Latest / Bloomberg Intelligence / A Closer Look At The Fed And Renewables

Transcript

A Closer Look At The Fed And Renewables · 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. Every business day we bring
• 0:06
  Speaker 1: you interviews from CEOs, market pros, and Bloomberg experts, along
• 0:11
  Speaker 1: with essential market moving news. Find the Bloomberg Markets podcast
• 0:15
  Speaker 1: called Apple Podcasts or wherever you listen to podcasts, and
• 0:18
  Speaker 1: at Bloomberg dot com slash podcast. All right, let's bring
• 0:21
  Speaker 1: in Janelle Woodward, President McKay Shields. Uh, Jennell, thanks so
• 0:25
  Speaker 1: much for joining us here. We love to get your thoughts.
• 0:28
  Speaker 1: I mean, you get a little bit of a roll
• 0:29
  Speaker 1: over in the market today. UM, but I'd love to
• 0:31
  Speaker 1: get your thoughts on this Federal Reserve. Are you comfortable
• 0:37
  Speaker 1: with kind of that the pace of the tapering and
• 0:40
  Speaker 1: more importantly, the communication around potential rate increases or are
• 0:45
  Speaker 1: you in that camp that I think is growing that's
• 0:47
  Speaker 1: saying maybe the Feds kind of falling behind here. Well,
• 0:51
  Speaker 1: thank you so much for having me and and I
• 0:53
  Speaker 1: think a really important question as we think about our
• 0:55
  Speaker 1: outlook into Um, I think we're to the first party
• 1:00
  Speaker 1: your question. We are comfortable with tapering and what's been communicated,
• 1:03
  Speaker 1: you know, I think what is still outstanding is whether
• 1:06
  Speaker 1: or not that pace changes as we get through in
• 1:08
  Speaker 1: November and into December. But you're right to think what
• 1:12
  Speaker 1: the market is really watching is what happens from a
• 1:15
  Speaker 1: liftoff perspective, and and tightening, which is now projected to
• 1:18
  Speaker 1: be somewhere in in in mid two UM. You know,
• 1:22
  Speaker 1: to us, demand is strong, consumers resilient. You're just referencing
• 1:25
  Speaker 1: that as we look at some of the earnings and
• 1:27
  Speaker 1: retail data. But it really comes back to this, to
• 1:30
  Speaker 1: the conversation around inflation. So what kind of inflation do
• 1:34
  Speaker 1: you expect in two and is it going to be
• 1:37
  Speaker 1: enough to drive the Fed fundrate up to fifty basis
• 1:40
  Speaker 1: points between fifty and seventy five, because that's what the
• 1:43
  Speaker 1: market is pricing in right now, and I feel like
• 1:45
  Speaker 1: it just seems a little aggressive for this dovish group
• 1:49
  Speaker 1: of Fed governors. Yeah, I think, you know, when we
• 1:53
  Speaker 1: when we look at inflation, I mean, I think there's
• 1:55
  Speaker 1: still this question of transitory and I think one of
• 1:58
  Speaker 1: the challenges is that we've seen demand come back and
• 2:01
  Speaker 1: be quite robust, and we're still seeing that met with
• 2:04
  Speaker 1: some of the pressures and supply chain UM. And then
• 2:06
  Speaker 1: we also have the commodity story at place that's definitely
• 2:09
  Speaker 1: creating some short term pressure. It's interesting to look at
• 2:13
  Speaker 1: five year inflation expectations versus more forward looking inflation expectations.
• 2:18
  Speaker 1: There's still some confidence that inflation is somewhat transitory and
• 2:23
  Speaker 1: or the set is going to get it right. So
• 2:25
  Speaker 1: and we think it's probably prudent at some point for
• 2:28
  Speaker 1: them to step into the market in two. But to
• 2:31
  Speaker 1: your point, it's probably a little bit slower as we
• 2:35
  Speaker 1: continue to really just kind of navigate the cycle and
• 2:38
  Speaker 1: and some of the unprecedented recovery that we've been seeing.
