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Speaker 2: We're gonna start with basics here right now. Stephanie Roth
Speaker 2: is with Wolf and she's just absolutely exquisite in her
Speaker 2: rigor about the construction of a given ninety days of
Speaker 2: American economic might, and I got some American economic might
Speaker 2: with you, Stephanie, But they also got a payroll call
Speaker 2: a seventy thousand who's the horse and who's the cart?
Speaker 2: The economy or the job economy.
Speaker 3: Seventy thousand looks kind of weak, but that's been counting
Speaker 3: for hurricanes and strikes, which are pretty significant.
Speaker 2: So like, throw this, Can I out work Friday? Wait,
Speaker 2: it's Paul's turn out.
Speaker 4: To work Friday.
Speaker 3: Here's when you'd have to work on Friday. So yeah,
Speaker 3: we're below consensus on the actual headline number. We think
Speaker 3: the underlying trend in perils is one hundred and fifty thousand,
Speaker 3: So totally fine. Here's where you'd have to work on
Speaker 3: Friday is if it comes in strong, because in that
Speaker 3: case we've got strength, even given we have hurricanes and
Speaker 3: strikes hitting the numbers. So that's where it could become
Speaker 3: a bit asymmetric.
Speaker 5: All right, So but let's strip that away a little bit.
Speaker 5: How do you feel about the US labor market? How
Speaker 5: strong is it? How some people are saying, hey, we're fine,
Speaker 5: four point one percent on plant whatever, but some others say, boy,
Speaker 5: that recent trends are a little testy. How do you
Speaker 5: feel about the US labor market?
Speaker 3: It's kind of wild because we swung from concerns about
Speaker 3: hard landing to then concerns around okay, fine, we were
Speaker 3: having a soft landing. Then it shifted all of a
Speaker 3: sudden to no landing. And the result is probably somewhere
Speaker 3: in the middle. The economy is doing just fine. We
Speaker 3: have GDP which is gonna print somewhere close to three percent,
Speaker 3: and the labor market is hanging in there. You have
Speaker 3: some upward pressure on the unemployment rate, but it shouldn't
Speaker 3: be that significant. And especially if we do end up
Speaker 3: with the Trump presidency, he's going to be cutting off
Speaker 3: a lot of those immigration flows, which will then put
Speaker 3: a little bit of downward pressure on the unemployment rate
Speaker 3: versus what would otherwise be the case.
Speaker 5: So how are you framing out this selection? Yeh, I'm
Speaker 5: sure that's the majority of the calls you get from
Speaker 5: your clients. What's kind of your response to, you know, hey, Stephanie,
Speaker 5: how's this going to play out?
Speaker 3: So in the first year it may not actually be
Speaker 3: as different depending on the presidential candidate. Come twenty twenty six,
Speaker 3: that's where it becomes a very big difference because TCJA,
Speaker 3: the Trump tax cuts expired at the end of twenty
Speaker 3: twenty five. Okay, so that's going to be where the
Speaker 3: rubber leaves the road in terms of the difference between
Speaker 3: the candidates with this policy.
Speaker 2: Wonk, Stephanie roth of Wolf completely off.
Speaker 4: Your remit, but I'm going there.
Speaker 2: Can we have text modification lessening of any type. Given
Speaker 2: where the deficits are given eight hundred billion interest expense,
Speaker 2: how do you dovetail those two together?
Speaker 3: I mean, it's kind of it's kind of wild, and
Speaker 3: really either it is going to increase the deficit. So
Speaker 3: regardless of this ocasion, we're gonna it's gonna get worse.
Speaker 3: By the dollar. The US is a reserve currency, so
Speaker 3: we have the ability to increase our deficits relatively sound like.
Speaker 4: Very icon green and berkey.
Speaker 2: Stephanie Roth, I'm looking at the what's happened, folks since
Speaker 2: I've not been here? The real yield has exploded out
Speaker 2: to two point zero zero percent. The price of all
Speaker 2: this is money's more expensive, right.
Speaker 3: Yes, So we attribute the move since the beginning of August,
Speaker 3: which is kind of when you started to see rates
Speaker 3: back up. We tribute roughly half of it to better
Speaker 3: economic growth and half of it to the election. Really
Speaker 3: Trumpbod's starting to rise. Base case is that if Trump
Speaker 3: does win, the ten year will back up towards at
Speaker 3: least four fifty. If Harris wins, you can actually see
Speaker 3: a little bit of a of a downshift and yield
Speaker 3: something towards four percent.
Speaker 4: Tariffs do they work? How do you?
Speaker 5: What's your view on tariffs because that seems to be
Speaker 5: a discussion point here in this election.
