WEBVTT - Surveillance: US July CPI with Dutta 0:00:04.800 --> 0:00:08.119 This is the Bloomberg Surveillance Podcast. I'm Tom Keane, along 0:00:08.160 --> 0:00:12.000 with Jonathan Farrow and Lisa Abramowitz. Join us each day 0:00:12.039 --> 0:00:16.520 for insight from the best and economics, geopolitics, finance and investment. 0:00:16.960 --> 0:00:21.759 Subscribe to Bloomberg Surveillance on demand on Apple, Spotify and 0:00:21.960 --> 0:00:26.280 anywhere you get your podcasts, and always on Bloomberg dot Com, 0:00:26.280 --> 0:00:30.360 the Bloomberg Terminal, and the Bloomberg Business app. Neil Dutta 0:00:30.520 --> 0:00:32.879 is an optimist. He's oeud of US Economic Research at 0:00:32.920 --> 0:00:37.360 Renaissance Macro at Research. He's absolutely nailed the better than 0:00:37.400 --> 0:00:40.800 good American economy. Neil, I got to go to GDP 0:00:41.000 --> 0:00:42.840 first and then Lisa and I want to dive into 0:00:42.840 --> 0:00:46.320 this inflation report. And the basic idea Neil is Atlanta 0:00:46.400 --> 0:00:50.639 GDP sees a sprightly initial start to the quarter. Are 0:00:50.680 --> 0:00:53.160 you at a three percent run rate on a real 0:00:53.240 --> 0:00:55.600 GDP or are you at a lesser run rate? 0:00:57.480 --> 0:00:59.400 Well, I mean, I remember that's still very early in 0:00:59.440 --> 0:01:02.959 the quarter, and the Atlanta Fed tends to get that 0:01:03.120 --> 0:01:06.479 estimate tends to get better over time as more data 0:01:06.560 --> 0:01:10.840 comes in. But even if you assume you know a 0:01:10.880 --> 0:01:14.400 typical kind of you know, error term and like, let's 0:01:14.440 --> 0:01:16.720 say it's all going down, you'd still be talking about 0:01:16.720 --> 0:01:19.800 above trend growth. So it would be really hard for 0:01:19.840 --> 0:01:22.800 me to see, you know, GDP coming in something below 0:01:23.360 --> 0:01:25.800 you know, two and a half percent when the quarter's 0:01:25.840 --> 0:01:28.000 all said and done. There's just a lot of momentum 0:01:28.560 --> 0:01:32.800 behind behind the economy, right So when you hold things 0:01:32.840 --> 0:01:36.399 like the level of consumer spending flat to where it 0:01:36.480 --> 0:01:39.760 was in June, you're still talking about a build in 0:01:39.840 --> 0:01:42.319 for the third quarter from consumption of over one percent 0:01:42.319 --> 0:01:46.440 at an annual rate. So I think that's primarily what's 0:01:46.520 --> 0:01:50.160 driving the GDP now estimate. But yeah, look, I mean 0:01:50.200 --> 0:01:54.280 the economy is growing above trent. Your own Bloomberg consensus 0:01:55.040 --> 0:01:58.200 sees GDP, I think barely half a percent in the 0:01:58.240 --> 0:02:01.200 third quarter, negative in the fourth quarter. I think that 0:02:01.200 --> 0:02:06.680 that is highly unlikely, and that revisions will you know, 0:02:06.760 --> 0:02:07.840 be skewed to the upside. 0:02:07.880 --> 0:02:10.320 So right now, what we're seeing is a broad side 0:02:10.320 --> 0:02:13.360 of relief in markets, with some cheering in the bonds, 0:02:13.400 --> 0:02:16.160 where you're seeing basically people writing off the Fed raising 0:02:16.200 --> 0:02:19.440 rates again and saying you are seeing the soft landing, 0:02:19.480 --> 0:02:22.600 you are seeing the disinflation. You can call it immaculate 0:02:22.720 --> 0:02:24.720 or at whatever else that a lot of people were 0:02:24.720 --> 0:02:28.600 waiting for. What in this data can you point to 0:02:28.600 --> 0:02:29.760 to say they're wrong. 