Surveillance: Hyman's Fed Forecast

This is the Bloomberg Surveillance Podcast. I'm Tom Keane, along with Jonathan Farrow and Lisa Abramowitz. Join us each day for insight from the best an economics, geopolitics, finance and investment. Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and anywhere you get your podcasts, and always on Bloomberg dot Com, the Bloomberg Terminal, and the Bloomberg Business App. We're started to bring you. The chairman of Evercore, Isi at Heimann

So I had to deal with my boss then, Jim Molt, who ran the firm, that I wouldn't leave until we've got a replacement. And so Jim came in and said, Ed you can leave.

I said, oh, the imbred optimism that Ed Heyman has an ed Yard Denny has. What does the gloom crew get wrong here about the need to understand America will persevere?

So I think we're going to have a recession. And I follow ed Yard any closely and I just read his piece over the weekend where he's doesn't have a recession. And I've been through this more time than anybody on your show. The He'll curve works, and the you'll curve is really inverted, and then if that doesn't do it, you have a contraction and the money supply the most since the nineteen thirties, and then you have a significant recent rates plus QT and so Mike Tyson could get

And so.

I just have to add that.

From when the.

Yell curve inverts, it can take eighteen months for the economy to go into recession, and just before it goes into recession it looks great. It's a very humbling business. And Tom, I got to say, I have not been forecasting a recession for the past year. I fought last year the two down quarters like crazy and I have the third quarter down, which seems too aggressive, but I'm pretty flexible, but I'm sure it's coming.

Does this have a preweight feel to it in that regard.

Not really just except for the yell curve, but that the wait my ment specifically, well for sure on that, and it's playing out pretty much like that. But you don't have the housing bubble, you don't have something that would cause a severe recession like we had in eight or nine.

Where are you on the inflation backdrop at the moment? We had a guest in the Lost down rows So who suggested that inflation expectations are bottominc botsomic for the cycle, that ultimately inflation is going to be sticky and a recession won't address it.

So I'm on the other side big time. So I just looked before I came over here at gasoline prices, which have a big influence on inflation expectations. Inflation expectations have come down significantly, but they also are influenced by gasoline prices, and the futures have gasoline prices going down another ten cents in the next six weeks, not a big move, but not up twenty cents, and gasoline prices where they were fifteen years ago. So inflation is coming

We let's build on that. So we've got you on growth, got you on inflation, build on the policy backdrop. Most people anticipating now the FED goes again this month, right, maybe goes again after that. Where are you doing the scene now?

So Chrishna Guha does our FED work. He has one more and done, and so that's what I would follow. At this point, the one more is baked in the cake. I think anything from now is a mistake. They're just creating a deeper recession or the more likelihood of a recession. But at you know, five and at quarter, with the bonyle at three eighty, they're pretty much done and inflation slowing.

Forted together, in the years, you've been considered for a FED president, certainly as a FED governor as well. And what did this FED get wrong? Was it too much communication? Were we advantaged with the silence of green spin.

I think it's very difficult to have three hundred PhDs make a forecast, not buttering you up town. But I'd rather have you make that forecast than three hundred PhDs.

Mike said, I can't do Mike walked in one day. So Tom, I don't need any forecasts on air continue.

And so I think it's it's just part of the stickiness of the decision making.

It's by committee.

It's by committee. And I also tend to try and always go where the puck is going to put it in your terms, and boy, the evidence, the evidence that things are slowing on inflation is really pretty awesome.

We're going to have you back but you hired Gretzky. How's Julian Emmanuel doing to me? Like his his weekly note during earning season is the most valuable thing that comes over the transom. And what I want to say is this guy captured the equity market left maybe not all tech tech. He didn't tell you to buy him Vidio. But is Julian Emanuel doing okay? Over at the show doing great?

So we have an open office, I learned from Mike Bloomberg. So I have a desk, and I have Rich Ross, and then I have Julian Emmanuel. And where within I wouldn't say shouting distance with her? In talking distance?

