>> there is something bigger going on in the bark market -- in the bond market than just the inflation story. >> portfolio managers have a very different view of inflation. >> central banks are not getting buoyed by inflation risk that seems to be persisting much longer than anyone forecasted. >> the fed is your friend during this period. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. jonathan: rinse and repeat. starting today at all-time highs. good morning. this is "bloomberg surveillance: early edition," -- this is "bloomberg surveillance," live on tv and radio. alongside tom keene and lisa abramowicz, i'm jonathan ferro. into tuesday, it is an eight-day winning streak. tom: can we say that this morning, we are on the edge of

steam major? jonathan: on 30's, we come in a couple of basis points to about 1.86%. the curve has been flattered over the past several months. there's a conversation no one real yields, deeply negative through the curve. tom: 30 year out to a record. i had a feature in the previous hour -- two hours ago, i should say. you look back 60 years, and i can't say we have never seen this, but the rarity of this back to the 1970's, it is singular. jonathan: lisa, you have talked about how supportive this bond market story is. lisa: it goes to the tina trade. what ins the tina trade -- what ends that he makes raid? you wonder -- the tina trade? you wonder.

people have this money saved, and look what we have. we had the scenario we are looking at right now. jonathan: we've got to talk about who is going to be leading the federal reserve beyond early next year. will it be chairman powell, or will he have a chair renewed brainard? ge in the premarket up by 13%. we have been talking about it for years. when larry culp came on board, we talked about it then. ge splitting into three. tom: what is fascinating about this, at mackenzie bain, every single mba wonk this morning is saying, do we need to do what culp has the courage and inspiration to do this morning? jonathan: where how late they already doing this. tom: you could say late in terms of decades and decades of failure. there's no question about it.

bu c -- but culp is delivering the goods on a plan that goes out to 2023. power of this breakup doesn't happen until 2024. jonathan: the stock is up by 13.5% now. let's get to the broader price action on the s&p 500 come up a couple of points on the s&p, advancing 0.04%. a lift on the nasdaq 100, up 26, advancing 0.16%. you want to do the dow? tom: no, i did it all through the morning yesterday. jonathan: on your own, talking to yourself. tom: i do my own data checks at home. jonathan: i can see that. your focus on real. lisa: i am focused on real yields going to a record low on the 30 year. also focused on the image of tom keene giving a data brief to vet bill every hour on the hour at

home. 8:30 am, focused on input prices for factory makers for manufacturers. the idea that we have seen them surge past 8%, there's an issue we are seeing in the supply chain and some of the issues in the labor market. at 9:00 a.m., we get a speech from fed chair jay powell, given the opening remarks at a conference. i find it fascinating we talk about what the difference will be between a fed chair jay powell and fed chair lael brainard. the bond market seems to think lael brainard will be much more dovish. just the idea of her heading to the white house caused a move in the two-year yield lower. at least, that was the analysis by a bunch of strategist. i am sure people will be saying it was something us completely unrelated causing those moves, but that is at least the narrative that seems to be percolating. 12:00 a.m., from the eia, they

are releasing the short-term energy outlook for the united states. this is key in determining whether the white house is going to release some of the reserves from the strategic petroleum reserves. how much can they really do on their own? are they getting collaboration with other nations potentially releasing some reserves? i honestly wonder what the messaging is on the heels of cop-26 that they are willing to do this in order to give gas prices low so that people keep using as much as they always used. jonathan: do you ever think you would pay that much attention to that report later today lisa: i saved tom from having to do -- later today? lisa: i saved tom from having to do that in your auction later today. jonathan: don't do that. how big is the 10 year auction? lisa: i believe $26 billion. jonathan: i know you have the mall -- to have them all stored upstairs, ready to talk about. your guide to the now with luke kawa, of ubs asset management,

