1 00:00:00,080 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. 2 00:00:11,960 --> 00:00:15,560 Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 3 00:00:15,600 --> 00:00:18,960 Speaker 2: with Paul Sweeney. Join us each day for insight from 4 00:00:18,960 --> 00:00:23,119 Speaker 2: the best in economics, finance, investment, and international relations. You 5 00:00:23,160 --> 00:00:26,520 Speaker 2: can also watch the show live on YouTube. Visit the 6 00:00:26,520 --> 00:00:31,280 Speaker 2: Bloomberg Podcast channel on YouTube to see the show weekday 7 00:00:31,280 --> 00:00:34,320 Speaker 2: mornings from seven to ten am Eastern from our global 8 00:00:34,360 --> 00:00:39,000 Speaker 2: headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 9 00:00:39,360 --> 00:00:42,920 Speaker 2: or anywhere else you listen and always I'm Bloomberg Radio, 10 00:00:43,080 --> 00:00:47,400 Speaker 2: the Bloomberg Terminal, and the Bloomberg Business App. Joining us now, 11 00:00:47,560 --> 00:00:52,960 Speaker 2: Constance Hunter. We're thrilled that she could join this morning. 12 00:00:53,040 --> 00:00:56,720 Speaker 2: A constant thank you. What changed yesterday? Just as simple 13 00:00:56,760 --> 00:01:00,200 Speaker 2: you're writing a single paragraph today to your clients. 14 00:01:00,000 --> 00:01:04,840 Speaker 1: What changed confirmation that inflation is still on its downward trajectory. 15 00:01:04,880 --> 00:01:08,280 Speaker 1: That confidence was shaken about inflation when you got that 16 00:01:08,400 --> 00:01:11,000 Speaker 1: data for the first three months of the year yesterday. 17 00:01:11,040 --> 00:01:14,640 Speaker 1: It confirmed finally, oh, we are is starting to soften. 18 00:01:15,400 --> 00:01:18,880 Speaker 1: Rent prices are starting to soften. It was a print 19 00:01:18,920 --> 00:01:21,680 Speaker 1: that showed we are moving in the right direction and 20 00:01:22,040 --> 00:01:23,440 Speaker 1: we are going to get rate cuts. 21 00:01:23,480 --> 00:01:25,760 Speaker 2: This year. You and Julia Cornello fight like cats and 22 00:01:25,760 --> 00:01:29,039 Speaker 2: dogs at micro policy perspectives. But what's the distinction of 23 00:01:29,080 --> 00:01:31,319 Speaker 2: your debate when you and doctor cornetto speak. 24 00:01:32,000 --> 00:01:34,720 Speaker 1: So what we're debating is which comes first? 25 00:01:34,880 --> 00:01:35,080 Speaker 3: Right? 26 00:01:35,280 --> 00:01:39,679 Speaker 1: Does inflation allow the Fed to cut rates because they 27 00:01:39,800 --> 00:01:42,559 Speaker 1: see that trajectory to two percent clearly and they cut 28 00:01:42,560 --> 00:01:45,560 Speaker 1: in time? Or are they behind the curve? Are we 29 00:01:45,640 --> 00:01:49,640 Speaker 1: seeing softening in the labor market that ends up overtaking 30 00:01:49,680 --> 00:01:52,680 Speaker 1: the story whereby they end up being behind the curve 31 00:01:52,720 --> 00:01:56,360 Speaker 1: and that has really significant impact for whether that rate 32 00:01:56,440 --> 00:02:00,480 Speaker 1: cut continues to fuelable market or not. Whether we see 33 00:02:00,520 --> 00:02:03,120 Speaker 1: with on the underlying economy the shape of the curve, 34 00:02:04,000 --> 00:02:06,480 Speaker 1: two very different outcomes if they're before or behind the curve. 35 00:02:06,560 --> 00:02:09,200 Speaker 2: Well, as an article in the Jersey Real Estate I 36 00:02:09,280 --> 00:02:12,919 Speaker 2: understand there's dynamics with mortgages, but the prices are up 37 00:02:13,000 --> 00:02:14,000 Speaker 2: like double digits. 38 00:02:14,160 --> 00:02:17,639 Speaker 4: Yeah, I mean we're the slowdown stuff's moving in Jersey. 39 00:02:17,680 --> 00:02:18,240 Speaker 4: That's for short. 40 00:02:18,360 --> 00:02:21,160 Speaker 5: What if you think whatever comes on the market constances. 41 00:02:21,600 --> 00:02:25,560 Speaker 5: There's a lot of academics and market practitioners at that time, 42 00:02:25,600 --> 00:02:28,120 Speaker 5: and I talked to that say the Fed's already behind 43 00:02:28,400 --> 00:02:30,360 Speaker 5: Then if you look at the real time data inflation 44 00:02:30,440 --> 00:02:32,880 Speaker 5: is already done. They should be cutting. Now what do 45 00:02:32,919 --> 00:02:33,919 Speaker 5: you say to those folks. 46 00:02:34,080 --> 00:02:36,680 Speaker 3: I think they have a very good point. They have 47 00:02:36,720 --> 00:02:37,440 Speaker 3: a very good point. 48 00:02:37,520 --> 00:02:39,720 Speaker 1: The problem is, I mean, I was at forecasters club 49 00:02:39,800 --> 00:02:42,480 Speaker 1: yesterday and you were a. 50 00:02:42,400 --> 00:02:44,200 Speaker 4: Club for forecasters. Yes, what do you guys? 51 00:02:44,240 --> 00:02:44,760 Speaker 2: Once again? 52 00:02:46,000 --> 00:02:48,800 Speaker 3: And Wong is the representatives. 53 00:02:52,320 --> 00:02:54,920 Speaker 2: And keep it up constance. 54 00:02:55,760 --> 00:02:59,040 Speaker 1: In any case, we you would be surprised how many 55 00:02:59,040 --> 00:03:00,800 Speaker 1: people thought that the Fed a need to cut. That 56 00:03:00,800 --> 00:03:03,880 Speaker 1: the economy is strong, and it is this K shaped 57 00:03:03,919 --> 00:03:07,160 Speaker 1: economy again, which makes it very hard to interpret. Right, 58 00:03:07,200 --> 00:03:09,320 Speaker 1: If you're in the top part of the K, you think, Wow, 59 00:03:09,320 --> 00:03:11,280 Speaker 1: everything's great, but my stocks. 60 00:03:10,880 --> 00:03:13,080 Speaker 3: Are up, I'm getting interest on my savings and. 61 00:03:13,600 --> 00:03:16,720 Speaker 1: With no risk, the economy is doing really well, my 62 00:03:16,760 --> 00:03:18,720 Speaker 1: house prices up. But if you're in that bottom part 63 00:03:18,720 --> 00:03:21,280 Speaker 1: of the K, you're like, wow, my insurance, my car 64 00:03:21,320 --> 00:03:23,200 Speaker 1: insurance just went up and I still need my car 65 00:03:23,240 --> 00:03:25,239 Speaker 1: to drive to work, and I don't have the bandwidth 66 00:03:25,240 --> 00:03:26,800 Speaker 1: to figure out how to push back on this or 67 00:03:26,840 --> 00:03:29,560 Speaker 1: shop for a different insurance carrier that's going to give 68 00:03:29,600 --> 00:03:31,560 Speaker 1: me the same coverage at a better rate. Right, You're 69 00:03:31,639 --> 00:03:33,359 Speaker 1: really under pressure if you're at the bottom half of 70 00:03:33,360 --> 00:03:34,880 Speaker 1: that K. That's what we saw in the New York 71 00:03:34,920 --> 00:03:37,680 Speaker 1: Fed data that came out with regard to creeping up 72 00:03:37,720 --> 00:03:40,600 Speaker 1: with delinquencies on credit cards, creeping up with delinquencies on 73 00:03:40,640 --> 00:03:44,560 Speaker 1: auto loans. Mortgages are still low. That's obviously a very 74 00:03:44,560 --> 00:03:45,000 Speaker 1: good thing. 