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Speaker 1: P and L Podcast. I'm Pim Fox. Along with my
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Speaker 1: whether at the grocery store or the trading floor. Find
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Speaker 1: at Bloomberg dot com. Can oil break out of this
Speaker 1: fifty dollars to fifty five dollars a barrel range? I
Speaker 1: don't know the answer, but John Kilduff perhaps does. John
Speaker 1: Kilduff he is founding partner of Again Capital who has
Speaker 1: gotten it right again and again with where at the
Speaker 1: price of is going? So John, uh, you know where
Speaker 1: do you see this sort of tenuous truce in the
Speaker 1: Middle East about not producing too much more oil going?
Speaker 1: And do you think that we we could break out
Speaker 1: of this range? Um? Either way? First, good morning, Good morning,
Speaker 1: And Uh, I think you have to give them certainly
Speaker 1: some credit. The the OPEC and non OPEC producers like
Speaker 1: Russia that came together to try and cut looks like
Speaker 1: they've achieved about eighty five of their efforts. The problem
Speaker 1: is that there's several notable countries not part of the deal, Iraq,
Speaker 1: Iran in particular, and Nigeria and Libya, all of whom
Speaker 1: we're sort of written off in terms of not being
Speaker 1: able to grow their output much more. And it turns
Speaker 1: out there coming back like gangbusters. Um. Also too, we're
Speaker 1: heading into now the end of the winter season, which
Speaker 1: brings a sort of shoulder season demand period to the
Speaker 1: northern hemisphere globally, which I think is going to complicate
Speaker 1: the picture, uh for these guys, and I think dash
Speaker 1: their hopes. So to answer your question, I see it's
Speaker 1: breaking out to the downside here, I think in over
Speaker 1: the course the next couple of weeks. Hey, John, I
Speaker 1: wonder if you could put that together with the demand
Speaker 1: picture and maybe just you know, give us the thirty
Speaker 1: thousand foot few in terms of all right, we're going
Speaker 1: into the peak driving season will be the summertime in
Speaker 1: the northern hemisphere. Uh, you know what percent of production
Speaker 1: is that going to soak up and so on. Yeah,
Speaker 1: so the demand picture actually has been rather soft, particularly
Speaker 1: for refined fuels over the past several weeks here now,
Speaker 1: particularly in the US, we've been down on gasoline demand
Speaker 1: five to seven percent, which is somewhat remarkable. With some
Speaker 1: of that is a drop in exports, but some of
Speaker 1: it seems to be consumer response to the relatively higher
Speaker 1: gasoline prices already. UM And unfortunately for the refiners, UH,
Speaker 1: we're we have record inventories of gasoline on the East coast,
Speaker 1: UM and you know, we're continuing to see this. This
Speaker 1: lackluster demand sort of hurt them. You saw a STAT
Speaker 1: oil report today UM as did BP, and they both
Speaker 1: referenced the refining sector last quarters as being poor, which
Speaker 1: had been a bright spot. Part of this is being
Speaker 1: driven by the Chinese who sort of ramped up a
Speaker 1: mini sort of boom in refining there and which led
Speaker 1: to record exports during much of last year. So the
Speaker 1: whole world kind of got swamped and refined products. So
Speaker 1: you're seeing today gas leaned down about two down under
Speaker 1: a dollar fifty a gallon on then I am X
Speaker 1: Commodity board and UM the downward pressure I think is
Speaker 1: is going to continue there. So UM also too, we've
Speaker 1: seen the biggest slowdown in twenty six years according to
Speaker 1: the latest data out of China for refined product growth
Speaker 1: demand growth. So there continues to be a lot of
Speaker 1: issues around the whole complex. John, you said that you
Speaker 1: do think that we're going to break out to the downside.
