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Speaker 1: listen and always I'm Bloomberg Radio, the Bloomberg Terminal, and
Speaker 1: the Bloomberg Business App. I can do this with Wendy Show.
Speaker 1: She's at Brown University and she's been to every bar
Speaker 1: every place it sells near against at lager Beer in
Speaker 1: Rhode Island. And when I was thirty nine years old,
Speaker 1: I mean two or three nights a week, I was
Speaker 1: at Lupo's heart Break Hotel, really, and they served the
Speaker 1: Meragansett and plastic cups. Professor Schuller nows this is way back.
Speaker 1: I mean, you get it down on to the dark
Speaker 1: side in Newport. Listen, you know, listen to the Blues
Speaker 1: and RBQ and all that Wendy thirty nine years old.
Speaker 1: I'm a vice presidential nominee. Is that too young?
Speaker 2: No?
Speaker 3: I mean I don't think it's too young.
Speaker 4: I think he's navigated a political career after being a
Speaker 4: Yale law school and I'm writing a bestseller.
Speaker 3: I don't think it's too young.
Speaker 4: I think that's one of the things that Americans are
Speaker 4: looking for right, this big contrast between our older main
Speaker 4: candidates and the vps being younger. I think William Jennings
Speaker 4: Bryant would have enjoyed JD. Vance's speech Tom last night.
Speaker 4: I mean it struck almost identical themes to eighteen ninety six.
Speaker 4: I don't know if that should reassure people or make
Speaker 4: them very frightened that we're going backwards.
Speaker 3: But nonetheless, no, I don't think so at all.
Speaker 4: I think that he's positioning self to be the heir
Speaker 4: apparent before.
Speaker 3: Trump even wins this election. So that's an interesting political
Speaker 3: dynamic in the Republican Party.
Speaker 1: Bill Clinton forty six and a half, George W. Bush
Speaker 1: Bush the younger, fifty four and a half, President Obama
Speaker 1: forty seven and a half. I guess the trends there.
Speaker 1: We've been talking this morning, Professor Schiller about isolationism. What's
Speaker 1: the character of the Trump vance isolationism.
Speaker 4: Well, Trump has successfully pitched this in two ways. One is,
Speaker 4: we get bad deals when we go into multi multination agreements,
Speaker 4: particularly NAFTA, which he renegotiated, which by the way, was
Speaker 4: triumphed by new Gingridge and.
Speaker 3: The Republicans in the House in nineteen ninety three.
Speaker 4: So I thought it was amazing that they just pushed
Speaker 4: this all to the Democrats.
Speaker 3: It was pretty clever of them.
Speaker 4: So that's one way, right, we just don't get a
Speaker 4: good deal when we're part of these multinations in the courts,
Speaker 4: and economically we suffer.
Speaker 3: The other is in military arrangements, we end up paying
Speaker 3: most of the bills.
Speaker 4: And that's what Trump had said in twenty sixteen there
Speaker 4: was presidents, and he's saying again that resonates with a
Speaker 4: lot of Americans, particularly in a time where they see
Speaker 4: that they're struggling to pay their bills because of inflation.
Speaker 4: So it's clever to bring these two issues together, mostly
Speaker 4: under an economic tent.
Speaker 5: Wendy, what do we expect to hear from the former
Speaker 5: president tonight at his speech, Well, Paul.
Speaker 4: Donald Trump has remained more disciplined in the last two
Speaker 4: months of his campaign than we've ever seen him either
Speaker 4: as candidate or president.
Speaker 3: In prior years. I mean, incredibly disciplined. So if this.
Speaker 4: Speech which he gave in twenty sixteen was, you know,
Speaker 4: I'm going to make sure we're safe from crime and
Speaker 4: I'm going to block immigrants, I think it's going to
Speaker 4: be very similar to twenty sixteen, but it might be
Speaker 4: just a little bit more moderated, just a little bit.
Speaker 3: He has squashed abortion at.
Speaker 4: The Republican Convention, which is really remarkable given that it's
Speaker 4: been the driving populist force in the Republican Party for
Speaker 4: so long. So if he stays disciplined and doesn't look
Speaker 4: literally too scary to independent voters, then I think they're
Speaker 4: going to walk away and think this convention was a
Speaker 4: big success.
