Speaker 1: Welcome to the Bloomberg Surveillance Podcast Downtown Keene. Along with
Speaker 1: Jonathan Ferroll and Lisa Brownwitz Jay Leye, we bring you
Speaker 1: insight from the best and economics, finance, investment and international relations,
Speaker 1: Fine Bloomberg Surveillance and Apple podcast SoundCloud, Bloomberg dot Com,
Speaker 1: and of course on the Bloomberg terminal. John's just simple,
Speaker 1: we're opening up, we're doing better, and we're opening up
Speaker 1: pretty quickly. Ben later joining us now tell Hudson Research
Speaker 1: CEO Ben fantastic to catch up with you, sir. Let's
Speaker 1: just start with a simple one. It's the path of
Speaker 1: least resistance for equities still higher. Simple answers. Yes, I mean,
Speaker 1: I think we're very focused on the sort of bond
Speaker 1: market in the tantrum and everything we've had, and that's
Speaker 1: gonna bring valuations down. They're always going to come down
Speaker 1: from the sort of you know, twenty three times PU.
Speaker 1: It was not a normal number of the S and P.
Speaker 1: It was a reflection of these very rest earnings. Earnings
Speaker 1: are now bouncing back, you know, very quickly, and things
Speaker 1: like the stimulus just give us more and more visibility
Speaker 1: on that. I think we're set up for a big
Speaker 1: earnings surprise. This year, We're gonna get strowth, not twenty
Speaker 1: out of the US, We're gonna get forty, not thirty
Speaker 1: out of international. That is a huge insurance policy to
Speaker 1: somewhat lower evaluations, and I think sets you up for,
Speaker 1: you know, another another very rare strong year for US
Speaker 1: and global equities. Ben later coming out of HSBC with
Speaker 1: that wonderful car you made two years ago, and then
Speaker 1: with Tara Hudson, and you've announced you're moving on to
Speaker 1: a wonderful new opportunity. The timeline of that is what
Speaker 1: is key here, Ben Laidler, No one but you has
Speaker 1: talked about the robustness of this ballmarket a three year run.
Speaker 1: How does this end? Well, how do you visualize that
Speaker 1: the double digit Ben Laidler's stock market ends out there?
Speaker 1: I mean, ultimately it gets killed by the fed um
Speaker 1: either a prematurely by a by a policy mistake, which
Speaker 1: I don't think we're going to get. I think, you know,
Speaker 1: Chairman Powell has been very very clear that rates are
Speaker 1: at least at the short end of staying are staying
Speaker 1: low for low for longer. But you know, ultimately they're
Speaker 1: going to have to They're gonna have to tape her,
Speaker 1: and but I think that's a discussion for another day.
Speaker 1: I you know, I don't think that's a discussion for
Speaker 1: the next sort of six or nine months. So I
Speaker 1: think that's a little bit of a red herring. I
Speaker 1: think the focus right now is this unfolding growth surprise,
Speaker 1: which I don't think we have sort of fully baked
Speaker 1: into numbers, and especially from these sort of cyclicals, reopeners,
Speaker 1: sort of value stocks, where I think that rotation has
Speaker 1: just begun in the last sort of month or so,
Speaker 1: and after a decade of under performance. So I think
Speaker 1: to be calling the end of that or the top
Speaker 1: of that right now is is dramatically premature. But I
Speaker 1: want to serve this idea of a policy error for
Speaker 1: a little bit, because there are some people who say
Speaker 1: there would be a policy error the FED does not
Speaker 1: hike rates in the face of persistent two and a
Speaker 1: half per cent inflation. Do you think that if we
Speaker 1: do get that kind of inflation, which Morgan Stanley frankly
Speaker 1: is calling for next year, do you think then that
Speaker 1: it would be appropriate for the third to raise rates,
Speaker 1: that it would be taken well by the equity markets,
Speaker 1: or do you think that would totally change the narrative
Speaker 1: and would make you reassess your car and equities. Yeah,
Speaker 1: I mean, I don't think we're looking at those sort
Speaker 1: of inflation numbers. I mean I think we've got a
Speaker 1: lot baked in already. I mean, inflation expectations, market inflation
Speaker 1: expectations already sort of over over two percent, sort of
Speaker 1: medium term. Again, I think we've sort of baked baked
Speaker 1: a lot in there. Um. You know, despite you know,
Speaker 1: this recovery narrative, we're still coming off very depressed levels.
