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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside

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Speaker 1: my co host Matt Miller. Every business day we bring

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Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along

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Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast

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Speaker 1: called Copple Podcasts or wherever you listen to podcasts, and

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Speaker 1: at Bloomberg dot com slash podcast. Let's bring in uh

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Speaker 1: Lisa Hornby. She is the head of US multisector fixed

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Speaker 1: income over at Schroeder's and she can talk with us

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Speaker 1: about UM. Well, first, awfully, so what do you make

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Speaker 1: of the moves we're seeing today in sovereign bonds? You know,

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Speaker 1: rates markets are always kind of funny, right You get

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Speaker 1: a pp I print which admittedly is at expectations but

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Speaker 1: still nearly nine percent, and you have you have US

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Speaker 1: rates rallying and the curve actually flattening. UM. You know,

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Speaker 1: I think the bottom line is that the FED has

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Speaker 1: basically given markets the green light to um take a

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Speaker 1: little bit of risk. Although admittedly we're not saying that

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Speaker 1: in equity markets today, but in bond markets they're saying

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Speaker 1: we're not doing anything for the foreseeable future. Some of

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Speaker 1: the rate hikes that were discounted into markets a week

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Speaker 1: ago have come out. Um, you're hearing a little bit

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Speaker 1: more about Lele Brennard on the on the maybe more

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Speaker 1: do a shide of the equation. Um. That's perhaps giving

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Speaker 1: a little bit of a bid to rates markets. UM.

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Speaker 1: And you know, just generally, I think the move to

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Speaker 1: higher yield happened fairly quickly and perhaps um, perhaps a

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Speaker 1: little too quickly for markets that I think we're just

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Speaker 1: getting a bit of a reversal of that right now.

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Speaker 1: At least. It's really interesting because early in the year

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Speaker 1: or late last year, you made a prediction about inflation,

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Speaker 1: and you made a prediction about how UH the Fed

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Speaker 1: may need to start to move to control it. I'm

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Speaker 1: wondering now as we head towards the end of twenty

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Speaker 1: twenty one, on what you're expecting into next year. Yeah.

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Speaker 1: So our view on inflation, particularly early this year and

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Speaker 1: late last year, was that it was going to be

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Speaker 1: much longer lasting than markets expected it to be. And

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Speaker 1: I think we are getting, um, you know, some some

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Speaker 1: satisfaction on that in that in that transitory is UH

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Speaker 1: is not necessarily a number of months, but being measured

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Speaker 1: in maybe years. UM. And and you know, our view

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Speaker 1: is is still fairly consistent. We think some of the

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Speaker 1: inflation we're seeing today will come off, some of these

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Speaker 1: supply chain issues will certainly moderate UM, but inflation is

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Speaker 1: probably still going to run higher for the next several

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Speaker 1: years than it has done over the last several years UM.

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Speaker 1: A number of reasons for that, you know, ranging from

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Speaker 1: FED policy to the political environment that we're in too. Frankly,

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Speaker 1: a lot of the efforts being made UM by by

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Speaker 1: by governments to move towards more sustainable UH policies in

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Speaker 1: terms of infrastructure and energy policy. I mean, those will

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Speaker 1: require huge investments in commodities in our view that it's

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Speaker 1: still UM need to be priced into markets. So this

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Speaker 1: should be a fairly supportive environment for inflation. UM. Now

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Speaker 1: that being said, we're still faced with the fact that

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Speaker 1: that's FED is seemingly airing towards overweighting its employment side

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Speaker 1: of its mandate versus the inflation side. And so I

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Speaker 1: think that they are very cognizant of of of getting

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Speaker 1: to full excuse me, full employment UM and letting inflation

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Speaker 1: run a bit hotter than it has in the past.

