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Peter Sheer talking about similarly November as an incredible year head of macrostrategy at Academy Security, is an incredible year that may or may not be repeatable in the coming year, that is December. How much do you lean against some of the moves that we saw last week, Pete so one.
I'm starting to lean against tragedies a little bit. I think four twenty is a little bit too low given the data. I don't like the fact that either ten year real yields are right around two percent or five year five year break evens are back to right around two percent and its Last month's FED meeting was really about marketed done the work for the FAD. This month's meeting is going to be about well the market undid all that work, so I think rates have got ahead
of themselves. On the equity side of things, I think we've seen for the last couple of weeks this move where the Russell two thousand disruptive stocks have outperformed from the broad indices, and I think that actually continues into you're at.
Peter, you're so good at use of cash, and I want to go to the use of cash right now of one mister and missus Zuckerberg Bloomberg reporting on the sale of the Zuckerbergs of a very large amount of Facebook shares. It's a little bit smaller than what Peter share has in Meta if you will, but they are out right now with some news on that, and Peter,
I think this does get the use of cash. It gets to dive, it an increase, it gets to share buyback and maybe executives unloading their stock after in this case one hundred and seventy two percent surge.
Peter helped me here with where we are in use of cash.
If we see people like the zucker Berg's selling shares.
Listen, I think we've had this phenomenal run in the Magnificent seven. The leadership has been very narrow all year. People have been talking about that and since November ninth, and we brought up I think last week and video earnings were very telling as well, and video earnings were probably five. Stock went down, but markets rallied and I'm really looking the disruptive stocks are doing well. You see
Spotify up there today for various reasons. I think you're going to see regional banks continue to do well, commercial real estate Russell two thousand, all the small caps, all the things that people have left behind. Is people are trying to think out where do I put my cash right now, especially if you missed five percent on the ten uere. Those kind of look interesting. I think have some momentum coming at a year end.
I'm absolutely fascinating, Peter, let's meld the two together. I mean, are we going to see bond issuance to support equity ownership. I mean, whether it's the miracle of Zuckerberg's and Facebook up, Meta up is well, I mean, I think it's almost a jumble into next year.
Yeah, I think we are going to see more bond issuance. If you know, we've been certainly talking to some of our corporate issuers recommending that they get out ahead of this right we are at ten percent or sorry, five percent. On ten years, we're at four point two percent. You can save some money there. Credit spreads have actually done very well. We're at the lowest spreads all year. So
issue some bonds support your equity. Also, I think we could see some M and A activity finally start picking up. It's been look at. At the end of the summer, you might get a bit of that. But now you've had this stability reasonably long enough, I think you get some interesting transactions done coming into the new year.
The phrase from twelve months ago and Lisa, I give you you coined this. It's almost a toxic brew of risk on is where we are.
Which is the reason why a lot of people might say it might have gone too fast. But it's hard to lean against Peter. Just to Tom's point, the news is that Mark Zuckerberg is selling MetaStock for the first time in two years, and this comes after the incredible run up, and you're seeing the shares in pre market trading down about one and a half percent on Meta. It raises this larger question of what do you lean against. You said you think treasury is at rates have gone
too far. A lot of people, I think are starting to pick that up, which is maybe why you're seeing a bit of a retracement today on the equity side. Are you hearing anyone lean against some of the tech names that have gone incredibly far so far this year and frankly the year that was November.
I'm not sure if many people are actually leaning against them. I think it's still a fairly crowded trade to be long those, but I would be very comfortable being short QQQ, so the Nasdaq one hundred versus long IWM, the Russell two thousand. I think trades like that are actually well positioned for the next few weeks, and at some point I do think we probably want to turn barish on this market. Maybe we get to forty six fifty on the S and P, maybe the Russell two thousand can
run another five percent. But if the economic date it starts coming in as week as probably needs to be to support for twenty ten years, then I think equities are going to roll over a little bit. But that's probably not this week, next week. That's probably closer to the end of year, early January.
So how would Russell two thousand outperform Nasdaq in that scenario, right, because at this point, if you start thinking about weaker economic growth that supports the on call Why then with some of the most leveraged to the economy companies, the smaller companies do the best.