• 2:41
  Speaker 1: You know. I know you are used to be the
• 2:42
  Speaker 1: formal global head of fixed income at Demo Global Asset Management,
• 2:46
  Speaker 1: and I have to say, I really feel sorry for
• 2:48
  Speaker 1: my friends that are fixed income portfolio managers. I look
• 2:51
  Speaker 1: at the tenure at one point five and I'm like,
• 2:54
  Speaker 1: what do people do all day? Where do you find
• 2:56
  Speaker 1: opportunities in the fixed income market? Now? You I think
• 3:00
  Speaker 1: it's a question that we continue to have a lot
• 3:02
  Speaker 1: of dialogue on with with with our clients, especially as
• 3:05
  Speaker 1: we think about what the implications are for real returns,
• 3:08
  Speaker 1: you know, going back to what we're seeing on the
• 3:10
  Speaker 1: earnings picture, gives us a lot of confidence and you
• 3:13
  Speaker 1: basically have to manage down expectations. Right. Well, I think
• 3:17
  Speaker 1: there's two pieces of it. You know, one, yes, of course,
• 3:20
  Speaker 1: it's about thinking about what the expectations are. But the
• 3:23
  Speaker 1: other piece of it is how can you get total returned?
• 3:25
  Speaker 1: So you know, the yield is one component, but how
• 3:28
  Speaker 1: can we capture opportunities to create a better total return
• 3:31
  Speaker 1: picture than the yield? What otherwise support? So for us,
• 3:35
  Speaker 1: it comes back to credit sectors which continue to be resilient.
• 3:38
  Speaker 1: But then looking underneath of that and saying where we
• 3:41
  Speaker 1: see strength, where do we see recovery? Real estate that
• 3:43
  Speaker 1: you highlighted, the consumer, some of the leisure sectors coming back,
• 3:47
  Speaker 1: and we think there's still good opportunities to get to
• 3:51
  Speaker 1: positive real returns through using a total return approach. All right,
• 3:57
  Speaker 1: So if we look at the SMP five right now,
• 4:02
  Speaker 1: and on the equity side of the equation, it seems
• 4:05
  Speaker 1: priced to perfection and we're starting to realize that you've
• 4:09
  Speaker 1: got to have earnings to impress. Um, you were talking,
• 4:12
  Speaker 1: we were talking about the retailers. You mentioned them as well. Um,
• 4:15
  Speaker 1: if you get margin compression because you can't pass on
• 4:18
  Speaker 1: the higher prices, you're in trouble. How do you see
• 4:21
  Speaker 1: that going forward? Yeah, I think it's a great question
• 4:24
  Speaker 1: as we look back on their earning cycle. It's one
• 4:27
  Speaker 1: of the things that was raised to date and through
• 4:29
  Speaker 1: the third quarter we saw UM corporations effective and their
• 4:34
  Speaker 1: ability to pass on the prices, but certainly important, especially
• 4:38
  Speaker 1: if we don't have the demand to support it into
• 4:40
  Speaker 1: into two. You know, it's been interesting. Even if we
• 4:43
  Speaker 1: look at spread markets and we look at the curve,
• 4:45
  Speaker 1: we do see some softening as we get these inflation.
• 4:48
  Speaker 1: UM prints worried about both the ability to pass it
• 4:51
  Speaker 1: on and what does it mean for earnings, but also
• 4:54
  Speaker 1: if it forces the Fed to act, what it does
• 4:56
  Speaker 1: to the overall broader support of the economy. Do you know, Woodward,
• 5:00
  Speaker 1: thank you so much for joining us, or really appreciate
• 5:03
  Speaker 1: your thoughts and you're taking the time, do you know, Woodward,
• 5:05
  Speaker 1: President of McKay Shields looking at the market. You know,
• 5:12
  Speaker 1: we had the COP twenty six conference in Glasgow over
• 5:16
  Speaker 1: the last couple of weeks and I don't know, maybe
• 5:18
  Speaker 1: it's just me, but I was expecting some big stuff,
• 5:21
  Speaker 1: some big announcements, and I'm not sure looking back that
• 5:23
  Speaker 1: I necessarily got that a lot of talk here, but boy,
• 5:27
  Speaker 1: there's a certainly a lot to discuss here. Let's get
• 5:30
  Speaker 1: into a little bit of that as we think about
• 5:32
  Speaker 1: the President Biden's in Infrastructure Bill, renewable energy and what
• 5:36
  Speaker 1: we did maybe get from COP twenty six. We can
• 5:38
  Speaker 1: do that today with VJ. Monter Purgata. He's a president
• 5:41
  Speaker 1: and CEO of Montrose Environmental Group. So, VJ, is my
• 5:45
  Speaker 1: takeaway from COP twenty six? Am I being a little
• 5:48
  Speaker 1: too pessimistic? Or what did you take away from that? Hey, Paul,
• 5:52
  Speaker 1: Hey Matt, it's great to be talking to you guys.
