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Rates, SocGen, Markets, and COP27 (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. 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: on Apple Podcasts or wherever you listen to podcasts, and
0:18
Speaker 1: at Bloomberg dot com slash podcast. The narrative here as
0:22
Speaker 1: it relates to rates here in the US is pretty clear.
0:24
Speaker 1: The Federal Reserve is job number one is fighting inflation,
0:27
Speaker 1: aben raising rates to do that. The question is, you know,
0:31
Speaker 1: kind of when will they stop? Where will they stop?
0:33
Speaker 1: And a lot of folks are saying, let's talk about
0:35
Speaker 1: the European markets, in the UK markets, what's going on there?
0:38
Speaker 1: We touch base with Hugh Worthington. He's a European rate
0:41
Speaker 1: strategist for Bloomberg Intelligence based in in London. Hugh, thanks
0:44
Speaker 1: so much for joining us here. Give us your sense
0:48
Speaker 1: of kind of what you're seeing there in the UK
0:50
Speaker 1: and Europe in terms of the rate environment. What are
0:54
Speaker 1: you seeing over there? Well, I think I think the
0:57
Speaker 1: situation in the UK he's putty more and not like
1:00
Speaker 1: sports going on in the US. The UK has been
1:03
Speaker 1: hiking rates for some time. It's been you know, it's
1:05
Speaker 1: it's got its self fairly well down the curve in
1:09
Speaker 1: terms of of of kind of negative of exiting the
1:12
Speaker 1: negative interestrate policy. But the ECB does seem to be
1:15
Speaker 1: lagging still a little bit, and I think there's there's
1:18
Speaker 1: concerns that you know, they they they're they're still behind
1:21
Speaker 1: the curve and their their focus is a primary focus
1:25
Speaker 1: on inflation. They don't have a dual man they like
1:27
Speaker 1: the said just for example, and I think that there's
1:29
Speaker 1: there's a definite sign of the changing attitude there. There's,
1:32
Speaker 1: if you like, the Germans seems to be much more
1:33
Speaker 1: in control of the ECB and the focus very much
1:37
Speaker 1: remains on fighting inflation and it's going to continue that way,
1:39
Speaker 1: I think, and I think they're they're basically the latest
1:41
Speaker 1: things they've been saying is that they are going to
1:43
Speaker 1: be hiking in December and they're going to keep going
1:45
Speaker 1: and they're going to keep hiking into restrictive policy. And
1:47
Speaker 1: it may well be that they're they're still doing that
1:50
Speaker 1: whilst people like the FED in the Bank of England
1:52
Speaker 1: may well be starting to ease off a little bit Well,
1:55
Speaker 1: that's interesting to me because on the one hand, you
1:58
Speaker 1: have these odds of recession, the US specifically going to
2:02
Speaker 1: three really ramping up, but those arts have been quite strong,
2:06
Speaker 1: I want to say, for at least a year now
2:07
Speaker 1: in Europe. Why would they keep hiking. Isn't just to
2:11
Speaker 1: perhaps close the divergence between the ECB and the FED
2:15
Speaker 1: and other central banks, or is there a real fundamental
2:18
Speaker 1: reason behind it? Well, I think I think they're they're
2:21
Speaker 1: very concerned that they know they forget the e CV
2:24
Speaker 1: is still printing cash to buy bonds back in as
2:27
Speaker 1: early as as late as June, so they were still
2:30
Speaker 1: being very accommodatated when things were being being much more
2:34
Speaker 1: strictive elsewhere. Also, you've definitely got some things that are
2:38
Speaker 1: happening in Europe which happened happened for many, many years.
2:41
Speaker 1: There's later stage on wages out from the funny enough
2:44
Speaker 1: in Central Bank of Ireland, on wage growth in places
2:46
Speaker 1: like Germany, wage's running at something like seven percent, and
2:49
Speaker 1: those sort of thing as you haven't seen for fifty years.
2:52
Speaker 1: And it's very hard to know that they think that
2:54
Speaker 1: the ECB is going to get their inflasi and target
2:56
Speaker 1: back down to two percent when German wages are running
2:58
Speaker 1: a nomenal wage worth's running at that sort of level.
3:00
Speaker 1: So they are basically saying that they are going to
3:03
Speaker 1: be having to be hiking into a restrict into restrictive territory.
3:06
Speaker 1: And obviously they look sort of worryingly behind the curve
3:09
Speaker 1: and a rate bill look low in Europe compared to
3:12
Speaker 1: what they are in the English tax and sphere. Also,
3:16
Speaker 1: I think, you know, definitely QT is definitely going to
3:18
Speaker 1: be on the agenda there as well, and that's going
3:20
Speaker 1: to be something which is gonna be probably restrictive for
3:23
Speaker 1: the yields and maybe something which means it can keep
3:26
Speaker 1: yields curves pretty steep. In the UK and Europe. There's
3:29
Speaker 1: a lot of issues that needs to be done to
3:31
Speaker 1: meet in particular things like the energy subsidies that are
3:34
Speaker 1: being put in place to help the economies in the
3:37
Speaker 1: wake of you know, Cuton's illegal actions in Ukraine. Yeah,
3:40
Speaker 1: that's kind of where I want to go here. I mean,
3:42
Speaker 1: you know, the US are our recession discussion is generally
3:46
Speaker 1: if it happens in twenty three, you know, how short
3:50
Speaker 1: will it be, how shallow will it be? That tends
3:51
Speaker 1: to be the discussion narrative talk to us about kind
3:54
Speaker 1: of as European banks continue to tighten, what's the recession
3:59
Speaker 1: discussion over there? Well, I think I think the UK
4:02
Speaker 1: probably is already in recession um and we're expecting a
4:06
Speaker 1: pretty long, if if relatively shallow procession, not to not
4:09
Speaker 1: such a hard recession like I was in two thousd
4:11
Speaker 1: and eight. But it looks the Bank of England and
4:14
Speaker 1: the and and the Office of the Responsibility in the
4:17
Speaker 1: last week's statement in in in the UK Parliament was
4:21
Speaker 1: expecting pretty much a recession to last all next year
4:23
Speaker 1: as well. So it's going to be pretty long and
4:25
Speaker 1: pretty painful, but it maybe not as as as sharp
4:28
Speaker 1: as it was in two thousand and eight. And it's
4:30
Speaker 1: a very much going to be a similar situation. I
4:32
Speaker 1: suspect um in in Europe and in particular in Europe
4:35
Speaker 1: this time around Germany is going to be leading their
4:37
Speaker 1: work the way down and obviously in the past prices
4:40
Speaker 1: in Europe it hasn't been Germany's. It's been hits it hard.
