Company Notes Digest 9.22.17

Each week we read dozens of transcripts from earnings calls and presentations as part of our investment process. Below is a weekly post which contains some of the most important quotes about the economy and industry trends from those transcripts. Click here to receive these posts weekly via email.

This week’s post is a short one for a wonderful reason: my wife and I welcomed our first child into the world. It’s been an incredible experience; I’ve never felt more love for anyone.  We have started a new chapter that is filled with anticipation and excitement.  Life has definitely changed.

Compared to that, nothing that happened in the economy last week seems very important. Still, the Fed started a new chapter of its own and so I didn’t want to miss chronicling what is probably the biggest economic event of the year.

Next week is a light week for earnings, so I’ll probably skip it. But, in the meantime, I’d love to hear words of wisdom on parenthood from our readers. Please feel free to respond to this email with any words of advice. Depending on the response, I’ll try to put something together for next week.

The Macro Outlook:

The Fed will wind down its balance sheet

“in October we will begin the balance sheet normalization program that we outlined in June. This program will reduce our securities holdings in a gradual and predictable manner.” —Fed Chair Janet Yellen (Central Bank)

The pace will gradually accelerate throughout 2018

“For October through December, the decline in our securities holdings will be capped at $6 billion per month for Treasuries and $4 billion per month for agencies. These caps will gradually rise over the course of the following year to maximums of $30 billion per month for Treasuries and $20 billion per month for agency securities and will remain in place through the process of normalizing the size of our balance sheet.” —Fed Chair Janet Yellen (Central Bank)

There is a high bar to resuming reinvestment

“you asked me what would it take for us to resume reinvestment…if there is a material deterioration in the economic outlook, and we thought we might be faced with the situation where we would need to substantially cut the federal Funds Rate, and could be limited by the so-called zero lower bound, it, it is that type of determination that our committee is saying would, might lead us to read, to resume reinvestment…so, that is a somewhat high bar to resume reinvestments…to some small negative shock, our first tool, our most important and reliable tool will be the federal funds rate, but if there is a significant shock that some material deterioration to the outlook, we would consider resuming reinvestment.” —Fed Chair Janet Yellen (Central Bank)

The fed wants to focus on the fed funds rate

“as we’ve noted previously, changing the target range for the federal funds rate is our primary means of adjusting the stance of monetary policy. Our balance sheet is not intended to be an active tool for monetary policy in normal times. We therefore do not plan on making adjustments to our balance sheet normalization program.” —Fed Chair Janet Yellen (Central Bank)

The fed funds rate is still accomodative

“my colleagues and I on the Federal Open Market Committee decided to maintain the target range for the federal funds rate at 1 to 1-1/4 percent. This accommodative policy should support some further strengthening in the job market.” —Fed Chair Janet Yellen (Central Bank)

Further increases are warranted

“we continue to expect that the ongoing strength of the economy will warrant gradual increases in that rate to sustain a healthy labor market and stabilize inflation around our 2 percent longer-run objective.” —Fed Chair Janet Yellen (Central Bank)

Low inflation is likely due to transitory causes

“we believe this year’s shortfall in inflation primarily reflects developments that are largely unrelated to broader economic conditions. For example, one-off reductions earlier this year in certain categories of prices, such as wireless telephone services, are currently holding down inflation, but these effects should be transitory.” —Fed Chair Janet Yellen (Central Bank)

Inflation has been low but that doesn’t mean it’s going to continue

“I’ve mentioned a few idiosyncratic things, but frankly, the low inflation is more broad-based than just idiosyncratic things. The fact that inflation is unusually low this year does not mean that that’s going to continue” —Fed Chair Janet Yellen (Central Bank)

Inflation expectations have come down for all of us

“I think all of us, both market and FOMC participant’s path, paths have come down, not in the last couple quarters, but over the last several years. There’s been a growing recognition that the so-called neutral interest rate…seems to have come down” —Fed Chair Janet Yellen (Central Bank)