Speaker 3: I'm a big fan of free trade, so not a
Speaker 3: big fan of them, and I also have to say
Speaker 3: it has to be advertised as such, right, it's a
Speaker 3: tax the consumer, full stop. Yeah, if you if you
Speaker 3: do do sixty percent tariff on China, that could help
Speaker 3: reduce some imports from China. We did see that in
Speaker 3: the in the last trade war. But if you couple
Speaker 3: that with a ten percent universal baseline tariff, now goods
Speaker 3: are just gonna get more expensive. So when we model it,
Speaker 3: it could be about a ten one percent headwind on
Speaker 3: GDP and a one point one percent increase in inflation.
Speaker 3: So it's really a stagflationary type of policy.
Speaker 2: Are we having a sustainable three percent economy? We had
Speaker 2: one quarter three percent? There's a guesstimate ending September thirty
Speaker 2: three percent?
Speaker 4: Is it? Dare I say a Q four to three
Speaker 4: percent ish?
Speaker 3: And that's probably a little bit high. I think we're
Speaker 3: like a two and a half percent economy. Productivity does
Speaker 3: appear to I've picked up in this economy, which is
Speaker 3: a great thing. That's where we can get non inflationary
Speaker 3: growth in it.
Speaker 2: Talk about that. Let's fold it in the election. Productivity
Speaker 2: is picked up. I think ninety nine percent of people
Speaker 2: agree with you, except half of this nation's flat on
Speaker 2: their back. Does that mean productivity for everybody else's double
Speaker 2: while half the nation's flat on their back?
Speaker 3: So if you look at if you look at productivity
Speaker 3: by sector, technology has driven a lot of it, probably
Speaker 3: no surprise. And then some of the areas of the
Speaker 3: economy that have had to deal with reduced labor shortages,
Speaker 3: things like retail, leisure and hospitality, they'd just become more
Speaker 3: productive because they had to. There were some areas that
Speaker 3: benefited from the pandemic that over hired to where it's
Speaker 3: transportation and warehousing. Those are areas of economy that are
Speaker 3: kind of flat on their back from that perspective. So
Speaker 3: it is very much mixed depending on kind of what
Speaker 3: sector we're talking about.
Speaker 5: How's the consumer out there from your perspective in terms
Speaker 5: of spending employment, pretty solid or do we have some
Speaker 5: concerns there?
Speaker 3: And we've been talking about cracks at the low end
Speaker 3: for a while. That's still is the case. Granted, if
Speaker 3: rates actually do come down, which they should continue to
Speaker 3: come down, even if we have some election related volatility,
Speaker 3: gas line prices remain muted, that low end consumer shoud
Speaker 3: feel a little bit better. So base case is the
Speaker 3: consumer should be fine, they're not over levered, and the
Speaker 3: savings rate is actually not so not so low. That's
Speaker 3: what we learned kind of over the summer is that
Speaker 3: the very low savings rate at least, as we've reported,
Speaker 3: rise up pretty significantly.
Speaker 4: Seventy thousand jobs Friday. Where's the unemployment rate?
Speaker 3: Staci's stas for a lot of noise, A lot of
Speaker 3: noise around.
Speaker 4: That, Steffaniealth brilliant wait. I love starting strong like that.
Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live
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Speaker 2: The bond market giving us some tension here about our
Speaker 2: debt and deficit. Probably that means three four themes with
Speaker 2: our guests. David Malpass, many of you will know him,
Speaker 2: is the driving force for Alan Schwartz at bear Stearn's
Speaker 2: Economics years ago. Of course, the service to the nation
Speaker 2: at the World Bank for President Trump. And we're thrilled
Speaker 2: he can join us in the studio. Now there's four
Speaker 2: or five six topics David we can talk talk about.
Speaker 2: You are the rarest of rare Ducks, a Colorado College
Speaker 2: physicist who was so dumb he actually ran for public office.
Speaker 2: I want to focus on this election. Come on, you're
Speaker 2: an institutional guy. You can do the foreign the foreign
Speaker 2: policy and all that.
Speaker 4: Forget about it.
Speaker 2: What was it like campaigning in Broom County in twenty
Speaker 2: ten against Senator gillibrand.
Speaker 6: Tom That was an experience for the lifetime. I had
Speaker 6: the minivan and drove around New York State and really
Speaker 6: talked about how could Washington actually stop growing? And so
Speaker 6: there was Remember it was the teapot of the year
Speaker 6: in twenty ten. The Senate seat had had been Hillary
Speaker 6: Clinton's Senate seed, and Jill Brand was holding it in
Speaker 6: twenty twenty nine and ten. So I decided to run
Speaker 6: because I really think that the issues can be changed
Speaker 6: in Washington if you have people leaders in Washington talking
Speaker 6: about what to do about the budget, what to do
Speaker 6: actually about the dollar and.
Speaker 4: Keep it bank stable.
Speaker 6: These are important topics.
