Bankman-Fried Associates Flip on FTX Founder

or Bloomberg dot com. You can also listen to our radio show at two pm Eastern Time on Bloomberg Radio or stream us live on YouTube and Bloomberg dot com. Alright, if I look at the Bloomberg terminal right now, the headline right on top is Sam Bankman free released on two hundred fifty million dollar bond in ft X fraud case. Let's check in with someone on the ground. We have Ava Benny Morrison on the phone from the Southern District

Court of New York in New York City. But we're gonna get to the bill package in just a minute, but tell us a little bit about the scene on the ground. Good afterday. So at the moment, we're waiting outside the front doors of the Southern District of New York District Court House in downtown Manhattan. Um. There's dozens of photographers of cameraman UM, a lot of reporters, all waiting to Sam Batman free to walk out. In the last hour, he's been granted um bail. It was a

very very stringent bail package. UM. And he was told by the judge that he'll be able to walk out of court today. Um. Once he and his parents signed a paper work. Even did was there a plee entered today? No, there wasn't a poet entered today. It was the first time that he had appeared in court on the US charges, um, and the court heard that he'll have a chance to enter a plea at a later date. The next court

date was stepped out for January. So this must be some house to parents have it securest million dollar bond. Can you explain how that works? Well, it's it's not so much the worth of the house, um, but it is that he will be on the hook and his parents will be on the hook for two hundred fifty million dollars if he breaches any of these bail conditions. Now there are fifteen bail conditions. He's essentially going to have to live in home detention with electronic monitoring in

his parents house in California. Uh and uh they used their house um as a surety UM attached to the bond. So again, if he tries to flee, if he breaches any of these conditions and a warrant is put out for his arrest, the judge warned him actually today UM that he will be UM. You know, he will have to pay two hundred and fifty million dollars. And I'll make the point as well that the prosecutors said that this was the largest pre trial bond um in history.

So Ever, I mean, you've been covering this story every step of the way, and it's just a whirlwind. I mean, it was just ten days ago on December twelve, that Sam Bankman Fried was arrest did in the Bahamas. And ten days ago we thought that he was going to fight extradition. Walk us through how we got there, how we ended up here at this New York court appearance today. You're very right. It has been a wild ride over

the past ten days. Bankman freed has been living in the Bahamas for some time, and it was last Monday evening that the behind me in authorities acting on a proditional restaurant from the US. Arrested bankman freed. He was accused of orchestrating a year long fraud through FTX and

FTX hedge fund um aur a meter research. He appeared in court in the Bahamas and he was denied bail, and initially he indicated that he would fight extradition to the US um but I think there was maybe a bit of an insumption that he would be granted bail and he would be able to uh leave, moved back into his apartment in the Bahamas and fight extradition from there. But he was taken to quite a notorious prison in the Bahamas, where he has been for more where he

was for more than a week. Then he changed his mind over the weekend and decided that he was going to consent to extradition back to the United States, and that played in his favor in the bail hearing today. The prostitutor said that if he hadn't have if he hadn't had consented be coming back to the United States, then he may not have been getting bail today. He was flown back from the Bahamas to um White Plains

north of Manhattan last night. He was escorted by FBI agents and then appeared for the first time in court today. And another major announcement regarding this case is former Element the chief executive officer Caroline Ellison and former ft X Chief Technology Officer Gary Wayang. They pleaded guilty to fraud and we're cooperating with the prosecution. Boy, I didn't see that coming give us kind of what we know now.

I think there was a lot of rumor and speculation at out who from FTX was co operating or wasn't cooperating. Banquetfried had been very vocal about what happened at ft X or his version of events ever since it all collapsed early last month. He was doing a lot of media interviews UM, but his co executives and the people that are closest to him UM were noticeably quiet. And the timing on this announcement about UM Ellison and sorry about the Caroline Ellison and Gary Wayange pleading guilty was

really interesting. UM. The prosecutors here in New York waited until he was on the plane in the custody of US law enforcement UM and on his way to New York before they announced that Caroline Ellison and Gary Wang, who had been with Banker and Freed from the very early stages of ftx UM, had actually been cooperating the SUN and they had both pleaded guilty to fraud charges.

