1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:22,000 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App. 4 00:00:22,360 --> 00:00:25,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:27,120 Speaker 1: us live on YouTube. 6 00:00:27,240 --> 00:00:30,400 Speaker 2: What an honor to have with this Noural Rubini, professor. 7 00:00:30,600 --> 00:00:32,839 Speaker 2: He's not emeritus. When you're you know you travel like 8 00:00:32,920 --> 00:00:34,760 Speaker 2: he does. He's such a young kid. 9 00:00:34,800 --> 00:00:37,919 Speaker 3: I don't know how emeritusy he is at New York University. 10 00:00:38,040 --> 00:00:41,640 Speaker 3: Of course, Chairman Rubini at Global Economics. One of the 11 00:00:41,680 --> 00:00:44,760 Speaker 3: great moments for me was with Professor Rubini and Davos 12 00:00:44,800 --> 00:00:48,640 Speaker 3: a million years ago, where he's simply outlining two thousand 13 00:00:48,640 --> 00:00:50,760 Speaker 3: and seven, eight and nine to come. 14 00:00:51,240 --> 00:00:52,199 Speaker 2: No, I don't care. 15 00:00:52,320 --> 00:00:57,600 Speaker 3: The reason you're here is I'm looking May thirty first, Munich, 16 00:00:57,840 --> 00:01:00,760 Speaker 3: I mean a hitter like you got to be looking 17 00:01:00,800 --> 00:01:05,560 Speaker 3: the private skybox on stub Hub inter Milan versus PSG 18 00:01:05,920 --> 00:01:09,040 Speaker 3: for twenty nine thousand dollars. You got two seats in 19 00:01:09,040 --> 00:01:10,199 Speaker 3: the private skybox. 20 00:01:10,240 --> 00:01:11,039 Speaker 2: Are you gonna roll that? 21 00:01:12,080 --> 00:01:13,119 Speaker 4: I'll watch it on TV. 22 00:01:14,760 --> 00:01:17,800 Speaker 2: It's very exciting. He's a diehard from his youth in 23 00:01:17,880 --> 00:01:21,800 Speaker 2: the old world inter Milan. I want to go back. 24 00:01:21,840 --> 00:01:24,480 Speaker 3: This is really serious, folks, and it's off the radar 25 00:01:24,640 --> 00:01:27,280 Speaker 3: right now. It shouldn't be bread sets or who you 26 00:01:27,440 --> 00:01:29,200 Speaker 3: started has been on fire. 27 00:01:29,760 --> 00:01:33,639 Speaker 2: You and Brad Setser wrote a book eleven years ago. Whatever. 28 00:01:33,760 --> 00:01:38,200 Speaker 3: Fred Berxton wrote the wonderful introduction on EM. How does 29 00:01:38,319 --> 00:01:41,200 Speaker 3: EM affect him? When I see Taiwan dollar go out 30 00:01:41,240 --> 00:01:42,600 Speaker 3: five standard deviations? 31 00:01:42,600 --> 00:01:47,760 Speaker 2: Whatever? How is emerging a market off the radar, affected. 32 00:01:47,240 --> 00:01:52,520 Speaker 3: By China, US, US, Canada, US EU. 33 00:01:52,840 --> 00:01:55,560 Speaker 2: What happens to your EM? Well? 34 00:01:55,680 --> 00:01:58,160 Speaker 4: The good news for YM is that this time around 35 00:01:58,240 --> 00:02:01,800 Speaker 4: the trade shalk have not led to a strengthening of 36 00:02:01,840 --> 00:02:05,640 Speaker 4: the dollar, but rather a weakening of the dollar. With 37 00:02:05,800 --> 00:02:10,240 Speaker 4: the dollar weekends, EM currencies tend to appreciate. It's also 38 00:02:10,280 --> 00:02:13,080 Speaker 4: true that some of these Asian nations are sitting on 39 00:02:13,680 --> 00:02:18,600 Speaker 4: trillions of dollars of US treasuries. Their fornasts are very high, 40 00:02:18,720 --> 00:02:23,120 Speaker 4: and there's been some diversification because we've dented, how to say, 41 00:02:23,160 --> 00:02:25,720 Speaker 4: the dollar as a major global reserve currency given our 42 00:02:25,840 --> 00:02:30,520 Speaker 4: unstable policies, so people move out of US treasure and 43 00:02:30,600 --> 00:02:33,480 Speaker 4: seldom and go back to their own local currency. There 44 00:02:33,480 --> 00:02:37,560 Speaker 4: has been some appreciation and that has taken some momentum. 45 00:02:37,800 --> 00:02:39,640 Speaker 4: There's also hope in Asia. I think that there'll be 46 00:02:39,760 --> 00:02:42,760 Speaker 4: trade deals and the announce reciprocal tricks are going to 47 00:02:42,760 --> 00:02:46,000 Speaker 4: be much smaller than an on April second. That's also 48 00:02:46,040 --> 00:02:49,240 Speaker 4: strengthening some of these currencies, because some of them were 49 00:02:49,440 --> 00:02:51,640 Speaker 4: weakening because of the risk of a trade war and 50 00:02:51,680 --> 00:02:54,360 Speaker 4: so on. To think is a variety of factors leading 51 00:02:54,400 --> 00:02:55,160 Speaker 4: to that happening. 52 00:02:55,880 --> 00:02:59,000 Speaker 5: How concerned are you, if at all, about the US 53 00:02:59,040 --> 00:03:02,600 Speaker 5: economy in the face of the uncertainty of all this 54 00:03:02,760 --> 00:03:05,920 Speaker 5: trade discussion back and forth and back and forth. It 55 00:03:05,960 --> 00:03:08,040 Speaker 5: seems like consumers might be pulling back. It seems like 56 00:03:08,240 --> 00:03:10,680 Speaker 5: corporate executives are pulling back on guidance. I'm not sure 57 00:03:10,880 --> 00:03:13,200 Speaker 5: how it's gonn to impact their businesses. Do you think 58 00:03:13,200 --> 00:03:14,520 Speaker 5: that's going to affect yours economy? 59 00:03:15,160 --> 00:03:19,160 Speaker 4: Well, there are some headwinds coming from trade and it's uncertainty, 60 00:03:19,240 --> 00:03:23,280 Speaker 4: and there are some tailwinds coming from strong cappacks, especially 61 00:03:23,480 --> 00:03:28,320 Speaker 4: aid riven and still good income growth, creation and so on. 62 00:03:29,400 --> 00:03:31,400 Speaker 4: I would say that over the medium time. Actually, I'm 63 00:03:31,440 --> 00:03:34,560 Speaker 4: quite bullish about US economy. I think that because of technology, 64 00:03:35,000 --> 00:03:36,760 Speaker 4: US potential growth by the end of the deck it 65 00:03:36,800 --> 00:03:40,600 Speaker 4: could be four percent, an increase of two underd business points, 66 00:03:41,120 --> 00:03:44,680 Speaker 4: and even poor trade and migration policy can reduce growth 67 00:03:44,680 --> 00:03:47,520 Speaker 4: only by fifty business points. So the ratio within the 68 00:03:47,520 --> 00:03:50,360 Speaker 4: good stuff to underd business points to the bead fifties 69 00:03:50,400 --> 00:03:52,760 Speaker 4: four to one. So I think we'll be onder verge 70 00:03:52,760 --> 00:03:55,960 Speaker 4: of a secular boom over the next few years. So 71 00:03:56,000 --> 00:03:58,520 Speaker 4: I'm quite optimistic. But then in the short rum we'll 72 00:03:58,520 --> 00:04:01,640 Speaker 4: have probably a nearest by your end, there is an 73 00:04:01,640 --> 00:04:02,520 Speaker 4: increasing pop. 74 00:04:02,680 --> 00:04:05,040 Speaker 3: You mentioned a medium term. You gotta be from Europe 75 00:04:05,040 --> 00:04:07,240 Speaker 3: to mention the medium term. We don't do that in America. 76 00:04:08,000 --> 00:04:11,560 Speaker 3: My basic conundrum, Neurabini yep, is we've got the short 77 00:04:11,640 --> 00:04:15,400 Speaker 3: term reality within an American political system which you live 78 00:04:15,440 --> 00:04:19,640 Speaker 3: with President Clinton, out to the long term view of 79 00:04:19,720 --> 00:04:24,600 Speaker 3: whatever Trump economics is and maybe a more optimistic future. 80 00:04:25,160 --> 00:04:27,040 Speaker 3: How do we get is they would say up in 81 00:04:27,160 --> 00:04:29,719 Speaker 3: Maine or you don't know this up in Maine where 82 00:04:29,720 --> 00:04:31,279 Speaker 3: Lisa collects black flies. 83 00:04:31,640 --> 00:04:33,920 Speaker 2: They get from here to there? How do we get 84 00:04:33,920 --> 00:04:36,600 Speaker 2: from short term to long term success? 85 00:04:37,880 --> 00:04:39,440 Speaker 4: The way we get it is this is here there'll 86 00:04:39,440 --> 00:04:41,680 Speaker 4: be a massive slowdown of growth. As you point out, 87 00:04:42,160 --> 00:04:45,120 Speaker 4: consumer and business confidence is down, inflation is going to 88 00:04:45,120 --> 00:04:48,400 Speaker 4: go corpus y four percent by your end, and that's 89 00:04:48,440 --> 00:04:51,720 Speaker 4: going to be a significant eaton real disposal income. So 90 00:04:51,880 --> 00:04:54,120 Speaker 4: by Q four we're going to be in a near recession. 