Speaker 2: Most important tweet of the last twenty four hours was
Speaker 2: the wonderful Michael Beschloss, who put out a photograph of
Speaker 2: a Puerto Rican in a Pittsburgh Pirates uniform. In the
Speaker 2: bottom line is the rhetoric and dialogue across all parties,
Speaker 2: but particularly what we've seen in the last forty eight
Speaker 2: hours is just totally unexcusable. And this guy hired you
Speaker 2: to run the World Bank. How can guys like you
Speaker 2: and your lovely wife who ran Manhattan GOP support this
Speaker 2: guy with a rhetoric we're hearing.
Speaker 6: Tom, I'm not into the election itself, but into the policies.
Speaker 6: And as you look at where the US stands in
Speaker 6: the world, it's a voice of weakness around the world.
Speaker 6: It's causing instability all through Africa. Any international meeting I
Speaker 6: went to, people were almost pleading, saying can't the US
Speaker 6: have a voice? And that it's not there? And the
Speaker 6: policies that are being projected by the current administration and
Speaker 6: into the future look like they'll get more wants.
Speaker 2: To get in here, pause looking at me like what
Speaker 2: is this a monologue? But I was just in Rome
Speaker 2: and I'm sorry they're petrified of a certain candidate winning here.
Speaker 2: How does your party? Could you run for secretaries? Could
Speaker 2: you take secretary of State under a new Trump administration?
Speaker 4: Would you accept that position?
Speaker 6: That's not not even a question? Can the US grow more?
Speaker 6: And will that be stabilizing in the world? And the
Speaker 6: answer is yes. And is the budget that's now in
Speaker 6: front of the US nation from the Biden Harris administration acceptable?
Speaker 6: The answer is no. It's an unacceptable budget and it's
Speaker 6: not going to lead to growth. They are willing to
Speaker 6: have the country grow at one and a half percent
Speaker 6: per year with big government. That's their dream of how
Speaker 6: a country will look.
Speaker 5: What will become of the World Bank if Trump wins
Speaker 5: in on Tuesday.
Speaker 6: As an institution, it's you know, got its shareholders. So
Speaker 6: I don't think that would be the focus of change.
Speaker 6: And the World Bank's not very big within the world scene.
Speaker 6: One of the things that has to be discussed the
Speaker 6: United Nations. Antonio Guterris, the head of the United Nations,
Speaker 6: just went to the Brick Summit in Russia. Why aren't
Speaker 6: people talking about that? And did the US protest that?
Speaker 6: Here he is in Kazan, Russia with Putin, uh, you know,
Speaker 6: shaking hands, bowing at the time of a vicious war
Speaker 6: that's going on in Ukraine. And so how does the
Speaker 6: world really interact with these institutions that are that are
Speaker 6: harming people around the world.
Speaker 5: Trump presidency was kind of more, you know, just nationalistic
Speaker 5: as opposed to internationalism. Doesn't he want to step back from.
Speaker 4: The world stage?
Speaker 5: Doesn't want to? I mean, how does that project world
Speaker 5: US influence globally.
Speaker 4: Case by case? For one.
Speaker 6: You don't want to have permanent wars. And it sure
Speaker 6: looks like we've gotten into a very long term war
Speaker 6: in Ukraine and Russia where we're arming one side and
Speaker 6: they're arming the other side. Of that.
Speaker 5: On the field, we're letting the Ukrainians fight our wars
Speaker 5: and that's the best strategy.
Speaker 6: No, that's not a good strategy at all. They're dying
Speaker 6: and so that's a best fight.
Speaker 5: All we're doing is funning and we're letting them fight against.
Speaker 4: Your your question of nationalism.
Speaker 6: So Trump's been pretty clear that he would pick his
Speaker 6: pick his fights and that through deterrence, the US would
Speaker 6: be a stronger nation. And I think that's a very
Speaker 6: defensible position to be in. If you say to to
Speaker 6: Putin or to China, we are going to be the
Speaker 6: strongest growing country. We're going to have the best technology.
Speaker 6: We're supporting our troops one hundred percent. They're going to
Speaker 6: be more reluctant to start wars.
Speaker 2: The three percent economy that we have, everyone, every political persuasion,
Speaker 2: every economic persuasion, has been shocked by the growth that
Speaker 2: we've seen. David Malpass, do you equate the growth we
Speaker 2: have in twenty twenty four directly to the stimulus of
Speaker 2: twenty twenty one, or can we actually say there's a
Speaker 2: productivity a technology overlay going on right now?
Speaker 6: Some of both, but with a big thing is the
Speaker 6: government is running a six and a half percent fiscal deficit. Now,
Speaker 6: this has never happened where you have a full employment
Speaker 6: economy and the government at great and so some part
Speaker 6: of our GDP growth right now is just the expansion
Speaker 6: of the national debt. The government borrows money.
Speaker 4: So, okay, I'll go there, David.
