This is the Bloomberg Surveillance Podcast.
I'm Tom Keane, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best an economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business App.
With us around the table and please to say Jack Caffrey, Equity portfolio manager at JP Morgan Asset Management, Mornajack.
Good morning.
What do we need to see to get this rally to broaden out it's next year?
Well, I think let's break this down into three steps, if you will. The holiday rally is certainly very much in force. As Tom just mentioned, It's November has been
a really good year. I think against the context of what most people would have been putting forth as an idea of what to expect with the end of say tex selling, with the return of the corporate bid, with earnings actually now being positive year on ear you have the ingredients of the next month two three of things being able to I think move a bit higher, you know, turning to what gets you a broader market rather than an extraordinarily narrow market, I think is a I hate
to say, we stop kicking the can down the road in terms of what a continuing resolution turns into. How do we actually get some clarity on what federal spending might look like for a long enough time that we can then just worry about the election rather than how we're going to finance.
The election and our government.
And then I do think you're going to have a continued tug of war between the earnings outlook and the multiple where what happens in bond markets becomes really important.
It's interesting that the first thing that you pointed to was the political calendar in twenty twenty four. Is it that important for you?
Equity markets want to find something to worry about. And to the extent that most economics students chose to away from political science for a reason. We wanted to pretend we understood the math rather than understanding the psychology. And what we come back to and and and where you know, I actually have a degree, quote a formerly in political economy, and at that point in time, like why, I'm like, well, I kind of think government writes the rules under which
the economy operates. So it would help me to understand who's writing those rules and what they're going to set them up to be. So, you know, paying for all of it kind of matters.
Jack, What do people do with that have single digit returns this year? You've been doing this for ages, and there's those certain years where we're all behind.
How do you catch up?
I'm trying to figure that out because I'm behind this year.
Answer. We want an answer now?
Oh okay, well I should have bought a lot more in Nvidia would have been an important thing, but it doesn't really fit in a divid and growth mandate. I think ultimately it comes back to that question of broadening A and B. I think, you know, if you look at a strategy, earnings are supposed to be down this year, they want that being up. Dividends are up mid single digits. You know, you can find portfolios of stock set of dividends that are up low double digit.
Do you fault big tech because they don't pay big dividends or establish double digit dividend growth?
I don't think you can fault big tech for behaving in a way that they're rewarded. So to the extent that you can have companies that are valued on a price to sales basis. What everyone is telling you is, we're not actually asking you to have earnings, so to the extent that you can have an entire you know, almost thirty percent of a market which doesn't have to manage itself from an earnings perspective to a consistent cash
return to its investors. You know, those management teams are going to do what they've done and continue to do that. I think, you know, dividends offer a real check on earnings and a real return of investors and let them decide where to reinvest.
Lisa, Nvidia drowning in debt one point one percent.
Well, this is a cash flow just bonanza, right, And at what point are we pricing in a potential continuation of the pace of acceleration of that cash bonanza into the future. How do you even game out what we're pricing in given some of the moonshots we've seen.
In Nvidia today reminds me a lot of Cisco in the late nineties as having been that defining stock that somehow sat in the middle. So what Cisco was to the Internet and the completely network world, everyone hung on what John Chambers would say at four oh one, where he would shockingly manage to beat earnings time after time after time, and ultimately it came down to when his customers ran out of money to keep buying his servers.
Nvidia now sits in that particular position where they can sit there and look at the capital spending of Microsoft, of Amazon, of Alphabet with some reworkschips, of what China intends to do in AI, what certain countries in the Middle East seem to be doing in order to actually build up their own AI equivalent. And you'll come back to you at what point does the investments as other
people are making start actually becoming more challenged? What's different now versus the nineties example, where I have to admit
there's a difference. Cisco's customers were all detfinanced, and so what the FED wound up doing draining liquidity, taking down the concerns and the flood of liquidity for Y two K for people who remember ancient history, is very different than an extraordinarily powerful base of very profitable cash flow generating companies, which for the most part aren't being asked or pressed to return cash to their investors. Some cases thanks to dual voting stock that they're not ever going to be pressed.
This is a fascinating point. In other words, it's how long do the customers have open pocketbooks and plenty of cash and their customers have big open pocketbooks and massive quantities of cash. So how much can you see the moonshot continuing in some of these names that we didn't appreciate perhaps at the beginning of the year.
Well, I think.
