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Investing, ETFs, And The Economy · Bloomberg Intelligence

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Speaker 1: Geopolitics blot Today, let's step back. Every business day we
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Speaker 1: bring new interviews from CEO market crows, Bloomberg experts, along
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Speaker 1: with essential market moves news bloom Market podcast or wherever
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Speaker 1: podcast dot com or slash Podcast. Capital Management located in
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Speaker 1: some third rate hamlet called Chapel Hill, North Carolina. I mean,
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Speaker 1: I guess you couldn't find any office space in. Mark
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Speaker 1: Paul's a duke guy in Durham, North Carolina. But we'll
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Speaker 1: check in with Mark anyway. Mark, what are you telling
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Speaker 1: your clients here as they kind of raise all some
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Speaker 1: of these you know, these bricks in this wall of
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Speaker 1: worry here. No, it's a great, great point. And uh,
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Speaker 1: you know, congrats to the boys at University of New
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Speaker 1: Jersey at Durham down the road. Very good. Um, But look,
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Speaker 1: we we are cautious in the current environment. You know,
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Speaker 1: we were living in a world of financial repression. As
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Speaker 1: to me is the biggest problem. Savers are just being
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Speaker 1: punished with these low interest rates. And although the Feds
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Speaker 1: making noises about raising I actually don't think they can.
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Speaker 1: So that'll cause that'll take one of the stressors away
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Speaker 1: when they finally do what I'll call the Powell pivot
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Speaker 1: and he finally admits that he really can't raise rates.
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Speaker 1: You you mentioned that economic growth is slowing very dramatically.
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Speaker 1: We're just gonna see negative growth in Europe in the
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Speaker 1: first quarter, could possibly see little zero growth in the US.
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Speaker 1: And then corporate profits are rolling over, Earnings estimates are
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Speaker 1: being slashed, so we feel that you should be hedged
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Speaker 1: with a capital duh, and hedge funds are are likely
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Speaker 1: to have a much better year this year than they
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Speaker 1: did last year. We still do like one area, which
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Speaker 1: is oil. We think energy is an interesting place to be.
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Speaker 1: Things like MLPs good place to hide. They're just very,
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Speaker 1: very cheap. Because even if everybody wants an e v
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Speaker 1: it will take a third years to everyone to have
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Speaker 1: an EVY. So it's going to take a while before
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Speaker 1: oil is not necessary wants one. That what's true, that's
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Speaker 1: that's the only thing that you know, some of us
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Speaker 1: have range anxiety, right, we like to travel long distances. Um.
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Speaker 1: But but then I think the last thing we're telling
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Speaker 1: people is, uh, don't really stress too much about the
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Speaker 1: noise of geopolitics, really focus on the signal, and um,
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Speaker 1: you know, we think there's lower risk of some big event,
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Speaker 1: and then I think many in the DC area would
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Speaker 1: have us believe but um, you know, we're we're cautious,
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Speaker 1: but but not completely out of markets. So why do
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Speaker 1: you think we've seen such an outperformance of you know,
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Speaker 1: we were just graphing oil. Um, since the pandemic against
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Speaker 1: the producers and the underlying commodity has done so much better.
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Speaker 1: It's great, great, great point. And I think that the challenges,
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Speaker 1: particularly the US, we had a lot of producers that
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Speaker 1: were over levered and a whole bunch of them went
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Speaker 1: out of business, So that clearly impacts the indices that
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Speaker 1: that you know, the broad baskets of those producers. There
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Speaker 1: are some individual companies, you know, my favorite, Diamondback Energy.
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Speaker 1: I would say Fang has outperformed Fang, Facebook, Amazon, Netflix,
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Speaker 1: Google over the past year. Again this year, we think
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Speaker 1: it all out performed for a while. Uh. And then
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Speaker 1: there's a other company like ovent Iv and Marathon Oxy
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Speaker 1: which have done really really well, outperformed oil. But you're right,
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Speaker 1: the basket has underperformed because there's just a lot of
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Speaker 1: companies that uh, this across all industries. You know, we
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Speaker 1: we extended credit to not so credit worthy businesses. UM.