Speaker 1: It's still a very big output gap. There were start
Speaker 1: very depressed sort of segments of the of the labor market.
Speaker 1: We had a core inflation number sort of last week
Speaker 1: well well below that sort of two percent number, So
Speaker 1: you know, we're going to get a sort of headline
Speaker 1: spike over the next few months off this sort of
Speaker 1: very depressed sort of base level. But I think to
Speaker 1: be calling for those sort of you know, north of
Speaker 1: two percent core inflation numbers, which is really gonna get
Speaker 1: the Fed sort of concerned and and looking to sort
Speaker 1: of unwind um this sort of very easy policy starts.
Speaker 1: I think to me having that discussion now, I just
Speaker 1: think I just think it's too early. Let's just go
Speaker 1: through the headlines from the Goldman note from last Friday
Speaker 1: to the revisions to forecasts eight percent GDP growth in
Speaker 1: twenty one Q four over Q four, unemployment to drop
Speaker 1: to four percent at the end of twenty one, three
Speaker 1: point five percent in twenty two, three point two, twenty three.
Speaker 1: But here's the kicker here. It's about inflation dynamics, and
Speaker 1: as far as Goldman are concerned, Tom, we expect inflation
Speaker 1: dynamics to mirror those of the last cycle. So you
Speaker 1: can have that boom that reopening for about twelve months.
Speaker 1: But the dynamics and the cycle for inflation, at least
Speaker 1: in the view of Goldman Tom, doesn't change. Ben Laylor
Speaker 1: what to do to the denominators. I mean, if you
Speaker 1: get eight percent GDP and I get it, there's a
Speaker 1: ramp down to wherever we're going. I mean, the fact
Speaker 1: is corporations adapt corporations are just do we grossly underestimate
Speaker 1: their revenue growth and margin expansion in this boom? Yes?
Speaker 1: I think, well, I think we're gonna where the danger is,
Speaker 1: especially for the sort of reopener's value cyclicals, calling what
Speaker 1: you will the amount of operating Lebridge is going to
Speaker 1: be dramatic because not only is the top line very depressed,
Speaker 1: and let's not forget how depressed. I mean you look
Speaker 1: at you know, you look you look at the car
Speaker 1: rental companies, the hotels that you mean, you name it.
Speaker 1: Revenues are still down sort of um, but we also
Speaker 1: underestimate that the operating Lebridge, all these companies have just
Speaker 1: taken costs out over the last twelve months. So when
Speaker 1: you get a bit of revenue growth coming back of
Speaker 1: a lower a lower cost base, I think the earnings
Speaker 1: recovery is going to be dramatic. And then let's not
Speaker 1: forget the tech names. So I mean these are still
Speaker 1: all secular growth stories that are growing sort of fifteen
Speaker 1: so um. You know by all means you know, overweight
Speaker 1: focus on those sort of cyclical recovery names. But you know,
Speaker 1: I don't think these sort of big tech names are
Speaker 1: out for the count. And I would just say you
Speaker 1: do need to share, have you if you're going to
Speaker 1: own us or Globe equity has just given how big
Speaker 1: they are. I mean, equities don't work unless so tech
Speaker 1: at least sort of treads water. So I think we're
Speaker 1: looking for you know, cypronicals catch up, not a big
Speaker 1: rotation out of tech. Ben, we've gotta let you go.
Speaker 1: But before we let you go, congratulations on a tremendous
Speaker 1: last couple of years covering this equity market after the
Speaker 1: partnering HSBC. Just some really brilliant calls in the face
Speaker 1: of a lot of skepticism, and Ben, we look forward
Speaker 1: to seeing how you do in the new venture. Ben
Speaker 1: later there Tallo Hudson Research. David Rubinstein is with Carlisle Group.