• 5:54
  Speaker 1: Um you know, I it's uh, it's kind of a
• 5:58
  Speaker 1: tale of two cities for me, Paul, Matt. It's if
• 6:01
  Speaker 1: you think about wanting to stabilize the impact of the climate,
• 6:06
  Speaker 1: it's a monumental human endeavor um. And so you know,
• 6:10
  Speaker 1: if you think about the the lack of consistency of
• 6:14
  Speaker 1: political will um of standards um uh, and and the
• 6:20
  Speaker 1: the need to build a consensus um, we're in effect
• 6:24
  Speaker 1: the hold into the slowest adopters, right, So you know
• 6:28
  Speaker 1: the need to put these leaders together and have the
• 6:30
  Speaker 1: delegates come through and think about how to build that
• 6:33
  Speaker 1: consensus is important. But then if you step back and
• 6:35
  Speaker 1: think about the the the desire by all of us,
• 6:40
  Speaker 1: and you alluded to it Paullen matt to wanting more
• 6:42
  Speaker 1: action and clear goals UM and visible steps were far
• 6:47
  Speaker 1: from it. So in that sense, it's a little disappointing
• 6:51
  Speaker 1: UM and I think we haven't done enough to unleash
• 6:53
  Speaker 1: the power of the market UM to help achieve some
• 6:56
  Speaker 1: of those goals. So do we expect miss your market
• 7:00
  Speaker 1: to do UM more than MR Government has done. I mean,
• 7:06
  Speaker 1: we talk every day with people about how E s
• 7:08
  Speaker 1: G is more than a trend now it's actually a strategy.
• 7:11
  Speaker 1: But we still don't have any great metrics. Maybe that's
• 7:15
  Speaker 1: one good thing that's come out of copy and we
• 7:17
  Speaker 1: still have a lot of greenwashing. Yeah, I mean, look,
• 7:24
  Speaker 1: my general view is that you need a little bit
• 7:26
  Speaker 1: of MR Government and MR market, But depending on your
• 7:29
  Speaker 1: goal UM, especially for all the reasons we just talked about, right,
• 7:33
  Speaker 1: lack of lack of consistency and consensus, MR market is
• 7:36
  Speaker 1: going to be much more powerful here UM to setting
• 7:40
  Speaker 1: a set of frameworks and standards that everyone around the
• 7:42
  Speaker 1: world can work towards. UM. E s G is a
• 7:45
  Speaker 1: little bit of a different force Paul, and that it's
• 7:48
  Speaker 1: one that we're both subject to and a lot of
• 7:50
  Speaker 1: our investors are really interested in UM and I continue
• 7:55
  Speaker 1: to struggle with what it means though by virtue of
• 7:58
  Speaker 1: all the things we do that we think, is it
• 8:00
  Speaker 1: from Montrose and for our business and for our clients.
• 8:02
  Speaker 1: We've kind of accidentally fallen into being an E S
• 8:05
  Speaker 1: G company and making a positive impact. But but yeah,
• 8:09
  Speaker 1: we we hear those concerns from our investors all the time,
• 8:12
  Speaker 1: you know, VJ. There's a lot of folks, including uh,
• 8:15
  Speaker 1: Michael Bloomberg, the founder of Bloomberg LP and this radio
• 8:18
  Speaker 1: operation that believes it's really up to the cities that's
• 8:22
  Speaker 1: where you can get a lot of stuff done. You know, UM,
• 8:27
  Speaker 1: how do you think about that strategy as opposed to
• 8:30
  Speaker 1: getting the whole world together in Glasgow? It's I mean,
• 8:35
  Speaker 1: the cities play a play a huge role, Pauly Matt,
• 8:37
  Speaker 1: but I don't know that I fully agree that it's
• 8:40
  Speaker 1: all up to the cities. UM. There are huge swaths
• 8:44
  Speaker 1: of participants, UM, you know, in agricultural communities, in places
• 8:49
  Speaker 1: where cities perhaps don't play as prominent of a role.
• 8:53
  Speaker 1: Those of us like the two of you and me
• 8:55
  Speaker 1: that go between cities all the time. I think cities
• 8:59
  Speaker 1: have a material role, but not the only role to play. UM.
• 9:04
  Speaker 1: So I struggle when there's kind of the responsibility shouldered
• 9:08
  Speaker 1: by one group. I think this is one of those
• 9:10
  Speaker 1: areas where you need businesses, communities, cities, countries, the transportation sector,
• 9:17
  Speaker 1: the inter government UM agencies all working together. I mean,
• 9:21
  Speaker 1: if you, if you think about the pandemic, is an
• 9:25
  Speaker 1: example of how coordinated that was in terms of the response.