91 00:04:54,520 --> 00:04:56,840 Speaker 4: The good news is that the FAT is now credibly 92 00:04:56,880 --> 00:05:00,360 Speaker 4: committed to fight inflation. They're not cutting rates. Therefore infliction 93 00:05:00,440 --> 00:05:04,719 Speaker 4: expeditions are anchored. Therefore, once infliction is higher but growth 94 00:05:04,760 --> 00:05:06,680 Speaker 4: is lower and you have a beginning of increase in 95 00:05:06,760 --> 00:05:08,440 Speaker 4: unemployment rate, the fact is going to be able to 96 00:05:08,480 --> 00:05:09,120 Speaker 4: cut rates. 97 00:05:09,320 --> 00:05:09,560 Speaker 2: The thing. 98 00:05:09,640 --> 00:05:12,359 Speaker 4: It's going to be a short and shallow recession, maybe 99 00:05:12,360 --> 00:05:15,960 Speaker 4: a couple of quarters a Q one, Q four and 100 00:05:16,040 --> 00:05:17,520 Speaker 4: Q one of next year, and then we'll have a 101 00:05:17,520 --> 00:05:21,960 Speaker 4: strong recovery because the tailweins coming from technology are massive. 102 00:05:22,200 --> 00:05:24,840 Speaker 4: I guess is leading in all the technology of the future. 103 00:05:24,640 --> 00:05:27,920 Speaker 3: Claims are out there on plan unit labor costs and productivity, 104 00:05:27,920 --> 00:05:28,560 Speaker 3: we're elevated. 105 00:05:28,640 --> 00:05:31,640 Speaker 2: That's what we'll talk about here. Unit labor costs jump. 106 00:05:31,480 --> 00:05:35,200 Speaker 3: From a revised two percent up to five point seven percent. 107 00:05:35,600 --> 00:05:38,200 Speaker 2: I got a terror regime of three percent. 108 00:05:38,320 --> 00:05:40,560 Speaker 3: You arguably were one of the people that set up 109 00:05:40,920 --> 00:05:45,000 Speaker 3: coming off the Atlantic Charter, the global trade, the globalization 110 00:05:45,839 --> 00:05:49,679 Speaker 3: mantra of a lower terror regime. Even if we pop 111 00:05:49,720 --> 00:05:52,520 Speaker 3: from one hundred and forty five percent drama in China 112 00:05:53,040 --> 00:05:55,680 Speaker 3: and we come back down to like a blended thirteen percent, 113 00:05:55,800 --> 00:05:57,719 Speaker 3: I don't get it. Is in the gap from a 114 00:05:57,800 --> 00:06:02,080 Speaker 3: three percent blended terraff up to ten percent or thirteen 115 00:06:02,120 --> 00:06:05,200 Speaker 3: percent blended heraf isn't that insurmountable. 116 00:06:05,760 --> 00:06:07,720 Speaker 4: Probably the blend is going to be more than thirteen 117 00:06:07,760 --> 00:06:11,360 Speaker 4: because my baseline is ten to fifteen percent for all 118 00:06:11,400 --> 00:06:14,320 Speaker 4: the world and sixty percent for China, So the blend 119 00:06:14,360 --> 00:06:17,000 Speaker 4: that could be in the high teens. It's a bad world. 120 00:06:17,040 --> 00:06:20,120 Speaker 4: But let's put its way. I suppose that there is 121 00:06:20,120 --> 00:06:23,960 Speaker 4: an average tariff reciprocal on Europe of ten percent as 122 00:06:24,000 --> 00:06:24,839 Speaker 4: opposed to twenty. 123 00:06:25,480 --> 00:06:25,960 Speaker 6: Big deal. 124 00:06:26,040 --> 00:06:28,080 Speaker 4: The Europe can go up and down ten percent in 125 00:06:28,120 --> 00:06:29,200 Speaker 4: a matter of months. 126 00:06:29,440 --> 00:06:30,680 Speaker 6: So is it good? 127 00:06:30,800 --> 00:06:30,840 Speaker 3: No? 128 00:06:31,200 --> 00:06:31,960 Speaker 2: Is it terrible? 129 00:06:32,240 --> 00:06:34,200 Speaker 4: It's going to something? Is that to destroy the world? 130 00:06:34,560 --> 00:06:37,120 Speaker 4: Probably not, because currency can move more than ten percent 131 00:06:37,560 --> 00:06:40,719 Speaker 4: in a matter of months. So, of course is a 132 00:06:40,839 --> 00:06:43,919 Speaker 4: world that is fragmented. The world is the globalized. But 133 00:06:44,040 --> 00:06:47,400 Speaker 4: if the average tarf were being say ten to fifteen 134 00:06:47,400 --> 00:06:50,240 Speaker 4: percent rather than only three, the impact on growth is 135 00:06:50,279 --> 00:06:54,000 Speaker 4: going to be how to say moderate? I would say 136 00:06:54,160 --> 00:06:56,480 Speaker 4: this is will be moderate. Of course, with Chinese a 137 00:06:56,480 --> 00:06:59,240 Speaker 4: different story. With China at sixty percent, we're going to 138 00:06:59,279 --> 00:07:02,360 Speaker 4: de couple from China, and the shock on their growth 139 00:07:02,400 --> 00:07:05,160 Speaker 4: and the shock around inflation is going to be significant. 140 00:07:05,160 --> 00:07:07,600 Speaker 4: So I'm more worried about the fact we're not going 141 00:07:07,640 --> 00:07:10,360 Speaker 4: to de escalate with China. You said fair extent with. 142 00:07:10,400 --> 00:07:14,960 Speaker 3: All of your political economics neural regni. Do you believe 143 00:07:15,440 --> 00:07:18,320 Speaker 3: common sense will come to the rescue in Washington? 144 00:07:19,120 --> 00:07:21,240 Speaker 4: Well more than common sense. In December, I said there'll 145 00:07:21,280 --> 00:07:25,800 Speaker 4: be four guard trades against stupid policy like tariffs, market discipline, 146 00:07:26,200 --> 00:07:29,880 Speaker 4: good economic advisors, fed discipline, and thin majority in Congress. 147 00:07:30,160 --> 00:07:33,360 Speaker 4: Guess what when the stock market crashed, bonding were higher, 148 00:07:33,440 --> 00:07:36,080 Speaker 4: credit spreads are higher, they always hire. They blinked and 149 00:07:36,120 --> 00:07:38,840 Speaker 4: they started to de escalate. Two In that game of 150 00:07:38,920 --> 00:07:43,040 Speaker 4: Chicken between Trump and Powell, Trump blinked because he knew 151 00:07:43,040 --> 00:07:45,960 Speaker 4: if it was a grund fire power, there'll be a 152 00:07:46,000 --> 00:07:48,800 Speaker 4: shock to the market. So eblink the therefore fit fed 153 00:07:48,880 --> 00:07:52,640 Speaker 4: independence was a binding constraint. Eventually, the Peter Navarro of 154 00:07:52,680 --> 00:07:55,240 Speaker 4: the world were sidelines and the scot Passings of the world. 155 00:07:55,440 --> 00:07:58,120 Speaker 4: At the upper end, good economic advisors and the fact 156 00:07:58,400 --> 00:08:00,960 Speaker 4: the team I already mean it was boxing by Ford. 157 00:08:01,600 --> 00:08:02,480 Speaker 4: That's exactly what they said. 158 00:08:02,600 --> 00:08:04,200 Speaker 2: The running out of times I got. 159 00:08:04,320 --> 00:08:07,040 Speaker 3: I got goosebumps because I got Nora Obini and Richard 160 00:08:07,040 --> 00:08:10,240 Speaker 3: Porters back to back. I mean talk, it's an academic 161 00:08:10,320 --> 00:08:12,920 Speaker 3: wonk fest here right now. Have you ever done a 162 00:08:12,960 --> 00:08:14,280 Speaker 3: panel with Peter Navarro? 163 00:08:15,360 --> 00:08:18,080 Speaker 4: I've not done a panel. I my team doing the 164 00:08:18,120 --> 00:08:21,120 Speaker 4: Trump one administration in the White House a couple of times. 165 00:08:21,440 --> 00:08:26,920 Speaker 4: So it's a strange economics from. 166 00:08:26,000 --> 00:08:29,120 Speaker 3: Did you teach Navarro economics at New York University? 167 00:08:29,680 --> 00:08:29,880 Speaker 2: No? 168 00:08:29,880 --> 00:08:32,920 Speaker 4: No, he was at PhD at Harvard, So but we 169 00:08:33,000 --> 00:08:37,040 Speaker 4: didn't overlap. Yeah, surprising a PhD economics from Harvard. But 170 00:08:37,120 --> 00:08:40,080 Speaker 4: Steve Mian is also PhD in economics from Harvard, so 171 00:08:40,160 --> 00:08:41,800 Speaker 4: do I How does I. 172 00:08:41,760 --> 00:08:45,480 Speaker 2: Got twenty seconds? How does inter Milan be PSG? What? 173 00:08:45,640 --> 00:08:51,080 Speaker 2: How does inter Milan be PSG? I don't know you're 174 00:08:51,080 --> 00:08:55,520 Speaker 2: gonna be there. You spend twenty eight thousand dollars, Tobi, 175 00:08:55,679 --> 00:08:58,559 Speaker 2: thank you, thank for. Lisa wants to know when's a 176 00:08:58,600 --> 00:08:59,200 Speaker 2: new book out. 177 00:09:01,920 --> 00:09:04,800 Speaker 4: I don't have any one. Mega Threats come out two 178 00:09:04,880 --> 00:09:07,200 Speaker 4: years ago, still going and all the themes of the 179 00:09:07,200 --> 00:09:10,160 Speaker 4: book Mega threats are still very important today. All the 180 00:09:10,200 --> 00:09:12,199 Speaker 4: threats I talked about are materializing. 181 00:09:12,360 --> 00:09:16,440 Speaker 3: Okay, So Maniel, thank you so much, greatly appreciate it. 182 00:09:16,520 --> 00:09:20,000 Speaker 3: Noro Rabini, I can't say enough his commitment to what 183 00:09:20,040 --> 00:09:26,679 Speaker 3: we do here on economics, finance, investment, and his international economics. 