Speaker 1: His value to us, his peer to beer conversations have
Speaker 1: been wonderful. David, do you perceive an end to the pandemic?
Speaker 1: Not overnight, not anytime soon. I do think that if
Speaker 1: the vaccination program in the United States is as successful
Speaker 1: as the President hopes it will be, it is likely
Speaker 1: by the fall we can return to some type of normality.
Speaker 1: But I don't think it's going to happen overnight. Now,
Speaker 1: what are business people doing? I mean, you've got great context,
Speaker 1: not only your daily work with Carlisle, but your earn
Speaker 1: credibility over the decades. And this is the key question
Speaker 1: I have, David. The business people ramp up for a
Speaker 1: seven to eight percent economy and hope and pray, or
Speaker 1: do they settle and manage for a three or four
Speaker 1: percent growth rate? Which is it? I think the business
Speaker 1: community is assuming it will have a pretty good growth
Speaker 1: rate because the stimulus package is obviously going to stimulate
Speaker 1: the economy. It's a very very large package. For sure,
Speaker 1: I'd be very surprised if growth is at three or
Speaker 1: four percent given this stimulus. On the other hand, we
Speaker 1: should recognize that the country has two different business communities.
Speaker 1: You have the business community of private equity or finance
Speaker 1: or technology, which is doing quite well, what might do
Speaker 1: better than four or five, six or seven percent. But
Speaker 1: then you have the the underclass, the blue collar workers
Speaker 1: that people have been laid off, people that that don't
Speaker 1: have enough food and so forth. Those people are not
Speaker 1: going to be growing at that kind of rates. So
Speaker 1: we do have two different economies we're really dealing with.
Speaker 1: For your company that you are a leader at, how
Speaker 1: important is it for you to get your employees vaccinated
Speaker 1: right now? I think it's very important to have people
Speaker 1: to be vaccinated. Clearly, I think when you have a
Speaker 1: vaccination process, you're gonna have a healthier economy and you're
Speaker 1: gonna have a healthier population. You can't force people to
Speaker 1: get vaccinated. And I've been disappointed that so many people
Speaker 1: in the country, relatively speaking, are saying they don't want
Speaker 1: to be vaccinated. And I say so many. Maybe the
Speaker 1: population is not yet convinced it needs to be vaccinated.
Speaker 1: And I think that we really can't get complete heard humanity, humanity,
Speaker 1: herd immunity unless we get a very large percentage vaccinated.
Speaker 1: So I'm disappointed that some people don't want to be vaccinated.
Speaker 1: I understand why, but I think it's it's probably the
Speaker 1: wrong decision. Well, and this really raises a conundrum for
Speaker 1: a lot of executives where they want their employees to
Speaker 1: have the vaccine, they don't know how to encourage it.
