1 00:00:00,080 --> 00:00:13,040 Speaker 1: Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane. 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Daily we bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:34,880 Speaker 1: Bloomberg dot Com, and of course, on the Bloomberg Alright. 5 00:00:34,880 --> 00:00:37,280 Speaker 1: Guest right now is Luigi's in Gallis. He is Chicago 6 00:00:37,320 --> 00:00:40,040 Speaker 1: boot Professor of economics. On changes having to do with 7 00:00:40,080 --> 00:00:43,239 Speaker 1: the tax overhaul plan. But Luigi always a pleasure, and 8 00:00:43,280 --> 00:00:44,839 Speaker 1: I just gotta say, I'm gonna throw you one that 9 00:00:44,880 --> 00:00:48,840 Speaker 1: maybe you didn't expect. But because you're visiting the Northeast 10 00:00:48,840 --> 00:00:53,080 Speaker 1: from Chicago, I'm wondering if during your travels you see 11 00:00:53,159 --> 00:00:57,000 Speaker 1: things that then change the way you apply your professional 12 00:00:57,120 --> 00:01:02,360 Speaker 1: and academic skills to specific problems of economics. Because you're 13 00:01:02,440 --> 00:01:05,000 Speaker 1: the author of two widely known books. One is called 14 00:01:05,240 --> 00:01:08,800 Speaker 1: Saving Capitalism from the Capitalists Right and the other is 15 00:01:08,840 --> 00:01:13,000 Speaker 1: A Capitalism for the People, Recapturing the Lost Genius of 16 00:01:13,040 --> 00:01:17,680 Speaker 1: American Prosperity. And I'm wondering, when you travel around the country, 17 00:01:17,800 --> 00:01:20,200 Speaker 1: or indeed around the world, what do you pick up 18 00:01:20,240 --> 00:01:23,520 Speaker 1: that may apply to both of those teams? Generally, I 19 00:01:23,600 --> 00:01:25,920 Speaker 1: learned more when I travel around the world than I 20 00:01:25,959 --> 00:01:28,679 Speaker 1: wound the US, but I do learn a lot. So 21 00:01:28,880 --> 00:01:32,240 Speaker 1: I remember many years ago I was in India and 22 00:01:32,680 --> 00:01:36,280 Speaker 1: I was taken by some friends to a government owned 23 00:01:36,360 --> 00:01:40,480 Speaker 1: store and they say, you should go there because you're 24 00:01:40,480 --> 00:01:42,800 Speaker 1: not cheated in the government own store. And so that 25 00:01:42,880 --> 00:01:45,680 Speaker 1: made me think, as as Chicago guy said, why why 26 00:01:45,880 --> 00:01:50,200 Speaker 1: sort of uh, the market delivers as this mistrust while 27 00:01:50,520 --> 00:01:53,600 Speaker 1: the government owned store leads to a high level of 28 00:01:53,640 --> 00:01:56,800 Speaker 1: trust and and ugly, it was very influential to my 29 00:01:56,880 --> 00:02:00,320 Speaker 1: thinking because I said, the difference is that if you 30 00:02:00,440 --> 00:02:03,960 Speaker 1: have government stores tend to avail low incentives, low incentives 31 00:02:04,000 --> 00:02:07,360 Speaker 1: to do the right thing, take care of their customers, 32 00:02:07,400 --> 00:02:09,560 Speaker 1: but also very low incentive to do the wrong thing, 33 00:02:09,560 --> 00:02:13,040 Speaker 1: which is to cheat their customers. And so in a 34 00:02:13,160 --> 00:02:17,400 Speaker 1: system that is completely unregulated, well, the law is ineffective. 35 00:02:18,120 --> 00:02:21,280 Speaker 1: You don't know where the incentives of the market incentives 36 00:02:21,320 --> 00:02:25,799 Speaker 1: will go. And and in India, where enforcement against the 37 00:02:25,840 --> 00:02:29,760 Speaker 1: corporate for to customer, etcetera. Is not so strict, you 38 00:02:29,880 --> 00:02:33,919 Speaker 1: end up adding that the market the leavers more incentive 39 00:02:33,960 --> 00:02:36,840 Speaker 1: to cheat than actly to behave properly. So I think 40 00:02:36,880 --> 00:02:41,120 Speaker 1: that that was very influential in my thinking about capitalists 41 00:02:41,120 --> 00:02:42,760 Speaker 1: in general and rules. All right, So it is that 42 00:02:42,919 --> 00:02:46,000 Speaker 1: something that you can apply to the tax overhaul package 43 00:02:46,200 --> 00:02:51,280 Speaker 1: as you know it to be. But the tax package 44 00:02:51,320 --> 00:02:55,079 Speaker 1: is a huge mass, so it's very difficult to assess 45 00:02:55,080 --> 00:02:58,480 Speaker 1: it completely. Um let's uh start with the easy part, 46 00:02:58,520 --> 00:03:01,560 Speaker 1: which is the corporate tax uh cut. I think that 47 00:03:02,240 --> 00:03:04,600 Speaker 1: maybe has been a bit more aggressive than what I 48 00:03:04,639 --> 00:03:07,520 Speaker 1: would have done, but I think that was something that 49 00:03:07,840 --> 00:03:11,320 Speaker 1: was needed in the United States. In a sense, Canada 50 00:03:11,440 --> 00:03:14,800 Speaker 1: is not considered a low tax country. But if you 51 00:03:15,360 --> 00:03:17,960 Speaker 1: invest in Canada, you start a business in Canada today, 52 00:03:18,680 --> 00:03:22,280 Speaker 1: you end up paying twenty seven of copper tax rate. 53 00:03:22,720 --> 00:03:26,040 Speaker 1: And if you were to set business next door in 54 00:03:26,080 --> 00:03:28,720 Speaker 1: the United States, on average you are getting a thirty 55 00:03:28,800 --> 00:03:31,240 Speaker 1: nine percent At least the started to attack, right then 56 00:03:31,240 --> 00:03:33,000 Speaker 1: there are all the new posts. But if we want 57 00:03:33,040 --> 00:03:36,360 Speaker 1: really to motivate a business to start, I think the 58 00:03:36,440 --> 00:03:39,320 Speaker 1: law in the copper tax rate was a necessary thing 59 00:03:39,360 --> 00:03:43,200 Speaker 1: to do. Now was it done the proper way? I 60 00:03:43,240 --> 00:03:45,600 Speaker 1: don't think so. I