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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along

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Speaker 2: with Paul Sweeney. Join us each day for insight from

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Speaker 2: or anywhere else you listen and always I'm Bloomberg Radio,

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Speaker 2: the Bloomberg Terminal, and the Bloomberg Business App. Now a

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Speaker 2: three hour conversation with Dan Eisa web Bush's I don't

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Speaker 2: know where where's he? Ben?

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Speaker 3: I know?

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Speaker 2: I think he's so large now that we can't even

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Speaker 2: get them on the show. Dan, let's talk Tesla first.

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Speaker 2: I know you're gonna give me the positive spin. Liam

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Speaker 2: Denning writes a beautiful column must tells Tesla dream, but

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Speaker 2: don't ask for the details. What's the timeline across April

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Speaker 2: May June to where Musk has to seep out the

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Speaker 2: successful initiation of the so called plan.

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Speaker 4: Look, I think last night was a big start because

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Speaker 4: the sub thirty K vehicle. I'll call it a Model

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Speaker 4: two point five. It's going to be accelerated. I mean,

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Speaker 4: this would I come first half twenty twenty five, and

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Speaker 4: more details clearly have to come out, but this is

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Speaker 4: no new factory line. I think this is a huge

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Speaker 4: start for what the bulls needed to hear on the

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Speaker 4: Tesla story, especially given the dark days and what was

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Speaker 4: really a train wreck one Q.

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Speaker 2: I mean at Paul to jump in here, because you know,

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Speaker 2: Dan and I don't agree on this. I mean, you

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Speaker 2: know he's a good friend, but you know, I'm just

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Speaker 2: I'm with Liam Denning. I'm like, are you kidding me?

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Speaker 2: That was a conference? Was that a conference called dan ives.

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Speaker 4: Relative to the last few calls, which we talked about, right,

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Speaker 4: I mean it was a disaster. Last night you actually

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Speaker 4: had a vision. The growth strategy was laid out, talked

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Speaker 4: about the lower cause vehicle, and the fears were they

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Speaker 4: were going to go straight to rover, taxis and autonomous.

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Speaker 4: That was a big overhang in the stock. And then

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Speaker 4: you look at the margin the cause cuts. I finally

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Speaker 4: feel like they're a blue crib.

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Speaker 2: Paul.

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Speaker 4: After a few quarters, Paul helped me.

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Speaker 2: Here I'm on sixth Avenue. I'm trying to get up

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Speaker 2: to Central Park South Shore. Who was to go left

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Speaker 2: or right? It's a roulette. What's the robotext you do?

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Speaker 2: When you all the cars are turning right on fifty

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Speaker 2: eighth street. Explain what a robotext he does. It's sixth

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Speaker 2: Avenue in fifty eight He's.

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Speaker 5: Gonna employ artificial intelligence. AI is what's gonna happen?

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Speaker 2: Yeah?

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Speaker 3: For you?

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Speaker 5: Hey, Dan, So I guess I got off that call yesterday.

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Speaker 5: I was walking on the borderwalk down the shore. I

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Speaker 5: actually dialed into the call to listen, and I got

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Speaker 5: off the call saying I either believe and I buy

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Speaker 5: the stock, or I don't and I sell the stock.

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Speaker 5: Is that where we are now with the stock? Do

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Speaker 5: you think?

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Speaker 4: Definitely? Look, I think it's the knives have been sharpened.

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Speaker 4: So bulls and bears you meet the bed here?

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Speaker 2: Yeah, night.

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Speaker 4: Look I heard from many bears obviously over the last

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Speaker 4: you know, called sixty eight hours. They'll have their stor

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Speaker 4: But I think for the bulls, they finally have something

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Speaker 4: to hang their hat on. And again betting on betting

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Speaker 4: against Musk for the last four or five years. It's

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Speaker 4: like betting against truths in this series.

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Speaker 2: He has done this before. Some question, Okay, I'm tesseling

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Speaker 2: out Dan ives on Microsoft. That's going to be a

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Speaker 2: different call, a different earnings report, isn't it? All?

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Speaker 6: Right?

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Speaker 4: Look, this is the tactician. I mean, you have the

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Speaker 4: hall of fame in Thedella. The AI revolution, it's here,

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Speaker 4: and I think demonization that we're starting to see at Microsoft,

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Speaker 4: we see it, you know, across I think the software layer.

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Speaker 4: This is the call the whole street's going to be

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Speaker 4: watching because it chows where the monization of AI is

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Speaker 4: as the baton gets handed from Nvidia to Microsoft.

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Speaker 5: So, Dan, that's kind of where I think a lot

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Speaker 5: of investors would like to see this Microsoft story go.

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Speaker 5: It's up eight percent year to date, it is not

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Speaker 5: getting fully priced in as an AI story. It seems

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Speaker 5: like relative to some other names like Nvidia. What do

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Speaker 5: you think Microsoft needs to say on their call tomorrow

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Speaker 5: to maybe gotta get that story across a little bit more.

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Speaker 4: Look, I think it's really numbers. It's showing co pile

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Speaker 4: it in terms of what deployments looking at the moonization.

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Speaker 4: Of course, Azure the cloud number is the big focus

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Speaker 4: as that actually continues to be something that's probably the

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Speaker 4: best barometer in terms of what the Microsoft story is doing. Look,

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Speaker 4: they have massive talents, and I think the broader story

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Speaker 4: we're going to see across tech earning season is the

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Speaker 4: air revolutions. Here the has been handed from Semis to

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Speaker 4: software and memes like service Now, sALS Force, Oracle, among others.

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Speaker 2: And Dan on Microsoft, I go back. I just take

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Speaker 2: everything from pre pandemic. Basically, Microsoft modeled out twenty twenty

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Speaker 2: four has done a double in revenue since twenty nineteen.

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Speaker 2: Is that an extrapolated function? Can you take a double

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Speaker 2: in revenue over five six years and take that out

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Speaker 2: into the DAN ives twenty and.

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Speaker 4: Thirty, Well, and Tom, I'd take it one even step better.