Speaker 1: They can't force them, As you say, what are the
Speaker 1: best incentives and how important is it for you to
Speaker 1: get people back to the office, back traveling again, and
Speaker 1: leading more normal pre COVID types of lives. I think
Speaker 1: employers are struggling with this, but to some extent, I
Speaker 1: think some employers will say, if you're not vaccinated, don't
Speaker 1: come into the office, And therefore some people will continue
Speaker 1: to work at home, or there will be special places
Speaker 1: in offices for people that are not vaccinated, but they'll
Speaker 1: have to be tested when they go in and so
Speaker 1: forth every day about whether they have the virus. That's
Speaker 1: not an optimal situation. Clearly, it'd be much better for
Speaker 1: all employers if they're most local employees are willing to
Speaker 1: be vaccinated. For those who, for variety of reasons don't
Speaker 1: want to be vaccinated, they're gonna have to be special
Speaker 1: ways to handle them. But I don't think you can
Speaker 1: force people to be vaccinated against their their wishes. Yeah,
Speaker 1: this definitely has been an issue, Tom. I mean, think
Speaker 1: about a special place to put people at a time
Speaker 1: when there is concern about the ongoing spread of a
Speaker 1: virus that is mutating. That's an interesting idea. And David,
Speaker 1: this goes back to your public service with President Carter
Speaker 1: a few years. How close are we, David Rubinstein, to
Speaker 1: the common sense idea of the vaccine passport. Well, I
Speaker 1: think it's possible, um, but I don't think that you
Speaker 1: really are likely to have uh um people being forced
Speaker 1: to take vaccines. And I just think there's gonna be
Speaker 1: too much resistance to forcing people to be vaccinated. I
Speaker 1: just don't think that will work. There are many people
Speaker 1: and I would say, in the minority community, for example,
Speaker 1: many African Americans are have the view that very often
Speaker 1: they they've been used inappropriately for vaccines that maybe weren't
Speaker 1: as safe as or other uh tests that weren't as
Speaker 1: safe UH, And therefore there is some resistance in the
Speaker 1: in the minority community, African American community, there's some resistance
Speaker 1: among white males, many of whom, for political or other reasons,
Speaker 1: just think that the government shouldn't be telling them what
Speaker 1: to do. So you see that white male voters who
Speaker 1: are Republicans, some of them are are fairly fairly determined
Speaker 1: not to be vaccinated, and you can't force them to
Speaker 1: be vaccinated. David, what's the pulse of mergers and acquisitions
Speaker 1: right now? Transactions and combinations not only traditional but also
Speaker 1: the effervescence we see in the market with SPACs and such.
Speaker 1: Well for people who are in the M and A
Speaker 1: world and people in the private equity world, in finance world,
Speaker 1: it's almost as if there wasn't a pandemic because deals
Speaker 1: are going on, just people aren't meeting face to face
Speaker 1: by and large, and so it hasn't had a deletarious effect. Uh.
Speaker 1: Really on this part of the of the economy, and
Speaker 1: the SPACs are something that no one could have predicted.
Speaker 1: They clearly are very effervescent. It is the word you
Speaker 1: maybe have used um at some point, maybe some of
Speaker 1: them won't work out. But I don't think spacts are
Speaker 1: going away. I don't think that SPACs are here just
Speaker 1: as a temporary measure because of the of the pandemic.
Speaker 1: SPACs do serve a purpose some cases. Some cases they
Speaker 1: do get wildly inflated in terms of the valuations when
Speaker 1: you have companies with no no revenue get very very
Speaker 1: high valuations. On the other hand, they do serve a purpose,
Speaker 1: and I don't think they're going away. They're gonna be
Speaker 1: a permanent part of our financial structure. I think David
Speaker 1: always great to get you on the program. Come back soon,
Speaker 1: won't you stay close? David Rubinstein, that group found a
Speaker 1: with invest go on fixed income and particularly loans. No
Speaker 1: Choram joins us, and what's wonderful about Noel and she
Speaker 1: started out in the trenches of the trading desk as well,
Speaker 1: and that's really cool. It's a very rare that you
Speaker 1: get academics with her, you know, ability in the classroom
Speaker 1: that come out of the trenches of trading. What does
Speaker 1: the loan market look like right now? Invest goes up
Speaker 1: to their eyeballs and loans. What's the character of the
Speaker 1: loan market? Tom? Before we get started, I have to
Speaker 1: tell you that my Todd so perfectly gave me this
Speaker 1: this morning, and I just thought it was too perfect
Speaker 1: not to show you for St. Patty's Day. So let's
Speaker 1: just Sat Patty's Day, which means when you have to
Speaker 1: have a Guinness on for people who are listening on radio.
Speaker 1: She held up a big sparkly bow tie from with sequence,
Speaker 1: just like wear it carry one. So how about those loans?
