18 Burst results for "Mike Mayo"
"mike mayo" Discussed on Bloomberg Radio New York
"Is a Bloomberg business Flash. And I'm Karyn. Moscow. US stocks slumping after earning showing the biggest tech companies disappointed investors concerned a slowing economy will dampen profits. The NASDAQ is leading losses among major US Don gauges. After Apple's iPhone sales and twitters user growth, both missed estimates The Google parent alphabet jumped after reporting a rebound and digital advertising We checked the markets every 15 minutes. Throughout the trading day on Bloomberg, the S and P 500 is down 8/10 percent on 27 points at 32 82 that out Jones industrial average down 7/10 percent or 183 points. 26,478 and the NASDAQ's Down 1.5% or 171 points at 11,013. 10. Year Treasury Down 3 30 seconds You'll point a 3% of the yield on the two year 20.14% 9 X Heard oil down 1.5% or 52 cents a 35 64 a barrel Comex gold is up about 1% or $17.60 in 18 85 60 announce. The euro, 1.1683 against the dollar. The yen inside 104.52 and Apple is down more than 5% this morning Twitter down more than 17%. Google is up almost 6% Exxon Mobil, warning it may take up to $30 billion in write downs on natural gas fields as crashing energy demand and prices spurred a historic losing streak. It. Shares are down more than 1%. And that's a Bloomberg business. Flash Tom and Paulie carrying things so much. It's stereotype Friday, Paul Sweeney and Tom Keen hearing blower surveillance. Paul is going to drag in here, one of the most acclaimed bank analysts out there. The gentleman at Wells Fargo. But Paul the stereotype of the moment it's always the same. And our good friend destroys it in his research. No, Here's the stereotype, folks. Democrats are bad for banks. Democrats, This goes back. It's a least back to Grover Cleveland, Alexander and maybe back farther than that. Democrats are bad for banks introduce our guest, Paul Hi, Wilton. Mike Mayo, Wells Fargo Security Senior analyst covering the banks, You know we know him. He's been all over these banks for decades. Mike, Thanks so much for joining us here. We're just days away from an election that may herald a change in the White House may herald a change in the Senate as you sit back to look at your universe of big banks. Do you care what you telling your investors? Well, Tomorrow is Halloween and we say, Don't be too don't be too spooked by the election will be a little food but don't be too spooked because for banks, the economy transcends the presidency. And as Tom pointed out, it's surprising is bank stocks relative to the market have perform better under Democrats and Republicans the last three decades. If not longer, we're not going to confuse correlation with causation. But there's three bigger factors at work here. One In this case way don't think it matters who wins. There's going to be a lot of government stimulus ahead, and that should increase the yield on the 10 year. Second, what's under appreciated? The last. Thankyou All was drafted by the Democrats. And for the most part, it's made banks much more resilient and third. Good economics is good politics, whether you're a Republican or Democrat. I like that good economics is good politics. So, Mike, you know if we think about the banks and just looking at the S and P bank index down about 36% year to date here, is there a scenario with this interest rate outlook? Or big banks, stocks could perform. Well, there's a lack of a catalyst, but we think over 1 to 2 years of people investors are looking in the rear view mirror to the global financial crisis. What do you know? I was very negative then. And I'm super Super positive. Now they're 1 to 2 year. Horizon Even if rates stay low. We think that the banking industry can have a peace dividend once the war on covert is 1 $200,000,000,200 billion And that would get their return back Tio favorable levels that would increase the stock prices move. Now It's perception is unhinged from reality. Like I know what is their use of CASS cash position? Not like thanks quarter but two years out three years out, five years out. We always forget how big these banks are. Are. They also going to have big cash to deploy to shareholders? Well, look, the last four years has not been a better roses for banks. I mean, these low interest rates have been attacks on banks like you've never seen. The Federal Reserve has been Super tough hard as nails on banks in prohibiting increases and did it end or allowing buybacks, But we think you know sometime next year, the Fed will recognize the strength of the banking industry as we get through this covert period and then when banks resume their share buybacks or dividend increases. We have that around the middle of next year. That certainly could be a catalyst and look from the bank stocks Yield 4% in a very low rate environment, bank stocks are really like a news that what we say Bon Bon proxies. For gotten, you'll play. Boeing employees. Exxon employees are the bank's gonna pair employees. There's no choice. I mean, this is a multi decade reduction in revenue growth accelerated by the pandemic on so if you want to join the banking into through the financial industry, you're going to be joining a shrinking one, especially as technology takes over more more time. We've talked about this before, but you're seeing an acceleration. In digital banking. You're seeing acceleration and the use of technology on the whole cell site closing deals you know, through using zoom and so headcount reduction has toe happen. A lot of cases people be redeployed when they can..
"mike mayo" Discussed on Marketplace with Kai Ryssdal
"Expansion plans has to go into kind of contraction mode. That's Kathleen Smith Renaissance Capital. She says that often means putting off hiring hiring. Maybe even layoffs plus the lawyers that prepared documents the accountants do the audit work they don't earn feats and so it does have an effect on. Really Konami when the IPO market starts to shut down investment banks also play a big role in the IPO process in our millions and fees Mike Mayo Bank. Thank analyst at Wells Fargo Securities says the week. IPO market comes at a time when banks are making less in other departments like bond and Stock Trading so if the IPO slowdown lasts awhile Mayo says banks could start cutting costs one half of bank expenses are what employs make and the number of employees so you could see some a reduction in compensation calls companies are also questioning the IPO process itself. Some are starting to list their shares directly on a stock exchange that lets them bypass. The investment has been banks to help shepherd traditional ideas. POLKA drowsy is a partner at the venture capital firm S. K. ventures whenever you get underwriters investment banks involved in the process that they charge high fees and have an incentive to under price the offering because that does a favor for their investors direct listings aren't for everybody they raised money for private investors by letting them sell their shares but don't create new shares that would raise money for the company itself. AIRBNB is reportedly thinking about going public that way in two thousand twenty in New York. I'm Justin how for marketplace.
