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tv   Bloomberg Markets  Bloomberg  August 4, 2022 1:00pm-2:00pm EDT

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>> more than halfway through the trading day. stocks wavering. hiking all to slow inflation. i'm taylor riggs and this is "bloomberg markets." [bell ringing] let's get a quick check of some of the global markets. in the u.s., a little relief here coming down after the big monster we have had -- big monster rally earlier. s&p off .3% but try to hold onto
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the 4140 level here and nasdaq actually here is the outperformer despite being in the red. and not here happening in the yield space. take a look at the twos/tens. some of the most inverted levels where seen back until september of 2000. it is the duration and magnitude of this inversion that really catches our attention. if you think about what -37 means here, really looking at pressure on the front end of rates. the vix index, looking at the global fear of the markets, a little elevated here but we would call this mostly calm here and 22 level on the vix. we mentioned a rate environment and global central banks that really takes us forward to the boe. as we know this morning, raising these interest rates by the most since 1995 and earning the u.k. headed for more than a year of recession. governor andrew bailey spoke earlier with our own francine lacqua to discuss the plan to combat inflation. take a listen. >> we will get inflation back to
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target, no question about that. that is my question to people. the course is very hard. this is very hard cyclically for those on the low incomes in this country who are more affected by inflation, concentrated as it is in energy particularly. if we do not get it under control, it will get worse and we will have to raise interest rates by more. taylor: please to say we get more on global central banks with our very own policy correspondent, michael mckee, joining us on set. some notes i have read, boe hiking the u.k. into recession. is that what you gleamed as well from this? michael: the cause from this is different but andrew bailey did something that central bankers all most never do, going into recession. it is one thing to promise to get inflation down and it is another to say a recession is coming and there will be collateral damage. it's the largest rate increase
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in 27 years, raising their rates by 50 basis points and forecast they would be a long, deep recession starting in the fourth quarter. inflation goes to 13% on employment to 6.3%, and that does not take fiscal policy into account. there are questions about whether they will actually -- things will actually be this bad because liz trust and others, when somebody ascends to number 10, will try to head this off. taylor: some of the criticisms if you will about maybe the boe, the fed, rates have been so zero for long that if there was a recession we would not be off enough to have room to cut if needed. do you get a sense we are now getting our way off as much of the lower bound as possible that if we need a runway it is there? michael: on the one hand, yes. they are getting a little higher and there is room to simulate
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the bank of england talking about now selling off some of its qe. so it could tighten policy, but if they needed to loosen it, they could go back. the problem is, as everyone points out, if you back off because you are worried about recession, then you let inflation continue to rise. they are caught between a rock and a hard place. they do not know where things are going and bailey made it clear that the war in ukraine is a major issue because of energy prices. they came up with three different forecasts and said we do not know which one it will be, it will depend on what we end up getting out of ukraine. taylor: it is always ok having a two-handed my economist -- economist when it is michael mckee. as within about the reaction in the reaction and equity markets here, to talk all about that, market appeals asset management ceo, michael shaoul here with
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me. if you want to because eight when he percent gain off of the low of the market, does a signal may be the all clear in your world of equities? michael: i don't think so. one of the tricky things his the long bear market values of the beginning of the bull market ultimately looks very similar. the question is always have you really addressed the issue which took you lower and your conversation with michael mckee said no, we are in the middle of what is a very rapid period of monetary tightening. it is in response to inflation -- is it in response to inflation? think you can make the argument that headline inflation rates will be quickly in europe. there's a bit of belief in commodity pricing, which will make a difference to the headline numbers, but
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unfortunately we do have pretty embedded inflation in the u.s. away from commodities, the labor market looks very inflationary, and really i thing the only way to worry about the u.s., the federal reserve will get this under control is either by significantly worsening financial conditions or economic conditions or a combination of the two. and although equity markets look ahead, although i think some people think the worst is already priced in, it does not feel like that way to us. to us it feels like the middle of the storm and this is one of these period's in which sentiments got ahead of itself in june and everybody feels they have done enough in the markets are as moving higher and people jump back in and we are around the point where people are jumping back in reaching the level and you roll over again and press the snooze button. taylor: do bonds look anywhere
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near attractive at 2.7%, even 3% on the front end of the curve? michael: at least you're getting a positive return in cash and that may look ok. i think, long-term -- i think long-term interest rates, by the time we get to 250, if you mention the fed will be higher in the fourth quarter, i do not think long-term rates are much -- have much way to go. and the bear market, credits should get worse. i think the contents of the curve is somewhat of a haven. if possible, the precious metals have finally started to bottom, maybe a correction march of this year. i think you would want to keep an eye on gold as something that could be doing better. yields are stable around here. i think, overall, 2022 will be
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about capital preservation rather than the year in which you are trying to make money. taylor: is some of that capital preservation in cash? michael: i think, yeah. everybody has a different math. i think cash is a pretty attractive place to be relative to most assets on the long side. the correction you've seen in the commodities or valuations in some commodity sectors, i think they look attractive even if we go into a slow down, but as i say, we saw particularly about april through june period, earlier this year, it is a difficult time to be long kind of anything. i think we will have a another one of those before the end of december. taylor: appreciate you joining me.
