Surveillance: Fed Pause with PGIM's Rosner

wonderful to catch up with you. We were lucky to catch up with your colleague Greg Peters on Sunday evening to talk about contingent convertibles, cocos, at ones, all those good things which turn out to be bad things. Lindsay, why have you managed your risk around those securities differently to maybe other shops and I'm thinking Investco PIMCO, which reportedly holding the bag on this one. Yeah. I think

Greg said it best. The documentation around these kind of instruments have been particularly murky, and we had itself that we needed to go further down in the capital structure to really take advantage of the banks that we like. We really like US money center banks, particularly in the whold Co paper. We think that that looks really good, and we've had a lot of opportunities with a lot of conceptions in the past few months to buy banks

much cheaper. Howd it needed to go into this risky thing, and obviously have been rewarded for staying away from it. That said, lindsay, there is a question about some of the regional banks and the credit of them, and whether there needs to be some sort of premium baked in because of the potential greater risks of less regulation and more deposit data. I think that's absolutely true, and that's also been our thesis that we want to be in the big US money center banks that got all that

extra regulation after two thousand and eight. The idea that these regional banks were smaller may be less important to the structure. I think we've all learned that is not the case had it been compensated in terms of spreads, and haven't gone there specifically. I think something that you just talked about earlier, which is the kind of main street versus wolf mainstream banks at for regional banks, and I think going back to the whole idea of confidence.

We have not solved that problem. There's fragility in the system, and a small business cannot operate with two hundred and fifty thousand at multiple regional banks. That is just not going to work. And so we very much are looking for a solution there, and it may take a while work. Hearing obviously that the government is studying. I was only a public policy major in college, so I don't know how long studying happens to last. But I can certainly

say that small businesses are concerned. And you're actually seeing a lot of money moved to money market government funds, not the prime funds, and I think that's a big heads up that small businesses are very concerned with what's going on with regionals. This is a reason why Lenza. A lot of economists are trying to game out ongoing distress in the financial system and how many rate hikes that's equivalent to, right, what kind of credit tightening that implies?

Bloomberg Economics coming out with fifty bases points of a rate hike from your vantage point, how much of a tightening feature is this? How much does it really impact credit quality that forces you to increase your expectation for credit spreads, for risks, for defaults. Yeah, it's hard to put an exact number on it. I think we're all trying to figure out what this looks like. But absolutely

the credit box has tightened here. Lending standards are going to be much stricter going forward because you have this deposit flow. I think what's so different about the flavor of this crisis, if you want to call it that and banking this time around, is just how fast the money is and how digital it is. I mean, we can all move funny money in our own accounts from our phone with just a press on the screen. That

was not the oad experience. So what we're seeing here is definitely that the risk of a recession has kicked up. It's a question of how much. Certainly we're seeing some resolve this morning in Europe European corporates or twenty basis points tighter this morning. Things feel better, as you mentioned, yields kind of across governments, whether it's in the US or abroad or higher. So there seems to be a

little little bit of less concern. But we've got a lot to figure out as we wait here to hear what the FED is going to do tomorrow and what they kind of tell us they're going to do in the future. You mentioned speed. Matt Brood of Invesco talked about that with us yesterday and I think's an important point, just a reminder of how quickly some of these institutions can fail. And Lindsey, with that in mind, he pointed out that that's not the same as an industrial that's

not the same story. There should be maybe a valuation gap between these different industries now, similar to what we saw after eight and then see the question I asked Matt was ultimately how long that can last? How long does that take to well ultimately resolve that gap that opens up between one industry and all the rest. Yeah, there is no reason that industrials and banks have to trade on top of each other. In fact, historically banks

created ruin industrials. I create that we've really liked since last year was owning banks versus industrials because you're compensated

with more spread. But I think, going back to what we said at the very beginning, what is crucial is that it's what banks that you own, and so much that I think we believe that in terms of active management is teasing out who are going which which balance sheets are going to do well, and I think we've just got a clear support here for the big banks and so the big banks can rally got to squeeze it in. Then you mentioned the FED. What are you in the team tomorrow twenty five? Nothink we are. Our

base case is twenty five. I think that base case isn't with a major degree of confidence because there's there's a lot of concerns. I don't think, though we are in the camp that if the FED were too pause. We don't think that the suggestion there is that there is a crisis of brewing and they know something that we don't know. I think you discussed us with Greg on Sunday night. Instead, if they pause, I mean they