4:42
Speaker 1: But it looks like Germany is going to be the
4:44
Speaker 1: you know, the main the main impact will be in
4:48
Speaker 1: Germany probably next year. I suspect we have about literally
4:53
Speaker 1: thirty seconds here. When does QT start for the e
4:56
Speaker 1: c B. I think they're lands it in in December.
4:59
Speaker 1: I'm not sure they'll they'll and in terms of active sales,
5:01
Speaker 1: but it'll just be basically not letting, not reinvesting bonds
5:05
Speaker 1: as they roll off, and that's obviously gonna matter. An
5:07
Speaker 1: aflot was already very very high issuance needs and that's
5:10
Speaker 1: going to be keeping pressure on nels and spreads high
5:12
Speaker 1: in Europe. All right, you great stuff, As always, always
5:17
Speaker 1: appreciate getting your perspective the UK European rates outlook. Uh
5:22
Speaker 1: there Hugh Worthington European rates strategies for Bloomberg Intelligence. He's
5:25
Speaker 1: based in our London office, Queen Victoria Street, extraordinary building
5:30
Speaker 1: in the city of London, just spectacular. Our brand new
5:33
Speaker 1: headquarters over there opened up a few years ago. Good stuff.
5:36
Speaker 1: Looking at the markets here, uh the pound one spot
5:40
Speaker 1: one eight on your sterling and Europe above parody here.
5:44
Speaker 1: Remember we were below parody several weeks ago. One spot
5:47
Speaker 1: zero two seven eight on US euro ten year treasuries.
5:51
Speaker 1: Talking about rates ten years up thirteen thirty seconds, pushing
5:54
Speaker 1: that yield down to three point seven seven percent on
5:57
Speaker 1: your ten year treasury. It's not a little education now
6:03
Speaker 1: shout we Stephen Kramer, he's the CEO of Bright Horizons.
6:05
Speaker 1: That's a New York Stock Exchange traded company the symbols
6:08
Speaker 1: b F, A M. You put that into your Bloomberg
6:11
Speaker 1: terminal Education services company. The company also offers a child
6:15
Speaker 1: and other dependent care solutions as part of their employee benefits.
6:18
Speaker 1: We work with them, you do, Bloomberg Bloomberg works, We do.
6:22
Speaker 1: That's what I mean. Yeah, if you, you know, have
6:24
Speaker 1: an emergency and you need childcare, an unexpected emergency, or
6:28
Speaker 1: if you just um, you know, have if you're sick
6:31
Speaker 1: and you need childcare, fail step into help. Oh cool, excellent? Uh, Stephen,
6:35
Speaker 1: thanks so much for joining us here. Talk to us
6:36
Speaker 1: about Bright Horizons. What are you guys up to these days.
6:39
Speaker 1: What's your strategy over the next several years to drive
6:43
Speaker 1: your growth. It's a pleasure to be here. Thank you
6:46
Speaker 1: for including me, and thank you obviously to Bloomberg for
6:49
Speaker 1: being a great client over many years. Our strategy remains
6:53
Speaker 1: the same as it always has been. We are very
6:56
Speaker 1: focused on working with our employer clients to support UH
7:00
Speaker 1: their employees. UH to integrate their work in their life.
7:05
Speaker 1: We do that through the provision of on site chold
7:07
Speaker 1: care centers. We provide backup child care as you just outlined,
7:11
Speaker 1: and elder care, and then in addition to that, we
7:14
Speaker 1: support organizations and their employees with workforce education. And so
7:19
Speaker 1: certainly we continue to see great demand across our services
7:23
Speaker 1: and continue to focus on being across those services and
7:27
Speaker 1: also continuing to operate in multiple geographies across the globe.
7:31
Speaker 1: So what kind of growth are you looking at? I
7:32
Speaker 1: can imagine that employers now as they do things like
7:36
Speaker 1: expand um UH parental leave policies and look to offer
7:43
Speaker 1: more solutions for for daycare and elder care, UM, they
7:46
Speaker 1: can attract better candidates UM if they have you know,
7:51
Speaker 1: bright horizons working with them. So what kind of growth
7:53
Speaker 1: are you looking at? Yeah, so we we continue to
7:57
Speaker 1: focus our growth with our employer clients, and you're right,
8:00
Speaker 1: as they continue to recognize all the challenges that their
8:04
Speaker 1: employees are facing with childcare and other dependent care needs
8:08
Speaker 1: as well as in workforce education. UM, we continue to
8:12
Speaker 1: expand our client base, we continue to expand the utilization
8:16
Speaker 1: of our services, and ultimately that propels our growth forward. UH.
8:20
Speaker 1: Each and every year. Is it quantifiable? Yeah, So in
8:25
Speaker 1: typical times we were growing at sort of call it
8:28
Speaker 1: eight to ten per um. We had a major dislocation
8:33
Speaker 1: obviously in COVID UH. And so back in March and
8:36
Speaker 1: April we closed eight percent of our centers. Obviously saw
8:40
Speaker 1: a significant degradation UM in UH, in our revenue as
8:44
Speaker 1: well as the services that we deliver UM. We are
8:47
Speaker 1: at this point continuing to grow at a much faster
8:50
Speaker 1: clip against the comps of the prior two years. But
8:54
Speaker 1: we expect in the long term that our growth algorithm
8:56
Speaker 1: will come back into UH that more normalized place UH
9:00
Speaker 1: and continue on on that starting in the next year
9:03
Speaker 1: or two. So, Steve and I gotta imagine, like many
9:06
Speaker 1: many many businesses and industries, you were dramatically impacted by
9:10
Speaker 1: the pandemic. How have you your discussions with your clients
9:15
Speaker 1: kind of evolved over the last several years as we
9:18
Speaker 1: come out on the other send, the other end of
9:19
Speaker 1: this pandemic. Yeah, So there has been a great awakening
9:24
Speaker 1: among employers. I call it a great renaissance among employers
9:27
Speaker 1: recognizing that they need to lean in more heavily than
9:30
Speaker 1: they ever have. And so in the current situation where
9:35
Speaker 1: there's a war for talent, or even in a scenario
9:38
Speaker 1: where employers are just simply looking for UM, you know,
9:42
Speaker 1: supports that allow for productivity of their employees. UM. There
9:46
Speaker 1: has been great receptivity towards the services we offer. UM.
