Speaker 1: Yea. Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keene
Speaker 1: Jay Lee. We bring you insight from the best in economics, finance, investment,
Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud,
Speaker 1: Bloomberg dot Com, and of course, on the Bloomberg So
Speaker 1: another tweet, another takedown of the Federal Reserve, the President
Speaker 1: saying if the Fed had done its job properly, which
Speaker 1: it has not, the stock market would have been up
Speaker 1: five thousand to ten thousand. Additional points quanditative tightening was
Speaker 1: a killer. We should have done the exact opposite. To
Speaker 1: weigh in a man that doesn't need much of an introduction,
Speaker 1: it's Ian Brama, Eurasia Group President, and great to see you.
Speaker 1: Let's just talk about the independence of the Federal Reserve
Speaker 1: and to what extent that's being damaged at the moment um.
Speaker 1: There's no question that Trump's tweets are undermining the way
Speaker 1: we think about the FED. But J. Powell is very
Speaker 1: much a capable, qualified and independent chief and that that's
Speaker 1: certainly nobody is making the argument that his decisions have
Speaker 1: been undermined or politically skewed by Trump. I think the
Speaker 1: bigger question has been the recent move by Trump to
Speaker 1: push Steven Moore and Herman Kaine as FED board members.
Speaker 1: I mean, these are Stephen Moore's economic capabilities make AOC
Speaker 1: look like a strong economist, right, so you would this
Speaker 1: This isn't that. I mean, I'm a political scientist, and
Speaker 1: I it's pretty clear to me that these are not
Speaker 1: people you want on the board. But um, but I
Speaker 1: do think that if Trump were to win in UH
Speaker 1: and he decides to get rid of J. Powell at
Speaker 1: that point, which you know has not that that's not
Speaker 1: really been tested UM in UH as like so many
Speaker 1: things in the true administration, then I think we could
Speaker 1: be in a different conversation. Let's talk about how generable
Speaker 1: the institution is. Do you think it is likely even possible,
Speaker 1: for that matter, to the president can't get rid of
Speaker 1: the chaman of the Federal Reserve. I think it's possible
Speaker 1: at after four years, I do UH, And I think
Speaker 1: that there would be difficult to UH with republic if
Speaker 1: Republicans are also um, you know, sort of a majority
Speaker 1: at that point in Senate, and certainly Trump wins, you
Speaker 1: think that would be the case. It's hard to see
Speaker 1: a lot of yelling and screaming about it. I had
Speaker 1: to find a blue button. The blue button is for
Speaker 1: Chelsea Blue. It's good, it's um Ian, okay, fed independence
Speaker 1: and all that. But it's within an international architecture. Right now,
Speaker 1: what John and I here interview to interview is the
Speaker 1: separateness of domestic economies versus all the international back and forth.
Speaker 1: Do you buy that separateness or is that just a
Speaker 1: thing of the moment we should bundle it all together.
Speaker 1: I mean, look, you look at the ECB and you
Speaker 1: see a process that is actually not being politicized, even
Speaker 1: though many people said it would. It actually is, you know,
Speaker 1: being handled by bureaucratic UH coalition to put to ensure
Speaker 1: that you have a new technocratic head um. You know
Speaker 1: that this the Chinese are not moving towards um a
Speaker 1: a floatable currency, and so you don't think of the
Speaker 1: p boc UM as being one of the important central
Speaker 1: banks in how the world manages flows of currencies. I mean,
Speaker 1: if you look at all of the ways that the
Speaker 1: geo political order has been fragmenting in the last twenty
Speaker 1: five years, central banks have not been one of them.
Speaker 1: That's actually one of the places where you would say,
Speaker 1: the world looks more like the old American lead order
Speaker 1: than in any other area. I mean, the central banks
Speaker 1: are there, but the arch question for listeners is as
Speaker 1: Chairman Paul Central Bank or of the world. And you know,
Speaker 1: you look at the I m F meetings, which have
Speaker 1: devolved from multilateralism down to whatever Mr Trump would like
Speaker 1: his Mr Powell's act changed because of it? Is he
Speaker 1: is he less multilateral than he used to be? Um, yeah,
Speaker 1: I guess I would say no. I think that Trump
Speaker 1: doesn't impact Powell very much. What what is true is
Speaker 1: that the United States is more relevant economically compared to
Speaker 1: the Europeans, right, and the fact that the Europeans feel
Speaker 1: and disarray, the fact that the UK is neither in
Speaker 1: nor out, the fact that the Germans and French are
Speaker 1: weaker than they were in our part of the world.
Speaker 1: The United States is increasingly the quote unquote rules set.
Speaker 1: And what stunning John is the dollar range is now
Speaker 1: a four year range, which I didn't realize till this morning.
