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Speaker 1: This is the Bloomberg Surveillance Podcast. I'm Tom Keane, along

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Speaker 1: with Jonathan Farrow and Lisa Abramowitz. Join us each day

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Speaker 1: for insight from the best and economics, geopolitics, finance and investment.

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Speaker 1: Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and

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Speaker 1: anywhere you get your podcasts, and always on Bloomberg dot Com,

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Speaker 1: the Bloomberg Terminal and the Bloomberg Business App. First Order

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Speaker 1: academics on statistics in Central Limit. Theomor Sobrada Rajapa joins

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Speaker 1: us now without Question on debt Our Conversation of the day,

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Speaker 1: Head of US Right Strategy at the Derivative Force Society General.

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Speaker 1: So I'm gonna cut to the chase and go a

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Speaker 1: little bit Matthey here and the equity markets, we talk

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Speaker 1: about a collar maybe even in commodity markets, we talk

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Speaker 1: about a collar trend of copper, live, catt or whatever.

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Speaker 1: What is your world like when the two year yield

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Speaker 1: is collared? How do you respond to abandoned trade on

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Speaker 1: yield in the derivative space?

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Speaker 2: So basically you point as you pointed out, I mean, Tom,

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Speaker 2: you have you know, all yields across the curve and

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Speaker 2: the treasury market have been very range. Found you're looking

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Speaker 2: at a range for two years around four percent maybe

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Speaker 2: four and accorded to three seventy five. Same with tenure

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Speaker 2: as well. It's been in a very very tight range.

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Speaker 2: So really what that tells me, broadly speaking, is that

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Speaker 2: there's really no strong conviction in the market on yields

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Speaker 2: going either you know, monotonically higher or lower, broadly speaking,

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Speaker 2: because of the fact that we're stuck between a rock

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Speaker 2: and a hard place. In some respects, the data that

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Speaker 2: we've gotten so far has been very very strong. The

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Speaker 2: consumer is resilient, the employment pictures is relatively strong, inflation

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Speaker 2: is sticky. That would all argue for much higher years

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Speaker 2: from your on, But then you have the dead seating overhand,

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Speaker 2: the regional banking crisis, as well as rates being policy

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Speaker 2: rates being high and sticky, that would argue for perhaps

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Speaker 2: lower years over the longer ud. So we're kind of

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Speaker 2: stuck in this range because of that.

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Speaker 1: When you are stuck, can you model out for higher

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Speaker 1: in the case of where we are in the range

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Speaker 1: right now, can you model out a bet for a

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Speaker 1: higher yield and lower price.

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Speaker 2: It's hard because ultimately what you're looking at, especially in

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Speaker 2: this environment is for the FED to pause. We're not

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Speaker 2: talking about perhaps a pause, a skip, and then another

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Speaker 2: height later on this year. Perhaps all that means is

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Speaker 2: that if policy is going to remain restrictive for the

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Speaker 2: remainder of the year, then that would mean ultimately that

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Speaker 2: you're going to see a slow down in the economy.

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Speaker 2: That's kind of what the FED wants to achieve in

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Speaker 2: order to bring down inflation, and that will ultimately mean

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Speaker 2: lower yels. So we have a recession considered at for

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Speaker 2: early twenty twenty four. The economy looks relatively robust a

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Speaker 2: part of that point on, but then once we do

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Speaker 2: go into a recession, the FED is going to have

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Speaker 2: to cut greids. So the ultimate destination is perhaps for

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Speaker 2: lower yels. The path between here and there is uncertain,

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Speaker 2: given the fact that you have a lot of dynamics

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Speaker 2: to get through over the short term as well as

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Speaker 2: the medium term.

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Speaker 3: So Badria mentioned the regional banking crisis is potentially helping

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Speaker 3: to drive down inflation or regional banking crisis, it seems

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Speaker 3: like it's stabilized. We sweem to swing between it not existing,

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Speaker 3: not having ever percolated, and suddenly still being a full

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Speaker 3: blown issue that's going to help the FED, which is it?

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Speaker 2: So the regional banking crisis, broadly speaking, the headlines have

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Speaker 2: definitely abated. You're seeing a little bit more stability in

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Speaker 2: the banking sector. But broadly the transmission mechanism from the

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Speaker 2: regional banking crisis is going to come from the credit

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Speaker 2: crunch or tighter credit conditions. It's going to come from

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Speaker 2: a greater regulation if you will, of both the smaller

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Speaker 2: mid six as well as the larger banks that would

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Speaker 2: broad speaking, would.

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Speaker 4: Tighten credit conditions.

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Speaker 2: As we progress through the year, you're seeing mortgage rate

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Speaker 2: start to rise. You're seeing real yields around one point

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Speaker 2: four percent, so that's also risen in the last few weeks.

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Speaker 2: So broadly speaking, I think higher yields as well as

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Speaker 2: tighter regulatory framework, it should lead to tighter credit conditions

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Speaker 2: over the remainder of the years. So yes, it might

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Speaker 2: not be a crisis in the regional banking sector as

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Speaker 2: of now, but tighter credit conditions conditions I hear to stay.

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Speaker 3: Do you believe that right now that's going to perhaps

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Speaker 3: constrain yields going forward? That that's really the key feature

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Speaker 3: the H eight reports that come out on Friday that

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Speaker 3: determine really what that band is the yields can trade within.

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Speaker 2: Yeah, I think over the near term yields are definitely constrained.

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Speaker 2: You're probably going to see an environment where the two

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Speaker 2: year is going to struggle to get past for and

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Speaker 2: a quarter percent, because that would imply the market pricing

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Speaker 2: out a lot of the cuts are priced in, perhaps

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Speaker 2: even starting to price in for hikes at upcoming meetings.

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Speaker 2: That doesn't seem to be in the cards. Powell seems

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Speaker 2: to be squarely in the in the in the camp

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Speaker 2: of pausing rates at least in the June meeting and

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Speaker 2: then taking a meeting by meeting thereafter. Uh So, in

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Speaker 2: that sort of context, I think two years are going

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Speaker 2: to struggle to rise meaningfully from here. And as far

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Speaker 2: as the long end it's concerned, it's much more pegged

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Speaker 2: to the outlook for growth not just in the US

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Speaker 2: but also globally. China has had a good year this

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Speaker 2: year for for growth GDP is going to be positive,

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Speaker 2: but again for upcoming years, you're looking at a meaningful

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Speaker 2: store round and not just US but also global growth

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Speaker 2: that should kind of heap the long and pegged and

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Speaker 2: then ultimately decline over the coming uh you know, months

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Speaker 2: as well as the next year.

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Speaker 5: Well fair speak through today. I can't white bulloud, bustic

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Speaker 5: daily speaking throughout this morning and the afternoons. Savatra, thank you, Sabato,

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Speaker 5: Yeah for that of SLK gen.

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Speaker 1: Christopher Marinac joins Director of Golf Jenny Montgomery Scott. He's

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Speaker 1: not here to talk bank stocks, he's here to talk.

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Speaker 1: We saw okill in the PGA this weekend, and you

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Speaker 1: like live next door to Augusta as well. Very cool.

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Speaker 1: I mean, give us a little vignette here after this

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Speaker 1: spectacular weekend of golf, including a hole in one by

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Speaker 1: the PGA pro from California. Give us a picture of

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Speaker 1: your Augusta. What's it look like.

