Surveillance: Rate Stability with Allianz CEO

reality of asset manager. When we do this with Oliver Beta, he's the chief executive officer of Alian's. He's been on a tour of duty for a good number of years to see their success. All John and I want to know is you have the football sponsorship of the soccer team, the football team from Munich as well. We see the sponsorship of sports. What's the value to Alian's payoff of

Byron Munich. Oh, it's a hugely positive because that's the best brand in sports and at least in our country, and we've been associated with it for many, many years. I'm very very proud of it. Now you have a bond bear market. Some would say your best brand and acquisition was the gross Hill area in combine of Pacific Investment Management Company years ago. Give us an update on bond asset management in the view forward given this great

bond bear market. Well, the current circumstances are tough, but it's very good to be with the best company in these environments. Right, so we see a flight quality over time.

People are watching. But if because we have a very very long duration business model, we look forward, we believe it's going to be fantastic for Pinko and us over the next few years as the interst rate stabilized, because the money will come back into bonds, and think about accumulation at the interest rates that we have people off. You don't run in a simple MPV model and say what does it mean if you're reinvested at five percent or four point seven five rather than zero. You buried

an important line there. It was in there, but it was buried. When interest rates stabilize, they're not stable. What did you make of what happened in the guilt market in the last couple of weeks. What are the lessons you've learned from that? The first one is um if you have a political idea that it's not anchored in economics, it's very dangerous, particularly if you're not the world reserve currency like the US dollar. We have learned that number one brexit now will start to pay the price and

you see them. And the second thing is that markets have become to dominate again. We're coming out of fifteen years of quantitative using, no price for risk, nothing, no fiscal discipline, no monetary discipline, and suddenly that's back and people have to get used to the fact that the

laws of physics hold again even for governments. Well, and we were talking about how this gives room and gives rise, and once again to bond vigilantes, are you the bond vigilantes do you actually actively go through some of the policies and say not going to buy this company, not going to buy this nation because of what they're doing. I wouldn't be thinking about negative selection, because that's what not what we should talk about. But we're looking at

countries and companies that properly manage. Now, if you have a dual, definitely think about that. Three years ago we had three times the financial stimulus in the United Kingdom that we saw a few days ago. Nothing happened in the market, right, nothing happened everybody was sleeping and then suddenly people wake up to the fact that what has been done is really a disaster, and suddenly the prices are coming. Why is that? Because of inflation? People have

started to reprice assets fundamentally, not just bonds. And by the way, we are not even at the midpoint of repricing of assets. We've just seen the liquid assets reprice. The rest will come. Now. When you said actively selecting specific companies, specific nations, that speaks to the active selection that so many different fund managers talk about now as really rating supreme. Where does that leave passive management. It's

really interesting. So it is different between equity markets. If you have large cab equity, you can invest in them very effectively through index. If you're in the bond market, you and you don't know where things are going to better be with the people that know what is happening and can differentiate. It's a great proofpoint. So I hope that all our colleagues are proving themselves now to repeat something you said moments ago, the liquid markets have reprice,

their liquid markets haven't yet. What's that going to look like. We spent a long time talking about putting back the veil and some of the carnage that might take place because of ten years worth of zero interest rates. And what we get told is that in public markets and credit balance sheets are strong, the resilience is there, the maturity walls is way out on the horizon, not coming soon. What's going to happen in private markets? I'm not a great investor, so let's just we're not trying to do.

To be is very hard, but it's very hard to see it, and therefore it doesn't mean it doesn't exist. So people have to face a lot of scrutiny now on how the funding is. So watch out more not just leverage, but liquidity, I think, and we saw that in the in the guilt market. People do underestimate liquidity uh traps, and that's something that we need to look for. And you see that in private equity when people look where our earning is really coming from. Our there trading

amongst each other's are their true exits? What are the funding structure? So it's going to go through real estate private equity just slow slow motion, but it's gonna come. The gravity is back, the risk free rate is back as well. Talk about conservative money, pension money, forget about all d I and the gyrations in London, just normal institutional money. What's the shock going to be is the risk free rate returns. So the key thing is really

and that's what we also have to do, think about resilience. Right. The point is the shops were the shocks will be harder than people anticipate. The diversification is the thing that is never there when you needed the most. So people really need to look at their models and saying, you know,

