Surveillance: Pandemic Shock With Kotok

and of course on the Bloomberg Terminal. Great guest joining Katie, Matt and I now David Cotal, the co founder and CEO of Cumberland Advice is David had a perfect guest to do what I've been doing with guests through much of this week, which is just the lesson of one as we approached twenty two before we run away from this year, David and get deep into twenty two. What's the number one lesson for you? If there's a lesson for me, it's the ignoring of the history John of pandemics.

They are different. You were talking about the head I listened to the show this morning in all week, and the morning session that you do in the seven o'clock hour is the one that's you're putting the status of this pandemic. When you hit the history of all pandemics, they are a lesson. This is not a business cycle. That's typical and that's being missed here. We're too much in the weeds, and we have lots of historical evidence

for to guide us, especially with the Federal Reserve. I went back and looked at every pandemic I could find, and there's indicators of impacts on wages, on labor forces, on prices, on interest rates, all the way back to the time of Athens and Sparta. What's missing in the conversation now is the impact. I read Milton Freeman's treatise, I read Alan Meltzer's treatise. They talk about the FED, they don't even mention a pandemic, and that it's a

whole different characterization of global economics. So the big takeaway for the year, as far as I'm concerned, is missing the big picture of a pandemic shock. But David, when we look at it from a corporate perspective, profits have held in there. They've done actually quite well. They've continually surprised to the upside. Do you not buy into the idea that you can look through the pandemic and the economic impact which seems to be waning of each individual wave.

You can look through the normalization of monetary policy so long as earnings growth remains there, Kelly, I agree with that earnings growth to spectacular and it will continue. I agree with Paulson's estimate. Are you Inny's estimate? Are the other ones? Eight ten, twelve? And makes no difference. It's powerful. Why do we have the earnings growth? We have a shock that's demographic. We have people dead a million more

in the United States than traditional trajector rate. We have people disabled, not able to get to work, and we're not finished with this. So what do you get? You get a substitution from labor to capital. When you do that, you get productivity gains, whether it's a robot or telemedicine, and you get something else. You get a fall in the real interest rate. Every pandemic in history has a fall in the real interest rate and a substitution of

capital for labor. Those are the macro pieces, by the way, j Pal understands this, and I believe the composition of the border governors will also reflect it if it's the nominees we're seeing being proposed and vetted now in the public area. So big picture, pandemic shock, not business cycle, earnings will be good. Stock market will go higher interest rates, but a little inflation will roll over back to the two three level, and it will happen faster than people

thinks as the shock adjustment rolls out. Well, you mentioned the empty seats that are still remaining at the FED, and depending on who sits them, do you think we could be looking at a different, different trajectory of policy moving forward. Well, if we look at the three names that are surfaced in the Wall Street Journal yesterday, they lean center, but they are accepting of a changed FED structure that also looks beyond narrow monetary policy. To our academics,

we know what they've written and said. They have some experience, and Raskin is a known quantity, but they're all confirmable. They are all young enough to hold these positions, and obviously they've been able to deal with the financial restraint because the FED governor doesn't get paid very much compared to other positions. So I think policy stays in the middle. That's great for markets, great for the investor class, it's great for the country. What we don't want is shocks.

I'm in the camp they should not reduce the balance sheet at the same time they raised the interest rate It's hard enough for a central bank to do one thing at a time in a pandemic. Doing two things and trying to get them both right is virtually impossible. So my it's good is that one point at a time, do one thing at a time and get it right. It's a good point. And I also appreciate your point that we need eyes that aren't too narrowly focused. I

think of your very liberal education. I know you studied not only economics but also organizational dynamics and philosophy, right, probably reading a lot of favor and fuco um. How how how confident are you that this FED is really in touch with the human effects of the pandemic and their policy actions, especially when looking at something like COVID and the effects of long COVID. Well, Matt, I think j Pal gets it. There's a community system in the FED.

It's got thirty six members to it. I know one they publish their results. They are looking at the entire population of three million Americans and looking at the impacts of the various component parts. It seems to me the point gees who are being vetted now publicly, uh Cook, Jefferson and certainly Raskin have the characteristic to look beyond the narrow. I hope the FIT looks beyond the narrow.