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Speaker 6: It's the prettiest place on earth, but it's also a

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Speaker 6: golf course that actually gets totally taken apart in the summertime.

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Speaker 6: So when they close next week, they'll be closed for

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Speaker 6: three four months and they'll take the entire place apart

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Speaker 6: and redo the greens, redo a lot of things. Certainly

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Speaker 6: fix up a few trees that fell.

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Speaker 7: Back in April.

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Speaker 6: But it's an incredible piece of property.

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Speaker 1: It may be a place to relax when you're dealing

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Speaker 1: with the bank stocks as well. Are you at any

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Speaker 1: point a master's relaxation about the banking crisis or is

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Speaker 1: it still very vivid on a Monday morning.

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Speaker 7: Well, it's early innings. We have a lot of to go.

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Speaker 6: I mean, we still have a recession to find and

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Speaker 6: then real estate to work through. And the banks I

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Speaker 6: think will continue to make money throughout this whole journey,

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Speaker 6: but they certainly have issues to deal with the next

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Speaker 6: three years.

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Speaker 3: It seems like the move is toward greater capital requirements.

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Speaker 3: We're hearing that from Neil Kushkari today and we got

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Speaker 3: a little hint of that today from the JP Morgan

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Speaker 3: investor day. What did we hear from them?

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Speaker 6: Well, jpm morgan talks about their fortress balance sheet all

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Speaker 6: the time, so you know their slides are no different

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Speaker 6: this morning about that. I think their leadership position in

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Speaker 6: the banking industry is second to none, and so they're

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Speaker 6: going to continue to remind everybody the capital is king.

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Speaker 7: The stress tests come out.

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Speaker 6: In about a month and my sense is the Fed's

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Speaker 6: going to pass most, if not all, the banks, but

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Speaker 6: they're going to politely ask for more comfort capital and

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Speaker 6: require banks to raise additional equity, which banks I think

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Speaker 6: the banks and the stress test, and then that will

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Speaker 6: get pushed down to regional banks. So you know, pretty

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Speaker 6: much the rules work that anything that happens at the

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Speaker 6: top twenty banks will get pushed down to the next

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Speaker 6: twenty in the next twenty, so it kind of falls

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Speaker 6: from the top down.

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Speaker 3: We talk about the potential for just profitability constraints within

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Speaker 3: some of the regional banks. How much will the profitability

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Speaker 3: be further constrained and their lending mechanisms be curtailed if

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Speaker 3: there is greater carapital requirements foisted on them by the Fed.

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Speaker 6: Well, capital is going to naturally improve for the banks

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Speaker 6: because of retained earnings, and I think there's a slight

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Speaker 6: comeback on their equity securities just because you have natural

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Speaker 6: amortization and payoffs of their at HTM and available for

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Speaker 6: sale securities. The challenge is going to be that raising

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Speaker 6: additional capital to cover what could be a future credit

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Speaker 6: cycle in twenty four and twenty five. That's why the

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Speaker 6: capital I think goes up. We still have those unrealized

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Speaker 6: losses that are not going to go to zero, They're

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Speaker 6: just going to get incrementally better.

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Speaker 1: But should people buy individual stocks ETFs BKX. What's the

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Speaker 1: intelligent way to play this three years out.

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Speaker 6: Well, I think a basket of stocks across all market

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Speaker 6: caps makes sense. It's not just the large cap I

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Speaker 6: think looking at MidCap and small community banks makes a

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Speaker 6: bunch of sense. A lot of those are even cheaper

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Speaker 6: than the regional banks that have been hit. My sense

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Speaker 6: is that there is a real opportunity these companies, many

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Speaker 6: of which are trading below tangible book value and tanswill

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Speaker 6: book values growing.

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Speaker 5: Every now and again, TK and I take a stroll

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Speaker 5: at Park Avenue. Brahma doesn't like to be with us publicly,

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Speaker 5: and when T and I woke up, this is pretty popit,

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Speaker 5: Guys's true, just saying like on air, but not outside

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Speaker 5: of the building. We go at Park Avenue and we

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Speaker 5: go past the First Republic. On the next corner, the

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Speaker 5: next block is a Chase Private Client. Almost immediately true.

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Speaker 5: And on those screens in First Republic, they're playing Bloomberg.

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Speaker 5: And often't always think of them, because you know, right

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Speaker 5: now we're talking about them, and they're looking up at

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Speaker 5: those screens and they're watching us talk about them. Can

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Speaker 5: you tell me what's going to happen? With those branches,

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Speaker 5: does anyone know.

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Speaker 6: I think they'll stay the same for probably a year

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Speaker 6: or two and quietly change gears, maybe become a second

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Speaker 6: GP Morgan office. Maybe they'll become something else. Most likely,

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Speaker 6: it's going to be a slow play.

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Speaker 5: You don't think they're just going to immediately come out

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Speaker 5: with a knife and just cut all these branches and

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Speaker 5: close them.

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Speaker 7: I don't think so. They gave expense guidance this morning.

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Speaker 6: That's the same that they had before, excluding the FRC.

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Speaker 3: We heard from Jennet Yellen that there is going to

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Speaker 3: be market soolidation akin to that First Republic getting acquired

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Speaker 3: by JP Morgan. How much more it is JP Morgan

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Speaker 3: still in the business of acquiring or is it going

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Speaker 3: to be sort of the other Bank of America, the

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Speaker 3: other big banks.

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Speaker 6: I think it might be nothing. Actually, I think that

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Speaker 6: the consolidation may have already happened, because you have three

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Speaker 6: banks that failed in March and April, and that represents

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Speaker 6: about four percent of the assets for those big regional banks.

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Speaker 7: You know.

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Speaker 6: The interesting thing to me is if you look at

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Speaker 6: the top twenty five banks in the country, they represent

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Speaker 6: two thirds of the assets in the FDIC deposits, So

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Speaker 6: why do we need consolidation when you already have two

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Speaker 6: thirds held there? So I think the consolidation may be greater,

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Speaker 6: mid mid size and smaller.

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Speaker 3: So every analyst who comes on talks about the regional

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Speaker 3: banking crisis is something that's going to tighten credit conditions

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Speaker 3: and actually help the FED. Are you pushing back and

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Speaker 3: saying that's not really the case because it's over.

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Speaker 6: Well, I'm not sure the crisis really ever happened. I

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Speaker 6: think we had mishaps in the month of March with

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Speaker 6: these failed banks, but largely those were their own doing.

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Speaker 6: I think the rest of the contagion that's been limited

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Speaker 6: to pack West Western Alliance, both of which seem to

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Speaker 6: be stabilizing. Pack West has positive news out this morning

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Speaker 6: on asset sales. I think that the rest of the

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Speaker 6: industry is marching ahead. We have seen deposit outflows in

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Speaker 6: the industry, for sure, and those may continue just because

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Speaker 6: interest rates need to catch up for depositors. But most

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Speaker 6: of these banks are lending money, making a profit and

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Speaker 6: marching forward. So I think there is credit or tighter

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Speaker 6: credit anyways, but it's not as bad and as negative

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Speaker 6: as I think headlines have suggested.