Speaker 1: I thought it was two three years b d d
Speaker 1: d x Y. The Bloomberg Dollar Index has been churning
Speaker 1: for four years after that big jump up. I mean,
Speaker 1: I mean to to Mr Trump tweet, I mean, we
Speaker 1: haven't seen dollars. Are you expecting the presidents go after
Speaker 1: the effects market again? Is that what you know? I'm
Speaker 1: just saying that that usually with the comments did you
Speaker 1: give from President Trump in the last forty eight hours,
Speaker 1: you'd want to see a substantial dollar strength there. And
Speaker 1: let's talk about what actually is happening. I mean, the
Speaker 1: perception of independence hasn't been damaged because the perception of
Speaker 1: independence will be defined by our guests, not by us
Speaker 1: sitting around this table. It's market participants. Do they think
Speaker 1: something has changed at the fat? I don't see that
Speaker 1: in the market that now that's not in the price.
Speaker 1: They don't, and they don't for a range of reasons.
Speaker 1: One of them is that they don't think. Some of
Speaker 1: them don't think that these individuals that have been nominated recently,
Speaker 1: A will officially be nominated in the first place, B
Speaker 1: will actually be confirmed, and see if they are confirmed,
Speaker 1: will have much influence on the f O m c
Speaker 1: in and all those three things play into this. One
Speaker 1: thing has changed? What changes that the American economy feels
Speaker 1: softer now than it did six months ago, and as
Speaker 1: even though the unemployment numbers are very low. Job creations good,
Speaker 1: but people are not as excited about the growth, and
Speaker 1: that means Trump needs to look for people to blame,
Speaker 1: and the FED is one of many, but one of
Speaker 1: one of his primary targets right now, and that's going
Speaker 1: to continue to be the case as long as the
Speaker 1: U s economy looks soft as we get into the
Speaker 1: election cycle, that's only going to become more urgent for Trump.
Speaker 1: I don't think that changes the way market participants think
Speaker 1: about the FED. And let's wrap up this conversation by
Speaker 1: talking about a concept you introduced a long time ago,
Speaker 1: the Jacob the robustness of institutions, the openness of developed markets,
Speaker 1: and the reason why we're successful relative to the complete opposite.
Speaker 1: Updateus on that thinking now so here it's a very
Speaker 1: different conversation the one we've just had on the FED,
Speaker 1: which is that most institutions in the West have gotten
Speaker 1: gradually weaker less stable over the course of the last
Speaker 1: couple of decades. That means that the United States, which
Speaker 1: used to be very stable because it's very open, is
Speaker 1: becoming a little bit more fragmented, a little bit more closed,
Speaker 1: and a little bit less stable. Other kind trees like
Speaker 1: France with their uh, you know, yellow vest movement um
Speaker 1: and Macron looking very weak. They've they've slipped even farther
Speaker 1: down the Jacob The countries that haven't slipped much at
Speaker 1: all would be Germany and perhaps the least would be Japan.
Speaker 1: But across all of the advanced industrial democracies, the trend
Speaker 1: has been these political institutions are becoming a little more
Speaker 1: closed and a little bit less stable. If you were
Speaker 1: to rewrite the book right now, what the first couple
Speaker 1: of pies read like. The first couple of pages would
Speaker 1: talk about a j that looks a little bit more
Speaker 1: like a you. In other words, there's a little bit
Speaker 1: less advantage to being an open advanced industrial democracy today
Speaker 1: then there was twenty years ago. And one of the
Speaker 1: big reasons for that is technology. When I wrote the book,
Speaker 1: technology was a trend that undermined authoritarian regimes. It led
Speaker 1: to colored revolutions in the Arab Spring, and its strengthened
Speaker 1: liberal democracies. Today, when we talk about the data revolution
Speaker 1: and surveillance, it pushes towards supporting those authoritarian regimes that
Speaker 1: have control of that data can do the surveillance, and
Speaker 1: that undermines and fragments some of the advanced industrial democracy.
Speaker 1: So what John suggested, here's your next book is an
Speaker 1: update on Jake Curf. Now he's not suggested dr require
Speaker 1: an update years out. There's no question and thank you
Speaker 1: with you guys, he writes a great present and that
Speaker 1: global Wall Street Chat of the day. We can do
Speaker 1: that with Fred Cannon of Keith Brietton Woods where he
Speaker 1: runs the research shop as well. John and I have
Speaker 1: like two hours of conversation where it's gonna squeeze into
Speaker 1: six minutes. Here Fred Cannon wins. The bank roll up happened.
Speaker 1: I mean, not that we're going to canadaize American banking.