Speaker 1: I want to give you more backdrop of kind of
Speaker 1: growth growth where just below Goldman I would say, we're
Speaker 1: expecting around seven percent growth for the year. Inflation we
Speaker 1: expect to be messy, and that's ultimately going to keep
Speaker 1: the Fed on the sidelines. We do expect as inflation
Speaker 1: is messy, we could see some more rates volatility, and um,
Speaker 1: we could see as a result loans um loans demand
Speaker 1: and you've already seen that, you've seen the retail investor
Speaker 1: step in significant in a significant way. UM, I would
Speaker 1: you know caveat that the retail investor also steps out,
Speaker 1: you know, when they start to get worried pretty quickly.
Speaker 1: So just of course, um, you know, don't put We
Speaker 1: never suggest putting all your eggs in one basket. Diverse
Speaker 1: by where you can, especially with levels where they are,
Speaker 1: you know, in terms of evaluations, the first play across
Speaker 1: bond asset this is really important. Typically when we talk
Speaker 1: about fixed income, we don't talk about retail participation. What
Speaker 1: is that incremental retail participation in leverage loans? Like, what
Speaker 1: does that look like in the last month or so,
Speaker 1: it's really stepped up because right a lot of investors
Speaker 1: are worried about that that raids volatility. We haven't seen
Speaker 1: it that we haven't seen the volatility carried through into
Speaker 1: the other asset classes though, and that's kind of, uh,
Speaker 1: you know, the main reason that we're still bullish on credit.
Speaker 1: I wouldn't say we're over our skis and risks here,
Speaker 1: but we do think that growth is going to be
Speaker 1: supportive for fundamentals this year and that is ultimately why
Speaker 1: you know, we would suggest UM investing in in bonds.
Speaker 1: We think the growth is going to support UM companies
Speaker 1: throughout the year, and that's really what's gonna you know
Speaker 1: be be the the story in well, I want to
Speaker 1: pick up on one of your lines and it's without context.
Speaker 1: You can give us that in just a moment. But
Speaker 1: it's something I've read a million times if ext income,
Speaker 1: and I've read it over the last months, I've read
Speaker 1: it six months ago, nine months ago, and over the
Speaker 1: last several years too. Valuations are rich, Thus investors are
Speaker 1: not getting paid for this risk. Is that just the story?
Speaker 1: And fixed income is that the new normal? That valuations
Speaker 1: will always be rich and investors will not be getting
Speaker 1: compensated for risk because we live in a new world now.
Speaker 1: So it is a new world. We are, you know,
Speaker 1: at very rich levels. Um, and we do think a
Speaker 1: lot of this year will be about clipping the coupon.
Speaker 1: But because of the volatility that we are like this
Speaker 1: in stocks, the rates, it does make sense to diverse
Speaker 1: by your portfolio. So of course we're we're actually seeing
Speaker 1: a lot of crossover investors and I've got a lot
Speaker 1: of crossover demand come into high yield em to pick
Speaker 1: up the yield there and diverse by their portfolios there
Speaker 1: and then um, you know, compensate themselves. We still think
Speaker 1: there's some value specifically within the services sectors um that
Speaker 1: you can also pick up, and there's still a little
Speaker 1: bit of value and leverage loans relative to high yield
Speaker 1: and of course i G. Taking a step back, there's
Speaker 1: a larger question going forward to what about whether the
Speaker 1: FED is put a floor under the default rate? In
Speaker 1: other words, is the FED put basically going to prevent
Speaker 1: the default rate among corporate debt from getting too high
Speaker 1: because they will sweep in and they will end up
Speaker 1: buying that debt and reducing borrowing costs enough to let
Speaker 1: these companies continue to survive. This year, it's really about growth,
Speaker 1: right and you know, we expect the faults to come down.
Speaker 1: It's an i G. It's really gonna's expect lower supply.