184 00:09:26,720 --> 00:09:30,559 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 185 00:09:30,600 --> 00:09:34,000 Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto 186 00:09:34,040 --> 00:09:37,000 Speaker 1: with the Bloomberg Business app. You can also listen live 187 00:09:37,080 --> 00:09:40,640 Speaker 1: on Amazon Alexa from our flagship New York station, Just 188 00:09:40,679 --> 00:09:43,240 Speaker 1: say Alexa Play Bloomberg eleven thirty. 189 00:09:43,640 --> 00:09:46,080 Speaker 3: Ken Shinoda joins us right now with a pedigree at 190 00:09:46,080 --> 00:09:50,120 Speaker 3: TCW over to Double Tree, Double Line Capital. 191 00:09:50,440 --> 00:09:51,480 Speaker 2: Thrilled to have you with us. 192 00:09:52,080 --> 00:09:55,440 Speaker 3: Kenny, You've got a different gloss from southern California than 193 00:09:55,480 --> 00:09:57,520 Speaker 3: the rest of us when you look at Port of 194 00:09:57,520 --> 00:10:02,360 Speaker 3: Los Angeles Long Beach dynamics within the finance and investment 195 00:10:02,440 --> 00:10:04,240 Speaker 3: community of LA. 196 00:10:04,559 --> 00:10:07,040 Speaker 2: What's the tone on this trade where it's different than 197 00:10:07,080 --> 00:10:07,559 Speaker 2: New York. 198 00:10:08,080 --> 00:10:10,679 Speaker 7: Yeah, Well, you know you're seeing a slowdown in port activity. 199 00:10:10,840 --> 00:10:15,319 Speaker 7: We saw a big pull forward of imports ahead of 200 00:10:14,360 --> 00:10:17,680 Speaker 7: the tariffs, which is one of the things that led 201 00:10:17,720 --> 00:10:21,400 Speaker 7: to the decline in GDP in the first quarter, and 202 00:10:21,840 --> 00:10:24,520 Speaker 7: we're waiting, watching to see how the hard data now 203 00:10:24,559 --> 00:10:27,280 Speaker 7: comes in. You know, sentiment has rolled over pretty dramatically 204 00:10:27,360 --> 00:10:29,440 Speaker 7: as you look at consumer and business sentiment, and I 205 00:10:29,440 --> 00:10:31,440 Speaker 7: think the market right now is just waiting and watching 206 00:10:31,480 --> 00:10:33,640 Speaker 7: for what the future data holds. 207 00:10:34,080 --> 00:10:36,760 Speaker 5: You know, I'm looking at the GO function the Bloomberg 208 00:10:36,800 --> 00:10:41,480 Speaker 5: Index browser for fixed income US Mortgage backed securities have been. 209 00:10:41,600 --> 00:10:43,680 Speaker 8: The place to be this year so far to date. 210 00:10:44,040 --> 00:10:45,640 Speaker 8: How do you guys think about that part of the business. 211 00:10:45,720 --> 00:10:48,479 Speaker 7: Yeah, it's been a good run. You know, mortgages struggled 212 00:10:49,440 --> 00:10:51,880 Speaker 7: dramatically during the rate rise and the coming out of 213 00:10:52,200 --> 00:10:56,000 Speaker 7: QE into QT. Sometime in the middle of twenty twenty three, 214 00:10:56,000 --> 00:10:58,360 Speaker 7: at the peak of rate volatility, the MBS index was 215 00:10:58,400 --> 00:11:01,480 Speaker 7: about two hundred basis points behind the corporate bond index 216 00:11:01,520 --> 00:11:02,800 Speaker 7: annualized for five years. 217 00:11:02,840 --> 00:11:03,040 Speaker 6: Wow. 218 00:11:03,040 --> 00:11:05,439 Speaker 7: I mean that's hard to do in fixed income. Nobody 219 00:11:05,480 --> 00:11:07,840 Speaker 7: wants to talk to Yeah, but you know, from these 220 00:11:07,960 --> 00:11:11,160 Speaker 7: valuations where you know, we're over ninetieth percentile on the 221 00:11:11,240 --> 00:11:14,640 Speaker 7: MBS spread, and we think that's an interesting place to be, 222 00:11:14,880 --> 00:11:18,040 Speaker 7: especially when you when you're worried about kind of more 223 00:11:18,160 --> 00:11:21,640 Speaker 7: risk off potentially MBS tends to outperform corporate credit. 224 00:11:21,920 --> 00:11:24,200 Speaker 8: So where do you guys see value today? 225 00:11:24,240 --> 00:11:27,360 Speaker 5: I think what our market probably is characterized most is 226 00:11:27,480 --> 00:11:30,080 Speaker 5: just uncertainty out there in the marketplace, whether it's Corporate 227 00:11:30,080 --> 00:11:32,640 Speaker 5: America pulling back some of their earnings guidance, what it's 228 00:11:32,640 --> 00:11:35,480 Speaker 5: the volatility and the bond market's the equity market uncertainly 229 00:11:35,480 --> 00:11:37,560 Speaker 5: seems to be the story of the day. How does 230 00:11:37,559 --> 00:11:40,240 Speaker 5: that impact kind of fixed income and agency? 231 00:11:40,840 --> 00:11:43,920 Speaker 7: Yeah, well, you know, fixed income finally has kind of 232 00:11:43,960 --> 00:11:47,600 Speaker 7: been a stable place with the Fed, you know, not 233 00:11:47,600 --> 00:11:51,080 Speaker 7: not cutting but done hiking. It's kind of been a 234 00:11:51,120 --> 00:11:53,959 Speaker 7: place of stability in portfolio. So I think people are 235 00:11:54,080 --> 00:11:56,760 Speaker 7: kind of understanding the value of it. Everyone's been hiding 236 00:11:56,760 --> 00:11:59,000 Speaker 7: out in T bills, So I think it's maybe time 237 00:11:59,040 --> 00:12:01,040 Speaker 7: to move out, okay of that tea bill trade. And 238 00:12:01,800 --> 00:12:04,000 Speaker 7: you don't have to go totally out the curve out 239 00:12:04,000 --> 00:12:06,240 Speaker 7: to the tenure, but kind of the belly of the curve, 240 00:12:06,280 --> 00:12:08,400 Speaker 7: the two to five year portion of the curve. Find 241 00:12:08,400 --> 00:12:10,680 Speaker 7: a lot of opportunities there. But as we think about 242 00:12:10,679 --> 00:12:13,959 Speaker 7: the credit landscape, you know, tariff and certain he kind 243 00:12:13,960 --> 00:12:16,400 Speaker 7: of hits the corporate market a little bit more companies. 244 00:12:16,679 --> 00:12:19,400 Speaker 7: If you go away from companies more to assets that 245 00:12:19,440 --> 00:12:23,079 Speaker 7: are backed by consumer credit, things like mortgage backed securities, 246 00:12:23,920 --> 00:12:27,959 Speaker 7: even credit cards, auto loans. Parts of the securitized market 247 00:12:28,000 --> 00:12:30,920 Speaker 7: like commercial mortgage backed securities, you can find sectors that 248 00:12:31,000 --> 00:12:33,400 Speaker 7: aren't as exposed to tariffs. And one could argue that 249 00:12:34,000 --> 00:12:38,920 Speaker 7: increased labor costs, increased material costs will inhibit the supply 250 00:12:39,000 --> 00:12:42,520 Speaker 7: of new homes and that'll actually be positive for home prices. 251 00:12:43,160 --> 00:12:45,960 Speaker 3: Kischanoda with his thrill that it could be with Double 252 00:12:46,000 --> 00:12:48,280 Speaker 3: Line Capital, and of course you know it associated with 253 00:12:48,320 --> 00:12:52,160 Speaker 3: the wonderful, handsome Jeffrey Gundlock. Good morning ninety two nine 254 00:12:52,280 --> 00:12:55,320 Speaker 3: FM up in handover New Hampshire, the land of Dartmouth 255 00:12:55,320 --> 00:13:00,840 Speaker 3: where mister Gundlock matriculated years ago. Give me the line 256 00:13:01,120 --> 00:13:04,280 Speaker 3: from Double Line, and I know Jefferys really opinionated on this. 257 00:13:05,040 --> 00:13:08,560 Speaker 3: On private equity in private credit, I'm going to state 258 00:13:08,640 --> 00:13:10,920 Speaker 3: that's off your remit, this is not the. 259 00:13:10,880 --> 00:13:12,200 Speaker 2: Way Double Line rolls. 260 00:13:12,840 --> 00:13:16,000 Speaker 3: But where are we ending up with private equity in 261 00:13:16,080 --> 00:13:16,800 Speaker 3: private credit? 262 00:13:17,280 --> 00:13:20,920 Speaker 7: Well, you know, private equity is struggling to get cash 263 00:13:21,000 --> 00:13:23,440 Speaker 7: back to investors because the M and A markets kind 264 00:13:23,440 --> 00:13:26,920 Speaker 7: of slowed down. The IPO markets slowed down, and so 265 00:13:27,720 --> 00:13:30,560 Speaker 7: you're seeing a lot of a desire to sell in 266 00:13:30,559 --> 00:13:32,920 Speaker 7: the secondary market. So there's there's going to be big 267 00:13:32,960 --> 00:13:34,200 Speaker 7: growth secondaries. 268 00:13:36,120 --> 00:13:39,120 Speaker 2: What's a percent of haircut that you guys observe. 269 00:13:39,040 --> 00:13:41,680 Speaker 7: Oh, I mean, I think you could easily get ten 270 00:13:41,760 --> 00:13:44,720 Speaker 7: twenty percent discounts to the to the NAV on those sales. 