WEBVTT - Bloomberg Wall Street Week - August 30th, 2024 0:00:00.280 --> 0:00:02.599 This is Bloomberg Wall Street Week. 0:00:02.680 --> 0:00:07.280 The global push into infrastructure, breaking the IPO logjam, in tech. 0:00:07.160 --> 0:00:09.280 The financial stories that shape. 0:00:08.920 --> 0:00:12.040 Our work, cutting inflation without losing jobs. Do we need 0:00:12.119 --> 0:00:14.560 rate cuts and if so, how many? Investing in the 0:00:14.560 --> 0:00:16.120 time of geopolitical turmoil. 0:00:16.200 --> 0:00:18.560 Through the eyes of the most influential voices. 0:00:18.720 --> 0:00:23.480 Ten Rogueff Economists of Harvard, former fdicehead Shiela Bert ge CEO, 0:00:23.600 --> 0:00:26.439 Larry Culp, San Francisco Fed President Mary Daily. 0:00:26.239 --> 0:00:30.160 Bloomberg Wall Street Week with David Weston from Bloomberg Radio. 0:00:30.280 --> 0:00:33.239 Equity markets up, interest rates on their way down, and 0:00:33.440 --> 0:00:36.800 underlying it all, a growing federal deficits and an AI 0:00:37.000 --> 0:00:40.400 tech revolution. This is a special edition of Wall Street Week, 0:00:40.479 --> 0:00:42.840 looking back on the first half of twenty twenty four. 0:00:43.280 --> 0:00:47.400 I'm David Weston. We talked with investors and who those 0:00:47.440 --> 0:00:50.519 investors listened to through the year, and we'll revisit some 0:00:50.560 --> 0:00:53.120 of the most memorable conversations with Mary Daily of the 0:00:53.200 --> 0:00:57.560 San Francisco Fed, Mark rowan Apollo, Claire Eprono's Centerview Partners, 0:00:57.760 --> 0:01:13.880 and Neil Ferguson of the Hooper Institution. We start with 0:01:13.959 --> 0:01:16.840 former Treasury Secretary Bob Rubin and an issue he's been 0:01:16.840 --> 0:01:19.760 working on since he first joined the Clinton administration back 0:01:19.760 --> 0:01:23.720 in nineteen ninety three. The growing federal debt something that 0:01:23.800 --> 0:01:27.240 hasn't gotten better, and he says has gotten much worse. 0:01:27.640 --> 0:01:29.800 I think that the risks are even greater today because 0:01:29.800 --> 0:01:33.800 our debt GDP ratio is a proximal Sumbio estimates about 0:01:33.800 --> 0:01:35.960 one hundred percent right now. It's the highest in the 0:01:36.040 --> 0:01:37.959 history of the country except for nineteen forty six and 0:01:38.000 --> 0:01:40.199 forty seven we were coming back out of World War Two. 0:01:40.600 --> 0:01:42.720 I think the risks are enormous, and some of them 0:01:42.760 --> 0:01:45.760 are materializing already, like higher registrates and effect on inflation 0:01:45.920 --> 0:01:49.160 in part not full, and others haven't materialized yet, but 0:01:49.200 --> 0:01:51.600 I think they're out there and sooner related will materialize 0:01:51.640 --> 0:01:53.480 if we don't correct our our physical trajectory. 0:01:53.920 --> 0:01:56.360 You talked about some of the market indicators and even 0:01:56.400 --> 0:01:58.240 forces that you saw in ninety three that sort of 0:01:58.280 --> 0:02:00.400 pointed you in a direction at present Clinton, in the 0:02:00.440 --> 0:02:02.920 direction of really making the death set of special issue. 0:02:02.960 --> 0:02:05.160 Are we seeing those indicators of their forces today in 0:02:05.200 --> 0:02:05.800 the markets. 0:02:06.200 --> 0:02:09.519 I think that we are seeing the effects, but it's 0:02:09.600 --> 0:02:12.440 unfortunately from a political point of view. David I don't 0:02:12.440 --> 0:02:15.120 think they're getting connected in a meaningful way. In a 0:02:15.160 --> 0:02:18.600 meaningful way with deficit reduction, sure interested. I mean the 0:02:18.639 --> 0:02:20.959 long the tenure was about I think one and a 0:02:21.000 --> 0:02:23.520 half percent, say two years ago, and now it's about 0:02:23.520 --> 0:02:25.640 four and a half percent. Now, that's a lot of 0:02:25.639 --> 0:02:27.840 factors that go into that, but I think part of 0:02:27.880 --> 0:02:30.240 it is our fiscal situation and the effect that's had 0:02:30.280 --> 0:02:32.840 on inflation. I think it's been an aggravator of or 0:02:33.400 --> 0:02:37.000 if you will, an effect on inflation. And I think 0:02:37.000 --> 0:02:41.639 there's a general concern about the imbalance between supplying demand 0:02:41.680 --> 0:02:47.440 for savings and the excess demand that's created by our deficits. 