This is the Bloomberg Surveillance Podcast. I'm Tom Keene, along with Jonathan Farrell 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.
Joining us now is Brian Levick, Global market strategist overt Invesco. Brian, I was thinking back to a conversation we had several months ago, and you refer to yourself as a fauxmo guy, someone who wanted to buy these techniques when everyone else was calling them just a bubble and a rally that wouldn't sustain itself. Brian, where are you now on that call? Given that a lot of people are starting to say, Okay, it's a ballmarket, we might have to live with it.
Perhaps perhaps we can look how swear? Are you looking how swear?
Yeah?
I think you start to look elsewhere, and that's actually healthy. The market is broadening, it's more being into other, more value oriented parts of the market. The cyclical name smaller caps. So it's not just the very you know, narrow market that you saw call it March April May. You're actually getting assigned from markets that this is healthier and there's more participants. In so far, the earnings for the value oriented companies have been quite good.
Ron I think's getting less bad or is the outlook for earnings actually improving?
Well?
I think that things are moderating. I mean that's what you would expect in this part of the cycle. But I think what a lot of investors missed is that the market priced it last year. I mean, you know, eleven months ago we were down nine percent in a month, so or thirteen months ago, I should say, So that was a market that had already assessed what was likely to be a weak economic environment because of all the tightening, and yet the economy has been more resilient than many expect.
I think, or worry a bit is the valuations on the broad market. But that is in a handful of names, and you start to think about this broadening out the names that have not been bid up, or starting to participate more again, which is healthy.
You got to participate, Brian Levitt. But I would suggest what you've got to do is extend your timeline. Where's the new levit terminal value? I mean it used to be seven years, five years. But if I'm going to buy Apple here or all these other fancy stocks, do I have to extend out my terminal value to justify acquisition of those shares? Now?
Well, some of those names are trading at quite elevated valuations, so you want to be a little bit cautious and the near term. But yeah, I mean if you think about the structural themes that these companies are taking advantage of, those are long term stories. So you think about the AI trade, you get a bit of you four around that AI trade, and we saw that in the late nineties too with some names around the Internet.
But if you pick the right names over the multi year period, you did quite well.
It's about avoiding the euphoria and looking at the true fundamentals.
Are you tilting It's a dangerous question for investment. Are you tilting active management or passive management? At this time?
I think it's both.
But in an environment where you're seeing a broadening out, you should see more opportunity in active management. And what you would expect as you move into you know, the next phase. So when we think about a new market cycle or recovery phase of a cycle, that's when smaller caps do really well, that's when international does really well, and in a lot of those places, that's where investors can can really take advantage of active I also see
a lot of money going into money markets. We've all seen that, and you know, personally, I think yields start to come down and over time, so there is reinvestment risks there, and I would advise investors to look further out in duration, or to look further out in things like muni's or corporate bonds, where of course active management can serve you well.
Basically, don't fight the momentum. You said, we make hay while the sun shines, and we heard from Pater Share over the weekend. Don't fight consensus in December and August, and that seems to be where we are. When does momentum stop working, I.
Think you'll see the you know, when all of this tightening starts to find its way into the economy, you'll see the economy roll over a bit.
Whether we're going to call.
It a recession or just to slow down remains to be seen. But your markets go through these phases, and you know, right now this is a market that is feeling like a recovery trade. It's probably not the recovery trade. It's not the beginning of the next cycle. So you'll probably give back some of this in early twenty twenty four as the economy starts to roll over. But what that means is the FED pivots, and when the FED pivots, that's when the new cycle emerges. So this is a
you know, this is still a recovery trade here. We're likely to see you know, a pullback in early twenty twenty four with the economy, but as soon as the FED is you know, shift stands typically over the next couple of years, if not more.
You tend to do quite well in markets.
So then how do you borrow the rally and not buy it, not buy to own for the long term if you're looking to avoid some of that give back in the beginning of next year.
Well, that was part of.
What I was talking with Jonathan about with the FOMO story.