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Speaker 1: I say we, I mean the economy, and some of
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Speaker 1: those went out of business. I guess in in the
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Speaker 1: lockdowns after the pandemic, and it's it's really been tough.
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Speaker 1: And I think one of the reasons oil prices surged
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Speaker 1: so much is so much supply came offline. So mark
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Speaker 1: in the fixed income space, do you guys see opportunities there? Again?
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Speaker 1: We have a federal reserve that is clearly signaled a
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Speaker 1: rising interest rates and if you look at the w
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Speaker 1: I r P function on the Bloomberg terminal, could be
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Speaker 1: as many seven hikes. How do you think about that
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Speaker 1: as a rates to fixed income opportunities? Yeah, I'm gonna
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Speaker 1: take the under. I'm gonna take the way under on that.
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Speaker 1: I don't think there'll be anywhere close to seven. I
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Speaker 1: don't even think there'll be, you know, three or four.
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Speaker 1: I think they probably will try to hike here in March.
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Speaker 1: I think they'll probably wimp out and not do fifty
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Speaker 1: basis points. Um. You know, the challenges have been behind
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Speaker 1: the curve since two thousand, uh for a hundred and
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Speaker 1: something years, the average short term rate roughly equal nominal
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Speaker 1: GDP growth, and you know that hasn't been true for
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Speaker 1: a years, and I think they should get back to
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Speaker 1: a normal functioning interest rate environment. Uh, because that's what
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Speaker 1: capitalism is predicated on. That you know, you can put
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Speaker 1: your capital at work and get and get paid for it.
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Speaker 1: Think about being in Europe or Japan, you have to
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Speaker 1: pay banks to keep your money. At least here you
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Speaker 1: get zero point five. That's why we actually came up
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Speaker 1: with this thing csh new e t F that takes
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Speaker 1: advantage of spack arbitrage to give people something, you know,
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Speaker 1: we think low single digits on their their savings because
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Speaker 1: we think traditional bonds, high yield bonds aren't very high.
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Speaker 1: Taking credit risk, you're taking duration risks, both of which
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Speaker 1: look kind of dicey in this market. So having at
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Speaker 1: least something on your your savings leaving makes a lot
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Speaker 1: of sense. All right, Mark, thank you so much. We
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Speaker 1: appreciate checking in with you. Mark. Yes goo uh. He
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Speaker 1: is with CEO, c I O and founder Morgan Creek
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Speaker 1: Capital Management based in Chapel Hill, North Carolina, which is
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Speaker 1: actually a very very beautiful community there despite the University
6:08
Speaker 1: of North Carolina, and you want to see such a
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Speaker 1: great school and they have such a great basketball history. Yeah,
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Speaker 1: just not quite as great as their friends down route
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Speaker 1: fifteen five oh one at the Duke University. But yeah,
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Speaker 1: we all respect the UNC Chapel Hill there. You're good,
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Speaker 1: good hoops and we love playing against them. This Federal
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Speaker 1: Reserve is gonna be looking clearly at some of the
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Speaker 1: economic data coming up, and we want to check in
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Speaker 1: with Michael McKee covers all things economics for us here, Michael,
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Speaker 1: as you think about this Federal Reserve, we're talking about
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Speaker 1: hiking rates. W I r P is saying seven rate
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Speaker 1: hikes this year. What do you think the Federal Reserve
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Speaker 1: is really looking at in terms of data? Can I
6:54
Speaker 1: also say the word function looks better than ever you
6:57
Speaker 1: I know, we're on radio see it. But it's so
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Speaker 1: improved to the old word function, So I highly recommend
7:05
Speaker 1: people check it out. The thing that's interesting is that
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Speaker 1: we consider one rate hike to be twenty five basis points.