9:50
Speaker 1: I think it's well understood that through the pandemic UM
9:53
Speaker 1: you know, somewhere between ten and of child care centers
9:57
Speaker 1: across the US permanently closed, and so there is an
10:00
Speaker 1: expectation among employers that there will continue to be a
10:04
Speaker 1: great imbalance between supply and demand, and so employers are
10:08
Speaker 1: looking to lean in and support their employees to provide
10:12
Speaker 1: better access, higher quality, and more affordable care. UH. And
10:15
Speaker 1: then on the backup side, we've seen really significant growth
10:19
Speaker 1: because again, UH, employees have really needed those extra supports
10:25
Speaker 1: as some of the supports that were generally available to
10:28
Speaker 1: them in their community have really dried up. Well. What
10:32
Speaker 1: are the kind of challenges that you face in terms
10:34
Speaker 1: of childcare and elder care? I imagine it's a business
10:39
Speaker 1: that is rife with regulation. UM. Compliance must be difficult,
10:45
Speaker 1: and UM, you know, you've got to have a certain
10:48
Speaker 1: amount of sensitivity as well for both of those UM,
10:51
Speaker 1: but for both both those demographics. Yeah, so I certainly think, um,
10:56
Speaker 1: you know that there is a strong regulation. I think
10:59
Speaker 1: there are um you know, a maniacal focused on health
11:02
Speaker 1: and safety and other things that we do, and over
11:05
Speaker 1: thirty five years have really perfected in terms of making
11:09
Speaker 1: sure that what we're delivering every day is high quality
11:12
Speaker 1: and meeting the needs of those who we serve. I
11:15
Speaker 1: would say the biggest challenge is around workforce. So there
11:19
Speaker 1: is a significant shortage of teachers, and we see that
11:23
Speaker 1: across all the geographies in which we operate, but specifically
11:26
Speaker 1: acute here in the US, where their pre COVID was
11:30
Speaker 1: a shrinking pool of talented people going into early childhood
11:34
Speaker 1: education that was exacerbated in the pandemic. And so I
11:39
Speaker 1: would say our biggest challenge is really on the workforce
11:41
Speaker 1: side in terms of attracting um, you know, talent into
11:46
Speaker 1: the field and then ultimately to bright horizons. So how
11:49
Speaker 1: difficult is it then to uphold margins because I can imagine,
11:52
Speaker 1: you know, um, teachers are going to be wanting substantial
11:55
Speaker 1: hourly salaries and parents are going to want to pay
12:02
Speaker 1: less than what dollars a month, But that that puts
12:06
Speaker 1: you in a tight spot. Yeah, no, for sure, I
12:09
Speaker 1: mean certainly. We have always looked to be at the
12:12
Speaker 1: top of the market in terms of the pay that
12:15
Speaker 1: we provide to the heroes in our classrooms are teachers, uh,
12:19
Speaker 1: and so over the last several years, we have accelerated
12:22
Speaker 1: wage increases pretty significantly. Um to quantify it, it's been
12:26
Speaker 1: more than to our teachers over the last several years
12:30
Speaker 1: and so um. Obviously, working families struggle to afford the
12:36
Speaker 1: investment in early childhood education, but the reality is is
12:39
Speaker 1: expensive to deliver, and so we have always relied upon
12:44
Speaker 1: our employer clients to help their employees to offset some
12:49
Speaker 1: of the costs of childcare. And that's really what makes
12:52
Speaker 1: our model unique, right, which is our employer clients lean
12:55
Speaker 1: in and provide subsidy so that their employees are not
13:00
Speaker 1: responsible for the full cost of childcare and the full
13:03
Speaker 1: cost of delivering that childcare, and ultimately that becomes an
13:07
Speaker 1: important benefit to them for working at companies like Bloomberg.
13:11
Speaker 1: All right, good stuff, I really appreciate you taking a time.
13:14
Speaker 1: Stephen Kramer, CEO of Bright Horizons again in New York
13:16
Speaker 1: stock has changed listed company b f A M is
13:19
Speaker 1: a symbol to type into your Bloomberg terminal there. So, uh,
13:23
Speaker 1: you're a user, Yeah, well we can. It's a great
13:27
Speaker 1: service that Bloomberg um offers. You know, the interesting thing
13:31
Speaker 1: the comparison I make is between what the system in
13:33
Speaker 1: Germany and here, right, because I just moved back. I
13:36
Speaker 1: pay more in taxes here than I did in Germany, really,
13:39
Speaker 1: but childcare was free there, so they had doublic daycarees
13:45
Speaker 1: with organic food and musicians and farm field trips over there,
13:50
Speaker 1: and here it's like two or three grand a month
13:53
Speaker 1: for the basics, right, parent contrast, not saying which one
13:58
Speaker 1: is better, but just comparing tressed all right, sp of
14:01
Speaker 1: eight tens of one percent. We'll take that on a
14:03
Speaker 1: holiday Tuesday. This this bood bern get a little bit
14:12
Speaker 1: of a deal here, and it really got my attention.
14:14
Speaker 1: So chen Or Society General is doing a deal with
14:18
Speaker 1: Alliance Bernstein. Alliance Bernstein is one of the combination of
14:21
Speaker 1: two of the best names I think in the US
14:24
Speaker 1: global finance. Jonathan Tyson's his senior analyst European banks for
14:28
Speaker 1: Bloomberg Intelligence. He's based in London. He joins us, Hey, John,
14:31
Speaker 1: you know the story that we've heard over and over
14:34
Speaker 1: and over again over the years is kind of the
14:36
Speaker 1: European banks retrenching, pulling back. I'm thinking credits Swiss Deutsche Bank.
14:41
Speaker 1: But what does suck Gen doing well? I mean, you're
14:44
Speaker 1: completely right, and sockd In has only just finished about
14:48
Speaker 1: three years of a lot of disposals there in mind,
14:50
Speaker 1: they sold their stake in the Monday to UM Credittal,
14:55
Speaker 1: they sold lix Source creditcal next to the number of businesses,
14:59
Speaker 1: but um they are pretty strong in equities and prime services,
15:04
Speaker 1: of which castext is probably not the strongest part of it.
15:07
Speaker 1: So I think they're trying to do what BMP did
15:09
Speaker 1: with x mat UM and they've picked a very good franchise.
15:12
Speaker 1: I agree with you at Alliance UM and Bernstein Research.
15:16
Speaker 1: So what does this mean? Are they going to be
15:19
Speaker 1: moving pushing to move market share higher? UM is chen
15:23
Speaker 1: making a play here? Are they an aggressive dealmaker? Now?
