1 00:00:02,520 --> 00:00:13,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg 2 00:00:13,840 --> 00:00:17,920 Speaker 1: Surveillance Podcast. Catch us live weekdays at seven am Eastern 3 00:00:18,200 --> 00:00:22,000 Speaker 1: on Apple CarPlay or Android Auto with the Bloomberg Business App. 4 00:00:22,360 --> 00:00:25,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:25,760 --> 00:00:27,120 Speaker 1: us live on YouTube. 6 00:00:27,200 --> 00:00:31,400 Speaker 2: We welcome now Glenn Hubbard, who has defined the growth 7 00:00:31,440 --> 00:00:35,360 Speaker 2: of the Columbia Business School. He stole Abby Joseph Cohen 8 00:00:35,760 --> 00:00:38,960 Speaker 2: from Golden Sachs as well, but far more. He is 9 00:00:39,000 --> 00:00:42,480 Speaker 2: a Republican of a different cut. You do not hear 10 00:00:42,520 --> 00:00:46,800 Speaker 2: his name discussed by President Trump. Maybe that will change. 11 00:00:47,200 --> 00:00:51,080 Speaker 2: Professor Robert, thank you so much for joining Bloomberg's leasure. 12 00:00:51,560 --> 00:00:55,240 Speaker 2: Does he need to widen the reach of his view 13 00:00:55,280 --> 00:00:59,080 Speaker 2: of potential chairman? Does he need to go beyond the 14 00:00:59,200 --> 00:01:04,040 Speaker 2: comfortable Trump minions and look out to Clarida Hubbard and others. 15 00:01:05,000 --> 00:01:08,120 Speaker 3: Look, I think the President's got reasonable names. He'll do 16 00:01:08,240 --> 00:01:10,840 Speaker 3: what he's going to do. I think the show that 17 00:01:10,920 --> 00:01:13,680 Speaker 3: we saw yesterday and other things are harmful for the 18 00:01:13,720 --> 00:01:17,080 Speaker 3: Fed and for his own goals of getting lower interest rates. 19 00:01:17,120 --> 00:01:20,119 Speaker 3: It's not obvious to me that FED policy is too 20 00:01:20,160 --> 00:01:21,840 Speaker 3: tight at the moment. If you just look at a 21 00:01:21,880 --> 00:01:24,759 Speaker 3: simple tailor rule. And it is obvious to me. If 22 00:01:24,800 --> 00:01:28,480 Speaker 3: you continue to beat up the Fed, you risk raising 23 00:01:28,520 --> 00:01:32,600 Speaker 3: inflation expectations, and you risk raising term creamium in long rates, 24 00:01:32,640 --> 00:01:33,959 Speaker 3: and it's the long rates to count. 25 00:01:34,360 --> 00:01:38,840 Speaker 2: You are definitive on a cogent discussion of supply side. 26 00:01:39,200 --> 00:01:43,319 Speaker 2: The arc theme of the Trump administration is rate cuts, 27 00:01:43,440 --> 00:01:48,280 Speaker 2: tax cuts will stimulate growth? Can tax cuts stimulate growth? 28 00:01:48,600 --> 00:01:52,360 Speaker 2: Or is Powell bucked in boxed in by legislation. 29 00:01:53,840 --> 00:01:56,760 Speaker 3: Well, tax cuts of the right kind can stimulate growth. 30 00:01:56,800 --> 00:02:01,040 Speaker 3: In the OBBBA that just passed, we did have expensing 31 00:02:01,040 --> 00:02:03,600 Speaker 3: a business investment. That's a good thing, better treatment of 32 00:02:03,720 --> 00:02:05,840 Speaker 3: R and D, but we also had a big deficit 33 00:02:05,960 --> 00:02:09,560 Speaker 3: finance tax cut. The best policies for growth would be 34 00:02:09,680 --> 00:02:15,040 Speaker 3: changes in regulation, for permitting some housing reform, and frankly, 35 00:02:15,160 --> 00:02:18,320 Speaker 3: high skilled immigration that the administration doesn't seem that interested. 36 00:02:18,480 --> 00:02:20,280 Speaker 2: Glenn, when you came out of Florida, and I should 37 00:02:20,360 --> 00:02:23,520 Speaker 2: point out, folks, if he's the second Hubbard in the family. 38 00:02:24,360 --> 00:02:27,079 Speaker 2: The other Hubbard is with the band Sawyer Brown, which 39 00:02:27,200 --> 00:02:31,200 Speaker 2: is annoyeded, which is noted Glenn, when you came out 40 00:02:31,240 --> 00:02:34,320 Speaker 2: of Florida, you went to Harvard, you read Alan meltzer 41 00:02:34,400 --> 00:02:38,280 Speaker 2: cover to cover, Alan did the two volume FED history. 42 00:02:38,639 --> 00:02:41,800 Speaker 2: Are we at a point like at other moments, including 43 00:02:41,840 --> 00:02:45,960 Speaker 2: the seismic McChesney Martin moment in nineteen fifty one where 44 00:02:46,000 --> 00:02:48,000 Speaker 2: we risk FED independence. 45 00:02:49,160 --> 00:02:51,560 Speaker 3: I think we are at that moment. I think a 46 00:02:51,560 --> 00:02:55,240 Speaker 3: good FED chair will block that much as Chair Martin did. 47 00:02:55,639 --> 00:02:58,560 Speaker 3: But I worry when President Trump says I'd like lower 48 00:02:58,680 --> 00:03:01,600 Speaker 3: rates because I would like to help the fiscal situation. 49 00:03:02,120 --> 00:03:04,880 Speaker 3: Presidents often say they want lower rates to help the 50 00:03:04,919 --> 00:03:08,240 Speaker 3: economy grow or something like that. That's standard politics. This 51 00:03:08,400 --> 00:03:11,040 Speaker 3: is something different, and I worry about it. 52 00:03:11,760 --> 00:03:14,880 Speaker 4: And Glenn talk to us about just tariffs in general. 53 00:03:14,919 --> 00:03:19,640 Speaker 4: How do you when you're teaching your Classic Columbia, how 54 00:03:19,680 --> 00:03:22,240 Speaker 4: do you talk to them about this? Tariffs in general? 55 00:03:22,560 --> 00:03:25,560 Speaker 4: How should they be used? How are they not used? 56 00:03:25,639 --> 00:03:28,880 Speaker 3: Well, that's a great question. I mean tariffs are at 57 00:03:28,919 --> 00:03:32,400 Speaker 3: tax they're not really inflationary. There one time changes in 58 00:03:32,440 --> 00:03:35,400 Speaker 3: the price level. I wouldn't recommend them, but I don't 59 00:03:35,440 --> 00:03:38,200 Speaker 3: think inflation is the biggest reason. I think the reason 60 00:03:38,280 --> 00:03:40,920 Speaker 3: is you're taxing and distorting supply chains. You know, people 61 00:03:40,920 --> 00:03:44,800 Speaker 3: forget two basic things. One at tax on imports is 62 00:03:44,840 --> 00:03:47,560 Speaker 3: actually a tax on exports, and the reason for that 63 00:03:47,720 --> 00:03:51,040 Speaker 3: is two one movements in the dollar and second the 64 00:03:51,080 --> 00:03:54,520 Speaker 3: fact that American imports are largely intermediate goods. You hurt 65 00:03:54,560 --> 00:03:57,160 Speaker 3: manufacturing by doing it. The second point is it's not 66 00:03:57,240 --> 00:03:59,960 Speaker 3: the current account, it's the capital account. All the current account. 67 00:04:00,080 --> 00:04:02,360 Speaker 3: This is the mirror of the capitol account. You can 68 00:04:02,360 --> 00:04:04,120 Speaker 3: put all the tariffs you want on. You're not going 69 00:04:04,160 --> 00:04:07,160 Speaker 3: to change the current account until you change the capitol. 70 00:04:07,280 --> 00:04:09,520 Speaker 2: For all of you nationwide. Glenn Hubbard with US of 71 00:04:09,520 --> 00:04:15,000 Speaker 2: Columbia Business School, just an outstanding two decades there building 72 00:04:15,040 --> 00:04:18,520 Speaker 2: out the jewel of the upper Upper west Side to Morningside, 73 00:04:18,800 --> 00:04:21,359 Speaker 2: his professor Hubbard. In a few minutes we have left 74 00:04:21,360 --> 00:04:23,920 Speaker 2: with you. I have to go back to the FED 75 00:04:24,480 --> 00:04:27,480 Speaker 2: and look at this concept of descent of a younger 76 00:04:27,520 --> 00:04:31,040 Speaker 2: Bank of England where Catherine Mann and others go after 77 00:04:32,120 --> 00:04:35,840 Speaker 2: Governor Bailey. There was descent a bit Larry Meyer writing 78 00:04:35,880 --> 00:04:39,480 Speaker 2: about it with Chairman Greenspan. Do we have a FED 79 00:04:39,680 --> 00:04:44,279 Speaker 2: where whatever President Trump does into twenty twenty six, that 80 00:04:44,360 --> 00:04:47,960 Speaker 2: the governors and the presidents can protect the FED by 81 00:04:48,040 --> 00:04:50,560 Speaker 2: voting against a Trump chairman. 82 00:04:51,960 --> 00:04:56,000 Speaker 3: That's certainly possible, And obviously if the chair had unwise 83 00:04:56,080 --> 00:04:59,400 Speaker 3: policy decisions. I think likely. I think President Trump will 84 00:04:59,400 --> 00:05:02,560 Speaker 3: wind up me making a good FED choice. My concern 85 00:05:02,680 --> 00:05:05,760 Speaker 3: is really the atmospherics around the FED that really come 86 00:05:05,800 --> 00:05:06,960 Speaker 3: from the President himself. 87 00:05:08,080 --> 00:05:10,440 Speaker 2: Look, Glynn, just two more questions here. I want to 88 00:05:10,440 --> 00:05:13,000 Speaker 2: get one, and I know Paul wants to speak to 89 00:05:13,000 --> 00:05:17,200 Speaker 2: you as well. What is the best outcome for the 90 00:05:17,360 --> 00:05:20,600 Speaker 2: advisors to the president sitting on the couch in the 91 00:05:20,640 --> 00:05:25,600 Speaker 2: Oval office is what's the Hubbard recommendation to the Secretary 92 00:05:25,640 --> 00:05:28,640 Speaker 2: of Treasury to guide the president's thinking? 