Is he talking about a second leg of the bullmarket? Like Edheiman nailed? Got to be quick here, but second leg of the bullmarket?

All of a sudden he cautious, cautiously, up, very cautiously.

They separate Tom and in the office you know that I didn't know, so that we're not allowed to sit next to each other at Hymen.

I want you to talk about the hallmark of your work back to CJ. Lawrence, And that's the granularity of studying data. Does the granularity of freight rates? This that the green spanning and data study still work in a modern high tech age.

Or it's even better. Why because there is so much high quality data now, you know, generated by a computer. And so I really think that my success in studying the economy and forecasting comes from being more granular. So the FED seems to look at one data point that comes out like the super core, and I've looked at maybe twenty at that point, and like what Michael was talking about on the employment number, there's a lot of data points and they're generally pretty darn strong for employment.

I look at the data, and I mean the hallmark here across the decades is we used to aggregate off the revolution of nineteen forty seven, the way we bring in macrodata. Do you, what, ever, core ISI still aggregate or are you partitioning out now for different quintiles, death siles or John Edwards to Americas? Can you aggregate still? Yes?

But you have to take into account the different pieces, and right now the manufacturing sector is pretty weak maybe inner session, and many other parts of the economy are doing quite well. Services like over the holiday July fourth, and you also have home buildings now actually coming back. It's been very strong and has accelerated in the past couple of months.

Right you took a kufel Annuncer slide rule from Texas to MIT. I don't know if you study was solo there after fifty seven productivity, but explain the evercore ISI view on America's productivity given the new technology over there. You're an optimist or not.

I'm an optimist, but it's not in the numbers. One of the phrases is proctivity is everywhere but in the numbers. But you know, what you do has enormous proctivity, and what I do, frankly has enormous proctivity. But it's but you're not getting it period right now in the numbers and plumbent's good, but the economy is still slowing.

I think, what do you think about the Frenzy Gloom Crew, particularly they come out every Friday. Friday seems to you know, you're published for the weekend and that. But the I mean we've always worried back. I mean think of eighty seven or the August of nineteen ninety eight. The worry, the angst has always been there, but there seems to be a different character to have gloomed. How do you respond to that?

So the forecast for recession was virtually unanimous a few months ago, and now there are many people going to a non recession forecast. I am the most parish I've ever been on the economy without being in a recession. It's because of the yell curve, the contraction of money and QT at the same time they're hiking rates.

That three.

Blow hit to the economy is going to cause recession, but it doesn't happen overnight.

So can you own stocks given the statement you just made that you're the most gloomy you've ever are you all in cash or can you own ebodies and participate?

So I mentioned I think three times now the six oh seven going into eight, and the S and P went up twenty and peaked like two months before the Great Recession hit. Boys, it tough, and so right now I think the economy is doing well and the stock markets going up the technicals are good, and so I think we'll keep going up until it looks like we're about to hit the recession. And that's not today.

I got two minutes left. You're the only one who hasn't moved to Florida. You are part of the New York City fabric. Explain how you view the future of this great city.

It's very tough because so many people are moving to Florida, but this city is so vibrant just being here with you, which I know you love the city and all the institutions in.

Never bet against New York. That's the only reason I got this job. That the mayor at the time, he said, you're hired.

Anyway, as long as Mike Bloomberger is here. I think we're here.

Okay, what do we do with the FED? One final question? What's the fed Aedheimen FED strategy here forward?

So they're gonna hike one more and then they're done.

When did they cut? Uh? Probably?

You know, I think towards the end of this year, but maybe early next year. But I can I can look down the street, I can't see around the corner, but when I get to the corner, you'll have a much better idea.