think, first of all, if you 61 00:03:45,680 --> 00:03:49,400 Speaker 1: are an influential country like the United States, moving so 62 00:03:49,480 --> 00:03:53,800 Speaker 1: aggressively is gonna shift the equilibrium. Even law, so the 63 00:03:53,920 --> 00:03:56,520 Speaker 1: U should have carved but should not have been competing 64 00:03:56,520 --> 00:03:59,640 Speaker 1: with Ireland, because Ireland is gradually small country that tries 65 00:03:59,680 --> 00:04:02,680 Speaker 1: to right on the rest. And the United States should 66 00:04:02,720 --> 00:04:04,720 Speaker 1: set the tone. And if you set the tone, so 67 00:04:04,880 --> 00:04:07,920 Speaker 1: law everybody would follow. So that that's probably number one. 68 00:04:08,000 --> 00:04:11,320 Speaker 1: Probably number two, you need to pay for it, and uh, 69 00:04:12,000 --> 00:04:14,800 Speaker 1: one way you pay for it is by increasing the base, 70 00:04:15,320 --> 00:04:17,479 Speaker 1: and some effort has been done in that direction, and 71 00:04:17,520 --> 00:04:20,279 Speaker 1: I think was very good. I think more should have 72 00:04:20,320 --> 00:04:23,760 Speaker 1: been done. Uh, and and not enough. And second there 73 00:04:23,800 --> 00:04:27,200 Speaker 1: were there were a way to compensate. So one easy 74 00:04:27,240 --> 00:04:30,000 Speaker 1: way to do it would have been to increase the 75 00:04:30,120 --> 00:04:35,000 Speaker 1: personal tax rate on corporate income. And in that way 76 00:04:35,080 --> 00:04:38,320 Speaker 1: you would have favor starting corporation, but will not a 77 00:04:38,360 --> 00:04:42,800 Speaker 1: favor a tax relief on the richer part of the population. 78 00:04:42,880 --> 00:04:44,640 Speaker 1: So there were better ways to do it. Wait, wait, 79 00:04:44,760 --> 00:04:48,480 Speaker 1: you're saying we should have increased taxes on the richer 80 00:04:48,760 --> 00:04:53,000 Speaker 1: folks and the personal and personal Yeah, because in a 81 00:04:53,000 --> 00:04:57,040 Speaker 1: sense they are getting a huge reduction today. And while 82 00:04:57,080 --> 00:05:00,240 Speaker 1: this reduction is very useful to start new businesses, is 83 00:05:00,279 --> 00:05:05,599 Speaker 1: not obvious that is needed at the top for for anything. 84 00:05:05,720 --> 00:05:08,520 Speaker 1: I always wondered to Luigi, how much you know tax 85 00:05:08,560 --> 00:05:11,400 Speaker 1: policy really is a motivator for actions. I mean most 86 00:05:11,440 --> 00:05:13,200 Speaker 1: a lot of people would argue, right with the mortgage 87 00:05:13,240 --> 00:05:16,320 Speaker 1: interest deduction, that that's why people go out and buy homes. 88 00:05:16,360 --> 00:05:18,240 Speaker 1: Go to Canada, they don't have it, and people still 89 00:05:18,240 --> 00:05:20,479 Speaker 1: buy homes and I think they have even a higher 90 00:05:20,560 --> 00:05:24,440 Speaker 1: rate of home ownership. How much, though, How effective really 91 00:05:24,720 --> 00:05:29,800 Speaker 1: is tax policy when it comes to actions? Is it 92 00:05:29,880 --> 00:05:34,440 Speaker 1: the only motivator? Absolutely not? Uh. In economic we say 93 00:05:34,480 --> 00:05:39,400 Speaker 1: on the margin doesn't matter. I am shocked to find 94 00:05:39,560 --> 00:05:43,080 Speaker 1: that anybody would say no. I think that it does. 95 00:05:43,160 --> 00:05:46,000 Speaker 1: The question is to what extent it does? And uh. 96 00:05:46,040 --> 00:05:47,640 Speaker 1: And of course when you change a lot of things 97 00:05:47,680 --> 00:05:51,640 Speaker 1: contemporary anally, uh, then it's hard to identify. But when 98 00:05:51,760 --> 00:05:54,040 Speaker 1: we look at the data and we look at the 99 00:05:54,200 --> 00:05:59,600 Speaker 1: specific changes, we generally find a pretty big effect. If 100 00:05:59,600 --> 00:06:02,800 Speaker 1: you on people to consume more, uh, you tax them 101 00:06:02,880 --> 00:06:05,440 Speaker 1: less on that particular good. And if you want to 102 00:06:05,440 --> 00:06:08,719 Speaker 1: adduce the consumption of the good, an easy way to 103 00:06:08,760 --> 00:06:11,200 Speaker 1: do it is to tax it, even cigarettes that are 104 00:06:11,200 --> 00:06:16,280 Speaker 1: they addicted. When you increase taxes, consumption went down. Right. 105 00:06:16,760 --> 00:06:18,560 Speaker 1: One thing I wanted because I wanted to bring up 106 00:06:18,800 --> 00:06:21,040 Speaker 1: in regards to this, one of our smart listeners here 107 00:06:21,040 --> 00:06:24,520 Speaker 1: at Bloomberg Radio wrote in yesterday and said and talked 108 00:06:24,560 --> 00:06:27,080 Speaker 1: about that. You know, a real motivator for companies to 109 00:06:27,200 --> 00:06:29,800 Speaker 1: spend money is they're going to look at the r 110 00:06:29,839 --> 00:06:33,200 Speaker 1: o I, the return on investment if building a facility, 111 00:06:33,279 --> 00:06:35,760 Speaker 1: a factory, or investing or doing a certain kind of 112 00:06:35,880 --> 00:06:38,040 Speaker 1: R and D or buying a company or whatever, it 113 00:06:38,120 --> 00:06:40,320 Speaker 1: is going to impact the bottom lines. It's going to 114 00:06:40,440 --> 00:06:43,680 Speaker 1: increase revenues after tax, right, That's what's going to make 115 00:06:43,720 --> 00:06:47,839 Speaker 1: them do something. Absolutely, but even more importantly, I think 116 00:06:47,839 --> 00:06:51,080 Speaker 1: that we are leaving in a global world, and in 117 00:06:51,080 --> 00:06:54,640 Speaker 1: particular think about not according to a lot of politicians, 118 00:06:54,640 --> 00:06:58,440 Speaker 1: because we've seen a big pushback against that globalization. I understand. 