If it's strictly money and velocity and multiplier and not looking at full impact in the agendas we face in the Nited States and the rest of the world, we're in trouble. But j Pals seems to get it. I applaud what he did as chairman and continues to do so. I'm an endorser. Now. If the politicians will leave the FED alone and let it do its job, that would be much better. Independence of the FIT is always threatened

by politics. I want to I want to get to politics and a sense here kind of rip up the script Tom Kean style. Um, David, and I look at your resume. UM, as I think about build back better and the chances it won't pass, as I think about my personal concerns that the salt deduction cap won't be lifted. UM, I look at your resume. You were the commissioner of the Delaware River Port Authority. You serve on the Treasury transition teams for Keen and Whitman. Um. You were a

board member of the New Jersey Economic Development Authority. I've been asking myself a lot lately. Why do these states, especially New Jersey and New York, how such high taxes compared to other states? You know, it seems to only matter the the the UH the salt cap to the Tri state area. If if we don't get that, what else can be done to lower these tax burdens that are incredibly heavy on a lot of working families in those in those states. Well, it takes a shock, and

it hasn't happened yet, And I totally agree with. Our company used to be headquartered in New Jersey where now in Florida. So we've got it. Change not the only driver of the reason to make the change. We were on airplanes flying to Florida because of the migration of wealth here. Now, I will tell you during a pandemic, Florida is not such an easy place because we don't have mitigation. Should we have a Florida which is playing this differently? And two in maya opinion that there is

a detriment to that. My office is now extending it's closing to February and doing a rolling month. We've had COVID cases in our staff among our clients, so we see a direct negative business impact when there is no mitigation. That's not an advocacy for a lockdown, it's an advocacy for thoughtful policy. M David got to leave it there, buddy, But we appreciate your friendship, your partnership with this program through the year, and we look forward to doing the

same through twenty two. Thank you, David. Co talk there of couble of advises with us now in place to say, as Jim Pulson, chief investment officer at the Loophole Group, Jim, you've got a year end price target on the SMP of five thousand. I'm trying to work out if that's this week or next year, which one, Jim, it's it's

next year. I really think, Jonathan, we're gonna have a very violatile year ahead of us, and I think we're gonna end up, you know, margly, not not near as much as we've been used to have late, but I would argue that, um, it's probably gonna be the best in the first half of the year. I I know we're up here. A lot of people think we might give some of this back as we enter the new year.

That could happen, but I think we're gonna maybe go above five thousand during the first half of the year, on excitement that finally maybe moving the COVID from pandemic to an epidemic, and on the realization I think increasingly that inflation is moderating. But then I think in the last half, I think we're gonna see bond yields come up, and and the FED tapering tapering, and maybe and raising rates more aggressively. I think we could have a bit of a struggle in the latter half of the year.

That's why I think we'll end up around five thousand for the SMP. But I think the broader market outside of the SMP five it does better this coming year than the SP overall. Well, let's talk about the bond yields going up, because I know you see the tenure at a year end next year, obviously we're about seventy five basis points south of that at the moment. Does it matter the ultimate rate, how high the rates ultimately go,

or the speed at which they get there. Do you think that is a move that will happen quickly and that that is actually what will be upsetting to the equity market. Uh, it's a great question, Killy. You know, one of the things that I've looked at recently, looked back and looked at all the months that we've been under a three percent ten year yield, And I got to tell you, when you're under three percent ten year historically, we've only been there about twenty percent of the time.

It is a gift to equity investors because the stock market, what it does is almost annualized UH annualized monthly returns and it and it has negative monthly returns a third of the time, third less compared to when above three percent. The return when you're above three percent is ten percent, but it's one below. So one of the things I think it is important for investors to focus on is rates are going to go up, but boy tell you, until you get back above a three percent level. The

history on the stock market is awful, encouraging for stock investors. Um. That doesn't mean, um that a rate rise of seventy five or hundred basis points over a short period time won't bring a correction, and I think we might we will get that later this later next year. But I think it's important to realize not to totally run away

from stocks, at least until we get back above three percent. Tenure. Well, is there no alternative, Jim, I mean, is that part of the thesis or uh do you see other places to go, especially to hide from inflation? Um? You know, Matt, I I UM, I could be wrong, but I really think inflation is going to moderate. I think there's already some favorable science. Commodity prices have kind of flattened out since May break even rates have flattened out since May.