93 00:05:29,520 --> 00:05:32,719 Speaker 3: Pivot to growth? I mean the President has already said, look, 94 00:05:32,839 --> 00:05:36,080 Speaker 3: I've got my OBBB done. Great. He says he'll have 95 00:05:36,160 --> 00:05:40,600 Speaker 3: the tariffs done by September Labor Day. Okay, fine, I 96 00:05:40,720 --> 00:05:43,200 Speaker 3: don't agree with them, but fine, pivot to growth and 97 00:05:43,200 --> 00:05:45,120 Speaker 3: there's a list of things you could do to get 98 00:05:45,160 --> 00:05:48,120 Speaker 3: the economy growing again. It's what Secretary Bessett talks about, 99 00:05:48,160 --> 00:05:50,520 Speaker 3: It's what the President talks about. How about doing it right? 100 00:05:50,839 --> 00:05:53,039 Speaker 2: Is Clariena on the short list? I mean, you two 101 00:05:53,160 --> 00:05:56,520 Speaker 2: argued fought My Cats and Dogs at Columbia years ago. 102 00:05:56,560 --> 00:05:59,880 Speaker 2: But as Richard Clarita on the shortlist for Glenn Hubbard. 103 00:06:00,360 --> 00:06:03,680 Speaker 3: I think rich Clarita is a phenomenal economist. The only 104 00:06:03,720 --> 00:06:07,080 Speaker 3: shortlist that matters is the President's Thank Cldhulbard. 105 00:06:07,320 --> 00:06:10,080 Speaker 2: That is true, Thank you so much, greatly appreciate it. 106 00:06:10,120 --> 00:06:12,760 Speaker 2: He's with Columbia at Business School and should be on 107 00:06:12,839 --> 00:06:14,680 Speaker 2: any shortlist for the fit. 108 00:06:19,760 --> 00:06:23,320 Speaker 1: You're listening to the Bloomberg Surveillance Podcast. Catch us live 109 00:06:23,400 --> 00:06:26,560 Speaker 1: weekday afternoons from seven to ten am Eastern Listen on 110 00:06:26,640 --> 00:06:30,279 Speaker 1: Applecarplay and Android Auto with the Bloomberg Business app, or 111 00:06:30,440 --> 00:06:32,040 Speaker 1: watch us live on YouTube. 112 00:06:32,120 --> 00:06:35,160 Speaker 2: There was a revolution in nineteen forty seven, which is 113 00:06:35,200 --> 00:06:40,039 Speaker 2: sort of where modern statistics of economics came in vasily 114 00:06:40,120 --> 00:06:44,360 Speaker 2: Leontifan and others. Before that, there was an art to 115 00:06:44,400 --> 00:06:48,080 Speaker 2: it that was decided of vailue. The Conference Board had 116 00:06:48,080 --> 00:06:50,200 Speaker 2: a lot to do with it, and another one was 117 00:06:50,279 --> 00:06:54,800 Speaker 2: Jeffrey Moore. The Economic Cycle Research Institute. Latron Achathan has 118 00:06:54,839 --> 00:06:59,320 Speaker 2: carried the torch forward here and releases today a jaw 119 00:06:59,400 --> 00:07:05,839 Speaker 2: dropping future inflation grade going against consensus discuss. 120 00:07:07,000 --> 00:07:09,359 Speaker 5: Well, we as you, as you said in the lead in, 121 00:07:09,400 --> 00:07:11,520 Speaker 5: we're doing something a little different. What we're doing is 122 00:07:11,520 --> 00:07:16,160 Speaker 5: looking at the direction of movement for growth, direction of 123 00:07:16,200 --> 00:07:19,920 Speaker 5: movement for inflation on the latter point on this inflation cycle. 124 00:07:19,960 --> 00:07:23,840 Speaker 5: It's different from cycles and growth. They are very clear cycles. 125 00:07:23,880 --> 00:07:27,160 Speaker 5: They're totally different, they're unique. We have future inflation gauge, 126 00:07:27,160 --> 00:07:31,200 Speaker 5: which anticipates the direction of travel. There news slash is 127 00:07:31,240 --> 00:07:35,880 Speaker 5: it's down. Okay? Really yeah? So now our job is 128 00:07:35,880 --> 00:07:37,480 Speaker 5: to figure out what does that mean? What the heck 129 00:07:37,520 --> 00:07:38,000 Speaker 5: does that mean? 130 00:07:38,120 --> 00:07:40,880 Speaker 2: Is Powell behind? Does a president have an argument that 131 00:07:40,960 --> 00:07:43,800 Speaker 2: mister Powell and the feed is behind because of your 132 00:07:44,200 --> 00:07:46,240 Speaker 2: future inflation gage? 133 00:07:46,520 --> 00:07:48,680 Speaker 5: Well, let's say that there's not a big argument to 134 00:07:48,720 --> 00:07:53,400 Speaker 5: be extra hawkish here, and so maybe for different reasons, 135 00:07:54,960 --> 00:07:59,040 Speaker 5: the directional move here is to the downside. I know 136 00:08:00,040 --> 00:08:03,880 Speaker 5: people are wondering, why, why, why listen to this indicator? Right? Look, 137 00:08:04,000 --> 00:08:07,720 Speaker 5: it has nailed these directional calls as far as I 138 00:08:07,720 --> 00:08:10,440 Speaker 5: can remember, which is roughly to the nineteen nineties when 139 00:08:10,480 --> 00:08:14,640 Speaker 5: I started doing this, and big calls more recently would 140 00:08:14,680 --> 00:08:17,920 Speaker 5: be in twenty one to the downside. Very critical call 141 00:08:18,360 --> 00:08:21,440 Speaker 5: was in early twenty four that we were going into 142 00:08:21,480 --> 00:08:25,760 Speaker 5: sticky inflation, which just messed up everybody. And here, with 143 00:08:25,920 --> 00:08:28,160 Speaker 5: all the presumption that tariffs are going to bring this 144 00:08:28,240 --> 00:08:32,080 Speaker 5: inflation spiral to the four, the indicators are moving to 145 00:08:32,160 --> 00:08:35,559 Speaker 5: the downn side. So yeah, we had some goods inflation 146 00:08:35,640 --> 00:08:40,760 Speaker 5: over the summer, but core inflation is just going to 147 00:08:40,840 --> 00:08:42,640 Speaker 5: sit there and simmer for the time being. It's not 148 00:08:42,760 --> 00:08:47,120 Speaker 5: running away. Services inflation is actually easing a bit here. 149 00:08:47,840 --> 00:08:51,160 Speaker 5: I think the consumer the economy just can't bear it, 150 00:08:51,880 --> 00:08:55,480 Speaker 5: and so try as they may, and they will try. 151 00:08:55,520 --> 00:08:58,960 Speaker 5: All the businesses are going to try. They're not going 152 00:08:59,040 --> 00:09:00,959 Speaker 5: to be able to push it too hard. Consumers may 153 00:09:01,040 --> 00:09:04,040 Speaker 5: ultimately pay the price here, but inflation is not going 154 00:09:04,120 --> 00:09:04,840 Speaker 5: to run away. 155 00:09:04,880 --> 00:09:07,800 Speaker 4: Interesting, So I mean, so does that suggest that again, 156 00:09:08,559 --> 00:09:12,720 Speaker 4: whoever through the supply chain, the importers, the distributors, the wholesalers, 157 00:09:13,000 --> 00:09:15,960 Speaker 4: the retailers, are they kind of all in some way, 158 00:09:16,160 --> 00:09:19,040 Speaker 4: shape or form eating that margin. 159 00:09:18,840 --> 00:09:21,920 Speaker 5: Along the way. I think eventually it gets to the consumer. Okay, 160 00:09:22,160 --> 00:09:24,280 Speaker 5: look at the end of the day, we all pay right, 161 00:09:24,600 --> 00:09:27,559 Speaker 5: and we are there's no free lunch, Sure we are, 162 00:09:27,600 --> 00:09:32,440 Speaker 5: But the inflation spiral, which is that's the bogeyman for 163 00:09:32,480 --> 00:09:34,319 Speaker 5: the Fed. They're free. They're like, wait, wait, wait, is 164 00:09:34,360 --> 00:09:36,959 Speaker 5: there some if we have a step up in inflation, 165 00:09:37,000 --> 00:09:39,959 Speaker 5: does this the beginning of many steps up? The answer, 166 00:09:40,240 --> 00:09:42,080 Speaker 5: as far as we can see with the cyclical stuff 167 00:09:42,280 --> 00:09:44,959 Speaker 5: is no Now. Remember you're talking about regime change. I'm 168 00:09:44,960 --> 00:09:46,840 Speaker 5: looking at the screens. They're all regime change on some 169 00:09:47,080 --> 00:09:50,920 Speaker 5: way or another. Think back to the early seventies. I 170 00:09:50,960 --> 00:09:53,120 Speaker 5: want to go to old times for Tom here. Okay, 171 00:09:53,320 --> 00:09:57,400 Speaker 5: think back to the early seventies. So so Nixon comes in, 172 00:09:57,440 --> 00:09:59,720 Speaker 5: He's doing all this stuff. Everybody said, this is superinflation. 173 00:09:59,760 --> 00:10:04,040 Speaker 5: Are it? Ultimately was, but not right away and on 174 00:10:04,080 --> 00:10:06,319 Speaker 5: a cyclical basis, we're looking at a few quarters. 