WEBVTT - Making Sense of the Tech Selloff 0:00:00.040 --> 0:00:13.760 Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 0:00:13.800 --> 0:00:17.880 Surveillance Podcast. Catch us live weekdays at seven am Eastern 0:00:18.200 --> 0:00:21.960 on Apple CarPlay or Android Auto with the Bloomberg Business App. 0:00:22.320 --> 0:00:25.640 Listen on demand wherever you get your podcasts, or watch 0:00:25.760 --> 0:00:28.480 us live on YouTube and Technology. 0:00:28.640 --> 0:00:31.800 I've Ben find stuff joins us with Tigris this morning. 0:00:32.320 --> 0:00:36.199 He survived Boston University Finance and accounting, one of the 0:00:36.240 --> 0:00:40.040 great grinds of college academics. Ivan, I'm going to cut 0:00:40.080 --> 0:00:43.800 to the chase. You've got a very very constructive note 0:00:43.840 --> 0:00:48.360 on a quote classic shakeout of crowded AI trades. Do 0:00:48.440 --> 0:00:52.559 you load the boat on Microsoft? What's the character of 0:00:52.640 --> 0:00:54.960 your enthusiasm to acquire shares? 0:00:56.480 --> 0:00:59.760 Well, first of all, I think this negative view of 0:00:59.800 --> 0:01:02.840 this software stocks is just way overdone. Even Jensen Long 0:01:02.920 --> 0:01:06.440 has said that software drives the functionality of hardware. 0:01:07.000 --> 0:01:09.119 But look, it's still. 0:01:08.800 --> 0:01:12.200 AI is a powerful investment theme, and we're going to 0:01:12.200 --> 0:01:14.319 see things get to have themselves like we saw this 0:01:14.440 --> 0:01:17.320 run up in arm, run up in Micron, run up 0:01:17.319 --> 0:01:21.119 in SanDisk. But yet this is a very powerful theme 0:01:21.280 --> 0:01:24.120 that I think has still long to run, and the 0:01:24.160 --> 0:01:28.120 next phase is going to be the evolution of smart 0:01:28.160 --> 0:01:32.560 devices that just have an AI operating system, and instead 0:01:32.560 --> 0:01:36.759 of on your phone using different apps to do different functions, 0:01:36.840 --> 0:01:41.080 you're going to have an overall AI interactive operating system 0:01:41.440 --> 0:01:44.440 that then will drive agents to use different apps to 0:01:44.480 --> 0:01:48.400 accomplish what you want. Like for example, if you're interested in, 0:01:48.760 --> 0:01:51.760 you know, you want to eat Italian food, where's the 0:01:51.800 --> 0:01:54.160 best place to go to where I am. It'll give 0:01:54.160 --> 0:01:56.560 you some suggestions and all you have to do is say, 0:01:56.720 --> 0:01:58.840 all right, book me a table at seven point thirty 0:01:58.880 --> 0:02:01.920 for four people at this restaurant, and it will do 0:02:01.960 --> 0:02:04.720 that rather than you having to go to Rezi or 0:02:04.760 --> 0:02:08.919 to one of the other apps to both interaction. 0:02:09.280 --> 0:02:10.800 And this is what qualcomm. 0:02:10.840 --> 0:02:14.280 In fact, I'm going to be attending quill Common investerday today, 0:02:14.720 --> 0:02:20.480 but is using their processors, data centers, and most important, 0:02:20.760 --> 0:02:23.040 the power of this is computing at the edge. 0:02:23.200 --> 0:02:26.760 Okay, now, yeah, but hold on, Paul, help me there? 0:02:27.080 --> 0:02:29.760 Can AI get me a table at rows? 0:02:30.000 --> 0:02:31.799 I don't think there? 0:02:32.400 --> 0:02:35.760 I know, yes, he I doesn't have that much juice 0:02:35.760 --> 0:02:36.840 at least right now. 0:02:37.639 --> 0:02:41.120 Ivan frame mount kind of your conversations with your clients 0:02:41.280 --> 0:02:44.959 about software broadly defined, because again we've had a sell 0:02:45.000 --> 0:02:48.040 off in this sector, particularly for the SaaS names that 0:02:48.120 --> 0:02:49.919 a lot of people did not see coming. And it's 0:02:49.960 --> 0:02:52.200 been such a strong, strong sector to be in for 0:02:52.280 --> 0:02:54.920 decades because of the recurring revenue and a free cash flow. 0:02:55.160 --> 0:02:58.200 What's your view of software broadly defined these days. 0:02:58.800 --> 