• 9:28
  Speaker 1: And I'm not saying it was perfect. Um we we
• 9:32
  Speaker 1: set a pretty monumental goal collectively across countries, within countries,
• 9:37
  Speaker 1: private sector, public sector, and we made a hell of
• 9:39
  Speaker 1: a dent um. It would be great to see something
• 9:42
  Speaker 1: coordinated like that on the topic of this nature. What's
• 9:45
  Speaker 1: the one most powerful change we could see? V G.
• 9:51
  Speaker 1: You know, I I read a story I think a
• 9:54
  Speaker 1: couple of weeks ago saying that, um, the major producers
• 9:58
  Speaker 1: from the u US, from Germany, from Japan need to
• 10:04
  Speaker 1: promise to stop building internal combustion engines, which you know,
• 10:09
  Speaker 1: on the one hand, that hurts me, it's like a
• 10:11
  Speaker 1: wooden stake deep into my heart. On the other hand,
• 10:13
  Speaker 1: it makes a lot of sense, because, um, you know,
• 10:18
  Speaker 1: they're responsible for a huge portion of carbon emissions personal vehicles,
• 10:23
  Speaker 1: and it strikes me as also, Um, I don't know
• 10:28
  Speaker 1: if the term ironic is right ever since a lot
• 10:30
  Speaker 1: is more set. But that that that all these car
• 10:33
  Speaker 1: makers like, we're going to electrify her whole fleet by
• 10:36
  Speaker 1: But when you say, does that mean you won't be
• 10:38
  Speaker 1: producing any internal combustion engines? Like, no, no, no, no,
• 10:41
  Speaker 1: no no, We're still going to be building those. So
• 10:44
  Speaker 1: is that do you think the biggest change that we
• 10:46
  Speaker 1: could make as a society. No, no, I think, And
• 10:51
  Speaker 1: I think part of the problem Paula Matt is that
• 10:54
  Speaker 1: you know, we're trying to prescribe a solution. And this
• 10:56
  Speaker 1: goes back to what I was trying to say earlier.
• 10:58
  Speaker 1: I probably didn't say it all that eloquently. Be great
• 11:00
  Speaker 1: to let the market help decide what that set of
• 11:03
  Speaker 1: solutions should be. I think one of the biggest changes
• 11:06
  Speaker 1: we could make is to set a price on carbon
• 11:08
  Speaker 1: and to set in place some kind of cap and
• 11:10
  Speaker 1: trade mechanism, but more on a global scale, and then
• 11:14
  Speaker 1: let capital, innovation and market forces determine whether you want
• 11:20
  Speaker 1: combustion engines or not, and how they would phase out
• 11:24
  Speaker 1: if at all, um and which sectors and which parts
• 11:28
  Speaker 1: um of the markets, of the economy, of the global
• 11:32
  Speaker 1: production cycle, which by the way includes a whole lot
• 11:35
  Speaker 1: more than each of us driving cars, how all that
• 11:38
  Speaker 1: would play out. So I think I personally would go
• 11:41
  Speaker 1: several steps higher than just picking on one aspect of
• 11:47
  Speaker 1: a source of emissions d j um. The Infrastructure Bill
• 11:51
  Speaker 1: Present Bidence Infrastructure Bill, it's got some stuff in there
• 11:54
  Speaker 1: about the environment. Is it enough? Is it a good step?
• 11:57
  Speaker 1: Do you think it's a it's a good step. I
• 12:01
  Speaker 1: think um. You know, from Mantra's perspective, Polymat it's uh.
• 12:06
  Speaker 1: The investments infrastructure which are good for our country, have
• 12:10
  Speaker 1: a positive impact on our services and the demand for
• 12:13
  Speaker 1: our services um and a lot of it. Uh. It
• 12:16
  Speaker 1: requires anytime you build a road, anytime we build a bridge,
• 12:19
  Speaker 1: already with existing rules and laws, you have to do
• 12:22
  Speaker 1: environmental assessments um. Uh. And so in that sense it's good.
