WEBVTT - Flying Objects, Super Bowl Ads, Yield Curve, and NYC (Podcast) 0:00:00.800 --> 0:00:04.040 Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, alongside 0:00:04.040 --> 0:00:06.920 my co host Matt Miller. Every business day, we bring 0:00:06.960 --> 0:00:11.520 you interviews from CEOs, market pros, and Bloomberg experts, along 0:00:11.520 --> 0:00:15.600 with essential market moving news. Find the Bloomberg Markets Podcast 0:00:15.600 --> 0:00:18.439 on Apple Podcasts or wherever you listen to podcasts, and 0:00:18.480 --> 0:00:21.840 at Bloomberg dot com slash podcast. Let's get to this 0:00:21.840 --> 0:00:24.520 balloon business, because you know, how is at Colorado in 0:00:24.520 --> 0:00:27.280 the Rocky Mountains ten eleven twelve looking did you see 0:00:27.320 --> 0:00:30.480 any I did not see any balloons, and I can't imagine. 0:00:30.520 --> 0:00:32.840 It's good to be in the balloon business these days. 0:00:33.320 --> 0:00:36.680 Mc mulroy, co founder of the Lobo Institute, joins us. 0:00:36.680 --> 0:00:39.800 He's a former Deputy Assistant Secretary of Defense for the 0:00:39.880 --> 0:00:42.680 Middle East at the US Department of Defense, former Power 0:00:42.720 --> 0:00:45.360 Military Operations officer at this thing called the c I A. 0:00:45.440 --> 0:00:47.319 I'm not sure what those guys are up to. Uh. 0:00:47.360 --> 0:00:49.519 And he was a marine for a very very long time, 0:00:49.560 --> 0:00:52.640 so we thank him for service. Hey, Mick, what is 0:00:52.880 --> 0:00:55.200 up with these balloons? Is this always been a thing, 0:00:55.920 --> 0:00:59.680 but now we're just kind of hearing about it. It's 0:00:59.720 --> 0:01:02.680 a it to be with you guys, balloons have you know, 0:01:02.720 --> 0:01:04.440 ever since we had them have been used in some 0:01:04.520 --> 0:01:07.640 capacity to collect intelligence. Those goes back World War One 0:01:08.480 --> 0:01:11.800 all the way until today obviously, but you know, now 0:01:11.840 --> 0:01:16.760 we're shooting down these haven't been identified yet, these objects. 0:01:16.800 --> 0:01:20.720 Some of those might simply be weather balloons. But um, 0:01:20.760 --> 0:01:22.319 you know, we won't know until we get to these 0:01:22.319 --> 0:01:28.280 remote sites and be able to collect and study the debris. Um. So, 0:01:28.800 --> 0:01:31.880 after such a long stint at the C, I a mick, 0:01:31.959 --> 0:01:39.199 when did you start there? Um? Are there aliens? Well? 0:01:39.280 --> 0:01:42.160 I came right after nine eleven, so I was kind 0:01:42.160 --> 0:01:45.280 of focused on the kind of terrorism issue, not the 0:01:45.600 --> 0:01:47.800 extra dress real issue. So I don't know. I know 0:01:47.880 --> 0:01:51.000 that there are people. Obviously we're taking it more serious. 0:01:51.240 --> 0:01:55.080 We are studying as uh. Pentagon has an office that's 0:01:55.120 --> 0:02:00.640 now looking at what these um anomalies are. You know, 0:02:00.720 --> 0:02:04.400 so I don't want to make a decision. Was only kidding, 0:02:04.800 --> 0:02:08.600 but I assume that these unidentified flying objects are like 0:02:08.720 --> 0:02:11.720 college experiments that have just floated away. It seems so 0:02:11.800 --> 0:02:15.880 much more likely, right And um, now that you think 0:02:15.880 --> 0:02:19.240 about it, if we haven't been looking you know, above 0:02:19.800 --> 0:02:25.360 sixties seventy uh feet, then maybe there is just a 0:02:25.400 --> 0:02:28.160 bunch of debris floating around there, just like there's a 0:02:28.160 --> 0:02:33.800 lot of space debris. Yes, absolutely, Yeah. Talking specifically about 0:02:33.800 --> 0:02:35.799 these objects that we've been shooting down in the last 0:02:35.800 --> 0:02:39.840 few days, I don't think there's any extraterrestrial thing about them. 0:02:39.880 --> 0:02:42.919 I think this is likely either it is a Chinese 0:02:42.960 --> 0:02:45.520 surveillance balloon it's a smaller size that they're using to 0:02:45.560 --> 0:02:48.639 try to probe our defenses, or these things may being 0:02:48.720 --> 0:02:50.920 up there