Yields, Web3, Credit Suisse, Retail, And Cruises (Podcast)

disturbing image. Matt Miller just walked in with a huge thing of peanut butter. Yes, well, I'll tell you what. We have these machines upstairs and they grind the peanuts. They make it fresh for you, so it doesn't take anything like peanut butter, the worst thing in the word. I'm telling you. It is so good and it's much better for you than Jiff, which is my previous fat Matt loved eating Jeff peanut butter or skippy, but skinny

Matt likes fresh ground peanuts. It's so much healthier. Alright, folks. For those of that don't know, Matt's been on a diet for the last couple of months and has lost a meaningful amount thirty three pound the end of July. So there you go. Good for him. Ira save us here Ira Jersey, chief US interest rate strategist for Bloomberg Intelligence. I've got inflation data over the next couple of days. People like you tell me I need to pay attention. What's the FED looking for when I get some of

these data points over the next couple of days. Well, they're really hoping for them to be lower. Um. You know, of course, Bloomberg Economics actually has a relatively high print for or or things that it will be relatively high print month on month. But if if the expectation is met here on CPI, particularly core CPI being up only zero point four uh instead of the zero point six it was up last month, I think the FED will

kind of applaud that a little bit. And you know, don't look at the headline number being up or down a little bit, because there's you know, it's probably gonna be up a little because gas prices are up a little bit. But it's really the core inflation number that is going to be the focus. I think that the next month or two for for the FED and certainly

for market participants. What about retail sales. I've heard a couple of people say that, you know, retail sales is going to be a big number to pay attention to this week. Yeah, so retail sales is always is always a big number. In fact, I would say in this world, it's really um the top three, you know, it kind of has been eclipsed a little bit by CPI recently

in terms of market reaction and market function. But retail sales, if it continues to slip, you know, X automobiles for example, like it did last month, UM, then that certainly is a sign that these higher prices are leading to demand destruction. And I think that that's the real um, you know, real concern for UM for the economy in general and things like corporate earnings. Will those keep up because if obviously its top line revenues start to fall significantly, it's

not going to be good for risk assets. UM. You know. But but then again, like one of the reasons why falling headline CPI is important and certainly headline UM core inflation is that that real wage is might wind up being higher. Right, the wage numbers that we got last week weren't that bad, you know, so so bad in what sense bad for the FED or bad for the economy. Well, I when I say weren't that bad, I mean that they were high enough that it looks like real growth

is still going to be positive. And that's where, um, I think the the issue is right, nominal nominal growth rates have just skyrocketed in part because of prices, but but demand has kept up right, So so that's why those retail sales numbers that we're going to get on Friday are going to be, you know, pretty important facts. So I just saw pretty good walking by the Bloomberg Interactive Broker studio and I brought her in here, um put her in front of a mike because Cretty, you're

the one from whom I heard this. I think you were talking yesterday with Carol masser Um on Bloomberg Business Week and saying that maybe the retail sales number is as important or more important than, um the CPI number. Yeah, the logic there was that, uh, if the CPI number and the PPN number, basically it's becoming a question of the margin of of deceleration when it comes to the

inflation figures. But the retail number is different because it's speaking more to the demand side rather than the supply side, whereas the CP and PPI is more supply side driven. The retail numbers that we're going to say, are people still spending and it's coming out of time when a lot of people are kind of expecting inventory levels that are extremely high and therefore these massive sales and discounted

prices for the retail sector. So the question here is if net net the GDP is going to kind of um or I should say that the net sales are going to drop in the fourth quarter going into holiday season.

What you want to make up for the lower prices or the lower sales is higher demand UM And that's why the retail sales number could couldn't make or break that theory that people are still spending into the holiday season rather than cutting back because of UM inflation or higher prices or disposal when you do your Christmas shopping.