0:02:47.800 --> 0:02:51.240 But it's not Unfortunately, from political point of view, I 0:02:51.240 --> 0:02:53.080 don't think the dots are being connected the way they 0:02:53.080 --> 0:02:55.440 were back in ninety two to three when we acted. 0:02:55.639 --> 0:02:58.560 Ninety three we acted, but ninety two when Predident Clinton 0:02:58.600 --> 0:02:59.520 was putting his plans together. 0:03:00.080 --> 0:03:01.800 Talk these days, when we talk about the FED about 0:03:01.800 --> 0:03:05.320 the neutral rate and debate about whether it is the 0:03:05.360 --> 0:03:08.600 neutroraid higher. And I guess my question is does the 0:03:08.639 --> 0:03:11.720 deficit and the debt normally, all the things being equal, 0:03:12.040 --> 0:03:13.280 drive the neutroid higher? 0:03:13.919 --> 0:03:16.800 I think over time, But I think you can also 0:03:16.840 --> 0:03:18.240 have a long period of time. And we had a 0:03:18.240 --> 0:03:20.600 long period of time, actually a long long period of 0:03:20.680 --> 0:03:23.040 time during which all of this was having little effect, 0:03:23.440 --> 0:03:26.280 and then all of a sudden, the ten year went, 0:03:26.320 --> 0:03:27.880 as I said, a moment ago, from roughly one and 0:03:27.880 --> 0:03:32.639 a half to roughly four and a half. And I've 0:03:32.639 --> 0:03:35.720 been around markets, and these policies were for five decades now. 0:03:35.800 --> 0:03:38.520 And there's certainly our periods when you can have a 0:03:38.640 --> 0:03:43.000 long time when reality is out of or what's happening 0:03:43.040 --> 0:03:46.120 is out of sync with reality. But that doesn't go 0:03:46.160 --> 0:03:48.800 on forever, and when it corrects, it can correct savagely. 0:03:49.840 --> 0:03:53.040 A good example was the Eurozone, the sovereign Eurostone crisis. 0:03:53.360 --> 0:03:56.320 For years, the Greek bonds trated roughly speaking parody with 0:03:56.520 --> 0:03:58.800 ghivlier take with German buns, and then all of a 0:03:58.840 --> 0:04:01.720 sudden exploded. And I think it's a good example of 0:04:02.160 --> 0:04:06.760 how what isn't sensible ultimately doesn't continue. 0:04:07.040 --> 0:04:08.839 There's the politics of it, which I want to talk about. 0:04:08.880 --> 0:04:11.480 Before that, let's talk about the approach taken to it. 0:04:11.520 --> 0:04:13.760 Let's talk about, for example, the Biden administration. We can 0:04:13.800 --> 0:04:15.920 talk about the Trump instriction. If you walk with the bidminstration. 0:04:16.520 --> 0:04:18.600 When you were there back in the nineties, you came 0:04:18.600 --> 0:04:20.880 from Golden Sachs, you had other people there who knew 0:04:20.880 --> 0:04:23.679 the markets pretty well. There was a healthy dose of 0:04:23.720 --> 0:04:25.400 how are the markets reacting this? What does that do 0:04:25.520 --> 0:04:27.960 for us? Do we still have that or is it 0:04:28.040 --> 0:04:30.840 more ideologically driven because some people think we've sort of 0:04:30.880 --> 0:04:35.040 shifted the orientation, particularly the Democratic Party, more toward protectionism, 0:04:35.279 --> 0:04:36.560 more toward populism. 0:04:36.960 --> 0:04:39.200 Well, you've asked multiple questions. I'll give you. I'll give 0:04:39.200 --> 0:04:40.599 you my view. I've given a lot of thought to this, 0:04:40.640 --> 0:04:44.000 and I know the people there pretty well. If you 0:04:44.040 --> 0:04:46.800 look at the proposals, but I want to respond to 0:04:46.800 --> 0:04:48.840 something you said that it's a little different. Well, i'll 0:04:48.839 --> 0:04:50.839 give them that in a second. If you look at 0:04:50.880 --> 0:04:54.880 the proposals, the major policy proposals that President Biden made, 0:04:55.000 --> 0:04:58.960 they were all paid for in the proposals. Now, ultimately 0:04:59.000 --> 0:05:00.919 they had to go through Congress. When they went through Congress, 0:05:00.920 --> 0:05:02.760 they came out some of them paid forwards and some 0:05:02.800 --> 0:05:05.080 of them not. I think he's ok. I think he's 0:05:05.120 --> 0:05:07.280 actually pretty good on this. I think there are other 0:05:07.320 --> 0:05:10.240 issues were I might have a different view than he does, 0:05:10.360 --> 0:05:13.880 or maybe I would have a say it an altered 0:05:13.920 --> 0:05:16.039 view rather than a different view. But I think on 0:05:16.080 --> 0:05:18.160 fiscal stuff, actually he's got a pretty good sense of it. 0:05:18.760 --> 0:05:21.200 I think on the proposals that they had three major 0:05:21.200 --> 0:05:26.360 bills I were chips and infrastructure and in the original propose, 0:05:26.440 --> 0:05:29.560 and then of course for that build back better and 0:05:29.640 --> 0:05:31.120 all of those. If you look at the and I 0:05:31.279 --> 0:05:33.760 this is correct because I looked at them. All of 0:05:33.800 --> 0:05:36.840 those the proposals were fully paid for Dad to go 0:05:36.880 --> 0:05:39.120 through Congress, and in Congress they in some cases they 0:05:39.160 --> 0:05:41.560 lost the paid for us. You know, you mentioned I 0:05:41.600 --> 0:05:45.040 forgot how you put it now before, but did you 0:05:45.080 --> 0:05:48.920 say populism or progressive? Yeah, populism. If you look at 0:05:49.000 --> 0:05:51.400 at what has been referred to as industrial policy, and 0:05:51.400 --> 0:05:53.720 they referred to those industrial policy, it's their label, but 0:05:53.839 --> 0:05:56.840 it's not it's not picking winners and losers. Now it 0:05:57.080 --> 0:05:58.520 may be in the minds of some of those people, 0:05:58.520 --> 0:06:00.200 but if you look at those proposals, and I have 0:06:00.240 --> 0:06:02.480 talked to their people, that there's a lot I think 0:06:02.520 --> 0:06:04.479 they actually make a lot of sense on a purely 0:06:04.480 --> 0:06:09.240 economic basis. Their externalities. They basically dealt with shortfall, with 0:06:09.360 --> 0:06:12.960 insecurities in our system, in our ascuse me in our 0:06:13.000 --> 0:06:16.400 economic system with respect to our economic security or economic function, 0:06:16.520 --> 0:06:21.000 our geopolitical or national security functioning that markets were not 0:06:21.000 --> 0:06:22.560 going to meet and had to be met by government. 0:06:22.920 --> 0:06:25.880 So that I think is not industrial policy in the 0:06:25.920 --> 0:06:28.240 traditional sense, and let's pick winners and losers. It was 0:06:28.320 --> 0:06:31.000 let's fill holes that the private sector simply isn't filling, 0:06:31.160 --> 0:06:33.400 and those are holes of economic inial security. 0:06:33.560 --> 0:06:36.680 So from your perspective, the overall approach, you don't take 0:06:36.760 --> 0:06:39.000 much issue with. No, do we end up with where 0:06:39.040 --> 0:06:42.080 we are, where we have increasing deficits in increasing debts. 0:06:42.160 --> 0:06:46.080 Oh we a minute, what I talked about with the proposals, No, 0:06:46.240 --> 0:06:49.160 I think we're in a terrible place because unfortunately, once 0:06:49.200 --> 0:06:52.560 you get to legislating, there isn't the will. There's a 0:06:52.600 --> 0:06:56.680 lot of talk, but the talk is always divided politically 0:06:57.000 --> 0:07:00.440 between the Republicans who refuse to raise taxes and the 0:07:00.480 --> 0:07:02.920 Democrats who won't deal with titlements. How I think there 0:07:02.960 --> 0:07:05.480 was a reality to this, and that is I do 0:07:05.520 --> 0:07:08.080 think when we eventually get to doing this, or if 0:07:08.080 --> 0:07:10.200 we were to do it, you know after the next election, 0:07:10.280 --> 0:07:12.360 which the Good Lord would hope we will, but I 0:07:12.400 --> 0:07:16.960 wouldn't bet on it about sixty percent or something. Of 0:07:17.000 --> 0:07:20.600 the increase in the debt from to twenty twenty two 0:07:21.000 --> 0:07:23.520 was because of the tax cuts, So if it hadn't 0:07:23.560 --> 0:07:26.320 been for that, the debt, instead of being one hundred 0:07:26.360 --> 0:07:27.920 percent CDP, would be about sixty percent. 