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This is the Bloomberg Surveillance Podcast. I'm Jonathan Ferrow, along with Lisa Bromwitz and Amrie 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. Victoria Fernandez a crossmark rights in this we continue to see volatility in the markets as the uncertainty surrounding the rate path in the US remains high, keeping us cautious as cracks in the labor market begin to appear. Victoria's with us right now, Victoria, let's start with the sustainability of this up trend other question marks around that.
Now, given that we've seen.
A big move in the biggest name, the most important name of this equity market three days, twenty percent game from Vidia and this secretary market more broadly has done nothing.
No, I think you're absolutely right, Jonathan, and in Vidia is kind of playing a game all by itself over there in the games that we're seeing. But you look at the rest of the market and there are some concerns. Look at the diversification and the difference between the DOW and the transports.
That's worrying to us.
Transports have been coming down pretty significantly. That's usually a key indicator and a leading indicator of what we're going to see in the markets. And so we're seeing that divergence come there. We're seeing cyclicals no longer being leadership. We're seeing other names start to come up now. Cyclicals are becoming leadership overseas. So we're starting to see a
pickup over there, but pulling it down here. And look a couple of weeks ago, Jonathan, when we were talking, Yu said, Victoria, where's the weakness in the market, And we've started to see that now since we spoke last time. You're seeing weakness in the consumer. Look at retail sales. We are actually flat with real retail sales over the last four months. Regional pmis, regional manufacturing reports are weaker as well.
There's different weaknesses that we're seeing.
Housing also, we've got a five percent gain in housing prices right now, which again all of this feeding into the idea that the FED is going to be very uncertain in its path forward, and I think that's why we'll have a vo little market going forward.
Lectoria.
Sometimes it's difficult to draw a distinction between a single name issue and a broader sector problem. Great example of that this morning is American Airlines. The name is down by more than eight percent. If had to cut the outlook, how would you distinguish between a single name issue in that sector and a broad a sector problem.
Yeah, you have to really take a step back and look at what's going on across the board. When we look at airlines and you know, we're not strongholders of airlines and our portfolios, but when you look at America and they have had some idiosyncratic issues going on there,
we know that they have a key individual leaving. That person was responsible for some of the revenue generationally around the credit card issues that they were having, where they have not succeeded like United has done, like Delta has done. So there are some issues specifically for American, but you also have to wonder if that travel sector that had such a huge comeback after COVID if that's going to start to pull back as we see the lower income
and the middle income consumers really struggle. I know in the little montage that y'all played, there were different voices in regards to whether consumers are doing well or not. But we are seeing those lower and middle income consumers struggle both in the balances they're carrying on their credit cards. You've got almost sixty percent of those lower middle income consumers carrying balances, and now they're turning to the buy now, pay later, which doesn't even.
Show on their credit reports.
That's a whole other issue where almost ten percent of those people are using it to buy necessities. So it tells me we're going to be struggling with the consumer, So that could flow through to the sector as a whole going forward.
It raises a question, what does it mean to be cautious? And we hear this a lot. You know, we're cautious moving up in quality. How do you even determine what that is? Is that just to continue to buy in video because they run the world. Is it to go into utilities that are increasingly thought of as an artificial intelligence play and that have been bid up or is it to go into the oil patch, which is often thought about as actually leveraged to the consumer, but seems
to be dancing to its own music. How do you view caution in a new world?
So, Lisa, I don't.
Think it's a specific name or sector when we say we're being cautious when we're looking for high quality names for us. That's in regards to the dependability of their earnings, the quality of their earnings, the cash.
Flow on the balance sheets.
I mean you look at the energy story you were just talking about with Conoco Phillips. I mean, they can do these deals because their cash flow is so high and so strong. It gives them the opportunity to make these acquisitions like marathons.
So you want to have.