Because I think people have been avoiding those stocks all year long and crowded into the other stocks. So it's all going to be about what's crowded, right, And if you start getting nervous about the economy, people are going to turn around and say, oh, we've got to cut our wrist. Well, guess what if you don't own a lot of Rustle two thousand, you can't sell the Russell two thousand, So you're gonna wind up selling what you have. And I think that's just the nature of this market
right now. That's the crowded trade. That's where people piled into. So if we get nervous about the economy, that's actually going to sell off harder because that's where people are overweight.
Peter, we're's sixty forty twelve months from now.
No, probably where it's always been. That's kind of has this attraction. That's one of the things that kind of just keeps on going along with covered call writing people like those strategies. I think you want to be probably underweight treasuries right now in that sixty forty. You want to be more towards the front end because I think the next move should be slightly higher and yields back to four forty maybe on tenure, but you still want
to play around that. You want these balanced portfolios, and you want to also see what can we do outside. Actually for the first time in multiple years, for the last two weeks and hasn't been working yet. I like Chinese stocks more on a trade. I think long term I don't want to invest in China, but for a trade they're fair.
Peter, thank you so much for the comments, particularly they're on Meta as a Zuckerberg's unload stock as well.
We're in good company right now.
An FX George, Sarah Bellos's global head of FX research at Deutsche Bank. George, throughout your note, there's this speed towards very weak inflation, in abrupt disinflation. How do we play that in foreign exchange?
So I think tom next year is still going to be about these policy gaps. Which central bank is going to cut first and which one is going to lag or is it all going to be symmetric.
And the way I think we're being.
Set up for next year is that the DC is most likely to go first. If we look at the most recent inflation data, I would argue that ECB should actually be cutting next week.
Inflation. Core inflation over the last three.
Months is running below one percent, so we're not that far away from having to start thinking about deflation risks when we're discussing Europe, and of course the economy is also at best instagnation, so I would argue the market is right to price more ECB easing, but perhaps versus the US is getting quite ahead of itself.
It's George, you've got some aggressive calls on both central banks. Now, then you've got a call on the Federal Reserve. You and a team I think one hundred and seventy basis points one hundred and seventy five basis points of cuts starting in June next year. Now, George, is a range of forecasts, as you know, for next year, but that's certainly not consensus. Can you explain to us all why you think we start in June but go a whole lot deeper than a lot of people think.
Well, I think John Back goes back to the recession versus as a soft landing debate. And now, if you look at what the market's pricing at the moment, we have FET funds going to around reasonable elements of neutral, slightly above three percent. So the market is perfectly priced for.
A soft landing, so to speak.
So I think if we're looking at next year, the strongest wee I'd probably have is this bond equity correlation, which has been very positive. So you've had higher bond prices and higher equities at the same time. That's very unlikely to last because you're either into a soft.
Landing and therefore you can't price lower FET funds anymore risk and continue going well.
But if you do go into recession, then you'll you can most certainly price more cuts, but it's not.
Going to be possible for equities to still value.
So the last three four months have been great from an masset perspective because you've had this bond and equities.
Going up at the same time.
I think that's going to be very difficult to repeat itself for next year.
That's on the US side. I want to just get you to elaborate a little bit when you're talking about your belief that the ECB should cut next week. You think that the Eurozone is facing deflation and that that risk is rising. What do you think will be the follow on response if the ECB goes ahead and does that. Do you think that they could then engineer a soft landing or do you think that they could just avoid the depths of a pretty significant downturn that you think hasn't been fully recognized.
So I think it's important to distinguish between growth and inflation, and in fact, if I look at Europe, I would say it's the perfect definition of a soft landing, because what you have is growth are slow down and at the moment it's around zero. So we're debating maybe we get one or two quarters of neck to GDP. But as long as the ECB cuts, and I need to be careful of what I say, I think they should
be cutting next week, I don't think they will. I think it's more likely precisely because they were late on the way in, so to speak, they'll be late on the way out.
But as long as the ECB say.
Cuts by March April, I think actually Europe's going to be in a relatively okay place where the economy soft lands and inflation comes back down to two percent or potentially below, But that's actually pretty good outcome. It's also quite a negative outcome for the exchange rate, but given how quick inflation is coming down.
Probably a week of euro is not a bad thing for Europe at the moment.
Cheorge over the weekend was a lot of zeitgeist hope in prayer of a strong yen, off of some form of policy change in Japan, a way for people to make big, big, big figures fast Do you buy it?
So there's two ways to get a strong yen.
One is that the back of Japan finally starts a proper hiking cycle. And what I mean by that is they say they're going to start hiking every meeting. That looks pretty unlikely, especially as the rest of the world is moving into an easing cycle.
