1 00:00:00,080 --> 00:00:12,960 Speaker 1: Ye, Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Jay Lee. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:29,000 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Sometimes 5 00:00:29,000 --> 00:00:32,880 Speaker 1: the answers were really basic. Question helps frame a very 6 00:00:32,880 --> 00:00:35,800 Speaker 1: complex market. And I want to bring in Pimcoast Tony 7 00:00:35,840 --> 00:00:39,440 Speaker 1: Krissensei and begin with your very basic question, Tony, and 8 00:00:39,479 --> 00:00:43,440 Speaker 1: it goes as follows, where will rates be in five years? 9 00:00:43,720 --> 00:00:47,360 Speaker 1: And say Europe, in the United States, in Japan walk 10 00:00:47,440 --> 00:00:51,480 Speaker 1: us through you think, well, we what I'm about to say, 11 00:00:51,520 --> 00:00:54,040 Speaker 1: I've said for the last several years, but now we 12 00:00:54,080 --> 00:00:57,080 Speaker 1: will extend the timeline out further. So let's go around 13 00:00:57,120 --> 00:00:59,560 Speaker 1: the world. For the European Central Bank, which has a 14 00:00:59,640 --> 00:01:02,920 Speaker 1: paul the rate today of minus point four percent, permitting 15 00:01:02,960 --> 00:01:06,280 Speaker 1: if you will, the German BIOND trade at minus a 16 00:01:06,360 --> 00:01:09,160 Speaker 1: quart of point. The highest we expected to put as 17 00:01:09,200 --> 00:01:11,520 Speaker 1: policy rat at any time in the next five years 18 00:01:11,600 --> 00:01:14,600 Speaker 1: is zero percent. We would say the same about Japan, 19 00:01:14,720 --> 00:01:18,080 Speaker 1: also around zero. They're both dealing with similar forces, as 20 00:01:18,160 --> 00:01:22,560 Speaker 1: is the United States. Demographics and productivity major forces in 21 00:01:22,600 --> 00:01:25,160 Speaker 1: those and from the United States. Likely there'll be a 22 00:01:25,200 --> 00:01:27,280 Speaker 1: recession at some point in the next five years, and 23 00:01:27,640 --> 00:01:31,959 Speaker 1: when it occurs, it's highly likely that US market interest 24 00:01:32,040 --> 00:01:35,640 Speaker 1: rates treasury yields will collapse towards zero percent, just like 25 00:01:35,680 --> 00:01:38,679 Speaker 1: in Germany, and just like in Japan. They'll be a 26 00:01:38,680 --> 00:01:41,520 Speaker 1: little bit higher, but they'll still be close to zero. Uh. 27 00:01:41,560 --> 00:01:43,680 Speaker 1: And the reason is because of a commitment by the 28 00:01:43,680 --> 00:01:46,800 Speaker 1: Fed to keeping rates in the next recession. They can 29 00:01:46,840 --> 00:01:49,880 Speaker 1: commit all day. What does James Diamond or Brian moynihan 30 00:01:50,000 --> 00:01:53,400 Speaker 1: do with a point eight percent ten year yield? I mean, 31 00:01:53,400 --> 00:01:55,880 Speaker 1: faroll can't even run a show the real yield because 32 00:01:55,880 --> 00:01:58,880 Speaker 1: there's no real yield. But what does serious bankers do 33 00:01:59,160 --> 00:02:02,160 Speaker 1: forget about the economous? What is finance? Well, we have 34 00:02:02,280 --> 00:02:05,040 Speaker 1: some history on this and going back and ten years 35 00:02:05,040 --> 00:02:07,800 Speaker 1: ago when US interest rates were at zero, the so 36 00:02:07,920 --> 00:02:11,720 Speaker 1: called nim net interest margin levels, which one can look 37 00:02:11,760 --> 00:02:14,440 Speaker 1: at by going to the f d i C website. 38 00:02:14,520 --> 00:02:17,880 Speaker 1: They have a quarterly chartbook. They don't change very much. 39 00:02:17,880 --> 00:02:20,760 Speaker 1: They hover around three percentage points and banks find ways 40 00:02:20,840 --> 00:02:23,280 Speaker 1: to make money. And one way they did they protected 41 00:02:23,320 --> 00:02:25,720 Speaker 1: themselves this time around as they kept a low so 42 00:02:25,840 --> 00:02:28,080 Speaker 1: called beta to the federal funds rate. What does that 43 00:02:28,120 --> 00:02:30,840 Speaker 1: mean When the Federal Reserve was raising its policy rate 44 00:02:30,919 --> 00:02:34,080 Speaker 1: from zero to two and a half, banks, as every 45 00:02:34,120 --> 00:02:37,840 Speaker 1: depositor out there probably knows, did not raise the interest 46 00:02:37,960 --> 00:02:40,480 Speaker 1: rate on their deposits. They're probably still learning the zero 47 00:02:40,639 --> 00:02:43,360 Speaker 1: or close to zero and this is help banks to 48 00:02:43,400 --> 00:02:47,840 Speaker 1: maintain a healthy profit margin. So banks have ways to adapt. 49 00:02:47,919 --> 00:02:51,400 Speaker 1: And finally, Uh, they make money these days or fees, 50 00:02:51,520 --> 00:02:54,680 Speaker 1: not necessarily simply the differences and interest rates. So Tony, 51 00:02:54,720 --> 00:02:58,080 Speaker 1: let's talk about the feds next move. It's a really 52 00:02:58,080 --> 00:03:00,359 Speaker 1: interesting question that you've been exploring with the team out 53 00:03:00,360 --> 00:03:01,760 Speaker 1: for a pim cub. It's not just the amount of 54 00:03:01,800 --> 00:03:05,280 Speaker 1: ammunition the Federal Reserve has. It's about how quickly they 55 00:03:05,280 --> 00:03:08,359 Speaker 1: can deploy and how quickly they can get market rights down. 56 00:03:08,680 --> 00:03:10,760 Speaker 1: Walk me through what you guys are talking about the moment. 57 00:03:10,800 --> 00:03:14,400 Speaker 1: When we at pimco's Secular Form annual gathering, we have 58 00:03:14,560 --> 00:03:17,720 Speaker 1: to discern the three to five year outlook. Janet Yellen 59 00:03:17,840 --> 00:03:20,880 Speaker 1: was in tendance and Ben bernanke I was fortunate to 60 00:03:21,040 --> 00:03:23,040 Speaker 1: sit next to the two of them as they talked 61 00:03:23,040 --> 00:03:25,800 Speaker 1: in front of two hundred of us UH the sense 62 00:03:25,960 --> 00:03:29,440 Speaker 1: that both of them have indicated. Uh market interest rates 63 00:03:29,480 --> 00:03:32,880 Speaker 1: moved down more slowly than you might recall. After the 64 00:03:32,880 --> 00:03:35,400 Speaker 1: Fed loweredness policy rate to zero in two thousand and eight. 