1 00:00:00,080 --> 00:00:13,040 Speaker 1: Yeah, Welcome to the Bloomberg Surveillance Podcast. I'm m keene 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Jay Lee. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:33,480 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg Joining 5 00:00:33,520 --> 00:00:34,960 Speaker 1: us now, I'm pleased to say as a man whose 6 00:00:34,960 --> 00:00:37,080 Speaker 1: work has taken him from the Federal Reserve, to the 7 00:00:37,159 --> 00:00:41,000 Speaker 1: International Monetary Fund, to city and now to the Milken Institute, 8 00:00:41,000 --> 00:00:43,520 Speaker 1: where he joins us from it's Bill Lee, the chief 9 00:00:43,560 --> 00:00:46,680 Speaker 1: economist of the Milken Institute. Its great to catch up 10 00:00:46,720 --> 00:00:48,600 Speaker 1: with you, Mr Bill Lee. Um, can we just begin 11 00:00:48,640 --> 00:00:50,640 Speaker 1: with the government shutdown? And how much longer does this 12 00:00:50,720 --> 00:00:53,720 Speaker 1: need to go on before you start having to to 13 00:00:53,800 --> 00:00:57,520 Speaker 1: revise your first quarter GDP estimate in the United States? Well, 14 00:00:57,560 --> 00:00:59,080 Speaker 1: I think this is a lot of noise, and I 15 00:00:59,120 --> 00:01:01,200 Speaker 1: think the mark It's treating it like a lot of noise. 16 00:01:01,200 --> 00:01:02,920 Speaker 1: So I don't think we'll do anything to our GDP 17 00:01:03,080 --> 00:01:06,520 Speaker 1: numbers because, let's face it, the government workers get paid regardless, 18 00:01:06,680 --> 00:01:09,360 Speaker 1: and and the thing that's disruptive right now is the 19 00:01:09,400 --> 00:01:12,560 Speaker 1: supply of government services, which on average really has been 20 00:01:12,560 --> 00:01:15,400 Speaker 1: relatively smooth so as far as our GDP forecast is concerned, 21 00:01:15,440 --> 00:01:17,480 Speaker 1: absolutely no effect. One of the things that we should 22 00:01:17,520 --> 00:01:20,280 Speaker 1: be worried about is what this means for the prospect 23 00:01:20,360 --> 00:01:23,399 Speaker 1: of further policies like infrastructure and the rest of the 24 00:01:23,400 --> 00:01:26,920 Speaker 1: Trump agenda. If we have children arguing about politics, the 25 00:01:26,959 --> 00:01:28,479 Speaker 1: best thing I think the president can do right now 26 00:01:28,520 --> 00:01:30,320 Speaker 1: is get himself out of here, which is done. He's 27 00:01:30,360 --> 00:01:33,759 Speaker 1: gonna go to dapost and talk about globalism and internationalism 28 00:01:33,760 --> 00:01:37,080 Speaker 1: and how the world is going to have have this 29 00:01:37,120 --> 00:01:39,280 Speaker 1: world in transition, how we're going to manage policy in 30 00:01:39,319 --> 00:01:42,160 Speaker 1: that world, and to be an adult in a playground 31 00:01:42,200 --> 00:01:44,520 Speaker 1: of children in here in Washington. Well, let's some use 32 00:01:44,560 --> 00:01:47,160 Speaker 1: your phrasing the playground of children in Washington before we 33 00:01:47,160 --> 00:01:49,520 Speaker 1: get to Dabo, Swissland with Tom Kane bill Um, what 34 00:01:49,640 --> 00:01:52,280 Speaker 1: is this mean for the potential agreement if there could 35 00:01:52,280 --> 00:01:54,920 Speaker 1: be one around the dead sailing which is set to 36 00:01:54,960 --> 00:01:57,720 Speaker 1: come around in the next couple of months. Yeah, that's 37 00:01:57,840 --> 00:02:00,360 Speaker 1: but that's key, Jonathan. I mean the act that we 38 00:02:00,520 --> 00:02:02,160 Speaker 1: have a couple of months and and that we know 39 00:02:02,240 --> 00:02:04,560 Speaker 1: the churchy can do something extraordinary measures to manage their 40 00:02:04,560 --> 00:02:07,920 Speaker 1: cash flow. Uh markets as and as you know, just 41 00:02:07,960 --> 00:02:10,040 Speaker 1: have not reacted to this. And if you look at 42 00:02:10,080 --> 00:02:13,000 Speaker 1: past experience, the one thing that we always prioritize are 43 00:02:13,120 --> 00:02:15,200 Speaker 1: the interest payments on the debt and and and not 44 00:02:15,240 --> 00:02:17,240 Speaker 1: to go to technical default. So one of the things 45 00:02:17,240 --> 00:02:20,280 Speaker 1: that that we should worry about then would be how 46 00:02:20,320 --> 00:02:23,280 Speaker 1: it is that the politics starts to come into play 47 00:02:23,320 --> 00:02:25,720 Speaker 1: here and whether or not the political capital is being 48 00:02:25,800 --> 00:02:28,160 Speaker 1: used up on the part of the Republicans and Democrats, 49 00:02:28,400 --> 00:02:31,160 Speaker 1: because neither side shows any sign of life. But then 50 00:02:31,240 --> 00:02:34,400 Speaker 1: the policy, Remember the policy that worried about is immigration policy. 51 00:02:34,560 --> 00:02:37,040 Speaker 1: This is a global problem. That's why we had Brexit, 52 00:02:37,160 --> 00:02:39,240 Speaker 1: right because part of the reason is because the immigration 53 00:02:39,280 --> 00:02:43,200 Speaker 1: policy was was threatening a national sovereignty. So so this 54 00:02:43,240 --> 00:02:45,560 Speaker 1: is a big issue of global issue and and I 55 00:02:45,600 --> 00:02:48,080 Speaker 1: think they have to address it. And I think right 56 00:02:48,120 --> 00:02:50,880 Speaker 1: now Congress has passed the book for so long, it's 57 00:02:50,880 --> 00:02:53,920 Speaker 1: about time the President says, look, do something about it. 58 00:02:54,120 --> 00:02:56,720 Speaker 1: Building the Milk institu Chief Economists, you want to us 59 00:02:56,760 --> 00:02:59,280 Speaker 1: to down Bloombecks advantage. I'm Jonathan Farall in New York City. 60 00:02:59,600 --> 00:03:04,120 Speaker 1: Tom Kane over in Davos, Switzerland. Tom, good morning to you, sir. 61 00:03:04,480 --> 00:03:08,080 Speaker 1: Good morning John Farrell, a snowy DeVos record snow and DeVos, 62 00:03:08,120 --> 00:03:11,320 Speaker 1: I haven't seen a really detailed history of the January 63 00:03:11,440 --> 00:03:14,480 Speaker 1: snow here, but I am certain it is record back 64 00:03:14,560 --> 00:03:17,880 Speaker 1: fifteen and even twenty five years, easily a hockey goal 65 00:03:18,400 --> 00:03:20,360 Speaker 1: of snow on the ground all the way up and 66 00:03:20,400 --> 00:03:22,880 Speaker 1: down the mountain. And John, as you know, getting here 67 00:03:22,919 --> 00:03:25,080 Speaker 1: can be a challenge, and you know, I think there'll 68 00:03:25,120 --> 00:03:28,560 Speaker 1: be some real challenges and getting the warm bodies up 69 00:03:28,600 --> 00:03:30,639 Speaker 1: the mountain here in the next twenty four hours, warm 70 00:03:30,639 --> 00:03:32,799 Speaker 1: bodies not your south Tom, can you have to get 71 00:03:32,840 --> 00:03:35,360 Speaker 1: the train all the way out the mountain. I suspect 72 00:03:35,440 --> 00:03:37,160 Speaker 1: that the President the United States is going to take 73 00:03:37,160 --> 00:03:39,800 Speaker 1: around a different route up to the mountains that I'm 74 00:03:39,800 --> 00:03:42,080 Speaker 1: that you took. Tom, Well, that's true. I think I 75 00:03:42,120 --> 00:03:45,680 Speaker 1: think the President's visit is clearly a high point here, 76 00:03:45,760 --> 00:03:49,040 Speaker 1: but of many high points. And William Lee, what was 77 00:03:49,080 --> 00:03:51,880 Speaker 1: so interesting this morning? And I guess it's not that 78 00:03:51,920 --> 00:03:55,320 Speaker 1: I expected this, but it's the surprise of this Monday 79 00:03:55,360 --> 00:03:58,240 Speaker 1: folks at the at the meetings is the talk of 80 00:03:58,360 --> 00:04:03,120 Speaker 1: Mr McCraw. He is Ben Billy on an international mission 81 00:04:03,200 --> 00:04:09,200 Speaker 1: for France and for a certain McCraw macrown international economics 82 00:04:09,480 --> 00:04:12,880 Speaker 1: define that for our audience. What is the economics of 83 00:04:12,960 --> 00:04:15,920 Speaker 1: the president of France. You know, Tom, we have both 84 00:04:16,040 --> 00:04:18,200 Speaker 1: joked in the past about how France is sort of 85 00:04:18,240 --> 00:04:22,320 Speaker 1: like the the hub of regulatory impass and policy impass, 86 00:04:22,400 --> 00:04:25,479 Speaker 1: and how France really has seen it's better day in 87 00:04:25,480 --> 00:04:27,479 Speaker 1: the past. Macrown is trying to change all that and 88 00:04:27,480 --> 00:04:30,320 Speaker 1: trying to say our policies are gonna put France back 89 00:04:30,320 --> 00:04:33,480 Speaker 1: into the center of the dynamic of capitalism again. Now 90 00:04:33,720 --> 00:04:36,039 Speaker 1: I think we both are sort of chuckle and saying, well, 91 00:04:36,120 --> 00:04:38,000 Speaker 1: good luck on that, because you have a lot of 92 00:04:38,040 --> 00:04:42,320 Speaker 1: bureaucracy to overcome, a lot of historical regulation overcome. One 93 00:04:42,360 --> 00:04:44,120 Speaker 1: of the things that that we need to make sure 94 00:04:44,160 --> 00:04:46,280 Speaker 1: of is that the political leaders would come to Davos 95 00:04:46,600 --> 00:04:49,719 Speaker 1: talk a good story, but let's see the action. Last year, 96 00:04:49,960 --> 00:04:52,800 Speaker 1: the president of jen Pain came from China and said, 97 00:04:53,000 --> 00:04:55,840 Speaker 1: I am a globalist. And what's happened since then, One Belt, 98 00:04:55,839 --> 00:04:59,479 Speaker 1: one road is falling apart, trying to say TRYA is 99 00:04:59,520 --> 00:05:01,920 Speaker 1: just too dominant here and we just can't lease our 100 00:05:01,960 --> 00:05:05,000 Speaker 1: sovereignty to China. I think this this year, we need 101 00:05:05,000 --> 00:05:07,000 Speaker 1: to watch out for what the political leaders say because 102 00:05:07,160 --> 00:05:09,880 Speaker 1: it has to be backed by action. I've got to say, Bill, 103 00:05:10,200 --> 00:05:12,520 Speaker 1: the point you make that, Tom, the idea that the 104 00:05:12,520 --> 00:05:15,640 Speaker 1: president of China was able to go to Davil Switzon 105 00:05:15,680 --> 00:05:18,920 Speaker 1: and claimed to be a globalist is something that's still 106 00:05:19,320 --> 00:05:23,240 Speaker 1: still makes me shake my head to this day. I agree, 107 00:05:23,279 --> 00:05:25,200 Speaker 1: and I will say this in folks, this is my 108 00:05:25,320 --> 00:05:29,160 Speaker 1: fourteenth year up Happy Valley. I will say that this 109 00:05:29,279 --> 00:05:33,080 Speaker 1: valley came to a total stop when the President of 110 00:05:33,160 --> 00:05:37,560 Speaker 1: China spoke last year. I wonder if that's gonna happen 111 00:05:37,600 --> 00:05:42,320 Speaker 1: on Friday with a scheduled speech of the President, Bill Ye, 112 00:05:42,440 --> 00:05:45,000 Speaker 1: what kind of economy is a president bringing with us 113 00:05:45,040 --> 00:05:47,719 Speaker 1: he wants to take a victory lab I'm now twenty 114 00:05:47,839 --> 00:05:51,800 Speaker 1: six thousand. Is it a three percent GDP economy? Tom? 115 00:05:51,839 --> 00:05:53,760 Speaker 1: It took Nixon to go to China, is going to 116 00:05:53,839 --> 00:05:56,600 Speaker 1: take Trump to talk about globalism. And I think one 117 00:05:56,640 --> 00:05:58,760 Speaker 1: of the things that we're gonna see is a new 118 00:05:58,839 --> 00:06:03,000 Speaker 1: sense of globalism that includes national priorities. And I hope 119 00:06:03,000 --> 00:06:04,880 Speaker 1: he makes that speech. I hope it makes that transition 120 00:06:04,920 --> 00:06:07,120 Speaker 1: because it's so important. One of the things that we're 121 00:06:07,120 --> 00:06:09,159 Speaker 1: going to worry about in our own milk and conference 122 00:06:09,240 --> 00:06:13,200 Speaker 1: in in later April early May is navigating a world 123 00:06:13,200 --> 00:06:15,160 Speaker 1: in transition, and I think one of the things that 124 00:06:15,160 --> 00:06:18,000 Speaker 1: that that differs from what you guys are addressing is 125 00:06:18,000 --> 00:06:20,159 Speaker 1: that you see, the world is fractured right now, and 126 00:06:20,200 --> 00:06:22,599 Speaker 1: how do you deal with that fractured nous? Navigating that 127 00:06:22,640 --> 00:06:24,760 Speaker 1: transition is part of that fractured nous, and I think 128 00:06:24,839 --> 00:06:26,719 Speaker 1: one of the things that that that has to be 129 00:06:26,760 --> 00:06:29,160 Speaker 1: done is to have policies in place that take into 130 00:06:29,200 --> 00:06:32,200 Speaker 1: account the realities of the world. We have political fractured nous, 131 00:06:32,279 --> 00:06:35,440 Speaker 1: we have economic fracturedness, and financial fractured nous. But now 132 00:06:35,560 --> 00:06:37,480 Speaker 1: how do you navigate that? And I think that's one 133 00:06:37,480 --> 00:06:39,760 Speaker 1: of the themes that we'll be discussing in Los Angeles. 134 00:06:39,880 --> 00:06:41,920 Speaker 1: So come to the warm weather. It's on. But this 135 00:06:41,960 --> 00:06:44,920 Speaker 1: doesn't have to be a difference between globalism and nationalism. 