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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the Bloomberg Surveillance Podcast. Catch us live weekdays

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Speaker 2: at seven am Eastern on applecar Player, Android Auto with

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Speaker 2: the Bloomberg Business App. Listen on demand wherever you get

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Speaker 2: your podcasts, or watch us live on YouTube. It has

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Speaker 2: been far too long.

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Speaker 3: Alicia Levine of B and Y brings an absolutely prodigious

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Speaker 3: mathematical almost cross mathematical skill into investment analysis. We go

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Speaker 3: Euclidean with it right now. Ben Ladler's talking about third year?

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Speaker 3: Could we go up twenty percent again? Can you be

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Speaker 3: that bullish about three years of big double digit growth?

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Speaker 4: So in theory I could be. But in our twenty

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Speaker 4: twenty five outlook, we're up about ten percent for next

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Speaker 4: year simply because it is the third year after the

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Speaker 4: bottoming of the bear market, and typically in that third

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Speaker 4: year you just don't have those huge gains that you

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Speaker 4: see in the first year out from is it.

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Speaker 5: A multiple expansion and earning, So it's earning.

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Speaker 4: So we're as you know, we're twenty two times forward earning,

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Speaker 4: so we're looking for we're looking for earnings to really

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Speaker 4: carry it because we the multiple was up about three

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Speaker 4: times in the last year there was you know, okay,

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Speaker 4: earnings growth about eight percent and the rest was the multiple.

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Speaker 4: So you need earnings now to really kick it. And

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Speaker 4: that's what we see. And you're not going to be

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Speaker 4: up twenty percent in earning.

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Speaker 5: I'm sorry, I'm coffin. I choked in my tang. Excuse exactly, Alicia.

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Speaker 6: We haven't had a pullback and I can't remember how long.

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Speaker 6: I mean, I guess you go back to July and

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Speaker 6: it was eight or nine percent, but in two days, yes, exactly.

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Speaker 6: That's not healthy for a longer term bull market, is it.

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Speaker 4: So the average draw down, even in years where you're

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Speaker 4: up twenty percent, is actually about twelve percent. Okay, So

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Speaker 4: this year the most we got was about eight percent,

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Speaker 4: So it's very easy, steady year of gains. I think

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Speaker 4: next you're going to see more volatility. We do think

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Speaker 4: the year ends higher, and we're at sixty six hundred

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Speaker 4: for the end of the year. But I just want

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Speaker 4: to take everybody to the wayback machine and think about

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Speaker 4: the late nineties when the FED cut into a soft landing,

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Speaker 4: when there was no recession. We had five years in

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Speaker 4: a row of twenty percent plus growth. Okay, So if

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Speaker 4: we're really thinking about it, you know, we're Our view

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Speaker 4: is we're not heading towards the recession. The FED this

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Speaker 4: year alone is cutting one hundred basis points. Even if

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Speaker 4: they can't cut as much as they projected back in September,

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Speaker 4: we think with the inflation picture they're not going to

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Speaker 4: be able to The growth picture is better than expected.

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Speaker 4: You could see another a third year of really nice

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Speaker 4: returns in the SMP. There's historical precedent for it. We

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Speaker 4: just think it's more volatile with different policies coming through

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Speaker 4: with the new administration.

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Speaker 6: Did you guys change your outlook for investing in twenty

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Speaker 6: twenty five given what we saw in the elections just

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Speaker 6: last month?

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Speaker 4: So we we've been bullish for about almost twenty to

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Speaker 4: twenty two months. Here we took back.

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Speaker 5: I thought you're going to say five years but continue.

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Speaker 4: Well, you know, we look we like everybody else, you know,

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Speaker 4: given history, thought when the Fed's cutting this quickly, they're

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Speaker 4: balance or break something. But really it was the Silicon Valley,

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Speaker 4: the saving of the depositors from the Silicon Valley crisis

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Speaker 4: and the standing up of all those lending facilities at

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Speaker 4: the FED that sort of stopped the financial crisis that

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Speaker 4: would lead to a recession. So after that we got bullish.

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Speaker 4: We've been positioned overweight, you know, US large cap for

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Speaker 4: a long time. You still are, We still are and

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Speaker 4: we you know, two years ago we underweight by we

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Speaker 4: went to a large underweight on international and emerging markets,

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Speaker 4: and we've kept that because we think in a world

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Speaker 4: where the FED can't cut as much.

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Speaker 5: Stop it, you're not playing fair rules. You've got Jeff

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Speaker 5: for you.

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Speaker 4: I mean, I did well.

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Speaker 3: It's all you know, just it's all you gotta know.

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Speaker 3: You don't have to think about this, Jeff, what do

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Speaker 3: we think? Thumb upper, thumb down. That's the real world.

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Speaker 4: That's the Yeah, how about it here we speak all

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Speaker 4: the time.

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Speaker 5: You're too young to remember this.

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Speaker 3: But the late nineties, folks, there was a modest technology overlay.

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Speaker 5: Sweeney and I woke up in March.

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Speaker 3: Of two thousand or two thousand and one and said, oh,

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Speaker 3: there's no profit.

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Speaker 5: What a shock.

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Speaker 3: We have the same technology overlay right now, but we've

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Speaker 3: got profit with it.

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Speaker 5: Is that the theory.

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Speaker 4: The theory is the profit is better. Let's go back

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Speaker 4: to the late nineties. Starting in the late nineties, you

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Speaker 4: saw a steady increase in the operating margins of the SMP,

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Speaker 4: which created a higher multiple regime for the SMP. If

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Speaker 4: you just go back in time and you get your

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Speaker 4: average of sixteen times forward earnings, well, your margins were

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Speaker 4: also nine to ten percent. Now we're looking at thirteen

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Speaker 4: and a half percent for next year, and that's because

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Speaker 4: it's being driven by the cash flow of tech, and

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Speaker 4: so the companies are healthier. It's not just earnings, it's

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Speaker 4: free cash flow. Margins are better, keeping the multiples higher.

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Speaker 4: You've got a healthier market, and the pricing of tech

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Speaker 4: compared to the rest of the market on a relative basis,

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Speaker 4: is actually lower than it was in twenty twenty one,

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Speaker 4: nineteen ninety nine and other periods where there was a

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Speaker 4: tech boom or you know, a technology change where the

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Speaker 4: market got excited about a technology change. So it's relatively

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Speaker 4: less expensive given free cash flow margins and earnings.

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Speaker 6: Alicia, you've concerned about the I think a lot of

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Speaker 6: the lack of breath in the market. S and p

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Speaker 6: SPX versus SPW, the equal weight a real divergence there,

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Speaker 6: which is actually widened down a little bit here in

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Speaker 6: the last few months. Someone with your experiences that concerned.

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Speaker 4: You. Look, it's a risk. It's a risk because then

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Speaker 4: you need those top ten companies to keep on performing.

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Speaker 4: I also think, and we've talked about it in the

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Speaker 4: context of well, you know, why do you still like

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Speaker 4: us large cap? There's a lot of talk about, you know,

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Speaker 4: overweighting small cap because of FED cutting and a boom

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Speaker 4: and of cutting regulations. That's all true. There's sort of

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Speaker 4: a safety trade. And we've really seen this in the

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Speaker 4: performance of NASAC versus the Dow. You know, over the

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Speaker 4: last let's call it ten days, the Dow's down three percent,

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Speaker 4: Nazex up three percent. These stocks are safety stocks because

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Speaker 4: there's turning.

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Speaker 3: Okay, this is really this cream up with the dining

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Speaker 3: room table over a beverage of my choice?