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Speaker 4: It's really about the AI and the cloud component because

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Speaker 4: fifty five percent revenue is cloud from Microsoft today, next

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Speaker 4: three to four years, it's going to be seventy seventy

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Speaker 4: per That multiple is going to continue to expand because

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Speaker 4: that higher margin business. That's why I believe it there's

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Speaker 4: a four trillion dollar mark happening year.

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Speaker 2: Dan. A rep on you is you're an uber bowl,

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Speaker 2: What is your what is your least favorite tech company?

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Speaker 2: One of which one has the I Z and radar up.

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Speaker 7: Look.

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Speaker 4: I'd say it's some of the legacy names. If I

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Speaker 4: look at like a Cisco as a shared doinger, I

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Speaker 4: think some of those are the ones that are really

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Speaker 4: gonna struggle if they don't get aggressed. But even look

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Speaker 4: at Cisco, they buy spunk, right. I mean, the point

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Speaker 4: is this is gonna be really an arms trace that's

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Speaker 4: going to have good time. We've talked about. I think

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Speaker 4: tech this is just second third inning of this tech

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Speaker 4: ball market. And dam is I guess one.

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Speaker 5: Of the questions Dan, I guess one of the questions

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Speaker 5: for a lot of folks who follow tech is just

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Speaker 5: kind of this AI trying to size out AI and

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Speaker 5: how much of the AI capex? How much of the

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Speaker 5: AI investment over the next five plus years is incremental

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Speaker 5: or is it just taking from other parts of the

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Speaker 5: tech stack. How do you model that up?

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Speaker 4: I think about sixty seventy percent of it is incremental

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Speaker 4: because the difference is that it's revenue generally. I mean,

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Speaker 4: if you look at the use cases, they're revenue generating.

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Speaker 4: This is not just spending on infrastructure, and I think

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Speaker 4: that's what's happening really across verticals and we're starting to

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Speaker 4: see you now. I mean you look at Pollneer. It's

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Speaker 4: a good example where the use cases are exploding and

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Speaker 4: the cap act is just massive, not just some big tech.

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Speaker 4: But I think what we're seeing across the board.

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Speaker 2: I mean, you know, dance like's got the sweats your

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Speaker 2: thing going. For those of you are not on YouTube,

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Speaker 2: I mean it's a stunning pick. Do you do five

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Speaker 2: or ten miles this morning? Are you gonna go out

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Speaker 2: for you know, pre pre morning.

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Speaker 4: Jogged in I I'll do a little peloton and you know,

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Speaker 4: to to get the heart rate up.

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Speaker 2: It's good. I take Tank zero for the heart right, Dan,

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Speaker 2: I thank you so much. With web Bush right now,

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Speaker 2: she's more than a nothing burger. She is exquisite. In

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Speaker 2: the analysis of the American economy, Lindsay Pigs joins us

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Speaker 2: Now with Steve Lindsay, how do you use cap goods

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Speaker 2: x air ex Boeing non defense? How do you use

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Speaker 2: one of these obscure statistics?

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Speaker 1: Well, I wouldn't argue that it's overly obscure. When we

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Speaker 1: look at capital goods orders and we exclude aircraft and defense.

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Speaker 1: What we're really doing is removing that volatile transportation component,

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Speaker 1: and we can see them the underlying trend for business investment.

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Speaker 1: And in fact, the reason that we need to do

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Speaker 1: that is because when we look at something like last

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Speaker 1: month's numbers, transportation plunged nearly twenty percent. So we need

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Speaker 1: to take out that volatility to really get a sense

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Speaker 1: where business investment is going, and right now it seems

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Speaker 1: to be still positive, but very minimal growth in terms

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Speaker 1: of those capital those investment dollars flowing out into the marketplace.

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Speaker 2: Elon Musking to call us night, he says, I want

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Speaker 2: to see cap goods orders, non defense X, aer X,

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Speaker 2: TESLA X test. Let's coming next.

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Speaker 5: So, lindsay, just stepping back here, what's kind of the

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Speaker 5: Stefel GDP call for the remainder of this year and

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Speaker 5: maybe for next year. I mean, I think a lot

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Speaker 5: of folks feel like the economy may not be working

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Speaker 5: for them despite some of the headline numbers.

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Speaker 1: Well, I think the economy right now is still solid.

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Speaker 1: We're still seeing consumer spending, we're still seeing businesses investing,

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Speaker 1: but as I mentioned, we're losing momentum. We're seeing those

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Speaker 1: heightened signs of fatigue. So what does that translate into

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Speaker 1: for GDP. We're looking for about a two to two

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Speaker 1: and a half ish percent average pace for twenty twenty four. Now,

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Speaker 1: of course, volatility quarter to quarter aside Q one may

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Speaker 1: come in a little stronger, but two to two and

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Speaker 1: a half percent for the current year. The bigger question

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Speaker 1: is where do we go into twenty twenty five, because

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Speaker 1: if we continue to lose momentum, we've gone from five

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Speaker 1: percent in the third quarter, so let's call it three

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Speaker 1: percent a year end. If we hit that range of

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Speaker 1: two two and a half this year, what if we

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Speaker 1: continue to lose momentum into next year. Now we're virtually

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Speaker 1: falling below the bare minimum that you would expect from

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Speaker 1: a developed economy. But at this point is the FED

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Speaker 1: still tolerating above target inflation? So that's my biggest concern

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Speaker 1: that we're slowly moving into more of a stagflation scenario.

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Speaker 2: I AS's this question the other day, Lindsey. But the

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Speaker 2: fact is a central bank can't get out front, whether

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Speaker 2: it's easy BE or FED or the Bank of Thailand.

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Speaker 2: I mean they have to wait and go ex.

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Speaker 1: Post right, I would argue the FED is right now,

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Speaker 1: the FED is backing itself into the corner. The Fed

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Speaker 1: should have risen rates. They should have raised rates higher.