and we just haven't seen them. Now that 0:02:50.960 --> 0:02:55.239 we're looking closer, now that we have a signature based 0:02:55.240 --> 0:02:58.040 on the on the on following the balloon that went 0:02:58.320 --> 0:03:00.480 all the way across the United States, which might have 0:03:00.560 --> 0:03:02.560 been able to find tune our radar so that we 0:03:02.600 --> 0:03:04.880 can see these type of things. It doesn't mean that 0:03:04.960 --> 0:03:08.360 these these are all new. It could be these these 0:03:08.520 --> 0:03:11.520 uh weather balloons. We just don't know. Until we get 0:03:11.520 --> 0:03:15.720 to the debris and do an analysis, we should withhold judgment. 0:03:16.440 --> 0:03:18.320 But if it is the Chinese and it looks like 0:03:18.360 --> 0:03:22.280 to me a deliberate provocation to the United States, So, Mike, 0:03:22.360 --> 0:03:26.520 I mean, we have satellites, lots of satellites. I'm assuming 0:03:26.639 --> 0:03:31.240 China has lots of satellites, aren't satellites better than balloons? 0:03:31.280 --> 0:03:34.440 I mean, isn't balloons so last century? Last on an 0:03:34.440 --> 0:03:38.880 early part of the last century. So that is what 0:03:39.320 --> 0:03:43.720 the common belief is that they Chinese have our satellites 0:03:43.840 --> 0:03:46.000 and as you might imagine, most of them are focused 0:03:46.000 --> 0:03:48.560 on the United States, so they can collect a lot 0:03:48.560 --> 0:03:53.680 of this information via their satellite program. But these balloons, 0:03:53.960 --> 0:03:56.280 they are steerable, they seem to be able to log 0:03:56.360 --> 0:03:58.960 or over areas. They're closer to the ground, so they 0:03:58.960 --> 0:04:03.040 can collect signals intelligence. So there is an advantage to 0:04:03.320 --> 0:04:07.400 having both platforms because you can't do that with satellites. 0:04:07.440 --> 0:04:11.160 They just simply can't just sit right over, say Maelstrom 0:04:11.160 --> 0:04:13.920 Airbase where I am in Montana and stare at our 0:04:14.840 --> 0:04:18.440 I C B M silos. This balloon could do that 0:04:18.560 --> 0:04:21.239 and did do that. So that's uh, that's a concern 0:04:21.279 --> 0:04:23.640 to us. We have to be able to defend ourselves 0:04:24.520 --> 0:04:27.640 from collection of this type of really sensitive information. It 0:04:27.640 --> 0:04:30.960 would be great, um if we were ready to defend ourselves, 0:04:31.000 --> 0:04:32.560 but it seems like what we'd like to do is 0:04:32.560 --> 0:04:34.880 take a week to think about it first. You know, 0:04:35.279 --> 0:04:39.200 we spotted this uh alleged spy balloon when it was 0:04:39.279 --> 0:04:41.920 over Alaska and then waited until it got to the 0:04:41.960 --> 0:04:45.800 Carolinas to shoot it down. Doesn't that seem to you 0:04:46.680 --> 0:04:52.720 a little bit stupid? I mean, if they're collecting intelligence, um, 0:04:52.800 --> 0:04:54.960 we let them have everything they could get and then 0:04:54.960 --> 0:04:58.919 stop them when they got back to the ocean. Yeah, 0:04:58.960 --> 0:05:01.360 that's a really good point. I mean, if you're if 0:05:01.360 --> 0:05:03.400 you're asking me, I want to advise the president to 0:05:03.400 --> 0:05:05.159 shoot it down as soon as we saw it. I 0:05:05.200 --> 0:05:06.960 don't know that we did see it until it was 0:05:07.000 --> 0:05:09.960 actually this was just my speculation until it was down 0:05:10.080 --> 0:05:13.520 in the comminentally United States, and then the military decided 0:05:13.839 --> 0:05:17.080 either it was too dangerous to shoot down over populated 0:05:17.120 --> 0:05:21.280 area or they saw and this has been reported that 0:05:21.360 --> 0:05:25.239 they stopped transmitting information back to China. So the US 0:05:25.480 --> 0:05:28.920 military and intelligence community may have wanted to let it 0:05:28.960 --> 0:05:33.080 go since it wasn't um sending information back to be 0:05:33.160 --> 0:05:35.000 able to collect on what it was doing and how 0:05:35.000 --> 0:05:37.960 it did interesting, and then we shot it down right 0:05:37.960 --> 