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

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

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Speaker 1: for insight from the best an 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.

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Speaker 2: Joining us now is Brian Levick, Global market strategist overt Invesco. Brian,

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Speaker 2: I was thinking back to a conversation we had several

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Speaker 2: months ago, and you refer to yourself as a fauxmo guy,

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Speaker 2: someone who wanted to buy these techniques when everyone else

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Speaker 2: was calling them just a bubble and a rally that

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Speaker 2: wouldn't sustain itself. Brian, where are you now on that call?

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Speaker 2: Given that a lot of people are starting to say, Okay,

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Speaker 2: it's a ballmarket, we might have to live with it.

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Speaker 2: Perhaps perhaps we can look how swear? Are you looking

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Speaker 2: how swear?

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Speaker 3: Yeah?

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Speaker 4: I think you start to look elsewhere, and that's actually healthy.

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Speaker 4: The market is broadening, it's more being into other, more

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Speaker 4: value oriented parts of the market. The cyclical name smaller caps.

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Speaker 4: So it's not just the very you know, narrow market

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Speaker 4: that you saw call it March April May. You're actually

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Speaker 4: getting assigned from markets that this is healthier and there's

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Speaker 4: more participants. In so far, the earnings for the value

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Speaker 4: oriented companies have been quite good.

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Speaker 2: Ron I think's getting less bad or is the outlook

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Speaker 2: for earnings actually improving?

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Speaker 5: Well?

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Speaker 4: I think that things are moderating. I mean that's what

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Speaker 4: you would expect in this part of the cycle. But

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Speaker 4: I think what a lot of investors missed is that

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Speaker 4: the market priced it last year. I mean, you know,

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Speaker 4: eleven months ago we were down nine percent in a month,

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Speaker 4: so or thirteen months ago, I should say, So that

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Speaker 4: was a market that had already assessed what was likely

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Speaker 4: to be a weak economic environment because of all the tightening,

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Speaker 4: and yet the economy has been more resilient than many expect.

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Speaker 4: I think, or worry a bit is the valuations on

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Speaker 4: the broad market. But that is in a handful of names,

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Speaker 4: and you start to think about this broadening out the

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Speaker 4: names that have not been bid up, or starting to

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Speaker 4: participate more again, which is healthy.

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Speaker 1: You got to participate, Brian Levitt. But I would suggest

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Speaker 1: what you've got to do is extend your timeline. Where's

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Speaker 1: the new levit terminal value? I mean it used to

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Speaker 1: be seven years, five years. But if I'm going to

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Speaker 1: buy Apple here or all these other fancy stocks, do

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Speaker 1: I have to extend out my terminal value to justify

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Speaker 1: acquisition of those shares? Now?

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Speaker 4: Well, some of those names are trading at quite elevated valuations,

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Speaker 4: so you want to be a little bit cautious and

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Speaker 4: the near term. But yeah, I mean if you think

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Speaker 4: about the structural themes that these companies are taking advantage of,

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Speaker 4: those are long term stories. So you think about the

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Speaker 4: AI trade, you get a bit of you four around

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Speaker 4: that AI trade, and we saw that in the late

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Speaker 4: nineties too with some names around the Internet.

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Speaker 5: But if you pick the right names over the multi

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Speaker 5: year period, you did quite well.

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Speaker 4: It's about avoiding the euphoria and looking at the true fundamentals.

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Speaker 1: Are you tilting It's a dangerous question for investment. Are

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Speaker 1: you tilting active management or passive management? At this time?

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Speaker 5: I think it's both.

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Speaker 4: But in an environment where you're seeing a broadening out,

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Speaker 4: you should see more opportunity in active management. And what

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Speaker 4: you would expect as you move into you know, the

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Speaker 4: next phase. So when we think about a new market

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Speaker 4: cycle or recovery phase of a cycle, that's when smaller

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Speaker 4: caps do really well, that's when international does really well,

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Speaker 4: and in a lot of those places, that's where investors

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Speaker 4: can can really take advantage of active I also see

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Speaker 4: a lot of money going into money markets. We've all

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Speaker 4: seen that, and you know, personally, I think yields start

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Speaker 4: to come down and over time, so there is reinvestment

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Speaker 4: risks there, and I would advise investors to look further

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Speaker 4: out in duration, or to look further out in things

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Speaker 4: like muni's or corporate bonds, where of course active management

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Speaker 4: can serve you well.

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Speaker 6: Basically, don't fight the momentum. You said, we make hay

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Speaker 6: while the sun shines, and we heard from Pater Share

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Speaker 6: over the weekend. Don't fight consensus in December and August,

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Speaker 6: and that seems to be where we are. When does

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Speaker 6: momentum stop working, I.

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Speaker 4: Think you'll see the you know, when all of this

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Speaker 4: tightening starts to find its way into the economy, you'll

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Speaker 4: see the economy roll over a bit.

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Speaker 5: Whether we're going to call.

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Speaker 4: It a recession or just to slow down remains to

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Speaker 4: be seen. But your markets go through these phases, and

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Speaker 4: you know, right now this is a market that is

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Speaker 4: feeling like a recovery trade. It's probably not the recovery trade.

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Speaker 4: It's not the beginning of the next cycle. So you'll

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Speaker 4: probably give back some of this in early twenty twenty

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Speaker 4: four as the economy starts to roll over. But what

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Speaker 4: that means is the FED pivots, and when the FED pivots,

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Speaker 4: that's when the new cycle emerges. So this is a

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Speaker 4: you know, this is still a recovery trade here. We're

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Speaker 4: likely to see you know, a pullback in early twenty

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Speaker 4: twenty four with the economy, but as soon as the

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Speaker 4: FED is you know, shift stands typically over the next

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Speaker 4: couple of years, if not more.

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Speaker 5: You tend to do quite well in markets.

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Speaker 6: So then how do you borrow the rally and not

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Speaker 6: buy it, not buy to own for the long term

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Speaker 6: if you're looking to avoid some of that give back

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Speaker 6: in the beginning of next year.

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Speaker 5: Well, that was part of.

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Speaker 4: What I was talking with Jonathan about with the FOMO story.

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Speaker 5: It's you know, I don't know how tactical investors want

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Speaker 5: to be. I mean, if you you know, we.

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Speaker 4: Use we have tactical strategies that will rotate based on where.

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Speaker 5: You are in the regime.

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Speaker 4: But if you're looking out even from here over the

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Speaker 4: next few years, you should be invested in risk assets.

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Speaker 4: If I use nineteen eighty eighty one as an example,

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Speaker 4: and I think I've said it on this show before,

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Speaker 4: that you've got a nice rally. Once inflation head peaked

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Speaker 4: in March of eighty the market did roll over with

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Speaker 4: the with the recession, you never went through the bottom.

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Speaker 4: And again, if you had invested when inflation had peaked

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Speaker 4: in eighty or when the FED was done tightening at

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Speaker 4: the end of eighty, you were very happy in eighty two,

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Speaker 4: eighty three, eighty four and beyond.

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Speaker 5: So you'll focus on the you know.