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Speaker 1: The heritage of Jenny Montgomery Scott is Philadelphia, the mid

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Speaker 1: Atlantic States and all the roll up there that happened

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Speaker 1: thirty forty years ago. In banking, when do the regionals

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Speaker 1: finally act and consolidate? Waiting and waiting and waiting and waiting,

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Speaker 1: when do they finally say enough?

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Speaker 6: Well, you could see two or three mergers the next

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Speaker 6: couple of years, so those regional banks. But I'm not

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Speaker 6: sure it's going to be that often. I really think

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Speaker 6: it's going to be a lot less than we anticipate.

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Speaker 6: The FED has to really change gears at the examiner

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Speaker 6: level to push these mergers.

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Speaker 7: The last two years mergers.

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Speaker 6: Have taken forever close and a handful of them terminated.

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Speaker 1: Just ask there's a people thing the examiners.

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Speaker 5: Sure, interesting interesting Master's tickets. Have we knat that down?

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Speaker 7: Yeah?

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Speaker 1: We had Chris is our new friend.

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Speaker 5: Okay, good?

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Speaker 1: The odds according to Golf died. Just thank you Simon

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Speaker 1: for this to garner Master's tickets.

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Speaker 5: Isn't one and two hundred that's the one that's through

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Speaker 5: the lottery, the lottery whatever they Okay, yeah, I just

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Speaker 5: applied last year and we've got to know people. Do

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Speaker 5: you know people. Okay, you know Christopher Marrinac, But Chris

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Speaker 5: knows people.

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Speaker 1: He knows people that we know.

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Speaker 5: It's good tonight, It's nice, Chris. Thanks for bambudis Chris

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Speaker 5: March gentle Montgomery Scope.

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Speaker 1: Let's go to a guest here right now to give

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Speaker 1: us perspective here with all the different news flow we have,

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Speaker 1: Lisa Hornby's head of US multisector fixed income at Schroeders.

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Speaker 5: The yield move that.

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Speaker 1: We have lifted up, does it take us up to

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Speaker 1: a collar edge, yields up to resistance or is there

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Speaker 1: something going on here, Lisa that's original?

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Speaker 8: You know, I think the market is still flirting with

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Speaker 8: this idea of is there a path where things can

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Speaker 8: actually be okay? And certainly resolution on the debt ceiling,

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Speaker 8: which was last week's optimism or cause for optimism, is.

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Speaker 4: A step towards that path.

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Speaker 8: Of course, I think we'll be We'll have some fits

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Speaker 8: and starts between now and then, and I don't think

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Speaker 8: we'll see the highest end of the ten year range

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Speaker 8: where the peaks that we got to last year. But

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Speaker 8: I think, you know, I think there could be some

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Speaker 8: tactical trading opportunity here for sure.

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Speaker 1: What are you doing on duration? We hardly taught touched

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Speaker 1: down it this morning, not so much the price move

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Speaker 1: or yield move, but the bet you place in maturity.

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Speaker 4: Yeah, you know, I think duration.

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Speaker 8: I think look, the outlook for bonds in our view

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Speaker 8: this year has been compelling. I think we're ten years.

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Speaker 8: We're probably looking at a range of three twenty five

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Speaker 8: to three seventy five, So we're getting towards that up

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Speaker 8: or band. We like tactically trading but airing towards being

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Speaker 8: long because our view is for economic deterioration. It's kind

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Speaker 8: of a slow burn, but I think that that's where

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Speaker 8: we're headed, and so we want to be We want

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Speaker 8: to come out the other side of this long but

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Speaker 8: understanding this is going to be a volatile market, as

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Speaker 8: it really has been for the last four or five months.

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Speaker 5: ALESA, where are you seeing that signs of economic deterioration

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Speaker 5: at the moment.

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Speaker 8: So certainly a slow grind, but we are starting to

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Speaker 8: see it. On the consumer side. It's it's obviously very gradual,

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Speaker 8: but we have seen credit card balances take up. We

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Speaker 8: have seen on the auto loan side, now really across

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Speaker 8: the figo spectrum a bit of deterioration. Obviously, jobs still

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Speaker 8: remain very very resilient.

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Speaker 2: You know.

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Speaker 8: One of the things we're watching though closely is small businesses.

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Speaker 8: You know, small business surveys have really deteriorated over the

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Speaker 8: last I want to say, more than a year, and

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Speaker 8: that deterioration, in our view, is probably set to increase

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Speaker 8: as credit condition and tightened for these guys, particularly in

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Speaker 8: light of what's going on on the regional banking side.

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Speaker 4: So that's where we're focused.

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Speaker 8: I mean, we have to remember small businesses in the

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Speaker 8: US employ on a very large percentage of the population.

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Speaker 8: You know, we spend a lot of time talking about

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Speaker 8: the gees of the world, but probably ninety percent of

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Speaker 8: the businesses in the US are small, small to mid size,

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Speaker 8: So their outlook is pretty important and it's not particularly

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Speaker 8: compelling when you look at the data.

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Speaker 3: We just had Chris Marrinack on over from Jenny Montgomery Scott,

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Speaker 3: and he was talking about the regional banking crisis that

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Speaker 3: wasn't and so I wanted to get your sense of

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Speaker 3: what is happening in terms of the credit tightening. He

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Speaker 3: said that regional banks are a much better position than

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Speaker 3: people assume. They're not constraining their lending mechanisms all that much.

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Speaker 3: Do you see something different or do you think it

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Speaker 3: just hasn't happened yet, but just wait and it will.

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Speaker 4: I think it's again.

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Speaker 8: I think it's a bit of a slow burn, right

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Speaker 8: we you know, the cost of capital has gone up,

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Speaker 8: These regional banks are under increased scrutiny. I think there

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Speaker 8: will be more focus on balance sheet preservation and the

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Speaker 8: type of loan making that they're doing, and I think

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Speaker 8: certain pockets of the economy will see a little bit

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Speaker 8: more stress as a result of that and make it

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Speaker 8: a bit harder to access capital. I mean, Tom said

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Speaker 8: it before while I was listening in earlier. The cost

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Speaker 8: of capital has risen, and that poses an issue, and

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Speaker 8: it's supposed to pose an issue, right The FED is

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Speaker 8: doing this intentionally to try and slow economic growth, and

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Speaker 8: they're doing it, but it takes some time.

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Speaker 3: Given how resilient the economy has been has been, and

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Speaker 3: given that we haven't really seen the credit stress materialize

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Speaker 3: in a way as significant as many people had expected

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Speaker 3: at this point. What is the risk that the Fed's

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Speaker 3: going to have to tighten further, It's going to have

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Speaker 3: to hike again, perhaps even in June, because maybe the

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Speaker 3: constraint isn't that great from the regional banks just yet,

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Speaker 3: and then it will have to be the slow burn

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Speaker 3: that goes on for a while.

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Speaker 8: Yeah, I mean the market is certainly flirting right that. Right,

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Speaker 8: we've seen the probability of a FED hike at the

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Speaker 8: next meeting move very between twenty five and forty percent.

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Speaker 8: You know, if we get a debt ceiling resolution in

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Speaker 8: the near term, I wouldn't be surprised to see that

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Speaker 8: move higher. I think the Fed wants to be cautious.

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Speaker 8: I mean, if you listen to Powell's comments last week,

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Speaker 8: he didn't explicitly suggest a pause here, but he did

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Speaker 8: allude to the fact that, hey, we've done a lot,

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Speaker 8: we can potentially be patient and see what the impact is.

