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 --> 00:00:26,920 Speaker 1: us live on YouTube. 6 00:00:27,080 --> 00:00:29,920 Speaker 2: Join us down what a privileged in studio here Semashaw, 7 00:00:30,000 --> 00:00:33,440 Speaker 2: who really has had an impact on the view of 8 00:00:33,440 --> 00:00:39,199 Speaker 2: global economics, I should say from London, from the United Kingdom. 9 00:00:39,600 --> 00:00:42,000 Speaker 2: She's probably here in pre prep for the president's trip 10 00:00:42,400 --> 00:00:45,400 Speaker 2: do some little protocol and that kind of thing. I 11 00:00:45,400 --> 00:00:49,320 Speaker 2: can understand it. Welcome, Thank you so much for joining today. 12 00:00:49,360 --> 00:00:52,840 Speaker 2: I see your lengthy note here. But what we really 13 00:00:52,880 --> 00:00:56,240 Speaker 2: want to know is how does this equity market keep 14 00:00:56,320 --> 00:01:00,000 Speaker 2: on going? Do you buy the gloom sell the news 15 00:01:00,240 --> 00:01:02,120 Speaker 2: Wednesday at two pm. 16 00:01:02,720 --> 00:01:05,000 Speaker 3: Thanks about having me, it's great to be here. Well, 17 00:01:05,360 --> 00:01:07,400 Speaker 3: we're still positive on the acuity market. I mean, I 18 00:01:07,440 --> 00:01:09,880 Speaker 3: think it's more of a muddling through. There's no it's 19 00:01:09,920 --> 00:01:12,360 Speaker 3: difficult to see any major catalyst which is going. 20 00:01:12,280 --> 00:01:15,319 Speaker 4: To create this very big upward leg from here. 21 00:01:15,800 --> 00:01:17,720 Speaker 3: But as long as the economy is chugging along, and 22 00:01:17,800 --> 00:01:20,160 Speaker 3: yes it's slowing, but we're not expecting recession, you know, 23 00:01:20,480 --> 00:01:22,759 Speaker 3: and its speech is still pretty positive. It can keep 24 00:01:22,800 --> 00:01:26,120 Speaker 3: going up. I just don't expect to see very significant. 25 00:01:25,560 --> 00:01:30,200 Speaker 2: Returns from the animal spirit of nominal GDP. The ECB 26 00:01:30,480 --> 00:01:34,680 Speaker 2: has to confront certainly a sub four percent nominal GDP. 27 00:01:35,240 --> 00:01:39,520 Speaker 2: What's that statistic versus America? There's a huge difference in 28 00:01:39,560 --> 00:01:42,600 Speaker 2: the growthiness of America versus Europe, isn't it? Yeah? 29 00:01:42,680 --> 00:01:42,959 Speaker 4: There is. 30 00:01:43,000 --> 00:01:45,600 Speaker 3: There is a really significant difference. And I think what's 31 00:01:45,600 --> 00:01:48,200 Speaker 3: been interesting is that for this year you've seen that 32 00:01:48,280 --> 00:01:51,360 Speaker 3: investors almost turned away from that very significant difference and 33 00:01:51,360 --> 00:01:53,960 Speaker 3: putting a lot more focus on Europe. That seems like 34 00:01:54,000 --> 00:01:56,360 Speaker 3: it's faded a bit in the last few months, and 35 00:01:56,520 --> 00:01:58,400 Speaker 3: certainly from our analysts, they're looking and saying, look, the 36 00:01:58,400 --> 00:02:00,080 Speaker 3: fundamental picture for Europe. 37 00:02:00,160 --> 00:02:01,200 Speaker 4: Is not as good as the US. 38 00:02:01,320 --> 00:02:03,360 Speaker 3: Yes, there's a slow down in the US, there's likely 39 00:02:03,400 --> 00:02:05,440 Speaker 3: to be slow down in Europe at the same time. 40 00:02:05,480 --> 00:02:06,600 Speaker 4: It's difficult to avoid that. 41 00:02:07,040 --> 00:02:09,400 Speaker 3: So how can you continue to be very positive on 42 00:02:09,480 --> 00:02:10,440 Speaker 3: Europe versus US? 43 00:02:10,520 --> 00:02:12,760 Speaker 2: Will you tell Chairman Paul the operative word? At the 44 00:02:12,760 --> 00:02:16,200 Speaker 2: press conference on Wednesday? Solid he love saying that it's 45 00:02:16,200 --> 00:02:20,240 Speaker 2: a solid economy. It sucks like solid. Last night, did 46 00:02:20,240 --> 00:02:22,400 Speaker 2: they win? I went to they were the same, they won. 47 00:02:22,639 --> 00:02:25,120 Speaker 4: Sem told me the idea I do. 48 00:02:25,280 --> 00:02:27,160 Speaker 3: I do have a tendency to use the word solid 49 00:02:27,200 --> 00:02:28,800 Speaker 3: as well. Yeah, I think that's a good description for 50 00:02:28,840 --> 00:02:31,480 Speaker 3: the US at the moment. You know, we're expecting, as 51 00:02:31,480 --> 00:02:34,480 Speaker 3: I said, slow down the trough in the in the 52 00:02:34,520 --> 00:02:37,679 Speaker 3: growth picture around Q four, Q one, and then a rebound, 53 00:02:37,680 --> 00:02:40,919 Speaker 3: a gentle rebound through twenty twenty six, but not really 54 00:02:40,960 --> 00:02:42,800 Speaker 3: going above tun trend growth in the US. 55 00:02:42,840 --> 00:02:44,480 Speaker 4: So it's it's a picture. 56 00:02:44,520 --> 00:02:47,200 Speaker 3: It's nothing particularly exciting, but you don't necessarily need to 57 00:02:47,200 --> 00:02:49,640 Speaker 3: have exciting to see equity markets continue to rally. 58 00:02:49,720 --> 00:02:52,400 Speaker 5: We wait with baited breath for that statement and whatever 59 00:02:52,440 --> 00:02:55,600 Speaker 5: adject title descriptive that the chair uses to describe the economy. 60 00:02:55,800 --> 00:02:57,880 Speaker 5: There is this debate, as I mentioned, between twenty five 61 00:02:57,960 --> 00:03:00,040 Speaker 5: or fifty at this meeting, how do you see that 62 00:03:00,440 --> 00:03:03,360 Speaker 5: shaking out? Can you understand the ration now? For those 63 00:03:03,400 --> 00:03:05,200 Speaker 5: who do think that the Fed might want to go 64 00:03:05,200 --> 00:03:05,680 Speaker 5: bigger at this. 65 00:03:05,680 --> 00:03:09,240 Speaker 3: Point in time, I mean, I'm sending very heavily in 66 00:03:09,240 --> 00:03:11,280 Speaker 3: the twenty five base point camp. I've been saying that 67 00:03:11,360 --> 00:03:14,760 Speaker 3: a fifty would be really about politics more than economics. 68 00:03:15,600 --> 00:03:18,639 Speaker 3: Having said that, I guess I do have to pay 69 00:03:18,680 --> 00:03:20,240 Speaker 3: some kind of lip service to the fact that, look, 70 00:03:20,240 --> 00:03:22,920 Speaker 3: once the unemployment rate starts to rise in a normal environment, 71 00:03:22,960 --> 00:03:26,280 Speaker 3: take out the labor supply issues, then it does typically spiral, 72 00:03:26,720 --> 00:03:27,480 Speaker 3: so you do want to. 73 00:03:27,440 --> 00:03:28,120 Speaker 4: Get ahead of it. 74 00:03:28,639 --> 00:03:31,359 Speaker 3: But at this phase, looking across the broad set of 75 00:03:31,400 --> 00:03:36,360 Speaker 3: economic data, earnings, credit spreads, there is very little here 76 00:03:36,440 --> 00:03:39,080 Speaker 3: at this point in time to justify that kind of 77 00:03:39,120 --> 00:03:41,640 Speaker 3: emergency sized cut. So I would have to say there's 78 00:03:41,640 --> 00:03:44,560 Speaker 3: something political if you get a fifty base puish, did you. 79 00:03:44,600 --> 00:03:46,800 Speaker 5: Then interpret what we've seen over the last week or 80 00:03:46,840 --> 00:03:49,160 Speaker 5: so in terms of labor market data? So first that 81 00:03:49,760 --> 00:03:53,800 Speaker 5: monthly jobs report, the Revision's weekly claims which which surprits 82 00:03:53,840 --> 00:03:56,240 Speaker 5: the downside as well. Taking all of that and nargrogant, 83 00:03:56,240 --> 00:03:58,200 Speaker 5: what's your sense of where this labor market is and 84 00:03:58,200 --> 00:03:58,800 Speaker 5: where it's going. 85 00:03:59,600 --> 00:04:02,120 Speaker 3: I think there is a slowdown and labor demand. I 86 00:04:02,120 --> 00:04:06,000 Speaker 3: think we can clearly see that, but the labor supply 87 00:04:06,120 --> 00:04:09,640 Speaker 3: issue is almost offsetting the magnitude of that weakness. 88 00:04:10,000 --> 00:04:12,200 Speaker 4: So there is something underway. It does need to be getting, 89 00:04:12,400 --> 00:04:13,800 Speaker 4: you know, the FED does need to get in front 90 00:04:13,840 --> 00:04:14,080 Speaker 4: of it. 91 00:04:14,520 --> 00:04:16,440 Speaker 3: But are we moving to a point where we can 92 00:04:16,440 --> 00:04:19,640 Speaker 3: start talking about recession realistically. I don't think we're there, 93 00:04:19,720 --> 00:04:21,760 Speaker 3: but the Fed does need to come in now in 94 00:04:21,880 --> 00:04:24,360 Speaker 3: order to stop it from deteriorating to that point where 95 00:04:24,440 --> 00:04:27,440 Speaker 3: you do become you know, recession does become the keyword again. 96 00:04:27,600 --> 00:04:30,320 Speaker 2: How does a dollar fold into this? I mean, I know, 97 00:04:30,400 --> 00:04:34,000 Speaker 2: I did one chart today, folks, in the in betweenness 98 00:04:34,000 --> 00:04:36,719 Speaker 2: of the dollar right now is remarkable. I guess it's resilient. 99 00:04:37,040 --> 00:04:39,520 Speaker 2: That's the way the street's looking at it. But are 100 00:04:39,520 --> 00:04:42,360 Speaker 2: you looking for a catalyst for dollar movement or do 101 00:04:42,400 --> 00:04:43,919 Speaker 2: we just get used to sleepy dollar. 