1 00:00:02,440 --> 00:00:05,800 Speaker 1: Global business news twenty four hours a day at Bloomberg 2 00:00:05,840 --> 00:00:08,920 Speaker 1: dot com, the radio, plus mobile labs, and on your radio. 3 00:00:09,200 --> 00:00:13,080 Speaker 1: This is a Bloomberg Business Flash and I'm Karin Moscow. 4 00:00:13,119 --> 00:00:16,200 Speaker 1: This updates brought to you by National Railty Returns on 5 00:00:16,280 --> 00:00:18,520 Speaker 1: cash and rented real estate find them at n r 6 00:00:18,600 --> 00:00:21,880 Speaker 1: i A dot net u S stocks They're little change 7 00:00:21,960 --> 00:00:25,239 Speaker 1: to lower as global equities sought a fifth straight advance 8 00:00:25,280 --> 00:00:28,720 Speaker 1: amid mixed corporate earnings and higher oil prices. Emerging currencies 9 00:00:28,760 --> 00:00:32,560 Speaker 1: are halting a rally after Singapore unexpectedly loosened monetary policy. 10 00:00:32,840 --> 00:00:35,519 Speaker 1: Who checked the markets every fifteen minutes throughout the trading 11 00:00:35,600 --> 00:00:38,400 Speaker 1: day On Bloomberg Right now, the down Jones Industrial average 12 00:00:38,440 --> 00:00:40,960 Speaker 1: is little changed at seventeen thousand, nine hundred eight b 13 00:00:41,120 --> 00:00:42,960 Speaker 1: S and P five hundred is down to point to 14 00:00:43,920 --> 00:00:45,839 Speaker 1: one and then as to act down a tenth of 15 00:00:45,920 --> 00:00:48,040 Speaker 1: upper cent or six points to forty nine. Four day 16 00:00:48,120 --> 00:00:50,519 Speaker 1: ten year Treasury down four thirty seconds, the yield one 17 00:00:50,560 --> 00:00:53,520 Speaker 1: point seven seven percent yield on the two year point 18 00:00:53,600 --> 00:00:56,240 Speaker 1: seven six percent. N I'm ex screwed oils down the 19 00:00:56,240 --> 00:00:58,800 Speaker 1: tenth of upper center four cents to forty one seventy 20 00:00:58,800 --> 00:01:01,400 Speaker 1: two a barrel coma school is down one per cent 21 00:01:01,480 --> 00:01:03,760 Speaker 1: or twelve dollars twenty cents to twelve thirty six and 22 00:01:03,800 --> 00:01:06,560 Speaker 1: ounce the euro at all our twelve seventy seven the 23 00:01:06,720 --> 00:01:09,760 Speaker 1: en one oh nine point one zero. Bank of America 24 00:01:09,840 --> 00:01:12,640 Speaker 1: posting a first quarter of profit that miss analysts estimates 25 00:01:12,680 --> 00:01:16,399 Speaker 1: as trading and underwriting revenue dropped and energy loans soured. 26 00:01:16,920 --> 00:01:18,920 Speaker 1: The stock is higher right now. It's up one and 27 00:01:18,959 --> 00:01:22,920 Speaker 1: a half percent to fourteen dollars. Consumer confidence climbing for 28 00:01:22,920 --> 00:01:24,840 Speaker 1: the first time in a month as perceptions about the 29 00:01:24,840 --> 00:01:27,080 Speaker 1: world's largest economy jumped by the most and more than 30 00:01:27,120 --> 00:01:30,399 Speaker 1: a year. The Bloomberg Consumer Comfort Index rising to forty 31 00:01:30,440 --> 00:01:33,000 Speaker 1: three point six in the period ending April ten from 32 00:01:33,000 --> 00:01:35,960 Speaker 1: forty two point six the prior week. And that's a 33 00:01:36,000 --> 00:01:38,960 Speaker 1: Bloomberg business flash. Tom and Mike Karen thank you so 34 00:01:39,080 --> 00:01:41,360 Speaker 1: much with his work at the Fellow Reserve System years 35 00:01:41,360 --> 00:01:45,880 Speaker 1: ago on banks and bank mergers, legendary credit suites, among 36 00:01:46,000 --> 00:01:49,280 Speaker 1: other places along the way. Michael Mayo joins us from 37 00:01:49,320 --> 00:01:52,720 Speaker 1: cl S A. Mike, you are the harshest critic of 38 00:01:52,800 --> 00:01:56,040 Speaker 1: the South Side on governance issues at Bank of America. 