0:07:28.520 --> 0:07:32.400 That was former Secretary of the Treasury Bob Rubins. Private 0:07:32.400 --> 0:07:35.320 equity slowed down a lot in response to over five 0:07:35.400 --> 0:07:38.000 hundred basis points added to interest rates and a good 0:07:38.000 --> 0:07:40.640 deal of uncertainty about where the economy is headed. But 0:07:41.200 --> 0:07:43.960 it's starting to pick back up and the much anticipated 0:07:43.960 --> 0:07:47.080 FED cuts expected this fall should only help. When we 0:07:47.120 --> 0:07:49.360 talk with Blair Efron as cent of You Partners earlier 0:07:49.400 --> 0:07:51.640 in the year, he predicted that when the year is over, 0:07:51.960 --> 0:07:53.880 it will prove to have been a good one for 0:07:53.960 --> 0:07:55.120 his core business. 0:07:55.280 --> 0:07:57.640 I think private equity will be a very strong driver 0:07:57.680 --> 0:08:01.000 in twenty twenty four. If you think about the years 0:08:01.000 --> 0:08:03.160 a preceding twenty twenty three, with basically forty percent of 0:08:03.200 --> 0:08:10.720 the market, there is such a large group of companies 0:08:10.760 --> 0:08:14.240 that are looking for liquidity and coming from private equity 0:08:14.280 --> 0:08:16.920 that I do think it'll be a very active time. 0:08:17.240 --> 0:08:19.480 And again that goes directly to the financing markets as well. 0:08:19.680 --> 0:08:24.480 The financing arena will be more liquid than it was 0:08:24.560 --> 0:08:28.400 last year, and we're seeing most of the private equity 0:08:29.520 --> 0:08:33.800 world think about being more active, and frankly, to their credit, 0:08:35.120 --> 0:08:37.040 they slowed down activity at a moment when they should. 0:08:37.600 --> 0:08:44.440 You know, it's so last year it was much easier 0:08:44.440 --> 0:08:46.600 for corporate to look at something and not think they 0:08:46.640 --> 0:08:50.240 had private ecret competition. This year, when we see companies 0:08:50.280 --> 0:08:54.199 we're selling, the interest is both corporate. We already saying 0:08:54.240 --> 0:08:55.840 it corporate and private equity. 0:08:56.200 --> 0:08:58.720 How much of your business immersion exersition is driven by 0:08:58.960 --> 0:09:02.480 essentially the need to reform parts of a sector. I mean, 0:09:02.520 --> 0:09:04.199 I'm thinking of one that I come out of media 0:09:04.320 --> 0:09:05.920 right now. There's a lot of pressure right now for 0:09:05.960 --> 0:09:08.080 some of the big media companies to really think about 0:09:08.160 --> 0:09:09.840 the cards they've got and how they deal with them, 0:09:10.080 --> 0:09:11.720 how they get rid of some how they pick them up. 0:09:11.960 --> 0:09:13.840 How much of em andy is really driven by these 0:09:13.880 --> 0:09:16.440 big companies saying, you know, we got a really restructure today. 0:09:16.559 --> 0:09:19.400 I think it's most of it. Transformation is happening so 0:09:19.480 --> 0:09:22.520 quickly and it's so disruptive that every company is saying, 0:09:22.559 --> 0:09:25.400 here's my portfolio to day, but where's it going to 0:09:25.400 --> 0:09:27.560 be tomorrow. So even you talk about your world media, 0:09:27.840 --> 0:09:30.360 it used to be traditional media with three networks. Now 0:09:30.360 --> 0:09:36.120 it's traditional and non traditional players. Apple, Google, Amazon are 0:09:36.160 --> 0:09:41.720 as active as Disney, Comcast, Paramount gaming. What is technology? 0:09:41.720 --> 0:09:44.400 It's all becomes one industry. If I go across any industry, 0:09:45.080 --> 0:09:49.160 that is what we say. I look at the pharma world. 