"mike mayo" Discussed on First Things First
"They were using me the right way and you know i still think he's gonna talk more about the giants throughout this season at least if not later in his career onto antonio brown the drama possibly be a thing of the past a._b. Returned to practice with a new certified helmet jon gruden says says there's no more need to worry. It's a certified helmet vic so he's he's all in ready to go. That's my understanding and it really happy to have him out here. He's is a great player. He's <hes> showing great retention of what we're doing. Ed missed it in this off season program. He's been here out here in meetings and it's just good to have them back but he's he's in great shape. He's running hard and run a good routes artsy artsy. Are you buying with jon. Gruden saying that that is all in now no because two days ago gentleman mike mayo and i'm pulling for mike guys like him guy came from t._v.'s worked his butt off and now he's got an opportunity to have the first big acquisition to blow up in their face no aluminium tariff into and he said no now's the time to find out if he's all in or not when i gave him how much guaranteed money already million dollars guaranteed so i give have you thirty million and then i had to ponder the question several months later. Are you all in or not so no. I believe the little kid realized that he couldn't destroy the playground so he's like okay all right. Let me try to figure out another way. He loves football so the threat of him not playing. I didn't think that was a a threat at all but utilizing that helmet he the the bottom of the story is man. He don't think the helmet looks good on all right. It's not with technology. I'm just going to tell you guys all right behind the scenes to the n._f._l. It's not the technology. It's not that i'm perfect not division because the new helmets had mostly homeless they have better vision asia and then the old home. It's about a bigger right it. Don't they are a little bigger drew. Brees talked about makes you look a little moonshot and everything but drew brees said if it safer than i'm going to utilize so it's not about that so there will be other things. He is a phenomenal football player but right now he is the number number one in all the sports man and he is loving it. He likes it like an everyday. He breathes it. He's great. He's a great football player and i'm hoping that we're able to talk talk about that but to think that oh this is over with oh no no no no no no we just this is just getting started. No it's not over with because he filed another grievous earlier earlier this week and i think he's got to hearing for that on friday so we'll see how that works out so clearly a. b. hasn't moved past it. Even though he's back on the practice field i just think this is one of rotate that we need to put to bed sooner rather than later as the point you made about what they did in terms of committing to him making a trade given the steelers a third round pick in the fifth round pick and giving him the contract extension with him being on the other side of thirty..
"mike mayo" Discussed on P&L With Pimm Fox and Lisa Abramowicz
"Well, I it was China then Mexico, perhaps, now India, maybe even Cuba trade tensions between the US and some of its biggest partners are escalating to get a sense of what this means for the global economy. We welcome bread Setzer. Brad is the Stephen A Tenenbaum senior fellow for international economics at the council of foreign relations. He joins us here in our Bloomberg interactive brokers studio. Brad, thanks so much for being with us. Let's start with China. Just I mean, that's probably the most developed story, I guess, if you will, and we've had. Negotiators going back and forth, but tariffs are going back and forth, where do we stand? Now how do you think this might play out? So I guess, at this stage might baseline is that Trump will carry out his threat to put tariffs twenty-five percent on all trade all imports from China right now. We've raised tariffs on two hundred and fifty billion to twenty five percent. And there's about three hundred billion of trade, left to tariff, mostly electronics mostly close. Most of the industrial inputs have already been tariffed, so given your experience and you have extensive experience with even the treasury department analyzing the economic impact of things like tariffs. What will the fall out be from that base case in terms of economic slowdown or points off Chidi p for both the US and China? Well, the impact is somewhat larger on China. I would put the base estimate for the overall impact of the full on samba of tariffs and not the incremental effect on the us, and about a half point of GDP just, you know, you're paying more for imports. There's less money in the economy to buy other things, and then the impact on China because trade is more important to the Chinese economy is probably twice that so about a point that assumes no policy response. And I think, you know, the market certainly the bond market is increasingly intimidating that the fed will try to offset some of the impact Chinese policymakers will certainly try to offset some of the impact, what is your sense of? Do you have a baseline case on? How you think this might play out? Do we get an agreement when do we get into agreement? What does your thoughts? What are your thoughts there? Well, right now, there isn't an active negotiation between the US and China that negotiation broke down about a month ago when the president tweeted that China was walking back there off her and threatened and then carried out the threat to raise tariffs from ten to twenty five onto one hundred billion the president and president. She will have a chance to meet in Japan at the end of June. The twenty. They could agree on a new negotiating process, and likely in that case they would agree, the president would agree to defer, the tariffs on the further three hundred billion maybe China would agree to some goodwill gestures, and they would go back to the negotiating table. But I don't at this stage, a scenario where they would reach agreement in June to walk back the existing tariffs before we shift to North America because the trade tariff, tension is picking up here. I'm wondering who is the beneficiary. If there are any beneficiaries of the trade between the US, and China well at the biggest beneficiaries to date have been other Asian economies, which can substitute for Chinese production. So there's been a big pickup and imports from Vietnam. For example, over time, you would expect to see a broader set of beneficiaries as supply chains just one of the biggest potential. Beneficiaries to pivot to North America is Mexico, but it's a little hard to make a decision to orient your supply chain away from China and towards Mexico. If you're intimidating tariffs on Mexico, too, so it seems like it initially it was just the US and China and you could see some of the longstanding issues here, but the Trump administration seems to be expanding their tariffs expanding there. Commerce policy to Mexico for other reasons, maybe four to India, maybe two maybe other parts of Europe. What do you think that strategy is of this White House? You know, when you said Trump administration, I immediately thought, what we're really just talking about President Trump. Okay. President Trump seems select tariffs, and I, I don't think it's more complicated than that. There's been abundant reporting by every major news outlet that the bulk of the administration, including the US trade Representative Bob lighthizer were opposed to the use the latest tariff threat against Mexico. This is the president and the for now. The president likes tariffs. So one thing that I find interesting is that China is the world's second largest economy. And yet, the way that markets seem to be responding is much more severely to the threat of Mexico tariffs on the US economy than tariffs on China and the effect on the US economy. So given your history and experience doing economic analyses of tariffs and trade issues. How much more of an impact would the threatened tariffs on Mexico have on the us economy? There's probably three important points to make here, the first is that if you sum up imports from Mexico and auto imports, which the president has is threatening from Europe and Japan and Canada. You get a total of about five hundred billion, so it's roughly equal inside is to current imports from China. If you look at exports, the US actually exports proportionately more to Mexico and to Europe than it does to China. So the opportunities on the other side for retaliation are stronger, but I think the third and probably most important point, is that the president has threats against China emerge out of a standard. You might say trade process, three oh, one complaint. That was derived from longstanding concerns about Chinese commercial practices, the threat against Mexico, materialize out of the blue it exerts presidential authority for a national security emergencies and tries to use that thority to essentially raise tariffs in a week at the whim of the president in a way that hasn't been done before. So when the market has to set are suddenly fat. Factor in the increased uncertainty as well as the direct threat. So, in other words, it was maybe perhaps, not that the economic impact would be that much more on the Mexico terrorists. But that it had not been priced into the market in any way. Is that accurate? I think two weeks ago, the baseline assumption was that there was going to be a fight about ratification of US MCA, but there weren't going to be tariffs on Mexico, obviously, that baseline assumption has been. Overturned guacamole tequila, corona. I mean some big issues for the economy. I mean, the, the really big wine from set aside, the avocado issue and the corona issue the big one is auto parts, par. Absolutely. Brad said, sir. Thank you so much for being here. Always fantastic to have your perspective. Brad Setzer is the Stephen A tanenbaum senior fellow for international economics at the council of foreign relations. He's also a senior adviser I'd exonerate data. He also just to give you a sense served as deputy assistant secretary for international economic analysis in the US treasury department from two thousand eleven.