39 00:01:56,240 --> 00:02:00,360 Speaker 1: Did you observe a different bank of America this morning. Well, Tom, 40 00:02:00,400 --> 00:02:03,720 Speaker 1: I still have a love hate relationship with Bank America. 41 00:02:03,880 --> 00:02:08,919 Speaker 1: And what I love about Bank America is the franchise 42 00:02:09,520 --> 00:02:12,440 Speaker 1: that goes throughout the United States. I love the balance 43 00:02:12,440 --> 00:02:15,880 Speaker 1: sheet at Bank America. They have record capital and liquidity. 44 00:02:15,960 --> 00:02:19,120 Speaker 1: This is a resilient bank. And I also love their 45 00:02:19,160 --> 00:02:22,760 Speaker 1: growth and traditional deposits and loans. I mean, this is 46 00:02:23,240 --> 00:02:26,440 Speaker 1: really a strong main street bank and you saw some 47 00:02:26,520 --> 00:02:30,160 Speaker 1: of that uh this quarter, although you also see that 48 00:02:30,280 --> 00:02:34,120 Speaker 1: the Wall Street portion of Bank America has weakness like 49 00:02:34,320 --> 00:02:38,560 Speaker 1: the industry, lower trading, lower deal making, lower wealth management. 50 00:02:38,600 --> 00:02:41,519 Speaker 1: But so I love the franchise. I love the resiliency. 51 00:02:41,560 --> 00:02:45,760 Speaker 1: But Tom, I I still hate uh their returns. Their 52 00:02:45,800 --> 00:02:50,000 Speaker 1: returns are still way below what we would say the 53 00:02:50,040 --> 00:02:53,160 Speaker 1: cost of capital. I mean, if you can't generate returns 54 00:02:53,200 --> 00:02:56,000 Speaker 1: above ten percent, then what's the point. And they also 55 00:02:56,040 --> 00:02:59,520 Speaker 1: have among the worst efficiency in the industry. And Tom, 56 00:02:59,560 --> 00:03:02,760 Speaker 1: as you, oh, you know, we hate the oversight and 57 00:03:02,919 --> 00:03:06,720 Speaker 1: governance at Bank America. There's still no time frame for 58 00:03:06,760 --> 00:03:09,800 Speaker 1: any key financial target. We need to hold uh the 59 00:03:10,040 --> 00:03:12,360 Speaker 1: its been team accountable. So I'm going to the annual 60 00:03:12,360 --> 00:03:14,880 Speaker 1: meeting in a couple of weeks and I'm going to 61 00:03:14,919 --> 00:03:17,880 Speaker 1: be asking questions, not just the CEO, but the entire 62 00:03:17,919 --> 00:03:21,320 Speaker 1: board within the bank earnings we're in right now, what 63 00:03:21,480 --> 00:03:25,959 Speaker 1: is your single best buy and why you know we 64 00:03:26,880 --> 00:03:31,640 Speaker 1: like City Group. City Group is the problem child that 65 00:03:31,840 --> 00:03:34,200 Speaker 1: you know is getting D S and ease and now 66 00:03:34,240 --> 00:03:36,080 Speaker 1: we think they're going to get you know, kind of 67 00:03:36,520 --> 00:03:39,560 Speaker 1: C plus B minus. So they're not going to best 68 00:03:39,560 --> 00:03:42,760 Speaker 1: in class yet, but we think the delta, the change 69 00:03:43,080 --> 00:03:45,920 Speaker 1: from where they've been to where they're going to should 70 00:03:45,960 --> 00:03:47,800 Speaker 1: be about the best in the industry. And you saw 71 00:03:47,840 --> 00:03:52,320 Speaker 1: that yesterday of the eight large banks, UH, seven of 72 00:03:52,360 --> 00:03:55,520 Speaker 1: the eight had issues with what's called the Living Wills. 