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Angel Zino with the CFII Research on Technology. Angel Paul's been preparing all morning smart questions. Let me ask you the question, do we understand the depreciation trail of all this capex? Is it six months or is it six years?
So, Tom, and thanks for having me.
So, I think it depends right on the actual asset we're talking about, and realistically it could be anywhere from three to fifteen years in many respects. But on average, when you're depreciating most of these assets, you're talking about five and a half six years is the average you know, depreciation depreciating time for these assets, you know, these servers and what have you, Which is you know, where most
of the capex dollars go into. Obviously, if we start talking about the land and what have you, you're you're looking closer to fifteen year time horizon. But when you start thinking about you know, some of the concerns out there about depreciation and you know whether or not we're probably probably you know, properly accounting for earnings and what
have you. I'd say, at this point in time, you know, things look pretty good in this sense that you know, all the capex that's been spent, you can go back to, you know, these legacy type of GPUs that are out there. Pricing still remains very firm. So from me a depreciation perspective, it's not as if, you know, we're inflating the earnings at least at this point.
In time, Angela, it appears that the market's trying to differentiate between who can generate better returns on all these huge capital spending investments. And what did you take away from last night? Because I am seeing Meta shares trading down pretty sharply here this morning, what does that tell you about Meta's strategy?
Yeah, I think that at.
Least for today and the street has it right, I mean, going into the print, I'd say the most confidence for from us, and I think from the street was on Alphabet at least four Q one.
And again, I mean we.
Saw some great results out of Alphabet. You saw a doubling of the backlog. You kind of saw it. You know, they're getting into the actual hardware business in terms of selling.
Those those TPUs.
But the cat that you can see the visibility in terms of the cat that spend and where that's going in terms of the backlog and that revenue trajectory of the next couple of years. With Meta, it is a little bit different, right. You got the they tweak the number higher, which I don't think is necessarily an issue, you know, relatively in line. I mean, you're talking about one hundred and forty five billion at the high end
of ten billion. But that being said, I think you know more importantly is Zuckenberg had a chance, I think on miss earnings call to really tell.
A better story about the AI.
Strategy they just announced and you sparked this month, they're going to roll that out, ramp it up. What kind of products do they have on the horizon as you get into the second half of here into twenty twenty seven, How is that AI spend going to be monetized?
And they just didn't tell the story.
It doesn't necessarily mean that there's not a story, but the problem is that investors don't know what the story is at this point in time where were at least can place a trajectory in terms of the spend. I think the good thing for MATA, at least at this point in time is when you look at the growth rate thirty three percent of this quarter, you know another
twenty five percent year of year next quarter. At least for the time being, the core business remains extremely strong and they are leveraging AI in that core business.
Angela, The CAPEX numbers are just extraordinary. That for the big four companies there that reported last night, Amazon, Microsoft, Google, and Facebook seven hundred and twenty five billion dollars in CAPEX just in twenty twenty six alone. We've never seen those kinds of numbers. Really, where are we in the investment cycle? Is this the peak investment in AI? Or is there more to come?
I mean, based on what we heard last night, it looks like there's there's more to come, right. I mean, Alphabet basically came out and said, you know, twenty twenty seven is going to be much higher than twenty twenty six.
If you're Microsoft, then you look at that backlog.
And you like, you kind of just heard from what they've had to say, you would think that they're going to provide a higher CAPEX number as well.
Maybe the unknown at this point in time is meta.
My guess, just knowing how Zuckerberg works, he's not going to pull back on the capex either, and potentially.
Could see a deceleration, but you know.
He's not given up, and so I gotta I gotta go Apple. They're like the non capex, aren't they?
Yeah? Yeah, I mean, and it's worked in their favor.
You know, the capital intensity level about three percent and has been over the last decade. And you look at how the revenue trajectory is looking now, I mean, it's it's very strong.
China is finally working for them.
Really, the story is going to be AI at the Developer's conference and whether or not they get foldables right this fall. If they get those two stories right, you're talking of a very good revenue trajectory going into twenty twenty seven with upside potential in the areas life services. And again that stuff isn't necessarily baked into the estimates at this point in time. If you get that, we think there's some nice upside on both the free cash flow and earning side.