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Speaker 1: Now that they see inflation reversing course for three consecutive

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Speaker 1: months since the start of the year, they need to

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Speaker 1: re engage, raise rates to a sufficiently restrictive level to

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Speaker 1: get price pressures under control and we can start to

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Speaker 1: talk about a sustainable recovery. The longer they slow play this,

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Speaker 1: the more price pressures become entrenched into the economy, and

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Speaker 1: the more difficult it's going to be to ever get

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Speaker 1: us back to that two percent target.

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Speaker 2: Cancel the pigs a lunch of the Eckles building. That's

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Speaker 2: all I can said. Folks, what you just heard there

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Speaker 2: from this is classic Lindsay piigs. What you just said

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Speaker 2: is a huge deal.

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Speaker 5: So Lindsay, just to be clear here, you think that

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Speaker 5: inflation is such that the Fed's next move should be

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Speaker 5: a rate increase versus a cut.

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Speaker 1: When we look at inflation, the target is two percent,

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Speaker 1: The target is not three, the target is not three

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Speaker 1: and a half. So the Fed has not met their

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Speaker 1: mandate of stable prices, and with momentum now turning to

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Speaker 1: the upside, I think the Fed has more work to do.

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Speaker 4: Now.

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Speaker 1: That's my preference for what the Fed should do. That's

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Speaker 1: not what I necessarily expect the FED to do. This

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Speaker 1: is a FED that desperately wants to provide relief. So

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Speaker 1: I do still think that the next move is likely

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Speaker 1: a rate cut, but I think that would be a

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Speaker 1: material mistake on the part of the central bank.

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Speaker 2: Wow, so inflation.

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Speaker 5: Is your sense that this inflation that we've seen in

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Speaker 5: the past three months, that's something that's that's not a blip,

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Speaker 5: that's something more.

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Speaker 1: I do think it's something more. If you think about

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Speaker 1: the motivation for the FED to raise the rates, it's

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Speaker 1: to increase borrowing costs, make that more onerous, slow consumption,

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Speaker 1: and by extension, slow the economy and result in more

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Speaker 1: benign inflation. But when we look at this consumer, there

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Speaker 1: is still a good amount of spending and borrowing power

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Speaker 1: out there in the economy. So clearly the FED has

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Speaker 1: not done enough to slow, let alone break, the consumer

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Speaker 1: to ensure a return to price stability.

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Speaker 2: What's the response of your clients, and particularly your institutional clients, lindsay,

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Speaker 2: when you say this, I mean, you know, I'm not

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Speaker 2: going to say you're an outlier call here. I think

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Speaker 2: Jim Biako's really led with the idea disinflation vectors out

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Speaker 2: of tune. But these are really aggressive comments you're making.

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Speaker 2: What is the response of your institutional clients to this.

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Speaker 1: Well, again, this is what I would hope the FED

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Speaker 1: would do. But when we look at our forecast, when

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Speaker 1: we look at the messaging from the FED, the FED

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Speaker 1: does appear willing to tolerate above target inflation. So again,

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Speaker 1: our expectation is that the FED will offer at least one,

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Speaker 1: if not two rate cuts by the end of the year,

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Speaker 1: given their desire to continue to perpetuate these solid conditions

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Speaker 1: in the economy. But when we look at I think

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Speaker 1: the longer run stability of the economy, the longer run

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Speaker 1: ability for us to get back to price stability. That's

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Speaker 1: where I struggle because historically we see that the FED

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Speaker 1: does need to raise rates above the previous speak in inflation.

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Speaker 2: Well, when Kashkari's out the door and you're the president

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Speaker 2: of the Federal Reserve Bank of Minnesota, Lindsay Piegs, just

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Speaker 2: simply if we get a PIEGSA rate rise, does that

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Speaker 2: push send a recession.

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Speaker 1: I don't necessarily think a recession is necessary to get

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Speaker 1: price stability, but I do think that a much slower

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Speaker 1: growth rate would likely be the outcome, which is not

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Speaker 1: necessarily again, is something that we need to avoid at

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Speaker 1: all costs. That the normal fluctuations of the business cycle

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Speaker 1: are very healthy, but the biggest issue is getting us

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Speaker 1: back to a point where inflation is under control and

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Speaker 1: that allows everyone to enjoy and participate in the economy.

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Speaker 2: I just sent one of our interns of note, lindsay,

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Speaker 2: I want to get you on next week after PCE.

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Speaker 2: I mean, I think these folks, these are wild comments.

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Speaker 2: These are you know, and again this is a prescriptive idea.

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Speaker 2: Paul should of it could and you're saying, what will

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Speaker 2: they do? They're just going to hold rates here, lindsay,

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Speaker 2: until they see more data.

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Speaker 1: I do think the FED is on an extended pause

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Speaker 1: for now. But again, if inflation stabilizes at these levels,

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Speaker 1: with the FED willing to tolerate above target inflation, I

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Speaker 1: think the FED would be willing to give us twenty

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Speaker 1: five or fifty basis points of cuts by year end,

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Speaker 1: But if we don't see further improvement in the inflation data,

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Speaker 1: they would likely return to the sideline for a second round.

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Speaker 2: Extended ouse, Lindsey, thank you, thank you, thank you, just

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Speaker 2: superb We'll feature that on Single Best Idea Today out

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Speaker 2: on ample podcasts. Those are stunning statistics from Doctor Pigs

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Speaker 2: at Aero Rana in Chicago's Encyclopedic going to Cloud a

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Speaker 2: Man Deep saying picks up the pieces on Meta as well.

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Speaker 2: Thrilled to have them with us right now into this

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Speaker 2: tech earnings season, I guess I gotta go to Meta first.

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Speaker 2: Facebook is what I call does change the symbol, Man

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Speaker 2: saying this is simply Zuckerberg. Did he start all this

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Speaker 2: cost cutting? Is Zuckerberg the one that gave the billionaire

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Speaker 2: set permission to cut costs?

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Speaker 3: Yeah, and he was quite aggressive, and he was right

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Speaker 3: in terms of pivoting to AI and the three hundred.