It's you know, I don't know how tactical investors want to be. I mean, if you you know, we.
Use we have tactical strategies that will rotate based on where.
You are in the regime.
But if you're looking out even from here over the next few years, you should be invested in risk assets. If I use nineteen eighty eighty one as an example, and I think I've said it on this show before, that you've got a nice rally. Once inflation head peaked in March of eighty the market did roll over with the with the recession, you never went through the bottom.
And again, if you had invested when inflation had peaked in eighty or when the FED was done tightening at the end of eighty, you were very happy in eighty two, eighty three, eighty four and beyond.
So you'll focus on the you know.
To me, it's focus on what tends to move markets most and of inflation, and the tightening tends to be very good for ass assets.
Brian first in first out.
The right hiden cycle in AM started months and months, maybe eight nine months before the tightening cycle started in DM. We saw the rate cutover in Chile on Friday. I think Brazil is going to follow on Wednesday. Others will follow later this year. We've got an easing posture. I'll call it coming out of China, Brian, what are the opportunities in emerging markets at the moment?
Yeah, I mean, look, you want to lean into where policymakers are aiding support.
To the economy, and this is a very interesting environment.
You know, investors didn't love EM for the prior decade, these em struggled to come out of the global financial crisis.
To your point, EM leads out more accommodative, and even what you saw in the developed world, what you saw specifically with Japan on Friday, I mean, this is a very different environment where the FED could be contemplating easing by next year and the major developed market central banks are still tightening, which tends to pretend a weaker dollar versus our major trading partners, which we haven't seen in a long time, and that starts to unlock some of
that value that exists outside the United States. And you know, investors haven't been there, they've they've avoided it. But it's a better backdrop for international investing than we've seen in a while, because quite frankly, anytime international participated in the last cycle, either the US phrase rates or started a trade war, or we got a pandemic, which ended up abruptly ending any type of participation from international markets.
We've been bent a few times, Brian.
It's going to catch up as olwise in great co for the so far, Brian Levitte of Investment on the secrety market.
Thank you, sir, right now on.
What we've done under surveillance, looking here, particularly at the Pacific room. Carl Weinberg Joints. This is chief economist at High Frequency Economics, but far more than that is steeped in financial crisis on an international basis, and his notes on China and Japan have been absolutely definitive. Carl Weinberg, Why hasn't the yen moved abruptly off of the verbiage and action of the Bank of Japan.
Hi, Good morning, Tom, Good morning, John, Good morning Lisa. You know the currency isn't going to move on a dime. They only moved on Friday. And this change in policy brings sets off different versus in the economy. It's not just about interest rate differentials, but if you're an investor in Japan and you're looking to deploy marginal funds, you're looking at almost an assured loss on long term jgbs
right now. And if you need to have long term assets to offset long term liabilities, you have to look abroad. So to a certain extent, this tightening of monetary conditions, or the allowance of bond yields to rise, whatever you want to call it, drives money abroad and makes the end cheaper, which is not what your traditional interest rate theory says it are to do in the terms of the currency. But I think we have to expect a really mixed pattern for the end moving forward from here.
Do you what's your scope and scale on yen move? I mean, I know you're not in the business of FX analysis, but are you looking one fifty en or one thirty two yen?
Well, I'm not going to take a long term position on that because I still don't know what the Bank of Japan is up to entirely. I mean, we saw this widening of the band. Was this a technical adjustment just to allow more trading both ways in the bond market and to improve trading conditions for people who have to be in the market, or was it the first step in an actual tightening of monetary conditions. It's not
at all clear. As Lisa pointed out, we did the calculations that show that if we had the stock if we had the bond market fully adjust to the increase in the band, that the hit to portfolios economy wide would be about four and a half percent of GDP. That was our math, and right now we have a huge profit on the nike A that if we were to call the end of the fiscal year today and all those bond yield, all that bond y headroom were used, we'd see kind of a wash between gains on equities
and losses on bonds. That's a one shot deal, and I think that uetus On is hoping to take advantage of that, hoping that the stock market will continue its rally and offset losses on the bond market and give him this little step toward normalization. But if that's it, if it's half a percentage point and that's it, then there's no impact on the end whatsoever beyond the next couple of weeks, and there's no basis to look for a major move.
