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Speaker 2: Your Quick Brief with Rob sick and p Gum here.
Speaker 2: I just as a general statement, what are you going
Speaker 2: to look at within the wall of data here in
Speaker 2: four minutes? What matters to you? Well?
Speaker 3: I think the key is on the activity side. Things
Speaker 3: are holding up well, so I think we're gonna get
Speaker 3: jobless claims.
Speaker 2: Those will look good.
Speaker 3: I think on the spending side, you're seeing the consumer
Speaker 3: show some signs of strain but holding in pretty well.
Speaker 3: So it really comes down to the inflation numbers. We're
Speaker 3: looking for zero point three to five percent month over
Speaker 3: month core PC, three point four percent year every year.
Speaker 3: Looking at the details will be important. When's driving that,
Speaker 3: But that's staring stories as.
Speaker 2: Pad keeps saying, are we peaking inflation?
Speaker 3: I think at the end of the year we're closer
Speaker 3: to three percent on core PC, so you're going to
Speaker 3: get some gradual disinflation in the back half but you know,
Speaker 3: to me, the risks are heavily skewed to the upside
Speaker 3: on inflation. All the leading indicators I look at for
Speaker 3: consumer inflation, things like the producer price index, surveys of
Speaker 3: supply chain strains, survey of prices, all those things still
Speaker 3: look quite firm. So I don't have a lot of
Speaker 3: confidence that we're going to get that gradual disinflation in
Speaker 3: the back half. And if you look at the FED,
Speaker 3: they had a much higher forecast for core PC by
Speaker 3: the end of the year. I think that's quite possible
Speaker 3: with some of the leading indicators that we're seeing.
Speaker 4: Has to FED ever, address the issue of what we've
Speaker 4: seen in the last couple of years of deglobalization on shoring,
Speaker 4: friends shoring. All that trend suggests just higher overall underlying
Speaker 4: inflation going forward. Have they addressed that visa either two
Speaker 4: percent kind of target.
Speaker 3: Well, I think this gets to an important issue, which
Speaker 3: is they've been a lot of supply shocks over the
Speaker 3: last several years. Some of this is due to some
Speaker 3: of these de globalization type trends. We can look at
Speaker 3: tariffs as kind of example of that, and you saw
Speaker 3: that reflected in the last FED meeting where they said
Speaker 3: supply shocks are keeping inflation away from target, and it's
Speaker 3: not just energy. It's more broader than that, and I
Speaker 3: think that's why you're going to continue to see a
Speaker 3: hawkish FED, even with oil prices down where they are,
Speaker 3: because it's a much broader story than energy. We've missed
Speaker 3: inflation target for many years, and a lot of that's
Speaker 3: related to those deglobalization trends.
Speaker 2: What year over year CPI is optimal for equity markets?
Speaker 3: Well, that's a great question because your equity markets are
Speaker 3: balancing a lot of factors here. On the one hand,
Speaker 3: hotter inflation means the Fed's going to stay higher for longer.
Speaker 3: Things arena be hawkish on the back of it, though,
Speaker 3: you have this AI story, which we think is.
Speaker 2: Largely orthogonal to rates. Yeah. Yeah, So what's your statistic
Speaker 2: on that before we go to the reporting.
Speaker 3: Well, I think that you know, if we get softer inflation,
Speaker 3: that would be ideal for equity markets, because I think
Speaker 3: net net rates moving up is negative for for for rates.
Speaker 3: So I think if we start to see you know,
Speaker 3: a miss on PCE here something below point three, that
Speaker 3: would be quite favorable month over month. I think that's
Speaker 3: unlikely given some of the data that we've already had at.
Speaker 2: Services and goods. Do we return to a vector of
Speaker 2: goods disinflation.
Speaker 3: Well, that's what's in our forecast, But there too, I
Speaker 3: think there's a lot of risks for these deglobalization trends. Also,
Speaker 3: you know what was driving goods inflation over the last
Speaker 3: year was tariffs. Right now, that's good looks more muted,
Speaker 3: that's mostly played through. We could get more tariffs later
Speaker 3: this year, leading to an entire round of new goods inflation.
Speaker 3: So the base case, yes, we'll see disinflation and goods,
Speaker 3: but I think the risks there are also skewed to
Speaker 3: the upside.
Speaker 2: Rob sackins with this here Marcus lift up fifty futures,
Speaker 2: now up sixty, nasak up two point one percent, now
Speaker 2: up two point four percent. You get the picture what
Speaker 2: I see here in Rob's can help me here because
Speaker 2: I'm doing amateur math. I got a GDP shot Q
Speaker 2: one from one point six. It came in a two
Speaker 2: point one. I got a GDP Price Index three point
Speaker 2: five came in a higher three point six. Rob, get ready,
Speaker 2: if I add two point one and three point six,
Speaker 2: I get a five point seven percent quick nominal GDP eyeball,
Speaker 2: that's all I need to know, right.
Speaker 3: I mean, that's been the story for us all year.
Speaker 3: We've been calling this the overheating economy. That's been our
Speaker 3: base case, and that's nominal GDP grow five and a
Speaker 3: half six percent or higher. And that feels like where
Speaker 3: we're landing. And if you look at cut China like,
Speaker 3: it's very strong.
Speaker 2: Yellow numbers here in the screen, folks are yellow. It's
Speaker 2: Banana Republic yellow.
Speaker 5: Yeah.
Speaker 2: Is that good that we have a five plus percent nominal?