Managing this will likely be up to future policymakers…

“It will be up to future policymakers to decide, in the event of a severe downturn, whether they think it’s appropriate to again resort to balance sheet, to adding, adding assets to a balance sheet” —Fed Chair Janet Yellen (Central Bank)

Yellen has only met with Trump once

“I have said that I intend to serve out my term as chair, and that I’m really not going to comment on my intentions beyond that. I will say that I have not had a further meeting with President Trump. I met with him early in my term, and I’ve not had a further meeting with him.” —Fed Chair Janet Yellen (Central Bank)

Full transcripts can be found at www.seekingalpha.com

FOMC Press Conference Notes

Still view policy as accommodative

” my colleagues and I on the Federal Open Market Committee decided to maintain the target range for the federal funds rate at 1 to 1-1/4 percent. This accommodative policy should support some further strengthening in the job market”

Balance sheet normalization

“We also decided that in October we will begin the balance sheet normalization program that we outlined in June. This program will reduce our securities holdings in a gradual and predictable manner. ”

Economic growth will be impacted by hurricanes

“In the third quarter, however, economic growth will be held down by the severe disruptions caused by Hurricanes Harvey, Irma, and Maria. As activity resumes and rebuilding gets underway, growth likely will bounce back. Based on past experience, these effects are unlikely to materially alter the course of the national economy beyond the next couple of quarters. ”

Shortfall in inflation primarily reflects developments unrelated to the economy

“we believe this year’s shortfall in inflation primarily reflects developments that are
largely unrelated to broader economic conditions. For example, one-off reductions earlier this
year in certain categories of prices, such as wireless telephone services, are currently holding
down inflation, but these effects should be transitory. Such developments are not uncommon
and, as long as inflation expectations remain reasonably well anchored, are not of great concern
from a policy perspective because their effects fade away.”

Nonetheless our understanding of inflation forces is far from perfect

“Nonetheless, our understanding of the forces driving inflation is imperfect, and in light of the
unexpected lower inflation readings this year, the Committee is monitoring inflation
developments closely. As always, the Committee is prepared to adjust monetary policy as
needed to achieve its inflation and employment objectives over the medium term.”

Fed funds rate remains below its neutral level

“although the Committee decided at this meeting to maintain its target for the federal funds rate, we continue to expect that the ongoing strength of the economy will warrant gradual increases in that rate to sustain a healthy labor market and stabilize inflation around our 2 percent longer-run objective. That expectation is based on our view that the federal funds rate remains somewhat below its neutral level–that is, the level that is neither expansionary nor contractionary and keeps the economy operating on an even keel. ”

Decline in securities holdings will be capped

” For October through December, the decline in our securities holdings will be capped at $6 billion per month for Treasuries and $4 billion per month for agencies. These caps will gradually rise over the course of the following year to maximums of $30 billion per month for Treasuries and $20 billion per month for agency securities and will remain in place through the process of normalizing the size of our balance sheet. By limiting the volume of securities that private investors will have to absorb as we reduce our holdings, the caps should guard against outsized moves in interest rates and other potential market strains”

Our balance sheet is not intended to be an active tool for monetary policy

“Finally, as we’ve noted previously, changing the target range for the federal funds rate is
our primary means of adjusting the stance of monetary policy. Our balance sheet is not intended
to be an active tool for monetary policy in normal times. We therefore do not plan on making
adjustments to our balance sheet normalization program. But, of course, as we stated in June, the
Committee would be prepared to resume reinvestments if a material deterioration in the
economic outlook were to warrant a sizable reduction in the federal funds rate. ”

Not easy to get a clear read on implications of asset prices for overall outlook

” So developments affecting asset prices and longer-term interest rates, the exchange rate all of those aspects of financial conditions factor into our thinking, but it’s not easy to get a clear read on the implications of asset prices for the overall outlook”