0:05:41.080 after it got finished. But the Chinese, if it's true 0:05:41.080 --> 0:05:44.800 that they didn't transmit anything, never got the intelligence they 0:05:44.880 --> 0:05:47.080 collected because that went to the bottom of the ocean, 0:05:47.160 --> 0:05:50.679 and we are currently trying to get that up and 0:05:51.200 --> 0:05:54.640 analyze it. Mico, what does this mean about just or 0:05:55.040 --> 0:05:56.960 that doesn't mean anything, or what does it mean about 0:05:57.080 --> 0:06:00.160 US China? You know relations here over the last to 0:06:00.240 --> 0:06:05.400 ten days here, So we're we're hitting a pretty uh 0:06:05.520 --> 0:06:09.320 substantial law. Quite frankly, I don't think it's been my 0:06:09.480 --> 0:06:14.239 knowledge this way until before we normalize relations in nineteen 0:06:14.279 --> 0:06:18.480 seventy nine. So, but these things do happen. We collect 0:06:18.520 --> 0:06:22.320 intelligence on all our adversaries, they collect intelligence on us. 0:06:22.600 --> 0:06:25.840 We try to prevent them from collect intelligence on us 0:06:25.880 --> 0:06:29.680 just like they do. It's it is what nations do. Um. 0:06:29.720 --> 0:06:33.840 It has caused a diplomatic riff. Secretary blinking is canceled, 0:06:33.920 --> 0:06:37.000 is or postponed at least is tripped there. But I 0:06:37.040 --> 0:06:39.599 do think it's important for both countries to realize that 0:06:39.680 --> 0:06:43.400 we're completely intertwined on so many things. Were both superpowers, 0:06:43.440 --> 0:06:48.960 if you will, and we have to maintain diplomatic direct communications. 0:06:48.960 --> 0:06:52.960 Like the idea that they didn't answer Secretary Austin's call 0:06:53.080 --> 0:06:57.400 our Secretary defense is really irresponsible. We need to make 0:06:57.440 --> 0:07:01.880 sure that nothing leads to a broader conflict that neither country, 0:07:02.000 --> 0:07:05.360 uh would one? Right? All right, man, great stuff, good 0:07:05.360 --> 0:07:08.599 to check in with you on this evolving story. Mc mulroy. 0:07:08.600 --> 0:07:10.880 He's a co founder of the Lobo Institute. A lot 0:07:10.960 --> 0:07:13.360 of experience and all the power military stuff. Former power 0:07:13.400 --> 0:07:16.120 Military Operations officer at c I, A former U. S. 0:07:16.160 --> 0:07:20.400 Marine Infantry officer, and former Deputy Assistant Secretary of Defense 0:07:20.440 --> 0:07:22.280 for the Middle East at the U. S. Department of Defense. 0:07:22.320 --> 0:07:26.080 So broad range of experienced. Sara trying to the bottom 0:07:26.120 --> 0:07:28.720 of kind of this balloon issue which has kind of 0:07:28.720 --> 0:07:31.000 comeing become a top story over the last week or so. 0:07:31.040 --> 0:07:33.920 How important is it? Uh, you know, how concerned should 0:07:33.960 --> 0:07:36.760 we be? What does it mean for the future or 0:07:36.800 --> 0:07:39.880 even the immediate future international relationship between the U. S. 0:07:39.920 --> 0:07:42.840 And China. So we'll continue to monitor the reporting. They're 0:07:42.840 --> 0:07:45.840 looking at the markets here SMP up one half of 0:07:45.920 --> 0:07:49.080 one per cent. We'll love more coming up. This is Bloomberg. 0:07:53.360 --> 0:07:55.760 But it was a big night for the Kansas City Chiefs. 0:07:55.760 --> 0:07:57.840 A big night. I think we're gonna find out for America, 0:07:58.040 --> 0:08:00.760 for America, big night for Fox who the broadcast, right, 0:08:00.800 --> 0:08:02.480 So we'll get the ratings later today. I'm sure they're 0:08:02.480 --> 0:08:05.280 gonna be pretty pretty darn good. Question is how big 0:08:05.280 --> 0:08:08.559 a night was it for advertisers who put some big, 0:08:08.600 --> 0:08:11.240 big money to work. Seven million dollars for a thirty 0:08:11.240 --> 0:08:13.720 second spot. Mark Douglas, President and CEO of Mountain Joints, 0:08:13.800 --> 0:08:17.480 is here Mark again for advertisers, this is the biggest 0:08:17.560 --> 0:08:19.480 day of the year for a lot of these folks. 