Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg Surveillance Podcast. Catch us live weekdays at seven am Eastern on Apple CarPlay or Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts, or watch us live on YouTube.
This is the most important interview of the day. What you got to understand is most titles in the investment business are not like some think tank thing from senior management. They're mostly decided in a Starbucks, like a two forty Greenwich downtown. She has the greatest title of anybody and Surveillance Head of Investment Strategy in Equity Advisory Solutions. It
bny mel and that can only be Alicia Levine. I have never seen the divergence of opinions like literally, I'm not exaggerating, never What is your equity advisory solutions in this chaos?
So long and strong?
But you're right, it has been a relentlessly frustrating year. There's a lot of fear about tariffs and policy and the speed with which unusual suggestions are coming out of the White House. I'll just call it that. And yet, and yet, we just had one of the greatest earning seasons in a long time. Earnings up about sixteen percent for the fourth quarter. Okay, and the market saying, what are you all yapping about? Okay, what do you all yapping about?
Don't forget, it's a lot of y happening.
We yep.
But what it's earnings, its growth and its margins. We know this right, and it's interest rates. This is what drives market. So I love the conversation. We live for the conversation, that's what we do. But essentially we're looking at the fundamentals and we say, it's good that there's a two way market this year. I like the two way market because last year when everyone was on the same side of the boat. Oh there's no recession that you know, no hard landing, it's great, it's great as great.
Fed's gonna cut seven times this year. Yeah, there's there's there's there's room.
For error there.
And I prefer investing in an environment like this where he's back and forth.
Can you see this, folks on YouTube? You can you can address this. Alicia Levine, did you get the white blazer from Taylor Swift? Is that is that? Are you wearing the YSL white blazer today?
I got my own style, yes, Alicia.
So you talked about earnings coming in strong. It seems like this is a market that has to have earning because it doesn't seem like the Fed's going to do a lot for us this year. How confident are you that earnings can in fact come.
Through this year.
So I think earnings can come through this year. We've seen some degradation in the last week or two. I think this is management saying we're just not giving guidance right here right. I think there's just a reluctance to go all in because nobody knows what the policy is going to be, and so just leaving a little bit of wiggle room for an arbitrage on what sized tariff, ten percent, twenty five percent, which country. What we'd like to remind our clients and the market is the US
has a massive trade deficit with Europe. If there are tariffs, our trade partners suffer more than we do. It's fascinating to me that Europe's out performing the US by the way on this. And the question you have to ask yourself is how sustainable is this?
Because in the end, we slowly, slowly just.
Increase our imports from Europe and rather than having you know, a trade surplus with them. That's what the market is sussing out. And in the end, the hit to earnings on one round is not going to be that high. Now, if there's retaliation, that's a very different story. But the market's telling you that it does not believe the White House essentially on this technology.
Is technology going in the mag seven but just broader tech, whether it's chips or whatever.
Is that going to continue to be the leader in this market? Or is this market? Does is it broadening out? Does it need to broaden?
Feels more cyclical to us. Okay, so I think that I think that the mags. Look, the top ten stocks are thirty seven percent of the index. Now everybody's losing sleep over this. Oh, it's the most concentrated market ever.
You know what.
There's more concentration in Japan, there's more concentration in Germany.
Okay, So concentration of the.
Top ten is nothing unusual, nor is it fatal. I do think that there's just a breather here and some of the market, some of the multiple has to just sit and have.
The earnings grow into it. Because the earnings are still very good Alicia Levine.
With being y wealth with us. We welcome here in your community. Crossination on YouTube, Subscribe to Bloomberg Podcast. Alicia Levine has prodigious math skills, which she likes to hide, but the fact is she's got massively outstanding chops. So let's go there right now. When you look at the four cross moments, forget about the fancy stuff like kurtosis
and arrests. Just look at the variance that creates an intelligent sharp ratio where you're getting a risk reward payoff twelve months out thirty six months out to diminish variants. Do I want to be less diversified more diversified? Do I want to do factor or sector analysis? Or is it every individual stock for itself?
So I think this is a great year for individual stocks, thank you, rather than the index. That is a healthy market, right, so that makes for an interesting market. That's the two way conversation. I think that's where you want to be here, But that doesn't.