73 00:03:55,560 --> 00:03:59,520 Speaker 1: That's the government program where the banks have to establish 74 00:03:59,520 --> 00:04:03,280 Speaker 1: a plan how they would dismantling themselves in a doomsday scenario. 75 00:04:03,480 --> 00:04:05,920 Speaker 1: City Group was the only one of the eight banks 76 00:04:05,960 --> 00:04:08,440 Speaker 1: that did okay, And we think that's the digative of 77 00:04:08,480 --> 00:04:10,520 Speaker 1: some of the progress that they're making. Well is that 78 00:04:10,600 --> 00:04:13,000 Speaker 1: Michael Corbett, Do you give him as much credit as 79 00:04:13,080 --> 00:04:17,400 Speaker 1: you uh as you complain about DA Brian Moynehan, Well, 80 00:04:17,560 --> 00:04:21,680 Speaker 1: these are both you know, you know D students getting 81 00:04:21,760 --> 00:04:24,880 Speaker 1: better at City Group. City Group pass some issues, Don't 82 00:04:24,880 --> 00:04:27,320 Speaker 1: get me wrong. I mean they need to be held accountable. 83 00:04:27,520 --> 00:04:30,239 Speaker 1: They need to also improve the return on equity. Whether 84 00:04:30,320 --> 00:04:34,279 Speaker 1: it's City Group or Bank America or a regional Bank America, 85 00:04:34,720 --> 00:04:37,479 Speaker 1: these are all banked with return on equity way below 86 00:04:37,520 --> 00:04:40,160 Speaker 1: the cost to capital. If you can't get above you 87 00:04:41,400 --> 00:04:44,520 Speaker 1: then you need to restructure or think about management changes. Michael, 88 00:04:44,520 --> 00:04:46,000 Speaker 1: I want to give you one more question. We thank 89 00:04:46,040 --> 00:04:47,760 Speaker 1: you so much for your quick response. We'd like to 90 00:04:47,760 --> 00:04:49,599 Speaker 1: get you on in the next few days as well, 91 00:04:49,839 --> 00:04:53,880 Speaker 1: Michael Mayo. Charles Peabody said the other day, look this bank, 92 00:04:53,960 --> 00:04:57,200 Speaker 1: that bank, the other bank. There's all these challenges. When 93 00:04:57,200 --> 00:05:01,040 Speaker 1: they get through this post crisis hurdle, these banks will 94 00:05:01,120 --> 00:05:05,200 Speaker 1: mint cash flow and distribute it back to shareholders. Do 95 00:05:05,279 --> 00:05:09,359 Speaker 1: you agree with your colleague, Charles Peabody, Yeah, we have 96 00:05:09,440 --> 00:05:11,839 Speaker 1: independent thought. But Tom, this is the first time in 97 00:05:11,880 --> 00:05:15,760 Speaker 1: twenty years that we've recommended all four of the largest 98 00:05:15,760 --> 00:05:18,640 Speaker 1: banks at the same time. For us to be recommending 99 00:05:18,680 --> 00:05:23,000 Speaker 1: Bank America, City Group, JP Morgan, and Wells Fargo again 100 00:05:23,080 --> 00:05:27,000 Speaker 1: the first time in two decades. So we are bullish 101 00:05:27,120 --> 00:05:30,360 Speaker 1: on banks more so than any time since the nine 102 00:05:31,200 --> 00:05:33,680 Speaker 1: Michael Mayo, thank you so much. With ce ls A 103 00:05:33,680 --> 00:05:36,440 Speaker 1: America's greatly appreciate it. We'll hope to have Mr Mayo 104 00:05:36,560 --> 00:05:38,640 Speaker 1: on here in the coming days as we see ma 105 00:05:38,880 --> 00:05:41,720 Speaker 1: more bank boy. That's what we love about surveillance, folks. 