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Speaker 2: And fifty eight percent from the Man Deep sing bottom

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Speaker 2: after sings and shut up and buy it. Yeah.

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Speaker 3: Look, I think everyone had their doubts whether this company

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Speaker 3: can ever grow double digit again the top line, and

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Speaker 3: they have shown, you know, they have executed around their

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Speaker 3: cost cuts and also from a product perspective, they have

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Speaker 3: made a lot of changes in terms of the ad stack.

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Speaker 2: Pivot to AI. I think kind of.

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Speaker 3: Moving away from metaverse last year was a great bet

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Speaker 3: and it's paid off in terms of you know what

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Speaker 3: they are doing with ad impressions and pricing versus what

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Speaker 3: the other players are doing.

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Speaker 5: Hey, an rag out in Chicago, the tech hub of Chicago.

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Speaker 5: I got the stock Microsoft. I'm surprised it's only up

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Speaker 5: eight percent yearnit date.

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Speaker 2: I thought it would have been more.

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Speaker 5: It seems like these guys are just hitting on all cylinders.

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Speaker 5: It's a great AI play. What is the story on

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Speaker 5: Microsoft these days? What do you expect to hear from them,

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Speaker 5: see from them from their earnings.

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Speaker 7: It's still trading at over thirty times earnings compared to

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Speaker 7: you know, Apple at twenty three times. So always remember

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Speaker 7: that that, you know, the market gap is so high

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Speaker 7: at this point, so some of those expectations already baked

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Speaker 7: in for what they're going to realize, whether it's on

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Speaker 7: the AI side or whether it's on the you know,

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Speaker 7: the GitHub or Office three sixty five. So there's a

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Speaker 7: lot of that. I would say it is currently baked

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Speaker 7: into the price.

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Speaker 2: Oh good, No, I.

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Speaker 5: Was saying me, Man deep Facebook Google again, Tom and

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Speaker 5: I we go old school verbiag here Facebook Google. It's

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Speaker 5: a play on digital advertising in very large part. What's

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Speaker 5: the state of the digital advertising market out there? Because

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Speaker 5: you look the linear television and all they have is

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Speaker 5: healthcare ads for various diseases. They don't have any real

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Speaker 5: advertisers anymore.

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Speaker 2: Are they all on digital?

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Speaker 3: And so that secular move is still playing out. I

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Speaker 3: would say that, you know, the sentiment around small businesses

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Speaker 3: is still pretty weak, and when you look at a

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Speaker 3: company like Meta, they are exposed more to small business

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Speaker 3: ad spending. So I'm surprised they're able to grow top

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Speaker 3: line twenty five percent even with the SMB spending being weak.

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Speaker 3: And some of it is easier comps, so that'll get

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Speaker 3: tougher in the second half, but still it is pretty remarkable.

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Speaker 2: And now for all of you worldwide, we go CFA

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Speaker 2: with Enterragriana and Man Deep Sing. Okay, I want to

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Speaker 2: look at discount of cash flow, and there's this idea

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Speaker 2: of terminal value. Now the triple leverage all cash fund

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Speaker 2: is on a perpetuity terminal value. I mean, we're just

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Speaker 2: going out forever, Man Deep Sing in tech in general,

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Speaker 2: in these magnificent four, five, six, eight, whatever it is,

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Speaker 2: How do you study terminal value or is that impossible?

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Speaker 1: No?

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Speaker 3: I think with companies of these sizes in terms of

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Speaker 3: where their top line is clearly, you know, for them

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Speaker 3: to keep growing double digit, it's extremely tough, and so

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Speaker 3: you've got to model and growth decelerating. But what they

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Speaker 3: have shown us in the past eighteen months is there's

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Speaker 3: so much leverage to be gained from cost cuts. They

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Speaker 3: were not crunning efficiently. And that's what I think is

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Speaker 3: a key driver.

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Speaker 2: Icly framed your interet around how do you do a

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Speaker 2: terminal value, for example, on Microsoft? Because I got double

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Speaker 2: digit revenue growth, I got to model that in maybe

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Speaker 2: it's a harmonic deceleration whatever whatever you're doing. And then

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Speaker 2: and Mandy correctly says, there's a new religion in cost cuts.

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Speaker 2: So where's your terminal on Microsoft? You go on a decade?

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Speaker 7: Yeah, and you know with Microsoft there's a slight difference

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Speaker 7: because they are spending a lot on data centers. So

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Speaker 7: I have a concept that is, you know, you want

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Speaker 7: to look at operating cash flow more than you want

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Speaker 7: to look at free cash flow right now, because their

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Speaker 7: capex is more than three times. So if you see

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Speaker 7: the operating cash flow growing at the face, so it

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Speaker 7: is it's actually getting to a point that it's getting

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Speaker 7: better than Apple at this point with the potential of

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Speaker 7: growing top line between ten to fifteen percent at least

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Speaker 7: for the next five years. So I think Microsoft is

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Speaker 7: in a better position than any other tech company right

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Speaker 7: now in our view because of the ability to drive

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Speaker 7: those operating cash flows.

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Speaker 5: And Tom's just going to fa function for Microsoft. Cappecs

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Speaker 5: Capex in their fiscal twenty twenty year was fifteen billion

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Speaker 5: this year for the June twenty four year forty three

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Speaker 5: billions of forecast.

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Speaker 2: The operating margin on Microsoft folks is forty four percent.

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Speaker 2: When did these get too big? Bandeep? I mean the

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Speaker 2: first business book I read was I to Turble Standard

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Speaker 2: Will I'm fifteen years old, I'm reading I to Tarble.

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Speaker 2: I didn't have an okay, but just thank you Lisa.

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Speaker 2: When did they just get too big? For Washington? I mean,

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Speaker 2: if you extrap a light out and Rod Rana is

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Speaker 2: operating cash flow, there's a point where they're too big, right, Yeah?

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Speaker 3: I mean, and I would use Meta as a proxy.