271 00:13:44,800 --> 00:13:46,520 Speaker 7: And then the private credit markets. I think one of 272 00:13:46,559 --> 00:13:49,319 Speaker 7: the reasons we didn't go into recession in twenty twenty 273 00:13:49,360 --> 00:13:51,839 Speaker 7: three was that, you know, the old school way of 274 00:13:52,960 --> 00:13:55,720 Speaker 7: of these cycles is the FED hikes rates, the couple 275 00:13:55,720 --> 00:13:58,320 Speaker 7: of markets kind of shut down, companies can't access the 276 00:13:58,320 --> 00:14:01,960 Speaker 7: credit markets, start people off, you go into recession. Well, 277 00:14:02,000 --> 00:14:05,800 Speaker 7: guess what that happened. FED hiked raakes, the high heeled market, 278 00:14:05,800 --> 00:14:08,160 Speaker 7: bank loan market was effectively shut down for a little bit, 279 00:14:08,200 --> 00:14:10,880 Speaker 7: but private credit came to the rescue. I think the 280 00:14:11,000 --> 00:14:13,280 Speaker 7: challenge is going to be for investors is that we 281 00:14:13,360 --> 00:14:15,560 Speaker 7: haven't really seen the credit cycle, and at some point 282 00:14:15,559 --> 00:14:19,040 Speaker 7: in time there will be losses and we'll see how 283 00:14:19,960 --> 00:14:20,360 Speaker 7: I mean, I'm just. 284 00:14:20,360 --> 00:14:23,040 Speaker 5: Thinking about the mortgage related opportunities in your business, and 285 00:14:23,880 --> 00:14:27,760 Speaker 5: we haven't really seen the I don't know, I haven't 286 00:14:27,760 --> 00:14:31,160 Speaker 5: seen like major blow ups in the credit side of 287 00:14:31,240 --> 00:14:32,200 Speaker 5: the mortgage business. 288 00:14:32,240 --> 00:14:35,240 Speaker 8: I mean, banks haven't been taking huge write downs. 289 00:14:35,240 --> 00:14:38,880 Speaker 5: I haven't seen small banks blow out their numbers terribly 290 00:14:38,920 --> 00:14:41,200 Speaker 5: because of more mortgage loans. 291 00:14:41,440 --> 00:14:42,200 Speaker 8: Where's the pain? 292 00:14:43,200 --> 00:14:46,800 Speaker 7: You know, the banks healed themselves after the Global financial crisis. 293 00:14:46,840 --> 00:14:48,280 Speaker 8: They took less risks. 294 00:14:48,280 --> 00:14:51,360 Speaker 7: The regulators have cramped down on them, so you know, 295 00:14:51,400 --> 00:14:54,120 Speaker 7: there's been some pain some banks have exposure to, you know, 296 00:14:54,200 --> 00:14:56,760 Speaker 7: commercial real estate loans. But I think we did a 297 00:14:56,760 --> 00:14:58,400 Speaker 7: good job in the US kind of making sure that 298 00:14:58,400 --> 00:14:59,600 Speaker 7: they don't take too many risks. 299 00:15:00,280 --> 00:15:03,640 Speaker 3: What do you think of Buffett's cash gazillions? 300 00:15:03,880 --> 00:15:06,720 Speaker 2: Does Double Line? Do you have a sideline. 301 00:15:06,200 --> 00:15:08,560 Speaker 3: Bet with a gazillion dollars of cash you'd like to 302 00:15:08,600 --> 00:15:09,280 Speaker 3: tell us about? 303 00:15:09,560 --> 00:15:12,160 Speaker 7: Yeah, you know, he's he's probably happy. Cash has been 304 00:15:12,160 --> 00:15:14,400 Speaker 7: a good place to be, and you know, I think 305 00:15:14,760 --> 00:15:16,800 Speaker 7: that there's a lot of uncertainty out there. It's going 306 00:15:16,840 --> 00:15:19,480 Speaker 7: to shake the markets up as that hard data comes in, 307 00:15:19,520 --> 00:15:21,960 Speaker 7: and he's going to have some good buying opportunities. 308 00:15:21,600 --> 00:15:24,520 Speaker 2: Very good, really really wonderful to visit with. You don't 309 00:15:24,520 --> 00:15:26,760 Speaker 2: be a stranger. Thrilled that he's with us today with 310 00:15:26,800 --> 00:15:27,360 Speaker 2: Double Line. 311 00:15:27,720 --> 00:15:30,480 Speaker 3: Just as simple is that they've had a huge impact, 312 00:15:30,560 --> 00:15:35,120 Speaker 3: and particularly you know, following the Gunlock Shnoda view has 313 00:15:35,160 --> 00:15:42,120 Speaker 3: been something a lot of people have done. 314 00:15:43,280 --> 00:15:46,840 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 315 00:15:46,920 --> 00:15:50,120 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 316 00:15:50,160 --> 00:15:53,840 Speaker 1: Applecarplay and Android Otto with the Bloomberg Business app, or 317 00:15:54,000 --> 00:15:55,440 Speaker 1: watch us live on YouTube. 318 00:15:55,480 --> 00:15:59,320 Speaker 3: Professor Porters of the London Business School with us today 319 00:15:59,360 --> 00:16:04,680 Speaker 3: in studio. So the President speaking at ten o'clock, the 320 00:16:04,800 --> 00:16:09,320 Speaker 3: Starmer speaking a bit later. I believe on a comprehensive 321 00:16:09,360 --> 00:16:12,120 Speaker 3: trade agreement and all, and of course was sterling moving 322 00:16:12,120 --> 00:16:15,640 Speaker 3: in the Bank of England. It's for our conversation, but 323 00:16:15,760 --> 00:16:19,360 Speaker 3: we must start. Professor Portis with a gentleman who was 324 00:16:19,440 --> 00:16:22,280 Speaker 3: so kind to me. I can't say enough about what 325 00:16:22,400 --> 00:16:25,720 Speaker 3: Joseph Knight did for me, along with many other people. 326 00:16:26,320 --> 00:16:28,160 Speaker 2: And all of this was wrapped. 327 00:16:27,840 --> 00:16:34,000 Speaker 3: Around his invention of international relations and soft power. 328 00:16:34,080 --> 00:16:36,960 Speaker 2: What is the legacy of the giant of Harvard. 329 00:16:37,320 --> 00:16:41,960 Speaker 6: I'm afraid it looks rather shaky now. Sadly, Joe was 330 00:16:42,040 --> 00:16:46,400 Speaker 6: a wonderful person and a terrific intellect, and the soft 331 00:16:46,440 --> 00:16:51,400 Speaker 6: power concept really made headway during the day when soft 332 00:16:51,480 --> 00:16:56,400 Speaker 6: power could exercise power. Now it seems that we've shifted 333 00:16:56,440 --> 00:17:01,880 Speaker 6: away from that, and the environment, international environment is not 334 00:17:02,200 --> 00:17:04,240 Speaker 6: conducive to the use of soft power. 335 00:17:04,600 --> 00:17:07,480 Speaker 3: I see a substitution here that's off the mark. I 336 00:17:07,520 --> 00:17:10,439 Speaker 3: see the chaos of Liz Trust. I see what we 337 00:17:10,480 --> 00:17:14,160 Speaker 3: see out of sixteen hundred Pennsylvania Avenue. And the fallback 338 00:17:14,359 --> 00:17:18,320 Speaker 3: is it's a Kissinger real politic. I don't buy it 339 00:17:18,440 --> 00:17:21,919 Speaker 3: for a minute. I don't see an underlying theory towards 340 00:17:22,040 --> 00:17:24,720 Speaker 3: Robert D. Kaplan and Henry Kissinger. Am I right? 341 00:17:25,040 --> 00:17:27,919 Speaker 6: I think that is right. There's no underlying theory. But 342 00:17:28,080 --> 00:17:32,680 Speaker 6: we are in we are in chaos mode, honestly internationally 343 00:17:33,240 --> 00:17:36,560 Speaker 6: and to some extent domestically in this in this country, 344 00:17:36,560 --> 00:17:39,600 Speaker 6: in the United States, and a bit in the UK, 345 00:17:40,359 --> 00:17:45,680 Speaker 6: and some in Europe as well. So it's it's it's 346 00:17:45,680 --> 00:17:49,560 Speaker 6: not good. The multilateral system is coming apart, and someone 347 00:17:49,640 --> 00:17:53,800 Speaker 6: like Joe and I, for example, was a great proponent 348 00:17:53,880 --> 00:18:00,159 Speaker 6: and advocate of multilateral stability, and it's it's going Sir. 349 00:18:00,200 --> 00:18:03,080 Speaker 5: At the London Business School, when you talk about tariffs, 350 00:18:03,119 --> 00:18:06,080 Speaker 5: when you teach your students about tariffs, how do you 351 00:18:06,480 --> 00:18:08,240 Speaker 5: what context do you put tariffs. 352 00:18:07,840 --> 00:18:15,640 Speaker 6: In Tariffs are a legitimate trade tool in certain circumstances, 353 00:18:16,119 --> 00:18:22,119 Speaker 6: but the kind of wide ranging, blunt tariffs that that 354 00:18:22,359 --> 00:18:27,159 Speaker 6: the current administration is imposing seemed to me to be 355 00:18:27,520 --> 00:18:32,200 Speaker 6: very misguided. They will be inflationary, they will be contractionary. 