0:08:19.520 --> 0:08:22.720 They put up huge money to reach what is a 0:08:22.800 --> 0:08:26.360 huge audience. What are there you takeaways? Um, well, there 0:08:26.360 --> 0:08:28.280 were a lot of good ads. I mean, I think 0:08:28.280 --> 0:08:30.760 there are a few people going, Um, why did we 0:08:30.880 --> 0:08:34.160 do that? Because you watch a few of the ads 0:08:34.160 --> 0:08:38.559 and you're like, um, who approved that exactly? And then 0:08:38.600 --> 0:08:40.920 spend seven million dollars on top of it to area? 0:08:41.040 --> 0:08:43.160 So how much is seven million dollars for like a 0:08:43.200 --> 0:08:47.760 minute long spot or um? And just you know, five 0:08:47.840 --> 0:08:49.839 years ago was two million dollars, you know. So it's 0:08:49.840 --> 0:08:52.840 just amazing the inflation. And again the second was such 0:08:52.880 --> 0:08:56.320 a spectacle for me, having just come back from living 0:08:56.320 --> 0:08:58.760 in Berlin for the past six years. I'm not used 0:08:58.800 --> 0:09:01.120 to this kind of patriotism him. But then it's patriotism 0:09:01.200 --> 0:09:04.120 on steroids. And then it's almost like a parody of patriotism. 0:09:04.200 --> 0:09:07.000 It's like a circus making fun of how patriotic they are. 0:09:07.040 --> 0:09:09.280 It was pretty crazy, but I guess that's just where 0:09:09.280 --> 0:09:11.200 we are. Well, the NFL knows how to put on 0:09:11.200 --> 0:09:13.439 a good show. I was at last year's Super Bowl, 0:09:13.679 --> 0:09:17.920 and you know, I got Doctor Dre, I got Snoop Dog. 0:09:18.520 --> 0:09:22.839 The halftime show was the game basically last year. So well, 0:09:22.880 --> 0:09:25.640 we Re was apparently very good this year. Yeah, she 0:09:25.720 --> 0:09:27.720 put on a good show. She played all the hits 0:09:27.800 --> 0:09:31.240 and no one was complaining at all. And she she 0:09:31.240 --> 0:09:35.120 she's not afraid of heights. It was like practically the stadium, 0:09:35.280 --> 0:09:38.480 even with child. All right, so let me first get 0:09:38.520 --> 0:09:42.040 your take on how the game went, because I've heard 0:09:42.240 --> 0:09:46.080 a lot of complaints this morning that officials are deciding, 0:09:46.720 --> 0:09:49.719 you know, the outcome with calls that are kind of 0:09:49.760 --> 0:09:53.560 penny any Yeah, that that the call, and right before 0:09:53.679 --> 0:09:56.520 the last score, you know, they scored a field goal, 0:09:56.800 --> 0:09:59.240 and you know, the official I don't think there was 0:09:59.280 --> 0:10:01.480 a hole there, you know, when that's not a sports 0:10:01.520 --> 0:10:04.840 talk show, But I don't think that the defensive corner 0:10:05.000 --> 0:10:09.400 actually held the running back and that basically and created 0:10:09.440 --> 0:10:12.520 the game that basically, I mean Kansas City was already 0:10:12.559 --> 0:10:14.880 pretty close to the goal. Wasn't like they weren't going 0:10:14.920 --> 0:10:16.480 to be able to kick a field goal, but they 0:10:16.520 --> 0:10:18.080 brought got him a lot too. By the way, I 0:10:18.160 --> 0:10:21.839 was rooting for Kansas City only because I think, well, 0:10:21.880 --> 0:10:24.800 Philadelphia fans are the worst fans in the league. I mean, 0:10:24.800 --> 0:10:29.040 they're worse than Ohio State fans. And then, um, my favorite, 0:10:29.200 --> 0:10:31.960 one of my favorite commercials of all time is the 0:10:32.000 --> 0:10:37.160 Snickers commercial when the ground staff is doing the end 0:10:37.280 --> 0:10:40.400 zone in Kansas City and they accidentally right Kansas City chefs. 0:10:41.120 --> 0:10:44.440 They forget the eye. Well, I think I think all 0:10:44.520 --> 0:10:48.040 New Yorkers agree they don't like the Phillies, but you 0:10:48.080 --> 0:10:50.720 know they lit the Empire State Building and their colors 0:10:50.840 --> 0:10:54.720 just a few weeks that it's kind of crazy. So Mark, 0:10:54.760 --> 0:10:57.040 I mean, you buying a thirty second spot for seven 0:10:57.040 --> 0:10:59.240 million dollars, it's just a monster's premium to what you 0:10:59.240 --> 0:11:03.400 would ordinarily pay. Is there when you I mean you're 0:11:03.440 --> 0:11:05.439 in this business, there a payoff? Is there a payoff? 