WEBVTT - Examining Consumer Health and US Climate Policy 0:00:00.080 --> 0:00:06.760 Bloomberg Audio Studios, Podcasts, radio news. 0:00:11.960 --> 0:00:15.560 This is the Bloomberg Surveillance Podcast. I'm Tom Keene along 0:00:15.600 --> 0:00:18.960 with Paul Sweeney. Join us each day for insight from 0:00:18.960 --> 0:00:23.119 the best in economics, finance, investment, and international relations. You 0:00:23.160 --> 0:00:26.520 can also watch the show live on YouTube. Visit the 0:00:26.520 --> 0:00:31.280 Bloomberg Podcast channel on YouTube to see the show weekday 0:00:31.280 --> 0:00:34.320 mornings from seven to ten am Eastern from our global 0:00:34.360 --> 0:00:39.000 headquarters in New York City. Subscribe to the podcast on Apple, Spotify, 0:00:39.360 --> 0:00:42.920 or anywhere else you listen and always I'm Bloomberg Radio, 0:00:43.080 --> 0:00:46.280 the Bloomberg Terminal, and the Bloomberg Business App. 0:00:46.360 --> 0:00:47.720 Paulciana joins us. 0:00:48.720 --> 0:00:52.200 Had his fit technical strategy at Bank of America. Paul, 0:00:52.320 --> 0:00:54.360 you don't mince any words about it. This is a 0:00:54.400 --> 0:00:56.880 two year going well above five percent? How does it 0:00:56.920 --> 0:00:57.240 get there? 0:00:57.320 --> 0:00:57.520 Yes? 0:00:57.560 --> 0:01:01.160 Indeed, so base case technical process says there's something called 0:01:01.200 --> 0:01:04.360 a rising wedge pattered forming and the riding wet term 0:01:04.480 --> 0:01:06.959 chart of two year yield right, which says this cycle 0:01:07.240 --> 0:01:09.600 needs to make another marginal new high this year. 0:01:09.640 --> 0:01:11.520 What is the bet now in the bond market? 0:01:11.600 --> 0:01:13.840 Can it be like an in video where everybody's on 0:01:13.920 --> 0:01:17.320 board an inequity stock in luisja Buscham because there's an 0:01:17.800 --> 0:01:19.440 is there an oomph to the bid? 0:01:20.080 --> 0:01:22.400 Excuse me? Is there an oomp to a lower price 0:01:22.480 --> 0:01:23.839 higher yield on two your. 0:01:24.040 --> 0:01:27.160 I think it's driven by the commodity space. Really, the 0:01:27.280 --> 0:01:28.160 higher commodities. 0:01:28.280 --> 0:01:33.560 You're speaking terms of Francisco Blanche. It's unbelievable, that's breaking news. 0:01:34.400 --> 0:01:36.960 Commodities are driving the two year yield. 0:01:37.080 --> 0:01:41.520 Yes, it's the inflation scare, right. The higher commodity prices go, 0:01:41.760 --> 0:01:44.960 the more markets think about sticky inflation, the risk of 0:01:45.120 --> 0:01:48.480 the Fed staying on hold for longer, potentially pricing outcuts 0:01:48.800 --> 0:01:51.200 the narrative talking about whether or not we get a hike, 0:01:51.240 --> 0:01:52.280 which is unlikely. 0:01:52.360 --> 0:01:54.480 But yeah, I mean the interns today, Paul, and it 0:01:54.560 --> 0:01:57.120 came in. They didn't break brief me on Brent. Brent 0:01:57.280 --> 0:02:00.160 was eighty three, it's now rounded up eighty five dollars 0:02:00.160 --> 0:02:02.160 a barrel. There's that inflation exactly right. 0:02:02.160 --> 0:02:04.360 And Tom, I'm looking at Paul, She's got this is 0:02:04.400 --> 0:02:04.960 research note. 0:02:04.960 --> 0:02:06.480 There's just way too many charts. 0:02:06.520 --> 0:02:08.720 And I mean, he wrote a book. 0:02:08.720 --> 0:02:12.000 He couldn't he had to. He couldn't even get into 0:02:12.320 --> 0:02:16.200 Le cirque Across was right. He had to show his 0:02:16.280 --> 0:02:18.080 idea at le Circa and they didn't even believe his 0:02:18.160 --> 0:02:21.360 id and he had a book out on technical annalysmis. 0:02:20.840 --> 0:02:22.560 He's like seventeen years exactly. 0:02:22.840 --> 0:02:24.400 So, Paul, what do we do here with this ten 0:02:24.440 --> 0:02:27.280 year treasure? It feels like, I don't know, four point 0:02:27.280 --> 0:02:29.400 fifty fourth were kind of feel like we're in a 0:02:29.840 --> 0:02:31.000 kind of a training ranger. 