Feeling ‘22

It's Luke Kawa, my former deskmate, and he's currently a strategist at U b S. Luke, welcome back to the show. Great to be here, Thanks for having me, folks. So I said that Luke is well versed in FED stuff, he just so happens to also be supremely well versed in all of Taylor Swift's versis and Mike, I don't know about you, but Luke and I are feeling two, which is why I wanted to invite him on the show. And I want to ask you if you have any

idea what I'm referencing. You know, Vilna, I know you think you can burn me with the Taylor Swift references. It just makes me feel happy, free, confused, and lonely at the same time. I remind you I'm I'm the father of three daughters, and although I'm more of a Halsey guy and I actually prefer Scooters versions better. I don't think you can burn me as much on Taylor Swift as as you think you can. But let's see, you shouldn't say that in front of in front of Luke.

So I actually have Luke's already left the show. Yeah, Luke, he's gone. Next next, next thing. You're going to tell me you're a big Jake Jillenhall fans. Yeah, don't, don't. Don't say anything else. I actually have a quiz for you. Let's test your test your knowledge. I'm going to read you some Taylor Swift song titles. All of them are going to be applicable to markets, and I want you to guess which one is not a Tylor Swift song,

which one is not a Taylor Swift song. Okay, alright, you know the titles of the song I'm less familiar with. If you could sing the verses and the quirs, maybe maybe Luke will do that first. But here we go. Okay, red yep, that's a Teller Shoft song. Gold Rush that shake it off? Okay, keep going, break even and treacherous. I'm gonna say gold Rush is not a Taylor Swift song. Luke, thank you, very very very wrong. Even break even is the right answer, all right? I was I was, Chris.

I thought you were throwing in a Neil Young song there to confuse me in honor of Luke's Canadian nous. You're gonna hit me with some some Neil Young. I'll give you a six. I would say, you still fail, but you get a six. All right. Well, you know, my my youngest daughter's biggest pastime is eave dropping on the podcast to look for things to burn me about. And obviously that that's not the first time I've made

the scooters version joke. And she said, Dad, last time I was gonna burst in there and cancel you myself personally over that. I don't think it's it's not cancellable maybe, but anyway, yeah, I think this will be the last time you mentioned it. All right, Luke. Well, let's get Luke. Let's get Luke to talk about the real stuff here and and look if you can squeeze in some Taylor Swift references, then I will be doubly impressed. But let's start with what Fildonna was talking about that FED meeting

this week. Uh, And I know, look, you had a tweet that I appreciated where You're like, if you had given me the FED statement basically in the the Economic Outlook statement, the s EP, you would not have guessed the the market reaction. I was kind of in the same boat. It's sort of it surprised me because when I look at the dot plot um and our colleague Cameron Christ has written a lot about this, the notion that well, if we get more hikes sooner, you know,

we'll get less later um in the cycle. So that that kind of seems to be the narrative people latched onto when when the stock market rallied, you know, we're gonna get three hikes next year, three hikes in three and just two hikes in But I don't know. Look, when I look at the dot plot, I have modest to moderate confidence to use some FED speak in sort of the near term dots, you know, dots, dots. I've very less confidence in that that's what we're actually going

to see in. I'm like, I I don't even bother with that. I think it's way too far in advance. So walk us through. I mean, is that the safe narrative? You think that the market viewed it as dovish at least temporarily because the notion that you know, the terminal rate will be you know, it won't be a three hike a year type of situation, that the terminal rate is kind of where everyone expected it. And how do you view those dots? Are you in sort of on

board with me? Where the the further out your dots? I I, you know, I don't. I don't put a lot of confidence in them. Yeah, I mean I put

it this way. I think what you're describing is precisely where the markets at if you look at you know, if you do your dots, go on Bloomberg and look at you know, the Fed funds futures are overnight index swaps, and how those correspond to the median dot, they're they're pretty much there, and then the basis just goes wider and wider as you go to the to the out years.

