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Speaker 1: This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along

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Speaker 1: with Jonathan Farrow and Lisa Abramowitz. Join us each day

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Speaker 1: for insight from the best an economics, geopolitics, finance and investment.

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Speaker 1: Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and

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Speaker 1: anywhere you get your podcasts, and always on Bloomberg dot Com,

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Speaker 1: the Bloomberg Terminal, and the Bloomberg Business App. We've got

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Speaker 1: a very important guest here. Stop if you are in

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Speaker 1: the stock market for Anastasia Amrosa chief investment strategist at

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Speaker 1: I Capital. Her deceptive charm is she says exactly what

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Speaker 1: she thinks in her notes. It's lost in translation sometimes,

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Speaker 1: but there it is a single sentence. It's what everyone

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Speaker 1: wants to talk about. You say, buy the dip and tech.

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Speaker 2: AI discuss Tom this time.

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Speaker 3: I put it at the top of the note to

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Speaker 3: make sure to get lost, so use as a headline.

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Speaker 3: And I think investors should use this spike in yields

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Speaker 3: that are denting technology to get back into those shares,

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Speaker 3: and especially artificial intelligence, because Tom, if you think about

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Speaker 3: long term what drives shares, it's not so much I

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Speaker 3: mean it's not valuations, it's not rates, but it's whether

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Speaker 3: tech and stocks can deliver earnings growth, revenue growth. That's

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Speaker 3: what long term drives stocks, and so that's why I

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Speaker 3: think investors would be smart to look through the near

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Speaker 3: term volatility and to enter this long term, multi year

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Speaker 3: theme on any dips.

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Speaker 4: Tech is a broad story, of course, as you well know.

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Speaker 4: Is it just AI or is Apple a part of

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Speaker 4: that story?

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Speaker 3: I mean, Apple certainly is a part of that story,

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Speaker 3: but it is more cyclical versus secular. And you know,

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Speaker 3: obviously there's an AI component to Apple as well. But

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Speaker 3: you know, the type of tech companies that I think

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Speaker 3: we should be focused on are the ones that are

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Speaker 3: benefiting from this multi year AI opportunity. So they have

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Speaker 3: the secular tailwind, but at the same time they're also

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Speaker 3: benefiting from the cyclical upside as well. And again I

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Speaker 3: would squarely look to the AI beneficiary basket that I

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Speaker 3: think we can find both of those.

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Speaker 5: Just to extrapolate out though, what the longer term loiflications

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Speaker 5: are for other sectors outside of AI. Does this sort

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Speaker 5: of decoupling and shift towards certain industries at the expense

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Speaker 5: of others mean that we are going to have higher

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Speaker 5: inflation or lower inflation. Right, does this boost some of

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Speaker 5: these talks or is it just these stocks are going

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Speaker 5: to grow independent of any sort of macro thesis just

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Speaker 5: because of the boom in AI.

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Speaker 3: Well, if you think about inflation, and you know, part

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Speaker 3: of what's driving our inflation today is lack of labor supply,

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Speaker 3: and if we are to solve that challenge, the great

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Speaker 3: thing to do is to invest in artificial intelligence that

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Speaker 3: has the potential to boost productivity. So I think as

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Speaker 3: more and more, you know, CFOs, CEOs and also chief

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Speaker 3: technology officers are kind of racing to boost their investments

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Speaker 3: in artificial intelligence because they're trying to preserve their bottom line.

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Speaker 3: I think that's what's ultimately going to provide a big

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Speaker 3: boost for AI companies because there's a bit of fomo

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Speaker 3: going on right now, and it's not in the stock market,

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Speaker 3: but there's fomo amongst IT managers that more and more

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Speaker 3: of them want to make sure they're investing in AI

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Speaker 3: because if they don't and their competitors do, they will

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Speaker 3: be left behind.

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Speaker 5: I'm trying to wrap my head around what the implications

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Speaker 5: on a broader level are of companies investing more in AI,

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Speaker 5: a number of these very specific ones doing very well,

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Speaker 5: and then a whole bunch of industries doing terribly really

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Speaker 5: getting left out, and certainly with jobs that are not

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Speaker 5: going to be available. Cashier is getting put out of work.

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Speaker 5: For example, according to the Bank to recent fed to

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Speaker 5: recent US data, what sectors are going to lose that

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Speaker 5: are you avoiding as AI does sort of reigns supreme.

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Speaker 3: Yeah, well, I think you know, anything that's related to

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Speaker 3: you know, low margin sectors like retail for example. You know,

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Speaker 3: that's not the space that I'm very interested in right now.

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Speaker 3: But if you think about long term, you know, if

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Speaker 3: you are trying to boost margins once again, maybe you

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Speaker 3: do replace some of the labor that is comes with

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Speaker 3: higher wages, if you do replace that with you know, robotics,

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Speaker 3: that you replace that up with automation. You know, that's

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Speaker 3: the way to preserve those margins. But I would say

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Speaker 3: near term, you know, it's not an avoidance strategy, it's

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Speaker 3: more of a preference strategy. You know, where do I

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Speaker 3: think the incremental dollar spending of IT managers is going

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Speaker 3: to go. It's on that specific theme. And that's why

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Speaker 3: I say, you know, rates bumps come and go recession

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Speaker 3: fears come and go. But this is a theme that

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Speaker 3: managers are prioritizing for the coming years, I.

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Speaker 4: May well accelerate. It makes you wonder whether some of

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Speaker 4: these labor deals are the last kind of labor dales

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Speaker 4: will ever see like this, given that acceleration into those

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Speaker 4: kind of things that you're talking about.

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Speaker 3: Yeah, I mean, I think that would be a big

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Speaker 3: call to make to say these are the last of

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Speaker 3: the labor deals. And the reason I say that is,

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Speaker 3: you know, all this tremendous artificial intelligence potentially we're talking

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Speaker 3: about it automation that's not going to happen in a

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Speaker 3: blink of an eye.

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Speaker 6: You know.

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Speaker 3: Obviously the adoption of strategy BT for example, seems like

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Speaker 3: it did happen in the blink of an eye. We

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Speaker 3: got to one hundred million users in two months. But

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Speaker 3: it does take time to for example, you know, install

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Speaker 3: automation in a factory.

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Speaker 5: You know, it does take time, you.

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Speaker 3: Know, to uh to make sure that AI is you know,

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Speaker 3: can go mainstream. So so I think that time is

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Speaker 3: years and not quarters.

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Speaker 5: John, you were saying that rate spikes come and go,

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Speaker 5: and I'm just curious. On the other side, Yes, there's

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Speaker 5: a preference for AI, the ballast, the sort of offset

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Speaker 5: in your portfolio. Can it still be a bond call

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Speaker 5: at a time where there is such uncertaintance your call

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Speaker 5: on AI is sort of independent of that in a

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Speaker 5: very strong way. Yeah, it is, uh.

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Speaker 3: I mean, it's one of the things that we're going

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Speaker 3: to have continue to have the highest conviction in it.

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Speaker 3: But at the same time, it can be the only thing.

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Speaker 3: And you know, I do think the other ballast to

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Speaker 3: the portfolio has to be something that provides you protection

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Speaker 3: against inflation being more sticky. And obviously we have oil prices, John,

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Speaker 3: you were whispering, you know, spiking to ninety dollars, ninety

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Speaker 3: dollars pressure.

