Speaker 1: This is the Bloomberg Surveillance Podcast. I'm Tom Keene along
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Speaker 2: We need more.
Speaker 1: Cameron Dawson joining us now our futures at negative three
Speaker 1: is Cameron Dawson unbelievably pression about losing the cliches go
Speaker 1: to cash.
Speaker 2: She's not there.
Speaker 1: She's in the market, in the game, and of course
Speaker 1: it's seen a bull market from October. Let's go there
Speaker 1: first of about six album before Paul Sweeney jumps in
Speaker 1: with real market talk. And the answer here is we
Speaker 1: did all this technology investment in the pandemic and now
Speaker 1: it's in place, and I think there's a complete underestimation
Speaker 1: of margin strength forward because they're going to apply I'm not.
Speaker 3: Talking about Microsoft, I'm talking about DuPont.
Speaker 4: Yeah, I mean, never bet against the great American might
Speaker 4: of expanding margins. We've been talking about peak margins year
Speaker 4: after year after year, and yet we've continued to press
Speaker 4: to new all time highs. I think a good question
Speaker 4: of that is how much is that technology related versus globalization,
Speaker 4: which of course was a big driver of better margins
Speaker 4: through before the pandemic. But we have to also appreciate
Speaker 4: during the pandemic one of the key sources of margin
Speaker 4: upside was revenue growth. It was incremental margins falling, falling
Speaker 4: down to the bottom line. When you grow revenues a
Speaker 4: lot a lot more of that falls down, and that
Speaker 4: came from pricing power. So the question for twenty twenty
Speaker 4: four and twenty twenty five, with a market that's pricing
Speaker 4: in peak margins or a new all time high margins,
Speaker 4: is can you get those all time high margins without
Speaker 4: pricing power and revenue growth given inflation has abated.
Speaker 5: So I get I'm just looking at the earnings forecast
Speaker 5: kind of bottoms up for the S and P five hundred,
Speaker 5: kind of high single digit, low double digit.
Speaker 1: I don't know.
Speaker 5: I'm not sure how much confidence we should have in
Speaker 5: those numbers. I know I've got my FED going to
Speaker 5: help us by being rates down, But do I still
Speaker 5: have earnings risk in the marketplace.
Speaker 4: I think that we have to keep our heat on
Speaker 4: a swivel for that, because what's underlying those ten and
Speaker 4: eleven percent earnings growth is an acceleration and top line
Speaker 4: not just in twenty four but also in twenty twenty
Speaker 4: five as well as those new record margins. Now we
Speaker 4: have a lot of levers to pull, things like possibly
Speaker 4: going back to M and A, which could help with
Speaker 4: deal activity, utilizing the balance sheet possibly a little bit
Speaker 4: more as people feel better. But I think that the
Speaker 4: other very important point is that earning sestiments have been
Speaker 4: eroding over the last four months, and so as we've
Speaker 4: seen the market rally, you've seen learning systems actually come in,
Speaker 4: meaning that this is all multiple expansion.
Speaker 5: So how do you think about valuation in this marketplace?
Speaker 5: I mean, it used to be when I was a kid,
Speaker 5: fifteen times was the market. Now it's eighteen, nineteen, twenty
Speaker 5: times for the market. How do you feel about valuation here?
Speaker 3: Yeah, I am.
Speaker 4: I'm open to the idea that the backdrop of the
Speaker 4: market sector kind of dispersion does support a higher multiple
Speaker 4: over the long run. However, if you're looking at twenty
Speaker 4: point one times forward earnings, there are only two times
Speaker 4: in the last forty years. We traded above that level
Speaker 4: during the tech bubble in the two thousands and during
Speaker 4: the pandemic policy bubble. And I call it that because
Speaker 4: you saw valuations expand when money supplied grow thirty percent,
Speaker 4: the Fed balance sheet increased by five trillion dollars in
Speaker 4: real interest rates for negative one percent.
Speaker 1: Not to go Steve Ross on you from MIT, but
Speaker 1: does factor investment here forward matter?
Speaker 2: And in that if we assume in any.
Speaker 1: Bull markets seventy percent of the stocks underperform, thirty percent
Speaker 1: drive the boat? Or obviously that's not a cliche, let's
Speaker 1: call that a tutology. Okay, great, but de factor choices
Speaker 1: matter forward? Or is it earnings analysis, securities and analysis
Speaker 1: that really drives the ship.
