 1: negative price performance across fixed income in the first quarter,

463
00:23:52,480 --> 00:23:54,840
Speaker 1: because we're waking up to the idea is a FED

464
00:23:54,960 --> 00:23:56,960
Speaker 1: that wants to get out in front of the curve,

465
00:23:56,960 --> 00:24:00,920
Speaker 1: and that means a very accelerated pace of heightening. That's

466
00:24:00,960 --> 00:24:03,879
Speaker 1: a challenging environment for investing. As we just saw in

467
00:24:03,920 --> 00:24:06,040
Speaker 1: the in the first quarter. When we get to the

468
00:24:06,040 --> 00:24:09,119
Speaker 1: back side of it and to some higher rates of

469
00:24:09,240 --> 00:24:12,600
Speaker 1: real interest rates eventually and higher levels of yield, this

470
00:24:12,640 --> 00:24:15,880
Speaker 1: will be an attractive environment. But the transition it's very

471
00:24:15,920 --> 00:24:18,480
Speaker 1: difficult environment for investors, as we saw in the first quarter.

472
00:24:18,560 --> 00:24:20,080
Speaker 1: Do you think that it's basically a lock that we'll

473
00:24:20,119 --> 00:24:23,080
Speaker 1: get to we'll have one percentage point increase in the

474
00:24:23,119 --> 00:24:27,480
Speaker 1: FED funds rate by June. You know, I wouldn't say

475
00:24:27,480 --> 00:24:30,720
Speaker 1: it's it's a lock. It's definitely uh, well, it's about

476
00:24:30,800 --> 00:24:33,800
Speaker 1: ninety percent priced in terms of the market. You know,

477
00:24:33,840 --> 00:24:35,880
Speaker 1: you can't say it's a lot because obviously some things

478
00:24:35,960 --> 00:24:39,960
Speaker 1: can happen in the geopolitical side that we're all focused on.

479
00:24:40,240 --> 00:24:43,360
Speaker 1: If that were to take a more dramatic turn that

480
00:24:43,440 --> 00:24:47,119
Speaker 1: you saw in terms of risk off environment, confidence shock,

481
00:24:47,280 --> 00:24:51,160
Speaker 1: you know, the shocks can be important, and financial conditions tightening,

482
00:24:51,359 --> 00:24:54,840
Speaker 1: which to date has been accelerated but is still on

483
00:24:54,880 --> 00:24:58,720
Speaker 1: the longer view, very accommodative markets. If you had financial

484
00:24:58,720 --> 00:25:01,520
Speaker 1: markets kind of get really are ahead of where the

485
00:25:01,520 --> 00:25:03,880
Speaker 1: FED wanted to go, you could certainly slow that pace.

486
00:25:03,880 --> 00:25:06,360
Speaker 1: So I wouldn't say it's a lock. But given what

487
00:25:06,400 --> 00:25:09,040
Speaker 1: we know today and the fundamentals of the economy we

488
00:25:09,080 --> 00:25:11,359
Speaker 1: see out of this labor market report. I think the

489
00:25:11,440 --> 00:25:14,040
Speaker 1: odds are very high that we're gonna have two fifties

490
00:25:14,080 --> 00:25:16,720
Speaker 1: back to back in in the May and June reports.

491
00:25:17,119 --> 00:25:20,040
Speaker 1: Jeff Frozenberg I went lord rhythmic on you. I've got

492
00:25:20,040 --> 00:25:22,119
Speaker 1: to do that when you're on And the answer is

493
00:25:22,119 --> 00:25:26,520
Speaker 1: the bloomberg Us Total Return aggregate index is not a

494
00:25:26,560 --> 00:25:29,480
Speaker 1: bear market. But negative eight percent is negative eight percent?

495
00:25:30,000 --> 00:25:32,320
Speaker 1: Are we in a bear market? Or is that what

496
00:25:32,440 --> 00:25:36,720
Speaker 1: oasis in the bond market? Q two? You know, the

497
00:25:37,000 --> 00:25:42,280
Speaker 1: good news on the fixed income markets there, Mark, the

498
00:25:42,280 --> 00:25:47,920
Speaker 1: good news is that we very quickly reprice the expectations

499
00:25:48,119 --> 00:25:52,359
Speaker 1: and and and term premium and inflation expectations. So the

500
00:25:52,520 --> 00:25:55,800
Speaker 1: repricing is the painful part. That's the negative eight percent.