0:02:31.680 --> 0:02:35.320 Well, it's not much. You know, you could make the argument, 0:02:35.360 --> 0:02:38.720 I think that the downward movement in used cars will 0:02:38.720 --> 0:02:42.200 probably only build over the rest of the summer. You know, 0:02:42.240 --> 0:02:45.560 we do know that wholesale auction prices continue to come down, 0:02:46.000 --> 0:02:48.480 and thus far we've only seen a very modest decline 0:02:48.480 --> 0:02:50.400 in use car prisis, so there may be some more 0:02:50.440 --> 0:02:55.120 pass through there. So I do think that there's probably 0:02:55.120 --> 0:02:59.680 a little bit more disinflation in the pipeline. But again, 0:03:00.200 --> 0:03:04.160 you know, I think the reacceleration story for inflation, it's 0:03:04.200 --> 0:03:08.240 really about, in my view, is the economy growing above 0:03:08.280 --> 0:03:11.000 trend or not. And I think the economy is growing 0:03:11.040 --> 0:03:14.680 above trend. I don't think the FED has done enough, 0:03:15.560 --> 0:03:17.920 and I think the FED is kind of enamored with 0:03:17.960 --> 0:03:22.240 this soft landing view. They're almost wish casting this outlook. 0:03:22.880 --> 0:03:25.000 And I do think that there is a risk that 0:03:25.040 --> 0:03:26.959 the FED is kind of patting itself on the back 0:03:27.000 --> 0:03:29.800 by the end of the year, only to watch inflation 0:03:29.919 --> 0:03:33.880 potentially turn back up, you know, sometime next year. We 0:03:33.919 --> 0:03:36.760 do know that home prices are rising, while the relationship 0:03:36.800 --> 0:03:39.160 between home prices and rents is very tenuous in the 0:03:39.200 --> 0:03:43.240 short run, I mean, ultimately, the asset market effect is 0:03:43.240 --> 0:03:46.440 what drives rents. I mean, landlords don't charge they want 0:03:46.440 --> 0:03:49.960 to extract more from tenants when the underlying value of 0:03:49.960 --> 0:03:51.960 the asset that they're putting on the market is going 0:03:52.040 --> 0:03:55.760 up in price and commodity prices. 0:03:56.160 --> 0:03:56.320 You know. 0:03:56.400 --> 0:03:59.160 Look, I mean oil is at year to date highs 0:03:59.160 --> 0:04:02.040 more or less. With everyone concerned about China and Europe, 0:04:02.480 --> 0:04:07.240 you know, I suspect these economies probably won't get much 0:04:07.280 --> 0:04:08.880 worse than they are now. I mean, that would be 0:04:08.920 --> 0:04:12.560 my baseline expectation. And there's probably, in other words, there's 0:04:12.560 --> 0:04:14.920 more room for oil to go up, and that's going 0:04:15.000 --> 0:04:19.599 to have very mechanical impacts on not just headline inflation, 0:04:19.680 --> 0:04:21.719 but parts of core inflation as well. 0:04:21.880 --> 0:04:23.640 I've been looking at the pricing and market. It's a 0:04:23.680 --> 0:04:26.719 fed policy and where people are settling out and they're 0:04:26.720 --> 0:04:29.279 now pricing and cuts at the first couple of months 0:04:29.279 --> 0:04:31.920 of next year. And I'm wondering, from your vantage point, Neil, 0:04:32.360 --> 0:04:36.920 how disruptive it would be if suddenly that market complacency 0:04:37.000 --> 0:04:41.760 is challenged by the idea of stickier inflation, reaccelerating inflation 0:04:41.800 --> 0:04:44.839 that wouldn't even cause another FED rate hike, but just 0:04:44.880 --> 0:04:47.000 wouldn't necessarily lead to those cuts. 0:04:48.960 --> 0:04:52.000 Yeah, I mean it depends, right, because if it's a 0:04:52.040 --> 0:04:56.880 stronger economy and stronger growth expectations, that's making the market 0:04:56.880 --> 0:04:59.320 prices the price out those cuts. I mean that could 0:04:59.360 --> 0:05:03.200 be in an environment where equity markets could potentially work. Right, 0:05:03.279 --> 0:05:05.520 So you see higher interest rates and that hurts, but 0:05:05.640 --> 0:05:08.440 you know, you'd expect earnings and expected earnings expectations to 0:05:08.440 --> 0:05:11.280 go up, so that could be be okay. But I 0:05:11.320 --> 0:05:14.440 do think you know, to me, it's it comes down 0:05:14.480 --> 0:05:16.920 to something very very basic, right. You know that the 0:05:16.920 --> 0:05:20.560 FED began hiking in March of last year, and since then, 0:05:20.600 --> 0:05:21.840 what do they have to show for it? 0:05:21.880 --> 0:05:22.200 Really? 0:05:22.440 --> 0:05:25.799 You know, Powell talked about pain being necessary or likely. 