Mean you well look ahead, continue please, But.
That doesn't mean you just discard overall diversification.
Diversification is the.
Important of smoothing out of returns, and we've had clients that said to us last year, why am I even in overseas markets? Why should I bother with like you know x US developed and said, well, you have to because the valuation is so.
Extreme that there is going to be there will be a.
Day where there's some resolution of this, and you want to be in the market, and let me do it is to be in it, and Paul.
What's important here is Katie Greidfeld's wonderful story on Vanguard and the index funds. Did you see those numbers? I mean everybody's going away from Alicia Levine, so there is two it. I mean they're all index index, index index, Alicia.
How about some sectors if I want to go find some value in the US market outside of technology?
What screens wall for you guys these days?
So we love industrials, We love financials here. I mean financials are a really interesting story.
Buying Jpmork and Goldman Sachs, that kind of thing.
Am right?
Well, I can't talk about specific names if we like overall, I think that the capital providers, the alternative capital providers, they're taking a pause here. There's a reason they after the election, because you're going to see more activity, friendlier face at the FTC. This is all good for financials. Listen, if you lessen the regulatory burden, that sector becomes less of a utility and more of a growth sector again, and then the multiple changes and in the end it's
not just the earnings moving higher. Because of it, you get a better multiple, and we think that's sustainable.
Here MAG seven.
MAG seven is going to be well, it's been the LAG seven yea for.
A cup of coffee. It's been the lag seven.
For a cup of coffee.
You look for three years, so three years.
Yeah, I think Alicia doesn't drink senka. Let's be sure that's Lily. It's like early or whatever.
Yeah, it's ULTI.
But look, the MAG seven needs to at least be in line. In other words, it can't massively underperform the market. In order to get to the place where we think the market is.
Your securities research would be in Why Wealth suggesting they will.
Underperform, not that it'll underperform. We still think you have massive earnings and massive marge. The cash flow and cash flow, wello, I sat here many times talking about the cash flow margin.
So the question is, does all.
The spending on AI crush that cash flow margin?
It does on the margin.
The market lives in a second derivative, It lives on the rate of change, so to that you could get some just sort of flattening out of performance. But that doesn't mean it's over, and it doesn't mean it's two thousand.
Thirty second audible. Alicia and I bust their chops about education of offspring, and that what's the tip point of one hundred thousand dollars a year tuition? When do people just say no?
They're not saying no, They're not saying guys, the market's up fifty eight percent over the last two years. Real estate's up forty five percent in the last four years.
No one's saying no.
Alicia Levine, thank you so much, Absolutely brilliant. Thank you.
You're listening to the Bloomberg Surveillance Podcast. Catch us Live weekday afternoons from seven to ten amis the Listen on Apple, Karplay and Android Otto with the Bloomberg Business app, or watch us Live on YouTube.
We've spent a couple of weeks trying to get him in here. He's with Hart Tree Partners. Edward Morris's absolutely definitive on hydrocarbon. Think of Daniel Jurgen's surprise. Ed Morris shows up about page twenty three in the prize from a few years ago definitive at City Group and of course now with Hart Tree Partners. When was the first time you were in riod.
It was in the late nineteen seventies.
With Faisal, with King Faisel.
Yes, but I didn't see him at that point in time.
What is the sharp okay, fine, but what is the strongest difference now between the Royalty of Riod Is They look out at this Maelstrom versus our stereotype of Saudi Arabia.
So the sadiast have come a long way. They're looking at how to keep it public happy. They they are trying to diversify their economy as quickly as they can, and it's looking to the future rather than building on the present for the past.
What is their relationship with Russia? This idea of Opec plus is it a what's a distinction of that relationship?
The relationship is kind of critical. Think about where the Saudis are, where Opek is. The Saudis have a production capacity today between eleven and twelve million barrels a day. That's what they had in nineteen eighty nineteen eighty was a long time ago. OPEC's production capacity then was around thirty two to thirty three million barrels a day. Today it's thirty five thirty six million barrels a day. The oil market was then sixty million barrels a day and
today it's one hundred million a day. So they discovered that they could not on their own balance the market, they could not put a floor under prices, and they needed to expand, and they had the opportunity to do so in the middle of the last decade when we had volatility across the planet, and a lot of that volatility was a result of the two fastest growing oil producing countries in the world, Russia and the United States.