and of course, formerly of bloomberg news. tom: senior moment. i don't remember. luke: great to be here. jonathan: before the dog ways and -- dog weighs in. the daylight between chairman powell and governor brainerd, how big is it? luke: from a market perspective, i don't think it is that big. don't think the possibility of having lael brainard versus a jerome powell is going to be that material. from an interest rate setting perspective, over the course of an economic cycle, i think both seem fairly committed to trying to discover the depths of what for employment could possibly be, but at the same time, both are going to be in a fed that is institutionally geared to minimize upside spirals and inflation risk. to a certain extent, you've got to think that both are going to

use realized inflation data to tell you about what a maximum employment actually is. tom: the gloom crew is in retreat. you set an optimistic construct at ubs, and you set an optimistic construct even if we get higher yields. how do we do that? luke: this is actually something to lisa's tina. i think it is actually tiaga, there is a good alternative, and that alternative is equities. if using about what is happening macro economically on the earnings side, we continue to have pretty historically outsized surprises to the upside. you get economic data that surprises to the upside again. on the flipside, you are having bonds by and large, you had more

surprises starting to filter through. sequential acceleration from q3 to q4. at the same time, inflation generally surprising to the upside. i think that is a scenario where you blend out the two and the equities actually make a very good alternative to bonds. even in the face of rising yields, the reason why yields should rise in our view is due to the endogenous strength we have ahead of us in a private sector recovery. for the past 10 plus years, every good growth of sport we have had has essentially been a function of a one-off fiscal package somewhere in the world, whether it is a u.s. or a big turn in the chinese credit impulse. this time we are pushing the ball downhill because of the stock of fiscal we already have. that gives us a strong runway for private sector activity into 2022. lisa: a lot of people say the reason for the momentum in the equity rally has been real

yields. do you understand why real yields are as negative as they are, why you're getting no money and actually giving back money on an inflation-adjusted basis to buy 30 year, 10 year, five year, and two-year notes? luke: five year, two year, yes. longer out the curve, i would be lying if i said i understood why real yields are as low as they are, much lower than they have been relative to their late march peak. there's a few theories you can espouse here. one is essentially that investors are overweighting the tales, and their arterial scenarios in which growth disappoints and real yields move negative. if that is the case, why aren't those more embedded in further out measures of inflation compensation? the view i default to is we have had a cycle now. growth was persistently very sluggish. we have a 30 year plus cycle of

just a grind lower in interest rates and real yields, and i think investors are extrapolating that to a certain extent, thinking we are going to have a lower peak this time. that is just the way it goes. the burden of proof is on the expansion to prove that it is strong enough to withstand some tightening, and i think that might be what needs to happen before real yields can be really unlocked to the upside. jonathan: let's do the important stuff now. ollie in or out? luke: this is there is no alternative, not financial markets. what's out there? jonathan: you let him go, didn't you? he went to spurs. luke: can't play five in the back with that squad. too much good offense upfront. can't stay hiding out in growth right now with all of the cyclical strengths we've got going. jonathan: i like how you made this relevant to the market. that is nice.

luke kawa of ubs, on his beloved manchester united there at the end. tom: does he go this week? do they do it as quickly as the tots? jonathan: it looks like the manager is taking a break. tom: have you ever seen it like this? i'm sorry, folks, i pretend, but i am not really up to speed. new castle, the tots, have you ever seen it like this? jonathan: it happens now and again. manchester united have just never been able to replace -- tom: i love west ham liverpool. was it a proper game? jonathan: that was just beautiful. tom: i was blown away. jonathan: andrew price was thrilled. steve major, too. west ham fans. yields in three basis points. 1.458 4%. heard on radio, seen on tv, this is "bloomberg surveillance." ♪

ritika: with the first word news, i'm rick and cooped up. general electric will split and hit three companies focused on health care, power, and aviation. it is the most sweeping and significant changes for ge since larry culp became ceo back in 2018. the health care division will be the first to be spun off in early 2023. president biden has interviewed fed governor lael brainard for the top job at the central bank last week. it is a sign that federal jerome powell has a serious rival to his current term that ends in february. spacex has returned more astronauts from the international space station. its mission splashed down off the coast of florida late monday, completing in hundred 99 days in space. the space agency was forced to alter its launch and lending schedule due to disruptive whether over the past two weeks. in nicaragua, president daniel ortega has one a fourth

consecutive term -- has won a fourth consecutive term. president biden is pledging to use diplomacy to hold him accountable for abuses. electric truck maker review and automotive has raised money for a listing that could price at $17 billion. it would be the seventh largest u.s. ipo on record. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

