China is Changing Its Economy, Roach Says

moving higher, but it's gonna be moving higher in gradual basis. Clinants, I don't think there's a reason to expect the dollar to keep going up. We don't realize how good times are now. Investment, I'm very pessimistic on stocks. I'm very pessimistic on bob. If you're longer term investor, you just want to stay a long Bloomberg Surveillance with Tom Keene and Jonathan Parow on Bloomberg Radio from New York City for audience worldwide. Good morning, Good morning. This is a

Bloomberg Surveillance Alongside Tom Keene, I'm Jonathan Pharaoh. President Trump picking a loyalist to replace Cone cuver Low, signaling he supports a tough stance on China. The Senate backing a bill to relax post crisis rules, giving smaller banks a break, offering Wall Street very little and drowning in debt crushed by competition. The toys r US turnaround collapses after turnaround efforts fail. In the markets, your thirstday morning price action

as follows. Futures up fourteen on the doubt, unchanged on the SMP five hundred. In the FX markets, some muted price action, but some yen strength in there with Dolly Yen down for a second straight day. We dropped SETH at one oh six at one eighty nine, down four tenths of one percent. In the bond market is there's some stormy weather brewing in Shortsville. Treasuries yields lower by another basis points to almost two a d on a US tenure at the front end of the curve were

unchanged at two point to five percent. And to round things out for you, in the commodity ARKT Brent unchanged at and w T I positive by just a mere two tenths of one percent at sixty one dollars and around about ten cents. The main story worldwide is still very much China, with the question one question on many people's minds. How does the United States counter China? In a period of just twenty four hours, the struggles were

very much underlined. In Beijing, President she was consolidating power, unveiling a sweeping diplomatic overhaul to help deliver a decade long plan. In Washington, the President fired his top diplomat by tweet, letting bear months of policy disputes. I'm really pleased to say that Wang in this morning on Bloomberg Surveillance is Stephen Roach, the Yale University professor, formerly chairman of Morgan's Down the Asia and the firm's economists for

much of his thirty year career at the company. He joins US now professor, Good morning, thanks joining us. So how does the United States counter the Chinese approach in international trade? Well, there's several things we've gotta do. Number one, Jonathan, we have to restart the formal engagement on on on economic matters. We used to have something called the Strategic and Economic Dialogue. It morphed into the Comprehensive Economic Dialogue, and now it's on hold and we really don't talk.

We don't need a bunch of you know, annual uh sort of event planning exercises. We need a permanent secretariat to to really engage the Chinese on a regular basis. Number one. Number two, we've got to focus on market access, and there we've had a negotiations stalled for nine years on a bilateral investment treaty which would allow US and our multinationals to UM have greater access to rapidly growing consumer markets UH in China. We are stymied on this.

The Chinese are also part of this UM. They want access to our markets. Let's if we have a president who does deals, Let's do a deal to allow UH companies on both sides to actively participate. And Thirdly, there's a number of UH sort of UM UH software policy issues that need to be addressed. We talked about them on television a few minutes ago. The US is completely off base and viewing the Chinese bilateral deficit and isolation

from its multilateral current account and savings problems. We've got to get economic analysis back into the issue. And the Chinese have soft issues of their own to address in terms of their geostrategic contentions UH, their training practice issues UH, and cyber issues as well. UH. China's reputation amongst the um The intellectual thought leader base in the United States is probably an all time low right now, and China needs to counter that with more effective UH and reasoned

responses on their side. How do you expect the Chinese to count up the events of the last month, professor, because they have been remarkably quiet in the face of heights and criticism worldwide. Well, they've been. They've been quiet because the actions to date have not really been of

enormous consequence. The big shoe to fall would be Jonathan if the President does impose much UH, higher and broader tariffs as part of the so called Section three oh one negotiations that his trade representative has been working on since last August in areas like intellectual property rights, technology transfer,

and innovation. And you know, the rumor not so secret coming out of Washington is that big tariffs are coming UH in response to that, and if the Chinese are hit with much bigger tariffs, we will most assuredly retaliate. And we'll see how we like it when our third largest and most rapidly growing export market puts tariffs on US companies, including Boeing. Steve to me, the thing that's most charming is a complete miss and standing of game theory.