Not going to change the path of reinvestments for small shocks

“That’s our go to tool, that is what we intend to use, unless we think that the threat to the economy is sufficiently great that we might have to cut the federal funds rate after all we’ve moved it up to 1 to 1-1/4 percent and expected to go up further. But a very significant negative shock to the economy, could conceivably force us back to the so-called zero lower bound. We have said if there were that type of material deterioration in the outlook, where we could face a situation, where the federal funds rate isn’t a sufficient tool for us to adjust monetary policy. We might stop we might stop roll offs from our balance sheet and resume reinvestment, but as long
as we believe that we can use the federal funds rate as a tool that is what we intend to do. So if there are small changes in the outlook that require a recalibration of monetary policy, we will change our anticipated path and setting of the federal funds rate, but not for example change the caps on reinvestment, or stop, continue reinvestment for a few months and then change it. We think that provides greater clarity to market participants, about how policy will be conducted and will be will be less confusing and more effective, in terms of conducting policy.”

Can’t easily explain why inflation has been this low

” there is a miss this year I can’t say I can easily point to a sufficient set of factors that explain this year why inflation has been this low. I’ve mentioned a few idiosyncratic things, but frankly, the low inflation is more broad-based than just idiosyncratic things. The fact that inflation is unusually low this year does not mean that that’s going to continue”

Inflation expectations have come down for all of us

” I think all of us, both market and FOMC participant’s path, paths have come down,
not in the last couple quarters, but over the last several years. There’s been a growing recognition that the so-called neutral interest rate, consistent with the economy operating at maximum employment, that that rate seems to have come down, and most of the economic papers that, in research are bearing on this topic, suggests that it’s quite low”

Not had a further meeting with Trump

” I have said that I intend to serve out my term as chair, and that I’m really not going to comment on my intentions beyond that. I will say that I have not had a further meeting with President Trump. I met with him early in my term, and I’ve not had a further meeting with him.”

It’s a fairly high bar to resume reinvestment

” you, you asked me what would it take for us to resume reinvestment, and I can’t really say much more than we said in the guidance that we provided, which is that if there is a material deterioration in the economic outlook, and we thought we might be faced with the situation where we would need to substantially cut the federal Funds Rate, and could be limited by the so-called zero lower bound, it, it is that type of determination that our committee is saying would, might lead us to read, to resume reinvestment. So that’s, our committee has been unanimous and affirming this statement of intentions, so, you know, I think that’s where our committee stands, that so, that is a somewhat high bar to resume reinvestments, and that’s why in answering previous questions, I would say well, you know, to some small negative shock, our first tool, our most important and reliable tool will be the federal funds rate, but if there is a significant shock that some material deterioration to the outlook, we would consider resuming reinvestment.”

Company Notes Digest 9.14.17

Each week we read dozens of transcripts from earnings calls and presentations as part of our investment process. Below is a weekly post which contains some of the most important quotes about the economy and industry trends from those transcripts. Click here to receive these posts weekly via email.

This week’s post features more highlights from investor conferences that were held this week.  Economic commentary remains optimistic.  The US economy appears to continue to perform well and no one sees signs of recession.  Still, inflation seems to be creeping into the system, and monetary policy is changing, which has historically created recession.

Barclay’s financial services conference usually attracts the industry’s top CEOs.  Jamie Dimon spoke there and was colorful as usual.  He reminded the audience that panics do happen and made headlines for calling Bitcoin a “fraud.”  Bitcoin investors should think about what happens when these two ideas intersect.  If Bitcoin is really a currency, it will probably experience a run at some point (as all currencies have).  When it comes to Bitcoin, which is backed by no assets, who is the buyer of last resort and at what price?