136 00:06:44,920 --> 00:06:46,839 Speaker 1: When the President the United States goes to DAVL. Switzer 137 00:06:46,920 --> 00:06:48,280 Speaker 1: and I go back to the idea that the Chinese 138 00:06:48,279 --> 00:06:50,520 Speaker 1: president was able to go to Davos and claim to 139 00:06:50,560 --> 00:06:54,800 Speaker 1: be a globalist, why is this administration failing to deliver 140 00:06:55,040 --> 00:06:58,400 Speaker 1: what is quite a simple message that the current framework 141 00:06:58,440 --> 00:07:01,240 Speaker 1: for global trade is not there, It is not a 142 00:07:01,360 --> 00:07:05,000 Speaker 1: level playing field. The Chinese still have significant barriers to 143 00:07:05,120 --> 00:07:08,559 Speaker 1: entry at the same time they are leveraging the open 144 00:07:08,680 --> 00:07:11,320 Speaker 1: door to markets in Europe and to markets in the 145 00:07:11,400 --> 00:07:14,280 Speaker 1: United States as well. Why is this administration really failing 146 00:07:14,280 --> 00:07:16,920 Speaker 1: to deliver what is at his core quite a simple 147 00:07:17,000 --> 00:07:19,840 Speaker 1: and basic message that I think many economists might agree 148 00:07:19,880 --> 00:07:21,600 Speaker 1: with that there needs to be a leveling of the 149 00:07:21,600 --> 00:07:25,160 Speaker 1: playing field here. Absolutely, And I think it's unfortunate that 150 00:07:25,240 --> 00:07:29,400 Speaker 1: the election placed Trump in this in this box that 151 00:07:30,000 --> 00:07:32,640 Speaker 1: characterized him as some wild man who's gonna shut down 152 00:07:32,640 --> 00:07:34,520 Speaker 1: trade and shut down all the borders and shut down 153 00:07:34,560 --> 00:07:36,680 Speaker 1: all of the entry into the US and make it 154 00:07:36,960 --> 00:07:40,440 Speaker 1: an isolated or target economy. One that that is the 155 00:07:40,440 --> 00:07:42,800 Speaker 1: image that he's got to get rid of and say, look, 156 00:07:42,960 --> 00:07:45,160 Speaker 1: we're part of the global economy and we're trying to 157 00:07:45,280 --> 00:07:49,520 Speaker 1: develop internationalism into a bilaber set of bilateral deals instead 158 00:07:49,520 --> 00:07:52,360 Speaker 1: of this big, massive multilateral deal that nobody's happy with. 159 00:07:52,640 --> 00:07:55,680 Speaker 1: And so so the essence is the new shaping of 160 00:07:55,800 --> 00:07:59,520 Speaker 1: policy initiatives has got to be to deal more with 161 00:07:59,560 --> 00:08:02,280 Speaker 1: the reality is the world and how to address them. Finally, Bill, 162 00:08:02,360 --> 00:08:06,320 Speaker 1: can he do that? This week? Boy fingers crossed. I 163 00:08:06,720 --> 00:08:09,640 Speaker 1: think the talk among the globalists and internationalist is the 164 00:08:09,720 --> 00:08:12,720 Speaker 1: guy isn't smart enough to really pull this off. And 165 00:08:12,760 --> 00:08:14,680 Speaker 1: I hope he's going to surprise him on the upside 166 00:08:14,680 --> 00:08:17,280 Speaker 1: on that, because right now the British obleek crowd are 167 00:08:17,320 --> 00:08:19,280 Speaker 1: writing it off and say he's just going to make 168 00:08:19,280 --> 00:08:21,400 Speaker 1: a fool of himself. Let's see if he does. Bill 169 00:08:21,520 --> 00:08:24,480 Speaker 1: Ye Milkin Institute Chief Economist. He joins us to discuss 170 00:08:24,520 --> 00:08:40,840 Speaker 1: the global economy. This is Bloomberg Surveillance with myself, Jonathan 171 00:08:40,840 --> 00:08:44,319 Speaker 1: Pharaoh in New York City and Tom Keane in Davos, Switzerland, 172 00:08:44,679 --> 00:08:49,000 Speaker 1: all week on Bloomberg Radio. What better time to bring 173 00:08:49,000 --> 00:08:51,200 Speaker 1: in a guest who has created and produced high profile 174 00:08:51,240 --> 00:08:55,079 Speaker 1: platforms including the World Economic Forum and You're meeting at Davos, 175 00:08:55,160 --> 00:08:59,320 Speaker 1: the Clinton Global Initiative, and the Noble Laureates Conferences, just 176 00:08:59,360 --> 00:09:01,400 Speaker 1: to name a few you. His name is Richard Attias 177 00:09:01,920 --> 00:09:04,800 Speaker 1: of Richard Attias and Associates. Richard, it's always great to 178 00:09:04,800 --> 00:09:06,480 Speaker 1: have you with us on the program. Thank you for 179 00:09:06,520 --> 00:09:08,800 Speaker 1: having me. Let's imagine you're putting together a big event. 180 00:09:08,920 --> 00:09:10,960 Speaker 1: It's in the Mountains of Devils, Switzerland, and then all 181 00:09:10,960 --> 00:09:13,079 Speaker 1: of a sudden, the President of the United States decides 182 00:09:13,160 --> 00:09:15,400 Speaker 1: that he's going to attend just a couple of weeks 183 00:09:15,440 --> 00:09:19,200 Speaker 1: before it kicks off. How much trouble does that cause? 184 00:09:19,480 --> 00:09:22,600 Speaker 1: Oh you know, it happened in two thousand when President 185 00:09:22,600 --> 00:09:24,680 Speaker 1: Clinton decided to come. I think it was the last 186 00:09:24,679 --> 00:09:28,320 Speaker 1: one who came. Of course, it's a logistic nimer, usually 187 00:09:28,360 --> 00:09:31,079 Speaker 1: Air Force one just landing Zurich when you have to 188 00:09:31,280 --> 00:09:35,080 Speaker 1: probably take helicopters to go to Davos, and we don't 189 00:09:35,080 --> 00:09:36,960 Speaker 1: know what would be the weather on Friday, which is 190 00:09:36,960 --> 00:09:39,520 Speaker 1: the second potential nightmare with the snow, because if the 191 00:09:39,679 --> 00:09:43,080 Speaker 1: snow do not allow helicopters to land, if they have 192 00:09:43,160 --> 00:09:47,320 Speaker 1: to take cars, which is another backstory. And then definitely 193 00:09:47,440 --> 00:09:51,760 Speaker 1: the city is much looked than any any other day, 194 00:09:51,840 --> 00:09:56,480 Speaker 1: and usually when the room is backed, everyone wants to 195 00:09:56,520 --> 00:10:00,360 Speaker 1: attend the station. Definitely, the president of your night state, 196 00:10:00,400 --> 00:10:03,880 Speaker 1: whoever he is, is by definition or rock star, so 197 00:10:04,720 --> 00:10:08,800 Speaker 1: it's definitely a nightmare, and the city is people are 198 00:10:08,840 --> 00:10:12,360 Speaker 1: making big lines, so you can guess how it is 199 00:10:12,840 --> 00:10:14,959 Speaker 1: when the President of the United States of America is 200 00:10:15,000 --> 00:10:17,439 Speaker 1: going somewhere. So it's even worse than a very small 201 00:10:17,520 --> 00:10:22,720 Speaker 1: ski resort with snow and and three thousand delegates, including 202 00:10:22,800 --> 00:10:25,640 Speaker 1: big global CEOs, who do not understand why they should 203 00:10:25,640 --> 00:10:29,480 Speaker 1: wait to to give room to the President of the 204 00:10:29,520 --> 00:10:32,640 Speaker 1: United States of American. Kane also hates waiting, Richard, And 205 00:10:33,200 --> 00:10:35,040 Speaker 1: it's a group of big egos, so you have to 206 00:10:35,080 --> 00:10:39,719 Speaker 1: manage these egos, Rachel, I guess a big question and 207 00:10:39,840 --> 00:10:44,240 Speaker 1: logistical nightmare. But surely this is a pr dream. Yes, no, definitely. 