Speaker 1: Let me break into your poll with Professor Schiller of Brown.
Speaker 1: At the European Central Bank, as expected, they leave key
Speaker 1: rates unched, they wait for signs inflation is under control,
Speaker 1: and they say that Christine lan Guard will not swim
Speaker 1: in the rivers.
Speaker 6: Embarrassedlympics, Wendy.
Speaker 5: It certainly appears to a lot of folks, including myself,
Speaker 5: that this has been a really solid convention for the
Speaker 5: Republican Party.
Speaker 6: How much how much momentum do they have coming out
Speaker 6: of this?
Speaker 4: Every party, if they can pull off a successful convention,
Speaker 4: has momentum coming out.
Speaker 3: Mitt Romney had a lot of momentum coming out in
Speaker 3: twenty twelve.
Speaker 4: You know, the government, I'm sorry, the public focuses on
Speaker 4: the party in that week, and if everybody looks good
Speaker 4: and sounds good, they think, hey, maybe this is the
Speaker 4: party we're going to go with. When we have incumbents,
Speaker 4: they're bringing their priors with, you know, anything that will
Speaker 4: push them away. That was the risk for the Republicans
Speaker 4: is that they've got this energized base, more unified now
Speaker 4: from lots of factors, including the tragic attempt on Trump's life.
Speaker 4: So now they got unity and energy, and you know,
Speaker 4: did they mess it up? And they did not mess
Speaker 4: it up, And that's why I think their momentum continues.
Speaker 4: The Democrats are the exact opposite. It's starting to feel
Speaker 4: a lot like nineteen eighty eight when there was a
Speaker 4: quote unquote winnable election for the Democrats and somehow they
Speaker 4: lost it. So I think the Democrats are under tremendous
Speaker 4: pressure to generate energy. And finally, I will say that
Speaker 4: that may require that Biden step aside very soon in
Speaker 4: order to give them the time to ramp up that
Speaker 4: energy for their own convention.
Speaker 6: So where are we with that?
Speaker 5: I mean, it seems like from past discussions, Wendy, that
Speaker 5: this is the decision solely on President Biden. Can he
Speaker 5: be persuaded to perhaps step down or create a process
Speaker 5: for a new Kennedy?
Speaker 4: Well, Paul, the biggest difference between two weeks ago and
Speaker 4: now is that, you know, chief donors, not just George
Speaker 4: Clooney in the New York Times, but you know, the
Speaker 4: people who are actually really writing a lot of checks
Speaker 4: have stopped basically freezing the money, not giving the money
Speaker 4: that's trickling down to send it house races as well,
Speaker 4: you know, and that means the party could completely collapse.
Speaker 4: So without any money, it just strikes me that Biden
Speaker 4: doesn't have a lot of choices here. And the question
Speaker 4: is really directly, you know, send his delegates to Kamala
Speaker 4: Harris or send it to an open convention, right, And
Speaker 4: I think he's still waiting to hear about that, tomm
Speaker 4: He's still waiting to hear do you have a choice
Speaker 4: is the party unified around Kamala.
Speaker 3: If so, then I'll get out.
Speaker 1: Okay, well maybe that's pulling. How do you envision a
Speaker 1: quote unquote open convention like from this Sunday forward? What
Speaker 1: does that look like? Professor Schiller?
Speaker 4: You know, if you ever imagine a political nightmare, an
Speaker 4: open Democratic convention in twenty twenty four would be that,
Speaker 4: because it will be it will expose the fissures and
Speaker 4: fractures within the Democratic Party between the very progressive left,
Speaker 4: the progressive.
Speaker 3: The middle, and you know, they won't be able to agree.
Speaker 4: They're going to want their person to challenge Trump and
Speaker 4: try and make arguments about that.
Speaker 3: All the way from Bernie Sanders Warren all the way
Speaker 3: down to you know.
Speaker 4: Dark horses like Gina Romando, Secretary of Commerce, you know,
Speaker 4: and Gresha and whiber might be dragged back into it.
Speaker 3: Joshua Prero of Pennsylvania.
Speaker 4: It will look like the Democrats can't decide and don't
Speaker 4: know what they're doing, and will only feed into whatever
Speaker 4: nostalgia Trump voters have for Trump, but also.
