Speaker 1: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along
Speaker 1: with Paul Sweeney. Join us each day for insight from
Speaker 1: the best in economics, finance, investment, and international relations. You
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Speaker 1: the Bloomberg Terminal, and the Bloomberg Business App. Paul, I
Speaker 1: want you to bring in dan Ives, but let me
Speaker 1: give you some pre COVID comparisons. Pre COVID one hundred
Speaker 1: and twenty six billion revenue one two six has become
Speaker 1: two four to three. Okay, ebit do down the income statement,
Speaker 1: throwing some balance sheet joy that only Dan Ives understands.
Speaker 1: Fifty six billion pre code COVID. They've done terrible. It's
Speaker 1: one hundred and twenty five billion now fifth that they've
Speaker 1: done on the edge of a double. Yeah, a triple,
Speaker 1: excuse me a triple. And then let me just get
Speaker 1: down to what I care about. I just doesn't care
Speaker 1: about free cash flow free cashlow thirty eight billion. It's
Speaker 1: basically a double pre covid to where we are. This
Speaker 1: company is failing. Why don't you bring in the good
Speaker 1: guy from Wedbush.
Speaker 2: Our good friend Dan, I's Wedbush Securities senior equity analysts.
Speaker 3: So Dan, we got a good look at a couple
Speaker 3: of the.
Speaker 2: Real stalwarts in the tech space last night. Microsoft and Alphabet.
Speaker 2: I know you you don't cover Alphabet, but I know
Speaker 2: you've got some thoughts there. But let's just start with Microsoft. There,
Speaker 2: our good friends in Seattle. It seemed like a solid
Speaker 2: quarter across the board here. I mean, I know the
Speaker 2: stocks reflected that over the last year. What did you
Speaker 2: take away from our good friends at Microsoft.
Speaker 4: I mean, look, I think they should print this press
Speaker 4: release off and conference call and put in the loop.
Speaker 4: I mean, if you look, the cloud numbers here are
Speaker 4: off the charts. Co Pilot. Remember this is all about
Speaker 4: AI co pilot. You have over a million customers now
Speaker 4: from a subscriber perspective. Enterprise are lining up Monzians here.
Speaker 4: This is just the start of the revolution. I think
Speaker 4: this is as bullish as we could have expected.
Speaker 1: Jennives go out three years I was talking with our
Speaker 1: great Joel Lovington this morning about you know the timeline out.
Speaker 1: I want you to be an adult. I don't care
Speaker 1: about the next trading day. I don't even care how
Speaker 1: we get Microsoft to Valentine's Day. Give me twenty twenty six.
Speaker 1: Where is this juggernaut? Then?
Speaker 4: I think it's somewhere between four to five trillion. I mean,
Speaker 4: but Tom muld, you put some numbers around it, please.
Speaker 4: There's an incremental one hundred to one hundred and twenty
Speaker 4: five billion of cloud revenue not reflected in the street numbers.
Speaker 4: If you put that into EPs, I mean you're really
Speaker 4: essentially looking at what could be an incremental three to
Speaker 4: four hours of EPs that's now refucked in the stytum.
Speaker 1: Yeah. While I was on the conference call and I
Speaker 1: said to Satya, I said, don't get rid of Diablo
Speaker 1: for but tell me about Activision because I looked at
Speaker 1: the free cash flow explosion, and everybody's been out of
Speaker 1: shape about the revenue of EC division. I'm looking at
Speaker 1: the profit from day one. It's larger than what we
Speaker 1: would call Windows business. What does profit AC division do
Speaker 1: out two years, three years?
Speaker 4: Well, I think it's really about the cross sell opportunity.
Speaker 4: I mean that that's something that probably could increase another
Speaker 4: twenty twenty five percent for me from profitability perspective, that's
Speaker 4: just going to give them more and more of a
Speaker 4: talent because in the in the scheme of things that's
Speaker 4: around the error, you know, relative to the overall business
Speaker 4: or what they're doing now, they're just broadening out in
Speaker 4: the consumer and on the enterprise, gaining more more strength.
Speaker 4: And you look at the numbers, the numbers are just
Speaker 4: their job jo dropping.