0:09:49.280 --> 0:09:51.720 The fact is life sciences is one of the biggest 0:09:51.760 --> 0:09:54.040 areas out there. Why because we have such innovation going 0:09:54.040 --> 0:09:57.319 on in this country. So many companies you never heard 0:09:57.320 --> 0:09:58.800 of five years ago on internet heard of that have 0:09:58.840 --> 0:10:02.760 become really important to five years later. That this becomes 0:10:02.760 --> 0:10:04.520 a window when you can about R and D for 0:10:04.559 --> 0:10:07.200 a big farmer company, it's interesting in many ways to 0:10:07.200 --> 0:10:12.960 buy then build. So I would say that every business 0:10:13.080 --> 0:10:17.040 is being challenged in ways it never was before. And 0:10:17.080 --> 0:10:20.200 it's causing CEOs, It's causing boards, causing season leaders to 0:10:20.360 --> 0:10:23.800 constantly rethink their ideal portfolio, recognizing there is never an 0:10:23.880 --> 0:10:26.880 end state portfolio anymore. It is always going to be evolving. 0:10:27.360 --> 0:10:32.520 And the good news is we have a as talented 0:10:32.640 --> 0:10:36.120 and experienced a group of leaders as ever. So when 0:10:36.120 --> 0:10:41.400 a CEO undertakes M and A today, chances are strong 0:10:41.600 --> 0:10:43.280 that he or she is going to end up doing 0:10:43.280 --> 0:10:45.199 a good job in the right thing to the company, 0:10:45.280 --> 0:10:47.360 both strategically and financially. 0:10:46.960 --> 0:10:49.280 All of which supports your view. The twenty twenty four 0:10:49.360 --> 0:10:50.840 looks like it'll be a lot strong in twenty three 0:10:50.880 --> 0:10:52.920 y three emergent acquisitions. What does that say for a 0:10:52.960 --> 0:10:55.600 cent of you partners? Are you hiring an if they are, 0:10:55.600 --> 0:10:57.680 you are hiring? What sorts of people you're hiring? Because 0:10:57.679 --> 0:10:59.520 it looks very different than did certainly ten years ago, 0:10:59.559 --> 0:11:02.360 maybe five years ago, because of something innovasion, not to 0:11:02.360 --> 0:11:03.800 speaking for example generative AI. 0:11:04.960 --> 0:11:05.840 Boy, that's a great question. 0:11:05.880 --> 0:11:07.920 First, we are hiring, so anybody has a resume, let 0:11:08.000 --> 0:11:08.880 us know. We're always hiring. 0:11:10.080 --> 0:11:11.880 The skill set we look for is. 0:11:15.280 --> 0:11:17.960 Probably different than you would think. We want people who 0:11:18.000 --> 0:11:22.280 can think critically, who can analyze situations, who have judgment, 0:11:23.960 --> 0:11:26.520 have an ability to make difficult problems distilled into more 0:11:26.559 --> 0:11:30.280 simple problems, and it's less about whether you can make 0:11:30.320 --> 0:11:33.920 a great model. I do think when AI over time 0:11:33.960 --> 0:11:36.920 will replace some of the skill sets that we see 0:11:36.960 --> 0:11:40.800 traditionally done in stem coding. For example, I'm not sure 0:11:40.840 --> 0:11:45.080 that burs I'd be advising my kids that learning how 0:11:45.080 --> 0:11:47.079 to be great coders is going to matter in ten years. 0:11:47.200 --> 0:11:50.440 What will matter is do you have judgment? Do you 0:11:50.440 --> 0:11:54.000 have an ability to think critically as I mentioned and 0:11:54.200 --> 0:12:00.240 ask questions that need to be asked, that you can 0:12:00.240 --> 0:12:03.160 see situations? What am I missing? And I think that 0:12:03.160 --> 0:12:07.760 that is a skill set that people are going to 0:12:07.800 --> 0:12:10.480 find is increasingly important. And also the skill set that 0:12:10.520 --> 0:12:13.000 says I'm gonna have three careers. What do I need 0:12:13.040 --> 0:12:16.240 to know to have three careers of my professional spend? 0:12:16.600 --> 0:12:21.120 That was Blair Ephron of Centerview Partners. Coming up. The 0:12:21.200 --> 0:12:23.920 United States is doubling down on chip production. We talked 0:12:23.920 --> 0:12:27.079 with San Francisco Fed President Mary Daily about how her 0:12:27.160 --> 0:12:29.640 district is helping to lead the way and not just 0:12:29.800 --> 0:12:34.800 in Silicon Valley. That's next on Wall Street Week on Bloomberg. 0:12:34.480 --> 0:12:37.360 Seen through the Eyes of Experts gives you a better view. 0:12:37.480 --> 0:12:38.760 Stocks just keep moving higher. 0:12:38.800 --> 0:12:41.800 And at Bloomberg, our market vision is twenty twenty. 