Speaker 3: Independent voters who want a stable system. And this is
Speaker 3: the big irony of twenty twenty four.
Speaker 4: Now, the Trump and Republicans appear right now to be
Speaker 4: more stable, less chaotic than Biden and the Democrats.
Speaker 1: Professor Schuler, thank you really appreciate it. You know, folks,
Speaker 1: I'm not big on the parlor game. I really don't
Speaker 1: care about four rate cuts, eight rate cuts, bada b
Speaker 1: blah blah blah. But what I do know is it's
Speaker 1: a lonely crew saying the consensus is wrong. I'm gonna
Speaker 1: put Lindsay pigs. It's stephel That group and the leadership
Speaker 1: of Jim Bianco has been profounding. He absolutely nailed the
Speaker 1: challenge of the last mile of disinflation. He joins us
Speaker 1: now from his Chicago Did Jim your note is seeing
Speaker 1: soon discuss?
Speaker 2: Yes, I don't think the FED should be cutting soon
Speaker 2: because I don't think that the economic data is supporting
Speaker 2: a FED rate cut. And that is is that the
Speaker 2: slowing that you've seen in the US economy might have
Speaker 2: already bottomed. It is growing yet somewhere at around two
Speaker 2: and a half percent for the second quarter.
Speaker 1: That's fine.
Speaker 2: And I think that the inflation rate, while it's come down,
Speaker 2: has largely been in a three to four percent range
Speaker 2: for the last year and a half. It's back to
Speaker 2: three percent, the lower end of the range. And to
Speaker 2: use a fancy term, there's some residual seasonality in the data,
Speaker 2: meaning that you get all the weak inflation data in
Speaker 2: the summer and that's what got you down to three percent.
Speaker 2: And then as we move into the fall, I think
Speaker 2: it stiffens up a little bit. FED shouldn't cut, but
Speaker 2: it looks like their intent on cutting.
Speaker 1: So okay, but chum is inflammatory. I mean, it's really
Speaker 1: something you've got as a for the sake of discussion
Speaker 1: and our start set. And we're not talking two point
Speaker 1: x percent. We're not talking Richard Clarita. We're talking to
Speaker 1: Jym bioncos three or four and you'll even print the
Speaker 1: number five. Is America ready for a three percent four
Speaker 1: percent our start?
Speaker 2: Uh? America is ready for it because the economy can
Speaker 2: handle it, the financial markets can handle it. It's the
Speaker 2: economic community that's not ready for it right now. If
Speaker 2: you look at the current level of interest rates and
Speaker 2: you listen to FED speak, they talk about it being
Speaker 2: highly restrictive. It might be retarding the economic growth. And
Speaker 2: again look at the stock market, Look at the rally
Speaker 2: in small cap stocks when we started pricing in September
Speaker 2: in the last week or so, and the data is
Speaker 2: just not there. But the economists still cling to this
Speaker 2: that the neutral funds rate, which is what our star is,
Speaker 2: is two and a half percent. And put this in terms,
Speaker 2: the Fed thinks they need to cut ten times to
Speaker 2: get to neutral. That's why they want to get started.
Speaker 2: They got a lot of work to do. The market
Speaker 2: is probably telling them, no, you probably need only about
Speaker 2: four or five cuts to get to neutral. There really
Speaker 2: isn't any hurry. But if you're gonna give me stimulatives
Speaker 2: interest rates by lowering them, then I'm going to pile
Speaker 2: into small cap stocks. And that's what we've seen in
Speaker 2: the last week.
Speaker 1: And pout on YouTube live chat. They nail it. It's
Speaker 1: a Sweeney It's a Sweeney live chat six percent cash. Yeah,
Speaker 1: I mean that's maybe what Jim's talking.
Speaker 6: What's wrong with that?
Speaker 5: Hey, Jimm, we have seen that rotation into small caps.
Speaker 5: What do you make of that, because, I mean what
Speaker 5: I'm hearing from some of the strategists is that's a
Speaker 5: rotation like we've never seen before.
Speaker 1: Oh yeah, I agree.
Speaker 2: I mean I've looked at the statistics and it is unprecedented.
Speaker 2: Depending on how you look at it, and usually when
Speaker 2: you get a massive rotation in the small cap stocks
Speaker 2: in the past, it's because the market is literally collapsing
Speaker 2: and big cap stocks are going down faster than small
Speaker 2: cap stocks. This one is everything's going up except for yesterday,
Speaker 2: and small cap stocks are going up a lot more.
Speaker 2: But I really think what it is is that this
Speaker 2: is such a macro dependent market and that that negative
Speaker 2: point one on CPI, you know, the bell one off,
Speaker 2: that's it. The Fed's gonna give us cheaper money. Let's
Speaker 2: go to all of the let's go to all of
Speaker 2: the lagging companies, and let's go to all the companies
Speaker 2: that have borrowed more than that would be in the
Speaker 2: small cap space or have losses in the small cap space,
Speaker 2: and that that cheaper money will benefit them. So everybody
Speaker 2: started to exit large cap and rallied. It ran into
Speaker 2: small cap to a degree we've never seen before. So
Speaker 2: there is no historical precedent for what this means, like
Speaker 2: what what this is mean a month or two months later,
Speaker 2: because we've never seen it, especially in a rally.
Speaker 5: So this is an election year, Jim, how does that
Speaker 5: impact the FED really at the end of the day.
Speaker 2: Well, it should and it has in the past, and
Speaker 2: you know, to be very nuanced about it, the FED
Speaker 2: has never changed direction between Memorial Day and Election Day
Speaker 2: changed direction.
Speaker 1: If they were.
Speaker 2: Hiking, they continue to hike, cutting, continue to cut, hold,
Speaker 2: they continue to hold. They're talking about changing directions in
Speaker 2: September by cutting rates. That is unusual. And the fear
Speaker 2: is that interjects themselves into the political debate because Donald
Speaker 2: Trump won't be happy. He'll say that Jay Paul's trying
Speaker 2: to rig the election against him, and then the FED
Speaker 2: would prefer that their name not get mentioned between now
Speaker 2: an election day, and so they shouldn't be part of it. Now,
Speaker 2: what does it mean for markets? At a macro level?
Speaker 2: Stock spawns the dollar. I don't think you can really
Speaker 2: see the machinations in the in the election there. But
Speaker 2: when you go further down the line, if you look
Speaker 2: at maybe the mean stock of Donald DJ you know,
Speaker 2: Trump Media, that one goes up and down. Tesla seems
Speaker 2: to be another stock because Elon Musk is so tied
Speaker 2: himself with Donald Trump. You know, if you look at
Speaker 2: maybe the prison stocks or the body armor stocks, because
Speaker 2: there's going to be more spending on police and protection,
Speaker 2: those kind of things are moving, but not at the
Speaker 2: higher levels. Are you really seeing this election impacting the market?
Speaker 2: Impacting the market?
Speaker 1: Jim? What's the stock market do here? I mean away
Speaker 1: from the economics. So now do you have an SPX
Speaker 1: or dowd Jones faith out twelve months?
Speaker 2: Well, you know that, you know the stock market I
Speaker 2: think is going to really take its cues from interest rates.
Speaker 2: It bottomed to September of twenty twenty two, and it's
Speaker 2: been rally and there's only been two times when it
Speaker 2: didn't rally, a ten percent correction between June and October
Speaker 2: of last year and March and April this year six
Speaker 2: percent correction. What was what was existed during both those
Speaker 2: corrections the tenure field above four and a half percent.
Speaker 2: When the ten year yield gets above four and a
Speaker 2: half percent, the stock market seems to struggle. We're at
Speaker 2: four eighteen right now, so we're not above four and
Speaker 2: a half percent. But if the market starts to feel
Speaker 2: like the Fed's going to ease, the economy's okay. This
Speaker 2: inflation problem is not solved. The rejection of that policy
Speaker 2: could be higher interest rates, and if it gets above
Speaker 2: four and a half percent, that could become a problem
Speaker 2: for the stock market. So right now, I think it's
Speaker 2: going to be okay. It's just going to go through
Speaker 2: this massive rotation that we haven't seen before, and it's
Speaker 2: going to be really dependent on whether or not interest
Speaker 2: rates start to head higher. And I'll conclude by saying,
Speaker 2: I ultimately think by the end of the year into
Speaker 2: the first quarter they will get well above four and
Speaker 2: a half percent again and it will be a problem.
Speaker 2: But they're not there right now.
Speaker 1: Jim Bianco from Chicago, thank you so much. Bianco there
Speaker 1: is it's really important comments there pushing against the Fedzeite
Speaker 1: geys to say the least quot he Van Steinas joins
Speaker 1: us right now, Hugh, I got to rip up the
Speaker 1: script here on ECB, we stagger from Deusenberg to Triche
Speaker 1: and a dragi in the modern day of leguard. How's
Speaker 1: that ECB experience experiment going, h von Steina's.
Speaker 7: Well, great to be back with you, Tom, and glad
Speaker 7: I'm not swimming in the Sein at the moment, left
Speaker 7: alone in the Thames. Look, I think ECB experiment has
Speaker 7: been painful. You and I have chatted many times over
Speaker 7: the last you know, a dozen a dozen and a
Speaker 7: half years really since the Euro has been introduced. How
Speaker 7: we've had to have an awful lot of emergency measures,
Speaker 7: whether it's q E and tltrra's special bank lending schemes
Speaker 7: to fend off the Eurozone crisis. Then we had this
Speaker 7: dangerous experiment of negative interest rates. Finally we're getting back
Speaker 7: to a little bit of normality, even if maybe not
Speaker 7: so normal on the politics side. So I think it's
Speaker 7: been a very painful experience, and I think, well, you know,
Speaker 7: one of the things I'd put in my op ed
Speaker 7: of the ft last week is we still haven't finished
Speaker 7: the reforms. I went to that I was invited somehow.
Speaker 7: It's the ten year anniversary of Banking Union.
Speaker 1: Tom.
Speaker 7: I didn't see you there. But the problem was it's
Speaker 7: only got one leg finished to two parts of the
Speaker 7: house are still unfinished, and securitization in Europe has been
Speaker 7: basically dead as a dodo for fifteen years, and so
Speaker 7: there's plenty of work still to be done.
Speaker 1: I should interview. I introduced him properly here. Vanstein is
Speaker 1: vice chair of Oliver Wyman's Service to the United Kingdom
Speaker 1: with Mark Kearney at the Bank of England and of
Speaker 1: course his endowment work with his Oxford University here Vansteina,
Speaker 1: she sent me a chat the other day, which is
Speaker 1: your wheelhouse, which is trying to keep track of the
Speaker 1: shadows to come in banking and this is always about
Speaker 1: highest quality tranches unloading the garbage of lower quality tranches
Speaker 1: to somebody else. Who's the somebody else this time around?
Speaker 7: It's a great question, tom So. I think that the
Speaker 7: challenge here is it's there's no simple picture. So if
Speaker 7: you take let's say our friends at Apollo or Blackstone
Speaker 7: working with their insurance colleagues, well, insurance companies need investment grade.
Speaker 7: If they can just get even fifty basis points more
Speaker 7: than their competitors over a decade to twelve years, that's huge.
Speaker 7: So in their case, they're really wanting high quality, investment
Speaker 7: grade assets. Clearly, if you're going to get twelve to
Speaker 7: fifteen points of return, you're going to need to be
Speaker 7: taking a lot more risk. And so there's some endowments,
Speaker 7: pension funds and increasingly high network or maybe reaching down,
Speaker 7: but there is no The challenge here is there's not
Speaker 7: a great data set. And that's in way why black
Speaker 7: Rock Port. You know that big data company recently, but
Speaker 7: also it's more complex. I mean, I'm not Look, credit
Speaker 7: is credit, there is a site, there'll be a cycle.
Speaker 7: There's always stuff which goes wrong. So I'm not going
Speaker 7: to be panglossy on that there won't be problems. But
Speaker 7: on the other hand, I don't see that this is
Speaker 7: I don't think there's any reason to panic.
Speaker 5: You just you referenced upbed in the Financial Times back
Speaker 5: about eleven days ago, in that you say Europe's capital
Speaker 5: markets are underdeveloped while its banking sector is insufficiently sized
Speaker 5: to handle the growing demands for capital expenditures tied the
Speaker 5: energy transition, digital infrastructure defense.
Speaker 6: Is there a solution there? I mean, what is the solution?
Speaker 7: Look, I think it's a great point. And so Europe
Speaker 7: relies far far more on the banks. So point one,
Speaker 7: I would be in favor of trying to, you know,
Speaker 7: have interesting investment opportunities which fixed income investors around the
Speaker 7: world or equity ones would want to come and sees.
Speaker 7: So I think part one is making it easier to
Speaker 7: list having a small standardization in the bomb markets. And
Speaker 7: then the piece I was particularly saying securitizations have really
Speaker 7: not rebounded since the financial crisis the way the Europeans
Speaker 7: codified that closed the door after the financial crisis was
Speaker 7: incredible to be penal and therefore it's never really started.
Speaker 7: And I think that's that allowing banks to package loans
Speaker 7: and puncel them on to investors is actually a really
Speaker 7: smart way to help us through Europe's growth. So I
Speaker 7: think really scuritizations there. In the next two weeks we
Speaker 7: might see the Draggy report published, and certainly what my
Speaker 7: sense of that is that he's going to be also
Speaker 7: arguing to try and you know, dust off the plan
Speaker 7: to reopen securitizations. But it's more than just that. I mean,
Speaker 7: you know, whether it's you know how the US elections going,
Speaker 7: Europe will need to spend more on defense, It'll need
Speaker 7: to spend more on energy security, let alone transition and
Speaker 7: of course upgrading it's degenfrastructure. These are vast sums, and
Speaker 7: I don't think the banking system alone is big enough
Speaker 7: and strong enough. And Dragging himself in Portugal the other
Speaker 7: day said he didn't think Europe's banks had enough fast.
Speaker 1: But you know this is important. Bruce chas been publishing
Speaker 1: moments ago folks at JP Morgan and he's just his
Speaker 1: global disinflation to continue in the second half of this year.
Speaker 1: What does disinflation mean? You've unsteen as to the financial system.
Speaker 1: It's constructed as a good. I don't buy it. There's
Speaker 1: an ambiguity.
Speaker 7: So it depends which which bit of disinflation we're talking
Speaker 7: about here, If it's sort of if it's Chinese exports
Speaker 7: impacting Europe, that's one thing. It depends where we're going.
Speaker 7: I mean, as we're seeing from THECB today, there's not
Speaker 7: massive disinflation. There's quite frankly still inflationary pressures in the system.
Speaker 7: But at the end of the day, banks are lever
Speaker 7: plays on growth and what we've seen is very Whilst
Speaker 7: loan growth in the last bank lending survey has picked
Speaker 7: up a little bit, it's still really low. I mean,
Speaker 7: in the last decade, bank loan growth in Europe has
Speaker 7: been half that in the States, and that's because Europe
Speaker 7: has not been growing as far. So I think that
Speaker 7: disinflation and the pressures on exports for Germany, the pressures
Speaker 7: on on growth in France, these are ones which will
Speaker 7: be challenging. But what what where, Let's be clear, for
Speaker 7: every problem is a solution. In my conversations with bank
Speaker 7: CEOs and CFOs. They are looking to optimize their balance sheets.
Speaker 7: The reason why they're they're partnering up with private credits.
Speaker 7: Only this morning we saw a Lloyd's, the number one
Speaker 7: bank in the UK, partnering up with oak Tree part
Speaker 7: of Brookfield is because they want to try and you know,
Speaker 7: free ups and capital to offer dividends and buybacks. So
Speaker 7: for every problem there's a solution, and I think that's
Speaker 7: why the private credit trade in Europe is actually still
Speaker 7: quite interesting.
Speaker 1: You haven't seen this, Thank you so much for Oliver.
Speaker 1: Whyman I can't say no? The front pages of Lisa Matteo,
Speaker 1: we start strugging with a pause and nugget I saw
Speaker 1: this party, I said, are you kidneming?
Speaker 8: Lisa discussed are the Warner Brothers. Apparently they need to
Speaker 8: boost their share price right, so they may be looking
Speaker 8: at splits digital streaming and studio business from its TV networks.
Speaker 8: So this is from the Financial Times. They're saying CEO
Speaker 8: David's as I've looking into a few options from selling
Speaker 8: the assets to actually yes, splitting off its Warner Brothers
Speaker 8: movie studio and that Max streaming service into a new company.
Speaker 8: They haven't hired an investment banker and anything like that.
Speaker 8: But it's top manager reportedly talking to advisors. But I
Speaker 8: mean the whole thing is about it, I guess boosting
Speaker 8: the share price.
Speaker 5: Yeah, And I think about Warner Brothers Discovery. They have
Speaker 5: two very interesting big investors. One is capabillionaire John Malone
Speaker 5: and the other one is the new House family which
Speaker 5: controls Conde Nest.
Speaker 6: Very very smart media folks there, yes, And they know
Speaker 6: where the value is.
Speaker 5: And the value is probably in the streaming businesses, not
Speaker 5: necessarily in some of the legacy networks.
Speaker 1: It in vast offices here, the surveillance offices. I sat
Speaker 1: fifteen feet that way the day Chrysler ran over the
Speaker 1: bondholders and I'm sorry. The ft explains this beautifully, folks.
Speaker 1: What they're going to do is take the gazillions of
Speaker 1: debt and put it into the news division. Is they
Speaker 1: wander off with Sweeney's streaming company? Got to be kidn
Speaker 1: me and this day and age, they're gonna get away
Speaker 1: with that?
Speaker 7: With it?
Speaker 6: I don't don't know. I don't know. I mean again,
Speaker 6: they it's interesting.
Speaker 5: They have so much debt on this company that they
Speaker 5: have to put the debt where the cash flow is
Speaker 5: to support the debt.
Speaker 6: So we'll see.
Speaker 5: But again, this is a typical it's such a typical deal.
Speaker 5: I'm already envisioning the pitch book because that I would
Speaker 5: have put together to go to the board and go
Speaker 5: to the management.
Speaker 6: Here it's just right out of the central casting of
Speaker 6: it is of M and A, you know, diabetes.
Speaker 1: But are those times still in play? That's well, I think,
Speaker 1: I wonder the rules of the road has changed.
Speaker 5: They may have, but boy, look at the principles here again,
Speaker 5: John Malone, the Conde Nest, David Zaslov the CEO. This
Speaker 5: is in their wheelhouse. They think about these things. Where's
Speaker 5: the value and what can support the debt?
Speaker 6: So we'll see.
Speaker 1: Okay, so I got I can bring it up on
Speaker 1: the Bloomberg. I got forty two bills in debt, yep.
Speaker 1: And they're gonna they're gonna give that. They're gonna hand
Speaker 1: that to Wolf Blitzer.
Speaker 6: Yes, exactly, we'll see.
Speaker 1: That's exactly what we're talking about. Margaret running here, Margaret,
Speaker 1: you take ten billion of debt, and well if you
Speaker 1: take thirty two billion of debt, sure, and that's what
Speaker 1: we're talking about.
Speaker 5: And there's ten billion of EBITDAD to support that. So
Speaker 5: it's about four times net debt to EBITDA.
Speaker 6: That's okay, it's not crushing, but it's it's it's tough.
Speaker 5: They weren't fifty two billion in debt just a couple
Speaker 5: of years ago, so they are paying it down. They've
Speaker 5: got five billion dollars a year free cash flow. There
Speaker 5: is stuff there to build on, but I'll leave it to.
Speaker 1: Moffatt, Nathan Simon us. We'll get the adults in here
Speaker 1: to describe this. Maybe Mar Gabelli. Ok No, I'm sorry, Li,
Speaker 1: So we get carried away in it.
Speaker 8: No, it's good, it's good. Another deal, okay, this was
Speaker 8: for the WNBA. Apparently the framework is set the new
Speaker 8: media rights deal with Disney, NBC, Amazon. It was first
Speaker 8: reported by The Athletic. The Wall Street Journal confirmed the numbers.
Speaker 8: The league set to bring in approximately two point two
Speaker 8: billion over eleven years. Now, if you break down the numbers,
Speaker 8: so the WNBA's current media rights valued at about sixty
Speaker 8: million per year, this new structure would be in the
Speaker 8: annual range of two hundred million.
Speaker 6: So you see the different Still still right right in
Speaker 6: my opinion?
Speaker 8: Still well, I mean, we're talking about the age, I
Speaker 8: would not wake up that element behind the w.
Speaker 5: If I were the WNBA, I would not lock up
Speaker 5: for this long. I think, I think, I think there
Speaker 5: are really at the cusp was Caitlin Clark and all
Speaker 5: the other great young players into the league.
Speaker 6: This it's everywhere you.
Speaker 5: Go to ESPN dot com, you pull up the app,
Speaker 5: you get the n w NBA stuff before you get
Speaker 5: like Major League Baseball, and that's how they rank it.
Speaker 6: It's unbelievable. So if I were the w NBA, I'd
Speaker 6: go short here on my deal.
Speaker 1: But that's just what do you got next.
Speaker 8: Cidel founder Kenneth Griffines. He apparently has a thing for collectibles,
Speaker 8: so he set a record for a fossil sold at auction.
Speaker 6: He paid forty four point six.
Speaker 8: Million dollars at souther B's for a one hundred and
Speaker 8: fifty million year old stegosaurus. Its name is Apex. It's
Speaker 8: about eleven feet tall. It was found in Colorado. It
Speaker 8: was actually expected to get six million, and he paid
Speaker 8: forty five million for it. Some people say he wants
Speaker 8: to lend it to a US museum, but I mean,
Speaker 8: he's done these trophy pieces before, but this is just
Speaker 8: just go buy.
Speaker 6: A sports team.
Speaker 8: I guess he likes buying.
Speaker 6: All right, he donates to it.
Speaker 1: ABC has a Tyrannosaurus wrecks. That's the that's the mean
Speaker 1: one in the movies, the meat Eater. Its nickname was
Speaker 1: Stan and it's sold for thirty one million four years ago.
Speaker 1: Thank you ABC for that. I made a joke about legos.
Speaker 1: I mean the kids. The kids are all into it
Speaker 1: and then it's over right. You know it's a Stegosaurus.
Speaker 1: There's one, and I think it's in England. I can't remember.
Speaker 1: There's one that's very cool in a museum.
Speaker 6: And it's got the bumps on the back or something
Speaker 6: like that.
Speaker 1: It just kills. Take it back to my geology university, Lisa,
Speaker 1: save us.
Speaker 8: Okay, the last one. This one's for the you talked
Speaker 8: about legos and stuff. Okay, this is a new Beanie baby.
Speaker 2: If you've heard about it.
Speaker 8: You know, beanie babies kind of faded after a while,
Speaker 8: but it is a big deal. So now they have
Speaker 8: something called a Beanie Bouncer. It's this little four inch
Speaker 8: toy and you can bounce it. It has a ball
Speaker 8: inside and it goes about fifty feet high.
Speaker 6: So the kids are going.
Speaker 8: To wreck haf it inside your house with this exactly?
Speaker 8: You take it outside, take it outside. Okay, but they're
Speaker 8: saying that it's got the patents for it. It's going
Speaker 8: to go along with the patents. It comes in like
Speaker 8: twelve animal characters. But this could be the hot new
Speaker 8: thing at Christmas.
Speaker 1: Remember the rubber ball that you slammed on the driveway
Speaker 1: and you tried to get it to go over the house,
Speaker 1: which you did four or five times until a second
Speaker 1: floor window went out.
Speaker 6: I got stuck in a gutt hard. But it's good.
Speaker 8: You get the kids outside, so you get them off
Speaker 8: the technology out outside.
Speaker 6: I'm off for that.
Speaker 1: Do your kids go outside?
Speaker 8: They do because they're forced. They have sports, ever their
Speaker 8: forwards out of time. It's a huge dude, but it's
Speaker 8: you do. You have to get them off of remember
Speaker 8: when they were little, like getting them off the devices
Speaker 8: and getting them outside.
Speaker 6: Got to do it.
Speaker 1: It's okay, Well, thank you, Lisa. Is that it one?
Speaker 6: That's it?
Speaker 8: You know there was one about alcohol being bad for
Speaker 8: your health, but that was in the journal. But I
Speaker 8: think that wouldn't go that would go over very well here.
Speaker 1: Yeah, I said, nah. Next this is the Bloomberg surveillance podcast,
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