WEBVTT - Global Growth Outlook Post-CPI 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.960 --> 0:00:15.560 This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 0:00:15.600 --> 0:00:18.960 with Paul Sweeney. Join us each day for insight from 0:00:18.960 --> 0:00:23.119 the best in economics, finance, investment, and international relations. You 0:00:23.160 --> 0:00:26.520 can also watch the show live on YouTube. Visit the 0:00:26.520 --> 0:00:31.280 Bloomberg Podcast channel on YouTube to see the show weekday 0:00:31.280 --> 0:00:34.320 mornings from seven to ten am Eastern from our global 0:00:34.360 --> 0:00:39.000 headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 0:00:39.360 --> 0:00:42.920 or anywhere else you listen and always I'm Bloomberg Radio, 0:00:43.080 --> 0:00:47.400 the Bloomberg Terminal, and the Bloomberg Business App. Joining us now, 0:00:47.560 --> 0:00:52.960 Constance Hunter. We're thrilled that she could join this morning. 0:00:53.040 --> 0:00:56.720 A constant thank you. What changed yesterday? Just as simple 0:00:56.760 --> 0:01:00.200 you're writing a single paragraph today to your clients. 0:01:00.000 --> 0:01:04.840 What changed confirmation that inflation is still on its downward trajectory. 0:01:04.880 --> 0:01:08.280 That confidence was shaken about inflation when you got that 0:01:08.400 --> 0:01:11.000 data for the first three months of the year yesterday. 0:01:11.040 --> 0:01:14.640 It confirmed finally, oh, we are is starting to soften. 0:01:15.400 --> 0:01:18.880 Rent prices are starting to soften. It was a print 0:01:18.920 --> 0:01:21.680 that showed we are moving in the right direction and 0:01:22.040 --> 0:01:23.440 we are going to get rate cuts. 0:01:23.480 --> 0:01:25.760 This year. You and Julia Cornello fight like cats and 0:01:25.760 --> 0:01:29.039 dogs at micro policy perspectives. But what's the distinction of 0:01:29.080 --> 0:01:31.319 your debate when you and doctor cornetto speak. 0:01:32.000 --> 0:01:34.720 So what we're debating is which comes first? 0:01:34.880 --> 0:01:35.080 Right? 0:01:35.280 --> 0:01:39.679 Does inflation allow the Fed to cut rates because they 0:01:39.800 --> 0:01:42.559 see that trajectory to two percent clearly and they cut 0:01:42.560 --> 0:01:45.560 in time? Or are they behind the curve? Are we 0:01:45.640 --> 0:01:49.640 seeing softening in the labor market that ends up overtaking 0:01:49.680 --> 0:01:52.680 the story whereby they end up being behind the curve 0:01:52.720 --> 0:01:56.360 and that has really significant impact for whether that rate 0:01:56.440 --> 0:02:00.480 cut continues to fuelable market or not. Whether we see 0:02:00.520 --> 0:02:03.120 with on the underlying economy the shape of the curve, 0:02:04.000 --> 0:02:06.480 two very different outcomes if they're before or behind the curve. 0:02:06.560 --> 0:02:09.200 Well, as an article in the Jersey Real Estate I 0:02:09.280 --> 0:02:12.919 understand there's dynamics with mortgages, but the prices are up 0:02:13.000 --> 0:02:14.000 like double digits. 0:02:14.160 --> 0:02:17.639 Yeah, I mean we're the slowdown stuff's moving in Jersey. 0:02:17.680 --> 0:02:18.240 That's for short. 0:02:18.360 --> 0:02:21.160 What if you think whatever comes on the market constances. 0:02:21.600 --> 0:02:25.560 There's a lot of academics and market practitioners at that time, 0:02:25.600 --> 0:02:28.120 and I talked to that say the Fed's already behind 0:02:28.400 --> 0:02:30.360 Then if you look at the real time data inflation 0:02:30.440 --> 0:02:32.880 is already done. They should be cutting. Now what do 0:02:32.919 --> 0:02:33.919 you say to those folks. 0:02:34.080 --> 0:02:36.680 I think they have a very good point. They have 0:02:36.720 --> 0:02:37.440 a very good point. 0:02:37.520 --> 0:02:39.720 The problem is, I mean, I was at forecasters club 0:02:39.800 --> 0:02:42.480 yesterday and you were a. 0:02:42.400 --> 0:02:44.200 Club for forecasters. Yes, what do you guys? 0:02:44.240 --> 0:02:44.760 Once again? 