501
00:25:55,920 --> 00:26:00,479
Speaker 1: But fixed income, you recall, the key to returns is

502
00:26:00,760 --> 00:26:03,520
Speaker 1: the level of income. And so why you had such

503
00:26:03,640 --> 00:26:07,680
Speaker 1: negative returns was you were starting at very very low

504
00:26:07,800 --> 00:26:11,320
Speaker 1: levels of starting income. So as we fast forward and

505
00:26:11,359 --> 00:26:13,639
Speaker 1: you're at higher levels of income, it really gives you

506
00:26:13,680 --> 00:26:17,120
Speaker 1: a lot more cushion to subsequent increases and interest rates

507
00:26:17,119 --> 00:26:21,640
Speaker 1: in that pace of negative returns is much harder to repeat.

508
00:26:22,040 --> 00:26:24,160
Speaker 1: So then what do you do on a strategic standpoint,

509
00:26:24,200 --> 00:26:27,480
Speaker 1: I mean, if you're if you're systematic, did you shift

510
00:26:27,480 --> 00:26:30,960
Speaker 1: from full faith to a creditor move? What? What do

511
00:26:31,000 --> 00:26:32,520
Speaker 1: you go to loans? I mean, what do you do

512
00:26:32,680 --> 00:26:38,199
Speaker 1: here within a strategy of down six seven? Yeah, you

513
00:26:38,240 --> 00:26:41,800
Speaker 1: know a couple of things here. First, in terms of

514
00:26:41,880 --> 00:26:44,919
Speaker 1: kind of the directional part of our strategies. You know,

515
00:26:45,000 --> 00:26:49,800
Speaker 1: the front end of shorter maturities have certainly looked much

516
00:26:49,840 --> 00:26:53,080
Speaker 1: more attractive coming out of this environment. The repricing, that

517
00:26:53,200 --> 00:26:56,119
Speaker 1: curve flattening that you talked about, Well, that's really about

518
00:26:56,160 --> 00:26:59,480
Speaker 1: restoring the cushion to fixed income investing. And where do

519
00:26:59,520 --> 00:27:03,080
Speaker 1: you see that strongest across the fixed income landscape. It's

520
00:27:03,080 --> 00:27:05,840
Speaker 1: really in those shorter maturity So that's an aspect of

521
00:27:05,880 --> 00:27:09,560
Speaker 1: our investing that we think is an opportunity going forward

522
00:27:09,600 --> 00:27:13,240
Speaker 1: where there's more cushion from further increases in interest rates.

523
00:27:13,320 --> 00:27:16,600
Speaker 1: And then in our investing, you know, our tool kid

524
00:27:16,720 --> 00:27:19,879
Speaker 1: is both the kind of directional view that I just described,

525
00:27:19,960 --> 00:27:23,040
Speaker 1: but also looking at things that take out direction and

526
00:27:23,080 --> 00:27:26,080
Speaker 1: look in the cross section of investing and there what

527
00:27:26,160 --> 00:27:29,359
Speaker 1: you're seeing is is a lot more opportunities to invest

528
00:27:29,440 --> 00:27:32,720
Speaker 1: in dispersion. Both we invest in both the equity side

529
00:27:32,760 --> 00:27:35,399
Speaker 1: and the fixed income side, and they're you're really seeing

530
00:27:35,480 --> 00:27:39,520
Speaker 1: more alpha opportunities. So it's shifting your mix, your weight

531
00:27:39,560 --> 00:27:42,160
Speaker 1: in your portfolio of where you're getting your returns from

532
00:27:42,359 --> 00:27:45,200
Speaker 1: a little bit less out of directionality. Because directionalities you

533
00:27:45,320 --> 00:27:48,679
Speaker 1: highlighted the beginning of the shows. Is impossible to forecast

534
00:27:48,720 --> 00:27:51,840
Speaker 1: where we're going, but the dispersion in the cross section

535
00:27:52,240 --> 00:27:55,640
Speaker 1: is actually increased. It increases the opportunity to alpha investing.

536
00:27:55,800 --> 00:27:58,840
Speaker 1: Jeff blank Rop, Jeff great to get you to react

537
00:27:58,840 --> 00:28:01,760
Speaker 1: to what looks like a really stung pay roast report.

