Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney alongside
Speaker 1: my co host Matt Miller. Every business day we bring
Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast
Speaker 1: called Copple Podcasts or wherever you listen to podcasts, and
Speaker 1: at Bloomberg dot com slash podcast. Let's bring in uh
Speaker 1: Lisa Hornby. She is the head of US multisector fixed
Speaker 1: income over at Schroeder's and she can talk with us
Speaker 1: about UM. Well, first, awfully, so what do you make
Speaker 1: of the moves we're seeing today in sovereign bonds? You know,
Speaker 1: rates markets are always kind of funny, right You get
Speaker 1: a pp I print which admittedly is at expectations but
Speaker 1: still nearly nine percent, and you have you have US
Speaker 1: rates rallying and the curve actually flattening. UM. You know,
Speaker 1: I think the bottom line is that the FED has
Speaker 1: basically given markets the green light to um take a
Speaker 1: little bit of risk. Although admittedly we're not saying that
Speaker 1: in equity markets today, but in bond markets they're saying
Speaker 1: we're not doing anything for the foreseeable future. Some of
Speaker 1: the rate hikes that were discounted into markets a week
Speaker 1: ago have come out. Um, you're hearing a little bit
Speaker 1: more about Lele Brennard on the on the maybe more
Speaker 1: do a shide of the equation. Um. That's perhaps giving
Speaker 1: a little bit of a bid to rates markets. UM.
Speaker 1: And you know, just generally, I think the move to
Speaker 1: higher yield happened fairly quickly and perhaps um, perhaps a
Speaker 1: little too quickly for markets that I think we're just
Speaker 1: getting a bit of a reversal of that right now.
Speaker 1: At least. It's really interesting because early in the year
Speaker 1: or late last year, you made a prediction about inflation,
Speaker 1: and you made a prediction about how UH the Fed
Speaker 1: may need to start to move to control it. I'm
Speaker 1: wondering now as we head towards the end of twenty
Speaker 1: twenty one, on what you're expecting into next year. Yeah.
Speaker 1: So our view on inflation, particularly early this year and
Speaker 1: late last year, was that it was going to be
Speaker 1: much longer lasting than markets expected it to be. And
Speaker 1: I think we are getting, um, you know, some some
Speaker 1: satisfaction on that in that in that transitory is UH
Speaker 1: is not necessarily a number of months, but being measured
Speaker 1: in maybe years. UM. And and you know, our view
Speaker 1: is is still fairly consistent. We think some of the
Speaker 1: inflation we're seeing today will come off, some of these
Speaker 1: supply chain issues will certainly moderate UM, but inflation is
Speaker 1: probably still going to run higher for the next several
Speaker 1: years than it has done over the last several years UM.
Speaker 1: A number of reasons for that, you know, ranging from
Speaker 1: FED policy to the political environment that we're in too. Frankly,
Speaker 1: a lot of the efforts being made UM by by
Speaker 1: by governments to move towards more sustainable UH policies in
Speaker 1: terms of infrastructure and energy policy. I mean, those will
Speaker 1: require huge investments in commodities in our view that it's
Speaker 1: still UM need to be priced into markets. So this
Speaker 1: should be a fairly supportive environment for inflation. UM. Now
Speaker 1: that being said, we're still faced with the fact that
Speaker 1: that's FED is seemingly airing towards overweighting its employment side
Speaker 1: of its mandate versus the inflation side. And so I
Speaker 1: think that they are very cognizant of of of getting
Speaker 1: to full excuse me, full employment UM and letting inflation
Speaker 1: run a bit hotter than it has in the past.