Speaker 4: For us, it's the factors that are related to earnings,
Speaker 4: such yes, such as looking at free cash flow generation.
Speaker 4: Free cash flow is such an important driver of being
Speaker 4: able to reinvest in your business because that gives you
Speaker 4: that effective flywheel effect. We don't want to be investing
Speaker 4: in companies mostly at this point in the cycle that
Speaker 4: cannot self fund themselves. We want companies that are agnostic
Speaker 4: to wear interest rates.
Speaker 2: Are so how many companies are this?
Speaker 1: There's like four you know, I mean, I mean, there's Bloomberg, LP,
Speaker 1: there's Apple. You know.
Speaker 2: Okay, how many companies?
Speaker 1: I love what you just said, except this weekend I'm
Speaker 1: going to you know, nobody's going to do.
Speaker 2: They're not going to do like a Monte Carlos.
Speaker 3: Survey or whatever that SMB five hundred.
Speaker 1: How many stocks out there meet the Cameron Dawson analysis.
Speaker 4: Well, to put a number on it. When we think
Speaker 4: about our equity strategies, whether it's growth, value or international,
Speaker 4: each have about thirty five stocks in them. So to
Speaker 4: get to the cream of the crop. It's a pretty
Speaker 4: type filter.
Speaker 3: Nothing else matters today.
Speaker 2: You and I can go home right now.
Speaker 6: Yep.
Speaker 1: What Cameron Dawson said there, folks, is gospel. She's looking
Speaker 1: at thirty five stocks. Let's double it, seventy stocks. The
Speaker 1: streets out there looking at three thousand stocks because it's
Speaker 1: a marketing employ to keep us busy.
Speaker 2: There's like seventy stocks.
Speaker 3: You can actually put My lecture's over continue.
Speaker 5: What sectors do you guys like right now at Cameron,
Speaker 5: I mean, I'm wondering, do I is tech still going
Speaker 5: to lead this market going forward?
Speaker 4: For example, I'm so torn. It's definitely a head and
Speaker 4: a heart kind of moment because what I see with
Speaker 4: tech is that you see a lot of concentration positioning
Speaker 4: becoming very crowded. It's saw huge inflows, forty billion dollars
Speaker 4: of inflows. It's also very expensive. It's trading at its
Speaker 4: twenty one peak valuation, so COVID policy era pat valuation. However,
Speaker 4: Tech and communications are the only sectors in the S
Speaker 4: and P five hundred that have seen positive earnings revisions
Speaker 4: in the last six months. So until you see earnings
Speaker 4: revisions for value type sectors turn positive, I don't think
Speaker 4: that value can outperform.
Speaker 2: Okay, Pharaoh's not here. I mean, I gotta do soccer
Speaker 2: talk with you. Only I'm gonna get through the day.
Speaker 3: Boy, I got to wake up from the surveillance nap.
Speaker 1: I got Tottenham Manchester City today in the FA Cup.
Speaker 1: Do you think the Tots can do it?
Speaker 4: I've never been more nervous to answer a questions.
Speaker 2: John Pharaoh. That's all there is. Turn around it's like
Speaker 2: it's there.
Speaker 1: It's like it's like it's like, you know, all I
Speaker 1: can say, folks, this is a ginormous.
Speaker 3: Game three pm, Paul, this afternoon.
Speaker 2: Really and it's Tom Now.
Speaker 1: Adele's going to be there, Emma's going to be there,
Speaker 1: coming back from Australia.
Speaker 7: Wow.
Speaker 2: They called me up, they say they'd be there. You know,
Speaker 2: bring John Yep. It's like a huge game at Manchester.
Speaker 2: He should win. All right, we'll tune in, we'll see.
Speaker 2: Thanks for the soccer talk.
Speaker 8: That is great.
Speaker 2: Okay, you did not off.
Speaker 4: There, very good entertaining.
Speaker 6: Please, you'd kill him.
Speaker 5: Conviction to be in the market, as you often say,
Speaker 5: Bob do all cross Mark Global Investments. He's the CEO
Speaker 5: and CIO over there, but he's been on the street
Speaker 5: folks for many, many years. I first started following his
Speaker 5: work when he was a Chief investment Officer Maryland's Investment
Speaker 5: Management down there, and that's sprawling Princeton campus back in
Speaker 5: the day. Bob, thanks so much for joining us here.
