1 00:00:02,600 --> 00:00:12,960 Speaker 1: Yea. Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene 2 00:00:13,480 --> 00:00:17,560 Speaker 1: Jay Lee. We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,520 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:31,120 Speaker 1: Bloomberg dot Com, and of course, on the Bloomberg So 5 00:00:31,240 --> 00:00:34,400 Speaker 1: another tweet, another takedown of the Federal Reserve, the President 6 00:00:34,520 --> 00:00:36,720 Speaker 1: saying if the Fed had done its job properly, which 7 00:00:36,760 --> 00:00:38,599 Speaker 1: it has not, the stock market would have been up 8 00:00:38,600 --> 00:00:43,320 Speaker 1: five thousand to ten thousand. Additional points quanditative tightening was 9 00:00:43,360 --> 00:00:46,760 Speaker 1: a killer. We should have done the exact opposite. To 10 00:00:46,760 --> 00:00:48,920 Speaker 1: weigh in a man that doesn't need much of an introduction, 11 00:00:48,960 --> 00:00:53,080 Speaker 1: it's Ian Brama, Eurasia Group President, and great to see you. 12 00:00:53,320 --> 00:00:56,000 Speaker 1: Let's just talk about the independence of the Federal Reserve 13 00:00:56,400 --> 00:00:59,240 Speaker 1: and to what extent that's being damaged at the moment um. 14 00:00:59,280 --> 00:01:03,640 Speaker 1: There's no question that Trump's tweets are undermining the way 15 00:01:03,680 --> 00:01:09,280 Speaker 1: we think about the FED. But J. Powell is very 16 00:01:09,360 --> 00:01:15,240 Speaker 1: much a capable, qualified and independent chief and that that's 17 00:01:15,240 --> 00:01:19,160 Speaker 1: certainly nobody is making the argument that his decisions have 18 00:01:19,240 --> 00:01:22,880 Speaker 1: been undermined or politically skewed by Trump. I think the 19 00:01:22,920 --> 00:01:26,600 Speaker 1: bigger question has been the recent move by Trump to 20 00:01:26,720 --> 00:01:30,520 Speaker 1: push Steven Moore and Herman Kaine as FED board members. 21 00:01:30,680 --> 00:01:34,640 Speaker 1: I mean, these are Stephen Moore's economic capabilities make AOC 22 00:01:34,880 --> 00:01:37,960 Speaker 1: look like a strong economist, right, so you would this 23 00:01:37,959 --> 00:01:39,920 Speaker 1: This isn't that. I mean, I'm a political scientist, and 24 00:01:40,040 --> 00:01:42,160 Speaker 1: I it's pretty clear to me that these are not 25 00:01:42,240 --> 00:01:44,920 Speaker 1: people you want on the board. But um, but I 26 00:01:44,959 --> 00:01:48,600 Speaker 1: do think that if Trump were to win in UH 27 00:01:48,680 --> 00:01:50,960 Speaker 1: and he decides to get rid of J. Powell at 28 00:01:51,000 --> 00:01:54,080 Speaker 1: that point, which you know has not that that's not 29 00:01:54,160 --> 00:01:57,680 Speaker 1: really been tested UM in UH as like so many 30 00:01:57,680 --> 00:01:59,760 Speaker 1: things in the true administration, then I think we could 31 00:01:59,760 --> 00:02:01,560 Speaker 1: be in a different conversation. Let's talk about how generable 32 00:02:01,600 --> 00:02:04,240 Speaker 1: the institution is. Do you think it is likely even possible, 33 00:02:04,400 --> 00:02:06,240 Speaker 1: for that matter, to the president can't get rid of 34 00:02:06,240 --> 00:02:09,600 Speaker 1: the chaman of the Federal Reserve. I think it's possible 35 00:02:10,240 --> 00:02:13,880 Speaker 1: at after four years, I do UH, And I think 36 00:02:13,880 --> 00:02:17,120 Speaker 1: that there would be difficult to UH with republic if 37 00:02:17,120 --> 00:02:20,360 Speaker 1: Republicans are also um, you know, sort of a majority 38 00:02:20,400 --> 00:02:22,919 Speaker 1: at that point in Senate, and certainly Trump wins, you 39 00:02:23,000 --> 00:02:25,320 Speaker 1: think that would be the case. It's hard to see 40 00:02:25,360 --> 00:02:29,480 Speaker 1: a lot of yelling and screaming about it. I had 41 00:02:29,520 --> 00:02:31,600 Speaker 1: to find a blue button. The blue button is for 42 00:02:31,680 --> 00:02:38,240 Speaker 1: Chelsea Blue. It's good, it's um Ian, okay, fed independence 43 00:02:38,360 --> 00:02:43,000 Speaker 1: and all that. But it's within an international architecture. Right now, 44 00:02:43,000 --> 00:02:46,240 Speaker 1: what John and I here interview to interview is the 45 00:02:46,320 --> 00:02:51,480 Speaker 1: separateness of domestic economies versus all the international back and forth. 46 00:02:51,880 --> 00:02:55,120 Speaker 1: Do you buy that separateness or is that just a 47 00:02:55,200 --> 00:02:57,480 Speaker 1: thing of the moment we should bundle it all together. 48 00:02:57,840 --> 00:03:00,480 Speaker 1: I mean, look, you look at the ECB and you 49 00:03:00,560 --> 00:03:04,359 Speaker 1: see a process that is actually not being politicized, even 50 00:03:04,400 --> 00:03:06,880 Speaker 1: though many people said it would. It actually is, you know, 51 00:03:06,919 --> 00:03:12,680 Speaker 1: being handled by bureaucratic UH coalition to put to ensure 52 00:03:12,760 --> 00:03:16,000 Speaker 1: that you have a new technocratic head um. You know 53 00:03:16,000 --> 00:03:20,960 Speaker 1: that this the Chinese are not moving towards um a 54 00:03:20,960 --> 00:03:24,160 Speaker 1: a floatable currency, and so you don't think of the 55 00:03:24,160 --> 00:03:28,720 Speaker 1: p boc UM as being one of the important central 56 00:03:28,760 --> 00:03:34,639 Speaker 1: banks in how the world manages flows of currencies. I mean, 57 00:03:34,880 --> 00:03:37,320 Speaker 1: if you look at all of the ways that the 58 00:03:37,440 --> 00:03:40,640 Speaker 1: geo political order has been fragmenting in the last twenty 59 00:03:40,680 --> 00:03:44,560 Speaker 1: five years, central banks have not been one of them. 60 00:03:44,600 --> 00:03:46,960 Speaker 1: That's actually one of the places where you would say, 61 00:03:47,000 --> 00:03:51,000 Speaker 1: the world looks more like the old American lead order 62 00:03:51,160 --> 00:03:55,520 Speaker 1: than in any other area. I mean, the central banks 63 00:03:55,520 --> 00:03:58,600 Speaker 1: are there, but the arch question for listeners is as 64 00:03:58,680 --> 00:04:01,320 Speaker 1: Chairman Paul Central Bank or of the world. And you know, 65 00:04:01,360 --> 00:04:02,960 Speaker 1: you look at the I m F meetings, which have 66 00:04:03,040 --> 00:04:06,600 Speaker 1: devolved from multilateralism down to whatever Mr Trump would like 67 00:04:07,040 --> 00:04:10,400 Speaker 1: his Mr Powell's act changed because of it? Is he 68 00:04:10,800 --> 00:04:14,360 Speaker 1: is he less multilateral than he used to be? Um, yeah, 69 00:04:14,400 --> 00:04:16,960 Speaker 1: I guess I would say no. I think that Trump 70 00:04:17,000 --> 00:04:21,000 Speaker 1: doesn't impact Powell very much. What what is true is 71 00:04:21,040 --> 00:04:25,400 Speaker 1: that the United States is more relevant economically compared to 72 00:04:25,440 --> 00:04:28,839 Speaker 1: the Europeans, right, and the fact that the Europeans feel 73 00:04:28,880 --> 00:04:31,960 Speaker 1: and disarray, the fact that the UK is neither in 74 00:04:32,080 --> 00:04:34,360 Speaker 1: nor out, the fact that the Germans and French are 75 00:04:34,440 --> 00:04:37,960 Speaker 1: weaker than they were in our part of the world. 76 00:04:38,240 --> 00:04:40,880 Speaker 1: The United States is increasingly the quote unquote rules set. 77 00:04:41,040 --> 00:04:44,800 Speaker 1: And what stunning John is the dollar range is now 78 00:04:44,960 --> 00:04:48,120 Speaker 1: a four year range, which I didn't realize till this morning. 