538
00:28:08,160 --> 00:28:10,600
Speaker 1: We digress at this moment, and we do so with

539
00:28:10,720 --> 00:28:12,520
Speaker 1: my book of the Summer or a couple of Summers

540
00:28:12,520 --> 00:28:15,800
Speaker 1: ago two thousand thirty four, a novel of the next world.

541
00:28:15,840 --> 00:28:18,840
Speaker 1: When Elliott Ackerman wrote this with James Travitas, they have

542
00:28:19,119 --> 00:28:23,359
Speaker 1: no idea the overlay of their book of the South

543
00:28:23,480 --> 00:28:27,520
Speaker 1: China Sea and how it would turn to Ukraine. The

544
00:28:27,560 --> 00:28:30,720
Speaker 1: former marine joins us this morning, Elliott Ackerman, you have

545
00:28:30,920 --> 00:28:35,400
Speaker 1: legit military duty. You're work in Afghanistan. H your your

546
00:28:35,440 --> 00:28:38,040
Speaker 1: work was c i A. At the end of the

547
00:28:38,240 --> 00:28:42,560
Speaker 1: tour you're The Atlantic article of you speaking to a

548
00:28:42,680 --> 00:28:46,920
Speaker 1: modern marine was stunning about the reality on the ground

549
00:28:47,160 --> 00:28:50,520
Speaker 1: in Kiev and in Ukraine. What was the distinction of

550
00:28:50,560 --> 00:28:57,520
Speaker 1: your conversation with the marine in your Atlantic essay. Well, yeah,

551
00:28:57,600 --> 00:28:59,360
Speaker 1: you know, as you might know, that there's been a

552
00:28:59,600 --> 00:29:04,080
Speaker 1: you know, large number of foreign fighters, Americans, Brits, uh,

553
00:29:04,280 --> 00:29:08,560
Speaker 1: individuals from Balkan states who have come to Ukraine to

554
00:29:08,680 --> 00:29:11,800
Speaker 1: fight UH. And so I had a conversation with a

555
00:29:11,800 --> 00:29:14,440
Speaker 1: former marine who served in some of the similar infantry

556
00:29:14,520 --> 00:29:16,200
Speaker 1: units I had served in, and he had been fighting

557
00:29:16,240 --> 00:29:20,120
Speaker 1: in the trenches around Kiev for the first UH about

558
00:29:20,160 --> 00:29:23,360
Speaker 1: month of the war. And you know, the most sailient

559
00:29:23,400 --> 00:29:26,360
Speaker 1: point he was making to me was that the anti

560
00:29:26,400 --> 00:29:29,320
Speaker 1: tank weapons that we've deployed to Ukraine, we're making a

561
00:29:29,480 --> 00:29:32,840
Speaker 1: huge difference in that fight and allowing two or three

562
00:29:32,920 --> 00:29:38,080
Speaker 1: well armed Ukrainians to stop entire Russian armored columns. Um. So,

563
00:29:38,160 --> 00:29:39,880
Speaker 1: you know, that was one of the most sailing points

564
00:29:39,880 --> 00:29:41,480
Speaker 1: he made, as well as really just the intensity of

565
00:29:41,520 --> 00:29:43,680
Speaker 1: the fighting that he had witnessed, which he said exceeded

566
00:29:43,680 --> 00:29:47,480
Speaker 1: anything that he had participated in in Afghanistan. Take us

567
00:29:47,520 --> 00:29:51,400
Speaker 1: beyond the media reports of brave journalists in Ukraine, those

568
00:29:51,480 --> 00:29:55,280
Speaker 1: covering it day by day. How did the Russians adapt

569
00:29:55,480 --> 00:30:01,080
Speaker 1: to a difficult march. Well, it's yet to be seeing

570
00:30:01,120 --> 00:30:04,760
Speaker 1: whether or not they're going to be able to adapt. Um.

571
00:30:04,800 --> 00:30:07,560
Speaker 1: You know, in the Russian way of warfare is different

572
00:30:07,600 --> 00:30:10,440
Speaker 1: than the American or Western way of warfare. And one

573
00:30:10,480 --> 00:30:14,680
Speaker 1: of the most critical ways that that difference manifests is,

574
00:30:14,840 --> 00:30:17,120
Speaker 1: you know, the Russians have a very difficult time adapt

575
00:30:17,120 --> 00:30:22,280
Speaker 1: because they have extremely centralized decision making structures. So you know,

576
00:30:22,400 --> 00:30:25,480
Speaker 1: all the decisions are made by a group of colonels

577
00:30:25,560 --> 00:30:28,880
Speaker 1: or generals, uh and those decisions are disseminated down as

578
00:30:28,880 --> 00:30:32,320
Speaker 1: subordinates who aren't supposed to ask questions or show individual initiative.