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Speaker 4: To me, it's focus on what tends to move markets

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Speaker 4: most and of inflation, and the tightening tends to be

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Speaker 4: very good for ass assets.

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Speaker 7: Brian first in first out.

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Speaker 2: The right hiden cycle in AM started months and months,

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Speaker 2: maybe eight nine months before the tightening cycle started in DM.

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Speaker 2: We saw the rate cutover in Chile on Friday. I

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Speaker 2: think Brazil is going to follow on Wednesday. Others will

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Speaker 2: follow later this year. We've got an easing posture. I'll

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Speaker 2: call it coming out of China, Brian, what are the

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Speaker 2: opportunities in emerging markets at the moment?

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Speaker 4: Yeah, I mean, look, you want to lean into where

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Speaker 4: policymakers are aiding support.

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Speaker 5: To the economy, and this is a very interesting environment.

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Speaker 4: You know, investors didn't love EM for the prior decade,

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Speaker 4: these em struggled to come out of the global financial crisis.

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Speaker 4: To your point, EM leads out more accommodative, and even

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Speaker 4: what you saw in the developed world, what you saw

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Speaker 4: specifically with Japan on Friday, I mean, this is a

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Speaker 4: very different environment where the FED could be contemplating easing

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Speaker 4: by next year and the major developed market central banks

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Speaker 4: are still tightening, which tends to pretend a weaker dollar

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Speaker 4: versus our major trading partners, which we haven't seen in

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Speaker 4: a long time, and that starts to unlock some of

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Speaker 4: that value that exists outside the United States. And you know,

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Speaker 4: investors haven't been there, they've they've avoided it. But it's

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Speaker 4: a better backdrop for international investing than we've seen in

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Speaker 4: a while, because quite frankly, anytime international participated in the

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Speaker 4: last cycle, either the US phrase rates or started a

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Speaker 4: trade war, or we got a pandemic, which ended up

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Speaker 4: abruptly ending any type of participation from international markets.

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Speaker 7: We've been bent a few times, Brian.

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Speaker 2: It's going to catch up as olwise in great co

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Speaker 2: for the so far, Brian Levitte of Investment on the

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Speaker 2: secrety market.

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Speaker 7: Thank you, sir, right now on.

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Speaker 1: What we've done under surveillance, looking here, particularly at the

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Speaker 1: Pacific room. Carl Weinberg Joints. This is chief economist at

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Speaker 1: High Frequency Economics, but far more than that is steeped

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Speaker 1: in financial crisis on an international basis, and his notes

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Speaker 1: on China and Japan have been absolutely definitive. Carl Weinberg,

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Speaker 1: Why hasn't the yen moved abruptly off of the verbiage

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Speaker 1: and action of the Bank of Japan.

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Speaker 8: Hi, Good morning, Tom, Good morning, John, Good morning Lisa.

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Speaker 8: You know the currency isn't going to move on a dime.

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Speaker 8: They only moved on Friday. And this change in policy

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Speaker 8: brings sets off different versus in the economy. It's not

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Speaker 8: just about interest rate differentials, but if you're an investor

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Speaker 8: in Japan and you're looking to deploy marginal funds, you're

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Speaker 8: looking at almost an assured loss on long term jgbs

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Speaker 8: right now. And if you need to have long term

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Speaker 8: assets to offset long term liabilities, you have to look abroad.

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Speaker 8: So to a certain extent, this tightening of monetary conditions,

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Speaker 8: or the allowance of bond yields to rise, whatever you

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Speaker 8: want to call it, drives money abroad and makes the

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Speaker 8: end cheaper, which is not what your traditional interest rate

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Speaker 8: theory says it are to do in the terms of

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Speaker 8: the currency. But I think we have to expect a

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Speaker 8: really mixed pattern for the end moving forward from here.

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Speaker 1: Do you what's your scope and scale on yen move?

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Speaker 1: I mean, I know you're not in the business of

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Speaker 1: FX analysis, but are you looking one fifty en or

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Speaker 1: one thirty two yen?

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Speaker 8: Well, I'm not going to take a long term position

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Speaker 8: on that because I still don't know what the Bank

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Speaker 8: of Japan is up to entirely. I mean, we saw

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Speaker 8: this widening of the band. Was this a technical adjustment

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Speaker 8: just to allow more trading both ways in the bond

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Speaker 8: market and to improve trading conditions for people who have

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Speaker 8: to be in the market, or was it the first

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Speaker 8: step in an actual tightening of monetary conditions. It's not

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Speaker 8: at all clear. As Lisa pointed out, we did the

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Speaker 8: calculations that show that if we had the stock if

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Speaker 8: we had the bond market fully adjust to the increase

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Speaker 8: in the band, that the hit to portfolios economy wide

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Speaker 8: would be about four and a half percent of GDP.

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Speaker 8: That was our math, and right now we have a

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Speaker 8: huge profit on the nike A that if we were

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Speaker 8: to call the end of the fiscal year today and

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Speaker 8: all those bond yield, all that bond y headroom were used,

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Speaker 8: we'd see kind of a wash between gains on equities

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Speaker 8: and losses on bonds. That's a one shot deal, and

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Speaker 8: I think that uetus On is hoping to take advantage

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Speaker 8: of that, hoping that the stock market will continue its

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Speaker 8: rally and offset losses on the bond market and give

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Speaker 8: him this little step toward normalization. But if that's it,

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Speaker 8: if it's half a percentage point and that's it, then

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Speaker 8: there's no impact on the end whatsoever beyond the next

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Speaker 8: couple of weeks, and there's no basis to look for

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Speaker 8: a major move.

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Speaker 6: We were also talking about China and how much willingness

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Speaker 6: there will be by the People's Bank of China and

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Speaker 6: just in general from authorities to support an economy that's

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Speaker 6: flirting with deflation. Outright deflation. Do you think that they

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Speaker 6: can come in with something that can avoid more protracted

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Speaker 6: deflation over a sustained period of time.

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Speaker 8: Well, good morning, Lisa. You know, China's inflation has been

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Speaker 8: not a thing much to talk about for a long time.

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Speaker 8: We've been talking about sub two percent inflation except in

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Speaker 8: times when pork places have been stalling. So we're at

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Speaker 8: the low end of a distribution, but we're not nearly

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Speaker 8: in a deflationary range. The signs of deflation are not

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Speaker 8: there in China. In particular, the monetary aggregates are still growing,

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Speaker 8: although not as fast as they like them to grow,

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Speaker 8: and wages are still going up. So I'm not particularly

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Speaker 8: scared about deflation in China. What concerns me more is

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Speaker 8: that of a deep recession in China that might have

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Speaker 8: impacts on the stability of the regime, on the stability

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Speaker 8: and constancy of economic policy, and that's where I think

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Speaker 8: the big risks are. China, unlike the Western economies, doesn't

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Speaker 8: respond to interest rate cuts, to the normal kinds of

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Speaker 8: consumer spending or depressing policies that we see in the

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Speaker 8: Western world, because most of their growth is driven by

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Speaker 8: investment and not by consumer spending, and most of that

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Speaker 8: investment is planned by the state. The problem with their

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Speaker 8: growth engine is that they've run out of really lucrative

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Speaker 8: investment projects and that's causing their growth rate to slow

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Speaker 8: down on a secular basis, and that's what they have

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Speaker 8: to try to offset by switching, by switching the source

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Speaker 8: of growth from investment to consumption, and that requires a

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Speaker 8: careful mix of policies.