So I'd probably say that's the least likely outcome. But if you are in an environment where the.
Other central banks are starting to come because inflation has come down, then you can get yen strength because it will be the outlier, so to speak, on the way out as it was on the way in. So I've been much more inclined to think about your strength from the global perspective rather than the domestic Japanese perspective.
Dear Christaine, George thinks you will count next week. What do you think, George? And I don't worry it's not being the headline. George sara Velos at Deutsche Bank. George, thank you.
Right now we are going to look at the climate affairs of Dubai and this was the World Bank in transition from David malpass over.
To mister Rogan.
What's so important here is his corporate work with Neslie And I'm Domestercard and the general elector with a conversation with a president of the World Bank, are Jen Zabajaja in Dubai?
Jen?
Yeah, thanks so much, Tom a Jay. They were just Tom was just giving you a really great intro there about how your previous career. Now you're at the World Bank, and let's just talk. In the first few months of your role, you've made climate finance a priority. I mean, can you talk to us about where you've seen progress and whether you think this is really a turning point for this discussion.
You know, I think it's very important because the reality is that you've had the hottest year on record, we're aiming for another hot year.
Clearly this has to change.
And you can't make climate and fight the climate issue without money coming to work on it.
So it's one of the most important things.
When I traveled around the world, I picked up the impression that dealing with poverty cannot be by itself. You have to deal with climate, pandemics, fragility. These are all intertwining crisis. That's why we change our mission to include livable planet in addition to eradicating poverty. So this is what we're on and what I'm trying to do here to show you the progress, is to make a commitment that we will get to forty five percent of our
financing annually. We'll go to climate by twenty twenty five, two years from now, not ten years from today. That's forty billion dollars a year working on climate finance.
How do you do that? How do you adjust your balance sheet to ensure that?
Yeah, the good news is there's also raising capital along the way thanks to this whole capital adequacy framework with the G twenty Goddess going with and we're also doing things like looking at whether we can securitize parts of our baran sheet, existing balance sheet, free up some capital, and then partnerships so you don't really do all that
financing yourself. You can also get partnerships going. You know, I have great partners with the other multilateral banks, AI, eib EBRD, these are all people who work with us. So there's multiple ways to go at this. But at the end of the day, the much bigger issue here is, even if I do all that, even if the other multilateral banks do what they can, even if governments do all they can.
You do need the private sector.
You're going to need their ingenuity and technology and numbers, right.
And that's what you've been spending the past few days talking a lot with the private sector. This is your first Cough, can you talk to us about I mean, give us a sense of what it's like in the room where there's consensus and where there's still gaps within the private sector in the collaboration.
That's a great question.
So the private sector issue is the private sector now knows that's solar and wind power per unit is cheaper than fossil fuel. That's proven with scale and technology. They know that it takes longer sometimes as a gestation period, and they know, they may have some higher capexet front because they've got to build grids and you can't just build the installed capacity, right, So they understand that. So why is it then that they aren't burning down the doors of countries to go do this?
For two or three reasons.
One is does the country have the capacity to absorb this kind of projects coming in?
Can they connect the grids up? Can they do all that?
But second, much more critical is the two kinds of risks that private sector investors don't like because they don't understand. They don't understand political risk and they don't understand foreign exchange risk in the emerging markets.
Now, political risk we can help it.
We have this this institution called MEGA our Interviews or our Guarantee Agency. We've now got approval to use that for every multilateral development bank. They can use our back office to issue guarantees. This does political risk guarantees and then lays them off in the reinsurance market.
We need to scale them. It's the FX risk that's the much harder.
Well, how do you get around that? I mean, because that's not going away in a lot of them right now.
So in fact, people keep talking about local currency markets is the way to do it. The reality is developing a local currency market. The right depth and width to be able to do this well can take five ten years.
We don't really have five or ten years.
So I think we have to find instruments like could we do some local currency bond issuance that we subsidize the difference in costs through our balance sheet or our concessual financing. Can we do things with others where there's an institution called TCX which is created to help take some of the FX risk in these markets. Can we scale them up and so on and so forth. Can we do creative swaps where using our rating we are at a lower price and of the country world.
Hard FX risk is the hardest one. Yeah.
I mean, so then a Jay, when we talk about the progress, then at the end of COP twenty eight, your first COP, I mean, what does that look like for you? What is it that you're shooting for? Because there have been a number of initiatives and pledges, of course the World Bank has been a part of some of those. I mean, what then does progress look like in the next few days.