119 00:06:58,480 --> 00:07:03,000 Speaker 1: But to day, if you are a Canadian citizen or 120 00:07:03,000 --> 00:07:06,839 Speaker 1: a US citizen and you are thinking about starting a 121 00:07:06,880 --> 00:07:10,880 Speaker 1: business in Canada, it started a business in Detroit, I 122 00:07:10,920 --> 00:07:13,320 Speaker 1: think that why wouldn't you look at the tax rate? 123 00:07:13,360 --> 00:07:16,800 Speaker 1: I think that's an important consideration. And of course, if 124 00:07:16,840 --> 00:07:20,040 Speaker 1: you are thinking about starting a business in Zimbabwe or 125 00:07:20,120 --> 00:07:23,400 Speaker 1: the United States, the copper a tax is probably the 126 00:07:23,720 --> 00:07:26,680 Speaker 1: least of your concerns. But when you when you're comparing 127 00:07:26,720 --> 00:07:31,080 Speaker 1: countries like the US and Canada or the US and 128 00:07:31,080 --> 00:07:35,080 Speaker 1: and the UK, the US and Island. That's a serious issue. 129 00:07:35,520 --> 00:07:37,600 Speaker 1: All right. I'm just gonna offer to two thoughts and 130 00:07:37,640 --> 00:07:39,680 Speaker 1: you can pick whichever one you want to speak to 131 00:07:39,760 --> 00:07:42,760 Speaker 1: the moment. Right Well, I just think this idea of 132 00:07:42,840 --> 00:07:45,800 Speaker 1: you know, choosing between Canada and the United States is 133 00:07:45,840 --> 00:07:50,840 Speaker 1: great in theory, but many people don't necessarily have that choice. 134 00:07:50,880 --> 00:07:54,160 Speaker 1: If you happen to live, let's say, in North Carolina 135 00:07:54,560 --> 00:07:56,680 Speaker 1: and that's where your family is, and you want to 136 00:07:56,680 --> 00:07:59,800 Speaker 1: start a business, you're not gonna necessarily check the tax 137 00:08:00,040 --> 00:08:03,720 Speaker 1: it's in Canada or in uh the in Ireland unless 138 00:08:03,760 --> 00:08:06,600 Speaker 1: you are already in business. I mean, that's that's a 139 00:08:06,640 --> 00:08:09,680 Speaker 1: different kind of choices that something you would agree with, 140 00:08:09,840 --> 00:08:12,840 Speaker 1: Oh absolutely. And this is what you're saying is the 141 00:08:12,880 --> 00:08:15,680 Speaker 1: elasticity and economics that the elasticity is not infinite, and 142 00:08:15,680 --> 00:08:20,160 Speaker 1: it says if we didn't have any friction, then all 143 00:08:20,240 --> 00:08:24,240 Speaker 1: the businesses will move for a difference of one tax rate. 144 00:08:24,520 --> 00:08:27,360 Speaker 1: And we know that's not true. Now we cannot go 145 00:08:27,440 --> 00:08:30,120 Speaker 1: to the other extreme to say that even if they 146 00:08:30,120 --> 00:08:32,880 Speaker 1: have fifteen percentage point of difference, they don't move in 147 00:08:32,920 --> 00:08:36,800 Speaker 1: This Island is a counter example. Island made their success 148 00:08:36,920 --> 00:08:40,520 Speaker 1: by adding an extremely low tax rate. And when you 149 00:08:40,600 --> 00:08:45,000 Speaker 1: in the financial success measured by what I mean, for example, 150 00:08:45,120 --> 00:08:49,600 Speaker 1: by economic growth and put the income. Remember, people were 151 00:08:49,679 --> 00:08:52,679 Speaker 1: emigrating from Ireland to come to this country. Now they 152 00:08:52,679 --> 00:08:55,280 Speaker 1: do the other way around. But as you said earlier, 153 00:08:55,320 --> 00:08:58,920 Speaker 1: the economy and the very size of the country is 154 00:08:58,960 --> 00:09:01,880 Speaker 1: such that compared are to let's say the United States, 155 00:09:02,280 --> 00:09:05,520 Speaker 1: if you have one company leave the United States, the 156 00:09:05,640 --> 00:09:08,920 Speaker 1: effect might be minimal, whereas if you have one company 157 00:09:08,960 --> 00:09:12,080 Speaker 1: go to Ireland, that may change the whole landscape of 158 00:09:12,080 --> 00:09:15,720 Speaker 1: a particular industry group. I completely agree, but there is 159 00:09:15,720 --> 00:09:19,560 Speaker 1: no doubt that Ireland has been a success story. And 160 00:09:19,559 --> 00:09:22,760 Speaker 1: and this success story has been based on attracting phone 161 00:09:22,800 --> 00:09:28,360 Speaker 1: investments because they have low tax rates and of course 162 00:09:28,360 --> 00:09:31,080 Speaker 1: they speak English, that Google a low close to the 163 00:09:31,080 --> 00:09:33,560 Speaker 1: Europeans and all this stuff. So if you do that 164 00:09:33,640 --> 00:09:36,560 Speaker 1: in isolation, again, if you are Tunisia and you lower 165 00:09:36,600 --> 00:09:39,120 Speaker 1: the tax rate, is not that people will flow the 166 00:09:39,160 --> 00:09:42,680 Speaker 1: next day. However, having a lower tax rate is a 167 00:09:42,679 --> 00:09:47,960 Speaker 1: compartive advantage, and especially for multinationals. I agree with you 168 00:09:48,040 --> 00:09:50,800 Speaker 1: that if you start your own little business, then you 169 00:09:51,120 --> 00:09:54,080 Speaker 1: start next generally next to home, because that's where you 170 00:09:54,120 --> 00:09:55,920 Speaker 1: have your network that you know the market and so 171 00:09:55,960 --> 00:09:58,680 Speaker 1: on and so forth. But if you are multinational or 172 00:09:58,880 --> 00:10:01,560 Speaker 1: once your business start be successful, then you we locate. 173 00:10:01,679 --> 00:10:04,560 Speaker 1: And this is right, And we're seeing, Luigi, a lot, 174 00:10:04,600 --> 00:10:07,120 Speaker 1: actually a lot more major companies even doing more in 175 00:10:07,160 --> 00:10:11,439 Speaker 1: their backyards, doing producing and manufacturing closer to where they're selling. 