208 00:10:44,360 --> 00:10:48,400 Speaker 1: You know, I think President Trump if he goes, because, 209 00:10:48,800 --> 00:10:51,000 Speaker 1: to be honest, I would not be surprised depending on 210 00:10:51,120 --> 00:10:56,600 Speaker 1: what happened with the government shutdown, if we suddenly learned 211 00:10:56,640 --> 00:10:59,319 Speaker 1: that he's not going anymore. But I think it doesn't care. 212 00:10:59,360 --> 00:11:01,520 Speaker 1: To be honest, he wants to go there. He wants 213 00:11:01,559 --> 00:11:04,199 Speaker 1: to talk to this elite. I'm sure he wants to 214 00:11:04,240 --> 00:11:07,000 Speaker 1: be a little bit provocative. And as you know better 215 00:11:07,040 --> 00:11:10,360 Speaker 1: than me, his way of communication is direct communication. He 216 00:11:10,400 --> 00:11:14,000 Speaker 1: cannot just continue to talk through Twitter. He doesn't want 217 00:11:14,000 --> 00:11:16,000 Speaker 1: to make big interviews. So who will go and he 218 00:11:16,040 --> 00:11:18,360 Speaker 1: will be on stage. What will be interesting to see 219 00:11:18,400 --> 00:11:21,120 Speaker 1: and to watch is which format the Print of the 220 00:11:21,200 --> 00:11:24,440 Speaker 1: United States will adopt, will be only a speech between 221 00:11:24,480 --> 00:11:28,480 Speaker 1: behind the lecturing with no questions, or if he will 222 00:11:28,559 --> 00:11:31,640 Speaker 1: accept to maybe take two three question, probably not from 223 00:11:31,679 --> 00:11:34,200 Speaker 1: the floor from the audience, but president probably from the 224 00:11:34,240 --> 00:11:37,080 Speaker 1: founder of the World Economic Farm, which probably will be 225 00:11:37,120 --> 00:11:40,199 Speaker 1: with him on stage. I hope that this question, if 226 00:11:40,240 --> 00:11:43,480 Speaker 1: they happen, will be very direct and it will help 227 00:11:43,559 --> 00:11:46,040 Speaker 1: to learn what is happening and what is in the 228 00:11:46,120 --> 00:11:50,280 Speaker 1: mind of the President Trump. That's a terrific summary. And 229 00:11:50,320 --> 00:11:53,400 Speaker 1: of course, as comes from your your decades of experience 230 00:11:53,400 --> 00:11:57,360 Speaker 1: for chard, well, when I look at the options that 231 00:11:57,440 --> 00:12:01,800 Speaker 1: the president has, which would you would I will do? 232 00:12:02,160 --> 00:12:06,640 Speaker 1: I would definitely do both. Which is delivering a twenty 233 00:12:06,640 --> 00:12:11,079 Speaker 1: minute speech followed by probably a ten fifteen minute Q 234 00:12:11,480 --> 00:12:16,240 Speaker 1: n A station Why because people need to understand really 235 00:12:16,520 --> 00:12:21,160 Speaker 1: what President Trump has in mind, especially with all these reforms. 236 00:12:21,640 --> 00:12:24,640 Speaker 1: We know that he would probably talk for twenty minutes 237 00:12:24,679 --> 00:12:27,640 Speaker 1: about how America is great, the best place to invest, 238 00:12:27,760 --> 00:12:31,120 Speaker 1: because he will be competing with many other destinations. You know, 239 00:12:31,559 --> 00:12:34,560 Speaker 1: each single world leaders who are in divorce from President 240 00:12:34,600 --> 00:12:39,040 Speaker 1: Macrie of Argentina, President mccron France, and probably even Theresa 241 00:12:39,120 --> 00:12:42,400 Speaker 1: May in the big paradox of the Brexit, are going 242 00:12:42,440 --> 00:12:45,679 Speaker 1: to divorce to explain to world leaders that their country 243 00:12:45,840 --> 00:12:48,360 Speaker 1: is the best place to invest today. And at the 244 00:12:48,400 --> 00:12:52,200 Speaker 1: time is now President mccron is hosting the minute We're 245 00:12:52,240 --> 00:12:55,800 Speaker 1: talking in Paris a pre divorce forum at Versailles in 246 00:12:55,880 --> 00:12:59,360 Speaker 1: the Castle of Oversailles with one d and fifty global 247 00:12:59,440 --> 00:13:03,000 Speaker 1: CEO who accepted his invitation, which was sent on the 248 00:13:03,160 --> 00:13:06,520 Speaker 1: end of December. So this is showing you how world 249 00:13:06,600 --> 00:13:10,960 Speaker 1: leaders are in permanent now connection with global CEOs and 250 00:13:11,040 --> 00:13:14,600 Speaker 1: how global CEOs wants to be connected to world leaders. 251 00:13:14,640 --> 00:13:18,680 Speaker 1: So back to President Trump, I think definitely he should 252 00:13:18,800 --> 00:13:22,640 Speaker 1: explain what he's doing. You know, everybody is watching the 253 00:13:23,080 --> 00:13:27,240 Speaker 1: great stock markets in America, so people have to understand 254 00:13:27,320 --> 00:13:29,959 Speaker 1: if it is a bubble or if it is solid, 255 00:13:30,600 --> 00:13:34,120 Speaker 1: and why I should put my money in the American industries. 256 00:13:34,760 --> 00:13:38,560 Speaker 1: And when I look at the list of potential members 257 00:13:38,640 --> 00:13:42,520 Speaker 1: of cabinet coming with him, definitely they will have bilateral 258 00:13:42,720 --> 00:13:48,120 Speaker 1: meetings talking about transportation, health, scare, energy. These are definitely 259 00:13:48,160 --> 00:13:52,240 Speaker 1: the sectors where people wants to probably see opportunities in 260 00:13:52,360 --> 00:13:57,280 Speaker 1: the country. Richards of Richard ass and Associates great catch 261 00:13:57,360 --> 00:13:59,439 Speaker 1: up with you to kind of lean on your experience 262 00:13:59,440 --> 00:14:01,959 Speaker 1: of putting up events like the World Economic Forum in 263 00:14:02,000 --> 00:14:04,360 Speaker 1: Dallas Switzen together. As the President of the United States 264 00:14:04,440 --> 00:14:20,880 Speaker 1: is sent to descend on Switzerland, John, the snow is 265 00:14:20,920 --> 00:14:23,640 Speaker 1: so great here and it is not funny. It is 266 00:14:23,960 --> 00:14:27,120 Speaker 1: very serious in Switzerland, and that of course is avalanches. 267 00:14:27,800 --> 00:14:30,880 Speaker 1: I have never seen the warnings out. There's Zermont I 268 00:14:30,920 --> 00:14:35,040 Speaker 1: believe is closed again, down to the south and um, 269 00:14:35,480 --> 00:14:38,600 Speaker 1: it's just everywhere. It's here. Here's the report at five 270 00:14:38,640 --> 00:14:42,280 Speaker 1: pm last night. John, you'll love this site. Psalms to 271 00:14:42,400 --> 00:14:49,680 Speaker 1: go ben schnee gafallen as Edward teddy Off Montaugs invite 272 00:14:49,720 --> 00:14:57,280 Speaker 1: there Stark schniffal voras gagnd. That's very helpful. That's about it. 273 00:14:57,560 --> 00:15:00,560 Speaker 1: That is about as clear as a government shutdown language Washington. 