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Speaker 1: That always is that just the standard rate hike measurement. Well,
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Speaker 1: it became that under Alan Greenspan the years before they
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Speaker 1: used to announce what was going on, they would raise
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Speaker 1: it by all kinds of numbers, fifteen or ten or
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Speaker 1: thirty five, whatever they thought was necessary, particularly in the
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Speaker 1: Vulcar years when they were doing UH monetary aggregates as
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Speaker 1: a guide, so they were trying to figure out how
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Speaker 1: much money they'd be creating. But um, at this point
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Speaker 1: the Fed is UH looking at to answer your question,
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Speaker 1: inflation and unemployment. Unemployment, they noted in the Minutes yesterday
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Speaker 1: had pretty much gotten to where they wanted it to be.
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Speaker 1: It's inflation they're worried about. So the Fed is at
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Speaker 1: this point planning on moving in March. By the way,
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Speaker 1: has an employment changed that much or did they just
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Speaker 1: start to get worried enough about inflation that they felt
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Speaker 1: like it was we changed a huge amount. I mean,
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Speaker 1: it's it's already down basically to almost where it was
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Speaker 1: before the pandemic. We were at three point five, three
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Speaker 1: point six, and now we're at three, while we're at four,
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Speaker 1: but we were at three point nine. As more people
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Speaker 1: come back, so pretty much at full employment, we're not
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Speaker 1: going to get the same statistics that we got before
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Speaker 1: the pandemic because people have not come back into the
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Speaker 1: labor force, so that great resignation start. Yeah, well, we're
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Speaker 1: all working, so I don't I don't see any of it.
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Speaker 1: But but you're right, man, it's basis points become the standard.
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Speaker 1: And now they don't even do it by basis points.
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Speaker 1: They're doing it by range of now and then it
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Speaker 1: will be fifty. And what the market is doing, and
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Speaker 1: this is your w I. R. P. Lesson is looking
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Speaker 1: at what the effective FED funds rate is likely to be,
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Speaker 1: which is right now around seven basis points. So if
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Speaker 1: you look at the next move and you see that
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Speaker 1: the implied rate is thirty two basis points, then that's
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Speaker 1: a basis point move. So uh, it's it's a little complicated,
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Speaker 1: but once you get used to it, YouTube like it.
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Speaker 1: You know, in terms of that um uh measured policy
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Speaker 1: behavior and the transparency that the Fed wants to I mean,
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Speaker 1: are we gonna stick with that throughout the pal Fed?
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Speaker 1: Will we ever get back to them saying, you know what,
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Speaker 1: let's have an emergency meeting and you know what, we'll
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Speaker 1: raise my fifty basis points now at five, Well, they've
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Speaker 1: had emergency meetings. They had an emergency meeting, But they
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Speaker 1: can only do an emergency meeting to cuts, right, because
9:39
Speaker 1: the cold do an emergency meeting to raise if they
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Speaker 1: felt it was necessary. It's it's hard to do because
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Speaker 1: I doubt you're legally they can do it, but you're right,
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Speaker 1: it's it would be a shock to markets. Uh. And
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Speaker 1: it was pretty obvious when we hit the pandemic and
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Speaker 1: market seized up and weren't working that they had to
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Speaker 1: cut rate. So the meeting, the emergency meeting they held
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Speaker 1: was not a bad thing. But do you know he
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Speaker 1: was saying this yesterday? Actually I was struggling to remember
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Speaker 1: because I'm getting it was Daniel D. Martino booth Um,
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Speaker 1: And to be fair, her book was titled fed Up,
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Speaker 1: so you can tell where she's coming from. But she
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Speaker 1: was saying yesterday, you know, this isn't cool because the
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Speaker 1: Fed is so careful when it comes to markets, right,
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Speaker 1: they don't want to spoot the markets, but they don't
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Speaker 1: care about the common man paying five dollars at the pump.