And I think what I'm most encouraged by is that policy, both monetary and fiscal, have been tightening really since March. The h M TOO money growth annual growth was twenty seven percent year on year in March, it's now thirteen. FEDS balance sheet was growing at eight percent in March year on year, and it's now under So there's been a good degree of monetary at least less stimulus, if you will. Uh, fiscal deficit was nineteen percent of GDP

earlier this year. It's now under twelve percent. So there's also been fiscal tightening, if you will. And I think that policy leads inflation historically anywhere from twelve to eighteen months. And UH that those tightening moves since since really the end of the first quarter I think come into play next year in moderating inflationary. Fourth, so with the commodity prices, which are the leading edge of inflation pre sure already showing a roll over, and policy behind that now moderating,

I think we're gonna be uh. I think it's gonna be a good outcome for inflation. And I don't think it's going to return to our two percent and FED target. In fact, I think it's gonna stay elevated around three percent and the balance of this recovery. But I do think it's gonna moderate next year, and that's gonna calm fears of runaway inflation. Jimmy just said something really really interesting.

You use the word timing, but then you said that the equity market wouldn't get hit until ten your year. It's got to say now, I'm trying to work through this with you now, jim So bear with me a second. Are you saying that we can get inflation down with the Federal Reserve doing what it's doing without actually seeing tight to financial conditions. I expect bond yields will will move up, as I said, to two and a quarter percent next year, primarily because I think economic growth is

going to continue to be to be strong. UM. I also think a realization is going to hit us next year Jonathan, that we're not returning to the FEDS two percent inflation target. I think the Fed may even adopt the three is okay uh as an inflation target. They'll you know, move their inflation target up and I think the bond market is going to respond to that as the year progresses. And also expect the Fed to raise

the FED funder rate over there. And I do think that will bring a correction, but a correction that's viable in my view because I think the market will recover from it and move on to new highs. And I really think that the earnings and fundamentals of the economy are going to remain very, very strong and that is going to continue to drive this equity market. Jim, thank you, buddy for everything for today, in for the year so fine. Looking forward to looking forward to two to cover that

with you as well. Thank you, Jim. Jim posting there the little good. Sarah House, senior economist, d Wells Fargo Securities joining us now. Sarah, I know you think we can see a seven handle on inflation early in see five percent for the full year. Does the O Macron variant provide upside or downside risk to that inflation outlook?

So I think for inflation O Macron does provides perhaps from overall upside when you think of the ongoing pressure on goods prices, I think you might get some offset in the near term on things like travel related prices. So we saw that weekend temporarily with the delta wave improved a little bit in November, so I think the recovery and travel related prices probably gets pushed back a

little bit further further to the spring. So there are there are some offsets that I think overall, just given the pressure we're seeing on supply chains and what that's doing two goods inflation, I think O Macron probably does does pose a little bit of upside risk to that inflation call. And is the upside risk to inflation larger than the downside potential impact to growth. So I'd say

it's it's probably fairly balanced. So I think we've seen some give back in terms of activity if you look at some of the things like UM restaurant reservation, so I think you've seen some some moderate pullback that I think overall the the effects of each new wave has has had diminishing impacts on both growth and UM to some extent, and inflation as well as people are tired of of the pandemic, and so I think we have

seen a great deal of COVID fatigue. People aren't changing travel plans UM around the holidays, even in the face of this very contagious variant, and so I think with that we we are seeing the overall effects on the economy, whether it's growth UM and even to some extent defending patterns UM is diminishing. When do you see that playing out in the data, Sarah, So, I think we will probably see some of it in in the December data.

So I think again see some of that. And when you we look at the inflation numbers, I think some weakness in areas like UM, like travel services picking picking up again UM. I think you'll also see in terms of of perhaps in the higher numbers some renewed weakness and things like leisure and hospitality, as as perhaps employers are or maybe bracing for a little bit of a

gift back there. But I think it's probably really going to be more more present in some of the January and perhaps even even February data, So we won't get a full sense of the dent from Omicron until probably early in the first quarter, but it will likely be a dent rather than a major crash, right because I look at crude oil for example, still hovering around one month hie, it doesn't look like mr Market expects a

real um ding in demand. Right. And again, I think we've seen that this this idea of fatigue and people have they feel like the tools to to carry on more with their lives than we did this time last year. I think suggests that we're not seeing that same degree of impact on on activity and to some extent that this wave is has the potential to be relatively short lived, given how contagiously seems to be a potential for it

to burn through pretty pretty quickly. And so I think our our overall outlook for two is still very much on on track in terms of another year of above trend growth, even if we get off to a weaker start than than maybe envisioned only a month or so ago. But while we're talking about the kind of demand side and the consumer, obviously you don't necessarily see any risk to demand from Amicron. But on the inflation side of

things as well. When we saw those personal income and spending numbers, this data come out last week, real spending when you adjust for inflation, was flat. Are we going to see a consumer moving forward that is less tolerant of higher prices and consumption going to start winding down as a result. So I think we are going to see greater pushback in terms of the inflation picture in the year ahead. So we've seen that over over consumers.