Speaker 1: How low do you think oil prices could go? I
Speaker 1: think if we can, if we can break the fifty market,
Speaker 1: there's no reason why we couldn't retrace all the way
Speaker 1: back down to the lows from November, which was forty
Speaker 1: two dollars about So I think it's pretty easy for
Speaker 1: us to make an argument to get back qually back
Speaker 1: down there. And with a barrel, Which companies would that
Speaker 1: disrupt the most. It's gonna disrupt the pure play producers,
Speaker 1: so it's gonna it's gonna hurt hess UH companies like Hess,
Speaker 1: Occidental Petroleum, UM, some of the shale players, Continental Resources
Speaker 1: companies like that. Well, we'll we'll take it on the chin.
Speaker 1: It may actually help the refiners perversely, because there they'll
Speaker 1: have much lower input costs and UM it may spare
Speaker 1: more demand at the pump again just at the right time.
Speaker 1: As we hit the peak summer travel season. So what
Speaker 1: works early last year, it looks like it may work
Speaker 1: again early this year in terms of trying to play
Speaker 1: the energy patch. So all right, John, let's let's just
Speaker 1: keep this in mind. So we're looking for oil prices
Speaker 1: to go low or for a variety of reasons, right, Okay,
Speaker 1: Now is there any value in connecting this to just
Speaker 1: the thought that oil is up about eleven since the
Speaker 1: November election, that gas is up on nearly twenty since
Speaker 1: the election. Can you knit together a bigger picture for us? Well,
Speaker 1: it's it's interesting to me. I mean, obviously, all the
Speaker 1: entirety of the stock market and a lot of assets
Speaker 1: have risen on on hope for relief and regulation and
Speaker 1: other pro growth policies. The energy industry gets hurt in
Speaker 1: a big way. To refining industry gets hurt in a
Speaker 1: big way if this border tax adjustment UH program were
Speaker 1: to be implemented. Um also too, you know, the oil
Speaker 1: producing oil producers need to be careful of too much
Speaker 1: of a good thing, to the extent that they were
Speaker 1: they were to be released hogwild to exploit hundreds of
Speaker 1: thousands of more acres and produce more and more oil.
Speaker 1: It's going to add to the glut and not take
Speaker 1: away from it, obviously, So you don't think that there
Speaker 1: will necessarily be as much drilling as perhaps President Trump
Speaker 1: will allow them to do by opening up federal lands,
Speaker 1: which is widely expected. Yes, No, because you know a
Speaker 1: lot of federal land leases went unexploited during the Obama administration.
Speaker 1: You know, the U S producers cut back drastically with
Speaker 1: the price drops. So you know, the US in that
Speaker 1: regard is really the swing producer as much as Saudi
Speaker 1: Arabia these days, except that our policy is driven by economics,
Speaker 1: whereas the Saudis are trying to uh, you know, dictate
Speaker 1: price from on high. But no, I think it will
Speaker 1: be um not as great as land rush as you
Speaker 1: might think, because prices are going to be challenged more
Speaker 1: and more as we're already seeing the shell players ramp up.
Speaker 1: You know, John, last week we were talking about the
Speaker 1: solar industry and how the prices for solar energy has
Speaker 1: dropped to the point where it's competitive at least with gas.
Speaker 1: Do you think that this is going to increasingly be
Speaker 1: a pressure on the oil industry or is this a
Speaker 1: nonstarter just because it's so small relatively No, no, very
Speaker 1: very much. So it's a it's a it's become a
Speaker 1: big factor. Wind has become even a bigger factor. Um
Speaker 1: is it's actually considered a conventional energy source now, not
Speaker 1: even a special sort of case renewable um. But the uh,
Speaker 1: what we're dealing with here, you've got to keep in
Speaker 1: mind is that it's a bigger pressure really for natural gas,
Speaker 1: because oil still is eight barrel of oil is still
Speaker 1: of that barrel goes into transportation um. And we're still
Speaker 1: not seeing obviously solar cars, although we are starting to
Speaker 1: see more electric ones and and really ones that are
Speaker 1: desirable by consumers, like the ones Tesla produces, but for
Speaker 1: now it's going to be a while. So oil is
Speaker 1: still the transportation fuel as opposed to what the electrical
Speaker 1: utility industry is going to have to be dealing with,
Speaker 1: what sort of decentralized power generation prompt solar and now
Speaker 1: importantly the battery technology that's coming along with it. Thanks
Speaker 1: very much, John Kilduff, great stuff, founding partner of again Capital.