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Speaker 5: Is Apple a utility?

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Speaker 2: Now?

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Speaker 3: It's not Dominion Electric from a few years ago or even.

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Speaker 5: Con Ed, but is Apple?

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Speaker 3: Does Apple have utility characteristics in terms of persistency of

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Speaker 3: cash flow?

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Speaker 4: Yes, and they pretty much like the tops of the

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Speaker 4: magnal force, they have an inertial force. It's the safety play.

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Speaker 4: When rates, when rates, when raids get to four and

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Speaker 4: a half and five percent, what are you buying? You're

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Speaker 4: buying large cap tech because it's relatively immune because they

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Speaker 4: don't have to borrow to grow. And you see it.

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Speaker 4: I mean, think of what happened yesterday. Small Cap was

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Speaker 4: terrible and Nasik was down, but not that much. And

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Speaker 4: that's what you're going to see in these rate fears

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Speaker 4: that you're going to get because of rate volatility, the

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Speaker 4: inflation reads and the FED statement today.

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Speaker 3: For usyet ten seconds this B and way, let you

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Speaker 3: put an SPX target out.

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Speaker 4: Yees sixty six hundred end of twenty twenty five.

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Speaker 3: But is that going to go up here in the

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Speaker 3: next eight seconds so we can make some news.

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Speaker 4: Yes, it's good. Yes, Look I think I think the

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Speaker 4: first quarter actually could be very good. There'll be a

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Speaker 4: lot of liquidity in the market.

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Speaker 5: You're going to be in New York the first quarter.

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Speaker 4: You to wonder by I'm going to be here all

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Speaker 4: the time living on airplace.

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Speaker 3: Alicia Levin, thank you so much with B and why

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Speaker 3: just brilliant. Her mathematical construction, the geometry of her constructions

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Speaker 3: on market is just well, yeah, she got eight degrees

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Speaker 3: in math and there you know she took like differential equations.

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Speaker 5: She's found them at the dining room table with her kids,

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Speaker 5: her husband's looking at her, going would you shut up?

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Speaker 5: I don't need diffy Q at the dining room table.

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Speaker 2: You're listening to the Bloomberg Surveillance podcast. Catch us live

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Speaker 2: weekday after noons from seven to ten am. Easter. Listen

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Speaker 2: on Apple car Play and Android Auto with a Bloomberg

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Speaker 2: Business app, or watch us live on YouTube.

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Speaker 3: It is FED day, and we're not going to drown

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Speaker 3: the moment in FED chat with Jason Furman, Professor of

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Speaker 3: Practice of Economic Policy at Harvard Teaching C ten and

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Speaker 3: great on policy making as well.

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Speaker 5: I can't say enough about his.

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Speaker 3: Contribution to the zeitgeist over the last year or two

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Speaker 3: with his ecumenical study of our inflation rate. It's the

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Speaker 3: number one value add out there. I retweeted out always

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Speaker 3: and today we're going to do a conversation with the

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Speaker 3: ecumenical Jason Furman. Jason, I was talking to Chairman Bernanki

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Speaker 3: at one point and we talked about hockey stick charts

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Speaker 3: or Olivier Blanchard Aea a number of years ago after

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Speaker 3: Great Financial Crisis with a jump condition to lower growth

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Speaker 3: and then the.

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Speaker 5: Glyde bath back.

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Speaker 3: Your language right now is that we're at a hinge

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Speaker 3: moment in the American Economic experiment, discuss what that is,

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Speaker 3: what's a hinge moment and why is it now?

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Speaker 7: Yes, it's great to be with you, as always know.

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Speaker 7: The plane was coming in, it looked like it was landing,

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Speaker 7: and it is still just sort of hovering above the

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Speaker 7: landing strip. It's not that far away, you know. All

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Speaker 7: in I think I'd be quite happy about where we

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Speaker 7: are in the economy, but we're not making progress anymore

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Speaker 7: towards the Fed's two percent goal. And so the question is,

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Speaker 7: are we gonna, you know, cut inflation by a couple tents,

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Speaker 7: in which case everything is happy, soft landing, interest rate cuts,

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Speaker 7: you know, champagne everything, or do we go up a

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Speaker 7: few tents, in which case maybe the FED has rate

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Speaker 7: increases back on the table and right now you know

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Speaker 7: what happens. Sixteen hundred Pennsylvania Avenue will have some effect

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Speaker 7: on this as well.

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Speaker 6: That's kind of where I wanted to go, Jason. I

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Speaker 6: wondered just kind of if your view of this US economy,

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Speaker 6: maybe even the world economy, did it change at all

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Speaker 6: after the US elections last month.

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Speaker 7: Look like a lot of people and like the markets,

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Speaker 7: I mostly was discounting President Trump on tariffs, thinking they

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Speaker 7: were negotiating tactics that yes, we're going to get more

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Speaker 7: tariffs on China, but we're not going to get something

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Speaker 7: broad based on other countries. With each passing day, he's

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Speaker 7: either a better and more credible negotiator than I realized,

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Speaker 7: or actually believes what he's saying and is likely to

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Speaker 7: follow through and do it. So I've gotten more nervous

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Speaker 7: about the actual possibility of tariffs. I think some things

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Speaker 7: like the FED, he's been better about Scott Descent and

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Speaker 7: Kevin Hassett. We're very reassuring his picks. But I think

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Speaker 7: the big one is the tariffs, which he has a

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Speaker 7: lot of ability to do all on his own.

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Speaker 6: Tariffs go into just I guess, a broader conversation of internationalism.

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Speaker 6: I mean, I kind of came up in this business

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Speaker 6: where it was increasing globalization across the board. The world

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Speaker 6: got a lot smaller, in large part thanks to technology.

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Speaker 6: But boy, the last you know, six seven, eight, nine years,

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Speaker 6: not just in the US but around the world, it

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Speaker 6: seems like nationalism is replacing internationalism. Is that something that

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Speaker 6: is a plus or a minus or how do you

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Speaker 6: think about that?

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Speaker 7: Yeah, I mean one remarkable thing. I you're absolutely right

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Speaker 7: in your diagnosis. But one interesting thing is for the

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Speaker 7: last ten years, wages have been growing more at the

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Speaker 7: bottom in the middle than they have at the top.

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Speaker 7: We've actually had a compression of wage inequality. We've had,

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Speaker 7: you know, pretty decent income growth over the last decade,

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Speaker 7: with some serious ups and downs, especially in the inflationary period.

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Speaker 7: Productivity growth in the United States at least has actually

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Speaker 7: picked up. So in a lot of ways, things are working.

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Speaker 7: They're working perfectly. They're never working perfectly, but they're working

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Speaker 7: pretty well, which makes the turn away from globalization and

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Speaker 7: the timing of it, at least in the United States

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Speaker 7: somewhat surprising.

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Speaker 3: Jason, let's clear the area here, and I think it's

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Speaker 3: really really important.

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Speaker 5: Paul's good question.

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Speaker 3: And the future with the Trump administration, Kevin Hasset maybe

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Speaker 3: is going to drive the economic boat for President Trump.

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Speaker 5: Will see on that.

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Speaker 3: He's out of pen with Alan Auerbach. You're at a

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Speaker 3: Harvard with Greg Mankew as well on the then diagram

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Speaker 3: of Hasset Firman Firman Hasset. How much do you and

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Speaker 3: Kevin Hassett agree upon in economics and policy?