Just a smoke from Canada. That's why I can't see Ed Hyman. Thank you so much. I know you've got a run here. He is with evercore Isi and truly iconic on the street today. In your equity belief, we're going to bring it over to the fixed in comes to face. Thomssorus Jones has not had a fixed income

Ah, highly unlikely. And with that said, we recognize that the equity market seems to disagree with that hypothesis. But when we look at that inverted yield curve, what we see is a market an economy which has is already facing excessive tightening from the Federal reserve. That is, the Federal Reserve is already tightened to the point where Main

As a thermometer, I'm gonna look at the inflation adjusted ten year yield. There's other metrics as well that are sophisticate lesi source uses, but I'm gonna look at the ten year real yield at one point five to eight up percent, maybe it was one point six to two, getting a little lofty. Do you anticipate that that will break out to a higher real yield? And what level is normal of the higher real yield?

Well, a normal might be keep in mind we only have about twenty five years of actual data on real yields I yesterday back to the tips market of ninety seven ninety eight, normal might be one hundred and fifty bases points. So we're roughly at what you might expect to be a normal real interest on ten year treasury. Now, with that said, we do not necessarily expect ten year real yields to rise much from here because we expect inflation expectations to get Inflation itself is getting close to

The headline there, John is on the edge of beyonco. I mean, this is the second time in forty eight hours.

That phras I almost thought you misspoke. You think inflation expectations are bottoming for this cycle.

Yes, and that's because we buy into the hypothesis that inflation is going to remain sticky and that the Fed does not have the stomach to do what it takes to permanently bring this structural inflation back to a neutral. By that, we mean do excessive damage to the labor market bring aggregate demand well below potential. That's what's required, and that's a pretty deeper session. We don't think the Fed has the appetite to do that.

You ju'mp buy into the vulcaresque delivery of cham and pound in late August last year. No, I don't.

If they were serious about bringing inflation in line with long run targets, they would have reduced the balance sheet at probably three times the pace they're going on.

So, just to be clear on the pane of sheet cool, you think they should be more aggressive with QT, You don't think they will be?

Oh, absolutely exactly both to them.

Yes, to both of those.

We think they should have been more aggressive, but we think they will not be.

I'm fascinated by this. Jim Bianco out in Chicago, and you guys have a call of a dis disinflation. We're gonna disinflate, come down and then at three percent, what do you do reverse and go up? How much? What's that model show?

Well, right now we're expecting a bottom around three percent. We'll call it your overra headline CPI. On a quarter over quarter basis, we might see inflation dip below three percent fairly easily. But you start to see around three percent, the FED gets weak knees. You start to see that the labor market is getting to a point where to bring inflation down much lower, you gotta do a substantial amount of damage because all of a sudden, businesses are

Does it bring it over to Jason Trunnet's work. If I have a sustained three percent, which is your minimum call, maybe actually higher, that gives me a nominal GDP that's extraordinary. Does that support well run companies in America?

Well, that supports companies that have low borrowing costs. That supports companies that have bargaining power or pricing power in their industry and strong management and have basically barriers to entry as well. It doesn't support companies.

It describes john Ford Stocks.

And we'll look at the Russell two Forty five percent of the companies in the Russell two thousand don't fit that. They're the exact opposite.

These are big cos if you're expecting inflation expectations to bought them out. What is that LAFE fixed income for people sitting in the tenure right now? Taking on a bit more, you're ration, what are your tuning them?

Well?

Right now, let's say ten year treasury at three eighty five. That actually looks attractive to us. In a environment where the US economy goes into recession, real yields come down, inflation expectations really.

Don't move much. They might even go up.

You still have downside and ten year treasury yield up down to maybe a three percent to three and a quarter percent. But let's put that in perspective. The average recession sees a ten year treasury drop two hundred and twenty five to two hundred and fifty basis points. That's probably not going to happen this cycle.

At most.

We're looking at that ten year going from four to thirty where it peaked last year, maybe down to a three twenty to three percent.