Speaker 1: Let's learn more about what to do with your money
Speaker 1: in this market that, as Dave Wilson was earlier describing,
Speaker 1: we could be seeing the SMP five. Tony Dwyers, the
Speaker 1: chief market strategist that can accord genuity, and he joins us, now, Tony,
Speaker 1: thanks very much for being with us. Give us your outlook,
Speaker 1: and then maybe I would throw in with that, give
Speaker 1: us all the things that could go wrong with your outlook. Okay,
Speaker 1: that's that's probably better. Stay to het them. Thanks for
Speaker 1: having me on and RISA. So we believe that the
Speaker 1: next few weeks we're going to see a correction UM
Speaker 1: in the market somewhere around five And that doesn't sound
Speaker 1: like a lot, but when you're down a couple of
Speaker 1: percent in the new kind of trading world that we're in,
Speaker 1: everybody kind of gets scared that it's going to be
Speaker 1: a ten to fifteen percent correction, and we we want
Speaker 1: to be in a position to really aggressively by that um.
Speaker 1: For the list nurse to make this really super simple, UM,
Speaker 1: you never want to be a net seller or negative
Speaker 1: on stocks until you have a recession in sight, because
Speaker 1: any correction in the midst of a positive growth backdrop
Speaker 1: always comes back um and pretty quick form and goes higher.
Speaker 1: So the only time you really want to be negative
Speaker 1: is if you can see a recession, and we don't
Speaker 1: see a recession for at least another couple of years.
Speaker 1: Hold on a second, Tony, you said, next couple of
Speaker 1: weeks you see a five percent pulled back in stocks.
Speaker 1: This sort of conflicts with what we hear a lot,
Speaker 1: which is I can't predict the next few weeks. I
Speaker 1: can maybe predict the next few years or give a
Speaker 1: sense of of sort of the trend. But this stands
Speaker 1: out why such conviction about a time frame that's so
Speaker 1: near to us. Well, to be fair, I've been making
Speaker 1: the call since mid December, and you know, we turn
Speaker 1: neutral on the market in mid December because we thought
Speaker 1: a lot of the positive um data was already reflected
Speaker 1: in stocks and you had an extreme overbaught condition. And
Speaker 1: that's the case, like, for example, today, if you don't
Speaker 1: have a one percent move, I read on the Bloomberg
Speaker 1: that if you don't have an enter day one percent move,
Speaker 1: it will match the longest period without a one percent
Speaker 1: move in the market for this cycle. So you just
Speaker 1: have been in this period of very very very low
Speaker 1: volatility and that typically comes to an end in a
Speaker 1: sharp way. And and that doesn't mean that you know,
Speaker 1: everybody should run for the hills because the fundamental backdrop
Speaker 1: is so good you just have to be ready and
Speaker 1: expect it to happen. Um. So it's not just it's
Speaker 1: not just the call that I've made today for the
Speaker 1: next three weeks. It's a call that we've been in
Speaker 1: since mid December. Hey, Tony, I wonder if you could
Speaker 1: just bring in the concept of active investments, in other words,
Speaker 1: people picking stocks. Plus, you're in the earning season and
Speaker 1: I'm wondering if that might have anything to do with
Speaker 1: what happens to last price, because that's really what we're
Speaker 1: talking about. You're not talking about value, talking about how
Speaker 1: much someone is paying for something in the short term, right,
Speaker 1: And the earnings backdrop has been really strong or not,
Speaker 1: that's that's not right. The earnings backdrop has been significantly
Speaker 1: improved from where was a year go or even two
Speaker 1: quarters ago, because you're seeing a recovery in the commodities.
Speaker 1: And I think the story, guys that that nobody's really
Speaker 1: talking about is how good the global economy is acting.
