WEBVTT - ‘Clerical Error’ in Lyft Outlook Triggered 67% Jump 0:00:02.400 --> 0:00:10.520 Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg business 0:00:10.560 --> 0:00:13.760 Week inside from the reporters and editors who bring you 0:00:13.840 --> 0:00:18.159 America's most trusted business magazine, plus global business, finance and 0:00:18.239 --> 0:00:22.680 tech news. The Bloomberg Business Week Podcast with Carol Messer 0:00:22.840 --> 0:00:26.000 and Tim Stenebeck from Bloomberg Radio. 0:00:26.800 --> 0:00:28.000 I s what we'd like to call kind of a 0:00:28.240 --> 0:00:31.040 well moment happened first in the aftermarket last night. 0:00:31.160 --> 0:00:33.240 Still going on, Tim safe to say today's straight. 0:00:33.360 --> 0:00:36.360 Yeah, we're talking about Lyft, the stock Johns Carroll sixty 0:00:36.400 --> 0:00:39.640 seven percent and after hours trading. After saying margins initially 0:00:39.680 --> 0:00:41.960 we're set to expand this year by an eyewatering five 0:00:42.040 --> 0:00:45.280 hundred at basis points. Well, it turns out Lift did 0:00:45.320 --> 0:00:48.680 have a strong earnings report, just not that strong when 0:00:48.720 --> 0:00:50.600 it came to its forecast on margins. 0:00:51.280 --> 0:00:53.239 Well, look, first of all, it's on me. There are 0:00:53.280 --> 0:00:54.800 a lot of eyes on this press release. But at 0:00:54.840 --> 0:00:57.040 the end of the day, my bad. But look, I 0:00:57.040 --> 0:00:59.840 don't want it to take anything away from the butt 0:01:00.280 --> 0:01:03.760 kicking performance that the business did thanks to all of 0:01:03.760 --> 0:01:06.360 our employees and thanks to millions of drivers. I mean, look, 0:01:06.400 --> 0:01:09.640 we had our financially strongest quarter we have ever had, 0:01:10.319 --> 0:01:13.360 and I'm super excited about with. 0:01:13.440 --> 0:01:16.800 The clerical error around the gig economy and in financial markets. 0:01:16.840 --> 0:01:19.080 Let's get to Bloomberg Technology co host ed La Low 0:01:19.120 --> 0:01:22.160 inner San Francisco Bureau, And first of all, props for 0:01:22.240 --> 0:01:24.960 him saying it's on me, my bad, got it, Love it, 0:01:25.800 --> 0:01:28.600 and far be it from us, because we all make mistakes. 0:01:29.160 --> 0:01:30.840 You have never made a mistake, Carol, so you don't 0:01:30.840 --> 0:01:34.640 know what I've made, many, many, many, But this is important. 0:01:34.640 --> 0:01:37.000 How many eyes saw that release before it went out? 0:01:37.160 --> 0:01:39.720 I mean, how the heck does this kind of happen? 0:01:39.800 --> 0:01:42.040 And I don't know, how are you thinking about it? 0:01:42.080 --> 0:01:44.479 You know, here we are the morning or afternoon after. 0:01:45.319 --> 0:01:48.160 I mean, like I put it straight to David Richer 0:01:48.240 --> 0:01:50.880 and he gave me a straight answer. And you know, 0:01:51.000 --> 0:01:55.680 for our global audience, it's worth noting that David's held 0:01:55.680 --> 0:01:59.160 in high regard. He's a thoroughly nice guy, and you know, 0:01:59.240 --> 0:02:02.240 he fronted up and answered our questions. But it's simply 0:02:02.320 --> 0:02:06.040 human error, you know. And what we went on to 0:02:06.080 --> 0:02:09.919 ask him frankly, is well, what about the CFO, Aaron Brewer? 0:02:10.040 --> 0:02:12.960 Is her job safe? Is the finance team's job safe? 0:02:13.040 --> 0:02:15.720 Because this had a real market impact. But it's as 0:02:15.720 --> 0:02:18.519 simple as the press release and the shareholder debt goes 0:02:18.520 --> 0:02:21.640 out with five hundred basis points on the analysts call 0:02:22.000 --> 0:02:24.680 the CFO reads are prepared and remarks and says fifty 0:02:24.760 --> 0:02:27.440 basis points, and the analysts asked the question and says, 0:02:27.440 --> 0:02:31.640 hold on, you said fifty, but the release said five hundred, 0:02:31.680 --> 0:02:33.120 and they admitted it was a mistake. 