Great prive. Angela Angela Zino, thank you so much for ce if right now, futures up twenty two. Paul and I are watching oil. It continues to send a one fourteen handle down twelve dollars from the peak one six jan Murray with the CIO, NFJA investments in studio with this, which is always a good thing. Do you overweight meg seven, say boy, I'm glad I own it at a lower price, or do you I hate this word rebalance and rebalance out of Meta, rebalance out of Amazon.
You know the mag seven. I think it all comes down to what's going on with Capex. Earnings are pretty good, but it's really about Capex, and I would delineate Capex. I'll answer your question, but I'll delineate it in two ways. You've got maintenance capecks. Everyone has to spend money, right, They got to spend money on something. But then you have growth Capex. Okay, this is AI cappex. If you can textualize this, Okay, Capex pre AI for these companies
was around ten to fifteen percent of revenue. It's not double that, Okay, thirty percent of their revenue is going to Capex as a percentage. Okay, this is the largest capex cycle we've seen in modern history. This is equivalent to what happened in the eighteen hundreds of the railroad, so.
Like when the Cowboys rebuilt. Like when the Cowboys rebuilt.
So the way I would answer this is, I think you have to be there because this is the biggest infrastructure build out we've ever seen in modern history.
And so it's very unique.
I love when he comes in. I know, these phrases are great. It is.
It really isn't. In fact, I'll take it a step further. Let's contextualize this as a percentage of GDP.
It's it's roughly seven.
Hundred billion dollars with a b okay, that's two or three percent of GDP. So you think about this, You're like, why are the earnings going crazy on the semi stocks?
Why are they going crazy on the memory stocks? You have massive American companies there for the first time ever, are really putting their balance sheets to work in growth form, and they're spending money, and so it's unique, and I think you got to be therefore, and a lot of the multiples aren't even not high on the big tech names, to be honest.
So you're so just to put a ball on this one. You're in this AI trade across the technology substance. I mean you you have to have to be.
You have to be.
And it's touching every part of the economy. Yes, so you know whether it's industrials, it's going to trickle into financials it already is. It's going to touch every component. So I think you have to be there. I think the real question, the big, big, big question. We know what the spend is, but we don't know what the return is.
When I look at.
Earnings today, that's reflecting.
It's too complicated for me. Okay, I'm getting over how bad the Mets are. They're worse than the Red sixe. Those are baseball team John up here in the Northeast. Stay with us. More from Bloomberg Surveillance coming up after this.
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Jonathan Gowob is with US Chief Factulty Strategies. Seaport advises, I mean reading your note and the way you write it, Meg seven. Is this island of prosperity. Is it MAG seven and everything else catches up? Or is it MEG seven alone?
I actually think it's AI Semiconductors is alone and the rest of the market is something different. If you look at the hyper scalers or the you know what have you, their earnings growth looks like about two percent this quarter, and the semiconductors right now predicted ninety nine percent year over year growth and is expected to stay something close to that all year long. So there's there's a lot of haves and have nots in that group.
Just broadly defined for this market. Here, we're kind of getting into the teeth of the earning season, really bit busy week this week. What have you seen from earnings and is the earnings picture for a corporate America enough to support this market?
Do you think?
Yeah?
I mean, if if you take a look year to date, the earnings are up and the PE is down. So when people see a stock market that's that's doing okay, they just assume, well, stocks are more expensive. But if your earnings are rising faster than your price is going up, stocks are on sale. And I think that the narrative doesn't capture.
That what's screening well for you guys these days. I mean it's easy for us to just kind of pour into the text dot trade because that seems to be working recently. How Else, what's the conversation you're having with your clients these days?
So you almost have to look at the market in little pocket. So let's take a look at we're seeing this quarter. Financials are having a terrific earning story, and there's a couple of parts of the story.
The one is that.