274 00:15:00,560 --> 00:15:02,760 Speaker 1: Which is a good way to migrate in German or 275 00:15:02,840 --> 00:15:06,480 Speaker 1: fractured German, I should say to the fractured nation and 276 00:15:06,640 --> 00:15:09,280 Speaker 1: is shut down, Greg Valier, where this is German is 277 00:15:09,520 --> 00:15:13,920 Speaker 1: is better than anybody's. German is better than mine. Greg, 278 00:15:14,200 --> 00:15:19,440 Speaker 1: good morning. You have seen you've seen many shutdowns. The 279 00:15:19,480 --> 00:15:23,120 Speaker 1: one that's so different here is this White House response. 280 00:15:23,280 --> 00:15:26,240 Speaker 1: What will you listen for or look for from the 281 00:15:26,280 --> 00:15:29,600 Speaker 1: White House in the next forty eight hours? Well, Tom, 282 00:15:29,760 --> 00:15:33,520 Speaker 1: something explicit, something coherent from the President. I mean, so 283 00:15:33,680 --> 00:15:38,280 Speaker 1: far it's very unclear. Just what do you want? I 284 00:15:38,280 --> 00:15:40,600 Speaker 1: I look at it, Greg, and I think all of 285 00:15:40,680 --> 00:15:43,440 Speaker 1: us have read the obligatory articles, and we've looked at 286 00:15:43,440 --> 00:15:47,120 Speaker 1: the obligatory things and open question. What sticks out to 287 00:15:47,240 --> 00:15:52,160 Speaker 1: Greg Valier about what went down? What? What? What made 288 00:15:52,160 --> 00:15:56,720 Speaker 1: you scratch your head at two am? All beyond any question, Tom, 289 00:15:56,760 --> 00:16:00,280 Speaker 1: the fact that Schumer put the wall on the tape. Boy, 290 00:16:00,320 --> 00:16:04,040 Speaker 1: he is willing to negotiate on the wall. Very unclear 291 00:16:04,080 --> 00:16:07,160 Speaker 1: as to how much money. They're talking about different versions, 292 00:16:07,200 --> 00:16:09,640 Speaker 1: but he did put that on the table, and I 293 00:16:09,680 --> 00:16:12,400 Speaker 1: think that's important. Greg alone wants you a question about 294 00:16:12,400 --> 00:16:15,280 Speaker 1: the term the white House. Tom asked you where the 295 00:16:15,320 --> 00:16:17,680 Speaker 1: White House stands on this issue. It's not clear to 296 00:16:17,760 --> 00:16:19,800 Speaker 1: me that the view of the say White House is 297 00:16:19,880 --> 00:16:22,320 Speaker 1: necessarily the view of the President of the United States. 298 00:16:22,560 --> 00:16:24,360 Speaker 1: That doesn't seem to be one coherent view within the 299 00:16:24,360 --> 00:16:26,680 Speaker 1: White House. Is something that Tom's asked me about this morning. 300 00:16:26,720 --> 00:16:30,800 Speaker 1: Do you see a coherent White House here? Greg, Well, 301 00:16:31,040 --> 00:16:33,240 Speaker 1: when you look at two important aids, the chief is 302 00:16:33,280 --> 00:16:36,960 Speaker 1: past John Kelly and this fellow Miller. I mean, they 303 00:16:37,040 --> 00:16:40,960 Speaker 1: both are very hard line on immigration. They don't want 304 00:16:41,080 --> 00:16:44,840 Speaker 1: consul citizenship, they want a wall, they don't want chain immigration, 305 00:16:44,920 --> 00:16:47,760 Speaker 1: all this stuff, so that they are taking a hard line. 306 00:16:47,760 --> 00:16:51,440 Speaker 1: The problem is when the president gets into a negotiating session, 307 00:16:51,480 --> 00:16:54,960 Speaker 1: he spens he wants to be conciliatory, and then these 308 00:16:54,960 --> 00:16:59,000 Speaker 1: advisors yanked him right back. So what leads to reconciliation 309 00:16:59,040 --> 00:17:01,400 Speaker 1: here is that the polls went against one party versus 310 00:17:01,440 --> 00:17:05,160 Speaker 1: the other. What leads to a break here? That could 311 00:17:05,160 --> 00:17:07,119 Speaker 1: be it, But frankly, I think this is going to 312 00:17:07,200 --> 00:17:10,640 Speaker 1: go on for a very long time. Even if there's 313 00:17:10,640 --> 00:17:13,880 Speaker 1: a deal today to keep the government open until February eight, 314 00:17:13,960 --> 00:17:17,160 Speaker 1: that just means we have another crisis on February eighth, 315 00:17:17,520 --> 00:17:19,920 Speaker 1: and we could go that right back into a shutdown again. 316 00:17:20,080 --> 00:17:23,760 Speaker 1: Here's the problem. Both parties have activists on the right 317 00:17:23,840 --> 00:17:26,439 Speaker 1: and on the left who will not agree to a 318 00:17:26,560 --> 00:17:30,520 Speaker 1: centrist deal, and these activists could preclude a deal quite 319 00:17:30,520 --> 00:17:33,119 Speaker 1: a while. You do this, Greg, in your report this morning, 320 00:17:33,119 --> 00:17:35,960 Speaker 1: you say the center may not hold. I get that, 321 00:17:36,280 --> 00:17:41,600 Speaker 1: but there has to be a catalyst to common sense. 322 00:17:42,400 --> 00:17:46,639 Speaker 1: What's the catalyst? Well, I think Ms McConnell plays a 323 00:17:46,640 --> 00:17:49,680 Speaker 1: big role here. He he's very conscious that they could 324 00:17:49,800 --> 00:17:53,560 Speaker 1: have big losses in the November elections. I think he 325 00:17:53,640 --> 00:17:56,159 Speaker 1: also was a gas at this idea of changing the 326 00:17:56,160 --> 00:17:59,119 Speaker 1: filibuster rule. I think he feels that many people do. 327 00:17:59,400 --> 00:18:02,800 Speaker 1: Schumer overplayed his hand. So I think McConnell could play 328 00:18:02,920 --> 00:18:06,160 Speaker 1: actually a very constructive role. Okay, So so he can 329 00:18:06,160 --> 00:18:08,360 Speaker 1: play a constructive role, and I guess we need leadership. 330 00:18:08,440 --> 00:18:11,439 Speaker 1: Let me circle back to my first question. If we 331 00:18:11,560 --> 00:18:14,960 Speaker 1: all assume, whether we support Mr Trump or not, that 332 00:18:15,119 --> 00:18:20,080 Speaker 1: this president is a political neophyte, where's the person to 333 00:18:20,359 --> 00:18:25,440 Speaker 1: teach him what to do in these unusual circumstances. I 334 00:18:25,440 --> 00:18:28,560 Speaker 1: I Lindsey Graham is clearly front and center, is a 335 00:18:28,640 --> 00:18:33,480 Speaker 1: unique kind of Southern always intriguing Republican. But where's the 336 00:18:33,560 --> 00:18:37,560 Speaker 1: helper of the president in this mess? It could be 337 00:18:37,560 --> 00:18:40,880 Speaker 1: in McConnell. I think Graham is a bit tainted at 338 00:18:40,920 --> 00:18:43,560 Speaker 1: the White House. You know another thing that could maybe 339 00:18:43,880 --> 00:18:47,080 Speaker 1: chasing this president, since he's so obsessed with the markets. 