can pause, right. They have another chance to hype six weeks from now, so it's not like they pause and they're never allowed to hype. They have that flexibility. That's part of their doctrine. And I think we shouldn't panic if we see them pause. Personally, I'd like them to pause. I'd like them to see sometime in between for us to work out what's been happening in the banking sector. All this happened in this past weekend last week, right, so we get a little bit of a breather to

figure out what's going on with markets. That's just my two cents, Lindsay, thanks for that. Lindsay Rosener, the of PGM. I like your description of the FED meeting. I don't know, do you know? I don't know, you know, Christian will A Glissman might know, Managing director for Portfolio Strategy at Goldman Sachs. Christian joins us right now. Christian wanted for

to hear from you, sir. Welcome to the program. This came from Dario Perkins over in London this morning from ts Lombardy said central banks are stuck between the ghosts of the seventies and their PTSD from two thousand and eight. He said, I reckon PTSD wins out. What do you reckon? Yeah, it certainly looks like that. I mean certainly near term.

I mean, not to forget the inflation normalization progress would have been very slow anyhole, and I think to some extent, you know, we work quite confident in market, were quite confident inflation expectations never unanchored like they did in the seventies. And so there was this kind of calm and inflation credibility you carried on. So I think the bigger concern is really banking systemic stress Again, so I would also lean towards kind of GSC type concerns dominating right now.

How do you play through the concern versus the opportunity, versus saying, Okay, when you smell blood in the water, sometimes it's time to pounds. Yeah. I mean, as always, you want to see some type of overshoots, you want to see some type of asymmetry arising, and I'm not

quite sure we're there yet. The challenge you had was that coming into the year, people were getting quite excited, despite the fact that you're late cycle, despite the fact that the FETE has pushed up the cost of capital materially, there was the sense that the US can deal with it. It's resilient. As you showed earlier, the spot data is still resilient, and you're China reopening, Europe having less of

an energy crisis. So our risk appetite indicator went up to kind of zero point seven, which is one of the higher levels. So that has no unwound, but you're not really at bearish levels, And I think what really worries me is risk premier. The rates markets are very clearly sending us a very bearish signal, Like you have the front and pricing cuts from the fat, you have bulls deepening in the two Stens curve. All of those

are signals that recession risk is being pulled forward. But if you look at risk premier, especially equity risk PERIA, and they're quite low. So I'm not quite sure we have that type of asymmetry, that type of washout where you can really say, there's a huge amount of opportunity. What are you looking at though, to buy if that volatility does sort of start to wash out the European

banks of the US banks. I mean, that's quite interesting discussion because banks there's clearly stress here, and there is more overshoots in terms of valuations, in terms of credit. So I think at the margin that is an area where you can look. But the uncertain is huge, and it's a very leverage business model, and and systemic stress is kind of going in waves at this juncture. So

it's a bit early. But if you ask me which banks to go for it, fields, the European banks have a slightly different setup because they have less of a liquidity problem. They had a systemic capital concern, a profitability problem, and I think that seems to have been put under control. Whereas I think from a deposit side of things, you have less pressure, you have less liquidity pressure. As a different setup, there's not even that many money market funds

in Europe where actually savers could park their cash. So it feels like there's a slightly different problem in the US. That problem might linger a bit longer, especially if the fat continuous tightening. Well, Christian, how much of a challenge is that both statement in the yield curve to the bank's code you're ultimately making. Yeah, I mean, like as I said, like the US banks, I don't think they're

completely in the clean yet. I mean that bulls deepening, as you know, was probably exacerbated by positioning where you have this enormous rates volatility driven by macro investors unwinding these hawkish calls into the central bank season. So so we need to see where it does settles. If that bullis steepening continues, it also comes from very inverted levels. We find that the risk to equities increases the more they'd curve. Bulls steepens. So right now it's at very

inverted levels. Has bullys stepened a bit? If that process continues, I would be careful to take any cyclical risk, and you would certainly expect equities will underperform bonds. Do you have a base case right now, though, Christian, because from what you're saying, it sounds like perhaps the situation in Europe might have been a head fake and you'd expect further inversion again. Yeah, I mean it looks a bit

like that. Our base case from the economous you know, both in Europe and in the US, is that we're not done yet on the hiking cycles. There's this idea of separation between systemic stress and inflation fighting, and if that's true, it's a bit premature to see that bulls steepening. But we have to listen to the market a bit.

I think the market certainly is worried that we reached a point where central banks are constrained to hike, and where this financial conditions tightening, which has been relatively controlled for most of last year, driven by front end rates, has become much less unpredictable, much less predictable and a bit more uncontrollable and that means that you have much more risk of an error, You have much more risk of central banks having having to back paddle like Christian.

Thanks for that, Christian milliklishman of government. But let's really get into how we can understand the trajectory of inflation and how big of a battle it's going to be for the Federal Reserve even as they have an eye toward the banks. Dean Marki joining us right now, Chief US Economistic points seventy two. Dean, what's your take on that? How do you understand the inflationary impulse and how much

it's actually been dampened. Well, the recent data have suggested that inflation is not coming down as fast as the previous data might have suggested, and this does interfere with the fed's narrative that we're headed down in a steady way, down to three and a half percent on core PC by the end of the year and even lower after that. The recent data just don't show much slowing and I do think that is important to the Fed's decision this week. So what does that mean in terms of them having

to raise rates by twenty five basis points? So that that should be digestible for the markets. I do think it's that the FED is likely to raise rates by twenty five basis points this week. The data certainly point in that direction, whether it's the very strong employment data, the inflation data that's come out less favorable for the FED than expected, and actually GDP growth is picking up in the first quarter, it's not slowing down the way

many have been expecting. So that economic data are telling us very clearly that the FED should be continuing to raise rates. Now, there's other factors the Fed's worried about, but I think that's what's going to be the dominant force for the FED. They think they have other tools to address banking system issues and problems at the banks, and that monetary policy should be aimed at getting inflation

back to target. You know, my favorite thing about this momenting is that you have five guests on may all say something completely different and then say you're looking at the wrong data. And some people will come on and they'll say, Okay, sure, that backward looking data shows resilience and a sense of inflation that hasn't died down nearly enough.

And other people say, yeah, you've got to keep looking at that because it's been right So where do you sort of make the argument that you have to consider this data that maybe backward looking, but really gives you some clean sense of where we are now. Well, I think the data tells us where we were coming into this past two weeks, and that where we were is an economy that was growing at a pretty strong rate, clayment rate very low, and inflation way above what the

FED wants it to be. Now the FED has to think about does the last two weeks events mean that the data don't matter anymore? I think it's too strong to say that. I think the FED will be thinking about how much credit tightening is going to be happening as a result of the problems at the banks. But unless the FED is convinced that there's going to be a sudden and severe stop in credit that means no further rate hikes are required, I think the FED will

go ahead with their steady rate hikes this week. So people argue that de facto there will be a credit tightening by some of these medium sized banks that are going to restrict who they loan to and how much they lend. You make it an argument that that doesn't necessarily mean some sort of sudden curtailing of economic activity. Can you elaborate on why that's an important important realization to inform what the FED has to do and respond well? I think, you know, one has to think about what's

happening at the banks. You know that the very large banks don't seem to be having a problem with extending credit at this time, at least in a way that would cause a sudden stop and credit. There is credit tightening in general going on like there usually isn't a fad tightening cycle. But small and medium sized banks, the real question is does the typical small and medium sized bank out there have a severe deposit outflow right now that's going to cause them to make say we're not

making more loans at all. You know, that would be what a severe and studden stop and credit would look like, and that would be in a sense positive to immediately stop tightening if that became apparent. My perception from various

things is that that's not happening right now. It certainly is happening at some of the trouble banks, but most medium and small size banks do not have severe deposit outflow problems right now, and therefore they are likely to continue to bake some credit available to businesses and households. If that's right, and there is more of a gradual credit tightening process underway rather than a severe and sudden stop.

So how far away are we from going back to a no landing discussion or going back to this idea that we could just softly glide path lower regardless of some of the recent troubles that we've seen at banks. You know, I think that's something that will be sorting out in the coming week. So, you know, if I'm right that this is more of a gradual credit tightening process, then the very strong economic data that we've been seeing does continue to matter, and this will be a headwind

against that strength in the data. And I do think there are some forces pushing the economy forward that are underappreciated, like the continued normalization of the service sector, which continues to add jobs at a tremendous pace every month. And also I think that the strength of the consumer matters here as well. So you know, if those matter in terms of the momentum of the economy, the credit tightening is pushing against that, and what we'll be trying to

do is way those two opposing forces going forward? So what do you make of this narrative table Tennis? As James Afy put it, I mean, what do you make of this idea that people are just basically turning themselves in circles trying to understand the moment to moment gyrations in a market that is more volatile than it's been for decades. I mean, to me, it just reflects the difficulty of the situation. We're dealing with an unknowable amount of financial stress. You know, how bad is it going

to get in the next two weeks? How bad is the credit tightening that results from this financial stress going to be? It's these are very difficult things, and markets are struggling to figure it out. So we all have our own individual views on things, but the market's kind of bouncing back and forth trying to figure out which narrative is correct one of the biggest issues Dad, and I'd love to get your thoughts before we have to

go about the longer term trajectory of inflation. This question of are we heading back to a two percent inflation kind of reality, which is really what the market is pricing in. If you take a look at the five and ten year inflation expectations, or are we heading into something where this FED reserve will tolerate a much higher pace of inflation to avoid some of the disruptions that we've seen in the banking sector. I mean, I think that's one of the reasons why this week will be

an important signal from the FED. If the FED is actually putting inflation front and center, I think it is important for them to continue to tighten conditions and signal that that is our main focus at this point. If the FED does seem to be distracted and focused more on other issues then inflation, you know, then I do think this impression that the FED is going to allow inflation to persistently run above target will gain traction. Dean

Mackey of Point seventy two, thank you so much. Alan Walt, join us now sending a fellow at the Atlantic Council. And then can you tell us how important it is how dependent show produces on regional banks in America? Well, I'm not going to totally speculate on just how dependent they are, but I'm going to guess that a lot of them have actually probably reduced some of the exposure that they might ordinarily have been facing, given the fact that for some time now, we've seen lenders tightening and

not you know, shelling out capital to oil producers. You know, this is an industry that's gone through a huge amount of consolidation over the past you know, decade essentially, or or a little less in a decade, and so I venture that they're probably not quite as exposed as say, some of the startups in the Silicon Valley area are. My concern is definitely on the you know, the demand

side and the supply side. It's it's a very interesting crisis because we're not really seeing that much in terms of a change in the supply demand forecast, but prices have moved substantially, and forecast for prices are also on the move. Talking about the read through from the banking crisis,

I'll give you another, perhaps somewhat fantastical scenario. What happens if the Middle East investors that lost money and some of these banking issues I'm thinking of Muhammad bail and Soon and Saudi Arabia suddenly want prices to be higher if they've lost money in markets this year. What if they actually don't want to produce more oil because they want prices to go up. How much. Is that a feature in the OPEC response mechanism to all this, I

would say that's definitely of concern. I think that OPEC, definitely, or at least Saudi Arabia, has a particular range that they like to see prices in. And I do think that the triple digits to them are too high because that then threatens them on the demand side. So you know, if prices hit eighty this summer, I think that that's still in a good range for them, and they're not going to be making any kinds of supply cuts. Now.

If we see a sudden drop in oil prices due to say a major global financial crisis, then we should definitely look for OPEC to act just like they did in two thousand and eight to kind of protect oil prices. What I think is more interesting here is they definitely see this, and they came out with some comments last week that you know, this is mostly a financial issue. They don't see it as a supply demand issue. So

how would changing supply and demand impact the market. What I see is an interesting potential, though, is the US as a potential to impact the demand side, Because we've got the US government having said that when oil gets to a certain range they want to rebuy for the spr Could you imagine what a major influx of demand from the US government could do to oil prices right now?

Would essentially be saying, you know, here's a huge surgeon demand that we weren't necessarily expecting, and we are in a situation where supply demand is pretty tight, or at least expected to be pretty tight, and that could definitely be a factor that could push oil prices up if you know, nothing else is. And I'm really happy that Lisa brought up the Middle East because we talked about a quote in the Financial Times this morning. I'm going

to share that quote with you. Ultimately, the FT put together this wonderful story of developments over the weekend to secure that deal between UBS and Credit Suite, and the Saudis have been burnt. Let's be clear about that. They were the top shareholder Saudi National Bank. This is a quote in the story, according to one person close to one of the three major shareholders of Credit suits. You make fun of dictatorships and then you can change the

law over the weekend. What's the difference between Saudi Arabia and Switzerland. Now it's really bad you know about the kingdom you wrote the book. How do you think this might change investment decisions from Saudi Arabia. Yeah, that's a very interesting perspective, and I definitely think that the idea of changing a lot over the weekend is absolutely something that we see, you know, that we expect to come from a dictatorship. We don't expect, you know, this is

a monarchy. They don't really run by rule of law, you know. They they generally, I think, because they want to be seen as a stable force, and they want to be seen like like other Western economies tend to try to adhere to kind of global principles, but when it comes down to it, they're not. They don't have to go through any kind of you know, real legal processes.

And I think that if the Saudi government or the Saudi royal family is hurting for money due to you know, investments or particularly bad investments, I definitely think that you could look to see them potentially try to recoup that

from what really is the Saudi cash cow, Aramco. Aramco had a banner year, their flush with cash, and would it really be surprised to see if the you know, Saudi's tried to or the royal family or the the government try to kind of raise their you know, their dividend or whatnot from the company in order to make up for a potential shortfall caused by some bad investments. Ellen,

just real quick here thirty seconds. Is there another implication in terms of what Saudi Arabia is willing to invest in globally as they try to diversify away from just oil streams of revenue. Yeah. I think that they are investing all over the place, and I don't think that this is going to stop them. In fact, I think that this probably speaks to the fact that they need more diversity and they feel like they've got a lot of cash and they want to invest it. Ellen, thanks

for joining usanz wieni Wold. They put in enem Wold with the Atlantic Council on a situation with Saudi Arabia. We are joined by somebody who with intimate knowledge through the cycles as well as understanding how to play in some difficult moments. Dan Greenhouse, Chief Strategistic SOULS Alternative Asset Management, How are you understanding, Dan, the bank distress that we've seen so far and how far it goes well? Listen,

we're still in the early stages of this. I think it's pretty clear we've got a couple of banks having already failed, another couple of cheetering, but it's pretty clear that there are these I don't want to use the word systemic, but there are these issues that are plaguing in a number of banks that a result in a number of outcomes. It's going to be a compression, and that it just margins as these banks have to pay

up to attract deposits. It's going to be a decrease in loan growth, which, while not necessarily a substitute for rate hikes, is going to somewhat do the Fed's job for it and curtailing economic activity. It's going to be a higher regulatory burden on those mids I dare I say midsize but one hundred billion plus size banks, and it's probably going to mean consolidation in the sector as well. What it means for the economy at large, it is, in my mind, probably only going to be negative through

that loan channel. I think there's a lot of people running around talking about how this is in two thousand and eight, as if that's somehow okay. But while the issue itself is not at all arise the two thousand and eight levels. I think, in an environment that is now characterized by elevated interest rates, what's happen puting in the banks isn't going to make things any better from

an economic standpoint either. You raise a really important point in and I don't think that this has been emphasized enough. People talk about what's going on as being a sort of temporary tightening that they're going to pull back on some of their credit expansion, at least the near term, as some of these banks decide how much they can count on deposits. But you're talking about a longer term

consequence of less lending. Can you talk a little bit about which sectors of the economy that affects the most, which sectors of the economy these banks tend to dominate in when it comes to credit expansion. Well, we know, and I'm certainly that the first one to say it, and I won't be the last, but we know that the commercial real estate market, which is already weak, is probably going to be weaker. A lot of the smaller

and midsized banks do most of the lending. I forget the exact number, but even though smaller banks have only about forty of the bank existence, they represent about fifty percent of the total loan book for the economy as a whole, So they punch above their weight in that respect,

certainly with relation to their deposits. And the first point you have to look at is the office market, in the commercial real estate market, there are there's something going on in the cities right now that's going to have it's going to take multiple quarters, if not multiple years, to fully play out as some of these leases reset. And you can see this in the public markets for those very large office rates. They're they're telling you something

is not right. And this type of a situation obviously doesn't aid that aspect of the economy at all. It's it's it's quite negative to say the least. What is something is not right? Mean when it comes to the trajectory of the economy in terms of when we see a recession, how deep it will be, what we look like on the other side, Well, from an office standpoint, specifically, we know that depending on which city we're talking about, the return to office, if you will, is running anywhere

from forty to sixty percent. There are some cities that are there are some cities that are more. But let's round and say that on balance, in the office market across the country, and certainly in the call it the ten, twenty or thirty largest markets, you only have about half people back to work in any regular capacity at all.

So so that that as those leases roll off, everyone's going to be dealing with the repercussions of what that means from from a lending standpoint, from from an occupancy standpoint, from a bank regulatory standpoint, that's that sector specifically for the economy as a whole. I even't done the work myself, so I'm not going to lie and say that I

know exactly how it pans out. But the curtailment of loan activity, which is probably going to persist for several quarters now, is not going to take a week econot or an increasingly weak economic environment and make it any better. The FED is we know, has interest rates at elevated levels. I don't think they should raise rates tomorrow, but neither do I think that that is the end of the tightening cycle, because inflation is still running at quite elevated levels.