In the lead up to the war, and it was really in the lead up rather than during the war, the amount of repositioning portfolios was high and trading profits were really strong across the board. And normally when that happens, you also see that bankstop lending money and companies are struggling, and they weren't. So the lending activity was fine, the
faults were down, and trading was higher. However, all the trading happened in February, and it's been quiet in March and April, which means that the really great first quarter probably doesn't carry forward in that space.
I look at where we are and it's simple, do I buy the growthiness, do I do nothing, or do I buy value? Which is it?
Oh, you have to buy the you have to buy the growthiness. If you look at the AI related especially the semiconductions. But if you look at the AI related companies, they're trading at a market multiple of twenty and their expected growth in the next twelve months is sixty percent.
I allowed to say you have a favorite? Do you have a single best idea? Why don't I?
You know, if you look at I mean, I'll talk about you know, if I look at the names, the the Evogos, the in Vidias, the A M d s, the difference between their growth rate and their valuation is just shocking.
Jonathan Dollid, Chief Equity Strategists Seaport Advisors Joints is here in our Bloomberg Interactive Brokers Studio FED chairman J. Poum. He's sticking around, what do you make of that?
You know, I'm not really sure it matters that much. We've done a bunch of work on what stocks care about. They care about credit and it spreads because that really represents a downside tail risk. They care and they don't really care that much about the short read, even though that's what everybody obsesses on and.
What's it mean to thank you?
Thank you, thank you?
And you know, Tom, you were talking about before. The credit spread is lower today than it was before the war. The vis now is lower than it was before the war. The cost of hedging downside risk is lower than it was before the war. And stocks have to be able.
Let's do gallup charm here, folks on the other day, and folks, this is all I used Google Gemini. I used to perplexity. You don't I use Google Gemini religiously here with the Bloomberg ask me as well, Okay, John gottim I went back and looked at like six wars, and in the middle of the war, the stock market starts and always goes up because of the stimulus and just you know, the energy that you get out of the tragedy of a word, that's what we're living right now.
I mean, there's stimulus out there. The corporations are doing business and they're creating revenue, and what I believe is a five percent nominal GDB space.
Just there's something first of if you look at again, getting back to corporate profits right now, the market's expecting eight percent profits this year in the SMP, which is a crazy number before the war was fourteen and a half. Profit growth went up by three and a half. No, the big delta on that, The big difference is that energy profits were expected to go up. But what we used to think is when energy profits go up, you're going to crush the consumer, You're going to crush companies,
and that has not happened. There's been no down downward pressure on corporate youre talking about corporate spending patterns in today's GDP, You're not seeing that. And until you do, things are fine.
This is key. Alexis, I think mentioned this claims, Yeah, eighty nine thousand, YEP.
Consensus was, you know, two hundred and twelve thousand. So came in much better there, Jonathan. We saw late last year kind of a rotation maybe out of some of those high growth tech names into some maybe some more value, some small and mid cap stocks. But boy, there's tech stocks that come ripping back here. So how has that rotation has that been? Was that just a short term trade or is that something that can play out?
I think the rotation is a bit misunderstood. So if you think things are going to go bad, what you do is you sell things that are more cyclical and you go into defensive stocks. That is not what happened. What this really was was a risk reduction trade in the hedge fund community. So let's say your overweight stock A and your underway stock B. The war happens, and they don't pull out of the market. They just take
all their bed sizes down and they readjust them. And when you do their overweights, all of a sudden, they're selling them. Their underrates are buying. And you see this like wicked rotation. And so tech had been out of favor at the beginning of the year when you had this software sell up, so when they readjust it snaps back.
But it's really more a technical thing.
What's retail doing and I don't mean retail like robin Hood and Meme stocks in that we're just adding to our four rowin case, is that the behavior you see.
I'm not seeing a lot of I'm not seeing a lot of pressure. I mean, there there is a Meme basket of companies and upmarket like this that are doing really well. Last year was a great year for for those kind of companies. But there's there's really few signs that are that are telling that individual investor to be cautious.
What's screening wall for you guys these days? Is there a certain industries, Is there a certain factor that you guys are focusing on these days.