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Speaker 1: They've been fairly explicit about that and I think if

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Speaker 1: Brainard is in fact the new FED chair um that

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Speaker 1: you know, she will take an even more aggressive stance

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Speaker 1: on that. Um. If that's true, then the market has

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Speaker 1: gone went pretty far in discounting almost at one point

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Speaker 1: three rate hikes into in our view, that was probably

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Speaker 1: too aggressive. Maybe it should be done, but it's not

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Speaker 1: necessarily what this FED is going to deliver. Um. So

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Speaker 1: that to why we're you know, we are being we're

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Speaker 1: we're more cognizant of a range trading environment in rates. Yes,

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Speaker 1: we think tenure should probably be a bit higher than

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Speaker 1: they are today. Um, but it's not necessarily can't can't

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Speaker 1: get there all in one self swoop. I think we

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Speaker 1: need to have a little bit of give and take

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Speaker 1: in the markets. Lisa, what do you buy right now?

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Speaker 1: I mean, you spent a decade in the trenches as

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Speaker 1: a PM before you became the big boss as the

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Speaker 1: head of US multi sector fixed income. It's probably not easy. Ah. Yeah,

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Speaker 1: So that's sort of an understatement for the whole team,

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Speaker 1: I'm sure. Um. You know, markets are are challenging right now.

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Speaker 1: You look at valuations across particularly credit markets, and you

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Speaker 1: see that they're in the bottom death stile of their

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Speaker 1: historical ranges, so nothing really looks cheap, particularly on the

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Speaker 1: corporate side, there is a little bit of opportunity opening

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Speaker 1: up in our view. On the emerging market side, we

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Speaker 1: have seen, um you know, some of these issuers underperform

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Speaker 1: a bit as as the dollar has been fairly strong

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Speaker 1: and that's been a headwind for them. UM So we

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Speaker 1: are starting to take a little bit of a dip

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Speaker 1: into into some of the e M names, particularly those

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Speaker 1: with with strong capital accounts, those are that are more

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Speaker 1: geared to the U S and global economic recovery, those

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Speaker 1: geared to towards commodities, as um I mentioned earlier. UM

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Speaker 1: you know, there's also perhaps some opportunity in some of

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Speaker 1: the securitized markets as well. Um less so maybe on

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Speaker 1: the agency space, but a little bit more on UM

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Speaker 1: in areas like triple A c l o s that

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Speaker 1: we still like that still look from evaluation perspective reasonable

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Speaker 1: compared to the rest of the alternatives. They're floating rate

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Speaker 1: in nature, their short duration um so where we can

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Speaker 1: pick spread there. We like the we like the structure.

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Speaker 1: Outside of that, it's really hard to make a compelling

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Speaker 1: argument for fixed income. I mean if we're being completely frank.

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Speaker 1: It's more of a carry environment at best. There's not

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Speaker 1: a lot of potential in our view for further spread

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Speaker 1: compression from here, so we're waiting for a little bit

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Speaker 1: more volatility and markets to take advantage of that. Well,

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Speaker 1: I hope we get to talk to you again, Lisa.

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Speaker 1: Great to get some time with you. Thanks very much

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Speaker 1: for joining us. Lisa Hornby is the head of US

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Speaker 1: multisector fixed income over at Schroeder's. Let's get back to

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Speaker 1: um uh more realistic corporate stories. Dream Hotel Group. I'm

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Speaker 1: sure that j Stein wouldn't mind a two point for

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Speaker 1: seven trillion dollar valuation, although it would probably be a

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Speaker 1: lot more work. You have to hire a lot more people,

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Speaker 1: and that's not easy in this economy. Jay Stein is

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Speaker 1: the chief executive officer of the Dream Hotel Group. Jay,

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Speaker 1: I want to start there with with hiring people, because

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Speaker 1: when we talk to you here on Bloomberg Radio recently,

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Speaker 1: you've pointed out that it's not easy to get employees in.

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Speaker 1: Has that changed at all? Not much, unfortunately, Thanks for

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Speaker 1: having me on. By the way, um, you know, it's

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Speaker 1: still very difficult to to attract people to come back

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Speaker 1: to work. Um. Also our industry, it's it's been difficult.