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Speaker 5: Just veryly would you like.

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Speaker 1: The whisper in your mic right now?

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Speaker 3: I think Tom is saying something about buying Chech and AI,

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Speaker 3: But I would also couple that with energy because you know,

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Speaker 3: it's very clear that Saudi Arabia and Russia are intent

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Speaker 3: on keeping oil prices elevated. And you know, if that's

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Speaker 3: the case, that I want to be in that space

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Speaker 3: as well.

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Speaker 4: Anestagia, thank you, this was wonderful and a stagia amo

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Speaker 4: there if I capital outspoken on growth Tom for a

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Speaker 4: lot of this year.

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Speaker 1: It's great you have a chance to talk to her

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Speaker 1: on this, but I mean, Brian Belski over at be

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Speaker 1: More Capital Markets now modeling five thousand stories. Yeah, yeah,

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Speaker 1: some of them are modeling out in here five thousand

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Speaker 1: as well. Like sounds like she's always push but as

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Speaker 1: is like, so she's on the edge of five thousand there.

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Speaker 4: But right, I like, Brian right bullish, right, Yeah, I mean.

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Speaker 1: But but you know, Ana stage I think is on

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Speaker 1: the edge of five thousand. We're not hearing enough of this.

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Speaker 4: I'm not sure she said that's.

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Speaker 7: Still right here.

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Speaker 8: Job, you canber or.

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Speaker 4: Not right now?

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Speaker 1: With changing markets. A brief from Stephanie Roth, senior market's

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Speaker 1: economist JP Morgan, Private Bank, good luck with his data.

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Speaker 1: Faroli's going to age. He's going to get his first

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Speaker 1: gray hair off of this, no question about it. How

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Speaker 1: do you, within the continuum of JP Morgan look at

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Speaker 1: this American economy given the shock I see on my

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Speaker 1: screen the two year yield five point zero three percent.

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Speaker 6: Yeah, I mean it was It's definitely a surprise a

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Speaker 6: claim to just continue to move lower. Granted there is

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Speaker 6: some seasonality issues within the summer months, so it's possible

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Speaker 6: we'll see a bit of a reversal of that when

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Speaker 6: we head into September. If you look at the overall

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Speaker 6: jobs picture, what we saw last week was the kind

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Speaker 6: of the opposite picture, and those are are more a

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Speaker 6: little bit less less volatile data. So we saw quis

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Speaker 6: rate continue to come down. That's bound back down to

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Speaker 6: where we were before the pandemic. You saw jobs, you know,

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Speaker 6: the the picture there. Continue to see a rebalancing in

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Speaker 6: the labor market. The three month average in non farm

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Speaker 6: perils is one hundred and fifty thousand, which isn't that

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Speaker 6: far from the break even rate, especially if you factor

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Speaker 6: in some of the immigration trends that we're seeing.

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Speaker 5: So you believe in immaculate cooling of the job market.

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Speaker 6: I think we're starting to see signs of that. It's

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Speaker 6: pretty impressive the extent to what you're seeing the job

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Speaker 6: market continue to cool down. Absent today's data, you're seeing

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Speaker 6: wages continue to soften, the demand for labor does continue

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Speaker 6: to cool down, and I think we'll just just see

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Speaker 6: more of this. It's been a pretty impressive cooling of

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Speaker 6: the labor market throughout the course of this year. If

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Speaker 6: you look at the beginning part of this year, job

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Speaker 6: gains were double what they were today what they are today.

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Speaker 5: So do you believe that the Chicago Fed is correct

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Speaker 5: when the new research paper dropped where most of the

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Speaker 5: effect from the five point two to five percent points

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Speaker 5: of increases that we've seen in rates going back some

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Speaker 5: eighteen months, that that has mostly been percolating through the system.

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Speaker 5: It's having its effect, and it can bring us down

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Speaker 5: to two percent by mid next year.

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Speaker 6: Yeah. If you look at inflation so far, it's come

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Speaker 6: down quite a bit. Inflation, I would say, is trending

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Speaker 6: around three percent. There are summer months also brought down

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Speaker 6: the data, maybe artificially so, so we'll probably in the

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Speaker 6: next couple months sea it tick up a little bit.

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Speaker 6: So I would say the trend in inflation right now

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Speaker 6: is three percent. The Fen's not fighting four and a

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Speaker 6: half to five percent anymore.

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Speaker 1: Let me stay in the markets here they are on

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Speaker 1: the move here at John Ferro and A the nine

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Speaker 1: o'clock on television. I'll be with Paul Sweeney here to

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Speaker 1: get to the market opening. Nasdaq futures negative one point

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Speaker 1: one percent in significant retreat, down one hundred and seventy three.

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Speaker 1: Nasdaq one hundred points. We go from negative twenty six

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Speaker 1: to negative twenty nine now on SPX down seven tenths

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Speaker 1: of a percent, the vix out to fifteen point three

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Speaker 1: to three at LEASTA you mentioned the euros through one

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Speaker 1: oh seven. There it is stronger dollar. I have a

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Speaker 1: one oh five lisa on DXY.

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Speaker 5: Yeah, this is a concern for Europe. How they deal

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Speaker 5: with this, especially do they have to hike rates further? Regardless,

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Speaker 5: US has continued to be strong and it does seem

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Speaker 5: like the soft landing still is the preeminent issue that

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Speaker 5: people are talking about out.

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Speaker 4: In the US.

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Speaker 5: What does that mean in terms of higher for longer

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Speaker 5: and possibly not seeing rate cuts next year?

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Speaker 1: Arey dnsbec you won seven point three three you want

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Speaker 1: is not where it was a couple of days ago.

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Speaker 1: So there's sort of a global follow on here is well,

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Speaker 1: what's your conviction? I mean, you've got such an eclectic

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Speaker 1: team at JP Morgan. What is your conviction in your

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Speaker 1: belief right now? Or do you feel like you could

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Speaker 1: change it? September twelfth, CPI, September fourteen, DCB. What's your

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Speaker 1: belief in your theories?

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Speaker 6: So I feel good about the base case that we'll

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Speaker 6: have this soft dish landing. Growth should probably slow in

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Speaker 6: the first part of next year. But there are two tails.

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Speaker 6: The one tail is that growth it's better than expected

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Speaker 6: in the next couple of months, and then you have

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Speaker 6: the other tail where we get a more significant slowdown

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Speaker 6: and the lags just take longer, and then that leads

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Speaker 6: us to kind of a more material recession. So I

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Speaker 6: feel good about the base case, but I think you're

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Speaker 6: right there is a lot of uncertainty around those tails.

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Speaker 5: Do you think that inflation can stay at two percent

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Speaker 5: if the Fed starts aggressively cutting rates next year.

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Speaker 6: Yes, if they do it once they feel really good

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Speaker 6: about the labor market cooling. So you probably need to

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Speaker 6: see the unemployment rate rise a little bit more. So

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Speaker 6: that three point eight percent that we saw that was

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Speaker 6: largely driven by supply coming back online. In order for

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Speaker 6: the Fed to really be cutting interest rates, you need

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Speaker 6: to see a little bit more softest in that coming

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Speaker 6: from a more material rise in unemployment.

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Speaker 5: What is that line in the sand? Is there one?

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Speaker 5: Is it four and a half percent the target that

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Speaker 5: they were looking at in terms of where they expected

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Speaker 5: this year's unemployment rate to end.