Speaker 2: It's good Colorado College physics. But the bottom line is,
Speaker 2: do you hear either candidate going on the path of
Speaker 2: Pete Peterson, Paul Saugus and Sam Nunn and getting our
Speaker 2: debt and deficit trajectories in better control.
Speaker 6: No, But to those three people, those were austerity policies,
Speaker 6: and what Trump is talking about is growth policies. They're
Speaker 6: very different. That means changing the regulatory policy so that
Speaker 6: people will actually build things. You know, a giant part
Speaker 6: of the semiconductor problem right now is you can't build
Speaker 6: a factory because of the rules that go into that
Speaker 6: IRA Bill, And so they're pumping money into the economy
Speaker 6: but getting nothing for it. That can all be changed.
Speaker 6: And that's not as hard to change as people think.
Speaker 6: It just means sensible decisions at the top in Washington
Speaker 6: to spend the money less wastefully.
Speaker 5: Is there a will in Congress to get that done.
Speaker 6: No, to some extent, they're part of the problem. That's
Speaker 6: why I ran in two thousand and ten for the Senate.
Speaker 6: So they love it when you just spend money and
Speaker 6: it doesn't matter if it has effect. But that can
Speaker 6: change through leadership from the top. We're just not getting
Speaker 6: it now.
Speaker 2: Tell us about money and running a campaign. I mean,
Speaker 2: you know, I look at the day to day battle
Speaker 2: of each of the candidates and all that out in
Speaker 2: the trenches as you were in twenty ten, Are you
Speaker 2: just basically waking up in the morning and trying to
Speaker 2: raise money?
Speaker 6: Yes, and plus I was spending quite a bit of
Speaker 6: my own money because I really believed in the cause.
Speaker 4: But the.
Speaker 6: Secret, I don't know that it's very much of a secret.
Speaker 6: Is there's corruption across the whole system. How is it
Speaker 6: that Washington is the richest part of the country. That
Speaker 6: doesn't make sense? And with them moving up every year
Speaker 6: on that leader on the leader board, Washington's the big
Speaker 6: winner and so that comes from campaigning constant campaigns.
Speaker 2: This has been a really successful interview. Everyone that's been
Speaker 2: listening to it thinks that I'm a piece of garbage
Speaker 2: floating around.
Speaker 4: The East River.
Speaker 2: David Malpass, thank you so much for joining us and
Speaker 2: for a spirit of debate here as we go to
Speaker 2: November fifth. Mister mail Past, of course, is a former
Speaker 2: president of the World Bank.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
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Speaker 2: Interrograna joins us this morning and here in our studios,
Speaker 2: Man Deep Singh.
Speaker 4: This is where it has to be, folks. They're not
Speaker 4: allowed to be in the same building of that.
Speaker 2: Important for what we do, Paul Sweeney, What do Interragrana
Speaker 2: and man Deep sing do for us?
Speaker 5: They run our technology research. It is a global business time.
Speaker 5: We have research channels around the world Europe, Asia, North
Speaker 5: America to really get a real handle on the entire
Speaker 5: technology stack. On ro Let's start with you here. We
Speaker 5: got Ernie coming up this week. Let's start with Apple.
Speaker 5: I'm not sure what the story is here. I'll tell
Speaker 5: you what I'm concerned about is China. Can you give
Speaker 5: us a sense of kind of Apple and China and
Speaker 5: what you think we might hear from Apple this quarter
Speaker 5: as it relates to China.
Speaker 7: All I think you nailed it. We are concerned about
Speaker 7: China as well. We've been hearing about slow down and
Speaker 7: spending in China in the luxury goods market, whether it's
Speaker 7: LVMH or Swatch. And we heard from some of the
Speaker 7: suppliers as well that the fourth quarter or the December
Speaker 7: quarter numbers may be little light. So when they give
Speaker 7: guidance for next quarter Apple, when they report on Thursday,
Speaker 7: I think that's could be a concern. And we are
Speaker 7: on the same page as you that China is an
Speaker 7: issue and.
Speaker 4: Rag back it up.
Speaker 2: Then one day on Microsoft, I guess it's AI angst.
Speaker 2: What is the character of aner Agrana's AI angst?
Speaker 7: So when you look at Microsoft for over the next
Speaker 7: twelve months, we are going to see massive capex going
Speaker 7: into the into the market, along with a little bit
Speaker 7: of margin degradation. So this is not going to be
Speaker 7: financially a massive year for Microsoft when it comes to
Speaker 7: earnings growth. But at the same time, that's the only
Speaker 7: company where we can see actual benefits of AI translating
Speaker 7: into revenue, and I think that's most important for them
Speaker 7: is to prove to the market that their AI revenue
Speaker 7: is picking up better than anybody else out there, and
Speaker 7: their positioning is stronger.