And to repeat a point I've made numerous times, and it can't be said enough. Yes, the year of the year rate is coming down, but the month over month rate, either at the headline or the core supercore, is a concerning levels from the FED standpoint, and that's much more

consequential for what the FED should do. So So, even though in the immediate they may pause raising rates tomorrow and I think ultimately that would be the right decision, when you're dealing with point four point five point six percent readings on CPI, there's very little they can do in terms of easing to alleviate this crisis at all. So your vantage point is coming from Soulis, which is an alternative asset management company that oversees distressed debt opportunities

as well as long opportunities. I'm curious where you're sort of seeing the most potential at a time when a lot of people are struggling to get their hands around exactly what the end result will be. Well, I don't think the full ramifications of this episode has fully played out as of yet, and that's going to take a couple of quarters to do so, in what form and exactly what sectors obviously will be on guard for In the meantime, I think there are plenty of opportunities for

fun like ours. I mean, obviously you would like to see exponentially more distress, exponentially more default, which we don't have as of today. But there are still plenty of sectors of the economy that look attracted to us without weighing in at all about what we own or what we may be doing. There's the change in behavior at office I mentioned is something worth exploring. Who are the

winners and losers there? On the content and the media and distribution side of things, there's a change in behavior there that I don't think people are appreciating with what it means for the streaming services and the movie theaters and the vendors and those types of companies. In the travel and leisure space hotel cruises, skiing, and those sorts of sectors of the economy, there's a tremendous shift going

on in consumer behavior. And so in each one of those sectors and others, there are clear winners and losers on both the debt and the equity side of things, and our job is obviously to sit through them to find out whether or miss pricings and exploit them. And again, even though we haven't seen the full ramifications of this episode. In the meantime, I think we're we're actually pretty busy, and I think there's plenty of stuff to be looking

at an explorery. In the aftermath of the Great Financial Crisis, one of the most lucrative trades was Lehman claims. They were claims from Lehman Brothers after they collapsed, and the returns were pretty astronomical. I'm wondering, Dan, if there's an analog here with the at ones with the contingent capital bonds, maybe not from Credit Suis, but from other banks that possibly don't look money good for a second, and then all of a sudden the regulator step in and say, actually,

it's a pretty bad precedence to set. Is that something that looks like it has potential as other investors see this as uninvestable, Well, if there's as I'm now midlife financially in terms of my work and career, I will say that the bad precedent to be set is set in every crisis, and never put it past allmakers to set bad precedent and exploit these opportunities to quote unquote change the rules with respect to the eighty one market.

Listen that story is clearly unfolding. You can see in the performance of the various bank end of these who has better language in their documents than others. I don't know that we're not traditionally a financial fund, so I don't want to say that we have any particular expertise in this, but clearly that market is going to be

right for exploitation going forward. I think it's going to be very I mean, at the outset, it looks like it's going to be very difficult for investors to not think that there is additional downside, to say the least, to those investments. And again, that's not a small market. That's two hundred fifty two hundred and seventy billion depending on how you measure it, and considering sixteen seventeen billions of them were just wiped out when people did not

think that was what was going to happen. I think people are going to be taking a much closer look at the rest of that market just real quick. Here, does it also change the investment investing landscape for all things Switzerland if they're willing to change the documents on

something like this or perhaps interpret it creatively. Well to get back to my another point, I wouldn't I wouldn't comment about Switzerland specifically, since that's no particular expertise of mine, but but for governments as a whole, there's a very famous saying, if you don't like the law, get a

new lawyer. And I think, whether it was OH eight, or the European debt crisis early in the twenty ten excuse me, or what's happening now, among others, lawmakers and policymakers and politicians have never failed to change the rules to suit their needs. And in some cases that's the right course, in some cases it's not. But I think everybody has to understand that that in the crisis is likely to be the outcome. Dan Greenhouse, thank you so

much for being with us. Dan Greenhouse of Soli's Alternative Asset Management. Subscribe to the Bloomberg Surveillance podcast on Apple, Spotify, and anywhere else you get your podcasts. Listen live every weekday starting at seven am Eastern on Bloomberg dot Com, the iHeartRadio app, tune In, and the Bloomberg Business app. You can watch us live on Bloomberg Television and always on the Bloomberg Terminal. Thanks for listening. I'm Lisa Abramowitz, and this is Bloomberg.