340 00:18:47,480 --> 00:18:49,960 Speaker 1: If the dollar in the market start to weaken based 341 00:18:49,960 --> 00:18:53,280 Speaker 1: on a seer of utter chaos in this city, that's 342 00:18:53,280 --> 00:18:55,760 Speaker 1: something that would get Trump's attention. Well, Greg, that's not 343 00:18:55,760 --> 00:18:57,760 Speaker 1: gonna work because it's not happening yet. And I remember 344 00:18:57,760 --> 00:18:59,200 Speaker 1: when the president, not his states she used to be 345 00:18:59,240 --> 00:19:01,880 Speaker 1: called barracabam in President Obama came out and said things 346 00:19:01,960 --> 00:19:04,000 Speaker 1: like the market should be worried, and it was the 347 00:19:04,000 --> 00:19:07,040 Speaker 1: odd dead seating debate. And guess what, the market wasn't worried, 348 00:19:07,080 --> 00:19:09,119 Speaker 1: so it wouldn't be the first one that try to 349 00:19:09,200 --> 00:19:12,119 Speaker 1: lean on the market to move things along. Give framed 350 00:19:12,119 --> 00:19:16,159 Speaker 1: this as an activist Democrats versus activists Republican story, and 351 00:19:16,200 --> 00:19:19,840 Speaker 1: within the core of those parties, within the electorate remains 352 00:19:20,240 --> 00:19:23,160 Speaker 1: those activists on either side. But are those activists willing 353 00:19:23,200 --> 00:19:25,800 Speaker 1: to shut down the government for their cause? Does that 354 00:19:25,880 --> 00:19:29,840 Speaker 1: support remain? Yes, I do. I think for now they are, 355 00:19:30,520 --> 00:19:32,879 Speaker 1: and as we as we discussed earlier, maybe if the 356 00:19:32,960 --> 00:19:36,480 Speaker 1: polls turn, it would change attitudes, but right now they're 357 00:19:36,560 --> 00:19:39,400 Speaker 1: dug in pretty good. And again I would caution everyone 358 00:19:39,720 --> 00:19:41,440 Speaker 1: if there's a deal in the next day or two 359 00:19:41,520 --> 00:19:44,360 Speaker 1: or three, that does not mean we get anything by 360 00:19:44,400 --> 00:19:47,640 Speaker 1: February eight. And this we could go right back into 361 00:19:47,680 --> 00:19:50,359 Speaker 1: a crisis in two and a half week. So, Greg, 362 00:19:50,400 --> 00:19:53,040 Speaker 1: what does a crisis actually look like? It's a strong word. 363 00:19:53,080 --> 00:19:56,520 Speaker 1: What's the crisis in the nation's council? Yeah, I think 364 00:19:56,560 --> 00:19:58,800 Speaker 1: a crisis is eight or nine hundred thousand people out 365 00:19:58,800 --> 00:20:03,760 Speaker 1: of work and that eventually have an impact on consumer spending. Uh, 366 00:20:03,840 --> 00:20:07,440 Speaker 1: it certainly has an impact on defense contractors who already 367 00:20:07,440 --> 00:20:10,280 Speaker 1: are confused. We're four months into a new fiscal year 368 00:20:10,320 --> 00:20:11,919 Speaker 1: and they don't know what their budgets are going to be. 369 00:20:12,359 --> 00:20:15,680 Speaker 1: So this does become a confidence issue. We're not there yet, 370 00:20:15,960 --> 00:20:18,119 Speaker 1: but at three or four or five weeks shutdown and 371 00:20:18,160 --> 00:20:20,719 Speaker 1: I think confidence starts to erode. So correct, Let's get 372 00:20:20,760 --> 00:20:22,960 Speaker 1: to the bigger issue. The markets looking the other way 373 00:20:23,080 --> 00:20:25,000 Speaker 1: as far as the governments shutdown is concerned, at least 374 00:20:25,000 --> 00:20:27,040 Speaker 1: for now, might change, but it isn't at the moment. 375 00:20:27,160 --> 00:20:29,560 Speaker 1: Let's get to the debt ceiling debate. What's the read 376 00:20:29,560 --> 00:20:32,080 Speaker 1: across from this to the debt ceiling debate and how 377 00:20:32,200 --> 00:20:35,080 Speaker 1: ugly that could be in the coming months. Yeah, this 378 00:20:35,160 --> 00:20:37,640 Speaker 1: is just like the order. This is like the appetizer. 379 00:20:38,040 --> 00:20:41,840 Speaker 1: The death failing story probably will peak in early April. 380 00:20:41,920 --> 00:20:45,080 Speaker 1: And here's here's the bottom line. There are not enough 381 00:20:45,200 --> 00:20:48,000 Speaker 1: votes to raise the death failing, certainly not enough votes 382 00:20:48,000 --> 00:20:51,720 Speaker 1: among Republicans who won't do it. Will Democrats go along 383 00:20:51,800 --> 00:20:55,159 Speaker 1: and cooperate? I'm not so sure. Oh yeah, thank you 384 00:20:55,200 --> 00:20:57,840 Speaker 1: so much. Greatly appreciate the briefing. After what has been 385 00:20:58,200 --> 00:21:00,840 Speaker 1: and exhausted, we can we can. It's say enough about 386 00:21:00,960 --> 00:21:04,639 Speaker 1: his Horizon investment effort to greet our morning with his 387 00:21:04,760 --> 00:21:22,439 Speaker 1: perspective on capital. I have really been looking forward to 388 00:21:22,480 --> 00:21:25,920 Speaker 1: this discussion. It's away from Davos, I guess, it's away 389 00:21:25,960 --> 00:21:30,200 Speaker 1: from economics, I guess, And maybe it's just about where 390 00:21:30,200 --> 00:21:34,200 Speaker 1: we're all heading in our homes. Yes, in our businesses, 391 00:21:34,240 --> 00:21:38,600 Speaker 1: but in our homes with this thing called media. Craig 392 00:21:38,640 --> 00:21:42,320 Speaker 1: Moffatt and Michael Nathanson have a shingle out of excellence 393 00:21:42,480 --> 00:21:47,200 Speaker 1: on media and telephonic analysis at Moffatt Nathanson. They worked 394 00:21:47,200 --> 00:21:50,919 Speaker 1: for years at Sanford Bernstein, and Michael Nathanson joins us 395 00:21:51,119 --> 00:21:54,960 Speaker 1: right now. Michael, I could start with eight topics, but 396 00:21:55,119 --> 00:21:58,040 Speaker 1: I'm going to give you an open question of the 397 00:21:58,080 --> 00:22:02,359 Speaker 1: cliche of a decade ago, which is content is king? 398 00:22:02,920 --> 00:22:07,520 Speaker 1: Is content still king? The morning? Tom Um? I think 399 00:22:07,920 --> 00:22:10,400 Speaker 1: I think we're moving to something called platform is king. 400 00:22:10,960 --> 00:22:15,360 Speaker 1: I think it's about getting massive aggregation, scale and content. 401 00:22:15,480 --> 00:22:17,119 Speaker 1: Your Your content doesn't have to be the best content 402 00:22:17,160 --> 00:22:20,119 Speaker 1: in the world, but if you have enough connected homes, 403 00:22:20,280 --> 00:22:23,399 Speaker 1: enough subscribers, it's good enough. And I think that's what 404 00:22:23,520 --> 00:22:25,600 Speaker 1: Netflix has proven. They've got some good content, but they 405 00:22:25,640 --> 00:22:28,760 Speaker 1: also have a hundred million subscribers. So better content maybe 406 00:22:28,760 --> 00:22:31,159 Speaker 1: squeezed out on smaller platforms. So I think we're now 407 00:22:31,240 --> 00:22:35,160 Speaker 1: moving into an era where scale, maybe it's astitution scale, 408 00:22:35,160 --> 00:22:38,240 Speaker 1: maybe it's a platform scale. Scales are gonna matter, Michael. 