Companies that have that cash flow, those earnings. That doesn't have to be in one sector or another. But I do think it means you have to be stock picking. You can't just pick a sector like you previously and say, oh, tech is doing great, let's go in. I mean you look at healthcare, for example, it's been down pretty significantly.
But you can find a specific name like Gilead that we own, or you've got, you know, a stock trading at less than ten times priced to cash flow, you've got amost a five percent dividend, and you've got strong earnings. Those are the types of names that we think fit into that cautious scenario.
It seems like a lot of cylinders in the United States are working for it in terms of the tech plays in Nvidia among some of the others. We're talking about oil, all of a sudden oil price is going up. Is actually not necessarily so negative for the United States that actually is becoming an increasing exporter and sort of
more self sufficient. You're looking at even some of the drug innovations, albeit maybe the OBC drugs launching from certain European con But I'm just curious, from your vantage point, is a US still the place to be cautious in.
Yeah, Look, we're we want to see some exposure in our client's portfolios to international because, like as I mentioned earlier, we're seeing some of the cyclicality in the market, some of those cyclical names, discretionary names doing.
Better outside the US.
So maybe you start to dip your toe in some of those international markets that are doing well. But when you look at the US, I do think you have to take that cautious approach.
And it doesn't mean you're not invested in the market. We are in the market.
One hundred percent, but you have to be careful as to where you're putting your money to work. Does it make sense to dump everything into those MAGS seven names.
Well, probably not.
We think we'll see some earning seterioration in those names over the second half of this year, and other areas like utilities, like healthcare will start to pick up. So being cautious just means be careful where you're putting your money to work. But we do think being in the US makes a lot of sense. Dipping your toe in other markets starts to make sense as we're seeing cyclicality pick up.
When you look at the hedge fund exposure to big tech, the Magnificent seven that you're saying, potentially you're seeing a little bit of cracks.
Cracks in twenty point.
Seven percent of hedge funds total net exposure to US single stocks that's what they account for now in these Magnificent seven. Do you think that's way too much?
It seems really strong, right, Henry.
I mean you look top five names in the S and P hundred are almost thirty percent, and you look at Semis, that's eleven percent of the SMP. A few years ago it was only two percent. So we've had this tremendous amount of growth in those names. It is one of the reasons why we remain cautious or do we have exposure.
Of those names.
We do, but we're underweight versus the benchmark. So you want to be able to take advantage of some of the gains there, but also be a little underweight because we do think we'll see a pullback and it gives us a little dry powder when we trim those names to go into other areas of the market. So it
does seem pretty heavily weighted. And as we all know, there is a difference between their waiting in the S and P on their market cap, and they're waiting in earnings as well, So you have to look at that difference and decide where you think it's the best.
Place to be.
Victoria busy morning, it's going to catch up passive White, Victoria Finande.
Is there a cross smock?
No, that's a remack around the table with us alongside New Veg's Tonny Rodriguez. Gens is going to see you Neil, let's talk about why you're still constructive on this economy. Why, Well, I.
Definitely think the trade offs are getting a little bit trickier for the FED. So I tend to think that, you know, we're still at the end of the year going to be talking about an economy that's growing, and how much has the FED been cutting? I still think that's really the name of the game. But you know, I do think that to me, it's not as obvi is that, you know. I mean, the FED goes around saying we have time, I don't have to worry about things.
I mean, you never have as much time as you think in hindsight, And we know that the risks with unemployment are always that their nonlinear in nature, right, So it's never just that unemployment goes up a little bit, It goes up a lot of bit, right, And so I think, you know, when I look at the when I look at what the FED is doing and the data as it's unfolding, I mean, all it really feels like they're doing right now is just taking the last few months of data and just extrapolating that forward.
And things can change.
And and I think that's especially true of the inflation data, and you know, I don't think you can really make a fundamental story for why inflation perked up. I mean, you can point to specific things here and there, right auto insurance, people talk about healthcare services, but generally speaking, it really boils down, in my mind, to what's going on with the labor markets. And the labor markets are cooling. I mean, I don't think that that's even a debatable point.