And Matt I don't completely disagree with that. So so the number within the retail sales number on Friday you really want to be focused on is that retail sales control group because it that is all the what inputs into GDP that looks at at overall prices. Remember this is a September number, so obviously going into like like you know, it's it's accurate to say, hey, are we going to have a decent holiday sales numbers? Um, and

September is a little bit early for that. But but still if we have a zero point three as the consensus is expecting for that control group, that will be a pretty decent number. And actually that would mean that real control group sales was basically flat. And and you know, if demand continues to keep up with these price increases

and things are good. And by the way, Matt, I just looked while we were talking, um, good things to go to that that fresh peanut butter, because peanut butter in the CPI report is up you know so far this year. So you are free in the Bloomberg pantry. But is a poultry and like eggs like up or something. Some some sectors in the food are are are quite

significantly um. But keep in mind like like things like like the the actual commodities that are in CPI, UM, you know that that's for the consumer, so so a lot of that is still shipping costs. So things like gasoline prices being much higher means that it's, you know, just cost more to get the good stores. All right, Skippy superchunk is the way to go. And I would die on that hill. Iro Jersey, chief US interest rate strategist for Bloomberg Intelligence, Thank you so much. We didn't

even get to talk soccer. That's a wasted opportunity. Tomorrow, all right, we'll do it tomorrow. Let's bring our next guest professional big time. Cole Speed, President portfolio manager of Smeet Capital Managements. Some really really good performance there. Well, I'm looking at this market. It's just been a blood bath all year. I mean, I've got cash in my pocket. Should I just leave it there? What should I be doing? Well?

To your point, what we're witnessing this year is what we call stock market failure, okay, and this is the seeds of this were sowned by the spectator of euphoria that we saw um in twenty one, whether it be Spacts or the Robin Hood Yolo traders, as Spencer Jacob from the Wall Street Journalist book lays out um. And so we're just we're bearing what we have to do with based on this, and by the way, we might not be done with this bear market until Matt has

his next neat whiskey just okay. So so I just say that because to your point, I think the topest thing for investors right now is some investors want to go right back to what was just popular okay. In other words, there is a large population of the professional stock pickers out there that are hiding out in big cap tech because they think they'll pass through price pricing

better than anyone else. The question is will the valuation protect them even if they can pass on pricing On the flip side, where you'd have to go, in our opinion to make you know, wonderful money looking forward is you need to go into economically sensitive places that have been bombed out based on the circumstances, based on the fear of macroeconomics, based on the FED I think to break, etcetera. And that's where it looks like the best prospects are

for making money in stocks. You know, I uh, there were a lot of hot stocks meme stocks during the pandemic that I've gotten crushed and most of them didn't make any money. But I, in in my health pivot, have founded another way of taking the edge off. When I get home, it doesn't involve alcohol, and I'm wondering if you have taken a look at weed stocks. I mean, talk about cheap valuations. Some of these stocks are trading at two times earnings and they're trading at three times sorry,

two times sales and three times earnings. I mean they're they're trading for very low valuations and they make money, and the outlook has to be right, right. Uh yeah, I just don't know how society is better off if we're all high to be. But you should be worried about making money. You're not making value judgments, you're not making ethical calls, right You you want to make money, you want to maximize profitability, and you want to buy

stuff that's cheap. I can take all the ethical questions and the ideological questions on by owning energy stocks and get way wealth here. Okay, that's the difference in orders. There's an ideology going on out there about how bad that industry is. And by the way, it's effectively portfolio managers being shamed so that they don't touch it. Okay.

I mean when we can look across the value por folios and find no energy holdings, Um, you know that the shaming has been tough because even the value people have given up on this, So we don't have to make that judgment call. We don't have to wonder how big they'll be, we don't have to wonder how profitable they could be. We can buy all those economics right now in the energy business and use it. People ask us often, you know, what does day to day trading

look like to you? I mean, Friday was a big up day in the oil and the stocks rolled down. Today's a down day and oil and the stocks are down. So what goes on day to day in these stocks, whether you know, tied to the oil price, it really hasn't correlated much. Any day over ninety is a drain. We're just getting fat and happy and everyone else is frustrating. So well on that, What is your kind of your central energy call here? Is it tied to the price

of oil per se or is it something else? Macro? Well, I mean the lack of supply. It's massive. And when I say massive, you know, let's just say in the interim, you know, parts of say Western Europe have slowed down because their energy crisis. That's that's probably likely, right, which means there's just subtle demand that's taken off, but again, supply can't grow. UM supply is continued to disappear when the Saudis are out there making the case that we

cannot sustain at these levels. You know, there's real problems that The big myth to so we're all aware, is that out of nowhere OPEC can snap their finger, ten million barrels can just show up. And that's false, right that that's western myth is what it is. And the reality is if we're going to be we're gonna be producing a lot more oil the United States and can it.