• 12:26
  Speaker 1: I think it goes one step further, which is encouraging
• 12:29
  Speaker 1: from my perspective. There's dollars in there allocated for the
• 12:32
  Speaker 1: removal of the forever chemicals, the pflus chemicals from water,
• 12:35
  Speaker 1: which is one of the biggest um UH concerns of
• 12:39
  Speaker 1: our generation. Um Uh. There's water infrastructure investments, reuse and
• 12:44
  Speaker 1: access investments. So all of those um types of initiatives
• 12:48
  Speaker 1: I think are good for the environment and good for
• 12:50
  Speaker 1: the community, which is why I think it's great. All right,
• 12:52
  Speaker 1: VJ thank you so much for joining us. Really appreciate
• 12:55
  Speaker 1: your time and getting your perspective. VJN. Pagata, President and
• 12:59
  Speaker 1: c of Mantro's Environmental Group. Kind of working with companies
• 13:04
  Speaker 1: UH to surprise support for cleaner air, cleaner water, and
• 13:08
  Speaker 1: there's a lot to be done. In copy six was
• 13:11
  Speaker 1: a move forward. You know, we're here, we are in November,
• 13:16
  Speaker 1: mid November. Start time to get some of those year
• 13:19
  Speaker 1: ahead outlook pieces. And boy, after the year we've had
• 13:22
  Speaker 1: this year, a lot of folks, I'm not seeing a
• 13:25
  Speaker 1: lot of consistency out there, a lot of consensus, I
• 13:26
  Speaker 1: should say, but let's bring our next guest and see
• 13:28
  Speaker 1: where we land here. David Coudla, found their CEO and
• 13:31
  Speaker 1: ce IO of Mainstay Capital Management, joins us. David, you know,
• 13:34
  Speaker 1: we just got through a pretty darn good earning season.
• 13:38
  Speaker 1: Um you know, the FED is kind of communicated what
• 13:42
  Speaker 1: they're gonna do here. It seems pretty clear. Does that
• 13:45
  Speaker 1: set us up for a pretty good two? I think
• 13:51
  Speaker 1: it sets us up for a pretty good It certainly
• 13:54
  Speaker 1: I think sets us up for a good end of
• 13:56
  Speaker 1: year run. But I quickly need to get into the
• 13:58
  Speaker 1: corvette discussion. Oh please, do I have a C seven
• 14:03
  Speaker 1: z R one Corvette? Holding onto it? I have a
• 14:07
  Speaker 1: I have a C eight, but I have the C
• 14:09
  Speaker 1: seven z R one because that is the last, you know,
• 14:13
  Speaker 1: that is the front engine manual transmission, true manual transmission
• 14:16
  Speaker 1: with a stick right that I will have in a corvette.
• 14:19
  Speaker 1: So I'm holding onto that one. I have driven a
• 14:22
  Speaker 1: couple of those, and I'm on the track. In fact,
• 14:25
  Speaker 1: I got to drive a few UM C seven's on
• 14:28
  Speaker 1: the track up at where was that new Jersey Motorsports Park.
• 14:32
  Speaker 1: Gorgeous car, and really I think it was a huge
• 14:36
  Speaker 1: breakthrough from the C six to the C seven. Um
• 14:40
  Speaker 1: they made uh so much headway and it's the last
• 14:45
  Speaker 1: of the front engine cars. So I will say, having
• 14:47
  Speaker 1: lived in Germany now David for a few years and
• 14:49
  Speaker 1: I've been driving a nine eleven on the auto bawn,
• 14:52
  Speaker 1: it's not ideal for high speeds. You want the weight
• 14:55
  Speaker 1: in the front when you're going fast. Sorry, my red
• 14:59
  Speaker 1: railing this conversation, right, But I do want to try THEE.
• 15:03
  Speaker 1: So if I'm ever near you, I'm gonna ask to
• 15:05
  Speaker 1: drive that. Well, well we'll drive them both, and the
• 15:09
  Speaker 1: and this and I drove my C. I've driven the
• 15:11
  Speaker 1: C seven on the track, seven five horsepower zero one.
• 15:15
  Speaker 1: That is a lot of fun. So um. Yeah, So
• 15:19
  Speaker 1: through year end, we think it looks we've still got
• 15:22
  Speaker 1: a very constructive setup for stocks, even given a little
• 15:26
  Speaker 1: bit of weakness we've had over a couple of days
• 15:28
  Speaker 1: last week or this week. As we get into you know,
• 15:32
  Speaker 1: it becomes a function of we have some things on
• 15:34
  Speaker 1: the horizon, right, we have what is going to happen
• 15:38
  Speaker 1: here within the next several days on appointment for the
• 15:41
  Speaker 1: FED chair, what happens with inflation, how high does inflation go?
• 15:45
  Speaker 1: And and the FED needs to act more rather than less. Um. So,
• 15:50
  Speaker 1: you know, some of the things that have been tail
• 15:51
  Speaker 1: winds and accommodative FED become headwinds next year. But for now,
• 15:58
  Speaker 1: a lot of liquidity in the system has been pushing
• 16:00
  Speaker 1: stocks higher. We think we're good through at least year end.
• 16:04
  Speaker 1: Matt was just complaining about how much it costs for
• 16:05
  Speaker 1: him to fill up is f one fifty raptor And
• 16:09
  Speaker 1: that kind of brings us back to that inflation discussion. Um,
• 16:13
  Speaker 1: you know, how big of a headwin is that next year?