356 00:18:33,200 --> 00:18:39,280 Speaker 6: They the funny thing is that they've been complaining. Stephen Mirron, 357 00:18:39,320 --> 00:18:42,520 Speaker 6: the chair of the Council of Economic Advisors, complained that 358 00:18:42,760 --> 00:18:44,920 Speaker 6: the dollar has been too strong. Well, they've been very 359 00:18:44,920 --> 00:18:48,199 Speaker 6: successful in bringing the dollar down, haven't they, right, why 360 00:18:48,760 --> 00:18:53,359 Speaker 6: by causing some degree of chaos. So that's you know, 361 00:18:53,440 --> 00:18:57,960 Speaker 6: they shouldn't be complaining about that anymore. And we'll see, 362 00:18:58,119 --> 00:19:00,679 Speaker 6: we'll see how he adjusts that. This trade deal with 363 00:19:00,720 --> 00:19:03,439 Speaker 6: the UK that is supposed to be announced in just 364 00:19:03,520 --> 00:19:06,880 Speaker 6: a little while will not be any kind of comprehensive 365 00:19:06,880 --> 00:19:10,680 Speaker 6: trade deal. It'll be good for us in the UK 366 00:19:11,200 --> 00:19:13,760 Speaker 6: on cars and steel, and we have problems with both 367 00:19:13,760 --> 00:19:19,040 Speaker 6: those industries, but really our main exports to the United 368 00:19:19,040 --> 00:19:25,560 Speaker 6: States are services and the good side just isn't that important. 369 00:19:26,359 --> 00:19:26,960 Speaker 8: In the UK? 370 00:19:27,200 --> 00:19:30,840 Speaker 5: How are they viewing kind of our trade posture these days? 371 00:19:30,840 --> 00:19:32,520 Speaker 5: Are they trying you think the UK is going to 372 00:19:32,520 --> 00:19:36,200 Speaker 5: try to be accommodative, combative, what's in their best interest. 373 00:19:36,960 --> 00:19:41,080 Speaker 6: I think Starmar is the Prime Minister. The UK is 374 00:19:41,280 --> 00:19:45,720 Speaker 6: treading a very fine line and not quite clear which 375 00:19:45,760 --> 00:19:48,639 Speaker 6: side of that line he's falling on as between the 376 00:19:48,640 --> 00:19:52,959 Speaker 6: European Union and the United States, and he's trying to 377 00:19:53,240 --> 00:19:57,480 Speaker 6: both have it both ways, good relationships with both. But 378 00:19:57,600 --> 00:20:00,199 Speaker 6: it's not clear that that's going to be feasible, so 379 00:20:00,760 --> 00:20:04,040 Speaker 6: he may in due course have to make some tough choices. 380 00:20:04,480 --> 00:20:07,760 Speaker 6: If he will portray this deal with the Trump is 381 00:20:07,800 --> 00:20:10,200 Speaker 6: about to announce, he will portray that as a great 382 00:20:10,240 --> 00:20:12,600 Speaker 6: step forward. As I've said, I don't think it's a 383 00:20:12,600 --> 00:20:16,560 Speaker 6: great step forward. It's useful, but the baseline, as far 384 00:20:16,560 --> 00:20:18,760 Speaker 6: as I can, as far as I understand from the press, 385 00:20:18,920 --> 00:20:23,400 Speaker 6: the baseline ten percent step tariff will stay spectacular. 386 00:20:23,480 --> 00:20:26,360 Speaker 3: Thursday for you, Nora Rabinian. Richard portis with US now 387 00:20:26,480 --> 00:20:29,919 Speaker 3: Professor Porters in the London Business School, Anna one, we'll 388 00:20:29,960 --> 00:20:31,760 Speaker 3: get back to the markets here in the nine o'clock 389 00:20:31,760 --> 00:20:35,879 Speaker 3: are Michael Nathanson with US on media and also Jen's 390 00:20:36,000 --> 00:20:39,280 Speaker 3: Nordwig will be with us on a currency. I'm told 391 00:20:39,280 --> 00:20:41,560 Speaker 3: doctor Wong will be in studio. Very rare for her 392 00:20:41,600 --> 00:20:46,639 Speaker 3: to break away for entourage, Professor Portis. I think for Americans, 393 00:20:47,280 --> 00:20:50,240 Speaker 3: if you read the British papers, it's almost a febrile 394 00:20:50,880 --> 00:20:55,320 Speaker 3: political vibration if you will, across the different parts of 395 00:20:55,400 --> 00:20:59,320 Speaker 3: Great Britain. When you look right now at what we're seeing, 396 00:20:59,359 --> 00:21:03,080 Speaker 3: which is re form, Nigel Farage coming on, what is 397 00:21:03,119 --> 00:21:07,679 Speaker 3: the character? Are they quote like Trump? Are they like 398 00:21:07,800 --> 00:21:11,080 Speaker 3: Barry Goldwater from another time in place? What is the 399 00:21:11,200 --> 00:21:12,639 Speaker 3: character of the Farrage? 400 00:21:12,720 --> 00:21:16,840 Speaker 6: It's very Goldwater we could live with. The reform is 401 00:21:16,880 --> 00:21:19,680 Speaker 6: a different story. No, they're much more like Trump actually, 402 00:21:20,600 --> 00:21:24,040 Speaker 6: and they to some ext are modeling themselves on Trump 403 00:21:25,000 --> 00:21:29,240 Speaker 6: and trying to get the Trump impromatur. So I think 404 00:21:30,240 --> 00:21:32,680 Speaker 6: is it Are they dangerous in the medium term to 405 00:21:33,160 --> 00:21:36,560 Speaker 6: the established parties? They are very dangerous to the Conservative Party. 406 00:21:36,960 --> 00:21:40,440 Speaker 6: They are clearly pulling off a lot of Conservative Party 407 00:21:40,520 --> 00:21:44,600 Speaker 6: voters and the Conservative Party may be in terminal decline, 408 00:21:44,600 --> 00:21:47,600 Speaker 6: which would be a huge political revolution in the United 409 00:21:47,680 --> 00:21:52,200 Speaker 6: Kingdom given their major they're dominance over political activity since 410 00:21:52,240 --> 00:21:57,120 Speaker 6: the mid nineteenth century, so that would be a big thing. 411 00:21:57,720 --> 00:22:01,959 Speaker 6: But I somehow I think that the Farage effect and 412 00:22:02,000 --> 00:22:06,800 Speaker 6: so forth will moderate as we get closer to serious 413 00:22:08,080 --> 00:22:14,000 Speaker 6: general elections and I honestly, I cannot see and I 414 00:22:14,040 --> 00:22:17,119 Speaker 6: cannot see them holding the same, say, position in the 415 00:22:17,160 --> 00:22:19,400 Speaker 6: polls a couple of years from now, as they hold 416 00:22:19,400 --> 00:22:21,520 Speaker 6: out and you know, they've just taken over a number 417 00:22:21,800 --> 00:22:25,199 Speaker 6: of local councils and mayor mayor, they're going to have 418 00:22:25,240 --> 00:22:28,760 Speaker 6: to run these run these local governments and they have 419 00:22:28,800 --> 00:22:30,880 Speaker 6: no experience in doing that, and they're going. 420 00:22:30,800 --> 00:22:31,320 Speaker 2: To look bad. 421 00:22:31,720 --> 00:22:34,000 Speaker 5: Professor, whenever we get in a studio, we have to 422 00:22:34,040 --> 00:22:36,840 Speaker 5: ask you, what is the view of Brexit today with 423 00:22:36,920 --> 00:22:38,680 Speaker 5: a little bit of hindsight, ues, I. 424 00:22:38,560 --> 00:22:42,320 Speaker 6: Think the view of Brexit now that is wider and 425 00:22:42,400 --> 00:22:47,840 Speaker 6: wider understanding what a disaster it has been, the economic effects, 426 00:22:48,320 --> 00:22:53,160 Speaker 6: the political effects, and reform is one in a sense, 427 00:22:53,560 --> 00:22:57,640 Speaker 6: one response in some dimensions to the to the politics 428 00:22:58,119 --> 00:23:03,439 Speaker 6: of for Exit. And it's feeding on the voters that 429 00:23:03,720 --> 00:23:06,400 Speaker 6: still believe that Brexit must have been a good thing, 430 00:23:06,680 --> 00:23:08,000 Speaker 6: even though they're not feeling it. 431 00:23:08,960 --> 00:23:11,240 Speaker 5: And so when English fans go over to Paris for 432 00:23:11,359 --> 00:23:13,040 Speaker 5: soccer match, do they have to go through customs? 433 00:23:13,480 --> 00:23:15,920 Speaker 2: Sure? Jeez, that a consumption? 434 00:23:16,200 --> 00:23:20,280 Speaker 6: Absolutely absolutely, no, you go through passport control. 435 00:23:20,600 --> 00:23:22,679 Speaker 8: They're just like Americans homes business. 436 00:23:22,720 --> 00:23:27,280 Speaker 6: Yeah, it's we've lost some of our liberties. Yeah, no doubt. 437 00:23:27,520 --> 00:23:30,439 Speaker 2: Professor Porters, thank you so much. Richard Porters, a London 438 00:23:30,480 --> 00:23:31,119 Speaker 2: business school. 439 00:23:31,520 --> 00:23:35,440 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 440 00:23:35,440 --> 00:23:38,480 Speaker 1: starting at seven am Eastern on Apple Corplay and Android 441 00:23:38,480 --> 00:23:41,520 Speaker 1: Auto with the Bloomberg Business App. You can also listen 442 00:23:41,600 --> 00:23:44,879 Speaker 1: live on Amazon Alexa from our flagship New York station, 443 00:23:45,440 --> 00:23:48,080 Speaker 1: Just say Alexa Play Bloomberg eleven thirty. 444 00:23:48,320 --> 00:23:50,600 Speaker 5: Michael Nathan's and he's a founding partner in Senior Research 445 00:23:50,640 --> 00:23:53,240 Speaker 5: chneral set Moffat, Nathan sen and Folks just one of 446 00:23:53,240 --> 00:23:57,080 Speaker 5: the leading leading voice on a global media And today 447 00:23:57,080 --> 00:23:59,960 Speaker 5: we want to really focus on this little company called Google. 