I've got to be a primary driver that. Just so we're all aware, all right, good stuff, Cold, really love getting your perspective there, coll Smeat President folio manager Smeat Capitol UH Management with a you know, a bullish call, which it's really been surprising how well, well, I guess it's not surprising, but it's just interesting to see how well UH Energy has done over the last several years.

It was so out of favor for so long, Peak oil and all that, but boys and how and how well they've done Bill and it's I mean, they they have UM produced incredible performance at a time when other funds just long stocks. Are getting crushed. Absolutely good stuff. G l c O the Global Commodity Price Dashboard on the Bloomberg Terminal, that's where you find all the commodity stuff,

energy metals, aggs, all that kind of good stuff. And that's typically where you're find you know, people like Mike mcglowan, Senior Commodity Strategies for Bloomberg Intelligence. But nope, he's not on the farm checking out the corn, you know, or the cotton and soybeans or any of that kind of stuff. He's in Vegas and he's at something called the web Crypto Conference. Mike, what are you doing in Vegas? And

what is the Web three Crypto Conference? Hey boy, I was invited to attend by a group called the Wolf of All Streets and I've been presenting on the macro and um talking to you, um and but yeah, I was out in the cornbell a couple about of months ago, bus the family and it was shocking how good the corn crop was this year and the parts I went

to Illinois. UM. But in terms of the rest of the space that you know, I look at, commodities is kind of like a futruty nail as the global macroeconomic tide recedes and that's what you're seen in in crude oil and things like that. It had its bounced, but I think it's just resuming and during bear market as we see stocks headlower. Two So what is where are the opportunities in the global commodity space? And and and folks, Mike mcgloan has been covered doing this for four decades.

He covers everything in the commodities, which is now included over the last decade U cryptocurrencies as as well, and he understands that as well, are better than anybody on Wall Street. So, Mike, when you talk to your institutional investor clients out there in the commodity space, where are they putting their money? Where they spending their time? Yeah, that's the key thing. Everybody's looking for a place to hide. And I the sense I get here and keep I

keep saying. And when I'm getting since I'm getting for a lot of the money managers I speak to is their selling equities on rallies and they're buying two you notes on dips and are buying on dips. And I think that's going to continue. At some point They're gonna make some good money. Even so from Jamie Timing yesterday. Now cryptos and that space, I'm sensing a decent amount of institutions are coming into the bigcoin space and looking

to buying the bitcoin space. And that's really showed because it's been the same price since June. But again, it's it's also been the fastest horse in the race, and it's going down. But that's my sense, and the key question is where it stops. The key thing I like to point out is there's been a lot of people calling for very bullish calls and crude all this year, and I think they're missing the macroeconomics and being tied.

And now I'm afraid that this is just going to excel rate, and particularly because we have the sledge hammer from the FED out there, and sledge hammer is just pounding harder and harder every day. When when do we see bitcoin move out of this range? I mean, it hasn't really since June. Um. Okay, it's been up a little to like twenty four thousand in August, and it's been down a bit too, you know, eighteen, occasionally dipping under that, but really it's been hovering around nineteen or

twenty thousand for months now. Why yeah, exactly, well and more Sollars just like in obvious what my sensence, what's happening with bitcoin. It's in that transition to becoming global digital collateral and trading more like gold and long bonds, and they're both down to so far this year. But it's showing that stabilization. The key thing I've been really watching as you saw what happened in theerium. It bought him at a thousand, it had the merge and went