409 00:22:38,440 --> 00:22:41,200 Speaker 1: For a moment, we thought that could be only one winner, 410 00:22:41,680 --> 00:22:44,879 Speaker 1: and many people identified that one winner as Netflix. We're 411 00:22:44,920 --> 00:22:48,760 Speaker 1: now seeing Netflix become less dependent compared to where they were, 412 00:22:48,800 --> 00:22:51,359 Speaker 1: say a couple of years ago, on other people's content. 413 00:22:51,800 --> 00:22:54,480 Speaker 1: Can there be more than one winner in this space? Oh, John, 414 00:22:54,560 --> 00:22:56,640 Speaker 1: without a doubt. And since they've last seen you about 415 00:22:56,680 --> 00:22:59,679 Speaker 1: a month ago, we've had that Fox Disney merger. Right, 416 00:23:00,040 --> 00:23:02,199 Speaker 1: if you look at the content that they're going to 417 00:23:02,240 --> 00:23:04,760 Speaker 1: a mass, they're in pretty good shade. Now they have 418 00:23:04,840 --> 00:23:07,879 Speaker 1: to build their platform. But I think what the market 419 00:23:07,920 --> 00:23:09,399 Speaker 1: to maybe missing here is that it is not a 420 00:23:09,400 --> 00:23:12,480 Speaker 1: winner take all business. You see it in broadcasts with 421 00:23:12,520 --> 00:23:14,600 Speaker 1: three or four networks, to see it on premium channels 422 00:23:14,600 --> 00:23:17,720 Speaker 1: with HBO Showtime, you're gonna have more than one s 423 00:23:17,720 --> 00:23:21,359 Speaker 1: FOD winner. Netflix is definitely one. Disney Fox could be 424 00:23:21,359 --> 00:23:23,960 Speaker 1: the second. Amazon is going to be a third. Uh 425 00:23:24,000 --> 00:23:26,280 Speaker 1: So yeah, I think it'll be a much more competitive landscape. 426 00:23:26,760 --> 00:23:29,840 Speaker 1: And finally, Disney has woken up and said, you know, 427 00:23:29,880 --> 00:23:32,160 Speaker 1: we should be in this business. Am I buying Fox? 428 00:23:32,200 --> 00:23:35,919 Speaker 1: They've bought more long tail library content to put on 429 00:23:35,920 --> 00:23:37,920 Speaker 1: that platform, so that's where they're moving towards. So it's 430 00:23:37,920 --> 00:23:39,480 Speaker 1: gonna be interesting, Michael, to see what they do with 431 00:23:39,520 --> 00:23:41,719 Speaker 1: the content they have acquired from Fox and how they 432 00:23:41,760 --> 00:23:45,240 Speaker 1: treat Netflix with some of the content that runs on Netflix. 433 00:23:45,280 --> 00:23:48,040 Speaker 1: They've already said on the Disney side of things that 434 00:23:48,040 --> 00:23:51,720 Speaker 1: they're going to sever any license agreement with Netflix going forward. 435 00:23:51,720 --> 00:23:53,159 Speaker 1: Are they going to do the same thing with the 436 00:23:53,760 --> 00:23:56,000 Speaker 1: Century Fox assets? Do you think? Michael? Oh, without a 437 00:23:56,040 --> 00:23:58,080 Speaker 1: doubt that we did a note about this a couple 438 00:23:58,119 --> 00:24:01,239 Speaker 1: of months ago, and we went through Netflix's catalog and 439 00:24:01,280 --> 00:24:04,560 Speaker 1: we said that Fox very quietly had supplied Netflix with 440 00:24:04,640 --> 00:24:07,280 Speaker 1: some of their best shows a Family Guy or the 441 00:24:07,359 --> 00:24:10,639 Speaker 1: f X shows, Um, It's always sunny in phil They 442 00:24:10,640 --> 00:24:13,679 Speaker 1: basically gave them a lot of great content. They've been 443 00:24:13,720 --> 00:24:17,040 Speaker 1: saying very quietly that they're pulling content off on Netflix 444 00:24:17,240 --> 00:24:19,560 Speaker 1: and they've gotta put it on Hulu, which is now 445 00:24:19,560 --> 00:24:22,280 Speaker 1: owned by Disney. So I think both Fox and Disney's 446 00:24:22,320 --> 00:24:24,679 Speaker 1: content will not be on Netflix a year and a 447 00:24:24,760 --> 00:24:26,359 Speaker 1: year and a half from now. I mean all this 448 00:24:26,560 --> 00:24:31,280 Speaker 1: copyrighted material in the argument over writes it, does it 449 00:24:31,400 --> 00:24:34,520 Speaker 1: make the valuations just go up up up? If there's 450 00:24:34,640 --> 00:24:36,840 Speaker 1: I mean, there's too much stuff, Michael for me to 451 00:24:36,880 --> 00:24:39,680 Speaker 1: watch or anybody in my family to watch. But does 452 00:24:39,720 --> 00:24:43,760 Speaker 1: the glut of content just continue? Tom, It's funny. I 453 00:24:43,800 --> 00:24:45,440 Speaker 1: was talking to my wife bat this morning. There's five 454 00:24:45,680 --> 00:24:50,800 Speaker 1: dred new scripted shows on the air in in Countyr seventeen. 455 00:24:50,840 --> 00:24:53,920 Speaker 1: Five scripted shows. There's no way that any family can 456 00:24:53,960 --> 00:24:56,359 Speaker 1: stay on top of that, right, So you default to 457 00:24:56,400 --> 00:24:58,159 Speaker 1: a couple of shows that you've heard of, But you 458 00:24:58,240 --> 00:25:01,800 Speaker 1: also go back to cattle, you know, for comedies, you 459 00:25:01,880 --> 00:25:05,000 Speaker 1: watch Scifel, Friends, Family Guy, it's you know, big bang theory. 460 00:25:05,440 --> 00:25:08,600 Speaker 1: So there's definitely gonna be more and more content produced, 461 00:25:08,840 --> 00:25:11,280 Speaker 1: but you'll have less time to consider that content. You'll 462 00:25:11,280 --> 00:25:14,760 Speaker 1: stick to some of the long tail, big, big name content, 463 00:25:15,080 --> 00:25:16,840 Speaker 1: and then you will probably go back to things that 464 00:25:16,840 --> 00:25:20,119 Speaker 1: you're comproble with. So buying a library is gonna go 465 00:25:20,240 --> 00:25:22,199 Speaker 1: up in value, you know, it really will be. It's 466 00:25:22,240 --> 00:25:24,080 Speaker 1: gonna be. You don't want to be in the business 467 00:25:24,240 --> 00:25:29,320 Speaker 1: of having small, you know, unknown shows like some of 468 00:25:29,320 --> 00:25:31,879 Speaker 1: our cable networks, where you basically don't get traction. You 469 00:25:32,000 --> 00:25:34,680 Speaker 1: keep investing in more and more shows, being you're getting 470 00:25:34,680 --> 00:25:37,000 Speaker 1: no attraction. So that's a tough place to be. And 471 00:25:37,040 --> 00:25:38,480 Speaker 1: we think a lot of cable networks are going to 472 00:25:38,600 --> 00:25:42,040 Speaker 1: have to consolidate or basically stop spending because they can't 473 00:25:42,080 --> 00:25:44,400 Speaker 1: make the money work anymore. So, Michael is a Giants fan. 474 00:25:44,560 --> 00:25:47,000 Speaker 1: I won't ask you about the Super Bowl. Tom Kane might, 475 00:25:47,080 --> 00:25:49,240 Speaker 1: that's up to him, but since we're sitting across from 476 00:25:49,240 --> 00:25:52,320 Speaker 1: each other, I'll protect myself and will avoid that topic. 