Speaker 4: And I think that's most important for Microsoft.
Speaker 5: Tom our good friend man Deep sing here in studio
Speaker 5: is sporting a cast on his left hand some tennis injury.
Speaker 5: Goes back to my theory no one ever got hurt
Speaker 5: sitting on a barstool. So Man Deep, I don't know
Speaker 5: what's going on with you in your tennis game. We
Speaker 5: got the digital advertising players, the Googles, the facebooks of
Speaker 5: the world. How's that business these days?
Speaker 8: I mean, given you know we are coming off peak
Speaker 8: interest rates, and you know with lower interest rates you
Speaker 8: typically see digital ads tend to do well. So I
Speaker 8: would say, I mean both Meta and Google should see
Speaker 8: kind of a tickup when it comes to digital ads spending.
Speaker 8: The thing to keep in mind is where the expectations are.
Speaker 8: So in the case of Meta, expectations are already for
Speaker 8: twenty percent growth, so it's hard to see them coming
Speaker 8: up with a big bet and race. They could. But
Speaker 8: in the case of Alphabet, the expectation is for thirteen
Speaker 8: percent growth, and that includes your cloud business, which is
Speaker 8: growing at thirty percent. So I would argue there is
Speaker 8: a more likelihood of Alphabet beating their numbers than Meta.
Speaker 2: Okay, nobody cares inter Rug Round. I'm gonna go to you,
Speaker 2: Man Deep now, but Interrug I want you to jump
Speaker 2: in here. Are you kidding me? My search is cluttered.
Speaker 2: I've got all this AI garbage up top. I can't
Speaker 2: get the search like I used to. What are we
Speaker 2: going to look like Man Deep singing in twelve months?
Speaker 8: Well, so, Chatchipt has clearly changed the user interface for
Speaker 8: how people search and for informational queries. A Chatchipt interface
Speaker 8: is far better than a Google search, But for.
Speaker 2: Search who it's too much to read.
Speaker 4: I just want to get to a Google.
Speaker 8: Search, But Google search will show you ten links and
Speaker 8: then you have to figure out which is the best
Speaker 8: link you want to.
Speaker 4: Give it less. I'm searching for girkins for martinis. You
Speaker 4: know I want the little one?
Speaker 6: Sure?
Speaker 4: Yeah, little cute pipals.
Speaker 2: Absolutely I get I get four miles of AI chat
Speaker 2: GPT garbage rather than search Google, Girkins, Martini.
Speaker 8: You're absolutely right. So for transactional queries, for navigational queries, right,
Speaker 8: there is no substitute from chatipt. It's only for informational queries.
Speaker 8: That's where chatchipt is making informational quarries.
Speaker 5: Maybe give how you beloing the best?
Speaker 2: We've got aniragron in Chicago interrag Does this mean bing
Speaker 2: to the rescue? Is this finally where bing gets it going?
Speaker 4: No?
Speaker 7: No, no, no, I don't think so. I think what's
Speaker 7: going to happen is for transactional lesment. They mentioned you're
Speaker 7: going to have enterprise companies coming up with copilot slash
Speaker 7: AI agents that can help you find those things better.
Speaker 7: So I think this is where a lot of the
Speaker 7: companies will be spending money. You know, whether it is
Speaker 7: e commerce, whether it is any other area, you will
Speaker 7: see AI helping you better get the right product for
Speaker 7: you in your hand. And I think that's the big differentiator.
Speaker 4: Tom.
Speaker 5: I think the reason Man Deep and on a Rock
Speaker 5: sounds so smart is because they cover technology and it
Speaker 5: just grows every single year. I could sound smart talking
Speaker 5: about technology. So an Rock talk to us about like,
Speaker 5: I know, we spend a lot of money buying you
Speaker 5: and mandeep this IDC data about where all the tech
Speaker 5: spending is going, and I paid for that for many years.
Speaker 5: Where is tech spending going over the next several years.
Speaker 5: Is this a slowing growth market or is tech spending
Speaker 5: going to go crazy with AI?
Speaker 7: When you look at tech spending right now, Paul and Tom,
Speaker 7: we are seeing a bit of a slowdown in non
Speaker 7: AI tech spending. So the big bucket is still the
Speaker 7: same what it was the last few years, but companies
Speaker 7: are just allocating money from one bucket to the other.
Speaker 7: What we are hoping is by next year, hoping that
Speaker 7: you know, the Middle East crisis comes down a little bit,
Speaker 7: the election is over, companies are going to do net
Speaker 7: new addition to that spending which is going to help
Speaker 7: both the AI part of it and the non AI
Speaker 7: part of it.