15:28
Speaker 1: Oh no. But basically the outgoing CEO who who leaves
15:32
Speaker 1: may have next. He has been there for fifteen years,
15:34
Speaker 1: a lot of ups and downs. The new guy coming
15:37
Speaker 1: in is ex corporate investment banking and clearly a lot
15:41
Speaker 1: of the restruction has been done. But if you look
15:44
Speaker 1: at say their equities division, they've beaten for the last
15:47
Speaker 1: six quarters and I don't think any bank's done that,
15:49
Speaker 1: so they would have pretty good franchise there. He's making
15:51
Speaker 1: his mark. He's confirming that sock Jan as the European
15:54
Speaker 1: player and a global equities player wants to play. And
15:58
Speaker 1: as I say, I think they've looked at BEMP did
16:00
Speaker 1: with nex Han over a few years, eventually buying in
16:04
Speaker 1: a year or so ago, and the strength of their
16:06
Speaker 1: franchise there, and they're trying to do the same thing.
16:08
Speaker 1: They have said. We don't think there'll be that many
16:10
Speaker 1: job cuts. There's not that much of an overlap, probably
16:13
Speaker 1: nine hundred staff in total across the two businesses. Um
16:16
Speaker 1: it's suspensible move. And in terms of how they're paying
16:19
Speaker 1: for it, I mean banks are actually profitable again, so
16:22
Speaker 1: that they're paying for it by using up some of
16:23
Speaker 1: the capital they're generating. You know what I thought was interesting.
16:26
Speaker 1: Um So soft Gen takes fift Alliance Bernstein gets the
16:31
Speaker 1: CEO position, um and they're going to be headquartered in London.
16:37
Speaker 1: Why headquartered in London? Five years ago we thought maybe
16:40
Speaker 1: that was going to shift as a as a financial hub,
16:44
Speaker 1: you know, to the continent, or maybe more business would
16:46
Speaker 1: come back here to New York. But is it still
16:48
Speaker 1: just so attractive that when you're there you can get
16:51
Speaker 1: the best talent. Well, I think it's time zones. Um.
16:55
Speaker 1: It is also language, as you say, the Bernstein research
17:00
Speaker 1: quite US heavy, very English speaking, and also the uk
17:04
Speaker 1: IS is doing everything you can with the kind of
17:06
Speaker 1: watering down post Brexit, etcetera, to make this as a
17:10
Speaker 1: nicer place to be a bank as possible. We were
17:13
Speaker 1: even looking at things like tweaking Bank Aponus as we've
17:16
Speaker 1: removed the cap so there's no reason to rush anything.
17:20
Speaker 1: And I mean this is they've got five years to
17:22
Speaker 1: buy the remaining four nine. This is a a thing that
17:24
Speaker 1: we've done in a hurry. But I think at a
17:26
Speaker 1: starting point it makes sense to me in London given
17:28
Speaker 1: the the US An American English speaking component of Burnstein. So, Jonathan,
17:36
Speaker 1: you've covered all the European banks here, this seems a
17:38
Speaker 1: little bit of, you know, out of step with some
17:40
Speaker 1: of the other ones. Does this suggest that maybe some
17:43
Speaker 1: others European banks may be looking to maybe increase through
17:47
Speaker 1: your U S exposure. Um, maybe thinking that twenty three
17:51
Speaker 1: will be a better year for the financial markets. Not
17:54
Speaker 1: at all. No, I think well, this is though, this
17:56
Speaker 1: is a bank that's come to the end of a
17:58
Speaker 1: very long and painful restructuring okay, torture bank, and it's
18:01
Speaker 1: looking at the businesses is doing well in it is profitable,
18:04
Speaker 1: it's generating capital, it's got more capital than it needs.
18:06
Speaker 1: So it's sort of building out in the franchises. Another
18:10
Speaker 1: franchise has got a l d S. You've probably never
18:12
Speaker 1: heard of it, but it's pretty much the biggest leasing
18:14
Speaker 1: company in Europe um and it's going great guns. That's
18:16
Speaker 1: another business that they are building out via acquisition. The
18:20
Speaker 1: ext franchise. They used to be very very strong and derivatives,
18:23
Speaker 1: remember the French blew up massively in one Q twenty.
18:26
Speaker 1: They've got through that. They've got revenues right back again.
18:29
Speaker 1: This unit is supposed to make about three billion next year,
18:31
Speaker 1: so that they're just sort of moving on to the
18:34
Speaker 1: next CEO and consolidating in the businesses that they're good at.
18:39
Speaker 1: When when you talk to your institutional investor clients these days,
18:43
Speaker 1: what is there kind of outlook for kind of European
18:47
Speaker 1: and UK banks? Well, I mean the thing is we've
18:51
Speaker 1: been waiting for ten years for revenue to start going up.
18:53
Speaker 1: They started going up. Rates went up that interesting and
18:56
Speaker 1: went up. Then Ukraine invason happened. It's has begun to
19:01
Speaker 1: look through it. But the fact is we can see
19:02
Speaker 1: the peak of the rate cycle now. So they're now
19:04
Speaker 1: worrying about the downturn and quite how badly bad debt
19:08
Speaker 1: is going to impact the banks. And we have an
19:10
Speaker 1: accounting standard that's reasonably new and pretty untried and untested.
19:14
Speaker 1: So they're a little bit skeptical, world more bullish, were
19:17
Speaker 1: comfortable that the banks will weather this and actually report
19:19
Speaker 1: double digit r o e s, which if you've looked
19:22
Speaker 1: at European banks for the last ten of fifteen years,
19:24
Speaker 1: you can't even remember the last time you saw that
19:27
Speaker 1: and did thirty seconds Jonathan. Brexit Did it kill the
19:31
Speaker 1: city of London? Do you think? Or it's just a
19:33
Speaker 1: minor blip. It hasn't helped um And hopefully the new
19:38
Speaker 1: government is going to stop kind of the UK and
19:41
Speaker 1: the ECB being at war about things like euroclearing and derivatives,
19:47
Speaker 1: so hopefully the hospitalities will cease or the least softened.
19:50
Speaker 1: But no, it didn't, it didn't help all right, good stuff,
19:53
Speaker 1: Jonathan Tyce. He covers all the European and UK banks
19:56
Speaker 1: for Bloomberg Intelligence. He's been doing it for decades. One
19:58
Speaker 1: of the best in the city of London, so he's
20:02
Speaker 1: seen it all. But I mean he gets some masters
20:04
Speaker 1: in classics, literature and linguistics from I don't Oxford Cambridge
20:09
Speaker 1: one of those super duper banker major and then you
20:13
Speaker 1: got classics and then you go to financial services. I
20:16
Speaker 1: just don't get it. But he is a really really
20:19
Speaker 1: good banks I would get some massive I would guess
20:21
Speaker 1: a double digit percentage of successful bankers majored in classics classics.
