1 00:00:00,080 --> 00:00:12,960 Speaker 1: Ye. Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Jay Lee. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:28,159 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. To 5 00:00:28,200 --> 00:00:30,400 Speaker 1: the equity market in the United States, we are still 6 00:00:30,440 --> 00:00:33,879 Speaker 1: within one percent of an all time high. Will the 7 00:00:33,920 --> 00:00:37,280 Speaker 1: equity market find continued support from the fundamentals, both the 8 00:00:37,320 --> 00:00:39,080 Speaker 1: earnings and the data. I'm pleased to say here in 9 00:00:39,080 --> 00:00:42,560 Speaker 1: New York, Monamaha, John joins US now Alliance is Global Investors, 10 00:00:42,640 --> 00:00:45,639 Speaker 1: US investment strategist. Good morning to Mona. Good morning John. 11 00:00:45,760 --> 00:00:48,360 Speaker 1: So let's explore that question, shall we, and try and 12 00:00:48,400 --> 00:00:52,080 Speaker 1: answer it. Will we find support from the fundamentals? Yeah, 13 00:00:52,120 --> 00:00:54,360 Speaker 1: you know, I think the market, you know, year to 14 00:00:54,440 --> 00:00:59,280 Speaker 1: date up about from the December low up now, so 15 00:00:59,400 --> 00:01:02,480 Speaker 1: really uh to to get a next leg higher, we're 16 00:01:02,480 --> 00:01:05,760 Speaker 1: gonna have to see a really impressive set of fundamentals. 17 00:01:05,959 --> 00:01:07,959 Speaker 1: What we're looking at and where we're seeing signs of 18 00:01:08,000 --> 00:01:10,880 Speaker 1: optimism is probably more towards the second half of the year, 19 00:01:10,959 --> 00:01:15,199 Speaker 1: when not only China potentially rebounds um not only where 20 00:01:15,240 --> 00:01:18,520 Speaker 1: we might get some European stabilization and the US earning 21 00:01:18,560 --> 00:01:21,440 Speaker 1: story unfold. But some of the geopolitical tensions that we've 22 00:01:21,480 --> 00:01:25,399 Speaker 1: talked about um US China trade, maybe even something around 23 00:01:25,400 --> 00:01:28,160 Speaker 1: Brexit starts to clear up as well. So I think 24 00:01:28,200 --> 00:01:30,920 Speaker 1: in order to get another leg higher here, one we'd 25 00:01:30,920 --> 00:01:33,600 Speaker 1: be hopeful for some sort of consolidation. I think that 26 00:01:33,640 --> 00:01:36,240 Speaker 1: would be healthy. Uh. And then two, we'd really need 27 00:01:36,319 --> 00:01:40,600 Speaker 1: to see the global picture improve, the global the global 28 00:01:40,680 --> 00:01:46,400 Speaker 1: picture improve. But the fact is it's been a stunning rally. 29 00:01:46,680 --> 00:01:48,880 Speaker 1: J and J earnings just came out. I guess they 30 00:01:48,920 --> 00:01:51,680 Speaker 1: were midpoint John, you know, not much to talk about there. 31 00:01:51,720 --> 00:01:55,160 Speaker 1: They delivered boring average goods. Fine, great, Great. Are you, 32 00:01:55,240 --> 00:01:58,800 Speaker 1: as a strategist going to micro analyze every earnings report 33 00:01:59,080 --> 00:02:03,520 Speaker 1: the revenue and margin dynamics? You know? I think generally 34 00:02:03,960 --> 00:02:07,000 Speaker 1: the earnings picture here in the US, where we were 35 00:02:07,000 --> 00:02:10,840 Speaker 1: in the last quarter, revisions were moving downward, downward, downward. 36 00:02:11,320 --> 00:02:13,760 Speaker 1: Now we are starting to see some basing in that, 37 00:02:13,880 --> 00:02:16,640 Speaker 1: and we're seeing Q one earnings, which started in earnest 38 00:02:16,680 --> 00:02:20,440 Speaker 1: last Friday, really beating expectations here. So Q one expectations 39 00:02:20,440 --> 00:02:22,679 Speaker 1: are negative four percent, probably going to get closer to 40 00:02:23,200 --> 00:02:26,760 Speaker 1: It's an expectation function. And as Pharaoh knows, it's out 41 00:02:26,840 --> 00:02:31,000 Speaker 1: six months up twelve months. What's the earnings view out 42 00:02:31,080 --> 00:02:34,320 Speaker 1: six months or twelve months. It's going to drive John's 43 00:02:34,320 --> 00:02:37,520 Speaker 1: two oh one k back to excellence. Yeah, you know, 44 00:02:37,560 --> 00:02:39,880 Speaker 1: I think in the US we're looking at four to 45 00:02:39,960 --> 00:02:42,480 Speaker 1: six percent earnings growth this year. And it's interesting when 46 00:02:42,520 --> 00:02:45,960 Speaker 1: you run the analysis different earnings environments, the type of 47 00:02:46,080 --> 00:02:48,600 Speaker 1: S and P returns you can get. In this negative 48 00:02:48,639 --> 00:02:53,400 Speaker 1: tent positive tent earnings growth environment, you actually get high 49 00:02:53,440 --> 00:02:56,799 Speaker 1: single digits mid team returns. It's only when you're negative 50 00:02:56,840 --> 00:03:00,480 Speaker 1: negative earnings that you get this negative What just John 51 00:03:00,639 --> 00:03:04,240 Speaker 1: is so important. You can have flat earnings and stocks 52 00:03:04,280 --> 00:03:06,600 Speaker 1: go up and there's silence in the room. How can 53 00:03:06,639 --> 00:03:09,400 Speaker 1: that be? But there it is. That's what the math says. 54 00:03:09,520 --> 00:03:10,960 Speaker 1: You know where the sonets in the room right now 55 00:03:11,080 --> 00:03:13,880 Speaker 1: is with the financials. Some of these names can report 56 00:03:14,160 --> 00:03:17,880 Speaker 1: record quarterly earnings and we've done even sniff. We just 57 00:03:18,040 --> 00:03:19,560 Speaker 1: sort of look away and it doesn't even matter. Bank 58 00:03:19,600 --> 00:03:23,120 Speaker 1: for America coming out this morning with record quarterly earnings. 