Speaker 1: They've been fairly explicit about that and I think if
Speaker 1: Brainard is in fact the new FED chair um that
Speaker 1: you know, she will take an even more aggressive stance
Speaker 1: on that. Um. If that's true, then the market has
Speaker 1: gone went pretty far in discounting almost at one point
Speaker 1: three rate hikes into in our view, that was probably
Speaker 1: too aggressive. Maybe it should be done, but it's not
Speaker 1: necessarily what this FED is going to deliver. Um. So
Speaker 1: that to why we're you know, we are being we're
Speaker 1: we're more cognizant of a range trading environment in rates. Yes,
Speaker 1: we think tenure should probably be a bit higher than
Speaker 1: they are today. Um, but it's not necessarily can't can't
Speaker 1: get there all in one self swoop. I think we
Speaker 1: need to have a little bit of give and take
Speaker 1: in the markets. Lisa, what do you buy right now?
Speaker 1: I mean, you spent a decade in the trenches as
Speaker 1: a PM before you became the big boss as the
Speaker 1: head of US multi sector fixed income. It's probably not easy. Ah. Yeah,
Speaker 1: So that's sort of an understatement for the whole team,
Speaker 1: I'm sure. Um. You know, markets are are challenging right now.
Speaker 1: You look at valuations across particularly credit markets, and you
Speaker 1: see that they're in the bottom death stile of their
Speaker 1: historical ranges, so nothing really looks cheap, particularly on the
Speaker 1: corporate side, there is a little bit of opportunity opening
Speaker 1: up in our view. On the emerging market side, we
Speaker 1: have seen, um you know, some of these issuers underperform
Speaker 1: a bit as as the dollar has been fairly strong
Speaker 1: and that's been a headwind for them. UM So we
Speaker 1: are starting to take a little bit of a dip
Speaker 1: into into some of the e M names, particularly those
Speaker 1: with with strong capital accounts, those are that are more
Speaker 1: geared to the U S and global economic recovery, those
Speaker 1: geared to towards commodities, as um I mentioned earlier. UM
Speaker 1: you know, there's also perhaps some opportunity in some of
Speaker 1: the securitized markets as well. Um less so maybe on
Speaker 1: the agency space, but a little bit more on UM
Speaker 1: in areas like triple A c l o s that
Speaker 1: we still like that still look from evaluation perspective reasonable
Speaker 1: compared to the rest of the alternatives. They're floating rate
Speaker 1: in nature, their short duration um so where we can
Speaker 1: pick spread there. We like the we like the structure.
Speaker 1: Outside of that, it's really hard to make a compelling
Speaker 1: argument for fixed income. I mean if we're being completely frank.
Speaker 1: It's more of a carry environment at best. There's not
Speaker 1: a lot of potential in our view for further spread
Speaker 1: compression from here, so we're waiting for a little bit
Speaker 1: more volatility and markets to take advantage of that. Well,
Speaker 1: I hope we get to talk to you again, Lisa.
Speaker 1: Great to get some time with you. Thanks very much
Speaker 1: for joining us. Lisa Hornby is the head of US
Speaker 1: multisector fixed income over at Schroeder's. Let's get back to
Speaker 1: um uh more realistic corporate stories. Dream Hotel Group. I'm
Speaker 1: sure that j Stein wouldn't mind a two point for
Speaker 1: seven trillion dollar valuation, although it would probably be a
Speaker 1: lot more work. You have to hire a lot more people,
Speaker 1: and that's not easy in this economy. Jay Stein is
Speaker 1: the chief executive officer of the Dream Hotel Group. Jay,
Speaker 1: I want to start there with with hiring people, because
Speaker 1: when we talk to you here on Bloomberg Radio recently,
Speaker 1: you've pointed out that it's not easy to get employees in.
Speaker 1: Has that changed at all? Not much, unfortunately, Thanks for
Speaker 1: having me on. By the way, um, you know, it's
Speaker 1: still very difficult to to attract people to come back
Speaker 1: to work. Um. Also our industry, it's it's been difficult.
