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Speaker 1: It is FED Day, of course, and the question for
Speaker 1: a lot of investors today, obviously is what does the
Speaker 1: FED do here? Did they go twenty five, do they
Speaker 1: go fifty? What kind of rationale does the FED give
Speaker 1: for whatever decision they do make, and what does it
Speaker 1: mean for this economy? Dennis Lockhart joins us. He's a
Speaker 1: former Atlanta FED president, and he joins us via zoom. Dennis,
Speaker 1: thanks so much for joining us here. How do you
Speaker 1: think your Federal Reserve will kind of act later this afternoon?
Speaker 1: What do you think we're going to hear from the Fed?
Speaker 3: Well, my expectation is that they will opt for a
Speaker 3: twenty five basis point to cut, but it could go
Speaker 3: either way. I do think it's a close call, and
Speaker 3: I could very much be wrong. I have to laugh.
Speaker 3: Usually I have more time for people to forget, but
Speaker 3: it's less than four hours until we'll find out, So
Speaker 3: I could be proven wrong very very quickly. I think
Speaker 3: a case can be made for either move, and if
Speaker 3: the committee is sort of ambivalent, often the leadership of
Speaker 3: the chair is asserted, and in this case, Chairman Powell
Speaker 3: may state his preference and I think then the Committee
Speaker 3: will go along with that.
Speaker 4: Why do you think, Dennis, it is such a close call.
Speaker 3: Because I think you can make a legitimate case and
Speaker 3: neither case is panicky, or is emergency based or whatever
Speaker 3: that twenty five basis points is appropriate or fifty with
Speaker 3: a little bit of catch up in it and perhaps
Speaker 3: a bit more of an insurance angle to it. So
Speaker 3: I think you can make a serious case for either decision.
Speaker 3: A fifty basis point move, of course, is not that
Speaker 3: the normal increment that the Fed typically cuts or raises,
Speaker 3: and it does have a little bit of a hint
Speaker 3: of panic, and I don't see any basis for that.
Speaker 3: That's why I'm opting for twenty five Dennis.
Speaker 1: If we were to see a dissenting vote today, would
Speaker 1: that be news? Would that mean anything to you? Should
Speaker 1: the market read anything into that?
Speaker 3: I don't think so. At first. I doubt that we
Speaker 3: will see a descending vote. If we see a descending vote.
Speaker 3: It might come from an inflation hawk who's still concerned
Speaker 3: about the level of inflation and the distance to two percent.
Speaker 3: The chair, I think, has welcomed adversity of opinion on
Speaker 3: the committee. You've heard him say that in his press conferences.
Speaker 3: I don't think one or two descents would mean that much.
Speaker 3: Having said that, at a momentous event like today, where
Speaker 3: they're pivoting policy in the first cut in what four years,
Speaker 3: they would, I think like to present a unified face.
Speaker 3: But it's not going to be a big deal if
Speaker 3: someone disagrees.
Speaker 4: So I was in Canada in Toronto yesterday and I
Speaker 4: had the pleasure of interviewing Carolyn Rodgers. She's the Deputy
Speaker 4: Governor of the Bank of Canada, and many times I
Speaker 4: tried to get her to tell me whether or not
Speaker 4: they were going to go another twenty five in October.
Speaker 4: The conversation eventually came into the transmission EFFECTI of monetary policy,
Speaker 4: and how it took a long time for the hikes
Speaker 4: to be felt, and then how it's going to take
Speaker 4: a long time for the cuts to be felt. How
Speaker 4: do we know what that transmission mechanism is when you
Speaker 4: have something like housing which seems to be a structural shift.
Speaker 3: Well, we don't know with any precision exactly what that
Speaker 3: mechanism is. It's estimated as short as a few months,
Speaker 3: maybe six months to eighteen months. What is generally accepted,
Speaker 3: of course, is the idea that monetary policy has its
Speaker 3: effect with a lag, and I think there's plenty of
Speaker 3: evidence if that's the case. Therefore, the decision that the
Speaker 3: FED makes today is not going to immediately have an
Speaker 3: enormous effect on the economy. It will take some time
Speaker 3: and it will accumulate over the coming months.
Speaker 1: Dennis, can you give us a sense of how this
Speaker 1: FED may proceed over the coming meetings over the next
Speaker 1: several quarters. Is this something in terms of the cadence
Speaker 1: of the cuts that they make. Is it's something they
Speaker 1: want to do in a chunky style? Do they do
Speaker 1: twenty five basis points every meeting? How do you envision
Speaker 1: that taking place?
Speaker 3: What I would expect to be a methodical, deliberate approach
Speaker 3: that doesn't bring a lot of surprises to the financial markets.
Speaker 3: The communications challenge around chunkiness to use your order or
Speaker 3: pauses and then a resumption and fifty versus twenty five.
Speaker 3: That requires some very very skillful communication and in order
Speaker 3: not to create unnecessary volatility. So I think once they've
Speaker 3: started this, they'll stay with a base case of twenty
Speaker 3: five basis points at each meeting until they feel it's
Speaker 3: time to pause.
Speaker 4: So based on that, the futures market is really out
Speaker 4: priced for that. So we're still looking at over one
Speaker 4: hundred basis point cut so far for this year if
Speaker 4: you take a look at work. So if it's a
Speaker 4: twenty five to twenty five kind of scenario, we still
Speaker 4: to price out as much as like, I don't know,
Speaker 4: thirty five forty basis points of cuts. How do you
Speaker 4: think that J. Powell does that or is it the dots?
Speaker 3: Well, he's not going to commit to much in the
Speaker 3: way of a path of policy, other than perhaps saying
Speaker 3: something general. Is it that the expectation of the committee
Speaker 3: is that there will be further reductions in the policy rate,
Speaker 3: and certainly beyond the end of the year. I think
Speaker 3: you'd be very careful about committing to anything. But I
Speaker 3: think in speeches and in FED speak in general, you'll
Speaker 3: get some sense that, and of course in the Summary
Speaker 3: of Economic Projections which will be published today, you'll get
Speaker 3: some sense of what they're thinking, and I suspect what
Speaker 3: you're going to see is that they're thinking of seventy
Speaker 3: five basis points by year end, So the markets are
Speaker 3: going to have to adjust that thinking, or the markets
Speaker 3: often have their own point of view.
Speaker 1: Do you think the timing of these FED cuts is
Speaker 1: appropriate here at datish or do you think perhaps this
Speaker 1: FED might have been at least a meeting maybe too
Speaker 1: late in terms of starting this process.