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Speaker 8: I mean, they are breaking things right, There are more

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Speaker 8: you know, look at the move index and where it's

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Speaker 8: been over the last year versus the previous several years.

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Speaker 8: Things are starting to percolate in the background, and we

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Speaker 8: have had if several banks now fell, I don't know

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Speaker 8: that that story is completely played out. I think that

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Speaker 8: they realize that, you know, there are now some risks

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Speaker 8: out there that are becoming a bit more serious and

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Speaker 8: so all l Sql. I'm sure they would prefer to pause,

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Speaker 8: but we have a lot of data between now and

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Speaker 8: the middle of June, their next meeting, so we'll have

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Speaker 8: to wait and see.

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Speaker 5: Well, let's just finish the Lisa, clearly, you're not going

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Speaker 5: to keep on hiking until you see too. Do you

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Speaker 5: think we've seen sufficient evidence right now that they are

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Speaker 5: sufficiently restrictive or is this a guess based on the

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Speaker 5: cunitive tightening that they've already delivered.

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Speaker 8: I think it's a great question. My sense is they've

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Speaker 8: probably done enough. They might go a little bit further

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Speaker 8: because they're looking at data on a leg. If we

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Speaker 8: could fast forward six months from now, I said, I

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Speaker 8: suspect that inflation will continue to slow and that they

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Speaker 8: will get, you know, be closer to their targets and

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Speaker 8: growth will be starting to roll over in a more

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Speaker 8: serious way. But you know, if we get another five

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Speaker 8: and a half percent inflation print, that all bets are off.

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Speaker 8: So I think, you know, we Unfortunately, the way monetary

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Speaker 8: policy works is with a lag, and so they'll react

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Speaker 8: to the data and as it comes in rather than

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Speaker 8: you know, six months or twelve months from now, trying

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Speaker 8: to see the bigger picture.

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Speaker 5: Hey, Lisa, this was great, Lisa Holbe. The Strouders appreciate

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Speaker 5: it as always. Michael O. Larry see I've ran et

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Speaker 5: on just right now. Michael grit to see in New

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Speaker 5: York going to see my sois dollars? It's not, is it?

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Speaker 5: So Michael tell me this is that a future still

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Speaker 5: or things changed?

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Speaker 9: It is the future and things our margin are changing.

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Speaker 9: I mean, I think you know we've ordered another three

399
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Speaker 9: hundred aircraft from Boeing two weeks ago, so you know

400
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Speaker 9: we're going to grow from one hundred and forty nine

401
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Speaker 9: million passengers pre COVID to three hundred million passengers by

402
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Speaker 9: the early twenty thirties. So there's still lots of growth

403
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Speaker 9: for Ryanair, but growth is getting easier in Europe. The

404
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Speaker 9: market has consolidated post COVID. Capacity has come out. I mean,

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Speaker 9: we're looking across Europe this summer where we're operating twenty

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Speaker 9: five percent more seat capacity than we had pre COVID,

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Speaker 9: but the rest of the market's only opening about ninety percent,

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Speaker 9: so we're taking huge amounts of market share from everybody else.

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Speaker 9: We're still we're well hedged on fuel we're offering really

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Speaker 9: low airfares, but those low airfares are of a bit

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Speaker 9: like we expect our lowest airfare to rise probably five

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Speaker 9: ten percent a year for the next couple of years.

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Speaker 9: Because of this capacity constraint and with the manufacturer's challenge

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Speaker 9: Boeing and Airbus huge backlock on orders can't increase monthly

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Speaker 9: production because supply chain difficulties for the next four or

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Speaker 9: five years. I think you're looking at a European marketplace

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Speaker 9: that will now copy some of America in the last decade.

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Speaker 9: Stable capacity and more reasonable pricing going forward.

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Speaker 5: Is that good for you and bad for the paper traveling?

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Speaker 4: I think it's good for us.

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Speaker 5: It's also good for the people traveling.

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Speaker 9: But the challenge is if you look at the German

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Speaker 9: market this year, for example, Lufthansa, which was bailed out

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Speaker 9: by the German government to the June of thirteen billion

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Speaker 9: during COVID, they've only restored eighty percent of their pre

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Speaker 9: COVID capacity. Airfas in Germany have doubled this year over

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Speaker 9: last year. So you know, German consumers are being stiffed

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Speaker 9: by their national champion, and they're increasingly turning to us

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Speaker 9: because we have capacity growth. I'm taking fifty year craft

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Speaker 9: a year from Boeing because we have capacity growth, we

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Speaker 9: can keep fares down. But I have no doubt in

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Speaker 9: my mind that one of the big drivers of Ryanair's

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Speaker 9: growth the next couple of years is going to be

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Speaker 9: the incumbent legacy carriers really driving airfares much higher in

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Speaker 9: Europe than they are in US.

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Speaker 3: Are you willing to then just have a commensurate increase

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Speaker 3: in your price.

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Speaker 9: Just perhaps less Absolutely not. Li So we're going to

439
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Speaker 9: keep growing capacity. We're we will remain load factor active,

440
00:21:16,240 --> 00:21:18,960
Speaker 9: vial passive. We intend to take huge amounts of market

441
00:21:19,000 --> 00:21:23,200
Speaker 9: share from every incumbent in Europe as we grow our

442
00:21:23,240 --> 00:21:25,200
Speaker 9: share in Europe from about twenty percent now to about

443
00:21:25,200 --> 00:21:27,080
Speaker 9: thirty three percent in the early twenty thirties.

444
00:21:27,160 --> 00:21:29,560
Speaker 3: People talk about the travel boom that is really supported

445
00:21:29,560 --> 00:21:32,000
Speaker 3: services globally as being a bit of yellow You only

446
00:21:32,080 --> 00:21:34,960
Speaker 3: live once after the pandemic, get out there and travel,

447
00:21:35,400 --> 00:21:38,199
Speaker 3: and if you're not dealing necessarily with the business segment

448
00:21:38,240 --> 00:21:40,679
Speaker 3: as much, how confident are you that that's going to

449
00:21:40,680 --> 00:21:42,040
Speaker 3: continue in perpetuity.

450
00:21:42,760 --> 00:21:45,000
Speaker 9: Perpetuity is a long time. I mean, it's too long

451
00:21:45,040 --> 00:21:47,479
Speaker 9: for my horizon. Next five years is going to continue.

452
00:21:47,480 --> 00:21:50,000
Speaker 9: There's a couple of fundamentals in Europe. One, we're seeing

453
00:21:50,119 --> 00:21:53,400
Speaker 9: very strong business growth. I mean, businesses are flying around Europe,

454
00:21:53,400 --> 00:21:57,960
Speaker 9: particularly two kind of Eastern Europe Morocco Portugal, fix repairing

455
00:21:58,000 --> 00:21:59,919
Speaker 9: supply chains that they can no longer depend on a

456
00:22:00,560 --> 00:22:03,920
Speaker 9: and they're looking to cheap find cheap manufacturing in Morocco, Portugal,

457
00:22:04,040 --> 00:22:06,800
Speaker 9: poland Romania. We're the biggest airlines in those markets. So

458
00:22:06,800 --> 00:22:09,040
Speaker 9: we're seeing a very strong recovery in our business.