176 00:10:11,440 --> 00:10:14,000 Speaker 1: We're seeing that kind of trend happening all right, Luigi's 177 00:10:14,000 --> 00:10:15,640 Speaker 1: and goals. We hope you're not out of a job soon, 178 00:10:15,640 --> 00:10:17,880 Speaker 1: because we want to continue talking with you. Finance professor 179 00:10:17,920 --> 00:10:33,920 Speaker 1: at University of Chicago Boschal. We've got Michael Purpose of 180 00:10:34,000 --> 00:10:36,920 Speaker 1: Weedning Company. He's the chief global strategist. He's been up 181 00:10:36,960 --> 00:10:40,240 Speaker 1: all night. Michael, I know you've been looking ahead to eighteen. 182 00:10:40,320 --> 00:10:42,520 Speaker 1: You're not just planning the New Year's party. You've been 183 00:10:42,520 --> 00:10:44,839 Speaker 1: taking a look at a variety of asset classes and 184 00:10:44,880 --> 00:10:46,320 Speaker 1: wondering if we could just get a little bit of 185 00:10:46,320 --> 00:10:49,199 Speaker 1: a window into your thinking before you publish the report. 186 00:10:49,200 --> 00:10:51,400 Speaker 1: I don't want you to give away anything, right Well, 187 00:10:51,600 --> 00:10:54,400 Speaker 1: I think as we look, as I'm looking towards your head, 188 00:10:54,440 --> 00:10:57,440 Speaker 1: I'm sort of, you know, trying to figure out, you know, 189 00:10:58,160 --> 00:11:00,760 Speaker 1: you know, what is you know subsequently to be different 190 00:11:00,800 --> 00:11:03,200 Speaker 1: next year, UM than than in the last year, or 191 00:11:03,200 --> 00:11:05,800 Speaker 1: for that matter, any of the years going back for 192 00:11:06,000 --> 00:11:07,520 Speaker 1: or five years. I really kind of look at it 193 00:11:07,520 --> 00:11:09,720 Speaker 1: as sort of more of the same. Um. We have 194 00:11:09,800 --> 00:11:12,160 Speaker 1: a what what I have, I call it him my 195 00:11:12,200 --> 00:11:14,920 Speaker 1: sort of two to two condition two percent real uh 196 00:11:15,040 --> 00:11:17,760 Speaker 1: two percent inflation two percent on the ten year treasury. 197 00:11:17,960 --> 00:11:20,560 Speaker 1: Those three numbers are big, round numbers, and they're maybe 198 00:11:20,640 --> 00:11:21,959 Speaker 1: now two and a half two and a half two 199 00:11:21,960 --> 00:11:24,640 Speaker 1: and a half that arguably, but they're sort of coagulating 200 00:11:24,640 --> 00:11:27,520 Speaker 1: with each other. And against that backdrop, you have a 201 00:11:27,520 --> 00:11:31,520 Speaker 1: recipe for high pease to be continue to be supported. 202 00:11:32,480 --> 00:11:35,080 Speaker 1: And you don't need you know, rock star earnings growth 203 00:11:35,120 --> 00:11:38,439 Speaker 1: to get rock star rallies, right, you can get um. 204 00:11:38,480 --> 00:11:42,400 Speaker 1: You know, since two thousand ten, uh, PE expansion has 205 00:11:42,760 --> 00:11:45,880 Speaker 1: has been about eight percent per year on average, and 206 00:11:45,920 --> 00:11:48,640 Speaker 1: earnings growth has been about six percent per year on average. 207 00:11:49,040 --> 00:11:51,560 Speaker 1: So that PE expansion has been a core part of 208 00:11:51,600 --> 00:11:54,640 Speaker 1: that that that this this bill run, and I am 209 00:11:54,679 --> 00:11:58,719 Speaker 1: expecting that to continue. UM. But my big questions are, well, 210 00:11:58,720 --> 00:12:00,840 Speaker 1: what's going to disrupt that frame work? Right? And I 211 00:12:00,880 --> 00:12:02,720 Speaker 1: think that gets back to this what we're talking about 212 00:12:02,720 --> 00:12:07,320 Speaker 1: with volatility, which is inflation. UM. If inflation is to rise, 213 00:12:07,920 --> 00:12:10,600 Speaker 1: it maybe because growth is accelerating in the US and 214 00:12:10,640 --> 00:12:13,599 Speaker 1: other parts of the world, and maybe because of commodity 215 00:12:13,640 --> 00:12:18,040 Speaker 1: prices continue you know, to to rally higher. UM. Uh. 216 00:12:18,120 --> 00:12:19,960 Speaker 1: You know, there's a whole there's a whole the scape 217 00:12:20,040 --> 00:12:22,400 Speaker 1: discussion there. But if we if we start seeing inflation, 218 00:12:22,400 --> 00:12:25,040 Speaker 1: which has been so low, you're gonna start seeing a 219 00:12:25,120 --> 00:12:28,000 Speaker 1: few things happen. You're gonna start seeing real earnings yields 220 00:12:28,000 --> 00:12:32,240 Speaker 1: compressed to arguably maybe a dangerous zone real earnings ZELD 221 00:12:32,320 --> 00:12:35,240 Speaker 1: because inflation has actually been declining through much of this 222 00:12:35,280 --> 00:12:37,599 Speaker 1: equity rally, which is a very unusual. Right as you 223 00:12:37,640 --> 00:12:40,600 Speaker 1: go into an economic cycle, you expect inflation, if anything, 224 00:12:40,640 --> 00:12:43,440 Speaker 1: to to to stiffen up, but it actually has been 225 00:12:43,440 --> 00:12:48,760 Speaker 1: declining UM and that's really supported UM high real earnings yields. Right, So, 226 00:12:48,800 --> 00:12:51,400 Speaker 1: if if inflation is to surge next year another i 227 00:12:51,400 --> 00:12:53,640 Speaker 1: don't know, fifty maybe seventy five, maybe even a hundred 228 00:12:53,640 --> 00:12:55,560 Speaker 1: basis points. I'm not saying it's going to, but if 229 00:12:55,600 --> 00:12:58,559 Speaker 1: it were to, that's going to really recavo on real 230 00:12:58,600 --> 00:13:00,920 Speaker 1: earnings yields UM. As. Second thing that's gonna do is 231 00:13:00,960 --> 00:13:03,840 Speaker 1: it's probably gonna lift the treasury yields much higher. And 232 00:13:03,880 --> 00:13:08,720 Speaker 1: as that happens, the spread between the the dividend yield 233 00:13:08,800 --> 00:13:11,400 