Speaker 1: We saw the sun Trust merger. When's the roll up
Speaker 1: really begin with the vengeance that scale begins. It really
Speaker 1: it's already there, Tom, I mean, if you look at
Speaker 1: what happened during the financial crisis, that was the roll
Speaker 1: up the biggest four banks in the US control of
Speaker 1: the you know, the market. Today beyond that, we are
Speaker 1: seeing some roll up and we'll continue to see that.
Speaker 1: The bb and T sun Trust deal maybe the biggest
Speaker 1: deal we will have in this cycle, but there'll be
Speaker 1: a lot of deals underneath that size. We're starting to
Speaker 1: see m o E s. We're starting to see a
Speaker 1: lot of these. First of all, I haven't been this
Speaker 1: industry for a long time. We have to know there's
Speaker 1: no such thing as a merger of equals. But yet
Speaker 1: the structure of putting two banks of equal size together
Speaker 1: um is one that is increasingly folks are looking at
Speaker 1: it as a way to consolidate the industry. So when
Speaker 1: when When? When m o E was the discussed yesterday
Speaker 1: at home? That's what that meant. We've talked about your
Speaker 1: marriage merger equals? Was it a merger rarely found in
Speaker 1: the wild? Continue with Mr kim freend Earnings. Gorman sacks
Speaker 1: out in about ten minutes time. A little bit after that,
Speaker 1: we're gonna get City as well. We had JP Morgan
Speaker 1: on Friday, where you're laser focused. Uh, well, look, I
Speaker 1: think on the capital market side, I think we're just
Speaker 1: going to see beating low expectations coming into the quarter.
Speaker 1: Everybody cut their estimates. We saw out of JP Morgan
Speaker 1: on Friday beating those reduced expectations. Still not a great quarter.
Speaker 1: I think where we're really focused beyond that, especially on City,
Speaker 1: is net interest margins. What's really happening because of this
Speaker 1: yield curve. That's kind of the dynamics that everybody's fascinated on.
Speaker 1: And when will when will we see net interest margins
Speaker 1: roll over at the bank. There's been an obsession with
Speaker 1: the yield curve. But the yield curve has been narrowing
Speaker 1: flattening over the last couple of years, and net interest
Speaker 1: margins have been expanding. It's not actually been a good
Speaker 1: read on bank profitability. What has been is the trajectory
Speaker 1: of interest rates. Interest rates go higher, income has been
Speaker 1: going north. And now we have this situation with the
Speaker 1: Federal Reserve where interest rates aren't coming higher anymore, at
Speaker 1: least for the time being. So I'm wondering where the
Speaker 1: growth comes from. Where does it come from? Well, you're
Speaker 1: exactly right. The real growth is coming at the big
Speaker 1: banks from sherry purchase. We calculate sixty of the growth
Speaker 1: in earnings this year is going to come from sherry
Speaker 1: purchase at the banks. Well, well, an American, I don't,
Speaker 1: I mean? I remember Dick Kovasovitch at Wells Fargo called
Speaker 1: to sign a defeat to repurchase shares. In other words,
Speaker 1: you can't find something mentioned the break. It's more like
Speaker 1: a utility. We got cash, give it back when it
Speaker 1: raises an important question. The lot a lot of people
Speaker 1: who are bullish the banks aren't bullish on the earnings.
Speaker 1: They're bullish on the multiple. They think the multiple will
Speaker 1: re rate higher. But if the earnings are going to
Speaker 1: be juiced by what some people would call financial engineering,
Speaker 1: let's just call it capital returns, Fred, it's going to
Speaker 1: be juiced by that, is it deserving a higher multiple? Well,
Speaker 1: if you look at the multiples today, we're trading a
Speaker 1: late cycle bank earnings multiples. It's happened before, it happened
Speaker 1: in two thousand, happened in two thousand and eight, happened
Speaker 1: in a number of time periods. In other words, why
Speaker 1: our banks training these multiple stay Because expectations are the
Speaker 1: earnings have peaked and that we're going to see a
Speaker 1: downward pressure. That downward pressure is going to come from credit,
Speaker 1: not from interest rates. And that's the concern your bank guys.
Speaker 1: I know, Fred, you're above it all. It's sixty feet.
Speaker 1: But you're banking team at KBW, what do they like
Speaker 1: right now in terms of bi hold sell What quality
Speaker 1: of bank do they like right now? Well? We really
Speaker 1: because of those multiples. We like the high quality banks,
Speaker 1: like the big guys that are way behind. We like
Speaker 1: the big guys that are the quality. I mean, look,
Speaker 1: you have to kind of keep going with JP Morgan.