0:03:01.480 I think there's a lot of opportunity in the database 0:03:01.560 --> 0:03:05.840 software companies like Mango dB and like Monday dot Com. 0:03:06.320 --> 0:03:10.639 I think the software the infrastructure providers like Oracle, as 0:03:10.680 --> 0:03:16.480 well as the process of providers like Nvidia and memory. Look, 0:03:16.600 --> 0:03:19.680 there's a tremendous shortage of memory because of the huge 0:03:19.680 --> 0:03:22.799 demand to build out these data centers, and memory prices 0:03:22.840 --> 0:03:26.760 have tripled and quadrupled over the past year, and that's 0:03:26.800 --> 0:03:30.880 what's been driving things like Micron at sand Disc. So, 0:03:31.560 --> 0:03:35.240 but this is a powerful theme that will go on 0:03:35.440 --> 0:03:36.080 for some time. 0:03:36.680 --> 0:03:39.640 Microsoft down twenty three percent year to date. You don't 0:03:39.640 --> 0:03:42.480 see that very often here, which your view there of 0:03:42.600 --> 0:03:46.080 just kind of Microsoft and some of these software names. 0:03:46.440 --> 0:03:49.360 I think Microsoft is a tremendous buy here. We've seen 0:03:49.600 --> 0:03:52.760 this trend before where all of a sudden the market 0:03:52.800 --> 0:03:56.400 turns negative on Microsoft because years ago they weren't in 0:03:56.400 --> 0:03:58.880 the cloud. They are a cloud leader. They weren't INAI, 0:03:59.080 --> 0:04:03.080 they are in AI leader, and they still command ninety 0:04:03.120 --> 0:04:07.000 percent of all computer desktops. So this is a huge 0:04:07.840 --> 0:04:11.120 infrastructure provider and I think a tremendous buy here. 0:04:12.040 --> 0:04:15.840 And look the state of this and the catalyst of it. 0:04:16.600 --> 0:04:18.919 What is the earning season going to look like? Is 0:04:18.960 --> 0:04:22.520 it can convey that all these companies, these believe you 0:04:22.720 --> 0:04:24.160 tech companies are still. 0:04:23.960 --> 0:04:30.240 Thriving, absolutely and with each report an increasing capital investment 0:04:30.320 --> 0:04:30.760 in AI. 0:04:31.240 --> 0:04:34.440 We saw it. So with the you know Q four 0:04:34.720 --> 0:04:35.320 and full. 0:04:35.200 --> 0:04:39.240 Year results of all the big tech companies, the five 0:04:39.320 --> 0:04:43.200 or six major tech companies have committed over six on 0:04:43.360 --> 0:04:46.640 close to seven hundred billion dollars in capital investment for 0:04:46.720 --> 0:04:50.840 this year, close to fifty percent from last year. So 0:04:51.040 --> 0:04:55.960 capital investment in AI infrastructure and data centers and in 0:04:56.040 --> 0:05:01.240 all the different factors or cloud computing, edge computing and 0:05:02.240 --> 0:05:05.240 the access to this. Now I bring up WELLcom because 0:05:05.279 --> 0:05:09.479 they recently announced we're they're working with open Ai. Last year, 0:05:09.520 --> 0:05:13.800 open ai hired Johnny Ives from Apple to lead device creator. 0:05:13.839 --> 0:05:17.520 Johnny Ives was the developer of the original iPhone. So 0:05:17.560 --> 0:05:20.279 you're going to see devices from all of these companies. 0:05:20.640 --> 0:05:25.280 It's going to be you know handheld desk connected devices. 0:05:26.800 --> 0:05:31.800 The Meta just announced a new line of smart glasses. 0:05:31.960 --> 0:05:34.560 It's going to be all these different devices that help 0:05:34.640 --> 0:05:39.080 you interact right and get your questions answered by using 0:05:39.080 --> 0:05:39.839 AI agent. 0:05:40.040 --> 0:05:43.320 I've ad finds this wonderful and technology at Tigers. Stay 0:05:43.360 --> 0:05:47.240 with us. More from Bloomberg Surveillance coming up after this. 0:05:54.480 --> 0:05:58.080 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:05:58.120 --> 0:06:01.640 weekday afternoons from seven to ten den Listen on Apple 0:06:01.720 --> 0:06:05.039 Karplay and Android Otto with the Bloomberg Business app, or 0:06:05.200 --> 0:06:06.680 watch us live on YouTube. 