This is really important stuff. What we're discussing here is ultimately how the bum market's going to behave in what you've described, and I'll put a name on it, and a saxflation we will yep. Is that correct?

Yes?

Exactly?

And again we're looking at positive total return in a ten year treasury. We'll call it a seven percent total return upside when yields drop, And if you're levered three times like many funds are, that's a twenty percent return that offsets maybe a twenty five to thirty percent loss on the x what he said. But the thing is, you're not looking at a fifty percent return in treasuries. You're looking at a six percent, seven percent levered up to twenty percent.

Amazing, some just amazing.

I really can't say enough. You know, we're making jokes about it, folks. We're going to the summer. We're getting lazy and sloppy like everybody else. It's an incredibly holiday shortened week. We're compressing three days john of serious economic analysis. And I got two competent shops, Bionco and Strtigas saying the same thing that we're gonna diss I'm making this word up, dis disinflate.

Well that let's all brand new. That phrase. Just this idea that inflation expectations are bottoming out for the cycle. That is not what this feder Reserve Tom wants to hear at all, at all. No, So twenty five in July is what most people anticipate, some people saying maybe another twenty five, the Committee suggesting that might be the direction of travel, and then you think they're done as well. I think so, And let's keep this in mind.

The higher they go with the Fed funds rate, the more likely they are to reach their target of two percent inflation. But we just don't think that they have the stomach to keep doing this. There's gonna be demand destruction. And you've got to also look at the second half of the year. The two stories in the second half of the year. Obviously, recession risk is one of them. The other one is you're looking at massive liquidity drain from the treasury raising cash and adding back to its

Well, you o code in recession anyway, yep, And a recession that comes without right cuts.

For now, Yes, because I do think where the FED will be sticky. And keep in mind, I don't think the FED is going to go to six percent Fed funds rate, but I do think they're gonna hold the funds rate at whatever they terminate, five and a quarter, five and a half, whatever it is, They're gonna hold it there for as long as possible, and then they're gonna cut. So that means now we're looking at those first cuts probably coming in February of next year.

The WORL would you describe, so stack flashin a FED that's not went into crush inflation ultimately might start cutting next year. Sounds pretty dreadful for risk assets, doesn't it? Recession as well all these codes that you've got, It absolutely does.

And I think the silver lining here is that eventually they do cut. And because you're looking at an economy that is still relatively balanced for the most part at this point, you're not looking at extreme excesses and housing in energy investment, Your recession is shallow and there should be more of a V shaped bounce off of it once we reach that trough.

Well, how'd you get the vey if it's shallow?

Just to build on that just fondly, because you do get a FED that does eventually cut aggressively in twenty twenty four, twenty five.

And it's just one of those conversations that later on today I'm going to replay and listen back to. This was great Tom to Sourus that a strategist with this around a table, David Leibovitz Global Market's trying to just a JP Morgan Asset Management. David want to put a catch up with you, sir, post your life fourth and I hope you had a wonderful holiday. Let's start there. You missed it. What do you do now?

So I think what's interesting is that we all missed it. You know, people came into this year with a view that, Okay, maybe you get a little bit of a bounce because twenty twenty two is so bad, but certainly not fifteen percent on the S and P in the first half of the year. And so I think what you do is you actually don't do all that much because what we don't want people to do is to begin chasing this rally. You know, we do see some storm clouds on the horizon. We do think that the risk of

I'll get that. But you have to identify a second leg of able market. Is JP Morgan allowed with all your economic work Chasm Faroli to say, we have the underpinning of what can be a legitimate broadening out bullmarket.

So I guess there are two things that give me pause about that, that possibility of broadening out from a bull market perspective. The first is that the majority, the entirety, effectively, of the rally that we've seen year to date has been driven by multiple expansion right, so earning hasn't really participated.

In the real world of sitting around when the you know, we celebrate that the colonies one and we're sitting around and we're having mustard not catch up on our hot dogs, and there's one guy there livid at a given institution. Let's pick on JP Morgan and saying, Okay, what's the plan to catch up? What's the JP Morgan plan to catch up? If I was above average but nothing like what Nvidia.