65 00:03:35,680 --> 00:03:38,240 Speaker 1: Bernanke has noted that the tenure and one could see 66 00:03:38,240 --> 00:03:39,760 Speaker 1: this on a chart the two year, the two year 67 00:03:39,760 --> 00:03:43,080 Speaker 1: treasure you know, was hovering around point eight percent a 68 00:03:43,120 --> 00:03:45,640 Speaker 1: couple of years after the Fed loweredness policy. Right, Jenny 69 00:03:45,680 --> 00:03:48,480 Speaker 1: Yellen noted that the two year didn't go below point 70 00:03:48,600 --> 00:03:51,080 Speaker 1: five percent until two thousand eleven. And think two thousand 71 00:03:51,160 --> 00:03:54,640 Speaker 1: thirteen taper tantrum period, markets were expecting a five percent 72 00:03:54,680 --> 00:03:57,800 Speaker 1: policy rate. Remove that from the equation. Insert instead of 73 00:03:57,920 --> 00:04:00,720 Speaker 1: you that the policy rate will stay low until the 74 00:04:00,840 --> 00:04:03,920 Speaker 1: job strate falls back down to full employment of four. 75 00:04:04,040 --> 00:04:08,440 Speaker 1: Let's say if if if a recession occurs and investors 76 00:04:08,480 --> 00:04:11,360 Speaker 1: will assign as zero percent policy rate to a two 77 00:04:11,440 --> 00:04:13,280 Speaker 1: year note, a three, four, five year note, and so 78 00:04:13,360 --> 00:04:17,200 Speaker 1: in other words, race would collapse quickly towards zero intercession 79 00:04:17,279 --> 00:04:21,359 Speaker 1: where markets participants believe the policy rate will be at 80 00:04:21,440 --> 00:04:23,760 Speaker 1: zero for some time. So what does that mean for 81 00:04:23,839 --> 00:04:26,480 Speaker 1: the bull market this time around time? It means for 82 00:04:26,480 --> 00:04:29,320 Speaker 1: for want many investors, probably this year with very lofty 83 00:04:29,320 --> 00:04:33,880 Speaker 1: returns or thinking, uh, there isn't much left. But let's 84 00:04:33,880 --> 00:04:36,760 Speaker 1: not forget the importance of fixed income in a portfolio 85 00:04:37,279 --> 00:04:40,719 Speaker 1: in so called positive convexity. In other words, what is 86 00:04:40,720 --> 00:04:43,400 Speaker 1: it that will help you if there's a recession and 87 00:04:43,480 --> 00:04:47,760 Speaker 1: your equity assets fall in price, your credit instruments fall 88 00:04:47,880 --> 00:04:51,359 Speaker 1: in price due to widening credit spreads. Treasuries would, and 89 00:04:51,400 --> 00:04:55,360 Speaker 1: bonds would, high quality bonds would, And so there's still 90 00:04:55,560 --> 00:04:59,080 Speaker 1: very big benefit that couldn't be had from this potential 91 00:04:59,160 --> 00:05:03,800 Speaker 1: dropping rates to protect the other components of an investment portfolio. 92 00:05:04,360 --> 00:05:08,159 Speaker 1: What's sorry, I din't my blue light on the convexity 93 00:05:08,160 --> 00:05:12,640 Speaker 1: buttons over here? What's critical here, Tony is right now 94 00:05:12,720 --> 00:05:18,480 Speaker 1: we are seeing convexity, lower yields and higher prices. How 95 00:05:18,520 --> 00:05:22,000 Speaker 1: do people away from full faith and credit adapt to 96 00:05:22,080 --> 00:05:26,800 Speaker 1: that when they're having difficulty doing? And I think that 97 00:05:27,000 --> 00:05:31,200 Speaker 1: it probably conveys a signal about the global economy that 98 00:05:31,360 --> 00:05:35,479 Speaker 1: causes words. What about is there a trade bet going 99 00:05:35,560 --> 00:05:39,159 Speaker 1: on where people in mortgage backs, etcetera. They're in there 100 00:05:39,320 --> 00:05:42,120 Speaker 1: and they've got to reaject down. One could look at 101 00:05:42,160 --> 00:05:46,000 Speaker 1: the Mortgage Bankers Association's weekly index at least every Wednesday, 102 00:05:46,000 --> 00:05:48,160 Speaker 1: and note that there has been a surge recently in 103 00:05:48,240 --> 00:05:52,719 Speaker 1: applications for people to refinance their mortgages and also purchases. 104 00:05:52,760 --> 00:05:54,440 Speaker 1: Now this what does this mean for a bond investor 105 00:05:54,520 --> 00:05:59,440 Speaker 1: and interestation? Broadly, it means it compels investors to move 106 00:05:59,760 --> 00:06:02,920 Speaker 1: in two treasuries more for why because if you own 107 00:06:02,920 --> 00:06:06,360 Speaker 1: a mortgage security and then that let's think of one homeowner, 108 00:06:06,400 --> 00:06:09,520 Speaker 1: the homeowner pays off the mortgage, the next mortgage that 109 00:06:09,560 --> 00:06:12,160 Speaker 1: you own will have a lower interest rate. Another and 110 00:06:12,240 --> 00:06:15,800 Speaker 1: in other words, I should have first said you're getting 111 00:06:15,800 --> 00:06:18,680 Speaker 1: paid back sooner than you expected when you own that 112 00:06:18,800 --> 00:06:22,000 Speaker 1: individuals or households mortgage. Perhaps you thought it would take 113 00:06:22,000 --> 00:06:27,039 Speaker 1: five years until said it's fast. So the duration the 114 00:06:27,120 --> 00:06:31,640 Speaker 1: interest rate sensitivity in a fixed income portfolio automatically declines. 115 00:06:31,640 --> 00:06:33,880 Speaker 1: And what does the fixed income investor do? Since he 116 00:06:34,040 --> 00:06:36,640 Speaker 1: or she or it is judged against a certain index, 117 00:06:38,880 --> 00:06:44,360 Speaker 1: they're forced to um to buy additional bonds, usually treasuries, 118 00:06:44,440 --> 00:06:46,960 Speaker 1: to to hedge against that to raise the duration levels. 119 00:06:47,160 --> 00:06:49,400 Speaker 1: Why not just leave the duration level low, because then 120 00:06:49,440 --> 00:06:54,240 Speaker 1: the Hofolio manage a risk lagging the performance of that index. 121 00:06:54,240 --> 00:06:56,880 Speaker 1: There's three people driving off the road in Pennsylvania right now. 122 00:06:56,920 --> 00:06:59,640 Speaker 1: After that discussion, John, that's like you've the thing you've 123 00:06:59,640 --> 00:07:02,880 Speaker 1: got on they're overlooking the river. You've refined on that, 124 00:07:02,960 --> 00:07:06,440 Speaker 1: what like three times in the last eight months. I wish, 125 00:07:06,480 --> 00:07:09,920 Speaker 1: I mean, I mean, but seriously, pharaohs refine the man's 126 00:07:09,960 --> 00:07:12,800 Speaker 1: and that moves the bond market because you got to 127 00:07:12,880 --> 00:07:16,120 Speaker 1: go out, not as much as the old days, because 128 00:07:16,240 --> 00:07:18,920 Speaker 1: more mortgage securities, about one and a half trillion of 129 00:07:18,960 --> 00:07:22,840 Speaker 1: them held by entities that are not as interested in 130 00:07:22,880 --> 00:07:26,560 Speaker 1: that transaction. So the Federal Service holding security before you go, 131 00:07:26,640 --> 00:07:30,080 Speaker 1: did you guys buy German paper? Don't want to get 132 00:07:30,520 --> 00:07:36,320 Speaker 1: the intermediate part of the German curves say is attractive 133 00:07:36,360 --> 00:07:39,600 Speaker 1: in the sense that there's still what bond investors called 134 00:07:39,720 --> 00:07:42,840 Speaker 1: rolled down. If a seven year notes six year note 135 00:07:42,840 --> 00:07:44,720 Speaker 1: has a higher yield than a two year note, and 136 00:07:44,800 --> 00:07:47,280 Speaker 1: it does, and it makes it low, but it's higher, 137 00:07:47,680 --> 00:07:50,080 Speaker 1: the actual return in the year will be about point 138 00:07:50,200 --> 00:07:53,560 Speaker 1: seven positive to negative yield. You're gonna buy this seven 139 00:07:53,640 --> 00:07:55,960 Speaker 1: year paper because the price will rise as yields fall. 140 00:07:57,680 --> 00:07:59,760 Speaker 1: Game ends. What do you do when that show? Game? 141 00:08:00,280 --> 00:08:03,080 Speaker 1: Bond investors love Steve yeel curs because of the so 142 00:08:03,240 --> 00:08:09,200 Speaker 1: called rolldown feature well shift off strategy to reduce durational levels. 