0:02:46.000 --> 0:02:48.800 And Wong is the representatives. 0:02:52.320 --> 0:02:54.920 And keep it up constance. 0:02:55.760 --> 0:02:59.040 In any case, we you would be surprised how many 0:02:59.040 --> 0:03:00.800 people thought that the Fed a need to cut. That 0:03:00.800 --> 0:03:03.880 the economy is strong, and it is this K shaped 0:03:03.919 --> 0:03:07.160 economy again, which makes it very hard to interpret. Right, 0:03:07.200 --> 0:03:09.320 If you're in the top part of the K, you think, Wow, 0:03:09.320 --> 0:03:11.280 everything's great, but my stocks. 0:03:10.880 --> 0:03:13.080 Are up, I'm getting interest on my savings and. 0:03:13.600 --> 0:03:16.720 With no risk, the economy is doing really well, my 0:03:16.760 --> 0:03:18.720 house prices up. But if you're in that bottom part 0:03:18.720 --> 0:03:21.280 of the K, you're like, wow, my insurance, my car 0:03:21.320 --> 0:03:23.200 insurance just went up and I still need my car 0:03:23.240 --> 0:03:25.239 to drive to work, and I don't have the bandwidth 0:03:25.240 --> 0:03:26.800 to figure out how to push back on this or 0:03:26.840 --> 0:03:29.560 shop for a different insurance carrier that's going to give 0:03:29.600 --> 0:03:31.560 me the same coverage at a better rate. Right, You're 0:03:31.639 --> 0:03:33.359 really under pressure if you're at the bottom half of 0:03:33.360 --> 0:03:34.880 that K. That's what we saw in the New York 0:03:34.920 --> 0:03:37.680 Fed data that came out with regard to creeping up 0:03:37.720 --> 0:03:40.600 with delinquencies on credit cards, creeping up with delinquencies on 0:03:40.640 --> 0:03:44.560 auto loans. Mortgages are still low. That's obviously a very 0:03:44.560 --> 0:03:45.000 good thing. 0:03:45.080 --> 0:03:48.320 But so we got Walmart today put out some numbers 0:03:48.320 --> 0:03:50.560 which were a little bit better and expected, particularly on 0:03:50.560 --> 0:03:54.200 the top line. I always look at Walmart, it just 0:03:54.200 --> 0:03:56.360 says the neophyte is like a pretty good read on 0:03:56.400 --> 0:04:00.400 the consumer, but the consumer really is challenged, and it's 0:04:00.400 --> 0:04:01.920 that K shaped recovery here. 0:04:02.840 --> 0:04:06.160 What happened? There's nothing really the Fed can do there 0:04:06.200 --> 0:04:06.480 can it? 0:04:07.000 --> 0:04:08.480 There is nothing the Fed can do there. 0:04:08.600 --> 0:04:11.480 I mean, well, I shouldn't say, but I shouldn't say 0:04:11.520 --> 0:04:14.520 that lower lower rate. So we have an inverted yield curve, 0:04:14.560 --> 0:04:18.120 which is obviously very problematic for banks, right, and banks 0:04:18.440 --> 0:04:20.600 that's why we see such high spreads over ten years 0:04:20.640 --> 0:04:25.320 on mortgages. Banks aren't is willing to lend, and so 0:04:25.680 --> 0:04:28.080 if we had a positive sloping yell curve, ergo the 0:04:28.080 --> 0:04:30.960 front part of the curve was lower, right, we would 0:04:30.960 --> 0:04:34.120 see more willingness to lend. We'd see easier monetary conditions 0:04:34.120 --> 0:04:36.680 from Main Street. What we see is easy monetary kitchen 0:04:36.800 --> 0:04:37.719 editions for Wall Street. 0:04:37.760 --> 0:04:38.480 They're two different things. 0:04:38.839 --> 0:04:42.159 Sinson say, Ergo is still she started working with Julia Canado. 0:04:42.279 --> 0:04:45.719 It's changed everything. It okay, Atlanta. GDP now is four 0:04:45.720 --> 0:04:49.480 point two percent real GDP, which we know is a 0:04:49.520 --> 0:04:52.039 fiction and through the quarter will come down. It came 0:04:52.080 --> 0:04:54.839 down to three point eight. Where's that statistic can a 0:04:54.920 --> 0:04:58.320 migrate down to? Is if we staggered at June thirtieth. 