Speaker 1: It's going to be a lot about the leveraging. So
Speaker 1: a lot of companies are making the right moves that
Speaker 1: we would expect in a high growth year. We would
Speaker 1: you know, expect most of the growth to come in
Speaker 1: the next couple of quarters as the stimulus has spent,
Speaker 1: of course, and then you know, and before we would
Speaker 1: start to look for any kind of creeping back of
Speaker 1: COVID concerns. But ultimately we expect to end of the
Speaker 1: year at potential in terms of growth. So if credit
Speaker 1: risk isn't the main risk here, are you delving also
Speaker 1: into the riskiest of corporate debt, the triple C rated stuff,
Speaker 1: even in on the fixed side, even on the bond
Speaker 1: side A little bit, I'd say, because valuations are where
Speaker 1: they are that in and if you see continued volatility
Speaker 1: and you're not being compensated as much as you know
Speaker 1: you'd like it as an investor, As an investor with
Speaker 1: rich valuations, it doesn't make sense, of course to go
Speaker 1: you know, over your skis on risk and take a
Speaker 1: bunch of risk in your portfolio. But it does make
Speaker 1: sense to reach incrementally into these higher risk here higher
Speaker 1: risk areas, because we do expect growth to support these
Speaker 1: companies and allow them to improve their fundamentals on the ear. No,
Speaker 1: good to see you as always and love the boat high.
Speaker 1: Now call him that you started. You started out the
Speaker 1: program talking about a Sesame Street routs. We ended up
Speaker 1: first of all, do they watch Sesame Street the UK?
Speaker 1: Did you grow up watching it? Watches st Okay, we
Speaker 1: got that and then we got to this weekend. Obviously
Speaker 1: carry on with us now a gentleman of profile encouraged
Speaker 1: Michael Mayo joins as well as far ago securities on banking. Michael,
Speaker 1: you're very good at buying straw hats and winner the
Speaker 1: banks that were in winter any number of months ago.
Speaker 1: The banks have had a great move. Can you still
Speaker 1: own the banks here? Absolutely? Tom, I mean you still
Speaker 1: haven't made up uh, the underperformance versus the general market
Speaker 1: since the start of and so the catch up trade
Speaker 1: still has room to go for the banks. And today,
Speaker 1: in fact, we increased our esthmates on JP Morgan to
Speaker 1: the high on the street. Um, so we think that
Speaker 1: earnings will be a lot better than expected, uh, in
Speaker 1: the specific case for Jake Morgan and probably others. And
Speaker 1: what's so important here, Michael Mayo is you know and
Speaker 1: pulse and he knows this too. Corporations adapt to the
Speaker 1: news that they are given the strategy they're giving out
Speaker 1: one year, three years, five years. How does James Diamond
Speaker 1: adapt to eight g D P Well, well, first I'd say,
Speaker 1: what's good for JP Morgan's customers, what's good to the
Speaker 1: banking industries customers is good for the banks. It's mutually beneficial.
Speaker 1: But uh, Tom, you know, I'll stay here. A happy birthday,
Speaker 1: Albert Einstein. That was yesterday. And guess which executive quotes
Speaker 1: Albert Einstein the most. Mr Diamond exactly, And he often says, quote,
Speaker 1: everything should be made as simple as possible, but no simpler.
Speaker 1: So that's an Einstein quote that he uses to reduce
Speaker 1: the complexity of running a bank down to simple concepts.
Speaker 1: And one of those very simple concept is in a downturn,
Speaker 1: invest invest, invest like you would any other time time.
Speaker 1: So Tom, your question is what happens with this accelerating
Speaker 1: GDP growth? Well, JP Morgan is a few steps ahead
Speaker 1: at a time when some other banks are dusting off
Speaker 1: some expansion plans, are trying to get everything straight. They've
Speaker 1: already been investing. In fact, they've increased their investment dollars
Speaker 1: by two and a half times over the last five years,
Speaker 1: and they're increasing it by one fourth of the last year.
Speaker 1: It raised a lot of ivan brows, like why are
Speaker 1: you spending all this extra money? I mean, there there
Speaker 1: are a lot of concerned about that. And now you're saying, okay, hey,
Speaker 1: it makes sense to expand branches to all the lower
Speaker 1: forty states. It makes sense to expand bankers in the
Speaker 1: US and outside. They're investing more in tech. So they're
Speaker 1: coming this investing is really a sweet spot of the economy.