If you look at average hourly earnings for all employees over the last three months, it's up less than three percent at an annual rate. So if you believe that inflation's going to remain sticky, John, you need to start worrying then about a decline in real wages. And if real wages are contracting, then consumer spending will slow, and if consumer splending will slow, corporate earnings will slow. So
you know, I don't think that's strong. I mean, in the first quarter, you had this strong inflation data, and I think a lot of investors sort of said thought, Okay, this is reinforcing this inflationary boom narrative. But the labor markets, frankly, just are not in the same place as they were a year ago, and you need labor costs are basically one percent, so I just wonder where the inflation comes from.
So my sense is that if you want to be optimistic on the economy, you almost have to think that inflation slows down, because if it doesn't, then you need to start raising your recession probabilities.
Going into the pandemic, the Federal Reserve used to say things like we need to extend the signe cop and some of the language I remember phrase I think of his fiz check crowd at the time would say things like an ounce of protection was worth a pound of cure. Are you saying they should move preemptively and begin to reduce interest rates just on the margin surgically.
Well, I think, I mean, I think that's all we should really expect. I mean, I've been saying that they should be recalibrating policy, but I think that they should be focusing on what's happening with the labor markets. And the labor markets are clearly moderating, and so you're basically saying, you know, we're waiting on what like healthcare services, inflation to moderate, and some of these idiosyncratic factors. I mean, again, you know, to me, it's you know, and in many cases,
economics is basically like identity. Like an identity, things on one side of the equation have to equal things on the other side of the equation, and certain things just need to be true. And so in my from my perspective, I mean compensation growth should equal inflation plus productivity. And
what do we know about those things? We know that compensation growth has been slowing, right, no matter what you look at and all you know, job labor tournovers down, the number of people that don't have haven't seen a movement in their wages over the last year, that numbers up. If you look at quits hires, those have all moderated. If you look at posted wage growth, that's moderating. So we have a pretty good indication that wage growth is slowing.
If you look at across a whole number of industries, whether that's professional and business services, retail trade, leisure and hospitality, wage growth in those industries, particularly leisure and hospitality and retail trade, because you know, those are the folks with the higher propensities to spend, those industries are seeing wage growth at the lowest, at the low end of their range over the last year. So if compensation growth is moderating and productivity is normalized.
You don't really get much.
Of it, don't I don't think you can really make a very strong case for inflation other than.
You know, it's been strong.
But you know, Tony, I'd love you to weigh in on this. You believe that the disinflation story is true and you expect it to continue. But we're talking here a nuance because at a certain point, if it stays sticky at a certain rate, it can still lead to some real problems. So can you give us a sense of what the trajectory is and kind of where the margin of error is for the FED at this point?
Sure? So, I mean we can kind of agree with the idea that, you know, the wage the labor market is softening, and we think that's going to kind of flow through the wage pressures declining as we go through the year. Our view is that while inflation is going to continue to decline, it's going to do it really slowly. So it really was rapid in the second half of last year. We saw this spike kind of early in
the year that was really a surprise to us. I think in the man the market that inflation was so hot Our view is that we're sitting at maybe a two seven kind of PC level by the end of the year, so kind of flat to where we are now, maybe down a tenth. Next year we again move very slowly towards more like a two three, and getting back to the target is more of a twenty twenty sixth event.
So in that environment allows the FED to us be basically higher for longer because the economy remains pretty resilient while we're seeing that softening in the labor market. It's not under sub one hundred thousand jobs. It's more than one hundred hundred and fifty range rather than what had been a two hundred and fifty range, So still reasonably healthy macro environment.
What does hire for longer mean at a time where you've got tom Csaurus to Adam Posen saying basically, a federate cut here would be a policy error because of some of the inflation that could fuel later on.