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Speaker 6: So just quickly, Carl, how likely do you think it

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Speaker 6: is that there is some sort of deeper recession within China?

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Speaker 8: Well, I think that a recession is probably not the

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Speaker 8: right word. Would be what we would call a growth recession,

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Speaker 8: where growth doesn't occur fast enough to absorb people who

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Speaker 8: still want to come from the farms into the city

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Speaker 8: and to generate the increases in income that people want

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Speaker 8: to see. I think that's the scenario we're looking at

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Speaker 8: in China. Sub par of growth, so we'll see growth

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Speaker 8: this year of maybe one or two or three percent

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Speaker 8: is our forecast about three percent, but that's way short

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Speaker 8: of what they want, which is in the five to

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Speaker 8: six percent range, and that's the problem for policy makers.

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Speaker 7: Cal thank you for your insight. It's always valuable.

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Speaker 2: Can't wipe back there a high frequency economics on China

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Speaker 2: and what's developing at the moment.

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Speaker 1: Right now, we will go to the red bars. They're

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Speaker 1: in a New York Times poll today, which is front

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Speaker 1: and center as we stagger into August of twenty twenty three.

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Speaker 1: It is an August of a Republican debate. Wendy Schiller

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Speaker 1: joins this non director of Tomins Center for American Politics

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Speaker 1: Policy at Brown University. She's familiar with the electoral process.

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Speaker 1: When have you ever seen anything like this? We got

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Speaker 1: a guy with various legal challenges completely dominating a party

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Speaker 1: fifty four percent. Trump, the governor of Florida is seventeen percent,

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Speaker 1: and everybody's barely a heartbeat as well. Does Trump own

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Speaker 1: the party?

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Speaker 9: It looks like he owns the party right now, and

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Speaker 9: he's being treated like the incumbent president.

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Speaker 10: You know, how dare you challenge him?

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Speaker 9: I think you know, if you're the opposition, the takeaway

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Speaker 9: from this poll is.

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Speaker 10: You have to go after Trump directly.

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Speaker 9: I think they've all resisted it, particularly DeSantis. He sort

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Speaker 9: of runs around it, but he's got to go right

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Speaker 9: at Trump.

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Speaker 10: Some of the comments that they've solicited in the poll

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Speaker 10: after their sort of standard answers or Trump's a fighter.

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Speaker 9: Trump's a fighter, that's exactly what they want to see

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Speaker 9: from the other candidates.

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Speaker 10: Are you willing to do what this guy does?

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Speaker 9: And the other warning sign I think for the party

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Speaker 9: as a whole is that there be seems to be

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Speaker 9: a bunch of Republicans that are willing to throw out

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Speaker 9: the rules. So if Trump loses a few primaries or

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Speaker 9: it's really close and he claims they're rigged, he can

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Speaker 9: undermine the entire Republican Party nomination system. So I think

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Speaker 9: that the comments are really important to look at in

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Speaker 9: this poll.

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Speaker 1: Longer and far away, Jimmy Carter, the governor of Georgia,

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Speaker 1: walked down the stairs of an airplane in Rochester, New York,

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Speaker 1: and shook Michka Stanza's hand, and we all said, who

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Speaker 1: is this guy? Who's the Jimmy Carter this time around?

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Speaker 1: Of the two percent, three percent, Pats Scott, Hayley, Ramaswami Christy,

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Speaker 1: who's the Jimmy Carter of the moment right now?

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Speaker 10: I think it's Tim Scott.

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Speaker 9: I think that Tim Scott has a lot of equalities

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Speaker 9: that would appeal to the base if they could get

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Speaker 9: themselves out of a sort of culture personality of Trump,

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Speaker 9: and you know, out of the sort of avenging his

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Speaker 9: loss in twenty twenty. I think he has a lot

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Speaker 9: of appeal, particularly among evangelicals or conservative Christian voters in

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Speaker 9: the South, and can keel away theoretically some portion of

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Speaker 9: that African American base, just as George Bush sort appealed

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Speaker 9: away considered abortion of Blatino base, but also a little

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Speaker 9: bit of the African American base. And I think that's

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Speaker 9: someone you should pay attention to.

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Speaker 10: I think you the political observer should pay attention to.

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Speaker 9: And a Trump tim Scott ticket would be a very

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Speaker 9: interesting dilemma I think for the dempart party.

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Speaker 6: You said that one of the things that candidates have

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Speaker 6: to do is go straight after the former president Trump,

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Speaker 6: and yet Will Heard, formerly of Texas representative, came out

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Speaker 6: and actually did that in Iowa and he was booed

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Speaker 6: off the stage. What makes you think that it will

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Speaker 6: be received by the voters.

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Speaker 9: Well, the question is who's going to these rallies, you know,

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Speaker 9: who's actually going to vote six months from now, And

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Speaker 9: do you set the stage like Chris Christy's trying to

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Speaker 9: do in some ways of saying I can fight just

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Speaker 9: as hard for.

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Speaker 10: What you believe in. And I'm willing to take your boots.

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Speaker 10: I mean, I'm willing to take anything you throw at me.

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Speaker 10: But I'm going to stay in the race.

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Speaker 9: And I think that's, you know, if it's possible for

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Speaker 9: them to do in terms of financial contributions. The other

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Speaker 9: problem with this poll for DeSantis is that it will

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Speaker 9: scare donors right that this guy can't get traction.

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Speaker 10: What do we do?

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Speaker 9: And the Republicans have to be careful what the Senate

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Speaker 9: in twenty four the House. This helps right, generating Trump

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Speaker 9: fans going out the door for calling as good in

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Speaker 9: Jerrymander districts for the House Republicans.

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Speaker 10: But for the Senate they lost.

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Speaker 9: In twenty twenty two mainly because of Trump endorsed candidates.

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Speaker 9: The same fate awaits them in twenty twenty four. So

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Speaker 9: this is going to send I think, some shutters through

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Speaker 9: the entire Republican Party.

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Speaker 6: Today, We're going to get some disclosures from the former

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Speaker 6: President Trump's campaign in terms of the Political Action Committee

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Speaker 6: and how some of the money has been spent. The

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Speaker 6: expectation is that millions, tens of millions of dollars have

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Speaker 6: been spent on legal bills for Trump as.

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Speaker 7: Well as his associates.

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Speaker 6: Will this be a problem for the donors or has

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Speaker 6: this been sort of understood that this is sort of

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Speaker 6: the fight that they're trying to get behind as part

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Speaker 6: of the fight that he is launching for president.

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Speaker 9: Lisa, This is a sort of a watching technical question

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Speaker 9: for people who care about campaign rules. But Trump has

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Speaker 9: made no bones about so listening money for him for

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Speaker 9: his campaign, for his legal defense. It is all about him.

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Speaker 9: It is not about the Republican Party. It is about him.