102 00:04:44,560 --> 00:04:46,000 Speaker 3: I think that the dollar can move a little bit 103 00:04:46,000 --> 00:04:47,760 Speaker 3: lower over the coming months simply just you know, just 104 00:04:47,800 --> 00:04:50,800 Speaker 3: from a central bank perspective, globally, the US is the 105 00:04:50,800 --> 00:04:52,920 Speaker 3: one which is still cutting rates. You're seeing a lot 106 00:04:52,960 --> 00:04:54,680 Speaker 3: of the other central banks at least coming to a 107 00:04:54,800 --> 00:04:58,839 Speaker 3: pause or if not a complete halt. So from a 108 00:04:58,880 --> 00:05:01,600 Speaker 3: fundamental perspective, I should put a little bit further down 109 00:05:01,680 --> 00:05:03,800 Speaker 3: the pressure on the dollar. I think the key question 110 00:05:03,880 --> 00:05:05,839 Speaker 3: is is you know, as we know about you know, 111 00:05:05,880 --> 00:05:07,680 Speaker 3: the smile for the dollar when you do see that 112 00:05:07,720 --> 00:05:11,360 Speaker 3: global weakness, so US weakness, so typically the dollars tends 113 00:05:11,360 --> 00:05:13,880 Speaker 3: to strengthen. That's what we've seen in the last week 114 00:05:13,960 --> 00:05:15,719 Speaker 3: or two. I don't necessarily think that's going to hold, 115 00:05:15,880 --> 00:05:19,080 Speaker 3: especially if you continue to see this pressure on Lisa 116 00:05:19,160 --> 00:05:21,800 Speaker 3: Cooke on FED independence. Those are all things which are 117 00:05:21,800 --> 00:05:23,720 Speaker 3: slowly eating away at the other strength. 118 00:05:23,880 --> 00:05:25,839 Speaker 5: Talk a bit about that, because we're this kind of 119 00:05:25,839 --> 00:05:28,599 Speaker 5: pivotal moment where we don't really know which personnel they 120 00:05:28,560 --> 00:05:30,600 Speaker 5: are going to be around the table when this decision 121 00:05:30,680 --> 00:05:33,160 Speaker 5: is made this week. Lisa Cooke fighting to be there 122 00:05:33,279 --> 00:05:35,359 Speaker 5: is kind of a normal governor fighting that out in 123 00:05:35,360 --> 00:05:37,880 Speaker 5: the courts. The government course pushing against her. The administration 124 00:05:38,480 --> 00:05:40,680 Speaker 5: is Steph Muren has a vote tonight in the Senate. 125 00:05:40,680 --> 00:05:43,520 Speaker 5: Will he make it in time? We'll see, seems likely. 126 00:05:43,680 --> 00:05:46,080 Speaker 5: How much does personnel matter as the FED gets together 127 00:05:46,120 --> 00:05:47,239 Speaker 5: to make this policy decision. 128 00:05:47,720 --> 00:05:50,320 Speaker 3: I don't think it necessarily matters for the great decision 129 00:05:50,400 --> 00:05:53,000 Speaker 3: on Wednesday. I think it's when when you get further 130 00:05:53,080 --> 00:05:56,720 Speaker 3: out into questions really about the independence. You know, how 131 00:05:56,800 --> 00:06:00,599 Speaker 3: quickly can a FED government bee be fired at will? 132 00:06:01,520 --> 00:06:04,080 Speaker 3: But also at some point in time the numbers game 133 00:06:04,120 --> 00:06:06,039 Speaker 3: starts to really play through, and I think that for 134 00:06:06,120 --> 00:06:08,240 Speaker 3: twenty twenty five, I think the forecast is fairy clears, 135 00:06:08,240 --> 00:06:10,280 Speaker 3: you know, two or three cuts. It's when you get 136 00:06:10,320 --> 00:06:13,720 Speaker 3: into twenty twenty six and you can't forget about the politics. 137 00:06:13,920 --> 00:06:15,800 Speaker 3: And I think that's where the muddiness of the forecasts 138 00:06:15,800 --> 00:06:17,400 Speaker 3: are really sitting Semashaw with. 139 00:06:17,480 --> 00:06:20,120 Speaker 2: Us to get a started today. A good conversation here 140 00:06:20,160 --> 00:06:23,880 Speaker 2: with the Principal group. Futures up thirteen, Death Features up 141 00:06:23,920 --> 00:06:27,880 Speaker 2: seventy five. Good morning across awaking America. Good morning to 142 00:06:27,960 --> 00:06:30,200 Speaker 2: the nation. Henrietta Treys will be with us here in 143 00:06:30,240 --> 00:06:34,040 Speaker 2: a bit on Washington on YouTube. Subscribe to Bloomberg Podcasts 144 00:06:34,480 --> 00:06:37,279 Speaker 2: out on YouTube. But it has been an extraordinary three 145 00:06:37,360 --> 00:06:41,000 Speaker 2: or four days here. Thank you for your support, David. 146 00:06:41,000 --> 00:06:45,960 Speaker 2: How about this, Seema Shaw, June of gloom June of 147 00:06:46,000 --> 00:06:49,719 Speaker 2: twenty twenty in the FT. I got to read it 148 00:06:49,760 --> 00:06:54,080 Speaker 2: in entirety, folks, because it's shocking when apparently positive signals 149 00:06:54,080 --> 00:06:58,600 Speaker 2: can turn negative June of twenty twenty, big negative and 150 00:06:58,720 --> 00:07:01,320 Speaker 2: back again in a short time frame. It makes sense 151 00:07:01,360 --> 00:07:06,120 Speaker 2: to wait portfolios with a high quality defensive assets such 152 00:07:06,160 --> 00:07:10,680 Speaker 2: as megacap, tex, tax and investment grade credit with a 153 00:07:10,720 --> 00:07:15,040 Speaker 2: bias towards the United States. Anything much riskier than that 154 00:07:15,120 --> 00:07:19,160 Speaker 2: looks set for a white knuckle ride. You crushingly nailed 155 00:07:19,200 --> 00:07:22,520 Speaker 2: it there. I mean, just do you just reprint that 156 00:07:22,600 --> 00:07:23,720 Speaker 2: paragraph again here? 157 00:07:24,000 --> 00:07:26,400 Speaker 3: I should, I should have it plastered on my forehead, 158 00:07:26,400 --> 00:07:28,640 Speaker 3: not though, do mean? Well, but I think you know 159 00:07:28,800 --> 00:07:31,920 Speaker 3: that in twenty twenty not many people got it wrong, 160 00:07:32,120 --> 00:07:37,600 Speaker 3: right either you if you got on the market about 161 00:07:37,600 --> 00:07:40,400 Speaker 3: the book, you know, I think there's a really big 162 00:07:40,480 --> 00:07:42,560 Speaker 3: learning there from twenty twenty, which is that, look, we 163 00:07:43,520 --> 00:07:47,080 Speaker 3: it looked horrific the global economy went through so much, 164 00:07:47,520 --> 00:07:50,360 Speaker 3: and yet in terms of the US dynamics, US market, 165 00:07:50,640 --> 00:07:53,800 Speaker 3: it recovered really really quickly. And to me, that's one 166 00:07:53,800 --> 00:07:55,640 Speaker 3: of the key things there is it it's very difficult 167 00:07:55,640 --> 00:07:58,640 Speaker 3: for the US to have a prolonged recession. It's very 168 00:07:58,680 --> 00:08:01,680 Speaker 3: difficult unless you know, have major colleges because of the chase. 169 00:08:01,800 --> 00:08:05,040 Speaker 2: In June of twenty twenty, you said free casual is 170 00:08:05,080 --> 00:08:08,240 Speaker 2: going to sustain in the United States of America, including 171 00:08:08,320 --> 00:08:10,880 Speaker 2: mega cap. Can you say the same thing today? 172 00:08:11,640 --> 00:08:15,160 Speaker 3: Yeah, I think with slightly less enthusiasm per Suddenly we 173 00:08:15,240 --> 00:08:17,760 Speaker 3: are long term holders of that megacap tech trade. 174 00:08:17,760 --> 00:08:21,239 Speaker 4: We believe that you know, there will be volatility. 175 00:08:20,800 --> 00:08:23,560 Speaker 3: That'll be question marks about her earnings, there'll be moments 176 00:08:23,600 --> 00:08:26,720 Speaker 3: where the market will be rattled, but we do generally 177 00:08:26,760 --> 00:08:29,920 Speaker 3: believe that that is the frontier of productivity for the world, 178 00:08:30,240 --> 00:08:32,160 Speaker 3: and so you want to keep having exposure. I think 179 00:08:32,160 --> 00:08:34,160 Speaker 3: maybe the thing that investors really need to not thinking 180 00:08:34,200 --> 00:08:37,320 Speaker 3: about is where next, Where beyond the megacap tech trade 181 00:08:37,360 --> 00:08:39,200 Speaker 3: do you want to be looking? And then I think 182 00:08:39,240 --> 00:08:41,720 Speaker 3: there are lots of opportunities to cross all sectors, and 183 00:08:41,760 --> 00:08:43,559 Speaker 3: that's what's going to really set apart the winners from 184 00:08:43,559 --> 00:08:44,080 Speaker 3: the losers. 185 00:08:44,280 --> 00:08:46,920 Speaker 5: I've seen a string of these stories casting doubt on 186 00:08:47,679 --> 00:08:50,520 Speaker 5: the viability of the AI narrative. There was the study 187 00:08:50,520 --> 00:08:53,440 Speaker 5: out of MIT ninety five percent of whatever isn't working 188 00:08:53,480 --> 00:08:54,960 Speaker 5: out in the way that people thought it would. I 189 00:08:54,960 --> 00:08:57,000 Speaker 5: saw this latest thing from Anthropic that we're not using 190 00:08:57,040 --> 00:08:58,280 Speaker 5: it to sort of do anything more than boost or 191 00:08:58,320 --> 00:09:01,760 Speaker 5: individual productivity. It's maybe a dumb question, but do you 192 00:09:01,760 --> 00:09:04,880 Speaker 5: as an investor have to buy into that narrative fully 193 00:09:05,679 --> 00:09:08,320 Speaker 5: or you just look at the way that these megacaps 194 00:09:08,320 --> 00:09:10,480 Speaker 5: are performing and take the right In other words, how 195 00:09:10,679 --> 00:09:12,760 Speaker 5: much conviction do you have to have in the story itself? 196 00:09:14,000 --> 00:09:16,040 Speaker 3: I think you need to have some kind of conviction 197 00:09:16,320 --> 00:09:19,800 Speaker 3: in what the future of the world is. But I 198 00:09:19,800 --> 00:09:21,880 Speaker 3: think it's fair to have your moments where you become 199 00:09:21,920 --> 00:09:22,760 Speaker 3: a little bit cynical. 200 00:09:23,040 --> 00:09:24,800 Speaker 4: Do you look at evaluation, Yes, exactly. 201 00:09:24,920 --> 00:09:27,640 Speaker 3: You look at those valuations, you say, how much longer 202 00:09:27,679 --> 00:09:30,240 Speaker 3: can they can really continue to deliver these kind of 203 00:09:30,240 --> 00:09:30,959 Speaker 3: revenue growth. 204 00:09:30,800 --> 00:09:32,720 Speaker 4: And these growth So I think that's fair. 205 00:09:33,280 --> 00:09:37,479 Speaker 3: But I do think that for some companies, for some strategies, 206 00:09:37,760 --> 00:09:39,720 Speaker 3: that is very much a long term theme. You know, 207 00:09:39,720 --> 00:09:41,400 Speaker 3: we're not talking about one or two years. We're looking 208 00:09:41,400 --> 00:09:43,360 Speaker 3: at from a five to ten year perspective. So you 209 00:09:43,400 --> 00:09:45,400 Speaker 3: have to be able to be willing to live through 210 00:09:45,440 --> 00:09:46,400 Speaker 3: some of those dips. 211 00:09:46,080 --> 00:09:48,000 Speaker 2: On a Monday, Can we do an audible Sure? You 212 00:09:48,000 --> 00:09:50,679 Speaker 2: know it's still you know, we're not deep into Tuesday 213 00:09:50,760 --> 00:09:53,160 Speaker 2: yet I won't be here. I see it like the 214 00:09:53,280 --> 00:09:57,160 Speaker 2: chart this weeknd that France has a worse fixed in 215 00:09:57,200 --> 00:10:02,400 Speaker 2: compositions in Spain just exam from the city in London. 