You know, many businesses just largely price taker seement with that and see seemingly insatiable in the end. But I think that we are seeing demand. We're expecting demand growth to to moderate over the coming year, so still very strong. That you don't have as much fiscal support um at the backs of consumers, and so I think that does lead to more to more moderate growth. And again we've

just seen these eye popping and inflation rates. I think people are um considering thinking twice about about certain purchases. And I think the businesses maybe won't quite have the same the same degree of pricing power, but I think they still have quite a bit. So uh underappreciated in all this the spending picture and the inflation picture is just how strong demand growth has been. So we're going to see that moderate but um but still very strong.

I almost forgot that I was super excited about the Richmond Fed Manufacturing survey, because I I really am. I'm looking so excited you forgot. I'm looking at sarah UM, the supply chain. I'm trying to figure out when this is going to get rolling again, when UM companies are gonna start putting inventory back into stores back on dealer lot um. And the Richmond Fed survey was good at

came at the headline number sixteen compared to twelve last month. Economists, we survey, we're only looking for thirteen shipments went from zero to twelve in a month. UM finished goods inventories went back up still to negative seven, but from negative twenty three. Does it look to you like these wheels are starting to turn again. It's a start, but we have a long way to go when we look at

the inventory picture. So we have seen some positive signs UM coming from the Manufacturing Service uh in manufacturing surveys of the I s M in addition to the Richmond index. But if you look at the retail numbers, so go further down the pipeline, the retail inventory to sales numbers have have still just really made no headway from the outright collapse that we've seen over the past year. And so this is this is the start, but I think we're still going to be dealing with these supply issues

for the better part of the upcoming years. There's there's a long way way to go in terms of rebuilding those inventories. And again, you still have pretty strong demand into your head, if not quite as rippling as what we saw well, and of course we know that the FED can't necessarily do anything about those supply side issues, Sarah, but the FED is going to try to do something eventually to rein in inflation. Why do you think the

move isn't going to come until the second half. So in our last published forecast that was before we got the before we had the December FED meeting, I think what we learned from the December FED meeting is that their reaction functions maybe a little bit more aggressive than what we had anticipated. So I'd say the risks to our call are perhaps pulled forward um from UM where it might we might see a move perhaps as early

as as the second quarter. But I think overall, um, you know to your point that there is some limitations and really where what the FED can do given the where a lot of these these inflation pressures are coming from. But they certainly can signal that they are attuned to these inflation risks, that they are in a better position to to tackle them if they should persist through the second half of the year, which we think they certainly will, and so that should get the FED moving more aggressively

in the second half of the year two. It helps them that and signal that they are on top of this inflation quandary that's facing the economy. Sarah, this was too serious. The found a question from me, when is the Christmas tree come down? When? Yes day? You go

on New Ys Day? Key? When do you? Yeah, maybe maybe a day or two after, given that it's it's on a that will have actually say, how can you do anything on New Year's Day except for sitting in bed with an ice pack on your head watching a movie? You have to some day? I wish you children don't allow after New Year's After New Year's probably the day

after New Year's Day coverage. Um no, not really didn't, but We're constantly moving from country to country, so we don't have any place to really put a tree right now. Try Sarah House, thank you, last fungo securities. You want to us on the economy and on Christmas trees. I believe the actual date, Kley is January six, when the Three Kings arrived. Very place to say that joining us now is Dr Batti Hansarti, Associate Professor of Emergency Medicine

at Johns Hopkins. Dodger, I want to talk about your experience in just a moment, because you've been need deep in this pandemic, particularly over the last couple of weeks. The decision that was made this week by the CDC to cut the isolation time down from ten days to five days, there was a group of people that said this was not a scientific decision. This was a business decision, a decision about business and happen this economy, get better work, Dodgor. What was it for you? I felt like a kick

in the gut, to be honest, right. I mean the problem was that the CDC media release I was released to sabate win third was targeted towards healthcare workers and they would be fine from a science perspective, right, because we think the incubation period and the viarrel application cyclist lower.

But this idea that you know, because your healthcare working, you're needed to support the response, We're going to decrease your isolation time UM was released challenging The fact is I may be a healthcare worker, but I'm also a mom, a daughter. I have other people who are likely in my household are going to be sick with COVID that I need to look after. Also when I don't feel good and I've been through COVID which is extremely terrifying. UM and varies and how it responds to individuals, I

may not be ready to come to work. And I think healthcare workers are also humans, so you know, as you can talk and the meets me Internet, that healthcare workforce did not respond well to that press release UM. Based on a scientific perspective, I think we're still trying to work out viral replication UM. We need more data UM, but it seems that individuals are more likely to be asymptomatic and the incubation period is smaller. Don't do you do you think the data backs it ups or not?