0:05:26.360 --> 0:05:30.200 We've seen the unemployment rate actually ticked down since then. 0:05:31.000 --> 0:05:36.279 GDP's growing above trend, broader. Financial market conditions are as 0:05:36.320 --> 0:05:39.040 easy now as they were then, and maybe if not easier, 0:05:40.279 --> 0:05:43.000 you know, all difference to the Fed's new financial conditions framework. 0:05:43.040 --> 0:05:45.719 That that number when it was published, you know, showed 0:05:45.920 --> 0:05:49.240 financial markets being aheadwinds. Now that that has basically gone 0:05:49.240 --> 0:05:52.280 to zero, So what have they actually done? So I 0:05:52.520 --> 0:05:54.680 think it comes down to something very basic. Either you 0:05:54.720 --> 0:05:59.640 think the labor markets are a conduit for inflation or 0:05:59.680 --> 0:06:03.320 you don't. And I think what we're seeing now is 0:06:04.400 --> 0:06:08.920 basically tight labor markets, a lift to real wages, as 0:06:09.760 --> 0:06:12.520 you know. And I think ultimately people will go out 0:06:12.520 --> 0:06:14.960 and spend more money, blueing household demand, and I think 0:06:14.960 --> 0:06:19.440 that'll keep prices in the aggregate stickier for longer in 0:06:19.480 --> 0:06:19.920 the area. 0:06:20.040 --> 0:06:22.840 No, Donna, thank you so much with the renaissance macrel, 0:06:27.120 --> 0:06:28.240 we get clarity now. 0:06:28.640 --> 0:06:29.560 On an August. 0:06:29.320 --> 0:06:33.240 Thursday with David Kelly, Chief Global Strategist JP Morgan Asset Management, 0:06:33.279 --> 0:06:37.760 he has been definitive over the decades of the holistic picture. David, 0:06:37.800 --> 0:06:40.120 I do want to get to your stunning call on jobs, 0:06:40.120 --> 0:06:42.960 but let's leave out aside right now. Do we have 0:06:43.240 --> 0:06:45.080 disinflation in America? 0:06:46.880 --> 0:06:50.520 Yes, we've sort of got gathering disinflation in America. We've 0:06:50.520 --> 0:06:54.240 got the numbers this morning. We're close to what we told. 0:06:54.560 --> 0:06:57.000 But it's nice to see the sort of the core 0:06:57.120 --> 0:07:01.360 services part of inflation come down. But what I think 0:07:01.560 --> 0:07:03.679 I'm most interested in is actually it's not actually the numbers. 0:07:03.760 --> 0:07:06.320 It's forecasting the numbers because when you run, when you're 0:07:06.320 --> 0:07:08.960 trying to forecast these numbers, you realize, Okay, new car 0:07:09.040 --> 0:07:12.559 prices have basically been flat or down since the start 0:07:12.600 --> 0:07:15.000 of the year, and we're still seeing these huge increases 0:07:15.000 --> 0:07:18.280 in auto insurance and auto repair costs. But that's gult 0:07:18.320 --> 0:07:20.920 to break. And same thing with shelter costs. Shelter is 0:07:20.920 --> 0:07:23.720 about ninety percent of the increase in CPI at this stage. 0:07:23.840 --> 0:07:25.880 But we know the rents have stopped rising, we know 0:07:25.920 --> 0:07:29.280 that rising vacancy rate for apartments. So what we can 0:07:29.320 --> 0:07:32.840 see is the promise of future disinflation in these numbers 0:07:32.840 --> 0:07:35.200 and really trying to forecast these numbers. And that's why 0:07:35.240 --> 0:07:37.480 I'm so convinced that inflation is going to get down 0:07:37.520 --> 0:07:40.280 to two percent on its own, with or without any 0:07:40.280 --> 0:07:41.080 help from the FAV. 0:07:41.040 --> 0:07:44.440 In your summed statement. And you and I've talked about 0:07:44.440 --> 0:07:47.000 this over many years, including with Bob Goodman years ago. 0:07:47.440 --> 0:07:51.240 There's an underestimation of the X axis. Are we underplaying 0:07:51.760 --> 0:07:53.880 in our what's going to happen next quarter, what's going 0:07:53.920 --> 0:07:55.760 to happen in de k Jackson Hall, what's going to 0:07:55.800 --> 0:07:58.440 happen to the meeting do we need to extend out 0:07:58.480 --> 0:08:02.360 our study a year or dare I say two years 0:08:02.400 --> 0:08:05.040 out to get to a successful disinflation. 