59 00:03:23,120 --> 00:03:27,080 Speaker 1: The question still is, Okay, that's what we expect. Where's 60 00:03:27,080 --> 00:03:29,520 Speaker 1: the growth and what am I willing to pay for 61 00:03:29,560 --> 00:03:31,800 Speaker 1: these earnings. What's the answer to that. Yeah, you know, 62 00:03:31,800 --> 00:03:34,000 Speaker 1: I think financials is a tough one because you have 63 00:03:34,160 --> 00:03:36,600 Speaker 1: the flattening yield curve dynamic that's been going on from 64 00:03:36,600 --> 00:03:39,760 Speaker 1: nearly five years now. Um, when you look at rates 65 00:03:39,800 --> 00:03:43,480 Speaker 1: coming down, yields coming down actually supports many other sectors 66 00:03:43,560 --> 00:03:47,760 Speaker 1: except the banks. Banks don't thrive necessarily in a flattening 67 00:03:47,800 --> 00:03:50,400 Speaker 1: yield curve environment, and certainly when when yields are lower 68 00:03:50,440 --> 00:03:53,160 Speaker 1: in some cases around the world, negative not great for 69 00:03:53,200 --> 00:03:56,440 Speaker 1: banks here, and so I think that's the story behind 70 00:03:56,520 --> 00:03:59,560 Speaker 1: why financials have lagged somewhat. I think now we may 71 00:03:59,640 --> 00:04:02,920 Speaker 1: see a bit of catch up here, given that earnings 72 00:04:03,160 --> 00:04:05,720 Speaker 1: are coming out ahead of expectations. But I think from 73 00:04:05,760 --> 00:04:09,920 Speaker 1: a sector perspective, we see opportunities beyond financials, and in fact, 74 00:04:10,360 --> 00:04:11,960 Speaker 1: you know, when we look at where you want to 75 00:04:11,960 --> 00:04:15,000 Speaker 1: go for growth in a lower growth environment, we continue 76 00:04:15,040 --> 00:04:18,520 Speaker 1: to see technology and discretionary in particular, where the U 77 00:04:18,560 --> 00:04:21,240 Speaker 1: S consumer seems to be quite supported here. Uh. The 78 00:04:21,240 --> 00:04:23,600 Speaker 1: other hand of our what we call our Barbell approach 79 00:04:23,960 --> 00:04:26,800 Speaker 1: is really healthcare and staples. Those are sectors that have 80 00:04:26,880 --> 00:04:29,159 Speaker 1: lagged this year but really are defensive. Do well in 81 00:04:29,160 --> 00:04:30,960 Speaker 1: a slowing growth environment. To be clear here, though, you 82 00:04:31,000 --> 00:04:35,240 Speaker 1: don't buy the bank bologument, the financial valuations are going 83 00:04:35,240 --> 00:04:38,279 Speaker 1: to rewrite higher, you know, I think it'll be tough 84 00:04:38,400 --> 00:04:42,719 Speaker 1: in an environment where yields are going lower potentially and 85 00:04:42,760 --> 00:04:44,840 Speaker 1: the FED is off the table for two thousand nineteen, 86 00:04:45,320 --> 00:04:47,479 Speaker 1: many are expecting their right next move to be a 87 00:04:47,560 --> 00:04:50,040 Speaker 1: rate cut. So I think that's a tough environment for banks. 88 00:04:50,200 --> 00:04:53,240 Speaker 1: I do buy the US consumer story, which I think 89 00:04:53,440 --> 00:04:55,680 Speaker 1: it is a positive for banks. So let's talk about 90 00:04:55,680 --> 00:04:58,400 Speaker 1: the regional till that you're looking. At the moment, there's 91 00:04:58,400 --> 00:05:00,640 Speaker 1: a lot of people getting excited about the very small 92 00:05:01,200 --> 00:05:05,039 Speaker 1: green shoots appearing in Europe, and slowly I can feel 93 00:05:05,080 --> 00:05:08,960 Speaker 1: the bearish sentiment capitulating as the year progresses. Where do 94 00:05:09,000 --> 00:05:12,159 Speaker 1: you stand on that, that whole Europe versus US debate 95 00:05:12,240 --> 00:05:13,960 Speaker 1: that we've had for the last couple of years. Yeah, 96 00:05:13,960 --> 00:05:16,480 Speaker 1: I know. It's interesting. We came into the year with 97 00:05:16,520 --> 00:05:18,920 Speaker 1: another very clear barbell. On one hand of that barbell 98 00:05:19,040 --> 00:05:21,240 Speaker 1: was the US best on the block from a developed 99 00:05:21,279 --> 00:05:24,120 Speaker 1: market perspective. Other hand of that barbell was China and 100 00:05:24,200 --> 00:05:28,839 Speaker 1: parts of em Now, China, you know, has performed phenomenally 101 00:05:28,920 --> 00:05:33,640 Speaker 1: this year, UM markets up plus we're looking at Oh no, 102 00:05:33,720 --> 00:05:36,520 Speaker 1: I'm just gonna say quickly on the European question, we 103 00:05:36,560 --> 00:05:39,040 Speaker 1: are you know what John was alluding to. We're starting 104 00:05:39,080 --> 00:05:42,000 Speaker 1: to kind of come around to as well. Europe may 105 00:05:42,040 --> 00:05:45,120 Speaker 1: benefit if there is a resolution to trade. It's a 106 00:05:45,120 --> 00:05:49,760 Speaker 1: great source of dividends potentially and clearly has lagged the 107 00:05:49,800 --> 00:05:53,440 Speaker 1: markets and from evaluation perspective, starting to look somewhat interesting, 108 00:05:53,640 --> 00:05:56,000 Speaker 1: but again very data dependent year to date. I mean 109 00:05:56,080 --> 00:05:59,320 Speaker 1: Chinese stocks, this is in US dollars, John, they're up 110 00:05:59,360 --> 00:06:03,200 Speaker 1: thirty one percent. It maybe they're up if you look 111 00:06:03,200 --> 00:06:06,440 Speaker 1: at another is that a real stock market? I mean, 112 00:06:06,480 --> 00:06:10,000 Speaker 1: does Alians actually say to people China to invest in 113 00:06:10,120 --> 00:06:14,799 Speaker 1: China stocks? Is actually normal? Biddess dynamics, you know the 114 00:06:14,800 --> 00:06:17,279 Speaker 1: they've opened up their a shares market that we think 115 00:06:17,360 --> 00:06:19,560 Speaker 1: is a real story. UM will become a larger and 116 00:06:19,640 --> 00:06:21,840 Speaker 1: larger part of the m c I index. We agree 117 00:06:21,880 --> 00:06:24,560 Speaker 1: though a lot of the Chinese equity market retail driven, 118 00:06:24,640 --> 00:06:26,839 Speaker 1: and so that can be more volatile than than the 119 00:06:26,880 --> 00:06:29,440 Speaker 1: average market. Okay, Mona, thank you so much for coming 120 00:06:29,480 --> 00:06:32,840 Speaker 1: and just lights from Alians. But today I like John 121 00:06:32,839 --> 00:06:35,800 Speaker 1: what you're framing there between the europe US dynamic, which 122 00:06:35,920 --> 00:06:54,080 Speaker 1: means almost a May June story. George Cassidy with this 123 00:06:54,240 --> 00:06:57,320 Speaker 1: RBC Campital Markets. His research note is, you know, the 124 00:06:57,320 --> 00:07:00,599 Speaker 1: occasional small bank, lots of regional work, and he doesn't 125 00:07:00,600 --> 00:07:04,120 Speaker 1: look at the two big defails like Bank America gerod. 