0:11:05.480 --> 0:11:07.560 Is there a payback? I mean, if you're trying, if 0:11:07.600 --> 0:11:11.000 you're in I think there's this fine line between your 0:11:11.160 --> 0:11:14.200 brand that people are starting to know but don't fully 0:11:14.320 --> 0:11:17.640 know yet, and this is your moment. And when I 0:11:17.679 --> 0:11:19.679 look at a lot of ads, I thought that there 0:11:19.720 --> 0:11:22.000 was an ad for pop Corners which was a take 0:11:22.080 --> 0:11:26.160 on Breaking Bad, So there there to give a real 0:11:26.200 --> 0:11:28.600 quick description on the ad. They're basically in the trailer 0:11:29.200 --> 0:11:32.679 and they have devised this new chip to eat and 0:11:32.760 --> 0:11:37.760 it's better than drugs. And the ad ends they're out 0:11:37.760 --> 0:11:40.640 in the desert doing a deal for these pop these 0:11:40.679 --> 0:11:44.240 pop chips. I beg popcorners. I wouldn't have known about 0:11:44.240 --> 0:11:46.679 that project otherwise. And I'm probably gonna try it when 0:11:46.679 --> 0:11:48.480 I go to the supermarket. I'm gonna buy it back. 0:11:48.559 --> 0:11:50.679 And I think I'm gonna try prime. I never heard 0:11:50.679 --> 0:11:53.040 about that, but apparently the kids, it's all the rage. 0:11:53.080 --> 0:11:54.640 It's like a sports drink. I don't know if it's 0:11:54.679 --> 0:11:57.640 any different from Gatorade or uh whatever any of the 0:11:57.679 --> 0:11:59.840 new ones are. But they got a lot of advertising 0:12:00.040 --> 0:12:02.720 terday and apparently they're already huge on social Yeah for sure. 0:12:02.840 --> 0:12:05.400 And then I think the whole night. Um, A lot 0:12:05.440 --> 0:12:09.480 of the best ads were remakes of like shows from 0:12:09.480 --> 0:12:11.960 the two thousands and nineties, so there was, you know, 0:12:12.080 --> 0:12:15.200 basically we just talked about Breaking Bad. There was like 0:12:15.320 --> 0:12:19.480 John Travolta to the musical ads, which was pretty funny. Um, 0:12:19.600 --> 0:12:24.120 the clueless like Alicia Silverstone basically and looking exactly the 0:12:24.200 --> 0:12:28.600 same and shout out to that film. I don't know 0:12:28.720 --> 0:12:31.280 if either of you guys have read Jane Austen's novel, 0:12:31.480 --> 0:12:35.199 but that's basically a redo of Emma. Ok yeah, so 0:12:35.400 --> 0:12:38.920 what a what a good film that it was? Okay 0:12:40.400 --> 0:12:43.800 that clueless And I lived in l A. So you know, 0:12:43.840 --> 0:12:45.880 I kind of as a matter of fact, while John 0:12:45.880 --> 0:12:49.280 Travolta was singing and dancing, I actually think I recognized 0:12:49.320 --> 0:12:52.160 the street in Los Angeles was on filming that. So 0:12:52.200 --> 0:12:54.880 what about this, I mean, as more and more programming 0:12:54.920 --> 0:12:56.800 goes to streaming services, what do you think the NFL 0:12:56.880 --> 0:12:59.439 is going to do with the rights to the big 0:12:59.520 --> 0:13:03.360 rights for the NFL, like during the season, the you know, 0:13:03.720 --> 0:13:06.719 obviously the playoffs, then of course the Super Bowl. Well, 0:13:06.760 --> 0:13:09.760 you know, that's interesting. There's been people who moved all 0:13:09.800 --> 0:13:13.120 over America and if I think basically streaming fits right 0:13:13.120 --> 0:13:15.520 into that if you want, I remember when I moved 0:13:15.520 --> 0:13:17.800 from New York City where I grew up, to California. 0:13:18.240 --> 0:13:20.720 At the time, I was a huge Giants fan, New 0:13:20.800 --> 0:13:23.800 York Giants fans, and like you couldn't really watch them anymore. 