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Speaker 9: So nobody will be surprised, and the donors, particularly small donors,

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Speaker 9: don't seem to care. They're in it for him. He's

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Speaker 9: their team. They're not defecting from him. The problem is,

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Speaker 9: you know, the majority of voters or the people who

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Speaker 9: can win an election for you, have defected, particularly Independence,

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Speaker 9: but some slice of the Republican Party, and that for

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Speaker 9: the general election is really a tremendous problem, you know,

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Speaker 9: facing the Republican Party going to twenty four. So the

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Speaker 9: voters in the Republican Party don't care how Trump spends

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Speaker 9: the money.

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Speaker 10: They're giving it to support him.

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Speaker 2: Can we talk about the voters in the Democratic Party

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Speaker 2: and how they might view the president's handling of a

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Speaker 2: situation with his son at the moment when there are

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Speaker 2: plenty of valligations over the last year about his business dealings.

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Speaker 7: What have you heard of on that recently?

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Speaker 9: Well, I mean, I think Democrats face an enthusiasm gap.

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Speaker 9: We've seen that Biden's getting a little bit better, you know, school,

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Speaker 9: We're even going a little bit higher. You know, things

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Speaker 9: are better than people thought they might be, particularly with

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Speaker 9: the economy, and some of the policies that he enacted

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Speaker 9: are starting to show to voters. So he's got a

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Speaker 9: little bit of momentum. He said flat out he wouldn't

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Speaker 9: pardon his own son. This deal at fell apart a

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Speaker 9: plea deal. I think in the end, politically that's an

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Speaker 9: advantage for Joe Biden. I think people were skeptical of

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Speaker 9: that deal and it can be a liability for him

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Speaker 9: a year from now among Democratic voters who don't get

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Speaker 9: the same deal from prosecutors.

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Speaker 10: So I think in how this plays out for Hunter.

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Speaker 9: Biden, if there's any punishment that people view as legitimate,

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Speaker 9: I think that actually helps Joe Biden personally obviously not,

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Speaker 9: but politically I think he does Wendy.

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Speaker 7: Shela of Brand University. Wendy, thank you, But.

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Speaker 1: We need to talk to Doug Cass because he is

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Speaker 1: a conduit to Kate Upton. And the real question here

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Speaker 1: is does missus Verlander does she decide that we need

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Speaker 1: to stay in New York for their daughter's well being

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Speaker 1: and schooling. Doug cast is Kate and the one that

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Speaker 1: will decide whether mister Verlander goes in the Mets to

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Speaker 1: the dreaded New York Yankees.

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Speaker 3: We do need some help these Speaking of pitches these days,

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Speaker 3: I feel like Louis Severino. He had that standing year

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Speaker 3: in twenty twenty two, I think is one loss record

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Speaker 3: was seven and three, Aaron run average of three ten

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Speaker 3: this year is two and five with an ERA seven fifty.

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Speaker 3: I feel that way being bearish on the market what

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Speaker 3: I see her.

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Speaker 1: Doug and you and I have had such a joy

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Speaker 1: talking the history of the game. I find it fascinating

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Speaker 1: how the end of July is maybe the tension of

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Speaker 1: what we felt the first week of September was not

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Speaker 1: too long ago. Do you think the new expanded wildcard

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Speaker 1: has been good for the sport?

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Speaker 3: Oh gosh, I don't know. It seems it's when all

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Speaker 3: the trades o car at the end of July, because

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Speaker 3: there is finally resolution of where you stand.

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Speaker 11: You know.

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Speaker 3: Stevie Cohen's a very good example his move last week

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Speaker 3: with his pitcher.

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Speaker 1: I mean, it's gonna be interesting to see. Just one

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Speaker 1: more question on baseballs. What are the What do the

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Speaker 1: Yankees do? I mean, I don't get it.

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Speaker 2: I mean.

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Speaker 3: Nope, I have to talk both about the Yankees and

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Speaker 3: being wrong footed on the market's.

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Speaker 1: Let's make this easier. Does the GM go, mister Cashman,

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Speaker 1: does the GM go?

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Speaker 3: I said to you last year, I thought he should go.

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Speaker 3: You know, okay, you know I was palsed with his

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Speaker 3: dad and who passed away unfortunately, and Brian's a good man.

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Speaker 3: But maybe it's time for a change.

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Speaker 1: Yeah, the the your agent says, okay, it's time now

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Speaker 1: to talk to market. Doug cass you've been wrong footed

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Speaker 1: on the market. As you put it, We've all been there.

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Speaker 1: We all have a humility of how hard this is.

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Speaker 1: How do you go about identifying that this is perhaps

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Speaker 1: a true bull market?

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Speaker 3: Well, as I said, there's nothing more humbling than being

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Speaker 3: on the wrong side of a trending market, especially one

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Speaker 3: if one approaches the investment businesses. I do with intensity,

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Speaker 3: as I do with the New York Yankees. So I'm

441
00:22:07,040 --> 00:22:10,960
Speaker 3: over two this year with a pretty high ra and

442
00:22:11,040 --> 00:22:15,120
Speaker 3: that's been the case of the last couple of months. Look,

443
00:22:15,320 --> 00:22:18,720
Speaker 3: two quotes come in mind. Come to mind. The first

444
00:22:18,800 --> 00:22:21,720
Speaker 3: one I think was from Emerson. He said, in life,

445
00:22:21,720 --> 00:22:24,399
Speaker 3: our greatest glory is not never failing, but in rising

446
00:22:24,480 --> 00:22:28,879
Speaker 3: up every time we fail. I did a terrible job

447
00:22:29,119 --> 00:22:31,399
Speaker 3: in well. I did a good job in expecting a

448
00:22:31,520 --> 00:22:36,919
Speaker 3: strong first half, unlike the consensus, and we were positioned

449
00:22:36,960 --> 00:22:39,119
Speaker 3: for that. But I did not expect the rally of

450
00:22:39,119 --> 00:22:41,800
Speaker 3: the last three months, on top of the ten percent

451
00:22:41,880 --> 00:22:46,119
Speaker 3: rally ahead of it, the good I think. There's another

452
00:22:46,200 --> 00:22:50,159
Speaker 3: quote Howard Marks made in taking the Temperature of the market,

453
00:22:50,200 --> 00:22:53,080
Speaker 3: you know, one of his great oak Tree commentaries last month.

454
00:22:53,440 --> 00:22:56,919
Speaker 3: He said, remember that in extreme times, the secret to

455
00:22:56,960 --> 00:23:03,360
Speaker 3: making money lies in being contrary, not a conformist. And

456
00:23:04,080 --> 00:23:07,960
Speaker 3: to my credit, you know, we think that risk control

457
00:23:08,040 --> 00:23:11,480
Speaker 3: is an essential part in managing money, especially when one

458
00:23:11,520 --> 00:23:14,720
Speaker 3: is as wrong footed as I have been. Indeed, in

459
00:23:14,760 --> 00:23:17,240
Speaker 3: the remarkable advance of the last couple of months, we

460
00:23:17,359 --> 00:23:19,920
Speaker 3: have been that short, but we didn't lose net money

461
00:23:19,920 --> 00:23:20,280
Speaker 3: in the life.