Ellison has pleaded guilty seven charges, Wayang has pleaded guilty to four, and they have agreed to cooperate with prosecutors. This is obviously a massive blow for bank and Freed. Uh and they will be really, really valuable for the prosecution case. Well, that's what I've been wondering what this means for bank Man Freed's defense, because, I mean, during his media tour, he was very clear that he it wasn't necessarily intentional, it was management missteps that at least

is what he was trying to present. But now that you have these two, these two very inner circle people, I don't know how much more inner circle you can get plead and guilty cooperating. I mean, what does that

mean for bank man Freed exactly? And during his media interviews before his arrest, he was attempting to shift the blame a little bit to Alameda and saying that he didn't have as much oversight over Alameda as he should have, and he wasn't quite sure what was going on there, because one of the key issues of this case obviously is the use of FTX customer funds um to place high respects and prop up Alameda, And so he was attempt him to sort of put that hedge fund house

arms lank Um and we sort of got maybe a little bit of a preview or the argument he might put up at a future court case. But Gary Wayang, I think will be a difficult witness to get around. He lived with Bankman Freed in the Bahamas. He was the chief technology officer of ft x UM. He wrote the codes that helped establish FTX. He was, you know, all accounts working side by side with him. So it might be a difficult argument for Bankman Free to make that he didn't know what Wayne was up to when

Wayange has admitted to UM engaging in fraud. So we only have about twenty seconds left with you. But I am curious what should we be watching for next? What's next in the timeline? Uh, well, we're waiting now for bankman Free to walk out of the court house, his parents Barbara and Joseph to standford awful professors were um here in court. We're waiting for them all to walk work, walk half and then he will have to make his way back to California. So I guess we're watching to

see as he abides by those bowel conditions. But also well, students have their eye on alright, great stuff. That is ava Benni Morrison on the phone outside the Southern District Court of New York in New York City, giving us all the latest on Sam bankman Fried and that FTX fraud case. Definitely a lot of moving parts here, these sees Bloomberg Business Week with Carol Masser and Tim Stinebeck on Bloomberg Radio. Well, how about this for an uplifting

uh title? Here? Federal Reserve doesn't care about misery investors are feeling. And then I read along supporting stock and bond markets. That's not the business of the Federal Reserve. As I read those two things, I said, this feels it sounds like a Michael Reagan, you know, piece of writing.

And sure enough, that's what it is. Joe Weber, editor Bloomber Business Week, joins us here in our Bloomberg Inner Actor Broker studio, and he said, Mike Reagan, Senior editor for Bloomer Market Joints is on zoom from New Jersey with his Maryland Turps sweatshirt. Looks like there we go. All right, Maryland football, are they bowling? Yeah, Maryland has they are? Yeah, the Duke's mayonnaise ball, which we of

course is the most sure, absolutely exactly. All right, Joel, talk to us about kind of what we're doing here with this column. Here the feder reserves not in the business supporting stocks and bonds. Yeah, you know, when we just we're talking about um. The year that's been one of the themes has just been how you know, for a long time, it felt like there was a punch bowl and the FED was there to like host a

great fun party and everything always went up. And then all of a sudden that punch bowl was taken away and um some carnadge and suit and obviously um inflation being a huge theme of the year, and the FED continuing to raise rates and any sort of uh accommodation that once may have felt like it from the Fed

is nowhere to be seen. And in fact, that uh J pal might look a little bit like a certain you know, movie poster and from the movie Misery or something, right right, Mike, that was where we went with the art in this one. Yeah, pretty much. You know, it's interesting in that, you know, you can have this economy that on the surfaces is sort of booming. You know, we got that GDP print this morning three points percent. We've got a unemployment rate that's three point seven percent,

you know, near a fifty some year low. But if the inflation picks up like it has this here, it's it's an economic uh emergency basically that the FED has to fight because you know, inflation really can cause maybe less pain less misery than unemployment uh per person that it affects, but it affects everyone, right, a broader swath of the population. So I went back to this, uh one of my favorite indexes, the misery index. It's called Arthur Oakin, who was a advisor to lb J president