79 00:04:48,120 --> 00:04:50,720 Speaker 1: I thought it was two three years b d d 80 00:04:51,040 --> 00:04:53,760 Speaker 1: d x Y. The Bloomberg Dollar Index has been churning 81 00:04:54,320 --> 00:04:57,599 Speaker 1: for four years after that big jump up. I mean, 82 00:04:57,720 --> 00:05:01,479 Speaker 1: I mean to to Mr Trump tweet, I mean, we 83 00:05:01,520 --> 00:05:04,000 Speaker 1: haven't seen dollars. Are you expecting the presidents go after 84 00:05:04,040 --> 00:05:06,240 Speaker 1: the effects market again? Is that what you know? I'm 85 00:05:06,279 --> 00:05:09,240 Speaker 1: just saying that that usually with the comments did you 86 00:05:09,279 --> 00:05:11,640 Speaker 1: give from President Trump in the last forty eight hours, 87 00:05:11,960 --> 00:05:14,600 Speaker 1: you'd want to see a substantial dollar strength there. And 88 00:05:14,800 --> 00:05:16,960 Speaker 1: let's talk about what actually is happening. I mean, the 89 00:05:16,960 --> 00:05:19,719 Speaker 1: perception of independence hasn't been damaged because the perception of 90 00:05:19,760 --> 00:05:22,240 Speaker 1: independence will be defined by our guests, not by us 91 00:05:22,240 --> 00:05:24,719 Speaker 1: sitting around this table. It's market participants. Do they think 92 00:05:24,800 --> 00:05:27,039 Speaker 1: something has changed at the fat? I don't see that 93 00:05:27,080 --> 00:05:29,200 Speaker 1: in the market that now that's not in the price. 94 00:05:29,400 --> 00:05:31,479 Speaker 1: They don't, and they don't for a range of reasons. 95 00:05:31,520 --> 00:05:33,400 Speaker 1: One of them is that they don't think. Some of 96 00:05:33,440 --> 00:05:37,200 Speaker 1: them don't think that these individuals that have been nominated recently, 97 00:05:37,520 --> 00:05:40,320 Speaker 1: A will officially be nominated in the first place, B 98 00:05:40,800 --> 00:05:43,640 Speaker 1: will actually be confirmed, and see if they are confirmed, 99 00:05:43,680 --> 00:05:45,960 Speaker 1: will have much influence on the f O m c 100 00:05:46,400 --> 00:05:48,760 Speaker 1: in and all those three things play into this. One 101 00:05:48,800 --> 00:05:52,360 Speaker 1: thing has changed? What changes that the American economy feels 102 00:05:52,360 --> 00:05:54,520 Speaker 1: softer now than it did six months ago, and as 103 00:05:54,800 --> 00:05:57,600 Speaker 1: even though the unemployment numbers are very low. Job creations good, 104 00:05:57,600 --> 00:06:00,080 Speaker 1: but people are not as excited about the growth, and 105 00:06:00,279 --> 00:06:02,640 Speaker 1: that means Trump needs to look for people to blame, 106 00:06:03,200 --> 00:06:06,920 Speaker 1: and the FED is one of many, but one of 107 00:06:07,480 --> 00:06:10,560 Speaker 1: one of his primary targets right now, and that's going 108 00:06:10,560 --> 00:06:12,280 Speaker 1: to continue to be the case as long as the 109 00:06:12,360 --> 00:06:14,400 Speaker 1: U s economy looks soft as we get into the 110 00:06:14,400 --> 00:06:18,359 Speaker 1: election cycle, that's only going to become more urgent for Trump. 111 00:06:18,720 --> 00:06:21,080 Speaker 1: I don't think that changes the way market participants think 112 00:06:21,080 --> 00:06:23,080 Speaker 1: about the FED. And let's wrap up this conversation by 113 00:06:23,080 --> 00:06:25,560 Speaker 1: talking about a concept you introduced a long time ago, 114 00:06:25,720 --> 00:06:29,960 Speaker 1: the Jacob the robustness of institutions, the openness of developed markets, 115 00:06:30,320 --> 00:06:33,520 Speaker 1: and the reason why we're successful relative to the complete opposite. 116 00:06:33,800 --> 00:06:37,320 Speaker 1: Updateus on that thinking now so here it's a very 117 00:06:37,320 --> 00:06:39,560 Speaker 1: different conversation the one we've just had on the FED, 118 00:06:39,880 --> 00:06:43,560 Speaker 1: which is that most institutions in the West have gotten 119 00:06:43,640 --> 00:06:47,719 Speaker 1: gradually weaker less stable over the course of the last 120 00:06:47,880 --> 00:06:50,840 Speaker 1: couple of decades. That means that the United States, which 121 00:06:50,960 --> 00:06:54,200 Speaker 1: used to be very stable because it's very open, is 122 00:06:54,240 --> 00:06:57,200 Speaker 1: becoming a little bit more fragmented, a little bit more closed, 123 00:06:57,400 --> 00:07:00,520 Speaker 1: and a little bit less stable. Other kind trees like 124 00:07:00,640 --> 00:07:04,440 Speaker 1: France with their uh, you know, yellow vest movement um 125 00:07:04,480 --> 00:07:08,280 Speaker 1: and Macron looking very weak. They've they've slipped even farther 126 00:07:08,560 --> 00:07:11,600 Speaker 1: down the Jacob The countries that haven't slipped much at 127 00:07:11,640 --> 00:07:15,480 Speaker 1: all would be Germany and perhaps the least would be Japan. 128 00:07:15,560 --> 00:07:19,520 Speaker 1: But across all of the advanced industrial democracies, the trend 129 00:07:19,600 --> 00:07:22,720 Speaker 1: has been these political institutions are becoming a little more 130 00:07:22,760 --> 00:07:25,120 Speaker 1: closed and a little bit less stable. If you were 131 00:07:25,160 --> 00:07:27,960 Speaker 1: to rewrite the book right now, what the first couple 132 00:07:28,000 --> 00:07:31,160 Speaker 1: of pies read like. The first couple of pages would 133 00:07:31,560 --> 00:07:35,120 Speaker 1: talk about a j that looks a little bit more 134 00:07:35,200 --> 00:07:38,160 Speaker 1: like a you. In other words, there's a little bit 135 00:07:38,280 --> 00:07:43,320 Speaker 1: less advantage to being an open advanced industrial democracy today 136 00:07:44,080 --> 00:07:46,520 Speaker 1: then there was twenty years ago. And one of the 137 00:07:46,520 --> 00:07:49,840 Speaker 1: big reasons for that is technology. When I wrote the book, 138 00:07:50,320 --> 00:07:54,920 Speaker 1: technology was a trend that undermined authoritarian regimes. It led 139 00:07:54,960 --> 00:07:58,600 Speaker 1: to colored revolutions in the Arab Spring, and its strengthened 140 00:07:58,680 --> 00:08:02,040 Speaker 1: liberal democracies. Today, when we talk about the data revolution 141 00:08:02,040 --> 00:08:07,040 Speaker 1: and surveillance, it pushes towards supporting those authoritarian regimes that 142 00:08:07,040 --> 00:08:09,520 Speaker 1: have control of that data can do the surveillance, and 143 00:08:09,520 --> 00:08:13,720 Speaker 1: that undermines and fragments some of the advanced industrial democracy. 144 00:08:13,920 --> 00:08:16,240 Speaker 1: So what John suggested, here's your next book is an 145 00:08:16,320 --> 00:08:22,320 Speaker 1: update on Jake Curf. Now he's not suggested dr require 146 00:08:22,440 --> 00:08:25,560 Speaker 1: an update years out. There's no question and thank you 147 00:08:26,200 --> 00:08:28,760 Speaker 1: with you guys, he writes a great present and that 148 00:08:43,040 --> 00:08:45,480 Speaker 1: global Wall Street Chat of the day. We can do 149 00:08:45,520 --> 00:08:48,760 Speaker 1: that with Fred Cannon of Keith Brietton Woods where he 150 00:08:48,840 --> 00:08:51,720 Speaker 1: runs the research shop as well. John and I have 151 00:08:51,800 --> 00:08:54,440 Speaker 1: like two hours of conversation where it's gonna squeeze into 152 00:08:54,480 --> 00:08:58,160 Speaker 1: six minutes. Here Fred Cannon wins. The bank roll up happened. 