• 16:16
  Speaker 1: And I suspect that higher gas prices are the are
• 16:19
  Speaker 1: the biggest problem for inflation expectations because that's when people
• 16:23
  Speaker 1: really notice. They're the biggest problem for President Biden for sure.
• 16:28
  Speaker 1: And we've seen what's been happening, you know what the
• 16:32
  Speaker 1: calls he's been making around the world for other countries
• 16:34
  Speaker 1: to release their spr But yeah, the you know when
• 16:37
  Speaker 1: we talk about inflation, and and really this is the
• 16:40
  Speaker 1: you know, it's I think it's difficult to call what
• 16:43
  Speaker 1: the the peak will be some time next year. But
• 16:46
  Speaker 1: but here's where we're at. The inflation there is a
• 16:49
  Speaker 1: problem because it's a supply chain. It's endurable goods primarily
• 16:52
  Speaker 1: it is affecting you know, other goods and services, but
• 16:55
  Speaker 1: primarily durable goods. And we know that that supply chain heel.
• 17:00
  Speaker 1: It's already Los Angeles sports starting to heal a little
• 17:03
  Speaker 1: bit already, but we know the supply chain will heal.
• 17:06
  Speaker 1: So you know, I would submit by this time next year,
• 17:09
  Speaker 1: we will see inflation a lot lower than these numbers
• 17:12
  Speaker 1: we're seeing now between here and there. How much higher
• 17:15
  Speaker 1: it goes anybody's call, But it's certainly you know, it's
• 17:18
  Speaker 1: certainly risk the market. I think the key thing though,
• 17:20
  Speaker 1: is it's primarily durable goods inflation. When the supply chain heals,
• 17:26
  Speaker 1: we'll see we'll see inflation subside, and we'll see some
• 17:29
  Speaker 1: of the secular forces like technology that have been deflationary.
• 17:33
  Speaker 1: UH started to become more pronounced again. All right, David,
• 17:36
  Speaker 1: thank you so much. We appreciate your calls on the
• 17:39
  Speaker 1: market and your calls on the Corvette. Of course, I mean,
• 17:42
  Speaker 1: now we know well where to go. I'm gonna go
• 17:44
  Speaker 1: ahead and say, even though I care deeply about the
• 17:47
  Speaker 1: Corvette and it's an incredible legacy, your call on inflation
• 17:51
  Speaker 1: as um as we were just hearing from Katie Greifeld earlier,
• 17:55
  Speaker 1: is incredibly important in this market. Yeah, it really is,
• 17:58
  Speaker 1: so we appreciated it. Could look coming on, founder CEO
• 18:01
  Speaker 1: and CIO of main Stay Capital Management. Now, let's bring
• 18:07
  Speaker 1: in my friend and yours, Berry Rid Holtz. He's a
• 18:09
  Speaker 1: Bloomberg opinion columnist, UH, and we have brought back David Coudla.
• 18:15
  Speaker 1: We did. Yeah. I don't know if, boy, I don't
• 18:17
  Speaker 1: know if the producers told Barry why. Um, but Barry,
• 18:20
  Speaker 1: we were talking a little bit about corvettes and I
• 18:22
  Speaker 1: was mentioning your C two, and then we talked to
• 18:27
  Speaker 1: David Coudla a little bit earlier and he said, you know,
• 18:31
  Speaker 1: before we get to inflation, let me get on this
• 18:33
  Speaker 1: corvette discussion. He is the CEO of main Stay Capital
• 18:36
  Speaker 1: Management and also a corvette enthusiast. He has a C seven. Um,
• 18:41
  Speaker 1: which one do you have? David? C seven z R
• 18:45
  Speaker 1: one and a sting right. I like the I think
• 18:50
  Speaker 1: they did an amazing job on that. I like both
• 18:52
  Speaker 1: of them. Um. The only ones that I've driven are
• 18:56
  Speaker 1: the C six, which I loved but I couldn't keep
• 19:00
  Speaker 1: um the back wheels on the ground, and the C seven,
• 19:03
  Speaker 1: which I spent a considerable amount of time with on
• 19:05
  Speaker 1: the track. I thought they were both incredible. Um, Barry,
• 19:09
  Speaker 1: what do you think about the shift from the front
• 19:12
  Speaker 1: engine to the mid engine? The C eight is the
• 19:14
  Speaker 1: first time they've moved the engine from you know, the
• 19:17
  Speaker 1: front wheels to behind the driver. Well, if you want
• 19:20
  Speaker 1: to remain competitive in the current marketplace, at least in
• 19:25
  Speaker 1: terms of internal combustion engine and be able to compete
• 19:28
  Speaker 1: with Ferrari and Lamborghini and McLaren and the four GT
• 19:32
  Speaker 1: and go down the list the oud R eight. You
• 19:36
  Speaker 1: there are just so many obvious benefits of moving mid engine.
• 19:40
  Speaker 1: It's it's more balanced, it handles more naturally shifting weight
• 19:44
  Speaker 1: from front to back. If you want to spend time
• 19:46
  Speaker 1: on track, mid engine is really very much um how
• 19:51
  Speaker 1: you're going to ring out those last uh hundreds of
• 19:54
  Speaker 1: a second on on your lap time versus a tail happy,
• 19:58
  Speaker 1: front engine, rear driven traditional muscle car. So, David, do
• 20:03
  Speaker 1: you actually feel the difference? Yes, you do. And GM
• 20:10
  Speaker 1: we have a lot of GM clients. The chief engineer
• 20:13
  Speaker 1: of of the C seven Corvette is a client. Uh.
• 20:18
  Speaker 1: We we have a lot of GM clients and and
• 20:21
  Speaker 1: a lot of discussions about all this and the you know,
• 20:25
  Speaker 1: I agree with Barry. I think GM did an excellent
• 20:27
  Speaker 1: job of squeezing everything they could out of a front
• 20:31
  Speaker 1: engine vehicle. But you know, competing on the track with
• 20:34
  Speaker 1: these other mid engine cars like Ferrari, and when you
• 20:38
  Speaker 1: know everybody starts seeing the numbers for what you know,
• 20:41
  Speaker 1: they're going to be able to do. The Zeo six
• 20:42
  Speaker 1: is coming. Uh. I'm first in line at at a
• 20:46
  Speaker 1: Chevy dealership for the zero six, which will be six
• 20:50
  Speaker 1: dred and seventy horsepower. Um, we're gonna be put I
• 20:54
  Speaker 1: say we. GM is gonna be putting up some numbers
• 20:57
  Speaker 1: that are going to scare some of these car may
• 21:00
  Speaker 1: that are at four, five, six times the cost of that.
• 21:07
  Speaker 1: That's the amazing thing is on a dollar per horsepower rating,
• 21:13
  Speaker 1: what what General Motors was able to accomplish with this
• 21:16
  Speaker 1: car is really quite astonishing that the next closest thing
• 21:21
  Speaker 1: is like a Mustang three fifty or a Mustang g
• 21:24
  Speaker 1: T five that Ford has put out, and you're not
• 21:27
  Speaker 1: going to get the same sort of performance, You're not
• 21:29
  Speaker 1: going to get the same sort of lap times nor
• 21:32
  Speaker 1: the just really uh you know, I know some people
• 21:36
  Speaker 1: find the new VET a little over the top. Um,
• 21:40
  Speaker 1: but so are all of the McLarens and Lamborghinis. It
• 21:44
  Speaker 1: is a car that can compete toe to toe with
• 21:48
  Speaker 1: the best automobiles in the world. It's it's quite an
• 21:51
  Speaker 1: accomplishment with a base price of fifty ridiculous. Barry and David,
• 21:56
  Speaker 1: I have to ask you, guys, um, I think one
• 21:59
  Speaker 1: of the reasons when I see you guys, and I'll
• 22:01
  Speaker 1: throw Matt in there as well. Driving down the road
• 22:03
  Speaker 1: and these awesome, awesome cars. I think one of the
• 22:06
  Speaker 1: reasons you like doing that is because it sounds so cool.
• 22:10
  Speaker 1: As these things go electric, it ain't gonna sound so cool.
• 22:14
  Speaker 1: What do you guys think about that? I'm okay with that.
• 22:17
  Speaker 1: I mean, my my C two has side pipes. It
• 22:20
  Speaker 1: is loud, like you hear me coming to towns away.
• 22:25
  Speaker 1: The ability to sort of stealthily sneak up and and
• 22:28
  Speaker 1: pass the police without them seeing you there, there are
• 22:31
  Speaker 1: advantages to that. And I try and stay, you know,
• 22:34
  Speaker 1: within five to ten miles of the posted speed limit. Well,
• 22:38
  Speaker 1: I'm not looking to have a longer conversation on the
• 22:41
  Speaker 1: side of the road. I'm sure you can with I
• 22:44
  Speaker 1: don't know, but I'm guessing the C eight had you can.