Did, So I think the best thing that people can do today is try to preserve their optionality, and we would encourage two ways of a place. First would be by not forgetting about fixed income.

Right.

You know, we talked about how sitting in cash feels comfortable, and obviously you're getting paid from the bond market. Once again, we still think that that optionality, maintaining a relatively short duration could work in your favor because if you get a big pullback in equities, you're going to be able to deploy that capital and try to catch up. To your question. The other thing is we would maintain that shorter duration on the equity side as well. Focus on

Can prove in videos making money, metas making money, What does tech fit into that? Just to build on that a little bit more.

No, and we talked about this a couple of months ago. What was really interesting about watching tech into the end of twenty twenty two in the beginning of this year is that they've been taking their medicine right, they've been laying people off, they've been defending that margin. They don't necessarily have the type of pricing power that you're seeing from say the airlines, in the current environment, and so

Expand just going through the top ten on the S and P five hundred YEA Today and video we all know that name Meta. Then you've got these cruise operators Carnival up by one hundred and thirty five percent, Royal Caribbean up one hundred and nine percent, YEAT today, Norweighting up seventy nine there's a home builder in there by close to seventy percent. What's all that about?

So I think that this, this is the big question, and I think this is part of why so many people have gotten the market wrong this year. It feels like we're seeing these rolling recessions in the economy, where first it was the cyclical parts, the rate sensitive parts like housing. Obviously you had services shut down during the pandemic,

Now.

People look at the numbers and they say, well, the house is more expensive. Rates are more expensive, but I don't think that they're necessarily going to continue to rise, and so you're beginning to see that stabilization in those parts of the economy. And I think that that's why people continue to gravitate to this soft landing thesis, although it seems like a bit of a story in so, I think that bonds for us, the shorter end of the curve continues to look most attractive. You're not getting

If the zeitgeist this weekend, John while you were away was simple. People are stunned at how retail, in particularly older retail, is all in stocks. The lessons we learned cfa kind of chit chat. It's been thrown out the window by a public just buying and buying and buying stocks.

So let's talk about something that's going to come up along. You'll hear people in programs like this talking about triple digit inversion two year, ten year, negative one hundred and five basis points for a lot of people listening, and they've heard this a million times. The curves inverted. That's dangerous. That's bad, isn't it. What does that mean? Negative one o five?

So that's close to as inverted as the curve has. He takes, right, we have to all the way back to the eighties. And you know, again, you think about history and it doesn't always repeat itself, but it does tend to rhyme. And I think what the yield curve is telling us is is something that you know, a lot of people I think know in the back of their minds, but but hesitate to really wrap their arms about.

To finish on that. Then, David, does that imply this FED has to sit at five point fifty for a longer time than people expect, or does that imply that this FED needs to go high than five fifty and maybe even closer to six percent.

So I think that the risk to rates is still to the upside. Obviously, my boss's boss thinks that six percent is potentially in play. It wouldn't surprise me. But I think at a minimum, what investors need to be prepared for is the FED going to somewhere around five fifty and then not blinking until the labor market deteriorates in a way that they can no longer ignore it. Right three point seven percent on unemployment is not going to catch the Fed's attention. Four and a half.

Well, it's David. It's a slow news day. Can can you state that mister Diamond's looking for a six percent level in FED funds? Right?

He came out and said that.

He came out and said that he thought we were going.

To set You know that's not news. You're trying to get him INTROUPO.

I don't know. David writes his annual letter, you know, it's like a fifty eight page level call up leve it. So they go, come on, write this thing.

For us on that.

Well, I think what's interesting is that it wasn't too long ago that people were highly skeptical that we were going to five And this is a FED that has taken the inflation problem personally. They've already made one policy error, right, they started too late. I don't think that they're going to make another. In the office, we're in the office five days a week, five days a week.