Lyndon Johnson in the in the sixties. And I love it because the math and it's very simple. It's just the unemployment rate plus the inflation rate, and the idea being, you know, it's either ones elevated you've got problems in the economy, um And in this case, it's it's the

inflation that's elevated. So as you put out Joel, you know that the markets got used to this, the FED that would always come to the rescue if the stock market or even the bond market was looking wobbly and and you know, headed towards a bear market or a

big drop. And I think there was a tough lesson for investors to learn this year that it's not the case this time that you know, um, it's it's really this inflation is causing so much misery for so many people that that um, they're willing to really just allow the markets to to create this pain for investors this year.

So a lot of misery to go around. To say, my personal Misery index has a few more components than just those two, but it's a pretty good give me with the With the next one, it depends heavily on the weather, but in any case, yeah, it's going to be disgusting tomorrow. But Mike, I do want to push back a little bit on the headline. So the Fed

doesn't care about the misery investors are feeling. But if you look from the perspective of financial conditions, in some way, they they do care, and they actually like it when you think about what they're trying to accomplish, fight with me a little bit, Yeah right, No, I mean you're absolutely right. I would never fight with you, thank you, because they're just gonna throw me under the bus there. Well, Joel put that in there. Well, that's the thing. You know.

The financial conditions are exactly the one tool that the FED has at its disposal, and the way, you know, the remote control for that tool is is interest. Right, So if uh, you know, unemployment is their concern, if inflation is not an issue. As you know, it wasn't really an issue for how long they're from you know, basically since the global financial crisis in two thousand and eight all the way up until COVID there there was

no no real worry about the inflation from Feds. So they really were focused on that other side of their mandate, the the employment situation and trying to make sure the economy was at full employment. So, um, you know, if you can keep rates low to keep financial financial conditions accommodative to the economy, Um, that's what they did for so long. It kind of lulled the market into thinking, uh, you know, the FED has this unspoken third mandate to

to really prop up the stock and bond markets. Um. Well, and doesn't it feel just like the markets like that that third rail is like, you know, if you're in the markets, that's what you really do want. All all year it felt like that. It was just like, at some point here the Fed's gonna cave and it's all gonna go our way, and we'll be we'll be ready for that moment. And yet that moment simply has has not happened this year, and if we look ahead, probably

not gonna happen for for a while. Still. Yeah, yeah, I would think I would guess at least not until and not in the first half of the year for sure. Maybe towards the back half of the year we'll start getting some hints and some clues. Um. But yeah, you know, and to Katie's point, I mean, now they're using that tool of financial conditions for the opposite purpose to to really cool off the economy, to undergree to cool off the job market. Um and inflation. Uh So it's you know,

it's what they've always said that they do. You know, they haven't made it much of a secret or much of a mystery, but investors sort of hear what they want to hear, I think, and Um, you know, so that this is the year where it was kind of a reality check for markets, I think, and that's sort of the point of this column is that you know, uh, to go back to Arthur Oakan and his his delightfully

simple index. You know, that's it. Job market and inflation UH are to him as far as how do you gauge sort of whether the nation is miserable or not? And so the FED to to fulfill their mandates from Congress, those are the two inputs they look at. So you know, if if it's the unemployment rate that's causing the misery, they're gonna err on the side of being too accommodative to financial conditions and and actually will prop up the stock market in the bond market, um to some degree.