Speaker 1: At this point in time, BA has turned into a
Speaker 1: quality institution. We wouldn't have said that five or six
Speaker 1: years ago. UM. So you're looking at the at the
Speaker 1: big banks with quality, and then you're looking at this
Speaker 1: at the commercial banks you can continue to grow. Does
Speaker 1: Will's Fargo get their act together? You know, I was
Speaker 1: thinking the other day it was you know, I mean
Speaker 1: five years ago, Wells Fargo was the go to bank
Speaker 1: in the US. Um, it's not today. It took Tiger
Speaker 1: Wood's eleven years to come back. We'll see if it
Speaker 1: takes the Canada with Fred what's the name you're most
Speaker 1: worried about? Uh. In the US, we don't really worry.
Speaker 1: The banks. Balance sheets are strong, the capital strong. We
Speaker 1: don't see a big hiccups. I am worried a bit
Speaker 1: about the kind of expectations that some of these traditional
Speaker 1: savings alone like New York Community Bank are gonna you know,
Speaker 1: their stocks have done very well this year. I think
Speaker 1: that might be a mystery. Hey, Fred great to cant
Speaker 1: Show and wonderful Fred Can in their KBW Global director
Speaker 1: of Research the takeaway over the last hour, I'd say
Speaker 1: Thomas as follows, if you compare it to the estimates
Speaker 1: were okay, if you compare it year on year, it's
Speaker 1: as dreadful as everyone thought it would be. Let's bring
Speaker 1: in Snali Bassex, Showy Bloomberg Banking reporters. She joins us
Speaker 1: in the Interactive Broker studios here in New York City.
Speaker 1: Snale your take please. Sure it's pretty nassy quarter and
Speaker 1: we're gonna be waiting for is what things look like
Speaker 1: going forward for Goldman Sacks. In their presentation so far,
Speaker 1: they've highlighted all the changes they're making, right, So that
Speaker 1: doesn't mean, hey, you know, look at how great we
Speaker 1: did in mergers. For example, it's hey, look at our
Speaker 1: Apple partnership and let's see where that's going. And so
Speaker 1: you know, people are going to be wondering whether they
Speaker 1: were blaming the government shutdown for a lot of the
Speaker 1: week performance in the first quarter. But there's some places
Speaker 1: that there's some real questions. Yeah, John, you nailed it
Speaker 1: twenty minutes ago by saying revenues are constrained. What I
Speaker 1: see throughout the first six pages of their power point
Speaker 1: is low single digit revenue growth in different subsets. There
Speaker 1: are some video syncrening reasons why revenues were constrained in
Speaker 1: the first quarter, specifically the government shut down holding back
Speaker 1: I P oceanale. Let's talk about where we will be
Speaker 1: less constraint in the next few months. Is that a
Speaker 1: pocket an area where they will be I POS is
Speaker 1: a great thing to bring up because Goldman saxes on slack.
Speaker 1: JP Morgan was on lift. There's uber around the corners.
Speaker 1: So I P o f S should jump back quite today.
Speaker 1: What do they move the needle on banks? That big?
Speaker 1: Come on? You know that's the thing, no right to
Speaker 1: talk about. It's great, cut'll talk. But we're at a
Speaker 1: point in the banking cycle where we're looking at every
Speaker 1: business line very aggressively and seeing for any signs of strength.
Speaker 1: And you know that's exactly a place where buried at
Speaker 1: the last page conclusions, buried at the second of the
Speaker 1: last line, while maintaining expense discipline. Do you ever even
Speaker 1: come out It's April now we're in the summer ballet.
Speaker 1: How many bodies are going to walk out the door
Speaker 1: vary since Sundry hundreds everywhere in very many decisions, in
Speaker 1: very many divisions. Another place that nobody really talked about
Speaker 1: this morning is investment management. Goldman also has one of
Speaker 1: the biggest asset managers. About that, did you talk about it?
Speaker 1: We talked about seconds. Seconds. Well, it looked at it. It
Speaker 1: It was really interesting. They bought in more assets, but
Speaker 1: they took in lower fees, which shows you even for
Speaker 1: Goldman Sacks, it's a race to the bottom and asset
Speaker 1: management when you're just taking in lower fees. And JP
Speaker 1: Morgan already said they're cutting staff in that division as well,
Speaker 1: and both of those divisions are over a trillion dollars
Speaker 1: some of the biggest on all Street City unchanged in
Speaker 1: the pre market dead flat. We had a boost of
Speaker 1: bank stocks on Friday, they read across from from JP Morgan.
Speaker 1: It gave the whole sector a little bit of a
Speaker 1: lift off the back of these earning city doing absolutely nothing. Shinali,
Speaker 1: thank you and happy birthday, Thank you, Thank you very much.