153 00:08:58,200 --> 00:09:01,600 Speaker 1: I mean, not that we're going to canadaize American banking. 154 00:09:01,640 --> 00:09:04,160 Speaker 1: We saw the sun Trust merger. When's the roll up 155 00:09:04,280 --> 00:09:08,400 Speaker 1: really begin with the vengeance that scale begins. It really 156 00:09:08,400 --> 00:09:09,920 Speaker 1: it's already there, Tom, I mean, if you look at 157 00:09:10,000 --> 00:09:12,719 Speaker 1: what happened during the financial crisis, that was the roll 158 00:09:12,800 --> 00:09:15,760 Speaker 1: up the biggest four banks in the US control of 159 00:09:15,800 --> 00:09:19,000 Speaker 1: the you know, the market. Today beyond that, we are 160 00:09:19,040 --> 00:09:20,840 Speaker 1: seeing some roll up and we'll continue to see that. 161 00:09:20,880 --> 00:09:23,520 Speaker 1: The bb and T sun Trust deal maybe the biggest 162 00:09:23,520 --> 00:09:26,360 Speaker 1: deal we will have in this cycle, but there'll be 163 00:09:26,400 --> 00:09:28,839 Speaker 1: a lot of deals underneath that size. We're starting to 164 00:09:28,880 --> 00:09:30,319 Speaker 1: see m o E s. We're starting to see a 165 00:09:30,360 --> 00:09:37,720 Speaker 1: lot of these. First of all, I haven't been this 166 00:09:37,760 --> 00:09:39,520 Speaker 1: industry for a long time. We have to know there's 167 00:09:39,559 --> 00:09:42,200 Speaker 1: no such thing as a merger of equals. But yet 168 00:09:42,240 --> 00:09:46,040 Speaker 1: the structure of putting two banks of equal size together 169 00:09:46,559 --> 00:09:50,560 Speaker 1: um is one that is increasingly folks are looking at 170 00:09:50,600 --> 00:09:52,679 Speaker 1: it as a way to consolidate the industry. So when 171 00:09:52,840 --> 00:09:56,040 Speaker 1: when When? When m o E was the discussed yesterday 172 00:09:56,080 --> 00:09:59,160 Speaker 1: at home? That's what that meant. We've talked about your 173 00:09:59,200 --> 00:10:04,880 Speaker 1: marriage merger equals? Was it a merger rarely found in 174 00:10:04,920 --> 00:10:08,720 Speaker 1: the wild? Continue with Mr kim freend Earnings. Gorman sacks 175 00:10:08,720 --> 00:10:10,920 Speaker 1: out in about ten minutes time. A little bit after that, 176 00:10:10,920 --> 00:10:12,959 Speaker 1: we're gonna get City as well. We had JP Morgan 177 00:10:12,960 --> 00:10:16,599 Speaker 1: on Friday, where you're laser focused. Uh, well, look, I 178 00:10:16,640 --> 00:10:18,839 Speaker 1: think on the capital market side, I think we're just 179 00:10:18,840 --> 00:10:21,600 Speaker 1: going to see beating low expectations coming into the quarter. 180 00:10:21,640 --> 00:10:25,080 Speaker 1: Everybody cut their estimates. We saw out of JP Morgan 181 00:10:25,120 --> 00:10:28,720 Speaker 1: on Friday beating those reduced expectations. Still not a great quarter. 182 00:10:28,880 --> 00:10:31,880 Speaker 1: I think where we're really focused beyond that, especially on City, 183 00:10:31,960 --> 00:10:34,840 Speaker 1: is net interest margins. What's really happening because of this 184 00:10:34,960 --> 00:10:38,880 Speaker 1: yield curve. That's kind of the dynamics that everybody's fascinated on. 185 00:10:38,920 --> 00:10:42,080 Speaker 1: And when will when will we see net interest margins 186 00:10:42,160 --> 00:10:44,000 Speaker 1: roll over at the bank. There's been an obsession with 187 00:10:44,040 --> 00:10:46,400 Speaker 1: the yield curve. But the yield curve has been narrowing 188 00:10:46,440 --> 00:10:48,520 Speaker 1: flattening over the last couple of years, and net interest 189 00:10:48,520 --> 00:10:50,560 Speaker 1: margins have been expanding. It's not actually been a good 190 00:10:50,600 --> 00:10:53,760 Speaker 1: read on bank profitability. What has been is the trajectory 191 00:10:53,760 --> 00:10:57,120 Speaker 1: of interest rates. Interest rates go higher, income has been 192 00:10:57,160 --> 00:10:59,720 Speaker 1: going north. And now we have this situation with the 193 00:10:59,720 --> 00:11:03,360 Speaker 1: Federal Reserve where interest rates aren't coming higher anymore, at 194 00:11:03,400 --> 00:11:04,959 Speaker 1: least for the time being. So I'm wondering where the 195 00:11:04,960 --> 00:11:07,959 Speaker 1: growth comes from. Where does it come from? Well, you're 196 00:11:07,960 --> 00:11:10,160 Speaker 1: exactly right. The real growth is coming at the big 197 00:11:10,160 --> 00:11:14,560 Speaker 1: banks from sherry purchase. We calculate sixty of the growth 198 00:11:14,640 --> 00:11:16,600 Speaker 1: in earnings this year is going to come from sherry 199 00:11:16,600 --> 00:11:22,280 Speaker 1: purchase at the banks. Well, well, an American, I don't, 200 00:11:22,360 --> 00:11:24,960 Speaker 1: I mean? I remember Dick Kovasovitch at Wells Fargo called 201 00:11:25,000 --> 00:11:27,720 Speaker 1: to sign a defeat to repurchase shares. In other words, 202 00:11:27,760 --> 00:11:30,240 Speaker 1: you can't find something mentioned the break. It's more like 203 00:11:30,280 --> 00:11:32,719 Speaker 1: a utility. We got cash, give it back when it 204 00:11:32,800 --> 00:11:35,640 Speaker 1: raises an important question. The lot a lot of people 205 00:11:35,679 --> 00:11:37,800 Speaker 1: who are bullish the banks aren't bullish on the earnings. 206 00:11:37,800 --> 00:11:40,080 Speaker 1: They're bullish on the multiple. They think the multiple will 207 00:11:40,080 --> 00:11:42,439 Speaker 1: re rate higher. But if the earnings are going to 208 00:11:42,480 --> 00:11:45,600 Speaker 1: be juiced by what some people would call financial engineering, 209 00:11:45,679 --> 00:11:48,280 Speaker 1: let's just call it capital returns, Fred, it's going to 210 00:11:48,360 --> 00:11:52,000 Speaker 1: be juiced by that, is it deserving a higher multiple? Well, 211 00:11:52,160 --> 00:11:54,240 Speaker 1: if you look at the multiples today, we're trading a 212 00:11:54,360 --> 00:11:57,120 Speaker 1: late cycle bank earnings multiples. It's happened before, it happened 213 00:11:57,160 --> 00:11:59,800 Speaker 1: in two thousand, happened in two thousand and eight, happened 214 00:11:59,800 --> 00:12:02,400 Speaker 1: in a number of time periods. In other words, why 215 00:12:02,760 --> 00:12:05,520 Speaker 1: our banks training these multiple stay Because expectations are the 216 00:12:05,600 --> 00:12:07,760 Speaker 1: earnings have peaked and that we're going to see a 217 00:12:07,800 --> 00:12:10,760 Speaker 1: downward pressure. That downward pressure is going to come from credit, 218 00:12:11,080 --> 00:12:14,000 Speaker 1: not from interest rates. And that's the concern your bank guys. 219 00:12:14,000 --> 00:12:16,280 Speaker 1: I know, Fred, you're above it all. It's sixty feet. 220 00:12:16,320 --> 00:12:18,840 Speaker 1: But you're banking team at KBW, what do they like 221 00:12:19,000 --> 00:12:21,520 Speaker 1: right now in terms of bi hold sell What quality 222 00:12:21,559 --> 00:12:24,120 Speaker 1: of bank do they like right now? Well? We really 223 00:12:24,120 --> 00:12:26,440 Speaker 1: because of those multiples. We like the high quality banks, 224 00:12:26,720 --> 00:12:28,440 Speaker 1: like the big guys that are way behind. We like 225 00:12:28,480 --> 00:12:30,280 Speaker 1: the big guys that are the quality. I mean, look, 226 00:12:30,320 --> 00:12:32,079 Speaker 1: you have to kind of keep going with JP Morgan. 