0:02:31.040 --> 0:02:32.799 How do you think about the ten year we do? 0:02:32.960 --> 0:02:34.799 You know, our our medium term view here in the 0:02:34.840 --> 0:02:37.560 ten year yield is you know, we're in this first 0:02:37.600 --> 0:02:40.480 half of twenty twenty four, which we define as counter 0:02:40.560 --> 0:02:44.000 trend to fourth quarter twenty three. Fourth quarter twenty three 0:02:44.040 --> 0:02:47.240 yields fell, first half of this year yields up. I 0:02:47.280 --> 0:02:50.000 think we're nearing the end of that period where we 0:02:50.040 --> 0:02:52.119 should be looking for tops in the ten year yield 0:02:52.200 --> 0:02:55.160 chart or signals that say we peak out by five 0:02:55.160 --> 0:02:57.359 percent and roll over in the second half of the year. 0:02:57.639 --> 0:03:00.680 You take your trend analyis respected John fitzger Old Kennedy. 0:03:00.760 --> 0:03:02.960 What do we learned by taking the ten year trend 0:03:03.320 --> 0:03:05.639 backed in nineteen sixty two sixty three. 0:03:05.639 --> 0:03:07.720 That it went up for fifteen years and about down 0:03:07.720 --> 0:03:10.160 for thirty So that doesn't mean it can't go up 0:03:10.160 --> 0:03:13.440 for fifteen years, right, anything is possible in markets. And 0:03:13.480 --> 0:03:18.359 what I think changed in twenty twenty was the downtrending yields. 0:03:18.440 --> 0:03:22.520 That secular decline clearly ended, right, the downtrend channel that 0:03:22.600 --> 0:03:25.000 everybody loves for so long from the peak in nineteen 0:03:25.040 --> 0:03:28.040 eighty five down to the twenty twenty low, it broke. 0:03:28.520 --> 0:03:31.520 And I think what's even more fantastic from a technical 0:03:31.600 --> 0:03:34.240 lens is that there was a head and shoulders bottom 0:03:34.240 --> 0:03:36.480 in the monthly charts of ten year yields when it 0:03:36.560 --> 0:03:40.720 did in fact change the secular tide. And you know, 0:03:41.040 --> 0:03:43.960 to see that happen, it complements the head and shoulders 0:03:43.960 --> 0:03:46.400 top back in the early nineteen eighties. So these are 0:03:46.400 --> 0:03:50.240 the same technical patterns tom that are formed by different 0:03:50.280 --> 0:03:53.280 investors over different generations, repeating themselves. 0:03:53.760 --> 0:03:55.840 So is this kind of a are we Is this 0:03:55.920 --> 0:03:58.400 kind of the new normal here? You know, we got 0:03:58.880 --> 0:04:01.800 a ten year you know four five percent? 0:04:01.880 --> 0:04:04.400 Is that kind of the new normal here? 0:04:05.120 --> 0:04:07.840 I define it as we're now in a secular bear 0:04:07.880 --> 0:04:12.280 market in treasuries, secular overall. Biggest picture, right, people would 0:04:12.280 --> 0:04:15.760 say the equity markets are in a secular bulb, right, 0:04:16.440 --> 0:04:19.040 and treasuries we're in a secular bear, which is rising 0:04:19.080 --> 0:04:22.000 yields for the biggest picture. So this year they come 0:04:22.040 --> 0:04:24.640 back down again, but maybe next year or two they 0:04:24.680 --> 0:04:25.480 go to higher highs. 0:04:25.520 --> 0:04:27.960 If a stock is a moonshot, and we're gonna go 0:04:27.960 --> 0:04:30.520 a little technical here now because Ciana can keep up 0:04:30.520 --> 0:04:33.120 with this if you run a semi logue or slope 0:04:33.120 --> 0:04:36.440 matters percent change, and even if you take Wells Wader 0:04:36.480 --> 0:04:38.680 in nineteen seventy eight and you look at some trend. 0:04:38.440 --> 0:04:43.160 Analysis as well. Can you chart in Vidia? I mean, 0:04:43.240 --> 0:04:46.120 I'm not it's outside your remit to give me buy, 0:04:46.200 --> 0:04:47.600 hold sell on in Vidia? Right? 