Speaker 3: Well, according to the minutes, there was a pretty serious
Speaker 3: discussion of the first cut being in July. They decided
Speaker 3: to defer that. One reason they did is because the
Speaker 3: interval between the July meeting the September meeting is the
Speaker 3: longest on the calendar, and they get quite a bit
Speaker 3: more information in that eight week period than they get
Speaker 3: in a six week period, for example. So I think
Speaker 3: they decided to hold off for more information. So what
Speaker 3: Jay Palse said at Jackson Hole that the time had come, Boy,
Speaker 3: you really can't be very more definitive than that. He
Speaker 3: had to be. He had to be very confident that
Speaker 3: he could lead his committee to this decision today. And
Speaker 3: that's probably because of how seriously they took the idea
Speaker 3: in July of making a cut in July. So to
Speaker 3: answer your question, maybe they're a meeting behind, But in
Speaker 3: the greater scheme of things, I don't think there is
Speaker 3: great danger associated with maybe being a little bit behind.
Speaker 4: All Right, Dennis, thanks a lot. We truly appreciate it.
Speaker 4: We appreciate all your insight on FED Day. Dennis Lockhart,
Speaker 4: former Atlanta FED President.
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Speaker 4: Joining us now. Also in the studio is Alo Lua Ganga,
Speaker 4: a US chief investment officer over at Mercer. So, okay,
Speaker 4: do you care about twenty five or fifty today? Or
Speaker 4: how are you looking at this monumental decision at too?
Speaker 5: She's laughing at me, you know, I'm laugh because there
Speaker 5: are two things. Personally, it's monumental because it's the first
Speaker 5: rate cut in years, so that's the big thing. But
Speaker 5: is twenty five basis point going to move the need? Unlikely?
Speaker 3: Right?
Speaker 5: Is just the direction that we're happy about we're finally moving.
Speaker 1: All right, So you got your MBA from Stanford. I'm
Speaker 1: not sure if you're aware, but yesterday Bloomberg business Week
Speaker 1: magazine came out with the rankings of MBA programs for
Speaker 1: the six year in a row. Stanford was number one,
Speaker 1: who Woo Duke was twelve. I don't know what they're
Speaker 1: doing down there, business Week, but I have to go
Speaker 1: have a talk with those people. But all right, so
Speaker 1: talk to us about the business at Mercier. What are
Speaker 1: your institutional clients, what are they what's changing these days
Speaker 1: or maybe in the last twelve to eighteen months back
Speaker 1: where they're allocating capital these days?
Speaker 5: So you know, we're talking about the rate cut. Is
Speaker 5: it a big deal? It could be, and it could
Speaker 5: be for defined benefit pension plans because those out there,
Speaker 5: they are still those out there. I mean a lot
Speaker 5: of them have benefited from the equity markets, right, so,
Speaker 5: like that's been great, but in a lower rate environment,
Speaker 5: the liabilities could become more valuable. So that's what we're watching, right,
Speaker 5: is that are you appropriately hedged? But then they have
Speaker 5: great equity portfolios. They have private equity portfolios that have
Speaker 5: done well and they've moved into private markets across the board.
Speaker 4: So what is that like rate threshold, right, because we're
Speaker 4: not going back to zero. So if it goes to
Speaker 4: like four, is that where allocations start to change or
Speaker 4: is it three? Like? How do you look at that?
Speaker 5: So I'll give an example of just the real estate
Speaker 5: capital markets, right, So, like financing has almost ground to
Speaker 5: a halt. It's really hard to finance things. Developers are
Speaker 5: having a hard time. They had one year interest rate
Speaker 5: type hedges and they're not moving. So an indication there
Speaker 5: of when things start working is rates low enough to
Speaker 5: get that to unfreeze the real estate capital markets. So
Speaker 5: it's great for mortgages, it's great for lending, it's great
Speaker 5: for borrowing, all of that stuff. So we start looking
Speaker 5: at activity and some those other areas private credit.
Speaker 1: Alex and I were just fascinated by the growth of
Speaker 1: private credit. How does that impact your institutional investor clients?
Speaker 1: Are they asking you to get more exposure to private credit?
Speaker 1: How do you do so?
Speaker 5: Private credit definitely has been one of the areas that's
Speaker 5: benefited from the higher rate environment. It's floating rate, so
Speaker 5: the debt covenants and the negotiations that happen there, mean
Speaker 5: that even though it's not syndicated loan, it's not publicly traded,
Speaker 5: there was more protections there, so lots of capital that
Speaker 5: was flowing into just senior direct lending. So clearly, as
Speaker 5: you're moving into a lower interest rate environment, could that
Speaker 5: be impactful. Yes, But on the senior direct lending side,
Speaker 5: there are other aspects of private credit that are attractive.
Speaker 4: So what are their areas also in private credit? And
Speaker 4: then also side note in terms of say commercial office,
Speaker 4: commercial real estate. I know that's not private credit, but
Speaker 4: like in terms of an asset class that's been really
Speaker 4: messed up.
Speaker 5: So I'll say, from a private credit standpoint, opportunistic credits.
Speaker 5: So some of the more distressed opportunities we're senior direct
Speaker 5: lending or you know, it's still relatively good. So the
Speaker 5: opportunistic credit space is great. They have more equity like properties.
Speaker 5: But to your point, if you go to something like
Speaker 5: real estate, real estate valuations, especially core real estate has
Speaker 5: been stabilizing outside of office and you know, offices is
Speaker 5: a different category in and of itself, because if you
Speaker 5: start looking at newer office buildings, older office buildings, what
Speaker 5: kind of rehab is there The rental everything. So office
Speaker 5: is still a little challenged, but for the most part,
Speaker 5: core real estate valuations outside of office has been stabilizing.
Speaker 1: I guess one of the challenges there for real estate
Speaker 1: we've heard from other folks in the real estate business,
Speaker 1: because Alex and I like to talk to as many
Speaker 1: people in that commercial real estate business as we can,
Speaker 1: is just the banks aren't quite as constructive on real
Speaker 1: estate commercial real estate as maybe people would like, So
Speaker 1: it's tough to find financing. Maybe you can get it
Speaker 1: to the private credit market, but you can't just go
Speaker 1: to your relationship bank and you know, necessarily get a
Speaker 1: mortgage on a big piece of commercial.