Speaker 1: Snati Bassik there up Bloomberg Banking reporter. It's a good
Speaker 1: time to speak to Diane Swunk. She's with Grant Thornton
Speaker 1: it's just just does your woman's duty for us and
Speaker 1: fed day where she she gives this wonderful perspective on
Speaker 1: the central bank, Dan, I want to go into the
Speaker 1: nitte gritte around the National Association of Business Economists, which
Speaker 1: is all this data we're getting, and then we've got
Speaker 1: this massive divide and what we see from guests. Have
Speaker 1: you ever seen this before? Is this normal that we're
Speaker 1: seeing a mystery on the data and then two disparate
Speaker 1: views on what the central bank will do? You know,
Speaker 1: I think what's going on is one we have seen
Speaker 1: it before. You see it at tipping points in the economy,
Speaker 1: we start to get cross currents. The question is are
Speaker 1: we added tipping point or not. Also, I think it's
Speaker 1: really important to keep perspective out there that you know,
Speaker 1: when you're in a position where the underlying economy is
Speaker 1: doing well but slowing, you always worry about how close
Speaker 1: you're coming to send ice. And so even though it
Speaker 1: looks like the underlying economy is still solid, we worry
Speaker 1: about those soft patches out there, and the subtle reserve
Speaker 1: is hedging the downside risks of going through the ice
Speaker 1: and stepping back to the sidelines, which in and of itself,
Speaker 1: that moved to the sidelines signals that the said may
Speaker 1: be more worried. Well, this is critical. If there's one said,
Speaker 1: if there's one rate cut to come, or let's say
Speaker 1: it's asymmetric to rate cuts rate rises to come, what
Speaker 1: is the distinctive data factor that gets someone to two
Speaker 1: rate rises versus someone looking for one rate cut. You know,
Speaker 1: that's really interesting, I think at this stage of the game,
Speaker 1: because the Fed has so been wrong on inflation. It
Speaker 1: thought we'd get to three wage growth and sustained three
Speaker 1: percent wage growth would give us sustained two percent on
Speaker 1: their target inflation. That has failed. We've fallen short on that.
Speaker 1: After accelerating core inflation has actually decelerated. And so I
Speaker 1: think we need to see not only a sustained two
Speaker 1: percent reach on the target of inflation to get those
Speaker 1: rate hikes out there, but we need to see an
Speaker 1: overshoot on inflation for the FED to feel comfortable that
Speaker 1: they've really achieved their mandate. And their mandate is getting
Speaker 1: much more nuanced as well. Full employment doesn't just mean
Speaker 1: an unemployment rate anymore, as it's been evolving over several years,
Speaker 1: it's all now also now the employment to population share,
Speaker 1: the share of labor income that we're seeing in the economy,
Speaker 1: which is not moved up enough for the FED to
Speaker 1: feel comfortable at this stage. League Matt Bowsley here at
Speaker 1: Bloomberg doing a nice little rite up on that today.
Speaker 1: I suggest a lot of people reach out to Matt,
Speaker 1: if not, just take a read of it. It's really
Speaker 1: interesting in the push I read it to push Dan
Speaker 1: seems to become the push seems to be coming from
Speaker 1: vice share Rich Clarida. So how important is this push
Speaker 1: and how will it shape the federal reserve reaction function
Speaker 1: in the coming way? I think it's it's really important, John,
Speaker 1: And you know the issue is I was you know,
Speaker 1: I have to say that it's evolutionary, that revolutionary, and
Speaker 1: it's not as unique as you know it was pointed
Speaker 1: out in the article, because I know the FED has
Speaker 1: been looking at this issue for a long time as
Speaker 1: of economist for decades, looking at the issue of how
Speaker 1: labor has lost its bargaining power and that's hurting the
Speaker 1: labor share of income. We saw it in Janet Yellen's dashboard.
Speaker 1: So this has been something that FED has been trying
Speaker 1: to incorporate. I think Rich has taken it to a
Speaker 1: new level as Vice Chair of the FED, and really
Speaker 1: we're coming together and we're looking at it quite carefully,
Speaker 1: and how do we incorporate it more into the decision
Speaker 1: rule in understanding where the FED has been wrong on inflation.
Speaker 1: And I think that's a very important move going forward,
Speaker 1: is understanding not just employment, not just these aggregate very
Speaker 1: you know, basic tools of the economy, but getting the
Speaker 1: dirties in the details and Clarita and doing this is
Speaker 1: trying to make the decision much more of a process.
Speaker 1: It's more inclusive, and I think that's very important. Dian,
Speaker 1: just to put you on the spot a little bit,
Speaker 1: is Vice Chair Rich Clarada running the FED right now?
Speaker 1: But we don't want to put you on the spot now.
Speaker 1: You can put me on the spot all you want. No,
Speaker 1: Rich Clarida is not running the FED right now. Jay
Speaker 1: Paulo is running the FED right now, and nor is
Speaker 1: the president running the FED. Jay Paulo is running the
Speaker 1: FED right now. I have no qualms about that whatsoever.