Yeah, so RBS right now we have a real rate that's well over two percent. We think that one cut, maybe two by the end of the year is the most that we'll see. That kind of recalibration to us is not going to drive a spike up again in Inflation's just going to keep the real rate at a level that is not overly restrictive and therefore putting the labor market a greater risk than is necessary given the current overall environment.
Can we talk about what everyone's been talking about over the last several months, which is the supply side story, Neil, I know you've got thoughts on this. Allen Center and Morgan Stanley has made the point that this economy can get bigger without getting tighter. And what everyone's pointing to is the amount of immigration we've seen in this country. We' putting too much weight on the explanation as to what is developing in the labor market.
I mean, this is a very hot button issue, John, but I do I think that. I mean, America is not the only place in the world that's seen rising population growth or I mean, just look to our friends in the north in Canada. They've had very rapid immigration growth has to stopped their economy.
From not doing well.
I mean, if you look at per capita GDP and candidates in the toilet, so just because you have a lot of immigration doesn't necessarily mean that your economy is strong. So I really think the immigration angle is something that people are looking at as a way to work back. Lots of places across G ten have seen very rapid growth in immigration. What's not clear across all those countries
is strong growth. The US in that respect is the one that stands out, which would suggest that productivity in the US is the primary reason of why we've seen this outperformance.
I just asked me.
Although a lot of people are saying it's not just strong growth, it's that the growth came without the inflation as a result of wages climbing as much as people previously expected. That was the component of immigration that people were talking about.
Do you buy that. I don't follow that basically.
Because immigrants were coming to this country willing to work even for wages that were lower, or potentially that it actually kept down some of the wage inflation that otherwise would have been given the natural tightness in the labor market.
I'm sure you could find some I mean, you have seen some slow in wages, so maybe you know you can make more of a labor market case. But generally speaking, I mean, I think there are lots of other reasons beyond immigration that you know. I mean, for example, we're less exposed to what's going on in.
Ukraine and Russia than Europe.
Obviously, monetary policy transmits itself differently in the US because we have so many people on thirty year fixed rate mortgage debt. That's not the case in Europe. We had a very very robust fiscal response relative to Europe. And you know, I mean generally speaking, the US does set in my mind, productivity frontier for the world, so we're sort of on the leading edge of that. So there are lots of reasons for why the.
US is outperformed.
I think immigration, frankly, ranks very low on the list, and you know, I think that's shown in the fact that lots of countries across G ten I have seen very strong growth in immigration. Not every country has been enjoying the kind of economic performance the US has enjoyed.
The tunny Yeah, So our view is that the immigration was just very well timed. It's not a long run fundamental force. It's going to be a driver of growth and higher potential growth for the US or the next five years. Given immigration policy in this country is challenging, but the timing of it, which was above expectations, really helped ye, some of those pressures on wages, but going forward, it's going to have to be much more about labor
force participation. Helped grow potential growth for productivity remaining very high, which you know is possible with AI, but it's going to be more of a traditional either product or labor force participation that's second there's probably unlikely, so it's gonna have to rely on productivity in our mind.
Well, I mean that's.
That's I mean, that's a great point that it's temp It could be temporary, right, I mean a lot of the immigration that we're seeing could just be pent up demand from the pandemic. I mean, the visa approvals were basically shut down and then we reopened them, so you know, and now you have a lot of you know, foreign
born workers coming into the workforce. But that shouldn't sustain I mean, I do think it's interesting that you've you've you've started to see the foreign born workforce moderate a bit at a time when everyone's talking about it kind of kind of makes me think about what it means that everyone's talking about not being long duration and thinking rates are going to be five percent, Like what that means for the next.
Move But that's that's I think exactly where I was going to go tony, this idea that people saying that the reverse could happen, where suddenly that an immigration policy that would restrict some of the foreign workers and that would lead to a surge and inflation. Do you not buy that? But there could potentially be some sort of post election increase in inflation expectations that could really challenge the bond market.