448 00:24:00,240 --> 00:24:03,040 Speaker 5: Some of the kids call it Alphabet. There's some instiant 449 00:24:03,040 --> 00:24:06,000 Speaker 5: comments coming out of Apple yesterday from one of their leaders, 450 00:24:06,040 --> 00:24:08,639 Speaker 5: and it kind of goes to the core of the 451 00:24:08,680 --> 00:24:11,800 Speaker 5: Google story, which is search. It's the stuff we grew 452 00:24:11,920 --> 00:24:14,199 Speaker 5: up on over the last twenty years. Michael, thanks for 453 00:24:14,280 --> 00:24:15,000 Speaker 5: joining us here. 454 00:24:15,480 --> 00:24:15,720 Speaker 8: Again. 455 00:24:15,800 --> 00:24:20,440 Speaker 5: We had Eddie Q, Apple's senior vice president for Services, 456 00:24:21,119 --> 00:24:24,320 Speaker 5: in testimony yesterday down to Washington, talking about how they 457 00:24:24,400 --> 00:24:28,119 Speaker 5: might think about AI as a replacement for maybe some 458 00:24:28,160 --> 00:24:31,280 Speaker 5: of the traditional search that we all grew up with what. 459 00:24:31,160 --> 00:24:33,200 Speaker 8: Does that mean for our friends at alphabet. 460 00:24:36,760 --> 00:24:38,439 Speaker 9: And then they also went on to say that, you know, 461 00:24:38,520 --> 00:24:42,480 Speaker 9: search traffic was declining through their own Safari browser. 462 00:24:42,720 --> 00:24:42,920 Speaker 2: Yep. 463 00:24:43,200 --> 00:24:46,199 Speaker 9: What it means is that the next five years we 464 00:24:46,440 --> 00:24:50,159 Speaker 9: all will search differently, and you know it's going to 465 00:24:50,160 --> 00:24:53,880 Speaker 9: take a little bit of time, but more and more 466 00:24:54,200 --> 00:24:59,680 Speaker 9: mainstream people will use chackbots to get single answer you 467 00:25:00,119 --> 00:25:02,639 Speaker 9: answers on queries. Right, So the idea of going to 468 00:25:02,760 --> 00:25:05,879 Speaker 9: links and finding the answers as you travel the web 469 00:25:06,640 --> 00:25:09,080 Speaker 9: will be old school, new school is going to be 470 00:25:09,440 --> 00:25:13,280 Speaker 9: here's your answer. The question is that's for one type 471 00:25:13,280 --> 00:25:16,840 Speaker 9: of search, which is non commercial, Well what about commercial search? 472 00:25:16,880 --> 00:25:19,800 Speaker 9: But yes, the goal is to give you one answer 473 00:25:19,880 --> 00:25:22,800 Speaker 9: using an AI chatbot to give you what you want 474 00:25:22,840 --> 00:25:25,280 Speaker 9: and not have you search all over the web for 475 00:25:25,320 --> 00:25:27,040 Speaker 9: the you know, to find the information. 476 00:25:27,600 --> 00:25:32,320 Speaker 5: So how does I mean that's the core of Google? 477 00:25:33,000 --> 00:25:35,000 Speaker 8: How do they respond? How do they adapt? 478 00:25:35,840 --> 00:25:36,199 Speaker 6: Okay? 479 00:25:36,280 --> 00:25:39,680 Speaker 9: So Google has been responding, uh, and they've been doing 480 00:25:39,680 --> 00:25:42,520 Speaker 9: a very measure right. So they've introduced something called AI overviews. 481 00:25:42,560 --> 00:25:45,560 Speaker 9: So if you do search now you will see some 482 00:25:45,640 --> 00:25:50,240 Speaker 9: of the above above the links an overview session which 483 00:25:50,280 --> 00:25:53,080 Speaker 9: gives you the answer that you want, right. Their point 484 00:25:53,160 --> 00:25:56,119 Speaker 9: is in the overview section. People then tend to click 485 00:25:56,160 --> 00:26:00,560 Speaker 9: from there to a destination, and they spend more time 486 00:26:00,800 --> 00:26:04,240 Speaker 9: in the destination. So that gives you an overview, clearly, 487 00:26:04,359 --> 00:26:06,439 Speaker 9: But if you're interested in the history of the New 488 00:26:06,480 --> 00:26:10,280 Speaker 9: York Rangers, you will leave that overview and go to 489 00:26:10,600 --> 00:26:15,240 Speaker 9: the Ranger homepage, right, That's what they're saying. Secondly, in 490 00:26:15,359 --> 00:26:19,280 Speaker 9: shopping at e commerce, you will get the one. You know, 491 00:26:19,320 --> 00:26:21,879 Speaker 9: if I'm looking for running shoes, I would get the 492 00:26:21,920 --> 00:26:25,439 Speaker 9: best running shoe for me. But if I'm a retailer, 493 00:26:25,800 --> 00:26:27,600 Speaker 9: I will pay more for that query. 494 00:26:27,680 --> 00:26:27,840 Speaker 2: Right. 495 00:26:27,880 --> 00:26:31,399 Speaker 9: I want to find my intention in that search. Right. 496 00:26:31,440 --> 00:26:32,760 Speaker 2: So that's what's going to happen. 497 00:26:32,920 --> 00:26:35,000 Speaker 3: So Michael, just to we got to move on to 498 00:26:35,040 --> 00:26:37,720 Speaker 3: another important topic. But the basic idea here is do 499 00:26:37,800 --> 00:26:42,879 Speaker 3: you believe Apple will lose the Google search mechanism in place? 500 00:26:42,960 --> 00:26:44,680 Speaker 2: Right now? Yeah? 501 00:26:44,760 --> 00:26:47,400 Speaker 9: Tom, that's you know, Craig has to sell at Apple 502 00:26:47,960 --> 00:26:52,120 Speaker 9: in part because we think when you read judgmenta's decision 503 00:26:52,480 --> 00:26:55,159 Speaker 9: and where they're going in this case, right, that looks like, 504 00:26:55,320 --> 00:26:57,280 Speaker 9: you know, Apple will not be able to get to 505 00:26:57,440 --> 00:26:59,879 Speaker 9: twenty billion of TAC they're getting now at Google. 506 00:27:00,080 --> 00:27:01,840 Speaker 2: I know it's going to change, yeah, Michael, I mean 507 00:27:01,840 --> 00:27:02,639 Speaker 2: it was an option. 508 00:27:02,760 --> 00:27:06,160 Speaker 3: I could look at New York Ranger highlights for the season, 509 00:27:06,880 --> 00:27:09,240 Speaker 3: or watch every episode of and Or. 510 00:27:09,760 --> 00:27:12,920 Speaker 2: You need to explain to me how Disney spent. 511 00:27:12,960 --> 00:27:16,800 Speaker 3: Six hundred and fifty million dollars that they admit for 512 00:27:16,920 --> 00:27:20,080 Speaker 3: two seasons of what cass and and Or is doing 513 00:27:20,600 --> 00:27:24,440 Speaker 3: and they somehow make money off my nineteen dollars a month. 514 00:27:24,880 --> 00:27:26,240 Speaker 3: I still don't get the math. 515 00:27:26,600 --> 00:27:27,600 Speaker 2: How do they do it? Yes? 516 00:27:28,640 --> 00:27:31,800 Speaker 9: Yes, well again, Tom, you know what if churn rate 517 00:27:31,920 --> 00:27:34,440 Speaker 9: is only one or two or three percent, not everyone's 518 00:27:34,480 --> 00:27:38,479 Speaker 9: watching and Or, and they've taken pricing on on Disney 519 00:27:38,480 --> 00:27:42,320 Speaker 9: Plus and basically people are happy with you know, they're 520 00:27:42,320 --> 00:27:44,360 Speaker 9: not cherry out of the product. It's kind of amazing 521 00:27:44,440 --> 00:27:47,720 Speaker 9: right now. Disney's an anomaly because they also have kids programming, 522 00:27:48,440 --> 00:27:51,000 Speaker 9: but you know, charity in streaming is pretty high. Look 523 00:27:51,000 --> 00:27:53,800 Speaker 9: at Warner's results today, you know we'd argue that it 524 00:27:53,880 --> 00:27:56,639 Speaker 9: wasn't a great result. So that's a whole another topic. 525 00:27:57,359 --> 00:28:02,000 Speaker 5: So, Michael, as it relates to Disney, they finally turned 526 00:28:02,040 --> 00:28:05,520 Speaker 5: the corner with your clients with institutional investors out there 527 00:28:05,680 --> 00:28:09,960 Speaker 5: yesterday by saying, hey, we are solidly profitable in streaming. 528 00:28:10,000 --> 00:28:11,200 Speaker 5: We figured this stuff out. 529 00:28:12,040 --> 00:28:13,200 Speaker 8: The parks is a great business. 530 00:28:13,240 --> 00:28:14,720 Speaker 5: You all know, the parks is a great business, and 531 00:28:14,760 --> 00:28:16,560 Speaker 5: just don't even worry about the cable networks. 532 00:28:16,640 --> 00:28:18,440 Speaker 8: Have they sold that story? 533 00:28:19,200 --> 00:28:21,840 Speaker 9: Well, Paul, that is exactly the story that I would sell, 534 00:28:21,880 --> 00:28:24,240 Speaker 9: and you just framed it really well. I think people 535 00:28:24,400 --> 00:28:26,520 Speaker 9: still worried about the macro. It's hard not to when 536 00:28:26,520 --> 00:28:29,560 Speaker 9: we listened Bloomberg Radio the morning, So I think yesterday 537 00:28:29,600 --> 00:28:31,440 Speaker 9: also was a bit of a response. 