Wall Street loves an easy store to understand. AI is conceptually really hard to understand. But if everyone wants to
do it, everyone is going to keep spending. And certainly right now, you know, the cost of capital is higher, but it's still not all that burdensome against a longer term history of what money should cost, to the extent that the companies which are really driving that spending either have access to a blank check if you're in China effectively from state financing or personal financing and ultimately coming through. But you know, when you look through Whire, people somewhat
disappointed in Nvidia. I think this morning it's oh, okay, that's all you've done for me, Like, yeah, what's double digit? What's a you know, effectively a two hundred percent gain year on year.
Shipped in revenue in a year or something. It's it's kind of nuts.
It kind of speaks to being a unique company and unique place in time. But that comes back to at some point, what have you done for really lately?
And that's where we are this morning, Lisa. I think investors also they sort of gravitate towards stories they believe a divorce from the cycle because they don't want to talk about the cycle anymore. And this is one of those trends that you can just see out beyond a recession a year, two, three, four, five years down a road.
Well said, it also doesn't necessarily have a cyclical feel, since we're looking right now at something that is a moonshot in a very specific slice of history and has the dominant, dominant footprint.
Quickly, Jack, I'm calling the bullmarket the income poor Yourdenni bullmarket two fossils from the past like you. And the answer here is is this a legit bull market? And are we a seventy seven analog where this is the second leg of a bull market? You got a lot of scared people over at JP Morgan, don't you.
You've got some really enthusiastic people. You've got some really scared people. That's the beauty of having.
Is it the second leg of a bull market?
Yea, we've had a great year this month, and if we go back and look back two years, we're still down two percent. So you know, we haven't really re entered that bull market because we're still not back too highs. To really make the sustainable highs, you actually need more people playing along than what I call the sacred seven, not the magnificent seven, because I'm trying to avoid theological belief in terms of growth rate. But I do come back to you. You know, what we had was a
good growth quarter. It seems like we got that because the inventory supply chain finally got fixed. Companies could actually fill the orders right and right now the concern is, well, orders are seemingly drying up a little bit because you don't have to double order anymore because you actually get your stuff.
John, did you see this percent change on the standard of four or five hundred.
The canon it now?
Yeah, today we're at big time month to day, up something like eight percent. Amazing on a session at the moment, we're positive by zero zero point two percent Jack, you and I have had the privilege of talking together for a long long time. I just wanted to squeeze in your call on housing because you've had some interesting calls associated with that part of the economy. What's the call now?
You know it's certainly last several months. My bias has been we're living in the renovation nation, the idea that you know, with an eight percent mortgage rate, people are almost trapped concept trapped in your thirty year mortgage at two and three quarters percent. The shame, the shame. But you're certainly going to see I think some freeing up
of housing activity. I do think that comes back to, you know, will the bond traders finally be right and we start getting some ray cuts next year rather than this permanently high plateau that the Fed is talking about, which kind of reminds me of Irving Fisher about nineteen twenty nine, except now it's bonds not stocks.
This was a clinic Jack, Thank you, Jack Cash so much of JP morgan esimage.
This is a.
Joy and away from the horror of the Eastern Mediterranean. To have Aaron David Miller with us is wonderful. He wrote a book in twenty fourteen, which ought to be reissued this morning. He's senior fellow Carnegie Endowment for a National Peace and aaron with respect to our president, and to take your wonderful book here on the end of Greatness, I want you to describe how you perceive any given president, but in this case President Biden with mister net Yahoo,
how should we interact? How should our president lead? Dare I say, Israel to a better future?
That's a very good question. And the president has been roundly criticized by just about everybody who with the exception of the Republican Party that has sort of emerged as the Israel Can Do No Wrong party for restraining Israel from not cracking down on the exponential rise in Palestinian deaths and the humanitarian catstroe in Gaza. You know, I mean, I'm you know, a pithy of the Oracle at Delphi reading the best of Golden Trails. Can't tell you how
this content is going to end. But I will say one thing is predictable, and that is Joe Biden's response to this crisis. For three reasons, his persona, the fact that the presidential model here is Bill Clinton, though a generation of part. Both of these men have this peter natural love. I would say, I use the word intentionally for Israel in a high regard for its security. President reacted to October seven in a powerful speech on October tenth,
was set to frame for his reaction. Second is politics. You have a deeply divided Democratic Party, progressives and even mainstream Democrats, some of whom are calling for more restraint. But again in twenty twenty four, I don't think the president wants to leave himself vulnerable to Republican charges that he's weak on his role. And the third p persona politics is policy constraints. The fact is Biden doesn't have any better answers to the three cruel dilemmas that the
Israelis face. Number One, prosecute a war against Tamas and eradicate it in a densely populated urban area without endangering and killing large numbers of Palestinians. And then what do you do about the day after. I don't think the nutrition that are sensing the is rallies eron.
