Much Ado About Impeachment

things that happened in markets this week, don't worry. We will not disappoint Sarah. I'll give you one hint on what my craziest thing is Switzerland. Switzerland. All right, I guess we'll have to wait like usual, and as always, remember we have our very own Bloomberg Podcast hotline. Give us a call, ask us a question, leave us a message saying the craziest things that you guys have seen in market, and maybe we'll even play your message on the show. That number is six or six three two

four three for nine zero. So Sarah, I have to say, uh, I just met our first guest today for the first time, but I like them already and I'll tell you why, because I was reading the notes he sent over with sort of the thought his thoughts on the market, and they jibe with my own very very much. There's a lot of a lot of common ideas there. You love to hear your own. I'm the hot above a little confirmation bias, but he's the chief market strategist at New Texas.

He's also the chair of the steering committee for the Active Managers Council, so we expect him to be very active in this podcast. And uh, he's right about everything, as we've we've already said. His name is Dave Lafferty. Dave, welcome to the show. Thank you for having me, and I appreciate the confirmation bias right wrong with a little pat yourself on the back right our other guests. I kind of like him too, even though I rarely agree with him. Yeah, he is a cross asset reporter for Bloomberg.

He is I would call him the cal Ripkin of finance Twitter. I might have to explain that, explain explain for the kids that it means he shows up every day swinging. He shows up every day swinging and as we just discovered he's an intermittent faster. Luke, how tell us about that? I mean, I think it's pretty necessary if you can you can eat whatever the heck you want for eight hours a day and then do nothing for the other sixteen I think it's it's really smart.

It's working. I can tell you. I sit next to Luke and I can start tell you he does not eat whatever he wants for the other sixteen hours of the day. I hate you know, some of us weren't fitting into suits we bought, you know, a year ago, and now we do again. You know, well, I fast for about twenty minutes out of time. That counts counts. You have to raise a number of daughters, though I'm sure you know that's a lot of calorie burning and a dog. Don't forget about that one. So Dave, let's

start with you. Um. Obviously, the big story of the week is Nancy Pelosi, uh, sort of finally pulling the trigger on the impeachment inquiry of President Donald Trump. Um. We saw a little bit of altility around the announcement and before it, as as the rumors started swirling. Walk us through how you're thinking about this? Is this a risk that sort of the average investor has to worry about in the long term or even the short term. Uh,

how are you thinking about impeachment? Well, I think when you bring up the horizon, that is the right way to think about it. And when I think in the near term, it doesn't strike me as something that's very tradeable, I think it's gonna be a lot of he said, she said, we don't know what we don't know at this point. We don't know what the revelations will be, So I think it's really tough to kind of trade

around this. Uh. I do think that in the long run. Uh, this is really setting up the key debate around the election. And I think it's pretty clear that Speaker Pelosi has kind of been dragged, kicking and screaming into this, and

I think she has some pretty good instincts. Uh. The the Democrats can either make a really compelling, concise and coherent argument and really put the pressure on the president, or they could present a very mixed and muddled and confused presentation to the American public and really help out the president's chances. So if I was a Democratic strategist,

I wouldn't be hiring lawyers. I'd be hiring a PR firm because the they need to wrap this up in a real good sound bite, a real good bumper sticker, and then I think it has real market implications going into the election. But right now it feels like a lot of much ado about nothing. I know, you guys covered some Shakespeare on last week's podcast, so like like like most people who have never read it, I love

to quote Shakespeare. So much ado about nothing. In the meantime, we could do the Macbeth full of sound and fury signifying nothing too if we want. That isn't done for the moment. I think that was last week. We've heard, I've heard many times from investors this past week that

it's not about politics, it's about policies. So when we talk about what this could mean for markets when it comes to impeachment or at least the proceedings, um and the sound and fury of it is where it really matters what it does for actual policies like trade or

other policies in that matter. Yeah, I would certainly think so, and I'd agree, And that's why it's interesting to see market moves just based on you know, I'm refreshing predicted like every other crazy person in markets because they predicted and UH and SMP five futures were for a point in time this week, they were moving in tandem perfectly.