0:02:33.160 --> 0:02:34.320 And it's as simple as that. 0:02:35.040 --> 0:02:37.800 Hey, you know, it's interesting. Sec chair Gary Gensler was 0:02:37.800 --> 0:02:40.400 on Bloomberg TV a little earlier, ed with David West, 0:02:40.440 --> 0:02:42.960 and he declined a comment on Lift's clerical error, but 0:02:43.000 --> 0:02:47.720 he did say, quote, public companies are responsible for accuracy 0:02:47.919 --> 0:02:51.000 of filings, so they're responsible. 0:02:51.840 --> 0:02:52.200 They are. 0:02:52.440 --> 0:02:55.680 And look what LIFT will be doing. What David Richard 0:02:55.720 --> 0:02:58.520 told us they're doing. What they are definitely doing is 0:02:58.560 --> 0:03:01.280 the finance in internal order team will have to reflect 0:03:01.280 --> 0:03:02.079 on what happened. 0:03:02.520 --> 0:03:05.040 You know. As part of this exercise, Bloomberg. 0:03:04.639 --> 0:03:08.360 Interviewed a number of securities experts, and I think that 0:03:08.440 --> 0:03:13.239 the general consensuses they moved quickly to correct their mistake. Clearly, 0:03:13.760 --> 0:03:16.799 if this move had been to the downside, I think 0:03:16.840 --> 0:03:19.520 we'd probably be having a bit of a more severe conversation, 0:03:20.040 --> 0:03:21.560 but as it happens, this for. 0:03:21.520 --> 0:03:23.440 Me is the wild part of this story. 0:03:23.919 --> 0:03:27.680 Yes, the stock spike sixty seven percent in after hours, 0:03:27.880 --> 0:03:30.320 but when they corrected their mistake, it held gains at 0:03:30.360 --> 0:03:31.320 seventeen percent. 0:03:31.800 --> 0:03:33.720 In today's session, it has traded. 0:03:33.400 --> 0:03:36.480 Above thirty percent for most of the day, which puts 0:03:36.520 --> 0:03:39.240 Lyft on track for its biggest jump ever. I don't 0:03:39.280 --> 0:03:42.560 think the market is lingering on this clerical mistake. I 0:03:42.600 --> 0:03:45.440 think they're looking at the earnings gone and the forecast 0:03:45.520 --> 0:03:47.880 and saying, actually, lifted pretty well. 0:03:48.720 --> 0:03:49.200 Agreed. 0:03:49.640 --> 0:03:52.160 I totally agreed, because I think when I came in 0:03:52.200 --> 0:03:54.600 this morning and when it started trading, I thought it's 0:03:54.600 --> 0:03:56.040 going to be you know, up, maybe a little bit, 0:03:56.120 --> 0:03:58.800 or maybe it'll be even down, who knows. But to 0:03:58.880 --> 0:04:00.760 see it up still about the threaty one thirty two 0:04:00.800 --> 0:04:06.640 percent as we are speaking, it's pretty impressive. So let's 0:04:06.680 --> 0:04:11.000 talk about Lift's business living up to the expectations of 0:04:11.040 --> 0:04:14.200 what investors wanted, and then some in many ways talk 0:04:14.240 --> 0:04:15.160 to us about the business. 0:04:15.680 --> 0:04:17.599 Yeah, I think that at a minimum that's fair. And 0:04:17.720 --> 0:04:19.400 I'm so glad to be on the show with you guys, 0:04:19.400 --> 0:04:22.120 because we had a great conversation earlier this week about 0:04:22.120 --> 0:04:24.760 the gig economy, and what I was writing about in 0:04:24.800 --> 0:04:27.719 the Tech Daily was that we were worried about Lyft 0:04:27.760 --> 0:04:30.760 because it doesn't have as wide or diverse a business 0:04:30.800 --> 0:04:35.760 as Uber. There's no food component, and Uber seems to 0:04:35.760 --> 0:04:38.680 be doing really, really well. So you can look at 0:04:38.720 --> 0:04:40.720 it one of two ways. Would Lift go through the 0:04:40.760 --> 0:04:44.160 same positive experience the same trends that Uber did, or 0:04:44.240 --> 0:04:46.799 is Uber going to continue taking market share from Lyft? 0:04:47.040 --> 0:04:49.359 But Lift stood up on its own two feet. You know, 0:04:49.440 --> 0:04:52.120 there is evidence that ridership was strong and