If though it's inflation like we saw this year, Um, they're turning that knob the other way and tightening financial conditions to uh to make sure that you know, the child market doesn't get too hot, wage growth doesn't get too hot and feed into that inflation problem by forcing companies to raise prices to cover these higher wages. So UM, and I think you're right Sol that, Uh, it doesn't seem like they'll be turning that knob back the other direction. Uh,

at least not in the foreseeable future. Again, maybe maybe they'll start hitting at it later in Alright, great stuff. Mike Greagan, senior editor for Bloomberg Markets, joining us on Zoom from New Jersey, donning his Maryland terps. Uh, pull over there, good stuff. Joe Webber, Editor Bloomberg Business Week. Here in a Bloombergan Actor broker studio. You're listening to Bloomberg Business Week with Karrol Messer and Tim Stenovic on Bloomberg Radio. Well, it's been over an hour, Paul. We

haven't even talked about Elon Muskat that button on. I know, but there's so much going on there. You know. You talked to some of these shareholders and the south side analysts that have been recommending this company, recommending this technology, recommending this management team. They're they're understandably upset. Well, let's talk to a shareholder now, someone who has been following Tesla for a while. His name is Gary Black. He is a portfolio manager. Uh. He manages the Future Fund

active exchange traded fund. That's my world at cover ETFs. The ticker there is f F and D Gary joins us on the phone from Chicago, and Gary, I'm looking at your holdings right now. I see Tesla is your biggest position by market value. But I don't know, looking over your notes, you don't seem too pleased with Elon Musk right now. Well, it's definitely hurt us this year. And I guess you know. Look, we look at Tesla and it's got great fundamentals as ev adoption global EVY adoption.

Right now it's about ten percent global. We think it'll be by uh, Tesla earnings should explode, and you know, from a fundamental standpoint, we're looking for about seven dollars and earnings next year, which kind of puts Tesla about a I don't know an e tempe, which is about where the SMP is. But it's growing earnings at a year. But it's the noise from Twitter and Ellen tweeting out his um his political views and all the drama that is killing the stock right now, and we just have

to stomach it and wait till that ends. Well, it's it's interesting, Gary, I mean, Tesla is theoretically a publicly traded company. There is public shareholders, board of directors. As a shareholder are you frustrated that no one entity, no one person, whether no board is able to rain in? Mr Musk, I believe that the reason you saw this Twitter poll that came out Sunday night where you said should I step down from Twitter as CEO? I think

the board frustrated them to do it. I know very I've been on two public boards, I've been a CEO. I know very few public boards will allow somebody to moonlight as a CEO and another company I certainly wasn't able to do it. And you know, a Twitter, he's basically rebuilding it from the ground up. So I've written letters to the board. I've you know, not been an activist because we don't practice that style of management. But

I'm frustrated. I know um Leo Kogowan, who is the third largest individual shareholder after Ellen and Larry Ellison, has he voiced his frustrations. Many of us are frustrated. But you know, I believe that the board is trying to pressure Ellen in in a in a nice way, you know, in a constructive way. I'll say to do the right thing, which is to step off the Twitter board, bringing a

new CEO and focus on Tesla. Tesla has a clear path to being a three trillion dollar company because of FSD, because of ev adoption, because of all the new product launches coming like Cybertruck. There's a thirty dollar ev coming um and yet it's it's you know, from a stock standpoint, it's failing miserably because of all the Twitter noise. So I do believe they're trying to do something about it. I don't think that that that pol would have just showed up out of nowhere on Sunday Unite unless the

board was pressuring him to step down. Garry, did you vote in the poll? Of course I voted yes. One of the debates, one of the debates is, you know, did Ellen know the results beforehand? I think he viewed that he was going to win, I meaning the people say no, don't step down, because he was tweeting all throughout the pole like be careful what you wish for and nobody can do this. You know, nobody would be

liot enough to take this job. And you know that's partially true because he has vowed to stay on as the head of I think software and I don't know what he calls it, buts and and you know, look if I'm and we can go through the names of people who I think could be interested, but if I'm one of those people, I don't know if I would want to sign up if he's going to be very, very involved, and you know, and look what he's done again,