20:25
Speaker 1: All right, I'll take your word for they love it.
20:27
Speaker 1: That's why I always hedge funds have like Greek god names.
20:33
Speaker 1: Let's talk energy here. Yesterday, as John was just mentioning
20:36
Speaker 1: today we got w t I crude oil eight cents.
20:38
Speaker 1: We had a seven handle yesterday which got my attention.
20:42
Speaker 1: Got gasoline prices unleaded regular. Yeah that I'm going to
20:49
Speaker 1: tell you that's not good for your engine. Yeah that's
20:52
Speaker 1: your car was engineered to tank ninety one octane. Alright,
20:55
Speaker 1: so it's cheaper. Yeah, I know the long run, it's
21:00
Speaker 1: not Do you love your car question? Yes you do?
21:04
Speaker 1: And will you be able to replace it. No, MW
21:07
Speaker 1: does not make those anymore. Right, I'll take better care
21:08
Speaker 1: of it. But diesel is the issue here, and I
21:11
Speaker 1: want to talk to much more important fuel for the
21:14
Speaker 1: global economy. Exactly right, Scott Levin, senior Energy and industrial
21:17
Speaker 1: analysts for Bloomberg Intelligence Joints us Hey. Scott talked to
21:20
Speaker 1: us about diesel. I mean, I don't put it in
21:23
Speaker 1: my car. I don't like the sound diesel engines make.
21:26
Speaker 1: But it's big, it's great, it's a great sound. Talk
21:29
Speaker 1: to us about diesel UH fuel Scott House concerns should
21:32
Speaker 1: we be Yeah, you have kind of a unique phenomenon
21:36
Speaker 1: going on with right now. And if you look at
21:39
Speaker 1: your local gas station, you'll see a gap of close
21:44
Speaker 1: to two dollars gallon in some places between diesel and gasoline.
21:48
Speaker 1: And that's abnormally large, obviously, and the primary reason for that,
21:53
Speaker 1: I think is unusually low inventories of diesel weren't less
21:58
Speaker 1: than half of or we typically are this time of year.
22:02
Speaker 1: UH for diesel fuel, and diesel fuel is much more
22:05
Speaker 1: commonly used to fuel trucks and the industrial economy at large.
22:10
Speaker 1: Is also used in the Northeast as a source of
22:14
Speaker 1: heating oil. And so it's that uh, that phenomenon with
22:19
Speaker 1: inventories and getting additional supply to the Northeast in particular
22:25
Speaker 1: that is coming up the works and driving a spike
22:28
Speaker 1: in diesel prices and causing some concern uh coming into
22:32
Speaker 1: the winter months where you know, you could have harshal
22:34
Speaker 1: weather and some very uncomfortable people unless we get some
22:38
Speaker 1: additional supply cooking well. And in other countries, diesel is
22:42
Speaker 1: very common as personal transport fuel. You know, UM, a
22:46
Speaker 1: lot of people drive diesel engine cars in Europe. That's
22:51
Speaker 1: not really the case in the US. UM. And I
22:55
Speaker 1: guess it doesn't matter as much because Europe has public transportation.
22:58
Speaker 1: But how how hardcore is the knock on effect going
23:02
Speaker 1: to be in terms of shipping costs? You know, we
23:05
Speaker 1: we see shipping costs coming down broadly, but if diesel
23:09
Speaker 1: is short, I can imagine UM truckers and you know,
23:14
Speaker 1: UM boat vessel operators are gonna have to raise prices. Yeah.
23:19
Speaker 1: It's gonna definitely provide an underlying support, uh for for
23:23
Speaker 1: the transportation industry at large. Uh, more so in Europe,
23:27
Speaker 1: as you point out, than in the US. But in
23:29
Speaker 1: both places, uh, And there's a somewhat regional phenomenon here
23:33
Speaker 1: in that Europe is going through its own um energy
23:36
Speaker 1: supply crunches, you know, uh, knock on effect of the
23:41
Speaker 1: Russian invasion in Ukraine, and so they've been trying to
23:46
Speaker 1: resolve their own uh crunch uh in terms of diesel
23:51
Speaker 1: natural gas, which can also be used as sources of
23:54
Speaker 1: heating fuel over there. So whereas that's potentially or in
23:58
Speaker 1: the past has been a source of supply and could
24:02
Speaker 1: be used to alleviate some of the pressure that we're
24:04
Speaker 1: seeing in the US northeast this year, that is not
24:07
Speaker 1: the case clearly this year as uh. You know, the
24:09
Speaker 1: European countries in general have been building up inventories uh
24:14
Speaker 1: in advance of a supply crunch for this winter, so
24:18
Speaker 1: you know, a knock on effect there. But yes, this
24:20
Speaker 1: certainly underpins higher pricing for the transportation sector in general
24:27
Speaker 1: and maybe helps them overcome some of the cost pressure
24:29
Speaker 1: that they're seeing on the labor side. Hey, Scott, you know,
24:31
Speaker 1: whenever I hear about energy shortages, whether it's diesel or not,
24:36
Speaker 1: gas or gasoline, my first response is just crank up
24:40
Speaker 1: the refineries. What's the big deal? Go down to Texas
24:42
Speaker 1: and Louisiana and get those things going. But that's not
24:45
Speaker 1: the case. Is it tells what the refining situation is
24:47
Speaker 1: in this country. Yeah, you know, unfortunately, in this instance,
24:53
Speaker 1: with diesel being the issue, us refining is much more
24:58
Speaker 1: geared toward gasoline than diesel. I think you get to
25:02
Speaker 1: uh gallons out of every barrel for every gallon of
25:06
Speaker 1: diesel that you produce here, So the uh, the cracks
25:10
Speaker 1: are are skewed more towards gasoline than diesel inherently in
25:15
Speaker 1: this country. And from a gasoline standpoint, yeah, we're higher,
25:19
Speaker 1: certainly higher than then we'd like to see, you know,
25:22
Speaker 1: at four dollars a gallon or there about, but uh,
25:26
Speaker 1: not abnormally high, certainly nothing like we're seeing in the
25:29
Speaker 1: diesel market right now. And uh, you know that's kind
25:34
Speaker 1: of consistent with eighty dollar crude or thereabouts. And so
25:39
Speaker 1: we have not seen much of a push to increase
25:41
Speaker 1: refining capacity within the country. If anything, what we need
25:45
Speaker 1: to do is make it easier to get from one
25:47
Speaker 1: place to another from the existing refineries that we have,
25:50
Speaker 1: and it's typically the Gulf coast that serves the majority
25:52
Speaker 1: of the Eastern seaboard, So make it easier. How do
25:55
Speaker 1: you mean, like more pipelines or more ships? How do
25:59
Speaker 1: you make it these year to transport? Yeah, so we'll
26:01
Speaker 1: start with the pipelines. Pipelines is an obvious way, and
26:05
Speaker 1: we have an administration obviously that is ah against pipeline construction, uh,
26:11
Speaker 1: particularly as it relates to hydrocarbons, and so Mountain Valley
26:14
Speaker 1: Pipeline is still on hold. That's one of the big
26:16
Speaker 1: conduits along the Eastern Seaboard that has been on hold
26:20
Speaker 1: pending resolution of environmental permits. And then you know, if
26:24
Speaker 1: we were to look at shipping, uh, it's the Jones Act.