477 00:25:52,359 --> 00:25:53,520 Speaker 1: But I do want to talk to you about the 478 00:25:53,560 --> 00:25:57,760 Speaker 1: price of sports content. It's getting more and more expensive, 479 00:25:58,480 --> 00:26:00,840 Speaker 1: whether it's over the Premier league rights in the United 480 00:26:00,920 --> 00:26:03,800 Speaker 1: Kingdom and soccer rights there, or whether it's in the 481 00:26:03,840 --> 00:26:06,960 Speaker 1: United States and in the NFL, etcetera. The price of 482 00:26:07,080 --> 00:26:10,960 Speaker 1: sport and the content is getting more expensive. But as 483 00:26:11,000 --> 00:26:14,800 Speaker 1: an asset, the eyes on that particular asset falling away, 484 00:26:15,080 --> 00:26:17,200 Speaker 1: they're not increasing. So I don't see the growth in 485 00:26:17,240 --> 00:26:20,840 Speaker 1: the viewership alongside the growth in the value that people 486 00:26:20,880 --> 00:26:24,080 Speaker 1: are paying for these assets. That doesn't make sense to me. Michael, 487 00:26:24,320 --> 00:26:28,120 Speaker 1: why are we still doing this? Okay, great question. We're 488 00:26:28,160 --> 00:26:31,159 Speaker 1: doing this job because when when you turn on the 489 00:26:31,200 --> 00:26:33,760 Speaker 1: TV set on a given night and there's a sporting event, 490 00:26:33,920 --> 00:26:36,080 Speaker 1: you want that game to be on to last night's 491 00:26:36,720 --> 00:26:38,880 Speaker 1: let's say last night's first game, because the second game 492 00:26:38,960 --> 00:26:42,680 Speaker 1: is not good. But the first game Patriots, right, Pagriot Jacksonville. 493 00:26:42,960 --> 00:26:45,480 Speaker 1: That's a game that you want to watch. And if 494 00:26:45,480 --> 00:26:48,280 Speaker 1: you're distributor, if you're a cable operator, doesn't have that game, 495 00:26:48,680 --> 00:26:51,640 Speaker 1: you're gonna switch cable operators. So I think what we're 496 00:26:51,640 --> 00:26:54,679 Speaker 1: missing is the rate. Yes, ratings are coming down, with 497 00:26:54,760 --> 00:26:57,080 Speaker 1: a passion for the people who remain to watch that 498 00:26:57,480 --> 00:26:59,439 Speaker 1: is incredibly high. And therefore, if you don't have that 499 00:26:59,480 --> 00:27:03,080 Speaker 1: as a strict you'll lose a customer. So unfortunately it's 500 00:27:03,160 --> 00:27:07,080 Speaker 1: it's a shrinking contributor to the ecosystem, But as a 501 00:27:07,080 --> 00:27:10,080 Speaker 1: as a passion play, it's nothing better, you know, to 502 00:27:10,160 --> 00:27:13,320 Speaker 1: dry people. What's your passion for? By hold cell? I mean, 503 00:27:13,359 --> 00:27:18,000 Speaker 1: what's where's the value in this crazy bowl market and 504 00:27:18,000 --> 00:27:21,200 Speaker 1: the Michael Nathan's and space? Yeah, Tom, you know it's interesting. 505 00:27:21,720 --> 00:27:24,760 Speaker 1: The past couple of months have been really um surprising. 506 00:27:25,240 --> 00:27:27,919 Speaker 1: We've seen we've seen it. So we have buys on 507 00:27:27,960 --> 00:27:31,400 Speaker 1: Disney and Fox that's been consistently our buys because both 508 00:27:31,440 --> 00:27:36,000 Speaker 1: those companies own a ton of life sports proprietary, proprietary content. 509 00:27:36,160 --> 00:27:38,600 Speaker 1: So we're always been Disney Bowls, as you know, and 510 00:27:38,680 --> 00:27:42,240 Speaker 1: we've been Fox Bowls absent that. In traditional media, we 511 00:27:42,359 --> 00:27:44,959 Speaker 1: have a really hard time with all the changing um, 512 00:27:45,200 --> 00:27:47,560 Speaker 1: you know, the changing landscape. And again we come back 513 00:27:47,640 --> 00:27:51,000 Speaker 1: to we're a fang. We cover the fangs. Facebook and 514 00:27:51,040 --> 00:27:53,080 Speaker 1: Google get seem to us as the place to go, 515 00:27:53,520 --> 00:27:56,520 Speaker 1: and they are not that expensive relative to the growth 516 00:27:56,560 --> 00:28:00,000 Speaker 1: they deliver, So our remain pretty barished on tradial media. 517 00:28:00,040 --> 00:28:02,320 Speaker 1: You and I can't help but look at those fangs 518 00:28:02,400 --> 00:28:04,720 Speaker 1: and say, you know, two of the three recover a 519 00:28:04,880 --> 00:28:07,080 Speaker 1: really good value for the growth they deliver. We're gonna 520 00:28:07,119 --> 00:28:08,760 Speaker 1: come back on that, I know, John Farrow and I 521 00:28:08,880 --> 00:28:11,439 Speaker 1: want to talk about Facebook and the video. John one 522 00:28:11,480 --> 00:28:13,760 Speaker 1: more question squeezing and when Mr Nations thank you. So 523 00:28:13,960 --> 00:28:18,280 Speaker 1: I appreciate that, Micho, this conversation based on the assumption 524 00:28:18,359 --> 00:28:22,400 Speaker 1: that the actual Disney Folksdale closes um could take a while, 525 00:28:22,560 --> 00:28:24,200 Speaker 1: It might not happen. It's so where do you stand 526 00:28:24,280 --> 00:28:26,800 Speaker 1: on that right now? What's the vice case for you? Guys? Well, 527 00:28:27,119 --> 00:28:29,600 Speaker 1: let's say our our base our base case here is 528 00:28:29,680 --> 00:28:33,640 Speaker 1: we were surprised that Disney, you know, that this deal 529 00:28:33,800 --> 00:28:36,200 Speaker 1: included all the regional sports networks, because when Disney is 530 00:28:36,240 --> 00:28:39,760 Speaker 1: going to own, if this deal goes through, will be ESPN, 531 00:28:40,200 --> 00:28:43,680 Speaker 1: ABC and your local regional sports network. That seems like 532 00:28:43,800 --> 00:28:47,000 Speaker 1: too much concentration or power. We're assuming that they're gonna 533 00:28:47,000 --> 00:28:49,040 Speaker 1: have to divest the rs NS, the regional sports network. 534 00:28:49,080 --> 00:28:51,320 Speaker 1: So we assume the deal goes through, but that Disney 535 00:28:51,360 --> 00:28:53,000 Speaker 1: is going to have to divest an asset to get 536 00:28:53,040 --> 00:28:56,200 Speaker 1: it through. And I don't think that that's not out 537 00:28:56,240 --> 00:29:00,840 Speaker 1: of mainstream thinking. So that's not why they're buying Fox, 538 00:29:00,920 --> 00:29:03,480 Speaker 1: and buying Fox for that TV and a film library 539 00:29:04,000 --> 00:29:06,640 Speaker 1: and for FX, which is those three properties have a 540 00:29:06,720 --> 00:29:10,040 Speaker 1: ton of content for the long, long run. Michael Nathanson 541 00:29:10,120 --> 00:29:18,000 Speaker 1: with US thrilled, Davin with us with Mofatt Nathanson. Thanks 542 00:29:18,040 --> 00:29:22,240 Speaker 1: for listening to the Bloomberg Surveillance podcast. Subscribe and listen 543 00:29:22,520 --> 00:29:27,840 Speaker 1: to interviews on Apple Podcasts, SoundCloud, or whichever podcast platform 544 00:29:27,960 --> 00:29:32,200 Speaker 1: you prefer. I'm on Twitter at Tom Keane before the podcast. 545 00:29:32,320 --> 00:29:35,800 Speaker 1: You can always catch us worldwide. I'm Bloomberg Radio