Speaker 1: on the SMP five hundred and the treasury yield is 234 00:13:11,400 --> 00:13:12,880 Speaker 1: going to widen to the bit where you're not going 235 00:13:12,920 --> 00:13:15,040 Speaker 1: to have that. That's my way of sort of quantifying 236 00:13:15,040 --> 00:13:16,840 Speaker 1: where the Fed put is and the Fed puts gonna 237 00:13:16,840 --> 00:13:19,040 Speaker 1: fall much for the route of the money. So that's 238 00:13:19,040 --> 00:13:22,079 Speaker 1: gonna make take a much more robust volatil drive much 239 00:13:22,080 --> 00:13:25,199 Speaker 1: more volatility surface um and then finally you know it's 240 00:13:25,200 --> 00:13:27,840 Speaker 1: going to really inflation is going to drive down earnings 241 00:13:27,880 --> 00:13:31,199 Speaker 1: visibility UM there there. The year for year earnings growth 242 00:13:31,200 --> 00:13:34,320 Speaker 1: we've had during this rally has been if you actually 243 00:13:34,320 --> 00:13:36,520 Speaker 1: look at the volatility of that earnings growth, it's been 244 00:13:36,520 --> 00:13:39,240 Speaker 1: about the lowest it spend since the SMP started in 245 00:13:39,240 --> 00:13:43,000 Speaker 1: the early nineteen fifties, UM And And I think what's 246 00:13:43,000 --> 00:13:45,680 Speaker 1: gonna as inflation goes higher. You're gonna get into a 247 00:13:45,679 --> 00:13:49,200 Speaker 1: lot more interesting questions about where margins going to actually be. 248 00:13:49,960 --> 00:13:52,599 Speaker 1: And you don't need a lot of margin compression to 249 00:13:52,679 --> 00:13:56,040 Speaker 1: offset any top line growth. Right Basically, if you were 250 00:13:56,080 --> 00:13:59,839 Speaker 1: to get a hundred basis points um uh, pick up 251 00:13:59,840 --> 00:14:03,560 Speaker 1: in hopline growth because of higher nominal GDP, you only 252 00:14:03,600 --> 00:14:06,600 Speaker 1: need ten basis points of margin compression to really offset 253 00:14:06,640 --> 00:14:09,920 Speaker 1: that from a where's the SMP earnings and aggregate going 254 00:14:09,960 --> 00:14:12,720 Speaker 1: to go? So that says to me that there could be, 255 00:14:12,960 --> 00:14:15,280 Speaker 1: you know, in terms of the equity moves, we could 256 00:14:15,320 --> 00:14:17,720 Speaker 1: start to see a different direction next. Oh yeah, I 257 00:14:17,720 --> 00:14:21,000 Speaker 1: think I think ultimately, what you know, it will be 258 00:14:21,040 --> 00:14:23,800 Speaker 1: a much more interesting discussion if we get a higher 259 00:14:23,800 --> 00:14:26,360 Speaker 1: inflation story there because for all those reasons I mentioned, 260 00:14:26,360 --> 00:14:29,720 Speaker 1: you're gonna see a richer volatility surface. Um, Different sectors 261 00:14:29,720 --> 00:14:32,440 Speaker 1: are going to do different things, um, And ultimately you're 262 00:14:32,440 --> 00:14:36,680 Speaker 1: gonna seep compression in that context. However, um, if inflation 263 00:14:36,760 --> 00:14:39,960 Speaker 1: still stays low and rates still stay low, right, and 264 00:14:40,000 --> 00:14:42,880 Speaker 1: all those conditions that have defined the backdrop over the 265 00:14:42,960 --> 00:14:46,200 Speaker 1: last few years are are to continue, then I think 266 00:14:46,200 --> 00:14:47,600 Speaker 1: you're going to see more of the same. You're going 267 00:14:47,680 --> 00:14:50,160 Speaker 1: to see, you know, a nice year of earning strowth, 268 00:14:50,240 --> 00:14:52,960 Speaker 1: not a great year, um, you know, backing at this 269 00:14:53,000 --> 00:14:55,880 Speaker 1: one time boost from tax reform, and then you're you're 270 00:14:55,920 --> 00:14:59,560 Speaker 1: going to see um, you know probably um, you know, 271 00:14:59,680 --> 00:15:03,040 Speaker 1: tach to continue to outperform. You're gonna see industrials with 272 00:15:03,080 --> 00:15:05,960 Speaker 1: global exposure continuing to outperform, and you're gonna see banks 273 00:15:06,200 --> 00:15:09,160 Speaker 1: continuing to outperform. What if we you know, I mentioned Washington. 274 00:15:09,240 --> 00:15:12,440 Speaker 1: We just had Donald Trump tweeting about the US Post 275 00:15:12,480 --> 00:15:14,800 Speaker 1: Office kind of giving things away in terms of not 276 00:15:14,920 --> 00:15:18,680 Speaker 1: charging maybe Amazon enough to use its services. Um, political 277 00:15:19,960 --> 00:15:22,760 Speaker 1: impact and whether that comes in the way of maybe 278 00:15:22,880 --> 00:15:26,840 Speaker 1: infrastructure spending that we finally get, or just the you know, 279 00:15:26,920 --> 00:15:29,360 Speaker 1: the president kind of keeping everybody on edge by shooting 280 00:15:29,400 --> 00:15:32,400 Speaker 1: something out in the morning. Um, how might that impact 281 00:15:32,440 --> 00:15:37,200 Speaker 1: things in We got about fifty seconds? Okay, Well, um, look, 282 00:15:38,080 --> 00:15:42,120 Speaker 1: basically until tax reform, you know, finally came together in 283 00:15:42,160 --> 00:15:44,640 Speaker 1: the last few weeks, you had basically another form of 284 00:15:44,680 --> 00:15:47,280 Speaker 1: gridlock this year in the market. To just fine with 285 00:15:47,320 --> 00:15:50,200 Speaker 1: that right now, Infrastructure I think is going to be 286 00:15:50,200 --> 00:15:52,920 Speaker 1: a much harder political calculus to solve for than tax 287 00:15:53,000 --> 00:15:56,400 Speaker 1: just simply because but almost more so because taxes passed 288 00:15:56,480 --> 00:15:58,400 Speaker 1: right because of you know, it's gonna it's going to 289 00:15:58,480 --> 00:16:01,960 Speaker 1: drive up deficits even more at least in the short run. So, um, 