So I think your description there, you know, really really does fit in terms of thinking, you know, and how markets reacted, and you know, the digestion phase are going on afterwards, I think, you know, focusing on the three and two and then thinking, okay, now, now what way

is the risk you really? Because for at least since the you know, let's call it June f O m C, when the Fed first kind of introduced this idea that they were kind a more more worried, more sensitive to these really high realized inflation now comes we were getting. It's been a story of the Fed catching up to the markets, catching up to the markets on the need for some kind of short term, near term right sizing

of policy. But now we're in a place where, okay, what has to happen for the Fed to hike more than three times next year? Okay, So that means that would mean something like taper ends in March and there's no pause and immediate hike and going once a quarter, or it means you're going in excess of twenty five basis points per quarter. That's that's getting to be a

you know, a rather high bar to clear. So now we're we're finally out of place where the risk you for the Fed is a lot more balanced in terms

of going forward from here. So I think that's something that it provides a bit of comfort for markets, and and also just the idea that if you're looking at the the out year forecast, not that the market necessarily thinks the Fed will realize what they've penciled in for two and four or rather, but if you if you look across that and marry them with the PC forecast, you're looking at negative or zero real rates as as far as the I can see for for the policy rate.

That's not a bad backdrop for risk assets with you know, above trend growth and negative or zero policy rates. And before we even get to that, let's talk about the taper. I mean to me, if all of a sudden you remove thirty billion dollars a month in bid from treasury and mortgage markets, that seems living dangerous to me in

those first few months. I mean, um, listeners will know I tend to worry more than I probably should about stuff like that, but that that seems to me like a set up for some volatility in the bond market, that that maybe could could be contagient to other markets

and and have a sort of an ugly first quarter there. Um, how are you thinking about that, and you know, is it possible that you know, the Fed sort of you know, changes its mind on how much it's tapering if it does, see uh see a little bit of a freak out unlike and it's it's clear that, you know, balance sheet policy is not on autopilot this time around. The Fed is being a little more nimble in terms of how

it's making adjustments there. But what happened on the tape here the doubling of the pace that was kind of bang in line with with the consensus estimate. So don't expect, you know, that to move markets too much. And just the idea that we should be looking primarily at asset purchases as you know, affecting prices through this you know,

supply demand imbalance and you know, portfolio rebalancing channel. I I think the evidence for that is point week compared to the rate signaling channel, and it's you know, for as long as a central bank is buying bonds, you know, it's not going to be hiking rates. That's where the kind of the main signal and the main accommodative impulse

comes in through asset purchases. And I think it was one of the lessons from the taper tantrum back in what happened when the when in you know, May, when Bernankee started hinting at possible reduction in the pace of asset purchases, the front end got pulled forward a heck of a lot. It was traders just pulling forward expectations for one liftoff would happen based on that. So I think that that was a good test case showing us that, uh,

that's the main channel through which QI is working. And when the tapering paste got doubled at one point on on Wednesday March, got prices ast, so again it's that's that's the main channel that you know, I see it mainly working through rather than rather than any kind of supply demand channel. That was the heyday of scooters versions. Oh no, oh my gosh, I thought we were done

with scooter. That was the good old days. Oh my gosh. Anyway, Luke, speaking of signals from the bond market, I know you said in a note recently that sticky high inflation and the removal of monetary accommodation should lead to higher bond yields over time. So that's not something that we've really seen recently, and I know Paul was asked about this

at the press conference this week as well. So can you maybe layout for us you reasoning for why it hasn't happened, and then second, what might actually start leading to us actually seeing higher bond yields. Yeah, so, I I think a lot of this is having a lot of humility looking at the bond market and thinking about

the burden of proof required to get yields higher. It's one thing to get yields higher when the ten years at you know, at fifty basis points and we're we're all locked down and in the middle of a crisis, it's a it's another thing to expect that above trend economic growth can continue. So I think Powell hit on

some some good or interesting reasons. And the crux of the point that all interpret him is trying to make in talking about the long end is that you really shouldn't extract extrapolated as kind of the pure fed expectations over ten years. That there are non economic factors that