Speaker 5: I mean, you know, I think if we just look
Speaker 5: back a little bit, Bob, that November December last year
Speaker 5: caught a lot of people by surprise with the big
Speaker 5: rip up in markets, and then we kind of start
Speaker 5: twenty four still still looking pretty solid here. How do
Speaker 5: you think about these markets after that big, big finish
Speaker 5: to twenty twenty three.
Speaker 9: First of all, happy Friday, guys. Yes, it was an
Speaker 9: unbelievable rally in November December stocks truck mid teens.
Speaker 2: Yep.
Speaker 9: That's like a year and a half's work in two
Speaker 9: months over the long term, and that's a big number.
Speaker 9: And of course it all came because the Fed said,
Speaker 9: not explicitly, we're gonna pivot, We're done raising rates, and
Speaker 9: you know, it's happy, happy land again, and bonds took off,
Speaker 9: and stocks took off, took off, and credit spreads narrowed.
Speaker 9: We came into the year, we had a little bit
Speaker 9: of a hangover. I'm not convinced we aren't gonna get
Speaker 9: some more of that. On the average stock having done
Speaker 9: well with those small stocks catching up in November December,
Speaker 9: has lagged or down year to date, while the broad
Speaker 9: averages you guys point out are up a bit. So
Speaker 9: I'm all concerned, And my biggest concern is earnings, which
Speaker 9: we can talk about if you like.
Speaker 5: Absolutely that's where I wanted to go. Bob, I kind
Speaker 5: of felt like, just looking at that performance at the
Speaker 5: end of last year, it was, as you mentioned on
Speaker 5: that fed pivot. So I'm wondering, now, now what's the driver?
Speaker 5: And I kind of feel like, as a former equity
Speaker 5: analyst who still thinks earnings matter, I think earnings need
Speaker 5: to really come through here. I'm not sure we're gonna
Speaker 5: get it here. How do you think about the earnings
Speaker 5: risk here in this market?
Speaker 9: I think the risk exists, especially with PE ratios over twenty.
Speaker 9: You know, if the PE were fifteen or sixteen, maybe
Speaker 9: we could relax on earnings. But not true fourth quarter
Speaker 9: earnings they're coming through fast and furious. On October first,
Speaker 9: when that quarter started, analysts expected earnings to be up
Speaker 9: for the quarter seven percent. That number is now plus one.
Speaker 9: From plus seven to plus one. That's a much bigger
Speaker 9: decline than usual. Of course, they set up so there
Speaker 9: are beats, and the beats last I saw are running
Speaker 9: in the low sixty percents, which is the lowest we've
Speaker 9: seen in quite some time. And analysts have not done
Speaker 9: a whole lot yet to their twenty twenty four numbers.
Speaker 9: Is the fourth quarter is disappointing them a bit. They're
Speaker 9: waiting for the conference calls to figure out how to
Speaker 9: take how much to take twenty twenty four down, those
Speaker 9: numbers will come down some more.
Speaker 3: In my view, Bloomberg surveillance.
Speaker 1: Retirement planning, We're never retiring, so we'll talk about it
Speaker 1: for you, Bob Dahl, let's talk about retirement planning.
Speaker 3: Rebalancing is all out there.
Speaker 1: If I had to rebail whatever the timeline is, quarterly,
Speaker 1: semi annual, yearly, every five years, whatever I would have
Speaker 1: sold Microsoft six years ago, or at least lightened up.
Speaker 1: You need to explain to me the marketing racket of
Speaker 1: target date funds. You fought against that your entire career.
Speaker 1: What's the problem with over rebalancing.
Speaker 9: So the first problem of those target day funds is
Speaker 9: I think they're too conservative. You know, if we retired
Speaker 9: at sixty five and died at sixty six, different story.
Speaker 9: But life expectancy continues to get longer. So the mixes
Speaker 9: are and my view, too conservative. And then when you rebalance,
Speaker 9: you constantly rebellance out of things that are working into
Speaker 9: things that are not. There's some merit to that on
Speaker 9: a long term basis, But if you're already starting too conservative,
Speaker 9: you can really rip into your retirement savings.