75 00:03:45,080 --> 00:03:48,320 Speaker 5: But so we got Walmart today put out some numbers 76 00:03:48,320 --> 00:03:50,560 Speaker 5: which were a little bit better and expected, particularly on 77 00:03:50,560 --> 00:03:54,200 Speaker 5: the top line. I always look at Walmart, it just 78 00:03:54,200 --> 00:03:56,360 Speaker 5: says the neophyte is like a pretty good read on 79 00:03:56,400 --> 00:04:00,400 Speaker 5: the consumer, but the consumer really is challenged, and it's 80 00:04:00,400 --> 00:04:01,920 Speaker 5: that K shaped recovery here. 81 00:04:02,840 --> 00:04:06,160 Speaker 4: What happened? There's nothing really the Fed can do there 82 00:04:06,200 --> 00:04:06,480 Speaker 4: can it? 83 00:04:07,000 --> 00:04:08,480 Speaker 3: There is nothing the Fed can do there. 84 00:04:08,600 --> 00:04:11,480 Speaker 1: I mean, well, I shouldn't say, but I shouldn't say 85 00:04:11,520 --> 00:04:14,520 Speaker 1: that lower lower rate. So we have an inverted yield curve, 86 00:04:14,560 --> 00:04:18,120 Speaker 1: which is obviously very problematic for banks, right, and banks 87 00:04:18,440 --> 00:04:20,600 Speaker 1: that's why we see such high spreads over ten years 88 00:04:20,640 --> 00:04:25,320 Speaker 1: on mortgages. Banks aren't is willing to lend, and so 89 00:04:25,680 --> 00:04:28,080 Speaker 1: if we had a positive sloping yell curve, ergo the 90 00:04:28,080 --> 00:04:30,960 Speaker 1: front part of the curve was lower, right, we would 91 00:04:30,960 --> 00:04:34,120 Speaker 1: see more willingness to lend. We'd see easier monetary conditions 92 00:04:34,120 --> 00:04:36,680 Speaker 1: from Main Street. What we see is easy monetary kitchen 93 00:04:36,800 --> 00:04:37,719 Speaker 1: editions for Wall Street. 94 00:04:37,760 --> 00:04:38,480 Speaker 3: They're two different things. 95 00:04:38,839 --> 00:04:42,159 Speaker 2: Sinson say, Ergo is still she started working with Julia Canado. 96 00:04:42,279 --> 00:04:45,719 Speaker 2: It's changed everything. It okay, Atlanta. GDP now is four 97 00:04:45,720 --> 00:04:49,480 Speaker 2: point two percent real GDP, which we know is a 98 00:04:49,520 --> 00:04:52,039 Speaker 2: fiction and through the quarter will come down. It came 99 00:04:52,080 --> 00:04:54,839 Speaker 2: down to three point eight. Where's that statistic can a 100 00:04:54,920 --> 00:04:58,320 Speaker 2: migrate down to? Is if we staggered at June thirtieth. 101 00:04:58,400 --> 00:05:00,440 Speaker 1: Yeah, we're looking at something around a two point two 102 00:05:00,680 --> 00:05:02,480 Speaker 1: two point four percent most like. 103 00:05:03,600 --> 00:05:04,120 Speaker 2: We call that. 104 00:05:04,240 --> 00:05:07,240 Speaker 1: Okay, that's oh, it's I mean, that's that's if you 105 00:05:07,360 --> 00:05:10,279 Speaker 1: think potential GDP is one point eight or two, that's 106 00:05:10,320 --> 00:05:13,080 Speaker 1: a little better than okay, right, if you compound it 107 00:05:13,279 --> 00:05:15,840 Speaker 1: two tenths of a percent, better than better than trend 108 00:05:16,400 --> 00:05:18,719 Speaker 1: for you know, months on end or quarters on end, 109 00:05:18,800 --> 00:05:19,200 Speaker 1: that is a go. 110 00:05:19,640 --> 00:05:23,200 Speaker 2: All the gains with the stimulus and the financialization of 111 00:05:23,240 --> 00:05:26,600 Speaker 2: our system, are all the gains going to the halves. 112 00:05:28,279 --> 00:05:29,520 Speaker 3: I don't know that that's the case. 113 00:05:29,560 --> 00:05:31,720 Speaker 1: I think a lot of what we're seeing with the 114 00:05:32,880 --> 00:05:37,440 Speaker 1: Inflation Reduction Act, the Chips Act, the infrastructure is jobs 115 00:05:37,560 --> 00:05:42,000 Speaker 1: to middle income people, we're seeing. We're seeing good jobs 116 00:05:42,040 --> 00:05:44,640 Speaker 1: going out into the economy that are that are important. 117 00:05:44,680 --> 00:05:46,520 Speaker 1: So I wouldn't say it's all going to the halves. 118 00:05:46,880 --> 00:05:50,279 Speaker 5: How about on that labor market still below four percent 119 00:05:50,760 --> 00:05:54,480 Speaker 5: unemployment rate, I mean, I don't is a labor market 120 00:05:54,480 --> 00:05:56,919 Speaker 5: is strongest seems on that headline kind of number. 121 00:05:57,279 --> 00:06:00,760 Speaker 1: So this is where we again have some concerns. So 122 00:06:00,760 --> 00:06:05,359 Speaker 1: we do webscraping of earnings calls, and we monitor for 123 00:06:05,480 --> 00:06:08,840 Speaker 1: intention to hire and intention to fire. And so what 124 00:06:08,880 --> 00:06:12,400 Speaker 1: we're seeing is less labor hoarding. Right, Firms don't feel 125 00:06:12,400 --> 00:06:13,839 Speaker 1: the need to labor hoard anymore. 126 00:06:13,839 --> 00:06:14,440 Speaker 3: They've deployed. 127 00:06:14,560 --> 00:06:16,040 Speaker 4: I never heard of before the last few years. 128 00:06:16,040 --> 00:06:17,680 Speaker 1: But by the way, well it wasn't a thing before 129 00:06:17,680 --> 00:06:19,839 Speaker 1: the last few years. It was it was because of 130 00:06:19,880 --> 00:06:24,039 Speaker 1: the pandemic where where companies couldn't get workers. That once 131 00:06:24,120 --> 00:06:25,920 Speaker 1: things softened up a little, they're like, well, I don't 132 00:06:25,920 --> 00:06:28,320 Speaker 1: want to lose it's hard to hire, it's expensive, it's 133 00:06:28,360 --> 00:06:31,960 Speaker 1: time consuming. Right, Better to reduce people's hours and keep 134 00:06:32,000 --> 00:06:34,320 Speaker 1: them on the payroll for when you're going to need 135 00:06:34,360 --> 00:06:35,080 Speaker 1: them later than to. 136 00:06:35,040 --> 00:06:35,920 Speaker 3: Go ahead and fire them. 137 00:06:36,000 --> 00:06:38,400 Speaker 1: So that's we had labor hoarding as a reaction to 138 00:06:38,480 --> 00:06:39,120 Speaker 1: the pandemic. 139 00:06:39,240 --> 00:06:40,640 Speaker 3: Constot but that's ending. 140 00:06:40,560 --> 00:06:44,560 Speaker 2: Yep, Constans, thank you, Constance Hunter. With US macro policy 141 00:06:45,360 --> 00:06:57,880 Speaker 2: perspective is we're going to do something now focus on oil, 142 00:06:57,920 --> 00:07:00,840 Speaker 2: which we really know usually we're talking copper now, coppers, 143 00:07:00,960 --> 00:07:05,360 Speaker 2: coppers of oil. Paul Sankee joins now just absolutely definitive 144 00:07:06,120 --> 00:07:10,120 Speaker 2: in this linkage of oil economics into actually oil stocks. 145 00:07:10,120 --> 00:07:13,160 Speaker 2: We'll try to cover all this yere right now, Paul, 146 00:07:13,280 --> 00:07:15,360 Speaker 2: just to get to the OPEC meeting? Are you going 147 00:07:15,400 --> 00:07:16,840 Speaker 2: to attend? You sometimes you do? 148 00:07:18,440 --> 00:07:21,320 Speaker 6: You know this time it might go virtual actually, Tom 149 00:07:21,440 --> 00:07:26,320 Speaker 6: so okay, and I wasn't prepared to commit to going 150 00:07:26,360 --> 00:07:28,920 Speaker 6: even though it's the European Cup final soccer that night, 151 00:07:29,160 --> 00:07:30,760 Speaker 6: June the first, it's also a Saturday. 152 00:07:30,880 --> 00:07:35,520 Speaker 2: Okay, it's complex. What's the power of opek now, you 153 00:07:35,520 --> 00:07:38,320 Speaker 2: know all of us have a stereotype of two oil 154 00:07:38,400 --> 00:07:40,840 Speaker 2: crises in the seventies or this or that or the other. 