216 00:10:02,640 --> 00:10:07,440 Speaker 2: Are you are you watching the tumult of Europe and 217 00:10:07,559 --> 00:10:10,480 Speaker 2: saying it's over there, it's distant, it's not going to 218 00:10:10,559 --> 00:10:14,000 Speaker 2: upset the apple cart or is it inextricaly part of 219 00:10:14,040 --> 00:10:14,760 Speaker 2: what's going on? 220 00:10:16,440 --> 00:10:18,880 Speaker 4: I think that they are two separate situations. 221 00:10:19,559 --> 00:10:23,240 Speaker 3: But the UK has its own very meaningful fiscal situation 222 00:10:23,280 --> 00:10:25,560 Speaker 3: which has nothing to do with France, cannot be rectified 223 00:10:25,960 --> 00:10:29,480 Speaker 3: by maybe France resolving its own situation. I think this 224 00:10:29,520 --> 00:10:32,360 Speaker 3: is a global theme, but they're all very kind of 225 00:10:32,400 --> 00:10:35,320 Speaker 3: individual stories which are going on around the world. For 226 00:10:35,400 --> 00:10:37,880 Speaker 3: the UK, I you know, obviously for France and the UK, 227 00:10:38,000 --> 00:10:39,719 Speaker 3: these are quite urgent situations. 228 00:10:40,880 --> 00:10:41,920 Speaker 4: I struggle to see. 229 00:10:41,760 --> 00:10:44,920 Speaker 3: How, for example, the UK can emerge from this completely unscathed. 230 00:10:45,920 --> 00:10:47,920 Speaker 3: The budget is going to be a very very difficult 231 00:10:47,960 --> 00:10:51,120 Speaker 3: moment for Rachel Ruves and for me for when I 232 00:10:51,120 --> 00:10:53,160 Speaker 3: look across the UK to the guilt market, I do 233 00:10:53,200 --> 00:10:55,800 Speaker 3: have genuine concerns about where we go from here. 234 00:10:55,720 --> 00:10:56,080 Speaker 4: For the UK. 235 00:10:56,280 --> 00:10:58,920 Speaker 2: Is that a traditional concern or it's just out longer 236 00:10:59,000 --> 00:11:02,120 Speaker 2: duration or can it really upset the entire curve? 237 00:11:03,000 --> 00:11:04,880 Speaker 3: I think it could upset the entire curve. I think 238 00:11:04,880 --> 00:11:10,200 Speaker 3: there's enough concerns about the credibility of the government. Essentially, 239 00:11:10,240 --> 00:11:12,680 Speaker 3: what is the escape route for the UK? And I 240 00:11:12,679 --> 00:11:15,120 Speaker 3: think it's very difficult to know what that is because 241 00:11:15,160 --> 00:11:19,880 Speaker 3: the typical drivers of that would be productivity, growth, immigration. 242 00:11:19,960 --> 00:11:21,640 Speaker 4: Those are two things that we seem to close the 243 00:11:21,640 --> 00:11:21,920 Speaker 4: door on. 244 00:11:21,960 --> 00:11:24,920 Speaker 2: But am I correct to those of us distracted by 245 00:11:24,960 --> 00:11:28,880 Speaker 2: the Detroit Lions scoring fifty two points this weekend. One 246 00:11:28,960 --> 00:11:32,920 Speaker 2: hundred thousand plus people protested in London this weekend. That 247 00:11:33,040 --> 00:11:36,800 Speaker 2: is correct if we have a Trump I'm being very simplistic, Seema. 248 00:11:36,920 --> 00:11:41,400 Speaker 2: If we had a Trump moment in reform one, how 249 00:11:41,400 --> 00:11:47,320 Speaker 2: would that change finance and fixed income in the United Kingdom. 250 00:11:48,040 --> 00:11:51,360 Speaker 3: I think what we could see is again you have 251 00:11:51,400 --> 00:11:54,040 Speaker 3: to take a long term perspective from a political perspective 252 00:11:54,080 --> 00:11:56,240 Speaker 3: for the UK, and you do get to a point 253 00:11:56,240 --> 00:11:59,760 Speaker 3: where the productivity concerns really do start to explode. Once 254 00:11:59,800 --> 00:12:02,719 Speaker 3: you have these kind of movements, there's a very potential 255 00:12:02,880 --> 00:12:05,199 Speaker 3: change for the government. Change of government at the next 256 00:12:05,240 --> 00:12:09,600 Speaker 3: election to that far right movement, a ton of implications 257 00:12:09,720 --> 00:12:11,440 Speaker 3: for the long term growth of the UK. 258 00:12:11,760 --> 00:12:15,800 Speaker 2: I spent on please I wanted tone about tott Nanda 259 00:12:16,000 --> 00:12:16,760 Speaker 2: before we get there. 260 00:12:17,760 --> 00:12:20,080 Speaker 5: Many of us here became familiar with Minutia Fique when 261 00:12:20,160 --> 00:12:22,800 Speaker 5: she was at Columbia University. Some of us know of 262 00:12:22,840 --> 00:12:25,040 Speaker 5: her from her tenure at LC before that. She's now 263 00:12:25,080 --> 00:12:27,839 Speaker 5: back in government, has this role as economic advisor to 264 00:12:27,679 --> 00:12:30,640 Speaker 5: the to the Prime Minister. What does that dynamic look 265 00:12:30,679 --> 00:12:33,199 Speaker 5: like between her and Rachel reaps going forward here? How 266 00:12:33,280 --> 00:12:35,960 Speaker 5: is she how is her expertise going to be used? 267 00:12:36,679 --> 00:12:38,800 Speaker 5: Are we just setting the stage here for a conflict 268 00:12:38,840 --> 00:12:42,000 Speaker 5: or she stands some key role here in trying to 269 00:12:42,000 --> 00:12:43,559 Speaker 5: write the ship that you're describing. 270 00:12:43,880 --> 00:12:45,600 Speaker 4: I think she does have a key role here. 271 00:12:47,120 --> 00:12:49,679 Speaker 3: But I think that the UK it goes beyond just 272 00:12:49,720 --> 00:12:53,520 Speaker 3: the kind of the simple economics for the and I 273 00:12:53,559 --> 00:12:57,480 Speaker 3: don't know if she can genuinely push this narrative of 274 00:12:57,640 --> 00:12:59,840 Speaker 3: changing the entire makeup of the UK. 275 00:13:00,240 --> 00:13:01,040 Speaker 4: Where is it heading? 276 00:13:01,320 --> 00:13:05,680 Speaker 3: So I think they're really deeper almost you know, introspective 277 00:13:05,760 --> 00:13:07,640 Speaker 3: questions that the UK needs to be asking that goes 278 00:13:07,640 --> 00:13:09,960 Speaker 3: beyond economics. So I think it's great and it's great 279 00:13:09,960 --> 00:13:13,040 Speaker 3: to have a credible, absolutely have incredible policy makers like 280 00:13:13,080 --> 00:13:15,480 Speaker 3: that really does help the UK at a time when 281 00:13:15,480 --> 00:13:18,320 Speaker 3: there's so many question marks about who is in government 282 00:13:18,360 --> 00:13:21,200 Speaker 3: and who is you know, who's essentially ruling. 283 00:13:21,679 --> 00:13:23,840 Speaker 4: But I think they have the challenges ready cut up, 284 00:13:23,880 --> 00:13:24,800 Speaker 4: it's your questions. 285 00:13:25,200 --> 00:13:27,319 Speaker 2: I guess two lates, we'll do it next time. We'll 286 00:13:27,360 --> 00:13:29,240 Speaker 2: do it next time. After they lost four. 287 00:13:29,200 --> 00:13:31,959 Speaker 4: In a row, I'm happy about that. 288 00:13:32,120 --> 00:13:36,880 Speaker 2: Yeah, I know, you know, you know all the fine 289 00:13:37,280 --> 00:13:38,079 Speaker 2: you know, it's like. 290 00:13:38,320 --> 00:13:40,480 Speaker 5: You're you're all alone in your a Tottenham fandom. 291 00:13:41,040 --> 00:13:44,080 Speaker 2: Wait a lawyer. Well, I had no idea how Lona was. 292 00:13:44,200 --> 00:13:47,120 Speaker 2: I was having a cigar at some fancy London hotel. 293 00:13:47,559 --> 00:13:50,120 Speaker 2: Everyone in a room was an Arsenal fan. Yeah, like 294 00:13:50,160 --> 00:13:54,360 Speaker 2: one hundred and ten percent. It's ridiculous. Missus Keene had 295 00:13:54,400 --> 00:13:57,800 Speaker 2: the tot name had. So we got the bad service, 296 00:13:58,000 --> 00:14:00,440 Speaker 2: we got semen show. Thank you stay one of us. 297 00:14:00,640 --> 00:14:03,880 Speaker 2: More from Bloomberg Surveillance coming up after this. 298 00:14:11,120 --> 00:14:14,720 Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live 299 00:14:14,760 --> 00:14:17,920 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 300 00:14:18,000 --> 00:14:21,680 Speaker 1: Applecarplay and Android Otto with the Bloomberg Business app, or 301 00:14:21,840 --> 00:14:23,240 Speaker 1: watch us live on YouTube. 302 00:14:23,240 --> 00:14:28,360 Speaker 2: Showings on Henrietta Trey's Veda Partners on Your Washington, Henriette, 303 00:14:28,360 --> 00:14:29,920 Speaker 2: I want to do an audible here. David's got a 304 00:14:29,960 --> 00:14:33,240 Speaker 2: lot of smart things to talk about. But I noticed 305 00:14:33,240 --> 00:14:37,280 Speaker 2: ten US senators twenty seven House members already have announced 306 00:14:37,320 --> 00:14:41,440 Speaker 2: their retirements into next year's election. Why are we seeing 307 00:14:41,480 --> 00:14:43,840 Speaker 2: so many retire as the two this weekend. 308 00:14:44,920 --> 00:14:48,440 Speaker 6: Yeah, they're dropping like flies. I have the benefit of 309 00:14:48,440 --> 00:14:51,080 Speaker 6: having this incredible mentor. A woman named Ashley Miller back 310 00:14:51,080 --> 00:14:53,120 Speaker 6: at the US Chamber of Commerce and she told me 311 00:14:53,160 --> 00:14:56,280 Speaker 6: several years ago that Senators and congressmen are. 312 00:14:56,120 --> 00:14:57,160 Speaker 7: Heading for the exits. 313 00:14:57,440 --> 00:15:01,120 Speaker 6: DC is incredibly unpleasant to be and we are knocking 314 00:15:01,160 --> 00:15:03,760 Speaker 6: at the door of eliminating the filibuster, which any Senate 315 00:15:03,760 --> 00:15:05,720 Speaker 6: staff or will tell you is what keeps the Senate 316 00:15:05,720 --> 00:15:08,240 Speaker 6: from being the House, and they mean that as an insult. 