Speaker 1: But this is a really strong Fedal Reserve Board at
Speaker 1: the moment, and I think that really deserves a lot
Speaker 1: of credit. It's not always been as strong of a
Speaker 1: board with his um broad base of opinions in different specialties.
Speaker 1: I think, you know, sort of, this pushback on nominees
Speaker 1: to the FED board is not about elitism. It's about
Speaker 1: having diversity of thought that's informed for the skills of
Speaker 1: the job, knowing regulation. What does that mean for the economy?
Speaker 1: Having experienced in that um knowing, it's you know, when
Speaker 1: I look at the FED boarding day, I really look
Speaker 1: at a board that is well qualified and rich karitas.
Speaker 1: You know, stepping out is really um evidence of that.
Speaker 1: But we've had many strong vice chairman. Janet Ellen was
Speaker 1: a vice chairman, Alice Ryland was a vice chairman, Allen Blinder,
Speaker 1: you know, Roger Ferguson, non economist vice chairman. So the
Speaker 1: strength in the FED board is really critical. Thank you,
Speaker 1: Thank you filts in the chief economists. Over that, let
Speaker 1: us listen to some golf history. Back behind the ball Woods,
Speaker 1: he has done it. Tiger is back, Tiger is back
Speaker 1: on top Tiger Woods, that two thousand night to Master's
Speaker 1: Chapion and there it is. Let us have a real golfer,
Speaker 1: talk to a real sports guy, Paul Sweeney. Why don't
Speaker 1: you being in the extinguished gentleman. Eban no Wi Williams
Speaker 1: covers all things sports for Bloomberg News. He joins us
Speaker 1: in our Bloomberg Interactive Broker studio. So Eban, I gotta
Speaker 1: tell you, I watched every single shot of the tournament yesterday.
Speaker 1: I can't remember the last time I did that. And
Speaker 1: the only reason I did that is because of Tiger Woods.
Speaker 1: How important is he to the game of golf and
Speaker 1: how important was yesterday? Yeah, you're not alone. It's funny.
Speaker 1: It's been eleven years since Tiger last one of Grand
Speaker 1: Slam or a major. It feels like the sport is
Speaker 1: as reliant on him today as it was back in
Speaker 1: two thousand and eight. You know, back then we were
Speaker 1: talking about the you know, the thirty to fifty percent
Speaker 1: ratings jump that always happens when he's in contention. You know,
Speaker 1: he had a rough ten years. But flash forward, we're
Speaker 1: still talking about it. Right, You're not alone. Most people
Speaker 1: watched yesterday because Tiger Woods was doing well, and they're
Speaker 1: gonna watch moving forward to see if he can sustained
Speaker 1: this golf is similarly rely on Tiger now as it
Speaker 1: was ten years ago. Yeah, it's it's amazing. It's been
Speaker 1: you know, ten years. As you mentioned, so many great
Speaker 1: young players have come into the game. But it's just
Speaker 1: it's interesting to see how you know that you could
Speaker 1: just feel it on Twitter and other social media yesterday
Speaker 1: how different yesterday was. What are we interesting to see
Speaker 1: will be to what extent of the big A list
Speaker 1: sponsors come back to Tiger Woods. I noticed, you know,
Speaker 1: the last time he won, I think, you know, a
Speaker 1: T and T was on his bag, and this time
Speaker 1: it's Monster Energy. Not that that's not a big brand,
Speaker 1: but it's not a T and T. So be interested
Speaker 1: to see kind of how the sponsors come back to Tiger. Yeah,
Speaker 1: he lost, you know, in that stretch where he was
Speaker 1: having you know, of his personal problems and also physical
Speaker 1: injury problems. He lost a lot of sponsors, right you
Speaker 1: mentioned a T and T, Gillette, Centure, Gatorade. You know,
Speaker 1: some of those big brands that were associated with him
Speaker 1: either dropped him out right or decided they weren't going
Speaker 1: to renew with him. Nike the one company probably the
Speaker 1: one that people most associate with Tiger. He's still with
Speaker 1: them from a clothing standpoint, but they've stopped making balls.
Speaker 1: They stopped making bags, they stopped picking club. You know,
Speaker 1: he's needed to find new partners for all those things.
Speaker 1: Saturday ratings, I believe a five per cent, but Sunday
Speaker 1: must be incalculable. We don't know yet those numbers, do
Speaker 1: we Yeah, we don't know the numbers yet. The thing
Speaker 1: that's gonna make it a little more difficult is because
Speaker 1: the weather, whether they moved it up. Yeah, so so
Speaker 1: Tiger teet off at six thirty a m. West Coast time. Um, so,
Speaker 1: you know that's gonna hurt ratings a little bit. The
Speaker 1: fact that, the fact that for for people on the
Speaker 1: West Coast, they you know, they probably weren't awake when
Speaker 1: he started. But I would imagine the final couple hours
Speaker 1: of that telecast, we're bonkers ratings at the end of it.