The Macro Outlook:

The US economy is doing fine

“The U.S. economy is doing fine…It’s the longest – one of the longest recoveries we’ve ever had, 10 years is the longest, I don’t think that has to end or not end. I would say a very important factor is it’s been half of a normal recovery.” —JP Morgan CEO Jamie Dimon (Bank)

It’s been a long cycle, but there aren’t signs of recession

“the last recession started in beginning of ’08, we’re a couple of months from beginning at 2018. So, it feels like we’ve been out there for a long time…the data that we’re used to seeing, none of it really indicates that a recession is coming in the foreseeable future.” —CBRE CFO Jim Groch (Real Estate)

Small and medium sized businesses are much more confident

“I’ll tell you that small and medium-sized business people are much more confident, much more optimistic…after the election they immediately became more optimistic and started moving towards investing what I call passive or replenish investment…now they are not doing expansion or investment…they are waiting on I think mostly tax reform. I think when you see tax reform, I personally believe…that will move then from just passive or replenishment investing to expansion oriented investment” —BB&T CEO Kelly King (Bank)

Credit quality is almost the best it’s ever been

“You know if you look at credit, it’s almost the best it’s ever been ever.” —JP Morgan CEO Jamie Dimon (Bank)

 

But inflation is picking up

“Another positive sign is that we had overall product cost inflation for the first time since 2015. As you know, the change from inflation to deflation and back again is one of the toughest environments to operate in for our stores” —Kroger CFO Mike Schlotman (Grocery)

And monetary policy is changing

“QE is still going on…all you hear now is talk about reversing that…so I’m not predicting bad things, but you don’t really know…We hope it’s seamless, we hope it’s painless…what is the chance it’s not? We never had QE therefore we never had the reversal of QE and it will have some consequences when people reverse it…So my view is, hold onto to you hats” —JP Morgan CEO Jamie Dimon (Bank)

Tighter monetary policy has historically been a leading indicator of recession

“As rates move up naturally, it will start to put some people or companies under stress. So higher rates is a little bit of a double-edged sword.” —Suntrust CEO Aleem Gillani (Bank)

There will come a day when people panic

“It’s definitely cyclical folks, I mean you will have a volatile market…people panic. People panicked in 2008 and 2009, they panicked in the 1989, they panicked in 1994, they panicked in Asia in 1997, they panicked in the Internet thing in 2000, the people will panic, you will panic. You will all be running through the door like everybody else and regulators will panic and – come on, and I just said, the government support $12 trillion securities that has to have some effect on depressing volatility…so the market will become more normal again one day” —JP Morgan CEO Jamie Dimon (Bank)

Until then, while this lasts it’s terrific

“overall, we’re in a very benign credit environment, I think you got to be careful when you are in a benign credit environment like this…because you do want to believe that it’s going to continue forever, but geez while it lasts, it’s absolutely terrific.” —Wells Fargo CEO Tim Sloan (Bank)

International:

Global air travel is growing faster than GDP

“Traffic patterns around the world continue to be very strong, we’re running about 7.7% passenger traffic growth year-to-date. We expect nominally 6% to 7% rate over the next several years and over the 20 year timeframe we’ve assumed a 4.7% growth rate” —Boeing CEO Dennis Muilenburg (Aerospace)

Financials:

The regulatory environment has been slow to change because regulators’ seats are still empty

“I think the regulatory environment has not changed a lot because we don’t have the people in their job, so you now have the OCC head which was passed by the Senate, Randy Quarles, Fed Chair, Vice Chair just passed by the senate. You don’t have an FDIC person yet, so you are not going to have these huge changes in regulations.” —JP Morgan CEO Jamie Dimon (Bank)

Loan growth has slowed because of a spike in repayments

“in July…we had a higher guidance for loan growth…We’re now revising that to be slightly down…in late July, early August, when we saw a material reduction in long-term rates, there was a huge spike in payoffs. And so that’s kind of an uncontrollable event…So we’re not concerned about loan growth. We believe it will be steady and solid as we go forward.” —BB&T CEO Kelly King (Bank)

Commercial properties are trading at 4 caps

“we’re seeing maintained high level of competition for the trophy assets, Class A properties like we own. San Francisco 222 Second traded at around the 4% cap. That’s $1,200 – low $1,200 a foot…San Diego Diamond View Tower, which is in downtown San Diego, near the ballpark traded about a week ago, going in high 4s, like 4.7%, $675 a foot. And there’s a building in Del Mar, which is our largest submarket. It’s in Ashgrove 4.5% going in yield. So prices are strong. In San Diego, we’re seeing 50 to 100 basis points over San Francisco spreads.” —Kilroy CFO Tyler Rose (REIT)