0:04:58.400 --> 0:05:00.440 Yeah, we're looking at something around a two point two 0:05:00.680 --> 0:05:02.480 two point four percent most like. 0:05:03.600 --> 0:05:04.120 We call that. 0:05:04.240 --> 0:05:07.240 Okay, that's oh, it's I mean, that's that's if you 0:05:07.360 --> 0:05:10.279 think potential GDP is one point eight or two, that's 0:05:10.320 --> 0:05:13.080 a little better than okay, right, if you compound it 0:05:13.279 --> 0:05:15.840 two tenths of a percent, better than better than trend 0:05:16.400 --> 0:05:18.719 for you know, months on end or quarters on end, 0:05:18.800 --> 0:05:19.200 that is a go. 0:05:19.640 --> 0:05:23.200 All the gains with the stimulus and the financialization of 0:05:23.240 --> 0:05:26.600 our system, are all the gains going to the halves. 0:05:28.279 --> 0:05:29.520 I don't know that that's the case. 0:05:29.560 --> 0:05:31.720 I think a lot of what we're seeing with the 0:05:32.880 --> 0:05:37.440 Inflation Reduction Act, the Chips Act, the infrastructure is jobs 0:05:37.560 --> 0:05:42.000 to middle income people, we're seeing. We're seeing good jobs 0:05:42.040 --> 0:05:44.640 going out into the economy that are that are important. 0:05:44.680 --> 0:05:46.520 So I wouldn't say it's all going to the halves. 0:05:46.880 --> 0:05:50.279 How about on that labor market still below four percent 0:05:50.760 --> 0:05:54.480 unemployment rate, I mean, I don't is a labor market 0:05:54.480 --> 0:05:56.919 is strongest seems on that headline kind of number. 0:05:57.279 --> 0:06:00.760 So this is where we again have some concerns. So 0:06:00.760 --> 0:06:05.359 we do webscraping of earnings calls, and we monitor for 0:06:05.480 --> 0:06:08.840 intention to hire and intention to fire. And so what 0:06:08.880 --> 0:06:12.400 we're seeing is less labor hoarding. Right, Firms don't feel 0:06:12.400 --> 0:06:13.839 the need to labor hoard anymore. 0:06:13.839 --> 0:06:14.440 They've deployed. 0:06:14.560 --> 0:06:16.040 I never heard of before the last few years. 0:06:16.040 --> 0:06:17.680 But by the way, well it wasn't a thing before 0:06:17.680 --> 0:06:19.839 the last few years. It was it was because of 0:06:19.880 --> 0:06:24.039 the pandemic where where companies couldn't get workers. That once 0:06:24.120 --> 0:06:25.920 things softened up a little, they're like, well, I don't 0:06:25.920 --> 0:06:28.320 want to lose it's hard to hire, it's expensive, it's 0:06:28.360 --> 0:06:31.960 time consuming. Right, Better to reduce people's hours and keep 0:06:32.000 --> 0:06:34.320 them on the payroll for when you're going to need 0:06:34.360 --> 0:06:35.080 them later than to. 0:06:35.040 --> 0:06:35.920 Go ahead and fire them. 0:06:36.000 --> 0:06:38.400 So that's we had labor hoarding as a reaction to 0:06:38.480 --> 0:06:39.120 the pandemic. 0:06:39.240 --> 0:06:40.640 Constot but that's ending. 0:06:40.560 --> 0:06:44.560 Yep, Constans, thank you, Constance Hunter. With US macro policy 0:06:45.360 --> 0:06:57.880 perspective is we're going to do something now focus on oil, 0:06:57.920 --> 0:07:00.840 which we really know usually we're talking copper now, coppers, 0:07:00.960 --> 0:07:05.360 coppers of oil. Paul Sankee joins now just absolutely definitive 0:07:06.120 --> 0:07:10.120 in this linkage of oil economics into actually oil stocks. 0:07:10.120 --> 0:07:13.160 We'll try to cover all this yere right now, Paul, 0:07:13.280 --> 0:07:15.360 just to get to the OPEC meeting? Are you going 0:07:15.400 --> 0:07:16.840 to attend? You sometimes you do? 0:07:18.440 --> 0:07:21.320 You know this time it might go virtual actually, Tom 0:07:21.440 --> 0:07:26.320 so okay, and I wasn't prepared to commit to going 0:07:26.360 --> 0:07:28.920 even though it's the European Cup final soccer that night, 0:07:29.160 --> 0:07:30.760 June the first, it's also a Saturday. 