0:08:06.440 --> 0:08:09.400 Well, for investing, you always should, because I mean equity 0:08:09.440 --> 0:08:11.680 investing in you know, most of your viewers are interested 0:08:11.680 --> 0:08:14.200 in the stock market. It shouldn't be about the next 0:08:14.240 --> 0:08:17.880 year anyway, But yes, I think it particularly this time around. 0:08:17.920 --> 0:08:20.520 I think that's the case because what we know with 0:08:20.640 --> 0:08:23.360 inflation is it's very symmetric. It actually looks like the 0:08:23.400 --> 0:08:26.080 Eiffel Tower goes up and comes down in exactly that 0:08:26.080 --> 0:08:27.880 pattern we saw in the nineteen seventies. We're seeing it 0:08:27.920 --> 0:08:30.600 again now forty years later. But it takes a little 0:08:30.640 --> 0:08:33.720 while to come down, and it's because of lags and 0:08:33.760 --> 0:08:37.600 things like transportation services and particularly owners equivalent rent, and 0:08:37.640 --> 0:08:39.800 so as we track this thing out, it's going to 0:08:39.880 --> 0:08:44.440 hit two on CPI and on core CPI by late 0:08:44.559 --> 0:08:47.560 next year, and that's the track gets on. So I 0:08:47.559 --> 0:08:49.360 think you have to wait for that to play out, 0:08:49.720 --> 0:08:51.920 and then you realize that, Okay, where does that leave us? 0:08:52.000 --> 0:08:55.800 That leaves us in a loan inflation, low inflation, slow 0:08:55.840 --> 0:08:58.640 growth economy. I think the Federal Reserve will be cutting 0:08:58.679 --> 0:09:01.760 interest rates of see faster we end up in recession. 0:09:02.360 --> 0:09:03.800 But I think you have to sort of look out 0:09:03.880 --> 0:09:06.400 beyond the volatility inflation that we've seen in the last 0:09:06.400 --> 0:09:09.000 two years to realize that we're headed for a place 0:09:09.000 --> 0:09:11.600 of slow growth, which looks quite like a decade ago. 0:09:11.679 --> 0:09:13.320 I think that's wheally where it's sort of a return 0:09:13.400 --> 0:09:15.320 to where we were ten years ago. 0:09:15.520 --> 0:09:17.680 If that's the case, why wouldn't you take a look 0:09:17.760 --> 0:09:20.000 at where markets are positioned and just load the vote 0:09:20.000 --> 0:09:22.760 thirty year treasuries and say everyone's wrong. They think that 0:09:22.800 --> 0:09:26.119 inflation could get unmoored if the Fed is less aggressive. 0:09:26.480 --> 0:09:26.920 I don't. 0:09:27.400 --> 0:09:29.400 I wouldn't back up the truck because I think they're 0:09:29.120 --> 0:09:32.320 better opportunities in markets than thirty your treasuries. I mean, 0:09:32.920 --> 0:09:35.720 I do think that that the bond market overall is 0:09:35.760 --> 0:09:38.559 better priced it's been for many, many years. I think 0:09:38.600 --> 0:09:42.480 there is a one time capital gain there as rates 0:09:42.520 --> 0:09:44.680 come down, as people realize the Federal Reserve is going 0:09:44.679 --> 0:09:46.720 to have to cut rates sooner. Related to this, Columny 0:09:46.760 --> 0:09:49.720 will stumble and a four percent ten year treasure yield 0:09:49.760 --> 0:09:52.040 will turn to a three percent treasure yield or a 0:09:52.120 --> 0:09:54.560 two percent treasure yield, and people make a capital gain, 0:09:55.120 --> 0:09:57.680 but I think there are better long term capital gains 0:09:57.760 --> 0:10:00.800 we made still in the equity market. But I wouldn't 0:10:00.800 --> 0:10:03.920 be underweighted fixed income right now, and within fixed income, 0:10:04.360 --> 0:10:07.199 I would be definitely long duration and short credit. I 0:10:07.240 --> 0:10:09.520 don't think you're paid for taking credit risks. You are 0:10:09.559 --> 0:10:11.359 getting paid for taking duration risks. 0:10:11.120 --> 0:10:13.080 Doctor Kelly, I've got to do this, It's too important. 