459
00:22:09,040 --> 00:22:09,359
Speaker 2: Travel.

460
00:22:09,920 --> 00:22:11,240
Speaker 9: I think people who are locked up for two and

461
00:22:11,280 --> 00:22:14,479
Speaker 9: a half years are going back traveling, and that's not

462
00:22:14,520 --> 00:22:18,200
Speaker 9: a short term phenomenon travel increasingly. I think what really

463
00:22:18,240 --> 00:22:20,879
Speaker 9: surprises me about the moment, for all the negative coverage

464
00:22:20,880 --> 00:22:24,360
Speaker 9: of higher energy prices, price inflation, they're still fundamentally full

465
00:22:24,359 --> 00:22:26,919
Speaker 9: employment in Europe. People are getting paychecks at the end

466
00:22:26,960 --> 00:22:29,240
Speaker 9: of every month, and what they do is they go traveling.

467
00:22:29,520 --> 00:22:32,320
Speaker 9: Leisure time is rising. You have kids who are all

468
00:22:32,359 --> 00:22:34,400
Speaker 9: over Europe. I mean when I grew up in the

469
00:22:34,440 --> 00:22:36,960
Speaker 9: seventies and eighties, as my children remember, keep reminding me

470
00:22:37,040 --> 00:22:39,320
Speaker 9: that was the last century we went around Europe by training.

471
00:22:39,680 --> 00:22:42,200
Speaker 9: You know, you're interrailing. Now they go around Europe on

472
00:22:42,280 --> 00:22:47,399
Speaker 9: Ryan Air this summer, huge US flows into Europe. The

473
00:22:47,440 --> 00:22:50,600
Speaker 9: Asian market is recovering, but because only ninety percent of

474
00:22:50,640 --> 00:22:53,280
Speaker 9: the pre COVID capacity has been restored, demand is strong

475
00:22:53,320 --> 00:22:56,000
Speaker 9: and pricing is strong, and I see no reason why

476
00:22:56,359 --> 00:22:58,440
Speaker 9: that won't continue for a four or five year period.

477
00:22:58,480 --> 00:23:02,080
Speaker 9: Now there'll be curvebulls, COVID Ukraine invasions, things like that

478
00:23:02,119 --> 00:23:05,159
Speaker 9: would throw us off course, but the underlying fundamentals are

479
00:23:05,280 --> 00:23:08,399
Speaker 9: very strong. Demand for traveler is strong, and supply is

480
00:23:08,440 --> 00:23:12,919
Speaker 9: constrained by aircraft manufacturers. There's a cap on what they

481
00:23:12,920 --> 00:23:15,280
Speaker 9: can build and how fast they can increase production.

482
00:23:15,359 --> 00:23:17,280
Speaker 1: I've got an aerospace team with a lot of really

483
00:23:17,320 --> 00:23:20,439
Speaker 1: smart questions. Here's the only question our listeners and viewers

484
00:23:20,560 --> 00:23:23,399
Speaker 1: care about. It looks like the US airfares are a

485
00:23:23,440 --> 00:23:27,880
Speaker 1: complete scam. I looked at a geog quick eyeball sixty

486
00:23:27,960 --> 00:23:31,919
Speaker 1: seventy dollars round trip on Ryanair versus three hundred dollars

487
00:23:31,920 --> 00:23:35,320
Speaker 1: in the same flight in America roughly, and I look

488
00:23:35,359 --> 00:23:38,000
Speaker 1: at the margin. You're making twelve cents modeled on the

489
00:23:38,080 --> 00:23:42,680
Speaker 1: dollar versus six seven cents. It's say Kirby's wonderful United airlines.

490
00:23:43,000 --> 00:23:47,760
Speaker 1: Why can't America get this right? Why aren't you in America?

491
00:23:48,640 --> 00:23:50,760
Speaker 9: One? Because there's so much growth for us in Europe.

492
00:23:51,560 --> 00:23:54,119
Speaker 9: Why would I want to go to America when we

493
00:23:54,200 --> 00:23:56,840
Speaker 9: can deploy all of this growth in Europe and Europe

494
00:23:56,920 --> 00:24:00,960
Speaker 9: is still fundamentally under exploited. Europe is moving towards consolidation.

495
00:24:01,320 --> 00:24:03,879
Speaker 9: I think the American airs have slightly overplayed it. You know,

496
00:24:03,920 --> 00:24:06,119
Speaker 9: we look at Southwest and you know, Southwest was a

497
00:24:06,200 --> 00:24:08,919
Speaker 9: kind of heroic model for us when we first started

498
00:24:08,920 --> 00:24:11,440
Speaker 9: this thirty years ago. But Southwest is no longer fundamentally

499
00:24:11,440 --> 00:24:13,840
Speaker 9: a low cost airline. You know, it's average ticket price

500
00:24:13,840 --> 00:24:16,040
Speaker 9: one hundred and ten hundred and twenty dollars a seat.

501
00:24:16,440 --> 00:24:19,520
Speaker 9: My average ticket price last year was forty euros a seat.

502
00:24:20,040 --> 00:24:21,960
Speaker 9: So I think, you know, the more needs to be

503
00:24:22,000 --> 00:24:25,080
Speaker 9: done there. You know, more capacity needs to be found

504
00:24:25,080 --> 00:24:27,560
Speaker 9: in the American industry. But the challenge is going to

505
00:24:27,560 --> 00:24:29,800
Speaker 9: be for all of us. Because Boeing and Airbus can't

506
00:24:29,840 --> 00:24:33,439
Speaker 9: fundamentally increase their production rates, We're going to be This

507
00:24:33,480 --> 00:24:34,960
Speaker 9: industry is going to be challenged for the next four

508
00:24:35,040 --> 00:24:36,720
Speaker 9: or five years, and I think we have to be

509
00:24:36,800 --> 00:24:39,320
Speaker 9: careful not to repeat what's happening in the States. We

510
00:24:39,320 --> 00:24:41,720
Speaker 9: don't want to push pricing too high. And that's I

511
00:24:41,720 --> 00:24:44,199
Speaker 9: think why our three hundred aircraft order with Boeing is

512
00:24:44,240 --> 00:24:47,720
Speaker 9: so key to keeping prices low and people traveling across

513
00:24:47,760 --> 00:24:48,960
Speaker 9: Europe for the next decade.

514
00:24:49,040 --> 00:24:52,520
Speaker 5: You could buy some capacity you mentioned consolidation, You interested

515
00:24:52,560 --> 00:24:52,840
Speaker 5: in that?

516
00:24:53,000 --> 00:24:55,280
Speaker 9: No, I mean, you know, it's just I'm buying somebody

517
00:24:55,320 --> 00:24:57,320
Speaker 9: else's problem, right, But I'm very happy in Europe to

518
00:24:57,320 --> 00:24:59,639
Speaker 9: see loft hands and by al Ittalia. Let's see iag

519
00:24:59,760 --> 00:25:03,639
Speaker 9: by tap you know, consolidate away. And you'll need to

520
00:25:03,680 --> 00:25:05,720
Speaker 9: consolidate because none of you are going to be are

521
00:25:05,720 --> 00:25:07,520
Speaker 9: able to compete with Ryan Air because we have much

522
00:25:07,560 --> 00:25:09,840
Speaker 9: lower costs than you, have much lower fairs than you.