143 00:08:09,240 --> 00:08:11,600 Speaker 1: But right now one shouldn't shy. For one, one should 144 00:08:11,600 --> 00:08:15,240 Speaker 1: staying in fixed income as a protection against the but 145 00:08:15,320 --> 00:08:18,880 Speaker 1: there's rolldown that gives a positive benefit as a securities age. 146 00:08:19,000 --> 00:08:20,720 Speaker 1: You're not here to see me. You don't give a 147 00:08:20,760 --> 00:08:24,200 Speaker 1: damn about me. You're Here's a real guild. This afternoons. 148 00:08:24,400 --> 00:08:27,119 Speaker 1: This is the tast a little bit of landation. Happy 149 00:08:27,200 --> 00:08:28,800 Speaker 1: to join a Tony, We'd love to have you on 150 00:08:28,800 --> 00:08:49,400 Speaker 1: the program to Tony Chriscenti that of pinc Morning Dum. 151 00:08:49,559 --> 00:08:52,040 Speaker 1: We're staying, of course, on banks. We're also talking about 152 00:08:52,040 --> 00:08:55,400 Speaker 1: Barclays and its investment banking operations in Europe. It keeps 153 00:08:55,400 --> 00:08:57,720 Speaker 1: outshining its appears. A real challenge lies in the U 154 00:08:57,800 --> 00:09:00,280 Speaker 1: s SO Chief executive Just Daily has been put wishing 155 00:09:00,280 --> 00:09:03,079 Speaker 1: for the company to take on the Wall Street giants. 156 00:09:03,080 --> 00:09:06,959 Speaker 1: But how does Barclay's actually stack up against him. We're 157 00:09:07,000 --> 00:09:10,200 Speaker 1: joining us now to discuss this. Jonathan Tanks, Bloomberg Intelligence 158 00:09:10,200 --> 00:09:13,240 Speaker 1: European Bank senior analyst. Jonathan has a report at Today 159 00:09:13,280 --> 00:09:17,560 Speaker 1: analyzing Barclay's cib performance. On the other side, Jared Cassidy 160 00:09:17,559 --> 00:09:20,120 Speaker 1: of RBC Capital Markets still with us to talk about 161 00:09:20,120 --> 00:09:21,480 Speaker 1: the U S Max time. I feel like it's a 162 00:09:21,880 --> 00:09:24,400 Speaker 1: Bloomberg surveillance special. It's like Tom and I fighting about 163 00:09:24,440 --> 00:09:27,000 Speaker 1: the biggest economy in the world. So thank you so 164 00:09:27,080 --> 00:09:30,240 Speaker 1: much for sticking around and welcome to the program. Is 165 00:09:30,280 --> 00:09:33,600 Speaker 1: there any bank in Europe, Jonathan, that could actually take 166 00:09:33,640 --> 00:09:36,720 Speaker 1: on the US? Ones not in the business of the 167 00:09:36,800 --> 00:09:38,520 Speaker 1: US are big in No, But I mean if you 168 00:09:38,600 --> 00:09:40,880 Speaker 1: said to me, which are the two or three best 169 00:09:40,880 --> 00:09:42,520 Speaker 1: banks in Europe, I mean I'd point to a d 170 00:09:42,640 --> 00:09:45,199 Speaker 1: m B. I'd point to a Lloyd's in the UK. Actually, 171 00:09:45,440 --> 00:09:48,880 Speaker 1: if you want efficiency capital efficiency proper focused on costs, 172 00:09:49,120 --> 00:09:51,640 Speaker 1: well reserved, et cetera. But in terms of kind of 173 00:09:51,720 --> 00:09:53,360 Speaker 1: a japing more when if we got anything like that, 174 00:09:53,400 --> 00:09:58,679 Speaker 1: absolutely okay, should we? Um No, it's not straightforward because 175 00:09:58,679 --> 00:10:01,000 Speaker 1: bear in mind that year is still any seven countries 176 00:10:01,320 --> 00:10:03,720 Speaker 1: that have very very different agenda, and in Italy, in 177 00:10:03,840 --> 00:10:06,559 Speaker 1: Spain lending they're reserving there in the bad situation is 178 00:10:06,640 --> 00:10:10,920 Speaker 1: very different from Germany, very different from um for the 179 00:10:10,920 --> 00:10:13,840 Speaker 1: North Countries battle jam et cetera. So I don't really 180 00:10:13,880 --> 00:10:16,480 Speaker 1: see that we ever will have that. I want to 181 00:10:16,480 --> 00:10:18,720 Speaker 1: set you guys up for the reality here, which is 182 00:10:18,720 --> 00:10:23,439 Speaker 1: a transatlantic battle over the future of banking. Gerard Cassidy, 183 00:10:23,559 --> 00:10:28,360 Speaker 1: how far out front are the American banks? Tom I 184 00:10:28,400 --> 00:10:32,360 Speaker 1: would say in the capital markets business, they are certainly 185 00:10:32,440 --> 00:10:36,200 Speaker 1: the leading providers in that area. When you take a 186 00:10:36,200 --> 00:10:39,839 Speaker 1: look at a bank America, Merrill Lynch, JP, Morgan Chase 187 00:10:40,240 --> 00:10:42,880 Speaker 1: as well as City Group there and then you have 188 00:10:43,040 --> 00:10:47,440 Speaker 1: the two investment banks of course, Morgan Stanley in Goldman Sachs. 189 00:10:47,920 --> 00:10:51,400 Speaker 1: All of those players are global players and because of 190 00:10:51,440 --> 00:10:54,640 Speaker 1: the downturn in Oway oh nine, they were able to 191 00:10:54,640 --> 00:10:57,920 Speaker 1: get the capital infused into their banks faster than the 192 00:10:57,960 --> 00:11:00,520 Speaker 1: European banks, and they have been able to take market 193 00:11:00,520 --> 00:11:03,480 Speaker 1: share over the last ten years. They are truly tough 194 00:11:03,520 --> 00:11:06,760 Speaker 1: competitors for the other players over here. John Choyce, I 195 00:11:06,800 --> 00:11:09,920 Speaker 1: see Deutsche Bank today under a six handle, six euros 196 00:11:09,960 --> 00:11:13,360 Speaker 1: down to five point whatever. It just goes on and 197 00:11:13,400 --> 00:11:18,240 Speaker 1: on for the European banks, which institutions in Europe will 198 00:11:18,280 --> 00:11:24,200 Speaker 1: allow Europe to be more Anglo American and compete well, 199 00:11:24,280 --> 00:11:27,040 Speaker 1: I think the biggest scy you've got is rates. I 200 00:11:27,080 --> 00:11:28,800 Speaker 1: mean the US has had a rate cycle that goes 201 00:11:28,880 --> 00:11:32,880 Speaker 1: up which helps um and profitability improved. You look at Europe. 202 00:11:32,880 --> 00:11:35,839 Speaker 1: I mean we're now talking potentially if Edman doesn't get 203 00:11:35,840 --> 00:11:39,080 Speaker 1: into the next head of the ECB rate cuts, and 204 00:11:39,120 --> 00:11:41,959 Speaker 1: we didn't ever get back up. So the interest income 205 00:11:42,000 --> 00:11:45,600 Speaker 1: squeeze has really really hurt um European banks. She looked 206 00:11:45,600 --> 00:11:47,559 Speaker 1: at the US banks. Yes, they've got big investment banks, 207 00:11:47,600 --> 00:11:49,959 Speaker 1: but there are other parts of their portfolio have performed 208 00:11:50,000 --> 00:11:52,720 Speaker 1: really well, whereas over here the revenue attrition has gone 209 00:11:52,760 --> 00:11:54,400 Speaker 1: on and on and on from the lending book, not 210 00:11:54,480 --> 00:11:57,080 Speaker 1: just from losing market share. But Jared, how much of 211 00:11:57,080 --> 00:11:59,920 Speaker 1: this is just the fact that actually the US white one, 212 00:12:00,280 --> 00:12:02,760 Speaker 1: you know eight started just fixed the banks quickly. And and 213 00:12:02,679 --> 00:12:04,600 Speaker 1: and you're we've kind of been stragging on and on 214 00:12:04,640 --> 00:12:06,880 Speaker 1: and on, and these are mainly legacy issues that I 215 00:12:06,960 --> 00:12:09,439 Speaker 1: just haven't been dealt with, Francie, And you put your 216 00:12:09,440 --> 00:12:12,880 Speaker 1: finger right on the issue. And let's remember that the 217 00:12:12,920 --> 00:12:16,920 Speaker 1: American banks didn't do this willingly. The regulators put the 218 00:12:16,920 --> 00:12:19,959 Speaker 1: gun to their head, told them to raise capital at 219 00:12:20,000 --> 00:12:24,160 Speaker 1: a time when it was very destructive to shareholders equity. 