175 00:10:06,760 --> 00:10:09,840 Speaker 2: That's not the trade and latsy. What's so important here 176 00:10:10,000 --> 00:10:14,439 Speaker 2: is how the corporations adapt. You're basically saying, everybody, calm down, 177 00:10:15,160 --> 00:10:19,240 Speaker 2: what's the history you see at the Economic Cycle Research Institute, 178 00:10:19,480 --> 00:10:22,679 Speaker 2: all those corporate clients that think your God, your religion, 179 00:10:23,000 --> 00:10:24,160 Speaker 2: how do they adapt to this? 180 00:10:24,480 --> 00:10:27,240 Speaker 5: Make hay while the sun's shining. I think the wheels 181 00:10:27,240 --> 00:10:29,800 Speaker 5: aren't coming off right here. I think there is a 182 00:10:29,800 --> 00:10:32,560 Speaker 5: little pricing power with the sticky inflation such as it is. 183 00:10:33,080 --> 00:10:35,439 Speaker 5: Take advantage of it as best you can. And you're 184 00:10:35,440 --> 00:10:38,120 Speaker 5: seeing some of the companies you were just reporting trying 185 00:10:38,120 --> 00:10:40,959 Speaker 5: to do the best they can there for the time being. 186 00:10:41,520 --> 00:10:46,040 Speaker 5: The consumer writ large, that's wealthy households and lower income 187 00:10:46,080 --> 00:10:52,000 Speaker 5: households are bearing it. Okay, I am not sugarcoating what's 188 00:10:52,000 --> 00:10:54,480 Speaker 5: going on with the lower income households. They are under 189 00:10:54,640 --> 00:10:57,079 Speaker 5: a great deal of stress here and that's not going away. 190 00:10:57,360 --> 00:10:58,120 Speaker 5: That'll continue. 191 00:10:58,520 --> 00:11:02,400 Speaker 4: Retail sales going to get that today, still calling for 192 00:11:02,480 --> 00:11:06,920 Speaker 4: some decent growth in retail sales. I kind of guess 193 00:11:06,960 --> 00:11:07,439 Speaker 4: that goes to. 194 00:11:07,440 --> 00:11:10,400 Speaker 5: Your call on the consumer there. Yeah, they're gonna Nobody 195 00:11:10,440 --> 00:11:14,480 Speaker 5: stopped yet, nobody stopped buying yet, and so you still 196 00:11:14,559 --> 00:11:17,520 Speaker 5: have jobs growth even though it's it's it's in an 197 00:11:17,559 --> 00:11:19,160 Speaker 5: easy trend. It's not collapsing. 198 00:11:19,640 --> 00:11:19,800 Speaker 3: Uh. 199 00:11:19,880 --> 00:11:23,560 Speaker 5: These are all parts. So so we we have the 200 00:11:23,720 --> 00:11:27,880 Speaker 5: stag part right, things are slowing. Ye, don't have the 201 00:11:27,920 --> 00:11:31,360 Speaker 5: inflation cycle, right, we know no inflation, no inflation part right here. 202 00:11:31,840 --> 00:11:34,440 Speaker 5: So if you're in the federal reserve, I mean, yeah, 203 00:11:34,640 --> 00:11:35,040 Speaker 5: I just. 204 00:11:35,080 --> 00:11:37,400 Speaker 4: I guess it's another reason to just sit on your. 205 00:11:37,280 --> 00:11:39,960 Speaker 5: Hands, right, He's going yeah, I mean, look, you know, 206 00:11:40,080 --> 00:11:42,440 Speaker 5: sit on your hands. He's gonna take it because he's he's, 207 00:11:42,600 --> 00:11:45,120 Speaker 5: you know, as the he's the lightning rod for the 208 00:11:45,160 --> 00:11:47,440 Speaker 5: moment he does a job, he still has a job. 209 00:11:47,520 --> 00:11:51,640 Speaker 5: He'll he'll ride it out. Ultimately, the president will appoint 210 00:11:51,640 --> 00:11:54,280 Speaker 5: someone more dubbish. It's his remant to do that. 211 00:11:54,280 --> 00:11:55,040 Speaker 6: He's going to do that. 212 00:11:57,200 --> 00:12:00,320 Speaker 5: You know, really big picture, do you want I want 213 00:12:00,360 --> 00:12:02,320 Speaker 5: the administration capturing the Fed? 214 00:12:02,600 --> 00:12:02,760 Speaker 3: Yeah? 215 00:12:02,880 --> 00:12:05,559 Speaker 5: Probably not. And that's what the market gets freaked out about. 216 00:12:05,679 --> 00:12:08,200 Speaker 5: So yesterday you see the reaction, and today there's a 217 00:12:08,240 --> 00:12:10,200 Speaker 5: sigh of relief. I mean, you don't want to be 218 00:12:10,840 --> 00:12:13,199 Speaker 5: Turkey today. You don't want to be the Fed. Back 219 00:12:13,240 --> 00:12:14,319 Speaker 5: in the twenties, we. 220 00:12:14,320 --> 00:12:15,960 Speaker 2: Got to run. I want to get a summer in this. 221 00:12:16,000 --> 00:12:19,320 Speaker 2: So you have no recession call within all your different cycles. 222 00:12:18,920 --> 00:12:21,520 Speaker 5: Not no, no, no. In fact, there's a few right 223 00:12:21,559 --> 00:12:22,360 Speaker 5: spots ail. 224 00:12:22,160 --> 00:12:23,080 Speaker 2: There, like a year ago. 225 00:12:23,280 --> 00:12:27,320 Speaker 5: Yeah, everybody calm down, Yeah, everybody calmed down. 226 00:12:28,240 --> 00:12:30,200 Speaker 2: Okay, love turn on Tom. Thank you so much. 227 00:12:30,679 --> 00:12:34,600 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 228 00:12:34,600 --> 00:12:37,640 Speaker 1: starting at seven am Eastern on Apple Corplay and Android 229 00:12:37,640 --> 00:12:40,679 Speaker 1: Auto with the Bloomberg Business App. You can also listen 230 00:12:40,760 --> 00:12:44,040 Speaker 1: live on Amazon Alexa from our flagship New York station, 231 00:12:44,600 --> 00:12:47,240 Speaker 1: Just say Alexa play Bloomberg eleven thirty. 232 00:12:47,559 --> 00:12:50,680 Speaker 2: I was on Fifth Avenue sort of uptown a little 233 00:12:50,720 --> 00:12:54,000 Speaker 2: bit looking down and there's a Lewis Viuten store. They did. 234 00:12:54,040 --> 00:12:56,760 Speaker 2: It's like a luggage thing. They redid it to get 235 00:12:56,760 --> 00:12:59,840 Speaker 2: an update here in the summer on the state of retail, 236 00:13:00,080 --> 00:13:04,440 Speaker 2: and Telsea joins US Telsey Advisory Group. Luxuries a little 237 00:13:04,440 --> 00:13:07,880 Speaker 2: bit weak, Dana, are the fancy people shopping at Walmart? 238 00:13:09,280 --> 00:13:11,480 Speaker 6: There is a trade down And frankly, thank you Tom 239 00:13:11,520 --> 00:13:14,240 Speaker 6: for having me. Hope your summer's going well. Yes, there 240 00:13:14,240 --> 00:13:16,880 Speaker 6: has been a trade down that's going on. Look what 241 00:13:16,920 --> 00:13:19,760 Speaker 6: you've even heard Walmart say where some of the biggest 242 00:13:19,760 --> 00:13:22,800 Speaker 6: parts of their growth are coming from their hire income consumers. 243 00:13:23,080 --> 00:13:25,920 Speaker 6: But you know, you've had two reports last week. You've 244 00:13:25,960 --> 00:13:31,119 Speaker 6: had Brunello Cucinelli who talked about double digit sales. Yesterday 245 00:13:31,160 --> 00:13:35,120 Speaker 6: you had Richmond. Yeah, the jewelry business overall was up 246 00:13:35,160 --> 00:13:39,680 Speaker 6: eleven percent, continued the momentum from the prior quarter. And frankly, 247 00:13:39,840 --> 00:13:43,240 Speaker 6: every region in the world was up six Every channel 248 00:13:43,960 --> 00:13:47,559 Speaker 6: was up six percent in terms of wholesale retail on online. 249 00:13:47,720 --> 00:13:50,920 Speaker 6: When you look at the regions, Japan was down because 250 00:13:50,960 --> 00:13:54,520 Speaker 6: of a fifty nine percent comparison. You have Asia Pacific 251 00:13:54,720 --> 00:13:58,360 Speaker 6: right basically with flat even including a seven percent drop 252 00:13:58,480 --> 00:14:02,480 Speaker 6: in China, and you've had the Americas being pretty solid 253 00:14:02,840 --> 00:14:06,200 Speaker 6: along with Europe. So it's the halves and the have nots. 254 00:14:06,280 --> 00:14:08,880 Speaker 2: Right now, I agree with that, and I totally buy 255 00:14:08,920 --> 00:14:11,760 Speaker 2: into it. Lisa was talking to me, Lisa Matteo, and 256 00:14:11,800 --> 00:14:13,880 Speaker 2: you know, she and I remember back, you know, and 257 00:14:14,040 --> 00:14:17,240 Speaker 2: well she doesn't remember. I remember the nineteen seventies and 258 00:14:17,320 --> 00:14:21,120 Speaker 2: at Richemonk Cardier comes out with the Love Bracelet, the 259 00:14:21,280 --> 00:14:25,080 Speaker 2: Medium model. This is a love collection. It's an iconic symbol. 260 00:14:25,360 --> 00:14:29,920 Speaker 2: It's six one hundred dollars on your risk. That stuff's moving, Dana, 261 00:14:30,080 --> 00:14:31,400 Speaker 2: isn't it. 262 00:14:31,400 --> 00:14:35,600 Speaker 6: It is that stuff is moving. Iconic heritage means something. 263 00:14:35,920 --> 00:14:38,000 Speaker 6: It can be sold. I think you're going to see 264 00:14:38,040 --> 00:14:41,720 Speaker 6: that from her mez Alsough. But overall, the rate of 265 00:14:41,800 --> 00:14:45,600 Speaker 6: growth for many of these companies still is slowing from 266 00:14:45,600 --> 00:14:46,600 Speaker 6: what had happened. 267 00:14:46,840 --> 00:14:49,720 Speaker 2: If Lisa Matteo had the Love Bracelet from Cardier, are 268 00:14:49,760 --> 00:14:52,160 Speaker 2: you telling me she'd sell it at the real reel? 269 00:14:53,640 --> 00:14:55,080 Speaker 6: I think you want to keep it. Why do you 270 00:14:55,120 --> 00:14:56,600 Speaker 6: ever want to sell the Love bracelet? 