Latest / Bloomberg Intelligence / Treasuries, Apple, LIV Golf, and Bank Buybacks (Podcast)

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Treasuries, Apple, LIV Golf, and Bank Buybacks (Podcast) · Bloomberg Intelligence

• 0:00
  Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside
• 0:04
  Speaker 1: my co host Matt Miller.
• 0:05
  Speaker 2: Every business day, we bring you interviews from CEOs, market pros,
• 0:09
  Speaker 2: and Bloomberg experts, along with essential market moving news.
• 0:14
  Speaker 1: Find the Bloomberg Markets Podcast on Apple Podcasts or wherever
• 0:17
  Speaker 1: you listen to podcasts, and at Bloomberg dot com slash podcast.
• 0:21
  Speaker 1: June fourteenth, which for me is Flag Day, but for
• 0:24
  Speaker 1: some other people it is FED Day. We're gonna hear
• 0:27
  Speaker 1: from the Fed June fourteenth to get their latest thinking
• 0:30
  Speaker 1: on interest rates. I want to bring in Ira Jersey
• 0:32
  Speaker 1: because he actually does this stuff for a living. We
• 0:34
  Speaker 1: actually pay him for this. Ira Jersey, chief US indust
• 0:37
  Speaker 1: rate strategist for Bloomberg Intelligence. So, Ira, I guess you
• 0:40
  Speaker 1: know kind of the new term that I heard here
• 0:42
  Speaker 1: is is skip. Are they going to skip a rate
• 0:45
  Speaker 1: increase here? Then maybe kind of re evaluate?
• 0:47
  Speaker 3: Maybe?
• 0:47
  Speaker 4: Yeah, Yeah, I think I think they will skip. I
• 0:50
  Speaker 4: wouldn't be surprised if the skip turned into a proper pause.
• 0:54
  Speaker 4: But there certainly are a number of people who are
• 0:57
  Speaker 4: thinking that perhaps the Federal Reserve, if they do skip,
• 1:01
  Speaker 4: could potentially hike again in July and that's not out
• 1:04
  Speaker 4: of the question, but I think that the hurdle just
• 1:07
  Speaker 4: gets a little bit higher and it gets more difficult
• 1:10
  Speaker 4: to get over that hump, particularly if we wind up
• 1:13
  Speaker 4: seeing economic data, right, real economic data start to slip
• 1:17
  Speaker 4: as much as it is. And in fact, if you
• 1:19
  Speaker 4: look at things like the ISM data that we've recently received,
• 1:22
  Speaker 4: you know that's already in and near recessionary territories, if
• 1:26
  Speaker 4: not actually in it.
• 1:27
  Speaker 5: Iira, I have to get your thoughts on this debate
• 1:29
  Speaker 5: over the Treasury's flood of bill issueings is basically being
• 1:33
  Speaker 5: the latest test for banks kind of break it down
• 1:36
  Speaker 5: for us as far as what the issues are there
• 1:38
  Speaker 5: and what that could potentially mean for any sort of
• 1:40
  Speaker 5: volatility that we could see in the bomb market.
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  Speaker 4: Yeah, so I don't think it's a debate. There will be,
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  Speaker 4: and we'll get an announcement actually just in about forty
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  Speaker 4: five minutes for what the Treasury Department is going to
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  Speaker 4: be issuing in terms of four to eight and four
• 1:55
  Speaker 4: months bills that they're going to auction on Thursday. They
• 1:59
  Speaker 4: have to increase the sizes to rebuild the cash balance
• 2:02
  Speaker 4: in the Treasury General Account, which is the checking account
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  Speaker 4: that the Fed keeps for on behalf of the government.
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  Speaker 4: And what happens is when when the Treasury General account
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  Speaker 4: goes up, then other liabilities at the FED need to
• 2:15
  Speaker 4: go down, and that's either bank reserves, so deposits come
• 2:18
  Speaker 4: out of the system, and that means that bank reserves
• 2:22
  Speaker 4: go down, or money market mutual funds, if they purchase
• 2:25
  Speaker 4: the T bills, might instead not use the reverse repo
• 2:31
  Speaker 4: facility that's been used quite frequently to the tune of
• 2:34
  Speaker 4: two point two trillion dollars by money market mutual funds
• 2:37
  Speaker 4: might move those So if money market mutual funds at
• 2:40
  Speaker 4: the primary buyer of these tea bills, it's really not
• 2:42
  Speaker 4: an issue. But I suspect that upwards of seventy percent
• 2:45
  Speaker 4: of the T bills are going to be are going
• 2:48
  Speaker 4: to be purchased for cash, and that means that bank
• 2:51
  Speaker 4: reserves are going to go down. It means bank deposits
• 2:53
  Speaker 4: go down, and it could see some depositively. Now the
• 2:56
  Speaker 4: question is there's a distributional issue here where most of
• 3:01
  Speaker 4: the depositive outflow is probably not going to be in
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  Speaker 4: the medium and smaller banks that were the problem back
• 3:07
  Speaker 4: in March. I think it comes out of more of
• 3:09
  Speaker 4: the bulge bracket firms that already have a lot of reserves,
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  Speaker 4: so probably won't be as systemically of a problem at
• 3:15
  Speaker 4: least not initially. Now by year end that might change
• 3:19
  Speaker 4: quite a lot. We're working on that now. We'll have
• 3:21
  Speaker 4: a no doubt tomorrow morning looking at the reserve requirements
• 3:24
  Speaker 4: and how low they can get in how quickly. But
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  Speaker 4: I don't think it's a June July issue. Could be
• 3:29
  Speaker 4: something for later in the third quarter or before year
• 3:31
  Speaker 4: end for sure.
• 3:32
  Speaker 1: So all right, this is really get into the plumbing.
• 3:35
  Speaker 1: But in terms of buying US security share, when they
• 3:39
  Speaker 1: come to auction, international buyers, are they there, how big
• 3:43
  Speaker 1: are they and who are they?
• 3:45
  Speaker 4: So foreigners typically don't buy a whole lot of tea bills.
• 3:48
  Speaker 4: Actually the central banks buy a few, but the primary
• 3:52
  Speaker 4: buyer are domestic investment funds that means money market mutual funds.
• 3:56
  Speaker 4: So you know it used to be when and where
• 3:59
  Speaker 4: this comes from is I don't want to say it's old,
• 4:02
  Speaker 4: but prior to the global financial crisis, when the US
• 4:06
  Speaker 4: had twin deficits, there was a lot of buying of
• 4:09
  Speaker 4: US treasury securities, both at auction and outside of auction
• 4:13
  Speaker 4: by foreign central banks in particular, that's actually stopped. Most
• 4:17
  Speaker 4: people still think that, you know, foreigners or massive buyers.