0:06:06.839 --> 0:06:11.000 We are just thrilled in Chad Wayne with us with Vanguard. 0:06:11.720 --> 0:06:15.480 The academic path is her Beijing University in China that 0:06:15.640 --> 0:06:18.880 she stumbled on the duke peaked at peached a duke 0:06:18.920 --> 0:06:21.160 and then I wandered by Stanford to pick up the people. 0:06:21.200 --> 0:06:23.680 What was your first day like at Duke to come 0:06:23.720 --> 0:06:27.719 from China? Did you know who UNC was? Did you 0:06:27.760 --> 0:06:30.120 have any Indiana Duke un see when you walked in 0:06:30.200 --> 0:06:30.520 the door. 0:06:31.040 --> 0:06:35.080 Well, my memory is still vivid when I actually come 0:06:35.120 --> 0:06:38.559 to North Carolina, Blue Devil right, you know, fos keyboy 0:06:38.680 --> 0:06:40.680 is the number one thing, and I still remember oil 0:06:40.720 --> 0:06:44.000 price was ninety nine cents at that moment. That was 0:06:44.040 --> 0:06:45.159 back in nineteen ninety seven. 0:06:45.320 --> 0:06:46.080 Surely that's just. 0:06:46.040 --> 0:06:48.000 Too short a visit today. But I've just got to 0:06:48.040 --> 0:06:51.200 cut to the chase. The state of Hong Kong. We 0:06:51.240 --> 0:06:54.840 have a huge platform there Stephen Engel, Yvonne and Dan 0:06:54.920 --> 0:06:58.120 and all the team at Bloomberg. There the state of 0:06:58.440 --> 0:07:00.640 government in Hong Kong on right now. 0:07:01.080 --> 0:07:04.160 M Yeah, I think Hong Kong actually is you know, 0:07:04.240 --> 0:07:07.640 stabilizing right after quite a few years of uh, you 0:07:07.720 --> 0:07:12.840 know uncertainty, right, you know, this kind of uncertainty about 0:07:12.840 --> 0:07:16.120 the political landscape there Hong Kong. Actually, I think the economy, 0:07:16.200 --> 0:07:20.160 the market is finally coming back, so some of the 0:07:20.240 --> 0:07:24.640 regulatory uncertainty is actually fading. We do see the finance 0:07:24.760 --> 0:07:27.640 industry and the labor market is actually starting coming back, 0:07:27.760 --> 0:07:29.520 especially with this Ai story. 0:07:29.680 --> 0:07:32.280 What is it's my great mentor Michael Elliott who had 0:07:32.360 --> 0:07:36.120 lost way too early from Time Magazine Up the mountain, 0:07:36.440 --> 0:07:40.960 up the hill. Is the capitalistic spirit still in Hong Kong. 0:07:41.960 --> 0:07:44.280 I think this is where what you would see in 0:07:44.520 --> 0:07:47.840 Hong Kong is more this kind of socialist style, right, 0:07:47.960 --> 0:07:51.720 you know, uh market economy, right, That's where I think 0:07:52.240 --> 0:07:55.040 to a certain stand Hong Kong is so unique to China, right, 0:07:55.080 --> 0:07:58.520 it still remains the window, you know, for China to 0:07:58.600 --> 0:08:01.080 connect to the rest of the world. Right, So that's 0:08:01.120 --> 0:08:03.720 where I would say you would continue to see this 0:08:03.880 --> 0:08:07.440 kind of free capital flow, free market economy that will 0:08:07.520 --> 0:08:11.640 remain to be the uniqueness about Hong Kong that is 0:08:11.720 --> 0:08:13.520 actually different from the mainland China. 0:08:14.120 --> 0:08:17.040 Talk to us about the economy on mainland China. How 0:08:17.080 --> 0:08:18.920 do you see it today and what are the key 0:08:19.080 --> 0:08:20.000 drivers going forward? 0:08:20.040 --> 0:08:20.360 Do you think? 0:08:20.880 --> 0:08:23.280 Well, I think when you look at the Chinese economy, 0:08:23.720 --> 0:08:26.560 I think on the headline, you see that the real 0:08:26.680 --> 0:08:29.440 economic growth seems to be pretty good, right, you know, 0:08:29.800 --> 0:08:32.679 they are able to achieve their growth target last year 0:08:32.800 --> 0:08:34.959 and this year four point five to five percent is 0:08:35.040 --> 0:08:38.400 not that difficult to achieve either. But I think underline 0:08:38.440 --> 0:08:42.640 that headline you see significant divergence between supply and demand. 