0:12:41.920 --> 0:12:44.920 There's still supply chain issues out there. The inflation debate continues. 0:12:44.960 --> 0:12:45.800 Bloomberg Radio. 0:12:45.920 --> 0:12:51.000 The Bloomberg Business appened Bloomberg Radio dot com. This is 0:12:51.080 --> 0:12:55.480 Bloomberg Wall Street Week with David Weston from Bloomberg Radio. 0:13:02.120 --> 0:13:04.400 This is a mid year special additional Wall Street Week 0:13:04.440 --> 0:13:06.560 we reviewing some of the best interviews we've done so 0:13:06.679 --> 0:13:09.480 far in twenty twenty four. One of the big themes 0:13:09.480 --> 0:13:11.760 of the year has been the United States investment in 0:13:11.840 --> 0:13:15.240 microchip manufacturing, and when we think tech, we tend to 0:13:15.280 --> 0:13:18.439 focus on Silicon Valley. But Mary Daily, the FED president 0:13:18.440 --> 0:13:21.760 whose district includes northern California, told us that that is 0:13:21.800 --> 0:13:23.520 only the beginning of the story. 0:13:24.120 --> 0:13:26.720 It is not just Silicon Valley. You can go to Oregon. 0:13:27.040 --> 0:13:29.560 That's the home of chip manufacturing and has been for 0:13:29.600 --> 0:13:32.840 two decades or more. We have silicon slopes in Salt 0:13:32.920 --> 0:13:36.640 Lake City, a burgeoning community even in periods, and people 0:13:36.679 --> 0:13:39.760 think of it as northern California, but La has a 0:13:39.800 --> 0:13:43.079 considerable amount of tech, and Boise, Idaho is building itself 0:13:43.160 --> 0:13:46.120 up as a tech center now. They all do different 0:13:46.240 --> 0:13:49.880 kinds of things. But to suggest that Silicon Valley is 0:13:49.920 --> 0:13:53.160 the only thing out there is really a misnomer. 0:13:53.400 --> 0:13:55.559 So an important contributor to you're part of the economy, 0:13:55.559 --> 0:13:58.200 which is a substantial part of the economy. Is tech. 0:13:58.280 --> 0:13:58.800 Is it growing? 0:13:59.080 --> 0:14:01.720 It is growing now. It's interesting because there's been some 0:14:01.840 --> 0:14:05.400 layoffs in tech. There's been some rebalancing of companies, and 0:14:05.440 --> 0:14:09.720 that makes people afraid that tech is falling. And I 0:14:09.840 --> 0:14:13.240 always remind people there's a difference in growing less quickly 0:14:13.280 --> 0:14:15.600 than you used to or you might want to, and 0:14:15.640 --> 0:14:18.520 the level and tech is still a very good investment. 0:14:18.720 --> 0:14:20.800 There's a lot of interest in it. There's a lot 0:14:20.840 --> 0:14:23.240 of jobs out there available to it. And with the 0:14:23.520 --> 0:14:27.360 AI and generative AI boom of interest, we're seeing a 0:14:27.360 --> 0:14:30.240 lot of investments in that space alone. And again it's 0:14:30.280 --> 0:14:33.760 not just in the GENAI, it's in autonomous vehicles, it's 0:14:33.800 --> 0:14:37.600 in predictive learning models and what that can do for businesses. 0:14:37.840 --> 0:14:39.440 So there's just a lot of interest and I think 0:14:39.480 --> 0:14:40.760 it's fueling those booms. 0:14:41.040 --> 0:14:43.080 So tech has been driving the equity markets for a 0:14:43.080 --> 0:14:45.320 while now, and it's very exciting. How do you avoid 0:14:45.360 --> 0:14:45.760 a bubble? 0:14:46.560 --> 0:14:51.280 So tech goes through times of overvaluation and times of repricing, 0:14:51.360 --> 0:14:54.200 and we've seen a variety of those over time, and 0:14:54.240 --> 0:14:56.920 I think that's just a sense of the enthusiasm for 0:14:57.040 --> 0:15:00.360 the idea and then the understanding that there's a practice 0:15:00.360 --> 0:15:02.920 that has to go with it to make it live right. 