to two thousand. Now it's back towards and I think that those are two things where we see what's looked five ten years for that's the rapidly advancing technology. It's much likely to more likely to appreciate, and I think people get that. And then you see the old like you like proof of steak, Well, I like it, Matt, But it has the income. Now you can get involved. Institutions are getting involved, and they can measure discounted cash flows and that's what's a really unique space for its

hearing though that didn't exist before. So it's getting the attention. But right now we are in a macroeconomic beer market. Cryptos are part of it. And this is the fact that bitcoin has been able to stabilize as we see a new low in the NASA today is showing that it's moving forward, looking to a better future. It's just right now, it's October. We all know the Feds tightening

and markets haven't gone down enough yet. Unfortunately, by the way, in crypto circles, Paul, this month is typically referred to as October October yeah, because average average returns to two thousand twenty one for bitcoin has been I'm sorry, two thousand fourteen has been about usually it's a game. Usually it's a game, all right. My important question where you're staying in Vegas at the win this is a resource. Yeah, it's it's rough, Diggs here, Yeah, you've got to play

to go. Is the wind the place to get the place? Now I'm a Blagio guy, but the wind is the setting the bar like like he always does. I mean you guys, I mean Mr Wynn is just the just the visionary in which is crazy term use since he's partially blind. But I thought that was secret or you're not supposed to admit or tell him that he's blinds Oh yeah, yeah, yeah, it's no big Oh. I thought it was a thing that he didn't like I've I've

always I've always talked him about it. But anyway, Uh so, Mike, you're at this crypto conference in in the midst of a bare global bear market. What is the conversation from crypto folks in Vegas this week? They're One key person I spoke to yesterday was a minor and adventure capital investor and he've got much more capitalist to the point, and his quote was, I really prefer bearer markets because you get rid of the silly speculation. And he's just

looking at to play more capital. Um so there's a lot of positive there from people like him. Partney says, Hey, I've got good investor returns and I've got a lot of good discounts here. But that's the main sense. It was the first day in a semi Holley associate. What really kicks it today? But it's an investor conference. It's certainly be enthusiasm from a few months ago was gone, which most people here for the institutions think, thank you. It's good to get rid of that. Oh I haven't

been there in years. You gotta go. I mean, so, Mike, how is Vegas? Is it? Is it hopping? Is it kind of like the old days. What's going on? Give us a read? It's my first time here, is really what? It's your first time ever in Las Vegas. I have to admit that, yes, my wife and I walked on the strip yesterday and we found a nice place to eat. But I'm not much of a gamble. I can lose a lot enough, a lot of much money in markets, even with an edge. So but it's it seems to

be hopping. It's happening. But the key thing is there's so much construction and building and so much going on here. It's just quite an amazing place. So it's cool, cool to be here for the first time from and the key thing there for you know, people who invest in, you know, these gaming companies, is the conference business. That is the kind of Yeah, I thought that that's what we're talking about, and I've I haven't been there in years,

but it's great to go for that purpose. You know, I don't gamble much either because I just end up losing money, but I do like to go to conferences or um, you know, I've been down there to a few track schools. Lamborghini has tracks schools down there, super fun, good stuff all right, Mike, Well, we'll let you get back to it. Let you get back to the tables. Mike McLoone senior commodity strategist for Bloomberg Intelligent out of Vegas at Crypto conference. But again, you think about they

have so much conference space out there. I mean, the Consumer Electronics Show in January, it's just a monster. You know, a couple hundred thousand people descend on the city. Win looks like the biggest. I mean I'm looking at the RV function, which shows you relative value of one company to others. So I put up Win Resorts um it's the biggest by market cap six and six point six billion of any of the American ones. Of course, they have Win Macau, which is another three point three billion.