So I've got five very clear things I'm measuring on what we are doing. And the first one was getting that forty five percent of financing that we talked about in that fifty percent for mitigation, fifty percent for adaptation, So we don't only do emission avoidance. We also care about adapting and resilient infrastructure in the global cyll thing that's very important.
The second big one is methane.
Methane is eighty times more toxic than carbon dioxide, but it only gets two percent of climate financing. So what we are doing is we've got actual projects on the ground on rice tidy cultivation, livestock management and waste management. Is scaling those, is saying we're going to get to fifteen countries in eighteen months and over the course of these projects take out ten million tons of methane from the system.
Third one is Africa. Six hundred million.
People in Africa don't have access to electricity. We've got a project approved by our board five billion of finance from IDA, our lowest price guarantee kind of the cheapest fund location, ten billion through governments in private sector. We're going to connect one hundred million people in seven years. Two power solar power, including the grids that need to be existing to make this happen at scale. The fourth
one is voluntary carbon markets. So I think the only way you transfer resources at scale from the developed world to the developing world for what the developing world deserves to be paid for, which is forests and natural resources, is voluntary carbon markets.
So there's a lot of criticism about carbon market.
Yes, there is, because people felt that the credits were coming weren't genuine credits. So you just picked on exactly the topic that's really important, verifiable genuine credits of integrity. How what determine whether these markets will work. So what I'm doing is I'm not doing a carbon market where I'm not involved. I'm doing carbon markets with projects for the World Bank is doing a forestry project in a country. So we're starting with four to fifteen by the end
of next year. We think these countries will generate twenty four million credits next year itself, in one hundred and twenty five over five or six years. I'm certifying the environmental integrity through a jurisdictional loudic and I'm also certifying the social integrity that most of the money they earn will go to the communities and the indigenous.
People in that area. I think if you do things like that, and you.
Do them with consistency, you will create the right kind of carbon markets for tomorrow.
You're only getting five bucks the.
Credit right, so yes, but still a lot to go. But glad to have you here, Bloomberg. Excuse me, A j Bonga with the World Bank, A Ji, thank you so much.
For your time, Thanks to join, Thank you, Thanks very John back to you, Hey, Jen, thank you. We've got to go, Jennifer Sabazangi there and at Jack Banker the World Bank President.
David Turk joins us now with Secretary Grand Homiees US Deputy Energy Secretary David thank you so much for joining us, and you do so with your service to the nation of six seven and eight jobs in climate. The immovable fact is we're trying to do something about coal. My latest reading is China's really not doing something about coal. What is the Department's timeline in America to diminish coal usage?
Well, first of all, Tom at Lisa, thanks for the time, and I really appreciate you being being with you today. So we've got to look across the board. It's not just coal, it's natural gas, it's oil. We've got to look at all the sources of emissions, and we've got to have a plan to build all the new clean energy. And this is what we've got in the US. We've got historic levels of funding through the pieces of legislation,
the Bipartisan and Infrastructure legislation, the Inflation Reduction Act. We're building out our clean energy future like never before in our country. It's quite staggering.
We're what we're doing.
I go with that, and of course, of the ft this morning, a huge difference between a complete, compte, complete climate commitment in Europe to the fractured battle you fight every day in the United States. But to look at coal is one example, particularly with the Chinese just ignoring the debate on coal from everything I read, what is the administration's path to shut down or diminish coal usage across America.
So we've seen dramatic declines in coal in our country and that's projected to continue going forward. It's because we have cheaper, better alternatives solar and wind. On the solar penetration we've got in our country, the wind, other clean energy technologies, they're just simply cheaper and better, and so the market is reacting to those incentives.
David, I'm looking right now at WTI crew treated on the IMAX at seventy three dollars and forty six says this is a good time to start refilling the strategic petroleum reserve.
So we have been and we're going to be optortunistic and we're going to take every advantage when the price is at the right level to make a good deal for taxpayers, we're going to refill. So we are refilling as much as we can. We've been doing that for the last several months, and at this price level, we'll keep doing it.
And it's been about three million barrel a month purchase that the Energy Department has been making. Do you plan to accelerate that though, as prices do continue to fall.