Speaker 1: They're truly folks. From the scope and scale there's to me,
Speaker 1: it's the Rockefeller build up back in the eighteen nineties
Speaker 1: to nineteen twenty Paul linked in up ninety percent.
Speaker 2: It's just amazing. Hey Dan, I know you don't cover
Speaker 2: Alphabet per se, but what do you think You know
Speaker 2: this just AI and chat ept for our friends in Seattle.
Speaker 2: What does that mean for kind of the global search business?
Speaker 4: But I think look, if you look at Alphabet, the advertising,
Speaker 4: even though you know some could sort of split hairs here,
Speaker 4: I think actually really strong. We saw from YouTube and
Speaker 4: a lot of their assets. I think the big thing
Speaker 4: on Alphabet is just what's happened Google Cloud. You look
Speaker 4: at that some of the parts. I mean, they're just
Speaker 4: starting to tapp into that massive opportunity in the cloud.
Speaker 4: And we've talked about all of my colleagues got deviit
Speaker 4: that could add thirty to forty dollars per share to
Speaker 4: the to the Google Store.
Speaker 3: You know.
Speaker 1: I just real little simple here, Apple tomorrow, Amazon tomorrow.
Speaker 1: What do you expect?
Speaker 4: Look New York City, cab drivers, parish on Apple, you know,
Speaker 4: in terms of units and everything. And I think China's
Speaker 4: actually been relatively stable. I think that's gonna be a
Speaker 4: breadth of fresh air from Cooking Cooper Tino on units,
Speaker 4: on services and on Amazon. And the big story is
Speaker 4: gonna be the i'll call it a mini turnaround that
Speaker 4: they're seeing on e commerce as well as cloud. We're
Speaker 4: gonna look at the end of this week and say,
Speaker 4: big text delivering these knee jerk reactions I view as
Speaker 4: kind of table scraps.
Speaker 2: All right, Dan, So, I mean, I think you know
Speaker 2: the big thing for Apple is China. So just give
Speaker 2: us a sense how you think that's going to be
Speaker 2: play out, or how do you think Tim Cook's gonna
Speaker 2: frame that out? Tomorrow night.
Speaker 4: I think he's going to talk about demand has been
Speaker 4: relatively stable. There are some pockets of weakness Huawei competition,
Speaker 4: but overall, the upgrade opportunities in the ESP's look strong
Speaker 4: in the region. I mean it's our view that units
Speaker 4: show growth this year. The streets now bacon in obviously
Speaker 4: five to ten percent decline. So if you start to
Speaker 4: hear that from Cook along with services double digit growth,
Speaker 4: you look, what's happened? Or free cash or he always
Speaker 4: talks about. I mean, you start to now get a
Speaker 4: stock that should be closer to fifty rather than you know.
Speaker 1: I got thirty seconds, dan Ice use of cash? When
Speaker 1: did they get off their butt? Sweeney wants them to
Speaker 1: raise the dividend. He sent a note out there this
Speaker 1: morning to amihood they get a raise, a dividends, sheer,
Speaker 1: buy back bond issuance. When does Microsoft grow up and
Speaker 1: act like a blue chip?
Speaker 4: Yeah, And they talked about that Sweeney activist situation and
Speaker 4: Nate looking and I think that's something. Over the next
Speaker 4: six twelve months, there's gonna be some massive deployment of
Speaker 4: capitol olt kid just given the generating more cash in
Speaker 4: some countries here.
Speaker 1: You know, this just came in rich from the Netherlands
Speaker 1: just emailed it her the middle of the day. That's
Speaker 1: a hell of a man cave on YouTube, folks, you
Speaker 1: got the ives sports man cave. What do you got
Speaker 1: in the paraphernalia behind you there?
Speaker 4: I hope we got our of course. Pete Penn state
Speaker 4: we are giants Island. There's got my bon Jovi stuff.
Speaker 1: You got your banjo? Is it early bon Jovi back
Speaker 1: with the skull t shirts or is it later bon Jovi?
Speaker 1: Suburban review? Okay, when Michael Brower mixed it, that's good Dan,
Speaker 1: I's are on John bon Jovi, Thank you so much.
Speaker 1: Good morning Michael Brower who mixed all those great kids.