You know, I look at the collective memory loss, and it may be as far back beyond nineteen forty eight, or certainly nineteen sixty seven. We have a youth of America that seems removed from our collective memories of the Eastern Mediterranean.
How do either political party.
Corral the youth of America towards an understanding of America's effort in diplomacy in the Eastern Mediterranean.
I think it's virtually given the generational divides identity politics the sort of a symmetry of power where the stronger party, regardless of its motivations or context, is perceived to be the goliath and the smaller party perceived to be the David. I'm not sure that's possible. I mean, I would argue public service, but then again, I'm old and probably out
of touch with this generation. You know, when it comes to foreign policy, I think George Will was right for most Americans, and I think even for young Americans they want as little of it as possible. So the fight, the struggle, the focus is here at home. I worry about that young generation. I have two forty year old kids who I think are committed trying to leave the world a better place. They are interested in foreign policy.
My bias has become theirs to a degree. I think it's hard, it's really hard.
I'm depressed when somebody young is forty, Okay, I just want to let you know that.
But Erin, I am curious how you see this evolving in terms of if we've been all talking about what some sort of humanitarian pause or cease fire or whatever you want to call it, a cessation in fighting for four or five days to allow the hostages to go home to their families, to allow for humanitarian aid to enter Gaza, what does that lead to? Do we have a sense of what different camps want after that?
I think that's the broke the code.
I think that's the key question is what we're win the scene within the next twenty four hours, when fifty Israeli women and children will be released, hopefully three Americans, including a three year old that Bob to celebrate birthday. Is this a headline or is this a trend line. Hamas took prisoners for two reasons. Number one, to trade them for asymmetrical number of Palestinians released from Israeli jays one hundred and fifty in this trade, because this resonates
deeply into Palestinian street. Hamas also took hostages in order to constrain and delay an Israeli ground campaign. The hope is that pressurable amount. A four day pause will turn into a six, seven, eight, ten day pause, pressurable amount for what Hamas really wants, which is extended in prolonged cease fire. That is going to be extremely problematic an Israeli government that seems to have no intention of stopping its military campaign. But pressure is going to rise. And
we have two clocks sticking. The Israeli operational clock which is ticking much slower weeks, perhaps months biden than the international community's political clock. She's taking much faster under the humanity pressure of the humanitarian catastrophe in Carza and the exponential rise in Palestinian deaths.
Seems to me this situation.
Is going to get worse before it gets much worse. I'm afraid.
Back to back clinics on this program in the last thirty minutes, Aaron David Mela that of the canagiantownment for international pace just phenomenal.
It is a wonderful tradition for us to write size the airline industry all that we hated joining us now. Helene Becker, senior research analyst at tid Cohen Halene, let me just start with the basic idea, when does it get better? When does American aviation not so much nostalgically harken back to what we remember, but gets to a new, more constructive model.
Thanks Tom So. I think we're in this period of time now for a few years where we don't have enough air traffic controllers, So anytime there's a rain cloud in the area, and a lot of the controllers we have are less experienced than the ones who are retiring. They slow things down, and they do it for safety purposes, but it's frustrating for passengers. You've seen in the New York area especially, but it will occur in other markets.
The FAA asking the airlines that serve the market to cut capacity, so we've seen this trend to more seats per departure and fewer departures per day in an effort to smooth things out. And then just in terms of people traveling, I think people are tired of not being able to go away. And you've seen that, right, You saw it in twenty twenty two. You're seeing it really aggressively as people travel in twenty three, and we definitely expect it to continue.
On this weekend with this weather. What do you focused on in the team.
Cohen, We're looking at the traffic numbers, and we're looking at where people are going, and what we're seeing is an increasing increasingly number, increasing number of people going outside the country actually for the holidays with their family. I don't think people may be tired of cooking at home, they don't want to go to a restaurant for their Thanksgiving dinner, so they change their mind and they go traveling. And we're seeing an awful lot of that, and again, I think that's a good thing.