271 00:14:56,680 --> 00:14:57,239 Speaker 2: Exactly? 272 00:14:57,880 --> 00:15:00,480 Speaker 4: Dana, talk to us about kind of the you know, 273 00:15:00,640 --> 00:15:02,480 Speaker 4: the other side of the equation, the folks that are 274 00:15:02,520 --> 00:15:06,200 Speaker 4: maybe on struggling a little bit economically. How do we 275 00:15:06,240 --> 00:15:09,200 Speaker 4: see that in retail sales? Because I had a pretty 276 00:15:09,240 --> 00:15:12,080 Speaker 4: solid retail sales number just here a couple of minutes ago. 277 00:15:12,960 --> 00:15:15,120 Speaker 6: I know I've saw the retail sales number two. It 278 00:15:15,160 --> 00:15:18,120 Speaker 6: is solid. I think overall what you've seen, you've seen 279 00:15:18,160 --> 00:15:21,320 Speaker 6: that trade down, whether it's the dollar stores, whether it's 280 00:15:21,360 --> 00:15:25,760 Speaker 6: the discounters and off price. Value is definitely winning and 281 00:15:25,800 --> 00:15:29,680 Speaker 6: that lower income consumer, the strength of a labor market 282 00:15:29,840 --> 00:15:33,760 Speaker 6: allows them the ability to spend, but perhaps the discretionary 283 00:15:33,800 --> 00:15:37,640 Speaker 6: spend isn't as great. It is spending on essentials where 284 00:15:37,880 --> 00:15:40,960 Speaker 6: you're seeing prices go up. We have a pricing tracker 285 00:15:41,000 --> 00:15:44,320 Speaker 6: that we put out every Tuesday, eighty different items, the 286 00:15:44,360 --> 00:15:46,600 Speaker 6: same eighty items. We've been doing it since the middle 287 00:15:46,640 --> 00:15:50,680 Speaker 6: of April, and we haven't seen such a big change yet. 288 00:15:50,880 --> 00:15:54,800 Speaker 6: We saw some footwear changes on the ons and the 289 00:15:54,880 --> 00:15:57,840 Speaker 6: hookahs and the ugs, but you haven't seen a lot yet. 290 00:15:57,920 --> 00:16:01,320 Speaker 6: And as we move through, we think the higher priced 291 00:16:01,360 --> 00:16:04,120 Speaker 6: inventory will come in and then you'll see some changes, 292 00:16:04,120 --> 00:16:05,040 Speaker 6: but that's still to come. 293 00:16:05,320 --> 00:16:08,880 Speaker 2: Dana Telsea, with immense respect to your family's heritage, re 294 00:16:08,920 --> 00:16:13,120 Speaker 2: apt around Bergdorf Goodman. Where is the department store across 295 00:16:13,160 --> 00:16:14,960 Speaker 2: this nation in five years? 296 00:16:16,720 --> 00:16:21,000 Speaker 6: Smaller than what it is today? But smaller it's getting 297 00:16:21,040 --> 00:16:24,440 Speaker 6: even smaller. And look what you're seeing. You're seeing brands 298 00:16:24,480 --> 00:16:29,000 Speaker 6: themselves open up their own stores and becoming much more 299 00:16:29,640 --> 00:16:33,760 Speaker 6: integrated with figuring out who their core customer and community is. 300 00:16:34,080 --> 00:16:36,920 Speaker 6: There's still going to be a place for relevant department stores, 301 00:16:37,240 --> 00:16:41,560 Speaker 6: and certainly blooming Dale's what we're seeing Nordstrom do. They're 302 00:16:41,600 --> 00:16:45,800 Speaker 6: having the opportunity to capture more contemporary brands and they're 303 00:16:45,800 --> 00:16:49,320 Speaker 6: taking advantage of that right now. So I think it 304 00:16:49,400 --> 00:16:52,840 Speaker 6: will be smaller and they'll know their customer better and 305 00:16:52,880 --> 00:16:55,440 Speaker 6: hopefully be more relevant for some of them than they 306 00:16:55,440 --> 00:16:56,000 Speaker 6: are today. 307 00:16:56,160 --> 00:16:57,960 Speaker 2: There's the operative Dana Telsea. 308 00:16:57,960 --> 00:17:03,600 Speaker 4: Exactly to every major retailer around the world, how are 309 00:17:03,640 --> 00:17:05,800 Speaker 4: they What are they telling you in terms of their 310 00:17:05,840 --> 00:17:10,400 Speaker 4: ability to maybe take these tariff costs into their own 311 00:17:10,440 --> 00:17:13,640 Speaker 4: P and L versus maybe passing along to their consumers. 312 00:17:13,680 --> 00:17:14,240 Speaker 4: What are you hearing? 313 00:17:15,600 --> 00:17:17,879 Speaker 6: I'm hearing about a third to third a third. What 314 00:17:17,920 --> 00:17:20,560 Speaker 6: I'm hearing is that a third of the change is 315 00:17:20,600 --> 00:17:23,720 Speaker 6: going to be diversifying your sourcing. For example, whether you 316 00:17:23,800 --> 00:17:27,359 Speaker 6: go from China, whether it's Cambodia, whether it's Vietnam, and 317 00:17:27,440 --> 00:17:29,720 Speaker 6: knowing that every place is going to have some type 318 00:17:29,720 --> 00:17:32,200 Speaker 6: of a tariff attached to it. But with the one 319 00:17:32,240 --> 00:17:34,439 Speaker 6: thing they're all saying is you can't come to the 320 00:17:34,560 --> 00:17:38,400 Speaker 6: US because the prices would go up that much. The 321 00:17:38,440 --> 00:17:42,360 Speaker 6: second third of it is sharing the cost with the manufacturers, 322 00:17:42,840 --> 00:17:46,920 Speaker 6: and the third third of it, the remainder, is raising prices, 323 00:17:46,960 --> 00:17:49,160 Speaker 6: which none of them want to do. And that's why 324 00:17:49,160 --> 00:17:52,240 Speaker 6: I don't think I'm seeing it in my pricing tracker yet. 325 00:17:52,560 --> 00:17:55,879 Speaker 6: But the level of price increases that we're hearing at about, 326 00:17:56,280 --> 00:17:59,600 Speaker 6: is it a mid single digit price increase with US? 327 00:17:59,600 --> 00:18:02,000 Speaker 2: We're going to continue with Dana Tel's just Scott Kirby 328 00:18:02,560 --> 00:18:06,680 Speaker 2: pilot for United Airlines coming up after MS Telsa, Bloomberg 329 00:18:06,720 --> 00:18:10,200 Speaker 2: surveillance on your commute across the nation, Bloomberg surveillance on 330 00:18:10,280 --> 00:18:14,000 Speaker 2: an elevator at Bergdorf Goodman. Right now, Dana, help me 331 00:18:14,040 --> 00:18:17,400 Speaker 2: with where the Chinese are shopping? Like Reachmont comes out 332 00:18:17,440 --> 00:18:20,040 Speaker 2: and they're all going to come out? Is it basically 333 00:18:20,359 --> 00:18:23,879 Speaker 2: the zeitgeist says, Oh, China's flat on its back, except 334 00:18:23,920 --> 00:18:27,480 Speaker 2: they're all shopping in Tokyo and Kuala Lumpar. How does 335 00:18:27,520 --> 00:18:28,000 Speaker 2: that work? 336 00:18:28,960 --> 00:18:29,120 Speaker 3: Well? 337 00:18:29,119 --> 00:18:33,120 Speaker 6: Overall, they may still be shopping, but Japan has slowed 338 00:18:33,160 --> 00:18:36,400 Speaker 6: because you're going up against the huge comparisons. They may 339 00:18:36,440 --> 00:18:39,720 Speaker 6: still be going to Japan, but it's not an additional 340 00:18:39,840 --> 00:18:42,600 Speaker 6: uptick from what you're saying there. And also it's the 341 00:18:42,640 --> 00:18:45,520 Speaker 6: same thing with Europe and the Americas. A lot of 342 00:18:45,560 --> 00:18:48,400 Speaker 6: them are shopping more within China than they are shopping 343 00:18:48,840 --> 00:18:52,800 Speaker 6: outside of China, and it's something that's being watched very closely. 344 00:18:53,280 --> 00:18:56,120 Speaker 6: I think that as we move through the earning season, 345 00:18:56,600 --> 00:18:59,440 Speaker 6: I think there'll be more discussions about, well, when does 346 00:18:59,480 --> 00:19:02,480 Speaker 6: the compare and stabilized so you get to flat and 347 00:19:02,520 --> 00:19:04,320 Speaker 6: we're not there yet, Dana. 348 00:19:05,240 --> 00:19:10,360 Speaker 4: Most of America, Walmart target those types of places. What's 349 00:19:10,440 --> 00:19:12,359 Speaker 4: the business like there these days? 350 00:19:13,640 --> 00:19:16,400 Speaker 6: Feels very solid when you think about Walmart, and Walmart 351 00:19:16,520 --> 00:19:20,160 Speaker 6: keeps taking share. You're seeing it with new brands, You're 352 00:19:20,160 --> 00:19:23,280 Speaker 6: seeing it with pricing. You think about what they can 353 00:19:23,320 --> 00:19:27,159 Speaker 6: do also with online. Look at sixty percent of Walmart's 354 00:19:27,160 --> 00:19:31,960 Speaker 6: sales or food, so they're destination for goods and for essentials, 355 00:19:32,359 --> 00:19:35,520 Speaker 6: and it seems like they're a share gainer, as are 356 00:19:35,680 --> 00:19:40,040 Speaker 6: the off pricers. I think Target overall is still working 357 00:19:40,119 --> 00:19:43,880 Speaker 6: to find it's footing given the miscues that it's had. 358 00:19:45,080 --> 00:19:47,439 Speaker 2: Let me the blue Button the Detroit Lions Blue button. 359 00:19:47,560 --> 00:19:49,960 Speaker 2: I got to get this in for Lisa Mateo. Dana 360 00:19:50,000 --> 00:19:54,000 Speaker 2: Telsey Gingham is so in what is sex that they 361 00:19:54,000 --> 00:19:56,160 Speaker 2: have that they're doing with Gingham this summer. 