• 4:21
  Speaker 4: Foreigners have not increased their holdings of US treasury securities
• 4:25
  Speaker 4: significantly central banks over the last six seven years. Who
• 4:29
  Speaker 4: has been buying there are private investors. And private investors
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  Speaker 4: typically don't buy tea bills. They buy longer term treasury securities,
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  Speaker 4: you know, thirty years for pension funds and investment and
• 4:40
  Speaker 4: insurance companies, or they just buy for their portfolio because
• 4:44
  Speaker 4: interest rates in the US are still higher than they
• 4:46
  Speaker 4: are in a lot of other jurisdictions.
• 4:48
  Speaker 3: And IIRA.
• 4:48
  Speaker 5: We have a story on the terminal from Liz McCormick,
• 4:51
  Speaker 5: Michael McKinsey, and Craig trur Is talking about how bond
• 4:54
  Speaker 5: bulls are betting that the FED is right in anticipating
• 4:56
  Speaker 5: low rates to return. In Fed official's long run neutral
• 5:00
  Speaker 5: median forecast looking at that is around two and a
• 5:03
  Speaker 5: half percent. Do you think that's accurate?
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  Speaker 4: So I actually think that ultimately the floor that when
• 5:11
  Speaker 4: the Federal Reserve starts to cut will actually be below
• 5:13
  Speaker 4: two and a half percent. I think that they'll wind
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  Speaker 4: up cutting probably closer to two. Of course, you're talking
• 5:18
  Speaker 4: about twenty twenty five or twenty twenty six, it was
• 5:20
  Speaker 4: still a long ways off from that. You know, where
• 5:23
  Speaker 4: I think the market is probably a little bit a
• 5:26
  Speaker 4: little bit wrong is that the market seems to think
• 5:29
  Speaker 4: that the Federal Reserve, there's a good chance that the
• 5:31
  Speaker 4: Federal Reserve is going to start cutting interest rates this
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  Speaker 4: year and January of next year. I suspect that the
• 5:36
  Speaker 4: Federal Reserve will wind up raining on hold a bit longer,
• 5:39
  Speaker 4: so regardless of what they do kind of this month
• 5:42
  Speaker 4: and next month, that once they get to the peak,
• 5:44
  Speaker 4: that they'll be on hold for the better part of
• 5:46
  Speaker 4: the year, maybe more than a year. But once they
• 5:49
  Speaker 4: start to cut, they're going to cut aggressively. They're not
• 5:51
  Speaker 4: going to cut in twenty five base point increments once
• 5:53
  Speaker 4: a quarter like some people are thinking. I think that
• 5:56
  Speaker 4: they cut fifty basis points, you know, every meeting for
• 5:59
  Speaker 4: four or five meterets, and then they wind up cutting
• 6:01
  Speaker 4: interest rates down towards two percent. So two and a
• 6:03
  Speaker 4: half is not outside the range of possibility. But I
• 6:07
  Speaker 4: do think that there's a floor probably two is percent,
• 6:10
  Speaker 4: and hopefully we don't go below that, because if we
• 6:12
  Speaker 4: go below that, that means we have disinflation again, and
• 6:14
  Speaker 4: it seems like that's not likely given the demographic and
• 6:19
  Speaker 4: economic dynamics that have developed since the COVID pandemic.
• 6:24
  Speaker 3: All right, Ira, thank you so much. We appreciate that.
• 6:25
  Speaker 1: Ira Jersey, Chief US Interest rate Strategist for Bloomberg Intelligence.
• 6:30
  Speaker 6: You're listening to the team. Can's are live program Bloomberg
• 6:34
  Speaker 6: Markets weekdays at ten am Eastern on Bloomberg dot com,
• 6:37
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• 6:40
  Speaker 6: on demand wherever you get your podcasts.
• 6:45
  Speaker 1: All swinging down here in Orlando, Florida the b and
• 6:47
  Speaker 1: Y Insight Purshing Insight twenty twenty three conference where they
• 6:51
  Speaker 1: got about two thousand and their financial clients down here.
• 6:55
  Speaker 1: I'm talking about all things on financial services. So some
• 6:57
  Speaker 1: good stuff down here, Jess. You can spend thirty five
• 7:00
  Speaker 1: hundred bucks for I don't know vr Apple thing Mejig, I.
• 7:05
  Speaker 5: Don't think so. I think I'm gonna have to pass
• 7:07
  Speaker 5: on that one since it's a more than my rent.
• 7:11
  Speaker 3: Exactly.
• 7:11
  Speaker 1: I know, I don't know what they're doing, but let's
• 7:14
  Speaker 1: let's roundtable this with a couple of smart people who
• 7:17
  Speaker 1: know the text base. No Apple know this whole metaverse thing.
• 7:20
  Speaker 1: Anurag Rana and Mandeep Sing their senior tech analysts for
• 7:24
  Speaker 1: Bloomberg Intelligence.
• 7:27
  Speaker 3: Let's go on. Let's start with you. You cover Apple.
• 7:29
  Speaker 1: And as does Mandi. But what are they thinking with
• 7:33
  Speaker 1: this thirty four and ninety nine dollars price point.
• 7:39
  Speaker 7: See Paul from our site. They're going to try to
• 7:41
  Speaker 7: create an ecosystem of a new applications, new way of computing.
• 7:45
  Speaker 7: This is a completely different ecosystem that they're currently the
• 7:49
  Speaker 7: one that they have with the you know, the iPad,
• 7:52
  Speaker 7: the iPhone, the air pods. So it is a first
• 7:56
  Speaker 7: step in it. They really need develop us to build
• 8:00
  Speaker 7: applications on it. We need new content and frankly speaking,
• 8:04
  Speaker 7: that's really the game here. This is not It is
• 8:06
  Speaker 7: going to take years to really build out, so we
• 8:09
  Speaker 7: don't expect any near time action, but we are fairly
• 8:13
  Speaker 7: optimistic in the long run.
• 8:14
  Speaker 5: Man deep, how do we square this away with Meta's headset?
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  Speaker 8: So, actually, what Apple has done is really made it
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  Speaker 8: hard for Meta to go anywhere with their hardware ambitions.
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  Speaker 8: At least, I think what their demo showed was Apple
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  Speaker 8: can build this much better than what Meta has done,
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  Speaker 8: and just take aside the price point for a moment,
• 8:36
  Speaker 8: but clearly what they showed was something that I think
• 8:39
  Speaker 8: consumers may want, not at that price point. And for
• 8:42
  Speaker 8: Meta having invested billions of dollars in developing their own headset,
• 8:47
  Speaker 8: I mean it leaves them with very little room to
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  Speaker 8: be the scale player, even though they have that eighty
• 8:53
  Speaker 8: percent share and they have a five hundred dollars headset.