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Speaker 2: I think it's a little bit.

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Speaker 6: It could be a little bit lower than that, somewhere

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Speaker 6: in between four and four and a half percent, especially

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Speaker 6: because back then inflation was a little bit higher. Now

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Speaker 6: it's come down in a pretty significant way, so the

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Speaker 6: importance of getting more material slowing in the economy is

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Speaker 6: just a little bit less.

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Speaker 1: So we get some pre market moves here right now.

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Speaker 1: Negative thirty on SPX gets my attention. But Apple, Lisa

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Speaker 1: sort of moldy all day and now moldier. Let's see

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Speaker 1: if a talk is it. I got a negative one

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Speaker 1: seventy seven, you know, pre market down a solid three

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Speaker 1: point four percent, and that's off a couple of days

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Speaker 1: of retreat.

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Speaker 5: Well, and it comes on the heels of headlines that

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Speaker 5: China is banning the iPhone amongst certain government officials. But

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Speaker 5: just tying that to the economic story is really important

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Speaker 5: when it comes to what this means for ongoing trade

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Speaker 5: tensions between the US and China and how isolated the

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Speaker 5: US strength is from some of that. That to me

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Speaker 5: is a big question mark.

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Speaker 1: I mean a big question mark, Stephanie. Is the heart

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Speaker 1: of the matter here, and it comes to me is

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Speaker 1: the September meeting in play, you know, the jargon here

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Speaker 1: is at Lisa reads the minutes, I don't is it

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Speaker 1: a live meeting? Is it a live meeting?

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Speaker 6: I mean, of course every meeting is live, But I

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Speaker 6: think we're more talking about the November meeting is where

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Speaker 6: we're really potentially talking about another hike. Even Waller was out,

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Speaker 6: you know, earlier this week. He sounded a lot more

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Speaker 6: dubbish than he's been. It seems like the desire is

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Speaker 6: to pause and wait a little bit. What you saw

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Speaker 6: in the base book was just signs that there's some

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Speaker 6: softening in the labor market. It kind of makes sense

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Speaker 6: to just wait a meeting and see our base cases

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Speaker 6: that they're not making.

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Speaker 1: Them, at least to save me here nasdek on one

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Speaker 1: point three percent.

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Speaker 5: Well, just following on this discussion around China and what's

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Speaker 5: going on, how isolated the US and the strength there is,

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Speaker 5: is there any knock on effects that people aren't fully

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Speaker 5: accounting for when it comes to I don't want to

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Speaker 5: say decoupling, what do they say de risking? However you

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Speaker 5: want to phrase it right that we hear about between

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Speaker 5: the US and China, how do you model that.

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Speaker 6: I think the real transmission is that we're getting on

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Speaker 6: shoring back to the US economy. Right, So production is

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Speaker 6: now starting to pick up here you're getting I mean,

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Speaker 6: semiconductor chip facility production is really strong. So the structures

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Speaker 6: have been one of the reasons why the US economy

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Speaker 6: has been so resilient. So at the margin, it's been

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Speaker 6: a support for the US economy and the manufacturing sector.

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Speaker 6: And I think we kind of forget that China is

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Speaker 6: a little bit less relevant for the global economy than

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Speaker 6: it used to be. It's not really the importer of goods,

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Speaker 6: especially since it's not really boosting their property market, and

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Speaker 6: it hasn't for years.

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Speaker 2: Well.

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Speaker 5: But given that a lot of people say that the

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Speaker 5: decades of disinflation and very low inflation were driven by

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Speaker 5: globalization and by importing cheaper goods from overseas, does that

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Speaker 5: reverse and this is sort of underpinning some of the

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Speaker 5: angst about higher yields for longer, I think I don't.

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Speaker 6: I think it would take. It's a really long story, right,

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Speaker 6: And we still import a much larger share of goods

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Speaker 6: from China than we used to. It has come down

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Speaker 6: from twenty eighteen levels, but it's still quite high relatively speaking,

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Speaker 6: and import goods it's really a commodities channel. So to

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Speaker 6: the extent that China impacts the global commodities chain, then

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Speaker 6: that's that's really what goes into goods prices.

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Speaker 1: So what's your run rate in real GDP? Now, Atlanta

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Speaker 1: GDP's got like a near six percent, five point six

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Speaker 1: percent number. I know you don't believe in that, But

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Speaker 1: what's the math to get us to the end of

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Speaker 1: the year.

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Speaker 6: We're looking at about three percent, are potentially higher higher

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Speaker 6: in three Q and four Q you should probably see

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Speaker 6: quite a bit weaker, a couple of headwinds heading into

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Speaker 6: the fourth quarter. You have cent debt payments, just some

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Speaker 6: some seasonal FI actors, and the momentum should be slower then.

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Speaker 6: But Atlanta FED is very much overstated and they know

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Speaker 6: the error in their model is very high at the

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Speaker 6: beginning of the quarter.

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Speaker 1: Stephanie Roth with us with JP Morgan, thank you so much.

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Speaker 1: JP Morgan, Thank you someone who keeps track of the nth.

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Speaker 1: We're gonna get to this right now. It's so important.

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Speaker 1: Michael Nathanson joins US senior research analysts SVB Moffatt Nathan Nathanson, Michael,

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Speaker 1: you guys absolutely nailed cord cutting. Where are we in

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Speaker 1: the continuum. If you were talking to Charter management today,

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Speaker 1: how much worse is this going to get for the

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Speaker 1: Charters of the world.

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Speaker 7: Yeah, good morning. It's an interesting question. Craig Maffa, who

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Speaker 7: covers Charter, would say, Look, Charter is becoming indifferent to

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Speaker 7: being in a video business right so it's it's not

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Speaker 7: the business. It was a decade ago, but going forward,

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Speaker 7: they're saying to us, we don't really need to be

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Speaker 7: is business anymore. It's a low margin business. Broadband and

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Speaker 7: mobile phone is our future. If you keep pushing rates

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Speaker 7: as high as you are, mister ESPN can't. We can't

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Speaker 7: afford to actually services business anymore. So it's bad enough

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Speaker 7: for them to walk away from video, which is a

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Speaker 7: shocking statement given that they have the more video customers

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Speaker 7: than anyone in this country.

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Speaker 4: Right now, Michael, how do you think this guests resolve

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Speaker 4: this current spat? What do you think the endgame looks like?

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Speaker 7: John? I would have thought it would be resolved by today, right.

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Speaker 7: I think the law this goes into another weekend. The

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Speaker 7: endgame if it's not resolved by Monday night football Bills Jets.

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Speaker 7: I think what happens is that Disney will be dropped,

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Speaker 7: ESPM be dropped from Charter systems, and that Disney will

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Speaker 7: have to work extra hard to convince people who are

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Speaker 7: in Charter to take either Hulu or YouTube TV. Right So,

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Speaker 7: I think, you know, if this is not resolved by

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Speaker 7: this weekend, it's a huge problem. The problem here is

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Speaker 7: that Charter want the apps that Disney is selling to

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Speaker 7: its own customers given for free to charge customers. Right

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Speaker 7: so we all complain about the building and the double

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Speaker 7: you know, the expenses of now building a new bundle,

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Speaker 7: they want to give that bundle back for free, the

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Speaker 7: streaming bundle to the customers, and that is a non starter.