I think it'd probably be more likely to come election related. It'd be more likely to come from maybe potential texts changes that occurred. What happens with those texts changes are going to either roll off or not. Then necessarily integration policy. Immigration policy might take I think a little longer to work through. And we already have a labor market that's softening. As Neil pointed out, there's lots of metrics that we
look at that say it's softening. So I don't think it'll be from the labor side that we might get that inflationary impulse that's election related, which.
You expout to say this in Pyros next Friday that deceleration continued.
Yeah, we would say that we're probably likely to see a two hundred or below number rather than moved back to two fifty. So it's not a week labor market, it's just one that's not overheated like we were.
Fun with new Yeah, I would just say, I mean, you know, Lisa, you mentioned immigrations taking the pressure off of wages. I mean, let's be clear, excess labor demand has been slowing very rapidly, as proxied by job opening. So it's not just oh we have all this supply. I mean demand has come down. You know, businesses are trying to get the most out of their workers. They're not really trying to go out and hire more workers.
And I think that's very important because that's what's keeping in a labor costs in check, which we'll, in turn, in my opinion, bring inflation down.
Interesting payrolls two fridays away. The estimate in our survey at the moment of sneak pee for you one hundred and eighty k.
The previous number one seventy five. No data.
I've ren mac Tany Rodriguez, Nuvin gents, thank you, and Michael McKay's wall Thank you, sir.
One.
I guess now really pleased to say it's Tom Steyer, co founder of Galvanized Climate Solutions and author of the new book Cheaper, Faster, Better, How.
Will Win the Climate War? And I've got that book alongside me.
Tom.
Good morning to you, John.
How are you?
I'm good.
This is a hopeful book. This is constructive. Can you walk us through the essence of what I'm holding this morning?
Sure?
I mean, basically, what I'm saying is that the news from the natural world about climate change is worse than most people know. And we read that virtually every day. There's a new study saying, oh you know, do you know what's happening in the Amazon? Do you know what's happening in Antarctica? Do you know what the temperature is around the globe? But what people don't know and what they don't see. But what I see all the time
as an investor is the technology response. And what we're seeing is an amazing response in terms of the ability for clean products to win in the marketplace on their own. That's why I called the book Cheaper, Faster, Better. That you have products that people choose of their own volition, for their own reasons, and that's happening across the globe. What we say in the climate response world is we're
not looking for a silver bullet. We're looking for silver buckshot, literally hundreds of ideas, hundreds of companies that in fact are going to solve this problem in the marketplace.
We're winning in the marketplace, and we really have to keep that momentimum.
Do you think government is helping or getting in the way?
Well, I think there's I'm sure your question really is focused mostly on the United States, and I think the Biden administration has passed a series of legislations that most Americans do not know anything about, but which are designed to make clean technologies, the production of them and the sale of them much faster. And so in that ways, government,
the US government, has held a great deal. But what's true is this is an international problem and we really need international cooperation between countries, with America in a leadership position, so that we have the same rules, the same standards, the same measurement around the world.
Let's talk about one industry which is in the headlines every single day, and it's EVS And you know where I'm going with this. We've talked about this all morning. This new BYD hybrid with a super long range of two thousand kilometers thirteen eight hundred dollars, and the policy of this administration, and the next one of is Donald Trump Volume two is going to be to put up the walls make it really difficult to buy that car.
Do you think China has comparative advantages to tackle the things that you're concerned about that we should embrace.
So I think that China has a very troubled economy and they are using the power of the government to try and win in the clean energy arena to create jobs and some economic momentum. So do I think that BID gets advantages that in effect it is unfair competition between BID and American car makers?
Sure, I absolutely do.
Do I think that a thirteen thousand dollars car that you can drive to Miami from New York is a game changer in terms of clean energy? I also think that do I think you guys have been talking, we're just talking all the time about I think they call it inflation. It sounded like the nineteen eighties in this room. Every single.