And now that I hear, it's the place to say they're setting the bar. I want to go down there and get a get a suite, go out there. Yes, go out there, out to Vegas. But when you talk about the gaming companies, it's all about Asia Macau. I mean, that's McCaw's such. It dwarfs the strip on Vegas. So you think about what moves the needle for these gaming companies, it's for the majority of them, Las Vegas Sands wins

those big ones. It's been Macau because that is a huge gaming market for these companies and they put monstrous investments in there. So it's kind of fun to get some feedback from Mike mcgloan in Vegas. We have to get to Allison Williams. We've got Allison coming up and we'll talk to We always talked. We talked to pretty a lot on linked to talk to her, but we'll get more coming up. But I need to talk to Alice Williams because starting Friday, we'll get the big banks

reporting numbers. And that's big for a lot of reasons. A for the for the banks themselves and for their sheralders, but also for their their read on the overall economy. Alison Williams joints the senior Global Banks and Asset Manager analyst for Bloomberg Intelligence. So Alison, I wanted to start first with Credit Swiss that I guess the latest twist in this story is if they want to survive, if they want to implement their restructuring, they may need more capital.

Is that kind of the read? That is the read? And that's actually you know that is been the concern with the stock. I think every other day we get a we get another number that's being thrown out there. Um, you know, I think there was numbers to the multi billions. But but but the bottom line is that the amount of capital they need depends on you know, a what business, what businesses in their portfolio are they going to keep um and seek to fund um If they're selling businesses,

obviously that they can get capital without raising stock. They can get it from from other investors um. But then you know, what are the steps ahead and you know what money do they need to pay for those taps steps in terms of restructuring. And so that's why when you see sort of various numbers out there, any of these numbers could be correct. It really just depends on what we're going to hear from them on the So, Alison,

is are the so over? Like when I was a Credit Swiss we felt we could pitch any deal anywhere around the world and be really competitive. Are those days kind of over for this new Credit Swiss? So? I think, And that's not really where the challenge lies. I think in general, um, you know, across the firm they have to be feeling Um, you know some pressure as you know, clients as well as investors are looking at them with some uncertainty, but they really do you know, they have

a good m and a franchise. UM, equity underwriting and leverage lending. These are all areas that the bank is wrong on. But as we know that there's not that none of those deals are being done right now, aren't being done. Leverage lending is a book where we're is a business where we're seeing write downs. Um, just given the markets this year, so there's structural issues with credit Swiss and then the cyclical pressures I think are just

you know, really um bringing those issues to bear. So we're going to hear from the big banks JP Morgan on the fourteenth. What day is today? Today is the eleventh Friday? Okay, so we're gonna hear from JP Morgan on Friday, Wells Fargo as well, City Group as well, and then the following week Bank America, UM State some other states treat as some mother's truest you always think is not a great name. Um, what do we expect to hear? Yeah? And so yeah, so Friday, as you said,

we'll get JP Morgan, City Wells and Morgan Stanley. UM, you know, the big thing that we're watching is what happens with UM credit provisions. We think that credit is good right now, but the question is how are banks looking out into the future and factoring that into UM their lost provision. So it's more a view towards what the risks are head We saw UM headlines yesterday UM from JP Morgan's comments talking about our recession next year.

When the banks set these reserves, they look over the loan life so if they see increasing odds of a recession, if they see a recession looking tougher, we'll see it in those reserves, and so we're watching that number more for three risk UM. From a revenue perspective, the negative is investment banking fees, as we talked about wealth inesset management fees, mortgage fees, lots of fees going down. Fixed income trading will be the highlight in the investment bank.

But the revenue story is really not interest income that's going to come in very strong for the banks UM. There's potential upside relating to rates UM, but the question for the outlook what is how our loans growing. Again, that comes back to the economic risks and then what's happening with their cost of deposits? And on the cost side, Allison, when we talk costs, we usually talk people, Uh, you know better than anybody. Are we going to get some

big announcements from some of these banks. Is this an opportunity for them to really pair back their head count? I think that I think what we're going to see in the quarter is more on the compensation side of things. So, UM, when we look across banks, are our expectation is that they'll bring down comp um at a similar amount to the related revenue. So keep in mind that many of these banks are diversified UM. Morgan Stanley and Golbin Sachs are are sort of more focused on the capital market.