317 00:15:08,760 --> 00:15:10,960 Speaker 6: So it's definitely not a good time to be down 318 00:15:11,000 --> 00:15:14,720 Speaker 6: there right now. I think the assassination of Charlie Kirk 319 00:15:14,920 --> 00:15:19,800 Speaker 6: is certainly in forefront of people's minds. The physical violence 320 00:15:19,880 --> 00:15:22,760 Speaker 6: component of it really can't be under stressed. 321 00:15:23,560 --> 00:15:26,680 Speaker 5: I saw Michael McCall also announcing his resignation or not resignation, 322 00:15:26,720 --> 00:15:28,840 Speaker 5: but not seeking reelection once again. So this is happening 323 00:15:28,840 --> 00:15:29,880 Speaker 5: in the House as well, isn't it. 324 00:15:30,920 --> 00:15:33,640 Speaker 6: Yeah, it absolutely is happening in the House. We're up 325 00:15:33,640 --> 00:15:36,720 Speaker 6: to two House Republicans from Texas if I'm not mistaken. 326 00:15:37,120 --> 00:15:37,720 Speaker 7: The one that was. 327 00:15:37,680 --> 00:15:40,080 Speaker 6: Really surprising to me is some of the farms take 328 00:15:40,760 --> 00:15:45,160 Speaker 6: members I'm thinking of like Joni Ernst for example. Those 329 00:15:45,240 --> 00:15:48,160 Speaker 6: members should be in really safe re elections, but you 330 00:15:48,200 --> 00:15:51,360 Speaker 6: know the potential for having to vote on tariffs the 331 00:15:51,520 --> 00:15:56,000 Speaker 6: trade wars, the discontent with farmers are all issues that 332 00:15:56,040 --> 00:15:58,400 Speaker 6: are plaguing them, aside from just the general lack of 333 00:15:58,440 --> 00:15:59,240 Speaker 6: comedy in DC. 334 00:15:59,400 --> 00:16:03,120 Speaker 2: Range are grizzled pros of this. I'm the heck David, 335 00:16:03,400 --> 00:16:07,239 Speaker 2: they're just retiring because they're getting out front of Democrats 336 00:16:07,280 --> 00:16:10,000 Speaker 2: winning the House? Am I too simplistic? 337 00:16:10,120 --> 00:16:12,240 Speaker 5: That might be a little too simplistic, I think, But Henrietta, 338 00:16:12,280 --> 00:16:15,600 Speaker 5: you bring up the kind of difficulty in farm country especially, 339 00:16:15,680 --> 00:16:18,000 Speaker 5: and I think there's been a theme to the newspapers 340 00:16:18,000 --> 00:16:19,480 Speaker 5: and news sites I've looked at over the course of 341 00:16:19,520 --> 00:16:23,120 Speaker 5: the last week, and that is this level of dissatisfaction 342 00:16:23,240 --> 00:16:27,200 Speaker 5: and worry amongst soybean farmers in particular about their prospects 343 00:16:27,200 --> 00:16:29,400 Speaker 5: in light of these trade policies, not having a buyer 344 00:16:29,480 --> 00:16:32,280 Speaker 5: in China. How does all of this sort itself out? 345 00:16:33,680 --> 00:16:36,360 Speaker 6: This needs to be sorted out at the top levels, 346 00:16:36,520 --> 00:16:39,360 Speaker 6: like this needs to be a prominent topic of conversation 347 00:16:39,480 --> 00:16:43,600 Speaker 6: between Bessett and jameson Greer in Spain today with their 348 00:16:43,680 --> 00:16:47,080 Speaker 6: Chinese counterparts. We need to be talking about sey purchases. Unfortunately, 349 00:16:47,760 --> 00:16:50,840 Speaker 6: when we start inserting Nvidia and tiktoking and the conversation 350 00:16:51,480 --> 00:16:54,160 Speaker 6: I don't think there's a place for any kind of 351 00:16:54,200 --> 00:16:57,320 Speaker 6: give on soy purchases, and we're seeing in the farmer's 352 00:16:57,440 --> 00:17:00,520 Speaker 6: main concern is that they are permanently losing market share 353 00:17:00,600 --> 00:17:03,600 Speaker 6: to Brazil and Argentina from the world's largest purchaser of. 354 00:17:03,520 --> 00:17:05,000 Speaker 7: Soybeans and sixty one percent. 355 00:17:05,320 --> 00:17:08,159 Speaker 6: So the farming community is doing something that really you 356 00:17:08,200 --> 00:17:10,800 Speaker 6: don't see from a lot of other businesses. I would 357 00:17:10,840 --> 00:17:13,480 Speaker 6: talk about, you know, car dealerships, for example. They're a 358 00:17:13,560 --> 00:17:17,120 Speaker 6: huge political donor base, and they're being really quiet about 359 00:17:17,119 --> 00:17:21,199 Speaker 6: the tariffs. They're only hiking new car prices by one percent, 360 00:17:21,280 --> 00:17:23,680 Speaker 6: but used car prices, which is the bulk of their sales, 361 00:17:23,680 --> 00:17:25,840 Speaker 6: are up six percent as they try to stay on 362 00:17:25,880 --> 00:17:28,760 Speaker 6: Trump's good side. The farmers, though, are putting out public 363 00:17:28,840 --> 00:17:31,080 Speaker 6: letters and they have been for several weeks now and 364 00:17:31,160 --> 00:17:35,400 Speaker 6: giving a lot of news interviews on the record saying 365 00:17:35,440 --> 00:17:38,800 Speaker 6: how problematic the president's trade war is for them. They 366 00:17:38,880 --> 00:17:41,399 Speaker 6: do not have any sales to China going forward, and 367 00:17:41,440 --> 00:17:43,160 Speaker 6: that's that's a death now for them. 368 00:17:44,440 --> 00:17:48,280 Speaker 5: I look at this and wonder is a bailout inevitable? 369 00:17:48,359 --> 00:17:52,280 Speaker 5: So I gather that Trump one isn't prologue for all 370 00:17:52,280 --> 00:17:56,160 Speaker 5: the farm made, farm made yelling also good play as 371 00:17:56,160 --> 00:17:59,440 Speaker 5: he is. I think, I think tonight. But you know, Henry, 372 00:17:59,480 --> 00:18:01,440 Speaker 5: I'm curious, is that where all of this is headed? 373 00:18:01,440 --> 00:18:03,040 Speaker 5: Are we going to see a twenty thirty billion dollars 374 00:18:03,040 --> 00:18:04,440 Speaker 5: bail out the likes of which we saw the last 375 00:18:04,440 --> 00:18:04,959 Speaker 5: time around? 376 00:18:05,640 --> 00:18:07,639 Speaker 6: Yeah, we got three of them last time around. I 377 00:18:07,680 --> 00:18:10,199 Speaker 6: suspect we'll get another one this time around. There's already 378 00:18:10,359 --> 00:18:13,359 Speaker 6: rumblings from members, specifically on the House side and the 379 00:18:13,400 --> 00:18:16,480 Speaker 6: agriculture committees, calling for the insertion of a farm aid 380 00:18:16,880 --> 00:18:20,840 Speaker 6: package in the upcoming cr that will have a government shutdown, 381 00:18:21,200 --> 00:18:22,840 Speaker 6: so it's definitely already part of it. 382 00:18:22,880 --> 00:18:24,840 Speaker 7: There was some of that in the One Big Beautiful Bill. 383 00:18:24,920 --> 00:18:28,000 Speaker 6: There was some rejiggering of some of the methodologies and 384 00:18:28,040 --> 00:18:30,879 Speaker 6: accounting for how farmers get subsidized, and that's going to 385 00:18:30,880 --> 00:18:32,720 Speaker 6: be branded on in the next package. 386 00:18:32,720 --> 00:18:36,400 Speaker 2: I again, another dumb question. Only handring out of trades 387 00:18:36,440 --> 00:18:40,280 Speaker 2: would know this. When there's a farm bailout, who gets 388 00:18:40,280 --> 00:18:43,000 Speaker 2: a check? A mom and pop farmer with two hundred 389 00:18:43,000 --> 00:18:45,639 Speaker 2: pigs on a ranch and you know, I don't know 390 00:18:45,760 --> 00:18:49,560 Speaker 2: Kansas or or is it like corporate America gets the check? 391 00:18:50,480 --> 00:18:54,080 Speaker 6: It's both and it's usually run through the Department of Agriculture, 392 00:18:54,160 --> 00:18:57,840 Speaker 6: through a really small entity there that was heavily accessed 393 00:18:57,880 --> 00:19:00,480 Speaker 6: during the president's first term. Is the US trying to 394 00:19:00,520 --> 00:19:04,359 Speaker 6: trade war kicked off, they replenish this fund that goes 395 00:19:04,400 --> 00:19:08,199 Speaker 6: specifically to commodity purchases, and that's how the money gets bundled. 396 00:19:08,240 --> 00:19:09,920 Speaker 7: And I suspect that's what they'll do again. 397 00:19:10,080 --> 00:19:13,879 Speaker 6: That's they're having like pretty advanced talks about it now, 398 00:19:13,920 --> 00:19:15,919 Speaker 6: but still relatively rudimentary. 399 00:19:15,960 --> 00:19:18,719 Speaker 7: There's no text, but I would imagine that's what they do. 400 00:19:18,960 --> 00:19:22,720 Speaker 2: If we're growing tomatoes on the deck, do I get 401 00:19:23,840 --> 00:19:26,800 Speaker 2: a farmer tom sacks on the deck? 402 00:19:26,960 --> 00:19:31,680 Speaker 5: Yeah, Henrietta, we have this irregular series with you where 403 00:19:31,680 --> 00:19:33,359 Speaker 5: we ask you what a recess is going to be 404 00:19:33,440 --> 00:19:35,200 Speaker 5: like for lawmakers when they go home to their district. 405 00:19:35,240 --> 00:19:37,080 Speaker 5: So let's let's pick that up again. Let's do another 406 00:19:37,200 --> 00:19:39,479 Speaker 5: edition of it as we face a ten day recess 407 00:19:39,480 --> 00:19:41,560 Speaker 5: here starting at the end of the week. In the past, 408 00:19:41,800 --> 00:19:43,320 Speaker 5: there have been these town hall meetings where there's been 409 00:19:43,359 --> 00:19:46,200 Speaker 5: a lot of commotion and outrage as we look toward 410 00:19:46,240 --> 00:19:48,520 Speaker 5: this one and on the heels of that two legislative 411 00:19:48,600 --> 00:19:50,320 Speaker 5: days to hammer out some sort of deal here on 412 00:19:50,560 --> 00:19:53,080 Speaker 5: whether or not to averted government shutdown. What does that 413 00:19:53,160 --> 00:19:55,400 Speaker 5: recess look like for members of the House in the Senate. 414 00:19:56,359 --> 00:19:57,080 Speaker 7: It looks bad. 415 00:19:57,320 --> 00:20:01,360 Speaker 6: I mean, they are getting increased funding for military productive 416 00:20:01,400 --> 00:20:02,119 Speaker 6: police protection. 