♪ >> the outlook for inflation and unemployment i summarized a moment ago turn out to be the actual outcomes, then i do

believe these three conditions for raising the target range for the friend bait -- for the funds rate will be met by year-end 2022. jonathan: vice chair of the die, but how long -- of the, but for how long? not even discussed at the moment what happens to him. tom: this is an important point. what is amazing is the credit out of the pandemic is so different than the navelgazing of 2008, 2009, and 2010. it is completely different than the analysis, the scrutiny of the financial crisis. jonathan: and at times when chair powell hasn't given fantastic communication, we have sat there and waited to hear from vice chair richard clarida. lisa: we have gotten used to the big three having control over the federal reserve. now that president biden can really name leadership, is there a top three that will have the same kind of control, or will there be more uncertainty around

fed policy than there has been when it has been led by the top a little more? jonathan: the truth is it takes time. we had president mario draghi with peter pratt alongside him, and then the leader of the ecb. when they stepped away, it was always going to be difficult for president lagarde to come in and bring on the likes of philip lane as the chief economist and start that effort all over again. it is difficult. tom: powell has dramatically improved his communication. you lived it. did draghi improve his communication? jonathan: as things went along, without a doubt, and they all do, but it takes time. the reason you don't want these things to happen at inflection points with policy is precisely because it takes time to get your communication together, and it took time for president lagarde as well. she took on that job in the crisis hit pretty soon after. on the s&p, a nice lift in this equity market. all-time record high after

record high. yields down a couple of basis points on tends to 1.463 6%. your mover of the morning's ge. general electric, the word from larry culp today is a defining moment from ge. that company splits into three. off the highs of this morning, we are up by about 7%. tom: lots to talk about their on the history on the path forward for general electric. right now on the federal reserve system, front and center, annmarie hordern joins us on the politics of this come our washington correspondent. it is powell, it is brainard. we all understand they are different. let's go to the wokeness of the moment, clearly in support of brainard as the new chairman. focus on the politics of the white house that changed the first tuesday of november. annmarie: what changed was the fact that this democratic party

is realizing that potentially, their rhetoric is moving too far to the left. james carville has said that what happened on tuesday was the fact that the party is too "wo ke," and it is just the rhetoric that is not matching what the electorate wants to hear. when you have someone like governor brainard potentially monetary policy wise very similar to chair powell, but she would be a certain nod to the progressives. tom: why? i want to know why she's a nod. i want to know why the economists teaching in a mighty is a no -- at m.i.t. is a nod to the woke. annmarie: she is certainly tougher on banking regulation, and that is why you have the likes of elizabeth warren recently calling jay powell and what he has done with banking regulation "a dangerous man,"

but i think there is something missing in the conversation this morning. this summer, we reported that treasury secretary janet yellen backs the reappointment of powell. will president biden go against the own treasury secretary, or is this just all a game? she was also up for the supervisory position, so potentially you could see powell being reappointed, or going to the supervisory position. but certainly, he is meeting with her, and in our reporting, she is meeting for the top job, and that is certainly a nod to the progressives. lisa: we are still focused in washington, d.c. on the bipartisan infra structure plan that was just past. where will we get the labor to accomplish some of these programs given the shortages we have seen across corporations? annmarie: it is a tight labor

market. the participation rate is not up where it was pre-pandemic. i've got to say, that is not the topic of conversation among the political circles in washington. they are trying to make sure they transform friday's win into an actual win. we spoke to some of the progressives that poured some cold water on it. this should have been a huge win , and some people in the democratic party are treating it like it wasn't this huge victory , that they did something the prior administration could not do. we will see the president really touts that. overnight, he joined local 12 in cincinnati talking about the billions of dollars that will go to ohio, and finally fixing that bring to bridge he has called numerous times and so many presidents have promised to fix. they will try to get on the same page to pass that reconciliation package, which is going to be a huge undertaking. there's a number of things congress needs to get done