0:08:43.440 --> 0:08:46.280 At this moment, most of the economy driver is really exports, 0:08:46.600 --> 0:08:49.800 Right Is that sustainable? I don't think so, right, because 0:08:49.880 --> 0:08:52.840 that's going to create a lot of global friction, right, 0:08:52.960 --> 0:08:57.880 protectionism from US, Europe even other emergent markets. Well, on 0:08:57.920 --> 0:09:00.000 the other hand, if you look at the domestic demands 0:09:00.000 --> 0:09:04.480 and consumer retail sales just you know contracted last months, right, 0:09:05.280 --> 0:09:07.800 and then you know, fixed investment housing is in this 0:09:08.000 --> 0:09:11.520 persistent long term. I don't see a decisive turn yet 0:09:11.800 --> 0:09:16.199 at this moment without you know, significant government intervention or 0:09:16.320 --> 0:09:20.360 leverage in central government balance sheet. So housing market hasn't 0:09:20.360 --> 0:09:20.880 bottom yet. 0:09:21.920 --> 0:09:24.320 How does China view the US in terms of these 0:09:24.400 --> 0:09:27.360 trade negotiations? I kind of it just feels like to 0:09:27.480 --> 0:09:30.640 me as an outsider, both sides kind of need each other. 0:09:30.840 --> 0:09:33.599 It seems like, how does China view it? 0:09:34.200 --> 0:09:34.400 Yeah? 0:09:34.679 --> 0:09:37.719 I think that's you know one thing especially I think 0:09:37.840 --> 0:09:41.280 with President Trump's visit to China. You know, they talk 0:09:41.320 --> 0:09:43.840 about this kind of strategic stability, and to me, it's 0:09:43.920 --> 0:09:48.320 more of a transactional relationship. Right. That's where the world 0:09:48.440 --> 0:09:51.160 and the US realized that, yeah, we still need China, 0:09:51.280 --> 0:09:54.240 especially at this moment when we are doing all those 0:09:54.320 --> 0:09:56.760 build out right AI you know, and the rest work 0:09:56.800 --> 0:09:59.960 Green transition, and you still need that kind of manufacturing 0:10:00.240 --> 0:10:01.360 capacity from China. 0:10:02.480 --> 0:10:06.880 Help us with the dollar. The basics in vanguard courses 0:10:06.960 --> 0:10:10.439 front and center. Honest, we need a weak dollar to 0:10:10.559 --> 0:10:15.360 have international equity investment go. That's been disproving here recently. 0:10:15.920 --> 0:10:18.640 Do we need a week dollar, Do we need a 0:10:18.760 --> 0:10:19.520 strong yuan? 0:10:20.559 --> 0:10:20.760 Yeah? 0:10:20.920 --> 0:10:24.920 I think I definitely think one actually is somewhat undervalue. 0:10:25.600 --> 0:10:27.800 You know, if you look at the fundamental the purchase 0:10:27.840 --> 0:10:31.760 and power, the record high you know, current council plus right, 0:10:31.840 --> 0:10:34.120 you know, one point two treaty and last year and 0:10:34.320 --> 0:10:37.920 then this year is likely to remain elevated. I do think, 0:10:38.120 --> 0:10:42.120 you know, there's room for reman be yuan to appreciate 0:10:42.520 --> 0:10:44.559 and to a certain stand I think that aligns with 0:10:44.679 --> 0:10:47.559 the strategic goal of the Chinese government, right. They want 0:10:47.640 --> 0:10:50.360 to push in them and be internationalization. They want to 0:10:50.400 --> 0:10:54.040 boost up people's confidence in the Chinese economy and assets. 0:10:54.160 --> 0:10:56.880 A stronger rum will actually help them. But I think 0:10:57.000 --> 0:10:59.679 it's the question is really about the pace of appreciation. 0:11:00.160 --> 0:11:03.160 I don't think China will ever let the pace of 0:11:03.440 --> 0:11:07.080 appreciation or depreciation to be that fast, right, So anything 0:11:07.240 --> 0:11:10.839 is in the controlled, managed, you know, pace by the 0:11:10.920 --> 0:11:12.000 central bankan government. 0:11:12.760 --> 0:11:16.600 Tariffs were however long we're into the whole tariff regime. Here, 0:11:16.720 --> 0:11:19.880 President Trump, here, what's the view in China? What's the 0:11:19.960 --> 0:11:23.160 impact been on China? How are they viewing this tariff environment? 