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michael shaoul taking us through the equity and bond markets. maybe the cash markets as well. let's get through other first world news -- word news and we do that with mark crumpton. mark: in russia, american best star brittney griner has been sentenced to nine years in prison for trying to smuggle illegal drugs into the country. she admitted having vape cartridges with cannabis oil in her luggage. president biden caused the sentence unacceptable. there have been talks between the u.s. and russia about a prisoner swap. china called off a face-to-face meeting between foreign minister wang he and his japanese counterpart. this came after the g7's first concern over what he called beijing's threatening actions around taiwan and in the wake of a visit from house speaker nancy pelosi. the meeting had been expected as soon as today on the sidelines of the association of southeast asian nations meeting in
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cambodia. in puerto rico, the former governor has been arrested on bribery or corruption. she is accused of letting a bank henpecked a regulator to financer failed 2020 election campaign. she led puerto rico from 2019 to 2020. this is a form to. -- first time a former leader of the island face federal charges jurors in the trial of nikolas cruz were taken to see the still blood spattered rooms at parkland's marjory stoneman douglas high school today. the crime scene had been sealed off since he murdered 14 students and three staff members for years ago. the 23-year-old pleaded guilty in october. the trial is said to determine if he would be sentenced in life without parole or death. global news, 24 hours a day, on air and on "bloomberg quicktake," powered by more than 2700 journalists and analysts in over 120 countries.
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i'm mark crumpton. this is bloomberg. ♪
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taylor: private credit funds have had $200 billion in unspent funds. debt investors facing rising political and economic rest but public right markets also a little choppy, meaning does more direct lending start getting ready to be deploying more of the cash? sonali basak is here to discuss with me and we talked a lot about the cash on the sidelines and wait to infest -- where to invest.
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yesterday on the show, they were saying it could be another 12 months before the private valuations come down to the public equity markets and the dislocations that that presents. sonali: absolutely. you see private equity valuations come down but think about the yield you can get if you are a private credit investor. if we look at the junk by markets, to your point, it is not that we are at recessionary levels but if we get to a recession, that junk bond index is less than 450 basis points when you look at the spread. we think it will get closer to 800 or 1000 in the event of a recession based on what our analysts are saying. this is why there are reasons for concern because if you take a look at the move index and how much volatility there has been in debt markets, you are seeing a ton of volatility there, which is pushing a lot more activity over into private markets, especially as banks are stuck with a lot of debt on their balance sheets and are facing losses on those debts. taylor: with the high-yield credit spreads chart, i think it
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is tebow info ep spreads tighter than they were talking about 800 to 1000 basis points. this is the perfect set up to our next guest. you know him as the copresident of the luau capital, one of the largest asset managers, well for direct lending, more than $119 billion in assets under management. take it away. sonali: you know it's crazy too? luau's market cap is above carlisle's now, even with about half of the assets you see at larger and older competitors. luau, you guys reported earnings today. the real western is with, all of that money on the sidelines and volatility in the market, are you able to spend it? marc: first up, thank you for having me here. it is great to have a chance to talk about that markets. it's an interesting moment. i would start with the business model is fundamentally different than the other alternative managers. i think in your comments, it sets up what is that we have