538 00:28:32,280 --> 00:28:33,240 Speaker 2: No, no, come on. 539 00:28:33,280 --> 00:28:37,639 Speaker 9: It's it's it's you know, these are nervous times, right, 540 00:28:37,680 --> 00:28:40,320 Speaker 9: But we were so worried about the parks, and historically 541 00:28:40,400 --> 00:28:43,120 Speaker 9: parks tend to be a little bit later, you know, 542 00:28:43,120 --> 00:28:46,280 Speaker 9: in terms of canaries and coal mine. So I think 543 00:28:46,360 --> 00:28:48,720 Speaker 9: the recovery in stock yesterday was like, hey, we'ren't seeing 544 00:28:48,760 --> 00:28:51,560 Speaker 9: it yet. In Disney, we're good for another quarter. But Paul, 545 00:28:51,640 --> 00:28:53,760 Speaker 9: to your point, if they could do seven bucks of earnings, 546 00:28:53,800 --> 00:28:55,880 Speaker 9: which has been a mythical number at Disney for years, 547 00:28:56,560 --> 00:28:59,360 Speaker 9: and it's all parks at all streaming, the stocks are 548 00:28:59,360 --> 00:29:01,440 Speaker 9: with a lot more than a hundred bucks right now. Right, 549 00:29:01,880 --> 00:29:03,360 Speaker 9: That's what I think people are waking up. 550 00:29:03,320 --> 00:29:04,480 Speaker 2: To Michael Nathanson. 551 00:29:04,560 --> 00:29:10,280 Speaker 3: I'm fascinated by the execution of Brian Roberts Incorporated. I mean, 552 00:29:10,320 --> 00:29:13,000 Speaker 3: there's eight ways to go here, folks. For those of 553 00:29:13,040 --> 00:29:17,560 Speaker 3: you worldwide, NBC is splitting apart some of their Moffitt 554 00:29:17,600 --> 00:29:22,880 Speaker 3: Nathans's world into different announcements, different geographies. Lots of emotion 555 00:29:23,400 --> 00:29:26,320 Speaker 3: within the Bloomberg eleven three ye oh region, but take 556 00:29:26,400 --> 00:29:29,440 Speaker 3: it worldwide. Are we going to see every media company 557 00:29:29,720 --> 00:29:34,880 Speaker 3: do this, Michael Nathanson where they split apart the conglomerate. 558 00:29:35,920 --> 00:29:38,360 Speaker 9: Tom, That's what's going to have to happen here, right 559 00:29:38,440 --> 00:29:41,400 Speaker 9: because the market doesn't pay anything anymore for cable networks, 560 00:29:42,520 --> 00:29:45,680 Speaker 9: so basically those assets will be shedded. But what's left 561 00:29:46,480 --> 00:29:48,280 Speaker 9: there needs to be consolidation. This has been a theme 562 00:29:48,320 --> 00:29:51,000 Speaker 9: we've had with you for years, so you can break 563 00:29:51,040 --> 00:29:53,960 Speaker 9: out the caven outside of comcasts. You still have a 564 00:29:53,960 --> 00:29:57,000 Speaker 9: problem with Peacock. It's not big enough, it's not global. 565 00:29:57,240 --> 00:30:00,760 Speaker 9: You need a partner. So I still think we have, yeah, 566 00:30:00,920 --> 00:30:04,719 Speaker 9: smaller companies with less assets, but at some point a 567 00:30:04,720 --> 00:30:09,040 Speaker 9: consolidation of what's remaining. But we're not there yet because 568 00:30:09,200 --> 00:30:10,760 Speaker 9: I don't see M and A on the you know, 569 00:30:10,800 --> 00:30:12,880 Speaker 9: on the table because of regulatory issues. 570 00:30:13,240 --> 00:30:14,680 Speaker 8: Well, Michael, that kind of goes to it. I mean 571 00:30:14,720 --> 00:30:16,120 Speaker 8: you mentioned Warner Brothers Discovery. 572 00:30:16,160 --> 00:30:18,720 Speaker 5: Again, their numbers were a little disappointing here today, But 573 00:30:18,840 --> 00:30:22,160 Speaker 5: you think about the Warner Brothers Discoveries that paramounts maybe 574 00:30:22,160 --> 00:30:26,360 Speaker 5: even in some pieces of Comcast. Is this an administration 575 00:30:26,520 --> 00:30:29,640 Speaker 5: that would allow this industry to to consolidate? 576 00:30:29,680 --> 00:30:30,040 Speaker 8: Do you think? 577 00:30:31,000 --> 00:30:31,080 Speaker 3: No? 578 00:30:31,240 --> 00:30:33,200 Speaker 9: For those of you who are listening in your car, 579 00:30:33,240 --> 00:30:34,840 Speaker 9: I'm nodding my head, I'm shaking my head. 580 00:30:34,920 --> 00:30:36,080 Speaker 2: No, there's no way. 581 00:30:37,160 --> 00:30:39,680 Speaker 9: There is no way that this administration. You know, they're 582 00:30:39,720 --> 00:30:42,360 Speaker 9: they're holding up a deal with Paramount because of sixty 583 00:30:42,400 --> 00:30:45,880 Speaker 9: minutes right. There's no way they're going to allow these 584 00:30:45,880 --> 00:30:48,680 Speaker 9: companies to get healthier through consolidation. 585 00:30:48,760 --> 00:30:51,240 Speaker 2: It's not going to happen. Michael's single best buy please 586 00:30:51,320 --> 00:30:51,800 Speaker 2: before we. 587 00:30:51,760 --> 00:30:55,720 Speaker 9: Go, tom My single best buy. At this point in time, 588 00:30:55,880 --> 00:30:59,880 Speaker 9: we've been pushing Meta here. It's pulled back a bit. 589 00:31:00,400 --> 00:31:03,160 Speaker 9: We get you know, we've been pushing Meta. Robert who 590 00:31:03,160 --> 00:31:06,160 Speaker 9: now covers Media has a buy on Netflix. You've had 591 00:31:06,200 --> 00:31:09,760 Speaker 9: them on in Disney. So I'd say we're going with 592 00:31:09,800 --> 00:31:11,800 Speaker 9: the hands out of winning this year. That's what we're pushing. 593 00:31:12,640 --> 00:31:14,680 Speaker 9: But but to be fair, Meta has not been winning. 594 00:31:15,080 --> 00:31:17,440 Speaker 9: It's just I think it's a safe it's a safe 595 00:31:17,600 --> 00:31:21,160 Speaker 9: play of your large cap tech stocks. AI is seen 596 00:31:21,200 --> 00:31:24,480 Speaker 9: as a beneficiary to them, and that's a hard you know, 597 00:31:24,480 --> 00:31:26,560 Speaker 9: it's a hard ask for some of the other companies. 598 00:31:26,640 --> 00:31:29,160 Speaker 3: Well, Lisa Matteo is a hard ask as well. Can 599 00:31:29,240 --> 00:31:33,000 Speaker 3: Mike Sullivan get it done for the New York Rangers? 600 00:31:33,040 --> 00:31:35,520 Speaker 9: Oh, Tom, we need to change a lot of players 601 00:31:35,520 --> 00:31:39,080 Speaker 9: on that team. It's not the coach, it's the administration. 602 00:31:39,120 --> 00:31:41,120 Speaker 9: You gotta get rid of with the GM also, I 603 00:31:41,240 --> 00:31:42,040 Speaker 9: just want to go there. 604 00:31:42,320 --> 00:31:44,800 Speaker 2: Yeah, but yeah, but I'll. 605 00:31:44,680 --> 00:31:47,040 Speaker 9: Tell you this on the question of the day, which 606 00:31:47,080 --> 00:31:50,280 Speaker 9: is alphabet. I think the market is big time wrestling 607 00:31:51,000 --> 00:31:54,920 Speaker 9: about how disruptive AI will be to these companies that 608 00:31:54,920 --> 00:31:57,680 Speaker 9: have been bulletproof for most of my career, right, Like, 609 00:31:58,080 --> 00:32:01,240 Speaker 9: that's the big change, is that finally there's a question 610 00:32:01,360 --> 00:32:06,520 Speaker 9: mark about sustainability and investment levels. And I think you've 611 00:32:06,520 --> 00:32:10,120 Speaker 9: got Alphabet that in that zone of like, look, there's 612 00:32:10,200 --> 00:32:12,800 Speaker 9: uncertainty here for the first time, right, And it's been 613 00:32:12,840 --> 00:32:15,240 Speaker 9: a great, great company, great stock, and now we. 614 00:32:15,280 --> 00:32:17,800 Speaker 3: Have don't be a stranger. Michael Nathans, and thank you 615 00:32:17,880 --> 00:32:20,960 Speaker 3: so much. He co writes with Craig Moffatt Michael Nathanson 616 00:32:21,080 --> 00:32:23,760 Speaker 3: Definitive on Wall Street. 617 00:32:29,080 --> 00:32:33,000 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 618 00:32:33,040 --> 00:32:36,440 Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto 619 00:32:36,480 --> 00:32:39,320 Speaker 1: with the Bloomberg Business app. You can also watch us 620 00:32:39,320 --> 00:32:43,200 Speaker 1: live every weekday on YouTube and always on the Bloomberg terminal. 621 00:32:43,360 --> 00:32:44,920 Speaker 2: Lisa Newspapers, what do you have? 622 00:32:45,040 --> 00:32:48,600 Speaker 10: Okay, we're starting with fashion. Okay, we're starting actually with thrifting. 623 00:32:48,720 --> 00:32:53,040 Speaker 10: This is shopping at secondhand stores. Yes, we go from 624 00:32:53,080 --> 00:32:56,600 Speaker 10: meg Gala and Louis Baton to thrifting. Okay, I love 625 00:32:56,680 --> 00:32:59,480 Speaker 10: doing it, my daughter loves doing it. But Business Insider says, 626 00:32:59,520 --> 00:33:01,280 Speaker 10: you know what, a lot more people are starting to 627 00:33:01,320 --> 00:33:03,440 Speaker 10: do it. Go to these thrift stores because tariffs on 628 00:33:03,560 --> 00:33:07,280 Speaker 10: Chinese goods, so it's cheaper, it's more affordable. They have 629 00:33:07,320 --> 00:33:08,320 Speaker 10: clearance prices. 