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Speaker 3: Before they started investing in reality labs, their operating margin

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Speaker 3: was nor till fifty percent. So it got to a

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Speaker 3: point where they had to do something with all the

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Speaker 3: cash that they were generating, and they started investing in

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Speaker 3: reality labs and look the regulators they are looking at

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Speaker 3: all of these companies, including partnerships. That's a new way

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Speaker 3: to acquire for a lot of these companies. But in

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Speaker 3: the end, you know, they are terrific business models, and

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Speaker 3: they are sustainable.

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Speaker 2: Free cash flow, pre pandemic. Facebook twenty one gazillion, it's

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Speaker 2: a double forty three gazillion, up to forty eight gazillion,

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Speaker 2: man deep saying excuse me, entered run And when do

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Speaker 2: they get too big?

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Speaker 7: See, I would say for a software company, something between

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Speaker 7: forty five and fifty percent is you know, achievable. You know,

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Speaker 7: I remember covering Visa and MasterCard about you know, fifteen years,

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Speaker 7: twenty years ago. Right now their margins are fifty five

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Speaker 7: percent and somewhere in that range. So operating margins for

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Speaker 7: software companies, you know, probably peak around fifty percent, and

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Speaker 7: we only have a handful of companies right around that

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Speaker 7: mask Adobe somewhere closer, and Microsoft is going to get

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Speaker 7: there between forty five and fifty.

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Speaker 2: Good morning, Meredith Whitney. Did you see Visa's earnings? Now? Yeah,

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Speaker 2: I mean, I mean it's just like it's like there's

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Speaker 2: a pretty people.

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Speaker 5: Are spending like paper are spending, like say an Rak,

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Speaker 5: as we head into this tech earning season here, how

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Speaker 5: much are we going to hear about AI? Is it

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Speaker 5: gonna be every other word, every third word? Where are

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Speaker 5: we in kind of the development the evolution of AI?

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Speaker 5: I know you and man Deep and your teams have

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Speaker 5: done a lot of research on this, I.

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Speaker 7: Would say, very early innings, and you know we I

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Speaker 7: think this is not going to change at least for

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Speaker 7: the next few years when we see more and more

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Speaker 7: product development from all these companies, you know right now

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Speaker 7: buying Microsoft. None of the big software companies have been

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Speaker 7: able to monetize it in a proper way. And I

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Speaker 7: think the next year we're going to see more monetization,

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Speaker 7: but more new products coming out, because right now we

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Speaker 7: are seeing the bulk of the investments going into you know,

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Speaker 7: the hardware and the infrastructure piece of it.

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Speaker 2: I just my head is spinning over where we are

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Speaker 2: versus like nifty to fifty. What's like you mentioned ken

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Speaker 2: Olsen and Decker earlier. I mean, this is Mandy. This

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Speaker 2: is totally different than nineteen ninety eight, nineteen ninety nine.

437
00:23:02,080 --> 00:23:05,280
Speaker 2: I mean there was a lot of nonprofit going on.

438
00:23:06,240 --> 00:23:08,560
Speaker 2: All these people are is it basically on a ninety

439
00:23:08,640 --> 00:23:11,520
Speaker 2: day basis, they're minting money and we have the distraction

440
00:23:11,640 --> 00:23:13,600
Speaker 2: of what Tim and Carroll do at four pm.

441
00:23:13,880 --> 00:23:16,800
Speaker 3: And they have the deep pockets to invest. So the

442
00:23:16,880 --> 00:23:19,960
Speaker 3: one big difference here is all these companies that are

443
00:23:19,960 --> 00:23:23,080
Speaker 3: investing in Capex, they can afford to do that and

444
00:23:23,560 --> 00:23:26,760
Speaker 3: without a big hit to their margin. So clearly, I

445
00:23:27,119 --> 00:23:29,840
Speaker 3: think the fact that they have the data and the

446
00:23:29,840 --> 00:23:33,320
Speaker 3: Capex wherewithal that's what drives these Okay.

447
00:23:33,040 --> 00:23:35,040
Speaker 2: I got ten seconds. I'm so sorry. Are we going

448
00:23:35,080 --> 00:23:38,080
Speaker 2: to hear share buyback announcements? Yeah, you gotta be kidding.

449
00:23:38,119 --> 00:23:41,560
Speaker 3: Meta announce a dividend that was symbolic even though less

450
00:23:41,560 --> 00:23:45,000
Speaker 3: than one percent dividend yield. But clearly Google is on

451
00:23:45,040 --> 00:23:48,000
Speaker 3: the words of doing something similar. The street is expecting,

452
00:23:48,080 --> 00:23:49,959
Speaker 3: so waiting to hear.

453
00:23:50,080 --> 00:23:51,840
Speaker 2: Let's just want to do this again and around in

454
00:23:51,920 --> 00:24:05,840
Speaker 2: Chicago they keep seeing with their studios on Apple, card play,

455
00:24:06,000 --> 00:24:09,560
Speaker 2: on YouTube. It is the front pages. My people said,

456
00:24:09,640 --> 00:24:12,320
Speaker 2: Lisa was wound up today, Lisa, how do you start

457
00:24:12,400 --> 00:24:12,879
Speaker 2: tired up?

458
00:24:12,960 --> 00:24:15,080
Speaker 6: Okay, so walking around New York City streets, what do

459
00:24:15,119 --> 00:24:19,800
Speaker 6: you see everywhere? Scaffolding? It's everywhere. See this is it's

460
00:24:19,840 --> 00:24:22,560
Speaker 6: a hot button issue. Okay, did you know there are

461
00:24:22,600 --> 00:24:26,160
Speaker 6: more than eighty five hundred scaffoldings around your city streets?

462
00:24:26,240 --> 00:24:27,879
Speaker 6: If you were to stretch them out, it would go

463
00:24:27,920 --> 00:24:30,720
Speaker 6: from Manhattan to Montreal. That's how much we have. That's

464
00:24:30,720 --> 00:24:32,960
Speaker 6: what they're saying. Okay, this is the New York Times.

465
00:24:33,520 --> 00:24:33,680
Speaker 3: Now.

466
00:24:33,680 --> 00:24:36,080
Speaker 6: They're supposed to be temporary, right, But here's the problem.

467
00:24:36,240 --> 00:24:38,320
Speaker 6: There's nearly one thousand that have been in place for

468
00:24:38,359 --> 00:24:40,960
Speaker 6: more than three years, so they're sticking around. There's a

469
00:24:40,960 --> 00:24:43,359
Speaker 6: lot of regulations around, and city officials want to do

470
00:24:43,400 --> 00:24:43,919
Speaker 6: something about it.

471
00:24:44,040 --> 00:24:47,440
Speaker 2: You want to change it the whole place. There's parts

472
00:24:47,480 --> 00:24:52,480
Speaker 2: of midtown Folks, it's like plus Vendome in Paris without

473
00:24:52,520 --> 00:24:56,600
Speaker 2: the charm. I mean, it's like miles of scaffold.

474
00:24:56,160 --> 00:24:59,200
Speaker 5: And it's I think you just got to go around

475
00:24:59,200 --> 00:24:59,840
Speaker 5: and just take it.

476
00:25:00,359 --> 00:25:01,879
Speaker 2: I mean, Lisa, what are they going to do? What

477
00:25:02,320 --> 00:25:03,720
Speaker 2: you're reporting? What are they going to do?

478
00:25:03,840 --> 00:25:05,440
Speaker 6: So they're going through they want to put all these

479
00:25:05,640 --> 00:25:08,680
Speaker 6: these reforms down. So they want to reduce how many

480
00:25:08,760 --> 00:25:10,920
Speaker 6: there can be, how long they can be up. They

481
00:25:10,960 --> 00:25:13,240
Speaker 6: want to increase the fines, That's what they think they're

482
00:25:13,240 --> 00:25:15,560
Speaker 6: going to do so they can strengthen the enforcement of it.

483
00:25:15,640 --> 00:25:18,120
Speaker 6: So they think that if they increase these fines, hit

484
00:25:18,160 --> 00:25:20,760
Speaker 6: hard on enforcement, it's gonna take some of the down.

485
00:25:21,080 --> 00:25:23,159
Speaker 2: I don't easy one.

486
00:25:23,200 --> 00:25:25,720
Speaker 5: If I were a politician, this would be an easy win.

487
00:25:26,040 --> 00:25:28,120
Speaker 2: Ye to go out and you have to have them

488
00:25:28,280 --> 00:25:32,040
Speaker 2: up for safety. I get everybody, I've got a friend

489
00:25:32,080 --> 00:25:35,640
Speaker 2: and you know I get it. But if it's been

490
00:25:35,720 --> 00:25:38,240
Speaker 2: up for three years and nothing's, nothing's going on, take

491
00:25:38,240 --> 00:25:40,919
Speaker 2: it down today exactly? That's the problem. All right?

492
00:25:40,960 --> 00:25:41,439
Speaker 4: What else we have?

493
00:25:41,800 --> 00:25:42,200
Speaker 2: All right?

494
00:25:42,240 --> 00:25:45,040
Speaker 6: Airlines, this is a good one for travelers. They now

495
00:25:45,200 --> 00:25:48,760
Speaker 6: have to pay automatic refunds for things like canceled flights.

496
00:25:48,760 --> 00:25:51,280
Speaker 6: This is new from the US Department of Transportation. Came

497
00:25:51,320 --> 00:25:54,120
Speaker 6: out today, so they have to provide these automatic refunds.

498
00:25:54,200 --> 00:25:56,920
Speaker 6: This is too from within the US. If their flights

499
00:25:56,920 --> 00:26:00,199
Speaker 6: are canceled or even if they're altered, significantly altered, there

500
00:26:00,200 --> 00:26:02,800
Speaker 6: are certain restrictions for that too. But the goal is

501
00:26:02,840 --> 00:26:04,280
Speaker 6: just to make it easier for to get people to

502
00:26:04,280 --> 00:26:06,560
Speaker 6: get their money back, to make those refund policies more

503
00:26:06,600 --> 00:26:09,000
Speaker 6: consistent from one airline to the next, because it differs

504
00:26:09,160 --> 00:26:12,080
Speaker 6: as you go from airline to airline. Travelers will also

505
00:26:12,080 --> 00:26:14,600
Speaker 6: get refunds for checked bag fees if the bag is

506
00:26:14,640 --> 00:26:17,560
Speaker 6: lost and also if it's not delivered within twelve hours

507
00:26:17,560 --> 00:26:20,480
Speaker 6: of domestic flights. So there's another bonus there, and you're

508
00:26:20,480 --> 00:26:22,480
Speaker 6: going to get it right away. It's automatic refunds. So

509
00:26:22,480 --> 00:26:25,280
Speaker 6: however you paid, whether credit card or even cash, then

510
00:26:25,480 --> 00:26:25,800
Speaker 6: that's all.

511
00:26:26,160 --> 00:26:27,679
Speaker 5: So I don't have to stand in line with like

512
00:26:27,760 --> 00:26:30,359
Speaker 5: five thousand other people that could customer service in Newark

513
00:26:30,680 --> 00:26:31,320
Speaker 5: for United.

514
00:26:32,000 --> 00:26:34,360
Speaker 6: It's okay, it's gonna be Yeah, you should.

515
00:26:34,200 --> 00:26:34,480
Speaker 4: You should.

516
00:26:34,520 --> 00:26:36,399
Speaker 5: I just eat it. I'm like, all right, my flight's canceled.

517
00:26:36,400 --> 00:26:36,760
Speaker 5: I'm going on.

518
00:26:37,640 --> 00:26:39,720
Speaker 6: Okayo's you can get your money back.

519
00:26:39,920 --> 00:26:42,240
Speaker 2: We do an audible here, Yes, did I hear yesterday?

520
00:26:42,359 --> 00:26:44,040
Speaker 2: Terminal A Newark.

521
00:26:44,880 --> 00:26:47,160
Speaker 5: Yeah, Michael Barber has had that news story. We won

522
00:26:47,280 --> 00:26:50,120
Speaker 5: some award or they won some award for like greatest

523
00:26:50,200 --> 00:26:51,240
Speaker 5: terminal now it is.