I'm voicing my frustration. I'm not knocking the guy because he's brilliant, but you know, he has basically blamed the test of stock price to client underfed raising interest rates. That's that that's just not true. If you look at tests of stock price this year through September, uh they were actually outperforming Nazdak. They were down twenty five, but NASAC was down thirty three. Since October one, um Tesla

is down fifty two and Nazac is down three. And you know what has happened in that time is they missed on third quarterblans because of China. And that's again their own vault because they didn't have a thirty thou dollar EV one and two he bought where he took possession of Twitter and then you know, I made a series i'd say mistakes um at at running Twitter, and you know, he he angered a lot of the advertisers by saying if you leave, I'm gonna name and shame you.

That's not the way you treat an advertiser. Um. And then there was a there was a constant like constant action that you know, created a lot of drama, like when they launched that Twitter blue and you know, they didn't think it through and people signed up, and then you had things like you know, super Mario putting his middle finger up. Uh, you know, and if you're an advertiser, that's what you're most concerned about, product adjacency. So I

just think the drama's got to stop. And then, you know, the third thing is him tweeting out constantly his political beliefs. That's fine, he can have his political beliefs, but but you're gonna you're gonna anger the very when you when you accused people of having woke mind virus and stuff words like that, you're basically angering the very people that you're trying to buy get to buy e v s. And so the big question that we have and everybody's trying to and this is why I think the stock

is getting hammered. Is the testa EV brand taking a hit because of all this Twitter drama. And I would say I don't believe so. But the more he stays on Twitter and keeps tweeting out you know stuff, I think the more likely is that the EV takes it hit and it's and it becomes no longer cool to drive Teslas anymore, becomes almost like, I don't know, it's it's, it's, it's it's The people will be embarrassed if he doesn't, not at all. So Gary, given that backdrop, who in

the right mind would take the job at CEO? Do you have any thoughts as to I don't know who might take that job because they're not even really gonna be the CEO. Yeah. Well, look the people who are qualified, if Ellen would would let them do the job. Cheryl Sandberg X Facebook could clearly do it. Um Brett Taylor if he's x U CRM salesports dot com he was the co CEO. Um, he could do it. Um. Marissa Mayer ex Google uh and um um Yahoo could do it. But you know, you need somebody who really can regain

the trust of advertisers. You need somebody who's proven they can monetize a user base. Because Elana said he wants more user fees and he wants to do more e commerce. You need somebody with you know, the tech passion because Ellen is not going to hire somebody unless they're technic. Technologically, um, you know they have good tech skills. You need somebody's strong financial actiment because the company's got huge debt. And then you need somebody who can lead the troops. And

then I would have a six fact. You need somebody who complements Elon, and Elon respects and shares his vision and his work ethic. And look, there's there's probably a handful of people in the world that can do all those six things, but it can't be somebody who's just that you know, there are a lot of names thing thrown around. Um that's just a tech person, you know who has a YouTube podcast and talks about technology, which some of the names out there and extent that that's

just that's crazy. UM won't respect that. So I think there are people out there, But will Ellen give the person enough room to actually make decisions and you know, do what they need to do if he's going to still be in love? I think that's the challenge. And look, during the interview process, you can that's what that's what you figure out. And I've worked for entrepreneurs before the CEO something you have to figure out will the person

give your room to make decisions or not? And Gary, just a little bit more of a technical Wall Street question. Do you have any knowledge of some of these stock sales from Elon Musk. Were they solely primarily to raise cash for to support the debt or were they potentially margin calls from investment banks that where he may have pledged his stock is collateral. No, they weren't margin calls. I know that because he doesn't margin himself up that much.