Speaker 5: Yeah, real estate is definitely the area that's taken one
Speaker 5: of the the hardest hits with the rise in the
Speaker 5: raid environment. To be frank again, it's painted almost with
Speaker 5: a broad brush. It truly is office that's having the
Speaker 5: toughest time. Valuations in other areas has been challenged as well,
Speaker 5: but it does look like it's starting to stabilize.
Speaker 4: What other trends are you seeing right now in terms
Speaker 4: of interest, money flow, questions, worry spots.
Speaker 5: So there's been a big focus with regards to infrastructure
Speaker 5: and this started some time ago when we started seeing
Speaker 5: the capital flows from the Inflation Reduction Act and finally
Speaker 5: dollars going to work there. So that's a focus as
Speaker 5: we're going into the election. It's also a focus to
Speaker 5: see if some of those trends stay. So that's one
Speaker 5: Private equity has always been an area of focus. However,
Speaker 5: venture capital, that a lot of clients were very focused
Speaker 5: on the new innovative types of areas, had slowed somewhat
Speaker 5: because from a capital standpoint, that's the law, guest, time
Speaker 5: to get your money back. So venture has been real
Speaker 5: estate has taken ahead. Venture has taken a little bit
Speaker 5: of a hit as well.
Speaker 1: How about just the big tech trade, the Magnificent seven
Speaker 1: trade that John Tucker's been in for the past two years.
Speaker 1: She's just clipping coupons on the way to the bank.
Speaker 1: Is that still a thing or do we have to
Speaker 1: go look for other areas of opportunity in the marketplace.
Speaker 5: It's the talk about the magnificent seven, it becomes six
Speaker 5: or what have you. I keep saying it is really
Speaker 5: because of the index construction, right, So like the weight
Speaker 5: in the index is what makes it the big focus.
Speaker 5: It lifts up everything. But if you remove them and
Speaker 5: look at the rest of the index, like like we've
Speaker 5: seen some decent returns. Of course, earnings growth coming out
Speaker 5: of the earning season was good, but the focus on
Speaker 5: the seven was because of the weight in the index.
Speaker 5: So these types of rotations happened.
Speaker 4: But the theme of it in terms of AI, which
Speaker 4: also goes back to your infrastructure play too, how do
Speaker 4: your clients then, not straight up in video or the
Speaker 4: equity market, how can they invest in that trend?
Speaker 5: I mean, right now, from a publicly traded standpoint, right,
Speaker 5: there are only a few limited options. However, from a
Speaker 5: private market standpoint, there are lots of capital that's going
Speaker 5: into new and innovative companies. It still is venture. It's
Speaker 5: a longer term type of trend. What we are seeing
Speaker 5: is investigating from an AI perspective, there is efficiencies, right,
Speaker 5: so from redundant type of task, but like what are
Speaker 5: we really going to get from a benefit standpoint? There's
Speaker 5: a lot of work going into and seeing how you
Speaker 5: can integrate it into your day to day, but more
Speaker 5: private equity and venture investments to get into AI, and
Speaker 5: then there are only very few from a publicly traded
Speaker 5: company standpoint, did.
Speaker 4: We see Microsoft yesterday unveiling that AI infrastructure fund with yeah,
Speaker 4: I mean huge amount of money. So speaking of that
Speaker 4: non public opportunity.
Speaker 1: Yeah, I thought the biggest tech trend was me upgrading
Speaker 1: my iPhone.
Speaker 4: Okay, can we just say so, I put my phone
Speaker 4: down next to Paul. I've had my phone the entire
Speaker 4: time known me, and because he ordered this new iPhone
Speaker 4: sixteen pro, he looks at it and starts judging it
Speaker 4: because he has a chip. So now we've become an
Speaker 4: iPhone sixteen pros.
Speaker 5: No, I'll say, my husband does the same thing. Really,
Speaker 5: He's like he judges my phone and then I'll get
Speaker 5: a new one and like a hint to change my exactly.
Speaker 1: So that's that's a tech cycle that you can use.
Speaker 1: Replacement cycle all right in a fixed income space, I
Speaker 1: don't know. I mean to your treasure's three point sixty
Speaker 1: five percent, it's not the five percent I had a
Speaker 1: few months ago, but it's still for like no risk,
Speaker 1: that's a pretty good return. Do I do that or
Speaker 1: do I take credit risk?
Speaker 5: So to your point, it's not the five percent that
Speaker 5: it was before. Right now, here's you know we're at
Speaker 5: current levels, but we know the direction is lower right,
Speaker 5: So it's how long are you going to be able
Speaker 5: to sit on that? For as long as you can,
Speaker 5: that's great. But for our investors that are more institutional
Speaker 5: in nature longer term, they don't typically turn over their
Speaker 5: portfolios as much. So if you're focusing on the long term,
Speaker 5: you go to the spaces that have a little bit
Speaker 5: more longevity and where you can get raded. So they
Speaker 5: were shorter duration at first, you know, maybe a few
Speaker 5: years ago, and that's moved. They're now investing in equities,
Speaker 5: private credit to your point, and looking at areas where
Speaker 5: valuations were depressed. So real estate is an area now
Speaker 5: that we are looking closely at.
Speaker 4: So when you mentioned the areas that have growth, a
Speaker 4: lot of it does tie into fiscal policy and then
Speaker 4: obviously that becomes like an election risk, et cetera. But
Speaker 4: is this time different? Oh God, I hate that I
Speaker 4: just said that. There's like so much fiscal coming out
Speaker 4: of DC regardless of who wins in November, and no
Speaker 4: matter who wins, the will be fiscal spend on stuff.
Speaker 4: And this is in comparison to say Europe or even Canada, Like,
Speaker 4: how do you look at that divergence?
Speaker 5: So we spend a lot of time looking at the
Speaker 5: policy or potential policy that's being discussed because the elections
Speaker 5: are important, of course they're important, but the more important
Speaker 5: thing is can you get anything through? So what's the
Speaker 5: makeup of the House, what's the makeup of Senate that
Speaker 5: will truly drive and determine what we can do on
Speaker 5: to go ward basis. So we're watching some of those,
Speaker 5: you know, more local type elections as well.