So we'll see it. UM. They're the most revenue down CALMP down UM. The issue is that some of the non compense station costs are going up. We have inflation broadly, UM. We have wages and businesses that are not related to capital markets that are impacted by inflation. UM. So net net investors are not going to like, uh some of the negative operating leverage that we're going to see at the banks. UM. So we think that there will be pressing questions in terms of what's coming in the final quarter.

Will compensation appruals be depressed further to help UM offset some of the lower revenues that we've just discussed, And how are they looking at investments and discretionaries spending? Will there be some pullback there as well? So, I mean in the in the deals, in the fees space, I can't remember the last time we had a juicy m N a trade other than Elon and Twitter. I can't remember the last time we had a really big juicy at all, the opposite of juicy, ye, So I mean, no,

it's definitely gone from feast to famine. Keeping keep in mind that, you know, to your point, you can't remember when we've seen some interesting transactions, you know, I p O s are are very scarce. Last year was a phenomenal year, record m and a record equity fees, and we came into the year UM. You know, sort of we were talking about compensation when we came into this year.

UM the pressure was extreme because not just it's not just investment banks right like hedge funds, other people are looking to hire UM the staff, so and the competition from technology also raising UM sort of the cost to compete. Now we've had the markets are sort of uh pulled back, So that's going to pull back some of the pay pressure. Also on the tech side of things, UM, as their cost of capital goes up with these tupper markets, they

have less access to capital. That also UM has a little bit of a relief aspect to their cost base. All right, good stuff, Allison, thank you so much as always for joining us. We know you're gonna have a busy, busy Friday coming up, Alison Williams. She covers all the banks on a global basis for Bloomberg Intelligence. Alright. One of the many many tickers Met Miller has taught me over the years is one is m O V movers.

It gives you the big movers. You type in SMP next and it gives you, you know, what are the big gainers? What are the big losers of today? The losers today number one, number two casino stocks win Las Vegas stands. What's going on? And we just talked to Mike mc loan. He's at Vegas. He said this strip was hopping. Conferences are back, So we said, let's get Brian egger On here. He does all this kind of stuff ran Nigger, senior gaming and lodging analyst. Also the

cruise lines and all the fun stuff. Guy hasn't worked a day in his life. Let me tell you he's a Bloomberg intelligence Brian, what's going on with the casino sucks? I thought like China's letting people go gamble away their livelihoods. Vegas has hopping. What's going on? Yeah, you're right, Paul,

I mean China really is the issue now. On the one hand, to your point, we do have some good news on the travel from We've gotten resumption of China tour groups coming up, as well as the issuance of online or e visas, which had helped travel volumes going to next year. But at least a totally the feedback is the Golden Week holiday was weaker than expected from a gaming volume perspective, So we've still got a MACCAU market with a lot of pressures after v I P

Junk of credit was basically banned West December. I think those travel openings which I mentioned are good news going forward, but you know, I sim it's going to take time for those to pan out. The market is still quite weak compared to pre pandemic levels. Who do you want to own? I mean I was looking at when before just because um, we were talking about how great it would be to stay at one of their suites, and then I ran the RV function relative value to see

who's bigger. Um, I look at competition like Las Vegas, Sands like Boyd, like Pen like Caesar's, which is the most desirable of the group. So the way I think about this is if you if you want to avoid fundamental exposure to Macao because you know that market likely to be down at least this year versus pre pandemic levels, then you know, really of the companies in North America, UM, you know, Sands and Win arguably the most exposed. You know,

falled by MGM. Um. You know right now it is true that domestic but doesn't Win have their Macau business broken out to Win Macau. It's still part of the consolidated company, right, So you know when as a when resorts as a company still has through its Macau subsidiaries, substantial exposure to Macau, and now it's Sands out of Vegas, it's really all the cow in Singapore. So if you want it to be more domestically exposed among the bigger destinations.