before the end of the year, and time is really running out. lisa: is the democratic party getting more cohesive as they feel the pressure from one happened on november 3, or is this the same party that was splintered earlier in the year? annmarie: same party. i think what you saw friday evening come down to the wire in terms of having the votes to try to get across the finish line, the heart infrastructure, the president himself putting out a statement saying when these votes come up, please vote yes, this was after they lost virginia in a tight race -- bridging you and in a tight race in new jersey. i think it will be very difficult to cast this narrative with only to mccright votes -- to pass this narrative with only democrat votes. jonathan: it is on the radar, top of mind for us, who is the next fed chair. of course it is. i just don't know how big this is playing down in washington. joe mathieu indicated it is not really. tom: i agree with that.

i went back and looked at some of the newspaper reports under the greenspan redo i bush senior, and it was the same idea. it was a big debate for a select group, no question about it. jonathan: do you remember when they floated the larry summers nomination in the obama years? that was shut down pretty quickly. tom: these are called trial balloons. jonathan: we seem to be playing that game again. tom: i take immense issue with the politicization of lael brainard. she is a first-class academic at an extremely young age in applied economics. she did tangible work at m.i.t. m.i.t. is just loaded with talent as she stood out there. jonathan: she is fantastic, phenomenal, and no one would disagree with you on that. tom: if she was a guy, would we be having this debate? jonathan: i think we would be. she made a did nation to a political campaign of hillary clinton. bottom line.

no judgment. she's on the federal reserve, a sitting fed governor, making a political donation. gender has nothing to do with it. tom: fair. jonathan: from new york, this is bloomberg. bloomberg.

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♪ jonathan: two hours away from the opening bell in new york city. eight day winning streak on the s&p 500. looking to grind out a ninth on the s&p, the longest daily winning streak of the year so far. equity futures up a single point, advancing 0.02% on the s&p. that is the equity story. here's the bond market picture. your 10 year yield comes in two or three basis points to about 1.4636%. on 30's, down about two basis points. that is just the nominal story. walk me through reals because real yields coming all the way down. lisa: take a look at 30 year real yields, now at -0.53%. that is a record for this. what makes this make sense to anybody, the idea that going

out, you are getting a negative yield of 0.5% for 30 years based on where in place and expectations are right now? jonathan: do you know what mike collins of pgim said to me? if you go into a risk-free asset, you do not deserve a positive real yield. the world has changed. if you go into the risk-free asset, you do not deserve a positive real yield. that is the story in the bond market. switch up the board and finish on this. talked about it a little bit this morning already. this is happening even as economic indicators starts applying to the upside. if you look at the surprise index, that is starting to reflect positive on the citi economic surprise index. the data is getting better than expected. we saw that with payrolls last friday. tom: it is the abend flow of the haves at -- the ebb and flow of the haves and have-nots. a lot of people are loving this and a lot of people are really struggling. jonathan: do you think we

deserve a positive real yield on the risk-free asset? tom: we are so far from the positive real yield, that is not a debate. we need to show some form of calculus to turn it around. . jonathan: mike collins thinks we don't. lisa: i think that is fascinating, especially at a time when you have such a high savings rate. what does that mean for money market funds, but also in terms of why is that not pushing people to spend more of their money? jonathan: an interesting point. we have even had negative you nominal yields in europe, and has that dynamic changed much? are people going out and spending in a big way? lisa: no. jonathan: are they doubling down on saving? is it having those unintended consequences of very low interest rates? lisa: the answer is yes, if anyone was wondering. it is a rhetorical question. jonathan: are we still live? i think we are. [laughter] let's get to romaine bostick. romaine: good morning. all of the talk today is going

