1 00:00:02,529 --> 00:00:05,370 Speaker 1: Bloomberg Audio Studios. Podcasts. 2 00:00:05,690 --> 00:00:06,210 Speaker 2: Radio. 3 00:00:06,650 --> 00:00:07,050 Speaker 3: News. 4 00:00:12,530 --> 00:00:16,670 Speaker 1: This is the Bloomberg Surveillance Podcast. Catch us live weekdays 5 00:00:16,730 --> 00:00:20,210 Speaker 1: at 7 a.m. Eastern on Apple CarPlay or Android Auto 6 00:00:20,290 --> 00:00:23,880 Speaker 1: with the Bloomberg Business App. Listen on demand wherever you 7 00:00:23,910 --> 00:00:27,000 Speaker 1: get your podcasts or watch us live on YouTube. 8 00:00:27,640 --> 00:00:30,700 Speaker 3: This is the conversation of the day. Virginia Mazenov is 9 00:00:30,780 --> 00:00:34,890 Speaker 3: so acclaimed. with all of her work across investment, finance. 10 00:00:35,370 --> 00:00:38,390 Speaker 3: Nobody cares. It's about the protest in the street. It's 11 00:00:38,430 --> 00:00:41,210 Speaker 3: about the fracturing of her France. And we're honored she 12 00:00:41,250 --> 00:00:45,889 Speaker 3: could be with us today. From World War II, there 13 00:00:45,909 --> 00:00:49,720 Speaker 3: have been four, five, six uncountable republics. It's not like America. 14 00:00:50,020 --> 00:00:54,840 Speaker 3: There's an inherent instability. Do you worry about a fracturing 15 00:00:54,980 --> 00:00:56,120 Speaker 3: of the French Republic? 16 00:00:56,900 --> 00:00:59,740 Speaker 4: That's a really good question. We're in a situation where 17 00:00:59,780 --> 00:01:03,220 Speaker 4: budget deficits are pretty high, as you know. And with 18 00:01:03,260 --> 00:01:07,720 Speaker 4: demographic trends that we're seeing, there's very little rooms to maneuver, 19 00:01:07,760 --> 00:01:11,530 Speaker 4: which was what promised, if you want, in terms of pension, 20 00:01:11,970 --> 00:01:14,650 Speaker 4: in terms of benefits. And this is at the heart 21 00:01:15,110 --> 00:01:18,130 Speaker 4: of the issue that we're seeing today. And of course, 22 00:01:18,209 --> 00:01:20,930 Speaker 4: it has an impact on how voters will vote at 23 00:01:20,970 --> 00:01:21,810 Speaker 4: the next election. 24 00:01:22,220 --> 00:01:25,080 Speaker 3: What is the polarity of Paris with the rest of 25 00:01:25,140 --> 00:01:28,590 Speaker 3: France now? We know it's extreme. There's really, maybe it's 26 00:01:28,630 --> 00:01:32,910 Speaker 3: a New York, LA equivalent, but it's different and unique. 27 00:01:33,430 --> 00:01:36,290 Speaker 3: In this crisis, what is the polarity of Paris with 28 00:01:36,310 --> 00:01:37,209 Speaker 3: the rest of the nation? 29 00:01:37,290 --> 00:01:43,039 Speaker 4: So there's always a relatively big gap between the farmland 30 00:01:44,459 --> 00:01:47,720 Speaker 4: and the city, and Paris is still the very strong 31 00:01:47,860 --> 00:01:53,200 Speaker 4: center There's been many attempts for many years to decentralize, 32 00:01:53,280 --> 00:01:57,960 Speaker 4: if you want, economic activity across the country. And I 33 00:01:58,000 --> 00:02:00,559 Speaker 4: think the key things about the protests that we're seeing 34 00:02:00,640 --> 00:02:05,070 Speaker 4: now is in retaliation, if you want, to this proposal 35 00:02:05,130 --> 00:02:09,450 Speaker 4: of a budget. Spending has to be cut. to keep 36 00:02:09,490 --> 00:02:14,740 Speaker 4: with the rules of the EU, and it means a freeze, 37 00:02:14,919 --> 00:02:18,000 Speaker 4: or at least a proposed freeze on salaries for government 38 00:02:18,139 --> 00:02:19,880 Speaker 4: officials or government employees. 39 00:02:20,440 --> 00:02:22,160 Speaker 5: That has had a big impact. 40 00:02:22,460 --> 00:02:26,900 Speaker 4: Of course, teachers, many different people who are already working 41 00:02:26,940 --> 00:02:31,000 Speaker 4: in overcrowded rooms, that creates tensions that are very hard 42 00:02:31,210 --> 00:02:35,410 Speaker 4: to reconciliate from a mass standpoint when you look at 43 00:02:35,450 --> 00:02:37,710 Speaker 4: the budget. And of course, that has an impact on Europe. 44 00:02:38,050 --> 00:02:38,649 Speaker 3: Of course, right. 45 00:02:38,690 --> 00:02:40,210 Speaker 6: And I want to talk about France as sort of 46 00:02:40,270 --> 00:02:43,440 Speaker 6: a bellwether for global stress, especially when you look at 47 00:02:43,460 --> 00:02:44,160 Speaker 6: the bond market. 48 00:02:44,310 --> 00:02:44,500 Speaker 3: Yes. 49 00:02:44,520 --> 00:02:47,859 Speaker 6: Because now France's corporate bonds are trading as if they 50 00:02:47,900 --> 00:02:50,720 Speaker 6: were safer than the government's bonds in France. What does 51 00:02:50,740 --> 00:02:52,680 Speaker 6: that tell you just overall about sentiment? 52 00:02:53,160 --> 00:02:57,430 Speaker 4: Well, I think what it means is the perspective on 53 00:02:57,650 --> 00:03:01,940 Speaker 4: government and the ability of the government— to deal with 54 00:03:01,980 --> 00:03:04,500 Speaker 4: this situation. We've had quite a few, as you know, 55 00:03:04,560 --> 00:03:08,740 Speaker 4: governments in the last few years, and really very little, 56 00:03:08,760 --> 00:03:14,520 Speaker 4: I would say, very little traction in bringing the country 57 00:03:14,580 --> 00:03:16,400 Speaker 4: together to put the finances together. 58 00:03:16,419 --> 00:03:17,080 Speaker 6: So when you look at. 59 00:03:17,060 --> 00:03:20,820 Speaker 4: The spread versus boons, for example, we've never seen this, really. 