417 00:20:02,200 --> 00:20:03,159 Speaker 7: They're going to need all of that. 418 00:20:03,240 --> 00:20:05,800 Speaker 6: I suspect most of the events would be inside, if 419 00:20:05,840 --> 00:20:07,800 Speaker 6: they're held at all. I imagine we hear a lot 420 00:20:07,840 --> 00:20:10,640 Speaker 6: more about like virtual town halls. We had already seen 421 00:20:10,800 --> 00:20:16,800 Speaker 6: so much democratic outcry, sorry from democratic constituents at Republican 422 00:20:16,880 --> 00:20:19,760 Speaker 6: town halls across the country that a lot of members 423 00:20:19,760 --> 00:20:22,679 Speaker 6: had been putting up placards about the rules of civility 424 00:20:22,800 --> 00:20:25,400 Speaker 6: and canceling events outright. I think you've seen a lot 425 00:20:25,400 --> 00:20:29,840 Speaker 6: of cancelations and a lot of concern about political violence, 426 00:20:29,880 --> 00:20:34,719 Speaker 6: and there's an undercurrent feeling that this is going to 427 00:20:34,960 --> 00:20:38,600 Speaker 6: lead somewhere else there will be another Political Violence Act. 428 00:20:38,680 --> 00:20:40,159 Speaker 7: So I know that's top of mind for a lot 429 00:20:40,160 --> 00:20:40,600 Speaker 7: of members. 430 00:20:40,840 --> 00:20:43,400 Speaker 5: Henriya, last question. In your most recent note, you put 431 00:20:43,400 --> 00:20:46,560 Speaker 5: twenty five percent odds on a shutdown here. What gives 432 00:20:46,560 --> 00:20:48,760 Speaker 5: you the confidence here to keep it? What is relatively low? 433 00:20:48,760 --> 00:20:50,960 Speaker 5: I think by a lot of standards, there been there 434 00:20:51,000 --> 00:20:52,760 Speaker 5: have been many people who think that Democrats are going 435 00:20:52,840 --> 00:20:55,000 Speaker 5: to allow them to happen this time? Why do you 436 00:20:55,000 --> 00:20:55,960 Speaker 5: feel like it's unlikely? 437 00:20:56,960 --> 00:20:57,280 Speaker 7: Sure? 438 00:20:57,359 --> 00:21:00,200 Speaker 6: And I'm usually on the low end, and I don't 439 00:21:00,240 --> 00:21:01,720 Speaker 6: put a lot of stock in the narrative that there's 440 00:21:01,760 --> 00:21:03,800 Speaker 6: going to be a shutdown, especially when we're fifteen days 441 00:21:03,800 --> 00:21:04,520 Speaker 6: out from the thirtieth. 442 00:21:04,560 --> 00:21:07,480 Speaker 7: It's like a lifetime in DC language. 443 00:21:07,800 --> 00:21:10,679 Speaker 6: I get my information from staff, which I think differentiates 444 00:21:10,720 --> 00:21:12,399 Speaker 6: me from some other folks. I don't really talk to 445 00:21:12,480 --> 00:21:14,679 Speaker 6: members all that often. I really very much care what 446 00:21:14,720 --> 00:21:16,840 Speaker 6: staff has to say because they're the ones with the 447 00:21:16,960 --> 00:21:19,560 Speaker 6: finger on the pulse. And the read that I get 448 00:21:19,640 --> 00:21:23,040 Speaker 6: is that House members are much more inclined to encourage 449 00:21:23,040 --> 00:21:26,480 Speaker 6: your shut down. The Senators just aren't there. And until 450 00:21:26,520 --> 00:21:28,240 Speaker 6: that changes, I'm going to keep my low odds of 451 00:21:28,320 --> 00:21:30,520 Speaker 6: twenty five percent. We're probably going to take this into 452 00:21:30,520 --> 00:21:31,960 Speaker 6: September twenty ninth and thirtieth. 453 00:21:32,160 --> 00:21:33,840 Speaker 7: Things will look funky this week. 454 00:21:33,920 --> 00:21:36,399 Speaker 6: It'll be a lot of drama, but with a ten 455 00:21:36,480 --> 00:21:37,720 Speaker 6: day race, that's a lot can change. 456 00:21:37,800 --> 00:21:40,000 Speaker 2: Henrietta, thank you so much. Look forward to speaking to 457 00:21:40,040 --> 00:21:44,200 Speaker 2: you again soon, soon soon. Henrietta Treys with Beta Partners, 458 00:21:44,240 --> 00:21:49,440 Speaker 2: just terrific perspective on Washington stay with us. More from 459 00:21:49,440 --> 00:21:59,200 Speaker 2: Bloomberg's Surveillance coming up after this. 460 00:21:59,200 --> 00:22:03,080 Speaker 1: This is the Blueomberg Surveillance Podcast. Listen live each weekday 461 00:22:03,119 --> 00:22:06,440 Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto 462 00:22:06,560 --> 00:22:09,520 Speaker 1: with the Bloomberg Business app. You can also listen live 463 00:22:09,600 --> 00:22:13,159 Speaker 1: on Amazon Alexa from our flagship New York station, Just 464 00:22:13,240 --> 00:22:16,080 Speaker 1: say Alexa play Bloomberg eleven thirty. 465 00:22:15,880 --> 00:22:19,840 Speaker 2: Good lucky with the timing. Annas Jamroso with us this morning, 466 00:22:20,080 --> 00:22:23,679 Speaker 2: and that is a wonderful thing. She is at partners 467 00:22:23,760 --> 00:22:27,080 Speaker 2: and of course has been just incredibly pression about the 468 00:22:27,160 --> 00:22:29,120 Speaker 2: need to be in the market. I have to read 469 00:22:29,119 --> 00:22:33,320 Speaker 2: this tweet in full from the President of the United States, Anastasia. 470 00:22:33,359 --> 00:22:37,680 Speaker 2: Listen carefully. It's detailed. Subject to SEC approval. Companies and 471 00:22:37,720 --> 00:22:41,960 Speaker 2: corporations should no longer be forced to quote report unquote 472 00:22:42,160 --> 00:22:45,800 Speaker 2: on a quarterly basis, but rather to report a six 473 00:22:45,880 --> 00:22:49,960 Speaker 2: month basis. I would note, folks, very much like most 474 00:22:50,000 --> 00:22:53,879 Speaker 2: European companies, this will save money and allow managers to 475 00:22:53,920 --> 00:22:57,280 Speaker 2: focus on properly running their companies. Did you ever hear 476 00:22:57,320 --> 00:23:00,440 Speaker 2: the statement that quote China has a fifty one hundred 477 00:23:00,520 --> 00:23:03,440 Speaker 2: year view on management of a company, whereas we run 478 00:23:03,480 --> 00:23:07,800 Speaker 2: our companies on a quarterly basis. Question marks not good 479 00:23:08,080 --> 00:23:11,480 Speaker 2: three exclamation points. You and I know this has been 480 00:23:11,520 --> 00:23:14,840 Speaker 2: a raging debate since you were an undergrad at in 481 00:23:14,880 --> 00:23:18,040 Speaker 2: New Mexico a million years ago. Should we go like 482 00:23:18,160 --> 00:23:20,320 Speaker 2: year up to twice a year reporting. 483 00:23:20,080 --> 00:23:21,159 Speaker 4: A million years Indeed? 484 00:23:21,600 --> 00:23:24,080 Speaker 8: Look, I think there are some sympathizers with that in 485 00:23:24,119 --> 00:23:27,240 Speaker 8: public markets that maybe quarterly reporting can be made more 486 00:23:27,240 --> 00:23:29,640 Speaker 8: efficient by stretching that out. And I sort of think 487 00:23:29,680 --> 00:23:32,919 Speaker 8: about JP Morgan and Jamie Dimond periodically talking about that 488 00:23:33,040 --> 00:23:36,760 Speaker 8: as well. So, look, I we now focus our time 489 00:23:36,800 --> 00:23:40,560 Speaker 8: on private markets, Tom, and we're certainly sympathetic to making 490 00:23:40,720 --> 00:23:43,800 Speaker 8: changes over the course of many, many years that I 491 00:23:43,800 --> 00:23:45,840 Speaker 8: think there are great benefits to that, for sure. 492 00:23:45,920 --> 00:23:48,200 Speaker 2: The history of this, folks, is in the old days, 493 00:23:48,240 --> 00:23:50,520 Speaker 2: you had a value line on your floor that was 494 00:23:50,560 --> 00:23:53,080 Speaker 2: eight inches thick, and you trip over it about once 495 00:23:53,119 --> 00:23:55,439 Speaker 2: every ten days, and you at the back of the 496 00:23:55,480 --> 00:23:59,040 Speaker 2: Wall Street Journal which showed revenues, net income and shares 497 00:23:59,600 --> 00:24:04,080 Speaker 2: that the earning season. Now anastasia, it's a parler game, 498 00:24:04,160 --> 00:24:07,720 Speaker 2: it's a frenzy. I'm as guilty of it as anybody else. 499 00:24:08,080 --> 00:24:09,920 Speaker 2: Should we get away from that frenzy? 500 00:24:10,880 --> 00:24:13,199 Speaker 8: Well, I don't think we should completely get away from that. 501 00:24:13,440 --> 00:24:16,119 Speaker 8: I do think it's important to keep investors abreast of 502 00:24:16,160 --> 00:24:19,320 Speaker 8: what's happening, and you know, it has become I guess, 503 00:24:19,320 --> 00:24:21,960 Speaker 8: a bit of a game though, because you set the expectations, 504 00:24:21,960 --> 00:24:25,240 Speaker 8: you reset them lower, you beat the lower bar. But 505 00:24:25,600 --> 00:24:27,760 Speaker 8: I do think we are part of the reason why 506 00:24:27,800 --> 00:24:30,720 Speaker 8: there's still the existence of public versus private markets is 507 00:24:31,040 --> 00:24:34,320 Speaker 8: some investors like that transparency, and I think the lines 508 00:24:34,320 --> 00:24:34,960 Speaker 8: would get. 509 00:24:35,320 --> 00:24:38,800 Speaker 4: Too blurred if we were to go to any less cadence. 510 00:24:39,040 --> 00:24:41,719 Speaker 8: Now, I will say in private markets, you know, if 511 00:24:41,760 --> 00:24:44,359 Speaker 8: we don't have the scrutiny of the quarterly reporting, there's 512 00:24:44,400 --> 00:24:46,560 Speaker 8: so much more that we can do in terms of 513 00:24:46,600 --> 00:24:50,600 Speaker 8: transforming supply chains, building out margins over a course of time. 514 00:24:50,640 --> 00:24:52,520 Speaker 4: So I think that's where that belongs. 515 00:24:52,720 --> 00:24:55,760 Speaker 2: David, the cutcher that drives people nuts as you're on 516 00:24:55,840 --> 00:24:59,000 Speaker 2: the conference call with eighty five analysts and they go 517 00:24:59,119 --> 00:25:01,960 Speaker 2: and now the guy from Dad, and you go, great 518 00:25:02,040 --> 00:25:06,679 Speaker 2: quarter drives me insane. We'll continue. Maybe we should talk 519 00:25:06,720 --> 00:25:08,640 Speaker 2: about the markets right now, mister Barra. 