106 00:05:41,839 --> 00:05:45,200 Speaker 1: We can bring you a perspective from people who are 107 00:05:45,600 --> 00:05:48,479 Speaker 1: within the street and know whatever it is, in this 108 00:05:48,520 --> 00:05:52,279 Speaker 1: case Global Wall Street. That's always a great thing. Even better, 109 00:05:52,920 --> 00:05:56,719 Speaker 1: Mike Mayo and Michael McKee agree on one thing. They 110 00:05:56,760 --> 00:06:00,680 Speaker 1: need expensive sushi. Joining us now, Peter Elliott a Bloomberg 111 00:06:00,720 --> 00:06:05,680 Speaker 1: reserved without a good Sighuid, do I need expensive sushi? Um? No. 112 00:06:05,800 --> 00:06:08,440 Speaker 1: As a matter of fact, here's the price to value 113 00:06:08,520 --> 00:06:11,440 Speaker 1: ratio with sushi these this this is, this is one 114 00:06:11,440 --> 00:06:13,720 Speaker 1: of my favorite stories at the moment. How many, how many, 115 00:06:13,839 --> 00:06:16,080 Speaker 1: how many listeners and how many people here have seen 116 00:06:16,240 --> 00:06:20,040 Speaker 1: either The Wolf of Wall Street or The Big Short? Everybody? Everybody? 117 00:06:20,279 --> 00:06:23,240 Speaker 1: You know? The Big Short starts and ends with the 118 00:06:23,279 --> 00:06:27,599 Speaker 1: concept of Nobu that every trader has to you know, eat, 119 00:06:27,640 --> 00:06:31,360 Speaker 1: there be their new meetings there um Nobu, which started 120 00:06:31,360 --> 00:06:36,159 Speaker 1: in the nineties, sort of dragged in an era where 121 00:06:36,320 --> 00:06:39,520 Speaker 1: everybody thinks sushi has to be a thousand dollars. I mean, 122 00:06:39,520 --> 00:06:42,040 Speaker 1: it used to be just one restaurant called Masa or Nobu. 123 00:06:42,120 --> 00:06:46,960 Speaker 1: Now every place from New York to London specializes in 124 00:06:47,080 --> 00:06:50,880 Speaker 1: the five hundred dollar sushi meal. When there's a news 125 00:06:51,000 --> 00:06:54,200 Speaker 1: video of a tuna in Tokyo that's sold for a 126 00:06:54,320 --> 00:06:57,640 Speaker 1: zillion dollars, does a hunk of that tuna end up 127 00:06:57,640 --> 00:07:00,960 Speaker 1: in a fancy restaurant now New Yorker, it really does. 128 00:07:01,080 --> 00:07:02,960 Speaker 1: And this is like really this is yes, and it 129 00:07:03,000 --> 00:07:04,800 Speaker 1: really does. Now, this is the thing is is that 130 00:07:04,839 --> 00:07:08,080 Speaker 1: there there is some good sushi that is worth it, 131 00:07:08,720 --> 00:07:10,720 Speaker 1: and there is some good sushi that is really not 132 00:07:10,800 --> 00:07:13,640 Speaker 1: worth it. So you know, the sushi Nakazawa in New 133 00:07:13,720 --> 00:07:16,280 Speaker 1: York is the is the current you know go to 134 00:07:16,480 --> 00:07:18,760 Speaker 1: place for people one because it's hard to get into. 135 00:07:19,000 --> 00:07:21,800 Speaker 1: But let's face it, mostly it's about knowing that you're 136 00:07:21,880 --> 00:07:24,880 Speaker 1: getting the best kind of sushi and paying up the 137 00:07:24,880 --> 00:07:27,840 Speaker 1: wazoo for it, but mostly so that you'll be treated 138 00:07:27,920 --> 00:07:32,760 Speaker 1: nicely by English speaking waiters. Yeah, because what's the difference. 