0:13:24.160 --> 0:13:26.480 You can do that now on direct TV, but it's 0:13:26.480 --> 0:13:28.960 so much better on streaming and you can watch it 0:13:29.000 --> 0:13:31.600 at any time. Of course you want to watch it live. 0:13:31.960 --> 0:13:35.240 So I think the NFL is really adepted just adapting 0:13:35.360 --> 0:13:37.720 and streaming just fits right in. It actually brings me 0:13:37.760 --> 0:13:40.320 back to Disney. You know, last couple weeks you've been 0:13:40.320 --> 0:13:47.120 talking about, um, the House of Mouse because uh, the 0:13:47.160 --> 0:13:52.240 CEO came back and they had earnings. And with ESPN, 0:13:52.280 --> 0:13:53.880 I feel like they're leaving so much money on the 0:13:53.920 --> 0:13:57.199 table because I'm not gonna get cable just to get ESPN. 0:13:57.280 --> 0:13:59.920 But I also ESPN Plus should be called ESPN My 0:14:00.080 --> 0:14:03.640 this like, it doesn't have anything, So why can't I 0:14:03.760 --> 0:14:05.920 stream that? I would pay them twenty five dollars a 0:14:05.960 --> 0:14:07.839 month if I had all the content. Yeah, I mean 0:14:08.400 --> 0:14:12.120 ESPN is actually a really good example of how basically 0:14:12.160 --> 0:14:15.360 just using the Internet you can basically reproduce a TV network. 0:14:15.840 --> 0:14:18.320 And so there's so much good sports content not on 0:14:18.440 --> 0:14:21.280 the ESPN that I think they have a lot of 0:14:21.280 --> 0:14:23.760 people like why do I need to watch ESPN? And 0:14:23.800 --> 0:14:26.080 they have to adapt, and I agree with you, they 0:14:26.120 --> 0:14:29.080 haven't done a great job, and it's it's a huge opportunity. 0:14:29.080 --> 0:14:31.800 They have the brand they have the following and and 0:14:31.800 --> 0:14:34.960 it needs to happen. So there's so much change on 0:14:35.680 --> 0:14:39.520 the Super Bowl streaming, you know, advertising, it's all changing, 0:14:39.520 --> 0:14:42.440 and I think it's huge opportunities for everyone. Thirty seconds Mark, 0:14:42.480 --> 0:14:45.480 anything to slow this NFL jugging out down in terms 0:14:45.560 --> 0:14:47.520 of just ratings. I mean, they had some issues a 0:14:47.520 --> 0:14:51.160 few years ago, but man, they seem to be just dominant. Well, Ryan, 0:14:51.240 --> 0:14:53.800 and you know, Ryan Reynolds is trying with Wrexham. Maybe 0:14:53.840 --> 0:14:57.360 we can get a few more soccer fans. So I 0:14:57.360 --> 0:15:00.520 think that works way better in Scotland. And here I 0:15:00.520 --> 0:15:05.120 was gonna say, I'll watch Ryan's content, but not if 0:15:05.200 --> 0:15:08.320 it's if I have to watch soccer exactly. That's right. 0:15:08.320 --> 0:15:10.680 I forgot about that. He's big over there. Well all right, yeah, Mark, 0:15:10.720 --> 0:15:12.680 we're going to let you go. Mark Douglas, President CEO 0:15:12.720 --> 0:15:14.960 of of Mountain, joining us live here on our Bloomberg 0:15:15.360 --> 0:15:17.560 Interact a broker studio, just kind of getting a breakdown 0:15:17.600 --> 0:15:20.200 a little bit of the the day after of the Super Bowl. Uh, 0:15:20.720 --> 0:15:23.760 we're gonna get some ratings later today from Nielsen for 0:15:23.880 --> 0:15:26.200 the Fox Network. Presumably those numbers are gonna be pretty 0:15:26.240 --> 0:15:29.800 darn impressive, and that's what advertisers are paying up for again. 0:15:29.960 --> 0:15:33.280 Seven million dollars for thirty second spot is a huge 0:15:33.360 --> 0:15:36.000 premium um, but a lot of those advertisers they think 0:15:36.000 --> 0:15:43.080 it's worth it more. Coming up this is Bloomberg, all right, 0:15:43.120 --> 0:15:46.080 I'm looking at my Bloomberg terminal. I got my two year, 0:15:46.160 --> 0:15:50.800 ten year thing on the bond stuff. I mean it's inverted. 0:15:50.880 --> 0:15:55.200 It's been inverted for a long time. And there's somebody 0:15:55.200 --> 0:15:56.680 out there who thinks that this is kind of a 0:15:56.680 --> 0:15:59.920 big deal. His name is Cam Harvey, uh, Professor Finance 0:16:00.000 --> 0:16:02.960 at the Fucal School of Business at Duke University, and 0:16:03.000 --> 0:16:05.960 he's kind of the go to person on this from 0:16:05.640 --> 0:16:08.520 a research perspective, being one of the leaders on this 0:16:08.560 --> 0:16:11.320 whole topic of looking at the yield curve and Camp I, 0:16:11.320 --> 0:16:14.280 I you know, full disclosure, I may have been on 0:16:14.320 --> 0:16:16.760 the Duke golf course when you talked about this way 0:16:16.760 --> 0:16:18.280 back in the day, so I