220 00:12:24,200 --> 00:12:26,240 Speaker 1: But they were forced to do it. And because they 221 00:12:26,280 --> 00:12:29,040 Speaker 1: did it, You're, you're absolutely right, the Americans were able 222 00:12:29,080 --> 00:12:32,440 Speaker 1: to attack their properly more aggressively and quicker and turn 223 00:12:32,520 --> 00:12:34,880 Speaker 1: themselves around much faster you try. I want to jump 224 00:12:34,960 --> 00:12:38,240 Speaker 1: in here, John Tys. Let's open this up. The dream 225 00:12:38,360 --> 00:12:41,120 Speaker 1: or is an American bank buys Deutsche Bank, an American 226 00:12:41,120 --> 00:12:44,000 Speaker 1: bank buys bank a bank Beer or whatever. Why would 227 00:12:44,040 --> 00:12:47,560 Speaker 1: the American banks want to combine with any kind of 228 00:12:47,640 --> 00:12:52,400 Speaker 1: average or troubled European bank. There's absolutely no reason whatsoever 229 00:12:52,440 --> 00:12:55,800 Speaker 1: because things that the American bank doesn't want, the balance shape, 230 00:12:55,960 --> 00:12:58,000 Speaker 1: the American bank doesn't want to reach out Jeman Bank, 231 00:12:58,000 --> 00:13:00,320 Speaker 1: whether most you're gonna make for nanks ten years six 232 00:13:00,320 --> 00:13:02,840 Speaker 1: Haven sent r o E. So if you want the people, 233 00:13:02,920 --> 00:13:05,560 Speaker 1: you take the people. But back to the previous question, 234 00:13:05,600 --> 00:13:07,240 Speaker 1: and I think if you look at Barkley's mean Barkley 235 00:13:07,320 --> 00:13:08,760 Speaker 1: doesn't have the bad debt problem that a lot of 236 00:13:08,800 --> 00:13:11,520 Speaker 1: the europay banks does, and it didn't get nationalized. It 237 00:13:11,600 --> 00:13:16,000 Speaker 1: managed to use qua quite the quatar quite cunningly. Um 238 00:13:16,080 --> 00:13:18,200 Speaker 1: So one question is, well, why are they still so 239 00:13:18,280 --> 00:13:21,680 Speaker 1: much less profitable? And look at things like underwriting fee margins, 240 00:13:22,000 --> 00:13:23,880 Speaker 1: look at the size of the thick business versus the 241 00:13:23,920 --> 00:13:25,319 Speaker 1: amount of capital that they've got to put their The 242 00:13:25,320 --> 00:13:28,720 Speaker 1: Americans have got a secret source that Barkleys is better 243 00:13:28,720 --> 00:13:31,320 Speaker 1: than Europe, but it's still lanking. And now, folks, we 244 00:13:31,400 --> 00:13:34,080 Speaker 1: go to where we must go. Gerard Cassidy is going 245 00:13:34,120 --> 00:13:36,040 Speaker 1: to give us a bank in the middle of nowhere 246 00:13:36,080 --> 00:13:40,360 Speaker 1: in America. So John Tys can make some money next month. Gerard, 247 00:13:40,480 --> 00:13:43,400 Speaker 1: what's the banks? It's got a value in your catalyst 248 00:13:43,600 --> 00:13:46,320 Speaker 1: right now. Tom, we were talking last night. I was 249 00:13:46,360 --> 00:13:49,720 Speaker 1: in Paris, we were over martiniz and Key Corps is 250 00:13:49,840 --> 00:13:53,000 Speaker 1: one of the best regional banks we have in the 251 00:13:53,080 --> 00:13:54,960 Speaker 1: United States. But I know you and I like to 252 00:13:54,960 --> 00:13:58,400 Speaker 1: talk about smaller banks. One of the banks that's done 253 00:13:58,480 --> 00:14:03,600 Speaker 1: very well in New Jersey SMB one. Uh Tony Labazetta 254 00:14:03,760 --> 00:14:06,920 Speaker 1: is the chairman and CEO there. It's just over a 255 00:14:06,960 --> 00:14:11,240 Speaker 1: billion in assets. It's a small bug and that's those 256 00:14:11,280 --> 00:14:13,320 Speaker 1: are the names that can do well along with the JP. 257 00:14:13,480 --> 00:14:16,840 Speaker 1: Morgan's very good John Tyce chicking notes there on small 258 00:14:16,880 --> 00:14:33,400 Speaker 1: things across America. Gentlemen, thank you so much, honored. We 259 00:14:33,480 --> 00:14:37,080 Speaker 1: have a wonderful guest on a wonderful I p O story. 260 00:14:37,440 --> 00:14:39,840 Speaker 1: This is what keeps the market going, Paul Sweeney, you 261 00:14:40,000 --> 00:14:43,720 Speaker 1: talk about a wonderful IPO. Tom, here's beyond meat. May 262 00:14:43,880 --> 00:14:46,240 Speaker 1: first goes public at twenty five dollars a share, It's 263 00:14:46,240 --> 00:14:49,560 Speaker 1: currently trading at a hundred and forty three dollars to share. 264 00:14:49,560 --> 00:14:51,840 Speaker 1: It's got a market cap at eight point six billion. 265 00:14:52,160 --> 00:14:58,840 Speaker 1: Evaluation is you know, about five times twenty twenty consensus revenue? 266 00:14:58,840 --> 00:15:01,960 Speaker 1: Is that just extraordinary? Um. Most of the analysts that 267 00:15:02,000 --> 00:15:04,400 Speaker 1: had been supporting the stock, obviously given the valuation of 268 00:15:04,440 --> 00:15:06,400 Speaker 1: have chosen to back off this recently. I think believe 269 00:15:06,400 --> 00:15:09,400 Speaker 1: one of the latest is Alexia Howard, senior analyst that 270 00:15:09,440 --> 00:15:13,080 Speaker 1: Bernstein New covers beyond me and the food business. Alexia, 271 00:15:13,120 --> 00:15:15,040 Speaker 1: thanks so much for joining us. I know you've recently 272 00:15:15,040 --> 00:15:20,239 Speaker 1: downgraded the stock. What was your reasoning there? Really just valuation. 273 00:15:20,680 --> 00:15:26,640 Speaker 1: I think the main point was that it just seems overdone. UM. 274 00:15:26,720 --> 00:15:29,920 Speaker 1: It's obviously had an incredibly rapid start out of the 275 00:15:29,960 --> 00:15:33,680 Speaker 1: gate UM. I think the long term prognosis is very 276 00:15:33,800 --> 00:15:37,280 Speaker 1: very good. Uh, everybody is pretty excited about all these 277 00:15:37,280 --> 00:15:41,680 Speaker 1: plant based burgers and plant based possages and the outlooks. 