I'm looking right now in some prices to a couple of places, and they've come down really markedly. I mean, I'm actually surprised by how much lower they are this time of the year than last time of the year. There was a story on the Bloomberg talking about how airplanes have been actually increasing capacity in response to what you're talking about the demand from the consumers, but they're
having trouble now filling the seats. Are we seeing the shift that could really change the picture in a more material way for next year?
I think we are. Actually what we're saying for next year is that domestic is going to be normal, whatever that is. But it will be normal seasonal travel patterns, more so than we've seen in the last few years. I call it for as the new three. Lisa, your boss wants you back in the office three or four days a week instead of two or three days a week, so makes it harder to take that long weekend. Kids are back in school five days a week, so again it makes it hard to just pull them out and
go somewhere. So we're seeing that more normalized travel pattern in the domestic market. I think what you're going to see internationally is increased capacity because that's where the demand was. So you'll see fears coming down, especially in the North Atlantic and the Caribbean, Mexico as well. Those are three of the biggest markets where we see declines and then we think there will be a ship to Asia Pacific. Oh sorry, Tom No.
I think this is important, Lisa.
You and I have been following selected flights and I just look at one Newark to Paris.
It's what everybody takes and the answers is one third, it's one.
It's you can fly three people now business class for what one business class ticket costs eighteen months ago.
It's stunning.
I love at lines Denver theoretically because some of the snow has started and it's really nice. Well, okay, Helene, I am curious as you talk about the potential for prices to go lower where the breaking point is for some of these airlines. We talked about some of the contracts with pilots, with other staff, all the prices are going up dramatically of the work staff. The base costs
are going up as well. Put oil aside for one second, how difficult is it to make that break point for some of these airlines as prices start to come in.
Yeah, we're going to see margins get squeezed. No choice but to raise your revenue. And it's hard to raise revenue because, especially in the domestic market, people will opt out and you can't. I've done this for a long time as you're not and you can never lower fares to offset volume declients. It just doesn't work that way. And so we'll see margin pressure and we don't think airlines will make as much money on twenty twenty fours they earned in twenty twenty three as we revert to
a more seasonal and normal pattern. I liken it to the cargo industry. Look at what happened with FedEx and ups over the last year and a half or two years. Volumes are down and revenues are not up as much. Revenues are down, costs of rep and margins are under pressure.
Well, that's sad happen.
Do you run away from the industry? I mean, I'm trying to get my airline stocks back to where they were pre COVID. Good luck with that dream. Is there a single best buyer? Do you just walk away from the sector.
It's really hard, Tom, because the stocks are at twenty twenty lows or below. Our best idea for twenty twenty three was United. We had some good success with that most of the year until we didn't and then we really like Copa CPA, which is kind of not based. Everybody thinks own Panama, but there's actually a lot of really good things. It's a three billion dollar market cap company. Panama is a sea level airport, so you don't have the weather related delays. There are a lot of usx
Pats who live there. They rely on the US dollar. They don't have their own currency, so they can only spend what they earn. The Canal would be the largest employer, as you would imagine, and then COPA would be the second largest private employer, followed by the airport. So it's a really well run, well positioned airline with a dividend around a three or four percent dividend yield, and that
dividend goes up almost every years. The family the shareholders get pay or the company rather pays out fifty percent of ads net income. So that's a that's a good that's a good one to look at a couple of others.
Yeah, Helene, thank you. We are so grateful that you're here on Thanksgiving, and I am wondering, are you traveling on Thanksgiving? Do you ever travel on Thanksgiving?
That's so funny, Lisa. Normally we do, but I couldn't take it this year. I've been on the road every single week since August first. And when I looked at my all our kids are traveling, they're all gotten. My son and daughter are together with my son's baby and his wife, and my step kids are visiting their in laws. So it's like I looked at my husband. I said, no, we're staying home and I'm not eating turkey.
Elaine Becker of td COWED, thank you so much for being with us.
This is a really important conversation right now. It was important thirty days ago, but it is important into two thy and twenty five. Earl Davis has had a fixed income BEMA Global Asset Management, and I can't say enough about the controversy of his call that your own Powell will stay the moment and keep rates higher for longer.
Earl, do you stick with that call?