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Speaker 1: People are opting to stay at home if they can,

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Speaker 1: or maybe not come back into cities if they've vacated

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Speaker 1: the city. So it's it's still a challenge. We're doing

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Speaker 1: a lot of interesting things in our different hotels, uh,

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Speaker 1: you know, offering incentives and offering parking and many different

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Speaker 1: things to try and make it more comfortable for people

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Speaker 1: to uh look at us as an opportunity. But it

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Speaker 1: is still very difficult. Yeah, we've we've been wondering about this.

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Speaker 1: What is keeping people from coming back? What can bring

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Speaker 1: them back? Is it a matter of wages? Especially in hospitality,

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Speaker 1: It's it's harder to be flexible in terms of working

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Speaker 1: from home. I mean, what can you do to kind

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Speaker 1: of support the demands of this workforce? Yeah, I agree

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Speaker 1: with you, and I think part of it maybe immigration, right,

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Speaker 1: Maybe we need more people in the country uh that

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Speaker 1: are going to look to take jobs that other people

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Speaker 1: are just don't want to take, and we need more

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Speaker 1: more people available to work in the workforce. Uh. Um.

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Speaker 1: Other than that, uh, you know, I said, you know,

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Speaker 1: let's end the enhanced unemployment, and you know that that's ended.

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Speaker 1: I think unemployment in general is going to start to uh,

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Speaker 1: you know, stop for a number of people, and people

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Speaker 1: are gonna, you know, realize that that they need to

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Speaker 1: go back to work. But you know, I don't think

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Speaker 1: that's really the answer. It's it's a it's a unique

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Speaker 1: situation that we're in and a lot of the younger

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Speaker 1: people are looking at life differently, and we're gonna have

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Speaker 1: to find solutions. Because you said, my industry is dead

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Speaker 1: without without worker is so well, the economists still tell

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Speaker 1: us jay Um and the Federal Reserve will say, we're

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Speaker 1: not at full employment yet. So before we start bringing

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Speaker 1: new people into the country, we still have a lot

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Speaker 1: of people that are out there looking for jobs, or

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Speaker 1: could be looking for jobs, or should be looking for jobs.

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Speaker 1: What do you think is keeping them on the sidelines.

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Speaker 1: I think they have savings, and I think they started

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Speaker 1: getting unemployment and uh, they're saying, you know, I want

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Speaker 1: to do what I want to do. Um And until

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Speaker 1: they're here, you know, out of unemployment and their savings

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Speaker 1: are dwindling, they're staying on the sidelines. All right, Let's

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Speaker 1: get back to the business of travel and leisure, the

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Speaker 1: hotel business. As borders are opening up Um, I think

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Speaker 1: yesterday was November eight, right, So, Um, Europeans are coming

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Speaker 1: back into the US. Do you feel that have you

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Speaker 1: seen already a big bump in reservations and occupancy? Yeah,

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Speaker 1: we definitely see an increase. Um. I wouldn't say a

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Speaker 1: big bump yet, it's it's gonna ramp up. Um. But

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Speaker 1: I do think, um, you know, we're coming into the

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Speaker 1: holiday season, we'll see a good impact. The UK is

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Speaker 1: a great freedom market into the New York markets. Um.

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Speaker 1: But what I am excited about is I think we'll

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Speaker 1: see a bigger business coming through in January and February

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Speaker 1: than we normally would because of all the pent up

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Speaker 1: to Man, I think they'll be shoot flights coming over

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Speaker 1: from Europe, and with Broadway open, and with restaurants open,

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Speaker 1: with great you know, luxury type shopping reasonable here the

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Speaker 1: niche typically in Europe. I do think you'll see uh

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Speaker 1: better business coming in those months where it's usually slow

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Speaker 1: for US. I mean, it's interesting because we talk about

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Speaker 1: things about to reopen more. If you've walked through Times

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Speaker 1: Square the theater district, you can't really walk far it's

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Speaker 1: so crowded, And so I'm wondering, Jay, you know that

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Speaker 1: for the people who are do have pricing pressure here

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Speaker 1: are Is it getting more expensive? Is it going to

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Speaker 1: become difficult very soon for people to get rooms when

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Speaker 1: they're looking to travel. No, I don't think we're at

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Speaker 1: that point yet. Our hotels. You know, we have five

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Speaker 1: hotels here in New York. We just opened the Chatwell

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Speaker 1: Hotel just last Monday. That was the last of our

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Speaker 1: properties that was still closed, and that's our high end

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Speaker 1: luxury property, and we have to dream hotels, uh, and

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Speaker 1: the time that have all been open since May, and

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Speaker 1: we're still not back to regular. Ocupency levels in the

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Speaker 1: city runs higher than most areas we're typically close to,

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Speaker 1: and we're still down and around the seventy percent range.