60 00:03:21,810 --> 00:03:25,350 Speaker 4: And if you look at the spread versus the periphery, remember, 61 00:03:25,410 --> 00:03:28,730 Speaker 4: the problems used to be Greece, Italy, and Spain, and 62 00:03:29,169 --> 00:03:33,870 Speaker 4: especially Greece, right? And this is the world in reverse, 63 00:03:33,930 --> 00:03:36,340 Speaker 4: if you want, but it is, in my view, the 64 00:03:36,380 --> 00:03:41,700 Speaker 4: result of 15 years at least of that path that 65 00:03:41,760 --> 00:03:44,500 Speaker 4: has really led us where we are now. 66 00:03:44,780 --> 00:03:47,440 Speaker 6: Is this a France issue, or is it a greater 67 00:03:47,540 --> 00:03:50,070 Speaker 6: issue that could sort of start to envelop the Greases 68 00:03:50,110 --> 00:03:50,690 Speaker 6: and the Spains? 69 00:03:51,210 --> 00:03:53,650 Speaker 4: Well, I think if you look at the transmission mechanism, 70 00:03:53,690 --> 00:03:57,450 Speaker 4: you have several. Number one, how does ECB roll, if 71 00:03:57,490 --> 00:04:00,440 Speaker 4: you want, in this world? Because France and Germany were 72 00:04:00,460 --> 00:04:05,120 Speaker 4: always the core, right? When you have two very different trajectories, 73 00:04:05,200 --> 00:04:08,060 Speaker 4: what do you do? The second is the transmission through banks, 74 00:04:08,080 --> 00:04:10,870 Speaker 4: because banks own a lot of French debt. 75 00:04:11,630 --> 00:04:12,790 Speaker 6: How is that working? 76 00:04:13,190 --> 00:04:15,170 Speaker 4: Then impact on the euro. As you know, the euro 77 00:04:15,210 --> 00:04:19,109 Speaker 4: has been weak. year to date, minus 4% versus the dollar, 78 00:04:19,470 --> 00:04:23,070 Speaker 4: that has an impact on imported energy costs, which are 79 00:04:23,130 --> 00:04:27,650 Speaker 4: fueling inflation, which have led to increasing rates. So this 80 00:04:27,890 --> 00:04:29,990 Speaker 4: is how we could look at the map of how 81 00:04:30,010 --> 00:04:32,610 Speaker 4: the impact of France can propagate through Europe. 82 00:04:32,910 --> 00:04:35,210 Speaker 3: Is there an analog to Sweden in that there was 83 00:04:35,250 --> 00:04:39,310 Speaker 3: a liberality and socialism in Sweden for decades, and then 84 00:04:39,350 --> 00:04:42,330 Speaker 3: they shifted conservative? Can France do the same thing? 85 00:04:44,190 --> 00:04:46,450 Speaker 4: It's hard for me to compare it to Sweden, but 86 00:04:46,529 --> 00:04:51,050 Speaker 4: what we know is the trend towards populism and with 87 00:04:51,089 --> 00:04:54,450 Speaker 4: the election coming in May, April and May 27, and 88 00:04:54,589 --> 00:05:00,030 Speaker 4: Marine Le Pen having such a strong support is the 89 00:05:00,089 --> 00:05:03,800 Speaker 4: voice of discontent from a country that hasn't found its 90 00:05:03,900 --> 00:05:05,560 Speaker 4: rooting in fiscal discipline. 91 00:05:06,640 --> 00:05:09,760 Speaker 6: Does the ECB step in here? And if so, what 92 00:05:09,779 --> 00:05:10,260 Speaker 6: do they do? 93 00:05:10,520 --> 00:05:13,420 Speaker 4: Well, that's hard, right? That's what I meant by having 94 00:05:13,600 --> 00:05:16,360 Speaker 4: the two core countries, if you want it this way, 95 00:05:16,420 --> 00:05:23,200 Speaker 4: Germany and France, having such different conditions for their current growth, inflation, environment. 96 00:05:23,320 --> 00:05:25,659 Speaker 6: And now we see the challenges of a euro, right, 97 00:05:25,660 --> 00:05:28,120 Speaker 6: 10 years later. The challenges of bringing all of these 98 00:05:28,180 --> 00:05:29,100 Speaker 6: economies together. 99 00:05:30,240 --> 00:05:33,560 Speaker 4: And the fact that France is outside its deficit boundaries. 100 00:05:34,000 --> 00:05:34,940 Speaker 4: So for the ECB. 101 00:05:36,240 --> 00:05:37,190 Speaker 4: This is a big issue. 102 00:05:37,620 --> 00:05:40,540 Speaker 3: Okay. You're not here for this. Can you get me 103 00:05:40,580 --> 00:05:44,339 Speaker 3: a reservation at Tour de Jean somewhere after Christmas? 104 00:05:44,960 --> 00:05:48,700 Speaker 4: Tom, do you know, I don't have that magic wand. 105 00:05:48,779 --> 00:05:51,980 Speaker 4: I'm sure we could try. 106 00:05:52,580 --> 00:05:54,279 Speaker 6: You have to know people. 107 00:05:54,760 --> 00:05:57,200 Speaker 3: You have to know. I mean, the view of Notre Dame, 108 00:05:57,300 --> 00:06:00,420 Speaker 3: it's like, are you kidding me? Expect Cary Grant and 109 00:06:00,930 --> 00:06:02,169 Speaker 3: Eva Marie Saint to walk in. 110 00:06:02,350 --> 00:06:04,550 Speaker 6: Eva Marie Saint, who we lost this past week. 111 00:06:04,620 --> 00:06:07,790 Speaker 3: Yes, yes. Virginie, thank you so much. This has been wonderful. 112 00:06:08,370 --> 00:06:12,250 Speaker 3: Virginie Mazenov here today. Really, really appreciate her time and 113 00:06:12,970 --> 00:06:16,630 Speaker 3: energy to give us a briefing there on France with 114 00:06:16,670 --> 00:06:19,630 Speaker 3: some real trouble. The French-German spread, as she mentioned, has 115 00:06:19,750 --> 00:06:22,590 Speaker 3: really rebounded off the Le Pen speech of two days ago. 116 00:06:24,630 --> 00:06:25,220 Speaker 3: Stay with us. 117 00:06:25,540 --> 00:06:28,770 Speaker 7: More from Bloomberg Surveillance coming up after this. 118 00:06:36,029 --> 00:06:39,630 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live 119 00:06:39,710 --> 00:06:42,880 Speaker 1: weekday afternoons from 7 to 10 a.m. Eastern. Listen on 120 00:06:43,000 --> 00:06:46,260 Speaker 1: Apple CarPlay and Android Auto with the Bloomberg Business app. 121 00:06:46,460 --> 00:06:48,180 Speaker 1: Or watch us live on YouTube. 122 00:06:48,480 --> 00:06:50,900 Speaker 3: Joining us now, we get a great set of conversations. 