524
00:26:51,400 --> 00:26:52,120
Speaker 6: It's awesome.

525
00:26:52,240 --> 00:26:52,760
Speaker 2: It is great.

526
00:26:52,760 --> 00:26:55,199
Speaker 5: And the best thing about the new Terminal A is

527
00:26:55,240 --> 00:26:57,200
Speaker 5: when you get off your flight and you need to

528
00:26:57,240 --> 00:27:01,680
Speaker 5: get your uber, it's a very organized, easy way to access,

529
00:27:01,960 --> 00:27:03,119
Speaker 5: unlike Terminal.

530
00:27:03,080 --> 00:27:06,160
Speaker 2: C, which is a RAM.

531
00:27:06,320 --> 00:27:08,879
Speaker 6: Sometimes it was a little so anyway, they did a

532
00:27:08,920 --> 00:27:09,280
Speaker 6: good job.

533
00:27:09,440 --> 00:27:13,520
Speaker 5: Terminal B is now undergoing the Simmer type of construction renovation.

534
00:27:13,600 --> 00:27:18,360
Speaker 2: So getting there. We're getting there. We're just you know

535
00:27:18,800 --> 00:27:21,280
Speaker 2: the negativity about this. We're getting there. If they just

536
00:27:21,400 --> 00:27:24,720
Speaker 2: fix the potholes on fifty eighth Street next.

537
00:27:25,119 --> 00:27:29,400
Speaker 6: That's going to take an eternity American Airlines. Do either

538
00:27:29,400 --> 00:27:32,400
Speaker 6: of you have the advantage the loyalty points for American.

539
00:27:32,080 --> 00:27:34,879
Speaker 5: Air American guy, I'm not a DFW person.

540
00:27:34,960 --> 00:27:38,200
Speaker 6: Well, they're they're changing how flyers can earn rewards again

541
00:27:38,240 --> 00:27:40,280
Speaker 6: because they've done it before, a lot of airlines are

542
00:27:40,320 --> 00:27:43,000
Speaker 6: changing it. Here's the difference. Okay, So starting in July,

543
00:27:43,160 --> 00:27:46,600
Speaker 6: travelers will only receive loyalty points advantage miles for airfare

544
00:27:46,680 --> 00:27:49,880
Speaker 6: if they booked directly with American or one of its

545
00:27:49,920 --> 00:27:52,840
Speaker 6: partners or a preferred travel agency. That's the only we

546
00:27:52,880 --> 00:27:54,560
Speaker 6: can do it. The co branded credit cards that's not

547
00:27:54,560 --> 00:27:56,879
Speaker 6: going to be affected. That can get you your miles.

548
00:27:57,080 --> 00:28:00,480
Speaker 6: But it just shows how they're continuing to change to

549
00:28:00,520 --> 00:28:02,920
Speaker 6: try and get in some new customers, get new people

550
00:28:03,000 --> 00:28:04,800
Speaker 6: hooked on American, Paul.

551
00:28:04,640 --> 00:28:08,439
Speaker 2: Don't you think from a securities analysis standpoint, it's just

552
00:28:08,520 --> 00:28:10,240
Speaker 2: a tough business. It really is.

553
00:28:10,680 --> 00:28:13,680
Speaker 5: I mean, I think and I'm so surprised that you

554
00:28:13,960 --> 00:28:15,920
Speaker 5: see these folks and they make money in one business

555
00:28:16,080 --> 00:28:18,240
Speaker 5: and they say I'm going to go start an airline.

556
00:28:18,359 --> 00:28:19,399
Speaker 2: You know, like, why would you want to get in?

557
00:28:19,680 --> 00:28:22,919
Speaker 2: American Airlines ten year track record, Microsoft twenty eight percent

558
00:28:22,960 --> 00:28:27,040
Speaker 2: per year, Disney tanking five percent per year, American Airlines

559
00:28:27,200 --> 00:28:30,440
Speaker 2: negative seven percent per year. Again off the pandemic.

560
00:28:30,600 --> 00:28:32,879
Speaker 5: Yes, I mean it's it's a tough margin. I mean

561
00:28:32,880 --> 00:28:35,560
Speaker 5: it's got it's a low margin business and you've got

562
00:28:35,600 --> 00:28:36,800
Speaker 5: fuel costs you have to deal.

563
00:28:36,920 --> 00:28:38,840
Speaker 2: You got people like Lisa arguing with you.

564
00:28:39,160 --> 00:28:42,720
Speaker 4: Exactly got their point the.

565
00:28:42,760 --> 00:28:46,040
Speaker 2: Last the last time we did a lot of off flight.

566
00:28:46,480 --> 00:28:48,960
Speaker 2: I just stand in the lounge going out and I

567
00:28:49,080 --> 00:28:51,880
Speaker 2: just stand in the lounge coming back. That's how messed up.

568
00:28:51,920 --> 00:28:52,840
Speaker 6: The lounge is packed.

569
00:28:54,240 --> 00:28:55,200
Speaker 2: Literally there were no seats.

570
00:28:55,360 --> 00:28:58,000
Speaker 6: I don't get in the lounge. Where am I missing out?

571
00:28:58,040 --> 00:28:59,560
Speaker 5: Well, you can use your points to get into the

572
00:28:59,680 --> 00:29:03,400
Speaker 5: into you know what. The lounges are very big in Europe.

573
00:29:03,600 --> 00:29:07,320
Speaker 5: That's like the thing. Everybody's in the lounge and Europe.

574
00:29:07,360 --> 00:29:09,240
Speaker 5: I never go to the lounges here in the US.

575
00:29:09,560 --> 00:29:10,640
Speaker 5: I mean, I don't know.

576
00:29:10,760 --> 00:29:14,120
Speaker 2: I can report United opened the Lovely Lounge. Finally the

577
00:29:14,200 --> 00:29:17,880
Speaker 2: gull Okay, they opened a lovely lounge.