And look there there was seven and a half billion dollars worth of test. Elon sold seven a half billion dollars with the stock since he took over Twitter. Since October he sold forty one million shares. And what I gather from both talking to people listening to him on that that is going into Twitter. It's partly too, some of the debt, which is very expensive. There's about three billions a debt that is um eleven point seven and plus.

I think you know he's mentioned this. It's burned cash at the rate of about three billions while he's cut about half the people out. Gary, we only have about a minute left with you and I want to get back to Tesla, And I mean, at a certain point do you start selling out of Tesla again, It's the

biggest position in your fund. At what point would that change if we thought fundamentals had changed, meaning that the brand is now no longer in favor and people aren't gonna buy it anymore, we would then we would cut our estimates, and we would we would sell some. But at a hundred and twenty four dollars, the stock is selling at the same multiple as the SFP five for next year on our estimates, and yet it's growing at a year and I can't in good conscience, you know,

sell it now? Are you at it? We've been holding off because we felt that there still could be some more you've got window dressing going on. This is more from a trading standpoint. You know, people who have lost Funny tested down six percent this year, you know, do not And this is more hedge funds. They do not want to show it in one of their top ten positions. Institutional managers are so focused on it. But that's something

that we've kind of been waiting for. And look, we'll probably get to it at the end of the year. All right carry. Unfortunately have to go. We have to catch up with you next year. That is Gary Black, portfolio manager of the Future Fund Active E t F, joining us on the phone from Chicago. I'm a journal now, but you let me drive? Oh no, no, no, no please, I'll do vels. I want to drive. It's a good question time drive to the clothes on blue Berg Radio.

All right, we are about eighteen minutes away from the close of trading on this Thursday. Let's get a little insight on the auction with Christopher Zooki is founder, chairman and chief investment officer over at c A Z Investments. He joins us on Zoom from Houston. Christopher, great to have you. It's uh looking like an ugly end to an ugly year, thinking about three. Do you see any brighter lights there or is there more pain ahead? Well,

thank you for having me. It's it's tough to be in a bad mood when you hear songs like that in the intro, but then you look at the screen and everything is red, so it kind of wakes everybody up and makes them a little bit of a reality of what this year has been. So, you know, we do look at two thousand twenty three, much the same as we did when we started this year. We talked about at the begin ending of the year what we

call the double punch to the gut. When you look at most major bearer markets, the comprise of two phases. The first phase is the valuation compression, as everybody goes, oh, it was way too high. It needs to be lower, and that first punch hurts. But it's the second punch to the gut that really really does the damage, because that is the earnings recession, that is the earnings decline, and we feel like we're at the beginning of that.

And whether you talk about Carmacks, you talk about some of the other names that have not been great, Microns, numbers, etcetera, it is clear that we are at the beginning of this earnings decline, not the end of it. Chris, I love your resume because it's got some of the names that I just love on Wall Street, Potential Securities, Lehman Brothers, and one of my alma Maters Pain Webber great firms. Unfortunately,

none of those three around anymore. So I'm not sure what that says about you and me, and maybe been too long in this business but you know, Chris, you could take a look at the argument that says, all right, I've got inflation, I've got light at the end of the tunnel as it relates to interest rate increases, that's probably a mid twenty three event. And how much can earnings risk be? So I got two out of three things working for me, maybe I should be putting on

some risk. Here is goe. But you think that earnings risk opponent is still too much that you don't want to get in front of that. I think so you definitely have to look at the third as the most severe. But I'll add a couple to them, all right. And to be very very clear, this market right now, you know, rallied again for no real reason. It is likely to come down, and obviously today is maybe the precursor of things to come. But what concerns us the most right

now is the consumer. Because most people are not talking about that. They're talking about the FED, they're talking about rates. All those matter tremendously, But the actual economy and what drives companies earnings plus the GDP. Last time we looked as the consumer themselves. So those consumers are just now beginning to field the real impact of rates that have

