Bloomberg Audio Studios, Podcasts, radio news.
This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along with Lisa Bromwitz and a Marie Hordern. Join us each day for insight from the best in markets, economics, and geopolitics from our global headquarters in New York City. We are live on Bloomberg Television weekday mornings from six to nine am Eastern. Subscribe to the podcast on Apple, Spotify or anywhere else you listen, and as always on the Bloomberg Terminal and the Bloomberg Business App. Premier. JP Morkan
Asset Management joins us now for more precomonic. You followed that exchange. What did you make of the explanation coming from the Treasury secretary.
I think the Treasury secretary is doing what a Treasury secretary should do, be a cheerleader for the treasury market.
But you know, I do think he made very valid points that.
Now, what we saw last week, the last few weeks massive our shock. You're seeing three sigma six sigma moves across assets. You're seeing correlations breakdown. Remember that equity dollar correlation that broke down, And so I think investors had to delever de risk were they margin calls. So I think there was a lot of technical factors that drove that treasury sell off.
In the background, though there is this concern there's.
Eight trillion of treasure is held by the rest of the world, you know, it's the endgame, zero trade deficits. I don't think that's the endgame, but concern around foreign demand for treasuries may be selling.
I think that played into that.
Fear certainly played into the market as well as if we're going to get five trillion more deficits because of what the House and the Senator talking about.
I think that just became this perfect storm.
But I would take a step back and look at fundamentals. Ultimately, the treasure market is driven by fundamentals.
Fundamentals of the hard.
Data has been strong, but we've just had this massive shock to the economy. I think the soft data is telling you that the hard data is likely to weaken. So I do think treasures are a goodbye. We had peak hard to say, but we're getting there.
Well, you're getting too. The ultimate test what would happen if the data weakened would be by treasuries or not with the rest of the world allocate capital to the United States, which is important. What concerned people last week wasn't just a sell off in treasuries, it was what was happening elsewhere in other asset classes. Now, we've seen moments like this one before where you see forced selling a treasuries, big unwineser trades, companies had funds in trouble.
That's not unique. What was interesting was the persistent dollar weakness alongside that, reinforcing the notion that maybe it was something else. Perhaps it's not, but that's what unnerved people in the past week. How would you reconcile what was going on there?
So I would say that the dollar, I mean, has been a highly owned asset right for the last few years.
Now.
I think there's structural components to that US exceptionalism.
Look at where growth is.
It is US companies profit margins are high, and I think right after the election there was this idea of reacceleration, so the dollar got some more of a boost there. Plus, it was supposed to hedge equity risk. It's supposed to hedge risk asses, which is so I think the dollar, the structural value in the dollar might still be there.
Maybe we overdid it.
In our view, the dollar does still looks overvalued, so I.
Think that that's correcting. And then you had this.
Treasury market that was overwhelmed. I think with all of the selling. I mean there were a lot of supposedly uncorrelated trades. Swap spreads is a supplementary leverage ratio trade, German bone treasury or the you know that spread was supposed to be about German fiscal stimulus.
You had an unwind.
Whether people got a tap on the shoulder, you know, whether they're just trying to d risk, whether it's margin calls.
I think that overwhelms.
You did have these two forces coming together. But you know, it's unnerving when you see correlations break, when you see this em market like market moves.
I think that's what reduced conviction levels.
And we're seeing headlines every day, So I think uncertainty is high, not just for the economy but for investors.
And and I think that's why you didn't see all this.
Buying from domestic investors who might be concerned about the economy.
How much comfort do you get from the potential response function, not just from the Federal Reserve but also the Treasury Department with a Treasure Secretary scut Pasen saying that they could buy back off the run treasuries.
So I think from market functioning point of view, I think though that buy back operation is useful. The Treasury launched it because the dealer balance sheet, you know, has been constrained as the treasure market's grown.
Can they help market dysfunction?
Yes, can they help? They still have to issue a lot of debt. So I think we're going to be watching beyond all the tariff news, We're going to be watching what's happening on the tax front.
You know, are we going to get those spending.
Cuts that were sort of promised by Speaker Johnson. If you don't get those spending cuts, the market has to then grapple with a lot more deficit, and maybe that end point of how low rates can go in a recession or in a slowdown is going to be higher because we've got all.
This fiscal stimulus.