155 00:07:41,320 --> 00:07:44,080 Speaker 2: What's the power of opek right now? 156 00:07:45,360 --> 00:07:47,760 Speaker 6: Well, we wrote a new theory about this which most 157 00:07:47,760 --> 00:07:51,000 Speaker 6: people intuitively know, which is what really matters is not 158 00:07:51,080 --> 00:07:53,720 Speaker 6: the call on OPEK, which is how people have calculated 159 00:07:53,760 --> 00:07:56,440 Speaker 6: the oil market balance for years. We don't think that 160 00:07:56,480 --> 00:07:59,640 Speaker 6: matters anymore as much at all as you're implying. We 161 00:07:59,800 --> 00:08:02,960 Speaker 6: look the call on us unconventional because that's really the 162 00:08:03,040 --> 00:08:07,200 Speaker 6: truly marginal short cycle oil. Now, of course, on top 163 00:08:07,240 --> 00:08:10,120 Speaker 6: of that, you have the Saudi's willingness. We should say, 164 00:08:10,200 --> 00:08:12,720 Speaker 6: everybody kind of has the ability to shut off production, 165 00:08:12,800 --> 00:08:16,200 Speaker 6: but Saudi is willing to shut off production in order to. 166 00:08:16,160 --> 00:08:17,080 Speaker 7: Balance the market. 167 00:08:17,160 --> 00:08:21,120 Speaker 6: And OPEK is really a construct for the Saudis to 168 00:08:21,160 --> 00:08:24,080 Speaker 6: feel better about having to carry the market, you know, 169 00:08:24,120 --> 00:08:27,200 Speaker 6: So what they're trying to do is corral everyone else, 170 00:08:27,280 --> 00:08:31,040 Speaker 6: even though in some cases, and the obvious example is Russia, 171 00:08:31,880 --> 00:08:33,840 Speaker 6: you know, what they say is more or less meaningless 172 00:08:33,920 --> 00:08:36,760 Speaker 6: is that you know, I won't go further than that, 173 00:08:36,920 --> 00:08:40,360 Speaker 6: but you know, it's not reliable what they say essentially, 174 00:08:40,360 --> 00:08:44,960 Speaker 6: which must be very frustrating to the Saudis, But essentially 175 00:08:44,960 --> 00:08:48,720 Speaker 6: it is a Saudi construct in order for them to 176 00:08:48,760 --> 00:08:51,240 Speaker 6: feel better about holding production off the market. 177 00:08:51,559 --> 00:08:54,400 Speaker 4: Paul, what is driving the oil price these days? Is 178 00:08:54,400 --> 00:08:55,720 Speaker 4: it supply? Is a demand? 179 00:08:55,960 --> 00:08:58,480 Speaker 5: Does one end of that equation kind of have a 180 00:08:58,520 --> 00:08:59,760 Speaker 5: little bit more sway these days? 181 00:09:01,000 --> 00:09:02,880 Speaker 6: Well, Tom and I have been talking for twenty years. 182 00:09:02,920 --> 00:09:05,080 Speaker 6: In fact, I'm surprised he didn't do his usual thing 183 00:09:05,120 --> 00:09:07,200 Speaker 6: of hammering me for a terrible call that me and 184 00:09:07,200 --> 00:09:08,360 Speaker 6: Adam Siminski. 185 00:09:08,000 --> 00:09:12,080 Speaker 7: Made about Russia. Think it was the year like two thousand. 186 00:09:12,080 --> 00:09:15,800 Speaker 2: It was so bad that car was so bad aged. 187 00:09:16,760 --> 00:09:19,360 Speaker 2: You know, I'm sorry bresnev aged when you made that car. 188 00:09:19,480 --> 00:09:22,480 Speaker 6: Continue to Conductor, saying, now, I think the big thing 189 00:09:22,520 --> 00:09:24,840 Speaker 6: which is really remarkable to me in the context of 190 00:09:24,880 --> 00:09:28,319 Speaker 6: that history, is that we're at all time high oil 191 00:09:28,360 --> 00:09:29,040 Speaker 6: market demand. 192 00:09:29,120 --> 00:09:30,640 Speaker 7: You know, so demand is an all time high. 193 00:09:30,679 --> 00:09:32,640 Speaker 6: And if you'd asked me, do I think oil demand 194 00:09:32,640 --> 00:09:34,600 Speaker 6: will be at one hundred and two million barrels a day? 195 00:09:35,120 --> 00:09:36,280 Speaker 7: You know, one point what is it? 196 00:09:36,320 --> 00:09:40,320 Speaker 6: One thy two hundred barrels a second in twenty twenty four, 197 00:09:40,360 --> 00:09:42,400 Speaker 6: I would have thought you were crazy, But here we are. 198 00:09:43,360 --> 00:09:45,840 Speaker 6: And that's so the demand side is truly remarkable. Now, 199 00:09:45,880 --> 00:09:47,800 Speaker 6: of course, it's all about what happens at the margin, 200 00:09:47,840 --> 00:09:51,560 Speaker 6: and demand is clearly weakening. So demand is good, but 201 00:09:51,760 --> 00:09:55,880 Speaker 6: not not growing strongly at a record high. What's additionally 202 00:09:55,920 --> 00:09:58,840 Speaker 6: absolutely remarkable. And twenty years ago we would never have 203 00:09:58,880 --> 00:10:02,080 Speaker 6: guessed this was that you'd too much supply, and so 204 00:10:02,200 --> 00:10:05,000 Speaker 6: as you know, there's two arguably four million barrels a 205 00:10:05,040 --> 00:10:08,319 Speaker 6: day of spec capacity and OPEK, and of course we 206 00:10:08,400 --> 00:10:11,240 Speaker 6: have the US as the dominant energy producer in the world, 207 00:10:11,280 --> 00:10:14,760 Speaker 6: and you know, people still don't understand what an enormous 208 00:10:14,760 --> 00:10:18,520 Speaker 6: deal that has been for everything that happens in the world, geopolitics, 209 00:10:18,600 --> 00:10:21,839 Speaker 6: the dollar, you name it. The US performance here in 210 00:10:22,280 --> 00:10:25,440 Speaker 6: order gas has been truly stunning. And the good news 211 00:10:25,600 --> 00:10:29,200 Speaker 6: is that the companies have really improved themselves. They really 212 00:10:29,200 --> 00:10:31,720 Speaker 6: are strong. I don't think i've seen Exon in better 213 00:10:31,760 --> 00:10:34,200 Speaker 6: shape in that twenty year period. 214 00:10:34,240 --> 00:10:36,680 Speaker 7: They really are doing a remarkable job and they're not allowed. 215 00:10:36,760 --> 00:10:40,240 Speaker 7: You know, a company like Karnco Chevron really good stuff. 216 00:10:40,520 --> 00:10:43,560 Speaker 5: So in that context, Paul, how does the US and 217 00:10:43,600 --> 00:10:45,600 Speaker 5: as big producers you were just mentioning in the US, 218 00:10:46,120 --> 00:10:50,000 Speaker 5: what's the interplay between them and OPEK in terms of 219 00:10:50,000 --> 00:10:51,800 Speaker 5: shaping global oil supply. 220 00:10:53,960 --> 00:10:56,640 Speaker 6: Well, you know, it's been controversial because obviously you saw 221 00:10:56,679 --> 00:11:00,440 Speaker 6: that the FTC wouldn't allow Scott Sheffield the board of 222 00:11:00,480 --> 00:11:04,720 Speaker 6: Excellon because of concerns about that, and I think frankly 223 00:11:04,760 --> 00:11:08,240 Speaker 6: they were simply naive the major US CEOs at times. 