Bitcoin is a fraud

“it will eventually blow up. It’s a fraud okay. And honestly I’m just shocked anyone can’t see it for what it is.” —JP Morgan CEO Jamie Dimon (Bank)

Consumer:

Broadcasters are offsetting ratings declines with higher ad prices. Can this last?

“all-in-all, the ratings decline gets offset by the CPM increase and the total dollars continue to be very stable and that’s critical and that happened again this year and in the scattered market, we’re seeing continued strength there.” —Comcast CEO Brian Roberts (Media)

The true economics of the digital economy are still unproven

“the more time I spend talking to the advertising folks…and [ask] are you getting paid on the Facebook platform, no…and are advertisers getting their value from some of those other platforms for what they say they’re getting versus what they are getting. There is a lot of swirl around those questions.” —Comcast CEO Brian Roberts (Media)

“All the major traditional grocers have been really working on omni-channel, click-and-collect, Home Delivery, that’s been something that everyone’s been doing. Nobody’s really made any money on it, but it’s really an amenity that I think consumers are demanding. You are also going to see meal kits from Blue Apron and others continue to be interesting even though, I’m not sure any money is made there either.” —Kimco CEO Conor Flynn (REIT)

Technology:

AI holds the promise of eliminating toil

“Work is what you make and create and where productivity and economic growth come from. Toil is just doing the same thing over again and over again and over again. And I think there is a whole trend in the industry, the idea is you take your toil and try to package it, try to offshore it, try to get to the lowest cost location as possible, and for me, that’s pretty much over. Now we have the ability to eliminate it entirely.” —Mastercard President
Ed McLaughlin (Payments)

You need scale to collect data for AI

“artificial intelligence is not easy, so you need to have the scale in the resources to be able to do it…it’s not just having the data…it’s like what is the quality of those records; have you curated them? Have you cleaned them?…are they ready to do something important.” —IBM GM Deborah DiSanzo (Technology)

Qualcomm expects commercial 5G handsets in 2019

“You’ll start to see the first commercial devices in 2019. You can go to the store, buy a device with 5G in it in 2019. You’re already seeing people doing trials and early developments in the marketplace now. But the real standard compliance, new radio 5G will happen in 2019 time frame.” —Qualcomm CEO Steve Mollenkopf (Semiconductors)

China is leading the charge for 5G adoption

“Interestingly…this is the first time I’ve seen this happen with the G transitions…This is the first time that China is not waiting, and they’re really wanting to go pretty aggressively as well.” —Qualcomm CEO Steve Mollenkopf (Semiconductors)

Materials, Energy:

Oil consumption will probably continue to grow for some time

“a lot of pundits talk about the end of the internal combustion engine or you hear countries that are announcing they’re not going to have any more internal combustion engines after a certain year. You also hear a lot about peak oil demand…the world population is growing we still have 15% of the world population of 7.5 billion people that don’t have access to electricity and particularly in developing parts of the world there will be continued need for fossil fuels. In fact, the prediction is that the absolute usage…will continue to grow 2040 and beyond…in fact oil and gas usage continues to advance as people want to improve their lives” —Caterpillar President Tom Pellette (Industrial Equipment)

Full transcripts can be found at www.seekingalpha.com

Boeing at Morgan Stanley Conference Notes

Dennis Muilenburg – Chairman, President and CEO

7.7% passenger traffic growth year to date

“We see about $7.5 trillion marketplace over the next 10 years, recently updated our current market outlook so expect the world to need about 41,000 new commercial airplanes over the next 20 years that’s incrementally up from last year’s estimate. Traffic patterns around the world continue to be very strong, we’re running about 7.7% passenger traffic growth year-to-date. We expect nominally 6% to 7% rate over the next several years and over the 20 year timeframe we’ve assumed a 4.7% growth rate behind those 41,000 new airplanes.”