278 00:15:41,720 --> 00:15:44,920 Speaker 1: The market looks really really solid, but the valuation just 279 00:15:45,000 --> 00:15:48,880 Speaker 1: got very very overstretched, very very quickly. How do you 280 00:15:48,920 --> 00:15:52,080 Speaker 1: think investors are valuing this story? Again? And by my math, 281 00:15:52,120 --> 00:15:56,040 Speaker 1: it's about twenty five times consensus revenues. For that's just 282 00:15:56,800 --> 00:15:59,080 Speaker 1: you don't even see internet stocks trade there. So what 283 00:15:59,120 --> 00:16:03,560 Speaker 1: do you think is really you know, supporting the valuation here? Um, Well, 284 00:16:03,640 --> 00:16:07,080 Speaker 1: it's got a pretty small float overall, um, you know, 285 00:16:07,200 --> 00:16:09,920 Speaker 1: I mean, you talk about the eight point six billion 286 00:16:09,960 --> 00:16:13,920 Speaker 1: dollar overall enterprise value, um, but there's only a small 287 00:16:13,960 --> 00:16:17,360 Speaker 1: piece of that that's publicly traded. And obviously there's a 288 00:16:17,360 --> 00:16:19,800 Speaker 1: lot of excitement. There's been a huge amount of news 289 00:16:19,880 --> 00:16:22,280 Speaker 1: coverage over the last month because of the success at 290 00:16:22,280 --> 00:16:25,040 Speaker 1: the I p O UM. I do think that if 291 00:16:25,040 --> 00:16:28,000 Speaker 1: you look at the total addressable market ten years from now, 292 00:16:28,040 --> 00:16:31,160 Speaker 1: it looks pretty interesting. But the big question is how 293 00:16:31,240 --> 00:16:33,600 Speaker 1: much how much of the pike can they actually take 294 00:16:33,920 --> 00:16:37,840 Speaker 1: when you've got people like or companies like Nestley and 295 00:16:38,200 --> 00:16:41,840 Speaker 1: Tyson Game Alexia. That's a point. I mean, let's call 296 00:16:41,880 --> 00:16:44,640 Speaker 1: Michael Porter on you exactly what are the barriers to 297 00:16:44,840 --> 00:16:49,640 Speaker 1: entry of putting soy what else? John Tucker, soy lflfa 298 00:16:51,280 --> 00:16:56,360 Speaker 1: piece whatever in with your burger everything? Thank you? What's 299 00:16:56,400 --> 00:16:59,560 Speaker 1: the barrier to entry here? Well? I I really think that, 300 00:16:59,720 --> 00:17:02,920 Speaker 1: I mean, it's very different from the plant based beverage market. 301 00:17:02,920 --> 00:17:06,200 Speaker 1: Where frankly, I could throw a bunch of almonds into 302 00:17:06,240 --> 00:17:09,679 Speaker 1: my vitamins and k pressto, I've got almond milk. And 303 00:17:09,720 --> 00:17:12,520 Speaker 1: that was why, Um, you have a huge amount of 304 00:17:12,640 --> 00:17:15,959 Speaker 1: entry from private label and plans because they were so 305 00:17:16,040 --> 00:17:19,879 Speaker 1: easy to make. Uh, These plants based products are really 306 00:17:20,000 --> 00:17:23,159 Speaker 1: technically very difficult to be and I think that's the 307 00:17:23,200 --> 00:17:26,160 Speaker 1: biggest barrier to entry. But then of course if you're 308 00:17:26,359 --> 00:17:29,000 Speaker 1: in that game, you've really got to head of the 309 00:17:29,040 --> 00:17:31,960 Speaker 1: curve in terms of taste and texture and so on. 310 00:17:31,960 --> 00:17:33,840 Speaker 1: One of the thrust of society is they have to 311 00:17:33,920 --> 00:17:37,080 Speaker 1: keep Alexeia Howard and Sarah Senator at all times in 312 00:17:37,160 --> 00:17:39,760 Speaker 1: different rooms. They're not allowed to be together. There's so 313 00:17:39,840 --> 00:17:42,920 Speaker 1: much food power there. What if you when Sarah Senator 314 00:17:43,040 --> 00:17:46,760 Speaker 1: get together and beyond meat starts moving in McDonald's at 315 00:17:46,800 --> 00:17:49,600 Speaker 1: Sarah follows. I mean, what's the impact of a single 316 00:17:49,640 --> 00:17:54,960 Speaker 1: press release that Esterbrook wants to go beyond meat? Well, um, 317 00:17:55,119 --> 00:17:57,840 Speaker 1: we put out when we downgraded the Stark, we looked 318 00:17:57,880 --> 00:18:01,200 Speaker 1: at McDonald's because obviously, even on the earning call, people 319 00:18:01,240 --> 00:18:03,640 Speaker 1: are asking about you know what what if you get 320 00:18:03,640 --> 00:18:07,600 Speaker 1: the McDonald's contract for for for the US, and you 321 00:18:07,600 --> 00:18:10,440 Speaker 1: know you put the numbers together, and yes, it could 322 00:18:10,440 --> 00:18:13,080 Speaker 1: be another hundred and seventy million dollars, which would be 323 00:18:13,119 --> 00:18:18,280 Speaker 1: an uplift to their current sales M guidance for this 324 00:18:18,359 --> 00:18:20,520 Speaker 1: year of two hundred and ten million dollars. You know, 325 00:18:21,000 --> 00:18:24,159 Speaker 1: that's decent upside, but it's not a done deal like 326 00:18:24,320 --> 00:18:28,000 Speaker 1: we have. Neither neither McDonald's nor Beyond Meat has commented 327 00:18:28,000 --> 00:18:30,920 Speaker 1: publicly or whether or not that's going to happen. Obviously, 328 00:18:30,920 --> 00:18:34,280 Speaker 1: it was really good news that the breakfast sausage is 329 00:18:34,320 --> 00:18:36,960 Speaker 1: now being rolled out at Tim Horton's in Canada. That's 330 00:18:36,960 --> 00:18:39,280 Speaker 1: a pretty big contract, and there are other big contracts 331 00:18:39,320 --> 00:18:42,600 Speaker 1: they can go out, go after across the across the 332 00:18:42,600 --> 00:18:46,760 Speaker 1: country and even over overseas um. But the McDonald's thing 333 00:18:46,760 --> 00:18:49,880 Speaker 1: would be the big whale, and we don't know whether 334 00:18:49,880 --> 00:18:52,200 Speaker 1: it's going to happen, So Alexia, are we going to 335 00:18:52,280 --> 00:18:56,119 Speaker 1: see a flood of kind of faul meat companies following 336 00:18:56,119 --> 00:18:58,320 Speaker 1: in the footsteps of Beyond Meat? Given how successful the 337 00:18:58,320 --> 00:19:02,199 Speaker 1: IPA was, it seems as though that probably will happen. 338 00:19:02,760 --> 00:19:06,320 Speaker 1: Probably you're not going to get a gazillion of them 339 00:19:06,359 --> 00:19:09,359 Speaker 1: because obviously the research and development that it takes to 340 00:19:09,400 --> 00:19:12,760 Speaker 1: actually make these products in a credible way is pretty expensive. 341 00:19:13,119 --> 00:19:15,240 Speaker 1: But I do think that there's a lot of focus 342 00:19:15,280 --> 00:19:18,320 Speaker 1: on the area. You've got a lot of work pipe 343 00:19:18,400 --> 00:19:22,159 Speaker 1: pipeline companies that are looking to get into the space. 344 00:19:22,280 --> 00:19:24,920 Speaker 1: So the competition is going to heat up over time. 345 00:19:25,720 --> 00:19:29,000 Speaker 1: So what is the market size of this business? Do 346 00:19:29,040 --> 00:19:33,000 Speaker 1: we even know kind of how big this market can be? Well, 347 00:19:33,040 --> 00:19:36,440 Speaker 1: obviously it's it's early days yet, but if you assume 348 00:19:36,520 --> 00:19:38,960 Speaker 1: that it it follows the same path as the plant 349 00:19:39,000 --> 00:19:42,000 Speaker 1: based beverage market. And if you look at what almond 350 00:19:42,040 --> 00:19:45,879 Speaker 1: milk did to the plant based beverage market, Obviously, soy 351 00:19:46,160 --> 00:19:50,280 Speaker 1: milk was kind of judging away for a certain segment 352 00:19:50,320 --> 00:19:52,119 Speaker 1: of the market for a long time, and then suddenly 353 00:19:52,160 --> 00:19:54,360 Speaker 1: you had almond milk, and then you had hazel nut 354 00:19:54,359 --> 00:19:56,520 Speaker 1: milk and oat milk and all these kind of things. 