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Speaker 7: We agree on an awful lot. I'd say the main

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Speaker 7: place we disagree is taxes. He would like lower taxes,

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Speaker 7: especially on corporations and capital, and I place more of

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Speaker 7: an emphasis on productivity, and I'm more skeptical about some

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Speaker 7: of the larger growth numbers. I can't he would believe it,

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Speaker 7: although I think taxes do matter for I.

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Speaker 3: Can't emphasize enough Paul, how this is misconstrued in the media.

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Speaker 3: They want has to to be completely opposite or Furman.

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Speaker 5: And it's just not the case.

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Speaker 3: They got a substantial overlayer around the things we discuss

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Speaker 3: each day.

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Speaker 7: And Jason reasonly I did a thing with him where

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Speaker 7: he was defending the fans fifty basis point cut and

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Speaker 7: I was saying they should have done twenty five, you know,

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Speaker 7: back in September. So you know, sometimes the positions are

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Speaker 7: and even what you might predict.

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Speaker 6: And Jason just you know, on the text front here,

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Speaker 6: it seems like that likely is going to be something

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Speaker 6: that this administration is going to want to extend the

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Speaker 6: twenty seventeen tax cuts. How do you think that could

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Speaker 6: play out, should play out, will play out?

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Speaker 8: Oh?

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Speaker 7: Look, I think they're going to extend them. The question

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Speaker 7: is for how long I think that's a real shame.

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Speaker 7: There's a number of people that think you should use

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Speaker 7: what's called the current law baseline, that you shouldn't add

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Speaker 7: to the deficit as measured by CBO. If you extend

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Speaker 7: those tax cuts, you're basically locking in deficits of at

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Speaker 7: least percent of GDP, probably eight nine or ten percent

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Speaker 7: of GDP over the coming years. And that's just not

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Speaker 7: a place we should be now. In twenty seventeen, I

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Speaker 7: didn't think we could afford the cost of the tax cuts.

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Speaker 7: In twenty twenty five, it will be even less affordable,

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Speaker 7: given where the debt is, given where interest rates are.

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Speaker 3: Matt Winkler, our Emeritis Center in chief, Jason Furman just

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Speaker 3: did a summary of the facts of the Biden administration,

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Speaker 3: and you know, it was very much pro Biden, and

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Speaker 3: of course you've got a Democratic Party shingle out as well.

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Speaker 3: Is President Biden's legacy completely overwhelmed by the growth of

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Speaker 3: the debt and the deficit.

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Speaker 7: And that's a part of the legacy, and that, by

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Speaker 7: the way, played into things like the higher interest rates

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Speaker 7: we have now in higher mortgage ratements. By the way,

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Speaker 7: we're probably part of what was going on in the

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Speaker 7: election in November. There was a very strong economic recovery.

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Speaker 7: That's on the plus side. I think we overdid it

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Speaker 7: and got too much inflation. That's on the minus side.

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Speaker 7: And the inflation, I think it's underappreciated how it's eaten

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Speaker 7: other parts of the legacy. For example, the cost of

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Speaker 7: infrastructure has gone up more than spending on infrastructure, and

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Speaker 7: so in real terms, it appears that we're investing less

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Speaker 7: in many every infrastructure than we were before.

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Speaker 3: One final question, are you the grinch? And you gave

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Speaker 3: holiday reading? Forced hundreds of pages of reading to X

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Speaker 3: ten in Harvard.

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Speaker 7: I gave them their their final grades for the courts

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Speaker 7: and sent them away. There was listed some optional reading,

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Speaker 7: but no one's going to ever check on.

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Speaker 5: Okay, great inflation.

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Speaker 3: Guy Man Q was brutally dealt out seas like they

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Speaker 3: were French mints. Did you give out any ce's, Professor Furman.

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Speaker 7: There are We did give some c's. You can give

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Speaker 7: some ds.

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Speaker 5: Uh.

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Speaker 7: I don't want to talk about anything below that, but

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Speaker 7: we tried it. We tried to roughly match the average

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Speaker 7: grade and comparable courses. I don't want to penalize people

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Speaker 7: for taking economics compared to something else, because I think.

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Speaker 5: Oh, that's the whole story itself.

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Speaker 3: Was Jason Furman, of course, and I can't say enough

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Speaker 3: again about his work in describing inflation away from the blatherer,

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Speaker 3: with his ecumenical analysis of inflation, Professor Furman doles outseas

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Speaker 3: at Harley.

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Speaker 2: This is the Bloomberg Surveillance Podcast. Listen live each weekday

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Speaker 2: starting at seven am Eastern on applecar Play and Android

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Speaker 2: Auto with the Bloomberg Business App. You can also listen

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Speaker 2: live on Amazon Alexa from our flagship New York station,

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Speaker 2: Just say Alexa playing Bloomberg eleven thirty joining us right now.

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Speaker 5: It has been way, way too long.

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Speaker 3: In a different conversation, Jason Trenner, his chief investment strategist

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Speaker 3: at Strtigous, He's just been wonderful over the years of

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Speaker 3: a belief in America, a belief in capitalism, and you

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Speaker 3: participate any equity markets, Jason, for a part of this discussion,

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Speaker 3: this conversation, I have to change the dialogue, and I'm

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Speaker 3: gonna blame it at one's see Gas Sparino over at

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Speaker 3: the New York Post. Jason, are you under consideration or

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Speaker 3: are you in discussions with the Trump administration with mister

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Speaker 3: Lutnick about serving the future president of the United States.

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Speaker 8: Well, I've been down to Pon Beach and I've been

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Speaker 8: I've talked to the transition on a number of occasions,

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Speaker 8: and to be honest with you, that's about all I know.

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Speaker 8: But I'm very much willing to serve, you know, given

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Speaker 8: the right opportunity, and certainly a very supportive of the

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Speaker 8: new administration. And so it would be an honor, you know,

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Speaker 8: if asked, but you know, nothing has been asked yet.

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Speaker 8: So we'll see how We'll see how that goes. And

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Speaker 8: for the record, by the way, you'll never see me

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Speaker 8: wear birkenstocks.

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Speaker 5: Yeah, we knew that.

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Speaker 8: I'm more of a I'm more of a wingtipy, you know.

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Speaker 8: But anyway, that.

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Speaker 5: Was a safe ground there.

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Speaker 3: Yesprino goes on to say, you would be quote a

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Speaker 3: leveling force. What is the leveling force? Jason Trennard that

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Speaker 3: President Trump needs to hear from the Treasury Secretary and

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Speaker 3: from a potential trendet at sixteen hundred Pennsylvania.

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Speaker 8: Yeah, I'm sure if I were offered something, I wouldn't

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Speaker 8: exactly be a heartbeat away, by the way, and I'm

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Speaker 8: not sure President Trump needs any leveling force because I'm

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Speaker 8: very much in agreement with many, if not all, of

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Speaker 8: his policies, particularly with regard to trade. And I also

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Speaker 8: think certainly in terms of rationalizing the size of federal government.

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Speaker 8: So in my opinion, you know, I don't think any

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Speaker 8: leveling force is needed, but I would be a strong

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Speaker 8: defender of the policy.

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Speaker 3: Oh.

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Speaker 8: I know that you've talked about.

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Speaker 3: Oh, I know, Paul is if Jason dessendant Trentant joins

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Speaker 3: the Trump administration, you're going to hear President Trump talking

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Speaker 3: about Italy is the fifty second state.

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Speaker 5: Continue.

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Speaker 6: So, Jason, what do you what would you advise the

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Speaker 6: president as to economic policies in terms of a kind

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Speaker 6: of a to do list or maybe a uh, you know,

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Speaker 6: step one, step two, step three type of recommendations.