0:11:23.720 --> 0:11:26.240 Yeah, I mean that's an interesting part because I've been 0:11:26.440 --> 0:11:29.920 you know, visiting you know, China manufacturing sector, you know, 0:11:30.160 --> 0:11:35.400 in Guangdong, in Huatyang, you know, every year, right, And 0:11:35.760 --> 0:11:37.600 you know, last year at the peak of the tariff, 0:11:38.080 --> 0:11:41.400 when I was talking to a lot of manufacturers, I think, 0:11:41.600 --> 0:11:43.360 you know, many of them feel like, you know what, 0:11:43.559 --> 0:11:46.800 we see this coming, right, Like the trade war actually 0:11:46.880 --> 0:11:50.600 started in twenty eighteen, and Chinese factories manufacturing has been 0:11:50.640 --> 0:11:53.680 preparing for this for quite a few years. They've been 0:11:53.760 --> 0:11:58.360 diversifying their you know, export market and moving their factories 0:11:58.559 --> 0:12:02.520 right out of China. And also China is so competitive, right, 0:12:02.600 --> 0:12:05.320 the cost is so low, so they can bear the target, 0:12:06.280 --> 0:12:08.880 you like, way Lee of black Rock. 0:12:08.960 --> 0:12:13.360 There's just such an authentic reality of China away from 0:12:13.400 --> 0:12:17.600 the media myths in America. What's the number one thing 0:12:18.600 --> 0:12:22.200 Americans get wrong about the state of China right now? 0:12:23.360 --> 0:12:25.559 Well, I think you know, for a long time, we 0:12:25.880 --> 0:12:28.640 as economists has been arguing that, you know, does China's 0:12:28.679 --> 0:12:32.439 model work, right, the kind of you know, a government 0:12:32.559 --> 0:12:36.079 plant or you know, socialist style of market economy does 0:12:36.160 --> 0:12:39.640 not work at all, I mean, including industry policy, right. 0:12:39.760 --> 0:12:44.120 I mean, you know, at some point people start to realize, Yeah, 0:12:44.200 --> 0:12:47.679 it worked to a certain extent. Right, It's so at 0:12:47.760 --> 0:12:50.920 some point it needs to be a you know combination. Right, 0:12:51.000 --> 0:12:53.640 maybe the government can need to help, right, need to 0:12:53.720 --> 0:12:57.120 support the economy to a certain extent, but at the 0:12:57.160 --> 0:12:59.880 same time they also need to let the market economy 0:13:00.120 --> 0:13:03.959 play their role in areas that you know, otherwise you 0:13:04.040 --> 0:13:06.560 could end up with over capacity as we are seeing 0:13:06.960 --> 0:13:10.559 today and you kind of distort you know, the economy, 0:13:10.880 --> 0:13:12.080 which is not sustainable. 0:13:12.280 --> 0:13:14.079 This has been wonderful. Thank you so much for the 0:13:14.120 --> 0:13:16.760 effort to get here, and a long travels. Chang Wing 0:13:16.960 --> 0:13:20.520 is with this chief Asia Pacific economist at Vanguard driving 0:13:20.640 --> 0:13:24.880 all of their economics worldwide. Stay with us. More from 0:13:24.960 --> 0:13:27.480 Bloomberg Surveillance coming up after this. 0:13:34.880 --> 0:13:38.440 You're listening to the Bloomberg Surveillance podcast. Catch us Live 0:13:38.520 --> 0:13:41.640 weekday afternoons from seven to ten am Eastern Listen on 0:13:41.760 --> 0:13:45.400 Applecarplay and Android Otto with the Bloomberg Business app, or 0:13:45.600 --> 0:13:46.520 watch us live on. 0:13:46.600 --> 0:13:48.959 YouTube Massive Rip up the script and we can do 0:13:49.040 --> 0:13:51.880 this with Libby Cantrol of Pimco as well. The Secondary 0:13:51.920 --> 0:13:54.839 of Treasury is over on a death start given the 0:13:54.920 --> 0:13:58.320 Republican line off the elections last night this is Bessent. 0:13:58.840 --> 0:14:02.719 Last night we saw ma'm donnie is Leader of Democrats. 0:14:03.400 --> 0:14:06.199 Laura Nemaias picked that up for Bloomberg with Naka Kitan 0:14:06.679 --> 0:14:11.400 and Samuel Church this morning, talking about anti establishment anger 0:14:12.480 --> 0:14:18.439 is the Progressive Democrats, the Social Democrats, the new Mumdanni angle. 