Yeah, there's there's a number of areas. We do a lot of work on this idea where where are the company fundamentals breaking down from the stock price action. And some of these are short ideas, some of these are long ideas. I'll give you an example restaurants, leisure, and and and and gaming. The fundamentals have largely deteriorated. And there's a whole bunch of stocks that are doing really well.
And so when we're.
Talking to the hedge found community, we're saying, these are companies the the the businesses are are are are rolling over, the stocks are moving up to profits. In that in the energy space, there's a whole bunch of companies that the earnings for the group look really well. So there's a lot of positive price action. And there's individual names where the fundamentals are not keeping up.
So there are disruptions.
One group that in particular, it's been a bloodbath in software and the good and bad are being taken down together. There's probably more opportunity on individual names in software than any other group in the market.
I was looking at this John, and what I don't understand. I love the enthusiasm, and of course it's Seaport Advisors. The note is clarity. Look to Seaport Advisors, folks for the gallob research. Not he does it daily. It's really quite something that he calculates out where we are. But the X axis your enthusiasm, like, do you have a clarity on August? Do you have a clarity on your end? Can dare I say you model into two thousand twenty seven?
What's what's been happening?
Tom?
I mean, you guys know this is that analysts are always an enthusiastic bunch. They start with their smiths do I, and over time they normally come down the last three years tech company, which which normally the estimates would fall steadily all year long because enthusiasm. It's reality, the numbers are going higher and higher and higher, and it's really broad and this is not something that I've seen in
my career. And so the when when analysts underestimate, and this is about as optimistic group as you have, that that usually means that there's there's a lot more upside left in the mid.
Paul helped me out here. Alex Reid working in the dark and dark and inferious Bloomberg Intelligence tech Space, Microsoft Capex Boost could be bond sale precursor. Yep, just like we're we're seeing with Meta this morning. Are bond issuances by meg seven's Are they good for their stocks? You know?
Seaport Global is we're talking for the biggest private credit shopping in the world. And I talk a lot to our our credit clients. They are really concerned on fifteen year bonds, on data centers and things like that. I'm not talking with the job I'm talking about our client base. Because we have so little visibility and so much capex. We are going to see the users of this, not the chip makers, but the people who build data centers, like roughly zero profits this quarter, and those profits are
going to be under pressure for several years. I know you were talking about this on an earlier slot because they haven't even begun to depreciate a lot of the data center expenditures.
Okay, I gotta leave it there. Going on, Are you based in New York?
I'm based in New York.
I can come by any times. Jean Gollib He's on his way to a teacher's conference right now. John Gollib with us, folks with Seaport Advisors. Stay with us. More from Bloomberg Surveillance coming up after this.
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You get lucky. That's what happens in this business. He was booked ages ago and then we said, well, we can't talk to Professor Hers at the University of Houston unless we blow up opek boom. There it was yesterday with us in the studio, folks. And this is the heritage of surveillance. Ed Morris at City Group and now at Hartree, Jeff Curry out of Chicago, and Golden Sachs, Francisco Blanche and all the academics across this nation. This is the foundational guy out of Yale University and all
of us work at the University of Houston. Ed Hers joins this morning. We're so honored to have you here. Were you surprised to see Abu Dhabi and Dubai and the other three tribes of the UA, the Trucial States. Were you surprised to see them walk away from OPEK, No, not at all.
They've been kind of leading the band of cheaters within OPEC, and as former oil minister Alonaomi of Saudi Arabia said.
We cheat. Now that's what cartel behavior is all about.
Right, Okay, that's cartel behavior. Is this nineteen eighty six? Where is he a plunge in it? Or is it bigger than that where we see a plunge in price X the war and then they can't rebuild the cartel.
That's a great question.
And we're not going to know until we find out exactly how much damage has been done to the oil production facilities above the blockade. We know Kuwait to shut in, We know that the Saudi facilities have been hit. Although they're able to get a lot of oil out via the pipeline. You know, the Emirates is having issues getting to market. If they're able to restore production, this is not going to be a big event for them. And some countries abide by the cartel rules, some don't. They
pay attention. One of the great things with the Saudis is the swing producers. They can actually cut production by a million barrels a day and because of the price elasticity of demand for crude oil, make more money.