Speaker 1: I noticed Mr Roberts of NBC Universal getting some FaceTime.
Speaker 1: Is Tiger came off the Green to Hug Family and
Speaker 1: all to CBS have a lock on the Masters or
Speaker 1: is this going to be the mother of all bidding
Speaker 1: bidding wars? Whenever that comes up, it's an interesting question.
Speaker 1: They do have a lock on the Masters, but it's
Speaker 1: not a traditional media rights deal like we're used to.
Speaker 1: You know, CBS doesn't you know, pay a ten year
Speaker 1: master Matt Monster a million dollar deal for the Masters.
Speaker 1: They have a handshake agreement every year where essentially they
Speaker 1: give the cost it takes to put the put the
Speaker 1: production on, and the Master says okay, and then they
Speaker 1: get their sponsors to to pay the difference. So by
Speaker 1: most accounts, CBS gets a tremendous bargain on the Masters.
Speaker 1: You know, they can't sell ads in the same ways
Speaker 1: because if you watch the telecast yesterday, there's very few commercials.
Speaker 1: There's really only which it's like, I agree, I think
Speaker 1: it's fantastic, but it's it's just not the same kind
Speaker 1: of economic model that you see for something like the
Speaker 1: Super Bowl, right where there's millions of dollars paid for
Speaker 1: the rights and then you have to get you know,
Speaker 1: get that money back on millions of dollars of ads.
Speaker 1: Remember a story we were talking about last week. I
Speaker 1: think somebody kind of came in the last minute put
Speaker 1: down an eight two th dollar bet on Tiger Woods
Speaker 1: at fourteen one. Not a bag. So I mean, but
Speaker 1: I understand that the bookies didn't do well here, not
Speaker 1: just with that bet. Yeah, it's funny the for the
Speaker 1: past ten years, Tiger Woods has been, you know, the
Speaker 1: best thing going for bookies, right, people continue newestly bet him.
Speaker 1: You know, he would enter tournaments where he had no
Speaker 1: shot of winning. They'd put the odds at hift one,
Speaker 1: and tons of people would wage it. Right. Uh So
Speaker 1: they've made millions off of Tiger Woods in the past
Speaker 1: ten years. And I've talked to these bookmakers and they say, listen,
Speaker 1: if he ever wins a major again, we're gonna lose
Speaker 1: big on that major. And it happened, right, He's so popular.
Speaker 1: Uh this better you know, one point two million dollar
Speaker 1: payout that that he won most books that I talked
Speaker 1: to yesterday. Yeah, they took a wash on this. I mean,
Speaker 1: you two guys know way more about this than I do.
Speaker 1: I figured out Ricky followers Orange. That's that's about where
Speaker 1: I got it. Yeah. Where of the group that was
Speaker 1: out there was great, like six people vying for it.
Speaker 1: Where's the next Tiger? I mean, which of these guys
Speaker 1: is Tiger? Is there ever going to be a next Tiger?
Speaker 1: I mean who knows? Yeah, I think there there's certainly
Speaker 1: an argument to be made that that no one will
Speaker 1: ever just because of a his dominance. You know, his
Speaker 1: unique background that there are that they may never be
Speaker 1: another one of him, right, And and you know, none
Speaker 1: of these guys, Cockle, Roy Speith, Brooks, Kepco, They've all
Speaker 1: had moments, but none of them have been able to
Speaker 1: sustain dominance in the way that that Tiger did. Um.
Speaker 1: But they also just might not be as marketable or
Speaker 1: as compelling a story as him. Um, I think there's
Speaker 1: a chance that we just never have the it guy
Speaker 1: for golf ever again. So it's interesting. I wonder if
Speaker 1: when you think about some of these other players, um,
Speaker 1: is the expectation that for Tiger this was kind of
Speaker 1: a flash in a pan kind of weekend it all
Speaker 1: came together. Or the age of forty three, you know,
Speaker 1: as you do, you think he can make another multi
Speaker 1: year run at this thing and maybe even challenge the
Speaker 1: Jack Nicholas eighteen major kind of it certainly seems possible.