Speaker 1: It's funny they'd be interviewing somebody from BNP Power Boss
Speaker 1: Strategists there this morning and they had a great flow
Speaker 1: chart in their piece of research. It's basically if then
Speaker 1: kind of thing. So if the you know, if it's
Speaker 1: you know, the economy is good, the economy's bed, if
Speaker 1: it's the Democrat, if it's Republican, here all the possible outcomes,
Speaker 1: and they kind of had to play it there and
Speaker 1: it just kind of made it very clear so again
Speaker 1: again that you can't really hedge politically, can you. So
Speaker 1: it's just yeah, and so I guess the question becomes,
Speaker 1: you know, can anything actually get done once whoever is
Speaker 1: in the White House is in the White House.
Speaker 5: That's the point. So whoever is in the White House
Speaker 5: and then can they get anything done.
Speaker 1: Right in the interim, we wait for the FED at
Speaker 1: two o'clock.
Speaker 4: And then after that, then what you're going to talk
Speaker 4: about tomorrow morning?
Speaker 1: What did what did that? It was twenty four hours.
Speaker 1: I don't know. It's just economic data coming up.
Speaker 5: But you can drag it out for the week.
Speaker 1: There'll be some earnings. Ganga Chief US Interest investment Officer
Speaker 1: for Mercer Joining is here in our Bloomberg Interactive Broker studio.
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Speaker 1: We've got some news in the global airspace airline business
Speaker 1: looks like Alaska Airlines, the Jerry Garcia Airline and Hawaiian
Speaker 1: the merger looks like it's going to be cleared to close.
Speaker 1: It's an apartment of camp, it's an innuit. Please, now,
Speaker 1: I understand that George Ferguson, he knows all this stuff.
Speaker 1: Senior Airspace and Airlines zanols for Bloomberg Intelligence. So George,
Speaker 1: what's it meaning for Alaska and Hawaiian to get approval
Speaker 1: here where where does this combined dentity go? How competitive
Speaker 1: can it be? Is this a good deal?
Speaker 6: Yeah?
Speaker 1: So I think it's.
Speaker 3: Uh.
Speaker 7: I think it's a good deal for the US consumer
Speaker 7: because I think there was a risk that potentially Hawaiian
Speaker 7: could have gone out of business, and so I think,
Speaker 7: really what this whole thing adds up to is Hawaiian was,
Speaker 7: you know, was a bit distressed. They've had some problems
Speaker 7: in their core businesses, especially from you know, wildfires, Japanese travel,
Speaker 7: things like that. It just hurt their their core business,
Speaker 7: their their balance sheet was stressed. And so Alaska coming
Speaker 7: in and taking them over, you know, shure as that
Speaker 7: they continue to exist. The combinity had you know, has
Speaker 7: a footprint that looks like or route network that looks
Speaker 7: like West Coast US into Alaska, and then Alaska has
Speaker 7: some long haul into Asia. So it makes Alaska's operations
Speaker 7: a little more complex with some long haul wide body aircraft.
Speaker 7: For most US consumers, it's not They're not going to
Speaker 7: really be able to tell. But I think the US
Speaker 7: Department of Transportation, Department of Justice figured out that, you know,
Speaker 7: like the Spirit in the Spirit Jet Blue merger purchased
Speaker 7: by Jet Blue, whatever you want to call it. You know,
Speaker 7: I think letting that fail means it's Spirits in difficult straits.
Speaker 7: Alaska would have been sorry, Hawaiian had been in a
Speaker 7: similar place, and I think they've decided let's just let
Speaker 7: this go.
Speaker 4: Does this mean that the Spirit deal could get on
Speaker 4: the lookthrough or that's definitely dead.
Speaker 7: I think that's definitely dead from a Jet Blue perspective.
Speaker 7: I'm not sure if Justice would think differently about it now,
Speaker 7: but I think it's dead.
Speaker 1: George, what's the current status of just demand for air
Speaker 1: travel these days? What are the airlines saying these days?
Speaker 7: I mean, you know, what we saw in two Q
Speaker 7: was that budget travel definitely looked like it was taking
Speaker 7: more of the of a demand. Although you know, it
Speaker 7: looks like some of those travelers are fading a little bit.
Speaker 7: And I say, although, because we saw a bunch of
Speaker 7: capacity come to that marketplace, right, I think, really what
Speaker 7: we're started to see in two Q this year was
Speaker 7: a fading of this bounce back travel boom where you know,
Speaker 7: people were paying anything it took to go on vacation.
Speaker 7: And so I suspect we're going to continue to see
Speaker 7: that as we get into three Q. We're actually working
Speaker 7: through schedules right now for the US airlines as we
Speaker 7: do kind of as we close the quarters down, and
Speaker 7: you know, we're still seeing a decent amount of capacity
Speaker 7: coming to the marketplace. So to say decent, you know,
Speaker 7: we're looking at domestic the other day five six percent
Speaker 7: growth in seak capacity and you really can't do that
Speaker 7: in a market that you know, the US economies grow
Speaker 7: in a couple percent and you don't have this bounce
Speaker 7: back travel. So we still think three Q looks soft ish.
Speaker 7: It's not as bad as two Q. Some of the
Speaker 7: capacity growth isn't there. We're interestingly, we're seeing more capacity
Speaker 7: growth come in from the big full service carriers than
Speaker 7: we're seeing for the budget low cost and notable our
Speaker 7: carriers like Southwestern, Jet Blue literally pulling back in capacity
Speaker 7: city as they go into the end of the year.
Speaker 4: Right, So you have the big guys are able to
Speaker 4: compete a little more in capacity and then price, and
Speaker 4: then the other guys can and that gets confusing. So
Speaker 4: this is a dumb question. But if I take a
Speaker 4: look at the big guys, like can you rank these
Speaker 4: for me here? So you get the Delta American United,
Speaker 4: They're gonna be the top three, right, what comes after that?
Speaker 7: Now Southwest Southwest is the number four, okay, one of
Speaker 7: the biggest carriers in the country. And then you go
Speaker 7: into the Alaska's Jet Blues those folks, sorry, so.
Speaker 4: Did Alaska and Hawaiian airlines like help them get a
Speaker 4: big boost?
Speaker 3: Like?
Speaker 4: Are they in the top five? Now?
Speaker 7: Well, Alaska is going to be four or five and
Speaker 7: Jet Blue is going to be at four or five.
Speaker 7: So well, Alaska Hawaiian combination probably jumps them a bit
Speaker 7: above Jet Blue. I haven't looked at this recently. Jet
Speaker 7: Blue is going to be number five if they got
Speaker 7: spirit and those two are kind of neck and necks,
Speaker 7: and I guess they're slightly ahead now Alaska.