Speaker 1: Right now on the FED she won't fly bowing anymore.
Speaker 1: Julia Carnado Jones's micro Paul, I'm kidding micro policy perspectives
Speaker 1: here on FED Day, Julia, I'm gonna posit the same question,
Speaker 1: which I think is the ambiguity of what to do
Speaker 1: with the nominal rate where it is, and that, folks,
Speaker 1: the math here is the yield of picure duration the
Speaker 1: ten year minus a new wicked small inflation, a disinflationary
Speaker 1: statistic which gives you a high real yield. Julie, how
Speaker 1: should the Fed respond to where the nominal the current
Speaker 1: ten year real yield is.
Speaker 5: Well, I think that the FED trade off ahead of them.
Speaker 5: They can not be in a rush. At the same time,
Speaker 5: it's there's no denying now that the inflation trend is
Speaker 5: definitely outpacing their expectations, and a sequence of cuts to
Speaker 5: the nominal rate is the right way to balance risks
Speaker 5: to keep that real yield from tightening. So I think
Speaker 5: the direction of travel is pretty clear, and what we
Speaker 5: will look to hear from j. Powell is some sense
Speaker 5: of strategy and timing and cadence right, and what exactly
Speaker 5: they're looking at to trigger this process?
Speaker 1: Are they slaves to the green span measured? Which I
Speaker 1: think everybody knows so and listening to me for years,
Speaker 1: I totally disagree with my good friend doctor Greenspan on
Speaker 1: But are they just completely slaves to it all costs
Speaker 1: be measured?
Speaker 5: I don't think so. I wouldn't. I would say it's
Speaker 5: it's a little bit more nuanced. They did say that
Speaker 5: they could move methodically, or that's what Governor Waller signaled,
Speaker 5: and we'll see if Chair Powell repeats that word today.
Speaker 5: What is methodical? Well, it sort of suggests they won't
Speaker 5: be moving in you know, fifty or seventy five basis
Speaker 5: point moves, that they will be moving in twenty five
Speaker 5: basis point increments. But I expect a lot less sort
Speaker 5: of rigid forward guidance. That doesn't mean twenty five basis
Speaker 5: points every meeting or you know, every other meeting. It's
Speaker 5: going to be dependent on the data. Could be faster
Speaker 5: or slower, But it does seem like they are ruled
Speaker 5: out chunkier moves in the initial phases of this process. Again,
Speaker 5: as long as the economy cooperates. If we get you know,
Speaker 5: companies laying off workers, certainly that would change the landscape
Speaker 5: and they could move a lot faster. But I think
Speaker 5: in the current environment where the labor market looks pretty healthy,
Speaker 5: a lot cooler but pretty healthy, growth is fine, and
Speaker 5: inflation is cooling quite rapidly, they the intention seems to
Speaker 5: be dare I say, move at a measured pace and.
Speaker 2: Julia, but there's a lot of folks out there, a
Speaker 2: lot of folks that you know, look at real time
Speaker 2: data and say, hey, this FED inflation is already down,
Speaker 2: the economy is slowing. Now is the time? Why wait
Speaker 2: to see the rear view mirror data confirm what we
Speaker 2: already know, which is economy is slowing, inflation is tame.
Speaker 2: Let's go now.
Speaker 5: Yeah, it's a it's a fine balance, you know. Again,
Speaker 5: you're right. We look at g Q four GDP, it's
Speaker 5: quite an impressive but again that's Q four. We're in
Speaker 5: Q one and we're looking towards Q two. What does
Speaker 5: the future hold. I think we've seen surveys showing some
Speaker 5: alarming things on the hiring front. We in our own
Speaker 5: scraping of earnings reports that we do at MPP hearing
Speaker 5: the same thing, that there's not a lot of hiring intentions.
Speaker 5: So we could see a cooling in the labor market
Speaker 5: in coming months. I don't necessarily think it'll show up
Speaker 5: on Friday, because there's some seasonality issues that could boost
Speaker 5: the number. But I do think in coming months we're
Speaker 5: going to see softer job numbers and that could lead
Speaker 5: the FED to go either at a steadier pace. I
Speaker 5: do expect them to move in March. I don't see
Speaker 5: there's a reason holding them back. We expect as long
Speaker 5: as the January inflation data don't repeat the surge that
Speaker 5: we saw last January. If it looks more like the
Speaker 5: last six months, which is very benign. I think that
Speaker 5: they go ahead in March and get this process started.