I'm a little bit more comforted by the Fed response function, and I think Governor Waller yesterday was crystal clear two scenarios.
I mean as clear as.
He could be given that the the you know, there's a lot of uncertainty, but just telling us how they think came out tariffs, and he talked about good news cuts and bad news cuts, showing you that asymmetry.
Okay, but here's the issue, and this is something that I haven't heard anybody address. If they were to cut rates in response to potential weakness that hasn't shown up enough yet in the data, wouldn't the long end just yield searge price drop?
And you could argue maybe some of that happened last year when the Fed cut rates from five and a half, you have that long end selling off, But I would say, look at what was happening to hard data at that point, it was actually looking okay. Remember we were concerned August September, we were concerned about the labor market. It's stabilized, and that's why the long end set sold off. I think to your point, yes, the Fed has to be concerned.
Will they let inflation expectations those tips break evens that have been declining? Does that reverse? Which is why they're not They can't be preemptive. I think that's what they're telling us. They're trying to explain their reaction function so that that first really bad hard data, and maybe it's the labor market. I don't know, Maybe it's hiring, maybe it's retail sales. We're going to be looking not so much as there's this frontloading of demand. We're going to
be looking at discretion spending. If I am going out to buy more because I think prices are going to go up, do I cut back.
On other things? And you know? So we're trying to understand.
How the consumers responding, how corporate's responding. Are they just not hiring or are they actually trying to protect margins and laying off as that data worsens. I think then the FED response doesn't unanchor inflation expectations. It actually helps stabilize it because those inflation expectations will create when the data weakens, and then the FED can say, no, we got your back, but I think you have to first see it.
In the data.
This is the communication dilembra, the feder reserve feedshaed Japow con come run talking like Governor Ballercamp. First and foremost you have to pledge to anchor inflation expectations to prayers point. Then if you get the hit to growth and inflation expectations roll over, you can lean into the d you're going to kint interest rates. They can shape the events they anticipate, and that's the big issue for them. You put out an outlook and it can influence inflation expectations
even off themselves. To your point, if Chairman Powell comes out and start speaking like Governor Walla, what do you think is going to happen? Some people would argue exactly what you think is going to happen. Maybe inflation expectations start to creep higher because we start to have arguments around this table. Oh, they don't care about inflation expectations. That's the dilemma they're in.
And this is the reason why markets don't believe that they won't step in when there is a problem in the data. And that's the reason why you have the likes of Andrew hollend horriz orver at City Group reaffirming his belief in one hundred and twenty five faces points of free cuades this year.
I'll leave Preer out of this debate because you won't want to wait in. But this is the advantage you have being a governor and not the FED share. The governor can create some distance between himself and the rest of the committee. If say, he wanted to become the next FED share potentially in the next year or so.
So you know, do we trust that or do we trust fed? Shair Powell?
You know, this is the little Imma prayer. It is good to see it. I'm sure you're welcome being left out of that primers er, JP Morgan, Thank you. Terry Hanks, a Pangea policy joins us now for more, Terry, welcome to the program. The administration I think has done a very good job. I think President Trump's done a good job of articulating the problem for a number of years. Now come back decades, the remedy to the problem and
the execution of that remedy. What's your reaction to that over the past few weeks.
Well, it's been scattershot, John Frankly and good morning, both on strategy and execution. But you know, if there's a consistency in the Trump presidencies, I think what you can see is that what he tends to do is kind of go big, bold, clear, motivational, and then start embroidering
off the exceptions and the like. And that's certainly the pattern. Now, you know, it's you know, I want to be very clear about the direction we're moving in in terms of, you know, what we're manufacturing, where we're manufacturing, and how we're doing it. But then, uh, you know, we're going to wait to have the industries come back and separate the week from the chaff on what's legitimate and what's not. So it is a difficult process for everybody. I understand that,
and at a very difficult process. And at the same time, uh, that's how they operate.
John has asked this question many times. Who are they negotiating with? And yes, they're negotiating with themselves inside the cabinet, they're negotiating with companies, they're negotiating with countries, and then negotiating with.
A market terry.
How does that complicate understanding exactly how to get to the goals that they ultimately have laid out.