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Speaker 1: If they wanted to tackle inflation right now, she was
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Speaker 1: she was saying, and Paul made a great counter argument
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Speaker 1: that really about the supply chain. If they wanted to
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Speaker 1: fight inflation, they would just have an emergency meeting and
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Speaker 1: raise fifty basis points now and maybe six eight months
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Speaker 1: from now. That would slow start to slow business activity.
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Speaker 1: Policy working with a lag, So it's not really going
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Speaker 1: to help. I mean, we were surprised by retail sales
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Speaker 1: yesterday and how good they were, and we've been surprised
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Speaker 1: by how strong uh consumer credit has been. People want
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Speaker 1: to spend money. Well, retail sales disappointed the last two reports.
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Speaker 1: Think about how bad it was in December, and that
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Speaker 1: was Christmas, but that was because October was better, So
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Speaker 1: I mean we pulled it forward. That's you're just basically
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Speaker 1: outlining that why it's so hard for anyone to do
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Speaker 1: monetary policy these days, especially when you're working with a
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Speaker 1: blunt instrument like one interest rate. Well, and to Paul's point,
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Speaker 1: if you're if it's supply constraints that are causing inflation.
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Speaker 1: You know, if if I'm paying so much more for
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Speaker 1: my GMC yukon a T four because they just can't
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Speaker 1: make enough, it doesn't matter if the Fed raises rates.
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Speaker 1: Does the Feds going to raise rates on March sixteenth
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Speaker 1: and on March seventeenth. We aren't going to suddenly have
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Speaker 1: a big supply of semi conductors that all of a
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Speaker 1: sudden show up. So the car problem is going to continue.
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Speaker 1: And that's the issue is we bought. I mean, we've
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Speaker 1: had several separate issues that get rolled into one. The
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Speaker 1: semiconductors issue was a result of a number of factory problems,
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Speaker 1: and then the car issues, uh flowed from that. But
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Speaker 1: then we have other supply chain issues where we ordered
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Speaker 1: so many goods that they couldn't keep up with the
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Speaker 1: shipping of the mall. And that's slowly beginning to rationalize.
12:20
Speaker 1: But we're not there yet. Yeah, we just had the
12:22
Speaker 1: lead class go on from Bloomberg Intelligence. He covers all
12:25
Speaker 1: the ocean shipping companies, the railroads, the truck and companies.
12:28
Speaker 1: He sees it all, and he says he consisted going
12:30
Speaker 1: to stretch into next year. You know, he kind of
12:32
Speaker 1: thought it might be at mid event where we get
12:35
Speaker 1: some meaningful improvement in supply chain. But now he's pushing
12:38
Speaker 1: that out even further so that I have took a
12:42
Speaker 1: great Canadian Pacific investor trip through the Canadian rockies. It
12:47
Speaker 1: was awesome and three day trip, a lot of fun.
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Speaker 1: You know, I bet written the rails what Greg Jared? Yeah,
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Speaker 1: I'm sure he hasn't as a whole boat, you know
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Speaker 1: out in the West. You know, God knows doing what, alright,
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Speaker 1: Michael McKeith, They you so much for joining us giving
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Speaker 1: an update on our federal reserve and how they're looking
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Speaker 1: to move this year. But it just seems like this week, Matt,
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Speaker 1: as we've pointed out the you know, we're really talking
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Speaker 1: about geopolitical issues here, we've got the market off about
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Speaker 1: one point to five percent. Here, we have our e
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Speaker 1: t S. She wants to talk E t F S
13:22
Speaker 1: dying to talk ETFs. I was gonna say, Maestro Macetratra,
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Speaker 1: maybe has taken there's already an e t F s
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Speaker 1: R here E t F S arena in the house
13:32
Speaker 1: right now. Um, And we were talking about an e
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Speaker 1: t F fund earlier, weren't we um E s H
13:39
Speaker 1: hre we talking about E S H earlier? Which is
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Speaker 1: um No, I think those are the sutures. No, it
13:48
Speaker 1: was it was some e t F fund that somehow
13:52
Speaker 1: dealt with SPACs in a way to that's leverage on
13:57
Speaker 1: leverage there, Katie, what do you got for us? Let's ETFs.