the demand 0:04:52.160 --> 0:04:55.400 based on their growth booking out Booking's outlook is good. 0:04:55.720 --> 0:04:57.839 But we also talked about this idea of the take rate, 0:04:58.200 --> 0:05:00.800 which is the amount of money that company makes per 0:05:00.880 --> 0:05:04.520 transaction on their platform. And David Risher, since he's come in, 0:05:04.560 --> 0:05:07.440 has made Lift a bit of a mean, not green 0:05:07.600 --> 0:05:12.320 but pink machine, and they are starting now to get 0:05:12.520 --> 0:05:15.960 positive signs around free cash flow. These are boring company things, 0:05:16.240 --> 0:05:17.560 but it's important. 0:05:17.720 --> 0:05:19.520 Isn't there an issue If the take rate ends up 0:05:19.560 --> 0:05:22.320 being too big, then you're not going to attract drivers 0:05:22.320 --> 0:05:26.800 to the same extent that competing company would or competing service. 0:05:26.839 --> 0:05:29.120 I mean these drivers are they're free agents. They can 0:05:29.160 --> 0:05:29.760 go anywhere. 0:05:30.440 --> 0:05:32.960 Yeah, And earlier in the week I said to you guys, 0:05:33.200 --> 0:05:35.640 let's look at the driver supply numbers. So for Uber 0:05:35.640 --> 0:05:37.720 that was up thirty five percent, not to the same 0:05:37.720 --> 0:05:41.000 extent for Lift. But they're seeing drivers flying increase. Where 0:05:41.000 --> 0:05:43.799 are those drivers coming from? Well, there is some evidence 0:05:43.839 --> 0:05:46.240 actually based on a conversation I had with David, that 0:05:46.279 --> 0:05:48.640 they might be people that lost their job but found 0:05:48.680 --> 0:05:51.680 work in the gig economy quickly. But you're on the 0:05:51.720 --> 0:05:54.200 take rate. A part of it as well is also 0:05:54.279 --> 0:05:57.159 the removal of the heavy incentives that Lift had. You know, 0:05:57.279 --> 0:05:59.680 Lift was only able to be competitive with Uber by 0:05:59.640 --> 0:06:02.880 basically saying, we'll cut prices, we'll offer promos, we'll give 0:06:02.920 --> 0:06:05.600 you a gift voucher, we'll give you a credit if 0:06:05.680 --> 0:06:09.080 you use a particular airline. When you scale back on 0:06:09.160 --> 0:06:11.440 those things, you get a better sense of how you 0:06:11.440 --> 0:06:14.320 can make money in that marketplace. And I think Lift 0:06:14.320 --> 0:06:15.400 shows some evidence of that. 0:06:15.720 --> 0:06:17.320 I feel like too, and I want to kind of 0:06:17.360 --> 0:06:20.280 maybe roll Uber into this. And there's some more specific 0:06:20.360 --> 0:06:22.240 stuff that we want to talk about with Uber their 0:06:22.279 --> 0:06:24.880 stock buyback, But it feels like Lift Uber kind of 0:06:24.920 --> 0:06:28.760 growing up, like coming off the pandemic, right, and how 0:06:28.800 --> 0:06:29.760 that impacted them. 0:06:29.800 --> 0:06:33.479 But is that the case, like walk us through in terms. 0:06:33.200 --> 0:06:36.080 Of I like what you said about what's going on 0:06:36.120 --> 0:06:39.680 at Lift that the CEO leaner, meaner machine. 0:06:39.200 --> 0:06:42.000 Here does sound like to some extent they're growing up 0:06:42.000 --> 0:06:42.480 a little bit. 0:06:43.120 --> 0:06:45.680 Yeah, I mean I was a bit unkind about Lift 0:06:45.760 --> 0:06:48.240 saying earlier in the week and today they don't have 0:06:48.320 --> 0:06:51.400 a very diverse business. They do offer other mobility things, 0:06:51.400 --> 0:06:54.200 and Tim made the point on bikes, right, and David 0:06:54.279 --> 0:06:56.840 Risher himself used a Lift bike to get to the 0:06:56.880 --> 0:07:01.000 bureau today for that interview, and they're proving that that 0:07:01.200 --> 0:07:05.000 is working. But the definitive story right now, and maybe 0:07:05.000 --> 0:07:07.440 one reason why the stock is up so much is 0:07:07.440 --> 0:07:10.440 that there is evidence that ride hailing or ride sharing 0:07:10.960 --> 0:07:14.200 is not just a fad, it is a stable market 0:07:14.320 --> 0:07:18.040 in the wake of the pandemic, and Uber spoke to 0:07:18.080 --> 0:07:21.680 the corporate side of that story. Lift is basically resonating 0:07:21.720 --> 0:07:25.920 with a particular age group demographic cities like San Francisco. 