to be about general electric. those shares higher by about 8% in the premarket. general electric aviation, health care, and energy and power all going to be spun off into three separate companies. of course, no company over the past several decades has been emblematic of corporate conglomerates than general electric, a conglomerate no more. we know the writing has really been on the wall for quite some time. go all the way back to the 1970's, and the financial wizardry that jack welch brought to that model, but that house of cards really came crashing down a few decades ago, right after the turn of the century. the financial crisis accelerated that, and now, ever since larry called has taken over the helm -- larry culp has taken over the helm, selling off assets, consolidating others, and now the decision announced this morning to spin off these businesses into three separate units. investors seem to like that. this is a pretty gutsy call by larry culp. a lot of people would make the argument that the conglomerate

motto itself isn't necessarily dead. maybe you keep this together, maybe there is still some success to be had out of that model. some arguments say you still see it here in the united states with companies like amazon, or some would argue -- which somewhat argue is basically a modern version of that old conglomerate. this is going to be the stock of the day, no matter where it ends up. flip up the board real quick. just a couple of other quick movers to keep an eye on. lumen our technologies has a great deal with nvidia, providing those autonomous sensors which at some point they're going to make their way into a lot of cars. smile direct club down 23% on a huge drop-off in sales. their guidance for the fourth quarter is about 30% below street consensus. roblox had earnings last night, they beat handley above what the street was looking for. tom: thank you so much. greatly appreciate it. the feedback we have had on this show shows what really does matter.

take $100 a barrel oil and do the math on what that means for a gallon for gas, and you get out to $4.77 a gallon, and maybe you migrate out to five dollars a gallon. francisco blanch joins us with your future inflation. want to focus on supply rigidities. why do we have supply rigidities around our increasing oil demand? francisco: thanks for having me. i think there are two main reasons, the past and the future. if you look at the past, we have had terrible returns in the energy sector. it has been by far the worst performing sector across the s&p 500 in the last six or seven years, so investors are really tired of throwing good money after bad money. if you look at the future, the other part of the rigidity is the uncertainty around the past four global oil and gas. i think a lot of companies will

face a dilemma from their investors, from management teams, and from policymakers. where is oil demand going? we just don't know how fast the energy transition is going to happen, and that in itself is a big hurdle to bring money back into the sector. we also don't know what the policy is going to look like in the next two years, five years. so the past and the future make it a lasting supply anchor right now. tom: we have heard from politicians whose fallback is they study one global price. you are a true student of this. should nations craft policy on hydrocarbons, or for that matter, commodities, based on one global price? francisco: the answer is no. prices for energy are local in many instances. that is certainly true for most electricity markets, and is also

partially true for natural gas. in the case of oil, it is less true. oil is more of a global market, and of course, any case of coal, there's also a lot of markets. so it depends on where you are looking, but each country and region faces different pricing on energy for the most part. so there is a global price which is crude oil, the price of brent, but then there's a lot of local issues. lisa: brent crude, you were talking about $120 a barrel. this is your new price target coming into the end of the first half of. next year what gets us there, -- first half of next year. what gets us there, given that you are talking about -- that you are hearing about releasing oil reserves to lower the price of gas? francisco: i think using the spr at the same time you are doing

stimulus is a bad idea. it is really there to cope with emergencies. is it an emergency that we have a booming demand for oil, that we are coming back from covid? not really an emergency. i think you have to let the market do its work, and prices are signals that work through the demand equation and slow down consumption as they should, rather than throwing spr oil on them. i think the reason we upped our forecast from $100 to $120 for next year is the global gas crisis we are facing. again, not something that the u.s. is necessarily very exposed to because of all of the natural gas you have in the u.s., but some thing that europe and asia have become very exposed to this upper demand shift. again, it's gas to oil consumption is a big return on

travel. yesterday was the first day that the u.s. allowed international vaccinated travelers to come into the country. it will lead to a booming air travel window for the next six months, and presumably you're going to have asia coming back in the second or third quarter of next year as vaccines rollout there. lisa: you said something i want to get more elaboration on, that perhaps the u.s. biden adminstration should pare back stimulus before releasing the spr. are you implying that you think the stimulus is behind the demand for oil that has led to the increase in prices that we have seen? francisco: i think that is pretty straightforward. the answer is yes. stimulus has been behind the impulse we have seen for global demand. this has created a huge surge in chinese energy consumption. chinese thermo fuel demand is up 11% year on year, mostly because