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Speaker 7: Right So the ask is so wide from what actually

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Speaker 7: Disney can do, so we're not very hopeful this can

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Speaker 7: be resolved.

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Speaker 4: Pretty embarrassing at the moment, Michael, given that we've got

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Speaker 4: tennis players in news conferences in the US Open saying

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Speaker 4: they can't watch the tennis themselves from their hotel rooms. Now,

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Speaker 4: when we think about losers, I'm thinking first and foremost

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Speaker 4: to the consumer, the customer who can't watch the sport

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Speaker 4: they'd like to watch right now without paying up for alternatives. Michael,

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Speaker 4: who is the big loser out of these two sides

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Speaker 4: in this conflict, currently.

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Speaker 7: The big losers are both. You know, I would say

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Speaker 7: to you, the bigger loser in the long term if

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Speaker 7: it's not resolved is Disney, because this will become stand

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Speaker 7: operator for teacher cross the industry. Right, So Disney, which

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Speaker 7: has a ton of fixed sports contracts, will lose distribution

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Speaker 7: and carriage across the PATV world. Right, So that is untenable.

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Speaker 7: It's unthinkable. We could go Charter and the rest of

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Speaker 7: the video business will say to you, look where indifferent.

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Speaker 7: You know, we've seen other cave operators the emphasize video.

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Speaker 7: So the big luwers, so John played forward to, will

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Speaker 7: be sports leagues, right, all the leagues and all the

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Speaker 7: players who have counted on TV inflation to pay their salaries.

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Speaker 7: That's going to be a huge challenge going forwar.

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Speaker 2: Right.

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Speaker 7: So this is the beginning of a multi layer problem

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Speaker 7: for a ton of industries.

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Speaker 5: That you know that no one's thinking about right now, Michael,

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Speaker 5: does it really point to a new model for both

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Speaker 5: sports and for streaming. And it's a model really pioneered

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Speaker 5: by or perhaps exemplified by line on miss Lionel Messi

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Speaker 5: and what he's doing with Apple Plus, given the fact

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Speaker 5: that he is getting a chunk of that, there's the revenue,

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Speaker 5: there's the upside, and oh yeah, Apple Plus sign ups

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Speaker 5: have been off the through the roof in response to

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Speaker 5: his celebrity. Is this the new model and the winning

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Speaker 5: model that you foresee going forward?

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Speaker 7: See Lisa, I want to said to you, the new

402
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Speaker 7: model is the old model. The old model will work well, right,

403
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Speaker 7: which is you'd one place, one bundle, one linear bundle

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Speaker 7: where all your sports were available, right, and life of us.

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Speaker 7: We don't understand why the industry is both media and

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Speaker 7: distribution have not worked to make a skinnier bundle of sports.

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Speaker 7: You know, John talks about Peacock and Premier League. That

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Speaker 7: content should be in the bundle. When the US opens

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Speaker 7: playing the first couple of rounds of golf, I want

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Speaker 7: to see it on ESPN. The problem is that the

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Speaker 7: two sides have not come together to create a new bundle,

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Speaker 7: and thus all the rights are fragmented. So I am

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Speaker 7: very fearful of the consumer experience going forward has not solved.

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Speaker 7: It is suboptimal. As you guys have joked about, to

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Speaker 7: watch seventeen different sports apps to watch your team, and

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Speaker 7: it's and they're killing what was the golden goose, and

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Speaker 7: it drives as crazy that people want to build over

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Speaker 7: the top sports apps when the model worked in the

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Speaker 7: old bundle, that was the best way to get sports.

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Speaker 7: It was all there.

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Speaker 1: Yeah, Michael Nathan's and by holds cell Disney I've enjoyed

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Speaker 1: from one eighty nine, loaded the boat on my trip

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Speaker 1: to Disneyland and Anaheim one eighty nine, and we're joining

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Speaker 1: it at eighty one. You got to rebound to one

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Speaker 1: point fifteen in an outperform, justify your outperform.

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Speaker 7: Yeah, so we upgraded it when Bob Ayer came back

427
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Speaker 7: at ninety. Right, we're down ten percent. The call here

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Speaker 7: is that their streaming business should be a lot more

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Speaker 7: profitable than in a pierce today when they buy in Hulu,

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Speaker 7: which is probably going to happen to the end by

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Speaker 7: the end of the year. Now, we think there's a

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Speaker 7: lot more margin opportunity at at streaming. Plus the park

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Speaker 7: business is close to where the stock value is today.

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Speaker 7: So our calls you're buying the stock with parks fully

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Speaker 7: valued and an option on streaming profitability. Neither margins are

436
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Speaker 7: negative can Netflix margins twenty percent? So we think that's

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Speaker 7: the big difference the bundle. Really, this is a lot

438
00:21:03,840 --> 00:21:06,160
Speaker 7: of noise. It doesn't matter that much the long term

439
00:21:06,480 --> 00:21:10,479
Speaker 7: because the market puts sole little value on linear hassets. Right,

440
00:21:10,600 --> 00:21:14,040
Speaker 7: look at where Paramount trades or Warner Brother's trades. They're

441
00:21:14,119 --> 00:21:16,639
Speaker 7: lowly valued companies. And that's not the call of Disney.

442
00:21:16,960 --> 00:21:18,040
Speaker 7: It's Parks plus streamer.

443
00:21:18,119 --> 00:21:20,440
Speaker 1: Yeah, Michael quick, heare because John wants to get in.

444
00:21:20,840 --> 00:21:22,600
Speaker 1: If you have that where it's a Parks or a

445
00:21:22,680 --> 00:21:26,399
Speaker 1: bolt on streaming for free. Great, can you generate a

446
00:21:26,440 --> 00:21:30,080
Speaker 1: free cash flow out of the parks businesses? Support the dividend,

447
00:21:30,359 --> 00:21:32,480
Speaker 1: support use of cash inside.

448
00:21:33,920 --> 00:21:36,359
Speaker 7: You will you know, it's a great question. The Compani

449
00:21:36,400 --> 00:21:38,000
Speaker 7: used to make ten billion are free cash flow? They

450
00:21:38,040 --> 00:21:41,560
Speaker 7: make four billion today four billions as largely parks. So

451
00:21:41,600 --> 00:21:44,000
Speaker 7: you would say four billion is your support for cash flow?

452
00:21:44,680 --> 00:21:47,040
Speaker 7: You know for dividends for a buyback, you will be

453
00:21:47,080 --> 00:21:50,080
Speaker 7: a lower cash flow business would be a higher multiple business.

454
00:21:50,160 --> 00:21:52,240
Speaker 7: And you know, Tom, there are media companies that have

455
00:21:52,280 --> 00:21:55,040
Speaker 7: twenty percent casual yields that no one cares about today, right,

456
00:21:55,359 --> 00:21:58,600
Speaker 7: So we're looking at cashlow yields just explode and no

457
00:21:58,720 --> 00:22:01,440
Speaker 7: one cares because of the sustain ability as you guys

458
00:22:01,480 --> 00:22:03,480
Speaker 7: have asked us morning is certainly.

459
00:22:03,240 --> 00:22:05,800
Speaker 4: A question, Michael. I can't think of a CEO that

460
00:22:05,960 --> 00:22:09,040
Speaker 4: is more loved. Despite the fact that Stock's not doing well,

461
00:22:09,560 --> 00:22:12,639
Speaker 4: Goldman is down six percent year today, Solomon gets a

462
00:22:12,760 --> 00:22:16,080
Speaker 4: ton of bad press, Disney's down about six percent year today.

463
00:22:16,320 --> 00:22:19,239
Speaker 4: Bobbiker still gets all this media love, Michael. Where does

464
00:22:19,320 --> 00:22:22,520
Speaker 4: that media love come from? Is he doing a good job?

465
00:22:22,680 --> 00:22:25,159
Speaker 4: These problems were all blamed on shapek who was in

466
00:22:25,200 --> 00:22:27,640
Speaker 4: the job for five minutes. When does Bob I got

467
00:22:27,640 --> 00:22:29,040
Speaker 4: start to own some of these issues.

468
00:22:30,440 --> 00:22:33,720
Speaker 7: I think you know our calmis is give give Bob

469
00:22:34,560 --> 00:22:38,040
Speaker 7: twenty twenty four. Right, you're turning a battleship around. The

470
00:22:38,640 --> 00:22:41,720
Speaker 7: real issue in our view was, well, John, we could

471
00:22:41,720 --> 00:22:46,080
Speaker 7: spend another hour on Disney chapig overspent on streaming. He

472
00:22:46,160 --> 00:22:50,520
Speaker 7: basically was chasing subscribers, not profitability. It takes time to

473
00:22:50,640 --> 00:22:53,440
Speaker 7: turn that around. They have to buy in Hulu. But

474
00:22:53,680 --> 00:22:55,640
Speaker 7: I think what we would say, and I think it's

475
00:22:55,680 --> 00:22:59,240
Speaker 7: your criticism, is that the communication out of Disney since

476
00:22:59,280 --> 00:23:01,560
Speaker 7: Bob has come back has been very poor. Right. They

477
00:23:01,760 --> 00:23:05,520
Speaker 7: basically have thrown out a ton of ideas and they've

478
00:23:05,520 --> 00:23:08,480
Speaker 7: teased the market without delivering on what the story actually

479
00:23:08,560 --> 00:23:10,760
Speaker 7: is going to be, you know, truth be told. The

480
00:23:10,760 --> 00:23:12,760
Speaker 7: stock is training where it is and there's very little

481
00:23:13,320 --> 00:23:15,760
Speaker 7: lone only support right now. Right so, I think the

482
00:23:15,920 --> 00:23:19,200
Speaker 7: market has voted and our call is like, this is

483
00:23:19,200 --> 00:23:23,480
Speaker 7: about twenty twenty four fixing businesses that should be more profitable.

484
00:23:23,520 --> 00:23:27,960
Speaker 7: But John, it's a fair comment. This ESPN issue, a

485
00:23:28,040 --> 00:23:30,600
Speaker 7: lot of it was built on Bob talking about what

486
00:23:30,720 --> 00:23:33,000
Speaker 7: he was going to do in the future, because Disney's

487
00:23:33,080 --> 00:23:37,800
Speaker 7: not been aggressively leaking their content into streaming like ESPN anyway,

488
00:23:38,240 --> 00:23:40,480
Speaker 7: but he's been talking about we're going to do this

489
00:23:40,560 --> 00:23:42,919
Speaker 7: at some point, and I think charters managements, Look, if

490
00:23:42,920 --> 00:23:44,800
Speaker 7: you're going to do this, why are we paying for

491
00:23:44,960 --> 00:23:45,440
Speaker 7: ESPN tech?

492
00:23:45,560 --> 00:23:47,240
Speaker 4: They do this for another at too. Michael, I've just

493
00:23:47,280 --> 00:23:49,200
Speaker 4: been screened down because I've got five seconds left on

494
00:23:49,280 --> 00:23:52,000
Speaker 4: the clock, exactly, Michael, Thank you, buddy, Michael, Nathan Cent

495
00:23:52,280 --> 00:23:54,160
Speaker 4: of SVB Muffett Nath and Cent.

496
00:23:58,680 --> 00:24:00,600
Speaker 1: Oh, let's do commodities right now. We can do this

497
00:24:00,680 --> 00:24:03,760
Speaker 1: with a trillion expert away from just oil focused. Kina

498
00:24:03,800 --> 00:24:07,920
Speaker 1: Haik is outstanding at ED and f Man unsofts on

499
00:24:08,040 --> 00:24:11,840
Speaker 1: the agricultures and that you know, kinda. You know, I'm

500
00:24:11,960 --> 00:24:15,680
Speaker 1: really trying to cut back on my sugar consumption. I'm

501
00:24:15,760 --> 00:24:18,600
Speaker 1: just thrilled to tang zero. It's really really helped me

502
00:24:18,680 --> 00:24:22,480
Speaker 1: out with less sugar involved. And yet sugar to the moon.

503
00:24:23,320 --> 00:24:27,399
Speaker 1: Is there a global price for sugar? Should Americans be

504
00:24:27,560 --> 00:24:30,959
Speaker 1: concerned about a surge and sugar in India?

505
00:24:33,040 --> 00:24:35,720
Speaker 8: Yeah, So we have the global sugar price that's actually

506
00:24:36,119 --> 00:24:41,280
Speaker 8: reach eleven year highs. This happened yesterday, and it's because

507
00:24:41,320 --> 00:24:44,960
Speaker 8: we're falling into deficit. This Anino weather phenomenon that we've

508
00:24:45,040 --> 00:24:48,600
Speaker 8: been seeing for the last three four months really impacts

509
00:24:49,359 --> 00:24:52,840
Speaker 8: the weather in Asia, particularly those cane growing regions in

510
00:24:52,920 --> 00:24:56,800
Speaker 8: India and Thailand who are major sugar cane exporters. They're

511
00:24:56,880 --> 00:25:00,480
Speaker 8: suffering from declining gels and the world's just going to

512
00:25:00,520 --> 00:25:02,720
Speaker 8: have to live with a lot less exports out of

513
00:25:02,760 --> 00:25:05,000
Speaker 8: these two key regions. So I think that's a sudden

514
00:25:05,080 --> 00:25:08,560
Speaker 8: type in the supply demand balance for global sugar, which

515
00:25:08,640 --> 00:25:10,320
Speaker 8: is cause prices to search higher.

516
00:25:10,920 --> 00:25:13,760
Speaker 1: Well, I look at the prices again, but I want

517
00:25:13,800 --> 00:25:15,960
Speaker 1: to go back to what it means for Americans because

518
00:25:15,960 --> 00:25:18,160
Speaker 1: I think you know, all of us around the table,

519
00:25:18,320 --> 00:25:21,680
Speaker 1: Lisa Less Sugar, John Less sugar even I'm trying to

520
00:25:21,720 --> 00:25:24,640
Speaker 1: cut back sugar. That's sort of a zeitgeist out there

521
00:25:24,680 --> 00:25:27,479
Speaker 1: right now in America. Are we going to adjust here

522
00:25:27,600 --> 00:25:30,680
Speaker 1: because of higher sugar prices like we would the higher

523
00:25:30,800 --> 00:25:31,560
Speaker 1: cattle prices.

524
00:25:33,119 --> 00:25:35,080
Speaker 8: Did you get to see how quickly the follow through

525
00:25:35,119 --> 00:25:38,920
Speaker 8: will be at the retail level? I think obviously, because

526
00:25:38,920 --> 00:25:41,080
Speaker 8: it's the futures price, there's going to be a time

527
00:25:41,200 --> 00:25:44,560
Speaker 8: like by the time the sugar buyers actually start passing

528
00:25:44,600 --> 00:25:47,080
Speaker 8: that on at a supermarket level, so there will be

529
00:25:47,240 --> 00:25:50,480
Speaker 8: some lag on that eventually, though, prices will probably have

530
00:25:50,600 --> 00:25:54,600
Speaker 8: to raise rise higher, and then it's a question of

531
00:25:55,080 --> 00:25:58,760
Speaker 8: really it's the income elasticity. How much do you actually

532
00:25:58,800 --> 00:26:01,440
Speaker 8: consume sugar? Is it going to be high enough for

533
00:26:01,560 --> 00:26:04,959
Speaker 8: you to actually reduce intake. I suspect that a lot

534
00:26:05,000 --> 00:26:07,840
Speaker 8: of Americans probably don't consume as much sugar as maybe

535
00:26:08,320 --> 00:26:12,119
Speaker 8: someone in Africa or Asia does, where sugar is a

536
00:26:12,240 --> 00:26:16,280
Speaker 8: cheap calorie, which is still compounds for quite a bit

537
00:26:16,320 --> 00:26:19,280
Speaker 8: of your average diet. So I do think that in

538
00:26:19,720 --> 00:26:22,919
Speaker 8: actual consumption, the trend has been falling definitely in developed

539
00:26:22,960 --> 00:26:27,560
Speaker 8: countries because of obesity concerns diet concerns, but in other

540
00:26:27,640 --> 00:26:30,000
Speaker 8: parts of the world. I think sugar is still very

541
00:26:30,080 --> 00:26:32,760
Speaker 8: cheap source of calorie, where it's still very much part

542
00:26:32,800 --> 00:26:33,399
Speaker 8: of the basket.

543
00:26:33,720 --> 00:26:36,639
Speaker 5: We weren't basket. We weren't talking about sugar yesterday. We

544
00:26:36,720 --> 00:26:38,760
Speaker 5: weren't talking about the day before, even as it surged

545
00:26:38,800 --> 00:26:41,720
Speaker 5: to eleven year highs. We were not talking about rice,

546
00:26:41,880 --> 00:26:44,479
Speaker 5: even as it surged to fifteen year highs. We were

547
00:26:44,520 --> 00:26:46,800
Speaker 5: talking about oil, and we were wondering whether this was

548
00:26:46,840 --> 00:26:49,399
Speaker 5: supply side or demand side, and whether this was something

549
00:26:49,440 --> 00:26:53,080
Speaker 5: that was a broader indication of activity and demand, or

550
00:26:53,119 --> 00:26:55,800
Speaker 5: whether this was something with Saudi Arabia sticking their thumb

551
00:26:55,920 --> 00:26:58,880
Speaker 5: on the scales. Do you think there's something bigger going

552
00:26:59,000 --> 00:27:02,440
Speaker 5: on throughout the commodity space with the price increases that

553
00:27:02,520 --> 00:27:05,880
Speaker 5: we've seen in a vast number of specific sectors.

554
00:27:07,880 --> 00:27:11,800
Speaker 8: Yes, I think oil. Ultimately it's a linch pen. It's

555
00:27:12,520 --> 00:27:14,879
Speaker 8: it's the driver of most commodities, and it's the biggest

556
00:27:14,920 --> 00:27:19,000
Speaker 8: component in all the futures commodity indexes. So the fact

557
00:27:19,000 --> 00:27:22,560
Speaker 8: that oils reached ninety dollars per barrel is significant and

558
00:27:22,760 --> 00:27:26,480
Speaker 8: it means that the whole commodity index pushes higher. For sugar,

559
00:27:26,600 --> 00:27:29,320
Speaker 8: it does impact it because Brazil, which is the largest

560
00:27:29,359 --> 00:27:32,119
Speaker 8: sugar producer in the world, has an optionality to produce

561
00:27:32,560 --> 00:27:36,720
Speaker 8: ethanol or sugar, and ethanol is influenced by crude oil prices,

562
00:27:37,119 --> 00:27:39,720
Speaker 8: So there is that linkage. But I think right now

563
00:27:40,359 --> 00:27:46,320
Speaker 8: today the agricultural commodity sector is slightly diverged away from

564
00:27:47,119 --> 00:27:50,480
Speaker 8: crude oil only because we are looking at a weather market.

565
00:27:51,280 --> 00:27:52,879
Speaker 5: Yeah, but Conna, I just want to take this a

566
00:27:52,920 --> 00:27:56,920
Speaker 5: step further because, let's say, just putting the agricultural side aside,

567
00:27:57,400 --> 00:28:00,679
Speaker 5: there is a question about whether iron ore is setting

568
00:28:00,680 --> 00:28:04,240
Speaker 5: the same signal that oil is that something is maybe

569
00:28:04,320 --> 00:28:06,760
Speaker 5: not as weak as people had previously expected, whether it's

570
00:28:06,840 --> 00:28:09,960
Speaker 5: China or elsewhere, or if there is some other dynamic

571
00:28:10,040 --> 00:28:13,200
Speaker 5: that could cause inflation to surge again in other areas.

572
00:28:13,280 --> 00:28:15,040
Speaker 5: Do you think that that's a fair categorization.

573
00:28:18,040 --> 00:28:20,520
Speaker 8: I think one thing that is common to the whole

574
00:28:20,520 --> 00:28:23,280
Speaker 8: community complex is the fact that China, which has been

575
00:28:23,320 --> 00:28:25,280
Speaker 8: such a drag on the commodity sector for much of

576
00:28:25,320 --> 00:28:28,720
Speaker 8: this year, is really talking out the amount of stimulation

577
00:28:28,880 --> 00:28:31,080
Speaker 8: that the government is going to be putting in so

578
00:28:31,359 --> 00:28:35,479
Speaker 8: that in itself can provide some latent optimism that if

579
00:28:35,520 --> 00:28:37,800
Speaker 8: the China starts to stimulate its economy. There will be

580
00:28:37,840 --> 00:28:41,680
Speaker 8: more demand for oil, agriculture, metals, you name it. So

581
00:28:41,720 --> 00:28:46,240
Speaker 8: I think that could be definitely one potential. Otherwise, I

582
00:28:46,360 --> 00:28:51,080
Speaker 8: think we're looking at pretty disparate little sectors of eggs, metals,

583
00:28:51,120 --> 00:28:54,200
Speaker 8: and energy at this moment in time. And crude OL's

584
00:28:54,320 --> 00:28:57,959
Speaker 8: rising only because of the OPEC cutback, because otherwise demand

585
00:28:58,120 --> 00:29:01,400
Speaker 8: is not really shifted much. I'd say the economic side

586
00:29:01,480 --> 00:29:05,160
Speaker 8: on for crudel has been perish to neutual, let's say, and.

587
00:29:05,240 --> 00:29:06,880
Speaker 4: Kind of a week or ago, thanks for the update,

588
00:29:07,000 --> 00:29:08,640
Speaker 4: kind of hack there of AD and f.