0:07:30.880 --> 0:07:35.520 Okay, it's complex. What's the power of opek now, you 0:07:35.520 --> 0:07:38.320 know all of us have a stereotype of two oil 0:07:38.400 --> 0:07:40.840 crises in the seventies or this or that or the other. 0:07:41.320 --> 0:07:44.080 What's the power of opek right now? 0:07:45.360 --> 0:07:47.760 Well, we wrote a new theory about this which most 0:07:47.760 --> 0:07:51.000 people intuitively know, which is what really matters is not 0:07:51.080 --> 0:07:53.720 the call on OPEK, which is how people have calculated 0:07:53.760 --> 0:07:56.440 the oil market balance for years. We don't think that 0:07:56.480 --> 0:07:59.640 matters anymore as much at all as you're implying. We 0:07:59.800 --> 0:08:02.960 look the call on us unconventional because that's really the 0:08:03.040 --> 0:08:07.200 truly marginal short cycle oil. Now, of course, on top 0:08:07.240 --> 0:08:10.120 of that, you have the Saudi's willingness. We should say, 0:08:10.200 --> 0:08:12.720 everybody kind of has the ability to shut off production, 0:08:12.800 --> 0:08:16.200 but Saudi is willing to shut off production in order to. 0:08:16.160 --> 0:08:17.080 Balance the market. 0:08:17.160 --> 0:08:21.120 And OPEK is really a construct for the Saudis to 0:08:21.160 --> 0:08:24.080 feel better about having to carry the market, you know, 0:08:24.120 --> 0:08:27.200 So what they're trying to do is corral everyone else, 0:08:27.280 --> 0:08:31.040 even though in some cases, and the obvious example is Russia, 0:08:31.880 --> 0:08:33.840 you know, what they say is more or less meaningless 0:08:33.920 --> 0:08:36.760 is that you know, I won't go further than that, 0:08:36.920 --> 0:08:40.360 but you know, it's not reliable what they say essentially, 0:08:40.360 --> 0:08:44.960 which must be very frustrating to the Saudis, But essentially 0:08:44.960 --> 0:08:48.720 it is a Saudi construct in order for them to 0:08:48.760 --> 0:08:51.240 feel better about holding production off the market. 0:08:51.559 --> 0:08:54.400 Paul, what is driving the oil price these days? Is 0:08:54.400 --> 0:08:55.720 it supply? Is a demand? 0:08:55.960 --> 0:08:58.480 Does one end of that equation kind of have a 0:08:58.520 --> 0:08:59.760 little bit more sway these days? 0:09:01.000 --> 0:09:02.880 Well, Tom and I have been talking for twenty years. 0:09:02.920 --> 0:09:05.080 In fact, I'm surprised he didn't do his usual thing 0:09:05.120 --> 0:09:07.200 of hammering me for a terrible call that me and 0:09:07.200 --> 0:09:08.360 Adam Siminski. 0:09:08.000 --> 0:09:12.080 Made about Russia. Think it was the year like two thousand. 0:09:12.080 --> 0:09:15.800 It was so bad that car was so bad aged. 0:09:16.760 --> 0:09:19.360 You know, I'm sorry bresnev aged when you made that car. 0:09:19.480 --> 0:09:22.480 Continue to Conductor, saying, now, I think the big thing 0:09:22.520 --> 0:09:24.840 which is really remarkable to me in the context of 0:09:24.880 --> 0:09:28.319 that history, is that we're at all time high oil 0:09:28.360 --> 0:09:29.040 market demand. 0:09:29.120 --> 0:09:30.640 You know, so demand is an all time high. 0:09:30.679 --> 0:09:32.640 And if you'd asked me, do I think oil demand 0:09:32.640 --> 0:09:34.600 will be at one hundred and two million barrels a day? 0:09:35.120 --> 0:09:36.280 You know, one point what is it? 0:09:36.320 --> 0:09:40.320 One thy two hundred barrels a second in twenty twenty four, 0:09:40.360 --> 0:09:42.400 I would have thought you were crazy, But here we are. 0:09:43.360 --> 0:09:45.840 And that's so the demand side is truly remarkable. Now, 0:09:45.880 --> 0:09:47.800 of course, it's all about what happens at the margin, 0:09:47.840 --> 0:09:51.560 and demand is clearly weakening. So demand is good, but 0:09:51.760 --> 0:09:55.880 not not growing strongly at a record high. What's additionally 0:09:55.920 --> 0:09:58.840 absolutely remarkable. And twenty years ago we would never have 0:09:58.880 --> 0:10:02.080 guessed this was