139 00:07:32,760 --> 00:07:36,120 Speaker 1: What is the best quality sushi? As you say to me, 140 00:07:36,200 --> 00:07:38,280 Speaker 1: the best quality sushi is sushi zo where you have 141 00:07:38,320 --> 00:07:41,480 Speaker 1: somebody who really knows, not the restaurant I'm talking about. 142 00:07:41,840 --> 00:07:45,000 Speaker 1: How do you define the best the quality? It's it's 143 00:07:45,040 --> 00:07:48,800 Speaker 1: it's unbelievable to see the differences in quality amongst fish, 144 00:07:48,960 --> 00:07:51,560 Speaker 1: and it really is unbelievably expensive, and we really are 145 00:07:51,680 --> 00:07:53,920 Speaker 1: destroying the oceans and all of that good stuff. But 146 00:07:53,960 --> 00:07:56,240 Speaker 1: the truth of the matter is, does your average trader, 147 00:07:56,280 --> 00:07:59,200 Speaker 1: does your average Joe know the difference between um, you know, 148 00:07:59,480 --> 00:08:02,640 Speaker 1: sushi category or sushi It it'sue in London, which is, 149 00:08:02,920 --> 00:08:05,800 Speaker 1: you know, the bottom lowest grade of sushi and the 150 00:08:05,840 --> 00:08:08,520 Speaker 1: sushi that they're going to get a sushi kazawa. Not really, 151 00:08:09,680 --> 00:08:12,480 Speaker 1: you know, when most people really just don't know the difference, 152 00:08:12,480 --> 00:08:14,840 Speaker 1: so you can buy cheap sushi and be just fine 153 00:08:14,880 --> 00:08:18,559 Speaker 1: with it. I don't. I don't. I wouldn't personally, but um, 154 00:08:18,640 --> 00:08:20,880 Speaker 1: you know, I'm I'm pretty good at knowing the differences 155 00:08:20,920 --> 00:08:23,640 Speaker 1: in grade. So people tend to go for the very 156 00:08:23,720 --> 00:08:27,040 Speaker 1: expensive sushi as a way of knowing that they're getting 157 00:08:27,080 --> 00:08:29,960 Speaker 1: the best quality. It's like ordering It's like ordering the 158 00:08:29,960 --> 00:08:32,480 Speaker 1: most expensive wine on the wine list as a way 159 00:08:32,559 --> 00:08:36,160 Speaker 1: of getting that you're getting the best thing we can 160 00:08:36,200 --> 00:08:38,200 Speaker 1: I just say, the only thing that there's more of 161 00:08:38,280 --> 00:08:42,120 Speaker 1: in New York than Gwen read drug stores is sushi restaurants. 162 00:08:43,480 --> 00:08:47,640 Speaker 1: How do I know whether that particular restaurant has the 163 00:08:47,679 --> 00:08:50,680 Speaker 1: best quality. The real reason, the real way to do it, 164 00:08:50,760 --> 00:08:54,360 Speaker 1: my friend, is to look. Most sushi puts their sushi 165 00:08:54,440 --> 00:08:56,200 Speaker 1: up on a bar and you can check if it's 166 00:08:56,240 --> 00:08:59,280 Speaker 1: looking a little peakid or looking like you know you 167 00:08:59,360 --> 00:09:01,040 Speaker 1: probably look at the end of the day at work. 168 00:09:01,120 --> 00:09:05,040 Speaker 1: Then don't do it right now. It's just it really 169 00:09:05,120 --> 00:09:07,320 Speaker 1: is that simple. And then you get to know the 170 00:09:07,360 --> 00:09:10,600 Speaker 1: sushi masters in the city who really are going out 171 00:09:10,600 --> 00:09:14,319 Speaker 1: of their way to get the best quality. Micro economic question. 