523
00:25:09,880 --> 00:25:11,520
Speaker 9: So you better well may as.

524
00:25:11,400 --> 00:25:12,960
Speaker 5: Well class Shay too. So if you don't want to

525
00:25:12,960 --> 00:25:15,040
Speaker 5: play the consolidation game, you're sitting there with a great

526
00:25:15,040 --> 00:25:15,800
Speaker 5: bandage shape.

527
00:25:16,040 --> 00:25:19,040
Speaker 9: No debt right now, right, No, when we're paying debt down,

528
00:25:19,040 --> 00:25:19,920
Speaker 9: aggress to get down.

529
00:25:19,920 --> 00:25:22,000
Speaker 5: We have no net debt where we with dearnet cash

530
00:25:22,200 --> 00:25:24,760
Speaker 5: net fantastic, okay, capital it sense.

531
00:25:25,280 --> 00:25:27,640
Speaker 9: I think it's coming, just not yet. I mean, we're

532
00:25:27,640 --> 00:25:29,840
Speaker 9: paying down debt at the moment I've paid two bonds

533
00:25:29,840 --> 00:25:31,600
Speaker 9: this year, one point five billion of debt. I've only

534
00:25:31,640 --> 00:25:33,639
Speaker 9: got about two billion of debt left. I paid that

535
00:25:33,720 --> 00:25:36,520
Speaker 9: all down in twenty twenty five and twenty six. I'm

536
00:25:36,560 --> 00:25:38,600
Speaker 9: spending about two just over two two and a half

537
00:25:38,600 --> 00:25:40,960
Speaker 9: billion a year in capex, which I'm funding out of

538
00:25:40,960 --> 00:25:43,840
Speaker 9: internally generated cash flow. And once we get through that,

539
00:25:44,240 --> 00:25:46,680
Speaker 9: I think maybe next year, if we have another strong

540
00:25:46,760 --> 00:25:49,960
Speaker 9: year and we have significant net cash balances, then we'll

541
00:25:49,960 --> 00:25:51,040
Speaker 9: return those to shareholders.

542
00:25:51,160 --> 00:25:54,879
Speaker 1: Ryan Air twenty six percent debt U al seventy debt A.

543
00:25:54,840 --> 00:25:57,840
Speaker 5: Big difference, isn't It's just a massive difference. This was fun.

544
00:25:57,880 --> 00:26:00,560
Speaker 5: Michael got into this. More often we do. I got

545
00:26:00,600 --> 00:26:01,800
Speaker 5: to come back to the States more often.

546
00:26:01,800 --> 00:26:02,440
Speaker 7: You see, can you.

547
00:26:02,480 --> 00:26:05,399
Speaker 1: Bring your damn airline to the States? Lisa having an

548
00:26:05,520 --> 00:26:08,159
Speaker 1: absolutely crush your secret is?

549
00:26:08,280 --> 00:26:10,840
Speaker 3: I mean why some people can offer forty dollars or

550
00:26:10,920 --> 00:26:12,080
Speaker 3: forty years.

551
00:26:11,880 --> 00:26:18,280
Speaker 1: Double eighty ninety, I mean double eight hundred is a ridiculous.

552
00:26:17,800 --> 00:26:19,800
Speaker 9: You know, through history, the Irish have always been you know,

553
00:26:19,840 --> 00:26:22,520
Speaker 9: we've been transport pioneers. We've built the roads, we built

554
00:26:22,520 --> 00:26:24,679
Speaker 9: the railways, and now we're building the area. We're going

555
00:26:24,720 --> 00:26:27,560
Speaker 9: to dominate the skies across Europe. Come to Europe for

556
00:26:27,600 --> 00:26:29,560
Speaker 9: low fairs, don't bother holiday in the States.

557
00:26:29,640 --> 00:26:31,840
Speaker 5: When you're back, we need to talk about a business traveler.

558
00:26:31,880 --> 00:26:33,480
Speaker 5: I do wonder what's going to happen here. I remember

559
00:26:33,520 --> 00:26:35,679
Speaker 5: easy Jet might a big transition years ago to get

560
00:26:35,720 --> 00:26:38,000
Speaker 5: the business traveler. And I wonder if your Captain's going

561
00:26:38,000 --> 00:26:40,199
Speaker 5: to change its toll in years to come. Absolutely not

562
00:26:40,240 --> 00:26:42,240
Speaker 5: over remind the sign you're going to keep the same

563
00:26:42,320 --> 00:26:43,280
Speaker 5: thing business.

564
00:26:42,920 --> 00:26:46,080
Speaker 9: Travel with what's different about it? People keep confusing short

565
00:26:46,119 --> 00:26:48,280
Speaker 9: hole on long hauld. What's different in shorthold is nobody

566
00:26:48,320 --> 00:26:50,520
Speaker 9: will pay a premium for business travel. Business just wan

567
00:26:50,640 --> 00:26:54,280
Speaker 9: on time, affordable, safe transport they want to get there longhould.

568
00:26:54,320 --> 00:26:56,879
Speaker 9: Twenty percent of the market will still pay a ludicrous

569
00:26:56,920 --> 00:26:59,520
Speaker 9: premium on long haul, which is why long haul and

570
00:26:59,560 --> 00:27:02,920
Speaker 9: shorthold is different. And we intend to continue to grow

571
00:27:03,000 --> 00:27:05,280
Speaker 9: very strongly in Europe car with a huge growth in

572
00:27:05,320 --> 00:27:07,720
Speaker 9: business travel as well as leisure travel out over the

573
00:27:07,800 --> 00:27:09,600
Speaker 9: next decade. And I can only do that with my

574
00:27:09,920 --> 00:27:12,280
Speaker 9: beloved airport aircraft partners palling.

575
00:27:13,640 --> 00:27:19,440
Speaker 5: The aircraft this week sales. I don't think they fight

576
00:27:19,480 --> 00:27:23,440
Speaker 5: to Monte Carlo and Marcia. There we drive across way

577
00:27:23,920 --> 00:27:35,480
Speaker 5: from New York City. Michael was great, Thank you, buddy.

578
00:27:37,600 --> 00:27:41,040
Speaker 5: We wake up again to another morning, anticipating looking ahead

579
00:27:41,320 --> 00:27:44,040
Speaker 5: to more talks on Capitol Hill. There are a range

580
00:27:44,080 --> 00:27:47,080
Speaker 5: of estimates out there. Here's one from Goldman and the

581
00:27:47,119 --> 00:27:51,399
Speaker 5: team estimating that Treasury will drop below thirty billion dollars

582
00:27:51,440 --> 00:27:54,439
Speaker 5: in cash as soon as June eighth, but one in

583
00:27:54,480 --> 00:27:58,359
Speaker 5: the following The estimate is subject to substantial uncertainty, so

584
00:27:58,400 --> 00:28:00,800
Speaker 5: there is certainly a chance that received could slow more

585
00:28:00,840 --> 00:28:03,560
Speaker 5: than expected and leave the Treasury short of cash by

586
00:28:03,640 --> 00:28:06,760
Speaker 5: June first or June second. T K we're taking this

587
00:28:06,840 --> 00:28:09,200
Speaker 5: early June day, I think increasingly, seriously.