They were looking in the middle of the last decade, actually around twenty thirteen, just at the time before Russia had his first invasion of Ukraine, and they saw that the production growth was a million barrels a day in both countries if you look back a couple of years, and they decided to bring prices down. They thought if they could bring prices down to around seventy dollars a barrel, they would lose They would see the world lose two million barrels a day of oil and it didn't happen.
Paul, I want to mention this. Everyone was looking for one hundred and it was a lone voice at City Group, a big grizzled Edward Morris, you know, a bit older, saying well, maybe not he nailed the move to seventy.
So ed how do you think about Russia as a global supplier these days, because it seems like just in the last few days things are changing. When you think about the Trump administration how they're viewing Russia.
Do you expect.
Russia to be a bigger global supplier. I'm not sure where that oil went.
You know, it all depends on when you're talking about what your horizon is and what could possibly happen. And you have to remember that it wasn't that long ago. It was twenty nineteen when Putin visited Russia, visited Saddi Raby right after the attack on the app Cake facility and said, listen, we're going to be cooperating with you through your Ramco IPO, and then we're going to be
out on our own and section. The CEO of Roznev said right after that IPO, we're out on our own we are going to be growing oil production at home and abroad. They have right now the Vastok field in northern Siberia, and that field can produce its scheduled to produce two million incremental barrels a day. They are wash in oil and they need to do something about it.
So President Trump says, drill, baby, drill, and we don't waste time on that. But what we can state with Edward Morse is oil a weapon for the United States in our geopolitics.
Oil is certainly an important part of the foreign policy in the country. It cannot be weaponized other than the degree to which you can put sanctions on a country. I don't know what weaponizing it means. I don't know what we're going to pursue. Energy dominance means. I know what it means as a soft, powerful instrument of policy. And let me give you an example. We have become the largest exporter of energy in the world, the largest
exporter of LNG. That LNG export growth enabled the United States to replace every drop of Russian energy, but particularly natural gas, going into Europe, and it did so at a time when it was able to globalize a gas market that had not been globalized. We have made oil because we don't allow destination restrictions. We've enabled natural gas to be global and the price of it is based at Henry Hubb in the United States. That's kind of soft diplomacy. We have an ability to expand l G globally,
but it's a soft ability. We have an ability to say multilateral lending institutions ought to be pushing natural gas. They ought to be backstopping regasification. It's cleaner than coal, it's helpful to the global economy. But that's soft diplomacy. It's not using it as a weapon.
So talk to us about the demand side of the equation. I know, when you think about some of these commodities, like global oil, you really have to have a call on demand.
What do you think demand?
Is brilliant question, But even more brilliant do you drive an EV?
I got to tell you I did drive an EV until we moved back to New York full time, and then I discovered that it was too expensive to have a car to deal with Actually, the rush on garages right at the edge of the zone from where New York one to go south there.
Coming up on the congestion text, Paul, continue with.
Your demand view here of the next year or two.
So as we know, there's been a difference of demand views between people in this country, between OPEK and the ia OPEK and the IAU. Demand is kind of very simple if you look at it. Historically, we've had a regular drop in the oil intensity of GDP around the world, starting at the really end of the post World War Two growth of road transport in reconstructed Europe, reconstructed Japan, and in the unterstate highway system in the US, We've had a year after year a drop in the percentage
of demand growth per unit of GDP growth. Now, that doesn't mean that oil demand comes to an end. It means it slows down, okay. And to give you an example, if we go back to nineteen seventy seventy one, for every one percent increase in the world in global oil demand and GDP, there was a one point one point two percent increase in oil demand. Today's about zero point
three to one. So if we have three percent global GDP growth, we have a million barrels a day on a one percent based on one hundred million barrel a day market of oil demand. And that's continuing to slide. So think of it as we're not going to have much more than million barrels a day of demand growth.
We're going to thrilled that with us today. Edward Morris, of course you know I'm from City Group at harttreet Partners. Now definitive and geopolitics of oil and also of course pricing of will do you have at heart treat? Are you allowed to have a Brent guess? Do you have an oil barrel guess? Or is it a folk spot?