We were also talking about China and how much willingness there will be by the People's Bank of China and just in general from authorities to support an economy that's flirting with deflation. Outright deflation. Do you think that they can come in with something that can avoid more protracted deflation over a sustained period of time.
Well, good morning, Lisa. You know, China's inflation has been not a thing much to talk about for a long time. We've been talking about sub two percent inflation except in times when pork places have been stalling. So we're at the low end of a distribution, but we're not nearly in a deflationary range. The signs of deflation are not there in China. In particular, the monetary aggregates are still growing, although not as fast as they like them to grow,
and wages are still going up. So I'm not particularly scared about deflation in China. What concerns me more is that of a deep recession in China that might have impacts on the stability of the regime, on the stability and constancy of economic policy, and that's where I think
the big risks are. China, unlike the Western economies, doesn't respond to interest rate cuts, to the normal kinds of consumer spending or depressing policies that we see in the Western world, because most of their growth is driven by investment and not by consumer spending, and most of that
investment is planned by the state. The problem with their growth engine is that they've run out of really lucrative investment projects and that's causing their growth rate to slow down on a secular basis, and that's what they have to try to offset by switching, by switching the source of growth from investment to consumption, and that requires a careful mix of policies.
So just quickly, Carl, how likely do you think it is that there is some sort of deeper recession within China?
Well, I think that a recession is probably not the right word. Would be what we would call a growth recession, where growth doesn't occur fast enough to absorb people who still want to come from the farms into the city and to generate the increases in income that people want to see. I think that's the scenario we're looking at
in China. Sub par of growth, so we'll see growth this year of maybe one or two or three percent is our forecast about three percent, but that's way short of what they want, which is in the five to six percent range, and that's the problem for policy makers.
Cal thank you for your insight. It's always valuable.
Can't wipe back there a high frequency economics on China and what's developing at the moment.
Right now, we will go to the red bars. They're in a New York Times poll today, which is front and center as we stagger into August of twenty twenty three. It is an August of a Republican debate. Wendy Schiller joins this non director of Tomins Center for American Politics Policy at Brown University. She's familiar with the electoral process. When have you ever seen anything like this? We got a guy with various legal challenges completely dominating a party
fifty four percent. Trump, the governor of Florida is seventeen percent, and everybody's barely a heartbeat as well. Does Trump own the party?
It looks like he owns the party right now, and he's being treated like the incumbent president.
You know, how dare you challenge him?
I think you know, if you're the opposition, the takeaway from this poll is.
You have to go after Trump directly.
I think they've all resisted it, particularly DeSantis. He sort of runs around it, but he's got to go right at Trump.
Some of the comments that they've solicited in the poll after their sort of standard answers or Trump's a fighter.
Trump's a fighter, that's exactly what they want to see from the other candidates.
Are you willing to do what this guy does?
And the other warning sign I think for the party as a whole is that there be seems to be a bunch of Republicans that are willing to throw out the rules. So if Trump loses a few primaries or it's really close and he claims they're rigged, he can undermine the entire Republican Party nomination system. So I think that the comments are really important to look at in this poll.
Longer and far away, Jimmy Carter, the governor of Georgia, walked down the stairs of an airplane in Rochester, New York, and shook Michka Stanza's hand, and we all said, who is this guy? Who's the Jimmy Carter this time around? Of the two percent, three percent, Pats Scott, Hayley, Ramaswami Christy, who's the Jimmy Carter of the moment right now?
I think it's Tim Scott.
I think that Tim Scott has a lot of equalities that would appeal to the base if they could get themselves out of a sort of culture personality of Trump, and you know, out of the sort of avenging his
loss in twenty twenty. I think he has a lot of appeal, particularly among evangelicals or conservative Christian voters in the South, and can keel away theoretically some portion of that African American base, just as George Bush sort appealed away considered abortion of Blatino base, but also a little bit of the African American base. And I think that's someone you should pay attention to.