And I'm not talking about the sophistication of avanage sticks down at Princeton University or the wonderful program at Rice University. I'm just talking about basic response. Mr Navarro and Mr Ross seemed to be unaware that China will respond. How will China respond? What is the game theory? It's Steve Roach observes or can predict from Beijing China. We have

a code, I mean time. We have a codependent economic relationship with China, which means that uh, they depend on our markets to sell their goods, but we also depend on products from China to make ends meet for hard press consumers. And by the way, we depend uh hugely every year on Chinese buying of treasuries to fund our budget deficit, which is of course UH going to get

considerably larger in the years ahead. So China's got a number of options that it can UH think of out in response to the US pressure on the trade front or on the capital flow front. I mean, I mean you should see John Farrell going down Fifth Avenue when a Harley Davidson actally something. If they put a tariff on Harley Davidson's what's the effect on that for both parties? Well, you won't. You won't see John writing as Harley in UH in Beijing. Don't just get a little bit more expensive. Yeah,

well who knows? Um, I think again. Uh, the US UH is looking for sources of growth, and our two biggest trading partners are Mexico and Canada. Number three in terms of and and number one in terms of actual growth over the last ten years is China. China's changing its economy, Tom, They're becoming more of a middle class consumption economy, which is a huge potential market for US in terms of both goods and services, provided we do a deal on market access through the bilateral investment treaty

that I just alluded to. So that should be the focus. Uh. And you know, the Chinese can choke off that option if we play tough with them. So you're right, there is no real game theoretic mindset in Washington. They view it as a one way street. You know, we can stop China, irrespective of the consequences that may have on US. Professor. At the moment, though, that development in China is largely seen as a threat made in China, this big decade

long plan. It's seen as a threat not just by the United States of America, but by Europe as well, and perhaps Germany more specifically. You keep talking about the benefits of this relationship with China, and I look at the current administration and wonder whether they identify enough shared interests right now to really counter the areas of friction.

Do they look those are those are great questions. Industrial policy, whether it you know, was sponsored by UM, the Japanese UH in the eighties or now the Chinese right now has has been viewed as a threat for systems like ours that are based on the creative destruction of Joseph Schumpeter. The market knows a lot more. But you know, we get engaged a lot in industrial policy. Just look at what the Trump administration did with respect to this Qualcom

UH deal as well. And look at what we've done repeatedly UH in intervening in what we think are our strategic interests. UH through Scipious and other organizations that UH control the way in which UM other companies operate in our space. So we're all guilty of intervening UH in in markets. And you know, the Chinese do have this strategic plan made in China. But look, there's no guarantee it's it's actually gonna work out exactly as they say.

They've got to do a lot of innovation. They're gonna move up the value chain, they're gonna be moving into new industries. They're gonna put a lot of government support into these industries like you know, biotech and information technology and environmental remediation. But there's no guarantee it's gonna work if they don't have the innovation UH and the breakthroughs UH to really bring these industries to the next place.

Steven right, it's going to have you with us the university professor Fumer, chairman of Morgan Stamby Asia and these funds economists. For much of his thirty year careit son annual visit that we do with Douglas Cass of Sea Breezes. We do this for the brackets, we do this for spring training and his Florida casts visiting all the stadia of the Grapefruit League, and we talked to him about the equity markets as well. Dougo, who do you have in your bracket? Please let's get that out of the way.

On the right side, of the bracket. I'm all Philly villain over versus Pennsylvania and Quakers go kers. You've got the pen makers. I'm being facetious. I think Villanova goes all the way. Okay, very good. We're looking boiler up here Perdue, John Farrow, Doug Cass is trying to find Perdue in the map. If someone to tell me, well the duck care, we'll get into that history that. We'll do that at our ten o'clock our a topsy me, our autopsy meeting this morning. I'm boiler up, Doug Cass,

boiler up these markets down thousand. Everyone knows you've been more than cautious. Are you still short the market? Yes? Well I've been long and short, but I see better than a fifty percent probability that we've seen a market top already this year. Within that, is it about the economic growth fragilities that are percolating? Is a simply valuation or is it? Jerome Powell? Well, I think history rhymes.

And we discussed last time when I went along into the liquidity dry up owing to the unwind short fall and risk parity trades in early February, and um I compared it to the last liquidity event that I remember in October seven when portfolio insurance crashed the market. So of history rhymes, we have a rally off that we have a retest, rally and a retest. I think we're at the We had the second rally already. I brought back my shorts, went long sold into my target around fifty.