0:04:47.720 --> 0:04:48.080 True? 0:04:48.240 --> 0:04:52.600 Okay? Can you technically chart a moonshot, whether it's copper 0:04:52.680 --> 0:04:55.760 or in video? Absolutely? Well, what do you see now 0:04:55.760 --> 0:04:58.799 in a moonshot like in video? Well? Is it contained? 0:04:58.920 --> 0:05:03.039 Is in control? Arithmetic scale? Let's Lisa, it's like. 0:05:03.000 --> 0:05:06.000 A whoa whoa, whoa, whoa whoah to any syllables, Lisa, 0:05:06.040 --> 0:05:10.920 can we go arithmetic today? A logarithmic there we got 0:05:10.920 --> 0:05:12.279 to arithmetic, He's a guest. 0:05:12.400 --> 0:05:14.840 Look logarhythmic scale. It's up into the right. 0:05:16.040 --> 0:05:16.320 Right. 0:05:16.560 --> 0:05:19.240 If you look at the dollar since two thousand and eight, 0:05:19.680 --> 0:05:21.040 the dollars up into the right. 0:05:21.160 --> 0:05:22.039 What's your dollar call? 0:05:22.400 --> 0:05:23.039 We're bullish? 0:05:23.279 --> 0:05:23.840 Your bullish? 0:05:23.880 --> 0:05:27.239 Do you think the dollar stays supported this quarter? There's 0:05:27.240 --> 0:05:30.400 potential for a breakout in the Bloomberg Dollar Index, for example, 0:05:30.680 --> 0:05:33.880 to another high for the year before there's any risk 0:05:33.920 --> 0:05:37.520 of it rolling over. Ultimately, the dollar isn't the trade here. 0:05:37.600 --> 0:05:40.160 It's swings three percent either way. It's the currency on 0:05:40.200 --> 0:05:42.159 the other half. Right, So if you want to carry 0:05:42.240 --> 0:05:44.400 because actually portfolios. 0:05:44.440 --> 0:05:45.479 Sess hour hour. 0:05:46.800 --> 0:05:50.040 Only Damien can talk carry here, Paul I, I really 0:05:50.360 --> 0:05:52.600 I got time for one more question. We have James 0:05:52.680 --> 0:05:56.480 kke Lastman coming in later iconic for Dow thirty six thousand. 0:05:56.480 --> 0:05:59.279 It took a while to get there. Can you frame 0:05:59.320 --> 0:06:02.760 out a roaring twenties like Edyard Denny where we're in 0:06:02.800 --> 0:06:04.320 an extended bull market? 0:06:06.320 --> 0:06:08.120 You know what we can frame out in our equity 0:06:08.160 --> 0:06:12.800 technical research is that every cycle that we've pretty much 0:06:12.839 --> 0:06:16.360 looked at for this year is positive and it does 0:06:16.440 --> 0:06:21.360 indicate stronger statistics for the summer rally and stronger statistics 0:06:21.360 --> 0:06:26.000 to your end. So big picture, we do think that 0:06:26.160 --> 0:06:29.440 equity markets are in the secular bull cycle, not as 0:06:29.480 --> 0:06:32.920 secular bear. So yes, it is supportive of that narrative. 0:06:33.200 --> 0:06:37.120 Okay, okay, he knows what he's talking about. He knows 0:06:37.160 --> 0:06:39.360 who the food court is ex. 0:06:39.400 --> 0:06:42.680 Bloomberg now holding court at Bank of America, doing a 0:06:42.680 --> 0:06:45.119 great job there. And I really can't say enough about 0:06:45.120 --> 0:06:45.480 his book. 0:06:45.520 --> 0:06:46.720 It is not dated. 0:06:46.760 --> 0:06:50.200 It is a brilliant book, a little dense. They're a 0:06:50.200 --> 0:07:04.400 pro book on technicals as well. Thank god for Amanda 0:07:04.440 --> 0:07:07.440 Linum of Villanova who hit the pause button in the 0:07:07.480 --> 0:07:10.360 control room and said there that should do it. I 0:07:10.360 --> 0:07:12.240 mean I had that once happened where you know, it's 0:07:12.280 --> 0:07:15.080 like one little button in a studio and boom it's on. 0:07:15.360 --> 0:07:17.640 Thank you Amanda for getting our audio back. 0:07:17.920 --> 0:07:21.120 Joining us some blackrock, Amandelignum right now, we just had 0:07:21.160 --> 0:07:25.200 Pausiana from Bank of America and it's in the zeitgeist 0:07:25.200 --> 0:07:28.000 as non consensus, but with nominal. 