290 00:16:02,000 --> 00:16:04,600 Speaker 1: it's that's a harder story. If we do get an 291 00:16:04,600 --> 00:16:08,760 Speaker 1: infrastructure bill, I would suggest that that's where the inflation 292 00:16:09,200 --> 00:16:11,760 Speaker 1: discussion gets very relevant, all right, so we'll keep that 293 00:16:11,800 --> 00:16:14,760 Speaker 1: in mind. Michael Purvis, chief Global strategis and head of 294 00:16:14,760 --> 00:16:30,400 Speaker 1: Derivative Strategy for Weaning Company. While if you're getting ready 295 00:16:30,400 --> 00:16:34,120 Speaker 1: to travel, perhaps for the New Year's celebration, none better 296 00:16:34,120 --> 00:16:37,560 Speaker 1: than Julian Keel, senior analyst at The Points Guy to 297 00:16:37,720 --> 00:16:41,160 Speaker 1: help us understand what's going on in the world of travel. Julian, 298 00:16:41,280 --> 00:16:43,080 Speaker 1: thank you very much for being with us, and Happy 299 00:16:43,080 --> 00:16:45,120 Speaker 1: New Year to you, Happy New Year to each too. 300 00:16:45,160 --> 00:16:47,840 Speaker 1: Good morning, good morning, And I'm just so I guess 301 00:16:47,880 --> 00:16:49,960 Speaker 1: I'm I should be you should be glad that you 302 00:16:50,000 --> 00:16:52,520 Speaker 1: were not on that A n A flight from l 303 00:16:52,600 --> 00:16:56,200 Speaker 1: A X to uh I guess it was Tokyo to Narita. 304 00:16:57,400 --> 00:17:00,320 Speaker 1: Can you just recap, just because it's such an amazing story. 305 00:17:00,800 --> 00:17:04,000 Speaker 1: How is it possible that someone who had a boarding 306 00:17:04,000 --> 00:17:09,000 Speaker 1: pass for another flight managed to actually get through that 307 00:17:09,160 --> 00:17:11,679 Speaker 1: screening machine. I mean sometimes I have trouble getting through 308 00:17:11,680 --> 00:17:14,960 Speaker 1: the screening machine even with the right ticket. And the 309 00:17:15,040 --> 00:17:17,600 Speaker 1: person actually found a seat and it was four and 310 00:17:17,640 --> 00:17:20,160 Speaker 1: a half hours I think before they found out what 311 00:17:20,200 --> 00:17:22,320 Speaker 1: was going on. Can you give us any detail? Yeah, 312 00:17:22,359 --> 00:17:27,000 Speaker 1: this is this was definitely a breakdown. In security. Basically 313 00:17:27,040 --> 00:17:29,040 Speaker 1: what happened was and the reason we know all this 314 00:17:29,080 --> 00:17:32,200 Speaker 1: happened is because Christy Teague and the UH was tweeting 315 00:17:32,200 --> 00:17:35,200 Speaker 1: it on She was on the plane in business class 316 00:17:35,200 --> 00:17:38,600 Speaker 1: and tweeting it as it went. Just just help, thank you, 317 00:17:38,720 --> 00:17:44,080 Speaker 1: just mottel. Christy Teagan married to John Legend and she's 318 00:17:44,119 --> 00:17:46,639 Speaker 1: really fun on Twitter. I've gotta say is that she 319 00:17:46,680 --> 00:17:51,399 Speaker 1: loved She actually wants review airline food, she said, for 320 00:17:51,440 --> 00:17:54,920 Speaker 1: a living, as I think, in addition to her current occupation. 321 00:17:55,600 --> 00:17:59,879 Speaker 1: But what actually happened was two brothers got onto this 322 00:18:00,040 --> 00:18:03,000 Speaker 1: flight using the same boarding pass and using a copy 323 00:18:03,080 --> 00:18:06,639 Speaker 1: of one boarding pass. The two brothers had very similar names. 324 00:18:06,720 --> 00:18:11,240 Speaker 1: So even though the machine certainly would have beeped as 325 00:18:11,240 --> 00:18:14,840 Speaker 1: this pass with scan that twice, UH, the agent has 326 00:18:14,880 --> 00:18:18,080 Speaker 1: to act on that information. The agent has to look 327 00:18:18,119 --> 00:18:21,359 Speaker 1: at the situation and decide is this somebody who's trying 328 00:18:21,400 --> 00:18:24,640 Speaker 1: to do something wrong or did somebody simply get off 329 00:18:24,640 --> 00:18:26,480 Speaker 1: the plane then try and get back on with the 330 00:18:26,520 --> 00:18:30,520 Speaker 1: same pass. That didn't happen, and other security checks didn't 331 00:18:30,520 --> 00:18:34,119 Speaker 1: happen as far as head count checking the manifest, so 332 00:18:34,160 --> 00:18:36,119 Speaker 1: it was a good four or five hours before they 333 00:18:36,160 --> 00:18:38,399 Speaker 1: realized that there was an extra person on this plane, 334 00:18:38,720 --> 00:18:40,520 Speaker 1: and they turned the plane around and came back to 335 00:18:40,640 --> 00:18:42,520 Speaker 1: l A and lucky enough that there was an empty 336 00:18:42,520 --> 00:18:44,679 Speaker 1: sea right, because obviously, if they were sitting in a 337 00:18:44,800 --> 00:18:48,160 Speaker 1: seat that was already taken, I'm assuming that this problem 338 00:18:48,200 --> 00:18:50,359 Speaker 1: would have been brought to everyone's attention a lot sooner, 339 00:18:50,400 --> 00:18:52,879 Speaker 1: certainly before they took off. Right. If the person was 340 00:18:52,960 --> 00:18:54,880 Speaker 1: hiding in the bathroom, that you would assume that would 341 00:18:54,920 --> 00:18:57,280 Speaker 1: have been caught much fatter. So, yes, he must have 342 00:18:57,280 --> 00:18:59,679 Speaker 1: been sitting in an empty seat. We don't know the 343 00:18:59,720 --> 00:19:02,080 Speaker 1: details on that yet, but that certainly makes sense. It's 344 00:19:02,160 --> 00:19:06,160 Speaker 1: also interesting that they even caught it at that point. Well, Julie, 345 00:19:06,160 --> 00:19:08,600 Speaker 1: as someone that knows all the ins and outs of 346 00:19:08,640 --> 00:19:12,520 Speaker 1: the points and getting elite status, is there anything that 347 00:19:12,560 --> 00:19:16,320 