"mike mayo" Discussed on P&L With Pimm Fox and Lisa Abramowicz
"Well, amid rising trade tensions the s&p five hundred down about four percent from its recent high, but it's still up about twelve percent for the year to get a sense of where we go from here. We welcome. Our next guest, Ken Fisher can founder, executive chairman and co-ceo efficient investments, but one hundred seven billion under management. Joining us here in our Bloomberg interactive brokers. Studio can thanks so much for joining us talk just a little bit about that volatility. We've seen recently how how do you factor into your outlook? What appear to be rising trade tensions with some of our biggest partners, China, Mexico? Maybe India had us factor into your outlook. So what I tend to always want to think about is current perceptions versus future realities, and I'm always trying to measure sentiment versus what I think, is the scale or measurable size of a good or a bad ahead. And so when I think about all this, I just. For example, in trade war issue, which is really tariffs in a different way you just total up all the tariffs that might be applied your member. That they're not all gonna get applied. Then you actually remember that there's going to be some substitution that I buy this instead of that. So I don't get that higher price. And then when you think about that, you say, how big is that compared to GDP, and you can actually total them all up? Nobody ever does that. But the scale is about if they were all applied, and there was no substitution effect at all still about one percent of global GDP growth. So I'm one percent, global GDP excuse me about a third of a normal year GDP growth with no inflation. If there's some inflation be even less. So the impact of that is smaller than people think it is. It's big fear over a relatively small negative and big fear over a relatively small negative still fits within the framework of a positive. It's easier to see the big fear of a false factor as bullish. But big fear of a little negative is also polish. I see like US stocks here. So there's a big feature going on that nobody notices that helps US stock, which is right now I can borrow money in Europe short-term at basically zero and I can lend it to my own firm in America, and then turn around and lend it back out short-term with the currency hedge. And I got two and a half percent. Whole, I can drive a truck through and if I can do that, so can every major Bank and every major global corporation in the world, and they are, and people don't seem to notice that we're getting funded by Europe and Japan right now at a huge rate and nobody talks about that. It's the reason why in a world where are relatively flat yield curve, America's relatively flat yield curve that everybody squawks abouts block block walk. Ankle is in. That's me is, in fact, in parallel with a perfectly reasonable growth in the quantity money because the banks are still lending, because they're able to get funded out of Europe and Japan, and nobody really thinks about that. You don't think that city or J P Morgan or knows how to borrow in their European operations and lend out in America? So are we long buying in banks? I wouldn't focus too much singularly on banks because banks typically are late cycle laggards. They're really not growth companies. But the reality is, this is an argument for America. It's America's getting funded and people don't even notice it's getting funded. Nobody talks about that anything that's big that people don't talk about to me, that's important that the fundamental reasons to be optimistic about Europe, in a different way that nobody talks about. But the reality of what's going on is that people are afraid of that yield curve. And yet, it's really the global yield curve that matters today, not the US yield curve, or any other single countries yield curve, because the ability to borrow and one place in London and other I that one reason why people don't talk about that is because it sounds relatively simple to you. But there is another way of saying that which is this is the reason why yields have stayed so low in the United States because there is a sort of divergence in this sort of relative. Relative game that's being played with Europe and always right. Always, but then, but then let's play that a different way because I can hear nearly endless chatter about what should the fed do. What will offend do what's going on with the fed that set of which I'm largely fed up? And the fact of the matter is the fact of the matter is that let's say that country to everyone's expectations, which, I don't expect the fed raised rates right now. What would that do that would accelerate borrowing from overseas into America? But if you think about them, reducing rates right now, if they were to do that, which, I also don't expect them to do. But if they did that would reduce the spread that would motivate folks to be borrowing overseas and lending into America. So in that regard, you could say simply which I've always believed that the fed is less important than people think it is. That's not to say it's not important, but it's less important than people think it is what happens if there's a major move in the dollar. I mean, does that disrupt some of these changes, if there's a agree with that, but let's just go back to a crisis if? Darn crisis you've ever seen in history. No real exceptions. The dollar goes up not down. And the fact is what has been happening as we've gone through this year. The dollars been strong. Why has the dollar been strong because money's been flowing from those other places into here? You mentioned Europe someplace that you might have an interest. Why would that be? It seems like there's generally weakening economies, their uncertainty of Brexit. What draws your attention to Europe about seventeen things from Sunday? But let me start off with just a couple of more important wants good since we don't have we don't have. Between now and Sunday. The fact is a good back to America for a second. Third years of presidents terms have been positive ninety one percent of history since the nineteen twenty s because the midterm elections give us gridlock, governs would in active, and what's otherwise, the moving obstacle course of regulatory and legislative change turns into a stationary obstacle course and businesses become more willing to take risks as they can maneuver around the stationary obstacles, or the more. Stationary obstacles, relative to the prior moving ones. We have a similar thing going on in Europe that people don't get into ways. One is that parliament's across Europe have had their ideological spectrums completely pancaked out like a bell curve pushed down in the middle out on the edges and coalitions agree on almost nothing. There's almost complete gridlock politically across all of western Europe. Secondarily, just like American elections there elections. They just had a few weeks ago, actually, not even a few. We've had eight of before the history of the. Aftermath of those elections in the next twelve months is overwhelmingly positive only once it was negative the very first one, and it was only negative two point six percent on average. They're positive eleven percent of the next twelve months, because you get that same feature, which is that people fear, just like they feared what if those crazy populace take everything over. And then, in fact, the fears of the election, ended up being less bad than people feared, and you get a more stable world than the more stable world markets like that better than they expected expectations versus realities. Always the game. And I expect both of those two political features to play in Europe. Then the final point just look last night is across Europe came up better than expected in almost every single country, almost every single, and particularly people focus on negatives and manufacturing is when they don't focus on positives and services PM is and yet services, three times the size of manufacturing across Europe. Ken fisher. Unfortunately, we're gonna have to. Leave it there. Although I'm going to have to lobby from here till Sunday for the next time because it's fabulous having you on Ken Fisher founder, executive chairman and coach even vestment officer of Fisher investments. With one hundred seven billion dollars of assets under management. And today's volatile markets investors. Need resilient portfolios to help handle the pressure through decades of expansions, recessions, and changing interest rates coins, have turned to pimco to.