might have missed it 0:16:18.280 --> 0:16:20.760 a little bit. I was known to do that back 0:16:20.760 --> 0:16:23.360 in my FUCAL days. UM, talk to us about kind 0:16:23.360 --> 0:16:25.400 of how you're looking at this yield curve. What is 0:16:25.400 --> 0:16:27.520 it telling us? What do you think the FETE is 0:16:27.520 --> 0:16:33.040 taking away from this? So it's complicated. Uh So the 0:16:33.120 --> 0:16:37.640 yield curve predicts economic growth, and indeed that was my 0:16:37.920 --> 0:16:42.880 dissertation in six at the University of Chicago. UM. It's 0:16:42.880 --> 0:16:47.960 got a great track record for forecasting recessions. So eight 0:16:48.480 --> 0:16:51.600 of the last eight and then since I published my dissertation, 0:16:52.040 --> 0:16:55.560 it's four be four with no false signals, and now 0:16:55.720 --> 0:17:00.600 it's inverted. And essentially when I look at this, UM, 0:17:00.640 --> 0:17:03.440 I see the model that I proposed, a very simple 0:17:03.480 --> 0:17:06.960 model and with only one thing that you look at, 0:17:07.320 --> 0:17:09.720 and that's the difference between the tenure yield and the 0:17:09.760 --> 0:17:13.520 three months a treature Bill yielled And I think that 0:17:13.680 --> 0:17:17.720 this time around it's giving a false signal. The three 0:17:17.720 --> 0:17:21.920 months ten years spread is uh way inverted, right, I 0:17:21.960 --> 0:17:26.840 mean negative one and one basis points. I can understand, UM, 0:17:26.840 --> 0:17:29.480 and we've talked about this before that now that we 0:17:29.520 --> 0:17:33.439 all know about it, since since you published UM, you know, 0:17:33.480 --> 0:17:35.919 that changes the equation a little bit because all market 0:17:36.000 --> 0:17:39.600 participants under you know, are expecting something or they know 0:17:39.640 --> 0:17:42.960 what they should or could expect when they see this inversion. UM. 0:17:43.200 --> 0:17:45.639 I can understand that if it was only a slight inversion, 0:17:45.680 --> 0:17:49.040 but since it's such a big inversion, doesn't that raise 0:17:49.119 --> 0:17:55.080 red flags? So it is a pretty substantial inversion. So 0:17:55.119 --> 0:17:58.159 I totally agree with you, But again, you need to 0:17:58.240 --> 0:18:02.040 look at the bigger picture here, and every single business 0:18:02.080 --> 0:18:06.320 cycle is different, and this one has a number of 0:18:06.359 --> 0:18:11.840 things that I think, uh, contrasted with other sort of 0:18:11.880 --> 0:18:16.280 business cycles. UH. And one thing that is really unusual 0:18:16.920 --> 0:18:20.399 is the excess demand for labor, where we've got like 0:18:20.440 --> 0:18:24.800 ten million job openings and one point eight job openings 0:18:24.840 --> 0:18:29.000 for every person that's unemployed. Like that is just really unusual. 0:18:29.520 --> 0:18:31.840 And that means that even if we do slow down, 0:18:31.880 --> 0:18:35.480 and I actually believe that we will slow down, but 0:18:35.720 --> 0:18:39.480 dodge a hard landing. So when we slow down, uh, 0:18:39.520 --> 0:18:43.560 there is enough capacity to absorb those that are laid off, 0:18:44.400 --> 0:18:49.959 and that kind of dulls the blow of the slow economy. 0:18:50.320 --> 0:18:54.160 And what do you say about people kind of expecting 0:18:54.760 --> 0:18:59.120 looking at the indicator and the changes behavior. That's what 0:18:59.160 --> 0:19:02.639 we've been seeing. So we see this deeply inverted yield curve. 0:19:03.000 --> 0:19:09.159 We see companies proactively taking measures to trim uh some 0:19:09.240 --> 0:19:12.560 of their workforce to put them in a stronger position 0:19:13.080 --> 0:19:16.080 when we do go into slower growth. They don't need 0:19:16.160 --> 0:19:20.000 to do anything drastic. And I think that that's overall 0:19:20.080 --> 0:19:22.800 good for the economy. So people are looking at it, 0:19:22.840 --> 0:19:27.520 they take it seriously. That's interesting. So so basically, you know, 0:19:27.720 --> 0:19:31.000 a few decades back you said, look, here's a signal, 0:19:31.440 --> 0:19:35.879 UM that shows us, uh that this outcome is is approaching. 