Speaker 1: All right, George, what we got in your phone? We
Speaker 1: need our periodic update of Boeing. I know the most
Speaker 1: recent news was bowing freezing hiring to preserve cash, and
Speaker 1: you know, what's the update on the strike and kind
Speaker 1: of where we are with Boeing.
Speaker 7: So it goes on. Obviously, you know, folks are talking.
Speaker 7: I understand that there's a supplier discussion going on today
Speaker 7: out in the Pacific Northwest. I because Boeing starts to
Speaker 7: brief suppliers. If it continues, I suspect that, you know,
Speaker 7: Boeing's draw off suppliers, their off take of the components
Speaker 7: they're building, is going to have to slow to continue
Speaker 7: to preserve cash. I just don't see Hiring doing you know,
Speaker 7: that much for the cash flow of Boeing, because again,
Speaker 7: as it drags on, they have to start to really
Speaker 7: worry about how much cash they're they're burning. They would
Speaker 7: prefer not to go back to capital markets to show
Speaker 7: up their balances. We think they're probably going to be
Speaker 7: close to nine billion in balances as they end three
Speaker 7: Q and that's going to be pretty tight because that's
Speaker 7: roughly around what they say they need to run the company.
Speaker 7: I'm sure everybody can tighten their belt, every company can
Speaker 7: tighten their belt and get lower, but they need to
Speaker 7: be very very mindful of cash burn here.
Speaker 4: Yeah. I was like, oh, that's treading the line there.
Speaker 4: We was talking to the guy over at Moody's who
Speaker 4: is putting the company a risk on downgrade. If they
Speaker 4: get a downgrade from like fish S and P and
Speaker 4: Moody's like, what would that mean? That would be huge,
Speaker 4: a huge fallen angel.
Speaker 7: Right, yeah, it's a big fallen angel. I mean, it's
Speaker 7: the not the end of the world, right, Companies managed
Speaker 7: through this.
Speaker 1: No, No, I mean it means.
Speaker 7: You're going to go to capital markets. If you go
Speaker 7: to debt markets, it's just going to cost you more
Speaker 7: to raise write your debt. And a company like Bowing
Speaker 7: needs this good mix of debt and equity to make
Speaker 7: the returns work for the equity, and so you kind
Speaker 7: of hate to be paying higher interest rates. You're going
Speaker 7: to see you know, some funds that are debt funds
Speaker 7: can't hold less investment grade paper. They'll end up having
Speaker 7: this discorged some of that Boeing paper. That means that
Speaker 7: you'll see prices gap out in it. Again, it's not.
Speaker 1: The end of the world.
Speaker 7: You prefer be prefer to be raising money cheaper than
Speaker 7: what they will be in the high yield markets. But
Speaker 7: you know, customers, I don't think go away because of it.
Speaker 7: Nobody can break their commitments for airplanes because of it.
Speaker 7: Suppliers don't really have other places to go for aerospace business. Right,
Speaker 7: they could go to Airbus, which is investment grade, and
Speaker 7: Boeing has to continue to rebuild that balance sheet as
Speaker 7: they get things like this strike past them.
Speaker 4: All right, George, we appreciate you. Thank you very much.
Speaker 4: George Ferguson Bloomberg Intelligence and your aerospace, defense and airlines
Speaker 4: analysts are joining us. There.
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live
Speaker 2: weekdays at ten am Eastern on applecar Play and Android
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Speaker 2: Just say Alexa play Bloomberg eleven thirty.
Speaker 1: John Kapples Joints. He's the CEO for Pivotal Path joint us.
Speaker 1: Hearn Bloombergate Active Broker Studio. John Real quickly just tell
Speaker 1: us what you guys are doing over a Pivotal Path
Speaker 1: as released to the Hedge Fund Business.
Speaker 8: Sure, thank you, Paul So. We are a hedge fund
Speaker 8: research firm and we work with some of the world's
Speaker 8: largest hedge fund investors and Dowmance pensions, sovereign wealth funds
Speaker 8: to provide them with the most comprehensive set of data,
Speaker 8: information and analysis so they can source hedge funds, evaluate them,
Speaker 8: monitor them, and benchmark them.
Speaker 1: Where is the money going to within the hedge fund
Speaker 1: asset class, where's the money been going to most recently?
Speaker 8: Sure so, hedge fund as an asset class is a
Speaker 8: bit difficult because they trade all asset classes. So if
Speaker 8: we were to focus on the equity strategies in particular,
Speaker 8: just like the markets, they have made a significant amount
Speaker 8: of their returns on the heels of magnificent seven and
Speaker 8: a lot of big tech. Going into this FED rate cut,
Speaker 8: they certainly are more bullish than they have been over
Speaker 8: the last couple of years, and that means that a
Speaker 8: larger than expected rate cut is probably going to benefit
Speaker 8: them in general.
Speaker 1: Ok So I mean the as an asset class, how
Speaker 1: do you frame out for your clients how they should
Speaker 1: use hedge funds, how wou should be part of a
Speaker 1: diversified portfolio.
Speaker 8: Sure so, again that's kind of the difficulty of calling
Speaker 8: it an asset class. It can be, but in reality
Speaker 8: it's a better way to well, it's trading strategies across
Speaker 8: many assetsses. Right, So, when you look at long short equity,
Speaker 8: many of our clients large pension funds, they consider it
Speaker 8: an extension of their equity portfolio. When they look at
Speaker 8: fixed income relative value or long short credit, it's off
Speaker 8: an extension of their fixed income portfolio. For other diversifying
Speaker 8: strategies like global macro and managed futures and multistrats, it's
Speaker 8: going to have a different type of role in the
Speaker 8: portfolio to maybe minimize downsides, provide uncorrelated sources of returns,
Speaker 8: and hopefully alpha.
Speaker 1: Is one of the things I've noticed being on wall
Speaker 1: streets since the mid eighties is just a the growth
Speaker 1: of hedge funds, but b the seems like the consolidation
Speaker 1: that if you're a big like Millennium or City or
Speaker 1: zero point seventy two, you can get money, tons of money.
Speaker 1: It flows there. But if you're like the hot shot
Speaker 1: trader Morgan Sanley has had three or four years and
Speaker 1: once a go ahead raise a billion dollars, that doesn't
Speaker 1: seem to be as available today as maybe it was
Speaker 1: twenty years ago. Are we seeing too much concentration, do
Speaker 1: you think in a hedge fund business?