355 00:19:56,720 --> 00:20:00,280 Speaker 1: That's that's taken fifteen percent as the fluid milk market 356 00:20:00,359 --> 00:20:03,800 Speaker 1: in the US if you apply the same logic, if 357 00:20:03,840 --> 00:20:07,399 Speaker 1: it if at the moment the meat market in the 358 00:20:07,480 --> 00:20:10,840 Speaker 1: US is about two hundred and seventy billion dollars. If 359 00:20:10,840 --> 00:20:13,280 Speaker 1: you assume that over the next ten years, these plant 360 00:20:13,320 --> 00:20:17,399 Speaker 1: based alternatives and alternative meats like the lab meets could 361 00:20:17,400 --> 00:20:20,679 Speaker 1: collectively take fifteen percent, that would be a forty billion 362 00:20:20,680 --> 00:20:23,359 Speaker 1: dollar market ten years from now. So it's a pretty 363 00:20:23,359 --> 00:20:27,120 Speaker 1: big um apply to be going after, which is pretty interesting. 364 00:20:27,280 --> 00:20:29,800 Speaker 1: Very quickly, Alexia, while we are in the phone household 365 00:20:29,800 --> 00:20:36,240 Speaker 1: foods working out for Jeff Bezos, how about those avocados. Um, Yeah, 366 00:20:36,280 --> 00:20:38,480 Speaker 1: we're gonna say, it's going to be interesting to see 367 00:20:38,520 --> 00:20:41,440 Speaker 1: how that all plays out. I mean, yeah, there's there's 368 00:20:41,440 --> 00:20:45,359 Speaker 1: obviously a lot going on globally with with tariffs and uh, 369 00:20:46,000 --> 00:20:49,720 Speaker 1: I think yes, so, so it's at the moment um. 370 00:20:49,800 --> 00:20:53,080 Speaker 1: It's the interesting thing I think about Amazon getting into 371 00:20:53,080 --> 00:20:57,399 Speaker 1: grocery is the investors don't seem to require Amazon to 372 00:20:57,440 --> 00:21:00,560 Speaker 1: make a profit, and so at the moment and you know, 373 00:21:00,600 --> 00:21:04,120 Speaker 1: they can price their private label foods kind of wherever 374 00:21:04,160 --> 00:21:06,480 Speaker 1: they like for the long term, and that's going to 375 00:21:06,560 --> 00:21:11,200 Speaker 1: put huge pressure on the legacy um tired old packaged 376 00:21:11,240 --> 00:21:13,640 Speaker 1: food names. Um. You know that that that's a big 377 00:21:13,640 --> 00:21:17,760 Speaker 1: problem because they're competing with an Internet company that frankly 378 00:21:17,960 --> 00:21:22,919 Speaker 1: isn't held the same standards financially as the old Kelloggs 379 00:21:22,960 --> 00:21:26,840 Speaker 1: and Campbells of the world. With an important January node 380 00:21:26,960 --> 00:21:32,240 Speaker 1: on three Whole Foods in Amazon. Alexeia Howard is Sanford Bernstein. 381 00:21:33,119 --> 00:21:48,560 Speaker 1: Thank you so much, Alexei, I greatly appreciate it. Today 382 00:21:51,760 --> 00:21:57,520 Speaker 1: there's a pause here because our next guest right now 383 00:21:57,560 --> 00:21:59,920 Speaker 1: we have to bring in and she is the queen 384 00:22:00,160 --> 00:22:03,000 Speaker 1: of Mother Pucker's. Yes you heard that right, that's appropriate 385 00:22:03,000 --> 00:22:05,960 Speaker 1: for radio. One of the great secrets of the Bloomberg combine. 386 00:22:05,960 --> 00:22:10,440 Speaker 1: A Scarlet Food actually plays hockey full time and wanders 387 00:22:10,440 --> 00:22:13,080 Speaker 1: into Bloomberg. Which is that busy? You're playing North of 388 00:22:13,119 --> 00:22:15,040 Speaker 1: New York right, Yeah, I'm playing North of New York. 389 00:22:15,040 --> 00:22:17,600 Speaker 1: I just played last night. In fact, you're playing hockey 390 00:22:17,600 --> 00:22:19,840 Speaker 1: in June. Yes, well, that's the only time we can 391 00:22:19,880 --> 00:22:22,920 Speaker 1: get ice time't I don't play between November and February 392 00:22:22,920 --> 00:22:26,800 Speaker 1: because about Oh you know, I can float anywhere, so 393 00:22:26,840 --> 00:22:29,399 Speaker 1: I can be a winger, I can be defense. Sometimes 394 00:22:29,400 --> 00:22:31,920 Speaker 1: I'm goalie, you know, sometimes you're goalie. This must be 395 00:22:32,000 --> 00:22:34,400 Speaker 1: a sea. Well, we have a special guest today, Scarlet. 396 00:22:34,680 --> 00:22:36,960 Speaker 1: Why don't you bring in the gentleman of a steam 397 00:22:37,000 --> 00:22:38,800 Speaker 1: we've got with us. Yeah, I imagine a lot of 398 00:22:38,800 --> 00:22:41,560 Speaker 1: our listeners are like our next guest, gifted in a sport, 399 00:22:41,600 --> 00:22:44,639 Speaker 1: passionate about a sport, getting recruited to play the sport 400 00:22:44,640 --> 00:22:46,600 Speaker 1: for an ivy league school, tried to go pro, then 401 00:22:46,600 --> 00:22:48,639 Speaker 1: went to business school, and then moved on to Wall Street. 402 00:22:48,960 --> 00:22:51,640 Speaker 1: Except that this guy wrote a book about it in between. 403 00:22:51,840 --> 00:22:55,920 Speaker 1: His name is Bill Keenan. No relation to Mike Keenan, right, correct, Okay, 404 00:22:56,000 --> 00:23:02,639 Speaker 1: fortunately unfortunately, but hockey hockey phenomenon. Nonetheless. You played hockey 405 00:23:02,640 --> 00:23:06,920 Speaker 1: at Harvard and then you played UH for coach Tonado, 406 00:23:07,000 --> 00:23:09,880 Speaker 1: you got injured for a while, you decided to go pro. 407 00:23:10,800 --> 00:23:13,600 Speaker 1: You went to Europe to go pro. Is that a 408 00:23:13,600 --> 00:23:16,159 Speaker 1: well trod path, Bill Keenan, Yeah, I would call it 409 00:23:16,240 --> 00:23:19,320 Speaker 1: semipro or pro with you know, there there were elements 410 00:23:19,359 --> 00:23:22,919 Speaker 1: of half the guys on my team's um. You know, 411 00:23:23,000 --> 00:23:25,800 Speaker 1: they were working construction during the day, so they'd come 412 00:23:26,280 --> 00:23:31,000 Speaker 1: from you know, roadside work to practice. So um. But 413 00:23:31,040 --> 00:23:32,400 Speaker 1: you know, we did get paid. It was the one 414 00:23:32,440 --> 00:23:35,399 Speaker 1: way to kind of keep the dream alive because it 415 00:23:35,480 --> 00:23:38,920 Speaker 1: kind of got cut short in college. So it's it's 416 00:23:38,920 --> 00:23:41,159 Speaker 1: tough to let go. And the dream was to come 417 00:23:41,200 --> 00:23:43,520 Speaker 1: back to the US and play for the NHL eventually. 