126 00:07:04,200 --> 00:07:06,640 Speaker 1: If I could go to one slide in the Bank 127 00:07:06,640 --> 00:07:09,560 Speaker 1: of America first presentation, the power point, I'm going to 128 00:07:09,640 --> 00:07:14,200 Speaker 1: guess it's twenty pages. The digital build out page is 129 00:07:14,400 --> 00:07:20,320 Speaker 1: just extraordinary. Are we underestimating the speed of digital growth 130 00:07:20,480 --> 00:07:24,520 Speaker 1: within American banking? Tommy, you bring up a really good 131 00:07:24,560 --> 00:07:27,640 Speaker 1: point because I was looking at that page as well 132 00:07:27,840 --> 00:07:30,840 Speaker 1: this morning, and what took my breath away was the 133 00:07:31,360 --> 00:07:35,440 Speaker 1: person to person payment. When I sent John Farrell money, 134 00:07:35,480 --> 00:07:40,080 Speaker 1: you know I lose on Liverpool, I sent him in 135 00:07:40,240 --> 00:07:42,920 Speaker 1: rather having to write him and check. And so that 136 00:07:42,920 --> 00:07:46,360 Speaker 1: that growth has been very impressive. And I think you 137 00:07:46,480 --> 00:07:49,080 Speaker 1: put your thumb on something here. As much as there 138 00:07:49,200 --> 00:07:52,840 Speaker 1: was a threat from the you know, tech area of 139 00:07:52,920 --> 00:07:56,000 Speaker 1: the financial tech companies two or three years ago, companies 140 00:07:56,040 --> 00:07:59,240 Speaker 1: like Bank America, JP Morgan, even some of our big 141 00:07:59,280 --> 00:08:03,160 Speaker 1: regionals are spending incredible amounts the money and are at 142 00:08:03,200 --> 00:08:06,000 Speaker 1: the cutting edge. And Bank America's right there, as evidenced 143 00:08:06,000 --> 00:08:08,920 Speaker 1: by slide five. I mean, Jared, compared to say, the 144 00:08:08,960 --> 00:08:11,600 Speaker 1: rest of Europe, the United States well behind on this 145 00:08:11,680 --> 00:08:14,040 Speaker 1: kind of initiative. That's still people in this country that 146 00:08:14,080 --> 00:08:17,520 Speaker 1: regularly pay their rent with the check and the check 147 00:08:17,560 --> 00:08:19,640 Speaker 1: book is something that many people in Europe don't have 148 00:08:19,680 --> 00:08:21,920 Speaker 1: in their pocket anymore, Gerard. So I just wonder how 149 00:08:21,960 --> 00:08:24,800 Speaker 1: much growth is left here. And it sounds like a law. John, 150 00:08:24,880 --> 00:08:27,520 Speaker 1: You hear a great point. I'm always when I travel 151 00:08:27,760 --> 00:08:30,480 Speaker 1: over to Europe, I'm always amazed at how much further 152 00:08:30,600 --> 00:08:33,360 Speaker 1: along they are. And one thing I remind myself is 153 00:08:33,360 --> 00:08:37,360 Speaker 1: that we have legacy systems in our banking industry, as 154 00:08:37,440 --> 00:08:40,200 Speaker 1: you well know, and because we have fifty seven hundred 155 00:08:40,200 --> 00:08:42,840 Speaker 1: banks still, you've got to convert all fifties seven hundred 156 00:08:42,920 --> 00:08:45,680 Speaker 1: over to these new systems. It takes time, and as 157 00:08:45,840 --> 00:08:48,920 Speaker 1: why Canada and Europe are well ahead of us in 158 00:08:49,000 --> 00:08:52,080 Speaker 1: our banking technology. But to your point, there's a lot 159 00:08:52,160 --> 00:08:55,240 Speaker 1: of growth coming from our banks in this area, So jareded, 160 00:08:55,320 --> 00:08:57,040 Speaker 1: loads of growth coming. We've got to talk about a 161 00:08:57,040 --> 00:08:59,880 Speaker 1: complete bank. Just how much this moves the overall dial? 162 00:09:00,040 --> 00:09:03,080 Speaker 1: Does they shifted? It's all I think over time it 163 00:09:03,160 --> 00:09:06,000 Speaker 1: does because as you know, there will be a less 164 00:09:06,040 --> 00:09:09,600 Speaker 1: of a need for branches, and branches is probably where 165 00:09:09,600 --> 00:09:12,560 Speaker 1: the branch delivery channel is one of the most expensive 166 00:09:12,920 --> 00:09:16,640 Speaker 1: parts of a retail bank. And because of this technology, 167 00:09:17,280 --> 00:09:19,640 Speaker 1: we just won't need as many branches over the next 168 00:09:19,640 --> 00:09:23,240 Speaker 1: ten years, and those branches will transport themselves more into 169 00:09:23,280 --> 00:09:28,120 Speaker 1: sales centers and doing everyday transactions. What is the job 170 00:09:28,200 --> 00:09:32,200 Speaker 1: dynamic when all these people say we need expense control? Right? 171 00:09:32,320 --> 00:09:35,719 Speaker 1: Is Gerardcassity looking at any given big bank. Let's say, 172 00:09:35,720 --> 00:09:39,240 Speaker 1: if a round number a hundred and fifty employees, is 173 00:09:39,280 --> 00:09:42,319 Speaker 1: it a hundred year a hundred there? Is it divisions 174 00:09:42,320 --> 00:09:44,600 Speaker 1: where they're going to take out five or ten thousand 175 00:09:45,120 --> 00:09:47,360 Speaker 1: or are we missing the point? It could be something bigger. 176 00:09:48,240 --> 00:09:50,880 Speaker 1: I think it's a hundred here and a hundred there, 177 00:09:50,920 --> 00:09:54,240 Speaker 1: because you might remember tom coming out of the financial crisis, 178 00:09:55,040 --> 00:09:58,320 Speaker 1: the banks had thousands of employees working on bad credit, 179 00:09:58,720 --> 00:10:01,120 Speaker 1: and as you know, credit quality today is very strong, 180 00:10:01,440 --> 00:10:04,400 Speaker 1: and so those people were either let go or moved 181 00:10:04,400 --> 00:10:07,040 Speaker 1: into other areas. So I think what you'll see it 182 00:10:07,080 --> 00:10:10,960 Speaker 1: won't be entire divisions. Technology I think will complement the 183 00:10:11,040 --> 00:10:14,000 Speaker 1: human element of it. But it will change, no doubt 184 00:10:14,000 --> 00:10:16,240 Speaker 1: about it, over the next ten years. Let's get the 185 00:10:16,240 --> 00:10:18,320 Speaker 1: earning school counts now. He was a really rough session 186 00:10:18,360 --> 00:10:21,320 Speaker 1: for Goldman yesterday. The stock was down three point eight percent. 