Speaker 5: I think that's what we've been hearing in feed speak
Speaker 5: when they say risks are balanced, that means, you know,
Speaker 5: it's time to start thinking about the next phase of policy.
Speaker 2: Hey, Juiet, you mentioned kind of the labor market. Obviously
Speaker 2: we'll get a good read on Friday here. I mean,
Speaker 2: I don't know. I mean I took two economics classes
Speaker 2: at Duke. I feel qualified to comment on this. I'm
Speaker 2: just shocked at how strong the labor market has been
Speaker 2: and how resilient the labor market's been. What do you
Speaker 2: make of it?
Speaker 5: Yeah, it's been impressive. It was the main reason we
Speaker 5: did not expect a recession last year. The US labor
Speaker 5: market is so diversified. It's an ocean liner, and we
Speaker 5: came into last year just firing on all cylinders and
Speaker 5: it was hard to see a sharp turned down. It's
Speaker 5: a little bit, I would agree, it is with a
Speaker 5: feed it's more balanced now. Hiring still looks okay, but
Speaker 5: it's slowed considerably since last year. Unemployment is low, but
Speaker 5: it's crept up a little bit, and the base of
Speaker 5: hiring the number of companies hiring, the number of sectors
Speaker 5: hiring has really really narrow. Steve Rattner, it's just three
Speaker 5: sectors driving everything.
Speaker 1: Steve Ratner was out the other days doing a thing.
Speaker 1: On morning Joe saw that Steve's got killer chart, killer
Speaker 1: killer chart, showing how odd the employment growth was. This
Speaker 1: explosion out of a stimulus lead pandemic. Doctor Coronado, who
Speaker 1: benefited in the job market? Was it the haves the
Speaker 1: have nots? Did the middle class lift?
Speaker 2: Yes?
Speaker 5: Yes, I mean I think one of the great things
Speaker 5: we saw from this run it Hot experiment was that
Speaker 5: it did benefit the lower end of the earning spectrum,
Speaker 5: and that's something we haven't seen in decades. But the
Speaker 5: lower income workers. You know, it was Amazon competing with
Speaker 5: Chipotle for you know, entry level, lower wage workers, and
Speaker 5: all of a sudden, those workers could get full time
Speaker 5: jobs with benefits at a decent wage. That was it
Speaker 5: was like a level shift up for the lowest earners.
Speaker 5: Now at the top it's a bit more nuanced. Things
Speaker 5: like work from home allow Actually people are not willing,
Speaker 5: they're willing to take smaller raises for more flexibility, and
Speaker 5: so especially supervisory workers didn't get those raises.
Speaker 1: Julia Coronado, thank you so much for the FED brief.
Speaker 2: Do we have flexibility?
Speaker 1: We have flexibility, Okay, I've waited and waited for this interview.
Speaker 1: Robert T. Kaplan, I've done a number of books with him,
Speaker 1: where they've been my book of the Summer. He did
Speaker 1: a brilliant book on China and all their expansion, if
Speaker 1: you will, off of Marco Polo. His definitive book on
Speaker 1: the South China Sea is a must read for anyone
Speaker 1: in the American military to get an understanding of the
Speaker 1: circuitous nature of the South China Sea. And of course
Speaker 1: the way the United States militaries in the Philippines is
Speaker 1: just one example right now, And with that question, my
Speaker 1: book of the year this year was Robert T. Kaplan
Speaker 1: The Loom of Time. Yes, it's between empire and anarchy
Speaker 1: from the mediterrane to China. Boloney, it's a primer from
Speaker 1: Rocco all over to the stands where you don't know
Speaker 1: they're on the map. Robert T. Kaplan joins us right
Speaker 1: now on international relations. Robert T. Kaplan, if you wrote
Speaker 1: The Loom of Time right now, how would you have
Speaker 1: to rewrite it? Mister Netanya who's actions in Israel.
Speaker 6: First of though, it's a pleasure to be with you, Tom,
Speaker 6: I would not have to rewrite it at all, because
Speaker 6: Israel and Palestine are really not in the loom of time.
Speaker 6: And what I did do in the loom of time
Speaker 6: was I said that ultimately that the Middle East will
Speaker 6: change dramatically with a change of regime any Iran that
Speaker 6: will be driven by intern factors, and that I think
Speaker 6: the events of October seventh, twenty twenty three have, because
Speaker 6: of their very ferocity and beast reality and intimacy, have
Speaker 6: probably changed the Israeli calculation on Iran. That sometime in
Speaker 6: the future we're going to see direct Israeli attacks on Iran,
Speaker 6: not now because they have their hands full with Gaza
Speaker 6: and that Iran. You know that as when Iran changes,
Speaker 6: where eighty five million Iranians are brought into the global economy,
Speaker 6: that's when the Middle East will really shift.
Speaker 1: James Travinas was on yesterday the former Supreme Commander NATO.
Speaker 1: He was fiery, incendiary about that we need to take
Speaker 1: actions against Iran. You're one of our experts on what
Speaker 1: we've gotten right, what we've gotten wrong about the cultural
Speaker 1: Sunni Shia debate the idea that Iran has maybe the
Speaker 1: only legiti middle class in the Pan Arab world. What
Speaker 1: is the Robert Kaplan prescription for how we approach Iran
Speaker 1: after three deaths in Jordan?
Speaker 6: Well, first of all, keep in mind that we had
Speaker 6: the United States and especially Israel have been in an
Speaker 6: undeclared war with Iran for years now, and it really
Speaker 6: ramped up after October seventh, and ramped up another degree
Speaker 6: or two after the three deaths at the US military
Speaker 6: base in northeast northeastern Jordan. I think the way they
Speaker 6: have to approach it is, you know, everyone says, let's
Speaker 6: take out their nuclear facilities or their missile facilities. This
Speaker 6: is easier said than done. A lot of their nuclear
Speaker 6: facilities are deep underground. I don't think the Israelis have
Speaker 6: the equipment, you know, the bunker buster bombs to do it.
Speaker 6: I think what the Biden administration has to do is
Speaker 6: increase by degrees its its retaliation, in other words, not
Speaker 6: tit for tat. And the reason why tit for doesn't
Speaker 6: work anymore is because the Iranian strategy is they will
Speaker 6: have their proxies attack Americans and Israelis, and the Americans
Speaker 6: in Israelis will then attack their proxies without hitting Iran directly.
Speaker 6: Therefore Iran suffers no retribution, and because Iran is afraid
Speaker 6: of a dramatic retribution against them, because that could unhinge
Speaker 6: the domestic situation in Iran, which has been tense for
Speaker 6: years now.
Speaker 2: Robert, is their political will in Washington, in the administration,
Speaker 2: in Congress for such a change. Maybe imposture towards Iran
Speaker 2: on the part of the US, Well.
Speaker 6: There might be in Congress. I'm not sure there is
Speaker 6: in the administration because you know this is very unscientific,
Speaker 6: but this is an election year and a wide ranging
Speaker 6: war in the Middle East may not help the Biden
Speaker 6: administration or probably hurt it. So I think that you know,
Speaker 6: in our system, the commander in chief makes the calls.
Speaker 6: All the powerful experts can give him this advice in that,
Speaker 6: but he has to make the judgment call. And I
Speaker 6: think he's ultimately fixated on getting reelected and doesn't want
Speaker 6: a wide ranging war with Iran. But you know that
Speaker 6: being off the table, they have to really ramp up
Speaker 6: the level and ferocity of the attacks on Iranian proxies
Speaker 6: from Syria and the North to Yemen in the south.
Speaker 2: Robert, what do you think the Israelis will do in
Speaker 2: the coming days weeks as it relates to their efforts
Speaker 2: in Gaza. I mean, the response was stronger, probably than
Speaker 2: maybe a lot of people thought, but it's been certainly
Speaker 2: consistent with what they've said. They said they are going
Speaker 2: to wipe out Hamas, and a lot of people question
Speaker 2: whether that's even possible.
Speaker 5: What do they do from here?
Speaker 2: Do you think?
Speaker 6: All right? Well, the problem the Israelis have is if
Speaker 6: they have a permanent cease fire that allows in massive
Speaker 6: amount massive amounts of rebuilding and humanitarian aid. The way
Speaker 6: that Gaza society is structured is that the remnants of
Speaker 6: Hamas will take that aid and restrengthen themselves. You know,
Speaker 6: humanitarian aid is one thing, but rebuilding aid will be
Speaker 6: stolen by Hamas, and then the Israelis will not be
Speaker 6: back to square one, but they'll be back a number
Speaker 6: of steps. Therefore, I think the Israelis will do everything
Speaker 6: to keep putting off American pressure, saying nice things to
Speaker 6: Secretary of State Anthony Blincoln, but ultimately to keep pressing
Speaker 6: on and fighting. Yes, there might be a cease fire
Speaker 6: for a few weeks to get back maybe one hundred
Speaker 6: hostages because Netagne, who is under a lot of domestic
Speaker 6: pressure to get more hostages released. But in the medium term,
Speaker 6: in a long term, I think they keep bombing, you know.
Speaker 6: You know, though it will shift from these sort of
Speaker 6: you know, I wouldn't call it indiscriminate, but these wide
Speaker 6: ranging attacks on infrastructure and the Gaza stripped and changed
Speaker 6: to intelligence driven, targeted you know attacks. We get intelligence
Speaker 6: that these people are in such and such a building,
Speaker 6: we bomb it. And they will keep doing that, and
Speaker 6: they will keep methodically going after the tunnels, flooding them
Speaker 6: with seawater, et cetera. You know, the media loves novelty,
Speaker 6: and there isn't a lot of novelty after you accept
Speaker 6: that the Israelis are bombing and flooding the tunnels. It's
Speaker 6: just takes time. It takes many weeks. So these so
Speaker 6: the media thinks Israel is not making progress, but that's false.
Speaker 1: Robert Kaplan, folks, he will continue with us. Robert T. Caplin,
Speaker 1: I can't say enough about his effort over the years.
Speaker 1: A Loom of Time was my book of the year.
Speaker 1: I just can't say enough about the span from Morocco
Speaker 1: to the stands Robert Kaplan. I've got to go back
Speaker 1: because of the shock of our military at risk to
Speaker 1: the state of the Pacific, the jewel from years ago,
Speaker 1: Asia's Cauldron, the South China Sea, and the end of
Speaker 1: a stable Pacific. We walked away from the Pacific Rim.
Speaker 1: Now we're coming back with four military bases sprawled across
Speaker 1: the Philippines, the debate of Taiwan. Give us an update
Speaker 1: on how you perceive the end of a stable Pacific.
Speaker 6: All right, First of all, the Chinese love to, you know,
Speaker 6: to constantly bully in push around the Philippines, because the
Speaker 6: Philippines is a weak state compared to the other major
Speaker 6: states in the Pacific. But it is also a treaty ally,
Speaker 6: the highest form of ally with the United States. So
Speaker 6: whenever that China bullies around the Philippines, Beijing is also
Speaker 6: poking Washington in the eye. I think what we've seen
Speaker 6: is the creation of this wall of sand where the
Speaker 6: Chinese have literally dumped sand, created atolls, built military bases
Speaker 6: in a very you know, you know, in a very
Speaker 6: slow moving fashion and salami sliced fashion. So that gradually,
Speaker 6: over the last decade since I've published Asia's cauldron. The
Speaker 6: Chinese have essentially taken over the South China Sea without
Speaker 6: the United States being able to do much. It's been
Speaker 6: you know, they've done it by a thousand cuts, and
Speaker 6: each one so small that for us to retaliate, we
Speaker 6: would seem to be over retaliated.
Speaker 1: I'm going to cut in here because I know Paul
Speaker 1: wants to jump in one final question on that. If
Speaker 1: it's been by a thousand cuts, what are there one
Speaker 1: thousand cuts? Is it relates to Taiwan.
Speaker 6: Remember, the Taiwan is the northern border of the South
Speaker 6: China Sea. It is the cork in the bottle of
Speaker 6: the South China Sea. So by taking over the South
Speaker 6: China Sea, China makes tremendous progress in enveloping and making
Speaker 6: an end run around Taiwan's sovereignty.
Speaker 2: Robert, we've seen economic data coming out of China much
Speaker 2: weaker than maybe people would have expected with the reopening
Speaker 2: of that economy. How does that change maybe the calculus
Speaker 2: of President g as he thinks about the positioning of
Speaker 2: China in that part of the world also easy to
Speaker 2: the US.
Speaker 6: Yeah, you know, when you have a a big authoritarian
Speaker 6: state that is economically weaker but militarily stronger and becoming
Speaker 6: stronger and stronger like China. That's a very dangerous situation
Speaker 6: because it because the regime can always be tempted to
Speaker 6: kind of distract its population with nationalist posturing, especially if
Speaker 6: that population isn't producing enough, you know, if that economy
Speaker 6: is not producing enough jobs, especially for young males, et cetera.
Speaker 6: So I think like an economically fragile China going forward
Speaker 6: with even as China is producing more nuclear weapons, more warships,
Speaker 6: more submarine more nuclear powered submarines, the most important thing
Speaker 6: of all. I think it's a very tense situation, you know,
Speaker 6: the combination of those two factors.
Speaker 2: Yep, And I guess you know, from the technology standpoint,
Speaker 2: it really feels like there's a technology cold war between
Speaker 2: China and the West. What do you think the US
Speaker 2: postures should be politically, policy wise towards China over the
Speaker 2: next several years.
Speaker 7: Look, we have to avoid at all costs a major
Speaker 7: hot war in the Pacific. We've you know, the mats
Speaker 7: around the world have absorbed in very well twenty five
Speaker 7: years of warfare in the Middle East, they've absorbed warfare
Speaker 7: in Ukraine.
Speaker 6: They've made adjustments they've priced it in. But a hot,
Speaker 6: high end war in the Pacific would be it would
Speaker 6: be like COVID nineteen. It would be like an extinction
Speaker 6: level event for a period of time. From markets, it
Speaker 6: would disrupt supply chains in a big way and all
Speaker 6: of that. So how do you avoid a hot war? Well,
Speaker 6: you get to what I call a post Cuban missile
Speaker 6: crisis situation. You know, the Cuban missile crisis. Both superpowers
Speaker 6: stared into the Abyss and they were absolutely terrified. And
Speaker 6: afterwards you got the hotline established, nuclear arms limitation talks,
Speaker 6: nuclear test ban, treaty, ultimately detent. That's what we have
Speaker 6: to get to with China. Well, without having a Cuban
Speaker 6: missile crist.
Speaker 1: Dutch Caplin, I'm running out of time, Robert T. Caplin,
Speaker 1: as simple as I can make it, Do we have
Speaker 1: a foreign policy now? After the tumult of the last
Speaker 1: X number of years of presidential politics, all that's going
Speaker 1: on in Washington, whatever anybody's political affiliation, do you see
Speaker 1: a foreign policy in this nation?
Speaker 6: I do, but I see it in danger of changing
Speaker 6: by one hundred and eighty degrees every four years. We
Speaker 6: don't have the continuity of a foreign policy the way
Speaker 6: we used to happen.
Speaker 1: Got to leave it there, Robert Caplin, Thank you so much, folks.
Speaker 1: I'll put it out on LinkedIn and Twitter. It is
Speaker 1: my book of the year, The Loom of Time Lisa
Speaker 1: Mateo with their headlines, Lisa, what do you start?
Speaker 3: All right, we're starting with the Wall Street Journal. Paul,
Speaker 3: this is over to you. It may entice you to
Speaker 3: go electric. Okay, listen to this. There's a German tech
Speaker 3: startup picks called Finn and it has a six to
Speaker 3: eighteen month subscription service, so it's letting people rent ev
Speaker 3: so you can kind of test them out, kick the
Speaker 3: tire or see what you think. It has about twenty
Speaker 3: five thousand subscribers. Now forty percent of those went on
Speaker 3: to buy the EV's after they like driving it. So
Speaker 3: they have mostly in Germany, but they do have about
Speaker 3: two thousand subscribers here on the East Coast, so just
Speaker 3: over see, Americans are not as willing to buy. But
Speaker 3: just over seven percent of its American customers went on
Speaker 3: to buy the EV So this is just another venue.