362 00:19:56,440 --> 00:19:59,720 Speaker 6: For Lisa Mateo, I think you're get to see more 363 00:19:59,720 --> 00:20:01,679 Speaker 6: gig him. It is popular, But you know what the 364 00:20:01,720 --> 00:20:09,359 Speaker 6: hottest trend is absolutely have you heard about La boo boos? 365 00:20:09,560 --> 00:20:12,879 Speaker 2: Is Joe Feldman? Is Joe Feldman covering La boo boos? 366 00:20:13,920 --> 00:20:18,320 Speaker 6: No, he's not covering labuobus. But it's basically there's la boufous, 367 00:20:18,400 --> 00:20:20,399 Speaker 6: which are the fakes, there's La boo boos, which are 368 00:20:20,440 --> 00:20:23,160 Speaker 6: the reals, and try to get your hands on one 369 00:20:23,600 --> 00:20:27,400 Speaker 6: not so easy. But that is the hottest trend out 370 00:20:27,400 --> 00:20:30,760 Speaker 6: there lately, and it just started in twenty nineteen. 371 00:20:30,960 --> 00:20:34,600 Speaker 2: I held in my hands last night a gift from Shanghai, 372 00:20:34,720 --> 00:20:38,800 Speaker 2: China to afterthought. She was so happy. It's a light 373 00:20:39,000 --> 00:20:42,840 Speaker 2: blue it's like a rarer La boo boo and she's 374 00:20:42,920 --> 00:20:46,080 Speaker 2: worried of wearing it on her bag because it's not 375 00:20:46,160 --> 00:20:49,320 Speaker 2: the bag will get stolen after thoughts doing product? Are 376 00:20:49,359 --> 00:20:52,080 Speaker 2: you kidding that way? But you know the laboo boo 377 00:20:52,119 --> 00:20:55,240 Speaker 2: is the issue Dana Telsey, thank you for that nugget. 378 00:20:54,880 --> 00:20:56,600 Speaker 5: Is information, absolutely great. 379 00:20:56,760 --> 00:20:59,520 Speaker 2: She is the best. Dana TELSEI on the retail pulse 380 00:20:59,560 --> 00:21:02,960 Speaker 2: of America, from Joe Felman's Big Boxes over to what 381 00:21:03,080 --> 00:21:10,880 Speaker 2: luxury is doing here a black Away on Fifth Avenue. 382 00:21:11,520 --> 00:21:15,440 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 383 00:21:15,480 --> 00:21:18,520 Speaker 1: starting at seven am Eastern on Apple Corplay and Android 384 00:21:18,520 --> 00:21:21,520 Speaker 1: Auto with the Bloomberg Business app. You can also watch 385 00:21:21,600 --> 00:21:24,560 Speaker 1: us live every weekday on YouTube and always on the 386 00:21:24,560 --> 00:21:25,680 Speaker 1: Bloomberg terminal. 387 00:21:25,880 --> 00:21:29,760 Speaker 2: This is a conversation of the day on multiple fronts. 388 00:21:30,240 --> 00:21:35,359 Speaker 2: Francis Donald's work is exquisite in RBC Capital markets and 389 00:21:35,400 --> 00:21:38,760 Speaker 2: now we're going to overlay all of the research abilities 390 00:21:38,800 --> 00:21:44,000 Speaker 2: of the Royal Bank of Canada. Francis on tariffs that 391 00:21:44,119 --> 00:21:49,040 Speaker 2: are eighteen percent bundled down from twenty percent bundled. That 392 00:21:49,160 --> 00:21:53,199 Speaker 2: number will change tomorrow, but it's not three percent. You 393 00:21:53,280 --> 00:21:57,000 Speaker 2: and your company are living this across the border down 394 00:21:57,040 --> 00:22:02,000 Speaker 2: to windsor across the British Columbia. Are these double digit 395 00:22:02,240 --> 00:22:04,000 Speaker 2: new tariffs doable? 396 00:22:05,680 --> 00:22:07,600 Speaker 7: Well, We're gonna find out tom. 397 00:22:07,520 --> 00:22:09,760 Speaker 2: And it's a great experiment. 398 00:22:10,080 --> 00:22:11,560 Speaker 6: And what I. 399 00:22:11,520 --> 00:22:14,760 Speaker 7: Think is critical is we are in the largest trade 400 00:22:14,760 --> 00:22:17,119 Speaker 7: shop in one hundred years for the United States and 401 00:22:17,200 --> 00:22:19,760 Speaker 7: the rest of the world. And it is far too 402 00:22:19,880 --> 00:22:25,360 Speaker 7: early to assess what the impact will be when late 403 00:22:25,440 --> 00:22:29,200 Speaker 7: into Q three and the full impact, the full story, 404 00:22:29,280 --> 00:22:31,520 Speaker 7: the full study of tariffs. I don't think we're going 405 00:22:31,560 --> 00:22:33,720 Speaker 7: to feel comfortable saying how meaningful this was on the 406 00:22:33,840 --> 00:22:37,240 Speaker 7: US economy until late into twenty twenty six. Why, because 407 00:22:37,240 --> 00:22:40,640 Speaker 7: there's a significant process in play here. There was massive 408 00:22:40,680 --> 00:22:43,959 Speaker 7: front loading into the economy. Inventories are very very high. 409 00:22:44,119 --> 00:22:47,480 Speaker 7: Those inventories need to be depleted before we start seeing 410 00:22:47,480 --> 00:22:51,000 Speaker 7: imports at those higher tariff levels. Then you have to 411 00:22:51,000 --> 00:22:53,439 Speaker 7: make an assumption of who's going to end up paying 412 00:22:53,520 --> 00:22:55,879 Speaker 7: for that. Is it going to be producers or the 413 00:22:55,920 --> 00:22:58,679 Speaker 7: importers themselves? How much of that cost is going to 414 00:22:58,680 --> 00:23:00,560 Speaker 7: get passed on to the consumer. We're at the end 415 00:23:00,560 --> 00:23:03,600 Speaker 7: of the story, so they're two most important macro questions 416 00:23:03,600 --> 00:23:06,200 Speaker 7: in play right now for an economist is how long 417 00:23:06,240 --> 00:23:08,840 Speaker 7: does it take for inventories to be depleted? We think 418 00:23:08,880 --> 00:23:12,240 Speaker 7: about five months. Marry, it matters greatly which sector you're 419 00:23:12,280 --> 00:23:14,320 Speaker 7: in and how much is going to get passed on 420 00:23:14,320 --> 00:23:16,520 Speaker 7: to the consumer. And if I am a tom, let 421 00:23:16,520 --> 00:23:18,800 Speaker 7: me push back. I hear a lot. I don't think 422 00:23:18,800 --> 00:23:21,960 Speaker 7: consumers are going to take the brunt of this. Producers 423 00:23:22,040 --> 00:23:24,280 Speaker 7: or businesses are going to absorb the entirety of it. 424 00:23:24,320 --> 00:23:27,199 Speaker 7: Is that really bullish? Do we really like the story 425 00:23:27,240 --> 00:23:29,359 Speaker 7: that businesses are going to see all of the tariff 426 00:23:29,400 --> 00:23:31,440 Speaker 7: impact that they won't pass it on to the consumer. 427 00:23:31,680 --> 00:23:34,520 Speaker 7: Because if businesses are taking on that tariff impact, that 428 00:23:34,640 --> 00:23:36,720 Speaker 7: means margin compression for them and they're going to have 429 00:23:36,760 --> 00:23:39,119 Speaker 7: to cut costs another way. So, Tom, do you know 430 00:23:39,200 --> 00:23:42,919 Speaker 7: the old school trolley problem pick the lane between. You 431 00:23:43,000 --> 00:23:45,600 Speaker 7: go down one track and you're on one track and 432 00:23:45,640 --> 00:23:47,480 Speaker 7: you hurt one person, or you go down another and 433 00:23:47,520 --> 00:23:50,399 Speaker 7: you hit one hundred thousand or whatever. We're on a 434 00:23:50,560 --> 00:23:53,200 Speaker 7: trolley problem in America right now, which is we're either 435 00:23:53,280 --> 00:23:55,520 Speaker 7: going to see the costs of tariff passed on to 436 00:23:55,600 --> 00:24:00,160 Speaker 7: consumers and they'll face higher inflation and prices, or we're 437 00:24:00,160 --> 00:24:02,440 Speaker 7: going to see that absorbed by businesses and that probably 438 00:24:02,520 --> 00:24:04,600 Speaker 7: leads to job losses, or we might end up with 439 00:24:04,640 --> 00:24:06,280 Speaker 7: a little bit of both. And I don't think we're 440 00:24:06,320 --> 00:24:08,240 Speaker 7: really going to be able to answer that question into 441 00:24:08,240 --> 00:24:09,440 Speaker 7: well into twenty twenty six. 442 00:24:09,600 --> 00:24:13,000 Speaker 4: How are the folks in your Canada thinking about tariffs 443 00:24:13,000 --> 00:24:14,960 Speaker 4: in the trade situation, trade politi with. 444 00:24:14,960 --> 00:24:17,479 Speaker 7: The US, Well, Canadians are actually thinking a little bit 445 00:24:17,560 --> 00:24:19,960 Speaker 7: less about trade policy now, which is a huge one 446 00:24:20,000 --> 00:24:22,600 Speaker 7: eighty over where the country was in February when it 447 00:24:22,640 --> 00:24:25,920 Speaker 7: was the largest victim of American trade policy. Now Canada 448 00:24:25,960 --> 00:24:30,000 Speaker 7: actually has the lowest average tariff rate of all countries 449 00:24:30,200 --> 00:24:32,680 Speaker 7: that the United States trades with. So if you're looking 450 00:24:32,760 --> 00:24:36,360 Speaker 7: for shelter from the trade war storm, Canada surprisingly ends 451 00:24:36,400 --> 00:24:38,240 Speaker 7: up being where you want to be. Of course, still 452 00:24:38,320 --> 00:24:40,840 Speaker 7: very painful for certain sectors in that country. Steal and 453 00:24:40,880 --> 00:24:43,600 Speaker 7: aluminum for example, copper are going to be getting some attention, 454 00:24:44,359 --> 00:24:47,200 Speaker 7: but right now the focus has turned towards other issues 455 00:24:47,280 --> 00:24:50,040 Speaker 7: in play. And it's just an example I think of 456 00:24:50,119 --> 00:24:53,400 Speaker 7: how quickly the tariff story can go from being disastrous 457 00:24:53,600 --> 00:24:55,720 Speaker 7: to actually being more of a cut on the arm. 458 00:24:55,680 --> 00:24:58,440 Speaker 2: You get you get, say, economic data today model at 459 00:24:58,480 --> 00:25:03,160 Speaker 2: real GDP forward phenomenal GDP as well with the inflation overlay. 