520 00:25:08,480 --> 00:25:10,399 Speaker 5: But let's detail your work in the private markets with 521 00:25:10,400 --> 00:25:12,960 Speaker 5: the public ones. And I'm curious of how you look 522 00:25:13,000 --> 00:25:15,680 Speaker 5: at the enthusiasm that we've noted over the last few 523 00:25:15,760 --> 00:25:20,280 Speaker 5: days initial public offerings, companies wanting to merge with one another. 524 00:25:20,280 --> 00:25:21,480 Speaker 5: I think there have been a number of days over 525 00:25:21,520 --> 00:25:23,960 Speaker 5: the last week or so when we've headlined AIG, a 526 00:25:23,960 --> 00:25:26,600 Speaker 5: big deal merger that's happened here. How do you see 527 00:25:26,640 --> 00:25:28,280 Speaker 5: that atmosphere of that environment right now? 528 00:25:28,440 --> 00:25:30,760 Speaker 8: Right Well, it is kind of a title change, to 529 00:25:30,800 --> 00:25:32,680 Speaker 8: be honest, in terms of the activity that we've seen 530 00:25:32,720 --> 00:25:35,200 Speaker 8: in M and A and IPO markets, and I'll focus 531 00:25:35,280 --> 00:25:37,840 Speaker 8: on IPOs in particular because that's where we've seen sort 532 00:25:37,840 --> 00:25:41,320 Speaker 8: of the most notable pickup. Global EPO volumes are up 533 00:25:41,359 --> 00:25:44,040 Speaker 8: about twenty five percent year over year, but we've had 534 00:25:44,119 --> 00:25:47,600 Speaker 8: in America especially, we've had an incredibly robust August and 535 00:25:47,680 --> 00:25:50,480 Speaker 8: incredibly robust September, and it's sort of been a long 536 00:25:50,520 --> 00:25:54,200 Speaker 8: time coming. Now I guess the question is does it continue? 537 00:25:54,560 --> 00:25:57,560 Speaker 8: And our answer is yes, and most likely does because 538 00:25:57,600 --> 00:26:01,200 Speaker 8: you've got a comeback of CEO confidence. You got now 539 00:26:01,280 --> 00:26:04,320 Speaker 8: the rate cut of course that we're anticipating, and a 540 00:26:04,440 --> 00:26:07,560 Speaker 8: few more this year which should support valuations, and that 541 00:26:07,680 --> 00:26:10,200 Speaker 8: if you look at the performance of the IPOs this year, 542 00:26:10,440 --> 00:26:13,280 Speaker 8: the SMP is up about eleven twelve percent depending on 543 00:26:13,320 --> 00:26:17,240 Speaker 8: the day. The average performance of an IPO stock today 544 00:26:17,640 --> 00:26:19,760 Speaker 8: this year, I should say it's about thirty eight percent. 545 00:26:19,800 --> 00:26:20,960 Speaker 4: So all of that. 546 00:26:20,840 --> 00:26:23,919 Speaker 8: Should continue to be the incentive, I will say, David, 547 00:26:23,960 --> 00:26:28,040 Speaker 8: this has obviously been supportive for the public markets, has 548 00:26:28,080 --> 00:26:31,280 Speaker 8: been supportive for private market managers. It's certainly been supportive 549 00:26:31,280 --> 00:26:33,879 Speaker 8: for our platform as well. And we're seeing of the 550 00:26:33,920 --> 00:26:37,200 Speaker 8: top twenty five IPOs, we've participated close to half of those, 551 00:26:37,480 --> 00:26:41,640 Speaker 8: so clearly as significant value on lock for the industry. 552 00:26:42,040 --> 00:26:46,119 Speaker 5: You mentioned that uncertainty abating. I wonder what is still 553 00:26:46,280 --> 00:26:48,280 Speaker 5: stuff that needs to be figured out, as you said, 554 00:26:48,280 --> 00:26:50,120 Speaker 5: So we've got the Treasury sectory in the US Trade 555 00:26:50,119 --> 00:26:52,920 Speaker 5: representative in Spain right now still haggling with China trying 556 00:26:52,920 --> 00:26:55,240 Speaker 5: to fund find some resolution to what seems like a 557 00:26:55,320 --> 00:26:58,840 Speaker 5: very difficult situation to Brook, where is the uncertainty? What 558 00:26:58,920 --> 00:27:00,560 Speaker 5: needs to be resolved for this to kind of come 559 00:27:00,600 --> 00:27:01,800 Speaker 5: into its own more more fully? 560 00:27:02,520 --> 00:27:02,720 Speaker 6: Right? 561 00:27:02,920 --> 00:27:04,800 Speaker 8: I think when you think about it tactically, some of 562 00:27:04,800 --> 00:27:07,720 Speaker 8: the trade negotiations, and also do we actually have the 563 00:27:07,800 --> 00:27:10,399 Speaker 8: legal authority to impost hariiffs in the fashion that there 564 00:27:10,440 --> 00:27:13,200 Speaker 8: were imposed? You know, obviously some court decisions are still 565 00:27:13,240 --> 00:27:15,760 Speaker 8: pending there. That's kind of the tactical side of it. 566 00:27:15,840 --> 00:27:19,200 Speaker 8: But I think, to me, the bigger uncertainty that needs 567 00:27:19,200 --> 00:27:21,480 Speaker 8: to be settled and resolved is look at the label market. 568 00:27:21,560 --> 00:27:23,959 Speaker 8: It is weakening and we see more and more signs 569 00:27:23,960 --> 00:27:27,240 Speaker 8: of that. So obviously the markets are exuberant about the 570 00:27:27,320 --> 00:27:30,359 Speaker 8: rate cuts and supporting the economy. But what if we 571 00:27:30,359 --> 00:27:33,359 Speaker 8: don't get enough FED action quickly enough. What if the 572 00:27:33,480 --> 00:27:37,200 Speaker 8: labor market does actually sort of turn before the fat 573 00:27:37,240 --> 00:27:40,919 Speaker 8: can can support it. That's sort of the biggest uncertainty 574 00:27:40,960 --> 00:27:43,840 Speaker 8: in my mind as I look into twenty twenty six. 575 00:27:44,000 --> 00:27:44,840 Speaker 4: Yes, the outlook is. 576 00:27:44,840 --> 00:27:47,199 Speaker 8: Supportive because we got the tax cuts that come in, 577 00:27:47,600 --> 00:27:50,320 Speaker 8: but the biggest uncertain for me will the FED act 578 00:27:50,440 --> 00:27:52,720 Speaker 8: quickly enough to cush in the labor market now? 579 00:27:52,840 --> 00:27:55,280 Speaker 2: But you say the market, this came up like eight 580 00:27:55,359 --> 00:27:59,040 Speaker 2: times this weekend. It's not the market anymore. And you 581 00:27:59,160 --> 00:28:02,679 Speaker 2: nailed this six months, eight months, a year ago. We 582 00:28:02,720 --> 00:28:06,440 Speaker 2: have this one parcel of the market. MAG seven whatever 583 00:28:06,640 --> 00:28:11,639 Speaker 2: tech it's doing exceptionally well and everything else is really mediocre. 584 00:28:11,880 --> 00:28:14,159 Speaker 2: How do you play it? At Partners Are you still 585 00:28:14,680 --> 00:28:17,840 Speaker 2: MAG seven Tech focus? Large cap focused? 586 00:28:18,680 --> 00:28:19,000 Speaker 4: Right? 587 00:28:19,440 --> 00:28:19,600 Speaker 2: Well? 588 00:28:19,600 --> 00:28:22,320 Speaker 8: At Partners Group, we look at large mega trends, and 589 00:28:22,320 --> 00:28:24,920 Speaker 8: we also look at some of the four sectors along 590 00:28:24,960 --> 00:28:27,840 Speaker 8: which we invest and it's looking of course to technology. 591 00:28:27,920 --> 00:28:31,080 Speaker 8: We certainly are investing in artificial intelligence, not only investing 592 00:28:31,080 --> 00:28:33,000 Speaker 8: in it but also thinking about who might be disrupted 593 00:28:33,000 --> 00:28:35,360 Speaker 8: by it. We look at things like goods and products, 594 00:28:35,359 --> 00:28:38,360 Speaker 8: so then consumer products, think industrial products. 595 00:28:38,440 --> 00:28:39,080 Speaker 4: Services. 596 00:28:39,200 --> 00:28:41,960 Speaker 8: Let's say we like utilities, but we also like servicing 597 00:28:42,080 --> 00:28:46,440 Speaker 8: utilities companies, and of course life sciences and pharmaceutical services 598 00:28:46,480 --> 00:28:49,160 Speaker 8: is the other pillar that we look at. So that's 599 00:28:49,200 --> 00:28:52,400 Speaker 8: how we look at it in private markets. In public markets, 600 00:28:52,440 --> 00:28:55,000 Speaker 8: I would say, you know, Tom, the conversation continues. Is 601 00:28:55,040 --> 00:28:58,880 Speaker 8: the AI momentum still there? For us the Answered Partners Group, 602 00:28:58,920 --> 00:29:02,080 Speaker 8: it's still very much. And just look at what happened 603 00:29:02,080 --> 00:29:04,360 Speaker 8: with the Oracle, for example, last week and the fact 604 00:29:04,400 --> 00:29:07,920 Speaker 8: that they went from guiding you've ever seen it then, 605 00:29:08,120 --> 00:29:11,640 Speaker 8: well not since nineteen ninety two, right, And you know 606 00:29:11,680 --> 00:29:14,640 Speaker 8: the fact that they went from revising their cloud infrastructure 607 00:29:14,640 --> 00:29:17,400 Speaker 8: revenue from eighteen billion to one hundred and forty four 608 00:29:17,480 --> 00:29:20,400 Speaker 8: billion over the next five years. That's monumental and that 609 00:29:20,520 --> 00:29:23,240 Speaker 8: really tells you that the AI momentum is continuing. 610 00:29:23,480 --> 00:29:24,520 Speaker 4: So a partners group. 611 00:29:24,680 --> 00:29:28,480 Speaker 8: We think about investing it obviously in application software, but 612 00:29:28,560 --> 00:29:31,480 Speaker 8: also in infrastructure. And there's probably three, four or five 613 00:29:31,520 --> 00:29:34,680 Speaker 8: ways in which you can invest in AI in infrastruture 614 00:29:34,920 --> 00:29:35,760 Speaker 8: some window. 615 00:29:35,440 --> 00:29:39,560 Speaker 2: Into that for private market stuff, I wouldn't understand how 616 00:29:39,600 --> 00:29:45,880 Speaker 2: do you do AI data, electricity, generation, infrastructure away from 617 00:29:45,880 --> 00:29:47,520 Speaker 2: the Dow Jones industrial average. 