Speaker 2: Bloomberg surveillance for you across nation in your commute, Android Auto,
Speaker 2: Apple car play Man Deep Sing has both in this
Speaker 2: car and Sirius XM Channel one twenty one, Good morning
Speaker 2: as well. The Coriner, Washington, New York, Boston, ninety two
Speaker 2: nine FM. Good morning as well. We're on YouTube. Subscribe
Speaker 2: to Bloomberg Podcast. It's a new digital effort here. Thrilled
Speaker 2: at the growth of YouTube for Bloomberg Surveillance, Man Deep
Speaker 2: sing I got to get back to foundationals here. I
Speaker 2: actually watched sort of curious about the colors the M
Speaker 2: four launch yesterday, and you know where I am.
Speaker 4: I'm chip centric. I'm with Man Deep on this. Folks.
Speaker 4: Forget about you know, pink or orange?
Speaker 2: What do I need in an iMac three nanometer semiconductors.
Speaker 2: Explain to our audience the importance of three nanometer on
Speaker 2: our path to two nanometers.
Speaker 8: Yeah, look, I mean the reason why we are talking
Speaker 8: about AI is because all these computations are growing exponentially.
Speaker 8: I mean, look at how much we have come in
Speaker 8: terms of Nvidia GPU architecture. So the same architecture has
Speaker 8: to be brought on on the device side when it
Speaker 8: comes to the smartphones and the PCs you use. And
Speaker 8: that's what Apple has to do in terms of using
Speaker 8: the three nanometer manufacturing capacity to make this chip so
Speaker 8: powerful that it can run a full fledged AARI model
Speaker 8: on the chip.
Speaker 2: So the nano how does mandeep sworld of three nanometers
Speaker 2: fold over to what Nadella has to do with the
Speaker 2: conference call Microsoft on Thursday.
Speaker 7: You know, when you look at Microsoft, what they're trying
Speaker 7: to push is all their enterprise applications, whether it's dynamics
Speaker 7: or office. They need those to be much smarter to
Speaker 7: make it a point that people upgrade to the next
Speaker 7: version of it. So that's where they get the artpoop.
Speaker 7: When you look at a company like Microsoft, I mean,
Speaker 7: the number of people who are using Excel up pretty
Speaker 7: much constant. They really need people to go upstream in
Speaker 7: order to make more money, and that's where they need
Speaker 7: to prove that the pilots actually have that productivity that
Speaker 7: comes in it which is going to force people to
Speaker 7: upgrade the cloud.
Speaker 5: Give us a sense on a rog kind of I'm
Speaker 5: thinking about Amazon, Google, you know, some of the big
Speaker 5: players here in the Microsoft's of the world. Give us
Speaker 5: a sense of the lay of the land here on
Speaker 5: the cloud. Who's kind of on the margin doing a
Speaker 5: better job, and who might be on the margin kind
Speaker 5: of slipping a little bit.
Speaker 7: I see, this is the way we think about cloud.
Speaker 7: The entire market is growing at such a rapid rate
Speaker 7: that all three big companies are going to make money.
Speaker 7: In fact, Oorical is going to make money as well.
Speaker 7: But when you look at it at this point a time,
Speaker 7: because of Microsoft's relationship with open Ai, they are doing
Speaker 7: slightly better than the other two. But I have no
Speaker 7: doubts that both Amazon and Google will make a lot
Speaker 7: of money over the next few years because it is
Speaker 7: much easier to run some of these AI workloads in
Speaker 7: the cloud infrastructure rather than doing it in house. If
Speaker 7: you're a large bank like JP Morgan, you may decide
Speaker 7: to do it in house because you have the to
Speaker 7: do it, but not everybody else can go out buy
Speaker 7: GPUs and AI service and try to do this in house.
Speaker 7: There's a massive shortage of labored out there as well.
Speaker 5: Many I want to ask you about an old time
Speaker 5: long in the two tech company Intel. I know you're
Speaker 5: not the chip guy, but you hired our chip guy.
Speaker 5: What's going on with you?
Speaker 4: Your fault exactly?
Speaker 5: Can we ever get our good friends at Intel back
Speaker 5: on the cutting edge again?
Speaker 4: Well?
Speaker 8: Tom mentioned about three nanometer. Intel has still not perfect
Speaker 8: at seven nanometers, so for them to get to three nanometer,
Speaker 8: they still need that time to you know, build their
Speaker 8: capabilities and that's where I think Intel has struggled for
Speaker 8: the last five years. It's hard to see how they
Speaker 8: can get directly to three nanometer given where TSMC is,
Speaker 8: But that's where the gap.
Speaker 5: Is three nanometer John.
Speaker 2: Yeah, let's yeah, Well there's tons of the minus nine
Speaker 2: ye who entered RONA last question to you here, when
Speaker 2: you do some of the parts of technology, how far
Speaker 2: out the sex is can you go?
Speaker 4: If you some of the parts.