"mike mayo" Discussed on P&L With Pimm Fox and Lisa Abramowicz
"That's when you had paisley ties Forrest Gump one the movie kademi award best picture. We had Bill Clinton Boris Yeltsin with do. Poop poop, poop. And that's our time machine. But we Springsteen Tom Jones. Always Springsteen reference. All right, so bay. Don't forget about the Bank. Stocks. Really well. And look back then like today you had efficiency improving to new levels, then it was from the threat of takeover today. It's technology digital banking AI and cloud and blockchain and all that it's really paying off the other parallel would be deregulation. Actually Bill Clinton, led some deregulation for the banks. Don't forget that today. It's streamlining from the regulation that's already in place. Oh, and also it was the end of a fed tightening cycle. Just like today, regardless of whether the fed cuts rates are not. It's the end of the fed tightening. I think we can all agree on that. So you have some parallels there. In addition, the Bank, stock valuations are cheaper today. And in addition, as opposed to the nine hundred ninety s when you had to worry about what Bank was going to pay what price for what target today, banks are returning record amounts of capital, and you have a major industry vent this month. That is the fed stress test and approvals for bank's return capital. So there's a lot going on to the Bank space. And there's still a lot of recent CBI's. I say recently bias from the financial crisis. Everyone's like, oh, banks are going to blow up. I'd call that healthy paranoia, the more everybody's concerned about Bank blowing up the less likely it is to occur. So this is a very good time for the Bank stocks, so Mike. How about just in terms of the returns that the big banks can generate today? Have investors really ratcheted down their expectations given the regulatory overhang that's been put on the banks after the financial crisis, the days of fifteen or twenty percents are always investments said, okay, I know I'm not going to get that, but let's reset from here. Well, what we did in our report. We said, what would the Bank returns be if banks had the same leveraged, as they had before the fantail crisis? And in a couple of years, we think, on an apples to apples basis banks, we'll have the best returns in history again after adjusting for leverage, but absolutely investors and the stock market and the public has reduced their expectations for banks. That's why they're so inexpensive civic groups trading at tangible. Value that historically other than the financial crisis. That was a recession price. So you have a recession price with that every session, so your pricing in a lot of pessimism. Okay. So let's talk about some of the pessimism yield curve, flattening depending on what you look at inverted inverted for Dayton, which is reading alarm bells in some places. If you look at three month tenure gap, why is this not a problem? Well, that's not ideal all else equal, you have a rate headwind to the banks, but it's a matter of degree. So if the fed were to cut twenty five or fifty basis points, some banks, earnings could be hurt by one percent on the other hand reduction in interest rates is really good for credit quality, it could help a more risk going attitude, that could help fixed income activities, and you have to look at the offsets and Steve broker would also be pretty good for the Bank. So we feel pretty good with where we are second pessimistic thought we are getting to the end of this credit cycle, which would be basically an idea that would be legitimized by the fed cutting rates. We're seeing loan losses pickup. Consumers and corporate. Why is that not going to be a problem for the banks? So you're contributing to that healthy pessimism. Absolutely one hundred percent. Well, come on a lotta Hewitt, the responses are because this is these are the arguments that people are putting out there. No. I think it's fair look credit losses or going higher for the largest banks. We have credit losses almost doubling over the next four years. That's not news. In fact, if we're wrong it might be because credit losses. Don't go up as much as we expect. Oh. And by the way newsflash in a low rate environment. It's easier for people to pay their bills. Another very important point. There are issues out there. Certainly a lot of people are talking about leverage lending and activities by private equity, firms BBC's reads the nonbank financial players. The talk of the town, that's the chatter, but when it comes to the banks themselves, they've gotten a lot more religion. The boards are asking questions every time, somebody hiccups, everybody says are you, okay? It's like a regulatory swat team swoops in. So I say thank you regulators because regulators. As opposed to before the financial crisis. Now they give you a little bit extra confidence that banks are not going to blow up. They'll be blogs, but it's less likely that will be the banks, even though loan losses are going higher. How about the capital markets business? We've seen really rocky fourth quarter for the big banks in terms of their capital markets, deaths, not that much better than the first quarter what's going on there? They lost their touch. Or is it just the lack of volatility? Sometimes when you've got volatility, they say, it's the wrong kind of all toady can nappy a driver of earnings for the banks. The I always loved that one. Like, when things aren't going. Well, that's bad volatility, when things are going good volatility. So look, if not recovered in the trading businesses the last few years like you might have had expected. Look, some banks recently guided that capital market activities won't be that strong in the second quarter so t- extent that you get kind of good volatility backers. You have a lot of chatter in the markets, generally, whether it's trade with Mexico or China. Or brexit. And a lot of activities. So we've yet to break up, but I would say our earnings models, we're not expecting much gross. So I think the markets cut-price that out if it were to happen. It'd be a kind of a call option on the upside. All right. So Mike, you highlighted city group, followed by Bank of America, and then J P Morgan Chase as your top trades within this bullish Bank stock call are there, any banks left out. You know, this is a twenty five year structural breakout for the benefits of scale, one nine hundred ninety four. The national banking in the US was permitted for the first time it didn't work out, so well for twenty five years, you had a financial crisis regulatory change systems issues. But now the largest banks are capitalizing and being national banks. I mean going back, then I used to have to get traveler's checks. If I was going to California, right? Like it's and you'd have to switch banks. You're going to college. You're moving home. Now you can have a Bank for life, the concern, though, who could be left out as scales, making more of a difference than ever before, especially with technology and marketing who's left out. It would be the smaller banks. So the biggest question that comes up more than ever before, is the smaller banks at what point could they have franchisee Rosen? Now, look, a lot of small banks have very good service. They have certain select businesses, they can perform, well, so as an individual basis, you can find some good one for as a group you start to wonder like the corner deli when what? One of the, the big help me I here in New York. Or, or even fair way that you could tell I don't do. The shopping in my family is well, I'll tell you about this stores. Really interesting. I mean, one question that I have just going forward is, you know, are we then going to see consolidation and how long is this sort of secular bull market can last? Well, we thought you'd see more consolidation already. I mean, BBN's SunTrust, we liked that merger big overlap to banks in the southeast of really getting a lot of synergies. So that was good. And once we saw that, I mean, what does that say about banks? Number ten through five thousand if they have enough scale if these two banks, you know, had to merge. So there's a big question we haven't seen it. And I think the problem is there's more buyers and sellers everybody every Bank wants to go ahead and buy. So the other issue is the change in political administration. It might not be as easy to merge, depending on what plays out and the twenty twenty presidential election. So if you're a Bank management and you want to pursue a Bank merger merge now. Otherwise, it might not be so easy later on. Mike many thank you so much for joining us. Mike mayo Wells Fargo securities senior analyst covering the banks with his note about how it might be the.