Speaker 3: I mean, Hurtz tried it. It didn't kind of work out.
Speaker 2: I know, you know, Matt Miller who he got me
Speaker 2: a one week test drive of the four f one
Speaker 2: fifty Lightning and it was awesome vehicle. And I'm not
Speaker 2: a pickup truck guy because I'm a Wall Street shot
Speaker 2: to try pickups. But it was awesome. But the charging
Speaker 2: anxiety exactly is there? Where Where did stop the show?
Speaker 1: Now? Worldwide? Because this is what I hear from everybody
Speaker 1: over beverages of my choice. So you get the car
Speaker 1: from Miller the forty or whatever.
Speaker 2: Yeah, he's a player.
Speaker 1: Where did you charge it?
Speaker 2: I charged at Bloomberg's Princeton offices. Actually I was down
Speaker 2: there for I was down there for a meeting. I
Speaker 2: forgot charge it up and booth and and my country
Speaker 2: club in New Jersey. They have charging stations there, so but.
Speaker 1: Otherwise you charge it at your house.
Speaker 3: No, it will take twenty four hours.
Speaker 2: Yeah, it will take twenty four hours with my little
Speaker 2: on full disclosure.
Speaker 1: And I don't even have a driver's license, folks, that's qualified.
Speaker 2: Tom does not have a driveway.
Speaker 1: I mean, I'm you know, I'm doing hybrid bently, It's
Speaker 1: it's working. What's next killing me? It takes how long
Speaker 1: to charge you?
Speaker 2: Well, if you don't have the big charger thing. If
Speaker 2: you have the big charger thing, then it's pretty quick
Speaker 2: of a number of hours. But you got to drive
Speaker 2: around and look for it to I don't know next.
Speaker 3: Okay, we're going to Bloomberg. Now a lot of layoff news.
Speaker 3: So Bloomberg took a look at who is most likely
Speaker 3: to get fired. Okay, so they interviewed economists, recruiters, consultants,
Speaker 3: career coaches. Turns out middle managers, remote workers because middle
Speaker 3: managers people trying to streamline. Companies trying to streamline remote.
Speaker 1: Work from home.
Speaker 3: Yes, correct, remote because you know, they want more people
Speaker 3: back in the office and it's easier to let go
Speaker 3: of someone remotely.
Speaker 1: Then, so they didn't mention people with a red and
Speaker 1: blue bow tie.
Speaker 3: No, it's not exactly you know what I'm wearing.
Speaker 1: Claudia Some was busting my chop. She tore me to
Speaker 1: shreds out on associate yesterday. We're in a red and blue
Speaker 1: bow tie for doctor some today.
Speaker 6: What do you think?
Speaker 1: Yeah, I think you mentioned ups yesterday.
Speaker 2: I know, six days a week, I know everybody's got
Speaker 2: to come.
Speaker 1: In okay, quickly or one more? You got twenty seconds?
Speaker 3: Go twenty seconds all right, Walt Disney. Parents going crazy.
Speaker 3: They're taking classes about these paid reservation systems, travel agents, YouTubers, influencers.
Speaker 3: It's all the lengths of parents are going to book
Speaker 3: Disney vacations for breakfast, forgetting it, to get.
Speaker 1: What you want to do is spend two hundred dollars
Speaker 1: to get a warmed over pancake so Princess can see Goofy. Yeah,
Speaker 1: and I've actually folks have actually done this. Yes, Ken Philly,
Speaker 1: have you done this with the twins? I mean you have,
Speaker 1: You've been in the kast Goofy.
Speaker 2: I'd have never done Disney with the kids four kids
Speaker 2: zero Disney, Yes, how about that.
Speaker 3: We're only doing this for America for that.
Speaker 1: The truth of the matter is is Lisa Matteo had
Speaker 1: a bon Jovi poster in her bedroom, and so did Denise.
Speaker 1: Denise from the Upper Upper Upper west Side had bon Jovi.
Speaker 4: Bon Jovi.
Speaker 1: We're all bon Jovi today for Paul Sweeney. This is
Speaker 1: a Bloomberg Surveillance podcast bringing you the best in economics, finance, investment,
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