618 00:29:47,680 --> 00:29:49,760 Speaker 8: Right, Let's talk about infrastructure, and let's talk about the 619 00:29:50,040 --> 00:29:52,560 Speaker 8: three or four or five ways. I mean, the first 620 00:29:52,560 --> 00:29:56,240 Speaker 8: one was how about well data centers, which I realized Tom, 621 00:29:56,240 --> 00:29:58,720 Speaker 8: it's a theme that's well talked about and at the 622 00:29:58,760 --> 00:30:01,520 Speaker 8: same time, if you look at and at the growth 623 00:30:01,560 --> 00:30:04,680 Speaker 8: in data centers, it's still forecasted to be fourteen percent 624 00:30:04,720 --> 00:30:08,160 Speaker 8: per annum for the next number of years. So data centers, 625 00:30:08,160 --> 00:30:11,600 Speaker 8: and I will say building a traditional data center versus 626 00:30:11,600 --> 00:30:14,680 Speaker 8: building an AI data center are two very different things. 627 00:30:14,920 --> 00:30:15,960 Speaker 4: And what you need for an. 628 00:30:15,960 --> 00:30:18,360 Speaker 8: AI data center, First of all, you need a lot 629 00:30:18,440 --> 00:30:22,640 Speaker 8: more power capacity, power density, So that's a different requirement. 630 00:30:22,840 --> 00:30:25,120 Speaker 8: If you're going to run those racks of GPUs that 631 00:30:25,160 --> 00:30:27,880 Speaker 8: require a whole lot more power, that's a whole different 632 00:30:27,920 --> 00:30:30,880 Speaker 8: cooling requirement, So we have to think about that. And 633 00:30:30,920 --> 00:30:33,800 Speaker 8: then also you know Tom especially if you're not doing training, 634 00:30:33,840 --> 00:30:37,520 Speaker 8: if you're doing AI, inference latency and that you know, 635 00:30:37,840 --> 00:30:41,440 Speaker 8: speed of transferring data is really paramount. So building out 636 00:30:41,520 --> 00:30:45,600 Speaker 8: the fiber capabilities five G capabilities is all that we 637 00:30:45,680 --> 00:30:47,840 Speaker 8: think about in terms of the data center design. So 638 00:30:48,000 --> 00:30:50,760 Speaker 8: quite different than just the traditional stuff and certainly quite 639 00:30:50,760 --> 00:30:52,640 Speaker 8: different than just semiconductors. 640 00:30:52,680 --> 00:30:56,680 Speaker 5: How about electricity generation, and we were talking about builds 641 00:30:56,720 --> 00:30:59,280 Speaker 5: are going up, the demand for electricity is going up. 642 00:31:00,080 --> 00:31:02,760 Speaker 5: Over who gets the electricity is certainly becoming a roiling 643 00:31:02,760 --> 00:31:05,160 Speaker 5: debate as well. How do you see all of that 644 00:31:05,280 --> 00:31:08,000 Speaker 5: laying out? Are you someone who sees nuclear is the 645 00:31:08,040 --> 00:31:09,800 Speaker 5: solution here? How is that going to sort of shape 646 00:31:09,800 --> 00:31:13,080 Speaker 5: the way this arc with AI continues to do. 647 00:31:13,280 --> 00:31:16,040 Speaker 4: Yeah? Well, first of all, some kind of big picture stats. 648 00:31:16,080 --> 00:31:18,080 Speaker 8: If you look at the electricity generation for the last 649 00:31:18,080 --> 00:31:20,280 Speaker 8: twenty five years, it has not grown. But if you 650 00:31:20,320 --> 00:31:23,240 Speaker 8: look at the electricity generation forecasts for the next twenty 651 00:31:23,240 --> 00:31:26,200 Speaker 8: five years, it is forecast to grow at thirty eight percent. 652 00:31:26,440 --> 00:31:28,600 Speaker 4: That's in terms of demand for electricity. 653 00:31:28,880 --> 00:31:30,960 Speaker 8: Some of it comes from AI, some of it comes 654 00:31:30,960 --> 00:31:33,160 Speaker 8: from just the electrification of transportation. 655 00:31:33,800 --> 00:31:34,800 Speaker 4: But here's the status. 656 00:31:34,840 --> 00:31:40,280 Speaker 8: Something like seven hundred terawat hours is what's required in 657 00:31:40,400 --> 00:31:43,360 Speaker 8: terms of additional capacity that we have to build out. 658 00:31:43,800 --> 00:31:47,680 Speaker 8: So that's why I think in public markets, utilities, for example, 659 00:31:47,800 --> 00:31:50,760 Speaker 8: have done fairly well this year, and that is a 660 00:31:50,800 --> 00:31:53,640 Speaker 8: trend that we certainly see continuing because they'll be at 661 00:31:53,640 --> 00:31:55,880 Speaker 8: the forefront of bridging that gap. 662 00:31:56,600 --> 00:31:58,640 Speaker 5: Well, thinks back here to the FED meeting this week, 663 00:31:58,680 --> 00:32:00,280 Speaker 5: when I get a sense of what you expecting out 664 00:32:00,320 --> 00:32:02,600 Speaker 5: of that, but also what that decision and I suppose 665 00:32:02,600 --> 00:32:05,160 Speaker 5: subsequent decisions, the way that they unfold, how they're sequenced, 666 00:32:05,520 --> 00:32:07,640 Speaker 5: is likely to mean for investors. 667 00:32:07,960 --> 00:32:11,239 Speaker 8: Right, I mean, twenty five basis points is obviously has 668 00:32:14,120 --> 00:32:17,000 Speaker 8: it is about to decide, But I do really hope 669 00:32:17,000 --> 00:32:19,040 Speaker 8: that not only do they decide on the twenty five 670 00:32:19,080 --> 00:32:21,960 Speaker 8: basis points now, but also another in the end of 671 00:32:22,000 --> 00:32:25,880 Speaker 8: October and another one in December. And you know, again, 672 00:32:25,920 --> 00:32:28,360 Speaker 8: I say that is because the labor market is sort 673 00:32:28,400 --> 00:32:31,960 Speaker 8: of on the verge of slipping into further weakness, and 674 00:32:32,440 --> 00:32:35,440 Speaker 8: if they worry about inflation, that's sort of a backwards 675 00:32:35,480 --> 00:32:37,280 Speaker 8: looking worry because if all of a sudden, you don't 676 00:32:37,280 --> 00:32:39,520 Speaker 8: have the labor market, you don't have the consumer spending 677 00:32:39,560 --> 00:32:41,920 Speaker 8: four or five percent year over year as we are 678 00:32:41,960 --> 00:32:46,360 Speaker 8: doing today, then that inflationary concern can very quickly pivoted 679 00:32:46,400 --> 00:32:49,479 Speaker 8: to a deflationary concern. So I do hope that not 680 00:32:49,600 --> 00:32:52,360 Speaker 8: only do we get the ray cut this week, but 681 00:32:52,440 --> 00:32:53,920 Speaker 8: we get a pretty. 682 00:32:53,600 --> 00:32:56,800 Speaker 4: Strong indication that this is a beginning. 683 00:32:56,760 --> 00:32:58,720 Speaker 5: Of a rate cut aside forecast. 684 00:32:58,880 --> 00:33:00,880 Speaker 8: That's right, that's I think that's really key to the 685 00:33:00,920 --> 00:33:03,240 Speaker 8: market because think about it, twenty five basis points a 686 00:33:03,360 --> 00:33:06,520 Speaker 8: doesn't really push in the economy. Seventy five basis points 687 00:33:06,680 --> 00:33:10,400 Speaker 8: that could translate to economic benefit. And you know, one 688 00:33:10,440 --> 00:33:13,640 Speaker 8: example I would give you is, obviously tariffs are a 689 00:33:13,760 --> 00:33:17,400 Speaker 8: cost for corporations. They're absorbing them in their margins. But 690 00:33:17,440 --> 00:33:20,360 Speaker 8: what are they doing instead. They're maybe laying off workers, 691 00:33:20,400 --> 00:33:23,440 Speaker 8: maybe they're not hiring workers. But if you can free 692 00:33:23,560 --> 00:33:28,400 Speaker 8: up seventy five basis points of interest expense that can 693 00:33:28,680 --> 00:33:31,360 Speaker 8: be used for other purposes, and that's the support for 694 00:33:31,400 --> 00:33:32,000 Speaker 8: the economy. 695 00:33:33,200 --> 00:33:36,640 Speaker 2: I look at the Santastasian. I'm just I think of 696 00:33:36,720 --> 00:33:40,960 Speaker 2: other guests we've had have just said, look, invest in America, 697 00:33:41,520 --> 00:33:44,760 Speaker 2: and you've been one of the most strident voices that 698 00:33:44,920 --> 00:33:49,480 Speaker 2: say you have to participate in American capitalists. Yeah, talk 699 00:33:49,520 --> 00:33:52,680 Speaker 2: to people that are still scared stiff. They see the 700 00:33:52,720 --> 00:33:57,120 Speaker 2: political trauma of this nation that we talked about earlier 701 00:33:57,120 --> 00:34:01,680 Speaker 2: with the Henrietta state. Again the case to invest in America. 702 00:34:01,760 --> 00:34:03,960 Speaker 4: Right, well, let's talk about the facts. 703 00:34:03,960 --> 00:34:06,440 Speaker 8: And I was never in the camp of the American 704 00:34:06,480 --> 00:34:09,239 Speaker 8: exceptionalism is over and the reason for that. Let's just 705 00:34:09,320 --> 00:34:12,520 Speaker 8: talk about the backdrop forward corporate in America. And one 706 00:34:12,520 --> 00:34:15,160 Speaker 8: of the things that the tax bill did is solidify 707 00:34:15,360 --> 00:34:17,840 Speaker 8: the fact that corporate tax rate in the United States 708 00:34:17,880 --> 00:34:20,799 Speaker 8: is going to be twenty one percent. After accounting for 709 00:34:20,880 --> 00:34:24,160 Speaker 8: certain deductions, it's probably close to about nineteen percent. The 710 00:34:24,239 --> 00:34:26,160 Speaker 8: big deal about that time is if you look at 711 00:34:26,160 --> 00:34:28,799 Speaker 8: some of the other develop market economies, the average is 712 00:34:28,880 --> 00:34:32,319 Speaker 8: twenty five percent or higher in some instances. So all 713 00:34:32,360 --> 00:34:35,320 Speaker 8: of a sudden, you have an incredibly friendly corporate tax 714 00:34:35,360 --> 00:34:37,840 Speaker 8: regime that on top of that, there's a couple of 715 00:34:37,880 --> 00:34:40,640 Speaker 8: things in the tax building it even more friendly. And 716 00:34:40,680 --> 00:34:44,160 Speaker 8: I'm talking about the one hundred percent bonus depreciation. So 717 00:34:44,360 --> 00:34:47,480 Speaker 8: if you invest today in America, you get that one 718 00:34:47,560 --> 00:34:51,360 Speaker 8: hundred percent bonus depreciation in year one that has been permanent. 719 00:34:51,520 --> 00:34:53,960 Speaker 8: So that is a long term boost to us GDP. 720 00:34:54,520 --> 00:34:57,360 Speaker 8: If you invest in R and D in the United states. 721 00:34:57,400 --> 00:34:59,879 Speaker 8: That's again a one hundred percent deduction in year one 722 00:35:00,360 --> 00:35:04,720 Speaker 8: versus the five year stretch out before. So you package 723 00:35:04,760 --> 00:35:08,560 Speaker 8: that together, that's that's an incredible incentive to invest in America. 