123 00:06:51,839 --> 00:06:55,040 Speaker 3: Kay Hare, who had all of the Yankee boxes booked 124 00:06:55,080 --> 00:07:00,609 Speaker 3: for J.P. Morgan here. Oh, boy. Here we go. Thank 125 00:07:00,630 --> 00:07:04,170 Speaker 3: you for coming in. Instead of me finding a narrow question, 126 00:07:04,650 --> 00:07:07,890 Speaker 3: what is the worry on the bond desk at J.P. 127 00:07:07,910 --> 00:07:11,550 Speaker 3: Morgan right now, given the cacophony of bids slipping away? 128 00:07:11,890 --> 00:07:14,010 Speaker 8: All right. First off, I want to clarify, I was 129 00:07:14,090 --> 00:07:16,330 Speaker 8: not at the Yankees game. I haven't been a Yankees 130 00:07:16,350 --> 00:07:18,440 Speaker 8: game in probably 20 years. 131 00:07:18,500 --> 00:07:20,960 Speaker 6: Maybe that's the problem. Maybe you need to go and 132 00:07:20,980 --> 00:07:22,780 Speaker 6: change their lock. Let's be clear. 133 00:07:22,840 --> 00:07:26,000 Speaker 8: That was that was not where it is. Tom, Alexis, 134 00:07:26,020 --> 00:07:27,920 Speaker 8: good morning. Thanks for having me. 135 00:07:28,400 --> 00:07:31,000 Speaker 5: We're Bond people. We worry about everything all the time. 136 00:07:31,120 --> 00:07:35,340 Speaker 3: Which of the slipping bids has your attention this morning? 137 00:07:37,110 --> 00:07:38,690 Speaker 6: Oh, you got her mid-coffee gulp. 138 00:07:39,130 --> 00:07:39,890 Speaker 8: Tea, technically. 139 00:07:39,950 --> 00:07:40,290 Speaker 4: Oh, tea. 140 00:07:40,490 --> 00:07:42,210 Speaker 6: I like that. They're very British of you. 141 00:07:42,270 --> 00:07:42,830 Speaker 5: Exactly. 142 00:07:42,850 --> 00:07:46,570 Speaker 8: We're being European this morning. So what's worrying me this morning, 143 00:07:46,590 --> 00:07:50,820 Speaker 8: a lot of this move has felt very technical driven. 144 00:07:51,240 --> 00:07:55,210 Speaker 8: So in Bond land, you've got, okay, we've had some 145 00:07:55,270 --> 00:07:57,960 Speaker 8: economic resilience that I think has surprised people. Go back 146 00:07:58,000 --> 00:07:59,860 Speaker 8: to the beginning of the year and people thought we 147 00:07:59,900 --> 00:08:02,900 Speaker 8: were going to be in a Fed-easing environment. We've had 148 00:08:02,940 --> 00:08:06,920 Speaker 8: a lot of hyperscaler and corporate supply. And then we've 149 00:08:06,940 --> 00:08:09,490 Speaker 8: had questions about the Fed reaction function. So I'm less 150 00:08:09,520 --> 00:08:13,170 Speaker 8: worried about the Fed reaction function. I'm not too troubled 151 00:08:13,210 --> 00:08:15,830 Speaker 8: about supply. And I think you all were just talking 152 00:08:15,850 --> 00:08:18,570 Speaker 8: about France, which is not my bailiwick. But I think 153 00:08:18,610 --> 00:08:21,450 Speaker 8: if you look at this, We're in a world where 154 00:08:21,490 --> 00:08:23,930 Speaker 8: yields are attractive and people can be choosy about what 155 00:08:23,970 --> 00:08:27,730 Speaker 8: they buy. And I think we're back to, you know, 156 00:08:27,770 --> 00:08:30,190 Speaker 8: I spent a lot of my life as a credit analyst, Tom, 157 00:08:30,250 --> 00:08:32,620 Speaker 8: and I think that's becoming a cool profession again. I 158 00:08:32,630 --> 00:08:35,560 Speaker 8: think the world needs credit analysts. And I think you 159 00:08:35,600 --> 00:08:39,020 Speaker 8: can't just say, oh, well, I'll pick up some extra spread. 160 00:08:39,080 --> 00:08:41,780 Speaker 8: It turns out there's a big difference between a AAA 161 00:08:41,820 --> 00:08:44,280 Speaker 8: sovereign and a single A sovereign and a single A 162 00:08:44,330 --> 00:08:48,929 Speaker 8: sovereign that might even be generously rated. given how their 163 00:08:48,970 --> 00:08:51,770 Speaker 8: actual financials look. I think people have just kind of 164 00:08:51,830 --> 00:08:54,490 Speaker 8: thought it's an environment where you can pick up spread. 165 00:08:54,530 --> 00:08:57,880 Speaker 8: So to answer your question, Tom, I worry about ensuring 166 00:08:57,900 --> 00:09:01,020 Speaker 8: that we've done the bottom up fundamental credit analysis and 167 00:09:01,059 --> 00:09:03,420 Speaker 8: we've picked the right ones that were, you know, if 168 00:09:03,440 --> 00:09:06,760 Speaker 8: you think about managing a core plus portfolio, we're picking 169 00:09:06,820 --> 00:09:08,939 Speaker 8: up yield on top of the ag and we need 170 00:09:08,960 --> 00:09:10,890 Speaker 8: to do it in a risk adjusted basis. So that's 171 00:09:10,910 --> 00:09:13,050 Speaker 8: what I'm keenly focused on. Have we done the bottom 172 00:09:13,110 --> 00:09:13,429 Speaker 8: up work? 173 00:09:13,890 --> 00:09:17,230 Speaker 6: So if this is a market where you're choosy, you're picky, 174 00:09:17,390 --> 00:09:20,770 Speaker 6: what are your clients choosing? Where are they gravitating toward? 175 00:09:20,990 --> 00:09:22,410 Speaker 8: Yeah, a couple of things. I was actually out on 176 00:09:22,429 --> 00:09:24,950 Speaker 8: the road in Detroit and Grand Rapids. I spend most 177 00:09:24,970 --> 00:09:28,330 Speaker 8: of my time in the office managing portfolios and working 178 00:09:28,350 --> 00:09:30,630 Speaker 8: with people. But I was out on the road a 179 00:09:30,650 --> 00:09:32,410 Speaker 8: couple of days. And I would say we've got a 180 00:09:32,429 --> 00:09:35,990 Speaker 8: lot of interest in core and core plus strategies. But 181 00:09:36,010 --> 00:09:38,430 Speaker 8: I think there's also some concerns about the fact that 182 00:09:38,620 --> 00:09:41,000 Speaker 8: people are losing money in bonds again, and that gets 183 00:09:41,040 --> 00:09:45,260 Speaker 8: them nervous. That's never supposed to go down. And they're like, gosh, 184 00:09:45,380 --> 00:09:47,700 Speaker 8: is this 2022 again? And we feel pretty strongly this 185 00:09:47,760 --> 00:09:50,880 Speaker 8: is not 2022 again for a couple of reasons, the 186 00:09:50,920 --> 00:09:54,350 Speaker 8: first of which is starting coupons are much more attractive. 