0:14:19.040 --> 0:14:22.200 This is not Jacob Javits, this is not this is 0:14:22.280 --> 0:14:25.600 not Hubert Humphrey. This isn't even John Lindsay, is it. 0:14:26.600 --> 0:14:26.640 No? 0:14:26.920 --> 0:14:28.760 I mean this is so I think a couple of things. 0:14:28.840 --> 0:14:31.640 One is that just remember politics are local, so we're 0:14:31.680 --> 0:14:35.920 talking about one of, if not the most liberal city 0:14:36.120 --> 0:14:39.400 in America. But what this does show you what sort 0:14:39.400 --> 0:14:42.320 of the what the primary results show you last night 0:14:42.400 --> 0:14:45.840 is one, Mumdanni has incredible star power. He went three 0:14:45.960 --> 0:14:48.560 for three in terms of endorsing folks who ended up winning. 0:14:49.360 --> 0:14:53.000 But two, there is a lot of anti incumbent anger and. 0:14:53.080 --> 0:14:53.480 You saw this. 0:14:53.600 --> 0:14:56.120 You've seen this on the Republican side just as a reminder, 0:14:56.560 --> 0:14:58.640 and now you're seeing it on the Democratic side as well. 0:14:59.280 --> 0:15:02.520 And then number three is that the Democratic Socialist at 0:15:02.600 --> 0:15:05.000 least here in New York City, are much better organized 0:15:05.360 --> 0:15:09.240 than the party. So grassroots outreach, that all that stuff 0:15:09.320 --> 0:15:12.560 still matters. I think this is very much expected that 0:15:12.760 --> 0:15:15.400 the Republicans will sort of demagogue this, they'll make this 0:15:15.600 --> 0:15:18.800 sort of the face of the Democratic Party. I think 0:15:18.840 --> 0:15:21.400 it is also important just to remember that other folks, 0:15:21.560 --> 0:15:24.200 more moderate candidates actually won last night, and on the 0:15:24.280 --> 0:15:28.120 Democratic side in Utah and upstate New York, down in Maryland. 0:15:28.360 --> 0:15:31.000 So I'm not sure that we should be extrapolating massive 0:15:31.120 --> 0:15:33.720 themes about kind of the future of the Democratic Party. 0:15:34.040 --> 0:15:36.800 But what is clear from on the Republican side and 0:15:36.920 --> 0:15:39.800 Democratic side, and people are angry and they're mad at 0:15:39.800 --> 0:15:41.960 incumbents and they're taking them out on this sort of 0:15:42.040 --> 0:15:43.440 the political class, if you will. 0:15:43.720 --> 0:15:46.560 Democratic socialists not really even sure what that is. But 0:15:47.080 --> 0:15:48.120 is that a national thing? 0:15:48.920 --> 0:15:51.640 Well again I think, I mean, it's definitely a thing 0:15:51.920 --> 0:15:54.600 in the urban cities. So what you've seen in LA, 0:15:54.840 --> 0:15:56.760 what you're seeing in Washington, DC, and you can hear 0:15:56.840 --> 0:16:01.120 in New York. So and again, what do democratic socialist 0:16:01.160 --> 0:16:04.600 stand for? I think it is pretty amorphous, honestly. But 0:16:04.880 --> 0:16:09.360 their their outreach, their grassroots, they're organizing, I mean, it 0:16:09.440 --> 0:16:11.800 has been you know, seller and as a result they 0:16:11.840 --> 0:16:15.160 are doing well in these cities. Again, I would just 0:16:15.280 --> 0:16:19.280 be were I would not extrapolate necessarily to national politics. 0:16:19.360 --> 0:16:23.320 New York City, LA, Washington, d C. Obviously very you know, 0:16:23.440 --> 0:16:24.720 very different. The only the other thing I think just 0:16:24.800 --> 0:16:27.760 to remember is that, like we haven't gotten the final 0:16:27.960 --> 0:16:31.880 voter turnout figures, but it's like ten percent of voters 0:16:32.000 --> 0:16:32.800 voted last night. 0:16:32.960 --> 0:16:34.200 If that okay, I get it. 0:16:34.240 --> 0:16:35.560 That forty two people voted. 0:16:36.960 --> 0:16:37.520 Were you one of them? 0:16:37.560 --> 0:16:40.720 Okay? But here's the sub sub headline in the Washington Post. 0:16:41.120 --> 0:16:45.480 How can Jeffries back candidates lose key primary races? How 0:16:45.560 --> 0:16:50.000 do the Jeffries How does a mainstream Democrat in Michigan 0:16:50.880 --> 0:16:55.120 adapt and adjust to this anger? This is Laura says, 0:16:55.480 --> 0:16:57.560 this anti establishment anger. 