What's been interesting throughout this though, is that even as the odds of just impeachment by the House have certainly gone up this week, you haven't seen a corresponding decline and online prediction markets about Donald Trump's chances of winning the elections. That's a big part of policy. So what is a policy that could change and still not have those odds changed. Certainly, trade, I think would be would

be the top one. And in talking with people about you know, market reactions to these uh, these kind of political hijinks we've had, seems everyone wants to treat it as potential buying opportunity. And the part of the thinking here is, well, if you know Trump's engaged and full out war against the Democrats, then you know it's gonna be harder to fight a two front war really aggressively there with China. He might have to play more to his Republican base, make sure a lot of senators stay

on his side. And you know, the Republican senators, although they have not been a huge check on the President on trade. They certainly do not uh share all of his hawkish leanings on that subject. Dave. I was listening to TV interview you did on this subject, and you brought up the notion of game theory. And I gotta say, whenever I hear a financial type start talking about game theory, I'm like, all right, okay, son zoo take it easier,

but but I know you have to do it. Um. The problem I see is that the star of this game is Donald Trump, who plays what's the word for it, sarah, an unorthodox game. We'll go with that. Um. So everyone's doing sort of a similar mental exercise on game theory. But how how confident can you be, Um, in what you you conclude when you think about the trade tensions.

It's a great point, not very confident. The point that I was trying to make was that there's been a view that we've heard that basically this will kind of impede the timeline, that all this impeachment talk will kind of push push policy out into the future. There won't be have enough enough time to get any of this done. And all I was sort of bringing up was you also have to think about what the reaction function is.

That's sort of the link to game theory, and what I'm thinking about there is how did the Chinese react to this? Is this a chance for them to uh? Do they see the president as weak and more willing to cut a deal, so maybe they offer an olive branch. So what I was really getting at was kind of the reaction function. I don't think we can be a we can have confidence in any outcome. I think that is kind of the underlying message of the entire Trump presidency.

Don't don't bank on anything. But I do think it's not simply uh. Is easy as saying, well, this is going to delay everything it's gonna make, as Luke was saying, and as all kinds of policy implications, maybe these will will get delayed. The other side of this coin is it might give an opportunity for some people to step in. We did get a trade deal this week with Japan.

It kind of got glossed over, lost in the fray. However, we still have not really seen much movement on the U S m c A. Is there anything that we can take away from other trade jewel deals that are moving through the system to get a sense of what might be coming with China, I don't know. I really think these all progressive at their own pace. I I have had for a long time now very limited expectations around some type of grand bargain between the US and China.

I think what the US ultimately wants is for the Chinese not to be China. Uh. We we sort of we're asking them to do something that really isn't in their nature. And I think that was always going to make a really grand bargain. I mean, when it comes to ip the AFT right again into law. Yes, domestic subsidies, industry champions, all of those things that they really feel

are inherent to their industrial policy. It's it's uh, they might they might give us, uh, you know, they might buy some more soybeans from US, But I don't think they're gonna change who they fundamentally are. That's a bridge too far from me. Uh. The way I've always thought about it is the uh, the impact of this deal will be proportional to how long it takes to get done. The faster it gets done, the less it really means.

I wanted to talk about sort of what the ground zero of the trade war seems to be and it's it's manufacturing. Uh. And I was gonna read from from one of your notes. Uh. Globally, manufacturing is probably in recession, but we're watching for signs that it may spill over into broader consumption trends. It hasn't happened yet. This is a theme we've talked about a few times on this show. Um, this concern of when do we start to see this

manufacturing weakness bleed into the consumer space. You know, we did see the Conference boards consumer Confidence index take a pretty big dip uh this week, granted still at a very elevated level expectations. Uh, an even bigger dip again, still elevated level. UM. I was reading a note from Nicholas, who we had on the show, and he he finds

the craziest stats. But he was talking about Halloween consumption and how the National Retail Federation is expecting a dip in Halloween purchases and people actually believe it or not blaming it on the trade ward. I mean, is this enough to start worrying about the consumer? Obviously the job markets still strong, but where where would you look forward

to see that sort of infection into the consumer space. Well, from my standpoint, it's really about how long it takes and and sort of coming back to your point, if you look at the size of the US external sector, you know, the the x sports sectors about ten twelve of the U s economy, manufacturing sector something like a just under under twenty. In isolation, those don't seem big enough to bring down the US economy, but it is

the spillover effects. How long until the lock up in trade and supply chains spills over into manufacturing while we're seeing it, How long until the manufacturing slowdown spills over into now they you know that that person that works on the factory floor isn't going out to dinner. Now we've got waiters and waitresses being laid off. When does this begin to hit the consumption side? When does it really, in my mind, hit sort of labor and wage trends.