And that's one of the things we're looking at in the market now in regards to how many eases are being discounted for next year. We see, you know, we're on our way to one hundred basic points of eases by the end of next year, which we think that you know what, you know, I always believe the market, but in regards to the pricing and the moment, but it's our belief that they'll be firmly on hold next year.
You're out of Western Ontario, the land of perfect statistics. What's the correlation of your FED call you're higher for longer call to the equity markets.
Oh, that's that's a great, great question. You know that the higher for longer doesn't matter to the equity markets. You know their discount rates the long term rate right the ten to thirty year real rate. So what happens on overnight won't impact, won't impack equities unless they do ease, then it's just a euphoric buying of equities. But from a quantitative perspective, it's the ten to thirty year real rate that matters for equities.
We talk about the ten to thirty year rate. We were talking yes day with Michael Collins of PEGM fixed income. He said he could see a material further decline in real yields just based on the fact that people are expecting this growth to continue, and that he thinks we're seeing the signs of a more material slow down.
Do you agree?
I agree eventually. I think the real rate is sayles now. The economy remains resilient. I know we're getting mixed numbers, but the economy o we're all still doing well. You know, less and less calls for a recesion during twenty twenty four. As long as we have that real rates will stay five because that's the counterbalance to the economy doing well.
You need to drive take money out of the growth economy into the savings economy, which is real rates, and to fight inflation, which you know it seems like people are forgotten. You get part of the fighting that's keeping the real rate high.
So in otherwids, you're saying you don't think that the slowdown that we're seeing on the margins enough to bring inflation lower, and that currently the nine tenths of a percentage point decline in benchmark rates, the cuts that people are pricing into the market next year are overstated.
So I'll say two things. It's not necessarily the slowdown that we're seeing, it's the pace of the slowdown. Is growth declining fast enough? You know, there's still a lot of excess demand in the economy. I see it when I still go to the stores and restaurants. Yes, it may be savings and maybe credit.
That we're seeing that retail sales people are still buying.
That is excess demand. That's a big driver of the growth in our economy, and that's what leads to inflation. So I don't see it on that part. On inflation front, you know, we're getting constructive numbers, but we are still very warned about wage inflation that passes into in pricing.
It's right where we wanted to go. You really center out wage inflation. How sixties are we I mean the idea of you know, you know, forget about cost push, demand pulling the rest of it.
Is it just plain and.
Simple wage inflation that we remember forty fifty years ago.
I think we're getting there. The difference between now and the sixties or forties and fifties years ago is the amount of unionized employees. You know, it's significantly lower now than it was before, but that trend is increasing. And what happens when that trend increases and we're seeing the wage increases UAW ups, you know, you look abroad in Canada as well, what happens is the people who are non unionized have to get wage increases. And we saw
that with Honda and Toyota. So we're not quite sixty seventies because we're not as unionized, but that trend is increasing and the wages will remain a pressure on inflation. I think it leads to secular higher inflation, you know, three four percent instead of two to three percent.
So what's your highest conviction? Earl's heading into next year at a time where people seem to be moving in the opposite direction, celebrating soft landing, celebrating maybe the return to the old normal where's your conviction line.
The highest conviction is that there's no eases until at least Q four. So that means just by shortening two year bonds or any part of the curve, you make money if nothing happens, because the overnight rates still five in a quarter. And you know, we saw where ten year bonds are right now, right, so that's negative carry trades owned those versus overnight. So highest conviction trade is no eases, fed on hold till at least after the election.
Wow, fed on hold until after the election. Oh, that runs counter to a lot of people. What do clients say when you tell them that?
Well, first I tell them, following of winners is a loser's game, you know, so when if we try to follow what the crowd's is doing, we're always coming in second. So we've based our views on tailwinds, on fundamentals, on quantitative numbers, and that's what gives us, that's what has proven to be successful in the past. We just show our results and we say, what's our markers? So for example, where would we advance our eases? Where would do we start believing what the market's saying?
For us?
The key number to look at is unemployment rate above four percent? As soon as it gets above, then you know, I think the safety's off, so to speak, in regards to eases. We're not even closer. We're three seven still, so we still have a waste to go, and I think the FED would like to see it closer to four to five before they start using. So that's our trigger, and that's what we tell clients what we're looking at
and what will help us change. And they know our results and they know this is the most volatile year and fixed income and we're aut performing in it.
It's nice to get an original thought. Oh, we appreciate it. Oh, Davis, there a female global asset management.