187 00:10:21,760 --> 00:10:24,440 Speaker 1: Sock GM coming out cutting the price target for Goldman 188 00:10:24,480 --> 00:10:27,840 Speaker 1: to a street love once seventy. We closed yesterday just 189 00:10:27,960 --> 00:10:31,160 Speaker 1: south of two hundred. What's the story there? I think 190 00:10:31,200 --> 00:10:33,480 Speaker 1: a big loser of this quarterly earning season so far. 191 00:10:34,120 --> 00:10:37,320 Speaker 1: I would say that because they're so concentrated in the 192 00:10:37,360 --> 00:10:40,319 Speaker 1: capital markets. We all know from all the big banks, 193 00:10:40,679 --> 00:10:43,400 Speaker 1: trading revenues were down year of a year, whether it 194 00:10:43,520 --> 00:10:46,600 Speaker 1: was an equity or fick. But because they don't have 195 00:10:46,640 --> 00:10:49,760 Speaker 1: the diversity of revenues of JP Morgan, Bank America and 196 00:10:49,880 --> 00:10:54,640 Speaker 1: City Group, their results were more concentrated in capital markets. 197 00:10:54,880 --> 00:10:58,680 Speaker 1: And even those diversified revenue companies like a Bank America today, 198 00:10:58,960 --> 00:11:01,640 Speaker 1: their revenues were acted by the market. So I think 199 00:11:01,679 --> 00:11:05,800 Speaker 1: you're right Goldman was affected more because they're more concentrated 200 00:11:05,840 --> 00:11:08,280 Speaker 1: in that business. Jeri Cassie, if you didn't know the name, 201 00:11:08,280 --> 00:11:11,120 Speaker 1: I'm glad. John brought up Golden Sacks ten year track 202 00:11:11,160 --> 00:11:14,600 Speaker 1: record with dividend five point four nine percent a year 203 00:11:15,400 --> 00:11:19,440 Speaker 1: in any other industry. That's just totally unacceptable. What's the 204 00:11:19,480 --> 00:11:23,800 Speaker 1: magic of Goldman Sacks at five point four per year? 205 00:11:24,920 --> 00:11:28,200 Speaker 1: I think it still has amongst the trading community, in 206 00:11:28,240 --> 00:11:31,960 Speaker 1: particular the hedge funds. UM. They still have an attraction. 207 00:11:32,080 --> 00:11:35,439 Speaker 1: People know that they can trade. This name is very liquid, 208 00:11:35,720 --> 00:11:38,800 Speaker 1: it's volatile because of the capital markets. It's not a 209 00:11:39,480 --> 00:11:42,160 Speaker 1: boring bank to say say the least. So I think 210 00:11:42,240 --> 00:11:45,360 Speaker 1: that's the attraction rather than a long term you know 211 00:11:45,480 --> 00:11:47,920 Speaker 1: investor who wants to buy and hold here's your valuable 212 00:11:48,000 --> 00:11:50,280 Speaker 1: drug cassidy, thank you so much. After Bank of American 213 00:11:50,280 --> 00:12:07,520 Speaker 1: and RBC cap, let's bring in bloom Bag intelligence, maybe 214 00:12:07,520 --> 00:12:10,600 Speaker 1: analyst either Rack and Athan on Netflix armies which come 215 00:12:10,679 --> 00:12:16,640 Speaker 1: after the closing about Gaithera subscriptions. What would they look like? Yes, yes, 216 00:12:16,720 --> 00:12:20,000 Speaker 1: it is always a story, um a subscriber story, and 217 00:12:20,040 --> 00:12:22,400 Speaker 1: as always the focus will be on some sub numbers. 218 00:12:22,920 --> 00:12:26,840 Speaker 1: Management has guided to about eight point nine million new 219 00:12:26,840 --> 00:12:29,840 Speaker 1: additions for this quarter, about one point six million in 220 00:12:29,960 --> 00:12:33,160 Speaker 1: the U S and the rest international. But I think 221 00:12:33,160 --> 00:12:36,600 Speaker 1: the bigger question John this quarter is really going to 222 00:12:36,679 --> 00:12:40,120 Speaker 1: be the two que guide, uh that there really two concerns. 223 00:12:40,200 --> 00:12:43,160 Speaker 1: I think that the market is looking at one, is 224 00:12:43,200 --> 00:12:46,720 Speaker 1: the rising competition, especially with a very aggressive price point 225 00:12:46,920 --> 00:12:49,800 Speaker 1: coming in from the Disney Plus service. Uh and then 226 00:12:49,880 --> 00:12:53,200 Speaker 1: a thirteen to eighteen percent price hike that is actually 227 00:12:53,240 --> 00:12:57,200 Speaker 1: taking effect for domestic subscribers in two que So gather 228 00:12:57,440 --> 00:12:59,920 Speaker 1: how difficult historically is it to get any kind of 229 00:13:00,000 --> 00:13:02,719 Speaker 1: clarity of what's about to happen in the future where 230 00:13:02,760 --> 00:13:07,120 Speaker 1: Netflix adjust priced. We have pretty noisy quarters. Um, yeah, 231 00:13:07,200 --> 00:13:10,320 Speaker 1: it is. There has been some volatility in the past, 232 00:13:10,640 --> 00:13:15,000 Speaker 1: but actually the last time that they instituted a price increase, 233 00:13:15,080 --> 00:13:17,880 Speaker 1: we did not see a whole lot of turn So 234 00:13:18,000 --> 00:13:21,600 Speaker 1: kind of just showing how with the breadth, the quality 235 00:13:21,679 --> 00:13:25,559 Speaker 1: and the quantity of their content um users are willing 236 00:13:25,600 --> 00:13:31,400 Speaker 1: to digest even substantial price hikes. Netflix is Netflix, But 237 00:13:31,480 --> 00:13:34,000 Speaker 1: it's also to me a mystery. We sort of vastly 238 00:13:34,080 --> 00:13:37,520 Speaker 1: understand the sweat at Disney, the sweat at the old 239 00:13:37,520 --> 00:13:41,800 Speaker 1: Time Warner, etcetera, and HBO management change. How is Netflix 240 00:13:42,080 --> 00:13:46,320 Speaker 1: management responding to everybody wanting to be part of their 241 00:13:46,360 --> 00:13:50,079 Speaker 1: streaming world? So Netflix has I mean they've they've been 242 00:13:50,120 --> 00:13:53,440 Speaker 1: asked this question quartering and quarter out, and they've always 243 00:13:53,520 --> 00:13:56,960 Speaker 1: kind of downplayed the competitive threat. I mean at the 244 00:13:57,040 --> 00:14:00,680 Speaker 1: end of the day, Tom, Netflix offers consumers and a 245 00:14:00,840 --> 00:14:05,240 Speaker 1: very compelling entertainment experience at a relatively low cost, without 246 00:14:05,280 --> 00:14:08,480 Speaker 1: commercials and on any device. And if you look at 247 00:14:08,520 --> 00:14:12,760 Speaker 1: the global market and the secular shift to streaming, they're 248 00:14:12,760 --> 00:14:16,800 Speaker 1: relatively underpenetrated. And that's something that you know, Netflix management 249 00:14:16,880 --> 00:14:20,120 Speaker 1: drives home, quadring and quarter out. Okay, so let's talk 250 00:14:20,120 --> 00:14:22,800 Speaker 1: about this sentulist shift to streaming. Let's talk about what 251 00:14:22,920 --> 00:14:24,920 Speaker 1: is ultimately driving it. I can tell you from my 252 00:14:24,920 --> 00:14:28,240 Speaker 1: own personal perspective, what drove me to cut the cord 253 00:14:28,680 --> 00:14:31,240 Speaker 1: was because it costs less just to buy Hulu and 254 00:14:31,280 --> 00:14:33,480 Speaker 1: to have all the channels on that. We're now going 255 00:14:33,520 --> 00:14:36,400 Speaker 1: towards this world where I need Hulu, Disney plus Netflix, 256 00:14:36,520 --> 00:14:39,320 Speaker 1: HBO am I just going back to the cost of 257 00:14:39,400 --> 00:14:43,720 Speaker 1: cable again. Yeah, I mean, you know that is kind 258 00:14:43,760 --> 00:14:46,520 Speaker 1: of becoming an existential question. But I think what's going 259 00:14:46,600 --> 00:14:50,480 Speaker 1: to happen, especially with the new Disney services, it might 260 00:14:50,560 --> 00:14:54,640 Speaker 1: actually end up accelerating cord cutting a little bit. At 261 00:14:54,680 --> 00:14:56,720 Speaker 1: the end of the day. I mean, there are there's 262 00:14:56,760 --> 00:15:00,440 Speaker 1: a whole plethora of services out there, but once the 263 00:15:00,560 --> 00:15:03,080 Speaker 1: dust settles, stay in the next two to three years, time. 264 00:15:03,120 --> 00:15:04,880 Speaker 1: I think what we're going to see is they're going 265 00:15:04,960 --> 00:15:07,400 Speaker 1: to be winners and losers. But I see both both 266 00:15:07,480 --> 00:15:12,320 Speaker 1: Netflix and Disney emerging as winners. What about the news side? 267 00:15:12,440 --> 00:15:16,240 Speaker 1: You know all the YouTube TV is John mentioned Hulu 268 00:15:16,560 --> 00:15:19,760 Speaker 1: and and and all those do they compete against each other? 269 00:15:19,840 --> 00:15:24,160 Speaker 1: Are they essentially monopolistic activity? So what we've actually seen 270 00:15:24,200 --> 00:15:26,680 Speaker 1: so those tom are what we refer to as the 271 00:15:26,800 --> 00:15:30,240 Speaker 1: virtual m v P d s or they're basically live 272 00:15:30,360 --> 00:15:34,760 Speaker 1: TV services over the internet. Um, they have those services 273 00:15:34,800 --> 00:15:38,000 Speaker 1: have managed to rack up about eight million subscribers so far, 274 00:15:38,080 --> 00:15:41,160 Speaker 1: which is which is a pretty substantial number. But we've 275 00:15:41,240 --> 00:15:45,040 Speaker 1: also seen but they're they're essentially not making any money. 276 00:15:45,600 --> 00:15:48,360 Speaker 1: Uh and at some point, and we've actually seen this, 277 00:15:48,760 --> 00:15:50,920 Speaker 1: direct TV now and some of the other services have 278 00:15:51,040 --> 00:15:54,400 Speaker 1: been raising prices gradually and with that there has been 279 00:15:54,440 --> 00:15:58,320 Speaker 1: some increased churn. So I'm not sure everything is hunky 280 00:15:58,400 --> 00:16:02,200 Speaker 1: dory on you know, the school TV services front, Jennifer. 281 00:16:02,400 --> 00:16:05,200 Speaker 1: I think what she just said there's absolutely critical and 282 00:16:05,200 --> 00:16:09,560 Speaker 1: and and that we're not sure it's all new territory. Yeah, 283 00:16:10,200 --> 00:16:12,200 Speaker 1: just that simple. I mean, how many soccer games are 284 00:16:12,200 --> 00:16:15,760 Speaker 1: you watching a weekend? John? Two or three? Oh? You lie, 285 00:16:15,920 --> 00:16:20,800 Speaker 1: you're watching five six three Max. Okay, I mean sports 286 00:16:20,920 --> 00:16:23,360 Speaker 1: get very quickly her. Sports is still a big draw 287 00:16:23,480 --> 00:16:27,640 Speaker 1: with YouTube TV right. Sports is absolutely a big drawing 288 00:16:27,760 --> 00:16:30,280 Speaker 1: And and um, you know that was the whole bed 289 00:16:30,400 --> 00:16:32,840 Speaker 1: that Fox made when they kind of sold their entertainment 290 00:16:32,880 --> 00:16:37,480 Speaker 1: assets but kept sports and kept news writes to catch 291 00:16:37,520 --> 00:16:39,480 Speaker 1: you with your great update, gething Rock and A and 292 00:16:39,520 --> 00:16:42,400 Speaker 1: then Bloomberg Intelligence media analysts. We can't be down to 293 00:16:42,480 --> 00:16:58,280 Speaker 1: Netflix earnings coming after the closing Bolt MATCHI Zeddi with 294 00:16:58,360 --> 00:17:02,000 Speaker 1: US Chief Fields Economists doing your bank. And the joy 295 00:17:02,160 --> 00:17:05,000 Speaker 1: of his research report is it is beyond loaded, not 296 00:17:05,040 --> 00:17:08,320 Speaker 1: only with charts but with intelligence charts. It's like a 297 00:17:08,440 --> 00:17:12,800 Speaker 1: it's like a you know, three hour interview happening right now. Um, John, 298 00:17:12,880 --> 00:17:15,399 Speaker 1: I want to go to something pretty obscure mental lozette 299 00:17:15,480 --> 00:17:19,280 Speaker 1: to begin with. You really slice and dice inventory dynamics 300 00:17:19,320 --> 00:17:24,480 Speaker 1: and business investment. Exactly where are the inventories of American 301 00:17:24,520 --> 00:17:28,560 Speaker 1: business right now? Yeah, you're you're absolutely right. I think 302 00:17:28,560 --> 00:17:31,359 Speaker 1: it's really important for the near term growth outlook, UM, 303 00:17:31,560 --> 00:17:34,720 Speaker 1: on some measures inventories. You know that we've had a 304 00:17:34,800 --> 00:17:39,119 Speaker 1: recently big inventory build in the back half of last year. Um, 305 00:17:39,200 --> 00:17:41,840 Speaker 1: and some people I think have built in an inventory 306 00:17:41,920 --> 00:17:44,440 Speaker 1: drag on growth in the first half of this year. 307 00:17:44,800 --> 00:17:46,760 Speaker 1: When we look at it, it doesn't look like it's 308 00:17:46,800 --> 00:17:50,840 Speaker 1: something that should significantly way on production. Instead, it looks 309 00:17:50,880 --> 00:17:55,080 Speaker 1: to us like you had a big import increase ahead 310 00:17:55,119 --> 00:17:58,919 Speaker 1: of people that were expecting tariffs UM and that that 311 00:17:59,080 --> 00:18:02,000 Speaker 1: really has not built into manufacturing inventories. And if you 312 00:18:02,040 --> 00:18:05,359 Speaker 1: look at the I s M, when manufacturing firms don't 313 00:18:05,440 --> 00:18:07,760 Speaker 1: think that their inventories are too high at this point. 