Speaker 1: Well, Sweeney, you nailed this with your first question of
Speaker 1: the morning, saying what about holding your winners in that
Speaker 1: The guy that lectured me on this was a gentleman
Speaker 1: from Saint Louis. I've never forgiven him for not buying
Speaker 1: the cardinals from the Bush family.
Speaker 3: Benjamin S. Edwards, a third of a G.
Speaker 7: Edwards.
Speaker 3: Ben Edwards would scream at me, do not sell your winners,
Speaker 3: Bob Dahl one.
Speaker 5: Oh one, Hey, Bob, twenty twenty four, whether way like
Speaker 5: it or not, is an election year. You've been through
Speaker 5: so many cycles, Bob, does this factor into your outlook?
Speaker 5: What do you tell your clients here in what could
Speaker 5: be a volatile, you know, electoral cycle.
Speaker 9: Hell yeah, I think have patients. Don't look for stock
Speaker 9: where you think the valuation's going to go up, the earnings,
Speaker 9: the cash flow. Just be very cautious in terms of
Speaker 9: the kinds of things you're buying. That's advice all the time,
Speaker 9: but in periods of uncertainty, in periods when the PE's
Speaker 9: over twenty, you've got to pay attention to that. The
Speaker 9: election is going to create some uncertainty. Of course, the
Speaker 9: nominees are just about wrapped up about the earliest ever.
Speaker 9: So this general election campaign's going to seem like years.
Speaker 7: So yeah, exactly just what we all need.
Speaker 5: Maybe the TV stations with all the advertising dollars, maybe
Speaker 5: they'll benefit here, So, Bob, you know, I'm also wondering,
Speaker 5: as I talked to a lot of investors, did the
Speaker 5: move we saw in the markets again in November December
Speaker 5: was I kind of buy the rumor and now sell
Speaker 5: the news because what can the Fed do? The expectations
Speaker 5: already kind of in the market, it seems like.
Speaker 9: Their expectations, and then summer in the market, as you know,
Speaker 9: we got at one point the expectation that Fed fund
Speaker 9: futures were saying seven cuts by the this year. That's
Speaker 9: backed off the six. I think it's gonna be more
Speaker 9: like three or four. I think inflation remain sticky, especially
Speaker 9: wage rate inflation, and it's gonna be tough for the
Speaker 9: FED to do as much as the future's curve is suggesting.
Speaker 9: So yes, we've bought the rumor. I think there'll be
Speaker 9: some disappointing news to come if we can't get six cuts.
Speaker 1: Bob, do I want to finish up here just with
Speaker 1: the oddity of the moment, which is cash at five percent,
Speaker 1: What actually happens if rates come down? I mean, pria
Speaker 1: miser over JP Morgan is saying the ten year real
Speaker 1: rate's gonna come down to here one percent.
Speaker 2: I'll believe it when I see it.
Speaker 1: But if we get lower yields on money market funds,
Speaker 1: how does that change our retirement investing?
Speaker 9: Look, I think, and that's probably I hope inevitable we
Speaker 9: get that at some point Tom. The problem it will
Speaker 9: probably be because the economy is disappointing, and that's why
Speaker 9: those rates will come down. That means earnings will disappoint
Speaker 9: even more that we're discussing here, which I think creates
Speaker 9: some sell off in stock. So the best beneficiary of
Speaker 9: here to down one hundred basis points and short rates
Speaker 9: is probably bonds out the curve.
Speaker 2: We'll have to see.
Speaker 1: Bob Dol, thank you so much, greatly appreciate with grossmark
Speaker 1: this one of your This is an important interview, and
Speaker 1: this is what's great about this. When you go to
Speaker 1: Trinity and Dublin. The answer is you develop internal humility.
Speaker 1: And David Kelly owns a high ground. I'm being humble
Speaker 1: in his certitude. He's with JP Morgan, they're chief global strategist.
Speaker 1: David Kelly, you had one of the great insights hedged
Speaker 1: this year, which is, at some point non farm payrolls.
Speaker 2: Are gonna go negative. There's gonna be a.
Speaker 3: Vector of a lower growth than non farm payrolls.
Speaker 2: Well, okay, it didn't happen. I get it.