0:07:26.880 --> 0:07:28.520 But ed you bring up a really good point that 0:07:28.560 --> 0:07:32.120 we talked a lot about before the pandemic. I remember 0:07:32.160 --> 0:07:35.920 speaking to people twenty eighteen twenty nineteen, as these companies 0:07:35.960 --> 0:07:39.000 were hitting the public markets for the first time, and 0:07:39.120 --> 0:07:42.480 they would say things like people who are millennials and 0:07:42.520 --> 0:07:44.920 Gen Z, they're not going to own cars because they're 0:07:44.920 --> 0:07:46.800 going to be able to get cars anywhere on demand. 0:07:47.000 --> 0:07:49.600 The pandemic shifted that. Are we back to that conversation 0:07:49.680 --> 0:07:53.480 where you know there is this trend of people foregoing 0:07:53.520 --> 0:07:56.000 car ownership and just relying on these services or is 0:07:56.360 --> 0:07:57.200 that not going to happen? 0:07:57.640 --> 0:08:00.320 I think your right to recall those trends from twenty 0:08:00.480 --> 0:08:02.920 eighteen nineteen. I can't even remember what I talked about yesterday. 0:08:04.000 --> 0:08:05.080 He's got a great memory. 0:08:05.680 --> 0:08:09.160 But what you're doing is tying together the whole point 0:08:09.200 --> 0:08:11.760 of this week, which is why is the gig economy 0:08:11.840 --> 0:08:15.280 doing this in a high rate environment. Yes, you're right, 0:08:15.800 --> 0:08:19.360 car sales are under pressure, particularly electric vehicles, because the 0:08:19.400 --> 0:08:23.960 high rate environment makes the financing of those purchases less 0:08:23.960 --> 0:08:27.680 than attractive. Your car payment, not just the buying of 0:08:27.720 --> 0:08:30.120 the car or the leasing, but the running of it 0:08:30.160 --> 0:08:33.160 is the most significant outgoing you have after your mortgage, 0:08:33.160 --> 0:08:35.640 if you have a mortgage or rent. And I do 0:08:35.679 --> 0:08:39.080 think that that's a really good point, and you have 0:08:39.160 --> 0:08:42.240 to take the idea that consumers appear to be willing 0:08:42.320 --> 0:08:46.120 to spend on convenience with other data sets credit card 0:08:46.920 --> 0:08:49.280 data right now is a little bit worrying, you know. 0:08:49.320 --> 0:08:51.079 I think we see that trickling up. So while the 0:08:51.120 --> 0:08:55.520 consumer's strong, let's continue to watch this ridership and willing 0:08:55.559 --> 0:08:57.960 to spend on convenience. And I think we talked about 0:08:57.960 --> 0:08:59.520 earlier this week. Right, well, what if we do have 0:08:59.559 --> 0:09:02.800 a recesson what if Lift and Uber benefit? Right you 0:09:02.880 --> 0:09:06.840 stop spending on big ticket items like vacations and dinners 0:09:06.840 --> 0:09:09.520 out at restaurants. You start getting takeout and delivery, which 0:09:09.600 --> 0:09:12.240 Lift does not have. But you might take a ride 0:09:12.280 --> 0:09:14.200 in a lift rather than I don't know, I don't 0:09:14.200 --> 0:09:16.080 know what the alternative would be, but it's a good 0:09:16.080 --> 0:09:19.280 existential question for them, along with well why doesn't somebody 0:09:19.320 --> 0:09:21.400 that's bigger than them that does other stuff by them? 0:09:21.600 --> 0:09:23.320 And we also got to that in the interview too. 0:09:23.520 --> 0:09:26.880 Yeah, hey listen quick, Uber up about twelve percent here, 0:09:26.920 --> 0:09:31.640 just off its highs at a record first share buy back. Ever, 0:09:31.760 --> 0:09:35.439 it's a big one seven billion dollars share. But what's 0:09:35.520 --> 0:09:37.000 going on here? I mean interesting? 