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Speaker 8: Well, listen, I think again, it's you know, it's and

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Speaker 8: I don't want to be overly. Uh. I don't want

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Speaker 8: to be presumptuous. Uh. President has a great economics team

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Speaker 8: there right now. But in my opinion, I do think

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Speaker 8: President Trump was elected for two reasons. Largely one is

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Speaker 8: I think that there's a sense that the immigration policies

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Speaker 8: of this country have gotten out of control. And have

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Speaker 8: have hurt just average Americans. And I think he's right

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Speaker 8: about that. And I also think that inflation was another

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Speaker 8: big issue. And as you know, we've created something called

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Speaker 8: the Common Man CPI, which looks at things. It's the

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Speaker 8: opposite of supercore, which which excludes food, energy, and housing,

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Speaker 8: which you know, in my opinion is all those things

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Speaker 8: are pretty core. We go the other way and we

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Speaker 8: just focus on things people have to buy. And I

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Speaker 8: do think that certainly deficit production would be a good

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Speaker 8: way to start to try to rationalize prices. It's hard

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Speaker 8: to run deficits six to seven percent of GDP continually

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Speaker 8: and then expect to make real progress on inflation, in

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Speaker 8: my opinion, So I think he's got those things right

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Speaker 8: where that's worth for him, and that's, in my opinion,

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Speaker 8: that's very very likely to be where he starts, and

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Speaker 8: that's why he was elected.

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Speaker 5: Paul.

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Speaker 3: This is important what mister Trentett's doing with inflation, like

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Speaker 3: the real inflation. Hearkens to Lawrence Cudlow, And this is

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Speaker 3: something Larry Cudlow's.

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Speaker 5: Really really been right about. Is this insistence to core.

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Speaker 5: It's not the real world after all.

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Speaker 6: Yeah, So at Jason, Ted extent that this incoming administration

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Speaker 6: would like to reduce deficits from six percent of GDP

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Speaker 6: to three percent.

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Speaker 5: How do you do that?

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Speaker 6: What's the way forward?

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Speaker 8: You think, well, listen, it's not and I don't think

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Speaker 8: you know, to be very realistic about it, and would

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Speaker 8: I would greatly suggest that we don't try to throw

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Speaker 8: the thing in reverse. You know, you didn't prison Trump

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Speaker 8: didn't create deficits of six to seven percent of GDP.

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Speaker 8: I don't think he should be expected to reduce them

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Speaker 8: to three percent in a year or two years, but

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Speaker 8: he does have four years. And I do think DOJE

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Speaker 8: is a very in my opinion, it's a very very

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Speaker 8: powerful concept. And now you're dealing with twenty percent of

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Speaker 8: the budget that isn't you know? That is discretionary. But

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Speaker 8: I do think that sets a tone for everything else.

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Speaker 8: And I do think there's a certain sense in which

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Speaker 8: you worry about the pennies and the pounds take care

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Speaker 8: of themselves. But the best way obviously, So not only

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Speaker 8: is it is it reducing wasteful government spending, but it's

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Speaker 8: also a big focus on growth, right. It is encouraging

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Speaker 8: capital formation, encouraging capital vestments so that you can grow

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Speaker 8: your way. You can grow the numerator so that the

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Speaker 8: deficits are not not the nominator rather, so the deficits

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Speaker 8: are not really as big a deal to me. That's

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Speaker 8: that's where I would I would focus more than anything

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Speaker 8: as economic growth. And then also, you know, just stop

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Speaker 8: doing dumb things. You're not always easy.

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Speaker 3: Jason Quickley, you're in the meg seven? Are you still

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Speaker 3: long long long our tech vision?

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Speaker 8: Listen. I think it's really difficult. It can work, it's

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Speaker 8: not cheap, but it's really difficult to fade these companies

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Speaker 8: because they have the cash flow with which to continue

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Speaker 8: to invest in artificial intelligence. And I would say your average,

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Speaker 8: your average CEO of a company in the United States

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Speaker 8: is more at risk of being fired by not spending

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Speaker 8: enough on these new technologies than spending too much at

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Speaker 8: least now. And I think, you know, the most of

439
00:23:00,040 --> 00:23:03,639
Speaker 8: the companies have this ability to they have the cashloads

440
00:23:03,680 --> 00:23:05,520
Speaker 8: to do that, so there's not a big risk to it.

441
00:23:05,560 --> 00:23:07,560
Speaker 8: At a certain point, there's going to have to be

442
00:23:08,680 --> 00:23:11,600
Speaker 8: They're going to have to be some sort of proof

443
00:23:11,760 --> 00:23:16,080
Speaker 8: concept that these investments are actually resulting in productivity. But

444
00:23:16,440 --> 00:23:19,880
Speaker 8: I think you have some time before those expectations get

445
00:23:19,920 --> 00:23:21,200
Speaker 8: too high.

446
00:23:21,359 --> 00:23:23,679
Speaker 3: Jason Trent and one of my heroes, William Priest, was

447
00:23:23,720 --> 00:23:27,680
Speaker 3: in the studio yesterday definitive book on free cash flow

448
00:23:28,040 --> 00:23:31,280
Speaker 3: and shareholder yield. What is the quality of the MAG

449
00:23:31,400 --> 00:23:32,720
Speaker 3: seven free cash flow?

450
00:23:33,960 --> 00:23:37,560
Speaker 8: Well, it is quite good that. One of the things

451
00:23:37,600 --> 00:23:39,679
Speaker 8: though that is changing that I think people have to

452
00:23:39,800 --> 00:23:41,959
Speaker 8: kind of keep in mind, is that these are no

453
00:23:42,040 --> 00:23:49,680
Speaker 8: longer really capital light industries because of their investments in AI. Right,

454
00:23:49,760 --> 00:23:53,280
Speaker 8: so if you look at let's say capital expenditures as

455
00:23:53,280 --> 00:23:56,360
Speaker 8: a percentage of sales, the MAG seven is actually more

456
00:23:56,400 --> 00:24:00,359
Speaker 8: capital intensive than let's say the energy sector, right, that

457
00:24:00,520 --> 00:24:03,320
Speaker 8: is a difference. And so I you know, the good

458
00:24:03,320 --> 00:24:05,840
Speaker 8: news is these companies are throwing off tons of cash.

459
00:24:06,359 --> 00:24:08,800
Speaker 8: That means that they can make their own luck as

460
00:24:08,800 --> 00:24:11,560
Speaker 8: far as stock prices are concerned. Generally speaking, they could

461
00:24:11,600 --> 00:24:14,320
Speaker 8: buy back stock or increased dividends or what have you.

462
00:24:14,760 --> 00:24:17,400
Speaker 8: But a lot of the cash flow now is being

463
00:24:18,280 --> 00:24:23,560
Speaker 8: is being directed towards towards capital investments, and so that

464
00:24:23,640 --> 00:24:25,760
Speaker 8: means that sooner or later those capital investments are going

465
00:24:25,800 --> 00:24:28,359
Speaker 8: to have to bear fruit or they're going to have

466
00:24:28,400 --> 00:24:30,800
Speaker 8: to retrench, and they'll be a repricing of those of

467
00:24:30,840 --> 00:24:33,240
Speaker 8: those stocks. So the good news they have the money,

468
00:24:33,320 --> 00:24:35,600
Speaker 8: you know. The bad news is, you know, eventually the

469
00:24:35,600 --> 00:24:38,800
Speaker 8: clock will be ticking to see whether those were good

470
00:24:38,800 --> 00:24:40,280
Speaker 8: investments or bad investments.