I mean crazy.
Attention to every single bond auction. Yeah, okay, Well, you think a thirteen thousand dollars car make the difference in terms of the inflation equation?
Absolutely, it does.
So when we look around the world, this is a global problem. It requires a global solution. China is the biggest emitter by far, almost the third of global emissions. It is also the country which is focused on winning this from an industrial standpoint, you know, leading in terms of solar panels, evs.
And everything else.
So you know, as far as I'm concerned, from an American standpoint, we have to compete in this. This is critical for US game on. But everything we do in that will in fact help save these there's all this crisis.
There is ultimately a question though about industrial policy in places like the US and Europe is less efficient than say, having it all in a centralized place that's perfecting it. It's not advantageous to us competitively, but it isn't necessarily going to advance the aim of trying to get to a cleaner world. If everyone has their separate industrial policies,
that's competing and duplicating all of the processes. I mean, how much do you sort of embrace just some of the cheap goods and how much do you say NOE national security prompts some of the environmental concerns, at least for now.
Absolutely I get that. I mean, at my heart, I'm a believer. Maybe it's from my econ one oh one courses decades ago. I'm a free trader in the sense that, yeah, the world produces the products in the places where it's best to produce those products, and American consumers get the advantage of that, and we do the things that we do best. And you know, the issue is, Okay, that's how the world equilibrates. China is dumping. That means they're
giving us stuff very, very cheap. That's really hard for us to compete with sometimes from an industrial standpoint, but from a consumer standpoint, from an inflation standpoint, from a environmental standpoint, that's a gift to the world.
So do you think that there is too much of a sort of industrial policy on a regional basis and there's just embrace free trade, or do you think that right now is a moment to lean into developing and competing on a domestic front, even at the expense of the advancement.
What I can see when I talk about silver Buckshot, that is hundreds of companies doing hundreds of different things, and all of them growing like a weed and creating a lot of jobs. So I'm not worried about the United States abilities to compete. I know we can compete, and I think when I look around the world, I mean, look at let's just take a step back. So cars,
you guys want to talk about cars. What is the car company in the United States that has grown like a weed that's worth hundreds of billions of dollars, which isn't in Detroit? Okay, So if we're really trying to protect the status quo, which is what I hear you guys saying, is we need to protect the status quo the existing companies. That's really hard to do. Like the companies that are going to succeed are the companies that
are going to be on the cutting edge of the cheapest, best, cheaper, faster, better. Okay, let's produce the cheaper, faster, better products. And let's what we're saying is we need to protect these jobs that exist in companies that aren't evolving fast enough. Now is
it true that China's dumping? Yeah, and when you say they have better industrial policy, I would excuse me for saying this, but really because I'd take a look at the little deeper at their economy and say, wow, they've really messed things up to a fare thee well.
To this point, how much can this be done from central planning, you know, especially through the idea of subsidies for electric vehicles at a time when a lot of people are saying hybrids probably are the better, more ecologically friendly vehicle, so.
Then they'll buy them. That's my point. How are we, I say, cheaper, faster, better? How will win the climate work in the marketplace? Letting people make their own decisions. I don't like central planning, you know what. I think three hundred and thirty million Americans are smarter than any group of central planners in the world, including in Washington, DC. Let the American people decide. That's why I love capitalism.
It's disperse decision making. It's like democracy in economics. Human beings get to make their own choices for their own reasons, and they're smart.
And that's why. That's how we're going to win.
That's how we're going to save ourselves, and that's what we've traditionally done.
We've done that.
We've heard some automakers compare and complain about some of the things you're talking about, and I think it is important the automakers are saying, ultimately we want to leave it to the marketplace, but the government is setting these targets that we can't reach because the infrastructure does not exist. Yet we get and get back to front. We've got it the wrong way around. What would you change tomorrow about the policy towards say EVS and the build out.