460 00:25:03,280 --> 00:25:06,520 Speaker 7: So we're looking at real GDP roughly between one and 461 00:25:06,560 --> 00:25:08,159 Speaker 7: two percent by the end of this year, let's call 462 00:25:08,240 --> 00:25:10,320 Speaker 7: it one and a half percent. And I like to 463 00:25:10,359 --> 00:25:13,320 Speaker 7: simplify this too, are we growing below two percent? Or 464 00:25:13,320 --> 00:25:16,320 Speaker 7: are we growing above two above two percent? And to 465 00:25:16,400 --> 00:25:19,920 Speaker 7: my excellent quality in equity strategy, Lori Calvacino, we talk 466 00:25:19,960 --> 00:25:21,919 Speaker 7: about this a lot because we have to have a 467 00:25:22,000 --> 00:25:25,360 Speaker 7: sense if we're growing above two percent, your economy is accelerating. 468 00:25:25,359 --> 00:25:27,959 Speaker 7: It tends to be bullish for asset classes. We're not 469 00:25:28,119 --> 00:25:31,080 Speaker 7: gonna get there this year. You've got a moderating consumer. 470 00:25:31,359 --> 00:25:34,320 Speaker 7: Even though we had stronger retail sales today, you got 471 00:25:34,320 --> 00:25:36,760 Speaker 7: some weight coming through from trades. And then on top 472 00:25:36,800 --> 00:25:38,680 Speaker 7: of that you have housing, which is really a lost 473 00:25:38,720 --> 00:25:40,960 Speaker 7: growth engine in the US. So it's hard to get 474 00:25:41,000 --> 00:25:45,520 Speaker 7: above that metaphorical or that literal two percent number. And 475 00:25:45,560 --> 00:25:47,600 Speaker 7: that's always how I think about the US economy is 476 00:25:47,680 --> 00:25:49,639 Speaker 7: are you below zero, in which case you're in recession, 477 00:25:49,800 --> 00:25:52,119 Speaker 7: or are you at that critical two percent level? And 478 00:25:52,160 --> 00:25:55,120 Speaker 7: I just can't see it for twenty twenty five, unfortunately, Francis. 479 00:25:54,800 --> 00:25:56,880 Speaker 5: How about the US labor market? 480 00:25:56,960 --> 00:25:59,800 Speaker 4: Here, President Trump and the administration has effectively closed off 481 00:25:59,840 --> 00:26:03,560 Speaker 4: the southern border. How does that impact the labor market 482 00:26:03,600 --> 00:26:04,719 Speaker 4: if at all? I'm not sure. 483 00:26:04,920 --> 00:26:07,960 Speaker 7: Oh, it impacts the labor market, especially within the context 484 00:26:08,000 --> 00:26:11,280 Speaker 7: of what we call the most important American theme, that 485 00:26:11,320 --> 00:26:15,840 Speaker 7: nobody talks about, which is America needs workers, not jobs. 486 00:26:15,880 --> 00:26:19,639 Speaker 7: It is seeing aggressive and accelerating mass retirements. Two million 487 00:26:19,680 --> 00:26:23,640 Speaker 7: Americans are retiring every single year. That's getting bigger. It's 488 00:26:23,720 --> 00:26:28,280 Speaker 7: distorting a range of figures. We've got three retirees for 489 00:26:28,359 --> 00:26:31,840 Speaker 7: every one unemployed new entrant in the US right now. 490 00:26:32,080 --> 00:26:35,040 Speaker 7: You've got a skills mismatch occurring across this labor market 491 00:26:35,040 --> 00:26:37,960 Speaker 7: as we have exceptional needs for healthcare. Did you notice 492 00:26:37,960 --> 00:26:39,960 Speaker 7: that about half of the job gains in the United 493 00:26:39,960 --> 00:26:42,760 Speaker 7: States right now are going into the healthcare sector. That 494 00:26:42,840 --> 00:26:45,399 Speaker 7: effectively means that your job market is no longer a 495 00:26:45,400 --> 00:26:49,480 Speaker 7: helpful cyclical indicator. It's getting bordered by these structural themes, 496 00:26:49,840 --> 00:26:52,520 Speaker 7: and immigration is going to exacerbate some of these problems. 497 00:26:52,520 --> 00:26:55,400 Speaker 2: Are you following the fed derby? What is your advice 498 00:26:56,160 --> 00:27:00,439 Speaker 2: to our listeners and viewers, in particularly your advice council 499 00:27:00,600 --> 00:27:05,520 Speaker 2: to Global Wall Street and monitoring the Trump Powell escapade. 500 00:27:07,280 --> 00:27:09,440 Speaker 7: Well, here's the advice I give myself when I wake 501 00:27:09,520 --> 00:27:13,160 Speaker 7: up and see the news headlines, which is, remember focus 502 00:27:13,280 --> 00:27:16,399 Speaker 7: on the data. And my strong suspicion is that the 503 00:27:16,400 --> 00:27:19,399 Speaker 7: inflation data will be the make or break on what 504 00:27:19,440 --> 00:27:22,040 Speaker 7: the FED does this year, not who's in the position, 505 00:27:22,359 --> 00:27:25,480 Speaker 7: not who's criticizing the position, but what happens with the 506 00:27:25,480 --> 00:27:28,439 Speaker 7: American economy, and our sense is that inflation is going 507 00:27:28,440 --> 00:27:32,040 Speaker 7: to reaccelerate into your end. Those structural factors are going 508 00:27:32,080 --> 00:27:34,560 Speaker 7: to keep a floor under the labor market, make sure 509 00:27:34,560 --> 00:27:37,119 Speaker 7: that the unemployment rate stays low, and that's going to 510 00:27:37,160 --> 00:27:40,080 Speaker 7: make it really hard for anybody in the Federal Reserve 511 00:27:40,160 --> 00:27:43,480 Speaker 7: to cut rates. So even though yes, we're seeing some noise, 512 00:27:43,520 --> 00:27:46,119 Speaker 7: it matters. We're thinking about the value of the institutions, 513 00:27:46,160 --> 00:27:50,240 Speaker 7: the relationship between monetary policy and fiscal policy, that critical 514 00:27:50,280 --> 00:27:54,040 Speaker 7: FED independence. At the end of the day, the FED outlook, 515 00:27:54,160 --> 00:27:56,960 Speaker 7: regardless of who's in the position, comes down to the data. 516 00:27:57,040 --> 00:27:59,080 Speaker 7: And we can say that Tom, you and me because 517 00:27:59,080 --> 00:28:02,080 Speaker 7: we've lived through many cycles and whoever's in the position, 518 00:28:02,160 --> 00:28:04,639 Speaker 7: Sure there's a bias, maybe it changes twenty five basis 519 00:28:04,640 --> 00:28:06,960 Speaker 7: points here or there, But the future of the American 520 00:28:06,960 --> 00:28:10,199 Speaker 7: economy rests on these broader themes. That size of the 521 00:28:10,200 --> 00:28:13,439 Speaker 7: deficit mass retirees not necessarily holds up. 522 00:28:13,720 --> 00:28:17,720 Speaker 2: Just as an inside the central bank, independence of David 523 00:28:17,840 --> 00:28:22,240 Speaker 2: Dodge's Central Bank of Canada is more independent than the 524 00:28:22,359 --> 00:28:25,000 Speaker 2: history of the Bank of England, isn't it. I would 525 00:28:25,000 --> 00:28:28,440 Speaker 2: suggest the Commonwealth had a more independent central bank over 526 00:28:28,520 --> 00:28:30,520 Speaker 2: decades than the mother country. 527 00:28:30,680 --> 00:28:33,240 Speaker 7: Well, that's an interesting takeaway. And the other one is 528 00:28:33,280 --> 00:28:36,159 Speaker 7: that most of the central banks you're referencing are have 529 00:28:36,280 --> 00:28:39,560 Speaker 7: solely one mandate, which is inflation targeting, and as a result, 530 00:28:39,560 --> 00:28:41,120 Speaker 7: it's easier for them to do. 531 00:28:41,160 --> 00:28:43,440 Speaker 2: We have a new third mandate called Donald Trump. 532 00:28:44,720 --> 00:28:46,880 Speaker 7: Well, it makes it more complicated for a federal reserve 533 00:28:46,880 --> 00:28:49,520 Speaker 7: that's going to be balancing a dual mandate and political 534 00:28:49,520 --> 00:28:53,080 Speaker 7: pressure and financial stability risks. I would rather be a 535 00:28:53,120 --> 00:28:55,720 Speaker 7: Bank of Canada or Bank of England central banker right 536 00:28:55,720 --> 00:28:57,240 Speaker 7: now than a federal Reserve member. 