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Speaker 1: So there's still a lot of rooms. Inflation for us

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Speaker 1: to lifted the rates like we're seeing in other industries

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Speaker 1: has not come to us yet uh in New York

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Speaker 1: as as although I'm sure it will over the next year,

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Speaker 1: and I think we'll hit the new highs in a

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Speaker 1: d RS that we haven't seen you in the city. Yeah,

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Speaker 1: I mean, I imagine that you're gonna have to lift

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Speaker 1: prices at some point to get your margins back to normal, right,

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Speaker 1: because you have to pay people exactly exactly. And I

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Speaker 1: think I think the public just like you. You know,

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Speaker 1: when we go out to eat now, you're paying probably

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Speaker 1: more for an entree than you did a year and

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Speaker 1: a half ago, but you know, you're still going out

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Speaker 1: to dinner. And I think that instead of paying for

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Speaker 1: a room and you're paying three seventy five and you're

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Speaker 1: going for a weekend, uh, he'll be happy to pay

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Speaker 1: it and stay in a great hotel. So I think that's, uh,

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Speaker 1: you know, something that the industry actually has the opportunity

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Speaker 1: to look forward to and be able to raise rates

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Speaker 1: rates of staging for for a longer time. Right now,

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Speaker 1: great to get your insight. Always appreciate having you on

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Speaker 1: the program. Thanks so much for your time. J Stein

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Speaker 1: is the chief executive officer of the Dream Hotel Group.

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Speaker 1: Talking to us about employment, international travel, and inflation. Really important. UM.

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Speaker 1: Insight there. Let's talk about a little bit more about

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Speaker 1: what's going on in the labor market, especially from the

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Speaker 1: perspective of the housing industry industry. UM. But I first

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Speaker 1: want to tell you that Bloomberg Markets is brought to

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Speaker 1: you by Commonwealth, supporting more than two thousand independent financial

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Speaker 1: advisors with solutions they need to grow thriving business. Commonwealth

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Speaker 1: go where you grow. Visit Commonwealth dot com to learn more.

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Speaker 1: Now let's get to Jack Trong right now. Uh. He

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Speaker 1: joins us at the CEO of James Hardy to talk

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Speaker 1: about this market, this housing market and um, the difficulty

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Speaker 1: in hiring people. Has it gotten any better? Jack? Um?

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Speaker 1: Good morning, Matt U. Sertainly within the new construction the markets, Um,

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Speaker 1: the it's still quite tenable. But but we also are

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Speaker 1: exposed to the remodeling segments and um, and it's actually

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Speaker 1: not as bad as in a new construction side. Well,

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Speaker 1: I'm wondering how long this construction boom really goes on

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Speaker 1: for you know, I know a lot of people who

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Speaker 1: are looking to build a home right now facing so

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Speaker 1: many delays, and I'm wondering if there's a point at

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Speaker 1: which this starts to taper off, whether more people coming

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Speaker 1: back into the workforce will start to ease some of

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Speaker 1: that pain Porsonally, you know what new construction is already

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Speaker 1: very quite a complex supply chain to build new homes,

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Speaker 1: and I need you have the different different type of

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Speaker 1: products and going to building home like with appliances, Wind windows,

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Speaker 1: doors and so and so forth. So you have also

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Speaker 1: have different skill laborers to complete the home. So we

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Speaker 1: we don't see that it's gonna gonna be abated anytime soon.

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Speaker 1: Um certainly at least within the next year or so.

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Speaker 1: But where we see um really light at the end

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Speaker 1: and tunnel, it's really in the remodelate side, where where

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Speaker 1: there is a there's a uptick in in the remodeling

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Speaker 1: of the big ticket items, big ticket project like the

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Speaker 1: re residing, remodeling or fixing your the exterior of homes.