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Speaker 1: We can talk about spack ets, we can talk about
14:02
Speaker 1: fixed income et s because it doesn't sound exciting, but
14:05
Speaker 1: there have been a ton of really interesting launches when
14:09
Speaker 1: it comes to fix income ets this week. I mean,
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Speaker 1: just today you had State Street and Blackstone launch and
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Speaker 1: e t F that will be half high yield, half
14:18
Speaker 1: clos and they're trying to really appeal to the retail
14:21
Speaker 1: crowd there, which caught my eye. You also have a
14:24
Speaker 1: bunch of black black Rock alumni debuting UH seven junk
14:28
Speaker 1: bond e t f s just today, and then earlier
14:31
Speaker 1: this week you also had a CDs e t F debut,
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Speaker 1: So it's been a really fascinating week for just bond
14:38
Speaker 1: ETFs in general. Speaking of leverage on leverage, Yeah, who
14:42
Speaker 1: buys e t s these days? Is it retail? Is
14:45
Speaker 1: it institutional? Is it hedge funds? These things? It's a
14:48
Speaker 1: really interesting mix of both. I mean, institutional and professional
14:52
Speaker 1: traders love et s because the liquidity there is so
14:55
Speaker 1: much greater than you would get in buying any sort
14:58
Speaker 1: of individual bond, So they use them often as liquidity sleeves.
15:01
Speaker 1: But you also have a very sleeve liquidity sleeve that
15:06
Speaker 1: I do too. I try to put that in stories
15:09
Speaker 1: whenever I can. But I mean they do appeal to
15:11
Speaker 1: retail because some of the products or some of the
15:14
Speaker 1: asset classes you can get exposure to through an e
15:16
Speaker 1: t F. I mean, if you're a retail trader. You're
15:18
Speaker 1: never going to be buying, you know, Russian debt, You're
15:22
Speaker 1: never going to be buying oil futures, those types of
15:25
Speaker 1: asset classes that you really can't get exposure to. But
15:28
Speaker 1: now you can through an e t F. You can
15:30
Speaker 1: buy it on any sort of brokerage platform. So it's
15:33
Speaker 1: Tony from UBS ever calls me and pitches in e
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Speaker 1: t F to me. That might be the end of
15:37
Speaker 1: our Oh no, are you not in e t F.
15:40
Speaker 1: I don't know. Yeah, I guess I can. I mean
15:42
Speaker 1: that the low fees, I guess they're targeted, which is
15:46
Speaker 1: pretty cool. I don't know, it just feels a little
15:49
Speaker 1: I'd love to see h C S mark Yusco. Right, yes,
15:55
Speaker 1: exactly exactly. So we were talking mark Yusco about and
15:59
Speaker 1: by the way, you know how I found that I
16:00
Speaker 1: couldn't remember what I had typed in, and I just
16:03
Speaker 1: typed an h I S t go And it shows
16:05
Speaker 1: you the history of all the commands that you've typed
16:08
Speaker 1: in on the Bloombergs. You can scroll back. That is
16:11
Speaker 1: a very that is a good another function. You know,
16:15
Speaker 1: I was reading about this fund and I was so
16:17
Speaker 1: mad that I didn't write about it, because it's really
16:20
Speaker 1: interesting basically that UM it feels like he's pitching this
16:23
Speaker 1: e t F as you can use it almost as
16:25
Speaker 1: a money market fund, like just store your cash here.
16:27
Speaker 1: You're probably going to get a few basis points above treasuries.
16:31
Speaker 1: Not very exciting, but you know it should work all right,
16:35
Speaker 1: So the new issue market for e t f s,
16:39
Speaker 1: where are we kind of over the last twelve months?
16:41
Speaker 1: Is it accelerating and we kind of peaked on fire?