Big US bank CEOs grilled on Capitol Hill: What does it mean for the markets?
"We start off with the banks near their judgment day. The CEOs of the big banks revived me a grilling on the hill as they Europe earnings at the end of the week. JP Morgan will kick things off on Friday. It is the worst performing of the big banks. So far this year up elite percents CitiGroup. Goldman Sachs Morgan Stanley. They're all up double digits. Of course, the sector has been mostly dead money for the last year. So we'll miss quarter's earnings be the catalyst to set the financials on fire guy. Well, I think the question is. Yes, I just don't see it happening. I for the life, man. I don't understand. How all of a sudden you get this reacceleration and earnings for the banks and they're going to be off to the races. Now. I think earnings it'd be okay earnings have been fine J P Morgan Cernan, quite frankly, have been very good. But what's already priced in? When you're getting towards one point eight times price to tangible book in terms of J P Morgan I said, maybe it's just a tad ahead of itself. Yes. S up the fallen question. Why CitiBank trading effectively tangible book, why is toy shop Bank in Europe? Despite this whole Commerce Bank thing continue to go down. I still think the banking woes in Europe at a certain point manifest themselves. Here resident Bank bullet, he's got another reason guided to to really be angry with the fed. It's look it's negative interest rates that I think are killing the global central banks. It's certainly killing the European banks and for someone that's been constructive longevity. Morgan, I'm won- CitiBank. I'm long Bank of America. And I can be long with those valuations with a capital deployment approach now that I think is actually investor-friendly. With a balance sheet that's fantastic with a business model that I think is conservative and not reckless. And so, but is there going to be anything extraordinary in? This course numbers. No. And in fact, I think you're gonna see downward tick in terms of their net interest margins. You can see downward ticket sales and trading. You're gonna see a downward tick probably in mortgage origination. But nonetheless, JP Morgan continues to print record profits record profits. You brought up a good point that they're they're, you know, there's nothing special about the Bank threatening to their kind of safety type of thing. They're utilities. That's affectively. What they become as utilities, so they should trade at one times book. So if you look at the ones that aren't trading at one times book, it's J P Morgan the ones that are. It's a CitiBank CitiBank might even be a little bit below that. So that's probably why it's up more than the others are one of the leaders this year, the only thing in my view that is going to change this. If you get a steeper yield curve, and that can happen to as the economy accelerates, which it doesn't look like it's necessarily gonna do or the fed decides to steepen the yield curve by with their balance sheet. So to me, that's the bet your. Making if you're buying banks right now, here's absolutely nothing. That excites me about the banks right now. It's really really difficult for them to make money with either a flat or an inverted yield curve. We do own J P Morgan. I think JP Morgan's best to breed. There are oh we is really head and shoulders above the rest of their peers, and you get some good revenue. Diversity diversification from them in the AM revenues that they're collecting as well as the investment banking fees as well as talking to Mike mayo this morning on talk box. For the first time. He's that. He's bullish all five banks that he covers all the five major.
"mike mayo" Discussed on The MMQB Podcast with Peter King
"The years. But he's confident that he'll be a part of turning the team. Around. And they've got Mike mayo who is very impressive general manager of enjoyed my dealings with them. This is my thirty first year as aging and mice first as general manager. But you would have thought that he's been a GM as long as I have been in each why tell me about tell me about tell me about your your discussions with them, particularly I'm assuming he's the one who you had to maybe do a little bit of battle over thirty million guaranteed dollars, adding eleven million dollars to an existing contract. So what was that like going at it with Mayock? You know, it really was helping first of all discussing with him lanes. Kasese very familiar with with the Steelers organization, you know, covering the team is broadcaster. Like, he had the obvious. Gotcha. No and two games and watch Antonio practice. So we had a lot of great information about Antoni. I just primarily talked about why things deteriorated with the Steelers on the negotiating front. I just explained rationale from what we had in mind, and it was pretty straightforward. You know, the wide receiver market over the last two years since we did is extension. Just completely blew up. You got guys like Sammy Watkins, you know, and nothing and Sammy. But he got a good contract from the chiefs in there was you know, there's gonna be guys like tie-break kill those one of our clients and Michael Thomas in Amari Cooper that are going to reset the market Beckham last year with his deal. The wide receiver position is red hot. You can look in free agency today and see what guys are getting. It's it's off the wall. You know? I mean, and so we kind of explained that we we want Antonio to be comfortable. With this contract moving forward. And we're able to come to an agreement was was there much of back and forth about for instance, the guaranteed money in the contract or was that or fairly easy to accomplish. Now. There was a lot of back and forth. I mean, we spent a couple of days working on this. And and really won't point. We were at an impasse. And it didn't look like the deal was going to get done. And we're able to resuscitate the discussions to everybody's credit. We certainly didn't give up and I think Antonio was very excited about the prospects of playing with Derek Carr. Jon Gruden both. Both guys were you know, great fit for him. And you know, we just rolled up our sleeves, and we're able to get things done, you know, and out Dave is still a great presence here. Even though. Oh, he's log on and his philosophy just win baby. I think still permeates here as far as I can tell you know, we work with the team. And we also got that Trent Brown deal dumb with them yesterday. And that was a guy that became the highest paid offense of Wyman an NFL history. So I've been very impressed in dealing with the team, you know, they're very decisive. They wanna win. What can you tell me about the impasse? And what what caused that to break, and what caused the deal to get done. Finally, I think just both sides, you know, both sides found flexibility, and we were both able to reach a common ground and like any successful negotiation. You've gotta be able to be creative and look at different ways to accomplish your goal. And and that's what we did. You know, we weeding go into this thing with a set demand. We we knew what we wanted. I think the raiders had you know, I don't want to speak for them. But I think they had a position that they felt strongly about and we're able to come to a fair compromise. I think both sides moved in and and gave a bit..