Speaker 8: So, I think it's a great question, and I think
Speaker 8: the answer was yes. Up until about a year and
Speaker 8: a half ago, we saw the new launches for hedge
Speaker 8: funds significantly down. We saw new capital for emerging managers
Speaker 8: significantly down. That has all actually changed. We're seeing a
Speaker 8: huge trend this year where we're tracking almost one hundred
Speaker 8: and fifty new launches in twenty twenty four into the
Speaker 8: second quarter of twenty five. But more importantly than that,
Speaker 8: these new launches come from hedge funds that are above
Speaker 8: a billion dollars in assets, So in terms of pedigree,
Speaker 8: we're seeing significant amount of quality launches. But in addition
Speaker 8: to that, a lot of the capital that they're receiving
Speaker 8: is actually from the multi straps themselves. Yep.
Speaker 1: And we actually have a Bloomberg exclusive story out on
Speaker 1: the Bloomerg terminal today Millennium Citadel breed a fourteen billion
Speaker 1: dollar pack of hedge fund cubs. So it was just
Speaker 1: like Julian Robertson from Tiger seated all his cubs. Now
Speaker 1: it's Ken Griffin and i Isy Englander from the leading.
Speaker 4: All the cubs. Wait, so is that just because there's
Speaker 4: just more money out there? Or like, why is that
Speaker 4: so you basically have the big guys and investing in
Speaker 4: the little guys and the whole thing, Like, why are
Speaker 4: we seeing it like that? And what kind of strategies?
Speaker 8: Yeah, I mean there's a number of reasons. I'd say
Speaker 8: one of the primary reasons is that the institutional investors
Speaker 8: themselves are starting to based on multistrap performance that actually
Speaker 8: has been slightly down, not very much, but slightly down,
Speaker 8: and also relative to a higher risk free rate, they've
Speaker 8: been looking to create more transparency and doing that through
Speaker 8: single strategies. It's a lot easier to understand along short
Speaker 8: equity strategy focused on technology than a multistrat that may
Speaker 8: have three hundred different pms in it. So part of
Speaker 8: it's the investor base that's pushing that. The other part
Speaker 8: of it is that the investors are also wanting reduced fees,
Speaker 8: and running these large multistrats is extremely expensive. Part of
Speaker 8: that's for signing bonuses, retention bonuses, and things like that.
Speaker 8: That's part of the biggest amount of overhead that has
Speaker 8: often passed through to the investors themselves. And so a
Speaker 8: lot of these pms who have done extremely well inside
Speaker 8: of these pod shops or multistrats are now seeing an
Speaker 8: opportunity to spin out, maybe change their quality of life
Speaker 8: a little bit, and the multistrats themselves are saying, you
Speaker 8: know what, we should actually fund that and be a
Speaker 8: part of that, as opposed to losing that talent and
Speaker 8: in fact they can do so and win in the
Speaker 8: same time because they can invest in a separate account
Speaker 8: and they can still have control but also reduce their
Speaker 8: overhead costs and the fees that a lot of their
Speaker 8: investor clients are not happy with.
Speaker 1: I don't know for me. One of the biggest piece
Speaker 1: of news in the hedgewind business rulers just over the
Speaker 1: last couple of days was Steve Cohen announcing that he
Speaker 1: was gonna step away some active management of his funds.
Speaker 1: That must have been a buzz within your industry. What
Speaker 1: are people saying about that? Absolutely?
Speaker 8: I mean, he's definitely one of the pioneers in the industry.
Speaker 8: He's one of the most well respected investors for sure.
Speaker 8: One of the issues in the hedge fund industry has
Speaker 8: always been succession, Right can you get past the founder
Speaker 8: and get to the next generation of talent and continue
Speaker 8: to build a high quality institutional business. And that's something
Speaker 8: that we still haven't seen that many examples of. So,
Speaker 8: you know, he says he's going to obviously stay in
Speaker 8: involved in the business, and that's public information, but we're
Speaker 8: always looking to see can that next generation of talent
Speaker 8: manage the business continue to grow assets and continue beyond
Speaker 8: their founder.
Speaker 4: What kind of strategies right now are doing well? Like,
Speaker 4: what are hedge funds broadly doing, how are they positioned?
Speaker 4: Like what what are some of your big takeaways on that?
Speaker 8: Yeah, I mean there are a number of hedge fund
Speaker 8: strategies doing well this year, and VIDA well, the TMT
Speaker 8: or technology, media and telecom managers absolutely, that's been a
Speaker 8: big part, and companies in similar you know AI exposure.
Speaker 8: But beyond that, we've also seen financials come back, you know,
Speaker 8: as we've seen in the market with the market goes,
Speaker 8: a lot of the hedge funds because they are often
Speaker 8: long biased, especially in sector focused strategies. So financials is
Speaker 8: leading the way. Healthcare is also a very strong performer
Speaker 8: this year, and these are sector focus managers in biotech,
Speaker 8: in pharmaceuticals, but especially biotech. And then outside of that,
Speaker 8: the multistrats continue to do well. They're you know, up
Speaker 8: about seven percent year to date. That's well ahead of
Speaker 8: the risk free rate and it's all uncorrelated. Lastly, it's
Speaker 8: the equity quant managers that had been kind of left
Speaker 8: for dead after twenty twenty, where they had a five
Speaker 8: year period of generating almost no returns. Over the last
Speaker 8: three plus years, they've been annualizing over nine and a
Speaker 8: half percent, again uncorrelated, purely in the form of alpha,
Speaker 8: and so investors are turning back to systematic and quantitative
Speaker 8: managers as well.
Speaker 1: And just broadly defined money still going to hedge funds right,
Speaker 1: still a net inflow.
Speaker 8: Year after year, so this year not really, but it's
Speaker 8: not for a lack of interest. It's actually much more
Speaker 8: related to the lack of distributions.
Speaker 1: In private equity.
Speaker 8: All of the clients that we speak to are actually
Speaker 8: more interested in hedge funds because they performed so well
Speaker 8: since COVID and because of the greater liquidity that they offer.
Speaker 8: And so we're seeing even from private credit, we're seeing
Speaker 8: for the first time surveys are now telling and our
Speaker 8: clients are saying the same thing that they're more interested
Speaker 8: in the liquid side of credit than in private credit.
Speaker 8: Same thing in private equity. They're starting the pendulum swinging
Speaker 8: back towards public equities. The problem is a lot of
Speaker 8: these investors lack of the liquidity to do so, so
Speaker 8: assets are not really growing that much beyond organic returns.