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Speaker 1: As they say, yeah, no, you saw a record number
16:49
Speaker 1: of e t f s launched last year, which is
16:52
Speaker 1: interesting to me because they've all been mostly active and thematic.
16:55
Speaker 1: But if you look at where the money is going,
16:57
Speaker 1: it's all too pretty vanilla funds. It's all SMP five
17:00
Speaker 1: hundred index tracking funds. So you're seeing this huge surge
17:04
Speaker 1: in issuance. But I mean, those new funds are attracting
17:07
Speaker 1: very little of the actual money that's flowing into the
17:09
Speaker 1: e t F market, which is largely just dominated by
17:11
Speaker 1: Vanguard and black Rock UM and Vanguard has been the
17:16
Speaker 1: boss of e t s really since their inceptions. Right,
17:19
Speaker 1: they own they own this market. They well, okay, this
17:22
Speaker 1: is the storyline that you have to watch very closely.
17:25
Speaker 1: Black or Vanguard's share of the E t F market
17:28
Speaker 1: has grown every single year for twenty years straight. Black
17:31
Speaker 1: Rock is still your incumbent. I think they control about
17:34
Speaker 1: thirty four percent of all U S E t F assets,
17:37
Speaker 1: Vanguards at twenty nine per cent, So that flippening it's
17:41
Speaker 1: going to happen one day. Maybe it's not this year.
17:43
Speaker 1: But I also just think because of you know, the
17:46
Speaker 1: uh the legend of Jack Bogel and to me, E
17:50
Speaker 1: t F s fits so well with that passive investing legend.
17:54
Speaker 1: But of course they probably have active investing e t
17:56
Speaker 1: f s there as well. They do, and Vanguard will
17:59
Speaker 1: be quick to tell you that they do have active ETFs.
18:01
Speaker 1: But if you look at their AD two product and
18:03
Speaker 1: they just have a T two products, which is also
18:05
Speaker 1: mind blowing, it's mostly passive. That's where all the money is.
18:08
Speaker 1: And I space E t F gets all the Bloomberg
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Speaker 1: News written stuff on E t F and E t
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Speaker 1: F E t F and b I E t f
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Speaker 1: s to get the research there. All right, let's talk
18:28
Speaker 1: global oil. Brent crude ninety cents. We were on I
18:32
Speaker 1: guess we still are on a one watch. I'm hearing
18:35
Speaker 1: some hundred dollar numbers coming out of Wall Street. But
18:37
Speaker 1: when we want to talk oil or commodities, pork bellies, crypto,
18:41
Speaker 1: we go to Mike McLane. He's from Bloomberg Intelligence Commodities. Uh. Analysts,
18:46
Speaker 1: they're uh, Mike, You're in a Bloomberg Interactive broker studio.
18:50
Speaker 1: He's here, Folks. Usually is down in Miami Beach, kicking
18:52
Speaker 1: back at the pool with a cocktail with an umbrella
18:55
Speaker 1: in it, but he is here in New York working
18:57
Speaker 1: this week. Mike, what do you make a crude oil? Here?
18:59
Speaker 1: Are going to see that handle? I think it's part
19:02
Speaker 1: of the process that it did in two thousand and eight.
19:05
Speaker 1: Elevator escalator up, elevator down. So right now we're in
19:08
Speaker 1: that upstage. Today is not so great, but it's factoring
19:11
Speaker 1: a pretty significant armed conflict between you know, in Europe
19:14
Speaker 1: with a large exporter of crudel and a large exporter
19:17
Speaker 1: of grains. To me, that's otherwise, once we get through
19:21
Speaker 1: this period, it happens or not, crudel is going back
19:23
Speaker 1: to fifty and that is are below and because two
19:27
Speaker 1: and two thousand and eight it's peaked at one and
19:30
Speaker 1: then dropped the forty um the next year, and then
19:33
Speaker 1: what happened was that we went up to a hundred
19:35
Speaker 1: for till two thousand eleven. Then the whole U s
19:36
Speaker 1: Shell revolution happened, oil sands in Canada. That's happening again. Now.