0:07:27.600 --> 0:07:31.480 GDP where it is with the spirit of Atlanta GDP. Now, 0:07:32.520 --> 0:07:35.120 what if rates go higher, how does Blackrock and how 0:07:35.160 --> 0:07:38.040 do you, Amanda line them frame out a two year 0:07:38.120 --> 0:07:40.680 or at five point zero five five point one? 0:07:40.720 --> 0:07:43.160 Oh sure, good morning, and thank you first of all 0:07:43.200 --> 0:07:46.720 for having me. I think, Tom, what you're raising is 0:07:46.720 --> 0:07:49.360 is the reason why we think that there's not really 0:07:49.400 --> 0:07:52.160 a sense of urgency for the FED to normalize policy, 0:07:52.200 --> 0:07:54.880 and even when they do, it's likely to be a 0:07:54.960 --> 0:07:58.080 shallow cutting cycle. So for corporate credit, that means we 0:07:58.080 --> 0:08:01.640 shouldn't be banking on significant near term interest rate relief. 0:08:01.800 --> 0:08:04.240 I think the tail risk that we're watching, and the 0:08:04.320 --> 0:08:07.080 longer that rate cuts get delayed, I think lends more 0:08:07.080 --> 0:08:10.000 credence to this possibility is that of a rate hike. 0:08:10.440 --> 0:08:14.360 And rate hike would not be negative for credit because 0:08:14.360 --> 0:08:18.040 of the incremental twenty five or fifty basis points mathematically, 0:08:18.080 --> 0:08:20.000 it would be more negative for credit because of the 0:08:20.080 --> 0:08:23.160 uncertainty that it would interject related to the forward path 0:08:23.200 --> 0:08:26.080 of monetary policy. That's not a great backdrop for credit. 0:08:26.160 --> 0:08:28.760 That's not a great backdrop for deal making, specifically kind 0:08:28.760 --> 0:08:31.480 of sponsor related m and A. And so that's what 0:08:31.520 --> 0:08:34.559 we're watching for. It's not our base case, but it's 0:08:34.600 --> 0:08:37.200 a concern. And that's that's really the risk. 0:08:37.559 --> 0:08:41.719 Sponsor Sponsor related and A is when the twerp the 0:08:41.840 --> 0:08:43.640 kid asks you if they can go to the third 0:08:43.720 --> 0:08:47.200 lacrosse camp this summer. That's what sponsor really did means. 0:08:47.240 --> 0:08:49.720 So Amanda, he I mean I could sit here to 0:08:49.760 --> 0:08:51.560 your treasury like a lot of investors here and get 0:08:51.559 --> 0:08:52.560 close to five percent. 0:08:53.360 --> 0:08:54.400 That's not a bad trade. 0:08:54.600 --> 0:08:56.120 Or should I take some credit risky things? 0:08:56.160 --> 0:08:58.920 So we like taking credit risk and floating rate exposures, 0:08:58.960 --> 0:09:02.760 So leverage loans, for example, up around three and a 0:09:02.800 --> 0:09:05.760 half percent year to date, outperforming high yield up around 0:09:05.760 --> 0:09:09.320 one point five percent. Total return IG is lagging because 0:09:09.360 --> 0:09:11.840 of the duration exposure. I think importantly, if you're deploying 0:09:11.960 --> 0:09:14.600 money in corporate credit, you need to be deploying for 0:09:14.760 --> 0:09:18.320 income and yield, not for total return. We shouldn't be 0:09:18.360 --> 0:09:22.000 banking on a significant rally in rates to really kind 0:09:22.000 --> 0:09:24.760 of juice those total returns. Nor should we be banking 0:09:24.800 --> 0:09:27.800 on material spread compression, because spreads are already quite tight. 0:09:28.400 --> 0:09:31.320 So really the conversations that we're having in capital deployment 0:09:31.320 --> 0:09:33.400 and corporate credit is really about locking in those yields. 0:09:33.559 --> 0:09:36.440 I'm going to get you in trouble. It's confusing, folks. 0:09:36.480 --> 0:09:40.520 There's black rock, there's blackstone. There's black Rock. 0:09:40.559 --> 0:09:42.880 Which is the building CBS is in over I think 0:09:42.920 --> 0:09:44.240 it's on sixth Avenue. 0:09:44.640 --> 0:09:46.240 A man, I'm going to get you in trouble here. 0:09:46.320 --> 0:09:48.920 If we get a rate regime higher, what does that 0:09:49.080 --> 0:09:52.440 do to private equity and private credit valuations. 