578
00:29:17,960 --> 00:29:18,880
Speaker 6: Did you have a seat there?

579
00:29:19,160 --> 00:29:20,000
Speaker 2: I had a seat there?

580
00:29:20,040 --> 00:29:20,200
Speaker 6: You go?

581
00:29:20,280 --> 00:29:23,640
Speaker 5: It was next you get when you get tripled, you know,

582
00:29:23,720 --> 00:29:25,880
Speaker 5: first class, you get a seat.

583
00:29:25,920 --> 00:29:29,240
Speaker 6: You get a seat. Tom, I saw this one. I

584
00:29:29,280 --> 00:29:32,040
Speaker 6: thought of your right away. Will there be a Showgun

585
00:29:32,160 --> 00:29:37,280
Speaker 6: season two? This is the question Business insider. Okay, so

586
00:29:37,440 --> 00:29:39,000
Speaker 6: you know it streamed on Hulu. Is that how you

587
00:29:39,040 --> 00:29:39,920
Speaker 6: watch it on Hulu?

588
00:29:40,480 --> 00:29:43,240
Speaker 2: I think so.

589
00:29:43,240 --> 00:29:46,480
Speaker 6: So here's the thing the creators are telling the Hollywood Reporter.

590
00:29:46,560 --> 00:29:49,120
Speaker 6: The show was made so long ago because a lengthy production.

591
00:29:49,160 --> 00:29:50,680
Speaker 6: It took a long time. It was like a five

592
00:29:50,760 --> 00:29:53,920
Speaker 6: year journey just to make that first season. So if

593
00:29:53,920 --> 00:29:56,040
Speaker 6: they were to be shooting a second season, they would

594
00:29:56,080 --> 00:29:58,960
Speaker 6: already have to be shooting already. But they're saying, since

595
00:29:58,960 --> 00:30:01,160
Speaker 6: it took so long, there already got that pre production

596
00:30:01,280 --> 00:30:03,800
Speaker 6: work out of the bag. So now it'll be a

597
00:30:03,800 --> 00:30:06,040
Speaker 6: little bit faster if they were to do a season two.

598
00:30:06,280 --> 00:30:06,880
Speaker 2: Look at their.

599
00:30:06,760 --> 00:30:11,200
Speaker 6: Viewers want it. They're asking for it. The Showgun it

600
00:30:11,240 --> 00:30:14,200
Speaker 6: was a self contained novel, but there were a series

601
00:30:14,280 --> 00:30:16,960
Speaker 6: of novels too, so it could kind.

602
00:30:16,760 --> 00:30:20,520
Speaker 2: Of bring Mister Clove gave them their sequel. He wrote

603
00:30:20,560 --> 00:30:24,800
Speaker 2: four or five books and Taipan is after Shogun in

604
00:30:24,800 --> 00:30:29,280
Speaker 2: it's nineteenth century, eighteen forty eighteen fifty Hong Kong, and

605
00:30:29,320 --> 00:30:31,480
Speaker 2: you could even have some of the same characters doing,

606
00:30:32,000 --> 00:30:35,200
Speaker 2: you know, and it could show up again any time.

607
00:30:35,240 --> 00:30:39,120
Speaker 2: But Clovel gave them the sequel to the Pacific Rim,

608
00:30:39,120 --> 00:30:42,160
Speaker 2: in this case Hong Kong from Japan. But it'll be

609
00:30:42,200 --> 00:30:44,320
Speaker 2: interesting to see which I haven't seen the last episode.

610
00:30:44,400 --> 00:30:46,080
Speaker 6: You haven't seen the last No, I haven't seen the list.

611
00:30:46,160 --> 00:30:50,080
Speaker 2: I'm waiting for missus Kane to arrive. I'll see it. Actually,

612
00:30:50,080 --> 00:30:51,240
Speaker 2: I've read the book twice, so.

613
00:30:51,240 --> 00:30:54,400
Speaker 6: I think, oh, no, you know, if.

614
00:30:54,200 --> 00:30:57,400
Speaker 2: You haven't read the book, I highly recommend for those

615
00:30:57,440 --> 00:31:02,080
Speaker 2: that have seen Shogun. It is a rewarding twelve hundred pages.

616
00:31:02,280 --> 00:31:05,360
Speaker 2: It is what Clavel did. And I should point out

617
00:31:05,400 --> 00:31:09,880
Speaker 2: also King Rat of the Singapore where the Singapore Airport is.

618
00:31:10,320 --> 00:31:13,360
Speaker 2: They bulldoze the prisoner of war camp from World War

619
00:31:13,400 --> 00:31:17,000
Speaker 2: Two and King Rat is his shortest in his best

620
00:31:17,000 --> 00:31:20,680
Speaker 2: book it is. I can't say enough about the intensity.

621
00:31:20,880 --> 00:31:22,640
Speaker 2: I read it when I was like fifteen, and you

622
00:31:22,640 --> 00:31:26,200
Speaker 2: know I was your room for Lisa Matteo. Thank you

623
00:31:26,280 --> 00:31:31,440
Speaker 2: so much for the newspapers. This is the Bloomberg Surveillance Podcast,

624
00:31:31,680 --> 00:31:36,520
Speaker 2: bringing you the best in economics, finance, investment, and international relations.

625
00:31:36,760 --> 00:31:40,080
Speaker 2: You can also watch the show live on YouTube. Visit

626
00:31:40,120 --> 00:31:44,280
Speaker 2: the Bloomberg Podcast channel on YouTube to see the show

627
00:31:44,520 --> 00:31:47,560
Speaker 2: weekday mornings from seven to ten am Eastern from our

628
00:31:47,600 --> 00:31:51,400
Speaker 2: global headquarters in New York City. Subscribe to the podcast

629
00:31:51,440 --> 00:31:55,480
Speaker 2: on Apple, Spotify, or anywhere else you listen, and always

630
00:31:55,600 --> 00:32:01,200
Speaker 2: on Bloomberg Radio, the Bloomberg Terminal, and the Bloomberg Business App.