471
00:24:41,160 --> 00:24:43,080
Speaker 6: Jase, can you talk to us just broadly about these

472
00:24:43,119 --> 00:24:45,320
Speaker 6: markets as we head into twenty twenty five. It feels

473
00:24:45,359 --> 00:24:50,480
Speaker 6: like sentiment levels are really stretched here. I mean, valuations

474
00:24:50,480 --> 00:24:52,400
Speaker 6: are one thing. Maybe you know, the market can earn

475
00:24:52,400 --> 00:24:55,000
Speaker 6: its way into the evaluation, but boys, sentiment seems pretty stretched.

476
00:24:55,000 --> 00:24:55,840
Speaker 6: He is that a concern for you?

477
00:24:56,760 --> 00:24:59,280
Speaker 8: Hey, it's definitely a concern. I mean, and I think

478
00:24:59,359 --> 00:25:03,440
Speaker 8: financial can conditions. In my opinion, it's ironic because financial

479
00:25:03,440 --> 00:25:08,120
Speaker 8: conditions if you're rich are quite easy. Financial conditions if

480
00:25:08,160 --> 00:25:12,280
Speaker 8: you're not rich, are quite tight. And this is one

481
00:25:12,320 --> 00:25:14,439
Speaker 8: of the issues. Right, So you have some guy buying

482
00:25:14,480 --> 00:25:16,600
Speaker 8: a banana tape to a wall for six and a

483
00:25:16,640 --> 00:25:19,960
Speaker 8: half million bucks, and then there's you know, there's other

484
00:25:20,000 --> 00:25:21,480
Speaker 8: folks that can't get a mortgage.

485
00:25:21,640 --> 00:25:21,840
Speaker 2: Right.

486
00:25:21,920 --> 00:25:25,880
Speaker 8: So, but I, in my opinion, sentiment is getting kind

487
00:25:25,880 --> 00:25:28,720
Speaker 8: of frothy out there. There is a lot of excitement

488
00:25:28,760 --> 00:25:32,680
Speaker 8: about things like DOGE, there's a lot of excitement about deregulation.

489
00:25:33,600 --> 00:25:36,800
Speaker 8: All of those I think are worthwhile. The thing we're

490
00:25:36,840 --> 00:25:40,480
Speaker 8: watching very closely to determine when to get more concerned

491
00:25:40,760 --> 00:25:44,280
Speaker 8: about equities really is the tenure treasure yield we've seen

492
00:25:44,480 --> 00:25:48,000
Speaker 8: since this bull market started in October of twenty twenty two,

493
00:25:49,320 --> 00:25:52,119
Speaker 8: there have been three major corrections since then in the

494
00:25:52,160 --> 00:25:55,200
Speaker 8: bull market. Two of them were associated with tenure treasure

495
00:25:55,240 --> 00:25:58,480
Speaker 8: yields above four and a half. The third was associated

496
00:25:58,520 --> 00:26:04,320
Speaker 8: with an end to the end carry trade in August. So,

497
00:26:04,880 --> 00:26:06,879
Speaker 8: in our opinion, four and a half to five percent

498
00:26:07,000 --> 00:26:08,760
Speaker 8: is a little bit of the red line for risk

499
00:26:08,840 --> 00:26:13,280
Speaker 8: on and if yields rise to four and a half

500
00:26:13,359 --> 00:26:15,360
Speaker 8: to five, we're going to start We're going to start

501
00:26:15,359 --> 00:26:18,840
Speaker 8: to lighten up a little bit, not necessarily to get bearish,

502
00:26:19,119 --> 00:26:21,200
Speaker 8: but maybe get a little bit more defensive and raise

503
00:26:21,200 --> 00:26:22,200
Speaker 8: a little bit more cash.

504
00:26:23,200 --> 00:26:24,720
Speaker 6: Jason, what do you need to hear from your Federal

505
00:26:24,760 --> 00:26:25,840
Speaker 6: Reserve chairman this efnoon?

506
00:26:27,520 --> 00:26:31,120
Speaker 8: Well, listen, I would like to hear that they are

507
00:26:32,160 --> 00:26:35,359
Speaker 8: very aware that there is not an insignificant chance of

508
00:26:35,400 --> 00:26:38,439
Speaker 8: another wave of inflation. I know that kind of ruins

509
00:26:38,480 --> 00:26:42,240
Speaker 8: the party a bit, but I also believe that to

510
00:26:42,280 --> 00:26:45,560
Speaker 8: be true. And tenure treasure yields are up seventy basis

511
00:26:45,560 --> 00:26:49,800
Speaker 8: points since the FED first eased. Mortgage rates are up

512
00:26:50,160 --> 00:26:53,040
Speaker 8: since the FED first east, and there is a fair

513
00:26:53,080 --> 00:26:56,600
Speaker 8: amount of historical precedent. Don Rismoler, or chief Economist, did

514
00:26:56,640 --> 00:26:59,639
Speaker 8: some great work on waves of inflation, and what he

515
00:26:59,720 --> 00:27:02,200
Speaker 8: found was that once you had one wave of inflation

516
00:27:02,320 --> 00:27:05,640
Speaker 8: over six percent, the chances of getting another wave are

517
00:27:05,680 --> 00:27:08,720
Speaker 8: about nine to ten. And he looked at about two

518
00:27:08,720 --> 00:27:11,639
Speaker 8: dozen countries over one hundred years. Part of that is

519
00:27:11,680 --> 00:27:16,760
Speaker 8: because wages. There are pent up demand for wages, and

520
00:27:16,800 --> 00:27:19,880
Speaker 8: you're seeing that with let's say Boeing machinists getting thirty

521
00:27:19,920 --> 00:27:22,919
Speaker 8: eight percent over four years long short and getting sixty

522
00:27:22,920 --> 00:27:25,280
Speaker 8: two percent over six years. Part of that is to

523
00:27:25,359 --> 00:27:27,960
Speaker 8: make up for the fact that their standard of living

524
00:27:27,960 --> 00:27:31,520
Speaker 8: declined when inflation rose the first time. So once the

525
00:27:31,520 --> 00:27:34,280
Speaker 8: toothpaste is out of the tube, inflation is kind of hard.

526
00:27:34,320 --> 00:27:36,240
Speaker 8: It's harder to get it back in than you think.

527
00:27:37,240 --> 00:27:42,639
Speaker 3: If we have an inflation old Georgetown microeconomics, there's an

528
00:27:42,680 --> 00:27:48,720
Speaker 3: ambiguity Jason Trennard, and that will sustain nominal GDP. So

529
00:27:48,800 --> 00:27:52,199
Speaker 3: which way does it cut if we have sustained or

530
00:27:52,240 --> 00:27:56,280
Speaker 3: even a bit higher inflation, does that help General Mills,

531
00:27:56,680 --> 00:27:59,080
Speaker 3: Colgate palm Olive and Nvidia.

532
00:28:00,280 --> 00:28:03,680
Speaker 8: Well, it helps profits, right, So because profits are profits

533
00:28:03,680 --> 00:28:09,800
Speaker 8: are nominal, revenues are nominal, it tends to hurt multiples though, right,

534
00:28:10,000 --> 00:28:15,280
Speaker 8: at least before q E, higher inflation would lead to

535
00:28:15,359 --> 00:28:18,440
Speaker 8: higher long term interistrates, which would lead to lower multiples.