that you'd too much supply, and so 0:10:02.200 --> 0:10:05.000 as you know, there's two arguably four million barrels a 0:10:05.040 --> 0:10:08.319 day of spec capacity and OPEK, and of course we 0:10:08.400 --> 0:10:11.240 have the US as the dominant energy producer in the world, 0:10:11.280 --> 0:10:14.760 and you know, people still don't understand what an enormous 0:10:14.760 --> 0:10:18.520 deal that has been for everything that happens in the world, geopolitics, 0:10:18.600 --> 0:10:21.839 the dollar, you name it. The US performance here in 0:10:22.280 --> 0:10:25.440 order gas has been truly stunning. And the good news 0:10:25.600 --> 0:10:29.200 is that the companies have really improved themselves. They really 0:10:29.200 --> 0:10:31.720 are strong. I don't think i've seen Exon in better 0:10:31.760 --> 0:10:34.200 shape in that twenty year period. 0:10:34.240 --> 0:10:36.680 They really are doing a remarkable job and they're not allowed. 0:10:36.760 --> 0:10:40.240 You know, a company like Karnco Chevron really good stuff. 0:10:40.520 --> 0:10:43.560 So in that context, Paul, how does the US and 0:10:43.600 --> 0:10:45.600 as big producers you were just mentioning in the US, 0:10:46.120 --> 0:10:50.000 what's the interplay between them and OPEK in terms of 0:10:50.000 --> 0:10:51.800 shaping global oil supply. 0:10:53.960 --> 0:10:56.640 Well, you know, it's been controversial because obviously you saw 0:10:56.679 --> 0:11:00.440 that the FTC wouldn't allow Scott Sheffield the board of 0:11:00.480 --> 0:11:04.720 Excellon because of concerns about that, and I think frankly 0:11:04.760 --> 0:11:08.240 they were simply naive the major US CEOs at times. 0:11:08.760 --> 0:11:10.839 They didn't you know, we had covered refining for twenty 0:11:10.920 --> 0:11:13.199 years and I would host refining managements, they wouldn't be 0:11:13.240 --> 0:11:15.800 in the same room as each other because they didn't 0:11:15.800 --> 0:11:20.080 want to be accused of anything by inappropriate in terms 0:11:20.080 --> 0:11:22.839 of managing the market. But of course the EMP guys 0:11:22.840 --> 0:11:26.840 had never had any market power up to the unconventional revolution, 0:11:27.040 --> 0:11:30.160 and when we got to too much supply, they began 0:11:30.240 --> 0:11:32.640 to talk a lot too opek and that at a 0:11:32.640 --> 0:11:35.400 headline level it was actually quite innocent. But at a 0:11:35.440 --> 0:11:38.040 headline level, at an FTC level, it looks pretty bad. 0:11:38.040 --> 0:11:40.400 To be honest with you, it just doesn't look good. 0:11:41.080 --> 0:11:43.120 And so there, you know, there has been some worries 0:11:43.160 --> 0:11:46.760 about that. But broadly speaking, the key issue is the 0:11:46.800 --> 0:11:52.199 behavior of the marginal US producer who is showing capital discipline, 0:11:52.240 --> 0:11:55.200 and so US production growth has slowed and may even 0:11:55.280 --> 0:11:57.800 go into decline depending on where the oil price is. 0:11:58.240 --> 0:12:01.840 And we think that's because Saudi can't cut any more. Essentially, 0:12:02.559 --> 0:12:06.480 we think that demand weakness will ultimately cause you know, 0:12:06.800 --> 0:12:09.920 prices that force US produced to produce less. 0:12:09.960 --> 0:12:12.880 And that's to me is the dynamic or hence our 0:12:12.920 --> 0:12:13.680 called CUSP. 0:12:14.040 --> 0:12:17.319 The call on US unconventional is actually the important measure here, 0:12:17.400 --> 0:12:18.040 not the call. 0:12:17.960 --> 0:12:21.680 On open is big oil in America off your Exxon 0:12:21.880 --> 0:12:26.079 comments in the moonshot from the pandemic in sank I'm 0:12:26.120 --> 0:12:28.480 looking at Chevron right now. I got the same attribute 0:12:28.520 --> 0:12:31.720 pretty much. But is it a new big oil where 0:12:31.760 --> 0:12:36.880 you're looking at double digit returns versus single digit mediocrity. 