0:15:03.040 --> 0:15:05.440 So the companies, a lot of companies I lived through 0:15:05.440 --> 0:15:07.400 the dot com boom. A lot of companies had great 0:15:07.440 --> 0:15:11.160 ideas and high valuations, and then of course only a 0:15:11.320 --> 0:15:14.280 handful of those ideas were really lasting. And so I'm 0:15:14.640 --> 0:15:17.040 I think there's just a normal amount of run ups 0:15:17.120 --> 0:15:19.840 and come downs that go on in tech. But the 0:15:19.960 --> 0:15:23.800 fundamental idea of tech is it continues to grow through that. 0:15:24.240 --> 0:15:26.560 What is the reason why you have such a concentration 0:15:26.560 --> 0:15:28.200 of tech in your district. I mean, we tend to 0:15:28.200 --> 0:15:30.280 think on Silicon Valley as being close to Stanford and 0:15:30.560 --> 0:15:34.080 Berkeley and some universities. Is it the educational system there, 0:15:34.240 --> 0:15:36.400 is it some other factors? Just critical mass. 0:15:36.920 --> 0:15:38.680 I think there is a bit of critical mass, and 0:15:38.680 --> 0:15:41.000 there's a number of research studies that say, you know, 0:15:41.040 --> 0:15:43.720 these network effects are large. So one of the things 0:15:43.760 --> 0:15:46.560 we've seen is, and you see this anywhere in the country, 0:15:46.600 --> 0:15:49.400 really is that people might start in Silicon Valley, they 0:15:49.480 --> 0:15:52.120 might start in Austin, Texas, they might start in Boston, 0:15:52.280 --> 0:15:54.600 but then they move, you know, family things take them 0:15:54.640 --> 0:15:57.320 other places that we have a lot of lovely states 0:15:57.360 --> 0:16:00.280 to live in. So people go other places and then 0:16:00.400 --> 0:16:03.800 they build those tech centers around them because they have 0:16:03.880 --> 0:16:06.920 the expertise, and you certainly that's what happened in Salt 0:16:06.960 --> 0:16:10.840 Lake City. It's a tremendously desirable place to live. People 0:16:10.920 --> 0:16:14.600 moved from California oftentimes worked with the population, very well 0:16:14.760 --> 0:16:19.320 educated population, very enthusiastic population, and so they took this 0:16:19.480 --> 0:16:21.680 up and you see this forming. And I think there's 0:16:21.720 --> 0:16:25.960 a natural progression of any kind of an industry. But 0:16:26.000 --> 0:16:28.520 there is a great enthusiasm in the West for tech. 0:16:28.760 --> 0:16:31.560 And it's not just in California the coastal states. I 0:16:31.600 --> 0:16:34.880 always remind people that the twelfth district has the inter 0:16:34.960 --> 0:16:39.440 Mountain States, Nevada, Utah, Idaho, Arizona. Those states are equally 0:16:39.560 --> 0:16:43.720 enthusiastic about tech. I was visiting UNLV University of Nevada, 0:16:43.800 --> 0:16:46.720 Las Vegas, and they have a big, vergeoning tech center 0:16:46.880 --> 0:16:50.280 and entrepreneurship in tech, and it just reminds us that 0:16:50.760 --> 0:16:54.200 so many good ideas are taking place and so many 0:16:54.240 --> 0:16:56.640 people want to work in that space, that it can 0:16:56.680 --> 0:17:00.160 be anywhere in the United States, not just Silicon Valley or. 0:17:00.320 --> 0:17:03.080 Another area that's really prominent in your district, and that 0:17:03.080 --> 0:17:05.200 it is commercial real estate, which has gone through a 0:17:05.240 --> 0:17:07.359 bit of a tough time, at least parts of it have, 0:17:07.880 --> 0:17:10.240 and part because of the increase in the interest rates 0:17:10.320 --> 0:17:12.359 give us your sense about work. Commercial real estate is 0:17:12.359 --> 0:17:13.399 in your district today. 0:17:13.720 --> 0:17:16.440 So one thing that you learn quickly in the twelfth District, 0:17:16.520 --> 0:17:18.479 and i'd say other places in the country, is that 0:17:18.640 --> 0:17:21.000 commercial real estate's a big name for a lot of 0:17:21.040 --> 0:17:24.280 different segments. So if you're an industrial and warehousing space, 0:17:24.760 --> 0:17:27.560 you're feeling very good about things right now. If you're 0:17:27.600 --> 0:17:31.520 in retail space or even multi family housing out in 0:17:31.600 --> 0:17:36.080 suburban areas, then you're feeling really good. You're confident. The 0:17:36.200 --> 0:17:40.320 place where you're seeing weakness and everybody knows it is 0:17:40.400 --> 0:17:45.400 in the urban cores of particularly cities like Seattle, Portland, 0:17:45.520 --> 0:17:47.840 San Francisco. LA is doing a little bit better, but 0:17:47.920 --> 0:17:50.200 you can find pockets