how come the world completely missed out on inflation. I mean when you think about the fact that in November of last year we've started to buy inflation link bonds lot a lot of people are still saying yeah, but in the middle of this was all central banks, even some of our best economy. So the question is why is that happening? And the first answer is I don't know why. But what I know is we have to de risk. And so how do you dus you just bring in duration? Do you have to change your actual

how system? Yeah? The adult money is basically yes, if we were, you know, completely in an endowment, you would really selectively take risk. In this environment, we can't with a double A rating and one of the few places in the world and even give the impression that we

don't have our Telerisk under control. Given that you're based in Europe right now, how concerned are you about the prospect that the pain that you're experiencing now both my business and an investment perspective, is not just going to be this winter. It's also going to be next winter. It's also going to be potentially for years to come if there is not some sort of sustainable energy plan put into effect. So I have to be a real list, but I'm also a bone optimius. Otherwise I think I

couldn't do the job right. So the first thing is, I think particularly the key thing is that people I think have been over selling Germany, if I may say so. So I'll give you an example. We have had demand contraction on gas fifteen percent already this year. Now much for example, it's been only two so we will have most likely enough gas to come through the winter. People

do not factor that in now. The second question is what will be the implication for industry to reprice its products and its production supply change to a higher energy price. And that's happening. I really believe in in our engineering capability is very comparable to Western Switzerland, where everybody said, when you know the Swiss frank was floated, that all the manufacturing companies would die. No, no, we invest in innovation, will be very good. The key thing is, however, we

need for Europe to realize now one important thing. Germany needs to really focus on reinventing its business model. It's over with cheap energy from usha Um. Successful Um exports to China and America providing all the security. I mean that three formula is ending and that would require a lot of energy on the German people to fix it small, which means we have less attention and tolerance for dolling out money to other people. This has been really really informatives.

Are just wonderful to have you in with this, but this isn't why we had you in. You people finance baron Munich, the soccer team in Munich. Are you guys gonna steal Harry Kane from Tottenham? I mean that's the only reason we had you. Are you going to bankroll this football team in Munich to steal the jewel of the United Kingdom? Even if I knew the answer, I wouldn't be able to tell you. I mean, this is this is that's the only reason we had the I called up Quantis and I said, get the guy from

Alliance Alian's in. I said, get him in because these are the people they're gonna steal. Harry Kane are we're going to do the show from from bay Munich. I think October. So I have to say I do like the dormant too, though. You know, every forced German is our clients, so we have a lot of a lot of fancies. It's going to be very difficult. And then you Ventus and you ventors. How the stadiums do you have quite a few, but if you're twelve twelve across

Europe or worldwide, no worldwide. For example in sub Paolo, the stadiums also branded Alliance has been a great investment. Amazing. Yeah, it's really and people pay a lot of attention, and you know football, that's something that politics can do. This as we unite people, we bring people together, we make them enjoy their lives regardless by the way, most often on both sides, you know, whether winners and losers. And therefore it's it's great, it's bipartisan. You realize if Harry

Kane goes from Tottenham to Munich. It's un American's been trying to have some greatest sport in the world. Just the greatest sport in the world, nothing close to it. It just is truly the most brilliant. I don't recover regardless whether it's Juventus or Bayan, would would be the lated dost. You'll thank you, We will take that under. But can you too have a discussion in the World Cup? First discussion in the World Cup and Bloomberg surveillance like

you want to throw that in Germany and Kata? What are you looking for, sir? Do you think you can make it happen when a world come another one? I don't know. It's a lot of a lot about passion, but it's also about you know, the right moment and to have the energy when it really matters. Certainly crossing my fingers. But the most important thing is to have a great, great, great tournament. Can you tell faifor we never want to do this Winter World Cup ever again?

I think it's a travesty, I really do. We're taking a month off in the middle of the season to that's it. It's been air conditioning in the football stadiums. Yeah, interesting choice, but it is there, and so I think we're always great at criticizing things. I think critic think that's what this shows about. Thank you for right now and this is a joy with the chaotic weeks that we've had in a Monday into another week of chaos. Bob be aild to joins us. He's head of America's

Fundamental fixed income at black Rock, with decades of experience. Bob, I want to cut to the chase in the great bond bear market. What is the level of pain on level? I was talking to Axel Weber in Washington and he said, forget about the numbers the spreads. Look at level. Bond prices are down. What does it signal? Well, Tom, I think that's a great point about spreads versus all in levels.