So that is the physical limit of how much we can buy back. We've got some lifetime extensions in some
of our caverns. We actually have four separate facilities for separate sites for our strategic petroleum reserve, so we will be doing at least three million barrels, and we hope we can bring more capacity online at these price levels to buy as much as we can to refill to make sure we've got that available when we need it in the future, so we'll buy as much back as we possibly can, but there are some physical constraints given the way the caverns.
Are set up.
We've been talking a lot about some of the consolidation in the shale patch, with a number of companies coming to the latest coming this morning. Is a thing from the Energy Department standpoint or a bad thing.
So as you know, a lot of decisions that are made in the energy sector, certainly in our country, or private sector decisions along those lines, and we're certainly seeing that happen as well. I think one good thing we've certainly seen is a focus from a lot of companies, including here at the Climate Conference, on reducing methane emissions. This is something we've been after for quite some time.
Our EPA colleagues recently announced some big news here in terms of the new regulatory structure to really do what's the biggest no brainer I think in the history of no brainers on climate is reduced methane emissions in the oil and gas sectors. So we're really stepping up on that, and we're seeing some companies step up on that beyond what they're required to do in the US.
I'll take your point on it. There's some real traction on that, you know. I want to go back here.
You are an advisor fresh out of Virginia to Senators Biden, Senator Conrad, You've had eighteen jobs and energy. You've arguably, David Turk, Republicans and Democrats have more experience than anybody breathing today.
Hey, how did we.
Get to being an opex sized oil nation all of a sudden, We're like as big as a rocker.
You know, I'll let you decide what it is.
How did we get to this hydrocarbon success that America is today?
Well, first of all, Tom, thanks for the compliment. I'll make sure my mom sees this. And here's such a nice, nice compliment. I think the short answer is, we are a private sector market. Unless you have federal laws, federal restrictions, the private sector will do what the private sector will do. And they found a lot of profit and a lot of opportunity, including and especially in shale in our country.
What do you say to the critics of the Biden administration that it is not private sector centric?
So look at the numbers, look at where the production levels are at. We also need to of course, focus on the emissions coming from all of that oil and gas, not only that produce in the US, but around the world. And one disappointment I have to say here at the Climate Conference is, while we've made some progress on methane emissions, that's a big deal, I don't think there's as much focus as there needs to be on oil and gas Scope three emissions. That is, those emissions produced when that
oil that gasoline goes into the atmosphere. Scope three emissions are actually ten times the amount of Scope one in Scope two for many oil and gas companies. So we need a lot more focus on Scope three emissions. We need a real credible plan for dealing with those emissions.
David, does it make it kind of awkward for the US to have a leadership position in reducing emissions at COP twenty eight given the fact that US production has increased to a record pace, even as it's cut in places like Saudi Arabia and cutter.
So I feel incredibly proud to be part of this historic Biden administration when it comes to climate change. In fact, we're actually seeing our emissions decrease in the US three percent in twenty twenty three, despite GDP growth healthier than
just about every other country in the world. And what you've seen is with the historic pieces of legislation all we're doing in this administration, we're expected already, just in these few short years of policy to actually double our emission reductions by twenty thirty forty plus reductions just from the actions from this administration. That's an impressive record, and
we need to do more. All countries around the world need to do more given the climate challenges that we face, and we're already seeing in our world today.
David Turk, thank you so much.
She is a deputy US Energy Secretary, of course from Dubai. Looking at United Delta and American Airlines is Helene Becker, senior research channel is TD Cowen. Why did this happen? Is this too many dinosaurs mating? What's the why here versus UNI, Delta and American?
Hi, tom So, I think the why is twofold. First of all, this is a continuation of the consolidation we've seen in the past for the industry, but also during the pandemic, we didn't have the consolidation we probably should have had we had the government stepping in to save the airline industry, and unfortunately they couldn't save everybody. So
now you're getting that wash out. And I think for Alaska and Hawaiian specifically, it really will help them cross the bridge to the other side of the river, so to speak, where where they'll be able to survive as a consumer.
Brand away from the financial part.
Helene Becker, where is the where is the flight that really is going to add value?
Here?
Is it lax to Hawaii something John's taken a million times? What's the fly where you thought, Wow, this is where the synergy can happen.