No, No, it's not a problem. We live in the most volatile market the world has seen, based on things that are out of our control. We don't know what's going to happen here and there. It's a relatively evenly balanced market. But for the fact that Opek, going back to your first question, okay plus has taken so much oil out of the market that it now amounts to eight million barrels a day. That's a lot of shut
in production capacity that can come on. And if we look at the volatility today, we have prices going up in part because of the drone attacks on the CPC pipeline coming out of the CASPI and bringing Russian and Kazakh oil into the Mediterranean. We have an announcement from Kurdistan from Baghdad that the pipeline from Kurdistan threw Turkey into the medical training is going to be revived next week. That's we've lost maybe three hundred thousand barrels a day
out of the CPC pipeline. We'll get perhaps three hundred thousand barrels a day out of Iraq unexpected by next week. So given that volatility, we think oil is in the range. The range is sixty eight to seventy eight.
I assume it's ghosh, that's French ghoshe of you to do by hold sell right now. I don't want to buyhold, sell and big oil. But how do you position big oil when I see Chevron announcing massive layoffs, massive restructure and you know it's weak double digit return over thirty years. Is big oil prosperous? Is it thriving? Is it the stereotype of our ute?
Well, as we know, some big oil is prospering and some big oil is not prospering. Maybe for some investments that they were making in the past, in the recent past, in the drive to go heavily into renewables and into things that weren't providing the same level return. But look at the production growth of Chevron, the production growth of Exxon on a global platform based in part of the
United States. They're increasing their output. They're increasing their output of oil and gas in a world in which they're very competitive.
Talk to us.
I'm watching the television show Landman at the life in the oil patch in West Texas. So I now consider myself an expert on global oil and gas. Here talk to us about the US. We're now a net exporter of energy. What is our role in the global energy market? Visavsay, maybe like an OPEC plus or something.
We have transformed the energy market to the world, including the oil market. If you go back to twenty ten, we were a gross importer and a net importer, and our production base if you add NGLs and other liquids, was around eight million barrels a day. The last month for which we have data, our production of liquids was twenty three million barrels a day. We have moved from being the largest gross and net import of the world to being the largest gross exporter. We export sixteen to
seventeen million barrels a day of liquids nobody. That's more than the combined exports of Russia and Saudi Arabia. Our production is more than the total production of Russia and Saudi Arabia combined. And we've become a net exporter on the order of magnitude of four million barrels a day. So that has made the basic difference in the global market is a wild difference. Is what gives the US leverage.
I'd love to get you back in here in a six months three month basis, doctor Morris. Let me ask you one final question, and it's sort of from sixty thousand feet in philosophical how bad did Anglo miracle screw up? I mean, within the arch of Edward Morris's tenure owning the high ground on this how bad did German leadership screw up? From abnaw or forward.
So my personal experience in it is dealing with the effort by Germany to become dependent on Russian gas. So I was in the State Department at the time.
That the serving both Carter and Reagion.
And the US and France were the only NATO countries that said, hey, you've got to look at you Germany have to look at dependence. Yes, you can import gas, but think about what it will do to your foreign policy.
Think about what leverage you've lost in terms of that dependency, your inability to say no. And we saw that over time, and I think Germany has really learned that lesson in terms of being very reluctant as they go through this election process of this coming Sunday, almost all of the parties are reluctant to do more than say, we might consider importing oil on a spot basis, but not on the full contract based thirty seconds.
Does Tesla have a future?
I think evs have a future. I'm not going to pick one versus another. But they're fun cars to drive, They're cleaner than other cars to drive, and they're getting more and more mild. So if I were to buy a car again, I would certainly not hesitate to buy it.
Now. There we are the purson we need. Edward Morris, thank you so much. Thank you for joining Bloomberg and Bloomberg Surveillance today, doctor Morris. Of course they are in the tumult, the maelstrom that is oil today.
This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at seven am Eastern on Apple Corplay and Android Auto with the Bloomberg Business app. You can also listen live on Amazon Alexa from our flagship New York station. Just say Alexa, play Bloomberg eleven thirty Postnion time Ken.