Speaker 3: Well, if we look at the real side, you know,
Speaker 3: that's a good story. We've had a pretty resilient economy
Speaker 3: driven by AI capax a resilient upper income consumer fiscal
Speaker 3: support in the first half. But that worrying part is
Speaker 3: the inflation of that nominal GDP story, you know, far
Speaker 3: above the Fed's target, far too high, as we talked
Speaker 3: about earlier. We think that's going to moderate gradually, but
Speaker 3: you know, risks here to the upside and looks like
Speaker 3: this morning's print came in right in line with expectations.
Speaker 3: You're running near three and a half percent on core
Speaker 3: PC inflation. When you know the FED target's two percent.
Speaker 3: It's going to take a lot of work and a
Speaker 3: lot of disinflation across categories to get back down to target.
Speaker 3: And I think that's Kevin Warsh's focus is getting back
Speaker 3: down to two percent without rounding, not in the vicinity
Speaker 3: of two, but back down to two.
Speaker 5: Tom.
Speaker 4: The two year treasury is down two basis points four
Speaker 4: point one two percent on.
Speaker 5: The news here.
Speaker 4: So, Rob, based upon what you heard from Kevin Walsh
Speaker 4: last week with his first meeting, Yeah, how do you
Speaker 4: think he's going to interpret it? Interpret this data here?
Speaker 3: I think what we saw from Kevin Warsh in his
Speaker 3: first meeting is at the moment, this is a FED
Speaker 3: with a one sided man date it was price stability.
Speaker 3: You saw that in the statement, you saw that in
Speaker 3: his comments, you saw that in the balance of risks
Speaker 3: in the Fed's SEP. Not much focus or worry about
Speaker 3: activity or GDP, GDP or the labor market, lots of
Speaker 3: worry about inflation. And so I think here this is
Speaker 3: going to be in line with their concerns that inflation
Speaker 3: is running well above target and they're going to have
Speaker 3: to hike rates to bring inflation back down.
Speaker 4: Tom, you got to pay attention to these Wall Street guys.
Speaker 4: They just switch jobs left and right. There's no loyalty whatsoever.
Speaker 4: They just go for the big check.
Speaker 2: Rob.
Speaker 4: I just noticed that Rob, who was at City for
Speaker 4: a long time, he's now at p JIM.
Speaker 2: So I'm like two three times a year and make
Speaker 2: a mistake.
Speaker 4: And then so I'm like, so, where did Tom Percelly go?
Speaker 4: He was a p JIM.
Speaker 2: I look at him. He's at Wills Fargo. I mean no,
Speaker 2: just like Anthropic's and they're going for anthropic salaries.
Speaker 6: I know, I know this.
Speaker 2: Well, Rob, I got one more question and we got
Speaker 2: to keep it going. Scissorowski from Morgan's Aly is on
Speaker 2: deck right now. I'm sorry, I got to go back. Folks,
Speaker 2: help me here, mister Walsh. Chairman Walsh, as we're doing
Speaker 2: a special on green Span tomorrow with Abby, Joseph Cohen
Speaker 2: and Bloomberg Money Chairman worsh has got to look at
Speaker 2: a nominal GDP that none of these chairmen have ever
Speaker 2: really seen. Because we had stimulus, President Trump would say
Speaker 2: the Biden stimulus, we had a medical event, we had
Speaker 2: more stimulus, and then Trump put it on you know,
Speaker 2: whatever you're thinking about the politics, folks, I mean there's
Speaker 2: no other topic to me than Banana Republic nominal GDP.
Speaker 2: What's the harm of that to our listeners and viewers?
Speaker 5: Yeah?
Speaker 3: Absolutely, And I mean you're seeing that reflected in many areas,
Speaker 3: this affordability issue that we keep talking about. Even though
Speaker 3: growth has been strong, the labor market's been relatively solid,
Speaker 3: you know, inflation has been high, and you're seeing that
Speaker 3: reflected in concerns about affordability. And I agree with you.
Speaker 3: I think for War she's looking at five plus years
Speaker 3: of missing the inflation target and saying, this is job
Speaker 3: number one. We're missing. You know, three percent is not
Speaker 3: two percent, even two and a half percent is not
Speaker 3: two percent, and we have to hike rates. And we
Speaker 3: think they're going to hike three times this year to
Speaker 3: help bring some of those pressures down.
Speaker 2: When you come from Pigiam, do you get in the
Speaker 2: Greg Peters Hinkley picnic boat when you come across Hdson.
Speaker 3: Yes, well exactly.
Speaker 2: Yeah.
Speaker 3: We work closely with Greg and Deleep and then you're
Speaker 3: just the teen over there, Robert.
Speaker 2: Tips and it's got the side thrusters, you know. Then
Speaker 2: Rob Stock and thank you so much. A terrific brief
Speaker 2: there and a wall of economic data. Stay with us.
Speaker 2: More from Bloomberg Surveillance coming up after this.
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Speaker 2: You Shoining us on Sebastian at page all that he
Speaker 2: does for Tierro Price, it is wonderful, wonderful effort on diversification.
Speaker 2: His book was really quite important, Sebastian audible. Paul and
Speaker 2: I were bedazzled by your father's day. This is your father,
Speaker 2: You and your son going four hundred and twenty miles
Speaker 2: north of Montreal up. I were like in X Files
Speaker 2: and Asteroid hit in Quebec and you were out there fishing.
Speaker 2: What sturgeon, Sebastian, were you attempting to catch?
Speaker 6: You know, Tommy and I have talked about the mean
Speaker 6: flies that you get in the wilderness. There are lots
Speaker 6: of flies over there. You take a prop plane to
Speaker 6: bake AMOI drive three hours north into the wilderness. The
Speaker 6: experience was wonderful because my son, who speaks mainly English,
Speaker 6: had to improve his French and my dad, who speaks
Speaker 6: mainly French, had to improve his English. We had a
Speaker 6: great time. I'm not going to lie. The fish was small.