I think what they end up doing is they prioritize those overlap but they're not they're not completely congruent. You know, you you you negotiate as best you can with the individual countries involved, and again push push forward bilaterals. Uh, you know, get your get your best results, move on, get some future, get some future promise as well, move on the cabinet understands that at the end of the day, the president's the decision maker, and so they fold in
around and as to the rest. You know, these companies buy and large that we're talking about today are big companies that have, among other things, pretty sophisticated lobbying operations and they're fully engaged as well.
So, yeah, last night Emrie talking to treasure Secretary Scotts Scott Bestont had a message. He wanted to talk about the three legged stool of policy, and the tariffs are one wing of that, one leg of that, and then you had deregulation, and then you had some of the tax relief and what was getting passed through Congress. Those other two legs of the stool have been caused called into question recently in terms of how big they can be and how much they can offset. Some of the
concerns over the tariffs. You have a sense of how that's going well.
I have tax cuts at eighty percent likely to happen in the fourth quarter of calendar twenty twenty five, and I think there's a rising possibility that it happens sooner. It's not for nothing that Trump picks July fourth is the day on the next direction on tariffs, and they'd very much like to goose Congress as fast as they possibly can to get the tax cuts in place for the third quarter as well. So you know, but I'm optimistic that the Congress gets this done. There's an awful
lot of alignment on that. As to the numbers, what the Senate and the House are talking about is something on the order of five trillion tax cuts over ten years, without a lot of offsetting, without a lot of pay for offsets. And the reason for that is they've chosen, as I've been talking about for a while, this current policy baseline that allows them.
To do that.
So you know, what you're going to see is a very big tax cut number coming through, I think, and and I think that probably balances or more of the tariff shocks Terry.
You think they go beyond extending existing law.
I think they do in some respects, in part because they in part because you know, that's what Trump's wanted. You know, these these tax on tips and you know, the salt business, all kinds of things they need to do. In order to get votes and get a signature into law number one, number two, they're gonna have to change the tax code for a variety of things, including providing additional incentives for reshoring and on shoring manufacturing. So I'd look for all that.
Terry Hanks, appreciate the input. Thank you, sir, Terry Hanes of Panjier Policy. It's kind of it's Ken leyar a CFIRA about that. Ken welcome to the program. What have we learned about credit quality in America in this banking season?
So I think what Brian moynihan is going to speak about is comfort zones, which is really main street, the consumer and small business. And what we saw in the release today is that credit risk committees make decisions on the current environment, not the forward environment. So that's credit Again. The results are more in terms of the high volatility. The benefit for trading bank stocks never get rewarded in terms of multiple expansions for trading profits. But it shores
up the full year. Second quarter is going to be choppy, you know. It's really kind of like the beginning of COVID where analysts like myself looked to the second half of this year, is it V shape or U shape. We're optimistic, we think the capital markets are going to be open, but it's going to be the second half of this year, and what we're seeing is institutions and fund managers realign their portfolios, and that's good for equity trading.
A V shape will be a U shape, or we'll just be a straight line because I don't see a dip right now. I mean talking about the fact that you're getting healthy credit quality pretty much across the board. That's the message from Bank of America, P and C, a smaller but the biggest regional bank came out earlier this morning talking the same kind of tone that Frankly, provisions for credit losses came in lighter than expected. Does this make you more excited for the forward look for banks?
I don't think the story is credit here, it's way too early. It's really what happens in the capital markets and what is confidence for CEOs for capital raising. So again, the second half of this year, if it's going to be stronger, it's not the worries about credit. It's really going to be what happens in the capital markets. Clearly, if there's going to be any severe recession, then it's game off and then we can start talking with red
lights for credits. CFURA. We look at every metric of every bank on delinquencies, lon loss provisions and reserve build or reserve or reverse.
We're just not there yet going forward.
Can you still get optimistic about the banks if M and A doesn't revive, but you do have credit quality that hangs in there, and you have yields that are higher than previously.
So the large banks are formidable. They have, as Jamie says, fortress balance sheets. They are formidable in their industry. And we have never seen in equity market outperform without financials and banks coming along for the ride. We're overweighted in financials, we would say to you from two thousand and seven
versus twenty twenty five. When you look at the top ten constituents of the financial sector, banks being a big part of it, they're a little less cyclical, they're more stable, and companies like Goldman Sachs with David Solomon talks about moving to more durable, recurring fee revenue, whether it be an asset or wealth management, or more principal investments in areas like alternatives. So the banks are very different than when we had this discussion back in two thousand and
seven or eight, And again they're not the problem. So again we'll see what Scott Besson says in the market and advises the president.