We had a bit of an overshoot. And where I stand now as I've been consistently in the last week or so re shorting the indices. I made the observation to you and to your producer and but my buddy Lee, that you know, we live in this interconnected world, world, this flat world, so all geography market geographies should really correlate to each other. And I made the observation that the s that the docks is now back to where it was in March two thousand seventeen, which is will

surprise a lot of people. At that time, the S and P was about four five points lower, so you get some sense of overvaluations. I don't think this is a divergence we can ignore. But there are other warning signs. Jonathan mentioned the strong bid and the treasury market high

yield debt is starting to roll over. Um. We're beginning to see the domestic economy stumbling a bit, and the more optimistic economic assumptions are not being confirmed by retail sales, durable goods, housing starts, automobile sales which have peaked, and so there's a developing trend of disappointing economic data as well. It's also occurring in the EU. The less couple of deaths very pronounced in the Europe. Do yeah, So I think the market may be the mirror image of the

New York Yankees. In the latter case, the best is yet to come. In the former case, the market the worst is yet to come. Good morning Bloomberg one or six one from Boston on a half of all I apologies, please please come on, but it's free to be Doug. How the Orioles can pop ball five or six in a row in a great like No one understands this world,

John Braining, Look my eyes on the market. My heart is on d D and Wede and Bird and Sanchez and Hick, and we have to all stand up for the judge, so we so we keep it on the market, just for a couple of minutes, Just for a couple of minutes, before everyone in Boston turns off the radio. UM. Dug. If we've come into the new year and everyone is completely over enthusiastic about global synchronized growth, Europe picking up, the United States picking up. Talk to me about whether

A we've seen peak growth. From listening to you, you think we have, and too, whether we've seen the peak for the tenure year this year already. I think we've seen peak expectations for growth. UM. I think we are market participants, Jonathan, are far too focused on the jobs report UM of last Friday. I would emphasize that employment data is a notoriously rear view mirror or lacking economic indicator.

Yesterday morning, the Atlanta Fed said that DP model sees first quarter of growth of only one point nine percent, down from two I would say that's fairly disappointing, considering we have been in a respend and rebuilding period following the hurricanes, and we're now nearly three months past the passage of meaningful corporate tax cuts. What do you say back to people, Doug, that's say those tax cuts won't

buy until the second quarter, the third quarter. I don't I don't understand understand why that would be the case, well, for a lot of people, they won't sit in that check until later on this quarter. I speak to companies, Jonathan, and I don't see an ex a meaningful change in their capex UH projections for fiscal and calendar. But this is something I wanted to do this with David Kelly here in a minute, but let's do it right now

with Douglas cast. Doug, you and I have seen this jillion times where you get a consensus always deserved zeitgeist view in this case better economic growth. And it may be cyclical and short, it may be structured and long. Good morning President Trump, Good morning Mr Cudlow. But but Doug, the fact is the percolation and research is it may not be there that has a profound ramification on FED tone and market tone, doesn't it. I'm beginning to think Tom that we're going to see a tour or less

rate increases, which is far below consensus. Yes, Um, you know it's this consensus, Jonathan, is what I call groups think and um particularly at a flinch in it. If you can identify inflection points, you can make a great deal of money. And then now we have this optimism about my good buddy pal friend Larry Cudlow, which I do, which we should discuss, well, Doug, let's let's just dis because of time, we gotta rip up the script here,

you and I've done Larry for years. Can Larry talk back to the president because the critics say he's just gonna mouth the Trump date? Isn't his job to say? Wait a minute, Mr President? Right? My relationship with Larry runs deep. I've been on the Cutlow Report when it existed over fifty times, maybe twenty times on his radio show. He was at my son's wedding. That's how close we are.

I think on numerous grounds, this is a very different administration than Larry is joining as compared to the one that he left when he was working with Reagan years ago. I don't think you changed Trump's mind, which is strong and long held, becomes with these quick policy decisions and seems to stick with them. So speaking truth through his power is almost an insurmountable objective for Larry with Trump,

in my opinion, um is it? Well? I think his role is going to primarily be in marking, marketing, selling the tax package, and secondarily working with Ross and the borrow towards a sensible trade policy. Thirdly, he's gonna obviously bridge Washington and Wall Street in the business communities, which would be good at But I asked you the the following questions. Um, Look, Larry has met more than anyone and I know and this is why I respect him.