Is there a scenario or what is the scenario where we get the Straight where it was before the war effectively open, because without it, it seems like this is where we are higher for longer.
This is the mystery. I mean, we know the Trump administration ignored the fact that Iran has been telling us for decades they would close this straight. This is astonishing. We've written about it, We begged people to pay attention to it. Gave a talk at the na Will War College, the Staff College about this fifteen twenty years ago. And so this was job one in any kind of Middle East war, make sure the Strait remains open. And you know, now we're in trouble. We've also got Ukraine helping knock
down the Russian production and exports. So maybe five to seven million barrel day are currently off the market. In total, the releases from the SPRS, the four hundred plus million that the International Energy Agency is releasing, of which one hundred and seventy two was ours, that's going to run out over the summer. And that's what I'm thinking we're seeing right now with the uptick in WTI. The June
contract started trading this week. That's why we're seeing the traders looking at the physical market in June and seeing it to be much tighter.
Our good friends Dan in your neck of the woods, in the oil patch, they're not necessarily doing what they used to do, which is ramp up production and take advantage to these higher prices. Why is that and should we expect that to?
We got a couple of things going on. One is a lot of them entered into swaps before President Trump took office and oil was about at eighty dollars a barrel in early January of twenty five. The swaps or a double edged because swap at seventy five a swap at eighty, well, that means you don't get to participate in the upside. In two thousand and eight, when the price of oil went to one hundred and forty seven dollars a barrel, Anna Darko came within minutes of having
to file bankruptcy. They were only getting one twenty three at the net in their basin.
At the Derby, at the Derby, at the shop whatever in Houston, the shop club in Houston. The executive is that you bounce off you and read your every word. What are they doing or thinking? Now? Are they drill, baby drill? Or are they just hunkering down trying to figure out what the Texans do?
They're kind of whistling past the graveyard right now if they didn't go into swaps and essentially miss this upside. They are looking to work over wells. They are looking to do more gas because that's where the demand is right now. But gas, I don't know where it is today. It's been less than three dollars in mcf for most of the past month. That's where the future is. The transition is going to continue, and gas is the stepping stone to get there.
So do we care or to what extent do we care about what OPEK is doing these days because we are, as you mentioned for the first time, in net exporter work quasi energy independent. I guess what do we think about OPEC Now?
It's an open market. Obviously the producer in Texas is selling to the global market. We're selling about four and a half million barrels a day of the light suite that comes out of the Permian basin. For example, we're self sufficient to the extent that we look at North America altogether. We get about four million barrels a day from our close friends and allies in Canada.
That's what makes up the difference.
We imported in twenty five about six point two million barrels a day, of which only four hundred and ninety thousand barrels a day came from.
I think the Canada stories wind a person more things than here. It's too important, Professors, As we look at this Texas leeds and renewables, yep, talk to the Republican Party about how Texas is leading in renewables. But Republicans don't like renewables and climate stuff.
Yeah, So take a look at the ERCOT dot com website. This is the Electric Reliability Council of Texas. During the day, and you're going to see more than fifty percent of the electricity being generated by solar and wind batteries have gone from essentially nothing three years ago to now providing over eighteen gigawatts of short duration a couple of hours, just enough to get us through the transition periods in the morning and in the evenings. This is fantastic growth.
Is the grid perfectly safe from a freeze like we had in twenty one?
Not yet.
There's not enough dispatchable generation on the grid to cover the demand in Texas.
Was Rebecca phil Cone of Landman? Was she in your class? Do you watch Landman?
I have watched a couple of episodes.
Is it real?
The real world? And I'm a partner in oil company is much worse than Landmark in what way? There is no intrigue with with with murders and shooting and bombings and things blowing up. Nobody wants to do that, but the skullduggery. Think back to the TV show Dallas and JR.
Ewing. Now we're talking, you can go What was it.