Again, there's a difference between existential risk and a recession, though, do you really think they perform well in an economic downturn?
I'm sorry, I think when you look at the economic outlook, you know again Goldman, Yes, they noted that they're now still positive, but it was above two percent zero point five percent. There's also the question on duration and also just a technical definition of recession versus a recession that hurts the consumer, and President Trump will pay attention to that.
Ken appreciate the update. Thank you, sir, Ken Leon of Cfon Ray joining ustand the Republican Governor of Virginia, Glenn young kiin Comy young Kin good.
Great to be with you. Thanks for having me. It's super to be back in studio with you. So I just appreciate you making time.
For well, thanks to drop him by. Let's talk about how exposed you might be to this tariff PUS. You've got some very launch aerospace and defense companies in the state. How are you helping those companies and individuals that might be affected by some of this In the meantime, John, I think we have.
To step back first and put the current moment in the tariff evolution in context. From while he was running all the way up until today, President Trump has been really consistent on the elements of his economic plan. First, he's going to use tariffs to reset trade balances and decades of bad deals. He's talked about. You've heard these
words out of his mouth over and over again. Second of all, he's going to make sure that manufacturing is reshored and that we reinflate or reinvigorate the hollowed out middle class. Third, we're going to re establish fiscal responsibility in Washington. Fourth, we're going to re establish energy dominance, and finally, through deregulation, we're going to make it even better to do business in America. And those elements are
all in motion at the same time. The trade moment for us, in the tariff moment for US is also this ninety day pause, which is giving the opportunity for deals, and every Cabinet member has repeated there's seventy five countries in motion right now, and I would expect that there will be some significant trade deals struck. I do think that there will be a level of ongoing tariffs and the ten percent number wasn't one picked out of a
hats and they call that the base tariff. But I'm a governor watching, but I do expect that there will be deals cut and those deals importantly will be with some of our largest trading partners, India and Japan and Korea. And so this is what's going to happen over the next many many months, and most importantly, I think that will bring some confidence to the market that this reset, which has to happen and disruption is part of a reset,
will will open up long term opportunity. Now Virginia, Virginia, we're going to We're seeing that long term opportunity every day, and that's through our economic development pipeline. We've had an incredibly robust three years. We've had record investment or commitments from businesses expanding in Virginia one hundred billion dollars in three years, by far the largest amount. In that time period.
We've seen record job growth. Virginia went from bottom third in job growth to top three five ten every year in job growth, and that has allowed us to run surplus after surplus after surplus. The net of that is that we have open jobs in Virginia two hundred and fifty thousand open jobs for folks to take. But on top of that, our economic development pipeline has been as full as it's ever been and we're seeing businesses, international
companies want to come to the United States. We're viewed as the top state in America for business and they want to come to Virginia. And so that's a really good foundation for us as there is a period of disruption, but I think there's a long term opportunity and I think Virginia will really do.
Well link seal command the long term opportunity. In the full of policy platform, you just want to keep it on Trent just for a moment. On trade, the methodology it does feel like was pulled from a hamp in the last few weeks, and the criticism we hear around this table quite a lot. They will acknowledge the problem, and they will acknowledge that the President has articulated that consistently and well over the period of decades, not just
weeks and months. It's the remedy to that problem. At the moment, what we hear from the bank CEOs, from investors is this economy is drifted into a wait and see moment that they aren't going to make those big CAPEC decisions until they really know the rules of the game, the rules of the road. Do you think we'll know the answer to that within ninety days.
I think we'll see a lot of clarity over the course of the next now eighty days, I guess, or eighty two days.
Amazing camp.
But the net of it is that the President Trump was clear, He's continued to be clear that in resetting bad trade deals over the last decades and re establishing reciprocal trade opportunities. By the way, with nations that our allies, China's a whole different top, but with nations that are our allies, we just need fair trade and we haven't had it. And so in to reset those trade in those reset those trade imbalances, you see him do what he does well, which just creates space for negotiating. And
I think that's exactly what's happening. When the first weekend after April second, you read in every publication that seventy five countries had called within a day to start the negotiations, and you've already seen those negotiations at least reported in rumor. I think this will be this opportunity to take a big step in resetting hold On, and I think that's what the market needs to see.