588
00:28:09,960 --> 00:28:12,439
Speaker 1: Absolutely to me, that was the frontline this weekend, and

589
00:28:12,480 --> 00:28:14,879
Speaker 1: this is yelling out front, and maybe it is the

590
00:28:14,920 --> 00:28:17,640
Speaker 1: acuity of being an economist, or she put a bow

591
00:28:17,720 --> 00:28:20,000
Speaker 1: on it earlier, and the bow's moving, and it's moving

592
00:28:20,080 --> 00:28:22,879
Speaker 1: quickly towards June. The other thing that's moving, I would point,

593
00:28:22,960 --> 00:28:25,280
Speaker 1: is a calendar. We were talking about this on May tenth.

594
00:28:25,600 --> 00:28:27,600
Speaker 1: It's not May tenth, it's May twenty second.

595
00:28:27,600 --> 00:28:29,400
Speaker 5: No, we're running out of time, We're runn out of time.

596
00:28:29,440 --> 00:28:32,119
Speaker 5: I think it's less about the mood of the moment,

597
00:28:32,600 --> 00:28:35,399
Speaker 5: the mood music, so to speak, and much more about substance. Now,

598
00:28:35,440 --> 00:28:37,439
Speaker 5: let's get into the substance of it. What's the hang guy, I.

599
00:28:37,440 --> 00:28:40,040
Speaker 1: Would say, yeah, I would go with that, and the substance,

600
00:28:40,080 --> 00:28:42,400
Speaker 1: of course, as the return of the president to Washington

601
00:28:42,440 --> 00:28:46,959
Speaker 1: and Tokyo as our Amory Horden our Bloomberg Washington corresponded, Emory,

602
00:28:46,960 --> 00:28:49,920
Speaker 1: there's points in a campaign where there's hallmarks along the way,

603
00:28:50,000 --> 00:28:53,120
Speaker 1: not in the news flow, but maybe a research piece

604
00:28:53,120 --> 00:28:56,680
Speaker 1: that's out there or in an op ed piece. This morning,

605
00:28:56,720 --> 00:29:00,680
Speaker 1: the Washington Post drops a bombshell of an op peace

606
00:29:01,240 --> 00:29:06,120
Speaker 1: directly addressing the president's age. He returns to Washington for

607
00:29:06,200 --> 00:29:10,800
Speaker 1: a debt debate, but he also returns to Washington looking

608
00:29:10,920 --> 00:29:14,800
Speaker 1: at an eighty second birthday, et cetera on election day.

609
00:29:15,120 --> 00:29:16,880
Speaker 1: How's he going to deal with that when you get

610
00:29:16,920 --> 00:29:19,040
Speaker 1: back there and keep asking him tough questions.

611
00:29:19,760 --> 00:29:21,680
Speaker 10: Well, I think that's exactly what the president needs to

612
00:29:21,680 --> 00:29:26,200
Speaker 10: be doing for the public to put rest aside these concerns.

613
00:29:26,400 --> 00:29:28,280
Speaker 10: He's going to have to get in front of the

614
00:29:28,280 --> 00:29:31,280
Speaker 10: public take questions from the press like he did yesterday

615
00:29:32,080 --> 00:29:34,600
Speaker 10: at the end of the G seven summit, and that

616
00:29:34,720 --> 00:29:39,600
Speaker 10: potentially could assuage voters concerns about his age. But Tom,

617
00:29:39,440 --> 00:29:41,600
Speaker 10: I don't really think this is a bombshell. I think

618
00:29:41,720 --> 00:29:44,320
Speaker 10: everyone has been talking about this. Yes, whether or not

619
00:29:44,360 --> 00:29:48,959
Speaker 10: the whispers are getting now louder echoes, but everyone has

620
00:29:48,960 --> 00:29:51,160
Speaker 10: been talking about this because it shows up in polls.

621
00:29:51,240 --> 00:29:54,520
Speaker 10: Americans are concerned about his age, but also in the

622
00:29:54,560 --> 00:29:55,959
Speaker 10: same age bracket.

623
00:29:56,200 --> 00:29:57,720
Speaker 2: I would say, is.

624
00:29:57,920 --> 00:30:03,280
Speaker 10: The nominee right now that that's leading the Republican candidate

625
00:30:03,280 --> 00:30:05,600
Speaker 10: for president, and that's the former president Donald Trump. He's

626
00:30:05,640 --> 00:30:09,280
Speaker 10: just four years behind Biden. So regardless, we're going to

627
00:30:09,320 --> 00:30:11,320
Speaker 10: have a president if it was to be a rematch

628
00:30:11,320 --> 00:30:15,120
Speaker 10: of these two individuals, a president ending that next term

629
00:30:15,200 --> 00:30:16,200
Speaker 10: in their eighties, and.

630
00:30:16,120 --> 00:30:18,480
Speaker 1: John ed was clearly addressed by the Washington Post and

631
00:30:18,520 --> 00:30:21,000
Speaker 1: the op ed piece. It was not just about President Biden.

632
00:30:21,160 --> 00:30:22,840
Speaker 5: You wake up this morning, you just get the failing

633
00:30:22,880 --> 00:30:26,360
Speaker 5: G seven wat G seven and Marie. What did they

634
00:30:26,400 --> 00:30:28,840
Speaker 5: talk about? Because the President had to leave at dinner early,

635
00:30:29,160 --> 00:30:31,280
Speaker 5: even on the way back reporting me on Air Force one,

636
00:30:31,320 --> 00:30:33,320
Speaker 5: had to take a call with speaking McCarthy. He's going

637
00:30:33,360 --> 00:30:36,800
Speaker 5: to Land engage in talks almost immediately. Did he ever

638
00:30:36,880 --> 00:30:39,320
Speaker 5: really leave behind the domestic issues.

639
00:30:39,760 --> 00:30:41,680
Speaker 10: I think it's fair to say he had one foot

640
00:30:41,720 --> 00:30:44,120
Speaker 10: here in Japan and one foot back home in Washington.

641
00:30:44,160 --> 00:30:46,840
Speaker 10: He even brought Bruce Reid with him to make sure

642
00:30:46,880 --> 00:30:49,400
Speaker 10: that there was an individual on the team keeping in

643
00:30:49,440 --> 00:30:52,600
Speaker 10: touch with his key negotiating team in Washington. As you said,

644
00:30:52,600 --> 00:30:54,760
Speaker 10: he left a dinner early to have a call phone

645
00:30:54,800 --> 00:30:57,080
Speaker 10: called his team. He was constantly kept up to date

646
00:30:57,120 --> 00:30:59,520
Speaker 10: on where the negotiations were. But the negotiations over the

647
00:30:59,560 --> 00:31:02,800
Speaker 10: weekend we're very much so on and off. Breaking that

648
00:31:02,840 --> 00:31:05,880
Speaker 10: impass last night was this phone call the President had

649
00:31:06,200 --> 00:31:08,760
Speaker 10: while he was on Air Force one with Speaker McCarthy.