Mastercard at Deutsche Bank Conference Notes

Ed McLaughlin – ‎President, Operations & Technology

AI will eliminate toil

” AI is a huge topic. I mean, we could probably spend the rest of the day on it. And I think this is a great example of technologies that have been around for a long time, that are now coming into the fore. And what we think about in that [indiscernible] time is applied research, right? How do we take these new capabilities? Not for what they do, but to apply them to what we do to make them better. So broadest thing that I could give you around the topic as big as AI, machine learning, automation, a lot of these new capabilities that we can now leverage.

I think about the three broad categories; the first, is how can we use it to eliminate, what we call, toil, and that’s to separate it from work, all right. Work is how you add it. Work is what you make and create and where productivity and economic growth come from. Toil is just doing the same thing over again and over again and over again. And I think there is a whole trend in the industry, the idea is you take your toil and try to package it, try to offshore it, try to get to the lowest cost location as possible, and for me, that’s pretty much over.

Now we have the ability to eliminate it entirely. And so, Andrew Ng, a Stanford Researcher, was with Baidu for a while, calls it the one second rule. Pretty much today, any decision will take you about a second, is it blue [ph]? We can use AI to automate. So we are going through relentlessly each of the workflows we have and say what our longest running, what our most expensive process is, and you can begin applying these technologies to eliminate net [indiscernible] to free our resources up for more value added work.”

Kilroy at Bank of America Conference

Rob Paratte

Everybody is guessing where Amazon will put its second HQ

“I personally think, and I don’t know – I don’t have any insider information, but I personally think the second headquarters would be either Denver, Austin, but I think there’s a strong possibility it could be here on the East Coast. ”

Tyler Rose

CRE pricing remains strong

“we’re seeing maintained high level of competition for the trophy assets, Class A properties like we own. San Francisco 222 Second traded at around the 4% cap. That’s $1,200 – low $1,200 a foot. L.A., there is a couple buildings on the West Side, they’re on the market now. I don’t know exactly whether price is going to come in on those. And then moving down to San Diego Diamond View Tower, which is in downtown San Diego, near the ballpark traded about a week ago, going in high 4s, like 4.7%, $675 a foot. And there’s a building in Del Mar, which is our largest submarket. It’s in Ashgrove 4.5% going in yield. So prices are strong. In San Diego, we’re seeing 50 to 100 basis points over San Francisco spreads.”

Kimco at Bank of America Conference Notes

Conor Flynn – CEO

Brick and mortar is crucial to e-commerce

“research reports show that brick-and-mortar stores are crucial to supporting retailers e-commerce growth. When a new store opens traffic to the retailer’s Web site from within the surrounding postal area increases by over 50% on average within six weeks of opening the physical store.”

Grocers have invested in omni channel, not sure any money in meal kits

“All the major traditional grocers have been really working on omni-channel, click-and-collect, Home Delivery, that’s been something that everyone’s been doing. Nobody’s really made any money on it, but it’s really an amenity that I think consumers are demanding. You are also going to see meal kits from Blue Apron and others continue to be interesting even though, I’m not sure any money is made there either.”

Almost all stores are back and operating in both hurricane zones

“Houston we are very, very lucky. We actually — all of our sites are opened and operating there and we will not be filing an insurance claim there, which is pretty amazing when you think about the flooding and devastation that went on there. And again, in Florida, we got lucky as well. We’ve seen almost our entire portfolio, except for one asset that’s in the Florida Keys, that was right sort of in the eye of the storm there in Marathon. So we should have a report today in terms of what kind of damage was done there. But again, most of those are now open and operating, if not all.”