537 00:28:57,920 --> 00:29:00,520 Speaker 4: US consumers hanging in there with sell some retails sales 538 00:29:00,560 --> 00:29:03,920 Speaker 4: today there, I mean, I mean, it's just I think 539 00:29:03,920 --> 00:29:08,280 Speaker 4: it's just amazing how strong, relatively speaking, the US consumer 540 00:29:09,120 --> 00:29:11,840 Speaker 4: is today, given some of the uncertainties after in a 541 00:29:11,880 --> 00:29:14,680 Speaker 4: market place, it just doesn't feel like it's playing out 542 00:29:15,240 --> 00:29:17,760 Speaker 4: in the daily behavior of yours consumers. 543 00:29:17,800 --> 00:29:19,440 Speaker 7: Do you know the first thing you learn when you 544 00:29:19,480 --> 00:29:21,800 Speaker 7: become a US economist day one on the job. They 545 00:29:21,840 --> 00:29:23,440 Speaker 7: bring you on the desk that set you up with 546 00:29:23,480 --> 00:29:27,000 Speaker 7: your Bloomberg terminal, and then they say, first rule, never 547 00:29:27,040 --> 00:29:30,440 Speaker 7: bet against the US consumer. This is the first rule 548 00:29:30,640 --> 00:29:31,760 Speaker 7: of US economics. 549 00:29:31,920 --> 00:29:34,200 Speaker 2: So what is the state of the US consumers. It's 550 00:29:34,240 --> 00:29:36,040 Speaker 2: partitioned into two. 551 00:29:35,880 --> 00:29:39,560 Speaker 7: Americas, that's right. So we refer to the US economy 552 00:29:39,640 --> 00:29:43,040 Speaker 7: right now as not one economy, but two economies, two Americas, 553 00:29:43,120 --> 00:29:45,920 Speaker 7: and the evolution of what we call the K shaped economy. 554 00:29:46,080 --> 00:29:48,160 Speaker 7: When I look at this consumer we have to be 555 00:29:48,240 --> 00:29:52,120 Speaker 7: really cautious not extrapolating high numbers for retail sales, both 556 00:29:52,160 --> 00:29:54,880 Speaker 7: because the cycle is distorted by these tariffs, but also 557 00:29:55,000 --> 00:29:57,800 Speaker 7: because we know that they're being disproportionately supported by high 558 00:29:57,880 --> 00:30:00,280 Speaker 7: income households. And so if you're trying to for past 559 00:30:00,360 --> 00:30:02,520 Speaker 7: the American economy right now, you have to spend a 560 00:30:02,520 --> 00:30:05,200 Speaker 7: lot more time thinking about that top ten percent than 561 00:30:05,200 --> 00:30:07,440 Speaker 7: the other ninety percent. But if you're a business and 562 00:30:07,480 --> 00:30:10,800 Speaker 7: your end clients are not the top ten percent, if 563 00:30:10,800 --> 00:30:12,600 Speaker 7: you're a policy maker and you want to make the 564 00:30:12,680 --> 00:30:15,480 Speaker 7: lives of Americans better, you have to be cautious about 565 00:30:15,520 --> 00:30:19,240 Speaker 7: overinterpreting these strong consumer numbers as being representative of the whole. 566 00:30:19,680 --> 00:30:23,800 Speaker 4: So if you're the Federal Reserve, you see these strong 567 00:30:23,880 --> 00:30:27,600 Speaker 4: retail sales numbers. You see moderate inflation. Maybe it's kicking 568 00:30:27,640 --> 00:30:29,800 Speaker 4: up a little bit in some parts of the economy. 569 00:30:29,920 --> 00:30:34,040 Speaker 4: Growth is slowing, but there's still growth. What I mean 570 00:30:34,120 --> 00:30:36,400 Speaker 4: the Fed, I mean just stay on the beach and 571 00:30:36,440 --> 00:30:38,240 Speaker 4: not do anything, stay on the golf course, not do 572 00:30:38,320 --> 00:30:39,240 Speaker 4: anything right. 573 00:30:39,040 --> 00:30:41,200 Speaker 7: Well, the RBC call, in conjunction with our head of 574 00:30:41,280 --> 00:30:44,240 Speaker 7: US Rates Blake Gwyn, is that the Fed can't really 575 00:30:44,240 --> 00:30:47,040 Speaker 7: do much until December. They won't have to win until 576 00:30:47,040 --> 00:30:50,640 Speaker 7: December December first, and that's just effectively a time to 577 00:30:50,680 --> 00:30:53,760 Speaker 7: gate issue. We don't have enough deterioration in either the 578 00:30:53,800 --> 00:30:56,560 Speaker 7: inflation data or the job's number to give enough of 579 00:30:56,560 --> 00:30:59,000 Speaker 7: a mandate. But it's clear to us as a team 580 00:30:59,080 --> 00:31:01,080 Speaker 7: right now that this is a said that wants to 581 00:31:01,080 --> 00:31:03,360 Speaker 7: get back to a more neutral level of rates, and 582 00:31:03,360 --> 00:31:05,800 Speaker 7: there's a bias towards as soon as the data allows 583 00:31:05,800 --> 00:31:08,320 Speaker 7: some permissions to move in that direction. And that's why 584 00:31:08,360 --> 00:31:09,760 Speaker 7: the cut bias is still in our outlet. 585 00:31:09,880 --> 00:31:12,840 Speaker 2: I get one minute, where's capex? I mean the AI 586 00:31:12,960 --> 00:31:15,960 Speaker 2: think brook is out of the huge report today. Where's capex? 587 00:31:16,000 --> 00:31:17,320 Speaker 2: According to the Royal Bank. 588 00:31:17,240 --> 00:31:21,120 Speaker 7: Canada, another structural trend that we should not be downplaying 589 00:31:21,160 --> 00:31:23,800 Speaker 7: and making sure that we continue to disaggregate between the 590 00:31:23,840 --> 00:31:26,720 Speaker 7: structural and the cyclical. But this is one more example 591 00:31:26,720 --> 00:31:30,240 Speaker 7: of that structural trend of AI development in Capex keeping 592 00:31:30,280 --> 00:31:32,720 Speaker 7: a floor under how low growth can get with a 593 00:31:32,800 --> 00:31:36,320 Speaker 7: seven percent deficit to GDP from the government, an ultra 594 00:31:36,400 --> 00:31:40,040 Speaker 7: wealthy doing very well top consumer, and then the Capex 595 00:31:40,080 --> 00:31:43,000 Speaker 7: AI story. It's really difficult to get a decline. So 596 00:31:43,040 --> 00:31:44,959 Speaker 7: we are watching, of course AI really closely. But one 597 00:31:44,960 --> 00:31:46,840 Speaker 7: thing I got to say, Tom, is there are limitations 598 00:31:46,880 --> 00:31:49,520 Speaker 7: on this watch. The electrical grid. We think about that 599 00:31:49,560 --> 00:31:52,440 Speaker 7: more than we ever have before in US economics. How 600 00:31:52,520 --> 00:31:53,480 Speaker 7: much expansion is there? 601 00:31:53,680 --> 00:31:57,200 Speaker 2: I mean, Texas sort of needs in Ontario Quebec Hydro. 602 00:31:57,720 --> 00:32:01,240 Speaker 2: Dan fuss Up at Looma Sales was a majority shareholder 603 00:32:01,240 --> 00:32:03,920 Speaker 2: at one point. You got a well run grid up there. 604 00:32:04,000 --> 00:32:08,600 Speaker 7: Right, world needs Quebec and Ontario type electricity. It's some 605 00:32:08,680 --> 00:32:11,440 Speaker 7: of the most renewable, reliable, and cheap in the world. 606 00:32:11,600 --> 00:32:13,600 Speaker 7: And you may not know this, Tom, but there's currently 607 00:32:13,600 --> 00:32:16,920 Speaker 7: a plan to build out the electrical so that in 608 00:32:16,960 --> 00:32:20,040 Speaker 7: Manhattan itself, twenty percent of electricity going to be fueled 609 00:32:20,040 --> 00:32:22,680 Speaker 7: by Quebec, called the Champlain Project. So when you turn 610 00:32:22,720 --> 00:32:24,360 Speaker 7: on your lights or turn them off or bring your 611 00:32:24,400 --> 00:32:26,240 Speaker 7: AC on. I want you twenty percent. 612 00:32:26,000 --> 00:32:28,880 Speaker 2: Of why there's all the construction on fifty ninth Street. 613 00:32:28,880 --> 00:32:30,720 Speaker 2: You can't even get down the DM streets because of 614 00:32:30,760 --> 00:32:31,800 Speaker 2: Quebec hydro. 615 00:32:31,600 --> 00:32:35,080 Speaker 7: Quebec hydrobec hydro. Something to pay attention to on a 616 00:32:35,080 --> 00:32:35,400 Speaker 7: good Now? 617 00:32:35,400 --> 00:32:36,880 Speaker 2: Are other people very good? 618 00:32:37,040 --> 00:32:37,400 Speaker 7: For instance? 619 00:32:37,440 --> 00:32:39,320 Speaker 2: Take you so much? Fransis Donald RBC. 620 00:32:39,600 --> 00:32:43,480 Speaker 1: This is the Bloomberg Surveillance Podcast. Listen live each weekday 621 00:32:43,480 --> 00:32:46,520 Speaker 1: starting at seven am Eastern on Apple Corplay and Android 622 00:32:46,520 --> 00:32:49,560 Speaker 1: Auto with the Bloomberg Business app. You can also listen 623 00:32:49,640 --> 00:32:52,920 Speaker 1: live on Amazon Alexa from our flagship New York station, 624 00:32:53,480 --> 00:32:56,120 Speaker 1: Just say Alexa Play Bloomberg eleven thirty. 625 00:32:56,240 --> 00:32:59,360 Speaker 2: My Newspaper's Lisa Matteo highlight of the day. She looks 626 00:32:59,360 --> 00:33:03,880 Speaker 2: at forty two different newspapers. Do you really read lamand 627 00:33:03,960 --> 00:33:04,440 Speaker 2: and French? 628 00:33:04,520 --> 00:33:08,480 Speaker 4: She does, of course, Mercy. 629 00:33:09,480 --> 00:33:12,640 Speaker 2: Mercy, mercy. Okay, what do you got today? 