630 00:33:08,360 --> 00:33:08,560 Speaker 6: You have. 631 00:33:08,640 --> 00:33:11,240 Speaker 10: The senior leader at Goodwill is saying that it usually 632 00:33:11,280 --> 00:33:14,520 Speaker 10: happens when times are tough. Right, people are watching their budgets, 633 00:33:14,520 --> 00:33:17,240 Speaker 10: so they go to these thrift stores. You have reseller 634 00:33:17,360 --> 00:33:19,840 Speaker 10: thread Up. They predict the secondhand market to reach three 635 00:33:19,920 --> 00:33:22,600 Speaker 10: hundred and fifty billion by twenty twenty eight. That's up 636 00:33:22,600 --> 00:33:26,280 Speaker 10: from one ninety seven billion and twenty twenty three. It's 637 00:33:26,320 --> 00:33:27,960 Speaker 10: all about prices and what you come forward. 638 00:33:28,080 --> 00:33:31,160 Speaker 2: How's rent the runway and all that doing where you rent. 639 00:33:31,400 --> 00:33:33,920 Speaker 2: I never understood renting clothes, but there it is. 640 00:33:34,120 --> 00:33:37,080 Speaker 10: It works because you don't have to kind of buy 641 00:33:37,080 --> 00:33:38,760 Speaker 10: something and then just keep it and just keep wearing 642 00:33:38,760 --> 00:33:41,520 Speaker 10: the same thing. You always get something new. You you know, 643 00:33:41,560 --> 00:33:42,959 Speaker 10: give it back and you get something new. 644 00:33:43,000 --> 00:33:44,760 Speaker 5: A lot of the youngs that way, ladies here at 645 00:33:44,800 --> 00:33:46,800 Speaker 5: Bloomberg News, I see they do rent the runway. 646 00:33:47,320 --> 00:33:49,040 Speaker 8: They say it, We're great, they love it. 647 00:33:49,400 --> 00:33:51,280 Speaker 10: I haven't particularly done it, but I've heard a lot 648 00:33:51,320 --> 00:33:53,520 Speaker 10: of stories, especially if you, you know, go out to 649 00:33:53,520 --> 00:33:55,080 Speaker 10: different events like the Medcala. 650 00:33:55,520 --> 00:33:56,640 Speaker 8: She's the one that turned on to that. 651 00:33:56,920 --> 00:33:57,160 Speaker 2: Yeah. 652 00:33:58,400 --> 00:33:59,720 Speaker 10: Next, Yeah, it's a big thing. 653 00:34:00,480 --> 00:34:00,800 Speaker 2: Okay. 654 00:34:00,840 --> 00:34:03,840 Speaker 10: We've talked about AI, right, all the different uses for AI. 655 00:34:04,600 --> 00:34:07,160 Speaker 10: Another way AI is being put to use. I saw 656 00:34:07,200 --> 00:34:07,600 Speaker 10: this in the. 657 00:34:07,520 --> 00:34:08,240 Speaker 8: New York Times. 658 00:34:08,280 --> 00:34:12,760 Speaker 10: It's bringing British novelist Agatha Christie back to life kind 659 00:34:12,800 --> 00:34:15,920 Speaker 10: of Okay, So she passed away in nineteen seventy six, right, 660 00:34:15,920 --> 00:34:19,200 Speaker 10: but now you have this as batar of her teaching 661 00:34:19,320 --> 00:34:23,120 Speaker 10: an online writing course with BBC Maestro. This is this 662 00:34:23,239 --> 00:34:27,000 Speaker 10: online lecture series like think masterclass, right, same thing, about 663 00:34:27,040 --> 00:34:30,880 Speaker 10: one hundred and five dollars. So how it actually worked. 664 00:34:30,960 --> 00:34:33,640 Speaker 10: You had this team of researchers, right, they wrote a script, 665 00:34:33,840 --> 00:34:37,359 Speaker 10: they used her writings, her archived interviews, and they made 666 00:34:37,400 --> 00:34:41,439 Speaker 10: a digital prosthetic which was made with AI and then 667 00:34:41,640 --> 00:34:47,120 Speaker 10: fitted over a real actor's performance. So this is what 668 00:34:47,160 --> 00:34:50,600 Speaker 10: they're doing the company this BBC Maestro says, you know what, 669 00:34:50,600 --> 00:34:52,520 Speaker 10: we're not trying to pretend that this is really her, 670 00:34:53,040 --> 00:34:55,040 Speaker 10: you know, brought to life. You know, we're just kind 671 00:34:55,040 --> 00:34:57,480 Speaker 10: of bringing this to people. But her family though, who 672 00:34:57,520 --> 00:34:59,080 Speaker 10: manages her, say it's say they're okay with it. 673 00:34:59,120 --> 00:34:59,919 Speaker 8: They're fully on board. 674 00:35:00,120 --> 00:35:04,440 Speaker 3: We maybe just read one of her classic books and 675 00:35:04,520 --> 00:35:05,680 Speaker 3: how she ends. 676 00:35:05,560 --> 00:35:08,080 Speaker 2: A book like no one else there you go. I 677 00:35:08,080 --> 00:35:11,920 Speaker 2: mean that would be like the strangest thing AI. 678 00:35:12,120 --> 00:35:15,480 Speaker 3: Michael Michael Nathanson with us here in the nine o'clock. 679 00:35:15,560 --> 00:35:18,239 Speaker 2: Oh yeah, our on Google Apple in AI. What do 680 00:35:18,239 --> 00:35:18,799 Speaker 2: you got next? 681 00:35:19,000 --> 00:35:19,320 Speaker 6: Okay? 682 00:35:19,920 --> 00:35:21,000 Speaker 8: Real I d day. 683 00:35:21,080 --> 00:35:23,720 Speaker 10: Right, So we've been hearing so much about the delays editports, 684 00:35:23,840 --> 00:35:27,440 Speaker 10: especially Newark. Adding to the noise was the big switch 685 00:35:27,480 --> 00:35:29,160 Speaker 10: to real IDs that started yesterday. 686 00:35:29,440 --> 00:35:31,279 Speaker 2: But I have one. 687 00:35:31,520 --> 00:35:33,120 Speaker 8: You're the only one I know, but a. 688 00:35:33,080 --> 00:35:34,759 Speaker 10: Lot of people don't. The lines of d m V 689 00:35:34,880 --> 00:35:37,880 Speaker 10: are crazy. But it turns out that first day yesterday 690 00:35:38,040 --> 00:35:41,439 Speaker 10: wasn't actually that bad. The Wallstreet Journal said they sent 691 00:35:41,440 --> 00:35:44,040 Speaker 10: a travel conomist, they test, They tested the system with 692 00:35:44,120 --> 00:35:46,480 Speaker 10: no photo. I D got through in twenty minutes flat. 693 00:35:47,040 --> 00:35:49,320 Speaker 8: I mean, this is this is from nine to eleven. 694 00:35:49,680 --> 00:35:53,000 Speaker 5: Yes, this, this whole move towards a different ID is 695 00:35:53,040 --> 00:35:54,480 Speaker 5: from nine eleven. 696 00:35:54,640 --> 00:35:57,839 Speaker 8: Were finally they kept getting pushed. I mean, what's wrong 697 00:35:57,880 --> 00:36:01,040 Speaker 8: with the driver's license? Was that really the problem? Nine eleven? 698 00:36:01,080 --> 00:36:01,440 Speaker 8: I don't think. 699 00:36:01,800 --> 00:36:04,239 Speaker 2: I don't get It's just this is. 700 00:36:04,200 --> 00:36:06,560 Speaker 8: A solution in search of a problem. I have no 701 00:36:06,840 --> 00:36:09,520 Speaker 8: but I've got the I've got the passport. I've got 702 00:36:09,520 --> 00:36:10,000 Speaker 8: the passport. 703 00:36:10,440 --> 00:36:12,919 Speaker 5: Not bringing my passport, I've got the Global entry card 704 00:36:13,120 --> 00:36:16,279 Speaker 5: and that's and that works okay. So but I mean, 705 00:36:17,040 --> 00:36:19,040 Speaker 5: talk about a solution in search of a problem. 706 00:36:19,120 --> 00:36:24,759 Speaker 3: I strongly agree just sold that America needs us. 707 00:36:25,040 --> 00:36:27,000 Speaker 8: No, it's just it's tough. 708 00:36:27,000 --> 00:36:29,600 Speaker 10: But you have to go there with the right documentation. 709 00:36:29,680 --> 00:36:32,040 Speaker 10: Because my son got turned away three times, and. 710 00:36:32,680 --> 00:36:35,640 Speaker 8: New Jersey's compliance with this is like the worst in 711 00:36:35,680 --> 00:36:36,520 Speaker 8: the country. 712 00:36:36,640 --> 00:36:38,040 Speaker 2: I've heard that Texas. 713 00:36:38,040 --> 00:36:43,480 Speaker 8: Thank you very much. DMV. Okay, get a real downer, 714 00:36:46,320 --> 00:36:49,080 Speaker 8: New Jersey. DMV. I've got a lifetime of scars. 715 00:36:49,160 --> 00:36:52,760 Speaker 3: There is there such a thing as a Guinness Mimosa. 716 00:36:52,800 --> 00:36:56,960 Speaker 2: There is the newspapers. Thank you so much. 717 00:36:57,440 --> 00:37:02,279 Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify, 718 00:37:02,400 --> 00:37:06,680 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 719 00:37:06,840 --> 00:37:10,279 Speaker 1: seven to ten am Eastern on Bloomberg dot com, the 720 00:37:10,360 --> 00:37:14,400 Speaker 1: iHeartRadio app tune In, and the Bloomberg Business app. You 721 00:37:14,440 --> 00:37:17,799 Speaker 1: can also watch us live every weekday on YouTube and 722 00:37:18,000 --> 00:37:19,720 Speaker 1: always on the Bloomberg terminal.