I think the data does back it up. Okay, so that's a good step forward. How close a way to treating this as if it's any normal seasonal virus. Do you think we are taking a step towards that. That is a million dollar question. I don't think we're that yet.

When you talk about this thing, Oh, this virus is endemic, right, that means it's predictable, the impact on the health system is manageable, and that the replication for every person infected, one other person is transmitted to We're not there yet, right. The virus is evolving. People are still being hospitalized, people are still dying from covid um. I also worried that when we think of us as a c small virus or rub it off as mild, then we'll become complacent.

And I don't think we have ruled that. You know, I can understand perfectly, doctor, you're your emotional response to the reduction in um the suggested days. It depends on whether you're looking at this as an economist who wants, you know, the wheels to start turning in business to get back to normal, then you're like, oh, great, five days is better. But if you're looking at it as a human who is experiencing disease UM, and it's taking

an emotional toll. You don't necessarily want to go directly back to work in five days, regardless of what your job is, right, UM. So I just want to say I feel you on that. UM. In terms of the hospitalizations, I know a lot of people are showing up in emergency rooms and hospitals who don't need to be there, and that we can say should be discouraged on here on internationally broadcast television. But it doesn't seem like, oh, Macron is sending people who are severe enough back to

the hospital as much as Delta or Alpha have. Is that the case? So there's two questions here, right is a Macron independently less virulent than its predecessors Alpha and Delta? And the challenge in really answering that question clearly is that the population right now is different to the population that was INFLAYD with a Delta. People that are getting sick or a younger less liked to have cobidities, and there's a higher propulsion of individuals who are vaccinated who

are getting a secondary affection. However, yes, when you look at the actual number of hospitalizations right now, UM, for a hundred thousand. That is way lower than when we saw a delta, and the number of deaths assimilarly as low. Well, but obviously if more people are getting infected, then that will bring the numbers higher just by pure math. Doctor, how how quickly do you think that this could spread through enough of the population that hospitals can become entirely overrun. Well,

right now I'm sitting here in the best Maryland. I work in Johns Hopkins Hospital in Baltimore, and we are entirely overrun. UM. Several hospitals in the d n B area have just declared a disaster um declaration, which means that we man we had to suspend regular operations. UM I was telling you know, folks, yesterday I worked a clinical shift. UM. I was not meant to be working.

Was meant tomorrow one day off with my kiddos, and I was called in because we were so overwhelmed with a number of patients in our waiting room that we need extra staff to come in and try and sort out those who are sick opposed to those who can go home and wait with their test results. Dontor can I just say thank you for everything you do? You've just been absolutely brilliant this year, and thank you for working with us so closely over the last twelve months.

Looking forward to doing more of the same through next year and hopefully we get some better news. Dr Barti Han Santi There of Johns Hopkins, Dan Ives of web Bush has a four hundred price target right now ten ninety eight. Dan, great to catch up with you, buddy. You say Tesla is in a clear position of strength China for you at the epicenter of that. Let's start there, Dan, Why well, I mean it's about the man. If you look at demand in China you started off earlier this year,

it was rocky. Now going two thousand twenty two, it would be about fifty thousand per month run rate. I think that could be deliveries for Tesla going into next year, and that's a winch pin to the both thesis. Plus the supply piece is really key because they're also the profitability for cars they sell in China incrementally higher than those that they sell in the US and Europe. And that is why in our opinion, this is doctor continues to move higher in the China story account. The US

plans disrupt the game. I mean, that's the part of this story. I'm excited about. Down the likes that GM ford. Let's see what they can do in the next couple of years. GM is under a comface. Now walk us through that down how GM becomes that disrupted after being disrupted over the last several years. Yeah, and it's a great point. Look, we don't be this is Zeroor some game. It's not Tesla or And there's one winner that was

really the last few years. Now you look at the star Wars and Detroit for GM, I think there's a massive rent of sounds of growth and I think these stocks, specifically, GM is going to get re rated on the the initiatives and if you get conversion of ten in the base over the next three to four years, this is a stock. And then you look at forward what Farley has done. I think that's another story that continues to get readed because as me and you've talked about many times,

I never viewed Tessa as an automotive company. Have you as disruptive technology player. I think you're gonna start to see those multiples and I think, b W you put them in that same bucket. How much does the supply chain snap who um that we've seen over last year push things back, Dan because I'm pumped to see Farley's ethel and fifty Lightning. I can't wait to see Mary

barras Hummer. But I feel like it's gonna take a few years before these things are actually rolling on the streets looking at how long it took them to get the Bronco out there. Yeah, look, I think it's a great point. I do think this is different in terms of what we've seen on VS. We're starting to see from an engineering perspective, battery perspect I mean, these companies are really doving to deep end to the poor and evs.