Like as a kid reading Jurgen's The Prize? Everybody had it? Very few read it all. We walked around campus. We have the Prize, It's eight hundred pages. What was that likes?
It's a great history, you know, in terms of the basic economics.
Maybe maybe not.
As as detailed as it could be. You know, I was in school in the seventies with guys that were this administration, that administration. We were all concerned about shortfalls and oil transitioning.
We were running out of natural gas. This is prefracking.
Keep in mind, hydraulic fracturing gives about one hundred and fifty million dollars of consumer surplus to the American public every year. This is generated one point five two trillion dollars in the last fifteen years.
Yep, this has been wonderful. Can you come back again? Are you in New York like every five years or is.
It like well more frequently? Have family up parents.
I mean Houston is a Gulf street. I mean University of Houston. They yeah, everyone does.
Basketball team is back, baby, They're back. They're good every year.
Now the Red Sox, I think play the Astros. It's going to be ugly football.
I think we're down to our double A club now with all the entries we've had.
Professor, thanks so much. He is iconic. His name is Ed Harrier's hi rs of the University Houston. That folks was a clinic. Stay with us. More from Bloomberg Surveillance coming up after this.
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The Mets are so bad they don't let anybody leave the office.
Let's not go there.
Sofia Dross and the timing your folks, I can't convey how lucky I am this morning, having sophia drosis with all of our international economics skill out of ann Urburt University of Michigan. What is the mood like, like, do you have like Mets cupcakes at point seven to or are you forced to go to games since no one will go?
So good morning and thanks for having me. I would say that it's been a disappointing start to the season, but you know, I'm an optimist.
So it's still April.
That sounds like you went to a compliances.
It's still April.
There's a lot of talent on the team, and I think it's just a matter of time.
Robinstein's not doing this at Carlisle. He's not forcing people to go to the Orioles at kimd Well.
No one has to force me. I like going to Cityfield. I like supporting the team, and I hope I give them some good vibes. So maybe this presence here in our discussion will give them the good juju.
That thing I mean, good morning to stee Cole all Ero point seven two Sophiodorus. This is legendary. I'm looking at currency dynamics. The Japanese said enough this morning, we went in four big figures, stronger yen. First thing I did. I looked at generic ten year, generic twenty year. Japan is busting out lower price, higher yields within the fiction of their economic experiment of twenty years. Should our listeners and viewers in America study and be concerned about the fragilities of Japan.
Well, Japan, I think is caught in a very difficult situation right now. Certainly they've battled deflation for decades, finally exiting deflation and at a time when the economy was garnering momentum.
Now we have.
This oil price shock, which is a big deal for Japan, which is an oil importer, and I think that the currency weakness in this context is a lot more pernicious.
So it was really interesting to me to see, you know, the final warning come last night, the price action come this morning, and when I take a step back and I think about it, you know, Historically, some people think that Japanese authorities are tolerant of currency weakness because they're an export driven economy, but they also import raw materials, and so we're in an inflationary environment globally, we're having a weak currency is not really beneficial.
What do you make of what appears to be just judging by the redder for the last twelve to twenty four hours, higher energy for longer. I don't see either side backing down here. So the straight looks closed that's reflected in the energy markets. Has that impacted your GDP outlooks, your views?
Well, we're certainly keeping an eye on it, and I do believe that it creates some downside risks for consumption. Consumption's coming off of strong levels of the last few years. We saw the GDP data this morning, a sequential moderation in consumption, and if energy prices and gasoline prices stay elevated, some downside risks to the second quarter as well.
Well, I'll get another one in here. I got any questions fun.
We also gott some consumer data today, the consumer spending, consumer income, spendings above the level of income here, so the consumer seems to be still out there spending, and I guess one of things we've learned is you can really shouldn't underestimate the strength of the US consumer out there.
How do you think about the consumer, Well, the consumer has been surprisingly resilient, and it is at odds with the consumer confidence data that we're seeing. So people are very nervous, say from the Great University of Michigan NC double a National champs, let me squeeze that in so I.