462
00:23:20,359 --> 00:23:21,879
Speaker 1: Give me a number here. I mean, you know, I

463
00:23:21,920 --> 00:23:24,320
Speaker 1: don't like to talk numbers with people a lot, but

464
00:23:24,840 --> 00:23:27,120
Speaker 1: when you say you've eenpowdered in the market, I would

465
00:23:27,160 --> 00:23:31,240
Speaker 1: suggest with your risk management, it's not as painful as

466
00:23:31,280 --> 00:23:34,040
Speaker 1: some people. Are you down like single digits or is

467
00:23:34,080 --> 00:23:36,000
Speaker 1: it double digit agony?

468
00:23:36,720 --> 00:23:40,280
Speaker 3: We're up for the year, and as we were last

469
00:23:40,320 --> 00:23:42,919
Speaker 3: year when everyone was suffering, and as I said in

470
00:23:42,960 --> 00:23:46,439
Speaker 3: the rally of the last three months, we're even. So

471
00:23:47,000 --> 00:23:49,439
Speaker 3: we're not even on the year, we're even during that period,

472
00:23:49,480 --> 00:23:53,560
Speaker 3: which is a good example of the importance which a

473
00:23:53,560 --> 00:23:56,119
Speaker 3: lot of people don't discuss, even you guys sometimes as

474
00:23:56,240 --> 00:24:01,200
Speaker 3: risk control. I know Alison Schrager did a wonderful conversation

475
00:24:01,320 --> 00:24:04,360
Speaker 3: in the prior segment about reward taking, you know, controlling

476
00:24:04,560 --> 00:24:10,840
Speaker 3: reward versus risk, and a lot more, a lot more

477
00:24:10,880 --> 00:24:12,679
Speaker 3: discussion should be made about that.

478
00:24:13,119 --> 00:24:15,679
Speaker 12: So with hindsight, Doug, what do you think you and

479
00:24:15,720 --> 00:24:18,240
Speaker 12: your team got wrong over the last three months.

480
00:24:19,600 --> 00:24:27,000
Speaker 3: I think what happened is I underestimated the animal spirits

481
00:24:28,119 --> 00:24:32,280
Speaker 3: and the fear of missing out in a market that

482
00:24:32,320 --> 00:24:37,760
Speaker 3: has changed structurally and now is dominated by products and

483
00:24:38,000 --> 00:24:50,399
Speaker 3: quantitative products and strategies that utilize volatility more than ever

484
00:24:50,480 --> 00:24:57,760
Speaker 3: before and price momentum, and these strategies know everything about

485
00:24:57,840 --> 00:25:02,480
Speaker 3: price and nothing about that value. And it's in periods

486
00:25:02,560 --> 00:25:07,399
Speaker 3: like this, I think that's what bowls like myself and

487
00:25:07,480 --> 00:25:09,919
Speaker 3: Mike Wilsons misunderstood.

488
00:25:11,240 --> 00:25:14,240
Speaker 12: What have you taken away, if anything, from this earnings

489
00:25:14,520 --> 00:25:17,000
Speaker 12: period that we're kind of just macanimical love right here.

490
00:25:19,200 --> 00:25:24,120
Speaker 3: Look, I see, I see basically earnings as they always

491
00:25:24,160 --> 00:25:30,040
Speaker 3: are in seventy percent of the cases, slightly better than guidance,

492
00:25:30,119 --> 00:25:35,080
Speaker 3: which is you know, by design by investor relations departments.

493
00:25:35,280 --> 00:25:39,160
Speaker 3: And also they're slightly higher than revised lower of six

494
00:25:39,200 --> 00:25:44,840
Speaker 3: months ago earnings expectations. But we see the emergence of

495
00:25:44,920 --> 00:25:47,800
Speaker 3: a number of concerns, not the least of which is

496
00:25:48,440 --> 00:25:52,800
Speaker 3: sluggish growth and prickly inflation what I call slugflation as

497
00:25:52,880 --> 00:25:58,240
Speaker 3: opposed to stagflation, and you're seeing it now in agricultural commodities.

498
00:25:58,359 --> 00:26:02,320
Speaker 3: The CRB foodstuck Foodstock Index at a fifty two week high.

499
00:26:02,760 --> 00:26:08,240
Speaker 3: Look at the price of eggs, bacon, of urea, of ammonium,

500
00:26:08,880 --> 00:26:15,040
Speaker 3: and obviously of course oil, which is now up I

501
00:26:15,080 --> 00:26:18,840
Speaker 3: believe has its first five week windstreak in a year

502
00:26:18,840 --> 00:26:21,080
Speaker 3: and a half or two years and now is above

503
00:26:21,119 --> 00:26:26,040
Speaker 3: it's fifty week moving average. These are all I looked at.

504
00:26:26,080 --> 00:26:29,320
Speaker 3: Look at orange juice, orange juice, which we drink. You

505
00:26:29,400 --> 00:26:33,480
Speaker 3: drink tang ony orange juice, but normal people Tom drink

506
00:26:33,560 --> 00:26:36,879
Speaker 3: orange juice. It's up twenty four in the month of July,

507
00:26:37,119 --> 00:26:41,560
Speaker 3: and people look, the bond market has gotten the clue.

508
00:26:41,720 --> 00:26:45,440
Speaker 3: The ten year is up twelve BIPs in the last

509
00:26:45,480 --> 00:26:48,800
Speaker 3: week up and the three or four BIPs today, and

510
00:26:48,840 --> 00:26:51,800
Speaker 3: they figured it out, but the market hasn't because in

511
00:26:51,840 --> 00:26:56,280
Speaker 3: my view, market structure animal spirits and fomo and the

512
00:26:56,320 --> 00:26:58,800
Speaker 3: other thing is the other thing is that what we've

513
00:26:58,840 --> 00:27:03,440
Speaker 3: also realized is that the US economy has grown far

514
00:27:03,560 --> 00:27:07,840
Speaker 3: less interest rate sensitive than the consensus or a monetary policies,

515
00:27:08,359 --> 00:27:13,959
Speaker 3: policy authorities suspect. So fundamental to my and the cornerstone

516
00:27:13,960 --> 00:27:16,000
Speaker 3: of my various views that we have higher for longer

517
00:27:16,040 --> 00:27:19,600
Speaker 3: policy and our rates are going to remain high, and

518
00:27:19,720 --> 00:27:24,320
Speaker 3: we have as a result, a paper thin equity risk premium,

519
00:27:24,400 --> 00:27:28,840
Speaker 3: which portends valuation risk, reduces the margin of safety, expands

520
00:27:28,840 --> 00:27:31,719
Speaker 3: the downside risk for stocks relative to the f side reward,

521
00:27:31,760 --> 00:27:34,960
Speaker 3: and extends the advantage of credit credit over equity.

522
00:27:35,480 --> 00:27:39,120
Speaker 1: Yeah, very quickly here, Doug. What everyone knows is there's

523
00:27:39,160 --> 00:27:42,360
Speaker 1: a massive overweight on tech. How does that end?