So the cost you know, debt spreads for example, I G. And high yield spreads aren't at recessionary wides that we've seen historically, but the all in cost of capital has gone up substantially, right and and and in the investment grade space, you're talking about an index that's now a six percent yield. And in high yield space you've got companies that were funding a year a year and a half ago at four to that now can't get funded inside of ten and and may not be able to

fund at all. So the cost of capital has gone up substantially. And I understand that there are a lot of really good savvy liability management UH strategies that firms employed and households employed by refinancing their mortgages two years ago, and that there's got they's got these very attractive liabilities on the balance sheet. But the incremental spend right, the next thing that one might invest in, whether it's residential or or commercial, is going to be substantially more expensive

from a debt capital standpoint. Let's talk about the great Dan Fuss at loomas sales and he would say, that's great, you've got the free lunch of a high nominal yield, But do you buy that nominal yield into reduced credit quality across all of fixed income assets? Is there credit clouds out there that make this not an easy decision? Yeah? I think so. I mean, look, you guys were just

talking about this. The FED is on a mission. This is a very intentional and aggressive tightening of domestic monetary conditions in an effort to slow growth, slow demands specifically loosen up the labor market a little bit um to get inflation back to target. So so definitionally there there are going to be some things that probably break along the way. It will be really really hard to do it without some of that happening. And and but but I also think at the same time, here's one of

the interesting things. Volatility is so high in the rates market right now that it's really hard to look, you know, three months forward or six months forward. It's it's hard to look more than three to six days forward because

the vall is so high. Right But I think if you can take a step back and think about the valuation of high quality fixed income assets today, you can build a pretty reasonable portfolio treasuries, agency mortgages, investment grade corporates where you can go in and do the name selection so that you can avoid some of the more stressed or potentially forward distressed names. You can build a high quality portfolio intermediate maturity in the five to six

percent range, including treasuries. So you've got to flight the quality asset in there in in a shock scenario. That's we haven't been able to do that in nearly two decades it's it's things are starting to look reasonable. I get it that we're probably not at the bottom and there's more stress to come, but things are starting to look pretty reasonable if you can take a longer time horizon. That that is the key point, if you could take

it a longer time horizon. And I wonder about some of these mutual funds or open ended funds where they could potentially be withdrawals, especially when it comes to investment grade credit. It makes sense perhaps on a thesis basis, but on a real basis, investment grade is underperformed dramatically because of the rate story as well as this forced selling that we've seen international investors that sell what you can,

not what you want to. How much you concerned about that creating some sort of fissure in the short term as you see things like what happened in the UK for some sellingently. So that is exactly the right thing to be focused on. We've seen this movie before, right when when you tighten financial conditions this aggressively, this abruptly, things are going to break And where do they break first? Almost always it's in the levered strategy, the levered business model.

You know, I would look at I would argue in the UK that yes, the push toward you know, a much more aggressive fiscal policy kicked off more pressure in an already deteriorating market, But the proximate cause of the real stress in the long end volatility was the levered

ld I business model and the increased margin calls. Right So, if you're if you're levered, if you have to borrow to sustain your strategy, and importantly, if you have to pay higher margin calls margin costs, excuse me to to to to to maintain your leverage, you're in a really difficult spot right now. So those business models, you know, kind of should be stressed, and I wouldn't be surprised if we don't see some more of that before this is over over the next three to six months. Thank you, sir.

As that of black Crop, Lori Cavasina joins us now they had a FEU secuity strategy at IBBC Capital Markets, Laurie, it wasn't about three Q earnings, it was about gun it's a four Q and beyond what are we learning so far? So look, I think if so far in reporting season, John, I've been a little bit disappointed that it sounded a lot like the last couple of reporting season. So we're hearing things like the tone around labors improving a little bit, not seeing any major crack chat in

terms of either the consumer or demand UM. But companies are battening down the hatches and getting ready for chopp of your time. So at least there's that UM. But I think that in terms of you know, if you wanted the earnings band aid ripped off, and that's what a lot of investors have been telling me so far, what I'm hearing is, I don't know if we're going to get it this reporting season. I think we may have to wait till, you know, February March to get that. Laura,

you and Ben Laylor on the same page. Ben Laylor starts off by saying, the first ever so slight glance here at earnings are less bad. Start and then you talk about moving to high quality. Define what high quality is is a comfortable place to be. So high quality is a factor discussion that I have with a lot