650
00:31:08,800 --> 00:31:12,440
Speaker 10: Speaker McCarthy then came out and said as productive. He also, really,

651
00:31:12,440 --> 00:31:14,640
Speaker 10: for one of the first times it's been since the

652
00:31:14,640 --> 00:31:18,000
Speaker 10: President's been abroad, did not criticize his trip abroad and

653
00:31:18,080 --> 00:31:20,959
Speaker 10: just said we're going to meet tomorrow. So that's today,

654
00:31:21,400 --> 00:31:25,040
Speaker 10: President Biden and Speaker McCarthy, these two men in a room,

655
00:31:25,080 --> 00:31:27,440
Speaker 10: and this is how a deal is going to be

656
00:31:27,480 --> 00:31:30,080
Speaker 10: able to get over the finish line, because it's really

657
00:31:30,120 --> 00:31:32,320
Speaker 10: just these two individuals being able to come to an agreement.

658
00:31:32,480 --> 00:31:35,360
Speaker 10: Biden alluded to that in the press conference, saying, I

659
00:31:35,400 --> 00:31:37,320
Speaker 10: guess he wants me to get home to be able

660
00:31:37,320 --> 00:31:41,480
Speaker 10: to hammer out this negotiation. So that's where all eyes are,

661
00:31:41,520 --> 00:31:44,120
Speaker 10: and I think, you know, there's other topics. Obviously at

662
00:31:44,120 --> 00:31:46,880
Speaker 10: the G seven China was a massive focus. President Zelenski

663
00:31:46,960 --> 00:31:49,920
Speaker 10: was here in person. Russia was a massive focus. But

664
00:31:50,360 --> 00:31:54,840
Speaker 10: for other world leaders and their concerns about future economic risks.

665
00:31:55,120 --> 00:31:56,800
Speaker 10: When the President of United States is in the room,

666
00:31:57,080 --> 00:31:59,400
Speaker 10: that the question would be going to him, sir, are

667
00:31:59,400 --> 00:32:02,000
Speaker 10: you going to have a fault on treasuries? Which is

668
00:32:02,040 --> 00:32:05,719
Speaker 10: the bedrock and it underpins our entire global financial system?

669
00:32:05,960 --> 00:32:07,920
Speaker 10: So it loomed large over him and Maria.

670
00:32:08,040 --> 00:32:09,680
Speaker 3: I guess there's another way to reframe this build and

671
00:32:09,680 --> 00:32:12,320
Speaker 3: what John's talking about, was this G seven a waste

672
00:32:12,320 --> 00:32:14,400
Speaker 3: of time with a focus entirely on whether the US

673
00:32:14,400 --> 00:32:16,880
Speaker 3: would get its ducks in a row back at home

674
00:32:17,280 --> 00:32:20,840
Speaker 3: or were there some really substantive to things that took place,

675
00:32:20,880 --> 00:32:23,600
Speaker 3: in particular having to do with China with a communicate

676
00:32:24,000 --> 00:32:27,240
Speaker 3: that the Financial Times described as the strongest condemnation of

677
00:32:27,360 --> 00:32:30,400
Speaker 3: China yet and really a tit for tat with China

678
00:32:30,440 --> 00:32:33,040
Speaker 3: and Micron over the weekend that really left me highly

679
00:32:33,080 --> 00:32:36,520
Speaker 3: confused about whether we're thawing or exacerbating the tensions.

680
00:32:37,000 --> 00:32:40,320
Speaker 10: I think this week was a key week when we

681
00:32:40,360 --> 00:32:42,720
Speaker 10: will look back in history in terms of a more

682
00:32:42,840 --> 00:32:46,080
Speaker 10: multi polar world. Not only do you have Zelenski here

683
00:32:46,120 --> 00:32:48,800
Speaker 10: at the G seven. Formerly this was a G eight

684
00:32:49,200 --> 00:32:52,800
Speaker 10: where President Putin used to think of this club he

685
00:32:52,840 --> 00:32:55,720
Speaker 10: was part of in a very prestigious way. Zlenski was

686
00:32:55,720 --> 00:32:59,320
Speaker 10: here some six hundred miles away from Russia's Far East.

687
00:32:59,600 --> 00:33:02,120
Speaker 10: At the same time, you had Zelenski in the Middle East,

688
00:33:02,560 --> 00:33:05,320
Speaker 10: clearly for Putin, he's seeing that the Middle East is

689
00:33:05,400 --> 00:33:08,080
Speaker 10: no longer in his bag. And then you also had

690
00:33:08,160 --> 00:33:12,000
Speaker 10: China xijingping last week sitting down in five ex Soviet states.

691
00:33:12,280 --> 00:33:15,640
Speaker 10: So you can see there are changing movements in the

692
00:33:15,640 --> 00:33:19,480
Speaker 10: geopolitical world. And when it comes to some substance that

693
00:33:19,600 --> 00:33:22,440
Speaker 10: happened here on the foreign policy front, it was all

694
00:33:22,480 --> 00:33:25,520
Speaker 10: about China, and the President reiterated that yesterday in his

695
00:33:25,600 --> 00:33:29,040
Speaker 10: press conference. With this administration and the Europeans have really

696
00:33:29,040 --> 00:33:32,400
Speaker 10: been able to coalesce around is language about not decoupling

697
00:33:32,720 --> 00:33:36,040
Speaker 10: but de risking. And I asked the President's Deputy National

698
00:33:36,040 --> 00:33:39,880
Speaker 10: Security Advisor for Economic Affairs, Mike Pyle, what's the difference,

699
00:33:40,200 --> 00:33:43,160
Speaker 10: and he said, look, D risking means we don't want

700
00:33:43,240 --> 00:33:46,440
Speaker 10: China to get a hold of advanced technology for their military.

701
00:33:46,800 --> 00:33:50,200
Speaker 10: We have concerns about economic coercion and their market practices,

702
00:33:50,280 --> 00:33:53,320
Speaker 10: but how can you call something a D couple when

703
00:33:53,440 --> 00:33:56,080
Speaker 10: US China trade was at a record last year. So

704
00:33:56,200 --> 00:33:59,520
Speaker 10: that is the framework that we are going into. But Lisa,

705
00:33:59,560 --> 00:34:02,640
Speaker 10: you also bring up a great point. Just hours after

706
00:34:03,000 --> 00:34:06,200
Speaker 10: we got this communicate, China came out and said that

707
00:34:06,520 --> 00:34:10,000
Speaker 10: Micron did not pass their cybersecurity review. And one thing

708
00:34:10,120 --> 00:34:12,960
Speaker 10: Rama Manuel, the US Ambassador to Japan, said to me

709
00:34:13,120 --> 00:34:15,839
Speaker 10: was we're no longer really just seeing China take these

710
00:34:15,880 --> 00:34:20,000
Speaker 10: economic coertions against nations. They're now going against companies. So

711
00:34:20,160 --> 00:34:23,200
Speaker 10: I think this was really a pivotal moment really in

712
00:34:23,239 --> 00:34:27,480
Speaker 10: the geopolitical landscape this week, even though domestic concerns were

713
00:34:27,480 --> 00:34:28,640
Speaker 10: definitely front and center.

714
00:34:29,040 --> 00:34:32,640
Speaker 5: MH. Buddy Kountrich of at a Weekend and this morning

715
00:34:32,680 --> 00:34:35,280
Speaker 5: as Wow, em Marie, thank you out of Japan Following

716
00:34:35,280 --> 00:34:35,920
Speaker 5: the G seven.

717
00:34:36,400 --> 00:34:40,279
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