0:10:13.160 --> 0:10:16.559 Jason Furman of Harvard just comes out with the mathematics 0:10:16.559 --> 0:10:20.560 on the annualized view twelve month annualized four point seven 0:10:20.600 --> 0:10:22.680 percent core six months. 0:10:22.840 --> 0:10:24.480 The view is four point one. 0:10:24.320 --> 0:10:28.200 Percent, a lesser disinflation three months, which is what I 0:10:28.240 --> 0:10:32.080 look at three point one percent, David Kelly. The one 0:10:32.080 --> 0:10:37.880 month annualized core CPI is one point nine percent. Can 0:10:37.920 --> 0:10:40.880 you go short termism and look at those one in 0:10:40.960 --> 0:10:45.800 three month statistics? Are they a valid tool to gauge disinflation? 0:10:46.280 --> 0:10:49.679 I don't think so looking at the CPI index, because 0:10:49.760 --> 0:10:53.240 what's really going on is you've got these these weird 0:10:53.600 --> 0:10:57.920 categories in owner's equivalent brand, actual rents and transportation services, 0:10:58.200 --> 0:11:00.600 and I think you just have to track with that's doing. 0:11:00.960 --> 0:11:04.400 I agree with the general proposition the core services inflation 0:11:04.760 --> 0:11:07.839 and inflation in general is fading here. I do not 0:11:07.960 --> 0:11:10.120 think it's getting pushed up by wages. I do think 0:11:10.120 --> 0:11:13.440 it's getting pulled down by competition and by increased inventories. 0:11:14.280 --> 0:11:17.720 So I agree with that the result, but I think 0:11:17.720 --> 0:11:19.960 that the short term view is really being affected by 0:11:20.000 --> 0:11:21.480 the way the government measures these things. 0:11:21.760 --> 0:11:35.080 David, Thank you so much, David Kell. This is a joy. 0:11:35.520 --> 0:11:38.440 After Michael Nathans and yesterday and talking to Rich Greenfield 0:11:38.480 --> 0:11:41.920 from time to time, to speak to Jessica reef Ralic, 0:11:42.080 --> 0:11:45.720 Senior Media Entertainment analyst at Bank of America is an 0:11:45.760 --> 0:11:48.760 honor on this important day for Disney. Jessica, I don't 0:11:48.760 --> 0:11:51.479 want to talk numbers today. I don't want to talk ratios. 0:11:52.320 --> 0:11:54.839 Iger wakes up. I believe he puts. 0:11:54.600 --> 0:11:56.640 On his pants one leg at a time. 0:11:57.240 --> 0:11:59.840 He goes into the office and takes breakfast at some 0:12:00.080 --> 0:12:04.400 place with avocado this or glessa pure water. Who does 0:12:04.480 --> 0:12:10.320 he speak to within Disney about the urgency of a 0:12:10.400 --> 0:12:13.160 true restructure. Who's he actually talking to? 0:12:14.200 --> 0:12:18.360 I think that is a great question, because there does 0:12:18.400 --> 0:12:21.800 seem to be a lack of confidant in the company, 0:12:22.160 --> 0:12:27.080 given the exodus of executives over the years, and so 0:12:27.320 --> 0:12:31.560 bringing back reportedly bringing back Kevin Mayer and even Tom 0:12:31.600 --> 0:12:37.760 Stabbs should give gives Bob big Er somebody with experience 0:12:38.000 --> 0:12:39.960 to kind of bounce things off of. 0:12:40.640 --> 0:12:43.280 But the issue, Jessica, and you've lived this. I mean 0:12:43.280 --> 0:12:45.520 you used to go in and Gordon Crawford would shake 0:12:45.559 --> 0:12:49.040 a Capitol guardian trust because Jessica was showing up to 0:12:49.040 --> 0:12:50.360 give him wisdom on this. 0:12:50.559 --> 0:12:51.920 There was a business model. 0:12:52.240 --> 0:12:54.320 You made a movie, You made four movies for one 0:12:54.400 --> 0:12:57.040 hundred million, and one of them hit big and everybody 0:12:57.160 --> 0:13:00.920 was happy. That model has been destroyed. What's the Jessica 0:13:01.000 --> 0:13:07.240 reef aerlic streaming model that will provide cash flow and profit. 