Speaker 1: you can point to that you can offer people that 348 00:19:16,400 --> 00:19:19,000 Speaker 1: are looking for these kinds of special status. Is to 349 00:19:19,160 --> 00:19:22,040 Speaker 1: enhance and make better the travel experience? What should they 350 00:19:22,080 --> 00:19:25,920 Speaker 1: be doing? Well, eLife status, especially on airlines but hotels 351 00:19:25,960 --> 00:19:28,240 Speaker 1: as well, isn't quite what it used to be. If 352 00:19:28,280 --> 00:19:31,879 Speaker 1: you're not going to travel regularly, then often the cost 353 00:19:31,960 --> 00:19:34,440 Speaker 1: of getting that status is not worth the perks. Because 354 00:19:34,440 --> 00:19:36,919 Speaker 1: a lot of them have been scaled down as the 355 00:19:37,000 --> 00:19:39,399 Speaker 1: economy has been strong over the last two years and 356 00:19:39,520 --> 00:19:43,280 Speaker 1: airlines have found their seats easier to sell and easier 357 00:19:43,320 --> 00:19:47,440 Speaker 1: to fill. But if you are traveling on a regular basis, 358 00:19:47,720 --> 00:19:50,840 Speaker 1: then at least as can be helpful and your best 359 00:19:50,880 --> 00:19:54,240 Speaker 1: that if possible, it's try and focus your travel on 360 00:19:54,240 --> 00:19:57,520 Speaker 1: one airline. A lot of people, unfortunately have to spread 361 00:19:57,560 --> 00:20:00,119 Speaker 1: their travel out across two or three different airlines, and 362 00:20:00,160 --> 00:20:02,680 Speaker 1: that makes it more difficult. So what's the best airline 363 00:20:02,720 --> 00:20:05,840 Speaker 1: to have all this status on? It depends on where 364 00:20:05,840 --> 00:20:07,920 Speaker 1: you're flying in and out of. If you're a hub 365 00:20:07,960 --> 00:20:10,680 Speaker 1: captive as they call as we call it, meaning if 366 00:20:10,720 --> 00:20:13,479 Speaker 1: you say live in Dallas, then you're probably gonna want 367 00:20:13,520 --> 00:20:15,840 Speaker 1: status on Americans since that's one of their hubs. So 368 00:20:15,840 --> 00:20:18,080 Speaker 1: it really depends on where you're flying from and where 369 00:20:18,080 --> 00:20:20,679 Speaker 1: you're flying to on a regular basis. If you're somewhere 370 00:20:20,680 --> 00:20:22,520 Speaker 1: they're like in the New York metro area, Like Pim 371 00:20:22,520 --> 00:20:26,520 Speaker 1: and myself, we're just wondering, is there like a certain airline? Well, 372 00:20:26,640 --> 00:20:28,560 Speaker 1: if you were going to go in and out of 373 00:20:28,600 --> 00:20:31,720 Speaker 1: Newark on a regular basis, then United would probably be 374 00:20:31,760 --> 00:20:34,240 Speaker 1: your choice since that's one of their main hubs, but 375 00:20:34,400 --> 00:20:36,440 Speaker 1: we're actually fairly lucky here in New York, and that 376 00:20:36,600 --> 00:20:40,880 Speaker 1: the major three airlines Delta, United, American all have quite 377 00:20:40,880 --> 00:20:42,639 Speaker 1: a bit of service out of the New York area 378 00:20:42,720 --> 00:20:45,760 Speaker 1: since it's such a large market, both domestic and internationals. 379 00:20:45,840 --> 00:20:47,560 Speaker 1: So you have a bit of a choice here in 380 00:20:47,840 --> 00:20:50,520 Speaker 1: this neck of the woods. Hey, I gotta ask you too, though, 381 00:20:50,760 --> 00:20:55,680 Speaker 1: has consolidation been good or bad for consumers? I'm someone 382 00:20:55,680 --> 00:20:57,760 Speaker 1: who does fly in and out of Newark and awful lot, 383 00:20:57,840 --> 00:21:00,880 Speaker 1: and I've got to say that I've had some ups 384 00:21:00,880 --> 00:21:04,960 Speaker 1: and downs among you know, United and Continental coming together. 385 00:21:05,000 --> 00:21:08,679 Speaker 1: I know it was a massive consolidation there, but what 386 00:21:08,840 --> 00:21:11,919 Speaker 1: have you seen as we get kind of fewer and 387 00:21:11,920 --> 00:21:15,320 Speaker 1: fewer major carriers. Yeah, the bad news is that consolidation 388 00:21:15,480 --> 00:21:19,320 Speaker 1: definitely doesn't favor the consumer. Competition favors the consumers, so 389 00:21:19,720 --> 00:21:23,400 Speaker 1: fewer airlines is not good for passengers. The good news, though, 390 00:21:23,480 --> 00:21:27,160 Speaker 1: is that the low cost carriers like Spirit, Frontier Allegiance 391 00:21:27,480 --> 00:21:30,880 Speaker 1: have stepped into that breach, and even though people don't 392 00:21:30,880 --> 00:21:34,040 Speaker 1: necessarily love flying low cost carriers, they are helping to 393 00:21:34,160 --> 00:21:37,760 Speaker 1: keep the prices down so that airfares are not spiraling 394 00:21:37,840 --> 00:21:40,320 Speaker 1: up out of control as they might be otherwise if 395 00:21:40,320 --> 00:21:43,639 Speaker 1: there were only three or four major players, Julian, have 396 00:21:43,720 --> 00:21:46,919 Speaker 1: you ever tracked how far it takes to walk to 397 00:21:47,000 --> 00:21:50,920 Speaker 1: the actual gait of your aircraft when you enter the terminal? 398 00:21:52,600 --> 00:21:55,560 Speaker 1: You know, I was just flying last week to Los 399 00:21:55,560 --> 00:21:58,480 Speaker 1: Angeles and I was walking with my eighty two year 400 00:21:58,480 --> 00:22:02,480 Speaker 1: old mother from UH security all the way to Gate 401 00:22:02,600 --> 00:22:05,840 Speaker 1: thirty three in JFK Airport. And I'll tell you she 402 00:22:06,080 --> 00:22:08,879 Speaker 1: I was as exhausted as she was. You didn't get 403 00:22:08,920 --> 00:22:10,680 Speaker 1: a ride. That's when you hail one of those little 404 00:22:10,880 --> 00:22:14,520 Speaker 1: golf cars, you know. In all fairness, several employees asked 405 00:22:14,560 --> 00:22:16,919 Speaker 1: us if we wanted to vide, but mom wanted to 406 00:22:16,960 --> 00:22:20,080 Speaker 1: walk it. So what's some of the innovation that you're 407 00:22:20,119 --> 00:22:25,560 Speaker 1: seeing among travel. Well, you know, the airlines and the 408 00:22:25,600 --> 00:22:31,320 Speaker 1: hotels are always very interested in new technologies. They're trying 409 00:22:31,359 --> 00:22:33,600 Speaker 1: to always stay a little bit ahead of the curve. 