"mike mayo" Discussed on The Adam Schefter Podcast
"Podcast. We've got an action packed show with you. We've got the raiders general manager. Mike mayo prior to the Antonio Brown trade speaking at length about what the raiders need. And then staying in the bay area we have the forty Niners general manager John Lynch talking about where they stand with a number two overall pick in the draft. And then the Kansas City Chiefs general manager Bret VH followed by the men from pardon. My take my buddies big cat and PFC comment or but I with the news of the weekend being Antonio Brown shipped out to Oakland. We bring an ESPN colleague friend fantasy expert and man who's about. To get married to a woman. Well above his capabilities field Yates field. Thanks for joining the podcast this week. Not sure I could have ever appropriately described myself other than that last one line. There is a perfect summation of me. Yes, I am. I kicked my coverage. Well, that is a great tribute to the great shaping Duke. Yes soon. Be taping gates. I think we're like a hundred days away. So now, it's getting real Adam. It's getting really real and shaping Duke is a great neighbor cheating eights might be even better. But what we digress field. We digress. Let's bring it back to Oakland, and in Tonio Brown, and your reaction to the news of the trade that sent seismic shockwaves through the NFL this weekend. Yeah. Adam how about the I know that you were up until whatever it was twelve forty three AM eastern time, and I happen to a fallen asleep a little earlier on in that night. And then here, I am one. Am waking up for no reason. Really next thing. I know Antonio Brown has a raider. But here's an I would say is that throughout this process. Shefty it became. Clear and clearer to me that there was one team that kind of checked all of the boxes in this incredibly unique situation because I think people are wondering if Antonio Brown's quote unquote, power play is setting the precedent for future NFL stars..
"mike mayo" Discussed on WNYC 93.9 FM
"Way, we rebuild in the long run is gonna save taxpayer money, and it could still promote growth in the region. Marketplaces and dealer in Jacksonville. North Carolina stayed Randy. Thanks. Let's do the numbers. Yesterday was not a fun day on Wall Street US markets fell three to four percents. But according to the futures markets, maybe today will be better the Dow futures down just a tenth of a percent. That's thirty points. The S and P future is up flat. Nasdaq future is down less than a tenth of a percent markets in Asia and Europe are down the ten year. Treasury yield is it three point one six percent. We have a spot of good news to the consumer price index. A measure of inflation is up point one percent from last month that's less than expected compared to twelve months ago. Prices in the US are up just two point three percent. We are coming up on earning season companies reporting in on how they're doing if they're doing well that might also take some of the edge off of the drop in markets tomorrow several of the country's largest banks report earnings. Marketplace's Justin how has more. The last time banks reported on earnings they were flush with money from trading revenue and savings from the new tax law. Wells Fargo analyst Mike mayo says this time investors are saying, where's my where's the extra-long growth where he extra capital expenditures. Mayo will also be watching to see how rising interest rates affect thank prophets with the ten year yield well above three percents, and the fed committed to more hikes Brad MacMillan with the Commonwealth financial network says banks have been fattening up when interest rates go up that means banks are actually be able to charge more. And there's a delay before they passed that extra interest through to their customers. But that delay could be coming to an end McMillan says when rates rise, it usually takes banks six to twelve months to start paying more to savers, and we're already well into that period. So it's probably not that much longer before customers are really going to.
"mike mayo" Discussed on Bloomberg Radio New York
"Upper, right, okay. With us right now, a gentleman that certainly within banking and finance in banking legislation. These little introduction. Michael mayo. Is this week? Wells Fargo is well before we get the banking earnings and all that h r four one zero five is an attempt to bring Mike mayo sensibility to Washington, what is it? And is it gonna work? So this is HR four zero one five the corporate governance reform act. So what you think also known as the mayo act. Well, it's the anti mayo act. Yeah. Okay. This is the corporate governance reform having covered the banking industry for the last three decades seeing the abuses that have taken place, as you know, Tom I've written about this in my book. You've been fired over this continue. Exactly. And I testified to congress over this stuff. You hear corporate governance reform? Act. Sounds great. I have great ideas for this. But what this act would do. It's it's cracking down on those advisers that advise shareholders on how to vote and so the. So it's foxy advisors. It's institutional shareholder services glass Lewis Jones Cup other small ones. And what they do is. They advised shareholders vote one of the main questions for every annual meeting. And now they. This Bill says we're going to crack down these proxy advisers. We're gonna make us. That's what the big banks want. Right. Well, I'm not I'm not saying big, banks or other banks. I'm just saying for me as someone who represents shareholders. I've done that for the banks replies to all industries. But this would require is that the proxy advisers before they publish their research. They'd have to show that research to the companies and the copies could say, hey, this isn't quite right. The company still agree. Then the company view would be listed alongside the views of the let's to the chase is this act good for Jamie Dimon, while you know, I'd say I round I say does this past the city group test so December by by that I mean, so if a proxy advisor wants to conduct research and talking about city groups pay then they'd have to check with CitiGroup. If they want to conduct research saying we should separate the CEO and chairman job, and we'd have to show that if they say we want to have a shareholder value committee. These are all. Shareholder proposals that they're giving recommendations on. So if they want to give recommendations the staff to show the research so for city group for the last two decades, the CEO's over two decades have gotten paid for sorry have gotten paid an average of twenty million dollars a year four hundred million dollars while the stocks gone down. While the stocks going down by seventy percent at a time when the s got up two to three fold. So if if I assess or glass wants to write about the pay at Citi group, they'd have to show that research. Okay. Great before doing this. This is the anti Mike mayo clinic by all means the Jonesboro squirming in England gave them a lot of times gone. A bit of Iran. Didn't we? I know my friend of ours. He can do this. If I'm a deacon Jones. Do I need to show my research, whatever Bank of nationally? Can we talk about earnings that come this week? Iran there about some of what is going on down in Washington DC with the regulation. Still bullish city. Citigroup is number one idea. You have I think that the main course for city and all the banks should be decent. I mean, you have good costs control. Good credit? Good Catherine turn if there's a concern out there. It's that you don't get that desert. The extras of extra margin, crease extra-long growth extra capital markets, the extra animal spirits that should come after the tax cuts. I prefer having a little bit less revenues today and much more sustainable growth in a way, it's the opposite of before the financial crisis when people celebrated revenue growth only for banks get hurt later. Now, you have a little bit less revenue growth, but it's sustainable. You'll really bullish on the structure story the banks in