187 00:09:54,370 --> 00:09:56,870 Speaker 8: You've got what we would call a coupon cushion. We're 188 00:09:56,910 --> 00:10:00,620 Speaker 8: not at a 2% treasury yield, whereas Tom just discussed 189 00:10:01,000 --> 00:10:04,020 Speaker 8: five and change on things. But I think one of 190 00:10:04,040 --> 00:10:06,380 Speaker 8: the things that people are really interested in is total 191 00:10:06,440 --> 00:10:08,709 Speaker 8: return fixed income, a little bit go anywhere and a 192 00:10:08,750 --> 00:10:12,330 Speaker 8: little bit less benchmark focused. So our income strategies or 193 00:10:12,370 --> 00:10:15,670 Speaker 8: our flexible bond strategies has been of particular interest. But 194 00:10:15,690 --> 00:10:18,870 Speaker 8: I would note that broadly, we're still seeing flows into 195 00:10:18,910 --> 00:10:21,450 Speaker 8: fixed income into our strategies. And I think it's the 196 00:10:21,490 --> 00:10:24,140 Speaker 8: attractive yields that people are intrigued by. 197 00:10:24,260 --> 00:10:28,360 Speaker 3: Without giving away trade secrets, what is the tone of issuance? 198 00:10:28,480 --> 00:10:32,760 Speaker 3: What is the dialogue between the broad spectrum of issuers 199 00:10:32,840 --> 00:10:35,960 Speaker 3: of paper and a big bank right now? Are they 200 00:10:36,000 --> 00:10:38,710 Speaker 3: calling up saying, here's the paper, take it? Is it 201 00:10:38,760 --> 00:10:40,290 Speaker 3: tough to get the paper you want? 202 00:10:42,200 --> 00:10:44,300 Speaker 8: I think we've been successful in getting what we wanted, 203 00:10:44,320 --> 00:10:46,560 Speaker 8: but we've been discriminating about it. So we've got money 204 00:10:46,580 --> 00:10:49,440 Speaker 8: to put to work. I think, you know, if you look, 205 00:10:49,480 --> 00:10:53,040 Speaker 8: new issue concessions have still been relatively skinny, you know, 206 00:10:53,300 --> 00:10:56,280 Speaker 8: as in four basis points or something like that. I 207 00:10:56,360 --> 00:10:59,520 Speaker 8: think where they are wider is when the market is 208 00:10:59,580 --> 00:11:00,880 Speaker 8: surprised by something. 209 00:11:01,300 --> 00:11:01,900 Speaker 5: So I think. 210 00:11:01,990 --> 00:11:04,070 Speaker 3: Well, you look, I don't want to... The Paramount deal 211 00:11:04,490 --> 00:11:06,890 Speaker 3: was just to be kind of ugly. I mean, that 212 00:11:06,929 --> 00:11:07,729 Speaker 3: did not go well. 213 00:11:08,850 --> 00:11:10,610 Speaker 8: I think that's a fair statement. You know. 214 00:11:11,110 --> 00:11:13,510 Speaker 3: I mean, Bob Michael went to the roadshow just for 215 00:11:13,530 --> 00:11:15,230 Speaker 3: the merch, but, you know. 216 00:11:15,470 --> 00:11:17,790 Speaker 8: He's a merch guy, so that's not surprising to you, 217 00:11:17,850 --> 00:11:18,120 Speaker 8: is it? 218 00:11:18,910 --> 00:11:23,740 Speaker 3: But how does the Paramount bust the ramifications of that 219 00:11:23,790 --> 00:11:25,520 Speaker 3: across the adult finance world? 220 00:11:25,940 --> 00:11:27,559 Speaker 8: The adult finance world? 221 00:11:27,679 --> 00:11:28,840 Speaker 3: Wow, that's a compliment. 222 00:11:28,900 --> 00:11:30,980 Speaker 5: You're calling the bond market adults. 223 00:11:31,059 --> 00:11:33,240 Speaker 3: They don't want all the drama on Paramount. It's just, 224 00:11:33,260 --> 00:11:35,280 Speaker 3: give me the paper, and the paper didn't work out. 225 00:11:35,820 --> 00:11:38,520 Speaker 5: So the bond market tends to be very lumpy. 226 00:11:39,070 --> 00:11:39,300 Speaker 3: Right? 227 00:11:39,400 --> 00:11:42,090 Speaker 8: And I think people have to have an expectation. We 228 00:11:42,130 --> 00:11:44,209 Speaker 8: like to know what's coming, Tom. We don't like to 229 00:11:44,250 --> 00:11:47,850 Speaker 8: be surprised. And I think some people were actually surprised 230 00:11:48,270 --> 00:11:51,349 Speaker 8: when Paramount came. There were some debates about, is it 231 00:11:51,370 --> 00:11:52,950 Speaker 8: going to come this week? Is it going to be later? 232 00:11:52,970 --> 00:11:54,809 Speaker 8: Are they going to get all the approvals? And I 233 00:11:54,850 --> 00:11:57,810 Speaker 8: think maybe people hadn't quite made enough room in portfolios 234 00:11:57,850 --> 00:12:00,690 Speaker 8: for that. So if you're not getting in net flows, 235 00:12:00,770 --> 00:12:03,030 Speaker 8: then you've got to make room for something. I think 236 00:12:03,070 --> 00:12:05,570 Speaker 8: broadly people were positioned for a fair amount of supply 237 00:12:05,630 --> 00:12:08,030 Speaker 8: in September, but that was a little bit more than 238 00:12:08,050 --> 00:12:09,100 Speaker 8: I think people expected. 239 00:12:09,200 --> 00:12:14,200 Speaker 3: Folks, there is a vignette into the reality of portfolios. 