I think you the political observer should pay attention to.
And a Trump tim Scott ticket would be a very interesting dilemma I think for the dempart party.
You said that one of the things that candidates have to do is go straight after the former president Trump, and yet Will Heard, formerly of Texas representative, came out and actually did that in Iowa and he was booed off the stage. What makes you think that it will be received by the voters.
Well, the question is who's going to these rallies, you know, who's actually going to vote six months from now, And do you set the stage like Chris Christy's trying to do in some ways of saying I can fight just as hard for.
What you believe in. And I'm willing to take your boots. I mean, I'm willing to take anything you throw at me. But I'm going to stay in the race.
And I think that's, you know, if it's possible for them to do in terms of financial contributions. The other problem with this poll for DeSantis is that it will scare donors right that this guy can't get traction.
What do we do?
And the Republicans have to be careful what the Senate in twenty four the House. This helps right, generating Trump fans going out the door for calling as good in Jerrymander districts for the House Republicans.
But for the Senate they lost.
In twenty twenty two mainly because of Trump endorsed candidates. The same fate awaits them in twenty twenty four. So this is going to send I think, some shutters through the entire Republican Party.
Today, We're going to get some disclosures from the former President Trump's campaign in terms of the Political Action Committee and how some of the money has been spent. The expectation is that millions, tens of millions of dollars have been spent on legal bills for Trump as.
Well as his associates.
Will this be a problem for the donors or has this been sort of understood that this is sort of the fight that they're trying to get behind as part of the fight that he is launching for president.
Lisa, This is a sort of a watching technical question for people who care about campaign rules. But Trump has made no bones about so listening money for him for his campaign, for his legal defense. It is all about him. It is not about the Republican Party. It is about him. So nobody will be surprised, and the donors, particularly small donors, don't seem to care. They're in it for him. He's
their team. They're not defecting from him. The problem is, you know, the majority of voters or the people who can win an election for you, have defected, particularly Independence, but some slice of the Republican Party, and that for the general election is really a tremendous problem, you know, facing the Republican Party going to twenty four. So the voters in the Republican Party don't care how Trump spends the money.
They're giving it to support him.
Can we talk about the voters in the Democratic Party and how they might view the president's handling of a situation with his son at the moment when there are plenty of valligations over the last year about his business dealings.
What have you heard of on that recently?
Well, I mean, I think Democrats face an enthusiasm gap. We've seen that Biden's getting a little bit better, you know, school, We're even going a little bit higher. You know, things are better than people thought they might be, particularly with the economy, and some of the policies that he enacted are starting to show to voters. So he's got a little bit of momentum. He said flat out he wouldn't pardon his own son. This deal at fell apart a plea deal. I think in the end, politically that's an
advantage for Joe Biden. I think people were skeptical of that deal and it can be a liability for him a year from now among Democratic voters who don't get the same deal from prosecutors.
So I think in how this plays out for Hunter.
Biden, if there's any punishment that people view as legitimate, I think that actually helps Joe Biden personally obviously not, but politically I think he does Wendy.
Shela of Brand University. Wendy, thank you, But.
We need to talk to Doug Cass because he is a conduit to Kate Upton. And the real question here is does missus Verlander does she decide that we need to stay in New York for their daughter's well being and schooling. Doug cast is Kate and the one that will decide whether mister Verlander goes in the Mets to the dreaded New York Yankees.
We do need some help these Speaking of pitches these days, I feel like Louis Severino. He had that standing year in twenty twenty two, I think is one loss record was seven and three, Aaron run average of three ten this year is two and five with an ERA seven fifty. I feel that way being bearish on the market what I see her.
Doug and you and I have had such a joy talking the history of the game. I find it fascinating how the end of July is maybe the tension of what we felt the first week of September was not too long ago. Do you think the new expanded wildcard has been good for the sport?
Oh gosh, I don't know. It seems it's when all the trades o car at the end of July, because there is finally resolution of where you stand.