227 00:12:32,120 --> 00:12:34,240 Speaker 1: At this point in time, BA has turned into a 228 00:12:34,320 --> 00:12:36,520 Speaker 1: quality institution. We wouldn't have said that five or six 229 00:12:36,600 --> 00:12:38,560 Speaker 1: years ago. UM. So you're looking at the at the 230 00:12:38,559 --> 00:12:40,640 Speaker 1: big banks with quality, and then you're looking at this 231 00:12:40,920 --> 00:12:43,120 Speaker 1: at the commercial banks you can continue to grow. Does 232 00:12:43,160 --> 00:12:45,880 Speaker 1: Will's Fargo get their act together? You know, I was 233 00:12:45,920 --> 00:12:47,520 Speaker 1: thinking the other day it was you know, I mean 234 00:12:48,240 --> 00:12:50,840 Speaker 1: five years ago, Wells Fargo was the go to bank 235 00:12:50,880 --> 00:12:53,880 Speaker 1: in the US. Um, it's not today. It took Tiger 236 00:12:53,880 --> 00:12:56,360 Speaker 1: Wood's eleven years to come back. We'll see if it 237 00:12:56,400 --> 00:13:01,439 Speaker 1: takes the Canada with Fred what's the name you're most 238 00:13:01,440 --> 00:13:05,640 Speaker 1: worried about? Uh. In the US, we don't really worry. 239 00:13:05,880 --> 00:13:09,280 Speaker 1: The banks. Balance sheets are strong, the capital strong. We 240 00:13:09,320 --> 00:13:11,880 Speaker 1: don't see a big hiccups. I am worried a bit 241 00:13:11,920 --> 00:13:15,840 Speaker 1: about the kind of expectations that some of these traditional 242 00:13:15,880 --> 00:13:18,800 Speaker 1: savings alone like New York Community Bank are gonna you know, 243 00:13:18,800 --> 00:13:20,839 Speaker 1: their stocks have done very well this year. I think 244 00:13:20,840 --> 00:13:23,079 Speaker 1: that might be a mystery. Hey, Fred great to cant 245 00:13:23,080 --> 00:13:25,760 Speaker 1: Show and wonderful Fred Can in their KBW Global director 246 00:13:26,080 --> 00:13:43,800 Speaker 1: of Research the takeaway over the last hour, I'd say 247 00:13:43,840 --> 00:13:45,959 Speaker 1: Thomas as follows, if you compare it to the estimates 248 00:13:45,960 --> 00:13:48,319 Speaker 1: were okay, if you compare it year on year, it's 249 00:13:48,320 --> 00:13:50,520 Speaker 1: as dreadful as everyone thought it would be. Let's bring 250 00:13:50,559 --> 00:13:53,640 Speaker 1: in Snali Bassex, Showy Bloomberg Banking reporters. She joins us 251 00:13:53,640 --> 00:13:56,680 Speaker 1: in the Interactive Broker studios here in New York City. 252 00:13:56,679 --> 00:13:59,720 Speaker 1: Snale your take please. Sure it's pretty nassy quarter and 253 00:13:59,720 --> 00:14:01,880 Speaker 1: we're gonna be waiting for is what things look like 254 00:14:01,920 --> 00:14:04,880 Speaker 1: going forward for Goldman Sacks. In their presentation so far, 255 00:14:04,920 --> 00:14:07,440 Speaker 1: they've highlighted all the changes they're making, right, So that 256 00:14:07,480 --> 00:14:09,840 Speaker 1: doesn't mean, hey, you know, look at how great we 257 00:14:09,880 --> 00:14:12,199 Speaker 1: did in mergers. For example, it's hey, look at our 258 00:14:12,280 --> 00:14:15,640 Speaker 1: Apple partnership and let's see where that's going. And so 259 00:14:15,840 --> 00:14:18,319 Speaker 1: you know, people are going to be wondering whether they 260 00:14:18,320 --> 00:14:20,080 Speaker 1: were blaming the government shutdown for a lot of the 261 00:14:20,120 --> 00:14:22,920 Speaker 1: week performance in the first quarter. But there's some places 262 00:14:22,920 --> 00:14:26,120 Speaker 1: that there's some real questions. Yeah, John, you nailed it 263 00:14:26,280 --> 00:14:30,440 Speaker 1: twenty minutes ago by saying revenues are constrained. What I 264 00:14:30,480 --> 00:14:33,200 Speaker 1: see throughout the first six pages of their power point 265 00:14:33,720 --> 00:14:37,480 Speaker 1: is low single digit revenue growth in different subsets. There 266 00:14:37,480 --> 00:14:40,360 Speaker 1: are some video syncrening reasons why revenues were constrained in 267 00:14:40,440 --> 00:14:43,640 Speaker 1: the first quarter, specifically the government shut down holding back 268 00:14:43,760 --> 00:14:46,320 Speaker 1: I P oceanale. Let's talk about where we will be 269 00:14:46,400 --> 00:14:48,720 Speaker 1: less constraint in the next few months. Is that a 270 00:14:48,760 --> 00:14:51,040 Speaker 1: pocket an area where they will be I POS is 271 00:14:51,040 --> 00:14:53,360 Speaker 1: a great thing to bring up because Goldman saxes on slack. 272 00:14:53,440 --> 00:14:55,920 Speaker 1: JP Morgan was on lift. There's uber around the corners. 273 00:14:55,920 --> 00:14:58,280 Speaker 1: So I P o f S should jump back quite today. 274 00:14:58,520 --> 00:15:00,920 Speaker 1: What do they move the needle on banks? That big? 275 00:15:00,960 --> 00:15:04,880 Speaker 1: Come on? You know that's the thing, no right to 276 00:15:04,880 --> 00:15:07,440 Speaker 1: talk about. It's great, cut'll talk. But we're at a 277 00:15:07,440 --> 00:15:09,360 Speaker 1: point in the banking cycle where we're looking at every 278 00:15:09,360 --> 00:15:14,600 Speaker 1: business line very aggressively and seeing for any signs of strength. 279 00:15:14,640 --> 00:15:17,800 Speaker 1: And you know that's exactly a place where buried at 280 00:15:17,800 --> 00:15:20,480 Speaker 1: the last page conclusions, buried at the second of the 281 00:15:20,560 --> 00:15:24,680 Speaker 1: last line, while maintaining expense discipline. Do you ever even 282 00:15:24,720 --> 00:15:27,360 Speaker 1: come out It's April now we're in the summer ballet. 283 00:15:27,600 --> 00:15:29,360 Speaker 1: How many bodies are going to walk out the door 284 00:15:29,600 --> 00:15:33,840 Speaker 1: vary since Sundry hundreds everywhere in very many decisions, in 285 00:15:34,040 --> 00:15:37,000 Speaker 1: very many divisions. Another place that nobody really talked about 286 00:15:37,000 --> 00:15:39,560 Speaker 1: this morning is investment management. Goldman also has one of 287 00:15:39,600 --> 00:15:42,720 Speaker 1: the biggest asset managers. About that, did you talk about it? 288 00:15:42,800 --> 00:15:48,360 Speaker 1: We talked about seconds. Seconds. Well, it looked at it. It 289 00:15:48,280 --> 00:15:50,640 Speaker 1: It was really interesting. They bought in more assets, but 290 00:15:50,680 --> 00:15:53,120 Speaker 1: they took in lower fees, which shows you even for 291 00:15:53,200 --> 00:15:55,440 Speaker 1: Goldman Sacks, it's a race to the bottom and asset 292 00:15:55,480 --> 00:15:58,240 Speaker 1: management when you're just taking in lower fees. And JP 293 00:15:58,320 --> 00:16:01,680 Speaker 1: Morgan already said they're cutting staff in that division as well, 294 00:16:01,720 --> 00:16:04,240 Speaker 1: and both of those divisions are over a trillion dollars 295 00:16:04,440 --> 00:16:06,600 Speaker 1: some of the biggest on all Street City unchanged in 296 00:16:06,640 --> 00:16:08,640 Speaker 1: the pre market dead flat. We had a boost of 297 00:16:08,680 --> 00:16:11,720 Speaker 1: bank stocks on Friday, they read across from from JP Morgan. 