He has overcome challenges in the past. But this mountain is really high. High. Everyone is saying, especially on your competing network, the NBC where he worked, if that Larry will have the upper hand against Navarrow and Ross. I would ask if Cohen, the former president of Goldman Sachs, did not have the upper hand over Ross and the Varl, why should we expect Larry this media commentated at the

upper hand? Okay, I gotta go here for Boston. I got an email here from Boston one or six one half of where should Aaron Judge be in the Yankees lineup? Isn't he like the ultimate leadoff hitter? Would you please? He's gonna back? Third, Third, Okay, it'll be magnificent. I hope to be down there in a couple of days. Maybe Doug, I'll run into you, uh at Steinbrenner Field, Douglas Cass series partners with us is why thank you?

For those comments. Well, a change in the White House and in advisors to the President when it comes to economic policy, and perhaps you've been a change in markets. Gina Martin Adams is a Bloomberg Intelligence expert when it comes to all things related to economics and the markets. She not always a pleasure. Thanks for being here. Um, maybe just let's talk a little bit about contradictions, or

seemingly contradictions. On the one hand, you have an administration that is imposing tariffs on the imports of foreign manufactured steel and aluminum. Also, there's a conversation more than a conversation, I bet about tariffs or preventing automobiles from being shipped to the United States for US consumers. Now you have Ms. Larry Cudlow, who is going to be joining the administration and has in the past, I believe, been a quote

free trader. How do you square those two things at a time when the budget deficit in the United States is ballooning. It's get be tricky. I mean, I think, as with all things with this particular administration, it's really tough to get a consistent read on where things are headed. I think if I were to take a stab at how cut Lowell position this. It is probably going to be positioned as a president that is attempting to negotiate

better trade relations, not necessarily restrict trade. That would be my guests as to have a spin, guys, is that the way investors will take this? I think investors are taking it this week as with a big question mark. All right. I mean, we started off this week in pretty solid territory despite the fact that the trade package was passed last week. We had a really strong rally on Friday. We failed to follow through on that rally on Monday, and it's been a tough week ever since.

And I think a lot of the reason for that tough week, so to speak, is this uncertainty with respect to where this administration is headed. If if rates of tenure treasuries go above three and a half percent, what happens to the US government's ability to employed? Hopeful for that, but how how really how does that factor into the ability of the U. S Government to finance it's debt and pay for it? Yeah, it's going to be really tough.

I think this is one of the really critical questions for this year is you've got a FED that has to react to fiscal policy getting easier and easier, reinflating the economy, creating some degree of inflation pressure, creating better growth conditions. The natural reaction of monetary policymakers is going

to be continue to tighten. If monetary policymakers continue to tighten amid that higher growth pace rates are going to go higher, what they need to happen to fund this deficit, if for growth to really skyrocket, Because if you do have much stronger growth conditions, and as rates are going higher, it's not as difficult to fuel. Right, the deficit looks much better in a higher growth environment than it does

in a slow growth environment. Jinor Martin Adams with a Bloomberg equity and Bloomberg intelligence, can I throw you a curveball question? Of course? And on my way to spring training, So I'm right now. Toys r US blew up today and there was a certitude about all that debt X number of years ago. Are you afeared in a general sense that we become so complacent about debt, build up, low yield, everything's great, you know, make private equity great again? Are we setting her up for more toys? R US

is right now. In the future, I think we have a temporary reprieve from more toys r us as for this year, specifically because of all the cash that's coming back through repatriation, because of all the tax reform that has unlocked a degree of cash for companies. All of that's going to make IBADA look a lot better this year than it has in the recent past. So some of your leverage ratios, particularly those that are debt relative to earnings related measures, look a lot better this year.

So company's capacity to pay improved significantly as their earnings are improving. I think Toys r us is a one ace in a segment of the U S acuity market that is continuing to struggle, and that's retail. But you're not really seeing this in the broad sectors. I do think should rate skyrocket, Should you get a really rapid increase in rates, It makes things look a lot more difficult in future years, but it does not necessarily impact the stock market or sectors at large in the short run.

Can I put out on Twitter? You can do it for Sears Holdings s h l D. I'm going to let I mean talk about comment I try to avoid. Yeah, I'm not going there. It's a totally new retail world, thank you, Yes, all right, having a totally new tax world. I don't know whether you've got a chance to listen to some of the presidents re marks yesterday he was speaking I believe in St. Louis and um uh, topic is taxes and the potential for a second really well, I mean I said, there was just a hint of it.