You know.
Stevie Cohen's a very good example his move last week with his pitcher.
I mean, it's gonna be interesting to see. Just one more question on baseballs. What are the What do the Yankees do? I mean, I don't get it.
I mean.
Nope, I have to talk both about the Yankees and being wrong footed on the market's.
Let's make this easier. Does the GM go, mister Cashman, does the GM go?
I said to you last year, I thought he should go. You know, okay, you know I was palsed with his dad and who passed away unfortunately, and Brian's a good man. But maybe it's time for a change.
Yeah, the the your agent says, okay, it's time now to talk to market. Doug cass you've been wrong footed on the market. As you put it, We've all been there. We all have a humility of how hard this is. How do you go about identifying that this is perhaps a true bull market?
Well, as I said, there's nothing more humbling than being on the wrong side of a trending market, especially one if one approaches the investment businesses. I do with intensity, as I do with the New York Yankees. So I'm over two this year with a pretty high ra and that's been the case of the last couple of months. Look, two quotes come in mind. Come to mind. The first one I think was from Emerson. He said, in life, our greatest glory is not never failing, but in rising
up every time we fail. I did a terrible job in well. I did a good job in expecting a strong first half, unlike the consensus, and we were positioned for that. But I did not expect the rally of the last three months, on top of the ten percent rally ahead of it, the good I think. There's another quote Howard Marks made in taking the Temperature of the market, you know, one of his great oak Tree commentaries last month. He said, remember that in extreme times, the secret to
making money lies in being contrary, not a conformist. And to my credit, you know, we think that risk control is an essential part in managing money, especially when one is as wrong footed as I have been. Indeed, in the remarkable advance of the last couple of months, we have been that short, but we didn't lose net money in the life.
Give me a number here. I mean, you know, I don't like to talk numbers with people a lot, but when you say you've eenpowdered in the market, I would suggest with your risk management, it's not as painful as some people. Are you down like single digits or is it double digit agony?
We're up for the year, and as we were last year when everyone was suffering, and as I said in the rally of the last three months, we're even. So we're not even on the year, we're even during that period, which is a good example of the importance which a lot of people don't discuss, even you guys sometimes as
risk control. I know Alison Schrager did a wonderful conversation in the prior segment about reward taking, you know, controlling reward versus risk, and a lot more, a lot more discussion should be made about that.
So with hindsight, Doug, what do you think you and your team got wrong over the last three months.
I think what happened is I underestimated the animal spirits and the fear of missing out in a market that has changed structurally and now is dominated by products and quantitative products and strategies that utilize volatility more than ever before and price momentum, and these strategies know everything about price and nothing about that value. And it's in periods like this, I think that's what bowls like myself and Mike Wilsons misunderstood.
What have you taken away, if anything, from this earnings period that we're kind of just macanimical love right here.
Look, I see, I see basically earnings as they always are in seventy percent of the cases, slightly better than guidance, which is you know, by design by investor relations departments. And also they're slightly higher than revised lower of six months ago earnings expectations. But we see the emergence of a number of concerns, not the least of which is sluggish growth and prickly inflation what I call slugflation as opposed to stagflation, and you're seeing it now in agricultural commodities.
The CRB foodstuck Foodstock Index at a fifty two week high. Look at the price of eggs, bacon, of urea, of ammonium, and obviously of course oil, which is now up I believe has its first five week windstreak in a year and a half or two years and now is above it's fifty week moving average. These are all I looked at. Look at orange juice, orange juice, which we drink. You drink tang ony orange juice, but normal people Tom drink
orange juice. It's up twenty four in the month of July, and people look, the bond market has gotten the clue. The ten year is up twelve BIPs in the last week up and the three or four BIPs today, and they figured it out, but the market hasn't because in my view, market structure animal spirits and fomo and the other thing is the other thing is that what we've also realized is that the US economy has grown far less interest rate sensitive than the consensus or a monetary policies,
policy authorities suspect. So fundamental to my and the cornerstone of my various views that we have higher for longer policy and our rates are going to remain high, and we have as a result, a paper thin equity risk premium, which portends valuation risk, reduces the margin of safety, expands the downside risk for stocks relative to the f side reward, and extends the advantage of credit credit over equity.