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built a business about predictability, stability, and growth. about from middle -- permanent capital and revenues making our business different. we do not have the carried interest and this other variable in the business so shareholders with us experience the continued growth of the business and that unusual predict ability. with the markets today in terms of deploying capital, it is a fascinating time. we have seen this as one of the best risk returns sent private credit. -- returns a since private credit. you point out tremendous volatility in private and public valuations. that is what we are billed for. our business model at its heart in direct lending is all about safety, security, predictability. being the senior most lenders so in times of uncertainty, you are protected and getting floating-rate returns. sonali: are your clients coming to you saying, but inflation come up but inflation? marc: yes and we couldn't agree
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more and during times where we've face recession, inflation, this is the si class they want to be in. we are seeing that with a lot of investor commitment and interest in our products. because we are about safety and security first, protecting capital, stability of principal, then about floating-rate returns, inflation in fact rising rates are a benefit to our business. our returns are going up every time rates go up. sonali: the crazy thing is, we have invested in a lot about loans and a lot of tech companies which you would think is so risky. are there things in that you are avoiding allowing you to keep that safety in the capitol structure or are you taking on a little more risk for some reason others are not seeing? marc: no, in fact the heart and soul of our business is about protecting the capital, first, second, and third. the reason we focus on software and are the market leader in financing software buyouts is because they are such a stable,
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predictable, positive businesses. to think for a moment today, valuations are being revisited, dramatically. that has implications for equity investors and people are feeling that in their portfolios but it is not because of a lack of fundamentals of the businesses. in fact, software companies reported very strong rates and quarters and that is what we like as someone who is lending through on average one third of the value of one of these wonderful market-leading software businesses. we have voice positioned for defense. a little with people saying today we are getting more defensive, getting more selective, increasing scrutiny. that strikes us as discordant because that is always what we have been -- we have done. taylor: what about that there is trillions of dollars on the sidelines and of places to go? you look at what is out there and look at the idea some companies can face the stress in the cycle and you wonder how much there really is an
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opportunity to find new chances to invest where you are at the highest part of the debt capital structure? marc: there's a lot of capital and it is mismatched today. think about it this way, one of the primary markets for us is financing private equity buyouts. there is probably too trillion dollars in dry powder of private equity firms. assume they borrow one turn, they will borrow $2 trillion as part of the bias and you have several trillion dollars of distinct debt that has to be refinanced. put that together, probably a $5 trillion market. relative to luau and is much as we have a market-leading position, the white spaces is infinite. what is happening today is our shortage is not attractive opportunities. yesterday, a company announced they would buy paying. a fabulous buyout and company and are leading the financing. that is the place we want to be with these great businesses with great sponsors. the mismatched today is there is lots of capitol on the sidelines
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would not so much in direct lending. we are finding the mismatch the opposite direction. i think the constraints to the private equity market is likely to be the shortfall of capital in the markets. taylor: do you see markets on the public si with apple, meta, and one of the big questions about apple is only raising $5.5 billion, why are they not doing more? do you get the sense that this in the public debt markets are open, transactions are reopening after what had been a volatile first half? marc: not in the liquid markets but in the liquid markets are very stuck in we do not see a lot of activity or offering or a lot of appetites, understandably, by people to underwrite loans hoping they can distribute them profitably. that is a tough place to be in times of uncertainty. if it goes the wrong way, you own all of the downside, and if it works, you get paid a couple of points. we are in the buy-and-hold business, in the make the loan or hold it in the duration.