0:16:58.680 --> 0:17:00.320 Well, so again, I mean I think they'll try to 0:17:00.400 --> 0:17:02.280 tap into this. I mean, this is a theme. We're 0:17:02.360 --> 0:17:04.760 just seeing this. So whatever your labels you put on it, 0:17:05.200 --> 0:17:08.879 you're seeing that voters are angry about gas and groceries 0:17:09.000 --> 0:17:12.200 and housing and healthcare and now AI is the new boogeyman. 0:17:12.720 --> 0:17:15.040 And so you know, I think that what democrats who 0:17:15.040 --> 0:17:17.600 are moderate, who are winning and need to win and 0:17:17.680 --> 0:17:20.320 kind of purple, if not reddish districts, they'll try to 0:17:20.400 --> 0:17:22.560 kind of tap into the bigger themes and try to 0:17:22.560 --> 0:17:25.040 stay away from the labels. Now, of course, question if 0:17:25.080 --> 0:17:27.040 they can do that. Think Republicans are going to try 0:17:27.040 --> 0:17:30.800 to be smart about pinning Mamdani on the entire Democratic Party. 0:17:31.240 --> 0:17:33.120 As we know, Democrats are a big tent, so they'll 0:17:33.119 --> 0:17:35.159 think they'll try to they'll try to use that as 0:17:35.280 --> 0:17:36.399 their kind of rationalization. 0:17:36.560 --> 0:17:40.080 Please, So, most of our viewers and listeners were just 0:17:40.240 --> 0:17:43.440 enjoying the early early days of summer, but boy, the 0:17:43.560 --> 0:17:46.880 midterms are right around the corner. What's the feeling these 0:17:47.000 --> 0:17:49.040 days about how this might lay out in mid terms? 0:17:49.119 --> 0:17:53.560 Well, look, I think that Well, again, anti incumbency, I 0:17:53.600 --> 0:17:56.120 think this, and so you know, I would argue that Democrats, 0:17:56.200 --> 0:17:58.120 we are a casualty of this. In twenty twenty four, 0:17:58.640 --> 0:18:02.280 voters were angry. Then they put President Trump obviously pretty 0:18:02.320 --> 0:18:05.840 unequivocally into the White House. Republicans won both chambers. I 0:18:05.880 --> 0:18:07.200 think you're going to see a little bit of a 0:18:07.280 --> 0:18:11.200 reversal of that now the Democrats or Democrats probably winning 0:18:11.240 --> 0:18:13.840 the House. I think those Republicans will still keep the Senate. 0:18:14.200 --> 0:18:17.480 But again, I think that the overall theme is that 0:18:17.720 --> 0:18:22.639 the political establishment is not working for voters, and voters 0:18:22.680 --> 0:18:25.840 will take that out on either party, with all parties. 0:18:25.640 --> 0:18:28.640 With all your connections, with all your heritage to Washington. 0:18:29.280 --> 0:18:34.399 If there's a four box dilemma, the basic idea that 0:18:34.520 --> 0:18:38.320 if the Democrats mess this up mid term in presidential 0:18:38.440 --> 0:18:41.920 twenty eight, that the Republicans will win again. Can the 0:18:42.040 --> 0:18:46.680 Democrats get their act together and coalesce into a winning message? 0:18:47.040 --> 0:18:49.840 They have to be something other than just anti Trump. 0:18:50.320 --> 0:18:52.560 And because they are kind of a bunch of cats 0:18:52.600 --> 0:18:56.200 and dogs, a big umbrella party, I viewers, that's the history. 0:18:56.240 --> 0:18:57.840 Of course, it's a big tent. You know, this is 0:18:57.880 --> 0:19:00.159 sort of the heritage of the Democratic Party. You know 0:19:00.480 --> 0:19:05.119 very well, Tom. So you can they though, coalesce around 0:19:05.800 --> 0:19:09.480 several key themes or key messages that are not just 0:19:09.680 --> 0:19:12.160 anti Trump. That has been the glue for the party 0:19:12.200 --> 0:19:15.200 since twenty sixteen. I think it's a it's a pretty 0:19:15.280 --> 0:19:17.680 fragile base in order to win a launch. 0:19:17.720 --> 0:19:18.639 Can you come back tomorrow? 0:19:20.200 --> 0:19:23.840 Well, I promise, well, ye, we'll talk to thanks tomorrow. 