314 00:18:08,520 --> 00:18:10,560 Speaker 1: So we do not see a big inventory drag coming 315 00:18:10,840 --> 00:18:13,760 Speaker 1: in the coming quotas from from the US. And as 316 00:18:13,800 --> 00:18:15,080 Speaker 1: a result of that, I think we're a bit above 317 00:18:15,119 --> 00:18:17,680 Speaker 1: consensus on on US growth. We we expect two point 318 00:18:17,680 --> 00:18:20,440 Speaker 1: three percent growth this year. We're consensus is probably a 319 00:18:20,440 --> 00:18:23,320 Speaker 1: little bit closer to two looking at this year in 320 00:18:23,400 --> 00:18:25,840 Speaker 1: our survey, we've got it about two point four for 321 00:18:25,880 --> 00:18:28,680 Speaker 1: the median estimate going into next year. Is when a 322 00:18:28,720 --> 00:18:31,560 Speaker 1: lot of people see the deceleration. Matt one point nine 323 00:18:31,560 --> 00:18:37,000 Speaker 1: percent the median estimate there, what's we have some something 324 00:18:37,119 --> 00:18:39,520 Speaker 1: very similar to that. I think you know, most people 325 00:18:39,560 --> 00:18:42,639 Speaker 1: are looking out to they're expecting a modest fiscal drag 326 00:18:43,359 --> 00:18:47,119 Speaker 1: versus the positive fiscal impulse you had this year, there's 327 00:18:47,359 --> 00:18:51,040 Speaker 1: some delay in the tightenings from the said which can 328 00:18:51,240 --> 00:18:54,159 Speaker 1: take about eighteen months to work its way through the system, 329 00:18:54,200 --> 00:18:57,080 Speaker 1: and so we have one nine percent growth again next year. 330 00:18:57,359 --> 00:18:59,399 Speaker 1: I think more maybe more interestingly as you go out 331 00:18:59,440 --> 00:19:01,560 Speaker 1: to one, which is a very long time from now. 332 00:19:02,200 --> 00:19:04,000 Speaker 1: But I think a lot of people expect a continued 333 00:19:04,040 --> 00:19:06,879 Speaker 1: deceleration in the US and global economy. We actually have 334 00:19:06,880 --> 00:19:10,600 Speaker 1: to pick up. And I think the reason is with 335 00:19:10,640 --> 00:19:14,240 Speaker 1: the Fed on hold, with them not getting to restrictive stance, 336 00:19:14,680 --> 00:19:17,480 Speaker 1: and with the fiscal not being either a strong either 337 00:19:17,600 --> 00:19:19,840 Speaker 1: driver or a a drag. There's really no good reason, I 338 00:19:19,840 --> 00:19:23,000 Speaker 1: don't think for the economy to deviate materially from two. 339 00:19:23,480 --> 00:19:26,400 Speaker 1: You buried the punchline. Did I hear you say next 340 00:19:26,480 --> 00:19:31,399 Speaker 1: year one point nine? We do. Yeah, if you add 341 00:19:31,440 --> 00:19:34,920 Speaker 1: on any kind of Peter Hooper Deutsche Bank inflation calculation, 342 00:19:35,400 --> 00:19:38,800 Speaker 1: you're talking about a sub four percent nominal GDP. Right, 343 00:19:39,880 --> 00:19:42,200 Speaker 1: that's correct? Is now? You studied this at u c 344 00:19:42,400 --> 00:19:44,040 Speaker 1: l A. You wanted they got a library out at 345 00:19:44,080 --> 00:19:46,520 Speaker 1: U c l A. Folks like Game of Thrones. You 346 00:19:46,560 --> 00:19:48,399 Speaker 1: went into the library U c l A. Is there 347 00:19:48,440 --> 00:19:52,320 Speaker 1: any politician in the history of mankind that can deal 348 00:19:52,400 --> 00:19:55,800 Speaker 1: with a four percent or less nominal g d P, 349 00:19:56,400 --> 00:19:58,680 Speaker 1: don't they By definition they have to always revert to 350 00:19:58,760 --> 00:20:03,679 Speaker 1: fiscal expanse. Yeah, I think you know, there is a 351 00:20:03,680 --> 00:20:06,000 Speaker 1: new normal in terms of thinking about growth, both on 352 00:20:06,040 --> 00:20:10,320 Speaker 1: the real and the nominal side. Um Whereas historically potential 353 00:20:10,359 --> 00:20:14,000 Speaker 1: growth was three above, we now take a potential growth 354 00:20:14,000 --> 00:20:16,639 Speaker 1: in real terms closer to two percent. And so along 355 00:20:16,680 --> 00:20:18,840 Speaker 1: with that two percent real growth, you actually have pretty 356 00:20:18,840 --> 00:20:21,480 Speaker 1: good labor market conditions. You have wage growth continue to 357 00:20:21,520 --> 00:20:23,880 Speaker 1: pick up. We have the unemployment rate falling to three 358 00:20:23,920 --> 00:20:26,680 Speaker 1: point six percent, which would be the lowest level in decades. 359 00:20:27,240 --> 00:20:29,879 Speaker 1: And so all that from a you know, a voter perspective, 360 00:20:30,400 --> 00:20:33,120 Speaker 1: from consumers perspective, actually think looks a lot better than 361 00:20:33,160 --> 00:20:37,680 Speaker 1: you would expect given two real four percent nominal done. 362 00:20:37,680 --> 00:20:41,720 Speaker 1: What Mr Lozettie just said there, I have never framed 363 00:20:42,040 --> 00:20:46,040 Speaker 1: on the American economy. It's just absolutely original. Where we 364 00:20:46,119 --> 00:20:51,480 Speaker 1: are given a suburb GDP shouldn't surprise you. Two percent 365 00:20:51,480 --> 00:20:54,159 Speaker 1: real GDP is is basically potential in the minds of 366 00:20:54,200 --> 00:20:57,200 Speaker 1: many for the US economy. This shouldn't come as a shock. 