0:12:37.559 --> 0:12:39.040 Yeah, No, that's exactly right, Tom. 0:12:39.040 --> 0:12:41.240 They're in the double digits and we always thought they 0:12:41.240 --> 0:12:43.640 could get there with capital discipline. Of course, you need 0:12:43.720 --> 0:12:47.200 oil above seventy. We're at eighty, so this is a 0:12:47.200 --> 0:12:49.959 good environment. The other thing that we're highlighting is that actually, 0:12:50.120 --> 0:12:52.600 believe it or not, there's lower oil volatility. I know 0:12:52.640 --> 0:12:55.319 it doesn't sound like it, but actually oil if volatility 0:12:55.400 --> 0:12:57.640 is falling, and that's very good for the multiples of 0:12:57.679 --> 0:13:02.320 these stocks, because you know, get very obviously get very 0:13:02.360 --> 0:13:05.240 nervous about a highly volatile commodity and whether or not. 0:13:05.200 --> 0:13:06.160 To buy the equities. 0:13:06.720 --> 0:13:08.960 What you'll notice is that we've held what we thought 0:13:09.000 --> 0:13:12.760 would be the range, which is essentially seventy WTI seventy 0:13:12.760 --> 0:13:15.760 five Brandt to eighty five WI ninety Brent. 0:13:16.120 --> 0:13:17.920 And we've held that range quite well. 0:13:19.000 --> 0:13:20.960 Very hopeful that we will continue to hold it, but 0:13:21.040 --> 0:13:23.599 of course that's dependent on this OPEC meeting that we 0:13:23.720 --> 0:13:27.320 started with because we do need TAUDI to keep holding 0:13:27.520 --> 0:13:29.520 at least a million barrels a day off the market 0:13:29.600 --> 0:13:32.400 in order to keep it balanced. In the past, as 0:13:32.440 --> 0:13:35.760 you know, COVID particularly, we saw a market share or 0:13:35.800 --> 0:13:38.880 amongst opek and that could be you know, that could 0:13:38.880 --> 0:13:41.160 be majorly volatile for all, which would be volatile to 0:13:41.240 --> 0:13:44.319 the downside if we get into that. But nobody's expecting 0:13:44.320 --> 0:13:47.679 that right now. The consensuses that will get a rollover 0:13:47.760 --> 0:13:49.760 in June first, and they may just do the meeting 0:13:50.640 --> 0:13:53.080 virtually in order to achieve that. They often do it 0:13:53.120 --> 0:13:56.280 if they want to avoid the press, and I think 0:13:56.280 --> 0:13:57.200 that's what will happen. 0:13:57.559 --> 0:13:59.920 If it doesn't, I don't think they can come more. 0:14:00.600 --> 0:14:04.160 The problem with the opening is there's only really downside here. 0:14:04.160 --> 0:14:09.640 Paul Xoi Paul Sweeney xoi off the pandemic gloom up 0:14:09.679 --> 0:14:13.840 three hundred percent per year. That's a sanky move. 0:14:14.000 --> 0:14:15.120 That was the same movie. 0:14:15.440 --> 0:14:20.240 Hey, Paul, if I'm a big global oil energy company, 0:14:20.720 --> 0:14:23.320 am I still out there looking for oil out in 0:14:23.360 --> 0:14:24.960 the ocean and or out in the middle of nowhere? 0:14:25.080 --> 0:14:26.960 Am I just going to go buy a company. 0:14:27.840 --> 0:14:29.840 You're looking because we you know incredibly. 0:14:29.880 --> 0:14:31.720 This is the other thing about the supply side is 0:14:31.760 --> 0:14:34.880 it's not just about unlocking the Permian. What we've seen here, 0:14:34.920 --> 0:14:37.760 as you know, is Guyana has been a remarkable discovery 0:14:37.760 --> 0:14:39.920 and we didn't think, you know, the peak oil argument 0:14:39.960 --> 0:14:42.240 of the two thousands that Tom and I used to 0:14:42.400 --> 0:14:46.440 talk about has really just become completely discredited. And Guyana's huge. 0:14:46.440 --> 0:14:49.360 But then if you look at Namibia, Namibia looks bigger. 0:14:49.400 --> 0:14:51.720 And if you look at a company like Portugal's Galp 0:14:51.840 --> 0:14:55.840 or Totar or Shell, they're all they're finding another Guyana 0:14:55.960 --> 0:14:59.040 might even be bigger than Guyana offshare and Namibia. So 0:14:59.120 --> 0:15:03.040 there's definitely the resurgence of off short activity because the 0:15:03.120 --> 0:15:06.760 Permian is getting more marginal in terms of its economics. 