Yeah, very quickly here, Doug. What everyone knows is there's a massive overweight on tech. How does that end?
Well, it ends barely, you know, I facetiously said in a column I wrote on Real Money pro that I sent to you that AI is for now an elegant farlow trick with few accumulating near term revene, new benefits, and a lot of increased costs. We will recall the Internet created the dot com boom, but that didn't keep the NaSTA going down eighty three percent in the next three years beginning in late two thousand. So I think that the greatest overval evaluation in the market is technology.
You have to remember, remember we were buying Amazon, Alphabet Facebook at the end of last year. Remember the tax selling. How these doctors are being thrown out. No one wanted them. You know, this is the only business where people are confident in view and can be terribly wrong and come back and our confident view again. I mean, the bulls today are much like the bulls at the end of twenty twenty were bearished in October twenty.
It reminds you of the Yankees in Tampa and February. Dougcash thank you so much, greatly appreciate that with Seabury's partners right now and this is a joy after what we saw in Belgium to bring in Zach Brown. He's the chief executive officer of McLaren Racing and to give you an idea of the breadth, the scope to scale of his history with racing. He actually was in the
cars doing it at a very young age. And he's someone that also has a great amount of Americana, including a precious letter from George Washington to someone arguing about the travesty of Benedict Arnold. This is a renaissance man, John running things at the August You told me McLaren was special.
It's very special, and it's a special opportunity to catch up with Zach Brown of McLaren Racing. Zach water for to catch up with you, sir. A difficult week compared to the success in Hungary and at Silverston in the UK as well. Zach, can you catch these red bulls this year? Can you get away?
Well, we're trying, We're trying. We need them to blink. But you know there's a lot of racing left to go. We're getting closer. Unfortunately, no one's close enough yet, but I would think a win is possible in the second half of the season. It's certainly our goal.
What is it about the setup of the card, the developments that you've made over the last several races, SAG where you think you've made progress, and what kind of races on the calendar do you think we can see that a little bit more.
Aerodynamics? You know, it's very much an aerodynamics game. Of course, you have to have two great drivers, which we have, and you have to have great pit stops and reliability. But it is an arrow game and that is where we've made our biggest gains. We started that in Austria, I think some of the quicker tracks, so I would think austin Japan we should be strong. Abbi Dabi, we should be strong. It's the slow corners we don't like,
but who likes going slow anyway? But that's where we need to improve and we've got some more developments coming, but so does everyone in Formula one, so it is definitely a development race.
Zach West every minute of Belgium, and somewhere in the vicinity of lap thirty one or thirty three, there was Zach Brown talking to a twenty two year old kid quietly who had gone out of the race early as well. Oscar Piazzi is twenty two. At fourteen, he was basically a professional. That's all these kids do is drive, drive, drive. What were you saying to Oscar Piastree at lap thirty three there after he bombed out of the Belgium race.
Yeah, I told him a couple of things. One, don't worry about it. You know, he had such a great Saturdays, having a great season. So these guys feel like they not only let themselves down, but the team down, and so they need to know we're all in this together, and we win together, we lose together. And then also we had a pretty difficult race with our arrows set up, so at that particular moment, Lando was going backwards until we kind of strategically got him in a better place.
So I also told him he probably wasn't missing having too much fun at the moment, just being a little bit light hearted, and you know, these things happen. He's done a fast, fantastic job all year.
Explain to our American audience, including a dummy like me, what did Bruce McLaren give you? What does the McLaren name mean to John Ferrell and auto racing.
It I mean, he was a legend.
He was all about innovation, he was a driver, he was a designer.
So you know, we're very.