What we're going to do is talk to Mike Mayo here with Willis Fargo. Mike Mayo is absolutely legendary in banking. He's one of the few people that Congress called upon in the Great Financial Crisis to say what in God's name is going on? And it has finally paid off his optimism on large cap banks in Europe and of course here in America, I have a charted city group with a ten for one reverse split cratering from you know, down and when and then it just forever and finally
a legitimate leg up. Let's start with that, Mike Mayol. Why is banking finally getting a leg up?
Well, the times they are a change in and you're seeing historic inflection in terms of the revenues, the earnings, and especially fifteen years of regulation going from a headwind
to a tailwind. Now I'm not talking about going back to two thousand and six, two thousand and seven, before the Global Financial crisis, I'm talking about preserving the safety and soundness of the banks and eliminating a lot of red tape, and that can help banks operate a lot of higher profit margin to help their stock rate.
Is it operational excellence or is it the g the curve?
You know, it's really more just operational streamlining because regulation has gotten so complex. Pull back that complexity and banks can perform better. But yes, you've had fifteen years of financial repression. Zero interest rates were disturbing to bank's profitability. Now you're going back, just back to normal.
So talk to us about how you think the regulatory framework may change and what it can do to returns on equities for example, Well.
I think the regulatory framework was vastly improved after the Global financial crisis. Banks doubled capital, they doubled their liquidity, They de risked for their consumer customers. Remember all those subprime loans. They de risk their commercial customers. If anything, banks have been marginalized to the benefit of the non bank So a lot of the more risky stuff has gone outside the bank industry. So I would say, great job. Regular from the year you know, twenty ten through it's
called twenty fifteen. But the last decade, you had complexity pile on top of complexity, the living will the FED stress test. JP Morgan submits eighty thousand pages for each and you know, I talked to the ex vice chairman of the FDIC has said he didn't understand it when he reviewed it, and nor did a lot of the banks. So it's a lot of wasted money. So I think you can save a lot of money on expenses at the banks, at the regulatory agencies, and I think some
of that gets passed on to the customers. And also banks deserve to have a level playing field when it comes to how much capital they have, so compute those capital ratios the same way you do for everybody else, and the numbers go up by quite a bit. So this could improve banking returns by two hundred basis points over a few years. That's significant, and that can propel a bank stock rally over a few years.
So are there certain banks that are better positioned in this type of environment or is this a blanket call on us financials?
Well, a rising tide does lift all ships. JP Morgan remains best in class globile bank. But my favorite, number one, number two, and number three favorite is City Group. I was on your show not to you know last year, and it's moved, it's starting to move, but it's still that my dominant number one pick. It's a new era for banking, but it's also a new era for City Group.
I've got a chart normalize. We're going to talk about this, folks with Mike Mayo, you or well as Fargo as we go into the next half. For I got a chart normalized. Back with the day Lehman collapse. I think I maybe talked to you that day. I can't remember. I got a JP Morgan moonshot. When you say banks are going to do well, are they catching up with JP Morgan or is it all boats rising even for JP.
Morgan, I'd say both. I think the lesser bank will narrow the gap with JP Morgan for sure, But at the same time, JP Morgan should continue to matter. What a bank generating over twenty percent returns on fifteen percent capital with some best in class efficiency.
Mike Mayo with this, So I got JP Morgan, you know clearly way ahead. Three hundred and seventeen thousand employees is the working number we've got in the DS screen. You know, there's all this you know the stuff Shinelli bask talks about all this OMG, who's going to take over for Jamie? Does that germane to you is like, is that part of your analysis of JP Morgan or do you just ignore the people moving around and just look at the financials and the execution?
Well, I think Jamie Diamond. I asked him this question the last earnings cost, said Jamie, who's your successor? And he didn't give much of an answer.
And he's still doing that for ten years.
Well, then I finally said, so are you going to be around for a few more years? He said yes, So I think when you have this many moving parts, Jamie's not going anywhere in the immediate term. Having said that, there's a deep bench at JP Morgan. It could be a number of three or four different people. Marion Lake certainly is the name that comes to the four investors knowers. She telled a lot of positions. But if Jamie stays on for several years, it's you know, we'll see what happens.
I'll say this, Yeah, I'm not a couple of years ago I downgraded JP Morgan when they were spending all kinds of money without telling us why they were spending and everything else. Then I upgraded it made it my number one pick after the failures from a couple of years ago. But not one investor that I've spoken with, and I've traveled a lot the last month, last two months, not one investor that I've spoken with wants Jamie Diamond
to leave. So people want Jamie Diamond to stay right now, and so I think he should get that message and stay. And he'd been Look, he'd been playing for this moment. I caught reregulation, not deregulation, reregulation making, you know, more common sense regulation. And he's gonna benefit. JP Morgan's gonna benefit. Why leave now? He's been waiting to go to the ballgame your whole professional career. You're finally getting there. You're not going to leave before the first time.
City.
I'm a former employee there at City, and when I worked there, I felt like there's not a piece of business we couldn't win.
What happened to City and why is it now your number one pick?
Well, look what's compared to the time you work there. There was a dramatic shift last year that's underappreciated by almost everybody. They went from five decades of this global matrix management structure that nobody understood. And now they have five lines of business. They have payments, banking, markets, wealth, and consumer. When they have a CEO in charge of each, they have return targets for each, they have accountability for
each one of those five lines of business. That's what you're playing for for the next five to ten years. But at the same time they're at that flection point of the J curb. Invest money, your profits go down. They're turning up on the other side of that J curb where those investments start to pay off and they start spending less. So you're going to see twice or maybe three times better efficiency improvement at City Group and
return improvement at City Group than the other banks. And by the way, they're passing this magical line where they have single digit returns to double digit returns. When you do that, you go from value destruction to value creation. That is the number one biggest driver of bank stock performance. It's the number one big bank stock performer so far this year. I think it'll be the top performer by the end of the year.
Michael Mayo was there in City Group and we'll continue. He is, of course large cap Bank research at Wells Fargo. Fairly to say, legendary and also very cut and chiseled. Yep, you know he's like you know, he said to me, Tom, you got to hit the weights again. Hit the gym. Time, come on, you know he's like time getting the gym. Thank you, Mike Maya.
On your City group pick. I'm fascinating by this now it's all coming back to me. I walked out the out of the door of City after a few years, sold all my stock.
Literally on the day I walked out the door. Very cool in January of two two thousand.
Jane Fraser, she's I think she's got a pretty good message for the street. How is she different from other CEOs at City who have also promised change and to clean things up in the streamline things.
Oh boy, you're you're triggering me right now, I think of the other CEOs. If he goes back, Tom Kane probably remembers Walter Wriston, right, countries don't go pro Father.
Knew him personally. They used to talk farms in all he worshiped Walter Riston and then it ended.
Yeah lending, let's lend. You know, Latin American countries will pay us back they did in nineteen eighty seven. You had big charges, and then you had John Reid back in the early nineties. He had the Saudi Prince had to pump it up with capital, and then you had the whole Sandy Wow era A one later. And then you had long term capital with the problems, and I called that Noah's Ark because they brought two of everybody
along with the mergers with Travelers. And then you had Vicram Pandit, which first you had Chuck Prince, the lawyer, and that remember He's gonna keep dancing till the music stops, and that that ended very music stop, and then the music stopped, and basically they effectively failed and the government bailed them out. And then you have Victim Pandit, which
was kind of there. And then you had this guy Mike Corbett, who didn't change the strategy at all, and through it all, I'd say city was very arrogant, very arrogant. Jane Fraser gets there and says, you know what, we have a lot of problems. We have a lot of things to fix. The first step is to recognize that you have a problem. And it's taken a little bit longer than some people would have liked. I understand that, and the expenses are a lot higher than they should
have been. But recognizing a problem. Then last year everyone said City's going to mess up. Three concurrent initiatives. One is this org simplification. They went from the five decades of matrix structure, five lines of business. They eliminated five management layers. They told all the employees you're gonna have to manage more people's It was gut wrenching, and they
fired some people and that's always tough. And then you have they're divesting, you know, over a dozen consumer operations and a dozen countries outside the US, and then they have this transformation in the back office. They're doing this all at once, and everybody says city is going to implode. Well, guess what last year City medics efficiency targets. They beat, their revenue targets they met. And so going through those major changes, so people say, what's the proof, what's the evidence?
Look at the results of last year, and they're guidance three years in a row. They're now guiding if you believe them, revenue is going higher and expenses going lower. So you're at that huge inflection point now. So they're recognizing and they have a problem. They don't have that same degree of arrogance. They have the ability, they have the capability. They're in one hundred countries. So if you're a global, multi national corporation you want to do payments
or global investment banking, you got it. They're top three in credit cards, they have their franchise, a new strategy, and Jane Frasier as the ultimate architect of where city groups should be in the next decade.
You are more qualified on this than anybody I know on the sales side. The great group of sales side analysts that are out there. Jamie Diamond this weekend was a Talk of the weekend with some tape that was, you know, out of JP Morgan and that Mike Mayo on Work from Home.
I loved the Jamie Diamond video and the audio that got leaped out to the press, and that's vintage Jamie Diamond.
It is.
I agree with that.
He just said he's going to say what he thinks, and he says, if you don't like it, don't work at JP Morgan. We want you to work at JP Morgan, but if you you need to work in the office so you can mentor people and everything else. And for JP Morgan and Jamie Diamond that works and that's their strategy.
Correct when you stop. When you were at Credit Sweee, you had mentors as you built your career. You went from you know, the day you got candidate Credit Sweez. I think I spoke to you that day or the day after whatever. The answer is, you need mentors. Mike Mayo on Work from Home, talk to the kids right now.
But I'd also say it's not one size fits all either. Okay. So there's different departments a different banks.
Different departments, but come on.
Different departments, different banks. I will say though Jamie Diamond and JP Morgan, it's worked for them. They came back early during the pandemic Goldman Sachs. That was actually my first meeting at Goldman Sachs. I wasn't going to go in and my wife's a doctor, as you know, and she says, no, you're going in to meet with them in person, okay. And and I went to Goldman Sachs and I'm telling you, they have this middle area where you have to transfer to the upper floors, and it
was almost packed. And this was at a time no one was going back to work. So the J P. Morgan and Goldman Sachs, they had all their all, they had so many employees back early and look at the most successful. But it's not one size fits all. So if if City Group decides they're going to allow some people to work remotely, that might be a competitive advantage in hiring certain people. Some saying get it. Well, just sometimes you can get great people if you make some accommodation.
So Jamie Diamond is not of that.
You know, we got Lisa Mateo. I mean that's the way it was.
Actually, Okay, might talk to us about Bank of America again, former employees, thank you through Merrill Lynch, I've worked.
Pretty much every work talked to us. Are the Bank of America story? Sometimes I g's lost.
A little bit between the Jamie Diamond talk and maybe the turnaround at City.
What's what's the story at Bank of America.
Look, we have three words that sum up the largest banks. That is Goliath is winning. Okay, okay, scale is making more difference in banking than ever before in the history.
Why don't you tell the European regulators that, I mean, because we've they've.
Lost, they've lost, absolutely lost. The five biggest US capitol market players Bank America, JP Morgan, Golden Morgan, stan Goldman, Morgan Stanley, UH and uh and uh babaye. They've gained market sharing capital markets since the global financial crisis, you know, in spades, and I think they can continue to do so. And you were like talk about twice or three or JP Morgan four times larger than the European bank peers.
And by the way, this whole idea that US banks should not merge, that's like the Brian moynihan or Jamie Diamond Protection Act. Why do you want to protect them? You should have more large banks pn C. Bill Demchek talks about wanting to have another trillion dollar bank. He'd like to be that, but the unintended consequence of regulations.
For the last time thirty seconds. Do you have a regional right now you would own around that Mike Mayo theory? Do you have a regional that could be mergeable with the people from Pittsburgh with their beautiful baseball park.
Look, if you want to name it own, it's city group. It's city group. It's city group. I don't want to dilute that call. Let's be a group we're waving all portfolio limits. Okay, but it's it's really City Group. And then look and JP Morgan and Bank America. Those are the three goliath they benefit.
You're not even going to look down.
And you know, look, PNC is a quality bank for the National main Street Bank. Then the thirty largest cities, they have a ten year runway bill. Dempcheck is an exceptional CEO, and they should have revenues growing far past the expenses, and they'll benefit from the rising tie of lists all ships. But again for me, it's City Group, City Group, City Group as my primary recommendation.
Thrill Devian today, thank you so much. He's with Wells Fargo. Folks.
This is the Bloomberg Surveillance Podcast. Listen live each weekday starting at seven am Eastern on applecar Play and Android Auto with the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg Terminal.
The daily look at the front pages, the Lisa Mateo moment, Lisa, what do you have to all?
Right, Well, we know prisident Trump has been warning of steep tarrifs on European goods. So the water journalize this interesting article because they're saying it's going to be a blow to Bernard our Nose LVMH Empire. So they go into the connection between the two because they say he's trying to kind of work those ties avoid the tyrists they do back when they were up and coming property developers in Manhattan.
The families know each other.
You have his second oldest, our No's second oldest son is friends with Jared Kushner. You have Ivanka friends with our No's daughter. Ourn is at the friends because they.
Want a bag goes. I'll take that one.
Not too bad.
Rich Gal has Bernard Arnold number five ninety six billion.
That's good for him. They got some real challenges right now, though, I mean I believe.
They do because China sales fell, Yeah.
China, and there's some other issues as well. And the real anx here, which I read in Lemonde in France, is they've basically businesses had it in France with the taxes and the real relationship here is our Nose bait to put manufact in Texas. No, and you know, I don't know what products, you know, not Tiffany jewelry, but something. It's the manufacturing. And I mean I mean, do you want to buy a Lewis Futon bag. This is made in Texas. On it does that? Take the charm away?
Take it away?
It does? It does.
Okay, we'll sit with kind of luxury. The Neiman Marcus century old flagship store in Dallas. You mentioned Texas, it's going to shut down. The owner of SAX Fifth Avenue made the announcement.
Okay.
So what stands out is because it comes after they just announced that they were acquiring Nemen. This big merger happened December. The store apparently going to close March thirty. First, it was in this memo from SAX Global. It was seen by the Post. So they received the notice in the landlord to terminate their occumency. It doesn't have to
do with acquisition, the source is saying. It's saying it has to do with kind of a tiff with one of the buildings, multiple landlords over a certain piece of property. The corporate you know, offices above will stay there, but the store will close.
Booming, booming, Mark Well, Texas is booming overall.
There's good morning to all of Chestnut Hill in Boston and the Smith family at General Cinema. And that was the Glory years, needless markup and what you know Richard Smith Rather and his kids did there. They really husband the image forward. And I don't know how many owners it's been through since General Cinema had them. But the answer is it's a whole world. I don't get department stores, ju Lisa, do you spend a lot of time?
I don't know.
Costco is not a department store, right.
No, definitely not.
Okay, they've limited selections, which I like. Okay, So not sure if any of you have either had overhead been experiences that are just gone wrong on an airplane before. So apparently there's this battle for the carry on space.
I've seen it.
You know, people shove their bags and they're trying to fit it. You have the other people who kind of toss it in, you know, first class or Economy plus before they hit the back.
They kind of do that too.
It's delaying the process. So people complaining. So the Wall Street Journal came out with the proper etiquette and what the rules are and what you're supposed to do. So you're supposed to put the larger carry on in the overhead been the smaller item under your seat. Because a lot of people take the smaller items.
You're one of them.
Yep, you put the smaller rag in the overhead bin. That's what you do.
Yeah, well I've got now what I've noticed, Even on a seven thirty seven, all the overhead bins have been refurbished so that they're much bigger, so your big roll on thing doesn't lie flat, it lies on its side, and you can get more of them in there.
So they've actually, i think.
Improved the whole overhead thing because they know how it's checking bags, because that's a disase.
I don't know where the airlines are and the whole thing solvable in one day. That's the thing I don't get. It's like we all have problems, like the red Sox Middle relief is a problem. Baggage on airplanes is not a problem. Lisa Mattel with the newspapers, Thank you so much.
This is the Bloomberg Surveillance podcast, available on Apples, Spotify, and anywhere else you get your podcasts. Listen live each weekday seven to ten am Eastern on Bloomberg dot Com, the iHeartRadio app, tune In, and the Bloomberg Business app. You can also watch us live every weekday on YouTube and always on the Bloomberg terminal