19:40
Speaker 1: The differences Matt loves is the evs are really kicking in.
19:43
Speaker 1: That's it's and our consumption in North America peaked in
19:47
Speaker 1: two thousand eighteen, and so it's starting to head lower.
19:50
Speaker 1: So also the key thing is war. Okay, war keeps
19:53
Speaker 1: it elevated and the shorter term, but the big picture
19:55
Speaker 1: is higher prices bring up more supply, and it's worse
19:58
Speaker 1: this time. So here's what that part. At that part,
20:00
Speaker 1: I don't we don't see happening yet, right. We don't
20:02
Speaker 1: see the shale guys recounts pulling more oil out of
20:06
Speaker 1: the ground. We don't see Texas pulling the trigger. They
20:09
Speaker 1: just don't seem to be done at Why why lagging?
20:12
Speaker 1: So what are we doing right now? We're the reciprocal
20:14
Speaker 1: negative prices. We're going to do the exact opposite within
20:18
Speaker 1: the next year. Might be three months high prices now
20:20
Speaker 1: back to the more enduring trend. So let's give you
20:23
Speaker 1: this fact. Crude picked at one in July m July
20:26
Speaker 1: two eight. If it would catch up to pp i'd
20:29
Speaker 1: be two. So that's a bear market that's bouncing within
20:32
Speaker 1: a range. So, yes, it's a lot of fear, but
20:35
Speaker 1: this is just the facts of the market. If you can,
20:37
Speaker 1: you can create more of it. We use less of it.
20:39
Speaker 1: And you know, I came from a corn melt background.
20:41
Speaker 1: Twelve percent of our gasoline is from ethanol, which I
20:44
Speaker 1: know you love. I'm against that. Well, I'm not against
20:47
Speaker 1: it if you don't care about your motor, you know,
20:50
Speaker 1: but it's not good. I don't want to put that
20:52
Speaker 1: in my I will drive the extra mile to get
20:55
Speaker 1: pure gasoline. Really, I don't want And yes you do,
21:01
Speaker 1: I don't care, do I you don't care? I don't care. No, alright,
21:04
Speaker 1: so alright. So but supply and demand here OPEC has
21:09
Speaker 1: remained pretty disciplined. Is that something you expect to continue it? Does?
21:14
Speaker 1: Does OPEC really have that much spare capacity? Well, one
21:17
Speaker 1: of the things we've been hearing from the guests we
21:19
Speaker 1: bring on is okay, Saudi does, and you can see
21:21
Speaker 1: it with OPEC go. It's a really cool chart for
21:24
Speaker 1: spare capacity. Um. But the guests that we have on
21:28
Speaker 1: lately have been doubtful that other countries really have that
21:31
Speaker 1: much spare capacity. And actually you don't see anything on
21:34
Speaker 1: OPEC go besides Saudi Arabia and the UAE. Don't underestimate
21:39
Speaker 1: how prices bring on supply and commodities used to have hair.
21:43
Speaker 1: It's just exactly, it's just so there, detaining to hear
21:46
Speaker 1: it because I remember how we were gonna have peak
21:48
Speaker 1: oil ten years ago, what really peaked consumption in North America?
21:52
Speaker 1: So that will come the disciplines impressive. Iran could come
21:54
Speaker 1: back and look at Venezuela. They have as much oils crude.
21:56
Speaker 1: At some point that comes back in higher prices bringing
21:59
Speaker 1: that on. But I think what's happy now is more
22:00
Speaker 1: than macro. I think we're beginning part of the great
22:03
Speaker 1: reversion of this massive period of economic fiscal, monetary stimulus.