I'm wanting, you know, in the in the context of we got the news today that the Dutch government is going to continue with their plan to abolish dividend taxes. Is this a race to the bottom when it comes to taxes? And do you think we could get another tax cut? Wow? This is out of a totally out of left I thought the President was looking at walls in California yesterday. I wasn't aware of it. Finger his finger in the wall. You know. Perhaps I think it's

a long way off. Gina, I just put up. We do this for Gina, Martin Adams and no one else, folks. We go to the way to the average cost of capital. It's a wonderful function. On the Bloomberg Sears Holdings percent debt with a coupon of four point nine percent, which is popping conservatively two beats off the tenure yield. I mean we'll have we have to have Gina Martin Adams back on just to go over these kind of things.

When you wait the average cost of equity and debt within the President Nirvana that he was going to ask you to wait the cost of tickets to spring training baseball. Thank god, I'll take lay at average cost of capital over that any day. We had to sell the middle daughter just to be able to swing this. Gina Martin had is with his Bloomberg intelligence working on equities, and of course she does this with futures up, six down, futures up, pim Fox in Tom King. We need to

get the markets open, this is Bloomberg. Well, I guess you can do an r I P for Toys are Us. And here to explain how it all happened is Stephanie whis sink At Jeffrey's research analyst and managing director. And yes, we're talking about the toy retail business. Stephanie, thanks very much for being with us. Uh you say that the toys are rust liquidation perhaps is going to send ripples to the industry in what way? Yeah? I think a

couple of ways in good morning. I think two things. One, clearly, there are a number of toy vendors that support Toys r US that will feel the impact of the loss

of a retailer. And anytime there's a loss of the retailer, and that means that there's concentration of share with other retailers, and we think the winners are most likely to be Amazon and Walmart UM and both of those companies we know fight on price, and so as a vendor selling toys into the toy industry with two big powerful retailers now as your your lead agents for a consumer buying means that there's most likely going to be some margin pressure.

I think secondarily, as we think about Toys r US's role in the toy industry, it was definitely a destination where consumers discovered new brands and new products within the toy space. So I do think for those small and midsized companies, they're not going to necessarily have a venue

to really build and uh develop their brands. So you know, we we do look for new venues to potentially unfold and emerge where some of the inventors and some of the more innovative toy companies that are on the small

and mediums i've can find homes for their products. Stephanie, is this a casebook example where the actual business of toy stores is perfectly okay in the sense that you want to go and buy a toy, you want to go and see it, you want children to go and see it before they actually cost you the money to do so. But that the sort of not management, but the financial engineering behind Toys are Us is what doomed

the company. Yeah, I think that's a fair observation. I think clearly the financial engineering and the financial structure of Toys are Us put pressure on its ability to invest to stay current with changes in the modern retail marketplace. I think second, though we have seen very distinct changes in consumer behavior, one of the most unique and I think probably most prolific changes in the consumer marketplace is

the changing leadership of demographics. We've moved now into a millennial lead consumer marketplace, and that millennial is a digitally native, digitally savvy, and it's clearly shopping more online than prior generation. So I think that has also been unfolding in the backdrop. Layering on top of this overall financial structure that was prohibitive. Stuff was with us with Jefferies right now and not only consumer retail and the toy industries. Your reports are

wonderfully detailed about store closings and liquidations. What's the level of sweat right now? It's March. I guess they're really beginning to get ready for the fall that went through the Christmas season. I don't know what the schedule is. There's trade shows to go to forget about it all. What's the sweat level of right sizing income statements right now? Well?

I think certainly as an academic, we need to be very thoughtful about what we think the potential residual outcome is, and not just the impact of toys are us, but how the consumer behavior shifts play into our considerations around profit structures. I think in sortinly though, because Toys r US is announcing its intent to liquidate across its US, UK and portions of Europe and Australia fleet, this may

take many, many months. One thing that consumers are incredibly savvy about is pantry loading product when they find a great deal, So we don't necessarily know what the residual outcome is going to be in the holiday, which is where seventy of toy sales occur typically in the year.