We don't see that yet, but at the front end of some of the labor markets we don't see it. And say the weekly jobless claims which have remained very strong, but we do see it in some of the survey data where uh jobs hard to get minus easy to get. Uh, that's beginning to deteriorate the employment components of some of the surveys are beginning to deteriorate. So we're not in the recession camp. We don't see a ton of spill over, but we might be at the very front tip of

that iceberg. And so that's what we're kind of keeping an eye on. That weekly jobless claims number, to me, is kind of the thing I look for first on

Thursday mornings. I think there's kind of two interesting points to piggyback off of that in terms of the data and the divide between hard and soft data, or almost at the diametrically opposite position that we were at the start of the Trump presidency, when it's essentially consumer confidence gauges CEO confidence gauges were absolutely shooting up in the hard data didn't match if you actually look at what US industrial production is doing and the deceleration, which it's

been real. Uh, it's nowhere near the level of deceleration and contraction you would assume is happening if you just looked at I S M and then to kind of use, well, what barometer could we use to maybe see when we get the spell over from manufacturing to services. I think they've made a great point look at the size of

the US external sector. Why not look at economies that have a much bigger manufacturing and external sector and see when it spells over there, because it's not reasonable to suggest it's really going to hit US consumers before it materially hits European consumers, in particular Germany. It seems like we're constantly talking about these headwinds, either sentiment deteriorating or you think about the oil spike, Middle East tensions over

caused by Iran. Also, we've talked about slowing economic growth overseas, particularly this week we sell weaker economic data out of Europe. Now you're dealing with all this impeachment talk. Trade continues, but the market is still near its record highs. I mean, the market has been very resilient. Do you get the sense that that's actually the tone from underlying investors that people feel good right now or do people still feel

pretty downtrodden and that means there's room to move further? Well, I think again, coming back to the sentiment indicators, I do feel like they've weakened, and I think people are very worried. I think even people that don't understand or even know what an inverted yield curve. Ore could still stop you on the street and ask you what this means for their four oh one K. So I do

think sentiment has has clearly uh deteriorated in that sense. Uh. I think more important, though, is what are the underlying trends? And I think this really has people concerned because because frankly, for all the news that's been buffeting the stock market, what we aren't talking a lot about are the earning strends,

which frankly haven't been that great. It's been positive, but they've been the forward earnings estimates have been gradually deteriorating for about three or four quarters now, and valuations which we don't see as as exorbitant, but they're certainly not cheap. So all this stuff is buffeting the equity markets, but it's buffeting it in a context where those two kind of drivers of equity returns margin expansion or contraction in the underlying earnings, neither of those variables is really in

the favor right now of equity holders. So I think you need to sort of look underneath the way and everything that's happening to see kind of those underlying trends, and they're stable, but they're not great. One really interesting point you brought up in your notes was, uh, and I'm quoting you here, you say we think central banks have run out of real ammunition. Uh. And you talk about the credit impulse, which and correct me if I'm

bungling this definition. But it's basically the year over year growth in credit as a percentage of growth in GDP, and it's really been pinned at a very low level. The trend of it seems to just have flatlined, uh and and gone lower over the years, despite the FED returning to an easy posture. What do you think is behind that? So what you described as an even better definition of the credit impulse than what I would think,

I I actually think a bit much. For me, the credit impulse is just the the uh, the impetus to want to take on more debt as interest rates get lower. So how much credit will really be sort of uh demanded as rates go lower? And so the point that I was really making is, you know, when interest rates go from four percent to two percent, CEO say, hey, I can fund that new plant, I can buy that

new software, maybe I can hire some more workers. But when rates are pretty close to zero in some parts of the world if you haven't gone out and borrowed yet. As you get closer to the zero bound, does lowering interest rates really create this new demand for credit? That

was really what I was getting at. And so I think the idea, you know, we we've heard this constantly, and this is one of the narratives I've pushed back on for about a year and a half now, was the idea that more a committy of central banks would

somehow be good for the stock market. I don't necessarily think it's bad, but I think we've lost more credit impulse, and I actually think we're reaching a point where, uh, the more accommodative and the more frantic this begins to look super accommodative policy at ten years on now serves to undermine investor and consumer confidence more than it does to instill it. And those are the two reasons why

I'm a little bit hesitant about thinking. I certainly think, hey, if you take rates lower and do a bunch of quwi, yeah, at the margin, we get some stimulus. I just don't think it looks anything like it did in previous episodes of this super accommodative policy. Sticking with the topic, of debt. I want to get your take on this phenomenon that we've been seeing. So Goldman Sacks has these two different

baskets of stocks. One has stocks that are extremely highly levered, the other has stocks that have extremely strong and healthy balance sheets. And since June we've actually seen this sudden outperformance of these highly levered stocks right before the FED cut interest rates. To you, when you see these stocks that might be seen as low quality stocks doing better, I should say, then your higher quality a strong balance sheet companies. Is that sustainable or does it seem more

like a head fake it will look. I think it's probably unsustainable in the sense that we're still going to have an economic cycle, and ultimately, when the credit cycle turns, those names are going to get punished the most. I do think that as you take interest rates lower and lower than natural compounding companies that aren't as strong financially but they have sort of this growth bent, that that

growth is is further out there into the future. You know. Uh, the unicorns have all been kind of taking it on the chin in recent weeks. Uh. The idea that you're not discounting those cash flows as much gives these levered companies more leeway. I think investors give them a little bit more leeway. But Sarah, that can't last forever. Ultimately, we don't know when the credit cycle will begin to bite, but it will come back at some point, So no,

it can't last forever. It's probably important to note that this isn't necessarily being validated by the bond market right now. For instance, the you know, the riskiest credits triple cs, they've been underperforming in high yield UH you know, a clear lagger this year, but especially in the last few weeks, so credits supposed to be the smart money, and those guys are going, hey, like, maybe you're just reevaluating the

upside prospects and the equity. But we aren't necessarily very convinced here as the ones first in the UH first in the recoup line. Luke, you write a lot about options in the volatility market, and we're talking a little bit earlier about it, and you're saying that there's there's just really nothing to talk about there. There's this heightened

uncertainty with the impeachment and the trade tensions. The VIX is still kind of where it's been fifteen sixteen, you know, I was looking at the skew the option skew on the spy ETF a little elevated, not really anything to write home about. Is that surprising to you? Um? And how would you you know, how would you explain a given uh, the scary headlines floating around. So the fun thing about looking at skew now is it's been sticky high for a while. Just looking at put call skew

out of the money. And this is because just how especially in and this is especially acute for the SMP five, just very like market structure has mattered a ton. And what we have more and more, especially as we're in a very choppy range bound market, is institutional call overwriting. You know, you own the stock, then you sell the you know, five percent out of the money call to

collect some premium along the way. So that's something that's going to keep a lid on the applied volatility of calls relative to put that's been a pretty steady dynamic. What you have, then, on the other side, is look at wings pricing, So look at essentially the implied volatility of way out of the money calls or puts versus closer to the money stuff. And that's where you see, and I think this is also a reflection of that we've been trading in a arrange. People are essentially pricing

and well, we're trading in a arrange. I'm going to protect against the next five percent, not in the next ten percent, because that's the way the market's been lately. So I think it's really a market structure story why options have been as not exciting as you might expect them to be in this instance. But it makes sense when you put these pieces together. Dave Spending up forwards, I like how you describe something earlier. You said you

need to look underneath the wave. So look underneath the headline risks, and look at what the economy is actually doing, the fundamentals, the corporate profits. How much of a risk do earnings downgrades revisions to the downside actually present going forwards? I mean, sure, we always see this trend at the end of the year where you start to see company's guide lower for but we're still expecting double digit at ten percent growth for So is it possible that markets

or investors will be taken by surprise should this come? Uh, that's actually what I think will happen. I don't think they'll be taken by surprise. I think it's going to be much more gradual than that. So when we look at kind of the year over year numbers for the SNP, it looks like plus two to plus four for calendar year two thousand nineteen. As you mentioned, ten percent is about the bottom up estimate for next year and another

ten percent. This strikes me as a bit optimistic, and for me, the basic math is when you take companies, you know, these these megacap companies, multinational companies uh generally inaggregate, I don't see how they grow top line revenue growth significantly faster than nominal global growth. Remember, revenue and earnings is a nominal concept, so nominal global growth is probably in the five percent neighborhood. We're probably growing at three

percent reel and call it two percent inflation. So to me, top line revenue growth is probably five or six percent. Then you have to look at profit margins. You can grow earnings much faster than the bottom line if margins are expanding expanding, but if margins are already fairly high. So I don't see how we translate relatively slow top line revenue growth into significantly higher bottom line earnings growth.

So my guest this year again we're at two to four percent, will probably come in around that, maybe just light of that. For next year ten percent, the year after that ten percent. My guess is they'll behalf of both of those. I think earnings are gradually grinding higher, but I don't think they're going to be anywhere near what the bottom up estimates are in the next two years. And this all leads to sort of one of your main thesis is right now thesis is scs. Okay, all right,

I was an English major. I should know suffing. But Dave, you say that we think equity allocations should be positioned cautiously, but we don't like the term defensives. Obviously, utilities, consumer staples are peered very much like crowded trades, very high valuations earlier this year. So how how do you be cautious, uh, with an equity portfolio? Now if those sort of you know, textbooks,

safe avens are kind of a little risky right now. Yeah, so the caution really comes not from our base case, which, like I said, I think the market probably goes higher, grinds higher, but I don't like the risk adjusted trade off. I don't like the idea that I always ask the question what happens if I'm wrong, and I usually assume that I'm wrong. So if our if our base case is wrong and things turn out to be better than we expect, there's some upside to the market. But again,

valuations are already elevated, not exorbitant, but elevated. Profit margins are already elevated. So how much upside is there? There's probably some there, but not a not an enormous amount. What about the downside? What if we're wrong and we do go into recession. It's not our base case, but it's what's something we've we've become much more worried about. If we're wrong and we do go into recession, there's far more downside than there is upside, And so that's

kind of why we're cautious. When you get back to those sector plays. What I was really kind of getting at is I like cautious better than defensive, because when you say defensive, people here staples and utilities, and I always think it's really hard to be defensive by buying the most expensive thing in the market. That's not kind of the you know, the classic notion of margin of safety and I worry that again, this is one of

the by products of central bank policy. You suppress rates, and you make anything that has yield or or looks stable or bond like you elevate. It's its valuations. And I think it's a little worrisome when investors ask us, hey, should I be replacing my bond portfolios with utilities? Because I can pick up an extra fifty basis points or

a hundred basis points. But you're fundamentally moving from high quality bonds which have four or five percent fall two equities that have even low volatility equities might be twelve to fifteen. You're fundamentally changing your risk profile and picking up fifty basis points to do it. That that's dangerous to me. So how do we look at it? Uh? Low ball equity, maybe some options selling a return back

to value. Perhaps there are ways to be cautious in your equity portfolio with outloading into sort of the defensive names. All right, one last thing before we get to the crazy things, uh, Dave, and this is to put your hat on as chair of the steering committee for the Active Managers Council. So you're in an elevator A short elevator trip with a retiree who's loaded up on on

passive index funds. What's what's your pitch? Uh, Well, it's important to note that the Active Managers Council, it's an adversary group underneath the Investment Advisors Association, but it is in no way sort of uh anti passive, where we we think passive is great. What we're really pushing back against is sort of this unbalanced narrative, Uh, that sort of active management has been vilified, and we would say

unjustifiably been vilified. We we think that this is a false dichotomy that's presented to investors, that kind of passive is good and active is bad. And I think when you look at the key arguments, and we've done some research on this, people will say, well, active management hasn't worked, and they'll point to some scorecards, and we would say the results of the scorecards are very mixed. Yes, in large cap us equities it's been quite a struggle, but

it's a much more mixed result in in other categories. Uh. You'll hear that active management on average can't outperform because of sort of this zero sum argument. And it turns out that the zero sum argument doesn't really apply given the way that we measure the number of managers who outperformed. The average dollar can't generate excess return, but the average manager could. And then the third narrative that we pushed back on is this idea that even if active managers

could outperform, they're really hard to pick. And we don't think that that it's a needle in the haystack exercise. There are some key uh indicators that you can look at that will not guarantee you pick a great manager. Both certainly will improve your odds. So the idea of the active Managers counsels to is to make a more balanced narrative. But it's in no way to throw passive under the bus, which many of the council members are big fans of, including us. We have passed exposure good stuff.

I will say it's a little bit long for an elevator pictures. I think, I don't. I don't even think he's talking to the older tyree. That's just twenty years of commissions. He's walking right by looking well, we're glad to have him. Uh. Now for the crazy stuff, Uh, Sarah, what is the craziest thing you ever saw in markets this week. Alright, I have to give a hat tip to Bildonna high Arch who was on the show before,

because she did help me out with this one. It was just it was pretty crazy, so I had to go with it. Um. So, this is the headline of a story from the New York Post. It says, bond King Bill Gross and postage stamp feud with rocker sons. So for one thing, now rocker son, now you know his son. His son is a rocker, So now you know that Bill Gross is son. Um is actually a pretty big rocker. He's a musician who has do songs

for Whiz Khalifa, so that can be appreciated. Um. But he is in a fight with him over a collection of postage stamps. Um. So not exactly. I wish Bill was still writing in his monthly commentaries that would be able to read about that. Yeah, he was writing monthly commentaries about his feud with his quote unquote rockers son. Be pretty good, Luke, Can you top Bill Gross in a no? But I but I will give a shout

out to us. One of the best things I've read this week from Bloomberg's Best Stanton, and it's essentially saying, you know, what is the price of a treasury? Well, it depends on whom you ask. And she pointed out that at three big bond mutual funds had three different values for one bond. UH. You know, the Bond Fund of America had priced at one oh one point two essentially another fund at one oh one point one eight to another fund at one oh one point one seven

five eight. So it's essentially showing that, you know, the little bit of discretion that has allowed in markets will allow you know, UH funds to to value things differently. If I had to do something different, I'd be it's not quite in markets. But Joe Wisenhal's explanation of how repo markets are a lot like trying to buy marijuana when you don't have any cash on you would have been my runner up and not quite Mark. That one was pretty good. Dave. How about you, you've seen anything

crazy this week? Well? I think Sarah's one is pretty crazy. If if Bill Gross is fighting tooth and nail over stamps, then we know interest rates are pretty well not a lot of yield out there, not a lot of yield out there to find If we're fighting over stamps at this point was a collection of postage stamps. He's got the most valuable collection in the world. I believe that's

he is a collector, right, that's right. Remember. Uh So one of the things that sort of crossed my terminal was I think it was a Bloomberg article and maybe you've discussed it. It's been in the water supply. But it was announced earlier this week that uh, Facebook has entered into an agreement to buy a firm called Ctrl Labs. And you you may have seen this. What what's crazy and sort of interesting about Ctrl Labs is that it's

a firm that basically uses software and hardware. I think it's a bracelet kind of a wearable to monitor kind of the neurons and the neurological activity in your brain and then use that to send a signal to your computer. Uh and the use of an avatar, so basically sending a signal uh to your computer kind of through your thought waves. That's a little crazy, But then I had to put it in the context of what Facebook is

going through. Facebook on a daily basis is being dragged up to Capitol Hill, uh to deal with antitrust, privacy issues, election interference and everything else, and they're basically going to have to go back to their same regulators and ask them for permission to buy a company that is basically leading in the space of thought control. This strikes me

as perhaps a little bit worried. Yeah, and so the way that I think about it, and I should put the compliance disclosure in, we don't do buy soil and individual stocks. I have no idea what it means for Facebook. I don't I don't pretend to even have a Facebook account, but I do think it's it's sort of fascinating to see a company like Facebook beginning to get into sort of the realm of kind of mind control. And I don't for one second believe right now it's initially your

mind controls the computer. I suspect at some point that highway will go in the other direction. When I think within the context of what Facebook is going through, I think it's a pretty crazy and brash move. Absolutely. I wonder if those brain signals get sent to advertisers to Wonder wants potato chips. Again. I don't remember the name of it, but it sounds like I remember early on the show we talked about a startup that Tesla was a part of and they did a very similar thing.

It's a brave new world, all right, I'll do mine quickly. Uh. Credit Swiss stock has had a rough week. I mean all European bank stocks have had a rough week, to be honest, most week so rough for European bank talks. Credits with Swiss is one of the leaders on the down side, and I have to think it has something

to do with this crazy story. They had a top banker who defected over to UBS, and then the guy figured out that they had hired a private detective to follow him around and make sure he wasn't poaching any of this. So it's turned into this big scandal that they're worried the CEO might have to step down over it. It's uh, it's pretty esting, Sarah. I think we chip in. Maybe we could get a detective to follow Luke around.

I think we could see if he's really fast, pretty easy to follow, you don't know what looks doing outside of the office, and get a detective to check on it. I think that's it for the week. I think it is. Dave Blafferty Lucalla, thanks so much for joining us. 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 interview the show on

Apple podcast so more listeners can find us. And you can find us on Twitter. Follow me at at Sarah Ponzeck, Mike is at reag Anonymous, Our guest Dave Lapperty is at Lapperty the Texas, and Luke Kawa is at l j Kawa. You can also follow Bloomberg Podcasts at podcasts. What Goes Up is produced by topur Foreheads. The head of Bloomberg podcast is Francesca Levie. Thanks for listening, See you next time.