298 00:16:11,720 --> 00:16:13,520 Speaker 1: It gave the whole sector a little bit of a 299 00:16:13,560 --> 00:16:16,600 Speaker 1: lift off the back of these earning city doing absolutely nothing. Shinali, 300 00:16:16,640 --> 00:16:19,720 Speaker 1: thank you and happy birthday, Thank you, Thank you very much. 301 00:16:19,720 --> 00:16:33,840 Speaker 1: Snati Bassik there up Bloomberg Banking reporter. It's a good 302 00:16:33,840 --> 00:16:36,280 Speaker 1: time to speak to Diane Swunk. She's with Grant Thornton 303 00:16:36,720 --> 00:16:39,440 Speaker 1: it's just just does your woman's duty for us and 304 00:16:39,680 --> 00:16:43,200 Speaker 1: fed day where she she gives this wonderful perspective on 305 00:16:43,200 --> 00:16:45,160 Speaker 1: the central bank, Dan, I want to go into the 306 00:16:45,240 --> 00:16:50,440 Speaker 1: nitte gritte around the National Association of Business Economists, which 307 00:16:50,480 --> 00:16:53,480 Speaker 1: is all this data we're getting, and then we've got 308 00:16:53,520 --> 00:16:57,360 Speaker 1: this massive divide and what we see from guests. Have 309 00:16:57,440 --> 00:16:59,920 Speaker 1: you ever seen this before? Is this normal that we're 310 00:17:00,040 --> 00:17:03,880 Speaker 1: seeing a mystery on the data and then two disparate 311 00:17:04,000 --> 00:17:07,000 Speaker 1: views on what the central bank will do? You know, 312 00:17:07,119 --> 00:17:09,440 Speaker 1: I think what's going on is one we have seen 313 00:17:09,440 --> 00:17:11,800 Speaker 1: it before. You see it at tipping points in the economy, 314 00:17:11,840 --> 00:17:14,000 Speaker 1: we start to get cross currents. The question is are 315 00:17:14,040 --> 00:17:16,880 Speaker 1: we added tipping point or not. Also, I think it's 316 00:17:16,880 --> 00:17:20,119 Speaker 1: really important to keep perspective out there that you know, 317 00:17:20,280 --> 00:17:23,600 Speaker 1: when you're in a position where the underlying economy is 318 00:17:23,640 --> 00:17:26,560 Speaker 1: doing well but slowing, you always worry about how close 319 00:17:26,560 --> 00:17:29,520 Speaker 1: you're coming to send ice. And so even though it 320 00:17:29,600 --> 00:17:32,840 Speaker 1: looks like the underlying economy is still solid, we worry 321 00:17:32,880 --> 00:17:35,880 Speaker 1: about those soft patches out there, and the subtle reserve 322 00:17:36,359 --> 00:17:39,320 Speaker 1: is hedging the downside risks of going through the ice 323 00:17:39,560 --> 00:17:42,520 Speaker 1: and stepping back to the sidelines, which in and of itself, 324 00:17:42,560 --> 00:17:45,560 Speaker 1: that moved to the sidelines signals that the said may 325 00:17:45,560 --> 00:17:49,439 Speaker 1: be more worried. Well, this is critical. If there's one said, 326 00:17:49,720 --> 00:17:53,400 Speaker 1: if there's one rate cut to come, or let's say 327 00:17:53,400 --> 00:17:57,520 Speaker 1: it's asymmetric to rate cuts rate rises to come, what 328 00:17:57,720 --> 00:18:01,160 Speaker 1: is the distinctive data factor that gets someone to two 329 00:18:01,280 --> 00:18:04,840 Speaker 1: rate rises versus someone looking for one rate cut. You know, 330 00:18:04,880 --> 00:18:07,240 Speaker 1: that's really interesting, I think at this stage of the game, 331 00:18:07,280 --> 00:18:11,240 Speaker 1: because the Fed has so been wrong on inflation. It 332 00:18:11,359 --> 00:18:14,880 Speaker 1: thought we'd get to three wage growth and sustained three 333 00:18:14,880 --> 00:18:17,399 Speaker 1: percent wage growth would give us sustained two percent on 334 00:18:17,440 --> 00:18:21,000 Speaker 1: their target inflation. That has failed. We've fallen short on that. 335 00:18:21,080 --> 00:18:25,600 Speaker 1: After accelerating core inflation has actually decelerated. And so I 336 00:18:25,640 --> 00:18:28,320 Speaker 1: think we need to see not only a sustained two 337 00:18:28,320 --> 00:18:31,080 Speaker 1: percent reach on the target of inflation to get those 338 00:18:31,200 --> 00:18:34,000 Speaker 1: rate hikes out there, but we need to see an 339 00:18:34,040 --> 00:18:36,960 Speaker 1: overshoot on inflation for the FED to feel comfortable that 340 00:18:37,080 --> 00:18:40,200 Speaker 1: they've really achieved their mandate. And their mandate is getting 341 00:18:40,280 --> 00:18:43,600 Speaker 1: much more nuanced as well. Full employment doesn't just mean 342 00:18:43,600 --> 00:18:48,119 Speaker 1: an unemployment rate anymore, as it's been evolving over several years, 343 00:18:48,240 --> 00:18:51,840 Speaker 1: it's all now also now the employment to population share, 344 00:18:51,920 --> 00:18:54,919 Speaker 1: the share of labor income that we're seeing in the economy, 345 00:18:55,119 --> 00:18:57,800 Speaker 1: which is not moved up enough for the FED to 346 00:18:57,840 --> 00:19:01,080 Speaker 1: feel comfortable at this stage. League Matt Bowsley here at 347 00:19:01,080 --> 00:19:03,399 Speaker 1: Bloomberg doing a nice little rite up on that today. 348 00:19:03,680 --> 00:19:05,440 Speaker 1: I suggest a lot of people reach out to Matt, 349 00:19:05,480 --> 00:19:07,160 Speaker 1: if not, just take a read of it. It's really 350 00:19:07,200 --> 00:19:09,760 Speaker 1: interesting in the push I read it to push Dan 351 00:19:09,840 --> 00:19:11,719 Speaker 1: seems to become the push seems to be coming from 352 00:19:11,800 --> 00:19:15,119 Speaker 1: vice share Rich Clarida. So how important is this push 353 00:19:15,160 --> 00:19:17,640 Speaker 1: and how will it shape the federal reserve reaction function 354 00:19:17,760 --> 00:19:19,920 Speaker 1: in the coming way? I think it's it's really important, John, 355 00:19:19,960 --> 00:19:21,639 Speaker 1: And you know the issue is I was you know, 356 00:19:21,800 --> 00:19:24,280 Speaker 1: I have to say that it's evolutionary, that revolutionary, and 357 00:19:24,320 --> 00:19:27,200 Speaker 1: it's not as unique as you know it was pointed 358 00:19:27,240 --> 00:19:28,959 Speaker 1: out in the article, because I know the FED has 359 00:19:28,960 --> 00:19:30,800 Speaker 1: been looking at this issue for a long time as 360 00:19:30,840 --> 00:19:33,640 Speaker 1: of economist for decades, looking at the issue of how 361 00:19:33,800 --> 00:19:36,960 Speaker 1: labor has lost its bargaining power and that's hurting the 362 00:19:37,040 --> 00:19:40,400 Speaker 1: labor share of income. We saw it in Janet Yellen's dashboard. 363 00:19:40,640 --> 00:19:42,560 Speaker 1: So this has been something that FED has been trying 364 00:19:42,560 --> 00:19:44,480 Speaker 1: to incorporate. I think Rich has taken it to a 365 00:19:44,520 --> 00:19:47,440 Speaker 1: new level as Vice Chair of the FED, and really 366 00:19:47,480 --> 00:19:50,440 Speaker 1: we're coming together and we're looking at it quite carefully, 367 00:19:50,440 --> 00:19:53,240 Speaker 1: and how do we incorporate it more into the decision 368 00:19:53,320 --> 00:19:56,440 Speaker 1: rule in understanding where the FED has been wrong on inflation. 369 00:19:56,480 --> 00:19:59,800 Speaker 1: And I think that's a very important move going forward, 370 00:20:00,080 --> 00:20:04,040 Speaker 1: is understanding not just employment, not just these aggregate very 371 00:20:04,040 --> 00:20:07,240 Speaker 1: you know, basic tools of the economy, but getting the 372 00:20:07,280 --> 00:20:09,840 Speaker 1: dirties in the details and Clarita and doing this is 373 00:20:09,880 --> 00:20:13,720 Speaker 1: trying to make the decision much more of a process. 