of the surge you have had in domestic consumption there, factories and what have you, so we are stimulating the economy. ultimately, i think one debate we need to have is, growth is very closely linked to energy consumption, so if we want to have a different kind of economy , we want to have low hydrocarbon prices and a green economy and strong growth, we've got to have better policies. i think that is one area of discussion that frankly, i don't hear enough about. how are we going to coordinate all of those? jonathan: before you run, i want to get something for you to reiterate. this $100 crude call, from what you have seen over the last month or so since we last spoke to you, more or less likely, just in terms of what you are seeing? francisco: i think there's going to be a competition between gasoline and diesel in the first half of next year. that is why we are bullish because we think there is not

only supply-side rigidities, but also demand-side rigidities. gasoline, diesel, jet fuel demand is all coming back. every other commodity has spiked. oil, at 80 follo -- at $85 a barrel, has been the laggard of the commodity compex. jonathan: thank you for that. i appreciate it. a nuanced view at the end there, important to get our heads around come on this call for crude. tom: five dollar a gallon gas, what does it mean for the country? huge. jonathan: even if they can't do much about it. it a talk p.m. our -- 8:00 a.m. our, we will catch up on international travel worldwide. heard on radio, seen on tv, this is bloomberg. ♪ ritika: the giant general electric built by jack welch and his predecessors will no longer

exist. ge says it will split into three companies focused on health care, power, and aviation. health care will be spun off in 2023. renewable energy, power and equipment, and digital businesses will be combined into a separate unit that will be spun off in 2024. the remaining company will be ge's airplane engine operation. a warning from the federal reserve forget the central banks as prices of risky assets keep rising, and that makes them more susceptible to plunges if the economy takes a turn for the worse. the fed cited stable coins as an emerging threat. it also said fragility in china's commercial real estate sector could spread over into the u.s. in china, prices that companies charge for their output probably rose at the fastest rate in more than two decades last month. the producer price index is forecast to have risen 12.3% in the last year. the biggest reason, the continued commodity boom and an energy crunch. southwest gas has rejected a non-solicitor

takeover from carl icahn. it says it is not in the best interest of shareholders. he holds a 4.9% stake in southwest gas. it is a sign that nissan is still on track to climb out of the red this year. the carmaker raised its annual operating outlook. costs have hammered production and demand for cars, and weaker yen are boosting profits for some japanese automakers. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm ritika gupta. this is bloomberg. ♪

>> india is sort of on the

takeoff stage now, where china was 10 years ago, so it's got a long way to go and it is going to be a long run. of course, there are going to be pressures along the way, but otherwise, india is really on a run. it is going to do very well. jonathan: mark mobius on emerging markets, on india specifically. good morning. tom, lisa abramowicz, and jonathan ferro. we are -0.1% after an eight a winning streak on the s&p. it has been a while since we've seen some red on the screen. the s&p 500 just a little bit softer. yields come in three basis points. the race for the fed is on. waiting to hear something from the white house sometime in the near term. your premarket mover this morning, and may be the week, ge splitting into three, health care power, and aviation. the years of jack welch well behind us now. the stock is up more than 7% in the premarket. tom: without question, our wall

street interview of the day, though levinsohn joins us -- joel levinsohn joins us of bloomberg intelligence. this is about really looking acutely at what any given industrial company is doing. when you split off three companies, even over a timeline, the pr, the spin and all of that, who gets the liabilities? joel: they are all going to get some of the liabilities. my guess is if they follow the playbook, what you will wind up having is the energy company and the health care company will issue debt and use the proceeds back to the parent to lay down some of the liabilities, but the aerospace company will wind up with the majority of the liabilities because it is the company that can handle the most liability. tom: you wrote 15 or 20 days ago about the idea of a piece of this train wreck being junk

junior subordinated paper, on the aircraft leasing. i get is a small part of it, but i think a lot of our viewers and listeners would be surprised that an adult like you is writing about junior supported data garbage. joel: that's true, but part of the ge business has preferred debt that is a crossover credit, meaning that it is junk on one side that is likely to remain investment grade in the future. lisa: going forward, this will be a tale of many different bonds, as we parse out what the capital structure of the new entities are. i am wondering, for my larger perspective, whether the de-conglom -- the de- conglomerate is asian -- the de-conglomeratization is the