Have a shortstop for the METS.
So with the consumer, the consumer, I think the income gains over the last few years, and also there's a lot of inertia with consumption. People are kind of reluctant to pull back unless they absolutely need to. We are seeing some of those signs of strain in lower income consumers. Higher income consumers can continue to spend, and we'll need to see what happens over the next couple of quarters, because, as you said, the oil price shock is pretty meaningful.
Extraordinary day of conversations here across America, around the world, Sophia Drosis with US point as seven to two is just an extraordinary career wrapped around international economics and foreign exchange, all sorts of ways to go you're including your past work, Morgan Stanley, What in God's name is the chief dealer at the New York Fed Are you the one that orders pizza? Oh?
If it were only.
Us a snapshot into that, Yeah sure, all this mystery is yeah sure, and that you're rope on like seventh eighth floor. And what do you do as a chief dealer?
Yeah?
Well, as a chief dealer at the Federal Reserve, you're responsible for overseeing the transactions, particularly the foreign currency interventions. And so I back in the day before we all had Bloomberg on our phones, I would have like an FX alert beeper and it would tell me at any given moment twenty four to seven where currencies were trading.
So typically we would have some insight into maybe one of our G seven partners would like to intervene and would like the support of the United States or would like US monetary authorities to execute the transaction on their behalf.
So that was me.
I would be on the other side of these trades, either on the phone or electronically executing.
I got eight ways to go with that, beautiful explanations, Sophia. Right now, the United airb Emirates is walking away from OPEC, the Chrucial states with all the history clearly looking to America and they want some form of swap line because they're broken because of the war. Explain like that conversation, if it's happening.
Yeah, So traditionally the swap lines happened between the central banks, and it's an opportunity for other central banks to ask the FED to provide them with dollar reserves dollar currency in exchange for the home currency of the other country. And typically we see this during times of stress. So we saw the expansion of the swap lines that the FED has during any kind of market crisis, but very
recently during the pandemic. And also I think the FED does have these ongoing swap lines and cooperations with other major central banks, but it is one way to get dollar liquidity. What was interesting about the UAE is that they had the conversation with the US Treasury, and so that typically isn't the standard protocol. Usually it is between central banks, but it shows that on a contingency basis, at least that's what the UAE and the US Treasury
have said. It's a contingency to think about ensuring that they have meaningful dollar liquidity should they need it.
So Washington Nationals they did okay against some mett yesterday. I think probably you're going this afternoon one, two, ten pm. I'm sure you're sitting with mister Cohen to enjoy further slaughter. Is you gaze upon the game, He's going to turn to you and say, what's your unknown unknown? Right now? What is sophia drosis? Is unknown? Unknown?
There's a lot actually, Well, the first thing is that we just don't have visibility on how this conflict in Aran is going to end, either in terms of like the timeframe or the type of additional dislocation uh it could create in markets. I'm also very you know, concerned about what could be happening on the cyberfront. Every day
I wake up there are some very alarming headlines. So I think that these are a lot of things that could be on the radar, could be affecting markets, and it's just really hard to get a lot of visibility.
Right, Alexis is going to Europe is going to be a one to twenty euro or a one thirteen year.
Oh, Alexis, I hope that you go to our motherland, Greece.
So I race it with your presence.
Yeah.
Actually, and my motherland is Cyprus.
Oh Greek nuts.
Oh yeah, the last we vote for each other in the Eurovision content.
Absolutely, I love it.
I got thirty seconds the Greek Matt Weigler's written brilliantly about this. The Greek recovery is the untold story Europe. Oh.
Absolutely, it is like Poland.
Now.
I would say that they were forced.
To make some tough choices, but the choices they made have really improved the productivity of the economy.
And yes, I had an idea. We could do a remote from Athos or some island there Santorini, bring along Sophia and Alexis. It'll be like a Greek moment and we could take Steve Cohen's golf stream.
Nice.
It's perfect, It's perfect.
Sophia Drosis, thank you so much for joining us the studio. Seriously, to have her any here with the Japanese job owning today was really important.
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