224 00:11:08,760 --> 00:11:10,839 Speaker 6: They didn't you know, we had covered refining for twenty 225 00:11:10,920 --> 00:11:13,199 Speaker 6: years and I would host refining managements, they wouldn't be 226 00:11:13,240 --> 00:11:15,800 Speaker 6: in the same room as each other because they didn't 227 00:11:15,800 --> 00:11:20,080 Speaker 6: want to be accused of anything by inappropriate in terms 228 00:11:20,080 --> 00:11:22,839 Speaker 6: of managing the market. But of course the EMP guys 229 00:11:22,840 --> 00:11:26,840 Speaker 6: had never had any market power up to the unconventional revolution, 230 00:11:27,040 --> 00:11:30,160 Speaker 6: and when we got to too much supply, they began 231 00:11:30,240 --> 00:11:32,640 Speaker 6: to talk a lot too opek and that at a 232 00:11:32,640 --> 00:11:35,400 Speaker 6: headline level it was actually quite innocent. But at a 233 00:11:35,440 --> 00:11:38,040 Speaker 6: headline level, at an FTC level, it looks pretty bad. 234 00:11:38,040 --> 00:11:40,400 Speaker 6: To be honest with you, it just doesn't look good. 235 00:11:41,080 --> 00:11:43,120 Speaker 6: And so there, you know, there has been some worries 236 00:11:43,160 --> 00:11:46,760 Speaker 6: about that. But broadly speaking, the key issue is the 237 00:11:46,800 --> 00:11:52,199 Speaker 6: behavior of the marginal US producer who is showing capital discipline, 238 00:11:52,240 --> 00:11:55,200 Speaker 6: and so US production growth has slowed and may even 239 00:11:55,280 --> 00:11:57,800 Speaker 6: go into decline depending on where the oil price is. 240 00:11:58,240 --> 00:12:01,840 Speaker 6: And we think that's because Saudi can't cut any more. Essentially, 241 00:12:02,559 --> 00:12:06,480 Speaker 6: we think that demand weakness will ultimately cause you know, 242 00:12:06,800 --> 00:12:09,920 Speaker 6: prices that force US produced to produce less. 243 00:12:09,960 --> 00:12:12,880 Speaker 7: And that's to me is the dynamic or hence our 244 00:12:12,920 --> 00:12:13,680 Speaker 7: called CUSP. 245 00:12:14,040 --> 00:12:17,319 Speaker 6: The call on US unconventional is actually the important measure here, 246 00:12:17,400 --> 00:12:18,040 Speaker 6: not the call. 247 00:12:17,960 --> 00:12:21,680 Speaker 2: On open is big oil in America off your Exxon 248 00:12:21,880 --> 00:12:26,079 Speaker 2: comments in the moonshot from the pandemic in sank I'm 249 00:12:26,120 --> 00:12:28,480 Speaker 2: looking at Chevron right now. I got the same attribute 250 00:12:28,520 --> 00:12:31,720 Speaker 2: pretty much. But is it a new big oil where 251 00:12:31,760 --> 00:12:36,880 Speaker 2: you're looking at double digit returns versus single digit mediocrity. 252 00:12:37,559 --> 00:12:39,040 Speaker 7: Yeah, No, that's exactly right, Tom. 253 00:12:39,040 --> 00:12:41,240 Speaker 6: They're in the double digits and we always thought they 254 00:12:41,240 --> 00:12:43,640 Speaker 6: could get there with capital discipline. Of course, you need 255 00:12:43,720 --> 00:12:47,200 Speaker 6: oil above seventy. We're at eighty, so this is a 256 00:12:47,200 --> 00:12:49,959 Speaker 6: good environment. The other thing that we're highlighting is that actually, 257 00:12:50,120 --> 00:12:52,600 Speaker 6: believe it or not, there's lower oil volatility. I know 258 00:12:52,640 --> 00:12:55,319 Speaker 6: it doesn't sound like it, but actually oil if volatility 259 00:12:55,400 --> 00:12:57,640 Speaker 6: is falling, and that's very good for the multiples of 260 00:12:57,679 --> 00:13:02,320 Speaker 6: these stocks, because you know, get very obviously get very 261 00:13:02,360 --> 00:13:05,240 Speaker 6: nervous about a highly volatile commodity and whether or not. 262 00:13:05,200 --> 00:13:06,160 Speaker 7: To buy the equities. 263 00:13:06,720 --> 00:13:08,960 Speaker 6: What you'll notice is that we've held what we thought 264 00:13:09,000 --> 00:13:12,760 Speaker 6: would be the range, which is essentially seventy WTI seventy 265 00:13:12,760 --> 00:13:15,760 Speaker 6: five Brandt to eighty five WI ninety Brent. 266 00:13:16,120 --> 00:13:17,920 Speaker 7: And we've held that range quite well. 267 00:13:19,000 --> 00:13:20,960 Speaker 6: Very hopeful that we will continue to hold it, but 268 00:13:21,040 --> 00:13:23,599 Speaker 6: of course that's dependent on this OPEC meeting that we 269 00:13:23,720 --> 00:13:27,320 Speaker 6: started with because we do need TAUDI to keep holding 270 00:13:27,520 --> 00:13:29,520 Speaker 6: at least a million barrels a day off the market 271 00:13:29,600 --> 00:13:32,400 Speaker 6: in order to keep it balanced. In the past, as 272 00:13:32,440 --> 00:13:35,760 Speaker 6: you know, COVID particularly, we saw a market share or 273 00:13:35,800 --> 00:13:38,880 Speaker 6: amongst opek and that could be you know, that could 274 00:13:38,880 --> 00:13:41,160 Speaker 6: be majorly volatile for all, which would be volatile to 275 00:13:41,240 --> 00:13:44,319 Speaker 6: the downside if we get into that. But nobody's expecting 276 00:13:44,320 --> 00:13:47,679 Speaker 6: that right now. The consensuses that will get a rollover 277 00:13:47,760 --> 00:13:49,760 Speaker 6: in June first, and they may just do the meeting 278 00:13:50,640 --> 00:13:53,080 Speaker 6: virtually in order to achieve that. They often do it 279 00:13:53,120 --> 00:13:56,280 Speaker 6: if they want to avoid the press, and I think 280 00:13:56,280 --> 00:13:57,200 Speaker 6: that's what will happen. 281 00:13:57,559 --> 00:13:59,920 Speaker 7: If it doesn't, I don't think they can come more. 282 00:14:00,600 --> 00:14:04,160 Speaker 6: The problem with the opening is there's only really downside here. 283 00:14:04,160 --> 00:14:09,640 Speaker 2: Paul Xoi Paul Sweeney xoi off the pandemic gloom up 284 00:14:09,679 --> 00:14:13,840 Speaker 2: three hundred percent per year. That's a sanky move. 285 00:14:14,000 --> 00:14:15,120 Speaker 4: That was the same movie. 286 00:14:15,440 --> 00:14:20,240 Speaker 5: Hey, Paul, if I'm a big global oil energy company, 287 00:14:20,720 --> 00:14:23,320 Speaker 5: am I still out there looking for oil out in 288 00:14:23,360 --> 00:14:24,960 Speaker 5: the ocean and or out in the middle of nowhere? 289 00:14:25,080 --> 00:14:26,960 Speaker 4: Am I just going to go buy a company. 290 00:14:27,840 --> 00:14:29,840 Speaker 7: You're looking because we you know incredibly. 291 00:14:29,880 --> 00:14:31,720 Speaker 6: This is the other thing about the supply side is 292 00:14:31,760 --> 00:14:34,880 Speaker 6: it's not just about unlocking the Permian. What we've seen here, 293 00:14:34,920 --> 00:14:37,760 Speaker 6: as you know, is Guyana has been a remarkable discovery 294 00:14:37,760 --> 00:14:39,920 Speaker 6: and we didn't think, you know, the peak oil argument 295 00:14:39,960 --> 00:14:42,240 Speaker 6: of the two thousands that Tom and I used to 296 00:14:42,400 --> 00:14:46,440 Speaker 6: talk about has really just become completely discredited. And Guyana's huge. 297 00:14:46,440 --> 00:14:49,360 Speaker 6: But then if you look at Namibia, Namibia looks bigger. 298 00:14:49,400 --> 00:14:51,720 Speaker 6: And if you look at a company like Portugal's Galp 299 00:14:51,840 --> 00:14:55,840 Speaker 6: or Totar or Shell, they're all they're finding another Guyana 300 00:14:55,960 --> 00:14:59,040 Speaker 6: might even be bigger than Guyana offshare and Namibia. So 301 00:14:59,120 --> 00:15:03,040 Speaker 6: there's definitely the resurgence of off short activity because the 302 00:15:03,120 --> 00:15:06,760 Speaker 6: Permian is getting more marginal in terms of its economics. 303 00:15:06,840 --> 00:15:08,680 Speaker 6: You've drilled the good stuff and you're having to work 304 00:15:08,720 --> 00:15:11,320 Speaker 6: through the benches over the next ten to fifteen years. 305 00:15:11,600 --> 00:15:13,520 Speaker 2: Paul, I got too many more questions. Let's do this 306 00:15:13,560 --> 00:15:17,040 Speaker 2: again soon, Paul sank you of course, legendary on oil. 307 00:15:17,320 --> 00:15:19,960 Speaker 2: Look for him for the OPEC meeting. Was it June first? 308 00:15:20,240 --> 00:15:25,920 Speaker 4: June first and first, Yeah, we. 309 00:15:25,960 --> 00:15:27,880 Speaker 2: Got lots of anchathon with us with that Creed. This 310 00:15:27,920 --> 00:15:30,880 Speaker 2: is the most important interview of the day. To rationalize 311 00:15:30,880 --> 00:15:33,960 Speaker 2: a bull market, I'm sorry Atrathon is more important than 312 00:15:33,960 --> 00:15:37,440 Speaker 2: a diamond. Good morning Joe and the team over at 313 00:15:37,480 --> 00:15:41,880 Speaker 2: JP Moworgan Loatchman here with a really quick thing on 314 00:15:41,920 --> 00:15:45,800 Speaker 2: our economic cycles. Do the economic cycles, Loatchmen, that you 315 00:15:46,000 --> 00:15:49,640 Speaker 2: look at do they justify a third leg of a 316 00:15:49,680 --> 00:15:50,280 Speaker 2: bull market? 317 00:15:51,040 --> 00:15:51,600 Speaker 4: Short term? 318 00:15:51,640 --> 00:15:54,480 Speaker 8: Sure? And so let's cyclical is looking at a couple 319 00:15:54,480 --> 00:15:58,600 Speaker 8: of quarters. It's not looking out forever. Structurally, plenty of 320 00:15:58,640 --> 00:16:01,840 Speaker 8: things to think about and to give you pause in 321 00:16:01,880 --> 00:16:05,040 Speaker 8: the way things are going. But cyclically, I think we 322 00:16:05,040 --> 00:16:07,480 Speaker 8: don't want to miss the forest for the trees. We 323 00:16:07,480 --> 00:16:11,080 Speaker 8: were in the boonies, right, We had a really bad 324 00:16:12,160 --> 00:16:16,840 Speaker 8: global industrial downturn, a pandemic and all that. But even 325 00:16:16,880 --> 00:16:19,440 Speaker 8: after that, it still kept going. It was hitting Europe, 326 00:16:19,520 --> 00:16:22,200 Speaker 8: it was hitting China. Remember the beginning of twenty three, 327 00:16:22,200 --> 00:16:24,120 Speaker 8: everybody thought China was going to come out the global 328 00:16:24,160 --> 00:16:26,680 Speaker 8: industrial left term was going to be here, YadA, YadA, YadA. 329 00:16:26,720 --> 00:16:27,360 Speaker 4: Never happened. 330 00:16:28,040 --> 00:16:31,600 Speaker 8: Now at the end of twenty twenty three, our global 331 00:16:31,640 --> 00:16:36,320 Speaker 8: industrial stuff, really the forward looking stuff, started lifting nicely. 332 00:16:36,760 --> 00:16:39,760 Speaker 8: And that's a nice backdrop for Europe. It's a nice 333 00:16:39,800 --> 00:16:44,360 Speaker 8: backdrop for China. It's a nice backdrop for goods demand. 334 00:16:44,560 --> 00:16:49,080 Speaker 8: And I hear all of the happy talk around inflation. Okay, 335 00:16:49,600 --> 00:16:52,520 Speaker 8: the rent stuff is not right, the insurance stuff is 336 00:16:52,560 --> 00:16:52,840 Speaker 8: not right. 337 00:16:52,840 --> 00:16:53,600 Speaker 2: It's going to come down. 338 00:16:53,800 --> 00:16:59,080 Speaker 8: Everybody assumes, presumes that goods inflation is no problem. And 339 00:16:59,200 --> 00:17:01,640 Speaker 8: what we're seeing is if global industrial growth is turning up, 340 00:17:01,680 --> 00:17:05,280 Speaker 8: and it is, that puts a bid on good. 341 00:17:05,359 --> 00:17:07,480 Speaker 2: Paul, the chart here. We can't show it on radio. 342 00:17:07,520 --> 00:17:08,960 Speaker 2: It doesn't We can show it on YouTube, but it 343 00:17:09,000 --> 00:17:12,399 Speaker 2: doesn't work on radio. A lotman has a chart of 344 00:17:12,480 --> 00:17:16,480 Speaker 2: the five year ahead GDP forecast. Yeah, and the only 345 00:17:16,520 --> 00:17:19,040 Speaker 2: thing moving up is India in the United States, Paul. 346 00:17:19,320 --> 00:17:23,200 Speaker 2: Everything else is stable, Japan's resilient. That but it's it's 347 00:17:23,200 --> 00:17:25,520 Speaker 2: this US exceptionalism. 348 00:17:24,720 --> 00:17:25,639 Speaker 4: That's where I wanted to go. 349 00:17:26,520 --> 00:17:26,720 Speaker 7: Paul. 350 00:17:26,760 --> 00:17:31,200 Speaker 2: He's breaking a rule coming in here with highlighted research notes. 351 00:17:31,680 --> 00:17:33,840 Speaker 2: Can you can you explain to him. 352 00:17:34,080 --> 00:17:36,160 Speaker 9: The lines of moving Paul, put that up in front 353 00:17:36,160 --> 00:17:37,280 Speaker 9: of the camera for YouTube. 354 00:17:37,480 --> 00:17:43,000 Speaker 2: We don't allow this, Okay, pink highlighters work. The banned continued. 355 00:17:43,160 --> 00:17:47,639 Speaker 5: So about that US exceptionalism, how unusual is that for 356 00:17:47,720 --> 00:17:50,560 Speaker 5: the US economy to generally be doing well three four 357 00:17:50,600 --> 00:17:53,960 Speaker 5: percent whatever? It is versus your particularly Germany boy, and 358 00:17:54,000 --> 00:17:55,639 Speaker 5: then and then China. 359 00:17:55,760 --> 00:17:59,399 Speaker 8: How is that unusual to have that decoupling, if you will, Well, 360 00:17:59,480 --> 00:18:02,840 Speaker 8: certainly the last couple decades it is. This is the 361 00:18:02,960 --> 00:18:05,679 Speaker 8: breakdown in China is off the charts, and you can 362 00:18:05,720 --> 00:18:08,920 Speaker 8: see that with the pink highlights. Germany doesn't look good. 363 00:18:08,960 --> 00:18:11,320 Speaker 7: It's the sick man of Europe again. 364 00:18:12,240 --> 00:18:13,040 Speaker 2: US is up? 365 00:18:13,359 --> 00:18:15,240 Speaker 7: In India is up? Now, US is up. 366 00:18:15,640 --> 00:18:17,679 Speaker 8: I think part of it we have to look at 367 00:18:17,720 --> 00:18:20,040 Speaker 8: the excess spending. I mean, that's a lot of money 368 00:18:20,119 --> 00:18:22,920 Speaker 8: we pushed out over the last couple of years, and 369 00:18:22,960 --> 00:18:27,800 Speaker 8: that may be influencing some things. And certainly India, you 370 00:18:27,840 --> 00:18:30,080 Speaker 8: know the story. They've got some population growth and they 371 00:18:30,119 --> 00:18:35,919 Speaker 8: have an opportunity to do investment for other productivity enhancing things, 372 00:18:35,960 --> 00:18:39,439 Speaker 8: and so that's helping India. Everybody else is kind of 373 00:18:39,960 --> 00:18:44,359 Speaker 8: in trouble on population growth and the productivity growth is 374 00:18:45,600 --> 00:18:48,480 Speaker 8: you know, a big question mark, it's not a given. 375 00:18:49,359 --> 00:18:51,800 Speaker 4: What do you tell your clients these days about China? 376 00:18:51,840 --> 00:18:54,920 Speaker 5: I hear everything from uninvestable, which is kind of where 377 00:18:54,920 --> 00:18:55,680 Speaker 5: I am to. 378 00:18:56,760 --> 00:18:58,920 Speaker 4: You can't ignore it. You got to be there. How 379 00:18:58,920 --> 00:18:59,960 Speaker 4: do you guys think about it? 380 00:19:00,240 --> 00:19:03,560 Speaker 8: Well, structurally, you've got a problem. Ideologically, I'm not so 381 00:19:03,680 --> 00:19:05,960 Speaker 8: sure right there. You know, you don't want someone making 382 00:19:06,000 --> 00:19:09,280 Speaker 8: an edict and taking your money away. So those are real, 383 00:19:09,320 --> 00:19:14,280 Speaker 8: big risk factors. Cyclically green light. Since the end of 384 00:19:14,359 --> 00:19:17,359 Speaker 8: last year, cyclically it's been a green light. You have 385 00:19:17,400 --> 00:19:20,639 Speaker 8: this global industrial growth upturn. About twenty percent of the 386 00:19:20,720 --> 00:19:24,959 Speaker 8: Chinese economy gears off of exports, which are gearing right. 387 00:19:25,040 --> 00:19:26,240 Speaker 7: Those are gearing now. 388 00:19:26,760 --> 00:19:31,040 Speaker 2: Right now with US worldwide across this nation. Atathon Economic 389 00:19:32,680 --> 00:19:37,760 Speaker 2: Economic psycho Research Institute EKREA, I got to brain freeze there, folks. 390 00:19:37,920 --> 00:19:40,160 Speaker 2: It's been ring. We haven't seen the sun for four days. 391 00:19:40,160 --> 00:19:40,879 Speaker 4: Give me a break. 392 00:19:41,280 --> 00:19:45,600 Speaker 2: Coming up next, James Diamond after a latchman Atathon with 393 00:19:45,640 --> 00:19:48,439 Speaker 2: Francy Laqua in Paris. I was showing a chair up 394 00:19:48,520 --> 00:19:52,720 Speaker 2: today at work, the famed Ibbotson chart of Yale University, which, 395 00:19:52,720 --> 00:19:55,000 Speaker 2: as Gartman would say, is from the lower left to 396 00:19:55,040 --> 00:20:00,359 Speaker 2: the upper right. It is the exceptionalism of American capitalism, aren't. 397 00:20:00,720 --> 00:20:04,480 Speaker 2: Goes back to Jeffreymore in the founding of ECKRE, how 398 00:20:04,520 --> 00:20:09,320 Speaker 2: do you treat the immovable force which is stocks up? 399 00:20:10,520 --> 00:20:13,840 Speaker 8: Look, there is an upward trend which is undeniable in 400 00:20:13,880 --> 00:20:18,479 Speaker 8: the US economy over decades like that, and there's no 401 00:20:18,720 --> 00:20:20,520 Speaker 8: great reason for that to change. 402 00:20:21,000 --> 00:20:21,640 Speaker 4: On top of. 403 00:20:21,600 --> 00:20:27,159 Speaker 8: That, you have cycles, and right now we were to 404 00:20:27,240 --> 00:20:29,800 Speaker 8: the upside, we can easily flip and go to the 405 00:20:29,840 --> 00:20:32,280 Speaker 8: downside in a couple of quarters. This is a very 406 00:20:32,320 --> 00:20:35,960 Speaker 8: tactical framework that we're using, and we're overlaying that on 407 00:20:36,040 --> 00:20:39,560 Speaker 8: the structural Say when at your back that you're describing 408 00:20:40,640 --> 00:20:43,639 Speaker 8: on this closed cycle, that Paul's question, like, how's the 409 00:20:43,720 --> 00:20:46,200 Speaker 8: US bucking the trend up when everybody else is going down? 410 00:20:47,240 --> 00:20:47,439 Speaker 7: You know? 411 00:20:47,560 --> 00:20:48,080 Speaker 2: Part of it? 412 00:20:48,200 --> 00:20:51,679 Speaker 8: Sure, the innovation? Do you say it's stimulus? The share 413 00:20:51,720 --> 00:20:55,760 Speaker 8: of debt like the room. Look, we haven't there's you know, 414 00:20:55,800 --> 00:20:58,560 Speaker 8: it's a tired phrase. You know, off the charts. We 415 00:20:58,560 --> 00:21:01,600 Speaker 8: haven't seen this before. But the amount of deck growth 416 00:21:02,480 --> 00:21:05,400 Speaker 8: is significant, and it's different if you look at how 417 00:21:05,440 --> 00:21:09,120 Speaker 8: the US reacted to the pandemic and post pandemic era, 418 00:21:09,720 --> 00:21:13,080 Speaker 8: right it was different from Europe and from China. China 419 00:21:13,680 --> 00:21:17,000 Speaker 8: they did their big investing after the. 420 00:21:18,280 --> 00:21:20,280 Speaker 2: Just because of time here we're waiting for mister Diamond. 421 00:21:20,280 --> 00:21:23,520 Speaker 2: I want to tie Latchman Antathonos families identified with New 422 00:21:23,600 --> 00:21:27,040 Speaker 2: York City into James Diamond who's bank is identified with 423 00:21:27,160 --> 00:21:30,440 Speaker 2: New York City? Do you believe an American exceptionalists? Of course, 424 00:21:30,520 --> 00:21:31,080 Speaker 2: that's a theme that. 425 00:21:31,160 --> 00:21:33,240 Speaker 8: Of course right now, Oh no, no, I have no doubt 426 00:21:33,240 --> 00:21:37,119 Speaker 8: about that that that hasn't waivered at all. But it 427 00:21:37,160 --> 00:21:40,800 Speaker 8: doesn't mean I'm not concerned about deck growth. It doesn't 428 00:21:40,840 --> 00:21:45,680 Speaker 8: mean I'm questioning, like, how real is some of the 429 00:21:46,040 --> 00:21:49,000 Speaker 8: some of the growth in light of the approaching eight 430 00:21:49,040 --> 00:21:53,159 Speaker 8: trillion dollars of excess spending. Maybe you could argue the 431 00:21:53,200 --> 00:21:55,800 Speaker 8: policy is that we should be investing in this and that, 432 00:21:55,960 --> 00:21:59,000 Speaker 8: and that's fine, but let's recognize that. 433 00:21:59,119 --> 00:22:00,720 Speaker 7: And so we just had that last year. 434 00:22:00,800 --> 00:22:03,120 Speaker 8: Is this tug of wark between a big cyclical push 435 00:22:03,160 --> 00:22:06,240 Speaker 8: downside to the downside and an offset from these non 436 00:22:06,240 --> 00:22:10,960 Speaker 8: cyclical items. And we've got some demographic stuff where jobs 437 00:22:11,080 --> 00:22:15,400 Speaker 8: and health employment has been extremely strong, right, that's growing 438 00:22:15,440 --> 00:22:17,520 Speaker 8: at four percent, that kept us out of recession. 439 00:22:18,160 --> 00:22:20,720 Speaker 2: We're putting make Does the latchman have makeup on? I 440 00:22:20,760 --> 00:22:24,920 Speaker 2: don't think just makeup on. Francine's got out the lorel 441 00:22:25,119 --> 00:22:28,160 Speaker 2: she's putting girlen or something on. Jamie Diamondo. They're setting 442 00:22:28,200 --> 00:22:31,320 Speaker 2: up the makeup and they're in Paris. Here. I want 443 00:22:31,320 --> 00:22:33,080 Speaker 2: to say this is the excellence of what we're doing 444 00:22:33,080 --> 00:22:36,240 Speaker 2: at Bloomberg. We had David Solomon and Brian moynihan with 445 00:22:36,320 --> 00:22:39,320 Speaker 2: Jonathan Ferrell here the other day is France does what 446 00:22:39,440 --> 00:22:42,760 Speaker 2: is it? Paul like a capitalism week before the Olympics. 447 00:22:42,760 --> 00:22:48,600 Speaker 9: I think it's people are I will, I mean, Eckery's 448 00:22:48,640 --> 00:22:52,480 Speaker 9: thinking of setting up a Paris office sixth Aaron d 449 00:22:52,640 --> 00:22:54,400 Speaker 9: Smart across the river? 450 00:22:54,520 --> 00:22:55,719 Speaker 2: What do you think? Oh, I don't know. 451 00:22:55,880 --> 00:22:57,480 Speaker 7: Let's expand let's go across the river. 452 00:22:58,000 --> 00:23:01,040 Speaker 2: Yeah, you know, I just think it's booming. I've got 453 00:23:01,080 --> 00:23:03,280 Speaker 2: some offspring over there, and I'm very proud of them there. 454 00:23:04,000 --> 00:23:07,760 Speaker 2: I'm sorry. France is like a different environment right now. Yeah, 455 00:23:07,800 --> 00:23:08,600 Speaker 2: and right now. 456 00:23:09,400 --> 00:23:12,040 Speaker 8: Look, structurally there's a lot of issues that remain and 457 00:23:12,080 --> 00:23:15,480 Speaker 8: I don't want to underplay those. But cyclically, you've got 458 00:23:15,560 --> 00:23:19,000 Speaker 8: a global industrial upturn, so you have some demanded and 459 00:23:19,040 --> 00:23:21,400 Speaker 8: I think that's maybe the surprise with goods inflation down 460 00:23:21,480 --> 00:23:21,800 Speaker 8: the line. 461 00:23:23,320 --> 00:23:26,280 Speaker 2: What does your weekly indicators say about the real yield. 