America, can you just build on that framework because you go to bed at time. We did this morning, and then we can get deeper into some of the stuff you concerned about just is the structural story for banks right now. So favorable for the longer term with a much longer time, horizon hair. Why appreciate that question? There's too much short-term. Awesome. And so when we look at the banks despite some cyclical softness, you have the cost structure of banks at your reach twenty five year structural breakout for the benefits of scale it was nine hundred ninety four when US Bank for I allowed to expand. Nationally. You're seeing the benefit of the scale. Now, you're seeing a structural reduction in risk that doesn't mean. Loan losses aren't going hard that doesn't mean there won't be problems. But you've seen incredible de leveraging and de risking as we think while loss will go higher. They won't go as high as and then lastly capital returning record Capela return at the Bank. So I guess you could call this the three CS credit costs and capital. Very that. Sounds like his new research report. Michael mayo with us, we're going to continue here. Lots to talk about I really wanted to go back to that USA cash. The difference in the new Bank your of USA cash. I also wanna talk to Mike mayo about the counted him seventeen Bank branches in Manhattan. Yeah. When he talent what Goldman Sachs Marcus unit as well. Things have really interesting conversation to you talk about Bobin sex, Marcus. Did you get a toaster from them? I do have a Marcus customer. I are you a Marcus Marcus customer. I get emails every you know, so many minutes saying that they are raising their rates that they're giving me. So are they? They have raised questions. Did you get a toaster? Toast. I think their approaches to give a little bit higher interest for Sean, John toast. A toaster jubilant to slide. The whole thing yesterday was was pharaoh has one is luxury toasters. You want that don't shake about a smack toaster. Meg. Oh, that would suit you down to the ground, really, an Italian toaster. That you go. And.
"mike mayo" Discussed on Bloomberg Radio New York
"Up. We'll take a look at the banking sector with Mike mayo. You can see all the Bloomberg best stories at best go. This is Bloomberg. With a Bloomberg small business report, I'm John Tucker. It's tough to talk about any positive outcomes from a hurricane like Florence. But homebuilders many of whom are small businesses may get a boost after the storm joining us now with more Bloomberg chief economist Carl Riccadonna Carl how could they get a boost as we think about the broader economic outlook. It does cause significant damage to both the capital stock and housing stock in the region into this will require significant rebuilding efforts. And as we look at past hurricanes that we can actually see a meaningful pickup in things like construction employment in those repair related activities, like utility, workers, plumbers, electricians, etc. Can they actually find the recovery workers though? Well, that's interesting point. Because if we look at the small business sentiment survey, the single largest problem with the quality of labor, and that's telling you that the labor market is getting tighter, Carl Riccadonna. Thanks a lot. Today's bloomberg. Small business report. This is a Bloomberg market minute. The texts led the stock market lower. The Dow Jones industrials fell ninety two points or a third of a percent to twenty six thousand sixty two. The NASDAQ lost one hundred fourteen points or one point four percent. The S and P five hundred closed down sixteen points or half a percent. Oracle shares lost ground and after hours trading revenue for the fiscal first quarter fell just short. Forecasts. Shares of Cigna and Express Scripts moved higher after CIGNA's planned acquisition of express. Scripts was cleared by the Justice department that set the stage for the deal to wrap up by the end of the year. Some state regulators still have to sign off on the acquisition. United Parcel Service will hire about one hundred thousand temporary employees to help handle the holiday rush. This year gap announced it will be looking to add about sixty five thousand seasonal workers this year. Crude oil futures fell to sixty eight dollars and ninety one cents a barrel in New York. Jeff. Bloombergradio seize the chance.
"mike mayo" Discussed on Bloomberg Radio New York
"It's a hard iced tea that goes down easy with a twist was not hard iced tea unwind with a twist steve guppy cincinnati ohio responsibly mm bloomberg television here's vonnie quinn the us bank earnings bonanza is over now wall street executives are gearing up for their annual meetings was shareholders citigroup holes its meeting tomorrow and that's why you'll find veteran banking analyst mike mayo right upfront we thought nice results for most of the banks and yet the market just outside the most banks exceeded expectations we increased our future estimates for most of the large banks and you saw the three cs costs cost control was great revenues are far out pacing growth and expenses you see credit quality still fantastic and capital is getting return so it's all working i think the stock market has been wrong over the past couple of weeks the earnings results validate are bullish theme on the banks and we think in the end earnings will rule has ownership becomes so concentrated that these annual meetings are almost worthless what are you drinking jv cool eight jamie said anger meetings are a waste of time because special interest groups hijack the agenda i think he's wrong because annual meetings can be structured in a way that's more valuable to institutional shareholders and for me personally i'll travel halfway around the world for one more so of new information that nobody else has.
"mike mayo" Discussed on Bloomberg Radio New York
"A jp morgan and built up cape good morning through the financial crisis but now you're seeing the benefits of scale without the distraction of systemintegration a financial crisis new regulation so you're seeing these benefits more than ever for both in retail banking ending capital markets it really was in a quite amazing and that's why we had asked the question what makes you nervous mike mayo take four is that what you wanted to do cinema guy regard why did what you would do it is the optimism justified from what you say i'm one of the risks that this tax built to homes point that this tax bill just gets competed away at what a great question first of all we see both structural and cyclical benefits to the banking industry the balance sheets and jp morgan's balance sheet is the strongest that it's been in a generation in addition you have the benefits of the tax reductions which certainly helped the banking industry in some of that money will be put to employs samba communities but psalm to shareholders and the bottom line of what happened to your interest rate at the start of the year nothing if you're a f alone so takes you years to this be committee it away it will be passed on gradually but not at the start here we're of the other g gordon you're a harsh critic of governance of bank of america there's all the challenges your bank which i know you're not going to speak about what across regional banks across two big defects to the war single word that matters on this mike mayo take five scale where's the scale going to be for everybody besides jp morgan while that to pay question that message that came out from the conference yesterday time that he not covered the banking industry for thirty years we've got a lot of research on jp morgan but walking out of that room yesterday it it tilted the debate more engaging mortgage favor when you're talking about it a new finn tech startup you're talking about a a midsize bank dethroning jp morgan they're saying it's not so easy we big data we have to peter power they increased their technology spending by fifteen percent to eleven billion dollars every year halas smaller players compete against that so there is a question about more consolidation in the bank disagree is to.