Speaker 2: I don't want you to buy holes sell, but if
Speaker 2: you some of the parts. Some of these companies reporting
Speaker 2: this week, is it confidence out three years, five years?
Speaker 2: Is it interogrna confidence out to ten years?
Speaker 7: They think they need to basically mention that the demand
Speaker 7: is so strong that they really don't see a way
Speaker 7: that they're going to reduce their capex anytime soon. Any
Speaker 7: talk of reduction as capex is going to be taken
Speaker 7: with a lot of negativity right now because the way
Speaker 7: these guys are spending, they're going to spend let's say,
Speaker 7: close to one hundred billion dollars extra over then next
Speaker 7: trawo and a half years or so. If they say
Speaker 7: we're going to slow that down, that's bad sign. But otherwise,
Speaker 7: what They're basically saying is that the total addressable market
Speaker 7: is growing at such a rapid rate that they are
Speaker 7: out there to spend the money and then collect the
Speaker 7: you know, dollars after that.
Speaker 4: You know, I shaved the beard today. You know what
Speaker 4: I mean? These plicer scope and beards here now, you know, man,
Speaker 4: is that like a bi thing? Many? Fine?
Speaker 5: I don't honor.
Speaker 4: The re ducks of CLOONEYA in Chicago.
Speaker 5: Exactly, which is a burgeoning tech cub. I'm not sure
Speaker 5: if you knew about it. That's why we have Chicago's
Speaker 5: tech cub exactly.
Speaker 4: Tell that to Bowie. Thank you so much greatly.
Speaker 2: This is a pleasure. I can't tell you, folks the
Speaker 2: gift we have and what Sweeney invented at Bloomberg Intelligence.
Speaker 2: Mandy Singh enter Agrana to tell me how much money
Speaker 2: I lost by not being in big tech stocks.
Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday
Speaker 1: starting at seven am Eastern on applecar Play and Android
Speaker 1: Auto with the Bloomberg Business app. You can also watch
Speaker 1: us live every weekday on YouTube and always on the
Speaker 1: Bloomberg terminal.
Speaker 2: Joining us right now with the worst job at Bloomberg
Speaker 2: is Michael Shephard. He is in Washington, and he and
Speaker 2: Margaret Collins have to herd cats here till November five. Mike,
Speaker 2: let me just get the broader you here is you
Speaker 2: and Peggy Collins set up for this election? Is a
Speaker 2: general statement? Is everybody all hands on deck into the
Speaker 2: next weekend?
Speaker 9: Well, Tom, first, I gotta say it is I think
Speaker 9: the best job at Bloomberg.
Speaker 4: You know what more.
Speaker 9: Would you want? You know, where else did you want
Speaker 9: to be than right here?
Speaker 4: Mike. He's got the best food court in Bloomberg.
Speaker 7: He does for we do We do they too.
Speaker 9: I'll stack our pantry up against any pantry around the world.
Speaker 9: But yeah, Peggy and I have been bracing for this
Speaker 9: election for weeks, if not months, and really, if not
Speaker 9: for the past four years, really because as soon as
Speaker 9: Joe Biden took the oath of office back in twenty
Speaker 9: twenty one, Donald Trump was already laying his plans for
Speaker 9: a comeback, and we're seeing that now come to a head.
Speaker 9: He gave his closing argument on Sunday night Madison Square Garden,
Speaker 9: which everybody watched so closely, And Harris is going to
Speaker 9: do the same thing tonight.
Speaker 2: And there's reports in the folks. I'm just talking from
Speaker 2: the zeitgeist here. There's reports that the Trump team is
Speaker 2: preparing for a second administration. Is the Harris team, Mike Shephard,
Speaker 2: preparing for a Harris presidency?
Speaker 4: Are they there yet?
Speaker 9: You know, they are trying to lay the groundwork as
Speaker 9: best they can. But remember the challenge that they face.
Speaker 9: They really only had a few months agreed as a
Speaker 9: full fledged presidential operation and campaign, so it is a
Speaker 9: bit of a scramble for them, and they have to
Speaker 9: figure out who might stay on and what roles, and
Speaker 9: who they might want to bring in from the outside.
Speaker 9: Recruiting from the business world too.
Speaker 2: I mean on YouTube live chat, the ladies dig the beard,
Speaker 2: gotta have it.
Speaker 4: We're having any guests today without a beard?
Speaker 5: I don't know. It's kind of what the young folks
Speaker 5: should do. And hey, Mike, how are you and your
Speaker 5: colleagues at the Washington DC Bureau Bloomberg is how do
Speaker 5: you guys figuring out Whennessing will know one way or
Speaker 5: the other who's winning. Is this going to be a day,
Speaker 5: two days a week? How are you guys thinking about this?
Speaker 9: We're bracing for the long haul, Paul, And that's a
Speaker 9: great question because so many people, especially on Wall Street,
Speaker 9: are wondering when will the uncertainty about the election outcome.