22:08
Speaker 1: And so if if we don't have the war, we
22:10
Speaker 1: face the fet If we do have the war, we
22:12
Speaker 1: have other issues of potential recession. But you know, the
22:15
Speaker 1: unique thing that's really been happening lately, I was impressed
22:18
Speaker 1: with how bitcoin has been a leading indicator. If you
22:21
Speaker 1: come in the morning, like today, bitcoin was heavy the
22:23
Speaker 1: stock market fo yeah, you see, you watch the ticker
22:25
Speaker 1: and then you have those days when stock markets down
22:27
Speaker 1: and Bitcoin starts taking up the stock market files. It's
22:30
Speaker 1: amazing how this crypto has become the leading, the leading
22:33
Speaker 1: indicator in markets. But in the big picture, I think
22:35
Speaker 1: that's what comes out ahead. So I published a piece recently,
22:38
Speaker 1: as you know, lack of supply decline to supply increasing
22:41
Speaker 1: adoptions not not part of most most portfolios Bitcoin, and
22:44
Speaker 1: you look at crude oil, we're using less of you
22:47
Speaker 1: mentioned ethano. I drive electric and I've had it for
22:49
Speaker 1: eight years now. It's great electric. You know what, if
22:52
Speaker 1: any beach, I'll drive it all the way. It's I
22:56
Speaker 1: launed you wait, I shall be vault or a bolt
22:58
Speaker 1: a volt so they don't make them any more, but
23:00
Speaker 1: it's a hybrid. Yeah, So basically I love that car. Yeah. Um,
23:04
Speaker 1: I test drove that when they first came out. So
23:06
Speaker 1: my thing is, as I've been telling Paul and anyone
23:09
Speaker 1: who listened, I love the idea of electric cars. I
23:12
Speaker 1: love the acceleration of electric cars. I missed the vibrations
23:16
Speaker 1: and the sound of an internal combustion engine and shifting
23:21
Speaker 1: gears obviously as well. I love a good hybrid, so
23:24
Speaker 1: I loved the Chevy Vault when that came out, and
23:27
Speaker 1: I don't know why they don't make it anymore. I
23:29
Speaker 1: love uh. The BMW now has um an X five
23:34
Speaker 1: that has an in line six, so fantastic power plant.
23:38
Speaker 1: That's the power plant that made them famous. And a
23:41
Speaker 1: huge like thirty kilowatt battery, so you can drive miles
23:47
Speaker 1: without a motor, but when you need it, you kick
23:49
Speaker 1: it on. It's your enthusiasms. To me, that's profound because
23:54
Speaker 1: that's where it's going, and it's happening more in the
23:56
Speaker 1: wealthier companies. But I heard last year in China to
24:00
Speaker 1: new auto sales were e vs. Now you mentioned hybrids.
24:02
Speaker 1: My mine gets ninety miles for the getting per gill
24:04
Speaker 1: and and my brother's a mechanics. Is a cool thing
24:06
Speaker 1: about these is they they the engine doesn't work hard,
24:09
Speaker 1: they last forever because we use electric for stoff and
24:12
Speaker 1: go and the engine only works for the long distances
24:14
Speaker 1: it works. It's a good system. I wish they would
24:16
Speaker 1: make cars where you could easily swap out the batteries
24:18
Speaker 1: because my concern is I buy one now or the
24:20
Speaker 1: thirty kilowatt battery and in ten years from now there's
24:23
Speaker 1: a five kilowatt battery and the same size. All right,
24:26
Speaker 1: Mike McLoone, thank you so much. We appreciate it. We
24:28
Speaker 1: didn't get to talk pork bellies. We got tripped up
24:30
Speaker 1: by cryptos and concentrated orange. Will do bellies next time,
24:34
Speaker 1: I guarantee it. Thanks for listening to the Bloomberg Markets podcast.
24:41
Speaker 1: You can subscribe and listen to interviews with Apple Podcasts
24:44
Speaker 1: or whatever podcast platform you prefer. I'm Matt Miller. I'm
24:48
Speaker 1: on Twitter at Matt Miller on ball swheey. I'm on
24:52
Speaker 1: Twitter at pt Sweeney Before the podcast. You can always
24:55
Speaker 1: catch us worldwide at Bloomberg Radio