0:09:37.040 --> 0:09:40.839 I certainly got get Bi's man deep sing on the show. 0:09:40.920 --> 0:09:44.559 He's always felt that these gig economy apps are undervalued. 0:09:44.920 --> 0:09:47.160 You know, Uber had its first year of profit. It 0:09:47.200 --> 0:09:49.520 has proved the doubt is wrong on the business model. 0:09:49.800 --> 0:09:52.720 It's free cash flow is improved. What do investors love? 0:09:52.760 --> 0:09:54.439 They love sweeteners, and this is one hell of a 0:09:54.440 --> 0:09:56.080 sweetener to start twenty twenty four. 0:09:56.880 --> 0:10:00.360 Yeah, pretty impressive and like we said, definitely getting noticed 0:10:00.679 --> 0:10:01.480 among investors. 0:10:01.559 --> 0:10:03.040 Part of the S and P five hundred now two. 0:10:03.160 --> 0:10:04.920 Can't forget that it was added just a few. 0:10:04.800 --> 0:10:06.240 Months ago at a record as well. 0:10:06.280 --> 0:10:08.600 Hey listen, Ed, thank you as always, great interview and 0:10:08.640 --> 0:10:10.360 great to be able to talk with you about it. 0:10:10.480 --> 0:10:13.320 Ed Ludlow, he's co host at Bloomberg Technology and Bloomberg Television. 0:10:13.400 --> 0:10:17.280 Catch him and Caroline Hyde at eleven am Wall Street 0:10:17.280 --> 0:10:20.920 Time on Bloomberg TV. For Bloomberg Technology. He of course 0:10:20.960 --> 0:10:22.400 joined us from our San Francisco bureau. 0:10:22.480 --> 0:10:25.760 You know, it's refreshing to see executives make mistakes and 0:10:26.160 --> 0:10:26.360 like this. 0:10:26.559 --> 0:10:28.760 You know, well, you know, stuff happens. What are you 0:10:28.800 --> 0:10:30.000 going to say? Like, what would do? 0:10:30.160 --> 0:10:30.319 Right? 0:10:30.480 --> 0:10:32.720 I agree with you, Like, yep, we messed up. We 0:10:32.760 --> 0:10:34.199 corrected as soon as we noticed it. 0:10:34.920 --> 0:10:37.920 Maybe we stopped saying basis points for certain percentages and 0:10:37.960 --> 0:10:39.959 just you know, stick the percentage of zero. 0:10:40.040 --> 0:10:42.320 Yeah, that would have I don't know, maybe, I don't know. 0:10:42.440 --> 0:10:43.000 I'm not to see it. 0:10:43.120 --> 0:10:45.000 All I know is when that came down last night, 0:10:45.040 --> 0:10:48.040 we saw this a stock reaction understandably, so we're just like, WHOA, 0:10:48.120 --> 0:10:48.679 what's going on? 0:10:48.720 --> 0:10:51.120 My jaw is still dropped for thirty percent increase. 0:10:50.840 --> 0:10:52.280 Today, it's still pretty impressive. 0:10:53.600 --> 0:10:57.120 You're listening to the Bloomberg Business Week podcast. Catch us 0:10:57.160 --> 0:11:00.400 Live weekday afternoons from two to five pm Eastern. Listen 0:11:00.440 --> 0:11:02.599 on Apple card Play and then Bright Auto with a 0:11:02.640 --> 0:11:05.679 Bloomberg Business act or wan't just live on YouTube? 0:11:07.040 --> 0:11:07.760 What people have. 0:11:07.760 --> 0:11:10.360 Talked about kind of years of regret over bad calls 0:11:10.400 --> 0:11:10.719 when it. 0:11:10.640 --> 0:11:14.600 Comes to forecasting about the US economy, recession calls, inflation calls, 0:11:14.640 --> 0:11:15.720 transitory anyone. 0:11:15.760 --> 0:11:16.800 By the way, it's not been. 0:11:16.679 --> 0:11:19.960 Easy even for Fedchair J Powell. Remember back in November 0:11:20.000 --> 0:11:23.240 twenty twenty one when Chair Powell addressed the Senate Banking 0:11:23.280 --> 0:11:26.240 Committee about that testy word transitory. 0:11:27.360 --> 0:11:30.640 I think clearly has been met now, you know, you're 0:11:30.720 --> 0:11:34.240 absolutely right, inflation has run well above two percent for 0:11:34.320 --> 0:11:37.560 long enough. The word transitory has different meanings to different people. 