374 00:20:13,760 --> 00:20:16,720 Speaker 1: It's more inclusive, and I think that's very important. Dian, 375 00:20:16,800 --> 00:20:18,040 Speaker 1: just to put you on the spot a little bit, 376 00:20:18,480 --> 00:20:22,400 Speaker 1: is Vice Chair Rich Clarada running the FED right now? 377 00:20:22,400 --> 00:20:24,600 Speaker 1: But we don't want to put you on the spot now. 378 00:20:24,640 --> 00:20:26,000 Speaker 1: You can put me on the spot all you want. No, 379 00:20:26,200 --> 00:20:28,360 Speaker 1: Rich Clarida is not running the FED right now. Jay 380 00:20:28,400 --> 00:20:30,879 Speaker 1: Paulo is running the FED right now, and nor is 381 00:20:30,920 --> 00:20:33,040 Speaker 1: the president running the FED. Jay Paulo is running the 382 00:20:33,040 --> 00:20:35,560 Speaker 1: FED right now. I have no qualms about that whatsoever. 383 00:20:35,840 --> 00:20:38,359 Speaker 1: But this is a really strong Fedal Reserve Board at 384 00:20:38,400 --> 00:20:40,920 Speaker 1: the moment, and I think that really deserves a lot 385 00:20:40,960 --> 00:20:42,920 Speaker 1: of credit. It's not always been as strong of a 386 00:20:43,000 --> 00:20:47,200 Speaker 1: board with his um broad base of opinions in different specialties. 387 00:20:47,440 --> 00:20:50,000 Speaker 1: I think, you know, sort of, this pushback on nominees 388 00:20:50,040 --> 00:20:52,440 Speaker 1: to the FED board is not about elitism. It's about 389 00:20:52,600 --> 00:20:55,600 Speaker 1: having diversity of thought that's informed for the skills of 390 00:20:55,640 --> 00:20:59,080 Speaker 1: the job, knowing regulation. What does that mean for the economy? 391 00:20:59,119 --> 00:21:02,280 Speaker 1: Having experienced in that um knowing, it's you know, when 392 00:21:02,320 --> 00:21:04,600 Speaker 1: I look at the FED boarding day, I really look 393 00:21:04,640 --> 00:21:08,080 Speaker 1: at a board that is well qualified and rich karitas. 394 00:21:08,160 --> 00:21:11,800 Speaker 1: You know, stepping out is really um evidence of that. 395 00:21:11,840 --> 00:21:14,480 Speaker 1: But we've had many strong vice chairman. Janet Ellen was 396 00:21:14,520 --> 00:21:17,359 Speaker 1: a vice chairman, Alice Ryland was a vice chairman, Allen Blinder, 397 00:21:17,720 --> 00:21:21,080 Speaker 1: you know, Roger Ferguson, non economist vice chairman. So the 398 00:21:21,240 --> 00:21:25,119 Speaker 1: strength in the FED board is really critical. Thank you, 399 00:21:25,560 --> 00:21:44,600 Speaker 1: Thank you filts in the chief economists. Over that, let 400 00:21:44,680 --> 00:21:48,720 Speaker 1: us listen to some golf history. Back behind the ball Woods, 401 00:21:50,440 --> 00:21:55,879 Speaker 1: he has done it. Tiger is back, Tiger is back 402 00:21:55,960 --> 00:22:01,919 Speaker 1: on top Tiger Woods, that two thousand night to Master's 403 00:22:02,040 --> 00:22:06,120 Speaker 1: Chapion and there it is. Let us have a real golfer, 404 00:22:06,200 --> 00:22:09,000 Speaker 1: talk to a real sports guy, Paul Sweeney. Why don't 405 00:22:09,000 --> 00:22:12,560 Speaker 1: you being in the extinguished gentleman. Eban no Wi Williams 406 00:22:12,600 --> 00:22:15,600 Speaker 1: covers all things sports for Bloomberg News. He joins us 407 00:22:15,600 --> 00:22:18,720 Speaker 1: in our Bloomberg Interactive Broker studio. So Eban, I gotta 408 00:22:18,840 --> 00:22:22,800 Speaker 1: tell you, I watched every single shot of the tournament yesterday. 409 00:22:22,840 --> 00:22:24,719 Speaker 1: I can't remember the last time I did that. And 410 00:22:24,800 --> 00:22:27,679 Speaker 1: the only reason I did that is because of Tiger Woods. 411 00:22:28,240 --> 00:22:29,879 Speaker 1: How important is he to the game of golf and 412 00:22:29,880 --> 00:22:32,480 Speaker 1: how important was yesterday? Yeah, you're not alone. It's funny. 413 00:22:32,520 --> 00:22:34,920 Speaker 1: It's been eleven years since Tiger last one of Grand 414 00:22:34,960 --> 00:22:37,679 Speaker 1: Slam or a major. It feels like the sport is 415 00:22:37,720 --> 00:22:40,320 Speaker 1: as reliant on him today as it was back in 416 00:22:40,359 --> 00:22:42,560 Speaker 1: two thousand and eight. You know, back then we were 417 00:22:42,600 --> 00:22:44,720 Speaker 1: talking about the you know, the thirty to fifty percent 418 00:22:44,880 --> 00:22:47,600 Speaker 1: ratings jump that always happens when he's in contention. You know, 419 00:22:47,680 --> 00:22:51,240 Speaker 1: he had a rough ten years. But flash forward, we're 420 00:22:51,240 --> 00:22:53,600 Speaker 1: still talking about it. Right, You're not alone. Most people 421 00:22:53,640 --> 00:22:57,360 Speaker 1: watched yesterday because Tiger Woods was doing well, and they're 422 00:22:57,359 --> 00:23:00,480 Speaker 1: gonna watch moving forward to see if he can sustained 423 00:23:00,560 --> 00:23:03,239 Speaker 1: this golf is similarly rely on Tiger now as it 424 00:23:03,320 --> 00:23:05,360 Speaker 1: was ten years ago. Yeah, it's it's amazing. It's been 425 00:23:05,400 --> 00:23:07,520 Speaker 1: you know, ten years. As you mentioned, so many great 426 00:23:07,600 --> 00:23:10,359 Speaker 1: young players have come into the game. But it's just 427 00:23:10,600 --> 00:23:12,560 Speaker 1: it's interesting to see how you know that you could 428 00:23:12,600 --> 00:23:15,320 Speaker 1: just feel it on Twitter and other social media yesterday 429 00:23:15,320 --> 00:23:18,280 Speaker 1: how different yesterday was. What are we interesting to see 430 00:23:18,359 --> 00:23:21,080 Speaker 1: will be to what extent of the big A list 431 00:23:21,160 --> 00:23:23,359 Speaker 1: sponsors come back to Tiger Woods. I noticed, you know, 432 00:23:23,440 --> 00:23:25,399 Speaker 1: the last time he won, I think, you know, a 433 00:23:25,520 --> 00:23:27,440 Speaker 1: T and T was on his bag, and this time 434 00:23:27,440 --> 00:23:29,720 Speaker 1: it's Monster Energy. Not that that's not a big brand, 435 00:23:29,760 --> 00:23:31,920 Speaker 1: but it's not a T and T. So be interested 436 00:23:31,920 --> 00:23:34,560 Speaker 1: to see kind of how the sponsors come back to Tiger. Yeah, 437 00:23:34,640 --> 00:23:37,199 Speaker 1: he lost, you know, in that stretch where he was 438 00:23:37,240 --> 00:23:40,200 Speaker 1: having you know, of his personal problems and also physical 439 00:23:40,240 --> 00:23:42,520 Speaker 1: injury problems. He lost a lot of sponsors, right you 440 00:23:42,520 --> 00:23:45,639 Speaker 1: mentioned a T and T, Gillette, Centure, Gatorade. You know, 441 00:23:45,720 --> 00:23:47,560 Speaker 1: some of those big brands that were associated with him 442 00:23:47,760 --> 00:23:49,960 Speaker 1: either dropped him out right or decided they weren't going 443 00:23:50,000 --> 00:23:52,560 Speaker 1: to renew with him. Nike the one company probably the 444 00:23:52,600 --> 00:23:55,399 Speaker 1: one that people most associate with Tiger. He's still with 445 00:23:55,480 --> 00:23:58,000 Speaker 1: them from a clothing standpoint, but they've stopped making balls. 446 00:23:58,040 --> 00:24:00,520 Speaker 1: They stopped making bags, they stopped picking club. You know, 447 00:24:00,560 --> 00:24:03,520 Speaker 1: he's needed to find new partners for all those things. 