524
00:27:44,240 --> 00:27:48,639
Speaker 3: Well, it ends barely, you know, I facetiously said in

525
00:27:48,760 --> 00:27:51,720
Speaker 3: a column I wrote on Real Money pro that I

526
00:27:51,760 --> 00:27:55,040
Speaker 3: sent to you that AI is for now an elegant

527
00:27:55,080 --> 00:28:00,800
Speaker 3: farlow trick with few accumulating near term revene, new benefits,

528
00:28:00,800 --> 00:28:04,720
Speaker 3: and a lot of increased costs. We will recall the

529
00:28:04,760 --> 00:28:08,200
Speaker 3: Internet created the dot com boom, but that didn't keep

530
00:28:09,119 --> 00:28:12,680
Speaker 3: the NaSTA going down eighty three percent in the next

531
00:28:12,680 --> 00:28:17,720
Speaker 3: three years beginning in late two thousand. So I think

532
00:28:18,560 --> 00:28:24,360
Speaker 3: that the greatest overval evaluation in the market is technology.

533
00:28:25,200 --> 00:28:30,920
Speaker 3: You have to remember, remember we were buying Amazon, Alphabet

534
00:28:32,520 --> 00:28:35,359
Speaker 3: Facebook at the end of last year. Remember the tax selling.

535
00:28:35,640 --> 00:28:38,080
Speaker 3: How these doctors are being thrown out. No one wanted them.

536
00:28:39,120 --> 00:28:41,959
Speaker 3: You know, this is the only business where people are

537
00:28:42,000 --> 00:28:46,800
Speaker 3: confident in view and can be terribly wrong and come

538
00:28:46,840 --> 00:28:49,960
Speaker 3: back and our confident view again. I mean, the bulls

539
00:28:50,000 --> 00:28:52,000
Speaker 3: today are much like the bulls at the end of

540
00:28:52,480 --> 00:28:57,120
Speaker 3: twenty twenty were bearished in October twenty.

541
00:28:57,920 --> 00:29:01,120
Speaker 1: It reminds you of the Yankees in Tampa and February.

542
00:29:01,160 --> 00:29:04,680
Speaker 1: Dougcash thank you so much, greatly appreciate that with Seabury's

543
00:29:05,000 --> 00:29:13,200
Speaker 1: partners right now and this is a joy after what

544
00:29:13,240 --> 00:29:15,520
Speaker 1: we saw in Belgium to bring in Zach Brown. He's

545
00:29:15,520 --> 00:29:18,680
Speaker 1: the chief executive officer of McLaren Racing and to give

546
00:29:18,680 --> 00:29:20,760
Speaker 1: you an idea of the breadth, the scope to scale

547
00:29:20,800 --> 00:29:23,239
Speaker 1: of his history with racing. He actually was in the

548
00:29:23,280 --> 00:29:26,640
Speaker 1: cars doing it at a very young age. And he's

549
00:29:26,640 --> 00:29:30,760
Speaker 1: someone that also has a great amount of Americana, including

550
00:29:30,760 --> 00:29:35,120
Speaker 1: a precious letter from George Washington to someone arguing about

551
00:29:35,200 --> 00:29:39,640
Speaker 1: the travesty of Benedict Arnold. This is a renaissance man,

552
00:29:40,480 --> 00:29:43,440
Speaker 1: John running things at the August You told me McLaren

553
00:29:43,520 --> 00:29:44,040
Speaker 1: was special.

554
00:29:44,240 --> 00:29:46,960
Speaker 2: It's very special, and it's a special opportunity to catch

555
00:29:47,000 --> 00:29:49,600
Speaker 2: up with Zach Brown of McLaren Racing. Zach water for

556
00:29:49,720 --> 00:29:52,560
Speaker 2: to catch up with you, sir. A difficult week compared

557
00:29:52,560 --> 00:29:55,560
Speaker 2: to the success in Hungary and at Silverston in the

558
00:29:55,640 --> 00:29:58,920
Speaker 2: UK as well. Zach, can you catch these red bulls

559
00:29:58,960 --> 00:29:59,960
Speaker 2: this year? Can you get away?

560
00:30:01,080 --> 00:30:03,880
Speaker 11: Well, we're trying, We're trying. We need them to blink.

561
00:30:04,880 --> 00:30:07,280
Speaker 11: But you know there's a lot of racing left to go.

562
00:30:07,360 --> 00:30:11,000
Speaker 11: We're getting closer. Unfortunately, no one's close enough yet, but

563
00:30:11,520 --> 00:30:15,400
Speaker 11: I would think a win is possible in the second

564
00:30:15,400 --> 00:30:16,920
Speaker 11: half of the season. It's certainly our goal.

565
00:30:17,080 --> 00:30:18,560
Speaker 2: What is it about the setup of the card, the

566
00:30:18,600 --> 00:30:22,000
Speaker 2: developments that you've made over the last several races, SAG

567
00:30:22,440 --> 00:30:24,680
Speaker 2: where you think you've made progress, and what kind of

568
00:30:24,720 --> 00:30:26,440
Speaker 2: races on the calendar do you think we can see

569
00:30:26,440 --> 00:30:27,320
Speaker 2: that a little bit more.

570
00:30:28,720 --> 00:30:32,120
Speaker 11: Aerodynamics? You know, it's very much an aerodynamics game. Of course,

571
00:30:32,160 --> 00:30:34,080
Speaker 11: you have to have two great drivers, which we have,

572
00:30:34,200 --> 00:30:36,720
Speaker 11: and you have to have great pit stops and reliability.

573
00:30:36,880 --> 00:30:39,120
Speaker 11: But it is an arrow game and that is where

574
00:30:39,160 --> 00:30:43,480
Speaker 11: we've made our biggest gains. We started that in Austria,

575
00:30:43,960 --> 00:30:46,160
Speaker 11: I think some of the quicker tracks, so I would

576
00:30:46,240 --> 00:30:51,360
Speaker 11: think austin Japan we should be strong. Abbi Dabi, we

577
00:30:51,360 --> 00:30:54,520
Speaker 11: should be strong. It's the slow corners we don't like,

578
00:30:54,560 --> 00:30:57,160
Speaker 11: but who likes going slow anyway? But that's where we

579
00:30:57,200 --> 00:31:01,120
Speaker 11: need to improve and we've got some more developments coming,

580
00:31:01,200 --> 00:31:03,480
Speaker 11: but so does everyone in Formula one, so it is

581
00:31:03,600 --> 00:31:05,480
Speaker 11: definitely a development race.

582
00:31:05,880 --> 00:31:10,000
Speaker 1: Zach West every minute of Belgium, and somewhere in the

583
00:31:10,080 --> 00:31:13,080
Speaker 1: vicinity of lap thirty one or thirty three, there was

584
00:31:13,200 --> 00:31:16,640
Speaker 1: Zach Brown talking to a twenty two year old kid

585
00:31:16,760 --> 00:31:20,680
Speaker 1: quietly who had gone out of the race early as well.