240 00:12:14,440 --> 00:12:18,260 Speaker 3: It's not just the chit chat in the media. It's 241 00:12:18,300 --> 00:12:20,880 Speaker 3: the give and take between paper coming in. I got 242 00:12:20,900 --> 00:12:24,100 Speaker 3: to find a hole for it versus paper going out. 243 00:12:24,200 --> 00:12:27,600 Speaker 3: It's a very physical business in the morning or 24 244 00:12:27,600 --> 00:12:30,319 Speaker 3: seven now. when you say, how am I going to 245 00:12:30,429 --> 00:12:33,540 Speaker 3: fit this piece into my portfolio? It's not easy. 246 00:12:34,460 --> 00:12:37,860 Speaker 6: You've got big tech selling massive amounts of debt to 247 00:12:37,940 --> 00:12:41,660 Speaker 6: fund AI. They've been doing it successfully thus far, by 248 00:12:41,720 --> 00:12:46,280 Speaker 6: and large, but this heavy borrowing binge is causing credit 249 00:12:46,320 --> 00:12:49,500 Speaker 6: spreads and yields to widen. What happens if and when, 250 00:12:49,520 --> 00:12:52,309 Speaker 6: because one must assume the appetite is not going to 251 00:12:52,350 --> 00:12:54,270 Speaker 6: be as voracious for these sales? 252 00:12:54,850 --> 00:12:56,469 Speaker 8: Yeah, so a couple of things. First, I think if 253 00:12:56,510 --> 00:12:59,989 Speaker 8: you look at the investment that people are putting into this. 254 00:13:00,050 --> 00:13:02,229 Speaker 8: It's running like north of three and a half percent 255 00:13:02,250 --> 00:13:05,819 Speaker 8: of GDP. That's a big investment. and at least a 256 00:13:05,860 --> 00:13:08,240 Speaker 8: third of it, if not more, is being debt financed. 257 00:13:08,280 --> 00:13:11,900 Speaker 8: So that's a glut of supply on it. And that 258 00:13:12,080 --> 00:13:18,070 Speaker 8: is combined with relatively a fair amount of government supply 259 00:13:18,260 --> 00:13:20,330 Speaker 8: as well. So you've got kind of this crowding out. 260 00:13:20,350 --> 00:13:25,349 Speaker 8: You've got both governments that have not exactly been fiscally disciplined, 261 00:13:25,890 --> 00:13:29,569 Speaker 8: and you've got CapEx. On the plus side, This is 262 00:13:29,610 --> 00:13:33,309 Speaker 8: a productive use of capital. We've got a resilient US economy. 263 00:13:33,410 --> 00:13:36,300 Speaker 8: We're moving out of a zero interest rate environment world. 264 00:13:36,620 --> 00:13:40,480 Speaker 8: We've got yields that are attractive. We have productive uses 265 00:13:40,520 --> 00:13:43,780 Speaker 8: for capital for these companies. Where we're getting at is 266 00:13:43,880 --> 00:13:47,390 Speaker 8: being discriminating about who's gonna earn a return on that. 267 00:13:47,530 --> 00:13:49,590 Speaker 8: We need our money back, Alexis. 268 00:13:49,750 --> 00:13:52,670 Speaker 3: I brought up here because Tom Secunda taught me how 269 00:13:52,690 --> 00:13:55,150 Speaker 3: to use the YA screen in the Bloomberg a few 270 00:13:55,190 --> 00:14:03,060 Speaker 3: years ago. The 40-year Amazon piece- enjoying a 7.0% yield today, 271 00:14:03,679 --> 00:14:09,540 Speaker 3: prices migrated from 99 to 89. Does anybody care about 272 00:14:09,590 --> 00:14:11,530 Speaker 3: that or they just say, oh, we'll hold it to maturity? 273 00:14:12,150 --> 00:14:16,410 Speaker 8: So, yes, we do care about dollar prices, but remember, 274 00:14:16,490 --> 00:14:20,010 Speaker 8: yields go up, dollar prices go down. Nailed it. 275 00:14:20,710 --> 00:14:22,390 Speaker 5: Bond math, it's complex, Tom. 276 00:14:22,810 --> 00:14:24,730 Speaker 8: But yeah, we do look at that. I mean, that's 277 00:14:24,770 --> 00:14:28,170 Speaker 8: been a sell-off, but that actually can provide a buying opportunity, 278 00:14:28,730 --> 00:14:28,950 Speaker 8: you know? 279 00:14:29,990 --> 00:14:32,650 Speaker 3: Okay, I have to go to a hurricane. No, not 280 00:14:32,690 --> 00:14:34,130 Speaker 3: Kelsey Barrow, a real hurricane. 281 00:14:34,170 --> 00:14:35,350 Speaker 6: She's not a hurricane. 282 00:14:35,490 --> 00:14:39,700 Speaker 3: Thank you so much, JP Morgan. Stay with us. 283 00:14:40,000 --> 00:14:43,240 Speaker 7: More from Bloomberg Surveillance coming up after this. 284 00:14:50,500 --> 00:14:54,109 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live 285 00:14:54,180 --> 00:14:56,250 Speaker 1: weekday afternoons from 7 to 10 a.m. 286 00:14:56,310 --> 00:14:56,729 Speaker 3: Eastern. 287 00:14:56,810 --> 00:15:00,090 Speaker 1: Listen on Apple CarPlay and Android Auto with the Bloomberg 288 00:15:00,130 --> 00:15:02,650 Speaker 1: Business app or watch us live on YouTube. 289 00:15:03,110 --> 00:15:05,400 Speaker 3: This is wonderful. We're going to just slip right into it. 290 00:15:05,930 --> 00:15:08,830 Speaker 3: Tobin Marcus with us now, head of public policy and 291 00:15:08,870 --> 00:15:12,670 Speaker 3: politics at Wolf Research, with just a real nice tone 292 00:15:13,250 --> 00:15:16,320 Speaker 3: to the midterms. Tobin, do you have any clarity or 293 00:15:16,750 --> 00:15:18,620 Speaker 3: are the midterms a mystery? 294 00:15:20,430 --> 00:15:22,740 Speaker 2: Well, there's certainly a little bit of a mystery, but 295 00:15:23,600 --> 00:15:27,140 Speaker 2: consensus increasingly is shifting towards a clear outcome, which is 296 00:15:27,160 --> 00:15:29,740 Speaker 2: Democrats winning both the House and the Senate. So taking 297 00:15:29,780 --> 00:15:32,140 Speaker 2: some of that mystery off the table and consensus expectations. 298 00:15:32,460 --> 00:15:34,570 Speaker 2: And I guess I think it's still more mysterious. We 299 00:15:34,590 --> 00:15:36,990 Speaker 2: think it's closer to a coin flip, probably leaning very 300 00:15:37,030 --> 00:15:40,510 Speaker 2: slightly to Republicans and some expectations for Democrats. 301 00:15:41,010 --> 00:15:45,610 Speaker 3: With all your great academics, should our audience trust the polls? 302 00:15:47,940 --> 00:15:49,250 Speaker 3: The polls do have value. 