Are you going to get a view of Park Avenue in Grant and the uh, you know, the down at the end of Park there pan Am building, or are you going to be looking out over New Jersey and in the Hudson. How do we fit that in?

I think time will tell I heard it. How good I am at calling THEE.

Six got a star office view, David, Thank you much, David Leave it's there of JP Morgan Asset Management.

This is really a special treat here. I was hugely influenced years ago and reading i'll say five books on the Kingdom of Saudi Arabia and all the romance back to seventy five millimeter Lawrence of Arabia a million years ago of this experiment that is the Saudi family. Alan Wald is definitive on this. We usually talked to her about the major revenue maker, which is oil, maybe a Ramco at Formula one. But today we digress and with ellen Wald we speak of this royal family and what

No, I'm not. I think that this really goes along very well with their kind of general search for global prestige, especially in terms of the West. And you know they're not really getting it from oil anymore. Yes, they still are providing this incredibly vital resources, as you just mentioned to the world, But it doesn't necessarily come with prestige. In fact, it comes with a bit of the opposite, given how prominent the climate issues are today and how

Miamateur, take on this, off, lacy and off your work is a basic idea that these are tribal clans, tribal families. Whether it's United Era memorates Kuwait, the originality of the experiment in Jordan, et cetera. Give us an update on the power structure of the royal family in Saudi Arabia. Does it parken back to Faisal or is it something new?

So I think it's kind of a combination of both, in effect, because the Sautists have always looked for ways to show their prestige, and so way back when you had you know, Abdolzes even so he would basically, you know, before he had oil. His way of showing his kind of rule and affirming his rule over the various tribes in Saudi Arabia was to go around and basically promise

And none of this is new. As you've illustrated that China tried to do this with football, it wasn't very successful. Russia is trying to do this in a various ways to use sport as a vehicle to basically achieve certain goals, whether it be the Winter Olympics, a Formula one race. World can't for football. And I want to understand from your perspective, what would success look like for the Saudis. What does that actually look like.

That's a good question. I think success is it partially it is winning. So their sports teams have to do well. And I remember there was a whole big controversy about the Saudis trying to acquire a football club in England and then they didn't get the one that they wanted, so they got a lesser one. So they've got to do well. But they've also got to kind of make money out of it. So even if they don't win,

Are you expecting the West to close the door to this, Well, I.

Do think that there's going to be pushback. But money is a really powerful motivator and it's very hard to say no when you know there's a deep pocket here. I mean, look at PGA, and you know, as long as there isn't any kind of major human rights issue that pops up, of course, I do think that that

We just want you to write Ellen, you're away from what Ed Moore says. Jeff Curry and the rest of the bandits in hydrocarbon analysis. What's your price barrel of oil that you think the royal family needs in Saudi Arabia? Do you have a Brent crude price that gets it done for them?

I think that anything above you know, sixty sixty five is getting it done for them. They don't need to cover their budget with the price of oil. So I know the IMF says, you know, oh, they need eighty or eighty five dollars oil to cover their budget. That's not how the Saudis are thinking. They don't need to cover their budget with oil. They can, you know, they can take loans, They've done that, and not necessarily that

And just to be clear on the record, Newcastle United is a lesser team, Is that right? Anon? Well, you know, I'm.

Not really up on my British all teams.

That's when I heard that seek in Shepherdson, Pantheon, macrowe Can was with us.

I tried United, right.

Yeah, Well, Ellen had to wait to come on because my soccer talk was so lame while you were going. Brima really helped. We had we had on uh Ian, Shepherdson and Panthe and then we were tied it into Saudi Arabia's investment with the Newcastle United and then one was it fourth place, the wonderful fourth place.

Finish secure Champions League.

It was great. But you know my question is to two of you. We got another fifteen minutes with Allen. I think I'm kidding a fifty and I got to talk F one racing in a Ramco's investment.