of investors. If you talk to your average portfolio manager, small cap or large cap, especially in the small cap space, odds are they've done some sort of back test that tells them that things like positive earnings and high are O we outperform over time, So come invest with me,

because that's the portfolio I run. And so what we're starting to see is that after a summer in which the low quality stats so negative earners, highly shorted names, negative r OWE, low r O WE, those names were actually working pretty well coming off the June low on a relative basis, And what we're seeing now is that more of the high quality versions, positive earners, the high r OE, the lowly shorted names are starting to work, which, frankly, Tom,

is a silver lining heading into the end of the year because that actually bodes well for active manager perpartment. To me, Laurie, this goes to the risk free rate returning here. And maybe it has to do with big combinations like Kroger and Albertson. But all of a sudden zombies have to report. Is what we're really talking about here is not high quality, but that all of a sudden, it's zombie November. I think that's a fair way to look at it, Tom, But you know, I would also

say it depends on your definition of zombie a little bit. Um. I think that in general, when you're going into sort of a lower growth uncertain time. Investors do cling to those higher quality names, and typically those are the ones that do come through manage through challenging situations a little bit better. So I think that you know, investors are sort of circling, circling, not closing the ranks um and

really just clinging to what's worked over time. And there's a lot of PM say to me, you're not gonna get beaten up by sticking to your philosophy where you're going to get beaten up as if you underperform when you deviated from your philosophy. Lorie, how much could you see the SMP getting to that thirty two level, which is the base case for Mike Wilson over at Morgan Stanley, even with some of the constructive field that you have

in select names and select industries. So I think it's a great question, Lisa, and and I understand why that number is important. You know, when I talked to my friends in the Technical Strategy Commune it they'll often say thirty hundred or kind of the next big battle grounds. And I see that as well. From a fundamental perspective, thirty five hundred is your median recession draw down draw

down from peak. But if the market starts to think that the FETE is not going to be able to pull that off, and that we're going to price in something more challenging from an economic perspective, an average draw down was about thirty two percent from uh in a recession going back to the thirties, and that takes to that thirty two d mark. And if you go back to the pandemically, so we lost thirty fo peak to trough,

and so I think that thirty two hundred mark. If thirty five doesn't hold, I think thirty two hundred is the next natural place to go. But it's hard for me to imagine we go too much lower than that, just because in the face of the pandemic, I mean, frankly, when life was on the line and there was just a massive uncertainty ahead of investors. That's only as bad as the market fell. So I think thirty two hundred is a good place to look if thirty five dred

doesn't hold. But thirty five is proving to be a major battleground here for good reason. Glor How how hard is it to convince some of your clients to be optimistic to be constructive when there is this high likelihood of that psychological level on the index. I think that what's interesting is I talked to people about it from a positioning perspective, what is the next big thing that you need to do? And I show them my charts basically showing that defensives are at peak valuation relative to

both cyclicals and secular growth. And I tell them, you know, I've been traveling around the country pretty NonStop since June, and I tell them, you know, everyone I talked to has plenty of defense. They've cleaned up their portfolios, they own as much staples or utilities as they're ever gonna own. The next thing to do is to go on offense.

And that really resonates with a lot of people because they know from that experience over the summer, going back to the conversation with Tom about quality, when the low quality stuff started to move, that is not where they were positioned, and that's where they started to see some underperformance in their portfolio. So I think people understand that if you're a longer term investor, eventually the tide will turn. And frankly, there's just not a lot people need to

do anymore. On the defensive side. They're already there the cat you have with your Lorrie Cavasina there on the license in this market from our b say the research piece of the weekend and foreign exchange Everyhing Rovari wrote it. He is global head of Effects Analysis. City Groper thrilled he could join us after his attendance in Washington. Everym. What I noticed in Washington is little focus on central banks and maximum focus on dollar liquidity among the flushed

countries and the ones more challenged. How critical is a dollar shortage worldwide? Well, I would say the dollar was the talk of the town in in Washington, but the message that we came away with was actually a little

bit different. We did come away with thinking the FED is still the central focus, and when it comes to the dollar, there's a lot of concern, but really the sense that isn't very much that could be done about it unless the FED was going to wear off its unique focus on inflation at present, And when it comes to foreign exchange markets as much of a concern as they are right now, they seem to be operating in

a relatively orderly way. So yes, effect funding markets have started to show some signs of concern, But we're not nearly at a point where policy interventions are likely to be in I've got to go to the immediate everyone. What does what does the Bank of Japan, the Ministry of Finance do in Japan with their unique experience, What is the reality of a second interventions efficacy after a failed first intervention? Well, we expect more of the same.

So we think that second intervention is is We're going to come likely very soon, copy as early as today. And we saw the rhetoric ramp up late on Friday, and at the same time we got Governor Coroda reassert that Japan was different, that more monetary easing was required to bring inflation back up. So we see no reason

for the efficacy to change in the Japanese case. And therefore we do think that just as in the first case, dollar and come down once you see those signs of intervention, and then they will creep right back up as US rates go back up. Well ibriem, some people say it's sort of failed intervention the first time around. Their goal was simply to slow the pace of the depreciation of

the end versus the dollar. If that's the case, where is the new red line in the sand, this idea of when they will get really concerned and have to rethink the whole host of issues. Is it one fifty? Is it when sixty? Is it one eight? So I

am sympathy with with that statement. So we think there is no clearly defined redline, but if there is one, it's probably defined by the politics or when inflation starts to credibly be above about two percent and that is certainly north of one sixty on that letter criterion, and we don't think the politics will probably become acute before then,

so it's quite a long way away from here. And until then, the premiers that Kishida in New York said himself that he was dolly and moving thirty handles in the year, two handles in a day. That was raising his concern. So it was about the pace of appreciation in dollar n not at the level. So we don't see a line in the sand anywhere close to the

current land. So perhaps as the future crisis the current crisis, or perhaps it's been somewhat averted as in the United Kingdom where we're going to be hearing from Jeremyhind a couple of times throughout the day trying to stave off some of the pain that we saw over the past few weeks of holatility. How much credence do you give to this idea of foreign investors coming back to the UK at a time when the bond vigilantes, if they want,

that means a sooner and potentially deeper recession. So we think the bar for foreign investors to return to the UK en mass is very high. And at the heart of that, I would quote what we think are probably the two most relevant statistics and eight percent current account deficit, which I think reflects some of the broader challenges the UK is facing, and real interest rates that are still just about negative and certainly one to two percent below

those in the US. So I think that kind of environment the bar for foreign investors to see major appeal in the UK is incredibly high. There was something in him to talk to Rock and Roger and a boost School, the former leader of the Indian Central Bank, about the flow realities of emerging markets. Is it like the nineties

for emerging markets right now? Well, I would say there is a there's a lot of optimism, maybe a touch of complacency when it comes to the large emerging markets at present and if you take foreign exchange as an example, the appreciation of the dollar has been much more extensive against the developed markets than it's been against emerging markets. So at present we see more concerned about frontier markets

a lot less about the emerging markets. But one of one of the issues I'm concerned with is that that could change that maybe there is a bit too much complacency that the large emerging markets are in a better position on on the balance sheet side economically to some degree, even even for inflation. So we're concerned. But the base case is that maybe we have to watch some of the developed markets, like the UK bit more closely. Then there's all this macro babble, Ibraham, where's the trade I

can make money on in the queue four? I mean, forget about the I m F sixty feet stuff. Where gonna make some money in the next ninety days. So we we think it's more of the same, So that that pattern of higher global interest rates, lower equity prices, and a stronger dollar we think will continue into your end. And there are these balantee pressures that make that even

more likely. So in foreign exchange we see further dollar upsiding, and in particular the risk epeign currencies, so, for example, continue to be short the Australian dollar against the U S dollar. We think has promised into the end of

the year. Just to be clear, to elaborate a little bit on that point, is the faith in a stronger dollar from here predicated on this idea that the Federal Reserve is going to raise rates close to five percent by early next year, or is it predicated on the idea that the economic data coming in will continue to be strong and that is the reason for these rates, except really it's the resilience of the economy rather than

the rateags themselves. The two are related, but I would put more weight on on the FED and and those rateags, and that is because they do reflect to some degree the economic performans of the US. But the central driver of dollar strength has been the decline in asset prices around the world, and for that FED interest rates in US real rates are the primary driver. So both matter, But it's more about the FED right now than about us.

From Abraham, always wonderful to hear from me, Sir Abraham Rothbary that f citsy not a rare occurreds is a discussion with Leland Miller of China Beige Book to illuminate on China. He is just outstanding, the co founder and CEO of the hugely prestigious effort Leland, I gotta go to the immediate news. The great George magnus over In today says he's never seen anything, even in pestilence and conflict like a postponing of China g d P. This

is your wheelhouse. What was your response when they postponed Q three g d P. Well, look, I think the most obvious, uh, the reason is that they are very busy on the Party Congress. You know, you saw all those uh pictures of people in wrapped attention to jails and statistic bureaus just sitting there very very silently and without moving watching she speech. They probably just can't can't work because they're too busy listening. But now that I

don't think there's anything terribly nefarious behind it. You know, we we see what the data are week. They've been admitting the data week. I think this is probably making sure that there's not just another bomb dropping off in the middle of a very choreographed event. Forget about the

choreographed event. What happens in the un choreographed two thousand twenty three to the new dynastic g Well, look, it'll take a few months for for she to formally get the three positions, and so the question then we'll be, you know, where does he pivot if at all? Um, everyone wants to see a pivot on COVID zero. Uh, it's there's been no indication that that pivot's coming. You know, you could see how they would do it the rollout in three, but you know, it's a it's a it's

not just announcing COVID zero is over. It is saying, uh, you know, you know, here's the policy. Here's harder to do the roll out. Here's hard going to deal with the fallout. And and and it's not at all clear that this isn't a you know, you know, many months maybe year long transition. So is she canna pivot on economy? Probably not. Is he gonna pivot on COVID zero at

some point, yes, but it probably not soon. Weren't there some small pivots thloughly Land within this speech basically around basically having a more business friendly environment both for national and international companies. Yeah, look, I mean it's hard at

this point to see what's talking what's not. I mean, if you if you remember how sited investors got all throughout two and you know, some party official hood cut you on would come out and say, look, we're doing this differently, or we're easing this crackdown, We're gonna provide this stimulus, and nothing meaningful ever happened, so we'll have

to wait and see. I think it would behoove sheet to to have some sort of outreach, particularly with the U S. Hina attentions to you know, to the Europeans. I think you're gonna see some of that going forward. But in terms of making China more appealing to investors, you have to have regulatory certainty, you have to have some sort of idea of growth. You have to end COVID zero. You know there there's there's a lot of obstacles. It's not just saying we're gonna be We're gonna be friendly. Yeah,

the idea of growth is key here. Economist predict that Chinese growth will slow to three point three percent so this year. A lot of people say that that's probably a high ball estimate. I'm assuming that you probably think so, given that you've talked about a two handle. The official

target is five and a half percent. The gap between those would be the biggest since they started setting GDB targets in the early nine How do you think that this is going to be a problem for this government where they start to inject more stimulus and start to support the housing market versus a reality of the new

China in a new regime with a bigger middle class. Yeah, I don't think it's a problem at all for them, because I think once they descended into lockdowns in the spring, the five and a half handle was not only gone, but even the fake let's pretend that we got somewhere near five was gone. So look, they can blame this on COVID zero. Yeah, it's their fault, but they you know, there's a reason for not hitting these numbers, and and and the the larger. The larger thing is that they've

changed the priority set. So yes, they still talk about high levels of growth for some reason, although the narratives changing, particularly in the last couple of weeks. But but that is that's not what they're focused on. It's not what they're worried about. They're gonna try to deliver enough growth, so they don't have a political problem. But the reality is they're trying to do some structural changes that are very painful, and they're not going to be worried about

the high hitting the high levels of growth anymore. Leland gets you out, not to two thousand five, but just all of a sudden gets you out to a new week ran Memby strategy. What's the level of ran Memby where that unravels? Do you have in your head a seven point xx level that this becomes difficult? I don't because it's a it's a dollar story, not a not

a yuan story. Um. You know, if this word, if this were uh sort of a reman By exploding because of the weak Chinese economy while the dollars stays pad against other currencies, you have a different dynamic. People would read into it differently. Right now everything is weakening against the dollars, so right, the Chinese goal is to maintain relative stability, relative strength as much as possible against against the rest of the world, but but making sure that

things don't break on the way up. So so they want stability. There isn't a number. It all depends on how strong the dollar gets over the next you know, six to twelve months. Leyland, Thank you, sir. Always important stuff with in the mid It's great, isn't it In the middle of that, the China Facebook, It's a national

This is the Bloomberg Surveillance Podcast. Thanks are 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