0:19:23.920 --> 0:19:26.800 Let me caret. Thank you so much for that. Stay 0:19:26.840 --> 0:19:30.600 with us. More from Bloomberg Surveillance coming up after this. 0:19:37.960 --> 0:19:41.520 You're listening to the Bloomberg Surveillance podcast. Catch us live 0:19:41.640 --> 0:19:44.720 weekday afternoons from seven to ten am Eastern. Listen on 0:19:44.880 --> 0:19:48.160 Apple Karplay and Android Auto with the Bloomberg Business app, 0:19:48.440 --> 0:19:50.160 or watch us live on YouTube. 0:19:50.800 --> 0:19:56.000 Our guest here I'm Detroit, but also on his Cleveland Cavaliers. 0:19:56.640 --> 0:19:59.320 Jared Fleischer joins us right now the pet and Bogs 0:19:59.359 --> 0:20:02.359 with Bedrock Detroit. I want to talk about Detroit, but 0:20:02.480 --> 0:20:05.480 what I really want to talk about is Dan Gilbert. 0:20:05.800 --> 0:20:10.239 Like his father or grandfather lily washed cars. Yes, they 0:20:10.440 --> 0:20:15.200 started out classically with next to nothing. How did that 0:20:15.280 --> 0:20:18.680 affect you? Every day? That the big guy owns the 0:20:18.680 --> 0:20:22.800 Cleveland Cavalies and others, they there's an internal energy there 0:20:23.400 --> 0:20:24.000 like no other. 0:20:24.280 --> 0:20:27.480 I think Dan Gilbert represents the American dream, but also 0:20:27.600 --> 0:20:30.399 the best of America. You know, came from nothing. His 0:20:30.560 --> 0:20:32.520 parents owned a bar in a in a rough area 0:20:32.600 --> 0:20:35.919 of Detroit. That's how he grew up. Left himself up 0:20:35.960 --> 0:20:38.520 by the bootstraps, you know, went to Michigan State University, 0:20:38.920 --> 0:20:41.480 ran a little gambling room out of his dorm, gambling 0:20:41.560 --> 0:20:43.360 ring out of his dorm room to make some money 0:20:43.400 --> 0:20:45.119 when he was at MSU. This is this is a 0:20:45.119 --> 0:20:49.080 guy's a hustler. Started a little brick and mortar mortgage company, 0:20:49.680 --> 0:20:52.119 and it was the first to see the vision of 0:20:52.200 --> 0:20:56.920 bringing mortgages national and online. And really basically, you know, 0:20:57.000 --> 0:21:00.800 from basically is his basement, built the largest mortgage lender 0:21:00.840 --> 0:21:02.880 in the United States of America, bigger than the big banks, 0:21:02.920 --> 0:21:05.040 and took the profits from that and turned around Detroit 0:21:05.119 --> 0:21:05.760 and turned around. 0:21:06.119 --> 0:21:08.600 Ross Family in Miami. From day one, he gave it 0:21:08.760 --> 0:21:13.520 back population growth in Detroit in twenty twenty five, what's 0:21:13.600 --> 0:21:16.800 the final catalyst to get people in Gross Point to 0:21:16.920 --> 0:21:18.080 move back into Detroit? 0:21:18.480 --> 0:21:22.359 Before Dan, the last time Detroit grew is nineteen fifty seven. 0:21:22.680 --> 0:21:26.760 Detroit's peak population is one point nine million, trunk all 0:21:26.800 --> 0:21:29.399 the way to six hundred and thirty thousand. With Dan's 0:21:29.480 --> 0:21:32.760 investments in the city, it's growing for the first time 0:21:32.840 --> 0:21:36.320 starting in twenty twenty four. It's leading the state of 0:21:36.400 --> 0:21:38.960 Michigan in growth. In Dan's whole thesis is if we 0:21:39.080 --> 0:21:42.240 invest in place and we turned Detroit into a cool 0:21:42.320 --> 0:21:44.440 city we were talking earlier, making it like you know, 0:21:44.520 --> 0:21:47.119 Williamsburg in Brooklyn, where the young people want to be. 0:21:47.800 --> 0:21:49.680 It works. You create that kind of place the young 0:21:49.720 --> 0:21:51.840 people come. When you have talented young people, then you 0:21:51.960 --> 0:21:54.240 get business and you create a virtuous cycle. That's what 0:21:54.280 --> 0:21:55.760 we're seeing in Detroit and Cleveland. 0:21:56.200 --> 0:21:59.160 Talk to us about just the economic drivers of Detroit 0:21:59.240 --> 0:22:02.600 has many of our listeners and viewers, they'll think auto 0:22:02.680 --> 0:22:05.439 industry much like I think Texas energy. But it's different. 0:22:05.560 --> 0:22:05.679 Now. 0:22:05.840 --> 0:22:08.280