Speaker 1: I mean, I'm not a XS and OSK golf guy
Speaker 1: relate to mixed metaphors, but yeah, I mean he's forty three, right,
Speaker 1: so he's not not young. And physically, you know, he's
Speaker 1: always he's been fairly brittle the past ten years. I mean,
Speaker 1: I imagine, you know, his body is not doing him
Speaker 1: any favors right now, but you know he just won,
Speaker 1: you know, the biggest stage and then the most important
Speaker 1: tournament of the year. I would imagine that he will,
Speaker 1: as long as he can stay healthy, continue to compete
Speaker 1: at least this year, and and and for a couple
Speaker 1: more years moving forward. And I would think everyone in
Speaker 1: the golf world is would love that, right. I mean,
Speaker 1: if he continue, if he has another banner year, if
Speaker 1: he moves up into the top ten and higher and higher.
Speaker 1: I would think if you're NBC or CBS or the
Speaker 1: Golf Channel, or you know, Nike or even Taylor Made,
Speaker 1: or companies that work in golf that don't even sponsor him,
Speaker 1: Adidas for example, I'd imagine they'd be thrilled as well.
Speaker 1: In sports, there's always the people that go longer. Chris Chelios,
Speaker 1: who played for the Detroit Red Vision, maybe he's one example.
Speaker 1: Some other baseball players as well. I think of Tom
Speaker 1: Watson in golf, who just delivered and delivered. Does Tiger
Speaker 1: Woods have the kind of game where he can be
Speaker 1: a fossil and compete, Yeah. I think the big question
Speaker 1: is the extent to which the physical toll on his body.
Speaker 1: What that means when he when he's in the shop
Speaker 1: or is it putting you know what? What what is
Speaker 1: the determinant? Yeah, it's more the teacher, I mean Tiger.
Speaker 1: Tiger evolutionized kind of the way golfers trained physically, right,
Speaker 1: I mean he he looked differently than almost any other
Speaker 1: golf forever. Um. And the reason he needed to be
Speaker 1: that big is because of the you know, the tremendous
Speaker 1: torque that he was putting on his body. Um. And
Speaker 1: he's paid for that in in recent years. Uh So, Yeah,
Speaker 1: I don't know if you know the fact that a
Speaker 1: guy like Tom Watson, you know, he he played so
Speaker 1: well so later possibly because you know, just his swing
Speaker 1: and the wear and tear on his body was was
Speaker 1: less than it than it was for Tiger Woods. Um.
Speaker 1: That I think remains to be seen. But you know,
Speaker 1: it's no question that at forty three and despite four
Speaker 1: back surgeries in the past couple of years, uh, Tiger remains,
Speaker 1: you know, one of the top players on tour. And
Speaker 1: I think they've actually we're gonna be able to get
Speaker 1: to see Tiger in another major sooner than we typically well,
Speaker 1: because they changed up the schedule this year, right, Evan, Yeah,
Speaker 1: the p G A is moving up, so the next
Speaker 1: major will be the PGA. Think I think it's in May.
Speaker 1: So yeah, that's best. Page State Parks. You could take
Speaker 1: this of course out there, Tom and we could do that.
Speaker 1: See you and Lisa out there, right, you know dat.
Speaker 1: I mean nobody gets up in golf before nine am, Right,
Speaker 1: I could see you and Lisa out there. That's a
Speaker 1: that's a capital idea. A couple of years ago, Beth
Speaker 1: Page had another major. I don't know if it was
Speaker 1: the US Open to the p G a um and
Speaker 1: there was a media availability to play the course and
Speaker 1: so it was, you know, it was like a week
Speaker 1: or two weeks before the pros got here. And I've
Speaker 1: never seen rough like that. I knew the course was
Speaker 1: obviously harder than it is on like a normal weekend.
Speaker 1: The rough was, you know, it felt like it was
Speaker 1: six inches and I couldn't even find my ball it
Speaker 1: was two inches. Evan Williams on what an exciting moment
Speaker 1: for golf and for sport yesterday as well. The course.
Speaker 1: Look for Bloomberg Business Sports, they do a great job
Speaker 1: across all the different sports as well. Paul what's the
Speaker 1: biggest rough you's ever played in? Probably, you know, just
Speaker 1: like I've been mentioned that Bethpage Black. It's the hardest
Speaker 1: course I've ever played, and it's interesting. It's uh, it's
Speaker 1: the people's course. It's a public course, and uh and
Speaker 1: the pros love it that. They love the New York vibe,
Speaker 1: they love the New York Uh, you know, Uh, just
Speaker 1: a crowds are there and uh it's just a great,
Speaker 1: great course and a great tournament. So the pgs coming back,
Speaker 1: so it'll be a great for the New York market.
Speaker 1: Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and
Speaker 1: listen to interviews on Apple Podcasts, SoundCloud, or whichever podcast
Speaker 1: platform you prefer. I'm on Twitter at Tom Keane before
Speaker 1: the podcast. You can always catch us worldwide. I'm Bloomberg Radio.