Caterpillar at Morgan Stanley Notes

Tom Pellette – President, Energy & Transportation

Oil usage is here to stay

“there is a lot of, you can go out on YouTube and see a lot of pundits talk about the end of the internal combustion engine or you hear countries that are announcing they’re not going to have any more internal combustion engines after a certain year. You also hear a lot about peak oil demand that as I detailed in my presentation yesterday, the world population is growing we still have 15% of the world population of 7.5 billion people that don’t have access to electricity and particularly in developing parts of the world there will be continued need for fossil fuels. In fact, the prediction is that the absolute usage even though the percentage will decrease, the absolute usage will continue to grow 2040 and beyond. So, we are very heavily focused on becoming more efficient cleaner engines but continuing to provide reciprocating engines to the industries that we serve and in fact oil and gas usage continues to advance as people want to improve their lives”

There’s an economic balance point for electric vehicles

“we talk about electric cars and still the adoption rate is very low and they are still more expensive than conventional cars. When people say, when they look at a country like Norway, they have a high adoption rate of electric cars, but then you look at it and it’s all subsidized. So eventually that economic balance point will be reached and then these technologies will be embraced a lot more quickly we’ll be ready.”

Amy Campbell

China construction has surprised with its strength

“So, China Construction has surprised us all year with its strength. We expected China to do better, we thought but it’s quite better than we thought it would. For many reasons, one being that the used equipment market there is not as robust and we think that’s driving some of the higher demand and more matured European and North America market you get lot more used equipment to leverage for the industry.”

Comcast at Goldman Sachs Conference Notes

Brian Roberts

Had the biggest upfront ever

” we had a really biggest upfront I think the company has ever had in this most recent upfront. We sold more upfront up 8% of our inventory than we did a year before. Our price was up. We have said around the same kind of number.”

The ratings decline gets offset by CPM increase

” all-in-all, the ratings decline gets offset by the CPM increase and the total dollars continue to be very stable and that’s critical and that happened again this year and in the scattered market, we’re seeing continued strength there. ”

Are you really getting the value out of the digital platforms that you are saying?

“the more time I spend talking to the advertising folks who take a show, Tonight Show with Jimmy Fallon or shows that are out in digital in great numbers and many shows are there, and are you getting paid on the Facebook platform, no. And so, and are there advertising getting their value from some of those other platforms for what they say they’re getting versus what they are getting. There is a lot of swirl around those questions. ”

Xfinity mobile offering

“So we’re really pleased with the start. Just to remind everybody. It’s MVNO on the Verizon network. So we’ve a good relationship. It’s working well. You can activate it right away. We’ll ship it to you in 24 hours. You can pick it up. Get it by in a store, and there’s only two plants, really simple product. Maybe the most simple, elegant execution the company has ever had, really great packaging, really simple, $12 a gig or $45 unlimited. That’s it. And when the new products come out like today, I believe we’ll have those products in all our stores and on our digital site, same time as anybody else.”

We paid 1/4 for NBC what AT&T paid for Time Warner

“We have resources that allowed us to buy NBCUniversal when times got tough, more will change. We bought NBC for about $26 billion. People said, buy more stock at that moment. Today AT&T is paying over $100 billion and I think the cash flow with NBCUniversal and Time Warner are pretty comparable.”

Suntrust at Barclays Notes

Aleem Gillani – Chief Financial Officer

Rates moving up is a double edged sword

“Thank you. Well, one of those indicators actually is higher rates. As rates move up naturally, it will start to put some people or companies under stress. So higher rates is a little bit of a double-edged sword. It’s clearly going to benefit us, given the fact that we are asset sensitive and we will benefit from higher rates. But that’s an indicator that we’re watching from – we’re watching for.”

Some indicators that would usually point to the cycle turning have been false positives

“Some of the other indicators that we’re looking at actually look like they maybe giving false positives in a couple of instances. We’ve been certainly watching the auto market. We’ve been watching the CRE markets and looking for areas of overbuilding or overheating there. And that has caused us in a couple of instances to be more cautious in certain areas. And again, perversely from the double-edged sword perspective, the effect of both Harvey and Irma may help in all those markets.”