26:27
Speaker 1: The Jones Act requires uh, you know, the ships that
26:30
Speaker 1: carry crewed uh with the area to be h on
26:34
Speaker 1: US flag ships and there are a significant limitations there.
26:38
Speaker 1: So you have transportation bottlenecks that are really making the
26:41
Speaker 1: situation more Yeah. I think we need somebody needs to
26:43
Speaker 1: look at that Jones Act. I keep hearing about that
26:45
Speaker 1: all the time. And when we think about not having
26:47
Speaker 1: fuel in the Northeast, what's up with that? So anyway,
26:50
Speaker 1: Scott Levine, senior Energy and Industrial analysts for Bloomberg Intelligence.
26:58
Speaker 1: Markets moving higher today, lower volant, but move on. Higer
27:01
Speaker 1: we'll take the green on the screen. Let's check in
27:03
Speaker 1: on what we should be doing in these markets. Tom Mantion,
27:07
Speaker 1: he is a managing director at UBS Private Wealth Management. Hey, Tom,
27:10
Speaker 1: you know, we're thanks so much for joining us here.
27:12
Speaker 1: We're you know, we're ten percent or so off the
27:13
Speaker 1: bottom here in s What are you telling your clients
27:17
Speaker 1: these days? You know what I think the next three
27:20
Speaker 1: to six months do you have to still understand that
27:22
Speaker 1: we're going to remain volatible. We're gonna watch every fat
27:27
Speaker 1: governor speak. We're gonna listen to what they say. We're
27:30
Speaker 1: gonna parse every single word and look for clues as
27:33
Speaker 1: to win. The set is going to stop. But at
27:37
Speaker 1: the you know, I think the heavy lifting is behind us, right,
27:42
Speaker 1: So I think next three to six months be defensive.
27:46
Speaker 1: Look for value. I think Staples, healthcare, energy, defense, infrastructure,
27:52
Speaker 1: income plays. But but somewhere in you've got to think inflection. Right,
27:58
Speaker 1: things are going to change. By the way, as on
28:00
Speaker 1: the side, don't you wish fewer of them would speak?
28:03
Speaker 1: I mean, you've been in this industry, You've been at
28:05
Speaker 1: UBS for like twenty years. You were Mother Meryl before
28:08
Speaker 1: that for ten um. It didn't always used to be
28:12
Speaker 1: like this, Every single FED speaker offers a different opinion,
28:17
Speaker 1: moving the markets each time. Yeah, it can't be good,
28:22
Speaker 1: you know, I don't don't forget. We used to watch
28:24
Speaker 1: the briefcase. Remember Alan Greenspan had his briefcase and whether
28:29
Speaker 1: it was thick or sin you know, So a little
28:32
Speaker 1: bit of this has been almost my entire thirty year career.
28:37
Speaker 1: It never ceases to amaze me, how how one word
28:42
Speaker 1: can move a market, you know, three in either direction.
28:47
Speaker 1: I think the longer term investors here can find opportunities
28:53
Speaker 1: in those moments. So do you have do you have
28:55
Speaker 1: clients who say, like Tom, enough of this macro crap, like,
28:59
Speaker 1: give me some of them up research. It seems like
29:02
Speaker 1: no one cares about companies. Well, you know, and I
29:05
Speaker 1: think this is definitely two has completely shown you that
29:09
Speaker 1: earnings matter, right, And I think we've seen that in
29:13
Speaker 1: the last few weeks where stocks that didn't have a
29:17
Speaker 1: good things to say, didn't do a good job, have
29:20
Speaker 1: been punished severely by this market. And then stocks that
29:24
Speaker 1: that have done well and have navigated what has been
29:27
Speaker 1: a very difficult year from an interest rate and inflation perspective,
29:31
Speaker 1: certainly with supply chains those companies that have done well
29:34
Speaker 1: have been rewarded. So there are there are names on
29:37
Speaker 1: the board that are up this year and up significantly.
29:39
Speaker 1: And I think being positioned the right way has helped.
29:45
Speaker 1: But you know, you're not going to get it right
29:46
Speaker 1: every single time. But I do agree with you. I
29:48
Speaker 1: think I think thinking macro is helpful, but you need
29:52
Speaker 1: to bring it back down a reality every once in
29:54
Speaker 1: a while. And Tom, you mentioned financials is a sector
29:57
Speaker 1: you like. I mean, do I want to own kind
29:59
Speaker 1: of the big money center global banks, the JP Morgans cities,
30:02
Speaker 1: or do I want to go maybe regional banks who
30:04
Speaker 1: may benefit more from a you know, you know, an
30:07
Speaker 1: economic kind of reopening as we get through whatever recession
30:10
Speaker 1: we're gonna have in twenty three. Yeah, I love that,
30:14
Speaker 1: you know, whatever recession we're gonna have in three I
30:17
Speaker 1: think people have been talking about recession now for it
30:19
Speaker 1: seems like a year and a half um and it
30:22
Speaker 1: hasn't it hasn't yet occurred. I think you need to
30:25
Speaker 1: own both. I think the I think the big money
30:27
Speaker 1: centers have have hail winds here. I think the regionals
30:32
Speaker 1: also have tail winds. Obviously, I think that there's some
30:36
Speaker 1: some regional risk to certain industries UH that that that
30:40
Speaker 1: may or may not do well in a in a
30:43
Speaker 1: recession in three given the type of recession that we're
30:46
Speaker 1: having UH or or may have. You know, nothing is
30:51
Speaker 1: a fed up complete But I like I like both
30:54
Speaker 1: sectors here. I also think staples in healthcare and and
30:58
Speaker 1: obviously we've seen some some positive and negative earnings reports
31:01
Speaker 1: in the healthcare sector. So you need to be really
31:03
Speaker 1: smart about what you want to own UH and why.