Speaker 6: I thought it was delicious.
Speaker 2: Well, I did one more question in this because there's
Speaker 2: so much to talk about, Sebastian. Tell me there was
Speaker 2: no cell phone for your son. He couldn't use his iPhone.
Speaker 6: You know what's disappointing is just recently my father. It's
Speaker 6: in the wilderness.
Speaker 5: Tom.
Speaker 6: He got starlink and let me tell you, it works,
Speaker 6: So it kind of ruined a little bit of the experience.
Speaker 2: Okay, let's seegwy here. I'll get what Barty Paul wants
Speaker 2: to jump in. Let me do this quickly. Sebastian page
Speaker 2: on the event of SpaceX and Starlink anthropic to follow
Speaker 2: on and arrest your take on SpaceX.
Speaker 6: Look, in general, those IPOs are being very well absorbed.
Speaker 6: We believe in the AI trade. We're bullish. We're long
Speaker 6: us large gap growth. Tom. Interestingly, people worry about debt
Speaker 6: levels and the sustainability of earnings. The Russell one thousand
Speaker 6: large gap growth over the last five years at times
Speaker 6: has traded as high as thirty price earnings ratio. We're
Speaker 6: at twenty two, so we've actually moved money there. We're
Speaker 6: following the AI bottleneckt it's about cooling, it's about electrification,
Speaker 6: it's about the component you're missing, it's about emerging markets.
Speaker 6: Now it's an expanding trade. We believe in this fundamentally
Speaker 6: because we're doing the research three hundred analysts at tiro price,
Speaker 6: but also because the end user demand is there. They're
Speaker 6: billions of users. Yes, they balk at some times more
Speaker 6: expensive tokens. It goes up and down, but generally there
Speaker 6: is demand and application for AI and we're in that trade.
Speaker 4: Sebastian talk to us about momentum trading here. It seems
Speaker 4: like we're seeing that in this market here, kind of
Speaker 4: following some of the big cap growth names that have
Speaker 4: been winners. Talked to us about how you think about momentum.
Speaker 6: And this is a huge debate on our investment platform,
Speaker 6: Paul's it's unbelievable how strong momentum has been. I wanted
Speaker 6: to illustrate this for our investors, and I created this
Speaker 6: very simple return chasing strategy where you buy the top
Speaker 6: ten stocks based on the prior returns for twelve months
Speaker 6: every month on the S and P five hundred, and
Speaker 6: you go back in time and you see how well
Speaker 6: this return chasing momentum trade has worked. And I was
Speaker 6: just almost fell off my chair. The profits if you
Speaker 6: exclude transaction costs from this dumb momentum chasing just buy
Speaker 6: the top ten performing stocks over the last twelve months.
Speaker 6: Rebalance every month is forty percent annualize over the S
Speaker 6: and P five hundred for the last three years. This
Speaker 6: is how strong momentum has been, strongest than any time
Speaker 6: over the last twenty five years. So what do you do?
Speaker 6: You either neutralize the risk. You need to be aware
Speaker 6: of the risk if you're looking for mean reversion, if
Speaker 6: you're looking for things to normalize. But either way, in
Speaker 6: our portfolios, we've got to manage this risk inflation.
Speaker 4: We're seeing oil coming down pretty dramatically here as we
Speaker 4: appear to have some movement towards peace in Iran. Here,
Speaker 4: does that take away the inflation risk in this marketplace?
Speaker 4: Do you think? No?
Speaker 6: I think for the next three to six months, the
Speaker 6: inflation risk is still there. It could still surprise on
Speaker 6: the upside. Counterintuitively, it might surprise on the upside even
Speaker 6: more because oilists come down. What I mean by that is,
Speaker 6: the market's pricing of inflation is quite low. The break
Speaker 6: even one year right now is one point seven percent.
Speaker 6: The swap rate for one year on inflation is two
Speaker 6: point two two point three percent. Meanwhile, if you analyze
Speaker 6: the last three months the headline print, it's eight percent
Speaker 6: even the shelter component last three months analyzes four eight percent.
Speaker 6: So yes, all prices are coming down, but you have
Speaker 6: a lot of lag defects Paul on inflation from insurance
Speaker 6: and freight costs going up to transportation to industrial production
Speaker 6: to final goods, from fiscal to stimulus to demand increasing
Speaker 6: from fertilizer to food price Inflation moves with lags, and
Speaker 6: I think market's underestimating those lags.
Speaker 2: Should our listeners and viewers Sebastian, I mean, you wrote
Speaker 2: the definitive book on this. Should they be concerned about
Speaker 2: concentration in their large cap four one K portfolio?
Speaker 6: You know, interestingly those companies, Yes, there's concentration if you
Speaker 6: look at the handful of CEOs that controls so much
Speaker 6: of the market cap, but their revenues are quite diversified
Speaker 6: and quite robust. So I'm actually giving you a nuancedence
Speaker 6: or tom for someone who's written a book on diversification.
Speaker 6: It might not be as big a risk as people think.
Speaker 6: If you look at the ec and I'll make diversification
Speaker 6: of the revenues and the sustainability of the cashflow generation
Speaker 6: from those big companies. But the nuances it's pretty extreme
Speaker 6: biohistorical standards is basically near an all time high in concentration.