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  Speaker 8: I would be surprised if they continue to pour more
• 8:58
  Speaker 8: money because now that Apple has entered, they will lower
• 9:02
  Speaker 8: the price over time. And I think when it comes
• 9:04
  Speaker 8: to hardware, there's no other company that can build better
• 9:07
  Speaker 8: hardware than Apple.
• 9:09
  Speaker 1: So Mandy, what's you know, mister Zuckerberg to do here?
• 9:13
  Speaker 1: Is he content not to be in a hardware business? Again,
• 9:15
  Speaker 1: I don't think of hardware when I think of Meta.
• 9:18
  Speaker 1: But how would they play here just by sybody with
• 9:20
  Speaker 1: their applications with the metaverse?
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  Speaker 8: Yes, And what Meta has done in the background is
• 9:26
  Speaker 8: they have invested heavily in AI and large language models,
• 9:31
  Speaker 8: and they could still you know, build applications for the metaverse.
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  Speaker 8: I think they're better off trying to build it for
• 9:38
  Speaker 8: you know, all the devices out there. And I think,
• 9:41
  Speaker 8: going by what Apple has shown us they will be
• 9:45
  Speaker 8: one of the kind of the leaders when it comes
• 9:48
  Speaker 8: to the adoption for VR AR mixed reality headset. So
• 9:53
  Speaker 8: what Meta probably will eventually end up doing is they
• 9:56
  Speaker 8: will develop applications. They'll use whatever they have built on
• 9:59
  Speaker 8: the A side to be compatible with Apple, and that
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  Speaker 8: may be a better approach than trying to develop their
• 10:07
  Speaker 8: own ecosystem entirely.
• 10:08
  Speaker 5: Hey on Rock, I wanted to jump in and get
• 10:11
  Speaker 5: your take as far as what could be the potential
• 10:14
  Speaker 5: next catalyst for Apple stock. It's interesting because Morgan Stanley
• 10:18
  Speaker 5: is thinking they're actually looking to October for the next
• 10:20
  Speaker 5: catalyst when they expect to learn more about the headset volumes.
• 10:23
  Speaker 5: Do you think we'll have to wait that long?
• 10:25
  Speaker 7: I mean it could be even longer than that. If
• 10:27
  Speaker 7: the consumer spending starts to slow down, then iPhone fifteen
• 10:31
  Speaker 7: may not do exactly what all of us are hoping,
• 10:33
  Speaker 7: which is jumpstart the top line growth rate. You know,
• 10:36
  Speaker 7: and Paul and I have talked about this a lot,
• 10:40
  Speaker 7: that this is a company that's not going to go
• 10:42
  Speaker 7: top line above ten percent anytime soon. And that's because
• 10:46
  Speaker 7: the scale, the size, the penetration rate of iPhones. So
• 10:50
  Speaker 7: I think it's going to be a while before if
• 10:52
  Speaker 7: people are thinking this is going to grow double digits again,
• 10:55
  Speaker 7: you know, they may have to wait quite a bit
• 10:56
  Speaker 7: of time.
• 10:58
  Speaker 3: So, Man, Dave, what do we know now?
• 11:00
  Speaker 1: It's been I don't know, maybe a year since you know,
• 11:04
  Speaker 1: Meta kind of you know, more than a year when
• 11:05
  Speaker 1: they changed their name and they said we're going all
• 11:07
  Speaker 1: in on this metaverse and then they've kind of paired
• 11:10
  Speaker 1: back their investment ambitions maybe in that business. What's the
• 11:14
  Speaker 1: understanding on the street as to Meta's kind of next
• 11:18
  Speaker 1: one to two to three years in terms of investment,
• 11:19
  Speaker 1: in terms of how they'll evolve.
• 11:21
  Speaker 8: I mean, clearly they have you know, made a one
• 11:24
  Speaker 8: to ady degree turn this year compared to where they
• 11:27
  Speaker 8: were last year, and that has increased, you know, at
• 11:32
  Speaker 8: least expectations that they'll focus more on profitability. They will
• 11:36
  Speaker 8: not lose as much money as they were doing before
• 11:39
  Speaker 8: on reality labs.
• 11:41
  Speaker 5: Still.
• 11:41
  Speaker 8: I think they are investing on building data center capacity,
• 11:46
  Speaker 8: adding more applications that are metaverse oriented, and I think
• 11:51
  Speaker 8: the street is okay with that. It's just the hardware side,
• 11:55
  Speaker 8: which I think where they're losing money on every headset
• 11:59
  Speaker 8: that they're selling. That may not be a good strategy
• 12:01
  Speaker 8: because the more you scale, you know, it's a bigger
• 12:05
  Speaker 8: hole when it comes to your operating income.
• 12:09
  Speaker 9: An a rog have to get.
• 12:10
  Speaker 5: Your thoughts also when it comes to this fifteen inch
• 12:14
  Speaker 5: MacBook Air that's starting around thirteen hundred dollars.
• 12:19
  Speaker 7: Yeah, I'm actually looking forward to it. I'm a cheap guy,
• 12:22
  Speaker 7: but I think I'm going to go by that. I
• 12:25
  Speaker 7: love my MacBook Air. I've had it for I mean,
• 12:28
  Speaker 7: I think fifteen years, two different models in that tankgame,
• 12:31
  Speaker 7: and it's just a beautiful machine. I'm very optimistic in that.
• 12:35
  Speaker 7: But having said that, once again, mathematically as as a
• 12:39
  Speaker 7: company for Apple, it's not going to have a material
• 12:42
  Speaker 7: impact over the next twelve months, and that has to
• 12:45
  Speaker 7: do with very tough comparison the PC market in the slump.
• 12:48
  Speaker 7: But personally I'm very keen on that machine.
• 12:52
  Speaker 1: All right on rag Rana men deep seeing our senior
• 12:55
  Speaker 1: technology analyst from Bloomberg Intelligence helping us break down. You know,
• 12:58
  Speaker 1: it was a pretty big event yesterday for Apple with
• 12:59
  Speaker 1: this new virtual reality augmented reality device.
• 13:03
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• 13:23
  Speaker 3: So the big, big news coming out of Marshton and DC.
• 13:25
  Speaker 1: Secretary of State Anthony Blincoln plans to visit China in
• 13:28
  Speaker 1: the coming weeks for talks with top officials, possibly including
• 13:32
  Speaker 1: President Jijimping. People familiar with the matter said, as the
• 13:35
  Speaker 1: US looks to resume high level communication despite continued at tensions,
• 13:39
  Speaker 1: want to get the latest on that. We bring in
• 13:41
  Speaker 1: Justin Sinky covers the White House and DC for Bloomberg News.
• 13:45
  Speaker 3: Justin Big News. Give us your some sense of context here.
• 13:49
  Speaker 10: Yeah, well, you know, the relationship between the US and
• 13:52
  Speaker 10: China has been strained sort of multiple points over the
• 13:55
  Speaker 10: last you know, well lots of years, last decade, however
• 14:00
  Speaker 10: far back you want to go. But there had seemed
• 14:02
  Speaker 10: to be a sort of warming between President Biden and
• 14:06
  Speaker 10: President Juhn Ping of China at the sum in Bali
• 14:09
  Speaker 10: last fall. All of that was sort of thrown off
• 14:12
  Speaker 10: track when right ahead of the Secretary of Blncoln's planned
• 14:16
  Speaker 10: trip earlier this year to Beijing, the Chinese Bible balloon
• 14:21
  Speaker 10: flew over the US, so that led the State Department
• 14:23
  Speaker 10: to scrap the plans, and since then there's been a
• 14:26
  Speaker 10: real breakdown in sort of conversations between China and the US.
• 14:31
  Speaker 10: There's been a number of military drills recently where US
• 14:34
  Speaker 10: or Chinese aircraft and ships have buzzed in front of
• 14:40
  Speaker 10: US aircraft or ships, and so it seems like there
• 14:44
  Speaker 10: was a real tension and Secretary B. Lincoln headed back
• 14:47
  Speaker 10: to Beijing a signal that things may be warming and
• 14:50
  Speaker 10: getting back on track.
• 14:52
  Speaker 5: Justin, do we have a sense of the exact timing
• 14:54
  Speaker 5: of when his trip to Beijing could happen.
• 14:57
  Speaker 10: We expect in the next few weeks. The specific dates,
• 15:02
  Speaker 10: I'm not sure if they're locked in yet or they're
• 15:03
  Speaker 10: just not being shared yet. The State Department has said
• 15:05
  Speaker 10: that they don't have anything to announce officially yet. But
• 15:09
  Speaker 10: my colleagues Jenny Leonard and Marie Horton, who reported this
• 15:12
  Speaker 10: piece out, till fairly confidence this trip is not only happening,
• 15:15
  Speaker 10: but happening in the relatively near future.
• 15:18
  Speaker 1: And justin, I'm not sure how these things work here
• 15:21
  Speaker 1: when it comes to the diplomacy is typically a high
• 15:24
  Speaker 1: level visit by a Secretary of State, perhaps a precursor
• 15:27
  Speaker 1: for getting Present Biden president G together at some point.
• 15:30
  Speaker 10: Yeah, or at the very least, even President Biden has
• 15:33
  Speaker 10: said that he expects and hopes to talk to G
• 15:35
  Speaker 10: on the phone sometime soon. So there are a number
• 15:39
  Speaker 10: of you know, diplomatic forum again this fall or the
• 15:44
  Speaker 10: G twenty, it could again be an opportunity for them
• 15:47
  Speaker 10: to meet. But I would expect, you know, if this
• 15:50
  Speaker 10: meeting goes well, to two possible things to accomplish setting
• 15:53
  Speaker 10: up that phone call between Biden and G. And secondly,
• 15:57
  Speaker 10: the US is really pushed for real opening military to
• 16:01
  Speaker 10: military communication, which the Chinese cut off after former Speaker
• 16:06
  Speaker 10: Pelosi went to Taiwan late last year, and so I
• 16:10
  Speaker 10: think that was the goal of the original Blinking trip.
• 16:13
  Speaker 10: Then the spy balloon happened, and so there's a hope
• 16:15
  Speaker 10: that that can kind of kickstart if things go well.
• 16:18
  Speaker 10: When Secretary Blanking Ghostavision.
• 16:21
  Speaker 5: Justin talk to us about what this visit would essentially mean.
• 16:25
  Speaker 5: When we're putting this in context to Presidents Biden's efforts
• 16:28
  Speaker 5: to really try to restore some normalcy to the relationship here.
• 16:32
  Speaker 10: Yeah, I mean there Not only did Speaker Pelosi's trip
• 16:37
  Speaker 10: really kind of strain re license, but there have been
• 16:39
  Speaker 10: a number of pressure points over the last few years.
• 16:42
  Speaker 10: Obviously China's reaction to Russia's invasion of Ukraine, the Biden
• 16:49
  Speaker 10: administration has been mostly happy with, but has wanted to
• 16:52
  Speaker 10: push for kind of a stronger breaking of ties between
• 16:58
  Speaker 10: Russia and China, the situation in Taiwan, the situation and
• 17:03
  Speaker 10: sort of the South Pacific in general, where China has
• 17:07
  Speaker 10: been increasingly assertive. And so you put all that into
• 17:10
  Speaker 10: the context, especially of trade, when you think about the
• 17:13
  Speaker 10: economy and efforts to sort of counter Chinese manufacturing influence
• 17:21
  Speaker 10: and post COVID, I think all of these are sort
• 17:24
  Speaker 10: of sore spots that there's a real hope than the
• 17:26
  Speaker 10: Biden administration that improved dialogue can help get past.
• 17:30
  Speaker 1: Hey justin you know, it's interesting we seem to sort
• 17:33
  Speaker 1: of past several weeks a lot of high profile US
• 17:36
  Speaker 1: executives heading over to China. Jamie Diamond was there for
• 17:40
  Speaker 1: big a Jpmorton conference. Elon Musk was there, Tim Cook
• 17:43
  Speaker 1: from Apple. It feels like maybe the government officials are
• 17:47
  Speaker 1: kind of behind a little bit of the private sector.
• 17:49
  Speaker 1: What's the feeling with in DC about what we should
• 17:52
  Speaker 1: be doing in China?
• 17:53
  Speaker 10: Yeah, I think that there is. There are sort of
• 17:57
  Speaker 10: countervailing winds. Right on the one hand, I think there
• 18:00
  Speaker 10: is a sense among many that they are trying to
• 18:03
  Speaker 10: repair this relationship to at least make it more functional
• 18:06
  Speaker 10: than it's been, particularly because you're seeing these military maneuvers
• 18:11
  Speaker 10: or communication breakdowns, that there's a real concern that it
• 18:15
  Speaker 10: could bleed inadvertently to something bad happening. At the same time,
• 18:20
  Speaker 10: we're about to have a presidential election in twenty twenty
• 18:23
  Speaker 10: four where the issue of China is certain to be central.
• 18:26
  Speaker 10: Former President Donald Trump obviously made that a sort of
• 18:29
  Speaker 10: signature campaign issue and has talked a lot about being
• 18:33
  Speaker 10: tough on China as part of his push back into
• 18:35
  Speaker 10: the Republican primary. It's something that the Biden administration has
• 18:40
  Speaker 10: tried to counter by big government programs to return manufacturing
• 18:44
  Speaker 10: back to the United States. And so it's one of
• 18:47
  Speaker 10: those tricky things where I think if you talk to
• 18:50
  Speaker 10: people about is it good for business to improve those ties,
• 18:53
  Speaker 10: they'll say yes, Is it good for politics to improve
• 18:56
  Speaker 10: those ties? Maybe no.
• 18:58
  Speaker 3: I just think thank thank you so much for joining us.
• 19:00
  Speaker 1: Really appreciated getting the latest air Secretary of State Blincoln
• 19:04
  Speaker 1: announcing that he intends to travel to China in the
• 19:06
  Speaker 1: near future, so presumably that is good news.
• 19:11
  Speaker 6: You're listening to the team Ken's are Live program Bloomberg
• 19:14
  Speaker 6: Markets weekdays at ten am Eastern on Bloomberg dot Com,
• 19:18
  Speaker 6: the iHeartRadio app, and the Bloomberg Business App, or listen
• 19:21
  Speaker 6: on demand wherever you get your podcasts.
• 19:25
  Speaker 1: Let's get a breakdown what's happening with the markets. Billy
• 19:27
  Speaker 1: Lipschaltzy covers the Markets force. He joins us in a
• 19:30
  Speaker 1: Bloomberg Inactive broker studio, as does Scarlet Food TV anchor
• 19:34
  Speaker 1: for Bloomberg Television business sports host as well. So Bailly
• 19:39
  Speaker 1: gave us kind of the movements in the golf stocks.
• 19:41
  Speaker 1: Let's go to Scarlett right away here. I mean, this
• 19:44
  Speaker 1: news shocked me.
• 19:45
  Speaker 3: Scarlett. I'm a golfer, I follow the business, I follow
• 19:48
  Speaker 3: the sport of it. I was shocked at this happened.
• 19:50
  Speaker 11: Totally shocked. Given that the two had really dug in
• 19:54
  Speaker 11: the two sides live golf and the PGA Tour, there
• 19:56
  Speaker 11: was a lot of charges flung against each other, suits
• 20:00
  Speaker 11: between the two. The DOJ got involved because it was
• 20:03
  Speaker 11: also looking into the PGA for monopolistic antitrust type of behavior.
• 20:07
  Speaker 11: And then all of a sudden, you have them declaring
• 20:09
  Speaker 11: a truce in what really was a civil war in golf.
• 20:13
  Speaker 11: So who caved It's not clear, but I guess if
• 20:18
  Speaker 11: the PGA Tour has admitted, basically conceded that live has
• 20:23
  Speaker 11: a role to play, my guess is PGA Tour did.
• 20:27
  Speaker 3: Yeah, that's exactically.
• 20:28
  Speaker 9: Well.
• 20:28
  Speaker 1: You know, it's interesting if you look at the Bloomberg
• 20:30
  Speaker 1: news story, the headline is PGA bows and so I
• 20:35
  Speaker 1: immediately emailed the editor, which you can do because all
• 20:38
  Speaker 1: the contact information to the bottom of every Bloomberg story helpful.
• 20:40
  Speaker 1: And I said, I said, really, because I didn't. I
• 20:43
  Speaker 1: don't think that, not knowing anything about this deal, but
• 20:46
  Speaker 1: I thought pg had by far the upper hand here.
• 20:49
  Speaker 1: Nobody cared about Live Golf, nobody watched it, nobody went
• 20:52
  Speaker 1: to the events relative to a PGA event. Yes, they
• 20:54
  Speaker 1: had the money, and that's I guess the big issue.
• 20:57
  Speaker 11: Yes, they had an investor with bottomless pockets, which was
• 21:00
  Speaker 11: basically the Sovereign Wealth Fund of Saudi Arabia, and my
• 21:03
  Speaker 11: understanding is the reporting shows that they've already made a
• 21:06
  Speaker 11: two billion dollar investment in Live, and they were prepared
• 21:08
  Speaker 11: to spend more on it in the years to come.
• 21:11
  Speaker 11: The problem with Live was that they didn't have a
• 21:14
  Speaker 11: US broadcast partnership, right, They didn't have media rights, So
• 21:18
  Speaker 11: the only way you could watch live golf is to
• 21:20
  Speaker 11: go in person, and it was hosted at two Donald
• 21:23
  Speaker 11: Trump owned golf courses here in the US, along with
• 21:26
  Speaker 11: other places overseas, or you could watch it on YouTube,
• 21:29
  Speaker 11: streamed on YouTube, or on Live goolf website itself. Unlike
• 21:34
  Speaker 11: PGA Tour tournaments, which are available on what, NBC, CBS, ESPN,
• 21:39
  Speaker 11: and Living else.
• 21:41
  Speaker 1: Live does have a TV deal with the CW Network,
• 21:43
  Speaker 1: which is a bunch of independently own you know, broadcast
• 21:46
  Speaker 1: stations that are carried on cable.
• 21:48
  Speaker 11: Right, that's a good point.
• 21:49
  Speaker 1: Yes, so they do have some distribution there, but it's
• 21:51
  Speaker 1: just not nearly and they don't have near the sponsorship
• 21:53
  Speaker 1: or near any of the prestige. So I'm just shocked
• 21:56
  Speaker 1: at this announcement, and I can't wait to really get
• 21:57
  Speaker 1: the full reporting here, because this is the last thing
• 21:59
  Speaker 1: I know.
• 22:00
  Speaker 11: I can't wait to get the TikTok on this, and
• 22:02
  Speaker 11: of course this split the world of golf players too,
• 22:04
  Speaker 11: right because Live Golf was really led by the former
• 22:07
  Speaker 11: golf star Greg Norman, and they poached a lot of
• 22:09
  Speaker 11: the best players, whether it's Phil Mickelson or Dustin Johnson,
• 22:12
  Speaker 11: Cameron Spait.
• 22:13
  Speaker 3: Past their prime, all past their prime.
• 22:15
  Speaker 11: All past their prime, but big names nonetheless, And the
• 22:17
  Speaker 11: difference was that they got paid these multi year contracts,
• 22:21
  Speaker 11: large upfront payments. So one big question is what does
• 22:24
  Speaker 11: this mean in terms of their splashy contracts. Will they
• 22:26
  Speaker 11: continue to get paid out for this year their second year?
• 22:28
  Speaker 1: I don't know. Well, what does it mean for all
• 22:30
  Speaker 1: the people who were not supporting the Live Tour because
• 22:34
  Speaker 1: of its involvement with Saudi Arabia. Now Saudi Arabia's would
• 22:37
  Speaker 1: be even more involved of what is left of professional golf.
• 22:41
  Speaker 1: I wonder how that's going to play with large parts
• 22:43
  Speaker 1: of them.
• 22:43
  Speaker 11: I don't know, my guess as money speaks, so in
• 22:45
  Speaker 11: the end it will work itself out. I mean, there
• 22:48
  Speaker 11: are a lot of uncomfortable press conferences with the players
• 22:51
  Speaker 11: that did sign on with Live Golf, or asking golf
• 22:54
  Speaker 11: players in general whether they would ever sign on would
• 22:56
  Speaker 11: live golf. They just didn't want to go there and
• 22:58
  Speaker 11: answer the difficult questions about sports washing and how Saudi
• 23:01
  Speaker 11: Arabia was using it its heft to get into sports
• 23:05
  Speaker 11: as a way to really accumulate soft power.
• 23:09
  Speaker 5: Bailey, you were walking us through some of the stock
• 23:11
  Speaker 5: moves here. What are some other beneficiaries like Top Golf
• 23:14
  Speaker 5: that are moving this morning?
• 23:15
  Speaker 12: It's really Top Golf, Callaway and a Kushna again, the
• 23:18
  Speaker 12: company that is the home of titleist Scottie Cameron Putters
• 23:22
  Speaker 12: and Footjoy that are rallying, both again up more than
• 23:24
  Speaker 12: five percent. But Scarlett, this is coming reading from a
• 23:27
  Speaker 12: note from Jeffrey saying that this unexpected agreement holds immense
• 23:30
  Speaker 12: potential to elevate the sport of golf to new heights.
• 23:32
  Speaker 12: Is that your expectation. Is this really a deal that
• 23:36
  Speaker 12: is going to be like the AFL and NFL merging
• 23:38
  Speaker 12: and all of a sudden everyone wants to grab their golf.
• 23:40
  Speaker 11: I guess it depends on whether the PGA is going
• 23:42
  Speaker 11: to change up its format or not. Because lif Golf
• 23:44
  Speaker 11: was very different from the PGA in that they didn't
• 23:47
  Speaker 11: have a thirty six hole cut, meaning no one goes
• 23:49
  Speaker 11: home after two rounds. They had team play, they had
• 23:51
  Speaker 11: shorter events, they had DJ's like the Chainsmokers performing at
• 23:55
  Speaker 11: their tournament. I mean, it was just a different feel
• 23:57
  Speaker 11: in general. It was a little hip or a little
• 24:00
  Speaker 11: so maybe with this merger, the PGA will change its
• 24:04
  Speaker 11: stripes a little bit and make it, I don't know,
• 24:07
  Speaker 11: make it more up to date. Because PJ was kind
• 24:09
  Speaker 11: of the home of you know, this is golf. We're
• 24:11
  Speaker 11: very traditional and this is how you follow the rules,
• 24:13
  Speaker 11: and this is what the way we've always done it.
• 24:14
  Speaker 11: And it wasn't exactly appealing to younger viewers except the
• 24:19
  Speaker 11: pandemic came along and really helped people rediscover golf. Does
• 24:24
  Speaker 11: this change it for you?
• 24:25
  Speaker 1: I mean, will you.
• 24:25
  Speaker 3: Watch the livie Well no, I mean here's the thing.
• 24:28
  Speaker 1: I mean, I consume this stuff big time, watch all
• 24:31
  Speaker 1: the golf all the you know, all the time. I
• 24:33
  Speaker 1: haven't watched any live For my personal reasons, I don't
• 24:36
  Speaker 1: support that tour. I have nothing against the players who
• 24:39
  Speaker 1: went there, because it's a great opportunity for them to
• 24:41
  Speaker 1: make way more money than they could on the PGA Tour,
• 24:44
  Speaker 1: So good for them. But you felt at some point
• 24:46
  Speaker 1: that for the game of golf. Yet they had to
• 24:48
  Speaker 1: have to get back together at some force in some way,
• 24:51
  Speaker 1: but I thought it would have been and I still
• 24:52
  Speaker 1: think it needs to be with the PGA Tour kind
• 24:54
  Speaker 1: of leading the way. So we'll have to get a
• 24:56
  Speaker 1: lot more reporting, and I guess you know, I love that.
• 24:58
  Speaker 1: I can't wait to see the prescott on this.
• 25:00
  Speaker 11: I know the kinds of questions that they'll be asking.
• 25:03
  Speaker 11: By the way, we're going to be speaking with Mike One,
• 25:05
  Speaker 11: who is the CEO of the US Golf Association, which
• 25:09
  Speaker 11: is kind of the umbrella body that oversees amateur golf,
• 25:12
  Speaker 11: so lots and lots of questions for him. I don't
• 25:14
  Speaker 11: know what this means in terms of the DOJ also
• 25:16
  Speaker 11: looking into the PGA and whether they would approve this
• 25:19
  Speaker 11: kind of murder as well.
• 25:20
  Speaker 1: Yep, okay, great stuff, you know, Scarlet Fu, thank you
• 25:24
  Speaker 1: so much. We appreciate that. Scarlet Fool Supper Television and
• 25:27
  Speaker 1: Belly Lipscholtz covering all the market stuff and the movers
• 25:29
  Speaker 1: on this golf news. Belly Lipschultz from Bloomberg News covering
• 25:32
  Speaker 1: the market.
• 25:33
  Speaker 6: You're listening to the tape Ken's Are Live program Bloomberg
• 25:36
  Speaker 6: Markets weekdays at ten am Eastern on Bloomberg Radio, the
• 25:40
  Speaker 6: tune in app, Bloomberg dot Com, and the Bloomberg Business App.
• 25:43
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• 25:46
  Speaker 6: flagship New York station Just Say Alexa playing Bloomberg eleven thirty.
• 25:52
  Speaker 3: Just checking in here.
• 25:53
  Speaker 1: I'm seeing on Alson Williams has got one of these
• 25:56
  Speaker 1: notes that you just have to read because if you
• 25:58
  Speaker 1: think about you investing in the big band, recently it's
• 26:01
  Speaker 1: been about, hey, when are they going to start returning cash.
• 26:03
  Speaker 3: To shareholders and maybe even more cash to shareholders. Yeah,
• 26:06
  Speaker 3: we had to.
• 26:06
  Speaker 1: Pay our we were in the penalty box after the
• 26:08
  Speaker 1: Great Financial Crisis. But time to start paying back some money.
• 26:12
  Speaker 3: And they were.
• 26:13
  Speaker 1: But now Allison's suggesting maybe maybe putting the brakes on it.
• 26:15
  Speaker 1: Alison Williams jorians that she's a senior banks analyst for
• 26:18
  Speaker 1: Bloomberg Intelligence. I know, Alison, you've got a research note
• 26:20
  Speaker 1: out today kind of talking about that issue.
• 26:22
  Speaker 3: So are their banks pulling back on their buybacks?
• 26:26
  Speaker 9: So I think the banks are taking applause. Hopefully the
• 26:29
  Speaker 9: strength that we saw in the first quarter is not
• 26:32
  Speaker 9: a one hit wonder. But what we had seen was
• 26:37
  Speaker 9: last year. At the June stress tests, we were sort
• 26:42
  Speaker 9: of surprised. Back in America, JP Morgan and City Group
• 26:47
  Speaker 9: were also surprised in terms of the results of that
• 26:49
  Speaker 9: test and pushing up their higher capital requirements. They pulled
• 26:55
  Speaker 9: back for a few quarters, shrunk their balance sheet, got
• 26:58
  Speaker 9: their capital ratios, return to buybacks. Wells Fargo also on
• 27:03
  Speaker 9: pause return to buybacks. Keep in mind they had some
• 27:06
  Speaker 9: huge legal expenses last year, still relating to some of
• 27:09
  Speaker 9: their historical issues. So first quarter we had better buybacks
• 27:15
  Speaker 9: than expected, sort of sort of almost across the board.
• 27:18
  Speaker 9: But now banks are taking a pause and there's a
• 27:21
  Speaker 9: few good reasons for that. One is higher capital is
• 27:25
  Speaker 9: coming requirements, so it's coming for the industry. Part of
• 27:29
  Speaker 9: that is due to the March turmoil. Part of that
• 27:32
  Speaker 9: is something we refer to as Basil three endgame, which
• 27:35
  Speaker 9: the banks have been waiting for for a long time.
• 27:38
  Speaker 9: So we have that. Nathan Dean thinks that, who's our
• 27:41
  Speaker 9: regulatory analyst, thinks that could be coming next week. And
• 27:45
  Speaker 9: then we had the stress tests again, and you know,
• 27:48
  Speaker 9: the issue is the stress tests set a buffer for
• 27:51
  Speaker 9: these banks based on the losses that they see and
• 27:54
  Speaker 9: the extent of the losses and the extent of the decline,
• 27:57
  Speaker 9: and we have a higher starting point for a home
• 27:59
  Speaker 9: price is we have a higher starting point for employment,
• 28:02
  Speaker 9: which means the decline is greater, and we could see
• 28:05
  Speaker 9: increases related to that test. So we think banks are
• 28:07
  Speaker 9: going to be conservative. And by the way, we have
• 28:10
  Speaker 9: an economy that we're very uncertain about.
• 28:13
  Speaker 5: So if we're more conservative when it comes to the
• 28:15
  Speaker 5: bank side of things, when it does come to buybacks,
• 28:18
  Speaker 5: does the broader stock market begin to lose a bit
• 28:21
  Speaker 5: of a pillar support there to prop it up.
• 28:24
  Speaker 9: So I think it probably depends across companies. You know,
• 28:30
  Speaker 9: the one but the one bank that we think really
• 28:33
  Speaker 9: has the potential toinuous, continuous strong bank. Well, I guess
• 28:37
  Speaker 9: there's two banks. There's Morgan Stanley, who really is more
• 28:41
  Speaker 9: of an asset and wealth manager at this point, but
• 28:43
  Speaker 9: then there's also Wells Fargo. And the reason why but
• 28:46
  Speaker 9: Wells Fargo is likely to continue buybacks is they don't
• 28:50
  Speaker 9: have a lot of other options because their bound cheat
• 28:54
  Speaker 9: growth is restricted, and they also maybe passed the worst
• 29:00
  Speaker 9: of those legal issues, So we have a special case there.
• 29:03
  Speaker 9: So you know, looking I think more broadly, and Gina
• 29:06
  Speaker 9: mar and Adams and her team does a lot of
• 29:08
  Speaker 9: work on this, but looking more broadly, if the environment
• 29:11
  Speaker 9: is weaker, does that open up the opportunity for buybacks broadly?
• 29:15
  Speaker 1: So, Allison, I mean, it seems like the banks are
• 29:18
  Speaker 1: finding themselves back in the doghouse a little bit from
• 29:20
  Speaker 1: a regulatory perspective. They it's been almost more than a
• 29:23
  Speaker 1: decade trying to you know, get themselves out of that
• 29:26
  Speaker 1: are for the Great Financial Crisis? Is it just because
• 29:28
  Speaker 1: a couple of regional banks couldn't manage interest rate risk?
• 29:32
  Speaker 9: So I think, yeah, I think there's a few things
• 29:34
  Speaker 9: going on there. I think for the for the biggest
• 29:36
  Speaker 9: banks that I cover, you know, we had sort of
• 29:40
  Speaker 9: gotten to this really strong period. Then the pandemic hit
• 29:44
  Speaker 9: that changed some things, and you know, I think that
• 29:49
  Speaker 9: the one thing that is really difficult to manage is
• 29:55
  Speaker 9: this process so that we have we've had stress tests
• 29:58
  Speaker 9: since the Financial crisis, but the process now is every
• 30:01
  Speaker 9: year we have a test and so every year your
• 30:04
  Speaker 9: requirement can change. So you're basically having to manage a
• 30:08
  Speaker 9: business for the long term to a target that moves
• 30:11
  Speaker 9: every year. And so I think that that is sort
• 30:13
  Speaker 9: of difficult, and it is set up so that you know,
• 30:17
  Speaker 9: the higher the starting point, right, the better things you are,
• 30:19
  Speaker 9: the more conservative you'll be with capital. And so that
• 30:22
  Speaker 9: was a little bit what I alluded to. That was
• 30:24
  Speaker 9: a little bit that we saw last year. But I
• 30:25
  Speaker 9: think that is definitely noise that it's introduced for And
• 30:31
  Speaker 9: Basil three endgame is another thing that has been coming
• 30:34
  Speaker 9: for a long time. I mean, you know, Paul that
• 30:37
  Speaker 9: the Basil three rules came out, I mean how long ago,
• 30:40
  Speaker 9: and we're still looking to finalize those from the crisis.
• 30:43
  Speaker 9: And for the regional banks, it is a few banks
• 30:48
  Speaker 9: that mismanaged risk. But the regulator's job is to say,
• 30:53
  Speaker 9: you know, could there have been something in place that
• 30:56
  Speaker 9: would have helped these these banks keep things online? Right,
• 31:01
  Speaker 9: So you know, sometimes rules are meant to protect someone
• 31:06
  Speaker 9: like the like the seatbelt law, and you know, the
• 31:09
  Speaker 9: largest banks have a lot of different regulations banks and
• 31:13
  Speaker 9: you know, in recent years some of those got rolled
• 31:16
  Speaker 9: back for sort of the next tier of banks. And
• 31:19
  Speaker 9: now I think regulators are looking at you know, maybe
• 31:21
  Speaker 9: that wasn't such a great.