0:11:37.920 --> 0:11:40.120 I think it's it's probably a good time to retire 0:11:40.160 --> 0:11:43.079 that word and try to explain more clearly what we mean. 0:11:43.360 --> 0:11:44.839 All Right, it's not easy being the FED chair. 0:11:44.920 --> 0:11:45.120 Really. 0:11:45.120 --> 0:11:47.160 Many the end of zero rates ushering in a new 0:11:47.200 --> 0:11:51.160 era of investment era in particular in Bloomberg Markets, it's 0:11:51.200 --> 0:11:53.280 the mistakes issue. How many missed the market over the 0:11:53.320 --> 0:11:55.079 past two years. I love that you guys are doing 0:11:55.520 --> 0:11:57.800 a mistakes issue with us as the editor of Bloomberg 0:11:57.800 --> 0:12:00.400 Markets magazine, Pat Regne or here in our Bloomberg Directive 0:12:00.400 --> 0:12:03.959 broker studio. A lot of people missed. This was an 0:12:04.000 --> 0:12:07.199 air unlike and most had never seen before. 0:12:07.640 --> 0:12:10.560 Yeah, we we spent a whole issue looking at mistakes, 0:12:10.600 --> 0:12:12.120 but one of the things we wanted to focus on 0:12:12.280 --> 0:12:15.880 was sort of what happened in this time period after 0:12:15.920 --> 0:12:21.520 the liftoff from rates, which seems to have scrambled everybody's compass. 0:12:22.480 --> 0:12:24.760 And it's not just a matter of you know, I 0:12:24.800 --> 0:12:27.400 think at first people weren't sure how bearished to be, 0:12:27.440 --> 0:12:29.680 and then maybe they were wrong about how bullish to be. 0:12:29.720 --> 0:12:32.360 And we've just sort of, uh watched like all of 0:12:32.400 --> 0:12:37.400 these different switchbacks, both for forecasters, economists, traders, I mean 0:12:37.440 --> 0:12:38.800 just kind of you know, how do you get a 0:12:38.800 --> 0:12:42.840 handle on big tech stocks, for example. So we just 0:12:42.880 --> 0:12:44.600 went back and had to look at this and part 0:12:44.640 --> 0:12:47.080 part of the logic of the story, but also the 0:12:47.120 --> 0:12:49.960 whole issue was not to kind of point and laugh, 0:12:50.000 --> 0:12:51.360 although that can be fun. 0:12:51.800 --> 0:12:54.360 Uh I think I think. 0:12:54.200 --> 0:12:58.680 There's a German word for you'd. 0:12:57.040 --> 0:12:58.720 Also be pointing. Get a lot of people. 0:12:58.600 --> 0:13:02.160 Absolutely, you know, it's it's really we have the instinct 0:13:02.200 --> 0:13:06.360 that if you're a trader, if you're in finance, if 0:13:06.360 --> 0:13:08.040 you're in market's, mistakes. 0:13:08.000 --> 0:13:10.199 Are a part of your work. 0:13:10.679 --> 0:13:14.280 And everyone I've ever met who's good at it learns 0:13:14.280 --> 0:13:16.199 from it and they'll talk as much about their mistakes. 0:13:16.200 --> 0:13:18.640 So that's okay. So that's a really good point, and 0:13:18.679 --> 0:13:20.719 that's a big takeaway. Another big takeaway that I had 0:13:20.760 --> 0:13:24.120 after reading this was that there is so much we 0:13:24.400 --> 0:13:27.360 just don't know, and as Carol mentioned, that's what makes 0:13:27.360 --> 0:13:29.760 a market. And we have people come on the program 0:13:29.800 --> 0:13:32.400 every day who talk with conviction that, Okay, this is 0:13:32.440 --> 0:13:34.040 what the Fed's gonna do, this is what rates are 0:13:34.040 --> 0:13:35.599 going to do, this is what inflation is going to do, 0:13:35.640 --> 0:13:37.040 this is what the stock market is going to do 0:13:37.520 --> 0:13:37.960 and they. 0:13:37.960 --> 0:13:39.200 Really seem to believe it. 0:13:39.200 --> 0:13:41.959 It's like they know it got it wrong. I'm like, 0:13:42.040 --> 0:13:43.640 you know what, this is what happens, right like. 0:13:44.160 --> 0:13:46.160 And it's okay, you're saying that's that's the way, that's 0:13:46.200 --> 0:13:47.080 the way this works. 