Speaker 2: Sebastian, your trooper hauling your son up there halfway to
Speaker 2: the north Pole. Greatly appreciate he is the t row
Speaker 2: Price sponsoring the Baltimore Orioles. Sebastian Page joins us how
Speaker 2: good his book out on Twitter and LinkedIn. It's really
Speaker 2: extraordinary on this idea of diversification. Stay with us. More
Speaker 2: from Bloomberg Surveillance coming up after this.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live
Speaker 1: weekday afternoons from seven to ten am Eastern Listen on
Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or
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Speaker 2: What a joy to have in the studio. Definitive and
Speaker 2: I mean definitive on all of commodities in the frontier world,
Speaker 2: the third world. Her leadership is standard. Charter Bank with
Speaker 2: their understanding of Southeast Asia. I think a Freeport mcmarine
Speaker 2: in Indonesia and all that, we are thrilled. Suki Cooper
Speaker 2: joins us this morning with a standard charter bank. She
Speaker 2: gets to work with Steve Anglider. It's pretty good. So
Speaker 2: other is to it gold? You look tigging Freeport bank
Speaker 2: Marine in Indonesia. Every central bank wants to buy gold.
Speaker 2: Let's start with the why. Why do they want to
Speaker 2: buy gold at the margin.
Speaker 7: Historically there's three golds and gold achieves that they want stability,
Speaker 7: they want liquidity, they want returns. But what we've seen
Speaker 7: over the past four years is that there are additional
Speaker 7: reasons to want to buy gold in addition to diversification.
Speaker 7: It's concerns around geopolitical risks. It's wanting to have a
Speaker 7: store of value. It's wanting to have that hedge. And
Speaker 7: it's not just central banks. We've seeing that play out
Speaker 7: through the investors side as well. But for central banks
Speaker 7: in particular, they've been the marginal buyers.
Speaker 2: How did a return to the name teen thirties, nineteen twenties,
Speaker 2: the nineteen tens.
Speaker 7: It's not so much a return to the wanting to
Speaker 7: have that monetary stability. It's more so one to strengthen
Speaker 7: balance sheets and have optionality, but also wanted to diversify
Speaker 7: at the same time, so some of the There's a
Speaker 7: Central Bank gold survey that was released last week and
Speaker 7: this is i'd say the best survey for us to
Speaker 7: be looking at because it signals from seventy six different
Speaker 7: central banks what their intentions are. And we had a
Speaker 7: record forty five percent saying that they intended to increase
Speaker 7: their own gold reserves over the next twelve months. And
Speaker 7: that's the highest we've had and when we had such
Speaker 7: strong figures in the past, it's translated into record value terms.
Speaker 4: In additions, since the end of January of this year,
Speaker 4: gold's down about twenty five percent, where now we're below
Speaker 4: four thousand dollars per ounce. What's going on there.
Speaker 7: It's a historic day and that we've seen the lowest
Speaker 7: settlement since November twenty twenty five. We've seen a huge
Speaker 7: pivot from January now to what the gold market's focused on. Yes,
Speaker 7: there was over positioning at the start of the year,
Speaker 7: but there was also more of a focus on the
Speaker 7: structural drivers behind gold. Now there's been that pivot towards less,
Speaker 7: so the debasement, trade, concerns around real yels rising, the
Speaker 7: Dotland being much stronger. So we've seen this macro headwinds developing,
Speaker 7: but it's come at a time when we've seen a
Speaker 7: need for liquidity really pressuring the gold market. So it's
Speaker 7: a combination of factors, a combination of headwinds that we
Speaker 7: think they're going to keep gold price fagrile in the
Speaker 7: near turn. But beyond that we was still positive.
Speaker 4: Yeah, because I mean, I'm just looking back at my
Speaker 4: gold chart here on my Bloomberg terminal here, it's been
Speaker 4: for several years nothing but up. So this turned down
Speaker 4: is really something different. And I'm wondering because it seems
Speaker 4: like when we were talking about gold over the last
Speaker 4: four or five years, it was just everybody was buying.
Speaker 4: The central banks for buying, individuals were by, everybody was buying.
Speaker 7: Yeah that really I think twenty twenty five was the
Speaker 7: year where we had investors wanted to buy, ETF holders,
Speaker 7: short investors, and central banks. But before then it was
Speaker 7: largely central banks that had helped to raise the floor
Speaker 7: for gold prices. But what's changed this year is that
Speaker 7: we still have that central bank buying, but the ETFs
Speaker 7: have turned negative. We've seen significant adverts.
Speaker 2: So is that an opportunity? I mean, you know when
Speaker 2: Steve Englander leans over the desk and says, Suki, where
Speaker 2: are we going? Are you saying gold six thousand?
Speaker 7: We haven't changed our price podcast. We still have one
Speaker 7: hundred and fifty as.
Speaker 2: For our break to make sense.
Speaker 7: So but in the near term it's fired India's demand
Speaker 7: to slow down. We've got the headwinds from real yields.
Speaker 2: We've got to.
Speaker 7: Focus on the inflation data in an hour's time, where
Speaker 7: markets might be pricing in an increased ever increasing probability a.
Speaker 2: Night just finishingly equad as New Jewel eighteen seventy three.
Speaker 2: Of course, he wrote Lords of Finance eight years ago.
Speaker 2: And the arc over that is our gold and silver
Speaker 2: bounce off the mining the supply, Oh we found silver
Speaker 2: in the therefore the silver price changes. We have record
Speaker 2: gold mining now, am I right?
Speaker 7: We do?
Speaker 2: What does that mean for the price of gold? Is
Speaker 2: that bad?
Speaker 7: It hasn't been because the market's been so keen to
Speaker 7: absorb all that supply. We haven't seen recycling responding as much. Norman.
Speaker 7: It's price elastic, but we haven't seen as much distress
Speaker 7: selling when it.
Speaker 2: Comes hasn't sold. The gold is still there.
Speaker 4: So what else in the world of pressures. Models jumps
Speaker 4: out at you these days. Where is their value?
Speaker 5: Do you think? Relatively?
Speaker 7: We think going forward there's going to be much more
Speaker 7: focus on where we see demand growth. And of course
Speaker 7: there's the AI demand growth and that benefits silver, benefits platinum.
Speaker 7: And when we're looking at chips, we look at electronics
Speaker 7: hard disk drive, so that demand looks relatively, looks robust.
Speaker 7: We look for markets where we expect them to be undersupplied.
Speaker 7: We think the platinum market's life has be undersupplied for the.
Speaker 4: Next couple of years, but them come from.
Speaker 7: Largest from South Africa and then.
Speaker 4: Exactly mild exactly so platinum, and it touches about pladium
Speaker 4: as well. Listen, I got my global clod and his
Speaker 4: price thing up on the Bloomberg terminal, I courting everything.
Speaker 7: Pladium is under a little bit of pressure right now
Speaker 7: with the Middle East conflict reigorating concerns that we might
Speaker 7: see a fast pace for EV sales, and that's put
Speaker 7: the internal combustion engine sales perception under pressure list the
Speaker 7: near term.
Speaker 2: With respect to Steve Englander is a Suki Cooper world
Speaker 2: linked to his is gold still linked to US dollar dynamics.
Speaker 7: Interestingly, over the past few weeks that correlation has become
Speaker 7: important again with the US dollar with real yields and
Speaker 7: inflation expectations. And it hadn't really mattered and go back
Speaker 7: to twenty twenty two in Russia and Radio Ukraine. But
Speaker 7: now but now it's back. We've seen such inflation.
Speaker 2: Worry, dollars stronger, yields up.
Speaker 7: Gold up, potentially lower in the near term, but we
Speaker 7: think that those structural drivers that had been pushing gold
Speaker 7: higher will come back to the forefront. In the near term.
Speaker 7: It's fragile, but beyond that, we think the structural drivers
Speaker 7: are still.
Speaker 2: Yeah, I got a Rooshu Sharman lived here in copper
Speaker 2: from the depths of twenty twenty two. It's a solid
Speaker 2: double in copper. What is the lift in copper signal
Speaker 2: to Suki Cooper.
Speaker 7: So the copper market is indicating partially the demand growth
Speaker 7: around AI, demand around electrification of vehicles, like data centers,
Speaker 7: like data centers. Yeah, so we're seeing a robust outlook
Speaker 7: when it comes to the demand profile, and when we
Speaker 7: think about the mind supply side, the question is really
Speaker 7: can of keep pace. So when we're seeing investment across mining,
Speaker 7: there's more of an appetite to want to invest in
Speaker 7: copper projects because they're that stronger demand picture going forward.
Speaker 7: But in the very near term there's focus on the
Speaker 7: US tariff review, which is due up for We should
Speaker 7: have more details on it before the end of next
Speaker 7: week at the thirtieth of June. So the copper prices
Speaker 7: have been kept elevated by some of that uncertainty around
Speaker 7: the risks on tariffs being impacted.
Speaker 4: I got silver down twenty percent year to data.
Speaker 2: Is that just.
Speaker 4: A sympathy trade with gold or is there something special there.
Speaker 7: I think it's a little bit more exaggerated because of
Speaker 7: the retail element. Silver tends to do well when they're
Speaker 7: strong industrial demand but also strong invested demand. And we
Speaker 7: know at the start of the year there was tremendous
Speaker 7: retail demand for for silver. That has moderated. It's still there,
Speaker 7: it's just not as strong as it was at the
Speaker 7: start of the year, and silver now no longer has
Speaker 7: the additional ETF flows pushing it higher. To we still
Speaker 7: see the market as being undersupplied, but we think that
Speaker 7: increasing volumes of ETFs turning negative in terms of profit
Speaker 7: making positions is likely to weigh on silver in the
Speaker 7: near term.
Speaker 2: I mean part it's like, this is what AI is
Speaker 2: about in Google Gemini, which I use here religiously, folks,
Speaker 2: thank you mister Secunda for that. I look up amphanol,
Speaker 2: which is like a moonshot. Right now, they make stuff
Speaker 2: for data centers, a custom flexible copper bus bar, and
Speaker 2: connectors got to have that. And it's like sheets of
Speaker 2: thin copper. Right, that's tangible, and forget about all this
Speaker 2: anthropic stuff. I need copper bus bars, right.
Speaker 7: This is also another fascinating area. Silver is used heavily
Speaker 7: for solar panels, but now they're starting to look into
Speaker 7: alternatives with copper instead. So silver has benefited from growth
Speaker 7: in the solar industry, but there is that substitution risk too.
Speaker 2: Okay, we gotta go. We don't care. All we want
Speaker 2: to know is what you think about England and the
Speaker 2: World Cup. They looked a little tired out there.
Speaker 7: I'm still supporting England all the way.
Speaker 2: I mean, it's basically Hairy and everybody else.
Speaker 7: It's a team effort.
Speaker 2: It didn't wait first the first first half was do
Speaker 2: you understand cricket? No?
Speaker 4: I barely understand baseball.
Speaker 2: Some she SHEI, mister Bloomberg, put me in some Sheshi
Speaker 2: hotel near like Trafalgars Square, and I watched your cricket
Speaker 2: for three hours with a beverage and no, I am
Speaker 2: no idea what I was doing. Suki regards to Steven
Speaker 2: under Standard Charter Bank, Suki Cooper just absolutely spectacular. Her
Speaker 2: thoughts on Gold important and go to Standard Charter for
Speaker 2: her important literature. Stay with us more from Bloomberg Surveillance
Speaker 2: coming up after this.
Speaker 1: You're listening to the Bloomberg Surveillance podcast. Catch us live
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Speaker 2: This is a joy and really a great privilege out
Speaker 2: of the combine of the Carolinas and his Washington D C.
Speaker 2: Lee Roberts joins us on Chancellor UNC Chapel Hill. I
Speaker 2: got to get the Collein sing first, but I'm not
Speaker 2: going to mince words. People go like, Tom, how do
Speaker 2: you do this? And I do. I had the honor
Speaker 2: of standing at a piano in Georgetown with John Dickerson
Speaker 2: and explaining the impact of Nancy Dickerson on my household
Speaker 2: as a kid. Folks, Nancy Dickerson, John Dickerson's mother invented
Speaker 2: Barbara Walters. Barbara Walters did her act and she invented
Speaker 2: someone called Koki Roberts. What was it like growing up
Speaker 2: in Washington and the crucible of the Roberts household? Stephen Robertson,
Speaker 2: Cokie Roberts.
Speaker 8: Well, good morning, Thanks for having me, Thanks for mentioning
Speaker 8: my parents.
Speaker 5: It was definitely different.
Speaker 8: A lot of conversations about politics and policy around the
Speaker 8: dining room.
Speaker 2: To excuse me, Nixon's online two. Is that what it
Speaker 2: was like?
Speaker 8: Well, you know, I think for a lot of Washington households,
Speaker 8: you grow up with that around, so it wasn't unique
Speaker 8: among my friends.
Speaker 2: I'm going to put you on the spot because I
Speaker 2: got too much respect for your family. The new Washington Posts.
Speaker 2: Can they resurrect it? Can they get it back to
Speaker 2: the dust? You and I knew.
Speaker 8: I got to tell you the Washington Post. Most of
Speaker 8: what I read there is about the Washington Redskins. They
Speaker 8: call them the Commanders now. But I'm a lifeloung you
Speaker 8: can come back. That's what I read the Washington Post
Speaker 8: for Lee.
Speaker 4: Talk to us about managing a large university. I don't
Speaker 4: care if it's a state university like you, and so
Speaker 4: you are a private university in a world where funding
Speaker 4: really seems to be at risk, that public private partnership
Speaker 4: that had been the bedrock of this country since World
Speaker 4: War Two is under threat. Talk to us about how
Speaker 4: the environment is today.
Speaker 8: A lot of uncertainty around federal research funding. I will
Speaker 8: say that despite the proposals for significant cuts in federal
Speaker 8: research funding, what was actually passed and signed by the
Speaker 8: President basically held federal funding flat. Now the priorities are
Speaker 8: changing around, and that's not a bad thing. They need
Speaker 8: to be updated, and the process through which we receive
Speaker 8: the funding needs to be streamlined, and and again that's
Speaker 8: not a bad thing at all. The biggest challenge though,
Speaker 8: is that federal funding is not being dispersed in the
Speaker 8: way that it was allocated. So you're seeing a lot
Speaker 8: of universities waiting for grant funding. At the same time,
Speaker 8: there's tuition pressure, there's public funding pressure. But we're really
Speaker 8: fortunate in North Carolina to have such strong support from
Speaker 8: such a fast growing state.
Speaker 5: That's a good.
Speaker 4: Point just in general for higher education. There's probably universal
Speaker 4: agreement that the tuition growth that exceeds inflation in my
Speaker 4: entire lifetime every year. What does that suggest to you?
Speaker 4: That is not a feasible financial model in most people's minds.
Speaker 4: How do you guys think about it?
Speaker 8: I agree it's a challenge for higher education generally. But
Speaker 8: at North Carolina, we've been ranked the best value in
Speaker 8: higher education for twenty one years in a row by
Speaker 8: US News and World Report. It was Duke and then
Speaker 8: finally our in state tuition is nine thousand dollars a year,
Speaker 8: so it's a pretty good deal. It was flat for
Speaker 8: nine straight years. It's going up by three percent this year.
Speaker 8: It's actually gone down in real terms by about twenty
Speaker 8: percent over the last nine years. So we have a
Speaker 8: pretty good story to tell at Carolina when it comes
Speaker 8: to affordability.
Speaker 2: Lee Robots, You look at any fancy school up in
Speaker 2: New York, the prep schools, and it's absolutely shocking. The
Speaker 2: migration south. It's like a whole new generational world. Why
Speaker 2: are they going to Wake Forest, Why are they going
Speaker 2: to UNC Even if they don't want to go to.
Speaker 8: Duke, You know, I think weather in sports has something
Speaker 8: to do with it. Greek life is important for some students.
Speaker 2: It's ay sick of the great inflation at the major
Speaker 2: schools in the Northeast.
Speaker 8: Well, I think it's okay for college to be fun,
Speaker 8: and I think that's what students are looking for. It's
Speaker 8: not only fun, but the dimension of front and college
Speaker 8: is a good thing.
Speaker 2: Yeah. But do you have great inflation at UNC like
Speaker 2: they have some of these schools up north?
Speaker 8: You know, I think you do see great inflation across
Speaker 8: the board in US universities. Saw the report coming out
Speaker 8: of Yale, obviously a lot of news out of Harvard.
Speaker 8: That's something for the entire sector to tackle.
Speaker 4: Lee we've seen stories of universities physically expanding their footprints
Speaker 4: beyond their existing campus schools, buying schools in San Francisco
Speaker 4: to get exposure to the technology. Is that something that
Speaker 4: you and see thinks about.
Speaker 8: You won't see us expanding physically outside of North Carolina,
Speaker 8: I don't think. But we do have about eight hundred
Speaker 8: acres a mile and a half from our existing campus
Speaker 8: that we plan to build out as a full blown
Speaker 8: new campus. Given that we're growing enrollment, given the huge
Speaker 8: demand for STEM classes.
Speaker 5: You need new facilities for that.
Speaker 8: And look, we have a huge housing problem in the
Speaker 8: town of Chapel Hill, which is a problem for the
Speaker 8: university as an employer. We can use this land to
Speaker 8: help address all three of those challenges.
Speaker 2: How do you do, for example, the dorm housing thing,
Speaker 2: how do you do that against the pressure of competition
Speaker 2: that we have to have dorms and apartments, suites that
Speaker 2: look like the Saint Regis over in fifty fourth Street.
Speaker 2: I mean, the whole elite versus just getting my first
Speaker 2: dorm room in Colorado. I think it hit electricity. I mean,
Speaker 2: how do you balance this fancy fancy with the reality
Speaker 2: you just put the eighteen year old in a room.
Speaker 8: Well, look, we're a public school, and we're the first
Speaker 8: public university in the US, not one of the first,
Speaker 8: of the first. Really the median age of our dorms
Speaker 8: is nineteen forty. We've got two outside my window that
Speaker 8: date from the eighteenth century, so that was well before
Speaker 8: climbing walls.
Speaker 5: It was before HVAC.
Speaker 8: And so we're trying to upgrade our housing stock. But
Speaker 8: we're building modern chevy, We're not building catalogs.
Speaker 4: What's the greatest threat to your business, your business model,
Speaker 4: the model of running at public state, public university beause.
Speaker 8: Look, I think the thing everyone is grappling with is
Speaker 8: artificial intelligence, and what does it mean for higher education.
Speaker 8: We've never just been in the business of transmitting information.
Speaker 8: If that were the case, then YouTube would have destroyed
Speaker 8: higher ad. We need to make sure that students have
Speaker 8: the wisdom and the judgment to go along with this
Speaker 8: gusher of information coming out.
Speaker 4: I've been saying to everybody the last job I think
Speaker 4: I'd want to have today is an educator high school,
Speaker 4: middle school, and of course certainly in higher education. What
Speaker 4: are I mean you guys are learning like we're learning
Speaker 4: right on the fly. What are some of the policies
Speaker 4: you guys have kind of instituted or thought about instituting.
Speaker 8: Well, you're right, that's a real challenge because the external
Speaker 8: environment is changing so quickly, and universities don't change very quickly.
Speaker 8: And that's okay. That goes along with our remarkable stability,
Speaker 8: but that tension is heightened at a time like the
Speaker 8: one we find ourselves in. Now, we have a new
Speaker 8: policy whereby you can choose one of three policies for
Speaker 8: your syllabus as a professor about how AI will be
Speaker 8: used in the classroom. So instead of defining the policy
Speaker 8: for yourself.
Speaker 5: Which is where we were before.
Speaker 8: Which was confusing students, you have to choose one of three.
Speaker 8: We'll give students a lot more predictability about how they
Speaker 8: can use AI in a given class.
Speaker 2: I literally sat in a fancy prep school gym in
Speaker 2: New York City and they announced that Georgetown and MIT
Speaker 2: we're bringing back test stores. We got this fiasco out
Speaker 2: in California with the faculty saying we can't teach the
Speaker 2: kids u NC on a new rigor of admission and
Speaker 2: a rigor while you're an undergraduate at the school.
Speaker 8: So I think the key is just to make sure
Speaker 8: that students have the skills that they need to thrive
Speaker 8: over the course of a few plus year career. And
Speaker 8: those aren't going away even as the workforce continues to
Speaker 8: change very rapidly. Communication skills, critical reasoning, problem solving, ethics, judgment,
Speaker 8: those are going to serve students well no matter what
Speaker 8: the workforce looks.
Speaker 2: Well, we got a problem, Janet Lawrence listening now, it's
Speaker 2: just too much. Janel Lauren Joys all of our education coverage,
Speaker 2: and she has been wonderful about any given school in
Speaker 2: the acreage. Now you mentioned your acreage at u NC,
Speaker 2: and I know you've got is it the Lineberger Cancer Center?
Speaker 5: It is you're building.
Speaker 2: Explain the machinery. People are going like, we need a
Speaker 2: football stadium because Belichick has been so successful, or we
Speaker 2: need a new English classroom. You know that was built
Speaker 2: in nineteen forty two, and instead you're building the hospital palaces.
Speaker 2: You want to explain that funding, the thinking of that.
Speaker 5: Well, we've got to do all of those.
Speaker 8: You know, you can teach English in the same classroom
Speaker 8: for one hundred years, and we do at Carolina, But
Speaker 8: you can't do that with biology or chemistry, which are
Speaker 8: some of our most popular majors, fastest growing majors. Everybody
Speaker 8: knows about the arms race in college athletics facilities, and
Speaker 8: we're trying to upgrade and improve our facilities. And we
Speaker 8: have an enormously important health sciences specialty at Carolina. You
Speaker 8: mentioned our cancer center, medical school, nursing school, pharmacy, dentistry,
Speaker 8: public health. Those all require advanced facilities.
Speaker 2: It's a demand for nursing right now.
Speaker 8: It's off the charge, off the charge We've got a
Speaker 8: severe nursing shortage in North Carolina and around the country.
Speaker 8: We're about to open a new nursing building at Carolina
Speaker 8: to try to address that demand.
Speaker 5: It's a challenge for the whole There's.
Speaker 2: Salaries coming out pull they're like popping income.
Speaker 4: I know then it's good for the young folks. Lee
Speaker 4: talked to US athletics. UNC has one of the premier
Speaker 4: athletics the doormans in the country. I know it because
Speaker 4: we compete against them every day. Nil transfer portal boy
Speaker 4: talk about change in college athletics, it's just mixed, Jordory.
Speaker 4: How does Carolina think about it?
Speaker 5: Well, no one's seen anything like this before. You're right.
Speaker 8: We have a long and proud history in college sports.
Speaker 8: Twenty eight sports. We made to the finals in Omaha,
Speaker 8: lost in the final game on Monday night. But we're
Speaker 8: proud of the breadth of our athletics program. Women's lacrosse,
Speaker 8: women's soccer, field hockey arguably the best in those three
Speaker 8: sports nationally. But the current system is not working. It
Speaker 8: costs too much. It's not good for anybody. Nobody designed
Speaker 8: this system. It came about as the results of a
Speaker 8: series of court cases and so you know, I came
Speaker 8: from the private sector. To me, it's rare you look
Speaker 8: at a situation and say, you know, what would make
Speaker 8: this better if only the US Congress would get involved.
Speaker 8: But in this case, I think get calls out for
Speaker 8: for federal regular.
Speaker 2: Presidents and people like you, I mean, Lee Robberts, Chancellor
Speaker 2: u NC just saying no, we're not going to do this.
Speaker 5: No, because it's too competitive.
Speaker 8: We really do need we need federal harmonization of the
Speaker 8: world that we're in now. That's come about from these
Speaker 8: patchwork court rulings, and there is bipartisan legislation, the Cruise
Speaker 8: Cantwell legislation that the President has endorsed.
Speaker 2: I mean, I don't know if you know this, but
Speaker 2: Paul's got the Belichick question. We got to ask it.
Speaker 2: I just want to say, first, I rooted for UNC
Speaker 2: in the March madness because Seth Trimble had the courage
Speaker 2: to go four years to school. I just thought that
Speaker 2: was the coolest thing versus this idiotic freshman year only thing.
Speaker 5: Yeah.
Speaker 8: I appreciate that, great great player, great young man hell
Speaker 8: and some greats.
Speaker 4: You know, Bill Belichick talk about an ad of the
Speaker 4: box selection for a head.
Speaker 2: Coach was that your fault?
Speaker 4: How do you guys what was kind of behind that?
Speaker 4: It was certainly a high profile decision. It was a
Speaker 4: bold decision, but again outside of the box decision. How
Speaker 4: are you guys thinking about that? On campus?
Speaker 8: Ye, we're just trying to raise our level of competitiveness
Speaker 8: in football and we have a long tradition. We've been
Speaker 8: playing football since eighteen eighty eight. We're about to play
Speaker 8: our one hundredth season in Keenan Stadium, but we haven't
Speaker 8: been at the elite level the way we want to be.
Speaker 8: And you look across the board at our peers, everyone's
Speaker 8: trying to invest more money in football. Everyone's trying to
Speaker 8: get better. Duke Obviously, Vanderbilt, Georgia Tech schools you wouldn't
Speaker 8: think of as traditional football powerhouses. Everybody trying to raise
Speaker 8: their game in football, and coach Belichick's.
Speaker 5: Off to a terrific start. We're excited for the season.
Speaker 4: So talk about international students. How are they Are they
Speaker 4: relevant to you guys as a state university because I
Speaker 4: know a lot of private universities are really feeling the
Speaker 4: strain that their farm application pulls down dramatically for variety
Speaker 4: of reasons.
Speaker 8: International students add immeasurably to the vibrancy in life of
Speaker 8: our campus community, but we don't depend on them financially
Speaker 8: the way a lot of private schools do. We are
Speaker 8: only about five percent international students at the undergrad level.
Speaker 8: Really well, that's because we only have eighteen percent non
Speaker 8: North Carolina.
Speaker 5: Students out of state students, and.
Speaker 8: So the international students have to fit into that eighteen
Speaker 8: percent out of state cap higher. At the graduate level,
Speaker 8: depending on the program, we're about ten percent overall when
Speaker 8: you mix graduate and undergraduate. But we went up this
Speaker 8: year in international students. We were up by about twelve percent,
Speaker 8: and we were up from each of our five biggest
Speaker 8: seventeen countries individually.
Speaker 2: I find it to me there's like four or five
Speaker 2: good I mean to wrap this uply, and this has
Speaker 2: been just fabulous. I look at it like there's almost
Speaker 2: three or four college experiences coming off the Clinton Revolution.
Speaker 2: And there's the stereotype, Paul of the party school kids
Speaker 2: which you u and see is you know, the next
Speaker 2: kids having fun like you say, Lee. But the thing
Speaker 2: that people miss within all the critique are the kids
Speaker 2: coming in and working yep, and the work ethic you know,
Speaker 2: I make jokes about it. Doctors out of Duke and
Speaker 2: un see it while Cornell and that I mean those
Speaker 2: kids doing STEM. They're different than we were, aren't.
Speaker 8: They like students, work hard, and they also know that
Speaker 8: getting an internship is the most important factor in getting
Speaker 8: a job after graduation. So they're really looking for those
Speaker 8: kinds of practical experiences to help them in the in
Speaker 8: the job market and gain more practical experience.
Speaker 4: I think half of Bloomberg News is from Carolina, the
Speaker 4: journalism school.
Speaker 2: They're all over the place.
Speaker 5: It's a good thing, you know.
Speaker 2: They are all over the PLA. We say regards to
Speaker 2: Peter Grower, yes it is a leader here at bloom
Speaker 2: Work and of course he went to ye, you've never
Speaker 2: spoken to mister Grower. We have our words words, Lee Roberts,
Speaker 2: thank you so much with UNC Chapel Hill Chancellor. That
Speaker 2: was a real treat here, folks, just to digress away
Speaker 2: into something and of course shocking there that eighteen percent
Speaker 2: cap out of State International at UNC.
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