Speaker 1: People are opting to stay at home if they can,
Speaker 1: or maybe not come back into cities if they've vacated
Speaker 1: the city. So it's it's still a challenge. We're doing
Speaker 1: a lot of interesting things in our different hotels, uh,
Speaker 1: you know, offering incentives and offering parking and many different
Speaker 1: things to try and make it more comfortable for people
Speaker 1: to uh look at us as an opportunity. But it
Speaker 1: is still very difficult. Yeah, we've we've been wondering about this.
Speaker 1: What is keeping people from coming back? What can bring
Speaker 1: them back? Is it a matter of wages? Especially in hospitality,
Speaker 1: It's it's harder to be flexible in terms of working
Speaker 1: from home. I mean, what can you do to kind
Speaker 1: of support the demands of this workforce? Yeah, I agree
Speaker 1: with you, and I think part of it maybe immigration, right,
Speaker 1: Maybe we need more people in the country uh that
Speaker 1: are going to look to take jobs that other people
Speaker 1: are just don't want to take, and we need more
Speaker 1: more people available to work in the workforce. Uh. Um.
Speaker 1: Other than that, uh, you know, I said, you know,
Speaker 1: let's end the enhanced unemployment, and you know that that's ended.
Speaker 1: I think unemployment in general is going to start to uh,
Speaker 1: you know, stop for a number of people, and people
Speaker 1: are gonna, you know, realize that that they need to
Speaker 1: go back to work. But you know, I don't think
Speaker 1: that's really the answer. It's it's a it's a unique
Speaker 1: situation that we're in and a lot of the younger
Speaker 1: people are looking at life differently, and we're gonna have
Speaker 1: to find solutions. Because you said, my industry is dead
Speaker 1: without without worker is so well, the economists still tell
Speaker 1: us jay Um and the Federal Reserve will say, we're
Speaker 1: not at full employment yet. So before we start bringing
Speaker 1: new people into the country, we still have a lot
Speaker 1: of people that are out there looking for jobs, or
Speaker 1: could be looking for jobs, or should be looking for jobs.
Speaker 1: What do you think is keeping them on the sidelines.
Speaker 1: I think they have savings, and I think they started
Speaker 1: getting unemployment and uh, they're saying, you know, I want
Speaker 1: to do what I want to do. Um And until
Speaker 1: they're here, you know, out of unemployment and their savings
Speaker 1: are dwindling, they're staying on the sidelines. All right, Let's
Speaker 1: get back to the business of travel and leisure, the
Speaker 1: hotel business. As borders are opening up Um, I think
Speaker 1: yesterday was November eight, right, So, Um, Europeans are coming
Speaker 1: back into the US. Do you feel that have you
Speaker 1: seen already a big bump in reservations and occupancy? Yeah,
Speaker 1: we definitely see an increase. Um. I wouldn't say a
Speaker 1: big bump yet, it's it's gonna ramp up. Um. But
Speaker 1: I do think, um, you know, we're coming into the
Speaker 1: holiday season, we'll see a good impact. The UK is
Speaker 1: a great freedom market into the New York markets. Um.
Speaker 1: But what I am excited about is I think we'll
Speaker 1: see a bigger business coming through in January and February
Speaker 1: than we normally would because of all the pent up
Speaker 1: to Man, I think they'll be shoot flights coming over
Speaker 1: from Europe, and with Broadway open, and with restaurants open,
Speaker 1: with great you know, luxury type shopping reasonable here the
Speaker 1: niche typically in Europe. I do think you'll see uh
Speaker 1: better business coming in those months where it's usually slow
Speaker 1: for US. I mean, it's interesting because we talk about
Speaker 1: things about to reopen more. If you've walked through Times
Speaker 1: Square the theater district, you can't really walk far it's
Speaker 1: so crowded, And so I'm wondering, Jay, you know that
Speaker 1: for the people who are do have pricing pressure here
Speaker 1: are Is it getting more expensive? Is it going to
Speaker 1: become difficult very soon for people to get rooms when
Speaker 1: they're looking to travel. No, I don't think we're at
Speaker 1: that point yet. Our hotels. You know, we have five
Speaker 1: hotels here in New York. We just opened the Chatwell
Speaker 1: Hotel just last Monday. That was the last of our
Speaker 1: properties that was still closed, and that's our high end
Speaker 1: luxury property, and we have to dream hotels, uh, and
Speaker 1: the time that have all been open since May, and
Speaker 1: we're still not back to regular. Ocupency levels in the
Speaker 1: city runs higher than most areas we're typically close to,
Speaker 1: and we're still down and around the seventy percent range.