You know, companies like MGM and Caesar's don't have that McCaw exposure. And then of course all the regional companies right now in North American gaming at least compared to pre prodemic levels is by most standards back, which is good news. But MACAU has the lingering effects of not only the pandemic, but you know, clamp down on junk

at credit and other pressures. Yeah. If I look at I always look at the comp screen, as you know, right, and um total return over the last five years for Las Vegas sands down thirty for when down fifty five. But if you look at you know, BOYD is up eighty seven, Caesar's up thirty five, Pen up four mg of five, so everybody else is killing it. Ye. Hey, Brian, you know the only time I've I've been to Vegas

a lot. I love Vegas, but basically every time I go to Vegas it's because of a conference, you know, the c E S conference, the n a B, the National Association Broadcasters, or any other conference I can glom onto for for that matter, what is the concert business in Vegas? Now? It was such a driver is such a driver is it back the pre pandemic. It's un back to where it was, which would be total room nights for a company like MGM, but it's it's coming back,

and the bookings have been there. Of course, the question is if you have meeting planners and trade associations and businesses begin to experience some waiting confidence because of a shaker economy, that could certainly effect the tone of bookings. But based on the lag to seat back we have and we're due for an update discerning season, the bookings are winding up fairly well. I mean, ce yes, they're gonna have a couple hundred thousand people there in January,

so I don't know. But all right, let's switch over to cruises because I think Matt's thinking about his next vacation and I think he should do a cruise. Take the whole family, go down to you know, the Caribbean, and you know, see see that part of the world.

How's the cruise business, Brian? So the Chris business from the perspective of bookings, I mean, the good news is the fleets are back in operation, um after that long pandemic pause, and uh, you know right now they're not only the fleets back, but after a lot of the pandemic protocols are lifted, bookings have improved. The question of course is whether or not profitability returns at a fast

enough pace. So the company is to continue to manage liquidity and to manage their debt obligations, which which they have. You know, we we were just at an investor media a couple of days ago for Norwegian cruise Lines and they expect to see record revenue yields and ibadad next year. You know, so there's some good news in the out there.

You know, the recent feedback from Carnival was a little bit more mixed, I thought in terms of the booking space, but you know, there's you know, there's obviously concern what happens in a slowing on To me, I think the good news at least is that the chips are back in operation and is pandemic protocols get lifted, bookings have revived, so discretion or income, which is kind of how your companies make their bread and butter bride, whether it's a

casino or a cruise line or a hotel. In a recession, how sticky is that spending or is that one of the first things that go I pull back on my vacations. My cruise is my vagus, you know kind of trip. So, I mean, historically, the cruise industry across the multiple decades has performed well in economic downturns. This one is more complex because you've got potentially rising inflation, You've got the

lingering effects of how consumers behave after the pandemic. But you know, it depends, I think really on the severity in the hell effects overall consumer discretionary income, I mean gaming. I think it really depends on the part of gaming

that we're talking about. Those regional markets have to date held up really well despite higher gas prices and inflation, so you know, it's some of the businesses are more cyclical than others, the hotels, but I think a lot of it depends on whether or not the consumer holds up as well as it has so far. And you're also just on the cruise ships. They stopped by the gas tank there. It's a lot to fill up a

cruise ship, isn't it getting less and less? Right? Yeah, I guess he would have beens been to help, and obviously any any back off in bunker fuel prices would be bunker helpful as much as they help the bunker fuel so as much as they do hedge. You know, it's a it's another cost pressure that has certainly you know, weight on the companies. Can't put bunker fuel on my truck, No, I don't think so it's got to be at least octane doesn't Okay, which is the best. It's running about

four dollars and fifty cents. That's the credit price near me. Just wait, but you gotta go electric. Maybe we'll get electric cruise ships at some point. Brian Edgar, Senior Gaming and Lodging ANALYSTEE covers the you know the cruises. I mean again, the guy has not worked a day in his life. You should see the trips he goes on. Supposedly for research intelligence reasons, but it's a scam. But he does that. He's been doing it for decades on Wall Street. One of the time I know he's he's

gamed it. He's not a dumb guy. He went to Wharton undergrad. You never Chicago for an NBA, so he knows what he's up. And he's been doing this on Wall Street four decades at DLJ Credit, Swiss, all great shops before from him to Bloomberg Intelligence. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews with Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller three.

Pet On Ball Sweeney I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio