Megan Horneman, Chief Investment Officer at Verdence Capital Advisors, discusses the economy, markets, and inflation. Mick Mulroy, co-founder of the Lobo Institute and Former Deputy Assistant Secretary of Defense for the Middle East serving under James Mattis as well as a retired CIA officer and US Marine, discusses Nancy Pelosi's trip to Taiwan and the US strike in Afghanistan that killed an Al-Qaeda leader. Sri Natarajan, Senior Reporter with Bloomberg News, discusses his Big Take story on Goldman Sachs allegedly trying to tarnish two former employees’ reputations. Rhett Buttle, Founder and Principal at Public Private Strategies, joins the show to discuss the CHIPS act and the Biden administration’s challenges and strategies in 2022. Nick Stadtmiller, Director: Emerging Markets at Medley Global Advisors, discusses EMEA and emerging markets. Hosted by Paul Sweeney and Matt Miller.
Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside my co host Matt Miller. Every business day we bring you interviews from CEOs, market pros, and Bloomberg experts, along with essential market moving news. Find the Bloomberg Markets Podcast on Apple Podcasts or wherever you listen to podcasts, and at Bloomberg dot com slash podcast. Moving higher in these markets here smp U eight ten, so one percent. I think this move, Matt has taken a lot of people by surprise here and they're trying to figure out is it real? Do I buy it? Do I fade it? What do I do? Here? Let's check in with somebody who does this stuff for living, Megan Hornum and chief investment officer for Verdin's Capital Advisors. So what say you, Megan? As we look at this market, equity markets bouncing, you know, I don't know, they're teen percenters so off the bottom? Is this real? I think for certain areas of the market that got hit the most that yes, I think that this is a good opportunity to maybe be adding just some of those areas. So I mean, in that instance, look at some things like small cap mid cap stocks, These areas were beaten down the most and they're actually benefiting from this rebound we've seen. But if you look at your large cap, your technology, your growth, I'm still a little nervous about adding and you know, getting aggressive in that area because they also have rebounded. But I don't think it's fully reflecting where the interst rate market will go. And that's the one thing I think is a head wind there to those those stocks. The path looks like, oh sorry, my mic was off. What do you think the FED path looks like? Megan? So, I think between now and I know a lot of people are focused on the September meeting, and while they go fifty or while they go seventy five, right now, fifty is a definite. Uh, seventy five is still up in the air. Because keep in mind that between now and then, we'll get two jobs reports, will get at least two CPI reports, will get a lot more information on inflation, and we'll also get more information on just where economy is. We did get that second consecutive quarter of negative GDP we um we've seen today. Like you mentioned, the services sector was was much stronger, but manufacturing is getting weaker pretty rapidly, So they want to look at all of these things in way that against the future outlook for the second half of this year before they decide that, hey, it's going to be seventy five basis points. We'll be looking at the Jackson Whole meeting, which also comes out at the end of the of August. August they tend to give some more indication during those meetings, and it also tends to be a market mover. That's why I'm mad. I think I need to go out the Jackson Hole. What do you think? Have you not already got tickets? Are you not going to Jacksonly? I don't know. I mean, I know Michael McKee's going. I've volunteered to carry his luggage. But I mean, I think I need to be out. Are we broadcasting, Eric? Are we broadcasting from Jackson Hole? Are you not? Have you not already? Can you clear that with Colin and Anthony? Bob? I see Bob, and are you can pull the you can pull the strings? All right? Very good? All right? Megan. So we're thinking about here. You know, I'm an equity person, but I look at the fixed income and I see the negative returns year today and you know, I listened to credit strategists and portfolio managers saying, we've never had an under performance like we've seen in the first six seven months of Why don't I just jump into the deep end and start buying bonds because I wouldn't buy a tenure tenure treasury when it's at a two eighty two and you have inflation at nine percent. That's why, Okay, that that makes sense to me in the midst of an aggressive FED tightening cycle, where I do think that the market is getting a little ahead of itself that there's going to be cuts next year, Will there'll be a pause? That could quite possibly be the case, but the Federal Reserve doesn't want to get in a system of like the early nineteen seventies early nineteen eighties, where they would raise rates rapidly and then have to cut quickly. They want to try and smooth this out. So I think the market is getting a little ahead of itself that will be in for cuts next year, and that's why you're seeing interest rates rally. There's really not much opportunity or really any reward for the risk you're taking in an interest rate environment in long term bonds now short term bonds. They're adding a little bit of yield now. I mean you've got about a three fifteen on on the two year Treasury floating rate notes. They should keep pace with what the Feds doing so in your fixed income allocation because you can abandon it. I mean, we've seen that it still does have a diversification benefit even though it isn't what it used to be. It's been a tough year for that sixty forty portfolio, but you should always have something stay short um, keep defensive there from a maturity positioning, all right, In terms of UH stocks right now, if you wanted to get into this market, how would you get involved? Would you you know, by an index tracker? Would you look for active management UM other sectors that you like. It's definitely active management UM. That's where you need to be right now, being in an index level right now with the uncertainty, especially from an earnings perspective. Keeping mind, we haven't seen earnings really come down to reflect the whether you know, the economic or session or economic slowdown. We haven't seen a pretty move there, So I would it would definitely recommend being in the active side of it. People that can pick out stocks not indexing um, you know, being having dry powder on the sidelines too to be able to put that to work. That's what we recommend right now. So, Meg, we just had some I S M services data come out better than expected. I mean, is the consumer as strong as maybe we think here she is? Right now? The consumers shifted from that good space spending that we saw coming out of the pandemic, and now they're spending on services and experience, and I think that that still has a little bit of room to go. But people whether it's travel or vacation or going out to restaurants, we're still seeing people that are getting trips and things like that that they didn't use during the pandemic or last year. So you still have a pent up amand for that side of the economy. But how many trips to Disney World are you gonna take? Really? You know? I mean, this is going to fade, especially if you look at the consumer. I don't disagree that the balance sheet of the consumer is stronger than it's ever been leading up to any recession. If you look at you know, net worth, but they're taking out credit card debt at a double digit pace, and the savings during the pandemic has been dwindled away, so I don't think that this is sustainable in the second half. All right, Megan, great stuff. As always, always appreciate getting some of your valuable time. Megan Horneman, Chief Investment Officer, Verden's Capital Advisors Again, SMP five dred up seven tenths of one percent. How about that? This is bloomer. Let's get to our next guest. Mc mulroy, co founder of the Mobo Institute, Former Deputy Assistant Secretary of Defense for the Middle East at the U S Department of Defense. I'm gonna keep going on this resume here because it's just lying after the line. Former Power of mill Terry Operations officer at the CIA. I don't know what that is, but I'm sure it was on some TV show. Former US Marine Infantry officer. That gets my attention. Uh. So he's had quite uh the life so far. Mick mulroy, thank you so much for joining us here. So much geopolitical stuff to kind of talk about here. First, you know, our Speaker of the House went to Taiwan, had some meetings. Left Taiwan. I guess that's good. What do you what's your takeaway? Well, great to be with you guys. I think I think, quite frankly, the Chinese are obviously very angered about this. I think they way overstated the significance. I don't see how a civilian leader with her staff going to do meetings would challenger territory integrity. But they obviously are very irritated by it. And it looks like they're going to conduct more substantial military operations. And they've done awes and that includes essentially surround ning the island of Taiwan uh in what looks like it could be UH. An example of what they could do if they were to do a blockade of Taiwan, and that is that is very troubling and quite frankly, because it's live fire and we have multiple naval assets in the in the area, UH, the chances of escalation are are pretty high. So how does the US military deal with this? I know that well. It's been reported that the Ronald Reagan Strike Group is in the area, which consists of a naval aircraft carrier and then a bunch of other big, powerful, um you know, weaponry. Would would they not want to just back up while the Chinese do these live fire exercises just in case something goes wrong. Yes, essentially, that'd be correct. I mean they have to do direct military to military coordination to ensure, uh that we know where they're going to be firing and operating, so that we don't obviously, um get in that space. We won't want to put it as we're backing up to let them do this, because that would look I think in some ways as we're facilitating this really um significantly enhanced military exercise that is not in line with you know, keeping the peace so to speak, So we don't we probably will not put it as we're moving our assets, as you said, pretty significant out of the area, but more coordinating to ensure that there's no mistake that could you know, cause an eruption and in a conflict. Right, So there's a simmering cold war there in in Asia, but we've got a hot war uh in Europe. How do you tie all that together, what's going on in Ukraine with maybe this visit to Taiwan. I mean, how do you view America's kind of foreign policies that relates to some of these really hot areas well? I did. It's a good question. I do think they are connected because if you look at what the what the what the partnership of the U S it's meant to Ukraine uh in its fight against Russia means uh. That is also what China is looking at when it comes to the partnership between Taiwan and the United States, which is by law, it's not just something we wanted to do, like in the Ukraine, but the Taiwan. There's a specific act that requires the United States to militarily support Taiwan, not with troops, but with you know, advanced weapons systems, by US intelligence sharing. Those are all things we're doing for Ukraine, and it has essentially um allowed the Ukrainians to first repel the assault on Kiev but now come to almost virtual standstill on the Dome Boss and down in the south what they look like they could even take back the Key city or Kersan. So I think that the Chinese are looking at just what how significant being a military partner with the United States is for Ukraine, and highly concerned about what that could mean for Taiwan should they want to try to actually invade, invade Taiwan and make it Yeah. I mean when when when Pelosi sort of vowed America America support for Taiwan. I and I instantly thought of the support that we had for Afghanistan, which was clearly limited. Right, we will support you, but not for longer than twenty years. And then we're piecing out how how do we look right now? Mick as a as a partner globally, I mean, when you think of Afghanistan, Ukraine, Taiwan, so I think it's a mixed bag. So Afghanistan I disagreed, as I did most analysts on the news and most people I know, with the complete withdrawal. Obviously we didn't need to have a level that we've had in the past, but having a residual force I think was the way to go. It did indicate that we were not the partners that we should have been in Afghanistan. But Ukraine, I think it's a different story. Um, it shows that having being a partner with the United States, and we've been considerable as as you all know, amount of resources trying to support them, I think that shows the United States being a better partner. And I think that's what Taiwan is looking at right now and what future partners you're going to look at when it comes to whether they should throw in with the United States. Um, we need to we need to present, and we need to be the partner that we would want and return. And I think going forward we need to keep that in mind every time we make a decision on whether to withdraw forces or support or not support. Nick talked to us about the strike in Afghanistan Monday night, reportedly taken out a senior al Qaeda leader. Give us what that means. I mean, boy, it's twenty years after years after nine eleven. For those of us in New York, it's still very very fresh. But boy, that's a it's a long time to be hunting somebody. Yes, it is. And I think that actually shows that if you do harm the United States, we will find you eventually, and we will you will, you will face justice. And in this form it was, it was a strike, and you know, and and that too is a mixed bag. It does show that, uh, my former colleagues at the CIA can facilitate operations in Afghanistan even after withdrawal. I think personally it was a masterclass and how to do these operations. So my hats are off to them. But it also indicates that the Taliban, including some of its most senior leaders uh and specifically Sara Ja Khani felt like they were totally okay with facilitating the leader of al Quaina, one of the plotters in eleven, living at his house likely or one of his houses in Cobble. So it indicates that Afghanistan is now and that and that giadist Inc. It's going to be a safe haven in the future. So it shows that we can get to you, but it also shows that we have no partner in the Taala bomb. They're not only not helping us on our counters effort, they're actually facilitating Mick. Thank you so much for joining us. We covered a lot of topics that we really appreciate, getting the perspective, the value of your experience at c i A, at the in the Marines and then obviously in a secretary defense as a deputy assistant there mc mulroy, co founder of the Lobo Institute. Alright, a couple of our hack reporters from Bloomberg News not a Rogen Max Abelson teamed up to take a look at Goldman SAXS and you've got a big take story out that's really fascinating. The headline they quit Goldman Star Trading team. Then it raised alarms. Shree, not a rogen joins us here in our Bloomberg inactive broker studio. He's from Bloomberg News. Shree, You and Max did this great story. Uh A pretty a couple of pretty profitable traders left Golden sacked. But Goldman Sacks wasn't letting them go easily, did they Look, It's it's very rare that Goldman Sachs suspects its own of trying to steal code on their way out to a hedge funds. So these are traders. They're not just some guys slinging around corporate bonds. These are like from the block, from their prop trading desk and their program desk. What is it prop trading? That's the word. That's definitely not stop trading, but it is the program trading desk. And you know, effectively, what this group does is it's only a group of about twenty people globally. They craftedgorythms and they are trying to position themselves. You know, one of the key remits of this desk is to do these index rebalance trades. In the last few decades, passive investing is really shot through the roof. Indexes frequently changed their composition, and when that happens, you know that will force changes in these et s and other passive funds that have to mirror the indexes. That gives an opportunity for sophisticated films like Goldman Sachs or a hedge fund like Millennium Management to move ahead of that and know that there's going to be a man coming down the bike and make profits. And this desk, we say in the story, conservative estimates in the last couple of years made about seven million dollars each by itself may not sound like a huge figure, but then think about the fact that this disc is only about twenty odd people. That makes it one of the most profitable desks at least on a purpose and basis at Goldman Sex. It does that sound like a huge figure to me. To me, but here's the crux of the story. Three. The part that gets me is these guys alleged that while they were there and everything was going well, they were beloved and um in in their reviews. By the way, employee reviews are like the bane of my existence. But in their reviews, manople and they were lauded as let me find the exact words here. They were lauded in their reviews as exceptional, impeccable worth work, ethic, outperforming culture carrier. So these were ideal employees. Then the moment they left, they allege that they were warned, Hey, we're essentially going to make you guys look really bad. And Goldman Sachs will tell you that the two things are not mutually exclusive. You could be a great employee and you could do some bad things on your way out. And they say that when someone leaves a team like this, it's it's normal to do sort of customary checks. And they did customary checks and they found what they believe is something alarming. They accused them of trying to of trying to gain improper access to their systems. Ultimately, what is it all boiled down to? They suspected, but couldn't really prove, that these guys are trying to steal code on their way to a hedge fund varish and fund management. In this case, Let's assume their standing assumption is use that code base as reference to build a new system from scratch, and Goldman is very very protective of it. But these guys have also come back swinging, and that's what you normally don't see when you have this kind of acrimony, and it does happen often. You guys know this that banks and their tap when they're departing. It's not always the most amicable situation, but you'd always plays out in private. It rarely plays out in a way where both sides are willing to take such a public stand, not willing to back down convinced that the other side is wrong. The two guys who left believed that Goldman is being heavy handed and out to embarrass them and trying to send a message to the team effectively, this is retaliation for them finding a more lucrative opportunity, and Goldman saying, hold on a second, this was serious misconduct and they must be called out for that. So both of them are standing their ground, but only one of them can be right well. They also alleged that as they were leaving, their managers were begging them to stay, and when that didn't work, said, hey, I would be concerned about your behavior in the past. So that's not about taking code right now on your way at the door. It's like we're gonna make up stuff that makes you look bad in terms of past behavior by the By the way, let me also ask you this. It seems to me, from reading so many of these stories and hearing from sources in the industry that the way it's currently set up um banks have the advantage because all of these disputes, they don't go to court, they go to arbitration, and arbitration is almost always, you know, a good friend of the bank rather than the employee. Is that is that the right way to see it? Historically, that's always been true when when when employees are dragged through the arbitration process, it is really difficult for for for an individual to come out on top. And that's partly how a lot of these employment contracts are written. Banks are extremely protective of their talent. They do realize that there are better opportunities on the bi set, that people are willing to pay more and they have to do more, and therefore these contracts are written with such great latitude that even if you sneeze to their displeasure, they may ding you for that. And that's why you see in most occasions the banks and the institutions always come out on top. Sure, you and Max did some awesome reporting here, what is the expectation how this may play out, this is this is a settlement type of situation. Are they going to go to court? I mean any sense to this stage as things stand, and we talked about it in the story, the lawyer for the two people who's to folks are leaving for the Hedge Fund is actually saying what Goldman has done hurts their reputation is defammetry, and all litigation options are open. Goldman doesn't come out and say that, but one has to assume that they would be thinking along the same lines because they feel these guys didn't cooperate fully with their investigation. They are still very much planning to go join this Hatch Fund, which by the way, wouldn't be till much later in the year because not only did they have to have a three month notice, spirit on top of that, Goldman insists that even the junior employees on the desk and somewhat mid level vice presidents have a six month non compete. That's a nine month gestation period, which is pretty remarkable, especially for a bank. Alright, three some good good stuff. As I'm always jealous of people that get gardening waves because you know that it's always worked out so that they get comp and stage. It's like they're not getting paid. It's not like these guys are CouchSurfing and meantime right they're doing they've done well enough that they can spend their gardening leave in st Bart's. Absolutely, it's no big deal. And that's kind of how I think most players play it out. Sure not a rogen Max Abelson with this fantastic big take story. I highly recommend you take a look at that Bloomberg dot Com slash Big Take or and I Big Take Ni Space Big Take right, just and I Big Take and I Big Take Good Stuff Street. Thanks so much. Let's get right to our next guest, because he's got a awesome name. I just think it's cool, Red Bottle. Uh. He's a founder principal of Public Private Strategies. Hey, Rett, I want to talk to you about this Chips Act because I remember at the beginning of this pandemic, when this whole Mike semiconductor chip thing became something that we talked about here on Bloomberg Radio, that people are saying, oh, the solution is to ensure this stuff, and there you go, we have the Chips Act. A little bit is that does that get us where we need to be. Is this a small first step? How do we think about this? Well, look, as I will forego, they'll gone with the wind jokes, um. But this, you know, this law we we just learned today that President Biden will actually signed into law this upcoming Tuesday, the Chips Act. It's a really good start, um. And really, when you think about the Biden economic agenda, you have to think about all the pieces. You have to think about the American Rescue Plan, which was pasted earlier this year, the Bipartisan Infrastructure Deal, and now we have the Chips um Act, which which will be signed in law on Tuesday. And it's a really important part of not only bringing these jobs home, but it's an important piece for American competitiveness in national security. The reality is, over the past few decades, America has has been losing sort of the race to make these sorts of things at home. And there's the semiconductor The chips have become such an important part of our daily live and so this is really a good start making an investment here at home, um, that that we really believe will create you know, good jobs here at home as well as make America more competitive. So how can listeners reat um, you know, investors get involved with public private partnerships the best. Yeah. Look, I mean I think you know, learning about what's in the chip SACKED, I think is is really important because it's going to have a large impact on the market. Uh. You know everything uh that that we kind of do in our daily lives, whether it's the car we drives or you know, obviously the computers and the phones we're using. Um, all of those things rely upon you know, these important chips UM. And so you know, as the law begins to roll out, I think we'll we'll see some guidance come out from the government about what that would look like. There's a number of companies, obviously, you know, large manufacturers who already sort of making plans around sort of these investments. But I think we'll see ripple effects as well for for small companies and investors who are looking at it. And so, you know, we're at the piece now, we're sort of getting the implementation of the law is where we are. So folcus just continue to watch and monitor and I think that that will allow them to sort of plan appropriately as they're they're mapping their strategy out for how to invest in how to be integrated in But we sort of investment. But what public I mean, um, what public private strategies? Uh, what are you doing at public private strategies prior to the Chips Act? You're you're doing public private investment already, right, So what do you think that the best opportunities are that we can get into now? Yeah? So look, we uh you know, we work with business leaders to get them engaged in public policy. Right, and so the idea behind our organization is making sure that, you know, business both large and small, has a voice the public policy table. And I think you know, increasingly as we've been focused on economic recovery. Um, you know, business has played sort of a crucial role um in particularly in the policy and the political process. We're seeing that, you know, business has an outside voice in this moment as people are rethinking the importance of institutions and so, uh, you know, we are we are working with business leaders to make sure that they're shaping not only the passage of laws like the Chip SACK, but also the implementation of what that looks like. So ht it. You know, Eventually this comes down to economics, and a US made chip will never be economically financially competitive with an Asian made chip. Is that is that the assumption, and so therefore this is a long term public private kind of situation. Yeah. I don't know if that's necessarily the only assumption. I mean, I think that the reality is is that um uh, you know, we used to do quite a bit of this at home, this sort of manufacturing around forty percent in previous decades, and that has gone down to ten. I think what this does is it allows a few sort of things. One is it it allows companies to take advantage of investment in a in a smart way. Um. And I think it Uh, it creates good paying jobs, right, these are jobs that are going to be created to sort of create these chips here at home. Um. But it also has national security implications because of the important role that these chips play. And so I think, um, you know, in the immediate uh, it sends all the right signals to the investor community about sort of the sort of investments we want to make here at home. And in the long term, I think it has a long term sort of tangible benefits for jobs and communities as well. I wonder how I see that you've worked not only for the who's who of the Democratic Party Obama, Clinton, Biden, but also for Republican Governor Ald Schwarzenegger. And I was thinking it's got to be important, especially on the private side, that these um deals are kind of bipartisan or or or are not partisan at least, Right, how do you deal with that? Because, um, when I put my money into something that's gonna last for ten or twenty years, obviously they're gonna be different administrations in and out. Yeah. Look, I think these sort of long term investments sort of lived beyond politics. And I think, you know, we we're living in as I don't need to describe to you all, you know, in a hyperpartisan environment in Washington right now. But the reality is this, this actually, uh you know, it took a while to get negotiated and find the right assentives, but this is another bipartisan you know, piece of legislation. So we saw a lot of Democratic and Republicans support for this. I think you see on the fringe, you know size not a lot of uh, not a lot of interest in something like this. But you know, for folks who are making you know, long term investments, I think this is the sort of piece of legislation we want to see because it sends all of the right signals, I think, to the business community into the market about where we need to be investing. UM. Similarly, we saw the same thing with the bipartisan infrastructure deal. You know, that was one of the largest investments in our country. So you know, there are signs, there are signs out there that bipartisanship can't happen in the legislative process. And I think, you know, for folks who are thinking about investment strategies, pieces of laws like this are our important signals. Alright, great stuff, Red really appreciate you taking the time. Rhet Buddle, founder and principle Public Private Strategy has also senior fellow Aspect Institute. Now we're gonna talk about emerging markets here because the hot topic of what happens to other economies when the dollar rises, Well, it's a study that we can see right before our very eyes, incredible dollar strength. UM the Fed on a hiking uh bent right now. That looks set to continue. And UM it's had a real effect already on emerging market assets. Nick stap Miller is in the studio with us. He's an emerging market strategist, the director Emerging Market Strategy at Medley Advisors. So, nick uh, this is just such a fascinating um uh thing to watch, phenomena to watch, and it doesn't look like it's going to change anytime soon, right, this dollar strength. Yeah, and the problem that emerging markets have from that is, of course stronger dollar means a weaker local currency and then the cost of imported goods in the local current sea and everywhere from Brazil to South Africa to Poland and their dollar debt, right, the dollar debt, But that's mostly a corporate issue. A lot of the larger emerging markets have much less effects that at the sovereign level than they used to. That's really more of a friends here at the Sri Lanka's Sub Saharan Africa that are really getting hit on the sovereign debt side. Are we still talking about bricks? Is that Jim O'Neil's term, right, Brazil, Russia, India, China and Sri Lanka. I don't know what the ass is for. Well, it's kind of split up because you know, of course, China has sort of taken a seat at the table among the major economies. Russia's more or less cut out of the global financial system. UH, India is still developing and growing pretty fast. In Brazil, you know, ever since Bricks came out, has really been a massive disappointment for a variety of structural reasons. They've just undershot any sort of expectations or hopes for the last fifteen twenty years. Want you mentioned Russia? Sart you mentioned Russia? Give us a sense. Now all we read about is the civilians, is all the sanctions and so on and so forth. What does it mean for you as an emerging markets investor? Can you put money into Russia? Do you even think about it? Well? No, it's changed a lot. Uh And you know, one of the countries I covered pretty closely is Russia. And you know, eight ten months ago people are actually playing the currency, playing rates there. There was an interesting rate hikes story at the Central Bank and then that all just disappeared overnight. But there's huge macroeconomic implications for what they're doing because they're still exporting energy and of course the geopolitics around the energy, but they're also accumulating record current account surpluses, and that money is not safe with the store in dollars or euros so they're looking for alternative ways to deploy that kind of point. I mean, where do they put it? Well, the only options we really have are no No G seven current So basically, I mean in theory, gasprom Bank can hold dollars in Euros, but it's always at risk of being sanctioned any day. So the Chinese you want is one option, and you've started to hear some discussion from Russian officials that they would like to invest in what they call the currencies of quote unquote friendly current countries. UM Gold is another option, but the market is probably too small. I mean, you know, we're talking about like twenty billion dollars a month UM, and more recently they've actually announced a twenty billion dollar nuclear deal to build a nuclear power station in Turkey. So you know that's not enough. They can't build one of those every months. But you find a country here and there that takes some money and it starts to add up and I guess right. Uh, My director Wan Torres reminds me that the S is for South Africa and UM with with respect to the other countries in the bricks and and other emerging markets that you follow, what are their central banks do to fight inflation when they're importing so much from the stronger dollar. I mean, are they just in a rush to raise rates as faster faster than the Fed? Yeah? Well, you know the story I think last year and this year is some of the emerging markets, UM, Russia actually was in this boat. Chile, Brazil, UM were much more aggressive and starting the rate hiking cycle. And a lot of these countries, I mean, Russia has been tossed out of the equation for a variety of reasons, but Chile, Brazil, Hungary, UH, and a couple of others have kind of reached close to the peak of their cycle. Whereas the Fed, as we know, you know, they say they still have quite a bit more to go. And now they have this double with me because they have essentially slowed growth through this massive hiking cycle in these central banks in emerging markets, and now they're starting to worry about growth. But the FED is still hiking, which has implications for the global economy, global dollar liquidity. So they're basically getting double tightening, uh, you know, into the slowdown, and they don't really have as much room to cushion their economies. Alright, staying a little bit on the Russia things that just fascinates me. I mean for your emerging markets in Eastern Europe, Poland, Hungry, you know, and obviously we we talk a lot about Germany. But for some of these emerging markets, how bad is it going to be this winter? Are the are the markets telling you that, boy, it's gonna be tough to to be a you know need some of these Eastern European economies come this winter. Yeah, Well they have you know, two risks here. One of course is the fact that Poland, check and Hungary are massive trading economies. Exports are like their gdp UM, so you know, huge trade there and slowing Germany is slowing Western Europe, that's their primary export market is going to hit activity. But then also you have the gas dependence, and now Poland has done a lot to lower its dependence on Russia over the last few years, but they still buy a lot from Germany and who buys from Russia. Hungary is the really fascinating one because they have actually, uh they sent the Foreign Minister to Moscow to inca deal to buy more gas via turk Stream. So it basically goes over the Black Sea through Turkey and then up across Serbia and into Hungary. Now, if you get a scenario where the Russians cut gas to Western Europe, you know they cut nord Stream one and then the Hungarians are getting gas through this pipeline, I cannot imagine the Europeans are going to be happy about that one bit. Yea yeah, I tell you this winter, Matt is going to be just a real, real issue for all of your Hey, Nick, thanks so much for joining us here. Nick stat Miller, Director Merger market Strategy for Medley Global Visors, joining us live in our Bloomberg and Actor Broker studio. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews with Apple Podcasts or whatever podcast platform you prefer. I'm Matt Miller. I'm on Twitter at Matt Miller on false Sweeney, I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio.