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Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg

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Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern

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Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App.

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Speaker 1: Listen on demand wherever you get your podcasts, or watch

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Speaker 1: us live on YouTube.

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Speaker 2: Stephanie Roth joined us from Wolf and was really, really

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Speaker 2: quite good about the moment. None of that mattered. The

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Speaker 2: conversation is ancient history. She joins us for a reset

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Speaker 2: after what we've witnessed in the last say, seventy two

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Speaker 2: hours as well, I don't want you to do it?

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Speaker 2: What if I want you to do how the fed

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Speaker 2: Ex post waiting for data adapts and adjusts to the

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Speaker 2: instabilities coming out of the Oval office in sixteen under Pennsylvania.

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Speaker 3: Don't tell me. They just ignore it.

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Speaker 4: But they don't just ignore it, but they probably don't

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Speaker 4: do much because it doesn't make sense for them to

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Speaker 4: be cutting if there's the potential for tariffs to be moving,

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Speaker 4: inflation expectations higher.

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Speaker 2: Are they more frozen than they were forty eight hours ago?

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Speaker 5: No? Probably not.

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Speaker 3: So.

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Speaker 4: Okay, here's what we learned right, Tariffs on Canada and Mexico.

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Speaker 4: That's what was really going to impact the US economy.

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Speaker 4: That was going to be a real inflationary force. Could

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Speaker 4: have boosted inflation by fifty plus basis points. It got

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Speaker 4: delayed a month base cases. They probably just don't happen.

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Speaker 4: I think that's what kind of that's what the message was.

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Speaker 4: Trump probably wanted to do the China tariffs regardless, so

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Speaker 4: the fact that that was a much smaller ten percent

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Speaker 4: that was probably gonna happen either way, and he's going

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Speaker 4: to continue to wratchet up tariffs on China. The Canada

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Speaker 4: Mexico ones made a lot less sense, especially when we're

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Speaker 4: talking in Canada.

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Speaker 6: So have you adjusted your inflation out look at all

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Speaker 6: for these tariffs or you're just kind of waiting to

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Speaker 6: see what actually gets enacted if anything.

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Speaker 4: So, based on our numbers, the China tariffs could boost

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Speaker 4: infation by about ten basis points this year and hit

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Speaker 4: GDP by about ten basis points as well. So at

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Speaker 4: this point, I'm just going to wait and see what

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Speaker 4: happens in the next two weeks.

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Speaker 5: Could that be plus or minus ten baks points for sure?

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Speaker 4: The rest of it, Yeah, but we're we're not assuming

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Speaker 4: certainly any of the broader tariffs going to effect at this.

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Speaker 2: Point, I'm absolutely fascinated by Atlanta GDP, which is a

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Speaker 2: squishy number out on your four percent real GDP. Let's

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Speaker 2: say that's an anomaly. But do we just continue to

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Speaker 2: get the growthiness surprise that is made up the last

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Speaker 2: eighteen months.

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Speaker 4: At some point it will probably cool down, but we're

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Speaker 4: still looking, we're.

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Speaker 5: Rating, and we're still your own palls doing well. That's

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Speaker 5: what your own powers. And there's things.

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Speaker 4: There's a couple of things that are truly boosting the

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Speaker 4: US economy and equity equity valuations are a big part

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Speaker 4: of it. Networth in the US economy has been incredibly strong,

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Speaker 4: over fifteen trillion dollars above the prior trend. And if

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Speaker 4: you assume a couple cents on the dollar, that's a

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Speaker 4: real boost to consumer spending something of the two and

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Speaker 4: of one to two percent. And then, by the way, crypto,

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Speaker 4: which you know doesn't go talking about quite as much,

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Speaker 4: but there's also real wealth there and the marginal propensity

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Speaker 4: to consume or the desire to consume for every dollar

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Speaker 4: of wealth and in the crypto space is higher than.

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Speaker 5: What it would be.

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Speaker 3: This is important.

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Speaker 2: You think the PhDs that the equities building, the echos

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Speaker 2: building are looking at the marginal propensity to consume a

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Speaker 2: bit dog.

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Speaker 4: I think they're starting to because it seems like there's

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Speaker 4: a legitimate impact.

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Speaker 5: At this point, you can't really ignore.

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Speaker 6: It, all right, Stephanie, So what is your GDP call

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Speaker 6: for twenty twenty five and twenty twenty six.

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Speaker 4: GDP for twenty twenty five is two point two inflation

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Speaker 4: of two three twenty twenty six, we're looking at something

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Speaker 4: closer to two percent. But I'm starting to get worried

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Speaker 4: that terrifs will become a real issue for twenty twenty six,

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Speaker 4: which would then put GDP below two percent.

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Speaker 6: And is that driven by I mean, again, the consumer

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Speaker 6: is seventy percent of this economy, so having any growth

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Speaker 6: this year and next year flies that you have some

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Speaker 6: confidence in the consumer.

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Speaker 4: I do have confidence in the consumer. The consumer is

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Speaker 4: doing just fine, especially if they don't get hit by

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Speaker 4: these massive tariff at least this year. They have wealth

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Speaker 4: and inequities in real estate. The labor market is just fine.

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Speaker 4: We didn't talk about that, but jobs are probably going

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Speaker 4: to be print another solid one this month, and that's

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Speaker 4: what drives the consumer. They might be upset about the

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Speaker 4: price of a lot of goods, especially when it comes

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Speaker 4: to groceries.

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Speaker 5: But we just have largely kept up with a lot

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Speaker 5: of those goods.

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Speaker 2: Jason Furman does a lot of work on an ecumenical

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Speaker 2: inflation call, looking at different sum to annualized returns three

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Speaker 2: month to annualize six months.

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Speaker 3: All of them are sub three percent.

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Speaker 2: As a general statement, will the shock that we see

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Speaker 2: out the next three months, two three, four FED meetings

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Speaker 2: be one or some of those annualized returns being under

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Speaker 2: two percent?

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Speaker 4: I wouldn't bet on the key one numbers being under

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Speaker 4: two percent because we still have seasonal problems that if

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Speaker 4: you have to be a dress the data.

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Speaker 5: But Q two certainly could be Wow.

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Speaker 2: I mean that's a that's a wild observation, and that inflation,

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Speaker 2: you know, Oeer finally becomes well behaved in real estate

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Speaker 2: becomes well behaved. Is that enough to generate a rate

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Speaker 2: cut discussion? I just don't buy it. Given the political

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Speaker 2: madness in.

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Speaker 4: Washington we have, we have a rain cut in our

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Speaker 4: forecast for May. But to be fair, that one's very.

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Speaker 3: Much would you like to make some news here?

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Speaker 4: Certainly not, but that one's really into that one's going

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Speaker 4: to really rely on the employment data in the next

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Speaker 4: couple of months being a little bit softer and inflation

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Speaker 4: being subdued. We're going to have to get past the

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Speaker 4: first January, February, March prints in terms of inflation, because

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Speaker 4: that's where you see the real seasonality problems and that's

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Speaker 4: going to continue again.

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Speaker 6: Well on Friday, we are going to get the change

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Speaker 6: in nonfarm and payrolls, and you know, one hundred and

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Speaker 6: seventy thousand is the consensus. Quite a normal discussion about

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Speaker 6: Friday exactly, and that big print last month of two

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Speaker 6: hundred and fifty six thousand. What is your view of

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Speaker 6: the labor market. I mean, we're going to get some

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Speaker 6: some people are concerned that, Okay, nobody's firing anybody, but

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Speaker 6: nobody's really hiring either.

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Speaker 4: How do you think about the labor market, Yeah, the

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Speaker 4: labor market's doing okay. There's been a lot of volatility

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Speaker 4: when it comes to strikes and but weather, so it's

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Speaker 4: hard to look through it. But our base case is

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Speaker 4: the trend in payrolls is somewhere around one hundred and

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Speaker 4: sixty thousand, which is really quite solid. This year is

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Speaker 4: going to present some challenges though, because immigration trends are

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Speaker 4: going to be going the other way than what they've

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Speaker 4: been the past couple of years. So a lot of people,

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Speaker 4: rough were estimate about three point six million people are

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Speaker 4: going to lose their visas to work over the next

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Speaker 4: two years, which will pose some challenges for the labor market.

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Speaker 4: And that's a lot of that role that's going to

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Speaker 4: happen in the bout half of this year.

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Speaker 6: Like have you looked back over the last three four

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Speaker 6: years about migration, legal and illegal, how that contributed to

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Speaker 6: the labor force, because it feels like it's been a

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Speaker 6: non you know, a fairly significant driver.

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Speaker 4: It's probably one of the single biggest reasons why the

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Speaker 4: Fed was able to actually rebalance the economy without causing

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Speaker 4: our session is because we've got the supply side of

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Speaker 4: the labor market actually helping to bring down inflation, so

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Speaker 4: we didn't need the demand side of the economy to

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Speaker 4: slow down quite as much. Now this is going the

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Speaker 4: other way, which is into some degree okay, because now

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Speaker 4: demand for labor has cooled compared to where we were

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Speaker 4: two years ago. But this could present some challenges. We

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Speaker 4: might start to see wage inflation pick up towards the

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Speaker 4: back part of this year as labor supply again becomes constrained.

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Speaker 3: Paul mentioned this in Ana Wong and Bloomberg Economics.

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Speaker 2: Has provided global leadership on this, and this is the

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Speaker 2: fourteen it's like Howard Johnson's It's like the pistachio revision

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Speaker 2: or the butternut maple nut or revision. The revisions like

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Speaker 2: this job's day. Are there one or two to study

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Speaker 2: or is it just chaos through the spring and revisions

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Speaker 2: of the job market.

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Speaker 4: So this is going to be a chaotic report because

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Speaker 4: this report, because we get annual revisions to both the

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Speaker 4: headline jobs numbers and then also the data that associated

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Speaker 4: with the unemployment rate.

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Speaker 5: To what's going to.

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Speaker 4: Happen is we're going to get a large upward revisi

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Speaker 4: into the population which is tied to the measure for

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Speaker 4: the unemployment rate.

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Speaker 5: So it's going to be very confusing.

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Speaker 4: You can't compare the January reading to December numbers because

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Speaker 4: the revisions kind of don't don't work so well that way.

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Speaker 4: But so there's gonna be a lot of noise the

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Speaker 4: combination of massive revisions to the prior prior years. By

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Speaker 4: the way, they're going to be adding three point six

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Speaker 4: million people roughly to the labor force that weren't previously there.

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Speaker 4: And then we also have the impact of the fires

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Speaker 4: on going to be impacting the payroll's numbers, so that's

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Speaker 4: where there could be a surprise that might be difficult

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Speaker 4: to summer.

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Speaker 2: Here, we're going to see a higher unemployment ratar we

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Speaker 2: shock with revisions and go to three point nine.

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Speaker 4: Percent, So for this part we're looking for four to

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Speaker 4: one because they're going to revise both the numerator and

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Speaker 4: the denominator, so in theory it should be all kind

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Speaker 4: of help.

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Speaker 2: This is the differential equations part of the show enumerator

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Speaker 2: and the denominator a wise one.

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Speaker 4: Yes, the moving the numertor and the denominator a base case.

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Speaker 3: Which partial differential is most important.

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Speaker 4: What we'll see is we'll get a little bit of

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Speaker 4: upward pressure on the unemployment rate because there's going to

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Speaker 4: be more people that have a slightly higher unemployment rate.

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Speaker 4: So just the mixshift of people will be slightly higher

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Speaker 4: terms of uneplom rate, but it shouldn't be massive. The

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Speaker 4: thing that we're going to see over the next year,

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Speaker 4: which is important, is that the unemployment rate will probably

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Speaker 4: nudge down throughout the course of twenty twenty five, as

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Speaker 4: labor comes constrained as a result of immigration, trends being

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Speaker 4: pulled back pretty substantially.

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Speaker 3: Interesting.

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Speaker 2: See when you were in class and everybody who's pulling

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Speaker 2: the quality See.

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Speaker 3: Yeah, Stephanie was up in the third take a notes,

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Speaker 3: nailing the.

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Speaker 2: Curve shift it right out to it at AAA plus.

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Speaker 3: We hated her.

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Speaker 6: Yeah, gentlemen, c I was planning my next tea time

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Speaker 6: across the street to do golf course. Stephanie, step back here.

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Speaker 6: Talk to us about just a little bit more of

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Speaker 6: a global view here. What's the impact on the global economy,

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Speaker 6: on the US economy if China just does not get

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Speaker 6: back on its feet.

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Speaker 4: You know, we've been pretty insulated from China's economy for

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Speaker 4: the past couple of years.

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Speaker 5: And I think it's going to be more of the same.

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Speaker 4: The US economy has been exceptional and Chinese economy has

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Speaker 4: been quite sluggish.

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Speaker 5: And I don't think that's going to change anytime soon.

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Speaker 6: And I mean there's also the European economy has been

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Speaker 6: weaker than they would certainly like. Certainly Germany, with its

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Speaker 6: reliance on China and with its reliance on Russian for fuel,

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Speaker 6: has been challenged as well, but that hasn't seemed to

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Speaker 6: really impacted the US economy that much.

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Speaker 4: No, it's been it's been pretty independent of the global cycle.

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Speaker 4: And I think that's a lesson that we've learned as

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Speaker 4: we've over time just shifted to become our sort of

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Speaker 4: independent business cycle.

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Speaker 5: And that will probably be the case for quite some time, and.

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Speaker 4: The US economy will probably continue to remain fairly robust

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Speaker 4: and the global economy might be kind of sluggish like

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Speaker 4: we've seen for the past couple of years.

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Speaker 3: Well, how's Paul doing.

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Speaker 2: I mean, to me, they have to work ex posts,

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Speaker 2: they have to be data dependent. You are brilliant unforded

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Speaker 2: forward guidance at the fed to side show. But the

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Speaker 2: answer is just they you know, they just they have

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Speaker 2: to go day by day, months by month.

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Speaker 3: Now.

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Speaker 4: Yeah, And I mean it's tough for the for market

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Speaker 4: participants because we don't really know exactly what the framework

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Speaker 4: looks like. They haven't said a very clear framework for

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Speaker 4: how they're thinking about it what to look for. The

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Speaker 4: clearest thing that we've learned so far is it's going

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Speaker 4: to a lot of it's going to come down to

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Speaker 4: inflation expectations. Powell has pointed us to the September twenty

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Speaker 4: eighteen teal book, and that basically said they had two

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Speaker 4: different scenarios for how triffs impact the economy, and the

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Speaker 4: differentiating factor between whether they have to cause a recession

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Speaker 4: or not is if inflation expectations are angered.

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Speaker 2: Step Thank you Stephanie roth Wolf research with us just

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Speaker 2: really got a huge response when she's on some real

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Speaker 2: clarity there about an ex post Central Bank.

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Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live

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Speaker 1: weekday afternoons from seven to ten am Eastern Listen on

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Speaker 1: Applecarplay and Android Atto with the Bloomberg Business Up, or

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Speaker 1: watch us live on YouTube.

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Speaker 2: Let us talk about President Trump's fascination with a gilded age,

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Speaker 2: which is up to World War Two.

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Speaker 3: There was an artist in Paris and then in.

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Speaker 2: America immediately acclaimed as a young lad named Gus Sangoden,

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Speaker 2: and in nineteen fourteen he made a gold coin, a

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Speaker 2: twenty dollars double eagle gold coin, which is, you know,

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Speaker 2: it's about the price of a weekend ticket right now,

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Speaker 2: three thousand dollars for that. But the answer is there

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Speaker 2: was a time where there were gold coins and they mattered,

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Speaker 2: and it was a gilded age, and the president is

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Speaker 2: fixated on that time. James Steele owns a high ground

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Speaker 2: on this it joins us this morning. Gold at twenty

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Speaker 2: eight hundred dollars an ounce is gold within a non

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Speaker 2: flexible system, a far more dynamic system made more dynamic

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Speaker 2: by Richard Nixon in nineteen seventy one. Are we in

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Speaker 2: a gilded age of your gold as we were in

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Speaker 2: nineteen fourteen with the twenty dollars double eagle?

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Speaker 7: Well, what we are thank you for having me, Tom,

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Speaker 7: And what we are is in a situation, is in

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Speaker 7: a climate ever since Richard Nixon released us from Bretton

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Speaker 7: Woods August seventy one. Yes, indeed, I remember it. I

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Speaker 7: was at Catholic school at the time, and I remember

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Speaker 7: when that was released and gold was allowed to begin

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Speaker 7: to float freely and was freely completely freed by nineteen

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Speaker 7: seventy three, and gold has continued. Gold fell throughout the nineties,

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Speaker 7: but on balance has risen and we are in an

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Speaker 7: age where government does not dictate what the gold price.

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Speaker 3: That's where I want to go. Okay.

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Speaker 2: We had a static, rules driven, government driven environment up

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Speaker 2: until Bretonwoods nineteen forty four, and the Nixon destroyed it.

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Speaker 2: And yet now the paper reports are we've got bars

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Speaker 2: of gold coming from London.

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Speaker 3: Over to New York.

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Speaker 2: You're expert on this government's trying to control gold now,

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Speaker 2: trying to get us back to that time and place.

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Speaker 3: I don't think they can do it.

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Speaker 7: No, no, and I don't think in that sense that

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Speaker 7: they that they want to. One of the things about

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Speaker 7: when we were on a gold standard save from the

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Speaker 7: end of the Napoleonic War up until the First War,

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Speaker 7: and it was enormously successful. Sterling was the world's reserve

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Speaker 7: currency backed by gold. But the reason that it worked

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Speaker 7: was because that was at a time of incredible expansion

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Speaker 7: in the supply of gold. That's when the North America, Australia,

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Speaker 7: Southern Africa really opened up, so and effectively the increase

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Speaker 7: in gold was like raising the money supply. And we're

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Speaker 7: not in that situation now. We couldn't have the world's

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Speaker 7: currencies tied back to the dollar.

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Speaker 3: Again.

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Speaker 7: The gold market isn't big enough or fluid enough in

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Speaker 7: the modern times. But it worked, and it sufficed for

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Speaker 7: a long period and made trade very very stable.

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Speaker 3: Did it but.

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Speaker 2: Kept the rich rich and subdued the middle class. And

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Speaker 2: then we said we needed a credit expansion, and that

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Speaker 2: was an overlay out of the New Deal, the depression

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Speaker 2: and all that into World War Two. So what's the

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Speaker 2: next step here for gold? Paul?

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Speaker 3: You bought it at what one thousand an ounce? Eight hundred?

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Speaker 3: I mean, what's the next step? James Deal?

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Speaker 7: Well, indeed, I mean, and I do like the historical

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Speaker 7: reference because William Jennings Bryan said, not a crossify us

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Speaker 7: on a cross of silver, because we were on a

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Speaker 7: by metallic Is.

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Speaker 3: Donald Trump saying it right now? I think there's some

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Speaker 3: element of that.

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Speaker 7: Well, I think that what we're seeing is a geopolitical uncertainty,

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Speaker 7: uncertainty over trade and taris and what gold is, it's

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Speaker 7: it's a release valve. It allows for that uncertainty to

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Speaker 7: be made visible.

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Speaker 6: So China, where are they in terms of demand here

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Speaker 6: for gold?

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Speaker 3: Because I know the.

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Speaker 6: Last several times we spoke, you were really explained to

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Speaker 6: us how China, the government, China the population are incremental

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Speaker 6: buyers of gold, and that's been one of the reasons

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Speaker 6: that gold's been moving higher. Is that still the case?

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Speaker 3: Yes?

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Speaker 7: On balance, China is in the unusual position of being

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Speaker 7: both the world's largest producer of gold and the world's

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Speaker 7: largest consumer and often the world's largest importer, rivaling with

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Speaker 7: India depending upon the year. So if you can think

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Speaker 7: about taking corn to Iowa, I mean, that's what their

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Speaker 7: importing gold is like. But high prices have curbed retail

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Speaker 7: demand fifty percent of all physical demand in the world.

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Speaker 7: I'm not talking about what we trade on Wall Street

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Speaker 7: or the city, but underlying demand is between China and India. Yes,

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Speaker 7: and these high prices.

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Speaker 3: It's our great honor to bring you. James Steele of

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Speaker 3: HSBC and I want to go to care Nada.

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Speaker 2: Kin Ross was an amalgamation of three or four companies,

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Speaker 2: you know, typical Canadian.

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Speaker 3: Mining out of Toronto and that. But you've been to

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Speaker 3: their mine in Alberta. Is it like a Disney movie?

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Speaker 3: Did you go with White Fang?

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Speaker 7: Well, without without speaking about to say anyone mine in particular,

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Speaker 7: I have been to mines in Canada, the US, and Australia.

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Speaker 7: It's always a it's always interesting. You have to dig

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Speaker 7: deep for gold. One of the interesting things about mining

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Speaker 7: is that the or grade all over the world is dropping.

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Speaker 7: We've mined a great deal of gold, about fifty percent

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Speaker 7: of all of my gold that's ever been mined was

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Speaker 7: mine between nineteen fourteen and up into the fifties, and

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Speaker 7: so we have to go to further and further out

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Speaker 7: like Papua New Guinea, into the jungle in Indonesia, places

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Speaker 7: like that.

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Speaker 2: The gold in this Bulgari snake bracelet that Lisa is

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Speaker 2: looking at for Valentine's Day is that.

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Speaker 3: Newly mine gold. Where does that gold come from? It's

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Speaker 3: likely to be.

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Speaker 7: But the marvelous thing about gold is that it's never

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Speaker 7: consumed and it doesn't tarnish. So you could have a

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Speaker 7: piece of jewelry around your neck that goes back to

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Speaker 7: ancient Rome or ancient Egypt. It's unlikely, but you might scam.

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Speaker 3: You just described you.

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Speaker 7: You can't guarantee it, especially after it's been refined into

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Speaker 7: a bar and the bar has been re refined.

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Speaker 2: Fort Ontario twenty six percent. I did, Quebec, yeah, twenty

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Speaker 2: six percent, Quebec nine percent, British Columbia and the rest

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Speaker 2: is a Disney movie up in the mountains with they

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Speaker 2: wear ll bean boots.

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Speaker 6: We've been talking a lot about gold because it is

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Speaker 6: up almost eight percent this year, but silver is up

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Speaker 6: ten percent.

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Speaker 3: What's going on?

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Speaker 7: With silver, well, silver very often. I wouldn't go so

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Speaker 7: our as to say it's the handmaiden of gold, but

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Speaker 7: it does have a correlation what typically happened. But the

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Speaker 7: big difference between silver and gold is that over fifty

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Speaker 7: percent of silver is used industrially and only six percent

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Speaker 7: of gold is used industrially. Less than a fifth is

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Speaker 7: in jewelry and less than a fifth is in coins

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Speaker 7: and bars. So industry is really what powers the demand,

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Speaker 7: and that demand is inelastic. Nobody's stop making a cell

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Speaker 7: phone because the silver price went out. But as far

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Speaker 7: as the trading goes, a lot of people will look

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Speaker 7: at a gold silver ratio, and for much of my

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Speaker 7: career it was fifty to seventy. Now it's sort of

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Speaker 7: seventy to ninety. When it gets above ninety, you tend

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Speaker 7: to see silver being bought quite rapidly. So it's also

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Speaker 7: a much smaller market, so the volatility is there.

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Speaker 2: I got time for one more question. We still never

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Speaker 2: enough time with James Steele. I know you don't do

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Speaker 2: by holed cell three years out, five years out, ten

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Speaker 2: years out, gold up just because they're running out of it.

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Speaker 7: No, not necessarily, and that's because it's stored. There's a

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Speaker 7: lot of gold around the world. There's a lot of

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Speaker 7: silver around the world. A recycling process can be thirty

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Speaker 7: to ninety days to get it back on the market,

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Speaker 7: much quicker than mining. Okay, So when the price goes

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Speaker 7: up enough and we're at levels now in both gold

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Speaker 7: and silver where the recycling element is rising very quickly,

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Speaker 7: and that's an element of supply that's rarely talked about.

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Speaker 2: Lisa, you could melt a bracelet and go see the

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Speaker 2: weekend for front row seats in June.

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Speaker 3: Genius.

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Speaker 6: Genius.

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Speaker 7: Well, for example, we think that one out of every

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Speaker 7: eight or nine ounces of golden world is in India, and.

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Speaker 3: The gold is.

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Speaker 7: Held almost exclusively in the hands of housewives, and when

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Speaker 7: the price rises to a certain degree, right, they will

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Speaker 7: hand that gold in and maybe buy something else, got

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Speaker 7: some rupees or play it like that, the very sensitives

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Speaker 7: of the price.

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Speaker 3: James Steele, thank you so much. Never never, always, come

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Speaker 3: always come here. James Steele with HSBC. That was just

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Speaker 3: scimilating on gold fabulous. He is with HSBC.

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Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

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Speaker 1: starting at seven am Eastern on Applecarplay and Android Auto

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Speaker 1: with the Bloomberg Business App. You can also listen live

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Speaker 1: on Amazon Alexa from our flagship New York station. Just

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Speaker 1: say Alexa, play Bloomberg eleven thirty.

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Speaker 2: We're gonna talk now about quiet money, college endowments making

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Speaker 2: a return, the huge pressures. I look at Lafayette College here.

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Speaker 3: End of January, dorm infested with mice. Up. It's Christian

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Speaker 3: Mammani's fault. He joins us.

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Speaker 2: Now CIO at lafay at College. Do you have a

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Speaker 2: mouse fund at your endowment? Is you have something there

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Speaker 2: like to take care of the mice.

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Speaker 8: I didn't expect to start on that topic, but we're

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Speaker 8: working on it.

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Speaker 2: I look at what Lafaiatte has done. Just tell us

445
00:22:08,680 --> 00:22:11,840
Speaker 2: about the last two three years. What's your return? How

446
00:22:11,920 --> 00:22:12,520
Speaker 2: is your return?

447
00:22:12,600 --> 00:22:12,879
Speaker 3: Ben?

448
00:22:13,640 --> 00:22:17,280
Speaker 8: The return last year was eleven and change, so above

449
00:22:17,320 --> 00:22:19,760
Speaker 8: a lot of people. Yes, we were in the top

450
00:22:19,840 --> 00:22:21,880
Speaker 8: quartile as far as endowments are concerned.

451
00:22:21,920 --> 00:22:24,320
Speaker 3: Okay, I'll make it right to it.

452
00:22:24,440 --> 00:22:27,000
Speaker 2: The major thing we study at Bloomberg is a focus

453
00:22:27,040 --> 00:22:31,760
Speaker 2: on alternative investments. Are you heavy into an alternative formula

454
00:22:32,320 --> 00:22:34,600
Speaker 2: or is it more traditional asset classes?

455
00:22:34,960 --> 00:22:38,320
Speaker 8: Okay, so I think we are heavy into private equities.

456
00:22:38,440 --> 00:22:41,520
Speaker 8: We have a substantial allocation into private equities. People call

457
00:22:41,600 --> 00:22:44,400
Speaker 8: them alternatives, but that's not the right way to think

458
00:22:44,400 --> 00:22:46,800
Speaker 8: about it. The right way to think about private equity

459
00:22:46,840 --> 00:22:50,879
Speaker 8: is basically it's a better equity. That's how we explain it.

460
00:22:50,960 --> 00:22:53,520
Speaker 8: That is, you have a longer investment horizon and your

461
00:22:53,560 --> 00:22:57,720
Speaker 8: returns are expected to be or you expect the returns

462
00:22:57,760 --> 00:23:00,720
Speaker 8: to be higher than the public equities three hundred basis.

463
00:23:00,920 --> 00:23:03,720
Speaker 2: Let me ask a rude question because Paul's too polite

464
00:23:03,720 --> 00:23:07,320
Speaker 2: to ask it, which is, you make eleven percent, But

465
00:23:07,400 --> 00:23:09,520
Speaker 2: are you saying, but we're going to get a pop

466
00:23:09,560 --> 00:23:12,840
Speaker 2: from private equity because they weren't able to liquefy over

467
00:23:12,840 --> 00:23:14,959
Speaker 2: the last two, three, four years. Do you look at

468
00:23:15,000 --> 00:23:16,760
Speaker 2: private equity to pop that return?

469
00:23:17,240 --> 00:23:20,959
Speaker 8: So overall, from a long term strategic allocation standpoint, we

470
00:23:21,040 --> 00:23:26,040
Speaker 8: have a substantial allocation in private equities, expecting private equities

471
00:23:26,080 --> 00:23:28,479
Speaker 8: over the long term, not one year, not three year,

472
00:23:28,560 --> 00:23:32,000
Speaker 8: but long term to outperform public equities or three hundred

473
00:23:32,000 --> 00:23:32,480
Speaker 8: basis ones?

474
00:23:32,600 --> 00:23:34,119
Speaker 3: Is that not too rude? Puts possible?

475
00:23:34,160 --> 00:23:35,800
Speaker 6: I mean, is it is that kind of what I

476
00:23:35,880 --> 00:23:38,199
Speaker 6: think folks refer to as a Yale model it's not

477
00:23:38,240 --> 00:23:43,159
Speaker 6: just the sixty forty equities bonds, but also alternatives to

478
00:23:43,240 --> 00:23:45,760
Speaker 6: kind of generate the better returns.

479
00:23:46,040 --> 00:23:49,480
Speaker 8: So, you know, the Yale model comes in multiple flavors,

480
00:23:49,840 --> 00:23:53,480
Speaker 8: and how people think about that, I think is critically important.

481
00:23:53,920 --> 00:23:56,760
Speaker 8: The way we think about it is our portfolio is

482
00:23:56,840 --> 00:24:01,440
Speaker 8: roughly seventy thirty seventy percent inequities and thirty percent in bonds.

483
00:24:01,960 --> 00:24:05,080
Speaker 8: And for equities, we basically have forty five percent private

484
00:24:05,280 --> 00:24:10,800
Speaker 8: public equities and twenty five percent in private equities, thinking

485
00:24:11,040 --> 00:24:14,760
Speaker 8: that those private equities over the long term will outperform

486
00:24:14,760 --> 00:24:17,440
Speaker 8: public equities. So better equities is how we think about

487
00:24:17,520 --> 00:24:19,680
Speaker 8: it as opposed to alternatives.

488
00:24:20,160 --> 00:24:22,119
Speaker 6: So we've had in just in the equity markets the

489
00:24:22,160 --> 00:24:25,000
Speaker 6: past two years, very strong returns north of twenty percent

490
00:24:25,040 --> 00:24:27,359
Speaker 6: for the S and P five hundred. How do you

491
00:24:27,400 --> 00:24:30,520
Speaker 6: think about twenty five twenty six? I mean, what's your

492
00:24:30,520 --> 00:24:33,000
Speaker 6: investment out work here? Maybe given some of the political backdrop,

493
00:24:33,000 --> 00:24:34,040
Speaker 6: the economic factor.

494
00:24:33,800 --> 00:24:36,520
Speaker 8: Of so A, that's a really good question. You know,

495
00:24:37,080 --> 00:24:41,920
Speaker 8: as kind of perpetual investors, we don't make significant changes

496
00:24:42,000 --> 00:24:44,800
Speaker 8: in terms of our allocation based on what our near

497
00:24:44,920 --> 00:24:47,480
Speaker 8: term outlook is. What we are looking to do is

498
00:24:47,560 --> 00:24:49,760
Speaker 8: generate something north of eight and a half percent, as

499
00:24:49,840 --> 00:24:52,919
Speaker 8: time was talking about before. And to do that, we

500
00:24:53,000 --> 00:24:57,000
Speaker 8: have to have a substantial allocation in equities because otherwise

501
00:24:57,000 --> 00:25:00,600
Speaker 8: you can't generate those types of returns. The the bond

502
00:25:00,680 --> 00:25:04,280
Speaker 8: part is really more to keep yourself saying and make

503
00:25:04,320 --> 00:25:09,240
Speaker 8: sure you know we don't have a significant issue and

504
00:25:09,320 --> 00:25:12,920
Speaker 8: concern when equity markets get very volatile.

505
00:25:13,000 --> 00:25:16,119
Speaker 2: Christian mommoney with us folks of Lafayette College and of

506
00:25:16,160 --> 00:25:20,359
Speaker 2: course iconic at Investco and others over the years, I

507
00:25:20,400 --> 00:25:23,720
Speaker 2: want you to speak to people scared stiff. Now your

508
00:25:23,880 --> 00:25:27,280
Speaker 2: hallmark is you have to participate. You've got to be

509
00:25:27,400 --> 00:25:29,960
Speaker 2: in the game to win. You're doing that at a

510
00:25:30,040 --> 00:25:30,960
Speaker 2: college endowment.

511
00:25:31,560 --> 00:25:32,760
Speaker 3: Now, how do.

512
00:25:32,760 --> 00:25:37,719
Speaker 2: People participate in this bifurcated massively Barbell market.

513
00:25:37,960 --> 00:25:41,240
Speaker 8: Well, so, I think from a longer term perspective, having

514
00:25:41,280 --> 00:25:45,480
Speaker 8: a decent allocation equities is as important for us as

515
00:25:45,480 --> 00:25:48,600
Speaker 8: it is for anybody else because bonds, if you are

516
00:25:48,600 --> 00:25:52,000
Speaker 8: a taxable investors, generating after tax returns out of bonds

517
00:25:52,080 --> 00:25:54,400
Speaker 8: is going to be has been very difficult, and we'll

518
00:25:54,600 --> 00:25:59,359
Speaker 8: will likely remain very very very very difficult. Again, having

519
00:25:59,400 --> 00:26:03,320
Speaker 8: an allocation equity helps your portfolio grow over the long term,

520
00:26:03,359 --> 00:26:05,560
Speaker 8: and I think the key word there is long term.

521
00:26:05,600 --> 00:26:07,720
Speaker 8: That's what we are focused on. That's what people should

522
00:26:07,720 --> 00:26:11,159
Speaker 8: be focused on. From a tactical standpoint, that is, you know,

523
00:26:11,240 --> 00:26:15,240
Speaker 8: the market outlook today coming into the year as opposed

524
00:26:15,280 --> 00:26:17,880
Speaker 8: to last two years coming into this year. The one

525
00:26:17,920 --> 00:26:20,760
Speaker 8: thing I concluded was having a view is going to

526
00:26:20,760 --> 00:26:24,400
Speaker 8: be hurtful for your financial wellbeing because we just don't know.

527
00:26:24,600 --> 00:26:27,639
Speaker 8: There's a whole lot in play, you know, as we

528
00:26:27,720 --> 00:26:29,560
Speaker 8: found out over the last week and as we are

529
00:26:29,800 --> 00:26:32,640
Speaker 8: likely to find out over the next three six months

530
00:26:33,000 --> 00:26:36,200
Speaker 8: as to where policy outlook from a fiscal standpoint, from

531
00:26:36,200 --> 00:26:40,680
Speaker 8: an administrative policy standpoint will shake out. Having a significant

532
00:26:40,960 --> 00:26:44,040
Speaker 8: kind of play in the middle of all of that

533
00:26:44,200 --> 00:26:45,720
Speaker 8: doesn't seem that prudent to us.

534
00:26:45,880 --> 00:26:48,400
Speaker 6: So how do you position a portfolio in a world

535
00:26:48,440 --> 00:26:50,760
Speaker 6: where there is a lot of uncertainty? You may not

536
00:26:50,800 --> 00:26:53,680
Speaker 6: want to take a view? Is it just quality quality, quality,

537
00:26:53,680 --> 00:26:55,840
Speaker 6: both on stocks end bonds or.

538
00:26:56,080 --> 00:26:59,600
Speaker 8: Well so you know, again, when you don't have a view,

539
00:26:59,640 --> 00:27:02,320
Speaker 8: you get close to your benchmark, whatever that is. In

540
00:27:02,640 --> 00:27:05,639
Speaker 8: our case, it's roughly, you know, seventy thirty equities in

541
00:27:05,720 --> 00:27:08,880
Speaker 8: bonds as opposed to as opposed to significantly higher weight

542
00:27:08,920 --> 00:27:13,840
Speaker 8: and equities. Having having said that, I think the key

543
00:27:13,920 --> 00:27:17,640
Speaker 8: here is risk management, making sure that you don't get

544
00:27:17,680 --> 00:27:20,960
Speaker 8: cutted out or don't get into a situation where you

545
00:27:21,119 --> 00:27:25,160
Speaker 8: have to sell a position because things are going badly AGAINCIA,

546
00:27:25,200 --> 00:27:27,879
Speaker 8: and that that would certainly happen. I think having a

547
00:27:27,880 --> 00:27:31,680
Speaker 8: long term view certainly helps you in maintaining your maintaining

548
00:27:31,720 --> 00:27:36,080
Speaker 8: a position, not being out of out of position in

549
00:27:36,080 --> 00:27:39,480
Speaker 8: a significant way, also helps you in that context with.

550
00:27:39,400 --> 00:27:42,480
Speaker 2: Your with your work, and particularly you know in mechanical

551
00:27:42,520 --> 00:27:46,040
Speaker 2: engineering and all the technology work you've done. How do

552
00:27:46,119 --> 00:27:51,800
Speaker 2: you state MAG seven to very conservative, very frightened college

553
00:27:51,880 --> 00:27:56,919
Speaker 2: academics popping an eighty seven thousand dollars all intuition, how

554
00:27:57,000 --> 00:27:59,639
Speaker 2: do you how do you say to them MAG seven

555
00:27:59,680 --> 00:28:02,720
Speaker 2: in growth in America is your salvation?

556
00:28:02,840 --> 00:28:04,120
Speaker 3: How do you do that well?

557
00:28:04,160 --> 00:28:07,000
Speaker 8: So I think those are the facts. That is, if

558
00:28:07,000 --> 00:28:09,440
Speaker 8: you look at the performance of the US equity market

559
00:28:09,480 --> 00:28:12,880
Speaker 8: over the last ten to fifteen years, it has been

560
00:28:12,960 --> 00:28:16,280
Speaker 8: driven by It has been driven by technology. In fact,

561
00:28:16,480 --> 00:28:21,200
Speaker 8: US markets have done spectacularly better than international markets, primarily

562
00:28:21,240 --> 00:28:24,639
Speaker 8: on the back of performance of MAX seven or some

563
00:28:24,760 --> 00:28:30,520
Speaker 8: version of MAX seven at various points. So their profitability

564
00:28:30,640 --> 00:28:36,120
Speaker 8: is extraordinarily good. Their cash flows are extraordinarily good. They

565
00:28:36,160 --> 00:28:38,880
Speaker 8: are on a cash flow bench, and evaluations are high.

566
00:28:38,880 --> 00:28:41,200
Speaker 8: So I think the last two factors is what you

567
00:28:41,240 --> 00:28:43,800
Speaker 8: have to kind of consider more from a tactical standpoint.

568
00:28:44,240 --> 00:28:45,240
Speaker 3: From a long term.

569
00:28:45,040 --> 00:28:47,680
Speaker 8: Perspective, the tech sector is still a very good sector.

570
00:28:47,720 --> 00:28:50,280
Speaker 8: And if you are going to participate in the market,

571
00:28:50,360 --> 00:28:53,920
Speaker 8: especially in the US, participating in tech sector, which can

572
00:28:53,960 --> 00:28:57,080
Speaker 8: generate outside returns is something that you absolutely have to.

573
00:28:57,080 --> 00:28:57,760
Speaker 3: Well what you just.

574
00:28:57,720 --> 00:29:01,120
Speaker 2: Said there, which is classic sham of money. Do you

575
00:29:01,160 --> 00:29:04,920
Speaker 2: get a lot of pushback from you know, philosophy professors

576
00:29:05,040 --> 00:29:08,800
Speaker 2: and you know drama drama the head of the drama department.

577
00:29:09,160 --> 00:29:12,880
Speaker 8: So thankfully they are not in the weeds in the portfolio.

578
00:29:12,920 --> 00:29:15,600
Speaker 8: So the answer is the answer is no. But I

579
00:29:15,880 --> 00:29:19,200
Speaker 8: think what they are interested in is making sure that

580
00:29:19,280 --> 00:29:22,440
Speaker 8: the college generates significant amount of return so that we

581
00:29:22,480 --> 00:29:26,040
Speaker 8: can support the mission of the college. And they and

582
00:29:26,080 --> 00:29:29,080
Speaker 8: they understand that to do that you have to take

583
00:29:29,160 --> 00:29:32,200
Speaker 8: some amount of risk because just investing in bonds, which

584
00:29:32,200 --> 00:29:33,640
Speaker 8: would be the safe way to do it, you just

585
00:29:33,720 --> 00:29:36,280
Speaker 8: can't generate the sort of returns that we have to do.

586
00:29:36,600 --> 00:29:40,040
Speaker 2: I mean, they lost to Lehigh in basketball the other

587
00:29:40,520 --> 00:29:43,640
Speaker 2: arch rivals. I mean, they clearly need to Saint John's

588
00:29:43,720 --> 00:29:44,440
Speaker 2: like basketball.

589
00:29:44,520 --> 00:29:46,160
Speaker 3: Ricapitulagage is that.

590
00:29:46,200 --> 00:29:49,200
Speaker 2: They're paying some guy out of the seventy six ors

591
00:29:49,440 --> 00:29:50,320
Speaker 2: eight million.

592
00:29:50,080 --> 00:29:52,320
Speaker 3: Dollars a year to come exactly basketball.

593
00:29:52,480 --> 00:29:55,280
Speaker 6: So Christian, I just google Lafia College endowment about a

594
00:29:55,320 --> 00:30:00,520
Speaker 6: billion dollars but on an endowment per student, very very high, yes,

595
00:30:00,600 --> 00:30:05,080
Speaker 6: and that is critical for the financials the finances of

596
00:30:05,120 --> 00:30:08,400
Speaker 6: a college university. What are the colleges and universities that

597
00:30:08,440 --> 00:30:10,760
Speaker 6: do that don't have that endowment support.

598
00:30:11,040 --> 00:30:15,040
Speaker 8: I mean, that's tough, right, So that's a that's a

599
00:30:15,080 --> 00:30:18,600
Speaker 8: really good question again, and we are very lucky that is.

600
00:30:18,840 --> 00:30:22,320
Speaker 8: Lafayette College is a great college and the alumni are

601
00:30:22,400 --> 00:30:25,280
Speaker 8: nuts in that in their support for the college and

602
00:30:25,400 --> 00:30:28,640
Speaker 8: have been very very generous, and we expect they'll continue

603
00:30:28,680 --> 00:30:30,880
Speaker 8: to remain very generous in their in their giving.

604
00:30:31,360 --> 00:30:31,640
Speaker 4: Uh.

605
00:30:31,840 --> 00:30:37,600
Speaker 8: The higher ed challenges is very very apparent to everyone,

606
00:30:37,680 --> 00:30:40,520
Speaker 8: especially for students and parents who send their kids to college.

607
00:30:40,840 --> 00:30:43,880
Speaker 8: The cost of education is definitely high. One of the

608
00:30:43,920 --> 00:30:47,640
Speaker 8: primary uses of the endowment at lafa Atte College is

609
00:30:47,640 --> 00:30:52,200
Speaker 8: to basically support needy students in providing financial support. We

610
00:30:52,520 --> 00:30:55,400
Speaker 8: whatever we contribute. It almost matches dollar for dollar for

611
00:30:55,480 --> 00:30:56,360
Speaker 8: financial aid.

612
00:30:56,120 --> 00:30:59,760
Speaker 3: That we provide. Do you lecture an engineering there? I can't.

613
00:31:00,560 --> 00:31:04,160
Speaker 2: I mean, Lafayette is such a tradition of engineering.

614
00:31:04,520 --> 00:31:06,800
Speaker 3: Do you go into the classroom and yell at the students?

615
00:31:08,480 --> 00:31:10,920
Speaker 8: I don't think the professors would like that very much.

616
00:31:10,960 --> 00:31:14,320
Speaker 8: But it's a fantastic engineering program, and I think the

617
00:31:14,360 --> 00:31:17,840
Speaker 8: strength of Lafayette College is it's engineering program along with

618
00:31:18,000 --> 00:31:23,040
Speaker 8: the humanities. That combination is what differentiates differentiates us from

619
00:31:23,040 --> 00:31:25,560
Speaker 8: a lot of our just playing liberal arts peers.

620
00:31:25,560 --> 00:31:29,200
Speaker 2: How about Paul, that active management fee right now within

621
00:31:29,240 --> 00:31:34,560
Speaker 2: the mutual fund ETF business. Katie Greifeld from Haverford was

622
00:31:34,600 --> 00:31:36,479
Speaker 2: in earlier this morning.

623
00:31:37,000 --> 00:31:39,320
Speaker 3: Look at it? What seven basis points?

624
00:31:40,040 --> 00:31:43,400
Speaker 6: Yeah, exactly seven basis points for the ETFs. What I

625
00:31:43,400 --> 00:31:45,680
Speaker 6: mean that's been in a development in your career, Tom Square,

626
00:31:45,800 --> 00:31:49,840
Speaker 6: my career, this growth of ETFs you, how do you

627
00:31:49,880 --> 00:31:50,640
Speaker 6: guys think about that?

628
00:31:50,920 --> 00:31:53,800
Speaker 8: Well, so you know, from a from a cost perspective

629
00:31:54,120 --> 00:31:59,280
Speaker 8: ETFs that versus active mutual funds. That train left a long.

630
00:31:59,120 --> 00:32:01,000
Speaker 3: Long time ago. Yeah, you were on the other train.

631
00:32:02,600 --> 00:32:05,200
Speaker 8: Yes, I was on the other train at Appenhama Funds

632
00:32:05,200 --> 00:32:07,640
Speaker 8: as well, and That's why Appenhamo funds got sold because

633
00:32:08,320 --> 00:32:11,719
Speaker 8: I think that the flows speak the story, that is

634
00:32:12,040 --> 00:32:14,680
Speaker 8: that flows into ETFs are massive and flows out of

635
00:32:15,120 --> 00:32:17,720
Speaker 8: mutual funds are massive. The way we think about it

636
00:32:17,760 --> 00:32:22,240
Speaker 8: is relatively simple, which is cost is certainly one component,

637
00:32:22,600 --> 00:32:26,360
Speaker 8: and but returns are also a significant component as well.

638
00:32:26,600 --> 00:32:30,480
Speaker 8: So in our equity portfolio, we have substantial allocation into

639
00:32:31,040 --> 00:32:35,320
Speaker 8: all sorts of diversified strategies, including active funds. We have

640
00:32:35,400 --> 00:32:37,640
Speaker 8: some ETFs, but we have active funds as well, and

641
00:32:37,760 --> 00:32:40,680
Speaker 8: those active funds basically at the way we construct the

642
00:32:40,720 --> 00:32:44,240
Speaker 8: portfolio is all of them have to contribute something something

643
00:32:44,240 --> 00:32:47,960
Speaker 8: to the portfolio, but in a very benchmark aware way.

644
00:32:48,320 --> 00:32:50,160
Speaker 8: We want to make sure that all of it comes

645
00:32:50,160 --> 00:32:52,640
Speaker 8: back to our benchmark, which is MSCI.

646
00:32:52,360 --> 00:32:54,320
Speaker 3: Aqui do you have a position in gold?

647
00:32:54,960 --> 00:32:57,640
Speaker 8: No, we do not have a position. Why well, so

648
00:32:57,920 --> 00:33:01,960
Speaker 8: you know, again, in our construct of seventy percent equities

649
00:33:02,000 --> 00:33:06,080
Speaker 8: thirty percent bombs, assets like gold just don't fit into

650
00:33:06,120 --> 00:33:10,640
Speaker 8: that picture. So it would be a speculative bet, and

651
00:33:10,680 --> 00:33:13,959
Speaker 8: we we just have decided that we'll stick to our

652
00:33:14,040 --> 00:33:16,959
Speaker 8: knitting things that we know where managers we can evaluate

653
00:33:17,640 --> 00:33:19,440
Speaker 8: and not take on that additional volatile.

654
00:33:19,560 --> 00:33:20,280
Speaker 3: I know what it is.

655
00:33:20,280 --> 00:33:22,160
Speaker 2: But the last six months or so, I mean in

656
00:33:22,200 --> 00:33:28,680
Speaker 2: Bloomberg Surveillance, in Nexus at Philadelphia Schools, Lehigh, Lafayette, Haverford, Yep,

657
00:33:28,800 --> 00:33:30,680
Speaker 2: BRNMAR They're all been represented.

658
00:33:30,880 --> 00:33:32,400
Speaker 3: Yeah, this has been wonderful.

659
00:33:32,400 --> 00:33:35,080
Speaker 2: Thank you so much for coming in. Thank you at

660
00:33:35,120 --> 00:33:40,640
Speaker 2: Oppenheimer and Invesco just legendary decided to go off and

661
00:33:40,720 --> 00:33:42,520
Speaker 2: manage what Paul billion dollars?

662
00:33:42,800 --> 00:33:47,320
Speaker 3: Yeah? Nice, it's only working a twenty eight dollars work,

663
00:33:47,880 --> 00:33:50,720
Speaker 3: you know, that's physical. That's it gets three months off.

664
00:33:50,880 --> 00:33:52,360
Speaker 3: Are you paying houses.

665
00:33:52,040 --> 00:33:55,280
Speaker 6: Journey summer time exactly, Christian.

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Speaker 3: Thank you so much.

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Speaker 2: Wonderful to have you, and don't be a stranger as well.

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00:34:04,720 --> 00:34:08,600
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday

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00:34:08,640 --> 00:34:11,640
Speaker 1: starting at seven am Eastern on Apple, Corplay and Android

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00:34:11,680 --> 00:34:14,720
Speaker 1: Auto with the Bloomberg Business app. You can also watch

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00:34:14,760 --> 00:34:17,719
Speaker 1: us live every weekday on YouTube and always on the

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00:34:17,719 --> 00:34:18,840
Speaker 1: Bloomberg terminal.

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00:34:19,080 --> 00:34:21,200
Speaker 2: There you look at the front pages as we stagger

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00:34:21,760 --> 00:34:23,920
Speaker 2: to the weekend with Lisa Matteo.

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Speaker 3: Lisa, what do you have?

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Speaker 5: All right?

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Speaker 9: We're talking streaming, Okay, So analysts are saying that forget

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00:34:29,200 --> 00:34:33,279
Speaker 9: those standalone streaming services. They say, the mega bundle is

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00:34:33,320 --> 00:34:34,120
Speaker 9: what's gonna happen.

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00:34:34,200 --> 00:34:34,880
Speaker 5: This is the way to go.

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Speaker 9: They're saying, what a Brother Discovery, Disney paramount. They have

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00:34:37,120 --> 00:34:39,640
Speaker 9: to return to that wholesale business rather than continuing to

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00:34:39,680 --> 00:34:42,839
Speaker 9: build on those direct to consumer products. So they say

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Speaker 9: this mega streaming bundle distributed by Apple, Amazon, Google or

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Speaker 9: cable companies like Comcast.

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Speaker 5: They say, that's the way to go.

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Speaker 6: I think there's gotta be something here. It's just the

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00:34:54,080 --> 00:34:56,799
Speaker 6: delivery mechanisms is we just nobody knows what they're paying

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00:34:56,800 --> 00:34:59,520
Speaker 6: for it, and nobody knows what they really have in

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00:34:59,800 --> 00:35:01,560
Speaker 6: the What's really interesting is it used to be almost

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00:35:01,600 --> 00:35:04,879
Speaker 6: impossible to cancel your cable subscription. Now you just click

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00:35:04,920 --> 00:35:08,000
Speaker 6: a button and you're off of your streaming service, no friction.

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Speaker 2: Well like the sports thing that we saw, is there

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Speaker 2: any evidence people want a bundled streaming subscription?

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Speaker 3: Probably do.

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Speaker 6: They probably do bundles work. They worked for seventy years.

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Speaker 6: You know, I'm not sure what well.

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Speaker 9: You a Disney part of me with Warner Brothers, Discovery,

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00:35:22,480 --> 00:35:25,400
Speaker 9: like the Disney, Hulu, Max hold Yep Combo.