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Speaker 1: UM that that's been growing. It's quite nicely in this

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Speaker 1: past quarters where we grouped by Cote and Insinceance, the

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Speaker 1: supply chain is not as complex and we do see

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Speaker 1: the labor it's quite really available in that remodeling sector.

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Speaker 1: So um, the remodeling is your focus. But it does

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Speaker 1: seem like this market needs more new construction, it needs

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Speaker 1: more supply. Um. How do you see that? Well, you know,

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Speaker 1: so you new constructions to read about between six or

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Speaker 1: eight percent of homes so to the how housing stock

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Speaker 1: in America today, So we still a relatively small part

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Speaker 1: of the housing availability in the US, UM. So UM

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Speaker 1: in in the short term, Yeah, it's gonna be limited

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Speaker 1: in terms of the new construction start. I think we

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Speaker 1: kind of horror around one point one million single family

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Speaker 1: new construction right now for several months now. And also

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Speaker 1: because of that complex of blind chain as we always

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Speaker 1: the lack of skill labor. We don't see that changing

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Speaker 1: anytime soon. But where we see more and more that

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Speaker 1: home owners are not going to move from their homes

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Speaker 1: and there's more tendency now for the of all owners

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Speaker 1: to stay where where they're at and then to put

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Speaker 1: that money to our renovated and remodeling their homes. You're

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Speaker 1: not gonna believe this guy's My parents actually moved to

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Speaker 1: India for four months because their house is so far

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Speaker 1: delayed being created and they had to sell. UM wondering

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Speaker 1: about next year? Does it get better given that we're

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Speaker 1: not going to see so much new supply so quickly. Yeah,

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Speaker 1: I think I think the next next year we'll get better.

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Speaker 1: That's thee that the industry work out of the complex

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Speaker 1: supply chain for new construction. Um. But you know, but

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Speaker 1: anything can can happen now to then and certainly uh,

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Speaker 1: you know, with the interest rate continue to be lowest

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Speaker 1: and this now and we were going to see that

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Speaker 1: the demand will have housing that might start to rise. Um.

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Speaker 1: We only have a minute or so left here. But

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Speaker 1: what about climate change? You know, it's interesting because I'm

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Speaker 1: wondering what you're doing to kind of prepare for bad

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Speaker 1: weather into the winter and all of these crazy fires

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Speaker 1: that we've been seeing as well or the soonality an accident.

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Speaker 1: That's a very very good question. You know. We're we're

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Speaker 1: very fortunated, James Hardy, that that we had a very

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Speaker 1: unique technology that we're product to make them from our

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Speaker 1: five cement technology. And not only that we deliver the

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Speaker 1: different designs and and aesthetic to the to the homes,

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Speaker 1: but they also protect the home from all the elements.

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Speaker 1: You know, it's it's noncombustible UM. It's also do durable

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Speaker 1: that we guarantee for filty years UM. And at the

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Speaker 1: same time, it's uh it's rated for hurricanes. You know

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Speaker 1: it's gonna be it can would stand when the up

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Speaker 1: to two and twenty nine per hour UM. And it

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Speaker 1: also rated by FEMA, say class five in the Class

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Speaker 1: five flood zone. So it's quite uh moisture resistance. So

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Speaker 1: our product is really um quite um well suited for

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Speaker 1: for the changing climate right now. All right, Jack, thanks

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Speaker 1: so much for joining us. Jack Trong there, chief executive

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Speaker 1: officer at James Hardy talking to us about the housing

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Speaker 1: market and um, the renovation situation right now. All right,

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Speaker 1: let's talk about our big take story of the day.

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Speaker 1: Reddit's latest obsession is the FEDS Reverse Repo Facility. Alex

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Speaker 1: Harris wrote the story and he's here to talk about

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Speaker 1: it with us. So, um, Alex, this is something that

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Speaker 1: we are often obsessed with as well. And as you

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Speaker 1: point out, money market traders are glued to the screen

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Speaker 1: every day to see the results of the reverse repo agreement.

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Speaker 1: Can you explain what it is to the layman? Yeah,

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Speaker 1: So what has happened is, you know, when the Fed

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Speaker 1: does these asset purchases, when the Treasury is holding onto

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Speaker 1: a lot of cash um and they start sort of

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Speaker 1: removing that or spending that down, that all goes into

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Speaker 1: the into the financial system. And so what the FEDS

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Speaker 1: Reverse Repo facility has been created to do is to

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Speaker 1: actually mop up this so called excess liquidity that there's

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Speaker 1: just there's too much out there, and so this facility

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Speaker 1: has been designed to sort of you know, redirect some

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Speaker 1: of it. So as to not overwhelm the financial system

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Speaker 1: and financial market. So I don't understand why the everyday

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Speaker 1: trader who's normally interested in the stock market, which they

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Speaker 1: can actually participate in, is so obsessed with reverse repo

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Speaker 1: which they have no exposure to. Yeah, initially it's a

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Speaker 1: good question, and one even after this story and so

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Speaker 1: asking myself a bit um just because they happened to

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Speaker 1: glance at the at the comments on Reddit in response

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Speaker 1: to the story. Um, you know, I think it's sort

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Speaker 1: of almost like an instinctive thing when you see a

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Speaker 1: number like this growing and then you start assigning sort

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Speaker 1: of assize and scope to it. Um, there has to

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Speaker 1: be some like absolutely insane reason as to why something

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Speaker 1: is behaving the way it is when it when it's

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Speaker 1: growing like this. Um, you know, and and really you know,

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Speaker 1: the reverse repo facility like on it on its front.

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Speaker 1: You know, people can say cool things for making repo fun. Again,

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Speaker 1: it's just intended to be boring. It's intended to just

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Speaker 1: clean up the market, you know. Well, but not at

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Speaker 1: these levels, right, I mean, it's huge. This isn't something

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Speaker 1: that's insignificant. It's not like, you know, move away. They're

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Speaker 1: nothing to see here. There is something to see here.

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Speaker 1: I mean, I think, if anything, and it's telling you

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Speaker 1: that what the said and the Treasury did in response

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Speaker 1: to the economic catastrophe that was the COVID pandemic in

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Speaker 1: the early days of it, um was actually monumental. Because

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Speaker 1: that's what essentially we're cleaning up right now, is that

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Speaker 1: the remember the fact is still doing quantitative using, it's

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Speaker 1: still purchasing treasuries, and it's still purchasing mortgage backed securities, um.

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Speaker 1: You know, so it's still pumping cash into the system,

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Speaker 1: and and it's quite a lot, you know. And we're

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Speaker 1: also getting cash from the Treasury because they were holding

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Speaker 1: at one point eight trillion dollar cash balance, which was

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Speaker 1: just unprecedented as well. I mean, we hadn't had when

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Speaker 1: the when the rest People facially was created in two

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Speaker 1: thousand and thirteen, at first launched, we didn't have fiscal

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Speaker 1: policy and monetary policy. Monetary policy. I think it was

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Speaker 1: Chuck Schumer in the Senate had told Bed Bernaki was

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Speaker 1: the only you know, they were the only game in town.

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Speaker 1: And and so that's why you didn't sound now in

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Speaker 1: a sense though that the explosion in the reverse repo

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Speaker 1: facility is emblematic of um, the amount of cash going

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Speaker 1: into things like game stock and uh bit dog right.

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Speaker 1: I mean there's just so much cash out there with

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Speaker 1: no place to go. Um, these big institutions are putting

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Speaker 1: it at the RP, but Wall Street bets bros. Are

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Speaker 1: putting it into a MC. You know, I think it

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Speaker 1: is emblematical the fact that there is just too much

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Speaker 1: cash out there period. You know, I think you know

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Speaker 1: when you look at the you know, amount of money

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Speaker 1: it costs for a used car, use phone. You know,

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Speaker 1: yes it is. But you remember these are money market

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Speaker 1: funds that are primarily using the reverse repo facility. Um.