Speaker 1: You know, it's very good employment here. How do you
Speaker 1: adjust your trend? There a non farm payrolls going from
Speaker 1: say one hundred and seventy thousand down to zero. What's
Speaker 1: that timeline rule?
Speaker 10: Growth was a little bit stronger than we thought in
Speaker 10: the second half of the year. I still think that
Speaker 10: there's enough volatility in those payroll numbers and in the
Speaker 10: seasonals that at some stage over the next few months
Speaker 10: you might get that negative payroll number. But you know,
Speaker 10: the headline is what we've seen in the second half
Speaker 10: of the last year is US economy can grow faster
Speaker 10: without growing hotter.
Speaker 7: So the inflation rate is right on.
Speaker 10: Where the Fed thought it was going to be in
Speaker 10: their December forecasts. But growth is a good deal stronger
Speaker 10: three point one percent a year over year growth in
Speaker 10: the fourth quarter, which is very good news. This is
Speaker 10: actually a very healthy economy, good productivity growth, and inflation
Speaker 10: is still coming down.
Speaker 5: So David, I kind of agree with you. The numbers
Speaker 5: seem pretty solid. Yet the sentiment out there and just
Speaker 5: the general reportings, people don't feel like the economy is
Speaker 5: doing that well. And then University of Michigan last week
Speaker 5: put a big, big, consumer you know, positive number out
Speaker 5: there in terms of expectations, and I know, as a
Speaker 5: Michigan State man, you don't like to quote the universe
Speaker 5: in Michigan consumer survey, but it's pretty big out there.
Speaker 2: Talk to us about.
Speaker 5: Sentiment out there in the marketplace. What are you feeling
Speaker 5: here as you kind of do work.
Speaker 10: Yeah, you know, even when I was working in Michigan State,
Speaker 10: we had a close relationship with the University of Michigan
Speaker 10: and their Consumer Sentiment project, which is a very old project.
Speaker 10: But what I think we're seeing a little bit of
Speaker 10: a break in the ice here because we were in
Speaker 10: an extraordinary situation even as recently as two or three
Speaker 10: months ago, where you had, you know, by the number
Speaker 10: is a top quintile economy. I mean, it was a
Speaker 10: really good economy in terms of inflation coming down and
Speaker 10: unemployed really low for a long time, and yet you
Speaker 10: had a bottom quintile attitude. People felt just awful about it.
Speaker 10: And if you have good number after good number after
Speaker 10: good number of the economy, eventually confidence bounces.
Speaker 7: And that is what we've seen.
Speaker 10: And I think that's important because once confidence begins to balance,
Speaker 10: it begins to gather on itself, and people, you know,
Speaker 10: start reporting in a good economy and saying, you know, well, though,
Speaker 10: there is opportunity here. So I think I think confidence
Speaker 10: will get better. It's still lower and will I think
Speaker 10: continue to be lower than the numbers would justify. But
Speaker 10: we are seeing some improvement of confidence here.
Speaker 5: You know, I'm just speaking for the average consumer out there.
Speaker 5: I look at gasoline prices and that just filled up
Speaker 5: the new car two dollars and ninety seven cents a gallon.
Speaker 7: That was awesome.
Speaker 5: Down at the Jersey Shore, everything's better down at the shore,
Speaker 5: of course. But then even mortgage rates are coming down,
Speaker 5: so the couple of things that really hit people's pocketbook
Speaker 5: are coming down. And maybe that's kind of coming through
Speaker 5: some of the official data.
Speaker 10: Well, yeah, I think lower gasoline prices are really important.
Speaker 10: But what also happened though, in the last few years,
Speaker 10: we had a big increase in food prices yep. And
Speaker 10: the problem is that people remember what the food used
Speaker 10: to cost and then what it costs now, and that
Speaker 10: jars on them a little bit. So I think that's
Speaker 10: part of the story. But you know, lower gasing prices
Speaker 10: will will help. And then the one other thing I
Speaker 10: think is very important is high rents. I mean, there
Speaker 10: are a lot of people in America who rent, and
Speaker 10: rent is still very high relative disposable income, and so
Speaker 10: it's still a struggle and I think people that's what
Speaker 10: all reflecting the confidence numbers. But over time it is
Speaker 10: a good economy. He's generating strong real wage growth. But
Speaker 10: right now, you know, wages are growing fastization.