172 00:09:14,320 --> 00:09:17,600 Speaker 1: And I'm looking at sushi sushi Zoe, I love the 173 00:09:17,640 --> 00:09:23,040 Speaker 1: sushi legend. Uh newsletter. Um the subtitle is great getting 174 00:09:23,040 --> 00:09:25,640 Speaker 1: mercury poisoning, so you don't have to there you go, 175 00:09:25,760 --> 00:09:28,960 Speaker 1: it's it's great. But but Peter, what's the markup? I mean, 176 00:09:29,000 --> 00:09:32,079 Speaker 1: if it costs a hundred seventy five dollars for a 177 00:09:32,160 --> 00:09:35,480 Speaker 1: hunk of fish the size of my you know, third figure, 178 00:09:36,800 --> 00:09:41,239 Speaker 1: who's cleaning up the markup on? You know, Larry Gagossian 179 00:09:41,320 --> 00:09:44,520 Speaker 1: and Masa on the Upper east Side, they are definitely mopping. 180 00:09:44,559 --> 00:09:48,120 Speaker 1: Why doesn't Danny Meyer do sushi? Um? Probably because he's 181 00:09:48,120 --> 00:09:53,040 Speaker 1: got too many morals. UM hate that um U. That's 182 00:09:53,080 --> 00:09:55,120 Speaker 1: probably an excellent idea. We should ask that the next 183 00:09:55,160 --> 00:09:57,400 Speaker 1: time we have Danny and um it is. It is 184 00:09:57,480 --> 00:10:00,480 Speaker 1: actually a very difficult business because the purchase of the 185 00:10:00,480 --> 00:10:04,000 Speaker 1: fish is a very whole thing. Yeah, um is the 186 00:10:04,040 --> 00:10:09,600 Speaker 1: markup though extreme, absolutely now part of getting the most 187 00:10:09,600 --> 00:10:12,839 Speaker 1: expensive wine on the wine list. Sorry seconds, so all 188 00:10:12,840 --> 00:10:14,679 Speaker 1: we got. This is more than forget about wine. This 189 00:10:14,760 --> 00:10:18,840 Speaker 1: is really important. Should mere mortals have fancy Japanese knives 190 00:10:18,840 --> 00:10:21,920 Speaker 1: in their kitchen or they so sharp and so fancy 191 00:10:22,080 --> 00:10:25,600 Speaker 1: they're a threat to our figures? Um, The answer to 192 00:10:25,640 --> 00:10:29,480 Speaker 1: that question is absolutely not most people. What Americans do 193 00:10:29,640 --> 00:10:32,960 Speaker 1: or normal people due to normal knives is good enough 194 00:10:32,960 --> 00:10:35,120 Speaker 1: for those knives. They should leave the Japanese knives to 195 00:10:35,160 --> 00:10:37,199 Speaker 1: me or get them turn me for Christmas. You were 196 00:10:37,240 --> 00:10:39,959 Speaker 1: a funt of wisdom. Bloomber Reserve. It is just out 197 00:10:40,200 --> 00:10:44,640 Speaker 1: with a really seriously intelligent article on sushi that Mike, Mike, 198 00:10:44,679 --> 00:10:51,760 Speaker 1: do you like this stuff? I love sushi. I think 199 00:10:51,760 --> 00:10:54,200 Speaker 1: twelve News says shake shack is what I'm looking at. 200 00:10:54,320 --> 00:10:56,320 Speaker 1: That was great, Peter Elliott, thank you. I have so 201 00:10:56,400 --> 00:10:58,319 Speaker 1: much Bloomberg Reserve just that. We'll do have a lot 202 00:10:58,360 --> 00:11:00,840 Speaker 1: more fun with his April issue as we do that 203 00:11:00,920 --> 00:11:05,000 Speaker 1: we'll go through April and into May. What a wonderful show. 204 00:11:05,440 --> 00:11:08,160 Speaker 1: Major shout out Mike Mayo C L s A for 205 00:11:08,240 --> 00:11:11,880 Speaker 1: that last effort. This is Bloomberg's surveillance