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we are making a different decision. we like great fundamental businesses for the long-term and today, this is a very interesting time. taylor: you made the decision not that long ago to go public yourself and i'm wondering how you feel about that. you are also subjected to the same public market volatility many others are but you have not been public for 10 years say like a lot of the large one have been. marc: you are asking me on the morning that we did our earnings call and the work that goes into preparing that. we are happy to be public because the reasons to go public or business, logic, strategic, bringing together capabilities in real estate, direct lending, and in gdp capital solutions, bringing it under one roof so we could be a one-stop shop for all of the capitol needs -- capital needs of this industry we are all talking about, we are the service provider, the capital provider, the picks and shovels provider. taylor: really appreciate it. come back to join us, blue owl
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capital co-founder, marc lipschultz. still ahead, the blackrock ceo has doubts on digital assets like caroline hyde should be here but a new move says maybe the winds have changed. that conversation is next. this is bloomberg. ♪
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taylor: this is bloomberg markets and i'm taylor riggs. blackrock partnering with coinbase to make it easier for institutional investors to manage and trade bitcoin. but remember, blackrock and wall street were not always in favor of dope. back in 2017, the ceo and jp morgan's ceo, jamie dimon, heather doubts about digital assets. take a listen. >> bitcoin just shows you how much demand for money laundering there is in the world. [laughter] that's all it is. it is an index. it is an index of money laundering. [applause] >> i could care less what bitcoin traits were, how it trades, why trades. if you are stupid enough to buy. i told people it could trade at $100,000 before trading to zero. toilet bowls traded for $75,000
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or something like that. the only value of bitcoin is when the other guy -- what the other guy will pay for. taylor: the other guy will pay for its. we have migrated from maybe 60,000 on bitcoin down to 20,000. caroline hyde tells me maybe it is an inflation hedge and may a risk on asset as we try to hover around $23,000, $24,000 or so. let's take a look at some of the digital assets and maybe the more tradable assets at least here on a daily basis. if you think about equities, coming off of a pretty big monster rally where highs a little bit but pretty firm footing, off on the dow down about a quarter of 1%. at the s&p 500, we will call that down on the day. certainly in s&p 500, let higher by tech stocks. i are on the day for really trying to digest inflation versus the big jobs report tomorrow and really what that
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means for the federal reserve and how high they really have to hike rates if needed to really tackle some of that inflation. one of which is coming next wednesday, we take a look at a two year yield may be on the day. coming up, a new low for crude oil futures. that conversation is next.
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this is xfinity rewards. our way of showing our appreciation. with rewards of all shapes and sizes. [ cheers ] are we actually going? yes!! and once in a lifetime moments. two tickets to nascar! yes! find rewards like these and so many more in the xfinity app. mark: china likely fired
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missiles over taiwan during drills today according to japan. if confirmed, that would be a major escalation. beijing is conducting military exercises around taiwan in response to nancy pelosi's visit. the u.s. accusing russia of waging and information war in ukraine, along with conventional
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shelling. the washington-based institute for the study of war says russia is stoking fears of nuclear disaster. the think tank says russian troops have been firing at ukrainian physicians but ukrainians cannot strike back over worries of setting off a nuclear incident. victor or von is did you speak later today at the conservative political action conference in dallas. his thought has raised concerns as it comes barely eight-week after the central european leader made remarks that have been compared to nazi rhetoric. donald trump welcomed orban to one of his golf courses, saying it was great spending time with my friend and the two are celebrating his electoral victory. a large fire broke out in one of berlin's forests today, triggered by explosions and in
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every dish and dock created in 1950 that is used to stall or -- store old ammunition from world war ii and other explosives. berlin fire officials say the situation is dangerous and the blaze is not under control. global news 24 hours a day on-air and on bloomberg quicktake. powered by more than 2700 journalists and analysts in over 120 countries. i am mark crumpton. this is bloomberg. john: welcome. taylor: we want to get a quick check on these markets. a rebound for technology after what has been a significant rebound overall since mid-june.
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in some cases, you are up 20%. that is certainly not the story today, but s&p's, 4150 are the levels we are trying to hold. an inverted yield curve, the most since september 2000. as you think about the duration and magnitude of that conversion, recessionary fears start to creep up. -- test they maybe things are ok under the surface. john: staying with those of macro themes, there are some earnings stories that are speaking to that needs. you've got that coinbase blackrock deal news has resulted in a nice pop for those shares, but think about the inflationary realities. those shares are under pressure to the tune of 5%. we have eli lilly dealing with currency headwinds, off about 3%
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trading today. ebay with regional -- reasonable results but warning that as discretionary spending starts to cool, that could impact their business. taylor: we are going to be sticking with one of the big stories today, oil. back to the lowest prices since january. earlier today, we heard about the price direction. >> -- on an ongoing basis starting in 2023, i do not think you will see much above $150 in time, simply because of demand elasticity. i am buyer with crazy numbers. i do not think we can sustain that. jon: let us stay on that name. dan? joining us now. i keep thinking to that point of
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oil price that might weigh on ultimate demand. people are talking about those various numbers. we had the surround $123, $122, but as we have seen this selloff in the price of crude, is it possible that we already reached that he level? danny: it is difficult to fully put a price point on what caused substantial demand destruction, because most demand destruction comes from the product side, not crude oil itself. we have seen refinery margins ease while oil prices are falling as well, which has put more relief at the price pump, but we are starting to see based on data quite a bit of demand destruction, particularly in gasoline targets. taylor: $88 on crude, is that a
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supply story or a demand story? danny: it seems the conversation has shifted to demand story. while prices have been largely driven by supply concerns, whether underinvestment on the production side during covid, russian sanctions, it seems now the demand story is the largest driving factor, especially with recessionary fears creeping up. jon: as we look forward, the voles are still going to argue -- the bulls are still going to argue with that supply story and if we look at that decision with opec-plus, they could have started pumping more oil and opted not to, but without increase, which story ultimately has more sway in the market? danny: it really depends in the short term, demand destruction
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from higher prices will have more sway, but in the longer term, it will be a balance between whether we will see more severe destruction of demand if recession occurs, but on the supply side, we are still quite tight and there is still the question on whether or not they could have raised production significantly more than 100,000 barrels a day. they could possibly meet reaching maximum capacity that opec can produce. taylor: appreciate it, danny atkins joining us. i want to pivot. we somehow always managed to bring it back to bonds. meta-platform the most recent company to sell corporate debt, taking advantage of deals that have been drifting lower.