586
00:31:21,080 --> 00:31:25,440
Speaker 1: Oscar Piazzi is twenty two. At fourteen, he was basically

587
00:31:25,480 --> 00:31:29,360
Speaker 1: a professional. That's all these kids do is drive, drive, drive.

588
00:31:29,880 --> 00:31:33,880
Speaker 1: What were you saying to Oscar Piastree at lap thirty

589
00:31:33,920 --> 00:31:36,600
Speaker 1: three there after he bombed out of the Belgium race.

590
00:31:37,680 --> 00:31:40,000
Speaker 11: Yeah, I told him a couple of things. One, don't

591
00:31:40,000 --> 00:31:42,480
Speaker 11: worry about it. You know, he had such a great Saturdays,

592
00:31:42,520 --> 00:31:46,240
Speaker 11: having a great season. So these guys feel like they

593
00:31:46,560 --> 00:31:49,520
Speaker 11: not only let themselves down, but the team down, and

594
00:31:49,560 --> 00:31:51,280
Speaker 11: so they need to know we're all in this together,

595
00:31:51,320 --> 00:31:53,680
Speaker 11: and we win together, we lose together. And then also

596
00:31:53,720 --> 00:31:56,240
Speaker 11: we had a pretty difficult race with our arrows set up,

597
00:31:56,400 --> 00:31:59,800
Speaker 11: so at that particular moment, Lando was going backwards until

598
00:31:59,800 --> 00:32:02,640
Speaker 11: we kind of strategically got him in a better place.

599
00:32:02,680 --> 00:32:05,040
Speaker 11: So I also told him he probably wasn't missing having

600
00:32:05,080 --> 00:32:07,720
Speaker 11: too much fun at the moment, just being a little

601
00:32:07,720 --> 00:32:10,360
Speaker 11: bit light hearted, and you know, these things happen. He's

602
00:32:10,400 --> 00:32:12,520
Speaker 11: done a fast, fantastic job all year.

603
00:32:12,680 --> 00:32:15,880
Speaker 1: Explain to our American audience, including a dummy like me,

604
00:32:16,160 --> 00:32:19,400
Speaker 1: what did Bruce McLaren give you? What does the McLaren

605
00:32:19,480 --> 00:32:22,920
Speaker 1: name mean to John Ferrell and auto racing.

606
00:32:23,320 --> 00:32:26,600
Speaker 5: It I mean, he was a legend.

607
00:32:26,600 --> 00:32:30,680
Speaker 11: He was all about innovation, he was a driver, he

608
00:32:30,040 --> 00:32:31,480
Speaker 11: was a designer.

609
00:32:31,720 --> 00:32:33,240
Speaker 5: So you know, we're very.

610
00:32:33,080 --> 00:32:38,000
Speaker 11: Proud to wear the Papaya colors, which was Bruce's colors

611
00:32:38,040 --> 00:32:39,800
Speaker 11: back in the day, and that was actually done so

612
00:32:39,840 --> 00:32:42,720
Speaker 11: he could have more standout on television back in the

613
00:32:42,720 --> 00:32:45,880
Speaker 11: black and white days. And so he's an inspiration to

614
00:32:46,240 --> 00:32:48,400
Speaker 11: all of us. And he was a racer, he was

615
00:32:48,440 --> 00:32:51,800
Speaker 11: an innovator, he was a designer and of course a

616
00:32:51,840 --> 00:32:54,880
Speaker 11: team owner. So we're the second most successful team in

617
00:32:54,880 --> 00:32:57,520
Speaker 11: the history of Formula One and something that we're very

618
00:32:57,880 --> 00:32:59,720
Speaker 11: very proud of. And we were also the only team

619
00:32:59,760 --> 00:33:02,400
Speaker 11: to one what's called the Triple Crown, which is the

620
00:33:02,440 --> 00:33:05,000
Speaker 11: twenty four Hours of Lama and the eighty five hundred

621
00:33:05,160 --> 00:33:07,200
Speaker 11: and of course the Monaco Grand Prix, and it's something

622
00:33:07,240 --> 00:33:09,040
Speaker 11: that we can hope to do again in the future.

623
00:33:09,560 --> 00:33:12,520
Speaker 6: Zach, as you try to plow further into the US,

624
00:33:12,600 --> 00:33:14,360
Speaker 6: is this something that Formula one has tried to do?

625
00:33:14,480 --> 00:33:16,760
Speaker 6: Is I'm learning and I'm one of the people who

626
00:33:16,800 --> 00:33:21,200
Speaker 6: are becoming the adopters here where is the distinction the

627
00:33:21,320 --> 00:33:25,400
Speaker 6: overlap between Formula One and NASCAR. How competitive is that

628
00:33:25,520 --> 00:33:28,080
Speaker 6: at a time when NASCAR already has such a cult

629
00:33:28,120 --> 00:33:31,560
Speaker 6: following in the US and Formula One has a very

630
00:33:31,600 --> 00:33:34,680
Speaker 6: different type of energy coming from Europe.

631
00:33:36,040 --> 00:33:39,560
Speaker 11: Yeah, I think they're complementary. They're different. You know, they're

632
00:33:39,920 --> 00:33:46,040
Speaker 11: probably have almost the same similarities between baseball and basketball

633
00:33:46,320 --> 00:33:50,280
Speaker 11: because they're radically different as far as the type of racing,

634
00:33:50,480 --> 00:33:55,240
Speaker 11: so a little bit of a different demographic and psychographic. Obviously,

635
00:33:55,240 --> 00:34:00,760
Speaker 11: Formula one is very global, where NASCAR's domestic sport. But

636
00:34:00,880 --> 00:34:04,960
Speaker 11: I think all motor sports help each other, so I

637
00:34:05,000 --> 00:34:09,360
Speaker 11: think there's a room for both, including IndyCar, which is

638
00:34:09,440 --> 00:34:12,480
Speaker 11: much more like Formula One. It's just awesome to see

639
00:34:13,080 --> 00:34:16,480
Speaker 11: how big Formula One has got in America as quickly

640
00:34:16,840 --> 00:34:20,520
Speaker 11: as it has, and I think Netflix obviously has a

641
00:34:20,560 --> 00:34:23,120
Speaker 11: lot to do with that, as does the Austin Grand Prix,

642
00:34:23,560 --> 00:34:27,920
Speaker 11: Miami Grand Prix, and the soon to come Vegas Grand Prix,

643
00:34:27,960 --> 00:34:29,360
Speaker 11: which is going to be off the charts.

644
00:34:29,440 --> 00:34:32,400
Speaker 6: As a lot of purists probably feel that the Netflix

645
00:34:32,440 --> 00:34:35,440
Speaker 6: series perhaps inaccurately reflects some of the dropmor the lack

646
00:34:35,480 --> 00:34:38,359
Speaker 6: there of, as Max Verstoppin, as John was pointing out

647
00:34:38,480 --> 00:34:41,120
Speaker 6: has noted as an American who has been in a

648
00:34:41,160 --> 00:34:44,680
Speaker 6: sport that really has been dominated by European presence, how

649
00:34:44,680 --> 00:34:47,359
Speaker 6: does the sport have to change to really become as

650
00:34:47,440 --> 00:34:48,760
Speaker 6: popular in the US.