• 31:22
  Speaker 5: Idea, Allison. As you know, whenever we talk about buybacks,
• 31:25
  Speaker 5: we also talk about dividends. What are you expecting and
• 31:28
  Speaker 5: could we see an increase in dividends this year.
• 31:30
  Speaker 9: So I do think that we will see for select banks,
• 31:34
  Speaker 9: so Wells Fargo again is one who during the crisis
• 31:37
  Speaker 9: cut their dividend. They were perhaps more a little too
• 31:41
  Speaker 9: aggressive before the crisis, just in terms of you know,
• 31:46
  Speaker 9: part of it is of provisions, which there was a
• 31:49
  Speaker 9: new accounting that makes that more volatile, legal issues more volatile.
• 31:53
  Speaker 9: But the bottom line is they're walking back that ratio,
• 31:57
  Speaker 9: moving that up a little bit, and so we think
• 31:59
  Speaker 9: that they could be a standout. For JP Morgan and
• 32:02
  Speaker 9: City Group, it was a real negative last year that
• 32:05
  Speaker 9: we saw flat dividends that we did not see an
• 32:08
  Speaker 9: increase again. I think we're going to have to see
• 32:12
  Speaker 9: what happens over the next month or so. But especially
• 32:16
  Speaker 9: in the case of JP Morgan generating significant capital, they're
• 32:19
  Speaker 9: going to beat their profitability targets this year. They did
• 32:22
  Speaker 9: do the first Republic acquisition that used up some of it.
• 32:26
  Speaker 9: Whereas for a City Group, I think, you know, they
• 32:28
  Speaker 9: still have a lot of balls in the air. They
• 32:31
  Speaker 9: have this IPO that's going to be pushed out now
• 32:33
  Speaker 9: versus the sale of the Bandamax unit, so they could
• 32:37
  Speaker 9: keep more on the conservative side.
• 32:39
  Speaker 1: So Alison, I feel like if I were a bank investor,
• 32:42
  Speaker 1: a banks investor, I think what I have to do
• 32:45
  Speaker 1: is just buy the best balance sheet. I can't take
• 32:47
  Speaker 1: any risk really because I just it just feels like
• 32:50
  Speaker 1: the pendulum is starting to swing back again against the banks.
• 32:53
  Speaker 9: I think in general, for banks, you want to buy
• 32:56
  Speaker 9: the biggest risk manager, right because there are you know,
• 33:00
  Speaker 9: there's a lot of things you don't know, and it's
• 33:03
  Speaker 9: you want to be with the team that is sort
• 33:07
  Speaker 9: of looking at their portfolio of businesses and their portfolio
• 33:09
  Speaker 9: of risk and managing those risks effectively. Because in general,
• 33:15
  Speaker 9: financial stocks, you know that all stocks, we know that
• 33:20
  Speaker 9: the saying goes to, you know, buy into the fear
• 33:25
  Speaker 9: financial stocks certainly you know fit that. Again, I'm not
• 33:30
  Speaker 9: making that recommendation since we don't do that at Boomberg.
• 33:33
  Speaker 9: I'm just saying, like, you know, there's a saying out there,
• 33:35
  Speaker 9: and certainly financial stocks, you know, when there's fear, people
• 33:39
  Speaker 9: become very uncertain, right, They become uncertain about the unknowns,
• 33:42
  Speaker 9: the no nonnwns, unknown nonnwns, and so you really just
• 33:47
  Speaker 9: want to have someone at the helm and you want
• 33:50
  Speaker 9: to invest in the bank at the helm who can
• 33:53
  Speaker 9: manage those risks.
• 33:54
  Speaker 5: Accordingly, we only have about a minute left. I know
• 33:57
  Speaker 5: you focus more when it comes to the big banks
• 33:59
  Speaker 5: instead of the regionals, But where are you looking right
• 34:01
  Speaker 5: now for any sort of red flags. Obviously have gotten
• 34:04
  Speaker 5: a couple months out of those bank stresses that we
• 34:06
  Speaker 5: saw in March.
• 34:07
  Speaker 8: I think you know that.
• 34:09
  Speaker 9: So we had some of the surprises, and granted there
• 34:12
  Speaker 9: were idiosyncratic risks, but these are broad issues. So the
• 34:17
  Speaker 9: cost of deposits, you know, the funding is going up,
• 34:21
  Speaker 9: and commercial real estate I think is something that's well
• 34:24
  Speaker 9: known in the market. So I think we have sort
• 34:27
  Speaker 9: of a lot of the red flags out there, and
• 34:30
  Speaker 9: especially with regional banks, you know, with the pricing that
• 34:33
  Speaker 9: they're they're at, they're they're pricing in a lot of risso,
• 34:37
  Speaker 9: you know, and maybe another way of looking at it is,
• 34:39
  Speaker 9: you know, what could be the opportunities Fixed income trading
• 34:44
  Speaker 9: I think is one area that will continue to benefit
• 34:47
  Speaker 9: and it's when you look across these banks. You know,
• 34:52
  Speaker 9: granted markets were very difficult last year. Banking fees, as
• 34:56
  Speaker 9: we know, our down all up, but trading is a
• 34:58
  Speaker 9: big source of revenue and some of these capital markets
• 35:01
  Speaker 9: banks could still continue to benefit from that area.
• 35:04
  Speaker 3: All right, Alison, thank you very much.
• 35:06
  Speaker 1: As always, love getting your thoughts there on the big banks,
• 35:09
  Speaker 1: Allison Williams. She's a senior analyst covering all the banks
• 35:13
  Speaker 1: for Bloomberg Intelligence. He's also the director of Research for
• 35:16
  Speaker 1: the US for Bloomberg Intelligence.
• 35:21
  Speaker 2: Thanks for listening to the Bloomberg Markets podcast. You can
• 35:24
  Speaker 2: subscribe and listen to interviews at Apple Podcasts or whatever
• 35:28
  Speaker 2: podcast platform you prefer. I'm Matt Miller. I'm on Twitter
• 35:32
  Speaker 2: at Matt Miller nineteen seventy three.
• 35:34
  Speaker 3: And I'm Paul Sweeney. I'm on Twitter at pt Sweeney.
• 35:37
  Speaker 1: Before the podcast, you can always catch us worldwide at
• 35:39
  Speaker 1: Bloomberg Radio.