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joining us now, you know him from louisburg -- from bloomberg intelligence, always fun to talk about credit and bonds what do you see is these victims of meta-coming to market? >> sometimes we are living in a bizarre world. bad news is good news, higher spreads mean lower prices. the floodgates have started to open. now that we are worried about a recession and a real slow down, the fed may be backing off so rates rally, spreads rally and the cost of capital has fallen 100 basis points. it is where you have seen floodgates open for apple, paypal, ibm. jon: it is interesting when you consider the fact that meta-has about $40 billion of cash and cash equivalents. you referenced apple, closer to
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$180 billion, yet they are taking advantage of what the bond market offers right now. is there a concern that as things we can that those cash flows will start tweaking more if you are pulling the trigger on a credit deal? robert: not at all. there is nothing but excitement. demand for used deals has driven pricing lower. somebody like meta-that has zero debt, nobody has exposure. this is not like in equity were value has fallen by 50%. everyone wants exposure to cash generating assets. three cash flow is still likely to hit $20 million. this is exactly the type of name people want when they are worried about a macro economic slowdown. taylor: i think it was you when we interviewed you about apple, you said they have millions, why
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not more? when you think about not only the service step to take advantage of still relatively low yields. is this the appropriate use of cash when we think about this environment for these companies? robert: apple is a different story. they have $120 billion of debt. meta-has nothing. the effective cost of debt capital after tax is zero for names like this. meta-, is why have they not done it so far? they have not needed to, but with revenues flattening, they need to build up this excess kitty so they can pour more money into their metaverse style spending. if you think about it, apple is looking to go2net cash neutral. the same that they have -- the
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same amount of cash that they have with debt. meta-has zero debt. they will probably raise full day dollars today. that number could go to maybe $40 billion. jon: for credit investors, in terms of where this money ultimately is spent, whether it is on acquisitions or operations or maybe shareholder friendly things like stock buybacks, is there a lot interest or concern among credit investors on how the money gets used? jon: bondholders are concerned about everything every day. when it comes to meta-or apple or even amazon, we all know that they are generating so much excess of free cash that the vast majority of that money is going to go to shareholders. on an absolute basis, how much
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flexibility do they have? when you look purely at leverage, if it meta-put 50 being dollars of debt on their balance sheets, they would only have leverage of one kind. meta-is not my anybody. the government will not allow them to. we top the other day about maybe apple would love to bite netflix but that will not happen from a government standpoint. they will use the money for share backs. creditors do not care. that is how you get a aa rating. jon: thanks for your insight. robert schiffman joining us. coming up, restaurant shares higher today. the coming just reported quarterly results. we will hear from the ceo of tim hortons and burger king.