0:15:06.840 --> 0:15:08.680 You've drilled the good stuff and you're having to work 0:15:08.720 --> 0:15:11.320 through the benches over the next ten to fifteen years. 0:15:11.600 --> 0:15:13.520 Paul, I got too many more questions. Let's do this 0:15:13.560 --> 0:15:17.040 again soon, Paul sank you of course, legendary on oil. 0:15:17.320 --> 0:15:19.960 Look for him for the OPEC meeting. Was it June first? 0:15:20.240 --> 0:15:25.920 June first and first, Yeah, we. 0:15:25.960 --> 0:15:27.880 Got lots of anchathon with us with that Creed. This 0:15:27.920 --> 0:15:30.880 is the most important interview of the day. To rationalize 0:15:30.880 --> 0:15:33.960 a bull market, I'm sorry Atrathon is more important than 0:15:33.960 --> 0:15:37.440 a diamond. Good morning Joe and the team over at 0:15:37.480 --> 0:15:41.880 JP Moworgan Loatchman here with a really quick thing on 0:15:41.920 --> 0:15:45.800 our economic cycles. Do the economic cycles, Loatchmen, that you 0:15:46.000 --> 0:15:49.640 look at do they justify a third leg of a 0:15:49.680 --> 0:15:50.280 bull market? 0:15:51.040 --> 0:15:51.600 Short term? 0:15:51.640 --> 0:15:54.480 Sure? And so let's cyclical is looking at a couple 0:15:54.480 --> 0:15:58.600 of quarters. It's not looking out forever. Structurally, plenty of 0:15:58.640 --> 0:16:01.840 things to think about and to give you pause in 0:16:01.880 --> 0:16:05.040 the way things are going. But cyclically, I think we 0:16:05.040 --> 0:16:07.480 don't want to miss the forest for the trees. We 0:16:07.480 --> 0:16:11.080 were in the boonies, right, We had a really bad 0:16:12.160 --> 0:16:16.840 global industrial downturn, a pandemic and all that. But even 0:16:16.880 --> 0:16:19.440 after that, it still kept going. It was hitting Europe, 0:16:19.520 --> 0:16:22.200 it was hitting China. Remember the beginning of twenty three, 0:16:22.200 --> 0:16:24.120 everybody thought China was going to come out the global 0:16:24.160 --> 0:16:26.680 industrial left term was going to be here, YadA, YadA, YadA. 0:16:26.720 --> 0:16:27.360 Never happened. 0:16:28.040 --> 0:16:31.600 Now at the end of twenty twenty three, our global 0:16:31.640 --> 0:16:36.320 industrial stuff, really the forward looking stuff, started lifting nicely. 0:16:36.760 --> 0:16:39.760 And that's a nice backdrop for Europe. It's a nice 0:16:39.800 --> 0:16:44.360 backdrop for China. It's a nice backdrop for goods demand. 0:16:44.560 --> 0:16:49.080 And I hear all of the happy talk around inflation. Okay, 0:16:49.600 --> 0:16:52.520 the rent stuff is not right, the insurance stuff is 0:16:52.560 --> 0:16:52.840 not right. 0:16:52.840 --> 0:16:53.600 It's going to come down. 0:16:53.800 --> 0:16:59.080 Everybody assumes, presumes that goods inflation is no problem. And 0:16:59.200 --> 0:17:01.640 what we're seeing is if global industrial growth is turning up, 0:17:01.680 --> 0:17:05.280 and it is, that puts a bid on good. 0:17:05.359 --> 0:17:07.480 Paul, the chart here. We can't show it on radio. 0:17:07.520 --> 0:17:08.960 It doesn't We can show it on YouTube, but it 0:17:09.000 --> 0:17:12.399 doesn't work on radio. A lotman has a chart of 0:17:12.480 --> 0:17:16.480 the five year ahead GDP forecast. Yeah, and the only 0:17:16.520 --> 0:17:19.040 thing moving up is India in the United States, Paul. 0:17:19.320 --> 0:17:23.200 Everything else is stable, Japan's resilient. That but it's it's 0:17:23.200 --> 0:17:25.520 this US exceptionalism. 0:17:24.720 --> 0:17:25.639 That's where I wanted to go. 0:17:26.520 --> 0:17:26.720 Paul. 0:17:26.760 --> 0:17:31.200 He's breaking a rule coming in here with highlighted research notes. 0:17:31.680 --> 0:17:33.840 Can you can you explain to him. 0:17:34.080 --> 0:17:36.160 The lines of moving Paul, put that up in front 0:17:36.160 --> 0:17:37.280 of the camera for YouTube. 0:17:37.480 --> 0:17:43.000 We don't allow this, Okay, pink highlighters work. The banned continued. 0:17:43.160 --> 0:17:47.639 So about that US exceptionalism, how unusual is that for 0:17:47.720 --> 0:17:50.560 the US economy to generally be doing well three four 0:17:50.600 --> 0:17:53.960 percent whatever? It is versus your particularly Germany boy, and 0:17:54.000 --> 0:17:55.639 then and then China. 0:17:55.760 --> 0:17:59.399 How is that unusual to have that decoupling, if you will, Well, 0:17:59.480 --> 0:18:02.840 certainly the last couple decades it is. This is the 0:18:02.960 --> 0:18:05.679 breakdown in China is off the charts, and you can 0:18:05.720 --> 0:18:08.920 see that with the pink highlights. Germany doesn't look good. 0:18:08.960 --> 0:18:11.320 It's the sick man of Europe again. 0:18:12.240 --> 0:18:13.040 US is up? 0:18:13.359 --> 0:18:15.240 In India is up? Now, US is up. 0:18:15.640 --> 0:18:17.679 I think part of it we have to look at 0:18:17.720 --> 0:18:20.040 the excess spending. I mean, that's a lot of money 0:18:20.119 --> 0:18:22.920 we pushed out over the last couple of years, and 0:18:22.960 --> 0:18:27.800 that may be influencing some things. And certainly India, you 0:18:27.840 --> 0:18:30.080 know the story. They've got some population growth and they 0:18:30.119 --> 0:18:35.919 have an opportunity to do investment for other productivity enhancing things, 0:18:35.960 --> 0:18:39.439 and so that's helping India. Everybody else is kind of 0:18:39.960 --> 0:18:44.359 in trouble on population growth and the productivity growth is 0:18:45.600 --> 0:18:48.480 you know, a big question mark, it's not a given. 0:18:49.359 --> 0:18:51.800 What do you tell your clients these days about China? 0:18:51.840 --> 0:18:54.920 I hear everything from uninvestable, which is kind of where 0:18:54.920 --> 0:18:55.680 I am to. 0:18:56.760 --> 0:18:58.920 You can't ignore it. You got to be there. How 0:18:58.920 --> 0:18:59.960 do you guys think about it? 0:19:00.240 --> 0:19:03.560 Well, structurally, you've got a problem. Ideologically, I'm not so 0:19:03.680 --> 0:19:05.960 sure right there. You know, you don't want someone making 0:19:06.000 --> 0:19:09.280 an edict and taking your money away. So those are real, 0:19:09.320 --> 0:19:14.280 big risk factors. Cyclically green light. Since the end of 0:19:14.359 --> 0:19:17.359 last year, cyclically it's been a green light. You have 0:19:17.400 --> 0:19:20.639 this global industrial growth upturn. About twenty percent of the 0:19:20.720 --> 0:19:24.959 Chinese economy gears off of exports, which are gearing right. 0:19:25.040 --> 0:19:26.240 Those are gearing now. 0:19:26.760 --> 0:19:31.040 Right now with US worldwide across this nation. Atathon Economic 0:19:32.680 --> 0:19:37.760 Economic psycho Research Institute EKREA, I got to brain freeze there, folks. 0:19:37.920 --> 0:19:40.160 It's been ring. We haven't seen the sun for four days. 0:19:40.160 --> 0:19:40.879 Give me a break. 0:19:41.280 --> 0:19:45.600 Coming up next, James Diamond after a latchman Atathon with 0:19:45.640 --> 0:19:48.439 Francy Laqua in Paris. I was showing a chair up 0:19:48.520 --> 0:19:52.720 today at work, the famed Ibbotson chart of Yale University, which, 0:19:52.720 --> 0:19:55.000 as Gartman would say, is from the lower left to 0:19:55.040 --> 0:20:00.359 the upper right. It is the exceptionalism of American capitalism, aren't. 0:20:00.720 --> 0:20:04.480 Goes back to Jeffreymore in the founding of ECKRE, how 0:20:04.520 --> 0:20:09.320 do you treat the immovable force which is stocks up? 0:20:10.520 --> 0:20:13.840 Look, there is an upward trend which is undeniable in 0:20:13.880 --> 0:20:18.479 the US economy over decades like that, and there's no 0:20:18.720 --> 0:20:20.520