462 00:23:26,640 --> 00:23:29,360 Speaker 8: To the upside, it's still a little to it's still 463 00:23:29,520 --> 00:23:31,159 Speaker 8: a real yield. 464 00:23:31,280 --> 00:23:32,679 Speaker 2: Signals of normal market. 465 00:23:32,920 --> 00:23:35,600 Speaker 8: Well, look you can't I mean, you'd like to have 466 00:23:35,640 --> 00:23:37,800 Speaker 8: your cake and eat it too. But it doesn't always 467 00:23:37,800 --> 00:23:40,439 Speaker 8: work out that way. If you have growth going up, 468 00:23:41,200 --> 00:23:43,840 Speaker 8: it's not always that inflation just goes to the downside 469 00:23:43,880 --> 00:23:46,280 Speaker 8: and you have this immaculate disinflation. It doesn't work that way. 470 00:23:46,560 --> 00:23:51,960 Speaker 8: So I would say the I think we're banking on 471 00:23:52,000 --> 00:23:55,040 Speaker 8: the global industrial upturn and we're concerned about the knock 472 00:23:55,080 --> 00:24:00,040 Speaker 8: on effects for prices, and so that runs into the 473 00:24:00,080 --> 00:24:04,080 Speaker 8: central bank narratives, which is, hey, we're cutting thank you 474 00:24:04,440 --> 00:24:05,440 Speaker 8: so much. 475 00:24:15,200 --> 00:24:15,880 Speaker 7: This teo. 476 00:24:16,040 --> 00:24:21,040 Speaker 2: Now with our Bloomberg newspaper report, the newspapers are so strong, 477 00:24:21,600 --> 00:24:23,600 Speaker 2: I got them front loaded into tomorrow. 478 00:24:24,160 --> 00:24:26,959 Speaker 3: What do we got, Lisa, Well, you guys touched upon this. 479 00:24:27,000 --> 00:24:28,800 Speaker 3: I want to dig a little bit deeper. This is 480 00:24:28,800 --> 00:24:29,600 Speaker 3: the Bloomberg story. 481 00:24:29,640 --> 00:24:33,480 Speaker 10: Paramount Holding talks with Amazon about an expanded partnership. So 482 00:24:33,600 --> 00:24:36,199 Speaker 10: it's a lot to keep up with Paramount now it is, 483 00:24:37,200 --> 00:24:40,119 Speaker 10: But now they're saying that these talks it could amount 484 00:24:40,160 --> 00:24:42,720 Speaker 10: to nothing, but it could include bundled sales of channels 485 00:24:42,800 --> 00:24:46,399 Speaker 10: advertising to I didn't realize that Paramount Plus already one 486 00:24:46,400 --> 00:24:49,040 Speaker 10: of the more popular choices on Amazon's channel stores. So 487 00:24:49,040 --> 00:24:51,200 Speaker 10: if you look on their channel store, they let customers 488 00:24:51,160 --> 00:24:54,399 Speaker 10: subscribe to those things like Stars Max, Discovery Plus, but 489 00:24:54,480 --> 00:24:57,360 Speaker 10: Paramount Plus is on there. Paramount also a large supplier 490 00:24:57,359 --> 00:24:59,840 Speaker 10: of TV programs to Amazon's Prime. 491 00:24:59,640 --> 00:25:00,920 Speaker 3: Video streaming service. 492 00:25:01,200 --> 00:25:03,800 Speaker 10: So the relationship is there. It's just about where they're 493 00:25:03,800 --> 00:25:06,840 Speaker 10: going to take it. I guess from here is that basically. 494 00:25:06,400 --> 00:25:08,240 Speaker 5: I think that's it. I think that's it. That everybody's 495 00:25:08,280 --> 00:25:11,080 Speaker 5: talking to everybody. Paramount also had some discussions with Comcasts 496 00:25:11,080 --> 00:25:14,320 Speaker 5: about it streaming joint venture. So it's put it under 497 00:25:14,359 --> 00:25:17,480 Speaker 5: the context of everybody's talking to everybody because you're trying 498 00:25:17,480 --> 00:25:20,720 Speaker 5: to figure out how do I get profitability higher in 499 00:25:20,840 --> 00:25:22,840 Speaker 5: my streaming business, how do I reduce churn? 500 00:25:23,000 --> 00:25:25,400 Speaker 4: Maybe I need to bundle them with it about. 501 00:25:25,160 --> 00:25:30,399 Speaker 2: Thirteen suits, I mean, netflixes x number of streaming people, 502 00:25:30,480 --> 00:25:31,560 Speaker 2: and Paramount's like. 503 00:25:32,800 --> 00:25:35,200 Speaker 5: Okay, Paramoun's good, they're getting there. And you know, again, 504 00:25:35,280 --> 00:25:37,480 Speaker 5: Nielsen just came out with some data earlier in the 505 00:25:37,480 --> 00:25:40,880 Speaker 5: week to coincide with the upfronts and just showed that 506 00:25:41,000 --> 00:25:43,840 Speaker 5: the share of streaming and we saw that Disney was 507 00:25:43,880 --> 00:25:47,560 Speaker 5: number one, YouTube number two. Correct, But you know, the 508 00:25:47,560 --> 00:25:49,479 Speaker 5: next four or five are all credible, They're all right 509 00:25:49,520 --> 00:25:50,439 Speaker 5: there and they're all growing. 510 00:25:50,560 --> 00:25:51,680 Speaker 4: So but I kind of. 511 00:25:51,640 --> 00:25:53,919 Speaker 10: Like the bundle idea, though, I mean it saves in 512 00:25:53,960 --> 00:25:56,720 Speaker 10: the long run because then it's a better price for 513 00:25:56,800 --> 00:25:58,240 Speaker 10: more than job. 514 00:25:58,320 --> 00:26:00,520 Speaker 4: I mean, I look at home, Brian Robert father did 515 00:26:00,520 --> 00:26:01,960 Speaker 4: this streamen. 516 00:26:01,680 --> 00:26:05,280 Speaker 2: We don't have Max Ken saying why don't we have 517 00:26:05,359 --> 00:26:09,280 Speaker 2: paramount plus? I's like, you want to watch hundred one Dalmatian? 518 00:26:09,320 --> 00:26:11,360 Speaker 2: So what do we got next? You can't win. 519 00:26:11,920 --> 00:26:14,680 Speaker 10: This is from the Wall Street Journal. So more workers 520 00:26:14,680 --> 00:26:18,080 Speaker 10: getting to the office earlier to press the boss. They're 521 00:26:18,119 --> 00:26:20,880 Speaker 10: starting at five am, five am for. 522 00:26:21,080 --> 00:26:27,480 Speaker 5: Shock, what time shot like two or three before four o'clock? 523 00:26:27,680 --> 00:26:29,879 Speaker 10: No, four o'clock. I'm here, but don't have two thirty. 524 00:26:29,960 --> 00:26:32,280 Speaker 10: So but here's the thing for regular folks who don't 525 00:26:32,320 --> 00:26:34,959 Speaker 10: have to work a morning show. Okay, they're shooting off 526 00:26:35,000 --> 00:26:36,359 Speaker 10: email before the sun comes up. 527 00:26:36,440 --> 00:26:36,640 Speaker 2: Right. 528 00:26:37,320 --> 00:26:40,159 Speaker 10: There was a study that actually showed twenty one percent 529 00:26:40,240 --> 00:26:43,040 Speaker 10: users logging on between five am and nine am this year, 530 00:26:43,080 --> 00:26:45,840 Speaker 10: So that's up from nineteen percent twenty twenty one. Some 531 00:26:45,880 --> 00:26:48,399 Speaker 10: more people logging on before. But they say they impress 532 00:26:48,440 --> 00:26:50,479 Speaker 10: the boss. Right, They say they get a leg up 533 00:26:50,520 --> 00:26:53,639 Speaker 10: on colleagues before that nine am meeting because they have 534 00:26:53,800 --> 00:26:56,640 Speaker 10: more done, they have less distractions, so they get more 535 00:26:56,680 --> 00:26:57,400 Speaker 10: done early. 