"mike mayo" Discussed on Bloomberg Radio New York
"Chemical amini handy and legacy jp morgan then jamie diamond took over a jp morgan and built up jp morgan through the financial crisis but now you're seeing the benefits of scale without the distraction of systemintegration a financial crisis new regulation so what you're seeing these benefits more than ever before both in retail banking and capital markets it really was a quite amazing and that's why we had asked the question what makes you nervous march barrio take four is that what you wanted to do a cinema guy regard sylvia killingly this more accurately it why did what you would do it is the optimism justified from what you say and one of the race that this tax go to tomes point that this tax bill just gets competed away at what a great question of first of all we see both structural and cyclical benefits to the banking industry the balance sheets and jp morgan's she is the strongest that has been in a generation in addition you have the benefits of the tax reductions which certainly helped the banking industry in some of that money will be put to employs some communities but psalm to shareholders and the bottom line of what happened to your interest rate in at the start of the year nothing if you're at yes you have alone so takes a few years for this be committee it away it will be passed on gradually but not at the start here we're of the other g mortgage rural a harsh critic of governance of bank of america all the challenge is your bank which i know you're not going to speak about but across regional banks across two big the face to the war single word that matters on this mike mayo take five scale where's the scale gonna be for everybody besides j p morgan while that to pay question that is a message that came out from the conference yesterday thomas you know i've covered the banking industry for thirty years we've got a lot of research on jp morgan but walking out of that room yesterday it it tilted the.
"mike mayo" Discussed on KBNP AM 1410
"That for us on this is very different than a a robo adviser it's not programmed era learns based on the data collection and the data that she collects would be around forty thousand articles per day that she can crunched down to what's most important in terms of the movement within the stock price right based on her training and so for me as a as an equity research analysts the important thing is to be able to train to learn first in a what are what is a neural networks why is it so important what is it doing for the companies that i'm covering with an internet and why is is why are we seen all of these applications of artificial intelligence so suddenly right so for me it was really an exercise and trying to learn the tools that are coming to market how acceptable they are and how good they perform i and it really did shape and i think highlight many of the more important fundamental themes as than we kind of work through and we did a big launch peace on on on on on all the internet names and within our space and it really framed for us on the pace of adoption around these tools and not only not only that but the sense of both what do law large numbers mean for some of these internet guises you introduce this technology and how scalable are their business bottles as you introduces technology to because the the interesting thing for a project like era is that again we're not programming her reich sheep sheep she programs herself based on the data that she's collecting so it sets off a trend i think that you know no data is enough right to the extent that everyone can capture companies can capture data these neural nets can run over that data and find patterns and fine to draw conclusions that were impossible to learn and so that is really trying to explain so so you and mike mayo are on the wells fargo stage coach it's like the movie stage coach zhang is he like throwing you off the stage culture you thrown them off with these win last night.
"mike mayo" Discussed on Bloomberg Radio New York
"The for us and this is very different than a robo adviser it's not programmed era learns based on the data collection and the data that she collects would be around forty thousand articles per day that she can crunched down to what's most important in terms of the movement within the stock price right based on her training and so for me as a as an equity research analysts the important thing is to be able to train to learn first in a what are what is in neural network why is if so important what is it doing for the companies that i'm covering with an internet and why is is why are we seen all of these applications of artificial intelligence so suddenly right so for me it was really an exercise and trying to learn the tools that are coming to market how successful they are and how good they perform and and it really did shape and i think highlight many of the more important fundamental themes as than we kind of work through and we did a big launched peace on on on on all the internet names and within our space and it really framed for us the pace of adoption around these tools and not only not only that but the sense of both you know what do lov large numbers mean for some of these internet guises you introduce this technology and how scalable are their business bottles as you introduces technology to because the the interesting thing for a project like era is that again we're not programming her right sheep sheep she programs herself based on the data that she's collecting so it said it is off a trend i think that you know no data is enough right to the extent that everyone can capture companies can capture data these neural nets can run over that data and find patterns and find to draw conclusions that weren't possible war and so that is really trying to explain so you in my mayo are on the wells fargo stage coach it's like the movie coach you he like throwing you off the stage culture youth roenemaa these one last night you saw a good you're on speaking terms that's a surveillance per exclusive another mike for the inflatable stagecoach toy that he said yes but what do you do with traditional research what's mike mayo's job if you are pressured enough to.
"mike mayo" Discussed on KBNP AM 1410
"The brand new issue just came out tuners doc recommendations from david and tom gardner and you also get best buy has now and a lot more so check it out by going to podcast got fooled off common to scroll down to the bottom of the pick you can also check out the new logos new logo new pasha are logos every once in a while we like to put on a fresh coat of paint event over the past 15 years few analysts have been as tough on the big bang wchs as mike mayo which is why a few eyebrows were raised this week rim mike male proclaimed that quote us banks have the strongest balance sheets in a generation you agree with that ron i don't want to because banks scare me but i think i have to the the data i think bears that out if you recall back in june they had the the stress test that they perform on banks all 34 of our institutions past including the big boys and that has always been the case they have a new measure that they have to you know beat which is called the supplementary leverage ratio which mixtures they can handle off balance sheet exposure as well which is one thing that has always scared me now the banks will tell you that it's too constraining that they have to beat those kinds of measures and it hurts their competitive nature but i think we learn in two thousand eight that some of those things are necessary so you know the fed also just recently said they could they could be no pay dividends i'm buyback stock as well as a result of the strength to their balance sheets so all all indications are good at bolsters the argument forge some deregulation perhaps being okay um i know trump over certainly wants to push that through i caution that a slippery slope which has be careful yeah i recently looked at did it the screen of of most of the major banks in u s and it's it's quite hints at standing actually the average equity assets ratio was a way of just the safety of a bank on the averages over thirteen in in normal previous average cycles that's in the single digits like five six seven is considered a good equity assets ratio it's thirteen and the average nonperforming loans percentage of total.