Speaker 1: So there's still a lot of rooms. Inflation for us
Speaker 1: to lifted the rates like we're seeing in other industries
Speaker 1: has not come to us yet uh in New York
Speaker 1: as as although I'm sure it will over the next year,
Speaker 1: and I think we'll hit the new highs in a
Speaker 1: d RS that we haven't seen you in the city. Yeah,
Speaker 1: I mean, I imagine that you're gonna have to lift
Speaker 1: prices at some point to get your margins back to normal, right,
Speaker 1: because you have to pay people exactly exactly. And I
Speaker 1: think I think the public just like you. You know,
Speaker 1: when we go out to eat now, you're paying probably
Speaker 1: more for an entree than you did a year and
Speaker 1: a half ago, but you know, you're still going out
Speaker 1: to dinner. And I think that instead of paying for
Speaker 1: a room and you're paying three seventy five and you're
Speaker 1: going for a weekend, uh, he'll be happy to pay
Speaker 1: it and stay in a great hotel. So I think that's, uh,
Speaker 1: you know, something that the industry actually has the opportunity
Speaker 1: to look forward to and be able to raise rates
Speaker 1: rates of staging for for a longer time. Right now,
Speaker 1: great to get your insight. Always appreciate having you on
Speaker 1: the program. Thanks so much for your time. J Stein
Speaker 1: is the chief executive officer of the Dream Hotel Group.
Speaker 1: Talking to us about employment, international travel, and inflation. Really important. UM.
Speaker 1: Insight there. Let's talk about a little bit more about
Speaker 1: what's going on in the labor market, especially from the
Speaker 1: perspective of the housing industry industry. UM. But I first
Speaker 1: want to tell you that Bloomberg Markets is brought to
Speaker 1: you by Commonwealth, supporting more than two thousand independent financial
Speaker 1: advisors with solutions they need to grow thriving business. Commonwealth
Speaker 1: go where you grow. Visit Commonwealth dot com to learn more.
Speaker 1: Now let's get to Jack Trong right now. Uh. He
Speaker 1: joins us at the CEO of James Hardy to talk
Speaker 1: about this market, this housing market and um, the difficulty
Speaker 1: in hiring people. Has it gotten any better? Jack? Um?
Speaker 1: Good morning, Matt U. Sertainly within the new construction the markets, Um,
Speaker 1: the it's still quite tenable. But but we also are
Speaker 1: exposed to the remodeling segments and um, and it's actually
Speaker 1: not as bad as in a new construction side. Well,
Speaker 1: I'm wondering how long this construction boom really goes on
Speaker 1: for you know, I know a lot of people who
Speaker 1: are looking to build a home right now facing so
Speaker 1: many delays, and I'm wondering if there's a point at
Speaker 1: which this starts to taper off, whether more people coming
Speaker 1: back into the workforce will start to ease some of
Speaker 1: that pain Porsonally, you know what new construction is already
Speaker 1: very quite a complex supply chain to build new homes,
Speaker 1: and I need you have the different different type of
Speaker 1: products and going to building home like with appliances, Wind windows,
Speaker 1: doors and so and so forth. So you have also
Speaker 1: have different skill laborers to complete the home. So we
Speaker 1: we don't see that it's gonna gonna be abated anytime soon.
Speaker 1: Um certainly at least within the next year or so.
Speaker 1: But where we see um really light at the end
Speaker 1: and tunnel, it's really in the remodelate side, where where
Speaker 1: there is a there's a uptick in in the remodeling
Speaker 1: of the big ticket items, big ticket project like the
Speaker 1: re residing, remodeling or fixing your the exterior of homes.
Speaker 1: UM that that's been growing. It's quite nicely in this
Speaker 1: past quarters where we grouped by Cote and Insinceance, the
Speaker 1: supply chain is not as complex and we do see
Speaker 1: the labor it's quite really available in that remodeling sector.
Speaker 1: So um, the remodeling is your focus. But it does
Speaker 1: seem like this market needs more new construction, it needs
Speaker 1: more supply. Um. How do you see that? Well, you know,
Speaker 1: so you new constructions to read about between six or
Speaker 1: eight percent of homes so to the how housing stock
Speaker 1: in America today, So we still a relatively small part
Speaker 1: of the housing availability in the US, UM. So UM
Speaker 1: in in the short term, Yeah, it's gonna be limited
Speaker 1: in terms of the new construction start. I think we
Speaker 1: kind of horror around one point one million single family
Speaker 1: new construction right now for several months now. And also
Speaker 1: because of that complex of blind chain as we always
Speaker 1: the lack of skill labor. We don't see that changing
Speaker 1: anytime soon. But where we see more and more that
Speaker 1: home owners are not going to move from their homes
Speaker 1: and there's more tendency now for the of all owners
Speaker 1: to stay where where they're at and then to put
Speaker 1: that money to our renovated and remodeling their homes. You're
Speaker 1: not gonna believe this guy's My parents actually moved to
Speaker 1: India for four months because their house is so far
Speaker 1: delayed being created and they had to sell. UM wondering
Speaker 1: about next year? Does it get better given that we're
Speaker 1: not going to see so much new supply so quickly. Yeah,
Speaker 1: I think I think the next next year we'll get better.
Speaker 1: That's thee that the industry work out of the complex
Speaker 1: supply chain for new construction. Um. But you know, but
Speaker 1: anything can can happen now to then and certainly uh,
Speaker 1: you know, with the interest rate continue to be lowest
Speaker 1: and this now and we were going to see that
Speaker 1: the demand will have housing that might start to rise. Um.
Speaker 1: We only have a minute or so left here. But
Speaker 1: what about climate change? You know, it's interesting because I'm
Speaker 1: wondering what you're doing to kind of prepare for bad
Speaker 1: weather into the winter and all of these crazy fires
Speaker 1: that we've been seeing as well or the soonality an accident.
Speaker 1: That's a very very good question. You know. We're we're
Speaker 1: very fortunated, James Hardy, that that we had a very
Speaker 1: unique technology that we're product to make them from our
Speaker 1: five cement technology. And not only that we deliver the
Speaker 1: different designs and and aesthetic to the to the homes,
Speaker 1: but they also protect the home from all the elements.
Speaker 1: You know, it's it's noncombustible UM. It's also do durable
Speaker 1: that we guarantee for filty years UM. And at the
Speaker 1: same time, it's uh it's rated for hurricanes. You know
Speaker 1: it's gonna be it can would stand when the up
Speaker 1: to two and twenty nine per hour UM. And it
Speaker 1: also rated by FEMA, say class five in the Class
Speaker 1: five flood zone. So it's quite uh moisture resistance. So
Speaker 1: our product is really um quite um well suited for
Speaker 1: for the changing climate right now. All right, Jack, thanks
Speaker 1: so much for joining us. Jack Trong there, chief executive
Speaker 1: officer at James Hardy talking to us about the housing
Speaker 1: market and um, the renovation situation right now. All right,
Speaker 1: let's talk about our big take story of the day.
Speaker 1: Reddit's latest obsession is the FEDS Reverse Repo Facility. Alex
Speaker 1: Harris wrote the story and he's here to talk about
Speaker 1: it with us. So, um, Alex, this is something that
Speaker 1: we are often obsessed with as well. And as you
Speaker 1: point out, money market traders are glued to the screen
Speaker 1: every day to see the results of the reverse repo agreement.
Speaker 1: Can you explain what it is to the layman? Yeah,
Speaker 1: So what has happened is, you know, when the Fed
Speaker 1: does these asset purchases, when the Treasury is holding onto
Speaker 1: a lot of cash um and they start sort of
Speaker 1: removing that or spending that down, that all goes into
Speaker 1: the into the financial system. And so what the FEDS
Speaker 1: Reverse Repo facility has been created to do is to
Speaker 1: actually mop up this so called excess liquidity that there's
Speaker 1: just there's too much out there, and so this facility
Speaker 1: has been designed to sort of you know, redirect some
Speaker 1: of it. So as to not overwhelm the financial system
Speaker 1: and financial market. So I don't understand why the everyday
Speaker 1: trader who's normally interested in the stock market, which they
Speaker 1: can actually participate in, is so obsessed with reverse repo
Speaker 1: which they have no exposure to. Yeah, initially it's a
Speaker 1: good question, and one even after this story and so
Speaker 1: asking myself a bit um just because they happened to
Speaker 1: glance at the at the comments on Reddit in response
Speaker 1: to the story. Um, you know, I think it's sort
Speaker 1: of almost like an instinctive thing when you see a
Speaker 1: number like this growing and then you start assigning sort
Speaker 1: of assize and scope to it. Um, there has to
Speaker 1: be some like absolutely insane reason as to why something
Speaker 1: is behaving the way it is when it when it's
Speaker 1: growing like this. Um, you know, and and really you know,
Speaker 1: the reverse repo facility like on it on its front.
Speaker 1: You know, people can say cool things for making repo fun. Again,
Speaker 1: it's just intended to be boring. It's intended to just
Speaker 1: clean up the market, you know. Well, but not at
Speaker 1: these levels, right, I mean, it's huge. This isn't something
Speaker 1: that's insignificant. It's not like, you know, move away. They're
Speaker 1: nothing to see here. There is something to see here.
Speaker 1: I mean, I think, if anything, and it's telling you
Speaker 1: that what the said and the Treasury did in response
Speaker 1: to the economic catastrophe that was the COVID pandemic in
Speaker 1: the early days of it, um was actually monumental. Because
Speaker 1: that's what essentially we're cleaning up right now, is that
Speaker 1: the remember the fact is still doing quantitative using, it's
Speaker 1: still purchasing treasuries, and it's still purchasing mortgage backed securities, um.
Speaker 1: You know, so it's still pumping cash into the system,
Speaker 1: and and it's quite a lot, you know. And we're
Speaker 1: also getting cash from the Treasury because they were holding
Speaker 1: at one point eight trillion dollar cash balance, which was
Speaker 1: just unprecedented as well. I mean, we hadn't had when
Speaker 1: the when the rest People facially was created in two
Speaker 1: thousand and thirteen, at first launched, we didn't have fiscal
Speaker 1: policy and monetary policy. Monetary policy. I think it was
Speaker 1: Chuck Schumer in the Senate had told Bed Bernaki was
Speaker 1: the only you know, they were the only game in town.
Speaker 1: And and so that's why you didn't sound now in
Speaker 1: a sense though that the explosion in the reverse repo
Speaker 1: facility is emblematic of um, the amount of cash going
Speaker 1: into things like game stock and uh bit dog right.
Speaker 1: I mean there's just so much cash out there with
Speaker 1: no place to go. Um, these big institutions are putting
Speaker 1: it at the RP, but Wall Street bets bros. Are
Speaker 1: putting it into a MC. You know, I think it
Speaker 1: is emblematical the fact that there is just too much
Speaker 1: cash out there period. You know, I think you know
Speaker 1: when you look at the you know, amount of money
Speaker 1: it costs for a used car, use phone. You know,
Speaker 1: yes it is. But you remember these are money market
Speaker 1: funds that are primarily using the reverse repo facility. Um.
Speaker 1: You know these aren't the banks. The banks have you know,
Speaker 1: interest on reserve balances that pay fifteen basis point for
Speaker 1: cash and this is this is money son. You make
Speaker 1: this other point in the story that I think is
Speaker 1: really important. It's really important for people to understand how
Speaker 1: the FED works, especially the most you know, basic things
Speaker 1: to keep the economy safe. Right. But you have said
Speaker 1: that there's a lot of FED miss run by a
Speaker 1: very dangerous man though according to well, let's not go there.
Speaker 1: But you know that there's a lot of FED misinformation
Speaker 1: spreading on Twitter you know, what are some of the
Speaker 1: misconceptions that people have about this that then need to
Speaker 1: be debunked, you know, I think because again it's so
Speaker 1: big and and you really have to, i think, want
Speaker 1: to understand exactly how the mechanics of the financial system works.
Speaker 1: And with that, you have to understand kind of how
Speaker 1: these said faces amilities work. And one of the things
Speaker 1: that you you know, that was a misconception that we
Speaker 1: found is that UM hedge funds were regular users or
Speaker 1: the reverse repo facility and they were taking you know,
Speaker 1: the securities that they were getting from the set in
Speaker 1: these operations and and then lending them out UM and
Speaker 1: you're using them as collateral UM, which is not the
Speaker 1: case because hedge funds are not counterparties. So the reverse
Speaker 1: repot facility, you know, the bulk of the counterparties that
Speaker 1: actually use it our money market funds, followed by your
Speaker 1: Fannie MA, Freadie MAC and your federal homeland banks. So
Speaker 1: that was a big one. You know. The other the
Speaker 1: other misconception is the idea is that the larger this
Speaker 1: gets UM, the more likely to pretends some sort of
Speaker 1: economic collapse UM, when in fact, you know, the set
Speaker 1: had created um, the reverse repo facility and now what's
Speaker 1: called the standing repo facility to sort of um, you know,
Speaker 1: guard the market, you know, against these sort of catastrophes,
Speaker 1: especially in the plumbing market, you know, where things can
Speaker 1: be so fragile and so sensitive, as we saw even
Speaker 1: you know in nine, you know, when overnight repo spike
Speaker 1: to ten. It's like according to your you have a
Speaker 1: great great um you quote a great Reddit user, old
Speaker 1: man repo. He says his mom thought he was out
Speaker 1: there stealing cars like the great Amelio Estevas film repo.
Speaker 1: Man Um, he's doing something else, Mom, Yeah, I mean
Speaker 1: that's exactly what it is. And I think he had actually,
Speaker 1: you know, it was such a it was such a
Speaker 1: nice analogy because that's exactly what it is. Is that
Speaker 1: you know, what had happened was, you know, the COVID
Speaker 1: and the and the pandemic and everything broke, and the
Speaker 1: reverse repo facility is sort of what you're using to
Speaker 1: sort of get back to health and and so that's
Speaker 1: what we're seeing right now. It's just that, you know, again,
Speaker 1: unprecedented times called for unpressd then did the amounts of
Speaker 1: liquidity from both the FED and the Treasury, and and
Speaker 1: that's why we're getting the usage that we're using. And
Speaker 1: because again it's it's a piece of the plumbing, and
Speaker 1: no one really looks at the plumbing unless it breaks.
Speaker 1: That's why we are getting the reaction we're getting. Alex.
Speaker 1: Thanks so much, Alex Harris writing our big Take story
Speaker 1: for today. Thanks for listening to the Bloomberg Markets podcast.
Speaker 1: You can subscribe and listen to interviews with Apple Podcasts
Speaker 1: or whatever podcast platform you prefer. I'm Matt Miller. I'm
Speaker 1: on Twitter at Matt Miller three. Put on fall Sweeney.
Speaker 1: I'm on Twitter at pt Sweeney Before the podcast. You
Speaker 1: can always catch us worldwide at Bloomberg Radio