536
00:28:18,520 --> 00:28:25,040
Speaker 8: That relationship has weakened meaningfully since we started using the

537
00:28:26,320 --> 00:28:28,800
Speaker 8: using the balance sheet like you know, some sort of plaything,

538
00:28:29,880 --> 00:28:32,760
Speaker 8: and with a seven trillion dollars balance sheet, that relationship

539
00:28:32,800 --> 00:28:35,800
Speaker 8: is a little bit weaker. Having said that, higher long

540
00:28:35,880 --> 00:28:38,680
Speaker 8: term interistrates tend to hurt the multiple, so Tim, you're right,

541
00:28:38,680 --> 00:28:42,880
Speaker 8: it hurt, it helps, it helps profits. And equities are

542
00:28:42,920 --> 00:28:46,800
Speaker 8: not a bad hedge against higher inflation. You know, they're

543
00:28:46,800 --> 00:28:50,640
Speaker 8: a better edge than fixed income. But it's not like

544
00:28:50,720 --> 00:28:53,760
Speaker 8: it's free, right. It comes with a cost, and that's

545
00:28:53,840 --> 00:28:58,160
Speaker 8: the willingness of people to pay up for those earnings, Jason.

546
00:28:58,600 --> 00:29:01,160
Speaker 6: Some folks are suggesting that, as we think about some

547
00:29:01,200 --> 00:29:04,760
Speaker 6: of the potentially inflationary pressures from President like Donald Trump's

548
00:29:04,880 --> 00:29:08,680
Speaker 6: economic policies that we know of to date, that deportations

549
00:29:09,280 --> 00:29:13,200
Speaker 6: might be more inflationary than say, tariffs. A.

550
00:29:13,400 --> 00:29:14,000
Speaker 5: Do you believe that?

551
00:29:14,040 --> 00:29:14,200
Speaker 4: And B?

552
00:29:14,280 --> 00:29:16,200
Speaker 6: How would you advise I guess the president on that.

553
00:29:16,800 --> 00:29:19,080
Speaker 8: Yeah, no, I think and I actually think that's right.

554
00:29:19,160 --> 00:29:22,000
Speaker 8: We've spent a lot of time on some of these issues.

555
00:29:22,000 --> 00:29:25,200
Speaker 8: I say, you know, remember President Trump raised tariffs in

556
00:29:25,800 --> 00:29:29,000
Speaker 8: his first term. When you look at the data carefully,

557
00:29:29,040 --> 00:29:31,600
Speaker 8: what you find is really the tariffs went up meaningfully

558
00:29:31,720 --> 00:29:34,600
Speaker 8: really only against one country, and that was China. There

559
00:29:34,640 --> 00:29:36,840
Speaker 8: were certain there were other countries like South Korea and

560
00:29:36,880 --> 00:29:42,480
Speaker 8: Taiwan where President Trump actually cut tariffs during his administration,

561
00:29:42,840 --> 00:29:45,600
Speaker 8: and I would say this time around, China still is

562
00:29:46,000 --> 00:29:49,280
Speaker 8: in the in the crosshairs. I agree with your assessment

563
00:29:49,320 --> 00:29:56,480
Speaker 8: though about about let's say mass deportations. And Peterson Institute

564
00:29:56,520 --> 00:29:59,280
Speaker 8: came out with a study. Doesn't mean it's correct, but

565
00:29:59,400 --> 00:30:03,920
Speaker 8: they found that the relationship between inflation and mass deportations

566
00:30:04,120 --> 00:30:08,200
Speaker 8: is higher than it would be for what's being forecasted

567
00:30:08,280 --> 00:30:11,800
Speaker 8: for tariffs. And so, which is to say, let's say

568
00:30:11,840 --> 00:30:14,880
Speaker 8: you let's just pick a number just at random, we

569
00:30:15,000 --> 00:30:18,320
Speaker 8: deport a million people here that have had some run

570
00:30:18,320 --> 00:30:20,800
Speaker 8: in with the law or here illegally. I don't think

571
00:30:20,800 --> 00:30:23,200
Speaker 8: that would have a big impact on inflation. If you

572
00:30:23,280 --> 00:30:28,000
Speaker 8: start deporting eight, nine, ten million people, that's going to

573
00:30:28,040 --> 00:30:30,680
Speaker 8: have an impact on the labor markets, right, and then

574
00:30:30,720 --> 00:30:33,280
Speaker 8: we have to make decision as a country whether that

575
00:30:33,360 --> 00:30:38,600
Speaker 8: cost is worth it. But I am very sympathetic to

576
00:30:38,640 --> 00:30:43,040
Speaker 8: this idea that that's maybe part of the economic plan.

577
00:30:43,160 --> 00:30:45,000
Speaker 8: It's not part of the economic plan, but it's part

578
00:30:45,080 --> 00:30:48,600
Speaker 8: of the policy mix that is for inflation at least

579
00:30:48,720 --> 00:30:51,120
Speaker 8: is something we have to keep an eye on.

580
00:30:51,400 --> 00:30:53,400
Speaker 3: Jason got to leave it there, Jason Trender, thank you

581
00:30:53,440 --> 00:30:56,800
Speaker 3: so much. Mister TIGA's a lengthy conversation this morning on

582
00:30:56,920 --> 00:31:00,880
Speaker 3: his American stock market and economic experiment.

583
00:31:08,360 --> 00:31:12,640
Speaker 2: This is the Bloomberg Surveillance Podcast. Listen live each weekday

584
00:31:12,760 --> 00:31:16,240
Speaker 2: starting at seven am Eastern on Applecarplay and Android Auto

585
00:31:16,360 --> 00:31:19,160
Speaker 2: with the Bloomberg Business app. You can also watch us

586
00:31:19,240 --> 00:31:23,280
Speaker 2: live every weekday on YouTube and always on the Bloomberg terminal.

587
00:31:23,360 --> 00:31:27,200
Speaker 3: The Daily Look at the front pages, the Lisa Matteo Show, Lisa,

588
00:31:27,240 --> 00:31:27,760
Speaker 3: what do you got?

589
00:31:27,920 --> 00:31:28,200
Speaker 4: Okay?

590
00:31:28,320 --> 00:31:32,760
Speaker 1: More protests surrounding the Paramount and Skydance merger. Now you

591
00:31:32,800 --> 00:31:35,000
Speaker 1: have the Center for American Rights. It's filed a petition

592
00:31:35,040 --> 00:31:39,280
Speaker 1: with the FCC. They're citing potential foreign influence and bias.

593
00:31:39,960 --> 00:31:40,960
Speaker 1: What am I talking about?

594
00:31:40,960 --> 00:31:41,240
Speaker 7: Okay?

595
00:31:41,280 --> 00:31:43,719
Speaker 1: So this said that an investment in Sky dance by

596
00:31:43,720 --> 00:31:47,800
Speaker 1: the Chinese company Tencent. It raises questions about foreign influence

597
00:31:47,840 --> 00:31:50,680
Speaker 1: over the US media, And then they're saying that Paramount

598
00:31:50,720 --> 00:31:54,280
Speaker 1: CBS News division has a track record of ideological bias

599
00:31:54,360 --> 00:31:57,600
Speaker 1: and also lacks diversity and its hiring practice. But I

600
00:31:57,640 --> 00:31:59,520
Speaker 1: don't know is this merger going to be approved by

601
00:31:59,520 --> 00:32:01,920
Speaker 1: the FCC. I mean, they're saying most of it likely.

602
00:32:02,080 --> 00:32:05,280
Speaker 6: It is my personal opinion, having found the media industry

603
00:32:05,280 --> 00:32:08,080
Speaker 6: for thirty five years, zero risk here of it not

604
00:32:08,120 --> 00:32:09,840
Speaker 6: being I mean, sky Dance is just is.