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Speaker 3: Now, yeah, it's a mess.

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Speaker 9: But they say, one company who doesn't need to bundle

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00:35:29,360 --> 00:35:33,560
Speaker 9: is Netflix, but the bundling could give Netflix some competition.

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00:35:33,680 --> 00:35:37,439
Speaker 9: Then finally, yeah, yeah, potentially who knows who knows next? Okay,

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00:35:37,760 --> 00:35:40,040
Speaker 9: the head of the NFL. So you have NFL Commissioner

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00:35:40,120 --> 00:35:44,320
Speaker 9: Roger Goodell saying he is standing behind diversity initiatives despite

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00:35:44,360 --> 00:35:46,799
Speaker 9: the President's moved against DEI. We've been hearing a lot

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00:35:46,800 --> 00:35:50,279
Speaker 9: about this lately. He says, their efforts are fundamental. They've

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00:35:50,320 --> 00:35:53,920
Speaker 9: made the NFL better, shows that they give them different perspectives.

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00:35:54,920 --> 00:35:56,080
Speaker 9: So that's what he's saying.

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Speaker 5: They just to break.

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Speaker 9: Down the rules for those of you who are not familiar.

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00:35:59,600 --> 00:36:02,279
Speaker 9: It requires each team with an ongoing key position to

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00:36:02,320 --> 00:36:05,120
Speaker 9: have these in person interviews with at least two minority

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00:36:05,120 --> 00:36:08,359
Speaker 9: candidates from outside the organization. But the thing is, there's

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00:36:08,400 --> 00:36:10,680
Speaker 9: controversy behind it because some people are saying they're just

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00:36:10,920 --> 00:36:13,440
Speaker 9: bringing them in just to go with the regulations and

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00:36:13,480 --> 00:36:15,919
Speaker 9: for show exactly and not going along with I've.

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00:36:15,840 --> 00:36:19,600
Speaker 2: Seen a little bit of pushback from the President. Selected

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00:36:19,960 --> 00:36:23,920
Speaker 2: let's change, change, change everything. There's selected companies. I think

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00:36:24,120 --> 00:36:25,839
Speaker 2: JP Morgan is staying with the thing.

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Speaker 6: But the head coach of the Pittsburgh Steelers, he was

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Speaker 6: hired in large part due to the ruining rule, which

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Speaker 6: is refurther Okay, yeah, Mike Tomlin, Yep, thanks, there you go.

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Speaker 9: All right, we'll take you from professional sports to high

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00:36:38,719 --> 00:36:39,520
Speaker 9: school sports.

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Speaker 5: This one stood out to me.

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00:36:40,840 --> 00:36:45,320
Speaker 9: More athletes are signing endorsement deals before their senior prom Okay,

728
00:36:45,480 --> 00:36:48,920
Speaker 9: so let me just put in perspective. No, I wish

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00:36:50,040 --> 00:36:54,480
Speaker 9: so Indetas they named a star baseball shortstop its newest

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00:36:54,520 --> 00:36:58,080
Speaker 9: big name endorser. He's from Stillwater High School in Oklahoma. Okay,

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00:36:58,360 --> 00:37:01,520
Speaker 9: he's likely the number one pick this year's MLB draft

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00:37:01,560 --> 00:37:04,279
Speaker 9: though he's seventeen years old. But this is some new

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00:37:04,360 --> 00:37:07,040
Speaker 9: data out. It's open doors, they say. Forty state high

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00:37:07,040 --> 00:37:09,959
Speaker 9: school associations in the US they allow students to sign

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00:37:10,080 --> 00:37:11,680
Speaker 9: these nil deals.

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00:37:12,920 --> 00:37:15,839
Speaker 2: We're gonna rip up the script your first, Lisa, you

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00:37:15,880 --> 00:37:19,399
Speaker 2: have a gifted offspring who's in the mix of this.

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Speaker 3: What do you think?

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00:37:21,640 --> 00:37:25,640
Speaker 9: I personally think they should wait until after they're done

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00:37:25,719 --> 00:37:29,800
Speaker 9: with high school. I think it's too much distraction amongst everything.

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Speaker 3: They're high school kids, Paul, are going to have deals

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00:37:32,440 --> 00:37:33,560
Speaker 3: before they go to Duke?

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00:37:34,360 --> 00:37:38,200
Speaker 6: Yes, yes, absolutely, And here's just some numbers. Brands. Brands

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00:37:38,239 --> 00:37:40,799
Speaker 6: spent three hundred and thirty eight million dollars on nil

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00:37:40,920 --> 00:37:43,920
Speaker 6: deals two student athletes last year, primarily college students. That's

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00:37:44,000 --> 00:37:46,120
Speaker 6: up from one hundred and seventy one million twenty twenty three.

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00:37:46,280 --> 00:37:47,319
Speaker 6: Just to show you the growth there.

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00:37:47,400 --> 00:37:49,319
Speaker 9: Yeah, and how much you're getting paid. Okay, so these

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00:37:49,320 --> 00:37:52,359
Speaker 9: top high school athletes can earn between five hundred two

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00:37:52,440 --> 00:37:55,759
Speaker 9: thousand dollars for one social media post. Some of them, though,

751
00:37:55,800 --> 00:38:00,839
Speaker 9: the superviarers make upwards of six figures multi year endorsements.

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00:38:01,000 --> 00:38:03,719
Speaker 2: So if your daughter does that, you could afford to

753
00:38:03,760 --> 00:38:04,600
Speaker 2: go to the weekend.

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00:38:07,560 --> 00:38:09,759
Speaker 9: Maybe I should rethink that, and it can also help

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00:38:09,840 --> 00:38:12,160
Speaker 9: to pay well. They think these kids aren't going to

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00:38:12,200 --> 00:38:14,880
Speaker 9: have to pay for college, so they don't need I

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00:38:14,880 --> 00:38:15,200
Speaker 9: don't know.

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00:38:15,280 --> 00:38:15,920
Speaker 5: It's a whole.

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00:38:16,239 --> 00:38:17,160
Speaker 6: Yes, it's a whole.

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00:38:17,800 --> 00:38:20,000
Speaker 9: It's a whole, And the teachers and educators are against

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00:38:20,000 --> 00:38:21,760
Speaker 9: it though, because they're saying it's going to be a distraction.

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00:38:22,080 --> 00:38:25,680
Speaker 2: Section seven, two thousand and six hundred dollars. Here's the

763
00:38:26,360 --> 00:38:29,600
Speaker 2: Lisa's running out of time because I can see the

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00:38:29,600 --> 00:38:32,439
Speaker 2: sun light up the sky, so I hit the road

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Speaker 2: in overdrive to the weekend met Live first week of June.

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Speaker 9: Yes, I know, I got the text message you already reminder.

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00:38:39,680 --> 00:38:41,959
Speaker 3: Yeah, Lisa Matteo, thank you so much.

768
00:38:42,000 --> 00:38:45,319
Speaker 2: The newspapers the weekend out of the great new album.

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Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,

770
00:38:50,440 --> 00:38:54,719
Speaker 1: and anywhere else you get your podcasts. Listen live each weekday,

771
00:38:54,840 --> 00:38:58,080
Speaker 1: seven to ten am Easter and on Bloomberg dot com,

772
00:38:58,239 --> 00:39:02,600
Speaker 1: the iHeartRadio Appune, and the Bloomberg Business app. You can

773
00:39:02,680 --> 00:39:06,440
Speaker 1: also watch us live every weekday on YouTube and always

774
00:39:06,480 --> 00:39:07,760
Speaker 1: on the Bloomberg terminal