Speaker 1: So they've been very smart and let's face it, a
Speaker 1: little bit lucky too. Who thought we'd be this far
Speaker 1: along with the vaccines, I mean President Biden talking about
Speaker 1: Independence Day, uh from COVID July four, and then the
Speaker 1: stimulus one point nine trillion dollars last week for the
Speaker 1: environment's looking up just at the time when Jake Morgan
Speaker 1: is at peak investment spending. So this is similar. It's
Speaker 1: kind of history repeating itself with JP Morgan coming out
Speaker 1: of the Global stands for crisis. JP Morgan came through
Speaker 1: that much stronger and through the pandemic. We think JP
Speaker 1: Morgan will come through this much stronger once again. All Right,
Speaker 1: So Mike, there's this grand reopening trading in Goldman's Access
Speaker 1: raising their GDP forecast and there, uh, you know, take
Speaker 1: it down. Their unemployment numbers in the fourth quarter really
Speaker 1: really bullish there. Do do I want to own some
Speaker 1: of the more consumer facing big banks like a Bank
Speaker 1: of America, Or do I want in a city, or
Speaker 1: do I want to own some of the more investment
Speaker 1: banking centric names such as a JP Morgan Goldman and
Speaker 1: Morgan Stanley. Well, you have a recovery play, but then
Speaker 1: you have a longer term play where the largest banks
Speaker 1: are going to trend towards the greatest efficiency in history.
Speaker 1: The pandemic has accelerated years of customer behavior in a
Speaker 1: matter of months. So the role of digital banking is
Speaker 1: revolutionizing the way that banking has done. So, you know,
Speaker 1: our top pick is Bank of America. We had already
Speaker 1: increased ESMOS on them a city group with the new CEO,
Speaker 1: followed by JP Morgan. So Goliath is winning in banking,
Speaker 1: both both of the recovery trade but also for this
Speaker 1: long term you know tech revolution theme as it relates
Speaker 1: to banking. Mike Mayo, we have an important global Wall
Speaker 1: Street essay out today on Goldman Sachs and Mr Solomon
Speaker 1: and some of the uproar of people leaving Goldman Sachs.
Speaker 1: You've got an overweight on Golden Sex I believe is
Speaker 1: Mr Solomon getting it done there or to the tone
Speaker 1: of the article, is he spending too much time jetting
Speaker 1: around on the Gulf stream. Well let him around in
Speaker 1: the gold stream as much as he wants, because all
Speaker 1: the schmoozing, all the lunches and dinners and everything that
Speaker 1: Goldman does to create warmth. They're monetizing that warmth into
Speaker 1: market share. So at a time when the wallets growing,
Speaker 1: their share of the wallets increased. And as you know,
Speaker 1: he used to lead the banking side of things, so
Speaker 1: this is uh a period of stronger for longer capital markets.
Speaker 1: Goldman's on the top of its game. Um, they have
Speaker 1: been poached. So let's face a Goldman Sachs's like the
Speaker 1: you know, the Harvard of Banks, and so you work
Speaker 1: at Goldman, you have a pedigree, you get hired away.
Speaker 1: If you had the head of their consumer initiative get
Speaker 1: hired away by Walmart. Uh, then you had the head
Speaker 1: of asset managing of aid management get hired away. You're
Speaker 1: You're absolutely right. They're getting poached. But they have a
Speaker 1: deep bench, they have a deefench and you know, some
Speaker 1: turn is okay. They the partnership ranks got very heavy.
Speaker 1: They promoted a lot of people, and David came in
Speaker 1: and staid, we don't need this many partners So some
Speaker 1: turn is it. We're out of time. Michael Mayo, thank
Speaker 1: you so much. With the Wilson Friday, this is the
Speaker 1: Bloomberg Surveillance Podcast. Thanks for listening. Join us live weekdays
Speaker 1: from seven to ten am Eastern on Bloomberg Radio and
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Speaker 1: Tom Keene, and this is Bloomberg