605
00:32:09,800 --> 00:32:11,040
Speaker 5: It a real estate play?

606
00:32:11,360 --> 00:32:14,280
Speaker 3: Like you know, they show the Paramount studios, it is

607
00:32:14,280 --> 00:32:17,240
Speaker 3: a great lot. That's like if they bulldoze it, it's

608
00:32:17,240 --> 00:32:17,680
Speaker 3: worth it.

609
00:32:17,680 --> 00:32:19,239
Speaker 5: It's worth a lot of money, it is. I mean

610
00:32:19,280 --> 00:32:20,160
Speaker 5: there's that as well.

611
00:32:20,200 --> 00:32:22,960
Speaker 6: We saw that with the Fox a lot when disneyball

612
00:32:23,000 --> 00:32:25,760
Speaker 6: twenty first century Fox. A lot of value allocated to that.

613
00:32:26,320 --> 00:32:29,200
Speaker 6: But it's just, you know, it's it's a sky Dance

614
00:32:29,280 --> 00:32:31,240
Speaker 6: looking to get into the media business. It's the son

615
00:32:31,280 --> 00:32:35,240
Speaker 6: of rich guys exactly exactly end. It's still that way

616
00:32:35,320 --> 00:32:37,040
Speaker 6: and at Cherry retch done looking to get out as

617
00:32:37,080 --> 00:32:39,240
Speaker 6: quickly as she possibly can to anybody that'll write a

618
00:32:39,280 --> 00:32:41,360
Speaker 6: check and that's how the steal came about.

619
00:32:41,640 --> 00:32:44,200
Speaker 3: Did it change the industry? Did it change streaming? Did

620
00:32:44,200 --> 00:32:46,600
Speaker 3: it change Warner Brothers Discovery's discussions?

621
00:32:46,760 --> 00:32:49,080
Speaker 6: Know that this new company, this new paramount owned by

622
00:32:49,120 --> 00:32:50,880
Speaker 6: sky Dance, is now going to have to think of that. Okay,

623
00:32:50,920 --> 00:32:53,200
Speaker 6: now what do I do? I probably can't stand alone.

624
00:32:53,200 --> 00:32:55,200
Speaker 6: I probably need to talk to Warner Brothers Discovery. I

625
00:32:55,240 --> 00:32:58,320
Speaker 6: probably need to talk to some media companies about getting bigger.

626
00:32:58,560 --> 00:33:01,320
Speaker 3: Tim Cook out yesterday with the lead actress I think

627
00:33:01,360 --> 00:33:03,520
Speaker 3: her name is Ferguson. Excuse me, I'm so sorry. I

628
00:33:03,520 --> 00:33:04,600
Speaker 3: don't know it.

629
00:33:04,720 --> 00:33:07,000
Speaker 5: The show Silo I watch on Apple.

630
00:33:07,120 --> 00:33:11,320
Speaker 3: They extended it for season three, season four, and they

631
00:33:11,320 --> 00:33:13,920
Speaker 3: have the lead actress and Tim Cook. I think they're

632
00:33:13,960 --> 00:33:16,800
Speaker 3: sort of on this set of Silo and she's thanking

633
00:33:16,920 --> 00:33:20,760
Speaker 3: him for the gazillions of dollars Apple spent on this show,

634
00:33:21,360 --> 00:33:22,800
Speaker 3: and he said he's addicted to it.

635
00:33:23,080 --> 00:33:26,720
Speaker 5: I mean, it really helps if the head is addicted

636
00:33:26,760 --> 00:33:27,760
Speaker 5: to your product.

637
00:33:27,560 --> 00:33:30,320
Speaker 6: Exactly exactly, Tim, I mean, Apple's got the money and.

638
00:33:30,280 --> 00:33:33,000
Speaker 5: Who green lit the red one with the red Yeah,

639
00:33:33,000 --> 00:33:33,320
Speaker 5: I don't know.

640
00:33:33,680 --> 00:33:33,960
Speaker 2: I don't know.

641
00:33:34,320 --> 00:33:38,120
Speaker 1: I'm still trying to get through that one. Okay, holiday

642
00:33:38,160 --> 00:33:39,160
Speaker 1: party season.

643
00:33:38,920 --> 00:33:41,560
Speaker 4: Right, So how do you behave Please tell them?

644
00:33:41,640 --> 00:33:45,120
Speaker 1: The Wall Street Journal has a whole detailed a few

645
00:33:45,160 --> 00:33:47,880
Speaker 1: examples of what you should and should not do. So

646
00:33:47,920 --> 00:33:50,800
Speaker 1: they're saying, a work party is another day from work.

647
00:33:50,840 --> 00:33:53,240
Speaker 1: You're not kind of off duty, so just be careful. Yes,

648
00:33:53,280 --> 00:33:55,960
Speaker 1: the drinking, the dancing, the flirting, and you can get

649
00:33:55,960 --> 00:33:58,480
Speaker 1: fired for some of that because it is a work function.

650
00:33:59,560 --> 00:34:03,200
Speaker 1: What you where expect the usual office dress code, if

651
00:34:03,240 --> 00:34:07,080
Speaker 1: slightly less formal, bow ties included. Okay, And it says

652
00:34:07,160 --> 00:34:10,520
Speaker 1: he the hierarchy make a point to acknowledge, perhaps thank

653
00:34:10,600 --> 00:34:13,400
Speaker 1: the boss. So if you're going around, say hey, thanks

654
00:34:13,400 --> 00:34:17,080
Speaker 1: for you know, for the great year. Mingle. Here's the

655
00:34:17,120 --> 00:34:20,799
Speaker 1: thing mingling, right, don't linger and don't like.

656
00:34:20,960 --> 00:34:23,359
Speaker 6: Hover, can't start sending you the bar.

657
00:34:23,600 --> 00:34:25,239
Speaker 4: No, and you can't be on your phone. That's the

658
00:34:25,239 --> 00:34:25,680
Speaker 4: other thing.

659
00:34:25,960 --> 00:34:28,920
Speaker 1: You can't isolate yourself. You have to mingle.

660
00:34:29,160 --> 00:34:32,279
Speaker 6: Okay, you're good at that. You can dance, you can't.

661
00:34:32,360 --> 00:34:34,640
Speaker 6: Don't get carried away, tom Okay, now can.

662
00:34:34,520 --> 00:34:37,600
Speaker 5: I say something about this? The guy that wrote The

663
00:34:37,680 --> 00:34:38,120
Speaker 5: guy that.

664
00:34:38,160 --> 00:34:41,520
Speaker 3: Wrote the article at the Wall Street Journal of Party

665
00:34:41,600 --> 00:34:45,359
Speaker 3: Times is one of the smartest guys ever met. Paul

666
00:34:45,360 --> 00:34:48,920
Speaker 3: Podowski was I think it fleet my mind's you know,

667
00:34:49,000 --> 00:34:50,839
Speaker 3: this is like back when they were throwing tea into

668
00:34:50,880 --> 00:34:54,600
Speaker 3: the harbor. But Paul Podowski was there with two other guys,

669
00:34:54,640 --> 00:34:58,320
Speaker 3: Greg Anderson at the bank and they wrote a morning

670
00:34:58,440 --> 00:35:03,239
Speaker 3: memo that was so smart you stopped at seven oh

671
00:35:03,320 --> 00:35:07,240
Speaker 3: two am when they released that memo. He was legendary

672
00:35:07,680 --> 00:35:13,520
Speaker 3: for writing cross asset smart memos. Paul Poldowski at Cake Capitol,

673
00:35:13,560 --> 00:35:14,879
Speaker 3: good morning, and he's the one.

674
00:35:14,920 --> 00:35:18,760
Speaker 5: He's a party monster. Have you ever gone to parties

675
00:35:18,760 --> 00:35:21,640
Speaker 5: in one evening? Noyes, that's like work.

676
00:35:22,760 --> 00:35:24,920
Speaker 3: You take the you take the beverage. They all want

677
00:35:24,960 --> 00:35:27,000
Speaker 3: to give me a martini and you touch it to

678
00:35:27,040 --> 00:35:27,640
Speaker 3: your lips.

679
00:35:27,840 --> 00:35:29,320
Speaker 5: Oh you pretend, you pretend.

680
00:35:29,960 --> 00:35:31,799
Speaker 3: Yeah, you can't get through the evening If you don't,

681
00:35:32,120 --> 00:35:34,320
Speaker 3: I wouldn't get out of the first party.

682
00:35:33,719 --> 00:35:37,760
Speaker 5: But you know it's it's yeah, you know, it's very difficult.

683
00:35:37,880 --> 00:35:38,719
Speaker 5: Next what do you go? Oh?

684
00:35:38,760 --> 00:35:42,600
Speaker 1: God, okay, so we did that. So we were talking

685
00:35:42,680 --> 00:35:44,680
Speaker 1: yesterday about the malls. You were asking me, you know,

686
00:35:44,760 --> 00:35:45,400
Speaker 1: how are the malls?

687
00:35:45,440 --> 00:35:46,080
Speaker 4: Are they crowded?

688
00:35:46,120 --> 00:35:49,359
Speaker 1: Are they not crowded? So apparently this from Women's Wear Daily.

689
00:35:49,400 --> 00:35:52,280
Speaker 1: They spoke with the head person over at Simon Property,

690
00:35:52,320 --> 00:35:55,120
Speaker 1: they own a lot of the malls, and they said

691
00:35:55,160 --> 00:35:57,640
Speaker 1: how their recent traffic figures shows that they're starting to

692
00:35:57,640 --> 00:36:01,880
Speaker 1: see growth. How basically what they're doing is they're turning

693
00:36:02,000 --> 00:36:08,000
Speaker 1: malls into more like a community. So they're adding luxury apartments, hotels,

694
00:36:08,360 --> 00:36:13,600
Speaker 1: they're adding gyms like a Lifetime Fitness, They're adding grocery offerings,

695
00:36:13,640 --> 00:36:16,200
Speaker 1: more food and beverage, more restaurants because they want more

696
00:36:16,200 --> 00:36:17,879
Speaker 1: people to go. And also they said, you know, it's

697
00:36:17,880 --> 00:36:22,120
Speaker 1: all about the quote experience, so family and kid play areas,

698
00:36:22,440 --> 00:36:23,520
Speaker 1: Mommy and me, yoga.

699
00:36:23,760 --> 00:36:25,600
Speaker 5: You're a seventeen year old play area.

700
00:36:25,880 --> 00:36:28,880
Speaker 3: Remember your parents screaming you and you're not going to

701
00:36:28,920 --> 00:36:29,520
Speaker 3: the mall.

702
00:36:30,800 --> 00:36:32,600
Speaker 5: At Lisa, you were there? How many days a week

703
00:36:32,640 --> 00:36:37,880
Speaker 5: were you hanging out at the mall? That is it

704
00:36:37,960 --> 00:36:39,160
Speaker 5: still the place to be, But.

705
00:36:39,120 --> 00:36:40,960
Speaker 1: It's a lot of the kids, like the teens, did

706
00:36:41,040 --> 00:36:43,960
Speaker 1: parents just come drop them off and enjoy the day. Yes,

707
00:36:44,200 --> 00:36:46,680
Speaker 1: enjoy the day, enjoy the apple pay and have fun

708
00:36:46,719 --> 00:36:50,080
Speaker 1: at it. But it's about becoming a community and that's

709
00:36:50,120 --> 00:36:51,480
Speaker 1: how they're keeping the malls alive.

710
00:36:52,000 --> 00:36:54,440
Speaker 3: The interview we had yesterday, I'm going to make it up.

711
00:36:54,440 --> 00:36:58,400
Speaker 3: Burt Crouch, was it Invesco was brilliant. Ye, he was brilliant.

712
00:36:58,440 --> 00:37:01,279
Speaker 5: Yeah, he just said the gloom is not as bad

713
00:37:01,320 --> 00:37:03,560
Speaker 5: as people think. Right, you got one more for us,

714
00:37:03,719 --> 00:37:04,160
Speaker 5: last one.

715
00:37:04,200 --> 00:37:06,200
Speaker 1: Oh, yesterday we told you about the Amazon return to

716
00:37:06,239 --> 00:37:09,000
Speaker 1: work five days a week policy that starts next month.

717
00:37:09,040 --> 00:37:12,120
Speaker 1: Now AT and T they're saying their policy kicks in

718
00:37:12,120 --> 00:37:14,280
Speaker 1: in the new year five days a week.

719
00:37:14,840 --> 00:37:15,320
Speaker 6: A comedy.

720
00:37:15,360 --> 00:37:17,239
Speaker 1: They've been doing the hybrid schedule for about a year.

721
00:37:17,960 --> 00:37:20,279
Speaker 1: So the thing is is that now there's talk. You

722
00:37:20,280 --> 00:37:22,799
Speaker 1: have Reddit users on the AT and T subreddit they're

723
00:37:22,840 --> 00:37:24,640
Speaker 1: saying that, well, you know what, there's not going to

724
00:37:24,640 --> 00:37:26,560
Speaker 1: be enough room for all these workers to come back.

725
00:37:26,760 --> 00:37:29,919
Speaker 1: The same issue that Amazon is having is that they're

726
00:37:29,920 --> 00:37:31,960
Speaker 1: bringing all these people back and there might not be

727
00:37:32,160 --> 00:37:35,080
Speaker 1: enough room. So that's one of the issues there for Amazon.

728
00:37:35,200 --> 00:37:37,640
Speaker 1: But a lot of people saying it's even harder to find.

729
00:37:37,400 --> 00:37:39,040
Speaker 5: A job that's a huge employer in the state of

730
00:37:39,080 --> 00:37:39,560
Speaker 5: New Jersey.

731
00:37:39,600 --> 00:37:40,960
Speaker 6: That means, you see how that plays out.

732
00:37:41,160 --> 00:37:41,680
Speaker 5: Interesting.

733
00:37:42,080 --> 00:37:43,960
Speaker 3: I have no idea how this plays out. It's one

734
00:37:44,000 --> 00:37:46,959
Speaker 3: of the great mysteries. Yeah, Lisa Mateo, thank you so much.

735
00:37:47,239 --> 00:37:48,200
Speaker 5: The newspapers.

736
00:37:48,360 --> 00:37:52,799
Speaker 2: This is the Bloomberg Surveillance podcast available on Apple, Spotify,

737
00:37:52,960 --> 00:37:57,040
Speaker 2: and anywhere else you get your podcasts. Listen live each weekday,

738
00:37:57,160 --> 00:38:00,239
Speaker 2: seven to ten am Eastern on Bloomberg dot Com, the

739
00:38:00,320 --> 00:38:04,120
Speaker 2: iHeartRadio app, tune In, and the Bloomberg Business app. You

740
00:38:04,160 --> 00:38:07,480
Speaker 2: can also watch us live every weekday on YouTube and

741
00:38:07,600 --> 00:38:09,160
Speaker 2: always on the Bloomberg terminal