There and well, thank you Ellen, thank you. That was.

Elene Becker joins us now on the tragedy was just domestic air travel. What I learned over the weekend lane in two instances, one with John Farrell, who actually got on an airplane and got home, is in an national travel is actually pretty good, and domestic travel is an absolute train wreck. You drive out of Denver and you and I remember the horrific Stapleton International Airport with the winds going sideways and you were lucky you could land.

That's a great question, tom So. The number one issue is space. We don't have enough space. If you think about Newark Airport, to the right you have one highway and to the left you have the New Jersey turnpikes. So there's no place to put a third parallel runway that would alleviate some of the problems. And then people don't want big airports in their backyard. The reason Denver was able to be built is because they bought so much of the land out there that you can have.

Scott Kirby of United belieguered I believe he called in from Teeterborough. We're trying to get him on the phone but Scott Kirby of United madclear they will do less flights out of EWR the companies you follow, is that the future, which is they're just going to have fewer flights.

Yep. Absolutely, We've been seeing that Tom as you know, for a couple of years now, for at least five or seven years. It's going to be more seats per departure, so bigger aircraft, and it's going to be fewer departures per day. You remember you and I talked about this the Secretary of Transportation as the four big airlines serving the New York area, Delta, American, United and Jeff Blow to cut their summer capacity by ten percent because air

One final question on this insanity, and I actually want to talk Graham, Dodd and Coddle with you actual adult securities analysis not so much who do you blame? But years ago weren't there thunderstorms as well. I mean, I don't get why thunderstorms are now a new.

Thing, right exactly. So the biggest issue is when thunderstorms roll through the area, they're number one unpredictable, so you don't really know where the cells are. You cannot have because of all that at all, if there's lightning in the area, you cannot have your people on the ramp loading and unloading the tags. They have to come in. You can't refuel, so they have to command. So that's to your point, that hasn't changed. But what has changed

Let's talk securities analysis by hold Sell hullaen Becker on say typic United Airlines. I did a log regression of United Airlines back to two thousand and eight where they cratered in the Great Contraction. Great they could go up one hundred percent off that that log extrapolation out based pre pandemic. Do you envision these airlines going up fifty eighty indeed one hundred percent in the near term.

Off the two thousand and eight bases. Yeah, there's no reason why they shouldn't maybe not one hundred percent, but certainly doubles from here. Even from here, I mean, it's not going to be as robust as it would have been without the pandemic because with the exception of Delton,

This is important because I remember I treasured my conversation with Robert crandall, you know, American Airlines and all that he did and the history of aviation. The romance of what Helene Becker covers great. The bottom line is, have they found a new maturity of persistent cash flow or are the group of planes? Are they still sharks where they boom they bust, they boom they bust. Is it a new regime?

No? I mean, I just I don't know the answer to that specifically. I don't think I can. I would never have foretested the pandemic, right and I'm not sure. In fact, I famously said that in one of my reports that you can't shut down the world, and it turned out we did and you could. It's just turning it back on. It's not that easy. And I think that's a big problem. We stopped figuring out how to make this work. And the fix is a multi year fix.

Expensive real quick.

Here, Helene, you get to breathe the same air as Kaivon Rumor. I mean, he's the giant for all of us with an airline transportation security analysis. Is Kaivon Rumor optimistic on the future of Boeing whether they're out of Seattle or Chicago or I think they're moving to Washington this week? Is he still plus plus on BA?

Yeah?

I think so.

I think it's one of his one of his top picks.

Okay, Helene, thank you so much. Helene Becker there with TD Cowen on an upper Thanks to all your anecdotal comments over the weekend on domestic travel. And I've had a couple very worried messages about Baramo and I'm really not sure which airport she's in, but you know it's you know, does they set up the airports and there's no place to lay down because they don't want people laying down, and so you know, she's got a fold out thing where she puts it across the railings of