367 00:20:58,240 --> 00:21:00,600 Speaker 1: It was unthinkable in my how do they have that 368 00:21:00,680 --> 00:21:02,760 Speaker 1: run rate. It is a brand new world out there, 369 00:21:02,880 --> 00:21:08,000 Speaker 1: but this is the new normal, absolutely it is. You know, 370 00:21:08,080 --> 00:21:10,520 Speaker 1: we I think we're a little bit more optimistic on 371 00:21:10,760 --> 00:21:14,000 Speaker 1: getting productivity a bit higher. There is this tendency as 372 00:21:14,359 --> 00:21:16,359 Speaker 1: the labor market tens, as wage growth picks up and 373 00:21:16,400 --> 00:21:20,639 Speaker 1: incentivizes businesses to do capex, and productivity move higher. Uh 374 00:21:20,720 --> 00:21:23,479 Speaker 1: so we see potential a little bit above two. But 375 00:21:23,480 --> 00:21:25,840 Speaker 1: we're absolutely right. The new normal is that potential growth 376 00:21:25,880 --> 00:21:28,520 Speaker 1: is much lower than it's been historically. The FED fund 377 00:21:28,600 --> 00:21:30,840 Speaker 1: rate is much lower than it's been historically. We think 378 00:21:30,840 --> 00:21:33,320 Speaker 1: the FED is not at this point um and so 379 00:21:33,480 --> 00:21:35,480 Speaker 1: for per markets, it's it's a new normal and thinking 380 00:21:35,480 --> 00:21:38,280 Speaker 1: about how far the fact how much volatility you're gonna have. 381 00:21:38,359 --> 00:21:41,520 Speaker 1: So just finally and quickly your assumption here, the base 382 00:21:41,560 --> 00:21:44,000 Speaker 1: case for the trajectory for the US economy is based 383 00:21:44,000 --> 00:21:46,400 Speaker 1: on a FED that goes nowhere, no heights next two years. 384 00:21:47,280 --> 00:21:50,320 Speaker 1: It is, it is, And I think there's two countervailing 385 00:21:50,400 --> 00:21:54,000 Speaker 1: forces here on on growth. We we're still pretty optimistic 386 00:21:54,000 --> 00:21:56,800 Speaker 1: the labor market tight and wage growth picks up. On 387 00:21:56,880 --> 00:21:58,880 Speaker 1: price inflation, on the other hand, we don't see that 388 00:21:58,880 --> 00:22:02,359 Speaker 1: that moving to really higher, and in the context of 389 00:22:02,400 --> 00:22:05,840 Speaker 1: the said reviewing their two percent inflation target, perhaps wanting 390 00:22:05,840 --> 00:22:08,040 Speaker 1: to get inflation a bit higher if they moved to 391 00:22:08,040 --> 00:22:11,720 Speaker 1: an average inflation targeting regime. We don't see them tightening 392 00:22:11,720 --> 00:22:14,080 Speaker 1: as a result of that. This is wonderful path that 393 00:22:14,119 --> 00:22:32,600 Speaker 1: was Zetti, thank you so much with Deutsche Bank. The 394 00:22:32,680 --> 00:22:36,879 Speaker 1: mood in Paris this morning after what we would yesterday 395 00:22:37,000 --> 00:22:40,159 Speaker 1: simply somber in the aftermath of the great fire that 396 00:22:40,359 --> 00:22:43,760 Speaker 1: ripped through the cathedral of Notre Dame. The iconic structure 397 00:22:43,800 --> 00:22:46,560 Speaker 1: took more than two hundred years to build. In just 398 00:22:46,640 --> 00:22:49,920 Speaker 1: a few hours, that roof from back to medieval times 399 00:22:50,560 --> 00:22:54,200 Speaker 1: it is gone, of course, the history extraordinary, from the 400 00:22:54,280 --> 00:22:59,600 Speaker 1: liberation of Paris of the Nazis to the modern day. 401 00:23:00,160 --> 00:23:03,959 Speaker 1: As well. French authorities they assess the damage and craft 402 00:23:03,960 --> 00:23:08,160 Speaker 1: plans to rebuild the monument. Here is our Bob Moon. 403 00:23:15,960 --> 00:23:18,560 Speaker 1: If there was any good news to report, His firefighters 404 00:23:18,560 --> 00:23:20,960 Speaker 1: finally got control of the flames late into the night. 405 00:23:21,359 --> 00:23:23,080 Speaker 1: It was word that they were able to save the 406 00:23:23,119 --> 00:23:25,760 Speaker 1: two rectangular bell towers at the front of the twelfth 407 00:23:25,760 --> 00:23:29,560 Speaker 1: century building, although it will undoubtedly be years before those 408 00:23:29,600 --> 00:23:35,159 Speaker 1: bells are hurt again. It was considered the gem of 409 00:23:35,200 --> 00:23:40,240 Speaker 1: French Gothic architecture, painstakingly constructed by hand, its cornerstone laid 410 00:23:40,359 --> 00:23:43,080 Speaker 1: in eleven sixty three, and in the more than eight 411 00:23:43,160 --> 00:23:48,000 Speaker 1: hundred fifty years since it had survived numerous challenges, ransacked, desecrated, 412 00:23:48,119 --> 00:23:50,840 Speaker 1: and when it fell into serious disrepair, nearly the victim 413 00:23:50,880 --> 00:23:53,560 Speaker 1: of calls to tear it down. It came through two 414 00:23:53,560 --> 00:23:56,760 Speaker 1: World wars and through the will of the people. Notre 415 00:23:56,800 --> 00:24:00,399 Speaker 1: Dame Cathedral has always managed to rise again. A dressing 416 00:24:00,400 --> 00:24:03,760 Speaker 1: his shock nation last night, President Emmanuel mccron declared as 417 00:24:03,760 --> 00:24:07,520 Speaker 1: her through a translator, we will rebuild this cathedral. The 418 00:24:07,640 --> 00:24:19,000 Speaker 1: place we have it is the epicenter of our life. 419 00:24:19,280 --> 00:24:22,600 Speaker 1: That was no overstatement. For centuries, all streets in Paris, 420 00:24:22,720 --> 00:24:25,520 Speaker 1: all roads in France for that matter, led there. But 421 00:24:25,640 --> 00:24:28,159 Speaker 1: during the French Revolution it was viewed as a symbol 422 00:24:28,200 --> 00:24:31,160 Speaker 1: of oppression and fell victim to numerous acts of vandalism. 