Speaker 1: We're so focused on what President Trump is tweeting in
Speaker 1: the legislation. Well, it's interesting because Lisa Brahma, hold on, Tony,
Speaker 1: because Lisa Bramwitz. You mentioned even just last week, the
Speaker 1: economic performance in Europe is better than many investors believe
Speaker 1: on the surface. Right, So some people are actually going
Speaker 1: back to an increasing number of hedge funds. But but Tony,
Speaker 1: I want to get to your point. I mean about
Speaker 1: just because of President Trump and some of his rhetoric.
Speaker 1: You know, dot dot dot. Seth Klarman, who is a
Speaker 1: very respected hedge fund manager, put out a letter in
Speaker 1: the past few weeks that was quoted in the New
Speaker 1: York Times, and he was saying, that's important in and
Speaker 1: of itself, when you have a president, a leader who
Speaker 1: puts who makes volatility his strategy, that could potentially upend
Speaker 1: a lot of the order that we've seen in markets.
Speaker 1: Markets don't like uncertainty. What do you say to that.
Speaker 1: I think markets don't like uncertainty. But we've been uncertain
Speaker 1: since the summer of last year, and you have one
Speaker 1: of the lowest volatility periods on record. So to this
Speaker 1: to this point, Seth is right, it's gonna end up.
Speaker 1: And that's kind of our correction call. When you have
Speaker 1: such low volatility in an environment where so much rhetorics
Speaker 1: coming out, you've got to you've got to believe that
Speaker 1: at some point it's going to come into play. What's
Speaker 1: amazing to me and I think Seth and anybody else
Speaker 1: is it hasn't yet. You've had such a narrow trading
Speaker 1: range of the market despite so many issues being you know,
Speaker 1: um harshly criticized and talked about back and forth. So again,
Speaker 1: what here's what I would urge the listeners to do.
Speaker 1: Invest your money based on what you know, not on
Speaker 1: what you fear. What we know is that even with
Speaker 1: increases and interest rates in the US monetary policy, meaning
Speaker 1: you know, credit is in very very good shape, the
Speaker 1: set is historically accommodatives. On another points higher in you Yeah,
Speaker 1: Tony Dwyer, thank you so much for joining US chief
Speaker 1: market strategist at can Accord Genuity, P and L is
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Speaker 1: there was a fascinating story that I really want to
Speaker 1: highlight that raises the question of the hardware and the
Speaker 1: integrity of the hardware behind the giants of Apple, Google,
Speaker 1: and Facebook. I want to bring in Jordan Robertson, a
Speaker 1: technology reporter with Bloomberg News who wrote the story. He
Speaker 1: is coming to us from Washington. Jordan's first, I just
Speaker 1: want to get a sense of how easily it would
Speaker 1: be to potentially manipulate the hardware that sort of provides
Speaker 1: the infrastructure for Apple, Google, and Facebook before they even
Speaker 1: get it. Hi. Sure, Yeah. You know, part of the
Speaker 1: problem with the supply chain security for these large technology
Speaker 1: companies is, you know, the way the technology industry has
Speaker 1: evolved is that most of the code is proprietor for
Speaker 1: understandable reasons, Companies like Cisco, which make network switches that
Speaker 1: shuttle data traffic. The very significant parts of these companies networks. Uh,
Speaker 1: you know, their business is selling the code and the hardware,
Speaker 1: and they don't open sources. They don't disclose that code
Speaker 1: anybody else. The problem with that is if somebody is
Speaker 1: able to tamper with the process of creating that code,
Speaker 1: uh you know, typically it would be a foreign government
Speaker 1: or even the US government. In some cases, uh you know,
Speaker 1: customers like Facebook or Google or Apple, you know, or
Speaker 1: LinkedIn or others had no way to check that code
Speaker 1: to to verify the presence are not of a government
Speaker 1: back door. This has taken out a new life after
Speaker 1: they Edwards Snowden revelations of a few years ago, and
Speaker 1: companies are now starting to try to create some of