0:09:52.880 --> 0:09:54.160 My math doesn't work. 0:09:54.400 --> 0:09:59.480 Yeah, So, somewhat counterintuitively, Tom, against this backdrop of high 0:09:59.559 --> 0:10:03.360 for long, we've seen covenant defaults in one of the 0:10:03.640 --> 0:10:07.480 private credit industries that we track decline for four consecutive quarters, 0:10:08.040 --> 0:10:10.520 which is a bit of a counterintuitive result. It speaks 0:10:10.559 --> 0:10:14.440 to the flexibility that is inherent in this long term 0:10:14.520 --> 0:10:17.400 lender bar relationship. I think the point you're raising is 0:10:17.480 --> 0:10:20.600 also applicable in the public markets, and for a given 0:10:20.679 --> 0:10:23.400 company with a given business model and a given macro 0:10:23.480 --> 0:10:29.160 backdrop of say higher for even longer, they're probably afforded 0:10:29.200 --> 0:10:32.679 more flexibility in the private markets relative to the liquid However, 0:10:33.640 --> 0:10:36.680 I do think that when you're thinking about sponsor related 0:10:36.760 --> 0:10:39.400 m and A, so again not strategic companies buying other companies, 0:10:39.440 --> 0:10:42.760 but more lbo activity, financing is a major component of 0:10:43.160 --> 0:10:46.400 that equation, and so it would likely keep that sort 0:10:46.400 --> 0:10:47.319 of activity well on. 0:10:47.320 --> 0:10:49.040 In Twitter, Yes to this guy, I'm sorry, don't have 0:10:49.040 --> 0:10:51.120 his name in front of it. He's absolutely fabulous. I 0:10:51.160 --> 0:10:53.959 read everything he does. He breaks down all these property 0:10:54.000 --> 0:10:56.800 deals that go bust. And there's a deal that went bust. 0:10:57.040 --> 0:10:59.880 I can't remember the geography it doesn't matter where they 0:11:00.000 --> 0:11:04.640 so the mezzanine financing and equitized it. That's what I 0:11:04.679 --> 0:11:07.440 see coming here with a higher rate regime is somebody 0:11:07.440 --> 0:11:09.400 puts a shotgun too somebody's head and says, all of 0:11:09.480 --> 0:11:10.280 a sudden. 0:11:10.200 --> 0:11:10.840 Its equity. 0:11:11.280 --> 0:11:13.480 And I think with respect to commercial real estate the 0:11:13.520 --> 0:11:16.360 trend that we've seen over the past eighteen months has 0:11:16.400 --> 0:11:20.240 been extending. I think we've underestimated the ability and the 0:11:20.280 --> 0:11:24.000 willingness yeah of lenders to work with their borrowers. And so, 0:11:24.200 --> 0:11:27.440 for example, Real Capital Analytics estimates there was more than 0:11:27.480 --> 0:11:29.920 two hundred billion of CRO debt that was supposed to 0:11:29.920 --> 0:11:32.040 mature in twenty twenty three that did not, so it 0:11:32.080 --> 0:11:34.240 was pushed to twenty twenty four. So now that twenty 0:11:34.240 --> 0:11:36.400 twenty four maturity wall is not six hundred billion, it's 0:11:36.400 --> 0:11:39.240 around eight hundred billion. If we have the environment where 0:11:39.280 --> 0:11:42.719 you interject uncertainty related to monetary policy, I think, but 0:11:43.120 --> 0:11:44.920 there may be a limit to that. I think tom 0:11:44.960 --> 0:11:47.360 is the kind of the tail risk in a higher 0:11:47.400 --> 0:11:50.960 for longer rate environment where importantly there's uncertainty so that 0:11:51.280 --> 0:11:54.800 expectations in that price discovery process can't get met between 0:11:54.840 --> 0:11:56.720 the buyer and the cellar Mandy your. 0:11:56.640 --> 0:12:00.320 Head of macro credit research at Blackrock, How do you 0:12:00.320 --> 0:12:03.360 think about private credit because that's been a business that's 0:12:03.400 --> 0:12:06.080 just exploded in the last ten to fifteen years on 0:12:06.080 --> 0:12:06.520 Wall Street. 0:12:06.679 --> 0:12:09.839 Yeah, we actually have a pretty constructive view on private credit. 