31:06
Speaker 1: But I do think there are some at least for
31:08
Speaker 1: the next three to six or nine months, some some
31:11
Speaker 1: some places I hate to use the word hide, but
31:15
Speaker 1: some places to be defensive. If people want to be
31:17
Speaker 1: If investors want to put more risk on the table,
31:20
Speaker 1: what do you think about going outside of the US?
31:22
Speaker 1: I mean, I'm assuming most of your clients are here
31:24
Speaker 1: in America. UM, but with the dollar it had climbed
31:27
Speaker 1: to such amazing heights. I mean, what an opportunity to
31:30
Speaker 1: you to invest elsewhere. Certainly you can look to a pack,
31:36
Speaker 1: you can look to Europe. But if you're worried about
31:39
Speaker 1: the US being in a recession in three, I think
31:42
Speaker 1: you've got to be much more concerned about what's happening
31:45
Speaker 1: in Europe. I think the geopolitics on the in the
31:47
Speaker 1: European continent or are significantly more dangerous than that than
31:52
Speaker 1: they are domestically here in the U. S. So, uh,
31:55
Speaker 1: they obviously have a significant energy crisis that's going to
31:58
Speaker 1: take some take a while to work out, and and
32:02
Speaker 1: that is that is uh, you know, if we can
32:06
Speaker 1: control inflation here with the said to be much more
32:08
Speaker 1: difficult for the ECB to control inflation with with energy
32:14
Speaker 1: costs not being impacted by the economic situation, but but
32:20
Speaker 1: outside factors. Alright, Tom, good stuff, appreciate you're checking in
32:24
Speaker 1: with us. Tom Menteon, he's managing director UBS, a Wealth
32:28
Speaker 1: of Management. He's up in Stanford, Connecticut. I think about
32:31
Speaker 1: a huge operation up there in Stanford, huge trading floor there. Yeah,
32:34
Speaker 1: I'm not en sure if they still use it. Also,
32:36
Speaker 1: our second Fairfield grad in the same number of days,
32:39
Speaker 1: is that right? Alright? But then he went to Wharton
32:42
Speaker 1: instead of Duke. Yeah, Well, what what are you gonna do?
32:45
Speaker 1: What do you call it? The Fuqua School, the Fuqua
32:47
Speaker 1: School of Business, Fuqua, Yeah, JB. Fuqua, one of the
32:50
Speaker 1: first um kind of like consolidator kind of guys. He
32:54
Speaker 1: was a. You think some of those big companies back
32:57
Speaker 1: in the sixth seas and seventies that owned multiple businesses.
33:00
Speaker 1: I feel like off the tongue a little bit easier.
33:02
Speaker 1: It does, it does so, but we'll see. Well, the
33:08
Speaker 1: United Nations COP seven conference just finished up a few
33:12
Speaker 1: days ago. It was a two week conference where leaders
33:15
Speaker 1: small over the world got together to talk about climate
33:18
Speaker 1: and sustainability and all that good stuff. And Bloomberg Intelligence
33:22
Speaker 1: send our expert over their Shaheen contractor. She has an
33:24
Speaker 1: E S G research analyst at Bloomberg Intelligence. She joins
33:27
Speaker 1: us live in our Bloomberg Interactive Broker studio because she
33:30
Speaker 1: doesn't phone it in. She comes to the office, which
33:32
Speaker 1: she gets a gold star for UM. So she's triple
33:37
Speaker 1: triple mint, as Tom Keane would say. So Sheen, what
33:39
Speaker 1: are some of the takeaways that you had from the
33:42
Speaker 1: COPY seven conference. So, first, full thank you for the
33:45
Speaker 1: good stuff. But the COP conference was it was, at
33:50
Speaker 1: least being my first time that it was amazing. I
33:53
Speaker 1: think it's two weeks. You know, when people descended about
33:56
Speaker 1: one thing. Mikey bakeaways were first, you know. On the ground,
34:01
Speaker 1: the most divided topic was around carbon markets. The companies
34:05
Speaker 1: using offsets to basically offset their own emissions. That was
34:08
Speaker 1: the most divided topic. The other frustration was this gap
34:14
Speaker 1: we had and I mentioned this before, around companies carbon
34:16
Speaker 1: reduction goals and no real plan to do that on
34:20
Speaker 1: the ground. As we progressed towards the end, many many
34:24
Speaker 1: people called it a disappointing cop mainly because of the
34:27
Speaker 1: mitigation aspect. We didn't build on emission reductions that we
34:31
Speaker 1: already established last year in Glasgow. Why what what? Why
34:34
Speaker 1: didn't we get there? And are we sticking at least
34:38
Speaker 1: to the commitments we made in Glasgow? Apparently there was
34:41
Speaker 1: a fight to stick to that. A lot of the
34:44
Speaker 1: things were debated that we had already established in Glasgow,
34:47
Speaker 1: which I thought was interesting. This year, what's being said
34:52
Speaker 1: is there was a lot of sort of roadblocking from
34:56
Speaker 1: a lot of the oil rich countries like Saudi Arabia
34:58
Speaker 1: to actually push things of the finish line. That was
35:01
Speaker 1: the main roadblock this year. So but in the end
35:05
Speaker 1: there was some kind of communic a right, So in
35:09
Speaker 1: the end were we able to save CAP twenty six
35:12
Speaker 1: at cap we were able to maintain it, I believe,
35:16
Speaker 1: I mean the way we went beyond that is the
35:18
Speaker 1: is the establishment of this loss and Damage Fund, which
35:21
Speaker 1: was really groundbreaking. It's basically the more developed countries creating
35:25
Speaker 1: a fund and paying some of the more less developing
35:28
Speaker 1: countries for the for the adaptation of climate and mitigation.
35:32
Speaker 1: That was the main thing that came out. That's more.
35:35
Speaker 1: That's less on the emission reductions, right, it's about money. China.