Speaker 1: that network switching code on their own. Hey, Jordan's a
Speaker 1: great story. Can you just describe a photograph that really
Speaker 1: kind of highlights what you're talking about? Just describe what's
Speaker 1: in this photograph, where it came from, etcetera. Sure, there's
Speaker 1: a very famous photograph that came out a couple of
Speaker 1: years ago. Again, part of the Snowden League was published
Speaker 1: in Glenn Greenwalt's book on the Snowden Leagues, and what
Speaker 1: it shows is, you know, uh u s government officials
Speaker 1: federal agents intercepting a piece of cisk O network hardware
Speaker 1: equipment at a transmission a distribution facility, probably a UPS
Speaker 1: or fed X or some other transit point, very carefully
Speaker 1: opening the box and then taking it to a what
Speaker 1: they call a load station, which is you know, just
Speaker 1: some a series of laptops on the desk next to
Speaker 1: the the conference table and loading it with you know,
Speaker 1: basically malware with malicious code. And you know, this photo
Speaker 1: really struck fear in the hearts of network operators throughout
Speaker 1: Silicon Valley. Uh. You know, there are lots of things
Speaker 1: in the snow and disclosures that struck fear in the
Speaker 1: hearts of data center people, but this one especially because
Speaker 1: what it showed them was you know, uh, you know,
Speaker 1: the U. S. Government and others by extension, you know,
Speaker 1: are able to intercept this hardware. And again when you
Speaker 1: talk about Cisco and Juniper and network equipment, this is
Speaker 1: central that the brains of these networks, who they're not
Speaker 1: just computer servers either as switches that shuttle data traffic
Speaker 1: around these networks, and they see everything basically either they
Speaker 1: all seeing I and you know, if you're able to
Speaker 1: interspect this equipment, modify the software code on it, uh
Speaker 1: to maliciously spy on you all the data traffic passing
Speaker 1: through these switches, you know, you're able to get visibility
Speaker 1: into an entire network, and that's really scary for operators
Speaker 1: of large data centers because for internet company, their data
Speaker 1: is their lifeblood. But you know, if they lose control
Speaker 1: of that, they lose control of the company. Hey, Jordan's
Speaker 1: I think of this in terms of every problem that
Speaker 1: technology creates. Technology with a heavy dose of experience and
Speaker 1: funding works to find a solution. Right there are the
Speaker 1: open compute project snap Route tell us about this, that's right, Yeah,
Speaker 1: So that's that's really the crux of the story today
Speaker 1: is that there's a company called snap Route out of Tawa, Alto, California.
Speaker 1: They've just gotten twenty five million dollars in funding. You know,
Speaker 1: big ZC announcements seemed to happen every day or every
Speaker 1: week out in California. But what's interesting about them this
Speaker 1: is a group of former former Apple engineers. Uh, you know,
Speaker 1: they've been designing their own network technology for a while
Speaker 1: for performance and other reasons, but security became a really
Speaker 1: big focus for them and they said, look, we need
Speaker 1: to have a hundred percent visibility into our code because
Speaker 1: we just simply can't trust that these proprietary technologies from
Speaker 1: Cisco and Juniper and others. Even if the companies have
Speaker 1: the best of intentions, you know, are not compromised at
Speaker 1: some point you know, along the way. So what they're
Speaker 1: saying is we're going to create an open source switch
Speaker 1: network switch. This is actually a really big deal because
Speaker 1: open source technology has admitted for a very long time
Speaker 1: in computing, but it hasn't really migrated to the network
Speaker 1: switch level. And again, these are the brains of these
Speaker 1: computer networks. It's hard stuff to do. But what the
Speaker 1: goal is to give network operators at these big Internet
Speaker 1: Silicon Valley companies visibility into what's happening on their network switches.
Speaker 1: What's the likelihood this is going to fundamentally disrupt Cisco's business.