But if Grandma's out shopping in August and she finds some Christmas presents that she can buy at seventy or eighty percent off, she might stock up on presents, and that might mean that the holiday season looks different than it has in the past. As we start to reconcile in twenty nineteen, I don't know that we'll see as much of an impact, but certainly this is going to play out over the course of the next twelve months or so before we fully appreciate what the loss of

toys r US means to the industry. Do we buy toys off Amazon? Absolutely? Amazon is the fastest growing and one of the largest retailers of joys. I find him, I you know, and I mean I don't even needed more step for this, Like Omni channel. Omni channel sounds like an NBA program you don't name the school. Well, I hope omni channel has a lot of money, because you're gonna need it. Yeah, I want to ask you stefinitely just a little bit here, you know, if we

just go back to December. Um, there was, of course a court hearing about this bankruptcy filing and the bankruptcy judge, Keith Phillips, he overruled objections by the US Trustees Office. They had the public watchdog right in the East bankruptcy cases, and the judge ruled that the retailer could pay its seventeen top executives fourteen million dollars in incentive bonuses. Why

would they do that? Yeah, it's an excellent question. I think in the age of transparency, the consumers take issue with that when they see that occurring, and frankly in some cases the employees do too. And empoyter Us with all very very large retailer and employed a significan in tens of thousands of people in the United States, and I think at holiday time worldwide was extending up into the hundred thousand dollars excutingly a hundred thousand person type range.

So clearly that is a statement about protecting the interests of the executive group. But I think in again, in the age of transparency, that doesn't necessarily sit well with consumers, infendors, and employees. Well, I was going to say and add into those investors because toys Arrest used adjusted earnings as the benchmark for whether the executives have actually made their bonuses right correct, and that's that's not an uncommon approach,

but it certainly doesn't sit well. So I think it's um not a typical many times perform what were adjusted. The head of the company, the head of the company, Mr Brandon Day Brandon uh hem, I believe his cash compensation with six and a half million, and he receives other long term incentives and bonuses. It brings his total annual camp to twelve and a half million dollars. Stuff. At the time we got left with you, I mean,

I know they're based out of Wayne, New Jersey. Al from New Jersey, not from Wayne, New Jersey, I believe. Emailed in and said, isn't this all about real estate? Did toys r Us hold on so long because they had prime real estate that was a bargaining chip? Yeah, there is some truth to that if you look at the consortum. This goes back to the moment when toys Rus went private and when it was a levered buyout

was used to take it private. One of the three parties was a real estate operator, so there was a real estate party appetit. They go under they've got some primo I'll let you name the property, some primo property. What happens that lease, what happens to that property? Yeah. I think that was the reason that the real estate party was involved in the transaction originally was to protect

the real estate and protect the leasing structure. Those properties, in many cases could be filled by a different retailer. If they are in prime locations, they are going to be in demand. I think what we're observing broadly in the national retail marketplace is that the number of neighborhood dense neighborhood nodes where you have these big power centers, is being reduced. People are spending less time in traditional bricks and mortar, and so is that your in fewer destiny?

Is that your prediction for the future. I mean, PIM and I are seeing a slow audit torture here. I mean, I don't need you to comment on sears in that we don't have time, but basically Amazon has got the high ground and this is this a look for the rest of two thousand eighteen. Well, I think it raises

some very legitimate questions about experienceal retail. I think retail that is succeeding in the marketplace today has a high emotional connection to the consumer, is in a category where there's a high trial and discovery area um and it offers the consumers something more than what you can experience in a mobile device or online and I need it's not ultimately, it is going to be how the consumer

prioritize their time. If they're given an opportunity to go spend time at a restaurant with friends and enjoy an evening out, or go into a transactional venue and for product, they're most likely to biased towards the experience. And so I think the more and more retailers think creatively about experiences that draw customers together, build community, connect and ultimately community at the community co creates the brand experience. Not

those are going to succeed. I think for the unfortunate thing for toys r US is the seasonality of the industry and the fact that the overall toy industry is going through these dramatic changes and how kids play today versus what they did years ago. I'm underwater, I got to get the three thirty one. My elf has been blown up. What's your single best by to save me for the quarter? Oh boy to save you for this quarter. Yeah, quick, well,

not in the toy space, we do. We cover the beauty space as well, and we would say St. Lauder is still one of our favorite. I love it, thank you so much, definitely greatly appreciate with with this with Jeffreys. That's you know, folks. We make pim and I make a lot of fun with it. But literally, if I was to do an equity show, I'd call it single best buy because you go to a two hour meeting with somebody on the South Side and it's blah blah blah.

What's the single best buy? Stay Louder Stay Lauder? All right? You know how many employees us? I heard thirty thousand people, seven and forty stores. You know who did the private buyout k k R, Yeah, six point six billion. They got five billion in debt. We say, good morning. I appreciate your attendance. The Dow up thirty nine. Stay with us through the day. This is Bloomberg Radio. Thanks for

listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform you prefer. I'm on Twitter at Tom Keane. Before the podcast you can always catch us worldwide. I'm Bloomberg Radio.