303 00:15:49,620 --> 00:15:53,770 Speaker 2: In the 2018 and 2022 midterms, the national polling was 304 00:15:53,790 --> 00:15:55,890 Speaker 2: quite good, but we still got some state errors. The 305 00:15:55,910 --> 00:15:58,130 Speaker 2: pattern that we're seeing in the polls right now looks 306 00:15:58,170 --> 00:16:00,550 Speaker 2: similar to the pattern that we've got in polling errors 307 00:16:00,630 --> 00:16:03,590 Speaker 2: in cycles past. We've gotten much bigger blue shifts in 308 00:16:03,630 --> 00:16:05,770 Speaker 2: redder places, which is a bit of a suspicious pattern. 309 00:16:05,910 --> 00:16:07,910 Speaker 2: We do see reason to think they're overstating times again. 310 00:16:09,930 --> 00:16:12,670 Speaker 6: Are we overstating the blue wave and what it might 311 00:16:13,010 --> 00:16:17,680 Speaker 6: actually mean for this country, but also for the markets? 312 00:16:17,720 --> 00:16:19,840 Speaker 6: I mean, is this going to be a massive market catalyst? 313 00:16:19,880 --> 00:16:23,040 Speaker 6: I have to think traders have already baked in the 314 00:16:23,070 --> 00:16:24,230 Speaker 6: possibility of a blue wave. 315 00:16:25,320 --> 00:16:27,060 Speaker 2: Yeah, I don't think it's going to be a giant 316 00:16:27,100 --> 00:16:29,640 Speaker 2: market catalyst, even completely distinct from my views about the 317 00:16:29,800 --> 00:16:31,970 Speaker 2: odds of a Democratic Senate win, which I'm also taking 318 00:16:31,990 --> 00:16:35,170 Speaker 2: the under on. In terms of significance, I just don't 319 00:16:35,210 --> 00:16:37,810 Speaker 2: see much from a concrete policy perspective, really anything from 320 00:16:37,850 --> 00:16:40,030 Speaker 2: a concrete policy perspective. The Democrats can do with the 321 00:16:40,050 --> 00:16:41,950 Speaker 2: Senate majority that they can't do with the House majority. 322 00:16:42,310 --> 00:16:44,030 Speaker 2: So the vibes might be a little different. You can 323 00:16:44,050 --> 00:16:46,109 Speaker 2: imagine some narrative shifts in markets coming out of it, 324 00:16:46,130 --> 00:16:47,700 Speaker 2: but I don't think the policy outlook is different. 325 00:16:47,980 --> 00:16:51,680 Speaker 3: How does it change for President Trump, given that Tobin Marcus... 326 00:16:52,080 --> 00:16:55,020 Speaker 3: I guess, victory for the Democrats, but not that big 327 00:16:55,220 --> 00:16:58,060 Speaker 3: of a victory. How does it change the presidency? 328 00:16:59,440 --> 00:17:01,400 Speaker 2: I think President Trump is going to approach 2027 a 329 00:17:01,440 --> 00:17:04,520 Speaker 2: lot like he approached 2026. I think he has a 330 00:17:04,720 --> 00:17:08,000 Speaker 2: lot of unilateral tools he can continue to use on tariffs, 331 00:17:08,080 --> 00:17:11,320 Speaker 2: on export controls, on foreign policy. Even if we manage 332 00:17:11,359 --> 00:17:13,560 Speaker 2: to wind down the war in Iran, Cuba is looming 333 00:17:13,600 --> 00:17:16,179 Speaker 2: as the next thing. And of course, he has the 334 00:17:16,220 --> 00:17:18,280 Speaker 2: triumphal arch in the ballroom and so forth to work on. 335 00:17:18,320 --> 00:17:19,919 Speaker 2: So I think he'll he'll have plenty to do and 336 00:17:19,960 --> 00:17:21,620 Speaker 2: not much ability for Democrats. 337 00:17:21,300 --> 00:17:21,859 Speaker 3: To restrain him. 338 00:17:22,080 --> 00:17:23,959 Speaker 6: But Tobin, in your note, you say that there are 339 00:17:24,060 --> 00:17:28,240 Speaker 6: signs out there that the polls may be overstating the 340 00:17:28,859 --> 00:17:31,480 Speaker 6: leverage the Democrats have in the midterms. What what are 341 00:17:31,530 --> 00:17:33,909 Speaker 6: some of those sort of signals for you? 342 00:17:34,940 --> 00:17:37,300 Speaker 2: So I mentioned earlier that we're seeing bigger blue shifts 343 00:17:37,340 --> 00:17:38,040 Speaker 2: in redder places. 344 00:17:38,119 --> 00:17:39,280 Speaker 3: That is a suspicious pattern. 345 00:17:39,300 --> 00:17:41,399 Speaker 2: It's a pattern that looks very much like the pattern 346 00:17:41,420 --> 00:17:44,810 Speaker 2: of polling errors in the past several cycles. Similarly, we're 347 00:17:44,830 --> 00:17:49,690 Speaker 2: seeing Democrats look quite strong across upper Midwestern states like Iowa, Michigan, Ohio, 348 00:17:50,010 --> 00:17:52,290 Speaker 2: which have been ground zero for polling error in Iowa. 349 00:17:52,910 --> 00:17:54,609 Speaker 2: in the Trump era. And then there are just some 350 00:17:54,650 --> 00:17:58,100 Speaker 2: individual results that strike me as facially implausible. You know, 351 00:17:58,119 --> 00:18:00,139 Speaker 2: South Carolina is not a one-point race. And when we 352 00:18:00,160 --> 00:18:03,300 Speaker 2: see results like that, it makes me look askance at 353 00:18:03,320 --> 00:18:04,440 Speaker 2: some of the other numbers we're seeing. 354 00:18:04,480 --> 00:18:07,670 Speaker 3: Wolf Research, do you have any wisdom on turnout? Are 355 00:18:07,690 --> 00:18:10,590 Speaker 3: there tea leaves that tell you we will be shocked 356 00:18:10,750 --> 00:18:14,350 Speaker 3: at a lack of turnout or an excessive turnout? I 357 00:18:14,369 --> 00:18:15,510 Speaker 3: think turnout's going to be strong. 358 00:18:15,750 --> 00:18:19,520 Speaker 2: Turnout in all the midterms since President Trump was elected 359 00:18:19,580 --> 00:18:22,560 Speaker 2: in 2016 has been structurally elevated relative to where it 360 00:18:22,600 --> 00:18:26,179 Speaker 2: was in the 90s and early aughts. The higher turnout is, 361 00:18:26,220 --> 00:18:28,520 Speaker 2: the better for Republicans, I think, because Democrats are the 362 00:18:28,560 --> 00:18:32,040 Speaker 2: more reliable turnout coalition at this point, in general and 363 00:18:32,080 --> 00:18:34,959 Speaker 2: certainly in this midterm where there's an enthusiasm issue. But 364 00:18:34,980 --> 00:18:37,140 Speaker 2: I think we're going to get reasonably healthy turnout. 365 00:18:36,880 --> 00:18:37,380 Speaker 3: On both sides. 366 00:18:37,400 --> 00:18:38,770 Speaker 2: I don't think that there's going to be a complete 367 00:18:38,850 --> 00:18:39,710 Speaker 2: collapse for Republicans. 368 00:18:40,590 --> 00:18:43,110 Speaker 3: We look forward to speaking to you often, Tobin. Really 369 00:18:43,150 --> 00:18:46,260 Speaker 3: love this. Tobin Marcus, thank you so much with Wolf Research. 370 00:18:48,140 --> 00:18:48,739 Speaker 3: Stay with us. 371 00:18:49,040 --> 00:18:52,290 Speaker 7: More from Bloomberg Surveillance coming up after this. 372 00:18:59,550 --> 00:19:03,129 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live 373 00:19:03,210 --> 00:19:06,389 Speaker 1: weekday afternoons from 7 to 10 a.m. Eastern. Listen on 374 00:19:06,490 --> 00:19:09,760 Speaker 1: Apple CarPlay and Android Auto with the Bloomberg Business app 375 00:19:09,980 --> 00:19:11,680 Speaker 1: or watch us live on YouTube. 376 00:19:12,119 --> 00:19:14,780 Speaker 3: Now we're going to speak to an authority on hydrocarbons, 377 00:19:15,440 --> 00:19:19,720 Speaker 3: even on diesel, but particularly on natural gas. Leslie Pulte-Guzman 378 00:19:20,180 --> 00:19:23,790 Speaker 3: is founder of Energy Vista. I give up. Open question. 379 00:19:24,010 --> 00:19:27,110 Speaker 3: What's the biggest mystery as you write your weekend note? 380 00:19:28,530 --> 00:19:33,390 Speaker 5: Good morning. We're starting with a big question. And thanks 381 00:19:33,430 --> 00:19:34,050 Speaker 5: for having me. 382 00:19:34,910 --> 00:19:36,850 Speaker 9: You know, for me, there is a lot of anxiety 383 00:19:36,890 --> 00:19:40,389 Speaker 9: potentially right now in Europe ahead of winter. I think 384 00:19:40,609 --> 00:19:44,590 Speaker 9: that we could be more bearish because Qatar has two 385 00:19:44,650 --> 00:19:48,260 Speaker 9: cards to play. And the first card is the trickle-through 386 00:19:48,280 --> 00:19:51,760 Speaker 9: scenario where we're going to see more LNG shipments going 387 00:19:51,820 --> 00:19:54,380 Speaker 9: through Hormuz through the U.S. 388 00:19:54,460 --> 00:19:55,280 Speaker 5: Protected route. 389 00:19:55,960 --> 00:20:00,430 Speaker 9: This is, I think, what the UAE has been doing. 390 00:20:00,750 --> 00:20:02,770 Speaker 9: And so I think the reason why Qatar was not 391 00:20:02,810 --> 00:20:06,190 Speaker 9: doing it was potentially more for political reason than for 392 00:20:06,290 --> 00:20:10,030 Speaker 9: technical or operational reason. And the second car is that 393 00:20:10,369 --> 00:20:13,330 Speaker 9: Qatar Energy also has a project in the U.S., the 394 00:20:13,350 --> 00:20:16,669 Speaker 9: Golden Pass LNG project, which is likely to ramp up. 395 00:20:18,230 --> 00:20:21,230 Speaker 9: So far, it has been disappointing in terms of number 396 00:20:21,250 --> 00:20:24,710 Speaker 9: of cargoes that have been sailed. So providing there are 397 00:20:24,750 --> 00:20:27,709 Speaker 9: no technical reasons, we could see more cargoes heading to Europe. 398 00:20:27,730 --> 00:20:32,100 Speaker 3: So in October, how prepared is Germany for winter, given 399 00:20:32,119 --> 00:20:34,660 Speaker 3: that they've busted the relationship with Russia? Yeah. 400 00:20:35,310 --> 00:20:40,169 Speaker 9: So you remember that during the Ukraine-Russia crisis, the government 401 00:20:40,570 --> 00:20:43,959 Speaker 9: in Germany had asked its state-owned company to take action 402 00:20:44,760 --> 00:20:49,179 Speaker 9: and basically go after any spot market, spot cargoes in 403 00:20:49,220 --> 00:20:52,479 Speaker 9: the market, even at a very, very high price, to 404 00:20:52,540 --> 00:20:55,530 Speaker 9: attract them into Germany. And a few days ago, the 405 00:20:55,550 --> 00:20:57,570 Speaker 9: German government asked the same thing, to. 406 00:20:57,470 --> 00:20:59,270 Speaker 5: Be in a more. 407 00:20:59,910 --> 00:21:03,270 Speaker 9: relaxed position when it comes to storage because Germany is 408 00:21:03,290 --> 00:21:07,100 Speaker 9: the country in Europe right now that has among the 409 00:21:07,119 --> 00:21:08,560 Speaker 9: lowest storage inventories. 410 00:21:09,460 --> 00:21:12,500 Speaker 6: So how does Europe hedge, if at all, as winter 411 00:21:12,960 --> 00:21:13,760 Speaker 6: quickly approaches? 412 00:21:16,770 --> 00:21:19,670 Speaker 9: There is always the unknown component of the weather that 413 00:21:20,109 --> 00:21:21,070 Speaker 9: none of us control. 414 00:21:21,210 --> 00:21:21,490 Speaker 3: Right. 415 00:21:22,170 --> 00:21:28,199 Speaker 9: Providing that it's not such a long weather, not cold weather, 416 00:21:28,480 --> 00:21:30,520 Speaker 9: I think we need to look at supply and demand. 