Speaker 1: I'll tell you Cisco is nervous. Cisco very nervous to
Speaker 1: talk with them for the story. You know, obviously they
Speaker 1: know Cisco is a huge competitor here. I mean they
Speaker 1: control over half of the computer networking market. They're not
Speaker 1: going anywhere anytime soon. This is a very nascent, very
Speaker 1: small market right now. It's only the large data center
Speaker 1: operators up including big banks as well. They're doing this, however,
Speaker 1: there's a lot of value here because you can drop
Speaker 1: the price of this equipment by tens of thousands of
Speaker 1: dollars if you're willing to kind of take some ownership
Speaker 1: of the management of this stuff. So you could see
Speaker 1: this eventually, you know, evolving from just the data center operators. Uh,
Speaker 1: you know too, smaller midsize and smaller company. That's the
Speaker 1: ways off. But I will play Cisco and the other
Speaker 1: legacy technology vendors are very nervous because there are a
Speaker 1: lot of advantages to this technology, some downsides to but
Speaker 1: some big advantages. Thanks very much for being with us
Speaker 1: and shedding light on this topic. Jordan Robertson, technology reporter
Speaker 1: for Bloomberg News, speaking about open compute projects, snap Root
Speaker 1: and challenges to Cisco. I want to get David Well
Speaker 1: to bring him into the conversation. He's Detroit bureau chief.
Speaker 1: He covers General Motors, and Uh, David, can you give
Speaker 1: us some insight into why such a negative response from
Speaker 1: stock investors? Well, General Motors is really defied gravity All
Speaker 1: year long, the market has gotten a little bit softer
Speaker 1: or it's flattened. You've seen Forward pulled back on their
Speaker 1: earnings forecast and they've missed some of their numbers, and
Speaker 1: GM has been able to keep keep pushing. The growth
Speaker 1: showed weaker margins and they're showing growing inventories, which is
Speaker 1: I think giving some investors a little bit of worry
Speaker 1: that maybe even GM is is unable to keep the
Speaker 1: proper train going with the market that's kind of flattening
Speaker 1: out a bit, maybe going a little bit soft. David,
Speaker 1: I was looking at the performance of General Motors stock
Speaker 1: before today. It was up fourteen percent, so you've got
Speaker 1: the dropped today. This is from the election of fourteen percent.
Speaker 1: Since the election, the four percent dropped today, So I
Speaker 1: mean the stock has already had a decent run. Did
Speaker 1: you learn anything today the details of anything like free
Speaker 1: cash flow or margins in China? What stood out to
Speaker 1: you in today's detailed report. The thing that jumped out
Speaker 1: of me the most was that in the fourth quarter,
Speaker 1: margins in North America. So, and that's really the profit horse.
Speaker 1: China is a real money maker for them. It's about
Speaker 1: two billion dollars a year. But then you look at
Speaker 1: the nine to ten billion a year that GM has
Speaker 1: been making and you know the rest of it, and
Speaker 1: then some comes from North America. So you saw a
Speaker 1: fourth quarter of stall margins go from ten percent a
Speaker 1: year ago two I think it was eight and a
Speaker 1: half percent. Roughly, It's it's not awful, it's a good performance,
Speaker 1: but it's it's headed in the wrong direction. Now. GM
Speaker 1: had a lot of reasons for this. They're saying that
Speaker 1: they've got a lot of SUVs coming to market later
Speaker 1: this year that will really help margins. So they're in
Speaker 1: inventor build out right now. Uh, and a lot of
Speaker 1: the cars really still dominate their a lot in terms
Speaker 1: of what they're offering consumers, and cars are out of
Speaker 1: favor and require a lot of incentives. They're saying, hey,
Speaker 1: the good stuff really isn't on the lot yet. When
Speaker 1: it is, we're going to make good money. And they
Speaker 1: did affirm their their guidance that they will again have
Speaker 1: record profits for two thousand seventeen. But I think analysts
Speaker 1: and investors are looking at this and saying, margins North
Speaker 1: America fell, inventories are higher, incentives are higher, We'll wait
Speaker 1: and see, we'll we'll we'll put our money somewhere else
Speaker 1: and see if they can can show a better first quarter.