Speaker 8: And in addition to that, even though I've talked about
Speaker 8: all these new launches. The capital is oftentimes being recycled
Speaker 8: from those multi stratchs themselves as opposed to new capital
Speaker 8: flowing in. But the interest is there, all.
Speaker 1: Right, John, Really interesting stuff. Really appreciate chatting with you.
Speaker 1: I noticed that your firm, You and your firm were
Speaker 1: represented in this Bloomberg are citing your research. John Kaplis's
Speaker 1: CEO of Pivotal Path, give us an update on what's
Speaker 1: happening in the world of hedge funds.
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live
Speaker 2: weekdays at ten am Eastern on applecard Play and Android
Speaker 2: Auto with the Bloomberg Business app. You can also listen
Speaker 2: live on Amazon Alexa from our flagship New York station
Speaker 2: Just say Alexa playing Bloomberg eleven thirty.
Speaker 4: It's been dank because you haven't heard you yields a
Speaker 4: little bit higher, stocks going a whole lot of nowhere.
Speaker 4: Joining us now for his day is Jeffrey Cleveland, chief
Speaker 4: economist over at paid An a Regal. All right, Jeffrey,
Speaker 4: twenty five or fifty place your bets twenty five?
Speaker 9: Why I don't see the urgency to cut by fifty?
Speaker 9: I think you know stocks are at all time highs
Speaker 9: layoffs are quite low. We had a decent retail sales
Speaker 9: report yesterday. So usually if the FED goes faster, it's
Speaker 9: because we're in an obvious financial crime or we're in
Speaker 9: a recession. And I don't think you can make either
Speaker 9: of those cases or of those arguments. So it seems
Speaker 9: like twenty five would be the best path here. But
Speaker 9: I don't want to protest too much. I mean, I
Speaker 9: think we're gonna go middle of next year will be
Speaker 9: you know, four percent on FED funds. End of next year,
Speaker 9: end of twenty five will be at three and a
Speaker 9: half percent. So they want to go faster. I want protest.
Speaker 10: It's good for stocks, good for bonds.
Speaker 1: I like it. Jeffrey, what do you think, aside from
Speaker 1: the actual you know, move on the rates, what are
Speaker 1: you gonna be looking for from the messaging, from the
Speaker 1: body language and all that kind of parlor game that
Speaker 1: folks play. What are you gonna be looking for in
Speaker 1: this meeting?
Speaker 10: Well, probably first the dots.
Speaker 9: You know, as of June, we had one cut for
Speaker 9: this year and then we had about four next year.
Speaker 9: So look for the change in the median dot where
Speaker 9: they see the policy rate this year and next year.
Speaker 9: That's some that's possibly some disappointment for the market because
Speaker 9: market already expects a lot of cutting out over the
Speaker 9: next eight teen months. I don't even know where that's
Speaker 9: whether that's going to be confirmed by the dots so
Speaker 9: well exactly.
Speaker 4: So are we just looking at like a bond sell
Speaker 4: off if they go twenty five and don't confirm almost
Speaker 4: you know, five cuts this year?
Speaker 9: Yeah, potentially potentially because the bond market, It's like at
Speaker 9: the beginning of the year, Alex, the bond market was
Speaker 9: expecting seven rate cuts I think at some point in January.
Speaker 9: So far we haven't had any rate cuts, so the
Speaker 9: bond market was wrong about that. So in this short run, yeah,
Speaker 9: that could cause some volatility, you know, So that's an
Speaker 9: issue today.
Speaker 10: I think also the messaging.
Speaker 9: I think one, you know, if I was going to
Speaker 9: build the case to cut more quickly, I would just say, hey,
Speaker 9: the inflation threat is gone and the real threat now
Speaker 9: is you know, economic downturn or late further labor market leakness.
Speaker 9: And then I would say to everyone, hey, we don't
Speaker 9: need to be at five thirty on the funds rate
Speaker 9: if inflation is not a risk we need to get
Speaker 9: back to neutral.
Speaker 10: And we want to get there more quickly.
Speaker 9: That would be the argument, would say, So how the
Speaker 9: FED chair tells the story today and the press conference
Speaker 9: will also be important to take in.
Speaker 1: So, Jeffery, is it your belief at this point in
Speaker 1: time that the economy is in fact in decent shape. Yes,
Speaker 1: maybe slowing certain parts, but in decent shape.
Speaker 5: Yeah.
Speaker 9: Absolutely, I mean layoffs are low. I think GDP in
Speaker 9: the current quarter is tracking two two and a half percent.
Speaker 9: We think for the full year will be will be
Speaker 9: almost two and a half percent on GDP.
Speaker 2: Paul.
Speaker 9: The unemployment rates at four point one four point two
Speaker 9: percent we think at year end, So that is still
Speaker 9: a great environment. Now you've got the FED cutting, So
Speaker 9: this is very bullish for risk assets. I think over
Speaker 9: the over the medium term, great for bonds, great for stocks.
Speaker 4: Where in stocks though I think it was Bank of America,
Speaker 4: but saying this is a great point for mid cap
Speaker 4: stocks because you get the valuation boosts from small caps
Speaker 4: without kind of the risk and the slowing sales growth,
Speaker 4: but you don't have sort of the top line like
Speaker 4: you would for large.
Speaker 9: Cap Yeah, I mean, I think that's a decent argument
Speaker 9: I just think that really for me, and if the
Speaker 9: business cycle has more room to go, then stocks will
Speaker 9: continue to make new highs, especially if.
Speaker 10: You have now a supportive FED.
Speaker 9: So that's the lesson of history and all the different
Speaker 9: business cycles. When you get to the end of the
Speaker 9: business cycles when you really want to get worried about
Speaker 9: equities and maybe get more defensive.
Speaker 10: I don't think we're there yet. In the next six
Speaker 10: to twelve months. I think the economy will continue to.
Speaker 9: Grow so more like I guess the nineteen ninety style
Speaker 9: soft landing, that would be what I envisioned for the economy.
Speaker 1: Hey, Jeffrey, how about the US labor market. That's obviously
Speaker 1: something that the FED looks carefully at here. What's your
Speaker 1: kind of take on where we are with the labor market?