579
00:30:32,640 --> 00:30:35,640
Speaker 1: In Western militaries, we fight with something we called mission tactics,

580
00:30:35,640 --> 00:30:38,360
Speaker 1: which means even the lowest, you know, twenty one year

581
00:30:38,400 --> 00:30:41,920
Speaker 1: old corporal understands the mission in the intent behind the mission,

582
00:30:42,280 --> 00:30:44,360
Speaker 1: because the expectation is always that the plan is not

583
00:30:44,400 --> 00:30:47,200
Speaker 1: gonna work, that the enemy has to say, and that

584
00:30:47,200 --> 00:30:50,120
Speaker 1: that everyone's going to have to adapt. So our Western

585
00:30:50,120 --> 00:30:53,560
Speaker 1: militaries are very adaptable, and the Ukrainians since two thousand

586
00:30:53,680 --> 00:30:57,280
Speaker 1: fourteen have undergone a series of reforms to make them

587
00:30:57,320 --> 00:30:59,640
Speaker 1: more like a Western military. So we're really seeing the

588
00:30:59,680 --> 00:31:03,320
Speaker 1: con test between a Western military stylid fighting and a

589
00:31:03,400 --> 00:31:06,680
Speaker 1: classic Sylviet or Russian style of fighting in Ukraine, and

590
00:31:06,680 --> 00:31:10,360
Speaker 1: the result has been a lack of Russian adaptability. There's

591
00:31:10,360 --> 00:31:12,960
Speaker 1: been a lot of times where the West has perhaps

592
00:31:13,000 --> 00:31:17,240
Speaker 1: miscast other nations that follow a different set of rules

593
00:31:17,560 --> 00:31:19,640
Speaker 1: in a way that tries to reflect their own. Are

594
00:31:19,680 --> 00:31:23,040
Speaker 1: we overstating or understating the hit to morale that so

595
00:31:23,080 --> 00:31:27,360
Speaker 1: many people talk about among Russian troops. I think that

596
00:31:27,480 --> 00:31:31,479
Speaker 1: we are underestimating it, and I think we've continually underestimated

597
00:31:31,600 --> 00:31:33,520
Speaker 1: not only the hit to the morale for the Russians,

598
00:31:33,560 --> 00:31:42,040
Speaker 1: but we've been habitually overestimating Russian capability and underestimating Ukrainian capability,

599
00:31:42,240 --> 00:31:45,680
Speaker 1: as though we for some reason seemed unwilling to conceive

600
00:31:45,800 --> 00:31:48,640
Speaker 1: the idea that the Ukrainians could win this war. In fact,

601
00:31:48,720 --> 00:31:51,440
Speaker 1: are winning this war right now. You know, it's important

602
00:31:51,440 --> 00:31:53,880
Speaker 1: to note there's historical precedent for this. During the Second

603
00:31:53,920 --> 00:31:57,520
Speaker 1: World War, Russia, which defeated Germany in the Second World War,

604
00:31:57,800 --> 00:32:01,800
Speaker 1: invaded Finland, you know, a small all nation but very nationalistic,

605
00:32:01,880 --> 00:32:05,480
Speaker 1: and the Finns defeated the Soviets um, so there's precedent

606
00:32:05,520 --> 00:32:08,560
Speaker 1: for this. The Ukrainians are winning, I think I think,

607
00:32:08,600 --> 00:32:11,479
Speaker 1: having spent time there, that we should back a winner

608
00:32:11,560 --> 00:32:14,440
Speaker 1: usually that's a pretty good strategy and continue to support

609
00:32:14,440 --> 00:32:17,640
Speaker 1: the Ukrainians in this taking to Russia, Elliott Ackerman, we've

610
00:32:17,680 --> 00:32:21,120
Speaker 1: taken great pride in our interviews with the military in

611
00:32:21,200 --> 00:32:24,280
Speaker 1: this war. You may be aware there's another division of

612
00:32:24,320 --> 00:32:27,000
Speaker 1: the U. S military called the Army, and we met