Speaker 1: I think some of that is going on David, just quickly,
Speaker 1: is this is the strategy of GM and other automobile makers.
Speaker 1: Is it all based on sub three dollar at gallon gasoline?
Speaker 1: Pretty much? Well, let's put it this way. It's based
Speaker 1: on some price of gasoline that doesn't make consumers buy
Speaker 1: what they're buying today. And the reason I say that
Speaker 1: is we've said in the past, oh my god, two
Speaker 1: dour a gallon gas known to buy a truck Again
Speaker 1: it hit it, and they did all three hour again
Speaker 1: and gas known to buy, and I should be again,
Speaker 1: and they did. There's a magic number in there. I'd
Speaker 1: say it's probably more like three fifty where consumers really
Speaker 1: start to change. But your point is is basically right,
Speaker 1: if gas gets very expensive than the market prospect passenger cars,
Speaker 1: that's lower margins and that's not good for anybody in
Speaker 1: the industry. Dave Wilson, I want to get your sense,
Speaker 1: just on a broader level of how much of the
Speaker 1: response to GM's earnings is being colored by a broader
Speaker 1: sense that the auto industry is plateau ing at best
Speaker 1: and headed for a slight dip. I mean, are you
Speaker 1: seeing reactions and shares It kind of gives insight on
Speaker 1: that well, you want to talk about plateau. I mean,
Speaker 1: GM shares peaked back in December. They've basically been up
Speaker 1: and down since then. So you know, today being a
Speaker 1: down day, you're really talking about, you know, more fluctuation
Speaker 1: for a stock that has kind of topped out. Uh.
Speaker 1: And you look at Forward, I mean, you know, it's
Speaker 1: come down the last couple of years as OW. I mean,
Speaker 1: so it's not like the boom times that we've seen
Speaker 1: in the auto industry lately have led to boom times
Speaker 1: for the shares. So you know, there's the concern about
Speaker 1: what happens down the road. I mean, certainly they're vulnerable
Speaker 1: to whatever gasoline prices are going to be, and we've
Speaker 1: seen crude oil pick up in the past several months.
Speaker 1: But beyond that, it's really just a matter of how
Speaker 1: long do things keep going. That's as much as anything
Speaker 1: a focus here, David. Can I just get your thoughts
Speaker 1: on some of the other automakers, because I'm looking at
Speaker 1: the shares of Fiat Chrysler and they are down as well,
Speaker 1: down about three and a half percent. Does this do
Speaker 1: anything to that idea putting Fiat together with GM, Well,
Speaker 1: that idea has not really first of GM doesn't want
Speaker 1: to do it. I think GM shares initially didn't react
Speaker 1: so hot when that idea was floated. And one of
Speaker 1: the reasons is we've seen auto mergers in the past
Speaker 1: not really work so well. We're no Nissan maybe the
Speaker 1: lone example, UM, but you know, diam Ward Krysler was
Speaker 1: a big failure. A lot of the joint ventures haven't
Speaker 1: worked out. And if you look at GM, you know what,
Speaker 1: once if GM were to take fied Chrysler, you still
Speaker 1: have this passenger car line up. You still have a
Speaker 1: lot of plants and and redundancy they need to take out,
Speaker 1: and then you're managing like eleven brands. That was the
Speaker 1: problem GM had before bankruptcy. And you know that it's
Speaker 1: just it becomes very unwieldy. So you know, I don't
Speaker 1: I've never really uh seen a great case for this,
Speaker 1: other than from the Fied Chrysler side, which, hey, we
Speaker 1: need scale and we need investment. We gotta know, we
Speaker 1: got we gotta go on, we gotta move on. Thanks
Speaker 1: very much. David Welch, a bureau chief Bloomberg News Smart
Speaker 1: Detroit Bureau, Thanks for listening to the Bloomberg p m
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