come through this year. You know, looked at I think the number was mortgage payment at the beginning of the year would buy you a four eight thousand dollar house. Today it's something like a three dollar house or maybe even less than that. That is a huge wealth effect and a negative wealth effect. Car Max is just a great example where everybody and their brother bought a new

car or a used car. I knew to them car in two thousand one with all the stimulus money, and now they're like, I maybe I don't need a new car that much or a new used car that much, So I'm going to delay those purchases. And as we see that decline of demand and combine that with a rising costs that are still there. Inflation maybe peaking, but margins are still going to compress because expenses are high and demand is dropping. Profit margins compressing is usually would

cause his most major earnings recessions to occur. I want to talk about the bond mark it a little bit. You know, we've been talking a lot about the equity market, which hasn't been pretty. Hasn't been too pretty in the bond market either, But Christopher, I look across Wall street, it seems like everyone is a bondable. Do you fall on that camp as well. No, we don't, and it's

because we tend to be a little bit contrarian. We definitely got more bullish when things in September October probably went a little bit too far because the FED is going to begin to taper and they're going to slow their rate of increase. But the market right now is forecasting in you know, by the end of two thousand twenty three, that the FED is going to cut rates as much as a hundred forty basis points. We think that probably is a little optimistic. It's likely that that's

pushed out into twenty four, etcetera. So if inflation stays stubbornly high and the FED does not give an indication that we're going to be cutting rates anytime soon, we feel like that could be a real bad place for investors to be. The only exception to that, I'm gonna, you know, disagree with myself here for a second, because

I think it's important. The only exception of that would be if the recession turns out to be a doozy technical term, if it really turns out to be bad, well, then the long end of the curve is gonna come down a lot more, in which case it would make sense to be bullish long term thirty year bonds, maybe even ten years. But realistically, we don't expect it to

be a GFC type procession. We expect it to be a serious recession, but not that bad, and so we think that the bond market has already adjusted a lot to what's likely to occur. So from here the risk rewards is not very good. So no haven bid necessarily, I don't think so. Um, you could see it. If the recession turns out to be just a draconian type scenario, you could see that haven bid, but we feel like

that's gonna be more on the short end. You're just gonna see more money flow into you know, two's and fives and that kind of thing, as opposed to going out and taking more risk on the tens um. Again, if it turns out to be a GFC type and ten years going to go back to one fifty, well then yeah, you want to be long tenures right now, we just don't think that's likely. That of Churse, we know you're in Houston, we know your native Houstonian, you're

involved in your community. Just give us a sense of on the ground, how are things in Houston, how's the economy, how's the outlook as we come out of this pandemic. You know, it's a it's we're doing really well as a city. And it's a combination of how the energy markets are certainly a lot more favorable than they've been in a while. We also have such a dominant healthcare you know, uh and and fantastic health care facilities you know here with the Texas Medical Center and so much

else that we've done to diversify our city. You know, we're dealing with some of the other issues related to commercial real estate that everywhere else is right now, but not as bad. So when we look at the major pockets of the city, we're actually doing really well. Um, we've got good job growth. We've got a lot of people moving here from other parts of the country. And so when you have good job growth and you have new you know, people moving in, it means that our

housing markets are pretty stable and doing okay. And then we also have a healthy job market for people that want to come here to work. So we welcome you to Texas. Good stuff, all right, Christopher, We appreciate you taking the time. Christopher's book, founder, chairman and chief investment Officer of c A Z Investments, joining us via zoom

from Houston. He has a cautious outlook, pragmatic outlook, of caution outlook, and he says you probably don't want to get in front of earnings revisions, downward earning revisions, and he thinks we still have more to go for earnings next year and beyond. Thanks for listening to Bloomberg Business Week. Download the podcast on iTunes, SoundCloud, or Bloomberg dot com. You can also listen to our radio show at two pm Eastern on Bloomberg Radio or stream us live on YouTube and Bloomberg dot com