0:12:09.880 --> 0:12:12.160 We're expecting it to grow at around a fifteen percent 0:12:12.320 --> 0:12:14.920 compound annual growth rate over the next five years. That's 0:12:14.920 --> 0:12:17.800 actually below the twenty percent compound annual growth rate of 0:12:17.800 --> 0:12:20.559 the past five but we think it's actually a positive 0:12:20.720 --> 0:12:22.960 from the perspective of several years ago, if we were 0:12:23.000 --> 0:12:25.960 having this conversation, a company may have decided between issuing 0:12:25.960 --> 0:12:28.319 a hild bond and a leverage loan in the syndicated market. 0:12:28.400 --> 0:12:31.439 Now there's this third and viable option. Importantly, we also 0:12:31.480 --> 0:12:34.559 see scope for this to grow beyond corporate lending to 0:12:34.760 --> 0:12:37.439 asset based lending. So as banks become more selective with 0:12:37.480 --> 0:12:40.720 their lending, we see actually an opportunity for private credit 0:12:40.720 --> 0:12:42.319 to step in there. So we have a pretty constructiveview 0:12:42.360 --> 0:12:42.560 on it. 0:12:42.920 --> 0:12:46.120 Are you worried at all about the maybe lack of 0:12:46.400 --> 0:12:49.720 regulatory oversight of that market because it doesn't seem like 0:12:50.520 --> 0:12:52.200 it's not an sec type of thing thing. 0:12:52.480 --> 0:12:55.559 There is actually a fair amount of oversight in terms 0:12:55.640 --> 0:12:58.480 of how these companies operate business. I think the one 0:12:59.080 --> 0:13:00.760 stat actually, if I had to pick one that gives 0:13:00.800 --> 0:13:03.320 me comfort, it's that new and this is using data 0:13:03.320 --> 0:13:06.319 from pre quinn New entrance in private credit have raised 0:13:06.320 --> 0:13:09.120 two percent two and a half percent of capital on 0:13:09.200 --> 0:13:12.840 average since twenty twenty two. So it's showing that actually 0:13:12.840 --> 0:13:15.319 the market's being discerning and where it's allocating capital, it's 0:13:15.400 --> 0:13:17.520 valuing expertise, experience, governance. 0:13:17.920 --> 0:13:18.640 Running out of time. 0:13:18.679 --> 0:13:21.000 But a big question, and particularly into the Apple meeting, 0:13:21.559 --> 0:13:24.679 is big tech big tech finally going to grow up 0:13:24.760 --> 0:13:25.959 an issue debt? 0:13:26.400 --> 0:13:29.199 Well, we've seen the capital markets in IG wide open 0:13:29.880 --> 0:13:36.800 books four times over subscribe. I mean, I think if 0:13:36.840 --> 0:13:39.560 I'm a corporate treasurer CFO, especially if I'm in a 0:13:39.640 --> 0:13:42.680 cash rich position, I think I would be I would 0:13:42.760 --> 0:13:45.080 be prudently issuing in the first half of this year. 0:13:45.120 --> 0:13:46.760 There's a fair amount of event risk cutting into the 0:13:46.800 --> 0:13:49.200 second half, where I think whose treasure is to take 0:13:49.240 --> 0:13:51.559 some chips off the table. Specifically, even though the risk 0:13:51.640 --> 0:13:54.080 free rate is elevated, spreads are tight, the tone is good, 0:13:54.480 --> 0:13:57.199 and I think they should probably think about taking that window. 0:13:57.120 --> 0:13:59.800 We got through this without asking her about bitcoin. Yep, 0:14:00.480 --> 0:14:04.439 exactly good. That's good a man, Alinea, This is brilliant. 0:14:04.480 --> 0:14:11.160 Thank you so much. She's with black Rock. Yes, prett 0:14:11.160 --> 0:14:12.200 to digress here right now. 0:14:12.240 --> 0:14:15.040 And it is into the election season and all that 0:14:15.080 --> 0:14:18.160 we have and it is into a taut of two 0:14:18.200 --> 0:14:22.680 hundred and thirty nine page book. It is cheaper, faster, better, 0:14:23.360 --> 0:14:26.040 How will win the Climate War? By a guy who's 0:14:26.120 --> 0:14:28.400 never mailed it in time on the Upper ef. 0:14:28.840 --> 0:14:31.080 You went to Yale and you could have been a flunky, 0:14:31.400 --> 0:14:35.520 and you were absolutely nailed it in economics. Where did 0:14:35.600 --> 0:14:35.760 you know? 0:14:35.840 --> 0:14:38.720 Everybody knows you had to drive in investment capital goldmen 0:14:38.760 --> 0:14:41.720 Sex Morgan stantly blah blah blah. Where did you get 0:14:41.760 --> 0:14:45.480 the drive the first day at Yale University to not 0:14:45.640 --> 0:14:47.400 be another spoiled brat exit? 0:14:47.440 --> 0:14:49.000 Where did that come from? Well? 0:14:49.080 --> 0:14:50.440 I guess you never met my mom. 0:14:51.600 --> 0:14:53.600 You know, it's so funny slave it on maham right. 