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Speaker 1: You know these aren't the banks. The banks have you know,

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Speaker 1: interest on reserve balances that pay fifteen basis point for

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Speaker 1: cash and this is this is money son. You make

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Speaker 1: this other point in the story that I think is

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Speaker 1: really important. It's really important for people to understand how

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Speaker 1: the FED works, especially the most you know, basic things

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Speaker 1: to keep the economy safe. Right. But you have said

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Speaker 1: that there's a lot of FED miss run by a

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Speaker 1: very dangerous man though according to well, let's not go there.

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Speaker 1: But you know that there's a lot of FED misinformation

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Speaker 1: spreading on Twitter you know, what are some of the

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Speaker 1: misconceptions that people have about this that then need to

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Speaker 1: be debunked, you know, I think because again it's so

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Speaker 1: big and and you really have to, i think, want

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Speaker 1: to understand exactly how the mechanics of the financial system works.

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Speaker 1: And with that, you have to understand kind of how

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Speaker 1: these said faces amilities work. And one of the things

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Speaker 1: that you you know, that was a misconception that we

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Speaker 1: found is that UM hedge funds were regular users or

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Speaker 1: the reverse repo facility and they were taking you know,

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Speaker 1: the securities that they were getting from the set in

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Speaker 1: these operations and and then lending them out UM and

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Speaker 1: you're using them as collateral UM, which is not the

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Speaker 1: case because hedge funds are not counterparties. So the reverse

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Speaker 1: repot facility, you know, the bulk of the counterparties that

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Speaker 1: actually use it our money market funds, followed by your

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Speaker 1: Fannie MA, Freadie MAC and your federal homeland banks. So

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Speaker 1: that was a big one. You know. The other the

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Speaker 1: other misconception is the idea is that the larger this

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Speaker 1: gets UM, the more likely to pretends some sort of

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Speaker 1: economic collapse UM, when in fact, you know, the set

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Speaker 1: had created um, the reverse repo facility and now what's

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Speaker 1: called the standing repo facility to sort of um, you know,

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Speaker 1: guard the market, you know, against these sort of catastrophes,

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Speaker 1: especially in the plumbing market, you know, where things can

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Speaker 1: be so fragile and so sensitive, as we saw even

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Speaker 1: you know in nine, you know, when overnight repo spike

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Speaker 1: to ten. It's like according to your you have a

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Speaker 1: great great um you quote a great Reddit user, old

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Speaker 1: man repo. He says his mom thought he was out

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Speaker 1: there stealing cars like the great Amelio Estevas film repo.

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Speaker 1: Man Um, he's doing something else, Mom, Yeah, I mean

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Speaker 1: that's exactly what it is. And I think he had actually,

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Speaker 1: you know, it was such a it was such a

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Speaker 1: nice analogy because that's exactly what it is. Is that

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Speaker 1: you know, what had happened was, you know, the COVID

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Speaker 1: and the and the pandemic and everything broke, and the

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Speaker 1: reverse repo facility is sort of what you're using to

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Speaker 1: sort of get back to health and and so that's

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Speaker 1: what we're seeing right now. It's just that, you know, again,

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Speaker 1: unprecedented times called for unpressd then did the amounts of

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Speaker 1: liquidity from both the FED and the Treasury, and and

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Speaker 1: that's why we're getting the usage that we're using. And

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Speaker 1: because again it's it's a piece of the plumbing, and

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Speaker 1: no one really looks at the plumbing unless it breaks.

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Speaker 1: That's why we are getting the reaction we're getting. Alex.

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Speaker 1: Thanks so much, Alex Harris writing our big Take story

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Speaker 1: for today. Thanks for listening to the Bloomberg Markets podcast.

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Speaker 1: You can subscribe and listen to interviews with Apple Podcasts

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Speaker 1: or whatever podcast platform you prefer. I'm Matt Miller. I'm

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Speaker 1: on Twitter at Matt Miller three. Put on fall Sweeney.

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Speaker 1: I'm on Twitter at pt Sweeney Before the podcast. You

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Speaker 1: can always catch us worldwide at Bloomberg Radio