418 00:23:43,640 --> 00:23:46,080 Speaker 1: Still there's still part of me that thinks, maybe if 419 00:23:46,080 --> 00:23:49,240 Speaker 1: I grow the hair out again, maybe you know, next season, 420 00:23:50,040 --> 00:23:54,480 Speaker 1: free agent, if there's anybody's let's talk about the magic 421 00:23:54,640 --> 00:23:56,560 Speaker 1: of your book, which is the first third of it, 422 00:23:56,640 --> 00:24:00,680 Speaker 1: which is a sports occracy and hockey accracy of America, 423 00:24:00,920 --> 00:24:02,959 Speaker 1: and just just into for a second time. The name 424 00:24:02,960 --> 00:24:05,320 Speaker 1: of the book is odd Man Rush Harvard Kids Hockey 425 00:24:05,320 --> 00:24:08,000 Speaker 1: Odyssey from Central Park to somewhere in Sweden. What stops 426 00:24:08,040 --> 00:24:10,040 Speaker 1: along the way and look for the movie Christmas two 427 00:24:10,119 --> 00:24:12,960 Speaker 1: thousand twenty. There is a moment in your book where 428 00:24:12,960 --> 00:24:16,840 Speaker 1: time stops. You're a collegiate, you're a fancy prep school kid, 429 00:24:17,320 --> 00:24:19,480 Speaker 1: and you've got to explain to the counselor that you're 430 00:24:19,480 --> 00:24:22,760 Speaker 1: going to Harvard to major and hockey. What was it 431 00:24:22,840 --> 00:24:26,480 Speaker 1: like to combine the academics with the sports occracy of 432 00:24:26,520 --> 00:24:30,680 Speaker 1: the industry. I was it was tough for my mom 433 00:24:30,880 --> 00:24:34,560 Speaker 1: because she contributed a lot on the academics, because this 434 00:24:34,680 --> 00:24:36,560 Speaker 1: this was not going to happen without like a whole 435 00:24:36,880 --> 00:24:39,840 Speaker 1: army of people helping. But but really, like I mean, 436 00:24:39,880 --> 00:24:43,120 Speaker 1: everyone was pretty supportive at at growing up, I don't 437 00:24:43,160 --> 00:24:45,560 Speaker 1: think it was. It was really like anything that they 438 00:24:45,600 --> 00:24:49,720 Speaker 1: had much. You know, whenever I say hockey, the first question, 439 00:24:50,040 --> 00:24:52,480 Speaker 1: you know, growing up was like ice hockey, you know 440 00:24:52,520 --> 00:24:55,320 Speaker 1: it was. It's not something that's that big here. So 441 00:24:55,560 --> 00:24:58,359 Speaker 1: right down to June, everybody's trying to get into Lawrenceville 442 00:24:58,440 --> 00:25:01,879 Speaker 1: or Dartmouth or you went up to Adding Raves, Combine, etcetera. 443 00:25:01,960 --> 00:25:05,640 Speaker 1: Everybody's going to hockey camps right now in the sports occricy. 444 00:25:05,720 --> 00:25:08,240 Speaker 1: But there's so many kids that can't do. What you 445 00:25:08,280 --> 00:25:13,040 Speaker 1: did is well, how do the parents adapt to their 446 00:25:13,119 --> 00:25:15,240 Speaker 1: kids are sort of kind of like good but they're 447 00:25:15,240 --> 00:25:17,720 Speaker 1: not good enough to go d one, etcetera. What do 448 00:25:17,720 --> 00:25:20,760 Speaker 1: you recommend to those parents to make it fun? Just 449 00:25:21,560 --> 00:25:23,560 Speaker 1: let the kids do what they want to do. They're 450 00:25:23,600 --> 00:25:27,400 Speaker 1: not gonna I mean, this was my experience in banking. 451 00:25:28,040 --> 00:25:30,800 Speaker 1: After I stopped playing hockey. I just I couldn't compete 452 00:25:30,840 --> 00:25:32,480 Speaker 1: because I didn't want to do it. So if the 453 00:25:32,520 --> 00:25:34,800 Speaker 1: kid doesn't want to do it, just just don't make 454 00:25:34,880 --> 00:25:37,200 Speaker 1: them do it. And I think if you want to 455 00:25:37,200 --> 00:25:39,440 Speaker 1: do it for fun, that's great, but don't harbor any 456 00:25:39,640 --> 00:25:41,400 Speaker 1: hope that you're going to get to the top, because 457 00:25:41,440 --> 00:25:43,840 Speaker 1: it's not gonna happen unless this is like you're obsessive, 458 00:25:44,359 --> 00:25:46,119 Speaker 1: and I was obsessive and I didn't make it so 459 00:25:46,280 --> 00:25:49,119 Speaker 1: there's no guarantees. You know, you brought up banking, so 460 00:25:49,200 --> 00:25:51,080 Speaker 1: that's where I want to go to next, because you 461 00:25:51,240 --> 00:25:54,480 Speaker 1: came back from your pro career in Europe, you took 462 00:25:54,480 --> 00:25:56,719 Speaker 1: some time, you wrote a book, you went to business school, 463 00:25:57,280 --> 00:26:00,200 Speaker 1: and then you got an internship at Geutia Bank. Come 464 00:26:00,240 --> 00:26:03,320 Speaker 1: Lall Street, and I just wonder how much did hockey 465 00:26:03,359 --> 00:26:06,600 Speaker 1: come into the equation with your career on Wall Street? 466 00:26:06,760 --> 00:26:10,080 Speaker 1: A lot of guys here played Div One hockey there 467 00:26:10,080 --> 00:26:11,520 Speaker 1: on Wall Street, it comes up a lot. Was it 468 00:26:11,560 --> 00:26:15,399 Speaker 1: a lubricant for that for your career? I mean, I 469 00:26:15,400 --> 00:26:18,280 Speaker 1: think it helped and I had to kind of use 470 00:26:18,359 --> 00:26:21,359 Speaker 1: that as a selling point. But but you know, to 471 00:26:21,400 --> 00:26:24,520 Speaker 1: be honest, I and one of the reasons I wanted 472 00:26:24,520 --> 00:26:26,480 Speaker 1: to write about banking too is a lot of the 473 00:26:26,480 --> 00:26:28,760 Speaker 1: people that are athletes that go into sales and trading. 474 00:26:28,800 --> 00:26:30,600 Speaker 1: That was my experience. I had no idea what how 475 00:26:30,600 --> 00:26:35,400 Speaker 1: that was different. I ended up in corporate finance and yeah, 476 00:26:35,600 --> 00:26:39,600 Speaker 1: thank you, But but I think it helped kind of 477 00:26:39,640 --> 00:26:41,400 Speaker 1: get in the door. And you know I did during 478 00:26:41,400 --> 00:26:43,679 Speaker 1: the recruiting. You know, I'd go play at eleven thirty 479 00:26:43,920 --> 00:26:46,680 Speaker 1: pm at Chelsea Pierce. You know, it was the last 480 00:26:46,680 --> 00:26:48,400 Speaker 1: thing I wanted to do. But you kind of got it, 481 00:26:49,560 --> 00:26:52,080 Speaker 1: you know, do this and try to get a job 482 00:26:52,160 --> 00:26:56,399 Speaker 1: and be into it. But but yeah, I mean it 483 00:26:56,440 --> 00:27:01,520 Speaker 1: helps ultimately, it's not you know, it didn't. It wasn't. 484 00:27:01,560 --> 00:27:04,040 Speaker 1: It wasn't when it came to being in a model 485 00:27:04,080 --> 00:27:06,200 Speaker 1: at two am. The hockey wasn't helping. When you look 486 00:27:06,200 --> 00:27:08,320 Speaker 1: at the hockey industry now and that you know can 487 00:27:08,400 --> 00:27:10,440 Speaker 1: take it over. Paul Sweeney is very up to speed 488 00:27:10,480 --> 00:27:14,600 Speaker 1: on the basketball industry as well. It's an American fixation. 489 00:27:14,680 --> 00:27:17,600 Speaker 1: You combined it with a first class education. And the 490 00:27:17,680 --> 00:27:20,080 Speaker 1: risk here is kids just do sports sports, sports. I've 491 00:27:20,119 --> 00:27:23,120 Speaker 1: seen that with you know, any number of pass How 492 00:27:23,119 --> 00:27:26,240 Speaker 1: did you handle the load at collegiate or the load 493 00:27:26,280 --> 00:27:30,200 Speaker 1: at Harvard grinding out three pair of soaking wet hockey 494 00:27:30,240 --> 00:27:34,800 Speaker 1: skates in your bag in the locker room. How did 495 00:27:34,800 --> 00:27:37,240 Speaker 1: you do the academics? I mean you could you It's 496 00:27:37,320 --> 00:27:40,480 Speaker 1: it's I mean, like people say it's the hardest part 497 00:27:40,560 --> 00:27:44,919 Speaker 1: is getting in. I mean, you you it's doable. Like 498 00:27:45,000 --> 00:27:48,600 Speaker 1: you have resources there, there's everyone, especially in hockey, all 499 00:27:48,680 --> 00:27:51,679 Speaker 1: your teammates are going through the same thing. So like 500 00:27:51,880 --> 00:27:55,760 Speaker 1: that's so there's there's ways that. You know. My experience 501 00:27:55,760 --> 00:27:58,280 Speaker 1: at Harvard is they give you every opportunity to succeed 502 00:27:58,760 --> 00:28:00,400 Speaker 1: on and off the ice or what where you want 503 00:28:00,400 --> 00:28:01,720 Speaker 1: to do. I mean, that's the beauty of it. You 504 00:28:01,720 --> 00:28:04,040 Speaker 1: don't have to, you know, commit to one thing at 505 00:28:04,080 --> 00:28:06,359 Speaker 1: the expense of something else. You can do it like 506 00:28:06,400 --> 00:28:08,320 Speaker 1: we can. It's it's a great excuse to say, I 507 00:28:08,320 --> 00:28:10,679 Speaker 1: have a lot of work, but it's doable. Did you 508 00:28:11,119 --> 00:28:13,000 Speaker 1: major in English or what? What did you? No? No, 509 00:28:13,119 --> 00:28:15,720 Speaker 1: I mean I I government, I think, I mean it 510 00:28:15,800 --> 00:28:17,639 Speaker 1: was not. It was kind of like I'm looking around, 511 00:28:17,640 --> 00:28:19,800 Speaker 1: what's the what's what classes should I take? And it 512 00:28:19,840 --> 00:28:23,119 Speaker 1: turned out that these classes lead to a government degree. 513 00:28:23,400 --> 00:28:25,880 Speaker 1: Got it? Okay, So you ended up writing a book 514 00:28:25,920 --> 00:28:28,119 Speaker 1: about your hockey career. You also wrote a book or 515 00:28:28,119 --> 00:28:31,760 Speaker 1: you're writing a book about your Wall Street career. Um, 516 00:28:31,840 --> 00:28:34,399 Speaker 1: how did you decide to take the path towards getting 517 00:28:34,400 --> 00:28:37,840 Speaker 1: this book? Your hockey book produced into a movie? Because 518 00:28:37,880 --> 00:28:42,200 Speaker 1: it involves a lot of hockey royalty. There's names like Lemieux, Gretzky, 519 00:28:42,400 --> 00:28:45,080 Speaker 1: um involved Baldwin as well. I mean, these are people 520 00:28:45,120 --> 00:28:47,920 Speaker 1: who are involved in the sport of hockey. Yeah, it was. 521 00:28:48,080 --> 00:28:51,520 Speaker 1: It was pretty much when I knew that. After during 522 00:28:51,560 --> 00:28:55,760 Speaker 1: Business Business school, I did my banking internship and I 523 00:28:55,880 --> 00:28:58,080 Speaker 1: kind of had an inkling this was not going to 524 00:28:58,120 --> 00:29:01,960 Speaker 1: be my career, not your thing, No, And I was right. Um. 525 00:29:02,080 --> 00:29:04,800 Speaker 1: And I think there was one of the one of 526 00:29:04,840 --> 00:29:07,000 Speaker 1: the women that was in the internship with me made 527 00:29:07,000 --> 00:29:08,600 Speaker 1: she she had heard that there was a book about 528 00:29:08,600 --> 00:29:10,320 Speaker 1: a hockey that I had written, and she kind of 529 00:29:10,320 --> 00:29:12,840 Speaker 1: made a comment like, Oh, who's gonna play in the movie. 530 00:29:13,120 --> 00:29:15,400 Speaker 1: I remember thinking, I mean maybe that maybe I should 531 00:29:15,440 --> 00:29:17,920 Speaker 1: do that, because like, what a great way to relive 532 00:29:17,960 --> 00:29:19,880 Speaker 1: all I was trying to do is relive all right, 533 00:29:20,160 --> 00:29:22,040 Speaker 1: what would you do and improved hockey? Right now, I'm 534 00:29:22,080 --> 00:29:25,720 Speaker 1: board stiff with the NHL game. Everybody's skates like, I'm 535 00:29:25,720 --> 00:29:28,680 Speaker 1: board stiff with the NHL game. The ice is too small, 536 00:29:28,720 --> 00:29:31,320 Speaker 1: blah blah blah. I talked to Gary players. They shrunk 537 00:29:31,360 --> 00:29:33,240 Speaker 1: the goalie page shore did they need to shrink the 538 00:29:33,240 --> 00:29:36,600 Speaker 1: goalie glove so they're not to I like how it 539 00:29:36,640 --> 00:29:38,600 Speaker 1: looks these days. You like the game? You know what 540 00:29:38,600 --> 00:29:41,440 Speaker 1: I would do is get more, show more European hockey 541 00:29:41,440 --> 00:29:45,160 Speaker 1: in the US. There's just More's just a different game. 542 00:29:45,200 --> 00:29:48,840 Speaker 1: There's there's it's more fun. Bigger ice players are just 543 00:29:48,880 --> 00:29:51,880 Speaker 1: as skilled. Um, why do the suites produce so many 544 00:29:51,880 --> 00:29:55,800 Speaker 1: great players? They they do sacrifice a lot, like they 545 00:29:56,320 --> 00:29:59,200 Speaker 1: you you're ten years old, you're gonna go to They 546 00:29:59,240 --> 00:30:01,920 Speaker 1: have like the way structures you can kind of be 547 00:30:02,000 --> 00:30:05,400 Speaker 1: on a path to the highest level in an organization 548 00:30:05,600 --> 00:30:08,120 Speaker 1: and be like on your way at like ten eleven 549 00:30:08,160 --> 00:30:12,520 Speaker 1: years old. So they commit pretty early as opposed to 550 00:30:12,560 --> 00:30:13,960 Speaker 1: here in the U S. Yeah, I mean, it'd be 551 00:30:13,960 --> 00:30:16,200 Speaker 1: like saying in Sweden would be like saying their version 552 00:30:16,240 --> 00:30:18,440 Speaker 1: of the New York Rangers, they have like a club 553 00:30:18,480 --> 00:30:20,280 Speaker 1: team that you're twelve years old and you can be 554 00:30:21,440 --> 00:30:23,840 Speaker 1: like the soccer in Europe. I got like forty five 555 00:30:23,880 --> 00:30:26,400 Speaker 1: more question, but we got scarlet. Thank you so much, 556 00:30:26,760 --> 00:30:30,240 Speaker 1: odd Man Rush. I actually read this years ago on 557 00:30:30,280 --> 00:30:32,080 Speaker 1: my kindle and now have a hard copy of it. 558 00:30:32,400 --> 00:30:35,120 Speaker 1: Oh listen, okay, very good. Bill Keenan with us here 559 00:30:35,160 --> 00:30:37,720 Speaker 1: with an important book on hockey. Any of you parents 560 00:30:38,080 --> 00:30:41,520 Speaker 1: on the edges or deep into the sports oocracy of America. 561 00:30:41,600 --> 00:30:46,040 Speaker 1: It's just by the way sports ocracy. I lived it. 562 00:30:46,080 --> 00:30:49,080 Speaker 1: It's the sports ocracy of America and it is a 563 00:30:49,320 --> 00:30:52,080 Speaker 1: must must read from Bill Keenan on some of the 564 00:30:52,080 --> 00:30:55,600 Speaker 1: pressures at the kid's face today. Thanks for listening to 565 00:30:55,680 --> 00:31:00,120 Speaker 1: the Bloomberg Surveillance podcast. Subscribe and listen to interview is 566 00:31:00,160 --> 00:31:05,360 Speaker 1: on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. 567 00:31:05,880 --> 00:31:09,240 Speaker 1: I'm on Twitter at Tom Keene before the podcast. You 568 00:31:09,280 --> 00:31:12,680 Speaker 1: can always catch us worldwide. I'm Bloomberg Radio.