35:38
Speaker 1: Is China involved in CUP twenty seven? Are they? Are
35:42
Speaker 1: they constructive? Are they supportive? What are they? They sort
35:45
Speaker 1: of I think they sort of laid low this one
35:48
Speaker 1: and Cup compared to last year, where they came out
35:51
Speaker 1: with a little more fanfare. This year was a lot
35:54
Speaker 1: more about the Middle East. Okay, so what's the Where
35:59
Speaker 1: do we go next year? By the way, it next
36:00
Speaker 1: year is Dubai Dubai Okay. They don't come to Detroit
36:04
Speaker 1: or Cleveland, do they? I don't. I don't know, but
36:07
Speaker 1: that would be great. Columbus could host. Columbus could but Detroit.
36:11
Speaker 1: As you know, I am an avowed fan of the
36:15
Speaker 1: Ohio State University, but I love Detroit. It's such a
36:19
Speaker 1: great city gearhead um and for conferences as well. It's
36:22
Speaker 1: really ideal UM in terms of the big cops. I
36:26
Speaker 1: feel like Glasgow got a lot of attention and charmel
36:30
Speaker 1: shake not so much. Why is that? I think a
36:34
Speaker 1: lot more was achieved in Glasgow in terms of actual
36:38
Speaker 1: mitigation of emissions. Paris was obviously the biggest. I think
36:43
Speaker 1: that's when you know the country has decided to put
36:46
Speaker 1: nationally determined contributions, ago is it around their emissions um
36:50
Speaker 1: This one sort of built off that, but the biggest
36:53
Speaker 1: one was this loss, this loss and damage fund for sure.
36:56
Speaker 1: So what is the role of the United States in
36:59
Speaker 1: these efforts year to year to year? So it's it's
37:03
Speaker 1: an effort of all the countries right to the Conference
37:05
Speaker 1: of parties. They come in and they negotiate basically, and
37:08
Speaker 1: the end goal every country has to agree on it.
37:11
Speaker 1: And that's really the big challenge. You come in knowing
37:14
Speaker 1: what your country wants, but you don't know what the
37:16
Speaker 1: other one wants. That's really a negotiation between everyone. So
37:20
Speaker 1: the idea this year, the groundbreaking move is that the
37:23
Speaker 1: rich countries who have benefited from, you know, destroying the
37:28
Speaker 1: environment are going to pay the developing nations who have
37:32
Speaker 1: been hurt. Is that the idea, Yes, they established a
37:35
Speaker 1: fund which is and this is the first time that
37:37
Speaker 1: agenda came on too. Sort of discussions. They established a fund.
37:41
Speaker 1: Now the workings of the fund, how much food bay
37:44
Speaker 1: is all that will be established over the next hill
37:47
Speaker 1: before we head into the by That's that's what I
37:50
Speaker 1: understand so far. Okay, So what what was some of
37:56
Speaker 1: the more optimistic expectations going in to top twenty seven
37:59
Speaker 1: that maybe we're not fulfilled? Well, the biggest expectation is,
38:04
Speaker 1: you know, continued emission reductions. We all see these reports
38:07
Speaker 1: about us being you know, far off what we really
38:10
Speaker 1: need to be in terms of temperature alignment. The expectation
38:14
Speaker 1: as we build more of those goals, more countries update
38:18
Speaker 1: their goals to meet sort of the baddest baras aligned
38:21
Speaker 1: um sort of temperature benchmark. And that didn't happen. So
38:25
Speaker 1: what are the takeaways for investors? What do you bring
38:28
Speaker 1: back to Bloomberg intelligence that's actionable. So the biggest takeaway
38:33
Speaker 1: from me is primarily around these again these companies carbon
38:36
Speaker 1: reduction goes. What do they actually mean for a company's investment?
38:39
Speaker 1: So what the UK did is actually interesting. During cop
38:43
Speaker 1: they announced that they have this new plan. If a
38:44
Speaker 1: company has a goal, they actually have to have a
38:47
Speaker 1: plan to meet it, and there's a lot we can
38:49
Speaker 1: do with that. We can establish, you know, is it
38:51
Speaker 1: and PB positive, Is it and P be negative given
38:53
Speaker 1: different carbon prices, given different scenarios. And I think that's
38:57
Speaker 1: the biggest question we have today. And that kind of
39:02
Speaker 1: discourages greenwashing because that means the company can't just come
39:06
Speaker 1: out and say, hey, we're gonna be carbon and but
39:09
Speaker 1: they have no idea how exactly. And we need that
39:12
Speaker 1: to domin financial impact, like we've done this great example
39:16
Speaker 1: of S S A B where we find that the
39:18
Speaker 1: carbon goal is MPV positive only in a high steel price,
39:21
Speaker 1: high carbon price environment and otherwise it's not. So we
39:24
Speaker 1: need insights like that that's actionable. What are the incentives
39:28
Speaker 1: for US companies to go green? So well? The Inflation
39:32
Speaker 1: Reduction Act that we we saw recently puts a lot
39:35
Speaker 1: of subsidies, puts a lot of tax breaks onto you know,
39:38
Speaker 1: clean energy, onto renewable fuels. Um that would be the
39:43
Speaker 1: biggest sort of incentive. I think over the long term,
39:46
Speaker 1: if you imagine some kind of carbon price and regulation
39:49
Speaker 1: that comes in, it is cost positive. It is efficient
39:52
Speaker 1: to have these things in place for your bottom line.
39:55
Speaker 1: Mr I don't. I don't know if investors are buying it.
39:58
Speaker 1: I mean, that's still a lot of skepticism out there,
40:00
Speaker 1: that is in the US and YopE. I think where
40:02
Speaker 1: you have a more study regulator mechanism by the EU
40:06
Speaker 1: emission training scheme, you do see a cost. It's a
40:09
Speaker 1: very substantial cost to company. We're skeptical. The thing is,
40:11
Speaker 1: Paul and I are skeptically. I know, I know that before,
40:15
Speaker 1: but we love having you on the show exactly. So
40:18
Speaker 1: that's why we're like, hey, Shaheen, convince us, but we're
40:22
Speaker 1: neither one to do it. All right, she can contracted
40:24
Speaker 1: great stuff E s G. Research channels for Bloomberg Intelligence
40:26
Speaker 1: back from Egypt, the Top twenties seven conference there and
40:30
Speaker 1: again they're always needs pretty cool locales. Thanks for listening
40:37
Speaker 1: to the Bloomberg Markets podcast. You can subscribe and listen
40:41
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40:45
Speaker 1: I'm Matt Miller. I'm on Twitter at Matt Miller three.
40:50
Speaker 1: Pet On Ball Sweeney I'm on Twitter at pt Sweeney.
40:52
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