• 22:46
  Speaker 1: You can control the exhaust sounding ways, but it's always
• 22:50
  Speaker 1: gonna make a noise compared to a rivian, Right, David, So,
• 22:53
  Speaker 1: what do you think about the fact that, um, are
• 22:56
  Speaker 1: people gonna buy these products in the husiasts? Are enthusiasts
• 23:01
  Speaker 1: gonna buy these products? Are are motor Head's gonna buy
• 23:04
  Speaker 1: these products. It's already got Riva in a market cap
• 23:07
  Speaker 1: of a hundred thirty billion dollars, which is like forty
• 23:10
  Speaker 1: billion more than GM. Yeah. So here's an analogy is
• 23:15
  Speaker 1: in boats, when you go from an io where you've
• 23:18
  Speaker 1: got those pipes, you may have captain's call where the
• 23:20
  Speaker 1: pipes are in the air round under the water, and
• 23:23
  Speaker 1: you hear it like you do in a car going
• 23:25
  Speaker 1: versus going to outboards. And that's the toughest part boat
• 23:28
  Speaker 1: with you know, my boat without boards, I missed that
• 23:31
  Speaker 1: sound of my boat within with an i OWE And
• 23:34
  Speaker 1: I think for enthusiasts it's the same thing. I think
• 23:37
  Speaker 1: that there are things that the d offers because of
• 23:39
  Speaker 1: a flat torque curve that you you just can't get
• 23:43
  Speaker 1: with with ice vehicles. But uh yeah, we're gonna, we're gonna,
• 23:47
  Speaker 1: we're gonna miss it, or I think enthusiasts will will
• 23:49
  Speaker 1: miss that aspect of it. E v But when you
• 23:52
  Speaker 1: talk about the power of an e v UM, you
• 23:54
  Speaker 1: know there's something for enthusiasts as well. What I'm excited
• 23:58
  Speaker 1: about is to hear the flat plane crank in the
• 24:01
  Speaker 1: zero six um that made a huge difference in the
• 24:08
  Speaker 1: Mustang performance, but mainly the experience when they brought the
• 24:12
  Speaker 1: five point two Leader with the flat plane crank. Now
• 24:15
  Speaker 1: the zero six is going to have that with their
• 24:16
  Speaker 1: five point five Leader. It's a little bit smaller displacement,
• 24:20
  Speaker 1: but I agree with you, David, that has got to
• 24:22
  Speaker 1: be one of the most anticipated releases of the year.
• 24:26
  Speaker 1: And my only hope is that they do a g
• 24:29
  Speaker 1: T three version. You know, Porsche has um the g
• 24:33
  Speaker 1: T three and what I mean is a touring version.
• 24:36
  Speaker 1: What they downplay it. They take off the whale tail,
• 24:40
  Speaker 1: they get rid of the spoilers, and they just make
• 24:43
  Speaker 1: it look more like a touring car. I'd love to
• 24:44
  Speaker 1: have a zero six without all the stuff on it
• 24:48
  Speaker 1: isn't not an option that's like a zero seven package
• 24:52
  Speaker 1: gives you all that flare and the whale tail. I
• 24:55
  Speaker 1: think you could get it fairly modest, can't you. Yeah,
• 24:59
  Speaker 1: you can't, and you can't. And your question about you know,
• 25:03
  Speaker 1: the sound out the tail pipe. You know, one thing
• 25:05
  Speaker 1: that's I love about the Core Bett and a lot
• 25:08
  Speaker 1: of the g M vehicles is the UH with the
• 25:10
  Speaker 1: the variable suspension and UH tuning that they have. You know,
• 25:16
  Speaker 1: you have three modes touring, sport, and track, and I
• 25:19
  Speaker 1: call track beast mode and you get that tail pipe
• 25:22
  Speaker 1: when you're sitting there a vital All right, David could
• 25:25
  Speaker 1: let thank you so much. We appreciated mainstay capital. He
• 25:27
  Speaker 1: came back for a second round the Tall cars. Of course.
• 25:30
  Speaker 1: Barry Richelts, Bloomberg opinion columnist, hosts of Masters in Business,
• 25:33
  Speaker 1: for this little segment of car Talk, bout you buy
• 25:36
  Speaker 1: Matt Miller and your friends at a Bloomberger Radio. Thanks
• 25:41
  Speaker 1: for listening to the Bloomberg Markets podcast. You can subscribe
• 25:44
  Speaker 1: and listen to interviews with Apple Podcasts or whatever podcast
• 25:48
  Speaker 1: platform you prefer. I'm Matt Miller. I'm on Twitter at
• 25:51
  Speaker 1: Matt Miller three. Get on Faull Sweeney. I'm on Twitter
• 25:55
  Speaker 1: at pt Sweeney. Before the podcast, you can always catch
• 25:58
  Speaker 1: us worldwide at Bloomberg Rady