What are we going to talk to Man Deep sing about that stuffing? It's like video AI or in video? Which would you like to go?
To be honest with you would prefer to talk about in video because I think it's more material to do there.
Right now, Mandy's enjoys a Cera and in Vidia and what we saw yesterday, what is the legs on this, Man Deep? I mean, you know, we all get the moonshot and units and the fervor, and I saw the two hundred and forty percent.
Blah blah blah. Do you look at it as a three quarter thing or can it be a thirty year thing?
I mean, look, we are witnessing the biggest data center expansion right now, and data center it market was about you know, eight to ten percent rower historically, and when you look at the numbers that Invidia is printing, clearly there's insatiable demand. Yes, they will be affected by China restrictions, but they're still undershipping demand. And that was the message. And this is a near monopoly at this point of time.
The question that you have to ask yourself is will it remain a monopoly like Intel was over the last twenty five years in the CPU market or will there be more players that can develop chips? And right now, you know, the customers that are buying these chips are very concentrated. It's the hyperscalers that are buying you know, fifty percent of in Vidia's capacity. Will they continue to do that, you know, for the foreseable future?
Okay, well, you know you're an expert on this, and I guess Allman's back at open AI.
How long does it take to make a competitive chip?
Well, so that's what in Vidia has showed that they can pivot much quicker, they can ship products much quicker than anyone else. Look, AMD and Intel have the capability to make a GPU, but it's not as productive and efficient as an Nvidia GPU is, and that's what we are seeing. That's why I say it's still a monopoly. And until you see proof that companies can train as effectively their models on alternative chips, I think Nvidia will continue to have this kind of esp growth which we saw.
Last night, Mandy. One aspect of the earning support that I thought was probably most interesting was the drop off they signaled in Chinese demand for their GPUs for some of their products. And this comes at a time where they're still able to beat expectations on revenue. They can still ship those chips elsewhere. What does that tell us about both what's going on in China but also more broadly what's going on with just the glood of demand.
Yeah, Look, there was certainly some pull forward in China because they anticipated these restrictions, and you could argue and VideA was probably over earning in that region, but there is that demand. You know that they can ship their chips elsewhere, and that is what gives I think the confidence that this company is way ahead in terms of not only just developing a GPU, but bundling it. They highlighted networking is a ten billion dollar run RAG business.
Software is a billion dollar run RAG business. They have the perfect mousetrap right now in terms of bundling these chips to train large annguage models and that's huge.
All right.
So, Mandy, if we were talking about open ai and not trying not to talk about open ai and the relevance of that to this story, how much is there a relationship in terms of Microsoft's desire to create some sort of rival chip with respect to the AI development more broadly and what the future is for open ai as an independent agency.
Yeah.
Look, open ai and in video are the face of generative AI, you know, if you think about the and that has played out this year, and I think with open ai going through this turmoil, Microsoft driving those changes has steadied the ship. But I would be surprised if they can, you know, ship out the next version of GPT as quickly as they intended to be, because there will be some talent loss as a result of this.
And I think Sam coming back to open ai may drive some people out, and I can't imagine things will go back the way they were last week.
What do those people actually do, man, Deep, I'm serious. Do they sit at a desk with what a sun Spark station, a Mac what computers in front of them? And are they doing the coding like the coders do at Bloomberg?
Is it just as romantic as that?
I mean, Look, this generative AI wave is built on a transformer model, and that is built on you know, ingesting large amounts of data. There is a human feedback element to train these algorithms and put those guardrails, and training is a constant process. That's what we learned from Nvidia last night that you're not one and done with training. You're constantly training your model. That's why you need the
GPUs and the data center build out. So there's a lot that's going on in terms of understanding the algorithms and then obviously putting the guardrails to make sure you know the results are correct.
A mande just to find a question from me, And certainly I would never criticize sat In Adella. I think have said on this programmed in the last twenty four as one of if not the best COO in corporate America, but clearly some missteps along the white Here, Mandy, what do you think the lesson to the last week will be for him and for Microsoft.
Away, When you make a thirteen billion dollar investment and you know, take a forty nine percent take in a company, you take a board seat as well so that you know what's going on. I think in this case they were blindsided by the developments, and he mentioned that, and clearly I think that was the lesson for Microsoft.
Mandave. Thank you, sir, Mandy Sink a Bloombeg Intelligence.
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