0:13:47.280 --> 0:13:47.480 Yeah. 0:13:47.559 --> 0:13:52.520 You know. The great economist Kenneth Arrow told the story 0:13:52.520 --> 0:13:55.800 and his memoirs about doing weather reports for the army 0:13:56.440 --> 0:14:00.200 and the general wanted to know what's the weather going 0:14:00.280 --> 0:14:03.640 to be like two weeks before the invasion and the 0:14:03.679 --> 0:14:06.840 answer was, we cannot make a forecast two weeks before 0:14:06.880 --> 0:14:09.320 the invasion. And the general said said to him, we 0:14:09.480 --> 0:14:12.880 understand that, but we need it for planning purposes. And 0:14:13.600 --> 0:14:16.080 I love that story because we all need forecasts and 0:14:16.160 --> 0:14:18.520 we all need to have a theory for planning purposes. 0:14:18.520 --> 0:14:19.960 We can't get out of that in the morning if 0:14:19.960 --> 0:14:22.080 we if we don't have if we don't have a forecast. 0:14:22.320 --> 0:14:24.240 I thought that was really interesting, right because we talk 0:14:24.280 --> 0:14:27.120 about forecasts all the time, whether it's whether it's earnings, 0:14:27.120 --> 0:14:30.400 whether it's economic forecast. This idea of like there needs 0:14:30.560 --> 0:14:32.720 you need this to kind of figure out a narrative, 0:14:32.760 --> 0:14:37.040 because within that narrative, there's probably gonna be some really 0:14:37.120 --> 0:14:38.840 truth to the way forward. 0:14:38.880 --> 0:14:43.080 Right, Yes, and then you and or at least it's 0:14:43.080 --> 0:14:46.480 a way of like gaming out catastrophes and kind of 0:14:46.560 --> 0:14:48.600 you know, planning out what are what are going to 0:14:48.600 --> 0:14:51.040 be your contingency plans and kind of trying to think 0:14:51.240 --> 0:14:54.240 think ahead to the future. That having been said, you 0:14:54.280 --> 0:14:56.600 can make some pretty disastrously bad traits. 0:14:57.320 --> 0:14:58.920 That's true, That's very true. 0:14:58.960 --> 0:15:00.400 You know what I'm just thinking care of. But how 0:15:00.400 --> 0:15:01.280 do we open the show? 0:15:01.320 --> 0:15:03.600 In the two o'clock hour, we talked about the error 0:15:03.920 --> 0:15:07.120 that lifts CFO made, right. I don't know if you 0:15:07.160 --> 0:15:08.720 saw this path. This is like a perfect day to 0:15:08.720 --> 0:15:10.400 be talking about this issue. 0:15:10.440 --> 0:15:12.600 And you know, this was an. 0:15:12.560 --> 0:15:15.200 Issue where they said they made an error, you know, 0:15:15.240 --> 0:15:18.080 five hundred basis points versus fifty basis points. They literally 0:15:18.160 --> 0:15:20.960 left another zero on there when they made their projection, 0:15:21.000 --> 0:15:23.240 and it caused the stock to move higher. Like these 0:15:23.280 --> 0:15:23.800 things happen. 0:15:23.960 --> 0:15:24.360 That's right. 0:15:24.400 --> 0:15:26.440 And I've never cursed a deadline as much as when 0:15:26.840 --> 0:15:29.640 right after I've closed the mistakes issue that happened. Okay, 0:15:29.680 --> 0:15:34.600 I'm sorry the heck of a story. Seriously, Seriously, the 0:15:34.720 --> 0:15:37.280 lesson don't talk in basis points. 0:15:37.680 --> 0:15:38.520 That's what I said. 0:15:38.920 --> 0:15:42.240 I said, let's go back to old fashioned percentages exactly. 0:15:42.320 --> 0:15:44.960 Well, it's interesting and you guys kind of in doing 0:15:44.960 --> 0:15:47.680 your coverage, you talk about the bond market, you talk 0:15:47.720 --> 0:15:50.360 about the equity market, you talk about the magnificent stuff 0:15:50.440 --> 0:15:53.520 like you really go through because it really, you know, 0:15:54.280 --> 0:15:56.440 you saw it play out throughout all the different markets 0:15:56.440 --> 0:15:57.600 and all the different asset classes. 