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taylor: this is bloomberg markets. jon, maybe one of your favorite burgers, restaurant brands international. tim hortons sales up 12%, and burger king sales up 10%, more than doubled some estimates. for insight into what numbers to say about the recovery, let us bring in the ceo. i am curious what you are seeing within this consumer behavior. our consumers trading down to help hedge inflationary pressures? >> great to be here. we are excited by the progress
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we've made in the second quarter. we sat some good momentum and have been working quite a bit in that business for the past couple of years back to basics. we were up 14% in canada. burger king internationally, aggressive growth in the quarter. bk u.s. making steady progress as well. popeyes moving in the right direction. the overall consumer sentiment is mixed. the situation is challenging. inflation is having an impact across daily life. we have seen inflation in energy costs, fuel prices are up, interest rates up. it is certainly a challenging moment for consumers. we are in the limited service restaurant business. we tend to see folks trade down from casual dining into our segment, which technically bodes
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-- typically bows positively during these situations. we also see lower income consumers trade out altogether. one thing that is important is that we are seeing at home inflation much higher than food away from home inflation, nearly 500 basis points disease pride today, which -- is the spread today, which suggests that it is a positive opportunity for consumers -- for restaurants to provide. jon: we flew straight into this story of dealing with inflation coming out of the pandemic. you talked about the canadian performance, in particular for tim hortons. did canada have a slightly slower recovery in terms of opening the economy? you teamed up with justin bieber. maybe he helped? jose: a number of factors drove the performance.
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we have amazing franchise owners in canada for tim hortons. they did a great job training and motivating teams. we had a plan that was balanced and that had a big push on p.m. foods. we have historically been a strong breakfast business, but lunch has been an opportunity. we invested behind that with a good team, loaded bowls and wraps. we have also rolled out outstanding cold beverages that have helped us drive the pm business even further. we have grown significantly over the last couple of years and think that is an opportunity for long-term growth. they mobility that has come with the easing of restrictions has brought our people downtown. we have seen a bit of pent up demand in canada. justin bieber, i am a believer.
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he has been a big part of our success, but the core business is doing well. taylor: i am the token vegetarian on this program, so i am going to ask about the momentum for plant-based options. jose: i.e. that on occasion, so i am a big fan. we have seen some strong performances, especially internationally. we have strong markets in western europe doing north of 10%. sales are coming from plant-based items. we have had a number of restaurants open with only plant-based for a month or two and have seen good performance. we think there is a strong level of demand in certain markets around the world. north america is a big opportunity. this will be a long-term process.
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this is a meaningful category for our business, but we are leaders in plant-based the u.s., in canada and internationally. we will continue to innovate and bring to customers what they are looking for. the key to plant-based is making sure it tastes great. we need to make sure it is good value for your money and has the other attributes people are looking for. jon: thanks, as always. the ceo of restaurant brands international breaking down orderly results. coming up, everyone makes mistakes with their money. scott minerd saying it is happening to him, too. the lessons he has learned next. this is bloomberg.
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taylor: some quick headlines -- cleveland tech ceo saying when i look at the data, i see a strong labor market and saying that there is a new framework. more of the focus on inflation. it is forward-looking. maybe a 75 basis point hike in september may be on the table. we have all made many mistakes. we speak with my manager and other leaders to hear what their mistakes are. we hear from scott minerd. here is an excerpt of his conversation. scott: i was working for price waterhouse. it was 1980. real estate had been skyrocketing in florida. i wanted to get in. i managed to scrape together everything i had and found a
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condominium that i could just get into. i bought it. francine: how much was the interest rate? scott: i got a subsidized mortgage, which was nine and 7/8 percent. >> going did you realize it was a mistake? scott: fully? a week after closing i had second thoughts. i began to realize that as prices begin to soften and decline, sales were going down. >> what was the listing price? scott: $54,000. you remember this. >> your monthly payment was? scott: $600. $50,000 was mortgage and taxes. if i decided i wanted to change jobs, i was tied down with this property. >> how did you extricate yourself from this investment?
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does it end with a happy story? scott: it was probably around 2002, i sold it at a loss. >> this was after you retired, and retired, came back to work at guggenheim, that is when you sold the apartment at a loss? wow. did you make a phone call about this. did you tell anyone about this experience? scott: no. i was hiding, embarrassed. everybody itself me do this -- everybody saw me do this. i had gone to my grandparents to get some of the down payment. >> this is something you could've learned from a textbook or did you have to being experience it? scott: it taught me a lot about the usefulness of history. florida is notorious for real estate booms and busts. it probably affected the way i
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looked at investments going forward, which is not to just listen to the conventional wisdom of what everybody else was paying, but to take what they -- saying, but to take what they were saying and found it. jon: this is bloomberg.
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am dark crumpton. president biden calling brittney griner's sentence of nine years unacceptable and says the white house will work in pursuit of her release. she was found guilty of drug possession and smuggling following her arrest in a moscow airport with cartridges containing canvas oil. the u.s. will broker a prisoner swap. charges filed in connection


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