651
00:34:49,719 --> 00:34:51,440
Speaker 11: Well, I think it is changing, and a lot of

652
00:34:51,560 --> 00:34:54,600
Speaker 11: credit to Liberty who acquired the sport, you know, five

653
00:34:54,680 --> 00:34:57,200
Speaker 11: six years ago. I think Netflix is a great example

654
00:34:57,440 --> 00:35:02,200
Speaker 11: that would have probably not happened with previous ownership because

655
00:35:02,440 --> 00:35:06,680
Speaker 11: the industry, the sport would not have wanted the cameras

656
00:35:06,719 --> 00:35:08,960
Speaker 11: on the inside of the sport. It was kind of

657
00:35:09,000 --> 00:35:12,160
Speaker 11: a wasn't an inclusive sport. And I think now we're

658
00:35:12,280 --> 00:35:16,280
Speaker 11: very digitally savvy. We've embraced the fan. We're all about

659
00:35:16,320 --> 00:35:19,160
Speaker 11: the fan and things like Netflix where we're showing people

660
00:35:19,200 --> 00:35:22,040
Speaker 11: about our great sport. And I've seen some of those comments,

661
00:35:22,080 --> 00:35:24,799
Speaker 11: which they are a little disappointing because I think they're

662
00:35:24,840 --> 00:35:29,960
Speaker 11: a bit inaccurate in the sense of we're capturing our

663
00:35:30,000 --> 00:35:33,680
Speaker 11: great sport. When Netflix puts together the content, well sometimes

664
00:35:33,719 --> 00:35:36,360
Speaker 11: pick and poll because they're trying to illustrate a point.

665
00:35:36,480 --> 00:35:40,279
Speaker 11: So we as the racers, we'll see, for instance, oh

666
00:35:40,320 --> 00:35:43,080
Speaker 11: that was a clip of our pit crew from Monaco.

667
00:35:43,160 --> 00:35:45,560
Speaker 11: But they're showing US in Italy, but it kind of

668
00:35:45,600 --> 00:35:48,160
Speaker 11: doesn't change the narrative. So I think we're a little

669
00:35:48,200 --> 00:35:51,240
Speaker 11: bit too close to it. Mdtrus Formula ones all about

670
00:35:51,280 --> 00:35:53,560
Speaker 11: the details. We get a little bit wound up when

671
00:35:53,600 --> 00:35:55,080
Speaker 11: the details a little bit inaccurate.

672
00:35:55,120 --> 00:35:57,760
Speaker 2: E zact, tell me how the commercial agreements have developed

673
00:35:58,000 --> 00:36:01,000
Speaker 2: over the last couple of years. Let's just say, for example,

674
00:36:01,000 --> 00:36:03,000
Speaker 2: we wanted to put Bloomberg surveillance on the side of

675
00:36:03,320 --> 00:36:04,040
Speaker 2: Lando's car.

676
00:36:04,400 --> 00:36:07,040
Speaker 7: Let's just say, let's just say, what's the cost of

677
00:36:07,120 --> 00:36:07,800
Speaker 7: that now.

678
00:36:07,719 --> 00:36:10,920
Speaker 2: Competuating us several years ago, Zach, how much has the

679
00:36:10,920 --> 00:36:11,880
Speaker 2: price of that increased.

680
00:36:12,640 --> 00:36:18,440
Speaker 11: It's probably gone up twofold in five years. And I

681
00:36:18,480 --> 00:36:22,759
Speaker 11: think what's great, though, is the exposure has gone up fourfold,

682
00:36:23,640 --> 00:36:27,960
Speaker 11: so you know, it's all value for money, but the demand.

683
00:36:28,000 --> 00:36:29,000
Speaker 7: I mean, if we look.

684
00:36:28,880 --> 00:36:34,120
Speaker 11: At our our partners, right, Google, Cisco, Dell, Goldman, Sachs,

685
00:36:34,160 --> 00:36:38,000
Speaker 11: I mean, these companies were not considering Formula one five

686
00:36:38,080 --> 00:36:41,200
Speaker 11: years ago, and now you've got the world's greatest companies

687
00:36:41,719 --> 00:36:44,799
Speaker 11: joining those that were already there. So it's it's been

688
00:36:44,920 --> 00:36:46,839
Speaker 11: unbelievably commercial success, Zach.

689
00:36:46,880 --> 00:36:48,600
Speaker 1: Real quickly, and by the way, you know, John and

690
00:36:48,680 --> 00:36:50,920
Speaker 1: I think we can piece together five thousand dollars to

691
00:36:50,920 --> 00:36:54,120
Speaker 1: get Bloomberg Savellians on the side of the car. You

692
00:36:54,200 --> 00:36:56,400
Speaker 1: guys are always tweaking the cars. Now you've got a

693
00:36:56,480 --> 00:36:59,000
Speaker 1: summer break like Pharaoh has a summer break. I mean

694
00:36:59,080 --> 00:37:02,680
Speaker 1: John's taking off all of August into September. You go

695
00:37:02,800 --> 00:37:05,640
Speaker 1: from Belgium to Netherlands. Is your car going to be

696
00:37:05,680 --> 00:37:09,120
Speaker 1: tweaked and different for Netherlands or do you actually take

697
00:37:09,160 --> 00:37:11,200
Speaker 1: a real European holiday?

698
00:37:12,360 --> 00:37:14,160
Speaker 7: No, well, a bit of both.

699
00:37:14,239 --> 00:37:16,719
Speaker 11: But you know, everything's about advanced planning. So we will

700
00:37:16,840 --> 00:37:20,040
Speaker 11: have new bits if you'd like on our car and

701
00:37:20,160 --> 00:37:23,920
Speaker 11: hauland but those have already been developed. The shutdown is

702
00:37:23,960 --> 00:37:27,640
Speaker 11: for the technical team is mandatory. We can't even send

703
00:37:27,800 --> 00:37:29,600
Speaker 11: an email. So I'm going to go to a lot

704
00:37:29,640 --> 00:37:33,080
Speaker 11: of time with our IndyCar team because you can't keep

705
00:37:33,080 --> 00:37:35,640
Speaker 11: me away from a racetrack. But no, we are. It

706
00:37:35,719 --> 00:37:39,000
Speaker 11: is a very genuine You cannot touch the race car

707
00:37:39,560 --> 00:37:43,239
Speaker 11: for two weeks. You can't even communicate about the race car.

708
00:37:43,320 --> 00:37:47,360
Speaker 11: But that's all planned in so our developments are already ready.

709
00:37:48,280 --> 00:37:49,880
Speaker 7: I'm having that written into my class.

710
00:37:50,080 --> 00:37:54,960
Speaker 1: Same bratas did you just hear that?

711
00:37:55,280 --> 00:37:57,520
Speaker 2: Zach Brown of the Clown racing Zach, Thank you, sir,

712
00:37:57,600 --> 00:37:59,720
Speaker 2: appreciate it, and good luck for the rest of the season.

713
00:38:00,400 --> 00:38:04,239
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714
00:38:04,360 --> 00:38:08,560
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717
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719
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