0:19:35.920 --> 0:19:39.720 And now that everyone knows about it, companies say, hey, Cam, 0:19:39.760 --> 0:19:43.119 Harvey publishes paper and he's been right the last few times. 0:19:43.160 --> 0:19:45.080 So now that we see this signal, let's make changes 0:19:45.280 --> 0:19:51.040 to avoid this outcome. Yeah, exactly. So it's called risk management. 0:19:51.680 --> 0:19:55.320 And it's not just businesses, but I think consumers too. 0:19:55.680 --> 0:19:58.720 This indicators in their face and with the eight out 0:19:58.760 --> 0:20:02.400 of eate record, um, you take it seriously. And that 0:20:02.480 --> 0:20:06.000 means you don't uh borrow on your credit card to 0:20:06.080 --> 0:20:09.119 take a vacation at this point because you want to 0:20:09.160 --> 0:20:12.240 be careful. So all of this feeds into behavior, this 0:20:12.359 --> 0:20:16.040 risk management, and again the indicator is giving a correct 0:20:16.119 --> 0:20:20.119 signal in my opinion, in terms of slower growth. But 0:20:20.240 --> 0:20:24.440 I do think that we can dodge a recession, assuming 0:20:24.920 --> 0:20:28.760 the Federal Reserve doesn't mess it up. So that kind 0:20:28.760 --> 0:20:30.919 of goes to my next question, Cam. I mean, you know, 0:20:31.119 --> 0:20:33.440 we have a lot of ECO data this week we've 0:20:34.400 --> 0:20:37.680 what do you think the Federal Reserve should do over 0:20:37.680 --> 0:20:41.919 its next couple of meetings, Well, they should pause, and 0:20:42.080 --> 0:20:45.640 indeed they should have paused last time. So inflation over 0:20:45.680 --> 0:20:49.200 the last six months is running at less than two 0:20:49.200 --> 0:20:54.679 percent annualized. Right. So uh, if you look at the 0:20:54.760 --> 0:20:59.040 key drivers of inflation, a third of the c p 0:20:59.200 --> 0:21:02.959 I and four percent of the personal consumption and expenditure, 0:21:03.080 --> 0:21:06.600 a deflator is linked to shelter. And we've already seen 0:21:06.960 --> 0:21:10.720 what's happened to shelter. We've got rents going down, housing 0:21:10.760 --> 0:21:14.879 prices going down, housing starts permits down, so that is 0:21:14.920 --> 0:21:18.440 definitely cooled. It will take a while to work its 0:21:18.480 --> 0:21:23.480 way through into the inflation rate, but I think that 0:21:24.320 --> 0:21:27.640 the time to pause is now, and that they continue 0:21:27.720 --> 0:21:31.639 to raise. Every single time they do this, they heighten 0:21:31.760 --> 0:21:36.520 the probability pushing us into a hard landing recession, and 0:21:36.560 --> 0:21:41.159 that's completely unnecessary. Hey, can let's switch gears a little bit. 0:21:41.200 --> 0:21:44.760 I know in addition to all your someone will work 0:21:44.840 --> 0:21:46.800 on the yield curve and the FED, you've also done 0:21:46.840 --> 0:21:51.359 a lot of work and research on crypto. Um i'd 0:21:51.359 --> 0:21:53.200 love to get I'm just looking a bitcoin here, that's 0:21:53.200 --> 0:21:54.720 just kind of my go to on my screen here 0:21:54.720 --> 0:21:59.159 it's back up above pushing tys per token UM. So 0:21:59.200 --> 0:22:02.280 that's recovered. When people come up to you in a 0:22:02.280 --> 0:22:05.520 cocktail party and ask you your opinion on crypto, give 0:22:05.600 --> 0:22:08.280 us that level of discussion about how you think about it. 0:22:10.080 --> 0:22:12.960 So the way I look at it is the crypto 0:22:13.320 --> 0:22:18.080 is not just bitcoin, uh, it is a whole ecosystem, 0:22:18.160 --> 0:22:22.600 and it is a way to potentially rebuild our financial 0:22:22.600 --> 0:22:29.400 system whereby we can greatly reduce transactions costs, we can 0:22:29.440 --> 0:22:33.600 do many things that we couldn't do before. UH. And 0:22:34.000 --> 0:22:38.120 this idea of tokenizing all stocks, all bonds, all assets 0:22:38.240 --> 0:22:44.639 is very very attractive. So this builds potentially new companies, 0:22:45.240 --> 0:22:48.440 the so called web three revolution that's happening right now, 0:22:49.119 --> 0:22:53.200