Speaker 7: I think the mood should continue to improve.
Speaker 1: David, You've got such a great background here from University
Speaker 1: College London over Intos. Paul mentioned Michigan State, Lansing, Michigan
Speaker 1: and East Lancing, and I got a lot of emails
Speaker 1: this week criticizing me because basically it's a fancy people
Speaker 1: on the east coast, West coast, and there's flyover America,
Speaker 1: and I would take it even further to say Wisconsin,
Speaker 1: there's Madison, and then there's basically you know, there's these
Speaker 1: academic center holes where things are good, maybe Ames Iowa.
Speaker 1: You know, I'm saying that, But David, how partitioned is America?
Speaker 1: From where you sit, We're saying it's a boom economy,
Speaker 1: and I'm getting a lot of emails says, who, I mean,
Speaker 1: how partitioned are we? Well?
Speaker 7: I think we are politically very partitioned.
Speaker 10: I feel very fortunate that when I arrived in America,
Speaker 10: I headed straight for the middle of the country Lansing, Michigan,
Speaker 10: and even heard about But you do get a sense
Speaker 10: of how people in the middle of the country feel.
Speaker 10: But there is a big political divide here. There's also
Speaker 10: an income divide. If you're in the top ten percent
Speaker 10: or top twenty percent of households, you're probably doing fine.
Speaker 7: If in the bottom eighty.
Speaker 10: Percent, you had that inflation, you had some some wage increases.
Speaker 10: But you know, there are services which are that sixty
Speaker 10: percent of families live paycheck to paycheck, and that's pretty grim,
Speaker 10: you know, year after year after year, particularly when you
Speaker 10: go through the pandemic and all this sort of social
Speaker 10: isolation that caused from particularly given the social media feed
Speaker 10: the cable media feeds. So there's a lot of negative
Speaker 10: news being inflicted upon people who are just scraping by,
Speaker 10: and I think that that leads to this mood, even
Speaker 10: though when we look at the numbers, the economy is
Speaker 10: very good by historical standards and getting better.
Speaker 5: David, you are the chief global strategist at what I
Speaker 5: think is the most global investment bank financial services company
Speaker 5: in the world, JP Morgan. Can the US economy continue
Speaker 5: to do well performed when we've got Europe slower than
Speaker 5: expected growth, slower than they would like to see, China
Speaker 5: really not doing well. Can the US continue to outperform?
Speaker 10: I'm just back from Stockholm yesterday and I'm heading off
Speaker 10: to Tokyo next week, so that this is a good time.
Speaker 7: To ask me that.
Speaker 10: But I think I think the answer is yes. And
Speaker 10: the big difference I think between the US and other
Speaker 10: nations such as China, Japan, or Europe is that US
Speaker 10: consumers are just that much more exuberant. I mean, we
Speaker 10: spend money we don't have on stuff we don't know, willing,
Speaker 10: we're willing to do it, whereas in Europe they're all
Speaker 10: busy saving this they haven't spent their pandemic savings, and
Speaker 10: they won't spend their fiscal money that they all awarded
Speaker 10: themselves to try and you know, to the pandemic, and
Speaker 10: equally in China and Japan, the savings are just very,
Speaker 10: very cautious. And you know, we spend beyond our means,
Speaker 10: but by spending beyond our creation spend. And that's really
Speaker 10: the difference really the American economy and the European and
Speaker 10: Asian economies.
Speaker 1: Right now, Missus King's favorite guest, Missus King's favorite guest, David.
Speaker 2: Kelly go away. He's a JP Morgan there.
Speaker 1: It's like a Davos conversation, except it's actually going to
Speaker 1: be more focused, tighter, and it affects every single one
Speaker 1: of us in our addiction to all this technology. And
Speaker 1: of course, what Paul and I believe is the study
Speaker 1: of what in God's name is this doing to our children?
Speaker 1: And we'll get to the Dodgers. Frank McCourt joins.
Speaker 7: Us right now.
Speaker 1: He's legendary. The family is definitive in Boston business history.