630 00:33:12,880 --> 00:33:13,360 Speaker 7: Okay? 631 00:33:13,840 --> 00:33:16,040 Speaker 8: You've heard of diamonds are a girl's best friend? Right, 632 00:33:16,360 --> 00:33:21,640 Speaker 8: it looks like lab grown diamonds are actually this best friend. 633 00:33:22,240 --> 00:33:24,880 Speaker 8: They look the same, apparently, they're. 634 00:33:24,720 --> 00:33:27,160 Speaker 7: Just as strong, exactly the same, Yeah. 635 00:33:27,160 --> 00:33:29,480 Speaker 8: But a fraction of the price. Yes, and that is 636 00:33:29,520 --> 00:33:31,600 Speaker 8: the difference, and that's the problem. We had the CEO 637 00:33:31,680 --> 00:33:33,960 Speaker 8: of de Beers talking with the Wall Street journals. 638 00:33:34,160 --> 00:33:34,760 Speaker 7: He's fired up. 639 00:33:34,760 --> 00:33:37,160 Speaker 4: He's calling it a need a survey to say, just 640 00:33:37,200 --> 00:33:42,120 Speaker 4: give me a one hundred women, saying if you're off you. 641 00:33:42,120 --> 00:33:44,600 Speaker 8: A you know, a ring engagement? 642 00:33:44,720 --> 00:33:44,880 Speaker 3: Na? 643 00:33:45,000 --> 00:33:47,320 Speaker 2: Yeah, but is there something you'd like to tell us? 644 00:33:47,920 --> 00:33:53,360 Speaker 4: I'm wondering would women accept the lab grown diamond versus them? 645 00:33:53,760 --> 00:33:54,040 Speaker 6: Okay? 646 00:33:54,120 --> 00:33:56,920 Speaker 2: Are you are you going to take a carrot and 647 00:33:56,960 --> 00:34:00,760 Speaker 2: a half lab grown over some joy from Beers fero 648 00:34:00,760 --> 00:34:02,280 Speaker 2: point seventy five carrots? 649 00:34:02,400 --> 00:34:05,400 Speaker 8: I would save the money and put it towards somewhere else. 650 00:34:05,800 --> 00:34:06,520 Speaker 7: That's what I would do. 651 00:34:06,600 --> 00:34:07,080 Speaker 4: And it's my. 652 00:34:08,560 --> 00:34:14,239 Speaker 7: Girlfriend I would tell And that's what it's saying. 653 00:34:14,239 --> 00:34:16,480 Speaker 8: It's you know, you have Signet Jewelers, right, they partner 654 00:34:16,520 --> 00:34:18,680 Speaker 8: with the Beers. They did this marketing campaign. But if 655 00:34:18,680 --> 00:34:22,440 Speaker 8: you look at Signet even they're starting to add these 656 00:34:22,520 --> 00:34:23,120 Speaker 8: lab room. 657 00:34:24,719 --> 00:34:28,400 Speaker 2: Their two carrots. 658 00:34:28,719 --> 00:34:32,719 Speaker 7: It's two carrots. Okay. Have you seen a movie in imax? 659 00:34:32,760 --> 00:34:34,080 Speaker 7: Have you had that experience? 660 00:34:34,360 --> 00:34:36,759 Speaker 8: It's right, the big screen, you get the whole theater, 661 00:34:37,520 --> 00:34:41,560 Speaker 8: the business behind it. Okay, so it licenses technology to theaters, right, 662 00:34:41,760 --> 00:34:44,680 Speaker 8: It generates more than ten percent of box office blockbusters, 663 00:34:44,760 --> 00:34:48,359 Speaker 8: and it attracts major filmmakers because they use their technology. 664 00:34:48,840 --> 00:34:51,760 Speaker 8: So who doesn't like it? Are actually the movie theater 665 00:34:52,080 --> 00:34:57,160 Speaker 8: chains some of the largest US theaters. You have, Cinemak, Regal, Marcus, right, 666 00:34:57,200 --> 00:35:00,000 Speaker 8: they starting to tell what what sources are telling Bloomer 667 00:35:00,160 --> 00:35:02,560 Speaker 8: is that they're holding these talks about doing a joint 668 00:35:03,000 --> 00:35:06,040 Speaker 8: marketing of their big screen theaters. Because if you go 669 00:35:06,080 --> 00:35:08,520 Speaker 8: to Cinema for example, my house, we go to Cinemak, 670 00:35:08,560 --> 00:35:11,160 Speaker 8: they have their big screens. They call them x D right, 671 00:35:11,239 --> 00:35:15,719 Speaker 8: that's their Imax. You know, Regal has r p X. 672 00:35:16,239 --> 00:35:19,640 Speaker 8: They don't use Imax technology. They're not as big as Imax. 673 00:35:20,040 --> 00:35:22,080 Speaker 8: But the chains are starting to say, you know what, 674 00:35:22,200 --> 00:35:26,920 Speaker 8: maybe we should unite around one brand it together. 675 00:35:27,040 --> 00:35:30,239 Speaker 2: Yeah, you two are too young for this Cinerama, which 676 00:35:30,320 --> 00:35:32,920 Speaker 2: was a failure. The first day it came out. You 677 00:35:32,920 --> 00:35:36,640 Speaker 2: could see the scenes, the vertical scenes on the movie 678 00:35:36,719 --> 00:35:40,160 Speaker 2: screen where they're trying to widen the image or whatever. 679 00:35:40,680 --> 00:35:42,640 Speaker 2: I mean, Paul, does do people really want to pay 680 00:35:42,719 --> 00:35:43,800 Speaker 2: up for Imax. 681 00:35:43,600 --> 00:35:47,160 Speaker 4: Versus They absolutely do for the big you know, big 682 00:35:47,200 --> 00:35:49,240 Speaker 4: blockbuster kind of movies. 683 00:35:49,520 --> 00:35:50,239 Speaker 3: You know that kind of thing. 684 00:35:52,040 --> 00:35:54,640 Speaker 8: Okay, so these are for all the space junkies out there. 685 00:35:55,160 --> 00:35:58,560 Speaker 8: A massive rock from Mars it landed on Earth, just 686 00:35:58,680 --> 00:35:59,920 Speaker 8: sold for a record. 687 00:36:00,000 --> 00:36:00,280 Speaker 7: Okay. 688 00:36:00,400 --> 00:36:02,960 Speaker 8: So the backstory is it broke off from Mars when 689 00:36:02,960 --> 00:36:04,200 Speaker 8: an asteroid struck the planet. 690 00:36:04,280 --> 00:36:04,440 Speaker 2: Right. 691 00:36:04,719 --> 00:36:07,200 Speaker 8: It's fifty four pounds about fourteen inches long. 692 00:36:07,400 --> 00:36:08,680 Speaker 7: It traveled to the Earth. 693 00:36:08,719 --> 00:36:11,120 Speaker 8: It landed in a desert in northwest Africa, and some 694 00:36:11,320 --> 00:36:13,839 Speaker 8: meteorite hunter found it back in twenty three years. 695 00:36:13,920 --> 00:36:14,520 Speaker 4: I saw this. 696 00:36:15,320 --> 00:36:18,160 Speaker 8: Because they tested and they take a sample of it 697 00:36:18,200 --> 00:36:21,279 Speaker 8: and they test it and it has the same substances 698 00:36:21,360 --> 00:36:22,160 Speaker 8: that the planet. 699 00:36:22,280 --> 00:36:23,920 Speaker 2: Mark Damon doesn't have anything. 700 00:36:25,160 --> 00:36:25,520 Speaker 5: Nothing. 701 00:36:25,520 --> 00:36:27,720 Speaker 7: You didn't sign off on this, but it did sell. 702 00:36:27,960 --> 00:36:31,960 Speaker 8: Southby's had an auction, okay, five point three million dollars. 703 00:36:32,520 --> 00:36:33,480 Speaker 7: This is a record. 704 00:36:33,600 --> 00:36:37,000 Speaker 2: I mean it's so it's like somebody puts the hunk 705 00:36:37,040 --> 00:36:38,560 Speaker 2: of Mars in their rock garden. 706 00:36:39,960 --> 00:36:42,800 Speaker 4: You know, fine, I mean all right, I mean I 707 00:36:42,840 --> 00:36:44,560 Speaker 4: don't know how you figure it out, but all right, 708 00:36:44,640 --> 00:36:45,040 Speaker 4: go for it. 709 00:36:45,080 --> 00:36:46,760 Speaker 7: And it is a market selling meteorite. 710 00:36:47,640 --> 00:36:50,839 Speaker 2: We've generated a heated response. Thank you across this nation 711 00:36:50,960 --> 00:36:55,279 Speaker 2: and worldwide for listening. Nobody cares about Glenn Hubbard or 712 00:36:55,360 --> 00:36:59,800 Speaker 2: Steve Lakeley was brilliant on ETFs and fixed income Sarah 713 00:36:59,800 --> 00:37:02,200 Speaker 2: and the control room goes, yeah, I'd go for the 714 00:37:02,280 --> 00:37:05,120 Speaker 2: lab Grown. Look, we got a huge response. 715 00:37:06,360 --> 00:37:07,080 Speaker 5: Sarah's the plot. 716 00:37:07,239 --> 00:37:08,160 Speaker 7: I know, I know. 717 00:37:08,400 --> 00:37:10,640 Speaker 8: I said I would tell my son for his girlfriend, 718 00:37:10,840 --> 00:37:13,239 Speaker 8: stick with the lab Grown. Save yourself some money, put 719 00:37:13,280 --> 00:37:14,080 Speaker 8: it down toward a door. 720 00:37:14,120 --> 00:37:15,200 Speaker 7: I'm paying for a house. 721 00:37:15,040 --> 00:37:18,520 Speaker 4: Or something interesting. I took some of my Merrilynch investment 722 00:37:18,600 --> 00:37:20,160 Speaker 4: banking bonus. 723 00:37:20,239 --> 00:37:25,000 Speaker 2: Right, Okay, listen to toils. The newspapers thank us so much. 724 00:37:25,960 --> 00:37:30,799 Speaker 1: This is the Bloomberg Surveillance podcast, available on Apple, Spotify, 725 00:37:30,920 --> 00:37:35,200 Speaker 1: and anywhere else you get your podcasts. Listen live each weekday, 726 00:37:35,320 --> 00:37:38,799 Speaker 1: seven to ten am Eastern on Bloomberg dot com, the 727 00:37:38,880 --> 00:37:42,920 Speaker 1: iHeartRadio app, tune In, and the Bloomberg Business app. You 728 00:37:42,920 --> 00:37:46,279 Speaker 1: can also watch us live every weekday on YouTube and 729 00:37:46,480 --> 00:37:48,240 Speaker 1: always on the Bloomberg terminal.