423 00:24:31,440 --> 00:24:34,320 Speaker 1: People took swipes at it with axes and hammers, beheading 424 00:24:34,320 --> 00:24:37,439 Speaker 1: many statues. It was there that Napoleon chose to be 425 00:24:37,520 --> 00:24:40,439 Speaker 1: crowned emperor in eighteen o four, but by then the 426 00:24:40,480 --> 00:24:42,800 Speaker 1: long neglected building on an island in the middle of 427 00:24:42,840 --> 00:24:45,440 Speaker 1: the river Sende was plagued by a lead roof full 428 00:24:45,440 --> 00:24:48,919 Speaker 1: of leaks. An architect, determined to say the dilapidated building, 429 00:24:49,000 --> 00:24:52,679 Speaker 1: enlisted the help of a friend, writer Victor Hugo. His 430 00:24:52,760 --> 00:24:56,320 Speaker 1: resulting novel, Notre Dame de Paris or Our Lady of Paris, 431 00:24:56,600 --> 00:24:59,920 Speaker 1: was later republished in English as The Hunchback of Notre Dame. 432 00:25:00,400 --> 00:25:03,280 Speaker 1: The book helps spark a movement for its restoration thanks 433 00:25:03,280 --> 00:25:07,000 Speaker 1: to his rapturous descriptions of the architectural treasure has reflected 434 00:25:07,000 --> 00:25:09,720 Speaker 1: in the nineteen thirty nine movie version of his classic story. 435 00:25:11,280 --> 00:25:15,720 Speaker 1: In every city the stand cathedrals like this one, triumphal 436 00:25:15,800 --> 00:25:19,320 Speaker 1: monuments of the past. They tower over the homes about 437 00:25:19,359 --> 00:25:23,159 Speaker 1: people like mighty guardians, keeping alive the invincible faith of 438 00:25:23,200 --> 00:25:28,439 Speaker 1: the Christian. Every art, every column, every statue is a 439 00:25:28,480 --> 00:25:32,040 Speaker 1: carved leaf out of our history, a book in stone, 440 00:25:32,560 --> 00:25:36,400 Speaker 1: glorifying the spirit of French. Hugo himself summed up its 441 00:25:36,400 --> 00:25:40,040 Speaker 1: beauty with just three words, symphony in Stone. He helped 442 00:25:40,040 --> 00:25:42,240 Speaker 1: make it one of the most popular tourist destinations in 443 00:25:42,280 --> 00:25:45,080 Speaker 1: the world, with more visitors even than the Eiffel Tower. 444 00:25:45,320 --> 00:25:48,400 Speaker 1: As Bloomberg News Paris reporter Greg Vescuzzi noted the most 445 00:25:48,440 --> 00:25:51,600 Speaker 1: visited monuments in Paris, it's about, you know, fifty people 446 00:25:51,880 --> 00:25:54,639 Speaker 1: a day can visit it. It's a terrible cultural loss. 447 00:25:54,760 --> 00:25:57,680 Speaker 1: Perhaps it was the splendorous architecture that drew so many, 448 00:25:57,840 --> 00:26:00,600 Speaker 1: or the trove of fine art and religious relic inside, 449 00:26:00,760 --> 00:26:03,600 Speaker 1: among them the crown of Thorns, believed by Catholics to 450 00:26:03,720 --> 00:26:07,000 Speaker 1: have been worn by Jesus Christ himself before his crucifixion. 451 00:26:07,359 --> 00:26:09,199 Speaker 1: The Mayor of Paris had in a tweet that it 452 00:26:09,359 --> 00:26:12,240 Speaker 1: and other relics had been saved, something in which New 453 00:26:12,280 --> 00:26:15,840 Speaker 1: York Cardinal Timothy Dolan found special significance to see that 454 00:26:16,000 --> 00:26:20,880 Speaker 1: reduced to ashes. Myle my, I remember our song from 455 00:26:20,920 --> 00:26:23,800 Speaker 1: the ashes, we rise up. We want to rise up 456 00:26:23,800 --> 00:26:27,120 Speaker 1: with Jesus at Easter, and I believe that there will 457 00:26:27,119 --> 00:26:30,200 Speaker 1: be surrising from this dying. Much of the building's attraction, 458 00:26:30,240 --> 00:26:33,119 Speaker 1: no doubt, was fascination with the heart tugging subject of 459 00:26:33,200 --> 00:26:37,040 Speaker 1: Hugo's fictional story, shunned for his deformed appearance and death 460 00:26:37,119 --> 00:26:50,399 Speaker 1: from his years of ringing the cathedral's bells. Kasimodo, big here, 461 00:26:51,160 --> 00:27:00,080 Speaker 1: she made me dead. I can hear I've been lately. 462 00:27:00,160 --> 00:27:02,320 Speaker 1: The ringing had been limited to a single bell and 463 00:27:02,400 --> 00:27:06,120 Speaker 1: only on special occasions because of more than thirteen tons, 464 00:27:06,160 --> 00:27:08,239 Speaker 1: that was concerned it could shake the tower more than 465 00:27:08,240 --> 00:27:11,359 Speaker 1: it could withstand. A six point eight million dollar renovation 466 00:27:11,400 --> 00:27:13,840 Speaker 1: project had been underway for the past couple of years, 467 00:27:14,119 --> 00:27:17,080 Speaker 1: and much speculation has focused on that as a possible 468 00:27:17,119 --> 00:27:19,920 Speaker 1: cause of the fire. Now, in many ways, they will 469 00:27:19,960 --> 00:27:23,280 Speaker 1: be starting again from the ground up. Restoration expert Copoli 470 00:27:23,359 --> 00:27:26,760 Speaker 1: Crouche is an associate dean at Indiana's University of Notre 471 00:27:26,800 --> 00:27:30,240 Speaker 1: Dame and says it will take years to even start rebuilding. 472 00:27:30,359 --> 00:27:34,919 Speaker 1: There has to be a complete understanding of the construction 473 00:27:35,000 --> 00:27:39,119 Speaker 1: reconstruction of this building, which may take at least a 474 00:27:39,200 --> 00:27:41,800 Speaker 1: period of five years. But again, the will of the 475 00:27:41,880 --> 00:27:45,000 Speaker 1: people seems clear. People who see their lives reflected in 476 00:27:45,000 --> 00:27:48,520 Speaker 1: a building. Journalism students Celia Hedeberg notes, they are drawn 477 00:27:48,560 --> 00:27:52,160 Speaker 1: to it. Still. People have been standing here for hours 478 00:27:52,200 --> 00:27:56,720 Speaker 1: now taking pictures. Earlier um a group of Catholic people 479 00:27:56,800 --> 00:28:15,600 Speaker 1: gathered and started singing different songs. In passing. People are 480 00:28:15,680 --> 00:28:19,359 Speaker 1: making half hearted jokes about how silly it is to 481 00:28:19,400 --> 00:28:22,600 Speaker 1: be crying for a building, But to be honest, that's 482 00:28:22,640 --> 00:28:25,560 Speaker 1: the case for a lot of people here. That's the 483 00:28:25,600 --> 00:28:29,080 Speaker 1: case for so many people around the world. I'm Bob 484 00:28:29,160 --> 00:28:37,639 Speaker 1: Moon Bloomberg Radio. Thanks for listening to the Bloomberg Surveillance podcast. 485 00:28:38,040 --> 00:28:43,040 Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or 486 00:28:43,120 --> 00:28:47,440 Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom 487 00:28:47,520 --> 00:28:51,400 Speaker 1: Keane before the podcast. You can always catch us worldwide. 488 00:28:51,840 --> 00:28:52,920 Speaker 1: I'm Bloomberg Radio.