Speaker 1: They've husband that over generations, culminating in the ownership of Marseille,
Speaker 1: the French football team in a wandering I mean, he's
Speaker 1: sort of made the modern Dodgers, So I mean We'll
Speaker 1: talk to him about that in a minute, but let's
Speaker 1: get to the important business at hand right now. Frank McCourt,
Speaker 1: I love Project Liberty. It's basically saying we got some
Speaker 1: things to worry about here. Let's talk about how it
Speaker 1: came together. How did you put together Project Liberty involving
Speaker 1: academics looking at technology.
Speaker 11: Yeah, well, a good morning, guys. It's nice to be
Speaker 11: with you. Yeah, it's a look. I come from a
Speaker 11: family of that you alluded to, a builders for over
Speaker 11: one hundred and thirty years, we've been focused on building
Speaker 11: things and fixing problems and so forth. And what's going
Speaker 11: on with the Internet right now? It's an engineering problem.
Speaker 11: I mean, we have a flawed design, an internet that's ubiquitous,
Speaker 11: that was never designed to do the things that's doing.
Speaker 11: And so we see the harms and in those harms
Speaker 11: are as you mentioned to children. You know, we now
Speaker 11: the research is in then we're seeing that that social
Speaker 11: media in particular is highly addictive and really really high kids.
Speaker 11: It's also it's also undermining democracy and our ability to govern.
Speaker 8: So it's not just limited to children.
Speaker 11: So what we thought we might do is set out
Speaker 11: and put forward a solution rather than just recycling around
Speaker 11: the problem.
Speaker 2: And Frank, what's so important here?
Speaker 1: And I think a large body of our audience, whatever
Speaker 1: their political persuasion, would say, whatever we do, we don't
Speaker 1: need a government policy because it's probably not going to
Speaker 1: work and it's going to take you know, longer. It's
Speaker 1: going to take longer, Paul, for the government policy to
Speaker 1: click in to when the red sox get above five hundred.
Speaker 2: But Frank McCourt, what's so important to me is you
Speaker 2: have to speak to our tech leaders and basically say
Speaker 2: do something. When you do that, how do they respond?
Speaker 8: Well, it's interesting.
Speaker 11: First of all, I think you're right that we need
Speaker 11: to innovate our way forward here, not regulate our way.
Speaker 2: Thank you.
Speaker 11: This country is full of creative people, of innovators, and
Speaker 11: we can solve this problem fixing the the the engineering problem,
Speaker 11: as I say, fix fixing how the internet works so
Speaker 11: that individuals have ownership and control of their data and
Speaker 11: we return agency to individuals and they have a voice
Speaker 11: in how these platforms work, rather than these black boxes
Speaker 11: that we all sit and wonder like what's going on?
Speaker 11: And also, by the way, we individuals who are creating
Speaker 11: the data share in the economic benefits. So let's let's
Speaker 11: focus on that and and we can we can innovate
Speaker 11: our way forward. The challenge, of course, is going to
Speaker 11: be getting people to migrate to this new world because
Speaker 11: as we said earlier, these existing platforms are highly addictive
Speaker 11: by design, uh and and doing a great deal of damage.
Speaker 11: So we need to really really take a step back
Speaker 11: and before we make this this technology more powerful, you know,
Speaker 11: with generative AI and so forth. And make no mistake,
Speaker 11: generative AI is just a more powerful version of the
Speaker 11: same thing we have now, which is obviously causing massive,
Speaker 11: massive harms and problems. Let's fix the tech and then
Speaker 11: and then enjoy the innovation and the creativity and the
Speaker 11: power of AI. As far as tech leaders and so forth,
Speaker 11: I think big tech is just watching right now. They
Speaker 11: I don't imagine they're going to give up their model easily,
Speaker 11: which is essentially surveilling us and scraping our data, aggregating
Speaker 11: it and then applying, you know, algorithms that work for
Speaker 11: them and not work for us. And so we need
Speaker 11: to reprioritize now and put people at the forefront, not platforms.
Speaker 5: So, Frank, when I was kind of reading through your
Speaker 5: notes here, and reading about Project Liberty.
Speaker 7: Well you could.
Speaker 5: I'm sure you have a tremendous amount of support out
Speaker 5: there if you pull just the average person out there
Speaker 5: about the aims of Project Liberty. However, I kind of
Speaker 5: feel like it's too little, too late. That the industry's
Speaker 5: already evolved, and the business models have been developed, and
Speaker 5: the ecosystem is so entrenched. Is there a concern that
Speaker 5: the industry it just might be too late.