613
00:32:27,040 --> 00:32:30,720
Speaker 1: with their General Kimmitt, of course with a substantial infantry

614
00:32:30,760 --> 00:32:34,400
Speaker 1: experience in Germany and in the Persian Gulf, and General

615
00:32:34,480 --> 00:32:38,760
Speaker 1: Kimmitt was heated that the Russians were unprepared for the

616
00:32:39,040 --> 00:32:42,040
Speaker 1: urban battles to come in the war. Is that what

617
00:32:42,160 --> 00:32:44,920
Speaker 1: we've observed this month? And what do those new urban

618
00:32:44,920 --> 00:32:50,160
Speaker 1: battles look like for the Russians? Now? What we're seeing

619
00:32:50,160 --> 00:32:53,120
Speaker 1: the Russians, I mean make you know, some gains in

620
00:32:53,160 --> 00:32:57,719
Speaker 1: a few select Ukrainian cities, but they've had to completely

621
00:32:57,800 --> 00:33:01,480
Speaker 1: destroy those cities to to win in places like Marie Opal.

622
00:33:01,520 --> 00:33:05,680
Speaker 1: But the much larger story is in places like Kiev,

623
00:33:05,880 --> 00:33:08,840
Speaker 1: you know, cities that are real centers of gravity politically,

624
00:33:09,200 --> 00:33:11,320
Speaker 1: and the Russians haven't even got into Kiev. They've been

625
00:33:11,320 --> 00:33:14,680
Speaker 1: stopped in the suburbs. Kiev is a city before the

626
00:33:14,680 --> 00:33:18,080
Speaker 1: war of four million people. You know, the Russians just

627
00:33:18,120 --> 00:33:20,320
Speaker 1: simply do not have the what we call the troops

628
00:33:20,360 --> 00:33:22,320
Speaker 1: to task, meaning that the you know, the troops they

629
00:33:22,320 --> 00:33:25,040
Speaker 1: would need to accomplish the mission, uh to take a

630
00:33:25,080 --> 00:33:28,080
Speaker 1: city like Kiev, let alone to take the entire country.

631
00:33:28,080 --> 00:33:30,080
Speaker 1: I mean, Ukraine is the a nation of over forty

632
00:33:30,120 --> 00:33:32,800
Speaker 1: million people. The Russians have an invasion force of two

633
00:33:32,880 --> 00:33:35,959
Speaker 1: hundred thousand, and it's a nation that has been completely

634
00:33:36,040 --> 00:33:39,000
Speaker 1: mobilized unlike anything I've ever seen in my lifetime, and

635
00:33:39,000 --> 00:33:42,240
Speaker 1: this is the fourth war I've been around. How much

636
00:33:42,440 --> 00:33:46,120
Speaker 1: people are mobilized, from you know, twenty year olds up

637
00:33:46,160 --> 00:33:48,920
Speaker 1: to two kids who are helping do work like nick

638
00:33:48,960 --> 00:33:53,040
Speaker 1: camouflage nets, to two grandmothers. Uh. It's gonna be very,

639
00:33:53,160 --> 00:33:57,760
Speaker 1: very difficult for the Russians to achieve anything more than

640
00:33:57,840 --> 00:34:01,120
Speaker 1: potentially some limited territorial game means. And even at that,

641
00:34:01,240 --> 00:34:03,800
Speaker 1: I don't know if the Ukrainians would allow President Zelinski

642
00:34:04,000 --> 00:34:06,960
Speaker 1: to give any territory because, and rightly so, they perceive

643
00:34:07,040 --> 00:34:09,320
Speaker 1: themselves to be winning. So their view is, why should

644
00:34:09,320 --> 00:34:11,440
Speaker 1: we be seating anything. We're winning this war, and that

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Speaker 1: complicates the talks all over again. Elliott a clinic and

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Speaker 1: education always learned something. Ellie Ackaman, the the author and

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Speaker 1: former US Marie. This is the Bloomberg Surveillance Podcast. Thanks

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Speaker 1: for listening. Join us live weekdays from seven to ten

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Speaker 1: am Eastern on Bloomberg Radio and on Bloomberg Television each

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Speaker 1: best in economics, finance, investment, and international relations. And subscribe

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Speaker 1: to the Surveillance podcast on Apple podcast, SoundCloud, Bloomberg dot com,

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Speaker 1: and of course on the terminal. I'm Tom Keene and

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Speaker 1: this is Bloomberg