Well, everybody's focused.
To be fair, you guys are really focused on EVS, which is playing two three companies in the United States that are very old that in fact did not lead the ev revolution, in fact tried to push back against the ev revolution for a really long period of time, right, And the company that actually leaned into it was the one that sells many more Yeah evs than any other.
Company in the United States.
So doesn't that making my point that in fact it's about innovation, it's about change, it's about being in the front with the product that is in fact cheaper, faster and better. That that's how we win, and that trying to protect protect people from those forces. You know, I always say to people, say, what will happen if there's a Republican administration? I say, you can't stop people from
buying the cheap, good product. You know, it's the old story about King Canute putting is throne in the middle of the waves and telling the waves to stop coming in.
Yeah, good luck that you can't do it right.
So do you think we're overemphasizing the importance of who's in a white house for this transition?
And if that's the case, it's important. Should it matter who's important?
But not for the reason you're saying. Go on, tell me why, Because what I'm saying is economics. Trump, you know, wins, the good products, the cheap products win. But this is a question about global response, not American response. You were seeing it through American eyes. This world is a lot bigger than the United States of American. It takes it and so we need international cooperation so that the Chinese companies are held to the same standards as American companies, so that around the world.
Okay, China is trying to win this industry.
They're by far the biggest a minter of greenhouse gases, and their greenhouse gases went up five percent last year. Their greenhouse gas increase was more than the world's increase. So let's be clear. If we do the international cooperation, that's how we get a level playing field if we measure emissions so people know right down through their supply chain. That's how we get every company on the same playing field. That's under Republican administration. Do I think that will happen.
I would be very skeptical that a Republican administration believes in international institutions, in international standards, in building the information systems to make all of that possible.
Maybe I'm revealing too much, but I remember being a ten, eleven, twelve year old and learning about the deforestation of the Amazon and not being able to sleep at night. And then, you know, as I got older, reading all of these things about global warming and just it we were all evil and you know, all contributing to the.
Rapid destruction of this globe.
And it made me kind of tune out after a while, because if I wanted to sleep at night, I wanted to feel like I could actually have a normal life.
It was hard to even pay attention.
How much is that making it difficult to really get people engaged, to really get the investment strategies to continue with ecological sorts of focuses, because we've seen a lot of pullback from that.
Well, Lisa, that's why I wrote the book to have Lisa sleep well pretty much, and to.
Say that I deserve to get paid for it. I'm just I'm not even going to go there.
It goes without saying. For goodness sakes, John, that's obvious.
You know.
My point is this, Look, there are two big memes in America about energy and about decarbonization and climate. And the memes are one, We're an oil and gas driven society and that will always be true.
That is not true.
That is absolutely not true. Every country in the world, every single country in the world, has agreed we need to get off oil and gas, that we need to get off fossil fuels. And the second one is we're in a doom loop, like we are destroying the natural world. We can't stop ourselves from destroying the natural world. You know, all the terrible things are going to happen. And the point of my book is, now, this is a huge
struggle that we all need to join in on. But we have the tools and the abilities to win it. We will inevitably win it, but we have to win it as fast as possible. Basically, to create a safe society, to avoid almost unimaginable human suffering, but also to have American lead a new century in terms of doing the right thing and winning. So in terms of the Amazon, the Amazon has been providing a service to the rest.
Of the world for free forever.
It's the so called lungs of the world, and thirty percent of it's in drought now, which is a huge problem. But what we need if we have the international measurement systems that I was talking about. Basically, it's a system for trying to measure value being created and trying to move money to compensate people for doing all the things they're doing for each other for free, and charge people for doing all the things to hurt other people for free.
That's really what we're talking about changing in this world.
Tom this was thoughtful stuff and hopefully we can catch up again before November. I have a bigger conversation about this selection. Thank you, sir.
Just remember we can win this.
We will win this.
We should keep our chins up and let America do its job.
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