0:14:53.880 --> 0:14:56.160 Well, I give her an enormous amount of credit because 0:14:56.200 --> 0:14:57.960 she's one of the most down to earth people I've 0:14:58.000 --> 0:14:58.720 met in my whole life. 0:14:58.800 --> 0:14:59.840 Okay, she was you. 0:15:00.200 --> 0:15:02.720 She ran school of volunteer programs all over New York. 0:15:02.760 --> 0:15:04.760 She worked at the House of Detention. Is that right. 0:15:04.840 --> 0:15:07.560 She worked at the Brooklyn House, she rode her bike 0:15:07.600 --> 0:15:10.600 all over the city. She was she accepted herself, and 0:15:10.640 --> 0:15:13.560 that meant she could accept everybody else in society, from 0:15:13.680 --> 0:15:16.040 the fanciest to the least fancy, and look at him 0:15:16.240 --> 0:15:18.000 in the eyes an equal. And that's how I was 0:15:18.000 --> 0:15:19.080 brought up. And that's what I believe. 0:15:19.120 --> 0:15:21.960 The last chapter of Cheaper, Faster, Better is the heart 0:15:22.040 --> 0:15:22.680 of the matter. 0:15:23.200 --> 0:15:27.200 You're widely perceived as a Democrat with Mondel and all 0:15:27.280 --> 0:15:29.920 of your work over the years, but you have to 0:15:30.080 --> 0:15:34.520 speak to a doubting America on climate change. When the 0:15:34.560 --> 0:15:36.920 conservatives read this book, what do you want them to 0:15:36.920 --> 0:15:37.520 get out of it? 0:15:38.400 --> 0:15:41.000 What I want him to think is that this is 0:15:41.040 --> 0:15:44.640 an American a potential American success story, one that we 0:15:44.680 --> 0:15:46.920 are going to win. But we're going to win it together. 0:15:47.480 --> 0:15:50.760 I mean, the book is called Cheaper, Faster, Better, How 0:15:50.800 --> 0:15:52.720 We'll win the climate War, which means we're going to 0:15:52.760 --> 0:15:53.840 win it in the marketplace. 0:15:54.440 --> 0:15:55.680 We're going to win it with. 0:15:55.680 --> 0:15:58.840 The cheapest, best products in the world, and that's actually 0:15:58.840 --> 0:16:01.880 how we're going to solve this crisis. But also how 0:16:01.880 --> 0:16:04.400 we're going to have another American century, how we're going 0:16:04.440 --> 0:16:07.080 to come together as a people. We shouldn't be divided 0:16:07.400 --> 0:16:08.560 on this, we should be together. 0:16:08.720 --> 0:16:09.880 Paul and I are in London. 0:16:10.240 --> 0:16:14.640 Climate change green is you're steeped in it, particularly in 0:16:14.640 --> 0:16:17.840 the continent of Europe as well. Is the reason America's 0:16:17.880 --> 0:16:24.000 behind is some Lockean individualistic ethos from eighteen twenty or 0:16:24.240 --> 0:16:26.120 for the Better seventeen twenty. 0:16:26.200 --> 0:16:28.120 Well, let me say this, Tom, there is a lot 0:16:28.120 --> 0:16:30.760 of talk in the US, but let's look at what's 0:16:30.800 --> 0:16:33.120 actually happening in the US. I mean in one of 0:16:33.120 --> 0:16:36.480 the states where the talk is strongest against the sort 0:16:36.520 --> 0:16:39.720 of clean tech revolution, which would be Texas. They've tripled 0:16:39.760 --> 0:16:41.720 their solar in the last three years and it's going 0:16:41.760 --> 0:16:43.720 to go up another thirty five percent years. 0:16:43.800 --> 0:16:46.040 I saw this week paw An article. Texas is the 0:16:46.040 --> 0:16:48.240 most green state right now, exactly my point. 