0:15:57.720 --> 0:15:59.880 Yeah, all kudos to our newsroom because we really worked 0:16:00.080 --> 0:16:03.960 with a lot of the reporters across the Bloomberg newsroom 0:16:04.160 --> 0:16:06.120 and every one of them, you know, I sent out 0:16:06.120 --> 0:16:09.520 the memo asking for mistakes, and everybody had and every 0:16:09.560 --> 0:16:11.800 you know, everybody had a great tale, you know, and 0:16:11.840 --> 0:16:13.640 some of them were probably surprising to a lot of 0:16:13.680 --> 0:16:15.000 people in the US. I mean, one of the I 0:16:15.040 --> 0:16:19.240 think the most interesting ones is the the huge mistake 0:16:19.360 --> 0:16:24.640 made by SBB, the Swedish housing company. We all know 0:16:24.800 --> 0:16:28.520 about everything that's happened in China with property, but this 0:16:28.680 --> 0:16:31.720 was this is at a smaller scale. The ways that 0:16:31.760 --> 0:16:33.720 you can get in trouble kind of thinking that you know, 0:16:33.800 --> 0:16:35.840 an interest rate situation is going to stay the same, 0:16:36.200 --> 0:16:38.640 and you know, you borrow to the hilt expecting that 0:16:38.680 --> 0:16:42.040 the financing will always be there and then suddenly it's not. 0:16:43.160 --> 0:16:45.360 Can we at this point, though, in your opinion, say 0:16:46.120 --> 0:16:47.600 that the FED has made a mistake. 0:16:48.640 --> 0:16:51.520 Well, we we talk about that. It's interesting the fed's 0:16:51.640 --> 0:16:57.480 forecasts were consistently wrong, and yet they seem to be 0:16:58.560 --> 0:17:00.680 it's at least in contention, and that they'll stick the 0:17:00.760 --> 0:17:03.880 landing here, you know. I you know, we'll know when 0:17:03.960 --> 0:17:08.399 we know. But you know, we so far seem to 0:17:08.640 --> 0:17:12.720 continue to have you know, inflation coming down, maybe not 0:17:12.760 --> 0:17:16.080 as fast as everybody expected, and we've been able to 0:17:16.119 --> 0:17:20.840 do it without you know, having painful unemployment like that 0:17:20.960 --> 0:17:23.240 at the moment, that looks great. Now there's a warning 0:17:23.240 --> 0:17:25.040 in the story, and somebody says, it always looks like 0:17:25.040 --> 0:17:26.920 it's going to be a soft landing until it's not right. 0:17:27.080 --> 0:17:29.240 That's right, you know what it thought also about this, 0:17:29.359 --> 0:17:31.280 that the importance of it. And this is why I 0:17:31.320 --> 0:17:34.680 love talking with people who have reported on or been 0:17:34.720 --> 0:17:36.880 investing in a lot of different market cycles. You learn 0:17:36.960 --> 0:17:39.600 each time we go through some crisis or some some 0:17:39.720 --> 0:17:43.440 anomaly or seemingly anomaly, about when we get to another point, 0:17:43.440 --> 0:17:45.879 you're like, well, remember that time, like we were fooled, 0:17:45.880 --> 0:17:47.600 Like I feel like this is so helpful. 0:17:47.640 --> 0:17:48.760 We do learn from all of this. 0:17:49.119 --> 0:17:51.920 Yeah, yeah, it was. 0:17:51.760 --> 0:17:52.000 It was. 0:17:52.040 --> 0:17:53.600 It was fun to do it and to review all 0:17:53.640 --> 0:17:57.600 of these, all of these there's that professionals make all 0:17:57.640 --> 0:18:01.919 the time, and every journalist in the newsroom can has 0:18:01.960 --> 0:18:03.520 their own stories. I can sympathize. 0:18:03.520 --> 0:18:05.720 I already said this is hard for Caroll relate to 0:18:05.760 --> 0:18:08.199 because she's never made a mistake, so I don't know. 0:18:08.359 --> 0:18:10.359 So congratulations for all the time. 0:18:10.560 --> 0:18:14.800 Yeah, no, Crypto, though you left that to another that 0:18:14.880 --> 0:18:17.240 had to be a whole story all on its own, 0:18:17.280 --> 0:18:19.040 and that's actually a fun one because it's like, what, 0:18:20.720 --> 0:18:23.240 you know, what is it still a mistake at fifty thousand. 0:18:26.680 --> 0:18:28.800 Really thoughtful peace as we try to make sense of 0:18:28.800 --> 0:18:30.440 the environment and where we continue to see a fair 0:18:30.480 --> 0:18:32.280 amount of volatility in the narrative. 0:18:32.480 --> 0:18:34.520