Yeah, I think it's more Hawaii to the mainland for people who come. First of all, Hawaii, as you know, is very remote. I think it's the most one of the most remote places on Earth and one of the hardest to get to. And so for people who live in the islands, they do tend to go either inter island or to the west coast. They don't really reach too much into the mainland, and if they want to, it's usually a one it's usually more than a one stop flight. For Alaska, it gives them the opportunity to
be bigger. I think the combined airline will have over three hundred aircraft revenue will be about thirteen to fourteen billion dollars, So it's not like they're close right your comment before about American Delta United, those are fifty billion dollar revenue companies. These are small and they serve a purpose. People fly them. They fly eighty eighty five percent low factors. They both deliver a great product. You're not really changing a whole lot, unlike with Jeff Blue and Spirit, where
you're changing more. Not to say that merger shouldn't occur, but we're looking at airlines to your right again, to your point, be four Hawaiians up what one hundred and eighty percent pre market, and that's primarily because under five dollars, the market's telling you these companies can't survive. And we have a lot of airlines in that under five dollars trading range right now, and so we're seeing that consolidation that should have probably already occurred.
It's a direct Newark Hawaii United.
No way you can fly directly from it.
You can fly direct from Newark on United.
I did not know.
Yes, it did give me a break.
Let's get into it a line. Not that the important stuff Jet Blue and Spirit. How do the between Jetlu and American Airlines crushed? What will they allow? What won't they allow? We can see this morning that Alaska are making a very clear statement that they don't think this is anti competitive. They're complementary businesses. The overlap is only twelve routes, three percent of their total seats. Can you frame for us what is allowed and what isn't?
Yeah, I think this Justice Department doesn't like anything big. And it's not like these guys were going to be big. Jet bluin Spirit isn't big, right? They go to be the fifth largest, Jet Blue spiritus to be the fifth largest, Alaska Hawaiian is going to be right in there, five six, something like that. It's not like we're going to take over the fourth largest spot. Jet Blue and Spirit are nine percent on a combined basis. This is even smaller.
So I suspect that if they look at this on a I don't know the right word, just the way they should on a not with a jaded eye where they're just looking at it, does this deal makes sense? They should come away with yes, this transaction does make sense.
Well, Helene, just to put a bow on that, if they approve this transaction, do they have to approve Spirit and Jet Blue.
Well Spirit Jeff Blue should have is where it belongs. Right, they're in court closing arguments start tomorrow, should take to the end of the week, I would think if even that long, and then the judge renders his decision. So, I mean, the one word answer releases yes, they should just move on and go fight other battles.
How much is this going to be some sort of consolidation of aircraft's, consolidation of workers, consolidation of operations, and how much is it going to be just the actual geography of these places. People go to Hawaii in the winter time and people go to Alaska in the summertime, and they can offset each.
Other right exactly. So two things there to think about. They're both kind of bucketless trips. Right from the mainland, especially the East coast. It's fifteen hours NonStop on the United flight out of Newark. Hawaiian flights out of JFK, they used to fly out of Boston. That flight I think came back post pandemic, so they do fly here on a NonStop basis, but those are a fifteen hour flights, so those are bucketless strips. If you're coming from the
East coast. In terms of operations, they said last night that they're going to operate the two separately, one operating certificate, but two separate brands, sort of the way hotel chains do it, right, you have fourteen or fifteen brands under one major holding company. Same thing here. They're going to just operate Hawaiians separately and Alaska separately because both companies really do have great brands and they're well loved by the people who fly them a.
Lot Alane, Just to wrap things up, to get your topic, the airlines have bounced recently, but it's still some twenty seven percent from the attitude we hit back in the summer.
Do you like that?
Yes?
Like part of that line. What is your topic? At the moment?
We have busiest day on record for US Airport's only a couple of Sundays ago and these stalks over the last few months. Yes, more recently of rally, but it's been difficult since the July peak.
Yeah, people have been worried about the consumer recession, et cetera. So our best idea for twenty twenty three was United and our best idea for twenty twenty four is Delta.
Why the change lane.
So the change primarily came for two reasons. One, United it's been our best idea for the past two years and it's mostly worked. But they're embarking on a sixty billion dollars ten year capex program, and we don't think Delta's is going to be quite as suggressive. We think Delta's will be smaller than that. At some point they'll have to replace the seven to one sevens. They'll probably do that with E T twenties, but it's a much smaller capex program. Delta has a similar footprint to United.
They're just a little bit bigger domestically than United. United's fifty to fifty domestic international, while Delta's more like sixty. So we just pivoted a little bit to to Delta. The balance sheet, the order book, those are a couple of the reasons why.
I appreciate the update. Line A line back for a t account.
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