448 00:24:03,640 --> 00:24:06,800 Speaker 1: Saturday ratings, I believe a five per cent, but Sunday 449 00:24:06,960 --> 00:24:10,000 Speaker 1: must be incalculable. We don't know yet those numbers, do 450 00:24:10,080 --> 00:24:11,719 Speaker 1: we Yeah, we don't know the numbers yet. The thing 451 00:24:11,760 --> 00:24:14,119 Speaker 1: that's gonna make it a little more difficult is because 452 00:24:14,160 --> 00:24:17,119 Speaker 1: the weather, whether they moved it up. Yeah, so so 453 00:24:17,240 --> 00:24:21,120 Speaker 1: Tiger teet off at six thirty a m. West Coast time. Um, so, 454 00:24:21,359 --> 00:24:23,320 Speaker 1: you know that's gonna hurt ratings a little bit. The 455 00:24:23,320 --> 00:24:25,840 Speaker 1: fact that, the fact that for for people on the 456 00:24:25,840 --> 00:24:27,879 Speaker 1: West Coast, they you know, they probably weren't awake when 457 00:24:27,920 --> 00:24:30,840 Speaker 1: he started. But I would imagine the final couple hours 458 00:24:30,840 --> 00:24:33,679 Speaker 1: of that telecast, we're bonkers ratings at the end of it. 459 00:24:33,720 --> 00:24:37,080 Speaker 1: I noticed Mr Roberts of NBC Universal getting some FaceTime. 460 00:24:37,520 --> 00:24:39,720 Speaker 1: Is Tiger came off the Green to Hug Family and 461 00:24:39,800 --> 00:24:42,960 Speaker 1: all to CBS have a lock on the Masters or 462 00:24:43,000 --> 00:24:44,959 Speaker 1: is this going to be the mother of all bidding 463 00:24:45,840 --> 00:24:48,800 Speaker 1: bidding wars? Whenever that comes up, it's an interesting question. 464 00:24:48,920 --> 00:24:50,880 Speaker 1: They do have a lock on the Masters, but it's 465 00:24:50,960 --> 00:24:53,840 Speaker 1: not a traditional media rights deal like we're used to. 466 00:24:53,920 --> 00:24:56,600 Speaker 1: You know, CBS doesn't you know, pay a ten year 467 00:24:57,000 --> 00:24:59,919 Speaker 1: master Matt Monster a million dollar deal for the Masters. 468 00:25:00,240 --> 00:25:03,120 Speaker 1: They have a handshake agreement every year where essentially they 469 00:25:03,160 --> 00:25:05,760 Speaker 1: give the cost it takes to put the put the 470 00:25:05,800 --> 00:25:08,720 Speaker 1: production on, and the Master says okay, and then they 471 00:25:08,800 --> 00:25:11,800 Speaker 1: get their sponsors to to pay the difference. So by 472 00:25:11,800 --> 00:25:15,640 Speaker 1: most accounts, CBS gets a tremendous bargain on the Masters. 473 00:25:15,720 --> 00:25:17,480 Speaker 1: You know, they can't sell ads in the same ways 474 00:25:17,520 --> 00:25:20,600 Speaker 1: because if you watch the telecast yesterday, there's very few commercials. 475 00:25:20,760 --> 00:25:25,240 Speaker 1: There's really only which it's like, I agree, I think 476 00:25:25,240 --> 00:25:27,680 Speaker 1: it's fantastic, but it's it's just not the same kind 477 00:25:27,680 --> 00:25:30,119 Speaker 1: of economic model that you see for something like the 478 00:25:30,160 --> 00:25:32,800 Speaker 1: Super Bowl, right where there's millions of dollars paid for 479 00:25:32,840 --> 00:25:34,760 Speaker 1: the rights and then you have to get you know, 480 00:25:34,800 --> 00:25:36,960 Speaker 1: get that money back on millions of dollars of ads. 481 00:25:37,200 --> 00:25:39,760 Speaker 1: Remember a story we were talking about last week. I 482 00:25:39,760 --> 00:25:42,000 Speaker 1: think somebody kind of came in the last minute put 483 00:25:42,000 --> 00:25:45,359 Speaker 1: down an eight two th dollar bet on Tiger Woods 484 00:25:45,359 --> 00:25:49,919 Speaker 1: at fourteen one. Not a bag. So I mean, but 485 00:25:49,960 --> 00:25:52,399 Speaker 1: I understand that the bookies didn't do well here, not 486 00:25:52,520 --> 00:25:54,639 Speaker 1: just with that bet. Yeah, it's funny the for the 487 00:25:54,680 --> 00:25:57,320 Speaker 1: past ten years, Tiger Woods has been, you know, the 488 00:25:57,400 --> 00:26:01,160 Speaker 1: best thing going for bookies, right, people continue newestly bet him. 489 00:26:01,200 --> 00:26:02,879 Speaker 1: You know, he would enter tournaments where he had no 490 00:26:02,920 --> 00:26:05,520 Speaker 1: shot of winning. They'd put the odds at hift one, 491 00:26:05,800 --> 00:26:08,040 Speaker 1: and tons of people would wage it. Right. Uh So 492 00:26:08,160 --> 00:26:10,760 Speaker 1: they've made millions off of Tiger Woods in the past 493 00:26:10,760 --> 00:26:13,520 Speaker 1: ten years. And I've talked to these bookmakers and they say, listen, 494 00:26:13,520 --> 00:26:15,680 Speaker 1: if he ever wins a major again, we're gonna lose 495 00:26:15,720 --> 00:26:19,160 Speaker 1: big on that major. And it happened, right, He's so popular. 496 00:26:19,600 --> 00:26:22,200 Speaker 1: Uh this better you know, one point two million dollar 497 00:26:22,240 --> 00:26:25,040 Speaker 1: payout that that he won most books that I talked 498 00:26:25,040 --> 00:26:27,080 Speaker 1: to yesterday. Yeah, they took a wash on this. I mean, 499 00:26:27,080 --> 00:26:28,879 Speaker 1: you two guys know way more about this than I do. 500 00:26:29,040 --> 00:26:32,560 Speaker 1: I figured out Ricky followers Orange. That's that's about where 501 00:26:32,600 --> 00:26:34,760 Speaker 1: I got it. Yeah. Where of the group that was 502 00:26:34,800 --> 00:26:37,040 Speaker 1: out there was great, like six people vying for it. 503 00:26:37,640 --> 00:26:42,320 Speaker 1: Where's the next Tiger? I mean, which of these guys 504 00:26:43,280 --> 00:26:45,639 Speaker 1: is Tiger? Is there ever going to be a next Tiger? 505 00:26:45,680 --> 00:26:47,879 Speaker 1: I mean who knows? Yeah, I think there there's certainly 506 00:26:47,880 --> 00:26:49,600 Speaker 1: an argument to be made that that no one will 507 00:26:49,640 --> 00:26:52,560 Speaker 1: ever just because of a his dominance. You know, his 508 00:26:52,720 --> 00:26:56,199 Speaker 1: unique background that there are that they may never be 509 00:26:56,280 --> 00:26:59,120 Speaker 1: another one of him, right, And and you know, none 510 00:26:59,160 --> 00:27:02,280 Speaker 1: of these guys, Cockle, Roy Speith, Brooks, Kepco, They've all 511 00:27:02,280 --> 00:27:03,720 Speaker 1: had moments, but none of them have been able to 512 00:27:03,760 --> 00:27:06,600 Speaker 1: sustain dominance in the way that that Tiger did. Um. 513 00:27:06,640 --> 00:27:08,760 Speaker 1: But they also just might not be as marketable or 514 00:27:08,800 --> 00:27:11,320 Speaker 1: as compelling a story as him. Um, I think there's 515 00:27:11,320 --> 00:27:14,800 Speaker 1: a chance that we just never have the it guy 516 00:27:14,840 --> 00:27:18,000 Speaker 1: for golf ever again. So it's interesting. I wonder if 517 00:27:18,760 --> 00:27:22,320 Speaker 1: when you think about some of these other players, um, 518 00:27:22,600 --> 00:27:25,720 Speaker 1: is the expectation that for Tiger this was kind of 519 00:27:25,720 --> 00:27:27,800 Speaker 1: a flash in a pan kind of weekend it all 520 00:27:27,840 --> 00:27:30,480 Speaker 1: came together. Or the age of forty three, you know, 521 00:27:30,520 --> 00:27:33,160 Speaker 1: as you do, you think he can make another multi 522 00:27:33,280 --> 00:27:35,639 Speaker 1: year run at this thing and maybe even challenge the 523 00:27:35,720 --> 00:27:39,120 Speaker 1: Jack Nicholas eighteen major kind of it certainly seems possible. 