Speaker 9: And we're not really gonna know until sometime toward the
Speaker 9: end of next week. Based on our best estimates and guesses.
Speaker 9: The election is so closely contested, and we are expecting
Speaker 9: some challenges from the Trump side or the harricide even
Speaker 9: in some of those swinging states.
Speaker 7: So buckle up.
Speaker 9: Make sure you bring plenty of snacks and that you're comfortable,
Speaker 9: because we're going to be in this for the long haul.
Speaker 9: And remember Tom in twenty twenty, it took until Saturday
Speaker 9: after the election before we had an outcome.
Speaker 2: Okay, Mike sheperd I'm on a Heidi Moore shot hiding
Speaker 2: more folks follow out on Twitter. Really really is always controversial,
Speaker 2: always interesting, always informative. And she crushed the other day
Speaker 2: Mike Shephard criticizing all the punditry that you have to
Speaker 2: deal with twenty four to seven because nobody's looking at
Speaker 2: the margin of era.
Speaker 4: Those on YouTube folks.
Speaker 2: Ari's putting up this killer map of the swing states.
Speaker 10: Harris Trump Blue I should wear she knows, you know,
Speaker 10: get in front of my chart where she knows you
Speaker 10: tell everybody here what's going on, Belowney, Mike Shephard, Where
Speaker 10: did margin of error go hiding?
Speaker 4: Moore wants to know.
Speaker 9: Look, margin of ra is baked into all of these polls,
Speaker 9: but people are emphasizing what the difference is. The margin
Speaker 9: of verra does get lost a little bit in the
Speaker 9: fine print. And the truth is, it is very hard
Speaker 9: for us to discern from the surveys that we've been
Speaker 9: taking for months now where voters stand. And if you
Speaker 9: look at early voting results we've already had, according to
Speaker 9: ABC NBC News, rather forty four million people cast ballots already,
Speaker 9: and from the data we see on those early votes,
Speaker 9: it's hard to tell where is it falling, doesn't advantage
Speaker 9: one party or another, We simply can't tell based on
Speaker 9: the parties and affiliations of people have already either submitted
Speaker 9: our mail in ballots or gone to early polling places.
Speaker 9: This is a really tough one to call based on
Speaker 9: the data available and based on the surveys. Although one
Speaker 9: thing I'll say in our Bloomberg News Morning Console poll,
Speaker 9: this was one number that stood out of nearly five
Speaker 9: thousand voters. In our last survey that published on Wednesday,
Speaker 9: guess how many voters declared themselves as undecided? Out of
Speaker 9: nearly five thousand, it was ninety three. And that's pretty astonishing,
Speaker 9: And that kind of gives you an idea of the
Speaker 9: small space that the two candidates are really fighting over.
Speaker 2: They were all at a bar in New Jersey with
Speaker 2: John Tucker where they were very undecided.
Speaker 4: Very undecided.
Speaker 5: Mike, how about down ballot, down ballot here, what do
Speaker 5: we know so far about how some of that is
Speaker 5: shaking out or could chick out?
Speaker 9: Well, you know, Paul, another great question, because it's not
Speaker 9: just the presidency that's at stake, it's control of Congress
Speaker 9: and the Senate is a specially crucial this year because
Speaker 9: whoever wins the presidency will have to contend with the
Speaker 9: Senate that could very well be opposite them, and we
Speaker 9: could have we are likely to have divided government again,
Speaker 9: and they'll have veto power in essence over cabinet nominees
Speaker 9: and judicial nominade.
Speaker 2: Okay, so let's just go there. And I got one
Speaker 2: minute left, Mike Shepard, Let's go to Ohio. Shared Brown
Speaker 2: is fighting for his life, I believe for the Senate,
Speaker 2: the Democrat versus a spirited Republican. Do either of those
Speaker 2: candidates want their presidential candidates to show up to campaign
Speaker 2: for them in Ohio?
Speaker 9: Well, yeah, that's a good question, Tom, because going well
Speaker 9: because for a lot of the especially John Tester, are
Speaker 9: also out in Montana, they don't necessarily want to be
Speaker 9: associated with the top of the ticket, and they really
Speaker 9: do want to speak to more local issues. That's something
Speaker 9: that Shared Brown, for instance, in Ohio, has tried to
Speaker 9: do well listening to the Union base out there. Bernie Moreno,
Speaker 9: his rival on the Republican side, is also trying to
Speaker 9: make a different kind of appeal to voters there too,
Speaker 9: So it is going to be very tough to determine
Speaker 9: which has the edge right now, though the electoral map
Speaker 9: favors Republicans when it comes to the Senate.
Speaker 2: Mitch Shepherd, thank you so much leading our coverage here
Speaker 2: on our Politics in Washington with Always with Margaret Collins.
Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify,
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