of this in LA and that 0:17:50.240 --> 0:17:51.639 has to do with the fact that a lot of 0:17:51.640 --> 0:17:54.360 people are still working from home in those communities. Those 0:17:54.440 --> 0:17:57.600 big office complexes that were built up for those individuals 0:17:57.680 --> 0:18:01.399 to work in, they just aren't They're not filled, and 0:18:01.440 --> 0:18:04.159 so there will be a repricing and a resettlement. The 0:18:04.760 --> 0:18:07.159 thing is, we've known it's coming for a while, and 0:18:07.240 --> 0:18:11.359 I see private equity money, venture money sitting on the 0:18:11.400 --> 0:18:14.120 sidelines ready to come in when the price is right. 0:18:14.359 --> 0:18:18.320 So there'll be some repricing, there'll be some loss of valuations, 0:18:18.359 --> 0:18:22.240 for sure, but it doesn't seem today to be the 0:18:22.320 --> 0:18:25.560 kind of disorderly adjustment that you would worry about. It's 0:18:25.560 --> 0:18:28.000 something that is more orderly. Even though it might be 0:18:28.440 --> 0:18:32.159 certainly going to be painful for those involved, it's as 0:18:32.320 --> 0:18:35.520 likely to be as disruptive. So even though I'm saying 0:18:35.560 --> 0:18:37.159 all of that, it's something we have to keep our 0:18:37.200 --> 0:18:40.800 eyes sharply focused on. So it's a primary area where 0:18:40.840 --> 0:18:43.399 I am spend a lot of time talking to people 0:18:43.440 --> 0:18:46.440 about it to see how are people feeling. But today 0:18:46.680 --> 0:18:48.880 they feel a little more positive than they did back 0:18:48.920 --> 0:18:52.520 in November October when the ten year had gone up 0:18:53.119 --> 0:18:53.800 close to five. 0:18:54.440 --> 0:18:57.639 That was Mary Daily, president of the San Francisco Federal Reserve. 0:18:58.320 --> 0:19:00.320 We've spent a good part of the year so far 0:19:00.560 --> 0:19:03.160 with presidential candidates talking about what to do about too 0:19:03.200 --> 0:19:05.720 many people coming across the border between Mexico and the 0:19:05.800 --> 0:19:09.639 United States. But Neil Ferguson says we're overlooking the much 0:19:09.800 --> 0:19:13.280 longer and more disturbing trend, the decline in birth rates 0:19:13.320 --> 0:19:16.280 through much of the world that threatens economic growth by 0:19:16.280 --> 0:19:19.120 giving us too few workers. We talked with them about 0:19:19.119 --> 0:19:21.320 how big a problem it is and what could be 0:19:21.400 --> 0:19:22.000 done about it. 0:19:22.560 --> 0:19:25.399 Well, David, when you and I were young, the world 0:19:25.560 --> 0:19:28.720 worried about a population bomb. There was going to be 0:19:28.760 --> 0:19:33.320 a Malthusian crisis, named after the great eighteenth century political 0:19:33.320 --> 0:19:39.119 economist Thomas Malthus, where overpopulation would lead to famine and disaster. 0:19:39.280 --> 0:19:42.000 And it was those ideas back in the sixties and 0:19:42.040 --> 0:19:45.399 seventies that led to some pretty drastic population policies, not 0:19:45.520 --> 0:19:49.000 least the one child policy in China. Well, fast forward 0:19:49.040 --> 0:19:51.639 to the twenty twenties and it turns out that the 0:19:51.720 --> 0:19:55.960 law of unintended consequences has struck again, and we now 0:19:56.040 --> 0:20:01.359 are facing significant population declines, not only in Asian countries 0:20:01.400 --> 0:20:05.280 that drastically reduced family size, but right across the globe 0:20:05.440 --> 0:20:09.400 except in Africa. And it looks as if, although you 0:20:09.440 --> 0:20:13.919 can debate the exact timing, humanity will peak in the 0:20:14.000 --> 0:20:18.399 twenty sixties, will get to the maximum population, probably some 0:20:18.600 --> 0:20:22.360 way before below the ten billion mark, and after that 0:20:23.080 --> 0:20:27.679 population is going to decline and decline pretty steeply. This 0:20:27.800 --> 0:20:30.160 is most easy to illustrate with the case of China, 0:20:30.200 --> 0:20:34.320 where the population is forecast to decline by half by 0:20:34.359 --> 0:20:36.760