410 00:22:33,880 --> 00:22:37,439 Speaker 1: Airline I t isn't always the best. Hotels are a 411 00:22:37,440 --> 00:22:39,680 Speaker 1: little more advanced when it comes to that. As far 412 00:22:39,720 --> 00:22:43,199 Speaker 1: as looking at when you're coming to a hotel, you 413 00:22:43,200 --> 00:22:45,320 Speaker 1: can check in on your phone. Now you can ask 414 00:22:45,400 --> 00:22:48,600 Speaker 1: for services via an app. So that's the sort of 415 00:22:48,600 --> 00:22:52,320 Speaker 1: ways that the travel companies are enhancing and using technology 416 00:22:52,320 --> 00:22:56,240 Speaker 1: to enhance their experiences. And Julian and talk about enhancing 417 00:22:56,280 --> 00:22:59,720 Speaker 1: the experience in a hotel or even in an airport, 418 00:22:59,760 --> 00:23:03,159 Speaker 1: one about enhancing the experience on an aircraft. Are we 419 00:23:03,240 --> 00:23:06,320 Speaker 1: going to see smaller aircraft maybe hundred hundred and fifty 420 00:23:06,400 --> 00:23:10,160 Speaker 1: passenger seat aircraft and that's going to change the sort 421 00:23:10,200 --> 00:23:14,400 Speaker 1: of the regional nature of travel. Well, we're definitely gonna see, uh, 422 00:23:15,160 --> 00:23:18,359 Speaker 1: not just it's not just smaller aircraft, but more to 423 00:23:18,400 --> 00:23:21,959 Speaker 1: the point, smaller seats. Uh. The airlines are going out 424 00:23:22,000 --> 00:23:24,239 Speaker 1: of their way to pack as many passengers as they 425 00:23:24,280 --> 00:23:27,159 Speaker 1: can into these cabins. Obviously, the more people they can 426 00:23:27,200 --> 00:23:29,640 Speaker 1: fly in a flight than the more money they can 427 00:23:29,680 --> 00:23:32,440 Speaker 1: make per passenger, or the more money they can make overall, 428 00:23:32,480 --> 00:23:34,919 Speaker 1: because they're making more money for each past You serious, 429 00:23:34,960 --> 00:23:39,400 Speaker 1: how much smaller can they get? You know? Americans just 430 00:23:39,840 --> 00:23:42,760 Speaker 1: had to reverse themselves a few months ago because they 431 00:23:42,760 --> 00:23:46,160 Speaker 1: were going to go to what's called a nine in pitch, 432 00:23:46,240 --> 00:23:50,280 Speaker 1: which is the distance between each seat back, and they 433 00:23:50,359 --> 00:23:53,159 Speaker 1: had enough outcry from their customers that they put it 434 00:23:53,160 --> 00:23:56,760 Speaker 1: back out to But it's, uh, we're we're getting to 435 00:23:56,840 --> 00:23:59,280 Speaker 1: the we're pushing the envelope as far as we can here. 436 00:24:00,000 --> 00:24:04,600 Speaker 1: What about this new long long range NonStop flight In March, 437 00:24:04,920 --> 00:24:10,680 Speaker 1: Quantas is set to begin NonStop seventeen hour flight from 438 00:24:10,760 --> 00:24:16,200 Speaker 1: London to Perth, Australia. They're using a seven eight seven Dreamliner. 439 00:24:17,280 --> 00:24:21,600 Speaker 1: Are we seeing more flights of greater duration? We are, 440 00:24:21,720 --> 00:24:24,760 Speaker 1: in fact that flight is replacing a flight from Dubai 441 00:24:24,840 --> 00:24:28,199 Speaker 1: to Auckland, which is currently the longest flight, and it 442 00:24:28,240 --> 00:24:31,840 Speaker 1: will be replaced in two thousand nineteen by New York 443 00:24:31,920 --> 00:24:35,360 Speaker 1: to Singapore from Singapore Airlines. So we are seeing more 444 00:24:35,480 --> 00:24:38,879 Speaker 1: of these long haul NonStop flights as long as there 445 00:24:38,920 --> 00:24:41,920 Speaker 1: are a call for it from businesses who want their 446 00:24:41,920 --> 00:24:44,040 Speaker 1: people to be from gift from A to B as 447 00:24:44,119 --> 00:24:46,880 Speaker 1: quickly as possible, We're going to see more of those 448 00:24:47,200 --> 00:24:50,160 Speaker 1: up here. Hey, Julian, just quickly fifteen seconds for Charlie 449 00:24:50,200 --> 00:24:52,960 Speaker 1: Pellett who loves to take cruises. Got any advice for him? Hey? 450 00:24:53,440 --> 00:24:55,320 Speaker 1: You know, my girlfriend and I went on at Disney 451 00:24:55,359 --> 00:24:58,359 Speaker 1: Cruise a couple of years ago, and even without kids, 452 00:24:58,640 --> 00:25:00,920 Speaker 1: it's a lot of fun. I definitely we recommended. Don't 453 00:25:00,920 --> 00:25:02,840 Speaker 1: you love the frames that as you move around they 454 00:25:02,920 --> 00:25:06,520 Speaker 1: like change and that it's pretty cool stuff. It's Disney Magic. 455 00:25:06,720 --> 00:25:10,000 Speaker 1: It's bad. Yeah, Disney Magic on the high seas well Ton. 456 00:25:10,119 --> 00:25:13,600 Speaker 1: Thanks very much, Julian Kiele. He is the senior analyst 457 00:25:13,720 --> 00:25:21,440 Speaker 1: for The Points Guy, giving us a little looking to travel. 458 00:25:24,520 --> 00:25:28,720 Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and 459 00:25:28,760 --> 00:25:34,040 Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast 460 00:25:34,119 --> 00:25:38,359 Speaker 1: platform you prefer. I'm on Twitter at Tom Keane before 461 00:25:38,400 --> 00:25:42,600 Speaker 1: the podcast. You can always catch us worldwide. I'm Bloomberg Radio.