536 00:26:57,280 --> 00:26:59,720 Speaker 2: And Paul, you'll appreciate this. I remember when I first 537 00:26:59,760 --> 00:27:02,760 Speaker 2: dreamed Bloomberg, the demand for a five am five am 538 00:27:02,840 --> 00:27:05,639 Speaker 2: train from the north was so great they had to 539 00:27:05,640 --> 00:27:08,879 Speaker 2: put on other new trains because everybody started. And I 540 00:27:08,920 --> 00:27:12,520 Speaker 2: had the clearest memory of going, wait, the day starts 541 00:27:12,560 --> 00:27:14,440 Speaker 2: at seven thirty, and then all of a sudden, I'm 542 00:27:14,440 --> 00:27:17,920 Speaker 2: in the office watching the sunrise at six am, and 543 00:27:18,160 --> 00:27:22,240 Speaker 2: everything listen to the good point here this everything shifted 544 00:27:22,240 --> 00:27:24,240 Speaker 2: to the morning, including you know the act we do. 545 00:27:24,680 --> 00:27:25,760 Speaker 4: A it's a global business. 546 00:27:25,760 --> 00:27:28,359 Speaker 5: You got to deal with Europe, you got to have 547 00:27:28,440 --> 00:27:30,720 Speaker 5: to deal with But the question now, for okay, you're 548 00:27:30,760 --> 00:27:31,960 Speaker 5: starting your work day at five am. 549 00:27:32,080 --> 00:27:35,399 Speaker 4: Is it from home or is it from the and 550 00:27:35,520 --> 00:27:36,320 Speaker 4: I get from home. 551 00:27:36,400 --> 00:27:38,320 Speaker 5: I saw a Bank of America yesterday was out with 552 00:27:38,320 --> 00:27:43,280 Speaker 5: some research that showed occupancy of offices seems to have 553 00:27:43,320 --> 00:27:46,239 Speaker 5: plateawed here at around fifty percent. They're not calling it. 554 00:27:46,560 --> 00:27:48,639 Speaker 5: VIA's calling it that's kind of the new normal. 555 00:27:48,920 --> 00:27:51,639 Speaker 2: Excuse me, if you start at five am, when does. 556 00:27:51,520 --> 00:27:54,040 Speaker 10: The day, Well, you can get your afternoons early, that's 557 00:27:54,040 --> 00:27:56,520 Speaker 10: what they're saying. So for example, like me, I'm in early, 558 00:27:56,760 --> 00:27:59,639 Speaker 10: I get to go home and watch my kids' games, 559 00:27:59,720 --> 00:28:01,560 Speaker 10: you know, for sports, or get to you know, do 560 00:28:01,640 --> 00:28:02,919 Speaker 10: other things, and then I have to. 561 00:28:04,560 --> 00:28:04,800 Speaker 2: Life. 562 00:28:06,560 --> 00:28:10,120 Speaker 10: That's congestion pricing. That's what we're talking about. New York 563 00:28:10,160 --> 00:28:12,800 Speaker 10: Times another law. So this is from a group New 564 00:28:12,880 --> 00:28:16,640 Speaker 10: Yorkers against Congestion Pricing. Tax I think John Tucker might 565 00:28:16,640 --> 00:28:20,560 Speaker 10: be behind no but their loss. And they're arguing that 566 00:28:20,640 --> 00:28:23,880 Speaker 10: the tolling program could shift traffic and pollution to poor 567 00:28:24,080 --> 00:28:27,040 Speaker 10: minority neighborhoods things like Lower East Side, East Harlem, in 568 00:28:27,040 --> 00:28:29,440 Speaker 10: the South Bronx, because people are going to start going 569 00:28:29,480 --> 00:28:32,760 Speaker 10: the toll free around taking the FDR drive to avoid that. 570 00:28:32,760 --> 00:28:35,040 Speaker 10: They're also saying small businesses are going to be affected 571 00:28:35,040 --> 00:28:38,760 Speaker 10: because they're going to have less customers, higher costs for deliveries. 572 00:28:39,000 --> 00:28:41,960 Speaker 10: It's going to cost them to This is what this 573 00:28:42,120 --> 00:28:46,719 Speaker 10: group is saying. Like proof, they are saying that the 574 00:28:46,720 --> 00:28:50,800 Speaker 10: Congestion Pricing did not find the proof before doing this, 575 00:28:50,880 --> 00:28:53,760 Speaker 10: So they're saying that they didn't do these certain studies 576 00:28:53,760 --> 00:28:55,400 Speaker 10: that they should have done to prove that this is 577 00:28:55,400 --> 00:28:56,360 Speaker 10: going to be tough. 578 00:28:56,720 --> 00:28:58,720 Speaker 2: I'm going to stay out of it. I'm not informed. 579 00:28:58,920 --> 00:29:03,640 Speaker 2: I can't make it informed comments Tucker, but I don't 580 00:29:03,640 --> 00:29:05,920 Speaker 2: think anybody knows. I think it's a hell of it. 581 00:29:06,240 --> 00:29:09,400 Speaker 4: You can look to London, I guess, and probably learnt. 582 00:29:09,120 --> 00:29:09,800 Speaker 3: That's really happening. 583 00:29:09,920 --> 00:29:10,920 Speaker 2: Yeah, but I'm not sure. 584 00:29:10,960 --> 00:29:16,360 Speaker 10: The next one, last one, beer sellers using this loophole. Okay, 585 00:29:16,880 --> 00:29:21,520 Speaker 10: cannabis drinks market. So beers are being infused with cannabis 586 00:29:21,520 --> 00:29:22,120 Speaker 10: and this is a. 587 00:29:22,080 --> 00:29:24,520 Speaker 3: New thing yet because there's this loophole. 588 00:29:24,560 --> 00:29:26,080 Speaker 4: So let me explain this quickly. Okay. 589 00:29:26,160 --> 00:29:29,640 Speaker 10: So they were inadvertently legalized as part of a twenty 590 00:29:29,720 --> 00:29:30,680 Speaker 10: eighteen farm bill. 591 00:29:30,800 --> 00:29:32,240 Speaker 3: You're saying, what am I talking about? 592 00:29:32,280 --> 00:29:35,160 Speaker 10: Okay, So it allowed hemp to be grown to manufacture 593 00:29:35,200 --> 00:29:39,080 Speaker 10: things like clothing. But drink makers they use the loophole 594 00:29:39,160 --> 00:29:42,720 Speaker 10: to distill hemp into this concentrate, like think of turning 595 00:29:42,760 --> 00:29:46,000 Speaker 10: grapes into wine. So that's what they're doing. So alcohol 596 00:29:46,040 --> 00:29:49,080 Speaker 10: is distributor is they're lobbying to keep that loophole open 597 00:29:49,120 --> 00:29:50,880 Speaker 10: because they want to keep doing this because they're saying 598 00:29:50,960 --> 00:29:54,400 Speaker 10: alcohol sales are down, so they're helping that this might 599 00:29:54,440 --> 00:29:55,320 Speaker 10: help boost sales. 600 00:29:55,720 --> 00:29:58,000 Speaker 4: Weed infused beer THHC. 601 00:29:58,280 --> 00:30:00,880 Speaker 10: Yes, it's like a third ten zero. 602 00:30:00,720 --> 00:30:02,880 Speaker 4: Point three wise you're doing this. 603 00:30:03,280 --> 00:30:07,840 Speaker 10: No, it's there's a company cycling frog you know, like 604 00:30:07,880 --> 00:30:10,400 Speaker 10: all these smaller on smaller distributors. 605 00:30:10,440 --> 00:30:12,920 Speaker 2: Lisa mud say, thank you so much. The newspaper's already 606 00:30:12,920 --> 00:30:16,160 Speaker 2: got one on the hopper for tomorrow as well. This 607 00:30:16,240 --> 00:30:21,400 Speaker 2: is a Bloomberg Surveillance podcast, bringing you the best in economics, finance, investment, 608 00:30:21,600 --> 00:30:25,200 Speaker 2: and international relations. You can also watch the show live 609 00:30:25,440 --> 00:30:29,760 Speaker 2: on YouTube. Visit the Bloomberg Podcast channel on YouTube to 610 00:30:29,880 --> 00:30:33,280 Speaker 2: see the show weekday mornings from seven to ten am 611 00:30:33,320 --> 00:30:37,360 Speaker 2: Eastern from our global headquarters in New York City. Subscribe 612 00:30:37,360 --> 00:30:41,120 Speaker 2: to the podcast on Apple, Spotify, or anywhere else you listen, 613 00:30:41,440 --> 00:30:45,120 Speaker 2: and always on Bloomberg Radio, the Bloomberg Terminal, and the 614 00:30:45,120 --> 00:30:46,640 Speaker 2: Bloomberg Business App.