589
00:29:08,760 --> 00:29:21,240
Speaker 1: Matt Our guests has been great here and particularly through

590
00:29:21,240 --> 00:29:24,280
Speaker 1: a tumultuous August, and it was wonderful. We couldn't get

591
00:29:24,320 --> 00:29:26,520
Speaker 1: Tannebaum in earlier because he's you know, he's got like

592
00:29:26,600 --> 00:29:28,840
Speaker 1: six he's got like sixth summer he treats, he goes

593
00:29:28,920 --> 00:29:31,440
Speaker 1: to I mean he handles it from Bar Harbor all

594
00:29:31,480 --> 00:29:32,160
Speaker 1: the way down to that.

595
00:29:32,240 --> 00:29:33,760
Speaker 5: You know, you're sitting right here, you can ask know

596
00:29:34,040 --> 00:29:34,480
Speaker 5: well he does.

597
00:29:34,560 --> 00:29:37,200
Speaker 1: I mean, we couldn't get him in in August. Finally

598
00:29:37,560 --> 00:29:41,400
Speaker 1: here in September, Daniel Tannebaum joins his partner, global anti

599
00:29:41,520 --> 00:29:45,880
Speaker 1: financial Crime Practice leader at Oliver Wyman about the sum

600
00:29:46,960 --> 00:29:51,440
Speaker 1: of all our fears. How do you interpret the media

601
00:29:51,680 --> 00:29:57,440
Speaker 1: frenzy and lots of non experts acting like experts about

602
00:29:57,640 --> 00:29:59,240
Speaker 1: stuff you're expert in.

603
00:30:00,360 --> 00:30:02,920
Speaker 2: I mean, that's not out of sync with how things

604
00:30:02,960 --> 00:30:05,080
Speaker 2: have worked for quite a while anyway, But I mean,

605
00:30:05,200 --> 00:30:08,320
Speaker 2: speaking of tussles, I mean some of the reactions you're

606
00:30:08,360 --> 00:30:11,720
Speaker 2: seeing out of China. I mean, let's remember, China has

607
00:30:11,800 --> 00:30:15,480
Speaker 2: had somewhat of a muted response to years of Trump aggression.

608
00:30:15,640 --> 00:30:19,320
Speaker 2: They never really reacted to that. They've only really begun

609
00:30:19,440 --> 00:30:22,120
Speaker 2: reacting in kind, whether it was paying visits with national

610
00:30:22,160 --> 00:30:25,720
Speaker 2: security officials to a variety of American businesses, beginning to

611
00:30:25,800 --> 00:30:30,480
Speaker 2: ban access to certain commodities, now potentially banning certain devices

612
00:30:30,560 --> 00:30:35,400
Speaker 2: within Chinese government offices. I think we're now finding ourselves

613
00:30:35,520 --> 00:30:38,320
Speaker 2: kind of in a true tit for tat that we

614
00:30:38,400 --> 00:30:40,720
Speaker 2: hadn't seen before. And I think the government is still

615
00:30:40,760 --> 00:30:43,400
Speaker 2: calibrating how to respond, because we've had a lot of

616
00:30:43,480 --> 00:30:45,920
Speaker 2: visits of US government officials to China over the last

617
00:30:46,000 --> 00:30:49,960
Speaker 2: few weeks and months to really try and instill business confidence,

618
00:30:50,000 --> 00:30:52,840
Speaker 2: and moves like what's happened this week do precisely the

619
00:30:52,920 --> 00:30:53,760
Speaker 2: opposite the.

620
00:30:53,880 --> 00:30:58,200
Speaker 1: Tea leaf that I follow is foreign direct investment into China.

621
00:30:58,480 --> 00:31:02,080
Speaker 1: You are hardwired to this debate with the clients of

622
00:31:02,280 --> 00:31:06,120
Speaker 1: Oliver Wyman. Are corporations going to pull back or is

623
00:31:06,160 --> 00:31:09,120
Speaker 1: it a figment of our twenty twenty three imagining?

624
00:31:09,320 --> 00:31:11,200
Speaker 2: Right now? The question I get from clients, that we

625
00:31:11,320 --> 00:31:13,240
Speaker 2: get from clients more often than not, is what is

626
00:31:13,280 --> 00:31:16,000
Speaker 2: everyone else doing with China? So like everyone's looking at

627
00:31:16,000 --> 00:31:18,240
Speaker 2: it exactly to make sure they're not out of sync.

628
00:31:18,800 --> 00:31:21,520
Speaker 2: I don't see any pullback. You've already seen some companies

629
00:31:21,640 --> 00:31:24,800
Speaker 2: begin to and following kind of Janet Yellen's remarks, de

630
00:31:25,040 --> 00:31:27,880
Speaker 2: risk their supply chain, look to diversify. That's really where

631
00:31:27,920 --> 00:31:30,240
Speaker 2: India has a potential opportunity on the heels of the

632
00:31:30,320 --> 00:31:34,000
Speaker 2: G twenty of trying to encourage more investment in manufacturing

633
00:31:34,120 --> 00:31:37,280
Speaker 2: within India, obviously taking advantage of some of the challenges

634
00:31:37,480 --> 00:31:40,160
Speaker 2: in China. But I think most of my clients are

635
00:31:40,200 --> 00:31:43,680
Speaker 2: really looking to understand where they're potentially exposed. They may

636
00:31:43,760 --> 00:31:47,480
Speaker 2: not be deepening any relationships, but they're also not pulling back.

637
00:31:48,120 --> 00:31:50,400
Speaker 5: This is a compelling point. It's something that Lelan Miller

638
00:31:50,440 --> 00:31:52,840
Speaker 5: talked about. You just have to reframe where you see

639
00:31:52,840 --> 00:31:56,520
Speaker 5: the growth opportunity in China. They're not pulling back yet.

640
00:31:57,080 --> 00:31:59,320
Speaker 5: Does this up the ante though? Did you get some

641
00:31:59,400 --> 00:32:02,440
Speaker 5: frantic phone calls this morning from your retreats wherever they

642
00:32:02,520 --> 00:32:05,600
Speaker 5: may be saying, you know, does this change the dial

643
00:32:05,680 --> 00:32:08,880
Speaker 5: if they're willing to go after Apple, which employs millions

644
00:32:09,000 --> 00:32:09,560
Speaker 5: of Chinese.

645
00:32:09,800 --> 00:32:12,280
Speaker 2: I didn't get any calls on this yet today, although

646
00:32:12,440 --> 00:32:15,440
Speaker 2: it's been it's early yet. I certainly got a lot

647
00:32:15,480 --> 00:32:18,200
Speaker 2: of calls on the outbound sifiis executive order and there's

648
00:32:18,200 --> 00:32:19,840
Speaker 2: a lot of questions. There's a lot of there's an

649
00:32:19,840 --> 00:32:23,280
Speaker 2: industry comment period that's been proposed to really look at

650
00:32:23,320 --> 00:32:27,440
Speaker 2: where potential investment into China may be heavily restricted by

651
00:32:27,480 --> 00:32:29,200
Speaker 2: the US. But there's a lot of questions on what

652
00:32:29,320 --> 00:32:32,360
Speaker 2: that looks like. So it's certainly halting some investment, but

653
00:32:32,440 --> 00:32:35,560
Speaker 2: it's not basically forcing a preemptive divestment.