point here. joel: when you have diversified businesses so you really can't leverage the technology to a great extent, it is not the same as where it is a software-based platform across different verticals. here i think it is clearly a case for making it into three unique companies. i would also say it makes my eyes move towards an emerson electric or 3m, where you might not have the same kind of consistency in their portfolios, and maybe those might be next to see breakups. lisa: do you think the reaction we are seeing in equities and even in bonds due to the split up of ge will encourage some of the separations? joel: without a doubt. i think people like having straight, vanilla stories with a growth outlook they can understand. it is never really great in a diversified conglomerate because in that case, there's always some companies doing well and other companies that aren't doing as well, so i think you will see more breakups happen in the future.

tom: how does amazon 20 or 30 years out, with their different businesses, not become what you just described? joel: i guess that will become an issue once amazon pe is s&p 500 level, right? same thing with tesla. tesla has a variety of different businesses inside of it, but when the markets are hot for your stock, it doesn't really make a difference. tom: the market exuberance, i am going to stay on amazon, it is a real company. some people would say tesla is not a real company. but on something like amazon, which is like jack welch right now, how do they avoid in your debt expertise running into the challenges we saw with ge? joel: the market is always about growth. as long as you have growth, you will be ok. tom: so this is a story about they got buried because of growth. joel: they did, and that is

ready what happened. you had a buildup of the capital business, which became too risky, too levered, and with lower quality assets. lisa: just to wrap this all together, have you rethought the breakup of any companies -- the potential breakup, i should say, as a result of what we have seen with supply chain issues, but we have seeing with respect to pricing power when it comes to the bigger companies? joel: i really haven't, but there are a lot of diversified industrials out there where i think you have to question, do the businesses make sense together? to me, something like emerson electric is not belong together, where you have a home depot type business where you are selling home consumer goods, as well as a automated business where you're dealing with petrochemical companies. it doesn't really come together. i think stanley black and other is another situation. 3m also gets put into question.

i think shareholders and bondholders need to take notice because as you can see with ge, it is going to work out pretty well for them today in terms of how people are going to think about it as a streamlined entity. jonathan: can we talk about how wrong we all were on tesla credit? [laughter] i just want to bring that up quickly. what a run. joel: it has been massive, and it certainly has played out well . they are following many of their evpers in getting rid of all of their debt. tesla is trading inside of companies like so lantus -- like solantis, which is a bbb credit. to the market is thinking it is worthy of investment grade polity area. -- investment grade polity. tom: can you imagine joel lovington and lisa abramowicz at a bar having a conversation? jonathan: talking about credit.

it would be pretty sad, i imagine, when lisa walks in and he goes, i will have another one. make that a double. lisa: you paint such a flattering picture. tom: can we make this a seven-year auction? jonathan: joel, thank you. lisa:lisa: low blow, tom. [laughter] jonathan: tends today, tom. lisa: $25 billion of 30 years tomorrow. tom: the reach here of reginald jones, who got all this started, this goes back to my youth and accompany called ldv. i'm sorry, conglomerates just don't work. what can i say? i think this amazon question is serious. lisa: that was the view three years ago, and then suddenly at the end of last year, be war saying actually, -- last year, people were saying actually, some of these may make sense if they have pricing power. the key is the synergy. i hate that word. i know you do, too. tom: we've got breaking news.

peloton traduced his strength -- peloton introduces strength training tv device with camera. jonathan: i thing it is fair to say that industrial conglomerates don't work. this is bloomberg.

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>> you have to be humble about the structural changes that covid might haven't looked it. >> the growth outlook is pretty good. >> we are going to be looking harder at what is next moment. >> everyone knows the labor market is on fire. >> you have to see robust growth for much higher rates to be accessible. -- to be acceptable. >> this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. on radio, on television, it is a simulcast. "bloomberg sla