affect the that affect the long end. And you know, for for instance, if you talk to you know, any big bond manager, they'll they'll talk about kind of liability driven invest Smith demand, you'll you'll hear more about the the massive yield pickup available for for foreign investors just buying hedge US treasuries, things of that nature. So I think that's one reason to suspect that the long end might not go up as might as much as you might think, given the strength of the economic recovery and

the potential outlook for for Fed policy rate ranks. But but I also think that a lot of this is you know, the market saying, okay, like this, it's you know, it's a good debut album. It's a good you know, self titled Taylor Swift. But is there is there a fearless coming? What's what's the sophomore album going to be? Because the story of last cycle was essentially all of the risk, and all the shocks that end up manifesting

were largely to the downside. With the exception i'd say of you know, the post election, when we got excited for the potential for fiscal stimulus under than then President Trump. It was European debt crisis after debt crisis, it was SMP rating downgrade it as you know, even brief fears

of the US double depercession, China hard landing. So all of that then conditions I believe traders to think that any periods of above trend growth are going to be very fleeting, and that the rate hikes that the Fed is kind of teeing up next year to quell inflation and a certain to a certain extent, uh, you know, trim demand growth at least a little bit, that that's going to have a very deliterious effect on the economic outlook.

We we couldn't disagree more. We just think the fundamentals for this expansion are so much stronger than they are compared to being at this point post global financial crisis. If you look at aggregate labor income, if you look at capex intentions, if you look at the you know, the extent to which fiscal policy is still you know, accommodative, given where we are in the in the business cycle, all of these just scream much better foundation for growth.

And that's what gives central banks the confidence right now to be pulling back on a common Asian even as you have you know the threat of the old macron variant and a lot of uncertainty about that. It's you know, it's akin to if you if you have a choice between if you've got a picture, Garrett Cole, great picture Yankees.

He's injured, he's rehabbing, suffers a bit of a set back in his rehab, so he's just about you know at se if you can choose between starting him in a game or starting me in a game, you're going to choose him. We just have that much. We have that much of a better economy right now that central banks can you know, afford to do this and still have a high degree of confidence. That's how much better

the underlying fundamentals are this time. Well thought, I'll allow a little baseball talk if he starts talking hockey though, get that you got the mute button handy right? If Luke starts going in a NHL that, uh no, because we're big Sabers fans in my household. Hockey. Although look, I gotta ask, so what what would their album tell uswift album Red b I guess that's like two thousand and eight, though you're you're not worried about about that. See yeah, no, Red is uh Red is what we

thought one like was going to be. Just you know this back to back to normal kind of polly and we're all better everything inspiring on all cylinders, didn't didn't quite get there, but red was red with what we thought one was going to be at as soon as we heard about a vaccine. At the end of all, right, why want to I want to get back to that

idea of you're very confident in this economy. I was reading your Macro quarterly for the fourth quarter you and Evan Brown and Ryan Primer put out and credit this is a few weeks old. I don't know the exact date of it, but basically, you know, the title of it is preparing for another round of kind up demand. You say, supply chain issues that are contributing to slower growth and higher inflation will get better, not worse, as

vaccinations improve public health outcomes. That all made a lot of sense at the time, and I suppose it still makes a lot of sense. But by this Ammycron is a wild card. You know, we're sitting here in the office seeing headlines go by about companies signing their employees home again. You know, it's it seems like pretty much a wild card variable again coming from me, the guy who worries about everything. But did that send you back

to the drawing board at all? This new variant UH to sort of reassess your outlook for for GDP and and pent up demand and everything going forward in the Yeah, I I say, it's definitely something that if you had a base case that was very optimistic and a bowl case on top of that, you have to say, well, actually, you know, we we gotta we gotta take out the bowl case. The you know, the base case is now

the bowl case. And what was our and what was kind of our more muddling through case, You've got to raise the probability on that more so, I I would view oh, Macron as more cutting off the right tail of growth and growth outcomes as we as we head into Remember that prior to what the day before Thanksgiving, we were poised to see a pretty material acceleration and economic activity in both the US and China, the world's too largest economies, from Q three to Q four, and

we're about to head into this new year with a full head of steam. So that's that's obviously not going to happen at all to the same degree. So you're it's I see more of this as more reducing the right tail of activity than as something that you know very much throws us to the left tail side of equation where we have to be worried about recession again.

And from a more portfolio and asset allocation standpoint, I'd say what this does is that it makes you think a little more about what assets you think are going to be you know, appropriate hedges and how so you know, for instance, we we still kind of had a good view on the U S dollar and its role as

a portfolio hedge. In the event that investors are going to have a growth scare are going to worry about the pandemic a fair bit that usually gives a U. S dollars some kind of you know, flight to safety benefit. But on the other hand, given how much near term fed pricing we've had, it also means that concerns about growth decelerations, how the potentialists suck out some of that

pricing in the US front end. So on. On the margin, this is something that would increase the attractiveness of US duration a little more as a hedge relative to the US dollar from that kind of portfolio asset allocation standpoint, So that's you know, that's something we continue to think through and try and make sure we're as effectively and

efficiently balanced in the way we're protecting ourselves from different scenarios. So, look, can you actually talk about some of the areas of the stock market that you guys do like, Because I was reading your note it says you like risk assets, most leverage, typical strength. So you mentioned small caps as well as financials and energy regions such as Japan and Europe. So can you talk about what's behind that. I was actually struck by the energy call and what's behind that

as well? Yeah, so, and I would say that if we're talking about, you know, sectors versus regions, and whereas they're they're more conviction, there's there's more conviction the in the sector calls than the than the regional calls. But still, you know it broadly the story is is similar across all and that these are relatively relatively cheap areas of

the market. We think the kind of the the macro catalyst validate being being more involved in them and having some of the better or close to as good earnings growth. As you know, a lot of the tech heavyweights that about earned for a generation now have that some of

that valuation gap be remedied. When it comes to financials, what we see, as you know, global financials is real rates marching higher as central banks withdraw policy withdraw policy stimulus, and you know, that's something that if it's not something that immediately kind of tips over a global econom like activity, and particularly if it's something that's happening in a synchronized fashion globally rather than just being the US, uh, this

is something that it's going to benefit banks in generally the higher real rates, even if the curve is biased towards flattening. Also, if you look at forward earnings for share estimates for the banking group, those those seem like they have a pretty low bar to be revised up going forward. And part of that is the fact that, especially at the U S, banks have have had a

lot of lone loss reserve releases this year. You know, we COVID wasn't as out of a credit event as expected, in large part because of all the fiscal and monetary stimulus. So you know, therefore they were able to kind of release that cushion more so than others. And in another segments like European banks for instance, there's a lot more room for that to come down and for shareholder return programs dividends and buy backs to to also go up.

When it comes to energy, this is you know, a a view that energy stocks are discounting a lower price of boy will then you currently exists in the market, and that kind of this uh, this higher higher range for oil compared to last cycle is going to persist. We're not necessarily in the camp that you're going to get, you know, this hundred and fifty two dollar oil. That's not kind of what informs our optimism on the on

the energy sector. It's that energy companies are trading as though the price of oil is significantly lower than it is now, so there's further room for earnings, for share estimates to go up. And also just looking at the the kind of reasons why you might think the oil market could go out of kilter in the near term. We see OPEC as mostly on a preset course in terms of how they're returning oil to the market in

a fairly telegraphed fashion. And what we also see then is a ton of capital discipline from US shale producers. So one thing that's been interesting to look at is that if you look at the you know, the drilled but uncompleted wells the ducks. Those are the ones that essentially can get turned on the fastest when you're when

you're trying to kind of boost production. What US oil producers have been doing to help boost supply off the you know, very low levels it was at post pandemic, but not necessarily the levels that it's that it was at in the kind of the zenith of the shail boom is that they've just been running down those inventories.

What that means going forward is you need capex and as we see rig counts go up, that's going to be about not about boosting production, that's going to be about right sizing inventory accounts to a large extent, So U shail companies right now are very openly being run for the benefit of shareholders, for the benefit of the balance sheet, and production growth is far down the list of priorities. That's something that keeps a bit of a

lid on the supply outlook and the demand outlooks. As you know, we have a very optimistic view there, so you know, continue to see that market remaining pretty tight. Well that I do have kind of an ulterior motive. I was hoping we could ask Luca question so loaded that he gets fired and has to come back to Bloomberg. What do you what do you think is that? Does that mean I would love to sit next to Luke again? In my eyes, it's I mean, it's kind of mean,

but I'm for it. I'm dropping a Teller Swift reference there, you guys. Pray didn't even Oh yes, oh I didn't because I figured you wouldn't know it so well. You know how much grief I'm gonna get from my old man friends for for Taylor Swift. I'm never gonna hear none of this. But anyway, Luke, I'm gonna go there. You know, it's not quite Thanksgiving, it's not quite Christmas, and you're not supposed to talk about this stuff but politics.

I want to talk politics with you. I think you are one of the few who can talk political economy type of things, and I'm just curious. You know, we've got the mid term elections coming up in November. Obviously, it's that's a world away in market time. You know, inflation obviously has been the biggest political talking point right from the from the right. Is it too early to

sort of factor in politics the mid term? A lot sctions into any any market used for for next year and beyond, and I especially you know when you think about the fiscal headwind or tail wind that we had last year, and you know, surprise, surprise, all of a sudden, fiscal policy was a fabulous thing for the markets. But you know, this year, I gotta think, you know, at best it's neutral, At worst, it becomes a headwind if

they managed to actually raise the corporate taxes. UM, I certainly don't see any big stimulus package getting past uh. At least I would surprise the market to the upside. What are you thinking about the political climate in the US and and that fiscal piece of the puzzle for

this year. So it's it's great that I can artfully sidestep this so well because how how how I'm thinking about politics and and the policy outlooked generally, is that obviously, if we look back through the past eighteen to twenty four months, how important has policy been into the matt Are economic outlook. It's been the it's been the alpha

and little mega. It's been pretty much everything until we got to the vaccine, and even since then, it's helped kind of distinguish relative winners and losers note performers etcetera. By by the extent of the stimulus after that. The the thing now is that it's less important because you've put the private sector in in such a healthy shape that we can hand the baton pretty pretty artfully. That

you know. I don't foresee a large range. I don't foresee in the range of fiscal outcomes, especially for the for the US, China potentially a different story, more and more volatility there. But in the US, I don't see within the range of fiscal outcomes next year something that jeopardizes above trend growth. Don't see that as a factor. I think the private sector is going to grab the baton and absolutely dash with it. That's bad news, full down. I think he's gonna keep his job. I don't think

we're gonna get him canceled with that one. Yeah, really, I really do miss sitting next to you, Luke. Now, I used to pick up digging when pulled on it be on calls, so I think that's the bigger part. He was. He was the best seatmate. Look, I love this bit in one of your recent notes because I actually hadn't seen it anywhere else. It said, supply constraints are in some instances consumers way of telling corporations to

increase capital expenditures. I know you mentioned topics earlier, but it sounds like you are expecting more topics and I'm wondering why and what that means for the market. Yeah, So, I mean, I think that's one of the silver linings of inflation, right that it's uh in this environment, it's a it's a little different because a lot of the

supply constraints are so COVID induced and artificial. But we see that kind of income and measures of demand are are above pre COVID levels, and I suspect that that body and motion is going to stay in motion. So what then has to adjust on on a going forward basis is the supply side. I think we can to a certain extent trust companies and their and their capex intentions, which across regional FED surveys are are extremely high if we're looking at the you know, the sixth month forward

outlook for capex. I think also embedded in this though, is the is the downside risk that you know, right now nobody's talking about, but I'm sure sometime within the next year we'll start to is the idea that because of because the inflationary forces were running through. Now the eventually we're going to end up with this inflationary forces, and part of that might be fueled by the capital

expenditures we get. Usually it's I forget who said it might have been uh nessing talent, but he said something akin to I've seen a lot of gluts that aren't necessarily followed by shortages. But pretty much every shortage I see is you know, followed at some point or another by a by a glut. So I think that's kind of one risk. But in the near term, it's it's let's let's focus on let's look, let's get horse in

the mouth. We've got a strong capex outlook. And one of the great things about capex is if you're looking at kind of the profit equation where profits come from capital expenditures or something that you know, for one company who you're who you're buying the capex from, that's you an immediate source of revenues and earnings for them, But for the company doing the capital expenditures, that's being depreciated

over time. So it's something that through its very act from an accounting standpoint, does have a very positive effect on on earnings the way they're the way they're reported. So if something that does inform our view that you're going to have some you know, pretty strong at least kind of twenty seventeen like levels of EPs growth next year. Yeah, I'm glad you brought that. But I've been saying for a while, I feel like there's deflation or or low inflation on the other end of this when all the

supply bottlenecks or work through. You know, if we do see that, Luke is uh, is that where transitory You're gonna be taken out of retirement to describe that scenario, do you think or is it something that FED would react to? Yeah, I I I mean, that's that's kind of an interesting outcome that I think we've seen in the past. When the Fed quote unquote wants to hike it will it will find a preferred measure of inflation that it wants to focus on too, to justify those tykes.

I remember when you know the Dallas Fed trimmed to mean was was all the rage within the FED. And you know, one interesting part of this is that you're going to see this this big gap that we have between c p I and n PC continue to say wide and even wide and further based on just shelter being a much bigger part of cp I than it is for pc PC more important to the to the FED, or at least you know what they what they target.

So I I think that you know, you you take the FED more or less at their at their word

in terms of dealing with inflation. But I think it's important to remember that if inflation is clearly just managing the flip side of this kind of managing the high readings we have now base effects cutting the other way, you know, some build out of excess capacity, then it would be it would be very odd if the FED that showed a lot of tolerance for very above trend inflation right now, because it you know, knows or identifies

that you know, some of that is transitory. It would be very odd if they reacted to a bit of disinflation the other way, particularly if real growth is very strong and you know, in the employment rate and measures of labor utilization are are looking pretty healthy. Yeah, alright, look good stuff. Before we get to the crazy thing, Luke, I do have to ask you, as your role of sort of men's fashion icon around here at Blueberg. Well, Don I used to describe Luke's fashion sense as risk

on Luke. Now that you're at a bank, is it? Are you more? Have you toned it down? You still risk on a dresser or more of a dresser. I'm a I'm a sixty so I'm you know, sixty equities, twenty bonds and twenty alternatives. You know that's that's I think, what I mean, what I'm aiming for now. Yeah, all right, You've got a little he's got a little crypto in his wordrobe, some some laser beam ties. Maybe, I don't know,

we'll see who does really great to have you. But you know, we can't let you go without some crazy things, so uh stand by for the crazy things. Tiden up your straight jackets. It's time for the craziest things we saw in markets this week. Fill that'll let's start with you. Okay, my weirdest thing, and anybody could have seen this coming, but it's still super weird. H and R Block is

suing Jack Dorsey's Block for trademark infringement. So H and R Block said the company formerly known as Square because if you'll remember, a couple of weeks ago, Square changed its name to block. H and R said it appears to be taking a shortcut to capitalize on the well known block moniker and that it might create confusion for consumers. H and R Block has been around for something like six or seven decades, so anybody could have seen this coming. Yeah, yeah,

I have to follow that one. I don't know. I don't know if I'm mature, what I what I would decide on that. I that's a tough one. All right, Louke, how about you? You You got anything crazy first? Okay? I like, I'll give you. I'll give you a couple. The first is so on on Thursday, we we woke up to a unexpected rate hike from the Bank of England. And you know what normally happens when you have a monetary surprise of this nature. I would, I personally would expect

be the curve to flatten. It did not. It it's deepened by a very little bit, but it's still steepened. Having two ten steepen on a day with a hawkish monetary surprise, that is something, you know, very weird for you know, for contrast, when the when the Bank of Canada cut rates back in January in a very surprising move the curve deepened by about you know, ten to fifteen basis points that day. That's the kind of you know,

expectation you have. I would have thought that, you know, in reverse, given that this was a more surprising hike. The the other thing I'll throw in, and it's from I think new New Bloomberg columnists Heavier Blast, pointing out that we all know that there's kind of concerns about energy shortages, the natural gas shortages, the weather Europe, etcetera,

what have you. He's already pointing that out, that you're seeing traders start to hedge in and build in some kind of risk premia for an especially cold winter next year. We know that, you know, making predictions is hard, especially about the future. But trying to forecast you know, the degree of whether severity or what will be the supply dynamics demand dynamics in this commodity market over a year down the road. Boy, that's uh, that seems pretty odd

to me. Yeah, whether they got the old Farmers Almanac out or something. I guess I wonder, I wonder if whether predicting will ever get you know, more accurate into the distant future like that. And uh, that's a trick. I have to read dot com. Javier is great by the way. All right, well, I'm gonna try to regain some rock and roll dignity here after all this Taylor Swift talk with a story from Rolling Stone about Bruce Springsteen. Bildona,

I trust you've heard of him. He's kind of like the Taylor Swift of my generation, I guess you could say. And this is not gonna sound that crazy, but it's crazy. If you know. Bruce kind of a guy who never quote unquote sold out, but he sold the publishing catalog all those songs, so all the mass recordings and all the publishing rights to Sony and what that basically paves the way for is you know Springsteen and some you know, baby, we're born to run to Taco bell or or or

stuff like that, pink Cadillac commercials and whatnot. But I want to play a game. Get the game show going to and play a little prices right with you? And Luke? What do you suppose the publishing rights to the entire Bruce Springsteen catalog is worth? If you're Sony Music, what are you paying? Well, let's start with you fifty million? Okay, I'm keeping I'm gonna keep a poker face here. I've both thought you're a Jersey girl. You know at heart, that's a high price. I know it's a that's a

pretty high price tag. I mean usually I like low ball things, so I'm going with fifty million. I'm trying to keep my poker face here. But Luke, so what what I've done is I didn't cheat by looking up looking this up, but I was frantically googling just to make sure I took the well what it's scooter by by Taylor? So for three million, so I'm gonna go. You know, we're definitely going under three hundred million, but

I'm gonna go more than fifty million. I'd say that, like, Bruce Springsteen is basically half the Taylor Swift, so we'll give it a hundred fifty million. Bruce Springsteen is half a Teller Swift. Luke, I hope your colleagues that ubs heard that and you get all the grief you deserve when you return to the office. Bruce Springsteen is half a Taylor Swift. That's a really good strategy though, that was that was so smart. Five hundred million for Springstein catalog.

So he's like a Taylor swift and a half and then some wow. I really was sure fifty million was a good guest. Fifty We'll not a fifty million Spring Springsteen could get fifty million for like a show with the Stone Pony. Come on, yes, I guess I'm sorry. On the other hand, Taylor, Taylor has at least of her career left to go, so three hundred, you know, the five hundred I think on atmorize it a little bit there on on an expected value basis, I still

think we've got Taylor reg Andrus here. All right, all right, well, what do you think Scooter's steak is worth now that she's redoing everything? That's definitely a depreciating asset. I would think, yeah, I mean, like, let's let's make that a let's make that a doughnut short as the expression goes, fair enough, Lucas short Scooter, I don't know. I think Scooter is going to figure it out a way to come back

back from it. All my money, I think I think this is the last time we mentioned Yeah, I just like to be a troll about Well, we're great to catch up with you. We we really appreciate your time and and we're gonna have to have you back in two and talk about if you've got anything wrong. Invariably, Hey, thanks for thanks for having me, folks. The best of the holidays to to you and the families, and we're

we don't really think you'll get anything wrong. I'm assuming Luke's reports are all going to be about on these calls, and you're doing pretty good. I think, Luka great to see it. Thank you, Luke. Care folks, What Goes Up. We'll be back next week. Until then, you can find us on the Bloomberg Terminal website and app or wherever you get your podcasts. We'd love it if you took the time to rate and review the show on Apple Podcasts so more listeners can find us. And you can

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