524 00:27:39,160 --> 00:27:41,520 Speaker 1: I mean, I'm not a XS and OSK golf guy 525 00:27:41,680 --> 00:27:44,840 Speaker 1: relate to mixed metaphors, but yeah, I mean he's forty three, right, 526 00:27:44,840 --> 00:27:47,880 Speaker 1: so he's not not young. And physically, you know, he's 527 00:27:47,880 --> 00:27:50,520 Speaker 1: always he's been fairly brittle the past ten years. I mean, 528 00:27:50,520 --> 00:27:52,600 Speaker 1: I imagine, you know, his body is not doing him 529 00:27:52,640 --> 00:27:55,240 Speaker 1: any favors right now, but you know he just won, 530 00:27:55,520 --> 00:27:57,919 Speaker 1: you know, the biggest stage and then the most important 531 00:27:57,960 --> 00:28:00,320 Speaker 1: tournament of the year. I would imagine that he will, 532 00:28:00,400 --> 00:28:03,280 Speaker 1: as long as he can stay healthy, continue to compete 533 00:28:03,280 --> 00:28:05,040 Speaker 1: at least this year, and and and for a couple 534 00:28:05,119 --> 00:28:07,480 Speaker 1: more years moving forward. And I would think everyone in 535 00:28:07,520 --> 00:28:10,000 Speaker 1: the golf world is would love that, right. I mean, 536 00:28:10,040 --> 00:28:12,199 Speaker 1: if he continue, if he has another banner year, if 537 00:28:12,240 --> 00:28:14,919 Speaker 1: he moves up into the top ten and higher and higher. 538 00:28:15,119 --> 00:28:17,439 Speaker 1: I would think if you're NBC or CBS or the 539 00:28:17,480 --> 00:28:20,360 Speaker 1: Golf Channel, or you know, Nike or even Taylor Made, 540 00:28:20,640 --> 00:28:23,080 Speaker 1: or companies that work in golf that don't even sponsor him, 541 00:28:23,520 --> 00:28:25,840 Speaker 1: Adidas for example, I'd imagine they'd be thrilled as well. 542 00:28:25,920 --> 00:28:29,720 Speaker 1: In sports, there's always the people that go longer. Chris Chelios, 543 00:28:29,760 --> 00:28:32,160 Speaker 1: who played for the Detroit Red Vision, maybe he's one example. 544 00:28:32,200 --> 00:28:35,359 Speaker 1: Some other baseball players as well. I think of Tom 545 00:28:35,400 --> 00:28:39,600 Speaker 1: Watson in golf, who just delivered and delivered. Does Tiger 546 00:28:39,640 --> 00:28:42,320 Speaker 1: Woods have the kind of game where he can be 547 00:28:42,400 --> 00:28:46,480 Speaker 1: a fossil and compete, Yeah. I think the big question 548 00:28:46,680 --> 00:28:50,200 Speaker 1: is the extent to which the physical toll on his body. 549 00:28:50,440 --> 00:28:53,400 Speaker 1: What that means when he when he's in the shop 550 00:28:53,600 --> 00:28:56,280 Speaker 1: or is it putting you know what? What what is 551 00:28:56,320 --> 00:28:59,200 Speaker 1: the determinant? Yeah, it's more the teacher, I mean Tiger. 552 00:28:59,520 --> 00:29:03,760 Speaker 1: Tiger evolutionized kind of the way golfers trained physically, right, 553 00:29:03,800 --> 00:29:05,760 Speaker 1: I mean he he looked differently than almost any other 554 00:29:05,800 --> 00:29:08,280 Speaker 1: golf forever. Um. And the reason he needed to be 555 00:29:08,320 --> 00:29:10,480 Speaker 1: that big is because of the you know, the tremendous 556 00:29:10,600 --> 00:29:12,920 Speaker 1: torque that he was putting on his body. Um. And 557 00:29:12,960 --> 00:29:16,400 Speaker 1: he's paid for that in in recent years. Uh So, Yeah, 558 00:29:16,360 --> 00:29:18,280 Speaker 1: I don't know if you know the fact that a 559 00:29:18,280 --> 00:29:21,920 Speaker 1: guy like Tom Watson, you know, he he played so 560 00:29:21,960 --> 00:29:24,880 Speaker 1: well so later possibly because you know, just his swing 561 00:29:24,880 --> 00:29:26,840 Speaker 1: and the wear and tear on his body was was 562 00:29:26,920 --> 00:29:29,200 Speaker 1: less than it than it was for Tiger Woods. Um. 563 00:29:29,560 --> 00:29:31,640 Speaker 1: That I think remains to be seen. But you know, 564 00:29:31,640 --> 00:29:34,800 Speaker 1: it's no question that at forty three and despite four 565 00:29:34,840 --> 00:29:38,200 Speaker 1: back surgeries in the past couple of years, uh, Tiger remains, 566 00:29:38,240 --> 00:29:40,080 Speaker 1: you know, one of the top players on tour. And 567 00:29:40,080 --> 00:29:42,000 Speaker 1: I think they've actually we're gonna be able to get 568 00:29:42,040 --> 00:29:44,760 Speaker 1: to see Tiger in another major sooner than we typically well, 569 00:29:44,760 --> 00:29:47,560 Speaker 1: because they changed up the schedule this year, right, Evan, Yeah, 570 00:29:47,600 --> 00:29:50,280 Speaker 1: the p G A is moving up, so the next 571 00:29:50,320 --> 00:29:53,080 Speaker 1: major will be the PGA. Think I think it's in May. 572 00:29:53,720 --> 00:29:57,040 Speaker 1: So yeah, that's best. Page State Parks. You could take 573 00:29:57,120 --> 00:29:59,680 Speaker 1: this of course out there, Tom and we could do that. 574 00:30:00,040 --> 00:30:02,200 Speaker 1: See you and Lisa out there, right, you know dat. 575 00:30:02,240 --> 00:30:04,920 Speaker 1: I mean nobody gets up in golf before nine am, Right, 576 00:30:05,280 --> 00:30:07,960 Speaker 1: I could see you and Lisa out there. That's a 577 00:30:08,640 --> 00:30:10,880 Speaker 1: that's a capital idea. A couple of years ago, Beth 578 00:30:10,920 --> 00:30:12,720 Speaker 1: Page had another major. I don't know if it was 579 00:30:12,720 --> 00:30:14,320 Speaker 1: the US Open to the p G a um and 580 00:30:14,360 --> 00:30:17,000 Speaker 1: there was a media availability to play the course and 581 00:30:17,080 --> 00:30:18,480 Speaker 1: so it was, you know, it was like a week 582 00:30:18,600 --> 00:30:21,320 Speaker 1: or two weeks before the pros got here. And I've 583 00:30:21,360 --> 00:30:23,480 Speaker 1: never seen rough like that. I knew the course was 584 00:30:23,480 --> 00:30:25,520 Speaker 1: obviously harder than it is on like a normal weekend. 585 00:30:25,920 --> 00:30:27,560 Speaker 1: The rough was, you know, it felt like it was 586 00:30:27,680 --> 00:30:29,760 Speaker 1: six inches and I couldn't even find my ball it 587 00:30:29,800 --> 00:30:34,880 Speaker 1: was two inches. Evan Williams on what an exciting moment 588 00:30:34,960 --> 00:30:38,520 Speaker 1: for golf and for sport yesterday as well. The course. 589 00:30:38,560 --> 00:30:41,200 Speaker 1: Look for Bloomberg Business Sports, they do a great job 590 00:30:41,240 --> 00:30:43,760 Speaker 1: across all the different sports as well. Paul what's the 591 00:30:43,760 --> 00:30:46,920 Speaker 1: biggest rough you's ever played in? Probably, you know, just 592 00:30:46,960 --> 00:30:49,280 Speaker 1: like I've been mentioned that Bethpage Black. It's the hardest 593 00:30:49,280 --> 00:30:52,160 Speaker 1: course I've ever played, and it's interesting. It's uh, it's 594 00:30:52,200 --> 00:30:54,600 Speaker 1: the people's course. It's a public course, and uh and 595 00:30:54,680 --> 00:30:56,840 Speaker 1: the pros love it that. They love the New York vibe, 596 00:30:56,880 --> 00:30:59,840 Speaker 1: they love the New York Uh, you know, Uh, just 597 00:30:59,880 --> 00:31:02,480 Speaker 1: a crowds are there and uh it's just a great, 598 00:31:02,640 --> 00:31:05,400 Speaker 1: great course and a great tournament. So the pgs coming back, 599 00:31:05,440 --> 00:31:07,280 Speaker 1: so it'll be a great for the New York market. 600 00:31:08,160 --> 00:31:12,360 Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and 601 00:31:12,440 --> 00:31:17,760 Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast 602 00:31:17,800 --> 00:31:22,040 Speaker 1: platform you prefer. I'm on Twitter at Tom Keane before 603 00:31:22,040 --> 00:31:26,280 Speaker 1: the podcast. You can always catch us worldwide. I'm Bloomberg Radio.