724 00:35:08,680 --> 00:35:12,560 Speaker 2: Anastasia, thanks so much. Anastasia m Roso nailed the boom 725 00:35:12,560 --> 00:35:16,080 Speaker 2: market is with partners, Stay with us. More from Bloomberg 726 00:35:16,200 --> 00:35:25,640 Speaker 2: Surveillance coming up after this. 727 00:35:25,640 --> 00:35:29,560 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 728 00:35:29,600 --> 00:35:32,600 Speaker 1: starting at seven am Eastern on Apple, Corplay and Android 729 00:35:32,600 --> 00:35:35,600 Speaker 1: Auto with the Bloomberg Business app. You can also watch 730 00:35:35,680 --> 00:35:38,640 Speaker 1: us live every weekday on YouTube and always on the 731 00:35:38,680 --> 00:35:39,680 Speaker 1: Bloomberg Terminal. 732 00:35:39,760 --> 00:35:46,359 Speaker 2: David Gurney David Gurney, Gurney, David g David, I need more, 733 00:35:46,440 --> 00:35:50,000 Speaker 2: Senka David Gera in for Paul Sweeney right now, She'll 734 00:35:50,040 --> 00:35:52,840 Speaker 2: save me. Let's get to the newspapers. El Matteo. 735 00:35:52,960 --> 00:35:54,640 Speaker 7: I don't know if I'll save you, but I'll try. 736 00:35:54,760 --> 00:35:55,319 Speaker 7: Here we go. 737 00:35:55,440 --> 00:35:58,320 Speaker 9: Okay, so we've been talking about how AI is transforming 738 00:35:58,360 --> 00:36:01,200 Speaker 9: corporate America, right, but this says something interesting from gold 739 00:36:01,280 --> 00:36:04,600 Speaker 9: mien sacts. They say its growth is understated and government 740 00:36:04,719 --> 00:36:07,759 Speaker 9: data so they say AI added one hundred and sixty 741 00:36:07,800 --> 00:36:11,399 Speaker 9: billion dollars to the US economy, but only forty five 742 00:36:11,480 --> 00:36:15,120 Speaker 9: billion shows up in GDP, and anils are saying that 743 00:36:15,200 --> 00:36:18,120 Speaker 9: leaves about one hundred and fifteen billion dollars uncounted. For 744 00:36:18,920 --> 00:36:21,400 Speaker 9: the reason how this is happening is, they say, because 745 00:36:21,440 --> 00:36:25,479 Speaker 9: semiconductors treated as intermediate inputs which are only counted toward 746 00:36:25,480 --> 00:36:28,759 Speaker 9: that final demand when products like things like consumer laptops 747 00:36:29,040 --> 00:36:32,000 Speaker 9: that they enable our sold. So the chips in recent 748 00:36:32,080 --> 00:36:35,880 Speaker 9: years they're being developed for things like training supporting AI models. 749 00:36:35,960 --> 00:36:39,040 Speaker 9: So these Goldman analysts are estimating that about seventy five 750 00:36:39,080 --> 00:36:41,960 Speaker 9: billion dollars spent on developing AI models and solutions in 751 00:36:42,000 --> 00:36:45,920 Speaker 9: the cloud, they have not been counted in these investment statistics. 752 00:36:45,920 --> 00:36:48,279 Speaker 9: So it's an interesting number to think about when all 753 00:36:48,320 --> 00:36:50,800 Speaker 9: the talk we've been having about AI and its influence 754 00:36:50,840 --> 00:36:52,400 Speaker 9: on corporate America, Ya's. 755 00:36:52,200 --> 00:36:53,320 Speaker 5: Saying to think about that, I mean, we had that 756 00:36:53,360 --> 00:36:55,879 Speaker 5: conversation last week just about productivity, and now that's still 757 00:36:55,920 --> 00:36:59,400 Speaker 5: something that's so amorphous with the effect that hugely. 758 00:36:59,040 --> 00:37:02,239 Speaker 2: Amorphous to go into it now because it's three ratios. 759 00:37:02,640 --> 00:37:07,000 Speaker 2: Last week, that conversation with Heath Terry Studibank was extraordinary 760 00:37:07,000 --> 00:37:11,560 Speaker 2: and Lisa, he said expert. It's moving so damn fast, 761 00:37:12,000 --> 00:37:13,919 Speaker 2: was what mister Terry said next week. 762 00:37:14,000 --> 00:37:15,799 Speaker 9: Most definitely, Okay, I want to take it to the 763 00:37:16,000 --> 00:37:20,640 Speaker 9: entertainment media space. We know about David Elson right acquiring Powermount. 764 00:37:20,640 --> 00:37:22,960 Speaker 9: Now he's hiring financial advisors to get ready to buy 765 00:37:23,040 --> 00:37:26,160 Speaker 9: Warner Brothers Discovery. But this is an interesting reader in 766 00:37:26,200 --> 00:37:31,400 Speaker 9: bloomberg screen time newsletter as to why now. So they're saying, 767 00:37:31,400 --> 00:37:33,560 Speaker 9: you know what, he could have waited to do this 768 00:37:33,600 --> 00:37:37,560 Speaker 9: whole paramounts guidance, and there sever things off. Warner Brothers 769 00:37:37,560 --> 00:37:41,040 Speaker 9: could have even been cheaper if he waited, But if 770 00:37:41,080 --> 00:37:44,560 Speaker 9: he did, he'd risk into running into a different regulatory regime, 771 00:37:44,600 --> 00:37:49,000 Speaker 9: a different Yeah, that's the scene the president correct. Correct, 772 00:37:49,520 --> 00:37:51,600 Speaker 9: And if he waited, he calls. He could also have 773 00:37:52,120 --> 00:37:54,040 Speaker 9: other parties could have made a play for Warner Brothers. 774 00:37:54,080 --> 00:37:56,360 Speaker 9: He could have had that. But now you know, Bloomberg's 775 00:37:56,320 --> 00:37:59,480 Speaker 9: screen Time is saying the likely list of buyers is short. 776 00:37:59,560 --> 00:38:02,840 Speaker 9: So mean now is you know possibly the right time today? 777 00:38:02,880 --> 00:38:04,640 Speaker 2: I read every word of screen Time. You can't say 778 00:38:04,719 --> 00:38:07,000 Speaker 2: enough about it. It's event in October is like it's 779 00:38:07,000 --> 00:38:08,480 Speaker 2: got goosebumps, It's got everybody. 780 00:38:08,760 --> 00:38:11,719 Speaker 5: Yeah, I know, we can't get tickets. We can't get in. 781 00:38:11,880 --> 00:38:13,200 Speaker 5: You and I. 782 00:38:14,560 --> 00:38:17,640 Speaker 2: You know it's you gotta be cool, you know you 783 00:38:17,640 --> 00:38:21,319 Speaker 2: get in. But the basic idea here is what do 784 00:38:21,360 --> 00:38:26,440 Speaker 2: you do with old media? That permeates every paragraph of 785 00:38:26,480 --> 00:38:29,920 Speaker 2: the newsletter? What does Warner Brothers? What does Paramount do 786 00:38:30,320 --> 00:38:32,520 Speaker 2: with I guess the movies, and I guess they're not 787 00:38:32,600 --> 00:38:34,839 Speaker 2: worth all that much, right, I mean, it's it's great. 788 00:38:34,840 --> 00:38:36,239 Speaker 4: It makes you think, it really does. 789 00:38:36,320 --> 00:38:39,840 Speaker 2: It makes you think about where are we in five years? 790 00:38:40,719 --> 00:38:42,480 Speaker 2: How much TV was watched at the girl. 791 00:38:42,360 --> 00:38:44,359 Speaker 5: House quite a bit yesterday. I don't know what game 792 00:38:44,360 --> 00:38:46,120 Speaker 5: we didn't watch, but Brian Weezer was so good on 793 00:38:46,160 --> 00:38:46,719 Speaker 5: this last week. 794 00:38:46,840 --> 00:38:48,440 Speaker 2: We didn't have enough, we got enough time with it, 795 00:38:48,480 --> 00:38:52,439 Speaker 2: but he can you you know, I know it's three 796 00:38:52,520 --> 00:38:55,719 Speaker 2: layers below you, but can you tell the team if 797 00:38:55,760 --> 00:38:58,600 Speaker 2: you have time to go that low on a tree, 798 00:38:59,160 --> 00:39:01,680 Speaker 2: that we'd like to get Ryan Weezer back again because 799 00:39:01,680 --> 00:39:04,839 Speaker 2: he was shorter last week without the emergency stuff. 800 00:39:04,520 --> 00:39:04,960 Speaker 4: We didn't do. 801 00:39:05,040 --> 00:39:06,759 Speaker 2: You have anything else? I do? I do? 802 00:39:06,880 --> 00:39:09,440 Speaker 9: And this one might touch your heartstrings a little bit. Okay, 803 00:39:09,480 --> 00:39:12,399 Speaker 9: So moms and dads right for years have been taken 804 00:39:12,440 --> 00:39:14,560 Speaker 9: after the kids, and now they send them off to college, 805 00:39:14,920 --> 00:39:18,120 Speaker 9: and now it's setting in right, what do I do 806 00:39:18,360 --> 00:39:21,240 Speaker 9: getting emotional? What do I do with this new chapter 807 00:39:21,320 --> 00:39:24,480 Speaker 9: in my life? You know, it does get emotional. I 808 00:39:24,520 --> 00:39:25,800 Speaker 9: got a year to go and then I'm going to 809 00:39:25,880 --> 00:39:29,080 Speaker 9: be in the same spot and how you're feeling. Some 810 00:39:29,160 --> 00:39:31,880 Speaker 9: are finding it liberating, but others are having a really 811 00:39:31,920 --> 00:39:34,319 Speaker 9: tough time with it because. 812 00:39:34,200 --> 00:39:36,320 Speaker 4: They're so used to Tom's got his heart. 813 00:39:38,320 --> 00:39:45,200 Speaker 2: Apartment. Is the messaging the iPhone? Like the messing? I 814 00:39:45,239 --> 00:39:49,480 Speaker 2: did this exactly fifty years ago, four a M. Did 815 00:39:49,600 --> 00:39:50,200 Speaker 2: I wake you? 816 00:39:52,920 --> 00:39:55,480 Speaker 9: But I bet you treasured that text message? You know, 817 00:39:55,640 --> 00:39:58,400 Speaker 9: like it is, Oh shut out, I'm want to get 818 00:39:58,440 --> 00:39:59,680 Speaker 9: it out of it? 819 00:40:00,520 --> 00:40:09,040 Speaker 2: Show me from newspapers the newspapers with Lisa Matteo this morning. 820 00:40:09,480 --> 00:40:14,319 Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify, 821 00:40:14,440 --> 00:40:18,200 Speaker 1: and anywhere else you get your podcasts. Listen live each 822 00:40:18,239 --> 00:40:22,200 Speaker 1: weekday seven to ten am Eastern on Bloomberg dot Com, 823 00:40:22,239 --> 00:40:26,040 Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app. 824 00:40:26,320 --> 00:40:29,440 Speaker 1: You can also watch us live every weekday on YouTube 825 00:40:29,760 --> 00:40:31,760 Speaker 1: and always on the Bloomberg Terminal