So I think for GM, as opposed to the Snap Foods over the last few years, I don't think we

see that over the coming years. And you know what everything Mary and the team are doing, That's why I think GM will be that rerating on the thirty models coming out over the six seven years and you could forward I mean f one fifty In terms on the the electric side, I mean that's really going to revolutionize the category along with Ribby in and we kind of view that pickup truck market overall as a trillion dollar market over the next decade for ev S. I'm so

excited for it. Dan is the market though, big enough for all the players. I know it's not a zero sum game, but there's so many names out there, Tesla and Rivan just um. Rivan is one of the newcomers. Lucid is another one. You've got the kind of stranger Lords, Town Motors. I don't think they've actually made anything. Nicola apparently they're gonna production. You've got Bowlinger playing in the pickup truck space, plus all the old school gm Ford Folkswagen.

Is this market going to be big enough for all of them? And by for example, Well, like in any market, you're gonna have winners and you don't have losers that go by the wayside. That's why I think it's an investor. You gotta have a basket way to play it. Test To continues to be our favorite. But you look at names like Ribbean in terms of what they're doing on pick up and ultimately as sort of a vertical integration.

And then you want to play Europe, you want to play China, you want to play Neo x Ping and some of those. But you know, I think it's a FOURK in the root situation as we in two thousand twenty two, because like you said, it's about execution. Any of these startups miss execute or have any sort of headwinds. I mean, stocks could get the natural split down fifties sixty many throwing the white towel. So then you have to almost separate in terms of who's going to be

the winners. And also there's gonna be a lot of supply chain players names like life Cycle, charge Point and some others. In terms of the infrastructure side, when we talk about EVS, Dan Matt was bringing this up earlier, how is there a limit to demand growth given that the infrastructure isn't necessarily as robust as can support you know, every single American having an electric vehicle. I mean today it's only three. So if you look globally, three automotive

is EVS. We think that goes toeptember cent by two thousand twenty five. Now, the infrastructure today could support getting up to about of autos being evs. Ultimately you're gonna have to get charging stations up to about five thousand by the end of the decade. But I mean, if you look at the growth potential, that's why we view

it it's a five trillion dollar green tidal wave. In terms of the amount of spent over the next decade, I think you start to hit some issues in terms of from an infrastructure perspective, if we don't see any movement, especially in the US in terms of charging stations the green it needs upgrades and some things like that, but that won't happen till two thousand, two thousand twenty six.

Between now and then, we see a very very clear path the massive growth and of course Europe, you know I I think we're really starting to seeing acceleration there, which is why they give Berlin factor is so important. Yeah, does any but does any other manufacturer do it? Uh as big as Tesla. I mean, They're supercharger network is huge. But I haven't seen any of the competitors go out and do it on their own. They're all waiting for

the government to come and step in. Well, that's why in the EV market it's Tesla's world and everyone's paying rent as of now because of the super charger network and because of that capacity. And when you look at Berlin, Austin and China combined along with Freemaman, they'll have capacity about two million units. So just like you're talking about Matt with like some of these comings of ad stumbles,

can they actually get the cars out? That's why Tesla continues to sort of own the market, but that's not necessarily going to be the keys over the next call it. You know, one to two year you have other players Ford, GM, Riddy and Lewson and some others really start to you know, I think the major beneficiaries v W. Obviously we're very bullish on terms of what they're doing Europe. Dan, you rowe somebody and I scared a catch up. It's been so long. Great to be here. Dan, I stank, you

said of wet Bush. This is the Bloomberg Surveillance Podcast. Thanks for listening. Join us live weekdays from seven to ten am Eastern on Bloomberg Radio and on Bloomberg Television each day from six to nine am for insight from the best in economics, finance, investment, and international relations. And subscribe to the Surveillance podcast on Apple podcast, SoundCloud, Bloomberg dot com, and of course on the terminal. I'm Tom Keene and this is Bloomberg