Speaker 8: Maybe I don't believe so at all.
Speaker 11: I do believe if we sit back and do nothing,
Speaker 11: then we can pretty much predict the outcome here, right,
Speaker 11: I mean, people know, and you're right. I just came
Speaker 11: back from Davos and the number one issue there in
Speaker 11: people's minds was missing disinformation and how that is destroying
Speaker 11: not only democracy, but someday we'll destroy capitalism. Because remember,
Speaker 11: both our capitalist system and our democratic system are both
Speaker 11: built on one simple but important concept, and that is trust.
Speaker 11: And when you destroy trust, both of those systems, both
Speaker 11: democracy and capitalism will fail over time. So we need
Speaker 11: to restore trust. So we need to fix this. It
Speaker 11: may be a challenge, and there's no question about it.
Speaker 11: This is not going to be simple or easy. Although
Speaker 11: The tech part of it is actually quite straightforward because
Speaker 11: we now have over five hundred and fifty thousand people
Speaker 11: who have joined this new Internet by using a web
Speaker 11: two app by the name of me We and those
Speaker 11: they're twenty million users are migrating over to DSMP, which
Speaker 11: is this new protocol.
Speaker 8: So it's happening, and I just think we need.
Speaker 11: To socialize this and our choices do nothing and see
Speaker 11: further harms or do something, And Frank.
Speaker 2: I want to talk about do nothing.
Speaker 1: When I was a tiny lad my grandfather took me
Speaker 1: up a dirt hill in LA and said, this is
Speaker 1: where the Dodgers are going to play.
Speaker 2: And of course this is all.
Speaker 1: The emotion of the move from New York City, from
Speaker 1: Brooklyn out to LA along the way News Corp happened
Speaker 1: along and.
Speaker 2: It wasn't pretty.
Speaker 1: You were a pinata out in LA with your ownership
Speaker 1: of the Dodgers. But the fact is you were the
Speaker 1: first one to make the Dodgers start winning. That was
Speaker 1: let's call it ten fifteen years ago. How do you
Speaker 1: perceive what you wrought and what they took forward? When
Speaker 1: we look now at the Pacific Rim Dodgers is arguably
Speaker 1: the team of Asia. What are the new Los Angeles
Speaker 1: Dodgers to Frank McCord, Yeah, I.
Speaker 8: Mean I think they're there.
Speaker 11: You know, look, they've always been an epic franchise, one
Speaker 11: of the great brands in all of sports. You know
Speaker 11: when I when I bought them from from Rupert Murdoch,
Speaker 11: they were they kind of got off the track. The
Speaker 11: team hadn't won a postseason game in sixteen years, if
Speaker 11: you can imagine that, and and you know, things were
Speaker 11: kind of run down, and the brand had lost a
Speaker 11: bit of its luster. And we were able over time
Speaker 11: to restore that and and restore the prominence of the
Speaker 11: team and get into back to back, you know, National
Speaker 11: League Championship Series and eight No. Nine for the first time,
Speaker 11: and you know, thirty five years and it was we
Speaker 11: got them back and brought.
Speaker 8: In some great young talent.
Speaker 11: You know. Clayton Kershar was one of the folks that
Speaker 11: really led the way with our you know, in terms
Speaker 11: of our scouting and player development, and built a new
Speaker 11: training facility in Phoenix, Camelback Ranch and closer to our fans,
Speaker 11: and by the way, took the team to China to
Speaker 11: play the first and only major baseball games that have
Speaker 11: ever been played there in two thousand and eight and
Speaker 11: reconnected with the past. Remember, the Dodgers had a relationship
Speaker 11: in Asia. It just needed to get them be refreshed.
Speaker 11: And now you've seen the recent players that the current
Speaker 11: managhip as signed.
Speaker 8: It pretty awesome, right, Frank.
Speaker 1: We're out of time. I could go on forever about this.
Speaker 1: I'm genuinely excited about. I can't believe him saying this.
Speaker 1: The evil Los Angeles Dodgers.
Speaker 6: They're gonna kill it.
Speaker 1: Frank McCord of Boston and always the guy that helped
Speaker 1: resurrect one of the great story franchises of America. This
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