Proud to wear the Papaya colors, which was Bruce's colors back in the day, and that was actually done so he could have more standout on television back in the black and white days. And so he's an inspiration to all of us. And he was a racer, he was an innovator, he was a designer and of course a team owner. So we're the second most successful team in the history of Formula One and something that we're very
very proud of. And we were also the only team to one what's called the Triple Crown, which is the twenty four Hours of Lama and the eighty five hundred and of course the Monaco Grand Prix, and it's something that we can hope to do again in the future.
Zach, as you try to plow further into the US, is this something that Formula one has tried to do? Is I'm learning and I'm one of the people who are becoming the adopters here where is the distinction the overlap between Formula One and NASCAR. How competitive is that at a time when NASCAR already has such a cult following in the US and Formula One has a very different type of energy coming from Europe.
Yeah, I think they're complementary. They're different. You know, they're probably have almost the same similarities between baseball and basketball because they're radically different as far as the type of racing, so a little bit of a different demographic and psychographic. Obviously, Formula one is very global, where NASCAR's domestic sport. But I think all motor sports help each other, so I think there's a room for both, including IndyCar, which is
much more like Formula One. It's just awesome to see how big Formula One has got in America as quickly as it has, and I think Netflix obviously has a lot to do with that, as does the Austin Grand Prix, Miami Grand Prix, and the soon to come Vegas Grand Prix, which is going to be off the charts.
As a lot of purists probably feel that the Netflix series perhaps inaccurately reflects some of the dropmor the lack there of, as Max Verstoppin, as John was pointing out has noted as an American who has been in a sport that really has been dominated by European presence, how does the sport have to change to really become as popular in the US.
Well, I think it is changing, and a lot of credit to Liberty who acquired the sport, you know, five six years ago. I think Netflix is a great example that would have probably not happened with previous ownership because the industry, the sport would not have wanted the cameras on the inside of the sport. It was kind of a wasn't an inclusive sport. And I think now we're very digitally savvy. We've embraced the fan. We're all about the fan and things like Netflix where we're showing people
about our great sport. And I've seen some of those comments, which they are a little disappointing because I think they're a bit inaccurate in the sense of we're capturing our great sport. When Netflix puts together the content, well sometimes pick and poll because they're trying to illustrate a point. So we as the racers, we'll see, for instance, oh that was a clip of our pit crew from Monaco. But they're showing US in Italy, but it kind of
doesn't change the narrative. So I think we're a little bit too close to it. Mdtrus Formula ones all about the details. We get a little bit wound up when the details a little bit inaccurate.
E zact, tell me how the commercial agreements have developed over the last couple of years. Let's just say, for example, we wanted to put Bloomberg surveillance on the side of Lando's car.
Let's just say, let's just say, what's the cost of that now.
Competuating us several years ago, Zach, how much has the price of that increased.
It's probably gone up twofold in five years. And I think what's great, though, is the exposure has gone up fourfold, so you know, it's all value for money, but the demand.
I mean, if we look.
At our our partners, right, Google, Cisco, Dell, Goldman, Sachs, I mean, these companies were not considering Formula one five years ago, and now you've got the world's greatest companies joining those that were already there. So it's it's been unbelievably commercial success, Zach.
Real quickly, and by the way, you know, John and I think we can piece together five thousand dollars to get Bloomberg Savellians on the side of the car. You guys are always tweaking the cars. Now you've got a summer break like Pharaoh has a summer break. I mean John's taking off all of August into September. You go from Belgium to Netherlands. Is your car going to be tweaked and different for Netherlands or do you actually take a real European holiday?
No, well, a bit of both.
But you know, everything's about advanced planning. So we will have new bits if you'd like on our car and hauland but those have already been developed. The shutdown is for the technical team is mandatory. We can't even send an email. So I'm going to go to a lot of time with our IndyCar team because you can't keep me away from a racetrack. But no, we are. It is a very genuine You cannot touch the race car for two weeks. You can't even communicate about the race car.
But that's all planned in so our developments are already ready.
I'm having that written into my class.
Same bratas did you just hear that?
Zach Brown of the Clown racing Zach, Thank you, sir, appreciate it, and good luck for the rest of the season.
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