Part of the.
Problem, I think, and you know this very well, having invested heavily as a co CEO of Carlisle and been investing in infrastructure, which takes a long time. There's a maturity mismatch between when some of this negotiation is happening, when these tariffs go on, and how long it takes to bring that investment to the United States. There is a lack of clarity about whether those policies will be continued in perpetuity, and it's leading to paralysis at so
many companies. What do you tell the companies in your jurisdiction who's come to you and say, how can I plan?
How can I hire? How can I invest? When this could change?
I don't even understand the parameters we're talking about.
Yeah, I have to disagree with you on the long term planning, because we're seeing a pipeline of economic investment that has been as full as it's ever been. And these are long term investments. Fortune fifty companies wanting to build in America and in Virginia. Hopefully, if we can recruit them there. And these are long term investments. And you saw in Vidia yesterday talk about five hundred billion dollars. We've seen most of the big pharmaceutical companies commit to
building in the United States. We're seeing technology investments, advanced manufacturing all in the United States. These are long term investments. I think the difference in a lot of people's understanding is that during market ups and downs, well, yes, IPO get postponed, and yes, corporate deals get postponed, but these long term commitments are actually coming in very large numbers. And that's good for states like Virginia. I mean, listen,
we're in the sec of economic development. I compete every day with Tennessee and North Carolina, South Carolina, Georgia, Florida, Texas, and we've got to compete. And I think that much of that investment will come to this region. And that is a long term commitment. And so the uncertainty in the near term, yes, I get it, I understand it.
But the long term expectation that America is going to be the best place in the world to invest is clear and real, and that's what we're seeing in our economic development pipeline.
There's also an issue of staffing all of this up, but how we do this.
Not only is there a.
Maturity mismatch, but also potentially a skills mismatch. And I know that your state has been significantly affected by some of the DOGE cuts, and you've talked about that and how you plan to provide for some of these workers. But how do you reskill people to work for different types of jobs given that they've worked in a very specific field and there might not be jobs in that field and what we're trying to build up hasn't been there for a long time.
Well, first you go to work and prepare an education and training ecosystem to do exactly that. And we've been doing this for the last three years in Virginia, which is resetting the career pass and the education pass for lots of Virginians with opportunity. And today we have an incredibly high labor participation rate. It's bounced back from lows during the pandemic and the previous administration to near one of the national highs. We have one of the best
workforce training programs in America. We were just named for the third year in a row of having the best customized job training program in America.
This is what you do.
You go to work.
I do think that the expectation that there will be job losses, particularly under the federal government, is real. We haven't seen them yet that much in Virginia. I mean, our first time claims and unemployment are still at historic lows. But listen, I do think that the federal government's downside is necessary. Listen, we're running. We're at thirty seven and a half trillion dollars a debt, two trillion dollars a
year of incremental debt. We can't do that, and so resizing the federal government and recognizing fiscal responsibility is critical to the future of the country is real. What does that mean in a state like Virginia. We have a lot of federal workers, a lot now. A disproportionate amount of those are in the defense and in the intelligence and national security area, and we're seeing more money go into those areas. But I still expect that there will
be real disruption for some folks in Virginia. My dad lost his job twice when I was growing up, and I've seen this in families my own, and it is really hard. And that's why a pathway to a new career is so important because of our economic growth. We have two hundred and fifty thousand open but unfilled jobs in Virginia, and over one hundred thousand of those require
a bachelor's degree. These are good jobs, but there are also jobs that pay well, and so opening up that pathway to folks who find themselves with job loss is really really important. So we launched something called Virginia has Jobs, and it's for folks to get jobs in Virginia from all over the country, but at a time when we're
seeing this dislocation from the federal government. It's a real opportunity pathway two hundred and fifty thousand jobs, pathways for training, coaching, resume riding, but also for making sure folks on how to file for unemployment and keep their health care. This is a pathway that I'm really hoping that people who do have job disruption can find a way to a great career in Virginia because Virginia has lots and lots of jobs, and people can go to Virginia has Jobs
dot Com and actually find one. And that's part of I think this movement of really public sector employment to private sector employment. And we've seen it.
In Virginia.