0:13:08.559 --> 0:13:12.719 Look, I think they're taking the right steps. I've heard 0:13:12.760 --> 0:13:15.560 you guys speak about the price increase, which is have dy. 0:13:15.679 --> 0:13:18.400 There's a twenty seven percent price increase for the subscription 0:13:18.600 --> 0:13:22.120 only tier at Disney Plus and a twenty percent price 0:13:22.120 --> 0:13:23.040 increase for Hulu. 0:13:23.080 --> 0:13:25.000 Again, subscription only. 0:13:24.920 --> 0:13:28.440 Advertising is not the advertising tier is not being touched 0:13:28.480 --> 0:13:31.880 because the r POO is higher with a combination of 0:13:31.880 --> 0:13:35.480 subscription and advertising. So they're kind of forcing consumers into 0:13:35.600 --> 0:13:39.280 the law price advertising supported tier. 0:13:39.920 --> 0:13:41.800 So that should help the bottom line. 0:13:42.559 --> 0:13:45.040 They did say that costs are a head of expectations, 0:13:45.040 --> 0:13:48.079 so they'll have more than five point five billion dollars 0:13:48.080 --> 0:13:50.680 in total costs being taken out of the company. A 0:13:50.720 --> 0:13:54.480 lot of that is streaming, so it's content, it's marketing, overhead, etc. 0:13:55.040 --> 0:13:57.600 SG and a et cetera. So they're focusing on that. 0:13:58.160 --> 0:14:02.320 On the content side, they do need to improve, no 0:14:02.520 --> 0:14:05.000 question about it. And Bob bygers last night, this is 0:14:05.000 --> 0:14:06.680 his primary focus. 0:14:06.559 --> 0:14:09.680 Well primary focus in order to grow the platform or 0:14:09.679 --> 0:14:12.040 in order to prepare it for some sort of spin 0:14:12.080 --> 0:14:13.480 off or sale to someone else. 0:14:15.120 --> 0:14:18.720 In either case, whether it's it's keeping it internally or 0:14:19.760 --> 0:14:23.280 selling or spinning, they need to improve the content. And 0:14:23.320 --> 0:14:26.600 it's you know, the content on the platform has to 0:14:26.640 --> 0:14:28.920 be improved, he said. He said in the past that 0:14:28.960 --> 0:14:31.640 it's been getting tired. They have too many you. 0:14:31.560 --> 0:14:33.400 Know, there's just everyone's getting distracted. 0:14:33.840 --> 0:14:38.160 And obviously the one place where they've really missed is 0:14:38.200 --> 0:14:40.520 in film over the last you know, a couple of 0:14:40.600 --> 0:14:44.240 years and they hit and this is his primary focus. 0:14:44.280 --> 0:14:46.000 They have to fix that film division. 0:14:46.400 --> 0:14:49.040 So this sounded like a Bob Eiger and retreat, defensive, 0:14:49.360 --> 0:14:52.920 not really aggressive and offensive, not planning out some sort 0:14:53.000 --> 0:14:57.360 of expansion kind of plan, but rather really not pushing 0:14:57.400 --> 0:15:00.160 back against the suggestion of a sale to Apple there 0:15:00.200 --> 0:15:03.000 in some of the parts or in a large sum, 0:15:03.160 --> 0:15:06.600 and you're looking at a situation where people are questioning 0:15:07.040 --> 0:15:09.800 what the value of the company is beyond the parks. 0:15:10.400 --> 0:15:13.400 Do you think that it is valid to really characterize 0:15:13.400 --> 0:15:16.040 this as Disney in defense. 0:15:17.360 --> 0:15:22.720 Well, look, they are clearly challenged from multiple areas. They 0:15:22.720 --> 0:15:26.960 have secular challenges with the PATV universe in decline, as 0:15:27.040 --> 0:15:30.920 do all traditional media companies. There are also cyclical challenges 0:15:30.920 --> 0:15:35.400 which all of the all companies are facing. But they 0:15:35.440 --> 0:15:40.800 have incredible assets, they have incredible branded, unique IP and 0:15:40.880 --> 0:15:44.280 so this is they're dealing from a position of a 0:15:44.400 --> 0:15:47.320 challenge position on one hand and a position of strength 0:15:47.360 --> 0:15:51.000 on the other. And it does feel like, yes, there's 0:15:51.040 --> 0:15:53.800 some defensiveness because they have to fix what's wrong and 0:15:53.800 --> 0:15:55.160 there's a lot that's wrong. 0:15:55.440 --> 0:15:57.280 But he's also dealing with each piece of it. 0:15:57.720 --> 0:16:00.760 So whether it's leveraging the ESPN they know with a 0:16:00.840 --> 0:16:05.280 deal with pen or you know, focusing on different parts 0:16:05.320 --> 0:16:05.920 of the business. 