0:16:48.280 --> 0:16:50.600 So they can talk and talk and talk, but my 0:16:50.800 --> 0:16:55.280 point is we win in the marketplace. Texas produces by 0:16:55.400 --> 0:16:58.760 far the most wind energy of any state by far. 0:16:58.800 --> 0:17:00.760 Why are they doing it to be nice to be woke. 0:17:01.120 --> 0:17:02.640 I think they're doing it because it's cheap and it's 0:17:02.640 --> 0:17:06.280 a good deal. And that's my point is for whatever reason, 0:17:06.320 --> 0:17:08.439 people do it. We need to come together on this 0:17:08.520 --> 0:17:11.720 and win. It's important for us economically, it's important for 0:17:11.800 --> 0:17:14.000 us as a people. And by the way, we look 0:17:14.040 --> 0:17:16.760 at what's happening in Texas, look at what's happening in 0:17:16.800 --> 0:17:20.240 the southern United States right now in terms of storms, 0:17:20.280 --> 0:17:22.600 in terms of a heat dome, in terms of people dying. 0:17:22.960 --> 0:17:25.600 That's what's actually going on, and the people in Texas 0:17:25.640 --> 0:17:28.119 know it. And the question is why don't we accept 0:17:28.200 --> 0:17:31.719 each other, accept each other's motives. We're good people across 0:17:31.760 --> 0:17:34.760 this country. We share an awful lot, we're all patriotic. 0:17:34.880 --> 0:17:36.400 Why don't we go and win together in the way 0:17:36.440 --> 0:17:37.760 that the United States is built to do. 0:17:38.359 --> 0:17:39.800 You take a look at I think if you talk 0:17:39.840 --> 0:17:42.680 to the average personal industry, one of the. 0:17:41.960 --> 0:17:43.040 Things they think about, and I think. 0:17:42.920 --> 0:17:45.560 By clean energy, would be electric vehicles. And we had 0:17:45.600 --> 0:17:48.800 a nice initial surge and we have this great Tesla's 0:17:48.800 --> 0:17:51.199 success story, which is phenomenal. But what we've seen over 0:17:51.200 --> 0:17:53.359 the last year, year and a half, two years is 0:17:54.640 --> 0:17:56.560 pulling back a little bit from the auto industry. It 0:17:56.560 --> 0:17:59.800 seems like maybe the first adopters for evs they're already satiated. 0:18:00.240 --> 0:18:02.320 Where's a demand going to be. That's been a concern. 0:18:02.600 --> 0:18:04.400 Now I read an article in the Journal about maybe 0:18:04.400 --> 0:18:07.479 this whole evy thing's becoming politicized, the people that believe 0:18:07.720 --> 0:18:09.879 in climate change versus the people that don't believe in 0:18:10.280 --> 0:18:11.120 climate change. 0:18:11.440 --> 0:18:13.879 How do you bring those so lot together? Paul, let 0:18:13.960 --> 0:18:16.120 me just tell you a story. So, probably seven years ago, 0:18:16.160 --> 0:18:18.040 one of my very best friends in the world, who 0:18:18.080 --> 0:18:22.199 I would describe as a business Republican, somebody who believes 0:18:22.480 --> 0:18:26.480 that the economy drives success, that business drives the economy. 0:18:26.880 --> 0:18:30.600 That you know, a traditional concert you know, moderate conservative, 0:18:30.640 --> 0:18:33.240 but a really smart guy. He bought a Tesla and 0:18:33.320 --> 0:18:35.399 he's a car guy. He's from California. When I met 0:18:35.440 --> 0:18:36.840 him at eighteen, he took me out in his car 0:18:36.840 --> 0:18:38.120 and took it up to one hundred miles an hour 0:18:38.160 --> 0:18:40.360 to show me how fast it could go. He bought 0:18:40.359 --> 0:18:42.040 a Tesla seven years ago. I said, Matthew, you know, 0:18:42.880 --> 0:18:44.720 you know, are you out to change save the world here? 0:18:44.920 --> 0:18:48.399 He's like, absolutely not. This car goes zero to sixty 0:18:48.520 --> 0:18:50.879 so fast you can't believe it. It handles better than 0:18:50.880 --> 0:18:55.679 the European sports car. I love this car. So in fact, cheaper, faster, better. 0:18:57.040 --> 0:18:59.440 Americans are going to buy the cars that they enjoy, 0:18:59.520 --> 0:19:02.440