Speaker 9: You know, well, everyone's been talking about the unemployment rate rising,
Speaker 9: so in our view, that has you know, that has happened,
Speaker 9: but it's due to a you know, perhaps good reason
Speaker 9: expansion and labor supply that has helped the FED actually
Speaker 9: because that has eased some of the labor supply demand
Speaker 9: mismatch wages have cooled a little bit. I think from
Speaker 9: a central bank perspective, they like to see that the
Speaker 9: labor market is in balance, but it has pushed up
Speaker 9: the unemployment rate a little bit. I don't think we
Speaker 9: uh the labor market is. It's definitely job growth has slowed,
Speaker 9: but we're still seeing a decent enough job growth when
Speaker 9: you look at the three month moving average of non
Speaker 9: farm payrolls to keep I think downward pressure on the
Speaker 9: unemployment rate. So when you look at our forecast out
Speaker 9: into the middle of next year, still have a pretty
Speaker 9: low unemployment rate, right around four point one four point
Speaker 9: two percent.
Speaker 4: Okay, but that's the case, then why do we need
Speaker 4: like nine rate cuts?
Speaker 10: Yeah?
Speaker 9: I mean I don't think you need nine. May I
Speaker 9: think you could build you know, in our in our
Speaker 9: model of it, you could build a case for let's
Speaker 9: say three twenty five basis point cuts this year Alex,
Speaker 9: and then two in the first half of next year.
Speaker 9: So more like five not nine. Why Because you don't
Speaker 9: need to be at five thirty on the funds rate.
Speaker 9: If inflation is continuing to moderate, you can you can
Speaker 9: take your foot off the brake a little bit if
Speaker 9: you will, so, but nine. I can't get on board
Speaker 9: with nine rate cuts at this point. That's much more
Speaker 9: calamitous situation. I think that some investors have in mind.
Speaker 1: Yeah, that sounds about right. Jeffrey Cleveland, Chief Economist, Peyton
Speaker 1: and Regal.
Speaker 2: You're listening to the Bloomberg Intelligence Podcast. Catch us live
Speaker 2: weekdays at ten am Eastern on Applecar Play and Android
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Speaker 2: live on Amazon Alexa from our flagship New York station.
Speaker 2: Just say Alexa Play Bloomberg eleven thirty.
Speaker 1: Let's take a look at some of the regulatory aspects
Speaker 1: for m and A. Jenriy, senior litigation analysts for Bloomberg Intelligence.
Speaker 1: It joins us here Tapestry Capri. What's going on with
Speaker 1: that big deal?
Speaker 6: Yeah, you know, I deal to it. A lot of
Speaker 6: people were surprised at the FTC sew to try to
Speaker 6: block this wrapped trial. Yesterday was about an eight day
Speaker 6: trial and closing arguments are coming up on September thirty.
Speaker 6: I think the judge wanted a little time in between
Speaker 6: to look at the evidence.
Speaker 1: And this is.
Speaker 6: All about two companies that would bring together handbags of
Speaker 6: the brand's coach Kate's and Michael Cores of course, and
Speaker 6: yes exactly, and the FTC is concerned that means they
Speaker 6: would have too much market share in an overly concentrated
Speaker 6: market for what they call affordable luxury or accessible luxury handbag.
Speaker 4: I mean whatever Capri has westatchemed on me too. I
Speaker 4: appreciate they're not handbags, but come on now, so what
Speaker 4: do you think is going to happen?
Speaker 6: You know, it's funny. I went into this thinking that
Speaker 6: the FTC would win, and I came out after trial.
Speaker 6: I sat through most of it now thinking that the
Speaker 6: companies will win. They did a really good job defending
Speaker 6: the market. And you know, the reason that initially I
Speaker 6: thought it could go to the FTC is because it appeared,
Speaker 6: at least superficially that they had a lot of documents
Speaker 6: that showed that these companies really only considered each other
Speaker 6: when it came to pricing and promotions and innovation with
Speaker 6: the bags and changes in the bags. They suggested they
Speaker 6: had a lot of data and evidence. You know, it
Speaker 6: seemed that they would, but it just didn't really come
Speaker 6: out in trial. And what we heard from witnesses was
Speaker 6: really compelling testimony about how dynamic and changing the market is,
Speaker 6: how how much competition there is out there, fairly easy
Speaker 6: entry for mom and pops or for somebody who has
Speaker 6: a bag that's held by a celebrity on TikTok and
Speaker 6: now you blow up, and that they really don't think
Speaker 6: that there would be any ability to raise the price
Speaker 6: of the Michael Core's bag post acquisition.
Speaker 4: Definitely not. But that's can you buy that?
Speaker 1: I mean, you can't buy these bags on sale ever?
Speaker 1: Can you again? You can?
Speaker 9: Yeah?
Speaker 6: Oh yes, I mean that's part of the issue. The
Speaker 6: Cores bags have been on sale for a couple of
Speaker 6: years now because the Core's brand is lost what they
Speaker 6: call brand heat. In other words, the consumers don't think
Speaker 6: it's that hip anymore or that cool anymore, and so
Speaker 6: they've had to reduce the prices for those bags in
Speaker 6: order to get them to sell their product.
Speaker 4: It's made same thing, like coach, same thing.
Speaker 1: Yeah, and you can buy all these bags on Canal Street,
Speaker 1: by the way.
Speaker 6: I know exactly. And you know what that's the points
Speaker 6: here is that when they calculated what the market shares
Speaker 6: would be and what the concentration would be, they completely
Speaker 6: left out any sales of pre owned handbags, which is
Speaker 6: kind of a really burgeoning market right now. I mean
Speaker 6: even Dillard's has a section for pre owned handbags.
Speaker 4: Dillard's has a section for pre owned handbags.
Speaker 6: Yes they do, and Alex, if you believe it, what
Speaker 6: we heard in trial is that those sales outstripped the
Speaker 6: sales of the new handbags.
Speaker 1: Wow o, yeah, learn something new. She's going to the.
Speaker 4: Well, I'm just I never thought of. You know, Dillards
Speaker 4: is like a high end fashion place, so the fact
Speaker 4: that they have sort of, you know, recycled handbags is something.
Speaker 2: I was talking about.
Speaker 4: Fakes.
Speaker 1: By the way, No, we know, we.
Speaker 4: Know, we just ignored you, all right, Jen, thanks a lot.
Speaker 4: We appreciate that genery of a Bloomberg Intelligence. She is
Speaker 4: our antitrust expert joining us on that. Also, we got
Speaker 4: to take a look at Kroger and Alberson at some
Speaker 4: point as well.
Speaker 2: This is the Bloomberg Intelligence podcast, available on Apples, Spotify,
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