417 00:21:30,600 --> 00:21:34,600 Speaker 9: On the supply side, US LNG projects are still ramping up. 418 00:21:34,680 --> 00:21:39,850 Speaker 9: Corpus Christi, Plaquemine. I just mentioned Golden Pass. This is 419 00:21:40,070 --> 00:21:43,169 Speaker 9: additional volumes likely to hit the markets. And then we 420 00:21:43,190 --> 00:21:47,490 Speaker 9: have a new wave of US energy projects into 2027 421 00:21:47,490 --> 00:21:50,209 Speaker 9: that could add supply and elsewhere around the world. What 422 00:21:50,230 --> 00:21:52,450 Speaker 9: you need to understand is that all the suppliers right 423 00:21:52,470 --> 00:21:56,060 Speaker 9: now have an interest to max out their capacity and 424 00:21:56,210 --> 00:21:58,240 Speaker 9: sell as much as possible because prices are high. 425 00:21:58,780 --> 00:22:04,320 Speaker 3: Gas up. Excuse me. A gallon of gasoline up. Oil up. 426 00:22:04,660 --> 00:22:11,670 Speaker 3: Brent 105. Diesel up. Why isn't NG1, natural gas... Why 427 00:22:11,730 --> 00:22:14,550 Speaker 3: is that price not up like everything else on the planet? 428 00:22:15,430 --> 00:22:16,710 Speaker 5: So it's a regional price. 429 00:22:16,790 --> 00:22:17,210 Speaker 8: The U.S. 430 00:22:17,270 --> 00:22:20,230 Speaker 9: Price on Rehub is only around $ 3 per million BTU 431 00:22:20,650 --> 00:22:23,540 Speaker 9: because the U.S. has an abundance of natural gas. When 432 00:22:23,560 --> 00:22:26,800 Speaker 9: you look at Europe and Asia, because they are importing nations, 433 00:22:27,280 --> 00:22:29,800 Speaker 9: we are looking at much higher prices. The spot market 434 00:22:29,840 --> 00:22:31,840 Speaker 9: right now in Asia and Europe is above $ 20 per 435 00:22:31,859 --> 00:22:32,860 Speaker 9: million BTU. 436 00:22:32,880 --> 00:22:34,560 Speaker 5: It went up recently at $ 25 per million BTU. 437 00:22:38,960 --> 00:22:44,150 Speaker 9: But we're seeing a big disparity because of the different 438 00:22:44,930 --> 00:22:47,510 Speaker 9: positioning when it comes to hydrocarbon production. 439 00:22:48,510 --> 00:22:52,170 Speaker 6: Within energy, where should we be looking to diversify right now? 440 00:22:53,010 --> 00:22:55,190 Speaker 9: So I'm a big advocate and I've been mentioning that 441 00:22:55,230 --> 00:22:57,580 Speaker 9: for years. I think every country is right now diversifying. 442 00:22:58,530 --> 00:23:02,409 Speaker 9: are doing what I called multi-energy hedging. So it's the 443 00:23:02,490 --> 00:23:05,190 Speaker 9: idea that because there is so much uncertainty in terms 444 00:23:05,250 --> 00:23:09,240 Speaker 9: of different energies and on the demand side too, countries 445 00:23:09,300 --> 00:23:12,500 Speaker 9: are diversifying their fuels, but also they're different kind of 446 00:23:12,840 --> 00:23:18,260 Speaker 9: looking at new energies, diversifying in terms of entry points 447 00:23:18,980 --> 00:23:26,120 Speaker 9: Inside their countries, shipping routes, sources, countries as a supplier. 448 00:23:26,140 --> 00:23:29,470 Speaker 5: So a lot of diversification. I don't think. 449 00:23:29,290 --> 00:23:32,010 Speaker 6: Fuel switching is not an easy turn. I mean, doesn't 450 00:23:32,030 --> 00:23:32,790 Speaker 6: that take time? 451 00:23:33,830 --> 00:23:34,070 Speaker 3: Yes. 452 00:23:34,190 --> 00:23:36,750 Speaker 9: So in the past, we used to do more coal 453 00:23:36,790 --> 00:23:37,630 Speaker 9: to gas switching. 454 00:23:38,970 --> 00:23:41,040 Speaker 5: Right now, with this crisis, we've seen. 455 00:23:40,840 --> 00:23:44,580 Speaker 9: Some countries potentially returning to coal for power generation. 456 00:23:44,600 --> 00:23:44,780 Speaker 3: Hmm. 457 00:23:45,270 --> 00:23:49,780 Speaker 9: Or keeping coal longer because either they have domestic coal, 458 00:23:50,300 --> 00:23:52,920 Speaker 9: which is cheaper and doesn't need to be imported, but 459 00:23:53,000 --> 00:23:54,460 Speaker 9: it's not great for the environment. 460 00:23:55,320 --> 00:23:57,570 Speaker 3: Your thoughts on diesel? Maybe you have to remind me, 461 00:23:57,590 --> 00:23:59,310 Speaker 3: but I don't buy it for a minute. You're expert 462 00:23:59,390 --> 00:24:01,970 Speaker 3: on this. Yes. Your thoughts on a gallon of diesel gas? 463 00:24:02,420 --> 00:24:04,020 Speaker 9: You know, what was interesting to me is that we 464 00:24:04,040 --> 00:24:06,000 Speaker 9: had this debate last week about a. 465 00:24:06,180 --> 00:24:09,649 Speaker 5: Ban or no ban. From the Trump administration. From the 466 00:24:09,670 --> 00:24:10,629 Speaker 5: Trump administration. 467 00:24:10,970 --> 00:24:13,230 Speaker 9: And, you know, many voices raised to say that it 468 00:24:13,270 --> 00:24:16,050 Speaker 9: would actually raise the prices. And so I think there 469 00:24:16,090 --> 00:24:19,190 Speaker 9: is an understanding on the policy side now in the U.S. 470 00:24:19,250 --> 00:24:22,010 Speaker 9: that whether you talk about an LNG ban or a 471 00:24:22,050 --> 00:24:24,649 Speaker 9: diesel ban, this is going to be even more negative 472 00:24:25,310 --> 00:24:25,800 Speaker 9: for the U.S. 473 00:24:25,840 --> 00:24:26,230 Speaker 1: Economy. 474 00:24:26,960 --> 00:24:31,159 Speaker 9: And I think momentarily prices are higher, but it's not 475 00:24:31,180 --> 00:24:33,810 Speaker 9: going to last because globally we see an abundance of 476 00:24:33,890 --> 00:24:35,810 Speaker 9: energy on the LNG or on the oil side. 477 00:24:36,500 --> 00:24:39,280 Speaker 3: Let's see Paul DeGuzman. Thank you so much. 478 00:24:39,420 --> 00:24:44,350 Speaker 1: This is the Bloomberg Surveillance Podcast, available on Apple, Spotify, 479 00:24:44,460 --> 00:24:48,730 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 480 00:24:48,730 --> 00:24:54,170 Speaker 1: 7 to 10 a.m. Eastern, on Bloomberg.com, the iHeartRadio app, TuneIn, 481 00:24:54,470 --> 00:24:57,550 Speaker 1: and the Bloomberg Business app. You can also watch us 482 00:24:57,630 --> 00:25:01,650 Speaker 1: live every weekday on YouTube and always on the Bloomberg Terminal. 483 00:25:04,890 --> 00:25:05,690 Speaker 1: Thank you.