654
00:32:35,920 --> 00:32:37,680
Speaker 5: And just when you talk about tip for tatten in

655
00:32:37,760 --> 00:32:40,160
Speaker 5: foreign investment, this data came out this morning that I

656
00:32:40,200 --> 00:32:42,600
Speaker 5: thought was interesting that the value of completed Chinese foreign

657
00:32:42,640 --> 00:32:45,520
Speaker 5: direct investment transactions in the US was about two and

658
00:32:45,560 --> 00:32:47,360
Speaker 5: a half billion dollars last year. That was less than

659
00:32:47,480 --> 00:32:51,280
Speaker 5: half the amount back in two thousand in nine, so

660
00:32:51,400 --> 00:32:53,360
Speaker 5: this twenty twenty one it was the smallest since two

661
00:32:53,400 --> 00:32:57,240
Speaker 5: thousand and nine. We're looking at already something that's percolating.

662
00:32:57,680 --> 00:32:59,760
Speaker 5: Do you think that the companies that you speak to

663
00:33:00,240 --> 00:33:02,800
Speaker 5: fully appreciate how quickly it's moving right now?

664
00:33:03,160 --> 00:33:06,520
Speaker 2: No, I don't. And again you see actions like what

665
00:33:06,640 --> 00:33:09,560
Speaker 2: happened this week on banning certain technology devices that weren't

666
00:33:09,600 --> 00:33:14,400
Speaker 2: necessarily on anyone's radar. I think right now everyone's trying

667
00:33:14,440 --> 00:33:16,040
Speaker 2: to keep their ear to the ground and try and

668
00:33:16,160 --> 00:33:19,320
Speaker 2: react and assess their kind of risks and exposure as

669
00:33:19,480 --> 00:33:21,840
Speaker 2: rapidly as possible. That's about the best you can do

670
00:33:21,960 --> 00:33:24,640
Speaker 2: at the moment, which is really try and see where

671
00:33:24,760 --> 00:33:27,600
Speaker 2: do I have the biggest potential challenges based on where

672
00:33:27,680 --> 00:33:30,040
Speaker 2: China is going, based on where the US is going

673
00:33:30,080 --> 00:33:32,480
Speaker 2: from a restriction standpoint, and how do we not get

674
00:33:32,520 --> 00:33:34,960
Speaker 2: caught in the middle, which is obviously the last thing

675
00:33:35,000 --> 00:33:37,320
Speaker 2: companies want is to be ground zero for some of

676
00:33:37,400 --> 00:33:39,840
Speaker 2: these issues, like some banks have been over the last

677
00:33:39,880 --> 00:33:43,120
Speaker 2: few years. Frankly to shift to Europe.

678
00:33:43,920 --> 00:33:47,760
Speaker 1: In Ukraine and the war in Ukraine, the Indian relationship

679
00:33:48,440 --> 00:33:54,120
Speaker 1: with Russia was complex, almost mystical. Is India our l

680
00:33:55,240 --> 00:33:59,240
Speaker 1: is India, Ukraine's l or not. Yes.

681
00:34:00,000 --> 00:34:02,800
Speaker 2: I think India is walking an interesting line that'll come

682
00:34:02,840 --> 00:34:06,760
Speaker 2: to a head this weekend. They obviously have a prominent

683
00:34:06,880 --> 00:34:10,920
Speaker 2: role in bricks, but they're obviously hosting G twenty. They're

684
00:34:10,960 --> 00:34:13,759
Speaker 2: trying to increase foreign investment in their country to take

685
00:34:13,800 --> 00:34:16,560
Speaker 2: advantage of some of the challenges that China is seeing.

686
00:34:17,080 --> 00:34:21,440
Speaker 2: And they've been taking advantage of Russia's predicament economically in

687
00:34:21,520 --> 00:34:26,520
Speaker 2: buying cheap oil to confurther their own ambitions. I do think,

688
00:34:26,800 --> 00:34:30,279
Speaker 2: and again, the US has been somewhat reluctant, as have

689
00:34:30,360 --> 00:34:34,320
Speaker 2: its allies, to force countries to choose a side. But

690
00:34:34,400 --> 00:34:36,920
Speaker 2: I do think you're seeing the US push more military

691
00:34:37,000 --> 00:34:40,960
Speaker 2: cooperation with India, which it never had previously. India previously

692
00:34:41,000 --> 00:34:43,840
Speaker 2: bought most of its arms from Russian suppliers. Now the

693
00:34:44,000 --> 00:34:46,960
Speaker 2: US is looking to try and diversify as an enticement

694
00:34:47,040 --> 00:34:50,279
Speaker 2: to bring them really into the warm hug of the

695
00:34:50,400 --> 00:34:52,800
Speaker 2: West's side more actively.

696
00:34:53,080 --> 00:34:56,040
Speaker 5: Is this the reason why we're seeing a solidification with

697
00:34:56,200 --> 00:34:59,920
Speaker 5: the potential meeting between Russia and North Korea and elite

698
00:35:00,200 --> 00:35:02,640
Speaker 5: of those two nations that we're seeing a sort of

699
00:35:02,680 --> 00:35:05,720
Speaker 5: solidification in other areas.

700
00:35:05,840 --> 00:35:08,359
Speaker 2: I mean, you know, Russia turning to North Korea. They're

701
00:35:08,360 --> 00:35:10,920
Speaker 2: not turning to North Korea for advanced weaponry. They're turning

702
00:35:10,960 --> 00:35:13,520
Speaker 2: to it for basic munitions. And I am not a

703
00:35:13,600 --> 00:35:16,080
Speaker 2: military expert, nor will I pretend to be, but they're

704
00:35:16,120 --> 00:35:18,640
Speaker 2: not going to the North Koreans for advanced things. They're

705
00:35:18,640 --> 00:35:21,240
Speaker 2: going for the basics, which is not really a ringing

706
00:35:21,360 --> 00:35:24,120
Speaker 2: endorsement for how well things are going. I do think

707
00:35:24,239 --> 00:35:27,719
Speaker 2: India has an opportunity now to potentially play a much

708
00:35:27,840 --> 00:35:30,520
Speaker 2: larger role in the global economy, but it is walking

709
00:35:30,640 --> 00:35:33,920
Speaker 2: that line. It hasn't actively spoken out against the conflict

710
00:35:34,000 --> 00:35:37,200
Speaker 2: in Ukraine. It's still buying Russian oil, it's still trying

711
00:35:37,239 --> 00:35:39,920
Speaker 2: to benefit from its relationship from the US and be

712
00:35:40,040 --> 00:35:42,600
Speaker 2: the leader of the global South. You can only take

713
00:35:42,680 --> 00:35:44,080
Speaker 2: that so far, Dan.

714
00:35:44,040 --> 00:35:45,759
Speaker 1: Thanks to the brief, don't be a stranger. It's going

715
00:35:45,800 --> 00:35:47,600
Speaker 1: to be a wild September, to say the least, Which

716
00:35:47,640 --> 00:35:52,839
Speaker 1: to Tan Obamas with Oliver Wyman, truly expert on sanctions.

717
00:35:53,280 --> 00:35:57,120
Speaker 1: Subscribe to the Bloomberg Surveillance podcast on Apple, Spotify and

718
00:35:57,280 --> 00:36:01,400
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719
00:36:01,719 --> 00:36:05,200
Speaker 1: starting at seven am Eastern. I'm bloomberg dot com, the

720
00:36:05,360 --> 00:36:09,800
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721
00:36:09,920 --> 00:36:13,960
Speaker 1: can watch us live on Bloomberg Television and always I'm

722
00:36:13,960 --> 00:36:17,920
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723
00:36:18,120 --> 00:36:19,640
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