0:16:05.920 --> 0:16:09.760 They're quick. Costs are growing, the subs on sub. 0:16:09.640 --> 0:16:12.160 Numbers, I know you guys have mentioned that they lost subs, 0:16:12.200 --> 0:16:14.520 but a lot of the subs are fifty cent subs 0:16:14.520 --> 0:16:17.360 in India that don't financially contribute. 0:16:16.960 --> 0:16:19.400 Right, Jessica, just do you give me a three year 0:16:19.480 --> 0:16:21.320 vision on who's going to win it streaming on a 0:16:21.360 --> 0:16:26.040 biold cell basis, who's your winner out three years on 0:16:26.120 --> 0:16:27.520 the streaming wars? 0:16:28.480 --> 0:16:32.040 Well, obviously, Deflix is doing incredibly well and in. 0:16:32.000 --> 0:16:35.120 A great position. We also think Warner Brothers. 0:16:34.760 --> 0:16:37.560 Discovery with Max, which is really just at the very 0:16:37.640 --> 0:16:41.640 very beginning stages, is in a phenomenal position. Given their 0:16:41.800 --> 0:16:44.520 extensive they don't just have the biggest library, they have 0:16:44.680 --> 0:16:48.120 probably the best library in the industry. And I think 0:16:48.200 --> 0:16:50.120 you guys have been a little tough on Disney this 0:16:50.200 --> 0:16:53.840 morning because if you add Disney Plus with Hulu with 0:16:54.120 --> 0:16:57.240 ESPN Plus, they are well over two hundred million subs, 0:16:57.640 --> 0:16:59.360 so they have a lot going on. 0:16:59.560 --> 0:17:02.600 But look, there's a lot effects. 0:17:02.320 --> 0:17:05.200 And I absolutely agree with that, and it does seem 0:17:05.240 --> 0:17:08.119 like they're taking many of the steps that are necessary 0:17:08.160 --> 0:17:10.080 to fix this platform. 0:17:10.119 --> 0:17:12.639 And Jessica would be tough because our subsound fifty cents 0:17:12.680 --> 0:17:15.840 that by Adi Dallas Adie something dulls a month, Jessica. 0:17:15.920 --> 0:17:19.560 Thank you, Jessica ried Bank for America appreciate it. 0:17:23.920 --> 0:17:28.240 Henrietta Trade, he's economic policy director research with Vida Partners, 0:17:28.280 --> 0:17:29.680 joins us right now. 0:17:29.720 --> 0:17:31.080 We talked to Kim Wallace. 0:17:30.720 --> 0:17:33.920 Earlier, which is great because you've got legit international economics 0:17:33.920 --> 0:17:39.879 there with Henrietta Trades, you've got piercing domestic policy analysis. 0:17:41.000 --> 0:17:45.320 Excuse me, Henrietta, what do the Democrats do on Capitol 0:17:45.400 --> 0:17:47.520 Hill to advance bidynomics? 0:17:48.480 --> 0:17:50.080 Well, first of all, I'll be to say I wish 0:17:50.119 --> 0:17:52.720 I'd dress better for this segment, because I am just 0:17:53.600 --> 0:17:57.440 beyond Hermes. I think we're calling you now. So what 0:17:57.440 --> 0:17:59.800 are the Democrats doing to advance bydenomics? I mean, I 0:17:59.840 --> 0:18:03.720 think right now what you're seeing is them canvassing across 0:18:03.760 --> 0:18:07.320 the country and really watching to see, most importantly, who 0:18:07.440 --> 0:18:09.680 is coming out in the Republican Party on the Senate 0:18:09.720 --> 0:18:12.480 candidate side, and how they can run an economic agenda 0:18:12.520 --> 0:18:15.560 against them. So far, it's turning out to be pretty easy, 0:18:15.720 --> 0:18:18.280 and they don't even really have to focus on economics yet, 0:18:18.280 --> 0:18:21.199 as the votes in Ohio earlier this week showed, they 0:18:21.240 --> 0:18:24.040 can talk about abortion issues and get them turn out 0:18:24.080 --> 0:18:25.040 to be through the roof. 0:18:25.760 --> 0:18:27.480 They can run against Kerry Lake. 0:18:27.560 --> 0:18:30.239 It looks like in Arizona, which is going to be 0:18:30.320 --> 0:18:35.639 sort of a Trump versus Biden and sort of mainstream politics. 0:18:36.080 --> 0:18:38.159 So the Bidenomics message is something they're trying to get 0:18:38.200 --> 0:18:40.040 out there, but they haven't had to really yet. 0:18:40.440 --> 0:18:42.760 When you're wearing your ames and all the bars of 0:18:42.840 --> 0:18:45.520 Capital City and you're getting pulsed up here for the debates, 0:18:45.520 --> 0:18:49.959 the primaries, the election, Henrietta, Trey's the phrase, it's the 0:18:50.000 --> 0:18:53.760 economy stupid, I've never agreed with. Is it the culture 0:18:53.800 --> 0:18:55.800 war stupid? Is that really where we're heading? 0:18:56.640 --> 0:18:59.280 You know what it is? It's abortion stupid. Do not 0:18:59.600 --> 0:19:01.240 come from abortion. I mean Roe v. 0:19:01.400 --> 0:19:04.000 Wade and the jobs decision was the worst thing Republicans 0:19:04.000 --> 0:19:04.760 could ever have done. 0:19:04.760 --> 0:19:05.760 They woke up a beast. 0:19:06.080 --> 0:19:09.120 It is all age brackets, It is a turnout machine, 0:19:09.400 --> 0:19:12.720 and they're losing hand over foot. And I don't see 0:19:12.720 --> 0:19:15.600 anyway that that's going to change, especially since Republicans keep 0:19:16.320 --> 0:19:19.159 poking the bear. So I think that's really the message. 0:19:19.160 --> 0:19:21.440 It's not the economy, it's abortion. 0:19:21.960 --> 0:19:24.440 That message on the national stage isn't going down. 0:19:24.480 --> 0:19:24.680 Well. 0:19:24.880 --> 0:19:27.640 What about in the primaries, Henritta, what do you expect 0:19:27.640 --> 0:19:29.680 to hear in the debates later this month? 0:19:31.000 --> 0:19:33.159 Well, the debates this month are obviously all going to 0:19:33.160 --> 0:19:35.680 be on the Republican side, and I think rond De 0:19:35.800 --> 0:19:38.440 Santis is the one that every candidate is going to 0:19:38.520 --> 0:19:41.239 try to beat because Trump may or may not show up. 0:19:41.440 --> 0:19:46.520 If Trump is not on the the deis for those debates, 0:19:46.840 --> 0:19:49.560 you're going to see Rhonda Santis just get slammed by 0:19:49.680 --> 0:19:53.560 every single candidate, from Nicky Haley to Tim Scott on 0:19:53.680 --> 0:19:55.920 down to make Pen's and Chris Christy. They will bring 0:19:56.000 --> 0:19:57.960 up Trump occasionally, but the person to beat will be 0:19:58.000 --> 0:20:00.679 Rhonda Santis. He's already tanking in the full He was 0:20:00.720 --> 0:20:02.440 at thirty percent in the beginning of this year. Now 0:20:02.480 --> 0:20:06.840 he's below fifteen. That is a death spiral campaign, shakeups, 0:20:06.840 --> 0:20:08.960 et cetera. I have a friend to ask if we're 0:20:09.000 --> 0:20:11.119 going to have a watch party for the November eighth 0:20:11.200 --> 0:20:15.520 DeSantis Newsome debate. And the question is more, is he's 0:20:15.520 --> 0:20:17.919 still going to be one of the front runners in 0:20:17.920 --> 0:20:21.800 the race after these campaigns and after the debates At 0:20:21.840 --> 0:20:24.679 the primary side, I mean, their position on abortion is 0:20:24.760 --> 0:20:27.280 just as far to the right as you can get, 0:20:27.320 --> 0:20:29.879 and they just drive each other further, which alienates the 0:20:30.000 --> 0:20:31.320 entire general election base. 0:20:31.760 --> 0:20:34.439 So if it isn't Ron, decentis who is the front runner? 0:20:34.520 --> 0:20:36.119 Is it going to be Tim Scott? Is it going 0:20:36.160 --> 0:20:38.040 to be someone who's not even thrown their hat in 0:20:38.040 --> 0:20:39.679 the ring yet, like Glenn Youngkin? 0:20:40.760 --> 0:20:41.879 I think so, Lisa. 0:20:42.000 --> 0:20:45.240 I mean, there is a deadline of November sixteenth to 0:20:45.240 --> 0:20:47.760 get on the ballot in Nevada, and I think that 0:20:47.760 --> 0:20:50.080 that's a key deadline to look for. I think the 0:20:50.160 --> 0:20:52.680 money that has gone to Ron DeSantis could easily start 0:20:52.680 --> 0:20:53.920 flowing to another candidate. 0:20:54.160 --> 0:20:55.120 I do agree that. 0:20:55.040 --> 0:20:58.160 Tim Scott is the next most likely, but he pulls 0:20:58.200 --> 0:21:00.840 at three percent, so really Young Can or any of 0:21:00.840 --> 0:21:02.400