We've had great job growth over the last three years. It's led to record surplus after surplus after surplus, which has allowed us to reduce taxes. It's allowed us to invest in education and law enforcement, and by the way, in economic development and job training. But it's also I think change people's view of long term in Virginia. We used to have were for ten years we had more people move away from the Commonwealth of Virginia than move
into from the other forty United States. And last year we became one of the top importers of talent in America. So this works, and at a time when President Trump again is trying to run a very very full policy agenda resetting trade, balancing the federal budget, of making America dominant again and energy, restoring manufacturing, and restoring this middle class what has been what's been eviscerated over the last twenty years, and doing all of that while deregulating to
make America even a better place for business. I think we can look at Virginia and say, hey, we've seen at least a little microcosm of that, and it works.
Governor the Stikes of High I'm please you mentioned your experience growing gup. You like me, we were professional dishwashers. You went on to have a fantastic career lead in Karlisle, and now you're dedicating yourself to public service. There are now people much younger than us who believe that dream is not available to them. The upward mobility is not
along as something available in the United States. And at the moment, as you know, filling stadiums around this country is left wing people like Congresswoman a Cassio Cotez Senator Bernie Sandez. If this administration gets this wrong, we could see a swing in the pendulum all the way to the fi left. It's not unthinkable. You can see that taking place. How high are the stakes. What happens if this administration screws it out, well.
First and foremost don't believe they will. And therefore I think what people will see over the course of this administration is the realization of this long term opportunity. And that's why all of the elements that in play are critical. You know, there are so many people in government who believe there's one policy solution, this magic wand that will fix everything. This is an incredibly complex economic transition model.
And that's why having all of the elements in play at one time, while complicating, is critical because they're each going to contribute for the long term success. And if you peel out one energy dominance, listen, getting energy prices to a place where they're sustainably affordable at the gas pump and in the supply chains critical. America should basically dominate the world of power and energy. Making sure we have a balanced fiscal moment, not running two trillion dollar
deficits critical for the long term success of America. Reshoring, manufacturing, and think about what's happened over the last decades where we watched critical, very high paying jobs move around the world away from America and hollow out our middle class. That's the opportunity that has really been missing because we've seen literally the middle class not participate in the economic growth of America over the past few decades. This is
what is this opportunity is all about. And I've said many times, I think the number one job we have as Americans is to help this administration be successful, and that success will translate into an even better America than we have to.
At least set it around this typo. I hope they are just a final question. What's the future a comverany young kid? What you want to do next?
Well, I finish up next January, and I just want to begin by saying this has been the most purposeful moment in my entire professional career, and I've loved it, and I want to make sure this last year is incredibly productive for Virginia. Listen, you only get four years in a governor's job in Virginia, and I've got one year left, and I got to get four years of work done in this year because we've had a great first three years, and I want to get a second
term jammed into this last year. But I also recognize that there are a lot of folks who spend all their time planning for their next job. I'm not one of those folks. I'm going to spend one hundred percent, if not one hundred and fifty percent of my effort making sure that Virginia continues to thrive. We've got a really important election this year. Our Lieutenant governor wins some Earl Sears has been a great partner for me through this entire economic revival in Virginia, and I want to
make sure that she gets the Baton. I think voters will trust us and trust her and want to elect her the next governor of Virginia. And then we'll decide what I do after I've watched her be inaugurated.
Young Convents twenty eight I'll watch.
I'll decide when I when I after I'm done in January twenty twelve.
I ha's a tryank governor. It's good to see it.
I will, I will, I will repeat, though, the most important thing that we need to be doing right now is to be helping this administration be successful. And I think the elements are in place. It is a complicated set of movements in order to reset so many things at one time, but I have great faith that the long term opportunities really are going to be great, and we're seeing that in companies who are investing all across Virginia in America.
For the good of this country. I think a lot of people agree with you. I hope, we hope you're right. Thank you, Governor. I appreciate your time. Thank you, sir, the Virginia Governor, Glenn youngkin Net. This is the Bloomberg Sevenants podcast, bringing you the best in markets, economics, antiet politics. You can Watch the show live on Bloomberg TV weekday
mornings from six am to nine am Eastern. Subscribe to the podcast on Apple, Spotify, or anywhere else you listen, and, as always, on the Bloomberg Terminal and The Bloomberg Business Out